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Equity Residential Reports Second Quarter 2023 Results

By: Equity Residential via Business Wire

July 27, 2023 at 16:15 PM EDT

Guidance Updated as Coastal Markets Experience Continued Strong Demand and Limited New Supply

Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2023.

Second Quarter 2023 Results

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


	Quarter Ended June 30,
	2023		2022		$ Change			% Change
Earnings Per Share (EPS)	$	0.37	$	0.59	$	(0.22	)		(37.3	%)
Funds from Operations (FFO) per share	$	0.93	$	0.89	$	0.04			4.5	%
Normalized FFO (NFFO) per share	$	0.94	$	0.89	$	0.05			5.6	%


	Six Months Ended June 30,
	2023		2022		$ Change		% Change
Earnings Per Share (EPS)	$	0.92	$	0.78	$	0.14		17.9	%
Funds from Operations (FFO) per share	$	1.78	$	1.66	$	0.12		7.2	%
Normalized FFO (NFFO) per share	$	1.82	$	1.66	$	0.16		9.6	%

“Same store revenue performance remains strong and in line with our May 2023 guidance increase. The supply picture in the coastal markets where we predominantly operate remains favorable, demand is steady and we see continued progress in mitigating delinquency in Southern California,” said Mark J. Parrell, Equity Residential’s President and CEO. “We also are pleased to again update our guidance as a result of pending favorable refinancing activity as well as second half same store expenses that we anticipate will be lower than previously expected.”

Recent Highlights

Same store revenue increased 5.5% for the second quarter of 2023 compared to the second quarter of 2022. The Company increased its 2023 annual same store revenue growth guidance midpoint to 5.875% in May 2023.
Same store expense growth for the second quarter of 2023 compared to the second quarter of 2022 was 5.5%. The Company expects lower same store expense growth in the second half of the year and has lowered its full year same store expense guidance midpoint down 25 basis points to 4.25% from 4.5%.
The Company lowered its EPS guidance and increased its FFO and Normalized FFO per share guidance as described on page 2.
In July 2023, the Company locked the interest rate on secured loans totaling $530.0 million, which, subject to customary conditions, are anticipated to close in September 2023. After the effect of the Company’s hedges, the economic rate on these ten-year loans will be approximately 4.7%. The proceeds from these loans will be used, along with funding from the Company’s Commercial Paper Program, to paydown the $800.0 million secured debt pool that matures in November 2023 and carries an interest rate of 4.21%. After this paydown, the Company will have no significant debt maturities, other than commercial paper, until June 2025.
During the second quarter of 2023, the Company began the lease up of its new 312-unit development in Washington, D.C. The property is expected to stabilize in the third quarter of 2024 at a Development Yield of 5.7%.

Full Year 2023 Guidance

The Company has revised its guidance for its full year 2023 same store operating performance, EPS, FFO per share and Normalized FFO per share as listed below:

	Revised	Previous (1)	Change at Midpoint
Same Store (includes Residential and Non-Residential):
Physical Occupancy	96.0%	96.0%	0.0%
Revenue change	5.5% to 6.25%	5.5% to 6.25%	0.0%
Expense change	4.0% to 4.5%	4.0% to 5.0%	(0.25%)
Net Operating Income (NOI) change	6.3% to 7.0%	6.0% to 7.0%	0.15%

EPS	$1.95 to $2.01	$2.02 to $2.12	$(0.09)
FFO per share	$3.72 to $3.78	$3.69 to $3.79	$0.01
Normalized FFO per share	$3.77 to $3.83	$3.73 to $3.83	$0.02

(1) Represents the updated guidance provided in the Company's May 30, 2023 press release.

The change in the full year 2023 EPS guidance range is due primarily to higher expected depreciation expense, lower expected property sale gains and the items described below.

The change in the full year 2023 FFO per share guidance range is due primarily to higher expected other expenses and the items described below.

The change in the full year 2023 Normalized FFO per share guidance range is due primarily to:

	Positive/(Negative) Impact
	Revised Full Year 2023 vs. Previous Full Year 2023
Residential same store NOI	$	0.01
Interest expense, net		0.02
Other items		(0.01	)
Net	$	0.02

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 29 through 34 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 31 and 32 of this release.

Results Per Share

The changes in EPS for the quarter and six months ended June 30, 2023 compared to the same periods of 2022 are due primarily to lower property sale gains and lower depreciation expense in the current period, the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in FFO for the quarter and six months ended June 30, 2023 compared to the same periods of 2022 are due primarily to the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in Normalized FFO are due primarily to:

	Positive/(Negative) Impact
	Second Quarter 2023 vs. Second Quarter 2022			June YTD 2023 vs. June YTD 2022
Residential same store NOI	$	0.06		$	0.17
Lease-Up NOI		0.01			0.02
2023 and 2022 transaction activity impact on NOI, net		(0.01	)		(0.02	)
Interest expense, net		0.01			0.03
Corporate overhead ⁽¹⁾		(0.02	)		(0.01	)
Other items ⁽²⁾	–				(0.03	)
Net	$	0.05		$	0.16

(1)		Corporate overhead includes property management and general and administrative expenses.
(2)		Primarily represents the negative impact from property damage associated with the California rain storms that occurred earlier this year.

Same Store Results

The following table shows the total same store results for the periods presented.

