Apartment Companies Saw Net Income Spike 57% Last Year Thanks To Rising Rents
Apartment owners have been earning big profits off of raised rents, according to a new report by Accountable.US released this week.
The report notes that the top 10 public apartment companies saw net income collectively rise 57% to about $5 billion as a result.
These numbers far exceed losses that the companies incurred at the beginning of the pandemic, the report showed.
Accountable.US President Kyle Herrig commented: “It’s obvious the punishing rental prices on our most vulnerable populations are driven by corporate greed. Big apartment companies have joined the long list of industries using inflation as cover to charge working families far beyond any new cost of doing business.”
The study found that rent was up more than 17% last year and occupancies grew 2.5% above the historical average of 95%.
Pressuring the everyday citizen further, these increases came despite inflation doling out a 2.4% pay cut in 2021.
Starwood Property Trust’s CEO Barry Sternlicht said during the company’s most recent investor call that inflation was “an extraordinary gift that keeps on giving to a tune of maybe $400M or $500M.”
[It was] “the strongest real estate market I’ve seen in 30 years, 35 years if you count my time before Starwood,” he added.
Additional key findings from the report included:
- Mid-America Apartment Communities (MAA): Benefited from “strong rent growth” and saw FY 2021 net income nearly double to over $550 million after multiple lawsuits for excessive fees and tenant mistreatment in recent years—Meanwhile, its CEO’s compensation rose over 60% to over $7.6 million and he owns two lavish homes together worth $9.3 million.
- Starwood Property Trust: Called inflation “an extraordinary gift that keeps on giving” while being affiliated with Invitation Homes, known for “horror stories” from tenants, as it reported “a record year” in FY 2021 with net income jumping by over $126 million and its billionaire chairman owning a luxury waterfront Miami Beach mansion valued at almost $34 million.
- AvalonBay Communities: Saw move-in rent grow by 23% in FY 2021 and expected further rent hikes in FY 2022 as its net income grew by over $176 million—Meanwhile, its CEO saw compensation swell by 27% to over $14 million and owns at least four homes together worth over $11.2 million.
- Equity Residential: Touted its “pricing power” as it talked about increased rents while reporting that its FY 2021 net income jumped by 45% to almost $1.4 billion while being sued by 135,000 applicants for “‘unlawful conduct’” in its fee practices—Its CEO’s compensation increased by 11% to nearly $8.5 million while he sold his 8 bedroom home with “gourmet kitchen” and wine cellar for over $1.3 million.
- Essex Property Trust: Saw rents go “above pre-covid levels” in FY 2021 and warned that Los Angeles’ extended eviction moratorium “will hurt collections” as it posted an FY 2021 net income of $515.7 million—Its CEO saw compensation rise by $627,000 to over $7.1 million and he owns a $1.9 million home with a “covered outdoor kitchen” and a “separate casita.”
- Camden Property Trust: Has touted rent increases while calling rent caps “impediments to running our business” after seeing FY 2021 net income grow by nearly 143% to $312 million—Meanwhile, its CEO’s compensation rose by almost $420,000 to over $4.2 million and his “masterpiece” home has been valued at $18.3 million.
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Author: Tyler Durden
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