CHICAGO - Equity Residential (NYSE: NYSE:EQR), a real estate investment trust specializing in apartment properties, has indicated that its Earnings Per Share (EPS) and Funds from Operations (FFO) per share for 2024 might land in the lower half of its full-year guidance. This outlook was reaffirmed in the company's first-quarter earnings release on April 23, 2024, and was attributed to adjustments made for a litigation reserve in the first quarter.
The update came as part of an investor presentation posted on the company's website ahead of senior management's participation in the Nareit REITWeek 2024 Investor Conference. Despite the anticipated dip in EPS and FFO, Equity Residential's Normalized FFO per share, same store revenue, and same store net operating income (NOI) are trending towards the top end of their respective full-year guidance ranges.
Preliminary operating statistics for May 2024 show a solid performance in the company's Residential Same Store Properties, which encompass 77,211 apartment units. Physical occupancy stood at 96.5%, a slight increase from 96.3% in Q1 2024 and 95.8% in Q4 2023. The percentage of residents renewing their leases was 57.0% in May, compared to 61.1% in the first quarter and 59.1% in the last quarter of the previous year.
New lease changes showed a marginal increase of 0.4%, which is a turnaround from the declines of 2.2% and 4.6% in Q1 2024 and Q4 2023, respectively. The renewal rate achieved was 5.0%, indicating that residents renewing leases are accepting an average increase in rent. The blended rate, which is the weighted average of new lease changes and renewal rates achieved, was at 2.9% for May, showing an improvement from the 1.6% and 0.7% reported in the previous two quarters.
Equity Residential, a member of the S&P 500, has a portfolio that includes 299 properties with 79,688 apartment units. The company operates mainly in key urban centers known to attract affluent long-term renters, such as Boston, New York, Washington, D.C., and San Francisco, among others.
InvestingPro Insights
As Equity Residential (NYSE: EQR) navigates through a challenging fiscal year, the company's resilience is reflected in its market performance and operational metrics. According to InvestingPro data, Equity Residential boasts a robust market capitalization of 25.26 billion USD, underscoring its significant presence in the Residential REITs industry. With a P/E ratio of 26.91 and an adjusted P/E ratio for the last twelve months as of Q1 2024 standing at 45.5, the company's valuation is reflective of investor confidence in its profitability and sustained growth.
InvestingPro Tips suggest Equity Residential as a prominent player in its sector, with a track record of maintaining dividend payments for an impressive 32 consecutive years, a testament to its financial stability and commitment to shareholder returns. Furthermore, the company's ability to trade near its 52-week high, at 93.1% of that peak, signals market optimism about its future prospects. This is bolstered by analysts' predictions that Equity Residential will be profitable this year, a sentiment supported by a solid gross profit margin of 63.8% for the last twelve months as of Q1 2024.
For readers looking to delve deeper into Equity Residential's financial health and strategic positioning, there are additional InvestingPro Tips available. These insights, along with more detailed analytics, can be found at InvestingPro's dedicated page for Equity Residential: https://www.investing.com/pro/EQR. Interested investors can also take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of expert analysis and data to inform their investment decisions.
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