CHICAGO--(BUSINESS WIRE)--Equity Residential (NYSE: EQR) today announced that its Board of Trustees declared quarterly dividends on the Company's common and preferred shares. A regular common share dividend for the fourth quarter of $0.6925 per share will be paid on January 16, 2026 to shareholders of record on January 2, 2026. A quarterly dividend of $1.03625 per share will be paid on December 31, 2025 to shareholders of record on December 19, 2025 of the Company's Series K Preferred Shares. A. ...

Valued at a market cap of $23.2 billion, Equity Residential (EQR) is a real estate investment trust (REIT) that owns, operates, and develops high-quality apartment communities in densely populated, high-income urban and suburban markets. The Chicago, Illinois-based company focuses on well-located properties near employment centers, transit, and lifestyle amenities, attracting long-term, professionally employed renters. Companies worth $10 billion or more are typically classified as “large-cap stocks,” and ...

Core Viewpoint - Equity Residential has shown a positive performance with a 4.5% increase in shares since the last earnings report, outperforming the S&P 500 [1][2] Recent Earnings Report - For Q3 2025, Equity Residential reported a normalized FFO per share of $1.02, meeting estimates and reflecting a 4.1% year-over-year improvement [3] - Rental income reached $782.4 million, exceeding the consensus estimate of $781.4 million, and increased by 4.6% year over year [4] Financial Performance Details - Same-store revenues rose by 3% year over year, surpassing the estimate of 1.9%, while same-store expenses increased by 3.6% [5] - Same-store NOI grew by 2.8% year over year, exceeding the estimate of 1.7% [5] - The average rental rate increased by 2.7% year over year to $3,218, with physical occupancy improving by 20 basis points to 96.3% [5] Portfolio Activity - In Q3 2025, Equity Residential acquired a 375-unit property in Arlington, TX, for nearly $103 million and sold two properties for approximately $247.9 million [7] Balance Sheet Overview - The company ended Q3 2025 with cash and cash equivalents of $93.1 million, up from $31.3 million in the previous quarter [8] - The net debt to normalized EBITDAre ratio decreased to 4.41X from 4.45X [8] Share Repurchase - During Q3 2025, Equity Residential repurchased approximately 1.5 million common shares for a total value of $99.1 million [9] Revised Guidance - For Q4 2025, the company projects normalized FFO per share between $1.02 and $1.06 [10] - The full-year guidance for 2025 has been revised to a normalized FFO per share range of $3.98-$4.02, with expectations for same-store revenue growth of 2.5-3.0% and physical occupancy at 96.4% [11] Estimate Trends - Since the earnings release, there has been an upward trend in estimates for Equity Residential [12] VGM Scores - Equity Residential currently holds a subpar Growth Score of D and a similar score for momentum, with an aggregate VGM Score of F [13] Outlook - Estimates for the stock have been trending upward, and the company holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [14]

Core Viewpoint - Equity Residential (EQR) is identified as a quality company that has experienced a sell-off due to short-term issues, presenting a potential buying opportunity for investors [1]. Company Analysis - EQR owns quality assets and maintains a strong balance sheet, which are critical factors for long-term stability and growth [1]. - The company offers a generous dividend, making it attractive for income-focused investors [1].

Core Viewpoint - Equity Residential (EQR) has significantly underperformed the broader market and industry benchmarks over the past year, with stock prices declining sharply despite some positive revenue growth in Q3 [2][3][4]. Company Performance - EQR's stock prices have dropped 16.9% year-to-date and 18.4% over the past 52 weeks, contrasting with the S&P 500 Index's gains of 16.5% in 2025 and 14.5% over the past year [2]. - The company's same-store residential revenues increased by 3% year-over-year, while overall topline revenue rose 4.6% to $748.3 million, exceeding consensus estimates by 13 basis points [4]. - Normalized funds from operations (NFFO) per share increased by 4.1% year-over-year to $1.02, aligning with market expectations [4]. Analyst Expectations - For the full fiscal year 2025, analysts project EQR to deliver an NFFO of $4 per share, reflecting a 2.8% year-over-year increase [5]. - EQR has a solid history of meeting or exceeding NFFO projections, having done so in each of the past four quarters [5]. - Among 27 analysts covering EQR, the consensus rating is a "Moderate Buy," consisting of 10 "Strong Buys," one "Moderate Buy," and 16 "Holds" [5]. Recent Developments - Following the release of mixed Q3 results, EQR's stock declined by 2.9% in the trading session [4]. - Analyst sentiment has slightly shifted, with Wells Fargo maintaining an "Equal-Weight" rating but lowering the price target from $68 to $62 [6].

