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Equity Residential Reports Fourth Quarter 2023 Results

Provides 2024 Guidance

Equity Residential (NYSE: EQR) today reported results for the quarter and year ended December 31, 2023.

Fourth Quarter 2023 Results

All per share results are reported as available to common shares/units on a diluted basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31,

 

 

 

 

 

2023

 

 

2022

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

0.82

 

 

$

0.42

 

 

$

0.40

 

 

 

95.2

%

 

 

Funds from Operations (FFO) per share

 

$

1.00

 

 

$

0.97

 

 

$

0.03

 

 

 

3.1

%

 

 

Normalized FFO (NFFO) per share

 

$

1.00

 

 

$

0.94

 

 

$

0.06

 

 

 

6.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2023

 

 

2022

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

2.20

 

 

$

2.05

 

 

$

0.15

 

 

 

7.3

%

 

 

Funds from Operations (FFO) per share

 

$

3.75

 

 

$

3.53

 

 

$

0.22

 

 

 

6.2

%

 

 

Normalized FFO (NFFO) per share

 

$

3.78

 

 

$

3.52

 

 

$

0.26

 

 

 

7.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recent Highlights

  • Same store revenue increased 3.9% for the fourth quarter of 2023 compared to the fourth quarter of 2022, driven by strong demand.
  • The Company has provided guidance for the full year 2024 with same store revenue growth expected to be between 2.0% and 3.0%.
  • During the fourth quarter of 2023, the Company sold three properties located in our West Coast markets (San Francisco, Seattle and Los Angeles), consisting of 499 apartment units, for an aggregate sale price of approximately $184.5 million.
  • During the fourth quarter of 2023, the Company repurchased and retired 864,386 of its common shares, at a weighted average purchase price of $56.79 per share, for an aggregate purchased amount of approximately $49.1 million. Following this repurchase activity, the Company’s Board of Trustees approved replenishing the Company’s share repurchase program authorization back to its original 13.0 million shares.

“We are pleased with our fourth quarter results as we finished the year in line with our expectations. I want to thank my colleagues across Equity Residential for their hard work and dedication to our customers and shareholders,” said Mark J. Parrell, Equity Residential’s President and CEO. “We enter 2024 well-positioned to post solid results on the operations side despite expectations of a slowing economy with continuing high employment levels in our target affluent renter demographic and a manageable apartment supply backdrop in our existing predominantly coastal footprint versus oversupplied Sunbelt markets. We are optimistic that in 2024 we will see a variety of favorable opportunities to deploy capital and have a team and a balance sheet well-prepared to do so.”

Full Year 2024 Guidance

The Company has provided guidance for its full year 2024 same store operating performance, EPS, FFO per share, Normalized FFO per share and transactions as listed below:

Same Store (includes Residential and Non-Residential):

 

Physical Occupancy

 

95.9%

Revenue change

 

2.0% to 3.0%

Expense change

 

3.5% to 4.5%

Net Operating Income (NOI) change

 

1.0% to 2.6%

 

 

 

EPS

 

$2.91 to $3.01

FFO per share

 

$3.74 to $3.84

Normalized FFO per share

 

$3.80 to $3.90

 

 

 

Transactions:

 

 

Consolidated rental acquisitions

 

$1.0B

Consolidated rental dispositions

 

$1.0B

Transaction Accretion (Dilution)

 

(25 basis points)

The difference between the Company's full year 2023 actual EPS of $2.20 and the full year 2024 EPS guidance midpoint of $2.96 is due primarily to higher expected property sale gains and the items described below.

The difference between the Company's full year 2023 actual FFO of $3.75 per share and the full year 2024 FFO guidance midpoint of $3.79 per share is due primarily to lower expected non-operating gains on sale offset by the items described below.

The difference between the Company's full year 2023 actual Normalized FFO of $3.78 per share and the full year 2024 Normalized FFO guidance midpoint of $3.85 per share is due primarily to:

 

 

Expected

Positive/(Negative)

Impact

 

 

Full Year 2024 vs.

Full Year 2023

Residential same store NOI

 

$

0.09

 

Lease-Up NOI

 

 

0.01

 

2024 and 2023 transaction activity impact on NOI, net

 

 

(0.03

)

Corporate overhead (1)

 

 

(0.01

)

Other items

 

 

0.01

 

Net

 

$

0.07

 

(1)

Corporate overhead includes property management and general and administrative expenses.

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 29 through 34 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 31 and 32 of this release.

Results Per Share

The change in EPS for the quarter ended December 31, 2023 compared to the same period of 2022 is due primarily to higher property sale gains in the current period, the various adjustment items listed on page 27 of this release and the items described below. The change in EPS for the year end December 31, 2023 compared to the same period of 2022 is due primarily to lower property sale gains in the current period, the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in FFO for the quarter and year ended December 31, 2023 compared to the same periods of 2022 are due primarily to the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in Normalized FFO are due primarily to:

 

 

Positive/(Negative) Impact

 

 

Fourth Quarter 2023 vs.

Fourth Quarter 2022

 

Full Year 2023 vs.

Full Year 2022

Residential same store NOI

 

$

0.06

 

 

$

0.28

 

Lease-Up NOI

 

 

 

 

0.03

 

2023 and 2022 transaction activity impact on NOI, net

 

 

 

(0.02

)

Interest expense, net

 

 

(0.01

)

 

 

0.02

 

Corporate overhead

 

 

 

 

(0.03

)

Other items

 

 

0.01

 

 

 

(0.02

)

Net

 

$

0.06

 

 

$

0.26

 

Same Store Results

The following table shows the total same store results for the periods presented.

 

 

Fourth Quarter 2023 vs.

Fourth Quarter 2022

 

Fourth Quarter 2023 vs.

Third Quarter 2023

 

Full Year 2023 vs.

Full Year 2022

Apartment Units

 

77,676

 

78,163

 

76,297

Physical Occupancy

 

95.8% vs. 95.8%

 

95.8% vs. 96.0%

 

95.9% vs. 96.3%

 

 

 

 

 

 

 

Revenues

 

3.9%

 

0.6%

 

5.6%

Expenses

 

1.3%

 

(3.6%)

 

4.3%

NOI

 

5.0%

 

2.5%

 

6.2%

On page 11 of this release, the Company has provided a breakout of Residential and Non-Residential same store results with definitions that can be found on page 33 of this release. Non-Residential operations account for approximately 3.6% of total revenues for the year ended December 31, 2023.

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis.

 

 

Fourth Quarter 2023 vs.

Fourth Quarter 2022

 

Fourth Quarter 2023 vs.

Third Quarter 2023

 

Full Year 2023 vs.

Full Year 2022

 

 

% Change

 

% Change

 

% Change

Same Store Residential Revenues-

 

 

 

 

 

 

 

 

comparable period

Lease rates

 

 

3.5

%

 

 

0.3

%

 

 

6.2

%

Leasing Concessions

 

 

(0.4

%)

 

 

(0.1

%)

 

 

(0.2

%)

Vacancy gain (loss)

 

 

0.0

%

 

 

0.1

%

 

 

(0.5

%)

Bad Debt, Net (1)

 

 

0.4

%

 

 

(0.1

%)

 

 

(0.4

%)

Other (2)

 

 

0.5

%

 

 

0.1

%

 

 

0.6

%

Same Store Residential Revenues-

current period

 

4.0

%

 

 

0.3

%

 

 

5.7

%

(1)

Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts. The comparable full year 2023 period change in Bad Debt, Net was negatively impacted by the much higher governmental rental assistance received in 2022 versus 2023. See page 13 for more detail.

