Equity Residential : Says Consumers Become More Price Sensitive Following Covid-19 Shut Downs

By Micah Maidenberg

Equity Residential said it collected on average 97% of rents for the second quarter, a pace that comes as the economy grapples with a recovery from coronavirus-related shut downs earlier this year.

Equity on Tuesday said it saw a recovery in demand by late May, with initial tenant leads, traffic and applications in-line with a year earlier. Still, the company's units became a bit less full in the quarter as would-be renters watched costs carefully.

"We see good demand for our apartments, both urban and suburban, but with increased customer price sensitivity, especially in the urban cores of New York, San Francisco and Boston," said Chief Executive Mark Parrell.

Physically occupancies across its portfolio, on a comparable basis, fell to 94.9% from 96.5% the year earlier.

Rental income for the quarter slipped to $653.5 million from $669.4 million.

"Looking forward, we believe the rate of improvement in our business will be dictated by how effectively the virus can be controlled and more normal economic activity restored," Mr. Parnell said.

The Chicago-based landlord said second-quarter net income fell to $271.5 million from $321.3 million. Earnings per share dropped to 70 cents from 83 cents in the second quarter in 2019.

Equity reported funds from operations, after adjustments, of 86 cents a share for the quarter, flat year over year. Funds from operations is an earnings metric used by landlords that strips out gains or losses from property sales, among other adjustments.

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