Equity Residential Reports Full Year 2021 Results and Provides Full Year 2022 Guidance

By: Equity Residential via Business Wire

February 01, 2022 at 16:15 PM EST

2022 Guidance Reflects Acceleration in Growth

Equity Residential (NYSE: EQR) today reported results for the quarter and year ended December 31, 2021. All per share results are reported as available to common shares/units on a diluted basis. For the fourth quarter of 2021, the Company reported earnings per share (EPS), Funds from Operations (FFO) per share and Normalized FFO per share of $1.40, $0.76 and $0.82, respectively. For the full year of 2021, the Company reported EPS, FFO per share and Normalized FFO per share of $3.54, $2.96 and $2.99, respectively.

“Robust demand in the fourth quarter drove high occupancy and the lowest resident Turnover in our history, allowing us to continue to increase rents. We expect operations and cash flows in 2022 to accelerate further as we write new leases at significantly higher current market rent levels and benefit from continuing deep demand. Our target affluent renter demographic remains drawn to the attractive lifestyle that our high quality urban and suburban properties and dedicated property teams provide,” said Mark J. Parrell, Equity Residential’s President and CEO. “Our capital allocation plan remains solidly on track as we actively buy and build in our expansion markets and the more desirable suburbs of our established markets where increasing numbers of affluent renters wish to live, work and play.”

Recent Highlights

Healthy demand (and in the case of EPS, higher property sale gains) drove a 105.9% increase in EPS, 4.1% increase in FFO per share and 7.9% increase in Normalized FFO per share during the fourth quarter of 2021 compared to the same period of 2020.
The Company reported a 4.9% increase in same store revenue for the fourth quarter of 2021 compared to the same period of 2020, driven by strong Physical Occupancy, a substantial improvement in pricing power and an increase in Non-Residential revenues.
The Company reported a 3.0% increase in same store expenses for the full year of 2021, reflecting the Company’s continued success in managing controllable expenses and modest growth in real estate taxes.
The Company reported same store Turnover of 9.4% for the fourth quarter of 2021 and 44.4% for the full year of 2021, both the lowest in the Company’s history, demonstrating the depth of demand from its residents.
The Company provided full year 2022 operating guidance that anticipates a 19.5%, 15.2%, and 15.4% increase in EPS, FFO per share and Normalized FFO per share, respectively, driven by expected total same store revenue growth of 9.0% at the midpoint (and in the case of EPS, higher expected property sale gains).
The Company continued to successfully execute on its capital allocation strategy during the fourth quarter of 2021 with the acquisition of six operating properties in its expansion markets for an aggregate purchase price of approximately $689.0 million and the disposition of four operating properties in its California and Washington, D.C. markets for an aggregate sale price of approximately $695.0 million. During the full year of 2021, the Company acquired 17 operating properties for an aggregate purchase price of approximately $1.7 billion and sold 14 operating properties for an aggregate sale price of approximately $1.7 billion.
The Company was named the Gold Nareit 2021 Diversity, Equity and Inclusion award recipient in recognition of the Company’s demonstration of a strong commitment to the advancement of diversity and inclusion both within the Company and in the REIT and publicly traded real estate industry.

Fourth Quarter and Full Year 2021 Results

The change in EPS for both the quarter and year ended December 31, 2021 compared to the same periods of 2020 is due primarily to higher property sale gains in the fourth quarter and year ended December 31, 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 year ended December 31, 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
	Fourth Quarter 2021 vs. Fourth Quarter 2020			Full Year 2021 vs. Full Year 2020
Residential same store Net Operating Income (NOI)	$	0.05		$	(0.33	)
Non-Residential same store NOI		0.01			0.06
2021 and 2020 transaction activity impact on NOI, net	–				(0.08	)
Interest expense, net		0.02			0.14
Corporate overhead ⁽¹⁾		(0.01	)		(0.03	)
Other items		(0.01	)		(0.03	)
Net	$	0.06		$	(0.27	)

(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.

Fourth Quarter and Full Year 2021 Same Store Residential 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 3.9% of total revenues for the year ended December 31, 2021. The table below reflects same store Residential only results.

	Fourth Quarter 2021 vs. Fourth Quarter 2020	Fourth Quarter 2021 vs. Third Quarter 2021	Full Year 2021 vs. Full Year 2020
Apartment Units	74,298	75,206	74,077
Physical Occupancy	96.6% vs. 94.2%	96.6% vs. 96.6%	96.1% vs. 95.0%

Revenues	4.3%	3.0%	(4.6%)
Expenses	1.8%	(3.0%)	2.8%
NOI	5.6%	6.1%	(8.1%)

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.