(2)

Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties (for 76,297 same store apartment units):

 

 

January 2024 (1)

 

Q4 2023

 

Q3 2023

Physical Occupancy

 

96.2%

 

95.8%

 

96.0%

Percentage of Residents Renewing by quarter/month

61.0%

 

59.0%

 

54.0%

 

 

 

 

 

 

 

New Lease Change

 

(3.7%)

 

(4.5%)

 

0.5%

Renewal Rate Achieved

 

4.9%

 

5.1%

 

5.5%

Blended Rate

 

1.0%

 

0.8%

 

3.1%

(1)

January 2024 results are preliminary as of January 25th and reflect the 2024 annual same store set including 77,472 apartment units.

Investment Activity

The Company did not acquire any operating properties during the fourth quarter of 2023. During the full year of 2023, the Company has acquired four operating properties, consisting of 1,183 apartment units, for an aggregate purchase price of approximately $366.3 million at a weighted average Acquisition Cap Rate of 5.5%. The average age of the properties acquired in 2023 was approximately 1 year.

During the fourth quarter of 2023, the Company sold three properties located in our West Coast markets (San Francisco, Seattle and Los Angeles), consisting of 499 apartment units, for an aggregate sale price of approximately $184.5 million at a weighted average Disposition Yield of 5.8%, generating an Unlevered IRR of 14.4%. The average age of the properties sold in the fourth quarter of 2023 was approximately 40 years. During the full year of 2023, the Company sold 11 properties, consisting of 912 apartment units, for an aggregate sale price of approximately $379.9 million at a weighted average Disposition Yield of 5.5%, generating an Unlevered IRR of 11.4%. The average age of the properties sold in 2023 was approximately 30 years.

Subsequent to the end of the fourth quarter of 2023, the Company sold a property in each of the Boston and Orange County markets, consisting of a total of 404 apartment units, for an aggregate sale price of approximately $189.0 million at a weighted average Disposition Yield of 5.6%. The average age of the properties sold subsequent to the end of the fourth quarter of 2023 was approximately 41 years.

In 2023, the Company invested $282.8 million in Capital Expenditures to Real Estate for Same Store Properties. Approximately 40% of this spend was NOI-Enhancing. Of that amount, $79.3 million for 2,799 same store apartment units represented Renovation Expenditures with the remainder concentrated in sustainability and property-level technology spend. We expect a similar percentage of 2024 Capital Expenditures to Real Estate for Same Store Properties to be NOI-Enhancing.

Capital Markets Activity

During the fourth quarter of 2023, the Company repurchased and retired 864,386 of its common shares, at a weighted average purchase price of $56.79 per share, for an aggregate purchased amount of approximately $49.1 million. Following this repurchase activity, the Company’s Board of Trustees approved replenishing the Company’s share repurchase program authorization back to its original 13.0 million shares.

First Quarter 2024 Guidance

The Company has established guidance ranges for the first quarter of 2024 EPS, FFO per share and Normalized FFO per share as listed below:

 

 

Q1 2024

Guidance

EPS

 

$0.77 to $0.81

FFO per share

 

$0.87 to $0.91

Normalized FFO per share

 

$0.88 to $0.92

The difference between the fourth quarter of 2023 actual EPS of $0.82 and the first quarter of 2024 EPS guidance midpoint of $0.79 is due primarily to higher expected property sale gains and the items described below.

The difference between the fourth quarter of 2023 actual FFO of $1.00 per share and the first quarter of 2024 FFO guidance midpoint of $0.89 per share is due primarily to the items described below.

The difference between the fourth quarter of 2023 actual Normalized FFO of $1.00 per share and the first quarter of 2024 Normalized FFO guidance midpoint of $0.90 per share is due primarily to:

 

 

Expected

Positive/(Negative)

Impact

 

 

First Quarter 2024 vs.

Fourth Quarter 2023

Residential same store NOI (1)

 

$

(0.05

)

2024 and 2023 transaction activity impact on NOI, net

 

 

(0.01

)

Corporate overhead

 

 

(0.03

)

Other items

 

 

(0.01

)

Net

 

$

(0.10

)

  1. Residential same store NOI impact is primarily driven by higher expected real estate taxes and utilities in the first quarter of 2024 versus the fourth quarter of 2023. This pattern of higher operating expenses is typical between the fourth quarter of the current year and the first quarter of the following year.

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 302 properties consisting of 80,191 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, government regulations and competition. These and other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Wednesday, January 31, 2024 at 10:00 a.m. CT. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Year Ended December 31,

 

 

Quarter Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,873,964

 

 

$

2,735,180

 

 

$

727,500

 

 

$

699,703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

514,575

 

 

 

483,865

 

 

 

123,138

 

 

 

118,588

 

Real estate taxes and insurance

 

 

412,114

 

 

 

388,412

 

 

 

99,507

 

 

 

85,513

 

Property management

 

 

119,804

 

 

 

110,304

 

 

 

29,490

 

 

 

27,269

 

General and administrative

 

 

60,716

 

 

 

58,710

 

 

 

11,581

 

 

 

11,677

 

Depreciation

 

 

888,709

 

 

 

882,168

 

 

 

226,788

 

 

 

214,272

 

Total expenses

 

 

1,995,918

 

 

 

1,923,459

 

 

 

490,504

 

 

 

457,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

282,539

 

 

 

304,325

 

 

 

155,505

 

 

 

(21

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,160,585

 

 

 

1,116,046

 

 

 

392,501

 

 

 

242,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

22,345

 

 

 

2,193

 

 

 

11,049

 

 

 

(2,651

)

Other expenses

 

 

(29,419

)

 

 

(13,664

)

 

 

(8,902

)

 

 

(4,473

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(269,556

)

 

 

(282,920

)

 

 

(68,674

)

 

 

(65,827

)

Amortization of deferred financing costs

 

 

(8,941

)

 

 

(8,729

)

 

 

(1,918

)

 

 

(2,308

)

Income before income and other taxes, income (loss) from

investments in unconsolidated entities and net gain (loss)

on sales of land parcels

 

 

875,014

 

 

 

812,926

 

 

 

324,056

 

 

 

167,104

 

Income and other tax (expense) benefit

 

 

(1,148

)

 

 

(900

)

 

 

(256

)

 

 

(175

)

Income (loss) from investments in unconsolidated entities

 

 

(5,378

)

 

 

(5,031

)

 

 

(1,531

)

 

 

(1,575

)

Net income

 

 

868,488

 

 

 

806,995

 

 

 

322,269

 

 

 

165,354

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(26,710

)

 

 

(26,310

)

 

 

(9,536

)

 

 

(5,286

)

Partially Owned Properties

 

 

(6,340

)

 

 

(3,774

)

 

 

(1,041

)

 

 

(1,048

)

Net income attributable to controlling interests

 

 

835,438

 

 

 

776,911

 

 

 

311,692

 

 

 

159,020

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares

 

$

832,348

 

 

$

773,821

 

 

$

310,920

 

 

$

158,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

2.20

 

 

$

2.06

 

 

$

0.82

 

 

$

0.42

 

Weighted average Common Shares outstanding

 

 

378,773

 

 

 

376,209

 

 

 

379,247

 

 

 

377,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

2.20

 

 

$

2.05

 

 

$

0.82

 

 

$

0.42

 

Weighted average Common Shares outstanding

 

 

