VMRK 10-K & 10-Q changes, risk factors and insider trading

WhileThe the Company continues to diversify its portfolio with the addition of the Expansion Markets, the Company’sCompany's properties are still predominantlyprimarily concentrated in ourthe Establishedmajor Marketscoastal markets of Boston, New York, Washington, D.C., Southern California (generallyincluding withinLos certainAngeles, denseOrange urbanCounty and suburbanSan submarketsDiego)., San Francisco and Seattle, diversified by a targeted presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. If one or more of theseour markets is unfavorably impacted by specific geopolitical and/or economic conditions, local real estate conditions, increases in social unrest, increases in real estate and other taxes, reduced quality of life, deterioration of local or state government health, rent control or rent stabilization laws, other similar regulations, or localized environmental and climate issues, the impact of such conditions may have a more negative impact on our results of operations than if our properties were more geographically diverse. Additionally, to the extent that theseour markets or submarkets become less desirable to operate in, including changes in multifamily housing supply and demand, our results of operations could be more negatively impacted than if we were more diversified within our markets or invested in a greater number of markets.

Real estate investments often cannot be sold quickly due to regulatory constraints, market conditions or otherwise. As a result, we may not be able to reconfigure our portfolio, including the diversification of our portfolio into the Expansion Markets, as promptly as desired or as quickly in response to changing economic or other conditions. We may also be unable to consummate dispositions in a timely manner, on attractive terms, or at all. The capitalization rates/disposition yields at which properties may be sold could also be higher than historic rates, thereby reducing our potential proceeds from sale. In some cases, we may also determine that we will not recover the carrying amount of the property upon disposition, potentially causing an impairment charge. This inability to reallocate our capital promptly could negatively affect our financial condition, including our ability to make distributions to our security holders.

We intend to actively acquire, develop and renovate multifamily operating properties as part of our business strategy. Newly acquired, developed or renovated properties may not perform as we expect. We may overestimate the revenue (or underestimate the expenses) that these new or repositioned properties may generate. The occupancy and rental rates at these properties may also fail to meet our expectations for these investments. Land parcels acquired for development may lose significant value prior to the start of construction. Development and renovations are subject to even greater uncertainties and risks due to the complexities and lead time to build or complete these projects. We may also underestimate the costs to complete a development property or to complete a renovation.

Furthermore, we have in the past and may in the future decide to invest in new markets outsideand/or ofproduct our existing Established Marketstypes by acquiring and/or developing properties in accordance with the Company's long-term investment strategy. Our historical experience in our Established Markets does not ensure that we will be able to operate successfully in new markets, should we choose to enter them. EnteringInvesting intoin new markets and/or new product types may expose us to a variety of risks, including an inability to accurately evaluate local market conditions and local economies, to identify appropriate acquisition and/or development opportunities, to hire and retain key personnel and a lack of familiarity with local governmental regulations.

We intend to continue to develop multifamily properties through both wholly owned and joint venture arrangements as part of our business strategy. Development often includes long planning and entitlement timelines, subjecting the projects to changes in market conditions. It can involve complex and costly activities, including significant environmental remediation or construction work in our markets. We have experienced and may continue to experience changes in local market conditions and/or an increase in financing or construction costs due to general disruptions that affect the cost of labor and/or materials,disruptions, such as supply chain disruptions, trade disputes, tariffs, immigration issues, labor unrest, geopolitical conflicts or other factors that create inflationary pressures. We have abandoned and may continue to abandon opportunities that we have already begun to explore for a number of reasons, and as a result, we may fail to recover costs already incurred in exploring those opportunities, potentially causing an impairment charge. We may also be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third-party permits and authorizations. These and other risks inherent in development projects, including the joint venture risks noted below, could result in increased costs or the delay or abandonment of opportunities.

Our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests; and The possibility that our partner is either unable to or unwilling to complete their contractual development activities.

