Equity Residential Reports Third Quarter 2021 Results

Equity Residential Reports Third Quarter 2021 Results

West Point, MS (39773)

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By: Equity Residential via Business Wire

October 26, 2021 at 16:15 PM EDT

Full Year Guidance Ranges Raised as Strong Recovery Continues Across Portfolio

Equity Residential (NYSE: EQR) today reported results for the quarter and nine months ended September 30, 2021 and has posted a Q3 2021 Management Presentation to its website as referenced below.

Third Quarter 2021 Results

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


	Quarter Ended September 30,
	2021		2020		$ Change		% Change
Earnings Per Share (EPS)	$	1.15	$	0.24	$	0.91		379.2	%
Funds from Operations (FFO) per share	$	0.76	$	0.76	$	—	––
Normalized FFO per share	$	0.77	$	0.77	$	—	––


	Nine Months Ended September 30,
	2021		2020		$ Change			% Change
Earnings Per Share (EPS)	$	2.14	$	1.77	$	0.37			20.9	%
Funds from Operations (FFO) per share	$	2.21	$	2.48	$	(0.27	)		(10.9	%)
Normalized FFO per share	$	2.17	$	2.49	$	(0.32	)		(12.9	%)

“Our third quarter results and upward guidance revisions reflect the continued rapid recovery in our business. For the first time since the pandemic began, we achieved positive quarter over quarter total same store revenue growth,” said Mark J. Parrell, Equity Residential’s President and CEO. “With continued strong demand and growing incomes for our resident demographic, we believe that we are well positioned to deliver same store revenue results in 2022 that will be among the best in our Company’s history.”

Highlights

The Company reported positive total same store revenue growth for the third quarter of 2021 compared to the same period of 2020 driven by strong Physical Occupancy, continued improvement in pricing power, an increase in Non-Residential revenues and the governmental rental assistance described below. This is the first time the Company has reported positive quarter over quarter revenue growth since the beginning of the pandemic. The Company also raised its annual guidance for same store revenues and NOI, as well as EPS, FFO per share and Normalized FFO per share.
Similar to prior quarters, the Company collected approximately 97% of its expected Residential revenues in the third quarter of 2021. Additionally, the Company received governmental rental assistance payments paid on behalf of residents of approximately $13.4 million and $18.3 million during the third quarter of 2021 and nine months ended September 30, 2021, respectively.
During the third quarter of 2021, the Company acquired eight operating properties, consisting of 2,108 apartment units, for an aggregate purchase price of approximately $740.2 million and a weighted average Acquisition Cap Rate of 3.9%. The acquisitions include properties in Austin and Dallas/Ft. Worth, TX, marking the Company’s re-entry into these markets, as well as Atlanta, GA, a market that the Company reentered earlier this year.
During the third quarter of 2021, the Company sold five California operating properties, consisting of 1,047 apartment units, for an aggregate sales price of approximately $612.3 million and a weighted average Disposition Yield of 3.9%.
In August 2021, the Company entered into a strategic partnership with Toll Brothers, Inc. (NYSE: TOL) to develop apartment communities in key Equity Residential markets.
The Company recently published its 2021 Environmental, Social and Governance (ESG) report highlighting Equity Residential’s ESG goals and accomplishments.

Results Per Share

The change in EPS for the quarter ended September 30, 2021 compared to the same period of 2020 is due primarily to higher property sale gains in the third quarter of 2021, the various adjustment items listed on page 26 of this release and the items described below. The change in EPS for the nine months ended September 30, 2021 compared to the same period of 2020 is due primarily to higher property sale gains in the first nine months of 2021, the various adjustment items listed on page 26 of this release and the items described below.

The per share change in FFO for both the quarter and nine months ended September 30, 2021 compared to the same periods of 2020 is due primarily to the various adjustment items listed on page 26 of this release and the items described below.

The per share change in Normalized FFO is due primarily to:

	Positive/(Negative) Impact
	Third Quarter 2021 vs. Third Quarter 2020			September YTD 2021 vs. September YTD 2020
Residential same store Net Operating Income (NOI)	$	(0.05	)	$	(0.39	)
Non-Residential same store NOI		0.04			0.05
2021 and 2020 transaction activity impact on NOI, net		(0.01	)		(0.06	)
Interest expense, net		0.03			0.12
Other items, including corporate overhead ⁽¹⁾		(0.01	)		(0.04	)
Net	$	—		$	(0.32	)

(1)	Corporate overhead includes property management and general and administrative expenses.

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 28 through 33 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 30 and 31 of this release.

Same Store Results

The Company has provided a breakout of Residential and Non-Residential same store results on page 11 of this release with definitions that can be found on page 32 of this release. Non-Residential operations account for approximately 3.8% of total revenues for the nine months ended September 30, 2021. The table below reflects same store Residential only results.