390,897

 

 

 

389,450

 

 

 

390,787

 

 

 

390,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

2.65

 

 

$

2.50

 

 

$

0.6625

 

 

$

0.625

 

Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share and Unit data)

(Unaudited)

 

 

 

Year Ended December 31,

 

 

Quarter Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income

 

$

868,488

 

 

$

806,995

 

 

$

322,269

 

 

$

165,354

 

Net (income) loss attributable to Noncontrolling Interests – Partially

Owned Properties

 

(6,340

)

 

 

(3,774

)

 

 

(1,041

)

 

 

(1,048

)

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares and Units

 

 

859,058

 

 

 

800,131

 

 

 

320,456

 

 

 

163,534

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

888,709

 

 

 

882,168

 

 

 

226,788

 

 

 

214,272

 

Depreciation – Non-real estate additions

 

 

(4,268

)

 

 

(4,306

)

 

 

(977

)

 

 

(1,117

)

Depreciation – Partially Owned Properties

 

 

(2,130

)

 

 

(2,640

)

 

 

(531

)

 

 

(543

)

Depreciation – Unconsolidated Properties

 

 

2,860

 

 

 

2,898

 

 

 

939

 

 

 

1,001

 

Net (gain) loss on sales of unconsolidated entities - operating

assets

 

 

 

 

 

(9

)

 

 

 

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(282,539

)

 

 

(304,325

)

 

 

(155,505

)

 

 

21

 

Noncontrolling Interests share of gain (loss) on sales

of real estate properties

 

 

2,336

 

 

 

 

 

 

 

 

 

 

FFO available to Common Shares and Units

 

 

1,464,026

 

 

 

1,373,917

 

 

 

391,170

 

 

 

377,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see note for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

3,647

 

 

 

4,780

 

 

 

908

 

 

 

1,484

 

Debt extinguishment and preferred share redemption (gains)

losses

 

 

1,143

 

 

 

4,664

 

 

 

 

 

 

348

 

Non-operating asset (gains) losses

 

 

(13,323

)

 

 

2,368

 

 

 

(8,588

)

 

 

3,542

 

Other miscellaneous items

 

 

21,588

 

 

 

(13,901

)

 

 

6,757

 

 

 

(15,733

)

Normalized FFO available to Common Shares and Units

 

$

1,477,081

 

 

$

1,371,828

 

 

$

390,247

 

 

$

366,809

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

1,467,116

 

 

$

1,377,007

 

 

$

391,942

 

 

$

377,940

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

FFO available to Common Shares and Units

 

$

1,464,026

 

 

$

1,373,917

 

 

$

391,170

 

 

$

377,168

 

FFO per share and Unit – basic

 

$

3.75

 

 

$

3.54

 

 

$

1.00

 

 

$

0.97

 

FFO per share and Unit – diluted

 

$

3.75

 

 

$

3.53

 

 

$

1.00

 

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

1,480,171

 

 

$

1,374,918

 

 

$

391,019

 

 

$

367,581

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Normalized FFO available to Common Shares and Units

 

$

1,477,081

 

 

$

1,371,828

 

 

$

390,247

 

 

$

366,809

 

Normalized FFO per share and Unit – basic

 

$

3.79

 

 

$

3.54

 

 

$

1.00

 

 

$

0.94

 

Normalized FFO per share and Unit – diluted

 

$

3.78

 

 

$

3.52

 

 

$

1.00

 

 

$

0.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding – basic

 

 

389,954

 

 

 

388,045

 

 

 

389,844

 

 

 

389,357

 

Weighted average Common Shares and Units outstanding – diluted

 

390,897

 

 

 

389,450

 

 

 

390,787

 

 

 

390,245

 

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Land

 

$

5,581,876

 

 

$

5,580,878

 

Depreciable property

 

 

22,938,426

 

 

 

22,334,369

 

Projects under development

 

 

78,036

 

 

 

112,940

 

Land held for development

 

 

114,300

 

 

 

60,567

 

Investment in real estate

 

 

28,712,638

 

 

 

28,088,754

 

Accumulated depreciation

 

 

(9,810,337

)

 

 

(9,027,850

)

Investment in real estate, net

 

 

18,902,301

 

 

 

19,060,904

 

Investments in unconsolidated entities1

 

 

282,049

 

 

 

279,024

 

Cash and cash equivalents

 

 

50,743

 

 

 

53,869

 

Restricted deposits

 

 

89,252

 

 

 

83,303

 

Right-of-use assets

 

 

457,266

 

 

 

462,956

 

Other assets

 

 

252,953

 

 

 

278,206

 

Total assets

 

$

20,034,564

 

 

$

20,218,262

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgage notes payable, net

 

$

1,632,902

 

 

$

1,953,438

 

Notes, net

 

 

5,348,417

 

 

 

5,342,329

 

Line of credit and commercial paper

 

 

409,131

 

 

 

129,955

 

Accounts payable and accrued expenses

 

 

104,430

 

 

 

96,028

 

Accrued interest payable

 

 

65,716

 

 

 

66,310

 

Lease liabilities

 

 

311,640

 

 

 

308,748

 

Other liabilities

 

 

255,543

 

 

 

306,941

 

Security deposits

 

 

69,178

 

 

 

68,940

 

Distributions payable

 

 

259,231

 

 

 

244,621

 

Total liabilities

 

 

8,456,188

 

 

 

8,517,310

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

289,248

 

 

 

318,273

 

Equity:

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred Shares of beneficial interest, $0.01 par value;

100,000,000 shares authorized; 745,600 shares issued and

outstanding as of December 31, 2023 and December 31, 2022

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

1,000,000,000 shares authorized; 379,291,417 shares issued

and outstanding as of December 31, 2023 and 378,429,708

shares issued and outstanding as of December 31, 2022

 

 

3,793

 

 

 

3,784

 

Paid in capital

 

 

9,601,866

 

 

 

9,476,085

 

Retained earnings

 

 

1,437,185

 

 

 

1,658,837

 

Accumulated other comprehensive income (loss)

 

 

5,704

 

 

 

(2,547

)

Total shareholders’ equity

 

 

11,085,828

 

 

 

11,173,439

 

Noncontrolling Interests:

 

 

 

 

 

 

Operating Partnership

 

 

202,306

 

 

 

209,961

 

Partially Owned Properties

 

 

994

 

 

 

(721

)

Total Noncontrolling Interests

 

 

203,300

 

 

 

209,240

 

Total equity

 

 

11,289,128

 

 

 

11,382,679

 

Total liabilities and equity

 

$

20,034,564

 

 

$

20,218,262

 

1 Includes $220.2 million and $218.0 million in unconsolidated development projects as of December 31, 2023 and December 31, 2022, respectively. See Development and Lease-Up Projects for additional detail on unconsolidated projects.

