A weak office and apartment market is having a pronounced effect on the nation’s bellwether REITs. Equity Office Properties Trust and Equity Residential, two of the biggest publicly traded office and apartment REITs, have released their fourth quarter 2002 earnings. Chicago-based EOP reports that net income rose 46% to $171.6 million (or 42 cents a share) vs. $117.9 million (or 28 cents a share) a year earlier.

EOP, which controls 126 million sq. ft. nationwide, dropped from 89.2% at the end of the third quarter to 88.6% at the close of the year. The REIT also reported that operating earnings continued to wane during the fourth quarter.

On the residential side, EQR reports that net income fell 16% to $118.5 million (or 35 cents a share) vs. $141.5 million (or 42 cents a share) a year earlier. EQR’s funds from operations dropped to $182.1 million (or 49 cents a share) vs. $206.3 million (or 66 cents a share) one year earlier. EQR’s revenues fell roughly 3% to $492.9 million from $505.7 million for the same period.

"We predict a slow recovery in 2003, but remain optimistic that office job growth will continue to accelerate, particularly in the later half of the year," says Richard Kincaid, president of Equity Officer Properties Trust.