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

2022 Guidance Reflects Acceleration in Growth

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

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

Recent Highlights

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

Fourth Quarter and Full Year 2021 Results

The change in EPS for both the quarter and year ended December 31, 2021 compared to the same periods of 2020 is due primarily to higher property sale gains in the fourth quarter and year ended December 31, 2021, the various adjustment items listed on page 26 of this release and the items described below.

The per share change in FFO for both the quarter and year ended December 31, 2021 compared to the same periods of 2020 is due primarily to the various adjustment items listed on page 26 of this release and the items described below.

The per share change in Normalized FFO is due primarily to:

 

 

Positive/(Negative) Impact

 

 

 

Fourth Quarter 2021 vs.

Fourth Quarter 2020

 

 

Full Year 2021 vs.

Full Year 2020

 

Residential same store Net Operating Income (NOI)

 

$

0.05

 

 

$

(0.33

)

Non-Residential same store NOI

 

 

0.01

 

 

 

0.06

 

2021 and 2020 transaction activity impact on NOI, net

 

 

 

(0.08

)

Interest expense, net

 

 

0.02

 

 

 

0.14

 

Corporate overhead (1)

 

 

(0.01

)

 

 

(0.03

)

Other items

 

 

(0.01

)

 

 

(0.03

)

Net

 

$

0.06

 

 

$

(0.27

)

 

(1) Corporate overhead includes property management and general and administrative expenses.

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 28 through 33 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 30 and 31 of this release.

Fourth Quarter and Full Year 2021 Same Store Residential Results

The Company has provided a breakout of Residential and Non-Residential same store results on page 11 of this release with definitions that can be found on page 32 of this release. Non-Residential operations account for approximately 3.9% of total revenues for the year ended December 31, 2021. The table below reflects same store Residential only results.

 

 

Fourth Quarter 2021 vs.

Fourth Quarter 2020

 

 

Fourth Quarter 2021 vs.

Third Quarter 2021

 

 

Full Year 2021 vs.

Full Year 2020

 

Apartment Units

 

74,298

 

 

75,206

 

 

74,077

 

Physical Occupancy

 

96.6% vs. 94.2%

 

 

96.6% vs. 96.6%

 

 

96.1% vs. 95.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

4.3%

 

 

3.0%

 

 

(4.6%)

 

Expenses

 

1.8%

 

 

(3.0%)

 

 

2.8%

 

NOI

 

5.6%

 

 

6.1%

 

 

(8.1%)

 

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis. See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

 

Fourth Quarter 2021 vs.

Fourth Quarter 2020

 

 

Fourth Quarter 2021 vs.

Third Quarter 2021

 

 

Full Year 2021 vs.

Full Year 2020

 

 

% Change

 

 

% Change

 

 

% Change

 

Same Store Residential Revenues-

 

 

 

 

 

 

 

 

 

 

 

comparable period

Lease rates (1)

 

(0.2

%)

 

 

2.0

%

 

 

(5.0

%)

Leasing Concessions

 

0.2

%

 

 

0.7

%

 

 

(1.1

%)

Vacancy gain (loss)

 

2.5

%

 

 

0.0

%

 

 

1.3

%

Bad Debt, Net (2)

 

1.9

%

 

 

0.4

%

 

 

0.4

%

Other (3)

 

(0.1

%)

 

 

(0.1

%)

 

 

(0.2

%)

Same Store Residential Revenues-

current period

 

4.3

%

 

 

3.0

%

 

 

(4.6

%)

(1)

The decline in lease rates for the full year 2021 vs. full year 2020 is driven by the cumulative impact of leasing activity over the past twelve months despite meaningful recent improvements.

(2)

Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts.

(3)

Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties:

 

 

Q3 2021

 

 

Q4 2021

 

 

January 2022 (1)

 

Physical Occupancy (2)

 

96.7%

 

 

96.4%

 

 

96.6%

 

Percentage of Residents Renewing by quarter/month

57.4%

 

 

61.2%

 

 

61.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Lease Change

 

10.1%

 

 

10.6%

 

 

13.4%

 

Renewal Rate Achieved

 

5.7%

 

 

10.7%

 

 

12.3%

 

Blended Rate

 

7.6%

 

 

10.7%

 

 

12.7%

 

(1)

January 2022 results are preliminary.

(2)

Physical Occupancy is as of month-end September for Q3 2021, month-end December for Q4 2021 and as of January 27th for January 2022.

Investment Activity and Portfolio Strategy

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

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

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

First Quarter 2022 Guidance

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

 

 

Q1 2022

Guidance

EPS

 

$0.85 to $0.89

FFO per share

 

$0.75 to $0.79

Normalized FFO per share

 

$0.76 to $0.80

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

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

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

 

 

Positive/(Negative)

Impact

 

 

 

 

First Quarter 2022 vs.

Fourth Quarter 2021

 

 

Interest expense, net

 

$

(0.01

)

 

Corporate overhead

 

 

(0.03

)

 

Net

 

$

(0.04

)

 

Full Year 2022 Guidance

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

Same Store (includes Residential and Non-Residential):

 

Physical Occupancy

 

96.5%

 

Revenue change

 

8.0% to 10.0%

 

Expense change

 

2.5% to 3.5%

 

NOI change

 

11.0% to 13.0%

 

 

 

 

 

 

EPS

 

$4.18 to $4.28

 

FFO per share

 

$3.36 to $3.46

 

Normalized FFO per share

 

$3.40 to $3.50

 

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

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

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

 

 

Positive/(Negative)

Impact

 

 

 

Full Year 2022 vs

Full Year 2021

 

Same Store NOI

 

$

0.48

 

Lease-Up NOI

 

 

0.06

 

Interest expense, net

 

 

(0.04

)

Corporate overhead

 

 

(0.04

)

Net

 

$

0.46

 

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

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract high quality long-term renters. Equity Residential owns or has investments in 310 properties consisting of 80,407 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and government regulation. In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration and severity of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy and the corresponding impact on our residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses, the rollout and effectiveness of vaccines and the impact of operational changes we have implemented and may implement in response to the pandemic. Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Wednesday, February 2, 2022 at 10:00 a.m. CT. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Year Ended December 31,

 

Quarter Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,463,997

 

 

$

2,571,705

 

 

$

645,130

 

 

$

613,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

453,532

 

 

 

440,998

 

 

 

112,271

 

 

 

107,665

 

Real estate taxes and insurance

 

 

397,105

 

 

 

381,562

 

 

 

99,325

 

 

 

93,519

 

Property management

 

 

98,155

 

 

 

93,825

 

 

 

23,798

 

 

 

22,312

 

General and administrative

 

 

56,506

 

 

 

48,305

 

 

 

13,404

 

 

 

11,093

 

Depreciation

 

 

838,272

 

 

 

820,832

 

 

 

222,240

 

 

 

201,829

 

Total expenses

 

 

1,843,570

 

 

 

1,785,522

 

 

 

471,038

 

 

 

436,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

1,072,183

 

 

 

531,807

 

 

 

484,560

 

 

 

179,589

 

Impairment

 

 

(16,769

)

 

 

 

 

 

(16,769

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,675,841

 

 

 

1,317,990

 

 

 

641,883

 

 

 

356,606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

25,666

 

 

 

5,935

 

 

 

373

 

 

 

1,929

 

Other expenses

 

 

(19,275

)

 

 

(17,510

)

 

 

(8,367

)

 

 

(9,186

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(272,473

)

 

 

(365,073

)

 

 

(69,740

)

 

 

(116,724

)

Amortization of deferred financing costs

 

 

(8,737

)

 

 

(8,939

)

 

 

(2,565

)

 

 

(2,686

)

Income before income and other taxes, income (loss) from

investments in unconsolidated entities and net gain (loss)

on sales of land parcels

 

 

1,401,022

 

 

 

932,403

 

 

 

561,584

 

 

 

229,939

 

Income and other tax (expense) benefit

 

 

(915

)

 

 

(852

)

 

 

(236

)

 

 

(350

)

Income (loss) from investments in unconsolidated entities

 

 

(3,398

)

 

 

(3,284

)

 

 

(370

)

 

 

(839

)

Net gain (loss) on sales of land parcels

 

 

5

 

 

 

34,234

 

 

 

 

 

 

34,234

 

Net income

 

 

1,396,714

 

 

 

962,501

 

 

 

560,978

 

 

 

262,984

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(45,900

)

 

 

(34,010

)

 

 

(17,997

)

 

 

(9,386

)

Partially Owned Properties

 

 

(17,964

)

 

 

(14,855

)

 

 

(16,007

)

 

 

(742

)

Net income attributable to controlling interests

 

 

1,332,850

 

 

 

913,636

 

 

 

526,974

 

 

 

252,856

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares

 

$

1,329,760

 

 

$

910,546

 

 

$

526,202

 

 

$

252,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

3.56

 

 

$

2.45

 

 

$

1.40

 

 

$

0.68

 

Weighted average Common Shares outstanding

 

 

373,833

 

 

 

371,791

 

 

 

374,897

 

 

 

371,915

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

3.54

 

 

$

2.45

 

 

$

1.40

 

 

$

0.68

 

Weighted average Common Shares outstanding

 

 

388,089

 

 

 

385,874

 

 

 

389,000

 

 

 

385,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

2.41

 

 

$

2.41

 

 

$

0.6025

 

 

$

0.6025

 

Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Year Ended December 31,

 

Quarter Ended December 31,

 

 

2021

 

2020

 

2021

 

2020

Net income

 

$

1,396,714

 

 

$

962,501

 

 

$

560,978

 

 

$

262,984

 

Net (income) loss attributable to Noncontrolling Interests – Partially

Owned Properties

 

 

(17,964

)

 

 

(14,855

)

 

 

(16,007

)

 

 

(742

)

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares and Units

 

 

1,375,660

 

 

 

944,556

 

 

 

544,199

 

 

 

261,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

838,272

 

 

 

820,832

 

 

 

222,240

 

 

 

201,829

 

Depreciation – Non-real estate additions

 

 

(4,277

)

 

 

(4,564

)

 

 

(1,049

)

 

 

(1,131

)

Depreciation – Partially Owned Properties

 

 

(3,673

)

 

 

(3,345

)

 

 

(997

)

 

 

(831

)

Depreciation – Unconsolidated Properties

 

 

2,487

 

