EQR
$81.01
Equity Residential
($.77)
(.94%)
Earnings Details
3rd Quarter September 2019
Tuesday, October 22, 2019 4:20:00 PM
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Summary

Equity Residential Beats

Equity Residential (EQR) reported 3rd Quarter September 2019 earnings of $0.91 per share on revenue of $685.1 million. The consensus earnings estimate was $0.88 per share on revenue of $673.5 million. The Earnings Whisper number was $0.88 per share. Revenue grew 4.9% on a year-over-year basis.

The company said it expects fourth quarter funds from operations of $0.87 to $0.89 per share. The current consensus FFO estimate is $0.89 per share for the quarter ending December 31, 2019.

Equity Residential is a real estate investment trust engaged in the acquisition, development and management of apartment properties in the U.S. It owns and manages 400 properties located in Boston, New York, Washington, DC and South Florida, among others.

Results
Reported Earnings
$0.91
Earnings Whisper
$0.88
Consensus Estimate
$0.88
Reported Revenue
$685.1 Mil
Revenue Estimate
$673.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Equity Residential Reports Third Quarter 2019 Results Revises Full Year Guidance

 

CHICAGO--(BUSINESS WIRE)--Equity Residential (NYSE: EQR) today reported results for the quarter and nine months ended September 30, 2019. All per share results are reported as available to common shares/units on a diluted basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30,

 

 

 

 

 

2019

 

 

2018

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

0.71

 

 

$

0.58

 

 

$

0.13

 

 

 

22.4

%

 

 

Funds from Operations (FFO) per share

 

$

0.92

 

 

$

0.79

 

 

$

0.13

 

 

 

16.5

%

 

 

Normalized FFO per share

 

$

0.91

 

 

$

0.83

 

 

$

0.08

 

 

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2019

 

 

2018

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

1.82

 

 

$

1.46

 

 

$

0.36

 

 

 

24.7

%

 

 

Funds from Operations (FFO) per share

 

$

2.53

 

 

$

2.30

 

 

$

0.23

 

 

 

10.0

%

 

 

Normalized FFO per share

 

$

2.58

 

 

$

2.41

 

 

$

0.17

 

 

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“We are pleased to report that our same store revenues, expenses and NOI as well as our Normalized FFO results are tracking in line with or better than the improved expectations we provided in July and that the efforts of our hard working colleagues across the Company produced the highest resident retention in our history. We continue to see robust demand to live in the vibrant urban and dense suburban centers of the cities in which we operate,” said Mark J. Parrell, Equity Residential’s President and CEO.

Highlights

  • The Company produced same store revenue growth of 3.4% for the third quarter of 2019, with Physical Occupancy of 96.5% and Renewal Rate Achieved growth of 5.0%.
  • The Company produced Normalized FFO per share growth of 9.6% for the third quarter of 2019.
  • During the third quarter of 2019, the Company acquired four apartment properties, totaling 1,084 apartment units, for an aggregate purchase price of approximately $489.9 million.
  • During the third quarter of 2019, the Company issued $600.0 million of unsecured notes at a coupon rate of 2.5% and a yield of 2.56%, the lowest ten-year yield in both the Company’s and REIT industry’s histories.

Results Per Share

The change in EPS for both the quarter and nine months ended September 30, 2019 compared to the same periods of 2018, are due primarily to higher property and unconsolidated sale gains in the third quarter and/or full year of 2019, the various adjustment items listed on page 25 of this release and the items described below.

The per share changes in FFO for both the quarter and nine months ended September 30, 2019 compared to the same periods of 2018, are due primarily to the various adjustment items listed on page 25 of this release and the items described below.

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

 

 

Positive/(Negative) Impact

 

 

 

Third Quarter 2019 vs.

Third Quarter 2018

 

 

September YTD 2019 vs.

September YTD 2018

 

Same Store NOI

 

$

0.04

 

 

$

0.10

 

Lease-Up NOI and other non-same store NOI

 

 

0.02

 

 

 

0.06

 

2019 and 2018 transaction activity impact on NOI

 

 

0.02

 

 

 

0.03

 

Interest expense

 

 

0.01

 

 

 

0.01

 

Other items, including corporate overhead 1

 

 

(0.01

)

 

 

(0.03

)

Net

 

$

0.08

 

 

$

0.17

 

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 27 through 32 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 29 and 30 of this release and the Company has included guidance for 2019 Normalized FFO per share on page 26 and 2019 FFO per share and 2019 EPS on page 30 of this release.

Same Store Results

The following table shows the increases in same store results for the third quarter 2019 to third quarter 2018 comparison, which includes 75,290 apartment units, and for the nine months ended September 30, 2019 to nine months ended September 30, 2018 comparison, which includes 72,979 apartment units. The Company’s Physical Occupancy was 96.5% compared to 96.3% for the third quarter of 2019 and 2018, respectively, and 96.5% compared to 96.2% for the first nine months of 2019 and 2018, respectively.

 

 

Third Quarter 2019 vs.

Third Quarter 2018

 

 

September YTD 2019 vs.

September YTD 2018

 

Revenues

 

3.4%

 

 

3.3%

 

Expenses

 

3.7%

 

 

3.8%

 

NOI

 

3.3%

 

 

3.0%

 

Investment Activity

The Company acquired four apartment properties during the third quarter of 2019, totaling 1,084 apartment units, for an aggregate purchase price of approximately $489.9 million at a weighted average Acquisition Capitalization Rate of 4.4%. The properties are located in Los Angeles, the San Francisco Bay Area and suburban Denver.

During the third quarter of 2019, the Company completed a 137 apartment unit property in Seattle and an 84 apartment unit property in Cambridge, MA. Also during the quarter, the Company started a 200 apartment unit joint venture development property in the San Francisco Bay Area at a development cost of approximately $117.8 million as well as a wholly-owned 154 apartment unit property in suburban Washington, D.C. that will be developed at a cost of approximately $75.3 million.

The Company sold seven properties during the third quarter of 2019, totaling 641 apartment units, for an aggregate sale price of approximately $303.9 million at a weighted average Disposition Yield of 4.7%, generating an Unlevered IRR of 7.6%. One of the properties is located in Arlington, VA and the other six are located in Berkeley, CA.

During the first nine months of 2019, the Company acquired ten properties, totaling 2,728 apartment units, for an aggregate purchase price of approximately $1.1 billion at a weighted average Acquisition Capitalization Rate of 4.6%.

