Equity Residential (TG:EQR)
Historical Stock Chart

From May 2019 to May 2024

Apartment giant Equity Residential (EQR) is shaving Big Apple rents, responding to a market weakened by mounting layoffs as the financial crisis drags on.

Chicago-based Equity Residential has cut its Manhattan asking rents by an average 13% since February, bringing the total decline to roughly 25% in a year, according to Macquarie Capital analyst Michael Levy.

In recent weeks alone, the Trump Place buildings on the Upper West Side saw prices slashed an average 15.5%, he said. Studios got a nearly 20% haircut.

At the Riverside Boulevard address that boasts a round-the-clock concierge staff, a 421-square-foot studio starts at $1,920, excluding a free month of rent, according to Levy. In November of 2007, the asking price for a similar unit was $2,750, and the rent bonus wasn't offered, he added.

"Because of the downturn in the economy, we believe that high-end apartment operators are having a much tougher time finding tenants willing to pay what they had been paying a couple of years ago," Levy said. It's tough to be renting to "bankers in the city or anyone affected by the recession."

An Equity Residential representative declined to comment, citing upcoming earnings results.

The company has more than 20 buildings in the New York metro area, with about half of those units in Manhattan. It counted on the region for 10% of last year's total net operating income, Levy said. In an early February earnings call, executives expressed concern about the market "due to the shock of the jobs and the financial situation."

That equals more work for owners to fill apartments in a post-bubble world, said Jamie LeFrak, whose family owns tens of thousands of rental units regionwide. "Unlike the sales market where sellers are holding out hope for a miracle that will never come...landlords will choose to rent at market rate immediately."

So far this year, Equity Residential's stock has fallen by nearly 38%.

-Dawn Wotapka; Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com