Equity Residential (EQR) Q2 2024 earnings summary

Executive summary

• Same-store revenues increased 2.9% and expenses rose 2.7%, resulting in 3% NOI growth and a 3.2% increase in NFFO per share compared to the same quarter last year, with East Coast markets and Seattle outperforming.

• Q2 2024 results exceeded expectations, driven by strong demand, high occupancy, and manageable new supply in most markets.

• The company completed one acquisition in Boston and several property dispositions, with additional acquisitions in Atlanta and Dallas/Ft. Worth post-quarter.

• High homeownership costs and steady employment in target demographics support strong rental demand and high resident retention.

• Same store properties, representing over 77,000 units, delivered solid NOI growth, supported by high occupancy and resilient rental rates.

Financial highlights

• Net income for the six months ended June 30, 2024 was $488.6 million, up 33.9% year-over-year; Q2 net income was $183.6 million, up 26.7%.

• Q2 2024 EPS: $0.47, up 27% year-over-year; Normalized FFO per share: $0.97, up 3.2%.

• Rental income rose 3.0% year-over-year to $1.46 billion for the six months and $734.2 million for the quarter.

• Same-store NOI growth reached 3% year-over-year, with NFFO per share up 3.2%.

• Occupancy for the quarter was 96.4%, with East Coast markets at 97%+ and strong renewal rates.

Outlook and guidance

• Raised 2024 same store revenue growth guidance to 2.9%-3.5% and NOI growth guidance to 3.0%-3.5%.

• Lowered 2024 same store expense growth guidance to 2.5%-3.5%.

• Expectation of normal seasonal deceleration in the third and fourth quarters, with blended rates now expected in the mid-2% range for the year.

• Margin expansion anticipated, with operating margin approaching 70% as innovation and efficiency initiatives scale.

• Management expects continued healthy demand, modest supply in core coastal markets, and resilience from the affluent renter base.