[Explanatory Note](index=2&type=section&id=Explanatory%20Note) This report combines quarterly Form 10-Q filings for Equity Residential (EQR) and ERP Operating Limited Partnership (ERPOP), providing a consolidated view of their UPREIT operations - The report is a combined filing for Equity Residential (EQR) and ERP Operating Limited Partnership (ERPOP), which operate as a **single business**[9](index=9&type=chunk) - EQR is a REIT and the general partner of ERPOP, owning approximately **97.0%** of the partnership as of March 31, 2025. The remaining 3.0% is held by limited partners[11](index=11&type=chunk) - All property ownership, development, and debt are held at the **Operating Partnership (ERPOP) level**. EQR's primary assets are its investment in ERPOP, and it has no material liabilities[14](index=14&type=chunk) - The main differences in the financial statements between EQR and ERPOP relate to **shareholders' equity, partners' capital, and noncontrolling interests**[15](index=15&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's discussion and analysis for Equity Residential and ERPOP [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited consolidated financial statements for EQR and ERPOP, including balance sheets, income statements, cash flows, and detailed notes [Financial Statements of Equity Residential](index=5&type=section&id=Financial%20Statements%20of%20Equity%20Residential) EQR reported total assets of **$20.56 billion** and net income available to common shares of **$256.2 million** or **$0.67** per diluted share for Q1 2025 EQR Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $20,562,185 | $20,834,176 | | Total Liabilities | $8,973,055 | $9,249,829 | | Total Shareholders' Equity | $11,047,330 | $11,044,560 | EQR Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Rental Income | $760,810 | $730,818 | | Net Gain on Sales of Real Estate | $154,152 | $188,185 | | Net Income | $264,798 | $305,032 | | Net Income Available to Common Shares | $256,236 | $293,796 | | Diluted EPS | $0.67 | $0.77 | EQR Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $425,525 | $421,031 | | Net Cash from Investing Activities | $97,341 | $136,006 | | Net Cash used for Financing Activities | ($541,489) | ($500,472) | [Financial Statements of ERP Operating Limited Partnership](index=13&type=section&id=Financial%20Statements%20of%20ERP%20Operating%20Limited%20Partnership) ERPOP's financial statements mirror EQR's, reporting **$264.8 million** net income for Q1 2025, with key distinctions in the capital section detailing Partners' Capital - ERPOP's total assets and liabilities are **identical to EQR's**, as EQR consolidates ERPOP and has no other material assets or liabilities[19](index=19&type=chunk)[39](index=39&type=chunk) ERPOP Capital Structure (in thousands) | Capital Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | General Partner | $11,026,779 | $11,023,191 | | Limited Partners | $207,090 | $201,942 | | Total Partners' Capital | $11,254,420 | $11,246,502 | ERPOP Net Income Allocation (in thousands, except per unit data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $264,798 | $305,032 | | Net Income Available to Units | $263,338 | $302,071 | | Diluted EPU | $0.67 | $0.77 | [Notes to Consolidated Financial Statements](index=21&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's portfolio of **312 properties** with **84,648 units**, **$7.85 billion** total debt, **1.3%** Same Store NOI growth, and ongoing litigation Property Portfolio as of March 31, 2025 | Ownership Type | Properties | Apartment Units | | :--- | :--- | :--- | | Wholly Owned | 294 | 80,010 | | Partially Owned – Consolidated | 12 | 2,656 | | Partially Owned – Unconsolidated | 6 | 1,982 | | **Total** | **312** | **84,648** | - In Q1 2025, the company disposed of **2 consolidated rental properties** for **$225.6 million**, realizing a net gain of **$154.2 million**[84](index=84&type=chunk) - The company has **ongoing litigation**, including an **antitrust case** concerning revenue management software and a class action in California regarding late fees. The company believes the lawsuits are **without merit**[124](index=124&type=chunk)[126](index=126&type=chunk) Same Store vs. Non-Same Store NOI (in thousands) | Segment | Q1 2025 NOI | Q1 2024 NOI | % Change | | :--- | :--- | :--- | :--- | | Same Store | $480,559 | $474,485 | 1.3% | | Non-Same Store/Other | $24,526 | $12,776 | 92.0% | | **Total NOI** | **$505,085** | **$487,261** | **3.7%** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting **1.3%** Same Store NOI growth, **$2.2 billion** liquidity, and **$0.67** diluted EPS, with Normalized FFO increasing to **$0.95** per share [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Q1 2025 results show **1.3%** Same Store NOI growth and **2.2%** rental income increase, with diluted EPS declining to **$0.67** primarily due to lower property sales gains Diluted EPS/Unit Reconciliation (Q1 2024 vs Q1 2025) | Component | Impact on EPS/Unit | | :--- | :--- | | 2024 Diluted EPS/Unit | $0.77 | | Property NOI | $0.04 | | Net gain/loss on property sales | ($0.09) | | Depreciation expense | ($0.08) | | Other | $0.03 | | **2025 Diluted EPS/Unit** | **$0.67** | Same Store Operating Performance (Q1 2025 vs Q1 2024) | Metric | % Change | | :--- | :--- | | Rental Income | 2.2% | | Operating Expenses | 4.1% | | **NOI** | **1.3%** | - Operating performance was **strong in New York and Washington, D.C.