US REITs and Lodging: Birds of a Feather Flock Together; Thoughts on AVB and EQR Earnings

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US REITs and Lodging: Birds of a Feather Flock Together; Thoughts on AVB and EQR Earnings

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23 Jul 2026 07:06:47 ET │ 12 pages

US REITs and Lodging

Birds of a Feather Flock Together; Thoughts on AVB and EQR Earnings

CITI'S TAKE

We don't see AVB or EQR's earnings as changing the narrative for the

stocks, but think the releases support the view that apartment

fundamentals are moderately improving against lower supply, modest job

growth and strong tenant retention. Our understanding is that EQR's Eric Wolfe

+20bps SSREV raise is due to recent improvement in lease rates / rent +1-212-816-2640

growth (offset by lower occupancy), as 2Q SSREV was in-line with eric.wolfe@citi.com

expectations, with bad debt trending slightly better as well. For AVB,

Nick JosephAC about half of the +20bps SSREV raise is due to better rate growth and the

other half is due to higher WiFi / other revenue growth. In both cases, rent +1-212-816-1909

nicholas.joseph@citi.com growth has returned to normal seasonal patterns as opposed to the

abridged peak leasing season last year. Nick Kerr

+1-212-816-2036

nick.kerr@citi.com

Market Commentary - Most of the market commentary was in-line with our

expectations as SF / NoCal continues to outperform expectations, but the recent

weakness in Seattle was a bit different than ESS' commentary at NAREIT (as ESS

sounded more optimistic about recent trends). At the portfolio level for both EQR

and AVB, blended rent growth continues to improve and gap more positively versus

last year, with renewals coming in slightly better-than-expected. That said, we

anticipated continued YoY improvement in blended rent growth as peak leasing

trends were disappointing last year given pricing that peaked earlier than expected