 

 

2,454

 

 

 

620

 

 

 

616

 

Net (gain) loss on sales of unconsolidated entities - operating

assets

 

 

(1,304

)

 

 

(1,636

)

 

 

(1,300

)

 

 

(636

)

Net (gain) loss on sales of real estate properties

 

 

(1,072,183

)

 

 

(531,807

)

 

 

(484,560

)

 

 

(179,589

)

Noncontrolling Interests share of gain (loss) on sales

of real estate properties

 

 

15,650

 

 

 

11,655

 

 

 

15,650

 

 

 

 

FFO available to Common Shares and Units

 

 

1,150,632

 

 

 

1,238,145

 

 

 

294,803

 

 

 

281,728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see note for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

 

16,769

 

 

 

 

 

 

16,769

 

 

 

 

Write-off of pursuit costs

 

 

6,526

 

 

 

6,869

 

 

 

2,969

 

 

 

2,005

 

Debt extinguishment and preferred share redemption (gains)

losses

 

 

744

 

 

 

39,292

 

 

 

480

 

 

 

39,255

 

Non-operating asset (gains) losses

 

 

(22,283

)

 

 

(32,590

)

 

 

731

 

 

 

(33,612

)

Other miscellaneous items

 

 

8,976

 

 

 

4,652

 

 

 

4,456

 

 

 

5,166

 

Normalized FFO available to Common Shares and Units

 

$

1,161,364

 

 

$

1,256,368

 

 

$

320,208

 

 

$

294,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

1,153,722

 

 

$

1,241,235

 

 

$

295,575

 

 

$

282,500

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

FFO available to Common Shares and Units

 

$

1,150,632

 

 

$

1,238,145

 

 

$

294,803

 

 

$

281,728

 

FFO per share and Unit – basic

 

$

2.98

 

 

$

3.22

 

 

$

0.76

 

 

$

0.73

 

FFO per share and Unit – diluted

 

$

2.96

 

 

$

3.21

 

 

$

0.76

 

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

1,164,454

 

 

$

1,259,458

 

 

$

320,980

 

 

$

295,314

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Normalized FFO available to Common Shares and Units

 

$

1,161,364

 

 

$

1,256,368

 

 

$

320,208

 

 

$

294,542

 

Normalized FFO per share and Unit – basic

 

$

3.01

 

 

$

3.27

 

 

$

0.83

 

 

$

0.77

 

Normalized FFO per share and Unit – diluted

 

$

2.99

 

 

$

3.26

 

 

$

0.82

 

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding – basic

 

 

386,096

 

 

 

384,794

 

 

 

386,851

 

 

 

384,899

 

Weighted average Common Shares and Units outstanding – diluted

 

 

388,089

 

 

 

385,874

 

 

 

389,000

 

 

 

385,756

 

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

 

 

 

December 31,

 

December 31,

 

 

2021

 

2020

ASSETS

 

 

 

 

 

 

 

 

Land

 

$

5,814,790

 

 

$

5,785,367

 

Depreciable property

 

 

22,370,811

 

 

 

20,920,654

 

Projects under development

 

 

24,307

 

 

 

411,134

 

Land held for development

 

 

62,998

 

 

 

86,170

 

Investment in real estate

 

 

28,272,906

 

 

 

27,203,325

 

Accumulated depreciation

 

 

(8,354,282

)

 

 

(7,859,657

)

Investment in real estate, net

 

 

19,918,624

 

 

 

19,343,668

 

Investments in unconsolidated entities

 

 

127,448

 

 

 

52,782

 

Cash and cash equivalents

 

 

123,832

 

 

 

42,591

 

Restricted deposits

 

 

236,404

 

 

 

57,137

 

Right-of-use assets

 

 

474,713

 

 

 

499,287

 

Other assets

 

 

288,220

 

 

 

291,426

 

Total assets

 

$

21,169,241

 

 

$

20,286,891

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

2,191,201

 

 

$

2,293,890

 

Notes, net

 

 

5,835,222

 

 

 

5,335,536

 

Line of credit and commercial paper

 

 

315,030

 

 

 

414,830

 

Accounts payable and accrued expenses

 

 

107,013

 

 

 

107,366

 

Accrued interest payable

 

 

69,510

 

 

 

65,896

 

Lease liabilities

 

 

312,335

 

 

 

329,130

 

Other liabilities

 

 

353,102

 

 

 

345,064

 

Security deposits

 

 

66,141

 

 

 

60,480

 

Distributions payable

 

 

233,502

 

 

 

232,262

 

Total liabilities

 

 

9,483,056

 

 

 

9,184,454

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

498,977

 

 

 

338,951

 

Equity:

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Preferred Shares of beneficial interest, $0.01 par value;

100,000,000 shares authorized; 745,600 shares issued and

outstanding as of December 31, 2021 and December 31, 2020

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

1,000,000,000 shares authorized; 375,527,195 shares issued

and outstanding as of December 31, 2021 and 372,302,000

shares issued and outstanding as of December 31, 2020

 

 

3,755

 

 

 

3,723

 

Paid in capital

 

 

9,121,122

 

 

 

9,128,599

 

Retained earnings

 

 

1,827,063

 

 

 

1,399,715

 

Accumulated other comprehensive income (loss)

 

 

(34,272

)

 

 

(43,666

)

Total shareholders’ equity

 

 

10,954,948

 

 

 

10,525,651

 

Noncontrolling Interests:

 

 

 

 

 

 

 

 

Operating Partnership

 

 

214,094

 

 

 

233,162

 

Partially Owned Properties

 

 

18,166

 

 

 

4,673

 

Total Noncontrolling Interests

 

 

232,260

 

 

 

237,835

 

Total equity

 

 

11,187,208

 

 

 

10,763,486

 

Total liabilities and equity

 

$

21,169,241

 

 

$

20,286,891

 

Equity Residential

Portfolio Summary

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

% of

Stabilized

 

 

Average

 

 

 

 

 

 

 

Apartment

 

 

Budgeted

 

 

Rental

 

Markets/Metro Areas

 

Properties

 

 

Units

 

 

NOI

 

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Established Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

66

 

 

 

15,259

 

 

 

18.6

%

 

$

2,673

 

Orange County

 

 

13

 

 

 

4,028

 

 

 

5.3

%

 

 

2,427

 

San Diego

 

 

11

 

 

 

2,706

 

 

 

3.7

%

 

 

2,598

 

Subtotal – Southern California

 

 

90

 

 

 

21,993

 

 

 

27.6

%

 

 

2,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

44

 

 

 

11,830

 

 

 

16.0

%

 

 

2,957

 

Washington DC

 

 

48

 

 

 

14,851

 

 

 

15.5

%

 

 

2,358

 

New York

 

 

36

 

 

 

9,343

 

 

 

13.7

%

 

 

3,597

 

Boston

 

 

27

 

 

 

7,170

 

 

 

11.4

%

 

 

3,049

 

Seattle

 

 

46

 

 

 

9,525

 

 

 

11.0

%

 

 

2,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expansion Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denver

 

 

8

 

 

 

2,498

 

 

 

2.6

%

 

 

2,197

 

Atlanta

 

 

4

 

 

 

1,215

 

 

 

1.0

%

 

 

1,935

 

Dallas/Ft. Worth

 

 

4

 

 

 

1,241

 

 

 

0.8

%

 

 

1,868

 

Austin

 

 

3

 

 

 

741

 

 

 

0.4

%

 

 

1,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

310

 

 

 

80,407

 

 

 

100.0

%

 

$

2,696

 

 

 

 

Properties

 

 

Apartment Units

 

 

 

 

 

 

 

 

 

 

Wholly Owned Properties

 

 

294

 

 

 

76,861

 

Partially Owned Properties – Consolidated

 

 

16

 

 

 

3,546

 

 

 

 

 

 

 

 

 

 

 

 

 

310

 

 

 

80,407

 

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

Equity Residential

Portfolio Rollforward Q4 2021

($ in thousands)

 

 

 

 

 

Properties

 

 

Apartment

Units

 

 

Purchase

Price

 

 

Acquisition

Cap Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9/30/2021

 

 

307

 

 

 

79,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

 

 

5

 

 

 

1,405

 

 

$

564,954

 

 

 

3.6

%

Consolidated Rental Properties – Not Stabilized (A)

 

 

1

 

 

 

421

 

 

$

124,000

 

 

 

3.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

 

Disposition

Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

 

 

(4

)

 

 

(1,211

)

 

$

(694,975

)

 

 

(3.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Consolidated

 

 

 

 

1

 

 

 

470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2021

 

 

310

 

 

 

80,407

 

 

 

 

 

 

 

 

 

 

Portfolio Rollforward 2021

($ in thousands)

 

 

 

 

 

Properties

 

 

Apartment

Units

 

 

Purchase

Price

 

 

Acquisition

Cap Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2020

 

 

304

 

 

 

77,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

 

 

13

 

 

 

3,533

 

 

$

1,249,679

 

 

 

3.7

%

Consolidated Rental Properties – Not Stabilized (A)

 

 

4

 

 

 

1,214

 

 

$

459,700

 

 

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

 

Disposition

Yield

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

 

 

(14

)

 

 

(3,053

)

 

$

(1,716,775

)

 

 

(3.7

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Consolidated

 

 

 

 

3

 

 

 

824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2021

 

 

310

 

 

 

80,407

 

 

 

 

 

 

 

 

 

(A)

The Company acquired four properties during the year ended December 31, 2021, including a property in the Dallas/Ft. Worth market in the fourth quarter of 2021, that are in lease-up and are expected to stabilize in their second year of ownership at the combined Acquisition Cap Rates listed above.