Equity Residential

Portfolio Summary

As of December 31, 2023

 

 

 

 

 

 

 

 

% of

 

 

 

 

Stabilized

Average

 

 

 

 

 

Apartment

 

 

Budgeted

 

 

Rental

 

Markets/Metro Areas

 

Properties

 

 

Units

 

 

NOI

 

 

Rate

 

Established Markets:

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

58

 

 

 

14,732

 

 

 

17.1

%

 

$

2,929

 

Orange County

 

 

13

 

 

 

4,028

 

 

 

5.4

%

 

 

2,873

 

San Diego

 

 

12

 

 

 

2,878

 

 

 

4.0

%

 

 

3,108

 

Subtotal – Southern California

 

 

83

 

 

 

21,638

 

 

 

26.5

%

 

 

2,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

48

 

 

 

15,028

 

 

 

16.3

%

 

 

3,303

 

San Francisco

 

 

43

 

 

 

11,667

 

 

 

15.4

%

 

 

2,657

 

New York

 

 

34

 

 

 

8,536

 

 

 

14.1

%

 

 

4,566

 

Boston

 

 

27

 

 

 

7,170

 

 

 

11.8

%

 

 

3,574

 

Seattle

 

 

44

 

 

 

9,267

 

 

 

10.4

%

 

 

2,561

 

Subtotal – Established Markets

 

 

279

 

 

 

73,306

 

 

 

94.5

%

 

 

3,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expansion Markets:

 

 

 

 

 

 

 

 

 

 

 

 

Denver

 

 

9

 

 

 

2,792

 

 

 

2.8

%

 

 

2,411

 

Atlanta

 

 

7

 

 

 

2,111

 

 

 

1.6

%

 

 

2,169

 

Dallas/Ft. Worth

 

 

4

 

 

 

1,241

 

 

 

0.7

%

 

 

1,935

 

Austin

 

 

3

 

 

 

741

 

 

 

0.4

%

 

 

1,819

 

Subtotal – Expansion Markets

 

 

23

 

 

 

6,885

 

 

 

5.5

%

 

 

2,188

 

Total

 

 

302

 

 

 

80,191

 

 

 

100.0

%

 

$

3,063

 

 

 

 

Properties

 

Apartment Units

Wholly Owned Properties

 

288

 

77,131

Partially Owned Properties – Consolidated

 

14

 

3,060

 

 

302

 

80,191

 

Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

Equity Residential

Portfolio Rollforward Q4 2023

($ in thousands)

 

 

 

 

 

 

Apartment

 

 

 

 

 

Disposition

 

Properties

 

 

Units

 

 

Sales Price

 

 

Yield

9/30/2023

 

 

305

 

 

 

80,683

 

 

 

 

 

 

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

(3

)

 

 

(499

)

 

$

(184,493

)

 

 

(5.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Configuration Changes

 

 

 

 

 

7

 

 

 

 

 

 

 

12/31/2023

 

 

302

 

 

 

80,191

 

 

 

 

 

 

 

 

Portfolio Rollforward 2023

($ in thousands)

 

 

 

 

Apartment

 

 

Purchase

 

 

Acquisition

 

 

Properties

 

 

Units

 

 

Price

 

 

Cap Rate

 

12/31/2022

 

 

308

 

 

 

79,597

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

2

 

 

 

577

 

 

$

189,734

 

 

 

5.1

%

Consolidated Rental Properties – Not Stabilized (1)

 

 

2

 

 

 

606

 

 

$

176,600

 

 

 

5.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Disposition

 

 

 

 

 

 

 

 

Sales Price

 

 

Yield

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

(11

)

 

 

(912

)

 

$

(379,893

)

 

 

(5.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Consolidated

 

 

1

 

 

 

312

 

 

 

 

 

 

 

Configuration Changes

 

 

 

 

 

11

 

 

 

 

 

 

 

12/31/2023

 

 

302

 

 

 

80,191

 

 

 

 

 

 

 

(1)

The Company acquired two properties in the Atlanta market during the year ended December 31, 2023 that are in lease-up and are expected to stabilize in their second year of ownership at the weighted average Acquisition Cap Rate listed above.

Equity Residential

Fourth Quarter 2023 vs. Fourth Quarter 2022

Same Store Results/Statistics Including 77,676 Same Store Apartment Units

($ in thousands except for Average Rental Rate)

 

Fourth Quarter 2023

 

Fourth Quarter 2022

 

 

 

Residential

 

 

%

Change

 

Non-

Residential

 

 

%

Change

 

Total

 

 

%

Change

 

 

 

Residential

 

 

Non-

Residential

 

 

Total

 

Revenues

 

$

685,836

 

(1)

4.0%

 

$

25,920

 

 

(0.6%)

 

$

711,756

 

 

3.9%

 

Revenues

 

$

659,233

 

 

$

26,084

 

 

$

685,317

 

Expenses

 

$

209,164

 

 

1.1%

 

$

7,245

 

 

7.7%

 

$

216,409

 

 

1.3%

 

Expenses

 

$

206,885

 

 

$

6,728

 

 

$

213,613

 

NOI

 

$

476,672

 

 

5.4%

 

$

18,675

 

 

(3.5%)

 

$

495,347

 

 

5.0%

 

NOI

 

$

452,348

 

 

$

19,356

 

 

$

471,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

 

$

3,073

 

 

4.0%

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,954

 

 

 

 

 

 

 

Physical Occupancy

 

95.8

%

 

0.0%

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

95.8

%

 

 

 

 

 

 

Turnover

 

9.4

%

 

(0.1%)

 

 

 

 

 

 

 

 

 

 

 

Turnover

 

9.5

%

 

 

 

 

 

 

Fourth Quarter 2023 vs. Third Quarter 2023

Same Store Results/Statistics Including 78,163 Same Store Apartment Units

($ in thousands except for Average Rental Rate)

 

Fourth Quarter 2023

 

Third Quarter 2023

 

 

 

Residential

 

 

%

Change

 

Non-

Residential

 

 

%

Change

 

Total

 

 

%

Change

 

 

 

Residential

 

 

Non-

Residential

 

 

Total

 

Revenues

 

$

689,458

 

(1)

0.3%

 

$

25,920

 

 

8.1%

 

$

715,378

 

 

0.6%

 

Revenues

 

$

687,259

 

 

$

23,971

 

(2)

$

711,230

 

Expenses

 

$

210,167

 

 

(3.9%)

 

$

7,268

 

 

5.2%

 

$

217,435

 

 

(3.6%)

 

Expenses

 

$

218,723

 

 

$

6,906

 

 

$

225,629

 

NOI

 

$

479,291

 

 

2.3%

 

$

18,652

 

 

9.3%

 

$

497,943

 

 

2.5%

 

NOI

 

$

468,536

 

 

$

17,065

 

 

$

485,601

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

 

$

3,071

 

 

0.5%

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

3,056

 

 

 

 

 

 

 

Physical Occupancy

 

95.8

%

 

(0.2%)

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.0

%

 

 

 

 

 

 

Turnover

 

9.4

%

 

(4.4%)

 

 

 

 

 

 

 

 

 

 

 

Turnover

 

13.8

%

 

 

 

 

 

 

2023 vs. 2022

 

Same Store Results/Statistics Including 76,297 Same Store Apartment Units

($ in thousands except for Average Rental Rate)

 

2023

 

2022

 

 

 

Residential

 

 

%

Change

 

Non-

Residential

 

 

%

Change

 

Total

 

 

%

Change

 

 

 

Residential

 

 

Non-

Residential

 

 

Total

 

Revenues

 

$

2,657,868

 

(1)

5.7%

 

$

96,843

 

(2)

1.9%

 

$

2,754,711

 

 

5.6%

 

Revenues

 

$

2,514,711

 

 

$

95,055

 

 

$

2,609,766

 

Expenses

 

$

846,546

 

 

4.1%

 

$

26,902

 

 

8.9%

 

$

873,448

 

 

4.3%

 

Expenses

 

$

812,894

 

 

$

24,708

 

 

$

837,602

 

NOI

 

$

1,811,322

 

 

6.4%

 

$

69,941

 

 

(0.6%)

 

$

1,881,263

 

 

6.2%

 

NOI

 

$

1,701,817

 

 

$

70,347

 

 

$

1,772,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

 

$

3,029

 

 

6.2%

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,853

 

 

 

 

 

 

 

Physical Occupancy

 

95.9

%

 

(0.4%)

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.3

%

 

 

 

 

 

 

Turnover

 

43.7

%

 

0.1%

 

 

 

 

 

 

 

 

 

 

 

Turnover

 

43.6

%

 

 

 

 

 

 

(1)

 

See page 12 for Same Store Residential Revenues with Leasing Concessions reflected on a cash basis.  See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

 

(2)

 

Includes the negative impact from the non-cash write-off of approximately $1.5 million in straight-line receivables during the third quarter of 2023 due to the bankruptcy of Rite Aid. 

