Investment Ratings - Cold Storage REITs: Lineage Inc. (LINE, Buy) [5] - Industrial REITs: Prologis Inc. (PLD, Neutral) [16] - Industrial REITs: Terreno Realty Corp (TRNO, Buy) [31] - Self Storage REITs: Extra Space Storage Inc. (EXR, Buy) [44] - Self Storage REITs: Public Storage Inc. (PSA, Buy) [54] - Retail REITs: Brixmor Property Group (BRX, Buy) [63] - Retail REITs: Phillips Edison & Co (PECO, Buy) [74] Core Insights - The report highlights a mixed outlook across various REIT sectors, with some companies like LINE, TRNO, EXR, PSA, BRX, and PECO receiving "Buy" ratings, while PLD is rated "Neutral" [5][16][31][44][54][63][74] - Economic occupancy for LINE decreased by 290 basis points sequentially and 260 basis points year-over-year in Q1 2025, indicating potential challenges in maintaining occupancy levels [5] - Prologis Inc. is focusing on the implications of tariff policies on global supply chains, which may disrupt tenant activities and leasing demand [16] - Terreno Realty Corp is observing a shift in leasing dynamics post-tariff announcements, with domestic customers becoming more active compared to those operating across borders [31] - Extra Space Storage Inc. is prioritizing occupancy over rent in the current environment, reflecting a strategic shift in response to market conditions [44] - Public Storage Inc. is experiencing a significant impact from regional events, such as fires in Los Angeles, which account for 15% of its NOI [54] - Brixmor Property Group is seeing a steady increase in billed occupancy, which has risen by an average of 100 basis points over the last four years [63] Summary by Sections Cold Storage REITs - Lineage Inc. (LINE) reported a decline in economic occupancy and revenue per occupied pallet, with management expressing confidence in maintaining AFFO/share and EBITDA guidance for 2025 [5][6][7] Industrial REITs - Prologis Inc. (PLD) is navigating the complexities of global supply chains and tariff impacts, with expectations for occupancy and rent growth improvements in the second half of 2025 [16][20] - Terreno Realty Corp (TRNO) is adapting to changes in leasing activity and tenant retention amid tariff uncertainties, focusing on domestic customer engagement [31][36] Self Storage REITs - Extra Space Storage Inc. (EXR) is adjusting its strategy to prioritize occupancy over rent, with a focus on counter-cyclical demand drivers [44][46] - Public Storage Inc. (PSA) is managing its rent versus occupancy strategy while facing challenges from regional disruptions [54][56] Retail REITs - Brixmor Property Group (BRX) is experiencing a positive trend in occupancy and leasing spreads, with a focus on tenant credit and market dynamics [63][66] - Phillips Edison & Co (PECO) is observing volatility in the market due to tariff updates, impacting leasing velocity and transaction activity [74]

[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 ...

[Earnings Release](index=4&type=section&id=Earnings%20Release) This section provides an overview of Equity Residential's first quarter 2025 financial results, operational highlights, investment activities, and future guidance, along with company information and forward-looking statements [First Quarter 2025 Results Overview](index=4&type=section&id=First%20Quarter%202025%20Results%20Overview) Equity Residential reported strong first-quarter 2025 results, exceeding guidance expectations. While EPS decreased, FFO and Normalized FFO per share saw positive growth compared to Q1 2024, driven by robust revenue growth in key markets and record-low resident turnover Key Financial Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :----------------------- | :------ | :------ | :------- | :------- | | Earnings Per Share (EPS) | $0.67 | $0.77 | $(0.10) | (13.0%) | | Funds from Operations (FFO) per share | $0.94 | $0.87 | $0.07 | 8.0% | | Normalized FFO (NFFO) per share | $0.95 | $0.93 | $0.02 | 2.2% | - The decrease in EPS is primarily due to lower property sale gains and higher depreciation expense. FFO and NFFO per share increases are attributed to various adjustment items and strong operating performance[10](index=10&type=chunk) - First quarter revenue growth exceeded expectations, driven by strong performance in New York and Washington, D.C., and improvements in San Francisco and Seattle. Washington, D.C. showed resilient demand despite government job cuts[11](index=11&type=chunk) [Recent Highlights and Operational Performance](index=4&type=section&id=Recent%20Highlights%20and%20Operational%20Performance) The company's President and CEO, Mark J. Parrell, expressed encouragement over the Q1 operating performance, positioning the company well for the primary leasing season. Key operational metrics showed positive trends, including same store revenue growth and historically low resident turnover - CEO Mark J. Parrell noted that operating performance exceeded expectations, positioning the company well for the primary leasing season, and anticipates business resilience amidst economic uncertainty due to favorable demand, supply, and lifestyle preferences[9](index=9&type=chunk) Overall Same Store Operating Statistics | Metric | Q1 2025 vs. Q1 2024 | Q1 2025 vs. Q4 2024 | | :---------------- | :------------------ | :------------------ | | Apartment Units | 75,362 | 80,818 | | Physical Occupancy | 96.5% vs. 96.3% | 96.4% vs. 96.0% | | Revenues | 2.2% | 0.8% |\ | Expenses | 4.1% | 5.7% |\ | NOI | 1.3% | (1.4%) | - Resident Turnover in Q1 2025 was **7.9%**, the lowest in the company's history[11](index=11&type=chunk) Same Store Residential Revenues (Q1 2025 vs. Q1 2024) | Same Store Residential Revenues (Q1 2025 vs. Q1 2024) | | :---------------------------------------------------- | | Lease rates: 1.9% |\ | Vacancy gain (loss): 0.2% |\ | Bad Debt, Net: 0.2% |\ | Other: 0.4% |\ | **Total Same Store Residential Revenues: 2.7%** | [Residential Same Store Operating Statistics](index=6&type=section&id=Residential%20Same%20Store%20Operating%20Statistics) Residential same store operating statistics for Q1 2025 showed improved physical occupancy and a higher percentage of residents renewing, while new lease changes remained negative but improved from the prior quarter. Blended rates met expectations and are projected to increase in Q2 2025 Residential Same Store Operating Statistics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------- | :------ | :------ | :------ | | Physical Occupancy | 96.5% | 96.1% | 96.3% | | Percentage of Residents Renewing by quarter | 62.0% | 61.3% | 61.1% | | New Lease Change | (2.2%) | (4.4%) | (2.3%) | | Renewal Rate Achieved | 4.9% | 5.0% | 4.7% | | Blended Rate | 1.8% | 1.0% | 1.5% | - Blended Rate for Q1 2025 met expectations and was consistent with seasonal patterns, while Physical Occupancy exceeded expectations[20](index=20&type=chunk) - For Q2 2025, the Blended Rate is expected to be between **2.8%** and **3.4%**[20](index=20&type=chunk) [Investment Activity](index=6&type=section&id=Investment%20Activity) In Q1 2025, Equity Residential did not acquire any operating properties but sold two properties and one land parcel for a total of approximately $229.9 million. The company also completed three development projects, adding 945 apartment units in New York, Denver, and San Francisco - No operating properties were acquired during Q1 2025[21](index=21&type=chunk) - Sold two properties (**546 apartment units**) in San Diego and Seattle for approximately **$225.6 million** at a weighted average Disposition Yield of **5.2%**[21](index=21&type=chunk) - Sold one land parcel for approximately **$4.3 million**[21](index=21&type=chunk) - Completed two joint venture development projects in New York and Denver (**720 apartment units**) for approximately **$285.9 million**[22](index=22&type=chunk) - Completed one wholly owned development project in San Francisco (**225 apartment units**) for approximately **$152.6 million**[22](index=22&type=chunk) [Second Quarter 2025 Guidance](index=6&type=section&id=Second%20Quarter%202025%20Guidance) Equity Residential provided guidance for Q2 2025 EPS, FFO per share, and Normalized FFO per share. The company is not revising its annual guidance from the Q4 2024 earnings release Q2 2025 Guidance | Metric | Q2 2025 Guidance | | :----------------------- | :--------------- | | EPS | $0.49 to $0.53 | | FFO per share | $0.95 to $0.99 | | Normalized FFO per share | $0.96 to $1.00 | - The company is not revising its annual operating or other guidance (including EPS, FFO per share, and Normalized FFO per share) provided in the Q4 2024 earnings release[23](index=23&type=chunk) - The difference in Normalized FFO per share guidance for Q2 2025 compared to Q1 2025 actuals is primarily due to an expected positive impact from Residential same store NOI (**$0.03**) offset by higher interest expense, net (**$(0.01)**)[25](index=25&type=chunk) [About Equity Residential](index=7&type=section&id=About%20Equity%20Residential) Equity Residential is an S&P 500 member focused on acquiring, developing, and managing residential properties in dynamic cities that attract affluent long-term renters. The company owns or invests in 312 properties with 84,648 apartment units across established and expanding markets - Equity Residential is an S&P 500 member, focused on acquisition, development, and management of residential properties in and around dynamic cities attracting affluent long-term renters[26](index=26&type=chunk) - The company owns or has investments in **312 properties**, comprising **84,648 apartment units**[26](index=26&type=chunk) - Established presence in Boston, New York, Washington, D.C., Seattle, San Francisco, and Southern California, with an expanding presence in Denver, Atlanta, Dallas/Ft. Worth, and Austin[26](index=26&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This section highlights that the press release contains forward-looking statements based on management's current expectations, estimates, and projections. These statements are subject to inherent uncertainties and risks, including changes in market conditions, construction, government regulations, and competition, as detailed in the company's SEC filings. Equity Residential disclaims any obligation to update these statements - The press release contains forward-looking statements based on current expectations, estimates, projections, and assumptions made by management[27](index=27&type=chunk) - Forward-looking information is subject to uncertainties and risks, including changes in general market conditions, job growth, labor/material costs, new multifamily construction, government regulations, and competition[27](index=27&type=chunk) - Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events[27](index=27&type=chunk) [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents Equity Residential's consolidated statements of operations, detailing revenues, expenses, and net income for the first quarter of 2025 compared to the prior year [Consolidated Statements of Operations Summary](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20Summary) Equity Residential reported a decrease in net income for Q1 2025 compared to Q1 2024, primarily due to lower net gain on sales of real estate properties and higher depreciation and interest expenses, despite an increase in rental income Consolidated Statements of Operations | Metric (in thousands) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :-------------------- | :-------- | :-------- | :-------- | | Rental income | $760,810 | $730,818 | +$29,992 | | Total expenses | $566,542 | $520,430 | +$46,112 | | Net gain on sales of real estate properties | $154,152 | $188,185 | $(34,033) | | Interest expense, net | $(72,114) | $(67,212) | $(4,902) | | Net income | $264,798 | $305,032 | $(40,234) | | Net income available to Common Shares | $256,236 | $293,796 | $(37,560) | | Earnings per share – diluted | $0.67 | $0.77 | $(0.10) | | Distributions declared per Common Share outstanding | $0.6925 | $0.675 | +$0.0175 | - Depreciation expense increased from **$225.7 million** in Q1 2024 to **$256.7 million** in Q1 2025[30](index=30&type=chunk) - General and administrative expenses increased from **$15.7 million** in Q1 2024 to **$18.3 million** in Q1 2025[30](index=30&type=chunk) [Consolidated Statements of Funds From Operations and Normalized Funds From Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Funds%20From%20Operations%20and%20Normalized%20Funds%20From%20Operations) This section outlines Equity Residential's Funds From Operations (FFO) and Normalized FFO, key non-GAAP metrics for real estate investment trusts, for the first quarter of 2025 [FFO and Normalized FFO Summary](index=9&type=section&id=FFO%20and%20Normalized%20FFO%20Summary) Equity Residential reported an increase in FFO and Normalized FFO for Q1 2025 compared to Q1 