Equity Residential (EQR) on Q4 2024 Results - Earnings Call Transcript

Operator: Good day, and welcome to the Equity Residential Fourth Quarter 2024 Earnings Conference Call and Webcast. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Marty McKenna. Please go ahead, sir. Marty McKenna: Good morning, and thanks for joining us to discuss Equity Residential's fourth quarter 2024 results. Our featured speakers today are Mark Parrell, our President and CEO; Michael Manelis, our Chief Operating Officer and Bob Garechana, our Chief Financial Officer. Alex Brackenridge, our Chief Investment Officer; is here with us as well for the Q&A. Our earnings release and management presentation are posted in the Investors section of equityapartments.com. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement these statements that become untrue because of subsequent events. Now I will turn the call over to Mark Parrell. Mark Parrell: Thank you, Marty. Good morning and thank you all for joining us today to discuss our fourth quarter and full year 2024 results and outlook for 2025. I will start us off then Michael Manelis, our COO will speak to our 2024 operating performance and 2025 revenue guidance. Then Bob Garechana, our Chief Financial Officer will cover our 2025 expense and NFFO guidance. Then we'll go ahead and take your questions. We also posted a management presentation to our website last night with some additional detail. Before I get to the meat of my remarks, I want to spend a minute thanking my colleagues in the Los Angeles market for all they've done to support our residents and each other during this very difficult time. We are fortunate to have not had any property seriously impacted by the fires, but our teams and everyone else in LA has been through a lot. A special shout out to all the firefighters, first responders and everyone else worked tirelessly to battle the blazes. Now turning to 2024, we finished the year with solid same store revenue results that were a good bit better than the midpoint of what we had expected at the beginning of the year. But with slowing bad debt improvement in the fourth quarter leaving us at the lower end of our previously upwardly revised guidance expectations. Demand remains very good across our portfolio with levels of supply the main determinant of market performance. Before putting 2024 in the rearview mirror, I want to thank my colleagues across our 300 plus properties and at corporate who once again did a great job managing expense growth while providing outstanding customer service. We are very proud of delivering same store expense growth in 2024 of 2.9% and delivering an average of only 3.2% same store expense growth over the past five years. Well done team. And now moving on to 2025. While we're expecting similar annual same store revenue growth in 2025 as last year, the pace of our same store quarter-over-quarter revenue growth should show acceleration throughout the year, with the back half of 2025 considerably better than the first half. In contrast, the deceleration in quarterly growth we saw in 2024. In both our earnings release and in the management presentation we provided guidance for our 2025 operations. Michael and Bob are going to provide some color on that guidance in just a minute, but I want to take a moment to talk about the economic outlook that supports these guidance expectations. Based on the third party economic projections we use, we expect office using job growth, which we see as a key driver of our business, to be higher in 2025 than in 2024, especially on the West Coast. The improvement we are seeing in our downtown Seattle operations and beginning to see in the San Francisco market, both downtown and on the Peninsula are consistent with that theme. Unemployment of college graduates, the bulk of our residents, is currently very low at 2.4% and we expect it to stay in that range in 2025. With the supply of housing already tight in most of our markets, we see this setup is very positive for our business. I also note that our current earnings guidance is driven by the positive signs we are seeing looking at our operating dashboards as well as our deep knowledge of supply and demand dynamics in our markets rather than by looking at the headlines. While we certainly acknowledge that there is a higher level of uncertainty in the forward path of the economy than usual, given various recent governmental actions relating to tariffs and other matters, the impact of these actions on the larger economy in our business is hard to estimate currently, will evolve over time and is not included in our guidance expectations. That said, being a strong cash flow business without foreign operations and with a fortress balance sheet in times of heightened uncertainty is a definitive positive. We're looking at supply in our coastal established markets where we have 90% of our net operating income. We expect completions of competitive units to be similar in 2025-2024, but at a considerably lower level as a percentage of existing apartment inventory than in the Sunbelt markets. With some localized exceptions that Michael will discuss, we expect this coastal supply to be absorbed well in these housing starved markets. So while 2025 will be similar to 2024 in terms of established market units delivered that are competitive with our properties, overall supply levels continue to be manageable. While there continues to be a lot of conversation about declines in Sunbelt starts, we think it is at least as notable that 2024 competitive starts and our coastal footprint were about half of normal levels with 2025 starts likely to be similarly restrained. In fact, as a percentage of existing inventory total starts in our established markets in 2024 were at rock bottom levels last seen just after the great financial crisis. As a result, we see 2026 total deliveries in our coastal markets around 30% lower than the pre pandemic average. In sum, the supply versus demand setup is good in our coastal markets now and will likely trend even better later this year and into 2026. Turning to our expansion markets in Atlanta, Austin, Dallas and Denver where we have about 10% of our net NOI, we expect 2025 deliveries to be lower than in 2024 but still at an elevated level. We also expect that in 2025 these markets will still be working off the supply delivered in 2024. Overall demand remains good in our expansion markets and these high job growth markets will eventually absorb the current and incoming supply, but it will take some time to do so and progress we think will be uneven. In a moment Michael will go over what we are currently seeing in these markets. When we apply all this to our capital allocation strategy, it confirms to us again the wisdom of having a strategically diversified portfolio. Our goal is to own an apartment portfolio that has the highest long term total return in the sector with a focus on cash flow growth, taking into account risk and minimizing volatility. We are achieving this goal by catering to well earning renters in the 12 or so metro areas that we think have the most desirable lifestyles for this demographic and present the best balance of long term demand, supply, regulatory and resiliency opportunities and risks and where we can efficiently operate our properties with our industry leading people and systems. We made substantial progress towards our goal of having 20% of our NOI in our expansion markets by investing almost $2 billion in acquisitions and delivered development projects in these markets during 2024 while disposing of about $1 billion of older assets located entirely in our coastal markets. Our portfolios in the expansion markets feature newer, well located properties with a healthy balance between suburban and urban. We have given guidance for $1.5 billion of acquisitions and $1 billion of dispositions in 2025. As you can see, we expect to fund the bulk of our acquisition activity using proceeds from dispos. We are also assuming in our guidance that we will be a net acquirer and that we will fund that net acquisition activity using debt. You should expect material net acquisition activity only if like in 2024 where we acquired $600 million using debt. The numbers support that activity. Currently, transaction activity is very light. Assuming market volatility abates, we would hope that activity would pick up. Alex Brackenridge, our Chief Investment Officer, is here in the Q&A period to add color. Finally, I wish to thank Barry Altshuler, our Regulatory Affairs Guru and others across the rental housing industry for doing an outstanding job advocating for pro housing solutions like less regulation and better public private partnerships to encourage more supply and against anti housing ideas like rent control. We had great success in California and across the country last quarter. Equity Residential will continue to be a leader with its industry partners in advancing pro housing policies while political risk remains in our markets. We have definitively seen the tide turn towards more thoughtful housing policies and a focus on quality of life and public safety in our central cities. And with that I'll turn the call over to Michael Manelis. Michael Manelis: Thanks, Mark, and thanks to everyone