Equity Residential Reports Second Quarter 2021 Results

By: Equity Residential via Business Wire

July 27, 2021 at 16:13 PM EDT

Full Year Guidance Ranges Raised as Strong Recovery Continues Across Portfolio

Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2021 and has posted a Q2 2021 Management Presentation to its website as referenced below.

Second Quarter 2021 Results

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


	Quarter Ended June 30,
	2021		2020		$ Change			% Change
Earnings Per Share (EPS)	$	0.84	$	0.70	$	0.14			20.0	%
Funds from Operations (FFO) per share	$	0.78	$	0.86	$	(0.08	)		(9.3	%)
Normalized FFO per share	$	0.72	$	0.86	$	(0.14	)		(16.3	%)


	Six Months Ended June 30,
	2021		2020		$ Change			% Change
Earnings Per Share (EPS)	$	1.00	$	1.53	$	(0.53	)		(34.6	%)
Funds from Operations (FFO) per share	$	1.45	$	1.72	$	(0.27	)		(15.7	%)
Normalized FFO per share	$	1.40	$	1.72	$	(0.32	)		(18.6	%)

“Driven by an accelerating economy and the reopening of cities, our operations continue to recover rapidly with robust demand for our apartments in all our markets leading to high occupancy, increased pricing power and an almost complete absence of new lease concessions. This has driven pricing and Physical Occupancy up so quickly that they now equal or exceed 2019 levels in most of our markets,” said Mark J. Parrell, Equity Residential’s President and CEO. “Based on these positive indicators, we are pleased to raise our annual same store revenue guidance range to (5%) - (4%) with an expectation that quarter over quarter same store revenue growth could return as early as the fourth quarter of this year.”

Highlights

Strong Physical Occupancy and rapid improvement in other same store operating metrics drove quarterly sequential same store revenue and NOI positive in the second quarter for the first time since the beginning of the pandemic. As a result, the Company raised its annual guidance ranges for same store revenues and NOI, as well as EPS, FFO per share and Normalized FFO per share, and reduced the range for same store expenses.
During the second quarter and July 2021, the Company acquired seven operating properties, consisting of 1,894 apartment units, for an aggregate purchase price of approximately $645.7 million at a weighted average Acquisition Cap Rate of 4.0%. The acquisitions include two properties in Austin, TX and two properties in Atlanta, GA, marking the Company’s re-entry into these markets. See the Management Presentation for details.
During the second quarter and July 2021, the Company sold six operating properties, consisting of 866 apartment units, for an aggregate sales price of approximately $434.8 million at a weighted average Disposition Yield of 3.8%.
During the second quarter of 2021, the Company completed the development of one joint venture property, Aero Apartments, consisting of 200 apartment units in the San Francisco market.
The Company continued to collect approximately 97% of its expected Residential revenues in the second quarter of 2021.

Results Per Share

The change in EPS for the quarter ended June 30, 2021 compared to the same period of 2020 is due primarily to higher property sale gains in the second 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 six months ended June 30, 2021 compared to the same period of 2020 is due primarily to lower property sale gains in the first six 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 six months ended June 30, 2021 compared to the same period 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
	Second Quarter 2021 vs. Second Quarter 2020			June YTD 2021 vs. June YTD 2020
Residential same store Net Operating Income (NOI)	$	(0.15	)	$	(0.34	)
Non-Residential same store NOI		0.01			0.01
2021 and 2020 transaction activity impact on NOI, net		(0.02	)		(0.05	)
Interest expense, net		0.04			0.08
Other items, including corporate overhead ⁽¹⁾		(0.02	)		(0.02	)
Net	$	(0.14	)	$	(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 six months ended June 30, 2021. The table below reflects same store Residential only results.

	Second Quarter 2021 vs. Second Quarter 2020	Second Quarter 2021 vs. First Quarter 2021	June YTD 2021 vs. June YTD 2020
Apartment Units	76,556	76,931	76,335
Physical Occupancy	96.1% vs. 94.9%	96.1% vs. 95.0%	95.5% vs. 95.6%

Revenues	(8.4%)	0.2%	(9.5%)
Expenses	3.4%	(4.6%)	3.6%
NOI	(13.5%)	2.9%	(15.4%)

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.

