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(
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
New York Stock Exchange
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.
Equity Residential
Yes
☒
No
☐
ERP Operating Limited Partnership
Yes
☒
No
☐
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).
Equity Residential
Yes
☒
No
☐
ERP Operating Limited Partnership
Yes
☒
No
☐
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
☐
l
ERP Operating Limited Partnership:
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☐
Emerging growth company
☐
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Equity Residential Yes
☐
No
☒
ERP Operating Limited Partnership Yes
☐
No
☒
The number of EQR Common Shares of Beneficial Interest, $0.01 par value, outstanding on
July 31, 2025 was
381,898,057
.
This report combines the reports on Form 10-Q for the quarterly period ended June 30, 2025 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 June 30, 2025 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-Q of EQR and ERPOP into this single report provides the following benefits:
•
enhances investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
•
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
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 I, Item 4,
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.
Preferred Shares of beneficial interest, $
0.01
par value;
100,000,000
shares authorized;
343,100
shares issued and
outstanding as of June 30, 2025 and December 31, 2024
17,155
17,155
Common Shares of beneficial interest, $
0.01
par value;
1,000,000,000
shares authorized;
379,980,440
shares issued
and outstanding as of June 30, 2025 and
379,475,383
shares issued and outstanding as of December 31, 2024
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.
EQR is the general partner of, and as of June 30, 2025 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.
As of June 30, 2025, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of
319
properties located in
10
states and the District of Columbia consisting of
86,422
apartment units.
The ownership breakdown includes (table does not include any uncompleted development properties):
Properties
Apartment Units
Wholly Owned Properties
302
82,054
Partially Owned Properties – Consolidated
12
2,656
Partially Owned Properties – Unconsolidated
5
1,712
319
86,422
2.
Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and certain reclassifications considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
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.
The balance sheets at December 31, 2024 have been derived from the audited financial statements at that date but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
For further information, including definitions of capitalized terms not defined herein, refer to the consolidated financial statements and footnotes thereto included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024
.
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 (“TRS”) 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.
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. In March 2025, the SEC voted to end its defense of the rules. 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 monitoring the legal challenges and evaluating the potential 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 the immaterial amount of income taxes incurred/paid due to 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 when effective for annual periods beginning January 1, 2024 and interim periods beginning January 1, 2025 on a retrospective basis. See Note 12 for further discussion.
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 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
six months ended June 30, 2025 and 2024:
2025
2024
Common Shares
Common Shares outstanding at January 1,
379,475,383
379,291,417
Common Shares Issued:
Conversion of OP Units
224,399
90,131
Exercise of share options
83,754
119,516
Employee Share Purchase Plan (ESPP)
23,090
47,466
Restricted share grants, net
173,814
190,804
Common Shares Other:
Repurchased and retired
—
(
652,452
)
Common Shares outstanding at June 30,
379,980,440
379,086,882
Units
Units outstanding at January 1,
11,543,773
11,581,306
Restricted unit grants, net
286,898
172,667
Conversion of OP Units to Common Shares
(
224,399
)
(
90,131
)
Units outstanding at June 30,
11,606,272
11,663,842
Total Common Shares and Units outstanding at June 30,
391,586,712
390,750,724
Units Ownership Interest in Operating Partnership
3.0
%
3.0
%
The following table presents the changes in the Operating Partnership’s issued and outstanding General Partner Units and Limited Partner Units for the
six months ended June 30, 2025 and 2024:
2025
2024
General and Limited Partner Units
General and Limited Partner Units outstanding at January 1,
391,019,156
390,872,723
Issued to General Partner:
Exercise of EQR share options
83,754
119,516
EQR’s Employee Share Purchase Plan (ESPP)
23,090
47,466
EQR’s restricted share grants, net
173,814
190,804
Issued to Limited Partners:
Restricted unit grants, net
286,898
172,667
General Partner Other:
OP Units repurchased and retired
—
(
652,452
)
General and Limited Partner Units outstanding at June 30,
391,586,712
390,750,724
Limited Partner Units
Limited Partner Units outstanding at January 1,
11,543,773
11,581,306
Limited Partner restricted unit grants, net
286,898
172,667
Conversion of Limited Partner OP Units to EQR Common Shares
(
224,399
)
(
90,131
)
Limited Partner Units outstanding at June 30,
11,606,272
11,663,842
Limited Partner Units Ownership Interest in Operating Partnership
3.0
%
3.0
%
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 June 30, 2025 and December 31, 2024.
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 Limited Partners is then adjusted to the greater of carrying value or fair market value as described above. As of June 30, 2025 and 2024, the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners have a redemption value of approximately $
317.9
million and $
327.6
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
six months ended June 30, 2025 and 2024, respectively (amounts in thousands):
2025
2024
Balance at January 1,
$
338,563
$
289,248
Change in market value
(
19,568
)
39,058
Change in carrying value
(
1,090
)
(
665
)
Balance at June 30,
$
317,905
$
327,641
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
June 30, 2025 and December 31, 2024:
Amounts in thousands
Annual
Call
Dividend Per
June 30,
December 31,
Date (1)
Share/Unit (2)
2025
2024
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 June 30, 2025 an
d December 31, 2024
12/10/2026
$
4.145
$
17,155
$
17,155
$
17,155
$
17,155
(1)
On or after the call date, redeemable Preferred Shares/Preference Units may be redeemed for cash at the option of the Company or the Operating Partnership, respectively, in whole or in part, at a redemption price equal to the liquidation price per share/unit, plus accrued and unpaid distributions, if any.
(2)
Dividends on Preferred Shares/Preference Units are payable quarterly.
Other
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 2025 and expires in May 2028. 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 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. In May 2025, the Company replaced the prior program (which had expired) with a new program that matures in May 2028 and gives us the authority to issue up to
13.0
million shares, all of which remain available for issuance as of
June 30, 2025.
The Company may repurchase up to
13.0
million Common Shares under its share repurchase program, which was reauthorized during the first quarter of 2025. As
no
Common Shares have been repurchased since the reauthorization, all
13.0
million shares remain available to repurchase as of
June 30, 2025
.
4.
Real Estate
The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of
June 30, 2025 and December 31, 2024 (amounts in thousands):
During the
six months ended June 30, 2025, the Company acquired the following from unaffiliated parties (purchase price and purchase price allocation in thousands):
Purchase Price Allocation (1)
Properties
Apartment Units
Purchase Price
Land
Depreciable Property
Rental Properties – Consolidated
8
2,064
$
533,843
$
67,972
$
466,883
(1)
Purchase price allocation includes capitalized closing costs.