	Fourth Quarter 2021 vs. Fourth Quarter 2020			Fourth Quarter 2021 vs. Third Quarter 2021			Full Year 2021 vs. Full Year 2020
	% Change			% Change			% Change
Same Store Residential Revenues-
comparable period
Lease rates ⁽¹⁾		(0.2	%)		2.0	%		(5.0	%)
Leasing Concessions		0.2	%		0.7	%		(1.1	%)
Vacancy gain (loss)		2.5	%		0.0	%		1.3	%
Bad Debt, Net ⁽²⁾		1.9	%		0.4	%		0.4	%
Other ⁽³⁾		(0.1	%)		(0.1	%)		(0.2	%)
Same Store Residential Revenues-
current period		4.3	%		3.0	%		(4.6	%)

(1)		The decline in lease rates for the full year 2021 vs. full year 2020 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:

	Q3 2021	Q4 2021	January 2022 (1)
Physical Occupancy ⁽²⁾	96.7%	96.4%	96.6%
Percentage of Residents Renewing by quarter/month	57.4%	61.2%	61.0%

New Lease Change	10.1%	10.6%	13.4%
Renewal Rate Achieved	5.7%	10.7%	12.3%
Blended Rate	7.6%	10.7%	12.7%

(1)		January 2022 results are preliminary.
(2)		Physical Occupancy is as of month-end September for Q3 2021, month-end December for Q4 2021 and as of January 27th for January 2022.

Investment Activity and Portfolio Strategy

The Company continues to optimize its portfolio by allocating capital to desirable suburban locations within its established markets and through expansion into certain new markets that attract a renter demographic that values our exceptional product offering. In support of this strategy, the Company acquired six properties, consisting of 1,826 apartment units, during the fourth quarter of 2021 for an aggregate purchase price of approximately $689.0 million and a weighted average Acquisition Cap Rate of 3.7%. These properties are located in Austin, TX, Dallas/Ft. Worth, TX (2), Atlanta, GA, and Denver, CO (2). For the full year of 2021, the Company acquired 17 properties, consisting of 4,747 apartment units, for an aggregate purchase price of approximately $1.7 billion and a weighted average Acquisition Cap Rate of 3.8%. The average age of the properties acquired in 2021 was two years. Approximately $1.4 billion, or 82.0% of all acquisition activity in 2021, was in expansion markets.

The Company funded these acquisitions by selling older assets located within established markets that no longer met our long-term investment criteria. During the fourth quarter of 2021, the Company sold four properties consisting of 1,211 apartment units, for an aggregate sale price of approximately $695.0 million and a weighted average Disposition Yield of 3.6%, generating an Unlevered IRR of 12.1%. Two of the properties are located in suburban San Francisco, CA, one in suburban Los Angeles, CA and one in suburban Washington, D.C. During the full year of 2021, the Company sold 14 properties, consisting of 3,053 apartment units, for an aggregate sale price of approximately $1.7 billion and a weighted average Disposition Yield of 3.7%, generating an Unlevered IRR of 10.4%. The average age of the properties sold in 2021 was approximately 30 years.

Finally, the Company remains active in development, both directly and through its joint venture partners. During the fourth quarter of 2021, the Company completed the construction of Alcott, a 470-unit wholly owned apartment property in the urban center of Boston, MA for a total development cost of approximately $409.7 million and an expected stabilized Development Yield of 5.6%. Also during the fourth quarter, the Company entered into four unconsolidated joint ventures for the purpose of developing vacant land parcels into approximately 1,275 apartment units in Texas and Colorado. Three of the projects are related to the Company’s joint venture development program with Toll Brothers, Inc. During the full year of 2021, the Company completed three development projects, consisting of 824 apartment units, for a total cost of approximately $602.8 million and started four development projects, consisting of 1,241 apartment units, for a total anticipated cost of approximately $452.7 million.

First Quarter 2022 Guidance

The Company has established guidance ranges for the first quarter of 2022 EPS, FFO per share and Normalized FFO per share as listed below:

		Q1 2022 Guidance
EPS		$0.85 to $0.89
FFO per share		$0.75 to $0.79
Normalized FFO per share		$0.76 to $0.80

The difference between the fourth quarter 2021 actual EPS of $1.40 and the first quarter of 2022 EPS guidance midpoint of $0.87 is due primarily to lower expected property sale gains and the items described below.

The difference between the fourth quarter 2021 actual FFO of $0.76 per share and the first quarter of 2022 FFO guidance midpoint of $0.77 per share is due primarily to no impairment charges and the items described below.

