Core Viewpoint - Equity Residential is a real estate investment trust focused on acquiring, developing, and managing residential properties in affluent urban areas, with upcoming Q3 2025 earnings expected to show a decline in EPS but an increase in revenue compared to the previous year [1][2]. Financial Performance - The company is set to report Q3 2025 earnings on October 29, with analysts predicting an EPS of $0.64, down from $0.98 in the same quarter last year [2]. - Quarterly revenue is anticipated to reach $779.13 million, an increase from $748.35 million a year earlier [2]. - In Q2 2025, the company reported FFO of $0.99, exceeding the consensus estimate of $0.98, while revenues were $768.82 million, slightly below the consensus of $770.28 million [7]. Historical Investment Analysis - If an investor had purchased $10,000 worth of Equity Residential stock 10 years ago at approximately $70.23 per share, the current value would be $9,435, reflecting a decline in stock price to $66.26 [3]. - Over the same period, the company paid about $35.72 in dividends per share, totaling $5,086 in dividends, leading to a total investment value of $14,521 and a total return of 45.21% [4][5]. - This total return is significantly lower than the S&P 500's total return of 295.40% over the same timeframe [5]. Future Outlook - Equity Residential has a consensus rating of "Neutral" with a price target of $73.98, indicating a potential upside of over 11% from the current stock price [6]. - The CEO noted an increase in same-store revenue and net operating income guidance, attributing this to sustained demand and a financially resilient customer base [8].

Core Insights - The U.S. apartment market is showing signs of softening, with mild rent cuts and easing occupancy rates indicating a shifting environment for landlords and investors [1][12] - Leading residential real estate investment trusts (REITs) like Equity Residential, AvalonBay Communities, and Camden Property Trust are still delivering steady performance despite market challenges [2][12] Apartment Market Conditions - U.S. apartment occupancy decreased slightly to 95.4% in August 2025, a 10 basis point drop month over month, but still 130 basis points higher than the previous year [3] - Effective asking rents fell by 0.2% year-over-year as of August 2025, marking the first annual rent cuts since March 2021, highlighting supply pressures and changing demand patterns [4] - The South and West regions are experiencing significant weakness due to high construction activity, with the South not seeing annual rent growth since mid-2023 [5] - Tourism-driven markets like Orlando and Las Vegas have been negatively impacted, while supply-heavy metros such as Austin, Denver, and Phoenix recorded some of the largest rent reductions [6] Performance of Coastal and High-Barrier Markets - Coastal and high-barrier-to-entry markets are performing well, with tech hubs like San Francisco, San Jose, and New York seeing rent increases between 3% and 7% year-over-year [7] Operating Updates of Residential REITs - Equity Residential reported that its same-store revenue growth is on track, expecting growth of 2.6% to 3.2% and physical occupancy of 96.4% for full-year 2025 [8] - AvalonBay Communities noted that its same-store residential revenue growth for July and August 2025 met expectations, with net operating income (NOI) growth running ahead of projections at 2.6% [10][11] - Camden Property Trust's third-quarter performance is consistent with prior expectations, indicating stable growth in its Sun Belt markets [12]

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides details on the Form 10-Q filing, including registrant information and filing status [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) This report is a Quarterly Report on Form 10-Q for June 30, 2025, filed by EQR and ERPOP - The report is a Quarterly Report on Form 10-Q for the period ended **June 30, 2025**[2](index=2&type=chunk) - **Equity Residential (EQR)** is a large accelerated filer, while **ERP Operating Limited Partnership (ERPOP)** is a non-accelerated filer[6](index=6&type=chunk) Registrant Filing Status | Registrant | Filing Status | | :----------- | :------------ | | Equity Residential | Large accelerated filer | | ERP Operating Limited Partnership | Non-accelerated filer | [Registrant Information](index=1&type=section&id=Registrant%20Information) EQR is a Maryland REIT and ERPOP an Illinois limited partnership, both having filed all required reports - **Equity Residential (EQR)** is a Maryland entity, and **ERP Operating Limited Partnership (ERPOP)** is an Illinois entity[3](index=3&type=chunk) - Both entities have filed all required reports and submitted every Interactive Data File during the preceding 12 months[4](index=4&type=chunk) Trading Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------------------------------------ | :---------------- | :---------------------------------------- | | Common Shares of Beneficial Interest, $0.01 Par Value (Equity Residential) | EQR | New York Stock Exchange | | 7.57% Notes due August 15, 2026 (ERP Operating Limited Partnership) | N/A | New York Stock Exchange | [Explanatory Note](index=2&type=section&id=EXPLANATORY%20NOTE) This section clarifies the combined reporting structure of EQR and ERPOP [Company Structure and Relationship](index=2&type=section&id=Company%20Structure%20and%20Relationship) This report combines EQR and ERPOP Form 10-Q filings, with EQR as general partner holding 97.0% ownership - The report combines Form 10-Q for **Equity Residential (EQR)** and **ERP Operating Limited Partnership (ERPOP)**[10](index=10&type=chunk) - EQR is the general partner of ERPOP, owning approximately **97.0% interest** as of June 30, 2025, and exclusively controls ERPOP's management[12](index=12&type=chunk) - The Company operates as an **UPREIT**, where EQR contributes equity offering proceeds to ERPOP for OP Units, exchangeable for Common Shares on a one-for-one basis[13](index=13&type=chunk) [Benefits of Combined Reporting](index=2&type=section&id=Benefits%20of%20Combined%20Reporting) Combined reporting enhances investor understanding, streamlines disclosure, and creates time and cost efficiencies - Combined reporting enhances investor understanding by presenting the business as a whole[14](index=14&type=chunk) - It eliminates duplicative disclosure, providing a more streamlined and readable presentation[14](index=14&type=chunk) - The combined report creates time and cost efficiencies[14](index=14&type=chunk) [Financial Statement Differences and Presentation](index=3&type=section&id=Financial%20Statement%20Differences%20and%20Presentation) EQR's financial statements consolidate ERPOP, with key differences in equity and capital - EQR consolidates ERPOP for financial reporting, with EQR having no material assets or liabilities other than its investment in ERPOP, and **all debt incurred by ERPOP**[15](index=15&type=chunk)[20](index=20&type=chunk) - Key differences between EQR and ERPOP financial statements are in **shareholders' equity, partners' capital, and noncontrolling interests**[16](index=16&type=chunk) - The report provides separate consolidated financial statements for EQR and ERPOP, a single set of notes, and a combined Management's Discussion and Analysis[17](index=17&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents comprehensive financial statements and disclosures for EQR and ERPOP [Item 1. Financial Statements of Equity Residential](index=5&type=section&id=Item%201.