Summary
Equity Residential (EQR) reported strong performance in its first quarter of 2013, largely driven by the successful completion and integration of the significant Archstone acquisition. This strategic move has substantially reshaped the company's portfolio, focusing it more intensely on high-barrier-to-entry coastal markets. While the integration process incurred substantial merger-related expenses, the acquired properties, particularly stabilized Archstone assets, are contributing positively to Net Operating Income (NOI). The company also actively managed its portfolio by disposing of non-core assets to fund acquisitions and reduce debt, though this disposition activity temporarily impacted per-share results. Liquidity remains robust, supported by strong availability on its revolving credit facility and proceeds from asset sales. EQR is strategically repositioning its portfolio, emphasizing growth markets and operational efficiency. Despite an anticipated increase in expenses, primarily due to rising real estate taxes, the company forecasts continued growth in same-store revenue and NOI for the remainder of 2013, underscoring a positive outlook based on favorable demographics and housing market trends.
Financial Highlights
35 data points| Revenue | $504.72M |
| Operating Expenses | $400.48M |
| Operating Income | $104.25M |
| Interest Expense | $194.47M |
| Net Income | $1.02B |
| EPS (Basic) | $3.01 |
| EPS (Diluted) | $3.01 |
| Shares Outstanding (Basic) | 337.53M |
| Shares Outstanding (Diluted) | 337.53M |
Key Highlights
- 1Completed the significant Archstone acquisition, integrating 72 consolidated properties (20,592 units) and contributing positively to NOI, despite associated merger expenses.
- 2Actively managed portfolio by selling $3.0 billion in non-core assets during Q1 2013, with plans for $4.0 billion in dispositions for the full year, to fund the Archstone transaction and reduce debt.
- 3Reported a substantial increase in diluted earnings per share to $3.01 in Q1 2013 from $0.47 in Q1 2012, driven by property sale gains and improved NOI from stabilized properties.
- 4Experienced a 5.1% increase in same-store revenues and a 6.3% increase in same-store NOI for Q1 2013 compared to Q1 2012, with average rental rates up 4.7%.
- 5Maintained strong liquidity with approximately $2.07 billion available on its revolving credit facility as of March 31, 2013, and secured a new $2.5 billion unsecured revolving credit facility.
- 6Anticipates continued growth in same-store revenue (4.0%-5.0%) and NOI (4.5%-6.0%) for the full year 2013, driven by rising rents and strong occupancy.
- 7Portfolio concentration has shifted further towards core coastal markets, with these markets now representing 92.0% of stabilized NOI, up from 85.7% in late 2012.