Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 1-12252 (Equity Residential)
Commission File Number: 0-24920 (ERP Operating Limited Partnership)
EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland (Equity Residential)
13-3675988 (Equity Residential)
Illinois (ERP Operating Limited Partnership)
36-3894853 (ERP Operating Limited Partnership)
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
Two North Riverside Plaza, Chicago, Illinois 60606
(312) 474-1300
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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
Securities registered pursuant to Section 12(g) of the Act:
None (Equity Residential)
Units of Limited Partnership Interest (ERP Operating Limited Partnership)
(Title of each class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Equity Residential Yes ☒ No ☐
ERP Operating Limited Partnership Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Equity Residential Yes ☐ No ☒
ERP Operating Limited Partnership Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Equity Residential:
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
ERP Operating Limited Partnership:
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Equity Residential
ERP Operating Limited Partnership
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
The aggregate market value of Common Shares held by non-affiliates of the Registrant was approximately $26.3 billion based upon the closing price on June 30, 2024 of $69.34 using beneficial ownership of shares rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude voting shares owned by Trustees and Executive Officers, some of whom may not be held to be affiliates upon judicial determination.
The number of Common Shares of Beneficial Interest, $0.01 par value, outstanding on February 6, 2025 was 379,705,225.
Auditor Firm Id:
42
Auditor Name:
Ernst and Young LLP
Auditor Location:
Chicago, Illinois, USA
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference certain information that will be contained in Equity Residential’s Proxy Statement relating to its 2025 Annual Meeting of Shareholders, which Equity Residential intends to file no later than 120 days after the end of its fiscal year ended December 31, 2024, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 97.0% owner of ERP Operating Limited Partnership.
2
EXPLANATORY NOTE
This report combines the annual reports on Form 10-K for the year ended December 31, 2024 of Equity Residential and ERP Operating Limited Partnership. Unless stated otherwise or the context otherwise requires, references to “EQR” mean Equity Residential, a Maryland real estate investment trust (“REIT”), and references to “ERPOP” mean ERP Operating Limited Partnership, an Illinois limited partnership. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. The following chart illustrates the Company’s and the Operating Partnership’s corporate structure:
EQR is the general partner of, and as of December 31, 2024 owned an approximate 97.0% ownership interest in, ERPOP. The remaining 3.0% interest is owned by limited partners. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. Management operates the Company and the Operating Partnership as one business. The management of EQR consists of the same members as the management of ERPOP.
The Company is structured as an umbrella partnership REIT (“UPREIT”) and EQR contributes all net proceeds from its various equity offerings to ERPOP. In return for those contributions, EQR receives a number of OP Units (see definition below) in ERPOP equal to the number of Common Shares it has issued in the equity offering. The Company may acquire properties in transactions that include the issuance of OP Units as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. This is one of the reasons why the Company is structured in the manner shown above. Based on the terms of ERPOP’s partnership agreement, OP Units can be exchanged with Common Shares on a one-for-one basis because the Company maintains a one-for-one relationship between the OP Units of ERPOP issued to EQR and the outstanding Common Shares.
The Company believes that combining the reports on Form 10-K of EQR and ERPOP into this single report provides the following benefits:
3
The Company believes it is important to understand the few differences between EQR and ERPOP in the context of how EQR and ERPOP operate as a consolidated company. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR’s primary function is acting as the general partner of ERPOP. EQR also issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by EQR (which are contributed to the capital of ERPOP in exchange for additional partnership interests in ERPOP (“OP Units”) (on a one-for-one Common Share per OP Unit basis) or additional preference units in ERPOP (on a one-for-one preferred share per preference unit basis)), the Operating Partnership generates all remaining capital required by the Company’s business. These sources include the Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its revolving credit facility and/or commercial paper program, the issuance of secured and unsecured debt and partnership interests, and proceeds received from disposition of certain properties and joint venture interests.
Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements and as noncontrolling interests in the Company’s financial statements. The noncontrolling interests in the Operating Partnership’s financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in the Company’s financial statements include the same noncontrolling interests at the Operating Partnership level and limited partner OP Unit holders of the Operating Partnership. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at the Company and Operating Partnership levels.
To help investors understand the differences between the Company and the Operating Partnership, this report provides separate consolidated financial statements for the Company and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entity’s debt, noncontrolling interests and shareholders’ equity or partners’ capital, as applicable; and a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.
This report also includes separate Part II, Item 9A, Controls and Procedures, sections and separate Exhibits 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.
In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership.
As general partner with control of ERPOP, EQR consolidates ERPOP for financial reporting purposes, and EQR essentially has no assets or liabilities other than its investment in ERPOP. Therefore, the assets and liabilities of the Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.
4
TABLE OF CONTENTS
PAGE
PART I.
Item 1.
Business
7
Item 1A.
Risk Factors
13
Item 1B.
Unresolved Staff Comments
24
Item 1C.
Cybersecurity
Item 2.
Properties
25
Item 3.
Legal Proceedings
27
Item 4.
Mine Safety Disclosures
28
PART II.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
29
Item 6.
Reserved
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
30
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
45
Item 8.
Financial Statements and Supplementary Data
46
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A.
Controls and Procedures
Item 9B.
Other Information
47
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III.
Item 10.
Trustees, Executive Officers and Corporate Governance
48
Item 11.
Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions, and Trustee Independence
Item 14.
Principal Accountant Fees and Services
PART IV.
Item 15.
Exhibit and Financial Statement Schedules
49
Item 16.
Form 10-K Summary
EX-4.1
EX-19
EX-21
EX-23.1
EX-23.2
EX-31.1
EX-31.2
EX-31.3
EX 31.4
EX-32.1
EX-32.2
EX-32.3
EX-32.4
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
5
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Registered Public Accounting Firm on the Financial Statements (Equity Residential)
F-1 to F-2
Report of Independent Registered Public Accounting Firm on the Financial Statements (ERP Operating Limited Partnership)
F-3 to F-4
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (Equity Residential)
F-5
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (ERP Operating Limited Partnership)
F-6
Financial Statements of Equity Residential:
Consolidated Balance Sheets as of December 31, 2024 and 2023
F-7
Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2024, 2023 and 2022
F-8 to F-9
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
F-10 to F-13
Consolidated Statements of Changes in Equity for the years ended December 31, 2024, 2023 and 2022
F-14 to F-15
Financial Statements of ERP Operating Limited Partnership:
F-16
F-17 to F-18
F-19 to F-22
Consolidated Statements of Changes in Capital for the years ended December 31, 2024, 2023 and 2022
F-23 to F-24
Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited Partnership
F-25 to F-57
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III – Real Estate and Accumulated Depreciation of Equity Residential and ERP Operating Limited Partnership
S-1 to S-12
All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the consolidated financial statements or notes thereto.
6
PART I
Item 1. Business
General
Equity Residential (“EQR”) is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. ERP Operating Limited Partnership (“ERPOP”) is focused on conducting the multifamily property business of EQR. EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP.
EQR is the general partner of, and as of December 31, 2024 owned an approximate 97.0% ownership interest in, ERPOP. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.
The Company’s corporate headquarters is located in Chicago, Illinois and the Company also operates regional property management offices in most of its markets.
Certain capitalized terms used herein are defined in the Notes to Consolidated Financial Statements or the Definitions section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. See also Note 16 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.
Available Information
You may access our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy statements and any amendments to any of those reports/statements we file with or furnish to the Securities and Exchange Commission (“SEC”) free of charge on our website, www.equityapartments.com. These reports/statements are made available on our website as soon as reasonably practicable after we file them with or furnish them to the SEC. The information contained on our website, including any information referred to in this report as being available on our website, is not a part of or incorporated into this report.
Business Objectives and Operating and Investing Strategies
Overview
The Company is one of the largest U.S. publicly-traded owners and operators of high quality rental apartment properties, with an established presence in Boston, New York, Washington, D.C., Southern California (including Los Angeles, Orange County and San Diego), San Francisco and Seattle, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. Through our ownership in these markets, we seek to optimize our portfolio by balancing risk and maximizing returns. We believe that this portfolio will allow us to produce more consistent cash flows in a volatile world where local market conditions may cause operating fundamentals to rapidly fluctuate. We believe our markets are knowledge centers of the U.S. economy that draw employers and their talented affluent workers that drive economic growth in the United States. We believe that both the locations of our properties and the cost of renting versus home ownership in these markets are attractive to these affluent knowledge workers (who often choose to rent for lifestyle reasons and due to a lack of home affordability) that we hope to convert into satisfied long-term residents.
We believe we have created an industry-leading operating platform and balance sheet to run our properties. Our employees are focused on delivering remarkable customer service to our residents so they will stay with us longer, be willing to pay higher rent for a great experience and will tell others about how much they love living in an Equity Residential property. We utilize technology and other innovative methods of engagement with our residents to foster relationships and community, improve the resident experience and operate our business more efficiently. We pair that with disciplined balance sheet management that enhances returns and value creation while maintaining flexibility to take advantage of future opportunities. We believe that our stakeholders value stability, liquidity, predictability and accountability and that is the mission to which we remain unwaveringly committed.
Demand to live in our apartment communities remains healthy and we believe that the long-term prospects for our business remain strong. Our business benefits from elevated single family home ownership costs which makes renting more attractive, positive household formation trends, residents choosing a rental lifestyle for greater flexibility in living arrangements and the overall deficit in housing across the country, especially in the areas in which we are investing. Our well-located communities provide an exceptional experience for our residents around dynamic cities that we believe will continue to attract long-term renters who are highly educated, well employed and earn high incomes.
Equity Residential is committed to creating communities where people thrive. We carry this, our corporate purpose, through our relationships with our customers, our employees, our shareholders and the communities in which we operate. It drives our commitments to sustainability, inclusion, the total wellbeing of our employees and being a responsible corporate citizen in the communities in which we operate.
Investment Strategy
The Company’s long-term strategy is to invest in apartment properties located in strategically targeted markets with the goal of generating consistent and superior risk-adjusted total returns by balancing current cash flow generation with long-term capital appreciation. We seek to meet this goal by investing in markets that are characterized by conditions favorable to multifamily property operations over the long-term. Our multi-pronged investment strategy featuring acquisitions, new stand-alone and expansion developments, densifying developments and accretive renovations of existing properties is focused on optimizing and balancing our portfolio in terms of location, including between our Established Markets and Expansion Markets and between urban and suburban submarkets within those markets. The markets we focus on generally feature one or more of the following characteristics that allow us to drive performance:
We also focus on resiliency/environmental and regulatory issues when choosing which markets/submarkets in which to concentrate our investment efforts. We conduct climate resilience analyses and assess the regulatory climate to identify potential risks and opportunities as part of our due diligence process for new acquisitions and developments, as well as potential markets for portfolio expansion. Resiliency and regulatory issues also factor into our decisions to dispose of certain properties and/or exit certain submarkets.
We believe our strategy capitalizes on the preference of renters of all ages to live in the locations where we operate which typically are near transportation (both public transit and convenient highway access), entertainment, employment centers/universities and cultural and outdoor amenities. Furthermore, we believe that demand for rental housing will continue to be driven primarily through household formations from the younger segments of our population, particularly Generation Z, while retaining Millennials for longer, and to a lesser extent, capturing the aging Baby Boomer generation.
8
The Company continues to allocate capital in order to optimize performance by balancing current cash flow growth with long-term capital appreciation. We have done so by adding Expansion Markets to our portfolio when certain submarkets in those markets meet many of the same characteristics listed above. Expansion into these markets includes investments in both urban and suburban properties in select submarkets and is generally being funded by reducing exposure to older or lower returning assets in selected Established Markets. We believe having a more balanced portfolio between urban and suburban and between our Established Markets and Expansion Markets, while remaining focused on serving a more financially resilient renter, will create the highest returns and lowest return volatility over time. Development also plays an important role in our capital allocation. Development activity is primarily focused on our strategic partnerships and joint ventures with third-party developers, as well as on our in-house redevelopment/densification of existing operating properties, located in both Established Markets and Expansion Markets. The Company remains committed to development as a driver of external growth but acknowledges its incremental risk, particularly in higher inflationary cost environments, when evaluating it as a method of expansion.
Competition
All of the Company’s properties are located in developed areas with multiple housing choices, including other multifamily properties. The number of competitive housing choices or multifamily properties in a particular area could have a material effect on the Company’s ability to lease apartment units at its properties and on the rents charged. The Company may be competing with other housing providers that have greater resources than the Company and whose managers have more experience than the Company’s managers. In addition, other forms of rental properties and single family housing provide housing alternatives to potential residents of multifamily properties. See Item 1A, Risk Factors, for additional information with respect to competition.
Operations and Innovation
We attempt to balance occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible cash flow generation to our shareholders. Our focus on operating efficiency and delivery of an exceptional resident living experience has driven strong Physical Occupancy and low Turnover while achieving strong renewal rate growth.
We deliver this performance through rapidly evolving technology and innovation that is increasingly prevalent in our industry. We have been and continue to be a leader in deploying and investing in property technology to serve our customers better and operate more efficiently. Having a history as a first mover in such important areas as online leasing, we are focused on technology that drives superior margins and improves customer experience. We use a standardized purchasing system to control our operating expenses and a business intelligence platform and other data analytics that allow our team members to quickly identify and address issues and opportunities. Many of these initiatives allow us to interact with our customers in a safe, responsible and convenient manner, including self-guided tours, automated responses to customer inquiries and enhanced service and maintenance management. While we believe areas such as “smart home” technology and others will provide the foundation for current and future improvements to how we do business, we will continue to consider the cost and longevity of technology capital investments and their benefits.
Our Commitment to Corporate Responsibility
At Equity Residential, corporate responsibility is integrated into every aspect of our business, as we aim to minimize environmental impact, manage climate and environmental risks and position the Company as an attractive investment. We prioritize robust governance and transparency, operating our assets efficiently, strategically and responsibly allocating capital and investing in innovative technologies and practices. We are focused on creating and maintaining a sustainable portfolio with properties that can withstand and adapt to the impacts of climate change, minimizing casualty loss risk and providing stable housing for our residents. We have a dedicated in-house team that initiates and applies sustainable practices in all aspects of our business, including investment activities, development, property operations and property management activities. Multifamily housing is one of the most environmentally-friendly uses of real estate, as each property provides homes for hundreds of families in a denser shared environment. We consider building locations based on walkability, accessibility, neighborhoods and communities. Our properties support amenities such as fitness centers and we select locations near retail shops, restaurants, outdoor amenities such as bike/running paths and health clubs, enabling a low carbon footprint lifestyle for our residents to live, work and play.
9
Equity Residential’s sustainability program actively manages environmental impacts and utility costs through optimized, financially responsible capital investments and technologies. We methodically focus on energy, water, waste and emissions to advance the program’s policies, targets and resilience outcomes as well as our shareholders' long-term financial interests. We believe that our approach will prepare us to operate in a low-carbon economy and drive long-term asset value while maintaining a commitment to good corporate citizenship and maximizing investment performance. Our expertise has shown that as real estate owners, developers and managers, we have the ability to make a positive impact on the environment while also enhancing our financial performance and strengthening our organization’s sense of purpose.
As detailed below, we are committed to our employees’ engagement, inclusion and wellness. We are committed to building a community where everyone belongs and diverse perspectives fuel creativity and innovation, shaping a workplace that is not only inclusive but also collaborative. We also recognize that a successful company must incorporate the best corporate governance practices to serve its stakeholders better. Consistent with the Company's purpose and commitment to corporate responsibility concepts in all aspects of its business, executive compensation includes a goal that focuses on corporate responsibility factors.
For additional information regarding our corporate responsibility efforts, see our 2024 Corporate Responsibility Report at our website, www.equityapartments.com, which includes third-party limited assurance covering some of the environmental metrics included in the report. The report was reviewed and approved by the Corporate Governance Committee of our Board of Trustees, which monitors the Company’s ongoing corporate responsibility efforts. The Corporate Responsibility Report is not part of or incorporated into this report. Furthermore, our annual proxy statements contain additional information on our corporate responsibility efforts, including detailed information regarding our corporate governance practices. Such annual proxy statements and the information contained therein are not part of or incorporated into this report, except as otherwise provided herein.
Human Capital
Our commitment to Human Capital starts with a highly skilled Board of Trustees that reflects a diverse range of thought and perspective. At Equity Residential, our team of approximately 2,500 employees is the driving force behind our continued success. Employees can grow, innovate and contribute to our shared goals, including our purpose of “Creating communities where people thrive.” This alignment of individual aspirations with our business goals creates a powerful partnership that drives innovation, excellence and lasting impact across our organization and industry. We believe it enhances employee job capabilities, advances our business and creates sustainable shareholder value.
Our approach focuses on engaging, motivating and rewarding employees, ensuring they feel valued and contribute their best. Built on a foundation of continuous learning and development, we have implemented programs that support career progression, enhance managerial capabilities and create a culture of collaboration and engagement. These efforts ensure that our workforce is well-prepared to meet today’s challenges and equipped to lead the future.
Talent Development, Attraction and Retention
10
Employee Engagement
Training and Development
Health, Total Rewards and Wellness
11
Regulatory Considerations
See Item 1A, Risk Factors, for information concerning the potential effects of governmental regulations, including environmental regulations, on our operations.
12
Item 1A. Risk Factors
This Item 1A includes forward-looking statements. You should refer to our discussion of the qualifications and limitations on forward-looking statements included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The occurrence of the events discussed in the following risk factors could adversely affect, possibly in a material manner, our business, financial condition or results of operations, which could affect the value of our common shares of beneficial interest or preferred shares of beneficial interest (which we refer to collectively as “Shares”), Preference Units, OP Units, restricted units and our public unsecured debt. In this section, we refer to the Shares, Preference Units, OP Units, restricted units and public unsecured debt together as our “securities” and the investors who own such securities as our “security holders.”
Risks Related to our Business Strategy
Investing in real estate is inherently subject to risks that could negatively impact our business.
Investing in real estate is subject to varying degrees and types of risk. While we seek to mitigate these risks through various strategies, including geographic diversification, market research and proactive asset management, among other techniques, these risks cannot be eliminated entirely. Factors that have in the past and may in the future impact cash flows and real estate values include, but are not limited to:
The geographic concentration of our properties could have an adverse effect on our operations.
While the Company continues to diversify its portfolio with the addition of the Expansion Markets, the Company’s properties are still predominantly concentrated in our Established Markets (generally within certain dense urban and suburban submarkets). If one or more of these markets is unfavorably impacted by specific geopolitical and/or economic conditions, local real estate conditions, increases in social unrest, increases in real estate and other taxes, reduced quality of life, deterioration of local or state government health, rent control or rent stabilization laws, other similar regulations, or localized environmental and climate issues, the impact of such conditions may have a more negative impact on our results of operations than if our properties were more geographically diverse. Additionally, to the extent that these markets or submarkets become less desirable to operate in, including changes in multifamily housing supply and demand, our results of operations could be more negatively impacted than if we were more diversified within our markets or invested in a greater number of markets.
Competition for housing may negatively affect operations and demand for the Company’s properties or residents.
Our properties face competition for residents from other existing or new multifamily properties, condominiums, single family homes and other living arrangements, whether owned or rental, that may attract residents from our properties or prospective residents that would otherwise choose to live with us. As a result, we may not be able to renew existing resident leases or enter into new resident leases, or if we are able to renew or enter into new leases, they may be at rates or terms that are less favorable than our current rates or terms, resulting in a material impact on our results of operations.
Additionally, our properties face competition for residents as a result of innovations in technology and amenities. Therefore, we may not be able to retain residents or attract new residents if we are unable to identify and cost effectively implement new, relevant technologies/amenities and keep up with constantly changing resident demand for the latest innovations in these areas.
The short-term nature of apartment leases exposes us more quickly to the effects of declining market rents, potentially making our results of operations and cash flows more volatile.
Generally, our residential apartment leases are for twelve months or less. If the terms of the renewal or releasing are less favorable than current terms, then the Company’s results of operations and financial condition could be negatively affected. Given our generally shorter-term lease structure, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. In addition, operating expenses associated with each property, such as real estate taxes, insurance, utilities, maintenance costs and employee wages and benefits, may not decline at all or decline at the same rate as revenues when circumstances might cause a reduction of those revenues at our properties.
Because real estate investments are illiquid, we may not be able to sell properties when appropriate.
Real estate investments often cannot be sold quickly due to regulatory constraints, market conditions or otherwise. As a result, we may not be able to reconfigure our portfolio, including the diversification of our portfolio into the Expansion Markets, as promptly as desired or as quickly in response to changing economic or other conditions. We may also be unable to consummate dispositions in a timely manner, on attractive terms, or at all. The capitalization rates/disposition yields at which properties may be sold could also be higher than historic rates, thereby reducing our potential proceeds from sale. In some cases, we may also determine that we will not recover the carrying amount of the property upon disposition, potentially causing an impairment charge. This inability to reallocate our capital promptly could negatively affect our financial condition, including our ability to make distributions to our security holders.
Competition may prevent us from acquiring properties on favorable terms.
We may not be successful in pursuing acquisition and development opportunities. We expect that other real estate investors will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development and acquisition efforts. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms.
Operations from new acquisitions, development projects and renovations may fail to perform as expected.
We intend to actively acquire, develop and renovate multifamily operating properties as part of our business strategy. Newly acquired, developed or renovated properties may not perform as we expect. We may overestimate the revenue (or underestimate the expenses) that these new or repositioned properties may generate. The occupancy and rental rates at these properties may also fail to meet our expectations for these investments. Land parcels acquired for development may lose significant value prior to the start of construction. Development and renovations are subject to even greater uncertainties and risks due to the complexities and lead time to build or complete these projects. We may also underestimate the costs to complete a development property or to complete a renovation.
Additionally, we have and may in the future acquire large portfolios of properties or companies that could increase our size and result in alterations to our capital structure. We may be unable to integrate the operations or accurately assess the liabilities of newly acquired large portfolios or companies and realize the anticipated synergies and other benefits or do so within the anticipated time frame.
Furthermore, we have in the past and may in the future decide to invest in new markets outside of our existing Established Markets by acquiring and/or developing properties in accordance with the Company's long-term investment strategy. Our historical experience in our Established Markets does not ensure that we will be able to operate successfully in new markets, should we choose to enter them. Entering into new markets may expose us to a variety of risks, including an inability to accurately evaluate local market conditions and local economies, to identify appropriate acquisition and/or development opportunities, to hire and retain key personnel and a lack of familiarity with local governmental regulations.
Construction risks on our development projects could affect our profitability.
We intend to continue to develop multifamily properties through both wholly owned and joint venture arrangements as part of our business strategy. Development often includes long planning and entitlement timelines, subjecting the projects to changes in market conditions. It can involve complex and costly activities, including significant environmental remediation or construction work in our markets. We have experienced and may continue to experience an increase in costs due to general disruptions that affect the cost of labor and/or materials, such as supply chain disruptions, trade disputes, tariffs, immigration issues, labor unrest, geopolitical conflicts or other factors that create inflationary pressures. We may abandon opportunities that we have already begun to explore for a number of reasons, and as a result, we may fail to recover costs already incurred in exploring those opportunities, potentially causing an impairment charge. We may also be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third-party permits and authorizations. These and other risks inherent in development projects, including the joint venture risks noted below, could result in increased costs or the delay or abandonment of opportunities.
14
We are subject to risks involved in real estate activity through joint ventures.
We currently, and may continue to in the future, develop and acquire properties in joint ventures with unrelated third parties. Joint ventures create risks including the following:
At times we have entered into agreements providing for joint and several liability with our partners. We have in the past and may in the future choose to guarantee part of or all of certain joint venture debt or to act as a lender to the joint venture itself. We and our respective joint venture partners may each have the right to trigger a buy-sell arrangement that could cause us to sell our interest, or acquire our partner's interest, at a time or price that is unfavorable to us. Each joint venture agreement is individually negotiated and our ability to operate, finance or dispose of properties and interests in such joint ventures in our sole discretion may be limited to varying degrees depending on the terms of the applicable joint venture agreement. To the extent we have commitments to, on behalf of or are dependent on any such off-balance sheet commitments, or if those commitments or their properties or leases are subject to material contingencies, our liquidity and financial condition could be adversely affected.
In some instances, our joint venture partners may also have competing interests or objectives that could create conflicts of interest similar to those noted above. These objectives may be contrary to our compliance with the REIT requirements, and our REIT status could be jeopardized if any of our joint ventures do not operate in compliance with those requirements. To the extent our partners do not meet their obligations to us or our joint ventures, or they take actions inconsistent with the interests of the joint venture, it could have a negative effect on our results of operations and financial condition, including distributions to our security holders.
We are subject to risks involved in activity through real estate technology and other real estate fund investments.
We have entered into, and may continue in the future to enter into, real estate technology and other real estate fund investments. Noncontrolling interests and passive investments are inherently risky because we have limited ability to influence business decisions. The managers of such investments have autonomy over the day-to-day operations of the business and may make business, financial or management decisions with which we do not agree or take risks or otherwise act in a manner that does not serve our interests. In addition, the market for the technologies or products these companies are developing are typically in the early stages and may not materialize to the expected scale, causing these companies to abandon, modify or alter their product, service or overall strategy. Further, there is no assurance that these companies can obtain additional capital or resources, generate sufficient cash flow to sustain operations and successfully execute their strategy or that their equity will become sufficiently liquid for us to effectively monetize our investment. The performance of these investments may also rely on the services of a limited number of key individuals, the loss of whom could significantly adversely affect such investments’ performance. As a result, we may recognize an impairment of our investment or be unable to sell or otherwise monetize any of the investments we have acquired or may acquire in the future.
We are subject to risks related to our properties that are subject to ground leases.
We have entered into, and may continue in the future to enter into, long-term ground leases with respect to assets that may restrict our ability to finance, sell or otherwise transfer our interests in these properties, limit our use and expose us to loss of the properties if such agreements are breached by us or terminated. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to operate the properties. In addition, as we get closer to the lease termination dates, the values of the properties could decrease if we are unable to agree upon an extension of the lease with the lessor. Certain of these ground leases have payments subject to annual escalations and/or periodic fair market value adjustments which could adversely affect our financial condition or results of operations.
15
We face certain risks related to our Non-Residential operating activities.
The Non-Residential space (includes retail and public parking garage operations) at our properties primarily serves as an additional amenity for our residents and neighbors. The longer-term nature of our Non-Residential leases (generally five to ten years with market based renewal options) and the characteristics of many of our Non-Residential tenants (generally small, local businesses) may subject us to certain risks. We may not be able to lease new space for rents that are consistent with our projections or for market rates. Also, when leases for our existing Non-Residential space expire or are otherwise terminated, the space may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms. The presence of competitive alternatives and other market conditions (including online shopping) may affect our ability to lease our Non-Residential space and impact the level of rents we can obtain. If our Non-Residential tenants experience financial distress or bankruptcy, they may fail to comply with their contractual obligations, seek concessions, such as rent abatements and deferrals, in order to continue operations or cease their operations, any or all of which could lead us to record a non-cash write-off of a tenant's straight-line rent receivable (like we did in 2023 due to the Rite Aid bankruptcy) and could adversely impact our results of operations and financial condition.
The Company’s real estate assets may be subject to impairment charges.
A decline in the fair value of our assets may require us to recognize an impairment against our assets under accounting principles generally accepted in the United States (“GAAP”) if we were to determine that, with respect to any assets in unrealized loss positions, we do not have the ability and intent to hold such assets for a period of time sufficient to allow for recovery of the depreciated cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write-down the depreciated cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted depreciated cost of such assets at the time of sale. If we are required to recognize material asset impairment charges, these charges could adversely affect our financial condition and results of operations.
Corporate responsibility, specifically related to sustainability efforts, may impose additional costs and expose us to new risks.