for joining us today. This morning, I will review our fourth quarter 2024 operating performance and our operating outlook for 2025. In addition to our earnings release published last night, we've also published a detailed management presentation that provides additional color on the drivers of our guidance that I will refer to. We ended the year with continued healthy fundamentals and solid demand from a well-employed renter population, which drove strong occupancy of 96.1% and a blended rate growth of 1% both of which met our forecast for the quarter. I'd also like to highlight that our fourth quarter turnover was just 9%, bringing our full year turnover to 42.5%, which is the lowest we have reported in our 30-year history as a public company. This clearly demonstrates our success in creating remarkable resident experiences and reflects the favorable supply demand dynamics in our portfolio. On the expense side, for the full year, we have kept growth in same-store operating expenses below 3% with a special call out to the relatively flat payroll growth and 2% growth in repairs and maintenance including a 5.5% reduction in turnover expense. This again highlights our ability to share resources across properties and minimize reliance on outsourced labor. We are pleased to report that two-thirds of our properties have a shared resource model in place, and we're excited about the additional opportunities that further automation and centralization provide. Moving to 2025. Our same-store revenue growth guidance range is 2.25% to 3.25%, with an expense rate growth range of 3.5% to 4.5%. Bob will provide color on the expense guidance in a moment, but let me focus your attention on the building blocks for revenue growth as detailed on Page 6 of the management presentation. Our revenue midpoint assumes the following: we start with embedded growth of 80 basis points in 2025, this is 40 basis points lower than our starting point in 2024 and at the lower end of the historical averages, but the gap is largely expected to be made up through stronger leasing activity during 2025. That strong leasing activity will be driven by continued strength in overall demand from better job growth forecasted in our markets and very manageable levels of competitive new supply particularly in our established markets, which are 90% of the total portfolio. This is expected to yield blended rate growth between 2% and 3% for the full year which is about 60 basis points better than what we delivered for the full year 2024, with a good portion of that improvement coming from the recovery of some of our West Coast markets that I will discuss later. We also expect continued strong resident retention as a result of both the benefits of a centralized renewal process, our enhanced data and analytics insights and the high cost and low availability of owned housing in our markets. As I said earlier, turnover in the portfolio remains the lowest that we have seen in the history of our company, and we expect that trend to continue in 2025. This leads to approximately 3% residential same-store revenue growth, which is identical to 2024, which is then partially offset by declines in nonresidential same-store revenue to get to the 2.75% midpoint of our guidance range, as described on Page 6 of the management presentation. Occupancy should hold at levels similar to last year, which at that strength will allow us to capture rate. Operating results will also benefit from our continued execution on innovation initiatives with the majority of it running through the other income line. This year, we will be focusing on our analytical efforts with data-driven pricing and retention strategies, expanding automation to drive additional operating efficiencies and all the while endeavoring to ensure that we provide a great customer experience. In 2025, we expect about 70 basis points or nearly $20 million in other income growth with a large majority of it coming from initiatives that we have discussed in the past and the further rollout of our Internet connectivity and technology programs. Bob will walk through the associated expenses with that, but net-net, these will be additive to earnings overall. In terms of the overall market performance, Seattle and DC should lead the pack with same-store revenue growth of approximately 4% and New York and San Francisco will follow very closely behind. While we did include some further recovery in downtown Seattle and San Francisco in our guidance, both markets have the potential to outperform if we get more robust pricing power early in the year. And our expansion markets, which reflect only 10% of the total company NOI, we expect to produce negative same-store revenue growth given the impact of elevated, albeit declining levels of supply that need to work through the system. As we look at the individual markets, let's start with Los Angeles, where I would like to echo Mark's comments with tremendous gratitude to our amazing team in this market. Our guidance does not assume potential operational impacts in either revenues or in terms of cleanup expenses from the fires that I will discuss in a moment. Here's what we have included. So first, the market will see more supply than it did in 2024, but we expect the impact on our portfolio to be manageable and consistent with last year, with the Mid-Wilshire, Koreatown submarket fueling the most competitive pressure followed by the San Fernando Valley, which will see an increase, but without significant impact to us. Our guidance assumes that the market will continue to work through delinquency and bad debt issues, which will contribute to additional revenue growth. As I'll discuss in a moment, depending on the regulatory actions taken in L.A., this improvement may happen more slowly than what is now assumed in our guidance. Physical occupancy and pricing trends started improving late last year, and we modeled a continued pace of improvement, which results in our full year same-store market revenue projection for L.A. to be around 3%, but again, this may be impacted by any regulatory limits put in place in response to the fires, which brings us to the potential impact from the virus. While there has been a lot of speculation, we believe it is still too early to understand the full impact on operations. There will likely be more demand in the market as fire impacted residents seek new accommodations, especially in the two and three bedroom units which comprise about 45% of our L.A. portfolio, which we have already seen in certain submarkets. There will also likely be cleanup expenses the company incurs from the fires and various governmental actions that could negatively impact our operations. There are also likely to be twist and turns in the recovery process and governmental response. For now, we feel like the base case we outlined is our best assumption. We'll keep you posted on what happens here and anticipate that we'll have a better color on our first quarter call in April. Staying on the West Coast, San Diego and Orange County were some of the better performers last year. In 2025, we expect that these markets will continue to see good demand. Job growth in both markets is expected to exceed 2024 levels, and there is a general lack of housing. High homeownership costs make renting in these markets the most attractive option. Both markets are expected to see slightly more competitive new supply in 2025. But overall, we would expect good performance here. In San Francisco, we are optimistic about the mayoral administration and its commitment to improving the quality of life in the city. Job growth expectations continue to improve, and demand in the downtown and Peninsula submarkets are strong which should lead to additional pricing power in 2025. As I mentioned a moment ago, we have modeled some improvement in the operating conditions for the overall market of San Francisco with growth primarily coming from both the Peninsula and downtown submarkets. A more robust recovery is certainly possible as demand and pricing improved early enough in the year. Currently, concession use remains elevated in the San Francisco market, especially in the downtown submarket but overall improved significantly in 2024. We expect with improving occupancy, we will begin to see net effective pricing improvements in the market as rents and occupancy are increasing, which will most likely lead to a further pullback in concessions if these occupancy gains hold. New supply forecast for 2025 in San Francisco is very similar to 2024 quantities with almost no supply in downtown San Francisco and most of it concentrated in the South Bay, where absorption has been strong. We also are feeling really good about Seattle in 2025. Despite heightened pockets of supply, particularly in the Urban Core and Redmond, some margin, we finished 2024 in a strong position and look to have increasing pricing power resulting from continued demand as employers like Amazon bring their teams back to the office and supply begins to abate in the second half of this year. Quality of life issues in the city continue to improve, and the city has a bounce in its step after a pretty good stretch in the doldrums. Competitive deliveries with our portfolio peaked in the fourth quarter of 2024, and