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Like other REITs, Equity Residential expects to benefit from tighter apartment supply in 2026, particularly in the second half of the year, EQR President and CEO Mark Parrell said on the firm’s fourth-quarter and full-year 2025 earnings call Friday. EQR is currently dialing back concessions and eyeing its highest rent growth in New York City and San Francisco.

“2026 starts look to be light again, boding well for continuing low levels of deliveries in future years,” Parrell said. “Our internal tracking shows deliveries of competitive new supply in our markets declining 35%, or to be down about 40,000 units, in 2026 versus 2025 levels.” 

This year, EQR expects revenue to rise 1.2% to 3.2% YOY and NOI to grow 0.5% to 2.5% YOY, according to the Chicago-headquartered REIT’s Q4 and full-year 2025 earnings report.

“Looking forward to 2026, there is definitely a broad range of possible outcomes for the U.S. economy, especially as it relates to job growth. Our wider-than-usual same-store revenue guidance range acknowledges that uncertainty,” Parrell said on the call. 

For the moment, EQR does not have any acquisitions or sales planned for 2026. The firm is focused on stock buybacks, according to Parrell, and purchased about $206 million of its stock in Q4.

“Given our current cost of capital, significant acquisition activity makes less sense at this time, and development activity will be highly selective,” Parrell said. “The best capital allocation opportunity we see now is to sell properties that we see as having lower forward return profiles, and using the sales proceeds to buy back our stock.”

The firm does expect to start some new projects this year after sitting out development in 2025, according to Executive Vice President and Chief Investment Officer Robert Garechana. EQR bought some land parcels in Q4 2025 and plans to start a couple of projects in Atlanta this quarter, Garechana said on the call. 

2025 recap

2025 did not follow typical rent seasonality patterns: Strong gains in the first half of the year were offset by slower growth in H2, as job growth cooled and apartment supply stayed high, EQR Executive Vice President and Chief Operating Officer Michael Manelis said on the earnings call.

Q4 results “reflect a continued high level of physical occupancy at 96.4% driven by solid demand, strong retention and fewer lease expirations,” Manelis said. “Other income growth was a little less than expected, driven by the lack of bad debt, net improvement and a little less income from our both bulk internet rollout program and other fees, causing us to be slightly off our midpoint.”

The firm anticipates utility costs, particularly electricity and water, to significantly outpace inflation again in 2026, according to EQR Executive Vice President and Chief Financial Officer Bret McLeod, with overall expenses rising 3% to 4% over the year. EQR anticipates a boost, however, from its ongoing rollout of bulk internet throughout its portfolio.

“We expect bulk Wi-Fi to contribute approximately $6 million to NOI this year, and approximately $10 million once the full rollout is complete by the end of 2027,” McLeod said. 

EQR is also seeing the benefits of its first round of tech initiatives, which focused on centralization, automation and the introduction of artificial intelligence to parts of the leasing process, resulting in a 15% reduction in on-site payroll, per Manelis. The firm plans to add more AI-enabled applications and other automation over the next 18 months, which it expects to reduce on-site payroll by 5%-10% over the next several years and to lower its overall repair and maintenance expenses.

The high cost of buying a home makes renting attractive, Manelis noted. “In fact, only 7.4% of our residents gave ‘bought home’ as the reason for moving out in 2025, which is also the lowest percentage we have seen in our company's history.”

Hot spots and trouble areas

San Francisco and New York are the two markets that are expected to drive performance in 2026, according to Manelis, noting that, together, the markets “constitute about 30% of our NOI and have the best supply and demand outlooks in the country for 2026.” 

“Our urban exposure in these two markets is particularly unique to Equity Residential, and should be a relative strength for us versus our peers.”

High levels of new supply continued to impact EQR’s operating results in Atlanta, Dallas, Denver and Austin, Texas, with Atlanta faring the best of the four and Denver the worst, Manelis said. In June 2025, EQR bought eight Atlanta properties totaling 2,064 units for $535 million. 

Last year, Washington, D.C., “was a tale of two markets,” Manelis said, “with strength in the first half of the year that eroded as the year progressed, driven by a combination of federal job cuts, the National Guard deployment and the government shutdown.”

Only about 4,000 units are expected to be delivered in the area in 2026, down from 12,000 units in 2025. “A very favorable new supply setup, and what we hope will be less uncertainty in the market, could lead to D.C. outperforming our somewhat muted expectations for 2026,” Manelis said.

The firm is pulling back a bit in Los Angeles, which continues to see a difficult business environment amid a shifting entertainment industry. At the end of 2025, EQR sold a three-property multifamily portfolio in LA to JRK Property Holdings for $400 million, Commercial Observer reported. Although the city is not currently a market favored by private buyers, that will likely change, Parrell said.

“My guess is LA will brighten over time, that politics will improve as you get closer to the World Cup this year and as you get closer to the Olympics [in 2028],” Parrell said. “We'll have an opportunity to sell some product in Los Angeles as time goes on.”

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