	Second Quarter 2023 vs. Second Quarter 2022	Second Quarter 2023 vs. First Quarter 2023	June YTD 2023 vs. June YTD 2022
Apartment Units	77,545	78,531	76,952
Physical Occupancy	95.9% vs. 96.7%	95.9% vs. 95.9%	95.9% vs. 96.6%

Revenues	5.5%	1.7%	7.3%
Expenses	5.5%	(4.3%)	6.4%
NOI	5.4%	4.7%	7.7%

On page 11 of this release, the Company has provided a breakout of Residential and Non-Residential same store results with definitions that can be found on page 33 of this release. Non-Residential operations account for approximately 3.8% of total revenues for the six months ended June 30, 2023.

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.

	Second Quarter 2023 vs. Second Quarter 2022			Second Quarter 2023 vs. First Quarter 2023			June YTD 2023 vs. June YTD 2022
	% Change			% Change			% Change
Same Store Residential Revenues-
comparable period
Lease rates		7.3	%		1.1	%		8.2	%
Leasing Concessions		(0.1	%)		(0.1	%)		0.1	%
Vacancy gain (loss)		(0.9	%)		(0.1	%)		(0.8	%)
Bad Debt, Net ⁽¹⁾		(1.6	%)		0.3	%		(0.9	%)
Other ⁽²⁾		0.8	%		0.6	%		0.7	%
Same Store Residential Revenues-
current period		5.5	%		1.8	%		7.3	%

(1)		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. Comparable period changes in quarterly Bad Debt, Net will be volatile throughout 2023 primarily due to the timing of governmental rental assistance received in 2022. See page 13 for more detail.
(2)		Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

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.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties (for 76,952 same store apartment units):

	July 2023 (1)	Q2 2023	Q1 2023
Physical Occupancy	95.8%	95.9%	95.9%
Percentage of Residents Renewing by quarter/month	54.0%	57.0%	59.0%

New Lease Change	2.2%	2.3%	1.3%
Renewal Rate Achieved	5.9%	5.9%	6.1%
Blended Rate	4.2%	4.3%	3.9%

(1) July 2023 results are preliminary.

Investment Activity

The Company acquired two operating properties during the second quarter of 2023 - a recently completed 262-unit apartment property in Atlanta, which is currently in lease up, for approximately $78.6 million at a stabilized Acquisition Cap Rate of 6.6% (5.7% when removing certain real estate tax benefits that will reduce over time) and a 287-unit property in suburban Denver built in 2022, for approximately $108.0 million at an Acquisition Cap Rate of 5.0%. The Company did not acquire any properties during the first quarter of 2023.

The Company did not sell any properties during the second quarter of 2023. During the first quarter of 2023, the Company sold a small portfolio of seven properties in Los Angeles with an average age of 25 years, consisting of 247 apartment units, for an aggregate sale price of approximately $135.3 million at a weighted average Disposition Yield of 5.3%, generating an Unlevered IRR of 8.7%.

Capital Markets Activity

In July 2023, the Company locked the interest rate on secured loans totaling $530.0 million, which, subject to customary conditions, are anticipated to close in September 2023. After the effect of the Company’s hedges, the economic rate on these ten-year loans will be approximately 4.7%. The proceeds from these loans will be used, along with funding from the Company’s Commercial Paper Program, to paydown the $800.0 million secured debt pool that matures in November 2023 and carries an interest rate of 4.21%. After this paydown, the Company will have no significant debt maturities, other than commercial paper supported by its revolving credit facility due in 2027, until June 2025.

Third Quarter 2023 Guidance

The Company has established guidance ranges for the third quarter of 2023 EPS, FFO per share and Normalized FFO per share as listed below:

		Q3 2023 Guidance
EPS		$0.59 to $0.63
FFO per share		$0.94 to $0.98
Normalized FFO per share		$0.95 to $0.99

The difference between the second quarter of 2023 actual EPS of $0.37 and the third quarter of 2023 EPS guidance midpoint of $0.61 is due primarily to higher expected property sale gains and the items described below.

The difference between the second quarter of 2023 actual FFO of $0.93 per share and the third quarter of 2023 FFO guidance midpoint of $0.96 per share is due primarily to the items described below.

The difference between the second quarter of 2023 actual Normalized FFO of $0.94 per share and the third quarter of 2023 Normalized FFO guidance midpoint of $0.97 per share is due primarily to:

	Positive/(Negative) Impact
	Third Quarter 2023 vs. Second Quarter 2023
Residential same store NOI	$	0.01
Corporate overhead		0.02
Net	$	0.03

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 affluent long-term renters. Equity Residential owns or has investments in 304 properties consisting of 80,212 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, government regulations and competition. These and 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, Friday, July 28, 2023 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)

	Six Months Ended June 30,						Quarter Ended June 30,
	2023			2022			2023			2022
REVENUES
Rental income	$	1,422,397		$	1,340,378		$	717,309		$	687,030

EXPENSES
Property and maintenance		262,350			241,229			124,771			116,355
Real estate taxes and insurance		209,749			202,538			103,080			101,850
Property management		62,145			57,306			30,679			26,559
General and administrative		35,041			33,661			18,876			16,423
Depreciation		437,185			453,767			221,355			223,806
Total expenses		1,006,470			988,501			498,761			484,993

Net gain (loss) on sales of real estate properties		100,122			107,795			(87	)		107,897