Corporate responsibility evaluations remain highly important to some investors and other stakeholders. Certain organizations that provide corporate governance and other corporate risk advisory services to investors have developed scores and ratings to evaluate companies and investment funds based upon corporate responsibility metrics. Many investors focus on corporate responsibility-related business practices and scores when choosing to allocate their capital and may consider a company's score as a reputational or other factor in making an investment decision. Government regulators' and investors' increased focus and activism related to corporate responsibility and similar matters may constrain our business operations or increase expenses or capital expenditures. In addition, investors may decide to refrain from investing in us as a result of their assessment of our approach to and consideration of corporate responsibility factors. We may face reputational damage in the event our corporate responsibility procedures or standards do not meet the standards set by various constituencies. In addition, the criteria by which companies are rated for their efforts may change, which could cause us to receive different scores than in previous years. Our rating could result in a negative perception of the Company, exclusion of our securities from consideration by certain investors who may elect to invest with our competition instead and/or cause investors to reallocate their capital away from the Company, all of which could have an adverse impact on the price of our securities.
Our various technology-related initiatives to improve our operating margins and customer experience may fail to perform as expected.
We have developed and may continue to develop initiatives that are intended to serve our customers better and operate more efficiently, including “smart home” technology and self-service options that are accessible to residents through smart devices or otherwise. Such initiatives have involved and may involve our employees having new or different responsibilities and processes with which they may be unfamiliar. We may incur significant costs and divert resources in connection with such initiatives, and these initiatives may not perform as expected, which could adversely affect our business, results of operations, cash flows and financial condition.
Risks Related to our Financing Strategy and Capital Structure
Disruptions in the financial markets could hinder our ability to obtain debt and equity financing and impact our acquisitions and dispositions.
Dislocations and disruptions in capital markets could result in increased costs or lack of availability of debt financing (including under our commercial paper program) and equity financing. This includes any disruptions that may occur as a result of the potential
16
privatization of the currently government sponsored organizations, Fannie Mae and Freddie Mac. Such events may affect our ability to refinance existing debt, require us to utilize higher cost alternatives and/or impair our ability to adjust to changing economic and business conditions. Capital market disruptions have and could continue to negatively impact our ability to make acquisitions or make it more difficult or not possible for us to sell properties or may unfavorably affect the price we receive for properties that we do sell. Such disruptions could cause the price of our securities to decline.
Changes in market conditions and volatility of share prices could decrease the market price of our Common Shares.
The stock markets, including the New York Stock Exchange on which we list our Common Shares, have experienced significant price and volume fluctuations over time, including in recent years. As a result, the market price of our Common Shares has been and could continue to be similarly volatile. Investors in our Common Shares consequently may experience a decrease in the value of their shares, including decreases due to this volatility and not necessarily related to our operating performance or prospects. Additionally, the market price of our Common Shares may decline or fluctuate significantly in response to the sale of substantial amounts of our Common Shares, or the anticipation of the sale of such shares, by large holders of our securities, as well as our inclusion or exclusion from stock indices. The issuance of additional Common Shares by the Company, or the perception that such issuances might occur, could also cause significant volatility and decreases in the value of our shares. Continuing high interest rates can also negatively impact the value of our Common Shares, not just through higher interest expense on our debt, but also as investors and markets discount our earnings more and/or assume slower growth in earnings.
Our financial counterparties may not perform their obligations.
Disruptions in financial and credit markets or other events could impair the ability of our counterparties to perform under their contractual obligations to us. There are multiple financial institutions that are individually committed to provide borrowings under our revolving credit facility and to pay us amounts due under various interest rate derivative agreements. Should any of these institutions fail to perform their obligations when contractually required, our financial condition could be adversely affected.
Rising interest rates can increase costs and impact the value of the Company’s assets.
The Company is exposed to market risk from financial instruments primarily from changes in market interest rates. Such risks derive from the refinancing of debt at or prior to maturity, from exposure to interest rate fluctuations on floating rate debt and from derivative instruments utilized to swap fixed rate debt to floating rates or to hedge rates in anticipation of future debt issuances. Rising interest rates increased and may continue to increase our interest expense and the costs of refinancing existing debt. Higher interest rates also increased and could continue to increase capitalization rates, which may lead to reduced valuations of the Company’s assets.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
From time to time when we anticipate issuing debt securities, we may seek to limit our exposure to fluctuations in interest rates during the period prior to the pricing of the securities by entering into interest rate hedging contracts. Also, from time to time we may rely on interest rate hedging contracts to limit our exposure under variable rate debt to unfavorable changes in market interest rates. The settlement of interest rate hedging contracts may involve material charges. In addition, our use of interest rate hedging arrangements may expose us to additional risks, including a risk that a counterparty to a hedging arrangement may default on the contract. There can be no assurance that our hedging activities will be effective and have the desired beneficial impact on our results of operations or financial condition.
Insufficient cash flow could affect our ability to service existing debt and create refinancing risk.
We are subject to risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments. We may not be able to refinance existing debt and if we can, the terms of such refinancing may be less favorable than the terms of existing indebtedness. Our inability to refinance, extend or repay debt with proceeds from other capital market transactions would negatively impact our financial condition. If the debt is secured, the mortgage holder may also foreclose on the property.
A significant downgrade in our credit ratings could adversely affect our performance.
A significant downgrade in our credit ratings, while not affecting our ability to draw proceeds under the Company’s revolving credit facility, would cause the corresponding borrowing costs to increase, impact our ability to borrow secured and unsecured debt, and potentially impair our ability to access the commercial paper market or otherwise limit our access to capital. In addition, a downgrade below investment grade would likely cause us to lose access to the commercial paper market and would require us to post cash collateral
17
and/or letters of credit in favor of some of our secured lenders to cover our self-insured property and liability insurance deductibles or to obtain lower deductible insurance compliant with the lenders’ requirements at the lower ratings level.
Financial covenants could limit operational flexibility and affect our overall financial position.
The terms of our credit agreements, including our revolving credit facility and the indentures under which a substantial portion of our unsecured debt was issued, require us to comply with a number of financial covenants. These covenants may limit our flexibility to run our business and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness and trigger a cross default of other debt.
Some of our properties are financed with tax-exempt bonds or otherwise contain restrictive covenants or deed restrictions, including affordability requirements, which limit income from certain properties. The Company monitors compliance with the restrictive covenants and deed restrictions that affect these properties. While we generally believe that the interest rate benefit from financing properties with tax-exempt bonds more than outweighs any loss of income due to restrictive covenants or deed restrictions, this may not always be the case. Some of these requirements are complex, and our failure to comply with them may subject us to material fines or liabilities.
We may change the dividend policy for our securities in the future.
The decision to declare and pay dividends on our securities, as well as the timing, amount and composition of any such future dividends, is at the discretion of the Board of Trustees and will depend on actual and projected financial conditions, the Company’s actual and projected liquidity and operating results, the Company’s projected cash needs for capital expenditures and other investment activities and such other factors as the Company’s Board of Trustees deems relevant. The Board of Trustees may modify our dividend policy from time to time and any change in our dividend policy could negatively impact the market price of our securities.
Issuances or sales of our Common Shares or Units may be dilutive.
Any additional issuance of Common Shares (including those issued under our At-The-Market ("ATM") program) or Units would reduce the percentage of our Common Shares and Units owned by existing investors. In some circumstances, shareholders and unitholders will not be entitled to vote on whether or not we issue additional Common Shares or Units. In addition, depending on the terms and pricing of additional offerings of our Common Shares or Units along with the value of our properties, our shareholders and unitholders could experience dilution in both the book value and fair value of their Common Shares or Units, as well as dilution in our actual and expected earnings per share, funds from operations (“FFO”) per share and Normalized FFO per share.
Regulatory and Tax Risks
The adoption of, or changes in, rent control or rent stabilization regulations and eviction restrictions could have an adverse effect on our operations and property values.
In part due to increasing pressure from advocacy groups, a growing number of state and local governments have enacted and may continue to consider enacting and/or expanding rent control, rent stabilization, eviction moratoriums or other regulations that restrict the methods and strategies by which we operate our business. In addition, the federal government has recently considered imposing rent regulations on multifamily properties secured by government-sponsored debt. These regulations specifically and/or effectively limit or could continue to limit our ability to raise rents or charge certain fees (either of which could have a retroactive effect), enforce residents’ or tenants’ contractual rent obligations or pursue collections, all of which could have an adverse impact on our operations and property values.
Compliance or failure to comply with regulatory requirements could result in substantial costs.
Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements, building and zoning codes, environmental and other related regulations, and federal, state and local accessibility requirements, including and in addition to those imposed by the Americans with Disabilities Act and the Fair Housing Act. Noncompliance could result in fines, subject us to lawsuits and require us to remediate or repair the noncompliance. Existing requirements could change and compliance with future requirements may require significant unanticipated expenditures that could adversely affect our financial condition or results of operations.
Further, laws and regulations at the federal, state and local level requiring climate-related disclosures, including the rules proposed by the SEC and the legislation recently enacted in the State of California, may increase compliance and data collection costs if and/or when such laws and regulations become effective.
18
Environmental problems are possible and can be costly.
Federal, state and local laws and regulations relating to the protection of the environment may require current or previous owners or operators of real estate to investigate and clean up hazardous or toxic substances at such properties. The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination. These laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. Third parties may also sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site. We cannot be assured that existing environmental assessments of our properties reveal all environmental liabilities, that any prior owner of any of our properties did not create a material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any of our properties.
Changes in U.S. accounting standards may materially and adversely affect the reporting of our operations.
The Company follows GAAP, which is established by the Financial Accounting Standards Board (“FASB”), an independent body whose standards are recognized by the SEC as authoritative for publicly held companies. The FASB and the SEC create and interpret accounting standards and may issue new accounting pronouncements or change the interpretation and application of these standards that govern the preparation of our financial statements. These changes could have a material impact on our reported consolidated results of operations and financial position.
Any weaknesses identified in our internal control over financial reporting could result in a decrease of our share price.
Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have a negative impact on our share price.
Our failure to qualify as a REIT would have serious adverse consequences to our security holders.
We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements, for which there is limited judicial and administrative interpretation, however, are highly technical and complex. Therefore, we cannot guarantee that we have qualified or will qualify as a REIT in the future. The determination that we are a REIT requires an analysis of various factual matters that may not be totally within our control. To qualify as a REIT, our assets must be substantially comprised of real estate assets as defined in the Internal Revenue Code of 1986, as amended (the “Code”), and related guidance and our gross income must generally come from rental and other real estate or passive related sources that are itemized in the REIT tax laws. We are also required to distribute to security holders at least 90% of our REIT taxable income excluding net capital gains.
If we fail to qualify as a REIT, we would be subject to U.S. federal income tax at regular corporate rates and would have to pay significant income taxes unless the Internal Revenue Service (“IRS”) granted us relief under certain statutory provisions. In addition, we would remain disqualified from taxation as a REIT for four years following the year in which we failed to qualify as a REIT. We would therefore have less money available for investments or for distributions to security holders and would no longer be required to make distributions to security holders. This would likely have a significant negative impact on the value of our securities.
In addition, we own and may in the future own additional interests in subsidiary entities that have elected or will elect to be taxed as REITs. As such, each must separately satisfy all of the requirements to qualify for REIT status. If a subsidiary REIT did not satisfy such requirements, and certain relief provisions did not apply, it would be taxed as a regular corporation and its income would be subject to U.S. federal income taxation. Failure to comply with these complex REIT rules at the subsidiary REIT level can have a material and detrimental impact to EQR’s REIT status.
Gain on disposition of assets held for sale in the ordinary course of business is subject to 100% tax.
Any gain resulting from transfers of properties we hold as inventory or primarily for sale to customers in the ordinary course of business is treated as income from a prohibited transaction subject to a 100% penalty tax unless certain safe harbor exceptions set forth in the Code apply. We do not believe that our transfers or disposals of property are prohibited transactions. However, whether property is held for investment purposes is a question that depends on all the facts and circumstances surrounding the particular transaction. The IRS may contend that certain transfers or dispositions of properties by us or contributions of properties are prohibited transactions. While we believe the IRS would not prevail in any such dispute, if the IRS were to argue successfully that a transfer or disposition of property constituted a prohibited transaction, we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT.
19
We may be subject to legislative or regulatory tax changes that could negatively impact our financial condition.
At any time, U.S. federal income tax laws governing REITs or impacting real estate or the administrative interpretations of those laws may be enacted or amended. We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, IRS and U.S. Department of Treasury regulations or other administrative guidance, will be adopted or become effective and any such law, regulation or interpretation may take effect retroactively. The Company and our shareholders could be negatively impacted by any such change in, or any new, U.S. federal income tax law, regulations or administrative guidance.
Distribution requirements may limit our flexibility to manage our portfolio.
In order to maintain qualification as a REIT under the Code, a REIT must annually distribute to its shareholders at least 90% of its REIT taxable income, excluding the dividends paid deduction and net capital gains. To the extent the REIT does not distribute all of its net capital gain, or distributes at least 90%, but less than 100% of its REIT taxable income, it will be required to pay regular U.S. federal income tax on the undistributed amount at corporate rates. In addition, we will be subject to a 4% nondeductible excise tax on amounts, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our net capital gains and 100% of our undistributed income from prior years. We may not have sufficient cash or other liquid assets to meet the 90% distribution requirement. We may be required from time to time, under certain circumstances, to accrue as income for tax purposes interest and rent earned but not yet received. We may incur a reduction in tax depreciation without a reduction in capital expenditures. Difficulties in meeting the 90% distribution requirement might arise due to competing demands for our funds or due to timing differences between tax reporting and cash distributions, because deductions may be disallowed, income may be reported before cash is received, expenses may have to be paid before a deduction is allowed or because the IRS may make a determination that adjusts reported income. In addition, gain from the sale of property may exceed the amount of cash received on a leverage-neutral basis. A substantial increase to our taxable income may reduce the flexibility of the Company to manage its portfolio through dispositions of properties other than through tax deferred transactions, such as Section 1031 exchanges, or cause the Company to borrow funds or liquidate investments on unfavorable terms in order to meet these distribution requirements. If we do not dispose of our properties through tax deferred transactions, we may be required to distribute the gain proceeds to shareholders or pay income tax. If we fail to satisfy the 90% distribution requirement and are unable to cure the deficiency, we would cease to be taxed as a REIT, resulting in substantial tax-related liabilities.
We have a share ownership limit for REIT tax purposes.
To remain qualified as a REIT for U.S. federal income tax purposes, not more than 50% in value of our outstanding Shares may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of any year. To facilitate maintenance of our REIT qualification, our Declaration of Trust, subject to certain exceptions, prohibits ownership by any single shareholder of more than five percent of the lesser of the number or value of any outstanding class of common or preferred shares (the “Ownership Limit”). Absent an exemption or waiver granted by our Board of Trustees, securities acquired or held in violation of the Ownership Limit will be transferred to a trust for the exclusive benefit of a designated charitable beneficiary, and the security holder’s rights to distributions and to vote would terminate. A transfer of Shares may automatically be deemed void if it causes a person to violate the Ownership Limit. The Ownership Limit could delay or prevent a change in control and, therefore, could affect our security holders’ ability to realize a premium over the then-prevailing market price for their Shares. To reduce the ability of the Board to use the Ownership Limit as an anti-takeover device, the Company’s Ownership Limit requires, rather than permits, the Board to grant a waiver of the Ownership Limit if the individual seeking a waiver demonstrates that such ownership would not jeopardize the Company’s status as a REIT.
Tax elections regarding distributions may impact future liquidity of the Company or our shareholders.
Under certain circumstances we have made and/or may consider making in the future, a tax election to treat certain distributions to shareholders made after the close of a taxable year as having been distributed during such closed taxable year. This election, which is provided for in the Code, may allow us to avoid increasing our dividends or paying additional income taxes in the current year. However, this could result in a constraint on our ability to decrease our dividends in future years without creating risk of either violating the REIT distribution requirements or generating additional income tax liability. In addition, the Company may be required to pay interest to the IRS based on such a distribution.
In order to retain liquidity and continue to satisfy the REIT distribution requirements, the Company could issue shares rather than pay a dividend entirely in cash to shareholders. The IRS has published several rulings which have allowed REITs to offer shareholders the choice between shares or cash as a form of payment of a dividend (an “elective stock dividend”). However, REITs are generally required to structure the cash component to be no less than 20% of the total dividend paid. Therefore, it is possible that the total tax burden to shareholders resulting from an elective stock dividend may exceed the amount of cash received by the shareholder.
Certain provisions of Maryland law could inhibit changes in control.
Certain provisions of Maryland law applicable to REITs prohibit “business combinations” (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding securities, or with an affiliate
20
who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the Company’s outstanding voting securities (an “Interested Shareholder”), or with an affiliate of an Interested Shareholder. These prohibitions last for five years after the most recent date on which the Interested Shareholder became an Interested Shareholder. After the five-year period, a business combination with an Interested Shareholder must be approved by two super-majority shareholder votes unless, among other conditions, holders of common shares receive a minimum price for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Shareholder for its common shares.
General Risk Factors
Risk of Pandemics or Other Health Crises.
Pandemics, epidemics or other health crises or public emergencies have and could in the future disrupt our business. Both global and locally targeted health events could materially affect areas where our properties, corporate/regional offices or major service providers are located. These events have and could in the future have an adverse effect on our business, results of operations, financial condition and liquidity, which could also heighten many of the other risks described elsewhere in this Item 1A, Risk Factors.
Significant inflation could negatively impact our business.
Substantial inflationary pressures can adversely affect us by disproportionately increasing the costs of land, materials, labor and other costs needed to operate our business. In a highly inflationary environment, we may not be able to raise rental rates at or above the rate of inflation, which could reduce our profit margins. If we are unable to increase our rental prices to offset the effects of inflation, our business, results of operations, cash flows and financial condition could be adversely affected. In addition, interest rate increases enacted to combat inflation have caused market disruption and could continue to prevent us from acquiring or disposing of assets on favorable terms or at all.
The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our reputation and business relationships, all of which could negatively impact our financial results.
A cybersecurity incident is an unauthorized occurrence, or a series of related unauthorized occurrences, on or conducted through the Company's information systems that jeopardizes the confidentiality, integrity or availability of our information systems or any information residing therein. These events can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information, including information regarding our residents, prospective residents, employees and employees’ dependents.
Despite system redundancy, the implementation of security measures, required employee awareness training and the existence of a disaster recovery plan, our information technology systems, including those maintained by third-party vendors with which we do business, are vulnerable to damage and interruption from any number of sources beyond our control, including energy blackouts, natural disasters, terrorism, geopolitical events, telecommunication failures and cyber attacks. We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, phishing attempts, social engineering, ransomware or other scams, persons inside our organization or persons/vendors with access to our systems and other significant disruptions of our information technology networks and related systems, including property infrastructure. These risks have increased due to increased reliance on remote working and other electronic interactions with our current and prospective residents. Our information technology networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations. We use these systems to manage our resident and vendor relationships, internal communications, accounting and record-keeping systems and many other key aspects of our business. Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks, which also depend on the strength of our procedures and the effectiveness of our internal controls as well as those of vendors with whom we do business. Even the most well-protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
We may periodically collect and store personally identifiable information of our residents and prospective residents in connection with our leasing activities, and we may collect and store personally identifiable information of our employees and their dependents. In addition, we often engage third-party service providers that may have access to such personally identifiable information in connection with providing necessary information technology, security and other business services to us. Despite the fact that we monitor and perform a comprehensive review of businesses that we contract with that represent a cybersecurity risk to the organization, the systems of these third-party service providers may contain defects in design or other problems that could unexpectedly compromise personally
21
identifiable information or lead to other types of cyber breaches. Although we make efforts to maintain the security and integrity of our information technology networks and those of our third-party providers and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
A breach or significant and extended disruption in the function of our systems, including our primary website, could damage our reputation and cause us to lose residents and revenues, result in a violation of applicable privacy and other laws, generate third-party claims, result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personally identifiable and confidential information and require us to incur significant expenses to address and remediate or otherwise resolve these kinds of issues. We may not be able to recover these expenses in whole or in any part from our service providers, our insurers or any other responsible parties. Our insurance coverage may not be sufficient to cover all losses related to cybersecurity incidents. As a result, there can be no assurance that our financial results would not be negatively impacted.
We are also subject to laws, rules, and regulations in the United States, such as the California Privacy Rights Act (“CPRA”), relating to the collection, use, and security of resident, tenant, employee and other data. Evolving compliance and operational requirements under the CPRA and the privacy laws of other jurisdictions in which we operate may impose significant costs that are likely to increase over time. Our failure to comply with laws, rules and regulations related to privacy and data protection could harm our business or reputation or subject us to fines and penalties.
Our business and operations rely on specialized information technology systems, the failure of or inadequacy of which could impact our business.
Our ability to identify, implement and maintain appropriate information technology systems differentiates and creates competitive advantages for us in the operations of our business. These systems often are developed and hosted by third-party vendors whom we rely upon for ongoing maintenance, upgrades and enhancements. While we maintain a rigorous process around selecting appropriate information technology systems and partnering with vendors, our failure to adequately do so could negatively impact our operations and competitive position.
Our approach to artificial intelligence may not be successful and could adversely affect our business.
We have incorporated and may continue to incorporate the use of generative artificial intelligence ("AI") within our business, and these solutions and features may become more important to our operations or to our future growth over time. Our research and development of AI remains ongoing. There can be no assurance that we will realize the desired or anticipated benefits, or any benefits, and we may fail to properly implement such technology. AI presents risks, challenges and unintended consequences that could affect our adoption and use of this technology. Our competitors or other third parties may incorporate AI in their business operations more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally, the complex and rapidly evolving landscape around AI may expose us to claims, demands and proceedings by private parties and regulatory authorities and subject us to legal liability as well as reputational harm.
We depend on our key personnel.
We depend on the efforts of our trustees and executive officers. If one or more of them resign or otherwise cease to be employed by us, our business and results of operations and financial condition could be adversely affected.
Litigation risk could affect our business.
We are involved and may continue to be involved in legal proceedings, claims, class actions, inquiries and governmental investigations in the ordinary course of business. These legal proceedings may include, but are not limited to, proceedings related to consumer, shareholder, securities, antitrust, employment, environmental, development, condominium conversion, tort, eviction and commercial legal issues. Litigation can be lengthy and expensive, and it can divert management's attention and resources. Results cannot be predicted with certainty, and an unfavorable outcome in litigation could result in liability material to our financial condition or results of operations. See Item 3, Legal Proceedings, for additional discussion.
Insurance policies can be costly and may not cover all losses, which may adversely affect our financial condition or results of operations.
The Company’s property, general liability and workers compensation insurance policies provide coverage with substantial per occurrence deductibles and/or self-insured retentions. These self-insurance retentions can be a material portion of insurance losses in
22
excess of the base deductibles. While the Company has previously purchased incremental insurance coverage in the event of multiple non-catastrophic occurrences within the same policy year, these substantial deductible and self-insured retention amounts do expose the Company to greater potential for uninsured losses and this additional coverage may not be available at all or on commercially reasonable terms in the future. We believe the policy specifications and insured limits of these policies are adequate and appropriate; however, we may not always be able to place the desired amount of third-party coverage due to a significant increase in insurance premiums and deductibles or a decrease in the availability of coverage, a combination of which have exposed and could further expose the Company to uninsured losses. As a result, our financial results could be adversely affected and may vary significantly from period to period.
The Company relies on third-party insurance providers for its property, general liability, workers compensation and other insurance, and should any of them experience liquidity issues or other financial distress, it could negatively impact their ability to pay claims under the Company’s policies.
Earthquake risk: Our policies insuring against earthquake losses have substantial deductibles which are applied to the values of the buildings involved in the loss. With the geographic concentration of our properties, a single earthquake affecting a market may have a significant negative effect on our financial condition and results of operations, as well as insurers' ability to pay claims. We cannot assure that an earthquake would not cause damage or losses greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property or market, as well as anticipated future revenue.
Terrorism risk: The Company has terrorism insurance coverage which excludes losses from nuclear, biological and chemical attacks. In the event of a terrorist attack impacting one or more of our properties, we could lose the revenues from the property, our capital investment in the property and possibly face liability claims from residents or others suffering injuries or losses.
Catastrophic weather and natural disaster risk: Our properties may be located in areas that could experience catastrophic weather and other natural disasters from time to time, including wildfires, snow or ice storms, hail, windstorms or hurricanes, drought, flooding or other severe disasters. These severe weather and natural disasters could cause substantial damages or losses to our properties which may not be covered or could exceed our insurance coverage. Exposure to this risk could also result in a decrease in demand for properties located in these areas or affected by these conditions.
Climate change risk: To the extent that significant changes in the climate occur in areas where our properties are located, we may experience severe weather, which may result in physical damage to or decrease the demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material in nature, significant property damage or destruction of our properties could result. Our financial condition or results of operations may be adversely affected. In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could adversely impact the value of our properties or result in increased capital expenditures or operating expenses on our existing properties and our new development properties.
Provisions of our Declaration of Trust and Bylaws could inhibit changes in control.
Certain provisions of our Declaration of Trust and Bylaws may delay or prevent a change in control of the Company or other transactions that could provide the security holders with a premium over the then-prevailing market price of their securities or which might otherwise be in the best interest of our security holders. This includes the Ownership Limit described above. While our existing preferred shares/preference units do not have all of these provisions, any future series of preferred shares/preference units may have certain voting provisions that could delay or prevent a change in control or other transactions that might otherwise be in the interest of our security holders. Our Bylaws require certain information to be provided by any security holder, or persons acting in concert with such security holder, who proposes business or a nominee at an annual meeting of shareholders, including disclosure of information related to hedging activities and investment strategies with respect to our securities. These requirements could delay or prevent a change in control or other transactions that might otherwise be in the interest of our security holders. The Board of Trustees may use its powers to issue preferred shares and to set the terms of such securities to delay or prevent a change in control of the Company even if a change in control were in the interest of the security holders.
23
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk management and strategy
We have an enterprise-wide information security program designed to protect our information systems from cybersecurity threats. We identify and assess risks from cybersecurity threats by monitoring and evaluating our digital assets and our risk profile using various methods. We monitor security events that are internally discovered or externally reported that may affect our systems and have processes and procedures to assess those events for potential cybersecurity impact or risk and consequently improve our security measures and planning. Additionally, we work with third parties from time to time that assist us in refining our cybersecurity risk strategy in order to identify, assess and manage cybersecurity risks, including professional services firms and consulting firms. We seek to detect and investigate unauthorized attempts and attacks against our network and services, and to minimize their occurrence and recurrence through changes or updates to our internal processes and tools and changes or updates to our services; however, we remain potentially vulnerable to known or unknown threats.
Our cybersecurity incident response processes are designed to escalate certain cybersecurity events to members of management depending on the circumstances. Key members of management, including representatives from information technology ("IT"), operations, legal, finance, risk management and internal audit, serve on the Company’s senior security incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified, and certain cybersecurity incidents are escalated to the Company’s executives. In addition, the Company’s incident response processes include potential reporting to the Audit Committee of our Board of Trustees for certain cybersecurity incidents.
We also have a third-party risk management program in place to manage cybersecurity risks associated with third-party service providers. While we do maintain processes and procedures to identify, prioritize and assess risks associated with third-party service providers, we must rely on third parties to augment our security program, and we cannot ensure in all circumstances that their efforts will be successful.
While to date we have not experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future. Any significant disruption to our systems could adversely affect our business and results of operations. Further, a cyber incident impacting our systems or a third-party’s systems could subject us to business, regulatory, litigation and reputational risk, which could have a negative effect on our business, financial condition and results of operations.
Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. See Item 1A, Risk Factors, for a discussion of cybersecurity risks.
