Apartment REITs have performed generally well and can attest to solid balance sheets, enhanced options to raise capital and strong operational discipline, according to RealPage's report on the year's second quarter earnings calls. But at the same time, they are facing challenging conditions in both their industry and the overall economic environment. 

In response, many multifamily REITs are calling on four strategies to overcome the current biggest hurdles.

Diversify markets. Doing so helps offset supply headwinds, particularly in the Sun Belt region. It also helped increase investment activity in the second quarter when many of the successful REITs were located in smaller, secondary markets such as Midland/Odessa, Texas, Salisbury, Md., and Spokane, Wash. In fact, 17 out of the top 20 markets were in these kinds of smaller metros. Some also emphasize rebalancing their portfolio across geographic regions where the pandemic showed weaknesses in specific area strategies. For example, Equity Residential used this tactic to expand beyond its coastal markets into other high-growth areas such as Denver, Dallas, Austin and Atlanta. The company also balanced urban and suburban assets to lessen issues that COVID-19 created in more densely populated urban cores.