Operating income		516,049			459,672			218,461			309,934

Interest and other income		3,669			4,124			2,131			596
Other expenses		(15,559	)		(5,436	)		(6,564	)		(2,380	)
Interest:
Expense incurred, net		(131,991	)		(144,681	)		(65,590	)		(71,889	)
Amortization of deferred financing costs		(3,996	)		(4,201	)		(2,017	)		(2,124	)
Income before income and other taxes, income (loss) from
investments in unconsolidated entities and net gain (loss)
on sales of land parcels		368,172			309,478			146,421			234,137
Income and other tax (expense) benefit		(634	)		(573	)		(336	)		(291	)
Income (loss) from investments in unconsolidated entities		(2,605	)		(2,429	)		(1,223	)		(1,168	)
Net income		364,933			306,476			144,862			232,678
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(11,613	)		(10,027	)		(4,554	)		(7,633	)
Partially Owned Properties		(2,082	)		(1,583	)		(1,105	)		(944	)
Net income attributable to controlling interests		351,238			294,866			139,203			224,101
Preferred distributions		(1,545	)		(1,545	)		(773	)		(773	)
Net income available to Common Shares	$	349,693		$	293,321		$	138,430		$	223,328

Earnings per share – basic:
Net income available to Common Shares	$	0.92		$	0.78		$	0.37		$	0.59
Weighted average Common Shares outstanding		378,492			375,640			378,642			375,769

Earnings per share – diluted:
Net income available to Common Shares	$	0.92		$	0.78		$	0.37		$	0.59
Weighted average Common Shares outstanding		391,063			389,463			391,187			389,363

Distributions declared per Common Share outstanding	$	1.325		$	1.25		$	0.6625		$	0.625

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

	Six Months Ended June 30,						Quarter Ended June 30,
	2023			2022			2023			2022
Net income	$	364,933		$	306,476		$	144,862		$	232,678
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties		(2,082	)		(1,583	)		(1,105	)		(944	)
Preferred distributions		(1,545	)		(1,545	)		(773	)		(773	)
Net income available to Common Shares and Units		361,306			303,348			142,984			230,961

Adjustments:
Depreciation		437,185			453,767			221,355			223,806
Depreciation – Non-real estate additions		(2,259	)		(2,114	)		(1,103	)		(1,062	)
Depreciation – Partially Owned Properties		(1,055	)		(1,554	)		(510	)		(661	)
Depreciation – Unconsolidated Properties		1,226			1,240			594			620
Net (gain) loss on sales of unconsolidated entities - operating
assets		—			(9	)		—			—
Net (gain) loss on sales of real estate properties		(100,122	)		(107,795	)		87			(107,897	)
FFO available to Common Shares and Units		696,281			646,883			363,407			345,767

Adjustments (see note for additional detail):
Write-off of pursuit costs		1,993			2,515			661			1,052
Debt extinguishment and preferred share redemption (gains)
losses		47			469			47			469
Non-operating asset (gains) losses		1,031			(1,330	)		317			312
Other miscellaneous items		11,343			(185	)		5,051			186
Normalized FFO available to Common Shares and Units	$	710,695		$	648,352		$	369,483		$	347,786

FFO	$	697,826		$	648,428		$	364,180		$	346,540
Preferred distributions		(1,545	)		(1,545	)		(773	)		(773	)
FFO available to Common Shares and Units	$	696,281		$	646,883		$	363,407		$	345,767
FFO per share and Unit – basic	$	1.79		$	1.67		$	0.93		$	0.89
FFO per share and Unit – diluted	$	1.78		$	1.66		$	0.93		$	0.89

Normalized FFO	$	712,240		$	649,897		$	370,256		$	348,559
Preferred distributions		(1,545	)		(1,545	)		(773	)		(773	)
Normalized FFO available to Common Shares and Units	$	710,695		$	648,352		$	369,483		$	347,786
Normalized FFO per share and Unit – basic	$	1.82		$	1.67		$	0.95		$	0.90
Normalized FFO per share and Unit – diluted	$	1.82		$	1.66		$	0.94		$	0.89

Weighted average Common Shares and Units outstanding – basic		389,942			387,531			390,032			387,664
Weighted average Common Shares and Units outstanding – diluted		391,063			389,463			391,187			389,363

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,
	2023			2022
ASSETS
Land	$	5,579,211		$	5,580,878
Depreciable property		22,697,597			22,334,369
Projects under development		50,916			112,940
Land held for development		61,334			60,567
Investment in real estate		28,389,058			28,088,754
Accumulated depreciation		(9,428,549	)		(9,027,850	)
Investment in real estate, net		18,960,509			19,060,904
Investments in unconsolidated entities¹		304,710			279,024
Cash and cash equivalents		35,701			53,869
Restricted deposits		88,941			83,303
Right-of-use assets		463,704			462,956
Other assets		292,164			278,206
Total assets	$	20,145,729		$	20,218,262

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	1,913,069		$	1,953,438
Notes, net		5,345,373			5,342,329
Line of credit and commercial paper		184,474			129,955
Accounts payable and accrued expenses		118,316			96,028
Accrued interest payable		66,238			66,310
Lease liabilities		313,866			308,748
Other liabilities		294,263			306,941
Security deposits		69,427			68,940
Distributions payable		258,841			244,621
Total liabilities		8,563,867			8,517,310

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		355,319			318,273
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, 2023 and December 31, 2022		37,280			37,280
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 379,032,722 shares issued
and outstanding as of June 30, 2023 and 378,429,708
shares issued and outstanding as of December 31, 2022		3,790			3,784
Paid in capital		9,472,628			9,476,085
Retained earnings		1,506,460			1,658,837
Accumulated other comprehensive income (loss)		3,708			(2,547	)
Total shareholders’ equity		11,023,866			11,173,439
Noncontrolling Interests:
Operating Partnership		207,405			209,961
Partially Owned Properties		(4,728	)		(721	)
Total Noncontrolling Interests		202,677			209,240
Total equity		11,226,543			11,382,679
Total liabilities and equity	$	20,145,729		$	20,218,262

¹ Includes $242.4 million and $218.0 million in unconsolidated development projects as of June 30, 2023 and December 31, 2022, respectively. See Development and Lease-Up Projects for additional detail on unconsolidated projects.

