Equity Residential (EQR) Q2 2024 earnings summary

Executive summary

• Q2 2024 results exceeded expectations, with improved guidance driven by strong demand, high occupancy, and manageable new supply in most markets, especially in coastal and East Coast regions, while expansion markets face supply headwinds.

• 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.

• Portfolio benefits from high homeownership costs, steady employment in target demographics, and high customer satisfaction, supporting strong rental demand and resident retention.

• Acquisitions continued post-quarter with $216.8M invested in Atlanta and Dallas/Ft. Worth, and a Denver property under contract for $77M.

• The company completed one acquisition and five property dispositions, and continued to invest in both consolidated and unconsolidated development projects.

Financial highlights

• Q2 2024 EPS was $0.47, up 27% year-over-year; Normalized FFO per share was $0.97, up 3.2%; six months ended June 30, 2024: EPS $1.24 (up 34.8%), Normalized FFO per share $1.91 (up 4.9%).

• Net income for Q2 2024 was $183.6M, up from $144.9M in Q2 2023; six-month net income was $488.6M, up from $364.9M.

• Q2 2024 rental income was $734.2M, up from $717.3M in Q2 2023.

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

• Distributions declared per common share for Q2 2024 were $0.675.

Outlook and guidance

• Full-year 2024 guidance raised: same-store revenue growth 2.9%-3.5% (prior 2.0%-3.0%), expense growth 2.5%-3.5% (prior 3.5%-4.5%), NOI growth 3.0%-3.5% (prior 1.0%-2.6%).

• FY 2024 EPS guidance $3.04-$3.10; Normalized FFO per share $3.86-$3.92.

• Q3 2024 guidance: EPS $0.49-$0.53, Normalized FFO per share $0.96-$1.00.

• 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.