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Equity Residential (EQR) Q1 FFO and Revenues Miss Estimates
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Equity Residential’s (EQR - Free Report) reported first-quarter 2022 normalized funds from operations (FFO) per share of 77 cents, missing the Zacks Consensus Estimate of 80 cents.
Rental income came in at $653.3 million, lagging the consensus mark of $658.07 million.
Nonetheless, on a year-over-year basis, normalized FFO per share improved 13.2%, while rental income climbed 9.3%. Normalized FFO grew based on strong lease demand, while same-store revenue witnessed growth driven by strong physical occupancy and improvement in pricing power.
Quarter in Detail
Residential same-store revenues (including 74,675 apartment units) were up 7.8% year over year to $595.3 million, while same-store expenses flared up 2.5% to $203.8 million. As a result, same-store NOI improved 10.8% to $391.6 million.
The average rental rate increased 6.2% year over year to $2,757 during the March quarter, while physical occupancy expanded 140 basis points to 96.4% for the same-store portfolio.
EQR’s capital expenditure in real estate for same-store properties in the quarter was $33 million.
In the first quarter, the company purchased a 172-unit apartment property in San Diego for $113.0 million.
It did not sell any properties during the first quarter of 2022.
As of Mar 31, 2022, the resident/tenant accounts receivable balance was $42.8 million, up 14.6% from the previous quarter.
Balance Sheet
Equity Residential exited first-quarter 2022 with cash and cash equivalents of $41.1 million, down from $123.8 million recorded at the end of 2021. The net debt to normalized EBITDAre was 5.38X compared with 5.61X from the previous quarter.
Outlook
For second-quarter 2022, Equity Residential projects a normalized FFO per share of 82-86 cents. The Zacks Consensus Estimate for the same is currently pegged at 85 cents.
For 2022, management maintains its previous guidance. Normalized FFO per share is expected in the range of $3.40-$3.50. The Zacks Consensus Estimate is pegged at $3.44.
Equity Residential anticipates same-store revenues to improve 8-10% for 2022. Projected expenses are expected to rise 2.5-3.5%. NOI improvement of 11-13% for the full year is projected. Physical occupancy is expected to be 96.5% for this period.
SL Green Realty (SLG - Free Report) reported first quarter 2022 FFO per share of $1.65, beating the Zacks Consensus Estimate by a cent. However, the reported FFO per share compared unfavorably with the year-ago quarter’s $1.73.
SLG first-quarter performance was driven by a better-than-expected top line and healthy leasing activity.
Crown Castle International Corp.’s (CCI - Free Report) first-quarter 2022 adjusted funds from operations (AFFO) per share of $1.87 surpassed the Zacks Consensus Estimate of $1.80. Net revenues of $1.74 billion exceeded the Zacks Consensus Estimate of $1.70 billion.
Growth in site-rental revenues due to elevated tower space demand aided the top-line performance. CCI also raised the outlook for site-rental revenues and adjusted EBITDA for 2022.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.
Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Equity Residential (EQR) Q1 FFO and Revenues Miss Estimates
Equity Residential’s (EQR - Free Report) reported first-quarter 2022 normalized funds from operations (FFO) per share of 77 cents, missing the Zacks Consensus Estimate of 80 cents.
Rental income came in at $653.3 million, lagging the consensus mark of $658.07 million.
Nonetheless, on a year-over-year basis, normalized FFO per share improved 13.2%, while rental income climbed 9.3%. Normalized FFO grew based on strong lease demand, while same-store revenue witnessed growth driven by strong physical occupancy and improvement in pricing power.
Quarter in Detail
Residential same-store revenues (including 74,675 apartment units) were up 7.8% year over year to $595.3 million, while same-store expenses flared up 2.5% to $203.8 million. As a result, same-store NOI improved 10.8% to $391.6 million.
The average rental rate increased 6.2% year over year to $2,757 during the March quarter, while physical occupancy expanded 140 basis points to 96.4% for the same-store portfolio.
EQR’s capital expenditure in real estate for same-store properties in the quarter was $33 million.
In the first quarter, the company purchased a 172-unit apartment property in San Diego for $113.0 million.
It did not sell any properties during the first quarter of 2022.
As of Mar 31, 2022, the resident/tenant accounts receivable balance was $42.8 million, up 14.6% from the previous quarter.
Balance Sheet
Equity Residential exited first-quarter 2022 with cash and cash equivalents of $41.1 million, down from $123.8 million recorded at the end of 2021.
The net debt to normalized EBITDAre was 5.38X compared with 5.61X from the previous quarter.
Outlook
For second-quarter 2022, Equity Residential projects a normalized FFO per share of 82-86 cents. The Zacks Consensus Estimate for the same is currently pegged at 85 cents.
For 2022, management maintains its previous guidance. Normalized FFO per share is expected in the range of $3.40-$3.50. The Zacks Consensus Estimate is pegged at $3.44.
Equity Residential anticipates same-store revenues to improve 8-10% for 2022. Projected expenses are expected to rise 2.5-3.5%. NOI improvement of 11-13% for the full year is projected. Physical occupancy is expected to be 96.5% for this period.
Equity Residential currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equity Residential Price, Consensus and EPS Surprise
Equity Residential price-consensus-eps-surprise-chart | Equity Residential Quote
Performance of Other REITs
SL Green Realty (SLG - Free Report) reported first quarter 2022 FFO per share of $1.65, beating the Zacks Consensus Estimate by a cent. However, the reported FFO per share compared unfavorably with the year-ago quarter’s $1.73.
SLG first-quarter performance was driven by a better-than-expected top line and healthy leasing activity.
Crown Castle International Corp.’s (CCI - Free Report) first-quarter 2022 adjusted funds from operations (AFFO) per share of $1.87 surpassed the Zacks Consensus Estimate of $1.80. Net revenues of $1.74 billion exceeded the Zacks Consensus Estimate of $1.70 billion.
Growth in site-rental revenues due to elevated tower space demand aided the top-line performance. CCI also raised the outlook for site-rental revenues and adjusted EBITDA for 2022.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.
Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.