	Third Quarter 2021 vs. Third Quarter 2020	Third Quarter 2021 vs. Second Quarter 2021	September YTD 2021 vs. September YTD 2020
Apartment Units	75,509	75,884	75,288
Physical Occupancy	96.6% vs. 94.7%	96.6% vs. 96.1%	95.9% vs. 95.3%

Revenues	(2.5%)	3.5%	(7.3%)
Expenses	2.1%	4.0%	3.1%
NOI	(4.8%)	3.3%	(12.1%)

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis. See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

	Third Quarter 2021 vs. Third Quarter 2020		Third Quarter 2021 vs. Second Quarter 2021		September YTD 2021 vs. September YTD 2020
	% Change		% Change		% Change
Same Store Residential Revenues-
comparable period
Lease rates ⁽¹⁾	(4.9	%)	1.2	%	(6.4	%)
Leasing Concessions	(1.1	%)	0.4	%	(1.5	%)
Vacancy gain (loss)	2.2	%	0.2	%	0.9	%
Bad Debt, Net ⁽²⁾	1.9	%	1.4	%	(0.1	%)
Other ⁽³⁾	(0.6	%)	0.3	%	(0.2	%)
Same Store Residential Revenues-
current period	(2.5	%)	3.5	%	(7.3	%)

(1)		The decline in lease rates is driven by the cumulative impact of leasing activity over the past twelve months despite meaningful recent improvements.
(2)		Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts.
(3)		Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties:

	Q2 2021	Q3 2021	October 2021 (1)
Physical Occupancy ⁽²⁾	96.3%	96.7%	96.9%
Percentage of Residents Renewing by quarter/month	53.4%	58.5%	64.0%

New Lease Change	(5.4%)	10.1%	11.1%
Renewal Rate Achieved	0.2%	5.6%	9.0%
Blended Rate	(2.8%)	7.6%	9.8%

(1)		October 2021 results are preliminary.
(2)		Physical Occupancy is as of month-end June for Q2 2021, month-end September for Q3 2021 and as of October 21st for October 2021.

Investment Activity

“During the quarter, we were pleased to add high quality, well located assets to the portfolio in both our expansion markets and the suburbs of our established markets and to fund these acquisitions with the sales proceeds from older California assets. These acquisitions included re-entering both the Dallas/Ft. Worth and Austin markets,” said Mr. Parrell. “We also had a very active quarter on the development front with the announcement of our new strategic partnership with Toll Brothers to build apartment communities in several of our markets. In addition, we continue to harness our internal development capabilities to deliver high quality assets to the portfolio as we did in the third quarter with the completion of one project and the start of three new projects.”

The Company acquired eight properties, consisting of 2,108 apartment units, during the third quarter of 2021 for an aggregate purchase price of approximately $740.2 million and a weighted average Acquisition Capitalization Rate of 3.9%. The properties are located in Austin, TX (2), Dallas/Ft. Worth, TX (2), Atlanta, GA (2), suburban Seattle, WA and suburban Boston, MA. During the first nine months of 2021, the Company has acquired 11 properties, consisting of 2,921 apartment units, for an aggregate purchase price of approximately $1.02 billion and a weighted average Acquisition Capitalization Rate of 3.9%.

The Company sold five properties during the third quarter of 2021, consisting of 1,047 apartment units, for an aggregate sale price of approximately $612.3 million and a weighted average Disposition Yield of 3.9%, generating an Unlevered IRR of 9.5%. Three of the properties are located in suburban San Francisco, CA and two in Los Angeles, CA. During the first nine months of 2021, the Company sold ten properties, consisting of 1,842 apartment units, for an aggregate sale price of approximately $1.02 billion and a weighted average Disposition Yield of 3.8%, generating an Unlevered IRR of 9.2%.

In August 2021, the Company announced a strategic partnership with Toll Brothers, Inc. to develop apartment communities in key Equity Residential markets. The Company expects that the first developments under this partnership will commence construction sometime over the next few months. In addition to this partnership, during the third quarter of 2021, the Company acquired a land parcel located in Denver, CO and another in suburban New York, NY, in unconsolidated joint ventures for an aggregate gross purchase price of approximately $55.4 million and commenced construction on both projects. The Company’s total investment in these two separate joint ventures is approximately $24.9 million as of September 30, 2021. The Company also commenced construction on an additional joint venture apartment property in Washington, D.C., and completed the development of The Edge, a 154 apartment unit property in Bethesda, MD.

Capital Markets Activity

On August 9, 2021, the Company closed on its second ever green bond offering with the issuance of $500.0 million at its lowest ever coupon rate for 10-year unsecured notes of 1.85% and an all-in effective yield of 2.0%. Net proceeds from this issuance will be allocated to investments in green buildings and/or renewable energy, energy efficiency and sustainable water management projects.

During the third quarter of 2021, the Company entered into forward equity sales agreements under its At-The-Market (ATM) share offering program for approximately 1.7 million common shares at an initial weighted average forward price per share of $83.25, which is subject to certain adjustments at settlement. The common shares sold under the forward equity sales agreements must settle by the end of the first quarter in 2023.

Fourth Quarter 2021 Guidance

The Company has established guidance ranges for the fourth quarter of 2021 EPS, FFO per share and Normalized FFO per share as listed below:

The difference between the third quarter 2021 actual EPS of $1.15 and the fourth quarter of 2021 EPS guidance midpoint of $1.03 is due primarily to lower expected property sale gains, partially offset by higher expected same store NOI.