	Second Quarter 2021 vs. Second Quarter 2020			Second Quarter 2021 vs. First Quarter 2021			June YTD 2021 vs. June YTD 2020
	% Change			% Change			% Change
Same Store Residential Revenues- comparable period
Lease rates ⁽¹⁾		(7.5	%)		(1.0	%)		(7.1	%)
Leasing Concessions ⁽²⁾		(1.8	%)		(0.2	%)		(1.7	%)
Vacancy loss		1.6	%		1.1	%		0.3	%
Bad Debt, Net ⁽³⁾		(0.5	%)		0.2	%		(1.0	%)
Other ⁽⁴⁾		(0.2	%)		0.1	%		0.0	%
Same Store Residential Revenues- current period		(8.4	%)		0.2	%		(9.5	%)

(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)	Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis. See page 12 for more detail.
(3)	Change in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.
(4)	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:

	Q1 2021	Q2 2021	July 2021 (1)
Physical Occupancy ⁽²⁾	95.6%	96.3%	96.4%
Percentage of Residents Renewing by quarter/month	52.9%	53.2%	55.0%

New Lease Change	(17.7%)	(5.3%)	6.3%
Renewal Rate Achieved	(5.2%)	0.2%	3.6%
Blended Rate	(12.2%)	(2.7%)	4.8%

(1)	July 2021 results are preliminary.
(2)	Physical Occupancy is as of month-end March for Q1 2021, month-end June for Q2 2021 and as of July 22nd for July 2021.

Investment Activity

The Company acquired three properties, consisting of 813 apartment units, during the second quarter of 2021 for an aggregate purchase price of approximately $280.2 million at a weighted average Acquisition Capitalization Rate of 3.9%. The properties are located in Denver, CO, Fairfax, VA and Atlanta, GA. Subsequent to the end of the second quarter, the Company acquired four properties, consisting of 1,081 apartment units, for an aggregate purchase price of approximately $365.5 million at a weighted average Acquisition Capitalization Rate of 4.1%. Two of the properties are located in Austin, TX, one in Atlanta, GA and the other in suburban Boston, MA. Also subsequent to the end of the second quarter, the Company acquired one land parcel in a joint venture for future development, located in Denver, CO, for a purchase price of approximately $4.9 million. The Company did not acquire any properties in the first quarter of 2021, therefore, the year-to-date 2021 acquisition activity is the same as listed above.

The Company sold five properties during the second quarter of 2021, consisting of 795 apartment units, for an aggregate sale price of approximately $409.5 million at a weighted average Disposition Yield of 3.7%, generating an Unlevered IRR of 8.8%. Three of the properties are located in suburban Los Angeles, CA, one in suburban New York, NY and one in suburban Seattle, WA. Subsequent to the end of the second quarter, the Company sold one property, located in suburban San Francisco, CA, consisting of 71 apartment units, for a sale price of approximately $25.3 million, at a Disposition Yield of 4.4%. The Company did not sell any properties during the first quarter of 2021, therefore, the year-to-date 2021 disposition activity is the same as listed above.

“We are making excellent progress in investing capital in Denver and in our new target markets of Atlanta and Austin, while also adding properties in the suburbs of our established coastal markets that are attractive to our affluent renter customer base. We are funding this investment activity by selling older, less desirable or regulatorily challenged assets, especially in California, at pricing that exceeds our pre-pandemic values. We expect little to no dilution from this activity and believe that trading into newer assets in our expansion markets and in suburban locations in our established markets with the same high quality customer base will have both diversification and capital expenditure benefits,” said Mr. Parrell.

Third Quarter 2021 Guidance

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

		Q3 2021 Guidance
EPS		$1.38 to $1.42
FFO per share		$0.71 to $0.75
Normalized FFO per share		$0.72 to $0.76

The difference between the second quarter 2021 actual EPS of $0.84 and the third quarter of 2021 EPS guidance midpoint of $1.40 is due primarily to higher expected property sale gains and same store NOI, partially offset by lower expected non-operating asset gains.

The difference between the second quarter 2021 actual FFO of $0.78 per share and the third quarter of 2021 FFO guidance midpoint of $0.73 per share is due primarily to lower expected non-operating asset gains, partially offset by higher expected same store NOI.

The difference between the second quarter 2021 actual Normalized FFO of $0.72 per share and the third quarter of 2021 Normalized FFO guidance midpoint of $0.74 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	95.3% to 96.3%	95.0% to 96.0%
Revenue change	(5.0%) to (4.0%)	(8.0%) to (6.0%)
Expense change	2.75% to 3.25%	3.0% to 4.0%
NOI change	(8.5%) to (7.5%)	(13.0%) to (11.0%)

EPS	$3.03 to $3.13	$2.57 to $2.67
FFO per share	$2.89 to $2.99	$2.67 to $2.77
Normalized FFO per share	$2.85 to $2.95	$2.70 to $2.80

The change in the full year 2021 EPS guidance range is due primarily to higher expected property sale gains and same store NOI and higher non-operating asset gains realized in the second quarter of 2021.

