Vivmark Residential · Earnings release

Table of Contents

Earnings Release

Consolidated Statements of Operations

6

Consolidated Statements of Funds From Operations and Normalized

Funds From Operations

7

Consolidated Balance Sheets

8

Portfolio Summary

9

Portfolio Rollforward

Same Store Results

Debt Summary

Capital Structure

Common Share and Unit Weighted Average Amounts Outstanding

Development and Lease-Up Projects

Capital Expenditures to Real Estate

Normalized EBITDAre Reconciliations

Adjustments from FFO to Normalized FFO

Normalized FFO Guidance and Assumptions

Additional Reconciliations and Definitions of Non-GAAP

Financial Measures and Other Terms

Corporate Headquarters:

Two North Riverside Plaza

Information included in this supplemental package is unaudited.

Table of Contents

NEWS RELEASE - FOR IMMEDIATE RELEASE

Equity Residential Reports Third Quarter 2024 Results

Chicago, IL – October 30, 2024 - Equity Residential (NYSE: EQR) today reported results for the quarter and nine months ended September 30, 2024 and has posted a Q3 2024 Management Presentation to its website as referenced below.

All per share results are reported as available to common shares/units on a diluted basis.

Quarter Ended September 30,

$ Change

% Change

Earnings Per Share (EPS)

$

$

$

)

%)

Funds from Operations (FFO) per share

$

$

$

%

Normalized FFO (NFFO) per share

$

$

$

%

Nine Months Ended September 30,

$ Change

% Change

Earnings Per Share (EPS)

$

$

$

%

Funds from Operations (FFO) per share

$

$

$

%

Normalized FFO (NFFO) per share

$

$

$

%

Recent Highlights

•

During the third quarter of 2024, the Company acquired fourteen properties, consisting of 4,418 apartment units, for an aggregate acquisition price of approximately $1.26 billion at a weighted average Acquisition Cap Rate of 5.1%. These assets are located in the Company’s Expansion Markets of Atlanta, Dallas/Ft. Worth and Denver.

•

In September of 2024, the Company issued $600.0 million of unsecured 10-year notes at a coupon rate of 4.65%, the lowest 10-year coupon rate issued by a REIT since 2022, and an all-in effective yield of 4.9%. Proceeds from this issuance were used to partially fund the acquisitions described above.

•

Same store revenue increased 2.7% for the third quarter of 2024 compared to the third quarter of 2023, driven by good demand and modest supply across most of the Company’s markets. Same store expense increased 3.2% with low growth in the primary expense categories. Same store Net Operating Income (NOI) increased 2.5%.

•

The Company published its 11th annual Corporate Responsibility report highlighting Equity Residential’s goals and accomplishments.

“We delivered solid same store revenue results in the quarter with the underlying drivers mostly in line with expectations. Our business continues to benefit from high employment levels among our well earning resident base, wage growth across the economy and limited home ownership and rental options in most of our markets, making our well-located apartment properties an appealing choice," said Mark J. Parrell, Equity Residential’s President and CEO. “Looking ahead, we continue to be excited about the prospects for our business as lower levels of competitive new supply in future years, especially in our Established Markets on the coasts, along with a positive forward employment picture for our higher earning customer, positions us well to continue to grow cash flows.”

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Table of Contents

Results Per Share

The change in EPS for the quarter ended September 30, 2024 compared to the same period of 2023 is due primarily to lower property sale gains, higher depreciation expense, the various adjustment items listed on page 27 of this release and the items described below. The change in EPS for the nine months ended September 30, 2024 compared to the same period of 2023 is due primarily to higher property sale gains, higher depreciation expense, the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in FFO for the quarter and nine months ended September 30, 2024 compared to the same periods of 2023 are due primarily to the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in Normalized FFO are due primarily to:

Positive/(Negative) Impact

Same store NOI

$

$

Lease-Up NOI

–

)

Interest expense, net

)

)

Corporate overhead (1)

)

)

Other items

–

Net

$

$

(1)

Corporate overhead includes property management and general and administrative expenses.

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 29 through 34 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 31 and 32 of this release.

Same Store Results

The following table shows the total same store results for the periods presented (includes Residential and Non-Residential).

