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Equity Residential Reports Third Quarter 2021 Results

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:

 

 

Q4 2021

Guidance

EPS

 

$1.02 to $1.04

FFO per share

 

$0.77 to $0.79

Normalized FFO per share

 

$0.78 to $0.80

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

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,897,650

 

 

 

23.3

%

 

 

3.67

%

 

 

4.2

 

Unsecured – Public

 

 

5,833,483

 

 

 

71.6

%

 

 

3.69

%

 

 

10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Rate Debt

 

 

7,731,133

 

 

 

94.9

%

 

 

3.69

%

 

 

8.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

 

52,573

 

 

 

0.6

%

 

 

2.36

%

 

 

0.7

 

Secured – Tax Exempt

 

 

330,942

 

 

 

4.1

%

 

 

0.46

%

 

 

14.9

 

Unsecured – Revolving Credit Facility

 

 

 

 

 

 

 

 

 

 

 

3.1

 

Unsecured – Commercial Paper Program (2)

 

 

30,000

 

 

 

0.4

%

 

 

0.28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating Rate Debt

 

 

413,515

 

 

 

5.1

%

 

 

0.44

%

 

 

12.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,144,648

 

 

 

100.0

%

 

 

3.32

%

 

 

8.9

 

(1)

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

(2)

At September 30, 2021, the weighted average maturity of commercial paper outstanding was 1 day. The weighted average amount outstanding for the nine months ended September 30, 2021 was approximately $556.7 million.

 

Note: The Company capitalized interest of approximately $12.4 million and $6.9 million during the nine months ended September 30, 2021 and 2020, respectively. The Company capitalized interest of approximately $4.2 million and $2.8 million during the quarters ended September 30, 2021 and 2020, respectively.

Equity Residential

Debt Maturity Schedule as of September 30, 2021

($ in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

Fixed

Rate

 

 

Floating

Rate

 

 

Total

 

 

% of Total

 

 

Weighted

Average Coupons

on Fixed

Rate Debt (1)

 

 

Weighted

Average

Coupons on

Total Debt (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

$

1,895

 

 

$

30,000

 

(2)

$

31,895

 

 

 

0.4

%

 

 

3.27

%

 

 

0.34

%

2022

 

 

264,185

 

 

 

54,653

 

 

 

318,838

 

 

 

3.9

%

 

 

3.25

%

 

 

3.10

%

2023

 

 

1,325,588

 

 

 

3,500

 

 

 

1,329,088

 

 

 

16.1

%

 

 

3.74

%

 

 

3.73

%

2024

 

 

 

 

 

6,100

 

 

 

6,100

 

 

 

0.1

%

 

N/A

 

 

 

0.07

%

2025

 

 

450,000

 

 

 

8,200

 

 

 

458,200

 

 

 

5.6

%

 

 

3.38

%

 

 

3.32

%

2026

 

 

592,025

 

 

 

9,000

 

 

 

601,025

 

 

 

7.3

%

 

 

3.58

%

 

 

3.53

%

2027

 

 

400,000

 

 

 

9,800

 

 

 

409,800

 

 

 

5.0

%

 

 

3.25

%

 

 

3.17

%

2028

 

 

900,000

 

 

 

10,700

 

 

 

910,700

 

 

 

11.1

%

 

 

3.79

%

 

 

3.75

%

2029

 

 

888,120

 

 

 

11,500

 

 

 

899,620

 

 

 

10.9

%

 

 

3.30

%

 

 

3.26

%

2030

 

 

1,095,000

 

 

 

12,600

 

 

 

1,107,600

 

 

 

13.4

%

 

 

2.55

%

 

 

2.52

%

2031+

 

 

1,879,350

 

 

 

275,535

 

 

 

2,154,885

 

 

 

26.2

%

 

 

3.70

%

 

 

3.24

%

Subtotal

 

 

7,796,163

 

 

 

431,588

 

 

 

8,227,751

 

 

 

100.0

%

 

 

3.44

%

 

 

3.28

%

Deferred Financing Costs and Unamortized (Discount)

 

 

(65,030

)

 

 

(18,073

)

 

 

(83,103

)

 

N/A

 

 

N/A

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

7,731,133

 

 

$

413,515

 

 

$

8,144,648

 

 

 

100.0

%

 

 

3.44

%

 

 

3.28

%

(1)

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

(2)

Represents principal outstanding on the Company’s commercial paper program.

