Equity Residential (EQR) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

July 27, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Equity Residential’s 2Q 2022 Earnings Conference Call. As a reminder, today’s conference is being recorded. At this time, I would like to turn the conference over to Marty McKenna. Please go ahead.

Marty McKenna - IR

Good morning and thanks [Technical Difficulty] to discuss Equity Residential’s second quarter 2022 results. Our featured speakers today are Mark Parrell, our President and CEO; Michael Manelis, our Chief Operating Officer; and Bob Garechana, our Chief Financial Officer. Alex Brackenridge, our Chief Investment Officer, is 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.

Mark Parrell - President and CEO

Thank you, Marty. Good morning and thank you all for joining us today to discuss our second quarter results. In a minute, Michael will walk you through a performance update by market, then Bob will discuss our guidance improvements, update you on how our innovation machine continues to hold expense growth down in an increasingly inflationary world, and then Bob will close with some color on our balance sheet and then we will take your questions.

Equity Residential had a tremendous quarter. Our business continues to benefit from terrific supply and demand dynamics, including excellent job growth and household formation. Our urban and dense suburban portfolio continues to be a magnet for our affluent renter demographic as demonstrated by our 96.7% same-store physical occupancy. We also believe that the desire for more space due to work from home and COVID-related health concerns has resulted in significant incremental household formation, creating additional demand for our properties.

Also, housing alternatives remain expensive and in low supply. Single-family home prices reached record levels in 2022 while rising mortgage rates have further stressed affordability, particularly for first-time homebuyers. Single-family housing starts are declining. Existing homeowners are more reluctant to sell due to low locked in mortgage rates, along with minimal and expensive for sale replacement options and competition for homes from investors remain strong.