Financial Performance - Net income for the nine months ended September 30, 2025, reached $760,451 thousand, compared to $637,104 thousand for the same period in 2024, indicating a growth of approximately 19.3%[25] - Earnings per share (basic) for the nine months ended September 30, 2025, was $1.94, compared to $1.62 for the same period in 2024, reflecting an increase of about 19.8%[25] - Comprehensive income for the nine months ended September 30, 2025, was $758,130 thousand, compared to $634,934 thousand for the same period in 2024, showing an increase of about 19.4%[26] - For the nine months ended September 30, 2025, net income attributable to controlling interests was $737,999,000, compared to $616,716,000 for the same period in 2024, representing a 19.6% increase[38] - Total net income for the nine months ended September 30, 2025, was $760.5 million, a 19.4% increase from $637.1 million in 2024[170] Revenue and Income Sources - Rental income for the nine months ended September 30, 2025, was $2,312,048 thousand, up from $2,213,329 thousand in the same period of 2024, representing an increase of about 4.5%[25] - The Company reported total lease revenue of $2,232.7 million for the nine months ended September 30, 2025, compared to $2,134.4 million for the same period in 2024[104] - Total rental income for the nine months ended September 30, 2025, rose to $2.31 billion, up 4.5% from $2.21 billion in 2024[170] - Same store rental income increased by 2.6% to $2.15 billion for the nine months ended September 30, 2025, compared to $2.09 billion in 2024[171] Assets and Liabilities - Total assets increased to $21,065,063 thousand as of September 30, 2025, compared to $20,834,176 thousand as of December 31, 2024, reflecting a growth of approximately 1.1%[24] - Total liabilities increased to $9,600,034 thousand as of September 30, 2025, from $9,249,829 thousand as of December 31, 2024, marking an increase of approximately 3.8%[24] - Total shareholders' equity as of September 30, 2025, was $11,084,949 thousand, slightly up from $11,044,560 thousand as of December 31, 2024, indicating a growth of approximately 0.4%[24] - The balance of cash and cash equivalents increased to $93,092,000 as of September 30, 2025, from $62,302,000 at the end of 2024, a significant increase of 49.5%[42] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $1,261,731, up from $1,219,382 in 2024, indicating an increase of about 3.5%[29] - Net cash used for investing activities was $(623,098) in 2025, a decrease from $(1,363,616) in 2024, showing an improvement of approximately 54.3%[29] - The Company acquired rental properties for a total purchase price of $636.8 million during the nine months ended September 30, 2025[89] - The Company disposed of 5 rental properties for a total sales price of $598.8 million, resulting in a net gain of $355.0 million[91] Shareholder Distributions - Common shares repurchased and retired totaled $(94,287) in 2025, compared to $(38,474) in 2024, indicating an increase in share buybacks of about 144.5%[31] - Common share distributions for the nine months ended September 30, 2025, totaled $790,106,000, an increase from $767,779,000 in 2024, reflecting a 2.9% rise[38] - The Company declared a quarterly dividend of $0.6925 per share/unit, reflecting a 2.6% annualized increase over 2024[197] Debt and Financing - Total debt, net, as of September 30, 2025, was $8,435,787,000, compared to $8,121,745,000 as of December 31, 2024, indicating an increase of 3.9%[123] - The Company has a $2.5 billion unsecured revolving credit facility, with $1.650052 billion available as of September 30, 2025[119] - The Company issued $500 million of seven-year unsecured notes at a 4.95% interest rate, increasing total unsecured public notes to $5.996686 billion[114] Operational Metrics - Physical occupancy across the portfolio was 96.5%, with a turnover rate of 32.1% for the same period[1] - Total net operating income (NOI) for the nine months ended September 30, 2025, was $1,551.3 million, compared to $1,496.5 million for the same period in 2024, reflecting an increase of about 3.7%[142] - Same store net operating income (NOI) for the quarter ended September 30, 2025, was $493.0 million, up from $479.6 million in the prior year, reflecting a year-over-year increase of 2.8%[144] Market and Economic Conditions - The Company expects continued positive trends due to elevated single-family home ownership costs and low competitive new supply in established markets[186] - The Seattle market showed improvement due to large employers' return to office policies, although recovery is slower compared to San Francisco[185] Legal and Regulatory Matters - The Company has been named as a defendant in multiple antitrust lawsuits related to revenue management software, with ongoing legal proceedings that may impact future financial conditions[134] - The Company has elected taxable REIT subsidiary status for certain corporate subsidiaries, which will incur federal and state income taxes on taxable income[67]