During the first nine months of 2019, the Company sold nine wholly-owned properties, totaling 1,202 apartment units, for an aggregate sale price of approximately $706.7 million at a weighted average Disposition Yield of 4.5%, generating an Unlevered IRR of 8.0%. During the first nine months of 2019, the Company also sold two unconsolidated properties, totaling 945 apartment units, for an aggregate sale price of approximately $394.5 million at a weighted average Disposition Yield of 4.7%, received net proceeds of approximately $78.3 million and recognized a GAAP gain on sale of approximately $69.5 million from these sales.

Capital Markets Activity

On August 27, 2019, the Company issued $600.0 million of 10-year unsecured notes at a coupon rate of 2.5% and yield of 2.56%. After the effect of underwriters’ fees and other costs associated with the offering, the all-in effective yield of the notes is approximately 2.65%. As previously disclosed, on July 1, 2019 the Company paid off $950.0 million in secured and unsecured debt with a Weighted Average Rate of 4.62%.

Fourth Quarter 2019 Guidance

The Company has established guidance ranges for the fourth quarter of 2019 EPS, FFO per share and Normalized FFO per share as listed below:

 

 

Q4 2019

Guidance

EPS

 

$0.63 to $0.65

FFO per share

 

$0.87 to $0.89

Normalized FFO per share

 

$0.87 to $0.89

The difference between the third quarter 2019 actual EPS of $0.71 and the fourth quarter 2019 EPS guidance midpoint of $0.64 is due primarily to lower expected property sale gains and the items described below.

The difference between the third quarter 2019 actual FFO of $0.92 per share and the fourth quarter 2019 FFO guidance midpoint of $0.88 per share is due primarily to the items described below.

The difference between the third quarter 2019 actual Normalized FFO of $0.91 per share and the fourth quarter 2019 Normalized FFO guidance midpoint of $0.88 per share is due primarily to:

 

 

Positive/(Negative)

Impact

 

 

 

 

Fourth Quarter 2019 vs.

Third Quarter 2019

 

 

Same Store NOI

 

$

(0.01

)

 

2019 and 2018 transaction activity impact on NOI

 

 

(0.01

)

 

Other items, including corporate overhead

 

 

(0.01

)

 

Net

 

$

(0.03

)

 

Full Year 2019 Guidance

The Company has revised its guidance for its full year 2019 same store operating performance, EPS, FFO per share, Normalized FFO per share and transactions as listed below:

 

 

Revised

 

 

Previous

 

Same Store:

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.4%

 

 

96.4%

 

Revenue change

 

3.3%

 

 

3.1% to 3.5%

 

Expense change

 

3.8%

 

 

3.5% to 4.0%

 

NOI change

 

3.1%

 

 

2.7% to 3.5%

 

 

 

 

 

 

 

 

 

 

EPS

 

$2.45 to $2.47

 

 

$2.48 to $2.54

 

FFO per share

 

$3.40 to $3.42

 

 

$3.36 to $3.42

 

Normalized FFO per share

 

$3.46 to $3.48

 

 

$3.43 to $3.49

 

 

 

 

 

 

 

 

 

 

Transactions:

 

 

 

 

 

 

 

 

Consolidated rental acquisitions

 

$1.1 billion

 

 

$1.0 billion

 

Consolidated rental dispositions

 

$1.0 billion

 

 

$1.0 billion

 

Transaction Accretion (Dilution)

 

None

 

 

None

 

The change in the full year 2019 EPS guidance range is due primarily to higher expected depreciation expense and the items described below.

The change in the full year 2019 FFO per share guidance range is due primarily to the items described below.

The change in the full year 2019 Normalized FFO per share guidance range is due primarily to:

 

 

Positive/(Negative)

Impact

 

 

 

 

Revised Full Year 2019 vs.

Previous Full Year 2019

 

 

Property NOI

 

$

0.01

 

 

Interest expense

 

 

0.01

 

 

Other items, including corporate overhead

 

 

(0.01

)

 

Net

 

$

0.01

 

 

Fourth Quarter and Full Year 2019 Earnings and Conference Call

Equity Residential expects to announce its fourth quarter and full year 2019 results on Tuesday, January 28, 2020 and host a conference call to discuss those results at 10:00 a.m. CT on Wednesday, January 29, 2020.

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 rental apartment properties located in urban and high-density suburban communities where today’s renters want to live, work and play. Equity Residential owns or has investments in 308 properties consisting of 80,299 apartment units, primarily located in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver. 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, competition and local government regulation. 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, October 23, 2019 at 10:00 a.m. CT. Please visit the Investor section of the Company’s web site at www.equityapartments.com for the link. A replay of the web cast will be available for two weeks at this site.

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,016,796

 

 

$

1,925,128

 

 

$

685,120

 

 

$

652,677

 

Fee and asset management

 

 

360

 

 

 

563

 

 

 

25

 

 

 

190

 

Total revenues

 

 

2,017,156

 

 

 

1,925,691

 

 

 

685,145

 

 

 

652,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

338,497

 

 

 

322,487

 

 

 

114,966

 

 

 

110,541

 

Real estate taxes and insurance

 

 

270,434

 

 

 

268,784

 

 

 

87,546

 

 

 

87,388

 

Property management

 

 

72,705

 

 

 

69,175

 

 

 

21,940

 

 

 

22,247

 

General and administrative

 

 

41,127

 

 

 

41,420

 

 

 

11,417

 

 

 

12,640

 

Depreciation

 

 

616,201

 

 

 

583,869

 

 

 

211,478

 

 

 

194,618

 

Total expenses

 

 

1,338,964

 

 

 

1,285,735

 

 

 

447,347

 

 

 

427,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

269,400

 

 

 

256,834

 

 

 

130,565

 

 

 

114,672

 

Impairment

 

 

 

 

 

(702

)

 

 

 

 

 

(702

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

947,592

 

 

 

896,088

 

 

 

368,363

 

 

 

339,403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

2,221

 

 

 

14,860

 

 

 

631

 

 

 

7,864

 

Other expenses

 

 

(11,205

)

 

 

(14,871

)

 

 

(2,813

)

 

 

(7,661

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(289,776

)

 

 

(321,454

)

 

 

(85,936

)

 

 

(111,219

)

Amortization of deferred financing costs

 

 

(8,664

)

 

 

(9,054

)

 

 

(2,881

)

 

 

(3,276

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

investments in unconsolidated entities and net gain (loss)

on sales of land parcels

640,168

565,569

277,364

225,111

Income and other tax (expense) benefit

 

 

(749

)

 

 

(767

)

 

 

(265

)

 

 

(280

)

