AvalonBay Communities (AVB) investor relations material

Deal rationale and strategic fit

• Merger creates the largest public apartment company in the U.S. with over 180,000 homes, a $69B enterprise value, and a $52B equity market cap, aiming for structurally superior earnings and dividend growth while redefining leadership in rental housing.

• Focus is on building a fundamentally stronger company by leveraging complementary portfolios, talent, and capabilities, with enhanced scale enabling operational innovations and technology adoption.

• Industry at an inflection point; scale, technology, and data analytics are seen as key differentiators for future outperformance and margin expansion.

• Combined company will accelerate growth in both market-rate and affordable housing, expanding supply and community impact.

• Shared history and mutual respect between the companies support integration and future collaboration.

Financial terms and conditions

• All-stock merger of equals; AvalonBay shareholders receive 2.793 Equity Residential shares per AvalonBay share, with pro forma ownership of 51.2% AVB and 48.8% EQR shareholders.

• Pro forma enterprise value of $69B, $52B equity market cap, and $2B annual cash flow.

• Board will have seven trustees from each company; leadership team drawn from both.

• Company will be dual-headquartered in Arlington, VA and Chicago, IL, and operate under a new name to be announced at closing.

• Transaction expected to qualify as a tax-free reorganization for U.S. federal income tax purposes and is expected to be accretive to both sets of shareholders, with ~2% FFO accretion based on 2026 guidance.

Synergies and expected cost savings

• $175M gross synergies identified, with $125M net after tax reassessments, mainly from corporate overhead, property management, and expense savings.

• 85% of synergies expected by end of 2027, with full run-rate in 18 months post-close.

• 80% of NOI synergies are expense-driven, 20% from service revenue enhancements.

• Margin expansion expected through technology, automation, and centralized services.

• Cost savings from improved portfolio NOI and overhead reductions.