Equity Residential Reports Declines in Earnings as Tenants Flee Core Urban Markets
The COVID-19 crisis has accelerated a trend that was already in place: the exodus from the cities into the suburbs. Younger adults had previously expressed an interest in walkable urban environments, but this appears to have been a temporary phenomenon. Equity Residential (NYSE: EQR) owns and manages apartments in large urban centers and the suburbs. What did one of America's largest apartment REITs have to say when it reported third-quarter earnings?
Equity Residential reported earnings per share of $0.24 under generally accepted accounting principles (GAAP) versus $0.71 a year ago. Funds from operations, a more REIT-specific measure of earnings, came in at $0.76 per share versus $0.92 a year ago. Equity Residential was reasonably sanguine after reporting second-quarter earnings, as demand (and collections) were more stable than expected. Unfortunately, the economic environment was not the only issue; urban environments overall were falling out of favor. This caught up to the company in the third quarter as occupancy fell and the company had to resort to rent concessions to keep apartments rented.
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Source Fool.com