%20Financial%20Statements%20of%20Equity%20Residential) This section presents EQR's unaudited consolidated financial statements and key financial highlights EQR Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :------------------ | :----- | | Total assets | $21,027,514 | $20,834,176 | +$193,338 | | Total liabilities | $9,501,134 | $9,249,829 | +$251,305 | | Total equity | $11,208,475 | $11,245,784 | -$37,309 | EQR Consolidated Statements of Operations Highlights (Amounts in thousands except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Rental income | $1,529,637 | $1,464,981 | +$64,656 | | Total expenses | $1,109,354 | $1,029,039 | +$80,315 | | Net income available to Common Shares | $448,237 | $470,924 | -$22,687 | | Basic EPS | $1.18 | $1.24 | -$0.06 | | Diluted EPS | $1.18 | $1.24 | -$0.06 | EQR Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $785,070 | $817,968 | -$32,898 | | Net cash used for investing activities | $(518,995) | $(2,357) | -$516,638 | | Net cash used for financing activities | $(294,287) | $(817,185) | +$522,898 | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | -$6,467 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section presents EQR's consolidated balance sheets as of June 30, 2025, and December 31, 2024 | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Investment in real estate, net | $19,760,201 | $19,558,328 | | Total assets | $21,027,514 | $20,834,176 | | LIABILITIES AND EQUITY (in thousands) | | | | Total liabilities | $9,501,134 | $9,249,829 | | Total shareholders' equity | $11,008,221 | $11,044,560 | | Total equity | $11,208,475 | $11,245,784 | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20for%20the%20six%20months%20and%20quarters%20ended%20June%2030%2C%202025%20and%202024) This section presents EQR's consolidated statements of operations and comprehensive income | REVENUES (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Rental income | $1,529,637 | $1,464,981 | $768,827 | $734,163 | | EXPENSES (in thousands) | | | | | | Total expenses | $1,109,354 | $1,029,039 | $542,812 | $508,609 | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Net income available to Common Shares | $448,237 | $470,924 | $192,001 | $177,128 | | Earnings per share – basic | $1.18 | $1.24 | $0.51 | $0.47 | | Earnings per share – diluted | $1.18 | $1.24 | $0.50 | $0.47 | | Comprehensive Income (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Other comprehensive income (loss) | $(2,599) | $1,210 | $(1,781) | $600 | | Comprehensive income | $460,984 | $489,797 | $197,004 | $184,155 | | Comprehensive income attributable to controlling interests | $446,418 | $474,447 | $190,622 | $178,067 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section presents EQR's consolidated statements of cash flows | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $785,070 | $817,968 | | Net cash provided by (used for) investing activities | $(518,995) | $(2,357) | | Net cash provided by (used for) financing activities | $(294,287) | $(817,185) | | Net increase (decrease) in cash and cash equivalents and restricted deposits | $(28,212) | $(1,574) | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | [Consolidated Statements of Changes in Equity](index=12&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity%20for%20the%20six%20months%20and%20quarters%20ended%20June%2030%2C%202025%20and%202024) This section presents EQR's consolidated statements of changes in equity | Equity Component (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income attributable to controlling interests | Common Share distributions | Balance, end of period (June 30, 2025) | | :------------------------------ | :--------------------------------------- | :------------------------------------------- | :------------------------- | :------------------------------------- | | Preferred Shares | $17,155 | — | — | $17,155 | | Common Shares, $0.01 par value | $3,795 | — | — | $3,800 | | Paid in capital | $9,611,826 | — | — | $9,656,272 | | Retained earnings | $1,407,570 | $448,948 | $(526,428) | $1,329,379 | | Accumulated other comprehensive income (loss) | $4,214 | — | — | $1,615 | | Total Shareholders' Equity | $11,044,560 | $448,948 | $(526,428) | $11,008,221 | | Noncontrolling Interests (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income attributable to Noncontrolling Interests | Distributions to Noncontrolling Interests | Balance, end of period (June 30, 2025) | | :------------------------------------ | :--------------------------------------- | :------------------------------------------ | :---------------------------------------- | :------------------------------------- | | Operating Partnership | $201,942 | $12,328 | $(16,159) | $202,717 | | Partially Owned Properties | $(718) | $2,307 | $(4,052) | $(2,463) | | Distributions Declared per Common Share/Unit | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :------------------------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Common Share/Unit | $1.385 | $1.35 | $0.6925 | $0.675 | [Financial Statements of ERP Operating Limited Partnership](index=15&type=section&id=Financial%20Statements%20of%20ERP%20Operating%20Limited%20Partnership) This section provides ERPOP's unaudited consolidated financial statements, consistent with EQR's UPREIT structure ERPOP Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :------------------ | :----- | | Total assets | $21,027,514 | $20,834,176 | +$193,338 | | Total liabilities | $9,501,134 | $9,249,829 | +$251,305 | | Total capital | $11,208,475 | $11,245,784 | -$37,309 | ERPOP Consolidated Statements of Operations Highlights (Amounts in thousands except per Unit data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Rental income | $1,529,637 | $1,464,981 | +$64,656 | | Total expenses | $1,109,354 | $1,029,039 | +$80,315 | | Net income attributable to controlling interests | $461,276 | $486,548 | -$25,272 | | Basic EPU | $1.18 | $1.24 | -$0.06 | | Diluted EPU | $1.18 | $1.24 | -$0.06 | ERPOP Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $785,070 | $817,968 | -$32,898 | | Net cash used for investing activities | $(518,995) | $(2,357) | -$516,638 | | Net cash used for financing activities | $(294,287) | $(817,185) | +$522,898 | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | -$6,467 | [Consolidated Balance Sheets](index=15&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section presents ERPOP's consolidated balance sheets as of June 30, 2025, and December 31, 2024 | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Investment in real estate, net | $19,760,201 | $19,558,328 | | Total assets | $21,027,514 | $20,834,176 | | LIABILITIES AND CAPITAL (in thousands) | | | | Total liabilities | $9,501,134 | $9,249,829 | | Total partners' capital | $11,210,938 | $11,246,502 | | Total capital | $11,208,475 | $11,245,784 | [Consolidated Statements of Operations and Comprehensive Income](index=16&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20for%20the%20six%20months%20and%20quarters%20ended%20June%2030%2C%202025%20and%202024) This section presents ERPOP's consolidated statements of operations and comprehensive income | REVENUES (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Rental income | $1,529,637 | $1,464,981 | $768,827 | $734,163 | | EXPENSES (in thousands) | | | | | | Total expenses | $1,109,354 | $1,029,039 | $542,812 | $508,609 | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Net income attributable to controlling interests | $461,276 | $486,548 | $197,582 | $182,486 | | Earnings per Unit – basic | $1.18 | $1.24 | $0.51 | $0.47 | | Earnings per Unit – diluted | $1.18 | $1.24 | $0.50 | $0.47 | | Comprehensive Income (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Other comprehensive income (loss) | $(2,599) | $1,210 | $(1,781) | $600 | | Comprehensive income | $460,984 | $489,797 | $197,004 | $184,155 | | Comprehensive income attributable to controlling interests | $458,677 | $487,758 | $195,801 | $183,086 | [Consolidated Statements of Cash Flows](index=18&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section presents ERPOP's consolidated statements of cash flows | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $785,070 | $817,968 | | Net cash provided by (used for) investing activities | $(518,995) | $(2,357) | | Net cash provided by (used for) financing activities | $(294,287) | $(817,185) | | Net increase (decrease) in cash and cash equivalents and restricted deposits | $(28,212) | $(1,574) | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | [Consolidated Statements of Changes in Capital](index=22&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Capital%20for%20the%20six%20months%20and%20quarters%20ended%20June%2030%2C%202025%20and%202024) This section presents ERPOP's consolidated statements of changes in capital | Capital Component (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income available to Units | Distributions to Limited Partners | Balance, end of period (June 30, 2025) | | :------------------------------- | :--------------------------------------- | :---------------------------- | :-------------------------------- | :------------------------------------- | | Preference Units | $17,155 | — | — | $17,155 | | General Partner | $11,023,191 | $448,237 | $(526,428) | $10,989,451 | | Limited Partners | $201,942 | $12,328 | $(16,159) | $202,717 | | Accumulated other comprehensive income (loss) | $4,214 | — | — | $1,615 | | Total Partners' Capital | $11,246,502 | $460,565 | $(542,587) | $11,210,938 | | Noncontrolling Interests – Partially Owned Properties (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income attributable to Noncontrolling Interests | Distributions to Noncontrolling Interests | Balance, end of period (June 30, 2025) | | :--------------------------------------------------- | :--------------------------------------- | :------------------------------------------ | :---------------------------------------- | :------------------------------------- | | Partially Owned Properties | $(718) | $2,307 | $(4,052) | $(2,463) | [Notes to Consolidated Financial Statements](index=24&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20of%20Equity%20Residential%20and%20ERP%20Operating%20Limited%20Partnership) This section provides detailed notes to the consolidated financial statements for EQR and ERPOP [1. Business](index=24&type=section&id=1.