Equity Residential Credits NYC, San Fran for Positive Q1

Equity Residential is especially grateful for New York City and San Francisco.

Executives at the urban multifamily-focused real estate investment trust with 312 properties and more than 85,000 apartments said during a first-quarter earnings call Wednesday morning that the two markets accounted for roughly 30 percent of its net operating income (NOI). Other markets such as Seattle and Denver might have their struggles, but the Big Apple and the City by the Bay are coming in hot when it comes to apartment rent growth and tenants who can afford it. 

“Our substantial exposure to the well-performing San Francisco and New York markets drove operating performance in the first quarter that exceeded our expectations,” Equity Residential CEO and President Mark Parrell said on the call. “These two markets are characterized by strong demand from our target higher-earning renter demographic for our well-located apartment homes and modest levels of new supply.”

Those characteristics fueled a generally positive first-quarter performance. 

That NOI, for instance, clocked in at around $513.2 million, up from $505.1 million in the first quarter of 2025. Funds from operations (FFO), a key financial metric for REITs, was $341.3 million in the first quarter, down from $369.3 million in the year-ago period. Same-store revenue — returns from Equity Residential’s existing properties — was up 2.2 percent annually, however, to $746.5 million. 

Also, the Chicago-based REIT beat analysts’ estimates for FFO per share. That clocked in at 99 cents per share for the quarter, above estimates of 95 cents. Occupancy was up slightly, too — 96.5 percent in the first quarter of 2026 versus 96.4 percent in the same period in 2025. 

Equity Residential executives credited a strong U.S. economy, a preference for renting in higher-cost markets and the nation’s general housing shortage for the positive figures. As for the not-so-good figures, overbuilding in some markets and financial concessions to draw tenants into leases were to blame. 

Going into the rest of 2026, the company appears to be in a holding pattern: Equity Residential did not sell or acquire any assets in the first quarter, Parell said. 

“With new apartment supply levels set to decline for the foreseeable future across all our markets, we are continuing to see concessions decline, which provides the setup for pricing power in the latter half of the year,” he said. “[W]e expect revenue performance to improve more broadly across our portfolio as the job market accelerates.”

Tom Acitelli can be reached at tacitelli@commercialobserver.com.