During the six months ended June 30, 2025
, the Company also acquired its joint venture partner's
10
% interest in a previously unconsolidated
270
-unit apartment property, and the property is now wholly owned. The Company recorded real estate basis of $
88.4
million upon consolidation, allocated as $
8.5
million to land and $
79.9
million to depreciable property. See Note 5 for further discussion.
During the
six months ended June 30, 2025, the Company disposed of the following to unaffiliated parties (sales price and net gain (loss) in thousands):
Properties
Apartment Units
Sales Price
Net Gain (Loss)
Rental Properties – Consolidated
3
835
$
346,600
$
212,432
Land Parcel (one) – Consolidated
—
—
4,300
(
78
)
Total
3
835
$
350,900
$
212,354
5.
Investments in Partially Owned Entities
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 Variable Interest Entities (“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
June 30, 2025:
Operating Properties
Projects Under Development (1)
Properties
Apartment Units
Projects
Apartment Units (2)
Consolidated Joint Ventures (VIE)
12
2,656
1
440
(1)
Represents separate consolidated joint ventures for the purpose of developing multifamily rental properties.
(2)
Represents the intended number of apartment units to be developed.
The following table provides consolidated assets and liabilities related to the Company's VIEs as of
June 30, 2025 and December 31, 2024 (amounts in thousands):
June 30, 2025
December 31, 2024
Consolidated Assets
$
559,732
$
528,076
Consolidated Liabilities
$
48,799
$
47,137
Investments in Unconsolidated Entities
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
June 30, 2025 and December 31, 2024 (amounts in thousands except for ownership percentage):
June 30, 2025
December 31, 2024
Ownership Percentage
Investments in Unconsolidated Entities:
Various Real Estate Holdings (VIE)
$
34,615
$
34,510
Varies
Development and Lease-Up Projects and Land Held for Development (VIE)
338,984
323,998
62
% -
95
% (1)
Real Estate Technology Funds/Companies (VIE)
30,429
28,276
Varies
Other
(
260
)
(
253
)
Varies
Investments in Unconsolidated Entities
$
403,768
$
386,531
(1)
In certain instances, the joint venture agreements contain provisions for promoted interests in favor of our joint venture partner. If the terms of the promoted interest are attained, then our share of the proceeds from a sale or other capital event of the unconsolidated entity may be less than the indicated ownership percentage.
The following table summarizes the Company’s unconsolidated joint ventures that were deemed to be VIEs as of
June 30, 2025:
Development Lease-Up Projects (1)
Real Estate Holdings (2)
Projects Under Development (3)
Projects Held for Development (4)
Properties
Apartment Units
Entities
Projects
Apartment Units (5)
Projects
Apartment Units (5)
Unconsolidated Joint Ventures (VIE)
5
1,712
3
2
639
2
526
(1)
The land parcel under one of these properties is subject to a long-term ground lease.
(2)
Represents entities that hold various real estate investments.
(3)
Represents separate unconsolidated joint ventures for the purpose of developing multifamily rental properties.
(4)
Represents separate unconsolidated joint ventures for the purpose of developing multifamily rental properties that have not yet started.
(5)
Represents the intended number of apartment units to be developed.
During the six months ended June 30, 2025
, the Company acquired its joint venture partner's
10
% interest in a previously unconsolidated
270
-unit apartment property for approximately $
3.6
million in cash (net of cash acquired) and also contributed $
50.5
million for the joint venture to repay the third-party construction loan encumbering the property. The property is now wholly owned.
The following table presents the Company’s restricted deposits as of
June 30, 2025 and December 31, 2024 (amounts in thousands):
June 30, 2025
December 31, 2024
Mortgage escrow deposits:
Real estate taxes and insurance
$
621
$
217
Mortgage principal reserves/sinking funds
35,660
31,208
Mortgage escrow deposits
36,281
31,425
Restricted cash:
Restricted deposits on real estate investments
2,177
2,143
Resident security and utility deposits
47,938
44,287
Replacement reserves
11,909
17,914
Other
2,373
2,095
Restricted cash
64,397
66,439
Restricted deposits
$
100,678
$
97,864
7.
Leases
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
six months ended June 30, 2025 and 2024 (amounts in thousands):
June 30, 2025
June 30, 2024
Income Type
Residential
Non-Residential
Total
Residential
Non-Residential
Total
Residential and non-residential rent
$
1,367,197
$
32,253
$
1,399,450
$
1,313,208
$
33,710
$
1,346,918
Utility recoveries (RUBS income) (1)
51,033
399
51,432
45,456
435
45,891
Parking rent
23,832
808
24,640
23,035
633
23,668
Other lease revenue, net (2)
3,265
(
644
)
2,621
(
3,035
)
(
463
)
(
3,498
)
Total lease revenue
1,445,327
32,816
1,478,143
1,378,664
34,315
1,412,979
Parking revenue
832
20,719
21,551
821
20,894
21,715
Other revenue
29,489
454
29,943
29,549
738
30,287
Total other rental income (3)
30,321
21,173
51,494
30,370
21,632
52,002
Rental income
$
1,475,648
$
53,989
$
1,529,637
$
1,409,034
$
55,947
$
1,464,981
(1)
RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.
(2)
Other lease revenue consists of the revenue adjustment related to bad debt (see below for further discussion), service fees, late fees and other miscellaneous lease revenue.
(3)
Other rental income is accounted for under the revenue recognition standard and primarily consists of third-party transient parking revenue and ancillary income such as cable and laundry revenue.
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 quarters ended June 30, 2025 and 2024 (amounts in thousands):
June 30, 2025
June 30, 2024
Income Type
Residential
Non-Residential
Total
Residential
Non-Residential
Total
Residential and non-residential rent
$
686,936
$
15,405
$
702,341
$
658,665
$
14,887
$
673,552
Utility recoveries (RUBS income) (1)
25,717
217
25,934
22,787
208
22,995
Parking rent
11,969
408
12,377
11,611
413
12,024
Other lease revenue, net (2)
2,274
(
268
)
2,006
(
1,127
)
(
387
)
(
1,514
)
Total lease revenue
726,896
15,762
742,658
691,936
15,121
707,057
Parking revenue
397
10,480
10,877
480
10,557
11,037
Other revenue
15,084
208
15,292
15,364
705
16,069
Total other rental income (3)
15,481
10,688
26,169
15,844
11,262
27,106
Rental income
$
742,377
$
26,450
$
768,827
$
707,780
$
26,383
$
734,163
(1)
RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.
