Equity Commonwealth (EQC)·Q4 2024 Earnings Summary

Executive Summary

• EQC completed its asset sale program with the sale of its last remaining property (1225 Seventeenth Street Plaza, Denver) for $132.5M gross ($124.4M net after credits) and adopted liquidation basis accounting; net assets in liquidation were ~$178.9M at 12/31/24 .
• The company raised its estimated aggregate liquidating distribution range to $20.55–$20.70 per common share (inclusive of the $19.00 initial distribution paid on 12/6/24), up from $20.00–$21.00 previously (11/15/24) .
• Management anticipates the final distribution in mid-April 2025, expects NYSE delisting the day before payment, and does not anticipate any distributions from the liquidating trust thereafter .
• Q3 context: performance was pressured by a $50.2M impairment on the remaining properties and declining occupancy, with GAAP EPS swinging to ($0.26) in Q3 from $0.20 in Q2; cash balances remained strong ahead of liquidation .

What Went Well and What Went Wrong

• What Went Well

  • Fully executed disposition plan: “With this sale completed, we have successfully executed on the sale of all of the company's real estate assets.” (William Griffiths) .
  • Improved shareholder return visibility: Raised total liquidating distribution range to $20.55–$20.70 per share; initial $19.00 distribution already paid (12/6/24) .
  • Clear wind-down roadmap: Final distribution targeted mid-April, delisting timing specified, and plan to transfer residuals to a Maryland liquidating trust one-for-one .

• What Went Wrong

  • Office market headwinds: Management reiterated it is “a challenging time to sell office buildings,” highlighting transaction execution risk earlier in the process .
  • Q3 operating softness: Same property NOI fell 16% YoY and leased percentage declined to 69.7% (from 80.8% a year ago), underscoring deteriorating fundamentals prior to liquidation .
  • Non-cash impairment in Q3: A $50.2M impairment (including $16.3M on non-real estate assets tied to sales) drove Q3 GAAP EPS to ($0.26), reducing comparability and highlighting asset value pressure .

Financial Results

• Liquidation-basis reporting in Q4 supersedes traditional P&L metrics; Q2 and Q3 results are shown for trend context.

• KPIs and balances

• Liquidation Basis Statement of Net Assets (12/31/24)

• Disposition Highlight (subsequent to 12/31/24): 1225 Seventeenth Street Plaza sold for $132.5M gross ($124.4M net) on 2/25/25 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “With this sale completed, we have successfully executed on the sale of all of the company's real estate assets.” — William Griffiths .
• “As of December 31, our net assets in liquidation are approximately $179 million… we are updating the estimated aggregate shareholder liquidating distribution range from $20 to $21… to $20.55 to $20.70 per common share, inclusive of the $19 per share distribution paid in December.” — William Griffiths .
• “We anticipate making our final distribution in mid-April… we do not anticipate any future distributions from the liquidating trust… [and] expect that the company's common shares will be delisted… the day before the final distribution payment date.” — William Griffiths .
• “So far, the disposition process has gone reasonably smoothly, but it remains a challenging time to sell office buildings.” — David Helfand (Q3) .

Q&A Highlights

• Preferred and common distribution sequencing (Q3 context): Series D preferred paid first, common distribution a few days later, within the stated 30-day window after the vote .
• Disposition earnest money and financing (Q3 context): Deposits ranged 1–5% of purchase prices; two buyers were all-cash; one subject to financing risk .
• Timing sensitivity (Q3 context): Closings anticipated to begin in early November with extensions possible; distribution sizing tied to disposition timing .
• Q4 call focused on completion of asset sales, raised distributions, and wind-down timing; the prepared remarks specified mid-April final distribution and delisting, with no anticipated liquidating trust distributions .

Estimates Context

• S&P Global/Capital IQ consensus estimates for Q4 2024 and FY 2024 were unavailable for EQC (coverage/mapping not present during liquidation-basis transition), so estimate comparisons are not provided [GetEstimates error]. Values retrieved from S&P Global.

Key Takeaways for Investors

• Execution complete: Asset sales concluded with Denver sold; liquidation basis adopted; net assets in liquidation of ~$178.9M anchor final return math .
• Higher expected payout: Aggregate liquidating distribution range raised to $20.55–$20.70 per share, with $19.00 already paid; a mid-April final distribution is targeted .
• Clear exit timeline: Shares expected to be delisted the day before the final distribution; residual assets/liabilities transition to a Maryland liquidating trust; no further trust distributions anticipated .
• Q3 softness explains lack of Q4 operating comps: Impairment and occupancy declines pressured Q3 results; Q4 ceases traditional metrics due to liquidation accounting .
• Trading implication: The set timeline and updated distribution range suggest a “carry-to-cash” setup into mid-April, with limited fundamental variability remaining; residual risks relate to final wind-down costs and administrative timing .
• Governance/capital actions executed: Series D preferred paid (12/3/24) and initial common liquidating distribution (12/6/24) completed, reducing uncertainty about capital stack outcomes .
• No estimate anchor: With consensus unavailable and liquidation basis in place, the narrative shifts from quarterly beats/misses to execution against the plan and realized distributions [GetEstimates error]. Values retrieved from S&P Global.

Citations

• Q4 2024 8-K (Item 2.02 + Exhibit 99.1 press release):
• Q4 2024 earnings call transcript:
• Q3 2024 8-K (press release + supplemental):
• Q3 2024 earnings call transcript:
• Q2 2024 8-K (press release + supplemental):
• Special meeting approval (Plan of Sale):