Apartment Units

Physical Occupancy

Revenues

Expenses

NOI

2

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The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis.

% Change

% Change

% Change

Same Store Residential Revenues-

comparable period

Lease rates

%

%

%

Leasing Concessions

%)

%

%)

Vacancy gain (loss)

%

%)

%

Bad Debt, Net (1)

%

%

%

Other (2)

%

%

%

Same Store Residential Revenues-

current period

%

%

%

(1)

Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts. See page 13 for more detail.

(2)

Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties (for 76,916 same store apartment units):

Physical Occupancy

Percentage of Residents Renewing by quarter

New Lease Change

Renewal Rate Achieved

Blended Rate (1)

(1)

Blended Rates for Established Markets were 2.4% and 3.3% for Q3 2024 and Q2 2024, respectively. See page 17.

In the third quarter of 2024, Physical Occupancy and Percentage of Residents Renewing exceeded expectations while Renewal Rate Achieved remained strong. In September 2024, New Lease Change, a volatile metric, seasonally decelerated more quickly than anticipated, primarily due to weakness in the city of Los Angeles and in our Expansion Markets, leading to Blended Rates at the low end of the Company's expected range for the third quarter of 2024. Blended Rate has normalized with typical seasonal patterns thus far in the fourth quarter of 2024 and is expected to be between 0.75% and 1.25% for the fourth quarter of 2024.

Investment Activity

During the third quarter of 2024, the Company acquired 14 properties consisting of 4,418 apartment units, located in the Company’s Expansion Markets of Atlanta, Dallas/Ft. Worth and Denver, for an aggregate acquisition price of approximately $1.26 billion at a weighted average Acquisition Cap Rate of 5.1%. The acquired properties are seven years old on average. Subsequent to the end of the third quarter of 2024, the Company acquired a two year old, 274 apartment unit property in suburban Atlanta for a purchase price of $89.5 million. During the third quarter of 2024, the Company sold a 63 year old property, located in Washington, D.C., consisting of 138 apartment units, for a sale price of approximately $31.5 million at a Disposition Yield of 6.1%.

During the first nine months of 2024, the Company acquired 15 properties, consisting of 4,578 apartment units, for an aggregate purchase price of approximately $1.3 billion at a weighted average Acquisition Cap Rate of 5.1%. The acquired properties are six years old on average. Also during the first nine months of 2024, the Company sold six properties consisting of 969 apartment units, for an aggregate sale price of approximately $365.5 million at a weighted average Disposition Yield of 5.7%. The properties sold during 2024 have an average age of 43 years.

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As of September 30, 2024, the Company has 42 properties (including those under development) located in its Expansion Markets of Atlanta, Austin, Dallas/Ft. Worth and Denver, which constitutes approximately 10% of total portfolio NOI.

“We are seeing an increasingly active transaction market providing us with opportunities to acquire properties in our Expansion Markets at attractive prices relative to replacement costs and at reasonable cap rates on depressed rent rolls as we execute on our strategy to better balance our portfolio,” said Alec Brackenridge, Equity Residential's Executive Vice President and Chief Investment Officer. “We are continuing to build a portfolio in the metro areas on the coasts and in select markets in the sunbelt that are most desirable to our target affluent renter demographic and have favorable long-term return characteristics.”

Capital Markets Activity

On September 11, 2024, the Company closed on the issuance of $600.0 million of 10-year unsecured notes at a coupon rate of 4.65%, which is the lowest 10-year coupon rate issued by a REIT since 2022, and an all-in effective yield of 4.9%. Proceeds from the offering were used to partially fund the Company’s acquisition activity during the quarter.

Fourth Quarter 2024 Guidance

The Company has established guidance ranges for the fourth quarter of 2024 EPS, FFO per share and Normalized FFO per share as listed below:

Guidance

G1EPS

G2FFO per share

G3Normalized FFO per share

The difference between the third quarter of 2024 actual EPS of $0.38 and the fourth quarter of 2024 EPS guidance midpoint of $1.03 is due primarily to higher expected property sale gains, higher expected depreciation expense, lower expected non-operating asset gains and the items described below.