Governance
Our Information Technology Security Team, under the oversight of our Senior Vice President and Chief Technology Officer and the leadership of our VP of IT Infrastructure and Security, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response. The Information Technology Security Team manages and continually enhances a robust enterprise security structure with the ultimate goal of minimizing cybersecurity incidents to the extent feasible, while simultaneously increasing our system resilience in an effort to minimize the business impact should an incident occur. Our Information Technology Security Team possesses decades of experience in navigating cybersecurity threats and mitigating associated risks as a result of holding similar positions at other large companies. Most members of the team hold degrees in cybersecurity and/or related disciplines, have cybersecurity certifications such as Certified Information Systems Security Professional (CISSP) and/or periodically attend various cyber-focused conferences and training programs. Specifically, our Senior Vice President and Chief Technology Officer and our VP of IT Infrastructure and Security combined have over 30 years of technology and cybersecurity experience. The team provides regular reports to senior management and affected departments on various cybersecurity threats, assessments and findings.
The Audit Committee of our Board of Trustees oversees our annual enterprise risk management assessment, where we assess key risks within the Company, including security and technology risks and cybersecurity threats. The Audit Committee oversees our ongoing cybersecurity risk management efforts and regularly receives detailed reports from representatives of our Information Technology Security Team addressing a wide range of related topics. At least annually, our IT leadership (and external cybersecurity experts if applicable) reviews key cybersecurity strategies and policies with the full Board of Trustees, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends and other areas of importance.
Item 2. Properties
As of December 31, 2024, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 311 properties located in 10 states and the District of Columbia consisting of 84,249 apartment units. See Item 1, Business, for additional information regarding the Company’s properties and the markets/metro areas upon which we are focused. The Company’s properties are summarized by building type in the following table:
Type
Apartment Units
AverageApartment Units
Garden
95
26,087
275
Mid/High-Rise
216
58,162
269
311
84,249
271
Garden is generally defined as properties with two and/or three story buildings while mid/high-rise is generally defined as properties with greater than three story buildings. These two property types typically provide residents with amenities, such as rooftop decks and swimming pools, fitness centers and community rooms. In addition, many of our urban properties have non-residential components, such as parking garages and/or retail spaces.
The Company’s properties are summarized by ownership type in the following table:
Wholly Owned Properties
295
80,331
Partially Owned Properties – Consolidated
2,656
Partially Owned Properties – Unconsolidated
1,262
The following table sets forth certain information by market relating to the Company’s properties at December 31, 2024:
Portfolio Summary
Markets/Metro Areas
ApartmentUnits
% ofStabilizedBudgetedNOI
AverageRentalRate
Established Markets:
Los Angeles
58
14,733
16.7
%
$
2,942
Orange County
3,718
4.7
2,949
San Diego
2,649
3.7
3,189
Subtotal – Southern California
81
21,100
25.1
2,974
Washington, D.C.
43
13,846
15.1
2,788
San Francisco
40
11,315
14.8
3,351
New York
34
8,536
14.1
4,690
Boston
7,237
11.3
3,643
Seattle
8,854
9.9
2,636
Subtotal – Established Markets
267
70,888
90.3
3,232
Expansion Markets:
Denver
4,408
4.0
2,369
Atlanta
4,356
3.1
2,020
Dallas/Ft. Worth
3,855
2.3
1,965
Austin
742
0.3
1,754
Subtotal – Expansion Markets
44
13,361
9.7
2,105
Total
100.0
3,056
Note: Projects under development are not included in the Portfolio Summary until construction has been completed.
The following tables provide a rollforward of the apartment units included in Same Store Properties (please refer to the Definitions section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations) and a reconciliation of apartment units included in Same Store Properties to those included in Total Properties for the year ended December 31, 2024:
December 31, 2024
Same Store Properties at December 31, 2023
288
76,297
2021 acquisitions (not stabilized until 2022)
1
421
2022 acquisitions
172
2024 dispositions (1)
(13
)
(2,598
Lease-up properties stabilized (1)
986
Other
—
Same Store Properties at December 31, 2024
281
75,299
Same Store
Non-Same Store:
2024 acquisitions
5,373
2023 acquisitions
1,183
Properties removed from same store (2)
819
Lease-up properties not yet stabilized (3)
1,574
Total Non-Same Store
8,950
Total Properties and Apartment Units
Note: Properties are considered “stabilized” when they have achieved 90% Physical Occupancy for three consecutive months. Properties are included in same store when they are stabilized for all of the current and comparable periods presented.
26
For the year ended December 31, 2024, the Company’s same store Physical Occupancy was 96.2% and its total portfolio-wide Physical Occupancy, which includes completed development properties in various stages of lease-up, was 96.0%. Certain of the Company’s properties are encumbered by mortgages and additional detail can be found on Schedule III – Real Estate and Accumulated Depreciation.
The properties in various stages of development and lease-up at December 31, 2024 are included in the following table:
Development and Lease-Up Projects as of December 31, 2024
(Amounts in thousands except for project and apartment unit amounts)
Estimated/Actual
Projects
Location
OwnershipPercentage
No. ofApartmentUnits
TotalBudgeted CapitalCost
TotalBook Valueto Date
TotalDebt (1)
PercentageCompleted
StartDate
Initial Occupancy
CompletionDate
StabilizationDate
PercentageLeased / Occupied
CONSOLIDATED:
Projects Under Development:
Lorien (fka Laguna Clara II)
Santa Clara, CA
100%
225
152,621
140,939
97%
Q2 2022
Q1 2025
Q4 2025
2% / –
The Basin
Wakefield, MA
95%
440
232,172
120,767
43%
Q1 2024
Q3 2026
Q2 2027
– / –
Projects Under Development - Consolidated
665
384,793
261,706
UNCONSOLIDATED:
Alexan Harrison
Harrison, NY
62%
450
200,664
198,595
108,413
99%
Q3 2021
Q2 2026
67% / 62%
Solana Beeler Park
Denver, CO
90%
270
85,206
82,803
48,063
98%
Q4 2021
Q3 2024
Q2 2025
19% / 15%
Modera Bridle Trails
Kirkland, WA
369
185,282
66,603
19%
Q3 2027
Q4 2028
Modera South Shore
Marshfield, MA
121,918
38,486
17%
Q1 2026
Q4 2026
Projects Under Development - Unconsolidated
1,359
593,070
386,487
156,476
Projects Completed Not Stabilized:
Alloy Sunnyside
80%
209
70,004
69,277
35,815
Q2 2024
Q3 2025
40% / 31%
Remy (Toll)
Frisco, TX
75%
357
98,937
96,869
49,855
Q1 2022
Q4 2024
68% / 64%
Sadie (fka Settler) (Toll)
Fort Worth, TX
362
82,775
77,311
37,374
60% / 55%
Lyle (Toll) (2)
Dallas, TX
334
86,332
82,949
46,676
Q3 2022
Projects Completed Not Stabilized - Unconsolidated
338,048
326,406
169,720
Total Development Projects - Consolidated
Total Development Projects - Unconsolidated
2,621
931,118
712,893
326,196
Total Development Projects
3,286
1,315,911
974,599
Item 3. Legal Proceedings
The Company is involved in various pending and threatened legal proceedings which arise in the ordinary course of business. The Company evaluates these litigation matters on an ongoing basis, but in no event less than quarterly, in assessing the adequacy of its accruals and disclosures. For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, the Company records new accruals and/or adjusts existing accruals that represent its best estimate of the loss incurred based on the facts and circumstances known at that time. As of December 31, 2024 and December 31, 2023, the Company’s litigation accruals approximated $42.4 million and $17.1 million, respectively, and are included in other liabilities in the consolidated balance sheets. Actual losses may differ materially from the amounts noted above and the ultimate outcome of these legal proceedings is generally not yet determinable. As of December 31, 2024 and December 31, 2023, the Company does not believe there is any litigation pending or threatened against it that, either individually or in the aggregate and inclusive of the matters accrued for as noted above, may reasonably be expected to have a material adverse effect on the Company and its financial condition.
The Company has been named as a defendant in a number of cases filed in late 2022 and 2023 alleging antitrust violations by RealPage, Inc., a seller of revenue management software products, and various owners and/or operators of multifamily housing, including us, that have utilized these products. The complaints allege collusion among the defendants to illegally fix and inflate the pricing of multifamily rents and seek monetary damages, injunctive relief, fees and costs. All of the cases except for one have been consolidated into a single putative class action in the United States District Court for the Middle District of Tennessee. On December 28, 2023, motions to dismiss this consolidated action, filed by RealPage, Inc. as well as us and our multifamily co-defendants, were denied by the Court and the case is proceeding. Another case with similar allegations has been filed by the District of Columbia against RealPage, Inc. and a number of multifamily owners and/or operators, including us, and no assurance can be given that similar additional cases will not be filed in the future. We believe these various lawsuits are without merit and we intend to vigorously defend against them. As these proceedings are in the early stages, it is not possible for the Company to predict the outcome nor is it possible to estimate the amount of loss, if any, which may be associated with an adverse decision in any of these cases.
The Company is named as a defendant in a class action in the United States District Court for the Northern District of California filed in 2016 which alleges that the amount of late fees charged by the Company were improperly determined under California law. The plaintiffs are seeking monetary damages and other relief. On April 8, 2024, the Court issued certain findings of facts and conclusions of law that are adverse to the Company’s legal position. At this time, the Company is continuing to defend the action. While the resolution of this matter cannot be predicted with certainty, the Company does not believe that the eventual outcome will have a material adverse effect on the Company and its financial condition.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Common Share/Unit Information (Equity Residential and ERP Operating Limited Partnership)
The Company’s Common Shares trade on the New York Stock Exchange under the trading symbol EQR. There is no established public market for the Operating Partnership’s Units (OP Units and restricted units). At February 6, 2025, the number of record holders of Common Shares was approximately 1,630 and 379,705,225 Common Shares were outstanding. At February 6, 2025, the number of record holders of Units in the Operating Partnership was approximately 450 and 391,519,896 Units were outstanding.
Unregistered Common Shares Issued in the Quarter Ended December 31, 2024 (Equity Residential)
During the quarter ended December 31, 2024, EQR issued 19,181 Common Shares in exchange for 19,181 OP Units held by various limited partners of ERPOP. OP Units are generally exchangeable into Common Shares on a one-for-one basis or, at the option of ERPOP, the cash equivalent thereof, at any time one year after the date of issuance. These shares were either registered under the Securities Act of 1933, as amended (the “Securities Act”), or issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder, as these were transactions by an issuer not involving a public offering. In light of the manner of the sale and information obtained by EQR from the limited partners in connection with these transactions, EQR believes it may rely on these exemptions.
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the results of operations and financial condition of the Company and the Operating Partnership should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Company’s ability to control the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary entity has been consolidated with the Company for financial reporting purposes, except for any unconsolidated properties/entities. Capitalized terms used herein and not defined are as defined elsewhere in this Annual Report on Form 10-K. In addition, please refer to the Definitions section below for various capitalized terms not immediately defined in this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
Forward-looking statements are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Company’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Additional factors that might cause such differences are discussed in Part I of this Annual Report on Form 10-K, particularly those under Item 1A, Risk Factors. Forward-looking statements and related uncertainties are also included in the Notes to Consolidated Financial Statements in this report. Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update or supplement these forward-looking statements.
See Item 1, Business, for discussion regarding the Company’s overview.
See Item 1, Business, for discussion regarding the Company’s business objectives and operating and investing strategies.
Results of Operations
2023 and 2024 Transactions
In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the years ended December 31, 2023 and 2024:
Portfolio Rollforward
($ in thousands)
Purchase Price
AcquisitionCap Rate
12/31/2022
308
79,597
Acquisitions:
Consolidated Rental Properties
577
189,734
5.1
Consolidated Rental Properties – Not Stabilized
606
176,600
5.9
Sales Price
DispositionYield
Dispositions:
(11
(912
(379,893
(5.5
)%
Completed Developments – Consolidated
312
Configuration Changes
12/31/2023
302
80,191
4,986
1,438,250
387
153,845
5.5
Unconsolidated Land Parcels
33,394
(975,641
(5.4
Completed Developments – Unconsolidated
12/31/2024
Acquisitions
Dispositions
31
Developments
See Notes 4 and 5 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate investments and investments in partially owned entities.
32
Comparison of the year ended December 31, 2024 to the year ended December 31, 2023
The following table presents a reconciliation of diluted earnings per share/unit for the year ended December 31, 2024 as compared to the same period in 2023:
Year Ended December 31
Diluted earnings per share/unit for full year 2023
2.20
Property NOI
0.18
Interest expense
(0.04
Corporate overhead (1)
Net gain/loss on property sales
0.68
Depreciation expense
(0.17
(0.09
Diluted earnings per share/unit for full year 2024
2.72
The Company’s primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents rental income less direct property operating expenses (including real estate taxes and insurance). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties.
The following tables present reconciliations of net income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (amounts in thousands):
Year Ended December 31,
2024
2023
$Change
%Change
Net income
1,070,975
868,488
202,487
23.3
Adjustments:
Property management
132,739
119,804
12,935
10.8
General and administrative
61,653
60,716
937
1.5
Depreciation
952,191
888,709
63,482
7.1
Net (gain) loss on sales of real estate properties
(546,797
(282,539
(264,258
93.5
Interest and other income
(30,329
(22,345
(7,984
35.7
Other expenses
74,051
29,419
44,632
151.7
Interest:
Expense incurred, net
285,735
269,556
16,179
6.0
Amortization of deferred financing costs
7,834
8,941
(1,107
(12.4
Income and other tax expense (benefit)
1,256
1,148
108
9.4
(Income) loss from investments in unconsolidated entities
8,974
5,378
3,596
66.9
Total NOI
2,018,282
1,947,275
71,007
3.6
Rental income:
Same store
2,823,418
2,740,193
83,225
3.0
Non-same store/other
156,690
133,771
22,919
17.1
Total rental income
2,980,108
2,873,964
106,144
Operating expenses:
894,477
869,635
24,842
2.9
67,349
57,054
10,295
18.0
Total operating expenses
961,826
926,689
35,137
3.8
NOI:
1,928,941
1,870,558
58,383
89,341
76,717
12,624
16.5
See Note 16 in the Notes to Consolidated Financial Statements for our disclosure of reportable segments.
33
See the Same Store Results section below for additional discussion of those results. See the reconciliation table of net income per the consolidated statements of operations to NOI above for the dollar and percentage changes related to the comparison discussions provided below.
Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies. The increase during the year ended December 31, 2024 as compared to 2023 is primarily attributable to increases in payroll-related costs, information technology expenses and legal and professional fees.
General and administrative expenses, which include corporate operating expenses, increased during the year ended December 31, 2024 as compared to 2023, primarily due to increases in legal and professional fees and other public company costs, partially offset by decreases in payroll-related costs.
Depreciation expense increased during the year ended December 31, 2024 as compared to 2023, primarily as a result of additional depreciation expense on properties acquired in 2023 and 2024 and development properties placed in service during 2023 and 2024, partially offset by lower depreciation from properties sold in 2023 and 2024.
Net gain on sales of real estate properties increased during the year ended December 31, 2024 as compared to 2023, primarily as a result of a significantly higher dollar sales volume and the mix of properties sold in 2024 vs. 2023.
Interest and other income increased during the year ended December 31, 2024 as compared to 2023, primarily due to a net increase in realized/unrealized gains on various investment securities, short-term investment income on restricted deposit accounts due to a higher rate environment and higher overall invested balances as well as insurance/litigation settlement proceeds received during 2024 that did not occur in 2023.
Other expenses increased during the year ended December 31, 2024 as compared to 2023, primarily due to increases in litigation accruals and advocacy contributions, partially offset by decreases in data transformation project costs that occurred during 2023 but not during 2024.
Interest expense, including amortization of deferred financing costs, increased during the year ended December 31, 2024 as compared to 2023, primarily due to higher overall debt balances outstanding and higher overall rates, partially offset by higher capitalized interest. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the year ended December 31, 2024 was 3.91% as compared to 3.82% in 2023. The Company capitalized interest of approximately $14.5 million and $12.3 million during the years ended December 31, 2024 and 2023, respectively.
Loss from investments in unconsolidated entities increased during the year ended December 31, 2024 as compared to 2023, primarily as a result of losses incurred on our unconsolidated development properties which recently started lease-up activities, partially offset by increases in net income of unconsolidated operating properties and a gain on sale of an unconsolidated operating property.
For comparison of the year ended December 31, 2023 to the year ended December 31, 2022, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023.
Same Store Results
Properties that the Company owned and were stabilized for all of both 2024 and 2023, which represented 75,299 apartment units, drove the Company’s results of operations. Properties are considered “stabilized” when they have achieved 90% Physical Occupancy for three consecutive months.
The following table provides results and statistics related to our Residential same store operations for the years ended December 31, 2024 and 2023:
2024 vs. 2023
Same Store Residential Results/Statistics by Market
Increase (Decrease) from Prior Year
2024 % of Actual NOI
2024 Average Rental Rate
2024 Weighted Average Physical Occupancy %
2024 Turnover
AverageRental Rate
PhysicalOccupancy
Turnover
14,136
17.7
2,933
95.6
43.3
2.5
(1.2
%)
5.3
2,925
95.9
38.2
(0.4
0.6
4.1
3,167
40.6
3.5
0.5
(1.3
20,503
27.1
2,962
95.7
42.0
0.2
(0.9
11,093
16.1
3,326
96.1
44.2
1.1
(0.1
13,534
15.9
2,743
96.8
40.7
4.6
0.0
14.6
4,640
97.3
33.6
(3.6
7,077
3,615
96.0
41.5
(2.6
8,853
10.2
2,607
96.2
45.2
1.2
1.0
(3.1
2,505
2.6
2,410
54.9
(3.2
Other Expansion Markets
3,198
2.2
1,946
95.1
56.9
(2.2
(1.0
3,127
42.5
(1.5
Note: The above table reflects Residential same store results only. Residential operations account for more than 96.0% of total revenues for the year ended December 31, 2024.
During the year ended December 31, 2024, the Company's operating business performed well, with healthy demand across most of our markets supported by a continuing solid job market, high employment levels and high wage growth among our target renter demographic. Competitive new supply was modest in our Established Markets, but has been elevated in our Expansion Markets. As expected, our East Coast markets were our best performers. On the West Coast, Seattle showed improvement, while San Francisco improved but at a more modest pace. Our Southern California markets (namely the city of Los Angeles) showed good demand but greater price sensitivity during the second half of 2024, though pricing started improving later in the year.
We continued to make progress in delinquent resident move-out activity, which reduced delinquencies in our portfolio. However, that progress was slower during 2024 than originally anticipated.
Activity in the transaction market was intermittent in 2024. However, we were able to source attractive opportunities to acquire properties in our Expansion Markets. We are excited to grow our portfolio and create operating scale in these markets as we execute on our strategy to optimize our portfolio allocation.
Overall, the fundamentals of our business are healthy. Long-term, we expect elevated single family home ownership costs, positive household formation trends, manageable competitive new supply in our Established Markets and moderating competitive new supply in our Expansion Markets. With an overall deficit in housing across the country, we believe our business is well positioned for the future. We also see our resident base as being resilient to economic uncertainty, including elevated inflation, due to higher levels of disposable income and lower relative rent-to-income ratios.
Liquidity and Capital Resources
With approximately $2.0 billion in readily available liquidity, a strong balance sheet, limited near-term debt maturities, very strong credit metrics and ample access to capital markets, the Company believes it is well positioned to meet its future obligations and take advantage of opportunities. See further discussion below.
35
Statements of Cash Flows
The following table sets forth our sources and uses of cash flows for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands):
December 31,
2022
Cash flows provided by (used for):
Operating activities
1,573,607
1,532,798
1,454,756
Investing activities
(1,176,484
(409,504
107,792
Financing activities
(376,952
(1,120,471
(1,785,612
The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the year ended December 31, 2024.
Operating Activities
Our operating cash flows are primarily impacted by NOI and its components, such as Average Rental Rates, Physical Occupancy levels and operating expenses related to our properties. Cash provided by operating activities for the year ended December 31, 2024 as compared to 2023 increased by approximately $40.8 million primarily as a result of the NOI and other changes discussed above in Results of Operations.
Investing Activities
Our investing cash flows are primarily impacted by our transaction activity (acquisitions/dispositions), development spend and capital expenditures. For the year ended December 31, 2024, key drivers were:
For the year ended December 31, 2024, our actual capital expenditures to real estate included the following (amounts in thousands except for apartment unit and per apartment unit amounts):
Capital Expenditures to Real Estate
For the Year Ended December 31, 2024
Same Store Properties
Non-Same Store Properties/Other
Total ConsolidatedProperties
Same Store Avg. Per Apartment Unit
Total Consolidated Apartment Units
7,688
82,987
Building Improvements
122,515
12,781
(2)
135,296
1,627
Renovation Expenditures
100,456
(1)
10,837
111,293
1,334
Replacements
51,026
3,819
54,845
678
Total Capital Expenditures to Real Estate
273,997
27,437
301,434
3,639
36
Financing Activities
Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders/unitholders and other Common Share activity. For the year ended December 31, 2024, key drivers were:
Short-Term Liquidity and Cash Proceeds
The Company generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under the Company’s revolving credit facility and commercial paper program. Currently, the Company considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions.
The following table presents the Company’s balances for cash and cash equivalents, restricted deposits and the available borrowing capacity on its revolving credit facility as of December 31, 2024 and 2023 (amounts in thousands):
December 31, 2023
Cash and cash equivalents
62,302
50,743
Restricted deposits
97,864
89,252
Unsecured revolving credit facility availability
1,952,067
2,086,585
Credit Facility and Commercial Paper Program
The Company has a $2.5 billion unsecured revolving credit facility maturing on October 26, 2027. The Company has the ability to increase available borrowings by an additional $750.0 million by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating and other terms and conditions per the agreement. See Note 8 in the Notes to Consolidated Financial Statements for additional discussion of the Company’s credit facility.
The Company has an unsecured commercial paper note program under which it may borrow up to a maximum of $1.5 billion (increased from $1.0 billion as of December 18, 2024) subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness.
37
The Company limits its utilization of the revolving credit facility in order to maintain liquidity to support its $1.5 billion commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility as of February 6, 2025 (amounts in thousands):
February 6, 2025
Unsecured revolving credit facility commitment
2,500,000
Commercial paper balance outstanding
(425,000
Unsecured revolving credit facility balance outstanding
Other restricted amounts
(3,438
2,071,562
Dividend Policy
The Company declared a dividend/distribution for each quarter in 2024 of $0.675 per share/unit, an annualized increase of 2.0% over the amount paid in 2023. All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees.
Total dividends/distributions paid in January 2025 amounted to $263.5 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended December 31, 2024.
Long-Term Financing and Capital Needs
The Company expects to meet its long-term liquidity requirements, such as lump sum unsecured note and mortgage debt maturities, property acquisitions and financing of development activities, through the issuance of secured and unsecured debt and equity securities (including additional OP Units), proceeds received from the disposition of certain properties and joint ventures, along with cash generated from operations after all distributions. The Company has a significant number of unencumbered properties available to secure additional mortgage borrowings should unsecured capital be unavailable or the cost of alternative sources of capital be too high. The value of and cash flow from these unencumbered properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $30.0 billion in investment in real estate on the Company’s balance sheet at December 31, 2024, $26.8 billion or 89.4% was unencumbered. However, there can be no assurances that these sources of capital will be available to the Company in the future on acceptable terms or otherwise. For additional details, see Item 1A, Risk Factors.
EQR issues equity and guarantees certain debt of the Operating Partnership from time to time. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.
The Company’s total debt summary schedule as of December 31, 2024 is as follows:
Debt Summary as of December 31, 2024
DebtBalances
% of Total
Secured
1,630,690
20.1
Unsecured
6,491,055
79.9
8,121,745
Fixed Rate Debt:
Secured – Conventional
1,401,099
17.3
Unsecured – Public
5,947,376
73.2
Fixed Rate Debt
7,348,475
90.5
Floating Rate Debt:
Secured – Tax Exempt
229,591
2.8
Unsecured – Revolving Credit Facility
Unsecured – Commercial Paper Program
543,679
6.7
Floating Rate Debt
773,270
9.5
38
The following table summarizes the Company’s debt maturity schedule as of December 31, 2024:
Debt Maturity Schedule as of December 31, 2024
Year
FixedRate
FloatingRate
2025
450,000
552,595
1,002,595
12.2
2026
592,025
9,000
601,025
7.3
2027
400,000
9,800
409,800
5.0
2028
900,000
10,700
910,700
11.1
2029
888,120
11,500
899,620
11.0
2030
1,148,462
12,700
1,161,162
14.2
2031
528,500
39,800
568,300
6.9
2032
28,100
0.4
2033
550,000
2,300
552,300
2034
600,000
2,400
602,400
7.4
2035+
1,350,850
106,200
1,457,050
17.8
Subtotal
7,407,957
785,095
8,193,052
Deferred Financing Costs and Unamortized (Discount)
(59,482
(11,825
(71,307
Interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 2024, inclusive of capitalized interest, approximates $225.4 million annually for the next five years, with total remaining obligations of approximately $2.3 billion. For floating rate debt, the current rate in effect for the most recent payment through December 31, 2024 is assumed to be in effect through the respective maturity date of each instrument.
See Note 8 in the Notes to Consolidated Financial Statements for additional discussion of debt at December 31, 2024. See also Notes 7 and 15 in the Notes to Consolidated Financial Statements for additional discussion of contractual obligations and commitments as of December 31, 2024.
Capital Structure
The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2024 is presented in the following table. The Company calculates the equity component of its market capitalization as the sum of (i) the total outstanding Common Shares and assumed conversion of all Units at the equivalent market value of the closing price of the Company’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preferred shares outstanding.
Capital Structure as of December 31, 2024
(Amounts in thousands except for share/unit and per share amounts)
Secured Debt
Unsecured Debt
Total Debt
22.4
Common Shares (includes Restricted Shares)
379,475,383
97.0
Units (includes OP Units and Restricted Units)
11,543,773
Total Shares and Units
391,019,156
Common Share Price at December 31, 2024
71.76
28,059,535
99.9
Perpetual Preferred Equity
17,155
0.1
Total Equity
28,076,690
77.6
Total Market Capitalization
36,198,435
39
The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2024 is presented in the following table. The Operating Partnership calculates the equity component of its market capitalization as the sum of (i) the total outstanding Units at the equivalent market value of the closing price of the Company’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preference units outstanding.
(Amounts in thousands except for unit and per unit amounts)
Total Outstanding Units
Perpetual Preference Units
Financial Flexibility
EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).
The Company has an ATM share offering program which allows EQR to issue Common Shares from time to time into the existing trading market at current market prices or through negotiated transactions, including under forward sale arrangements. The current program matures in May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of February 6, 2025.
Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of Common Shares or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 10 in the Notes to Consolidated Financial Statements). The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s Common Shares over the term of the forward sale agreement.
During the year ended December 31, 2024, the Company repurchased and subsequently retired approximately $38.5 million (652,452 shares at a weighted average price per share of $58.95) of its Common Shares in the open market under its share repurchase program. Concurrent with these transactions, ERPOP repurchased and retired the same amount of OP Units previously issued to EQR. Prior to the share repurchase activity during the year ended December 31, 2024, the Company had the authority to repurchase up to 13.0 million Common Shares under its share repurchase program. As of February 6, 2025, EQR has remaining authorization to repurchase up to 12,347,548 of its shares.
We believe our ability to access the capital markets is enhanced by ERPOP’s long-term senior debt ratings and short-term commercial paper ratings, as well as EQR’s long-term preferred equity ratings. As of February 6, 2025, the ratings are as follows:
Standard & Poor’s
Moody's
ERPOP's long-term senior debt rating
A-
A3
ERPOP's short-term commercial paper rating
A-2
P-2
EQR's long-term preferred equity rating
BBB
Baa1
See Note 17 in the Notes to Consolidated Financial Statements for discussion of the events, if any, which occurred subsequent to December 31, 2024.