We have entered into, and may continue in the future to enter into, long-term ground leases with respect to assets that may restrict our ability to finance, sell or otherwise transfer our interests in these properties, limit our use and expose us to loss of the properties if such agreements are breached by us or terminated. These restrictions may limit our ability to timely sell or exchange the properties, impair the properties’ value or negatively impact our ability to operate the properties. In addition, as we get closer to the lease termination dates, the values of the properties could decrease if we are unable to agree upon an extension of the lease with the lessor. Certain of these ground leases have payments subject to annual escalations and/or periodic fair market value adjustments which could adversely affect our financial condition or results of operations.

The Non-Residential space (includes retail and public parking garage operations) at our properties primarily serves as an additional amenity for our residents and neighbors. The longer-term nature of our Non-Residential leases (generally five to ten years with market based renewal options) and the characteristics of many of our Non-Residential tenants (generally small, local businesses) may subject us to certain risks. We may not be able to lease new space for rents that are consistent with our projections or for market rates. Also, when leases for our existing Non-Residential space expire or are otherwise terminated, the space may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms. The presence of competitive alternatives and other market conditions (including online shopping) may affect our ability to lease our Non-Residential space and impact the level of rents we can obtain. If our Non-Residential tenants experience financial distress or bankruptcy, as some have in the past, they may fail to comply with their contractual obligations, seek concessions, such as rent abatements and deferrals, in order to continue operations or cease their operations, any or all of which could lead us to record a non-cash write-off of a tenant's straight-line rent receivable (like we did in 2023 due to the Rite Aid bankruptcy) and could adversely impact our results of operations and financial condition.

Corporate responsibility, specifically related to sustainability efforts, may impose additional costs and expose us to new risks.

Corporate responsibility evaluations remain highly important to some investors and other stakeholders. Certain organizations that provide corporate governance and other corporate risk advisory services to investors have developed scores and ratings to evaluate companies and investment funds based upon corporate responsibility metrics. Many investors focus on corporate responsibility-related business practices and scores when choosing to allocate their capital and may consider a company's score as a reputational or other factor in making an investment decision. Government regulators' and investors' increased focus and activism related to corporate responsibility and similar matters may constrain our business operations or increase expenses or capital expenditures. In recent years, certain initiatives relating to corporate responsibility matters, such as workplace inclusion and diversity, have attracted negative commentary and attention, which could expose the Company to additional risks. In addition, investors may decide to refrain from investing in us as a result of their assessment of our approach to and consideration of corporate responsibility factors. We may face reputational damage in the event our corporate responsibility procedures or standards do not meet the standards set by various constituencies. In addition, the criteria by which companies are rated for their efforts may change, which could cause us to receive different scores than in previous years. Our rating could result in a negative perception of the Company, exclusion of our securities from consideration by certain investors who may elect to invest with our competition instead and/or cause investors to reallocate their capital away from the Company, all of which could have an adverse impact on the price of our securities.

We have developed/instituted and may continue to develop/institute technology-based initiatives that are intended to serve our customers better and operate more efficiently, including “smart home” technology and self-service options that are accessible to residents through smart devices or otherwise.efficiently. Such initiatives have involved and may involve our employees having new or different responsibilities and processes with which they may be unfamiliar. We may incur significant costs and divert resources in connection with such initiatives, and these initiatives may not perform as expected, which could adversely affect our business, results of operations, cash flows and financial condition.

Dislocations and disruptions in capital markets could result in increased costs or lack of availability of debt financing (including under our commercial paper program) and equity financing. This includes any disruptions that may occur as a result of the potential privatization of the currently government sponsored organizations, Fannie Mae and Freddie Mac.Mac, which are major lenders to the apartment industry. Such events may affect our ability to refinance existing debt, require us to utilize higher cost alternatives and/or impair our ability to adjust to changing economic and business conditions. Capital market disruptions have and could continue to negatively impact our ability to make acquisitions or make it more difficult or not possible for us to sell properties or may unfavorably affect the price we receive for properties that we do sell. Such disruptions could cause the price of our securities to decline.