Equity Residential

Selected Unsecured Public Debt Covenants

 

 

 

September 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

Debt to Adjusted Total Assets (not to exceed 60%)

 

30.0%

 

 

30.7%

 

 

 

 

 

 

 

 

Secured Debt to Adjusted Total Assets (not to exceed 40%)

 

9.2%

 

 

9.3%

 

 

 

 

 

 

 

 

Consolidated Income Available for Debt Service to

 

 

 

 

Maximum Annual Service Charges

 

 

 

 

(must be at least 1.5 to 1)

 

4.93

 

 

5.10

 

 

 

 

 

 

 

 

Total Unencumbered Assets to Unsecured Debt

 

 

 

 

(must be at least 125%)

 

453.9%

 

 

442.1%

 

Note: These selected covenants represent the most restrictive financial covenants relating to ERP Operating Limited Partnership's ("ERPOP") outstanding public debt securities. Equity Residential is the general partner of ERPOP.
 

Selected Credit Ratios

 

 

 

September 30,

 

 

June 30,

 

 

 

2021

 

 

2021

 

Total debt to Normalized EBITDAre

 

5.64x

 

 

5.67x

 

 

 

 

 

 

 

 

Net debt to Normalized EBITDAre

 

5.60x

 

 

5.63x

 

 

 

 

 

 

 

 

Unencumbered NOI as a % of total NOI

 

87.1%

 

 

87.2%

 

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of September 30, 2021

(Amounts in thousands except for share/unit and per share amounts)

 

Secured Debt

 

 

 

 

 

 

 

 

 

$

2,281,165

 

 

 

28.0

%

 

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

 

 

5,863,483

 

 

 

72.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

 

 

 

 

 

 

 

 

 

8,144,648

 

 

 

100.0

%

 

 

20.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares (includes Restricted Shares)

 

 

375,002,588

 

 

 

96.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

12,859,748

 

 

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

387,862,336

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Price at September 30, 2021

 

$

80.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31,385,820

 

 

 

99.9

%

 

 

 

 

Perpetual Preferred Equity (see below)

 

 

 

 

 

 

 

 

 

 

37,280

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

 

 

 

 

 

 

 

 

31,423,100

 

 

 

100.0

%

 

 

79.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

 

 

 

 

 

 

 

 

$

39,567,748

 

 

 

 

 

 

 

100.0

%

Perpetual Preferred Equity as of September 30, 2021

(Amounts in thousands except for share and per share amounts)

Series

 

Call Date

 

Outstanding

Shares

 

 

Liquidation

Value

 

 

Annual

Dividend

Per Share

 

 

Annual

Dividend

Amount

 

Preferred Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.29% Series K

 

12/10/26

 

 

745,600

 

 

$

37,280

 

 

$

4.145

 

 

$

3,091

 

Equity Residential

Common Share and Unit

Weighted Average Amounts Outstanding

 

 

Sept. YTD 2021

 

 

Sept. YTD 2020

 

 

Q3 2021

 

 

Q3 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Amounts Outstanding for Net Income Purposes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares - basic

 

 

373,473,847

 

 

 

371,749,243

 

 

 

374,307,789

 

 

 

371,869,274

 

Shares issuable from assumed conversion/vesting of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- OP Units

 

 

12,367,392

 

 

 

13,009,281

 

 

 

12,018,963

 

 

 

13,001,245

 

- long-term compensation shares/units

 

 

1,801,057

 

 

 

1,214,047

 

 

 

2,046,947

 

 

 

781,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Shares and Units - diluted

 

 

387,642,296

 

 

 

385,972,571

 

 

 

388,373,699

 

 

 

385,651,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares - basic

 

 

373,473,847

 

 

 

371,749,243

 

 

 

374,307,789

 

 

 

371,869,274

 

OP Units - basic

 

 

12,367,392

 

 

 

13,009,281

 

 

 

12,018,963

 

 

 

13,001,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Shares and OP Units - basic

 

 

385,841,239

 

 

 

384,758,524

 

 

 

386,326,752

 

 

 

384,870,519

 

Shares issuable from assumed conversion/vesting of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- long-term compensation shares/units

 

 

1,801,057

 

 

 

1,214,047

 

 

 

2,046,947

 

 

 

781,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Shares and Units - diluted

 

 

387,642,296

 

 

 

385,972,571

 

 

 

388,373,699

 

 

 

385,651,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Ending Amounts Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares (includes Restricted Shares)

 

 

375,002,588

 

 

 

372,239,249

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

12,859,748

 

 

 

13,879,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

387,862,336

 

 

 

386,118,649

 

 

 

 

 

 

 

 

 

Equity Residential

Development and Lease-Up Projects as of September 30, 2021

(Amounts in thousands except for project and apartment unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated/Actual

 

 

Projects

 

Location

 

Ownership

Percentage

 

 

No. of

Apartment

Units

 

 

Total

Budgeted

Capital

Cost

 

 

Total

Book

Value

to Date

 

 

Total

Debt (A)

 

 

Percentage

Completed

 