Equity Residential

Portfolio Summary

As of June 30, 2023

					% of Stabilized			Average
			Apartment		Budgeted			Rental
Markets/Metro Areas	Properties		Units		NOI			Rate
Established Markets:
Los Angeles		59		15,012		17.7	%	$	2,876
Orange County		13		4,028		5.2	%		2,787
San Diego		12		2,878		4.0	%		2,997
Subtotal – Southern California		84		21,918		26.9	%		2,875

San Francisco		44		11,790		15.8	%		3,285
Washington, D.C.		48		15,028		15.6	%		2,592
New York		34		8,536		13.9	%		4,488
Boston		27		7,170		11.5	%		3,477
Seattle		46		9,526		11.0	%		2,587
Subtotal – Established Markets		283		73,968		94.7	%		3,092

Expansion Markets:
Denver		9		2,785		2.8	%		2,417
Atlanta		5		1,477		1.4	%		2,196
Dallas/Ft. Worth		4		1,241		0.7	%		1,875
Austin		3		741		0.4	%		1,831
Subtotal – Expansion Markets		21		6,244		5.3	%		2,189
Total		304		80,212		100.0	%	$	3,022

	Properties	Apartment Units
Wholly Owned Properties	289	76,986
Partially Owned Properties – Consolidated	15	3,226
	304	80,212

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

Equity Residential

Portfolio Rollforward Q2 2023 ($ in thousands)

		Properties		Apartment Units		Purchase Price		Acquisition Cap Rate
	3/31/2023		301		79,351
Acquisitions:
Consolidated Rental Properties			1		287	$	108,000		5.0	%
Consolidated Rental Properties – Not Stabilized (1)			1		262	$	78,600		6.6	%

Completed Developments – Consolidated			1		312
	6/30/2023		304		80,212

Portfolio Rollforward 2023 ($ in thousands)

		Properties			Apartment Units			Purchase Price			Acquisition Cap Rate
	12/31/2022		308			79,597
Acquisitions:
Consolidated Rental Properties			1			287		$	108,000			5.0	%
Consolidated Rental Properties – Not Stabilized (1)			1			262		$	78,600			6.6	%

								Sales Price			Disposition Yield
Dispositions:
Consolidated Rental Properties			(7	)		(247	)	$	(135,300	)		(5.3	%)

Completed Developments – Consolidated			1			312
Configuration Changes			—			1
	6/30/2023		304			80,212

(1)

The Company acquired one property in the Atlanta market in the second quarter of 2023 that is in lease-up and is expected to stabilize in its second year of ownership at the Acquisition Cap Rate listed above (5.7% when removing certain real estate tax benefits that will reduce over time).

Equity Residential

Second Quarter 2023 vs. Second Quarter 2022 Same Store Results/Statistics Including 77,545 Same Store Apartment Units ($ in thousands except for Average Rental Rate)

Second Quarter 2023												Second Quarter 2022
	Residential				% Change	Non- Residential		% Change	Total		% Change		Residential			Non- Residential		Total
Revenues	$	672,595		(1)	5.5%	$	24,849	4.3%	$	697,444	5.5%	Revenues	$	637,547		$	23,827	$	661,374
Expenses	$	212,114			5.3%	$	6,920	14.2%	$	219,034	5.5%	Expenses	$	201,520		$	6,058	$	207,578
NOI	$	460,481			5.6%	$	17,929	0.9%	$	478,410	5.4%	NOI	$	436,027		$	17,769	$	453,796

Average Rental Rate	$	3,017			6.4%							Average Rental Rate	$	2,836
Physical Occupancy		95.9	%		(0.8%)							Physical Occupancy		96.7	%
Turnover		11.6	%		0.4%							Turnover		11.2	%

Second Quarter 2023 vs. First Quarter 2023 Same Store Results/Statistics Including 78,531 Same Store Apartment Units ($ in thousands except for Average Rental Rate)

Second Quarter 2023												First Quarter 2023
	Residential				% Change	Non- Residential		% Change	Total		% Change		Residential			Non- Residential		Total
Revenues	$	683,155		(1)	1.8%	$	26,456	(1.8%)	$	709,611	1.7%	Revenues	$	670,793		$	26,951	$	697,744
Expenses	$	215,239			(4.5%)	$	7,368	2.3%	$	222,607	(4.3%)	Expenses	$	225,376		$	7,202	$	232,578
NOI	$	467,916			5.1%	$	19,088	(3.3%)	$	487,004	4.7%	NOI	$	445,417		$	19,749	$	465,166

Average Rental Rate	$	3,026			1.8%							Average Rental Rate	$	2,972
Physical Occupancy		95.9	%		0.0%							Physical Occupancy		95.9	%
Turnover		11.6	%		2.5%							Turnover		9.1	%