The adoption of, or changes in, rent control orcontrol, rent stabilization regulations andstabilization, eviction and/or other regulations/restrictions could have an adverse effect on our operations and property values.

In part due to increasing pressure from advocacy groups, a growing number of state and local governments (including at times the federal government) have enacted and may continue to consider enacting and/or expanding rent control, rent stabilization, eviction moratoriums or other regulations that restrict the methods and strategies by which we operate our business. In addition, the federal government has recently considered imposing rent regulations on multifamily properties secured by government-sponsored debt. These regulations specifically and/or effectively limit or could continue to limit our ability to raise rents or charge certain fees (either of which could have a retroactive effect), enforce residents’ or tenants’ contractual rent obligations or pursue collections, all of which could have an adverse impact on our operations and property values.

Further, laws and regulations at the federal, state and local level requiring climate-related disclosures, including the rules proposed by the SEC and the legislation recently enacted in the State of California, may increase compliance and data collection costs if and/or when such laws and regulations become effective.

DistributionREIT distribution requirements maycould limit our flexibilityavailable to manage our portfolio.cash.

Certain provisions of our Declaration of Trust and Bylaws and Maryland law and certain REIT tax requirements could inhibit changes in control.

Despite system redundancy, the implementation of security measures, required employee awareness training and the existence of a disaster recovery plan, our information technology systems, including those maintained by third-party vendors with which we do business, are vulnerable to damage and interruption from any number of sources beyond our control, including energy blackouts, natural disasters, terrorism, geopolitical events, telecommunication failures and cyber attacks. We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, phishing attempts, social engineering, ransomware or other scams, persons inside our organization or persons/vendors with access to our systems and other significant disruptions of our information technology networks and related systems, including property infrastructure. These risks have increased due to increased reliance on cloud-based applications, remote working and other electronic interactions with our current and prospective residents. Our information technology networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations. We use these systems to manage our resident and vendor relationships, internal communications, accounting and record-keeping systems and many other key aspects of our business. Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks, which also depend on the strength of our procedures and the effectiveness of our internal controls as well as those of vendors with whom we do business. Even the most well-protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. The rapid evolution and increased adoption of artificial intelligence technologies, by us and our third-party service providers, may also heighten our cybersecurity risks by making cyber attacks more difficult to detect, contain and mitigate. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.

A breach or significant and extended disruption in the function of our systems, including our primary website, could damage our reputation and cause us to lose residents and revenues, result in a violation of applicable privacy and other laws, generate third-party claims, result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personally identifiable and confidential information and require us to incur significant expenses to address and remediate or otherwise resolve these kinds of issues. We may not be able to recover these expenses in whole or in any part from our service providers, our insurers or any other responsible parties. Our insurance coverage may not be sufficient to cover all losses related to cybersecurity incidents. As a result, there can be no assurance that our financial results would not be negatively impacted.

We have incorporated and may continue to incorporate the use of generative and/or agentic artificial intelligence ("AI") within our business, and these solutions and features may become more important to our operations or to our future growth over time. Our research and development of AI remains ongoing. There can be no assurance that we will realize the desired or anticipated benefits, or any benefits, and we may fail to properly implement such technology. AI presents risks, challenges and unintended consequences that could affect our adoption and use of this technology. Our competitors or other third parties may incorporate AI in their business operations more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally, the complex and rapidly evolving landscape around AI may expose us to claims, demands and proceedings by private parties and regulatory authorities and subject us to legal liability as well as reputational harm. Future regulations could impose restrictions on the use of these technologies or require us to implement costly compliance measures. Finally, public perception of new technologies (including AI), such as concerns about data privacy and algorithmic bias, could affect customer acceptance of technology-driven services, which could harm our reputation and business.