The change in the full year 2021 FFO per share guidance range is due primarily to higher expected same store NOI and higher non-operating asset gains realized in the second quarter of 2021.

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 July 26, 2021, Equity Residential owns or has investments in 306 properties consisting of 79,117 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 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, July 28, 2021 at 10:00 a.m. CT. In connection with the conference call, the Company is also providing a Management Presentation on its website. Please visit the Investor section of the Company’s website at www.equityapartments.com for the web cast link and the presentation.

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

	Six Months Ended June 30,						Quarter Ended June 30,
	2021			2020			2021			2020
REVENUES
Rental income	$	1,195,661		$	1,335,837		$	598,059		$	653,532

EXPENSES
Property and maintenance		224,800			220,268			107,746			104,452
Real estate taxes and insurance		200,871			192,770			97,401			95,038
Property management		50,585			51,317			24,455			23,608
General and administrative		30,061			26,353			14,678			11,835
Depreciation		400,635			418,398			200,673			205,976
Total expenses		906,952			909,106			444,953			440,909

Net gain (loss) on sales of real estate properties		223,695			352,243			223,738			144,266

Operating income		512,404			778,974			376,844			356,889

Interest and other income		24,320			3,471			24,104			1,511
Other expenses		(7,452	)		(4,227	)		(3,342	)		(1,694	)
Interest:
Expense incurred, net		(134,482	)		(167,475	)		(67,124	)		(81,885	)
Amortization of deferred financing costs		(4,124	)		(4,152	)		(1,939	)		(2,111	)
Income before income and other taxes, income (loss) from investments in unconsolidated entities and net gain (loss) on sales of land parcels		390,666			606,591			328,543			272,710
Income and other tax (expense) benefit		(395	)		(240	)		(242	)		(187	)
Income (loss) from investments in unconsolidated entities		(1,872	)		(2,199	)		(261	)		(1,042	)
Net gain (loss) on sales of land parcels		5			—			—			—
Net income		388,404			604,152			328,040			271,481
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(13,056	)		(21,248	)		(10,913	)		(9,713	)
Partially Owned Properties		(1,423	)		(13,410	)		(741	)		(880	)
Net income attributable to controlling interests		373,925			569,494			316,386			260,888
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)
Net income available to Common Shares	$	372,380		$	567,949		$	315,614		$	260,116

Earnings per share – basic:
Net income available to Common Shares	$	1.00		$	1.53		$	0.84		$	0.70
Weighted average Common Shares outstanding		373,050			371,689			373,812			371,795

Earnings per share – diluted:
Net income available to Common Shares	$	1.00		$	1.53		$	0.84		$	0.70
Weighted average Common Shares outstanding		387,367			386,272			387,820			385,913

Distributions declared per Common Share outstanding	$	1.205		$	1.205		$	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)

	Six Months Ended June 30,						Quarter Ended June 30,
	2021			2020			2021			2020
Net income	$	388,404		$	604,152		$	328,040		$	271,481
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(1,423	)		(13,410	)		(741	)		(880	)
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)
Net income available to Common Shares and Units		385,436			589,197			326,527			269,829

Adjustments:
Depreciation		400,635			418,398			200,673			205,976
Depreciation – Non-real estate additions		(2,176	)		(2,307	)		(1,076	)		(1,020	)
Depreciation – Partially Owned Properties		(1,682	)		(1,686	)		(854	)		(830	)
Depreciation – Unconsolidated Properties		1,233			1,224			616			611
Net (gain) loss on sales of unconsolidated entities - operating assets		(4	)		—			—			—
Net (gain) loss on sales of real estate properties		(223,695	)		(352,243	)		(223,738	)		(144,266	)
Noncontrolling Interests share of gain (loss) on sales of real estate properties		—			11,655			—			—
FFO available to Common Shares and Units		559,747			664,238			302,148			330,300

Adjustments (see note for additional detail):
Impairment – non-operating assets		—			—			—			—
Write-off of pursuit costs		2,647			3,278			1,316			1,651
Debt extinguishment and preferred share redemption (gains) losses		264			32			—			32
Non-operating asset (gains) losses		(23,308	)		670			(24,162	)		229
Other miscellaneous items		3,341			(2,310	)		1,099			(1,392	)
Normalized FFO available to Common Shares and Units	$	542,691		$	665,908		$	280,401		$	330,820

FFO	$	561,292		$	665,783		$	302,920		$	331,072
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)
FFO available to Common Shares and Units	$	559,747		$	664,238		$	302,148		$	330,300
FFO per share and Unit – basic	$	1.45		$	1.73		$	0.78		$	0.86
FFO per share and Unit – diluted	$	1.45		$	1.72		$	0.78		$	0.86