June YTD 2023 vs. June YTD 2022 Same Store Results/Statistics Including 76,952 Same Store Apartment Units ($ in thousands except for Average Rental Rate)

June YTD 2023												June YTD 2022
	Residential				% Change	Non- Residential		% Change	Total		% Change		Residential			Non- Residential		Total
Revenues	$	1,324,993		(1)	7.3%	$	50,085	7.0%	$	1,375,078	7.3%	Revenues	$	1,235,134		$	46,813	$	1,281,947
Expenses	$	430,638			6.2%	$	13,613	11.6%	$	444,251	6.4%	Expenses	$	405,484		$	12,202	$	417,686
NOI	$	894,355			7.8%	$	36,472	5.4%	$	930,827	7.7%	NOI	$	829,650		$	34,611	$	864,261

Average Rental Rate	$	2,995			8.0%							Average Rental Rate	$	2,772
Physical Occupancy		95.9	%		(0.7%)							Physical Occupancy		96.6	%
Turnover		20.6	%		0.4%							Turnover		20.2	%

(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.

Equity Residential

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

	Second Quarter 2023 vs. Second Quarter 2022						Second Quarter 2023 vs. First Quarter 2023						June YTD 2023 vs. June YTD 2022
	77,545 Same Store Apartment Units						78,531 Same Store Apartment Units						76,952 Same Store Apartment Units
	Q2 2023			Q2 2022			Q2 2023			Q1 2023			June YTD 2023			June YTD 2022
Same Store Residential Revenues (GAAP Basis)	$	672,595		$	637,547		$	683,155		$	670,793		$	1,324,993		$	1,235,134
Leasing Concessions amortized		2,705			2,156			3,256			2,846			4,744			6,005
Leasing Concessions granted		(3,921	)		(1,503	)		(4,125	)		(4,241	)		(7,766	)		(3,057	)
Same Store Residential Revenues with Leasing
Concessions on a cash basis	$	671,379		$	638,200		$	682,286		$	669,398		$	1,321,971		$	1,238,082

% change - GAAP revenue		5.5	%					1.8	%					7.3	%

% change - cash revenue		5.2	%					1.9	%					6.8	%

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

Same Store Net Operating Income By Quarter Including 76,952 Same Store Apartment Units ($ in thousands)

	Q2 2023		Q1 2023		Q4 2022		Q3 2022		Q2 2022
Same store revenues	$	693,403	$	681,675	$	676,011	$	671,160	$	657,582
Same store expenses		217,461		226,790		210,795		214,495		206,152
Same store NOI (includes Residential and Non-Residential)	$	475,942	$	454,885	$	465,216	$	456,665	$	451,430

Equity Residential

Same Store Resident/Tenant Accounts Receivable Balances Including 76,952 Same Store Apartment Units ($ in thousands)

	Residential							Non-Residential
Balance Sheet (Other assets):	June 30, 2023				March 31, 2023			June 30, 2023			March 31, 2023
Resident/tenant accounts receivable balances	$	26,628			$	32,408		$	2,389		$	2,414
Allowance for doubtful accounts		(22,335	)			(28,430	)		(1,383	)		(1,500	)
Net receivable balances	$	4,293			$	3,978		$	1,006		$	914

Straight-line receivable balances	$	6,067		(1)	$	4,861		$	13,546		$	13,607

(1)		Total same store Residential Leasing Concessions granted in the second quarter of 2023 were approximately $3.9 million. The straight-line receivable balance of $6.1 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in the remainder of 2023 and the first half of 2024.

Same Store Residential Bad Debt Including 76,952 Same Store Apartment Units ($ in thousands)

Income Statement (Rental income):	Q2 2023			Q1 2023			Q2 2022
Bad debts before governmental rental assistance	$	9,504		$	11,866		$	13,287
Governmental rental assistance received		(655	)		(1,167	)		(14,398	)
Bad Debt, Net	$	8,849		$	10,699		$	(1,111	)

Bad Debt, Net as a % of Same Store Residential Revenues		1.3	%		1.6	%		(0.2	%)

Equity Residential

Second Quarter 2023 vs. Second Quarter 2022

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas	Apartment Units		Q2 2023 % of Actual NOI			Q2 2023 Average Rental Rate		Q2 2023 Weighted Average Physical Occupancy %			Q2 2023 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		14,415		17.8	%	$	2,861		95.0	%		11.2	%		(0.2	%)	(1)		8.5	%		(3.5	%)		1.8	%		(1.9	%)		2.0	%
Orange County		4,028		5.5	%		2,787		95.9	%		10.4	%		3.4	%	(1)		10.9	%		1.5	%		4.8	%		(1.3	%)		1.6	%
San Diego		2,878		4.1	%		2,997		95.8	%		9.9	%		7.6	%			10.2	%		6.9	%		9.2	%		(1.5	%)		0.2	%
Subtotal – Southern California		21,321		27.4	%		2,865		95.3	%		10.9	%		1.5	%			9.0	%		(1.1	%)		3.4	%		(1.7	%)		1.7	%

