Equity Residential Q3 FFO Meets Estimates, Rental Income Rises Y/Y

Equity Residential EQR reported third-quarter 2025 normalized funds from operations (FFO) per share of $1.02, which met the Zacks Consensus Estimate. The figure improved 4.1% from the year-ago quarter.

Results reflect a rise in same-store revenues and physical occupancy on a year-over-year basis. The company revised its guidance for 2025 normalized FFO per share.

Rental income of $782.4 million outpaced the consensus mark of $781.4 million. Rental income was up 4.6% year over year.

According to Mark J. Parrell, Equity Residential’s president and CEO, “We continue to see a favorable outlook for our business given the low levels of housing supply expected to be Table of Contents 2 delivered over the next several years, particularly in our Coastal markets, powerful cost and social dynamics favoring rentership and a customer base that remains well employed with rising incomes.”

EQR’s Q3 in Detail

Same-store revenues were up 3% year over year, above our estimate of 1.9%. Same-store expenses flared up 3.6% year over year versus our estimate of 2.2%. Consequently, same-store net operating income (NOI) climbed 2.8% year over year, above our estimate of 1.7%.

The average rental rate increased 2.7% year over year to $3,218 in the quarter ended in September. Meanwhile, the same-store portfolio physical occupancy improved by 20 basis points (bps) year over year at 96.3%. Our estimate for the metric was 96.4%.

Same-store residential revenues were up 3% year over year, while expenses increased 3.4%. Same-store residential NOI expanded 2.7% year over year.

The new lease change for its residential same-store properties was down 1.0%, while the renewal rate achieved by EQR was 4.5% for the third quarter. The blended rate for the quarter was 2.2%. The physical occupancy for this portfolio was 96.3%, improved 30 bps sequentially.

EQR’s Portfolio Activity

In the third quarter of 2025, Equity Residential acquired a 375-unit property located in Arlington, TX, for nearly $103 million. Moreover, the company sold two properties, one in suburban Boston and one in Arlington, VA, for an aggregate sale price of around $247.9 million.

EQR’s Balance Sheet

Equity Residential exited the third quarter of 2025 with cash and cash equivalents of $93.1 million, up from $31.3 million recorded as of June 30, 2025.

The net debt to normalized EBITDAre was 4.41X, which decreased from 4.45X in the previous quarter. The unencumbered NOI as a percentage of the total NOI was 90.4% in the quarter, remaining unchanged from the prior quarter.

EQR Revises 2025 Guidance

For the fourth quarter of 2025, the company projects normalized FFO per share in the band of $1.02 to $1.06. The Zacks Consensus Estimate is currently pegged at $1.04.

For 2025, Equity Residential revised its normalized FFO per share in the band of $3.98-$4.02, compared to the $3.97-$4.03 range guided earlier. The Zacks Consensus Estimate is currently pegged at $4.00.

The company’s full-year guidance incorporates projections for same-store revenue growth of 2.5-3.0%, an expense increase of 3.5-4.0%, and an NOI expansion of 2.1-2.6%. Physical occupancy is expected at 96.4%.

EQR’s Zacks Rank

Equity Residential currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equity Residential Price, Consensus and EPS Surprise

Equity Residential price-consensus-eps-surprise-chart | Equity Residential Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of residential REITs like American Homes 4 Rent AMH and Centerspace CSR, slated to report on Oct. 29 and Nov. 3, respectively.

The Zacks Consensus Estimate for American Homes 4 Rent’s third-quarter 2025 FFO per share stands at 46 cents, which indicates 4.6% growth year over year. AMH currently has a Zacks Rank #3.

The Zacks Consensus Estimate for Centerspace’s third-quarter 2025 FFO per share is pegged at $1.22, which implies a 3.4% year-over-year increase. CSR currently carries a Zacks Rank #3.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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