The difference between the fourth quarter 2021 actual Normalized FFO of $0.82 per share and the first quarter of 2022 Normalized FFO guidance midpoint of $0.78 per share is due primarily to:

	Positive/(Negative) Impact
	First Quarter 2022 vs. Fourth Quarter 2021
Interest expense, net	$	(0.01	)
Corporate overhead		(0.03	)
Net	$	(0.04	)

Full Year 2022 Guidance

The Company has provided guidance for its full year 2022 same store operating performance as well as EPS, FFO per share and Normalized FFO per share as listed below:

Same Store (includes Residential and Non-Residential):
Physical Occupancy		96.5%
Revenue change		8.0% to 10.0%
Expense change		2.5% to 3.5%
NOI change		11.0% to 13.0%

EPS		$4.18 to $4.28
FFO per share		$3.36 to $3.46
Normalized FFO per share		$3.40 to $3.50

The difference between the Company’s full year 2021 actual EPS of $3.54 and the full year 2022 EPS guidance midpoint of $4.23 is due primarily to higher expected property sale gains, higher expected depreciation expense, lower expected non-operating asset gains and the items described below.

The difference between the Company’s full year 2021 actual FFO of $2.96 per share and the full year 2022 FFO guidance midpoint of $3.41 per share is due primarily to lower expected non-operating asset gains and the items described below.

The difference between the Company’s full year 2021 actual Normalized FFO of $2.99 per share and the full year 2022 Normalized FFO guidance midpoint of $3.45 per share is due primarily to:

	Positive/(Negative) Impact
	Full Year 2022 vs Full Year 2021
Same Store NOI	$	0.48
Lease-Up NOI		0.06
Interest expense, net		(0.04	)
Corporate overhead		(0.04	)
Net	$	0.46

Key assumptions underlying the full year 2022 guidance are outlined on page 27 of this release.

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. Equity Residential owns or has investments in 310 properties consisting of 80,407 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, February 2, 2022 at 10:00 a.m. CT. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

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

	Year Ended December 31,						Quarter Ended December 31,
	2021			2020			2021			2020
REVENUES
Rental income	$	2,463,997		$	2,571,705		$	645,130		$	613,435

EXPENSES
Property and maintenance		453,532			440,998			112,271			107,665
Real estate taxes and insurance		397,105			381,562			99,325			93,519
Property management		98,155			93,825			23,798			22,312
General and administrative		56,506			48,305			13,404			11,093
Depreciation		838,272			820,832			222,240			201,829
Total expenses		1,843,570			1,785,522			471,038			436,418

Net gain (loss) on sales of real estate properties		1,072,183			531,807			484,560			179,589
Impairment		(16,769	)		—			(16,769	)		—

Operating income		1,675,841			1,317,990			641,883			356,606

Interest and other income		25,666			5,935			373			1,929
Other expenses		(19,275	)		(17,510	)		(8,367	)		(9,186	)
Interest:
Expense incurred, net		(272,473	)		(365,073	)		(69,740	)		(116,724	)
Amortization of deferred financing costs		(8,737	)		(8,939	)		(2,565	)		(2,686	)
Income before income and other taxes, income (loss) from
investments in unconsolidated entities and net gain (loss)
on sales of land parcels		1,401,022			932,403			561,584			229,939
Income and other tax (expense) benefit		(915	)		(852	)		(236	)		(350	)
Income (loss) from investments in unconsolidated entities		(3,398	)		(3,284	)		(370	)		(839	)
Net gain (loss) on sales of land parcels		5			34,234			—			34,234
Net income		1,396,714			962,501			560,978			262,984
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(45,900	)		(34,010	)		(17,997	)		(9,386	)
Partially Owned Properties		(17,964	)		(14,855	)		(16,007	)		(742	)
Net income attributable to controlling interests		1,332,850			913,636			526,974			252,856
Preferred distributions		(3,090	)		(3,090	)		(772	)		(772	)
Net income available to Common Shares	$	1,329,760		$	910,546		$	526,202		$	252,084

Earnings per share – basic:
Net income available to Common Shares	$	3.56		$	2.45		$	1.40		$	0.68
Weighted average Common Shares outstanding		373,833			371,791			374,897			371,915

Earnings per share – diluted:
Net income available to Common Shares	$	3.54		$	2.45		$	1.40		$	0.68
Weighted average Common Shares outstanding		388,089			385,874			389,000			385,756

Distributions declared per Common Share outstanding	$	2.41		$	2.41		$	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)

	Year Ended December 31,						Quarter Ended December 31,
	2021			2020			2021			2020
Net income	$	1,396,714		$	962,501		$	560,978		$	262,984
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties		(17,964	)		(14,855	)		(16,007	)		(742	)
Preferred distributions		(3,090	)		(3,090	)		(772	)		(772	)
Net income available to Common Shares and Units		1,375,660			944,556			544,199			261,470

