Equity Residential Q1 FFO Beats Estimates, Rental Income Rises Y/Y

Core Viewpoint - Equity Residential (EQR) reported a first-quarter 2025 normalized funds from operations (FFO) per share of 95 cents, exceeding the Zacks Consensus Estimate of 93 cents and reflecting a 2.2% year-over-year improvement [1] Financial Performance - Rental income for the quarter was $760.8 million, which fell short of the consensus estimate of $766.8 million, but still represented a 4.1% increase year over year [1] - Same-store revenues increased by 2.2% year over year, surpassing the estimate of 2%, while same-store expenses rose by 4.1%, exceeding the estimate of 2.2% [3] - Same-store net operating income (NOI) grew by 1.3% year over year, which was below the estimate of 1.9% [3] - The average rental rate increased by 2.4% year over year to $3,160, and same-store physical occupancy improved by 20 basis points to 96.5% [4] Portfolio Activity - The company sold two properties with 546 apartment units for approximately $225.6 million and one land parcel for about $4.3 million [6] - EQR completed joint venture development projects in New York and Denver, totaling 720 apartment units for approximately $285.9 million, and a wholly owned project in San Francisco with 225 units for about $152.6 million [7] Balance Sheet - At the end of Q1 2025, EQR had cash and cash equivalents of $39.8 million, down from $62.3 million at the end of 2024 [8] - The net debt to normalized EBITDAre ratio improved to 4.21X from 4.38X in the previous quarter, while unencumbered NOI as a percentage of total NOI increased to 90.5% from 89.7% [8] Guidance - EQR reaffirmed its guidance for 2025, projecting normalized FFO per share between $3.90 and $4.00, with the Zacks Consensus Estimate at $3.97 [10][11] - For Q2 2025, the company expects normalized FFO per share in the range of 96 cents to $1.00, with the consensus estimate at 99 cents [10] - The full-year guidance includes same-store revenue growth of 2.25-3.25%, expense increases of 3.5-4.5%, and NOI expansion of 1.4-3.0%, with physical occupancy expected at 96.2% [11]