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What changed in Equity Residential's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Equity Residential's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+221 added−228 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in Equity Residential's 2024 10-K

221 paragraphs added · 228 removed · 165 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changePay Equity • In order to develop, attract and retain the best employees, we are committed to providing a total compensation package which is market-based, performance driven, fair and internally equitable. • Our goal is to be competitive both within the general employment market as well as with our competitors in the real estate industry, with our strongest performers being paid more. • Base pay is reviewed annually, as is Equity Residential’s compensation framework, by partnering with managers to create and update job descriptions that reflect the duties, skills, experience and education required to perform the role, and then benchmarking the Company’s pay practices and budget as well as our jobs against third-party compensation surveys to determine the market value of the job. • During the year-end performance evaluation process, managers review and calibrate compensation for all employees on their team, in an effort to ensure equity around our pay practices and allow us to reward and motivate our top talent.
Biggest changeTalent Development, Attraction and Retention • To develop, attract and retain the best employees, we are committed to providing a total compensation package that is market-based, performance driven, fair and internally equitable. • Our goal is to be competitive both within the general employment market and with our competitors in the real estate industry, with our strongest performers being paid more. • Base pay is reviewed annually, along with Equity Residential’s compensation framework.
Our multi-pronged investment strategy featuring acquisitions, new stand-alone and expansion developments, densifying developments and accretive renovations of existing properties is focused on optimizing and balancing our portfolio in terms of location, including between our established and expansion markets and between urban and suburban submarkets within those markets.
Our multi-pronged investment strategy featuring acquisitions, new stand-alone and expansion developments, densifying developments and accretive renovations of existing properties is focused on optimizing and balancing our portfolio in terms of location, including between our Established Markets and Expansion Markets and between urban and suburban submarkets within those markets.
We actively promote from within, and many senior corporate and property leaders have risen from entry level or junior positions. • Social and Community Wellbeing: We offer a number of benefits that foster social and community wellbeing, including paid time off to volunteer in our communities. • Equity Residential continues to partner with Employees1st to provide financial relief via a crisis fund for employees struck by personal hardships or unforeseen disasters.
We actively promote from within, and many senior corporate and property leaders have risen from entry level or junior positions. • We offer a number of benefits that foster social and community wellbeing, including paid time off to volunteer in our communities. • Equity Residential continues to partner with Employees1st to provide financial relief via a crisis fund for employees struck by personal hardships or unforeseen disasters.
Financial peace of mind is at the core of these offerings, whether it’s our generous 401(k) match, basic and supplemental insurance to ensure our loved ones and possessions are cared for, rent discounts at our properties or additional savings and investment options like our employee share purchase plan. • Career Wellbeing: When employees move up in skill and experience, so does Equity Residential.
Financial peace of mind is at the core of these offerings, whether it’s our generous 401(k) match, basic and supplemental insurance to ensure our loved ones and possessions are cared for, rent discounts at our properties or additional savings and investment options like our employee share purchase plan. • When employees move up in skill and experience, so does Equity Residential.
Worth and Austin. Through our ownership in these markets, we seek to optimize our portfolio by balancing risk and maximizing returns. We believe that this portfolio will allow us to produce more consistent cash flows in a volatile world where local market conditions may cause operating fundamentals to change rapidly.
Worth and Austin. Through our ownership in these markets, we seek to optimize our portfolio by balancing risk and maximizing returns. We believe that this portfolio will allow us to produce more consistent cash flows in a volatile world where local market conditions may cause operating fundamentals to rapidly fluctuate.
Certain capitalized terms used herein are defined in the Notes to Consolidated Financial Statements or the Definitions section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations . See also Note 17 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.
Certain capitalized terms used herein are defined in the Notes to Consolidated Financial Statements or the Definitions section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations . See also Note 16 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.
References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. EQR is the general partner of, and as of December 31, 2023 owned an approximate 97.0% ownership interest in, ERPOP.
References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. EQR is the general partner of, and as of December 31, 2024 owned an approximate 97.0% ownership interest in, ERPOP.
We utilize technology and other innovative methods of engagement with our residents to foster relationships and community, improve the resident experience and operate our business more efficiently. We pair that with disciplined balance sheet management that enhances returns and value creation 6 Table of Contents while maintaining flexibility to take advantage of future opportunities.
We utilize technology and other innovative methods of engagement with our residents to foster relationships and community, improve the resident experience and operate our business more efficiently. We pair that with disciplined balance sheet management that enhances returns and value creation while maintaining flexibility to take advantage of future opportunities.
They also tend to remain renters longer due to the high cost of single family home ownership, societal trends favoring delays in marriage and having children and caution around making large financial commitments during uncertain economic times. 7 Table of Contents • Baby Boomers, a demographic of more than 68 million people born between 1946 and 1964, also may trend toward apartment rentals as they downsize and enter retirement in vibrant cities.
They also tend to remain renters longer due to the high cost of single family home ownership, societal trends favoring delays in marriage and having children and caution around making large financial commitments during uncertain economic times. 8 Table of Contents • Baby Boomers, a demographic of more than 68 million people born between 1946 and 1964, also may trend toward apartment rentals as they downsize and select retirement living in vibrant cities.
Furthermore, our annual proxy statements contain additional information on our corporate responsibility efforts, including detailed information regarding our corporate governance practices. Such annual proxy statements and the information contained therein are not part of nor incorporated into this report, except as otherwise provided herein.
The Corporate Responsibility Report is not part of or incorporated into this report. Furthermore, our annual proxy statements contain additional information on our corporate responsibility efforts, including detailed information regarding our corporate governance practices. Such annual proxy statements and the information contained therein are not part of or incorporated into this report, except as otherwise provided herein.
Regulatory Considerations See Item 1A, Risk Factors , for information concerning the potential effects of governmental regulations, including environmental regulations, on our operations. 11 Table of Contents
Regulatory Considerations See Item 1A, Risk Factors , for information concerning the potential effects of governmental regulations, including environmental regulations, on our operations. 12 Table of Contents
The Company continues to allocate capital in order to optimize performance by balancing current cash flow growth with long-term capital appreciation. We have done so by adding expansion markets to our portfolio when certain submarkets in those markets meet many of the same characteristics listed above. Expansion into these markets of Denver, Atlanta, Dallas/Ft.
The Company continues to allocate capital in order to optimize performance by balancing current cash flow growth with long-term capital appreciation. We have done so by adding Expansion Markets to our portfolio when certain submarkets in those markets meet many of the same characteristics listed above.
Our properties support amenities such as fitness centers and we select locations near shops, restaurants, outdoor amenities such as bike/running paths and health clubs, enabling a low carbon footprint lifestyle for our residents to live, work and play. 8 Table of Contents Equity Residential’s sustainability program actively manages environmental impacts and climate-related risks and opportunities through optimized, financially responsible capital investments and technologies.
Our properties support amenities such as fitness centers and we select locations near retail shops, restaurants, outdoor amenities such as bike/running paths and health clubs, enabling a low carbon footprint lifestyle for our residents to live, work and play. 9 Table of Contents Equity Residential’s sustainability program actively manages environmental impacts and utility costs through optimized, financially responsible capital investments and technologies.
Consistent with the Company's purpose and commitment to the incorporation of corporate responsibility concepts in all aspects of its business, executive compensation includes a goal which focuses on environmental, social and governance factors.
Consistent with the Company's purpose and commitment to corporate responsibility concepts in all aspects of its business, executive compensation includes a goal that focuses on corporate responsibility factors.
Our expertise has shown that as real estate owners, developers and managers, we have the ability to make a positive impact on the environment while also enhancing our financial performance and strengthening our organization’s sense of purpose.
Our expertise has shown that as real estate owners, developers and managers, we have the ability to make a positive impact on the environment while also enhancing our financial performance and strengthening our organization’s sense of purpose. As detailed below, we are committed to our employees’ engagement, inclusion and wellness.
We believe that our stakeholders value stability, liquidity, predictability and accountability and that is the mission to which we remain unwaveringly committed. Despite overall economic concerns, demand to live in our apartment communities remains healthy and we believe that the long-term prospects for our business remain strong.
We believe that our stakeholders value stability, liquidity, predictability and accountability and that is the mission to which we remain unwaveringly committed. 7 Table of Contents Demand to live in our apartment communities remains healthy and we believe that the long-term prospects for our business remain strong.
Development activity is focused on our in-house pipeline and redevelopment of some existing operating properties and our strategic partnerships and joint-ventures with third-party developers in both established and expansion markets.
Development activity is primarily focused on our strategic partnerships and joint ventures with third-party developers, as well as on our in-house redevelopment/densification of existing operating properties, located in both Established Markets and Expansion Markets.
Our employees are focused on delivering remarkable customer service to our residents so they will stay with us longer, be willing to pay higher rent for a great experience and will tell others about how much they love living in an Equity Residential property.
We believe we have created an industry-leading operating platform and balance sheet to run our properties. Our employees are focused on delivering remarkable customer service to our residents so they will stay with us longer, be willing to pay higher rent for a great experience and will tell others about how much they love living in an Equity Residential property.
Resiliency and regulatory issues also factor into our decisions to dispose of certain properties and/or exit certain submarkets. We believe our strategy capitalizes on the preference of renters of all ages to live in the locations where we operate which typically are near transportation (both public transit and convenient highway access), entertainment, employment centers/universities and cultural and outdoor amenities.
We believe our strategy capitalizes on the preference of renters of all ages to live in the locations where we operate which typically are near transportation (both public transit and convenient highway access), entertainment, employment centers/universities and cultural and outdoor amenities.
It drives our commitments to sustainability, diversity and inclusion, the total wellbeing of our employees and being a responsible corporate citizen in the communities in which we operate.
We carry this, our corporate purpose, through our relationships with our customers, our employees, our shareholders and the communities in which we operate. It drives our commitments to sustainability, inclusion, the total wellbeing of our employees and being a responsible corporate citizen in the communities in which we operate.
For additional information regarding our corporate responsibility efforts, see our 2023 Environmental, Social and Governance Report at our website, www.equityapartments.com, which includes third-party limited assurance covering some of the environmental metrics included in the report.
For additional information regarding our corporate responsibility efforts, see our 2024 Corporate Responsibility Report at our website, www.equityapartments.com, which includes third-party limited assurance covering some of the environmental metrics included in the report. The report was reviewed and approved by the Corporate Governance Committee of our Board of Trustees, which monitors the Company’s ongoing corporate responsibility efforts.
We encourage our employees to Test their Limits (one of the Ten Ways), push the boundaries of their comfort zones and seek new challenges through several learning resources and courses, in addition to tuition reimbursement.
We encourage our employees to push the boundaries of their comfort zones and seek new challenges through several learning resources and courses.
Employee Engagement • Employee engagement and experience are extremely important at Equity Residential. Our Employee Experience (EX) Survey measures employee engagement and diversity and inclusion, among other components of the employee experience. • Our 2023 engagement score of 78% favorability is very strong, especially given changes in employee expectations in the wake of the pandemic.
Employee Engagement • Employee engagement and experience are extremely important at Equity Residential. Our Employee Experience (EX) Survey measures employee engagement, manager effectiveness, trust and inclusion, among other components of the employee experience. • Our 2024 engagement score of 77.4% favorability is very strong, especially given changes in employee expectations over the past several years.
Worth and Austin includes investments in both urban and suburban properties in select submarkets and is generally being funded by reducing exposure to older or lower returning assets in selected established markets. Development also plays an important role in our capital allocation.
Expansion into these markets includes investments in both urban and suburban properties in select submarkets and is generally being funded by reducing exposure to older or lower returning assets in selected Established Markets.
We also focus on resiliency/environmental and regulatory issues when choosing which markets/submarkets in which to concentrate our investment efforts. We conduct climate resilience analyses and assess the regulatory climate to identify potential risks and opportunities as part of our due diligence process for new acquisitions and developments, as well as potential markets for portfolio expansion.
We conduct climate resilience analyses and assess the regulatory climate to identify potential risks and opportunities as part of our due diligence process for new acquisitions and developments, as well as potential markets for portfolio expansion. Resiliency and regulatory issues also factor into our decisions to dispose of certain properties and/or exit certain submarkets.
Our Diversity & Inclusion Index score of 84% demonstrated significant employee favorability for the initiatives taking place and a greater sense of belonging. • Executive leaders are assessed annually on their leadership results for diversity and inclusion, engagement and manager completion of Ethics and Positive Workplace training, which for 2023 were measured by an employee experience survey and course completion rates.
Our inclusion index score of 84.4% demonstrates significant employee favorability for our initiatives and a greater sense of belonging. • We launched an Engagement Advisory Group dedicated to identifying opportunities to bolster our engagement scores and improve the employee experience by leveraging insights gleaned from our 2023 engagement survey. • Executive leaders are assessed annually on leadership results on inclusion, engagement and manager completion of Ethics and Positive Workplace training, which for 2024 were measured by an employee experience survey and course completion rates.
We believe the locations of our properties in these markets are attractive to these affluent knowledge workers (who often choose to rent for lifestyle reasons) that we hope to convert into satisfied long-term residents. We believe we have created an industry-leading operating platform and balance sheet to run our properties.
We believe that both the locations of our properties and the cost of renting versus home ownership in these markets are attractive to these affluent knowledge workers (who often choose to rent for lifestyle reasons and due to a lack of home affordability) that we hope to convert into satisfied long-term residents.
Investment Strategy The Company’s long-term strategy is to invest in apartment properties located in strategically targeted markets with the goal of maximizing our risk-adjusted total returns by balancing current cash flow generation with long-term capital appreciation. We seek to meet this goal by investing in markets that are characterized by conditions favorable to multifamily property operations over the long-term.
Investment Strategy The Company’s long-term strategy is to invest in apartment properties located in strategically targeted markets with the goal of generating consistent and superior risk-adjusted total returns by balancing current cash flow generation with long-term capital appreciation.
We use a standardized purchasing system to control our operating expenses and a business intelligence platform and other data analytics that allow our team members to quickly identify and address issues and opportunities.
Having a history as a first mover in such important areas as online leasing, we are focused on technology that drives superior margins and improves customer experience. We use a standardized purchasing system to control our operating expenses and a business intelligence platform and other data analytics that allow our team members to quickly identify and address issues and opportunities.
Operations and Innovation We attempt to balance occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible cash flow generation to our shareholders.
Operations and Innovation We attempt to balance occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible cash flow generation to our shareholders. Our focus on operating efficiency and delivery of an exceptional resident living experience has driven strong Physical Occupancy and low Turnover while achieving strong renewal rate growth.
Our markets attract and create high quality jobs that are often focused in growing areas of the knowledge-based economy. These jobs result in the significant presence and growth in affluent renters that work in the highest earning sectors of the economy, are not rent burdened and are attracted to our type of properties.
Our markets attract and create high quality jobs that are often focused in growing areas of the knowledge-based economy.
This creates the ability to raise rents more readily in good economic times and reduces risk during downturns. Many of these affluent workers are employed in the fields of Science, Technology, Engineering and Mathematics, or STEM jobs, as well as financial services, medical, legal and other higher-earning professions. • Significant apartment demand that meets new apartment supply.
Many of these workers are employed in the fields of Science, Technology, Engineering and Mathematics, or STEM jobs, as well as financial services, medical, legal and other higher-earning professions. • Significant apartment demand that meets new apartment supply. We remain focused on owning and operating properties in markets and submarkets where the supply of apartments is met with strong demand.
We methodically focus on energy, water, waste and emissions to advance the program’s policies, targets and resilience outcomes as well as our shareholders' long-term financial interests.
We methodically focus on energy, water, waste and emissions to advance the program’s policies, targets and resilience outcomes as well as our shareholders' long-term financial interests. We believe that our approach will prepare us to operate in a low-carbon economy and drive long-term asset value while maintaining a commitment to good corporate citizenship and maximizing investment performance.
We remain focused on owning and operating properties in markets and submarkets where the supply of apartments is met with strong demand. While at times supply and demand imbalances may occur, over the long-term we believe that the dynamics in our markets will support superior long-term returns.
While at times supply and demand imbalances may occur, over the long-term we believe that the dynamics in our markets will support superior long-term returns. We also focus on resiliency/environmental and regulatory issues when choosing which markets/submarkets in which to concentrate our investment efforts.