Equity Residential

Fourth Quarter 2021 vs. Fourth Quarter 2020

Same Store Results/Statistics Including 74,298 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

Fourth Quarter 2021

 

 

Fourth Quarter 2020

 

 

Residential

 

 

%

Change

 

 

Non-

Residential

 

 

%

Change

 

 

Total

 

 

%

Change

 

 

 

Residential

 

 

Non-

Residential

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

587,533

 

(1)

4.3%

 

 

$

23,968

 

(2)

21.0%

 

 

$

611,501

 

 

4.9%

 

 

Revenues

$

563,146

 

 

$

19,811

 

 

$

582,957

 

Expenses

$

192,359

 

 

1.8%

 

 

$

6,251

 

 

13.5%

 

 

$

198,610

 

 

2.1%

 

 

Expenses

$

188,925

 

 

$

5,509

 

 

$

194,434

 

NOI

$

395,174

 

 

5.6%

 

 

$

17,717

 

 

23.9%

 

 

$

412,891

 

 

6.3%

 

 

NOI

$

374,221

 

 

$

14,302

 

 

$

388,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,729

 

 

1.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,685

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.6

%

 

2.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

94.2

%

 

 

 

 

 

 

 

 

Turnover

 

9.4

%

 

(4.0%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turnover

 

13.4

%

 

 

 

 

 

 

 

 

 

Fourth Quarter 2021 vs. Third Quarter 2021

Same Store Results/Statistics Including 75,206 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

Fourth Quarter 2021

 

 

Third Quarter 2021

 

 

Residential

 

 

%

Change

 

 

Non-

Residential

 

 

%

Change

 

 

Total

 

 

%

Change

 

 

 

Residential

 

 

Non-

Residential

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

592,709

 

(1)

3.0%

 

 

$

24,112

 

(2)

6.4%

 

 

$

616,821

 

 

3.1%

 

 

Revenues

$

575,689

 

 

$

22,670

 

 

$

598,359

 

Expenses

$

194,200

 

 

(3.0%)

 

 

$

6,290

 

 

5.5%

 

 

$

200,490

 

 

(2.7%)

 

 

Expenses

$

200,116

 

 

$

5,964

 

 

$

206,080

 

NOI

$

398,509

 

 

6.1%

 

 

$

17,822

 

 

6.7%

 

 

$

416,331

 

 

6.1%

 

 

NOI

$

375,573

 

 

$

16,706

 

 

$

392,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,720

 

 

2.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,643

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.6

%

 

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.6

%

 

 

 

 

 

 

 

 

Turnover

 

9.4

%

 

(4.4%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turnover

 

13.8

%

 

 

 

 

 

 

 

 

2021 vs. 2020

Same Store Results/Statistics Including 74,077 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

2021

 

 

2020

 

 

Residential

 

 

%

Change

 

 

Non-

Residential

 

 

%

Change

 

 

Total

 

 

%

Change

 

 

 

Residential

 

 

Non-

Residential

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

2,253,068

 

(1)

(4.6%)

 

 

$

89,189

 

(2)

40.1%

 

 

$

2,342,257

 

 

(3.4%)

 

 

Revenues

$

2,361,359

 

 

$

63,666

 

 

$

2,425,025

 

Expenses

$

779,729

 

 

2.8%

 

 

$

24,266

 

 

9.7%

 

 

$

803,995

 

 

3.0%

 

 

Expenses

$

758,257

 

 

$

22,124

 

 

$

780,381

 

NOI

$

1,473,339

 

 

(8.1%)

 

 

$

64,923

 

 

56.3%

 

 

$

1,538,262

 

 

(6.5%)

 

 

NOI

$

1,603,102

 

 

$

41,542

 

 

$

1,644,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,640

 

 

(5.6%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,797

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.1

%

 

1.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

95.0

%

 

 

 

 

 

 

 

 

Turnover

 

44.4

%

 

(8.5%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Turnover

 

52.9

%

 

 

 

 

 

 

 

 

(1)

See page 12 for Same Store Residential Revenues with Leasing Concessions reflected on a cash basis. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

 

 

(2)

Changes in same store Non-Residential revenues for the periods presented are primarily driven by the following:

 

• Fourth Quarter 2021 vs. Fourth Quarter 2020 – Higher parking income and lower bad debt.

 

• Fourth Quarter 2021 vs. Third Quarter 2021 – Lower deferral/abatement of rents and higher parking income.

 

• 2021 vs. 2020 – The write-off of Non-Residential straight-line lease receivables in 2020 and lower bad debt in 2021.

Equity Residential

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

$ in thousands

 

 

Fourth Quarter 2021 vs. Fourth Quarter 2020

 

 

Fourth Quarter 2021 vs. Third Quarter 2021

 

 

2021 vs. 2020

 

 

74,298 Same Store Apartment Units

 

 

75,206 Same Store Apartment Units

 

 

74,077 Same Store Apartment Units

 

 

Q4 2021

 

 

Q4 2020

 

 

Q4 2021

 

 

Q3 2021

 

 

2021

 

2020

Same Store Residential Revenues (GAAP Basis)

$

587,533

 

 

$

563,146

 

 

$

592,709

 

 

$

575,689

 

 

$

2,253,068

 

 

$

2,361,359

 

Leasing Concessions amortized

 

7,020

 

 

 

8,254

 

 

 

7,092

 

 

 

10,955

 

 

 

42,377

 

 

 

15,055

 

Leasing Concessions granted

 

(339

)

 

 

(16,630

)

 

 

(352

)

 

 

(2,221

)

 

 

(27,530

)

 

 

(33,085

)

Same Store Residential Revenues with Leasing

Concessions on a cash basis

$

594,214

 

 

$

554,770

 

 

$

599,449

 

 

$

584,423

 

 

$

2,267,915

 

 

$

2,343,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change - GAAP revenue

 

4.3

%

 

 

 

 

 

 

3.0

%

 

 

 

 

 

 

(4.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change - cash revenue

 

7.1

%

 

 

 

 

 

 

2.6

%

 

 

 

 

 

 

(3.2

%)

 

 

 

 

(1)  

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

     
Same Store Resident/Tenant Accounts Receivable Balances

Including 74,077 Same Store Apartment Units

$ in thousands

 

 

Residential

 

 

Non-Residential

 

Balance Sheet (Other assets):

December 31, 2021

 

 

September 30, 2021

 

 

December 31, 2021

 

 

September 30, 2021

 

Resident/tenant accounts receivable balances

$

37,163

 

 

$

42,067

 

 

$

3,192

 

 

$

4,064

 

Allowance for doubtful accounts

 

(32,513

)

 

 

(36,656

)

 

 

(2,365

)

 

 

(3,442

)

Net receivable balances

$

4,650

 

(1)

$

5,411

 

 

$

827

 

 

$

622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line receivable balances

$

4,771

 

(2)

$

11,438

 

 

$

12,658

 

 

$

12,698

 

(1)

The Company held same store Residential security deposits approximating 48.5% of the net receivable balance at December 31, 2021.

(2)

Total same store Residential Leasing Concessions granted in the fourth quarter of 2021 were approximately $0.3 million. The straight-line receivable balance of $4.8 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in 2022.

 

Same Store Residential Bad Debt

Including 74,077 Same Store Apartment Units

$ in thousands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement (Rental income):

 

Q4 2021

 

Q3 2021

 

Q4 2020

 

2021

 

2020

Bad Debt, Net (1)

 

$

1,612

 

 

$

3,978

 

 

$

12,687

 

 

$

30,745

 

 

$

40,759

 

% of Same Store Residential Revenues

 

 

0.3

%

 

 

0.7

%

 

 

2.3

%

 

 

1.4

%

 

 

1.7

%

 

(1)

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

Equity Residential

Fourth Quarter 2021 vs. Fourth Quarter 2020

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year's Quarter

 

Markets/Metro Areas

 

Apartment

Units

 

 

Q4 2021

% of

Actual

NOI

 

 

Q4 2021

Average

Rental

Rate

 

 

Q4 2021

Weighted

Average

Physical

Occupancy%

 

 

Q4 2021

Turnover

 

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

15,259

 

 

 

21.3

%

 

$

2,673

 

 

 

96.9

%

 

 

9.3

%

 

 

11.1

%

 

 

(1.0

%)

 

 

17.0

%

 

 

9.8

%

 

 

1.1

%

 

 

(4.3

%)

Orange County

 

 

4,028

 

 

 

5.7

%

 

 

2,427

 

 

 

97.7

%

 

 

7.4

%

 

 

10.2

%

 

 

0.7

%

 

 

13.1

%

 

 

9.2

%

 

 

0.9

%

 

 

(3.3

%)

San Diego

 

 

2,706

 

 

 

4.1

%

 

 

2,598

 

 

 

97.2

%

 

 

8.6

%

 

 

9.4

%

 

 

(0.4

%)

 

 

12.5

%

 

 

9.5

%

 

 

(0.1

%)

 

 

(2.8

%)

Subtotal – Southern California

 

 

21,993

 

 

 

31.1

%

 

 

2,619

 

 

 

97.1

%

 

 

8.9

%

 

 

10.8

%

 

 

(0.7

%)

 

 

15.6

%

 

 

9.7

%

 

 

1.0

%

 

 

(3.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

11,630

 

 

 

17.7

%

 

 

2,946

 

 

 

96.4

%

 

 

10.7

%

 

 

(0.2

%)

 

 

2.4

%

 

 

(1.3

%)

 

 

(4.4

%)

 

 

4.1

%

 

 

(5.4

%)

Washington DC

 

 

14,322

 

 

 

16.6

%

 

 

2,348

 

 

 

97.0

%

 

 

9.0

%

 

 

0.0

%

 

 

4.9

%

 

 

(2.2

%)

 

 

(1.7

%)

 

 

1.6

%

 

 

(3.8

%)

New York

 

 

9,343

 

 

 

12.5

%

 

 

3,597

 

 

 

97.4

%

 

 

6.9

%

 

 

6.9

%

 

 

2.3

%

 

 

11.8

%

 

 

(1.7

%)

 

 

7.8

%

 

 

(4.9

%)

Seattle

 

 

8,956

 

 

 

10.5

%

 

 

2,340

 

 

 

95.0

%

 

 

11.5

%

 

 

(0.7

%)

 

 

1.9

%

 

 

(1.8

%)

 

 

(1.2

%)

 

 

0.5

%

 

 

(2.6

%)

Boston

 

 

6,430

 

 

 

9.7

%

 

 

2,976

 

 

 

95.8

%

 

 

9.4

%

 

 

2.7

%

 

 

1.5

%

 

 

3.2

%

 

 

0.6

%

 

 

1.9

%

 

 

(3.5

%)

Denver

 

 

1,624

 

 

 

1.9

%

 

 

2,170

 

 

 

96.5

%

 

 

14.3

%

 

 

10.0

%

 

 

(4.4

%)

 

 

16.0

%

 

 

8.3

%

 

 

1.4

%

 

 

(1.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

74,298

 

 

 

100.0

%

 

$

2,729

 

 

 

96.6

%

 

 

9.4

%

 

 

4.3

%

(1)

 

1.8

%

 

 

5.6

%

 

 

1.6

%

 

 

2.4

%

 

 

(4.0

%)

(1)

With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 7.1% in the fourth quarter of 2021 compared to the fourth quarter of 2020. See page 12 for additional detail and reconciliations.

