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Equity Residential (EQR) to Buy $1B Assets From Blackstone
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Equity Residential(EQR - Free Report) recently announced that it has entered into an arrangement with The Blackstone Group (BX - Free Report) to buy 11 apartment properties from Blackstone Real Estate strategies in separate transactions, including Blackstone Real Estate Income Trust, Blackstone Real Estate Partners and Blackstone Property Partners, for $964 million. Subject to customary closing conditions, the transaction is expected to conclude in the third quarter of 2024.
With the properties being located in Equity Residential’s expansion markets, this purchase will mark a significant milestone contributing to the company’s diversification efforts and growth plans targeting higher-end renters.
The potential acquisition of a high-quality portfolio consists of four properties with 1,357 apartment units in Atlanta, GA, four properties with 1,237 apartment units in Dallas/Ft. Worth, TX, and three properties with 978 apartment units in Denver, CO. These properties are, on average, eight years old.
As per Alec Brackenridge, Equity Residential’s executive vice president and chief investment officer, “This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets.” Alec Brackenridge also noted that the pricing is “attractive compared to replacement costs.”
Equity Residential has an established presence in Boston, New York, Washington, D.C., Southern California (including Los Angeles, Orange County and San Diego), San Francisco and Seattle. This residential REIT is also focused on growing its footprint in Denver, Atlanta, Dallas/Ft. Worth and Austin.
Equity Residential has been carrying out several strategic acquisitions to enhance its overall portfolio quality over the years. In the second quarter of 2024, the company acquired a 160-apartment unit property located in suburban Boston for $62.6 million. Following the conclusion of the second quarter, the company purchased two properties with 644 apartment units located in Atlanta and Dallas/Ft. Worth for $216.8 million.
In 2023, the company acquired four operating properties for an aggregate purchase price of $366.3 million. These included 1,183 apartment units.
Last month, this Chicago, IL-based real estate investment trust (REIT) came up with a solid second-quarter 2024 performance. EQR reported normalized funds from operations (FFO) per share of 97 cents, surpassing the Zacks Consensus Estimate of 96 cents. Moreover, the figure improved by 3.2% on a year-over-year basis. Results reflected decent same-store performances backed by healthy demand. The company also raised its 2024 guidance.
Healthy demand for rental units in its markets is likely to aid Equity Residential despite elevated supply in some regions. Its portfolio diversification efforts, technology initiatives to drive margin and decent financial position bode well for long-term growth.
Over the past three months, shares of this Zacks Rank #2 (Buy) company have risen 7% compared with the industry’s upside of 4.4%
The Zacks Consensus Estimate for AvalonBay’s 2024 funds from operations (FFO) per share has been raised marginally northward over the past week to $10.94.
The consensus estimate for UDR’s current-year FFO per share has moved marginally northward over the past two months to $2.45.
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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Equity Residential (EQR) to Buy $1B Assets From Blackstone
Equity Residential(EQR - Free Report) recently announced that it has entered into an arrangement with The Blackstone Group (BX - Free Report) to buy 11 apartment properties from Blackstone Real Estate strategies in separate transactions, including Blackstone Real Estate Income Trust, Blackstone Real Estate Partners and Blackstone Property Partners, for $964 million. Subject to customary closing conditions, the transaction is expected to conclude in the third quarter of 2024.
With the properties being located in Equity Residential’s expansion markets, this purchase will mark a significant milestone contributing to the company’s diversification efforts and growth plans targeting higher-end renters.
The potential acquisition of a high-quality portfolio consists of four properties with 1,357 apartment units in Atlanta, GA, four properties with 1,237 apartment units in Dallas/Ft. Worth, TX, and three properties with 978 apartment units in Denver, CO. These properties are, on average, eight years old.
As per Alec Brackenridge, Equity Residential’s executive vice president and chief investment officer, “This transaction is a significant step in our goal of generating a higher percentage of our annual net operating income from these strong growth expansion markets.” Alec Brackenridge also noted that the pricing is “attractive compared to replacement costs.”
Equity Residential has an established presence in Boston, New York, Washington, D.C., Southern California (including Los Angeles, Orange County and San Diego), San Francisco and Seattle. This residential REIT is also focused on growing its footprint in Denver, Atlanta, Dallas/Ft. Worth and Austin.
Equity Residential has been carrying out several strategic acquisitions to enhance its overall portfolio quality over the years. In the second quarter of 2024, the company acquired a 160-apartment unit property located in suburban Boston for $62.6 million. Following the conclusion of the second quarter, the company purchased two properties with 644 apartment units located in Atlanta and Dallas/Ft. Worth for $216.8 million.
In 2023, the company acquired four operating properties for an aggregate purchase price of $366.3 million. These included 1,183 apartment units.
Last month, this Chicago, IL-based real estate investment trust (REIT) came up with a solid second-quarter 2024 performance. EQR reported normalized funds from operations (FFO) per share of 97 cents, surpassing the Zacks Consensus Estimate of 96 cents. Moreover, the figure improved by 3.2% on a year-over-year basis. Results reflected decent same-store performances backed by healthy demand. The company also raised its 2024 guidance.
Healthy demand for rental units in its markets is likely to aid Equity Residential despite elevated supply in some regions. Its portfolio diversification efforts, technology initiatives to drive margin and decent financial position bode well for long-term growth.
Over the past three months, shares of this Zacks Rank #2 (Buy) company have risen 7% compared with the industry’s upside of 4.4%
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the residential REIT sector are AvalonBay Communities (AVB - Free Report) and UDR Inc. (UDR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for AvalonBay’s 2024 funds from operations (FFO) per share has been raised marginally northward over the past week to $10.94.
The consensus estimate for UDR’s current-year FFO per share has moved marginally northward over the past two months to $2.45.
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.