Equity Residential Reports Second Quarter 2021 Results

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  • EQR

Full Year Guidance Ranges Raised as Strong Recovery Continues Across Portfolio

CHICAGO, July 27, 2021--(BUSINESS WIRE)--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

%)