The difference between the third quarter 2021 actual FFO of $0.76 per share and the fourth quarter of 2021 FFO guidance midpoint of $0.78 per share is due primarily to higher expected same store NOI.

The difference between the third quarter 2021 actual Normalized FFO of $0.77 per share and the fourth quarter of 2021 Normalized FFO guidance midpoint of $0.79 per share is due primarily to higher expected same store NOI.

Full Year 2021 Guidance

The Company has revised its guidance for its full year 2021 same store operating performance as well as EPS, FFO per share and Normalized FFO per share as listed below:

	Revised	Previous
Same Store (includes Residential and Non-Residential):
Physical Occupancy	96.0%	95.3% to 96.3%
Revenue change	(3.7%)	(5.0%) to (4.0%)
Expense change	3.25%	2.75% to 3.25%
NOI change	(7.0%)	(8.5%) to (7.5%)

EPS	$3.16 to $3.18	$3.03 to $3.13
FFO per share	$2.98 to $3.00	$2.89 to $2.99
Normalized FFO per share	$2.95 to $2.97	$2.85 to $2.95

The change in the full year 2021 EPS guidance range is due primarily to higher expected property sale gains and same store NOI, partially offset by higher expected depreciation expense.

The change in the full year 2021 FFO per share guidance range is due primarily to higher expected same store NOI.

The change in the full year 2021 Normalized FFO per share guidance range is due primarily to higher expected same store NOI.

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract high quality long-term renters. As of October 25, 2021, Equity Residential owns or has investments in 307 properties consisting of 79,322 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and government regulation. In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration and severity of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy and the corresponding impact on our residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses, the rollout and effectiveness of vaccines and the impact of operational changes we have implemented and may implement in response to the pandemic. Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Wednesday, October 27, 2021 at 12:00 p.m. CT. In connection with the conference call, the Company is also providing a Management Presentation on its website. Please visit the Investor section of the Company’s website at www.equityapartments.com for the web cast link and the presentation.


Equity Residential Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
REVENUES
Rental income	$	1,818,867		$	1,958,270		$	623,206		$	622,433

EXPENSES
Property and maintenance		341,261			333,333			116,461			113,065
Real estate taxes and insurance		297,780			288,043			96,909			95,273
Property management		74,357			71,513			23,772			20,196
General and administrative		43,102			37,212			13,041			10,859
Depreciation		616,032			619,003			215,397			200,605
Total expenses		1,372,532			1,349,104			465,580			439,998

Net gain (loss) on sales of real estate properties		587,623			352,218			363,928			(25	)

Operating income		1,033,958			961,384			521,554			182,410

Interest and other income		25,293			4,006			973			535
Other expenses		(10,908	)		(8,324	)		(3,456	)		(4,097	)
Interest:
Expense incurred, net		(202,733	)		(248,349	)		(68,251	)		(80,874	)
Amortization of deferred financing costs		(6,172	)		(6,253	)		(2,048	)		(2,101	)
Income before income and other taxes, income (loss) from
investments in unconsolidated entities and net gain (loss)
on sales of land parcels		839,438			702,464			448,772			95,873
Income and other tax (expense) benefit		(679	)		(502	)		(284	)		(262	)
Income (loss) from investments in unconsolidated entities		(3,028	)		(2,445	)		(1,156	)		(246	)
Net gain (loss) on sales of land parcels		5			—			—			—
Net income		835,736			699,517			447,332			95,365
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(27,903	)		(24,624	)		(14,847	)		(3,376	)
Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Net income attributable to controlling interests		805,876			660,780			431,951			91,286
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
Net income available to Common Shares	$	803,558		$	658,462		$	431,178		$	90,513

Earnings per share – basic:
Net income available to Common Shares	$	2.15		$	1.77		$	1.15		$	0.24
Weighted average Common Shares outstanding		373,474			371,749			374,308			371,869

Earnings per share – diluted:
Net income available to Common Shares	$	2.14		$	1.77		$	1.15		$	0.24
Weighted average Common Shares outstanding		387,642			385,973			388,374			385,652

Distributions declared per Common Share outstanding	$	1.8075		$	1.8075		$	0.6025		$	0.6025

Equity Residential Consolidated Statements of Funds From Operations and Normalized Funds From Operations (Amounts in thousands except per share data) (Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
Net income	$	835,736		$	699,517		$	447,332		$	95,365
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
Net income available to Common Shares and Units		831,461			683,086			446,025			93,889

Adjustments:
Depreciation		616,032			619,003			215,397			200,605
Depreciation – Non-real estate additions		(3,228	)		(3,433	)		(1,052	)		(1,126	)
Depreciation – Partially Owned Properties		(2,676	)		(2,514	)		(994	)		(828	)
Depreciation – Unconsolidated Properties		1,867			1,838			634			614
Net (gain) loss on sales of unconsolidated entities - operating
assets		(4	)		(1,000	)		—			(1,000	)
Net (gain) loss on sales of real estate properties		(587,623	)		(352,218	)		(363,928	)		25
Noncontrolling Interests share of gain (loss) on sales
of real estate properties		—			11,655			—			—
FFO available to Common Shares and Units		855,829			956,417			296,082			292,179