Adjustments:
Depreciation		838,272			820,832			222,240			201,829
Depreciation – Non-real estate additions		(4,277	)		(4,564	)		(1,049	)		(1,131	)
Depreciation – Partially Owned Properties		(3,673	)		(3,345	)		(997	)		(831	)
Depreciation – Unconsolidated Properties		2,487			2,454			620			616
Net (gain) loss on sales of unconsolidated entities - operating
assets		(1,304	)		(1,636	)		(1,300	)		(636	)
Net (gain) loss on sales of real estate properties		(1,072,183	)		(531,807	)		(484,560	)		(179,589	)
Noncontrolling Interests share of gain (loss) on sales
of real estate properties		15,650			11,655			15,650			—
FFO available to Common Shares and Units		1,150,632			1,238,145			294,803			281,728

Adjustments (see note for additional detail):
Impairment – non-operating assets		16,769			—			16,769			—
Write-off of pursuit costs		6,526			6,869			2,969			2,005
Debt extinguishment and preferred share redemption (gains)
losses		744			39,292			480			39,255
Non-operating asset (gains) losses		(22,283	)		(32,590	)		731			(33,612	)
Other miscellaneous items		8,976			4,652			4,456			5,166
Normalized FFO available to Common Shares and Units	$	1,161,364		$	1,256,368		$	320,208		$	294,542

FFO	$	1,153,722		$	1,241,235		$	295,575		$	282,500
Preferred distributions		(3,090	)		(3,090	)		(772	)		(772	)
FFO available to Common Shares and Units	$	1,150,632		$	1,238,145		$	294,803		$	281,728
FFO per share and Unit – basic	$	2.98		$	3.22		$	0.76		$	0.73
FFO per share and Unit – diluted	$	2.96		$	3.21		$	0.76		$	0.73

Normalized FFO	$	1,164,454		$	1,259,458		$	320,980		$	295,314
Preferred distributions		(3,090	)		(3,090	)		(772	)		(772	)
Normalized FFO available to Common Shares and Units	$	1,161,364		$	1,256,368		$	320,208		$	294,542
Normalized FFO per share and Unit – basic	$	3.01		$	3.27		$	0.83		$	0.77
Normalized FFO per share and Unit – diluted	$	2.99		$	3.26		$	0.82		$	0.76

Weighted average Common Shares and Units outstanding – basic		386,096			384,794			386,851			384,899
Weighted average Common Shares and Units outstanding – diluted		388,089			385,874			389,000			385,756

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)

	December 31,			December 31,
	2021			2020
ASSETS
Land	$	5,814,790		$	5,785,367
Depreciable property		22,370,811			20,920,654
Projects under development		24,307			411,134
Land held for development		62,998			86,170
Investment in real estate		28,272,906			27,203,325
Accumulated depreciation		(8,354,282	)		(7,859,657	)
Investment in real estate, net		19,918,624			19,343,668
Investments in unconsolidated entities		127,448			52,782
Cash and cash equivalents		123,832			42,591
Restricted deposits		236,404			57,137
Right-of-use assets		474,713			499,287
Other assets		288,220			291,426
Total assets	$	21,169,241		$	20,286,891

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,191,201		$	2,293,890
Notes, net		5,835,222			5,335,536
Line of credit and commercial paper		315,030			414,830
Accounts payable and accrued expenses		107,013			107,366
Accrued interest payable		69,510			65,896
Lease liabilities		312,335			329,130
Other liabilities		353,102			345,064
Security deposits		66,141			60,480
Distributions payable		233,502			232,262
Total liabilities		9,483,056			9,184,454

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		498,977			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 December 31, 2021 and December 31, 2020		37,280			37,280
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 375,527,195 shares issued
and outstanding as of December 31, 2021 and 372,302,000
shares issued and outstanding as of December 31, 2020		3,755			3,723
Paid in capital		9,121,122			9,128,599
Retained earnings		1,827,063			1,399,715
Accumulated other comprehensive income (loss)		(34,272	)		(43,666	)
Total shareholders’ equity		10,954,948			10,525,651
Noncontrolling Interests:
Operating Partnership		214,094			233,162
Partially Owned Properties		18,166			4,673
Total Noncontrolling Interests		232,260			237,835
Total equity		11,187,208			10,763,486
Total liabilities and equity	$	21,169,241		$	20,286,891

Equity Residential Portfolio Summary As of December 31, 2021

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

Established Markets:
Los Angeles		66		15,259		18.6	%	$	2,673
Orange County		13		4,028		5.3	%		2,427
San Diego		11		2,706		3.7	%		2,598
Subtotal – Southern California		90		21,993		27.6	%		2,619

San Francisco		44		11,830		16.0	%		2,957
Washington DC		48		14,851		15.5	%		2,358
New York		36		9,343		13.7	%		3,597
Boston		27		7,170		11.4	%		3,049
Seattle		46		9,525		11.0	%		2,332