%20Business) This note describes EQR's business, focusing on acquiring, developing, and managing residential properties through ERPOP - **Equity Residential (EQR)** is an S&P 500 company focused on acquiring, developing, and managing residential properties in dynamic cities, with operations conducted by **ERP Operating Limited Partnership (ERPOP)**[65](index=65&type=chunk) - As of June 30, 2025, the Company owned all or a portion of **319 properties**, comprising **86,422 apartment units**, across 10 states and the District of Columbia[67](index=67&type=chunk) Ownership Type | Ownership Type | Properties | Apartment Units | | :------------------------------ | :--------- | :-------------- | | Wholly Owned Properties | 302 | 82,054 | | Partially Owned Properties – Consolidated | 12 | 2,656 | | Partially Owned Properties – Unconsolidated | 5 | 1,712 | | Total | 319 | 86,422 | [2. Summary of Significant Accounting Policies](index=24&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies used in preparing the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with **GAAP** for interim financial information and Form 10-Q instructions[68](index=68&type=chunk) - EQR is taxed as a **REIT**, and ERPOP is generally not liable for federal income taxes, while Taxable REIT subsidiaries (TRSs) incur federal and state income taxes[72](index=72&type=chunk) - The Company is evaluating the impact of new **FASB standards** on disaggregation of income statement expenses and **SEC climate-related disclosure rules**[73](index=73&type=chunk)[74](index=74&type=chunk) [3. Equity, Capital and Other Interests](index=27&type=section&id=3.%20Equity%2C%20Capital%20and%20Other%20Interests) This note details equity, capital, and other interests, including outstanding shares, units, and noncontrolling interests Equity Securities | Equity Securities | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Common Shares outstanding at June 30, | 379,980,440 | 379,086,882 | | Units outstanding at June 30, | 11,606,272 | 11,663,842 | | Total Common Shares and Units outstanding at June 30, | 391,586,712 | 390,750,724 | | Units Ownership Interest in Operating Partnership | 3.0% | 3.0% | - Noncontrolling Interests – Operating Partnership (Limited Partners Capital) can exchange their Units for EQR Common Shares on a **one-for-one basis**[80](index=80&type=chunk) Redeemable Noncontrolling Interests (in thousands) | Redeemable Noncontrolling Interests (in thousands) | 2025 | 2024 | | :------------------------------------------------- | :----- | :----- | | Balance at January 1, | $338,563 | $289,248 | | Change in market value | $(19,568) | $39,058 | | Change in carrying value | $(1,090) | $(665) | | Balance at June 30, | $317,905 | $327,641 | [4. Real Estate](index=30&type=section&id=4.%20Real%20Estate) This note provides information on the Company's real estate investments, including acquisitions, dispositions, and development projects Investment in Real Estate (in thousands) | Investment in Real Estate (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Investment in real estate, net | $19,760,201 | $19,558,328 | | Land | $5,636,458 | $5,606,531 | | Depreciable property | $24,711,740 | $24,039,412 | | Projects under development | $168,626 | $261,706 | - During the six months ended June 30, 2025, the Company acquired **8 consolidated rental properties (2,064 units)** for **$533.8 million** and disposed of **3 consolidated rental properties (835 units)** for **$346.6 million**, resulting in a net gain of **$212.4 million**[94](index=94&type=chunk)[96](index=96&type=chunk) - The Company acquired its joint venture partner's **10% interest** in a **270-unit apartment property**, making it wholly owned, and recorded a real estate basis of **$88.4 million**[95](index=95&type=chunk) [5. Investments in Partially Owned Entities](index=31&type=section&id=5.%20Investments%20in%20Partially%20Owned%20Entities) This note details the Company's investments in partially owned entities, including consolidated and unconsolidated joint ventures - The Company consolidates ERPOP and certain joint ventures identified as **Variable Interest Entities (VIEs)** where EQR is the primary beneficiary[98](index=98&type=chunk)[99](index=99&type=chunk) Consolidated VIEs | Consolidated VIEs | Properties | Apartment Units | | :------------------------ | :--------- | :-------------- | | Operating Properties | 12 | 2,656 | | Projects Under Development | 1 | 440 | Investments in Unconsolidated Entities (in thousands) | Investments in Unconsolidated Entities (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------ | :---------------- | | Various Real Estate Holdings (VIE) | $34,615 | $34,510 | | Development and Lease-Up Projects and Land Held for Development (VIE) | $338,984 | $323,998 | | Real Estate Technology Funds/Companies (VIE) | $30,429 | $28,276 | | Total Investments in Unconsolidated Entities | $403,768 | $386,531 | [6. Restricted Deposits](index=33&type=section&id=6.%20Restricted%20Deposits) This note provides a breakdown of restricted deposits, including mortgage escrow and restricted cash Restricted Deposits (in thousands) | Restricted Deposits (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Mortgage escrow deposits | $36,281 | $31,425 | | Restricted cash | $64,397 | $66,439 | | Total Restricted deposits | $100,678 | $97,864 | [7. Leases](index=33&type=section&id=7.%20Leases) This note details the Company's lease activities, including residential and non-residential operating leases - The Company acts as a lessor for **residential and non-residential operating leases**[109](index=109&type=chunk) Lease Income Type (in thousands) | Lease Income Type (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Residential and non-residential rent | $1,399,450 | $1,346,918 | | Utility recoveries (RUBS income) | $51,432 | $45,891 | | Parking rent | $24,640 | $23,668 | | Total lease revenue | $1,478,143 | $1,412,979 | | Total other rental income | $51,494 | $52,002 | | Total Rental income | $1,529,637 | $1,464,981 | Residential Bad Debt (in thousands) | Residential Bad Debt (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Bad debt, net | $14,990 | $17,139 | | % of residential rental income | 1.0% | 1.2% | [8. Debt](index=34&type=section&id=8.%20Debt) This note provides information on the Company's debt structure, including mortgage notes, unsecured notes, and credit facilities - All debt is incurred by the **Operating Partnership**, not EQR[115](index=115&type=chunk) Debt Type (in thousands) | Debt Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Mortgage notes payable, net | $1,594,765 | $1,630,690 | | Notes, net | $5,994,914 | $5,947,376 | | Line of credit and commercial paper | $782,147 | $543,679 | | Total liabilities | $9,501,134 | $9,249,829 | - The Company has a **$2.5 billion unsecured revolving credit facility** maturing October 26, 2027, and a **$1.5 billion unsecured commercial paper note program**; **$1.71 billion** was available under the credit facility as of June 30, 2025[120](index=120&type=chunk)[121](index=121&type=chunk)[123](index=123&type=chunk) [9. Fair Value Measurements](index=36&type=section&id=9.