Adjustments (see note for additional detail):
Impairment – non-operating assets		—			—			—			—
Write-off of pursuit costs		3,557			4,864			910			1,586
Debt extinguishment and preferred share redemption (gains)
losses		264			37			—			5
Non-operating asset (gains) losses		(23,014	)		1,022			294			352
Other miscellaneous items		4,520			(514	)		1,179			1,796
Normalized FFO available to Common Shares and Units	$	841,156		$	961,826		$	298,465		$	295,918

FFO	$	858,147		$	958,735		$	296,855		$	292,952
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
FFO available to Common Shares and Units	$	855,829		$	956,417		$	296,082		$	292,179
FFO per share and Unit – basic	$	2.22		$	2.49		$	0.77		$	0.76
FFO per share and Unit – diluted	$	2.21		$	2.48		$	0.76		$	0.76

Normalized FFO	$	843,474		$	964,144		$	299,238		$	296,691
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
Normalized FFO available to Common Shares and Units	$	841,156		$	961,826		$	298,465		$	295,918
Normalized FFO per share and Unit – basic	$	2.18		$	2.50		$	0.77		$	0.77
Normalized FFO per share and Unit – diluted	$	2.17		$	2.49		$	0.77		$	0.77

Weighted average Common Shares and Units outstanding – basic		385,841			384,759			386,327			384,871
Weighted average Common Shares and Units outstanding – diluted		387,642			385,973			388,374			385,652

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

Equity Residential Consolidated Balance Sheets (Amounts in thousands except for share amounts) (Unaudited)

	September 30,			December 31,
	2021			2020
ASSETS
Land	$	5,779,686		$	5,785,367
Depreciable property		21,840,344			20,920,654
Projects under development		163,659			411,134
Land held for development		82,026			86,170
Investment in real estate		27,865,715			27,203,325
Accumulated depreciation		(8,260,846	)		(7,859,657	)
Investment in real estate, net		19,604,869			19,343,668
Investments in unconsolidated entities		79,429			52,782
Cash and cash equivalents		39,707			42,591
Restricted deposits		187,042			57,137
Right-of-use assets		477,693			499,287
Other assets		274,275			291,426
Total assets	$	20,663,015		$	20,286,891

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,281,165		$	2,293,890
Notes, net		5,833,483			5,335,536
Line of credit and commercial paper		30,000			414,830
Accounts payable and accrued expenses		166,522			107,366
Accrued interest payable		56,777			65,896
Lease liabilities		313,361			329,130
Other liabilities		350,201			345,064
Security deposits		64,617			60,480
Distributions payable		233,306			232,262
Total liabilities		9,329,432			9,184,454

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		459,933			338,951
Equity:
Shareholders’ equity:
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized; 745,600 shares issued and
outstanding as of September 30, 2021 and December 31, 2020		37,280			37,280
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 375,002,588 shares issued
and outstanding as of September 30, 2021 and 372,302,000
shares issued and outstanding as of December 31, 2020		3,750			3,723
Paid in capital		9,131,078			9,128,599
Retained earnings		1,527,115			1,399,715
Accumulated other comprehensive income (loss)		(36,666	)		(43,666	)
Total shareholders’ equity		10,662,557			10,525,651
Noncontrolling Interests:
Operating Partnership		208,955			233,162
Partially Owned Properties		2,138			4,673
Total Noncontrolling Interests		211,093			237,835
Total equity		10,873,650			10,763,486
Total liabilities and equity	$	20,663,015		$	20,286,891

Equity Residential

Portfolio Summary

As of September 30, 2021

					% of Stabilized			Average
			Apartment		Budgeted			Rental
Markets/Metro Areas	Properties		Units		NOI			Rate

Established Markets:
Los Angeles		67		15,739		20.0	%	$	2,526
Orange County		13		4,028		5.4	%		2,383
San Diego		11		2,706		3.8	%		2,554
Subtotal – Southern California		91		22,473		29.2	%		2,504

Washington DC		49		15,098		17.6	%		2,345
San Francisco		46		12,314		17.6	%		2,908
Seattle		46		9,525		11.5	%		2,253
New York		36		9,343		11.0	%		3,482
Boston		26		6,700		9.8	%		2,867

Expansion Markets:
Denver		6		1,904		1.9	%		2,077
Atlanta		3		985		0.9	%		1,979
Dallas/Ft. Worth		2		489		0.3	%		1,931
Austin		2		491		0.2	%		1,406

Total		307		79,322		100.0	%	$	2,625

	Properties	Apartment Units

Wholly Owned Properties	290	75,548
Master-Leased Properties – Consolidated (1)	—	—
Partially Owned Properties – Consolidated	17	3,774

	307	79,322

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

(1)

Effective July 31, 2021, the Company took over management of its last remaining third-party master-leased property containing 162 apartment units located in Arlington, VA and the property is now included in the Wholly Owned Properties count.

