Equity Residential's (EQR) third-quarter profit declined 23% as the real estate investment trust posted a lower occupancy and falling average rental rates.

The country's largest apartment dwelling developer and manager has an enviable liquidity position--which was further boosted by its decision to possibly sell up to 17 million shares over the next three years to fund acquisitions or pay down debt. Moody's Investors Service also praised the company's liquidity, but last month lowered its outlook to negative because the company's ratio of debt to profit has increased.

Equity Residential posted a profit of $143.4 million, or 48 cents a share, down from $187.1 million, or 64 cents a share, a year earlier. Funds from operations, a key profitability metric among REITs, fell to 53 cents from 64 cents. In July, the company projected 49 cents to 53 cents.

Revenue declined 3.6%, to $492.7 million. Analysts expected $487 million, according to analysts surveyed by Thomson Reuters.

Same-store revenue, which include 119,121 apartment units, fell 3.9% amid a 3.2% drop in the average rental rate. Occupancy fell to 94.4% from 93.7%.

During the quarter, the company sold 24 properties, consisting of 4,620 apartment units, for an aggregate sale price of $381.1 million. The company hasn't acquired a property this year.

Looking ahead, Equity Residential sees 2009 FFO of $2.18 to $2.22 a share, up from its raised July view of $2.10 to $2.20. The company attributed the raised view to higher than expected property net operating income. It also projected fourth-quarter FFO of 49 cents to 53 cents. Analysts expected 49 cents.

Shares were inactive in after-hours trading at $27.56. The stock is up from its 52-week low of $15.68 in March.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com