Equity Residential (EQR) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 26, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Equity Residential 1Q '23 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Martin McKenna. Please go ahead, sir.

Martin McKenna - First VP, Investor & Public Relations

Good morning, and thanks for joining us to discuss Equity Residential's first quarter 2023 results. Our featured speakers today are Mark Parrell, our President and CEO and Michael Manelis, our Chief Operating Officer. Bob Garechana, our Chief Financial Officer and Alex Brackenridge, our Chief Investment Officer are here with us as well for the Q&A. Our earnings release is posted in the Investors section of equityapartments.com. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of the federal securities laws.

These forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement these statements that become untrue because of subsequent events.

Now I will turn the call over to Mark Parrell - President, CEO & Trustee.

Mark Parrell - President, CEO & Trustee

Thank you, Marty. Good morning, and thank you all for joining us today to discuss our first quarter 2023 results. We had a very good quarter to start the year with same-store revenue results exceeding our expectations. And while same-store expense growth was higher than we projected due in large part to California storms, that still left us with first quarter net operating income and normalized FFO better than we expected.

In a moment, Mike will take you through our first quarter operating highlights. The strength of our revenue results point to the durable nature of our business in the face of volatile economic conditions.

We continue to see substantial demand from our affluent renter demographic and moderate levels of supply in most of our major markets, with the new news in the quarter being the rapidly improving regulatory conditions in California. Based on these continuing positive business conditions and the good prospects we see for our business going forward, during the first quarter, our board raised our common share dividend by 6% on an annualized basis. Despite headlines and layoffs, demand feels solid.

The unemployment rate, particularly for the college educated, remains very low, which gives us a good feeling about the employability and earnings power of our affluent renter customer. In our portfolio, we are not seeing increases in residents downsizing their units or giving us their keys because of job loss. In terms of competition from homeownership, monthly costs and down payment requirements remain high in our markets, especially relative to rents, making renting a high-quality equity residential apartment a better value.