Equity Residential executives say there is “no agreement in place” with Airbnb over a possible revenue-sharing deal that would allow tenants to market their properties on the popular website, despite recent reports that the two sides have held discussions.
Speaking on the residential real estate investment trust’s year-end earnings call Wednesday, Equity Residential executives said the economic benefits of any such agreement “would be at the bottom of our priority list” – adding that a deal with Airbnb would be “more about gaining transparency and control around all that’s going on around us.”
But Equity Residential president and CEO David Neithercut reiterated the company has “a ways to go before anything meaningful comes of” discussions with the home-sharing behemoth.
Reports in December suggested that the Chicago-based REIT, along with fellow residential landlord giants AvalonBay Communities and Camden Property Trust, had held talks with Airbnb about allowing the website to market apartments across the country as short-term rentals in exchange for a cut of the revenue generated.
In addition to providing updates on Equity Residential’s operations across the country, company executives projected revenue growth of around 3 percent for the REIT’s New York metro area holdings over the next year.
The company’s Manhattan portfolio, in particular, will be “greatly influenced” by almost 2,000 new units coming online on the Upper West Side alone this year, according to COO David Santee.
The neighborhood accounts for nearly 30 percent of the company’s New York area revenues, through properties like 170 Amsterdam Avenue, and Santee said he expects “Upper West Side new lease rates to be flat or slightly positive” as the market absorbs the new deliveries.
He noted a similar trend in Brooklyn, where new supply – particularly in Williamsburg and the Downtown Brooklyn area – could lead to some pressure on “new lease pricing” for Equity Residential properties in the borough. Santee also noted an influx of new units being delivered in Jersey City and the Hudson River waterfront.
But he dispelled concerns about potential economic headwinds, such as a slowdown in job growth, having a significant impact on the city’s real estate market.
“I don’t see New York falling off a cliff,” Santee said, describing it as the “number one place that people want to be in the world.”
Neithercut also provided an update on the company’s expected future dispositions, in wake of the company’s nearly $5.4 billion sale of a residential portfolio to Barry Sternlicht’s Starwood Capital Group.
The REIT plans to divest an additional $300 million in assets by the end of this year “if we can find suitable assets to trade out” and acquire in turn, Neithercut said, citing how “demand for multifamily assets in our core markets has continued unabated.”
Demand remains particularly strong for “assets in gateway coastal cities,” he added – noting Equity Residential’s recent $390 million sale of the RiverTower, at 420 East 54th Street, to Slate Property Group and GreenOak Real Estate – and said such assets “hold up better and recover more quickly” in the event of an economic downturn.