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Equity Residential EQR

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Equity Residential's Second-Quarter Results Down as Expected; Rent Concessions Keeping Occupancy Up

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Second-quarter results for Equity Residential were down sequentially as expected, and we will not make any significant changes to our $78 fair value estimate for the no-moat firm. While the second quarter typically sees sequential occupancy gain, same-store occupancy declined 1.6% from the first quarter to 94.9%, with every market showing some level of decline. Equity Residential managed to keep year-over-year rate growth positive at 0.8%, but the loss in occupancy led to a same-store revenue decline of 0.9%. Same-store expenses stayed flat for the quarter, so same-store net operating income declined 1.2% for the second quarter. As a result, the company reported normalized funds from operations of $0.86 per share, in line with the figure reported in the second quarter of 2019 and 1% lower than the figure reported in the first quarter of 2020.

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Company Profile

Business Description

Equity Residential owns a portfolio of 309 apartment communities with around 80,000 units and is developing five additional properties with 1,045 units. The company focuses on owning large, high-quality properties in the urban and suburban submarkets of Southern California, San Francisco, Washington, D.C., New York, Seattle, and Boston.

Two North Riverside Plaza, Suite 400
Chicago, IL, 60606
T +1 312 474-1300
Sector Real Estate
Industry REIT - Residential
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 2,700