BofA Securities Debt Capital Markets Conference
November 2021
2021 Gold Nareit | Chloe on Madison - Seattle, WA | LEED Home Platinum | |
Corporate Diversity, | Winner of the U.S. Green Building Council 2021 LEED | |
Equity and Inclusion | ||
Sector Leader 2021 | 1 | |
Award Recipient | Homes Award for Outstanding Multifamily Project | |
Equity Residential Highlights
307
Properties 79,322 Apartment Units
Founded and Chaired by Sam Zell
87%
Unencumbered
NOI as a % of
Total NOI
Premier
Owner and
Operator of
Residential
Properties
Located in
and Around
Dynamic
Cities That
Attract High
Quality
Long-Term
Renters
S&P 500 Company
$1.4 Billion in
Annual
Normalized
EBITDAre
Sold $11.6 Billion
of Apartment Properties Producing Unlevered IRR of 11.2% since the beginning of 2015
$39.6 Billion
Total Market
Capitalization
Over $2.4
Billion in
Annual Revenue
4.9x Fixed Charge Coverage
12.6% Annual Total
Shareholder Return
Since 1993 IPO
4-Star Rated by
GRESB
One of the Strongest Balance Sheets in
the REIT Sector A-/A3/A Rated
2
Note: As of 9/30/21. Please see Glossary of Terms and Reconciliations.
What Makes Equity Residential a Leader in Multifamily?
Robust Post Pandemic
Outlook
Strategic Capital Allocation
Leading Operating Platform
Differentiated
Development Model
Financial Strength
- Well positioned for recovery in 2022 with 13.6% Loss to Lease (net effective), favorable resident demand outlook, and a track record of strong recovery post downturns.
- Diversification into new markets through attractive and non-dilutive capital recycling.
- Industry-leadingefficiency in on-site operations.
- Demonstrated leader in harnessing technology to drive innovation.
- Toll Brothers' strategic partnership and in-house development pipeline is expected to eventually deliver $1.0B+ in annual completions at attractive yields with modest overhead and reduced risk.
- Strong credit metrics create balance sheet capacity and financial flexibility to drive growth.
Durable Cash Flow Growth with Strong Capital Appreciation.
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Performance Update
While Pricing Trend has begun moderating in line with typical
seasonal patterns, overall pricing levels remain strong.
Pricing Trend
$3,100
$2,900
Jan 2019- Oct 2020 | Jan 2020- Oct 2021 |
Pricing Trend has moderated consistent with typical seasonal
trends while remaining above pre-pandemic levels.
$2,700
$2,500
$2,300
$2,100
Jan Feb Mar Apr May Jun | Jul | Aug Sep Oct Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct |
(month end 2020-2021) | $2,281 | $2,380 | $2,409 | $2,489 | $2,623 | $2,704 | $2,894 | $3,019 | $2,974 | $2,947 | $2,918 | ||
- Pricing Trend (which includes the impact of Leasing Concessions) has seen a 28% sequential improvement since December 2020 and is solidly above pre-pandemic rent levels.
- Pricing Trend has declined recently consistent with normal seasonal patterns and our prior expectations.
- Monthly residential Leasing Concessions granted have dramatically declined. Residential Leasing Concessions granted in July 2021 were $1.5M, August 2021 were $510K, September 2021 were $167K and October 2021 is expected to be less than $50K. In October 2020, Residential Leasing Concessions were $5.1M.
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Note: Data presented as of 10/21/2021. Reflects 2021 Same Store Properties. Charts and data for October 2021 are preliminary.
Future Performance
We expect to see meaningful growth as in-place leases expire and are renewed over the course of next year at or close
to the current market prices.
- Current rent levels imply meaningful revenue growth as in-place leases expire and are renewed or replaced at market levels. This "Loss to Lease" will be a primary driver of 2022 performance.
- EQR's in-place lease rates are approximately 12.6% below market prices (13.6% net of Leasing Concessions) as of October 2021.
Historical Gross Loss to Lease Comparison Before Leasing Concessions (1)
Above
Below
Leases Below Market (%)
100%
80%
60%
40%
20%45%
0% 0.6%
-20%
54%
-40%
-60%
-80%
-100%
2018
Leases Above Market (%) | Total In Place Lease Price Compared to Market Price ("Loss to Lease") (1) | ||||
15% | |||||
9.1% | |||||
10% | |||||
74% | 5% | ||||
45% | |||||
14% | 0% | ||||
-0.8% | |||||
25% | |||||
54% | -5% | ||||
86% | |||||
-10% | |||||
-12.6% | -15% | ||||
2019 | 2020 | 2021 |
Note: Data presented as of 10/21/21 and reflects leases from Same Store Properties.
(1) Includes leases above, below and at market pricing.
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Equity Residential published this content on 18 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 November 2021 15:12:06 UTC.