Income (loss) from investments in unconsolidated entities

 

 

66,906

 

 

 

(2,993

)

 

 

(1,152

)

 

 

(985

)

Net gain (loss) on sales of land parcels

 

 

2,077

 

 

 

995

 

 

 

1,899

 

 

 

 

Net income

 

 

708,402

 

 

 

562,804

 

 

 

277,846

 

 

 

223,846

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(25,339

)

 

 

(20,517

)

 

 

(9,910

)

 

 

(8,159

)

Partially Owned Properties

 

 

(2,450

)

 

 

(1,939

)

 

 

(830

)

 

 

(750

)

Net income attributable to controlling interests

 

 

680,613

 

 

 

540,348

 

 

 

267,106

 

 

 

214,937

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Net income available to Common Shares

 

$

678,295

 

 

$

538,030

 

 

$

266,333

 

 

$

214,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.83

 

 

$

1.46

 

 

$

0.72

 

 

$

0.58

 

Weighted average Common Shares outstanding

 

 

370,227

 

 

 

367,920

 

 

 

370,768

 

 

 

368,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.82

 

 

$

1.46

 

 

$

0.71

 

 

$

0.58

 

Weighted average Common Shares outstanding

 

 

386,177

 

 

 

383,433

 

 

 

386,896

 

 

 

383,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

1.7025

 

 

$

1.62

 

 

$

0.5675

 

 

$

0.54

 

Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

708,402

 

 

$

562,804

 

 

$

277,846

 

 

$

223,846

 

Net (income) loss attributable to Noncontrolling Interests – Partially

Owned Properties

 

 

(2,450

)

 

 

(1,939

)

 

 

(830

)

 

 

(750

)

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Net income available to Common Shares and Units

 

 

703,634

 

 

 

558,547

 

 

 

276,243

 

 

 

222,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

616,201

 

 

 

583,869

 

 

 

211,478

 

 

 

194,618

 

Depreciation – Non-real estate additions

 

 

(4,235

)

 

 

(3,397

)

 

 

(1,932

)

 

 

(1,137

)

Depreciation – Partially Owned Properties

 

 

(2,700

)

 

 

(2,837

)

 

 

(898

)

 

 

(904

)

Depreciation – Unconsolidated Properties

 

 

2,385

 

 

 

3,447

 

 

 

613

 

 

 

1,150

 

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

assets

 

 

(69,522

)

 

 

 

 

 

 

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(269,400

)

 

 

(256,834

)

 

 

(130,565

)

 

 

(114,672

)

Noncontrolling Interests share of gain (loss) on sales

of real estate properties

 

 

 

 

 

(284

)

 

 

 

 

 

 

Impairment – operating assets

 

 

 

 

 

702

 

 

 

 

 

 

702

 

FFO available to Common Shares and Units

 

 

976,363

 

 

 

883,213

 

 

 

354,939

 

 

 

302,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see page 25 for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

4,098

 

 

 

3,125

 

 

 

1,111

 

 

 

1,059

 

Debt extinguishment and preferred share redemption (gains)

losses

 

 

11,807

 

 

 

41,142

 

 

 

(4,840

)

 

 

17,603

 

Non-operating asset (gains) losses

 

 

(1,200

)

 

 

(255

)

 

 

(1,452

)

 

 

223

 

Other miscellaneous items

 

 

6,539

 

 

 

(2,608

)

 

 

2,121

 

 

 

(1,138

)

Normalized FFO available to Common Shares and Units

 

$

997,607

 

 

$

924,617

 

 

$

351,879

 

 

$

319,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

978,681

 

 

$

885,531

 

 

$

355,712

 

 

$

302,853

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

FFO available to Common Shares and Units

 

$

976,363

 

 

$

883,213

 

 

$

354,939

 

 

$

302,080

 

FFO per share and Unit – basic

 

$

2.55

 

 

$

2.32

 

 

$

0.93

 

 

$

0.79

 

FFO per share and Unit – diluted

 

$

2.53

 

 

$

2.30

 

 

$

0.92

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

999,925

 

 

$

926,935

 

 

$

352,652

 

 

$

320,600

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Normalized FFO available to Common Shares and Units

 

$

997,607

 

 

$

924,617

 

 

$

351,879

 

 

$

319,827

 

Normalized FFO per share and Unit – basic

 

$

2.60

 

 

$

2.43

 

 

$

0.92

 

 

$

0.84

 

Normalized FFO per share and Unit – diluted

 

$

2.58

 

 

$

2.41

 

 

$

0.91

 

 

$

0.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding – basic

 

 

383,142

 

 

 

380,791

 

 

 

383,709

 

 

 

380,912

 

Weighted average Common Shares and Units outstanding – diluted

 

 

386,177

 

 

 

383,433

 

 

 

386,896

 

 

 

383,884

 

Note: See page 25 for additional detail regarding the adjustments from FFO to Normalized FFO. See pages 27 through 32 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)

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

Land

 

$

5,955,121

 

 

$

5,875,803

 

Depreciable property

 

 

21,168,255

 

 

 

20,435,901

 

Projects under development

 

 

143,434

 

 

 

109,409

 

Land held for development

 

 

91,017

 

 

 

89,909

 

Investment in real estate

 

 

27,357,827

 

 

 

26,511,022

 

Accumulated depreciation

 

 

(7,171,876

)

 

 

(6,696,281

)

Investment in real estate, net

 

 

20,185,951

 

 

 

19,814,741

 

Investments in unconsolidated entities

 

 

52,474

 

 

 

58,349

 

Cash and cash equivalents

 

 

28,777

 

 

 

47,442

 

Restricted deposits

 

 

55,819

 

 

 

68,871

 

Right-of-use assets

 

 

481,044

 

 

 

 

Other assets

 

 

249,991

 

 

 

404,806

 

Total assets

 

$

21,054,056

 

 

$

20,394,209

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

1,962,471

 

 

$

2,385,470

 

Notes, net

 

 

6,675,084

 

 

 

5,933,286

 

Line of credit and commercial paper

 

 

354,381

 

 

 

499,183

 

Accounts payable and accrued expenses

 

 

151,680

 

 

 

102,471

 

Accrued interest payable

 

 

73,747

 

 

 

62,622

 

Lease liabilities

 

 

333,312

 

 

 

 

Other liabilities

 

 

312,849

 

 

 

358,563

 

Security deposits

 

 

70,398

 

 

 

67,258

 

Distributions payable

 

 

218,136

 

 

 

206,601

 

Total liabilities

 

 

10,152,058

 

