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Analyzing Equity Residential’s Geographic Coverage

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Sep. 30 2015, Updated 1:08 p.m. ET

Presence in 12 states

As we mentioned earlier, Equity Residential (EQR) owned all or a portion of 391 properties located in 12 states and the District of Columbia. The properties consisted of 109,225 apartment units with an additional 4,917 apartment units under construction as of December 31, 2014. The company’s portfolio of assets is located in high density, gateway cities in the US.

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Focused on urban core markets

For the past 15 years, Equity Residential’s investment strategy has focused on the urban core in the high-density, coastal cities of Boston, New York, Washington DC, southern California, San Francisco, and Seattle. These cities offer attractive lifestyles for young adults.

These are also the markets where the country’s knowledge-based economy thrives. They create well-paying jobs for the young generation. As a result, there are a large numbers of young adults in the company’s core markets who desire to live in high-quality, well-located rental housing like the ones that the company provides.

Portfolio diversification

The distribution of properties throughout the US reflects Equity Residential’s belief that geographic diversification helps insulate the property portfolio from regional influences. Other major players in the apartment REITs like AvalonBay Communities (AVB), Essex Property Trust (ESS), and UDR (UDR) are also following the same portfolio diversification strategy. Equity Residential accounts for 3.30% of the iShares U.S. Real Estate ETF (IYR).

At the same time, Equity Residential has a cluster of properties within each of its core markets in order to achieve economies of scale in management and operations.

We’ll explore Equity Residential’s target segment in the next part of this series.

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