Equity Residential Q4 FFO Meets Estimates, Rental Income Rises Y/Y

Shares of Equity Residential EQR witnessed a 2.9% rise in the after-hours trading session on Feb. 3 after it reported fourth-quarter 2024 normalized funds from operations (FFO) per share of $1.00, which was in line with the Zacks Consensus Estimate. The rental income of $766.8 million surpassed the consensus mark by 1.24%.

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Results reflected healthy same-store revenue performance and high occupancy. The company issued its guidance for 2025.

On a year-over-year basis, the normalized FFO per share remained unchanged, with rental income climbing 5.4%.

According to Mark J. Parrell, Equity Residential’s president and CEO,“We expect a steady improvement in our same store revenue results as we go through 2025 driven by higher lease rate growth, continued elevated occupancy levels and significant contributions from other income in 2025.” He also added, “With new apartment supply in 2026 at decade lows in our coastal markets and declining significantly in our Expansion Markets of Atlanta, Dallas and Denver, the longer term set up for our business is outstanding.”

For full-year 2024, the normalized FFO per share came in at $3.89, which met the Zacks Consensus Estimate and was higher than the prior-year tally of $3.78. This was backed by 3.7% growth in rental income to $2.98 billion, which surpassed the Zacks Consensus Estimate marginally.

EQR’s Q4 in Detail

Same-store revenues were up 2.4% year over year. Same-store expenses flared up 4.3%, and same-store net operating income (NOI) climbed 1.6% year over year.

The average rental rate increased 2.2% year over year to $3,147 in the quarter ended December. Meanwhile, the physical occupancy improved by 30 basis points at 96.1% for the same-store portfolio. Our estimate for the metric was 95.9%.

Same-store residential revenues were up 2.5% year over year, while expenses increased 4.2%. Same-store residential NOI expanded 1.7% year over year.

The new lease change for its residential same-store properties was down 4.3%, while the renewal rate achieved by EQR was 5% for the fourth quarter. The blended rate for the quarter was 1%. The physical occupancy for this portfolio was 96.1%, unchanged sequentially.

EQR’s Portfolio Activity

In the fourth quarter, Equity Residential acquired three properties with 795 units for $274.3 million. The company sold seven properties with 1,629 units for $610.1 million.

EQR’s Balance Sheet

Equity Residential exited the fourth quarter of 2024 with cash and cash equivalents of $62.3 million, up from $28.6 million recorded as of Sept. 30, 2024.

The net debt to normalized EBITDAre was 4.38X, which decreased from 4.56X in the previous quarter. The unencumbered NOI as a percentage of the total NOI was 89.7% in the quarter, which remained unchanged from the prior quarter.

2025 Guidance by EQR

For full-year 2025, Equity Residential projects normalized FFO per share in the band of $3.90-$4.00. The Zacks Consensus Estimate is currently pegged at $4.02.

The company’s full-year guidance incorporates projections for same-store revenue growth of 2.25-3.25%, an expense increase of 3.5-4.5% and an NOI expansion of 1.4-3%. Physical occupancy is expected at 96.2%.

For the first quarter of 2025, the company projects normalized FFO per share in the band of 90-94 cents. The Zacks Consensus Estimate is currently pegged at 96 cents.

EQR’s Zacks Rank

Equity Residential currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equity Residential Price, Consensus and EPS Surprise

Equity Residential price-consensus-eps-surprise-chart | Equity Residential Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of other residential REITs, such as AvalonBay Communities, Inc. AVB, UDR Inc. UDR and Mid-America Apartment Communities, Inc. MAA.

All three companies are scheduled to come up with their results on Feb. 5, after market close.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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