San Francisco		11,368		16.4	%		3,288		95.6	%		10.9	%		3.1	%	(1)		6.7	%		1.6	%		4.3	%		(1.1	%)		1.5	%
Washington, D.C.		14,400		15.9	%		2,578		96.8	%		10.6	%		6.3	%			1.4	%		8.9	%		6.3	%		0.0	%		(0.8	%)
New York		8,536		14.2	%		4,488		97.1	%		10.1	%		13.3	%			3.6	%		21.2	%		13.4	%		0.0	%		(1.8	%)
Seattle		9,525		10.9	%		2,587		95.1	%		14.4	%		4.2	%			3.7	%		4.4	%		4.4	%		(0.2	%)		(0.2	%)
Boston		6,700		10.3	%		3,405		96.5	%		11.3	%		8.3	%			3.4	%		10.4	%		8.7	%		(0.3	%)		(0.7	%)
Denver		2,498		2.7	%		2,420		96.2	%		17.2	%		5.7	%			6.0	%		5.5	%		6.2	%		(0.5	%)		(0.5	%)
Other Expansion Markets		3,197		2.2	%		1,990		94.9	%		14.6	%		5.1	%			12.7	%		(0.4	%)		7.0	%		(1.9	%)		2.5	%

Total		77,545		100.0	%	$	3,017		95.9	%		11.6	%		5.5	%			5.3	%		5.6	%		6.4	%		(0.8	%)		0.4	%

(1)

Excluding Bad Debt, Net, which includes the positive impact of governmental rental assistance in the second quarter of 2022, same store revenue growth would have been 5.6%, 6.9% and 4.6% for Los Angeles, Orange County and San Francisco, respectively.

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, 2023.

Equity Residential

Second Quarter 2023 vs. First Quarter 2023

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Quarter
Markets/Metro Areas	Apartment Units		Q2 2023 % of Actual NOI			Q2 2023 Average Rental Rate		Q2 2023 Weighted Average Physical Occupancy %			Q2 2023 Turnover			Revenues			Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		14,415		17.5	%	$	2,861		95.0	%		11.2	%		2.5	%		(5.3	%)		6.3	%		3.1	%		(0.5	%)		1.3	%
Orange County		4,028		5.3	%		2,787		95.9	%		10.4	%		2.3	%		0.0	%		3.0	%		2.6	%		(0.3	%)		3.1	%
San Diego		2,878		4.1	%		2,997		95.8	%		9.9	%		2.5	%		(1.3	%)		3.7	%		2.1	%		0.4	%		0.2	%
Subtotal – Southern California		21,321		26.9	%		2,865		95.3	%		10.9	%		2.5	%		(4.1	%)		5.2	%		2.9	%		(0.3	%)		1.5	%

San Francisco		11,568		16.4	%		3,283		95.5	%		10.9	%		1.3	%		(5.4	%)		4.4	%		1.3	%		(0.1	%)		1.3	%
Washington, D.C.		14,716		16.1	%		2,587		96.8	%		10.6	%		2.2	%		(4.7	%)		5.7	%		1.9	%		0.2	%		3.2	%
New York		8,536		14.0	%		4,488		97.1	%		10.1	%		1.6	%		(3.9	%)		5.8	%		1.3	%		0.3	%		2.6	%
Seattle		9,525		10.7	%		2,587		95.1	%		14.4	%		0.3	%		2.8	%		(0.7	%)		0.3	%		0.0	%		3.3	%
Boston		7,170		11.1	%		3,477		96.5	%		11.6	%		3.0	%		(9.2	%)		8.8	%		2.0	%		1.0	%		3.6	%
Denver		2,498		2.7	%		2,420		96.2	%		17.2	%		1.4	%		(9.1	%)		6.2	%		1.5	%		(0.1	%)		6.1	%
Other Expansion Markets		3,197		2.1	%		1,990		94.9	%		14.6	%		1.0	%		(7.3	%)		9.1	%		1.0	%		0.0	%		2.2	%

Total		78,531		100.0	%	$	3,026		95.9	%		11.6	%		1.8	%		(4.5	%)		5.1	%		1.8	%		0.0	%		2.5	%

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, 2023.

Equity Residential

June YTD 2023 vs. June YTD 2022

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year
Markets/Metro Areas	Apartment Units		June YTD 23 % of Actual NOI			June YTD 23 Average Rental Rate		June YTD 23 Weighted Average Physical Occupancy %			June YTD 23 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		14,415		17.8	%	$	2,818		95.2	%		21.1	%		2.8	%	(1)		9.6	%		0.0	%		4.6	%		(1.7	%)		3.5	%
Orange County		4,028		5.5	%		2,752		96.1	%		17.8	%		6.5	%	(1)		10.5	%		5.4	%		7.7	%		(1.1	%)		2.7	%
San Diego		2,706		3.9	%		2,931		95.6	%		19.1	%		7.2	%			7.7	%		7.0	%		8.8	%		(1.5	%)		0.7	%
Subtotal – Southern California		21,149		27.2	%		2,820		95.4	%		20.2	%		4.1	%			9.5	%		2.0	%		5.7	%		(1.6	%)		2.9	%