Normalized FFO	$	544,236		$	667,453		$	281,173		$	331,592
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)
Normalized FFO available to Common Shares and Units	$	542,691		$	665,908		$	280,401		$	330,820
Normalized FFO per share and Unit – basic	$	1.41		$	1.73		$	0.73		$	0.86
Normalized FFO per share and Unit – diluted	$	1.40		$	1.72		$	0.72		$	0.86

Weighted average Common Shares and Units outstanding – basic		385,594			384,702			385,856			384,818
Weighted average Common Shares and Units outstanding – diluted		387,367			386,272			387,820			385,913

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)

	June 30,			December 31,
	2021			2020
ASSETS
Land	$	5,780,705		$	5,785,367
Depreciable property		21,161,984			20,920,654
Projects under development		372,243			411,134
Land held for development		90,446			86,170
Investment in real estate		27,405,378			27,203,325
Accumulated depreciation		(8,164,287	)		(7,859,657	)
Investment in real estate, net		19,241,091			19,343,668
Investments in unconsolidated entities		53,364			52,782
Cash and cash equivalents		39,492			42,591
Restricted deposits		353,009			57,137
Right-of-use assets		480,671			499,287
Other assets		296,719			291,426
Total assets	$	20,464,346		$	20,286,891

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,280,251		$	2,293,890
Notes, net		5,338,671			5,335,536
Line of credit and commercial paper		631,770			414,830
Accounts payable and accrued expenses		114,288			107,366
Accrued interest payable		65,814			65,896
Lease liabilities		314,379			329,130
Other liabilities		341,817			345,064
Security deposits		62,228			60,480
Distributions payable		232,958			232,262
Total liabilities		9,382,176			9,184,454

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		440,123			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 June 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; 374,354,830 shares issued and outstanding as of June 30, 2021 and 372,302,000 shares issued and outstanding as of December 31, 2020		3,744			3,723
Paid in capital		9,110,121			9,128,599
Retained earnings		1,321,875			1,399,715
Accumulated other comprehensive income (loss)		(39,029	)		(43,666	)
Total shareholders’ equity		10,433,991			10,525,651
Noncontrolling Interests:
Operating Partnership		205,691			233,162
Partially Owned Properties		2,365			4,673
Total Noncontrolling Interests		208,056			237,835
Total equity		10,642,047			10,763,486
Total liabilities and equity	$	20,464,346		$	20,286,891

Equity Residential

Portfolio Summary

As of June 30, 2021

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

Established Markets:
Los Angeles		69		16,193		20.8	%	$	2,400
Orange County		13		4,028		5.4	%		2,255
San Diego		11		2,706		3.8	%		2,408
Subtotal – Southern California		93		22,927		30.0	%		2,375

San Francisco		49		12,907		18.6	%		2,836
Washington DC		48		14,944		17.4	%		2,311
Seattle		45		9,332		11.3	%		2,207
New York		36		9,343		11.1	%		3,405
Boston		25		6,430		9.4	%		2,826

Expansion Markets:
Denver		6		1,904		1.9	%		2,011
Atlanta		1		320		0.3	%		1,960

Total		303		78,107		100.0	%	$	2,567

	Properties		Apartment Units

Wholly Owned Properties		286		74,468
Master-Leased Properties – Consolidated		1		162
Partially Owned Properties – Consolidated		16		3,477

		303		78,107

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

Equity Residential

Portfolio Rollforward ($ in thousands)

		Properties			Apartment Units			Purchase Price			Acquisition Cap Rate

12/31/2020 and 3/31/2021			304			77,889

Acquisitions:
Consolidated Rental Properties			2			533		$	185,000			3.9	%
Consolidated Rental Properties – Not Stabilized (A)			1			280		$	95,200			4.1	%

								Sales Price			Disposition Yield

Dispositions:
Consolidated Rental Properties			(5	)		(795	)	$	(409,500	)		(3.7	%)

Completed Developments – Consolidated			1			200

	6/30/2021		303			78,107

(A)	The Company acquired one property in the Denver market in the second quarter of 2021 that is in lease-up and is expected to stabilize in its second year of ownership at the Acquisition Cap Rate listed above.

Note:	The Company did not acquire or sell any assets during the first quarter of 2021.