We are involved and may continue to be involved in legal proceedings, claims, class actions, inquiries and governmental investigations in the ordinary course of business. These legal proceedings may include, but are not limited to, proceedings related to consumer, shareholder, securities, antitrust, employment, environmental, development, condominium conversion, privacy, tort, eviction and commercial legal issues. Litigation can be lengthy and expensive, and it can divert management's attention and resources. Results cannot be predicted with certainty, and an unfavorable outcome in litigation could result in liability material to our financial condition or results of operations. See Item 3, Legal Proceedings, for additional discussion.

The Company’s property, general liability and workers compensation insurance policies provide coverage with substantial per occurrence deductibles and/or self-insured retentions. These self-insurance retentions can be a material portion of insurance losses in excess of the base deductibles. These substantial deductible and self-insured retention amounts do expose the Company to greater potential for uninsured losses. While the Company has previouslyat times purchased incremental insurance coverage in the event of multiple non-catastrophic occurrences within the same policy year, thesethere substantialcan deductiblebe andno self-insuredassurance retention amounts do expose the Company to greater potential for uninsured losses andthat this additional coverage may notwill be available at all or on commercially reasonable terms or that the Company will decide to purchase it in the future. We believe the policy specifications and insured limits of these policies are adequate and appropriate; however, we may not always be able to place the desired amount of third-party coverage due to a significant increase in insurance premiums and deductibles or a decrease in the availability of coverage, a combination of which have exposed and could further expose the Company to uninsured losses. As a result, our financial results could be adversely affected and may vary significantly from period to period.

The consolidated properties acquired in 20232024 are located in the Atlanta (37), Boston, Dallas/Ft. Worth (5) and Denver (5) markets;

The consolidated properties acquired in 2024 are located in the Atlanta (7), Boston, Dallas/Ft. Worth (5) and Denver (5) markets; and In 2024, the Company acquiredAcquired its joint venture partner's 8.0% interest in a 312-unit apartment property in 2024, located in the Washington, D.C. marketmarket, for $3.1 million in cash. The property is now wholly owned. The Company also repaid $67.9 million of the joint venture construction mortgage debt during 2023.owned;

The consolidated properties disposed of in 2023 were located in the Los Angeles (8), Seattle (2) and San Francisco markets; and The consolidated properties disposed of in 2024 were located in the Boston, Orange County, San Francisco (3), Washington, D.C. (5), Seattle (2) and San Diego markets.markets;

The Company completedCompleted construction on four unconsolidated apartment properties during 2024, located in the Denver and Dallas/Ft. Worth (3) markets, consisting of 1,262 apartment units totaling approximately $338.0 million of development costs;

The Company spent approximately $103.8 million during 2024, primarily for unconsolidated development projects; and The Company previouslyPreviously entered into two separate unconsolidated joint ventures for the purpose of developing vacant land parcels in the Boston and Seattle markets. During 2024, the joint ventures acquired their respective land parcels for the total purchase price listed above.above; Theand Company commencedCompleted construction on theseone twounconsolidated apartment properties,property whichduring are2025, expectedlocated toin containthe 639New totalYork market, consisting of 450 apartment units.units Totaltotaling expectedapproximately $201.2 million of development cost for these projects is $307.2 million, and the Company's total investment in these two joint ventures is approximately $90.9 million as of December 31, 2024.costs.

Non-same store/other NOI results consist primarily of properties acquired in calendar years 20232024 and 2024,2025, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 20232024 and 20242025 sold properties. The increase in NOI is primarily a result of the Company's 2025 and significant second half of 2024 net acquisition activityactivity, duringwhich 2024.is positively impacting 2025 results.

The increase in consolidated total NOI is primarily a result of the Company’s higher NOI from non-same store properties as noted above and higher NOI from same store properties, largely due to improvement in same store revenues as noted above and the Company's continued focus on same store expense efficiency.

Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies. The increase during the year ended December 31, 20242025 as compared to 20232024 is primarily attributable to increases in payroll-relatedtraining costs,and marketing expenses, information technology expenses and legal and professional fees.fees, partially offset by decreases in workforce/contractors costs and payroll-related costs.