The difference between the third quarter of 2024 actual FFO of $0.99 per share and the fourth quarter of 2024 FFO guidance midpoint of $0.97 per share is due primarily to lower expected non-operating asset gains and the items described below.

The difference between the third quarter of 2024 actual Normalized FFO of $0.98 per share and the fourth quarter of 2024 Normalized FFO guidance midpoint of $1.00 per share is due primarily to:

Expected

Positive/(Negative)

Impact

Same store NOI

$

Interest expense, net

)

Corporate overhead

Net

$

About Equity Residential

Equity Residential 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. Equity Residential owns or has investments in 312 properties consisting of 84,018 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

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Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, government regulations and competition. These and other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com.

Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Thursday, October 31, 2024 at 10:30 a.m. CT. In connection with the conference call, the Company is also providing a Management Presentation on its website. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

5

Table of Contents

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

Nine Months Ended September 30,

Quarter Ended September 30,

REVENUES

Rental income

$

$

$

$

EXPENSES

Property and maintenance

Real estate taxes and insurance

Property management

General and administrative

Depreciation

Total expenses

Net gain (loss) on sales of real estate properties

)

Interest and other income

Other expenses

)

)

)

)

Interest:

Expense incurred, net

)

)

)

)

Amortization of deferred financing costs

)

)

)

)

Income before income and other taxes, income (loss) from

investments in unconsolidated entities and net gain (loss)

on sales of land parcels

Income and other tax (expense) benefit

)

)

)

)

Income (loss) from investments in unconsolidated entities

)

)

)

)

Net income

Net (income) loss attributable to Noncontrolling Interests:

Operating Partnership

)

)

)

)

Partially Owned Properties

)

)

)

)

Net income attributable to controlling interests

Preferred distributions

)

)

)

)

Premium on redemption of Preferred Shares

)

—

—

—

Net income available to Common Shares

$

$

$

$

Earnings per share – basic:

Net income available to Common Shares

$

$

$

$

Weighted average Common Shares outstanding

Earnings per share – diluted:

Net income available to Common Shares

$

$

$

$

Weighted average Common Shares outstanding

Distributions declared per Common Share outstanding

$

$

$

$

6

Table of Contents

Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share and Unit data)

(Unaudited)

Nine Months Ended September 30,

Quarter Ended September 30,

Net income

$

$

$

$

Net (income) loss attributable to Noncontrolling Interests – Partially

Owned Properties

)

)

)

)

Preferred distributions

)

)

)

)

Premium on redemption of Preferred Shares

)

—

—

—

Net income available to Common Shares and Units

Adjustments:

Depreciation

Depreciation – Non-real estate additions

)

)

)

)

Depreciation – Partially Owned Properties

)

)

)

)

Depreciation – Unconsolidated Properties

Net (gain) loss on sales of unconsolidated entities - operating

assets

)

—

)

—

Net (gain) loss on sales of real estate properties

)

)

)

Noncontrolling Interests share of gain (loss) on sales

of real estate properties

—

—

FFO available to Common Shares and Units

Adjustments (see note for additional detail):

Write-off of pursuit costs

Debt extinguishment and preferred share redemption (gains)

losses

—

Non-operating asset (gains) losses

)

)

)

)

Other miscellaneous items

Normalized FFO available to Common Shares and Units

$

$

$

$

FFO

$

$

$

$

Preferred distributions

)

)

)

)

Premium on redemption of Preferred Shares

)

—

—

—

FFO available to Common Shares and Units

$

$

$

$

FFO per share and Unit – basic

$

$

$

$

FFO per share and Unit – diluted

$

$

$

$

Normalized FFO

$

$

$

$

Preferred distributions

)

)

)

)

Normalized FFO available to Common Shares and Units

$

$

$

$

Normalized FFO per share and Unit – basic

$

$

$

$

Normalized FFO per share and Unit – diluted

$

$

$

$

Weighted average Common Shares and Units outstanding – basic

Weighted average Common Shares and Units outstanding – diluted

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

7

Table of Contents

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

ASSETS

Land

$

$

Depreciable property

Projects under development

Land held for development

Investment in real estate

Accumulated depreciation

)

)