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Core Insights - Equity Residential (EQR) reported third-quarter 2025 normalized funds from operations (FFO) per share of $1.02, meeting the Zacks Consensus Estimate and reflecting a 4.1% year-over-year improvement [1][8] - The company revised its 2025 guidance for normalized FFO per share to a range of $3.98-$4.02, indicating steady growth and occupancy gains [9] Financial Performance - Rental income for the quarter was $782.4 million, exceeding the consensus estimate of $781.4 million, and increased by 4.6% year over year [1][8] - Same-store revenues rose by 3% year over year, surpassing the estimate of 1.9%, while same-store expenses increased by 3.6% [2] - Same-store net operating income (NOI) climbed 2.8% year over year, above the estimate of 1.7% [2] Operational Metrics - The average rental rate increased by 2.7% year over year to $3,218, and same-store portfolio physical occupancy improved by 20 basis points to 96.3% [3] - New lease change for residential same-store properties decreased by 1.0%, while the renewal rate was 4.5% for the third quarter [4] Portfolio Activity - In Q3 2025, Equity Residential acquired a 375-unit property in Arlington, TX, for nearly $103 million and sold two properties for a total of approximately $247.9 million [5] Balance Sheet - The company ended Q3 2025 with cash and cash equivalents of $93.1 million, up from $31.3 million at the end of Q2 2025 [6] - The net debt to normalized EBITDAre ratio decreased to 4.41X from 4.45X in the previous quarter [6] Future Guidance - For Q4 2025, EQR projects normalized FFO per share in the range of $1.02 to $1.06, with the Zacks Consensus Estimate currently at $1.04 [7] - The full-year guidance for 2025 includes projections for same-store revenue growth of 2.5-3.0%, expense increase of 3.5-4.0%, and NOI expansion of 2.1-2.6% [9]

Financial Data and Key Metrics Changes - The third quarter results reflect resilience in the business despite a mixed macroeconomic picture, with strong demand and excellent resident retention, particularly in San Francisco and New York [4][6] - The unemployment rate for college-educated renters was reported at 2.7%, significantly below the national average, indicating a stable employment situation for existing residents [5] - Year-over-year income growth for new residents was 6.2%, contributing to high occupancy rates in the mid-96% range [5][6] - The company adjusted the midpoint of its annual same-store revenue guidance down by 15 basis points to 2.75% due to early seasonal traffic decline [7][8] Business Line Data and Key Metrics Changes - The renewal rate for the quarter was strong at 4.5%, with nearly 59% of leases renewing, contributing to the lowest reported turnover in the company's history [17] - New lease rates experienced a decline of 1%, resulting in a blended rate increase of 2.2% for the quarter, which was at the low end of expectations [18][19] Market Data and Key Metrics Changes - San Francisco is expected to be the best-performing market in 2025, with a favorable supply setup and a 22% increase in median incomes since 2019 [8][20] - Washington, DC experienced a slowdown in demand and pricing power due to federal job cuts and a government shutdown, with occupancy rates around 95% and a 4% decline in net effective prices [22][72] - Competitive supply in Washington, DC is projected to drop by 65% in 2026, which could improve market conditions [22][73] Company Strategy and Development Direction - The company is focused on capital allocation, having repurchased approximately $100 million of its stock during the third quarter and closed on a 375-unit acquisition in Arlington, Texas [11][12] - The company has lowered its acquisitions and dispositions guidance for the full year to $750 million each, indicating a selective approach to acquisitions due to undervaluation compared to private market asset prices [12][28] - The company is implementing AI-driven tools to enhance operational efficiency and improve resident experiences, with a focus on reducing application processing times and improving service request handling [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's forward prospects, citing a decline in competitive new supply and strong demand in key markets [14][15] - The company anticipates a solid performance in 2026, with high occupancy rates and potential for earnings growth if job growth reignites [15][16] - Management acknowledged macroeconomic uncertainties but remains optimistic about the long-term outlook for Washington, DC and other markets [22][23] Other Important Information - The company is experiencing a significant reduction in competitive new supply, with a projected 35% decline in deliveries in 2026 compared to 2025 [13] - The company is focused on optimizing revenue through enhanced customer experiences and retention strategies, which have proven effective in maintaining occupancy and reducing vacancy costs [18][19] Q&A Session Summary Question: How does the company approach forecasting next year's growth amid falling rent growth? - Management indicated that they are modeling for continued deceleration but feel confident about the setup for next year due to reduced competitive supply [35] Question: What factors influence the company's capital allocation decisions regarding stock buybacks? - Management highlighted the attractiveness of investment opportunities and the need to balance stock buybacks with asset sales to improve growth potential [37] Question: What is the current state of demand in Washington, DC and other markets? - Management noted a slowdown in demand in Washington, DC, with occupancy rates around 95% and increased use of concessions, while suburban markets are performing better [70][72] Question: What are the expectations for rent growth in San Francisco? - Management expects strong rent growth in San Francisco due to high demand and low supply, with the market recovering to pre-pandemic rent levels [74] Question: How does the company view the potential for reentering the convertible debt market? - Management considers convertible debt an interesting tool but emphasizes the need to balance it with stock buybacks and existing capital needs [52][54]

