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Results reflect a rise in same-store net operating income (NOI) and physical occupancy on a year-over-year basis. Higher expenses undermined the performance to an extent.
Rental income of $781.9 million lagged the consensus mark of $789.3 million. Rental income was up 2% year over year.
For full-year 2025, normalized FFO per share came in at $3.99, which missed the Zacks Consensus Estimate of $4. The same was higher than the prior-year tally of $3.89. This was backed by 3.8% growth in rental income to $3.09 billion.
EQR’s Q4 in Detail
Same-store revenues were up 2.5% year over year, below our estimate of 2.6%. Same-store expenses went up 2.9% year over year versus our estimate of 3.2%. Same-store NOI climbed 2.3% year over year, in line with our estimate.
The average rental rate increased 2.2% year over year to $3,152 in the quarter ended in December. The same-store portfolio physical occupancy improved 20 basis points (bps) year over year at 96.2%. Our estimate for the metric was 96.3%.
Same-store residential revenues were up 2.4% year over year, while expenses increased 2.9%. Same-store residential NOI expanded 2.2% year over year.
The new lease change for its residential same-store properties was down 4.7%, while the renewal rate achieved by EQR was 4.4% for the fourth quarter. The blended rate for the quarter was 0.5%. The physical occupancy for this portfolio was 96.3%, remaining unchanged sequentially.
Property and maintenance expenses grew 4.8%, general and administrative expenses were up 8.5%, and other expenses were higher by 37.6%.
EQR’s Portfolio Activity
In the fourth quarter of 2025, Equity Residential sold six properties comprising 1,138 apartment units for an aggregate sale price of approximately $527.6 million, with a disposition yield of 5.6%. The proceeds from the disposition were mainly used for share repurchases.
EQR’s Balance Sheet
Equity Residential exited the fourth quarter of 2025 with cash and cash equivalents of $55.9 million, down from $93.1 million recorded as of Sept. 30, 2025.
The net debt to normalized EBITDAre was 4.27X, which decreased from 4.41X in the previous quarter. The unencumbered NOI as a percentage of the total NOI was 90.3% in the quarter, down from 90.4% in the prior quarter.
During and following the end of the fourth quarter of 2025, EQR repurchased and retired around 3.4 million of its common shares for a total purchase price of $205.7 million.
2026 Guidance by EQR
For full-year 2026, Equity Residential projects normalized FFO per share in the band of $4.02-$4.14. The Zacks Consensus Estimate is currently pegged at $4.13.
The company’s full-year guidance incorporates projections for same-store revenue growth of 1.2-3.2%, an expense increase of 3-4% and an NOI expansion of 0.5-2.5%. Physical occupancy is expected at 96.4%.
For the first quarter of 2026, the company projects normalized FFO per share in the band of 94-98 cents. The Zacks Consensus Estimate is currently pegged at 99 cents.
Mid-America Apartment Communities (MAA - Free Report) reported fourth-quarter 2025 FFO per share of $2.23, which surpassed the Zacks Consensus Estimate of $2.22. This compares with the FFO of $2.23 a year ago.
Results reflected higher occupancy and same-store effective blended lease rate growth year over year. The same-store portfolio’s NOI and average effective rent per unit fell, undermining the performance.
Essex Property Trust Inc. (ESS - Free Report) reported fourth-quarter 2025 core FFO per share of $3.98, missing the Zacks Consensus Estimate of $4. This compares favorably to the FFO of $3.92 a year ago.
Results reflected favorable growth in same-property net operating income (NOI) and higher occupancy. Higher interest expenses partly acted as a dampener.
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 Q4 FFO & Revenues Miss Estimates but Increase Y/Y
Key Takeaways
Equity Residential (EQR - Free Report) reported fourth-quarter 2025 normalized funds from operations (FFO) per share of $1.03, which missed the Zacks Consensus Estimate of $1.04. The figure improved 3% from the year-ago quarter.
Results reflect a rise in same-store net operating income (NOI) and physical occupancy on a year-over-year basis. Higher expenses undermined the performance to an extent.
Rental income of $781.9 million lagged the consensus mark of $789.3 million. Rental income was up 2% year over year.
For full-year 2025, normalized FFO per share came in at $3.99, which missed the Zacks Consensus Estimate of $4. The same was higher than the prior-year tally of $3.89. This was backed by 3.8% growth in rental income to $3.09 billion.
EQR’s Q4 in Detail
Same-store revenues were up 2.5% year over year, below our estimate of 2.6%. Same-store expenses went up 2.9% year over year versus our estimate of 3.2%. Same-store NOI climbed 2.3% year over year, in line with our estimate.
The average rental rate increased 2.2% year over year to $3,152 in the quarter ended in December. The same-store portfolio physical occupancy improved 20 basis points (bps) year over year at 96.2%. Our estimate for the metric was 96.3%.
Same-store residential revenues were up 2.4% year over year, while expenses increased 2.9%. Same-store residential NOI expanded 2.2% year over year.
The new lease change for its residential same-store properties was down 4.7%, while the renewal rate achieved by EQR was 4.4% for the fourth quarter. The blended rate for the quarter was 0.5%. The physical occupancy for this portfolio was 96.3%, remaining unchanged sequentially.
Property and maintenance expenses grew 4.8%, general and administrative expenses were up 8.5%, and other expenses were higher by 37.6%.
EQR’s Portfolio Activity
In the fourth quarter of 2025, Equity Residential sold six properties comprising 1,138 apartment units for an aggregate sale price of approximately $527.6 million, with a disposition yield of 5.6%. The proceeds from the disposition were mainly used for share repurchases.
EQR’s Balance Sheet
Equity Residential exited the fourth quarter of 2025 with cash and cash equivalents of $55.9 million, down from $93.1 million recorded as of Sept. 30, 2025.
The net debt to normalized EBITDAre was 4.27X, which decreased from 4.41X in the previous quarter. The unencumbered NOI as a percentage of the total NOI was 90.3% in the quarter, down from 90.4% in the prior quarter.
During and following the end of the fourth quarter of 2025, EQR repurchased and retired around 3.4 million of its common shares for a total purchase price of $205.7 million.
2026 Guidance by EQR
For full-year 2026, Equity Residential projects normalized FFO per share in the band of $4.02-$4.14. The Zacks Consensus Estimate is currently pegged at $4.13.
The company’s full-year guidance incorporates projections for same-store revenue growth of 1.2-3.2%, an expense increase of 3-4% and an NOI expansion of 0.5-2.5%. Physical occupancy is expected at 96.4%.
For the first quarter of 2026, the company projects normalized FFO per share in the band of 94-98 cents. The Zacks Consensus Estimate is currently pegged at 99 cents.
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 Residential REITs
Mid-America Apartment Communities (MAA - Free Report) reported fourth-quarter 2025 FFO per share of $2.23, which surpassed the Zacks Consensus Estimate of $2.22. This compares with the FFO of $2.23 a year ago.
Results reflected higher occupancy and same-store effective blended lease rate growth year over year. The same-store portfolio’s NOI and average effective rent per unit fell, undermining the performance.
Essex Property Trust Inc. (ESS - Free Report) reported fourth-quarter 2025 core FFO per share of $3.98, missing the Zacks Consensus Estimate of $4. This compares favorably to the FFO of $3.92 a year ago.
Results reflected favorable growth in same-property net operating income (NOI) and higher occupancy. Higher interest expenses partly acted as a dampener.
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.