**, with continued **improvement in San Francisco and Seattle**. Expansion markets faced **challenges from elevated new supply**[165](index=165&type=chunk)[166](index=166&type=chunk) - Same store operating expenses increased **4.1%**, driven by **higher real estate taxes** (including 421-a tax abatement burnoffs in NYC), **utilities**, and **on-site payroll costs**[161](index=161&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains **$2.2 billion** in available liquidity and **$7.85 billion** total debt, with **93.7%** fixed-rate, and declared a Q1 2025 dividend of **$0.6925** per share - The company has approximately **$2.2 billion** in readily available liquidity as of March 31, 2025, primarily from its **unsecured revolving credit facility**[168](index=168&type=chunk)[174](index=174&type=chunk) Debt Summary as of March 31, 2025 (in thousands) | Debt Type | Balance | % of Total | | :--- | :--- | :--- | | Secured | $1,593,803 | 20.3% | | Unsecured | $6,253,081 | 79.7% | | **Total** | **$7,846,884** | **100.0%** | | Fixed Rate | $7,350,892 | 93.7% | | Floating Rate | $495,992 | 6.3% | - The company declared a Q1 2025 dividend of **$0.6925 per share**, representing a **2.6% annualized increase** over 2024[178](index=178&type=chunk) - As of March 31, 2025, **89.9%** of the company's real estate investment (**$26.9 billion**) was **unencumbered**, providing significant financial flexibility[179](index=179&type=chunk) [Funds From Operations and Normalized Funds From Operations](index=53&type=section&id=Funds%20From%20Operations%20and%20Normalized%20Funds%20From%20Operations) Q1 2025 FFO available to common shares and units was **$368.9 million**, while Normalized FFO increased to **$372.5 million**, reflecting improved core operating performance FFO and Normalized FFO Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income Available to Common Shares/Units | $263,338 | $302,071 | | Depreciation | $256,746 | $225,695 | | Net (gain) on sales of real estate | ($154,152) | ($188,185) | | **FFO available to Common Shares/Units** | **$368,935** | **$338,419** | | Adjustments for non-recurring items | $3,583 | $26,477 | | **Normalized FFO available to Common Shares/Units** | **$372,518** | **$364,896** | - FFO and Normalized FFO are **non-GAAP measures** used to evaluate the **operating performance** of real estate companies by excluding items like depreciation and gains/losses on property sales[185](index=185&type=chunk)[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk profile since the 2024 Annual Report on Form 10-K - There have been **no material changes** to the company's market risk profile since the 2024 year-end 10-K filing[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures for both EQR and ERPOP were **effective** as of March 31, 2025[189](index=189&type=chunk)[191](index=191&type=chunk) - **No material changes** to internal control over financial reporting occurred during the first quarter of 2025[190](index=190&type=chunk)[193](index=193&type=chunk) [PART II - OTHER INFORMATION](index=56&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers other information including legal proceedings, risk factors, equity security sales, and exhibits [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes to legal proceedings disclosed in its 2024 Annual Report, with no expected material adverse effects - There have been **no material changes** to previously disclosed legal proceedings[194](index=194&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K filing - **No material changes** to risk factors have occurred since the 2024 year-end 10-K filing[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, EQR issued **107,399** unregistered Common Shares in exchange for an equal number of OP Units from ERPOP limited partners - In Q1 2025, EQR issued **107,399 Common Shares** in exchange for **107,399 OP Units** on a **one-for-one basis**[196](index=196&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section indexes exhibits filed with the Form 10-Q, including the 2025 Long-Term Incentive Plan Award Agreement and CEO/CFO certifications - The report includes exhibits such as the **2025 Long-Term Incentive Plan Award Agreement** and **CEO/CFO certifications**[203](index=203&type=chunk)

Core Viewpoint - Equity Residential (EQR) reported a first-quarter 2025 normalized funds from operations (FFO) per share of 95 cents, exceeding the Zacks Consensus Estimate of 93 cents and reflecting a 2.2% year-over-year improvement [1] Financial Performance - Rental income for the quarter was $760.8 million, which fell short of the consensus estimate of $766.8 million, but still represented a 4.1% increase year over year [1] - Same-store revenues increased by 2.2% year over year, surpassing the estimate of 2%, while same-store expenses rose by 4.1%, exceeding the estimate of 2.2% [3] - Same-store net operating income (NOI) grew by 1.3% year over year, which was below the estimate of 1.9% [3] - The average rental rate increased by 2.4% year over year to $3,160, and same-store physical occupancy