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Equity Residential's New CEO to Manage Transition Amid Downtown Investments

Parrell to Take Over in Coming Months at Nation’s Largest Apartment REIT
September 5, 2018
Mark Parrell, right, has been named president of Equity Residential. He will replace David Neithercut as chief executive later this year.



The executive suite at Equity Residential is facing its second retirement since June, meaning a new chief executive will manage a transition in coming months as the largest U.S. apartment real estate investment trust invests in apartments in the downtowns of large cities.

Mark Parrell, 52, has been named president of Chicago-based Equity Residential, which Sam Zell founded in the 1960s. Parrell succeeds David Neithercut, 62, who will retire as chief executive Dec. 21 after more than a decade in the job, according to the firm.

Parrell, who has held the executive vice president and chief financial officer title since 2007, will be named chief executive and join the company’s board upon Neithercut’s departure. Neithercut, who has led the company since 2006, will stay on the board.

The moves come as the company under Zell, 76, has invested in apartments in the largest and most reliable cities such as Boston and New York. He started his Chicago-based real estate empire with a job running student apartments in the 1960s, according to his new book, "Am I Being Subtle?"

Neithercut is the second top executive at the apartment REIT to retire this year. David Santee, 58, stepped down as chief operating officer in late June, and plans to also retire by year’s end. He was replaced by Michael Manelis, 49, who was executive vice president of operations.

Both men retiring have been with Equity Residential for at least two decades. And in a show of strong succession planning, their heirs have spent at least a decade each in their positions before the promotions.

"Of a board’s many responsibilities, the constant identification and development of executive talent are among the most important," Zell said in a statement about Parrell’s elevation.

The promotions, he added, "are a direct result of the priority placed by our board on succession planning and are the most recent examples of a very successful and rigorous process that has served the company and its shareholders well." Parrell was not available for comment.

Equity Residential, a powerhouse in luxury apartments, has ownership or investments in 306 properties that consist of 79,412 apartments. Though based in Chicago, it does not own any properties in the city but has high-profile properties in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California.

The moves come amid widespread growth of multifamily housing units, which has put pressure on pricing, Manelis told participants at the NAREIT annual investor conference in June.

New supply in some of the hottest multifamily housing markets was brisk in 2017 and 2018, he said, adding that 2019 will see yet more new rental developments amid further "extraordinary demand."

He said that "we know '18 was the elevated supply. As we go into '19, we will see the new supply drop down, but it’s not like you’re completely out of the woods."

That high demand is helping the bottom line because it’s getting absorbed, which has allowed Equity Residential to maintain occupancy levels and boost rental rates.


Jennifer Waters, Chicago Reporter  CoStar Group   
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