2024, primarily driven by adjustments for depreciation and a significant reduction in 'Other miscellaneous items' compared to the prior year Funds From Operations and Normalized Funds From Operations | Metric (in thousands) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :-------------------- | :-------- | :-------- | :-------- | | Net income | $264,798 | $305,032 | $(40,234) | | FFO available to Common Shares and Units | $368,935 | $338,419 | +$30,516 | | Normalized FFO available to Common Shares and Units | $372,518 | $364,896 | +$7,622 | | FFO per share and Unit – diluted | $0.94 | $0.87 | +$0.07 | | Normalized FFO per share and Unit – diluted | $0.95 | $0.93 | +$0.02 | - Depreciation adjustment for FFO increased from **$225.7 million** in Q1 2024 to **$256.7 million** in Q1 2025[33](index=33&type=chunk) - Other miscellaneous items adjustment for Normalized FFO significantly decreased from **$30.6 million** in Q1 2024 to **$1.7 million** in Q1 2025[33](index=33&type=chunk) [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) This section provides a summary of Equity Residential's financial position, including assets, liabilities, and equity, as of March 31, 2025, and December 31, 2024 [Consolidated Balance Sheets Summary](index=10&type=section&id=Consolidated%20Balance%20Sheets%20Summary) As of March 31, 2025, Equity Residential's total assets slightly decreased compared to December 31, 2024, primarily due to a reduction in investment in real estate, net, and cash. Total liabilities also decreased, driven by lower mortgage notes payable and line of credit balances Consolidated Balance Sheets | Metric (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------- | :------------- | :---------------- | :--------- | | Total assets | $20,562,185 | $20,834,176 | $(271,991) | | Investment in real estate, net | $19,324,541 | $19,558,328 | $(233,787) | | Cash and cash equivalents | $39,849 | $62,302 | $(22,453) | | Total liabilities | $8,973,055 | $9,249,829 | $(276,774) | | Mortgage notes payable, net | $1,593,803 | $1,630,690 | $(36,887) | | Line of credit and commercial paper | $304,000 | $543,679 | $(239,679) | | Total equity | $11,251,431 | $11,245,784 | +$5,647 | - Projects under development decreased from **$261.7 million** to **$144.7 million**, reflecting project completions[35](index=35&type=chunk) - Accounts payable and accrued expenses increased from **$99.3 million** to **$149.3 million**[35](index=35&type=chunk) [Portfolio Summary](index=11&type=section&id=Portfolio%20Summary) This section offers a comprehensive overview of Equity Residential's property portfolio, categorized by market and detailing key metrics such as unit count, NOI contribution, and average rental rates [Portfolio Overview by Market](index=11&type=section&id=Portfolio%20Overview%20by%20Market) As of March 31, 2025, Equity Residential's portfolio consists of 312 properties and 84,648 apartment units, with a significant concentration in established markets like Southern California, San Francisco, Washington D.C., New York, Boston, and Seattle, which collectively account for over 90% of budgeted NOI Portfolio Summary by Market | Market Category | Properties | Apartment Units | % of Stabilized Budgeted NOI | Average Rental Rate | | :---------------- | :--------- | :-------------- | :--------------------------- | :------------------ | | Established Markets | 267 | 71,017 | 90.2% | $3,259 | | Expansion Markets | 45 | 13,631 | 9.8% | $2,082 | | **Total** | **312** | **84,648** | **100.0%** | **$3,072** | - New York has the highest average rental rate at **$4,662**, followed by San Francisco at **$3,415**[37](index=37&type=chunk) - The portfolio includes **294 wholly owned properties** (**80,010 units**), **12 consolidated partially owned properties** (**2,656 units**), and **6 unconsolidated partially owned properties** (**1,982 units**)[37](index=37&type=chunk) [Portfolio Rollforward](index=12&type=section&id=Portfolio%20Rollforward) This section details the changes in Equity Residential's property portfolio during Q1 2025, including dispositions and completed development projects, and their impact on apartment unit count [Q1 2025 Portfolio Changes](index=12&type=section&id=Q1%202025%20Portfolio%20Changes) During Q1 2025, Equity Residential's portfolio saw a net increase of 399 apartment units, resulting from the disposition of two consolidated rental properties and one land parcel, offset by the completion of three development projects (one consolidated, two unconsolidated) Portfolio Rollforward Activity | Activity | Properties | Apartment Units | Sales Price (in thousands) | | :-------------------------- | :--------- | :-------------- | :---------- | | Balance as of 12/31/2024 | 311 | 84,249 | | | Dispositions: Consolidated Rental Properties | (2) | (546) | $(225,600) | | Dispositions: Consolidated Land Parcels | — | — | $(4,300) | | Completed Developments – Consolidated | 1 | 225 | | | Completed Developments – Unconsolidated | 2 | 720 | | | **Balance as of 3/31/2025** | **312** | **84,648** | | - The two consolidated rental properties were sold at a weighted average Disposition Yield of **5.2%**[40](index=40&type=chunk) [Same Store Results](index=13&type=section&id=Same%20Store%20Results) This section presents the operating performance of Equity Residential's same store properties, analyzing revenue, expenses, and Net Operating Income (NOI) trends across residential and non-residential segments and by market [Overall Same Store Results (Residential and Non-Residential)](index=13&type=section&id=Overall%20Same%20Store%20Results%20(Residential%20and%20Non-Residential)) Equity Residential's same store portfolio (including Residential and Non-Residential) showed revenue growth and improved physical occupancy year-over-year, but a slight decline in NOI quarter-over-quarter due to higher expenses Overall Same Store Operating Statistics | Metric | Q1 2025 vs. Q1 2024 (75,362 units) | Q1 2025 vs. Q4 2024 (80,818 units) | | :---------------- | :--------------------------------- | :--------------------------------- | | Revenues | +2.2% | +0.8% | | Expenses | +4.1% | +5.7% | | NOI | +1.3% | (1.4%) | | Average Rental Rate | +2.4% | +0.3% | | Physical Occupancy | +0.2% | +0.4% | | Turnover | (0.7%) | (1.3%) | - Non-Residential operations reduced quarterly same store revenue growth by **0.50%** year-over-year, primarily due to higher reinstatement of