San Francisco		11,368		16.5	%		3,265		95.6	%		20.4	%		4.8	%	(1)		7.0	%		3.9	%		5.9	%		(1.0	%)		1.6	%
Washington, D.C.		14,400		16.0	%		2,555		96.7	%		17.9	%		6.6	%			3.7	%		8.0	%		6.7	%		(0.1	%)		(1.7	%)
New York		8,536		14.3	%		4,459		96.9	%		17.6	%		16.2	%			3.7	%		27.5	%		16.4	%		(0.2	%)		(2.5	%)
Seattle		9,525		11.3	%		2,583		95.1	%		25.6	%		6.3	%			3.3	%		7.6	%		6.2	%		0.1	%		(0.3	%)
Boston		6,700		10.2	%		3,374		96.1	%		19.2	%		9.0	%			5.4	%		10.6	%		9.3	%		(0.2	%)		(0.5	%)
Denver		2,498		2.7	%		2,402		96.3	%		28.3	%		6.8	%			12.1	%		4.7	%		6.7	%		0.0	%		0.0	%
Other Expansion Markets		2,776		1.8	%		1,984		94.7	%		25.4	%		5.2	%			17.5	%		(4.0	%)		7.0	%		(1.9	%)		1.1	%

Total		76,952		100.0	%	$	2,995		95.9	%		20.6	%		7.3	%			6.2	%		7.8	%		8.0	%		(0.7	%)		0.4	%

(1)

Excluding Bad Debt, Net, which includes the positive impact of governmental rental assistance in the six months ended June 30, 2022, same store revenue growth would have been 6.1%, 7.7% and 5.4% for Los Angeles, Orange County and San Francisco, respectively.

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, 2023.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics For 76,952 Same Store Apartment Units

	New Lease Change (1)						Renewal Rate Achieved (1)						Blended Rate (1)
Markets/Metro Areas	Q2 2023			Q1 2023			Q2 2023			Q1 2023			Q2 2023			Q1 2023
Southern California		3.5	%		4.6	%		6.9	%		6.2	%		5.4	%		5.4	%
San Francisco		1.4	%		2.0	%		6.0	%		6.1	%		3.8	%		4.3	%
Washington, D.C.		4.8	%		2.4	%		6.5	%		6.0	%		5.7	%		4.4	%
New York		4.2	%		2.4	%		5.1	%		6.3	%		4.7	%		4.6	%
Seattle		(3.8	%)		(5.8	%)		4.5	%		5.6	%		0.4	%		(0.2	%)
Boston		4.4	%		0.6	%		6.1	%		6.9	%		5.4	%		3.8	%
Denver		0.9	%		(2.4	%)		5.0	%		5.8	%		2.6	%		0.8	%
Other Expansion Markets		(4.8	%)		(5.3	%)		4.4	%		5.5	%		(0.8	%)		(0.8	%)
Total		2.3	%		1.3	%		5.9	%		6.1	%		4.3	%		3.9	%

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions. See page 4 for July 2023 preliminary data.

Equity Residential

Second Quarter 2023 vs. Second Quarter 2022 Total Same Store Operating Expenses Including 77,545 Same Store Apartment Units ($ in thousands)

	Q2 2023		Q2 2022		$ Change (1)			% Change			% of Q2 2023 Operating Expenses
Real estate taxes	$	90,898	$	88,963	$	1,935			2.2	%		41.5	%
On-site payroll		42,504		39,022		3,482			8.9	%		19.4	%
Utilities		31,578		31,501		77			0.2	%		14.4	%
Repairs and maintenance		31,233		27,421		3,812			13.9	%		14.3	%
Insurance		8,455		7,397		1,058			14.3	%		3.9	%
Leasing and advertising		2,528		2,619		(91	)		(3.5	%)		1.1	%
Other on-site operating expenses		11,838		10,655		1,183			11.1	%		5.4	%
Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	219,034	$	207,578	$	11,456			5.5	%		100.0	%

June YTD 2023 vs. June YTD 2022 Total Same Store Operating Expenses Including 76,952 Same Store Apartment Units ($ in thousands)

	YTD 2023		YTD 2022		$ Change (1)		% Change			% of YTD 2023 Operating Expenses
Real estate taxes	$	180,521	$	176,328	$	4,193		2.4	%		40.6	%
On-site payroll		84,629		80,021		4,608		5.8	%		19.1	%
Utilities		69,925		65,520		4,405		6.7	%		15.7	%
Repairs and maintenance		61,120		53,077		8,043		15.2	%		13.8	%
Insurance		16,830		14,719		2,111		14.3	%		3.8	%
Leasing and advertising		5,003		4,949		54		1.1	%		1.1	%
Other on-site operating expenses		26,223		23,072		3,151		13.7	%		5.9	%
Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	444,251	$	417,686	$	26,565		6.4	%		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 escalation in rates and assessed values.

		On-site payroll – Increase due primarily to challenging comparable period and elevated employee benefit costs, partially offset by the impact of innovation initiatives.

		Utilities – Moderation in the quarter-over-quarter rate of increase is primarily driven by lower commodity prices for gas and electric. Year-over-year increase primarily driven by higher commodity prices for gas and electric and higher trash expense.

		Repairs and maintenance – Quarter-over-quarter increase primarily driven by continued wage pressure, particularly due to higher minimum wage on contracted services. Year-over-year increase was also impacted by increased outsourcing due to higher internal staffing utilization to address issues from California rain storms that occurred earlier this year.

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

		Other on-site operating expenses – Increase primarily driven by higher property-related legal expenses.