 

 

9,615,454

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

494,999

 

 

 

379,106

 

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 September 30, 2019 and December 31, 2018

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

1,000,000,000 shares authorized; 371,327,332 shares issued

and outstanding as of September 30, 2019 and 369,405,161

shares issued and outstanding as of December 31, 2018

 

 

3,713

 

 

 

3,694

 

Paid in capital

 

 

8,917,312

 

 

 

8,935,453

 

Retained earnings

 

 

1,308,423

 

 

 

1,261,763

 

Accumulated other comprehensive income (loss)

(84,092

)

(64,986

)

Total shareholders’ equity

 

 

10,182,636

 

 

 

10,173,204

 

Noncontrolling Interests:

 

 

 

 

 

 

 

 

Operating Partnership

 

 

226,065

 

 

 

228,738

 

Partially Owned Properties

 

 

(1,702

)

 

 

(2,293

)

Total Noncontrolling Interests

 

 

224,363

 

 

 

226,445

 

Total equity

 

 

10,406,999

 

 

 

10,399,649

 

Total liabilities and equity

 

$

21,054,056

 

 

$

20,394,209

 

Equity Residential

Portfolio Summary

As of September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

% of

Stabilized

 

 

Average

 

 

 

 

 

 

 

Apartment

 

 

Budgeted

 

 

Rental

 

Markets/Metro Areas

 

Properties

 

 

Units

 

 

NOI

 

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

72

 

 

 

16,603

 

 

 

18.9

%

 

$

2,627

 

Orange County

 

 

13

 

 

 

4,028

 

 

 

4.3

%

 

 

2,276

 

San Diego

 

 

12

 

 

 

3,385

 

 

 

3.8

%

 

 

2,437

 

Subtotal – Southern California

 

 

97

 

 

 

24,016

 

 

 

27.0

%

 

 

2,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

51

 

 

 

13,606

 

 

 

20.6

%

 

 

3,322

 

Washington DC

 

 

49

 

 

 

16,129

 

 

 

16.8

%

 

 

2,451

 

New York

 

 

37

 

 

 

9,606

 

 

 

14.5

%

 

 

3,944

 

Seattle

 

 

43

 

 

 

8,752

 

 

 

9.8

%

 

 

2,446

 

Boston

 

 

25

 

 

 

6,430

 

 

 

9.8

%

 

 

3,168

 

Denver

 

 

5

 

 

 

1,624

 

 

 

1.5

%

 

 

2,071

 

Other Markets

 

 

1

 

 

 

136

 

 

 

%

 

 

1,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

308

 

 

 

80,299

 

 

 

100.0

%

 

$

2,852

 

 

 

 

Properties

 

 

Apartment Units

 

 

 

 

 

 

 

 

 

 

Wholly Owned Properties

 

 

290

 

 

 

76,602

 

Master-Leased Properties – Consolidated

 

 

1

 

 

 

162

 

Partially Owned Properties – Consolidated

 

 

17

 

 

 

3,535

 

 

 

 

 

 

 

 

 

 

 

 

 

308

 

 

 

80,299

 

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

Equity Residential

 

Portfolio Rollforward Q3 2019

($ in thousands)

 

 

 

 

Properties

 

 

Apartment

Units

 

 

Purchase Price

 

 

Acquisition

Cap Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/30/2019

 

 

309

 

 

 

79,624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Properties

 

 

 

 

4

 

 

 

1,084

 

 

$

489,930

 

 

 

4.4

%

Land Parcels

 

 

 

 

 

 

 

 

 

$

3,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

 

Disposition

Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

 

 

(7

)

 

 

(641

)

 

$

(303,925

)

 

 

(4.7

%)

Land Parcels

 

 

 

 

 

 

 

 

 

$

(1,900

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Consolidated

 

 

 

 

2

 

 

 

221

 

 

 

 

 

 

 

 

 

Configuration Changes

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2019

 

 

308

 

 

 

80,299

 

 

 

 

 

 

 

 

 

 

Portfolio Rollforward 2019

($ in thousands)

 

 

 

 

Properties

 

 

Apartment

Units

 

 

Purchase Price

 

 

Acquisition

Cap Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2018

 

 

307

 

 

 

79,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Properties

 

 

 

 

8

 

 

 

2,142

 

 

$

922,080

 

 

 

4.6

%

Rental Properties – Not Stabilized (A)

 

 

 

 

2

 

 

 

586

 

 

$

202,500

 

 

 

4.8

%

Land Parcels

 

 

 

 

 

 

 

 

 

$

19,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

 

Disposition

Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Properties

 

 

 

 

(9

)

 

 

(1,202

)

 

$

(706,675

)

 

 

(4.5

%)

Land Parcels

 

 

 

 

 

 

 

 

 

$

(1,900

)

 

 

 

 

Unconsolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Properties (B)

 

 

 

 

(2

)

 

 

(945

)

 

$

(394,500

)

 

 

(4.7

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Consolidated

 

 

 

 

2

 

 

 

221

 

 

 

 

 

 

 

 

 

Configuration Changes

 

 

 

 

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2019

 

 

308

 

 

 

80,299

 

 

 

 

 

 

 

 

 

(A)

The Company acquired two properties in the Denver market in the nine months ended September 30, 2019 that are in the final stages of completing lease-up and are expected to stabilize in the second year of ownership at the Acquisition Cap Rate listed above.

 

(B)

The Company owned a 20% interest in unconsolidated rental properties located in San Jose, CA and South Florida. Sales price listed is the gross sales price. The Company received net sales proceeds of approximately $78.3 million and recognized a GAAP gain on sale of approximately $69.5 million.