Equity Residential

Portfolio Rollforward Q3 2021 ($ in thousands)

		Properties			Apartment Units			Purchase Price			Acquisition Cap Rate

	6/30/2021		303			78,107

Acquisitions:
Consolidated Rental Properties			6			1,595		$	499,725			3.9	%
Consolidated Rental Properties – Not Stabilized (A)			2			513		$	240,500			4.1	%
Unconsolidated Land Parcels (B)			—			—		$	55,409

								Sales Price			Disposition Yield

Dispositions:
Consolidated Rental Properties			(5	)		(1,047	)	$	(612,300	)		(3.9	%)

Completed Developments – Consolidated			1			154

	9/30/2021		307			79,322

Portfolio Rollforward 2021 ($ in thousands)

		Properties			Apartment Units			Purchase Price			Acquisition Cap Rate

12/31/2020			304			77,889

Acquisitions:
Consolidated Rental Properties			8			2,128		$	684,725			3.9	%
Consolidated Rental Properties – Not Stabilized (A)			3			793		$	335,700			4.1	%
Unconsolidated Land Parcels (B)			—			—		$	55,409

								Sales Price			Disposition Yield

Dispositions:
Consolidated Rental Properties			(10	)		(1,842	)	$	(1,021,800	)		(3.8	%)

Completed Developments – Consolidated			2			354

	9/30/2021		307			79,322

(A)		The Company acquired three properties during the nine months ended September 30, 2021, including a property in each of the Atlanta and Seattle markets in the third quarter of 2021, that are in lease-up and are expected to stabilize in their second year of ownership at the combined Acquisition Cap Rates listed above.
(B)		The Company entered into separate unconsolidated joint ventures for the purpose of developing vacant land parcels in Denver, CO and suburban New York, NY. The purchase price listed represents the total consideration for the closing of the respective joint ventures. The Company’s total investment in these two joint ventures is approximately $24.9 million as of September 30, 2021. See Development and Lease-Up Projects for additional detail.

Equity Residential

Third Quarter 2021 vs. Third Quarter 2020 Same Store Results/Statistics Including 75,509 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

Third Quarter 2021													Third Quarter 2020
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	579,336		(1)	(2.5%)	$	22,516	(2)	268.3%	$	601,852	0.3%	Revenues	$	594,138		$	6,114	$	600,252
Expenses	$	200,652			2.1%	$	5,931		5.0%	$	206,583	2.2%	Expenses	$	196,514		$	5,650	$	202,164
NOI	$	378,684			(4.8%)	$	16,585		3,474.4%	$	395,269	(0.7%)	NOI	$	397,624		$	464	$	398,088

Average Rental Rate	$	2,649			(4.4%)								Average Rental Rate	$	2,770
Physical Occupancy		96.6	%		1.9%								Physical Occupancy		94.7	%
Turnover		13.7	%		(4.2%)								Turnover		17.9	%

Third Quarter 2021 vs. Second Quarter 2021 Same Store Results/Statistics Including 75,884 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

Third Quarter 2021													Second Quarter 2021
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	581,352		(1)	3.5%	$	22,548	(2)	6.8%	$	603,900	3.7%	Revenues	$	561,446		$	21,122	$	582,568
Expenses	$	201,243			4.0%	$	5,932		(2.3%)	$	207,175	3.8%	Expenses	$	193,565		$	6,071	$	199,636
NOI	$	380,109			3.3%	$	16,616		10.4%	$	396,725	3.6%	NOI	$	367,881		$	15,051	$	382,932

Average Rental Rate	$	2,645			3.0%								Average Rental Rate	$	2,568
Physical Occupancy		96.6	%		0.5%								Physical Occupancy		96.1	%
Turnover		13.7	%		2.3%								Turnover		11.4	%

September YTD 2021 vs. September YTD 2020 Same Store Results/Statistics Including 75,288 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

September YTD 2021													September YTD 2020
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	1,692,955		(1)	(7.3%)	$	65,221	(2)	48.7%	$	1,758,176	(6.0%)	Revenues	$	1,826,344		$	43,855	$	1,870,199
Expenses	$	594,688			3.1%	$	18,017		8.4%	$	612,705	3.2%	Expenses	$	576,884		$	16,618	$	593,502
NOI	$	1,098,267			(12.1%)	$	47,204		73.3%	$	1,145,471	(10.3%)	NOI	$	1,249,460		$	27,237	$	1,276,697

Average Rental Rate	$	2,607			(7.8%)								Average Rental Rate	$	2,829
Physical Occupancy		95.9	%		0.6%								Physical Occupancy		95.3	%
Turnover		35.0	%		(4.4%)								Turnover		39.4	%

(1)		See page 12 for Same Store Residential Revenues with Leasing Concessions reflected on a cash basis. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

(2)		Changes in same store Non-Residential revenues for the periods presented are driven by the following:
		Third Quarter 2021 vs. Third Quarter 2020 – Primarily impacted by the write-off of Non-Residential straight-line lease receivables in the third quarter of 2020 and lower bad debt in the third quarter of 2021. Third Quarter 2021 vs. Second Quarter 2021 – Primarily lower bad debt in the third quarter of 2021. September YTD 2021 vs. September YTD 2020 – Primarily impacted by the write-off of Non-Residential straight-line lease receivables in the third quarter of 2020 and lower bad debt in 2021.

