Investors can expect to see the benefits of this shift into supply constrained markets in next year's results, CEO Doug Crocker told analysts in this morning's third quarter conference call. He said that the national apartment market, overall, continues to be "phenomenally strong".

Management says that they have been exiting markets like Arizona, Las Vegas and Colorado Springs where there are "low barriers to entry" and shifting capital to markets where new supply is expected to be minimal. The trust reported that that it has disposed of $245 million worth of properties since the end of the third quarter, while the trust has acquired properties worth $160 million during the third quarter. Management said that 86% of acquisitions have been in markets it deems supply-constrained, which include markets in the Northeast and selected California markets.

The trust has met its $600 million disposition goal for the year already, not including the $400 million or so the trust expects to reap from joint venture activity within the existing portfolio. Management said it is becoming increasingly difficult to execute the recycling strategy because CAP rates are not moving in tandem with interest rates movements. Next years assumptions, management said, include a negative 150 basis point arbitrage between buy and sell prices to anticipate for these difficult conditions.