EQR Q3 2025: Property Sales Drive Profit Surge Amidst Steady Core Growth

Equity Residential (EQR), one of the largest publicly traded owners of high-quality apartment properties in the United States, recently released its financial results for the third quarter of 2025. To understand the company's performance, let's take a closer look at the income statement from its latest 10-Q filing with the SEC.

For the quarter ending September 30, 2025, Equity Residential reported total revenues of $782.4 million, a 4.6% increase from the same period last year. After accounting for all expenses, the company posted a net income of $296.9 million, translating to a robust net margin of 37.9%.

This flow diagram provides a visual breakdown of how the company's revenue translated into profit during the third quarter.

The Tale of Two Growth Drivers

At first glance, the net income figure is striking. It represents a near doubling from the $148.5 million earned in the third quarter of 2024. However, digging deeper reveals that this impressive jump was driven largely by a single line item: a $142.7 million net gain on the sales of real estate properties. In the same quarter last year, the company recorded a small loss from property sales. This highlights the impact of EQR's strategy of actively managing its portfolio by selling assets and redeploying capital.

While asset sales provided a significant one-time boost, the performance of the core rental business offers a clearer picture of the company's underlying operational health.

Steady Performance in Core Operations

A key metric for real estate investment trusts (REITs) like EQR is Net Operating Income (NOI), which measures the profitability of its properties before corporate-level expenses and financing costs. Total NOI for the quarter grew by a healthy 3.7% year-over-year to $526 million.

Focusing on "same-store" properties—those owned and stabilized for the entire duration of both comparative periods—provides the best view of organic growth. Same-store NOI increased by 2.8%, driven by a 3.0% rise in rental income. This steady growth reflects solid fundamentals in EQR's key markets.

Geographically, the company saw its strongest performance in established coastal markets. New York and San Francisco led the way with robust demand and modest new supply. In contrast, the company noted a slowdown in Washington, D.C. toward the end of the quarter and acknowledged that its "Expansion Markets," such as Atlanta and Dallas/Ft. Worth, face a more competitive environment due to elevated levels of new apartment construction.

In summary, Equity Residential's third quarter was marked by a significant bottom-line increase, heavily influenced by profitable property sales. Beneath this headline number, the core rental business demonstrated resilient, steady growth. While the company benefits from strong positioning in high-barrier-to-entry urban markets, it continues to navigate macroeconomic uncertainties and competitive pressures from new supply in its growth-focused regions.