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

Equity Residential

Fourth Quarter 2021 vs. Third Quarter 2021

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Quarter

 

Markets/Metro Areas

 

Apartment

Units

 

 

Q4 2021

% of

Actual

NOI

 

 

Q4 2021

Average

Rental

Rate

 

 

Q4 2021

Weighted

Average

Physical

Occupancy%

 

 

Q4 2021

Turnover

 

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

15,259

 

 

 

21.1

%

 

$

2,673

 

 

 

96.9

%

 

 

9.3

%

 

 

5.2

%

 

 

(4.0

%)

 

 

9.4

%

 

 

5.5

%

 

 

(0.4

%)

 

 

(2.4

%)

Orange County

 

 

4,028

 

 

 

5.7

%

 

 

2,427

 

 

 

97.7

%

 

 

7.4

%

 

 

1.4

%

 

 

(6.7

%)

 

 

3.8

%

 

 

1.9

%

 

 

(0.4

%)

 

 

(3.6

%)

San Diego

 

 

2,706

 

 

 

4.0

%

 

 

2,598

 

 

 

97.2

%

 

 

8.6

%

 

 

1.1

%

 

 

(5.5

%)

 

 

3.1

%

 

 

1.8

%

 

 

(0.6

%)

 

 

(5.4

%)

Subtotal – Southern California

 

 

21,993

 

 

 

30.8

%

 

 

2,619

 

 

 

97.1

%

 

 

8.9

%

 

 

4.0

%

 

 

(4.5

%)

 

 

7.5

%

 

 

4.4

%

 

 

(0.4

%)

 

 

(3.0

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

11,630

 

 

 

17.5

%

 

 

2,946

 

 

 

96.4

%

 

 

10.7

%

 

 

2.6

%

 

 

(3.1

%)

 

 

5.2

%

 

 

1.5

%

 

 

1.1

%

 

 

(3.6

%)

Washington DC

 

 

14,535

 

 

 

16.7

%

 

 

2,343

 

 

 

97.0

%

 

 

9.0

%

 

 

0.9

%

 

 

(4.2

%)

 

 

3.6

%

 

 

0.5

%

 

 

0.4

%

 

 

(5.7

%)

New York

 

 

9,343

 

 

 

12.4

%

 

 

3,597

 

 

 

97.4

%

 

 

6.9

%

 

 

4.0

%

 

 

1.4

%

 

 

6.7

%

 

 

3.3

%

 

 

0.6

%

 

 

(5.3

%)

Seattle

 

 

9,331

 

 

 

10.8

%

 

 

2,326

 

 

 

95.0

%

 

 

11.5

%

 

 

2.4

%

 

 

(5.3

%)

 

 

6.1

%

 

 

3.6

%

 

 

(1.1

%)

 

 

(2.9

%)

Boston

 

 

6,430

 

 

 

9.6

%

 

 

2,976

 

 

 

95.8

%

 

 

9.4

%

 

 

3.3

%

 

 

(4.3

%)

 

 

7.1

%

 

 

3.3

%

 

 

0.0

%

 

 

(7.6

%)

Denver

 

 

1,624

 

 

 

1.9

%

 

 

2,170

 

 

 

96.5

%

 

 

14.3

%

 

 

3.4

%

 

 

(11.6

%)

 

 

9.7

%

 

 

3.7

%

 

 

(0.4

%)

 

 

(4.1

%)

Other Expansion Markets

 

 

320

 

 

 

0.3

%

 

 

1,906

 

 

 

96.5

%

 

 

6.3

%

 

 

(2.5

%)

 

 

12.5

%

 

 

(11.1

%)

 

 

(2.1

%)

 

 

(0.4

%)

 

 

(7.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

75,206

 

 

 

100.0

%

 

$

2,720

 

 

 

96.6

%

 

 

9.4

%

 

 

3.0

%

(1)

 

(3.0

%)

 

 

6.1

%

 

 

2.9

%

 

 

0.0

%

 

 

(4.4

%)

(1)

With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 2.6% in the fourth quarter of 2021 compared to the third quarter of 2021. See page 12 for additional detail and reconciliations.

 

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

Equity Residential

2021 vs. 2020

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year

 

Markets/Metro Areas

 

Apartment

Units

 

 

2021

% of

Actual

NOI

 

 

2021

Average

Rental

Rate

 

 

2021

Weighted

Average

Physical

Occupancy%

 

 

2021

Turnover

 

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

15,259

 

 

 

20.5

%

 

$

2,501

 

 

 

96.6

%

 

 

41.5

%

 

 

0.3

%

 

 

0.9

%

 

 

0.1

%

 

 

(0.7

%)

 

 

1.0

%

 

 

(10.4

%)

Orange County

 

 

4,028

 

 

 

5.7

%

 

 

2,318

 

 

 

97.7

%

 

 

34.6

%

 

 

4.0

%

 

 

1.8

%

 

 

4.6

%

 

 

2.9

%

 

 

1.0

%

 

 

(10.7

%)

San Diego

 

 

2,706

 

 

 

4.1

%

 

 

2,484

 

 

 

97.6

%

 

 

43.1

%

 

 

5.3

%

 

 

1.2

%

 

 

6.6

%

 

 

4.6

%

 

 

0.6

%

 

 

(5.9

%)

Subtotal – Southern California

 

 

21,993

 

 

 

30.3

%

 

 

2,465

 

 

 

96.9

%

 

 

40.4

%

 

 

1.5

%

 

 

1.0

%

 

 

1.8

%

 

 

0.5

%

 

 

0.9

%

 

 

(9.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

11,630

 

 

 

18.0

%

 

 

2,900

 

 

 

95.1

%

 

 

48.2

%

 

 

(10.8

%)

 

 

3.4

%

 

 

(15.9

%)

 

 

(11.3

%)

 

 

0.6

%

 

 

(8.7

%)

Washington DC

 

 

14,322

 

 

 

17.5

%

 

 

2,332

 

 

 

96.5

%

 

 

45.3

%

 

 

(3.5

%)

 

 

4.2

%

 

 

(6.9

%)

 

 

(4.3

%)

 

 

0.9

%

 

 

(5.0

%)

New York

 

 

9,343

 

 

 

12.1

%

 

 

3,497

 

 

 

95.2

%

 

 

37.5

%

 

 

(7.4

%)

 

 

2.7

%

 

 

(16.4

%)

 

 

(9.6

%)

 

 

2.4

%

 

 

(13.8

%)

Seattle

 

 

8,819

 

 

 

10.6

%

 

 

2,274

 

 

 

95.6

%

 

 

50.6

%

 

 

(6.9

%)

 

 

4.1

%

 

 

(11.3

%)

 

 

(7.1

%)

 

 

0.2

%

 

 

(4.0

%)

Boston

 

 

6,346

 

 

 

9.6

%

 

 

2,883

 

 

 

95.7

%

 

 

47.0

%

 

 

(5.4

%)

 

 

3.4

%

 

 

(9.1

%)

 

 

(7.0

%)

 

 

1.5

%

 

 

(9.3

%)

Denver

 

 

1,624

 

 

 

1.9

%

 

 

2,066

 

 

 

96.6

%

 

 

60.2

%

 

 

3.3

%

 

 

2.0

%

 

 

3.8

%

 

 

1.4

%

 

 

1.7

%

 

 

(9.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

74,077

 

 

 

100.0

%

 

$

2,640

 

 

 

96.1

%

 

 

44.4

%

 

 

(4.6

%)

(1)

 

2.8

%

 

 

(8.1

%)

 

 

(5.6

%)

 

 

1.1

%

 

 

(8.5

%)

(1)

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

 

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

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics

For 74,077 Same Store Apartment Units

 

 

 

New Lease Change (1)

 

 

Renewal Rate Achieved (1)

 

 

Blended Rate (1)

 

Markets/Metro Areas

 

Q4 2021

 

 

Q3 2021

 

 

Q4 2021

 

 

Q3 2021

 

 

Q4 2021

 

 

Q3 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southern California

 

 

13.4

%

 

 

13.6

%

 

 

7.1

%

 

 

6.1

%

 

 

9.4

%

 

 

9.1

%

San Francisco

 

 

3.6

%

 

 

3.0

%

 

 

12.4

%

 

 

6.0

%

 

 

8.1

%

 

 

4.5

%

Washington DC

 

 

6.0

%

 

 

4.0

%

 

 

6.8

%

 

 

2.2

%

 

 

6.5

%

 

 

3.0

%

New York

 

 

20.2

%

 

 

13.8

%

 

 

14.5

%

 

 

8.0

%

 

 

16.6

%

 

 

10.4

%

Seattle

 

 

11.0

%

 

 

15.7

%

 

 

16.9

%

 

 

4.3

%

 

 

14.1

%

 

 

8.9

%

Boston

 

 

12.6

%

 

 

13.3

%

 

 

14.6

%

 

 

6.4

%

 

 

13.8

%

 

 

9.7

%

Denver

 

 

12.4

%

 

 

16.1

%

 

 

12.8

%

 

 

8.0

%

 

 

12.6

%

 

 

12.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

10.6

%

 

 

10.1

%

 

 

10.7

%

 

 

5.7

%

 

 

10.7

%

 

 

7.6

%

 

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

Equity Residential

Fourth Quarter 2021 vs. Fourth Quarter 2020

Total Same Store Operating Expenses Including 74,298 Same Store Apartment Units

$ in thousands

 

 

 

Q4 2021

 

 

Q4 2020

 

 

$

Change (1)

 

 

%

Change

 

 

% of

Q4 2021

Operating

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate taxes

 

$

86,597

 

 

$

85,588

 

 

$

1,009

 

 

 

1.2

%

 

 

43.6

%

On-site payroll

 

 

38,395

 

 

 

39,281

 

 

 

(886

)

 

 

(2.3

%)

 

 

19.3

%

Utilities

 

 

29,574

 

 

 

26,222

 

 

 

3,352

 

 

 

12.8

%

 

 