Our business benefits from elevated single family home ownership costs, positive household formation trends and the overall deficit in housing across the country, especially in the areas in which we are investing. Our well-located communities provide an exceptional experience for our residents around dynamic cities that we believe will continue to attract affluent long-term renters.
Our business benefits from elevated single family home ownership costs which makes renting more attractive, positive household formation trends, residents choosing a rental lifestyle for greater flexibility in living arrangements and the overall deficit in housing across the country, especially in the areas in which we are investing.
We celebrate differences and are committed to cultivating an inclusive environment of belonging for all employees, driving excellence through shared perspectives and collaborative innovation. We also recognize that a successful company must incorporate the best corporate governance practices in order to better serve its stakeholders.
We are committed to building a community where everyone belongs and diverse perspectives fuel creativity and innovation, shaping a workplace that is not only inclusive but also collaborative. We also recognize that a successful company must incorporate the best corporate governance practices to serve its stakeholders better.
We believe providing a work environment based on respect, trust and collaboration creates an exceptional employee experience where employees can bring their whole selves to work and thrive in their careers.
By fostering a work environment built on respect, trust and collaboration, we create an exceptional experience where employees can bring their full selves to work and thrive in their careers. • We actively work to expand the breadth of our talent pipeline at all levels, with an enhanced focus on mid-management and higher positions.
We have been and continue to be a leader in deploying and investing in property technology to serve our customers better and operate more efficiently. Having a history as a first mover in such important areas as online leasing, we are focused on technology that drives superior margins and improves customer experience.
We deliver this performance through rapidly evolving technology and innovation that is increasingly prevalent in our industry. We have been and continue to be a leader in deploying and investing in property technology to serve our customers better and operate more efficiently.
Our dedication to mental wellness is reflected in providing tools like this, fostering a culture that values self-care and effective mental health practices. • Financial Wellbeing: These benefits and resources help our employees manage their money better today, while preparing for financial milestones and retirement in the future.
It was codified in a recognition playbook that informs and guides any employee on recognition and appreciation best practices. 11 Table of Contents • Financial benefits and resources help our employees manage their money better today, while preparing for financial milestones and retirement in the future.
All employees and their family members have access to five free counseling sessions (per year per presenting matter) through our Employee Assistance Program. Understanding the importance of a mentally healthy workforce, we also added an industry-leading meditation app, free to all employees and their family members, designed to promote mental health.
From addressing complex health conditions to providing resources for everyday wellbeing, we believe our benefits ensure every employee feels supported, balanced and able to thrive. • To address the ongoing importance of mental health, we provide culturally competent and accessible resources, including educational tools, free access to an industry-leading meditation app for employees and their families, partnerships with virtual care providers and an Employee Assistance Program offering five free counseling sessions per year per presenting matter.
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On May 18, 2023, the Company announced that Samuel Zell, its Founder and Chairman of the Board of Trustees, had passed away earlier that same day. David J. Neithercut, the Company’s former Chief Executive Officer and a member of the Company’s Board of Trustees since 2006, has been appointed as Chairman.
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Our well-located communities provide an exceptional experience for our residents around dynamic cities that we believe will continue to attract long-term renters who are highly educated, well employed and earn high incomes. Equity Residential is committed to creating communities where people thrive.
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Equity Residential is committed to creating communities where people thrive. We carry this, our corporate purpose, through our relationships with our customers, our employees, our shareholders and the communities in which we operate.
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We seek to meet this goal by investing in markets that are characterized by conditions favorable to multifamily property operations over the long-term.
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Our focus on operating efficiency and delivery of an exceptional resident living experience has driven strong Physical Occupancy and a high Percentage of Residents Renewing while achieving strong renewal rate growth. We deliver this performance through rapidly evolving technology and innovation that is increasingly prevalent in our industry.
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These jobs result in the significant presence and growth in renters that work in the highest earning sectors of the economy and are not rent-burdened, creating the ability to raise rents more readily in good economic times and reducing risk during downturns.
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Our Commitment to Corporate Responsibility At Equity Residential, we believe focusing on corporate responsibility is a key way to programmatically address stakeholder concerns as part of our corporate purpose as we recognize the profound impact that the real estate industry can have on our environment and society as a whole.
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We believe having a more balanced portfolio between urban and suburban and between our Established Markets and Expansion Markets, while remaining focused on serving a more financially resilient renter, will create the highest returns and lowest return volatility over time. Development also plays an important role in our capital allocation.
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We strive to create and maintain a sustainable portfolio that not only has a low environmental footprint, but also one that is attractive to our customers and the community and resilient to the changing climate. We apply best practices for sustainability across all aspects of our real estate business.
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Our Commitment to Corporate Responsibility At Equity Residential, corporate responsibility is integrated into every aspect of our business, as we aim to minimize environmental impact, manage climate and environmental risks and position the Company as an attractive investment. We prioritize robust governance and transparency, operating our assets efficiently, strategically and responsibly allocating capital and investing in innovative technologies and practices.
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Together, we believe our program drives long-term asset value, responsibly manages risks and engages our communities, residents, employees and shareholders as part of our broader sustainability strategy and commitment to good corporate citizenship and maximizing investment performance.
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We are focused on creating and maintaining a sustainable portfolio with properties that can withstand and adapt to the impacts of climate change, minimizing casualty loss risk and providing stable housing for our residents.
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To further strengthen our commitments to sustainability initiatives, we set ambitious targets to reduce our environmental impact across the portfolio aligned with global climate change initiatives. For example, we recently set a science-based target to reduce our absolute Scope 1, 2, and 3 greenhouse gas emissions (from our two biggest categories) by 30% by 2030 from a 2018 base year.
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Human Capital Our commitment to Human Capital starts with a highly skilled Board of Trustees that reflects a diverse range of thought and perspective. At Equity Residential, our team of approximately 2,500 employees is the driving force behind our continued success.
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We continue to enhance our environmental disclosure efforts by calculating and disclosing our Scope 3 emissions. We also issued two sustainable fixed-income instruments (each a “green bond”) designed to support projects that contribute to environmental sustainability, becoming the first multifamily REIT to ever issue a green bond.
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Employees can grow, innovate and contribute to our shared goals, including our purpose of “ Creating communities where people thrive.” This alignment of individual aspirations with our business goals creates a powerful partnership that drives innovation, excellence and lasting impact across our organization and industry. We believe it enhances employee job capabilities, advances our business and creates sustainable shareholder value.
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The Company also has a $10.0 million investment in a fund focused on early stage sustainability and climate change mitigation technology relevant to the built environment. As detailed below, we have a commitment to our employees’ engagement, diversity and inclusion and wellness that serves as the foundation of our corporate purpose.
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Our approach focuses on engaging, motivating and rewarding employees, ensuring they feel valued and contribute their best. Built on a foundation of continuous learning and development, we have implemented programs that support career progression, enhance managerial capabilities and create a culture of collaboration and engagement.
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The report, which includes Sustainability Accounting Standards Board disclosures and incorporates recommendations from the Task Force on Climate-Related Financial Disclosures, was reviewed and approved by the Corporate Governance Committee of our Board of Trustees, which monitors the Company’s ongoing corporate responsibility efforts. The Environmental, Social and Governance Report is not part of or incorporated into this report.
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These efforts ensure that our workforce is well-prepared to meet today’s challenges and equipped to lead the future.
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Human Capital At Equity Residential, our team of approximately 2,400 employees is the driving force of our success. We believe that our richly diverse work environment captures top talent, cultivates the best ideas and creates the widest possible platform for this success in line with our corporate purpose of “ Creating communities where people thrive”.
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This process involves partnering with managers to create and update job descriptions that accurately reflect the duties, skills, experience and education required for each role.
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Our core principles, affectionately named “ Ten Ways to Be a Winner,” guide our behavior as individuals and collectively as a team, helping us in our goal to deliver market-leading performance.
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We then benchmark the Company’s pay practices and budget as well as our job roles against third-party compensation surveys to determine the market value of each position. • During the year-end performance evaluation process, managers review and calibrate compensation for their team members in an effort to ensure fairness in our pay practices, while recognizing and rewarding top talent to keep them motivated. • We benefit from a diverse workforce, of which over 60% currently identify as ethnically diverse. • We are committed to fostering a safe, inclusive and productive workplace for all employees.
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As part of our Ten Ways to Be a Winner, we encourage our team members to raise questions, take educated risks, offer new ideas and help us make the right decisions. One way we live the “Ten Ways” is by enriching our culture through our core “Equity Values," which include Diversity & Inclusion, Social Responsibility, Sustainability and Total Wellbeing.
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We believe our strength lies in our differences.
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We have assembled the Equity Values Council, a diverse employee group reflective of the broader Company, to lead our efforts on these values by acting as change agents to drive initiatives, create goals and awareness, and encourage colleagues to participate in community service activities and wellness initiatives.
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We connect with emerging real estate talent in the communities we serve, sponsor internships and ensure educational opportunities are accessible to more students. 10 Table of Contents • We employ interns from universities nationwide and local colleges to provide pathways for students of various backgrounds interested in real estate.
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Diversity and Inclusion • Our commitment to diversity and inclusion starts with a highly skilled and diverse Board of Trustees. • We are committed to fostering a safe, inclusive and productive workplace for all employees.
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Training and Development • Our HR Transformation Learning & Development team is focused on driving innovation, connection and a culture of continuous growth. We work hand-in-hand with leaders and employees to create meaningful learning experiences that allow everyone to succeed.
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In recent years, we have created dedicated Diversity and Inclusion staffing to oversee this crucial work. • To further prioritize the importance of our diversity and inclusion efforts, our executives’ annual compensation goals include an evaluation of objective metrics measuring our Company’s progress in this regard. • We have the benefit of a diverse workforce, of which over 60% currently identify as ethnically diverse. 9 Table of Contents • A diversity and inclusion lens is embedded in our talent review processes.
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With tailored learning paths, we guide employees on personalized development journeys, helping them build the skills they need to thrive. • Leadership development is a key focus, giving current and future leaders the tools to inspire, innovate and lead with impact.
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This includes the development of our Overcoming Bias in Performance Review Toolkit, which is designed to provide practical bias interrupters and guidelines to improve fairness in the performance evaluation process. • We strategically identify opportunities to increase the diversity of our talent pipeline at all levels, including by actively seeking to source a pool of diverse candidates for mid-management and above positions in the communities where we serve, such as from Project Destined, Fannie Mae’s Future Housing Leaders, Howard University, Roosevelt University and Evanston Scholars. • We employ interns from universities across the nation and local colleges to provide pathways for students of various backgrounds interested in real estate.
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Whether it’s hands-on workshops, virtual learning or self-paced programs, our team blends diverse approaches to meet evolving needs and elevate our organization to the next level. Health, Total Rewards and Wellness • Equity Residential empowers employees to thrive across physical, mental, financial, career, social and community dimensions of wellbeing.
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Training and Development • We believe a successful workplace is one where employees constantly learn and grow. Our HR Transformation Learning & Development (“L&D”) team works regularly with leaders and employees to expand their knowledge and skills.
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By fostering an environment where employees bring their best selves to work, we enable impactful contributions to our business, culture and communities, underscoring the connection between employee wellbeing and organizational success. • Recognizing that one size does not fit all when supporting our employees, we offer a comprehensive and inclusive benefits package designed to meet a wide range of needs.
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L&D develops and delivers a wide range of training and development opportunities, from tactical to strategic, face-to-face to virtual, social learning to self-directed learning, and more. Health, Safety and Wellness • Equity Residential is committed to providing the tools and resources to help our employees achieve total wellbeing.
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Our programs include medical, dental and vision coverage; mental health and stress management resources; financial wellness tools; and support for proactive self-care.
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Having a thriving employee base is the pinnacle of our total wellbeing efforts. When employees bring their whole self to work, perform their best and are well supported, they can make powerful contributions to the business, culture and our communities.
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These efforts focus on mindfulness, stress management and building resilience to enhance productivity and overall wellbeing. • We prioritize proactive healthcare by covering 100% of preventive care for employees, a longstanding commitment that predates healthcare reform.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese events can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information, including information regarding our residents, prospective residents, employees and employees’ dependents. 20 Table of Contents Despite system redundancy, the implementation of security measures, required employee awareness training and the existence of a disaster recovery plan for our internal information technology systems, our systems and systems maintained by third-party vendors with which we do business are vulnerable to damage from any number of sources.
Biggest changeDespite system redundancy, the implementation of security measures, required employee awareness training and the existence of a disaster recovery plan, our information technology systems, including those maintained by third-party vendors with which we do business, are vulnerable to damage and interruption from any number of sources beyond our control, including energy blackouts, natural disasters, terrorism, geopolitical events, telecommunication failures and cyber attacks.
Joint ventures create risks including the following: • The possibility that our partners might refuse or be financially unable to make capital contributions when due or may fail to meet contractual obligations to cover development cost overruns and therefore we may be forced to make contributions to protect our investments; • These projects generally use mortgage debt (including variable rate constructions loans) to finance their activities at a higher leverage level than how we finance the Company as a whole; • We may be responsible to our partners for indemnifiable losses; • Our partners might at any time have business, tax planning or economic goals that are inconsistent with ours; • Our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests; and • The possibility that our partner is either unable to or unwilling to complete their contractual development activities.
Joint ventures create risks including the following: • The possibility that our partners might refuse or be financially unable to make capital contributions when due or may fail to meet contractual obligations to cover development cost overruns and therefore we may be forced to make contributions to protect our investments; • These projects generally use mortgage debt (including variable rate constructions loans) to finance their activities at a higher leverage level (and at a potentially higher cost due to higher variable rates) than how we finance the Company as a whole; • We may be responsible to our partners for indemnifiable losses; • Our partners might at any time have business, tax planning or economic goals that are inconsistent with ours; • Our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests; and • The possibility that our partner is either unable to or unwilling to complete their contractual development activities.
Many investors focus on positive corporate responsibility-related business practices and scores when choosing to allocate their capital and may consider a company's score as a reputational or other factor in making an investment decision. Government regulators' and investors' increased focus and activism related to corporate responsibility and similar matters may constrain our business operations or increase expenses or capital expenditures.
Many investors focus on corporate responsibility-related business practices and scores when choosing to allocate their capital and may consider a company's score as a reputational or other factor in making an investment decision. Government regulators' and investors' increased focus and activism related to corporate responsibility and similar matters may constrain our business operations or increase expenses or capital expenditures.
A low rating could result in a negative perception of the Company, exclusion of our securities from consideration by certain investors who may elect to invest with our competition instead and/or cause investors to reallocate their capital away from the Company, all of which could have an adverse impact on the price of our securities.
Our rating could result in a negative perception of the Company, exclusion of our securities from consideration by certain investors who may elect to invest with our competition instead and/or cause investors to reallocate their capital away from the Company, all of which could have an adverse impact on the price of our securities.
The geographic concentration of our properties could have an adverse effect on our operations. While the Company continues to diversify its portfolio with the addition of the expansion markets, the Company’s properties are still predominantly concentrated in our established coastal markets (generally within certain dense urban and suburban submarkets).
The geographic concentration of our properties could have an adverse effect on our operations. While the Company continues to diversify its portfolio with the addition of the Expansion Markets, the Company’s properties are still predominantly concentrated in our Established Markets (generally within certain dense urban and suburban submarkets).
Therefore, we may not be able to retain residents or attract new residents if we are unable to identify and cost effectively implement new, relevant technologies/amenities and keep up with constantly changing resident demand for the latest innovations in these areas. 12 Table of Contents The short-term nature of apartment leases exposes us more quickly to the effects of declining market rents, potentially making our results of operations and cash flows more volatile.
Therefore, we may not be able to retain residents or attract new residents if we are unable to identify and cost effectively implement new, relevant technologies/amenities and keep up with constantly changing resident demand for the latest innovations in these areas. 13 Table of Contents The short-term nature of apartment leases exposes us more quickly to the effects of declining market rents, potentially making our results of operations and cash flows more volatile.
