Core Insights - Equity Residential (EQR) reported fourth-quarter 2025 normalized funds from operations (FFO) per share of $1.03, missing the Zacks Consensus Estimate of $1.04, but showing a 3% improvement year-over-year [1][8] - The results were influenced by a rise in same-store net operating income (NOI) and physical occupancy, although higher expenses had a negative impact [1][8] Financial Performance - Rental income for the fourth quarter was $781.9 million, below the consensus mark of $789.3 million, but up 2% year-over-year [2] - For the full year 2025, normalized FFO per share was $3.99, missing the Zacks Consensus Estimate of $4, but higher than the previous year's $3.89, supported by a 3.8% growth in rental income to $3.09 billion [2] - Same-store revenues increased by 2.5% year-over-year, while same-store expenses rose by 2.9% [3] - The average rental rate increased by 2.2% year-over-year to $3,152, with same-store portfolio physical occupancy improving by 20 basis points to 96.2% [3] Expense Analysis - Property and maintenance expenses grew by 4.8%, general and administrative expenses increased by 8.5%, and other expenses rose by 37.6% [5] Portfolio Activity - In Q4 2025, EQR sold six properties comprising 1,138 apartment units for approximately $527.6 million, with a disposition yield of 5.6% [6] - Proceeds from the sales were primarily used for share repurchases [6] Balance Sheet Overview - EQR ended Q4 2025 with cash and cash equivalents of $55.9 million, down from $93.1 million at the end of Q3 2025 [7] - The net debt to normalized EBITDAre ratio was 4.27X, a decrease from 4.41X in the previous quarter [7] 2026 Guidance - For full-year 2026, EQR projects normalized FFO per share in the range of $4.02-$4.14, with the Zacks Consensus Estimate at $4.13 [10] - The guidance includes expectations for same-store revenue growth of 1.2-3.2%, expense increases of 3-4%, and NOI expansion of 0.5-2.5% [10] - Physical occupancy is anticipated to be at 96.4% [10] Share Repurchase Activity - During and after Q4 2025, EQR repurchased approximately 3.4 million common shares for a total cost of $205.7 million [9] First Quarter 2026 Projections - For Q1 2026, EQR projects normalized FFO per share in the range of 94-98 cents, with the Zacks Consensus Estimate at 99 cents [11]

Fourth Quarter 2025 Results Table of Contents | Earnings Release | 1 - 5 | | --- | --- | | Consolidated Statements of Operations | 6 | | Consolidated Statements of Funds From Operations and Normalized | | | Funds From Operations | 7 | | Consolidated Balance Sheets | 8 | | Portfolio Summary | 9 | | Portfolio Rollforward | 10 | | Same Store Results 11 - 18 | | | Debt Summary 19 - 21 | | | Capital Structure | 22 | | Common Share and Unit Weighted Average Amounts Outstanding | 23 | | Partially Owned Properties ...

Financial Performance - For the quarter ended December 2025, Equity Residential (EQR) reported revenue of $781.91 million, which is a 2% increase compared to the same period last year [1] - The earnings per share (EPS) for the quarter was $1.03, down from $1.10 in the year-ago quarter [1] - The reported revenue was a surprise of -0.94% compared to the Zacks Consensus Estimate of $789.34 million, and the EPS surprise was -0.74% against the consensus estimate of $1.04 [1] Key Metrics - The physical occupancy rate was 96.2%, slightly below the four-analyst average estimate of 96.3% [4] - Total apartment units stood at 78,921, which is lower than the three-analyst average estimate of 85,764 [4] - The change in same-store revenue growth was 2.5%, compared to the average estimate of 3.2% based on two analysts [4] - Rental income from same-store properties was $743.54 million, exceeding the average estimate of $734.51 million by two analysts, representing a 4.2% increase year-over-year [4] - Net earnings per share (diluted) was reported at $1.00, significantly higher than the average estimate of $0.41 based on six analysts [4] Stock Performance - Shares of Equity Residential have returned +1.8% over the past month, outperforming the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it may perform in line with the broader market in the near term [3]