improved by 20 basis points to 96.5% [4] Portfolio Activity - The company sold two properties with 546 apartment units for approximately $225.6 million and one land parcel for about $4.3 million [6] - EQR completed joint venture development projects in New York and Denver, totaling 720 apartment units for approximately $285.9 million, and a wholly owned project in San Francisco with 225 units for about $152.6 million [7] Balance Sheet - At the end of Q1 2025, EQR had cash and cash equivalents of $39.8 million, down from $62.3 million at the end of 2024 [8] - The net debt to normalized EBITDAre ratio improved to 4.21X from 4.38X in the previous quarter, while unencumbered NOI as a percentage of total NOI increased to 90.5% from 89.7% [8] Guidance - EQR reaffirmed its guidance for 2025, projecting normalized FFO per share between $3.90 and $4.00, with the Zacks Consensus Estimate at $3.97 [10][11] - For Q2 2025, the company expects normalized FFO per share in the range of 96 cents to $1.00, with the consensus estimate at 99 cents [10] - The full-year guidance includes same-store revenue growth of 2.25-3.25%, expense increases of 3.5-4.5%, and NOI expansion of 1.4-3.0%, with physical occupancy expected at 96.2% [11]

Financial Data and Key Metrics Changes - The first quarter results exceeded expectations, with same-store revenue growth driven by improved physical occupancy at 96.5% and record low resident turnover of 7.9% [10][11] - Blended rate growth for the quarter was 1.8%, aligning with the midpoint of expectations [11] - The company maintained its guidance for $1.5 billion in acquisitions and $1 billion in dispositions for 2025, with minimal transactions expected in the first quarter [8][9] Business Line Data and Key Metrics Changes - Strong performance was noted in New York and Washington DC, with continued improvement in West Coast markets like Seattle and San Francisco [11] - The average household income of residents increased from the previous year, with rent-to-income ratios remaining favorable at 20% [12] Market Data and Key Metrics Changes - The DC market is expected to deliver 12,000 new units this year, with a significant drop in supply projected for 2026 [15] - In San Francisco, occupancy is above 97%, with net effective pricing up 6% since the beginning of the year, despite ongoing concessions [108] Company Strategy and Development Direction - The company is focused on leveraging supply and demand dynamics favoring rental housing, particularly in desirable metro areas [8] - There is an emphasis on innovation and automation to enhance operational efficiency and customer experience [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged heightened uncertainty in the economy due to governmental actions but remains optimistic about the rental housing sector's long-term demand [7][8] - The company expects continued strong performance in the second quarter, with blended rate growth projected between 2.8% and 3.4% [20] Other Important Information - The company is not currently seeing signs of consumer weakness, with no significant increases in lease breaks or delinquencies reported [13][14] - Management expressed disappointment over new rent control measures in Washington State, viewing them as a disincentive for investment [62][63] Q&A Session Summary Question: What are the acquisition opportunities in the Sunbelt? - Management noted increased transaction activity recently, with multifamily assets remaining a favored investment despite macro uncertainties [24][26] Question: How is blended spread guidance formed? - The guidance is based on expected seasonal trends and current lease activity, with confidence in achieving around a 5% range for renewals [27][28] Question: Why are the Bay Area and Seattle markets diverging? - Both markets are on a recovery trajectory, with San Francisco showing stronger performance than Seattle, which is stabilizing [32][34] Question: What is the impact of rent control measures? - New rent control in Washington State is viewed negatively, but immediate effects on the company's ability to raise rents are not expected [62][63] Question: How is the company managing renewal processes? - The company maintains a robust renewal process without significant changes, focusing on communication with residents to confirm renewal intentions [42][44] Question: What are the expectations for expansion markets? - The company anticipates muted expectations for the first half of the year but expects stronger revenue growth as new acquisitions are integrated into the portfolio [50][52] Question: How is the company addressing construction costs impacted by tariffs? - While tariffs introduce uncertainty, contractors are becoming more competitive, which may offset potential cost increases [95][96] Question: What is the current state of demand in Washington, D.C.? - Demand remains stable, with a diversified economy reducing reliance on government jobs, and no immediate concerns regarding lease breaks [75][76]

