Apartment REITs Steady as Earnings Season Begins

Equity Residential anticipates same-store revenue growth “towards the upper end of our original guidance,” CEO David J. Neithercut said this week.

NEW YORK CITY—In a survey of the REIT landscape heading into second-quarter earnings season that was posted to Seeking Alpha earlier this week, analyst Dane Bowler of 2nd Market Capital Advisory Corp. summed up his feelings about multifamily trusts: “overall steady fundamentals with slow to moderate same-store growth. Healthy demand will be weakened by supply, particularly in top 25 MSAs. Location will be the primary desideratum of an apartment’s success.” The first wave of Q2 reports from the major apartment REITs generally squares with this assessment.

Apartment Investment and Management Co., better known as Aimco (AIV), reported same-store NOI growth of 4.9% late Thursday afternoon, along with adjusted funds from operations of 51 cents per share, three cents ahead of the midpoint on its AFFO guidance for Q2. Prior to the earnings announcement, Zacks Investment Management pointed to AIV’s “solid portfolio diversified both in terms of geography and high priced units,” and noted that the Denver-based company has been revamping that portfolio through dispositions and reinvestment of the proceeds. “This is likely to enhance the quality and expected growth rate of its portfolio” for Q2.