our pricing power held up during a period of time when it normally declines. We expect Seattle to be one of our strongest revenue growth markets in 2025. Moving to the East Coast starting in Boston. With high occupancy and limited new competitive supply, this market should perform low in 2025. The market is supported by a strong employment base in finance, tech, life sciences, health and education. Overall, new deliveries will be about the same in 2025 as last year, but the majority of the deliveries will be in the suburbs, which bodes well for us, given 70% of our assets are located in the Urban Core Boston. Our urban assets outperformed suburban ones in 2024, and we expect that spread will be even greater in 2025. New York was a top performer in 2024, and we expect that to continue in 2025. The employment base is strong, market occupancy is high, and there's almost no new competitive supply being delivered in Manhattan, where we have the majority of our portfolio. Washington, D.C. was our top performer last year, and our expectations remain high for 2025. The absorption here has been very impressive, considering that the market has been delivering more than 10,000 units a year and will do so again in 2025. We're almost 97% occupied in the market, which is a good start to the year. And the wild color here is what impact the new administration and its focus on both cost cutting and a return to office policy for federal employees will have on the local job market. In the expansion markets, our long-term outlook remains positive as we expect to continue to see higher-than-average job growth in those metro areas. But our near-term operating environment is challenging. We have seen stability in new lease rates and occupancy in Atlanta and Dallas the last two months. And while volatility is possible, we currently expect that new lease rates will improve as they usually do in the busy -- spring leasing season in these markets. In Denver, conditions today are challenging as we have some new deals in close proximity to our assets that could push the improvement later in the year. Even with these hope for improvements in operating conditions, we expect same-store revenue in our expansion markets to be lower in 2025 than it was in 2024. Looking at the overall company level as we sit here today, we really like our position. We're looking forward to capturing the opportunities the spring leasing season brings, which will help frame pricing power for the full year. I want to give a shout out for our amazing teams across our platform for their continued dedication to our residents and focus on delivering these results. With that, I'll turn the call over to Bob to walk through the rest of our guidance expectations for 2025. Robert Garechana: Thanks, Michael. With Michael having just walked through 2025 same-store revenue expectations, let me finish with same-store expenses, normalized FFO and provide some color on anticipated capital markets activity for 2025. Turning to expenses. Expense management remains a core strength of EQR as demonstrated over the years and during 2024. Our 2025 guidance of 3.5% to 4.5% implies somewhat higher growth in 2025 than 2024, as outlined on Page 6 of the management presentation, but still reflects that strength. As you can see, the incremental growth in expenses are stemming from a couple of items. First, connectivity expenses are adding approximately $5 million to expense growth as we deploy bulk WiFi in the portfolio. As Michael mentioned, they are also adding revenue, so we will be accretive to NOI for the full year. Second, we have another year of 421-a tax abatement step-ups in the New York portfolio. We're down to only a handful of properties and step-up with most nearing the end of the period. As we have mentioned in the past, once fully taxed, there is an incremental income opportunity as affordable units convert to market rate in the future. Beyond those two items, same-store expense growth will look relatively similar to 2024, but with a little incremental growth from utilities and payroll given the low growth in 2024, setting up a tough comparable period. Moving to NFFO. Page 8 provides some narrative around NFFO contributors outside of same store, along with a bridge to the midpoint of our guidance range. This bridge can also be found in the earnings release. Beyond residential same-store NOI, let me provide some color around a couple of the larger categories. First, transaction NOI. The majority of this contribution is coming from 2024 transaction activity and our buys themselves last year. There is some impact from our assumptions in 2025. But as Mark mentioned, this will be contingent upon what market conditions look like, so that could change. Second, interest expense. The majority of the increase in interest expense is coming from increases in anticipated balances from investment activity, mostly acquisitions, with about $0.01 of the increase also coming from refinancing of our 2025 maturity and what we expect to be a higher rate. More about that in a second. And finally, lease-up NOI. The $0.01 contribution from lease-up NOI is coming from our few consolidated lease-ups. The majority of our lease-ups are from unconsolidated joint ventures in our expansion markets that are encumbered with project-level debt and the net income from those projects runs through the income from investments in unconsolidated entities line. Four of these unconsolidated JV development deals were completed late in 2024 and will be leasing up throughout the year. Given current leasing velocity and the cessation of capitalized interest on loans, we do not expect these joint venture assets to contribute to NFFO growth in 2025. We've added specific guidance on this income to the guidance page of the earnings release. Finally, let me briefly mention our anticipated capital markets activity for 2025. We have won significant maturity, which is a $450 million, 3.375% note due in June of this year. We would expect to refinance this note at or near the maturity, most likely with unsecured debt. We have ample liquidity and capacity under our recently expanded commercial paper program to float this pay off and be opportunistic about when exactly we refinance the maturity. All other financing activities will be dependent upon transaction activity and conditions, as Mark mentioned. Our guidance assumes $500 million to $1 billion of debt issuance because we modeled being a net acquirer of $500 million in our guidance. Expected that issuance, however, will adjust as that adjusts. With that, let me turn it over to the operator to begin Q&A. Operator: [Operator Instructions] We'll take our first question from Eric Wolfe with Citi. Eric Wolfe: Hey thanks. You mentioned that same-store revenue should accelerate throughout the year. Can you just talk about how much of that is driven by other income versus improved fundamentals? And then what type of acceleration you're expecting in the second half versus first half? Or where you expect to start the year versus the year however you think we should think about it? Robert Garechana: Yes. Hey Eric, it's Bob, but I'll start with that kind of outlining the shape of what we expect revenue to be. The shape should be such that as you mentioned that the acceleration of the year-over-year, quarter-over-quarter growth will be higher in the back end of the year than the front end of the year. And there's two main drivers associated with that. The first driver is really that we're starting the year with a lower embedded growth than historical, and a lot of the growth is coming from actual leasing activity in 2025. And so as you get to the second quarter and the third quarter, which are the prime leasing season, you start to see that contribution coming through the quarter-over-quarter. And so there's a good portion of growth associated in the back-end quarters. There relative to the front quarters, which will be lower because of that lower embedded growth. Additionally to that, you also have the other income, which has kind of got the same shape to it. So you have -- the other income is a lot of it, as Michael mentioned is connectivity, so you have that growth component also more weighted in the third and fourth quarter as you roll through the program of rolling out the WiFi piece. So from a kind of quarter-over-quarter perspective in same-store revenue, you should see the first quarter being the lowest and a little bit lower, and then it builds as you see the leasing activity and as you see the other income contribute overall such that you get to a higher Q4 relative to Q1. Eric Wolfe: Got it. That's helpful. And then you outlined some markets that you expect to improve throughout the year, I think many SS and Sunbelt, at least from like a blended rent perspective, maybe not from a same-store revenue for Sunbelt, but can you just talk about how much better the sort of second half blended rate growth might be versus the first half? I'm just trying to understand the sort of the degree of improvement you're expecting in those markets? Michael Manelis: Yes, Eric, this is Michael. So I mean I think you would follow a shape right now. We gave some guidance in the release for the first quarter as to how blends will play out, which is