Equity Residential

Same Store Residential Revenues – GAAP to Cash Basis (1)

($ in thousands)

 

 

 

Fourth Quarter 2023 vs. Fourth Quarter 2022

 

 

Fourth Quarter 2023 vs. Third Quarter 2023

 

 

2023 vs. 2022

 

 

 

77,676 Same Store Apartment Units

 

 

78,163 Same Store Apartment Units

 

 

76,297 Same Store Apartment Units

 

 

 

Q4 2023

 

 

Q4 2022

 

 

Q4 2023

 

 

Q3 2023

 

 

2023

 

 

2022

 

Same Store Residential Revenues (GAAP Basis)

 

$

685,836

 

 

$

659,233

 

 

$

689,458

 

 

$

687,259

 

 

$

2,657,868

 

 

$

2,514,711

 

Leasing Concessions amortized

 

 

4,531

 

 

 

2,153

 

 

 

4,822

 

 

 

4,100

 

 

 

12,803

 

 

 

8,711

 

Leasing Concessions granted (2)

 

 

(5,074

)

 

 

(2,915

)

 

 

(5,399

)

 

 

(5,427

)

 

 

(17,750

)

 

 

(6,285

)

Same Store Residential Revenues with Leasing

 

Concessions on a cash basis

 

$

685,293

 

 

$

658,471

 

 

$

688,881

 

 

$

685,932

 

 

$

2,652,921

 

 

$

2,517,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change - GAAP revenue

 

 

4.0

%

 

 

 

 

 

0.3

%

 

 

 

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change - cash revenue

 

 

4.1

%

 

 

 

 

 

0.4

%

 

 

 

 

 

5.4

%

 

 

 

(1)

 

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

 

(2)

 

Concession usage is primarily concentrated in San Francisco and Seattle.

Same Store Net Operating Income By Quarter

Including 76,297 Same Store Apartment Units

($ in thousands)

 

 

 

Q4 2023

 

Q3 2023

 

Q2 2023

 

Q1 2023

 

Q4 2022

Same store revenues

 

$

696,250

 

 

$

693,230

 

 

$

688,481

 

 

$

676,750

 

 

$

671,116

 

Same store expenses

 

 

212,250

 

 

 

219,850

 

 

 

215,983

 

 

 

225,365

 

 

 

209,407

 

Same store NOI

 

(includes Residential and Non-Residential)

 

$

484,000

 

 

$

473,380

 

 

$

472,498

 

 

$

451,385

 

 

$

461,709

 

Equity Residential

Same Store Resident/Tenant Accounts Receivable Balances

Including 76,297 Same Store Apartment Units

($ in thousands)

 

 

 

Residential

 

 

Non-Residential

 

 

Balance Sheet (Other assets):

 

December 31, 2023

 

 

September 30, 2023

 

 

December 31, 2023

 

 

September 30, 2023

 

 

Resident/tenant accounts receivable balances

 

$

20,910

 

 

$

24,674

 

 

$

2,822

 

 

$

2,714

 

 

Allowance for doubtful accounts

 

 

(15,419

)

 

 

(19,462

)

 

 

(1,849

)

 

 

(1,703

)

 

Net receivable balances

 

$

5,491

 

 

$

5,212

 

 

$

973

 

 

$

1,011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line receivable balances

 

$

7,944

 

(1)

$

7,423

 

 

$

11,810

 

 

$

11,800

 

(2)

(1)

 

Total same store Residential Leasing Concessions granted in the fourth quarter of 2023 were approximately $5.0 million.  The straight-line receivable balance of $7.9 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in 2024. 

 

(2)

 

During the third quarter of 2023, the Company recorded a non-cash write-off of approximately $1.5 million in straight-line receivables due to the bankruptcy of Rite Aid. 

Same Store Residential Bad Debt

Including 76,297 Same Store Apartment Units

($ in thousands)

 

Income Statement (Rental income):

 

Q4 2023

 

Q3 2023

 

Q4 2022

 

2023

 

2022

Bad debts before governmental rental assistance

 

$

9,341

 

 

$

8,940

 

 

$

13,574

 

 

$

39,591

 

 

$

58,785

 

Governmental rental assistance received

 

(368

)

 

 

(406

)

 

 

(2,275

)

 

 

(2,587

)

 

 

(32,699

)

Bad Debt, Net

 

$

8,973

 

 

$

8,534

 

 

$

11,299

 

 

$

37,004

 

 

$

26,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bad Debt, Net as a % of Same Store Residential Revenues

 

1.3

%

 

 

1.3

%

 

 

1.7

%

 

 

1.4

%

 

 

1.0

%

Equity Residential

Fourth Quarter 2023 vs. Fourth Quarter 2022

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year's Quarter

Markets/Metro Areas

 

Apartment

Units

 

Q4 2023

% of

Actual

NOI

 

Q4 2023

Average

Rental

Rate

 

Q4 2023

Weighted

Average

Physical

Occupancy %

 

Q4 2023

Turnover

 

Revenues

 

Expenses

 

NOI

 

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Los Angeles

 

 

14,135

 

 

 

17.3

%

 

$

2,909

 

 

 

95.1

%

 

 

10.9

%

 

 

5.2

%

 

 

6.9

%

 

 

4.5

%

 

 

6.0

%

 

 

(0.7

%)

 

 

0.8

%

Orange County

 

 

4,028

 

 

 

5.5

%

 

 

2,873

 

 

 

96.3

%

 

 

8.7

%

 

 

6.5

%

 

 

4.5

%

 

 

7.0

%

 

 

7.0

%

 

 

(0.4

%)

 

 

0.0

%

San Diego

 

 

2,878

 

 

 

4.2

%

 

 

3,108

 

 

 

95.3

%

 

 

11.3

%

 

 

6.6

%

 

 

2.8

%

 

 

7.8

%

 

 

7.4

%

 

 

(0.7

%)

 

 

2.5

%

Subtotal – Southern California

 

 

21,041

 

 

 

27.0

%

 

 

2,929

 

 

 

95.3

%

 

 

10.6

%

 

 

5.6

%

 

 

6.1

%

 

 

5.5

%

 

 

6.4

%

 

 

(0.7

%)

 

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

14,716

 

 

 

16.6

%

 

 

2,654

 

 

 

97.0

%

 

 

8.2

%

 

 

5.3

%

 

 

(0.2

%)

 

 

7.9

%

 

 

4.9

%

 

 

0.5

%

 

 

(1.1

%)

San Francisco

 

 

11,245

 

 

 

15.8

%

 

 

3,307

 

 

 

95.4

%

 

 

10.6

%

 

 

2.1

%

 

 

1.2

%

 

 

2.4

%

 

 

2.3

%

 