Equity Residential


Second Quarter 2021 vs. Second Quarter 2020 Same Store Results/Statistics Including 76,556 Same Store Apartment Units $ in thousands (except for Average Rental Rate)
Second Quarter 2021													Second Quarter 2020
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	567,856		(1)	(8.4%)	$	21,152	(2)	43.8%	$	589,008	(7.2%)	Revenues	$	619,684		$	14,709	$	634,393
Expenses	$	195,129			3.4%	$	6,078		18.0%	$	201,207	3.8%	Expenses	$	188,770		$	5,150	$	193,920
NOI	$	372,727			(13.5%)	$	15,074		57.7%	$	387,801	(12.0%)	NOI	$	430,914		$	9,559	$	440,473

Average Rental Rate	$	2,574			(9.5%)								Average Rental Rate	$	2,845
Physical Occupancy		96.1	%		1.2%								Physical Occupancy		94.9	%
Turnover		11.3	%		(0.5%)								Turnover		11.8	%


Second Quarter 2021 vs. First Quarter 2021 Same Store Results/Statistics Including 76,931 Same Store Apartment Units $ in thousands (except for Average Rental Rate)
Second Quarter 2021													First Quarter 2021
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	569,853		(1)	0.2%	$	21,184	(2)	(2.4%)	$	591,037	0.1%	Revenues	$	568,807		$	21,713	$	590,520
Expenses	$	195,707			(4.6%)	$	6,079		0.8%	$	201,786	(4.4%)	Expenses	$	205,058		$	6,033	$	211,091
NOI	$	374,146			2.9%	$	15,105		(3.7%)	$	389,251	2.6%	NOI	$	363,749		$	15,680	$	379,429

Average Rental Rate	$	2,571			(1.0%)								Average Rental Rate	$	2,596
Physical Occupancy		96.1	%		1.1%								Physical Occupancy		95.0	%
Turnover		11.4	%		1.4%								Turnover		10.0	%

June YTD 2021 vs. June YTD 2020 Same Store Results/Statistics Including 76,335 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

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

Revenues	$	1,131,724		(1)	(9.5%)	$	42,839	(2)	13.3%	$	1,174,563	(8.9%)	Revenues	$	1,250,911		$	37,821	$	1,288,732
Expenses	$	398,834			3.6%	$	12,106		10.2%	$	410,940	3.8%	Expenses	$	384,969		$	10,983	$	395,952
NOI	$	732,890			(15.4%)	$	30,733		14.5%	$	763,623	(14.5%)	NOI	$	865,942		$	26,838	$	892,780

Average Rental Rate	$	2,588			(9.4%)								Average Rental Rate	$	2,857
Physical Occupancy		95.5	%		(0.1%)								Physical Occupancy		95.6	%
Turnover		21.3	%		(0.3%)								Turnover		21.6	%

(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:
	• Second Quarter 2021 vs. Second Quarter 2020 – Primarily lower deferral/abatement of rents, lower bad debt and higher parking income.
	• Second Quarter 2021 vs. First Quarter 2021 – Primarily lower early lease termination settlement income from retail tenants.
	• June YTD 2021 vs. June YTD 2020 – Primarily lower bad debt and higher parking income.

Equity Residential

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

	Second Quarter 2021 vs. Second Quarter 2020						Second Quarter 2021 vs. First Quarter 2021						June YTD 2021 vs. June YTD 2020
	76,556 Same Store Apartment Units						76,931 Same Store Apartment Units						76,335 Same Store Apartment Units
	Q2 2021			Q2 2020			Q2 2021			Q1 2021			June YTD 2021			June YTD 2020
Same Store Residential Revenues (GAAP Basis)	$	567,856		$	619,684		$	569,853		$	568,807		$	1,131,724		$	1,250,911
Leasing Concessions amortized		13,081			1,623			13,184			11,771			24,644			2,693
Leasing Concessions granted ⁽²⁾		(8,218	)		(2,741	)		(8,298	)		(17,140	)		(25,170	)		(4,633	)
Same Store Residential Revenues with Leasing Concessions on a cash basis	$	572,719		$	618,566		$	574,739		$	563,438		$	1,131,198		$	1,248,971

% change - GAAP revenue		(8.4	%)					0.2	%					(9.5	%)

% change - cash revenue		(7.4	%)					2.0	%					(9.4	%)

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

(2)	Monthly Leasing Concessions granted continue to decline. Leasing Concessions granted in June and July (preliminary) 2021 are $2.0 million and $1.5 million, respectively, which are down from their peak of $6.1 million per month in February 2021.

Same Store Resident/Tenant Accounts Receivable Balances Including 76,335 Same Store Apartment Units $ in thousands

	Residential							Non-Residential
Balance Sheet (Other assets):	June 30, 2021				March 31, 2021			June 30, 2021			March 31, 2021
Resident/tenant accounts receivable balances	$	43,793			$	37,420		$	6,035		$	6,499
Allowance for doubtful accounts		(38,803	)			(31,453	)		(5,232	)		(5,669	)
Net receivable balances	$	4,990		(1)	$	5,967		$	803		$	830

Straight-line receivable balances	$	20,204		(2)	$	25,028		$	12,780		$	13,306

(1)	The Company held same store Residential security deposits approximating 42.3% of the net receivable balance at June 30, 2021.

