This story was originally published on Multifamily Dive. To receive daily news and insights, subscribe to our free daily Multifamily Dive newsletter. Nine states have reached a $7 million settlement with Greystar, resolving claims that the Charleston, South Carolina-based apartment giant participated in a scheme that drove up rental prices by using shared rent-setting algorithms, according to a federal court filing in the Middle District of North Carolina. If the federal district court approves the consent ...

Company Performance - Sonder, a boutique apartment rental company, is going to file bankruptcy [1] - The company lost a key partnership with Marriott International [1] Industry Dynamics - The company is cash-strapped [1]

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]

Core Insights - The Fairways at Lowry, a 450-unit workforce apartment property in Aurora, Colorado, has been transferred to special servicing due to the owner's failure to make payments in August and September 2024 [7] - Tower 16 Capital Partners, in partnership with Dune Real Estate Partners, purchased the property for $68.5 million in November 2020 and planned to acquire a portfolio of 2,000 units in the Denver area [7] - The property is facing challenges with rising insurance costs, which have increased by 68% from the underwritten figure, and a decrease in average rents in the Denver area by 3.7% year over year [5][6] Property Details - The Fairways at Lowry is located near the Lowry master-planned development and is 3 miles from Interstate 225 and 7 miles from downtown Denver [3] - Tower 16 planned $6.8 million in renovations, including upgrades to apartment units, a new clubhouse, gym, updated pool area, and outdoor amenities [4] Market Conditions - The Apartment Association of Metro Denver reported a decrease in average rents by $71 since Q2 2024 and $46 lower than the same period in 2023, indicating a challenging rental market for property owners [6] - The high supply of apartments in the Denver area has contributed to falling rents, impacting owners who had planned extensive property improvements to capture increased rent [5][6]

Core Insights - Equity Residential reported Q2 2025 earnings with GAAP EPS of $0.50, exceeding analyst expectations of $0.34 by $0.16, primarily due to property sale gains [1][5] - Revenue reached $768.8 million, a 4.7% increase from the previous year, but slightly below consensus estimates [1][5] - Funds from operations (FFO) per share increased to $0.98, with normalized FFO at $0.99 per share [1][5] Financial Performance - Q2 2025 GAAP EPS was $0.50, up 6.4% from $0.47 in Q2 2024 [2] - Normalized FFO per share rose 2.1% from $0.97 in Q2 2024 to $0.99 in Q2 2025 [2] - FFO per share increased 4.3% from $0.94 in Q2 2024 to $0.98 in Q2 2025 [2] - Revenue for Q2 2024 was $734.2 million, indicating a year-over-year growth of 4.9% [5] Operational Highlights - Weighted average occupancy rate reached 96.6% in the same-store portfolio, exceeding internal projections [6] - Same-store revenue increased by 2.7%, while expense growth was 3.7%, leading to a net operating income (NOI) growth of 2.3% [6] - Leasing trends showed a blended lease rate increase of 3.0%, driven by a 5.2% growth in renewal rates [9] Geographic Performance - San Francisco reported a revenue growth of 4.5% with occupancy exceeding 97% [7] - New York also experienced strong revenue and occupancy improvements [7] - Expansion markets like Denver faced declines in revenue and occupancy due to new housing supply [7] Strategic Initiatives - The company acquired eight apartment properties in suburban Atlanta for $533.8 million and sold one Seattle property for $121.0 million [8] - Management adjusted guidance to reflect a net-neutral capital allocation approach for FY2025, balancing $1.0 billion in acquisitions with $1.0 billion in sales [8] - The company continues to invest in technology to enhance operational efficiency and streamline the resident experience [12] Outlook and Guidance - Management raised full-year 2025 guidance for EPS, FFO per share, and normalized FFO per share, with FFO per share now expected to range from $4.03 to $4.09 [15] - Same-store NOI growth is expected between 2.2% and 2.8%, with physical occupancy forecasted to be 96.4% [15] - Expense guidance was slightly lowered, with the range revised to 3.5% to 4.0% [16]

Investment Highlights - IRT's 5-Year Total Shareholder Return (TSR) is 136% and 10-Year TSR is 277%[9] - Value-Add program has an average ROI of 16.6% on approximately 9,700 completed renovations, boosting Same-Store NOI by 20%[10] - The future pipeline of approximately 13,000 units represents $39-$40 million of incremental NOI and approximately $500 million of future shareholder value[10] - IRT has approximately $750 million of liquidity to fund growth[9] Portfolio Overview - IRT owns and operates 113 communities with 33,175 units[12] - Sunbelt exposure accounts for 73% of NOI[12] - Q1 2025 average occupancy was 95.4%, a 100 basis point increase compared to Q1 2024[12] - Gross assets are valued at $6.2 billion[12] Recent Updates - Q1 2025 Core FFO per share was $0.27[15] - Same-Store Portfolio Results showed a 2.3% revenue Y/Y growth, 1.6% operating expense Y/Y growth, and 2.7% NOI Y/Y growth[15] - Q2 2025 blended rental rate growth is expected to be between 0.5% and 0.9%[16] - Property insurance renewal on May 15, 2025, realized a 20% decrease in premium[16] Growth Drivers - Value-Add renovations boost baseline NOI, driving approximately 20% outsized growth[28] - Home ownership costs are on average 90% higher than IRT's rent in the top 10 markets[65] - IRT's rent is approximately $615 per month, or 36% lower than new construction suburban rents[71]