14.9

%

Repairs and maintenance

 

 

23,386

 

 

 

24,124

 

 

 

(738

)

 

 

(3.1

%)

 

 

11.8

%

Insurance

 

 

6,645

 

 

 

6,037

 

 

 

608

 

 

 

10.1

%

 

 

3.3

%

Leasing and advertising

 

 

2,731

 

 

 

3,069

 

 

 

(338

)

 

 

(11.0

%)

 

 

1.4

%

Other on-site operating expenses

 

 

11,282

 

 

 

10,113

 

 

 

1,169

 

 

 

11.6

%

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Same Store Operating Expenses (2)

(includes Residential and Non-Residential)

 

$

198,610

 

 

$

194,434

 

 

$

4,176

 

 

 

2.1

%

 

 

100.0

%

 

2021 vs. 2020

Total Same Store Operating Expenses Including 74,077 Same Store Apartment Units

$ in thousands

 

 

 

2021

 

 

2020

 

 

$

Change (1)

 

 

%

Change

 

 

% of

2021

Operating

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate taxes

 

$

347,339

 

 

$

342,090

 

 

$

5,249

 

 

 

1.5

%

 

 

43.2

%

On-site payroll

 

 

160,798

 

 

 

162,387

 

 

 

(1,589

)

 

 

(1.0

%)

 

 

20.0

%

Utilities

 

 

113,821

 

 

 

103,612

 

 

 

10,209

 

 

 

9.9

%

 

 

14.2

%

Repairs and maintenance

 

 

99,472

 

 

 

94,239

 

 

 

5,233

 

 

 

5.6

%

 

 

12.4

%

Insurance

 

 

26,513

 

 

 

24,086

 

 

 

2,427

 

 

 

10.1

%

 

 

3.3

%

Leasing and advertising

 

 

10,647

 

 

 

10,369

 

 

 

278

 

 

 

2.7

%

 

 

1.3

%

Other on-site operating expenses

 

 

45,405

 

 

 

43,598

 

 

 

1,807

 

 

 

4.1

%

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Same Store Operating Expenses (2)

(includes Residential and Non-Residential)

 

$

803,995

 

 

$

780,381

 

 

$

23,614

 

 

 

3.0

%

 

 

100.0

%

 

(1)

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

 

 

 

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

 

 

 

On-site payroll – Improved sales and service staff utilization from various technology initiatives and higher than usual staffing vacancies during the current periods.

 

 

 

Utilities – Water, sewer and trash charges (approximately 65% of total) increased due to both usage and rate. Natural gas and electric charges (approximately 35% of total) increased due to higher commodity prices.

 

 

 

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

 

 

 

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

 

 

 

Leasing and advertising – Year-over-year increase primarily driven by increased digital advertising.

 

 

 

Other on-site operating expenses – Increase driven by higher ground lease-related expenses.

 

 

(2)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of December 31, 2021

($ in thousands)

 

 

 

Debt

Balances (1)

 

 

% of Total

 

 

Weighted

Average

Rates (1)

 

 

Weighted

Average

Maturities

(years)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured

 

$

2,191,201

 

 

 

26.3

%

 

 

3.18

%

 

 

4.8

 

Unsecured

 

 

6,150,252

 

 

 

73.7

%

 

 

3.39

%

 

 

9.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,341,453

 

 

 

100.0

%

 

 

3.33

%

 

 

8.2

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,896,472

 

 

 

22.8

%

 

 

3.66

%

 

 

4.0

 

Unsecured – Public

 

 

5,835,222

 

 

 

69.9

%

 

 

3.65

%

 

 

10.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Rate Debt

 

 

7,731,694

 

 

 

92.7

%

 

 

3.65

%

 

 

8.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

 

59,890

 

 

 

0.7

%

 

 

2.51

%

 

 

0.5

 

Secured – Tax Exempt

 

 

234,839

 

 

 

2.8

%

 

 

0.48

%

 

 

12.5

 

Unsecured – Revolving Credit Facility

 

 

 

 

 

 

 

 

0.88

%

 

 

2.8

 

Unsecured – Commercial Paper Program (2)

 

 

315,030

 

 

 

3.8

%

 

 

0.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Floating Rate Debt

 

 

609,759

 

 

 

7.3

%

 

 

0.48

%

 

 

5.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,341,453

 

 

 

100.0

%

 

 

3.33

%

 

 

8.2

 

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(2)

At December 31, 2021, the weighted average maturity of commercial paper outstanding was 27 days. The weighted average amount outstanding for the year ended December 31, 2021 was approximately $471.0 million.

 

Note: The Company capitalized interest of approximately $15.9 million and $10.2 million during the years ended December 31, 2021 and 2020, respectively. The Company capitalized interest of approximately $3.5 million and $3.3 million during the quarters ended December 31, 2021 and 2020, respectively.

Equity Residential

Debt Maturity Schedule as of December 31, 2021

($ 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

$

264,185

 

 

$

376,904

 

(2)

$

641,089

 

 

 

7.6

%

 

 

3.25

%

 

 

1.75

%

2023

 

 

1,325,588

 

 

 

3,500

 

 

 

1,329,088

 

 

 

15.8

%

 

 

3.74

%

 

 

3.73

%

2024

 

 

 

 

 

6,100

 

 

 

6,100

 

 

 

0.1

%

 

N/A

 

 

 

0.09

%

2025

 

 

450,000

 

 

 

8,200

 

 

 

458,200

 

 

 

5.4

%

 

 

3.38

%

 

 

3.32

%

2026

 

 

592,025

 

 

 

9,000

 

 

 

601,025

 

 

 

7.1

%

 

 

3.58

%

 

 

3.53

%

2027

 

 

400,000

 

 

 

9,800

 

 

 

409,800

 

 

 

4.9

%

 

 

3.25

%

 

 

3.17

%

2028

 

 

900,000

 

 

 

10,700

 

 

 

910,700

 

 

 

10.8

%

 

 

3.79

%

 

 

3.75

%

2029

 

 

888,120

 

 

 

11,500

 

 

 

899,620

 

 

 

10.7

%

 

 

3.30

%

 

 

3.26

%

2030

 

 

1,095,000

 

 

 

12,600

 

 

 

1,107,600

 

 

 

13.2

%

 

 

2.55

%

 

 

2.52

%

2031

 

 

528,500

 

 

 

39,700

 

 

 

568,200

 

 

 

6.7

%

 

 

1.94

%

 

 

1.81

%

2032+

 

 

1,350,850

 

 

 

138,900

 

 

 

1,489,750

 

 

 

17.7

%

 

 

4.39

%

 

 

3.99

%

Subtotal

 

 

7,794,268

 

 

 

626,904

 

 

 

8,421,172

 

 

 

100.0

%

 

 

3.44

%

 

 

3.22

%

Deferred Financing Costs and Unamortized (Discount)

 

 

(62,574

)

 

 

(17,145

)

 

 

(79,719

)

 

N/A

 

 

N/A

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

7,731,694

 

 

$

609,759

 

 

$

8,341,453

 

 

 

100.0

%

 

 

3.44

%

 

 

3.22

%

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(2)

Includes $315.1 million in principal outstanding on the Company’s commercial paper program.

Equity Residential

Selected Unsecured Public Debt Covenants

 

 

 

December 31,

 

 

September 30,

 

 

 

2021

 

 

2021

 

Debt to Adjusted Total Assets (not to exceed 60%)

 

30.3%

 

 

30.0%

 

 

 

 

 

 

 

 

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

 

8.7%

 

 

9.2%

 

 

 

 

 

 

 

 

Consolidated Income Available for Debt Service to

Maximum Annual Service Charges

(must be at least 1.5 to 1)

 

5.05

 

 

4.93

 

 

 

 

 

 

 

 

Total Unencumbered Assets to Unsecured Debt

(must be at least 125%)

 

441.0%

 

 

453.9%

 

 

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

 

 

 

December 31,

 

 

September 30,

 

 

 

2021

 

 

2021

 

Total debt to Normalized EBITDAre

 

5.71x

 

 

5.64x

 

 

 

 

 

 

 

 

 

 

Net debt to Normalized EBITDAre

 

5.61x

 

 

5.60x

 

 

 

 

 

 

 

 

 

 

Unencumbered NOI as a % of total NOI

 

87.7%

 

 

87.1%

 

 

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of December 31, 2021

(Amounts in thousands except for share/unit and per share amounts)

 

Secured Debt

 

 

 

 

 

 

 

 

 

$

2,191,201

 

 

 

26.3

%

 

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

 

 

6,150,252

 

 

 

73.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

 

 

 

 

 

 

 

 

 

8,341,453

 

 

 

100.0

%

 

 

19.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares (includes Restricted Shares)

 

 

375,527,195

 

 

 

96.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

12,659,027

 

 

 

3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

388,186,222

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Price at December 31, 2021

 

$

90.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,130,853

 

 

 

99.9

%

 

 

 

 

Perpetual Preferred Equity (see below)

 

 

 

 

 

 

 

 

 

 

37,280

 

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

 

 

 

 

 

 

 

 

35,168,133

 

 

 

100.0

%

 

 

80.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

 

 

 

 

 

 

 

 

$

43,509,586

 

 

 

 

 

 

 

100.0

%

 

Perpetual Preferred Equity as of December 31, 2021

(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

 

 

 

2021

 

 

2020

 

 

Q4 2021

 

 

Q4 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Amounts Outstanding for Net Income Purposes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares - basic

 

 

373,832,544

 

 

 

371,790,858

 

 

 

374,896,938

 

 

 

371,914,798

 

Shares issuable from assumed conversion/vesting of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- OP Units

 

 

12,263,129

 

 

 

13,002,929

 

 

 

11,953,738

 

 

 

12,984,015

 

- long-term compensation shares/units

 

 

1,924,305

 

 

 

1,079,769

 

 

 

2,065,188

 

 

 

856,809

 

- ATM forward sales

 

 

69,170

 

 

 

 

 

 

84,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Shares and Units - diluted

 

 

388,089,148

 

 

 

385,873,556

 

 

 

388,999,895

 

 

 

385,755,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares - basic

 

 

373,832,544

 

 

 

371,790,858

 

 

 

374,896,938

 

 

 

371,914,798

 

OP Units - basic

 

 

12,263,129

 

 

 

13,002,929

 

 

 

11,953,738

 