the 1.4% to 2.2%. And I'll tell you, in that equation, I mean, you've heard me talk before about the consistency in our renewal process. So renewals are pretty much flat going month by month throughout these quarters. So I think the build, as you see the year play out, you would clearly start to accelerate in the second half of the year, which the third quarter probably having the strongest but then you would expect moderation again in that fourth quarter. So the shape doesn't look materially different than other years. It's just -- it's going to be elevated as you work your way through the middle of the year. Eric Wolfe: Got it. Thank you. Operator: We'll now take our next question from Steve Sakwa with Evercore ISI. Steve Sakwa: Yes, thanks. I know you're trying to get away from a ton of sort of KPIs on the leasing side kind of month-to-month and quarter-to-quarter. But could you just maybe provide some color on where our renewal rates are going out? I guess we were pleasantly surprised that, 5% renewal increase in the fourth quarter, but new leases did come in, I think, a touch weaker than we had expected. So maybe where are you sending out renewals today across the portfolio in the first quarter? Michael Manelis: Hey Steve, this is Michael. So first, I just want to remind you, we do have a centralized renewal team handling our entire renewal process, including all the negotiations which has really allowed us to execute like various strategies across the markets as we see conditions changing. Right now, we're in the process of tightening up negotiations as we start dealing with renewal months that are heading into that leasing season like Mark. We have conditions that are improving in Seattle, San Francisco, LA. We love the current occupancy position that the portfolios in. So for the next several months right now, the quotes that are out there in the marketplace are about to 7% and I'd say that we would expect to achieve increases somewhere right around that 5% kind of range. We've got good insights. We got a lot of confidence in the stability of this renewal performance in the portfolio right now. Steve Sakwa: Great, thanks. And then maybe on capital deployment. I know you've got net acquisition volume of $500 million, but you do have a moderately active development pipeline. I'm just curious, how does development sort of play into your thought process today where are yields on new projects? And how do those development yields kind of stack up to the acquisition yields you're looking at? Alex Brackenridge: Hey Steve, it's Alec. It's a pretty uncertain market right now, just to be able to even start and peg an acquisition cap rate. But for the moment, assume it's a round of 5, I can't tell you there are a lot of transactions right now because the market is pretty frozen. So you'd like to think you could build to around a 6. And I think that's the number most people are shooting for. And with rents where they are and costs not going down too much. There's been some lower costs. But overall, it's pretty hard to get to that 6 for a location you really like, unless it's really simple product. So we're seeing is more stuff being built further out further more suburban, even ex urban and not really the stuff we're crazy about. So we've been really patient. We have -- just 3 starts this year and nothing geared up yet for this -- sorry, sorry, 3 starts from last year and nothing geared up for this year. But we keep looking at if we can find the right location, which would be a place where we don't think we'll be able to buy -- and the 3 starts last year, as a reminder, we're in suburban Boston and suburban Seattle, that's what we would pursue. But right now, it's really tough to make the numbers work on something that's appealing to us. Steve Sakwa: Great. Thanks. Operator: We'll now take a question from John Pawlowski with Green Street. John Pawlowski: Hey good morning. I have a follow-up question on the -- your comments around supply likely being down 30% in 2026 relative to pre-pandemic -- pre-pandemic norms. I'm curious if you bifurcated that between urban and suburban. Is it fair to assume that Urban's down significantly more than that 30%. And then -- if so, how are you just thinking about your ideal market mix right now or submarket mix between urban and suburban given Urban might have a longer runway of no supply than the suburbs? Mark Parrell: Hey John, it's Mark Parrell. First off, go Eagles, right? Second, I'll say to you, we agree, I think, with your comment, I think that's perceptive. On the urban side, we see a lot less being built, the high-rise product you need to build to make those numbers work. Frankly, don't work at all of those numbers at this point. And we see a longer runway in some of the urban submarkets. And that's why we've talked a little bit about continuing to stay exposed in our legacy established markets to the urban core and in our new markets of having a presence in urban areas as well. There's deeper pools of demand in urban areas. It's typically been more, supply, but we think that dynamic is going to change. So we like being differentiated by continuing to think of the urban centers is worthy of investment. But every city varies and Alec can amplify that. There's places that are less appealing, like frankly, Dallas, Central City. And there's places like Midtown Atlanta that do have a lot of supply, but are much more appealing to our demographic. So, we're going to continue to balance that out. But we are investing in urban areas, both in our current coastal markets as well as these new kind of expansion markets that we've been focused on. Alex Brackenridge: Yes. To Mark's point, so we do distinguish between, say, the CBD, which sometimes people think is only the only urban area. With some neighborhoods that are closer still very dense but offer a great quality of life without some of the legacy issues that we're seeing in CBDs throughout the country. John Pawlowski: Okay. But I guess in terms of the capital allocation read-through relative to 6 months or 12 months ago, you guys being -- are you guys becoming more open-minded that your urban concentration should be higher than you expected it to be 6 months to 12 months ago moving forward? Mark Parrell: I'm not sure that's changed a great deal. I think it's just the balancing act. There are a few assets in urban centers on the West Coast that we probably will sell over time because, John, we're a little over concentrated in certain submarkets. But I mean, we talked about the benefits of urban concentration even when things were difficult during COVID. The opinion has changed. We like the exposure in the urban areas. We like it. Now I think you're going to see the benefit of it in our numbers in the next year or so -- so I think having that diversification not being all suburban or ex-urban or whatnot is a good thing for us. But there's going to be markets like Dallas, where as Alec said, we're kind of a little more distant urban and a lot more suburban. And then markets like New York where we're entirely urban. And I like having that toggle. I think markets have different best spots to invest in. And -- so yes, we feel good about our urban, but frankly, we feel good about it a year ago, too. John Pawlowski: Okay. My last question, Michael, just on the D.C. market. I know it's really early in the news flow changes by the hour. Just curious what your local team is seeing on the ground in terms of foot traffic, pricing power on existing tenants or new tenants just given the uncertainty about potential layoffs for federal employees? Michael Manelis: Yes. It's a great question, John. So I mean, right now, I got to tell you, the DC portfolio is occupied 97.1% today. We have a pricing curve that's on par to slightly better than what you would expect for the beginning of the year. In terms of like the feedback on on-site right now, we haven't really seen anything kind of flow through with renewals. I think everybody is still a little bit on edge. And I think as I said in my prepared remarks, there's still a lot of uncertainty on the overall impact, I guess, I would say, to demand in terms of layoffs versus this concept of bringing people back into the office, like does that neutralize each other in the demand. So I think it's still a little bit too early, but I can tell you I know there are people that are on angst right now in the market, and we just kind of need to see how this plays out over the course of the next couple of months. But the positioning of the market and the portfolio today is really strong. Mark Parrell: And the diversification of employers is a lot better in DC, John, it's Mark than it used to be. I mean there are other employers there. There's a lot, by the way, of defense industry-related stuff, which may not be subject to the same staffing restrictions. I know some of those people weren't sent the same e-mail that I guess was sent to the general federal workforce. So I think there are definitely ups and downs there. And probably a smaller federal workforce going forward. But in terms of the DC focused workforce, that number might end up being higher because of the defense concentration. And as Michael said, them just asking or demanding that people be in the