General and administrative expenses, which include corporate operating expenses, increased during the year ended December 31, 20242025 as compared to 2023,2024, primarily due to increases in legalpayroll-related and professional feescosts and other public company costs, partially offset by decreases in payroll-related costs.

Net gain on sales of real estate properties increased during the year ended December 31, 20242025 as compared to 2023,2024, primarily as a result of a significantly higher dollar sales volume and the mix of properties sold in 20242025 vs. 2023.2024.

Interest and other income increased during the year ended December 31, 20242025 as compared to 2023,2024, primarily due to a net increase in realized/unrealized gains on various investment securities, short-term investmentinterest income on restrictedmortgages deposit accounts due to a higher rate environmentreceivable and higheran overallemployment investedtax balancesrefund asreceived wellin as2025 but not in 2024, partially offset by lower insurance/litigation settlement proceeds received during 20242025 thatas didcompared notto occur in 2023.2024.

Other expenses increaseddecreased during the year ended December 31, 20242025 as compared to 2023,2024, primarily due to a decrease in advocacy contributions, partially offset by increases in litigation accruals and advocacythe contributions,write-off partiallyof offsetdevelopment by decreases in data transformation projectpursuit costs thatand occurred during 2023 but not during 2024.overhead.

Interest expense, including amortization of deferred financing costs, increased during the year ended December 31, 20242025 as compared to 2023,2024, primarily due to higher overall debt balances outstanding and higher overall rates, partially offset by higher capitalized interest.rates. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the year ended December 31, 20242025 was 3.91%3.93% as compared to 3.82%3.91% in 2023.2024. The Company capitalized interest of approximately $14.5$12.4 million and $12.3$14.5 million during the years ended December 31, 20242025 and 2023,2024, respectively.

Loss from investments in unconsolidated entities increased during the year ended December 31, 20242025 as compared to 2023,2024, primarily as a result of losses incurred on our unconsolidated development properties which recently started lease-up activities,activities partiallyas offsetwell byas increasesthose inthat netrecently income of unconsolidated operating propertiesstabilized and a gain on saleour ofreal anestate unconsolidatedtechnology operatingand property.other real estate fund investments.

During the year ended December 31, 2024,2025, the Company's operating business performedwas well,solid, withdriven healthyby sustained demand across most of ourits markets and supported by athe continuingCompany’s solidrecord-high jobresident market,retention highand employmentcontinued low levels andof highunemployment, in addition to wage growth among ourits target renter demographic. Competitive new supply was modest in ourmost of the Established Markets, but has beenremained elevated in our Expansion Markets.Markets, Asresulting expected, our East Coast markets were our best performers. On the West Coast, Seattle showed improvement, while San Francisco improved but atin a more modestchallenging pace.new Ourlease Southernpricing Californiaenvironment, marketsalthough (namelytenant therenewal citypricing was strong. On a positive note, Atlanta and Dallas are beginning to show indications of Losimprovement Angeles)as showedcompetitive goodsupply demand but greater price sensitivity during the second half of 2024, though pricing started improving later in the year.declines.

Overall, the fundamentals of ourthe Company’s business are healthy.solid and remain resilient despite macroeconomic uncertainty. Long-term, weexpected expectcontinued positive secular tailwinds remain due to elevated single family home ownership costs, positive household formation trends, manageablehistorically low competitive new supply in ourthe Established Markets and moderating competitive new supply in ourthe Expansion Markets. WithThere continues to be an overall deficit in housing across the country, which we believe ourleaves businessthe isCompany well positioned for the future.future Weas also see ourits resident base asis beingmore resilient to economic uncertainty, including elevated inflation, due to higher levels of disposable income and lower relative rent-to-income ratios.

With approximately $2.0$1.9 billion in readily available liquidity, a strong balance sheet, limited near-termwell-staggered debt maturities, very strong credit metrics and ample access to capital markets, the Company believes it is well positioned to meet its future obligations and take advantage of opportunities. See further discussion below.

