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Equity Residential scales back development plans

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Equity Residential scales back development plans
Equity Residential scales back development plans, expects $115 million charge
Friday January 9, 2009, 5:34 pm EST

CHICAGO (AP) -- Equity Residential, an apartment developer and manager, said on Friday it will not go ahead with some of its previously planned projects because of concerns about the economy.

Equity Residential said it will record a charge of about $115 million, or 39 cents per share, against its fourth-quarter 2008 earnings to account for the reduced value of land holdings for five projects it no longer plans to pursue. The company said the charge does not affect its continued compliance with financial or debt covenants.

Equity Residential said the decision to drop certain projects does not affect 10 apartment properties under construction. Construction and leasing for those properties is expected to be completed, with about $623 million remaining to fund current construction activities.

"While development of high-quality assets in our core markets will continue to be an important part of Equity Residential's growth, we will not start any new projects for our own account until capital markets and the economy show signs of improvement," said David Neithercut, Equity Residential's president and chief executive.

The company said in a statement that it "has already reduced its development staff and may continue to make adjustments as conditions warrant."

Equity Residential, which acquires, develops and manages apartment properties, made the announcement after its shares fell $1.10, or about 4 percent, to close at $25.82. The company owns or has investments in 552 properties in 23 states and Washington, D.C.


LINK: http://finance.yahoo.com/news/Equity-Residential-scales-apf-14020634.html



4:10PM Equity Res to take Q4 2008 impairment charge of ~$0.39 from reduced planned development activity (EQR) 25.70 -1.22 : EQR announced that the co will reduce the number of planned development projects it will undertake and, as a result, will incur a non-cash charge in Q4 of 2008 of ~$115 mln, or $0.39 per share. The charge reflects impairments in the value of land holdings for five potential development projects that the co no longer plans to pursue. The impairment charge is the difference between each parcel's estimated fair value and current capitalized carrying value, which includes pursuit costs. The impairment charge does not affect the co's continued compliance with its financial or debt covenants. After this charge, the co will have land held for development of ~$250 mln, representing ~1.5% of the co's total assets.


LINK >>> http://finance.yahoo.com/marketupdate/inplay#eqr