%20Fair%20Value%20Measurements) This note describes the Company's fair value measurements for financial instruments using a three-level valuation hierarchy - The Company uses a **three-level valuation hierarchy** for fair value measurements, based on the transparency of inputs[126](index=126&type=chunk) Financial Instrument | Financial Instrument | Carrying Value (June 30, 2025) | Estimated Fair Value (Level 2) (June 30, 2025) | | :------------------- | :----------------------------- | :--------------------------------------------- | | Mortgage notes payable, net | $1,594,765 | $1,522,268 | | Unsecured debt, net | $6,777,061 | $6,443,791 | | Total debt, net | $8,371,826 | $7,966,059 | - During the six months ended June 30, 2025, the Company paid **$3.5 million** to settle five forward starting swaps, with **$2.3 million** recognized as increased interest expense over the notes' term[129](index=129&type=chunk) [10. Earnings Per Share and Earnings Per Unit](index=40&type=section&id=10.%20Earnings%20Per%20Share%20and%20Earnings%20Per%20Unit) This note presents the calculation of basic and diluted EPS for EQR and EPU for ERPOP Metric | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net income available to Common Shares (EQR) | $448,237 | $470,924 | | Basic EPS (EQR) | $1.18 | $1.24 | | Diluted EPS (EQR) | $1.18 | $1.24 | | Net income available to Units (ERPOP) | $460,565 | $484,202 | | Basic EPU (ERPOP) | $1.18 | $1.24 | | Diluted EPU (ERPOP) | $1.18 | $1.24 | [11. Commitments and Contingencies](index=41&type=section&id=11.%20Commitments%20and%20Contingencies) This note outlines the Company's commitments for development projects and investments, and significant legal contingencies Projects Under Development | Projects Under Development | Projects | Apartment Units | Total Project Costs Remaining (in thousands) | | :------------------------- | :------- | :-------------- | :----------------------------------------- | | Consolidated | 1 | 440 | $63,546 | | Unconsolidated | 2 | 639 | $150,228 | | Total | 3 | 1,079 | $213,774 | - The Company has remaining commitments of approximately **$21.0 million** for real estate technology and other real estate fund investments[135](index=135&type=chunk) - Litigation accruals were approximately **$42.1 million** as of June 30, 2025, with the Company defending against antitrust and class action lawsuits[137](index=137&type=chunk)[138](index=138&type=chunk)[140](index=140&type=chunk) [12. Reportable Segments](index=43&type=section&id=12.%20Reportable%20Segments) This note describes the Company's reportable segments, categorized as 'Same store' and 'Non-same store' - The Company's chief operating decision maker evaluates performance geographically by market on a **same store basis** and in total on a **non-same store basis**[142](index=142&type=chunk) - Reportable segments are defined as **'Same store'** (stabilized properties) and **'Non-same store'** (acquired, lease-up, or major renovation properties)[146](index=146&type=chunk) Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Total NOI | $1,025,306 | $989,355 | | Same store NOI | $971,784 | $955,596 | | Non-same store NOI | $57,832 | $10,653 | | Total assets (June 30, 2025) | $21,027,514 | | | Capital expenditures (Six Months Ended June 30, 2025) | $144,368 | | [13. Subsequent Events](index=46&type=section&id=13.%20Subsequent%20Events) This note confirms that no material subsequent events have occurred since June 30, 2025 - There have been **no material subsequent events** occurring since June 30, 2025[156](index=156&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of financial condition and results of operations [Overview](index=47&type=section&id=Overview) This overview describes EQR's business model and ERPOP's operational role - **Equity Residential (EQR)** focuses on acquiring, developing, and managing residential properties in dynamic cities, with **ERP Operating Limited Partnership (ERPOP)** conducting the multifamily property business[159](index=159&type=chunk) - EQR is the general partner of ERPOP, holding approximately **97.0% ownership**, with all property ownership and business operations conducted through ERPOP[160](index=160&type=chunk) - The Company's business objectives and operating/investing strategies remain **unchanged** from the prior Annual Report on Form 10-K[163](index=163&type=chunk) [2025 Transactions](index=48&type=section&id=2025%20Transactions) This section summarizes the Company's property acquisition and disposition activities during 2025 Portfolio Activity | Portfolio Activity | Properties | Apartment Units | Purchase/Sales Price (in thousands) | | :----------------- | :--------- | :-------------- | :---------------------------------- | | Beginning Balance (12/31/2024) | 311 | 84,249 | | | Acquisitions: Consolidated Rental Properties | 8 | 2,064 | $533,843 | | Dispositions: Consolidated Rental Properties | (3) | (835) | $(346,600) | | Dispositions: Consolidated Land Parcels | — | — | $(4,300) | | Completed Developments – Consolidated | 2 | 495 | | | Completed Developments – Unconsolidated | 1 | 450 | | | Ending Balance (6/30/2025) | 319 | 86,422 | | - Acquired **8 consolidated rental properties** in Atlanta for **$533.8 million** at a **5.1% acquisition cap rate**[166](index=166&type=chunk) - Disposed of **3 consolidated rental properties** and one consolidated land parcel, receiving net proceeds of **$343.1 million**[168](index=168&type=chunk) [Comparison of Financial Results](index=50&type=section&id=Comparison%20of%20the%20six%20months%20and%20quarter%20ended%20June%2030%2C%202025%20to%20the%20six%20months%20and%20quarter%20ended%20June%2030%2C%202024) This section compares the Company's financial results for periods ended June 30, 2025 Metric | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net income | $463,583 | $488,587 | $(25,004) | (5.1)% | | Total NOI | $1,025,306 | $989,355 | $35,951 | 3.6% | | Rental income | $1,529,637 | $1,464,981 | $64,656 | 4.4% | | Total operating expenses | $504,331 | $475,626 | $28,705 | 6.0% | | Same store NOI | $971,784 | $955,596 | $16,188 | 1.7% | | Non-same store/other NOI | $53,522 | $33,759 | $19,763 | 58.5% | - Diluted EPS/EPU decreased by **$0.06** for the six months ended June 30, 2025, primarily due to higher depreciation and lower net gain on property sales[170](index=170&type=chunk) - Interest expense increased by **$14.4 million (10.8%)** due to higher debt balances and rates, while loss from unconsolidated entities increased by **$8.0 million (238.3%)** due to development property losses[172](index=172&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [Same Store Results](index=53&type=section&id=Same%20Store%20Results) This section analyzes the performance of the Company's same store residential operations - Same store residential operations, representing **75,072 apartment units**, performed well due to good demand, modest supply, a constructive job market, and high wage growth[184](index=184&type=chunk)[187](index=187&type=chunk) Market/Metro Area | Market/Metro Area | Average Rental Rate Change (YoY) | Average Physical Occupancy Change (YoY) | Turnover Change (YoY) | | :---------------- | :------------------------------- | :-------------------------------------- | :-------------------- | | Los Angeles | 1.2% | 0.1% | (1.5%) | | San Francisco | 3.1% | 0.7% | (2.7%) | | Washington, D.C. | 4.4% | 0.0% | (0.6%) | | New York | 3.2% | 0.6% | (0.2%) | | Seattle | 3.2% | 0.2% | (1.0%) | | Denver | (2.6%) | (0.8%) | (0.4%) | | Other Expansion Markets | (4.2%) | (0.1%) | (5.2%) | | Total | 2.5% | 0.2% | (1.3%) | - **Washington, D.C., New York, and San Francisco** were the best-performing markets with strong occupancy, healthy pricing, and low turnover, while Expansion Markets faced challenges due to elevated new supply[187](index=187&type=chunk)[188](index=188&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's liquidity, capital resources, cash flow activities, and debt structure - The Company has approximately **$1.7 billion** in readily available liquidity, a strong balance sheet, and well-staggered debt maturities[191](index=191&type=chunk) Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $785,070 | $817,968 | | Investing activities | $(518,995) | $(2,357) | | Financing activities | $(294,287) | $(817,185) | - Key financing activities included repaying **$37.9 million** in mortgage loans and **$450.0 million** in unsecured notes, receiving **$238.5 million** net from commercial paper, and issuing **$500.0 million** in new unsecured notes[200](index=200&type=chunk) - The Company declared a quarterly dividend/distribution of **$0.6925 per share/unit** for Q1 and Q2 2025, an annualized increase of **2.6%** over 2024[202](index=202&type=chunk) Debt Summary as of June 30, 2025 (in thousands) | Debt Summary as of June 30, 2025 (in thousands) | Balances | % of Total | | :---------------------------------------------- | :------- | :--------- | | Secured