straight-line receivable balances in Q1 2024[45](index=45&type=chunk) [Same Store Residential Revenues – GAAP to Cash Basis](index=14&type=section&id=Same%20Store%20Residential%20Revenues%20%E2%80%93%20GAAP%20to%20Cash%20Basis) Same Store Residential Revenues on a GAAP basis increased by 2.7% year-over-year and 0.7% quarter-over-quarter. When adjusted for leasing concessions on a cash basis, the year-over-year growth was slightly lower at 2.5%, while quarter-over-quarter remained consistent at 0.7% Same Store Residential Revenues Reconciliation | Metric (in thousands) | Q1 2025 vs. Q1 2024 (75,362 units) (in thousands) | Q1 2025 vs. Q4 2024 (80,818 units) (in thousands) | | :---------------------------------------------------- | :--------------------------------- | :--------------------------------- | | Same Store Residential Revenues (GAAP Basis) | $688,857 vs. $671,039 | $722,351 vs. $717,211 | | Leasing Concessions amortized | $5,176 vs. $5,052 | $5,800 vs. $5,522 | | Leasing Concessions granted | $(5,972) vs. $(4,836) | $(6,977) vs. $(6,619) | | Same Store Residential Revenues with Leasing Concessions on a cash basis | $688,061 vs. $671,255 | $721,174 vs. $716,114 | | % change - GAAP revenue | 2.7% | 0.7% | | % change - cash revenue | 2.5% | 0.7% | [Same Store Net Operating Income By Quarter](index=14&type=section&id=Same%20Store%20Net%20Operating%20Income%20By%20Quarter) Same store NOI for 75,362 apartment units increased year-over-year in Q1 2025 but saw a sequential decline from Q4 2024, primarily due to higher expenses Same Store Net Operating Income Trends | Metric (in thousands) | Q1 2025 (in thousands) | Q4 2024 (in thousands) | Q3 2024 (in thousands) | Q2 2024 (in thousands) | Q1 2024 (in thousands) | | :-------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Same store revenues | $715,800 | $709,646 | $706,976 | $704,060 | $700,443 | | Same store expenses | $235,241 | $221,822 | $226,647 | $219,926 | $225,958 | | Same store NOI | $480,559 | $487,824 | $480,329 | $484,134 | $474,485 | - Same store NOI increased by **$6.07 million** (**1.3%**) from Q1 2024 to Q1 2025, but decreased by **$7.27 million** (**1.5%**) from Q4 2024 to Q1 2025[43](index=43&type=chunk)[45](index=45&type=chunk)[50](index=50&type=chunk) [Same Store Residential Accounts Receivable and Bad Debt](index=15&type=section&id=Same%20Store%20Residential%20Accounts%20Receivable%20and%20Bad%20Debt) Net residential accounts receivable balances remained stable, while bad debt, net, as a percentage of same store residential revenues, improved year-over-year, indicating better collection performance Residential Accounts Receivable Balances | Metric (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | March 31, 2024 (in thousands) | | :-------------------------------- | :------------- | :---------------- | :------------- | | Residential accounts receivable balances | $13,972 | $14,328 | $17,787 | | Allowance for doubtful accounts | $(9,132) | $(9,431) | $(12,885) | | Net receivable balances | $4,840 | $4,897 | $4,902 | Bad Debt Analysis | Metric (in thousands) | Q1 2025 (in thousands) | Q4 2024 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :------- | :------- | :------- | | Bad debts before governmental rental assistance | $7,419 | $7,780 | $8,846 | | Governmental rental assistance received | $(268) | $(367) | $(442) | | Bad Debt, Net | $7,151 | $7,413 | $8,404 | | Bad Debt, Net as a % of Same Store Residential Revenues | 1.0% | 1.1% | 1.3% | - Total same store Residential Leasing Concessions granted in Q1 2025 were approximately **$6.0 million**[52](index=52&type=chunk) [Same Store Residential Results/Statistics by Market (Q1 2025 vs Q1 2024)](index=16&type=section&id=Same%20Store%20Residential%20Results%2FStatistics%20by%20Market%20(Q1%202025%20vs%20Q1%202024)) Year-over-year, most established markets showed positive NOI growth, with Seattle leading at 4.4% and New York at 3.4%. Denver and Other Expansion Markets experienced NOI decreases, reflecting regional variations in performance Same Store Residential Performance by Market (Q1 2025 vs Q1 2024) | Market/Metro Area | Q1 2025 % of Actual NOI | Q1 2025 Average Rental Rate | Q1 2025 Physical Occupancy % | Q1 2025 Turnover | Revenues Change | Expenses Change | NOI Change | Average Rental Rate Change | Physical Occupancy Change | Turnover Change | | :------------------ | :---------------------- | :-------------------------- | :--------------------------- | :--------------- | :-------------- | :-------------- | :--------- | :------------------------- | :------------------------ | :-------------- | | Los Angeles | 17.7% | $2,956 | 95.7% | 9.0% | 1.4% | 2.6% | 0.9% | 1.2% | 0.2% | (0.6%) | | San Francisco | 16.3% | $3,387 | 96.8% | 8.3% | 3.3% | 3.3% | 3.3% | 3.0% | 0.3% | (1.2%) | | Washington, D.C. | 16.1% | $2,800 | 97.3% | 6.0% | 4.6% | 8.2% | 3.0% | 4.4% | 0.2% | (1.0%) | | New York | 14.5% | $4,710 | 97.6% | 6.3% | 3.2% | 2.9% | 3.4% | 2.6% | 0.6% | (0.2%) | | Boston | 11.2% | $3,657 | 95.8% | 7.1% | 2.9% | 6.2% | 1.5% | 2.8% | 0.1% | (0.3%) | | Seattle | 10.3% | $2,647 | 96.5% | 9.0% | 3.7% | 2.1% | 4.4% | 3.3% | 0.4% | (0.7%) | | Denver | 2.8% | $2,354 | 95.5% | 10.6% | (3.0%) | (0.2%) | (4.3%) | (2.3%) | (0.7%) | 0.1% | | Other Expansion Markets | 2.3% | $1,879 | 95.1% | 9.5% | (4.8%) | 2.8% | (9.9%) | (4.7%) | (0.1%) | (3.7%) | | **Total** | **100.0%** | **$3,160** | **96.5%** | **7.9%** | **2.7%** | **4.0%** | **2.0%** | **2.4%** | **0.2%** | **(0.7%)** | [Same Store Residential Results/Statistics by Market (Q1 2025 vs Q4 2024)](index=17&type=section&id=Same%20Store%20Residential%20Results%2FStatistics%20by%20Market%20(Q1%202025%20vs%20Q4%202024)) Quarter-over-quarter, most established markets experienced a decline in NOI, primarily due to higher expenses, despite modest revenue growth. Seattle maintained flat NOI, while expansion markets continued to see NOI decreases Same Store Residential Performance by Market (Q1 2025 vs Q4 2024) | Market/Metro Area | Q1 2025 % of Actual NOI | Q1 2025 Average Rental Rate | Q1 2025 Physical Occupancy % | Q1 2025 Turnover | Revenues Change | Expenses Change | NOI Change | Average Rental Rate Change | Physical Occupancy Change | Turnover Change | | :------------------ | :---------------------- | :-------------------------- | :--------------------------- | :--------------- | :-------------- | :-------------- | :--------- | :------------------------- | :------------------------ | :-------------- | | Los Angeles | 16.8% | $2,956 | 95.7% | 9.0% | 0.5% | 5.2% | (1.6%) | 0.6% | (0.1%) | (0.6%) | | San Francisco | 15.9% | $3,387 | 96.8% | 8.3% | 1.7% | 8.0% | (0.8%) | 1.0% | 0.7% | (2.0%) | | Washington, D.C. | 15.7% | $2,798 | 97.3% | 6.1% | 1.1% | 9.3% | (2.5%) | 0.3% | 0.7% | (1.9%) | | New York | 13.9% | $4,710 | 97.6% | 6.3% | 0.7% | 5.1% | (2.4%) | 0.4% | 0.2% | (0.2%) | | Boston | 10.8% | $3,635 | 95.8% | 7.0% | 0.3% | 7.8% | (2.7%) | (0.2%) | 0.5% | (0.8%) | | Seattle | 9.8% | $2,647 | 96.5% | 9.0% | 0.6% | 2.2% | 0.0% | 0.4% | 0.2% | 0.0% | | Denver | 3.7% | $2,319 | 95.1% | 10.8% | (1.5%) | 1.5% | (2.8%) | (1.7%) | 0.2% | (2.1%) | | Other Expansion Markets | 4.9% | $1,922 | 95.4% | 9.2% | (0.5%) | 1.7% | (1.9%) | (1.4%) | 0.8% | (1.6%) | | **Total** | **100.0%** | **$3,092** | **96.4%** | **7.9%** | **0.7%** | **5.7%** | **(1.6%)** | **0.3%** | **0.4%** | **(1.3%)** | [Same Store Residential Net Effective Lease Pricing Statistics](index=18&type=section&id=Same%20Store%20Residential%20Net%20Effective%20Lease%20Pricing%20Statistics) In Q1 2025, established markets generally showed improved new lease changes and positive blended rates compared to Q4 2024, with New York having the highest blended rate. Expansion markets continued to experience negative new lease changes and blended rates Same Store Residential Net Effective Lease Pricing | Market/Metro Area | New Lease Change (Q1 2025) | New Lease Change (Q4 2024) | Renewal Rate Achieved (Q1 2025) | Renewal Rate Achieved (Q4 2024) | Blended Rate (Q1 2025) | Blended Rate (Q4 2024) | | :------------------ | :------------------------- | :------------------------- | :------------------------------ | :------------------------------ | :--------------------- | :--------------------- | | Southern California | (2.1%) | (4.9%) | 4.6% | 4.4% | 1.6% | 0.4% | | San Francisco | 0.6% | (2.8%) | 5.4% | 6.6% | 3.3% | 2.5% | | Washington, D.C. | 0.0% | (2.8%) | 5.7% | 5.5% | 3.2% | 1.8% | | New York | 1.4% | (1.6%) | 4.8% | 4.3% | 3.5% | 2.3% | | Boston | (5.3%) | (4.8%) | 4.5% | 4.4% | 0.0% | 1.1% | | Seattle | (3.4%) | (6.0%) | 5.5% | 6.9% | 1.7% | 0.5% | | Subtotal – Established Markets | (1.3%) | (3.8%) | 5.0% | 5.1% | 2.3% | 1.4% | | Denver | (13.1%) | (11.8%) | 3.9% | 3.1% | (6.1%) | (4.7%) | | Other Expansion Markets | (14.7%) | (12.9%) | 1.5% | 1.8% | (8.8%) | (6.3%) | | **Total** | **(2.2%)** | **(4.4%)** | **4.9%** | **5.0%** | **1.8%** | **1.0%** | [Total Same Store Operating Expenses](index=19&type=section&id=Total%20Same%20Store%20Operating%20Expenses) Total same store operating expenses increased by 4.1% year-over-year in Q1 2025, primarily driven by higher utilities, real estate taxes, and on-site payroll. Leasing and advertising expenses also saw a significant increase Total Same Store Operating Expenses Breakdown | Expense Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | $ Change (in thousands) | % Change | % of Q1 2025 Operating Expenses | | :------------------------ | :--------------------- | :--------------------- | :------- | :------- | :------------------------------ | | Real estate taxes | $94,556 | $91,907 | $2,649 | 2.9% | 40.2% | | On-site payroll | $43,444 | $42,019 | $1,425 | 3.4% | 18.5% | | Utilities | $39,479 | $36,145 | $3,334 | 9.2% | 16.8% | | Repairs and maintenance | $29,437 | $29,091 | $346 | 1.2% | 12.5% | | Insurance | $9,240 | $9,134 | $106 | 1.2% | 3.9% | | Leasing and advertising | $2,720 | $2,313 | $407 | 17.6% | 1.1% | | Other on-site operating expenses | $16,365 | $15,349 | $1,016 | 6.6% | 7.0% | | **Total Same Store Operating Expenses** | **$235,241** | **$225,958** | **$9,283** | **4.1%** | **100.0%** | - Real estate taxes increased due to escalation in rates and assessed values, including a **1 percentage point** contribution from 421-a tax abatement burnoffs in New York City[66](index=66&type=chunk) - Utilities increased primarily due to higher commodity prices for gas and electric, and higher water, sewer, and trash expenses[67](index=67&type=chunk) - Leasing and advertising expenses increased primarily due to higher advertising expenses and processing fees[68](index=68&type=chunk) [Debt Summary](index=20&type=section&id=Debt%20Summary) This section provides a detailed overview of Equity Residential's debt profile, including its composition, maturity schedule, and compliance with key debt covenants and credit ratios as of March 31, 2025 [Debt Profile as of March 31, 2025](index=20&type=section&id=Debt%20Profile%20as%20of%20March%2031,%202025) As of March 31, 2025, Equity Residential's total debt stood at $7.85 billion, predominantly unsecured and fixed-rate, with a weighted average interest rate of 3.74% and an average maturity of 7.2 years Debt Profile Summary | Debt Type | Debt Balances (in thousands) | % of Total | Weighted Average Rates | Weighted Average Maturities (years) | | :-------------------------- | :--------------------------- | :--------- | :--------------------- | :---------------------------------- | | Secured | $1,593,803 | 20.3% | 3.77% | 6.6 | | Unsecured | $6,253,081 | 79.7% | 3.74% | 7.4 | | **Total** | **$7,846,884** | **100.0%** | **3.74%** | **7.2** | | Fixed Rate Debt | $7,350,892 | 93.7% | 3.72% | 7.4 | | Floating Rate Debt | $495,992 | 6.3% | 3.98% | 4.0 | - The weighted average maturity of commercial paper outstanding was **1 day** at March 31, 2025, with a weighted average amount outstanding of approximately **$390.2 million** for the quarter[72](index=72&type=chunk) - The company capitalized interest of approximately **$3.9 million** in Q1 2025, up from **$3.1 million** in Q1 2024[73](index=73&type=chunk) [Debt Maturity Schedule](index=21&type=section&id=Debt%20Maturity%20Schedule) Equity Residential has a well-laddered debt maturity schedule, with significant maturities in 2025 and 2030, and a substantial portion of debt maturing in 2035 and beyond. The majority of the debt is fixed-rate Debt Maturity Schedule by Year | Year | Fixed Rate (in thousands) | Floating Rate (in thousands) | Total (in thousands) | % of Total | Weighted Average Coupons on Fixed Rate Debt | Weighted Average Coupons on Total Debt | | :--- | :------------------------ | :--------------------------- | :------------------- | :--------- | :------------------------------------------ | :------------------------------------- | | 2025 | $450,000 | $310,900 | $760,900 | 9.6% | 3.38% | 