Acquired eighteennine consolidated rental properties and two consolidated land parcels for approximately $1.6$661.6 billionmillion;

Disposed of thirteeneleven consolidated rental properties,properties and one consolidated land parcel, receiving net proceeds of approximately $960.4$1.1 millionbillion;

Invested $109.7$85.8 million primarily in unconsolidated development joint venture entities as well as unconsolidated investments in real estate technology funds/companies for various technology initiatives; and Investedthe $301.4repayment millionof certain preferred interests in capitalone expendituresjoint to real estate presented in the table below.venture;

For the year ended December 31, 2024,2025, our actual capital expenditures to real estate included the following (dollar amounts in thousands except for apartment unit and per apartment unit amounts):

Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders/unitholders and repurchase and other Common Share activity. For the year ended December 31, 2024,2025, key drivers were:

Issued $500.0 million of seven-year 4.95% unsecured notes, receiving net proceeds of approximately $498.6 million before underwriting fees, hedge termination costs and other expenses; and Repurchased and retired 652,4524,526,740 Common Shares, at a weighted average purchase price of $58.95$62.00 per share, for an aggregate purchased amount of approximately $38.5$280.7 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion;discussion.

The Company has a $2.5 billion unsecured revolving credit facility maturing onDecember October3, 26, 2027.2030. The Company has the ability to increase available borrowings by an additional $750.0$1.0 millionbillion by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating and other terms and conditions per the agreement.rating. See Note 8 in the Notes to Consolidated Financial Statements for additional discussion of the Company’s credit facility.

The Company has an unsecured commercial paper note program under which it may borrow up to a maximum of $1.5 billion (increased from $1.0 billion as of December 18, 2024) subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness.

Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of Common Shares or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 1010, if applicable, in the Notes to Consolidated Financial Statements). The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s Common Shares over the term of the forward sale agreement.

During the year ended December 31, 2024,2025, the Company repurchased and subsequently retired approximately $38.5$280.7 million (652,4524,526,740 shares at a weighted average price per share of $58.95$62.00) of its Common Shares in the open market under its share repurchase program. Concurrent with these transactions, ERPOP repurchased and retired the same amount of OP Units previously issued to EQR. PriorThe toCompany's Board of Trustees reauthorized and replenished the share repurchase activityprogram duringin the yearfirst endedquarter Decemberof 31,2025, 2024,giving the Company had the authority to repurchase up to 13.0 million Common SharesShares. underThe itsCompany's Board of Trustees replenished the share repurchase program.program again on December 11, 2025, giving the Company the authority to repurchase up to 13.0 million Common Shares. As of February 6, 2025,2026, EQR has remaining authorization to repurchase up to 12,347,54811,305,881 of its shares.

There have been no material changes to the risk factors that were discussed in Part I, Item 1A of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2025.2025, except for the following:

Forward-looking statements are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Company’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.statements, including, without limitation, with respect to our ability to realize the anticipated benefits of our pending Merger with AvalonBay or to complete the pending Merger on the terms or timing contemplated or at all. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Additional factors that might cause such differences are discussed in Part I of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2025, particularly those under Item 1A, Risk Factors. Additional factors are also included in Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q. Forward-looking statements and related uncertainties are also included in the Notes to Consolidated Financial Statements in this report. Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereofhereof, and the Company undertakes no obligation to update or supplement these forward-looking statements.

EQR is the general partner of, and as of MarchJune 31,30, 2026 owned an approximate 97.6% ownership interest in, ERPOP. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.

The Company’s and the Operating Partnership’s overall business objectives and operating and investing strategies have not changed from the information included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2025.2025, except as it relates to the potential Merger transaction with AvalonBay as discussed further below.

In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the quartersix months ended MarchJune 31,30, 2026:

The following table presents a reconciliation of diluted earnings per share/unit for the six months and quarter ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025:

Properties that the Company owned and were stabilized for all of both of the quarterssix months ended MarchJune 31,30, 2026 and 2025, which represented 78,88578,385 apartment units, drove the Company’s results of operations. Properties are considered “stabilized” when they have achieved 90% Physical Occupancy for three consecutive months.