Core Viewpoint - Equity Residential (EQR) reported quarterly funds from operations (FFO) of $1.03 per share, slightly missing the Zacks Consensus Estimate of $1.04 per share, but showing an increase from $1 per share a year ago [1] Financial Performance - The company posted revenues of $781.91 million for the quarter ended December 2025, which was below the Zacks Consensus Estimate by 0.94%, compared to $766.78 million in the same quarter last year [2] - Over the last four quarters, Equity Residential has surpassed consensus FFO estimates only once [2] Stock Performance and Outlook - Equity Residential shares have increased by approximately 0.1% since the beginning of the year, while the S&P 500 has gained 0.5% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][6] Estimate Revisions and Industry Context - The current consensus FFO estimate for the upcoming quarter is $0.99 on revenues of $789.64 million, and for the current fiscal year, it is $4.13 on revenues of $3.21 billion [7] - The Zacks Industry Rank indicates that the REIT and Equity Trust - Residential sector is currently in the bottom 36% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - For the full year of 2025, same store revenues increased by 2.6%, while same store expenses rose by 3.7%, resulting in a same store Net Operating Income (NOI) growth of 2.2%[10] - In Q4 2025, the company reported an Earnings Per Share (EPS) of $1.00, a decrease of 9.1% compared to Q4 2024, while the Funds from Operations (FFO) per share remained stable at $0.97[8] - The full year 2026 EPS guidance is set between $1.44 and $1.56, reflecting a significant decrease from the 2025 actual EPS of $2.94[12] - Total revenues for 2025 were $3.09 billion, an increase from $2.98 billion in 2024, with rental income contributing $3.09 billion[37] - Net income for 2025 was $1.15 billion, up from $1.07 billion in 2024, with net income attributable to common shares at $1.12 billion[37] - Funds from Operations (FFO) available to Common Shares and Units for 2025 was $1,538,580,000, up 4.7% from $1,469,710,000 in 2024[40] - Normalized FFO available to Common Shares and Units for 2025 was $1,558,403,000, compared to $1,521,606,000 in 2024, reflecting a growth of 2.4%[40] - Net income for the year ended December 31, 2025, was $1,151,949,000, an increase of 7.5% from $1,070,975,000 in 2024[40] - The actual EPS for Q4 2025 was $1.00, with a projected decrease to a midpoint of $0.31 for Q1 2026 primarily due to lower expected property sale gains[31] - The actual FFO for Q4 2025 was $0.97 per share, with a projected decrease to a midpoint of $0.95 for Q1 2026 due to lower expected other expenses[32] Shareholder Returns - The company returned approximately $1.38 billion to shareholders through share repurchases and dividend payments over the past year[10] - The annual common share dividend for 2025 was $2.77 per share, amounting to over $1.0 billion[29] - The company repurchased approximately 3.4 million common shares at an average price of $61.06 per share, totaling around $205.7 million in Q4 2025[10] - The Company repurchased approximately 4.8 million common shares in 2025, representing 1.3% of outstanding shares, at an average price of $62.03, totaling approximately $300.0 million[27] - The company plans to invest approximately $200 million in share repurchases in the first half of 2026[131] Property Transactions - The company sold 11 properties for approximately $1.1 billion in 2025, while acquiring nine properties for about $636.8 million, indicating a net asset sale[10] - The company disposed of 6 consolidated rental properties for a sales price of $527,611,000, with a yield of -5.6%[47] - The company disposed of 11 consolidated rental properties for a total sales price of $1,122,061, yielding a 5.4%[50] - The company acquired a 25% interest in two previously unconsolidated properties in the Dallas/Ft. Worth market for approximately $18.8 million in cash and contributed $101.6 million for the repayment of construction loans[44] Development and Occupancy - The company completed a development project in San Francisco and Denver, totaling 495 apartment units at a cost of approximately $237.8 million in 2025[26] - The physical occupancy rate for the full year 2025 was reported at 96.4%, an increase from 96.2% in 2024[19] - The company completed 2 consolidated developments in Q4 2025, adding 495 units[50] - The occupancy rate for completed projects was reported at 100% for several properties, indicating strong demand[111] - Total same store residential units increased to 81,780 in Q4 2025, with an average rental rate of $3,111 and occupancy rate of 96.1%[71] Revenue and Expense Trends - Total same store revenues for 2025 were $2,821,804, a 2.6% increase from $2,749,354 in 2024[57] - Same store NOI for 2025 was $1,916,917, reflecting a 2.2% increase from $1,876,555 in 2024[57] - Total operating expenses for 2025 were $1.02 billion, an increase from $961.83 million in 2024, with Q4 2025 operating expenses at $254.37 million compared to $245.03 million in Q4 2024[168] - Operating expenses for Q4 2025 totaled $234.69 million, reflecting a 2.9% increase from Q4 2024[83] - Total Same Store Operating Expenses increased by 3.7% year-over-year to $904,887,000 in YTD 2025 from $872,799,000 in YTD 2024[85] Debt and Capital Structure - The Company entered into a new $2.5 billion unsecured revolving credit agreement, maturing in December 2030, replacing the previous facility[28] - Total debt as of December 31, 2025, was $8,175,010,000, with a weighted average interest rate of 3.76%[90] - The company’s debt to adjusted total assets ratio was 27.4%, well below the 60% limit[98] - Secured debt accounted for 19.4% of total debt, while unsecured debt made up 80.6%[90] - The Company has a $2.5 billion unsecured revolving credit facility, with $1,909,127 available as of December 31, 2025, after accounting for outstanding commercial paper and other restricted amounts[140] Future Outlook - The company expects 2026 same store revenue growth to be between 1.2% and 3.2%, with same store expense growth projected between 3.0% and 4.0%[10] - The company anticipates continued growth in rental revenues and NOI, driven by market expansion and new developments[66] - The company is focusing on market expansion and new product development to enhance its portfolio and drive future growth[169] - The company plans to enhance NOI through sustainability initiatives and property-level technology investments, alongside renovation expenditures[137] - The company anticipates normalized FFO per share for Q1 2026 to be between $1.44 and $1.56, indicating a positive outlook for future performance[163]