 

 

12,984,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Shares and OP Units - basic

 

 

386,095,673

 

 

 

384,793,787

 

 

 

386,850,676

 

 

 

384,898,813

 

Shares issuable from assumed conversion/vesting of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- long-term compensation shares/units

 

 

1,924,305

 

 

 

1,079,769

 

 

 

2,065,188

 

 

 

856,809

 

- ATM forward sales

 

 

69,170

 

 

 

 

 

 

84,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Common Shares and Units - diluted

 

 

388,089,148

 

 

 

385,873,556

 

 

 

388,999,895

 

 

 

385,755,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Ending Amounts Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares (includes Restricted Shares)

 

 

375,527,195

 

 

 

372,302,000

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

12,659,027

 

 

 

13,858,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

388,186,222

 

 

 

386,160,073

 

 

 

 

 

 

 

 

 

Equity Residential

Development and Lease-Up Projects as of December 31, 2021

(Amounts in thousands except for project and apartment unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated/Actual

 

 

Projects

 

Location

 

Ownership

Percentage

 

 

No. of

Apartment

Units

 

 

Total

Budgeted

Capital

Cost

 

 

Total

Book

Value

to Date

 

 

Total

Debt (A)

 

 

Percentage

Completed

 

 

Start

Date

 

Initial

Occupancy

 

Completion

Date

 

Stabilization

Date

 

Percentage

Leased /

Occupied

CONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9th and W (B)

 

Washington, DC

 

92%

 

 

 

312

 

 

$

108,027

 

 

$

24,307

 

 

$

 

 

16%

 

 

Q3 2021

 

Q2 2023

 

Q3 2023

 

Q3 2024

 

– / –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development - Consolidated

 

 

 

 

 

 

312

 

 

 

108,027

 

 

 

24,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed Not Stabilized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Edge (fka 4885 Edgemoor Lane) (B)

 

Bethesda, MD

 

100%

 

 

 

154

 

 

 

75,271

 

 

 

73,091

 

 

 

 

 

100%

 

 

Q3 2019

 

Q3 2021

 

Q3 2021

 

Q3 2022

 

62% / 54%

Aero Apartments

 

Alameda, CA

 

90%

 

 

 

200

 

 

 

117,794

 

 

 

113,361

 

 

 

61,662

 

 

100%

 

 

Q3 2019

 

Q2 2021

 

Q2 2021

 

Q2 2022

 

71% / 70%

Alcott Apartments (fka West End Tower)

 

Boston, MA

 

100%

 

 

 

470

 

 

 

409,749

 

 

 

398,138

 

 

 

 

 

98%

 

 

Q2 2018

 

Q3 2021

 

Q4 2021

 

Q1 2023

 

52% / 43%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed Not Stabilized - Consolidated

 

 

 

 

 

 

824

 

 

 

602,814

 

 

 

584,590

 

 

 

61,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNCONSOLIDATED: (C)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alloy Sunnyside

 

Denver, CO

 

80%

 

 

 

209

 

 

 

66,004

 

 

 

15,554

 

 

 

 

 

12%

 

 

Q3 2021

 

Q2 2023

 

Q4 2023

 

Q3 2024

 

– / –

Alexan Harrison

 

Harrison, NY

 

62%

 

 

 

450

 

 

 

198,664

 

 

 

52,041

 

 

 

 

 

4%

 

 

Q3 2021

 

Q3 2023

 

Q2 2024

 

Q4 2025

 

– / –

Solana Beeler Park

 

Denver, CO

 

90%

 

 

 

270

 

 

 

79,956

 

 

 

12,739

 

 

 

 

 

1%

 

 

Q4 2021

 

Q4 2023

 

Q2 2024

 

Q1 2025

 

– / –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development - Unconsolidated

 

 

 

 

 

 

929

 

 

 

344,624

 

 

 

80,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Consolidated

 

 

 

 

 

 

 

 

1,136

 

 

 

710,841

 

 

 

608,897

 

 

 

61,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Unconsolidated

 

 

 

 

 

 

 

 

929

 

 

 

344,624

 

 

 

80,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects

 

 

 

 

 

 

 

 

2,065

 

 

$

1,055,465

 

 

$

689,231

 

 

$

61,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS

Total Budgeted

Capital Cost

 

 

Q4 2021

NOI

 

Projects Under Development - Consolidated

$

108,027

 

 

$

 

Projects Completed Not Stabilized - Consolidated

 

602,814

 

 

 

1,786

 

Projects Under Development - Unconsolidated

 

344,624

 

 

 

 

 

$

1,055,465

 

 

$

1,786

 

(A)

All non-wholly owned projects are being partially funded with project-specific construction loans. None of these loans are recourse to the Company. As of December 31, 2021, no draws have been made on the construction loans for 9th and W, Alloy Sunnyside, Alexan Harrison or Solana Beeler Park.

 

 

(B)

The land under these projects are subject to long-term ground leases.

 

 

(C)

The Company has six unconsolidated development joint ventures as of December 31, 2021. In addition to the three projects disclosed in “Projects Under Development – Unconsolidated” above, the Company has three additional unconsolidated joint venture projects that have not yet started but are expected to do so in 2022 and eventually deliver approximately 1,005 apartment units.

Equity Residential

Capital Expenditures to Real Estate

For the Year Ended December 31, 2021

(Amounts in thousands except for apartment unit and per apartment unit amounts)

 

 

 

 

Same Store

Properties

 

 

Non-Same Store

Properties/Other

 

 

Total

 

 

Same Store Avg.

Per Apartment Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Apartment Units

 

 

 

74,077

 

 

 

6,330

 

 

 

80,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Improvements

 

 

$

87,456

 

 

$

1,570

 

 

$

89,026

 

 

$

1,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renovation Expenditures (1)

 

 

 

28,558

 

 

 

297

 

 

 

28,855

 

 

 

385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replacements

 

 

 

31,374

 

 

 

1,764

 

 

 

33,138

 

 

 

424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures to Real Estate (2)

 

 

$

147,388

 

 

$

3,631

 

 

$

151,019

 

 

$

1,990

 

(1)

 

Renovation Expenditures on 1,347 same store apartment units for the year ended December 31, 2021 approximated $21,201 per apartment unit renovated.

 

 

 

(2)

 

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Normalized EBITDAre Reconciliations

(Amounts in thousands)

 

 

 

Trailing Twelve Months

 

 

2021

 

 

2020

 

 

 

December 31, 2021

 

 

September 30, 2021

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

 

Q4

 

Net income

 

$

1,396,714

 

 

$

1,098,720

 

 

$

560,978

 

 

$

447,332

 

 

$

328,040

 

 

$

60,364

 

 

$

262,984

 

Interest expense incurred, net

 

 

272,473

 

 

 

319,457

 

 

 

69,740

 

 

 

68,251

 

 

 

67,124

 

 

 

67,358

 

 

 

116,724

 

Amortization of deferred financing costs

 

 

8,737

 

 

 

8,858

 

 

 

2,565

 

 

 

2,048

 

 

 

1,939

 

 

 

2,185

 

 

 

2,686

 

Amortization of above/below market lease intangibles

 

 

4,309

 

 

 

4,291

 

 

 

1,116

 

 

 

1,116

 

 

 

979

 

 

 

1,098

 

 

 

1,098

 

Depreciation

 

 

838,272

 

 

 

817,861

 

 

 

222,240

 

 

 

215,397

 

 

 

200,673

 

 

 

199,962

 

 

 

201,829

 

Income and other tax expense (benefit)

 

 

915

 

 

 

1,029

 

 

 

236

 

 

 

284

 

 

 

242

 

 

 

153

 

 

 

350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

2,521,420

 

 

 

2,250,216

 

 

 

856,875

 

 

 

734,428

 

 

 

598,997

 

 

 

331,120

 

 

 

585,671

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(1,072,183

)

 

 

(767,212

)

 

 

(484,560

)

 

 

(363,928

)

 

 

(223,738

)

 

 

43

 

 

 

(179,589

)

Net (gain) loss on sales of unconsolidated entities - operating assets

 

 

(1,304

)

 

 

(640

)

 

 

(1,300

)

 

 

 

 

 

 

 

 

(4

)

 

 

(636

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDAre

 

 

1,447,933

 

 

 

1,482,364

 

 

 

371,015

 

 

 

370,500

 

 

 

375,259

 

 

 

331,159

 

 

 

405,446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

 

16,769

 

 

 

 

 

 

16,769

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs (other expenses)

 

 

6,526

 

 

 

5,562

 

 

 

2,969

 

 

 

910

 

 

 

1,316

 

 

 

1,331

 

 

 

2,005

 

(Income) loss from investments in unconsolidated entities - operations

 

 

4,702

 

 

 

4,507

 

 

 

1,670

 

 

 

1,156

 

 

 

261

 

 

 

1,615

 

 

 

1,475

 

Net (gain) loss on sales of land parcels

 

 

(5

)

 

 

(34,239

)

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

(34,234

)

Realized (gain) loss on investment securities (interest and other income)

 

 

(23,432

)

 

 

(23,432

)

 

 

 

 

 

 

 

 

(23,565

)

 

 

133

 

 

 

 

Insurance/litigation settlement or reserve income (interest and other income)

 

 

(1,090

)

 

 

(2,870

)

 

 

(20

)

 

 

(742

)

 

 

(328

)

 

 

 

 

 

(1,800

)

Insurance/litigation/environmental settlement or reserve expense (other expenses)

 

 

9,565

 

 

 

5,083

 

 

 

4,482

 

 

 

1,871

 

 

 

1,000

 

 

 

2,212

 

 

 

 

Advocacy contributions (other expenses)

 

 

708

 

 

 

7,488

 

 

 

201

 

 

 

50

 

 

 

427

 

 

 

30

 

 

 

6,981

 

Other

 

 

(207

)

 

 

(15

)

 

 

(207

)

 

 

 

 

 

 

 

 

 

 

 

(15

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized EBITDAre

 

$

1,461,469

 

 

$

1,444,448

 

 

$

396,879

 

 

$

373,745

 

 

$

354,370

 

 

$

336,475

 

 

$

379,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Items:

 

December 31, 2021

 

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

8,341,453

 

 

$

8,144,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

(123,832

)

 

 

(39,707

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage principal reserves/sinking funds

 

 

(19,104

)

 

 

(17,828

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt

 

$

8,198,517

 

 

$

8,087,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:

EBITDA, EBITDAre and Normalized EBITDAre do not include any adjustments for the Company’s share of partially owned unconsolidated entities or the minority partner’s share of partially owned consolidated entities due to the immaterial size of the Company’s partially owned portfolio.

