EQUITY RESIDENTIAL
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
VMRK$65.51+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0000950170-24-120716
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0000950170-25-061082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsAvailable InformationBusiness Objectives and Operating and Investing StrategiesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 9 current paragraphs.
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Tables are not compared: 9 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Available Information
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Results of Operations
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2024 Transactions
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In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the nine months ended September 30, 2024:
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Portfolio Rollforward
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($ in thousands)
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Acquisitions
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The consolidated properties acquired during the nine months ended September 30, 2024 are located in the Atlanta (5), Boston, Dallas/Ft. Worth (5) and Denver (4) markets.
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Dispositions
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The consolidated properties disposed of during the nine months ended September 30, 2024 were located in the Boston, Orange County, San Francisco (2) and Washington, D.C. (2) markets.
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Developments
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Consolidated:
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The Company commenced construction on one partially owned consolidated apartment property during the nine months ended September 30, 2024, located in the Boston market, consisting of 440 apartment units totaling approximately $232.2 million of expected development costs;
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The Company stabilized one partially owned consolidated apartment property during the nine months ended September 30, 2024, located in the Washington, D.C. market, consisting of 312 apartment units totaling approximately $106.0 million of development costs; and
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The Company spent approximately $90.7 million during the nine months ended September 30, 2024, primarily for consolidated development projects.
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Unconsolidated:
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The Company completed construction on one unconsolidated apartment property during the nine months ended September 30, 2024, located in the Denver market, consisting of 209 apartment units totaling approximately $70.0 million of development costs;
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The Company spent approximately $75.6 million during the nine months ended September 30, 2024, primarily for unconsolidated development projects; and
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The Company previously entered into two separate unconsolidated joint ventures for the purpose of developing vacant land parcels in the Boston and Seattle markets. During the nine months ended September 30, 2024, the joint ventures acquired their respective land parcels for the total purchase price listed above. The Company commenced construction on these two apartment properties, which are expected to contain 639 total apartment units. Total expected development cost for these projects is $307.2 million, and the Company's total investment in these two joint ventures is approximately
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$69.0 million as of September 30, 2024.
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See Notes 4 and 5 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate investments and investments in partially owned entities.
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Comparison of the nine months and quarter ended September 30, 2024 to the nine months and quarter ended September 30, 2023
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The following table presents a reconciliation of diluted earnings per share/unit for the nine months and quarter ended September 30, 2024 as compared to the same periods in 2023:
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Corporate overhead includes property management and general and administrative expenses.
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The Company’s primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents rental income less direct property operating expenses (including real estate taxes and insurance). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties.
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The following tables present reconciliations of net income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (amounts in thousands):
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Note: See Note 12 in the Notes to Consolidated Financial Statements for detail by reportable segment/market.
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The increase in same store rental income is primarily driven by good demand and modest supply across most of our markets.
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The increase in year-to-date same store operating expenses is due primarily to:
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Real estate taxes – An $8.0 million increase due to escalation in rates and assessed values including an approximately one percentage point contribution to growth from 421-a tax abatement burnoffs in New York City. Once the burnoffs are completed, previously rent-restricted apartment units will transition to market;
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Other on-site operating expenses – A $2.6 million increase primarily driven by higher property-related legal expenses;
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Insurance – A $2.5 million increase due to higher premiums on property insurance renewal due to conditions in the insurance market that while less difficult than recent years, remain challenging; and
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Utilities – A $1.7 million increase primarily driven by higher water, sewer and trash expense, partially offset by lower commodity prices for gas and electric.
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Non-same store/other NOI results consist primarily of properties acquired in calendar years 2023 and 2024, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 2023 and 2024 sold properties.
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The increase in consolidated total NOI is primarily a result of the Company’s higher NOI from same store properties, largely due to improvement in same store revenues as noted above and the Company's continued focus on same store expense efficiency.
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See the Same Store Results section below for additional discussion of those results. See the reconciliation table of net income per the consolidated statements of operations to NOI above for the dollar and percentage changes related to the comparison discussions provided below.
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Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies. The increases during the nine months and quarter ended September 30, 2024 as compared to the prior year periods are primarily attributable to increases in payroll-related costs, information technology expenses and legal and professional fees.
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General and administrative expenses, which include corporate operating expenses, decreased during the nine months ended September 30, 2024 as compared to the prior year period, primarily due to decreases in payroll-related costs, partially offset by increases in other public company costs. General and administrative expenses increased during the quarter ended September 30, 2024 as compared to the prior year period, primarily due to increases in travel costs and other public company expenses.
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Depreciation expense, which includes depreciation on non-real estate assets, increased during the nine months and quarter ended September 30, 2024 as compared to the prior year periods, primarily as a result of additional depreciation expense on properties acquired in 2023 and 2024 and development properties placed in service during 2023 and 2024, partially offset by lower depreciation from properties sold in 2023 and 2024.
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Business Objectives and Operating and Investing Strategies
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EQR issues equity and guarantees certain debt of the Operating Partnership from time to time. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.