Equity Residential's fourth-quarter FFO rises
NEW YORK |
NEW YORK Feb 5 (Reuters) - Apartment owner Equity Residential said a key earnings measure rose 19 percent in the fourth quarter, in part on higher rent and expense controls.
Equity Residential, whose chairman and founder is real estate mogul Sam Zell, said on Tuesday that fourth-quarter funds from operations (FFO), excluding one-time items, rose to $243.9 million, or 75 cents a share, from $204.6 million, or 65 cents a share, a year ago.
Funds from operations is a real estate investment trust measure that usually removes losses and gains from property sales and eliminates the effect of depreciation on earnings.
During the quarter, Equity Residential and smaller rival AvalonBay Communities Inc said they would acquire Archstone, a large apartment owner taken private in 2007, for $6.5 billion plus the assumption of debt.
Equity Residential said it would buy 60 percent of the assets and AvalonBay 40 percent.
Although the apartment sector has been one of the strongest-performing in commercial real estate, it has been the weakest when it comes to stock performance. Investors are concerned about slowing rent increases in some major markets, as well as the threat of oversupply in markets such as Washington D.C. and Seattle.
For 2013, Equity Residential said it expects FFO excluding nonrecurring items in the range of $2.80 to $2.90 per share, while analysts forecast $2.94 a share, according to Thomson Reuters I/B/E/S.
It sees first-quarter FFO in the range of 62 to 66 cents per share, while analysts forecast 65 cents per share.
Equity Residential reported results after the close of trading on Tuesday. Its shares fell 0.6 percent to $54.16 during the session.
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