For one, the performance index--which analyzes rents in relationto occupancy--for apartment properties in the market has risen from$826 in Q2 to $834, which is the greatest improvement it's seensince mid-2006, when the shadow market started to make its presencefelt. Meanwhile, average rents alone--which has been hovering inthe $888 to the $889 range in the past year--bumped up to $890.Although that uptick is slight, it's a telling sign that the marketis on its way to recovery at a time when most others are seeingtheir rents decline, according to Christopher D. Bentley, presidentand broker of record for the firm's multifamily and hospitalitydivision.

Concurrently, occupancy across the Valley for the three-monthperiod between July and September rose for the third consecutivequarter to 93.7%, up 80 basis points from June and 20 from the sameperiod last year. The multifamily sector is beginning to pulltenants away from the shadow market, where rents are averagingabout $200 more per month than traditional apartments. There's alsothe risk of having to move out of shadow residences in the event ofa foreclosure.

"Over the last few years, our biggest competition was the shadowmarket," says Bentley. "It was putting quite a bit of pressure onthe apartment market, which should have improved during the bubblemuch more than it did. Now, the investors are giving the shadowinventory back through foreclosures and sales. Though that's anegative for single-family housing, it's a positive for themultifamily market because we're gaining back that renterinventory. So what was a negative a few years ago for us is now apositive."