(2)	Total same store Residential Leasing Concessions granted in the second quarter of 2021 were approximately $8.2 million. The straight-line receivable balance of $20.2 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 half of 2022.

Same Store Residential Bad Debt Including 76,335 Same Store Apartment Units $ in thousands


Income Statement (Rental income):	Q2 2021			Q1 2021			Q2 2020
Bad Debt, Net	$	12,215		$	13,593		$	9,403
% of Same Store Residential Revenues		2.2	%		2.4	%		1.5	%

Equity Residential

Second Quarter 2021 vs. Second Quarter 2020

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas	Apartment Units		Q2 2021 % of Actual NOI			Q2 2021 Average Rental Rate		Q2 2021 Weighted Average Physical Occupancy %			Q2 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		16,193		20.4	%	$	2,400		96.5	%		10.6	%		(4.8	%)			2.6	%		(8.0	%)		(6.5	%)		1.8	%		(1.4	%)
Orange County		4,028		5.5	%		2,255		97.9	%		8.3	%		1.3	%			3.6	%		0.6	%		(0.3	%)		1.6	%		(1.5	%)
San Diego		2,706		3.9	%		2,408		98.2	%		10.1	%		3.2	%			2.2	%		3.6	%		1.7	%		1.5	%		(0.2	%)
Subtotal – Southern California		22,927		29.8	%		2,375		96.9	%		10.1	%		(2.9	%)			2.7	%		(5.1	%)		(4.6	%)		1.7	%		(1.3	%)

San Francisco		12,707		19.1	%		2,825		95.3	%		11.4	%		(14.5	%)			3.8	%		(20.6	%)		(14.9	%)		0.5	%		(0.3	%)
Washington DC		14,569		17.7	%		2,316		96.3	%		12.0	%		(4.8	%)			3.1	%		(8.2	%)		(5.8	%)		0.9	%		0.7	%
New York		9,343		11.6	%		3,405		95.2	%		10.1	%		(13.0	%)			3.7	%		(26.1	%)		(14.0	%)		1.2	%		(1.6	%)
Seattle		8,956		10.3	%		2,221		95.7	%		13.7	%		(10.2	%)			3.0	%		(15.5	%)		(10.5	%)		0.4	%		2.1	%
Boston		6,430		9.6	%		2,826		96.0	%		11.8	%		(8.5	%)			5.1	%		(13.7	%)		(10.9	%)		2.5	%		(1.8	%)
Denver		1,624		1.9	%		2,015		97.0	%		15.3	%		1.5	%			0.9	%		1.7	%		(1.6	%)		2.9	%		(1.8	%)

Total		76,556		100.0	%	$	2,574		96.1	%		11.3	%		(8.4	%)	(1)		3.4	%		(13.5	%)		(9.5	%)		1.2	%		(0.5	%)

(1)	With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues decreased 7.4% in the second quarter of 2021 compared to the second 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 six months ended June 30, 2021.

Equity Residential

Second Quarter 2021 vs. First Quarter 2021

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Quarter
Markets/Metro Areas	Apartment Units		Q2 2021 % of Actual NOI			Q2 2021 Average Rental Rate		Q2 2021 Weighted Average Physical Occupancy %			Q2 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		16,193		20.3	%	$	2,400		96.5	%		10.6	%		0.5	%			(3.6	%)		2.7	%		(0.2	%)		0.7	%		0.5	%
Orange County		4,028		5.5	%		2,255		97.9	%		8.3	%		3.2	%			(3.4	%)		5.4	%		2.3	%		0.9	%		0.5	%
San Diego		2,706		3.9	%		2,408		98.2	%		10.1	%		2.4	%			(2.0	%)		3.8	%		1.3	%		1.0	%		(0.4	%)
Subtotal – Southern California		22,927		29.7	%		2,375		96.9	%		10.1	%		1.2	%			(3.5	%)		3.3	%		0.4	%		0.8	%		0.3	%

