Equity Residential and AvalonBay to Merge Creating a Leading National Rental Housing Platform

CHICAGO, IL - Equity Residential (NYSE: EQR) and AvalonBay Communities, Inc. (NYSE: AVB) announced a definitive agreement to combine in an all-stock merger of equals creating one of the country's leading real estate companies with the differentiated scale, capabilities, and balance sheet strength to expand margins, accelerate growth, and redefine leadership in rental housing. The new company will have a pro forma equity market capitalization of approximately $52 billion and a total enterprise value of approximately $69 billion, with more than 180,000 rental apartments.

Under the terms of the agreement, AvalonBay shareholders will receive 2.793 shares of Equity Residential common stock for each share of AvalonBay common stock owned. Upon closing, AvalonBay shareholders will own approximately 51.2 percent and Equity Residential shareholders will own approximately 48.8 percent of the combined company on a fully diluted basis. The transaction has been unanimously approved by the boards of both companies and is expected to close in the second half of 2026, subject to shareholder approval and customary closing conditions. The transaction is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes.

"This combination creates a new and fundamentally stronger company with differentiated capabilities that will drive structurally superior cash flow generation, earnings and dividend growth, and value for shareholders. As one of the country s leading developers of new apartments across our regions, we will directly increase the supply of both market rate and affordable housing. Drawing on the foundational strengths and industry-leading teams across both of our organizations, our ambition is to redefine leadership in rental housing for the benefit of residents, associates, and shareholders.

We are excited to partner with AvalonBay to continue Equity Residential s history of relentlessly seeking opportunities to create value for shareholders, said Mark J. Parrell, Equity Residential s President and CEO. The combined company s investors will benefit from accelerated growth from increased investment in operational innovation; a larger, self-funded development platform; and the variety of other value creation opportunities that world class scale affords. This, together with our similar cultures that prioritize exceeding the expectations of our employees and residents, positions the combined company to create exceptional value for its shareholders, customers and employees.

This is a transformative event in the apartment industry that will create long-term value for shareholders. By combining the two premier companies in the sector, we create a company with the size and scale to be a leading operator in the space as well as a major creator of new rental housing, said Steve Sterrett, Board Chair of the new entity and former long-time Chief Financial Officer of Simon Property Group."

What this combination signals for the multifamily industry is a consolidation of scale that aims to support a larger, self-funded development platform and increased investment in operational innovation. For operators and investors, the transaction highlights how scale can be deployed to pursue development, improve operating margins, and expand resident services. For the broader housing market, both companies emphasize an intent to increase the supply of market-rate and affordable apartments, a focus that will be watched closely as plans move from announcement to execution.

Multifamily Leadership will continue to track regulatory milestones, shareholder votes, and management integration plans as these companies move toward closing in 2026. We will also examine how the combined platform invests in technology, development pipelines, and resident experience to assess its impact on sector best practices and housing supply outcomes.