Investment in real estate, net

Investments in unconsolidated entities1

Cash and cash equivalents

Restricted deposits

Right-of-use assets

Other assets

Total assets

$

$

LIABILITIES AND EQUITY

Liabilities:

Mortgage notes payable, net

$

$

Notes, net

Line of credit and commercial paper

Accounts payable and accrued expenses

Accrued interest payable

Lease liabilities

Other liabilities

Security deposits

Distributions payable

Total liabilities

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership

Equity:

Shareholders' equity:

Preferred Shares of beneficial interest, $0.01 par value;

Common Shares of beneficial interest, $0.01 par value;

shares issued and outstanding as of December 31, 2023

Paid in capital

Retained earnings

Accumulated other comprehensive income (loss)

Total shareholders’ equity

Noncontrolling Interests:

Operating Partnership

Partially Owned Properties

Total Noncontrolling Interests

Total equity

Total liabilities and equity

$

$

1 Includes $297.5 million and $220.2 million in unconsolidated projects (primarily development) as of September 30, 2024 and December 31, 2023, respectively. See Development and Lease-Up Projects for additional detail on unconsolidated projects.

8

Table of Contents

Equity Residential

Portfolio Summary

% of

Stabilized

Average

Apartment

Budgeted

Rental

Markets/Metro Areas

Properties

Units

NOI

Rate

Established Markets:

Los Angeles

%

$

Orange County

%

San Diego

%

Subtotal – Southern California

%

Washington, D.C.

%

San Francisco

%

New York

%

Boston

%

Seattle

%

Subtotal – Established Markets

%

Expansion Markets:

Denver

%

Atlanta

%

Dallas/Ft. Worth

9

%

Austin

3

%

Subtotal – Expansion Markets

%

Total

%

$

Properties

Apartment Units

Wholly Owned Properties

Partially Owned Properties – Consolidated

Partially Owned Properties – Unconsolidated

1

Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

9

Table of Contents

Equity Residential

($ in thousands)

Properties

Apartment

Units

Purchase Price

Acquisition

Cap Rate

Acquisitions:

Consolidated Rental Properties

$

%

Sales Price

Disposition

Yield

Dispositions:

Consolidated Rental Properties

(1

)

)

$

)

%)

($ in thousands)

Properties

Apartment

Units

Purchase

Price

Acquisition

Cap Rate

Acquisitions:

Consolidated Rental Properties

$

%

Consolidated Rental Properties – Not Stabilized (1)

1

$

%

Unconsolidated Land Parcels (2)

—

—

$

Sales Price

Disposition

Yield

Dispositions:

Consolidated Rental Properties

(6

)

)

$

)

%)

Completed Developments – Unconsolidated

1

Configuration Changes

—

9

(1)

The Company acquired one property in the Boston market during the nine months ended September 30, 2024 that is in lease-up and is expected to stabilize in its second year of ownership at the Acquisition Cap Rate listed above.

(2)

The Company previously entered into separate unconsolidated joint ventures for the purpose of developing vacant land parcels in suburban Boston, MA and suburban Seattle, WA. The joint ventures acquired their respective land parcels during the nine months ended September 30, 2024 for the total purchase price listed. The Company's total investment in these two joint ventures is approximately $69.0 million as of September 30, 2024. See Development and Lease-Up Projects for additional detail.

Table of Contents

Equity Residential

Same Store Results/Statistics Including 77,203 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands except for Average Rental Rate)

Results

Statistics

Description

Revenues

Expenses

NOI

Average

Rental

Rate

Physical

Occupancy

Turnover

$

$

$

$

%

%

$

$

$

$

%

%

Change

$

$

$

$

%

%)

Change

%

%

%

%

Same Store Results/Statistics Including 78,633 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands except for Average Rental Rate)

Results

Statistics

Description

Revenues

Expenses

NOI

Average

Rental

Rate

Physical

Occupancy

Turnover

$

$

$

$

%

%

$

$

$

$

%

%

Change

$

$

$

)

$

%)

%

Change

%

%

%)

%

Same Store Results/Statistics Including 76,916 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands except for Average Rental Rate)

