Equity Residential (NYSE:EQR) Q4 2017 Earnings Conference Call - Final Transcript
Jan 31, 2018 • 11:00 am ET
David J. Neithercut
to pressure new lease rates, occupancy and retention. Fortunately all signals continue to point to further economic expansion, corporate earnings continue to grow and the corporate tax cuts are encouraging companies to deploy capital and increase wages, which are very, very good signs for the apartment business. There is no question that demand for our high quality rental properties will continue to be extremely strong.
Our residents will see their wages increase and will have more after-tax money in their pockets, as a result of the new tax act, while still being disinterested or unable to afford single-family homes the cost at which continue to rise in our already high single-family market, high cost of housing markets. It won't be easy, but you can count on EQR teams across the country to continue to perform at highest levels and deliver optimum results in the New Year. David Santee will now go into more detail of our 2017 results, and how we expect our markets to perform in 2018. And then Mark Parrell, will give some color on operating expenses, our earnings guidance for the year, and the various assumption that support this guidance. David?
David S. Santee
Thank you, David. Good morning, everyone. A year ago, when we laid out our guidance for 2017, I told you that our teams are keenly aware of the challenges before us, and I was 100% confident that they would go above and beyond to deliver in 2017. They did and I'd like to recognize those efforts, which allowed us to keep revenue growth at the high-end of our original guidance and expense growth that came in well below the bottom end of our guidance. In a new supply environment like this one, we know that our customers have many choices, but despite these above-average levels of new supply across all of our markets, our teams were able to deliver 4.6% renewal rate growth, while achieving the lowest resident turnover in the history of our Company. They also continued to improve our customer loyalty scores, which have increased 25% over the last couple of years.
And we did this while, also seeing our employee engagement scores remain at peak levels and our property employee turnover decline. Our wining culture and the desire to deliver our best will be called upon once again in 2018, as we face another year of elevated supply. And so our 2,000 operating strategy is very simple. Hit the replay button and keep a laser focus on our customers and employees. Renew and retain combined with market pricing discipline will be the key drivers in our ability to deliver 2018 revenue results that are very similar to 2017.
Now moving on to the markets, I'll focus my comments on the assumptions that make up our full-year forecast on a market-by-market basis. These include new lease growth rates, the expected renewal rates achieved and the percent of contribution to same store revenue growth that together get into the midpoint of our full-year guidance.