Certain provisions of Maryland law applicable to REITs prohibit “business combinations” (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding securities, or with an affiliate 19 Table of Contents who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the Company’s outstanding voting securities (an “Interested Shareholder”), or with an affiliate of an Interested Shareholder.
Certain provisions of Maryland law applicable to REITs prohibit “business combinations” (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding securities, or with an affiliate 20 Table of Contents who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the Company’s outstanding voting securities (an “Interested Shareholder”), or with an affiliate of an Interested Shareholder.
Any additional issuance of Common Shares (including those issued under our At-The-Market ("ATM") program) or Units would reduce the percentage of our Common Shares and Units owned by existing investors. In most circumstances, shareholders and unitholders will not be entitled to vote on whether or not we issue additional Common Shares or Units.
Any additional issuance of Common Shares (including those issued under our At-The-Market ("ATM") program) or Units would reduce the percentage of our Common Shares and Units owned by existing investors. In some circumstances, shareholders and unitholders will not be entitled to vote on whether or not we issue additional Common Shares or Units.
We have experienced and may continue to experience an increase in costs due to general disruptions that affect the cost of labor and/or materials, such as supply chain disruptions, trade disputes, tariffs, labor unrest, geopolitical conflicts or other factors that create inflationary pressures.
We have experienced and may continue to experience an increase in costs due to general disruptions that affect the cost of labor and/or materials, such as supply chain disruptions, trade disputes, tariffs, immigration issues, labor unrest, geopolitical conflicts or other factors that create inflationary pressures.
In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT. 18 Table of Contents We may be subject to legislative or regulatory tax changes that could negatively impact our financial condition.
In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT. 19 Table of Contents We may be subject to legislative or regulatory tax changes that could negatively impact our financial condition.
Certain of these ground leases have payments subject to annual escalations and/or periodic fair market value adjustments which could adversely affect our financial condition or results of operations. 14 Table of Contents We face certain risks related to our Non-Residential operating activities.
Certain of these ground leases have payments subject to annual escalations and/or periodic fair market value adjustments which could adversely affect our financial condition or results of operations. 15 Table of Contents We face certain risks related to our Non-Residential operating activities.
These and other risks inherent in development projects, including the joint venture risks noted below, could result in increased costs or the delay or abandonment of opportunities. 13 Table of Contents We are subject to risks involved in real estate activity through joint ventures.
These and other risks inherent in development projects, including the joint venture risks noted below, could result in increased costs or the delay or abandonment of opportunities. 14 Table of Contents We are subject to risks involved in real estate activity through joint ventures.
Furthermore, we have in the past and may in the future decide to invest in expansion markets outside of our existing established markets by acquiring and/or developing properties in accordance with the Company's long-term investment strategy.
Furthermore, we have in the past and may in the future decide to invest in new markets outside of our existing Established Markets by acquiring and/or developing properties in accordance with the Company's long-term investment strategy.
We are also subject to laws, rules, and regulations in the United States, such as the California Privacy Rights Act (“CPRA”), relating to the collection, use, and security of resident, customer, employee and other data.
We are also subject to laws, rules, and regulations in the United States, such as the California Privacy Rights Act (“CPRA”), relating to the collection, use, and security of resident, tenant, employee and other data.
Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. Third parties may also sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from 17 Table of Contents that site.
Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. Third parties may also sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site.
In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could adversely impact the value of our properties or result in increased capital expenditures or operating expenses on our existing properties and our new development properties. 22 Table of Contents Provisions of our Declaration of Trust and Bylaws could inhibit changes in control.
In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could adversely impact the value of our properties or result in increased capital expenditures or operating expenses on our existing properties and our new development properties. Provisions of our Declaration of Trust and Bylaws could inhibit changes in control.
The Board of Trustees may use its powers to issue preferred shares and to set the terms of such securities to delay or prevent a change in control of the Company even if a change in control were in the interest of the security holders. Item 1B. Unresolve d Staff Comments None.
The Board of Trustees may use its powers to issue preferred shares and to set the terms of such securities to delay or prevent a change in control of the Company even if a change in control were in the interest of the security holders. 23 Table of Contents Item 1B. Unresolve d Staff Comments None.
In addition, the criteria by which companies are rated for their efforts may change, which could cause us to receive lower scores than in previous years.
In addition, the criteria by which companies are rated for their efforts may change, which could cause us to receive different scores than in previous years.
The Company’s property, general liability and workers compensation insurance policies provide coverage with substantial per occurrence deductibles and/or self-insured retentions. These self-insurance retentions can be a material portion of insurance losses in excess of the base deductibles.
The Company’s property, general liability and workers compensation insurance policies provide coverage with substantial per occurrence deductibles and/or self-insured retentions. These self-insurance retentions can be a material portion of insurance losses in 22 Table of Contents excess of the base deductibles.
Our competitors or other third parties may incorporate AI in their business operations more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of 21 Table of Contents operations.
Our competitors or other third parties may incorporate AI in their business operations more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations.
Factors that may impact cash flows and real estate values include, but are not limited to: • Local economic conditions, particularly oversupply or reductions in demand; • National, regional and local political and regulatory climates, governmental fiscal health and governmental policies; • The inability or unwillingness of residents to pay rent increases; • Increases in our operating expenses due to inflationary or other pressures; • Cost and availability of labor and materials required to maintain our properties at acceptable standards; • Availability of attractive financing opportunities; • Changes in social preferences, demographics or migration patterns; and • Additional risks that are discussed below.
Factors that have in the past and may in the future impact cash flows and real estate values include, but are not limited to: • Local economic conditions, particularly oversupply or reductions in demand; • National, regional and local political and regulatory climates, governmental fiscal health and governmental policies; • The inability or unwillingness of residents to pay rent increases; • Increases in our operating expenses due to inflation, tariffs, immigration issues or other cost pressures; • Cost and availability of labor and materials required to maintain our properties at acceptable standards; • Availability of attractive financing opportunities; • Changes in social preferences, demographics or migration patterns; and • Additional risks that are discussed below.
We may be unable to integrate the operations of newly acquired large portfolios or companies and realize the anticipated synergies and other benefits or do so within the anticipated time frame.
We may be unable to integrate the operations or accurately assess the liabilities of newly acquired large portfolios or companies and realize the anticipated synergies and other benefits or do so within the anticipated time frame.
Changes in U.S. accounting standards may materially and adversely affect the reporting of our operations. The Company follows GAAP, which is established by the Financial Accounting Standards Board (“FASB”), an independent body whose standards are recognized by the Securities and Exchange Commission (“SEC”) as authoritative for publicly held companies.
Changes in U.S. accounting standards may materially and adversely affect the reporting of our operations. The Company follows GAAP, which is established by the Financial Accounting Standards Board (“FASB”), an independent body whose standards are recognized by the SEC as authoritative for publicly held companies.
Earthquake risk: Our policies insuring against earthquake losses have substantial deductibles which are applied to the values of the buildings involved in the loss. With the geographic concentration of our properties, a single earthquake affecting a market may have a significant negative effect on our financial condition and results of operations.
Earthquake risk: Our policies insuring against earthquake losses have substantial deductibles which are applied to the values of the buildings involved in the loss. With the geographic concentration of our properties, a single earthquake affecting a market may have a significant negative effect on our financial condition and results of operations, as well as insurers' ability to pay claims.
Therefore, it is possible that the total tax burden to shareholders resulting from an elective stock dividend may exceed the amount of cash received by the shareholder. Inapplicability of Maryland law limiting certain changes in control.
Therefore, it is possible that the total tax burden to shareholders resulting from an elective stock dividend may exceed the amount of cash received by the shareholder. Certain provisions of Maryland law could inhibit changes in control.
Despite the fact that we monitor and perform a comprehensive review of businesses that we contract with that represent a cybersecurity risk to the organization, the systems of these third-party service providers may contain defects in design or other problems that could unexpectedly compromise personally identifiable information.
Despite the fact that we monitor and perform a comprehensive review of businesses that we contract with that represent a cybersecurity risk to the organization, the systems of these third-party service providers may contain defects in design or other problems that could unexpectedly compromise personally 21 Table of Contents identifiable information or lead to other types of cyber breaches.
Noncompliance could result in fines, subject us to lawsuits and require us to remediate or repair the noncompliance. Existing requirements could change and compliance with future requirements may require significant unanticipated expenditures that could adversely affect our financial condition or results of operations. Environmental problems are possible and can be costly.
Noncompliance could result in fines, subject us to lawsuits and require us to remediate or repair the noncompliance. Existing requirements could change and compliance with future requirements may require significant unanticipated expenditures that could adversely affect our financial condition or results of operations.
Results cannot be predicted with certainty, and an unfavorable outcome in litigation could result in liability material to our financial condition or results of operations. Insurance policies can be costly and may not cover all losses, which may adversely affect our financial condition or results of operations.
Results cannot be predicted with certainty, and an unfavorable outcome in litigation could result in liability material to our financial condition or results of operations. See Item 3, Legal Proceedings , for additional discussion. Insurance policies can be costly and may not cover all losses, which may adversely affect our financial condition or results of operations.
The terms of our credit agreements, including our revolving credit facility and the indentures under which a substantial portion of our unsecured debt was issued, require us to comply with a number of financial covenants.
Financial covenants could limit operational flexibility and affect our overall financial position. The terms of our credit agreements, including our revolving credit facility and the indentures under which a substantial portion of our unsecured debt was issued, require us to comply with a number of financial covenants.
We may not be able to recover these expenses in whole or in any part from our service providers, our insurers or any other responsible parties. As a result, there can be no assurance that our financial results would not be negatively impacted.
We may not be able to recover these expenses in whole or in any part from our service providers, our insurers or any other responsible parties. Our insurance coverage may not be sufficient to cover all losses related to cybersecurity incidents. As a result, there can be no assurance that our financial results would not be negatively impacted.
In addition, a downgrade below investment grade would likely cause us to lose access to the commercial paper markets and would require us to post cash collateral and/or letters of credit in favor of some of our secured lenders to cover our self-insured property and liability insurance deductibles or to obtain lower deductible insurance compliant with the lenders’ requirements at the lower ratings level. 16 Table of Contents Financial covenants could limit operational flexibility and affect our overall financial position.
In addition, a downgrade below investment grade would likely cause us to lose access to the commercial paper market and would require us to post cash collateral 17 Table of Contents and/or letters of credit in favor of some of our secured lenders to cover our self-insured property and liability insurance deductibles or to obtain lower deductible insurance compliant with the lenders’ requirements at the lower ratings level.
This would likely have a significant negative impact on the value of our securities. In addition, certain of our subsidiary entities have elected to be taxed as REITs. As such, each must separately satisfy all of the requirements to qualify for REIT status.
This would likely have a significant negative impact on the value of our securities. In addition, we own and may in the future own additional interests in subsidiary entities that have elected or will elect to be taxed as REITs. As such, each must separately satisfy all of the requirements to qualify for REIT status.
We may not be able to lease new space for rents that are consistent with our projections or for market rates. Also, when leases for our existing Non-Residential space expire, the space may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms.
Also, when leases for our existing Non-Residential space expire or are otherwise terminated, the space may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms.
In part due to increasing pressure from advocacy groups, a growing number of state and local governments have enacted and may continue to consider enacting and/or expanding rent control, rent stabilization, eviction moratoriums or other similar regulations. In addition, the federal government has recently considered imposing rent regulations on multifamily properties secured by government-sponsored debt.
In part due to increasing pressure from advocacy groups, a growing number of state and local governments have enacted and may continue to consider enacting and/or expanding rent control, rent stabilization, eviction moratoriums or other regulations that restrict the methods and strategies by which we operate our business.
Both global and locally targeted health events could materially affect areas where our properties, corporate/regional offices or major service providers are located.
General Risk Factors Risk of Pandemics or Other Health Crises. Pandemics, epidemics or other health crises or public emergencies have and could in the future disrupt our business. Both global and locally targeted health events could materially affect areas where our properties, corporate/regional offices or major service providers are located.
We may abandon opportunities that we have already begun to explore for a number of reasons, and as a result, we may fail to recover costs already incurred in exploring those opportunities. We may also be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third-party permits and authorizations.
We may also be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third-party permits and authorizations.
Dislocations and disruptions in capital markets could result in increased costs or lack of availability of debt financing (including under our commercial paper program) and equity financing. Such events may affect our ability to refinance existing debt, require us to 15 Table of Contents utilize higher cost alternatives and/or impair our ability to adjust to changing economic and business conditions.
Such events may affect our ability to refinance existing debt, require us to utilize higher cost alternatives and/or impair our ability to adjust to changing economic and business conditions.
To the extent a pandemic, epidemic or other health crisis adversely affects our business, results of operations, cash flows and financial condition, it may also continue to heighten many of the other risks described elsewhere in this Item 1A, Risk Factors . Significant inflation could negatively impact our business.
These events have and could in the future have an adverse effect on our business, results of operations, financial condition and liquidity, which could also heighten many of the other risks described elsewhere in this Item 1A, Risk Factors . Significant inflation could negatively impact our business.
Further, there is no assurance that these companies can obtain additional capital or resources or generate sufficient cash flow to sustain operations and successfully execute their strategy. The performance of these investments may also rely on the services of a limited number of key individuals, the loss of whom could significantly adversely affect such investments’ performance.
The performance of these investments may also rely on the services of a limited number of key individuals, the loss of whom could significantly adversely affect such investments’ performance.
Removed
As permitted by Maryland law, however, the Board of Trustees of the Company has opted out of these restrictions with respect to any business combination involving certain of Samuel Zell's affiliates and persons acting in concert with them. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to a business combination involving us and/or any of them.
Added
We may abandon opportunities that we have already begun to explore for a number of reasons, and as a result, we may fail to recover costs already incurred in exploring those opportunities, potentially causing an impairment charge.
Removed
Such business combinations may not be in the best interest of our security holders. General Risk Factors Risk of Pandemics or Other Health Crises. Pandemics, epidemics or other health crises have and could in the future disrupt our business.
Added
Further, there is no assurance that these companies can obtain additional capital or resources, generate sufficient cash flow to sustain operations and successfully execute their strategy or that their equity will become sufficiently liquid for us to effectively monetize our investment.
Removed
These events have and could in the future have an adverse effect on our business, results of operations, financial condition and liquidity in a number of ways, including, but not limited to: • The deterioration of global economic conditions as a result of such a crisis could ultimately decrease occupancy levels and pricing across our portfolio and/or increase concessions, reduce or defer our residents’ spending, result in changes in resident preferences (including changes resulting from increased employer flexibility to work from home) or negatively impact our residents’ and tenants’ ability to pay their rent on time or at all; • Local and national authorities expanding or extending certain measures that impose restrictions on our ability to enforce residents’ or tenants’ contractual rental obligations (such as eviction moratoriums or rental forgiveness) and limit our ability to raise rents or charge certain fees; • The risk of a prolonged outbreak and/or multiple waves of an outbreak could cause long-term damage to economic conditions, which in turn could diminish our access to capital at attractive terms and/or cause material declines in the fair value of our assets, leading to asset impairment charges; and • The potential inability to maintain adequate staffing at our properties and corporate/regional offices due to an outbreak and/or changes in employee preferences causing them to leave their jobs.
Added
We may not be able to lease new space for rents that are consistent with our projections or for market rates.
Added
Dislocations and disruptions in capital markets could result in increased costs or lack of availability of debt financing (including under our commercial paper program) and equity financing. This includes any disruptions that may occur as a result of the potential 16 Table of Contents privatization of the currently government sponsored organizations, Fannie Mae and Freddie Mac.
Added
In addition, the federal government has recently considered imposing rent regulations on multifamily properties secured by government-sponsored debt.
Added
Further, laws and regulations at the federal, state and local level requiring climate-related disclosures, including the rules proposed by the SEC and the legislation recently enacted in the State of California, may increase compliance and data collection costs if and/or when such laws and regulations become effective. 18 Table of Contents Environmental problems are possible and can be costly.
Added
These events can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information, including information regarding our residents, prospective residents, employees and employees’ dependents.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed15 unchanged
Biggest changeSpecifically, our Senior Vice President of IT and our VP of IT Infrastructure and Security combined have over 30 years of technology and cybersecurity experience. The team provides regular reports to senior management and affected departments on various cybersecurity threats, assessments and findings.
