Major Multifamily Owner’s Q3
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Earnings season is rolling along, and multifamily giant Equity Residential laid out its third-quarter performance on an investor call on Thursday. The numbers come with an Amazon-related twist. More earnings numbers today: Office owner Paramount Group reports mixed results from last quarter.
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Equity Sees Slow Leasing But Hopes Amazon’s Office Mandate Can Help
Equity Residential saw low apartment leasing rates this year, but the real estate investment trust is hopeful that Amazon’s return-to-office mandate will help turn that around. Equity reported that its new lease change — the difference in rent from an apartment when a new tenant moves in — dropped 1.2 percent during the third quarter of 2024, according to its third-quarter earnings report. Company officials blamed myriad factors for the lowering of rents, including “continuing weakness in the expansion markets,” the company said in its report. “This is a give-and-take-type process,” Equity CEO Mark Parrell said during a Thursday earnings call. “We can get the new lease rate to be a higher number by letting occupancy decline, [but] that may not benefit same-store revenue growth, which is our ultimate goal. So we're trying to make as much money as we can in the current quarter and have a nice setup for the next year.”
Paramount Takes Solace in AI Leasing as J.P. Morgan Plans to Ditch 244K SF
Paramount Group is keeping its chin up despite losing J.P. Morgan as a tenant, with the bank leaving 244,000 square feet at One Front Street in San Francisco. The office landlord believes that the number of tours it's giving in other markets like New York City and subsequent leasing deals will offset the loss, and it has 230,000 square feet of leases among 80 new tenants in the pipeline, executives said in Paramount’s third-quarter earnings call Thursday. “We have 230,000 square feet of leases out, most of which is on vacant space,” Albert Behler, chairman, CEO and president of Paramount, said during the earnings call. “That’s what gives us the comfort to say that we’re going to have a really good fourth quarter.”
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