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Equity Residential: Well Positioned Despite Its Coastal Exposure

Mar. 04, 2023 2:43 AM ETEquity Residential (EQR)AVB15 Comments


  • Last week I covered AvalonBay and discussed why I don't see its exposure to legacy markets on both coasts as a negative.
  • Today I analyze Equity Residential which is another residential REIT with an identical geographical exposure trading at an appealing valuation.
  • In this article, I discuss the differences between the two and pick a winner.

Real estate agent giving the keys of his new house to a man


Dear readers/followers,

I've recently covered a number of residential REITs that are on my watchlist, these include AvalonBay (AVB), Essex Property (ESS), Camden Property (CPT), BSR REIT (HOM.U:CA) and Mid-America Apartment Communities (

This article was written by

David Ksir profile picture

David Ksir has extensive private equity experience in finance and European real estate. He manages a small 8-figure family office focused on generating reliable dividend income through value investing.

David also contributes to the High Yield Landlord which is led by Jussi Askola and has a team of 5 other top Seeking Alpha REIT and income analysts. They help investors become passive landlords with their 8% yielding real estate portfolio. Service features include: three portfolios (core, retirement, international), community through chat room, buy/sell alerts, and educational content.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (15)

Pretty strong yield now too.
dondougie profile picture
I listened to citi investment call and ESS CEO said that Alameda and LosAngeles counties eviction moratorium's end in April. This should be a big positive for ESS & EQR as they will be able to get rents again.
David Ksir profile picture
@dondougie Does anyone know if this has to with the end of the public health emergency? If so then it could be a nation-wide thing. Could be a nice catalyst. I'll look into it.
@David Ksir No its local. LA violated the rights of landlords much worse and long after the rest of the blue cities had moved on. But even LA’s insanity on this eviction moratorium is ending finally. It’s end will help ESS, EQR and AVB the most, probably in that order as it’s likely a bigger deal for ESS. But I doubt its much of a catalyst though it is yet another reason not to be investing in cities like LA.
tensei profile picture
I'm a big buyer of EQR at these levels
David Ksir profile picture
@tensei Awesome, good luck!
tensei profile picture
@David Ksir

Just sold a month and a half later at +$98k on equity residential - didn’t feel like a good sale, think there was more upside

Deal closer EQR for me is the leader is Sam Sell the Warren Buffett of real estate
Weighing Machine profile picture
I own both. The the geog footprints & valuation of AVB/EQR are similar but I see AVB's development prowess making it a superior choice if an investor were to choose between the two.
Thanks for the thoughtful article. While EQR and AVB are similar in many respects the one major difference is that AVB relies on a large in house generated development program while EQR generally partners with Developers mitigating the direct development risk but sharing the upside with partners. While AVB has a successful development track record the overall risk development has never been, in my opinion, really been taken into account by investors. I like the EQR strategy better as it allows for focus on owning and managing assets, scaling development quickly with the economic conditions and demand make sense or not. EQR doesn't have the significant overhead of a large in house development team which means AVB has difficulty adjusting developments volumes over time, has to maintain lower leverage to pay for development, and is taking 100% of the development risk in the process. LONG EQR occasionally in AVB when pricing opportunities arise.
David Ksir profile picture
@Thoughtful Investor40 Thanks for this, very insightful!
AnimeSnoopy profile picture
@Thoughtful Investor40
Underrated comment. Paul Drake posted an insightful article on AVB in regards to their reliance on development recently also.

Not a great time to depend of developments, in my opinion.
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