(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, 2023 ($ in thousands)

	Debt Balances (1)		% of Total			Weighted Average Rates (1)			Weighted Average Maturities (years)
Secured	$	1,913,069		25.7	%		3.63	%		4.4
Unsecured		5,529,847		74.3	%		3.59	%		9.0
Total	$	7,442,916		100.0	%		3.60	%		7.8
Fixed Rate Debt:
Secured – Conventional	$	1,609,298		21.6	%		3.45	%		3.4
Unsecured – Public		5,345,373		71.8	%		3.54	%		9.3
Fixed Rate Debt		6,954,671		93.4	%		3.52	%		8.0
Floating Rate Debt:
Secured – Conventional		66,863		0.9	%		7.17	%		2.0
Secured – Tax Exempt		236,908		3.2	%		3.47	%		11.0
Unsecured – Revolving Credit Facility		—		—			—			4.3
Unsecured – Commercial Paper Program (2)		184,474		2.5	%		5.12	%		—
Floating Rate Debt		488,245		6.6	%		4.71	%		5.8
Total	$	7,442,916		100.0	%		3.60	%		7.8

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)		At June 30, 2023, the weighted average maturity of commercial paper outstanding was 26 days. The weighted average amount outstanding for the six months ended June 30, 2023 was approximately $164.5 million.

Note: The Company capitalized interest of approximately $7.0 million and $2.3 million during the six months ended June 30, 2023 and 2022, respectively. The Company capitalized interest of approximately $3.6 million and $1.3 million during the quarters ended June 30, 2023 and 2022, respectively.

Equity Residential

Debt Maturity Schedule as of June 30, 2023 ($ 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)
2023 (2)	$	800,000		$	188,487		(3)	$	988,487			13.2	%		4.21	%		4.45	%
2024		—			6,200				6,200			0.1	%	N/A				3.86	%
2025		450,000			75,976				525,976			7.0	%		3.38	%		3.96	%
2026		592,025			9,000				601,025			8.0	%		3.58	%		3.58	%
2027		400,000			9,800				409,800			5.4	%		3.25	%		3.26	%
2028		900,000			10,700				910,700			12.1	%		3.79	%		3.79	%
2029		888,120			11,500				899,620			12.0	%		3.30	%		3.31	%
2030		1,095,000			12,700				1,107,700			14.7	%		2.55	%		2.56	%
2031		528,500			39,800				568,300			7.6	%		1.94	%		2.08	%
2032		—			28,000				28,000			0.4	%	N/A				3.64	%
2033+		1,350,850			110,900				1,461,750			19.5	%		4.39	%		4.28	%
Subtotal		7,004,495			503,063				7,507,558			100.0	%		3.48	%		3.57	%
Deferred Financing Costs and Unamortized (Discount)		(49,824	)		(14,818	)			(64,642	)	N/A			N/A			N/A
Total	$	6,954,671		$	488,245			$	7,442,916			100.0	%		3.48	%		3.57	%

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)		As of June 30, 2023, the Company had $450.0 million of ten-year forward starting SOFR swaps outstanding at a weighted average rate of 2.90% (currently equivalent to a ten-year U.S. Treasury of approximately 3.15%) to hedge the U.S. Treasury risk for the refinancing of 2023 maturities. See the Capital Markets Activity on page 4 of this release for details of subsequent activity related to these swaps.
(3)		Includes $185.2 million in principal outstanding on the Company's Commercial Paper Program.

Equity Residential

Selected Unsecured Public Debt Covenants

	June 30,	March 31,
	2023	2023
Debt to Adjusted Total Assets (not to exceed 60%)	26.9%	26.7%

Secured Debt to Adjusted Total Assets (not to exceed 40%)	7.7%	8.0%

Consolidated Income Available for Debt Service to
Maximum Annual Service Charges
(must be at least 1.5 to 1)	6.21	6.30

Total Unencumbered Assets to Unsecured Debt
(must be at least 125%)	518.6%	528.9%

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

	June 30,	March 31,
	2023	2023
Total debt to Normalized EBITDAre	4.30x	4.27x

Net debt to Normalized EBITDAre	4.27x	4.17x

Unencumbered NOI as a % of total NOI	88.5%	88.3%

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of June 30, 2023 (Amounts in thousands except for share/unit and per share amounts)

Secured Debt					$	1,913,069	25.7	%
Unsecured Debt						5,529,847	74.3	%
Total Debt						7,442,916	100.0	%	22.3	%
Common Shares (includes Restricted Shares)		379,032,722	96.8	%
Units (includes OP Units and Restricted Units)		12,415,452	3.2	%
Total Shares and Units		391,448,174	100.0	%
Common Share Price at June 30, 2023	$	65.97
						25,823,836	99.9	%
Perpetual Preferred Equity (see below)						37,280	0.1	%
Total Equity						25,861,116	100.0	%	77.7	%

Total Market Capitalization					$	33,304,032			100.0	%

Perpetual Preferred Equity as of June 30, 2023 (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

	June YTD 2023		June YTD 2022		Q2 2023		Q2 2022
Weighted Average Amounts Outstanding for Net Income Purposes:
Common Shares - basic		378,492,171		375,639,505		378,641,804		375,768,632
Shares issuable from assumed conversion/vesting of:
- OP Units		11,449,790		11,891,583		11,390,569		11,895,086
- long-term compensation shares/units		1,121,169		1,862,666		1,155,127		1,697,634
- ATM forward sales		—		68,823		—		1,470
Total Common Shares and Units - diluted		391,063,130		389,462,577		391,187,500		389,362,822

Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:
Common Shares - basic		378,492,171		375,639,505		378,641,804		375,768,632
OP Units - basic		11,449,790		11,891,583		11,390,569		11,895,086
Total Common Shares and OP Units - basic		389,941,961		387,531,088		390,032,373		387,663,718