Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-Equity Residential is spending more on property maintenance and capital improvements in an attempt to regain occupancy. Maintenance and capital expenses, including salaries, totaled $86.5 million in the first quarter, an average of more than $400 per unit for the first quarter.

In addition, Equity Residential is rolling out a new marketing campaign that in addition with more aggressive newspaper advertising, includes increased leasing incentives to its staff. That cost, though, is minimal compared to the amount being spent to spruce up properties.

The REIT spent about $1,600 per unit on property maintenance and capital expenses, but expects that to rise this year as it aims to increase market share, says president and CEO Bruce W. Duncan.

Interiors are getting renovated before new tenants move in, and landscaping is being improved at Equity Residential’s complexes, Duncan offers as examples.

“We thought we had an opportunity to make our properties look better and more competitive in the marketplace,” Duncan adds.

Occupancy across the 221,249-unit portfolio stood at 92.5% at the beginning of April, according to Equity Residential’s first-quarter report.

Meanwhile, Equity Residential sold 17 properties in the first quarter for $195 million, putting the REIT on track to meet its goal of selling $700 million in properties this year. Another $261 million in deals are under contract or letters of intent, Duncan adds.

On the other hand, the REIT’s three first-quarter acquisitions totaled $111.5 million, with another $159 million under contract or letter of intent. The REIT’s 2003 goal is $500 million in acquisitions.

“We have not seen the opportunities, in terms of pricing, that we thought we would see,” Duncan says.

The sales were at an overall capitalization rate of 7.6%, while Equity Residential bought its three newest properties at a 7.0% cap rate.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS Fall 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.