Equity Residential: 2Q NFFO Beats w/ Better NOI From Lower Op Ex; Top Line Guidance Increase Was Expected, Not As Much July Rate Acceleration vs. AVB

Research evidence excerpt

Equity Residential: 2Q NFFO Beats w/ Better NOI From Lower Op Ex; Top Line Guidance Increase Was Expected, Not As Much July Rate Acceleration vs. AVB

Anthony Paolone, CFA AC North America Equity Research

(1-212) 622-6682 22 July 2026 J P M O R G A N

anthony.paolone@jpmorgan.com

same-store, the company raised its revenue and NOI outlook while maintaining expense

guidance; same-store revenue, expense, and NOI growth guidance now stand at 2.4%, 3.5%,

and 1.8% at the midpoints, respectively, versus prior midpoints of 2.2%, 3.5%, and 1.5%. Our

same-store estimates currently sit at 2.5%, 3.5%, and 2.0%. The increase in its same-store

guidance was driven by strong momentum in San Francisco along with improvements in bad

debt.

Same-store NOI came in ahead due to better/lower expense growth while the top line

was more muted. 2Q26 same-store (inclusive of residential and non-residential) revenue,

expense, and NOI growth was 1.9%, 3.0%, and 1.4%, respectively, compared to our estimate

of 2.1%, 4.3%, and 1.1%. Thus the better expense growth drove the same-store NOI beat. In

terms of the top line, it does seem that non-residential revenue was a small drag since

residential-only revenue was up 2.1%. The residential revenue results were driven by blended

rate growth of 2.8%, (-0.7% new lease and +5.2% renewal), below our estimate of 3.2%

(0.0% new and +5.3% renewal). Occupancy for the quarter was 96.2%, below our estimate

of 96.3%. On bad debts, the company experienced a 20bps pickup y/y, ahead of the 10bps we

had estimated.

The early read into 3Q shows July leasing trends improving slightly. Preliminary blended rate

growth for July was 3.0%, consisting of -0.1% new lease growth and +4.9% renewal rate

growth, which is only a small acceleration from the 2Q blended rate of 2.8%.