Expansion Markets:
Denver		8		2,498		2.6	%		2,197
Atlanta		4		1,215		1.0	%		1,935
Dallas/Ft. Worth		4		1,241		0.8	%		1,868
Austin		3		741		0.4	%		1,694

Total		310		80,407		100.0	%	$	2,696

	Properties		Apartment Units

Wholly Owned Properties		294		76,861
Partially Owned Properties – Consolidated		16		3,546

		310		80,407
Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

Equity Residential

Portfolio Rollforward Q4 2021 ($ in thousands)

		Properties			Apartment Units			Purchase Price			Acquisition Cap Rate

	9/30/2021		307			79,322

Acquisitions:
Consolidated Rental Properties			5			1,405		$	564,954			3.6	%
Consolidated Rental Properties – Not Stabilized (A)			1			421		$	124,000			3.9	%

								Sales Price			Disposition Yield

Dispositions:
Consolidated Rental Properties			(4	)		(1,211	)	$	(694,975	)		(3.6	%)

Completed Developments – Consolidated			1			470

	12/31/2021		310			80,407

Portfolio Rollforward 2021 ($ in thousands)

		Properties			Apartment Units			Purchase Price			Acquisition Cap Rate

12/31/2020			304			77,889

Acquisitions:
Consolidated Rental Properties			13			3,533		$	1,249,679			3.7	%
Consolidated Rental Properties – Not Stabilized (A)			4			1,214		$	459,700			4.0	%

								Sales Price			Disposition Yield

Dispositions:
Consolidated Rental Properties			(14	)		(3,053	)	$	(1,716,775	)		(3.7	%)

Completed Developments – Consolidated			3			824

	12/31/2021		310			80,407

(A)

The Company acquired four properties during the year ended December 31, 2021, including a property in the Dallas/Ft. Worth market in the fourth 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.

Equity Residential

Fourth Quarter 2021 vs. Fourth Quarter 2020 Same Store Results/Statistics Including 74,298 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

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

Revenues	$	587,533		(1)	4.3%	$	23,968	(2)	21.0%	$	611,501	4.9%	Revenues	$	563,146		$	19,811	$	582,957
Expenses	$	192,359			1.8%	$	6,251		13.5%	$	198,610	2.1%	Expenses	$	188,925		$	5,509	$	194,434
NOI	$	395,174			5.6%	$	17,717		23.9%	$	412,891	6.3%	NOI	$	374,221		$	14,302	$	388,523

Average Rental Rate	$	2,729			1.6%								Average Rental Rate	$	2,685
Physical Occupancy		96.6	%		2.4%								Physical Occupancy		94.2	%
Turnover		9.4	%		(4.0%)								Turnover		13.4	%

Fourth Quarter 2021 vs. Third Quarter 2021 Same Store Results/Statistics Including 75,206 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

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

Revenues	$	592,709		(1)	3.0%	$	24,112	(2)	6.4%	$	616,821	3.1%	Revenues	$	575,689		$	22,670	$	598,359
Expenses	$	194,200			(3.0%)	$	6,290		5.5%	$	200,490	(2.7%)	Expenses	$	200,116		$	5,964	$	206,080
NOI	$	398,509			6.1%	$	17,822		6.7%	$	416,331	6.1%	NOI	$	375,573		$	16,706	$	392,279

Average Rental Rate	$	2,720			2.9%								Average Rental Rate	$	2,643
Physical Occupancy		96.6	%		0.0%								Physical Occupancy		96.6	%
Turnover		9.4	%		(4.4%)								Turnover		13.8	%

2021 vs. 2020 Same Store Results/Statistics Including 74,077 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

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

Revenues	$	2,253,068		(1)	(4.6%)	$	89,189	(2)	40.1%	$	2,342,257	(3.4%)	Revenues	$	2,361,359		$	63,666	$	2,425,025
Expenses	$	779,729			2.8%	$	24,266		9.7%	$	803,995	3.0%	Expenses	$	758,257		$	22,124	$	780,381
NOI	$	1,473,339			(8.1%)	$	64,923		56.3%	$	1,538,262	(6.5%)	NOI	$	1,603,102		$	41,542	$	1,644,644

Average Rental Rate	$	2,640			(5.6%)								Average Rental Rate	$	2,797
Physical Occupancy		96.1	%		1.1%								Physical Occupancy		95.0	%
Turnover		44.4	%		(8.5%)								Turnover		52.9	%

(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 primarily driven by the following:
		• Fourth Quarter 2021 vs. Fourth Quarter 2020 – Higher parking income and lower bad debt.
		• Fourth Quarter 2021 vs. Third Quarter 2021 – Lower deferral/abatement of rents and higher parking income.
		• 2021 vs. 2020 – The write-off of Non-Residential straight-line lease receivables in 2020 and lower bad debt in 2021.