3.84% | | 2026 | $592,025 | $7,400 | $599,425 | 7.6% | 3.58% | 3.58% | | 2027 | $400,000 | $8,200 | $408,200 | 5.2% | 3.25% | 3.24% | | 2028 | $900,000 | $9,000 | $909,000 | 11.5% | 3.79% | 3.78% | | 2029 | $888,120 | $9,700 | $897,820 | 11.3% | 3.30% | 3.30% | | 2030 | $1,148,462 | $10,800 | $1,159,262 | 14.6% | 2.53% | 2.53% | | 2031 | $528,500 | $37,700 | $566,200 | 7.2% | 1.94% | 2.00% | | 2032 | — | $26,000 | $26,000 | 0.3% | — | 3.09% | | 2033 | $550,000 | — | $550,000 | 6.9% | 5.22% | 5.22% | | 2034 | $600,000 | — | $600,000 | 7.6% | 4.65% | 4.65% | | 2035+ | $1,350,850 | $86,960 | $1,437,810 | 18.2% | 4.39% | 4.22% | | **Total** | **$7,350,892** | **$495,992** | **$7,846,884** | **100.0%** | **3.62%** | **3.62%** | - The 2025 floating rate debt includes **$304.0 million** in principal outstanding on the Commercial Paper Program[77](index=77&type=chunk) [Selected Unsecured Public Debt Covenants and Credit Ratios](index=22&type=section&id=Selected%20Unsecured%20Public%20Debt%20Covenants%20and%20Credit%20Ratios) Equity Residential maintained strong compliance with its unsecured public debt covenants as of March 31, 2025, showing improved credit ratios such as lower total and net debt to Normalized EBITDAre and a higher percentage of unencumbered NOI Selected Unsecured Public Debt Covenants | Covenant | March 31, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------- | :---------------- | | Debt to Adjusted Total Assets (not to exceed 60%) | 26.8% | 27.7% | | Secured Debt to Adjusted Total Assets (not to exceed 40%) | 6.2% | 6.3% | | Consolidated Income Available for Debt Service to Maximum Annual Service Charges (must be at least 1.5 to 1) | 6.00 | 5.67 | | Total Unencumbered Assets to Unsecured Debt (must be at least 125%) | 493.3% | 473.7% | Key Credit Ratios | Credit Ratio | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Total debt to Normalized EBITDAre | 4.25x | 4.43x | | Net debt to Normalized EBITDAre | 4.21x | 4.38x | | Unencumbered NOI as a % of total NOI | 90.5% | 89.7% | - The company was in compliance with its unsecured debt covenants for all periods presented[121](index=121&type=chunk) [Capital Structure](index=23&type=section&id=Capital%20Structure) This section outlines Equity Residential's capital structure, detailing the composition of its total market capitalization, including debt, common shares, and preferred equity as of March 31, 2025 [Capital Structure Overview as of March 31, 2025](index=23&type=section&id=Capital%20Structure%20Overview%20as%20of%20March%2031,%202025) As of March 31, 2025, Equity Residential's total market capitalization was approximately $35.89 billion, with equity representing 78.1% and total debt representing 21.9%. Common shares and units constitute the vast majority of the equity Market Capitalization Breakdown | Component | Amount (in thousands) | % of Total Market Capitalization | | :-------------------------- | :-------------------- | :------------------------------- | | Total Debt | $7,846,884 | 21.9% | | Common Shares and Units (Market Value) | $28,028,148 | 78.1% | | Perpetual Preferred Equity | $17,155 | 0.1% | | **Total Market Capitalization** | **$35,892,187** | **100.0%** | - Common Shares (including Restricted Shares) represent **97.0%** of total shares and units, while Units (including OP Units and Restricted Units) represent **3.0%**[83](index=83&type=chunk) - The common share price at March 31, 2025, was **$71.58**[83](index=83&type=chunk) [Common Share and Unit Weighted Average Amounts Outstanding](index=24&type=section&id=Common%20Share%20and%20Unit%20Weighted%20Average%20Amounts%20Outstanding) This section presents the weighted average common shares and units outstanding for Equity Residential, used in the calculation of per-share metrics for net income, FFO, and Normalized FFO [Weighted Average Shares and Units Outstanding](index=24&type=section&id=Weighted%20Average%20Shares%20and%20Units%20Outstanding) Equity Residential's weighted average common shares and units outstanding for diluted EPS, FFO, and Normalized FFO purposes increased slightly year-over-year, reflecting a modest increase in shares issuable from assumed conversions and vesting Weighted Average Shares and Units Outstanding | Metric | Q1 2025 | Q1 2024 | | :---------------------------------------------------- | :------------ | :------------ | | Weighted Average Amounts Outstanding for Net Income Purposes: | | | | Common Shares - basic | 379,207,994 | 378,811,922 | | Total Common Shares and Units - diluted | 391,179,431 | 390,561,185 | | Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes: | | | | Total Common Shares and OP Units - basic | 389,719,163 | 389,481,268 | | Total Common Shares and Units - diluted | 391,179,431 | 390,561,185 | | Period Ending Amounts Outstanding: | | | | Total Shares and Units | 391,563,950 | 390,672,373 | - Shares issuable from assumed conversion/vesting of OP Units decreased slightly, while long-term compensation shares/units increased[86](index=86&type=chunk) [Partially Owned Properties](index=25&type=section&id=Partially%20Owned%20Properties) This section provides an overview of Equity Residential's investments in partially owned properties, detailing their unit count, financial contributions, and associated debt as of March 31, 2025 [Overview of Partially Owned Properties](index=25&type=section&id=Overview%20of%20Partially%20Owned%20Properties) As of March 31, 2025, Equity Residential had investments in 18 partially owned properties, totaling 4,638 apartment units. Consolidated properties generated positive NOI, while unconsolidated properties, including projects completed but not yet stabilized, contributed to NOI and incurred interest expenses Partially Owned Properties Summary | Category | Total Properties | Total Apartment Units | Q1 2025 NOI Expense (in thousands) | Q1 2025 Interest Expense (in thousands) | Total Debt (in thousands) | | :------------------------------------ | :--------------- | :-------------------- | :--------------------------------- | :-------------------------------------- | :------------------------ | | CONSOLIDATED: Operating properties (stabilized) | 12 | 2,656 | $16,175 | $255 | $28,312 | | CONSOLIDATED: Projects Under Development | — | — | $(83) | — | — | | UNCONSOLIDATED: Projects Under Development | — | — | $26 | $91 | — | | UNCONSOLIDATED: Projects Completed Not Stabilized | 6 | 1,982 | $2,706 | $3,785 | $339,269 | | **Total Partially Owned Properties** | **18** | **4,638** | **$18,824** | **$4,131** | **$367,581** | - The company is currently developing one consolidated property (**440 units**) and two unconsolidated properties (**639 units**)[88](index=88&type=chunk)[89](index=89&type=chunk) - Partially owned consolidated and unconsolidated amounts are presented at **100%** of the project/property[89](index=89&type=chunk) [Development and Lease-Up Projects](index=26&type=section&id=Development%20and%20Lease-Up%20Projects) This section details Equity Residential's ongoing development and lease-up projects, including apartment unit counts, budgeted costs, and their current operational status and expected stabilization timelines [Current Development and Lease-Up Projects](index=26&type=section&id=Current%20Development%20and%20Lease-Up%20Projects) As of March 31, 2025, Equity Residential had 3,286 apartment units across various development and lease-up projects, with a total budgeted capital cost of over $1.3 billion. Several projects were completed and in lease-up, while others were under development, contributing a net positive NOI of $2.5 million in Q1 2025 Development and Lease-Up Projects Overview | Project Category | No. of Apartment Units | Total Budgeted Capital Cost (in thousands) | Total Book Value to Date (in thousands) | Total Debt (in thousands) | Q1 2025 NOI (in thousands) | | :------------------------------------ | :--------------------- | :----------------------------------------- | :-------------------------------------- | :------------------------ | :------------------------- | | CONSOLIDATED: Projects Under Development | 440 | $232,172 | $144,706 | — | $(83) | | CONSOLIDATED: Projects Completed Not Stabilized | 225 | $152,621 | $146,406 | — | $(145) | | UNCONSOLIDATED: Projects Under Development | 639 | $307,200 | $124,361 | — | $26 | | UNCONSOLIDATED: Projects Completed Not Stabilized | 1,982 | $623,918 | $612,571 | $339,269 | $2,706 | | **Total Development Projects** | **3,286** | **$1,315,911** | **$1,028,044** | **$339,269** | **$2,504** | - The consolidated project 'The Basin' in Wakefield, MA, is **57% complete** and expected to stabilize in **Q2 2027**[92](index=92&type=chunk) - The unconsolidated project 'Alexan Harrison' in Harrison, NY, is **100% complete**, **85% leased**, and **78% occupied**, with stabilization expected in **Q4 2025**[92](index=92&type=chunk) - All unconsolidated projects are partially funded with project-specific construction loans that are non-recourse to the Company[92](index=92&type=chunk) [Residential Capital Expenditures to Real Estate](index=27&type=section&id=Residential%20Capital%20Expenditures%20to%20Real%20Estate) This section outlines Equity Residential's residential capital expenditures for Q1 2025, distinguishing between recurring and NOI-enhancing investments across same store and non-same store properties [Q1 2025 Residential Capital Expenditures](index=27&type=section&id=Q1%202025%20Residential%20Capital%20Expenditures) In Q1 2025, Equity Residential invested $59.1 million in total consolidated residential capital expenditures, with $34.8 million allocated to recurring expenditures and $24.3 million to NOI-enhancing projects, including significant renovation expenditures Residential Capital Expenditures (Q1 2025) | Capital Expenditure Type | Same Store Properties (in thousands) | Non-Same Store Properties (in thousands) | Total Consolidated Properties (in thousands) | Same Store Avg. Per Apartment Unit | | :------------------------------------ | :----------------------------------- | :--------------------------------------- | :------------------------------------------- | :--------------------------------- | | Recurring Capital Expenditures | $31,149 | $3,620 | $34,769 | $413 | | NOI-Enhancing Expenditures: Renovation Expenditures | $18,848 | $2,939 | $21,787 | $250 | | NOI-Enhancing Expenditures: Other | $2,105 | $444 | $2,549 | $28 | | **Total Capital Expenditures to Real Estate** | **$52,102** | **$7,003** | **$59,105** | **$691** | - Renovation Expenditures on **608 same store apartment units** approximated **$31,000 per apartment unit** renovated in Q1 2025[96](index=96&type=chunk) - Other NOI-enhancing expenditures include sustainability, property-level technology, and Accessory Dwelling Units (ADU) spend[97](index=97&type=chunk) [Normalized EBITDAre Reconciliations](index=28&type=section&id=Normalized%20EBITDAre%20Reconciliations) This section provides reconciliations for Normalized EBITDAre, a key non-GAAP financial measure, and related credit ratios, offering insights into Equity Residential's operational cash flow and debt servicing capacity [Normalized EBITDAre and Credit Ratios](index=28&type=section&id=Normalized%20EBITDAre%20and%20Credit%20Ratios) Equity Residential's Normalized EBITDAre for the trailing twelve months ended March 31, 2025, was $1.847 billion, showing a slight increase from the prior year. Key credit ratios, including total and net debt to Normalized EBITDAre, improved, reflecting stronger credit strength Normalized EBITDAre Reconciliation | Metric (in thousands) | Trailing Twelve Months March 31, 2025 (in thousands) | Trailing Twelve Months December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :--------------------------------------- | | Net income | $1,030,741 | $1,070,975 | | EBITDA | $2,318,602 | $2,322,503 | | EBITDAre | $1,805,359 | $1,775,191 | | Normalized EBITDAre | $1,847,477 | $1,833,555 | Key Credit Ratios | Credit Ratio | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Total debt to Normalized EBITDAre | 4.25x | 4.43x | | Net debt to Normalized EBITDAre | 4.21x | 4.38x | | Unencumbered NOI as a % of total NOI | 90.5% | 89.7% | - Normalized EBITDAre does not include adjustments for the company's share of partially owned unconsolidated entities or the minority partner's share of partially owned consolidated entities due to their immaterial size[101](index=101&type=chunk) [Adjustments from FFO to Normalized FFO](index=29&type=section&id=Adjustments%20from%20FFO%20to%20Normalized%20FFO) This section details the adjustments made to reconcile Funds From Operations (FFO) to Normalized FFO, highlighting non-recurring or non-operational items impacting the company's core performance metrics [Analysis of FFO to Normalized FFO Adjustments](index=29&type=section&id=Analysis%20of%20FFO%20to%20Normalized%20FFO%20Adjustments) Adjustments