On the residential side of the REIT spectrum is AvalonBay Communities ( AVB), a REIT that owns nearly 52,000 apartments spread across key metropolitan areas such as New York, Boston, Washington D.C. and San Francisco. That geographic positioning has two major benefits for AvalonBay: high barriers to entry and high renter demand. Because AvalonBay is a residential REIT, it doesn't get to engage in the same sorts of super-attractive leases that its commercial counterparts do. Instead, leases are short-term, and regulation is stricter for residential landlords. While those two factors are posing a challenge right now, AvalonBay's geographic focus is its saving grace right now. Because the firm is positioned in higher cost of living areas, consumers who were on the fence about buying qualifications during the housing boom are likely to remain out of the market until underwriting loosens up, keeping occupancy high for AVB. A short interest ratio of 11.8 means that it would take more than two weeks for short sellers to close out their positions in AvalonBay. That gives this stock ample potential for a short squeeze as buyers become more ambitious in this market. To see this week's short squeezes in action, check out the REIT Short Squeezes portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.