Equity Residential

Third Quarter 2019 vs. Third Quarter 2018

Same Store Results/Statistics for 75,290 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

 

Results

 

 

Statistics

 

Description

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 2019

 

$

649,712

 

 

$

196,520

 

 

$

453,192

 

 

$

2,870

 

 

 

96.5

%

 

 

15.9

%

Q3 2018

 

$

628,454

 

 

$

189,582

 

 

$

438,872

 

 

$

2,782

 

 

 

96.3

%

 

 

16.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

$

21,258

 

 

$

6,938

 

 

$

14,320

 

 

$

88

 

 

 

0.2

%

 

 

(0.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

3.4

%

 

 

3.7

%

 

 

3.3

%

 

 

3.2

%

 

 

 

 

 

 

 

 

Third Quarter 2019 vs. Second Quarter 2019

Same Store Results/Statistics for 77,544 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

 

Results

 

 

Statistics

 

Description

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 2019

 

$

667,190

 

 

$

201,658

 

 

$

465,532

 

 

$

2,862

 

 

 

96.5

%

 

 

16.0

%

Q2 2019

 

$

657,805

 

 

$

195,349

 

 

$

462,456

 

 

$

2,822

 

 

 

96.5

%

 

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

$

9,385

 

 

$

6,309

 

 

$

3,076

 

 

$

40

 

 

 

0.0

%

 

 

2.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

1.4

%

 

 

3.2

%

 

 

0.7

%

 

 

1.4

%

 

 

 

 

 

 

 

 

September YTD 2019 vs. September YTD 2018

Same Store Results/Statistics for 72,979 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

 

Results

 

 

Statistics

 

Description

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YTD 2019

 

$

1,857,679

 

 

$

559,793

 

 

$

1,297,886

 

 

$

2,823

 

 

 

96.5

%

 

 

38.9

%

YTD 2018

 

$

1,798,638

 

 

$

539,070

 

 

$

1,259,568

 

 

$

2,743

 

 

 

96.2

%

 

 

40.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

$

59,041

 

 

$

20,723

 

 

$

38,318

 

 

$

80

 

 

 

0.3

%

 

 

(1.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

3.3

%

 

 

3.8

%

 

 

3.0

%

 

 

2.9

%

 

 

 

 

 

 

 

 

Note: See page 30 for reconciliations from operating income.

Equity Residential

Third Quarter 2019 vs. Third Quarter 2018

Same Store Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year's Quarter

 

Markets/Metro Areas

 

Apartment

Units

 

 

Q3 2019

% of

Actual

NOI

 

 

Q3 2019

Average

Rental

Rate

 

 

Q3 2019

Weighted

Average

Physical

Occupancy %

 

 

Q3 2019

Turnover

 

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

15,968

 

 

 

18.9

%

 

$

2,623

 

 

 

96.6

%

 

 

16.7

%

 

 

3.1

%

 

 

5.7

%

 

 

2.0

%

 

 

3.4

%

 

 

(0.1

%)

 

 

(0.4

%)

Orange County

 

 

4,028

 

 

 

4.5

%

 

 

2,276

 

 

 

96.6

%

 

 

17.3

%

 

 

4.0

%

 

 

2.9

%

 

 

4.4

%

 

 

3.5

%

 

 

0.4

%

 

 

0.4

%

San Diego

 

 

3,385

 

 

 

3.9

%

 

 

2,437

 

 

 

96.6

%

 

 

18.5

%

 

 

3.7

%

 

 

3.4

%

 

 

3.7

%

 

 

3.8

%

 

 

(0.1

%)

 

 

0.4

%

Subtotal – Southern California

 

 

23,381

 

 

 

27.3

%

 

 

2,537

 

 

 

96.6

%

 

 

17.1

%

 

 

3.3

%

 

 

5.0

%

 

 

2.6

%

 

 

3.5

%

 

 

0.0

%

 

 

(0.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

13,082

 

 

 

21.1

%

 

 

3,322

 

 

 

95.8

%

 

 

16.1

%

 

 

4.1

%

 

 

3.3

%

 

 

4.4

%

 

 

3.9

%

 

 

0.0

%

 

 

0.1

%

Washington DC

 

 

15,379

 

 

 

17.0

%

 

 

2,456

 

 

 

96.7

%

 

 

16.2

%

 

 

2.5

%

 

 

0.7

%

 

 

3.3

%

 

 

2.3

%

 

 

0.4

%

 

 

(0.6

%)

New York

 

 

9,475

 

 

 

15.2

%

 

 

3,949

 

 

 

96.9

%

 

 

13.2

%

 

 

2.6

%

 

 

7.0

%

 

 

(0.3

%)

 

 

2.6

%

 

 

0.1

%

 

 

0.2

%

Seattle

 

 

7,963

 

 

 

9.8

%

 

 

2,436

 

 

 

96.5

%

 

 

15.0

%

 

 

4.0

%

 

 

0.2

%

 

 

5.5

%

 

 

2.9

%

 

 

0.9

%

 

 

(0.7

%)

Boston

 

 

5,874

 

 

 

9.5

%

 

 

3,162

 

 

 

96.4

%

 

 

16.0

%

 

 

4.6

%

 

 

0.7

%

 

 

6.2

%

 

 

3.5

%

 

 

0.7

%

 

 

(1.3

%)

Other Markets

 

 

136

 

 

 

0.1

%

 

 

1,288

 

 

 

98.5

%

 

 

14.0

%

 

 

7.3

%

 

 

2.3

%

 

 

9.8

%

 

 

7.2

%

 

 

0.0

%

 

 

1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

75,290

 

 

 

100.0

%

 

$

2,870

 

 

 

96.5

%

 

 

15.9

%

 

 

3.4

%

 

 

3.7

%

 

 

3.3

%

 

 

3.2

%

 

 

0.2

%

 

 

(0.3

%)

Equity Residential

Third Quarter 2019 vs. Second Quarter 2019

Same Store Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Quarter

 

Markets/Metro Areas

 

Apartment

Units

 

 

Q3 2019

% of

Actual

NOI

 

 

Q3 2019

Average

Rental

Rate

 

 

Q3 2019

Weighted

Average

Physical

Occupancy %

 

 

Q3 2019

Turnover

 

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

15,968

 

 

 

18.4

%

 

$

2,623

 

 

 

96.6

%

 

 

16.7

%

 

 

1.1

%

 

 

2.5

%

 

 

0.5

%

 

 

1.0

%

 

 

0.3

%

 

 

2.6

%

Orange County

 

 

4,028

 

 

 

4.4

%

 

 

2,276

 

 

 

96.6

%

 

 

17.3

%

 

 

2.2

%

 

 

6.4

%

 

 

1.0

%

 

 

2.0

%

 

 

0.2

%

 

 

3.6

%

San Diego

 

 

3,385

 

 

 

3.8

%

 

 

2,437

 

 

 

96.6

%

 

 

18.5

%

 

 

1.5

%

 

 

8.2

%

 

 

(0.8

%)

 

 

1.8

%

 

 

(0.1

%)

 

 

4.2

%

Subtotal – Southern California

 

 

23,381

 

 

 

26.6

%

 

 

2,537

 

 

 

96.6

%

 

 

17.1

%

 

 

1.3

%

 

 

3.7

%

 

 

0.4

%

 

 

1.2

%

 

 

0.2

%

 

 

3.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

13,082

 

 

 

20.5

%

 

 

3,322

 

 

