UBS’ Best Stocks In The AI, Growth & Low Rates Era: Top 29 US Stocks

18. Equity Residential (NYSE:EQR)

Number of Hedge Fund Investors In Q2 2024: 30

UBS’ Sector Rating: Neutral

Sector: Real Estate

Equity Residential (NYSE:EQR) is a real estate company that focuses on the residential sector. Consequently, its shares have performed tepidly year to date, as the stock is up 19% year to date. Higher interest rates mean that developers find it hard to raise capital to build projects, which isn’t great for the real estate sector. However, Equity Residential (NYSE:EQR) benefits from its resources as they allow the firm to weather the storm and position itself for growth once the economic clouds have dissipated. The firm has total assets of $20.9 billion out of which investment properties account for $18.9 billion. Equity Residential (NYSE:EQR) has also been priming itself for the low-rate future that could see rentals rise as job growth leads to more working people in cities such as Seattle. One such move came in August when the firm bought a $1 billion portfolio of residential properties from Blackstone.

Baron Funds mentioned Equity Residential (NYSE:EQR) in its Q2 2024 investor letter. Here is what the fund said:

“In the second quarter, the shares of Equity Residential (NYSE:EQR), the largest U.S. multi-family REIT, appreciated due to continued strong operating updates, an improved full-year growth outlook, and faster-than-expected improvement in the company’s West Coast markets. Management has assembled an excellent portfolio of Class A apartment buildings located in high barrier-to-entry coastal markets with favorable long-term demographic trends and muted overall supply growth. Please see the “Top net purchases” for further thoughts on the company.

In the second quarter, we increased the Fund’s REIT exposure to best-in-class multi-family owners/operators Equity Residential and AvalonBay Communities, Inc. Our meetings with each management team supported our view that both companies are led by astute executives that are highly focused on driving value creation for shareholders…” (Click here to read the full text)