Biggest changeSpecifically, our Senior Vice President and Chief Technology Officer and our VP of IT Infrastructure and Security combined have over 30 years of technology and cybersecurity experience. T he team provides regular reports to senior management and affected departments on various cybersecurity threats, assessments and findings.
Key members of management, including representatives from IT, operations, legal, finance, risk management and internal audit, serve on the Company’s senior security incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified, and certain cybersecurity incidents are escalated to the Company’s executives.
Key members of management, including representatives from information technology ("IT"), operations, legal, finance, risk management and internal audit, serve on the Company’s senior security incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified, and certain cybersecurity incidents are escalated to the Company’s executives.
See Item 1A, Risk Factors , for a discussion of cybersecurity risks. 23 Table of Contents Governance Our Information Technology Security Team, under the oversight of our Senior Vice President of IT and the leadership of our VP of IT Infrastructure and Security, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response.
See Item 1A, Risk Factors , for a discussion of cybersecurity risks. 24 Table of Contents Governance Our Information Technology Security Team, under the oversight of our Senior Vice President and Chief Technology Officer and the leadership of our VP of IT Infrastructure and Security, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response.

Item 2. Properties

Properties — owned and leased real estate

12 edited+1 added−4 removed3 unchanged
Biggest changeThe properties in various stages of development and lease-up at December 31, 2023 are included in the following table: Development and Lease-Up Projects as of December 31, 2023 (Amounts in thousands except for project and apartment unit amounts) Estimated/Actual Projects Location Ownership Percentage No. of Apartment Units Total Budgeted Capital Cost (1) Total Book Value to Date Total Debt (2) Percentage Completed Start Date Initial Occupancy Completion Date Stabilization Date Percentage Leased / Occupied CONSOLIDATED: Projects Under Development: Laguna Clara II Santa Clara, CA 100% 225 $ 152,621 $ 78,036 $ — 53% Q2 2022 Q4 2024 Q1 2025 Q4 2025 – / – Projects Under Development - Consolidated 225 152,621 78,036 — Projects Completed Not Stabilized: Reverb (fka 9th and W) (3) Washington, D.C. 92% 312 108,027 104,651 — 100% Q3 2021 Q2 2023 Q2 2023 Q3 2024 82% / 79% Projects Completed Not Stabilized - Consolidated 312 108,027 104,651 — UNCONSOLIDATED: Projects Under Development: Alloy Sunnyside (4) Denver, CO 80% 209 70,004 62,071 27,304 94% Q3 2021 Q2 2024 Q2 2024 Q1 2025 – / – Alexan Harrison (4) Harrison, NY 62% 450 200,664 175,135 77,058 92% Q3 2021 Q1 2024 Q4 2024 Q2 2026 – / – Solana Beeler Park (4) Denver, CO 90% 270 85,206 56,178 22,858 64% Q4 2021 Q2 2024 Q3 2024 Q1 2025 – / – Remy (Toll) (4) Frisco, TX 75% 357 98,937 77,170 31,494 80% Q1 2022 Q1 2024 Q4 2024 Q3 2025 – / – Sadie (fka Settler) (Toll) (4) Fort Worth, TX 75% 362 82,775 55,522 14,944 69% Q2 2022 Q2 2024 Q3 2024 Q3 2025 – / – Lyle (Toll) (3) Dallas, TX 75% 334 86,332 52,914 21,962 66% Q3 2022 Q2 2024 Q3 2024 Q1 2026 – / – Projects Under Development - Unconsolidated 1,982 623,918 478,990 195,620 Total Development Projects - Consolidated 537 260,648 182,687 — Total Development Projects - Unconsolidated 1,982 623,918 478,990 195,620 Total Development Projects 2,519 $ 884,566 $ 661,677 $ 195,620 (1) Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
Biggest changeThe properties in various stages of development and lease-up at December 31, 2024 are included in the following table: Development and Lease-Up Projects as of December 31, 2024 (Amounts in thousands except for project and apartment unit amounts) Estimated/Actual Projects Location Ownership Percentage No. of Apartment Units Total Budgeted Capital Cost Total Book Value to Date Total Debt (1) Percentage Completed Start Date Initial Occupancy Completion Date Stabilization Date Percentage Leased / Occupied CONSOLIDATED: Projects Under Development: Lorien (fka Laguna Clara II) Santa Clara, CA 100% 225 $ 152,621 $ 140,939 $ — 97% Q2 2022 Q1 2025 Q1 2025 Q4 2025 2% / – The Basin Wakefield, MA 95% 440 232,172 120,767 — 43% Q1 2024 Q4 2025 Q3 2026 Q2 2027 – / – Projects Under Development - Consolidated 665 384,793 261,706 — UNCONSOLIDATED: Projects Under Development: Alexan Harrison Harrison, NY 62% 450 200,664 198,595 108,413 99% Q3 2021 Q1 2024 Q1 2025 Q2 2026 67% / 62% Solana Beeler Park Denver, CO 90% 270 85,206 82,803 48,063 98% Q4 2021 Q3 2024 Q2 2025 Q4 2025 19% / 15% Modera Bridle Trails Kirkland, WA 95% 369 185,282 66,603 — 19% Q3 2024 Q2 2027 Q3 2027 Q4 2028 – / – Modera South Shore Marshfield, MA 95% 270 121,918 38,486 — 17% Q3 2024 Q1 2026 Q4 2026 Q2 2027 – / – Projects Under Development - Unconsolidated 1,359 593,070 386,487 156,476 Projects Completed Not Stabilized: Alloy Sunnyside Denver, CO 80% 209 70,004 69,277 35,815 100% Q3 2021 Q2 2024 Q2 2024 Q3 2025 40% / 31% Remy (Toll) Frisco, TX 75% 357 98,937 96,869 49,855 97% Q1 2022 Q2 2024 Q4 2024 Q3 2025 68% / 64% Sadie (fka Settler) (Toll) Fort Worth, TX 75% 362 82,775 77,311 37,374 98% Q2 2022 Q2 2024 Q4 2024 Q3 2025 60% / 55% Lyle (Toll) (2) Dallas, TX 75% 334 86,332 82,949 46,676 98% Q3 2022 Q1 2024 Q4 2024 Q1 2026 60% / 55% Projects Completed Not Stabilized - Unconsolidated 1,262 338,048 326,406 169,720 Total Development Projects - Consolidated 665 384,793 261,706 — Total Development Projects - Unconsolidated 2,621 931,118 712,893 326,196 Total Development Projects 3,286 $ 1,315,911 $ 974,599 $ 326,196 (1) All unconsolidated projects are being partially funded with project-specific construction loans.
This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented. b.
This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented, which has not yet occurred. b.
As of December 31, 2023, the property had a Physical Occupancy of 64.5%. This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented.
As of December 31, 2024, the property had a Physical Occupancy of 75.9%. This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented.
Laguna Clara located in Santa Clara, CA containing 222 apartment units was removed from the same store portfolio in the second quarter of 2022 due to a major renovation and redevelopment project, including the demolition of 42 apartment units. As of December 31, 2023, the property had a Physical Occupancy of 67.4%.
Lorien Ivy (fka Laguna Clara) located in Santa Clara, CA containing 222 apartment units was removed from the same store portfolio in the second quarter of 2022 due to a major renovation and redevelopment project, including the demolition of 42 apartment units. As of December 31, 2024, the property had a Physical Occupancy of 95.9%.
Item 2. P roperties As of December 31, 2023, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 302 properties located in 10 states and the District of Columbia consisting of 80,191 apartment units.
Item 2. P roperties As of December 31, 2024, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 311 properties located in 10 states and the District of Columbia consisting of 84,249 apartment units.
The following tables provide a rollforward of the apartment units included in Same Store Properties (please refer to the Definitions section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations ) and a reconciliation of apartment units included in Same Store Properties to those included in Total Properties for the year ended December 31, 2023: Year Ended December 31, 2023 Properties Apartment Units Same Store Properties at December 31, 2022 283 72,872 2021 acquisitions 16 4,326 2023 dispositions (11 ) (912 ) Other — 11 Same Store Properties at December 31, 2023 288 76,297 Year Ended December 31, 2023 Properties Apartment Units Same Store 288 76,297 Non-Same Store: 2023 acquisitions 4 1,183 2022 acquisitions 1 172 2021 acquisitions not yet stabilized 1 421 Properties removed from same store (1) 2 819 Lease-up properties not yet stabilized (2) 5 1,298 Other 1 1 Total Non-Same Store 14 3,894 Total Properties and Apartment Units 302 80,191 25 Table of Contents Note: Properties are considered “stabilized” when they have achieved 90% occupancy for three consecutive months.
The following tables provide a rollforward of the apartment units included in Same Store Properties (please refer to the Definitions section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations ) and a reconciliation of apartment units included in Same Store Properties to those included in Total Properties for the year ended December 31, 2024: December 31, 2024 Properties Apartment Units Same Store Properties at December 31, 2023 288 76,297 2021 acquisitions (not stabilized until 2022) 1 421 2022 acquisitions 1 172 2024 dispositions (1) (13 ) (2,598 ) Lease-up properties stabilized (1) 4 986 Other — 21 Same Store Properties at December 31, 2024 281 75,299 December 31, 2024 Properties Apartment Units Same Store 281 75,299 Non-Same Store: 2024 acquisitions 18 5,373 2023 acquisitions 4 1,183 Properties removed from same store (2) 2 819 Lease-up properties not yet stabilized (3) 5 1,574 Other 1 1 Total Non-Same Store 30 8,950 Total Properties and Apartment Units 311 84,249 Note: Properties are considered “stabilized” when they have achieved 90% Physical Occupancy for three consecutive months.
Properties are included in same store when they are stabilized for all of the current and comparable periods presented. (1) Consists of two properties which were removed from the same store portfolio as discussed further below: a.
Properties are included in same store when they are stabilized for all of the current and comparable periods presented. (1) Includes one former third-party master-leased property which was stabilized and subsequently sold. 26 Table of Contents (2) Consists of two properties which were removed from the same store portfolio as discussed further below: a.
The Company’s properties are summarized by building type in the following table: Type Properties Apartment Units Average Apartment Units Garden 90 24,553 273 Mid/High-Rise 212 55,638 262 302 80,191 266 Garden is generally defined as properties with two and/or three story buildings while mid/high-rise is generally defined as properties with greater than three story buildings.
The Company’s properties are summarized by building type in the following table: Type Properties Apartment Units Average Apartment Units Garden 95 26,087 275 Mid/High-Rise 216 58,162 269 311 84,249 271 Garden is generally defined as properties with two and/or three story buildings while mid/high-rise is generally defined as properties with greater than three story buildings.
The Company’s properties are summarized by ownership type in the following table: Properties Apartment Units Wholly Owned Properties 288 77,131 Partially Owned Properties – Consolidated 14 3,060 302 80,191 24 Table of Contents The following table sets forth certain information by market relating to the Company’s properties at December 31, 2023: Portfolio Summary Markets/Metro Areas Properties Apartment Units % of Stabilized Budgeted NOI (1) Average Rental Rate (2) Established Markets: Los Angeles 58 14,732 17.1 % $ 2,929 Orange County 13 4,028 5.4 % 2,873 San Diego 12 2,878 4.0 % 3,108 Subtotal – Southern California 83 21,638 26.5 % 2,942 Washington, D.C. 48 15,028 16.3 % 2,657 San Francisco 43 11,667 15.4 % 3,303 New York 34 8,536 14.1 % 4,566 Boston 27 7,170 11.8 % 3,574 Seattle 44 9,267 10.4 % 2,561 Subtotal – Established Markets 279 73,306 94.5 % 3,145 Expansion Markets: Denver 9 2,792 2.8 % 2,411 Atlanta 7 2,111 1.6 % 2,169 Dallas/Ft.
The Company’s properties are summarized by ownership type in the following table: Properties Apartment Units Wholly Owned Properties 295 80,331 Partially Owned Properties – Consolidated 12 2,656 Partially Owned Properties – Unconsolidated 4 1,262 311 84,249 25 Table of Contents The following table sets forth certain information by market relating to the Company’s properties at December 31, 2024: Portfolio Summary Markets/Metro Areas Properties Apartment Units % of Stabilized Budgeted NOI Average Rental Rate Established Markets: Los Angeles 58 14,733 16.7 % $ 2,942 Orange County 12 3,718 4.7 % 2,949 San Diego 11 2,649 3.7 % 3,189 Subtotal – Southern California 81 21,100 25.1 % 2,974 Washington, D.C. 43 13,846 15.1 % 2,788 San Francisco 40 11,315 14.8 % 3,351 New York 34 8,536 14.1 % 4,690 Boston 27 7,237 11.3 % 3,643 Seattle 42 8,854 9.9 % 2,636 Subtotal – Established Markets 267 70,888 90.3 % 3,232 Expansion Markets: Denver 15 4,408 4.0 % 2,369 Atlanta 14 4,356 3.1 % 2,020 Dallas/Ft.
Worth 4 1,241 0.7 % 1,935 Austin 3 741 0.4 % 1,819 Subtotal – Expansion Markets 23 6,885 5.5 % 2,188 Total 302 80,191 100.0 % $ 3,063 Note: Projects under development are not included in the Portfolio Summary until construction has been completed.
Worth 12 3,855 2.3 % 1,965 Austin 3 742 0.3 % 1,754 Subtotal – Expansion Markets 44 13,361 9.7 % 2,105 Total 311 84,249 100.0 % $ 3,056 Note: Projects under development are not included in the Portfolio Summary until construction has been completed.
(2) Consists of properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented. Also includes one former third-party master-leased property that was not stabilized.
(3) Consists of properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented. For the year ended December 31, 2024, the Company’s same store Physical Occupancy was 96.2% and its total portfolio-wide Physical Occupancy, which includes completed development properties in various stages of lease-up, was 96.0%.
For the year ended December 31, 2023, the Company’s same store Physical Occupancy was 95.9% and its total portfolio-wide Physical Occupancy, which includes completed development properties in various stages of lease-up, was 95.4%. Certain of the Company’s properties are encumbered by mortgages and additional detail can be found on Schedule III – Real Estate and Accumulated Depreciation.
Certain of the Company’s properties are encumbered by mortgages and additional detail can be found on Schedule III – Real Estate and Accumulated Depreciation.
Removed
(1) % of Stabilized Budgeted NOI - Represents original budgeted 2024 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.
Added
None of these loans are recourse to the Company. (2) The land parcel under this project is subject to a long-term ground lease.
Removed
(2) Average Rental Rate - Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented.
Removed
Amounts for partially owned consolidated and unconsolidated properties are presented at 100% of the project. (2) Except for Reverb where the Company paid off the third-party construction loan during the year ended December 31, 2023, all non-wholly owned projects are being partially funded with project-specific construction loans. None of these loans are recourse to the Company.
Removed
(3) The land parcels under these projects are subject to long-term ground leases. (4) The Total Budgeted Capital Cost on these projects increased by an aggregate of $13.0 million or 2.5% of initial budget primarily due to higher than budgeted interest incurred on construction loans.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Lega l Proceedings The Company has been named as a defendant in a number of cases filed in late 2022 and 2023 alleging antitrust violations by RealPage, Inc., a seller of revenue management software products, and various owners and/or operators of multifamily housing, including us, that have utilized these products.
Biggest changeAs of December 31, 2024 and December 31, 2023, the Company does not believe there is any litigation pending or threatened against it that, either individually or in the aggregate and inclusive of the matters accrued for as noted above, may reasonably be expected to have a material adverse effect on the Company and its financial condition. 27 Table of Contents The Company has been named as a defendant in a number of cases filed in late 2022 and 2023 alleging antitrust violations by RealPage, Inc., a seller of revenue management software products, and various owners and/or operators of multifamily housing, including us, that have utilized these products.
Another case with similar allegations has been filed by the District of Columbia against 26 Table of Contents RealPage, Inc. and a number of multifamily owners and/or operators, including us. We believe these various lawsuits are without merit and we intend to vigorously defend against them.