(2)
Other lease revenue consists of the revenue adjustment related to bad debt (see below for further discussion), service fees, late fees and other miscellaneous lease revenue.
(3)
Other rental income is accounted for under the revenue recognition standard and
primarily consists of third-party transient parking revenue and ancillary income such as cable and laundry revenue.
The following table presents residential accounts receivable and straight-line receivable balances for the Company’s properties as of
June 30, 2025 and December 31, 2024 (amounts in thousands):
Balance Sheet (Other assets):
June 30, 2025
December 31, 2024
Residential accounts receivable balances
$
13,904
$
15,152
Allowance for doubtful accounts
(
8,310
)
(
9,904
)
Net receivable balances
$
5,594
$
5,248
Straight-line receivable balances
$
11,828
$
10,234
The following table presents residential bad debt for the Company’s properties for the
six months and quarters ended June 30, 2025 and 2024 (amounts in thousands):
Six Months Ended June 30,
Quarter Ended June 30,
Income Statement (Rental income):
2025
2024
2025
2024
Bad debt, net
$
14,990
$
17,139
$
7,293
$
7,924
% of residential rental income
1.0
%
1.2
%
1.0
%
1.1
%
8.
Debt
EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. Weighted average interest rates noted below for the six months ended June 30, 2025 include the effect of any derivative instruments and amortization of premiums/discounts/OCI (other comprehensive income) on debt and derivatives.
The following table summarizes the Company’s mortgage notes payable activity for the
six months ended June 30, 2025 (amounts in thousands):
Mortgage notes
payable, net as of
December 31, 2024
Proceeds
Lump sum
payoffs
Scheduled
principal
repayments
Amortization
of premiums/
discounts
Amortization
of deferred
financing
costs, net (1)
Mortgage notes
payable, net as of
June 30, 2025
Fixed Rate Debt:
Secured – Conventional
$
1,401,099
$
—
$
—
$
—
$
788
$
541
$
1,402,428
Floating Rate Debt:
Secured – Tax Exempt
229,591
—
(
37,940
)
—
616
70
192,337
Total
$
1,630,690
$
—
$
(
37,940
)
$
—
$
1,404
$
611
$
1,594,765
(1)
Represents amortization of deferred financing costs, net of debt financing costs.
The following table summarizes certain interest rate and maturity date information as of and for the
six months ended June 30, 2025:
June 30, 2025
Interest Rate Ranges (ending)
0.10
% -
5.25
%
Weighted Average Interest Rate
3.77
%
Maturity Date Ranges
2029
-
2061
As of June 30, 2025, the Company had
$
202.7
m
illion of secured tax-exempt bonds subject to third-party credit enhancement.
Notes
The following table summarizes the Company’s notes activity for the
six months ended June 30, 2025 (amounts in thousands):
Notes, net as of
December 31, 2024
Proceeds
Lump sum
payoffs
Amortization
of premiums/
discounts
Amortization
of deferred
financing
costs, net (1)
Notes, net as of
June 30, 2025
Fixed Rate Debt:
Unsecured – Public
$
5,947,376
$
498,580
(2)
$
(
450,000
)
$
1,233
$
(
2,275
)
$
5,994,914
(1)
Represents amortization of deferred financing costs, net of debt financing costs.
(2)
Issued $
500.0
million of
seven-year
4.95
% unsecured notes, receiving net proceeds before underwriting fees, hedge termination costs and other expenses.
The following table summarizes certain interest rate and maturity date information as of and for the
six months ended June 30, 2025:
June 30, 2025
Interest Rate Ranges (ending)
1.85
% -
7.57
%
Weighted Average Interest Rate
3.68
%
Maturity Date Ranges
2026
-
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 the six months ended June 30, 2025.
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
milli
on 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 Company did not borrow any amounts under its revolving credit facility during the
six months ended June 30, 2025.
The Company has an unsecured commercial paper note program under which it may borrow up to a maximum of $
1.5
billion 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.
The following table summarizes certain weighted average interest rate, maturity and amount outstanding information for the commercial paper program as of and for the
six months ended June 30, 2025:
June 30, 2025
Weighted Average Interest Rate (1)
4.60
%
Weighted Average Maturity (in days)
29
Weighted Average Amount Outstanding
$
372.1
million
(1)
The notes bear interest at various floating rates.
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
June 30, 2025 (amounts in thousands):
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.
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:
•
Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
•
Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
•
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
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
June 30, 2025 and December 31, 2024, respectively (amounts in thousands):
June 30, 2025
December 31, 2024
Carrying Value
Estimated Fair
Value (Level 2)
Carrying Value
Estimated Fair
Value (Level 2)
Mortgage notes payable, net
$
1,594,765
$
1,522,268
$
1,630,690
$
1,506,955
Unsecured debt, net
6,777,061
6,443,791
6,491,055
6,036,591
Total debt, net
$
8,371,826
$
7,966,059
$
8,121,745
$
7,543,546
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
June 30, 2025 and December 31, 2024, respectively (amounts in thousands):
Fair Value Measurements at Reporting Date Using
Description
Balance Sheet
Location
6/30/2025
Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets
Supplemental Executive Retirement Plan
Other Assets
$
101,020
$
101,020
$
—
$
—
Liabilities
Supplemental Executive Retirement Plan
Other Liabilities
$
101,020
$
101,020
$
—
$
—
Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners
Mezzanine
$
317,905
$
—
$
317,905
$
—
Fair Value Measurements at Reporting Date Using
Description
Balance Sheet
Location
12/31/2024
Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)
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
six months ended June 30, 2025 and 2024, respectively (amounts in thousands):
June 30, 2025
Type of Cash Flow Hedge
Amount of
Gain/(Loss)
Recognized in OCI
on Derivative
Location of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income
Amount of
Gain/(Loss)
Reclassified from
Accumulated
OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps
$
(
3,550
)
Interest expense
$
(
951
)
Total
$
(
3,550
)
$
(
951
)
June 30, 2024
Type of Cash Flow Hedge
Amount of
Gain/(Loss)
Recognized in OCI
on Derivative
Location of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income
Amount of
Gain/(Loss)
Reclassified from
Accumulated
OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps
$
—
Interest expense
$
(
1,210
)
Total
$
—
$
(
1,210
)
As of June 30, 2025 and December 31, 2024, there were approximately
$
1.6
million and $
4.2
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 $
1.1
million may be recognized as additional interest expense during the twelve months ending June 30, 2026.