Inflation
Inflation primarily impacts our results of operations as a result of wage/payroll pressures, increases in utilities through escalation of commodity costs and increases in repair and maintenance costs through higher contractor costs. In addition, inflation could also impact the interest we pay on our floating rate debt and upon refinancing of fixed rate debt in a high-inflationary environment, our cost of capital and our cost of development, renovation and capital expenditure activities. However, the majority of our apartment leases have initial terms of 12 months or less, which generally enables us to compensate for inflationary effects by increasing rents on our apartment homes, subject to supply and demand conditions. Although an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe inflation had a material impact on our results of operations for the years ended December 31, 2024, 2023 and 2022.
Definitions
The definition of certain terms described above or below are as follows:
41
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or different presentation of our financial statements.
The Company’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements. These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 2024.
The Company has identified the significant accounting policies below as critical accounting policies. These critical accounting policies are those that have the most impact on the reporting of our financial condition and those requiring significant judgments and estimates. With respect to these critical accounting policies, management believes that the application of judgments and estimates is consistently applied and produces financial information that fairly presents the results of operations for all periods presented.
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets, including its investment in real estate, for indicators of impairment at least quarterly. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal, regulatory and environmental concerns, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted. Assessing impairment can be complex and involves a high degree of subjectivity in determining if indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. Assumptions are primarily subject to property-specific characteristics, especially with respect to our intent and ability to hold the related asset. While these property-specific assumptions can have a significant impact on the undiscounted cash flows or estimated fair value of a particular asset, our evaluation of the reported carrying values of long-lived assets during the current year were not particularly sensitive to external or market assumptions.
Acquisition of Investment Properties
The Company allocates the purchase price of properties that meet the definition of an asset acquisition to net tangible and identified intangible assets acquired based on their relative fair values using assumptions primarily based upon property-specific characteristics. In making estimates of relative fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired or developed and existing comparable properties in our portfolio and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets/liabilities acquired.
Funds From Operations and Normalized Funds From Operations
The following is the Company’s and the Operating Partnership’s reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the three years ended December 31, 2024:
(Amounts in thousands)
806,995
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties
(6,212
(6,340
(3,774
Preferred/preference distributions
(1,613
(3,090
Premium on redemption of Preferred Shares/Preference Units
(1,444
Net income available to Common Shares and Units / Units
1,061,706
859,058
800,131
882,168
Depreciation – Non-real estate additions
(3,791
(4,268
(4,306
Depreciation – Partially Owned Properties
(2,132
(2,130
(2,640
Depreciation – Unconsolidated Properties
7,191
2,860
2,898
Net (gain) loss on sales of unconsolidated entities - operating assets
(515
(9
(304,325
Noncontrolling Interests share of gain (loss) on sales of real estate properties
1,857
2,336
FFO available to Common Shares and Units / Units (1) (3) (4)
1,469,710
1,464,026
1,373,917
Write-off of pursuit costs
5,155
3,647
4,780
Debt extinguishment and preferred share/preference unit redemption (gains) losses
1,444
1,143
4,664
Non-operating asset (gains) losses
(16,311
(13,323
2,368
Other miscellaneous items
61,608
21,588
(13,901
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
1,521,606
1,477,081
1,371,828
FFO (1) (3)
1,472,767
1,467,116
1,377,007
Normalized FFO (2) (3)
1,523,219
1,480,171
1,374,918
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to market risk from financial instruments primarily from changes in interest rates. Such risks derive from the refinancing of debt maturities, from exposure to interest rate fluctuations on floating rate debt and from derivative instruments utilized to swap fixed rate debt to floating or to hedge rates in anticipation of future debt issuances. Our operating results are, therefore, affected by changes in short-term interest rates, primarily SOFR and Securities Industry and Financial Markets Association (“SIFMA”) indices, which directly impact borrowings under our revolving credit facility and/or interest on secured and unsecured borrowings contractually tied to such rates. Short-term interest rates also indirectly affect the discount on notes issued under our commercial paper program. Additionally, we have exposure to long-term interest rates, particularly U.S. Treasuries, as they are utilized to price our long-term borrowings and therefore affect the cost of refinancing existing debt or incurring additional debt.
The Company monitors and manages interest rates as part of its risk management process, by targeting adequate levels of floating rate exposure and an appropriate debt maturity profile. From time to time, we may utilize derivative instruments to manage interest rate exposure and to comply with the requirements of certain lenders, but not for trading or speculative purposes.
The Company had total variable rate debt of $0.8 billion, representing 9.5% of total debt, and $0.6 billion, representing 8.7% of total debt, as of December 31, 2024 and 2023, respectively. If interest rates had been 100 basis points higher in 2024 and 2023 and average balances coincided with year end balances, our annual interest expense would have been $7.7 million and $6.4 million higher, respectively. Unsecured notes issued under the Company’s commercial paper program are treated as variable rate debt for the purposes of this calculation even though they do not have a stated interest rate, given their short-term nature. The effect of derivatives, if applicable, is also considered when computing the total amount of variable rate debt.
Changes in interest rates also affect the estimated fair market value of our fixed rate debt, computed using a discounted cash flow model. As of December 31, 2024, the Company had total outstanding fixed rate debt of $7.3 billion, or 90.5% of total debt, with an estimated fair market value of $6.8 billion. If interest rates had been 100 basis points lower as of December 31, 2024, the estimated fair market value would have increased by approximately $400.3 million. As of December 31, 2023, the Company had total outstanding fixed rate debt of $6.7 billion, or 91.3% of total debt, with an estimated fair market value of $6.2 billion. If interest rates had been 100 basis points lower as of December 31, 2023, the estimated fair market value would have increased by approximately $411.2 million.
These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments. These analyses do not consider the effects of the changes in overall economic activity that could exist in such an environment. Further, in the event of changes of such magnitude, management would likely take actions to further mitigate its exposure to these changes. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Company’s financial structure or results.
The Company cannot predict the effect of adverse changes in interest rates on its debt and derivative instruments and, therefore, its exposure to market risk, nor can there be any assurance that long-term debt will be available at advantageous pricing. Consequently, future results may differ materially from the estimated adverse changes discussed above.
Item 8. Financial Statements and Supplementary Data
See Index to Consolidated Financial Statements and Schedule on page 6 of this Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 2024, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
(b) Management’s Report on Internal Control over Financial Reporting:
Equity Residential’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.
Based on the Company’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2024. Our internal control over financial reporting has been audited as of December 31, 2024 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.
(c) Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Effective as of December 31, 2024, the Operating Partnership carried out an evaluation, under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of EQR, of the effectiveness of the Operating Partnership’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
ERP Operating Limited Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of EQR, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Based on the Operating Partnership’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2024. Our internal control over financial reporting has been audited as of December 31, 2024 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.
There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership’s evaluation referred to above that occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.
Item 9B. Other Information
During the quarter ended December 31, 2024, no trustee or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Items 10, 11, 12, 13 and 14.
Trustees, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions, and Trustee Independence; and Principal Accountant Fees and Services
The information required by Item 10, Item 11, Item 12 (with the exception of the Equity Compensation Plan Information provided below), Item 13 and Item 14 is incorporated by reference to, and will be contained in, Equity Residential’s Proxy Statement, which the Company intends to file no later than 120 days after the end of its fiscal year ended December 31, 2024, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 97.0% owner of ERP Operating Limited Partnership.
Equity Compensation Plan Information
The following table provides information as of December 31, 2024 with respect to the Company’s Common Shares that may be issued under its existing equity compensation plans.
Plan Category
Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights
Weighted-averageexercise price ofoutstandingoptions, warrants and rights
Number of securitiesremaining availablefor future issuanceunder equitycompensation plans(excluding securitiesin column (a))
(a) (1)
(b) (1)
(c) (2)
Equity compensation plans approved by shareholders
3,873,648
$64.91
9,908,235
Equity compensation plans not approved by shareholders
On June 27, 2019, the shareholders of EQR approved the Company's 2019 Plan and the Company filed a Form S-8 registration statement to register 11,331,958 Common Shares under this plan. As of December 31, 2024, 7,554,970 shares were available for future issuance. The 2019 Plan expires on June 27, 2029.
Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in ERPOP issuing OP Units to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances.
PART IV
Item 15. Exhibit and Financial Statement Schedules
(a) The following documents are filed as part of this Report:
Item 16. Form 10-K Summary
EXHIBIT INDEX
The exhibits listed below are filed as part of this report. References to exhibits or other filings under the caption “Location” indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. The Commission file numbers for our Exchange Act filings referenced below are 1-12252 (Equity Residential) and 0-24920 (ERP Operating Limited Partnership).
Exhibit
Description
Articles of Restatement of Declaration of Trust of Equity Residential dated December 9, 2004.
Included as Exhibit 3.1 to Equity Residential’s Form 10-K for the year ended December 31, 2004.
3.2
Ninth Amended and Restated Bylaws of Equity Residential, effective September 19, 2024.
Included as Exhibit 3.1 to Equity Residential's Form 8-K dated September 19, 2024, filed on September 24, 2024.
3.3
Seventh Amended and Restated Agreement of Limited Partnership for ERP Operating Limited Partnership, dated as of March 18, 2021 and effective as of January 1, 2020.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated March 18, 2021, filed on March 24, 2021.
3.4
Form of Preference Unit Term Sheet for 3.00% Series Q Cumulative Redeemable Preference Units.
Included as Exhibit 3.1 to ERP Operating Limited Partnership's Form 8-K dated April 13, 2023, filed on April 19, 2023.
Description of Equity Residential Common Shares Registered Under Section 12 of the Securities Exchange Act of 1934.
Attached herein.
4.2
Description of ERP Operating Limited Partnership Notes Registered Under Section 12 of the Securities Exchange Act of 1934.
Included as Exhibit 4.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2019.
4.3
Description of ERP Operating Limited Partnership OP Units Registered Under Section 12 of the Securities Exchange Act of 1934.
Included as Exhibit 4.3 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2023.
4.4
Indenture, dated October 1, 1994, between the Operating Partnership and The Bank of New York Mellon Trust Company, N.A., as successor trustee (“Indenture”).
Included as Exhibit 4(a) to ERP Operating Limited Partnership’s Form S-3 filed on October 7, 1994. **
4.5
First Supplemental Indenture to Indenture, dated as of September 9, 2004.
Included as Exhibit 4.2 to ERP Operating Limited Partnership’s Form 8-K, filed on September 10, 2004.
Second Supplemental Indenture to Indenture, dated as of August 23, 2006.
Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.
Third Supplemental Indenture to Indenture, dated as of June 4, 2007.
Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.
4.8
Fourth Supplemental Indenture to Indenture, dated as of December 12, 2011.
Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated December 7, 2011, filed on December 9, 2011.
4.9
Fifth Supplemental Indenture to Indenture, dated as of February 1, 2016.
Included as Exhibit 4.6 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2015.
4.10
Form of 3.375% Note due June 1, 2025.
Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated May 11, 2015, filed on May 13, 2015.
4.11
Terms Agreement regarding 7.57% Notes due August 15, 2026.
Included as Exhibit 1 to ERP Operating Limited Partnership’s Form 8-K, filed on August 13, 1996.
4.12
Form of 2.850% Note due November 1, 2026.
Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated October 4, 2016, filed on October 7, 2016.
4.13
Form of 3.250% Note due August 1, 2027.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 31, 2017, filed on August 2, 2017.
4.14
Form of 3.500% Note due March 1, 2028.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 1, 2018, filed on February 6, 2018.
4.15
Form of 4.150% Note due December 1, 2028.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated November 28, 2018, filed on November 29, 2018.
4.16
Form of 3.000% Note due July 1, 2029.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 17, 2019, filed on June 20, 2019.
50
4.17
Form of 2.500% Note due February 15, 2030.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated August 20, 2019, filed on August 22, 2019.
4.18
Form of 1.850% Note due August 1, 2031.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated August 3, 2021, filed on August 5, 2021.
4.19
Form of 4.650% Note due September 15, 2034.
Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated September 9, 2024, filed on September 10, 2024.
4.20
Form of 4.500% Note due July 1, 2044.
Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated June 16, 2014, filed on June 18, 2014.
4.21
Form of 4.500% Note due June 1, 2045.
Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated May 11, 2015, filed on May 13, 2015.
4.22
Form of 4.000% Note due August 1, 2047.
Included as Exhibit 4.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 31, 2017, filed on August 2, 2017.
10.1
*
Equity Residential Executive Severance Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated December 12, 2024, filed on December 18, 2024.
Revolving Credit Agreement, dated as of October 26, 2022, among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, and the financial institutions party thereto.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated October 26, 2022, filed on October 27, 2022.
10.3
Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P.
Included as Exhibit 10.16 to Equity Residential's Form 10-K for the year ended December 31, 1999.
10.4
Equity Residential 2019 Share Incentive Plan.
Included as Exhibit 99.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 27, 2019, filed on July 1, 2019.
10.5
Equity Residential 2011 Share Incentive Plan.
Included as Exhibit 99.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 16, 2011, filed on June 22, 2011.
10.6
First Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2012.
10.7
Second Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2013.
Third Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2014.
10.9
Fourth Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2014.
10.10
Fifth Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2016.
10.11
Sixth Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.18 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2016.
10.12
Seventh Amendment to 2011 Share Incentive Plan.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2017.
10.13
Form of 2022 Long-Term Incentive Plan Award Agreement.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2022.
10.14
Form of Change in Control/Severance Agreement between the Company and other executive officers.
Included as Exhibit 10.13 to Equity Residential's Form 10-K for the year ended December 31, 2001.
51
10.15
Form of First Amendment to Amended and Restated Change in Control/Severance Agreement with each executive officer.
Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2009.
10.16
Form of Indemnification Agreement between the Company and each trustee and executive officer.
Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2003.
10.17
Form of Executive Retirement Benefits Agreement.
Included as Exhibit 10.24 to Equity Residential's Form 10-K for the year ended December 31, 2006.
10.18
Age 62 Retirement Agreement, dated September 4, 2018, by and between Equity Residential and David J. Neithercut.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2018.
10.19
The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective April 1, 2017.
Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2017.
10.20
Amendment to the Equity Residential Supplemental Executive Retirement Plan, effective as of June 1, 2020.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2020.
10.21
Amendment to the Equity Residential Supplemental Executive Retirement Plan, effective as of October 1, 2022.
Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2022.
10.22
The Equity Residential Grandfathered Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2005.
Included as Exhibit 10.2 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2008.
10.23
Distribution Agreement, dated May 18, 2022.
Included as Exhibit 1.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on May 18, 2022.
10.24
Form of Master Forward Sale Confirmation.
Included as Exhibit 1.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on May 18, 2022.
10.25
Archstone Residual JV, LLC Limited Liability Company Agreement.
Included as Exhibit 10.3 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.26
Archstone Parallel Residual JV, LLC Limited Liability Company Agreement.
Included as Exhibit 10.4 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.27
Archstone Parallel Residual JV 2, LLC Limited Liability Company Agreement.
Included as Exhibit 10.5 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.28
Legacy Holdings JV, LLC Limited Liability Company Agreement.
Included as Exhibit 10.6 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
Equity Residential Securities Trading Policy.
List of Subsidiaries of Equity Residential and ERP Operating Limited Partnership.
23.1
Consent of Ernst & Young LLP - Equity Residential.
23.2
Consent of Ernst & Young LLP - ERP Operating Limited Partnership.
Power of Attorney.
See the signature page to this report.
31.1
Equity Residential - Certification of Mark J. Parrell, Chief Executive Officer.
31.2
Equity Residential - Certification of Robert A. Garechana, Chief Financial Officer.
31.3
ERP Operating Limited Partnership - Certification of Mark J. Parrell, Chief Executive Officer of Registrant's General Partner.
31.4
ERP Operating Limited Partnership - Certification of Robert A. Garechana, Chief Financial Officer of Registrant's General Partner.
32.1
Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
52
Act of 2002, of Mark J. Parrell, Chief Executive Officer of the Company.
32.2
Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of the Company.
32.3
ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of Registrant's General Partner.
32.4
ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of Registrant's General Partner.
97
Equity Residential and ERP Operating Limited Partnership Incentive-Based Compensation Clawback Policy.
Included as Exhibit 97 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2023.
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.
**Filed on paper – hyperlink is not required pursuant to Rule 105 of Regulation S-T.
53
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
By:
/s/ Mark J. Parrell
Mark J. Parrell
President and Chief Executive Officer
(Principal Executive Officer)
Date:
February 13, 2025
BY: EQUITY RESIDENTIAL
ITS GENERAL PARTNER
POWER OF ATTORNEY
KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints Mark J. Parrell, Robert A. Garechana and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 2024, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each registrant and in the capacities set forth below and on the dates indicated:
Name
Title
Date
President, Chief Executive Officer and Trustee
/s/ Robert A. Garechana
Executive Vice President and Chief Financial Officer
Robert A. Garechana
(Principal Financial Officer)
/s/ Ian S. Kaufman
Senior Vice President and Chief Accounting Officer
Ian S. Kaufman
(Principal Accounting Officer)
/s/ Angela M. Aman
Trustee
Angela M. Aman
/s/ Linda Walker Bynoe
Linda Walker Bynoe
/s/ Mary Kay Haben
Mary Kay Haben
/s/ Ann C. Hoff
Ann C. Hoff
/s/ Tahsinul Zia Huque
Tahsinul Zia Huque
/s/ Nina P. Jones
Nina P. Jones
/s/ John E. Neal
John E. Neal
/s/ David J. Neithercut
Chairman of the Board of Trustees
David J. Neithercut
/s/ Mark S. Shapiro
Mark S. Shapiro
/s/ Stephen E. Sterrett
Stephen E. Sterrett
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Trustees of Equity Residential
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Equity Residential (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 13, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Description of
the Matter
At December 31, 2024, the Company’s net investment in real estate was approximately $19.6 billion. As more fully described in Note 2 to the consolidated financial statements, the Company periodically evaluates its long-lived assets, including its investment in real estate, net, for impairment. The judgments and assumptions regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal, regulatory and environmental concerns, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties.
Auditing the Company's process to evaluate indicators of impairment was complex due to a high degree of subjectivity in the identification of events or changes in circumstances that may indicate impairment was present. Changes in these judgments could have a material impact on the Company’s analysis.
F-1
How We
Addressed the
Matter in
Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s long-lived asset impairment evaluation, including controls over management’s determination and review of the significant assumptions used in the analyses described above.
We performed audit procedures that included, among others, evaluating the judgments used by management to identify whether indicators of impairment were present and testing the significant assumptions and completeness and accuracy of market and operating data used by the Company in its analyses. We reviewed costs incurred on development properties. We compared the significant assumptions used by management to current market data and performed sensitivity analyses of certain significant assumptions, such as market capitalization rates. We also held discussions with management and read the minutes of meetings of the Board of Trustees and related committees to understand whether there were any changes in management’s operating and development plans that would result in the disposal of a property significantly before the end of its useful life.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
We have served as the Company’s auditor since 1996.
Chicago, Illinois
F-2
To the Partners of ERP Operating Limited Partnership
We have audited the accompanying consolidated balance sheets of ERP Operating Limited Partnership (the Operating Partnership) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 13, 2025 expressed an unqualified opinion thereon.
These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
At December 31, 2024, the Operating Partnership’s net investment in real estate was approximately $19.6 billion. As more fully described in Note 2 to the consolidated financial statements, the Operating Partnership periodically evaluates its long-lived assets, including its investment in real estate, net, for impairment. The judgments and assumptions regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal, regulatory and environmental concerns, the Operating Partnership’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties.
Auditing the Operating Partnership's process to evaluate indicators of impairment was complex due to a high degree of subjectivity in the identification of events or changes in circumstances that may indicate impairment was present. Changes in these judgments could have a material impact on the Operating Partnership’s analysis.
F-3
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Operating Partnership’s long-lived asset impairment evaluation, including controls over management’s determination and review of the significant assumptions used in the analyses described above.
We performed audit procedures that included, among others, evaluating the judgments used by management to identify whether indicators of impairment were present and testing the significant assumptions and completeness and accuracy of market and operating data used by the Operating Partnership in its analyses. We reviewed costs incurred on development properties. We compared the significant assumptions used by management to current market data and performed sensitivity analyses of certain significant assumptions, such as market capitalization rates. We also held discussions with management and read the minutes of meetings of the Board of Trustees and related committees to understand whether there were any changes in management’s operating and development plans that would result in the disposal of a property significantly before the end of its useful life.
We have served as the Operating Partnership’s auditor since 1996.
F-4
Opinion on Internal Control Over Financial Reporting
We have audited Equity Residential’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Equity Residential (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 13, 2025 expressed an unqualified opinion thereon.
The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
We have audited ERP Operating Limited Partnership’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ERP Operating Limited Partnership (the Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Operating Partnership as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 13, 2025 expressed an unqualified opinion thereon.
The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)
ASSETS
Land
5,606,531
5,581,876
Depreciable property
24,039,412
22,938,426
Projects under development
78,036
Land held for development
63,142
114,300
Investment in real estate
29,970,791
28,712,638
Accumulated depreciation
(10,412,463
(9,810,337
Investment in real estate, net
19,558,328
18,902,301
Investments in unconsolidated entities
386,531
282,049
Right-of-use assets
455,445
457,266
Other assets
273,706
252,953
Total assets
20,834,176
20,034,564
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net
1,632,902
Notes, net
5,348,417
Line of credit and commercial paper
409,131
Accounts payable and accrued expenses
99,347
87,377
Accrued interest payable
74,176
65,716
Lease liabilities
304,897
311,640
Other liabilities
310,559
272,596
Security deposits
75,611
69,178
Distributions payable
263,494
259,231
Total liabilities
9,249,829
8,456,188
Commitments and contingencies
Redeemable Noncontrolling Interests – Operating Partnership
338,563
289,248
Equity:
Shareholders' equity:
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 343,100 shares issued and outstanding as of December 31, 2024 and 745,600 shares issued and outstanding as of December 31, 2023
37,280
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 379,475,383 shares issued and outstanding as of December 31, 2024 and 379,291,417 shares issued and outstanding as of December 31, 2023
3,795
3,793
Paid in capital
9,611,826
9,601,866
Retained earnings
1,407,570
1,437,185
Accumulated other comprehensive income (loss)
4,214
5,704
Total shareholders’ equity
11,044,560
11,085,828
Noncontrolling Interests:
Operating Partnership
201,942
202,306
Partially Owned Properties
(718
994
Total Noncontrolling Interests
201,224
203,300
Total equity
11,245,784
11,289,128
Total liabilities and equity
See accompanying notes
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands except per share data)
REVENUES
Rental income
2,735,180
EXPENSES
Property and maintenance
529,737
514,575
483,865
Real estate taxes and insurance
432,089
412,114
388,412
110,304
58,710
Total expenses
2,108,409
1,995,918
1,923,459
Net gain (loss) on sales of real estate properties
546,797
282,539
304,325
30,329
22,345
2,193
(74,051
(29,419
(13,664
(285,735
(269,556
(282,920
(7,834
(8,941
(8,729
Income before income and other taxes, income (loss) from investments in unconsolidated entities and net gain (loss) on sales of land parcels
1,081,205
875,014
812,926
Income and other tax (expense) benefit
(1,256
(1,148
(900
Income (loss) from investments in unconsolidated entities
(8,974
(5,378
(5,031
Net (income) loss attributable to Noncontrolling Interests:
(28,932
(26,710
(26,310
Net income attributable to controlling interests
1,035,831
835,438
776,911
Preferred distributions
Premium on redemption of Preferred Shares
Net income available to Common Shares
1,032,774
832,348
773,821
Earnings per share – basic:
2.73
2.06
Weighted average Common Shares outstanding
378,795
378,773
376,209
Earnings per share – diluted:
2.05
390,740
390,897
389,450
F-8
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)
Comprehensive income:
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the year
(3,989
4,514
20,654
Losses reclassified into earnings from other comprehensive income
2,499
3,737
11,071
Other comprehensive income (loss)
(1,490
8,251
31,725
Comprehensive income
1,069,485
876,739
838,720
Comprehensive (income) attributable to Noncontrolling Interests
(35,103
(33,307
(31,132
Comprehensive income attributable to controlling interests
1,034,382
843,432
807,588
F-9
CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net income to net cash provided by operating activities:
8,729
Amortization of discounts and premiums on debt
5,151
4,091
5,004
Amortization of deferred settlements on derivative instruments
2,488
3,725
11,059
Amortization of right-of-use assets
14,548
12,795
12,157
5,031
Distributions from unconsolidated entities – return on capital
555
559
398
Realized (gain) loss on investment securities
1,992
(1,504
(2,061
Unrealized (gain) loss on investment securities
(19,880
(13,466
Compensation paid with Company Common Shares
31,287
31,815
29,513
Changes in assets and liabilities:
(Increase) decrease in other assets
(11,813
(10,203
10,893
Increase (decrease) in accounts payable and accrued expenses
3,249
8,911
(266
Increase (decrease) in accrued interest payable
8,460
(594
(3,200
Increase (decrease) in lease liabilities
(3,863
(1,551
(1,524
Increase (decrease) in other liabilities
36,668
5,358
(13,394
Increase (decrease) in security deposits
6,433
238
2,799
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions
(1,595,100
(324,497
(113,046
Investment in real estate – development/other
(129,822
(78,197
(109,345
Capital expenditures to real estate
(301,434
(319,342
(221,086
Non-real estate capital additions
(2,766
(1,851
(4,050
Interest capitalized for real estate and unconsolidated entities under development
(14,489
(12,347
(7,105
Proceeds from disposition of real estate, net
960,398
374,018
720,302
Investments in unconsolidated entities – acquisitions
(31,286
(2,800
(49,855
Investments in unconsolidated entities – development/other
(78,435
(47,180
(109,846
Distributions from unconsolidated entities – return of capital
1,409
300
Purchase of investment securities and other investments
(2,500
Proceeds from sale of investment securities
15,041
3,042
3,584
Consolidation of previously unconsolidated entities
2,108
Net cash provided by (used for) investing activities
F-10
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs
(5,307
(4,106
(9,894
Mortgage notes payable, net:
Proceeds
572,896
48,054
Lump sum payoffs
(932,598
(286,461
Scheduled principal repayments
(6,100
(3,354
(3,392
Notes, net:
597,954
(500,000
Line of credit and commercial paper:
Line of credit proceeds
392,000
Line of credit repayments
(392,000
Commercial paper proceeds
33,116,303
6,124,068
6,036,083
Commercial paper repayments
(32,981,755
(5,844,892
(6,221,158
Proceeds from (payments on) settlement of derivative instruments
25,169
Finance ground lease principal payments
(2,880
(2,662
(2,463
Proceeds from sale of Common Shares
139,623
Proceeds from Employee Share Purchase Plan (ESPP)
3,522
3,517
4,178
Proceeds from exercise of options
23,000
23,632
25,069
Common Shares repurchased and retired
(38,474
(49,105
Redemption of Preferred Shares
(20,125
Payment of offering costs
(783
Other financing activities, net
(94
(75
(63
Acquisition of Noncontrolling Interests – Partially Owned Properties
(3,129
(3,737
(32,178
Contributions – Noncontrolling Interests – Partially Owned Properties
583
603
Contributions – Noncontrolling Interests – Operating Partnership
Distributions:
Common Shares
(1,019,050
(990,148
(931,783
Preferred Shares
(2,386
(2,318
Noncontrolling Interests – Operating Partnership
(30,419
(30,253
(30,324
Noncontrolling Interests – Partially Owned Properties
(3,164
(5,743
(18,406
Net cash provided by (used for) financing activities
Net increase (decrease) in cash and cash equivalents and restricted deposits
20,171
2,823
(223,064
Cash and cash equivalents and restricted deposits, beginning of year
139,995
137,172
360,236
Cash and cash equivalents and restricted deposits, end of year
160,166
53,869
83,303
Total cash and cash equivalents and restricted deposits, end of year
F-11
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized
241,034
248,990
267,612
Net cash paid (received) for income and other taxes
1,339
1,091
748
Real estate acquisitions/dispositions/other:
Mortgage loans assumed
42,256
Amortization of deferred financing costs:
(211
(506
2,785
2,768
1,047
2,527
2,080
4,002
3,840
4,387
Amortization of discounts and premiums on debt:
2,841
1,843
2,184
2,310
2,248
2,820
Amortization of deferred settlements on derivative instruments:
(12
Accumulated other comprehensive income
Write-off of pursuit costs:
2,809
527
1,150
1,717
2,186
629
934
732
(Income) loss from investments in unconsolidated entities:
7,739
4,132
3,778
1,235
1,246
1,253
Realized/unrealized (gain) loss on derivative instruments:
(3,749
(21,865
3,989
(765
1,211
Investment in real estate – acquisitions:
(1,573,920
(12,727
(8,453
Interest capitalized for real estate and unconsolidated entities under development:
(6,328
(4,010
(2,365
(8,161
(8,337
(4,740
Investments in unconsolidated entities – development/other:
(76,455
(45,770
(108,556
(1,980
(1,410
(1,290
Consolidation of previously unconsolidated entities:
(50,315
46,327
75
2,000
4,021
F-12
Debt financing costs:
(9,566
(228
(100
Proceeds from (payments on) settlement of derivative instruments:
25,613
(444
Right-of-use assets and lease liabilities initial measurement and reclassifications:
(400
7,105
400
Non-cash share distribution and other transfers from unconsolidated entities:
636
4,201
(636
(4,201
Non-cash change in Supplemental Executive Retirement Plan (SERP) balances:
(1,457
24,767
31,405
2,051
(56,845
(31,136
32,078
(269
F-13
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
SHAREHOLDERS’ EQUITY
PREFERRED SHARES
Balance, beginning of year
Partial redemption of 8.29% Series K Cumulative Redeemable
Balance, end of year
COMMON SHARES, $0.01 PAR VALUE
3,784
3,755
Conversion of OP Units into Common Shares
Issuance of Common Shares
Exercise of share options
Employee Share Purchase Plan (ESPP)
(7
Share-based employee compensation expense:
Restricted shares
PAID IN CAPITAL
9,476,085
9,121,122
Common Share Issuance:
8,768
23,938
11,919
139,606
22,996
23,627
25,064
3,521
3,516
4,177
13,905
12,484
11,593
Share options
3,441
4,628
2,321
ESPP discount
711
644
796
Offering costs
Supplemental Executive Retirement Plan (SERP)
1,120
(27,383
Change in market value of Redeemable Noncontrolling Interests – Operating Partnership
(49,366
7,667
176,490
Adjustment for Noncontrolling Interests ownership in Operating Partnership
5,458
18,099
11,432
RETAINED EARNINGS
1,658,837
1,827,063
Common Share distributions
(1,023,922
(1,004,904
(942,047
Preferred Share distributions
Premium on redemption of Preferred Shares - cash charge
(38,467
(49,096
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(2,547
(34,272
Accumulated other comprehensive income (loss) – derivative instruments:
DISTRIBUTIONS
Distributions declared per Common Share outstanding
2.70
2.65
2.50
F-14
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
NONCONTROLLING INTERESTS
OPERATING PARTNERSHIP
209,961
214,094
Issuance of restricted units to Noncontrolling Interests
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner
(8,770
(23,948
(11,923
Equity compensation associated with Noncontrolling Interests
15,462
16,430
19,104
Net income attributable to Noncontrolling Interests
28,932
26,710
26,310
Distributions to Noncontrolling Interests
(30,583
(30,107
(30,407
Change in carrying value of Redeemable Noncontrolling Interests – Operating Partnership
21,358
(5,458
(18,099
(11,432
PARTIALLY OWNED PROPERTIES
(721
18,166
6,212
6,340
3,774
Contributions by Noncontrolling Interests
(3,258
(5,818
(18,469
(4,249
(2,837
(4,795
(1,000
F-15
LIABILITIES AND CAPITAL
Redeemable Limited Partners
Capital:
Partners’ Capital:
Preference Units
General Partner
11,023,191
11,042,844
Limited Partners
Total partners’ capital
11,246,502
11,288,134
Total capital
Total liabilities and capital
(Amounts in thousands except per Unit data)
1,064,763
862,148
803,221
ALLOCATION OF NET INCOME:
1,613
3,090
Premium on redemption of Preference Units
Net income available to Units
Earnings per Unit – basic:
Weighted average Units outstanding
389,425
389,954
388,045
Earnings per Unit – diluted:
F-17
Comprehensive (income) attributable to Noncontrolling Interests – Partially Owned Properties
1,063,273
870,399
834,946
F-18
F-19
Proceeds from sale of OP Units
Proceeds from EQR’s Employee Share Purchase Plan (ESPP)
Proceeds from exercise of EQR options
OP Units repurchased and retired
Redemption of Preference Units
Contributions – Limited Partners
OP Units – General Partner
OP Units – Limited Partners
F-20
F-21
F-22
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
PARTNERS’ CAPITAL
PREFERENCE UNITS
GENERAL PARTNER
11,138,706
10,951,940
OP Unit Issuance:
Conversion of OP Units held by Limited Partners into OP Units held by General Partner
8,770
23,948
11,923
Issuance of OP Units
Exercise of EQR share options
EQR’s Employee Share Purchase Plan (ESPP)
EQR restricted shares
13,907
12,486
11,595
EQR share options
EQR ESPP discount
Net income available to Units – General Partner
OP Units – General Partner distributions
Change in market value of Redeemable Limited Partners
Adjustment for Limited Partners ownership in Operating Partnership
LIMITED PARTNERS
Issuance of restricted units to Limited Partners
Equity compensation associated with Units – Limited Partners
Net income available to Units – Limited Partners
Units – Limited Partners distributions
Change in carrying value of Redeemable Limited Partners
Distributions declared per Unit outstanding
F-23
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES
F-24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Equity Residential (“EQR”) is an S&P 500 company focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters, a business that is conducted on its behalf by ERP Operating Limited Partnership (“ERPOP”). EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. Unless otherwise indicated, the notes to consolidated financial statements apply to both the Company and the Operating Partnership.