Equity Residential

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

	Fourth Quarter 2021 vs. Fourth Quarter 2020						Fourth Quarter 2021 vs. Third Quarter 2021						2021 vs. 2020
	74,298 Same Store Apartment Units						75,206 Same Store Apartment Units						74,077 Same Store Apartment Units
	Q4 2021			Q4 2020			Q4 2021			Q3 2021			2021			2020
Same Store Residential Revenues (GAAP Basis)	$	587,533		$	563,146		$	592,709		$	575,689		$	2,253,068		$	2,361,359
Leasing Concessions amortized		7,020			8,254			7,092			10,955			42,377			15,055
Leasing Concessions granted		(339	)		(16,630	)		(352	)		(2,221	)		(27,530	)		(33,085	)
Same Store Residential Revenues with Leasing
Concessions on a cash basis	$	594,214		$	554,770		$	599,449		$	584,423		$	2,267,915		$	2,343,329

% change - GAAP revenue		4.3	%					3.0	%					(4.6	%)

% change - cash revenue		7.1	%					2.6	%					(3.2	%)

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

Same Store Resident/Tenant Accounts Receivable Balances Including 74,077 Same Store Apartment Units $ in thousands

	Residential							Non-Residential
Balance Sheet (Other assets):	December 31, 2021				September 30, 2021			December 31, 2021			September 30, 2021
Resident/tenant accounts receivable balances	$	37,163			$	42,067		$	3,192		$	4,064
Allowance for doubtful accounts		(32,513	)			(36,656	)		(2,365	)		(3,442	)
Net receivable balances	$	4,650		(1)	$	5,411		$	827		$	622

Straight-line receivable balances	$	4,771		(2)	$	11,438		$	12,658		$	12,698

(1)		The Company held same store Residential security deposits approximating 48.5% of the net receivable balance at December 31, 2021.
(2)		Total same store Residential Leasing Concessions granted in the fourth quarter of 2021 were approximately $0.3 million. The straight-line receivable balance of $4.8 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in 2022.

Same Store Residential Bad Debt Including 74,077 Same Store Apartment Units $ in thousands

Income Statement (Rental income):	Q4 2021			Q3 2021			Q4 2020			2021			2020
Bad Debt, Net (1)	$	1,612		$	3,978		$	12,687		$	30,745		$	40,759
% of Same Store Residential Revenues		0.3	%		0.7	%		2.3	%		1.4	%		1.7	%

(1)

Bad Debt, Net benefited from additional resident payments due to governmental rental assistance programs of approximately $16.3 million, $13.5 million and $34.7 million during the fourth quarter of 2021, third quarter of 2021 and the year ended December 31, 2021, respectively. Similar to prior quarters, the Company collected approximately 97% of its expected Residential revenues in the fourth quarter of 2021.

Equity Residential Fourth Quarter 2021 vs. Fourth Quarter 2020 Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas	Apartment Units		Q4 2021 % of Actual NOI			Q4 2021 Average Rental Rate		Q4 2021 Weighted Average Physical Occupancy%			Q4 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		15,259		21.3	%	$	2,673		96.9	%		9.3	%		11.1	%			(1.0	%)		17.0	%		9.8	%		1.1	%		(4.3	%)
Orange County		4,028		5.7	%		2,427		97.7	%		7.4	%		10.2	%			0.7	%		13.1	%		9.2	%		0.9	%		(3.3	%)
San Diego		2,706		4.1	%		2,598		97.2	%		8.6	%		9.4	%			(0.4	%)		12.5	%		9.5	%		(0.1	%)		(2.8	%)
Subtotal – Southern California		21,993		31.1	%		2,619		97.1	%		8.9	%		10.8	%			(0.7	%)		15.6	%		9.7	%		1.0	%		(3.9	%)

San Francisco		11,630		17.7	%		2,946		96.4	%		10.7	%		(0.2	%)			2.4	%		(1.3	%)		(4.4	%)		4.1	%		(5.4	%)
Washington DC		14,322		16.6	%		2,348		97.0	%		9.0	%		0.0	%			4.9	%		(2.2	%)		(1.7	%)		1.6	%		(3.8	%)
New York		9,343		12.5	%		3,597		97.4	%		6.9	%		6.9	%			2.3	%		11.8	%		(1.7	%)		7.8	%		(4.9	%)
Seattle		8,956		10.5	%		2,340		95.0	%		11.5	%		(0.7	%)			1.9	%		(1.8	%)		(1.2	%)		0.5	%		(2.6	%)
Boston		6,430		9.7	%		2,976		95.8	%		9.4	%		2.7	%			1.5	%		3.2	%		0.6	%		1.9	%		(3.5	%)
Denver		1,624		1.9	%		2,170		96.5	%		14.3	%		10.0	%			(4.4	%)		16.0	%		8.3	%		1.4	%		(1.6	%)

Total		74,298		100.0	%	$	2,729		96.6	%		9.4	%		4.3	%	(1)		1.8	%		5.6	%		1.6	%		2.4	%		(4.0	%)

(1)		With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 7.1% in the fourth quarter of 2021 compared to the fourth 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 96.1% of total revenues for the year ended December 31, 2021.