office. Those people that are far away are not currently renters from us and maybe new renter soon for a portfolio that is very little slack in it already. John Pawlowski: Okay, thanks for your time. Mark Parrell: Thank you. Operator: We'll now take our next question from Michael Goldsmith with UBS. Michael Goldsmith: Good morning. Thanks for taking my questions. My first question is on seasonality. It seems like in the second year in a row, maybe a weaker fourth quarter, but with expectations of a stronger first quarter. So can you talk a little bit about the factors that are influencing that? And then also within the comments that it seems like the momentum should be sustained through this year into the fourth quarter of 2025. So what gives you confidence that the momentum can be sustained through this year, which was kind of like the trends in the last 2 years? Thanks. Michael Manelis: Yes. Michael, this is Michael. So I think from a seasonality standpoint, I would tell you, the fourth quarter kind of played out the way we expected it to play out. I mean, you normally see deceleration. Clearly, we have some very seasonal markets like Boston is a great example of that, where you do see that deceleration occur. And then you turn the corner into January and you start your run into the spring with pricing and momentum building. So I think the shape of the curve for this year is not materially different, right? You're going to build up as you work your way through the spring and into kind of the fall and have stronger momentum and stronger kind of new lease change than what we experienced in 2024 because I just think the macro indicators for us tell us that we are in for a period of stronger pricing power this year than what we had last year, but that doesn't mean that we won't see deceleration in the fourth quarter of 2025. We would expect to see some deceleration at that time just based on normal seasonality trends in the way these markets act. But the strength in the portfolio right now gives us that confidence of having this pricing power build and some of the recovery in these West Coast markets clearly are going to put us in a position to start having stronger blended rates than what we've seen in the past. Michael Goldsmith: Got it. Helpful. Second question, on the 421-a the expense component is pretty clear, but how should we be thinking about the potential benefit to these buildings in terms of revenue as restrictions burn off? And if I can squeeze one more in as well. How much Sunbelt is entering the same-store pool this year? Thanks. Alex Brackenridge: Michael, it's Alec. Just on the 421-a question. It's really hard to project that because they don't turn to market until they vacate. So if someone stays in the unit a longer time, you obviously can't get to that unit sooner. They could -- they could move out tomorrow and we get to it right away. So it's hard to peg, but the upside is high because a lot of these rents are like, say, $1, $1.50 a foot and they could go up to $6, $7 a foot. So there's some pretty dramatic increases that are potentially possible. Robert Garechana: Hey Michael, and on the same-store component with the Sunbelt, the 2025 same-store set is not materially different than the 2024 same-store set. There's a couple of assets coming in to it from the Sunbelt. The majority of our transaction activity won't hit the full year annualized same-store set until 2026 because recall that, you might see it in Q3 and Q4 are the quarterly set because we bought the assets like from the Blackstone portfolio and did most of our transaction activity in the back half of 2024. But until you enter the full year same stores that it won't materially change until 2026. Mark Parrell: And just to add a little more color, Michael, a good question. In 2026, a lot of those units are going to be suburban. It just happens by coincidence as we built these balanced portfolios that we bought, for example, more in Denver in urban areas initially. Those properties are in same store. They did really, really well for us. And now they're getting hurt by the supply. So you see our numbers sort of suffer disproportionately. But the non-same-store pool, which is predominantly almost entirely suburban in those big three markets for us of Atlanta, Dallas and Denver. When that rolls in the same store in 2026, I think that's going to be very helpful. And I think it's going to prove out the benefit of having a balanced portfolio in kind of both parts of the market, not just all suburban, not just all urban, we will have gotten benefit through the whole cycle. Michael Goldsmith: Well thank you very much. Mark Parrell: Thank you. Operator: We'll now take our next question from Anthony Paolone with JPMorgan. Anthony Paolone: Yes, thanks. I would like to shift over first to acquisition market. Can you maybe give us a sense as to where private market is right now in terms of IRRs, where thinking is for NOI growth the next few years and just how you're seeing liquidity out there? Alex Brackenridge: Hi, it's Alec. There is a lot of interest in the multifamily sector. I was at NMHC and Las Vegas and everyone is eager to buy. But -- the market is really frozen right now. So people would like to buy it around 5%. I think they probably project that to be a 7.5-ish IRR on their numbers. But the 4.5, 10-year, I'm not sure that they're ready to pull the trigger plus all the other uncertainty in the world. So right now, the markets get a bit of standstill. But with all this capital out there, plus a lot of these deals that aren't capitalized for the long run, and we're getting the sense that lenders are more likely to pull the plug on those and stop extending them, but there will be more supply available. And hopefully, in a quarter or two, I'll be able to give you a more fulsome answer would have some examples because we expect that to happen, the market to pick up. But as it stands today, it's really theoretical because there's very, very little activity. Anthony Paolone: Okay, thanks. And then just a question for Bob. You talked about the drag in JV FFO from the development stabilizing there. Can you give us some sense as to what the difference in FFO is likely to be when those projects stabilize versus what's in your 2025 guidance? Robert Garechana: Yes. Let me talk about kind of how to think about that as opposed to necessarily giving a specific 2026 year-over-year. So there's two drivers, right? There's the “drag” from just the lease-up process. Number one, is just the NOI, right? So when you're leasing up -- and you typically incur the operating expenses before you get the revenue as you build occupancy that I think we're familiar with. So by the end of this year, from an NOI perspective, these assets will be accretive, right? Like they will have turned to be NOI positive. They will start -- they will continue to be the ramp up, you'll be over that component. They may not be FFO accretive because they have construction loans on them, and those construction loans are at 6.5% rate, they won't have gotten to the yield as we there yet, right? And so that's where you're seeing that cessation of the cap interest and the NOI kind of to cash flow streams line up. When you think about getting to 2026, there's two things to keep in mind. Number one, you'll have the positive that they will have stabilized, and you'll have probably all four quarters being stabilized or close to stabilized from the NOI standpoint. Number two, we're also at the buy-sell component. So we'll likely be able to exercise with our JV partners a recap of the ventures. And put what I would say, better debt on or no debt on or the acquirer in that process, and therefore, they will be much more accretive than what they were this year. Anthony Paolone: Okay, thank you. Operator: We'll now take our question from Jamie Feldman with Wells Fargo. James Feldman: Great, thank you. I just want to start with the same-store revenue build. So the -- can you talk more about the nonresidential piece to the guidance? What's in there? And then, I guess, just bigger picture, what do you think -- I guess, for Bob, what do you think moves your guidance the most? I think you came out 2% below the midpoint of -- the Street, where is the most upside or downside or easiest upside or downside to your numbers on FFO? Robert Garechana: Yes. So let me start on the non-residential piece. So just to remind everyone, non-residential is about 4% of the aggregate kind of portfolio from a revenue standpoint. So it's not a huge component of the business, and it mostly consists of half of it is, I'd call it, third-party parking and the other half of it is street-level retail. That acts as an amenity to the space. The 20 basis points drag, some of you may recall that in the first quarter of 2024, under the accounting rules, we recognize because the tenants became more collectible and we'd previously written off the straight-line leases, we actually reinstated the straight line on a number of those assets. And therefore, we got a $4.5 millionish kind of pick up overall to revenue. That was a onetime item that happened in Q4 that's not going to happen -- or Q1 of 2024, that's not going to happen again. And so that's that drag overall as it relates to the nonresidential