San Francisco		12,707		19.1	%		2,825		95.3	%		11.4	%		(1.1	%)			(4.4	%)		0.4	%		(2.7	%)		1.5	%		0.0	%
Washington DC		14,569		17.7	%		2,316		96.3	%		12.0	%		0.0	%			(5.0	%)		2.6	%		(0.4	%)		0.4	%		2.3	%
New York		9,343		11.5	%		3,405		95.2	%		10.1	%		1.4	%			(5.3	%)		10.0	%		(2.8	%)		3.9	%		1.8	%
Seattle		9,331		10.7	%		2,207		95.6	%		13.7	%		(1.7	%)			(1.9	%)		(1.6	%)		(1.8	%)		0.0	%		2.5	%
Boston		6,430		9.5	%		2,826		96.0	%		11.8	%		(0.2	%)			(6.6	%)		3.0	%		(0.9	%)		0.7	%		2.9	%
Denver		1,624		1.8	%		2,015		97.0	%		15.3	%		2.4	%			(12.9	%)		9.8	%		1.5	%		0.9	%		3.0	%

Total		76,931		100.0	%	$	2,571		96.1	%		11.4	%		0.2	%	(1)		(4.6	%)		2.9	%		(1.0	%)		1.1	%		1.4	%

(1)	With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 2.0% in the second quarter of 2021 compared to the first 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 six months ended June 30, 2021.

Equity Residential

June YTD 2021 vs. June YTD 2020

Same Store Residential Results/Statistics by Market

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

Los Angeles		16,193		20.4	%	$	2,402		96.1	%		20.7	%		(6.5	%)			1.8	%		(10.2	%)		(7.3	%)		0.7	%		(2.4	%)
Orange County		4,028		5.5	%		2,230		97.4	%		16.1	%		(1.0	%)			3.1	%		(2.2	%)		(1.8	%)		0.8	%		(2.7	%)
San Diego		2,706		3.9	%		2,392		97.7	%		20.5	%		1.5	%			1.7	%		1.5	%		0.5	%		1.0	%		(1.2	%)
Subtotal – Southern California		22,927		29.8	%		2,370		96.5	%		19.9	%		(4.7	%)			1.9	%		(7.4	%)		(5.5	%)		0.8	%		(2.3	%)

San Francisco		12,707		19.4	%		2,864		94.6	%		22.8	%		(15.1	%)			4.3	%		(21.6	%)		(14.0	%)		(1.2	%)		1.4	%
Washington DC		14,569		17.8	%		2,320		96.1	%		21.6	%		(5.1	%)			3.5	%		(8.9	%)		(5.5	%)		0.3	%		1.7	%
New York		9,343		11.2	%		3,453		93.2	%		18.4	%		(15.1	%)			4.0	%		(30.4	%)		(13.2	%)		(2.1	%)		(0.6	%)
Seattle		8,819		10.5	%		2,244		95.7	%		24.7	%		(10.3	%)			4.4	%		(16.0	%)		(9.8	%)		(0.5	%)		1.8	%
Boston		6,346		9.5	%		2,839		95.6	%		20.6	%		(9.7	%)			5.0	%		(15.5	%)		(10.7	%)		0.9	%		(2.1	%)
Denver		1,624		1.8	%		2,000		96.6	%		27.5	%		(0.6	%)			5.3	%		(3.0	%)		(2.5	%)		1.8	%		(4.0	%)

Total		76,335		100.0	%	$	2,588		95.5	%		21.3	%		(9.5	%)	(1)		3.6	%		(15.4	%)		(9.4	%)		(0.1	%)		(0.3	%)


(1)	With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues decreased 9.4% in the six months ended June 30, 2021 compared to the six months ended June 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 six months ended June 30, 2021.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics

For 76,335 Same Store Apartment Units

	New Lease Change (1)						Renewal Rate Achieved (1)						Blended Rate (1)
Markets/Metro Areas	Q2 2021			Q1 2021			Q2 2021			Q1 2021			Q2 2021			Q1 2021

Los Angeles		(0.2	%)		(7.6	%)		2.9	%		(0.2	%)		1.4	%		(4.0	%)
Orange County		8.8	%		0.1	%		5.3	%		3.0	%		6.7	%		1.7	%
San Diego		10.0	%		2.1	%		5.4	%		3.9	%		7.8	%		3.1	%
Subtotal – Southern California		2.1	%		(5.4	%)		3.6	%		0.9	%		2.9	%		(2.3	%)

San Francisco		(9.5	%)		(22.0	%)		(3.3	%)		(9.9	%)		(6.9	%)		(17.3	%)
Washington DC		(7.0	%)		(14.4	%)		(0.1	%)		(2.9	%)		(3.8	%)		(9.0	%)
New York		(12.9	%)		(28.3	%)		(2.0	%)		(9.5	%)		(7.8	%)		(20.7	%)
Seattle		(4.3	%)		(20.7	%)		(1.3	%)		(10.1	%)		(2.8	%)		(15.9	%)
Boston		(1.4	%)		(20.4	%)		0.7	%		(7.6	%)		(0.3	%)		(14.8	%)
Denver		3.9	%		(7.1	%)		6.6	%		3.5	%		5.1	%		(3.5	%)