 

Start

Date

 

Initial

Occupancy

 

Completion

Date

 

Stabilization

Date

 

Percentage

Leased /

Occupied

CONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alcott Apartments (fka West End Tower)

 

Boston, MA

 

100%

 

 

470

 

 

$

409,749

 

 

$

382,754

 

 

$

 

 

95%

 

 

Q2 2018

 

Q3 2021

 

Q4 2021

 

Q1 2023

 

30% / 18%

9th and W

 

Washington, DC

 

92%

 

 

312

 

 

 

108,027

 

 

 

14,857

 

 

 

 

 

6%

 

 

Q3 2021

 

Q2 2023

 

Q3 2023

 

Q3 2024

 

– / –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development - Consolidated

 

 

 

 

 

782

 

 

 

517,776

 

 

 

397,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed Not Stabilized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Edge (fka 4885 Edgemoor Lane) (B)

 

Bethesda, MD

 

100%

 

 

154

 

 

 

75,271

 

 

 

71,275

 

 

 

 

 

97%

 

 

Q3 2019

 

Q3 2021

 

Q3 2021

 

Q3 2022

 

44% / 41%

Aero Apartments

 

Alameda, CA

 

90%

 

 

200

 

 

 

117,794

 

 

 

112,091

 

 

 

54,472

 

 

99%

 

 

Q3 2019

 

Q2 2021

 

Q2 2021

 

Q2 2022

 

57% / 54%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed Not Stabilized - Consolidated

 

 

 

 

 

354

 

 

 

193,065

 

 

 

183,366

 

 

 

54,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNCONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alloy Sunnyside

 

Denver, CO

 

80%

 

 

209

 

 

 

66,004

 

 

 

11,304

 

 

 

 

 

4%

 

 

Q3 2021

 

Q2 2023

 

Q4 2023

 

Q3 2024

 

– / –

Alexan Harrison

 

Harrison, NY

 

62%

 

 

450

 

 

 

198,664

 

 

 

44,731

 

 

 

 

 

1%

 

 

Q3 2021

 

Q3 2023

 

Q2 2024

 

Q4 2025

 

– / –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development - Unconsolidated

 

 

 

 

 

659

 

 

 

264,668

 

 

 

56,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Consolidated

 

 

 

 

 

 

1,136

 

 

 

710,841

 

 

 

580,977

 

 

 

54,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Unconsolidated

 

 

 

 

 

 

659

 

 

 

264,668

 

 

 

56,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects

 

 

 

 

 

 

1,795

 

 

$

975,509

 

 

$

637,012

 

 

$

54,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS

Total Budgeted

Capital Cost

 

 

Q3 2021

NOI

 

Projects Under Development - Consolidated

$

517,776

 

 

$

(29

)

Projects Completed Not Stabilized - Consolidated

 

193,065

 

 

 

(211

)

Projects Under Development - Unconsolidated

 

264,668

 

 

 

 

 

$

975,509

 

 

$

(240

)

(A)

All non-wholly owned projects are being partially funded with project-specific construction loans. None of these loans are recourse to the Company. As of September 30, 2021, no draws have been made on the construction loans for 9th and W or Alexan Harrison and the construction loan for Alloy Sunnyside has not yet closed.

 

(B)

The Edge – The land under this project is subject to a long-term ground lease. This project is adjacent to an existing apartment property owned by the Company.

Equity Residential

Capital Expenditures to Real Estate

For the Nine Months Ended September 30, 2021

(Amounts in thousands except for apartment unit and per apartment unit amounts)

 

 

 

Same Store

Properties

 

 

Non-Same Store

Properties/Other

 

 

Total

 

 

Same Store Avg.

Per Apartment Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Apartment Units

 

 

 

75,288

 

 

 

4,034

 

 

 

79,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Improvements

 

 

$

60,028

 

 

$

625

 

 

$

60,653

 

 

$

798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renovation Expenditures (1)

 

 

 

21,163

 

 

 

286

 

 

 

21,449

 

 

 

281

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replacements

 

 

 

24,939

 

 

 

665

 

 

 

25,604

 

 

 

331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures to Real Estate (2)

 

 

$

106,130

 

 

$

1,576

 

 

$

107,706

 

 

$

1,410

 

(1)

Renovation Expenditures on 996 same store apartment units for the nine months ended September 30, 2021 approximated $21,248 per apartment unit renovated.