During the six months ended June 30, 2025
, the Company paid approximately $
3.5
million to settle
five
forward starting swaps in conjunction with the issuance of $
500.0
million of
seven-year
unsecured public notes. The entire $
3.5
million was initially deferred as a component of accumulated other comprehensive income (loss) and $
2.3
million will be recognized as an increase to interest expense over the
seven-year
term of the notes. The remaining $
1.2
million covering the final three years of the
ten-year
term of the swaps will be amortized in conjunction with a future note refinance.
Other
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
June 30, 2025 and December 31, 2024 (amounts in thousands):
June 30, 2025
December 31, 2024
Real Estate Technology Investments
$
21,760
$
22,159
During the six months ended June 30, 2025, the Company sold a portion of one of these investment securities for proceeds of approxima
tely $
0.4
m
illion, which approximated the Company's basis in the investment security.
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):
Six Months Ended June 30,
Quarter Ended June 30,
2025
2024
2025
2024
Numerator for net income per share – basic:
Net income
$
463,583
$
488,587
$
198,785
$
183,555
Allocation to Noncontrolling Interests – Operating Partnership
(
12,328
)
(
13,278
)
(
5,226
)
(
5,003
)
Net (income) loss attributable to Noncontrolling
Interests – Partially Owned Properties
(
2,307
)
(
2,039
)
(
1,203
)
(
1,069
)
Preferred distributions
(
711
)
(
902
)
(
355
)
(
355
)
Premium on redemption of Preferred Shares
—
(
1,444
)
—
—
Numerator for net income per share – basic
$
448,237
$
470,924
$
192,001
$
177,128
Numerator for net income per share – diluted:
Net income
$
463,583
$
488,587
$
198,785
$
183,555
Net (income) loss attributable to Noncontrolling
Interests – Partially Owned Properties
(
2,307
)
(
2,039
)
(
1,203
)
(
1,069
)
Preferred distributions
(
711
)
(
902
)
(
355
)
(
355
)
Premium on redemption of Preferred Shares
—
(
1,444
)
—
—
Numerator for net income per share – diluted
$
460,565
$
484,202
$
197,227
$
182,131
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic
379,359
378,699
379,508
378,578
Effect of dilutive securities:
OP Units
10,420
10,681
10,329
10,693
Long-term compensation shares/units
1,566
1,168
1,661
1,271
Denominator for net income per share – diluted
391,345
390,548
391,498
390,542
Net income per share – basic
$
1.18
$
1.24
$
0.51
$
0.47
Net income per share – diluted
$
1.18
$
1.24
$
0.50
$
0.47
ERP Operating Limited Partnership
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):
Six Months Ended June 30,
Quarter Ended June 30,
2025
2024
2025
2024
Numerator for net income per Unit – basic and diluted:
Net income
$
463,583
$
488,587
$
198,785
$
183,555
Net (income) loss attributable to Noncontrolling
Interests – Partially Owned Properties
(
2,307
)
(
2,039
)
(
1,203
)
(
1,069
)
Allocation to Preference Units
(
711
)
(
902
)
(
355
)
(
355
)
Allocation to premium on redemption of Preference Units
—
(
1,444
)
—
—
Numerator for net income per Unit – basic and diluted
$
460,565
$
484,202
$
197,227
$
182,131
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit – basic
389,779
389,380
389,837
389,271
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting
of the Company’s long-term compensation shares/units
As of June 30, 2025
, 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
June 30, 2025 (total project costs remaining in thousands):
Projects
Apartment Units
Total Project Costs Remaining (1)
Projects Under Development
Consolidated
1
440
$
63,546
Unconsolidated
2
639
150,228
Total Projects Under Development
3
1,079
$
213,774
(1)
The
Company’s share of th
e $
213.8
million in total project costs remaining approximates $
64.5
mil
lion, with the balance funded by the Company’s joint venture partners (approximately
$
3.6
million) and/or applicable construction loans (approximately
$
145.7
million).
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 June 30, 2025
, the Company has invested in
eleven
separate such investments totali
ng $
47.0
m
illion with aggregate remaining commitments of approximately
$
21.0
million.
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.
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 June 30, 2025 and December 31, 2024, the Company’s litigation accruals approximated
$
42.1
milli
on and $
42.4
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
June 30, 2025 and December 31, 2024, 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.
12.
Reportable Segments
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:
•
Same store primarily includes all properties acquired or completed that were stabilized (defined as having achieved
90
% physical occupancy for three consecutive months) for all of the current and comparable periods presented.
•
Non-same store primarily includes all properties acquired during the current and prior year, any properties in lease-up and not stabilized for all of the current and comparable periods presented and any properties undergoing major renovations.
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
six months ended June 30, 2025 and 2024
, respectively, 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
six months and quarters ended June 30, 2025 and 2024, 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
six months and quarters ended June 30, 2025 and 2024, respectively (amounts in thousands):
Six Months Ended June 30,
Quarter Ended June 30,
2025
2024
2025
2024
Net income
$
463,583
$
488,587
$
198,785
$
183,555
Adjustments:
Property management
70,602
68,969
34,786
33,511
General and administrative
36,786
34,351
18,531
18,631
Depreciation
497,635
450,093
240,889
224,398
Net (gain) loss on sales of real estate properties
(
212,432
)
(
227,994
)
(
58,280
)
(
39,809
)
Interest and other income
(
3,821
)
(
10,657
)
(
2,129
)
(
1,328
)
Other expenses
8,961
45,123
4,805
13,385
Interest:
Expense incurred, net
147,431
133,040
75,317
65,828
Amortization of deferred financing costs
4,247
3,836
2,103
1,918
Income and other tax expense (benefit)
829
635
407
331
(Income) loss from investments in
unconsolidated entities
11,407
3,372
4,996
1,674
Net (gain) loss on sales of land parcels
78
—
11
—
Total NOI
$
1,025,306
$
989,355
$
520,221
$
502,094
The following tables present NOI from our rental real estate for the
six months and quarters ended June 30, 2025 and 2024, respectively (amounts in thousands):
Six Months Ended June 30, 2025
Six Months Ended June 30, 2024
Rental
Income
Operating
Expenses
NOI
Rental
Income
Operating
Expenses
NOI
Same store (1)
Los Angeles
$
242,484
$
76,589
$
165,895
$
239,386
$
73,686
$
165,700
Orange County
63,811
14,221
49,590
62,272
13,805
48,467
San Diego
42,392
9,307
33,085
41,370
8,604
32,766
Subtotal - Southern California
348,687
100,117
248,570
343,028
96,095
246,933
San Francisco
223,067
67,254
155,813
214,833
64,258
150,575
Washington, D.C.