The following table provides results and statistics related to our Residential same store operations for the quarterssix months ended MarchJune 31,30, 2026 and 2025:

Note: The above table reflects Residential same store results only. Residential operations account for more than 96.0% of total revenues for the quartersix months ended MarchJune 31,30, 2026.

The comparison discussions provided below detail the changes in results for the quartersix months ended MarchJune 31,30, 2026 as compared to the prior year period.

The increase in same store rental income is primarily driven by goodstrong demandPhysical Occupancy and modestbetter supplythan acrossanticipated mostrenewal of our markets.rates.

Utilities – A $2.7$6.0 million increase primarily driven by higher costs for trash removal and higher commodity prices, particularly impacting electricity and gas; and Repairs and maintenance - A $2.2$2.7 million increase primarily driven by costs associated with the implementation of various resident technology initiatives (including bulk Wi-Fi programs), which is more than offset by a corresponding increase in same store revenues.

Non-same store/other NOI results consist primarily of properties acquired in 2025, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 2025 and 2026 sold properties. The increasedecrease in NOI is primarily a result of the Company's 2025 and 2026 net disposition activity, partially offset by the lease-up activity from the Company's development activities,activities partially offset by theand 2025 net dispositionacquisition activity.

The increase in consolidated total NOI is a result of the Company’s higher NOI from non-same store properties as noted above and higher NOI from same store properties, largely due to improvement in same store revenues and the Company's continued focus on same store expense efficiency.efficiency, partially offset by lower NOI from non-same store properties as noted above.

Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies. The decreaseincreases during the six months and quarter ended MarchJune 31,30, 2026 as compared to the prior year periodperiods isare primarily attributable to decreasesincreases in payroll-related costs, traininglegal and marketingprofessional expensesfees and information technology expenses, partially offset by increasesdecreases in legaltraining and professionalmarketing fees.expenses.

General and administrative expenses, which include corporate operating expenses, decreased during the six months and quarter ended MarchJune 31,30, 2026 as compared to the prior year period,periods, primarily due to decreases in payroll-related costs and other public company costs, partially offset by increases in information technology expenses and legal and professional fees.fees and other public company costs.

Depreciation expense decreased during the quartersix months ended MarchJune 31,30, 2026 as compared to the prior year period, primarily as a result of in-place leases for 2024 acquisitions still being depreciated in the first quarter of 2025 and lower depreciation from properties sold in 2025,2025 and 2026, partially offset by additional depreciation expense on properties acquired in 2025 and development properties placed in service during 2025.2025 and 2026. Depreciation expense increased during the quarter ended June 30, 2026 as compared to the prior year period, primarily as a result of additional depreciation expense on properties acquired in 2025 and development properties placed in service during 2025 and 2026, partially offset by lower depreciation from properties sold in 2025 and 2026.

Net gain on sales of real estate properties decreased during the six months and quarter ended MarchJune 31,30, 2026 as compared to the prior year period,periods, primarily asdue to a resultnet ofloss no consolidated property sales in the first quarter of 2026 as compared to theon sale of two consolidated properties in the2026 sameas periodcompared to a gain on sale of three consolidated properties in 2025.

OtherInterest expensesand other income increased during the six months and quarter ended MarchJune 31,30, 2026 as compared to the prior year period,periods, primarily due to increasesa net increase in litigationrealized/unrealized accrualsgains on various investment securities and advocacyinterest contributions.income on mortgages receivable.