piece. Otherwise, the business is largely performing the way you would expect those two lines of business to perform. As it relates to guidance, we give you a guidance range because there are a variable series of outcomes that could occur. Obviously, within the same-store portfolio, depending on how the leasing is because we're so dependent on the leasing season this year. And our outlook looks like the leasing season. Michael mentioned some of the items that could put you on the higher end of the guidance range from same-store. It's Seattle, San Francisco performed better. If you get a bigger pickup, that could move same-store. And same-store is the largest driver to NFFO in the aggregate by far. It is the core business that makes up the vast majority of that. All the other items I would tell you are largely noise. We could do a little better in refinancing. We could do a little bit better in overhead, but those are just marginal components. It really is the growth engine of the business really is the core portfolio. James Feldman: Okay, thank you for that. And then I mean, the headlines have been fast and furious since the inauguration. So I guess just to get inside your boardroom and your C-suite, I mean what is your team talking about the most in terms of -- what's good -- what could be good for the business, what could be bad for the business over the next four years or maybe two years? And then if you could get more granular on by market, that would be interesting, too. Mark Parrell: It's Mark. I'm going to start and maybe others or will contribute to that. I mean the new administration is in its very early innings. There's certainly been a lot going on, but we're only a few weeks into it. The Congress has only been convened for, little longer than that. So it's a little bit hard to tell. I want to make a comment, though, about how we think about it because there's a little bit of a bifurcation here. We've been through these periods of heightened uncertainty. We have no idea. I'm not sure anyone knows for sure what all these actions are going to do to economic growth, what they're going to do to housing demand, I mean all that remains to be seen. But we need to focus on our dashboard. So we say it internally, focus on your dashboards, not on the headlines. Michael and his team's dashboards across our 300 properties are busy watching micro demand trends, and they feel good. Those dashboards buy and large are green. That's the optimism you hear your management team reflect, and we're going to run the business based on what we see there. On the capital allocation side, for me, Alec, the rest of us in the Board on the refinancing side for Bob, I mean, I think this kind of situation speak some caution. I certainly think there's a fair bit of uncertainty. Uncertainty can mean opportunity when you're one of the best capitalized guys in the space like we are. So I would say I'm not sure market-by-market is that helpful. But I would say as it relates to the federal government and whatever it ends up doing, we're prepared for that, we think, as much as we can be. We are not directly impacted by things like tariffs because we aren't predominantly housing people in the manufacturing area or the foreign trade area. We are part of the bigger economy for sure. But I'll also make a comment, which I kind of alluded to in my remarks, it's pretty good to be in a business with -- that's fundamental that has no foreign operations. That has got strong cash flow and a good dividend in a time of uncertainty. My guess is companies like ours will be better valued by the Street in the next sort of uncertain period of time than maybe more speculative firms have of late. So again, we're looking at all those things and like you, we'll see what happens. As for local government, I mean the big win in California was great. And, we think we did a great job there, as I said in our remarks and making the case to the people. These other states are really important regulatory-wise, places like the state of Washington will be focus points. But policy wise, I think it's the federal show, and we'll see what kind of comes next. James Feldman: Thank you. Operator: We'll now move to our next caller, who is Julien Blouin with Goldman Sachs. Julien Blouin: Hi, thank you. Just wondering, in LA, how you're thinking about the profitability of those rent freezes and eviction moratorium proposals passing. I don't know if there's sort of stuff you're hearing from your teams on the ground that can maybe sort of give us an indication? Mark Parrell: Yes. Thanks for your question. I appreciate that. You got to start off whenever you talk about LA fires, by the huge level of empathy we have for our colleagues in that market for our residents, for the whole community. I mean they've been through a lot, and it's been a real tough process. We think we've been really supportive and responsible corporate community participant. We've been supporting charities in that market that are working on relief efforts. We've been supporting our residents and our employees, including being really thoughtful about rent even before the governor put his anti-gouging order, which by the way covers goods and services, not just rent into place. So we think we've been very thoughtful about those sort of things. We think these ideas, one of which is a sort of a pretty broad eviction moratorium that's being considered are just terrible ideas. This market continues to recover from the 3-year plus COVID eviction moratorium, which was broad-based and not well policed and really caused a lot of disruption. And even worse for L.A., which desperately need a ton of housing investment to rebuild and needs it to just house the people even before the fires didn't have enough housing for. This is really discouraging. This is the consideration of these sort of anti-housing measures like eviction moratoriums again, further the reputation LA has a being anti-business and anti-housing, and it pushes capital away. So that's the argument we're making with our local associations. Like I said, I think there's more effective ways to do this. There's a lot of relief money the federal government and state have, I understand if there's folks that need help specifically on rent, I'm sure that mechanics can be created to be helpful there, but some sort of broad-based sort of rule in an area that large just makes very little sense to us. And same goes for any rent control besides what the governor put out there on the anti-gouging side. It's just, again, we and others have been pretty responsible. If you want to encourage housing production you have to send the right price signals. And I think more and more regulation is not the signal. We're so encouraged about Seattle and San Francisco. They're doing so much better being pro-business and pro housing. And we just hope L.A. comes along. That market is still not there on the government side, and we're going to continue to advocate for it to turn. Julien Blouin: Thank you. That's really helpful. And I guess as a second one, sorry if I missed it, but did you provide January new lease rate growth and blends -- or is there sort of -- can you give us a sense of where they landed relative to the 1.4% to 2.2% range for the first quarter blends? Michael Manelis: Hey Julien, it's Michael. So I think I've explained this in the past that these metrics are best used like over a longer period of time versus the stand-alone months, especially given the small quantity. So you didn't miss it because I haven't said it. What I will tell you is that we are seeing sequential improvement, which is what you would expect in the month of January. And based on this full year expectation, 2% to 3% blended rate growth. We anticipate the first quarter is going to come in between the 1.4% and 2.2% that we included in the press release. As I mentioned last quarter, these stats have a lot of variability in them. And the quantity of transactions in either new lease or renewals can impact the reported blended rates in any given quarter or even a month. So we always have these various puts and takes in our revenue model and the new lease change is only one of these variables in the equation that happens to be very dependent upon who moves out which is why you've seen a shift towards providing ranges of blended rate results by quarter. And I guess I would just stop by the fourth quarter came in exactly where we thought it would be. And I think right now, when we're looking at the dashboards and seeing what we think, we have a lot of confidence in that first quarter range that we put out there. Julien Blouin: Okay, great. Thank you so much. Operator: We'll now move on to John Kim with BMO Capital Markets. John Kim: Thank you. That's LA. I know you want to be conservative and there's -- maybe it's too early to come out with any guidance impact. But you did mention that you expect occupancy or demand to increase for your larger units. And I was wondering how much of that you've already seen in January, if you could provide possibly an occupancy number for LA and Orange County in January? Michael Manelis: Hey John, this is Michael. So I guess I want to say too in the fourth quarter, right, we actually felt better. Like you heard me say that even