Another case with similar allegations has been filed by the District of Columbia against RealPage, Inc. and a number of multifamily owners and/or operators, including us, and no assurance can be given that similar additional cases will not be filed in the future. We believe these various lawsuits are without merit and we intend to vigorously defend against them.
As of December 31, 2023, the Company does not believe there is any litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company. Item 4. Mine Sa fety Disclosures Not applicable. 27 Table of Contents PART II
While the resolution of this matter cannot be predicted with certainty, the Company does not believe that the eventual outcome will have a material adverse effect on the Company and its financial condition. Item 4. Mine Sa fety Disclosures Not applicable. 28 Table of Contents PART II
Added
Item 3. Lega l Proceedings The Company is involved in various pending and threatened legal proceedings which arise in the ordinary course of business. The Company evaluates these litigation matters on an ongoing basis, but in no event less than quarterly, in assessing the adequacy of its accruals and disclosures.
Added
For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, the Company records new accruals and/or adjusts existing accruals that represent its best estimate of the loss incurred based on the facts and circumstances known at that time.
Added
As of December 31, 2024 and December 31, 2023, the Company’s litigation accruals approximated $42.4 million and $17.1 million, respectively, and are included in other liabilities in the consolidated balance sheets. Actual losses may differ materially from the amounts noted above and the ultimate outcome of these legal proceedings is generally not yet determinable.
Added
The Company is named as a defendant in a class action in the United States District Court for the Northern District of California filed in 2016 which alleges that the amount of late fees charged by the Company were improperly determined under California law. The plaintiffs are seeking monetary damages and other relief.
Added
On April 8, 2024, the Court issued certain findings of facts and conclusions of law that are adverse to the Company’s legal position. At this time, the Company is continuing to defend the action.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn light of the manner of the sale and information obtained by EQR from the limited partners in connection with these transactions, EQR believes it may rely on these exemptions.
Biggest changeIn light of the manner of the sale and information obtained by EQR from the limited partners in connection with these transactions, EQR believes it may rely on these exemptions. Item 6. Reserved 29 Table of Contents
Unregistered Common Shares Issued in the Quarter Ended December 31, 2023 (Equity Residential) During the quarter ended December 31, 2023, EQR issued 151,199 Common Shares in exchange for 151,199 OP Units held by various limited partners of ERPOP.
Unregistered Common Shares Issued in the Quarter Ended December 31, 2024 (Equity Residential) During the quarter ended December 31, 2024, EQR issued 19,181 Common Shares in exchange for 19,181 OP Units held by various limited partners of ERPOP.
At February 8, 2024, the number of record holders of Common Shares was approximately 1,710 and 379,553,591 Common Shares were outstanding. At February 8, 2024, the number of record holders of Units in the Operating Partnership was approximately 450 and 391,291,526 Units were outstanding.
At February 6, 2025, the number of record holders of Common Shares was approximately 1,630 and 379,705,225 Common Shares were outstanding. At February 6, 2025, the number of record holders of Units in the Operating Partnership was approximately 450 and 391,519,896 Units were outstanding.
Removed
Common Shares Repurchased in the Quarter Ended December 31, 2023 The Company repurchased and retired the following Common Shares during the quarter ended December 31, 2023: Period Total Number of Common Shares Purchased (1) Weighted Average Price Paid Per Share (1), (2) Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Common Shares that May Yet Be Purchased Under the Plans or Programs (1), (3) October 1, 2023 - October 31, 2023 — $ — — 13,000,000 November 1, 2023 - November 30, 2023 664,696 $ 55.44 664,696 12,335,304 December 1, 2023 - December 31, 2023 199,690 $ 61.28 199,690 12,135,614 Total 864,386 $ 56.79 864,386 (1) The Common Shares repurchased during the quarter ended December 31, 2023 represent Common Shares repurchased under the Company’s publicly announced share repurchase program approved by its Board of Trustees.
Removed
The Company's share repurchase program was publicly announced on July 30, 2013 and the increase to its 13.0 million shares capacity was publicly announced on August 4, 2016. The program does not have an expiration date and may be suspended or discontinued at any time and does not obligate the Company to make any repurchases of its Common Shares.
Removed
In January 2024, the Company’s Board of Trustees approved replenishing the Company’s share repurchase program authorization back to its original 13.0 million shares. (2) Weighted average price paid per share excludes costs associated with the repurchases. (3) The number of shares available for purchase under the Company’s publicly announced share repurchase program authorized by the Board of Trustees.
Removed
The Company may repurchase Common Shares under its share repurchase program in open market or privately negotiated transactions. The timing and actual number of shares repurchased under the repurchase program depend on a variety of factors, including price, general business and market conditions and other investment opportunities. Item 6. Reserved 28 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBusiness Objectives and Operating and Investing Strategies See Item 1, Business , for discussion regarding the Company’s business objectives and operating and investing strategies. 29 Table of Contents Results of Operations 2022 and 2023 Transactions In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the years ended December 31, 2022 and 2023: Portfolio Rollforward ($ in thousands) Properties Apartment Units Purchase Price Acquisition Cap Rate 12/31/2021 310 80,407 Acquisitions: Consolidated Rental Properties 1 172 $ 113,000 3.5 % Unconsolidated Land Parcels (1) — — $ 56,886 Sales Price Disposition Yield Dispositions: Consolidated Rental Properties (3 ) (945 ) $ (746,150 ) (3.4 )% Configuration Changes — (37 ) 12/31/2022 308 79,597 Purchase Price Acquisition Cap Rate Acquisitions: Consolidated Rental Properties 2 577 $ 189,734 (3) 5.1 % Consolidated Rental Properties – Not Stabilized (2) 2 606 $ 176,600 5.9 % Sales Price Disposition Yield Dispositions: Consolidated Rental Properties (11 ) (912 ) $ (379,893 ) (5.5 )% Completed Developments – Consolidated 1 312 Configuration Changes — 11 12/31/2023 302 80,191 (1) The purchase price listed represents the total consideration for the closing of the respective joint ventures.
Biggest changeBusiness Objectives and Operating and Investing Strategies See Item 1, Business , for discussion regarding the Company’s business objectives and operating and investing strategies. 30 Table of Contents Results of Operations 2023 and 2024 Transactions In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the years ended December 31, 2023 and 2024: Portfolio Rollforward ($ in thousands) Properties Apartment Units Purchase Price Acquisition Cap Rate 12/31/2022 308 79,597 Acquisitions: Consolidated Rental Properties 2 577 $ 189,734 5.1 % Consolidated Rental Properties – Not Stabilized 2 606 $ 176,600 5.9 % Sales Price Disposition Yield Dispositions: Consolidated Rental Properties (11 ) (912 ) $ (379,893 ) (5.5 )% Completed Developments – Consolidated 1 312 Configuration Changes — 11 12/31/2023 302 80,191 Purchase Price Acquisition Cap Rate Acquisitions: Consolidated Rental Properties 16 4,986 $ 1,438,250 5.1 % Consolidated Rental Properties – Not Stabilized 2 387 $ 153,845 5.5 % Unconsolidated Land Parcels — — $ 33,394 Sales Price Disposition Yield Dispositions: Consolidated Rental Properties (13 ) (2,598 ) $ (975,641 ) (5.4 )% Completed Developments – Unconsolidated 4 1,262 Configuration Changes — 21 12/31/2024 311 84,249 Acquisitions • The consolidated properties acquired in 2023 are located in the Atlanta (3) and Denver markets; • In 2023, the Company acquired its joint venture partner's 10.0% interest in a 200-unit apartment property located in the San Francisco market for $4.6 million, of which the Company paid $3.7 million in cash and ERPOP issued $0.9 million of 3.00% Series Q Preference Units.
Definitions The definition of certain terms described above or below are as follows: • Acquisition Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset.
Definitions The definition of certain terms described above or below are as follows: • Acquisition Capitalization Rate or Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset.
The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property. • Average Rental Rate – Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented. 40 Table of Contents • Building Improvements – Includes roof replacement, paving, building mechanical equipment systems, exterior siding and painting, major landscaping, furniture, fixtures and equipment for amenities and common areas, vehicles and office and maintenance equipment. • Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $150-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset.
The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property. • Average Rental Rate – Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented. • Building Improvements – Includes roof replacement, paving, building mechanical equipment systems, exterior siding and painting, major landscaping, furniture, fixtures and equipment for amenities and common areas, vehicles and office and maintenance equipment. • Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $150-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset.
We believe our ability to access capital markets is enhanced by ERPOP’s long-term senior debt ratings and short-term commercial paper ratings, as well as EQR’s long-term preferred equity ratings.
We believe our ability to access the capital markets is enhanced by ERPOP’s long-term senior debt ratings and short-term commercial paper ratings, as well as EQR’s long-term preferred equity ratings.
(2) Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes: • the impact of any expenses relating to non-operating real estate asset impairment; • pursuit cost write-offs; • gains and losses from early debt extinguishment and preferred share redemptions; • gains and losses from non-operating assets; and • other miscellaneous items. 43 Table of Contents (3) The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses from sales and impairment write-downs of depreciable real estate and excluding depreciation related to real estate (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies.
(2) Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes: • the impact of any expenses relating to non-operating real estate asset impairment; • pursuit cost write-offs; • gains and losses from early debt extinguishment and preferred share/preference unit redemptions; • gains and losses from non-operating assets; and • other miscellaneous items. 44 Table of Contents (3) The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses from sales and impairment write-downs of depreciable real estate and excluding depreciation related to real estate (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies.
The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.
The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership.” Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.
The Company’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements. These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 2023. The Company has identified the significant accounting policies below as critical accounting policies.
The Company’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements. These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 2024. The Company has identified the significant accounting policies below as critical accounting policies.
Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the 39 Table of Contents agreements in whole or in part through the delivery or receipt of Common Shares or cash.
Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of Common Shares or cash.
Although an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe this had a material impact on our results of operations for the years ended December 31, 2023, 2022 and 2021.
Although an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe inflation had a material impact on our results of operations for the years ended December 31, 2024, 2023 and 2022.
The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness. The Company limits its utilization of the revolving credit facility in order to maintain liquidity to support its $1.0 billion commercial paper program along with certain other obligations.
The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness. 37 Table of Contents The Company limits its utilization of the revolving credit facility in order to maintain liquidity to support its $1.5 billion commercial paper program along with certain other obligations.
The current program matures in May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of February 8, 2024.
The current program matures in May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of February 6, 2025.
For floating rate debt, the current rate in effect for the most recent payment through December 31, 2023 is assumed to be in effect through the respective maturity date of each instrument. See Note 9 in the Notes to Consolidated Financial Statements for additional discussion of debt at December 31, 2023.
For floating rate debt, the current rate in effect for the most recent payment through December 31, 2024 is assumed to be in effect through the respective maturity date of each instrument. See Note 8 in the Notes to Consolidated Financial Statements for additional discussion of debt at December 31, 2024.
Liquidity and Capital Resources With approximately $2.1 billion in readily available liquidity, a strong balance sheet, limited near-term debt maturities, very strong credit metrics and ample access to capital markets, the Company believes it is well positioned to meet its future obligations and take advantage of opportunities. See further discussion below.
Liquidity and Capital Resources With approximately $2.0 billion in readily available liquidity, a strong balance sheet, limited near-term debt maturities, very strong credit metrics and ample access to capital markets, the Company believes it is well positioned to meet its future obligations and take advantage of opportunities.
We also see our affluent 34 Table of Contents resident base as being resilient to economic uncertainty, including elevated inflation, due to higher levels of disposable income and lower relative rent-to-income ratios.
We also see our resident base as being resilient to economic uncertainty, including elevated inflation, due to higher levels of disposable income and lower relative rent-to-income ratios.
Cash provided by operating activities for the year ended December 31, 2023 as compared to 2022, increased by approximately $78.0 million as a direct result of the NOI and other changes discussed above in Results of Operations . Investing Activities Our investing cash flows are primarily impacted by our transaction activity (acquisitions/dispositions), development spend and capital expenditures.
Cash provided by operating activities for the year ended December 31, 2024 as compared to 2023 increased by approximately $40.8 million primarily as a result of the NOI and other changes discussed above in Results of Operations . Investing Activities Our investing cash flows are primarily impacted by our transaction activity (acquisitions/dispositions), development spend and capital expenditures.
Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 11 in the Notes to Consolidated Financial Statements for additional discussion).
Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 10 in the Notes to Consolidated Financial Statements).
Interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 2023, inclusive of capitalized interest, approximates $223.0 million annually for the next five years, with total remaining obligations of approximately $2.4 billion.
Interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 2024, inclusive of capitalized interest, approximates $225.4 million annually for the next five years, with total remaining obligations of approximately $2.3 billion.
The following table presents the availability on the Company’s unsecured revolving credit facility as of February 8, 2024 (amounts in thousands): February 8, 2024 Unsecured revolving credit facility commitment $ 2,500,000 Commercial paper balance outstanding (354,000 ) Unsecured revolving credit facility balance outstanding — Other restricted amounts (3,438 ) Unsecured revolving credit facility availability $ 2,142,562 Dividend Policy The Company declared a dividend/distribution for each quarter in 2023 of $0.6625 per share/unit, an annualized increase of 6.0% over the amount paid in 2022.
The following table presents the availability on the Company’s unsecured revolving credit facility as of February 6, 2025 (amounts in thousands): February 6, 2025 Unsecured revolving credit facility commitment $ 2,500,000 Commercial paper balance outstanding (425,000 ) Unsecured revolving credit facility balance outstanding — Other restricted amounts (3,438 ) Unsecured revolving credit facility availability $ 2,071,562 Dividend Policy The Company declared a dividend/distribution for each quarter in 2024 of $0.675 per share/unit, an annualized increase of 2.0% over the amount paid in 2023.
All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees. Total dividends/distributions paid in January 2024 amounted to $259.2 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended December 31, 2023.
All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees. Total dividends/distributions paid in January 2025 amounted to $263.5 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended December 31, 2024.
As of February 8, 2024, the ratings are as follows: Standard & Poor’s Moody's ERPOP's long-term senior debt rating A- A3 ERPOP's short-term commercial paper rating A-2 P-2 EQR's long-term preferred equity rating BBB Baa1 See Note 18 in the Notes to Consolidated Financial Statements for discussion of the events, if any, which occurred subsequent to December 31, 2023.
As of February 6, 2025, the ratings are as follows: Standard & Poor’s Moody's ERPOP's long-term senior debt rating A- A3 ERPOP's short-term commercial paper rating A-2 P-2 EQR's long-term preferred equity rating BBB Baa1 40 Table of Contents See Note 17 in the Notes to Consolidated Financial Statements for discussion of the events, if any, which occurred subsequent to December 31, 2024.
For the year ended December 31, 2023, our actual capital expenditures to real estate included the following (amounts in thousands except for apartment unit and per apartment unit amounts): 35 Table of Contents Capital Expenditures to Real Estate For the Year Ended December 31, 2023 Same Store Properties Non-Same Store Properties/Other Total Same Store Avg.
For the year ended December 31, 2024, our actual capital expenditures to real estate included the following (amounts in thousands except for apartment unit and per apartment unit amounts): Capital Expenditures to Real Estate For the Year Ended December 31, 2024 Same Store Properties Non-Same Store Properties/Other Total Consolidated Properties Same Store Avg.
The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating.
The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%).
See also Notes 8 and 16 in the Notes to Consolidated Financial Statements for additional discussion of contractual obligations and commitments as of December 31, 2023. 38 Table of Contents Capital Structure The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2023 is presented in the following table.
See also Notes 7 and 15 in the Notes to Consolidated Financial Statements for additional discussion of contractual obligations and commitments as of December 31, 2024. Capital Structure The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2024 is presented in the following table.
Same Store Results Properties that the Company owned and were stabilized for all of both 2023 and 2022 (the “2023 Same Store Properties”), which represented 76,297 apartment units, drove the Company’s results of operations. Properties are considered “stabilized” when they have achieved 90% occupancy for three consecutive months.
Same Store Results Properties that the Company owned and were stabilized for all of both 2024 and 2023, which represented 75,299 apartment units, drove the Company’s results of operations. Properties are considered “stabilized” when they have achieved 90% Physical Occupancy for three consecutive months.