226,463
71,768
154,695
216,933
68,319
148,614
New York
254,116
104,832
149,284
246,136
101,455
144,681
Boston
164,613
49,663
114,950
162,532
47,354
115,178
Seattle
139,131
39,657
99,474
135,974
38,863
97,111
Denver
38,367
11,808
26,559
39,690
11,835
27,855
Other Expansion Markets
39,391
16,952
22,439
40,868
16,219
24,649
Total same store
1,433,835
462,051
971,784
1,399,994
444,398
955,596
Non-same store
91,124
33,292
57,832
20,162
9,509
10,653
Total reportable segments
1,524,959
495,343
1,029,616
1,420,156
453,907
966,249
Other (2)
4,678
8,988
(
4,310
)
44,825
21,719
23,106
Totals
$
1,529,637
$
504,331
$
1,025,306
$
1,464,981
$
475,626
$
989,355
(1)
For the six months ended June 30, 2025 and 2024, same store represented
75,072
apartment units.
(2)
Other includes development, other corporate operations and operations prior to disposition for properties sold.
For the quarters ended June 30, 2025 and 2024, same store represented
75,950
apartment units.
(2)
Other includes development, other corporate operations and operations prior to disposition for properties sold.
The
following tables present reconciliations of operating expenses for each reportable segment for the six months and quarters ended June 30, 2025 and 2024, respectively (amounts in thousands):
Six Months Ended June 30, 2025
Six Months Ended June 30, 2024
Same Store (1)
Non-Same Store
Total
Same Store (1)
Non-Same Store
Total
Operating expenses:
Real estate taxes
$
187,733
$
11,837
$
199,570
$
183,209
$
3,488
$
186,697
On-site payroll
85,786
6,481
92,267
83,418
1,697
85,115
Utilities
73,270
5,042
78,312
67,350
1,470
68,820
Repairs and maintenance
61,688
5,562
67,250
59,582
1,165
60,747
Other (2)
53,574
4,370
57,944
50,839
1,689
52,528
Total
$
462,051
$
33,292
$
495,343
$
444,398
$
9,509
$
453,907
(1)
For the six months ended June 30, 2025 and 2024, same store represented
75,072
apartment units.
(2)
Other operating expenses for each reportable segment includes insurance, leasing and advertising and other on-site operating expenses.
Quarter Ended June 30, 2025
Quarter Ended June 30, 2024
Same Store (1)
Non-Same Store
Total
Same Store (1)
Non-Same Store
Total
Operating expenses:
Real estate taxes
$
93,975
$
5,647
$
99,622
$
92,375
$
833
$
93,208
On-site payroll
42,937
2,844
45,781
41,962
411
42,373
Utilities
34,344
2,057
36,401
31,711
295
32,006
Repairs and maintenance
32,620
2,842
35,462
30,859
381
31,240
Other (2)
25,558
1,986
27,544
24,411
557
24,968
Total
$
229,434
$
15,376
$
244,810
$
221,318
$
2,477
$
223,795
(1)
For the quarters ended June 30, 2025 and 2024, same store represented
75,950
apartment units.
(2)
Other operating expenses for each reportable segment includes insurance, leasing and advertising and other on-site operating expenses.
The f
ollowing table presents a reconciliation of total assets and capital expenditures as of and for the six months ended June 30, 2025 (amounts in thousands):
June 30, 2025
Same Store (1)
Non-Same Store
Other (2)
Total
Total assets
$
17,409,992
$
2,907,037
$
710,485
$
21,027,514
Capital expenditures
$
128,559
$
15,239
$
570
$
144,368
(1)
For the six months ended June 30, 2025, same store represented
75,072
apartment units.
(2)
Other includes development, other corporate operations and capital expenditures for properties sold.
13.
Subsequent Events
There have been no material subsequent events occurring since June 30, 2025.
Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
For further information including definitions for capitalized terms not defined herein, refer to the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024.
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 the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024, 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.
Overview
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 June 30, 2025 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.
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
The Company’s and the Operating Partnership’s overall business objectives and operating and investing strategies have not changed from the information included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024.
In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the six months ended June 30, 2025:
Portfolio Rollforward
($ in thousands)
Properties
Apartment
Units
Purchase Price
Acquisition Cap Rate
12/31/2024
311
84,249
Acquisitions:
Consolidated Rental Properties
8
2,064
$
533,843
5.1
%
Sales Price
Disposition
Yield
Dispositions:
Consolidated Rental Properties
(3
)
(835
)
$
(346,600
)
(5.1
%)
Consolidated Land Parcels
—
—
$
(4,300
)
Completed Developments – Consolidated
2
495
Completed Developments – Unconsolidated
1
450
Configuration Changes
—
(1
)
6/30/2025
319
86,422
Acquisitions
•
The consolidated properties acquired during the six months ended June 30, 2025 are located in the Atlanta market.
Dispositions
•
The consolidated properties disposed of during the six months ended June 30, 2025 were located in the San Diego and Seattle (2) markets; and
•
The consolidated land parcel disposed of during the six months ended June 30, 2025 was located in the New York market.
Developments
•
Consolidated:
•
The Company completed construction on two consolidated apartment properties during the six months ended June 30, 2025, located in the San Francisco and Denver markets, consisting of an aggregate of 495 apartment units totaling approximately $237.8 million of development costs;
•
The Company acquired its joint venture partner's 10% interest in a previously unconsolidated 270-unit apartment property in the Denver market for approximately $3.6 million in cash and also contributed $50.5 million for the joint venture to repay the third-party construction loan encumbering the property. The property (one of the two consolidated projects noted above) is now wholly owned; and
•
The Company spent approximately $59.7 million during the six months ended June 30, 2025, primarily for consolidated development projects.
•
Unconsolidated:
•
The Company completed construction on one unconsolidated apartment property during the six months ended June 30, 2025, located in the New York market, consisting of 450 apartment units totaling approximately $201.2 million of development costs; and
•
The Company spent approximately $56.3 million during the six months ended June 30, 2025, primarily for unconsolidated development projects.