Financial Data and Key Metrics Changes - The third quarter results reflect resilience in the business despite a mixed macroeconomic environment, with strong demand and excellent resident retention, particularly in San Francisco and New York [4][6] - Year-over-year income growth for new residents was reported at 6.2%, indicating a healthy growth rate [5] - The company adjusted the midpoint of its annual same-store revenue guidance down by 15 basis points to 2.75% due to observed market conditions [7][11] Business Line Data and Key Metrics Changes - The renewal rate for the quarter was strong at 4.5%, with nearly 59% of leases renewing, contributing to the lowest reported turnover in the company's history [17] - New lease rates decreased by 1%, resulting in a blended rate increase of 2.2% for the quarter, which was at the low end of expectations [18][19] Market Data and Key Metrics Changes - San Francisco is expected to be the best-performing market in 2025, with a favorable supply setup and significant demand driven by the tech sector [8][20] - Washington, DC experienced a decline in demand and pricing power due to federal job cuts and a government shutdown, leading to increased concessions and a slight increase in turnover [22][71] Company Strategy and Development Direction - The company is focused on capital allocation, having repurchased approximately $100 million of its stock during the third quarter, while also closing on a 375-unit acquisition in Arlington, Texas [11][12] - The company plans to be selective in acquisitions due to the current valuation of its stock compared to private market asset prices [12][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects for the business, citing a significant decline in competitive new supply expected in 2026 [14][15] - The company anticipates that if job growth reignites, it could lead to strong results in 2026, with portfolio-wide occupancy above 96% [15][32] Other Important Information - The company has implemented AI-driven tools to enhance operational efficiency, including a 50% reduction in application processing time [25][26] - The company has adjusted its full-year same-store revenue outlook to a range of 2.5%-3%, with a midpoint of 2.75% [30][32] Q&A Session Summary Question: How does the company approach forecasting next year's growth amid falling rent growth? - Management indicated that they are modeling for continued deceleration but feel positive about the setup for next year due to reduced competitive supply [35] Question: What factors influence the decision to continue stock buybacks? - The decision is influenced by the attractiveness of other investment opportunities and the availability of capital needed for acquisitions [37][39] Question: What is the current state of demand in Washington, DC? - Demand has cooled, with a decrease in urgency to sign leases and an increase in concessions, but management remains optimistic about long-term prospects due to declining competitive supply [70][72] Question: What is the outlook for rent growth in San Francisco? - Management expects strong rent growth due to a supply-demand imbalance, with rents approaching 2019 levels and incomes up 22% since then [64][74] Question: How does the company view the impact of AI on job growth in key markets? - Management believes that while AI may displace some jobs, it is also creating opportunities in related industries, contributing to overall job growth [56][61]