The value of and cash flow from these unencumbered properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $28.7 billion in investment in real estate on the Company’s balance sheet at December 31, 2023, $25.6 billion or 89.1% was unencumbered.
The value of and cash flow from these unencumbered properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $30.0 billion in investment in real estate on the Company’s balance sheet at December 31, 2024, $26.8 billion or 89.4% was unencumbered.
The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets/liabilities acquired. 42 Table of Contents Funds From Operations and Normalized Funds From Operations The following is the Company’s and the Operating Partnership’s reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the three years ended December 31, 2023: Funds From Operations and Normalized Funds From Operations (Amounts in thousands) Year Ended December 31, 2023 2022 2021 Net income $ 868,488 $ 806,995 $ 1,396,714 Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties (6,340 ) (3,774 ) (17,964 ) Preferred/preference distributions (3,090 ) (3,090 ) (3,090 ) Net income available to Common Shares and Units / Units 859,058 800,131 1,375,660 Adjustments: Depreciation 888,709 882,168 838,272 Depreciation – Non-real estate additions (4,268 ) (4,306 ) (4,277 ) Depreciation – Partially Owned Properties (2,130 ) (2,640 ) (3,673 ) Depreciation – Unconsolidated Properties 2,860 2,898 2,487 Net (gain) loss on sales of unconsolidated entities - operating assets — (9 ) (1,304 ) Net (gain) loss on sales of real estate properties (282,539 ) (304,325 ) (1,072,183 ) Noncontrolling Interests share of gain (loss) on sales of real estate properties 2,336 — 15,650 FFO available to Common Shares and Units / Units (1) (3) (4) 1,464,026 1,373,917 1,150,632 Adjustments: Impairment – non-operating real estate assets — — 16,769 Write-off of pursuit costs 3,647 4,780 6,526 Debt extinguishment and preferred share redemption (gains) losses 1,143 4,664 744 Non-operating asset (gains) losses (13,323 ) 2,368 (22,283 ) Other miscellaneous items 21,588 (13,901 ) 8,976 Normalized FFO available to Common Shares and Units / Units (2) (3) (4) $ 1,477,081 $ 1,371,828 $ 1,161,364 FFO (1) (3) $ 1,467,116 $ 1,377,007 $ 1,153,722 Preferred/preference distributions (3,090 ) (3,090 ) (3,090 ) FFO available to Common Shares and Units / Units (1) (3) (4) $ 1,464,026 $ 1,373,917 $ 1,150,632 Normalized FFO (2) (3) $ 1,480,171 $ 1,374,918 $ 1,164,454 Preferred/preference distributions (3,090 ) (3,090 ) (3,090 ) Normalized FFO available to Common Shares and Units / Units (2) (3) (4) $ 1,477,081 $ 1,371,828 $ 1,161,364 (1) The National Association of Real Estate Investment Trusts (“Nareit”) defines funds from operations (“FFO”) (December 2018 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains or losses from sales and impairment write-downs of depreciable real estate and land when connected to the main business of a REIT, impairment write-downs of investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and depreciation and amortization related to real estate.
The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets/liabilities acquired. 43 Table of Contents Funds From Operations and Normalized Funds From Operations The following is the Company’s and the Operating Partnership’s reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the three years ended December 31, 2024: Funds From Operations and Normalized Funds From Operations (Amounts in thousands) Year Ended December 31, 2024 2023 2022 Net income $ 1,070,975 $ 868,488 $ 806,995 Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties (6,212 ) (6,340 ) (3,774 ) Preferred/preference distributions (1,613 ) (3,090 ) (3,090 ) Premium on redemption of Preferred Shares/Preference Units (1,444 ) — — Net income available to Common Shares and Units / Units 1,061,706 859,058 800,131 Adjustments: Depreciation 952,191 888,709 882,168 Depreciation – Non-real estate additions (3,791 ) (4,268 ) (4,306 ) Depreciation – Partially Owned Properties (2,132 ) (2,130 ) (2,640 ) Depreciation – Unconsolidated Properties 7,191 2,860 2,898 Net (gain) loss on sales of unconsolidated entities - operating assets (515 ) — (9 ) Net (gain) loss on sales of real estate properties (546,797 ) (282,539 ) (304,325 ) Noncontrolling Interests share of gain (loss) on sales of real estate properties 1,857 2,336 — FFO available to Common Shares and Units / Units (1) (3) (4) 1,469,710 1,464,026 1,373,917 Adjustments: Write-off of pursuit costs 5,155 3,647 4,780 Debt extinguishment and preferred share/preference unit redemption (gains) losses 1,444 1,143 4,664 Non-operating asset (gains) losses (16,311 ) (13,323 ) 2,368 Other miscellaneous items 61,608 21,588 (13,901 ) Normalized FFO available to Common Shares and Units / Units (2) (3) (4) $ 1,521,606 $ 1,477,081 $ 1,371,828 FFO (1) (3) $ 1,472,767 $ 1,467,116 $ 1,377,007 Preferred/preference distributions (1,613 ) (3,090 ) (3,090 ) Premium on redemption of Preferred Shares/Preference Units (1,444 ) — — FFO available to Common Shares and Units / Units (1) (3) (4) $ 1,469,710 $ 1,464,026 $ 1,373,917 Normalized FFO (2) (3) $ 1,523,219 $ 1,480,171 $ 1,374,918 Preferred/preference distributions (1,613 ) (3,090 ) (3,090 ) Normalized FFO available to Common Shares and Units / Units (2) (3) (4) $ 1,521,606 $ 1,477,081 $ 1,371,828 (1) The National Association of Real Estate Investment Trusts (“Nareit”) defines funds from operations (“FFO”) (December 2018 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains or losses from sales and impairment write-downs of depreciable real estate and land when connected to the main business of a REIT, impairment write-downs of investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and depreciation and amortization related to real estate.
General and administrative expenses, which include corporate operating expenses, increased approximately $2.0 million or 3.4% during the year ended December 31, 2023 as compared to 2022, primarily due to increases in payroll-related costs and public company expenses, partially offset by decreases in legal and professional fees and training/marketing costs.
General and administrative expenses, which include corporate operating expenses, increased during the year ended December 31, 2024 as compared to 2023, primarily due to increases in legal and professional fees and other public company costs, partially offset by decreases in payroll-related costs.
The following table presents the Company’s balances for cash and cash equivalents, restricted deposits and the available borrowing capacity on its revolving credit facility as of December 31, 2023 and 2022 (amounts in thousands): December 31, 2023 December 31, 2022 Cash and cash equivalents $ 50,743 $ 53,869 Restricted deposits $ 89,252 $ 83,303 Unsecured revolving credit facility availability $ 2,086,585 $ 2,366,537 36 Table of Contents Credit Facility and Commercial Paper Program The Company has a $2.5 billion unsecured revolving credit facility maturing October 26, 2027.
The following table presents the Company’s balances for cash and cash equivalents, restricted deposits and the available borrowing capacity on its revolving credit facility as of December 31, 2024 and 2023 (amounts in thousands): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 62,302 $ 50,743 Restricted deposits $ 97,864 $ 89,252 Unsecured revolving credit facility availability $ 1,952,067 $ 2,086,585 Credit Facility and Commercial Paper Program The Company has a $2.5 billion unsecured revolving credit facility maturing on October 26, 2027.
Statements of Cash Flows The following table sets forth our sources and uses of cash flows for the years ended December 31, 2023, 2022 and 2021 (amounts in thousands): Year Ended December 31, 2023 2022 2021 Cash flows provided by (used for): Operating activities $ 1,532,798 $ 1,454,756 $ 1,260,184 Investing activities $ (409,504 ) $ 107,792 $ (434,620 ) Financing activities $ (1,120,471 ) $ (1,785,612 ) $ (565,056 ) The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the year ended December 31, 2023.
See further discussion below. 35 Table of Contents Statements of Cash Flows The following table sets forth our sources and uses of cash flows for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands): December 31, 2024 2023 2022 Cash flows provided by (used for): Operating activities $ 1,573,607 $ 1,532,798 $ 1,454,756 Investing activities $ (1,176,484 ) $ (409,504 ) $ 107,792 Financing activities $ (376,952 ) $ (1,120,471 ) $ (1,785,612 ) The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the year ended December 31, 2024.
The property is now wholly owned. The Company also repaid $64.7 million of mortgage debt at par prior to maturity in conjunction with the buyout.
The property is now wholly owned. The Company also repaid $64.7 million of mortgage debt at par prior to maturity in conjunction with the buyout; • The consolidated properties acquired in 2024 are located in the Atlanta (7), Boston, Dallas/Ft.
Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented. • Same Store Residential Revenues – Revenues from our Same Store Properties presented on a GAAP basis which reflects the impact of Leasing Concessions on a straight-line basis. • % of Stabilized Budgeted NOI – Represents original budgeted 2024 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up. • Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
Unless otherwise noted, includes both Residential and Non-Residential operations for these properties. • % of Stabilized Budgeted NOI – Represents original budgeted 2025 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% Physical Occupancy for three consecutive months) for properties that are in lease-up. • Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
(2) Includes expenditures for two properties that have been removed from same store while undergoing major renovations requiring a significant number of apartment units to be vacated to accommodate the extensive planned improvements. The renovation at one property is expected to continue through the second quarter of 2024 with the other continuing into 2025.
(2) Includes expenditures for two properties that have been removed from same store while undergoing major renovations requiring a significant number of apartment units to be vacated to accommodate the extensive planned improvements.
Concurrent with this transaction, ERPOP issued the same amount of OP Units to EQR in exchange for the net proceeds. During the year ended December 31, 2023, the Company repurchased and subsequently retired approximately $49.1 million (864,386 shares at a weighted average price per share of $56.79) of its Common Shares in the open market under its share repurchase program.
During the year ended December 31, 2024, the Company repurchased and subsequently retired approximately $38.5 million (652,452 shares at a weighted average price per share of $58.95) of its Common Shares in the open market under its share repurchase program. Concurrent with these transactions, ERPOP repurchased and retired the same amount of OP Units previously issued to EQR.
The increase is primarily due to an increase in unrealized gains of $13.5 million and realized gains of $2.7 million on various investment securities as well as short-term investment income on cash and restricted deposit accounts due to a higher rate environment and higher overall invested balances, partially offset by decreases in insurance/litigation settlement proceeds received during 2022 that did not occur in 2023.
Interest and other income increased during the year ended December 31, 2024 as compared to 2023, primarily due to a net increase in realized/unrealized gains on various investment securities, short-term investment income on restricted deposit accounts due to a higher rate environment and higher overall invested balances as well as insurance/litigation settlement proceeds received during 2024 that did not occur in 2023.
Depreciation expense, which includes depreciation on non-real estate assets, increased approximately $6.5 million or 0.7% during the year ended December 31, 2023 as compared to 2022, primarily as a result of additional depreciation expense on properties acquired in 2023 and 2022, partially offset by lower depreciation from properties sold in 2022 and 2023.
Depreciation expense increased during the year ended December 31, 2024 as compared to 2023, primarily as a result of additional depreciation expense on properties acquired in 2023 and 2024 and development properties placed in service during 2023 and 2024, partially offset by lower depreciation from properties sold in 2023 and 2024.
ERP Operating Limited Partnership Capital Structure as of December 31, 2023 (Amounts in thousands except for unit and per unit amounts) Secured Debt $ 1,632,902 22.1 % Unsecured Debt 5,757,548 77.9 % Total Debt 7,390,450 100.0 % 23.6 % Total Outstanding Units 390,872,723 Common Share Price at December 31, 2023 $ 61.16 23,905,776 99.8 % Perpetual Preference Units 37,280 0.2 % Total Equity 23,943,056 100.0 % 76.4 % Total Market Capitalization $ 31,333,506 100.0 % Financial Flexibility EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025.
ERP Operating Limited Partnership Capital Structure as of December 31, 2024 (Amounts in thousands except for unit and per unit amounts) Secured Debt $ 1,630,690 20.1 % Unsecured Debt 6,491,055 79.9 % Total Debt 8,121,745 100.0 % 22.4 % Total Outstanding Units 391,019,156 Common Share Price at December 31, 2024 $ 71.76 28,059,535 99.9 % Perpetual Preference Units 17,155 0.1 % Total Equity 28,076,690 100.0 % 77.6 % Total Market Capitalization $ 36,198,435 100.0 % Financial Flexibility EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025.
Dispositions • The consolidated properties disposed of in 2022 were located in the New York (2) and Washington, D.C. markets and the sales generated an Unlevered IRR of 5.3%; and • The consolidated properties disposed of in 2023 were located in the Los Angeles (8), Seattle (2) and San Francisco markets 30 Table of Contents and the sales generated an Unlevered IRR of 11.4%.
Dispositions • The consolidated properties disposed of in 2023 were located in the Los Angeles (8), Seattle (2) and San Francisco markets; and 31 Table of Contents • The consolidated properties disposed of in 2024 were located in the Boston, Orange County, San Francisco (3), Washington, D.C. (5), Seattle (2) and San Diego markets.
The following table provides results and statistics related to our Residential same store operations for the years ended December 31, 2023 and 2022: 2023 vs. 2022 Same Store Residential Results/Statistics by Market Increase (Decrease) from Prior Year Markets/Metro Areas Apartment Units 2023 % of Actual NOI 2023 Average Rental Rate 2023 Weighted Average Physical Occupancy % 2023 Turnover Average Rental Rate Physical Occupancy Turnover Los Angeles 14,135 17.6 % $ 2,861 95.3 % 44.5 % 5.1 % (1.3 %) 5.8 % Orange County 4,028 5.6 % 2,801 96.3 % 37.4 % 7.1 % (0.7 %) 2.9 % San Diego 2,706 4.0 % 2,993 95.4 % 42.3 % 8.2 % (1.3 %) 4.2 % Subtotal – Southern California 20,869 27.2 % 2,867 95.5 % 42.9 % 5.9 % (1.2 %) 5.1 % San Francisco 11,245 16.4 % 3,290 95.6 % 44.1 % 4.2 % (0.6 %) 2.4 % Washington, D.C. 14,400 16.3 % 2,597 96.8 % 40.5 % 5.9 % 0.0 % (2.6 %) New York 8,536 14.4 % 4,504 96.8 % 37.2 % 10.7 % (0.1 %) (5.2 %) Seattle 9,266 10.8 % 2,579 95.2 % 48.0 % 2.9 % 0.1 % (3.6 %) Boston 6,700 10.3 % 3,422 96.0 % 43.9 % 7.4 % (0.1 %) (1.5 %) Denver 2,505 2.7 % 2,404 96.3 % 58.1 % 4.6 % 0.0 % (2.2 %) Other Expansion Markets 2,776 1.9 % 1,987 94.7 % 57.1 % 5.1 % (0.6 %) 1.8 % Total 76,297 100.0 % $ 3,029 95.9 % 43.7 % 6.2 % (0.4 %) 0.1 % Note: The above table reflects Residential same store results only.
The following table provides results and statistics related to our Residential same store operations for the years ended December 31, 2024 and 2023: 2024 vs. 2023 Same Store Residential Results/Statistics by Market Increase (Decrease) from Prior Year Markets/Metro Areas Apartment Units 2024 % of Actual NOI 2024 Average Rental Rate 2024 Weighted Average Physical Occupancy % 2024 Turnover Average Rental Rate Physical Occupancy Turnover Los Angeles 14,136 17.7 % $ 2,933 95.6 % 43.3 % 2.5 % 0.3 % (1.2 %) Orange County 3,718 5.3 % 2,925 95.9 % 38.2 % 3.7 % (0.4 %) 0.6 % San Diego 2,649 4.1 % 3,167 95.9 % 40.6 % 3.5 % 0.5 % (1.3 %) Subtotal – Southern California 20,503 27.1 % 2,962 95.7 % 42.0 % 2.9 % 0.2 % (0.9 %) San Francisco 11,093 16.1 % 3,326 96.1 % 44.2 % 1.1 % 0.5 % (0.1 %) Washington, D.C. 13,534 15.9 % 2,743 96.8 % 40.7 % 4.6 % 0.0 % 0.0 % New York 8,536 14.6 % 4,640 97.3 % 33.6 % 3.0 % 0.5 % (3.6 %) Boston 7,077 11.3 % 3,615 96.0 % 41.5 % 3.6 % 0.0 % (2.6 %) Seattle 8,853 10.2 % 2,607 96.2 % 45.2 % 1.2 % 1.0 % (3.1 %) Denver 2,505 2.6 % 2,410 96.2 % 54.9 % 0.2 % (0.1 %) (3.2 %) Other Expansion Markets 3,198 2.2 % 1,946 95.1 % 56.9 % (2.2 %) 0.3 % (1.0 %) Total 75,299 100.0 % $ 3,127 96.2 % 42.5 % 2.6 % 0.3 % (1.5 %) Note: The above table reflects Residential same store results only.