Equity Residential

Adjustments from FFO to Normalized FFO

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

Quarter Ended December 31,

 

 

 

2021

 

 

2020

 

 

Variance

 

 

2021

 

 

2020

 

 

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

$

16,769

 

 

$

 

 

$

16,769

 

 

$

16,769

 

 

$

 

 

$

16,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs (other expenses)

 

 

6,526

 

 

 

6,869

 

 

 

(343

)

 

 

2,969

 

 

 

2,005

 

 

 

964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepayment premiums/penalties (interest expense)

 

 

 

 

 

26,150

 

 

 

(26,150

)

 

 

 

 

 

26,150

 

 

 

(26,150

)

Write-off of unamortized deferred financing costs (interest expense)

 

 

744

 

 

 

634

 

 

 

110

 

 

 

480

 

 

 

597

 

 

 

(117

)

Write-off of unamortized (premiums)/discounts/OCI (interest expense)

 

 

 

 

 

12,508

 

 

 

(12,508

)

 

 

 

 

 

12,508

 

 

 

(12,508

)

Debt extinguishment and preferred share redemption (gains) losses

 

 

744

 

 

 

39,292

 

 

 

(38,548

)

 

 

480

 

 

 

39,255

 

 

 

(38,775

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (gain) loss on sales of land parcels

 

 

(5

)

 

 

(34,234

)

 

 

34,229

 

 

 

 

 

 

(34,234

)

 

 

34,234

 

(Income) loss from investments in unconsolidated entities ─ non-operating assets

 

 

1,154

 

 

 

1,644

 

 

 

(490

)

 

 

731

 

 

 

622

 

 

 

109

 

Realized (gain) loss on investment securities (interest and other income)

 

 

(23,432

)

 

 

 

 

 

(23,432

)

 

 

 

 

 

 

 

 

 

Non-operating asset (gains) losses

 

 

(22,283

)

 

 

(32,590

)

 

 

10,307

 

 

 

731

 

 

 

(33,612

)

 

 

34,343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance/litigation settlement or reserve income (interest and other income)

 

 

(1,090

)

 

 

(4,152

)

 

 

3,062

 

 

 

(20

)

 

 

(1,800

)

 

 

1,780

 

Insurance/litigation/environmental settlement or reserve expense (other expenses)

 

 

9,565

 

 

 

(1,293

)

 

 

10,858

 

 

 

4,482

 

 

 

 

 

 

4,482

 

Advocacy contributions (other expenses)

 

 

708

 

 

 

11,062

 

 

 

(10,354

)

 

 

201

 

 

 

6,981

 

 

 

(6,780

)

Other

 

 

(207

)

 

 

(965

)

 

 

758

 

 

 

(207

)

 

 

(15

)

 

 

(192

)

Other miscellaneous items

 

 

8,976

 

 

 

4,652

 

 

 

4,324

 

 

 

4,456

 

 

 

5,166

 

 

 

(710

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments from FFO to Normalized FFO

 

$

10,732

 

 

$

18,223

 

 

$

(7,491

)

 

$

25,405

 

 

$

12,814

 

 

$

12,591

 

 

Note: 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

Normalized FFO Guidance and Assumptions

 

The guidance/projections provided below are based on current expectations and are forward-looking. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit costs, are not included in the estimates provided on this page. 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.

 

 

Q1 2022

 

Full Year 2022

 

 

 

 

 

 

2022 Normalized FFO Guidance (per share diluted)

 

 

 

 

 

 

 

 

 

Expected Normalized FFO Per Share

$0.76 to $0.80

 

$3.40 to $3.50

 

 

 

 

 

 

2022 Same Store Assumptions (includes Residential and Non-Residential)

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

 

96.5%

 

Revenue change

 

 

8.0% to 10.0%

 

Expense change

 

 

2.5% to 3.5%

 

NOI change (1)

 

 

11.0% to 13.0%

 

 

 

 

 

 

2022 Transaction Assumptions

 

 

 

 

 

 

 

 

 

Consolidated rental acquisitions

 

 

$2.0B

 

Consolidated rental dispositions

 

 

$2.0B

 

Transaction Accretion (Dilution)

 

 

(25 basis points)

 

 

 

 

 

 

2022 Debt Assumptions

 

 

 

 

 

 

 

 

 

Weighted average debt outstanding

 

 

$8.275B to $8.475B

 

Interest expense, net (on a Normalized FFO basis)

 

 

$285.0M to $291.0M

 

Capitalized interest

 

 

$4.5M to $8.5M

 

 

 

 

 

 

2022 Capital Expenditures to Real Estate Assumptions for Same Store Properties (2)

 

 

 

 

 

 

 

 

 

Capital Expenditures to Real Estate for Same Store Properties

 

 

$200.0M

 

Capital Expenditures to Real Estate per Same Store Apartment Unit

 

 

$2,700

 

 

 

 

 

 

2022 Other Guidance Assumptions

 

 

 

 

 

 

 

 

 

Property management expense

 

 

$113.0M to $116.0M

 

General and administrative expense

 

 

$55.0M to $59.0M

 

Debt offerings

 

 

No amounts budgeted

 

Weighted average Common Shares and Units - Diluted

 

 

390.9M

 

(1)

 

Approximately 25 basis point change in NOI percentage = $0.01 per share change in EPS/FFO per share/Normalized FFO per share.

 

 

 

(2)

 

During 2022, the Company expects to spend approximately $38.5 million for apartment unit Renovation Expenditures on approximately 1,750 same store apartment units at an average cost of approximately $22,000 per apartment unit renovated, which is included in the Capital Expenditures to Real Estate assumptions noted above.

 

 

Equity Residential

Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms

(Amounts in thousands except per share and per apartment unit data)

(All per share data is diluted)

This Earnings Release and Supplemental Financial Information includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other real estate investment trusts (“REIT”) and, accordingly, may not be comparable. These non-GAAP financial measures should not be considered as an alternative to net earnings or any other measurement of performance computed in accordance with accounting principles generally accepted in the United States (“GAAP”) or as an alternative to cash flows from specific operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.

Acquisition Capitalization Rate or Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset. The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property.

Average Rental Rate – Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented.

Bad Debt, Net – Change in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.

Blended Rate – The weighted average of New Lease Change and Renewal Rate Achieved.

Capital Expenditures to Real Estate:

Building Improvements Includes roof replacement, paving, building mechanical equipment systems, exterior siding and painting, major landscaping, furniture, fixtures and equipment for amenities and common areas, vehicles and office and maintenance equipment.

Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets.

Replacements – Includes appliances, mechanical equipment, fixtures and flooring (including hardwood and carpeting).

Debt Balances:

Commercial Paper Program The Company may borrow up to a maximum of $1.0 billion under its commercial paper program subject to market conditions. The notes bear interest at various floating rates.

Revolving Credit Facility The Company’s $2.5 billion unsecured revolving credit facility matures November 1, 2024. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.775%), or based on bids received from the lending group, and an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $1.0 billion commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility:

 

 

December 31, 2021

 

Unsecured revolving credit facility commitment

 

$

2,500,000

 

 

 

 

 

 

Commercial paper balance outstanding

 

 

(315,121

)

 

 

 

 

 

Unsecured revolving credit facility balance outstanding

 

 

 

 

 

 

 

Other restricted amounts

 

 

(3,507

)

 

 

 

 

 

Unsecured revolving credit facility availability

 

$

2,181,372

 

Debt Covenant Compliance – Our unsecured debt includes certain financial and operating covenants including, among other things, maintenance of certain financial ratios. These provisions are contained in the indentures applicable to each notes payable or the credit agreement for our line of credit. The Debt Covenant Compliance ratios that are provided show the Company's compliance with certain covenants governing our public unsecured debt. These covenants generally reflect our most restrictive financial covenants. The Company was in compliance with its unsecured debt covenants for all periods presented.

Development Yield – NOI that the Company anticipates receiving in the next 12 months following stabilization less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $50-$150 per apartment unit depending on the type of asset) divided by the Total Budgeted Capital Cost of the asset. The weighted average Development Yield for development properties is weighted based on the projected NOI streams and the relative Total Budgeted Capital Cost for each respective property.

Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.

Earnings Per Share ("EPS") Net income per share calculated in accordance with GAAP. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS.

EBITDA for Real Estate and Normalized EBITDA for Real Estate:

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) The National Association of Real Estate Investment Trusts (“Nareit”) defines EBITDAre (September 2017 White Paper) as net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities.

The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength between periods or as compared to different companies.

Normalized Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“Normalized EBITDAre”) – Represents net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for non-comparable items. Normalized EBITDAre, total debt to Normalized EBITDAre and net debt to Normalized EBITDAre are important metrics in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Normalized EBITDAre, total debt to Normalized EBITDAre, and net debt to Normalized EBITDAre are useful to investors, creditors and rating agencies because they allow investors to compare the Company’s credit strength to prior reporting periods and to other companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual credit quality.

Economic Gain (Loss) – Economic Gain (Loss) is calculated as the net gain (loss) on sales of real estate properties in accordance with GAAP, excluding accumulated depreciation. The Company generally considers Economic Gain (Loss) to be an appropriate supplemental measure to net gain (loss) on sales of real estate properties in accordance with GAAP because it is one indication of the gross value created by the Company's acquisition, development, renovation, management and ultimate sale of a property and because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold property. The following table presents a reconciliation of net gain (loss) on sales of real estate properties in accordance with GAAP to Economic Gain (Loss):

 

 

Year Ended December 31, 2021

 

 

Quarter Ended December 31, 2021

 

 

 

 

 

 

 

 

 

 

Net Gain (Loss) on Sales of Real Estate Properties

 

$

1,072,183

 

 

$

484,560

 

Accumulated Depreciation Gain

 

 

(343,615

)

 

 

(128,803

)

 

 

 

 

 

 

 

 

 

Economic Gain (Loss)

 

$

728,568

 

 

$

355,757

 

FFO and Normalized FFO:

Funds From Operations (“FFO”) Nareit defines FFO (December 2018 White Paper) as net income (computed in accordance with GAAP), excluding gains or losses from sales and impairment write-downs of depreciable real estate and land when connected to the main business of a REIT, impairment write-downs of investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and depreciation and amortization related to real estate. Adjustments for partially owned consolidated and unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Expected FFO per share is calculated on a basis consistent with actual FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses from sales and impairment write-downs of depreciable real estate and excluding depreciation related to real estate (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies.