 

(0.2

%)

 

 

1.1

%

New York

 

 

8,536

 

 

 

14.3

%

 

 

4,566

 

 

 

96.6

%

 

 

6.9

%

 

 

4.2

%

 

 

0.2

%

 

 

7.1

%

 

 

4.3

%

 

 

(0.1

%)

 

 

(0.7

%)

Boston

 

 

7,170

 

 

 

11.1

%

 

 

3,574

 

 

 

95.8

%

 

 

8.6

%

 

 

5.8

%

 

 

3.8

%

 

 

6.6

%

 

 

6.0

%

 

 

(0.1

%)

 

 

0.2

%

Seattle

 

 

9,266

 

 

 

10.2

%

 

 

2,561

 

 

 

95.3

%

 

 

8.2

%

 

 

(0.4

%)

 

 

0.5

%

 

 

(0.8

%)

 

 

(0.8

%)

 

 

0.4

%

 

 

(1.7

%)

Denver

 

 

2,505

 

 

 

2.5

%

 

 

2,417

 

 

 

96.0

%

 

 

11.5

%

 

 

1.8

%

 

 

4.8

%

 

 

0.6

%

 

 

2.2

%

 

 

(0.1

%)

 

 

(0.5

%)

Other Expansion Markets

 

 

3,197

 

 

 

2.5

%

 

 

1,996

 

 

 

95.0

%

 

 

13.0

%

 

 

3.6

%

 

 

(23.3

%)

 

 

27.6

%

 

 

1.0

%

 

 

2.2

%

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

77,676

 

 

 

100.0

%

 

$

3,073

 

 

 

95.8

%

 

 

9.4

%

 

 

4.0

%

 

 

1.1

%

 

 

5.4

%

 

 

4.0

%

 

 

0.0

%

 

 

(0.1

%)

 

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.4% of total revenues for the year ended December 31, 2023.

Equity Residential

Fourth Quarter 2023 vs. Third Quarter 2023

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Quarter

Markets/Metro Areas

 

Apartment

Units

 

Q4 2023

% of

Actual

NOI

 

Q4 2023

Average

Rental

Rate

 

Q4 2023

Weighted

Average

Physical

Occupancy %

 

Q4 2023

Turnover

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Los Angeles

 

 

14,135

 

 

 

17.1

%

 

$

2,909

 

 

 

95.1

%

 

 

10.9

%

 

 

(0.3

%)

 

 

(2.6

%)

 

 

0.8

%

 

 

0.4

%

 

 

(0.6

%)

 

 

(1.4

%)

Orange County

 

 

4,028

 

 

 

5.5

%

 

 

2,873

 

 

 

96.3

%

 

 

8.7

%

 

 

1.2

%

 

 

(4.2

%)

 

 

2.7

%

 

 

1.7

%

 

 

(0.4

%)

 

 

(2.2

%)

San Diego

 

 

2,878

 

 

 

4.2

%

 

 

3,108

 

 

 

95.3

%

 

 

11.3

%

 

 

1.4

%

 

 

(3.3

%)

 

 

2.9

%

 

 

1.5

%

 

 

0.0

%

 

 

(1.2

%)

Subtotal – Southern California

 

 

21,041

 

 

 

26.8

%

 

 

2,929

 

 

 

95.3

%

 

 

10.6

%

 

 

0.3

%

 

 

(2.9

%)

 

 

1.5

%

 

 

0.8

%

 

 

(0.6

%)

 

 

(1.4

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

14,716

 

 

 

16.5

%

 

 

2,654

 

 

 

97.0

%

 

 

8.2

%

 

 

0.6

%

 

 

(4.4

%)

 

 

2.9

%

 

 

0.4

%

 

 

0.2

%

 

 

(6.2

%)

San Francisco

 

 

11,445

 

 

 

15.9

%

 

 

3,302

 

 

 

95.3

%

 

 

10.9

%

 

 

(0.4

%)

 

 

(2.7

%)

 

 

0.7

%

 

 

(0.2

%)

 

 

(0.2

%)

 

 

(2.2

%)

New York

 

 

8,536

 

 

 

14.2

%

 

 

4,566

 

 

 

96.6

%

 

 

6.9

%

 

 

0.8

%

 

 

(3.7

%)

 

 

4.0

%

 

 

0.8

%

 

 

0.1

%

 

 

(5.8

%)

Boston

 

 

7,170

 

 

 

11.0

%

 

 

3,574

 

 

 

95.8

%

 

 

8.6

%

 

 

1.1

%

 

 

1.3

%

 

 

1.1

%

 

 

1.4

%

 

 

(0.3

%)

 

 

(7.4

%)

Seattle

 

 

9,266

 

 

 

10.2

%

 

 

2,561

 

 

 

95.3

%

 

 

8.2

%

 

 

(0.4

%)

 

 

(7.4

%)

 

 

2.5

%

 

 

(0.6

%)

 

 

0.1

%

 

 

(6.1

%)

Denver

 

 

2,792

 

 

 

2.9

%

 

 

2,411

 

 

 

96.0

%

 

 

11.8

%

 

 

(0.3

%)

 

 

(4.0

%)

 

 

1.2

%

 

 

0.4

%

 

 

(0.5

%)

 

 

(6.4

%)

Other Expansion Markets

 

 

3,197

 

 

 

2.5

%

 

 

1,996

 

 

 

95.0

%

 

 

13.0

%

 

 

0.5

%

 

 

(18.8

%)

 

 

15.2

%

 

 

0.1

%

 

 

0.4

%

 

 

(5.0

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

78,163

 

 

 

100.0

%

 

$

3,071

 

 

 

95.8

%

 

 

9.4

%

 

 

0.3

%

 

 

(3.9

%)

 

 

2.3

%

 

 

0.5

%

 

 

(0.2

%)

 

 

(4.4

%)

 

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.4% of total revenues for the year ended December 31, 2023.

Equity Residential

2023 vs. 2022

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year

Markets/Metro Areas

 

Apartment

Units

 

2023

% of

Actual

NOI

 

2023

Average

Rental

Rate

 

2023

Weighted

Average

Physical

Occupancy %

 

2023

Turnover

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Los Angeles

 

 

14,135

 

 

 

17.6

%

 

$

2,861

 

 

 

95.3

%

 

 

44.5

%

 

 

3.7

%

(1)

 

8.5

%

 

 

1.7

%

 

 

5.1

%

 

 

(1.3

%)

 

 

5.8

%

Orange County

 

 

4,028

 

 

 

5.6

%

 

 

2,801

 

 

 

96.3

%

 

 

37.4

%

 

 

6.3

%

 

 

8.3

%

 

 

5.7

%

 

 

7.1

%

 

 

(0.7

%)

 

 

2.9

%

San Diego

 

 

2,706

 

 

 

4.0

%

 

 

2,993

 

 

 

95.4

%

 

 

42.3

%

 

 

6.9

%

 

 

5.6

%

 

 

7.2

%

 

 

8.2

%

 

 

(1.3

%)

 

 

4.2

%

Subtotal – Southern California

 

 

20,869

 

 

 

27.2

%

 

 

2,867

 

 

 

95.5

%

 

 

42.9

%

 

 

4.6

%

 

 

8.1

%

 

 

3.3

%

 

 

5.9

%

 

 

(1.2

%)

 

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

11,245

 

 

 

16.4

%

 

 

3,290

 

 

 

95.6

%

 

 

44.1

%

 

 

3.6

%

 

 

4.2

%

 

 

3.3

%

 

 

4.2

%

 

 

(0.6

%)

 

 

2.4

%

Washington, D.C.