Long-term, we expect elevated single family home ownership costs, positive household formation trends, manageable competitive new supply in our established coastal markets and the overall deficit in housing across the country to buffer the impact on our business from the risks of potential economic weakness.
Long-term, we expect elevated single family home ownership costs, positive household formation trends, manageable competitive new supply in our Established Markets and moderating competitive new supply in our Expansion Markets. With an overall deficit in housing across the country, we believe our business is well positioned for the future.
The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property. • Leasing Concessions – Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis. • Non-Residential – Consists of revenues and expenses from retail and public parking garage operations. • Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2022 and 2023, plus any properties in lease-up and not stabilized as of January 1, 2022. • Percentage of Residents Renewing – Leases renewed expressed as a percentage of total renewal offers extended during the reporting period. • Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period. • Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets. • Replacements – Includes appliances, mechanical equipment, fixtures and flooring (including hardwood and carpeting). • Residential – Consists of multifamily apartment revenues and expenses. • Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2022, less properties subsequently sold.
Unless otherwise noted, includes both Residential and Non-Residential operations for these properties. • Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period. • Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets. • Replacements – Includes appliances, mechanical equipment, fixtures and flooring (including hardwood and carpeting). • Residential – Consists of multifamily apartment revenues and expenses. 41 Table of Contents • Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2023, less properties subsequently sold.
Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 The following table presents a reconciliation of diluted earnings per share/unit for the year ended December 31, 2023 as compared to the same period in 2022: Year Ended December 31 Diluted earnings per share/unit for full year 2022 $ 2.05 Property NOI 0.29 Interest expense 0.02 Corporate overhead (1) (0.03 ) Net gain/loss on property sales (0.06 ) Non-operating asset gains/losses 0.04 Depreciation expense (0.01 ) Other (0.10 ) Diluted earnings per share/unit for full year 2023 $ 2.20 (1) Corporate overhead includes property management and general and administrative expenses.
See Notes 4 and 5 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate investments and investments in partially owned entities. 32 Table of Contents Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 The following table presents a reconciliation of diluted earnings per share/unit for the year ended December 31, 2024 as compared to the same period in 2023: Year Ended December 31 Diluted earnings per share/unit for full year 2023 $ 2.20 Property NOI 0.18 Interest expense (0.04 ) Corporate overhead (1) (0.04 ) Net gain/loss on property sales 0.68 Depreciation expense (0.17 ) Other (0.09 ) Diluted earnings per share/unit for full year 2024 $ 2.72 (1) Corporate overhead includes property management and general and administrative expenses.
Worth (3) markets, consisting of 1,278 apartment units totaling approximately $417.7 million of expected development costs; • The Company stabilized two consolidated apartment properties during 2022, located in the Washington, D.C. and Boston markets, consisting of 624 apartment units totaling approximately $482.1 million of development costs; • The Company spent approximately $203.6 million during 2022, primarily for consolidated and unconsolidated development projects; • The Company stabilized one consolidated apartment property during 2023, located in the San Francisco market, consisting of 200 apartment units totaling approximately $116.4 million of development costs; • The Company completed construction on one consolidated apartment property during 2023, located in the Washington, D.C. market, consisting of 312 apartment units totaling approximately $108.0 million of development costs; and • The Company spent approximately $118.2 million during 2023, primarily for consolidated and unconsolidated development projects.
Developments • Consolidated: • The Company stabilized one consolidated apartment property during 2023, located in the San Francisco market, consisting of 200 apartment units totaling approximately $116.4 million of development costs; • The Company completed construction on one consolidated apartment property during 2023, located in the Washington, D.C. market, consisting of 312 apartment units totaling approximately $108.0 million of development costs; • The Company spent approximately $78.2 million during 2023, primarily for consolidated development projects; • The Company commenced construction on one partially owned consolidated apartment property during 2024, located in the Boston market, consisting of 440 apartment units totaling approximately $232.2 million of expected development costs; • The Company stabilized one partially owned consolidated apartment property during 2024, located in the Washington, D.C. market, consisting of 312 apartment units totaling approximately $106.0 million of development costs; and • The Company spent approximately $129.8 million during 2024, primarily for consolidated development projects. • Unconsolidated: • The Company entered into two separate unconsolidated joint ventures during 2023 for the purpose of developing vacant land parcels in the Boston and Seattle markets.
For the year ended December 31, 2023, key drivers were: • Acquired four consolidated rental properties for approximately $324.5 million in cash, inclusive of $53.5 million in assumed mortgage debt with a discount of approximately $11.2 million on one acquired property; • Disposed of eleven consolidated rental properties, receiving net proceeds of approximately $374.0 million; • Invested $78.2 million primarily in consolidated development projects; • Invested $50.0 million primarily in unconsolidated development joint venture entities as well as unconsolidated investments in real estate technology funds/companies for various technology initiatives; and • Invested $319.3 million in capital expenditures to real estate presented in the table below.
For the year ended December 31, 2024, key drivers were: • Acquired eighteen consolidated rental properties for approximately $1.6 billion; • Disposed of thirteen consolidated rental properties, receiving net proceeds of approximately $960.4 million; • Invested $129.8 million primarily in consolidated development projects; • Invested $109.7 million primarily in unconsolidated development joint venture entities as well as unconsolidated investments in real estate technology funds/companies for various technology initiatives; and • Invested $301.4 million in capital expenditures to real estate presented in the table below.
EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. 37 Table of Contents The Company’s total debt summary schedule as of December 31, 2023 is as follows: Debt Summary as of December 31, 2023 ($ in thousands) Debt Balances % of Total Secured $ 1,632,902 22.1 % Unsecured 5,757,548 77.9 % Total $ 7,390,450 100.0 % Fixed Rate Debt: Secured – Conventional $ 1,398,598 18.9 % Unsecured – Public 5,348,417 72.4 % Fixed Rate Debt 6,747,015 91.3 % Floating Rate Debt: Secured – Conventional — — Secured – Tax Exempt 234,304 3.2 % Unsecured – Revolving Credit Facility — — Unsecured – Commercial Paper Program 409,131 5.5 % Floating Rate Debt 643,435 8.7 % Total $ 7,390,450 100.0 % The following table summarizes the Company’s debt maturity schedule as of December 31, 2023: Debt Maturity Schedule as of December 31, 2023 ($ in thousands) Year Fixed Rate Floating Rate Total % of Total 2024 $ — $ 416,200 (1) $ 416,200 5.6 % 2025 450,000 8,100 458,100 6.1 % 2026 592,025 9,000 601,025 8.0 % 2027 400,000 9,800 409,800 5.5 % 2028 900,000 10,700 910,700 12.2 % 2029 888,120 11,500 899,620 12.1 % 2030 1,148,462 12,700 1,161,162 15.6 % 2031 528,500 39,800 568,300 7.6 % 2032 — 28,000 28,000 0.4 % 2033 550,000 2,300 552,300 7.4 % 2034+ 1,350,850 108,600 1,459,450 19.5 % Subtotal 6,807,957 656,700 7,464,657 100.0 % Deferred Financing Costs and Unamortized (Discount) (60,942 ) (13,265 ) (74,207 ) N/A Total $ 6,747,015 $ 643,435 $ 7,390,450 100.0 % (1) Includes $410.0 million in principal outstanding on the Company’s commercial paper program.
The Company’s total debt summary schedule as of December 31, 2024 is as follows: Debt Summary as of December 31, 2024 ($ in thousands) Debt Balances % of Total Secured $ 1,630,690 20.1 % Unsecured 6,491,055 79.9 % Total $ 8,121,745 100.0 % Fixed Rate Debt: Secured – Conventional $ 1,401,099 17.3 % Unsecured – Public 5,947,376 73.2 % Fixed Rate Debt 7,348,475 90.5 % Floating Rate Debt: Secured – Tax Exempt 229,591 2.8 % Unsecured – Revolving Credit Facility — — Unsecured – Commercial Paper Program 543,679 6.7 % Floating Rate Debt 773,270 9.5 % Total $ 8,121,745 100.0 % 38 Table of Contents The following table summarizes the Company’s debt maturity schedule as of December 31, 2024: Debt Maturity Schedule as of December 31, 2024 ($ in thousands) Year Fixed Rate Floating Rate Total % of Total 2025 $ 450,000 $ 552,595 (1) $ 1,002,595 12.2 % 2026 592,025 9,000 601,025 7.3 % 2027 400,000 9,800 409,800 5.0 % 2028 900,000 10,700 910,700 11.1 % 2029 888,120 11,500 899,620 11.0 % 2030 1,148,462 12,700 1,161,162 14.2 % 2031 528,500 39,800 568,300 6.9 % 2032 — 28,100 28,100 0.4 % 2033 550,000 2,300 552,300 6.7 % 2034 600,000 2,400 602,400 7.4 % 2035+ 1,350,850 106,200 1,457,050 17.8 % Subtotal 7,407,957 785,095 8,193,052 100.0 % Deferred Financing Costs and Unamortized (Discount) (59,482 ) (11,825 ) (71,307 ) N/A Total $ 7,348,475 $ 773,270 $ 8,121,745 100.0 % (1) Includes $544.5 million in principal outstanding on the Company’s commercial paper program.
Amounts for partially owned consolidated and unconsolidated properties are presented at 100% of the project. • Turnover – Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units. • Unlevered Internal Rate of Return (“IRR”) – The Unlevered IRR on sold properties is the compound annual rate of return calculated by the Company based on the timing and amount of: (i) the gross purchase price of the property plus any direct acquisition costs incurred by the Company; (ii) total revenues earned during the Company’s ownership period; (iii) total direct property operating expenses (including real estate taxes and insurance) incurred during the Company’s ownership period; (iv) capital expenditures incurred during the Company’s ownership period; and (v) the gross sales price of the property net of selling costs. 41 Table of Contents Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions.
Amounts for partially owned consolidated and unconsolidated properties are presented at 100% of the project. • Turnover – Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units. 42 Table of Contents Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions.
Equity Residential Capital Structure as of December 31, 2023 (Amounts in thousands except for share/unit and per share amounts) Secured Debt $ 1,632,902 22.1 % Unsecured Debt 5,757,548 77.9 % Total Debt 7,390,450 100.0 % 23.6 % Common Shares (includes Restricted Shares) 379,291,417 97.0 % Units (includes OP Units and Restricted Units) 11,581,306 3.0 % Total Shares and Units 390,872,723 100.0 % Common Share Price at December 31, 2023 $ 61.16 23,905,776 99.8 % Perpetual Preferred Equity 37,280 0.2 % Total Equity 23,943,056 100.0 % 76.4 % Total Market Capitalization $ 31,333,506 100.0 % The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2023 is presented in the following table.
Equity Residential Capital Structure as of December 31, 2024 (Amounts in thousands except for share/unit and per share amounts) Secured Debt $ 1,630,690 20.1 % Unsecured Debt 6,491,055 79.9 % Total Debt 8,121,745 100.0 % 22.4 % Common Shares (includes Restricted Shares) 379,475,383 97.0 % Units (includes OP Units and Restricted Units) 11,543,773 3.0 % Total Shares and Units 391,019,156 100.0 % Common Share Price at December 31, 2024 $ 71.76 28,059,535 99.9 % Perpetual Preferred Equity 17,155 0.1 % Total Equity 28,076,690 100.0 % 77.6 % Total Market Capitalization $ 36,198,435 100.0 % 39 Table of Contents The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2024 is presented in the following table.
Financing Activities Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders/unitholders and other Common Share activity.
The renovation at one property was substantially completed in the second quarter of 2024, while the renovation of the other is ongoing and expected to continue into 2026. 36 Table of Contents Financing Activities Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders/unitholders and other Common Share activity.
The decrease is primarily due to lower overall debt balances outstanding as compared to the prior year period and higher capitalized interest, partially offset by higher rates on floating debt. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the year ended December 31, 2023 was 3.82% as compared to 3.68% in 2022.
The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the year ended December 31, 2024 was 3.91% as compared to 3.82% in 2023. The Company capitalized interest of approximately $14.5 million and $12.3 million during the years ended December 31, 2024 and 2023, respectively.
For the year ended December 31, 2023, key drivers were: • Obtained $550.0 million in fixed rate mortgage debt; • Obtained $22.9 million in variable rate construction mortgage debt; • Repaid $936.0 million on mortgage loans (inclusive of scheduled principal repayments); • Received $25.2 million to settle nine forward starting swaps in conjunction with an interest rate lock of $530.0 million of secured notes; • Acquired our joint venture partner’s 10% interest in an apartment property for $3.7 million in cash (remaining $0.9 million was funded by ERPOP's issuance of 3.00% Series Q Preference Units); • Issued Common Shares related to share option exercises and ESPP purchases and received net proceeds of $27.1 million; • Paid dividends/distributions on Common Shares, Preferred Shares, Units (including OP Units and restricted units) and noncontrolling interests in partially owned properties totaling approximately $1.0 billion; and • Repurchased and retired 864,386 Common Shares, at a weighted average purchase price of $56.79 per share, for an aggregate purchased amount of approximately $49.1 million.
For the year ended December 31, 2024, key drivers were: • Issued Common Shares related to share option exercises and ESPP purchases and received net proceeds of $26.5 million; • Paid dividends/distributions on Common Shares, Preferred Shares, Units (including OP Units and restricted units) and noncontrolling interests in partially owned properties totaling approximately $1.1 billion; • Repurchased and retired 652,452 Common Shares, at a weighted average purchase price of $58.95 per share, for an aggregate purchased amount of approximately $38.5 million.
Acquisitions • The consolidated property acquired in 2022 is located in the San Diego market; • In 2022, the Company acquired its joint venture partner’s 25% interest in a 432-unit apartment property located in the Washington, D.C. market for $32.2 million, and the property is now wholly owned; • The consolidated properties acquired in 2023 are located in the Atlanta (3) and Denver markets; and • In 2023, the Company acquired its joint venture partner's 10% interest in a 200-unit apartment property located in the San Francisco market for $4.6 million, of which the Company paid $3.7 million in cash and ERPOP issued $0.9 million of 3.00% Series Q Preference Units.
Worth (5) and Denver (5) markets; and • In 2024, the Company acquired its joint venture partner's 8.0% interest in a 312-unit apartment property located in the Washington, D.C. market for $3.1 million in cash. The property is now wholly owned. The Company also repaid $67.9 million of the joint venture construction mortgage debt during 2023.
For comparison of the year ended December 31, 2022 to the year ended December 31, 2021, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022.
Loss from investments in unconsolidated entities increased during the year ended December 31, 2024 as compared to 2023, primarily as a result of losses incurred on our unconsolidated development properties which recently started lease-up activities, partially offset by increases in net income of unconsolidated operating properties and a gain on sale of an unconsolidated operating property. 34 Table of Contents For comparison of the year ended December 31, 2023 to the year ended December 31, 2022, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023.
Net gain on sales of real estate properties decreased approximately $21.8 million or 7.2% during the year ended December 31, 2023 as compared to 2022, primarily as a result of the sale of eleven consolidated apartment properties for a lower gain in 2023 as compared to the sale of three consolidated apartment properties in the same period in 2022.
Net gain on sales of real estate properties increased during the year ended December 31, 2024 as compared to 2023, primarily as a result of a significantly higher dollar sales volume and the mix of properties sold in 2024 vs. 2023.
See Note 9 in the Notes to Consolidated Financial Statements for additional discussion of the Company’s credit facility. The Company may borrow up to a maximum of $1.0 billion under its commercial paper program subject to market conditions.