Debt | $1,594,765 | 19.0% | | Unsecured Debt | $6,777,061 | 81.0% | | Total Debt | $8,371,826 | 100.0% | | Fixed Rate Debt | $7,397,342 | 88.3% | | Floating Rate Debt | $974,484 | 11.7% | [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms critical accounting policies and estimates remain materially unchanged from the prior annual report - The Company's critical accounting policies and estimates have **not changed materially** from those reported in the Annual Report on Form 10-K for the year ended December 31, 2024[208](index=208&type=chunk) [Funds From Operations and Normalized Funds From Operations](index=59&type=section&id=Funds%20From%20Operations%20and%20Normalized%20Funds%20From%20Operations) This section provides a reconciliation and explanation of FFO and Normalized FFO Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net income available to Common Shares and Units / Units | $460,565 | $484,202 | | FFO available to Common Shares and Units / Units | $751,568 | $704,767 | | Normalized FFO available to Common Shares and Units / Units | $759,308 | $745,038 | - **FFO and Normalized FFO** are supplemental measures of operating performance, excluding gains/losses from sales and impairment of depreciable real estate, and depreciation/amortization related to real estate[218](index=218&type=chunk) - Normalized FFO further excludes non-operating real estate asset impairment, pursuit cost write-offs, debt extinguishment gains/losses, and non-operating asset gains/losses[211](index=211&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company's and Operating Partnership's market risk profile is unchanged from the prior 10-K - The Company's and Operating Partnership's market risk has **not changed materially** from the information reported in their Annual Report on Form 10-K for the year ended December 31, 2024[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Both EQR and ERPOP concluded their disclosure controls were effective, with no material changes to internal control - Equity Residential's CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2025[215](index=215&type=chunk) - ERP Operating Limited Partnership's management also concluded that its disclosure controls and procedures were **effective** as of June 30, 2025[217](index=217&type=chunk) - **No material changes** to internal control over financial reporting were identified for either entity during the second quarter of 2025[216](index=216&type=chunk)[219](index=219&type=chunk) [PART II. OTHER INFORMATION](index=63&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other important information, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) No changes to legal proceedings, and no pending litigation is expected to materially affect financial condition - **No changes** to legal proceedings discussed in the Annual Report on Form 10-K[220](index=220&type=chunk) - As of June 30, 2025, no pending or threatened litigation is expected to have a **material adverse effect** on the Company's financial condition[220](index=220&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously discussed in the Company's Annual Report on Form 10-K - **No material changes** to risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, EQR issued 117,000 Common Shares for OP Units, registered or exempt - During the quarter ended June 30, 2025, EQR issued **117,000 Common Shares** in exchange for **117,000 OP Units** held by limited partners of ERPOP[222](index=222&type=chunk) - These shares were either registered under the Securities Act of 1933 or issued in reliance on an **exemption from registration** under Section 4(a)(2) of the Securities Act[222](index=222&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - **None**[223](index=223&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - **Not applicable**[224](index=224&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) No trustee or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No trustee or officer adopted or terminated a **"Rule 10b5-1 trading arrangement"** or **"non-Rule 10b5-1 trading arrangement"** during the quarter ended June 30, 2025[225](index=225&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of this report, including forms of notes, agreements, and certifications - The exhibit index lists various documents filed as part of the report, including forms of notes, distribution agreements, and certifications[229](index=229&type=chunk) [Signatures](index=65&type=section&id=SIGNATURES) This section contains the official signatures for the report from EQR and ERPOP [Signatures](index=65&type=section&id=Signatures) The report was signed on August 6, 2025, by Robert A. Garechana and Ian S. Kaufman for EQR and ERPOP - The report was signed on **August 6, 2025**, by **Robert A. Garechana (EVP and CFO)** and **Ian S. Kaufman (SVP and Chief Accounting Officer)** for both Equity Residential and ERP Operating Limited Partnership[233](index=233&type=chunk)

Core Insights - Equity Residential reported Q2 2025 earnings with GAAP EPS of $0.50, exceeding analyst expectations of $0.34 by $0.16, primarily due to property sale gains [1][5] - Revenue reached $768.8 million, a 4.7% increase from the previous year, but slightly below consensus estimates [1][5] - Funds from operations (FFO) per share increased to $0.98, with normalized FFO at $0.99 per share [1][5] Financial Performance - Q2 2025 GAAP EPS was $0.50, up 6.4% from $0.47 in Q2 2024 [2] - Normalized FFO per share rose 2.1% from $0.97 in Q2 2024 to $0.99 in Q2 2025 [2] - FFO per share increased 4.3% from $0.94 in Q2 2024 to $0.98 in Q2 2025 [2] - Revenue for Q2 2024 was $734.2 million, indicating a year-over-year growth of 4.9% [5] Operational Highlights - Weighted average occupancy rate reached 96.6% in the same-store portfolio, exceeding internal projections [6] - Same-store revenue increased by 2.7%, while expense growth was 3.7%, leading to a net operating income (NOI) growth of 2.3% [6] - Leasing trends showed a blended lease rate increase of 3.0%, driven by a 5.2% growth in renewal rates [9] Geographic Performance - San Francisco reported a revenue growth of 4.5% with occupancy exceeding 97% [7] - New York also experienced strong revenue and occupancy improvements [7] - Expansion markets like Denver faced declines in revenue and occupancy due to new housing supply [7] Strategic Initiatives - The company acquired eight apartment properties in suburban Atlanta for $533.8 million and sold one Seattle property for $121.0 million [8] - Management adjusted guidance to reflect a net-neutral capital allocation approach for FY2025, balancing $1.0 billion in acquisitions with $1.0 billion in sales [8] - The company continues to invest in technology to enhance operational efficiency and streamline the resident experience [12] Outlook and Guidance - Management raised full-year 2025 guidance for EPS, FFO per share, and normalized FFO per share, with FFO per share now expected to range from $4.03 to $4.09 [15] - Same-store NOI growth is expected between 2.2% and 2.8%, with physical occupancy forecasted to be 96.4% [15] - Expense guidance was slightly lowered, with the range revised to 3.5% to 4.0% [16]

Core Insights - Equity Residential (EQR) reported second-quarter 2025 normalized funds from operations (FFO) per share of 99 cents, matching the Zacks Consensus Estimate and reflecting a 2.1% year-over-year improvement [1][10] - The company raised its guidance for 2025 normalized FFO per share, indicating strong rental demand and operational performance [10][11] Financial Performance - Rental income for the quarter was $768.8 million, slightly below the consensus estimate of $769.3 million, but up 4.7% year over year [2] - Same-store revenues increased by 2.7% year over year, surpassing the estimate of 1.8%, while same-store expenses rose by 3.7% [3] - Same-store net operating income (NOI) grew by 2.3% year over year, exceeding the estimate of 1.8% [3] - The average rental rate increased by 2.6% year over year to $3,187, with physical occupancy improving by 20 basis points to 96.6% [4] Portfolio Activity - In Q2 2025, EQR sold a property in Seattle for $121 million and acquired a portfolio of eight properties in suburban Atlanta for approximately $533.8 million [6] - The company completed a joint venture development project in New York with 450 apartment units for around $201.2 million, and two wholly owned projects in San Francisco and Denver totaling 495 units for nearly $237.8 million [7] Balance Sheet - EQR ended Q2 2025 with cash and cash equivalents of $31.3 million, down from $39.8 million at the end of Q1 2025 [8] - The net debt to normalized EBITDAre ratio increased to 4.45X from 4.21X in the previous quarter [8] Future Guidance - For Q3 2025, EQR projects normalized FFO per share between 99 cents and $1.03, with the full-year guidance raised to $3.97-$4.03 from $3.90-$4.00 [10] - The full-year guidance includes projections for same-store revenue growth of 2.6-3.2%, expense increases of 3.5-4.0%, and NOI expansion of 2.2-2.8% [11]