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.
Comparison of the six months and quarter ended June 30, 2025 to the six months and quarter ended June 30, 2024
The following table presents a reconciliation of diluted earnings per share/unit for the six months and quarter ended June 30, 2025 as compared to the same periods in 2024:
Six Months Ended
June 30
Quarter Ended
June 30
Diluted earnings per share/unit for period ended 2024
$
1.24
$
0.47
Property NOI
0.08
0.05
Interest expense
(0.04
)
(0.02
)
Corporate overhead (1)
(0.01
)
—
Net gain/loss on property sales
(0.04
)
0.05
Depreciation expense
(0.14
)
(0.06
)
Other
0.09
0.01
Diluted earnings per share/unit for period ended 2025
$
1.18
$
0.50
(1)
Corporate overhead includes property management and general and administrative expenses.
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):
Six Months Ended June 30,
Quarter Ended June 30,
2025
2024
$
Change
%
Change
2025
2024
$
Change
%
Change
Net income
$
463,583
$
488,587
$
(25,004
)
(5.1
)%
$
198,785
$
183,555
$
15,230
8.3
%
Adjustments:
Property management
70,602
68,969
1,633
2.4
%
34,786
33,511
1,275
3.8
%
General and administrative
36,786
34,351
2,435
7.1
%
18,531
18,631
(100
)
(0.5
)%
Depreciation
497,635
450,093
47,542
10.6
%
240,889
224,398
16,491
7.3
%
Net (gain) loss on sales of real
estate properties
(212,432
)
(227,994
)
15,562
(6.8
)%
(58,280
)
(39,809
)
(18,471
)
46.4
%
Interest and other income
(3,821
)
(10,657
)
6,836
(64.1
)%
(2,129
)
(1,328
)
(801
)
60.3
%
Other expenses
8,961
45,123
(36,162
)
(80.1
)%
4,805
13,385
(8,580
)
(64.1
)%
Interest:
Expense incurred, net
147,431
133,040
14,391
10.8
%
75,317
65,828
9,489
14.4
%
Amortization of deferred
financing costs
4,247
3,836
411
10.7
%
2,103
1,918
185
9.6
%
Income and other tax expense
(benefit)
829
635
194
30.6
%
407
331
76
23.0
%
(Income) loss from investments in
unconsolidated entities
See Note 12 in the Notes to Consolidated Financial Statements for our disclosure of reportable segments.
The comparison discussions provided below detail the changes in results for the six months ended June 30, 2025 as compared to the prior year period.
•
The increase in same store rental income is primarily driven by good demand and modest supply across most of our markets.
•
The increase in same store operating expenses is due primarily to:
•
Real estate taxes – A $4.5 million increase due to escalation in rates and assessed values including an approximately one percentage point contribution to growth from 421-a tax abatement burnoffs in New York City. Once the burnoffs are completed, previously rent-restricted apartment units will transition to market;
•
On-site payroll – A $2.4 million increase primarily driven by higher wages, partially offset by the impact of various innovation initiatives;
•
Utilities – A $5.9 million increase primarily driven by higher commodity prices, higher sewer and trash rates and higher water usage in Southern California, along with a challenging comparable period;
•
Repairs and maintenance - A $2.1 million increase primarily driven by costs associated with the implementation of various resident technology initiatives (including bulk Wi-Fi programs); and
•
Other on-site operating expenses – A $1.8 million increase primarily due to higher ground lease rent, property-related legal expenses, association fees and other expenses.
•
Non-same store/other NOI results consist primarily of properties acquired in calendar years 2024 and 2025, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 2024 and 2025 sold properties. The increase in NOI is primarily a result of the Company's significant 2025 and second half of 2024 net acquisition activity, which is positively impacting 2025 results.
•
The increase in consolidated total NOI is a result of the Company’s higher NOI from non-same store properties as noted above and higher NOI from same store properties, largely due to improvement in same store revenues and the Company's continued focus on same store expense efficiency.
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 increases during the six months and quarter ended June 30, 2025 as compared to the prior year periods are primarily attributable to increases in payroll-related costs, training and marketing expenses, information technology expenses and legal and professional fees, partially offset by decreases in workforce/contractors costs.
General and administrative expenses, which include corporate operating expenses, increased during the six months ended June 30, 2025 as compared to the prior year period, primarily due to increases in payroll-related costs and other public company costs. General and administrative expenses decreased during the quarter ended June 30, 2025 compared to the prior year period, primarily due to decreases in payroll-related costs and other public company costs, partially offset by increases in workforce/contractors costs.
Depreciation expense increased during the six months and quarter ended June 30, 2025 as compared to the prior year periods, primarily as a result of additional depreciation expense on properties acquired in 2024 and 2025 and development properties placed in service during 2024 and 2025, partially offset by lower depreciation from properties sold in 2024 and 2025.
Net gain on sales of real estate properties decreased during the six months ended June 30, 2025 as compared to the prior year period, primarily as a result of a lower property volume and the mix of properties sold in 2025 vs. 2024. Net gain on sales of real estate properties increased during the quarter ended June 30, 2025 as compared to the prior year period, primarily as a result of the mix of properties sold in the periods.
Interest and other income decreased during the six months ended June 30, 2025 as compared to the prior year period, primarily due to a net decrease in realized/unrealized gains on various investment securities, lower short-term investment income on restricted deposit accounts due to a lower rate environment and lower overall invested balances and lower insurance/litigation settlement proceeds received during 2025 as compared to 2024. Interest and other income increased during the quarter ended June 30, 2025 as compared to the prior year period, primarily due to a net increase in realized/unrealized gains on various investment securities, partially offset by decreases in insurance/litigation settlement proceeds received during 2025 as compared to 2024.
Other expenses decreased during the six months and quarter ended June 30, 2025 as compared to the prior year periods, primarily due to decreases in litigation accruals and advocacy contributions.
Interest expense, including amortization of deferred financing costs, increased during the six months and quarter ended June 30, 2025 as compared to the prior year periods, primarily due to higher overall debt balances outstanding and higher overall rates. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the six months ended June 30, 2025 was 3.93% as compared to 3.89% for the prior year period, and for the quarter ended June 30, 2025 was 3.93% as compared to 3.88% for the prior year period. The Company capitalized interest of approximately $6.7 million and $6.9 million during the six months ended June 30, 2025 and 2024, respectively, and $2.8 million and $3.8 million during the quarters ended June 30, 2025 and 2024, respectively.
