Northern California carries Vivmark's property profit growth
The newly merged apartment owner raised its revenue outlook and merger benefits target. But an eleven-region comparison shows how narrowly its third-quarter property earnings grew.
Research by Ticker Byline shows that Northern California's $16.9 million increase in third-quarter property operating profit exceeded the $16.5 million gain across Vivmark's entire comparable apartment portfolio. The other ten regions together edged down by about $0.4 million.
The comparison covers 157,377 homes from AvalonBay and Equity Residential, which merged on August 17. Vivmark presents the portfolios as if they had been combined throughout both periods. Its measure, net operating income, subtracts direct property costs from rental income, before interest, depreciation, amortization and central management expenses.
The regional split behind the growth
Northern California's revenue rose 7.8% from a year earlier, while direct expenses increased just 0.3%. That left property operating profit up 11.2% to $168.2 million.
New York and New Jersey also grew, adding $7 million of property profit. But that gain was absorbed by declines elsewhere. Denver fell 9.6%, and Boston, the Mid-Atlantic, Seattle and Southern California also posted declines.
Across the comparable portfolio, expenses grew 3.6%, faster than the 2.4% increase in revenue. Property operating profit rose 1.7% to $976.5 million.
The merger target gets bigger
Management raised the midpoint of its 2026 comparable residential revenue growth outlook to 2.2%, from 2% in September.
Vivmark also increased its expected annual net operating benefits from the merger to $135 million, from $125 million. The full annual rate is expected to be in place by March 2028. The additional $10 million comes from property operations, including telecom purchasing, tenant screening and parking revenue initiatives.
The $135 million target already deducts an expected $50 million annual increase in California property taxes. That tax cost was also included in the original merger plan. It is expected to add about $16 million of operating expense in 2026 before reaching its annual rate in 2027.
The company now expects about $725 million of merger-related costs, including transaction and integration expenses. Its initial $750 million estimate covered transaction costs alone. In September, it had already said those costs were trending below the original estimate.
Management also projects $70 million of additional property operating income from development communities in 2027. Those contributions would give Vivmark another source of growth as the integration progresses.
The next results will show whether gains spread more widely across the rental portfolio while the operating changes take effect. Our Vivmark company page tracks its rental results, merger targets, development program and financing.