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REITs Beat Estimates Amid Merger Talks
25 Jul
Summary
- Both REITs surpassed funds from operations estimates in Q2.
- AvalonBay raised its guidance for revenue and NOI.
- Despite strong results, no conference calls were held due to the merger.
Both AvalonBay Communities and Equity Residential, partners in a significant apartment REIT "merger of equals," announced second-quarter earnings that exceeded funds from operations estimates. This performance offers a positive signal for the apartment sector, which has lagged behind other REITs year-to-date.
AvalonBay's results beat estimates by 5 cents, driven by better-than-expected same-store net operating income, including revenue performance, operating expense timing, and development lease-up. The REIT also raised its guidance, increasing same-store revenue and net operating income while lowering operating expenses.
Equity Residential also surpassed FFO estimates due to improving rents and reduced same-store operating expenses. Despite these strong financial reports, neither REIT conducted a conference call to discuss their second-quarter earnings, a decision attributed to their impending merger.
