X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the multifamily market, click here.)

(To read more on the debt and equity markets, click here.)

CHICAGO-Equity Residential is enjoying the best of both multifamily worlds this summer. While the pendulum has begun to swing back toward rental property operators, REIT officials are reaping the benefits from sales of assets, including condominiums of its own and joint venture properties.

Thanks to two deals in New York City and Seattle that came directly to the REIT, Equity Residential now expects 2005 acquisitions to total $2 billion, with $1.4 billion in sales of assets. Meanwhile, gains on condominium sales are expected to top $65 million this year, up from the company’s previous $50-million projection. Equity Residential sold 434 units in the second quarter for $106.4 million.

With a 3% increase in revenue in the second quarter, leasing agents are not seeing the usual summer slowdown in traffic, chief executive officer Bruce W. Duncan notes, suggesting the run-up in home prices may be making renting more attractive. “Our rents on average are not where they were in 2001,” Duncan says. “They’re growing, and they could grow more.”

Closer to home, the REIT has sold 96 units at its Four Lakes complex in west suburban Lisle, far enough from Downtown to be affected by a potential condo bubbles, company officials believe. With an average sales price of $144,000, the units are hitting a “starter home” market, Duncan suggests. “What you’re reading about Downtown Chicago will have no impact,” he says during the company’s recent earnings conference call.

The 14 second-quarter deals totaling 3,320 units and $218.7 million were at an internal rate of return of 10.3%, reports president David J. Neitherercut. “There continues to be a great amount of demand for our assets,” Duncan adds.

Assets in the second-quarter sales averaged 19 years in age, Neitherercut says, in markets such as Charlotte, NC; Dallas; Memphis; Raleigh-Durham, NC; St. Louis; and Tulsa, OK.

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

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.