Equity Residential sees poor 2009

Equity Residential and AvalonBay Communities Inc., the two biggest U.S. apartment REITs, declined in New York trading after the companies said rising unemployment will cut their rental business.

Equity Residential fell $1.82, or 7.8 percent, to $21.60 at 10:36 a.m. in New York Stock Exchange composite trading. AvalonBay declined $2.69, or 5.4 percent, to $47.39.

"The negative impacts to renter demand from net job losses will likely exceed any benefits from the positive demand drivers," AvalonBay said in a statement yesterday.

Both real estate investment trusts wrote down the value of land and abandoned new development projects because of frozen credit markets and the U.S. recession. Equity Residential, founded by billionaire Sam Zell, took a $116.4 million charge for the quarter to cancel projects and preserve cash. AvalonBay recorded land impairments of $57.9 million.

Equity Residential, based in Chicago, reported a net loss of $31.2 million, or 13 cents a share, compared with a net income of $123.3 million, or 44 cents, a year earlier.

Avalon Bay, based in Alexandria, Virginia, reported a fourth-quarter loss per share of 2 cents, compared with earnings of $1.65 a share a year earlier.