 

 

14,400

 

 

 

16.3

%

 

 

2,597

 

 

 

96.8

%

 

 

40.5

%

 

 

6.0

%

 

 

1.4

%

 

 

8.3

%

 

 

5.9

%

 

 

0.0

%

 

 

(2.6

%)

New York

 

 

8,536

 

 

 

14.4

%

 

 

4,504

 

 

 

96.8

%

 

 

37.2

%

 

 

10.5

%

 

 

2.8

%

 

 

16.7

%

 

 

10.7

%

 

 

(0.1

%)

 

 

(5.2

%)

Seattle

 

 

9,266

 

 

 

10.8

%

 

 

2,579

 

 

 

95.2

%

 

 

48.0

%

 

 

3.0

%

 

 

3.3

%

 

 

2.9

%

 

 

2.9

%

 

 

0.1

%

 

 

(3.6

%)

Boston

 

 

6,700

 

 

 

10.3

%

 

 

3,422

 

 

 

96.0

%

 

 

43.9

%

 

 

7.1

%

 

 

3.5

%

 

 

8.7

%

 

 

7.4

%

 

 

(0.1

%)

 

 

(1.5

%)

Denver

 

 

2,505

 

 

 

2.7

%

 

 

2,404

 

 

 

96.3

%

 

 

58.1

%

 

 

4.6

%

 

 

8.2

%

 

 

3.2

%

 

 

4.6

%

 

 

0.0

%

 

 

(2.2

%)

Other Expansion Markets

 

 

2,776

 

 

 

1.9

%

 

 

1,987

 

 

 

94.7

%

 

 

57.1

%

 

 

4.7

%

 

 

1.4

%

 

 

7.4

%

 

 

5.1

%

 

 

(0.6

%)

 

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

76,297

 

 

 

100.0

%

 

$

3,029

 

 

 

95.9

%

 

 

43.7

%

 

 

5.7

%

 

 

4.1

%

 

 

6.4

%

 

 

6.2

%

 

 

(0.4

%)

 

 

0.1

%

(1)

 

Excluding Bad Debt, Net, which includes the positive impact of governmental rental assistance in the year ended December 31, 2022, same store revenue growth would have been 5.3%.

     
Note: The above table reflects Residential same store results only.  Residential operations account for approximately 96.4% of total revenues for the year ended December 31, 2023.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics

For 76,297 Same Store Apartment Units

 

 

 

New Lease Change (1)

 

Renewal Rate Achieved (1)

 

Blended Rate (1)

Markets/Metro Areas

 

Q4 2023

 

Q3 2023

 

Q4 2023

 

Q3 2023

 

Q4 2023

 

Q3 2023

Southern California

 

 

(3.0

%)

 

 

2.0

%

 

 

5.2

%

 

 

6.5

%

 

 

1.3

%

 

 

4.2

%

San Francisco

 

 

(9.4

%)

 

 

(3.9

%)

 

 

4.1

%

 

 

4.4

%

 

 

(3.1

%)

 

 

0.0

%

Washington, D.C.

 

 

0.8

%

 

 

4.3

%

 

 

6.1

%

 

 

6.7

%

 

 

3.9

%

 

 

5.5

%

New York

 

 

(2.2

%)

 

 

1.5

%

 

 

4.5

%

 

 

5.3

%

 

 

2.2

%

 

 

3.7

%

Seattle

 

 

(8.4

%)

 

 

(4.4

%)

 

 

5.7

%

 

 

2.5

%

 

 

(1.4

%)

 

 

(0.9

%)

Boston

 

 

(1.2

%)

 

 

3.7

%

 

 

5.3

%

 

 

6.1

%

 

 

2.7

%

 

 

5.0

%

Denver

 

 

(5.0

%)

 

 

0.1

%

 

 

4.7

%

 

 

5.3

%

 

 

(0.3

%)

 

 

2.4

%

Other Expansion Markets

 

 

(12.5

%)

 

 

(8.5

%)

 

 

4.4

%

 

 

3.4

%

 

 

(5.5

%)

 

 

(3.8

%)

Total

 

 

(4.5

%)

 

 

0.5

%

 

 

5.1

%

 

 

5.5

%

 

 

0.8

%

 

 

3.1

%

(1)

 

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions.  See page 4 for January 2024 preliminary data.

Equity Residential

Fourth Quarter 2023 vs. Fourth Quarter 2022

Total Same Store Operating Expenses Including 77,676 Same Store Apartment Units

($ in thousands)

 

 

 

Q4 2023

 

 

Q4 2022

 

 

$

Change (1)

 

 

%

Change

 

 

% of

Q4 2023

Operating

Expenses

 

Real estate taxes

 

$

89,064

 

 

$

89,248

 

 

$

(184

)

 

 

(0.2

%)

 

 

41.2

%

On-site payroll

 

 

42,352

 

 

 

41,696

 

 

 

656

 

 

 

1.6

%

 

 

19.6

%

Utilities

 

 

34,709

 

 

 

34,672

 

 

 

37

 

 

 

0.1

%

 

 

16.0

%

Repairs and maintenance

 

 

27,336

 

 

 

27,008

 

 

 

328

 

 

 

1.2

%

 

 

12.6

%

Insurance

 

 

8,371

 

 

 

7,377

 

 

 

994

 

 

 

13.5

%

 

 

3.9

%

Leasing and advertising

 

 

2,674

 

 

 

2,673

 

 

 

1

 

 

 

0.0

%

 

 

1.2

%

Other on-site operating expenses

 

 

11,903

 

 

 

10,939

 

 

 

964

 

 

 

8.8

%

 

 

5.5

%

Total Same Store Operating Expenses (2)

 

(includes Residential and Non-Residential)

 

$

216,409

 

 

$

213,613

 

 

$

2,796

 

 

 

1.3

%

 

 

100.0

%

 

2023 vs. 2022

Total Same Store Operating Expenses Including 76,297 Same Store Apartment Units

($ in thousands)

 

 

 

2023

 

 

2022

 

 

$

Change (1)

 

 

%

Change

 

 

% of

2023

Operating

Expenses

 

Real estate taxes

 

$

356,679

 

 

$

350,928

 

 

$

5,751

 

 

 

1.6

%

 

 

40.8

%

On-site payroll

 

 

169,280

 

 

 

161,297

 

 

 

7,983

 

 

 

4.9

%

 

 

19.4

%

Utilities

 

 

136,982

 

 

 

133,579

 

 

 

3,403

 

 

 

2.5

%

 

 

15.7

%

Repairs and maintenance

 

 

117,559

 

 

 

107,702

 

 

 

9,857

 

 

 

9.2

%

 

 

13.4

%

Insurance

 

 

33,063

 

 

 

28,999

 

 

 

4,064

 

 

 

14.0

%

 

 

3.8

%

Leasing and advertising

 

 

10,194

 

 

 

10,400

 

 

 

(206

)

 

 

(2.0

%)

 

 

1.2

%

Other on-site operating expenses

 

 

49,691

 

 

 

44,697

 

 

 

4,994

 

 

 

11.2

%

 

 

5.7

%

Total Same Store Operating Expenses (2)

 

(includes Residential and Non-Residential)

 

$

873,448

 

 

$

837,602

 

 

$

35,846

 

 

 

4.3

%

 

 

100.0

%

 

(1)

 

The year-over-year changes were primarily driven by the following factors:

   

 

   

Real estate taxes – Increase due to modest escalation in rates and assessed values.