 

95.8

%

 

 

16.1

%

 

 

1.3

%

 

 

4.6

%

 

 

0.3

%

 

 

1.4

%

 

 

(0.3

%)

 

 

2.9

%

Washington DC

 

 

15,379

 

 

 

16.5

%

 

 

2,456

 

 

 

96.7

%

 

 

16.2

%

 

 

1.1

%

 

 

4.6

%

 

 

(0.5

%)

 

 

1.2

%

 

 

(0.1

%)

 

 

4.2

%

New York

 

 

9,606

 

 

 

15.1

%

 

 

3,944

 

 

 

96.9

%

 

 

13.3

%

 

 

1.1

%

 

 

2.8

%

 

 

0.0

%

 

 

1.4

%

 

 

(0.2

%)

 

 

3.0

%

Seattle

 

 

8,614

 

 

 

10.3

%

 

 

2,444

 

 

 

96.5

%

 

 

15.1

%

 

 

2.6

%

 

 

(0.7

%)

 

 

3.9

%

 

 

2.5

%

 

 

(0.1

%)

 

 

0.0

%

Boston

 

 

6,346

 

 

 

9.9

%

 

 

3,168

 

 

 

96.4

%

 

 

16.4

%

 

 

2.1

%

 

 

2.6

%

 

 

1.8

%

 

 

1.8

%

 

 

0.0

%

 

 

4.0

%

Other Markets

 

 

1,136

 

 

 

1.1

%

 

 

2,088

 

 

 

96.1

%

 

 

20.2

%

 

 

0.5

%

 

 

(2.3

%)

 

 

1.6

%

 

 

0.2

%

 

 

0.1

%

 

 

3.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

77,544

 

 

 

100.0

%

 

$

2,862

 

 

 

96.5

%

 

 

16.0

%

 

 

1.4

%

 

 

3.2

%

 

 

0.7

%

 

 

1.4

%

 

 

0.0

%

 

 

2.9

%

Equity Residential

September YTD 2019 vs. September YTD 2018

Same Store Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year

 

Markets/Metro Areas

 

Apartment

Units

 

 

Sept.

YTD 19

% of

Actual

NOI

 

 

Sept.

YTD 19

Average

Rental

Rate

 

 

Sept. YTD 19

Weighted

Average

Physical

Occupancy %

 

 

Sept. YTD 19

Turnover

 

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

15,371

 

 

 

19.1

%

 

$

2,604

 

 

 

96.4

%

 

 

42.4

%

 

 

4.1

%

 

 

6.7

%

 

 

3.1

%

 

 

3.9

%

 

 

0.2

%

 

 

(2.2

%)

Orange County

 

 

4,028

 

 

 

4.6

%

 

 

2,241

 

 

 

96.4

%

 

 

41.4

%

 

 

3.9

%

 

 

0.8

%

 

 

4.9

%

 

 

3.4

%

 

 

0.3

%

 

 

(0.7

%)

San Diego

 

 

3,385

 

 

 

4.1

%

 

 

2,401

 

 

 

96.5

%

 

 

44.8

%

 

 

3.6

%

 

 

3.0

%

 

 

3.8

%

 

 

3.4

%

 

 

0.2

%

 

 

(1.9

%)

Subtotal – Southern California

 

 

22,784

 

 

 

27.8

%

 

 

2,510

 

 

 

96.4

%

 

 

42.6

%

 

 

4.0

%

 

 

5.4

%

 

 

3.5

%

 

 

3.8

%

 

 

0.2

%

 

 

(1.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

12,633

 

 

 

21.0

%

 

 

3,241

 

 

 

96.2

%

 

 

38.9

%

 

 

3.9

%

 

 

3.0

%

 

 

4.1

%

 

 

3.8

%

 

 

0.0

%

 

 

(1.0

%)

Washington DC

 

 

15,379

 

 

 

17.6

%

 

 

2,426

 

 

 

96.7

%

 

 

36.6

%

 

 

2.3

%

 

 

1.4

%

 

 

2.7

%

 

 

2.0

%

 

 

0.5

%

 

 

(2.8

%)

New York

 

 

9,235

 

 

 

15.3

%

 

 

3,916

 

 

 

96.8

%

 

 

31.4

%

 

 

2.5

%

 

 

6.8

%

 

 

(0.3

%)

 

 

2.0

%

 

 

0.3

%

 

 

0.4

%

Boston

 

 

5,714

 

 

 

9.5

%

 

 

3,096

 

 

 

96.2

%

 

 

37.7

%

 

 

3.8

%

 

 

2.6

%

 

 

4.3

%

 

 

3.2

%

 

 

0.3

%

 

 

(2.1

%)

Seattle

 

 

7,098

 

 

 

8.7

%

 

 

2,337

 

 

 

96.5

%

 

 

42.3

%

 

 

2.9

%

 

 

(1.3

%)

 

 

4.6

%

 

 

1.9

%

 

 

0.8

%

 

 

(3.1

%)

Other Markets

 

 

136

 

 

 

0.1

%

 

 

1,286

 

 

 

98.8

%

 

 

47.8

%

 

 

7.4

%

 

 

8.2

%

 

 

6.9

%

 

 

7.3

%

 

 

0.1

%

 

 

2.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

72,979

 

 

 

100.0

%

 

$

2,823

 

 

 

96.5

%

 

 

38.9

%

 

 

3.3

%

 

 

3.8

%

 

 

3.0

%

 

 

2.9

%

 

 

0.3

%

 

 

(1.8

%)

Equity Residential

Same Store Lease Pricing Statistics by Market

For 72,979 Same Store Apartment Units

 

 

New Lease Change (1)

 

 

Renewal Rate Achieved (1)

 

 

Markets/Metro Areas

 

Q3 2019

 

 

Q3 2018

 

 

Q3 2019

 

 

Q3 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles (2)

 

 

(0.2

%)

 

 

2.5

%

 

 

5.4

%

 

 

6.4

%

 

Orange County

 

 

(0.2

%)

 

 

0.2

%

 

 

5.5

%

 

 

5.8

%

 

San Diego

 

 

(0.8

%)

 

 

2.0

%

 

 

5.7

%

 

 

6.4

%

 

Subtotal – Southern California

 

 

(0.3

%)

 

 

2.1

%

 

 

5.4

%

 

 

6.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

(0.1

%)

 

 

1.0

%

 

 

5.3

%

 

 

5.3

%

 

Washington DC

 

 

2.7

%

 

 

0.5

%

 

 

4.5

%

 

 

4.5

%

 

New York

 

 

2.2

%

 

 

0.6

%

 

 

3.7

%

 

 

3.4

%

 

Boston

 

 

3.2

%

 

 

2.3

%

 

 

5.5

%

 

 

5.1

%

 

Seattle

 

 

3.2

%

 

 

(0.5

%)

 

 

6.6

%

 

 

5.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

1.2

%

 

 

1.2

%

 

 

5.0

%

 

 

5.0

%

 

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms.