As of December 31, 2024, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 311 properties located in 10 states and the District of Columbia consisting of 84,249 apartment units. The ownership breakdown includes (table does not include any uncompleted development properties):
Basis of Presentation
Due to the Company’s ability as general partner to control either through ownership or by contract the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary has been consolidated with the Company for financial reporting purposes, except for any unconsolidated properties/entities.
Real Estate Assets and Depreciation of Investment in Real Estate
The Company expects that substantially all of its acquisitions will be accounted for as asset acquisitions. In an asset acquisition, the Company is required to capitalize transaction costs and allocate the purchase price on a relative fair value basis (including any identified intangible assets). For the years ended December 31, 2024 and 2023, all acquisitions were considered asset acquisitions.
In making estimates of relative fair value for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired or developed and existing comparable properties in our portfolio and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets/liabilities acquired. The Company allocates the purchase price of acquired real estate to various components as follows:
F-25
Replacements inside an apartment unit such as appliances and carpeting are depreciated over an estimated useful life of five to ten years. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and building improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to fifteen years. Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms.
The Company classifies real estate assets as real estate held for sale when it is probable a property will be disposed of. The Company classifies properties under development and/or expansion and properties in the lease-up phase (including land) as construction-in-progress until construction has been completed and certificates of occupancy permits have been obtained.
At least quarterly, the Company evaluates its long-lived assets, including its investment in real estate, for indicators of impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal, regulatory and environmental concerns, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted. If an impairment indicator exists, the Company performs the following:
For long-lived assets to be disposed of, an impairment loss is recognized when the estimated fair value of the asset, less the estimated cost to sell, is less than the carrying amount of the asset measured at the time that the Company has determined it is probable that the asset will be disposed of. Long-lived assets held for sale and the related liabilities are separately reported, with the long-lived assets reported at the lower of their carrying amounts or their estimated fair values, less their costs to sell, and are not depreciated after reclassification to real estate held for sale.
Impairment of Investments in Unconsolidated Entities and Other Investments
At least quarterly, the Company evaluates its investments in unconsolidated entities and other investments for indicators of other than temporary impairment, considering whether there has been a change to events or circumstances that would impact recoverability of the Company’s investment as well as any changes with regards to the Company's intent and ability to hold the investment to recover its carrying value.
F-26
Cost Capitalization
See the Real Estate Assets and Depreciation of Investment in Real Estate section for a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. For all development, capital and renovation projects, the Company uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company capitalizes interest, real estate taxes and insurance, as well as payroll for those individuals directly responsible for and who spend their time on the execution and supervision of development activities. Additionally, the Company capitalizes payroll for those individuals directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. Capitalization ends when the asset, or a portion of the asset, is substantially completed and ready for its intended use. These costs are reflected on the balance sheets as increases to depreciable property, construction-in-progress and/or investments in unconsolidated entities.
During the years ended December 31, 2024 and 2023, the Company capitalized $16.9 million and $15.4 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.
Cash and Cash Equivalents
The Company considers all demand deposits, money market accounts and investments in certificates of deposit with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions typically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions’ non-performance.
Fair Value of Financial Instruments
The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments on listed market prices and third-party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.
In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company may seek to manage these risks by following established risk management policies and procedures, including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.
The Company has a policy of only entering into derivative contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Company has not sustained a material loss from these instruments nor does it anticipate any material adverse effect on its net income or financial position in the future.
The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. In addition, fair value adjustments will affect either shareholders’ equity/partners’ capital or net income depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity. When the terms of an underlying transaction are modified, or when the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income each period until the instrument matures. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market each period. The Company does not use derivatives for trading or speculative purposes. See Note 9 for additional derivatives discussion.
Leases and Revenue Recognition
Rental income attributable to residential leases is recorded on a straight-line basis over the term of the lease when reasonably assured they are collectible, which is not materially different than if it were recorded when due from residents and recognized monthly as it was earned. Residential apartment leases may include lease income related to such items as utility recoveries, parking rent, storage rent and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Leases entered into between a resident and a property for the rental of an apartment unit are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis.
F-27
Rental income attributable to non-residential leases is also recorded on a straight-line basis over the term of the lease when reasonably assured they are collectible. Non-residential leases may include lease income related to such items as utility recoveries, parking rent and storage rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Non-residential leases generally have five to ten year lease terms with market-based renewal options and consist of ground floor retail spaces and master-leased parking garages that serve as additional amenities for our residents.
The majority of the Company’s revenue is derived from residential, non-residential and other lease income. Our revenue streams have the same timing and pattern of revenue recognition across our reportable segments, with consistent allocations between the lease and revenue recognition standards. The Company elected an accounting policy to account for both its lease and non-lease components (specifically common area maintenance charges) as a single lease component under the lease standard.
The Company is a lessor for its residential and non-residential leases and is a lessee for its corporate headquarters and regional offices and ground leases for land underlying current operating properties and/or projects under development. If applicable, lease agreements must be evaluated to determine the accounting treatment as a finance or operating lease in accordance with the lease standard.
The lease standard also requires lessees to recognize on the balance sheet: (a) a liability for the lease obligation (initially measured at the present value of the future lease payments not yet paid over the lease term); and (b) an asset for its right to use the underlying asset (initially equal to the lease liability). The Company uses estimates and judgments on the discount rate used to calculate the present value of the future lease payments. The Company uses its incremental borrowing rate as the discount rate because the Company typically cannot readily determine the rate implicit in the lease. Since the Company’s credit backs the corporate office lease obligations and the lease terms are generally ten years or less, the discount rate range was estimated by using the Company’s borrowing rates for actual pricing data. The discount rate range for ground leases takes into account various factors, including the longer life of the ground leases, and was estimated by using the Company’s borrowing rates for actual pricing data through 30 years and other long-term market rates.
The Company’s income streams that are not accounted for under the lease standard include:
See Note 7 for the Company’s rental income detail allocated between the lease and revenue recognition standards.
The Company’s allowance for doubtful accounts (which offsets accounts receivable and is included within other assets on the consolidated balance sheets) and bad debts (which reduce rental income on the consolidated statements of operations and comprehensive income) have historically been very modest, particularly in our residential business, given the quality of our resident base and asset class. However, due to the impact of the pandemic and extended eviction moratoriums enacted during the pandemic, the allowance for doubtful accounts and bad debts were elevated in 2022, 2023 and 2024, though they have gradually declined throughout 2023 and 2024. In accordance with the lease standard, if we determine the lease payments are not probable of collection (based on known troubled accounts, rent deferral plans granted, historical experience and other currently available evidence), we fully reserve for any unpaid amounts, deferred rent receivable, variable lease payments and straight-line receivable balances and recognize rental income only if cash is received. If we later determine that these lease payments are probable of collection (based on sustained clean payment history, no deferral plans granted and other currently available evidence), we will no longer fully reserve for the respective current receivable balances, we will reinstate the straight-line balances for the respective leases and we will no longer recognize rental income only if cash is received. If the Company’s estimates of collectibility differ from the cash received, then the timing and amount of the Company’s reported revenue could be impacted. See Note 7 for additional details.
Share-Based Compensation
The Company expenses share-based compensation for employee and trustee grants of restricted shares, restricted units and share options. Any common share of beneficial interest, $0.01 par value per share (the “Common Shares”), issued pursuant to EQR’s incentive
F-28
equity compensation and employee share purchase plans will result in ERPOP issuing units of partnership interest (“OP Units”) to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances. See Note 11 for further discussion.
Income and Other Taxes
EQR has elected to be taxed as a REIT. This, along with the nature of the operations of its operating properties, resulted in no provision for federal income taxes at the EQR level. In addition, ERPOP generally is not liable for federal income taxes as the partners recognize their allocable share of income or loss in their tax returns; therefore no provision for federal income taxes has been made at the ERPOP level. Historically, the Company has generally only incurred certain state and local income, excise and franchise taxes. The Company has elected taxable REIT subsidiary status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses.
The Company’s provision for income and other tax expense (benefit) was as follows for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands):
State and local income, franchise and excise tax (benefit)
900
Income and other tax expense (benefit) (1)
During the years ended December 31, 2024, 2023 and 2022, the tax character of the Company’s dividends and distributions were as follows:
2024 (1)
2023 (2)
2022 (3)
Tax character of dividends and distributions:
Ordinary dividends
1.53095
1.85676
1.75466
Long-term capital gain
0.70884
0.57857
0.42850
Unrecaptured section 1250 gain
0.44771
0.17717
0.29434
Dividends and distributions per
Common Share/Unit outstanding
2.68750
2.61250
2.47750
The Company issued Internal Revenue Service (“IRS”) Form 1099-DIV to shareholders to report the tax character of Company distributions consistent with these amounts. The Company provides additional information to assist shareholders in the preparation of their tax returns. For 2024, the Company reported an Alternative Minimum Tax ("AMT") preference adjustment equal to $(0.04) per share and disclosed amounts defined under Treasury Regulation §1.1061-6(c) as “One Year Amounts Disclosure” and “Three Year Amounts Disclosure” equal to $0.06866 per share and $0.05462 per share, respectively.
F-29
Principles of Consolidation
The Company may hold an interest in subsidiaries, partnerships, joint ventures and other similar entities and accounts for these interests in accordance with the consolidation guidance. The Company first determines whether to consolidate the entity as a variable interest entity (“VIE”) or voting interest entity, or to account for the interest under the equity method of accounting as an unconsolidated entity. In situations in which we have concluded that an entity qualifies as a VIE, it is generally because the equity investors of VIEs do not have sufficient equity at risk to finance their activities without additional subordinated financial support or do not have substantive voting rights. The Company consolidates an entity when it is considered to be the primary beneficiary of the VIE or when it controls the entity through ownership of a majority voting interest. A primary beneficiary has the power to direct the activities that most significantly impact the VIE’s performance and has the obligation to absorb the expected losses or the right to receive the expected residual returns that could potentially be significant to the VIE. In evaluating whether the entity is a VIE and/or the Company is the primary beneficiary of the entity, the Company considers several factors, including, but not limited to, proportionate share or ownership of the VIE, funding and financing sources, the business purpose of the entity, related parties, developer and property management fees and agreement terms regarding major decisions, participating and voting rights, contributions and distributions.
Investments in Unconsolidated Entities
The Company accounts for investments in unconsolidated entities under the equity method of accounting and measures the investments initially at cost. The Company subsequently adjusts the carrying amount by additional cash and non-cash contributions and distributions and its proportionate share of the earnings and losses of such entities. The proportionate share of the earnings and losses are also recognized in the consolidated statements of operations and comprehensive income. In addition, we may earn fees for providing property management services or construction oversight.
Noncontrolling Interests
A noncontrolling interest in a subsidiary (minority interest) is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the consolidated statements of operations and comprehensive income. See Note 3 for further discussion.
Operating Partnership: Net income is allocated to noncontrolling interests based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and EQR. Issuances and retirements of Common Shares and OP Units changes the ownership interests of both the noncontrolling interests and EQR. Such transactions and the related proceeds/payments are treated as capital transactions.
Partially Owned Properties: The Company reflects noncontrolling interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Company that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are generally based on ownership percentage and are reflected as noncontrolling interests in partially owned properties in the consolidated statements of operations and comprehensive income.
Partners’ Capital
The “Limited Partners” of ERPOP include various individuals and entities that contributed their properties to ERPOP in exchange for OP Units. The “General Partner” of ERPOP is EQR. Net income is allocated to the Limited Partners based on their respective ownership percentage of ERPOP. The ownership percentage is calculated by dividing the number of OP Units held by the Limited Partners by the total OP Units held by the Limited Partners and the General Partner. Issuances and retirements of Common Shares and OP Units changes the ownership interests of both the Limited Partners and EQR. Such transactions and the related proceeds/payments are treated as capital transactions.
Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners
The Company classifies Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners in the mezzanine section of the consolidated balance sheets for the portion of OP Units that EQR is required, either by contract or securities law, to deliver registered Common Shares to the exchanging OP Unit holder. The redeemable noncontrolling interest units / redeemable limited partner units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. See Note 3 for further discussion.
F-30
Use of Estimates
In preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued a new standard on disaggregation of income statement expenses, which requires an entity to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in a tabular format in the notes to the financial statements. The standard will be effective for annual reporting periods beginning after December 15, 2026 and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact of the new rules on its disclosures.
In March 2024, the Securities and Exchange Commission ("SEC") adopted final rules that will require certain climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges. The new rules include a requirement to disclose material climate-related risks, descriptions of board and management oversight and risk management activities, the material impacts of these risks on a registrant’s strategy, business model and outlook, and any material climate-related targets or goals, as well as material effects and costs of severe weather events and other natural conditions and greenhouse gas emissions. Prior to the stay of the new rules, they would have been effective for annual periods beginning January 1, 2025, except for the greenhouse gas emissions disclosures, which would have been effective for annual periods beginning January 1, 2026. The Company is currently evaluating the impact of the new rules on its disclosures.
In December 2023, the FASB issued an amendment to the income tax standards which requires disclosure enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. The new standard will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. Due to the nature of the Company's operations and its status as a REIT, we expect the adoption of the standard to have no impact on its disclosures. See the Income and Other Taxes section above for additional discussion.
In November 2023, the FASB issued an amendment to the segment reporting standards which requires disclosure for each reportable segment, on an interim and annual basis, of the significant expense categories and amounts that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. Additionally, it requires disclosure of the title and position of the individual or the name of the group or committee identified as the chief operating decision maker. The Company adopted the standard as required in this Annual Report on Form 10-K for the year ended December 31, 2024. See Note 16 for further discussion.
In August 2020, the FASB issued an amendment to the debt and equity financial instruments standards which simplifies the accounting for convertible instruments and accounting for contracts in an entity’s own equity. The Company adopted the standard when effective on January 1, 2022 and it had no impact on its consolidated results of operations and financial position.
In March 2020, the FASB issued an amendment to the reference rate reform standard which provides the option for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on contract modifications and hedge accounting. The new standard was effective for the Company upon issuance and elections could be made through December 31, 2024. The Company elected to apply the hedge accounting expedients and application of these expedients preserves the presentation of derivatives consistent with past presentation.
The Company is the controlling partner in various consolidated partnerships owning 12 properties consisting of 2,656 apartment units having a noncontrolling interest deficit balance of $0.7 million at December 31, 2024. The Company is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. Of the consolidated entities described above, the Company is the controlling partner in limited-life partnerships owning two properties having a noncontrolling interest deficit balance of $1.5 million. These two partnership agreements contain provisions that require the partnerships to be liquidated through the sale of their assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to cause the property owning partnerships to distribute the proceeds of liquidation to the Noncontrolling Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of their assets warrant a distribution
F-31
based on the partnership agreements. As of December 31, 2024, the Company estimates the value of Noncontrolling Interest distributions for these two properties would have been approximately $51.7 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third-party consideration realized by the partnerships upon disposition of the two Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2024 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Noncontrolling Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Noncontrolling Interests in these Partially Owned Properties.
The Company refers to “Common Shares” and “Units” (which refer to both OP Units and restricted units) as equity securities for EQR and “General Partner Units” and “Limited Partner Units” as equity securities for ERPOP. To provide a streamlined and more readable presentation of the disclosures for the Company and the Operating Partnership, several sections below refer to the respective terminology for each with the same financial information and separate sections are provided, where needed, to further distinguish any differences in financial information and terminology.
The following table presents the changes in the Company’s issued and outstanding Common Shares and Units for the years ended December 31, 2024, 2023 and 2022:
Common Shares outstanding at January 1,
379,291,417
378,429,708
375,527,195
Common Shares Issued:
Conversion of OP Units
210,200
1,013,795
452,532
1,740,550
375,436
495,690
468,021
65,198
68,136
66,835
Restricted share grants, net
185,584
148,474
174,575
Common Shares Other:
Repurchased and retired
(652,452
(864,386
Common Shares outstanding at December 31,
Units
Units outstanding at January 1,
11,581,306
12,429,737
12,659,027
Restricted unit grants, net
172,667
165,364
223,242
Conversion of OP Units to Common Shares
(210,200
(1,013,795
(452,532
Units outstanding at December 31,
Total Common Shares and Units outstanding at December 31,
390,872,723
390,859,445
Units Ownership Interest in Operating Partnership
F-32
The following table presents the changes in the Operating Partnership’s issued and outstanding General Partner Units and Limited Partner Units for the years ended December 31, 2024, 2023 and 2022:
General and Limited Partner Units
General and Limited Partner Units outstanding at January 1,
388,186,222
Issued to General Partner:
EQR’s restricted share grants, net
Issued to Limited Partners:
General Partner Other:
General and Limited Partner Units outstanding at December 31,
Limited Partner Units
Limited Partner Units outstanding at January 1,
Limited Partner restricted unit grants, net
Conversion of Limited Partner OP Units to EQR Common Shares
Limited Partner Units outstanding at December 31,
Limited Partner Units Ownership Interest in Operating Partnership
The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of restricted units, are collectively referred to as the “Noncontrolling Interests – Operating Partnership” and “Limited Partners Capital,” respectively, for the Company and the Operating Partnership. Subject to certain exceptions (including the “book-up” requirements of restricted units), the Noncontrolling Interests – Operating Partnership/Limited Partners Capital may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital (including redeemable interests) is allocated based on the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total in proportion to the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total plus the total number of Common Shares/General Partner Units. Net income is allocated to the Noncontrolling Interests – Operating Partnership/Limited Partners Capital based on the weighted average ownership percentage during the period.
The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Noncontrolling Interests – Operating Partnership/Limited Partners Capital requesting an exchange of their Noncontrolling Interests – Operating Partnership/Limited Partners Capital with EQR. Once the Operating Partnership elects not to redeem the Noncontrolling Interests – Operating Partnership/Limited Partners Capital for cash, EQR is obligated to deliver Common Shares to the exchanging holder of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital.
The Noncontrolling Interests – Operating Partnership/Limited Partners Capital are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Noncontrolling Interests – Operating Partnership/Limited Partners Capital are differentiated and referred to as “Redeemable Noncontrolling Interests – Operating Partnership” and “Redeemable Limited Partners,” respectively. Instruments that require settlement in registered shares cannot be classified in permanent equity as it is not always completely within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered Common Shares for the remaining portion of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital that are classified in permanent equity at December 31, 2024 and 2023.
The carrying value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners is allocated based on the number of Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners in proportion to the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total. Such percentage of the total carrying value of Units/Limited Partner Units which is ascribed to the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable
F-33
Limited Partners is then adjusted to the greater of carrying value or fair market value as described above. As of December 31, 2024 and 2023, the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners have a redemption value of approximately $338.6 million and $289.2 million, respectively, which represents the value of Common Shares that would be issued in exchange for the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners.
The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners for the years ended December 31, 2024, 2023 and 2022, respectively (amounts in thousands):
Balance at January 1,
318,273
498,977
Change in market value
49,366
(7,667
(176,490
Change in carrying value
(51
(21,358
(4,214
Balance at December 31,
Net proceeds from EQR Common Share and Preferred Share (see definition below) offerings and proceeds from exercise of options for Common Shares are contributed by EQR to ERPOP. In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the Preferred Shares issued in the equity offering). As a result, the net proceeds from Common Shares and Preferred Shares are allocated for the Company between shareholders’ equity and Noncontrolling Interests – Operating Partnership and for the Operating Partnership between General Partner’s Capital and Limited Partners Capital to account for the change in their respective percentage ownership of the underlying equity.
The Company’s declaration of trust authorizes it to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 par value per share (the “Preferred Shares”), with specific rights, preferences and other attributes as the Board of Trustees may determine, which may include preferences, powers and rights that are senior to the rights of holders of the Company’s Common Shares.
The following table presents the Company’s issued and outstanding Preferred Shares/Preference Units as of December 31, 2024 and 2023:
Amounts in thousands
Annual
Call
Dividend Per
Date (1)
Share/Unit (2)
Preferred Shares/Preference Units of beneficial interest, $0.01 par value; 100,000,000 shares authorized:
8.29% Series K Cumulative Redeemable Preferred Shares/Preference Units; liquidation value $50 per share/unit; 343,100 shares/units issued and outstanding as of December 31, 2024 and 745,600 shares/units issued and outstanding as of December 31, 2023 (3)
12/10/2026
4.145
F-34
The Company has an At-The-Market (“ATM”) share offering program which allows EQR to issue Common Shares from time to time into the existing trading market at current market prices or through negotiated transactions, including under forward sale arrangements. The current program matures in May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of December 31, 2024.
Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of Common Shares or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 10). The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s Common Shares over the term of the forward sale agreement.
During part of the year ended December 31, 2022, the Company had forward sale agreements outstanding for approximately 1.7 million Common Shares at a weighted average initial forward price per share of $83.25. During the quarter ended December 31, 2022, the Company settled all of the outstanding forward sale agreements, at a weighted average forward price per share of $80.22, which is inclusive of adjustments made to reflect the then-current federal funds rate and the amount of dividends paid to holders of the Company's Common Shares, for net proceeds of approximately $139.6 million. Concurrent with this transaction, ERPOP issued the same amount of OP Units to EQR in exchange for the net proceeds.
