- 2026 Same-Store Revenue Growth Guidance: 1.5%-3% growth driven by declining new supply and steady job growth, with midpoint aligned to 2025's back-half demand trends.
- Strong Portfolio Occupancy: Maintained over 96% occupancy in 2025, with expectations to sustain this in 2026 despite a 0.5% blended rate growth due to 4.5% renewal rates offsetting new lease declines.
- Capital Returns to Shareholders: Returned $1.3B in 2025 via dividends and buybacks, including $300M in stock repurchases, with $500M net sales proceeds offset by share repurchase benefits in 2026.
- Norm FFO Per Share Outlook: Expected to rise 2.25% to $4.08 in 2026, driven by $0.06 from lease-ups and $0.01 from non-same-store NOI, despite $0.06 drag from asset sales and $0.05 interest expense headwind.
- Debt and Credit Profile: Closed 2025 with 4.3x net debt to normalized EBITDAre and received S&P's positive outlook, targeting $500M–$1B debt issuance for refinancing and capital flexibility in 2026.
Financial Performance
The company's financial performance was marked by a blended rate of 0.5% in the quarter, driven by a strong achieved renewal rate of 4.5% offset by negative new lease rates. For 2026, the company expects same-store revenue growth to be between 1.5% and 3%, driven by a decline in new supply and steady job growth. Analysts estimate next year's revenue growth at 3.4%, indicating a slight increase in growth rate.
Valuation Metrics
Equity Residential's current valuation metrics indicate a P/E Ratio of 21.5, a P/B Ratio of 2.24, and a Dividend Yield of 4.34%. The company's Net Debt to EBITDAre ratio is 4.3x, indicating a manageable level of debt. The EV/EBITDA ratio is 15.79, suggesting a reasonable valuation.
Guidance and Outlook
The company expects norm FFO per share of $4.08 in 2026, a 2.25% improvement over 2025. The company's guidance assumes steady demand similar to the back half of 2025. The company also expects same-store expense growth to range between 3% to 4% in 2026, with a midpoint that is 20 basis points lower than 2025.
Capital Allocation
The company returned over $1.3 billion to shareholders in 2025 through dividend payments and stock repurchases. The company expects to continue this trend in 2026, with a focus on investing in share repurchases. The company's flexible approach to transactions is expected to continue, with a focus on selling non-core assets to improve the growth rate of its existing portfolio.
Market Trends
The company sees strength in San Francisco and New York, with rents expected to rise in these markets. The company's portfolio is currently 1.2% above lease, but this is expected to change as rents continue to rise. The company is cautious about accelerating capital deployment in the Sunbelt markets, citing its cost of capital and the relative attractiveness of share buybacks.