Revenue brought in by multifamily real estate investment trusts is expected to grow at an annualized rate of 4.6% in 2011, according to an outlook released by investment bank Keefe, Bruyette & Woods. That estimate is up from the firm's previous estimate of 3.6% released in early December. KBW said that as the recovery gains strength, so do prospective outlooks, and that "sunny days" are in sight for multifamily REITs next year. "The Great Recession weighed heavily on fundamentals, driving down revenue (rent and occupancy) and (net operating incomes) across the board," the report said. "But improving consumer sentiment, unbundling of pent-up demand (i.e. new household formation) and a declining homeownership rate have 'jump-started' a resurgence that should accelerate … driving a recovery that we believe has legs through 2013." KBW forecast a 2.5% expense rate, which, when coupled with the rate of revenue growth, would result in a 6.1% increase in net operating income for 2011. Given these statistics, 2011 would mark the best full-year operating performance since 2006, when the net operating income for multifamily REITs increased 7.3%, KBW said. For 2012, KBW expects revenue growth at 6.4%, up from a previous estimate of 5.4%, the expense rate to increase by 3%, and NOI growth to hit 8.6%, up from a previous estimate of 7.1%. For 2013, KBW expects a 5.9% revenue growth, a 3% expense rate and a 7.7% NOI. As far as 2010 results, KBW reported that multifamily REITs outperformed other sectors, posting a 45.9% return year-to-date. Total equity REIT returns were reported at 24.9% and the Standard & Poor's 500's total return was reported at 13.4%. "We continue to favor the multifamily sector given accelerating fundamentals and essentially no new (net) supply the next two years," the report said. Write to Christine Ricciardi.