Financial Data and Key Metrics Changes - The average household income of residents who moved in during the second quarter increased by 8.5% year-over-year, while rent as a percentage of income remains low at 20% [12] - The blended rate growth was 3%, driven by a strong renewal rate of 5.2%, with 60% of residents renewing their leases [13] - Physical occupancy was reported at 96.6%, although new lease rates were slightly negative due to price sensitivity and continued use of concessions in several markets [14] Business Line Data and Key Metrics Changes - The company experienced strong revenue results in urban markets like New York City and Downtown San Francisco, where supply has declined significantly [7] - The acquisition of an eight-property portfolio in Atlanta was completed, expanding the company's presence in a market expected to see quicker supply declines [9] - The company lowered its acquisition expectations for the year from $1.5 billion to $1 billion, reflecting a competitive transaction market [10] Market Data and Key Metrics Changes - The unemployment rate for the college-educated demographic is at 2.7%, contributing to high resident retention rates [6] - New York continues to show high occupancy and minimal competitive supply, leading to strong blended rate growth [15] - The Washington DC market has seen strong performance but is experiencing a slowdown due to job market uncertainties [16][17] Company Strategy and Development Direction - The company aims to maintain a balanced portfolio of urban and suburban assets to capture changing renter demographics [8] - The focus remains on occupancy and renewal rates, with a strategy to prioritize these over new lease growth in uncertain economic conditions [7] - The company is optimistic about future revenue growth due to declining apartment supply and societal trends favoring renting [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business setup for 2026, expecting normal embedded growth and strong renewal performance against less competitive supply [25] - The company anticipates blended rates to moderate in the third quarter, with expected growth between 2.2% and 2.8% [25] - Management noted that the transaction market is competitive, with cap rates for desirable assets often in the high 4% range, which is lower than the cost of debt [10] Other Important Information - The company is implementing AI technology to improve operational efficiency and customer experience, with pilots showing a reduction in application completion time by over 50% [24] - The company is focused on maintaining strong occupancy and retention rates, with record low resident turnover levels [25] Q&A Session Summary Question: Supply picture and job market impact on growth - Management indicated that reduced competitive supply will likely offset a slowing job market, enhancing pricing power for 2026 [33][34] Question: Portfolio mix and expansion markets - Management confirmed that the portfolio is well-positioned for the next year and a half, with a balanced approach between established and expansion markets [36][38] Question: Concessions usage and future setup - Concessions were used more than expected in the second quarter, but management anticipates a positive setup for next spring due to strong retention [44][47] Question: Differentiation between DC and Northern Virginia - Management noted that while DC is experiencing some softness, Northern Virginia is facing isolated pressures, but demand has rebounded with rate adjustments [48][49] Question: Pricing power and market dynamics - Management stated that improved consumer confidence and job growth are necessary for pricing power, with expectations for easier comps in the second half of the year [85] Question: Impact of algorithmic pricing ban in San Francisco - Management confirmed compliance with regulations and emphasized that supply and demand dynamics are the primary drivers of rent fluctuations, not algorithmic pricing [88][90] Question: Capital allocation strategy - Management remains disciplined in acquisitions, focusing on opportunities that align with their balanced portfolio strategy, while also considering buybacks funded by asset sales [100][102]

Financial Data and Key Metrics Changes - The average household income of residents moving in during Q2 increased by 8.5% year-over-year, while rent as a percentage of income remains low at 20% [11] - The blended rate growth was 3%, driven by a strong renewal rate of 5.2% with 60% of residents renewing [12] - Physical occupancy was reported at 96.6%, with new lease rates slightly negative due to price sensitivity and continued concession use in several markets [12] Business Line Data and Key Metrics Changes - The company experienced strong revenue results in urban markets like New York City and Downtown San Francisco, where supply has declined significantly [6] - The acquisition of an eight-property portfolio in Atlanta was completed, expanding the company's presence in a market expected to see quicker supply declines [8] - The company lowered its acquisition expectations for the year from $1.5 billion to $1 billion, reflecting a competitive transaction market [9] Market Data and Key Metrics Changes - New York continues to show high occupancy and minimal competitive supply, leading to strong blended rate growth [13] - Washington DC has seen high occupancy and good retention, but recent job market uncertainties have led to a slight slowdown [14] - San Francisco reported the best blended rate growth in the portfolio at 5.8%, driven by strong demand and favorable migration patterns [17] Company Strategy and Development Direction - The company aims to maintain a balanced portfolio of urban and suburban assets to capture changing renter demographics [7] - The focus remains on higher-earning renters, with a strategy to prioritize occupancy and renewal rates over new lease growth in uncertain environments [6] - The company is optimistic about future revenue growth due to declining apartment supply and societal trends favoring renting [6] Management's Comments on Operating Environment and Future Outlook - Management noted that the overall unemployment rate is 4.2%, with a lower rate of 2.7% for college-educated individuals, supporting demand for rentals [5] - The company expects blended rates to moderate in the third quarter, with continued strong retention and occupancy [25] - For 2026, management anticipates normal embedded growth and strong renewal performance against a backdrop of reduced competitive supply [25] Other Important Information - The company is implementing AI technology to improve operational efficiency and customer experience, with full deployment expected by the end of the year [23][24] - The company is also focusing on maintaining occupancy in markets like DC and LA, with expectations of increased concession use in certain submarkets [61] Q&A Session Summary Question: What are the growth prospects considering supply and job market conditions? - Management highlighted that reduced competitive supply will enhance pricing power, even with a slowing job market [34][35] Question: How does the company view its portfolio mix between expansion and established markets? - The company remains committed to a balanced portfolio, with a focus on higher-earning customers and a cautious approach to expansion markets [36][39] Question: Can you elaborate on concession use this leasing season? - Concession use was higher than expected, averaging about seven days per move-in, but management anticipates a reduction as markets stabilize [44][46] Question: What are the expectations for the DC and LA markets in the second half of the year? - Management plans to maintain occupancy in DC while expecting continued concession use in LA, particularly in certain submarkets [60][62] Question: How does the company view pricing power and market dynamics? - Management indicated that improved consumer confidence and job growth are necessary for pricing power, with expectations of easier comps in the second half of the year [87][88] Question: What is the impact of AI on demand and job creation? - The company sees potential benefits from AI in tech hubs like San Francisco, but the overall impact on entry-level jobs remains uncertain [99][100] Question: How does the company prioritize capital allocation? - The company is focused on acquisitions if priced correctly, while also considering buybacks funded by asset sales, and maintaining a small development platform [102][106]