Results

Statistics

Description

Revenues

Expenses

NOI

Average

Rental

Rate

Physical

Occupancy

Turnover

$

$

$

$

%

%

$

$

$

$

%

%

Change

$

$

$

$

%

%)

Change

%

%

%

%

Table of Contents

Equity Residential

Same Store Residential Revenues – GAAP to Cash Basis (1)

($ in thousands)

Same Store Residential Revenues (GAAP Basis)

$

$

$

$

$

$

Leasing Concessions amortized

Leasing Concessions granted (2)

)

)

)

)

)

)

Same Store Residential Revenues with Leasing

Concessions on a cash basis

$

$

$

$

$

$

% change - GAAP revenue

%

%

%

% change - cash revenue

%

%

%

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

(2)

Concession usage is primarily concentrated in San Francisco, Los Angeles, Seattle and the Expansion Markets. Material declines for the nine months ended September 30, 2024 in Leasing Concessions granted in Seattle and San Francisco have been offset by increases in Los Angeles and the Expansion Markets in the same period.

Same Store Net Operating Income By Quarter

Including 76,916 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands)

Same store revenues

$

$

$

$

$

Same store expenses

Same store NOI

$

$

$

$

$

Table of Contents

Equity Residential

Same Store Residential Accounts Receivable Balances

Including 76,916 Same Store Apartment Units

($ in thousands)

Balance Sheet (Other assets):

Residential accounts receivable balances

$

$

$

Allowance for doubtful accounts

)

)

)

Net receivable balances

$

$

$

Straight-line receivable balances

$

(1)

$

$

(1)

Total same store Residential Leasing Concessions granted in the third quarter of 2024 were approximately $5.9 million. The straight-line receivable balance of $8.1 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in the remainder of 2024 and the first three quarters of 2025.

Same Store Residential Bad Debt

Including 76,916 Same Store Apartment Units

($ in thousands)

Income Statement (Rental income):

Bad debts before governmental rental assistance

$

$

$

Governmental rental assistance received

)

)

)

Bad Debt, Net

$

$

$

Bad Debt, Net as a % of Same Store Residential Revenues

%

%

%

Table of Contents

Equity Residential

Same Store Residential Results/Statistics by Market

Increase (Decrease) from Prior Year's Quarter

Markets/Metro Areas

Apartment

Units

% of

Actual

NOI

Average

Rental

Rate

Weighted

Average

Physical

Occupancy %

Turnover

Revenues

Expenses

NOI

Average

Rental

Rate

Physical

Occupancy

Turnover

Los Angeles

%

$

%

%

%

%

%

%

%)

%

Orange County

%

%

%

%

%

%

%

%)

%)

San Diego

%

%

%

%

%

%

%

%

%

Subtotal – Southern California

%

%

%

%

%

%

%

%)

%

Washington, D.C.

%

%

%

%

%

%

%

%)

%)

San Francisco

%

%

%

%

%

%

%

%

%)

New York

%

%

%

%

%

%

%

%

%)

Boston

%

%

%

%

%

%

%

%

%)

Seattle

%

%

%

%

%

%

%

%

%)

Denver

%

%

%

%)

%

%)

%

%)

%)

Other Expansion Markets

%

%

%

%)

%)

(1)

%

%)

%

%)

Total

%

$

%

%

%

%

%

%

%

%)

(1)

Expense decline primarily due to favorable Texas real estate taxes.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.3% of total revenues for the nine months ended September 30, 2024.

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Equity Residential

Same Store Residential Results/Statistics by Market

Increase (Decrease) from Prior Quarter

Markets/Metro Areas

Apartment

Units

% of

Actual

NOI

Average

Rental

Rate

Weighted

Average

Physical

Occupancy %

Turnover

Revenues

Expenses

NOI

Average

Rental

Rate

Physical

Occupancy

Turnover

Los Angeles

%

$

%

%

%

%

%)

%

%)

%

Orange County

%

%

%

%

%

%

%

%

%)

San Diego

%

%

%

%)

%

%)

%

%)

%

Subtotal – Southern California

%

%

%

%

%

%)

%

%)

%

Washington, D.C.

%

%

%

%

%

%)

%

%)

%

San Francisco

%

%

%

%

%