 

(2)

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

Equity Residential

Normalized EBITDAre Reconciliations

(Amounts in thousands)

 

 

 

Trailing Twelve Months

 

 

2021

 

 

2020

 

 

 

September 30, 2021

 

 

June 30, 2021

 

 

Q3

 

 

Q2

 

 

Q1

 

 

Q4

 

 

Q3

 

Net income

 

$

1,098,720

 

 

$

746,753

 

 

$

447,332

 

 

$

328,040

 

 

$

60,364

 

 

$

262,984

 

 

$

95,365

 

Interest expense incurred, net

 

 

319,457

 

 

 

332,080

 

 

 

68,251

 

 

 

67,124

 

 

 

67,358

 

 

 

116,724

 

 

 

80,874

 

Amortization of deferred financing costs

 

 

8,858

 

 

 

8,911

 

 

 

2,048

 

 

 

1,939

 

 

 

2,185

 

 

 

2,686

 

 

 

2,101

 

Amortization of above/below market lease intangibles

 

 

4,291

 

 

 

4,273

 

 

 

1,116

 

 

 

979

 

 

 

1,098

 

 

 

1,098

 

 

 

1,098

 

Depreciation

 

 

817,861

 

 

 

803,069

 

 

 

215,397

 

 

 

200,673

 

 

 

199,962

 

 

 

201,829

 

 

 

200,605

 

Income and other tax expense (benefit)

 

 

1,029

 

 

 

1,007

 

 

 

284

 

 

 

242

 

 

 

153

 

 

 

350

 

 

 

262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

2,250,216

 

 

 

1,896,093

 

 

 

734,428

 

 

 

598,997

 

 

 

331,120

 

 

 

585,671

 

 

 

380,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(767,212

)

 

 

(403,259

)

 

 

(363,928

)

 

 

(223,738

)

 

 

43

 

 

 

(179,589

)

 

 

25

 

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

 

 

(640

)

 

 

(1,640

)

 

 

 

 

 

 

 

 

(4

)

 

 

(636

)

 

 

(1,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDAre

 

 

1,482,364

 

 

 

1,491,194

 

 

 

370,500

 

 

 

375,259

 

 

 

331,159

 

 

 

405,446

 

 

 

379,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs (other expenses)

 

 

5,562

 

 

 

6,238

 

 

 

910

 

 

 

1,316

 

 

 

1,331

 

 

 

2,005

 

 

 

1,586

 

(Income) loss from investments in unconsolidated entities - operations

 

 

4,507

 

 

 

4,597

 

 

 

1,156

 

 

 

261

 

 

 

1,615

 

 

 

1,475

 

 

 

1,246

 

Net (gain) loss on sales of land parcels

 

 

(34,239

)

 

 

(34,239

)

 

 

 

 

 

 

 

 

(5

)

 

 

(34,234

)

 

 

 

Realized (gain) loss on investment securities (interest and other income)

 

 

(23,432

)

 

 

(23,432

)

 

 

 

 

 

(23,565

)

 

 

133

 

 

 

 

 

 

 

Insurance/litigation settlement or reserve income (interest and other income)

 

 

(2,870

)

 

 

(2,131

)

 

 

(742

)

 

 

(328

)

 

 

 

 

 

(1,800

)

 

 

(3

)

Insurance/litigation/environmental settlement or reserve expense (other expenses)

 

 

5,083

 

 

 

3,712

 

 

 

1,871

 

 

 

1,000

 

 

 

2,212

 

 

 

 

 

 

500

 

Advocacy contributions (other expenses)

 

 

7,488

 

 

 

9,166

 

 

 

50

 

 

 

427

 

 

 

30

 

 

 

6,981

 

 

 

1,728

 

Other

 

 

(15

)

 

 

(444

)

 

 

 

 

 

 

 

 

 

 

 

(15

)

 

 

(429

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized EBITDAre

 

$

1,444,448

 

 

$

1,454,661

 

 

$

373,745

 

 

$

354,370

 

 

$

336,475

 

 

$

379,858

 

 

$

383,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Items:

 

September 30, 2021

 

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

8,144,648

 

 

$

8,250,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

(39,707

)

 

 

(39,492

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage principal reserves/sinking funds

 

 

(17,828

)

 

 

(16,580

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt

 

$

8,087,113

 

 

$

8,194,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: EBITDA, EBITDAre and Normalized EBITDAre do not include any adjustments for the Company’s share of partially owned unconsolidated entities or the minority partner’s share of partially owned consolidated entities due to the immaterial size of the Company’s partially owned portfolio.