During the year ended December 31, 2024, the Company repurchased and subsequently retired approximately $38.5 million (652,452 shares at a weighted average price per share of $58.95) of its Common Shares in the open market under its share repurchase program. Concurrent with these transactions, ERPOP repurchased and retired the same amount of OP Units previously issued to EQR. Prior to the share repurchase activity during the year ended December 31, 2024, the Company had the authority to repurchase up to 13.0 million Common Shares under its share repurchase program, of which 12,347,548 shares remain authorized to repurchase as of December 31, 2024.
During the year ended December 31, 2023, the Company repurchased and subsequently retired approximately $49.1 million (864,386 shares at a weighted average price per share of $56.79) of its Common Shares in the open market under its share repurchase program. Concurrent with these transactions, ERPOP repurchased and retired the same amount of OP Units previously issued to EQR. As of December 31, 2023, EQR had remaining authorization to repurchase up to 12,135,614 of its shares. Following this share repurchase activity, in early 2024 the Company's Board of Trustees approved replenishing the Company's share repurchase program authorization back to its original 13.0 million shares.
During the year ended December 31, 2023, ERPOP issued $0.9 million of 3.00% Series Q Cumulative Redeemable Preference Units (the "Series Q Preference Units") in connection with the buyout of the noncontrolling interest in a consolidated operating property. The 933,454 Series Q Preference Units have a liquidation value of $1.00 per unit and pay distributions quarterly at the annual rate of $0.03 per unit. The Series Q Preference Units can be redeemed for, at EQR's/ERPOP's option, Common Shares, OP Units and/or cash upon the occurrence of specific events laid out in the agreement. If redeemed for Common Shares or OP Units, the number of shares/units issued is based on the Common Share price. The Series Q Preference Units increased the balance of Noncontrolling Interests - Partially Owned Properties in the consolidated balance sheets.
F-35
The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of December 31, 2024 and 2023 (amounts in thousands):
Depreciable property:
Buildings and improvements
20,635,583
19,809,432
Furniture, fixtures and equipment
2,840,691
2,609,600
In-Place lease intangibles
563,138
519,394
Projects under development:
40,034
3,201
Construction-in-progress
221,672
74,835
Land held for development:
46,160
82,026
16,982
32,274
During the year ended December 31, 2024, the Company acquired the following from unaffiliated parties (purchase price and purchase price allocation in thousands):
Purchase Price Allocation (1)
Depreciable Property
Lease Intangible (2)
Real Estate Tax Intangible (3)
Rental Properties – Consolidated
1,592,095
181,178
1,391,905
12,727
8,453
During the year ended December 31, 2023, the Company acquired the following from unaffiliated parties (purchase price and purchase price allocation in thousands):
Purchase Price Allocation (1), (2)
Purchase Price (1)
366,334
41,142
325,611
During the year ended December 31, 2024, the Company disposed of the following to unaffiliated parties (sales price and net gain in thousands):
Net Gain
2,598
975,641
F-36
During the year ended December 31, 2023, the Company disposed of the following to unaffiliated parties (sales price and net gain in thousands):
912
379,893
The Company has invested in various entities with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated).
Consolidated VIEs
In accordance with accounting standards for consolidation of VIEs, the Company consolidates ERPOP on EQR’s financial statements. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. The limited partners are not able to exercise substantive kick-out or participating rights. As a result, ERPOP qualifies as a VIE. EQR has a controlling financial interest in ERPOP and, thus, is ERPOP’s primary beneficiary. EQR has the power to direct the activities of ERPOP that most significantly impact ERPOP’s economic performance as well as the obligation to absorb losses or the right to receive benefits from ERPOP that could potentially be significant to ERPOP.
The Company has various equity interests in certain joint ventures that have been deemed to be VIEs, and the Company is the VIEs’ primary beneficiary. As a result, the joint ventures are required to be consolidated on the Company’s financial statements. The following table summarizes the Company’s consolidated joint ventures as of December 31, 2024 and 2023:
Operating Properties (1)
Projects Under Development (2)
Projects Held for Development (2), (3)
Apartment Units (4)
2024 Consolidated Joint Ventures (VIE)
2023 Consolidated Joint Ventures (VIE)
3,060
The following table provides consolidated assets and liabilities related to the Company's VIEs as of December 31, 2024 and 2023 (amounts in thousands):
Consolidated Assets
528,076
599,788
Consolidated Liabilities
47,137
41,153
During the years ended December 31, 2024 and 2023, the Company completed the following transactions:
F-37
The Company has various equity interests in certain joint ventures that are unconsolidated and accounted for using the equity method of accounting. Most of these have been deemed to be VIEs and the Company is not the VIEs' primary beneficiary. The remaining have been deemed not to be VIEs and the Company does not have a controlling voting interest.
The following table and information summarizes the Company’s investments in unconsolidated entities as of December 31, 2024 and 2023 (amounts in thousands except for ownership percentage):
Ownership Percentage
Investments in Unconsolidated Entities:
Various Real Estate Holdings (VIE)
34,510
35,421
Varies
Projects Under Development and Land Held for Development (VIE)
323,998
220,192
62% - 95% (1)
Real Estate Technology Funds/Companies (VIE)
28,276
26,691
(253
(255
The following table summarizes the Company’s unconsolidated joint ventures that were deemed to be VIEs as of December 31, 2024 and 2023:
Real Estate Holdings (2)
Projects Under Development (3), (4)
Projects Held for Development (3), (5)
Entities
Apartment Units (6)
2024 Unconsolidated Joint Ventures (VIE)
526
2023 Unconsolidated Joint Ventures (VIE)
1,982
1,164
F-38
New Development Joint Ventures
The following table provides information on total unconsolidated development joint ventures entered into during the year ended December 31, 2023 (there were no new development joint ventures entered into during the year ended December 31, 2024) (amounts in thousands except for number of unconsolidated joint ventures and apartment units).
Number of unconsolidated joint ventures (1)
Apartment units (2)
639
2,800
The following table presents the Company’s restricted deposits as of December 31, 2024 and 2023 (amounts in thousands):
Mortgage escrow deposits:
217
307
Mortgage principal reserves/sinking funds
31,208
29,270
Mortgage escrow deposits
31,425
29,577
Restricted cash:
Earnest money on pending acquisitions
524
Restricted deposits on real estate investments
2,143
2,181
Resident security and utility deposits
44,287
40,149
Replacement reserves
17,914
15,571
2,095
1,250
Restricted cash
66,439
59,675
Lessor Accounting
The Company is the lessor for its residential and non-residential leases and these leases are accounted for as operating leases under the lease standard.
The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands):
December 31, 2022
Income Type
Residential Leases
Non-Residential Leases
Residential and non-residential rent
2,672,772
63,889
2,736,661
2,588,499
62,193
2,650,692
2,454,587
63,995
2,518,582
Utility recoveries (RUBS income) (1)
93,021
954
93,975
86,628
906
87,534
81,140
844
81,984
Parking rent
46,717
1,422
48,139
44,081
449
44,530
43,335
435
43,770
Other lease revenue, net (2)
(3,452
(1,518
(4,970
(9,317
(131
(9,448
(415
(61
(476
Total lease revenue
2,809,058
64,747
2,873,805
2,709,891
63,417
2,773,308
2,578,647
65,213
2,643,860
Parking revenue
44,079
40,836
37,338
Other revenue
62,224
59,820
53,982
Total other rental income (3)
106,303
100,656
91,320
F-39
The following table presents residential accounts receivable and straight-line receivable balances for the Company’s properties as of December 31, 2024 and 2023 (amounts in thousands):
Balance Sheet (Other assets):
Residential accounts receivable balances
15,152
21,477
Allowance for doubtful accounts
(9,904
(15,846
Net receivable balances
5,248
5,631
Straight-line receivable balances
10,234
9,183
The following table presents residential bad debt for the Company’s properties for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands):
Income Statement (Rental income):
Bad debt, net (1)
33,256
38,117
26,570
% of residential rental income
1.4
Lessee Accounting
The Company is the lessee under various corporate office leases, ground leases and parking leases for which the Company recognizes right-of-use (“ROU”) assets and related lease liabilities. The Company's corporate office lease expiration dates range from 2025 through 2042 (inclusive of applicable extension options) while ground leases and parking leases range from 2042 through 2118 (inclusive of applicable purchase options). The Company owns the building and improvements above its ground leases.
During the year ended December 31, 2024, the Company acquired below market long-term ground and parking leases, each fully prepaid at $1 and expiring in 2110, in connection with an apartment property acquisition as described in Note 4 and recorded a lease intangible asset of approximately $12.7 million, which is included in right-of-use assets on the consolidated balance sheets. During the year ended December 31, 2023, the Company entered into new corporate office leases which are being accounted for as operating leases and recorded initial lease liabilities and ROU assets of approximately $7.1 million.
The following table presents the Company’s ROU assets and related lease liabilities as of December 31, 2024 and 2023 (amounts in thousands):
Balance Sheet Location
Assets
Operating leases
363,095
363,175
Finance leases
92,350
94,091
Liabilities
237,769
243,497
67,128
68,143
F-40
Additional disclosures
The following tables illustrate the quantitative disclosures for lessees as of and for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands):
Lease cost:
Finance lease cost:
Amortization of right-of-use assets (capitalized)
146
351
Amortization of right-of-use assets (expensed)
1,945
1,781
1,391
Interest on lease liabilities (expensed)
1,865
1,886
1,904
Operating lease cost
23,074
22,791
22,131
Variable lease cost
6,447
4,937
4,772
Total lease cost
33,331
31,541
30,549
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases
3,084
2,847
2,463
Operating cash flows from operating leases
21,046
20,202
19,154
Weighted-average remaining lease term – finance leases
22.0 years
23.1 years
24.1 years
Weighted-average remaining lease term – operating leases
53.2 years
53.0 years
54.5 years
Weighted-average discount rate – finance leases
Weighted-average discount rate – operating leases
The following table summarizes the Company’s undiscounted cash flows for contractual obligations for minimum rent payments/receipts under operating and financing leases for the next five years and thereafter as of December 31, 2024:
(Payments)/Receipts Due by Year (in thousands)
Thereafter
Finance Leases:
Minimum Rent Payments
(2,946
(2,959
(2,971
(2,984
(2,998
(79,256
(94,114
Operating Leases:
(15,817
(15,553
(15,651
(15,794
(15,670
(789,790
(868,275
Minimum Rent Receipts (a)
54,235
51,141
47,845
41,973
33,317
112,157
340,668
The following table provides a reconciliation of lease liabilities from our undiscounted cash flows for minimum rent payments as of December 31, 2024 (amounts in thousands):
Operating Leases
Finance Leases
Total minimum rent payments
868,275
94,114
Less: Lease discount
(630,506
(26,986
EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. Weighted average interest rates noted below for the years ended December 31, 2024 and 2023 include the effect of any derivative instruments and amortization of premiums/discounts/OCI (other comprehensive income) on debt and derivatives.
F-41
Mortgage Notes Payable
The following tables summarize the Company’s mortgage notes payable activity for the years ended December 31, 2024 and 2023, respectively (amounts in thousands):
Mortgage notes payable, net as of December 31, 2023
Amortization of premiums/discounts
Amortization of deferred financing costs, net (1)
Mortgage notes payable, net as of December 31, 2024
1,398,598
1,594
907
234,304
1,247
140
Mortgage notes payable, net as of December 31, 2022
Assumptions
1,608,838
(3)
(800,000
601
(3,097
108,378
22,896
(132,598
(54
1,378
236,222
(3,300
1,242
344,600
1,518
1,953,438
(1,579
The following table summarizes certain interest rate and maturity date information as of and for the years ended December 31, 2024 and 2023, respectively:
Interest Rate Ranges (ending)
0.10% - 5.25%
Weighted Average Interest Rate
3.84%
3.68%
Maturity Date Ranges
2029-2061
As of December 31, 2024 and 2023, the Company had $240.6 million and $246.7 million, respectively, of secured tax-exempt bonds subject to third-party credit enhancement.
The historical cost, net of accumulated depreciation, of encumbered properties was $2.0 billion and $2.1 billion at December 31, 2024 and 2023, respectively.
Notes
The following tables summarize the Company’s notes activity for the years ended December 31, 2024 and 2023, respectively (amounts in thousands):
Notes, net as of December 31, 2023
Notes, net as of December 31, 2024
(1,305
F-42
Notes, net as of December 31, 2022
5,342,329
1.85% - 7.57%
3.54%
3.51%
2025-2047
The Company’s unsecured public notes contain certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Company was in compliance with its unsecured public debt covenants for both the years ended December 31, 2024 and 2023.
EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025.
Line of Credit and Commercial Paper
The Company has a $2.5 billion unsecured revolving credit facility maturing on October 26, 2027. The Company has the ability to increase available borrowings by an additional $750.0 million by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating and other terms and conditions per the agreement. The weighted average interest rate on the revolving credit facility was 5.98% for the year ended December 31, 2024. The Company did not borrow any amounts under its revolving credit facility during the year ended December 31, 2023.
The following table summarizes certain weighted average interest rate, maturity and amounts outstanding information for the commercial paper program as of and for the years ended December 31, 2024 and 2023, respectively:
Weighted Average Interest Rate (1)
5.25%
5.47%
Weighted Average Maturity (in days)
Weighted Average Amount Outstanding
$535.7 million
$276.0 million
F-43
The Company limits its utilization of the revolving credit facility in order to maintain liquidity to support its $1.5 billion commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility as of December 31, 2024 and 2023, respectively (amounts in thousands):
(544,495
(410,000
(3,415
The following table summarizes the Company’s total debt extinguishment costs recorded as additional expense for the years ended December 31, 2024, 2023 and 2022, respectively (amounts in thousands):
Write-offs of unamortized deferred financing costs
717
Write-offs of unamortized (premiums)/discounts/OCI
3,947
The following table provides a summary of the aggregate payments of principal on all debt for each of the next five years and thereafter as of December 31, 2024 (amounts in thousands):
2025 (1)
4,369,312
In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company may seek to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.
A three-level valuation hierarchy exists for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:
F-44
The following table summarizes the inputs to the valuations for each type of fair value measurement:
Fair Value Measurement Type
Valuation Inputs
Employee holdings (other than Common Shares) within the supplemental executive retirement plan (the “SERP”)
Quoted market prices for identical assets. These holdings are included in other assets and other liabilities on the consolidated balance sheets.
Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners
Quoted market price of Common Shares.
Mortgage notes payable and private unsecured debt (including its commercial paper and line of credit, if applicable)
Indicative rates provided by lenders of similar loans.
Public unsecured notes
Quoted market prices for each underlying issuance.
Derivatives
Readily observable market parameters such as forward yield curves and credit default swap data.
The fair values of the Company’s financial instruments (other than the items listed above and the investments disclosed below) approximate their carrying or contract value. The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable and unsecured debt (including its commercial paper and line of credit, if applicable) at December 31, 2024 and 2023, respectively (amounts in thousands):
Carrying Value
Estimated Fair Value (Level 2)
1,506,955
1,509,706
Unsecured debt, net
6,036,591
5,757,548
5,346,488
Total debt, net
7,543,546
7,390,450
6,856,194
The following tables provide a summary of the fair value measurements for each major category of assets and liabilities measured at fair value on a recurring basis and the location within the accompanying consolidated balance sheets at December 31, 2024 and 2023, respectively (amounts in thousands):
Fair Value Measurements at Reporting Date Using
Balance SheetLocation
Quoted Prices inActive Markets forIdentical Assets/Liabilities(Level 1)
Significant OtherObservable Inputs(Level 2)
SignificantUnobservableInputs(Level 3)
Supplemental Executive Retirement Plan
Other Assets
109,935
Other Liabilities
Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Mezzanine
F-45
108,478
The following tables provide a summary of the effect of cash flow hedges on the Company’s accompanying consolidated statements of operations and comprehensive income for the years ended December 31, 2024, 2023 and 2022, respectively (amounts in thousands):
December 31, 2024Type of Cash Flow Hedge
Amount ofGain/(Loss) Recognized in OCI on Derivative
Location ofGain/(Loss) Reclassified from Accumulated OCI into Income
Amount ofGain/(Loss) Reclassified from Accumulated OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps
(2,499
December 31, 2023Type of Cash Flow Hedge
December 31, 2022Type of Cash Flow Hedge
(11,071
As of December 31, 2024 and 2023, there were approximately $4.2 million and $5.7 million in deferred gains, net, included in accumulated other comprehensive income (loss), respectively, related to previously settled and/or unsettled derivative instruments, of which an estimated $1.2 million may be recognized as additional interest expense during the twelve months ending December 31, 2025.
During the year ended December 31, 2024, the Company paid approximately $4.0 million to settle four forward starting swaps in conjunction with the issuance of $600.0 million of ten-year unsecured public notes. The entire $4.0 million was initially deferred as a component of accumulated other comprehensive income (loss) and will be recognized as an increase to interest expense over the ten-year term of the notes.
During the year ended December 31, 2023, the Company received a net $27.1 million to settle nine forward starting swaps in conjunction with the interest rate lock on $530.0 million of ten-year secured conventional mortgage notes. The Company ultimately closed on $550.0 million of secured notes. The accrued interest of approximately $1.9 million was recorded as a decrease to interest
F-46
expense. The remaining $25.2 million was initially deferred as a component of accumulated other comprehensive income (loss) and will be recognized as a decrease to interest expense over the first nine years and eight months of the mortgage notes.
The Company has invested in various equity securities without readily determinable fair values and has elected to measure them using the measurement alternative in accordance with the applicable accounting standards for equity securities. These investments are carried at cost less any impairment and adjusted to fair value if there are observable price changes for an identical or similar investment of the same issuer.
The following table summarizes the Company’s real estate technology investment securities included in other assets as of December 31, 2024 and 2023 (amounts in thousands):
Real Estate Technology Investments
22,159
19,312
During the year ended December 31, 2024, the Company sold certain of these investment securities for proceeds of approximately $15.0 million and realized a loss on sale of approximately $2.0 million, which is included in interest and other income in the consolidated statements of operations. During the year ended December 31, 2024, the Company adjusted certain of these investment securities to observable market prices and recorded a net unrealized gain of approximately $19.9 million, which is included in interest and other income in the consolidated statements of operations.
During the year ended December 31, 2023, the Company sold a portion of one of these investment securities for proceeds of approximately $2.5 million and realized a gain on sale of approximately $1.6 million, which is included in interest and other income in the consolidated statements of operations. During the year ended December 31, 2023, the Company adjusted certain of these investment securities to observable market prices and recorded an unrealized gain of approximately $13.5 million, which is included in interest and other income in the consolidated statements of operations.
F-47
The following tables set forth the computation of net income per share – basic and net income per share – diluted for the Company (amounts in thousands except per share amounts):
Numerator for net income per share – basic:
Allocation to Noncontrolling Interests – Operating Partnership
Numerator for net income per share – basic
Numerator for net income per share – diluted:
Numerator for net income per share – diluted
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic
Effect of dilutive securities:
OP Units
10,630
11,181
11,836
Long-term compensation shares/units
1,315
943
1,402
ATM forward sales
Denominator for net income per share – diluted
Net income per share – basic
Net income per share – diluted
The following tables set forth the computation of net income per Unit – basic and net income per Unit – diluted for the Operating Partnership (amounts in thousands except per Unit amounts):
Numerator for net income per Unit – basic and diluted:
Allocation to Preference Units
Allocation to premium on redemption of Preference Units
Numerator for net income per Unit – basic and diluted
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit – basic
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units
Denominator for net income per Unit – diluted
Net income per Unit – basic
Net income per Unit – diluted
F-48
Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in ERPOP issuing OP Units to EQR on a one-for-one basis with ERPOP receiving the net cash proceeds of such issuances.
Overview of Share Incentive Plans
The 2019 Share Incentive Plan (the “2019 Plan”), as approved by the Company’s shareholders on June 27, 2019, expires on June 27, 2029 and reserves 11,331,958 Common Shares for issuance. All future awards will be granted under the 2019 Plan until its expiration. As of December 31, 2024, 7,554,970 shares were available for future issuance.
Pursuant to the 2019 Plan and the 2011 Share Incentive Plan (the “2011 Plan”) (collectively the “Share Incentive Plans”), officers, trustees, key employees and consultants of the Company and its subsidiaries may be granted share options to acquire Common Shares (“Options”), including non-qualified share options (“NQSOs”), incentive share options (“ISOs”) and share appreciation rights (“SARs”), or may be granted restricted or non-restricted shares/units (including long-term incentive plan awards), subject to conditions and restrictions. Options, SARs, restricted shares and restricted units are sometimes collectively referred to herein as “Awards.”
The 2011 Plan will terminate when all outstanding Awards have expired or have been exercised/vested. The Board of Trustees may at any time amend or terminate the Share Incentive Plans, but termination will not affect Awards previously granted, absent immediate vesting and cash settlement. Any unexpired Options which had vested prior to such a termination would remain exercisable by the holder.
Employee Long-Term Compensation Awards
The following table summarizes the terms of Awards generally granted to employees:
Options
Restricted Shares
Restricted Units
Options exercised after vesting result in issuance of new Common Shares.
Restricted shareholders generally have the same voting rights and receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder (1).
When certain conditions are met, restricted units convert into an equal number of OP Units, which the holder may exchange for Common Shares on a one-for-one basis or at the option of the Company the cash value of such shares. Restricted unitholders receive quarterly distribution payments on their restricted units at the same rate and on the same date as any other OP Unit holder (1).
Grant/Exercise Price
Granted at the fair market value of Common Shares as of the grant date using the Black-Scholes model as described below.
Granted at the fair market value of Common Shares as of the grant date.
Granted at varying discount rates to the fair market value of Common Shares as of the grant date (2).
Vesting Period
In three equal installments over a three-year period from the grant date.
Three years from the grant date.
Expiration
Ten years from the grant date.
Ten years from the grant date (2).
Upon Employee Termination
Unvested options are canceled.
Unvested restricted shares are canceled.
Unvested restricted units are canceled.
F-49
Valuation Method of Share Options
The fair value of the Option grants is recognized over the requisite service/vesting period of the Options. The fair value for the Company’s Options was estimated at the time the Options were granted using the Black-Scholes option pricing model with the primary grant in each year having the following weighted average assumptions:
Expected volatility (1)
23.6
23.8
21.7
Expected life (2)
5 years
Expected dividend yield (3)
3.48
3.30
3.26
Risk-free interest rate (4)
3.80
4.04
1.66
Exercise price per share (5)
60.96
66.59
91.59
Option valuation per share
11.01
12.67
12.57
The valuation method and assumptions are the same as those the Company used in accounting for Option expense in its consolidated financial statements. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model is only one method of valuing options. Because the Company’s Options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the actual value of the Options to the recipient may be significantly different.
Long-Term Incentive Plan
The Company’s executive compensation program allows the Chief Executive Officer and certain other executive officers to earn from 0% to 200% of the target number of long-term incentive (“LTI”) awards, payable in the form of restricted shares and/or restricted units. No payout would be made for any result below 50% of the target performance metric. The Company’s Total Shareholder Return (“TSR”), Normalized Funds from Operations (“FFO”) per share and Net Debt to Normalized EBITDAre (Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate) results over a forward-looking three-year performance period determine the restricted shares and/or restricted units awarded and are compared to pre-established quantitative performance metrics. The grant date fair value of the awards is estimated using a Monte Carlo model for the TSR portion of the awards, and the resulting expense is recorded over the service period regardless of whether the TSR performance measures are achieved, while the Normalized FFO per share and Net Debt to Normalized EBITDAre portions of the awards are adjusted based on the final achievement obtained. If the executive is retirement-eligible, the grant date fair value is amortized into expense over the first year. All other awards are amortized into expense over the three-year performance and vesting period. If employment is terminated prior to vesting, the restricted shares and restricted units are generally canceled, subject to the retirement benefit provisions discussed below as well as the death and disability provisions of the plan.
The LTI participants receive distributions only on restricted units awarded equal to 10% of the quarterly distributions paid on OP Units during the performance period. At the end of the performance period, LTI participants receive dividends/distributions actually earned on restricted shares or restricted units awarded during the performance period, less any distributions already paid on the restricted units.
The grant date fair value of the TSR portion of the LTI awards is estimated using a multifactor Monte Carlo model to determine share prices for a set of relative awards for which the payout of the award depends on the spread of EQR’s TSR to the TSR of two indices: (a) the FTSE Nareit Apartment Index; and (b) the FTSE Nareit Equity Index. The grant date fair value of the Normalized FFO per share and Net Debt to Normalized EBITDAre portions of the LTI awards are estimated using the closing price of EQR Common Shares on the grant date for the restricted shares and a discounted closing price of EQR Common Shares on the grant date for the restricted units to reflect the “book-up” and liquidity risk inherent in the units. The individual prices determined above are then weighted to arrive at the final values for each restricted share/unit as follows:
Weighted average fair value per restricted share
62.64
61.18
96.84
Weighted average fair value per restricted unit
59.70
58.78
93.32
F-50
The valuation method and assumptions are the same as those the Company used in accounting for the LTI award expense in its consolidated financial statements. The Monte Carlo valuation model is only one method of valuing awards. Because the Company’s restricted shares/units have characteristics significantly different from those of traded shares/units, and because changes in the subjective input assumptions can materially affect the fair value estimate, the actual value of the restricted shares/units to the recipient may be significantly different.
Trustees
All non-employee Trustees are granted Options, restricted shares and/or restricted units that vest one year from the grant date that corresponds to the term for which he or she has been elected to serve.
Retirement Benefits
The Company’s Share Incentive Plans provide for certain benefits upon retirement. The following table summarizes the terms of each retirement eligibility category.
Age 62 for Employees
Rule of 70 for Employees
Age 72 for Trustees
Eligibility
For employees hired prior to January 1, 2009 and who were age 59 or older as of February 1, 2019.
All employees (1).
All non-employee Trustees.
Effect on unvested restricted shares, restricted units and Options
Awards immediately vest, Options continue to be exercisable for the balance of the applicable ten-year option period and restricted units are still subject to the book-up provisions.
Awards continue to vest per the original vesting schedule, subject to certain conditions, Options continue to be exercisable for the balance of the applicable ten-year option period and restricted units are still subject to the book-up provisions.
Effect on LTI Plan
Awards are prorated in proportion to the number of days worked in the first year of the three-year performance period and the individual does not receive any payout of shares or units until the final payout is determined at the end of the three-year performance period.
Under the Company’s definitions of retirement, some of its executive officers, including its Chief Executive Officer, are retirement eligible.
Compensation Expense and Award Activity
The following tables summarize compensation information regarding the restricted shares, restricted units, Options and Employee Share Purchase Plan (“ESPP”) for the three years ended December 31, 2024, 2023 and 2022.
CompensationExpense
CompensationCapitalized
Restricted Units/OptionsIn-Lieu of Bonus (1)
CompensationEquity
DividendsIncurred
12,095
1,812
1,209
Restricted units
15,331
131
1,930
3,220
221
641
70
2,234
33,521
3,139
11,006
1,480
889
15,809
96
525
904
4,436
192
564
80
1,848
34,188
1,793
F-51
10,419
1,176
16,487
87
2,530
1,039
1,889
169
263
718
78
1,510
2,793
33,816
2,159
Compensation expense is generally recognized for Awards as follows:
The Company accelerates the recognition of compensation expense for all Awards for those individuals approaching or meeting the retirement age criteria discussed above. The total compensation expense related to Awards not yet vested at December 31, 2024 is $11.0 million (including the accelerated expenses for individuals approaching or meeting the retirement age criteria discussed above), which is expected to be recognized over a weighted average term of 1.33 years.