The Company has an unsecured commercial paper note program under which it may borrow up to a maximum of $1.5 billion (increased from $1.0 billion as of December 18, 2024) subject to market conditions.
These expenses increased approximately $9.5 million or 8.6% during the year ended December 31, 2023 as compared to 2022. This increase is primarily attributable to increases in payroll-related costs, workforce/contractors costs and information technology expenses, partially offset by decreases in training/marketing costs and third-party management fees.
Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies. The increase during the year ended December 31, 2024 as compared to 2023 is primarily attributable to increases in payroll-related costs, information technology expenses and legal and professional fees.
Other expenses increased approximately $15.8 million during the year ended December 31, 2023 as compared to 2022, primarily due to increases in litigation reserves and data transformation project costs. Interest expense, including amortization of deferred financing costs, decreased approximately $13.2 million or 4.5% during the year ended December 31, 2023 as compared to 2022.
Other expenses increased during the year ended December 31, 2024 as compared to 2023, primarily due to increases in litigation accruals and advocacy contributions, partially offset by decreases in data transformation project costs that occurred during 2023 but not during 2024.
Investments in Unconsolidated Entities • The Company entered into three separate unconsolidated joint ventures during 2022 for the purpose of developing vacant land parcels in the Dallas/Ft. Worth and Boston (2) markets. The Company’s total investment in these three joint ventures was approximately $66.8 million as of December 31, 2022.
Worth (3) markets, consisting of 1,262 apartment units totaling approximately $338.0 million of development costs; • The Company spent approximately $103.8 million during 2024, primarily for unconsolidated development projects; and • The Company previously entered into two separate unconsolidated joint ventures for the purpose of developing vacant land parcels in the Boston and Seattle markets.
The Company’s total investment in these two joint ventures was approximately $4.9 million as of December 31, 2023. See Notes 4 and 6 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate investments and investments in partially owned entities.
Total expected development cost for these projects is $307.2 million, and the Company's total investment in these two joint ventures is approximately $90.9 million as of December 31, 2024.
Removed
(2) The Company acquired two properties in the Atlanta market during the year ended December 31, 2023 that are in lease-up and are expected to stabilize in their second year of ownership at the weighted average Acquisition Cap Rate listed above.
Added
The Company’s total investment in these two joint ventures was approximately $4.9 million as of December 31, 2023; • The Company spent approximately $42.8 million during 2023, primarily for unconsolidated development projects; • The Company completed construction on four unconsolidated apartment properties during 2024, located in the Denver and Dallas/Ft.
Removed
(3) Purchase price is net of a mark-to-market discount of approximately $11.2 million on a mortgage assumed in connection with the purchase of a property.
Added
During 2024, the joint ventures acquired their respective land parcels for the total purchase price listed above. The Company commenced construction on these two apartment properties, which are expected to contain 639 total apartment units.
Removed
Developments • The Company commenced construction on one consolidated and three unconsolidated apartment properties during 2022, located in the San Francisco and Dallas/Ft.
Added
The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties.
Removed
One of the projects is related to the Company’s joint venture development program with Toll Brothers, Inc.
Added
The following tables present reconciliations of net income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (amounts in thousands): Year Ended December 31, 2024 2023 $ Change % Change Net income $ 1,070,975 $ 868,488 $ 202,487 23.3 % Adjustments: Property management 132,739 119,804 12,935 10.8 % General and administrative 61,653 60,716 937 1.5 % Depreciation 952,191 888,709 63,482 7.1 % Net (gain) loss on sales of real estate properties (546,797 ) (282,539 ) (264,258 ) 93.5 % Interest and other income (30,329 ) (22,345 ) (7,984 ) 35.7 % Other expenses 74,051 29,419 44,632 151.7 % Interest: Expense incurred, net 285,735 269,556 16,179 6.0 % Amortization of deferred financing costs 7,834 8,941 (1,107 ) (12.4 )% Income and other tax expense (benefit) 1,256 1,148 108 9.4 % (Income) loss from investments in unconsolidated entities 8,974 5,378 3,596 66.9 % Total NOI $ 2,018,282 $ 1,947,275 $ 71,007 3.6 % Rental income: Same store $ 2,823,418 $ 2,740,193 $ 83,225 3.0 % Non-same store/other 156,690 133,771 22,919 17.1 % Total rental income 2,980,108 2,873,964 106,144 3.7 % Operating expenses: Same store 894,477 869,635 24,842 2.9 % Non-same store/other 67,349 57,054 10,295 18.0 % Total operating expenses 961,826 926,689 35,137 3.8 % NOI: Same store 1,928,941 1,870,558 58,383 3.1 % Non-same store/other 89,341 76,717 12,624 16.5 % Total NOI $ 2,018,282 $ 1,947,275 $ 71,007 3.6 % See Note 16 in the Notes to Consolidated Financial Statements for our disclosure of reportable segments. • The increase in same store rental income is primarily driven by good demand and modest supply across most of our markets. 33 Table of Contents • The increase in same store operating expenses is due primarily to: • Real estate taxes – An $11.2 million increase due to escalation in rates and assessed values including an approximately one percentage point contribution to growth from 421-a tax abatement burnoffs in New York City.
Removed
("Toll"), which commenced construction during the first quarter of 2022 prior to our entrance into the joint venture; and • The Company entered into two separate unconsolidated joint ventures during 2023 for the purpose of developing vacant land parcels in the Boston and Seattle markets.
Added
Once the burnoffs are completed, previously rent-restricted apartment units will transition to market; • Other on-site operating expenses – A $3.4 million increase primarily driven by higher property-related legal expenses; • Insurance – A $3.3 million increase due to higher premiums on property insurance renewal due to conditions in the insurance market that while less difficult than recent years, remain challenging; • Utilities – A $3.4 million increase primarily driven by higher water, sewer and trash expense, partially offset by lower commodity prices for gas and electric; and • Repairs and maintenance – A $2.3 million increase primarily driven by higher minimum wage on contracted services, partially offset by lower resident Turnover compared to the same period of 2023. • Non-same store/other NOI results consist primarily of properties acquired in calendar years 2023 and 2024, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 2023 and 2024 sold properties.
Removed
The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. 31 Table of Contents The following tables present reconciliations of operating income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (amounts in thousands): Year Ended December 31, 2023 vs. 2022 2023 2022 $ Change % Change Operating income $ 1,160,585 $ 1,116,046 $ 44,539 4.0 % Adjustments: Property management 119,804 110,304 9,500 8.6 % General and administrative 60,716 58,710 2,006 3.4 % Depreciation 888,709 882,168 6,541 0.7 % Net (gain) loss on sales of real estate properties (282,539 ) (304,325 ) 21,786 (7.2 )% Total NOI $ 1,947,275 $ 1,862,903 $ 84,372 4.5 % Rental income: Same store $ 2,754,711 $ 2,609,766 $ 144,945 5.6 % Non-same store/other 119,253 125,414 (6,161 ) (4.9 )% Total rental income 2,873,964 2,735,180 138,784 5.1 % Operating expenses: Same store 873,448 837,602 35,846 4.3 % Non-same store/other 53,241 34,675 18,566 53.5 % Total operating expenses 926,689 872,277 54,412 6.2 % NOI: Same store 1,881,263 1,772,164 109,099 6.2 % Non-same store/other 66,012 90,739 (24,727 ) (27.3 )% Total NOI $ 1,947,275 $ 1,862,903 $ 84,372 4.5 % Note: See Note 17 in the Notes to Consolidated Financial Statements for detail by reportable segment/market.
Added
The increase in NOI is primarily a result of the Company's net acquisition activity during 2024. • The increase in consolidated total NOI is primarily a result of the Company’s higher NOI from same store properties, largely due to improvement in same store revenues as noted above and the Company's continued focus on same store expense efficiency.
Removed
Non-same store/other NOI results consist primarily of properties acquired in calendar years 2022 and 2023, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 2022 and 2023 sold properties. • The increase in same store rental income is primarily driven by strong demand and limited new supply, partially offset by a non-cash write-off of approximately $1.5 million in straight-line receivables due to the bankruptcy of Rite Aid. • The increase in same store operating expenses is due primarily to: • Repairs and maintenance – A $9.9 million increase primarily driven by greater outsourcing due to higher internal staffing utilization to address issues from California rain storms that occurred earlier in 2023; • Real estate taxes – A $5.8 million increase due to modest escalation in rates and assessed values; and • On-site payroll – An $8.0 million increase due primarily to fewer staffing vacancies as compared to 2022 and elevated employee benefit costs, partially offset by the impact of innovation initiatives. • The decrease in non-same store/other NOI is due primarily to: • A negative impact of lost NOI from 2022 and 2023 dispositions of $20.2 million; • A negative impact of $2.8 million in lower NOI from two properties that have been removed from same store while undergoing major renovations; • A negative impact of $18.1 million from a real estate tax transaction adjustment in 2022 that did not reoccur in 2023; and • A positive impact of higher NOI from non-stabilized properties acquired during 2021, 2022 and 2023 of $11.2 million and higher NOI from development and other properties in lease-up of $10.9 million. • The increase in consolidated total NOI is a result of the Company’s higher NOI from same store properties, largely due to improvement in same store revenues as noted above.
Added
See the Same Store Results section below for additional discussion of those results. See the reconciliation table of net income per the consolidated statements of operations to NOI above for the dollar and percentage changes related to the comparison discussions provided below.
Removed
See the Same Store Results section below for additional discussion of those results. 32 Table of Contents Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies.
Added
Interest expense, including amortization of deferred financing costs, increased during the year ended December 31, 2024 as compared to 2023, primarily due to higher overall debt balances outstanding and higher overall rates, partially offset by higher capitalized interest.
Removed
Interest and other income increased approximately $20.2 million during the year ended December 31, 2023 as compared to 2022.
Added
Residential operations account for more than 96.0% of total revenues for the year ended December 31, 2024. During the year ended December 31, 2024, the Company's operating business performed well, with healthy demand across most of our markets supported by a continuing solid job market, high employment levels and high wage growth among our target renter demographic.
Removed
The Company capitalized interest of approximately $12.3 million and $7.1 million during the years ended December 31, 2023 and 2022, respectively.
Added
Competitive new supply was modest in our Established Markets, but has been elevated in our Expansion Markets. As expected, our East Coast markets were our best performers. On the West Coast, Seattle showed improvement, while San Francisco improved but at a more modest pace.
Removed
The following table provides comparative total same store results and statistics for the 2023 Same Store Properties: 2023 vs. 2022 Same Store Results/Statistics Including 76,297 Same Store Apartment Units ($ in thousands except for Average Rental Rate) 2023 2022 Residential % Change Non- Residential % Change Total % Change Residential Non- Residential Total Revenues $ 2,657,868 5.7 % $ 96,843 (1) 1.9 % $ 2,754,711 5.6 % Revenues $ 2,514,711 $ 95,055 $ 2,609,766 Expenses $ 846,546 4.1 % $ 26,902 8.9 % $ 873,448 4.3 % Expenses $ 812,894 $ 24,708 $ 837,602 NOI $ 1,811,322 6.4 % $ 69,941 (0.6 %) $ 1,881,263 6.2 % NOI $ 1,701,817 $ 70,347 $ 1,772,164 Average Rental Rate $ 3,029 6.2 % Average Rental Rate $ 2,853 Physical Occupancy 95.9 % (0.4 %) Physical Occupancy 96.3 % Turnover 43.7 % 0.1 % Turnover 43.6 % 33 Table of Contents Note: Same store revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.
Added
Our Southern California markets (namely the city of Los Angeles) showed good demand but greater price sensitivity during the second half of 2024, though pricing started improving later in the year. We continued to make progress in delinquent resident move-out activity, which reduced delinquencies in our portfolio. However, that progress was slower during 2024 than originally anticipated.
Removed
(1) Includes the negative impact from the non-cash write-off of approximately $1.5 million in straight-line receivables during the year ended December 31, 2023 due to the bankruptcy of Rite Aid.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−4 removed6 unchanged
Biggest changeThe Company cannot predict the effect of adverse changes in interest rates on its debt and derivative instruments and, therefore, its exposure to market risk, nor can there be any assurance that long-term debt will be available at advantageous pricing. Consequently, future results may differ materially from the estimated adverse changes discussed above. Item 8.
Biggest changeHowever, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Company’s financial structure or results. 45 Table of Contents The Company cannot predict the effect of adverse changes in interest rates on its debt and derivative instruments and, therefore, its exposure to market risk, nor can there be any assurance that long-term debt will be available at advantageous pricing.
If interest rates had been 100 basis points higher in 2023 and 2022 and average balances coincided with year end balances, our annual interest expense would have been $6.4 million and $4.7 million higher, respectively.
If interest rates had been 100 basis points higher in 2024 and 2023 and average balances coincided with year end balances, our annual interest expense would have been $7.7 million and $6.4 million higher, respectively.
Changes in interest rates also affect the estimated fair market value of our fixed rate debt, computed using a discounted cash flow model. As of December 31, 2023, the Company had total outstanding fixed rate debt of $6.7 billion, or 91.3% of total debt, with an estimated fair market value of $6.2 billion.
Changes in interest rates also affect the estimated fair market value of our fixed rate debt, computed using a discounted cash flow model. As of December 31, 2024, the Company had total outstanding fixed rate debt of $7.3 billion, or 90.5% of total debt, with an estimated fair market value of $6.8 billion.
The Company had total variable rate debt of $0.6 billion, representing 8.7% of total debt, and $0.5 billion, representing 6.4% of total debt, as of December 31, 2023 and 2022, respectively.
The Company had total variable rate debt of $0.8 billion, representing 9.5% of total debt, and $0.6 billion, representing 8.7% of total debt, as of December 31, 2024 and 2023, respectively.
If interest rates had been 100 basis points lower as of December 31, 2023, the estimated fair market value would have increased by approximately $411.2 million. As of December 31, 2022, the Company had total outstanding fixed rate debt of $7.0 billion, or 93.6% of total debt, with an estimated fair market value of $6.2 billion.
If interest rates had been 100 basis points lower as of December 31, 2024, the estimated fair market value would have increased by approximately $400.3 million. As of December 31, 2023, the Company had total outstanding fixed rate debt of $6.7 billion, or 91.3% of total debt, with an estimated fair market value of $6.2 billion.
Additionally, we have exposure to long-term interest rates, particularly U.S. Treasuries, as they are utilized to price our long-term borrowings and therefore affect the cost of refinancing existing debt or incurring additional debt. The Alternative Reference Rates Committee (the “ARRC”) identified SOFR as the preferred alternative rate for USD LIBOR, which was discontinued in June 2023.
Additionally, we have exposure to long-term interest rates, particularly U.S. Treasuries, as they are utilized to price our long-term borrowings and therefore affect the cost of refinancing existing debt or incurring additional debt.
Financial Stateme nts and Supplementary Data See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K. Item 9. Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure None.
Consequently, future results may differ materially from the estimated adverse changes discussed above. Item 8. Financial Stateme nts and Supplementary Data See Index to Consolidated Financial Statements and Schedule on page 6 of this Form 10-K. Item 9. Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure None.
If interest rates had been 100 basis points lower as of December 31, 2022, the estimated fair market value would have increased by approximately $397.5 million. 44 Table of Contents As of December 31, 2023, the Company did not have any outstanding derivative instruments used for hedging purposes.
If interest rates had been 100 basis points lower as of December 31, 2023, the estimated fair market value would have increased by approximately $411.2 million. These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments.
Removed
During the year ended December 31, 2022, SOFR became the primary basis for determining interest payments on borrowings on the Company’s $2.5 billion revolving credit facility. The transition did not have a material impact on the Company's financial position or cash flows.
Removed
As of December 31, 2022, the Company’s derivative instruments had a net asset fair value of approximately $20.7 million. If interest rates increased by 35 basis points across the curve relative to market quotes as of December 31, 2022 (a 10% upward “parallel shift”), the net asset fair value of the Company’s derivative instruments would be approximately $39.4 million.
Removed
If interest rates decreased by 35 basis points (a 10% downward “parallel shift”), the net asset fair value of the Company’s derivative instruments would be approximately $1.5 million. These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments.
Removed
However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Company’s financial structure or results.

Other EQR 10-K year-over-year comparisons