Loss from investments in unconsolidated entities increased during the six months and quarter ended June 30, 2025 as compared to the prior year periods, primarily as a result of losses incurred on our unconsolidated development properties which recently started lease-up activities.
Same Store Results
Properties that the Company owned and were stabilized for all of both of the six months ended June 30, 2025 and 2024, which represented 75,072 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 six months ended June 30, 2025 and 2024:
June YTD 2025 vs. June YTD 2024
Same Store Residential Results/Statistics by Market
Increase (Decrease) from Prior Year
Markets/Metro Areas
Apartment
Units
June YTD 25
% of
Actual
NOI
June YTD 25
Average
Rental
Rate
June YTD 25
Weighted
Average
Physical
Occupancy %
June YTD 25
Turnover
Average
Rental
Rate
Physical
Occupancy
Turnover
Los Angeles
14,136
17.6
%
$
2,962
95.7
%
19.8
%
1.2
%
0.1
%
(1.5
%)
Orange County
3,718
5.3
%
2,966
96.4
%
16.7
%
2.1
%
0.4
%
(1.5
%)
San Diego
2,209
3.5
%
3,290
96.6
%
19.8
%
1.7
%
0.5
%
0.4
%
Subtotal – Southern California
20,063
26.4
%
2,999
95.9
%
19.3
%
1.4
%
0.2
%
(1.2
%)
San Francisco
11,093
16.4
%
3,405
97.0
%
18.5
%
3.1
%
0.7
%
(2.7
%)
Washington, D.C.
13,533
16.2
%
2,822
97.1
%
17.8
%
4.4
%
0.0
%
(0.6
%)
New York
8,536
14.7
%
4,746
97.8
%
15.9
%
3.2
%
0.6
%
(0.2
%)
Boston
7,077
11.3
%
3,669
96.2
%
18.2
%
2.4
%
0.0
%
(0.6
%)
Seattle
8,458
9.9
%
2,663
96.4
%
20.8
%
3.2
%
0.2
%
(1.0
%)
Denver
2,792
2.8
%
2,350
95.7
%
24.1
%
(2.6
%)
(0.8
%)
(0.4
%)
Other Expansion Markets
3,520
2.3
%
1,886
95.1
%
24.3
%
(4.2
%)
(0.1
%)
(5.2
%)
Total
75,072
100.0
%
$
3,178
96.5
%
19.0
%
2.5
%
0.2
%
(1.3
%)
Note: The above table reflects Residential same store results only. Residential operations account for more than 96.0% of total revenues for the six months ended June 30, 2025.
During the six months ended June 30, 2025, the Company's operating business performed well, driven by good and sustained demand across most of our markets and supported by a continuing constructive job market, high employment levels and high wage growth among our target renter demographic. Competitive new supply was modest in most of our Established Markets, but continues to be elevated in our Expansion Markets. While demand has been steady, maintaining occupancy in our Expansion Markets has been challenging and has required a continued use of Leasing Concessions to attract and retain residents. On a positive note, Atlanta has shown a few months of stability, with early indications of potential improvement in market conditions.
Thus far in 2025, our best performing markets have been Washington, D.C., New York and San Francisco. Each of these markets has experienced healthy demand as evidenced by strong Physical Occupancy, healthy pricing and low Turnover. Recently, in Washington, D.C. we have seen some slowing in the market likely due to uncertainty around jobs given cuts by the government, while in San Francisco we continue to see a strong post pandemic recovery. The Seattle market also continued to improve due to large
employers’ return to office policies. While new supply in Seattle has temporarily affected rental rate growth, we expect this impact to lessen throughout the year as most of the concentrated deliveries are behind us.
Overall, the fundamentals of our business are healthy despite recent economic concerns. Long-term, we expect a positive forward set up for our business due to 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 more 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 $1.7 billion in readily available liquidity, a strong balance sheet, well-staggered 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.
Statements of Cash Flows
The following table sets forth our sources and uses of cash flows for the six months ended June 30, 2025 and 2024 (amounts in thousands):
June 30,
2025
2024
Cash flows provided by (used for):
Operating activities
$
785,070
$
817,968
Investing activities
$
(518,995
)
$
(2,357
)
Financing activities
$
(294,287
)
$
(817,185
)
The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the six months ended June 30, 2025.
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 six months ended June 30, 2025 as compared to the prior year period decreased by approximately $32.9 million primarily as a result of the timing of certain real estate tax payments, partially offset by increases in 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 six months ended June 30, 2025, key drivers were:
•
Acquired eight consolidated rental properties for approximately $534.9 million;
•
Disposed of three consolidated rental properties and one consolidated land parcel, receiving net proceeds of approximately $343.1 million;
•
Invested $59.7 million primarily in consolidated development projects;
•
Invested $144.4 million in capital expenditures to real estate;
•
Invested $62.1 million primarily in unconsolidated development joint venture entities as well as unconsolidated investments in real estate technology funds/companies for various technology initiatives; and
•
Acquired its joint venture partner's 10% interest in a previously unconsolidated apartment property for approximately $3.6 million in cash and also contributed $50.5 million for the joint venture to repay the third-party construction loan encumbering the property.
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 six months ended June 30, 2025, key drivers were:
•
Repaid $37.9 million on mortgage loans;
•
Repaid $450.0 million of 3.375% unsecured notes;
•
Received net proceeds of $238.5 million from our unsecured commercial paper note program;
•
Paid dividends/distributions on Common Shares, Preferred Shares, Units (including OP Units and restricted units) and noncontrolling interests in partially owned properties totaling approximately $540.1 million; and
•
Issued $500.0 million of seven-year 4.95% unsecured notes, receiving net proceeds of approximately $498.6 million before underwriting fees, hedge termination costs and other expenses.
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 June 30, 2025 and December 31, 2024 (amounts in thousands):
June 30, 2025
December 31, 2024
Cash and cash equivalents
$
31,276
$
62,302
Restricted deposits
$
100,678
$
97,864
Unsecured revolving credit facility availability
$
1,711,552
$
1,952,067
Credit Facility and Commercial Paper Program
The Company has a $2.5 billion unsecured revolving credit facility maturing 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 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.
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 July 31, 2025 (amounts in thousands):
The Company declared a dividend/distribution for the first and second quarters of 2025 of $0.6925 per share/unit in each quarter, an annualized increase of 2.6% over the amount paid in 2024. All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees.