The table below summarizes the Award activity of the Share Incentive Plans for the three years ended December 31, 2024, 2023 and 2022:
CommonShares Subjectto Options
WeightedAverageExercise Priceper Option
RestrictedShares
WeightedAverage FairValue perRestricted Share
RestrictedUnits
WeightedAverage Fair Value per Restricted Unit
Balance at December 31, 2021
4,387,833
60.65
309,876
75.17
853,431
66.11
Awards granted
164,199
88.22
182,801
80.52
86.47
Awards exercised/vested
(468,021
52.87
(194,533
70.91
(122,999
66.10
Awards forfeited
(12,968
77.29
(8,226
82.02
Awards expired
(9,683
60.02
Balance at December 31, 2022
4,061,360
62.60
289,918
81.21
953,674
73.57
395,280
66.56
152,217
66.93
236,031
60.38
(495,690
48.52
(118,322
80.76
(75,105
76.38
(1,717
66.73
(3,743
76.43
(70,667
59.14
(981
67.50
Balance at December 31, 2023
3,958,252
64.76
320,070
74.64
1,043,933
68.56
323,201
61.85
194,536
61.58
59.46
(375,436
60.15
(92,555
67.89
(199,943
60.47
(14,557
74.31
(8,952
68.30
(17,812
67.13
Balance at December 31, 2024
64.91
413,099
70.14
1,016,657
68.48
The table below summarizes information regarding the intrinsic value of Options exercised and the fair value of restricted shares/units vested for the three years ended December 31, 2024, 2023 and 2022:
Amounts in thousands except per share amounts
Weighted average grant date fair value per share for Options granted
11.18
12.61
12.45
Aggregate intrinsic value of Options exercised (1)
3,879
6,023
14,511
Fair value of restricted shares vested
5,724
7,783
17,353
Fair value of restricted units vested
12,100
4,965
10,662
F-52
The following table summarizes information regarding Options outstanding and exercisable at December 31, 2024 (aggregate intrinsic value is in thousands):
WeightedAverageRemainingContractual Life in Years
WeightedAverageExercise Price
Aggregate Intrinsic Value (1)
Options Outstanding
4.49
31,443
Options Exercisable
3,296,824
3.76
64.84
27,115
Vested and expected to vest
572,841
8.63
65.34
4,294
As of December 31, 2023 and 2022, 3,342,785 Options (with a weighted average exercise price of $63.83) and 3,549,325 Options (with a weighted average exercise price of $60.80) were exercisable, respectively.
The Company established an Employee Share Purchase Plan to provide each employee and trustee the ability to annually acquire up to $100,000 of Common Shares of EQR. The Company registered 7,000,000 Common Shares under the ESPP, of which 2,353,265 Common Shares remained available for purchase at December 31, 2024. The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a) the closing price for a share on the last day of such quarter; and (b) the greater of: (i) the closing price for a share on the first day of such quarter, and (ii) the average closing price for a share for all the business days in the quarter. The following table summarizes information regarding the Common Shares issued under the ESPP with the net proceeds noted below being contributed to ERPOP in exchange for OP Units (amounts in thousands except share and per share amounts):
Shares issued
Issuance price ranges
$50.60 – $62.11
$47.97– $55.11
$52.33 – $72.51
Issuance proceeds
$3,522
$3,517
$4,178
The Company established a defined contribution plan (the “401(k) Plan”) to provide retirement benefits for employees that meet minimum employment criteria. The Company matches dollar for dollar up to the first 4% of eligible compensation that a participant contributes to the 401(k) Plan for all employees except those defined as highly compensated employees, whose match is 3%. Participants are vested in the Company’s contributions over five years. The Company recognized an expense in the amount of $5.1 million, $5.2 million and $4.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The Company established the SERP to provide certain officers and trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement. The SERP is restricted to investments in Common Shares, certain marketable securities that have been specifically approved and cash equivalents. The deferred compensation liability represented in the SERP and the securities issued to fund such deferred compensation liability are consolidated by the Company and carried on the Company’s balance sheets, and the Company’s Common Shares held in the SERP are accounted for as a reduction to paid in capital (included in general partner’s capital in the Operating Partnership’s financial statements).
On September 30, 2014, the Company filed with the SEC a Form S-3 Registration Statement to register 4,790,000 Common Shares pursuant to a Distribution Reinvestment Plan (the “2014 DRIP”), which included the remaining shares available for issuance under a previous registration. The registration was automatically declared effective the same day and will expire when all 4,790,000 shares have been issued. The Company has 4,608,156 Common Shares available for issuance under the 2014 DRIP at December 31, 2024.
The 2014 DRIP provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of reinvesting cash dividends/distributions in additional Common Shares. Common Shares purchased under the 2014 DRIP may, at the option of EQR, be directly issued by EQR or purchased by EQR’s transfer agent in the open market using participants’ funds. The net proceeds from any Common Share issuances are contributed to ERPOP in exchange for OP Units.
F-53
The Company leases its corporate headquarters from an entity affiliated with Samuel Zell, who was EQR's Chairman of the Board of Trustees until his death in May 2023. This lease is no longer a related party lease as of December 31, 2024 and 2023. The lease term expires on November 30, 2032 and contains two five-year extension options. The amount incurred for such office space for the years ended December 31, 2024, 2023 and 2022 were approximately $1.9 million, $1.9 million and $1.7 million, respectively. The Company believes these amounts approximate market rates for such rental space.
Commitments
Real Estate Development Commitments
As of December 31, 2024, the Company has both consolidated and unconsolidated real estate projects under development. The following table summarizes the gross remaining total project costs for the Company’s projects under development at December 31, 2024 (total project costs remaining in thousands):
Total Project Costs Remaining (1)
Projects Under Development
Consolidated
123,087
Unconsolidated
206,583
Total Projects Under Development
2,024
329,670
We have entered into, and may continue in the future to enter into, joint venture agreements with third-party partners for the development of multifamily rental properties. The joint venture agreements with each development partner include buy-sell provisions that provide the right, but not the obligation, for the Company to acquire each respective partner’s interests or sell its interests at any time following the occurrence of certain pre-defined events described in the joint venture agreements. See Note 5 for additional discussion.
Other Commitments
We have entered into, and may continue in the future to enter into, real estate technology and other real estate fund investments. As of December 31, 2024, the Company has invested in ten separate such investments totaling $42.7 million with aggregate remaining commitments of approximately $15.3 million.
Employment Agreements
The Company entered into a retirement benefits agreement with its former Chairman and a deferred compensation agreement with one former executive officer. During the years ended December 31, 2024, 2023 and 2022, the Company recognized compensation expense of $0.2 million, $0.6 million and $(0.2) million, respectively, related to these agreements.
The following table summarizes the Company’s contractual obligations for deferred compensation for the next five years and thereafter as of December 31, 2024:
(Payments) Due by Year (in thousands)
Other Long-Term Liabilities:
Deferred Compensation (1)
(840
(2,939
(7,139
F-54
Contingencies
Litigation and Legal Matters
The Company, as an owner of real estate, is subject to various federal, state and local laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future.
Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker, who is the Company’s chief executive officer, decides how resources are allocated and assesses performance on a recurring basis at least quarterly.
The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance of our apartment communities geographically by market on a same store basis and in total on a non-same store basis, which represent our operating segments.
The Company has aggregated its geographic same store operating segments into one reportable segment called same store. Management believes the properties in the same store reportable segment have similar economic characteristics, facilities, services and residents, which is in alignment with the required aggregation criteria. The following reflects the two reportable segments for the Company:
F-55
The Company has non-residential activities included in each of its reportable segments, which account for less than 4.0% of total revenues for the year ended December 31, 2024 and serve as an amenity for our residential residents. All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the years ended December 31, 2024, 2023 and 2022, respectively.
The primary financial measure for the Company’s reportable segments is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.
The following table presents a reconciliation of net income per the consolidated statements of operations to NOI for the years ended December 31, 2024, 2023 and 2022, respectively (amounts in thousands):
(2,193
13,664
282,920
1,862,903
The following table presents NOI from our rental real estate for the years ended December 31, 2024, 2023 and 2022, respectively (amounts in thousands):
RentalIncome
OperatingExpenses
NOI
Same store (1)
479,711
148,030
331,681
466,980
143,983
322,997
450,635
132,858
317,777
125,214
28,208
97,006
121,113
26,759
94,354
122,660
26,511
96,149
96,969
21,127
75,842
92,847
20,794
72,053
86,728
19,506
67,222
Subtotal - Southern California
701,894
197,365
504,529
680,940
191,536
489,404
660,023
178,875
481,148
431,323
129,084
302,239
424,547
128,742
295,805
415,173
124,192
290,981
438,914
137,786
301,128
419,628
132,610
287,018
417,210
138,570
278,640
494,060
201,857
292,203
476,319
193,311
283,008
434,820
187,218
247,602
327,134
94,576
232,558
314,929
91,977
222,952
270,899
82,523
188,376
285,539
81,843
203,696
278,170
78,418
199,752
281,959
79,037
202,922
71,061
21,600
49,461
71,067
21,328
49,739
67,785
19,569
48,216
73,493
30,366
43,127
74,593
31,713
42,880
61,897
27,618
34,279
Total same store
2,609,766
837,602
1,772,164
Non-same store
100,419
36,350
64,069
35,474
15,117
20,357
74,379
29,758
44,621
Total reportable segments
2,923,837
930,827
1,993,010
2,775,667
884,752
1,890,915
2,684,145
867,360
1,816,785
Other (2)
56,271
30,999
25,272
98,297
41,937
56,360
51,035
4,917
46,118
Totals
872,277
F-56
The following table presents a reconciliation of operating expenses for each reportable segment for the years ended December 31, 2024, 2023 and 2022, respectively (amounts in thousands):
Same Store (1)
Non-Same Store
Real estate taxes
368,087
12,050
380,137
356,847
3,929
360,776
350,928
9,822
360,750
On-site payroll
168,006
7,335
175,341
167,486
170,675
161,297
5,156
166,453
Utilities
139,116
5,860
144,976
135,721
2,664
138,385
133,579
5,443
139,022
Repairs and maintenance
118,829
5,583
124,412
116,529
1,961
118,490
107,702
3,538
111,240
100,439
5,522
105,961
93,052
3,374
96,426
84,096
5,799
89,895
The following table presents a reconciliation of total assets and capital expenditures as of and for the years ended December 31, 2024 and 2023, respectively (amounts in thousands):
17,638,845
2,322,642
872,689
18,190,640
782,516
1,061,408
Capital expenditures
22,028
5,409
278,149
32,023
9,170
319,342
Subsequent to December 31, 2024, the Company:
183,000
F-57
Schedule III - Real Estate and Accumulated Depreciation
Overall Summary
Investmentin RealEstate, Gross
AccumulatedDepreciation
Investmentin RealEstate, Net
Encumbrances (1)
Wholly Owned Unencumbered
262
72,108
26,060,716,604
(8,995,415,392
17,065,301,212
Wholly Owned Encumbered
8,223
3,137,623,911
(1,145,441,380
1,992,182,531
1,602,386,003
29,198,340,515
(10,140,856,772
19,057,483,743
Partially Owned Unencumbered
2,388
736,698,865
(248,342,763
488,356,102
Partially Owned Encumbered
268
35,752,011
(23,263,607
12,488,404
28,303,802
772,450,876
(271,606,370
500,844,506
Total Unencumbered Properties
273
74,496
26,797,415,469
(9,243,758,155
17,553,657,314
Total Encumbered Properties
8,491
3,173,375,922
(1,168,704,987
2,004,670,935
1,630,689,805
Total Consolidated Investment in Real Estate
29,970,791,391
(10,412,463,142
19,558,328,249
S-1
Encumbrances Reconciliation
Portfolio/Entity Encumbrances
Number ofPropertiesEncumbered by
See PropertiesWith Note:
Amount
Archstone Master Property Holdings LLC
H
547,116,704
Individual Property Encumbrances
1,083,573,101
Total Encumbrances per Financial Statements
S-2
Schedule III – Real Estate and Accumulated Depreciation
The changes in total real estate for the years ended December 31, 2024, 2023 and 2022 are as follows:
28,088,754
28,272,906
Acquisitions and development
1,717,217
500,221
214,903
Improvements
304,200
321,082
225,136
Dispositions and other
(763,264
(197,419
(624,191
The changes in accumulated depreciation for the years ended December 31, 2024, 2023 and 2022 are as follows:
9,810,337
9,027,850
8,354,282
(350,065
(106,222
(208,600
10,412,463
S-3
Initial Cost toCompany
CostCapitalizedSubsequent toAcquisition(Improvements,net) (E)
Gross Amount Carried atClose of Period 12/31/24
Apartment Name
Non-ResidentialComponents
Date ofConstruction
Building &Fixtures
Building &Fixtures (A)
Total (B)
AccumulatedDepreciation (C)
Investmentin RealEstate, Net at12/31/24
Encumbrances
Wholly Owned Unencumbered:
100 K Apartments (fka 100K Street)
2018
222
15,600,000
70,296,069
627,994
70,924,063
86,524,063
(17,822,446
68,701,617
170 Amsterdam
New York, NY
G
2015
236
112,096,955
1,367,221
113,464,176
(43,049,429
70,414,747
175 Kent
Brooklyn, NY
2011
113
22,037,831
53,962,169
3,082,404
57,044,573
79,082,404
(28,045,068
51,037,336
180 Montague (fka Brooklyn Heights)
2000
193
32,400,000
92,675,228
6,655,948
99,331,176
131,731,176
(44,741,960
86,989,216
180 Riverside Boulevard
1998
516
144,968,250
138,346,681
23,943,297
162,289,978
307,258,228
(108,359,879
198,898,349
1210 Mass
2004
144
9,213,513
36,559,189
6,439,066
42,998,255
52,211,768
(27,955,324
24,256,444
1401 Joyce on Pentagon Row
Arlington, VA
326
9,780,000
89,668,165
10,408,727
100,076,892
109,856,892
(55,775,349
54,081,543
1500 Mass Ave
1951
54,638,298
40,361,702
19,738,260
60,099,962
114,738,260
(39,473,302
75,264,958
1800 Oak (fka Rosslyn)
2003
314
31,400,000
109,005,734
14,903,927
123,909,661
155,309,661
(56,682,750
98,626,911
2201 Pershing Drive
2012
188
11,321,198
49,674,175
3,806,432
53,480,607
64,801,805
(24,968,240
39,833,565
2201 Wilson
219
21,900,000
78,724,663
10,412,238
89,136,901
111,036,901
(39,415,588
71,621,313
2400 M St
2006
359
30,006,593
114,013,785
6,481,056
120,494,841
150,501,434
(77,893,669
72,607,765
2501 Porter
1988
202
13,000,000
75,271,179
9,011,187
84,282,366
97,282,366
(39,924,592
57,357,774
315 on A
Boston, MA
2013
14,450,070
115,824,930
2,957,010
118,781,940
133,232,010
(44,372,786
88,859,224
340 Fremont (fka Rincon Hill)
San Francisco, CA
2016
348
42,000,000
248,607,902
2,068,617
250,676,519
292,676,519
(81,954,131
210,722,388
341 Nevins
(F)
3,621,717
308,661
3,930,378
3003 Van Ness (fka Van Ness)
1970
625
56,300,000
141,191,580
15,993,278
157,184,858
213,484,858
(71,185,587
142,299,271
425 Broadway
Santa Monica, CA
2001
101
12,600,000
34,394,772
4,481,987
38,876,759
51,476,759
(18,329,413
33,147,346
425 Mass
2009
28,150,000
138,600,000
13,657,653
152,257,653
180,407,653
(79,337,182
101,070,471
455 Eye Street
2017
174
11,941,407
61,418,689
610,012
62,028,701
73,970,108
(18,424,614
55,545,494
4th and Hill
Los Angeles, CA
13,131,456
1,868,544
15,000,000
55 West Fifth I & II (fka Townhouse Plaza and Gardens)
San Mateo, CA
1964/1972
241
21,041,710
71,931,323
20,283,614
92,214,937
113,256,647
(47,267,978
65,988,669
600 Washington
135
32,852,000
43,140,551
5,072,853
48,213,404
81,065,404
(30,924,462
50,140,942
660 Washington (fka Boston Common)
420
106,100,000
166,311,679
22,672,070
188,983,749
295,083,749
(80,772,468
214,311,281
70 Greene
Jersey City, NJ
2010
480
28,108,899
236,763,553
9,574,610
246,338,163
274,447,062
(123,961,737
150,485,325
71 Broadway
1997
22,611,600
77,492,171
22,717,412
100,209,583
122,821,183
(72,000,593
50,820,590
77 Bluxome
2007
102
5,249,124
18,609,876
855,764
19,465,640
24,714,764
(9,461,250
15,253,514
77 Park Avenue (fka Hoboken)
Hoboken, NJ
301
27,900,000
168,992,440
12,564,427
181,556,867
209,456,867
(80,555,800
128,901,067
777 Sixth
2002
294
65,352,706
65,747,294
11,645,774
77,393,068
142,745,774
(43,457,096
99,288,678
855 Brannan
41,363,921
282,730,067
2,130,197
284,860,264
326,224,185
(80,192,969
246,031,216
929 Mass (fka 929 House)
Cambridge, MA
1975
127
3,252,993
21,745,595
10,092,794
31,838,389
35,091,382
(26,006,815
9,084,567
Academy Village
North Hollywood, CA
1989
248
25,000,000
23,593,194
16,291,180
39,884,374
64,884,374
(26,975,025
37,909,349
Acappella
Pasadena, CA
143
5,839,548
29,360,452
2,982,614
32,343,066
38,182,614
(17,814,023
20,368,591
Aero Apartments
Alameda, CA
2021
200
13,107,242
100,584,289
138,538
100,722,827
113,830,069
(15,046,320
98,783,749
Alban Towers
1934
229
18,900,000
89,794,201
8,515,225
98,309,426
117,209,426
(43,813,456
73,395,970
Alborada
Fremont, CA
1999
442
24,310,000
59,214,129
11,943,477
71,157,606
95,467,606
(58,315,018
37,152,588
Alcott Apartments (fka West End Tower)
470
10,424,000
398,075,512
1,334,606
399,410,118
409,834,118
(49,143,736
360,690,382
Alcyone
Seattle, WA
162
11,379,497
49,360,503
3,159,670
52,520,173
63,899,670
(20,707,957
43,191,713
Altitude (fka Village at Howard Hughes, The (Lots 1 & 2))
545
43,783,485
150,234,305
2,353,076
152,587,381
196,370,866
(51,608,217
144,762,649
Alton, The (fka Millikan)
Irvine, CA
344
11,049,027
96,523,927
970,764
97,494,691
108,543,718
(31,339,356
77,204,362
Arbor Terrace
Sunnyvale, CA
1979
177
9,057,300
18,483,642
13,305,770
31,789,412
40,846,712
(26,091,131
14,755,581
Arbour Square
Westminster, CO
10,072,375
84,691,084
198,088
84,889,172
94,961,547
(2,629,167
92,332,380
Arches, The
1974
410
26,650,000
62,850,000
24,315,290
87,165,290
113,815,290
(38,618,955
75,196,335
S-4
CostCapitalized Subsequent to Acquisition(Improvements,net) (E)
Artisan on Second
2008
118
8,000,400
36,074,600
4,736,138
40,810,738
48,811,138
(19,475,131
29,336,007
Artistry Emeryville (fka Emeryville)
Emeryville, CA
1994
12,300,000
61,466,267
10,878,111
72,344,378
84,644,378
(35,238,629
49,405,749
Atelier
120
32,401,680
47,135,432
1,208,984
48,344,416
80,746,096
(17,577,731
63,168,365
Aventine Littleton
Highlands Ranch, CO
227
8,486,099
83,049,404
871
83,050,275
91,536,374
(787,499
90,748,875
Axis at Shady Grove
Rockville, MD
366
14,745,774
90,503,831
1,141,565
91,645,396
106,391,170
(27,939,694
78,451,476
Ayla Stonebriar
289
7,674,733
68,474,638
84,483
68,559,121
76,233,854
(3,144,256
73,089,598
Azure (fka Mission Bay-Block 13)
32,855,115
153,333,734
2,405,041
155,738,775
188,593,890
(54,676,637
133,917,253
Bay Hill
Long Beach, CA
160
7,600,000
27,437,239
5,449,954
32,887,193
40,487,193
(23,189,303
17,297,890
Beatrice, The
114,351,405
165,648,595
4,597,512
170,246,107
284,597,512
(79,174,251
205,423,261
Bella Vista I, II, III Combined
Woodland Hills, CA
2003-2007
579
31,682,754
121,095,786
18,903,627
139,999,413
171,682,167
(88,818,200
82,863,967
Belle Arts Condominium Homes, LLC
Bellevue, WA
63,158
236,157
2,098
238,255
301,413
(131,985
169,428
Belle Fontaine
Marina Del Rey, CA
9,098,808
28,701,192
3,714,189
32,415,381
41,514,189
(15,616,532
25,897,657
Bishop, The
Sandy Springs, GA
2019
425
15,745,431
92,472,149
260,081
92,732,230
108,477,661
(4,310,563
104,167,098
Breakwater at Marina Del Rey
1964-1969
224
73,189,262
3,558,680
76,747,942
(35,157,611
41,590,331
Briarwood (CA)
1985
9,991,500
22,247,278
14,422,999
36,670,277
46,661,777
(25,356,952
21,304,825
Brodie, The
8,639,904
79,257,130
2,476,608
81,733,738
90,373,642
(24,253,266
66,120,376
Brooklyner, The (fka 111 Lawrence)
490
40,099,922
221,438,631
6,912,360
228,350,991
268,450,913
(109,500,931
158,949,982
C on Pico
2014
94
17,125,766
28,074,234
818,393
28,892,627
46,018,393
(10,539,687
35,478,706
Carlyle Mill
Alexandria, VA
317
10,000,000
51,367,913
13,534,438
64,902,351
74,902,351
(47,182,660
27,719,691
Carmel Terrace
San Diego, CA
1988-1989
384
2,288,300
20,596,281
25,499,178
46,095,459
48,383,759
(35,004,298
13,379,461
Cascade
477
23,751,564
149,406,957
2,373,368
151,780,325
175,531,889
(44,898,853
130,633,036
Centennial (fka Centennial Court & Centennial Tower)
1991/2001
408
9,700,000
70,080,378
18,234,587
88,314,965
98,014,965
(61,624,215
36,390,750
Centre Club Combined
Ontario, CA
1994 & 2002
412
7,436,000
33,014,789
13,968,006
46,982,795
54,418,795
(36,102,209
18,316,586
Chelsea Square
Redmond, WA
1991
3,397,100
9,289,074
3,432,782
12,721,856
16,118,956
(11,147,561
4,971,395
Chloe on Madison (fka 1401 E. Madison)
137
10,401,958
53,913,565
146,803
54,060,368
64,462,326
(11,429,642
53,032,684
Chloe on Union (fka Chloe)
117
14,835,571
39,359,650
3,365,998
42,725,648
57,561,219
(13,576,186
43,985,033
Church Corner
1987
85
5,220,000
16,744,643
3,983,507
20,728,150
25,948,150
(14,782,486
11,165,664
Circa Fitzsimons
2020
280
9,241,400
86,070,796
987,679
87,058,475
96,299,875
(15,085,497
81,214,378
City Gate at Cupertino (fka Cupertino)
Cupertino, CA
40,400,000
95,937,046
9,253,509
105,190,555
145,590,555
(48,687,591
96,902,964
City Square Bellevue (fka Bellevue)
191
15,100,000
41,876,257
7,731,297
49,607,554
64,707,554
(22,024,588
42,682,966
Clarendon, The
2005
292
30,400,340
103,824,660
6,868,159
110,692,819
141,093,159
(54,896,760
86,196,399
Cleo, The
92
6,615,467
14,829,335
5,100,977
19,930,312
26,545,779
(12,835,917
13,709,862
Connecticut Heights
518
27,600,000
114,002,295
12,897,892
126,900,187
154,500,187
(58,008,704
96,491,483
Courthouse Plaza
1990
396
87,386,024
10,002,015
97,388,039
(46,281,760
51,106,279
Creekside (San Mateo)
9,606,600
21,193,232
6,628,191
27,821,423
37,428,023
(24,029,865
13,398,158
Crest at Park Central
11,340,882
58,809,330
293,390
59,102,720
70,443,602
(3,439,005
67,004,597
Cronins Landing
Waltham, MA
32,300,000
85,119,324
17,600,133
102,719,457
135,019,457
(48,196,938
86,822,519
Crystal Place
1986
181
17,200,000
47,918,975
8,177,204
56,096,179
73,296,179
(25,503,647
47,792,532
Dalton, The
22,947,777
95,334,754
643,225
95,977,979
118,925,756
(22,087,606
96,838,150
Deerwood (SD)
316
2,082,095
18,739,815
19,444,763
38,184,578
40,266,673
(35,443,578
4,823,095
Del Mar Ridge
7,801,824
36,948,176
11,119,607
48,067,783