   

 

   

On-site payroll – Increase due primarily to fewer staffing vacancies compared to the same periods of 2022 and elevated employee benefit costs, partially offset by the impact of innovation initiatives.

   

 

   

Utilities – Increase primarily driven by higher water, sewer and trash expense.

   

 

   

Repairs and maintenance – Increase was impacted by increased outsourcing due to higher internal staffing utilization to address issues from California rain storms that occurred earlier in 2023.

   

 

   

Insurance – Increase due to higher premiums on property insurance renewal due to challenging conditions in the insurance market.

   

 

   

Other on-site operating expenses – Increase primarily driven by higher property-related legal expenses.

   

 

(2)

 

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of December 31, 2023

($ in thousands)

 

 

 

Debt

Balances (1)

 

 

% of Total

 

 

Weighted

Average

Rates (1)

 

 

Weighted

Average

Maturities

(years)

 

Secured

 

$

1,632,902

 

 

 

22.1

%

 

 

3.68

%

 

 

7.9

 

Unsecured

 

 

5,757,548

 

 

 

77.9

%

 

 

3.61

%

 

 

8.2

 

Total

 

$

7,390,450

 

 

 

100.0

%

 

 

3.63

%

 

 

8.1

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,398,598

 

 

 

18.9

%

 

 

3.60

%

 

 

7.4

 

Unsecured – Public

 

 

5,348,417

 

 

 

72.4

%

 

 

3.51

%

 

 

8.8

 

Fixed Rate Debt

 

 

6,747,015

 

 

 

91.3

%

 

 

3.53

%

 

 

8.5

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

 

 

 

 

 

 

 

7.18

%

 

 

 

Secured – Tax Exempt

 

 

234,304

 

 

 

3.2

%

 

 

3.53

%

 

 

10.6

 

Unsecured – Revolving Credit Facility

 

 

 

 

 

 

 

 

 

 

 

3.8

 

Unsecured – Commercial Paper Program (2)

 

 

409,131

 

 

 

5.5

%

 

 

5.47

%

 

 

 

Floating Rate Debt

 

 

643,435

 

 

 

8.7

%

 

 

4.79

%

 

 

4.0

 

Total

 

$

7,390,450

 

 

 

100.0

%

 

 

3.63

%

 

 

8.1

 

(1)

 

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(2)

 

At December 31, 2023, the weighted average maturity of commercial paper outstanding was 14 days.  The weighted average amount outstanding for the year ended December 31, 2023 was approximately $276.0 million.

 
Note: The Company capitalized interest of approximately $12.3 million and $7.1 million during the years ended December 31, 2023 and 2022, respectively.  The Company capitalized interest of approximately $2.7 million and $2.9 million during the quarters ended December 31, 2023 and 2022, respectively.

Equity Residential

Debt Maturity Schedule as of December 31, 2023

($ in thousands)

 

Year

 

Fixed

Rate

 

 

Floating

Rate

 

 

Total

 

 

% of Total

 

 

Weighted

Average Coupons

on Fixed

Rate Debt (1)

 

 

Weighted

Average

Coupons on

Total Debt (1)

 

2024

 

$

 

 

$

416,200

 

(2)

$

416,200

 

 

 

5.6

%

 

N/A

 

 

 

5.63

%

2025

 

 

450,000

 

 

 

8,100

 

 

 

458,100

 

 

 

6.1

%

 

 

3.38

%

 

 

3.38

%

2026

 

 

592,025

 

 

 

9,000

 

 

 

601,025

 

 

 

8.0

%

 

 

3.58

%

 

 

3.59

%

2027

 

 

400,000

 

 

 

9,800

 

 

 

409,800

 

 

 

5.5

%

 

 

3.25

%

 

 

3.26

%

2028

 

 

900,000

 

 

 

10,700

 

 

 

910,700

 

 

 

12.2

%

 

 

3.79

%

 

 

3.79

%

2029

 

 

888,120

 

 

 

11,500

 

 

 

899,620

 

 

 

12.1

%

 

 

3.30

%

 

 

3.31

%

2030

 

 

1,148,462

 

 

 

12,700

 

 

 

1,161,162

 

 

 

15.6

%

 

 

2.53

%

 

 

2.55

%

2031

 

 

528,500

 

 

 

39,800

 

 

 

568,300

 

 

 

7.6

%

 

 

1.94

%

 

 

2.09

%

2032

 

 

 

 

 

28,000

 

 

 

28,000

 

 

 

0.4

%

 

N/A

 

 

 

3.82

%

2033

 

 

550,000

 

 

 

2,300

 

 

 

552,300

 

 

 

7.4

%

 

 

5.22

%

 

 

5.21

%

2034+

 

 

1,350,850

 

 

 

108,600

 

 

 

1,459,450

 

 

 

19.5

%

 

 

4.39

%

 

 

4.25

%

Subtotal

 

 

6,807,957

 

 

 

656,700

 

 

 

7,464,657

 

 

 

100.0

%

 

 

3.53

%

 

 

3.64

%

Deferred Financing Costs and Unamortized (Discount)

 

 

(60,942

)

 

 

(13,265

)

 

 

(74,207

)

 

N/A

 

 

N/A

 

 

N/A

 

Total

 

$

6,747,015

 

 

$

643,435

 

 

$

7,390,450

 

 

 

100.0

%

 

 

3.53

%

 

 

3.64

%

(1)

 

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(2)

 

Includes $410.0 million in principal outstanding on the Company's Commercial Paper Program.

Equity Residential

Selected Unsecured Public Debt Covenants

 

 

 

December 31,

 

September 30,

 

 

2023

 

2023

Debt to Adjusted Total Assets (not to exceed 60%)

 

26.5%

 

26.9%

 

 

 

 

 

Secured Debt to Adjusted Total Assets (not to exceed 40%)

 

6.7%

 

6.7%

 

 

 

 

 

Consolidated Income Available for Debt Service to

 

 

 

Maximum Annual Service Charges

 

 

 

(must be at least 1.5 to 1)

 

6.19

 

6.08

 

 

 

 

 

Total Unencumbered Assets to Unsecured Debt

 

 

 

(must be at least 125%)

 

510.7%

 

502.3%

Note: These selected covenants represent the most restrictive financial covenants relating to ERP Operating Limited Partnership's ("ERPOP") outstanding public debt securities. Equity Residential is the general partner of ERPOP.

 

Selected Credit Ratios

 

 

 

December 31,

 

September 30,

 

 

2023

 

2023

Total debt to Normalized EBITDAre

 

4.17x

 

4.28x

 

 

 

 

 

Net debt to Normalized EBITDAre

 

4.12x

 

4.24x

 

 

 

 

 

Unencumbered NOI as a % of total NOI

 

89.8%

 

89.8%

 

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of December 31, 2023

(Amounts in thousands except for share/unit and per share amounts)

 

Secured Debt

 

 

 

 

 

 

 

$

1,632,902

 

 

 

22.1

%

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

5,757,548

 

 

 

77.9

%

 

 

 

Total Debt

 

 

 

 

 

 

 

 

7,390,450

 

 

 

100.0

%

 

 

23.6

%

Common Shares (includes Restricted Shares)

 

 

379,291,417

 

 

 

97.0

%

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

11,581,306

 

 

 

3.0

%

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

390,872,723

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

Common Share Price at December 31, 2023

 

$

61.16