Total dividends/distributions paid in July 2025 amounted to $270.7 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended June 30, 2025.
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 $30.6 billion in investment in real estate on the Company’s balance sheet at June 30, 2025, $27.5 billion or 90.1% was unencumbered. However, there can be no assurances that these sources of capital will be available to the Company in the future on acceptable terms or otherwise. For additional details, see Item 1A,
Risk Factors,
of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024.
EQR issues equity and guarantees certain debt of the Operating Partnership from time to time. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.
The Company’s total debt summary schedule as of June 30, 2025 is as follows:
Debt Summary as of June 30, 2025
($ in thousands)
Debt
Balances
% of Total
Secured
$
1,594,765
19.0
%
Unsecured
6,777,061
81.0
%
Total
$
8,371,826
100.0
%
Fixed Rate Debt:
Secured – Conventional
$
1,402,428
16.7
%
Unsecured – Public
5,994,914
71.6
%
Fixed Rate Debt
7,397,342
88.3
%
Floating Rate Debt:
Secured – Tax Exempt
192,337
2.3
%
Unsecured – Revolving Credit Facility
—
—
Unsecured – Commercial Paper Program
782,147
9.4
%
Floating Rate Debt
974,484
11.7
%
Total
$
8,371,826
100.0
%
The Company’s long-term financing and capital needs and sources have not changed materially from the information included in the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2024.
The Company’s and the Operating Partnership’s critical accounting policies and estimates have not changed from the information included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024.
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 the six months and quarters ended June 30, 2025 and 2024:
Funds From Operations and Normalized Funds From Operations
(Amounts in thousands)
Six Months Ended June 30,
Quarter Ended June 30,
2025
2024
2025
2024
Net income
$
463,583
$
488,587
$
198,785
$
183,555
Net (income) loss attributable to Noncontrolling
Interests – Partially Owned Properties
(2,307
)
(2,039
)
(1,203
)
(1,069
)
Preferred/preference distributions
(711
)
(902
)
(355
)
(355
)
Premium on redemption of Preferred Shares/Preference Units
—
(1,444
)
—
—
Net income available to Common Shares and Units / Units
460,565
484,202
197,227
182,131
Adjustments:
Depreciation
497,635
450,093
240,889
224,398
Depreciation – Non-real estate additions
(1,834
)
(1,897
)
(884
)
(942
)
Depreciation – Partially Owned Properties
(963
)
(1,089
)
(485
)
(547
)
Depreciation – Unconsolidated Properties
8,735
1,452
4,340
1,117
Net (gain) loss on sales of unconsolidated entities - operating assets
(138
)
—
(174
)
—
Net (gain) loss on sales of real estate properties
(212,432
)
(227,994
)
(58,280
)
(39,809
)
FFO available to Common Shares and Units / Units (1) (3) (4)
751,568
704,767
382,633
366,348
Adjustments:
Write-off of pursuit costs
2,048
1,369
727
821
Debt extinguishment and preferred share/preference unit redemption
(gains) losses
97
1,444
—
—
Non-operating asset (gains) losses
624
(3,216
)
186
2,890
Other miscellaneous items
4,971
40,674
3,244
10,083
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
$
759,308
$
745,038
$
386,790
$
380,142
FFO (1) (3)
$
752,279
$
707,113
$
382,988
$
366,703
Preferred/preference distributions
(711
)
(902
)
(355
)
(355
)
Premium on redemption of Preferred Shares/Preference Units
—
(1,444
)
—
—
FFO available to Common Shares and Units / Units (1) (3) (4)
$
751,568
$
704,767
$
382,633
$
366,348
Normalized FFO (2) (3)
$
760,019
$
745,940
$
387,145
$
380,497
Preferred/preference distributions
(711
)
(902
)
(355
)
(355
)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
$
759,308
$
745,038
$
386,790
$
380,142
(1)
The National Association of Real Estate Investment Trusts (“Nareit”) defines funds from operations (“FFO”) (December 2018 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains or losses from sales and impairment write-downs of depreciable real estate and land when connected to the main business of a REIT, impairment write-downs of investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and depreciation and amortization related to real estate. Adjustments for partially owned consolidated and unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.
(2)
Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
•
the impact of any expenses relating to non-operating real estate asset impairment;
•
pursuit cost write-offs;
•
gains and losses from early debt extinguishment and preferred share/preference unit redemptions;
The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses from sales and impairment write-downs of depreciable real estate and excluding depreciation related to real estate (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.
(4)
FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units in accordance with GAAP. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership.” Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.
Item 3. Quantitative and Qualitat
ive Disclosures About Market Risk
The Company’s and the Operating Partnership’s market risk has not changed materially from the amounts and information reported in Part II, Item 7A,
Quantitative and Qualitative Disclosures About Market Risk
, to the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 4. Controls
and Procedures
Equity Residential
(a)
Evaluation of Disclosure Controls and Procedures:
Effective as of June 30, 2025, 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)
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 second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ERP Operating Limited Partnership
(a)
Evaluation of Disclosure Controls and Procedures:
Effective as of June 30, 2025, 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.
Changes in Internal Control over Financial Reporting:
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 second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.
PART II. OTHER
INFORMATION
Item 1. Lega
l Proceedings
There have been no changes to the legal proceedings discussed in Part I, Item 3 of the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2024. As of June 30, 2025, the Company does not believe there is any litigation pending or threatened against it that, either individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company and its financial condition. See Note 11 in the Notes to Consolidated Financial Statements for further discussion.
Item 1A. R
isk Factors
There have been no material changes to the risk factors that were discussed in Part I, Item 1A of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregistered Sales of Equi
ty Securities and Use of Proceeds
Unregistered Common Shares Issued in the Quarter Ended June 30, 2025 (Equity Residential)
During the quarter ended June 30, 2025, EQR issued 117,000 Common Shares in exchange for 117,000 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 3. Defaults Up
on Senior Securities
None.
Item 4. Mine Saf
ety Disclosures
Not applicable.
Item 5. Other
Information
During the quarter ended
June 30, 2025
, 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.
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).
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Pursuant to the requirements 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.
EQUITY RESIDENTIAL
Date:
August 6, 2025
By:
/s/ Robert A. Garechana
Robert A. Garechana
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date:
August 6, 2025
By:
/s/ Ian S. Kaufman
Ian S. Kaufman
Senior Vice President and Chief Accounting Officer
Insider Ownership of EQUITY RESIDENTIAL
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