on the last call, that we started to see this improvement. We started to see the improvement in demand that allowed us to backfill. So the occupancy for the fourth quarter, I think ticked up to like $95.8 million. We originally modeled this market to have additional improvement both with some rate recovery and additional occupancy gains. And in the month of January right now, I would say we're seeing some of that incremental improvement specific to the fires and specific to my comment I had in the prepared remarks, 45% of our portfolio is 2 and 3 bedrooms. We initially saw kind of that spike in demand for that type of unit really hyper focused in 3 submarkets: Ventura County, Glendale, Pasadena and West LA and both Venture and Glendale are very small. We only have a few assets in those submarkets. So, we did see some of this incremental demand, but it's not like you see this kind of widespread kind of increase coming across the entire broader market. So I think I just want to stand back and just say, our base case still kind of holds. We do believe this market is ripe for improvement. We saw some of that happening in the fourth quarter. I think there will be some incremental play with the occupancy in the market. But I'm not sure at this point, we have enough confidence to say that it's like a significant shift to the underlying base case that we put out there. John Kim: Yes, I'm just curious on the timing. I would have thought that the spike, if there were any, would have already occurred and people are displaced. But is it because people will have the place and went to taper housing or? Michael Manelis: Yes. I mean I think part of this is a geography, like where do they get displaced? Are these families that have children that were in schools that need to stay close. So I think a lot of this is the geography, which is if you think about the three submarkets I laid out, we're not surprised that we saw that initial demand. And there's no doubt. In those three submarkets, we clearly saw an increase in demand for 2 and 3 bedrooms over the course of two weeks to three weeks following these fires. So I just -- right now, we're still trying to see how does all of this stuff settle out? And where do people really kind of want to live longer term. And that's kind of what we're focused on this broader demand in the market. John Kim: Okay. My second question is on your blended lease growth guidance of 2.5%. If you could break that out between new and renewal, it would seem to imply if you have renewals of 5% that new would be flattish. And I'm wondering, just given the market runs about why new lease growth couldn't be higher? Michael Manelis: I think it's really just -- I mean, so you're not off with kind of that underlying assumption that's one way to get to that blended rate growth of 2.5%. And I think what you see is it's very common. Again, we have these data points going all the way back to 2006, we understand how these market seasonality components play into both new lease renewals and pricing trend. It is not uncommon for us to see negative new lease in the fourth quarter, negative new lease in the first quarter even that then put some of that downward pressure into that blended. So you're right that at the end of the year, you may walk away and have a new lease rate kind of growth that effective at 0. But I think some of these markets are also positioned right now where you could see an additional pullback in concessions. So maybe some of that net effective ticks up a little bit. But we're not saying that we're not going to see normal seasonal trends play out. Mark Parrell: There was a prior question about where the opportunity lies in our numbers, and I think you've done a good job of saying where it is. I mean it's new lease growth. It won't totally defy seasonality. But if we're reporting better numbers on new lease through the year, even if the fourth quarter is negative, but the second and third are more positive than we think, that's going to be the way early enough in the year where the numbers will move around to the good. John Kim: Got it. Thank you. Operator: We'll now take our next question from Haendel Juste with Mizuho. Haendel St. Juste: Hey guys, good afternoon. I was hoping to get a bit more color on some of those blended rent expectations by region. And maybe, I guess, most of us assume that East Coast blend should be better than West Coast and Sunbelt will lag, but I was hoping you get a bit more color on perhaps the range or a sense of the expectation for blends by region? Thanks. Michael Manelis: Yes. Haendel, it's Michael. So I mean I think what you should think about is the West Coast recovery is going to drive improving blends in the West Coast markets, all of the West Coast markets, even including the Southern California portfolio. I think we're going to continue to see strength in the East Coast markets, so maybe similar kind of blend than what you saw this year. And then in the expansion markets, you kind of see a little bit of this stability right now for us in Atlanta and Dallas. And my hope is that as we kind of work our way towards the spring season, you start to see either rates improving or concessions falling back that then show you not only stability and blends, but a little bit of this path to recovery of blends that sets you upgrade for 2026. Haendel St. Juste: Okay. That's helpful. And on the subject of concessions, can you talk a little bit about where concessions are today in your San Fran and Seattle portfolios and where we -- or maybe where you'd expect them to trend over the next couple of quarters and how much of a tailwind that could be into the back half of the year? Michael Manelis: Yes. So I mean I think on the concession use overall, right? The fourth quarter came in exactly kind of where we thought it would be. We lean into this occupancy during the slower periods of time. We saw significant reductions in San Francisco while holding a solid occupancy of 96%. And then Seattle saw a 100 basis point improvement in occupancy but we had similar concessions there to the fourth quarter of 2023. So I think as you think about concessions in the marketplace right now, specifically in those two markets, it's still kind of elevated. San Francisco is still a concessionary market especially that downtown. But I think what we're looking at right now is total revenue because if you have the demand and have the occupancy, you could see base rents start picking up in those markets, which is what we've kind of been doing even though the concessions kind of stay neutral. Our expectations as we work through this year is that the concession use will start to kind of moderate. We did model for fewer concessions in 2025 than we used in 2024. And I think we see some of the strength right now and the positioning of the portfolio that gives us confidence that, that could play out. Haendel St. Juste: That's helpful. And if I could just ask about the same-store expense guide. You put out the range out there. I appreciate that, but any details perhaps on the buildup for items, including taxes, insurance, R&M. So maybe some color on the components? Thanks. Rob Garechana: Yes. Haendel, it's Bob. Page 6 gives you a little bit of the contribution to growth overall. But -- so ex kind of the two called out items, which are the connectivity expense and the real estate tax expense, I think the two biggest call-outs and I mentioned them in terms of like growth that is dissimilar or maybe greater than what you saw in 2024, would be utilities. Utilities is one of them that you're just seeing higher commodity prices, continued pressure in -- and we also, frankly, had a really good year in 2024. So utilities is probably growing in the more mid to mid-single digits than kind of lower single digits. So that will contribute to growth more in 2025 than it did in 2024. Same thing with repairs and maintenance. Repairs and maintenance, the headline number will look really big because the connectivity expense is mostly in that line item or is in that line item. But outside of that, you just have some wage pressure and some typical stuff. And then payroll we model to be more like a typical 3% range. And we've had phenomenal payroll experience over multiple years, but last year, 2024 in particular, where it was flat. So -- those are probably the main category items. I know people are typically interested in insurance because insurance, although a small category has been growing really fast. We did model that. We expect it to be, call it, high single digits as opposed to low double digits. So some improvement in that market, we don't renew until March. Mark Parrell: And I'm just going to add some color on insurance here for a minute because we have a unique perspective to share. Our risk management team just happened to be in London meeting with our reinsurers and some of our insurance carriers just after the worst of the fires in LA. And so we had the opportunity to ask them how the market felt to them and what might happen with commercial renewals. And their response was they didn't expect much of an impact and that they had capacity and they had had good financial results lately. And so we are feeling o
EQR Ratings Summary
EQR Quant Ranking
Related Analysis

