We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Equity Residential (EQR) Sees Good Demand, Occupancy Improves
Read MoreHide Full Article
Equity Residential (EQR - Free Report) , in its recently-released operating update, has noted that it continued to witness “good demand for its apartment units” in February. This is highlighted by the sustained trend of move-ins surpassing move outs, in turn translating into improvement in physical occupancy.
Particularly, as of the end of February, the company saw physical occupancy of 95.3%, up from 95.1% at January end and 94.4% at December end. Renewals have also improved in February with 54% of residents renewing by the month compared with 51% by January. Notably, 53% of residents renewed by December.
The company also noted that it is presently witnessing improvement in rates and reductions in leasing concession usage. Blended rate for February was a negative 11.5% compared with 14.5% in January and 13.9% in December.
Apart from Equity Residential’s, other residential REITs including AvalonBay Communities (AVB - Free Report) , Essex Property (ESS - Free Report) , UDR Inc. (UDR - Free Report) and several others’ businesses have been affected by the pandemic, with demand for rental units and tenants’ rent-paying capabilities bearing the brunt, leading to high concessions and uncollectible lease revenues.
Also, health concerns of living in dense environments and the continuation of the work-from-home mandates are resulting in a shift of renter demand away from higher cost and urban/infill markets.
However, there has been a rebound in demand in recent months and leasing activity is taking place despite the months being considered as seasonally weak in normal times.
For Equity Residential, though its urban core portfolio has been struggling, the company is anticipated to benefit from its sub-urban portfolio exposure, which continues to fare well amid the pandemic. The company has a healthy balance sheet, and is banking on technology, scale and organizational capabilities to drive growth.
Last month, Equity Residential reported fourth-quarter 2020 normalized funds from operations (FFO) per share of 76 cents, surpassing the Zacks Consensus Estimate of 74 cents, reflecting better-than-anticipated rental income.
However, normalized FFO per share declined 16.5% and rental income fell 10.3%, on a year-over-year basis. Results reflected lower blended rates and physical occupancy compared with the year-ago period when the residential REIT delivered solid pre-pandemic results. Management had noted that it expects the first half of 2021 to be the low point in its reported numbers and anticipates noticeable improvement in the second half of the current year.
Currently, Equity Residential carries a Zacks Rank # 4 (Sell). Shares of this residential REIT have gained 21.2% in the past six months compared with its industry’s increase of 2.4%.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Equity Residential (EQR) Sees Good Demand, Occupancy Improves
Equity Residential (EQR - Free Report) , in its recently-released operating update, has noted that it continued to witness “good demand for its apartment units” in February. This is highlighted by the sustained trend of move-ins surpassing move outs, in turn translating into improvement in physical occupancy.
Particularly, as of the end of February, the company saw physical occupancy of 95.3%, up from 95.1% at January end and 94.4% at December end. Renewals have also improved in February with 54% of residents renewing by the month compared with 51% by January. Notably, 53% of residents renewed by December.
The company also noted that it is presently witnessing improvement in rates and reductions in leasing concession usage. Blended rate for February was a negative 11.5% compared with 14.5% in January and 13.9% in December.
Apart from Equity Residential’s, other residential REITs including AvalonBay Communities (AVB - Free Report) , Essex Property (ESS - Free Report) , UDR Inc. (UDR - Free Report) and several others’ businesses have been affected by the pandemic, with demand for rental units and tenants’ rent-paying capabilities bearing the brunt, leading to high concessions and uncollectible lease revenues.
Also, health concerns of living in dense environments and the continuation of the work-from-home mandates are resulting in a shift of renter demand away from higher cost and urban/infill markets.
However, there has been a rebound in demand in recent months and leasing activity is taking place despite the months being considered as seasonally weak in normal times.
For Equity Residential, though its urban core portfolio has been struggling, the company is anticipated to benefit from its sub-urban portfolio exposure, which continues to fare well amid the pandemic. The company has a healthy balance sheet, and is banking on technology, scale and organizational capabilities to drive growth.
Last month, Equity Residential reported fourth-quarter 2020 normalized funds from operations (FFO) per share of 76 cents, surpassing the Zacks Consensus Estimate of 74 cents, reflecting better-than-anticipated rental income.
However, normalized FFO per share declined 16.5% and rental income fell 10.3%, on a year-over-year basis. Results reflected lower blended rates and physical occupancy compared with the year-ago period when the residential REIT delivered solid pre-pandemic results. Management had noted that it expects the first half of 2021 to be the low point in its reported numbers and anticipates noticeable improvement in the second half of the current year.
Currently, Equity Residential carries a Zacks Rank # 4 (Sell). Shares of this residential REIT have gained 21.2% in the past six months compared with its industry’s increase of 2.4%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>