Total		(5.3	%)		(17.7	%)		0.2	%		(5.2	%)		(2.7	%)		(12.2	%)

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

Equity Residential

Second Quarter 2021 vs. Second Quarter 2020 Total Same Store Operating Expenses Including 76,556 Same Store Apartment Units $ in thousands

	Q2 2021		Q2 2020		$ Change (1)			% Change			% of Q2 2021 Operating Expenses

Real estate taxes	$	88,250	$	87,556	$	694			0.8	%		43.9	%
On-site payroll		40,142		40,564		(422	)		(1.0	%)		19.9	%
Utilities		27,001		24,502		2,499			10.2	%		13.4	%
Repairs and maintenance		25,675		22,330		3,345			15.0	%		12.8	%
Insurance		6,808		6,270		538			8.6	%		3.4	%
Leasing and advertising		2,748		2,144		604			28.2	%		1.4	%
Other on-site operating expenses		10,583		10,554		29			0.3	%		5.2	%

Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	201,207	$	193,920	$	7,287			3.8	%		100.0	%

June YTD 2021 vs. June YTD 2020 Total Same Store Operating Expenses Including 76,335 Same Store Apartment Units $ in thousands

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

Real estate taxes	$	178,082	$	174,980	$	3,102			1.8	%		43.3	%
On-site payroll		82,689		83,137		(448	)		(0.5	%)		20.1	%
Utilities		56,575		51,786		4,789			9.2	%		13.8	%
Repairs and maintenance		51,107		45,472		5,635			12.4	%		12.4	%
Insurance		13,758		12,510		1,248			10.0	%		3.4	%
Leasing and advertising		5,522		4,453		1,069			24.0	%		1.3	%
Other on-site operating expenses		23,207		23,614		(407	)		(1.7	%)		5.7	%

Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	410,940	$	395,952	$	14,988			3.8	%		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 prior expectations due to lower rates and assessed values.

	On-site payroll – Improved sales and service staff utilization from various technology initiatives, lower than expected employee benefit-related costs and higher than usual staffing vacancies during the current period.

	Utilities – Increase driven by rate increases and higher usage of water, sewer, trash, electric and gas.

	Repairs and maintenance – Year-over-year increase was driven by low comparable period expense due to the pandemic along with greater snowfall on the East Coast and higher turnover expense from accelerated leasing in 2021.

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

	Leasing and advertising – Increase due primarily to low comparable period expense due to the pandemic, increased digital advertising and selective use of outside broker fees of approximately $0.4 million for the six months ended June 30, 2021, primarily in the New York market.

	Other on-site operating expenses – Year-over-year decrease primarily driven by lower ground lease costs due to a lease modification at one property.

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

Equity Residential

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

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

Secured	$	2,280,251		27.6	%		3.17	%		5.9
Unsecured		5,970,441		72.4	%		3.41	%		9.4

Total	$	8,250,692		100.0	%		3.34	%		8.4
Fixed Rate Debt:
Secured – Conventional	$	1,898,790		23.0	%		3.68	%		4.4
Unsecured – Public		5,338,671		64.7	%		3.75	%		10.5

Fixed Rate Debt		7,237,461		87.7	%		3.73	%		8.9

Floating Rate Debt:
Secured – Conventional		50,873		0.6	%		2.36	%		1.0
Secured – Tax Exempt		330,588		4.0	%		0.46	%		15.1
Unsecured – Revolving Credit Facility		—		—			—			3.3
Unsecured – Commercial Paper Program (2)		631,770		7.7	%		0.29	%		—

Floating Rate Debt		1,013,231		12.3	%		0.44	%		5.2

Total	$	8,250,692		100.0	%		3.34	%		8.4

(1)	See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)	At June 30, 2021, the weighted average maturity of commercial paper outstanding was 46 days. The weighted average amount outstanding for the six months ended June 30, 2021 was approximately $585.1 million.
Note:	The Company capitalized interest of approximately $8.2 million and $4.1 million during the six months ended June 30, 2021 and 2020, respectively. The Company capitalized interest of approximately $4.4 million and $2.3 million during the quarters ended June 30, 2021 and 2020, respectively.

Equity Residential

Debt Maturity Schedule as of June 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	$	3,752	$	632,000	(2)	$	635,752		7.6	%		3.27	%		0.29	%
2022		264,185		51,113			315,298		3.8	%		3.25	%		3.09	%

West Point, MS (39773)

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Equity Residential Reports Second Quarter 2021 Results