Equity Residential

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

	Third Quarter 2021 vs. Third Quarter 2020						Third Quarter 2021 vs. Second Quarter 2021						Sept. YTD 2021 vs. Sept. YTD 2020
	75,509 Same Store Apartment Units						75,884 Same Store Apartment Units						75,288 Same Store Apartment Units
	Q3 2021			Q3 2020			Q3 2021			Q2 2021			Sept. YTD 2021			Sept. YTD 2020
Same Store Residential Revenues (GAAP Basis)	$	579,336		$	594,138		$	581,352		$	561,446		$	1,692,955		$	1,826,344
Leasing Concessions amortized		10,896			4,255			10,979			13,166			35,463			6,864
Leasing Concessions granted (2)		(2,164	)		(12,020	)		(2,193	)		(8,298	)		(27,312	)		(16,547	)
Same Store Residential Revenues with Leasing
Concessions on a cash basis	$	588,068		$	586,373		$	590,138		$	566,314		$	1,701,106		$	1,816,661

% change - GAAP revenue		(2.5	%)					3.5	%					(7.3	%)

% change - cash revenue		0.3	%					4.2	%					(6.4	%)

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.
(2)		Monthly Residential Leasing Concessions granted continue to decline. Residential Leasing Concessions granted in September and October (preliminary) 2021 are $0.2 million and less than $50,000, respectively, which are down from their peak of $6.1 million per month in February 2021 and have returned to pre-pandemic levels.

Same Store Resident/Tenant Accounts Receivable Balances Including 75,288 Same Store Apartment Units $ in thousands

	Residential							Non-Residential
Balance Sheet (Other assets):	September 30, 2021				June 30, 2021			September 30, 2021			June 30, 2021
Resident/tenant accounts receivable balances	$	42,770			$	43,286		$	4,064		$	6,035
Allowance for doubtful accounts		(37,295	)			(38,376	)		(3,442	)		(5,232	)
Net receivable balances	$	5,475		(1)	$	4,910		$	622		$	803

Straight-line receivable balances	$	11,488		(2)	$	20,186		$	12,698		$	12,777

(1)		The Company held same store Residential security deposits approximating 46.1% of the net receivable balance at September 30, 2021.
(2)		Total same store Residential Leasing Concessions granted in the third quarter of 2021 were approximately $2.2 million. The straight-line receivable balance of $11.5 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues for the remainder of 2021 and the first three quarters of 2022.

Same Store Residential Bad Debt

Including 75,288 Same Store Apartment Units

$ in thousands

Income Statement (Rental income):	Q3 2021			Q2 2021			Q3 2020
Bad Debt, Net (1)	$	4,122		$	12,177		$	15,608
% of Same Store Residential Revenues		0.7	%		2.2	%		2.6	%

(1)

Bad Debt, Net in Q3 2021 benefited from additional resident payments due to governmental rental assistance programs.

Equity Residential

Third Quarter 2021 vs. Third Quarter 2020

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas	Apartment Units		Q3 2021 % of Actual NOI			Q3 2021 Average Rental Rate		Q3 2021 Weighted Average Physical Occupancy %			Q3 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		15,739		21.0	%	$	2,526		97.3	%		11.7	%		4.1	%			0.3	%		5.9	%		2.7	%		1.3	%		(3.5	%)
Orange County		4,028		5.7	%		2,383		98.1	%		11.0	%		7.7	%			0.4	%		10.1	%		6.2	%		1.3	%		(4.9	%)
San Diego		2,706		4.1	%		2,554		97.8	%		14.0	%		8.8	%			1.8	%		11.2	%		8.0	%		0.7	%		(2.0	%)
Subtotal – Southern California		22,473		30.8	%		2,504		97.5	%		11.8	%		5.3	%			0.5	%		7.4	%		3.9	%		1.2	%		(3.6	%)

San Francisco		12,114		18.3	%		2,898		95.4	%		14.1	%		(9.0	%)			1.9	%		(13.2	%)		(10.0	%)		1.0	%		(4.8	%)
Washington DC		14,569		17.1	%		2,335		96.6	%		14.8	%		(3.6	%)			4.6	%		(7.4	%)		(4.6	%)		1.0	%		(2.8	%)
New York		9,343		12.3	%		3,482		96.8	%		12.2	%		(4.0	%)			0.6	%		(8.3	%)		(9.6	%)		5.7	%		(8.3	%)
Seattle		8,956		10.3	%		2,261		96.2	%		14.3	%		(5.9	%)			6.1	%		(10.8	%)		(7.4	%)		1.6	%		(3.2	%)
Boston		6,430		9.4	%		2,881		95.8	%		17.0	%		(4.1	%)			2.3	%		(7.0	%)		(6.4	%)		2.3	%		(3.7	%)
Denver		1,624		1.8	%		2,091		96.9	%		18.4	%		4.5	%			1.8	%		5.7	%		2.5	%		1.8	%		(4.3	%)

Total		75,509		100.0	%	$	2,649		96.6	%		13.7	%		(2.5	%)	(1)		2.1	%		(4.8	%)		(4.4	%)		1.9	%		(4.2	%)

(1)		With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 0.3% in the third quarter of 2021 compared to the third quarter of 2020. See page 12 for additional detail and reconciliations.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the nine months ended September 30, 2021.