 

(2)

 

The Company’s Q3 2019 New Lease Change in Los Angeles was negatively impacted by temporary governmental restrictions put in place in connection with the wildfire emergency. As a result of these restrictions, the Company was not offering premium short term leases in this market during the period.

Equity Residential

Third Quarter 2019 vs. Third Quarter 2018

Same Store Operating Expenses for 75,290 Same Store Apartment Units

$ in thousands

 

 

Actual

Q3 2019

 

 

Actual

Q3 2018

 

 

$

Change (1)

 

 

%

Change

 

 

% of Actual

Q3 2019

Operating

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate taxes

 

$

82,685

 

 

$

79,339

 

 

$

3,346

 

 

 

4.2

%

 

 

42.1

%

On-site payroll

 

 

42,439

 

 

 

41,335

 

 

 

1,104

 

 

 

2.7

%

 

 

21.6

%

Utilities

 

 

26,829

 

 

 

25,804

 

 

 

1,025

 

 

 

4.0

%

 

 

13.6

%

Repairs and maintenance

 

 

25,723

 

 

 

25,443

 

 

 

280

 

 

 

1.1

%

 

 

13.1

%

Insurance

 

 

5,423

 

 

 

4,957

 

 

 

466

 

 

 

9.4

%

 

 

2.8

%

Leasing and advertising

 

 

2,776

 

 

 

2,819

 

 

 

(43

)

 

 

(1.5

%)

 

 

1.4

%

Other on-site operating expenses

 

 

10,645

 

 

 

9,885

 

 

 

760

 

 

 

7.7

%

 

 

5.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store operating expenses (2)

 

$

196,520

 

 

$

189,582

 

 

$

6,938

 

 

 

3.7

%

 

 

100.0

%

September YTD 2019 vs. September YTD 2018

Same Store Operating Expenses for 72,979 Same Store Apartment Units

$ in thousands

 

 

Actual

YTD 2019

 

 

Actual

YTD 2018

 

 

$

Change (1)

 

 

%

Change

 

 

% of Actual

YTD 2019

Operating

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate taxes

 

$

237,273

 

 

$

228,971

 

 

$

8,302

 

 

 

3.6

%

 

 

42.4

%

On-site payroll

 

 

121,739

 

 

 

117,869

 

 

 

3,870

 

 

 

3.3

%

 

 

21.8

%

Utilities

 

 

74,534

 

 

 

72,717

 

 

 

1,817

 

 

 

2.5

%

 

 

13.3

%

Repairs and maintenance

 

 

71,835

 

 

 

69,589

 

 

 

2,246

 

 

 

3.2

%

 

 

12.8

%

Insurance

 

 

15,778

 

 

 

14,351

 

 

 

1,427

 

 

 

9.9

%

 

 

2.8

%

Leasing and advertising

 

 

7,352

 

 

 

7,460

 

 

 

(108

)

 

 

(1.4

%)

 

 

1.3

%

Other on-site operating expenses

 

 

31,282

 

 

 

28,113

 

 

 

3,169

 

 

 

11.3

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store operating expenses (2)

 

$

559,793

 

 

$

539,070

 

 

$

20,723

 

 

 

3.8

%

 

 

100.0

%

(1)

Both quarter over quarter and YTD over YTD changes (unless otherwise noted) are due primarily to:

 

Real estate taxes – Increase slightly above most recent expectations due primarily to anticipated delays in receiving recoveries from appeals activity.

 

On-site payroll – Increase below expectations. Payroll pressures continue but were somewhat offset by lower than expected employee benefit related costs.

 

Utilities – Quarter over quarter growth slightly higher than expected but in line with expectations for the year.

 

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 ground lease costs due to a contractual revaluation at one property along with higher association fees.

 

(2)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms.

Equity Residential

Debt Summary as of September 30, 2019

($ in thousands)

 

 

Debt

Balances (1)

 

 

% of Total

 

 

Weighted

Average

Rates (1)

 

 

Weighted

Average

Maturities

(years)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured

 

$

1,962,471

 

 

 

21.8

%

 

 

3.90

%

 

 

6.7

 

Unsecured

 

 

7,029,465

 

 

 

78.2

%

 

 

4.14

%

 

 

9.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,991,936

 

 

 

100.0

%

 

 

4.07

%

 

 

9.0

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,576,040

 

 

 

17.5

%

 

 

4.34

%

 

 

4.5

 

Unsecured – Public

 

 

6,675,084

 

 

 

74.3

%

 

 

4.30

%

 

 

10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Rate Debt

 

 

8,251,124

 

 

 

91.8

%

 

 

4.31

%

 

 

9.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

 

6,932

 

 

 

0.1

%

 

 

3.04

%

 

 

2.7

 

Secured – Tax Exempt

 

 

379,499

 

 

 

4.2

%

 

 

2.00

%

 

 

15.4

 

Unsecured – Public

 

 

 

 

 

 

 

 

3.34

%

 

 

 

Unsecured – Revolving Credit Facility

 

 

 

 

 

 

 

 

3.14

%

 

 

2.3

 

Unsecured – Commercial Paper Program (2)

 

 

354,381

 

 

 

3.9

%

 

 

2.61

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating Rate Debt

 

 

740,812

 

 

 

8.2

%

 

 

2.63

%

 

 

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,991,936

 

 

 

100.0

%

 

 

4.07

%

 

 

9.0

 

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details about Debt Balances and Weighted Average Rates.

(2)

At September 30, 2019, the weighted average maturity of commercial paper outstanding was 28 days. The weighted average amount outstanding for the nine months ended September 30, 2019 was approximately $384.7 million.

Note: The Company capitalized interest of approximately $4.8 million and $4.5 million during the nine months ended September 30, 2019 and 2018, respectively. The Company capitalized interest of approximately $2.1 million and $1.6 million during the quarters ended September 30, 2019 and 2018, respectively.