Equity Residential Fourth Quarter 2021 vs. Third Quarter 2021 Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Quarter
Markets/Metro Areas	Apartment Units		Q4 2021 % of Actual NOI			Q4 2021 Average Rental Rate		Q4 2021 Weighted Average Physical Occupancy%			Q4 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		15,259		21.1	%	$	2,673		96.9	%		9.3	%		5.2	%			(4.0	%)		9.4	%		5.5	%		(0.4	%)		(2.4	%)
Orange County		4,028		5.7	%		2,427		97.7	%		7.4	%		1.4	%			(6.7	%)		3.8	%		1.9	%		(0.4	%)		(3.6	%)
San Diego		2,706		4.0	%		2,598		97.2	%		8.6	%		1.1	%			(5.5	%)		3.1	%		1.8	%		(0.6	%)		(5.4	%)
Subtotal – Southern California		21,993		30.8	%		2,619		97.1	%		8.9	%		4.0	%			(4.5	%)		7.5	%		4.4	%		(0.4	%)		(3.0	%)

San Francisco		11,630		17.5	%		2,946		96.4	%		10.7	%		2.6	%			(3.1	%)		5.2	%		1.5	%		1.1	%		(3.6	%)
Washington DC		14,535		16.7	%		2,343		97.0	%		9.0	%		0.9	%			(4.2	%)		3.6	%		0.5	%		0.4	%		(5.7	%)
New York		9,343		12.4	%		3,597		97.4	%		6.9	%		4.0	%			1.4	%		6.7	%		3.3	%		0.6	%		(5.3	%)
Seattle		9,331		10.8	%		2,326		95.0	%		11.5	%		2.4	%			(5.3	%)		6.1	%		3.6	%		(1.1	%)		(2.9	%)
Boston		6,430		9.6	%		2,976		95.8	%		9.4	%		3.3	%			(4.3	%)		7.1	%		3.3	%		0.0	%		(7.6	%)
Denver		1,624		1.9	%		2,170		96.5	%		14.3	%		3.4	%			(11.6	%)		9.7	%		3.7	%		(0.4	%)		(4.1	%)
Other Expansion Markets		320		0.3	%		1,906		96.5	%		6.3	%		(2.5	%)			12.5	%		(11.1	%)		(2.1	%)		(0.4	%)		(7.8	%)

Total		75,206		100.0	%	$	2,720		96.6	%		9.4	%		3.0	%	(1)		(3.0	%)		6.1	%		2.9	%		0.0	%		(4.4	%)

(1)		With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 2.6% in the fourth quarter of 2021 compared to the third 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 96.1% of total revenues for the year ended December 31, 2021.

Equity Residential 2021 vs. 2020 Same Store Residential Results/Statistics by Market

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

Los Angeles		15,259		20.5	%	$	2,501		96.6	%		41.5	%		0.3	%			0.9	%		0.1	%		(0.7	%)		1.0	%		(10.4	%)
Orange County		4,028		5.7	%		2,318		97.7	%		34.6	%		4.0	%			1.8	%		4.6	%		2.9	%		1.0	%		(10.7	%)
San Diego		2,706		4.1	%		2,484		97.6	%		43.1	%		5.3	%			1.2	%		6.6	%		4.6	%		0.6	%		(5.9	%)
Subtotal – Southern California		21,993		30.3	%		2,465		96.9	%		40.4	%		1.5	%			1.0	%		1.8	%		0.5	%		0.9	%		(9.9	%)

San Francisco		11,630		18.0	%		2,900		95.1	%		48.2	%		(10.8	%)			3.4	%		(15.9	%)		(11.3	%)		0.6	%		(8.7	%)
Washington DC		14,322		17.5	%		2,332		96.5	%		45.3	%		(3.5	%)			4.2	%		(6.9	%)		(4.3	%)		0.9	%		(5.0	%)
New York		9,343		12.1	%		3,497		95.2	%		37.5	%		(7.4	%)			2.7	%		(16.4	%)		(9.6	%)		2.4	%		(13.8	%)
Seattle		8,819		10.6	%		2,274		95.6	%		50.6	%		(6.9	%)			4.1	%		(11.3	%)		(7.1	%)		0.2	%		(4.0	%)
Boston		6,346		9.6	%		2,883		95.7	%		47.0	%		(5.4	%)			3.4	%		(9.1	%)		(7.0	%)		1.5	%		(9.3	%)
Denver		1,624		1.9	%		2,066		96.6	%		60.2	%		3.3	%			2.0	%		3.8	%		1.4	%		1.7	%		(9.8	%)

Total		74,077		100.0	%	$	2,640		96.1	%		44.4	%		(4.6	%)	(1)		2.8	%		(8.1	%)		(5.6	%)		1.1	%		(8.5	%)

(1)		With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues decreased 3.2% in the year ended December 31, 2021 compared to the year ended December 31, 2020. See page 12 for additional detail and reconciliations.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.1% of total revenues for the year ended December 31, 2021.