Equity Residential

Third Quarter 2021 vs. Second Quarter 2021

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Quarter
Markets/Metro Areas	Apartment Units		Q3 2021 % of Actual NOI			Q3 2021 Average Rental Rate		Q3 2021 Weighted Average Physical Occupancy %			Q3 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		15,739		20.9	%	$	2,526		97.3	%		11.7	%		6.6	%			2.8	%		8.4	%		5.7	%		0.8	%		1.2	%
Orange County		4,028		5.7	%		2,383		98.1	%		11.0	%		6.0	%			5.9	%		6.0	%		5.7	%		0.2	%		2.7	%
San Diego		2,706		4.1	%		2,554		97.8	%		14.0	%		5.7	%			4.2	%		6.2	%		6.1	%		(0.4	%)		3.9	%
Subtotal – Southern California		22,473		30.7	%		2,504		97.5	%		11.8	%		6.4	%			3.3	%		7.7	%		5.7	%		0.6	%		1.7	%

San Francisco		12,114		18.2	%		2,898		95.4	%		14.1	%		2.7	%			3.4	%		2.4	%		2.6	%		0.1	%		2.7	%
Washington DC		14,569		17.0	%		2,335		96.6	%		14.8	%		1.2	%			8.8	%		(2.4	%)		0.8	%		0.3	%		2.8	%
New York		9,343		12.2	%		3,482		96.8	%		12.2	%		4.0	%			0.6	%		7.7	%		2.3	%		1.6	%		2.1	%
Seattle		9,331		10.7	%		2,246		96.1	%		14.4	%		2.3	%			3.9	%		1.5	%		1.8	%		0.5	%		0.7	%
Boston		6,430		9.4	%		2,881		95.8	%		17.0	%		1.7	%			6.4	%		(0.4	%)		1.9	%		(0.2	%)		5.2	%
Denver		1,624		1.8	%		2,091		96.9	%		18.4	%		3.8	%			11.1	%		0.9	%		3.8	%		(0.1	%)		3.1	%

Total		75,884		100.0	%	$	2,645		96.6	%		13.7	%		3.5	%	(1)		4.0	%		3.3	%		3.0	%		0.5	%		2.3	%

(1)		With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 4.2% in the third quarter of 2021 compared to the second quarter of 2021. See page 12 for additional detail and reconciliations.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the nine months ended September 30, 2021.

Equity Residential

September YTD 2021 vs. September YTD 2020

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year
Markets/Metro Areas	Apartment Units		Sept. YTD 21 % of Actual NOI			Sept. YTD 21 Average Rental Rate		Sept. YTD 21 Weighted Average Physical Occupancy %			Sept. YTD 21 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		15,739		20.4	%	$	2,439		96.5	%		32.2	%		(3.2	%)			1.3	%		(5.2	%)		(4.1	%)		0.9	%		(6.1	%)
Orange County		4,028		5.6	%		2,281		97.7	%		27.2	%		1.9	%			2.1	%		1.8	%		0.9	%		1.1	%		(7.5	%)
San Diego		2,706		4.1	%		2,446		97.7	%		34.5	%		3.9	%			1.7	%		4.7	%		3.0	%		0.9	%		(3.1	%)
Subtotal – Southern California		22,473		30.1	%		2,411		96.9	%		31.6	%		(1.5	%)			1.5	%		(2.7	%)		(2.5	%)		1.0	%		(5.9	%)

San Francisco		12,114		18.6	%		2,877		94.8	%		37.0	%		(13.5	%)			3.4	%		(19.4	%)		(13.0	%)		(0.5	%)		(3.4	%)
Washington DC		14,569		17.8	%		2,326		96.3	%		36.4	%		(4.6	%)			3.9	%		(8.4	%)		(5.2	%)		0.6	%		(1.1	%)
New York		9,343		11.7	%		3,463		94.4	%		30.6	%		(11.6	%)			2.9	%		(23.8	%)		(12.1	%)		0.5	%		(8.8	%)
Seattle		8,819		10.5	%		2,251		95.8	%		39.1	%		(8.8	%)			4.9	%		(14.3	%)		(9.0	%)		0.2	%		(1.3	%)
Boston		6,346		9.5	%		2,853		95.7	%		37.5	%		(7.9	%)			4.0	%		(12.8	%)		(9.3	%)		1.4	%		(5.8	%)
Denver		1,624		1.8	%		2,031		96.7	%		45.9	%		1.1	%			4.1	%		(0.2	%)		(0.8	%)		1.8	%		(8.2	%)