Core Insights - The current reporting cycle for real estate investment trusts (REITs) is active, with several earnings releases scheduled for this week [1] U.S. Apartment Market in Q4 - The U.S. apartment sector experienced a shift in Q4 2025, with net move-outs returning for the first time in three years, resulting in a loss of approximately 40,400 net units [3] - Annual absorption was just over 365,900 units, the lowest since mid-2024, indicating a return to long-term averages [3] - Approximately 409,500 units were completed in 2025, with 89,400 in Q4, marking a fourth consecutive quarterly decline in completions [4] - Occupancy rates dipped to 94.8% at year-end, and effective asking rents fell by 1.7% in Q4, with annual rents down 0.6%, the largest annual decline since early 2021 [5] - Over 23% of units offered concessions averaging 7%, reflecting landlords' focus on occupancy over rent growth [5] - Market segmentation showed steep rent declines in supply-heavy Sun Belt metros, while coastal and tech-oriented markets saw modest rent gains [6] Earnings Outlook for Residential REITs - AvalonBay Communities is expected to report moderated Q4 results, with a Zacks Consensus Estimate of $768.33 million for revenues, indicating a 3.75% year-over-year increase [7][8] - Essex Property Trust is projected to benefit from its West Coast exposure, with a revenue estimate of $476.57 million, reflecting a 4.86% increase year-over-year [11][12] - Mid-America Apartment Communities anticipates a revenue of $557.79 million, suggesting a 1.45% rise from the previous year [15][16] - Equity Residential's revenue estimate stands at $789.34 million, indicating a 2.94% year-over-year increase, supported by portfolio diversification [17][18] - Camden Property Trust expects revenues of $394.65 million, implying a growth of 2.15% from the year-ago figure [20][21]

Core Viewpoint - Equity Residential (EQR) is expected to report growth in revenues and funds from operations (FFO) per share for the fourth quarter and full year of 2025, despite a softening apartment market [1][7]. Company Performance - In the last reported quarter, Equity Residential achieved an in-line performance for normalized FFO per share, with increases in same-store revenues and physical occupancy year-over-year [2]. - Over the past four quarters, Equity Residential surpassed the Zacks Consensus Estimate once and met expectations three times, with an average positive surprise of 0.54% [2]. Market Conditions - The US apartment market experienced a softening in fundamentals during Q4 2025, with net move-outs of approximately 40,400 units, marking the first seasonal pullback in three years [3]. - A total of about 409,500 units were delivered in 2025, contributing to elevated competition and a decline in occupancy to 94.8% [4]. - Effective asking rents decreased by 1.7% quarter-over-quarter and 0.6% year-over-year, with over 23% of units offering incentives averaging 7% [4]. Projections for Equity Residential - For Q4 2025, same-store revenues are projected to increase by 2.6% year-over-year, with same-store net operating income (NOI) expected to grow by 2.3% [7]. - The Zacks Consensus Estimate for quarterly revenues is $789.34 million, with normalized FFO per share anticipated in the range of $1.02-$1.06, indicating a 4% year-over-year growth [8][9]. - For the full year 2025, normalized FFO per share is expected to be between $3.98-$4.02, with same-store revenue growth projected at 2.5-3.0% [9][10]. Financial Position and Strategy - Equity Residential's strategic portfolio diversification across urban and suburban markets, along with a focus on higher-income renters, is expected to support its performance amid current market pressures [6]. - The company maintains a strong balance sheet and leverages technology and operational efficiency to drive growth [6].

Distribution Summary - The total distribution per share for common shares is $2.752500, with ordinary dividends amounting to $2.065372 and capital gain distributions of $0.000000 [2][4] - For preferred shares Series K, the total distribution per share is $4.145000, with ordinary dividends of $3.110252 and capital gain distributions of $0.000000 [3][4] Dividend Breakdown - The ordinary dividends for common shares include $0.675000 on January 2, 2025, and $0.692500 on March 31, 2025, among others [1][2] - Preferred shares Series K have dividends of $1.036250 on March 21, 2025, and similar amounts on subsequent dates [3][4] Tax Reporting - The distributions are reported in accordance with IRS regulations, including specific disclosures for capital gains and dividends [4][5] - The amounts reported in Box 2a for capital gains are relevant for holders of applicable partnership interests under Section 1061 of the Internal Revenue Code [4][5]

Core Viewpoint - Equity Residential (EQR) shares have underperformed over the past year, losing over 11% of their value despite reasonable company performance [1] Company Performance - EQR's performance has been reasonable, indicating that the company's fundamentals may not align with market sentiment [1] Market Sentiment - There is increasing pessimism regarding the trajectory of rental inflation, which has negatively impacted EQR's stock performance [1]

Core Viewpoint - Equity Residential (EQR) shares have underperformed over the past year, losing over 11% of their value despite reasonable company performance [1] Company Performance - EQR's performance has been reasonable, indicating that the company's fundamentals may not align with market sentiment [1] Market Sentiment - There is increasing pessimism regarding the trajectory of rental inflation, which has negatively impacted EQR's stock performance [1]