Equity Residential Same Store Residential Net Effective Lease Pricing Statistics For 74,077 Same Store Apartment Units

	New Lease Change (1)						Renewal Rate Achieved (1)						Blended Rate (1)
Markets/Metro Areas	Q4 2021			Q3 2021			Q4 2021			Q3 2021			Q4 2021			Q3 2021

Southern California		13.4	%		13.6	%		7.1	%		6.1	%		9.4	%		9.1	%
San Francisco		3.6	%		3.0	%		12.4	%		6.0	%		8.1	%		4.5	%
Washington DC		6.0	%		4.0	%		6.8	%		2.2	%		6.5	%		3.0	%
New York		20.2	%		13.8	%		14.5	%		8.0	%		16.6	%		10.4	%
Seattle		11.0	%		15.7	%		16.9	%		4.3	%		14.1	%		8.9	%
Boston		12.6	%		13.3	%		14.6	%		6.4	%		13.8	%		9.7	%
Denver		12.4	%		16.1	%		12.8	%		8.0	%		12.6	%		12.0	%

Total		10.6	%		10.1	%		10.7	%		5.7	%		10.7	%		7.6	%

(1) See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions. See page 3 for January 2022 preliminary data.

Equity Residential

Fourth Quarter 2021 vs. Fourth Quarter 2020 Total Same Store Operating Expenses Including 74,298 Same Store Apartment Units $ in thousands

	Q4 2021		Q4 2020		$ Change (1)			% Change			% of Q4 2021 Operating Expenses

Real estate taxes	$	86,597	$	85,588	$	1,009			1.2	%		43.6	%
On-site payroll		38,395		39,281		(886	)		(2.3	%)		19.3	%
Utilities		29,574		26,222		3,352			12.8	%		14.9	%
Repairs and maintenance		23,386		24,124		(738	)		(3.1	%)		11.8	%
Insurance		6,645		6,037		608			10.1	%		3.3	%
Leasing and advertising		2,731		3,069		(338	)		(11.0	%)		1.4	%
Other on-site operating expenses		11,282		10,113		1,169			11.6	%		5.7	%

Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	198,610	$	194,434	$	4,176			2.1	%		100.0	%

2021 vs. 2020 Total Same Store Operating Expenses Including 74,077 Same Store Apartment Units $ in thousands

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

Real estate taxes	$	347,339	$	342,090	$	5,249			1.5	%		43.2	%
On-site payroll		160,798		162,387		(1,589	)		(1.0	%)		20.0	%
Utilities		113,821		103,612		10,209			9.9	%		14.2	%
Repairs and maintenance		99,472		94,239		5,233			5.6	%		12.4	%
Insurance		26,513		24,086		2,427			10.1	%		3.3	%
Leasing and advertising		10,647		10,369		278			2.7	%		1.3	%
Other on-site operating expenses		45,405		43,598		1,807			4.1	%		5.6	%

Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	803,995	$	780,381	$	23,614			3.0	%		100.0	%

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

		Real estate taxes – Increase due to modest rate growth, partially offset by reduced assessed values in certain locations.

		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 – Quarter-over-quarter decrease due primarily to significantly lower resident turnover than in the prior year. Year-over-year increase primarily driven by low comparable period expense growth due to the pandemic along with increases in minimum wage on contract services and maintenance repairs 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 December 31, 2021 ($ in thousands)

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

Secured	$	2,191,201		26.3	%		3.18	%		4.8
Unsecured		6,150,252		73.7	%		3.39	%		9.5

Total	$	8,341,453		100.0	%		3.33	%		8.2
Fixed Rate Debt:
Secured – Conventional	$	1,896,472		22.8	%		3.66	%		4.0
Unsecured – Public		5,835,222		69.9	%		3.65	%		10.0

Fixed Rate Debt		7,731,694		92.7	%		3.65	%		8.4

Floating Rate Debt:
Secured – Conventional		59,890		0.7	%		2.51	%		0.5
Secured – Tax Exempt

West Point, MS (39773)

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Equity Residential Reports Full Year 2021 Results and Provides Full Year 2022 Guidance