Group 1 - Equity Residential (NYSE: EQR) has underperformed over the past year, with a loss of 11% in stock value due to rising concerns about rental inflation [1] - The stock market has shown recovery from previous losses, indicating a potential shift in investor sentiment [1] - The article emphasizes a contrarian investment approach based on macroeconomic views and specific stock turnaround stories to achieve favorable risk/reward profiles [1]

Core Viewpoint - Equity Residential (EQR) reported quarterly funds from operations (FFO) of $0.99 per share, matching the Zacks Consensus Estimate and showing an increase from $0.97 per share a year ago [1] - The company’s revenues for the quarter ended June 2025 were $768.83 million, slightly missing the Zacks Consensus Estimate by 0.06%, but up from $734.16 million year-over-year [2] Group 1: Financial Performance - The FFO of $0.99 per share is consistent with the previous quarter's expectations, where the company had a surprise of +2.15% by reporting $0.95 instead of the expected $0.93 [1] - Over the last four quarters, Equity Residential has exceeded consensus FFO estimates only once [1] - The company has surpassed consensus revenue estimates two times in the last four quarters [2] Group 2: Market Performance - Equity Residential shares have declined approximately 12.6% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] - The outlook for the stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Group 3: Future Expectations - The current consensus FFO estimate for the upcoming quarter is $1.00, with projected revenues of $777.83 million, and for the current fiscal year, the estimate is $3.97 on $3.09 billion in revenues [7] - The estimate revisions trend for Equity Residential was favorable prior to the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 4: Industry Context - The REIT and Equity Trust - Residential industry is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

[Earnings Release](index=4&type=section&id=Earnings%20Release) [Second Quarter 2025 Results & Highlights](index=4&type=section&id=Second%20Quarter%202025%20Results%20%26%20Highlights) Equity Residential reported strong Q2 2025 results, with diluted EPS of $0.50 and Normalized FFO per share of $0.99, raising full-year guidance | | Quarter Ended June 30, | | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | | | | **Earnings Per Share (EPS)** | $0.50 | $0.47 | $0.03 | 6.4% | | **Funds from Operations (FFO) per share** | $0.98 | $0.94 | $0.04 | 4.3% | | **Normalized FFO (NFFO) per share** | $0.99 | $0.97 | $0.02 | 2.1% | | | **Six Months Ended June 30,** | | | | | | **2025** | **2024** | | | | **Earnings Per Share (EPS)** | $1.18 | $1.24 | $(0.06) | (4.8%) | | **Funds from Operations (FFO) per share** | $1.92 | $1.80 | $0.12 | 6.7% | | **Normalized FFO (NFFO) per share** | $1.94 | $1.91 | $0.03 | 1.6% | - CEO Mark J. Parrell highlighted sustained demand and a financially resilient customer base, with the company's unique exposure to low-supply urban centers like New York and San Francisco driving current results[10](index=10&type=chunk) - For Q2 2025 vs. Q2 2024, same-store revenues increased **2.7%**, expenses increased **3.7%**, and Net Operating Income (NOI) increased **2.3%**[11](index=11&type=chunk) - During Q2 2025, the company acquired a portfolio of eight properties (2,064 units) in suburban Atlanta for approximately **$533.8 million** and sold one property in Seattle for **$121.0 million**[11](index=11&type=chunk) [Full Year 2025 Guidance](index=5&type=section&id=Full%20Year%202025%20Guidance) Full-year 2025 guidance was updated, raising same-store revenue and NOI midpoints, increasing Normalized FFO per share, and lowering EPS | | Revised | Previous | Change at Midpoint | | :--- | :--- | :--- | :--- | | **Same Store Revenue change** | 2.6% to 3.2% | 2.25% to 3.25% | 0.15% | | **Same Store Expense change** | 3.5% to 4.0% | 3.5% to 4.5% | (0.25%) | | **Same Store NOI change** | 2.2% to 2.8% | 1.4% to 3.0% | 0.3% | | **EPS** | $2.96 to $3.02 | $3.00 to $3.10 | $(0.06) | | **FFO per share** | $4.03 to $4.09 | $3.87 to $3.97 | $0.14 | | **Normalized FFO per share** | $3.97 to $4.03 | $3.90 to $4.00 | $0.05 | Factors Contributing to $0.05 Increase in Normalized FFO per Share Midpoint | Factor | Expected Positive/(Negative) Impact (dollars) | | :--- | :--- | | Residential same store NOI | $0.02 | | Lease-Up NOI | $0.01 | | 2025 and 2024 transaction activity impact on NOI, net | $(0.02) | | Interest expense, net | $0.03 | | Other items | $0.01 | | **Net** | **$0.05** | [Investment and Capital Markets Activity](index=7&type=section&id=Investment%20and%20Capital%20Markets%20Activity) Q2 2025 saw significant transaction activity, including a $533.8 million Atlanta acquisition and $500.0 million unsecured note issuance - Acquired a portfolio of eight properties (2,064 units) in Atlanta for approximately **$533.8 million** at a weighted average Acquisition Cap Rate of **5.1%**[22](index=22&type=chunk) - Sold one property (289 units) in Seattle for approximately **$121.0 million** at a Disposition Yield of **4.9%**[23](index=23&type=chunk) - Completed two wholly-owned development projects in San Francisco and Denver (495 units total) and one joint venture project in New York (450 units)[24](index=24&type=chunk) - Issued **$500.0 million** of 7-year unsecured notes at a **4.95%** coupon, using proceeds to pay off **$450.0 million** of **3.375%** notes that matured in June 2025[25](index=25&type=chunk) [Third Quarter 2025 Guidance](index=7&type=section&id=Third%20Quarter%202025%20Guidance) Q3 2025 guidance projects Normalized FFO per share between $0.99 and $1.03, driven by same-store NOI growth and transaction impacts | | Q3 2025 Guidance | | :--- | :--- | | **EPS** | $0.78 to $0.82 | | **FFO per share** | $1.08 to $1.12 | | **Normalized FFO per share** | $0.99 to $1.03 | Factors Contributing to $0.02 Increase in NFFO per Share from Q2 2025 Actuals to Q3 2025 Guidance Midpoint | Factor | Expected Positive/(Negative) Impact (dollars) | | :--- | :--- | | Residential same store NOI | $0.01 | | 2025 and 2024 transaction activity impact on NOI, net | $0.01 | | Interest expense, net | $(0.01) | | Corporate overhead | $0.01 | | **Net** | **$0.02** | [Financial Statements](index=9&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues increased to $768.8 million, with net income available to common shares rising to $192.0 million ($0.50 per diluted share) | (In thousands) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :--- | :--- | :--- | | **Rental income** | $768,827 | $734,163 | | **Total expenses** | $542,812 | $508,609 | | **Net gain on sales of real estate** | $58,280 | $39,809 | | **Net income** | $198,785 | $183,555 | | **Net income available to Common Shares** | $192,001 | $177,128 | | **Earnings per share – diluted** | $0.50 | $0.47 | [Consolidated Statements of FFO and NFFO](index=10&type=section&id=Consolidated%20Statements%20of%20FFO%20and%20NFFO) Q2 2025 FFO increased to $382.6 million ($0.98 per share), and NFFO rose to $386.8 million ($0.99 per share), with detailed reconciliations provided | (In thousands except per share data) | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :--- | :--- | :--- | | **Net income** | $198,785 | $183,555 | | **FFO available to Common Shares and Units** | $382,633 | $366,348 | | **FFO per share – diluted** | $0.98 | $0.94 | | **Normalized FFO available to Common Shares and Units** | $386,790 | $380,142 | | **Normalized FFO per share – diluted** | $0.99 | $0.97 | [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $21.0 billion, with $9.5 billion in liabilities and $11.2 billion in total equity | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Investment in real estate, net** | $19,760,201 | $19,558,328 | | **Total assets** | $21,027,514 | $20,834,176 | | **Total liabilities** | $9,501,134 | $9,249,829 | | **Total equity** | $11,208,475 | $11,245,784 | | **Total liabilities and equity** | $21,027,514 | $20,834,176 | [Portfolio and Operations](index=12&type=section&id=Portfolio%20and%20Operations) [Portfolio Summary & Rollforward](index=12&type=section&id=Portfolio%20Summary%20%26%20Rollforward) As of June 30, 2025, the portfolio included 319 properties and 86,422 units, with established markets contributing 89% of stabilized NOI - The total portfolio consists of **319 properties** with **86,422 apartment units**. Established Markets account for **89.0%** of stabilized budgeted NOI, while Expansion Markets account for **11.0%**[40](index=40&type=chunk) | Market | Properties | Apartment Units | % of Stabilized Budgeted NOI | Average Rental Rate | | :--- | :--- | :--- | :--- | :--- | | **Southern California** | 80 | 20,660 | 24.2% | $3,006 | | **San Francisco** | 41 | 11,540 | 15.0% | $3,451 | | **Washington, D.C.