Normalized Funds From Operations ("Normalized FFO") – Normalized FFO begins with FFO and excludes:

• the impact of any expenses relating to non-operating asset impairment;

• pursuit cost write-offs;

• gains and losses from early debt extinguishment and preferred share redemptions;

• gains and losses from non-operating assets; and

• other miscellaneous items.

Expected Normalized FFO per share is calculated on a basis consistent with actual Normalized FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that Normalized FFO and Normalized FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results.

FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with GAAP. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests – Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.

The following table presents reconciliations of EPS to FFO per share and Normalized FFO per share for Consolidated Statements of Funds From Operations and Normalized Funds From Operations.

 

 

 

 

 

 

 

 

 

 

Actual

 

 

Actual

 

 

Expected

 

 

Expected

 

 

 

Actual 2021

 

 

Actual 2020

 

 

Q4 2021

 

 

Q4 2020

 

 

Q1 2022

 

 

2022

 

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

EPS – Diluted

 

$

3.54

 

 

$

2.45

 

 

$

1.40

 

 

$

0.68

 

 

$0.85 to $0.89

 

 

$4.18 to $4.28

 

Depreciation expense

 

 

2.15

 

 

 

2.11

 

 

 

0.57

 

 

 

0.52

 

 

0.57

 

 

2.21

 

Net (gain) loss on sales

 

 

(2.73

)

 

 

(1.35

)

 

 

(1.21

)

 

 

(0.47

)

 

(0.67)

 

 

(3.03)

 

Impairment – operating assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per share – Diluted

 

 

2.96

 

 

 

3.21

 

 

 

0.76

 

 

 

0.73

 

 

0.75 to 0.79

 

 

3.36 to 3.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

 

0.04

 

 

 

 

 

 

0.04

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

0.02

 

 

 

0.02

 

 

 

0.01

 

 

 

0.01

 

 

0.01

 

 

0.02

 

Debt extinguishment and preferred share

 

 

 

 

 

redemption (gains) losses

 

 

 

 

 

0.10

 

 

 

 

 

 

0.10

 

 

 

 

 

Non-operating asset (gains) losses

 

 

(0.06

)

 

 

(0.08

)

 

 

 

 

 

(0.09

)

 

 

 

 

Other miscellaneous items

 

 

0.03

 

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO per share – Diluted

 

$

2.99

 

 

$

3.26

 

 

$

0.82

 

 

$

0.76

 

 

$0.76 to $0.80

 

 

$3.40 to $3.50

 

Lease-Up NOI – Represents NOI for development properties: (i) in various stages of lease-up; and (ii) where lease-up has been completed but the properties were not stabilized (defined as having achieved 90% occupancy for three consecutive months) for all of the current and comparable periods presented.

Leasing Concessions – Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.

Net Operating Income (“NOI”) – NOI is the Company’s primary financial measure for evaluating each of its apartment properties. NOI is defined as rental income less direct property operating expenses (including real estate taxes and insurance). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment properties. NOI does not include an allocation of property management expenses either in the current or comparable periods. Rental income for all leases and operating expense for ground leases (for both same store and non-same store properties) are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following tables present reconciliations of operating income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (see Same Store Results):

 

 

Year Ended December 31,

 

 

Quarter Ended December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating income

 

$

1,675,841

 

 

$

1,317,990

 

 

$

641,883

 

 

$

356,606

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property management

 

 

98,155

 

 

 

93,825

 

 

 

23,798

 

 

 

22,312

 

General and administrative

 

 

56,506

 

 

 

48,305

 

 

 

13,404

 

 

 

11,093

 

Depreciation

 

 

838,272

 

 

 

820,832

 

 

 

222,240

 

 

 

201,829

 

Net (gain) loss on sales of real estate

 

properties

 

 

(1,072,183

)

 

 

(531,807

)

 

 

(484,560

)

 

 

(179,589

)

Impairment

 

 

16,769

 

 

 

 

 

 

16,769

 

 

 

 

Total NOI

 

$

1,613,360

 

 

$

1,749,145

 

 

$

433,534

 

 

$

412,251

 

Rental income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

$

2,342,257

 

 

$

2,425,025

 

 

$

611,501

 

 

$

582,957

 

Non-same store/other

 

 

121,740

 

 

 

146,680

 

 

 

33,629

 

 

 

30,478

 

Total rental income

 

 

2,463,997

 

 

 

2,571,705

 

 

 

645,130

 

 

 

613,435

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

 

803,995

 

 

 

780,381

 

 

 

198,610

 

 

 

194,434

 

Non-same store/other

 

 

46,642

 

 

 

42,179

 

 

 

12,986

 

 

 

6,750

 

Total operating expenses

 

 

850,637

 

 

 

822,560

 

 

 

211,596

 

 

 

201,184

 

NOI:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

 

1,538,262

 

 

 

1,644,644

 

 

 

412,891

 

 

 

388,523

 

Non-same store/other

 

 

75,098

 

 

 

104,501

 

 

 

20,643

 

 

 

23,728

 

Total NOI

 

$

1,613,360

 

 

$

1,749,145

 

 

$

433,534

 

 

$

412,251

 

New Lease Change The net effective change in rent (inclusive of Leasing Concessions) for a lease with a new or transferring resident compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Non-Residential – Consists of revenues and expenses from retail and public parking garage operations.

Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2020 and 2021, plus any properties in lease-up and not stabilized as of January 1, 2020.

Percentage of Residents Renewing – Leases renewed expressed as a percentage of total renewal offers extended during the reporting period.

Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.

Pricing Trend – Weighted average of 12-month base rent including amenity amount less Leasing Concessions on 12-month signed leases for the reporting period.

Renewal Rate Achieved The net effective change in rent (inclusive of Leasing Concessions) for a new lease on an apartment unit where the lease has been renewed as compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Residential – Consists of multifamily apartment revenues and expenses.

Same Store Operating Expenses:

On-site Payroll Includes payroll and related expenses for on-site personnel including property managers, leasing consultants, and maintenance staff.

Other On-site Operating Expenses Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.

Repairs and Maintenance Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair and maintenance costs.

Utilities Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.

Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2020, less properties subsequently sold. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented.

Same Store Residential Revenues Revenues from our Same Store Properties presented on a GAAP basis which reflects the impact of Leasing Concessions on a straight-line basis.

Same Store Residential Revenues with Leasing Concessions on a cash basis is presented in Same Store Results and is considered by the Company to be a supplemental measure to Same Store Residential Revenues in conformity with GAAP to help investors evaluate the impact of both current and historical Leasing Concessions on GAAP-based Same Store Residential Revenues and to more readily enable comparisons to revenue as reported by other companies. Same Store Residential Revenues with Leasing Concessions on a cash basis reflects the impact of Leasing Concessions used in the period and allows an investor to understand the historical trend in cash Leasing Concessions.

% of Stabilized Budgeted NOI – Represents original budgeted 2022 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.

Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP. Amounts for partially owned consolidated and unconsolidated properties are presented at 100% of the project.

Total Market Capitalization – The aggregate of the market value of the Company’s outstanding common shares, including restricted shares, the market value of the Company’s operating partnership units outstanding, including restricted units (based on the market value of the Company’s common shares) and the outstanding principal balance of debt. The Company believes this is a useful measure of a real estate operating company’s long-term liquidity and balance sheet strength, because it shows an approximate relationship between a company’s total debt and the current total market value of its assets based on the current price at which the Company’s common shares trade. However, because this measure of leverage changes with fluctuations in the Company’s share price, which occur regularly, this measure may change even when the Company’s earnings, interest and debt levels remain stable.

Traffic – Consists of an expression of interest in an apartment by completing an in-person tour, self-guided tour or virtual tour that may result in an application to lease.

Transaction Accretion (Dilution) – Represents the spread between the Acquisition Cap Rate and the Disposition Yield.

Turnover Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units.

Unencumbered NOI % – Represents NOI generated by consolidated real estate assets unencumbered by outstanding secured debt as a percentage of total NOI generated by all of the Company's consolidated real estate assets.

Unlevered Internal Rate of Return (“IRR”) – The Unlevered IRR on sold properties is the compound annual rate of return calculated by the Company based on the timing and amount of: (i) the gross purchase price of the property plus any direct acquisition costs incurred by the Company; (ii) total revenues earned during the Company’s ownership period; (iii) total direct property operating expenses (including real estate taxes and insurance) incurred during the Company’s ownership period; (iv) capital expenditures incurred during the Company’s ownership period; and (v) the gross sales price of the property net of selling costs.

The calculation of the Unlevered IRR does not include an adjustment for the Company’s property management expense, general and administrative expense or interest expense (including loan assumption costs and other loan-related costs). Therefore, the Unlevered IRR is not a substitute for net income as a measure of our performance. Management believes that the Unlevered IRR achieved during the period a property is owned by the Company is useful because it is one indication of the gross value created by the Company’s acquisition, development, renovation, management and ultimate sale of a property, before the impact of Company overhead. The Unlevered IRR achieved on the properties as cited in this release should not be viewed as an indication of the gross value created with respect to other properties owned by the Company, and the Company does not represent that it will achieve similar Unlevered IRRs upon the disposition of other properties. The weighted average Unlevered IRR for sold properties is weighted based on all cash flows over the investment period for each respective property, including net sales proceeds.

Weighted Average Coupons – Contractual interest rate for each debt instrument weighted by principal balances as of December 31, 2021. In case of debt for which fair value hedges are in place, the rate payable under the corresponding derivatives is used in lieu of the contractual interest rate.

Weighted Average Rates – Interest expense for each debt instrument for the year ended December 31, 2021 weighted by its average principal balance for the same period. Interest expense includes amortization of premiums, discounts and other comprehensive income on debt and related derivative instruments. In case of debt for which derivatives are in place, the income or expense recognized under the corresponding derivatives is included in the total interest expense for the period.

Contacts

Marty McKenna (312) 928-1901

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