from FFO to Normalized FFO significantly decreased in Q1 2025 compared to Q1 2024, primarily due to a substantial reduction in insurance/litigation/environmental settlement or reserve expense, which was a major factor in the prior year FFO to Normalized FFO Adjustments | Adjustment Category (in thousands) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Variance (in thousands) | | :----------------------------------------- | :------- | :------- | :------- | | Write-off of pursuit costs | $1,321 | $548 | $773 | | Debt extinguishment and preferred share redemption (gains) losses | $97 | $1,444 | $(1,347) | | Non-operating asset (gains) losses | $438 | $(6,106) | $6,544 | | Other miscellaneous items | $1,727 | $30,591 | $(28,864)| | **Adjustments from FFO to Normalized FFO** | **$3,583** | **$26,477**| **$(22,894)**| - The significant decrease in 'Other miscellaneous items' variance is largely attributable to a reduction in insurance/litigation/environmental settlement or reserve expense, which was **$30.48 million** in Q1 2024, primarily related to a reserve increase for litigation over late fees[104](index=104&type=chunk) [Normalized FFO Guidance and Assumptions](index=30&type=section&id=Normalized%20FFO%20Guidance%20and%20Assumptions) This section presents Equity Residential's Normalized FFO guidance for Q2 and full year 2025, along with key operating, transaction, debt, and capital expenditure assumptions supporting these projections [Q2 and Full Year 2025 Normalized FFO Guidance](index=30&type=section&id=Q2%20and%20Full%20Year%202025%20Normalized%20FFO%20Guidance) Equity Residential reaffirmed its full-year 2025 Normalized FFO guidance and provided Q2 2025 guidance, anticipating continued same store revenue growth and stable physical occupancy, alongside planned transaction activity and capital expenditures Normalized FFO Guidance and Assumptions | Guidance Metric | Q2 2025 | Full Year 2025 (no change from previous) | | :---------------------------------------------------- | :---------------- | :--------------------------------------- | | Expected Normalized FFO Per Share | $0.96 to $1.00 | $3.90 to $4.00 | | 2025 Same Store Assumptions: | | | | Physical Occupancy | | 96.2% | | Revenue change | | 2.25% to 3.25% | | Expense change | | 3.5% to 4.5% | | NOI change | | 1.4% to 3.0% | | 2025 Transaction Assumptions: | | | | Consolidated rental acquisitions | | $1.5B | | Consolidated rental dispositions | | $1.0B | | Transaction Accretion (Dilution) | | (25 basis points) | | 2025 Debt Assumptions: | | | | Weighted average debt outstanding | | $8.20B to $8.40B | | Interest expense, net (on a Normalized FFO basis) | | $313.5M to $319.5M | | Capitalized interest | | $12.6M to $13.6M | | 2025 Capital Expenditures to Real Estate Assumptions for Residential Same Store Properties: | | | | NOI-Enhancing Capital Expenditures | | $130.0M | | Recurring Capital Expenditures | | $165.0M | | Total Capital Expenditures | | $295.0M | | 2025 Other Guidance Assumptions: | | | | Property management expense | | $139.0M to $141.0M | | General and administrative expense | | $60.0M to $64.0M | | Income (loss) from investments in unconsolidated entities | | $(3.0M) to $1.0M | | Debt offerings | | $500.0M to $1.0B | | Weighted average Common Shares and Units - Diluted | | 391.5M | - The company expects to spend approximately **$95.8 million** for apartment unit Renovation Expenditures on approximately **2,900 Residential same store apartment units** at an average cost of approximately **$33,000 per unit** renovated in 2025[110](index=110&type=chunk) - Income (loss) from investments in unconsolidated entities primarily consists of the company's share of Lease-Up NOI and interest expense, net, from recently completed unconsolidated development projects[111](index=111&type=chunk) [Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms](index=31&type=section&id=Additional%20Reconciliations%20and%20Definitions%20of%20Non-GAAP%20Financial%20Measures%20and%20Other%20Terms) This section provides comprehensive definitions and reconciliations for Equity Residential's non-GAAP financial measures and other key industry terms, ensuring clarity and comparability of reported financial performance [Non-GAAP Financial Measures and Key Term Definitions](index=31&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Term%20Definitions) This section provides definitions and reconciliations for various non-GAAP financial measures and other key terms used by Equity Residential, including FFO, Normalized FFO, EBITDAre, Normalized EBITDAre, NOI, and specific capital expenditure categories. These measures are presented to offer supplemental insights into the company's operating performance, credit strength, and asset valuation, while acknowledging they are not substitutes for GAAP metrics - Non-GAAP financial measures and other terms are provided to help understand the business, but their definitions and calculations may differ from other REITs and should not be considered alternatives to GAAP measures[114](index=114&type=chunk) - FFO and Normalized FFO are recognized measures of performance in the real estate industry, useful for comparing operating performance by excluding gains/losses from sales, impairment write-downs, and real estate depreciation[136](index=136&type=chunk)[138](index=138&type=chunk) - EBITDAre and Normalized EBITDAre are supplemental measures for evaluating the company's ability to incur and service debt, providing a comparison of credit strength between periods or companies by excluding non-comparable items[128](index=128&type=chunk)[129](index=129&type=chunk) - NOI is the primary financial measure for evaluating apartment properties, defined as rental income less direct property operating expenses, and is helpful as a supplemental measure of operating performance[146](index=146&type=chunk) Key Financial Metrics Per Share | Metric | Q1 2025 Per Share | Q1 2024 Per Share | Q2 2025 Expected Per Share | 2025 Expected Per Share | | :-------------------------- | :---------------- | :---------------- | :------------------------- | :---------------------- | | EPS – Diluted | $0.67 | $0.77 | $0.49 to $0.53 | $3.00 to $3.10 | | FFO per share – Diluted | $0.94 | $0.87 | $0.95 to $0.99 | $3.87 to $3.97 | | Normalized FFO per share – Diluted | $0.95 | $0.93 | $0.96 to $1.00 | $3.90 to $4.00 |

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].