Equity Residential

Adjustments from FFO to Normalized FFO

(Amounts in thousands)

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2021

 

 

2020

 

 

Variance

 

 

2021

 

 

2020

 

 

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs (other expenses)

 

 

3,557

 

 

 

4,864

 

 

 

(1,307

)

 

 

910

 

 

 

1,586

 

 

 

(676

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of unamortized deferred financing costs (interest expense)

 

 

264

 

 

 

37

 

 

 

227

 

 

 

 

 

 

5

 

 

 

(5

)

Debt extinguishment and preferred share redemption (gains) losses

 

 

264

 

 

 

37

 

 

 

227

 

 

 

 

 

 

5

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (gain) loss on sales of land parcels

 

 

(5

)

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

(Income) loss from investments in unconsolidated entities ─ non-operating assets

 

 

423

 

 

 

1,022

 

 

 

(599

)

 

 

294

 

 

 

352

 

 

 

(58

)

Realized (gain) loss on investment securities (interest and other income)

 

 

(23,432

)

 

 

 

 

 

(23,432

)

 

 

 

 

 

 

 

 

 

Non-operating asset (gains) losses

 

 

(23,014

)

 

 

1,022

 

 

 

(24,036

)

 

 

294

 

 

 

352

 

 

 

(58

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance/litigation settlement or reserve income (interest and other income)

 

 

(1,070

)

 

 

(2,352

)

 

 

1,282

 

 

 

(742

)

 

 

(3

)

 

 

(739

)

Insurance/litigation/environmental settlement or reserve expense (other expenses)

 

 

5,083

 

 

 

(1,293

)

 

 

6,376

 

 

 

1,871

 

 

 

500

 

 

 

1,371

 

Advocacy contributions (other expenses)

 

 

507

 

 

 

4,081

 

 

 

(3,574

)

 

 

50

 

 

 

1,728

 

 

 

(1,678

)

Other

 

 

 

 

 

(950

)

 

 

950

 

 

 

 

 

 

(429

)

 

 

429

 

Other miscellaneous items

 

 

4,520

 

 

 

(514

)

 

 

5,034

 

 

 

1,179

 

 

 

1,796

 

 

 

(617

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments from FFO to Normalized FFO

 

$

(14,673

)

 

$

5,409

 

 

$

(20,082

)

 

$

2,383

 

 

$

3,739

 

 

$

(1,356

)

 

Note: 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

Normalized FFO Guidance and Assumptions

The guidance/projections provided below are based on current expectations and are forward-looking. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit costs, are not included in the estimates provided on this page. 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.

 

Q4 2021

 

Revised Full Year 2021

 

Previous Full Year 2021

 

 

 

 

 

 

2021 Normalized FFO Guidance (per share diluted)

 

 

 

 

 

 

 

 

 

 

 

Expected Normalized FFO Per Share

$0.78 to $0.80

 

$2.95 to $2.97

 

$2.85 to $2.95

 

 

 

 

 

 

2021 Same Store Assumptions (includes Residential and Non-Residential)

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

 

96.0%

 

95.3% to 96.3%

Revenue change (1)

 

 

(3.7%)

 

(5.0%) to (4.0%)

Expense change

 

 

3.25%

 

2.75% to 3.25%

NOI change (2)

 

 

(7.0%)

 

(8.5%) to (7.5%)

 

 

 

 

 

 

2021 Transaction Assumptions

 

 

 

 

 

 

 

 

 

 

 

Consolidated rental acquisitions

 

 

$1.5B

 

$1.5B

Consolidated rental dispositions

 

 

$1.5B

 

$1.5B

Transaction Accretion (Dilution)

 

 

None

 

None

 

 

 

 

 

 

2021 Debt Assumptions

 

 

 

 

 

 

 

 

 

 

 

Weighted average debt outstanding

 

 

$8.2B to $8.3B

 

$8.1B to $8.3B

Interest expense, net (on a Normalized FFO basis)

 

 

$270.7M to $274.0M

 

$270.0M to $276.5M

Capitalized interest

 

 

$15.5M to $16.5M

 

$16.5M to $17.5M

 

 

 

 

 

 

2021 Capital Expenditures to Real Estate Assumptions for Same Store Properties (3)

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures to Real Estate for Same Store Properties

 

 

$150.0M

 

$150.0M

Capital Expenditures to Real Estate per Same Store Apartment Unit

 

 

$1,950

 

$1,950

 

 

 

 

 

 

2021 Other Guidance Assumptions

 

 

 

 

 

 

 

 

 

 

 

Property management expense

 

 

$97.5M to $99.5M

 

$96.5M to $98.5M

General and administrative expense

 

 

$55.5M to $57.5M

 

$55.0M to $57.0M

Debt offerings

 

 

$500.0M

 

$500.0M

Weighted average Common Shares and Units - Diluted

 

 

387.9M

 

388.2M

(1)

Revenue change is reflected on a GAAP basis. Revenue change would be approximately (2.9%) on a cash basis.

 

 

(2)

Approximately 25 basis point change in NOI percentage = $0.01 per share change in EPS/FFO per share/Normalized FFO per share.