Financial Data and Key Metrics Changes - The first quarter results exceeded expectations, with same-store revenue growth driven by improved physical occupancy at 96.5% and record low resident turnover of 7.9% [9][10] - Blended rate growth of 1.8% was achieved, aligning with the midpoint of expected ranges [10] - The company maintains guidance for $1.5 billion in acquisitions and $1 billion in dispositions for 2025, with minimal transactions expected in Q1 [6][7] Business Line Data and Key Metrics Changes - Strong performance noted in New York and Washington DC, with continued improvement in West Coast markets like Seattle and San Francisco [10] - The average household income of residents increased from the prior year, with favorable rent-to-income ratios at 20% [11] Market Data and Key Metrics Changes - The DC market is expected to deliver 12,000 new units this year, with a significant drop-off projected for 2026 [14] - In Seattle, occupancy is at 96.5%, with good rental rate growth, while San Francisco shows strong momentum with occupancy above 97% [17][18] - Expansion markets like Atlanta, Dallas, and Austin are performing as expected, though Denver showed weaker demand [18][19] Company Strategy and Development Direction - The company is focused on leveraging supply and demand dynamics favoring rental housing, with a strong cash flow business and a robust balance sheet [6] - Strategic automation initiatives are underway to enhance operational efficiency and customer experience [19][20] - The company is open to share buybacks but is cautious due to market uncertainties [38] Management's Comments on Operating Environment and Future Outlook - Management acknowledges heightened uncertainty in the economy due to governmental actions but remains optimistic about the rental housing sector's long-term demand [5][6] - The company expects blended rate growth of 2.8% to 3.4% in Q2, positioning well for the primary leasing season despite economic ambiguity [20] - Management is not currently seeing signs of consumer weakness, with strong financial health among residents [11][12] Other Important Information - The company is monitoring the impact of potential rent control measures in Washington State and Maryland, expressing disappointment over these developments [60][63] - The company is seeing a mixed performance in Los Angeles, with suburban areas performing better than urban locations [14][15] Q&A Session Summary Question: Acquisition opportunities in the Sunbelt - Management noted increased transaction activity recently, with multifamily assets remaining a favored investment despite macro uncertainties [28] Question: Blended spread guidance formulation - Guidance is based on expected seasonal trends, with less than a third of new leases signed for Q2 so far [30] Question: Divergence in Bay Area and Seattle performance - Management indicated both markets are recovering, with San Francisco outperforming expectations while Seattle is on track with prior models [35] Question: Operating side changes for leasing season - No changes in renewal processes are planned, with a strong setup heading into the leasing season [46] Question: Impact of expenses on same-store revenue guidance - Management confirmed that expenses are proceeding as expected, with no significant pressures from tariffs affecting the guidance [47][70] Question: Demand quantification in Washington, D.C. - Management is monitoring the return to office trends but noted no significant influx of demand yet [121] Question: Concessions in San Francisco - Concessions are still prevalent but are declining, with net effective pricing increasing [110] Question: Future development amidst construction costs - Management indicated that while tariffs introduce uncertainty, contractors are becoming more competitive, potentially offsetting cost increases [95]

Financial Performance - Equity Residential (EQR) reported revenue of $760.81 million for the quarter ended March 2025, a year-over-year increase of 4.1% [1] - The EPS for the same period was $0.95, compared to $0.77 a year ago, indicating a positive growth in earnings [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $766.84 million, resulting in a surprise of -0.79% [1] - The company delivered an EPS surprise of +2.15%, with the consensus EPS estimate being $0.93 [1] Key Metrics - The physical occupancy rate was 96.5%, exceeding the average estimate of 96.1% from four analysts [4] - Total apartment units stood at 84,648, surpassing the three-analyst average estimate of 83,881 [4] - Change in same-store revenue growth was 2.2%, slightly below the 2.4% estimated by two analysts [4] - Rental income from same-store properties was $715.80 million, compared to the estimated $722.99 million, reflecting a -0.1% change year-over-year [4] - Net earnings per share (diluted) were $0.67, significantly higher than the average estimate of $0.32 based on eight analysts [4] Stock Performance - Shares of Equity Residential have returned -3.2% over the past month, while the Zacks S&P 500 composite changed by -0.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Equity Residential (EQR) came out with quarterly funds from operations (FFO) of $0.95 per share, beating the Zacks Consensus Estimate of $0.93 per share. This compares to FFO of $0.93 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 2.15%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1 per share when it actually produced FFO of $1, delivering no surprise.Over the last four quarters, the co ...