Equity Residential (NYSE:EQR) Shows Positive Analyst Sentiment Amidst Urban Real Estate Demand

  • The consensus price target for Equity Residential (NYSE:EQR) has been on a positive trend, indicating a moderately positive outlook from analysts.
  • Despite a slight decrease from a quarter ago, the average price target suggests confidence in EQR's strategic focus on high-demand urban areas.
  • EQR's robust A-rated balance sheet and favorable supply-demand dynamics in the residential real estate market contribute to its appeal to investors seeking stability and growth.

Equity Residential (NYSE:EQR) is a key player in the residential real estate market, specializing in the acquisition, development, and management of properties in bustling urban locales. As part of the S&P 500, EQR is recognized for its dedication to fostering vibrant communities for long-term renters. The company competes with other major real estate firms, focusing on high-demand urban areas.

The consensus price target for EQR has shown a positive trend over the past year. Last month, analysts set an average price target of $79, reflecting a moderately positive outlook. This suggests that analysts expect the stock to maintain or slightly increase its value in the near term, aligning with EQR's strategic focus on high-demand urban areas.

A quarter ago, the average price target was slightly higher at $80.25. This indicates a more optimistic sentiment among analysts at that time, possibly due to favorable market conditions or strong company performance. EQR's focus on affluent renters in high-barrier-to-entry coastal markets has contributed to its resilient performance, as highlighted by its stable revenue and funds from operations (FFO) growth.

Over the past year, the average price target was $77.39, showing a gradual increase. This reflects growing confidence in EQR's ability to perform well in its sector. The company's robust A-rated balance sheet and favorable supply-demand dynamics have bolstered its performance, making it a strong choice for investors seeking stability, income, and long-term growth.

EQR offers a 3.8% dividend yield, which is well-covered and appealing to investors looking for reliable returns. BMO Capital has set a price target of $61 for EQR, indicating confidence in its future performance. Investors should monitor any news or developments related to EQR that could impact its stock price, such as changes in the real estate market or economic conditions.

Equity Residential (NYSE:EQR) Shows Positive Analyst Sentiment Amidst Urban Real Estate Demand

  • The consensus price target for Equity Residential (NYSE:EQR) has been on a positive trend, indicating a moderately positive outlook from analysts.
  • Despite a slight decrease from a quarter ago, the average price target suggests confidence in EQR's strategic focus on high-demand urban areas.
  • EQR's robust A-rated balance sheet and favorable supply-demand dynamics in the residential real estate market contribute to its appeal to investors seeking stability and growth.

Equity Residential (NYSE:EQR) is a key player in the residential real estate market, specializing in the acquisition, development, and management of properties in bustling urban locales. As part of the S&P 500, EQR is recognized for its dedication to fostering vibrant communities for long-term renters. The company competes with other major real estate firms, focusing on high-demand urban areas.

The consensus price target for EQR has shown a positive trend over the past year. Last month, analysts set an average price target of $79, reflecting a moderately positive outlook. This suggests that analysts expect the stock to maintain or slightly increase its value in the near term, aligning with EQR's strategic focus on high-demand urban areas.

A quarter ago, the average price target was slightly higher at $80.25. This indicates a more optimistic sentiment among analysts at that time, possibly due to favorable market conditions or strong company performance. EQR's focus on affluent renters in high-barrier-to-entry coastal markets has contributed to its resilient performance, as highlighted by its stable revenue and funds from operations (FFO) growth.

Over the past year, the average price target was $77.39, showing a gradual increase. This reflects growing confidence in EQR's ability to perform well in its sector. The company's robust A-rated balance sheet and favorable supply-demand dynamics have bolstered its performance, making it a strong choice for investors seeking stability, income, and long-term growth.

EQR offers a 3.8% dividend yield, which is well-covered and appealing to investors looking for reliable returns. BMO Capital has set a price target of $61 for EQR, indicating confidence in its future performance. Investors should monitor any news or developments related to EQR that could impact its stock price, such as changes in the real estate market or economic conditions.