 

 

(3)

During 2021, the Company expects to spend approximately $25.0 million for apartment unit Renovation Expenditures on approximately 1,250 same store apartment units at an average cost of approximately $20,000 per apartment unit renovated, which is included in the Capital Expenditures to Real Estate assumptions noted above.

Equity Residential

Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms

(Amounts in thousands except per share and per apartment unit data)

(All per share data is diluted)

This Earnings Release and Supplemental Financial Information includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other real estate investment trusts (“REIT”) and, accordingly, may not be comparable. These non-GAAP financial measures should not be considered as an alternative to net earnings or any other measurement of performance computed in accordance with accounting principles generally accepted in the United States (“GAAP”) or as an alternative to cash flows from specific operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.

Acquisition Capitalization Rate or Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset. The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property.

Average Rental Rate – Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented.

Bad Debt, Net – Change in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.

Blended Rate – The weighted average of New Lease Change and Renewal Rate Achieved.

Capital Expenditures to Real Estate:

Building Improvements Includes roof replacement, paving, building mechanical equipment systems, exterior siding and painting, major landscaping, furniture, fixtures and equipment for amenities and common areas, vehicles and office and maintenance equipment.

Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets.

Replacements – Includes appliances, mechanical equipment, fixtures and flooring (including hardwood and carpeting).

Debt Balances:

Commercial Paper Program The Company may borrow up to a maximum of $1.0 billion under its commercial paper program subject to market conditions. The notes bear interest at various floating rates.

Revolving Credit Facility The Company’s $2.5 billion unsecured revolving credit facility matures November 1, 2024. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.775%), or based on bids received from the lending group, and an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $1.0 billion commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility:

 

 

September 30, 2021

 

Unsecured revolving credit facility commitment

 

$

2,500,000

 

 

 

 

 

 

Commercial paper balance outstanding

 

 

(30,000

)

 

 

 

 

 

Unsecured revolving credit facility balance outstanding

 

 

 

 

 

 

 

Other restricted amounts

 

 

(100,442

)

 

 

 

 

 

Unsecured revolving credit facility availability

 

$

2,369,558

 

Debt Covenant Compliance – Our unsecured debt includes certain financial and operating covenants including, among other things, maintenance of certain financial ratios. These provisions are contained in the indentures applicable to each notes payable or the credit agreement for our line of credit. The Debt Covenant Compliance ratios that are provided show the Company's compliance with certain covenants governing our public unsecured debt. These covenants generally reflect our most restrictive financial covenants. The Company was in compliance with its unsecured debt covenants for all periods presented.

Development Yield – NOI that the Company anticipates receiving in the next 12 months following stabilization less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $50-$150 per apartment unit depending on the type of asset) divided by the Total Budgeted Capital Cost of the asset. The weighted average Development Yield for development properties is weighted based on the projected NOI streams and the relative Total Budgeted Capital Cost for each respective property.

Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.

Earnings Per Share ("EPS") Net income per share calculated in accordance with GAAP. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS.

EBITDA for Real Estate and Normalized EBITDA for Real Estate:

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) The National Association of Real Estate Investment Trusts (“Nareit”) defines EBITDAre (September 2017 White Paper) as net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities.

The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength between periods or as compared to different companies.

Normalized Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“Normalized EBITDAre”) – Represents net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for non-comparable items. Normalized EBITDAre, total debt to Normalized EBITDAre and net debt to Normalized EBITDAre are important metrics in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Normalized EBITDAre, total debt to Normalized EBITDAre, and net debt to Normalized EBITDAre are useful to investors, creditors and rating agencies because they allow investors to compare the Company’s credit strength to prior reporting periods and to other 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 credit quality.

Economic Gain (Loss) – Economic Gain (Loss) is calculated as the net gain (loss) on sales of real estate properties in accordance with GAAP, excluding accumulated depreciation. The Company generally considers Economic Gain (Loss) to be an appropriate supplemental measure to net gain (loss) on sales of real estate properties in accordance with GAAP because it is one indication of the gross value created by the Company's acquisition, development, renovation, management and ultimate sale of a property and because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold property. The following table presents a reconciliation of net gain (loss) on sales of real estate properties in accordance with GAAP to Economic Gain (Loss):

 

 

Nine Months Ended September 30, 2021

 

 

Quarter Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

Net Gain (Loss) on Sales of Real Estate Properties

 

$

587,623

 

 

$

363,928

 

Accumulated Depreciation Gain

 

 

(214,812

)

 

 

(118,840

)

 

 

 

 

 

 

 

 

 

Economic Gain (Loss)

 

$

372,811

 

 

$

245,088

 

FFO and Normalized FFO:

Funds From Operations (“FFO”) Nareit defines FFO (December 2018 White Paper) as net income (computed in accordance with 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 FFO on the same basis. Expected FFO per share is calculated on a basis consistent with actual FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that FFO and FFO available to Common Shares and 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 can help compare the operating performance of a company’s real estate between periods or as compared to different companies.