Equity Residential

Debt Maturity Schedule as of September 30, 2019

($ 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

$

1,925

 

 

$

375,000

 

(2)

$

376,925

 

 

 

4.2

%

 

 

3.40

%

 

 

2.31

%

2020

 

 

627,541

 

 

 

 

 

 

627,541

 

 

 

6.9

%

 

 

4.74

%

 

 

4.74

%

2021

 

 

926,404

 

 

 

 

 

 

926,404

 

 

 

10.2

%

 

 

4.64

%

 

 

4.64

%

2022

 

 

264,185

 

 

 

7,593

 

 

 

271,778

 

 

 

3.0

%

 

 

3.25

%

 

 

3.23

%

2023

 

 

1,325,588

 

 

 

3,500

 

 

 

1,329,088

 

 

 

14.6

%

 

 

3.74

%

 

 

3.73

%

2024

 

 

 

 

 

6,100

 

 

 

6,100

 

 

 

0.1

%

 

N/A

 

 

 

1.64

%

2025

 

 

450,000

 

 

 

8,200

 

 

 

458,200

 

 

 

5.0

%

 

 

3.38

%

 

 

3.34

%

2026

 

 

592,025

 

 

 

9,000

 

 

 

601,025

 

 

 

6.6

%

 

 

3.58

%

 

 

3.55

%

2027

 

 

400,000

 

 

 

9,800

 

 

 

409,800

 

 

 

4.5

%

 

 

3.25

%

 

 

3.21

%

2028

 

 

900,000

 

 

 

42,380

 

 

 

942,380

 

 

 

10.4

%

 

 

3.79

%

 

 

3.69

%

2029+

 

 

2,838,970

 

 

 

299,635

 

 

 

3,138,605

 

 

 

34.5

%

 

 

3.65

%

 

 

3.46

%

Subtotal

 

 

8,326,638

 

 

 

761,208

 

 

 

9,087,846

 

 

 

100.0

%

 

 

3.82

%

 

 

3.67

%

Deferred Financing Costs and Unamortized (Discount)

 

 

(75,514

)

 

 

(20,396

)

 

 

(95,910

)

 

N/A

 

 

N/A

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,251,124

 

 

$

740,812

 

 

$

8,991,936

 

 

 

100.0

%

 

 

3.82

%

 

 

3.67

%

(1)

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

(2)

Includes $355.0 million in principal outstanding on the Company’s commercial paper program.

Equity Residential

Selected Unsecured Public Debt Covenants

 

 

 

September 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

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

 

33.9%

 

 

34.5%

 

 

 

 

 

 

 

 

 

 

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

 

8.3%

 

 

10.5%

 

 

 

 

 

 

 

 

 

 

Consolidated Income Available for Debt Service to

Maximum Annual Service Charges

(must be at least 1.5 to 1)

 

 

4.75

 

 

 

4.40

 

 

 

 

 

 

 

 

 

 

Total Unencumbered Assets to Unsecured Debt

(must be at least 125%)

 

385.3%

 

 

390.5%

 

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

 

 

 

September 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

Total debt to Normalized EBITDAre

 

5.22x

 

 

5.40x

 

 

 

 

 

 

 

 

 

 

Net debt to Normalized EBITDAre

 

5.20x

 

 

5.24x

 

 

 

 

 

 

 

 

 

 

Unencumbered NOI as a % of total NOI

 

86.9%

 

 

81.8%

 

Note: See page 24 for the Normalized EBITDAre reconciliations.

Equity Residential

Capital Structure as of September 30, 2019

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

 

Secured Debt

 

 

 

 

 

 

 

 

 

$

1,962,471

 

 

 

21.8

%

 

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

 

 

7,029,465

 

 

 

78.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

 

 

 

 

 

 

 

 

 

8,991,936

 

 

 

100.0

%

 

 

21.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares (includes Restricted Shares)

 

 

371,327,332

 

 

 

96.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

13,749,690

 

 

 

3.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

385,077,022

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Price at September 30, 2019

 

$

86.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,216,744

 

 

 

99.9

%

 

 

 

 

Perpetual Preferred Equity (see below)

 

 

 

 

 

 

 

 

 

 

37,280

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

 

 

 

 

 

 

 

 

33,254,024

 

 

 

100.0

%

 

 

78.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

 

 

 

 

 

 

 

 

$

42,245,960

 

 

 

 

 

 

 

100.0

%

Perpetual Preferred Equity as of September 30, 2019

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

 

Series

 

Call Date

 

Outstanding

Shares

 

 

Liquidation

Value

 

 

Annual

Dividend

Per Share

 

 

Annual

Dividend

Amount

 

Preferred Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.29% Series K

 

12/10/26

 

 

745,600

 

 

$

37,280

 

 

$

4.145

 

 

$

3,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Residential

Common Share and Unit

Weighted Average Amounts Outstanding

 

 

Sept. YTD 2019

Sept. YTD 2018

Q3 2019

Q3 2018

 

 

 

 

 

Weighted Average Amounts Outstanding for Net Income Purposes:

 

 

 

 

Common Shares - basic

370,226,966

367,920,066

370,767,761

368,027,460

Shares issuable from assumed conversion/vesting of:

 

 

 

 

- OP Units

12,915,512

12,870,672

12,941,406

12,884,106

- long-term compensation shares/units

3,034,089

2,642,057

3,186,671

2,972,021

 

 

 

 

 

Total Common Shares and Units - diluted

386,176,567

383,432,795

386,895,838

383,883,587

 

 

 

 

 

Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:

 

 

 

 

Common Shares - basic

370,226,966

367,920,066

370,767,761

368,027,460

OP Units - basic

12,915,512

12,870,672

12,941,406

12,884,106

 

 

 

 

 

Total Common Shares and OP Units - basic

383,142,478

380,790,738

383,709,167

380,911,566

Shares issuable from assumed conversion/vesting of:

 

 

 

 

- long-term compensation shares/units

3,034,089

2,642,057

3,186,671

2,972,021

 

 

 

 

 

Total Common Shares and Units - diluted

386,176,567

383,432,795

386,895,838

383,883,587

 

 

 

 

 

Period Ending Amounts Outstanding:

 

 

 

 

Common Shares (includes Restricted Shares)

371,327,332

368,409,586

 

 

Units (includes OP Units and Restricted Units)

13,749,690

14,023,002

 

 

 

 

 

 

 

Total Shares and Units

385,077,022

382,432,588

 

 

Equity Residential

Development and Lease-Up Projects as of September 30, 2019

(Amounts in thousands except for project and apartment unit amounts)

 

 

 

 

 

 

 

 

Total

 

 

Total

 

 

Total Book

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No. of

 

 

Budgeted

 

 

Book

 

 

Value Not