** | 43 | 13,845 | 14.9% | $2,842 | | **New York** | 35 | 8,986 | 14.4% | $4,730 | | **Boston** | 27 | 7,237 | 11.1% | $3,659 | | **Seattle** | 40 | 8,459 | 9.4% | $2,676 | | **Expansion Markets** | 53 | 15,695 | 11.0% | $2,064 | Q2 2025 Portfolio Rollforward | | Properties | Apartment Units | | :--- | :--- | :--- | | **3/31/2025** | 312 | 84,648 | | **Acquisitions** | 8 | 2,064 | | **Dispositions** | (1) | (289) | | **6/30/2025** | 319 | 86,422 | [Same Store Results](index=14&type=section&id=Same%20Store%20Results) Q2 2025 same-store NOI grew 2.3% year-over-year, driven by revenue increases and improved occupancy, with varied market performance [Overall Same Store Performance](index=14&type=section&id=Overall%20Same%20Store%20Performance) Overall same-store performance showed Q2 2025 revenues up 2.7% and NOI up 2.3% year-over-year, with occupancy at 96.6% Same Store Results (Q2 2025 vs. Q2 2024) | Metric | % Change | | :--- | :--- | | Revenues | 2.7% | | Expenses | 3.7% | | NOI | 2.3% | | Physical Occupancy | 96.6% vs. 96.3% | Same Store Results (Q2 2025 vs. Q1 2025) | Metric | % Change | | :--- | :--- | | Revenues | 1.0% | | Expenses | (2.7%) | | NOI | 2.8% | | Physical Occupancy | 96.5% vs. 96.4% | - Same-store residential bad debt, net of governmental assistance, was **1.0%** of revenues in Q2 2025, an improvement from **1.1%** in Q2 2024[61](index=61&type=chunk) [Same Store Residential Results by Market](index=17&type=section&id=Same%20Store%20Residential%20Results%20by%20Market) Q2 2025 same-store residential NOI growth was strong in Washington, D.C., New York, and San Francisco, with a total blended lease rate growth of 3.0% Same Store Residential NOI Growth by Market (Q2 2025 vs. Q2 2024) | Markets/Metro Areas | Revenue Growth | Expense Growth | NOI Growth | | :--- | :--- | :--- | :--- | | Washington, D.C. | 4.5% | 1.9% | 5.7% | | New York | 4.3% | 3.4% | 4.9% | | San Francisco | 4.5% | 6.0% | 3.9% | | Seattle | 3.1% | 2.0% | 3.5% | | Southern California | 1.6% | 5.0% | 0.4% | | Denver | (3.8%) | (0.8%) | (5.0%) | | **Total** | **2.9%** | **3.7%** | **2.5%** | Same Store Residential Net Effective Lease Pricing Statistics | | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | New Lease Change | (0.1%) | (2.2%) | 0.1% | | Renewal Rate Achieved | 5.2% | 4.9% | 5.0% | | Blended Rate | 3.0% | 1.8% | 2.9% | [Same Store Operating Expenses](index=21&type=section&id=Same%20Store%20Operating%20Expenses) Total same-store operating expenses increased 3.7% in Q2 2025, primarily driven by higher utilities, repairs and maintenance, and other on-site costs Total Same Store Operating Expenses Breakdown (Q2 2025 vs. Q2 2024) | Expense Category | $ Change (thousands) | % Change | % of Q2 2025 Expenses | | :--- | :--- | :--- | :--- | | Real estate taxes | $1,600 | 1.7% | 41.0% | | On-site payroll | $975 | 2.3% | 18.7% | | Utilities | $2,633 | 8.3% | 15.0% | | Repairs and maintenance | $1,761 | 5.7% | 14.2% | | Insurance | $68 | 0.7% | 4.0% | | **Total** | **$8,116** | **3.7%** | **100.0%** | - The increase in utilities was driven by higher commodity prices and usage, while repairs and maintenance costs rose due to the implementation of resident technology initiatives like bulk Wi-Fi[79](index=79&type=chunk) [Debt and Capital](index=22&type=section&id=Debt%20and%20Capital) [Debt Summary & Covenants](index=22&type=section&id=Debt%20Summary%20%26%20Covenants) As of June 30, 2025, total debt was $8.37 billion with an average rate of 3.74%, and the company remained compliant with all debt covenants | Debt Type | Balance (thousands) | % of Total | Weighted Average Rate | Weighted Average Maturities (years) | | :--- | :--- | :--- | :--- | :--- | | Secured | $1,594,765 | 19.0% | 3.77% | 6.4 | | Unsecured | $6,777,061 | 81.0% | 3.73% | 7.1 | | **Total** | **$8,371,826** | **100.0%** | **3.74%** | **7.0** | | Selected Credit Ratios | June 30, 2025 | | :--- | :--- | | Total debt to Normalized EBITDAre | 4.49x | | Net debt to Normalized EBITDAre | 4.45x | | Unencumbered NOI as a % of total NOI | 90.4% | - The company is in compliance with its most restrictive financial covenants, including Debt to Adjusted Total Assets at **28.0%** (vs. a limit of 60%) and Total Unencumbered Assets to Unsecured Debt at **464.8%** (vs. a requirement of at least 125%)[91](index=91&type=chunk) [Capital Structure](index=25&type=section&id=Capital%20Structure) As of June 30, 2025, total market capitalization was $34.8 billion, comprising $8.4 billion in debt and $26.4 billion in equity | Capital Component | Value (thousands) | % of Total Market Cap | | :--- | :--- | :--- | | Total Debt | $8,371,826 | 24.0% | | Total Equity | $26,445,342 | 76.0% | | **Total Market Capitalization** | **$34,817,168** | **100.0%** | [Common Share and Unit Weighted Average Amounts Outstanding](index=26&type=section&id=Common%20Share%20and%20Unit%20Weighted%20Average%20Amounts%20Outstanding) The weighted average diluted common shares and units outstanding for Q2 2025 was 391.5 million, used for FFO and NFFO calculations | | Q2 2025 | | :--- | :--- | | **Weighted Average Common Shares - basic** | 379,507,960 | | **Total Common Shares and Units - diluted (for FFO)** | 391,497,694 | [Other Disclosures](index=27&type=section&id=Other%20Disclosures) [Development and Lease-Up Projects](index=28&type=section&id=Development%20and%20Lease-Up%20Projects) The total development pipeline includes 3,286 apartment units with a budgeted capital cost of $1.32 billion, contributing to future growth | Project Status | No. of Apartment Units | Total Budgeted Capital Cost (thousands) | | :--- | :--- | :--- | | **Consolidated** | 935 | $469,999 | | **Unconsolidated** | 2,351 | $846,407 | | **Total Development Projects** | **3,286** | **$1,316,406** | - The total development pipeline contributed **$8.2 million** in NOI during the first six months of 2025, primarily from projects that have completed construction but are not yet stabilized[104](index=104&type=chunk) [Residential Capital Expenditures](index=29&type=section&id=Residential%20Capital%20Expenditures) Total consolidated residential capital expenditures for H1 2025 were $138.4 million, including recurring and NOI-enhancing investments For the Six Months Ended June 30, 2025 (Total Consolidated Properties) | Expenditure Type | Amount (thousands) | | :--- | :--- | | Recurring Capital Expenditures | $81,855 | | NOI-Enhancing Expenditures | $56,588 | | **Total Capital Expenditures** | **$138,443** | - Renovation expenditures on **1,355** same-store apartment units during the first half of 2025 averaged approximately **$30,000 per unit**[108](index=108&type=chunk) [Reconciliations and Definitions](index=30&type=section&id=Reconciliations%20and%20Definitions) This section provides detailed reconciliations for non-GAAP financial measures and definitions for key industry and company-specific terms - Provides a reconciliation of Net Income to Normalized EBITDAre, showing a trailing twelve-month Normalized EBITDAre of **$1.86 billion** as of June 30, 2025[113](index=113&type=chunk) - Details the specific adjustments made to reconcile FFO to Normalized FFO, such as excluding pursuit cost write-offs and non-operating asset gains/losses[116](index=116&type=chunk) - Includes a reconciliation of reported and expected EPS to FFO and Normalized FFO per share, clarifying the impact of depreciation and gains on sales[155](index=155&type=chunk) - Offers definitions for key performance indicators and non-GAAP measures, including FFO, NOI, EBITDAre, Same Store Results, and various leasing metrics, to provide context for the report's data[126](index=126&type=chunk)[146](index=146&type=chunk)[157](index=157&type=chunk)