Normalized Funds From Operations ("Normalized FFO") – Normalized FFO begins with FFO and excludes:

• the impact of any expenses relating to non-operating asset impairment;

• pursuit cost write-offs;

• gains and losses from early debt extinguishment and preferred share redemptions;

• gains and losses from non-operating assets; and

• other miscellaneous items.

Expected Normalized FFO per share is calculated on a basis consistent with actual Normalized FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that Normalized FFO and Normalized FFO available to Common Shares and 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, Normalized FFO and Normalized FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares 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, Normalized FFO and Normalized FFO available to Common Shares and 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.

FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares 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.

The following table presents reconciliations of EPS to FFO per share and Normalized FFO per share for Consolidated Statements of Funds From Operations and Normalized Funds From Operations.

 

 

Actual Sept.

 

 

Actual Sept.

 

 

Actual

 

 

Actual

 

 

Expected

 

 

Expected

 

 

 

YTD 2021

 

 

YTD 2020

 

 

Q3 2021

 

 

Q3 2020

 

 

Q4 2021

 

 

2021

 

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

EPS – Diluted

 

$

2.14

 

 

$

1.77

 

 

$

1.15

 

 

$

0.24

 

 

$1.02 to $1.04

 

 

$3.16 to $3.18

 

Depreciation expense

 

 

1.58

 

 

 

1.59

 

 

 

0.55

 

 

 

0.52

 

 

0.56

 

 

2.14

 

Net (gain) loss on sales

 

 

(1.51

)

 

 

(0.88

)

 

 

(0.94

)

 

 

 

 

(0.81)

 

 

(2.32)

 

Impairment – operating assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per share – Diluted

 

 

2.21

 

 

 

2.48

 

 

 

0.76

 

 

 

0.76

 

 

0.77 to 0.79

 

 

2.98 to 3.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

 

 

0.01

 

 

0.02

 

Debt extinguishment and preferred share

 

 

redemption (gains) losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating asset (gains) losses

 

 

(0.06

)

 

 

 

 

 

 

 

 

 

 

 

 

(0.06)

 

Other miscellaneous items

 

 

0.01

 

 

 

 

 

 

 

 

 

0.01

 

 

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO per share – Diluted

 

$

2.17

 

 

$

2.49

 

 

$

0.77

 

 

$

0.77

 

 

$0.78 to $0.80

 

 

$2.95 to $2.97

 

Lease-Up NOI – Represents NOI for development properties: (i) in various stages of lease-up; and (ii) where lease-up has been completed but the properties were not stabilized (defined as having achieved 90% occupancy for three consecutive months) for all of the current and comparable periods presented.

Leasing Concessions – Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.

Net Operating Income (“NOI”) – NOI is the Company’s primary financial measure for evaluating each of its apartment properties. NOI is defined as 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. NOI does not include an allocation of property management expenses either in the current or comparable periods. Rental income for all leases and operating expense for ground leases (for both same store and non-same store properties) are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following tables present reconciliations of operating 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 (see Same Store Results):

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating income

 

$

1,033,958

 

 

$

961,384

 

 

$

521,554

 

 

$

182,410

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Net (gain) loss on sales of real estate

properties

 

 

(587,623

)

 

 

(352,218

)

 

 

(363,928

)

 

 

25

 

Total NOI

 

$

1,179,826

 

 

$

1,336,894

 

 

$

409,836

 

 

$

414,095

 

Rental income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

$

1,758,176

 

 

$

1,870,199

 

 

$

601,852

 

 

$

600,252

 

Non-same store/other

 

 

60,691

 

 

 

88,071

 

 

 

21,354

 

 

 

22,181

 

Total rental income

 

 

1,818,867

 

 

 

1,958,270

 

 

 

623,206

 

 

 

622,433

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

 

612,705

 

 

 

593,502

 

 

 

206,583

 

 

 

202,164

 

Non-same store/other

 

 

26,336

 

 

 

27,874

 

 

 

6,787

 

 

 

6,174

 

Total operating expenses

 

 

639,041

 

 

 

621,376

 

 

 

213,370

 

 

 

208,338

 

NOI:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

 

1,145,471

 

 

 

1,276,697

 

 

 

395,269

 

 

 

398,088

 

Non-same store/other

 

 

34,355

 

 

 

60,197

 

 

 

14,567

 

 

 

16,007

 

Total NOI

 

$

1,179,826

 

 

$

1,336,894

 

 

$

409,836

 

 

$

414,095

 

New Lease Change The net effective change in rent (inclusive of Leasing Concessions) for a lease with a new or transferring resident compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Non-Residential – Consists of revenues and expenses from retail and public parking garage operations.

Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2020 and 2021, plus any properties in lease-up and not stabilized as of January 1, 2020.

Percentage of Residents Renewing – Leases renewed expressed as a percentage of total renewal offers extended during the reporting period.

Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.

Pricing Trend – Weighted average of 12-month base rent including amenity amount less Leasing Concessions on 12-month signed leases for the reporting period.

Renewal Rate Achieved The net effective change in rent (inclusive of Leasing Concessions) for a new lease on an apartment unit where the lease has been renewed as compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Residential – Consists of multifamily apartment revenues and expenses.

Same Store Operating Expenses:

On-site Payroll Includes payroll and related expenses for on-site personnel including property managers, leasing consultants, and maintenance staff.

Other On-site Operating Expenses Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.

Repairs and Maintenance Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair and maintenance costs.

Utilities Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.

Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2020, less properties subsequently sold. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented.

Same Store Residential Revenues Revenues from our Same Store Properties presented on a GAAP basis which reflects the impact of Leasing Concessions on a straight-line basis.

Same Store Residential Revenues with Leasing Concessions on a cash basis is presented in Same Store Results and is considered by the Company to be a supplemental measure to Same Store Residential Revenues in conformity with GAAP to help investors evaluate the impact of both current and historical Leasing Concessions on GAAP-based Same Store Residential Revenues and to more readily enable comparisons to revenue as reported by other companies. Same Store Residential Revenues with Leasing Concessions on a cash basis reflects the impact of Leasing Concessions used in the period and allows an investor to understand the historical trend in cash Leasing Concessions.

% of Stabilized Budgeted NOI – Represents original budgeted 2021 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.

Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.

Total Market Capitalization – The aggregate of the market value of the Company’s outstanding common shares, including restricted shares, the market value of the Company’s operating partnership units outstanding, including restricted units (based on the market value of the Company’s common shares) and the outstanding principal balance of debt. The Company believes this is a useful measure of a real estate operating company’s long-term liquidity and balance sheet strength, because it shows an approximate relationship between a company’s total debt and the current total market value of its assets based on the current price at which the Company’s common shares trade. However, because this measure of leverage changes with fluctuations in the Company’s share price, which occur regularly, this measure may change even when the Company’s earnings, interest and debt levels remain stable.

Traffic – Consists of an expression of interest in an apartment by completing an in-person tour, self-guided tour or virtual tour that may result in an application to lease.

Transaction Accretion (Dilution) – Represents the spread between the Acquisition Cap Rate and the Disposition Yield.

Turnover Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units.

Unencumbered NOI % – Represents NOI generated by consolidated real estate assets unencumbered by outstanding secured debt as a percentage of total NOI generated by all of the Company's consolidated real estate assets.

Unlevered Internal Rate of Return (“IRR”) – The Unlevered IRR on sold properties is the compound annual rate of return calculated by the Company based on the timing and amount of: (i) the gross purchase price of the property plus any direct acquisition costs incurred by the Company; (ii) total revenues earned during the Company’s ownership period; (iii) total direct property operating expenses (including real estate taxes and insurance) incurred during the Company’s ownership period; (iv) capital expenditures incurred during the Company’s ownership period; and (v) the gross sales price of the property net of selling costs.

The calculation of the Unlevered IRR does not include an adjustment for the Company’s property management expense, general and administrative expense or interest expense (including loan assumption costs and other loan-related costs). Therefore, the Unlevered IRR is not a substitute for net income as a measure of our performance. Management believes that the Unlevered IRR achieved during the period a property is owned by the Company is useful because it is one indication of the gross value created by the Company’s acquisition, development, renovation, management and ultimate sale of a property, before the impact of Company overhead. The Unlevered IRR achieved on the properties as cited in this release should not be viewed as an indication of the gross value created with respect to other properties owned by the Company, and the Company does not represent that it will achieve similar Unlevered IRRs upon the disposition of other properties. The weighted average Unlevered IRR for sold properties is weighted based on all cash flows over the investment period for each respective property, including net sales proceeds.

Weighted Average Coupons – Contractual interest rate for each debt instrument weighted by principal balances as of September 30, 2021. In case of debt for which fair value hedges are in place, the rate payable under the corresponding derivatives is used in lieu of the contractual interest rate.

Weighted Average Rates – Interest expense for each debt instrument for the nine months ended September 30, 2021 weighted by its average principal balance for the same period. Interest expense includes amortization of premiums, discounts and other comprehensive income on debt and related derivative instruments. In case of debt for which derivatives are in place, the income or expense recognized under the corresponding derivatives is included in the total interest expense for the period.

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