Equity Residential cuts FY revenue forecast on rental weakness in West Coast markets
Oct 31 (Reuters) - Equity Residential on Tuesday removed the upper end of its full-year revenue growth forecast as rental markets in San Francisco and Seattle underperformed, offsetting growth in East Coast markets such as New York and Boston.
Shares of the real estate investment trust (REIT) fell about 4.5% in trading after the bell.
The company now expects full-year 2023 revenue growth of 5.5% compared with its prior outlook of between 5.5% and 6.25%.
"While the East Coast outperformed our expectations, the San Francisco and Seattle markets underperformed due to lower recent job growth in our target affluent renter demographic and, together with the Rite Aid bankruptcy, led us to adjust guidance," said CEO Mark Parrell.
The company said it recorded a non-cash write-off of about $1.5 million in straight-line receivables during the third quarter related to Rite Aid.
Equity Residential, which acquires and manages multifamily apartments, also expects to end the year with modestly higher rental delinquencies compared to its previous goal, citing lengthy and uneven legal processes.
The percentage of residents renewing their leases fell to 54% from 57% in the second quarter of this year.
Equity Residential reported a normalized funds from operation (FFO) per share of 96 cents in the quarter ended Sept. 30, compared to 92 cents last year.
Same store revenue increased 4.1% from a year ago. (Reporting by Ananta Agarwal and Mehr Bedi in Bengaluru; Editing by Shailesh Kuber)