First Quarter 2025 Results Table of Contents | Earnings Release | 1 - 4 | | --- | --- | | Consolidated Statements of Operations | 5 | | Consolidated Statements of Funds From Operations and Normalized | | | Funds From Operations | 6 | | Consolidated Balance Sheets | 7 | | Portfolio Summary | 8 | | Portfolio Rollforward | 9 | | Same Store Results | 10 - 16 | | Debt Summary | 17 - 19 | | Capital Structure | 20 | | Common Share and Unit Weighted Average Amounts Outstanding | 21 | | Partially Owned Properties | ...

Equity Residential (EQR) is slated to report first-quarter 2025 results after the closing bell on April 29. While the company’s quarterly results are likely to reflect growth in revenues, funds from operations (FFO) per share are expected to remain flat.In the last reported quarter, this Chicago, IL-based residential real estate investment trust (REIT) came up with an in-line performance in terms of normalized FFO per share. Results reflected healthy same-store revenue performance and high occupancy.Over th ...

Group 1 - The article emphasizes the potential of high-quality REITs (Real Estate Investment Trusts) with strong balance sheets to navigate the current high-interest-rate environment, suggesting that they may be long-term winners despite the apparent challenges [2]. Group 2 - The focus of iREIT+HOYA Capital is on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging, indicating a strategic approach to investment [1].

Industry Overview - The Zacks REIT and Equity Trust - Residential industry includes companies that own, develop, and manage various residential properties, generating revenues by renting spaces to tenants [3] - The industry is currently facing economic uncertainty, slower job growth, federal job cuts, and new tariffs, which are affecting consumer confidence and household formation, potentially dampening residential real estate demand [1][4] Current Market Conditions - Elevated supply in certain regions, particularly in the Sun Belt metros, is placing downward pressure on rents despite strong national demand [6][7] - Rental demand remains historically strong, supported by favorable demographics and the growing affordability gap between renting and homeownership [2][8] - The transition from renting to homeownership is challenging due to high mortgage rates, making renting a more viable option [9] Financial Performance - The Zacks Industry Rank for the REIT and Equity Trust - Residential industry is 158, placing it in the bottom 36% of around 250 Zacks industries, indicating dim near-term prospects [10][11] - The industry's funds from operations (FFO) per share estimates for 2025 and 2026 have been revised down by 4.8% and 4.5%, respectively, reflecting a loss of confidence in growth potential [12] Stock Market Performance - The industry has underperformed the broader Zacks Finance sector and the S&P 500 over the past year, returning 8% compared to the S&P 500's increase of 8.1% and the Finance sector's rally of 15.8% [14] - The industry is currently trading at a forward 12-month price-to-FFO ratio of 16.35X, higher than the Finance sector's 15.30X but lower than the S&P 500's 19.88X [16] Notable Companies - **Equity Residential**: Positioned to benefit from favorable apartment market conditions, with a strong presence in urban areas and a healthy balance sheet with nearly $1.95 billion of liquidity [18][20] - **Essex Property Trust**: Benefits from healthy demand in the West Coast market, where median household income has grown faster than rents, indicating potential for future rent growth [22][25] - **UMH Properties, Inc.**: Operates 141 manufactured home communities and has seen occupancy increases, with a rental home occupancy rate of 94.7% [27][29]