Equity Residential (NYSE: EQR) is one of the U.S.'s largest apartment landlords. The real estate investment trust (REIT) has investments in 311 properties with more than 80,000 units across most of the country's largest cities along the coasts. While apartment demand in high-cost coastal cities suffered during the early days of the pandemic as renters moved to cheaper suburban areas, they're starting to come back in droves. That's evident in the apartment REIT's first-quarter results.
Equity Residential's normalized funds from operations (FFO) soared 13.2% year over year in the first quarter. The residential REIT benefited from strong demand for apartments. Physical occupancy improved from 95% in the year-ago period to 96.4% in this year's first quarter. Meanwhile, comparable lease rates rose 4.2%. Those factors drove same-property revenue up by 7.8%, while same-property net operating income (NOI) jumped 10.7% as the company kept a lid on expenses despite rising inflation. The REIT also benefited from recent acquisitions of apartments across faster-growing cities in the Sun Belt region.
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Strong Apartment Demand Is a Boon for This REIT