55,869,607
(25,384,230
30,485,377
Den, The
325
12,661,724
103,636,340
204,171
103,840,511
116,502,235
(2,939,956
113,562,279
Eagle Canyon
Chino Hills, CA
252
1,808,900
16,274,361
14,748,935
31,023,296
32,832,196
(26,742,415
6,089,781
Edge, The (fka 4885 Edgemoor Lane)
Bethesda, MD
154
72,796,939
65,946
72,862,885
(10,466,306
62,396,579
S-5
Edgemont at Bethesda Metro
123
13,092,552
43,907,448
6,161,174
50,068,622
63,161,174
(24,262,080
38,899,094
Emerson Place
1962
444
14,855,000
57,566,636
40,288,465
97,855,101
112,710,101
(84,466,394
28,243,707
Encore at Sherman Oaks, The
Sherman Oaks, CA
8,700,000
25,446,003
6,159,156
31,605,159
40,305,159
(16,701,782
23,603,377
Estancia at Santa Clara (fka Santa Clara)
123,759,804
12,176,110
135,935,914
(59,130,887
76,805,027
Eviva on Cherokee
274
10,507,626
100,037,204
2,848,513
102,885,717
113,393,343
(27,019,110
86,374,233
Flora
Austin, TX
194
5,733,088
32,343,349
1,250,616
33,593,965
39,327,053
(8,095,151
31,231,902
Fremont Center
322
25,800,000
78,753,114
13,661,396
92,414,510
118,214,510
(40,652,050
77,562,460
Gaithersburg Station
Gaithersburg, MD
17,500,000
74,678,917
7,691,420
82,370,337
99,870,337
(35,632,776
64,237,561
Gateway at Malden Center
Malden, MA
203
9,209,780
25,722,666
20,343,033
46,065,699
55,275,479
(35,826,201
19,449,278
Girard
102,450,328
1,531,330
103,981,658
(29,871,615
74,110,043
Hampshire Place
259
10,806,000
30,335,330
13,731,398
44,066,728
54,872,728
(29,000,237
25,872,491
Harbor Steps
761
59,403,601
158,829,432
68,263,473
227,092,905
286,496,506
(144,638,194
141,858,312
Hathaway
385
2,512,500
22,611,912
17,989,143
40,601,055
43,113,555
(35,125,691
7,987,864
Helios (fka 2nd+Pine)
18,061,674
206,762,591
1,612,412
208,375,003
226,436,677
(61,522,435
164,914,242
Helix Apartments
Weymouth, MA
6,592,480
56,165,407
239,690
56,405,097
62,997,577
(2,645,271
60,352,306
Heritage at Stone Ridge
Burlington, MA
180
10,800,000
31,808,335
8,253,204
40,061,539
50,861,539
(24,738,949
26,122,590
Heritage Ridge
Lynwood, WA
197
6,895,000
18,983,597
6,252,196
25,235,793
32,130,793
(17,082,975
15,047,818
Hesby
23,299,892
102,700,108
4,210,207
106,910,315
130,210,207
(42,734,637
87,475,570
Highlands at South Plainfield
South Plainfield, NJ
10,080,000
37,526,912
4,510,884
42,037,796
52,117,796
(27,797,877
24,319,919
Hikari
128
9,435,760
32,564,240
3,270,446
35,834,686
45,270,446
(17,467,531
27,802,915
Hudson Crossing
23,420,000
69,977,699
7,833,359
77,811,058
101,231,058
(51,636,566
49,594,492
Hudson Point
182
5,350,000
41,114,074
9,663,448
50,777,522
56,127,522
(36,050,691
20,076,831
Huxley, The
Redwood City, CA
18,775,028
89,336,651
779,080
90,115,731
108,890,759
(20,088,951
88,801,808
Indie Deep Ellum
231
12,253,503
63,853,833
1,324,924
65,178,757
77,432,260
(11,724,325
65,707,935
Iris O4W
Atlanta, GA
320
20,663,801
105,762,510
87,400
105,849,910
126,513,711
(5,391,374
121,122,337
Ivory Wood
Bothell, WA
2,732,800
13,888,282
6,907,845
20,796,127
23,528,927
(12,447,855
11,081,072
Jia (fka Chinatown Gateway)
14,791,831
78,286,423
3,187,386
81,473,809
96,265,640
(36,024,718
60,240,922
Junction 47 (fka West Seattle)
206
11,726,305
56,581,665
1,238,874
57,820,539
69,546,844
(21,867,443
47,679,401
Juniper Sandy Springs
230
8,668,700
64,989,813
1,048,876
66,038,689
74,707,389
(12,381,430
62,325,959
Kelvin, The (fka Modera)
15,521,552
64,853,448
1,941,324
66,794,772
82,316,324
(25,417,758
56,898,566
Kia Ora Park
Plano, TX
250
7,040,930
56,605,865
422,555
57,028,420
64,069,350
(2,750,760
61,318,590
Kilby
258
6,431,940
64,187,474
1,286,004
65,473,478
71,905,418
(12,149,395
59,756,023
Landings at Port Imperial
W. New York, NJ
276
27,246,045
37,741,050
18,746,774
56,487,824
83,733,869
(44,596,858
39,137,011
Lane
13,142,946
71,942,751
644,249
72,587,000
85,729,946
(16,151,778
69,578,168
Lex, The
San Jose, CA
21,817,512
158,778,598
3,032,983
161,811,581
183,629,093
(39,828,517
143,800,576
Liberty Park
Braintree, MA
5,977,504
26,749,111
10,038,549
36,787,660
42,765,164
(27,291,059
15,474,105
Liberty Tower
235
16,382,822
83,817,078
10,837,071
94,654,149
111,036,971
(48,905,180
62,131,791
Lincoln Heights
Quincy, MA
336
5,928,400
33,595,262
18,008,499
51,603,761
57,532,161
(45,980,745
11,551,416
Lofts at Kendall Square (fka Kendall Square)
186
18,696,674
78,445,657
9,192,241
87,637,898
106,334,572
(40,718,870
65,615,702
Lofts at Kendall Square ll (fka 249 Third Street)
84
4,603,326
44,187,266
589,775
44,777,041
49,380,367
(9,253,629
40,126,738
Longacre House
293
73,170,045
53,962,510
10,408,276
64,370,786
137,540,831
(37,059,900
100,480,931
Longfellow Place
710
38,264,917
132,175,915
114,454,890
246,630,805
284,895,722
(201,138,635
83,757,087
3,200,426
137,738,522
140,938,948
Lorien Ivy (fka Laguna Clara)
1972
10,441,994
22,572,843
44,425,099
66,997,942
77,439,936
(28,838,462
48,601,474
S-6
Luna Upper Westside
345
14,847,420
108,325,394
1,280,201
109,605,595
124,453,015
(17,841,260
106,611,755
Lyric Sugar Hill
Sugar Hill, GA
7,150,971
78,240,138
18,160
78,258,298
85,409,269
(905,424
84,503,845
Madox
9,679,635
64,594,205
2,233,937
66,828,142
76,507,777
(17,666,502
58,841,275
Mantena
98
22,346,513
61,501,158
2,380,301
63,881,459
86,227,972
(28,686,989
57,540,983
Mara Pacific Beach
25,360,682
87,755,429
2,954,498
90,709,927
116,070,609
(12,811,205
103,259,404
Marina 41 (fka Marina Del Rey)
1973
623
168,842,442
13,517,780
182,360,222
(84,683,461
97,676,761
Mariposa at Playa Del Rey (fka Playa Del Rey)
Playa Del Rey, CA
354
60,900,000
89,311,482
17,334,549
106,646,031
167,546,031
(46,730,483
120,815,548
Milano Lofts
1925/2006
99
8,125,216
27,378,784
5,641,503
33,020,287
41,145,503
(16,078,063
25,067,440
Milehouse
353
13,511,360
111,154,511
188,027
111,342,538
124,853,898
(3,239,232
121,614,666
Mill Creek
Milpitas, CA
12,858,693
57,168,503
20,951,957
78,120,460
90,979,153
(57,368,649
33,610,504
Milo
319
15,957,975
153,331,358
1,974,617
155,305,975
171,263,950
(21,793,704
149,470,246
Mosaic at Metro
Hyattsville, MD
59,580,898
2,776,443
62,357,341
(34,287,468
28,069,873
Mountain View Redevelopment
Mountain View, CA
2,677,902
Mozaic at Union Station
272
8,500,000
52,529,446
6,440,024
58,969,470
67,469,470
(35,914,649
31,554,821
Murray Hill Tower (fka Murray Hill)
75,800,000
102,705,401
17,107,094
119,812,495
195,612,495
(57,576,757
138,035,738
Next on Sixth
52,509,906
136,635,650
1,600,079
138,235,729
190,745,635
(35,209,518
155,536,117
North Pier at Harborside
297
4,000,159
94,290,590
15,892,159
110,182,749
114,182,908
(73,837,897
40,345,011
Northglen
Valencia, CA
234
9,360,000
20,778,553
9,000,176
29,778,729
39,138,729
(22,985,880
16,152,849
Northpark
Burlingame, CA
510
38,607,000
77,472,217
28,637,599
106,109,816
144,716,816
(58,051,768
86,665,048
Oak Park Combined
Agoura Hills, CA
1989 & 1990
3,390,700
30,517,274
14,182,912
44,700,186
48,090,886
(41,526,668
6,564,218
Oaks
Santa Clarita, CA
520
23,400,000
61,020,438
21,301,558
82,321,996
105,721,996
(53,812,640
51,909,356
Ocean Crest
Solana Beach, CA
5,111,200
11,910,438
6,012,813
17,923,251
23,034,451
(15,450,081
7,584,370
Odin (fka Tallman)
16,807,519
64,519,515
1,048,172
65,567,687
82,375,206
(24,364,634
58,010,572
Olivian at the Realm
Lewisville, TX
14,854,564
109,313,571
1,557,136
110,870,707
125,725,271
(17,198,164
108,527,107
One Henry Adams
30,224,393
139,704,146
1,477,330
141,181,476
171,405,869
(45,340,953
126,064,916
Osprey
18,121,932
116,950,910
1,054,517
118,005,427
136,127,359
(18,542,398
117,584,961
Pacific Place
430
32,250,000
110,750,000
13,665,179
124,415,179
156,665,179
(50,954,026
105,711,153
Packard Building
61
5,911,041
19,954,959
1,607,545
21,562,504
27,473,545
(8,015,095
19,458,450
Parc 77
1903
40,504,000
18,025,679
8,180,253
26,205,932
66,709,932
(18,397,284
48,312,648
Parc Cameron
1927
166
37,600,000
9,855,597
8,887,013
18,742,610
56,342,610
(14,411,317
41,931,293
Parc Coliseum
1910
52,654,000
23,045,751
11,028,103
34,073,854
86,727,854
(24,395,020
62,332,834
Parc East Towers
1977
324
102,163,000
108,989,402
16,972,442
125,961,844
228,124,844
(78,720,690
149,404,154
Parc on Powell (fka Parkside at Emeryville)
173
16,667,059
65,473,337
3,699,491
69,172,828
85,839,887
(25,839,058
60,000,829
Park Connecticut
142
13,700,000
59,087,519
6,870,405
65,957,924
79,657,924
(28,176,709
51,481,215
Park West (CA)
1987/1990
3,033,500
27,302,383
16,924,077
44,226,460
47,259,960
(39,652,427
7,607,533
Parkside
Union City, CA
208
6,246,700
11,827,453
9,297,068
21,124,521
27,371,221
(17,841,159
9,530,062
Pearl, The (WA)
6,972,585
26,527,415
1,550,194
28,077,609
35,050,194
(10,849,047
24,201,147
Pearl MDR (fka Oakwood Marina Del Rey)
1969
597
120,795,359
36,892,605
157,687,964
(65,983,790
91,704,174
Pegasus
1949/2003
18,094,052
81,905,948
12,836,707
94,742,655
112,836,707
(49,546,073
63,290,634
Penman, The
9,942,043
68,921,901
860,554
69,782,455
79,724,498
(6,323,549
73,400,949
Portofino
176
3,572,400
14,660,994
6,120,719
20,781,713
24,354,113
(17,633,658
6,720,455
Portofino (Val)
8,640,000
21,487,126
8,202,123
29,689,249
38,329,249
(23,253,694
15,075,555
Portside Towers
1992-1997
22,487,006
96,842,913
33,103,285
129,946,198
152,433,204
(113,270,039
39,163,165
Potrero 1010
453
40,830,011
181,924,463
3,159,833
185,084,296
225,914,307
(64,071,470
161,842,837
S-7
Prado (fka Glendale)
Glendale, CA
264
67,977,313
8,178,867
76,156,180
(35,098,842
41,057,338
Prime, The
34,625,000
77,879,740
13,367,582
91,247,322
125,872,322
(49,221,249
76,651,073
Prism at Park Avenue South (fka 400 Park Avenue South)
76,292,169
171,812,112
840,595
172,652,707
248,944,876
(65,677,740
183,267,136
Promenade at Town Center I & II
28,200,000
69,795,915
20,655,523
90,451,438
118,651,438
(61,874,920
56,776,518
Providence
3,573,621
19,055,505
7,347,637
26,403,142
29,976,763
(17,862,487
12,114,276
Quarry Hills
26,900,000
84,411,162
8,909,242
93,320,404
120,220,404
(42,235,358
77,985,046
Radiant Fairfax Ridge
Fairfax, VA
213
7,352,547
63,018,744
1,170,039
64,188,783
71,541,330
(12,292,324
59,249,006
Radius Uptown
372
13,644,960
121,899,084
2,953,824
124,852,908
138,497,868
(35,316,070
103,181,798
Redmond Court
10,300,000
33,488,745
6,607,166
40,095,911
50,395,911
(18,450,539
31,945,372
Reserve at Burlington, The
20,250,000
114,476,933
2,243,718
116,720,651
136,970,651
(19,437,981
117,532,670
Reserve at Clarendon Centre, The
10,500,000
52,812,935
9,611,626
62,424,561
72,924,561
(43,531,608
29,392,953
Reserve at Eisenhower, The
226
6,500,000
34,585,059
6,790,496
41,375,555
47,875,555
(30,337,242
17,538,313
Reserve at Empire Lakes
Rancho Cucamonga, CA
467
16,345,000
73,080,670
16,468,702
89,549,372
105,894,372
(55,055,730
50,838,642
Reserve at Fairfax Corner
652
15,804,057
63,129,050
17,047,229
80,176,279
95,980,336
(60,469,121
35,511,215
Reserve at Mountain View (fka Mountain View)
1965
27,000,000
33,029,605
11,167,784
44,197,389
71,197,389
(22,255,197
48,942,192
Reserve at Potomac Yard
588
11,918,917
68,862,641
24,131,797
92,994,438
104,913,355
(65,616,630
39,296,725
Reserve at Town Center I-III (WA)
Mill Creek, WA
2001, 2009, 2014
584
16,768,705
77,623,664
15,529,051
93,152,715
109,921,420
(54,632,585
55,288,835
Reverb (fka 9th and W)
104,834,400
47,973
104,882,373
(7,293,212
97,589,161
Rianna I & II
2000/2002
156
4,430,000
29,298,096
5,608,591
34,906,687
39,336,687
(18,430,847
20,905,840
Richmond Row
Suwanee, GA
10,030,008
88,345,634
292,493
88,638,127
98,668,135
(8,122,228
90,545,907
Ridgewood Village I&II
11,809,500
34,004,048
9,220,363
43,224,411
55,033,911
(35,825,485
19,208,426
Riva Terra I (fka Redwood Shores)
304
34,963,355
84,587,658
12,113,882
96,701,540
131,664,895
(45,814,764
85,850,131
Riva Terra II (fka Harborside)
149
17,136,645
40,536,531
5,617,618
46,154,149
63,290,794
(20,963,384
42,327,410
Rivington, The
240
34,340,640
112,112,152
6,579,399
118,691,551
153,032,191
(34,234,569
118,797,622
Rivington II, The
882,999
Rosecliff II
130
4,922,840
30,202,160
4,731,123
34,933,283
39,856,123
(17,016,924
22,839,199
Sakura Crossing
14,641,990
42,858,010
2,742,163
45,600,173
60,242,163
(23,333,605
36,908,558
Savanna Nine Mile
Erie, CO
287
9,386,048
98,792,001
456,465
99,248,466
108,634,514
(10,144,496
98,490,018
Saxton
38,805,400
128,652,023
1,104,035
129,756,058
168,561,458
(29,504,458
139,057,000
Sheffield Court
3,342,381
31,337,332
30,553,290
61,890,622
65,233,003
(51,822,110
13,410,893
Siena Terrace
Lake Forest, CA
356
8,900,000
24,083,024
10,752,328
34,835,352
43,735,352
(29,403,293
14,332,059
Sixes Ridge
Holly Springs, GA
340
7,959,831
78,245,386
126,506
78,371,892
86,331,723
(3,674,199
82,657,524
Skycrest
10,560,000
25,574,457
7,516,117
33,090,574
43,650,574
(26,345,339
17,305,235
Skyhouse South
14,182,277
101,911,477
1,749,357
103,660,834
117,843,111
(19,301,723
98,541,388
Skylark
1,781,600
16,731,916
6,619,820
23,351,736
25,133,336
(20,269,877
4,863,459
Skyview
Rancho Santa Margarita, CA
260
3,380,000
21,952,863
8,164,469
30,117,332
33,497,332
(25,203,554
8,293,778
SoMa II
29,406,606
5,947,247
35,353,853
Sonterra at Foothill Ranch
Foothill Ranch, CA
7,503,400
24,048,507
7,686,501
31,735,008
39,238,408
(27,744,166
11,494,242
South City Station (fka South San Francisco)
368
68,900,000
79,476,861
13,417,106
92,893,967
161,793,967
(41,097,113
120,696,854
Springline
136
9,163,667
47,910,981
1,060,398
48,971,379
58,135,046
(15,634,169
42,500,877
Square One
112
7,222,544
26,277,456
695,695
26,973,151
34,195,695
(10,689,404
23,506,291
Station 92
Woodstock, GA
7,132,150
66,564,114
94,608
66,658,722
73,790,872
(2,969,550
70,821,322
Stillhouse Vinings
10,764,285
78,806,295
20,241
78,826,536
89,590,821
(1,626,928
87,963,893
STOA
237
25,326,048
79,976,031
1,061,635
81,037,666
106,363,714
(20,981,096
85,382,618
S-8
Gross Amount Carried at Close of Period 12/31/24
Ten23 (fka 500 West 23rd Street)
111
58,881,873
1,930,350
60,812,223
(26,993,618
33,818,605
Terraces, The
14,087,610
16,314,151
3,546,231
19,860,382
33,947,992
(11,089,163
22,858,829
Theo
15,322,049
122,105,822
5,930,484
128,036,306
143,358,355
(20,433,643
122,924,712
Third Square
2008/2009
472
26,767,171
219,668,983
17,770,687
237,439,670
264,206,841
(127,710,276
136,496,565
Three20
134
7,030,766
29,005,762
1,300,575
30,306,337
37,337,103
(12,922,503
24,414,600
Toscana
1991/1993
563
39,410,000
50,806,072
30,425,228
81,231,300
120,641,300
(63,860,011
56,781,289
Trailwinds Grapevine
Grapevine, TX
15,219,295
75,436,361
165,369
75,601,730
90,821,025
(4,407,500
86,413,525
Troy Boston
378
34,641,051
181,607,331
4,767,279
186,374,610
221,015,661
(53,005,531
168,010,130
Union at Carrollton Square
Carrollton, TX
49,428,349
356,894
49,785,243
(2,567,013
47,218,230
Urbana (fka Market Street Landing)
12,542,418
75,800,090
4,570,858
80,370,948
92,913,366
(34,269,846
58,643,520
Uwajimaya Village
8,800,000
22,188,288
9,990,428
32,178,716
40,978,716
(19,464,328
21,514,388
Vantage Hollywood
298
42,580,326
56,014,674
5,329,349
61,344,023
103,924,349
(24,658,919
79,265,430
Veloce
15,322,724
76,176,594
10,732,656
86,909,250
102,231,974
(37,224,492
65,007,482
Venue at the Promenade
Castle Rock, CO
8,355,048
83,752,689
1,401,140
85,153,829
93,508,877
(21,860,408
71,648,469
Verde Condominium Homes (fka Mission Verde, LLC)
5,190,700
9,679,109
5,804,559
15,483,668
20,674,368
(13,452,328
7,222,040
Veridian (fka Silver Spring)
Silver Spring, MD
457
18,539,817
130,407,365
7,666,152
138,073,517
156,613,334
(72,977,468
83,635,866
Versailles
253
12,650,000
33,656,292
12,532,385
46,188,677
58,838,677
(32,356,238
26,482,439
Versailles (K-Town)
10,590,975
44,409,025
3,100,526
47,509,551
58,100,526
(26,215,272
31,885,254
Victor on Venice
116
10,350,000
35,433,437
5,556,188
40,989,625
51,339,625
(24,379,748
26,959,877
View at Woodstock, The
8,745,396
78,958,962
204,122
79,163,084
87,908,480
(3,832,069
84,076,411
Villa Solana
Laguna Hills, CA
1984
1,665,100
14,985,677
14,598,936
29,584,613
31,249,713
(27,179,284
4,070,429
Village at Del Mar Heights, The (fka Del Mar Heights)
168
40,859,396
5,034,037
45,893,433
60,993,433
(21,712,127
39,281,306
Vintage at 425 Broadway (fka Promenade)
1934/2001
60
9,000,000
13,961,523
2,372,510
16,334,033
25,334,033
(7,946,176
17,387,857
Virginia Square
85,940,003
7,266,104
93,206,107
(42,981,254
50,224,853
Vista 99 (fka Tasman)
554
27,709,329
177,347,508
4,696,702
182,044,210
209,753,539
(63,517,339
146,236,200
Vista Del Lago
Mission Viejo, CA
1986-1988
608
4,525,800
40,736,293
34,078,285
74,814,578
79,340,378
(61,847,607
17,492,771
Walden Park
1966
232
12,448,888
52,044,448
5,903,673
57,948,121
70,397,009
(30,963,840
39,433,169
Water Park Towers
34,400,000
108,485,859
20,610,791
129,096,650
163,496,650
(58,825,200
104,671,450
Watertown Square
Watertown, MA
16,800,000
34,074,056
6,528,689
40,602,745
57,402,745
(17,174,940
40,227,805
Weaver, The
251
25,405,232
69,552,640
1,847,151
71,399,791
96,805,023
(11,876,026
84,928,997
West 96th
84,800,000
67,055,501
10,332,679
77,388,180
162,188,180
(37,403,289
124,784,891
West End Apartments (fka Emerson Place/CRP II)
310
469,546
163,123,022
7,740,175
170,863,197
171,332,743
(96,856,266
74,476,477
Westchester at Rockville
10,600,000
44,135,207
3,301,771
47,436,978
58,036,978
(20,645,593
37,391,385
Westerly
331
11,958,829
79,171,448
1,615,516
80,786,964
92,745,793
(14,413,252
78,332,541
Westmont
163
64,900,000
61,143,259
8,448,519
69,591,778
134,491,778
(32,658,363
101,833,415
Westside
204
34,200,000
56,962,630
4,775,175
61,737,805
95,937,805
(27,842,175
68,095,630
White Fence Farm
Lakewood, CO
10,416,696
66,715,895
116,100
66,831,995
77,248,691
(2,787,240
74,461,451
Windridge (CA)
Laguna Niguel, CA
2,662,900
23,985,497
16,990,164
40,975,661
43,638,561
(36,747,706
6,890,855
Wisconsin Place
Chevy Chase, MD
432
172,089,355
3,080,396
175,169,751
(76,656,323
98,513,428
Woodleaf
Campbell, CA
178
8,550,600
16,988,182
8,129,288
25,117,470
33,668,070
(21,267,424
12,400,646
Zephyr on the Park
15,637,106
89,964,029
704,458
90,668,487
106,305,593
(13,888,189
92,417,404
Management Business
(D)
150,634,848
(121,137,910
29,496,938
5,296,710
384,079
(143,916
240,163
4,828,454,463
18,898,331,115
2,333,931,026
21,232,262,141
S-9
Wholly Owned Encumbered:
1111 Belle Pre (fka The Madison)
360
18,937,702
94,758,679
2,428,753
97,187,432
116,125,134
(41,313,478
74,811,656
86,485,984
300 East 39th (fka East 39th)
254
48,900,000
96,174,639
9,392,015
105,566,654
154,466,654
(47,816,688
106,649,966
58,771,151
303 East 83rd (fka Camargue)
1976
261
79,400,000
79,122,624
15,461,384
94,584,008
173,984,008
(46,180,093
127,803,915
(H)
Artisan Square
Northridge, CA
7,000,000
20,537,359
3,492,472
24,029,831
31,029,831
(17,513,542
13,516,289
35,680,839
Avanti
Anaheim, CA
12,960,000
18,497,682
4,972,488
23,470,170
36,430,170
(15,728,704
20,701,466
28,088,126
Avenir Apartments
114,321,619
9,196,875
123,518,494
(54,897,485
68,621,009
850,000
Baxter Decatur, The
Decatur, GA
290
11,783,860
70,318,252
613,188
70,931,440
82,715,300
(8,210,580
74,504,720
43,825,232
City Pointe
Fullerton, CA
183
6,863,792
36,476,208
6,192,923
42,669,131
49,532,923
(23,407,435
26,125,488
39,685,048
Elevé
14,080,560
56,419,440
2,069,570
58,489,010
72,569,570
(24,001,654
48,567,916
38,458,404
Fairchase
392
23,500,000
87,722,321
9,016,475
96,738,796
120,238,796
(40,426,139
79,812,657
Flats at DuPont Circle
1967
306
35,200,000
108,768,198
6,855,221
115,623,419
150,823,419
(49,886,919
100,936,500
Glo
201
16,047,022
48,650,963
5,124,335
53,775,298
69,822,320
(27,497,664
42,324,656
33,209,234
Heights on Capitol Hill
5,425,000
21,138,028
2,703,182
23,841,210
29,266,210
(15,172,677
14,093,533
22,623,221
Kelvin Court (fka Alta Pacific)
132
10,752,145
34,846,856
4,202,521
39,049,377
49,801,522
(21,063,741
28,737,781
26,282,272
Kenwood Mews
Burbank, CA
141
14,100,000
24,662,883
5,163,667
29,826,550
43,926,550
(19,919,281
24,007,269
37,683,442
La Terrazza at Colma Station
Colma, CA
155
41,251,044
5,806,273
47,057,317
(28,298,277
18,759,040
25,060,973
Lindley Apartments
Encino, CA
129
5,805,000
25,705,000
6,164,344
31,869,344
37,674,344
(15,602,824
22,071,520
28,085,310
Lofts 590
212
20,100,000
67,909,023
2,562,672
70,471,695
90,571,695
(30,041,398
60,530,297
43,117,846
Longview Place
20,880,000
90,255,509
16,634,538
106,890,047
127,770,047
(70,305,291
57,464,756
84,412,560
Mark on 8th
23,004,387
51,116,647
933,461
52,050,108
75,054,495
(15,702,897
59,351,598
Metro on First
106
8,540,000
12,209,981
4,960,919
17,170,900
25,710,900
(10,819,183
14,891,717
21,526,032
Moda
12,649,228
36,842,012
3,130,604
39,972,616
52,621,844
(21,565,006
31,056,838
(I)
Montierra (CA)
8,160,000
29,360,938
18,621,407
47,982,345
56,142,345
(33,906,670
22,235,675
61,118,125
Notch
Newcastle, WA
158
5,463,324
43,490,989
605,820
44,096,809
49,560,133
(9,125,980
40,434,153
Old Town Lofts
7,740,467
44,146,181
1,441,484
45,587,665
53,328,132
(17,672,182
35,655,950
35,625,211
Olympus Towers
328
14,752,034
73,335,425
16,011,880
89,347,305
104,099,339
(64,261,124
39,838,215
94,898,236
Park Place at San Mateo (fka San Mateo)
575
71,900,000
211,907,141
32,756,157
244,663,298
316,563,298
(107,423,091
209,140,207
Red 160 (fka Redmond Way)
15,546,376
65,320,010
6,516,711
71,836,721
87,383,097
(32,847,476
54,535,621
Skyhouse Denver
361
13,562,331
126,360,318
4,560,548
130,920,866
144,483,197
(36,284,093
108,199,104
74,301,755
SoMa Square Apartments (fka South Market)
418
79,900,000
177,316,977
27,859,528
205,176,505
285,076,505
(92,120,716
192,955,789
Teresina
Chula Vista, CA
28,600,000
61,916,670
10,391,857
72,308,527
100,908,527
(46,896,214
54,012,313
37,940,000
Vintage
2005-2007
7,059,230
47,677,762
8,792,477
56,470,239
63,529,469
(32,955,297
30,574,172
49,213,487
West 54th
48,193,837
6,744,489
54,938,326
115,838,326
(26,577,581
89,260,745
48,326,811
Portfolio/Entity Encumbrances (1)
709,512,458
2,166,731,215
261,380,238
2,428,111,453
S-10
Partially Owned Unencumbered:
Basin, The
36,833,687
83,933,770
120,767,457
Bellevue Meadows
1983
4,507,100
12,574,814
10,464,162
23,038,976
27,546,076
(17,628,998
9,917,078
Canyon Ridge
4,869,448
11,955,064
5,705,235
17,660,299
22,529,747
(15,160,177
7,369,570
Country Oaks
256
6,105,000
29,561,865
8,850,571
38,412,436
44,517,436
(29,740,487
14,776,949
Lantern Cove
Foster City, CA
6,945,000
23,064,976
9,648,942
32,713,918
39,658,918
(26,003,553
13,655,365
Radius Koreatown
2014/2016
32,494,154
84,645,203
1,931,407
86,576,610
119,070,764
(28,228,671
90,842,093
Rosecliff
5,460,000
15,721,570
8,871,765
24,593,335
30,053,335
(18,467,262
11,586,073
Schooner Bay I
5,345,000
20,390,618
9,365,180
29,755,798
35,100,798
(22,522,089
12,578,709
Schooner Bay II
4,550,000
18,064,764
8,121,344
26,186,108
30,736,108
(19,933,003
10,803,105
St Johns West
10,097,109
47,928,229
2,244,564
50,172,793
60,269,902
(12,197,560
48,072,342
Venn at Main
350
26,626,497
151,520,448
3,025,678
154,546,126
181,172,623
(44,611,982
136,560,641
Virgil Square
5,500,000
15,216,613
4,559,088
19,775,701
25,275,701
(13,848,981
11,426,720
149,332,995
514,577,934
72,787,936
587,365,870
Partially Owned Encumbered:
Canyon Creek (CA)
San Ramon, CA
18,812,121
11,514,890
30,327,011
5,692,724,916
21,598,452,385
2,679,614,090
24,278,066,475
S-11
NOTES:
S-12