To derive its report, the research team studied the results of a Axiometrics' survey of some 13,700 property managers nationally. Apartment managers in the top 20 national markets reported better rental revenues in the first quarter, as compared with the four preceding quarters. Yet because the results are forward looking by about three months and may not show up in earnings reports until the second quarter, REIT management teams are not expected to increase their guidance until then. Once all the numbers are out, first-quarter apartment REIT earnings should be in line with Wall Street expectations.

While same-store revenues may be performing better than initially expected, it won't be surprising to see management teams remain conservative since the first quarter tends to be a low demand indicator. Management teams, says BofA-ML research analyst Michelle Ko, "will feel more comfortable raising their expectations for same-store net operating income after the high turnover quarters," the second and third quarters.

Still, rental revenue improvements for the top US markets were particularly encouraging. Revenues declined by only 3.3% between the first quarter of 2009 and the first quarter of 2010. That's a considerable improvement over the prior four quarters, when the year-over-year decreases ranged from -6.1% to -9.4%. What's more, quarterly revenue growth was in the black for the first time since the second quarter of 2009, up 10 basis points during the first three months of the year. And revenues for the month of March were up 0.8% compared to February, with 18 out of 20 markets showing growth.