Equity Residential (EQR)

Despite a tough operating environment, Equity Residential (EQR - Analyst Report) reported 1Q09 FFO [funds from operations] of $0.57 per share vs. $0.58 in 1Q08.

As expected in a recession, operations are steadily declining for all apartment REITs. The company reported year-over-year SS [same-store] occupancy and rental rate declines in 1Q09. Massive job losses will continue to negatively affect results.

Despite the slowdown, we still rate EQR a Buy. The company's balance sheet is in relatively good shape; EQR has enough cash and debt availability to take care of maturing debt over the next couple of years. We think multi-family will be one of the better performing REIT sectors in 2009, largely due to continued problems in the for-sale housing market.