Total		75,288		100.0	%	$	2,607		95.9	%		35.0	%		(7.3	%)	(1)		3.1	%		(12.1	%)		(7.8	%)		0.6	%		(4.4	%)

(1)		With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues decreased 6.4% in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. See page 12 for additional detail and reconciliations.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the nine months ended September 30, 2021.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics

For 75,288 Same Store Apartment Units

	New Lease Change (1)						Renewal Rate Achieved (1)						Blended Rate (1)
Markets/Metro Areas	Q3 2021			Q2 2021			Q3 2021			Q2 2021			Q3 2021			Q2 2021

Southern California		13.5	%		2.0	%		6.1	%		3.6	%		9.1	%		2.9	%
San Francisco		3.1	%		(9.9	%)		5.6	%		(3.7	%)		4.4	%		(7.3	%)
Washington DC		3.9	%		(7.0	%)		2.1	%		(0.1	%)		3.0	%		(3.8	%)
New York		13.8	%		(12.9	%)		8.0	%		(2.1	%)		10.4	%		(7.8	%)
Seattle		15.6	%		(4.3	%)		4.3	%		(1.3	%)		8.9	%		(2.8	%)
Boston		13.3	%		(1.5	%)		6.4	%		0.7	%		9.7	%		(0.3	%)
Denver		16.1	%		3.9	%		8.0	%		6.6	%		12.0	%		5.1	%

Total		10.1	%		(5.4	%)		5.6	%		0.2	%		7.6	%		(2.8	%)

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions. See page 3 for October 2021 preliminary data.

Equity Residential

Third Quarter 2021 vs. Third Quarter 2020 Total Same Store Operating Expenses Including 75,509 Same Store Apartment Units $ in thousands

	Q3 2021		Q3 2020		$ Change (1)			% Change			% of Q3 2021 Operating Expenses

Real estate taxes	$	87,472	$	86,600	$	872			1.0	%		42.4	%
On-site payroll		42,175		42,455		(280	)		(0.7	%)		20.4	%
Utilities		29,475		27,285		2,190			8.0	%		14.3	%
Repairs and maintenance		26,903		26,477		426			1.6	%		13.0	%
Insurance		6,782		6,149		633			10.3	%		3.3	%
Leasing and advertising		2,556		3,011		(455	)		(15.1	%)		1.2	%
Other on-site operating expenses		11,220		10,187		1,033			10.1	%		5.4	%
Total Same Store Operating Expenses (2)
(includes Residential and Non-Residential)	$	206,583	$	202,164	$	4,419			2.2	%		100.0	%

September YTD 2021 vs. September YTD 2020 Total Same Store Operating Expenses Including 75,288 Same Store Apartment Units $ in thousands

	YTD 2021		YTD 2020		$ Change (1)			% Change			% of YTD 2021 Operating Expenses

Real estate taxes	$	263,521	$	259,603	$	3,918			1.5	%		43.0	%
On-site payroll		123,966		124,652		(686	)		(0.6	%)		20.3	%
Utilities		85,290		78,408		6,882			8.8	%		13.9	%
Repairs and maintenance		77,320		71,359		5,961			8.4	%		12.6	%
Insurance		20,254		18,403		1,851			10.1	%		3.3	%
Leasing and advertising		8,028		7,409		619			8.4	%		1.3	%
Other on-site operating expenses		34,326		33,668		658			2.0	%		5.6	%
Total Same Store Operating Expenses (2)
(includes Residential and Non-Residential)	$	612,705	$	593,502	$	19,203			3.2	%		100.0	%

(1)		The quarter-over-quarter and year-over-year changes were primarily driven by the following factors:

		Real estate taxes – Increase is lower than expected due to lower rates and assessed values.

		On-site payroll – Improved sales and service staff utilization from various technology initiatives and higher than usual staffing vacancies during the current periods.

		Utilities – Water, sewer and trash charges (approximately 65% of total) increased due to both usage and rate. Natural gas and electric charges (approximately 35% of total) increased due to higher commodity prices.

		Repairs and maintenance – Year-over-year increase primarily driven by low comparable period expense growth due to the pandemic and increases in minimum wage on contract services and maintenance repairs (including higher turnover expense from robust leasing activity) in 2021.

		Insurance – Increase due to higher premiums on property insurance renewal due to challenging conditions in the insurance market.

		Leasing and advertising – Year-over-year increase primarily driven by increased digital advertising.

		Other on-site operating expenses – Increase driven by higher ground lease-related expenses.

(2)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of September 30, 2021 ($ in thousands)

	Debt Balances (1)		% of Total			Weighted Average Rates (1)			Weighted Average Maturities (years)

Secured	$	2,281,165		28.0	%		3.16	%		5.6
Unsecured		5,863,483		72.0	%		3.38	%		10.2

Total	$	8,144,648		100.0	%		3.32	%		8.9

Q4 2021

Guidance

$1.02 to $1.04

FFO per share

$0.77 to $0.79

Normalized FFO per share

$0.78 to $0.80