Interest expense, including amortization of deferred financing costs, increased during the six months and quarter ended MarchJune 31,30, 2026 as compared to the prior year period,periods, primarily due to higher overall debt balances outstandingrates and higherdebt overallbalances, rates.Merger financing costs and lower capitalized interest. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties,penalties and Merger financing costs, for the quartersix months ended MarchJune 31,30, 2026 was 3.96% as compared to 3.92%3.93% for the prior year period, and for the quarter ended June 30, 2026 was 3.95% as compared to 3.93% for the prior year period. The Company capitalized interest of approximately $2.6$4.7 million and $3.9$6.7 million during the six months ended June 30, 2026 and 2025, respectively, and $2.1 million and $2.8 million during the quarters ended MarchJune 31,30, 2026 and 2025, respectively.

Loss from investments in unconsolidated entities decreased during the six months and quarter ended MarchJune 31,30, 2026 as compared to the prior year period,periods, primarily as a result of lower net losses incurred on our unconsolidated development properties that recently stabilized, partially offset by losses incurred on our unconsolidated development propertyproperties which recently started lease-up activities.

The following table sets forth our sources and uses of cash flows for the quarterssix months ended MarchJune 31,30, 2026 and 2025 (amounts in thousands):

The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the quartersix months ended MarchJune 31,30, 2026.

Our operating cash flows are primarily impacted by NOI and its components, such as Average Rental Rates, Physical Occupancy levels and operating expenses related to our properties. Cash provided by operating activities for the quartersix months ended MarchJune 31,30, 2026 as compared to the prior year period decreased by approximately $25.0$82.7 million primarily as a result of the NOI and other changeschanges, as well as higher interest payments, discussed above in Results of Operations, the payment of approximately $58.7 million towards the settlement of various litigation proceedings (see Note 11 in the Consolidated Financial Statements for further discussion), the payment of Merger-related costs as well as the timing of certain other expense payments.

Our investing cash flows are primarily impacted by our transaction activity (acquisitions/dispositions), development spend and capital expenditures. For the quartersix months ended MarchJune 31,30, 2026, key drivers were:

Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders/unitholders and other Common Share activity. For the quartersix months ended MarchJune 31,30, 2026, key drivers were:

The following table presents the Company’s balances for cash and cash equivalents, restricted deposits and the available borrowing capacity on its revolving credit facility as of MarchJune 31,30, 2026 and December 31, 2025 (amounts in thousands):

The Company limits its utilization of the revolving credit facility in order to maintain liquidity to support its $1.5 billion commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility as of AprilJuly 24, 2026 (amounts in thousands):

The Company declared a dividend/distribution for the first quarterand second quarters of 2026 of $0.7025 per share/unit,unit in each quarter, an annualized increase of 1.4% over the amount paid in 2025. All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees.

Total dividends/distributions paid in AprilJuly 2026 amounted to $269.4$269.5 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended MarchJune 31,30, 2026.

The Company expects to meet its long-term liquidity requirements, such as lump sum unsecured note and mortgage debt maturities, property acquisitions and financing of development activities, through the issuance of secured and unsecured debt and equity securities (including additional OP Units), proceeds received from the disposition of certain properties and joint ventures, along with cash generated from operations after all distributions. The Company has a significant number of unencumbered properties available to secure additional mortgage borrowings should unsecured capital be unavailable or the cost of alternative sources of capital be too high. The value of and cash flow from these unencumbered properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $30.5$30.4 billion in investment in real estate on the Company’s balance sheet at MarchJune 31,30, 2026, $27.5$27.4 billion or 90.1%90.0% was unencumbered. However, there can be no assurances that these sources of capital will be available to the Company in the future on acceptable terms or otherwise. For additional details, see Item 1A, Risk Factors, of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2025.2025, and Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q.

The Company’s total debt summary schedule as of MarchJune 31,30, 2026 is as follows:

Debt Summary as of MarchJune 31,30, 2026 ($ in thousands)

The Company’s long-term financing and capital needs and sources have not changed materially from the information included in the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2025.2025, except as it relates to the potential Merger transaction with AvalonBay as discussed further above.

The following is the Company’s and the Operating Partnership’s reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for the six months and quarters ended MarchJune 31,30, 2026 and 2025: