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EQUITY RESIDENTIAL - Annual Report: 2022 (Form 10-K)

10-K

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Fiscal Year Ended December 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

Commission File Number: 1-12252 (Equity Residential)

Commission File Number: 0-24920 (ERP Operating Limited Partnership)

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

 

Maryland (Equity Residential)

13-3675988 (Equity Residential)

Illinois (ERP Operating Limited Partnership)

36-3894853 (ERP Operating Limited Partnership)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 

Two North Riverside Plaza, Chicago, Illinois 60606

(312) 474-1300

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Shares of Beneficial Interest, $0.01 Par Value (Equity Residential)

 

EQR

 

New York Stock Exchange

7.57% Notes due August 15, 2026 (ERP Operating Limited Partnership)

 

N/A

 

New York Stock Exchange

 

Securities registered pursuant to Section 12(g) of the Act:

None (Equity Residential)

Units of Limited Partnership Interest (ERP Operating Limited Partnership)

(Title of each class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

Equity Residential Yes   No

ERP Operating Limited Partnership Yes   No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 

Equity Residential Yes No

ERP Operating Limited Partnership Yes No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Equity Residential Yes   No

ERP Operating Limited Partnership Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Equity Residential Yes   No

ERP Operating Limited Partnership Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Equity Residential:

 

 

 

 

 

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

ERP Operating Limited Partnership:

 

 

 

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Equity Residential

 

 

ERP Operating Limited Partnership

 

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 

Equity Residential

 

 

ERP Operating Limited Partnership

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 

Equity Residential

 

 

ERP Operating Limited Partnership

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

 

Equity Residential

 

 

ERP Operating Limited Partnership

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

 

Equity Residential Yes   No

ERP Operating Limited Partnership Yes   No

The aggregate market value of Common Shares held by non-affiliates of the Registrant was approximately $26.8 billion based upon the closing price on June 30, 2022 of $72.22 using beneficial ownership of shares rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude voting shares owned by Trustees and Executive Officers, some of whom may not be held to be affiliates upon judicial determination.

The number of Common Shares of Beneficial Interest, $0.01 par value, outstanding on February 10, 2023 was 378,602,684.

 

Auditor Firm Id:

42

Auditor Name:

Ernst and Young LLP

Auditor Location:

Chicago, Illinois, USA

 

 


Table of Contents

 

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information that will be contained in Equity Residential’s Proxy Statement relating to its 2023 Annual Meeting of Shareholders, which Equity Residential intends to file no later than 120 days after the end of its fiscal year ended December 31, 2022, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 96.8% owner of ERP Operating Limited Partnership.

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EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for the year ended December 31, 2022 of Equity Residential and ERP Operating Limited Partnership. Unless stated otherwise or the context otherwise requires, references to “EQR” mean Equity Residential, a Maryland real estate investment trust (“REIT”), and references to “ERPOP” mean ERP Operating Limited Partnership, an Illinois limited partnership. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. The following chart illustrates the Company’s and the Operating Partnership’s corporate structure:

 

img135583460_0.jpg 

 

EQR is the general partner of, and as of December 31, 2022 owned an approximate 96.8% ownership interest in, ERPOP. The remaining 3.2% interest is owned by limited partners. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. Management operates the Company and the Operating Partnership as one business. The management of EQR consists of the same members as the management of ERPOP.

The Company is structured as an umbrella partnership REIT (“UPREIT”) and EQR contributes all net proceeds from its various equity offerings to ERPOP. In return for those contributions, EQR receives a number of OP Units (see definition below) in ERPOP equal to the number of Common Shares it has issued in the equity offering. The Company may acquire properties in transactions that include the issuance of OP Units as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. This is one of the reasons why the Company is structured in the manner shown above. Based on the terms of ERPOP’s partnership agreement, OP Units can be exchanged with Common Shares on a one-for-one basis because the Company maintains a one-for-one relationship between the OP Units of ERPOP issued to EQR and the outstanding Common Shares.

The Company believes that combining the reports on Form 10-K of EQR and ERPOP into this single report provides the following benefits:

enhances investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

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The Company believes it is important to understand the few differences between EQR and ERPOP in the context of how EQR and ERPOP operate as a consolidated company. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR’s primary function is acting as the general partner of ERPOP. EQR also issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by EQR (which are contributed to the capital of ERPOP in exchange for additional partnership interests in ERPOP (“OP Units”) (on a one-for-one Common Share per OP Unit basis) or additional preference units in ERPOP (on a one-for-one preferred share per preference unit basis)), the Operating Partnership generates all remaining capital required by the Company’s business. These sources include the Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its revolving credit facility and/or commercial paper program, the issuance of secured and unsecured debt and partnership interests, and proceeds received from disposition of certain properties and joint venture interests.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements and as noncontrolling interests in the Company’s financial statements. The noncontrolling interests in the Operating Partnership’s financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in the Company’s financial statements include the same noncontrolling interests at the Operating Partnership level and limited partner OP Unit holders of the Operating Partnership. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at the Company and Operating Partnership levels.

To help investors understand the differences between the Company and the Operating Partnership, this report provides separate consolidated financial statements for the Company and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entity’s debt, noncontrolling interests and shareholders’ equity or partners’ capital, as applicable; and a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.

This report also includes separate Part II, Item 9A, Controls and Procedures, sections and separate Exhibits 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.

 

In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership.

 

As general partner with control of ERPOP, EQR consolidates ERPOP for financial reporting purposes, and EQR essentially has no assets or liabilities other than its investment in ERPOP. Therefore, the assets and liabilities of the Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

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EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

TABLE OF CONTENTS

 

 

 

 

 

PAGE

PART I.

 

 

 

 

 

 

 

 

 

Item 1.

 

Business

 

6

 

 

 

 

 

Item 1A.

 

Risk Factors

 

11

 

 

 

 

 

Item 1B.

 

Unresolved Staff Comments

 

21

 

 

 

 

 

Item 2.

 

Properties

 

21

 

 

 

 

 

Item 3.

 

Legal Proceedings

 

23

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

23

 

 

 

 

 

PART II.

 

 

 

 

 

 

 

 

 

Item 5.

 

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

24

 

 

 

 

 

Item 6.

 

Reserved

 

24

 

 

 

 

 

Item 7.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25

 

 

 

 

 

Item 7A.

 

Quantitative and Qualitative Disclosures about Market Risk

 

40

 

 

 

 

 

Item 8.

 

Financial Statements and Supplementary Data

 

41

 

 

 

 

 

Item 9.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

41

 

 

 

 

 

Item 9A.

 

Controls and Procedures

 

41

 

 

 

 

 

Item 9B.

 

Other Information

 

42

 

 

 

 

 

Item 9C.

 

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 

42

 

 

 

 

 

PART III.

 

 

 

 

 

 

 

 

 

Item 10.

 

Trustees, Executive Officers and Corporate Governance

 

43

 

 

 

 

 

Item 11.

 

Executive Compensation

 

43

 

 

 

 

 

Item 12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

43

 

 

 

 

 

Item 13.

 

Certain Relationships and Related Transactions, and Trustee Independence

 

43

 

 

 

 

 

Item 14.

 

Principal Accountant Fees and Services

 

43

 

 

 

 

 

PART IV.

 

 

 

 

 

 

 

 

 

Item 15.

 

Exhibit and Financial Statement Schedules

 

44

 

 

 

 

 

Item 16.

 

Form 10-K Summary

 

44

 

 

 

 

 

EX-21

 

 

 

 

 

 

 

 

 

EX-23.1

 

 

 

 

 

 

 

 

 

EX-23.2

 

 

 

 

 

 

 

 

 

EX-31.1

 

 

 

 

 

 

 

 

 

EX-31.2

 

 

 

 

 

 

 

 

 

EX-31.3

 

 

 

 

 

 

 

 

 

EX 31.4

 

 

 

 

 

 

 

 

 

EX-32.1

 

 

 

 

 

 

 

 

 

EX-32.2

 

 

 

 

 

 

 

 

 

EX-32.3

 

 

 

 

 

 

 

 

 

EX-32.4

 

 

 

 

 

 

 

 

 

EX-101 INSTANCE DOCUMENT

 

 

 

 

 

 

 

EX-101 SCHEMA DOCUMENT

 

 

 

 

 

 

 

EX-101 CALCULATION LINKBASE DOCUMENT

 

 

 

 

 

 

 

EX-101 LABELS LINKBASE DOCUMENT

 

 

 

 

 

 

 

EX-101 PRESENTATION LINKBASE DOCUMENT

 

 

 

 

 

 

 

EX-101 DEFINITION LINKBASE DOCUMENT

 

 

 

 

 

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PART I

Item 1. Business

General

Equity Residential (“EQR”) 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 affluent long-term renters. ERP Operating Limited Partnership (“ERPOP”) is focused on conducting the multifamily property business of EQR. EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP.

EQR is the general partner of, and as of December 31, 2022 owned an approximate 96.8% ownership interest in, ERPOP. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.

The Company’s corporate headquarters is located in Chicago, Illinois and the Company also operates regional property management offices in most of its markets.

Certain capitalized terms used herein are defined in the Notes to Consolidated Financial Statements. See also Note 17 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.

Available Information

You may access our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy statements and any amendments to any of those reports/statements we file with or furnish to the Securities and Exchange Commission (“SEC”) free of charge on our website, www.equityapartments.com. These reports/statements are made available on our website as soon as reasonably practicable after we file them with or furnish them to the SEC. The information contained on our website, including any information referred to in this report as being available on our website, is not a part of or incorporated into this report.

Business Objectives and Operating and Investing Strategies

Overview

The Company is one of the largest U.S. publicly-traded owners and operators of high quality rental apartment properties, with an established presence in Boston, New York, Washington, D.C., Southern California (including Los Angeles, Orange County and San Diego), San Francisco and Seattle, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. We believe our markets are knowledge centers of the U.S. economy that draw talented workers and employers that drive economic growth in the United States. We believe the locations of our properties in these markets are attractive to these knowledge workers (who often choose to rent for lifestyle reasons) that we hope to convert into satisfied long-term residents.

Equity Residential is committed to creating communities where people thrive. We carry this, our corporate purpose, through our relationships with our customers, our employees, our shareholders and the communities in which we operate. It drives our commitments to sustainability, diversity and inclusion, the total wellbeing of our employees and being a responsible corporate citizen in the communities in which we operate.

We believe we have created an industry‐leading operating platform and balance sheet to run our properties. Our employees are focused on delivering remarkable customer service to our residents so they will stay with us longer, be willing to pay higher rent for a great experience and will tell others about how much they love living in an Equity Residential property. We utilize technology and other innovative methods of engagement with our residents to foster relationships and community, improve the resident experience and operate our business more efficiently. We pair that with disciplined balance sheet management that enhances returns and value creation while maintaining flexibility to take advantage of future opportunities. We believe that our stakeholders value stability, liquidity, predictability and accountability and that is the mission to which we remain unwaveringly committed.

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Despite geopolitical and economic uncertainties, demand to live in our apartment communities remains robust and we believe that the long-term prospects for our business remain strong. Our business benefits from a shortage in housing across the country, especially in the areas in which we are investing. Our well-located communities provide an exceptional experience for our residents around dynamic cities that we believe will continue to attract affluent long-term renters.

Investment Strategy

The Company’s long-term strategy is to invest in apartment communities located in strategically targeted markets with the goal of maximizing our risk-adjusted total returns and balancing current cash flow generation with long-term capital appreciation. We seek to meet this goal by investing in markets that are characterized by conditions favorable to multifamily property operations over the long-term. Our multi-pronged investment strategy featuring acquisitions, new stand-alone and expansion developments, densifying developments and accretive renovations of existing properties is focused on optimizing our portfolio in terms of quality and location. The markets we focus on generally feature one or more of the following characteristics that allow us to drive performance:

Large and diverse economic drivers. Our markets are some of the largest cities in the United States. They are markets that generally attract a variety of large and diverse industries and businesses. They include a number of submarkets that are attractive for long-term multifamily ownership.
Strong high quality job growth. Our markets attract and create high quality jobs that are often focused in growing areas of the knowledge-based economy. These jobs result in the significant presence and growth in renters that work in the highest earning sectors of the economy, are not rent burdened and are attracted to our type of properties. This creates the ability to raise rents more readily in good economic times and reduces risk during downturns. Many of these workers are employed in the fields of Science, Technology, Engineering and Mathematics, or STEM jobs, as well as financial services, medical, legal and other higher-earning professions.
Significant apartment demand that meets new apartment supply. We remain focused on owning and operating properties in markets or submarkets where the supply of apartments is balanced with strong demand that supports superior long-term returns.
Other favorable performance drivers including high single-family housing prices that support longer term rentership and manageable resiliency/environmental risk.

We believe our strategy capitalizes on the preference of renters of all ages to live in the locations where we operate which typically are near transportation (both public transit and convenient highway access), entertainment, employment centers/universities and cultural and outdoor amenities. Furthermore, we believe that demand for rental housing will continue to be driven primarily through household formations from the younger segments of our population, particularly Generation Z, while retaining Millennials for longer and to a lesser extent capturing the aging Baby Boomer generation.

Millennials are comprised of those individuals born between 1981 and 1996, total approximately 72 million people and continue to be a significant portion of the renter population. They also tend to remain renters longer due to the cost of single family home ownership and societal trends favoring delays in marriage and having children.
Generation Z is comprised of the approximately 67 million people born between 1997 and 2012. This cohort is entering prime renter age and is expected to continue to be an important source of demand.
Baby Boomers, a demographic of more than 71 million people born between 1946 and 1964, also trend toward apartment rentals.

The Company continues to allocate capital in order to optimize performance by balancing current cash flow growth with long-term capital appreciation. We have done so by adding expansion markets to our portfolio when those markets meet many of the same characteristics listed above. Expansion into these markets of Denver, Atlanta, Dallas/Ft. Worth and Austin includes investments in both urban and suburban properties and is generally being funded by reducing exposure in selective established markets. Development also plays an important role in our capital allocation. Development activity is focused on our in-house pipeline, our strategic partnership with Toll Brothers, Inc. (“Toll”) and joint ventures with other third-party developers in both established and expansion markets. The Company remains committed to development as a driver of external growth but acknowledges its incremental risk, particularly in higher inflationary cost environments, when evaluating it as a method of expansion.

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Competition

All of the Company’s properties are located in developed areas with multiple housing choices, including other multifamily properties. The number of competitive housing choices or multifamily properties in a particular area could have a material effect on the Company’s ability to lease apartment units at its properties and on the rents charged. The Company may be competing with other housing providers that have greater resources than the Company and whose managers have more experience than the Company’s managers. In addition, other forms of rental properties and single-family housing provide housing alternatives to potential residents of multifamily properties. See Item 1A, Risk Factors, for additional information with respect to competition.

Operations and Innovation

We attempt to balance occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible return to our shareholders. We focus on the resident experience and leveraging operating efficiency which we believe drives our success in renewing our residents. This focus has driven strong occupancy and a high percentage of residents renewing while achieving strong renewal rate growth.

Rapidly evolving technology continues to drive innovation in the rental industry. We have been and continue to be a leader in deploying and investing in property technology to serve our customers better and operate more efficiently. Having a history as a first mover in such important areas as online leasing, we are focused on technology that drives superior margins and improves customer experience. We use a standardized purchasing system to control our operating expenses and a business intelligence platform that allows all our team members to quickly identify and address issues and opportunities. Many of these initiatives allow us to interact with our customers in a safe, responsible and convenient manner, including self-guided tours, automated responses to customer inquiries and enhanced service and maintenance management. While we believe areas such as “smart home” technology and others will provide the foundation for current and future improvements to how we do business, we will continue to consider the cost and longevity of technology capital investments and their benefits.

Our Commitment to Environmental, Social and Governance (“ESG”)

At Equity Residential, we believe a focus on ESG is a key way to programmatically address stakeholder concerns as part of our corporate purpose. This needs to be a continuous endeavor, in which we invest in resilient properties that will stand the test of time and remain attractive to our customers and the community without negatively impacting the environment. We have a dedicated in-house team that initiates and applies sustainable practices in all aspects of our business, including investment activities, development, property operations and property management activities. Multifamily housing is one of the most environmentally-friendly uses of real estate, as each property provides homes for hundreds of families in a denser shared environment. We consider building locations based on walkability, accessibility, neighborhoods and parks. We also design our communities to support amenities such as fitness centers and we select locations near shops, restaurants, outdoor amenities such as bike/running paths and health clubs, enabling a low carbon footprint lifestyle for our residents to live, work and play.

Equity Residential’s sustainability program actively manages environmental impacts and climate-related risks and opportunities through optimized, financially responsible capital investments and technologies. We methodically focus on energy, water, waste and emissions to advance the program’s policies, targets and resilience outcomes. Together, we believe our program drives long-term asset value, responsibly manages risks and engages our communities, residents, employees and shareholders as part of our broader ESG strategy and commitment to good corporate citizenship and maximizing investment performance.

To further strengthen our commitments to ESG initiatives, we issued two sustainable fixed-income instruments (each a “green bond”) designed to support projects that contribute to environmental sustainability. In 2018, the Company became the first multifamily REIT ever to issue a green bond. In 2021, the Company issued a second green bond, and the net proceeds of approximately $494.2 million from this offering were fully allocated to the development of one property in Seattle certified as LEED Platinum, one property in Boston certified as LEED Gold and one property in Washington, D.C. certified as LEED Silver. In 2021, the Company began funding its $10.0 million investment in a new fund focused on early stage sustainability and climate change mitigation technology relevant to the built environment.

We are also intensely focused on the “Social” and “Governance” aspects of ESG. As detailed below, we have a commitment to our employees’ engagement, diversity and inclusion and wellness that is the foundation of our corporate purpose. We also recognize that a successful company must incorporate the best corporate governance practices in order to better serve its stakeholders.

Executive compensation includes an ESG goal and our Board of Trustees, primarily through its Compensation Committee, takes an active role in overseeing our efforts in this regard. For additional information regarding our ESG efforts, see our 2022 Environmental, Social and Governance Report at our website, www.equityapartments.com. This report, which includes Sustainability Accounting Standards Board disclosures and incorporates recommendations from the Task Force on Climate-related Financial Disclosures, was

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reviewed and approved by the Corporate Governance Committee of our Board of Trustees, which monitors the Company’s ongoing ESG efforts. We continue to enhance our ESG disclosure efforts, including by obtaining third-party assurance covering certain of the results outlined in the above report. Furthermore, our annual proxy statements contain additional information on our ESG efforts, including detailed information regarding our corporate governance practices. Such annual proxy statements and the information contained therein are not part of nor incorporated into this report, except as otherwise provided herein.

Human Capital

At Equity Residential, our team of approximately 2,400 employees is the driving force behind our success. We believe that our richly diverse work environment captures top talent, cultivates the best ideas and creates the widest possible platform for this success in line with our corporate purpose of “Creating communities where people thrive”. Our core principles, affectionately named “Ten Ways to Be a Winner”, guide our behavior as individuals and collectively as a team, helping us in our goal to deliver market-leading performance. As part of our Ten Ways to Be a Winner, we encourage our team members to raise questions, take educated risks, offer new ideas and help us make the right decisions. One way we live the “Ten Ways” is by enriching our culture through our core “Equity Values," which include Diversity & Inclusion, Social Responsibility, Sustainability and Total Wellbeing. We have assembled a cross-functional employee-led Equity Values Council to lead our efforts on these values by acting as change agents to drive initiatives, create goals and awareness, and encourage colleagues to participate in community service activities and wellness initiatives.

Diversity and Inclusion

Our commitment to diversity and inclusion starts with a highly skilled and diverse Board of Trustees.
We are committed to hiring a diverse workforce and also fostering a safe, inclusive and productive workplace for all employees. We believe providing a work environment based on respect, trust and collaboration creates an exceptional employee experience where employees can bring their whole selves to work and thrive in their careers. In recent years, we have created dedicated Diversity and Inclusion staffing to oversee this crucial work.
To further prioritize the importance of our diversity and inclusion efforts, our executives’ annual compensation goals include an evaluation of objective metrics measuring our Company’s progress in this regard.
We have the benefit of a diverse workforce, of which 63.0% currently identify as ethnically diverse. We also continue to focus on improving our female representation, which is now 36.0% of our workforce.
A diversity and inclusion lens is embedded in our talent review process. This includes the development of our Overcoming Bias in Performance Review Toolkit designed to provide practical bias interrupters and guidelines in the performance evaluation process that interrupt and correct unconscious bias.
We strategically identify opportunities to increase the diversity of our talent pipeline at all levels, including by actively seeking to source a pool of diverse candidates for mid-management and above positions in the communities where we serve, such as from Project Destined, Fannie Mae’s Future Housing Leaders, Howard University, Roosevelt University and Evanston Scholars.
We employ interns from universities across the nation and local colleges to provide pathways for students of various backgrounds interested in real estate.
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.

Pay Equity

In order to develop, attract and retain the best employees, we are committed to providing a total compensation package which is market-based, performance driven, fair and internally equitable.
Our goal is to be competitive both within the general employment market as well as with our competitors in the real estate industry, with our strongest performers being paid more.
Base pay is reviewed annually, as is Equity Residential’s compensation framework, by partnering with managers to create and update job descriptions that reflect the duties, skills, experience and education required to perform the role, and then benchmarking the Company’s pay practices and budget as well as our jobs against third-party compensation surveys to determine the market value of the job.
During the year-end performance evaluation process, managers review and calibrate compensation for all employees on their team, in an effort to ensure equity around our pay practices and allow us to reward and motivate our top talent.

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Employee Engagement

Employee engagement and experience are extremely important at Equity Residential. Our Employee Experience (EX) Survey measures employee engagement and diversity and inclusion, among other components of the employee experience.
Our 2022 engagement score of 78% favorability is very strong, especially given changes in employee expectations in the wake of the pandemic. Our Diversity & Inclusion Index score of 85% demonstrated an increase in employee favorability for the initiatives taking place and a greater sense of belonging.
Executive leaders are assessed annually on their leadership results for diversity and inclusion, engagement and manager completion of Ethics and Positive Workplace training, which for 2022 were measured by an employee experience survey and course completion rates.

Training and Development

We believe a successful workplace is one where employees constantly learn and grow. Our HR Transformation Learning & Development (“L&D”) team is interspersed throughout our markets and works regularly with employees to expand their knowledge and skills. L&D develops and delivers a wide range of training and development opportunities, from tactical to strategic, face-to-face to virtual, social learning to self-directed learning, and more.

Health, Safety and Wellness

Equity Residential is committed to providing the tools and resources to help our employees achieve total wellbeing. Thriving employees are the pinnacle of our efforts throughout all our business functions. When employees bring their whole self to work, perform their best and are well supported in their wellbeing, they can make powerful contributions to the business, culture and our communities. Whether physical, mental, financial, career, social or community wellbeing, Equity Residential offers benefits to help meet our employee needs.
Physical Wellbeing: Equity Residential is focused on providing benefits that help our employees achieve balance and address good health proactively, with coverage for emergencies and ongoing needs that can arise as well. Long before healthcare reform, Equity Residential made a commitment to cover 100% of employee preventive care. This commitment—and our robust and highly popular wellness program—has made proactive personal healthcare more accessible and manageable for employees, while encouraging ongoing healthy behaviors and rewarding employees for taking a proactive approach to their health.
Mental Wellbeing: We strive to make mental healthcare accessible. Our communications are designed to highlight awareness-building and our resources are centered around culturally competent care that scales toward employees’ needs. This includes educational resources for maintaining mental health, online mobile apps to address or discuss ways to improve, and partnerships with virtual care providers and support networks for those who need immediate and critical support. These resources are in addition to up to five free counseling sessions for all employees and their family members (per year per presenting matter) through our Employee Assistance Program.
Financial Wellbeing: These benefits and resources help our employees manage their money better today, while preparing for financial milestones and retirement in the future. Financial peace of mind is at the core of these offerings, whether it’s our generous 401(k) match, basic and supplemental insurance to ensure our loved ones and possessions are cared for, rent discounts at our properties or additional savings and investment options like our employee share purchase plan.
Career Wellbeing: When employees move up in skill and experience, so does Equity Residential. We encourage our employees to Test their Limits, push the boundaries of their comfort zones and seek new challenges through several learning resources and courses, in addition to tuition reimbursement. We actively promote from within, and many senior corporate and property leaders have risen from entry level or junior positions.
Social and Community Wellbeing: We offer a number of benefits that foster social and community wellbeing, including paid time off to volunteer in our communities.
Equity Residential continues to partner with Employees1st to provide financial relief via a crisis fund for employees struck by personal hardships or unforeseen disasters. The Company contributes funds to further support employees who experience unforeseen or catastrophic hardship. We are proud that this program allows yet another avenue for us to tangibly demonstrate our One Team culture by ensuring that employees feel safe and supported during extreme circumstances.

Regulatory Considerations

See Item 1A, Risk Factors, for information concerning the potential effects of governmental regulations, including environmental regulations, on our operations.

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Item 1A. Risk Factors

General

This Item 1A includes forward-looking statements. You should refer to our discussion of the qualifications and limitations on forward-looking statements included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The occurrence of the events discussed in the following risk factors could adversely affect, possibly in a material manner, our business, financial condition or results of operations, which could affect the value of our common shares of beneficial interest or preferred shares of beneficial interest (which we refer to collectively as “Shares”), Preference Units, OP Units, restricted units and our public unsecured debt. In this section, we refer to the Shares, Preference Units, OP Units, restricted units and public unsecured debt together as our “securities” and the investors who own such securities as our “security holders.”

Risks Related to our Business Strategy

Investing in real estate is inherently subject to risks that could negatively impact our business.

Investing in real estate is subject to varying degrees and types of risk. While we seek to mitigate these risks through various strategies, including geographic diversification, market research and proactive asset management, among other techniques, these risks cannot be eliminated. Factors that may impact cash flows and real estate values include, but are not limited to:

Local economic conditions, particularly oversupply or reductions in demand;
National, regional and local political and regulatory climates, governmental fiscal health and governmental policies;
The inability or unwillingness of residents to pay rent increases;
Increases in our operating expenses due to inflationary or other pressures;
Cost and availability of labor and materials required to maintain our properties at acceptable standards;
Availability of attractive financing opportunities;
Changes in social preferences; and
Additional risks that are discussed below.

The geographic concentration of our properties could have an adverse effect on our operations.

While the Company continues to diversify its portfolio with the addition of the expansion markets, the Company’s properties are still predominantly concentrated in our established coastal markets (generally within certain dense urban and suburban submarkets). If one or more of these markets is unfavorably impacted by specific geopolitical and/or economic conditions, local real estate conditions, increases in social unrest, increases in real estate and other taxes, reduced quality of life, deterioration of local or state government health, rent control or stabilization laws or localized environmental and climate issues, the impact of such conditions may have a more negative impact on our results of operations than if our properties were more geographically diverse. Additionally, to the extent that these markets or submarkets become less desirable to operate in, including changes in multifamily housing supply and demand, our results of operations could be more negatively impacted than if we were more diversified within our markets or invested in a greater number of markets.

Competition for housing may negatively affect operations and demand for the Company’s properties or residents.

Our properties face competition for residents from other existing or new multifamily properties, condominiums, single family homes and other living arrangements, whether owned or rental, that may attract residents from our properties or prospective residents that would otherwise choose to live with us. As a result, we may not be able to renew existing resident leases or enter into new resident leases, or if we are able to renew or enter into new leases, they may be at rates or terms that are less favorable than our current rates or terms, resulting in a material impact on our results of operations.

Additionally, our properties face competition for residents as a result of technological innovation. Therefore, we may not be able to retain residents or attract new residents if we are unable to identify and cost effectively implement new, relevant technologies and keep up with constantly changing resident demand for the latest innovations.

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The short-term nature of apartment leases exposes us more quickly to the effects of declining market rents, potentially making our results of operations and cash flows more volatile.

Generally, our residential apartment leases are for twelve months or less. If the terms of the renewal or releasing are less favorable than current terms, then the Company’s results of operations and financial condition could be negatively affected. Given our generally shorter-term lease structure, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. In addition, operating expenses associated with each property, such as real estate taxes, insurance, utilities, maintenance costs and employee wages and benefits, may not decline as quickly or at the same rate as revenues when circumstances might cause a reduction of those revenues at our properties.

Because real estate investments are illiquid, we may not be able to sell properties when appropriate.

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

Competition for acquisitions may prevent us from acquiring properties on favorable terms.

We may not be successful in pursuing acquisition and development opportunities. We expect that other real estate investors will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development and acquisition efforts. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms.

Operations from new acquisitions, development projects and renovations may fail to perform as expected.

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

Additionally, we have and may in the future acquire large portfolios of properties or companies that could increase our size and result in alterations to our capital structure. We may be unable to integrate the operations of newly acquired large portfolios or companies and realize the anticipated synergies and other benefits or do so within the anticipated time frame.

Construction risks on our development projects could affect our profitability.

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

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We are subject to risks involved in real estate activity through joint ventures.

We currently, and may continue to in the future, develop and acquire properties in joint ventures with unrelated third parties. Joint ventures create risks including the following:

The possibility that our partners might refuse or be financially unable to make capital contributions when due or may fail to meet contractual obligations to cover development cost overruns and therefore we may be forced to make contributions to protect our investments;
These projects generally use mortgage debt (including variable rate constructions loans) to finance their activities at a higher leverage level than how we finance the Company as a whole;
We may be responsible to our partners for indemnifiable losses;
Our partners might at any time have business, tax planning or economic goals that are inconsistent with ours; and
Our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests.

At times we have entered into agreements providing for joint and several liability with our partners. We also have in the past and could choose in the future to guarantee part of or all of certain joint venture debt. We and our respective joint venture partners may each have the right to trigger a buy-sell arrangement that could cause us to sell our interest, or acquire our partner's interest, at a time or price that is unfavorable to us. Each joint venture agreement is individually negotiated and our ability to operate, finance or dispose of properties and interests in such joint ventures in our sole discretion may be limited to varying degrees depending on the terms of the applicable joint venture agreement. To the extent we have commitments to, on behalf of or are dependent on any such off-balance sheet commitments, or if those commitments or their properties or leases are subject to material contingencies, our liquidity and financial condition could be adversely affected.

In some instances, our joint venture partners may also have competing interests or objectives that could create conflicts of interest similar to those noted above. These objectives may be contrary to our compliance with the REIT requirements, and our REIT status could be jeopardized if any of our joint ventures do not operate in compliance with those requirements. To the extent our partners do not meet their obligations to us or our joint ventures, or they take actions inconsistent with the interests of the joint venture, it could have a negative effect on our results of operations and financial condition, including distributions to our security holders.

The Company’s real estate assets may be subject to impairment charges.

A decline in the fair value of our assets may require us to recognize an impairment against our assets under accounting principles generally accepted in the United States (“GAAP”) if we were to determine that, with respect to any assets in unrealized loss positions, we do not have the ability and intent to hold such assets for a period of time sufficient to allow for recovery of the depreciated cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write-down the depreciated cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted amortized cost of such assets at the time of sale. If we are required to recognize material asset impairment charges, these charges could adversely affect our financial condition and results of operations.

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

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

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Our various technology-related initiatives to improve our operating margins and customer experience may fail to perform as expected.

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

Risks Related to our Financing Strategy and Capital Structure

Disruptions in the financial markets could hinder our ability to obtain debt and equity financing and impact our acquisitions and dispositions.

Dislocations and disruptions in capital markets could result in increased costs or lack of availability of debt financing (including under our commercial paper program) and equity financing. Such events may affect our ability to refinance existing debt, require us to utilize higher cost alternatives and/or impair our ability to adjust to changing economic and business conditions. Capital market disruptions have and could continue to negatively impact our ability to make acquisitions or make it more difficult or not possible for us to sell properties or may unfavorably affect the price we receive for properties that we do sell. Such disruptions could cause the price of our securities to decline.

Changes in market conditions and volatility of share prices could decrease the market price of our Common Shares.

The stock markets, including the New York Stock Exchange on which we list our Common Shares, have experienced significant price and volume fluctuations over time, including in recent years. As a result, the market price of our Common Shares has been and could continue to be similarly volatile. Investors in our Common Shares consequently may experience a decrease in the value of their shares, including decreases due to this volatility and not necessarily related to our operating performance or prospects. Additionally, the market price of our Common Shares may decline or fluctuate significantly in response to the sale of substantial amounts of our Common Shares, or the anticipation of the sale of such shares, by large holders of our securities, as well as our inclusion or exclusion from stock indices. The issuance of additional Common Shares by the Company, or the perception that such issuances might occur, could also cause significant volatility and decreases in the value of our shares.

Our financial counterparties may not perform their obligations.

Disruptions in financial and credit markets or other events could impair the ability of our counterparties to perform under their contractual obligations to us. There are multiple financial institutions that are individually committed to provide borrowings under our revolving credit facility and to pay us amounts due under various interest rate derivative agreements. Should any of these institutions fail to perform their obligations when contractually required, our financial condition could be adversely affected.

Rising interest rates can increase costs and impact the value of the Company’s assets.

The Company is exposed to market risk from financial instruments primarily from changes in market interest rates. Such risks derive from the refinancing of debt at or prior to maturity, from exposure to interest rate fluctuations on floating rate debt and from derivative instruments utilized to swap fixed rate debt to floating rates or to hedge rates in anticipation of future debt issuances. Rising interest rates increased and may continue to increase our interest expense and the costs of refinancing existing debt. Higher interest rates also increased and could continue to increase capitalization rates, which may lead to reduced valuations of the Company’s assets.

Insufficient cash flow could affect our ability to service existing debt and create refinancing risk.

We are subject to risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments. We may not be able to refinance existing debt and if we can, the terms of such refinancing may be less favorable than the terms of existing indebtedness. Our inability to refinance, extend or repay debt with proceeds from other capital market transactions would negatively impact our financial condition. If the debt is secured, the mortgage holder may also foreclose on the property.

A significant downgrade in our credit ratings could adversely affect our performance.

A significant downgrade in our credit ratings, while not affecting our ability to draw proceeds under the Company’s revolving credit facility, would cause the corresponding borrowing costs to increase, impact our ability to borrow secured and unsecured debt, and

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potentially impair our ability to access the commercial paper market or otherwise limit our access to capital. In addition, a downgrade below investment grade would likely cause us to lose access to the commercial paper markets and would require us to post cash collateral and/or letters of credit in favor of some of our secured lenders to cover our self-insured property and liability insurance deductibles or to obtain lower deductible insurance compliant with the lenders’ requirements at the lower ratings level.

Financial covenants could limit operational flexibility and affect our overall financial position.

The terms of our credit agreements, including our revolving credit facility and the indentures under which a substantial portion of our unsecured debt was issued, require us to comply with a number of financial covenants. These covenants may limit our flexibility to run our business and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness and trigger a cross default of other debt.

Some of our properties are financed with tax-exempt bonds or otherwise contain restrictive covenants or deed restrictions, including affordability requirements, which limit income from certain properties. The Company monitors compliance with the restrictive covenants and deed restrictions that affect these properties. While we generally believe that the interest rate benefit from financing properties with tax-exempt bonds more than outweighs any loss of income due to restrictive covenants or deed restrictions, this may not always be the case. Some of these requirements are complex, and our failure to comply with them may subject us to material fines or liabilities.

We may change the dividend policy for our securities in the future.

The decision to declare and pay dividends on our securities, as well as the timing, amount and composition of any such future dividends, is at the discretion of the Board of Trustees and will depend on actual and projected financial conditions, the Company’s actual and projected liquidity and operating results, the Company’s projected cash needs for capital expenditures and other investment activities and such other factors as the Company’s Board of Trustees deems relevant. The Board of Trustees may modify our dividend policy from time to time and any change in our dividend policy could negatively impact the market price of our securities.

Issuances or sales of our Common Shares or Units may be dilutive.

Any additional issuance of Common Shares (including those issued under our At-The-Market ("ATM") program) or Units would reduce the percentage of our Common Shares and Units owned by existing investors. In most circumstances, shareholders and unitholders will not be entitled to vote on whether or not we issue additional Common Shares or Units. In addition, depending on the terms and pricing of additional offerings of our Common Shares or Units along with the value of our properties, our shareholders and unitholders could experience dilution in both the book value and fair value of their Common Shares or Units, as well as dilution in our actual and expected earnings per share, funds from operations (“FFO”) per share and Normalized FFO per share.

Regulatory and Tax Risks

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

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

Compliance or failure to comply with regulatory requirements could result in substantial costs.

Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements, building and zoning codes, environmental and other ESG regulations, and federal, state and local accessibility requirements, including and in addition to those imposed by the Americans with Disabilities Act and the Fair Housing Act. Noncompliance could result in fines, subject us to lawsuits and require us to remediate or repair the noncompliance. Existing requirements could change and compliance with future requirements may require significant unanticipated expenditures that could adversely affect our financial condition or results of operations.

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Environmental problems are possible and can be costly.

Federal, state and local laws and regulations relating to the protection of the environment may require current or previous owners or operators of real estate to investigate and clean up hazardous or toxic substances at such properties. The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination. These laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. Third parties may also sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site. We cannot be assured that existing environmental assessments of our properties reveal all environmental liabilities, that any prior owner of any of our properties did not create a material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any of our properties.

Changes in U.S. accounting standards may materially and adversely affect the reporting of our operations.

The Company follows GAAP, which is established by the Financial Accounting Standards Board (“FASB”), an independent body whose standards are recognized by the Securities and Exchange Commission (“SEC”) as authoritative for publicly held companies. The FASB and the SEC create and interpret accounting standards and may issue new accounting pronouncements or change the interpretation and application of these standards that govern the preparation of our financial statements. These changes could have a material impact on our reported consolidated results of operations and financial position.

Any weaknesses identified in our internal control over financial reporting could result in a decrease of our share price.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have a negative impact on our share price.

Our failure to qualify as a REIT would have serious adverse consequences to our security holders.

We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements, for which there is limited judicial and administrative interpretation, however, are highly technical and complex. Therefore, we cannot guarantee that we have qualified or will qualify as a REIT in the future. The determination that we are a REIT requires an analysis of various factual matters that may not be totally within our control. To qualify as a REIT, our assets must be substantially comprised of real estate assets as defined in the Internal Revenue Code of 1986, as amended (the “Code”), and related guidance and our gross income must generally come from rental and other real estate or passive related sources that are itemized in the REIT tax laws. We are also required to distribute to security holders at least 90% of our REIT taxable income excluding net capital gains.

If we fail to qualify as a REIT, we would be subject to U.S. federal income tax at regular corporate rates and would have to pay significant income taxes unless the Internal Revenue Service (“IRS”) granted us relief under certain statutory provisions. In addition, we would remain disqualified from taxation as a REIT for four years following the year in which we failed to qualify as a REIT. We would therefore have less money available for investments or for distributions to security holders and would no longer be required to make distributions to security holders. This would likely have a significant negative impact on the value of our securities.

In addition, certain of our subsidiary entities have elected to be taxed as REITs. As such, each must separately satisfy all of the requirements to qualify for REIT status. If a subsidiary REIT did not satisfy such requirements, and certain relief provisions did not apply, it would be taxed as a regular corporation and its income would be subject to U.S. federal income taxation. Failure to comply with these complex REIT rules at the subsidiary REIT level can have a material and detrimental impact to EQR’s REIT status.

 

Gain on disposition of assets held for sale in the ordinary course of business is subject to 100% tax.

Any gain resulting from transfers of properties we hold as inventory or primarily for sale to customers in the ordinary course of business is treated as income from a prohibited transaction subject to a 100% penalty tax unless certain safe harbor exceptions set forth in the Code apply. We do not believe that our transfers or disposals of property are prohibited transactions. However, whether property is held for investment purposes is a question that depends on all the facts and circumstances surrounding the particular transaction. The IRS may contend that certain transfers or dispositions of properties by us or contributions of properties are prohibited transactions. While we believe the IRS would not prevail in any such dispute, if the IRS were to argue successfully that a transfer or disposition of property constituted a prohibited transaction, we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT.

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We may be subject to legislative or regulatory tax changes that could negatively impact our financial condition.

At any time, U.S. federal income tax laws governing REITs or impacting real estate or the administrative interpretations of those laws may be enacted or amended. We cannot predict if or when any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, IRS and U.S. Department of Treasury regulations or other administrative guidance, will be adopted or become effective and any such law, regulation or interpretation may take effect retroactively. The Company and our shareholders could be negatively impacted by any such change in, or any new, U.S. federal income tax law, regulations or administrative guidance.

Distribution requirements may limit our flexibility to manage our portfolio.

In order to maintain qualification as a REIT under the Code, a REIT must annually distribute to its shareholders at least 90% of its REIT taxable income, excluding the dividends paid deduction and net capital gains. To the extent the REIT does not distribute all of its net capital gain, or distributes at least 90%, but less than 100% of its REIT taxable income, it will be required to pay regular U.S. federal income tax on the undistributed amount at corporate rates. In addition, we will be subject to a 4% nondeductible excise tax on amounts, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our net capital gains and 100% of our undistributed income from prior years. We may not have sufficient cash or other liquid assets to meet the 90% distribution requirement. We may be required from time to time, under certain circumstances, to accrue as income for tax purposes interest and rent earned but not yet received. We may incur a reduction in tax depreciation without a reduction in capital expenditures. Difficulties in meeting the 90% distribution requirement might arise due to competing demands for our funds or due to timing differences between tax reporting and cash distributions, because deductions may be disallowed, income may be reported before cash is received, expenses may have to be paid before a deduction is allowed or because the IRS may make a determination that adjusts reported income. In addition, gain from the sale of property may exceed the amount of cash received on a leverage-neutral basis. A substantial increase to our taxable income may reduce the flexibility of the Company to manage its portfolio through dispositions of properties other than through tax deferred transactions, such as Section 1031 exchanges, or cause the Company to borrow funds or liquidate investments on unfavorable terms in order to meet these distribution requirements. If we do not dispose of our properties through tax deferred transactions, we may be required to distribute the gain proceeds to shareholders or pay income tax. If we fail to satisfy the 90% distribution requirement and are unable to cure the deficiency, we would cease to be taxed as a REIT, resulting in substantial tax-related liabilities.

We have a share ownership limit for REIT tax purposes.

To remain qualified as a REIT for U.S. federal income tax purposes, not more than 50% in value of our outstanding Shares may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of any year. To facilitate maintenance of our REIT qualification, our Declaration of Trust, subject to certain exceptions, prohibits ownership by any single shareholder of more than five percent of the lesser of the number or value of any outstanding class of common or preferred shares (the “Ownership Limit”). Absent an exemption or waiver granted by our Board of Trustees, securities acquired or held in violation of the Ownership Limit will be transferred to a trust for the exclusive benefit of a designated charitable beneficiary, and the security holder’s rights to distributions and to vote would terminate. A transfer of Shares may automatically be deemed void if it causes a person to violate the Ownership Limit. The Ownership Limit could delay or prevent a change in control and, therefore, could affect our security holders’ ability to realize a premium over the then-prevailing market price for their Shares. To reduce the ability of the Board to use the Ownership Limit as an anti-takeover device, the Company’s Ownership Limit requires, rather than permits, the Board to grant a waiver of the Ownership Limit if the individual seeking a waiver demonstrates that such ownership would not jeopardize the Company’s status as a REIT.

Tax elections regarding distributions may impact future liquidity of the Company or our shareholders.

Under certain circumstances we have made and/or may consider making in the future, a tax election to treat certain distributions to shareholders made after the close of a taxable year as having been distributed during such closed taxable year. This election, which is provided for in the Code, may allow us to avoid increasing our dividends or paying additional income taxes in the current year. However, this could result in a constraint on our ability to decrease our dividends in future years without creating risk of either violating the REIT distribution requirements or generating additional income tax liability. In addition, the Company may be required to pay interest to the IRS based on such a distribution.

In order to retain liquidity and continue to satisfy the REIT distribution requirements, the Company could issue shares rather than pay a dividend entirely in cash to shareholders. The IRS has published several rulings which have allowed REITs to offer shareholders the choice between shares or cash as a form of payment of a dividend (an “elective stock dividend”). However, REITs are generally required to structure the cash component to be no less than 20% of the total dividend paid. Therefore, it is possible that the total tax burden to shareholders resulting from an elective stock dividend may exceed the amount of cash received by the shareholder.

Inapplicability of Maryland law limiting certain changes in control.

Certain provisions of Maryland law applicable to REITs prohibit “business combinations” (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding securities, or with an affiliate

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who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the Company’s outstanding voting securities (an “Interested Shareholder”), or with an affiliate of an Interested Shareholder. These prohibitions last for five years after the most recent date on which the Interested Shareholder became an Interested Shareholder. After the five-year period, a business combination with an Interested Shareholder must be approved by two super-majority shareholder votes unless, among other conditions, holders of common shares receive a minimum price for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Shareholder for its common shares. As permitted by Maryland law, however, the Board of Trustees of the Company has opted out of these restrictions with respect to any business combination involving Samuel Zell and certain of his affiliates and persons acting in concert with them. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to a business combination involving us and/or any of them. Such business combinations may not be in the best interest of our security holders.

General Risk Factors

Risk of Pandemics or Other Health Crises.

Pandemics, epidemics or other health crises, including the novel coronavirus (“COVID-19”), have and could in the future disrupt our business. Both global and locally targeted health events could materially affect areas where our properties, corporate/regional offices or major service providers are located. These events have and could in the future have an adverse effect on our business, results of operations, financial condition and liquidity in a number of ways, including, but not limited to:

The deterioration of global economic conditions as a result of such a crisis could ultimately decrease occupancy levels and pricing across our portfolio and/or increase concessions, reduce or defer our residents’ spending, result in changes in resident preferences (including changes resulting from increased employer flexibility to work from home) or negatively impact our residents’ and tenants’ ability to pay their rent on time or at all;
Local and national authorities expanding or extending certain measures that impose restrictions on our ability to enforce residents’ or tenants’ contractual rental obligations (such as eviction moratoriums or rental forgiveness) and limit our ability to raise rents or charge certain fees;
The risk of a prolonged outbreak and/or multiple waves of an outbreak could cause long-term damage to economic conditions, which in turn could diminish our access to capital at attractive terms and/or cause material declines in the fair value of our assets, leading to asset impairment charges; and
The potential inability to maintain adequate staffing at our properties and corporate/regional offices due to an outbreak and/or changes in employee preferences causing them to leave their jobs.

To the extent a pandemic, epidemic or other health crisis adversely affects our business, results of operations, cash flows and financial condition, it may also continue to heighten many of the other risks described elsewhere in this Item 1A, Risk Factors.

Significant inflation could negatively impact our business.

Substantial inflationary pressures can adversely affect us by increasing the costs of land, materials, labor and other costs needed to operate our business. In a highly inflationary environment, we may not be able to raise rental rates at or above the rate of inflation, which could reduce our profit margins. If we are unable to increase our rental prices to offset the effects of inflation, our business, results of operations, cash flows and financial condition could be adversely affected. In addition, interest rate increases enacted to combat inflation have caused market disruption and could continue to prevent us from acquiring or disposing of assets on favorable terms.

The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our reputation and business relationships, all of which could negatively impact our financial results.

A cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt payment collections and operations, corrupt data or steal confidential information, including information regarding our residents, prospective residents, employees and employees’ dependents.

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Despite system redundancy, the implementation of security measures, required employee awareness training and the existence of a disaster recovery plan for our internal information technology systems, our systems and systems maintained by third-party vendors with which we do business are vulnerable to damage from any number of sources. We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, phishing attempts, ransomware or other scams, persons inside our organization or persons/vendors with access to our systems and other significant disruptions of our information technology networks and related systems, including property infrastructure. These risks have increased due to increased reliance on remote working and other electronic interactions with our current and prospective residents. Our information technology networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations. Even the most well-protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.

We may periodically collect and store personally identifiable information of our residents and prospective residents in connection with our leasing activities, and we may collect and store personally identifiable information of our employees and their dependents. In addition, we often engage third-party service providers that may have access to such personally identifiable information in connection with providing necessary information technology, security and other business services to us. The systems of these third-party service providers may contain defects in design or other problems that could unexpectedly compromise personally identifiable information. Although we make efforts to maintain the security and integrity of our information technology networks and those of our third-party providers and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.

We address potential breaches or disclosure of this confidential personally identifiable information by implementing a variety of security measures intended to protect the confidentiality and security of this information including (among others): (a) engaging reputable, recognized firms to help us design and maintain our information technology and data security systems; (b) conducting periodic testing and verification of information and data security systems, including performing ethical hacks of our systems to discover where any vulnerabilities may exist; (c) providing periodic employee awareness training around phishing and other scams, malware and other cyber risks; (d) implementing a corrective cybersecurity awareness policy that impacts an employee’s performance and compensation to articulate the potential implications of failed phishing tests; and (e) systematically deleting personally identifiable information that no longer is required. The Company also has a cyber liability insurance policy to provide some coverage for certain risks arising out of data and network breaches and data privacy regulations which provides a policy aggregate limit and a per occurrence deductible. Cyber liability insurance generally covers, among other things, costs associated with the wrongful release, through inadvertent breach or network attack, of personally identifiable information. However, there can be no assurance that these measures will prevent a cyber incident or that our cyber liability insurance coverage will be sufficient to cover our losses in the event of a cyber incident.

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

We are also subject to laws, rules, and regulations in the United States, such as the California Consumer Privacy Act (“CCPA”), relating to the collection, use, and security of resident, customer, employee and other data. Evolving compliance and operational requirements under the CCPA and the privacy laws of other jurisdictions in which we operate may impose significant costs that are likely to increase over time. Our failure to comply with laws, rules, and regulations related to privacy and data protection could harm our business or reputation or subject us to fines and penalties.

Our business and operations rely on specialized information technology systems, the failure of or inadequacy of which could impact our business.

Our ability to identify, implement and maintain appropriate information technology systems differentiates and creates competitive advantages for us in the operations of our business. These systems often are developed and hosted by third-party vendors whom we rely upon for ongoing maintenance, upgrades and enhancements. While we maintain a rigorous process around selecting appropriate information technology systems and partnering with vendors, our failure to adequately do so could negatively impact our operations and competitive position.

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We depend on our key personnel.

We depend on the efforts of our trustees and executive officers. If one or more of them resign or otherwise cease to be employed by us, our business and results of operations and financial condition could be adversely affected.

Litigation risk could affect our business.

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

Insurance policies can be costly and may not cover all losses, which may adversely affect our financial condition or results of operations.

The Company’s property, general liability and workers compensation insurance policies provide coverage with substantial per occurrence deductibles and/or self-insured retentions. These self-insurance retentions can be a material portion of insurance losses in excess of the base deductibles. While the Company has previously purchased incremental insurance coverage in the event of multiple non-catastrophic occurrences within the same policy year, these substantial deductible and self-insured retention amounts do expose the Company to greater potential for uninsured losses and this additional multiple occurrences coverage may not be available at all or on commercially reasonable terms in the future. We believe the policy specifications and insured limits of these policies are adequate and appropriate; however, there are certain types of extraordinary losses which may not be adequately covered under our insurance program. As a result, our financial results could be adversely affected and may vary significantly from period to period.

The Company relies on third-party insurance providers for its property, general liability, workers compensation and other insurance, and should any of them experience liquidity issues or other financial distress, it could negatively impact their ability to pay claims under the Company’s policies.

Earthquake risk: Our policies insuring against earthquake losses have substantial deductibles which are applied to the values of the buildings involved in the loss. With the geographic concentration of our properties, a single earthquake affecting a market may have a significant negative effect on our financial condition and results of operations. We cannot assure that an earthquake would not cause damage or losses greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected property or market, as well as anticipated future revenue.

Terrorism risk: The Company has terrorism insurance coverage which excludes losses from nuclear, biological and chemical attacks. In the event of a terrorist attack impacting one or more of our properties, we could lose the revenues from the property, our capital investment in the property and possibly face liability claims from residents or others suffering injuries or losses.

Catastrophic weather and natural disaster risk: Our properties may be located in areas that could experience catastrophic weather and other natural disasters from time to time, including wildfires, snow or ice storms, hail, windstorms or hurricanes, drought, flooding or other severe disasters. These severe weather and natural disasters could cause substantial damages or losses to our properties which may not be covered or could exceed our insurance coverage. Exposure to this risk could also result in a decrease in demand for properties located in these areas or affected by these conditions.

Climate change risk: To the extent that significant changes in the climate occur in areas where our properties are located, we may experience severe weather, which may result in physical damage to or decrease the demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material in nature, significant property damage or destruction of our properties could result. In addition, climate change could cause a significant increase in insurance premiums and deductibles or a decrease in the availability of coverage, either of which could expose the Company to even greater uninsured losses. Our financial condition or results of operations may be adversely affected. In addition, changes in federal, state and local legislation and regulation based on concerns about climate change could adversely impact the value of our properties or result in increased capital expenditures or operating expenses on our existing properties and our new development properties.

Provisions of our Declaration of Trust and Bylaws could inhibit changes in control.

Certain provisions of our Declaration of Trust and Bylaws may delay or prevent a change in control of the Company or other transactions that could provide the security holders with a premium over the then-prevailing market price of their securities or which might otherwise be in the best interest of our security holders. This includes the Ownership Limit described above. While our existing preferred shares/preference units do not have all of these provisions, any future series of preferred shares/preference units may have certain voting provisions that could delay or prevent a change in control or other transactions that might otherwise be in the interest of

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our security holders. Our Bylaws require certain information to be provided by any security holder, or persons acting in concert with such security holder, who proposes business or a nominee at an annual meeting of shareholders, including disclosure of information related to hedging activities and investment strategies with respect to our securities. These requirements could delay or prevent a change in control or other transactions that might otherwise be in the interest of our security holders. The Board of Trustees may use its powers to issue preferred shares and to set the terms of such securities to delay or prevent a change in control of the Company even if a change in control were in the interest of the security holders.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of December 31, 2022, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 308 properties located in 10 states and the District of Columbia consisting of 79,597 apartment units. See Item 1, Business, for additional information regarding the Company’s properties and the markets/metro areas upon which we are focused. The Company’s properties are summarized by building type in the following table:

 

Type

 

Properties

 

 

Apartment Units

 

 

Average
Apartment Units

 

Garden

 

 

96

 

 

 

24,449

 

 

 

255

 

Mid/High-Rise

 

 

212

 

 

 

55,148

 

 

 

260

 

 

 

 

308

 

 

 

79,597

 

 

 

258

 

 

Garden is generally defined as properties with two and/or three story buildings while mid/high-rise is generally defined as properties with greater than three story buildings. These two property types typically provide residents with amenities, such as rooftop decks and swimming pools, fitness centers and community rooms. In addition, many of our urban properties have non-residential components, such as parking garages and/or retail spaces.

The Company’s properties are summarized by ownership type in the following table:

 

 

 

Properties

 

 

Apartment Units

 

Wholly Owned Properties

 

 

293

 

 

 

76,483

 

Partially Owned Properties – Consolidated

 

 

15

 

 

 

3,114

 

 

 

 

308

 

 

 

79,597

 

 

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The following table sets forth certain information by market relating to the Company’s properties at December 31, 2022:

 

Portfolio Summary

 

Markets/Metro Areas

 

Properties

 

 

Apartment
Units

 

 

% of
Stabilized
Budgeted
NOI (1)

 

 

Average
Rental
Rate (2)

 

Established Markets:

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

66

 

 

 

15,259

 

 

 

18.2

%

 

$

2,773

 

Orange County

 

 

13

 

 

 

4,028

 

 

 

5.2

%

 

 

2,685

 

San Diego

 

 

12

 

 

 

2,878

 

 

 

4.0

%

 

 

2,894

 

Subtotal – Southern California

 

 

91

 

 

 

22,165

 

 

 

27.4

%

 

 

2,772

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

44

 

 

 

11,790

 

 

 

15.9

%

 

 

3,229

 

Washington, D.C.

 

 

47

 

 

 

14,716

 

 

 

15.3

%

 

 

2,531

 

New York

 

 

34

 

 

 

8,536

 

 

 

14.0

%

 

 

4,378

 

Boston

 

 

27

 

 

 

7,170

 

 

 

11.5

%

 

 

3,373

 

Seattle

 

 

46

 

 

 

9,525

 

 

 

11.0

%

 

 

2,575

 

Subtotal – Established Markets

 

 

289

 

 

 

73,902

 

 

 

95.1

%

 

 

3,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expansion Markets:

 

 

 

 

 

 

 

 

 

 

 

 

Denver

 

 

8

 

 

 

2,498

 

 

 

2.7

%

 

 

2,372

 

Atlanta

 

 

4

 

 

 

1,215

 

 

 

1.1

%

 

 

2,120

 

Dallas/Ft. Worth

 

 

4

 

 

 

1,241

 

 

 

0.7

%

 

 

1,904

 

Austin

 

 

3

 

 

 

741

 

 

 

0.4

%

 

 

1,853

 

Subtotal – Expansion Markets

 

 

19

 

 

 

5,695

 

 

 

4.9

%

 

 

2,153

 

Total

 

 

308

 

 

 

79,597

 

 

 

100.0

%

 

$

2,956

 

 

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

(1)
% of Stabilized Budgeted NOI - Represents original budgeted 2023 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.
(2)
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.

The following tables provide a rollforward of the apartment units included in Same Store Properties (please refer to the Definitions section in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations) and a reconciliation of apartment units included in Same Store Properties to those included in Total Properties for the year ended December 31, 2022:

 

 

 

Year Ended December 31, 2022

 

 

 

Properties

 

 

Apartment
Units

 

Same Store Properties at December 31, 2021

 

 

284

 

 

 

74,077

 

2019 acquisitions (not stabilized until 2020)

 

 

1

 

 

 

217

 

2020 acquisitions

 

 

1

 

 

 

158

 

2022 dispositions

 

 

(3

)

 

 

(945

)

Lease-up properties stabilized

 

 

2

 

 

 

221

 

Properties removed from same store (1)

 

 

(2

)

 

 

(819

)

Other

 

 

 

 

 

(37

)

Same Store Properties at December 31, 2022

 

 

283

 

 

 

72,872

 

 

 

 

Year Ended December 31, 2022

 

 

 

Properties

 

 

Apartment
Units

 

Same Store

 

 

283

 

 

 

72,872

 

Non-Same Store:

 

 

 

 

 

 

2022 acquisitions

 

 

1

 

 

 

172

 

2021 acquisitions

 

 

17

 

 

 

4,747

 

Properties removed from same store (1)

 

 

2

 

 

 

819

 

Lease-up properties not yet stabilized (2)

 

 

4

 

 

 

986

 

Other

 

 

1

 

 

 

1

 

Total Non-Same Store

 

 

25

 

 

 

6,725

 

Total Properties and Apartment Units

 

 

308

 

 

 

79,597

 

 

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Note: Properties are considered “stabilized” when they have achieved 90% occupancy for three consecutive months. Properties are included in same store when they are stabilized for all of the current and comparable periods presented.

(1)
Consists of two properties which were removed from the same store portfolio as discussed further below:
a.
Laguna Clara located in Santa Clara, CA containing 222 apartment units was removed from the same store portfolio in the second quarter of 2022 due to a major renovation and redevelopment project, including the demolition of 42 apartment units. As of December 31, 2022, the property had an occupancy of 65.2%. This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented.
b.
Pearl MDR located in Marina Del Rey, CA containing 597 apartment units was removed from the same store portfolio in the third quarter of 2022 due to a large scale repiping and renovation project in which significant portions of the property are being taken offline for extended time periods. As of December 31, 2022, the property had an occupancy of 79.6%. This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented.
(2)
Consists of properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented. Also includes one former third-party master-leased property that was not stabilized.

As of December 31, 2022, the Company’s same store occupancy was 95.7% and its total portfolio-wide occupancy, which includes completed development properties in various stages of lease-up, was 95.6%. Certain of the Company’s properties are encumbered by mortgages and additional detail can be found on Schedule III – Real Estate and Accumulated Depreciation.

The properties in various stages of development and lease-up at December 31, 2022 are included in the following table:

 

Development and Lease-Up Projects as of December 31, 2022

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated/Actual

 

 

 

Projects

 

Location

 

Ownership
Percentage

 

No. of
Apartment
Units

 

 

Total
Budgeted Capital
Cost (1)

 

 

Total
Book Value
to Date

 

 

Total
Debt (2)

 

 

Percentage
Completed

 

Start
Date

 

Initial
Occupancy

 

Completion
Date

 

Stabilization
Date

 

Percentage
Leased / Occupied

 

CONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reverb (fka 9th and W) (3)

 

Washington, D.C.

 

92%

 

 

312

 

 

$

108,027

 

 

$

88,378

 

 

$

43,714

 

 

88%

 

Q3 2021

 

Q1 2023

 

Q3 2023

 

Q3 2024

 

– / –

 

Laguna Clara II

 

Santa Clara, CA

 

100%

 

 

225

 

 

 

152,621

 

 

 

24,562

 

 

 

 

 

14%

 

Q2 2022

 

Q4 2024

 

Q1 2025

 

Q4 2025

 

– / –

 

Projects Under Development - Consolidated

 

 

 

 

 

 

537

 

 

 

260,648

 

 

 

112,940

 

 

 

43,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed Not Stabilized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aero Apartments

 

Alameda, CA

 

90%

 

 

200

 

 

 

117,794

 

 

 

113,610

 

 

 

64,664

 

 

100%

 

Q3 2019

 

Q2 2021

 

Q2 2021

 

Q1 2023

 

97% / 95%

 

Projects Completed Not Stabilized -
  Consolidated

 

 

 

 

 

 

200

 

 

 

117,794

 

 

 

113,610

 

 

 

64,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed and Stabilized During the
Quarter:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alcott Apartments (fka West End Tower)

 

Boston, MA

 

100%

 

 

470

 

 

 

409,164

 

 

 

408,114

 

 

 

 

 

100%

 

Q2 2018

 

Q3 2021

 

Q4 2021

 

Q4 2022

 

95% / 95%

 

Projects Completed and Stabilized During the
  Quarter - Consolidated

 

 

 

 

 

 

470

 

 

 

409,164

 

 

 

408,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNCONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alloy Sunnyside

 

Denver, CO

 

80%

 

 

209

 

 

 

66,004

 

 

 

38,309

 

 

 

5,931

 

 

53%

 

Q3 2021

 

Q4 2023

 

Q2 2024

 

Q1 2025

 

– / –

 

Alexan Harrison

 

Harrison, NY

 

62%

 

 

450

 

 

 

198,664

 

 

 

100,922

 

 

 

2,809

 

 

39%

 

Q3 2021

 

Q3 2023

 

Q2 2024

 

Q4 2025

 

– / –

 

Solana Beeler Park

 

Denver, CO

 

90%

 

 

270

 

 

 

81,206

 

 

 

27,008

 

 

 

 

 

19%

 

Q4 2021

 

Q4 2023

 

Q2 2024

 

Q1 2025

 

– / –

 

Remy (Toll)

 

Frisco, TX

 

75%

 

 

357

 

 

 

96,937

 

 

 

46,214

 

 

 

4,892

 

 

37%

 

Q1 2022

 

Q1 2024

 

Q4 2024

 

Q3 2025

 

– / –

 

Settler (Toll)

 

Fort Worth, TX

 

75%

 

 

362

 

 

 

81,775

 

 

 

26,456

 

 

 

 

 

24%

 

Q2 2022

 

Q2 2024

 

Q3 2024

 

Q3 2025

 

– / –

 

Lyle (Toll) (3)

 

Dallas, TX

 

75%

 

 

334

 

 

 

86,332

 

 

 

13,732

 

 

 

 

 

13%

 

Q3 2022

 

Q4 2024

 

Q2 2025

 

Q1 2026

 

– / –

 

Projects Under Development - Unconsolidated

 

 

 

 

 

 

1,982

 

 

 

610,918

 

 

 

252,641

 

 

 

13,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Consolidated

 

 

 

 

 

 

1,207

 

 

 

787,606

 

 

 

634,664

 

 

 

108,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Unconsolidated

 

 

 

 

 

 

1,982

 

 

 

610,918

 

 

 

252,641

 

 

 

13,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects

 

 

 

 

 

 

3,189

 

 

$

1,398,524

 

 

$

887,305

 

 

$

122,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
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.
(2)
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, 2022, three projects have begun drawing on their construction loans for the unconsolidated joint venture projects under development.
(3)
The land parcels under these projects are subject to long-term ground leases.

As of December 31, 2022, the Company does not believe there is any litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company.

Item 4. Mine Safety Disclosures

Not applicable.

23


Table of Contents

 

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Share/Unit Information (Equity Residential and ERP Operating Limited Partnership)

The Company’s Common Shares trade on the New York Stock Exchange under the trading symbol EQR. There is no established public market for the Operating Partnership’s Units (OP Units and restricted units). At February 10, 2023, the number of record holders of Common Shares was approximately 1,790 and 378,602,684 Common Shares were outstanding. At February 10, 2023, the number of record holders of Units in the Operating Partnership was approximately 465 and 391,169,119 Units were outstanding.

Unregistered Common Shares Issued in the Quarter Ended December 31, 2022 (Equity Residential)

During the quarter ended December 31, 2022, EQR issued 414,871 Common Shares in exchange for 414,871 OP Units held by various limited partners of ERPOP. OP Units are generally exchangeable into Common Shares on a one-for-one basis or, at the option of ERPOP, the cash equivalent thereof, at any time one year after the date of issuance. These shares were either registered under the Securities Act of 1933, as amended (the “Securities Act”), or issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder, as these were transactions by an issuer not involving a public offering. In light of the manner of the sale and information obtained by EQR from the limited partners in connection with these transactions, EQR believes it may rely on these exemptions.

Item 6. Reserved

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Table of Contents

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations and financial condition of the Company and the Operating Partnership should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Company’s ability to control the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary entity has been consolidated with the Company for financial reporting purposes, except for any unconsolidated properties/entities. Capitalized terms used herein and not defined are as defined elsewhere in this Annual Report on Form 10-K. In addition, please refer to the Definitions section below for various capitalized terms not immediately defined in this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Forward-looking statements are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Company’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Additional factors that might cause such differences are discussed in Part I of this Annual Report on Form 10-K, particularly those under Item 1A, Risk Factors. Forward-looking statements and related uncertainties are also included in the Notes to Consolidated Financial Statements in this report. Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update or supplement these forward-looking statements.

Overview

See Item 1, Business, for discussion regarding the Company’s overview.

Business Objectives and Operating and Investing Strategies

See Item 1, Business, for discussion regarding the Company’s business objectives and operating and investing strategies.

COVID-19 Impact

The Company continues to monitor and respond to the ongoing effects of the COVID-19 pandemic. For additional details, see Item 1A, Risk Factors.

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Table of Contents

 

Results of Operations

2021 and 2022 Transactions

In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the years ended December 31, 2021 and 2022:

 

Portfolio Rollforward

($ 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 (1)

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase Price

 

 

Acquisition
Cap Rate

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

1

 

 

 

172

 

 

$

113,000

 

 

 

3.5

%

Unconsolidated Land Parcels (2)

 

 

 

 

 

 

 

$

56,886

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

 

Disposition
Yield

 

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

(3

)

 

 

(945

)

 

$

(746,150

)

 

 

(3.4

)%

Configuration Changes

 

 

 

 

 

(37

)

 

 

 

 

 

 

12/31/2022

 

 

308

 

 

 

79,597

 

 

 

 

 

 

 

 

(1)
The Company acquired four properties during the year ended December 31, 2021, one each in the Denver, Atlanta, Seattle and Dallas/Ft. Worth markets, that were in lease-up and are expected to stabilize in their second year of ownership at the combined Acquisition Cap Rate listed above.
(2)
The purchase price listed represents the total consideration for the closing of the respective joint ventures.

Acquisitions

The consolidated properties acquired in 2021 are located in the Atlanta (4), Austin (3), Boston, Dallas/Ft. Worth (4), Denver (3), Seattle and Washington, D.C. markets. The Atlanta, Austin and Dallas/Ft. Worth acquisitions marked the Company’s re-entry into these markets;
Approximately $1.4 billion, or 82.0% of all acquisition activity in 2021, was in expansion markets;
The Company funded the 2021 acquisitions by selling older assets located within established markets that no longer met our long-term investment criteria;
The consolidated property acquired in 2022 is located in the San Diego market; and
In 2022, the Company acquired its joint venture partner’s 25% interest in a 432-unit apartment property located in the Washington, D.C. market for $32.2 million, and the property is now wholly owned.

Dispositions

The consolidated properties disposed of in 2021 were located in the Los Angeles (6), New York, San Francisco (5), Seattle and Washington, D.C. markets and the sales generated an Unlevered IRR of 10.4%; and
The consolidated properties disposed of in 2022 were located in the New York (2) and Washington, D.C. markets and the sales generated an Unlevered IRR of 5.3%.

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Developments

The Company completed construction on three consolidated apartment properties during 2021, located in the San Francisco, Washington, D.C. and Boston markets, consisting of 824 apartment units totaling approximately $602.8 million of development costs;
The Company commenced construction on one consolidated and three unconsolidated apartment properties during 2021, located in the Denver (2), New York and Washington, D.C. markets, consisting of 1,241 apartment units totaling approximately $452.7 million of expected development costs;
The Company commenced construction on one consolidated and three unconsolidated apartment properties during 2022, located in the San Francisco and Dallas/Ft. Worth (3) markets, consisting of 1,278 apartment units totaling approximately $417.7 million of expected development costs;
The Company stabilized two consolidated apartment properties during 2022, located in the Washington, D.C. and Boston markets, consisting of 624 apartment units totaling approximately $482.1 million of development costs; and
The Company spent approximately $203.6 million during 2022, primarily for consolidated and unconsolidated development projects.

Investments in Unconsolidated Entities

The Company entered into six separate unconsolidated joint ventures during 2021 for the purpose of developing vacant land parcels in Texas (3), Colorado (2) and New York. The Company’s total investment in these six joint ventures was approximately $72.2 million and $150.4 million as of December 31, 2021 and 2022, respectively. Three of the projects are related to the Company’s joint venture development program with Toll, two of which commenced construction during the second and third quarters of 2022; and
The Company entered into three separate unconsolidated joint ventures during 2022 for the purpose of developing vacant land parcels in the Dallas/Ft. Worth and Boston (2) markets. The Company’s total investment in these three joint ventures was approximately $66.8 million as of December 31, 2022. One of the projects is related to the Company’s joint venture development program with Toll, which commenced construction during the first quarter of 2022 prior to our entrance into the joint venture.

See Notes 4 and 6 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate investments and investments in partially owned entities.

Comparison of the year ended December 31, 2022 to the year ended December 31, 2021

The following table presents a reconciliation of diluted earnings per share/unit for the year ended December 31, 2022 as compared to the same period in 2021:

 

 

 

Year Ended
December 31

 

Diluted earnings per share/unit for full year 2021

 

$

3.54

 

Property NOI

 

 

0.60

 

Interest expense

 

 

(0.02

)

Corporate overhead (1)

 

 

(0.03

)

Net gain/loss on property sales

 

 

(1.95

)

Non-operating asset gains/losses

 

 

(0.07

)

Impairment – non-operating real estate assets

 

 

0.04

 

Depreciation expense

 

 

(0.11

)

Other

 

 

0.05

 

Diluted earnings per share/unit for full year 2022

 

$

2.05

 

 

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

The Company’s primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents 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.

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Table of Contents

 

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 (amounts in thousands):

 

 

 

Year Ended December 31,

 

 

2022 vs. 2021

 

 

 

2022

 

 

2021

 

 

$ Change

 

 

% Change

 

Operating income

 

$

1,116,046

 

 

$

1,675,841

 

 

$

(559,795

)

 

 

(33.4

)%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Property management

 

 

110,304

 

 

 

98,155

 

 

 

12,149

 

 

 

12.4

%

General and administrative

 

 

58,710

 

 

 

56,506

 

 

 

2,204

 

 

 

3.9

%

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

43,896

 

 

 

5.2

%

Net (gain) loss on sales of real estate properties

 

 

(304,325

)

 

 

(1,072,183

)

 

 

767,858

 

 

 

(71.6

)%

Impairment

 

 

 

 

 

16,769

 

 

 

(16,769

)

 

 

(100.0

)%

Total NOI

 

$

1,862,903

 

 

$

1,613,360

 

 

$

249,543

 

 

 

15.5

%

Rental income:

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

$

2,533,577

 

 

$

2,291,604

 

 

$

241,973

 

 

 

10.6

%

Non-same store/other

 

 

201,603

 

 

 

172,393

 

 

 

29,210

 

 

 

16.9

%

Total rental income

 

 

2,735,180

 

 

 

2,463,997

 

 

 

271,183

 

 

 

11.0

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

 

802,291

 

 

 

774,504

 

 

 

27,787

 

 

 

3.6

%

Non-same store/other

 

 

69,986

 

 

 

76,133

 

 

 

(6,147

)

 

 

(8.1

)%

Total operating expenses

 

 

872,277

 

 

 

850,637

 

 

 

21,640

 

 

 

2.5

%

NOI:

 

 

 

 

 

 

 

 

 

 

 

 

Same store

 

 

1,731,286

 

 

 

1,517,100

 

 

 

214,186

 

 

 

14.1

%

Non-same store/other

 

 

131,617

 

 

 

96,260

 

 

 

35,357

 

 

 

36.7

%

Total NOI

 

$

1,862,903

 

 

$

1,613,360

 

 

$

249,543

 

 

 

15.5

%

 

Note: See Note 17 in the Notes to Consolidated Financial Statements for detail by reportable segment/market. Non-same store/other NOI results consist primarily of properties acquired in calendar years 2021 and 2022, operations from the Company’s development properties and operations prior to disposition from 2021 and 2022 sold properties.

The increase in same store rental income is primarily driven by strong Physical Occupancy and continued growth in pricing.
The increase in same store operating expenses is due primarily to:
Utilities – A $13.9 million increase from gas and electric, primarily driven by higher commodity prices; and
Repairs and maintenance – A $9.8 million increase primarily driven by volume and timing of maintenance and repairs along with increases in minimum wage on contracted services.
The increase in non-same store/other NOI is due primarily to a positive impact of higher NOI from properties acquired during 2021 and 2022 of $54.5 million and higher NOI from development properties in lease-up of $20.6 million, partially offset by a negative impact of lost NOI from 2021 and 2022 dispositions of $52.2 million and a negative impact of $1.2 million in lower NOI from one former master-leased property and two properties that have been removed from same store while undergoing major renovations.
The increase in consolidated total NOI is primarily a result of the Company’s higher NOI from same store properties, largely due to improvement in same store revenues as noted above. Operating expense growth remains modest due to a combination of continued success in managing controllable expenses, favorable growth in real estate tax expense (increased by only $3.2 million) and declines in payroll expense (decreased by $3.1 million) primarily due to the Company's various innovation and centralization initiatives, leading to 14.1% same store NOI growth for the year ended December 31, 2022 as compared to the prior year period.

See the Same Store Results section below for additional discussion of those results.

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Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third-party management companies. These expenses increased approximately $12.1 million or 12.4% during the year ended December 31, 2022 as compared to 2021. This increase is primarily attributable to increases in payroll-related costs, training/conference costs, temporary help/contractors costs and third-party management fees.

General and administrative expenses, which include corporate operating expenses, increased approximately $2.2 million or 3.9% during the year ended December 31, 2022 as compared to 2021, primarily due to increases in payroll-related costs, legal and professional fees and training/conference costs.

Depreciation expense, which includes depreciation on non-real estate assets, increased approximately $43.9 million or 5.2% during the year ended December 31, 2022 as compared to 2021, primarily as a result of additional depreciation expense on properties acquired in 2021 and 2022 and development properties placed in service during 2021, partially offset by lower depreciation from properties sold in 2021 and 2022.

Net gain on sales of real estate properties decreased approximately $767.9 million or 71.6% during the year ended December 31, 2022 as compared to 2021, primarily as a result of a lower sales volume with the sale of three consolidated apartment properties in 2022 as compared to the sale of fourteen consolidated apartment properties in the same period in 2021.

Impairment decreased approximately $16.8 million during the year ended December 31, 2022 as compared to 2021, due to an impairment charge in 2021 on one land parcel held for development compared to no impairment charges taken during 2022.

Interest and other income decreased approximately $23.5 million or 91.5% during the year ended December 31, 2022 as compared to 2021. The decrease is primarily due to a gain of $23.6 million on the sale of various investment securities that occurred during 2021 but not during 2022.

Other expenses decreased approximately $5.6 million or 29.1% during the year ended December 31, 2022 as compared to 2021, primarily due to a decline in construction defect and litigation reserves and pursuit costs recorded between 2022 and 2021, partially offset by increases in advocacy contributions, demolition/abatement costs and data transformation project costs.

Interest expense, including amortization of deferred financing costs, increased approximately $10.4 million or 3.7% during the year ended December 31, 2022 as compared to 2021. The increase is primarily due to higher overall interest rates and lower capitalized interest. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the year ended December 31, 2022 was 3.68% as compared to 3.52% in 2021. The Company capitalized interest of approximately $7.1 million and $15.9 million during the years ended December 31, 2022 and 2021, respectively.

Net (income) loss attributable to Noncontrolling Interests in partially owned properties decreased approximately $14.2 million or 79.0% during the year ended December 31, 2022 as compared to 2021, primarily as a result of noncontrolling interest allocations related to the sale of one partially owned apartment property in 2021 as compared to no sales in 2022.

For comparison of the year ended December 31, 2021 to the year ended December 31, 2020, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2021.

Same Store Results

Properties that the Company owned and were stabilized for all of both 2022 and 2021 (the “2022 Same Store Properties”), which represented 72,872 apartment units, drove the Company’s results of operations. Properties are considered “stabilized” when they have achieved 90% occupancy for three consecutive months. Properties are included in same store when they are stabilized for all of the current and comparable periods presented.

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Table of Contents

 

The following table provides comparative total same store results and statistics for the 2022 Same Store Properties:

 

2022 vs. 2021

Same Store Results/Statistics Including 72,872 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

 

2022

 

 

2021

 

 

Residential

 

%
Change

 

Non-
Residential

 

%
Change

 

Total

 

%
Change

 

 

 

Residential

 

Non-
Residential

 

Total

 

Revenues

$

2,441,522

 

 

10.7

%

$

92,055

 

 

5.8

%

$

2,533,577

 

 

10.6

%

 

Revenues

$

2,204,625

 

$

86,979

 

$

2,291,604

 

Expenses

$

778,206

 

 

3.6

%

$

24,085

 

 

3.6

%

$

802,291

 

 

3.6

%

 

Expenses

$

751,250

 

$

23,254

 

$

774,504

 

NOI

$

1,663,316

 

 

14.4

%

$

67,970

 

 

6.7

%

$

1,731,286

 

 

14.1

%

 

NOI

$

1,453,375

 

$

63,725

 

$

1,517,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,898

 

 

10.4

%

 

 

 

 

 

 

 

 

 

Average Rental Rate

$

2,625

 

 

 

 

 

Physical Occupancy

 

96.4

%

 

0.3

%

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.1

%

 

 

 

 

Turnover

 

42.8

%

 

(1.9

%)

 

 

 

 

 

 

 

 

 

Turnover

 

44.7

%

 

 

 

 

 

Note: Same store revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following table provides results and statistics related to our Residential same store operations for the years ended December 31, 2022 and 2021:

 

2022 vs. 2021

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year

 

Markets/Metro Areas

 

Apartment
Units

 

 

2022
% of
Actual
NOI

 

 

2022
Average
Rental
Rate

 

 

2022
Weighted
Average
Physical
Occupancy %

 

 

2022
Turnover

 

 

Average
Rental
Rate

 

 

Physical
Occupancy

 

 

Turnover

 

Los Angeles

 

 

14,662

 

 

 

19.8

%

 

$

2,733

 

 

 

96.6

%

 

 

38.4

%

 

 

9.0

%

 

 

(0.2

%)

 

 

(3.1

%)

Orange County

 

 

4,028

 

 

 

5.8

%

 

 

2,614

 

 

 

97.0

%

 

 

34.5

%

 

 

12.8

%

 

 

(0.7

%)

 

 

(0.1

%)

San Diego

 

 

2,706

 

 

 

4.0

%

 

 

2,766

 

 

 

96.7

%

 

 

38.1

%

 

 

11.4

%

 

 

(0.9

%)

 

 

(5.0

%)

Subtotal – Southern California

 

 

21,396

 

 

 

29.6

%

 

 

2,715

 

 

 

96.7

%

 

 

37.6

%

 

 

10.0

%

 

 

(0.4

%)

 

 

(2.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

11,368

 

 

 

17.4

%

 

 

3,152

 

 

 

96.1

%

 

 

41.5

%

 

 

8.3

%

 

 

0.9

%

 

 

(6.5

%)

Washington, D.C.

 

 

14,187

 

 

 

16.2

%

 

 

2,456

 

 

 

96.8

%

 

 

43.1

%

 

 

5.5

%

 

 

0.3

%

 

 

(2.2

%)

New York

 

 

8,536

 

 

 

13.5

%

 

 

4,068

 

 

 

96.9

%

 

 

42.4

%

 

 

17.6

%

 

 

1.8

%

 

 

4.2

%

Seattle

 

 

9,331

 

 

 

11.4

%

 

 

2,497

 

 

 

95.1

%

 

 

51.6

%

 

 

10.7

%

 

 

(0.5

%)

 

 

0.7

%

Boston

 

 

6,430

 

 

 

10.0

%

 

 

3,208

 

 

 

96.2

%

 

 

45.3

%

 

 

11.2

%

 

 

0.5

%

 

 

(1.8

%)

Denver

 

 

1,624

 

 

 

1.9

%

 

 

2,299

 

 

 

96.7

%

 

 

60.3

%

 

 

11.3

%

 

 

0.1

%

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

72,872

 

 

 

100.0

%

 

$

2,898

 

 

 

96.4

%

 

 

42.8

%

 

 

10.4

%

 

 

0.3

%

 

 

(1.9

%)

 

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.3% of total revenues for the year ended December 31, 2022.

Despite geopolitical and economic uncertainties, demand to live in our apartment communities remained healthy, which our financial results reflected, as we continued to capture the gap between in-place rent levels and market rent levels. Demand for our apartments continues to support strong Physical Occupancy with pricing that is largely in-line with expectations, including modest use of Leasing Concessions. Key operating drivers for this performance during 2022 include:

Pricing – Pricing (net of Leasing Concessions) in 2022 was strong, driven by continued improvement across the portfolio, especially in New York. After unprecedented growth earlier in the year, pricing began to moderate in late August 2022, which is typical, but slightly more pronounced than we had expected. Regardless, pricing remained positive during the fourth quarter of 2022 which is stronger than historical trends.
Physical Occupancy – Physical Occupancy of 96.4% for the year ended December 31, 2022 remained strong, contributing to growth in Same Store Residential Revenues.

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Percentage of Residents Renewing and Turnover – We continue to see a high Percentage of Residents Renewing in our portfolio, which we believe reflects both the strength of demand and quality of our product. The Percentage of Residents Renewing has been strong at 56.5% for the fourth quarter of 2022. Turnover has been the lowest in the Company’s history at 42.8% for the full year of 2022, reflecting a healthy and consistent trend of historically high resident retention.

In addition to these stronger fundamentals, bad debt, net moderated during the first half of 2022 with improvement in resident collections primarily driven by receipt of governmental rental assistance payments on behalf of our residents. Bad debt, net increased in the second half of 2022 primarily due to the governmental rental assistance programs winding down.

Transaction activity has slowed as buyers and sellers adjust their expectations to a volatile economic climate and rising interest rates. While this type of environment can be challenging, the Company has traditionally found investment opportunities during periods of market dislocation as our ability to move quickly and our relatively low cost of capital creates flexibility that can provide us a competitive advantage.

Overall, the fundamentals of our business remain strong. Long-term, we expect elevated single family home ownership costs, positive household formation trends and the overall deficit in housing across the country to buffer the impact on our business from the risks of potential economic weakness. We also see our affluent resident base as being more resilient to rising inflation due to higher levels of disposable income and lower relative rent-to-income ratios.

Liquidity and Capital Resources

 

With approximately $2.4 billion in readily available liquidity, a strong balance sheet, limited near-term maturities, very strong credit metrics and ample access to capital markets, the Company believes it is well positioned to meet its future obligations and opportunities. See further discussion below.

Statements of Cash Flows

The following table sets forth our sources and uses of cash flows for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Cash flows provided by (used for):

 

 

 

 

 

 

 

 

 

Operating activities

 

$

1,454,756

 

 

$

1,260,184

 

 

$

1,265,536

 

Investing activities

 

$

107,792

 

 

$

(434,620

)

 

$

663,586

 

Financing activities

 

$

(1,785,612

)

 

$

(565,056

)

 

$

(1,946,393

)

 

The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the year ended December 31, 2022.

Operating Activities

Our operating cash flows are primarily impacted by NOI and its components, such as Average Rental Rates, Physical Occupancy levels and operating expenses related to our properties. Cash provided by operating activities for the year ended December 31, 2022 as compared to 2021, increased by approximately $194.6 million as a direct result of the NOI and other changes discussed above in Results of Operations.

Investing Activities

Our investing cash flows are primarily impacted by our transaction activity (acquisitions/dispositions), development spend and capital expenditures. For 2022, key drivers were:

Acquired one consolidated rental property for approximately $113.0 million in cash;
Disposed of three consolidated rental properties, receiving net proceeds of approximately $720.3 million;
Invested $109.3 million primarily in development projects;

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Invested $159.7 million primarily in unconsolidated development joint venture entities as well as unconsolidated investments in real estate technology funds/companies for various technology initiatives; and
Invested $221.1 million in capital expenditures to real estate presented in the table below.

For the year ended December 31, 2022, our actual capital expenditures to real estate included the following (amounts in thousands except for apartment unit and per apartment unit amounts):

Capital Expenditures to Real Estate

For the Year Ended December 31, 2022

 

 

 

Same Store
Properties

 

 

Non-Same Store
Properties/Other

 

 

Total

 

 

Same Store Avg. Per Apartment Unit

 

Total Apartment Units

 

 

72,872

 

 

 

6,725

 

 

 

79,597

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Improvements

 

$

102,079

 

 

$

16,335

 

(2)

$

118,414

 

 

$

1,401

 

Renovation Expenditures

 

 

43,197

 

(1)

 

6,730

 

(2)

 

49,927

 

 

 

592

 

Replacements

 

 

49,834

 

 

 

2,911

 

 

 

52,745

 

 

 

684

 

Total Capital Expenditures to Real Estate

 

$

195,110

 

 

$

25,976

 

 

$

221,086

 

 

$

2,677

 

 

(1)
Renovation Expenditures – Amounts for 1,794 same store apartment units approximated $24,079 per apartment unit renovated.
(2)
Includes expenditures for two properties that have been removed from same store while undergoing major renovations requiring a significant number of apartment units to be vacated to accommodate the extensive planned improvements. The renovations are expected to continue through at least the end of 2023 at both properties.

Financing Activities

Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders and other Common Share activity. For 2022, key drivers were:

Obtained $48.1 million in variable rate construction mortgage debt that is non-recourse to the Company;
Repaid $289.9 million of mortgage loans (inclusive of scheduled principal repayments);
Repaid $500.0 million of unsecured notes by using disposition proceeds;
Settled all 1.7 million Common Shares under the ATM forward sale agreements for cash proceeds of $139.6 million;
Acquired our joint venture partner’s 25% interest in an apartment property for $32.2 million;
Issued Common Shares related to share option exercises and ESPP purchases and received net proceeds of $29.2 million; and
Paid dividends/distributions on Common Shares, Preferred Shares, Units (including OP Units and restricted units) and noncontrolling interests in partially owned properties totaling approximately $982.8 million.

Short-Term Liquidity and Cash Proceeds

The Company generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under the Company’s revolving credit facility and commercial paper program. Currently, the Company considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions.

The following table presents the Company’s balances for cash and cash equivalents, restricted deposits and the available borrowing capacity on its revolving credit facility as of December 31, 2022 and 2021 (amounts in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Cash and cash equivalents

 

$

53,869

 

 

$

123,832

 

Restricted deposits

 

$

83,303

 

 

$

236,404

 

Unsecured revolving credit facility availability

 

$

2,366,537

 

 

$

2,181,372

 

 

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Credit Facility and Commercial Paper Program

The Company has a $2.5 billion unsecured revolving credit facility maturing October 26, 2027. The Company has the ability to increase available borrowings by an additional $750.0 million by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. The Revolving Credit Agreement also contains a sustainability-linked pricing component which provides for interest rate margin reductions upon achieving certain sustainability ratings. See Note 9 in the Notes to Consolidated Financial Statements for additional discussion of the Company’s credit facility.

The Company may borrow up to a maximum of $1.0 billion under its commercial paper program subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness.

The Company limits its utilization of the revolving credit 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 as of February 10, 2023 (amounts in thousands):

 

 

 

February 10, 2023

 

Unsecured revolving credit facility commitment

 

$

2,500,000

 

Commercial paper balance outstanding

 

 

(130,000

)

Unsecured revolving credit facility balance outstanding

 

 

 

Other restricted amounts

 

 

(3,484

)

Unsecured revolving credit facility availability

 

$

2,366,516

 

 

Dividend Policy

The Company declared a dividend/distribution for each quarter in 2022 of $0.625 per share/unit, an annualized increase of 3.7% over the amount paid in 2021. All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees.

Total dividends/distributions paid in January 2023 amounted to $244.6 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended December 31, 2022.

Long-Term Financing and Capital Needs

The Company expects to meet its long-term liquidity requirements, such as lump sum unsecured note and mortgage debt maturities, property acquisitions and financing of development activities, through the issuance of secured and unsecured debt and equity securities (including additional OP Units), proceeds received from the disposition of certain properties and joint ventures, along with cash generated from operations after all distributions. The Company has a significant number of unencumbered properties available to secure additional mortgage borrowings should unsecured capital be unavailable or the cost of alternative sources of capital be too high. The value of and cash flow from these unencumbered properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $28.1 billion in investment in real estate on the Company’s balance sheet at December 31, 2022, $24.5 billion or 87.1% was unencumbered. However, there can be no assurances that these sources of capital will be available to the Company in the future on acceptable terms or otherwise. For additional details, see Item 1A, Risk Factors.

EQR issues equity and guarantees certain debt of the Operating Partnership from time to time. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.

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The Company’s total debt summary schedule as of December 31, 2022 is as follows:

Debt Summary as of December 31, 2022

($ in thousands)

 

 

 

Debt
Balances

 

 

% of Total

 

Secured

 

$

1,953,438

 

 

 

26.3

%

Unsecured

 

 

5,472,284

 

 

 

73.7

%

Total

 

$

7,425,722

 

 

 

100.0

%

Fixed Rate Debt:

 

 

 

 

 

 

Secured – Conventional

 

$

1,608,838

 

 

 

21.7

%

Unsecured – Public

 

 

5,342,329

 

 

 

71.9

%

Fixed Rate Debt

 

 

6,951,167

 

 

 

93.6

%

Floating Rate Debt:

 

 

 

 

 

 

Secured – Conventional

 

 

108,378

 

 

 

1.4

%

Secured – Tax Exempt

 

 

236,222

 

 

 

3.2

%

Unsecured – Revolving Credit Facility

 

 

 

 

 

 

Unsecured – Commercial Paper Program

 

 

129,955

 

 

 

1.8

%

Floating Rate Debt

 

 

474,555

 

 

 

6.4

%

Total

 

$

7,425,722

 

 

 

100.0

%

 

The following table summarizes the Company’s debt maturity schedule as of December 31, 2022:

Debt Maturity Schedule as of December 31, 2022

($ in thousands)

 

 

Year

 

Fixed
Rate

 

 

Floating
Rate

 

 

Total

 

 

% of Total

 

2023 (2)

 

$

800,000

 

 

$

198,275

 

(1)

$

998,275

 

 

 

13.3

%

2024

 

 

 

 

 

6,100

 

 

 

6,100

 

 

 

0.1

%

2025

 

 

450,000

 

 

 

53,180

 

 

 

503,180

 

 

 

6.7

%

2026

 

 

592,025

 

 

 

9,000

 

 

 

601,025

 

 

 

8.0

%

2027

 

 

400,000

 

 

 

9,800

 

 

 

409,800

 

 

 

5.5

%

2028

 

 

900,000

 

 

 

10,700

 

 

 

910,700

 

 

 

12.1

%

2029

 

 

888,120

 

 

 

11,500

 

 

 

899,620

 

 

 

12.0

%

2030

 

 

1,095,000

 

 

 

12,600

 

 

 

1,107,600

 

 

 

14.8

%

2031

 

 

528,500

 

 

 

39,700

 

 

 

568,200

 

 

 

7.6

%

2032

 

 

 

 

 

28,000

 

 

 

28,000

 

 

 

0.4

%

2033+

 

 

1,350,850

 

 

 

110,900

 

 

 

1,461,750

 

 

 

19.5

%

Subtotal

 

 

7,004,495

 

 

 

489,755

 

 

 

7,494,250

 

 

 

100.0

%

Deferred Financing Costs and
   Unamortized (Discount)

 

 

(53,328

)

 

 

(15,200

)

 

 

(68,528

)

 

N/A

 

Total

 

$

6,951,167

 

 

$

474,555

 

 

$

7,425,722

 

 

 

100.0

%

 

(1)
Includes $130.0 million in principal outstanding on the Company’s commercial paper program.
(2)
During 2022, the Company entered into $450.0 million of ten-year forward starting SOFR swaps at a weighted average rate of 2.90% (currently equivalent to a ten-year U.S. Treasury of approximately 3.23%) to hedge the U.S. Treasury risk for the refinancing of 2023 maturities.

Interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 2022, inclusive of capitalized interest, approximates $210.0 million annually for the next five years, with total remaining obligations of approximately $2.3 billion. For floating rate debt, the current rate in effect for the most recent payment through December 31, 2022 is assumed to be in effect through the respective maturity date of each instrument.

See Note 9 in the Notes to Consolidated Financial Statements for additional discussion of debt at December 31, 2022. See also Notes 8 and 16 in the Notes to Consolidated Financial Statements for additional discussion of contractual obligations and commitments as of December 31, 2022.

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Table of Contents

 

Capital Structure

The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2022 is presented in the following table. The Company calculates the equity component of its market capitalization as the sum of (i) the total outstanding Common Shares and assumed conversion of all Units at the equivalent market value of the closing price of the Company’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preferred shares outstanding.

Equity Residential

Capital Structure as of December 31, 2022

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

 

Secured Debt

 

 

 

 

 

 

 

$

1,953,438

 

 

 

26.3

%

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

5,472,284

 

 

 

73.7

%

 

 

 

Total Debt

 

 

 

 

 

 

 

 

7,425,722

 

 

 

100.0

%

 

 

24.3

%

Common Shares (includes Restricted Shares)

 

 

378,429,708

 

 

 

96.8

%

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

12,429,737

 

 

 

3.2

%

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

390,859,445

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

Common Share Price at December 31, 2022

 

$

59.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,060,707

 

 

 

99.8

%

 

 

 

Perpetual Preferred Equity

 

 

 

 

 

 

 

 

37,280

 

 

 

0.2

%

 

 

 

Total Equity

 

 

 

 

 

 

 

 

23,097,987

 

 

 

100.0

%

 

 

75.7

%

Total Market Capitalization

 

 

 

 

 

 

 

$

30,523,709

 

 

 

 

 

 

100.0

%

 

The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2022 is presented in the following table. The Operating Partnership calculates the equity component of its market capitalization as the sum of (i) the total outstanding Units at the equivalent market value of the closing price of the Company’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preference units outstanding.

ERP Operating Limited Partnership

Capital Structure as of December 31, 2022

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

 

Secured Debt

 

 

 

 

 

 

$

1,953,438

 

 

 

26.3

%

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

5,472,284

 

 

 

73.7

%

 

 

 

Total Debt

 

 

 

 

 

 

 

7,425,722

 

 

 

100.0

%

 

 

24.3

%

Total Outstanding Units

 

 

390,859,445

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Price at December 31, 2022

 

$

59.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,060,707

 

 

 

99.8

%

 

 

 

Perpetual Preference Units

 

 

 

 

 

 

 

37,280

 

 

 

0.2

%

 

 

 

Total Equity

 

 

 

 

 

 

 

23,097,987

 

 

 

100.0

%

 

 

75.7

%

Total Market Capitalization

 

 

 

 

 

 

$

30,523,709

 

 

 

 

 

 

100.0

%

 

Financial Flexibility

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

The Company has an ATM share offering program which allows EQR to issue Common Shares from time to time into the existing trading market at current market prices or through negotiated transactions, including under forward sale arrangements. In May 2022, the Company replaced the prior program with a new program which extended the maturity to May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of December 31, 2022.

Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the

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agreements in whole or in part through the delivery or receipt of Common Shares or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 11 in the Notes to Consolidated Financial Statements for additional discussion). The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s Common Shares over the term of the forward sale agreement.

During the quarter ended September 30, 2021, the Company entered into forward sale agreements under the prior program for a total of approximately 1.7 million Common Shares at a weighted average initial forward price per share of $83.25. During the quarter ended December 31, 2022, the Company settled all of the outstanding forward sale agreements, at a weighted average forward price per share of $80.22, which is inclusive of adjustments made to reflect the then-current federal funds rate and the amount of dividends paid to holders of the Company's Common Shares, for net proceeds of approximately $139.6 million. Concurrent with this transaction, ERPOP issued the same amount of OP Units to EQR in exchange for the net proceeds.

The Company may repurchase up to 13.0 million Common Shares under its share repurchase program. No open market repurchases have occurred since 2008. As of February 10, 2023, EQR has remaining authorization to repurchase up to 13.0 million of its shares.

We believe our ability to access capital markets is enhanced by ERPOP’s long-term senior debt ratings and short-term commercial paper ratings, as well as EQR’s long-term preferred equity ratings. As of February 10, 2023, the ratings are as follows:

 

 

 

Standard & Poor’s

 

Moody's

ERPOP's long-term senior debt rating

 

A-

 

A3

ERPOP's short-term commercial paper rating

 

A-2

 

P-2

EQR's long-term preferred equity rating

 

BBB

 

Baa1

 

See Note 18 in the Notes to Consolidated Financial Statements for discussion of the events, if any, which occurred subsequent to December 31, 2022.

Definitions

The definition of certain terms described above or below are as follows:

Acquisition 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.
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.
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 $150-$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.
Leasing Concessions – Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.
Non-Residential – Consists of revenues and expenses from retail and public parking garage operations.

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Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2021 and 2022, plus any properties in lease-up and not stabilized as of January 1, 2021.
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.
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).
Residential – Consists of multifamily apartment revenues and expenses.
Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2021, 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.
% of Stabilized Budgeted NOI – Represents original budgeted 2023 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.
Turnover – Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units.
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.

 

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Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or different presentation of our financial statements.

The Company’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements. These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 2022.

The Company has identified the significant accounting policies below as critical accounting policies. These critical accounting policies are those that have the most impact on the reporting of our financial condition and those requiring significant judgments and estimates. With respect to these critical accounting policies, management believes that the application of judgments and estimates is consistently applied and produces financial information that fairly presents the results of operations for all periods presented.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets, including its investment in real estate, for indicators of impairment at least quarterly. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal, regulatory and environmental concerns, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted. Assessing impairment can be complex and involves a high degree of subjectivity in determining if indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. Assumptions are primarily subject to property-specific characteristics, especially with respect to our intent and ability to hold the related asset. While these property-specific assumptions can have a significant impact on the undiscounted cash flows or estimated fair value of a particular asset, our evaluation of the reported carrying values of long-lived assets during the current year were not particularly sensitive to external or market assumptions.

Acquisition of Investment Properties

The Company allocates the purchase price of properties that meet the definition of an asset acquisition to net tangible and identified intangible assets acquired based on their relative fair values using assumptions primarily based upon property-specific characteristics. In making estimates of relative fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired or developed and existing comparable properties in our portfolio and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets/liabilities acquired.

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Funds From Operations and Normalized Funds From Operations

The following is the Company’s and the Operating Partnership’s reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the three years ended December 31, 2022:

Funds From Operations and Normalized Funds From Operations

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Net (income) loss attributable to Noncontrolling
   Interests – Partially Owned Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Preferred/preference distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Net income available to Common Shares and Units / Units

 

 

800,131

 

 

 

1,375,660

 

 

 

944,556

 

Adjustments:

 

 

 

 

 

 

 

 

 

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

820,832

 

Depreciation – Non-real estate additions

 

 

(4,306

)

 

 

(4,277

)

 

 

(4,564

)

Depreciation – Partially Owned Properties

 

 

(2,640

)

 

 

(3,673

)

 

 

(3,345

)

Depreciation – Unconsolidated Properties

 

 

2,898

 

 

 

2,487

 

 

 

2,454

 

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

 

 

(9

)

 

 

(1,304

)

 

 

(1,636

)

Net (gain) loss on sales of real estate properties

 

 

(304,325

)

 

 

(1,072,183

)

 

 

(531,807

)

Noncontrolling Interests share of gain (loss) on sales
   of real estate properties

 

 

 

 

 

15,650

 

 

 

11,655

 

FFO available to Common Shares and Units / Units (1) (3) (4)

 

 

1,373,917

 

 

 

1,150,632

 

 

 

1,238,145

 

Adjustments:

 

 

 

 

 

 

 

 

 

Impairment – non-operating real estate assets

 

 

 

 

 

16,769

 

 

 

 

Write-off of pursuit costs

 

 

4,780

 

 

 

6,526

 

 

 

6,869

 

Debt extinguishment and preferred share redemption (gains) losses

 

 

4,664

 

 

 

744

 

 

 

39,292

 

Non-operating asset (gains) losses

 

 

2,368

 

 

 

(22,283

)

 

 

(32,590

)

Other miscellaneous items

 

 

(13,901

)

 

 

8,976

 

 

 

4,652

 

Normalized FFO available to Common Shares and Units / Units (2) (3) (4)

 

$

1,371,828

 

 

$

1,161,364

 

 

$

1,256,368

 

 

 

 

 

 

 

 

 

 

 

FFO (1) (3)

 

$

1,377,007

 

 

$

1,153,722

 

 

$

1,241,235

 

Preferred/preference distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

FFO available to Common Shares and Units / Units (1) (3) (4)

 

$

1,373,917

 

 

$

1,150,632

 

 

$

1,238,145

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO (2) (3)

 

$

1,374,918

 

 

$

1,164,454

 

 

$

1,259,458

 

Preferred/preference distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Normalized FFO available to Common Shares and Units / Units (2) (3) (4)

 

$

1,371,828

 

 

$

1,161,364

 

 

$

1,256,368

 

 

 

(1)
The National Association of Real Estate Investment Trusts (“Nareit”) defines funds from operations (“FFO”) (December 2018 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“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 funds from operations on the same basis.
(2)
Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
the impact of any expenses relating to non-operating real estate 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.

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(3)
The Company believes that FFO and FFO available to Common Shares and Units / 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 / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / 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 / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units 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 / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / 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.
(4)
FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units 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.

 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk from financial instruments primarily from changes in interest rates. Such risks derive from the refinancing of debt maturities, from exposure to interest rate fluctuations on floating rate debt and from derivative instruments utilized to swap fixed rate debt to floating or to hedge rates in anticipation of future debt issuances. Our operating results are, therefore, affected by changes in short-term interest rates, primarily SOFR, London Interbank Offered Rate ("LIBOR") and Securities Industry and Financial Markets Association (“SIFMA”) indices, which directly impact borrowings under our revolving credit facility and/or interest on secured and unsecured borrowings contractually tied to such rates. Short-term interest rates also indirectly affect the discount on notes issued under our commercial paper program. Additionally, we have exposure to long-term interest rates, particularly U.S. Treasuries, as they are utilized to price our long-term borrowings and therefore affect the cost of refinancing existing debt or incurring additional debt.

The Alternative Reference Rates Committee (the “ARRC”) has identified SOFR as the preferred alternative rate for USD LIBOR. As part of the transition process that is now under way, LIBOR is no longer published for certain tenors and key USD settings are expected to be discontinued by June 2023. SOFR is now the primary basis for determining interest payments on borrowings on the Company’s $2.5 billion revolving credit facility. We are closely monitoring the evolution of practices in the credit markets and we do not expect such transition to have a material impact on the Company’s financial position or cash flows.

The Company monitors and manages interest rates as part of its risk management process, by targeting adequate levels of floating rate exposure and an appropriate debt maturity profile. From time to time, we may utilize derivative instruments to manage interest rate exposure and to comply with the requirements of certain lenders, but not for trading or speculative purposes.

The Company had total variable rate debt of $0.5 billion, representing 6.4% of total debt, and $0.6 billion, representing 7.3% of total debt, as of December 31, 2022 and 2021, respectively. If interest rates had been 100 basis points higher in 2022 and 2021 and average balances coincided with year end balances, our annual interest expense would have been $4.7 million and $6.1 million higher, respectively. Unsecured notes issued under the Company’s commercial paper program are treated as variable rate debt for the purposes of this calculation even though they do not have a stated interest rate, given their short-term nature. The effect of derivatives, if applicable, is also considered when computing the total amount of variable rate debt.

Changes in interest rates also affect the estimated fair market value of our fixed rate debt, computed using a discounted cash flow model. As of December 31, 2022, the Company had total outstanding fixed rate debt of $7.0 billion, or 93.6% of total debt, with an estimated fair market value of $6.2 billion. If interest rates had been 100 basis points lower as of December 31, 2022, the estimated fair market value would have increased by approximately $397.5 million. As of December 31, 2021, the Company had total outstanding fixed rate debt of $7.7 billion, or 92.7% of total debt, with an estimated fair market value of $8.4 billion. If interest rates had been 100 basis points lower as of December 31, 2021, the estimated fair market value would have increased by approximately $637.2 million.

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As of December 31, 2022, the Company’s derivative instruments had a net asset fair value of approximately $20.7 million. If interest rates increased by 35 basis points across the curve relative to market quotes as of December 31, 2022 (a 10% upward “parallel shift”), the net asset fair value of the Company’s derivative instruments would be approximately $39.4 million. If interest rates decreased by 35 basis points (a 10% downward “parallel shift”), the net asset fair value of the Company’s derivative instruments would be approximately $1.5 million.

These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments. These analyses do not consider the effects of the changes in overall economic activity that could exist in such an environment. Further, in the event of changes of such magnitude, management would likely take actions to further mitigate its exposure to these changes. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Company’s financial structure or results.

The Company cannot predict the effect of adverse changes in interest rates on its debt and derivative instruments and, therefore, its exposure to market risk, nor can there be any assurance that long-term debt will be available at advantageous pricing. Consequently, future results may differ materially from the estimated adverse changes discussed above.

Item 8. Financial Statements and Supplementary Data

See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Equity Residential

(a) Evaluation of Disclosure Controls and Procedures:

Effective as of December 31, 2022, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b) Management’s Report on Internal Control over Financial Reporting:

Equity Residential’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

Based on the Company’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2022. Our internal control over financial reporting has been audited as of December 31, 2022 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c) Changes in Internal Control over Financial Reporting:

There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Table of Contents

 

ERP Operating Limited Partnership

(a) Evaluation of Disclosure Controls and Procedures:

Effective as of December 31, 2022, the Operating Partnership carried out an evaluation, under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of EQR, of the effectiveness of the Operating Partnership’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b) Management’s Report on Internal Control over Financial Reporting:

ERP Operating Limited Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of EQR, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

Based on the Operating Partnership’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2022. Our internal control over financial reporting has been audited as of December 31, 2022 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c) Changes in Internal Control over Financial Reporting:

There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership’s evaluation referred to above that occurred during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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Table of Contents

 

PART III

Items 10, 11, 12, 13 and 14.

Trustees, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions, and Trustee Independence; and Principal Accountant Fees and Services

The information required by Item 10, Item 11, Item 12 (with the exception of the Equity Compensation Plan Information provided below), Item 13 and Item 14 is incorporated by reference to, and will be contained in, Equity Residential’s Proxy Statement, which the Company intends to file no later than 120 days after the end of its fiscal year ended December 31, 2022, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 96.8% owner of ERP Operating Limited Partnership.

Equity Compensation Plan Information

The following table provides information as of December 31, 2022 with respect to the Company’s Common Shares that may be issued under its existing equity compensation plans.

 

Plan Category

 

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights

 

Weighted-average
exercise price of
outstanding
options, warrants
and rights

 

Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
in column (a))

 

 

(a) (1)

 

(b) (1)

 

(c) (2)

Equity compensation plans approved by shareholders

 

4,061,360

 

$62.60

 

11,407,237

Equity compensation plans not approved by shareholders

 

N/A

 

N/A

 

N/A

 

(1)
The amounts shown in columns (a) and (b) of the above table do not include 289,918 outstanding Common Shares (all of which are restricted and subject to vesting requirements) that were granted under the Company’s 2019 Share Incentive Plan, as amended (the “2019 Plan”), and outstanding Common Shares that have been purchased by employees and trustees under the Company’s ESPP.
(2)
Includes 8,920,638 Common Shares that may be issued under the 2019 Plan and 2,486,599 Common Shares that may be sold to employees and trustees under the ESPP.

On June 27, 2019, the shareholders of EQR approved the Company's 2019 Plan and the Company filed a Form S-8 registration statement to register 11,331,958 Common Shares under this plan. As of December 31, 2022, 8,920,638 shares were available for future issuance. The 2019 Plan expires on June 27, 2029.

Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in ERPOP issuing OP Units to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances.

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Table of Contents

 

PART IV

Item 15. Exhibit and Financial Statement Schedules

(a) The following documents are filed as part of this Report:

(1)
Financial Statements: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.
(2)
Exhibits: See the Exhibit Index.
(3)
Financial Statement Schedules: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.

Item 16. Form 10-K Summary

None.

 

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Table of Contents

 

EXHIBIT INDEX

The exhibits listed below are filed as part of this report. References to exhibits or other filings under the caption “Location” indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. The Commission file numbers for our Exchange Act filings referenced below are 1-12252 (Equity Residential) and 0-24920 (ERP Operating Limited Partnership).

 

Exhibit

 

Description

 

Location

3.1

 

Articles of Restatement of Declaration of Trust of Equity Residential dated December 9, 2004.

 

Included as Exhibit 3.1 to Equity Residential’s Form 10-K for the year ended December 31, 2004.

 

 

 

 

 

3.2

 

Eighth Amended and Restated Bylaws of Equity Residential, effective as of October 1, 2015.

 

Included as Exhibit 3.1 to Equity Residential's Form 8-K dated and filed on October 1, 2015.

 

 

 

 

 

3.3

 

First Amendment to Eighth Amended and Restated Bylaws of Equity Residential, dated November 20, 2017.

 

Included as Exhibit 3.1 to Equity Residential's Form 8-K dated and filed on November 20, 2017.

 

 

 

 

 

3.4

 

Second Amendment to Eighth Amended and Restated Bylaws of Equity Residential, effective as of May 4, 2020.

 

Included as Exhibit 3.1 to Equity Residential's Form 8-K dated May 4, 2020, filed on May 8, 2020.

 

 

 

 

 

3.5

 

Seventh Amended and Restated Agreement of Limited Partnership for ERP Operating Limited Partnership, dated as of March 18, 2021 and effective as of January 1, 2020.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated March 18, 2021, filed on March 24, 2021.

 

 

 

 

 

4.1

 

Description of Equity Residential Common Shares Registered Under Section 12 of the Securities Exchange Act of 1934.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2019.

 

 

 

 

 

4.2

 

Description of ERP Operating Limited Partnership Notes Registered Under Section 12 of the Securities Exchange Act of 1934.

 

Included as Exhibit 4.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2019.

 

 

 

 

 

4.3

 

Description of ERP Operating Limited Partnership OP Units Registered Under Section 12 of the Securities Exchange Act of 1934.

 

Included as Exhibit 4.3 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2021.

 

 

 

 

 

4.4

 

Indenture, dated October 1, 1994, between the Operating Partnership and The Bank of New York Mellon Trust Company, N.A., as successor trustee (“Indenture”).

 

Included as Exhibit 4(a) to ERP Operating Limited Partnership’s Form S-3 filed on October 7, 1994. **

 

 

 

 

 

4.5

 

First Supplemental Indenture to Indenture, dated as of September 9, 2004.

 

Included as Exhibit 4.2 to ERP Operating Limited Partnership’s Form 8-K, filed on September 10, 2004.

 

 

 

 

 

4.6

 

Second Supplemental Indenture to Indenture, dated as of August 23, 2006.

 

Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.

 

 

 

 

 

4.7

 

Third Supplemental Indenture to Indenture, dated as of June 4, 2007.

 

Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.

 

 

 

 

 

4.8

 

Fourth Supplemental Indenture to Indenture, dated as of December 12, 2011.

 

Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated December 7, 2011, filed on December 9, 2011.

 

 

 

 

 

4.9

 

Fifth Supplemental Indenture to Indenture, dated as of February 1, 2016.

 

Included as Exhibit 4.6 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2015.

 

 

 

 

 

4.10

 

Form of 3.375% Note due June 1, 2025.

 

Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated May 11, 2015, filed on May 13, 2015.

 

 

 

 

 

4.11

 

Terms Agreement regarding 7.57% Notes due August 15, 2026.

 

Included as Exhibit 1 to ERP Operating Limited Partnership’s Form 8-K, filed on August 13, 1996.

 

 

 

 

 

4.12

 

Form of 2.850% Note due November 1, 2026.

 

Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated October 4, 2016, filed on October 7, 2016.

 

 

 

 

 

4.13

 

Form of 3.250% Note due August 1, 2027.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 31, 2017, filed on August 2, 2017.

 

 

 

 

 

4.14

 

Form of 3.500% Note due March 1, 2028.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 1, 2018, filed on February 6, 2018.

 

 

 

 

 

4.15

 

Form of 4.150% Note due December 1, 2028.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated November 28, 2018, filed on November 29, 2018.

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4.16

 

Form of 3.000% Note due July 1, 2029.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 17, 2019, filed on June 20, 2019.

 

 

 

 

 

4.17

 

Form of 2.500% Note due February 15, 2030.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated August 20, 2019, filed on August 22, 2019.

 

 

 

 

 

4.18

 

Form of 1.850% Note due August 1, 2031.

 

Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated August 3, 2021, filed on August 5, 2021.

 

 

 

 

 

4.19

 

Form of 4.500% Note due July 1, 2044.

 

Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated June 16, 2014, filed on June 18, 2014.

 

 

 

 

 

4.20

 

Form of 4.500% Note due June 1, 2045.

 

Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated May 11, 2015, filed on May 13, 2015.

 

 

 

 

 

4.21

 

Form of 4.000% Note due August 1, 2047.

 

Included as Exhibit 4.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 31, 2017, filed on August 2, 2017.

 

 

 

 

 

10.1

*

Noncompetition Agreement (Zell).

 

Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158. **

 

 

 

 

 

10.2

 

Revolving Credit Agreement, dated as of October 26, 2022, among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, and the financial institutions party thereto.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated October 26, 2022, filed on October 27, 2022.

 

 

 

 

 

10.3

 

Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P.

 

Included as Exhibit 10.16 to Equity Residential's Form 10-K for the year ended December 31, 1999.

 

 

 

 

 

10.4

*

Equity Residential 2019 Share Incentive Plan.

 

Included as Exhibit 99.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 27, 2019, filed on July 1, 2019.

 

 

 

 

 

10.5

*

Equity Residential 2011 Share Incentive Plan.

 

Included as Exhibit 99.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 16, 2011, filed on June 22, 2011.

 

 

 

 

 

10.6

*

First Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2012.

 

 

 

 

 

10.7

*

Second Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2013.

 

 

 

 

 

10.8

*

Third Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2014.

 

 

 

 

 

10.9

*

Fourth Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2014.

 

 

 

 

 

10.10

*

Fifth Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2016.

 

 

 

 

 

10.11

*

Sixth Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.18 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2016.

 

 

 

 

 

10.12

*

Seventh Amendment to 2011 Share Incentive Plan.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2017.

 

 

 

 

 

10.13

*

Form of 2018 Long-Term Incentive Plan Award Agreement.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2018.

 

 

 

 

 

10.14

*

Form of 2022 Long-Term Incentive Plan Award Agreement.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2022.

 

 

 

 

 

46


Table of Contents

 

10.15

*

Form of Change in Control/Severance Agreement between the Company and other executive officers.

 

Included as Exhibit 10.13 to Equity Residential's Form 10-K for the year ended December 31, 2001.

 

 

 

 

 

10.16

*

Form of First Amendment to Amended and Restated Change in Control/Severance Agreement with each executive officer.

 

Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2009.

 

 

 

 

 

10.17

*

Form of Indemnification Agreement between the Company and each trustee and executive officer.

 

Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2003.

 

 

 

 

 

10.18

*

Form of Executive Retirement Benefits Agreement.

 

Included as Exhibit 10.24 to Equity Residential's Form 10-K for the year ended December 31, 2006.

 

 

 

 

 

10.19

*

Retirement Benefits Agreement between Samuel Zell and the Company dated October 18, 2001.

 

Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2001.

 

 

 

 

 

10.20

*

Age 62 Retirement Agreement, dated September 4, 2018, by and between Equity Residential and David J. Neithercut.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2018.

 

 

 

 

 

10.21

*

Age 62 Retirement Agreement, dated February 27, 2020, by and between Equity Residential and Alan W. George.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2020.

 

 

 

 

 

10.22

*

The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective April 1, 2017.

 

Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2017.

 

 

 

 

 

10.23

 *

Amendment to the Equity Residential Supplemental Executive Retirement Plan, effective as of June 1, 2020.

 

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2020.

 

 

 

 

 

10.24

*

Amendment to the Equity Residential Supplemental Executive Retirement Plan, effective as of October 1, 2022.

 

Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2022.

 

 

 

 

 

10.25

*

The Equity Residential Grandfathered Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2005.

 

Included as Exhibit 10.2 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2008.

 

 

 

 

 

10.26

 

Distribution Agreement, dated May 18, 2022.

 

Included as Exhibit 1.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on May 18, 2022.

 

 

 

 

 

10.27

 

Form of Master Forward Sale Confirmation.

 

Included as Exhibit 1.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on May 18, 2022.

 

 

 

 

 

10.28

 

Archstone Residual JV, LLC Limited Liability Company Agreement.

 

Included as Exhibit 10.3 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.

 

 

 

 

 

10.29

 

Archstone Parallel Residual JV, LLC Limited Liability Company Agreement.

 

Included as Exhibit 10.4 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.

 

 

 

 

 

10.30

 

Archstone Parallel Residual JV 2, LLC Limited Liability Company Agreement.

 

Included as Exhibit 10.5 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.

 

 

 

 

 

10.31

 

Legacy Holdings JV, LLC Limited Liability Company Agreement.

 

Included as Exhibit 10.6 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.

 

 

 

 

 

21

 

List of Subsidiaries of Equity Residential and ERP Operating Limited Partnership.

 

Attached herein.

 

 

 

 

 

23.1

 

Consent of Ernst & Young LLP - Equity Residential.

 

Attached herein.

 

 

 

 

 

23.2

 

Consent of Ernst & Young LLP - ERP Operating Limited Partnership.

 

Attached herein.

 

 

 

 

 

24

 

Power of Attorney.

 

See the signature page to this report.

 

 

 

 

 

31.1

 

Equity Residential - Certification of Mark J. Parrell, Chief Executive Officer.

 

Attached herein.

 

 

 

 

 

31.2

 

Equity Residential - Certification of Robert A. Garechana, Chief Financial Officer.

 

Attached herein.

 

 

 

 

 

47


Table of Contents

 

31.3

 

ERP Operating Limited Partnership - Certification of Mark J. Parrell, Chief Executive Officer of Registrant's General Partner.

 

Attached herein.

 

 

 

 

 

31.4

 

ERP Operating Limited Partnership - Certification of Robert A. Garechana, Chief Financial Officer of Registrant's General Partner.

 

Attached herein.

 

 

 

 

 

32.1

 

Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of the Company.

 

Attached herein.

 

 

 

 

 

32.2

 

Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of the Company.

 

Attached herein.

 

 

 

 

 

32.3

 

ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of Registrant's General Partner.

 

Attached herein.

 

 

 

 

 

32.4

 

ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of Registrant's General Partner.

 

Attached herein.

 

 

 

 

 

101.INS

 

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

 

 

 

 

 

 

 

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.

 

 

 

 

 

 

 

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

 

 

 

 

 

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

 

 

 

 

 

 

 

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document.

 

 

 

 

 

 

 

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

 

 

 

 

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.

**Filed on paper – hyperlink is not required pursuant to Rule 105 of Regulation S-T.

 

48


Table of Contents

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

EQUITY RESIDENTIAL

 

 

 

 

 

 

 

By:

 

/s/ Mark J. Parrell

 

 

 

 

Mark J. Parrell

President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

 

 

 

Date:

 

February 16, 2023

 

 

 

 

 

 

 

ERP OPERATING LIMITED PARTNERSHIP

BY: EQUITY RESIDENTIAL

ITS GENERAL PARTNER

 

 

 

 

 

 

 

By:

 

/s/ Mark J. Parrell

 

 

 

 

Mark J. Parrell

President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

 

 

 

Date:

 

February 16, 2023

 

 


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

POWER OF ATTORNEY

KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints Mark J. Parrell, Robert A. Garechana and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 2022, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each registrant and in the capacities set forth below and on the dates indicated:

 

Name

 

Title

 

Date

 

 

 

 

 

/s/ Mark J. Parrell

 

President, Chief Executive Officer and Trustee

 

February 16, 2023

Mark J. Parrell

 

(Principal Executive Officer)

 

 

 

 

 

 

 

/s/ Robert A. Garechana

 

Executive Vice President and Chief Financial Officer

 

February 16, 2023

Robert A. Garechana

 

(Principal Financial Officer)

 

 

 

 

 

 

 

/s/ Ian S. Kaufman

 

Senior Vice President and Chief Accounting Officer

 

February 16, 2023

Ian S. Kaufman

 

(Principal Accounting Officer)

 

 

 

 

 

 

 

/s/ Angela M. Aman

 

Trustee

 

February 16, 2023

Angela M. Aman

 

 

 

 

 

 

 

 

 

/s/ Linda Walker Bynoe

 

Trustee

 

February 16, 2023

Linda Walker Bynoe

 

 

 

 

 

 

 

 

 

/s/ Mary Kay Haben

 

Trustee

 

February 16, 2023

Mary Kay Haben

 

 

 

 

 

 

 

 

 

/s/ T. Zia Huque

 

Trustee

 

February 16, 2023

T. Zia Huque

 

 

 

 

 

 

 

 

 

/s/ John E. Neal

 

Trustee

 

February 16, 2023

John E. Neal

 

 

 

 

 

 

 

 

 

/s/ David J. Neithercut

 

Trustee

 

February 16, 2023

David J. Neithercut

 

 

 

 

 

 

 

 

 

/s/ Mark S. Shapiro

 

Trustee

 

February 16, 2023

Mark S. Shapiro

 

 

 

 

 

 

 

 

 

/s/ Stephen E. Sterrett

 

Trustee

 

February 16, 2023

Stephen E. Sterrett

 

 

 

 

 

 

 

 

 

/s/ Samuel Zell

 

Chairman of the Board of Trustees

 

February 16, 2023

Samuel Zell

 

 

 

 

 

 

 

 

 

 

 


Table of Contents

 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

 

 

 

PAGE

 

 

 

FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

 

 

 

 

 

Report of Independent Registered Public Accounting Firm on the Financial Statements (Equity Residential)

 

F-2 to F-3

 

 

 

Report of Independent Registered Public Accounting Firm on the Financial Statements (ERP Operating Limited Partnership)

 

F-4 to F-5

 

 

 

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (Equity Residential)

 

F-6

 

 

 

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (ERP Operating Limited Partnership)

 

F-7

 

 

 

Financial Statements of Equity Residential:

 

 

 

 

 

Consolidated Balance Sheets as of December 31, 2022 and 2021

 

F-8

 

 

 

Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

 

F-9 to F-10

 

 

 

Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020

 

F-11 to F-13

 

 

 

Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020

 

F-14 to F-15

 

 

 

Financial Statements of ERP Operating Limited Partnership:

 

 

 

 

 

Consolidated Balance Sheets as of December 31, 2022 and 2021

 

F-16

 

 

 

Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

 

F-17 to F-18

 

 

 

Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020

 

F-19 to F-21

 

 

 

Consolidated Statements of Changes in Capital for the years ended December 31, 2022, 2021 and 2020

 

F-22 to F-23

 

 

 

Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited Partnership

 

F-24 to F-56

 

 

 

SCHEDULE FILED AS PART OF THIS REPORT

 

 

 

 

 

Schedule III – Real Estate and Accumulated Depreciation of Equity Residential and ERP Operating Limited Partnership

 

S-1 to S-12

 

All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the consolidated financial statements or notes thereto.

 

 

 


Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Shareholders and the Board of Trustees of Equity Residential

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Equity Residential (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 

 

Impairment of Long-Lived Assets

 

Description of

the Matter

At December 31, 2022, the Company’s net investment in real estate was approximately $19.1 billion. As more fully described in Note 2 to the consolidated financial statements, the Company periodically evaluates its long-lived assets, including its investment in real estate, for impairment. The judgments and assumptions regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal and environmental concerns, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties. If the expected future undiscounted cash flows are less than the carrying amount of the long-lived asset, an impairment loss is recognized for the difference between the estimated fair value and the carrying amount.

Auditing the Company's process to evaluate indicators of impairment was complex due to a high degree of subjectivity in the identification of events or changes in circumstances that may indicate impairment was present. Changes in these judgments could have a material impact on the Company’s analysis.

F-2


Table of Contents

 

 

 

How We

Addressed the

Matter in

Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s long-lived asset impairment evaluation, including controls over management’s determination and review of the significant assumptions used in the analyses described above.

We performed audit procedures that included, among others, evaluating the judgments used by management to identify whether indicators of impairment were present and testing the significant assumptions and completeness and accuracy of market and operating data used by the Company in its analyses. We reviewed costs incurred on development properties. We compared the significant assumptions used by management to current market data and performed sensitivity analyses of certain significant assumptions, such as market capitalization rates. We also held discussions with management and read the minutes of meetings of the Board of Trustees and related committees to understand whether there were any changes in management’s operating and development plans that would result in the disposal of a property significantly before the end of its useful life.

 

 

 

 

/s/ ERNST & YOUNG LLP

 

 

ERNST & YOUNG LLP

 

We have served as the Company’s auditor since 1996.

 

 

 

Chicago, Illinois

 

 

February 16, 2023

 

 

 

 

F-3


Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Partners of ERP Operating Limited Partnership

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of ERP Operating Limited Partnership (the Operating Partnership) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

 

Basis for Opinion

 

These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 

 

Impairment of Long-Lived Assets

 

Description of

the Matter

At December 31, 2022, the Operating Partnership’s net investment in real estate was approximately $19.1 billion. As more fully described in Note 2 to the consolidated financial statements, the Operating Partnership periodically evaluates its long-lived assets, including its investment in real estate, for impairment. The judgments and assumptions regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal and environmental concerns, the Operating Partnership’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties. If the expected future undiscounted cash flows are less than the carrying amount of the long-lived asset, an impairment loss is recognized for the difference between the estimated fair value and the carrying amount.

Auditing the Operating Partnership's process to evaluate indicators of impairment was complex due to a high degree of subjectivity in the identification of events or changes in circumstances that may indicate impairment was present. Changes in these judgments could have a material impact on the Operating Partnership’s analysis.

F-4


Table of Contents

 

 

 

How We

Addressed the

Matter in

Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Operating Partnership’s long-lived asset impairment evaluation, including controls over management’s determination and review of the significant assumptions used in the analyses described above.

We performed audit procedures that included, among others, evaluating the judgments used by management to identify whether indicators of impairment were present and testing the significant assumptions and completeness and accuracy of market and operating data used by the Operating Partnership in its analyses. We reviewed costs incurred on development properties. We compared the significant assumptions used by management to current market data and performed sensitivity analyses of certain significant assumptions, such as market capitalization rates. We also held discussions with management and read the minutes of meetings of the Board of Trustees and related committees to understand whether there were any changes in management’s operating and development plans that would result in the disposal of a property significantly before the end of its useful life.

 

 

 

 

 

/s/ ERNST & YOUNG LLP

 

 

ERNST & YOUNG LLP

 

We have served as the Operating Partnership’s auditor since 1996.

 

 

 

Chicago, Illinois

 

 

February 16, 2023

 

 

 

 

F-5


Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Shareholders and the Board of Trustees of Equity Residential

 

Opinion on Internal Control Over Financial Reporting

 

We have audited Equity Residential’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Equity Residential (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

 

Basis for Opinion

 

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

 

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

 

Definition and Limitations of Internal Control Over Financial Reporting

 

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

 

 

 

/s/ ERNST & YOUNG LLP

 

 

ERNST & YOUNG LLP

 

 

 

Chicago, Illinois

 

 

February 16, 2023

 

 

 

 

F-6


Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Partners of ERP Operating Limited Partnership

 

Opinion on Internal Control Over Financial Reporting

 

We have audited ERP Operating Limited Partnership’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ERP Operating Limited Partnership (the Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Operating Partnership as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

 

Basis for Opinion

 

The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

 

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

 

Definition and Limitations of Internal Control Over Financial Reporting

 

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

 

 

 

/s/ ERNST & YOUNG LLP

 

 

ERNST & YOUNG LLP

 

 

 

Chicago, Illinois

 

 

February 16, 2023

 

 

 

F-7


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share amounts)

 

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Land

 

$

5,580,878

 

 

$

5,814,790

 

Depreciable property

 

 

22,334,369

 

 

 

22,370,811

 

Projects under development

 

 

112,940

 

 

 

24,307

 

Land held for development

 

 

60,567

 

 

 

62,998

 

Investment in real estate

 

 

28,088,754

 

 

 

28,272,906

 

Accumulated depreciation

 

 

(9,027,850

)

 

 

(8,354,282

)

Investment in real estate, net

 

 

19,060,904

 

 

 

19,918,624

 

Investments in unconsolidated entities

 

 

279,024

 

 

 

127,448

 

Cash and cash equivalents

 

 

53,869

 

 

 

123,832

 

Restricted deposits

 

 

83,303

 

 

 

236,404

 

Right-of-use assets

 

 

462,956

 

 

 

474,713

 

Other assets

 

 

278,206

 

 

 

288,220

 

Total assets

 

$

20,218,262

 

 

$

21,169,241

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgage notes payable, net

 

$

1,953,438

 

 

$

2,191,201

 

Notes, net

 

 

5,342,329

 

 

 

5,835,222

 

Line of credit and commercial paper

 

 

129,955

 

 

 

315,030

 

Accounts payable and accrued expenses

 

 

96,028

 

 

 

107,013

 

Accrued interest payable

 

 

66,310

 

 

 

69,510

 

Lease liabilities

 

 

308,748

 

 

 

312,335

 

Other liabilities

 

 

306,941

 

 

 

353,102

 

Security deposits

 

 

68,940

 

 

 

66,141

 

Distributions payable

 

 

244,621

 

 

 

233,502

 

Total liabilities

 

 

8,517,310

 

 

 

9,483,056

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

318,273

 

 

 

498,977

 

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, 2022 and December 31, 2021

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;
   
1,000,000,000 shares authorized; 378,429,708 shares issued
   and outstanding as of December 31, 2022 and
375,527,195
   shares issued and outstanding as of December 31, 2021

 

 

3,784

 

 

 

3,755

 

Paid in capital

 

 

9,476,085

 

 

 

9,121,122

 

Retained earnings

 

 

1,658,837

 

 

 

1,827,063

 

Accumulated other comprehensive income (loss)

 

 

(2,547

)

 

 

(34,272

)

Total shareholders’ equity

 

 

11,173,439

 

 

 

10,954,948

 

Noncontrolling Interests:

 

 

 

 

 

 

Operating Partnership

 

 

209,961

 

 

 

214,094

 

Partially Owned Properties

 

 

(721

)

 

 

18,166

 

Total Noncontrolling Interests

 

 

209,240

 

 

 

232,260

 

Total equity

 

 

11,382,679

 

 

 

11,187,208

 

Total liabilities and equity

 

$

20,218,262

 

 

$

21,169,241

 

 

See accompanying notes

F-8


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per share data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

REVENUES

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,735,180

 

 

$

2,463,997

 

 

$

2,571,705

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

483,865

 

 

 

453,532

 

 

 

440,998

 

Real estate taxes and insurance

 

 

388,412

 

 

 

397,105

 

 

 

381,562

 

Property management

 

 

110,304

 

 

 

98,155

 

 

 

93,825

 

General and administrative

 

 

58,710

 

 

 

56,506

 

 

 

48,305

 

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

820,832

 

Total expenses

 

 

1,923,459

 

 

 

1,843,570

 

 

 

1,785,522

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

304,325

 

 

 

1,072,183

 

 

 

531,807

 

Impairment

 

 

 

 

 

(16,769

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,116,046

 

 

 

1,675,841

 

 

 

1,317,990

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

2,193

 

 

 

25,666

 

 

 

5,935

 

Other expenses

 

 

(13,664

)

 

 

(19,275

)

 

 

(17,510

)

Interest:

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(282,920

)

 

 

(272,473

)

 

 

(365,073

)

Amortization of deferred financing costs

 

 

(8,729

)

 

 

(8,737

)

 

 

(8,939

)

Income before income and other taxes, income (loss) from
   investments in unconsolidated entities and net gain (loss)
   on sales of land parcels

 

 

812,926

 

 

 

1,401,022

 

 

 

932,403

 

Income and other tax (expense) benefit

 

 

(900

)

 

 

(915

)

 

 

(852

)

Income (loss) from investments in unconsolidated entities

 

 

(5,031

)

 

 

(3,398

)

 

 

(3,284

)

Net gain (loss) on sales of land parcels

 

 

 

 

 

5

 

 

 

34,234

 

Net income

 

 

806,995

 

 

 

1,396,714

 

 

 

962,501

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(26,310

)

 

 

(45,900

)

 

 

(34,010

)

Partially Owned Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Net income attributable to controlling interests

 

 

776,911

 

 

 

1,332,850

 

 

 

913,636

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Net income available to Common Shares

 

$

773,821

 

 

$

1,329,760

 

 

$

910,546

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

2.06

 

 

$

3.56

 

 

$

2.45

 

Weighted average Common Shares outstanding

 

 

376,209

 

 

 

373,833

 

 

 

371,791

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

2.05

 

 

$

3.54

 

 

$

2.45

 

Weighted average Common Shares outstanding

 

 

389,450

 

 

 

388,089

 

 

 

385,874

 

 

See accompanying notes

F-9


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per share data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss) – derivative instruments:

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) arising during the year

 

 

20,654

 

 

 

 

 

 

(1,190

)

Losses reclassified into earnings from other comprehensive
   income

 

 

11,071

 

 

 

9,394

 

 

 

35,087

 

Other comprehensive income (loss)

 

 

31,725

 

 

 

9,394

 

 

 

33,897

 

Comprehensive income

 

 

838,720

 

 

 

1,406,108

 

 

 

996,398

 

Comprehensive (income) attributable to Noncontrolling Interests

 

 

(31,132

)

 

 

(64,183

)

 

 

(50,084

)

Comprehensive income attributable to controlling interests

 

$

807,588

 

 

$

1,341,925

 

 

$

946,314

 

 

See accompanying notes

F-10


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

820,832

 

Amortization of deferred financing costs

 

 

8,729

 

 

 

8,737

 

 

 

8,939

 

Amortization of above/below market lease intangibles

 

 

 

 

 

(154

)

 

 

(71

)

Amortization of discounts and premiums on debt

 

 

5,004

 

 

 

5,302

 

 

 

5,231

 

Amortization of deferred settlements on derivative instruments

 

 

11,059

 

 

 

9,382

 

 

 

35,075

 

Amortization of right-of-use assets

 

 

12,157

 

 

 

13,266

 

 

 

11,682

 

Impairment

 

 

 

 

 

16,769

 

 

 

 

Write-off of pursuit costs

 

 

4,780

 

 

 

6,526

 

 

 

6,869

 

(Income) loss from investments in unconsolidated entities

 

 

5,031

 

 

 

3,398

 

 

 

3,284

 

Distributions from unconsolidated entities – return on capital

 

 

398

 

 

 

56

 

 

 

100

 

Net (gain) loss on sales of real estate properties

 

 

(304,325

)

 

 

(1,072,183

)

 

 

(531,807

)

Net (gain) loss on sales of land parcels

 

 

 

 

 

(5

)

 

 

(34,234

)

Net (gain) loss on debt extinguishment

 

 

 

 

 

 

 

 

26,150

 

Realized/unrealized (gain) loss on derivative instruments

 

 

 

 

 

 

 

 

50

 

Realized (gain) loss on sale of investment securities

 

 

(2,061

)

 

 

(23,432

)

 

 

 

Compensation paid with Company Common Shares

 

 

29,513

 

 

 

27,810

 

 

 

23,174

 

Other operating activities, net

 

 

 

 

 

 

 

 

1,805

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

(Increase) decrease in other assets

 

 

10,893

 

 

 

5,906

 

 

 

(53,021

)

Increase (decrease) in accounts payable and accrued expenses

 

 

(266

)

 

 

15,381

 

 

 

470

 

Increase (decrease) in accrued interest payable

 

 

(3,200

)

 

 

3,614

 

 

 

(956

)

Increase (decrease) in lease liabilities

 

 

(1,524

)

 

 

(5,122

)

 

 

(2,204

)

Increase (decrease) in other liabilities

 

 

(13,394

)

 

 

4,286

 

 

 

(8,751

)

Increase (decrease) in security deposits

 

 

2,799

 

 

 

5,661

 

 

 

(9,582

)

Net cash provided by operating activities

 

 

1,454,756

 

 

 

1,260,184

 

 

 

1,265,536

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Investment in real estate – acquisitions

 

 

(113,046

)

 

 

(1,712,131

)

 

 

(48,898

)

Investment in real estate – development/other

 

 

(109,345

)

 

 

(206,421

)

 

 

(230,332

)

Capital expenditures to real estate

 

 

(221,086

)

 

 

(151,019

)

 

 

(135,979

)

Non-real estate capital additions

 

 

(4,050

)

 

 

(1,696

)

 

 

(20,100

)

Interest capitalized for real estate and unconsolidated entities under development

 

 

(7,105

)

 

 

(15,932

)

 

 

(10,165

)

Proceeds from disposition of real estate, net

 

 

720,302

 

 

 

1,707,747

 

 

 

1,113,972

 

Investments in unconsolidated entities – acquisitions

 

 

(49,855

)

 

 

(48,534

)

 

 

 

Investments in unconsolidated entities – development/other

 

 

(109,846

)

 

 

(31,257

)

 

 

(5,775

)

Distributions from unconsolidated entities – return of capital

 

 

300

 

 

 

1,516

 

 

 

1,636

 

Purchase of investment securities and other investments

 

 

(2,061

)

 

 

(168,291

)

 

 

(773

)

Proceeds from sale of investment securities

 

 

3,584

 

 

 

191,398

 

 

 

 

Net cash provided by (used for) investing activities

 

 

107,792

 

 

 

(434,620

)

 

 

663,586

 

 

See accompanying notes

F-11


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Debt financing costs

 

$

(9,894

)

 

$

(6,446

)

 

$

(2,923

)

Mortgage notes payable, net:

 

 

 

 

 

 

 

 

 

Proceeds

 

 

48,054

 

 

 

58,428

 

 

 

519,204

 

Lump sum payoffs

 

 

(286,461

)

 

 

(156,815

)

 

 

(160,522

)

Scheduled principal repayments

 

 

(3,392

)

 

 

(7,465

)

 

 

(7,759

)

Net gain (loss) on debt extinguishment

 

 

 

 

 

 

 

 

(327

)

Notes, net:

 

 

 

 

 

 

 

 

 

Proceeds

 

 

 

 

 

497,470

 

 

 

 

Lump sum payoffs

 

 

(500,000

)

 

 

 

 

 

(750,000

)

Net gain (loss) on debt extinguishment

 

 

 

 

 

 

 

 

(25,823

)

Line of credit and commercial paper:

 

 

 

 

 

 

 

 

 

Line of credit proceeds

 

 

 

 

 

10,000

 

 

 

1,870,000

 

Line of credit repayments

 

 

 

 

 

(10,000

)

 

 

(1,890,000

)

Commercial paper proceeds

 

 

6,036,083

 

 

 

7,590,200

 

 

 

7,450,997

 

Commercial paper repayments

 

 

(6,221,158

)

 

 

(7,690,000

)

 

 

(8,034,000

)

Proceeds from (payments on) settlement of derivative instruments

 

 

 

 

 

 

 

 

(1,240

)

Finance ground lease principal payments

 

 

(2,463

)

 

 

(365

)

 

 

 

Proceeds from sale of Common Shares

 

 

139,623

 

 

 

 

 

 

 

Proceeds from Employee Share Purchase Plan (ESPP)

 

 

4,178

 

 

 

4,265

 

 

 

4,508

 

Proceeds from exercise of options

 

 

25,069

 

 

 

85,445

 

 

 

12,275

 

Payment of offering costs

 

 

(783

)

 

 

(428

)

 

 

 

Other financing activities, net

 

 

(63

)

 

 

(63

)

 

 

(63

)

Acquisition of Noncontrolling Interests – Partially Owned Properties

 

 

(32,178

)

 

 

 

 

 

 

Contributions – Noncontrolling Interests – Partially Owned Properties

 

 

603

 

 

 

1,394

 

 

 

417

 

Contributions – Noncontrolling Interests – Operating Partnership

 

 

1

 

 

 

 

 

 

13

 

Distributions:

 

 

 

 

 

 

 

 

 

Common Shares

 

 

(931,783

)

 

 

(900,468

)

 

 

(883,938

)

Preferred Shares

 

 

(2,318

)

 

 

(3,090

)

 

 

(3,090

)

Noncontrolling Interests – Operating Partnership

 

 

(30,324

)

 

 

(31,316

)

 

 

(32,403

)

Noncontrolling Interests – Partially Owned Properties

 

 

(18,406

)

 

 

(5,802

)

 

 

(11,719

)

Net cash provided by (used for) financing activities

 

 

(1,785,612

)

 

 

(565,056

)

 

 

(1,946,393

)

Net increase (decrease) in cash and cash equivalents and restricted deposits

 

 

(223,064

)

 

 

260,508

 

 

 

(17,271

)

Cash and cash equivalents and restricted deposits, beginning of year

 

 

360,236

 

 

 

99,728

 

 

 

116,999

 

Cash and cash equivalents and restricted deposits, end of year

 

$

137,172

 

 

$

360,236

 

 

$

99,728

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents and restricted deposits, end of year

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,869

 

 

$

123,832

 

 

$

42,591

 

Restricted deposits

 

 

83,303

 

 

 

236,404

 

 

 

57,137

 

Total cash and cash equivalents and restricted deposits, end of year

 

$

137,172

 

 

$

360,236

 

 

$

99,728

 

 

See accompanying notes

F-12


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of amounts capitalized

 

$

267,612

 

 

$

252,838

 

 

$

320,854

 

Net cash paid (received) for income and other taxes

 

$

748

 

 

$

1,179

 

 

$

(1,038

)

Amortization of deferred financing costs:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

(506

)

 

$

(353

)

 

$

(240

)

Other assets

 

$

2,768

 

 

$

2,338

 

 

$

2,338

 

Mortgage notes payable, net

 

$

2,080

 

 

$

2,743

 

 

$

1,815

 

Notes, net

 

$

4,387

 

 

$

4,009

 

 

$

5,026

 

Amortization of discounts and premiums on debt:

 

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

2,184

 

 

$

2,764

 

 

$

2,234

 

Notes, net

 

$

2,820

 

 

$

2,538

 

 

$

2,997

 

Amortization of deferred settlements on derivative instruments:

 

 

 

 

 

 

 

 

 

Other liabilities

 

$

(12

)

 

$

(12

)

 

$

(12

)

Accumulated other comprehensive income

 

$

11,071

 

 

$

9,394

 

 

$

35,087

 

Write-off of pursuit costs:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

1,150

 

 

$

5,918

 

 

$

6,566

 

Investments in unconsolidated entities

 

$

2,898

 

 

$

 

 

$

 

Other assets

 

$

732

 

 

$

582

 

 

$

271

 

Accounts payable and accrued expenses

 

$

 

 

$

26

 

 

$

32

 

(Income) loss from investments in unconsolidated entities:

 

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

$

3,778

 

 

$

2,122

 

 

$

1,995

 

Other liabilities

 

$

1,253

 

 

$

1,276

 

 

$

1,289

 

Realized/unrealized (gain) loss on derivative instruments:

 

 

 

 

 

 

 

 

 

Other assets

 

$

(21,865

)

 

$

 

 

$

 

Other liabilities

 

$

1,211

 

 

$

 

 

$

1,240

 

Accumulated other comprehensive income

 

$

20,654

 

 

$

 

 

$

(1,190

)

Interest capitalized for real estate and unconsolidated entities under development:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

(2,365

)

 

$

(15,318

)

 

$

(10,165

)

Investments in unconsolidated entities

 

$

(4,740

)

 

$

(614

)

 

$

 

Investments in unconsolidated entities – development/other:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

 

 

$

1,395

 

 

$

 

Investments in unconsolidated entities

 

$

(108,556

)

 

$

(30,642

)

 

$

(4,275

)

Other liabilities

 

$

(1,290

)

 

$

(2,010

)

 

$

(1,500

)

Debt financing costs:

 

 

 

 

 

 

 

 

 

Other assets

 

$

(9,566

)

 

$

229

 

 

$

(231

)

Mortgage notes payable, net

 

$

(228

)

 

$

(2,344

)

 

$

(2,692

)

Notes, net

 

$

(100

)

 

$

(4,331

)

 

$

 

Right-of-use assets and lease liabilities initial measurement and reclassifications:

 

 

 

 

 

 

 

 

 

Right-of-use assets

 

$

(400

)

 

$

11,308

 

 

$

 

Lease liabilities

 

$

400

 

 

$

(11,308

)

 

$

 

Non-cash share distribution and other transfers from unconsolidated entities:

 

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

$

4,201

 

 

$

1,430

 

 

$

 

Other assets

 

$

(4,201

)

 

$

(1,430

)

 

$

 

 

 

See accompanying notes

F-13


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands except per share data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

PREFERRED SHARES

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

37,280

 

 

$

37,280

 

 

$

37,280

 

Balance, end of year

 

$

37,280

 

 

$

37,280

 

 

$

37,280

 

COMMON SHARES, $0.01 PAR VALUE

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

3,755

 

 

$

3,723

 

 

$

3,717

 

Conversion of OP Units into Common Shares

 

 

4

 

 

 

13

 

 

 

1

 

Issuance of Common Shares

 

 

17

 

 

 

 

 

 

 

Exercise of share options

 

 

5

 

 

 

17

 

 

 

2

 

Employee Share Purchase Plan (ESPP)

 

 

1

 

 

 

1

 

 

 

1

 

Share-based employee compensation expense:

 

 

 

 

 

 

 

 

 

Restricted shares

 

 

2

 

 

 

1

 

 

 

2

 

Balance, end of year

 

$

3,784

 

 

$

3,755

 

 

$

3,723

 

PAID IN CAPITAL

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

9,121,122

 

 

$

9,128,599

 

 

$

8,965,577

 

Common Share Issuance:

 

 

 

 

 

 

 

 

 

Conversion of OP Units into Common Shares

 

 

11,919

 

 

 

74,050

 

 

 

4,695

 

Issuance of Common Shares

 

 

139,606

 

 

 

 

 

 

 

Exercise of share options

 

 

25,064

 

 

 

85,428

 

 

 

12,273

 

Employee Share Purchase Plan (ESPP)

 

 

4,177

 

 

 

4,264

 

 

 

4,507

 

Share-based employee compensation expense:

 

 

 

 

 

 

 

 

 

Restricted shares

 

 

11,593

 

 

 

8,388

 

 

 

11,223

 

Share options

 

 

2,321

 

 

 

3,101

 

 

 

2,349

 

ESPP discount

 

 

796

 

 

 

991

 

 

 

944

 

Offering costs

 

 

(783

)

 

 

(428

)

 

 

 

Supplemental Executive Retirement Plan (SERP)

 

 

(269

)

 

 

(1,335

)

 

 

(395

)

Acquisition of Noncontrolling Interests – Partially Owned Properties

 

 

(27,383

)

 

 

 

 

 

 

Change in market value of Redeemable Noncontrolling Interests –
   Operating Partnership

 

 

176,490

 

 

 

(158,598

)

 

 

125,224

 

Adjustment for Noncontrolling Interests ownership in Operating Partnership

 

 

11,432

 

 

 

(23,338

)

 

 

2,202

 

Balance, end of year

 

$

9,476,085

 

 

$

9,121,122

 

 

$

9,128,599

 

RETAINED EARNINGS

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

1,827,063

 

 

$

1,399,715

 

 

$

1,386,495

 

Net income attributable to controlling interests

 

 

776,911

 

 

 

1,332,850

 

 

 

913,636

 

Common Share distributions

 

 

(942,047

)

 

 

(902,412

)

 

 

(897,326

)

Preferred Share distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Balance, end of year

 

$

1,658,837

 

 

$

1,827,063

 

 

$

1,399,715

 

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

(34,272

)

 

$

(43,666

)

 

$

(77,563

)

Accumulated other comprehensive income (loss) – derivative instruments:

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) arising during the year

 

 

20,654

 

 

 

 

 

 

(1,190

)

Losses reclassified into earnings from other comprehensive income

 

 

11,071

 

 

 

9,394

 

 

 

35,087

 

Balance, end of year

 

$

(2,547

)

 

$

(34,272

)

 

$

(43,666

)

 

 

 

 

 

 

 

 

 

 

DISTRIBUTIONS

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

2.50

 

 

$

2.41

 

 

$

2.41

 

 

See accompanying notes

F-14


Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(Amounts in thousands except per share data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

OPERATING PARTNERSHIP

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

214,094

 

 

$

233,162

 

 

$

227,837

 

Issuance of restricted units to Noncontrolling Interests

 

 

1

 

 

 

 

 

 

13

 

Conversion of OP Units held by Noncontrolling Interests into OP Units
   held by General Partner

 

 

(11,923

)

 

 

(74,063

)

 

 

(4,696

)

Equity compensation associated with Noncontrolling Interests

 

 

19,104

 

 

 

17,797

 

 

 

11,926

 

Net income attributable to Noncontrolling Interests

 

 

26,310

 

 

 

45,900

 

 

 

34,010

 

Distributions to Noncontrolling Interests

 

 

(30,407

)

 

 

(30,612

)

 

 

(32,951

)

Change in carrying value of Redeemable Noncontrolling Interests –
   Operating Partnership

 

 

4,214

 

 

 

(1,428

)

 

 

(775

)

Adjustment for Noncontrolling Interests ownership in Operating Partnership

 

 

(11,432

)

 

 

23,338

 

 

 

(2,202

)

Balance, end of year

 

$

209,961

 

 

$

214,094

 

 

$

233,162

 

PARTIALLY OWNED PROPERTIES

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

18,166

 

 

$

4,673

 

 

$

1,183

 

Net income attributable to Noncontrolling Interests

 

 

3,774

 

 

 

17,964

 

 

 

14,855

 

Contributions by Noncontrolling Interests

 

 

603

 

 

 

1,394

 

 

 

417

 

Distributions to Noncontrolling Interests

 

 

(18,469

)

 

 

(5,865

)

 

 

(11,782

)

Acquisition of Noncontrolling Interests – Partially Owned Properties

 

 

(4,795

)

 

 

 

 

 

 

Balance, end of year

 

$

(721

)

 

$

18,166

 

 

$

4,673

 

 

See accompanying notes

F-15


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Land

 

$

5,580,878

 

 

$

5,814,790

 

Depreciable property

 

 

22,334,369

 

 

 

22,370,811

 

Projects under development

 

 

112,940

 

 

 

24,307

 

Land held for development

 

 

60,567

 

 

 

62,998

 

Investment in real estate

 

 

28,088,754

 

 

 

28,272,906

 

Accumulated depreciation

 

 

(9,027,850

)

 

 

(8,354,282

)

Investment in real estate, net

 

 

19,060,904

 

 

 

19,918,624

 

Investments in unconsolidated entities

 

 

279,024

 

 

 

127,448

 

Cash and cash equivalents

 

 

53,869

 

 

 

123,832

 

Restricted deposits

 

 

83,303

 

 

 

236,404

 

Right-of-use assets

 

 

462,956

 

 

 

474,713

 

Other assets

 

 

278,206

 

 

 

288,220

 

Total assets

 

$

20,218,262

 

 

$

21,169,241

 

 

 

 

 

 

 

 

LIABILITIES AND CAPITAL

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgage notes payable, net

 

$

1,953,438

 

 

$

2,191,201

 

Notes, net

 

 

5,342,329

 

 

 

5,835,222

 

Line of credit and commercial paper

 

 

129,955

 

 

 

315,030

 

Accounts payable and accrued expenses

 

 

96,028

 

 

 

107,013

 

Accrued interest payable

 

 

66,310

 

 

 

69,510

 

Lease liabilities

 

 

308,748

 

 

 

312,335

 

Other liabilities

 

 

306,941

 

 

 

353,102

 

Security deposits

 

 

68,940

 

 

 

66,141

 

Distributions payable

 

 

244,621

 

 

 

233,502

 

Total liabilities

 

 

8,517,310

 

 

 

9,483,056

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Limited Partners

 

 

318,273

 

 

 

498,977

 

Capital:

 

 

 

 

 

 

Partners’ Capital:

 

 

 

 

 

 

Preference Units

 

 

37,280

 

 

 

37,280

 

General Partner

 

 

11,138,706

 

 

 

10,951,940

 

Limited Partners

 

 

209,961

 

 

 

214,094

 

Accumulated other comprehensive income (loss)

 

 

(2,547

)

 

 

(34,272

)

Total partners’ capital

 

 

11,383,400

 

 

 

11,169,042

 

Noncontrolling Interests – Partially Owned Properties

 

 

(721

)

 

 

18,166

 

Total capital

 

 

11,382,679

 

 

 

11,187,208

 

Total liabilities and capital

 

$

20,218,262

 

 

$

21,169,241

 

 

See accompanying notes

F-16


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per Unit data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

REVENUES

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,735,180

 

 

$

2,463,997

 

 

$

2,571,705

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

483,865

 

 

 

453,532

 

 

 

440,998

 

Real estate taxes and insurance

 

 

388,412

 

 

 

397,105

 

 

 

381,562

 

Property management

 

 

110,304

 

 

 

98,155

 

 

 

93,825

 

General and administrative

 

 

58,710

 

 

 

56,506

 

 

 

48,305

 

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

820,832

 

Total expenses

 

 

1,923,459

 

 

 

1,843,570

 

 

 

1,785,522

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

304,325

 

 

 

1,072,183

 

 

 

531,807

 

Impairment

 

 

 

 

 

(16,769

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,116,046

 

 

 

1,675,841

 

 

 

1,317,990

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

2,193

 

 

 

25,666

 

 

 

5,935

 

Other expenses

 

 

(13,664

)

 

 

(19,275

)

 

 

(17,510

)

Interest:

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(282,920

)

 

 

(272,473

)

 

 

(365,073

)

Amortization of deferred financing costs

 

 

(8,729

)

 

 

(8,737

)

 

 

(8,939

)

Income before income and other taxes, income (loss) from
   investments in unconsolidated entities and net gain (loss)
   on sales of land parcels

 

 

812,926

 

 

 

1,401,022

 

 

 

932,403

 

Income and other tax (expense) benefit

 

 

(900

)

 

 

(915

)

 

 

(852

)

Income (loss) from investments in unconsolidated entities

 

 

(5,031

)

 

 

(3,398

)

 

 

(3,284

)

Net gain (loss) on sales of land parcels

 

 

 

 

 

5

 

 

 

34,234

 

Net income

 

 

806,995

 

 

 

1,396,714

 

 

 

962,501

 

Net (income) loss attributable to Noncontrolling Interests – Partially Owned
   Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Net income attributable to controlling interests

 

$

803,221

 

 

$

1,378,750

 

 

$

947,646

 

ALLOCATION OF NET INCOME:

 

 

 

 

 

 

 

 

 

Preference Units

 

$

3,090

 

 

$

3,090

 

 

$

3,090

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

$

773,821

 

 

$

1,329,760

 

 

$

910,546

 

Limited Partners

 

 

26,310

 

 

 

45,900

 

 

 

34,010

 

Net income available to Units

 

$

800,131

 

 

$

1,375,660

 

 

$

944,556

 

 

 

 

 

 

 

 

 

 

 

Earnings per Unit – basic:

 

 

 

 

 

 

 

 

 

Net income available to Units

 

$

2.06

 

 

$

3.56

 

 

$

2.45

 

Weighted average Units outstanding

 

 

388,045

 

 

 

386,096

 

 

 

384,794

 

 

 

 

 

 

 

 

 

 

 

Earnings per Unit – diluted:

 

 

 

 

 

 

 

 

 

Net income available to Units

 

$

2.05

 

 

$

3.54

 

 

$

2.45

 

Weighted average Units outstanding

 

 

389,450

 

 

 

388,089

 

 

 

385,874

 

 

See accompanying notes

F-17


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per Unit data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss) – derivative instruments:

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) arising during the year

 

 

20,654

 

 

 

 

 

 

(1,190

)

Losses reclassified into earnings from other comprehensive
   income

 

 

11,071

 

 

 

9,394

 

 

 

35,087

 

Other comprehensive income (loss)

 

 

31,725

 

 

 

9,394

 

 

 

33,897

 

Comprehensive income

 

 

838,720

 

 

 

1,406,108

 

 

 

996,398

 

Comprehensive (income) attributable to Noncontrolling Interests –
   Partially Owned Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Comprehensive income attributable to controlling interests

 

$

834,946

 

 

$

1,388,144

 

 

$

981,543

 

 

See accompanying notes

F-18


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

820,832

 

Amortization of deferred financing costs

 

 

8,729

 

 

 

8,737

 

 

 

8,939

 

Amortization of above/below market lease intangibles

 

 

 

 

 

(154

)

 

 

(71

)

Amortization of discounts and premiums on debt

 

 

5,004

 

 

 

5,302

 

 

 

5,231

 

Amortization of deferred settlements on derivative instruments

 

 

11,059

 

 

 

9,382

 

 

 

35,075

 

Amortization of right-of-use assets

 

 

12,157

 

 

 

13,266

 

 

 

11,682

 

Impairment

 

 

 

 

 

16,769

 

 

 

 

Write-off of pursuit costs

 

 

4,780

 

 

 

6,526

 

 

 

6,869

 

(Income) loss from investments in unconsolidated entities

 

 

5,031

 

 

 

3,398

 

 

 

3,284

 

Distributions from unconsolidated entities – return on capital

 

 

398

 

 

 

56

 

 

 

100

 

Net (gain) loss on sales of real estate properties

 

 

(304,325

)

 

 

(1,072,183

)

 

 

(531,807

)

Net (gain) loss on sales of land parcels

 

 

 

 

 

(5

)

 

 

(34,234

)

Net (gain) loss on debt extinguishment

 

 

 

 

 

 

 

 

26,150

 

Realized/unrealized (gain) loss on derivative instruments

 

 

 

 

 

 

 

 

50

 

Realized (gain) loss on sale of investment securities

 

 

(2,061

)

 

 

(23,432

)

 

 

 

Compensation paid with Company Common Shares

 

 

29,513

 

 

 

27,810

 

 

 

23,174

 

Other operating activities, net

 

 

 

 

 

 

 

 

1,805

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

(Increase) decrease in other assets

 

 

10,893

 

 

 

5,906

 

 

 

(53,021

)

Increase (decrease) in accounts payable and accrued expenses

 

 

(266

)

 

 

15,381

 

 

 

470

 

Increase (decrease) in accrued interest payable

 

 

(3,200

)

 

 

3,614

 

 

 

(956

)

Increase (decrease) in lease liabilities

 

 

(1,524

)

 

 

(5,122

)

 

 

(2,204

)

Increase (decrease) in other liabilities

 

 

(13,394

)

 

 

4,286

 

 

 

(8,751

)

Increase (decrease) in security deposits

 

 

2,799

 

 

 

5,661

 

 

 

(9,582

)

Net cash provided by operating activities

 

 

1,454,756

 

 

 

1,260,184

 

 

 

1,265,536

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Investment in real estate – acquisitions

 

 

(113,046

)

 

 

(1,712,131

)

 

 

(48,898

)

Investment in real estate – development/other

 

 

(109,345

)

 

 

(206,421

)

 

 

(230,332

)

Capital expenditures to real estate

 

 

(221,086

)

 

 

(151,019

)

 

 

(135,979

)

Non-real estate capital additions

 

 

(4,050

)

 

 

(1,696

)

 

 

(20,100

)

Interest capitalized for real estate and unconsolidated entities under development

 

 

(7,105

)

 

 

(15,932

)

 

 

(10,165

)

Proceeds from disposition of real estate, net

 

 

720,302

 

 

 

1,707,747

 

 

 

1,113,972

 

Investments in unconsolidated entities – acquisitions

 

 

(49,855

)

 

 

(48,534

)

 

 

 

Investments in unconsolidated entities – development/other

 

 

(109,846

)

 

 

(31,257

)

 

 

(5,775

)

Distributions from unconsolidated entities – return of capital

 

 

300

 

 

 

1,516

 

 

 

1,636

 

Purchase of investment securities and other investments

 

 

(2,061

)

 

 

(168,291

)

 

 

(773

)

Proceeds from sale of investment securities

 

 

3,584

 

 

 

191,398

 

 

 

 

Net cash provided by (used for) investing activities

 

 

107,792

 

 

 

(434,620

)

 

 

663,586

 

 

See accompanying notes

F-19


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Debt financing costs

 

$

(9,894

)

 

$

(6,446

)

 

$

(2,923

)

Mortgage notes payable, net:

 

 

 

 

 

 

 

 

 

Proceeds

 

 

48,054

 

 

 

58,428

 

 

 

519,204

 

Lump sum payoffs

 

 

(286,461

)

 

 

(156,815

)

 

 

(160,522

)

Scheduled principal repayments

 

 

(3,392

)

 

 

(7,465

)

 

 

(7,759

)

Net gain (loss) on debt extinguishment

 

 

 

 

 

 

 

 

(327

)

Notes, net:

 

 

 

 

 

 

 

 

 

Proceeds

 

 

 

 

 

497,470

 

 

 

 

Lump sum payoffs

 

 

(500,000

)

 

 

 

 

 

(750,000

)

Net gain (loss) on debt extinguishment

 

 

 

 

 

 

 

 

(25,823

)

Line of credit and commercial paper:

 

 

 

 

 

 

 

 

 

Line of credit proceeds

 

 

 

 

 

10,000

 

 

 

1,870,000

 

Line of credit repayments

 

 

 

 

 

(10,000

)

 

 

(1,890,000

)

Commercial paper proceeds

 

 

6,036,083

 

 

 

7,590,200

 

 

 

7,450,997

 

Commercial paper repayments

 

 

(6,221,158

)

 

 

(7,690,000

)

 

 

(8,034,000

)

Proceeds from (payments on) settlement of derivative instruments

 

 

 

 

 

 

 

 

(1,240

)

Finance ground lease principal payments

 

 

(2,463

)

 

 

(365

)

 

 

 

Proceeds from sale of OP Units

 

 

139,623

 

 

 

 

 

 

 

Proceeds from EQR’s Employee Share Purchase Plan (ESPP)

 

 

4,178

 

 

 

4,265

 

 

 

4,508

 

Proceeds from exercise of EQR options

 

 

25,069

 

 

 

85,445

 

 

 

12,275

 

Payment of offering costs

 

 

(783

)

 

 

(428

)

 

 

 

Other financing activities, net

 

 

(63

)

 

 

(63

)

 

 

(63

)

Acquisition of Noncontrolling Interests – Partially Owned Properties

 

 

(32,178

)

 

 

 

 

 

 

Contributions – Noncontrolling Interests – Partially Owned Properties

 

 

603

 

 

 

1,394

 

 

 

417

 

Contributions – Limited Partners

 

 

1

 

 

 

 

 

 

13

 

Distributions:

 

 

 

 

 

 

 

 

 

OP Units – General Partner

 

 

(931,783

)

 

 

(900,468

)

 

 

(883,938

)

Preference Units

 

 

(2,318

)

 

 

(3,090

)

 

 

(3,090

)

OP Units – Limited Partners

 

 

(30,324

)

 

 

(31,316

)

 

 

(32,403

)

Noncontrolling Interests – Partially Owned Properties

 

 

(18,406

)

 

 

(5,802

)

 

 

(11,719

)

Net cash provided by (used for) financing activities

 

 

(1,785,612

)

 

 

(565,056

)

 

 

(1,946,393

)

Net increase (decrease) in cash and cash equivalents and restricted deposits

 

 

(223,064

)

 

 

260,508

 

 

 

(17,271

)

Cash and cash equivalents and restricted deposits, beginning of year

 

 

360,236

 

 

 

99,728

 

 

 

116,999

 

Cash and cash equivalents and restricted deposits, end of year

 

$

137,172

 

 

$

360,236

 

 

$

99,728

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents and restricted deposits, end of year

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,869

 

 

$

123,832

 

 

$

42,591

 

Restricted deposits

 

 

83,303

 

 

 

236,404

 

 

 

57,137

 

Total cash and cash equivalents and restricted deposits, end of year

 

$

137,172

 

 

$

360,236

 

 

$

99,728

 

 

See accompanying notes

F-20


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

 

 

Cash paid for interest, net of amounts capitalized

 

$

267,612

 

 

$

252,838

 

 

$

320,854

 

Net cash paid (received) for income and other taxes

 

$

748

 

 

$

1,179

 

 

$

(1,038

)

Amortization of deferred financing costs:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

(506

)

 

$

(353

)

 

$

(240

)

Other assets

 

$

2,768

 

 

$

2,338

 

 

$

2,338

 

Mortgage notes payable, net

 

$

2,080

 

 

$

2,743

 

 

$

1,815

 

Notes, net

 

$

4,387

 

 

$

4,009

 

 

$

5,026

 

Amortization of discounts and premiums on debt:

 

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

2,184

 

 

$

2,764

 

 

$

2,234

 

Notes, net

 

$

2,820

 

 

$

2,538

 

 

$

2,997

 

Amortization of deferred settlements on derivative instruments:

 

 

 

 

 

 

 

 

 

Other liabilities

 

$

(12

)

 

$

(12

)

 

$

(12

)

Accumulated other comprehensive income

 

$

11,071

 

 

$

9,394

 

 

$

35,087

 

Write-off of pursuit costs:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

1,150

 

 

$

5,918

 

 

$

6,566

 

Investments in unconsolidated entities

 

$

2,898

 

 

$

 

 

$

 

Other assets

 

$

732

 

 

$

582

 

 

$

271

 

Accounts payable and accrued expenses

 

$

 

 

$

26

 

 

$

32

 

(Income) loss from investments in unconsolidated entities:

 

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

$

3,778

 

 

$

2,122

 

 

$

1,995

 

Other liabilities

 

$

1,253

 

 

$

1,276

 

 

$

1,289

 

Realized/unrealized (gain) loss on derivative instruments:

 

 

 

 

 

 

 

 

 

Other assets

 

$

(21,865

)

 

$

 

 

$

 

Other liabilities

 

$

1,211

 

 

$

 

 

$

1,240

 

Accumulated other comprehensive income

 

$

20,654

 

 

$

 

 

$

(1,190

)

Interest capitalized for real estate and unconsolidated entities under development:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

(2,365

)

 

$

(15,318

)

 

$

(10,165

)

Investments in unconsolidated entities

 

$

(4,740

)

 

$

(614

)

 

$

 

Investments in unconsolidated entities – development/other:

 

 

 

 

 

 

 

 

 

Investment in real estate, net

 

$

 

 

$

1,395

 

 

$

 

Investments in unconsolidated entities

 

$

(108,556

)

 

$

(30,642

)

 

$

(4,275

)

Other liabilities

 

$

(1,290

)

 

$

(2,010

)

 

$

(1,500

)

Debt financing costs:

 

 

 

 

 

 

 

 

 

Other assets

 

$

(9,566

)

 

$

229

 

 

$

(231

)

Mortgage notes payable, net

 

$

(228

)

 

$

(2,344

)

 

$

(2,692

)

Notes, net

 

$

(100

)

 

$

(4,331

)

 

$

 

Right-of-use assets and lease liabilities initial measurement and reclassifications:

 

 

 

 

 

 

 

 

 

Right-of-use assets

 

$

(400

)

 

$

11,308

 

 

$

 

Lease liabilities

 

$

400

 

 

$

(11,308

)

 

$

 

Non-cash share distribution and other transfers from unconsolidated entities:

 

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

$

4,201

 

 

$

1,430

 

 

$

 

Other assets

 

$

(4,201

)

 

$

(1,430

)

 

$

 

 

 

See accompanying notes

F-21


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(Amounts in thousands except per Unit data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

PARTNERS’ CAPITAL

 

 

 

 

 

 

 

 

 

PREFERENCE UNITS

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

37,280

 

 

$

37,280

 

 

$

37,280

 

Balance, end of year

 

$

37,280

 

 

$

37,280

 

 

$

37,280

 

GENERAL PARTNER

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

10,951,940

 

 

$

10,532,037

 

 

$

10,355,789

 

OP Unit Issuance:

 

 

 

 

 

 

 

 

 

Conversion of OP Units held by Limited Partners into OP Units held
   by General Partner

 

 

11,923

 

 

 

74,063

 

 

 

4,696

 

Issuance of OP Units

 

 

139,623

 

 

 

 

 

 

 

Exercise of EQR share options

 

 

25,069

 

 

 

85,445

 

 

 

12,275

 

EQR’s Employee Share Purchase Plan (ESPP)

 

 

4,178

 

 

 

4,265

 

 

 

4,508

 

Share-based employee compensation expense:

 

 

 

 

 

 

 

 

 

EQR restricted shares

 

 

11,595

 

 

 

8,389

 

 

 

11,225

 

EQR share options

 

 

2,321

 

 

 

3,101

 

 

 

2,349

 

EQR ESPP discount

 

 

796

 

 

 

991

 

 

 

944

 

Net income available to Units – General Partner

 

 

773,821

 

 

 

1,329,760

 

 

 

910,546

 

OP Units – General Partner distributions

 

 

(942,047

)

 

 

(902,412

)

 

 

(897,326

)

Offering costs

 

 

(783

)

 

 

(428

)

 

 

 

Supplemental Executive Retirement Plan (SERP)

 

 

(269

)

 

 

(1,335

)

 

 

(395

)

Acquisition of Noncontrolling Interests – Partially Owned Properties

 

 

(27,383

)

 

 

 

 

 

 

Change in market value of Redeemable Limited Partners

 

 

176,490

 

 

 

(158,598

)

 

 

125,224

 

Adjustment for Limited Partners ownership in Operating Partnership

 

 

11,432

 

 

 

(23,338

)

 

 

2,202

 

Balance, end of year

 

$

11,138,706

 

 

$

10,951,940

 

 

$

10,532,037

 

LIMITED PARTNERS

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

214,094

 

 

$

233,162

 

 

$

227,837

 

Issuance of restricted units to Limited Partners

 

 

1

 

 

 

 

 

 

13

 

Conversion of OP Units held by Limited Partners into OP Units held by
   General Partner

 

 

(11,923

)

 

 

(74,063

)

 

 

(4,696

)

Equity compensation associated with Units – Limited Partners

 

 

19,104

 

 

 

17,797

 

 

 

11,926

 

Net income available to Units – Limited Partners

 

 

26,310

 

 

 

45,900

 

 

 

34,010

 

Units – Limited Partners distributions

 

 

(30,407

)

 

 

(30,612

)

 

 

(32,951

)

Change in carrying value of Redeemable Limited Partners

 

 

4,214

 

 

 

(1,428

)

 

 

(775

)

Adjustment for Limited Partners ownership in Operating Partnership

 

 

(11,432

)

 

 

23,338

 

 

 

(2,202

)

Balance, end of year

 

$

209,961

 

 

$

214,094

 

 

$

233,162

 

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

(34,272

)

 

$

(43,666

)

 

$

(77,563

)

Accumulated other comprehensive income (loss) – derivative instruments:

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) arising during the year

 

 

20,654

 

 

 

 

 

 

(1,190

)

Losses reclassified into earnings from other comprehensive income

 

 

11,071

 

 

 

9,394

 

 

 

35,087

 

Balance, end of year

 

$

(2,547

)

 

$

(34,272

)

 

$

(43,666

)

 

 

 

 

 

 

 

 

 

 

DISTRIBUTIONS

 

 

 

 

 

 

 

 

 

Distributions declared per Unit outstanding

 

$

2.50

 

 

$

2.41

 

 

$

2.41

 

 

See accompanying notes

F-22


Table of Contents

 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)

(Amounts in thousands except per Unit data)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

NONCONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

NONCONTROLLING INTERESTS – PARTIALLY OWNED
   PROPERTIES

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

18,166

 

 

$

4,673

 

 

$

1,183

 

Net income attributable to Noncontrolling Interests

 

 

3,774

 

 

 

17,964

 

 

 

14,855

 

Contributions by Noncontrolling Interests

 

 

603

 

 

 

1,394

 

 

 

417

 

Distributions to Noncontrolling Interests

 

 

(18,469

)

 

 

(5,865

)

 

 

(11,782

)

Acquisition of Noncontrolling Interests – Partially Owned Properties

 

 

(4,795

)

 

 

 

 

 

 

Balance, end of year

 

$

(721

)

 

$

18,166

 

 

$

4,673

 

 

See accompanying notes

F-23


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.
Business

Equity Residential (“EQR”) is an S&P 500 company focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters, a business that is conducted on its behalf by ERP Operating Limited Partnership (“ERPOP”). EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. Unless otherwise indicated, the notes to consolidated financial statements apply to both the Company and the Operating Partnership.

EQR is the general partner of, and as of December 31, 2022 owned an approximate 96.8% ownership interest in, ERPOP. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.

As of December 31, 2022, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 308 properties located in 10 states and the District of Columbia consisting of 79,597 apartment units. The ownership breakdown includes (table does not include any uncompleted development properties):

 

 

 

Properties

 

 

Apartment Units

 

Wholly Owned Properties

 

 

293

 

 

 

76,483

 

Partially Owned Properties – Consolidated

 

 

15

 

 

 

3,114

 

 

 

 

308

 

 

 

79,597

 

 

2.
Summary of Significant Accounting Policies

Basis of Presentation

Due to the Company’s ability as general partner to control either through ownership or by contract the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary has been consolidated with the Company for financial reporting purposes, except for any unconsolidated properties/entities.

Real Estate Assets and Depreciation of Investment in Real Estate

The Company expects that substantially all of its acquisitions will be accounted for as asset acquisitions. In an asset acquisition, the Company is required to capitalize transaction costs and allocate the purchase price on a relative fair value basis (including any identified intangible assets). For the years ended December 31, 2022 and 2021, all acquisitions were considered asset acquisitions.

In making estimates of relative fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired or developed and existing comparable properties in our portfolio and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the relative fair value of the tangible and intangible assets/liabilities acquired. The Company allocates the purchase price of acquired real estate to various components as follows:

Land – Based on actual purchase price adjusted to an allocation of the relative fair value (as necessary) if acquired separately or market research/comparables if acquired with an operating property.
Furniture, Fixtures and Equipment – Based on an estimate of the allocation of the relative fair value of the appliances and fixtures inside an apartment unit. The per-apartment unit amount applied depends on the economic age of the apartment units acquired. Depreciation is calculated on the straight-line method over an estimated useful life of five to ten years.

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Lease Intangibles – The Company considers the value of acquired in-place leases and above/below market leases and the amortization period is the average remaining term of each respective acquired lease.
Other Intangible Assets – The Company considers whether it has acquired other intangible assets, including any customer relationship intangibles and the amortization period is the estimated useful life of the acquired intangible asset.
Building – Based on the allocation of the relative fair value determined on an “as-if vacant” basis. Depreciation is calculated on the straight-line method over an estimated useful life of thirty years.
Long-Term Debt – The Company calculates the allocation of the relative fair value by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings.

Replacements inside an apartment unit such as appliances and carpeting are depreciated over an estimated useful life of five to ten years. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and building improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to fifteen years. Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms.

The Company classifies real estate assets as real estate held for sale when it is probable a property will be disposed of. The Company classifies properties under development and/or expansion and properties in the lease-up phase (including land) as construction-in-progress until construction has been completed and certificates of occupancy permits have been obtained.

Impairment of Long-Lived Assets

At least quarterly, the Company evaluates its long-lived assets, including its investment in real estate, for indicators of impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, legal, regulatory and environmental concerns, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted. If an impairment indicator exists, the Company performs the following:

For long-lived operating assets to be held and used, the Company compares the expected future undiscounted cash flows for the long-lived asset against the carrying amount of that asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, the Company would make an estimate of the fair value for the particular asset and would record an impairment loss for the difference between the estimated fair value and the carrying amount of the asset. In determining the future undiscounted cash flows or the estimated fair value of an asset there is judgment in estimating the expected future rental revenues, operating expenses and discount and capitalization rates.
For long-lived non-operating assets (projects under development and land held for development), management evaluates major cost overruns, market conditions that could affect lease-up projections, intent and ability to hold the asset, and any other indicators of impairment. If any of the indicators were to suggest impairment was present, a recoverability analysis would be performed and the carrying value of the asset would be adjusted accordingly to fair value.
For long-lived assets to be disposed of, an impairment loss is recognized when the estimated fair value of the asset, less the estimated cost to sell, is less than the carrying amount of the asset measured at the time that the Company has determined it will sell the asset. Long-lived assets held for sale and the related liabilities are separately reported, with the long-lived assets reported at the lower of their carrying amounts or their estimated fair values, less their costs to sell, and are not depreciated after reclassification to real estate held for sale.

See Note 4 for further discussion of the Company’s impairment charge on a land parcel in 2021.

Impairment of Investments in Unconsolidated Entities and Other Investments

At least quarterly, the Company evaluates its investments in unconsolidated entities and other investments for indicators of other than temporary impairment, considering whether there has been a change to events or circumstances that would impact recoverability of the Company’s investment as well as any changes with regards to the Company's intent and ability to hold the investment to recover its carrying value.

Cost Capitalization

See the Real Estate Assets and Depreciation of Investment in Real Estate section for a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. For all development, capital and renovation projects,

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the Company uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company capitalizes interest, real estate taxes and insurance, as well as payroll for those individuals directly responsible for and who spend their time on the execution and supervision of development activities. Additionally, the Company capitalizes payroll for those individuals directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. Capitalization ends when the asset, or a portion of the asset, is substantially completed and ready for its intended use. These costs are reflected on the balance sheets as increases to depreciable property and/or construction-in-progress.

During the years ended December 31, 2022 and 2021, the Company capitalized $15.6 million and $13.9 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts and investments in certificates of deposit with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions typically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions’ non-performance.

Fair Value of Financial Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments on listed market prices and third-party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company may seek to manage these risks by following established risk management policies and procedures, including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.

The Company has a policy of only entering into derivative contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Company has not sustained a material loss from these instruments nor does it anticipate any material adverse effect on its net income or financial position in the future.

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. In addition, fair value adjustments will affect either shareholders’ equity/partners’ capital or net income depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity. When the terms of an underlying transaction are modified, or when the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income each period until the instrument matures. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market each period. The Company does not use derivatives for trading or speculative purposes. See Note 10 for additional derivatives discussion.

Leases and Revenue Recognition

Rental income attributable to residential leases is recorded on a straight-line basis over the term of the lease when reasonably assured they are collectible, which is not materially different than if it were recorded when due from residents and recognized monthly as it was earned. Residential apartment leases may include lease income related to such items as utility recoveries, parking rent, storage rent and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Leases entered into between a resident and a property for the rental of an apartment unit are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis.

Rental income attributable to non-residential leases is also recorded on a straight-line basis over the term of the lease when reasonably assured they are collectible. Non-residential leases may include lease income related to such items as utility recoveries, parking rent and storage rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. Non-residential leases generally have five to ten year lease terms with market-based renewal options and consist of ground floor retail spaces and master-leased parking garages that serve as additional amenities for our residents.

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The majority of the Company’s revenue is derived from residential, non-residential and other lease income. Our revenue streams have the same timing and pattern of revenue recognition across our reportable segments, with consistent allocations between the lease and revenue recognition standards. The Company elected an accounting policy to account for both its lease and non-lease components (specifically common area maintenance charges) as a single lease component under the lease standard.

The Company is a lessor for its residential and non-residential leases and is a lessee for its corporate headquarters and regional offices and ground leases for land underlying current operating properties or projects under development. If applicable, lease agreements must be evaluated to determine the accounting treatment as a finance or operating lease in accordance with the lease standard.

The lease standard also requires lessees to recognize on the balance sheet: (a) a liability for the lease obligation (initially measured at the present value of the future lease payments not yet paid over the lease term); and (b) an asset for its right to use the underlying asset (initially equal to the lease liability). The Company uses estimates and judgments on the discount rate used to calculate the present value of the future lease payments. The Company uses its incremental borrowing rate as the discount rate because the Company typically cannot readily determine the rate implicit in the lease. Since the Company’s credit backs the corporate office lease obligations and the lease terms are generally ten years or less, the discount rate range was estimated by using the Company’s borrowing rates for actual pricing data. The discount rate range for ground leases takes into account various factors, including the longer life of the ground leases, and was estimated by using the Company’s borrowing rates for actual pricing data through 30 years and other long-term market rates.

The Company’s revenue streams that are not accounted for under the lease standard include:

Parking revenue – The Company’s parking revenue, not related to leasing, is derived primarily from monthly and transient daily parking and is accounted for at the point in time when control of the goods or services transfers to the customer and our performance obligation is satisfied.
Other rental and non-rental related revenue – The Company receives other income, including, but not limited to: (a) ancillary income, such as laundry, renters insurance and cable income; (b) net settlement income; and (c) miscellaneous fee income.
Fee and asset management revenue and interest income – The Company’s fee and asset management revenue and interest income are recorded on an accrual basis.
Gains or losses on sales of real estate properties – The Company accounts for the sale of real estate properties and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions. The Company recognizes the sale and associated gain or loss from the disposition when control transfers to unrelated third parties, contingencies have been removed and sufficient cash consideration has been received by the Company.

See Note 8 for the Company’s rental income detail allocated between the lease and revenue recognition standards.

The Company’s allowance for doubtful accounts (which offsets accounts receivable and is included within other assets on the consolidated balance sheets) and bad debts (which reduce rental income on the consolidated statements of operations and comprehensive income) have historically been very modest, particularly in our residential business, given the quality of our resident base and asset class. However, due to the impact of the novel coronavirus (“COVID-19”) pandemic and extended eviction moratoriums enacted during the pandemic, the allowance for doubtful accounts and bad debts became elevated during 2020 and remained elevated in 2021 and 2022. In accordance with the lease standard, if we determine the lease payments are not probable of collection (based on known troubled accounts, rent deferral plans granted, historical experience and other currently available evidence), we fully reserve for any unpaid amounts, deferred rent receivable, variable lease payments and straight-line receivable balances and recognize rental income only if cash is received. If the Company’s estimates of collectibility differ from the cash received, then the timing and amount of the Company’s reported revenue could be impacted. See Note 8 for additional details.

Share-Based Compensation

The Company expenses share-based compensation for employee and trustee grants of restricted shares, restricted units and share options. Any common share of beneficial interest, $0.01 par value per share (the “Common Shares”), issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in ERPOP issuing units of partnership interest (“OP Units”) to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances. See Note 12 for further discussion.

Income and Other Taxes

EQR has elected to be taxed as a REIT. This, along with the nature of the operations of its operating properties, resulted in no provision for federal income taxes at the EQR level. In addition, ERPOP generally is not liable for federal income taxes as the partners should recognize their allocable share of income or loss in their tax returns; therefore no provision for federal income taxes has been made at the ERPOP level. Historically, the Company has generally only incurred certain state and local income, excise and franchise

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taxes. The Company has elected taxable REIT subsidiary status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) included tax provisions which increased allowable interest expense deductions for 2020 (no increases for 2021 and 2022) and increased the ability for taxpayers to use net operating losses. These provisions did not result in a material impact to the Company’s taxable income or tax liabilities.

The CARES Act also allowed corporations to request accelerated refunds of their alternative minimum tax (“AMT”) credit. Prior to enactment of this provision, the remaining credits would have been refunded in installments in 2020, 2021 and 2022. We received a refund of our remaining $1.6 million in AMT credits during the year ended December 31, 2020.

The Company’s provision for income and other tax expense (benefit) was as follows for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

State and local income, franchise and excise tax (benefit)

 

$

900

 

 

$

915

 

 

$

852

 

Income and other tax expense (benefit) (1)

 

$

900

 

 

$

915

 

 

$

852

 

 

(1)
All provisions for income tax amounts are current and none are deferred.

During the years ended December 31, 2022, 2021 and 2020, the tax character of the Company’s dividends and distributions were as follows:

 

 

 

Year Ended December 31,

 

 

 

2022 (1)

 

 

2021 (2)

 

 

2020 (3)

 

Tax character of dividends and distributions:

 

 

 

 

 

 

 

 

 

Ordinary dividends

 

$

1.75466

 

 

$

1.40791

 

 

$

1.34739

 

Long-term capital gain

 

 

0.42850

 

 

 

0.73687

 

 

 

0.77923

 

Unrecaptured section 1250 gain

 

 

0.29434

 

 

 

0.26522

 

 

 

0.24838

 

Dividends and distributions per

 

 

 

 

 

 

 

 

 

Common Share/Unit outstanding

 

$

2.47750

 

 

$

2.41000

 

 

$

2.37500

 

 

(1)
The Company’s fourth quarter 2022 dividends and distributions of $0.625 per Common Share/Unit outstanding will be included as taxable income in calendar year 2023.
(2)
The Company’s fourth quarter 2021 dividends and distributions of $0.6025 per Common Share/Unit outstanding was included as taxable income in calendar year 2022.
(3)
The Company’s fourth quarter 2020 dividends and distributions of $0.6025 per Common Share/Unit outstanding was included as taxable income in calendar year 2021.

The Company issued Internal Revenue Service (“IRS”) Form 1099-DIV to shareholders to report the tax character of Company distributions consistent with these amounts. The Company provides additional information to assist shareholders in the preparation of their tax returns. For 2022, the Company reported an AMT preference adjustment equal to $(0.01) per share and disclosed amounts defined under Treasury Regulation §1.1061-6(c) as “One Year Amounts Disclosure” and “Three Year Amounts Disclosure” equal to $0.00979 per share and $0.00000 per share, respectively.

Principles of Consolidation

The Company may hold an interest in subsidiaries, partnerships, joint ventures and other similar entities and accounts for these interests in accordance with the consolidation guidance. The Company first determines whether to consolidate the entity as a variable interest entity (“VIE”) or voting interest entity, or to account for the interest under the equity method of accounting as an unconsolidated entity. In situations in which we have concluded that an entity qualifies as a VIE, it is generally because the equity investors of VIEs do not have sufficient equity at risk to finance their activities without additional subordinated financial support or do not have substantive voting rights. The Company consolidates an entity when it is considered to be the primary beneficiary of the VIE or when it controls the entity through ownership of a majority voting interest. A primary beneficiary has the power to direct the activities that most significantly impact the VIE’s performance and has the obligation to absorb the expected losses or the right to receive the expected residual returns that could potentially be significant to the VIE. In evaluating whether the entity is a VIE and/or the Company is the primary beneficiary of the entity, the Company considers several factors, including, but not limited to, proportionate share or ownership of the VIE, funding and financing sources, the business purpose of the entity, related parties, developer and property management fees and agreement terms regarding major decisions, participating and voting rights, contributions and distributions.

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Investments in Unconsolidated Entities

The Company accounts for investments in unconsolidated entities under the equity method of accounting and measures the investments initially at cost. The Company subsequently adjusts the carrying amount by additional cash and non-cash contributions and distributions and its proportionate share of the earnings and losses of such entities. The proportionate share of the earnings and losses are also recognized in the consolidated statements of operations and comprehensive income. In addition, we may earn fees for providing property management services or construction oversight.

Noncontrolling Interests

A noncontrolling interest in a subsidiary (minority interest) is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the consolidated statements of operations and comprehensive income. See Note 3 for further discussion.

Operating Partnership: Net income is allocated to noncontrolling interests based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and EQR. Issuance of additional Common Shares and OP Units changes the ownership interests of both the noncontrolling interests and EQR. Such transactions and the related proceeds are treated as capital transactions.

Partially Owned Properties: The Company reflects noncontrolling interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Company that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are generally based on ownership percentage and are reflected as noncontrolling interests in partially owned properties in the consolidated statements of operations and comprehensive income.

Partners’ Capital

The “Limited Partners” of ERPOP include various individuals and entities that contributed their properties to ERPOP in exchange for OP Units. The “General Partner” of ERPOP is EQR. Net income is allocated to the Limited Partners based on their respective ownership percentage of ERPOP. The ownership percentage is calculated by dividing the number of OP Units held by the Limited Partners by the total OP Units held by the Limited Partners and the General Partner. Issuance of additional Common Shares and OP Units changes the ownership interests of both the Limited Partners and EQR. Such transactions and the related proceeds are treated as capital transactions.

Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners

The Company classifies Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners in the mezzanine section of the consolidated balance sheets for the portion of OP Units that EQR is required, either by contract or securities law, to deliver registered Common Shares to the exchanging OP Unit holder. The redeemable noncontrolling interest units / redeemable limited partner units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. See Note 3 for further discussion.

Use of Estimates

In preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued an amendment to the debt and equity financial instruments standards which simplifies the accounting for convertible instruments and accounting for contracts in an entity’s own equity. The Company adopted the standard when effective on January 1, 2022 and it had no impact on its consolidated results of operations and financial position.

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In March 2020, the FASB issued an amendment to the reference rate reform standard which provides the option for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on contract modifications and hedge accounting. The new standard was effective for the Company upon issuance and elections could be made through December 31, 2024. The Company elected to apply the hedge accounting expedients and application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In April 2020, a FASB staff question and answer document was issued which intended to reduce the challenges of evaluating the enforceable rights and obligations of leases for concessions granted to lessees in response to the COVID-19 pandemic. We elected not to evaluate whether qualifying concessions provided by the Company in response to the COVID-19 pandemic are a lease modification, subject to the criteria that the total payments under the amended lease cannot result in a substantial increase in the rights of the lessor or obligations of the lessee. We also elected to treat the concessions as though they were contemplated as part of the existing contracts and therefore will not apply lease modification rules to the qualifying lease concession amendments. As such, deferrals deemed collectible are recorded as rental receivables with no change to timing of rental revenues and deferrals deemed non-collectible and abatements reduce rental revenues in the deferral/abatement period and cause rental revenues to effectively follow a cash basis related to the changes. The accounting elections provided by the FASB mainly apply to the Company’s non-residential leases and the majority of the amendments will not require a straight-line adjustment. See Note 8 for additional discussion.

In June 2016, the FASB issued a standard which requires companies to adopt a new approach for estimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetime expected credit loss for most financial instruments, including trade receivables. In November 2018, the FASB issued an amendment excluding operating lease receivables accounted for under the lease standard from the scope of the credit losses standard. The Company adopted this standard as required effective January 1, 2020, and it did not have a material effect on its consolidated results of operations and financial position.

Other

The Company is the controlling partner in various consolidated partnerships owning 15 properties consisting of 3,114 apartment units having a noncontrolling interest deficit balance of $0.7 million at December 31, 2022. The Company is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. Of the consolidated entities described above, the Company is the controlling partner in limited-life partnerships owning two properties having a noncontrolling interest deficit balance of $4.9 million. These two partnership agreements contain provisions that require the partnerships to be liquidated through the sale of their assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to cause the property owning partnerships to distribute the proceeds of liquidation to the Noncontrolling Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of their assets warrant a distribution based on the partnership agreements. As of December 31, 2022, the Company estimates the value of Noncontrolling Interest distributions for these two properties would have been approximately $55.4 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third-party consideration realized by the partnerships upon disposition of the two Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2022 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Noncontrolling Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Noncontrolling Interests in these Partially Owned Properties.

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3.
Equity, Capital and Other Interests

The Company refers to “Common Shares” and “Units” (which refer to both OP Units and restricted units) as equity securities for EQR and “General Partner Units” and “Limited Partner Units” as equity securities for ERPOP. To provide a streamlined and more readable presentation of the disclosures for the Company and the Operating Partnership, several sections below refer to the respective terminology for each with the same financial information and separate sections are provided, where needed, to further distinguish any differences in financial information and terminology.

The following table presents the changes in the Company’s issued and outstanding Common Shares and Units for the years ended December 31, 2022, 2021 and 2020:

 

 

 

2022

 

 

2021

 

 

2020

 

Common Shares

 

 

 

 

 

 

 

 

 

Common Shares outstanding at January 1,

 

 

375,527,195

 

 

 

372,302,000

 

 

 

371,670,884

 

Common Shares Issued:

 

 

 

 

 

 

 

 

 

Conversion of OP Units

 

 

452,532

 

 

 

1,354,208

 

 

 

122,505

 

Issuance of Common Shares

 

 

1,740,550

 

 

 

 

 

 

 

Exercise of share options

 

 

468,021

 

 

 

1,710,692

 

 

 

239,695

 

Employee Share Purchase Plan (ESPP)

 

 

66,835

 

 

 

70,702

 

 

 

90,196

 

Restricted share grants, net

 

 

174,575

 

 

 

89,593

 

 

 

178,720

 

Common Shares outstanding at December 31,

 

 

378,429,708

 

 

 

375,527,195

 

 

 

372,302,000

 

Units

 

 

 

 

 

 

 

 

 

Units outstanding at January 1,

 

 

12,659,027

 

 

 

13,858,073

 

 

 

13,731,315

 

Restricted unit grants, net

 

 

223,242

 

 

 

155,162

 

 

 

249,263

 

Conversion of OP Units to Common Shares

 

 

(452,532

)

 

 

(1,354,208

)

 

 

(122,505

)

Units outstanding at December 31,

 

 

12,429,737

 

 

 

12,659,027

 

 

 

13,858,073

 

Total Common Shares and Units outstanding at December 31,

 

 

390,859,445

 

 

 

388,186,222

 

 

 

386,160,073

 

Units Ownership Interest in Operating Partnership

 

 

3.2

%

 

 

3.3

%

 

 

3.6

%

 

The following table presents the changes in the Operating Partnership’s issued and outstanding General Partner Units and Limited Partner Units for the years ended December 31, 2022, 2021 and 2020:

 

 

 

2022

 

 

2021

 

 

2020

 

General and Limited Partner Units

 

 

 

 

 

 

 

 

 

General and Limited Partner Units outstanding at January 1,

 

 

388,186,222

 

 

 

386,160,073

 

 

 

385,402,199

 

Issued to General Partner:

 

 

 

 

 

 

 

 

 

Issuance of OP Units

 

 

1,740,550

 

 

 

 

 

 

 

Exercise of EQR share options

 

 

468,021

 

 

 

1,710,692

 

 

 

239,695

 

EQR’s Employee Share Purchase Plan (ESPP)

 

 

66,835

 

 

 

70,702

 

 

 

90,196

 

EQR’s restricted share grants, net

 

 

174,575

 

 

 

89,593

 

 

 

178,720

 

Issued to Limited Partners:

 

 

 

 

 

 

 

 

 

Restricted unit grants, net

 

 

223,242

 

 

 

155,162

 

 

 

249,263

 

General and Limited Partner Units outstanding at December 31,

 

 

390,859,445

 

 

 

388,186,222

 

 

 

386,160,073

 

Limited Partner Units

 

 

 

 

 

 

 

 

 

Limited Partner Units outstanding at January 1,

 

 

12,659,027

 

 

 

13,858,073

 

 

 

13,731,315

 

Limited Partner restricted unit grants, net

 

 

223,242

 

 

 

155,162

 

 

 

249,263

 

Conversion of Limited Partner OP Units to EQR Common Shares

 

 

(452,532

)

 

 

(1,354,208

)

 

 

(122,505

)

Limited Partner Units outstanding at December 31,

 

 

12,429,737

 

 

 

12,659,027

 

 

 

13,858,073

 

Limited Partner Units Ownership Interest in Operating Partnership

 

 

3.2

%

 

 

3.3

%

 

 

3.6

%

 

The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of restricted units, are collectively referred to as the “Noncontrolling Interests – Operating Partnership” and “Limited Partners Capital,” respectively, for the Company and the Operating Partnership. Subject to certain exceptions (including the “book-up” requirements of restricted units), the Noncontrolling Interests – Operating Partnership/Limited Partners Capital may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital (including redeemable interests) is allocated based on the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total in proportion to the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total plus the total number of Common Shares/General Partner Units. Net income is allocated to the Noncontrolling Interests – Operating Partnership/Limited Partners Capital based on the weighted average ownership percentage during the period.

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The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Noncontrolling Interests – Operating Partnership/Limited Partners Capital requesting an exchange of their Noncontrolling Interests – Operating Partnership/Limited Partners Capital with EQR. Once the Operating Partnership elects not to redeem the Noncontrolling Interests – Operating Partnership/Limited Partners Capital for cash, EQR is obligated to deliver Common Shares to the exchanging holder of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital.

The Noncontrolling Interests – Operating Partnership/Limited Partners Capital are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Noncontrolling Interests – Operating Partnership/Limited Partners Capital are differentiated and referred to as “Redeemable Noncontrolling Interests – Operating Partnership” and “Redeemable Limited Partners,” respectively. Instruments that require settlement in registered shares cannot be classified in permanent equity as it is not always completely within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered Common Shares for the remaining portion of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital that are classified in permanent equity at December 31, 2022 and 2021.

The carrying value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners is allocated based on the number of Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners in proportion to the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total. Such percentage of the total carrying value of Units/Limited Partner Units which is ascribed to the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners is then adjusted to the greater of carrying value or fair market value as described above. As of December 31, 2022 and 2021, the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners have a redemption value of approximately $318.3 million and $499.0 million, respectively, which represents the value of Common Shares that would be issued in exchange for the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners.

The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners for the years ended December 31, 2022, 2021 and 2020, respectively (amounts in thousands):

 

 

 

2022

 

 

2021

 

 

2020

 

Balance at January 1,

 

$

498,977

 

 

$

338,951

 

 

$

463,400

 

Change in market value

 

 

(176,490

)

 

 

158,598

 

 

 

(125,224

)

Change in carrying value

 

 

(4,214

)

 

 

1,428

 

 

 

775

 

Balance at December 31,

 

$

318,273

 

 

$

498,977

 

 

$

338,951

 

 

Net proceeds from EQR Common Share and Preferred Share (see definition below) offerings and proceeds from exercise of options for Common Shares are contributed by EQR to ERPOP. In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the Preferred Shares issued in the equity offering). As a result, the net proceeds from Common Shares and Preferred Shares are allocated for the Company between shareholders’ equity and Noncontrolling Interests – Operating Partnership and for the Operating Partnership between General Partner’s Capital and Limited Partners Capital to account for the change in their respective percentage ownership of the underlying equity.

The Company’s declaration of trust authorizes it to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 par value per share (the “Preferred Shares”), with specific rights, preferences and other attributes as the Board of Trustees may determine, which may include preferences, powers and rights that are senior to the rights of holders of the Company’s Common Shares.

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The following table presents the Company’s issued and outstanding Preferred Shares/Preference Units as of December 31, 2022 and 2021:

 

 

 

 

 

 

 

 

Amounts in thousands

 

 

 

 

 

Annual

 

 

 

 

 

 

 

 

 

Call

 

Dividend Per

 

 

December 31,

 

 

December 31,

 

 

 

Date (1)

 

Share/Unit (2)

 

 

2022

 

 

2021

 

Preferred Shares/Preference Units of beneficial interest, $0.01 par value;
  
100,000,000 shares authorized:

 

 

 

 

 

 

 

 

 

 

 

8.29% Series K Cumulative Redeemable Preferred Shares/Preference
   Units; liquidation value $
50 per share/unit; 745,600 shares/units issued
   and outstanding as of December 31, 2022 and 2021

 

12/10/26

 

$

4.145

 

 

$

37,280

 

 

$

37,280

 

 

 

 

 

 

 

 

$

37,280

 

 

$

37,280

 

 

(1)
On or after the call date, redeemable Preferred Shares/Preference Units may be redeemed for cash at the option of the Company or the Operating Partnership, respectively, in whole or in part, at a redemption price equal to the liquidation price per share/unit, plus accrued and unpaid distributions, if any.
(2)
Dividends on Preferred Shares/Preference Units are payable quarterly.

 

Other

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

The Company has an At-The-Market (“ATM”) share offering program which allows EQR to issue Common Shares from time to time into the existing trading market at current market prices or through negotiated transactions, including under forward sale arrangements. In May 2022, the Company replaced the prior program with a new program which extended the maturity to May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of December 31, 2022.

Forward sale agreements under the ATM program allow the Company, at its election, to settle the agreements by issuing Common Shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of Common Shares or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method (see Note 11 for additional discussion). The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s Common Shares over the term of the forward sale agreement.

During the quarter ended September 30, 2021, the Company entered into forward sale agreements under the prior program for a total of approximately 1.7 million Common Shares at a weighted average initial forward price per share of $83.25. During the quarter ended December 31, 2022, the Company settled all of the outstanding forward sale agreements, at a weighted average forward price per share of $80.22, which is inclusive of adjustments made to reflect the then-current federal funds rate and the amount of dividends paid to holders of the Company's Common Shares, for net proceeds of approximately $139.6 million. Concurrent with this transaction, ERPOP issued the same amount of OP Units to EQR in exchange for the net proceeds.

The Company may repurchase up to 13.0 million Common Shares under its share repurchase program. No open market repurchases have occurred since 2008. As of December 31, 2022, EQR has remaining authorization to repurchase up to 13.0 million of its shares.

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4.
Real Estate

The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of December 31, 2022 and 2021 (amounts in thousands):

 

 

 

2022

 

 

2021

 

Land

 

$

5,580,878

 

 

$

5,814,790

 

Depreciable property:

 

 

 

 

 

 

Buildings and improvements

 

 

19,471,503

 

 

 

19,632,284

 

Furniture, fixtures and equipment

 

 

2,352,050

 

 

 

2,220,203

 

In-Place lease intangibles

 

 

510,816

 

 

 

518,324

 

Projects under development:

 

 

 

 

 

 

Land

 

 

3,201

 

 

 

 

Construction-in-progress

 

 

109,739

 

 

 

24,307

 

Land held for development:

 

 

 

 

 

 

Land

 

 

46,160

 

 

 

46,160

 

Construction-in-progress

 

 

14,407

 

 

 

16,838

 

Investment in real estate

 

 

28,088,754

 

 

 

28,272,906

 

Accumulated depreciation

 

 

(9,027,850

)

 

 

(8,354,282

)

Investment in real estate, net

 

$

19,060,904

 

 

$

19,918,624

 

 

During the year ended December 31, 2022, the Company acquired the following from unaffiliated parties (purchase price in thousands):

 

 

 

Properties

 

 

Apartment Units

 

 

Purchase Price

 

Rental Properties – Consolidated (1)

 

 

1

 

 

 

172

 

 

$

113,000

 

Total

 

 

1

 

 

 

172

 

 

$

113,000

 

 

(1)
Purchase price includes an allocation of approximately $25.3 million to land and $87.7 million to depreciable property (inclusive of capitalized closing costs).

During the year ended December 31, 2021, the Company acquired the following from unaffiliated parties (purchase price in thousands):

 

 

 

Properties

 

 

Apartment Units

 

 

Purchase Price

 

Rental Properties – Consolidated (1)

 

 

17

 

 

 

4,747

 

 

$

1,709,379

 

Total

 

 

17

 

 

 

4,747

 

 

$

1,709,379

 

 

(1)
Purchase price includes an allocation of approximately $226.3 million to land and $1.5 billion to depreciable property (inclusive of capitalized closing costs).

During the year ended December 31, 2022, the Company disposed of the following to unaffiliated parties (sales price in thousands):

 

 

 

Properties

 

 

Apartment Units

 

 

Sales Price

 

Rental Properties – Consolidated

 

 

3

 

 

 

945

 

 

$

746,150

 

Total

 

 

3

 

 

 

945

 

 

$

746,150

 

 

The Company recognized a net gain on sales of real estate properties of approximately $304.3 million on the above sales.

During the year ended December 31, 2021, the Company disposed of the following to unaffiliated parties (sales price in thousands):

 

 

 

Properties

 

 

Apartment Units

 

 

Sales Price

 

Rental Properties – Consolidated

 

 

14

 

 

 

3,053

 

 

$

1,716,775

 

Total

 

 

14

 

 

 

3,053

 

 

$

1,716,775

 

 

The Company recognized a net gain on sales of real estate properties of approximately $1.1 billion on the above sales.

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Impairment

During the year ended December 31, 2021, the Company recorded an approximate $16.8 million non-cash asset impairment charge on a land parcel which is included in land held for development on the consolidated balance sheets and included in the non-same store/other segment discussed in Note 17. The charge was the result of an analysis of the parcel’s estimated fair value (determined using internally developed models based on market assumptions and potential sales data from the marketing process) compared to its current capitalized carrying value after reassessment of our expected hold period for the parcel. As of December 31, 2022, the land parcel's carrying value was $15.0 million and the Company has entered into an agreement to dispose of it for $16.0 million as of the date of filing.

5.
Commitments to Acquire/Dispose of Real Estate

The Company has entered into an agreement to acquire the following (purchase price in thousands):

 

 

 

Properties

 

 

Apartment Units

 

 

Purchase Price

 

Rental Properties – Consolidated

 

 

1

 

 

 

262

 

 

$

78,600

 

Total

 

 

1

 

 

 

262

 

 

$

78,600

 

 

The Company has entered into separate agreements to dispose of the following (sales price and net book value in thousands):

 

 

 

Properties

 

 

Apartment Units

 

 

Sales Price

 

 

Net Book Value at
December 31, 2022

 

Rental Properties – Consolidated

 

 

1

 

 

 

18

 

 

$

10,750

 

 

$

2,546

 

Land Parcels (one)

 

 

 

 

 

 

 

 

16,000

 

 

 

15,000

 

Total

 

 

1

 

 

 

18

 

 

$

26,750

 

 

$

17,546

 

 

The closing of pending transactions is subject to certain conditions and restrictions; therefore, there can be no assurance that the transactions will be consummated or that the final terms will not differ in material respects from any agreements summarized above. See Note 18 for discussion of the properties acquired or disposed of, if any, subsequent to December 31, 2022.

6.
Investments in Partially Owned Entities

The Company has invested in various entities with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated).

Consolidated VIEs

In accordance with accounting standards for consolidation of VIEs, the Company consolidates ERPOP on EQR’s financial statements. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. The limited partners are not able to exercise substantive kick-out or participating rights. As a result, ERPOP qualifies as a VIE. EQR has a controlling financial interest in ERPOP and, thus, is ERPOP’s primary beneficiary. EQR has the power to direct the activities of ERPOP that most significantly impact ERPOP’s economic performance as well as the obligation to absorb losses or the right to receive benefits from ERPOP that could potentially be significant to ERPOP.

The Company has various equity interests in certain joint ventures that have been deemed to be VIEs, and the Company is the VIEs’ primary beneficiary. As a result, the joint ventures are required to be consolidated on the Company’s financial statements. The following table summarizes the Company’s consolidated joint ventures as of December 31, 2022 and 2021:

 

 

Operating Properties (1)

 

 

Project Under Development (2)

 

 

Properties

 

 

Apartment Units

 

 

Project

 

 

Apartment Units

 

2022 Consolidated Joint Ventures (VIE)

 

15

 

 

 

3,114

 

 

 

1

 

 

 

312

 

2021 Consolidated Joint Ventures (VIE)

 

16

 

 

 

3,546

 

 

 

1

 

 

 

312

 

 

(1)
In 2022, the Company acquired its joint venture partner’s 25% interest in a 432-unit apartment property for $32.2 million, and the property is now wholly owned. In connection with the buyout, the carrying amount of the Noncontrolling Interests – Partially Owned Properties totaling $4.8 million was reduced to zero and the remaining $27.4 million was recorded to paid in capital/General Partner's Capital.
(2)
The land under this project is subject to a long-term ground lease.

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Table of Contents

 

The following table provides consolidated assets and liabilities related to the VIEs discussed above as of December 31, 2022 and 2021 (amounts in thousands):

 

 

December 31, 2022

 

 

December 31, 2021

 

Consolidated Assets

$

691,880

 

 

$

912,955

 

Consolidated Liabilities

$

158,932

 

 

$

251,424

 

 

Certain consolidated joint ventures in which we have investments obtained mortgage debt to finance a portion of their activities. The following table and information summarizes the variable rate construction mortgage debt that is non-recourse to the Company at December 31, 2022 and 2021 (aggregate and amounts borrowed under loan commitments in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

Recently Completed Operating Property (1)

 

 

Project Under Development

 

 

Recently Completed Operating Property (1)

 

Number of joint ventures with debt financing

 

 

1

 

 

 

1

 

 

 

1

 

Aggregate loan commitments

 

$

67,589

 

 

$

73,344

 

 

$

67,589

 

Amounts borrowed under loan commitments (2)

 

$

64,776

 

 

$

44,980

 

 

$

61,783

 

Maturity dates

 

2023

 

 

2025

 

 

2022

 

 

(1)
The maturity date of the construction loan was extended to June 25, 2023.
(2)
See Note 9 for the proceeds of secured conventional floating rate debt under Mortgage Notes Payable.

Investments in Unconsolidated Entities

The Company has various equity interests in certain joint ventures that are unconsolidated and accounted for using the equity method of accounting. Most of these have been deemed to be VIEs and the Company is not the VIEs' primary beneficiary. The remaining have been deemed not to be VIEs and the Company does not have a controlling voting interest.

The following table and information summarizes the Company’s investments in unconsolidated entities as of December 31, 2022 and 2021 (amounts in thousands except for ownership percentage):

 

 

December 31, 2022

 

 

December 31, 2021

 

 

Ownership Percentage

Investments in Unconsolidated Entities:

 

 

 

 

 

 

 

Various Real Estate Holdings (VIE)

$

35,974

 

 

$

36,024

 

 

Varies

Projects Under Development and Land Held for Development (VIE)

 

218,043

 

 

 

72,488

 

 

62% - 95% (1)

Real Estate Technology Funds/Companies (VIE)

 

25,249

 

 

 

19,347

 

 

Varies

Other

 

(242

)

 

 

(411

)

 

Varies

Investments in Unconsolidated Entities

$

279,024

 

 

$

127,448

 

 

 

 

(1)
In certain instances, the joint venture agreements contain provisions for promoted interests in favor of our joint venture partner. If the terms of the promoted interest are attained, then our share of the proceeds from a sale or other capital event of the unconsolidated entity may be less than the indicated ownership percentage.

The following table summarizes the Company’s unconsolidated joint ventures that were deemed to be VIEs as of December 31, 2022 and 2021:

 

 

Real Estate Holdings (1)

 

 

Projects Under Development (2), (5)

 

 

Projects Held for Development (2), (3)

 

 

Entities

 

 

Projects

 

 

Apartment Units (4)

 

 

Projects

 

 

Apartment Units (4)

 

2022 Unconsolidated Joint Ventures (VIE)

 

2

 

 

 

6

 

 

 

1,982

 

 

 

3

 

 

 

966

 

2021 Unconsolidated Joint Ventures (VIE)

 

1

 

 

 

3

 

 

 

929

 

 

 

3

 

 

 

1,005

 

 

(1)
Represents entities that hold various real estate investments.
(2)
Represents separate unconsolidated joint ventures for the purpose of developing multifamily rental properties.
(3)
Represents separate unconsolidated joint ventures that have not yet started.
(4)
Represents the intended number of apartment units to be developed.
(5)
The land parcel under one of the projects is subject to a long-term ground lease.

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Table of Contents

 

New Development Joint Ventures

The following table provides information on total unconsolidated development joint ventures entered into during the year ended December 31, 2022 (amounts in thousands except for number of unconsolidated joint ventures and apartment units):

 

Number of unconsolidated joint ventures (1)

 

3

 

Apartment units (2)

 

1,019

 

Investments in unconsolidated entities – acquisitions

$

49,855

 

 

(1)
The entities qualify as VIEs, but the Company is not the primary beneficiary because it does not have the power to direct the activities that most significantly impact the VIE’s performance. Therefore, the entities are unconsolidated and recorded using the equity method of accounting. See Note 2 for additional discussion.
(2)
Represents the intended number of apartment units to be developed.

In 2021, the Company entered into a strategic partnership with Toll Brothers, Inc. (“Toll”) to develop apartment communities in key markets. The Company and Toll have and expect to continue to enter into separate joint venture agreements for each property, and the Company has and expects to continue to account for these unconsolidated joint ventures under the equity method of accounting. Toll has and will continue to act as the managing member of each project and receive developer fees. The Company, in certain circumstances, may act as the property manager, receive property management fees and have the right, but not the obligation, to acquire each property at fair market value upon stabilization. As of December 31, 2022, the Company and Toll entered into four separate joint venture agreements under the strategic partnership.

7.
Restricted Deposits

The following table presents the Company’s restricted deposits as of December 31, 2022 and 2021 (amounts in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Mortgage escrow deposits:

 

 

 

 

 

 

Replacement reserves

 

$

12,549

 

 

$

11,156

 

Mortgage principal reserves/sinking funds

 

 

25,304

 

 

 

19,104

 

Mortgage escrow deposits

 

 

37,853

 

 

 

30,260

 

Restricted cash:

 

 

 

 

 

 

Tax-deferred (1031) exchange proceeds

 

 

 

 

 

166,362

 

Earnest money on pending acquisitions

 

 

4,500

 

 

 

2,000

 

Restricted deposits on real estate investments

 

 

229

 

 

 

284

 

Resident security and utility deposits

 

 

38,432

 

 

 

35,663

 

Other

 

 

2,289

 

 

 

1,835

 

Restricted cash

 

 

45,450

 

 

 

206,144

 

Restricted deposits

 

$

83,303

 

 

$

236,404

 

 

8.
Leases

Lessor Accounting

The Company is the lessor for its residential and non-residential leases and these leases are accounted for as operating leases under the lease standard.

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Table of Contents

 

The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):

 

 

 

Year Ended December 31, 2022

 

 

Year Ended December 31, 2021

 

 

Year Ended December 31, 2020

 

Income Type

 

Residential
Leases

 

 

Non-Residential
Leases

 

 

Total

 

 

Residential
Leases

 

 

Non-Residential
Leases

 

 

Total

 

 

Residential
Leases

 

 

Non-Residential
Leases

 

 

Total

 

Residential and non-residential rent

 

$

2,441,332

 

 

$

63,995

 

 

$

2,505,327

 

 

$

2,199,986

 

 

$

61,033

 

 

$

2,261,019

 

 

$

2,336,778

 

 

$

51,663

 

 

$

2,388,441

 

Utility recoveries (RUBS income) (1)

 

 

81,140

 

 

 

844

 

 

 

81,984

 

 

 

74,846

 

 

 

723

 

 

 

75,569

 

 

 

70,699

 

 

 

677

 

 

 

71,376

 

Parking rent

 

 

43,335

 

 

 

435

 

 

 

43,770

 

 

 

40,934

 

 

 

565

 

 

 

41,499

 

 

 

38,743

 

 

 

412

 

 

 

39,155

 

Other lease revenue (2)

 

 

(12,637

)

 

 

(69

)

 

 

(12,706

)

 

 

(17,667

)

 

 

4,027

 

 

 

(13,640

)

 

 

(28,663

)

 

 

(5,519

)

 

 

(34,182

)

Total lease revenue

 

$

2,553,170

 

 

$

65,205

 

 

 

2,618,375

 

 

$

2,298,099

 

 

$

66,348

 

 

 

2,364,447

 

 

$

2,417,557

 

 

$

47,233

 

 

 

2,464,790

 

Parking revenue

 

 

 

 

 

 

 

 

37,338

 

 

 

 

 

 

 

 

 

26,789

 

 

 

 

 

 

 

 

 

22,210

 

Other revenue

 

 

 

 

 

 

 

 

79,467

 

 

 

 

 

 

 

 

 

72,761

 

 

 

 

 

 

 

 

 

84,705

 

Total other rental income (3)

 

 

 

 

 

 

 

 

116,805

 

 

 

 

 

 

 

 

 

99,550

 

 

 

 

 

 

 

 

 

106,915

 

Rental income

 

 

 

 

 

 

 

$

2,735,180

 

 

 

 

 

 

 

 

$

2,463,997

 

 

 

 

 

 

 

 

$

2,571,705

 

 

(1)
RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.
(2)
Other lease revenue consists of the revenue adjustment related to bad debt and other miscellaneous lease revenue.
(3)
Other rental income is accounted for under the revenue recognition standard.

The following table presents residential and non-residential accounts receivable and straight-line receivable balances for the Company’s properties as of December 31, 2022 and 2021 (amounts in thousands):

 

 

 

Residential

 

 

Non-Residential

 

Balance Sheet (Other assets):

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2022

 

 

December 31, 2021

 

Resident/tenant accounts receivable balances

 

$

35,688

 

 

$

37,959

 

 

$

2,820

 

 

$

3,218

 

Allowance for doubtful accounts

 

 

(31,405

)

 

 

(33,121

)

 

 

(2,152

)

 

 

(2,365

)

Net receivable balances

 

$

4,283

 

 

$

4,838

 

 

$

668

 

 

$

853

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line receivable balances

 

$

4,398

 

 

$

7,460

 

 

$

13,795

 

 

$

13,021

 

 

The following table presents residential bad debt for the Company’s properties for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):

 

 

 

Year Ended December 31,

 

Income Statement (Rental income):

 

 

2022

 

 

 

2021

 

 

 

2020

 

Bad debt, net (1)

 

$

26,570

 

 

$

31,485

 

 

$

42,505

 

% of rental income

 

 

1.0

%

 

 

1.3

%

 

 

1.7

%

 

(1)
Bad debt, net benefited from additional resident payments due to governmental rental assistance programs of approximately $34.1 million and $34.8 million for the years ended December 31, 2022 and 2021, respectively.

Lessee Accounting

The Company is the lessee under various corporate office and ground leases for which the Company recognizes right-of-use (“ROU”) assets and related lease liabilities. The following table presents the Company’s ROU assets and related lease liabilities as of December 31, 2022 and 2021 (amounts in thousands):

 

 

 

2022

 

 

2021

 

Right-of-use assets:

 

 

 

 

 

 

Corporate office leases (operating)

 

$

34,767

 

 

$

36,897

 

Ground leases (finance)

 

 

95,834

 

 

 

97,575

 

Ground leases (operating)

 

 

332,355

 

 

 

340,241

 

Right-of-use assets

 

$

462,956

 

 

$

474,713

 

Lease liabilities:

 

 

 

 

 

 

Corporate office leases (operating)

 

$

35,747

 

 

$

37,760

 

Ground leases (finance)

 

 

68,919

 

 

 

69,479

 

Ground leases (operating)

 

 

204,082

 

 

 

205,096

 

Lease liabilities

 

$

308,748

 

 

$

312,335

 

 

F-38


Table of Contents

 

Corporate office leases

The Company leases eight corporate offices with lease expiration dates ranging from 2024 through 2042 (inclusive of applicable extension options). See Note 15 for details on a corporate office lease with a related party.

Ground leases

The Company maintains consolidated long-term ground leases for 15 operating properties and one project under development with lease expiration dates ranging from 2042 through 2118 (inclusive of applicable purchase options). The Company owns the building and improvements. During the year ended December 31, 2021, the Company modified one ground lease that was previously classified as an operating lease. The Company now classifies this lease as a finance lease and reduced its lease liability and ROU asset due to remeasurement by approximately $11.3 million.

Additional disclosures

 

The following tables illustrate the quantitative disclosures for lessees as of and for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):

 

 

 

Year Ended
December 31, 2022

 

 

Year Ended
December 31, 2021

 

 

Year Ended
December 31, 2020

 

Lease cost:

 

 

 

 

 

 

 

 

 

Finance lease cost:

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets (capitalized)

 

$

351

 

 

$

351

 

 

$

 

Amortization of right-of-use assets (expensed)

 

 

1,391

 

 

 

1,391

 

 

 

 

Interest on lease liabilities (capitalized)

 

 

 

 

 

452

 

 

 

1,029

 

Interest on lease liabilities (expensed)

 

 

1,904

 

 

 

1,464

 

 

 

 

Operating lease cost:

 

 

 

 

 

 

 

 

 

Corporate office leases

 

 

4,061

 

 

 

3,581

 

 

 

3,747

 

Ground leases

 

 

18,338

 

 

 

18,338

 

 

 

22,102

 

Variable lease cost:

 

 

 

 

 

 

 

 

 

Corporate office leases

 

 

430

 

 

 

1,037

 

 

 

1,307

 

Ground leases

 

 

4,342

 

 

 

2,973

 

 

 

3,304

 

Total lease cost

 

$

30,817

 

 

$

29,587

 

 

$

31,489

 

 

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2020

 

Other information:

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of
   lease liabilities:

 

 

 

 

 

 

 

 

 

Investing cash flows from finance leases

 

$

 

 

$

383

 

 

$

567

 

Financing cash flows from finance leases

 

$

2,463

 

 

$

1,898

 

 

$

 

Operating cash flows from operating leases:

 

 

 

 

 

 

 

 

 

Corporate office leases

 

$

4,385

 

 

$

5,016

 

 

$

5,296

 

Ground leases

 

$

15,037

 

 

$

14,682

 

 

$

16,552

 

Weighted-average remaining lease term – finance leases

 

24.1 years

 

 

25.2 years

 

 

18.7 years

 

Weighted-average remaining lease term – operating leases:

 

 

 

 

 

 

 

 

 

Corporate office leases

 

16.1 years

 

 

16.8 years

 

 

17.4 years

 

Ground leases

 

61.2 years

 

 

61.8 years

 

 

55.3 years

 

Weighted-average discount rate – finance leases

 

 

2.8

%

 

 

2.8

%

 

 

3.0

%

Weighted-average discount rate – operating leases:

 

 

 

 

 

 

 

 

 

Corporate office leases

 

 

3.2

%

 

 

3.2

%

 

 

3.2

%

Ground leases

 

 

5.1

%

 

 

5.1

%

 

 

5.0

%

 

The following table summarizes the Company’s undiscounted cash flows for contractual obligations for minimum rent payments/receipts under operating and financing leases for the next five years and thereafter as of December 31, 2022:

 

(Payments)/Receipts Due by Year (in thousands)

 

 

 

2023

 

 

2024

 

 

2025

 

 

2026

 

 

2027

 

 

Thereafter

 

 

Total

 

Finance Leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Rent Payments (a)

 

$

(2,662

)

 

$

(2,880

)

 

$

(2,946

)

 

$

(2,959

)

 

$

(2,971

)

 

$

(85,238

)

 

$

(99,656

)

Operating Leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Rent Payments (a)

 

$

(15,173

)

 

$

(15,255

)

 

$

(15,024

)

 

$

(14,849

)

 

$

(14,923

)

 

$

(816,532

)

 

$

(891,756

)

Minimum Rent Receipts (b)

 

$

58,776

 

 

$

54,271

 

 

$

48,333

 

 

$

40,461

 

 

$

35,808

 

 

$

119,008

 

 

$

356,657

 

 

F-39


Table of Contents

 

 

(a)
Minimum basic rent due for corporate office leases and base rent due on ground leases where the Company is the lessee.
(b)
Minimum basic rent receipts due for various non-residential space where the Company is the lessor. Excludes residential leases due to their short-term nature.

The following table provides a reconciliation of lease liabilities from our undiscounted cash flows for minimum rent payments as of December 31, 2022 (amounts in thousands):

 

 

 

2022

 

Total minimum rent payments

 

$

991,412

 

Less: Lease discount

 

 

(682,664

)

Lease liabilities

 

$

308,748

 

 

9.
Debt

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. Weighted average interest rates noted below for the years ended December 31, 2022 and 2021 include the effect of any derivative instruments and amortization of premiums/discounts/OCI (other comprehensive income) on debt and derivatives.

Mortgage Notes Payable

The following tables summarize the Company’s mortgage notes payable activity for the years ended December 31, 2022 and 2021, respectively (amounts in thousands):

 

 

 

Mortgage notes
payable, net as of
December 31, 2021

 

 

Proceeds

 

 

Lump sum
payoffs

 

 

Scheduled
principal
repayments

 

 

Amortization
of premiums/
discounts

 

 

Amortization
of deferred
financing
costs, net (1)

 

 

Mortgage notes
payable, net as of
December 31, 2022

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,896,472

 

 

$

 

 

$

(286,461

)

 

$

(3,311

)

 

$

941

 

 

$

1,197

 

 

$

1,608,838

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

 

59,890

 

 

 

48,054

 

 (2)

 

 

 

 

(81

)

 

 

 

 

 

515

 

 

 

108,378

 

Secured – Tax Exempt

 

 

234,839

 

 

 

 

 

 

 

 

 

 

 

 

1,243

 

 

 

140

 

 

 

236,222

 

Floating Rate Debt

 

 

294,729

 

 

 

48,054

 

 

 

 

 

 

(81

)

 

 

1,243

 

 

 

655

 

 

 

344,600

 

Total

 

$

2,191,201

 

 

$

48,054

 

 

$

(286,461

)

 

$

(3,392

)

 

$

2,184

 

 

$

1,852

 

 

$

1,953,438

 

 

(1)
Represents amortization of deferred financing costs, net of debt financing costs.
(2)
See Note 6 for additional discussion of the variable rate construction mortgage debt.

 

 

 

Mortgage notes
payable, net as of
December 31, 2020

 

 

Proceeds

 

 

Lump sum
payoffs

 

 

Scheduled
principal
repayments

 

 

Amortization
of premiums/
discounts

 

 

Amortization
of deferred
financing
costs, net (1)

 

 

Mortgage notes
payable, net as of
December 31, 2021

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,901,091

 

 

$

28,500

 

 (2)

$

(28,200

)

 

$

(7,465

)

 

$

1,522

 

 

$

1,024

 

 

$

1,896,472

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

 

31,494

 

 

 

29,928

 

 (3)

 

 

 

 

 

 

 

 

 

 

(1,532

)

 

 

59,890

 

Secured – Tax Exempt

 

 

361,305

 

 

 

 

 

 

(128,615

)

 

 

 

 

 

1,242

 

 

 

907

 

 

 

234,839

 

Floating Rate Debt

 

 

392,799

 

 

 

29,928

 

 

 

(128,615

)

 

 

 

 

 

1,242

 

 

 

(625

)

 

 

294,729

 

Total

 

$

2,293,890

 

 

$

58,428

 

 

$

(156,815

)

 

$

(7,465

)

 

$

2,764

 

 

$

399

 

 

$

2,191,201

 

 

F-40


Table of Contents

 

 

(1)
Represents amortization of deferred financing costs, net of debt financing costs.
(2)
Obtained a 3.58% fixed rate mortgage debt maturing on March 1, 2031.
(3)
See Note 6 for additional discussion of the variable rate construction mortgage debt.

 

The following table summarizes certain interest rate and maturity date information as of and for the years ended December 31, 2022 and 2021, respectively:

 

 

 

December 31, 2022

 

December 31, 2021

Interest Rate Ranges

 

0.10% - 7.10%

 

0.06% - 4.21%

Weighted Average Interest Rate

 

3.46%

 

3.18%

Maturity Date Ranges

 

2023-2061

 

2022-2061

 

As of both December 31, 2022 and 2021, the Company had $250.0 million of secured debt (primarily tax-exempt bonds) subject to third-party credit enhancement.

The historical cost, net of accumulated depreciation, of encumbered properties was $2.5 billion and $2.7 billion at December 31, 2022 and 2021, respectively.

Notes

The following tables summarize the Company’s notes activity for the years ended December 31, 2022 and 2021, respectively (amounts in thousands):

 

 

 

Notes, net as of
December 31, 2021

 

 

Proceeds

 

 

Lump sum
payoffs

 

 

Amortization
of premiums/
discounts

 

 

Amortization
of deferred
financing
costs, net (1)

 

 

Notes, net as of
December 31, 2022

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured – Public

 

$

5,835,222

 

 

$

 

 

$

(500,000

)

 

$

2,820

 

 

$

4,287

 

 

$

5,342,329

 

 

(1)
Represents amortization of deferred financing costs, net of debt financing costs.

 

 

 

Notes, net as of
December 31, 2020

 

 

Proceeds

 

 

Lump sum
payoffs

 

 

Amortization
of premiums/
discounts

 

 

Amortization
of deferred
financing
costs, net (1)

 

 

Notes, net as of
December 31, 2021

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured – Public

 

$

5,335,536

 

 

$

497,470

 

(2)

$

 

 

$

2,538

 

 

$

(322

)

 

$

5,835,222

 

 

(1)
Represents amortization of deferred financing costs, net of debt financing costs.
(2)
Issued $500.0 million of ten-year 1.85% unsecured notes, receiving net proceeds before underwriting fees and other expenses.

 

The following table summarizes certain interest rate and maturity date information as of and for the years ended December 31, 2022 and 2021, respectively:

 

 

 

December 31, 2022

 

December 31, 2021

Interest Rate Ranges

 

1.85% - 7.57%

 

1.85% - 7.57%

Weighted Average Interest Rate

 

3.61%

 

3.65%

Maturity Date Ranges

 

2025-2047

 

2023-2047

 

The Company’s unsecured public notes contain certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Company was in compliance with its unsecured public debt covenants for both the years ended December 31, 2022 and 2021.

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in May 2022 and expires in May 2025.

F-41


Table of Contents

 

Line of Credit and Commercial Paper

On October 26, 2022, the Company replaced its existing $2.5 billion facility with a new $2.5 billion unsecured revolving credit facility maturing on October 26, 2027. The Company has the ability to increase available borrowings by an additional $750.0 million by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.725%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. The Company did not borrow any amounts under its revolving credit facility during the year ended December 31, 2022 and the weighted average interest rate was 0.88% for the year ended December 31, 2021.

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

The following table summarizes certain weighted average interest rate, maturity and amounts outstanding information for the commercial paper program as of and for the years ended December 31, 2022 and 2021, respectively:

 

 

 

December 31, 2022

 

December 31, 2021

Weighted Average Interest Rate (1)

 

1.52%

 

0.27%

Weighted Average Maturity (in days)

 

4

 

27

Weighted Average Amounts Outstanding

 

$156.1 million

 

$471.0 million

 

(1)
The notes bear interest at various floating rates.

The Company limits its utilization of the revolving credit 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 as of December 31, 2022 and 2021, respectively (amounts in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Unsecured revolving credit facility commitment

 

$

2,500,000

 

 

$

2,500,000

 

Commercial paper balance outstanding

 

 

(130,000

)

 

 

(315,121

)

Unsecured revolving credit facility balance outstanding

 

 

 

 

 

 

Other restricted amounts

 

 

(3,463

)

 

 

(3,507

)

Unsecured revolving credit facility availability

 

$

2,366,537

 

 

$

2,181,372

 

 

Other

The following table summarizes the Company’s total debt extinguishment costs recorded as additional interest expense during the years ended December 31, 2022, 2021 and 2020, respectively (amounts in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2020

 

Prepayment premiums/penalties

 

$

 

 

$

 

 

$

26,150

 

Write-offs of unamortized deferred financing costs

 

 

717

 

 

 

744

 

 

 

634

 

Write-offs of unamortized (premiums)/discounts/OCI

 

 

3,947

 

 

 

 

 

 

12,508

 

Total

 

$

4,664

 

 

$

744

 

 

$

39,292

 

 

F-42


Table of Contents

 

 

The following table provides a summary of the aggregate payments of principal on all debt for each of the next five years and thereafter as of December 31, 2022 (amounts in thousands):

 

Year

 

Total

 

2023 (1), (2)

 

$

998,275

 

2024

 

 

6,100

 

2025

 

 

503,180

 

2026

 

 

601,025

 

2027

 

 

409,800

 

Thereafter

 

 

4,975,870

 

Subtotal

 

 

7,494,250

 

Deferred Financing Costs and Unamortized (Discount)

 

 

(68,528

)

Total

 

$

7,425,722

 

 

(1)
Includes $130.0 million in principal outstanding on the Company’s commercial paper program.
(2)
During 2022, the Company entered into $450.0 million of ten-year forward starting SOFR swaps at a weighted average rate of 2.90% (currently equivalent to a ten-year U.S. Treasury of approximately 3.23%) to hedge the U.S. Treasury risk for the refinancing of 2023 maturities.

 

10.
Fair Value Measurements

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments on listed market prices and third-party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company may seek to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.

During the year ended December 31, 2021, the Company purchased and sold investment securities and recognized a net gain on sale of $23.4 million, which is included in interest and other income in the consolidated statements of operations. The Company did not own any of these investment securities at December 31, 2021.

A three-level valuation hierarchy exists for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s derivative positions are valued using models developed by the respective counterparty as well as models applied internally by the Company that use as their inputs readily observable market parameters (such as forward yield curves and credit default swap data). The following table summarizes the inputs to the valuations for each type of fair value measurement:

 

F-43


Table of Contents

 

Fair Value Measurement Type

 

Valuation Inputs

Employee holdings (other than Common Shares) within the supplemental executive retirement plan (the “SERP”)

 

Quoted market prices for identical assets. These holdings are included in other assets and other liabilities on the consolidated balance sheets.

Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners

 

Quoted market price of Common Shares.

Mortgage notes payable and private unsecured debt (including its commercial paper and line of credit, if applicable)

 

Indicative rates provided by lenders of similar loans.

Public unsecured notes

 

Quoted market prices for each underlying issuance.

 

The fair values of the Company’s financial instruments (other than mortgage notes payable, unsecured notes, commercial paper, line of credit and derivative instruments), including cash and cash equivalents and other financial instruments, approximate their carrying or contract value. The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable and unsecured debt (including its commercial paper and line of credit, if applicable) at December 31, 2022 and 2021, respectively (amounts in thousands):

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

Carrying Value

 

 

Estimated Fair
Value (Level 2)

 

 

Carrying Value

 

 

Estimated Fair
Value (Level 2)

 

Mortgage notes payable, net

 

$

1,953,438

 

 

$

1,803,525

 

 

$

2,191,201

 

 

$

2,193,689

 

Unsecured debt, net

 

 

5,472,284

 

 

 

4,874,490

 

 

 

6,150,252

 

 

 

6,798,309

 

Total debt, net

 

$

7,425,722

 

 

$

6,678,015

 

 

$

8,341,453

 

 

$

8,991,998

 

 

The following table summarizes the Company’s consolidated derivative instruments at December 31, 2022 (dollar amounts are in thousands):

 

 

 

Forward Starting
Swaps (1)

 

Current Notional Balance

 

$

450,000

 

Lowest Interest Rate

 

 

2.4470

%

Highest Interest Rate

 

 

3.6995

%

Maturity Date

 

 

2033

 

 

F-44


Table of Contents

 

 

(1)
Forward Starting Swaps – Designed to partially fix interest rates in advance of planned future debt issuances. These swaps have mandatory counterparty terminations in 2024 and are targeted for certain 2023 debt issuances.

The following tables provide a summary of the fair value measurements for each major category of assets and liabilities measured at fair value on a recurring basis and the location within the accompanying consolidated balance sheets at December 31, 2022 and 2021, respectively (amounts in thousands):

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

Description

 

Balance Sheet
Location

 

12/31/2022

 

 

Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)

 

 

Significant Other
Observable Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Starting Swaps

 

Other Assets

 

$

21,864

 

 

$

 

 

$

21,864

 

 

$

 

Supplemental Executive Retirement Plan

 

Other Assets

 

 

133,245

 

 

 

133,245

 

 

 

 

 

 

 

Total

 

 

 

$

155,109

 

 

$

133,245

 

 

$

21,864

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Starting Swaps

 

Other Liabilities

 

$

1,210

 

 

$

 

 

$

1,210

 

 

$

 

Supplemental Executive Retirement Plan

 

Other Liabilities

 

 

133,245

 

 

 

133,245

 

 

 

 

 

 

 

Total

 

 

 

$

134,455

 

 

$

133,245

 

 

$

1,210

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership/Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited Partners

 

Mezzanine

 

$

318,273

 

 

$

 

 

$

318,273

 

 

$

 

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

Description

 

Balance Sheet
Location

 

12/31/2021

 

 

Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)

 

 

Significant Other
Observable Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Executive Retirement Plan

 

Other Assets

 

$

164,650

 

 

$

164,650

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Executive Retirement Plan

 

Other Liabilities

 

$

164,650

 

 

$

164,650

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership/Redeemable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited Partners

 

Mezzanine

 

$

498,977

 

 

$

 

 

$

498,977

 

 

$

 

 

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Table of Contents

 

The following tables provide a summary of the effect of cash flow hedges on the Company’s accompanying consolidated statements of operations and comprehensive income for the years ended December 31, 2022, 2021 and 2020, respectively (amounts in thousands):

 

December 31, 2022
Type of Cash Flow Hedge

 

Amount of
Gain/(Loss)
Recognized in OCI
on Derivative

 

 

Location of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income

 

Amount of
Gain/(Loss)
Reclassified from
Accumulated
OCI into Income

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

Interest Rate Contracts:

 

 

 

 

 

 

 

 

Forward Starting Swaps

 

$

20,654

 

 

Interest expense

 

$

(11,071

)

Total

 

$

20,654

 

 

 

 

$

(11,071

)

 

December 31, 2021
Type of Cash Flow Hedge

 

Amount of
Gain/(Loss)
Recognized in OCI
on Derivative

 

 

Location of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income

 

Amount of
Gain/(Loss)
Reclassified from
Accumulated
OCI into Income

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

Interest Rate Contracts:

 

 

 

 

 

 

 

 

Forward Starting Swaps

 

$

 

 

Interest expense

 

$

(9,394

)

Total

 

$

 

 

 

 

$

(9,394

)

 

December 31, 2020
Type of Cash Flow Hedge

 

Amount of
Gain/(Loss)
Recognized in OCI
on Derivative

 

 

Location of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income

 

Amount of
Gain/(Loss)
Reclassified from
Accumulated
OCI into Income

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

Interest Rate Contracts:

 

 

 

 

 

 

 

 

Forward Starting Swaps

 

$

(1,190

)

 

Interest expense

 

$

(35,087

)

Total

 

$

(1,190

)

 

 

 

$

(35,087

)

 

As of December 31, 2022 and 2021, there were approximately $2.5 million and $34.3 million in deferred losses, net, included in accumulated other comprehensive income (loss), respectively, related to previously settled and unsettled derivative instruments, of which an estimated $3.5 million may be recognized as additional interest expense during the twelve months ending December 31, 2023.

In April 2020, the Company paid approximately $1.2 million to settle two forward starting swaps in conjunction with the issuance of $495.0 million of ten-year secured conventional mortgage notes. The entire $1.2 million was initially deferred as a component of accumulated other comprehensive income (loss) and will be recognized as an increase to interest expense over the first five years of the mortgage notes.

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Table of Contents

 

11.
Earnings Per Share and Earnings Per Unit

Equity Residential

The following tables set forth the computation of net income per share – basic and net income per share – diluted for the Company (amounts in thousands except per share amounts):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Numerator for net income per share – basic:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Allocation to Noncontrolling Interests – Operating Partnership

 

 

(26,310

)

 

 

(45,900

)

 

 

(34,010

)

Net (income) loss attributable to Noncontrolling
   Interests – Partially Owned Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Numerator for net income per share – basic

 

$

773,821

 

 

$

1,329,760

 

 

$

910,546

 

Numerator for net income per share – diluted:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Net (income) loss attributable to Noncontrolling
   Interests – Partially Owned Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Numerator for net income per share – diluted

 

$

800,131

 

 

$

1,375,660

 

 

$

944,556

 

Denominator for net income per share – basic and diluted:

 

 

 

 

 

 

 

 

 

Denominator for net income per share – basic

 

 

376,209

 

 

 

373,833

 

 

 

371,791

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

OP Units

 

 

11,836

 

 

 

12,263

 

 

 

13,003

 

Long-term compensation shares/units

 

 

1,402

 

 

 

1,924

 

 

 

1,080

 

ATM forward sales

 

 

3

 

 

 

69

 

 

 

 

Denominator for net income per share – diluted

 

 

389,450

 

 

 

388,089

 

 

 

385,874

 

Net income per share – basic

 

$

2.06

 

 

$

3.56

 

 

$

2.45

 

Net income per share – diluted

 

$

2.05

 

 

$

3.54

 

 

$

2.45

 

 

ERP Operating Limited Partnership

The following tables set forth the computation of net income per Unit – basic and net income per Unit – diluted for the Operating Partnership (amounts in thousands except per Unit amounts):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Numerator for net income per Unit – basic and diluted:

 

 

 

 

 

 

 

 

 

Net income

 

$

806,995

 

 

$

1,396,714

 

 

$

962,501

 

Net (income) loss attributable to Noncontrolling
   Interests – Partially Owned Properties

 

 

(3,774

)

 

 

(17,964

)

 

 

(14,855

)

Allocation to Preference Units

 

 

(3,090

)

 

 

(3,090

)

 

 

(3,090

)

Numerator for net income per Unit – basic and diluted

 

$

800,131

 

 

$

1,375,660

 

 

$

944,556

 

Denominator for net income per Unit – basic and diluted:

 

 

 

 

 

 

 

 

 

Denominator for net income per Unit – basic

 

 

388,045

 

 

 

386,096

 

 

 

384,794

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Dilution for Units issuable upon assumed exercise/vesting
   of the Company’s long-term compensation shares/units

 

 

1,402

 

 

 

1,924

 

 

 

1,080

 

ATM forward sales

 

 

3

 

 

 

69

 

 

 

 

Denominator for net income per Unit – diluted

 

 

389,450

 

 

 

388,089

 

 

 

385,874

 

Net income per Unit – basic

 

$

2.06

 

 

$

3.56

 

 

$

2.45

 

Net income per Unit – diluted

 

$

2.05

 

 

$

3.54

 

 

$

2.45

 

 

 

 

 

 

 

 

 

 

 

 

12.
Share Incentive Plans

Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in ERPOP issuing OP Units to EQR on a one-for-one basis with ERPOP receiving the net cash proceeds of such issuances.

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Table of Contents

 

Overview of Share Incentive Plans

The 2019 Share Incentive Plan (the “2019 Plan”), as approved by the Company’s shareholders on June 27, 2019, expires on June 27, 2029 and reserves 11,331,958 Common Shares for issuance. All future awards will be granted under the 2019 Plan. As of December 31, 2022, 8,920,638 shares were available for future issuance.

Pursuant to the 2019 Plan and the 2011 Share Incentive Plan (the “2011 Plan”) (collectively the “Share Incentive Plans”), officers, trustees, key employees and consultants of the Company and its subsidiaries may be granted share options to acquire Common Shares (“Options”), including non-qualified share options (“NQSOs”), incentive share options (“ISOs”) and share appreciation rights (“SARs”), or may be granted restricted or non-restricted shares/units (including long-term incentive plan awards), subject to conditions and restrictions. Options, SARs, restricted shares and restricted units are sometimes collectively referred to herein as “Awards.”

The 2011 Plan will terminate when all outstanding Awards have expired or have been exercised/vested. The Board of Trustees may at any time amend or terminate the Share Incentive Plans, but termination will not affect Awards previously granted, absent immediate vesting and cash settlement. Any Options which had vested prior to such a termination would remain exercisable by the holder.

Employee Long-Term Compensation Awards

The following table summarizes the terms of Awards generally granted to employees:

 

 

 

Options

 

Restricted Shares

 

Restricted Units

Overview

 

Options exercised after vesting result in issuance of new Common Shares.

 

Restricted shareholders generally have the same voting rights and receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder (1).

 

When certain conditions are met, restricted units convert into an equal number of OP Units, which the holder may exchange for Common Shares on a one-for-one basis or at the option of the Company the cash value of such shares. Restricted unitholders receive quarterly distribution payments on their restricted units at the same rate and on the same date as any other OP Unit holder (1).

Grant/Exercise
Price

 

Granted at the fair market value of Common Shares as of the grant date using the Black-Scholes model as described below.

 

Granted at the fair market value of Common Shares as of the grant date.

 

Granted at varying discount rates to the fair market value of Common Shares as of the grant date (2).

Vesting Period

 

In three equal installments over a three-year period from the grant date.

 

Three years from the grant date.

 

Three years from the grant date.

Expiration

 

Ten years from the grant date.

 

Not applicable.

 

Ten years from the grant date (2).

Upon Employee
Termination

 

Unvested options are canceled.

 

Unvested restricted shares are canceled.

 

Unvested restricted units are canceled.

 

(1)
Dividends/distributions paid on unvested restricted shares and units are included as a component of retained earnings and Noncontrolling Interest – Operating Partnership/Limited Partners Capital, respectively, and have not been considered in reducing net income available to Common Shares/Units in a manner similar to the Company’s preferred share/preference unit dividends for the earnings per share/Unit calculation.
(2)
A restricted unit will automatically convert to an OP Unit when the capital account of each restricted unit increases (“books-up”) to a specified target. The probability of a book-up occurring within the ten-year contractual life along with the liquidity risk associated with various hold period restrictions are both reflected in the discount. If the capital target is not attained within ten years following the date of issuance, the restricted unit will automatically be canceled and no compensation will be payable to the holder of such canceled restricted unit. If the capital target is attained and the restricted unit is converted to an OP Unit, it will not expire.

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Table of Contents

 

Valuation Method of Share Options

The fair value of the Option grants is recognized over the requisite service/vesting period of the Options. The fair value for the Company’s Options was estimated at the time the Options were granted using the Black-Scholes option pricing model with the primary grant in each year having the following weighted average assumptions:

 

 

 

2022

 

 

2021

 

 

2020

 

Expected volatility (1)

 

 

21.7

%

 

 

21.3

%

 

 

15.2

%

Expected life (2)

 

5 years

 

 

5 years

 

 

5 years

 

Expected dividend yield (3)

 

 

3.26

%

 

 

3.23

%

 

 

3.04

%

Risk-free interest rate (4)

 

 

1.66

%

 

 

0.50

%

 

 

1.32

%

Exercise price per share (5)

 

$

91.59

 

 

$

67.48

 

 

$

83.08

 

Option valuation per share

 

$

12.57

 

 

$

7.96

 

 

$

7.23

 

 

(1)
Expected volatility – Estimated based on the historical five-year volatility (the period matching the expected life) of EQR’s share price measured on a monthly basis.
(2)
Expected life – Approximates the actual weighted average life of all Options granted since the Company went public in 1993.
(3)
Expected dividend yield – Calculated by averaging the historical annual yield on EQR shares for a period matching the expected life of each grant, with the annual yield calculated by dividing actual regular dividends (excluding any special dividends) by the average price of EQR’s shares in a given year.
(4)
Risk-free interest rate – The most current U.S. Treasury rate available at the grant date for a period matching the expected life of each grant.
(5)
Exercise price per share – The closing share price of the Common Shares on the grant date.

The valuation method and assumptions are the same as those the Company used in accounting for Option expense in its consolidated financial statements. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model is only one method of valuing options. Because the Company’s Options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the actual value of the Options to the recipient may be significantly different.

Long-Term Incentive Plan

The Company’s executive compensation program allows the Chairman, Chief Executive Officer and certain other executive officers to earn from 0% to 200% of the target number of long-term incentive (“LTI”) awards, payable in the form of restricted shares and/or restricted units. No payout would be made for any result below 50% of the target performance metric. The Company’s Total Shareholder Return (“TSR”), Normalized Funds from Operations (“FFO”) and Net Debt to Normalized EBITDAre (Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate) results over a forward-looking three-year performance period determine the restricted shares and/or restricted units awarded and are compared to pre-established quantitative performance metrics. The grant date fair value of the awards is estimated using a Monte Carlo model for the TSR portion of the awards, and the resulting expense is recorded over the service period regardless of whether the TSR performance measures are achieved, while the Normalized FFO and Net Debt to Normalized EBITDAre portions of the awards are adjusted based on the final achievement obtained. If the executive is retirement-eligible, the grant date fair value is amortized into expense over the first year. All other awards are amortized into expense over the three-year performance and vesting period. If employment is terminated prior to vesting, the restricted shares and restricted units are generally canceled.

 

The LTI participants receive distributions only on restricted units awarded equal to 10% of the quarterly distributions paid on OP Units during the performance period. At the end of the performance period, LTI participants receive dividends/distributions actually earned on restricted shares or restricted units awarded during the performance period, less any distributions already paid on the restricted units.

The grant date fair value of the TSR portion of the LTI awards is estimated using a multifactor Monte Carlo model to determine share prices for a set of relative awards for which the payout of the award depends on the spread of EQR’s TSR to the TSR of two indices: (a) the FTSE Nareit Apartment Index; and (b) the FTSE Nareit Equity Index. The absolute Company TSR metric previously included in the TSR portion of the LTI awards for which the payout of the award only depended on EQR’s TSR was replaced with a Net Debt to Normalized EBITDAre metric for the 2022 LTI plan, covering the three-year performance period from January 1, 2022 through December 31, 2024. The grant date fair value of the Normalized FFO and Net Debt to Normalized EBITDAre portions of the LTI awards are estimated using the closing price of EQR Common Shares on the grant date for the restricted shares and a discounted closing price of EQR Common Shares on the grant date for the restricted units to reflect the “book-up” and liquidity risk inherent in the units. The individual prices determined above are then weighted to arrive at the final values for each restricted share/unit as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Weighted average fair value per restricted share

 

$

96.84

 

 

$

61.73

 

 

$

75.89

 

Weighted average fair value per restricted unit

 

$

93.32

 

 

$

59.82

 

 

$

72.69

 

 

F-49


Table of Contents

 

 

The valuation method and assumptions are the same as those the Company used in accounting for the LTI award expense in its consolidated financial statements. The Monte Carlo valuation model is only one method of valuing awards. Because the Company’s restricted shares/units have characteristics significantly different from those of traded shares/units, and because changes in the subjective input assumptions can materially affect the fair value estimate, the actual value of the restricted shares/units to the recipient may be significantly different.

Trustees

All non-employee Trustees, with the exception of the Company’s Chairman, are granted Options, restricted shares and/or restricted units that vest one year from the grant date that corresponds to the term for which he or she has been elected to serve. Since 2016, the Chairman has only received awards under the LTI plan (see further discussion above).

Retirement Benefits

The Company’s Share Incentive Plans provide for certain benefits upon retirement. The following table summarizes the terms of each retirement eligibility category.

 

 

 

Age 62 for Employees

 

Rule of 70 for Employees

 

Age 72 for Trustees

Eligibility

 

For employees hired prior to January 1, 2009 and who were age 59 or older as of February 1, 2019.

 

All employees (1).

 

All non-employee Trustees.

Effect on unvested restricted shares,
restricted units and Options

 

Awards immediately vest, Options continue to be exercisable for the balance of the applicable ten-year option period and restricted units are still subject to the book-up provisions.

 

Awards continue to vest per the original vesting schedule, subject to certain conditions, Options continue to be exercisable for the balance of the applicable ten-year option period and restricted units are still subject to the book-up provisions.

 

Awards immediately vest, Options continue to be exercisable for the balance of the applicable ten-year option period and restricted units are still subject to the book-up provisions.

Effect on LTI Plan

 

Awards are prorated in proportion to the number of days worked in the first year of the three-year performance period and the individual does not receive any payout of shares or units until the final payout is determined at the end of the three-year performance period.

 

(1)
The Rule of 70 is met when an employee’s years of service with the Company (which must be at least 15 years) plus his or her age (which must be at least 55 years) on the date of termination equals or exceeds 70 years. In addition, the employee must give the Company at least six months’ advance written notice of his or her intention to retire along with agreeing to certain other conditions.

Under the Company’s definitions of retirement, some of its executive officers, including its Chief Executive Officer, and its Chairman are retirement eligible.

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Table of Contents

 

Compensation Expense and Award Activity

The following tables summarize compensation information regarding the restricted shares, restricted units, Options and Employee Share Purchase Plan (“ESPP”) for the three years ended December 31, 2022, 2021 and 2020.

 

 

 

Year Ended December 31, 2022

 

 

 

Compensation
Expense

 

 

Compensation
Capitalized

 

 

Restricted Units/Options
In-Lieu of Bonus (1)

 

 

Compensation
Equity

 

 

Dividends
Incurred

 

Restricted shares (2)

 

$

10,419

 

 

$

1,176

 

 

$

 

 

$

11,595

 

 

$

1,120

 

Restricted units (2)

 

 

16,487

 

 

 

87

 

 

 

2,530

 

 

 

19,104

 

 

 

1,039

 

Options

 

 

1,889

 

 

 

169

 

 

 

263

 

 

 

2,321

 

 

 

 

ESPP discount

 

 

718

 

 

 

78

 

 

 

 

 

 

796

 

 

 

 

Total

 

$

29,513

 

 

$

1,510

 

 

$

2,793

 

 

$

33,816

 

 

$

2,159

 

 

 

 

Year Ended December 31, 2021

 

 

 

Compensation
Expense

 

 

Compensation
Capitalized

 

 

Restricted Units/Options
In-Lieu of Bonus (1)

 

 

Compensation
Equity

 

 

Dividends
Incurred

 

Restricted shares (2)

 

$

7,258

 

 

$

1,131

 

 

$

 

 

$

8,389

 

 

$

761

 

Restricted units (2)

 

 

16,689

 

 

 

70

 

 

 

1,038

 

 

 

17,797

 

 

 

1,254

 

Options

 

 

2,980

 

 

 

121

 

 

 

 

 

 

3,101

 

 

 

 

ESPP discount

 

 

883

 

 

 

108

 

 

 

 

 

 

991

 

 

 

 

Total

 

$

27,810

 

 

$

1,430

 

 

$

1,038

 

 

$

30,278

 

 

$

2,015

 

 

 

 

Year Ended December 31, 2020

 

 

 

Compensation
Expense

 

 

Compensation
Capitalized

 

 

Restricted Units/Options
In-Lieu of Bonus (1)

 

 

Compensation
Equity

 

 

Dividends
Incurred

 

Restricted shares (2)

 

$

10,053

 

 

$

1,172

 

 

$

 

 

$

11,225

 

 

$

1,172

 

Restricted units (2)

 

 

10,103

 

 

 

80

 

 

 

1,743

 

 

 

11,926

 

 

 

1,855

 

Options

 

 

2,156

 

 

 

193

 

 

 

 

 

 

2,349

 

 

 

 

ESPP discount

 

 

862

 

 

 

82

 

 

 

 

 

 

944

 

 

 

 

Total

 

$

23,174

 

 

$

1,527

 

 

$

1,743

 

 

$

26,444

 

 

$

3,027

 

 

(1)
The Company allows eligible officers the ability to receive immediately vested restricted units (subject to the book-up provisions described above and a two-year hold restriction) or immediately vested Options in-lieu of any percentage of their annual cash bonus.
(2)
Includes LTI plan awards granted under the executive compensation program.

Compensation expense is generally recognized for Awards as follows:

Restricted shares, restricted units and Options – Straight-line method over the vesting period of the Options, shares or units regardless of cliff or ratable vesting distinctions.
LTI plan awards – Target amount is recognized under the straight-line method over the vesting period of the shares or units.
ESPP discount – Immediately upon the purchase of Common Shares each quarter.

The Company accelerates the recognition of compensation expense for all Awards for those individuals approaching or meeting the retirement age criteria discussed above. The total compensation expense related to Awards not yet vested at December 31, 2022 is $9.5 million (including the accelerated expenses for individuals approaching or meeting the retirement age criteria discussed above), which is expected to be recognized over a weighted average term of 1.38 years.

 

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Table of Contents

 

The table below summarizes the Award activity of the Share Incentive Plans for the three years ended December 31, 2022, 2021 and 2020:

 

 

 

Common
Shares Subject
to Options

 

 

Weighted
Average
Exercise Price
per Option

 

 

Restricted
Shares

 

 

Weighted
Average Fair
Value per
Restricted Share

 

 

Restricted
Units

 

 

Weighted
Average Fair
Value per
Restricted Unit

 

Balance at December 31, 2019

 

 

5,567,544

 

 

$

55.52

 

 

 

306,706

 

 

$

66.15

 

 

 

858,284

 

 

$

64.95

 

Awards granted (1)

 

 

317,731

 

 

$

76.26

 

 

 

179,911

 

 

$

77.44

 

 

 

249,263

 

 

$

72.00

 

Awards exercised/vested

 

 

(239,695

)

 

$

50.31

 

 

 

(131,792

)

 

$

66.32

 

 

 

(227,747

)

 

$

68.47

 

Awards forfeited

 

 

(1,344

)

 

$

72.69

 

 

 

(1,191

)

 

$

73.45

 

 

 

 

 

$

 

Awards expired

 

 

(1,484

)

 

$

47.18

 

 

 

 

 

$

 

 

 

 

 

$

 

Balance at December 31, 2020

 

 

5,642,752

 

 

$

56.91

 

 

 

353,634

 

 

$

71.81

 

 

 

879,800

 

 

$

66.78

 

Awards granted (1)

 

 

489,853

 

 

$

67.58

 

 

 

96,224

 

 

$

70.46

 

 

 

190,742

 

 

$

60.71

 

Awards exercised/vested

 

 

(1,710,692

)

 

$

50.09

 

 

 

(133,351

)

 

$

62.89

 

 

 

(181,531

)

 

$

62.01

 

Awards forfeited

 

 

(23,317

)

 

$

73.33

 

 

 

(6,631

)

 

$

74.31

 

 

 

(35,580

)

 

$

59.82

 

Awards expired

 

 

(10,763

)

 

$

68.00

 

 

 

 

 

$

 

 

 

 

 

$

 

Balance at December 31, 2021

 

 

4,387,833

 

 

$

60.65

 

 

 

309,876

 

 

$

75.17

 

 

 

853,431

 

 

$

66.11

 

Awards granted (1)

 

 

164,199

 

 

$

88.22

 

 

 

182,801

 

 

$

80.52

 

 

 

223,242

 

 

$

86.47

 

Awards exercised/vested

 

 

(468,021

)

 

$

52.87

 

 

 

(194,533

)

 

$

70.91

 

 

 

(122,999

)

 

$

66.10

 

Awards forfeited

 

 

(12,968

)

 

$

77.29

 

 

 

(8,226

)

 

$

82.02

 

 

 

 

 

$

 

Awards expired

 

 

(9,683

)

 

$

60.02

 

 

 

 

 

$

 

 

 

 

 

$

 

Balance at December 31, 2022

 

 

4,061,360

 

 

$

62.60

 

 

 

289,918

 

 

$

81.21

 

 

 

953,674

 

 

$

73.57

 

 

(1)
Includes LTI plan awards granted under the executive compensation program.

 

 

 

Amounts in thousands except per share amounts

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Weighted average grant date fair value per share for Options granted

 

$

12.45

 

 

$

7.98

 

 

$

6.74

 

Aggregate intrinsic value of Options exercised (1)

 

$

14,511

 

 

$

47,413

 

 

$

7,569

 

Fair value of restricted shares vested

 

$

17,353

 

 

$

9,222

 

 

$

10,559

 

Fair value of restricted units vested

 

$

10,662

 

 

$

12,468

 

 

$

18,711

 

 

(1)
These values were calculated as the difference between the strike price of the underlying awards and the per share price at which each respective award was exercised.

The following table summarizes information regarding Options outstanding and exercisable at December 31, 2022 (aggregate intrinsic value is in thousands):

 

 

 

Options

 

 

Weighted
Average
Remaining
Contractual Life
in Years

 

 

Weighted
Average
Exercise Price

 

 

Aggregate
Intrinsic
Value (1)

 

Options Outstanding

 

 

4,061,360

 

 

 

4.85

 

 

$

62.60

 

 

$

6,303

 

Options Exercisable

 

 

3,549,325

 

 

 

4.36

 

 

$

60.80

 

 

$

6,303

 

Vested and expected to vest

 

 

506,883

 

 

 

8.26

 

 

$

75.07

 

 

$

 

 

(1)
The aggregate intrinsic values were calculated as the excess, if any, between the Company’s closing share price of $59.00 per share on December 31, 2022 and the strike price of the underlying awards.

As of December 31, 2021 and 2020, 3,710,888 Options (with a weighted average exercise price of $58.70) and 4,985,668 Options (with a weighted average exercise price of $55.12) were exercisable, respectively.

13.
Employee Plans

The Company established an Employee Share Purchase Plan to provide each employee and trustee the ability to annually acquire up to $100,000 of Common Shares of EQR. The Company registered 7,000,000 Common Shares under the ESPP, of which 2,486,599 Common Shares remained available for purchase at December 31, 2022. The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a) the closing price for a share on the last day of such quarter; and (b) the greater of: (i) the closing price for a share on the first day of such quarter, and (ii) the average closing price for a share for all the business days in the quarter.

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The following table summarizes information regarding the Common Shares issued under the ESPP with the net proceeds noted below being contributed to ERPOP in exchange for OP Units (amounts in thousands except share and per share amounts):

 

 

 

Year Ended December 31,

 

 

2022

 

2021

 

2020

Shares issued

 

66,835

 

70,702

 

90,196

Issuance price ranges

 

$52.33 – $72.51

 

$53.13 – $71.04

 

$46.23 – $63.84

Issuance proceeds

 

$4,178

 

$4,265

 

$4,508

 

The Company established a defined contribution plan (the “401(k) Plan”) to provide retirement benefits for employees that meet minimum employment criteria. The Company matches dollar for dollar up to the first 4% of eligible compensation that a participant contributes to the 401(k) Plan for all employees except those defined as highly compensated employees, whose match is 3%. Participants are vested in the Company’s contributions over five years. The Company recognized an expense in the amount of $4.8 million, $4.9 million and $5.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The Company established the SERP to provide certain officers and trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement. The SERP is restricted to investments in Common Shares, certain marketable securities that have been specifically approved and cash equivalents. The deferred compensation liability represented in the SERP and the securities issued to fund such deferred compensation liability are consolidated by the Company and carried on the Company’s balance sheets, and the Company’s Common Shares held in the SERP are accounted for as a reduction to paid in capital (included in general partner’s capital in the Operating Partnership’s financial statements).

14.
Distribution Reinvestment Plan

On September 30, 2014, the Company filed with the SEC a Form S-3 Registration Statement to register 4,790,000 Common Shares pursuant to a Distribution Reinvestment Plan (the “2014 DRIP”), which included the remaining shares available for issuance under a previous registration. The registration was automatically declared effective the same day and will expire when all 4,790,000 shares have been issued. The Company has 4,631,362 Common Shares available for issuance under the 2014 DRIP at December 31, 2022.

The 2014 DRIP provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of reinvesting cash dividends/distributions in additional Common Shares. Common Shares purchased under the 2014 DRIP may, at the option of EQR, be directly issued by EQR or purchased by EQR’s transfer agent in the open market using participants’ funds. The net proceeds from any Common Share issuances are contributed to ERPOP in exchange for OP Units.

15.
Transactions with Related Parties

The Company leases its corporate headquarters from an entity affiliated with EQR’s Chairman of the Board of Trustees. The lease term expires on November 30, 2032 and contains two five-year extension options. The amount incurred for such office space for the years ended December 31, 2022, 2021 and 2020 were approximately $1.7 million, $1.7 million and $2.1 million, respectively. The Company believes these amounts approximate market rates for such rental space.

16.
Commitments and Contingencies

Commitments

Real Estate Development Commitments

As of December 31, 2022, the Company has both consolidated and unconsolidated real estate projects under development. The following table summarizes the gross remaining total project costs for the Company’s projects under development at December 31, 2022 (total project costs remaining in thousands):

 

 

 

Projects

 

 

Apartment Units

 

 

Total Project Costs Remaining (1)

 

Projects Under Development

 

 

 

 

 

 

 

 

 

Consolidated

 

 

2

 

 

 

537

 

 

$

147,708

 

Unconsolidated

 

 

6

 

 

 

1,982

 

 

 

358,277

 

Total Projects Under Development

 

 

8

 

 

 

2,519

 

 

$

505,985

 

 

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(1)
The Company's share of the $506.0 million in total project costs remaining approximates $146.4 million, with the balance funded by the Company's joint venture partners (approximately $11.2 million) and/or applicable construction loans (approximately $348.4 million).

We have entered into, and may continue in the future to enter into, joint venture agreements with third-party partners for the development of multifamily rental properties. The joint venture agreements with each development partner include buy-sell provisions that provide the right, but not the obligation, for the Company to acquire each respective partner’s interests or sell its interests at any time following the occurrence of certain pre-defined events described in the joint venture agreements. See Note 6 for additional discussion.

In 2021, the Company entered into a commitment agreement (the “Commitment Agreement”) with Toll to pursue the joint development of multifamily rental properties with an initial term of three years. The Company intends to invest 75% of the equity for each selected project and Toll intends to invest 25%. It is expected that each project will also be financed with approximately 60% non-recourse construction debt. The parties have targeted an initial minimum co-investment of approximately $750.0 million in combined equity. The Company and Toll have and expect to continue to enter into separate joint venture agreements for each property, and the Company has and expects to continue to account for these unconsolidated joint ventures under the equity method of accounting. As of December 31, 2022, the Company and Toll have entered into four separate joint venture agreements under the Commitment Agreement, with three projects currently under development.

Other Commitments

We have entered into, and may continue in the future to enter into, real estate technology and other real estate fund investments. At December 31, 2022, the Company has invested in eight real estate technology funds and one other real estate investment fund with aggregate remaining commitments of approximately $19.9 million.

Employment Agreements

The Company has entered into a retirement benefits agreement with its Chairman and a deferred compensation agreement with one former executive officer. During the years ended December 31, 2022, 2021 and 2020, the Company recognized compensation expense of $(0.2) million, $0.1 million and $0.5 million, respectively, related to these agreements.

The following table summarizes the Company’s contractual obligations for deferred compensation for the next five years and thereafter as of December 31, 2022:

 

 

 

(Payments) Due by Year (in thousands)

 

 

 

2023

 

 

2024

 

 

2025

 

 

2026

 

 

2027

 

 

Thereafter

 

 

Total

 

Other Long-Term Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Compensation (1)

 

$

(666

)

 

$

(767

)

 

$

(767

)

 

$

(767

)

 

$

(767

)

 

$

(4,220

)

 

$

(7,954

)

 

(1)
Estimated payments to the Company’s Chairman and one former executive officer based on actual and estimated retirement dates.

Contingencies

Litigation and Legal Matters

The Company, as an owner of real estate, is subject to various federal, state and local laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future.

The Company does not believe there is any litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company.

17.
Reportable Segments

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

 

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Table of Contents

 

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance geographically by market and both on a same store and non-same store basis. While the Company does maintain a non-residential presence, it accounts for approximately 3.7% of total revenues for the year ended December 31, 2022 and is designed as an amenity for our residential residents. The chief operating decision maker evaluates the performance of each property on a consolidated residential and non-residential basis. The Company’s geographic consolidated same store operating segments represent its reportable segments.

The Company’s development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the three years ended December 31, 2022, 2021 and 2020, respectively.

The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). 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. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following table presents a reconciliation of NOI from our rental real estate for the years ended December 31, 2022, 2021 and 2020, respectively (amounts in thousands):

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Rental income

 

$

2,735,180

 

 

$

2,463,997

 

 

$

2,571,705

 

Property and maintenance expense

 

 

(483,865

)

 

 

(453,532

)

 

 

(440,998

)

Real estate taxes and insurance expense

 

 

(388,412

)

 

 

(397,105

)

 

 

(381,562

)

Total operating expenses

 

 

(872,277

)

 

 

(850,637

)

 

 

(822,560

)

Net operating income

 

$

1,862,903

 

 

$

1,613,360

 

 

$

1,749,145

 

 

The following tables present NOI from our rental real estate for each segment for the years ended December 31, 2022, 2021 and 2020, respectively, as well as total assets and capital expenditures at December 31, 2022 and 2021, respectively (amounts in thousands):

 

 

 

Year Ended December 31, 2022

 

 

Year Ended December 31, 2021

 

 

Year Ended December 31, 2020

 

 

 

Rental
Income

 

 

Operating
Expenses

 

 

NOI

 

 

Rental
Income

 

 

Operating
Expenses

 

 

NOI

 

 

Rental
Income

 

 

Operating
Expenses

 

 

NOI

 

Same store (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

$

469,180

 

 

$

137,078

 

 

$

332,102

 

 

$

431,954

 

 

$

132,274

 

 

$

299,680

 

 

$

444,129

 

 

$

140,469

 

 

$

303,660

 

Orange County

 

 

122,660

 

 

 

26,338

 

 

 

96,322

 

 

 

109,427

 

 

 

24,986

 

 

 

84,441

 

 

 

105,236

 

 

 

24,545

 

 

 

80,691

 

San Diego

 

 

86,728

 

 

 

19,395

 

 

 

67,333

 

 

 

78,709

 

 

 

18,395

 

 

 

60,314

 

 

 

74,737

 

 

 

18,176

 

 

 

56,561

 

Subtotal - Southern California

 

 

678,568

 

 

 

182,811

 

 

 

495,757

 

 

 

620,090

 

 

 

175,655

 

 

 

444,435

 

 

 

624,102

 

 

 

183,190

 

 

 

440,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

418,941

 

 

 

124,952

 

 

 

293,989

 

 

 

383,817

 

 

 

118,795

 

 

 

265,022

 

 

 

435,371

 

 

 

117,085

 

 

 

318,286

 

Washington, D.C.

 

 

411,975

 

 

 

136,130

 

 

 

275,845

 

 

 

389,205

 

 

 

129,065

 

 

 

260,140

 

 

 

405,571

 

 

 

125,353

 

 

 

280,218

 

New York

 

 

434,820

 

 

 

186,896

 

 

 

247,924

 

 

 

367,370

 

 

 

182,631

 

 

 

184,739

 

 

 

424,534

 

 

 

197,740

 

 

 

226,794

 

Seattle

 

 

282,902

 

 

 

79,101

 

 

 

203,801

 

 

 

256,988

 

 

 

80,775

 

 

 

176,213

 

 

 

257,372

 

 

 

74,362

 

 

 

183,010

 

Boston

 

 

262,604

 

 

 

79,979

 

 

 

182,625

 

 

 

235,050

 

 

 

76,374

 

 

 

158,676

 

 

 

240,158

 

 

 

71,611

 

 

 

168,547

 

Denver

 

 

43,767

 

 

 

12,422

 

 

 

31,345

 

 

 

39,084

 

 

 

11,209

 

 

 

27,875

 

 

 

37,917

 

 

 

11,040

 

 

 

26,877

 

Total same store

 

 

2,533,577

 

 

 

802,291

 

 

 

1,731,286

 

 

 

2,291,604

 

 

 

774,504

 

 

 

1,517,100

 

 

 

2,425,025

 

 

 

780,381

 

 

 

1,644,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-same store/other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-same store (2)

 

 

179,707

 

 

 

70,654

 

 

 

109,053

 

 

 

59,629

 

 

 

27,691

 

 

 

31,938

 

 

 

11,791

 

 

 

2,706

 

 

 

9,085

 

Other (3)

 

 

21,896

 

 

 

(668

)

 

 

22,564

 

 

 

112,764

 

 

 

48,442

 

 

 

64,322

 

 

 

134,889

 

 

 

39,473

 

 

 

95,416

 

Total non-same store/other

 

 

201,603

 

 

 

69,986

 

 

 

131,617

 

 

 

172,393

 

 

 

76,133

 

 

 

96,260

 

 

 

146,680

 

 

 

42,179

 

 

 

104,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

2,735,180

 

 

$

872,277

 

 

$

1,862,903

 

 

$

2,463,997

 

 

$

850,637

 

 

$

1,613,360

 

 

$

2,571,705

 

 

$

822,560

 

 

$

1,749,145

 

 

(1)
For the years ended December 31, 2022 and 2021, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2021, less properties subsequently sold, which represented 72,872 apartment units. For the year ended December 31, 2020, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2020, less properties subsequently sold, which represented 74,077 apartment units.
(2)
For the years ended December 31, 2022 and 2021, non-same store primarily includes properties acquired after January 1, 2021, plus any properties in lease-up and not stabilized as of January 1, 2021, and any properties undergoing major renovations. For the year ended December 31, 2020, non-same store primarily includes properties acquired after January 1, 2020, plus any properties in lease-up and not stabilized as of January 1, 2020, and any properties undergoing major renovations.
(3)
Other includes development, other corporate operations and operations prior to disposition for properties sold.

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Table of Contents

 

 

 

 

Year Ended December 31, 2022

 

 

Year Ended December 31, 2021

 

 

 

Total Assets

 

 

Capital Expenditures

 

 

Total Assets

 

 

Capital Expenditures

 

Same store (1)

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

$

2,590,661

 

 

$

35,481

 

 

$

2,668,136

 

 

$

20,917

 

Orange County

 

 

356,396

 

 

 

7,885

 

 

 

371,063

 

 

 

5,647

 

San Diego

 

 

228,471

 

 

 

8,798

 

 

 

232,345

 

 

 

2,899

 

Subtotal - Southern California

 

 

3,175,528

 

 

 

52,164

 

 

 

3,271,544

 

 

 

29,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco

 

 

3,068,951

 

 

 

33,854

 

 

 

3,165,347

 

 

 

20,021

 

Washington, D.C.

 

 

3,027,549

 

 

 

34,174

 

 

 

3,134,677

 

 

 

27,061

 

New York

 

 

3,421,373

 

 

 

21,636

 

 

 

3,513,047

 

 

 

28,742

 

Seattle

 

 

2,076,320

 

 

 

28,086

 

 

 

2,140,925

 

 

 

15,203

 

Boston

 

 

1,676,783

 

 

 

23,057

 

 

 

1,739,184

 

 

 

21,129

 

Denver

 

 

473,127

 

 

 

2,139

 

 

 

492,454

 

 

 

2,015

 

Total same store

 

 

16,919,631

 

 

 

195,110

 

 

 

17,457,178

 

 

 

143,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-same store/other

 

 

 

 

 

 

 

 

 

 

 

 

Non-same store (2)

 

 

2,501,008

 

 

 

25,429

 

 

 

2,439,634

 

 

 

4,491

 

Other (3)

 

 

797,623

 

 

 

547

 

 

 

1,272,429

 

 

 

2,894

 

Total non-same store/other

 

 

3,298,631

 

 

 

25,976

 

 

 

3,712,063

 

 

 

7,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

20,218,262

 

 

$

221,086

 

 

$

21,169,241

 

 

$

151,019

 

 

(1)
Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2021, less properties subsequently sold, which represented 72,872 apartment units.
(2)
Non-same store primarily includes properties acquired after January 1, 2021, plus any properties in lease-up and not stabilized as of January 1, 2021, and any properties undergoing major renovations.
(3)
Other includes development, other corporate operations and capital expenditures for properties sold.
18.
Subsequent Events

There have been no material subsequent events occurring since December 31, 2022.

F-56


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

Overall Summary

December 31, 2022

 

 

 

Properties

 

 

Apartment
Units

 

 

Investment
in Real
Estate, Gross

 

 

Accumulated
Depreciation

 

 

Investment
in Real
Estate, Net

 

 

Encumbrances (1)

 

Wholly Owned Unencumbered

 

 

256

 

 

 

67,542

 

 

$

23,810,329,470

 

 

$

(7,664,733,730

)

 

$

16,145,595,740

 

 

$

 

Wholly Owned Encumbered

 

 

37

 

 

 

8,941

 

 

 

3,376,901,549

 

 

 

(1,095,745,422

)

 

 

2,281,156,127

 

 

 

1,816,819,525

 

Wholly Owned Properties

 

 

293

 

 

 

76,483

 

 

 

27,187,231,019

 

 

 

(8,760,479,152

)

 

 

18,426,751,867

 

 

 

1,816,819,525

 

Partially Owned Unencumbered

 

 

13

 

 

 

2,646

 

 

 

666,489,021

 

 

 

(239,628,682

)

 

 

426,860,339

 

 

 

 

Partially Owned Encumbered

 

 

2

 

 

 

468

 

 

 

235,033,453

 

 

 

(27,742,015

)

 

 

207,291,438

 

 

 

136,618,560

 

Partially Owned Properties

 

 

15

 

 

 

3,114

 

 

 

901,522,474

 

 

 

(267,370,697

)

 

 

634,151,777

 

 

 

136,618,560

 

Total Unencumbered Properties

 

 

269

 

 

 

70,188

 

 

 

24,476,818,491

 

 

 

(7,904,362,412

)

 

 

16,572,456,079

 

 

 

 

Total Encumbered Properties

 

 

39

 

 

 

9,409

 

 

 

3,611,935,002

 

 

 

(1,123,487,437

)

 

 

2,488,447,565

 

 

 

1,953,438,085

 

Total Consolidated Investment in Real Estate

 

 

308

 

 

 

79,597

 

 

$

28,088,753,493

 

 

$

(9,027,849,849

)

 

$

19,060,903,644

 

 

$

1,953,438,085

 

 

(1)
See attached Encumbrances Reconciliation.

 

S-1


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

Encumbrances Reconciliation

December 31, 2022

 

Portfolio/Entity Encumbrances

 

Number of
Properties
Encumbered by

 

 

See Properties
With Note:

 

Amount

 

Archstone Master Property Holdings LLC

 

 

13

 

 

H

 

$

799,609,043

 

Portfolio/Entity Encumbrances

 

 

13

 

 

 

 

 

799,609,043

 

Individual Property Encumbrances

 

 

 

 

 

 

 

1,153,829,042

 

Total Encumbrances per Financial Statements

 

 

 

 

 

 

$

1,953,438,085

 

 

S-2


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III – Real Estate and Accumulated Depreciation

(Amounts in thousands)

The changes in total real estate for the years ended December 31, 2022, 2021 and 2020 are as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Balance, beginning of year

 

$

28,272,906

 

 

$

27,203,325

 

 

$

27,533,607

 

Acquisitions and development

 

 

214,903

 

 

 

1,912,579

 

 

 

298,847

 

Improvements

 

 

225,136

 

 

 

152,715

 

 

 

154,433

 

Dispositions and other

 

 

(624,191

)

 

 

(995,713

)

 

 

(783,562

)

Balance, end of year

 

$

28,088,754

 

 

$

28,272,906

 

 

$

27,203,325

 

 

The changes in accumulated depreciation for the years ended December 31, 2022, 2021 and 2020 are as follows:

 

 

 

2022

 

 

2021

 

 

2020

 

Balance, beginning of year

 

$

8,354,282

 

 

$

7,859,657

 

 

$

7,276,786

 

Depreciation

 

 

882,168

 

 

 

838,272

 

 

 

820,832

 

Dispositions and other

 

 

(208,600

)

 

 

(343,647

)

 

 

(237,961

)

Balance, end of year

 

$

9,027,850

 

 

$

8,354,282

 

 

$

7,859,657

 

 

S-3


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Wholly Owned Unencumbered:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

100 K Apartments (fka 100K Street)

 

Washington, D.C.

 

 

 

 

2018

 

 

222

 

 

$

15,600,000

 

 

$

70,296,069

 

 

$

118,357

 

 

$

15,600,000

 

 

$

70,414,426

 

 

$

86,014,426

 

 

$

(11,947,067

)

 

$

74,067,359

 

 

$

 

170 Amsterdam

 

New York, NY

 

G

 

 

2015

 

 

236

 

 

 

 

 

 

112,096,955

 

 

 

873,284

 

 

 

 

 

 

112,970,239

 

 

 

112,970,239

 

 

 

(34,043,879

)

 

 

78,926,360

 

 

 

 

175 Kent

 

Brooklyn, NY

 

G

 

 

2011

 

 

113

 

 

 

22,037,831

 

 

 

53,962,169

 

 

 

2,748,393

 

 

 

22,037,831

 

 

 

56,710,562

 

 

 

78,748,393

 

 

 

(24,154,395

)

 

 

54,593,998

 

 

 

 

180 Montague (fka Brooklyn Heights)

 

Brooklyn, NY

 

G

 

 

2000

 

 

193

 

 

 

32,400,000

 

 

 

92,675,228

 

 

 

5,887,763

 

 

 

32,400,000

 

 

 

98,562,991

 

 

 

130,962,991

 

 

 

(37,808,894

)

 

 

93,154,097

 

 

 

 

180 Riverside Boulevard

 

New York, NY

 

G

 

 

1998

 

 

516

 

 

 

144,968,250

 

 

 

138,346,681

 

 

 

21,777,910

 

 

 

144,968,250

 

 

 

160,124,591

 

 

 

305,092,841

 

 

 

(95,800,315

)

 

 

209,292,526

 

 

 

 

1210 Mass

 

Washington, D.C.

 

G

 

 

2004

 

 

144

 

 

 

9,213,512

 

 

 

36,559,189

 

 

 

5,206,790

 

 

 

9,213,512

 

 

 

41,765,979

 

 

 

50,979,491

 

 

 

(24,625,028

)

 

 

26,354,463

 

 

 

 

1401 Joyce on Pentagon Row

 

Arlington, VA

 

 

 

 

2004

 

 

326

 

 

 

9,780,000

 

 

 

89,668,165

 

 

 

8,362,559

 

 

 

9,780,000

 

 

 

98,030,724

 

 

 

107,810,724

 

 

 

(48,077,244

)

 

 

59,733,480

 

 

 

 

1500 Mass Ave

 

Washington, D.C.

 

G

 

 

1951

 

 

556

 

 

 

54,638,298

 

 

 

40,361,702

 

 

 

17,314,785

 

 

 

54,638,298

 

 

 

57,676,487

 

 

 

112,314,785

 

 

 

(36,090,603

)

 

 

76,224,182

 

 

 

 

1800 Oak (fka Rosslyn)

 

Arlington, VA

 

G

 

 

2003

 

 

314

 

 

 

31,400,000

 

 

 

109,005,734

 

 

 

12,374,587

 

 

 

31,400,000

 

 

 

121,380,321

 

 

 

152,780,321

 

 

 

(47,084,778

)

 

 

105,695,543

 

 

 

 

2201 Pershing Drive

 

Arlington, VA

 

G

 

 

2012

 

 

188

 

 

 

11,321,198

 

 

 

49,674,175

 

 

 

3,334,541

 

 

 

11,321,198

 

 

 

53,008,716

 

 

 

64,329,914

 

 

 

(21,108,327

)

 

 

43,221,587

 

 

 

 

2201 Wilson

 

Arlington, VA

 

G

 

 

2000

 

 

219

 

 

 

21,900,000

 

 

 

78,724,663

 

 

 

8,420,498

 

 

 

21,900,000

 

 

 

87,145,161

 

 

 

109,045,161

 

 

 

(32,851,672

)

 

 

76,193,489

 

 

 

 

2400 M St

 

Washington, D.C.

 

G

 

 

2006

 

 

359

 

 

 

30,006,593

 

 

 

114,013,785

 

 

 

5,316,469

 

 

 

30,006,593

 

 

 

119,330,254

 

 

 

149,336,847

 

 

 

(69,768,932

)

 

 

79,567,915

 

 

 

 

315 on A

 

Boston, MA

 

G

 

 

2013

 

 

202

 

 

 

14,450,070

 

 

 

115,824,930

 

 

 

1,849,886

 

 

 

14,450,070

 

 

 

117,674,816

 

 

 

132,124,886

 

 

 

(35,660,011

)

 

 

96,464,875

 

 

 

 

340 Fremont (fka Rincon Hill)

 

San Francisco, CA

 

 

 

 

2016

 

 

348

 

 

 

42,000,000

 

 

 

248,607,902

 

 

 

845,648

 

 

 

42,000,000

 

 

 

249,453,550

 

 

 

291,453,550

 

 

 

(62,382,935

)

 

 

229,070,615

 

 

 

 

341 Nevins

 

Brooklyn, NY

 

 

 

 

(F)

 

 

 

 

 

3,621,717

 

 

 

308,661

 

 

 

 

 

 

3,621,717

 

 

 

308,661

 

 

 

3,930,378

 

 

 

 

 

 

3,930,378

 

 

 

 

3003 Van Ness (fka Van Ness)

 

Washington, D.C.

 

 

 

 

1970

 

 

625

 

 

 

56,300,000

 

 

 

141,191,580

 

 

 

11,966,163

 

 

 

56,300,000

 

 

 

153,157,743

 

 

 

209,457,743

 

 

 

(59,966,206

)

 

 

149,491,537

 

 

 

 

425 Mass

 

Washington, D.C.

 

G

 

 

2009

 

 

559

 

 

 

28,150,000

 

 

 

138,600,000

 

 

 

7,678,062

 

 

 

28,150,000

 

 

 

146,278,062

 

 

 

174,428,062

 

 

 

(68,166,012

)

 

 

106,262,050

 

 

 

 

455 Eye Street

 

Washington, D.C.

 

G

 

 

2017

 

 

174

 

 

 

11,941,407

 

 

 

61,418,689

 

 

 

220,558

 

 

 

11,941,407

 

 

 

61,639,247

 

 

 

73,580,654

 

 

 

(13,446,641

)

 

 

60,134,013

 

 

 

 

4th and Hill

 

Los Angeles, CA

 

 

 

 

(F)

 

 

 

 

 

13,131,456

 

 

 

1,868,544

 

 

 

 

 

 

13,131,456

 

 

 

1,868,544

 

 

 

15,000,000

 

 

 

 

 

 

15,000,000

 

 

 

 

55 West Fifth I & II (fka Townhouse Plaza and Gardens)

 

San Mateo, CA

 

 

 

 

1964/1972

 

 

241

 

 

 

21,041,710

 

 

 

71,931,323

 

 

 

16,597,875

 

 

 

21,041,710

 

 

 

88,529,198

 

 

 

109,570,908

 

 

 

(39,856,719

)

 

 

69,714,189

 

 

 

 

600 Washington

 

New York, NY

 

G

 

 

2004

 

 

135

 

 

 

32,852,000

 

 

 

43,140,551

 

 

 

4,393,943

 

 

 

32,852,000

 

 

 

47,534,494

 

 

 

80,386,494

 

 

 

(27,305,832

)

 

 

53,080,662

 

 

 

 

660 Washington (fka Boston Common)

 

Boston, MA

 

G

 

 

2006

 

 

420

 

 

 

106,100,000

 

 

 

166,311,679

 

 

 

16,424,115

 

 

 

106,100,000

 

 

 

182,735,794

 

 

 

288,835,794

 

 

 

(66,003,911

)

 

 

222,831,883

 

 

 

 

70 Greene

 

Jersey City, NJ

 

G

 

 

2010

 

 

480

 

 

 

28,108,899

 

 

 

236,763,553

 

 

 

5,882,189

 

 

 

28,108,899

 

 

 

242,645,742

 

 

 

270,754,641

 

 

 

(106,757,715

)

 

 

163,996,926

 

 

 

 

71 Broadway

 

New York, NY

 

G

 

 

1997

 

 

238

 

 

 

22,611,600

 

 

 

77,492,171

 

 

 

21,574,386

 

 

 

22,611,600

 

 

 

99,066,557

 

 

 

121,678,157

 

 

 

(63,873,265

)

 

 

57,804,892

 

 

 

 

77 Bluxome

 

San Francisco, CA

 

 

 

 

2007

 

 

102

 

 

 

5,249,124

 

 

 

18,609,876

 

 

 

701,746

 

 

 

5,249,124

 

 

 

19,311,622

 

 

 

24,560,746

 

 

 

(8,233,756

)

 

 

16,326,990

 

 

 

 

77 Park Avenue (fka Hoboken)

 

Hoboken, NJ

 

G

 

 

2000

 

 

301

 

 

 

27,900,000

 

 

 

168,992,440

 

 

 

10,981,777

 

 

 

27,900,000

 

 

 

179,974,217

 

 

 

207,874,217

 

 

 

(67,423,156

)

 

 

140,451,061

 

 

 

 

777 Sixth

 

New York, NY

 

G

 

 

2002

 

 

294

 

 

 

65,352,706

 

 

 

65,747,294

 

 

 

7,342,095

 

 

 

65,352,706

 

 

 

73,089,389

 

 

 

138,442,095

 

 

 

(37,935,617

)

 

 

100,506,478

 

 

 

 

88 Hillside

 

Daly City, CA

 

G

 

 

2011

 

 

95

 

 

 

7,786,800

 

 

 

31,587,325

 

 

 

4,090,905

 

 

 

7,786,800

 

 

 

35,678,230

 

 

 

43,465,030

 

 

 

(15,507,323

)

 

 

27,957,707

 

 

 

 

855 Brannan

 

San Francisco, CA

 

G

 

 

2018

 

 

449

 

 

 

41,363,921

 

 

 

282,730,067

 

 

 

791,530

 

 

 

41,363,921

 

 

 

283,521,597

 

 

 

324,885,518

 

 

 

(57,385,586

)

 

 

267,499,932

 

 

 

 

929 Mass (fka 929 House)

 

Cambridge, MA

 

G

 

 

1975

 

 

127

 

 

 

3,252,993

 

 

 

21,745,595

 

 

 

9,408,793

 

 

 

3,252,993

 

 

 

31,154,388

 

 

 

34,407,381

 

 

 

(23,489,575

)

 

 

10,917,806

 

 

 

 

Academy Village

 

North Hollywood, CA

 

 

 

 

1989

 

 

248

 

 

 

25,000,000

 

 

 

23,593,194

 

 

 

12,730,206

 

 

 

25,000,000

 

 

 

36,323,400

 

 

 

61,323,400

 

 

 

(24,155,942

)

 

 

37,167,458

 

 

 

 

Acappella

 

Pasadena, CA

 

 

 

 

2002

 

 

143

 

 

 

5,839,548

 

 

 

29,360,452

 

 

 

2,564,708

 

 

 

5,839,548

 

 

 

31,925,160

 

 

 

37,764,708

 

 

 

(15,642,799

)

 

 

22,121,909

 

 

 

 

Alban Towers

 

Washington, D.C.

 

 

 

 

1934

 

 

229

 

 

 

18,900,000

 

 

 

89,794,201

 

 

 

7,663,308

 

 

 

18,900,000

 

 

 

97,457,509

 

 

 

116,357,509

 

 

 

(36,633,733

)

 

 

79,723,776

 

 

 

 

Alborada

 

Fremont, CA

 

 

 

 

1999

 

 

442

 

 

 

24,310,000

 

 

 

59,214,129

 

 

 

10,322,001

 

 

 

24,310,000

 

 

 

69,536,130

 

 

 

93,846,130

 

 

 

(52,639,765

)

 

 

41,206,365

 

 

 

 

Alcott Apartments (fka West End Tower)

 

Boston, MA

 

G

 

 

2021

 

 

470

 

 

 

10,424,000

 

 

 

397,689,562

 

 

 

153,059

 

 

 

10,424,000

 

 

 

397,842,621

 

 

 

408,266,621

 

 

 

(17,988,355

)

 

 

390,278,266

 

 

 

 

Alcyone

 

Seattle, WA

 

G

 

 

2004

 

 

162

 

 

 

11,379,497

 

 

 

49,360,503

 

 

 

2,335,387

 

 

 

11,379,497

 

 

 

51,695,890

 

 

 

63,075,387

 

 

 

(17,135,294

)

 

 

45,940,093

 

 

 

 

Altitude (fka Village at Howard Hughes, The (Lots 1 & 2))

 

Los Angeles, CA

 

 

 

 

2016

 

 

545

 

 

 

43,783,485

 

 

 

150,234,305

 

 

 

768,468

 

 

 

43,783,485

 

 

 

151,002,773

 

 

 

194,786,258

 

 

 

(39,032,515

)

 

 

155,753,743

 

 

 

 

Alton, The (fka Millikan)

 

Irvine, CA

 

 

 

 

2017

 

 

344

 

 

 

11,049,027

 

 

 

96,523,927

 

 

 

444,288

 

 

 

11,049,027

 

 

 

96,968,215

 

 

 

108,017,242

 

 

 

(23,284,909

)

 

 

84,732,333

 

 

 

 

Arbor Terrace

 

Sunnyvale, CA

 

 

 

 

1979

 

 

177

 

 

 

9,057,300

 

 

 

18,483,642

 

 

 

12,974,052

 

 

 

9,057,300

 

 

 

31,457,694

 

 

 

40,514,994

 

 

 

(22,871,546

)

 

 

17,643,448

 

 

 

 

Arches, The

 

Sunnyvale, CA

 

 

 

 

1974

 

 

410

 

 

 

26,650,000

 

 

 

62,850,000

 

 

 

8,667,397

 

 

 

26,650,000

 

 

 

71,517,397

 

 

 

98,167,397

 

 

 

(31,720,951

)

 

 

66,446,446

 

 

 

 

Artisan on Second

 

Los Angeles, CA

 

 

 

 

2008

 

 

118

 

 

 

8,000,400

 

 

 

36,074,600

 

 

 

1,773,555

 

 

 

8,000,400

 

 

 

37,848,155

 

 

 

45,848,555

 

 

 

(16,682,625

)

 

 

29,165,930

 

 

 

 

 

S-4


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Artistry Emeryville (fka Emeryville)

 

Emeryville, CA

 

 

 

 

1994

 

 

267

 

 

 

12,300,000

 

 

 

61,466,267

 

 

 

9,277,700

 

 

 

12,300,000

 

 

 

70,743,967

 

 

 

83,043,967

 

 

 

(29,468,973

)

 

 

53,574,994

 

 

 

 

Atelier

 

Brooklyn, NY

 

G

 

 

2015

 

 

120

 

 

 

32,401,680

 

 

 

47,135,432

 

 

 

864,452

 

 

 

32,401,680

 

 

 

47,999,884

 

 

 

80,401,564

 

 

 

(13,864,493

)

 

 

66,537,071

 

 

 

 

Avenue Two

 

Redwood City, CA

 

 

 

 

1972

 

 

123

 

 

 

7,995,000

 

 

 

18,005,000

 

 

 

3,218,915

 

 

 

7,995,000

 

 

 

21,223,915

 

 

 

29,218,915

 

 

 

(10,054,846

)

 

 

19,164,069

 

 

 

 

Axis at Shady Grove

 

Rockville, MD

 

 

 

 

2016

 

 

366

 

 

 

14,745,774

 

 

 

90,503,831

 

 

 

470,604

 

 

 

14,745,774

 

 

 

90,974,435

 

 

 

105,720,209

 

 

 

(20,048,451

)

 

 

85,671,758

 

 

 

 

Azure (fka Mission Bay-Block 13)

 

San Francisco, CA

 

 

 

 

2015

 

 

273

 

 

 

32,855,115

 

 

 

153,566,841

 

 

 

1,614,260

 

 

 

32,855,115

 

 

 

155,181,101

 

 

 

188,036,216

 

 

 

(42,622,898

)

 

 

145,413,318

 

 

 

 

Bay Hill

 

Long Beach, CA

 

 

 

 

2002

 

 

160

 

 

 

7,600,000

 

 

 

27,437,239

 

 

 

4,626,774

 

 

 

7,600,000

 

 

 

32,064,013

 

 

 

39,664,013

 

 

 

(20,533,563

)

 

 

19,130,450

 

 

 

 

Beatrice, The

 

New York, NY

 

 

 

 

2010

 

 

302

 

 

 

114,351,405

 

 

 

165,648,595

 

 

 

3,361,487

 

 

 

114,351,405

 

 

 

169,010,082

 

 

 

283,361,487

 

 

 

(67,992,813

)

 

 

215,368,674

 

 

 

 

Bella Vista I, II, III Combined

 

Woodland Hills, CA

 

 

 

 

2003-2007

 

 

579

 

 

 

31,682,754

 

 

 

121,095,786

 

 

 

12,495,872

 

 

 

31,682,754

 

 

 

133,591,658

 

 

 

165,274,412

 

 

 

(78,584,749

)

 

 

86,689,663

 

 

 

 

Belle Arts Condominium Homes, LLC

 

Bellevue, WA

 

 

 

 

2000

 

 

1

 

 

 

63,158

 

 

 

236,157

 

 

 

2,098

 

 

 

63,158

 

 

 

238,255

 

 

 

301,413

 

 

 

(116,241

)

 

 

185,172

 

 

 

 

Belle Fontaine

 

Marina Del Rey, CA

 

 

 

 

2003

 

 

102

 

 

 

9,098,808

 

 

 

28,701,192

 

 

 

2,883,835

 

 

 

9,098,808

 

 

 

31,585,027

 

 

 

40,683,835

 

 

 

(13,248,942

)

 

 

27,434,893

 

 

 

 

Breakwater at Marina Del Rey

 

Marina Del Rey, CA

 

 

 

 

1964-1969

 

 

224

 

 

 

 

 

 

73,189,262

 

 

 

2,754,554

 

 

 

 

 

 

75,943,816

 

 

 

75,943,816

 

 

 

(30,159,723

)

 

 

45,784,093

 

 

 

 

Briarwood (CA)

 

Sunnyvale, CA

 

 

 

 

1985

 

 

192

 

 

 

9,991,500

 

 

 

22,247,278

 

 

 

5,601,488

 

 

 

9,991,500

 

 

 

27,848,766

 

 

 

37,840,266

 

 

 

(22,206,373

)

 

 

15,633,893

 

 

 

 

Brodie, The

 

Westminster, CO

 

 

 

 

2016

 

 

312

 

 

 

8,639,904

 

 

 

79,256,940

 

 

 

1,143,901

 

 

 

8,639,904

 

 

 

80,400,841

 

 

 

89,040,745

 

 

 

(16,788,446

)

 

 

72,252,299

 

 

 

 

Brooklyner, The (fka 111 Lawrence)

 

Brooklyn, NY

 

G

 

 

2010

 

 

490

 

 

 

40,099,922

 

 

 

221,438,631

 

 

 

5,865,063

 

 

 

40,099,922

 

 

 

227,303,694

 

 

 

267,403,616

 

 

 

(93,897,222

)

 

 

173,506,394

 

 

 

 

C on Pico

 

Los Angeles, CA

 

 

 

 

2014

 

 

94

 

 

 

17,125,766

 

 

 

28,074,234

 

 

 

674,098

 

 

 

17,125,766

 

 

 

28,748,332

 

 

 

45,874,098

 

 

 

(8,307,453

)

 

 

37,566,645

 

 

 

 

Carlyle Mill

 

Alexandria, VA

 

 

 

 

2002

 

 

317

 

 

 

10,000,000

 

 

 

51,367,913

 

 

 

11,079,514

 

 

 

10,000,000

 

 

 

62,447,427

 

 

 

72,447,427

 

 

 

(42,035,228

)

 

 

30,412,199

 

 

 

 

Carmel Terrace

 

San Diego, CA

 

 

 

 

1988-1989

 

 

384

 

 

 

2,288,300

 

 

 

20,596,281

 

 

 

14,843,791

 

 

 

2,288,300

 

 

 

35,440,072

 

 

 

37,728,372

 

 

 

(31,639,776

)

 

 

6,088,596

 

 

 

 

Cascade

 

Seattle, WA

 

G

 

 

2017

 

 

477

 

 

 

23,751,564

 

 

 

149,406,957

 

 

 

575,259

 

 

 

23,751,564

 

 

 

149,982,216

 

 

 

173,733,780

 

 

 

(32,505,847

)

 

 

141,227,933

 

 

 

 

Centennial (fka Centennial Court & Centennial Tower)

 

Seattle, WA

 

G

 

 

1991/2001

 

 

408

 

 

 

9,700,000

 

 

 

70,080,378

 

 

 

16,430,466

 

 

 

9,700,000

 

 

 

86,510,844

 

 

 

96,210,844

 

 

 

(54,699,023

)

 

 

41,511,821

 

 

 

 

Centre Club Combined

 

Ontario, CA

 

 

 

 

1994 & 2002

 

 

412

 

 

 

7,436,000

 

 

 

33,014,789

 

 

 

10,995,514

 

 

 

7,436,000

 

 

 

44,010,303

 

 

 

51,446,303

 

 

 

(32,105,510

)

 

 

19,340,793

 

 

 

 

Chelsea Square

 

Redmond, WA

 

 

 

 

1991

 

 

113

 

 

 

3,397,100

 

 

 

9,289,074

 

 

 

3,299,009

 

 

 

3,397,100

 

 

 

12,588,083

 

 

 

15,985,183

 

 

 

(10,213,447

)

 

 

5,771,736

 

 

 

 

Chloe on Madison (fka 1401 E. Madison)

 

Seattle, WA

 

G

 

 

2019

 

 

137

 

 

 

10,401,958

 

 

 

53,807,106

 

 

 

43,467

 

 

 

10,401,958

 

 

 

53,850,573

 

 

 

64,252,531

 

 

 

(7,027,468

)

 

 

57,225,063

 

 

 

 

Chloe on Union (fka Chloe)

 

Seattle, WA

 

G

 

 

2010

 

 

117

 

 

 

14,835,571

 

 

 

39,359,650

 

 

 

3,081,197

 

 

 

14,835,571

 

 

 

42,440,847

 

 

 

57,276,418

 

 

 

(10,171,551

)

 

 

47,104,867

 

 

 

 

Church Corner

 

Cambridge, MA

 

G

 

 

1987

 

 

85

 

 

 

5,220,000

 

 

 

16,744,643

 

 

 

3,600,746

 

 

 

5,220,000

 

 

 

20,345,389

 

 

 

25,565,389

 

 

 

(13,313,791

)

 

 

12,251,598

 

 

 

 

Circa Fitzsimons

 

Denver, CO

 

 

 

 

2020

 

 

280

 

 

 

9,241,400

 

 

 

86,070,796

 

 

 

474,244

 

 

 

9,241,400

 

 

 

86,545,040

 

 

 

95,786,440

 

 

 

(7,763,471

)

 

 

88,022,969

 

 

 

 

City Gate at Cupertino (fka Cupertino)

 

Cupertino, CA

 

 

 

 

1998

 

 

311

 

 

 

40,400,000

 

 

 

95,937,046

 

 

 

8,167,032

 

 

 

40,400,000

 

 

 

104,104,078

 

 

 

144,504,078

 

 

 

(41,009,589

)

 

 

103,494,489

 

 

 

 

City Square Bellevue (fka Bellevue)

 

Bellevue, WA

 

G

 

 

1998

 

 

191

 

 

 

15,100,000

 

 

 

41,876,257

 

 

 

4,334,618

 

 

 

15,100,000

 

 

 

46,210,875

 

 

 

61,310,875

 

 

 

(18,516,662

)

 

 

42,794,213

 

 

 

 

Clarendon, The

 

Arlington, VA

 

G

 

 

2005

 

 

292

 

 

 

30,400,340

 

 

 

103,824,660

 

 

 

3,166,324

 

 

 

30,400,340

 

 

 

106,990,984

 

 

 

137,391,324

 

 

 

(47,350,954

)

 

 

90,040,370

 

 

 

 

Cleo, The

 

Los Angeles, CA

 

 

 

 

1989

 

 

92

 

 

 

6,615,467

 

 

 

14,829,335

 

 

 

4,575,938

 

 

 

6,615,467

 

 

 

19,405,273

 

 

 

26,020,740

 

 

 

(11,563,408

)

 

 

14,457,332

 

 

 

 

Connecticut Heights

 

Washington, D.C.

 

 

 

 

1974

 

 

518

 

 

 

27,600,000

 

 

 

114,002,295

 

 

 

11,472,554

 

 

 

27,600,000

 

 

 

125,474,849

 

 

 

153,074,849

 

 

 

(48,629,875

)

 

 

104,444,974

 

 

 

 

Corcoran House at DuPont Circle (fka DuPont Circle)

 

Washington, D.C.

 

G

 

 

1961

 

 

138

 

 

 

13,500,000

 

 

 

26,913,113

 

 

 

4,899,921

 

 

 

13,500,000

 

 

 

31,813,034

 

 

 

45,313,034

 

 

 

(12,714,363

)

 

 

32,598,671

 

 

 

 

Courthouse Plaza

 

Arlington, VA

 

G

 

 

1990

 

 

396

 

 

 

 

 

 

87,386,024

 

 

 

8,488,969

 

 

 

 

 

 

95,874,993

 

 

 

95,874,993

 

 

 

(39,049,234

)

 

 

56,825,759

 

 

 

 

Creekside (San Mateo)

 

San Mateo, CA

 

 

 

 

1985

 

 

192

 

 

 

9,606,600

 

 

 

21,193,232

 

 

 

5,960,684

 

 

 

9,606,600

 

 

 

27,153,916

 

 

 

36,760,516

 

 

 

(22,033,090

)

 

 

14,727,426

 

 

 

 

Cronins Landing

 

Waltham, MA

 

G

 

 

1998

 

 

281

 

 

 

32,300,000

 

 

 

85,119,324

 

 

 

15,325,293

 

 

 

32,300,000

 

 

 

100,444,617

 

 

 

132,744,617

 

 

 

(39,790,380

)

 

 

92,954,237

 

 

 

 

Crystal Place

 

Arlington, VA

 

 

 

 

1986

 

 

181

 

 

 

17,200,000

 

 

 

47,918,975

 

 

 

4,699,279

 

 

 

17,200,000

 

 

 

52,618,254

 

 

 

69,818,254

 

 

 

(21,346,735

)

 

 

48,471,519

 

 

 

 

Dalton, The

 

Alexandria, VA

 

G

 

 

2018

 

 

270

 

 

 

22,947,777

 

 

 

95,334,754

 

 

 

454,380

 

 

 

22,947,777

 

 

 

95,789,134

 

 

 

118,736,911

 

 

 

(14,548,074

)

 

 

104,188,837

 

 

 

 

Deerwood (SD)

 

San Diego, CA

 

 

 

 

1990

 

 

316

 

 

 

2,082,095

 

 

 

18,739,815

 

 

 

17,949,500

 

 

 

2,082,095

 

 

 

36,689,315

 

 

 

38,771,410

 

 

 

(33,440,329

)

 

 

5,331,081

 

 

 

 

Del Mar Ridge

 

San Diego, CA

 

 

 

 

1998

 

 

181

 

 

 

7,801,824

 

 

 

36,948,176

 

 

 

5,974,943

 

 

 

7,801,824

 

 

 

42,923,119

 

 

 

50,724,943

 

 

 

(21,861,664

)

 

 

28,863,279

 

 

 

 

Eagle Canyon

 

Chino Hills, CA

 

 

 

 

1985

 

 

252

 

 

 

1,808,900

 

 

 

16,274,361

 

 

 

12,390,469

 

 

 

1,808,900

 

 

 

28,664,830

 

 

 

30,473,730

 

 

 

(24,294,152

)

 

 

6,179,578

 

 

 

 

Edge, The (fka 4885 Edgemoor Lane)

 

Bethesda, MD

 

 

 

 

2021

 

 

154

 

 

 

 

 

 

72,788,808

 

 

 

13,063

 

 

 

 

 

 

72,801,871

 

 

 

72,801,871

 

 

 

(4,378,237

)

 

 

68,423,634

 

 

 

 

Edgemont at Bethesda Metro

 

Bethesda, MD

 

 

 

 

1989

 

 

123

 

 

 

13,092,552

 

 

 

43,907,448

 

 

 

4,482,432

 

 

 

13,092,552

 

 

 

48,389,880

 

 

 

61,482,432

 

 

 

(20,248,395

)

 

 

41,234,037

 

 

 

 

Emerson Place

 

Boston, MA

 

G

 

 

1962

 

 

444

 

 

 

14,855,000

 

 

 

57,566,636

 

 

 

38,628,593

 

 

 

14,855,000

 

 

 

96,195,229

 

 

 

111,050,229

 

 

 

(76,597,956

)

 

 

34,452,273

 

 

 

 

Encore at Sherman Oaks, The

 

Sherman Oaks, CA

 

 

 

 

1988

 

 

174

 

 

 

8,700,000

 

 

 

25,446,003

 

 

 

4,809,250

 

 

 

8,700,000

 

 

 

30,255,253

 

 

 

38,955,253

 

 

 

(14,274,387

)

 

 

24,680,866

 

 

 

 

Eviva on Cherokee

 

Denver, CO

 

 

 

 

2017

 

 

274

 

 

 

10,507,626

 

 

 

100,037,204

 

 

 

1,860,527

 

 

 

10,507,626

 

 

 

101,897,731

 

 

 

112,405,357

 

 

 

(18,556,701

)

 

 

93,848,656

 

 

 

 

 

S-5


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Flora

 

Austin, TX

 

 

 

 

2019

 

 

194

 

 

 

5,733,088

 

 

 

32,343,349

 

 

 

192,360

 

 

 

5,733,088

 

 

 

32,535,709

 

 

 

38,268,797

 

 

 

(4,201,809

)

 

 

34,066,988

 

 

 

 

Fremont Center

 

Fremont, CA

 

G

 

 

2002

 

 

322

 

 

 

25,800,000

 

 

 

78,753,114

 

 

 

7,285,452

 

 

 

25,800,000

 

 

 

86,038,566

 

 

 

111,838,566

 

 

 

(33,761,134

)

 

 

78,077,432

 

 

 

 

Gaithersburg Station

 

Gaithersburg, MD

 

G

 

 

2013

 

 

400

 

 

 

17,500,000

 

 

 

74,678,917

 

 

 

5,224,502

 

 

 

17,500,000

 

 

 

79,903,419

 

 

 

97,403,419

 

 

 

(29,469,619

)

 

 

67,933,800

 

 

 

 

Gateway at Malden Center

 

Malden, MA

 

G

 

 

1988

 

 

203

 

 

 

9,209,780

 

 

 

25,722,666

 

 

 

18,846,091

 

 

 

9,209,780

 

 

 

44,568,757

 

 

 

53,778,537

 

 

 

(32,286,012

)

 

 

21,492,525

 

 

 

 

Geary Court Yard

 

San Francisco, CA

 

 

 

 

1990

 

 

165

 

 

 

1,722,400

 

 

 

15,471,429

 

 

 

6,540,464

 

 

 

1,722,400

 

 

 

22,011,893

 

 

 

23,734,293

 

 

 

(18,375,315

)

 

 

5,358,978

 

 

 

 

Girard

 

Boston, MA

 

G

 

 

2016

 

 

160

 

 

 

 

 

 

102,450,328

 

 

 

1,158,171

 

 

 

 

 

 

103,608,499

 

 

 

103,608,499

 

 

 

(22,398,155

)

 

 

81,210,344

 

 

 

 

Hampshire Place

 

Los Angeles, CA

 

 

 

 

1989

 

 

259

 

 

 

10,806,000

 

 

 

30,335,330

 

 

 

11,225,496

 

 

 

10,806,000

 

 

 

41,560,826

 

 

 

52,366,826

 

 

 

(24,997,884

)

 

 

27,368,942

 

 

 

 

Harbor Steps

 

Seattle, WA

 

G

 

 

2000

 

 

761

 

 

 

59,403,601

 

 

 

158,829,432

 

 

 

49,422,576

 

 

 

59,403,601

 

 

 

208,252,008

 

 

 

267,655,609

 

 

 

(124,036,014

)

 

 

143,619,595

 

 

 

 

Hathaway

 

Long Beach, CA

 

 

 

 

1987

 

 

385

 

 

 

2,512,500

 

 

 

22,611,912

 

 

 

15,679,986

 

 

 

2,512,500

 

 

 

38,291,898

 

 

 

40,804,398

 

 

 

(31,724,680

)

 

 

9,079,718

 

 

 

 

Helios (fka 2nd+Pine)

 

Seattle, WA

 

G

 

 

2017

 

 

398

 

 

 

18,061,674

 

 

 

206,762,591

 

 

 

958,328

 

 

 

18,061,674

 

 

 

207,720,919

 

 

 

225,782,593

 

 

 

(44,822,360

)

 

 

180,960,233

 

 

 

 

Heritage at Stone Ridge

 

Burlington, MA

 

 

 

 

2005

 

 

180

 

 

 

10,800,000

 

 

 

31,808,335

 

 

 

4,835,568

 

 

 

10,800,000

 

 

 

36,643,903

 

 

 

47,443,903

 

 

 

(21,603,853

)

 

 

25,840,050

 

 

 

 

Heritage Ridge

 

Lynwood, WA

 

 

 

 

1999

 

 

197

 

 

 

6,895,000

 

 

 

18,983,597

 

 

 

5,406,272

 

 

 

6,895,000

 

 

 

24,389,869

 

 

 

31,284,869

 

 

 

(14,983,556

)

 

 

16,301,313

 

 

 

 

Hesby

 

North Hollywood, CA

 

 

 

 

2013

 

 

308

 

 

 

23,299,892

 

 

 

102,700,108

 

 

 

2,889,705

 

 

 

23,299,892

 

 

 

105,589,813

 

 

 

128,889,705

 

 

 

(35,650,223

)

 

 

93,239,482

 

 

 

 

Highlands at South Plainfield

 

South Plainfield, NJ

 

 

 

 

2000

 

 

252

 

 

 

10,080,000

 

 

 

37,526,912

 

 

 

3,417,910

 

 

 

10,080,000

 

 

 

40,944,822

 

 

 

51,024,822

 

 

 

(24,715,819

)

 

 

26,309,003

 

 

 

 

Hikari

 

Los Angeles, CA

 

G

 

 

2007

 

 

128

 

 

 

9,435,760

 

 

 

32,564,240

 

 

 

1,840,553

 

 

 

9,435,760

 

 

 

34,404,793

 

 

 

43,840,553

 

 

 

(14,977,251

)

 

 

28,863,302

 

 

 

 

Hudson Crossing

 

New York, NY

 

G

 

 

2003

 

 

259

 

 

 

23,420,000

 

 

 

69,977,699

 

 

 

4,057,602

 

 

 

23,420,000

 

 

 

74,035,301

 

 

 

97,455,301

 

 

 

(46,188,890

)

 

 

51,266,411

 

 

 

 

Hudson Pointe

 

Jersey City, NJ

 

 

 

 

2003

 

 

182

 

 

 

5,350,000

 

 

 

41,114,074

 

 

 

8,519,647

 

 

 

5,350,000

 

 

 

49,633,721

 

 

 

54,983,721

 

 

 

(32,045,583

)

 

 

22,938,138

 

 

 

 

Huxley, The

 

Redwood City, CA

 

 

 

 

2018

 

 

137

 

 

 

18,775,028

 

 

 

89,336,651

 

 

 

302,791

 

 

 

18,775,028

 

 

 

89,639,442

 

 

 

108,414,470

 

 

 

(13,549,420

)

 

 

94,865,050

 

 

 

 

Indie Deep Ellum

 

Dallas, TX

 

G

 

 

2020

 

 

231

 

 

 

12,253,503

 

 

 

63,853,704

 

 

 

333,872

 

 

 

12,253,503

 

 

 

64,187,576

 

 

 

76,441,079

 

 

 

(6,111,055

)

 

 

70,330,024

 

 

 

 

Ivory Wood

 

Bothell, WA

 

 

 

 

2000

 

 

144

 

 

 

2,732,800

 

 

 

13,888,282

 

 

 

4,232,149

 

 

 

2,732,800

 

 

 

18,120,431

 

 

 

20,853,231

 

 

 

(10,518,766

)

 

 

10,334,465

 

 

 

 

Jia (fka Chinatown Gateway)

 

Los Angeles, CA

 

G

 

 

2014

 

 

280

 

 

 

14,791,831

 

 

 

78,286,423

 

 

 

2,131,858

 

 

 

14,791,831

 

 

 

80,418,281

 

 

 

95,210,112

 

 

 

(30,341,299

)

 

 

64,868,813

 

 

 

 

Junction 47 (fka West Seattle)

 

Seattle, WA

 

G

 

 

2015

 

 

206

 

 

 

11,726,305

 

 

 

56,581,665

 

 

 

986,404

 

 

 

11,726,305

 

 

 

57,568,069

 

 

 

69,294,374

 

 

 

(16,946,678

)

 

 

52,347,696

 

 

 

 

Juniper Sandy Springs

 

Sandy Springs, GA

 

 

 

 

2017

 

 

230

 

 

 

8,668,700

 

 

 

64,989,813

 

 

 

241,832

 

 

 

8,668,700

 

 

 

65,231,645

 

 

 

73,900,345

 

 

 

(5,646,809

)

 

 

68,253,536

 

 

 

 

Kelvin, The (fka Modera)

 

Irvine, CA

 

 

 

 

2015

 

 

194

 

 

 

15,521,552

 

 

 

64,853,448

 

 

 

1,173,016

 

 

 

15,521,552

 

 

 

66,026,464

 

 

 

81,548,016

 

 

 

(20,199,995

)

 

 

61,348,021

 

 

 

 

Kilby

 

Frisco, TX

 

 

 

 

2020

 

 

258

 

 

 

6,431,940

 

 

 

64,187,474

 

 

 

139,395

 

 

 

6,431,940

 

 

 

64,326,869

 

 

 

70,758,809

 

 

 

(6,440,466

)

 

 

64,318,343

 

 

 

 

Laguna Clara

 

Santa Clara, CA

 

 

 

 

1972

 

 

222

 

 

 

10,441,994

 

 

 

22,572,843

 

 

 

17,692,369

 

 

 

10,441,994

 

 

 

40,265,212

 

 

 

50,707,206

 

 

 

(20,593,789

)

 

 

30,113,417

 

 

 

 

Laguna Clara II

 

Santa Clara, CA

 

 

 

 

(F)

 

 

 

 

 

3,200,426

 

 

 

21,360,769

 

 

 

 

 

 

3,200,426

 

 

 

21,360,769

 

 

 

24,561,195

 

 

 

 

 

 

24,561,195

 

 

 

 

Landings at Port Imperial

 

W. New York, NJ

 

 

 

 

1999

 

 

276

 

 

 

27,246,045

 

 

 

37,741,049

 

 

 

17,699,560

 

 

 

27,246,045

 

 

 

55,440,609

 

 

 

82,686,654

 

 

 

(39,896,355

)

 

 

42,790,299

 

 

 

 

Lane

 

Seattle, WA

 

G

 

 

2019

 

 

217

 

 

 

13,142,946

 

 

 

71,940,276

 

 

 

330,375

 

 

 

13,142,946

 

 

 

72,270,651

 

 

 

85,413,597

 

 

 

(10,315,294

)

 

 

75,098,303

 

 

 

 

Lex, The

 

San Jose, CA

 

 

 

 

2017

 

 

387

 

 

 

21,817,512

 

 

 

158,778,598

 

 

 

1,334,350

 

 

 

21,817,512

 

 

 

160,112,948

 

 

 

181,930,460

 

 

 

(27,171,976

)

 

 

154,758,484

 

 

 

 

Liberty Park

 

Braintree, MA

 

 

 

 

2000

 

 

202

 

 

 

5,977,504

 

 

 

26,749,110

 

 

 

8,761,439

 

 

 

5,977,504

 

 

 

35,510,549

 

 

 

41,488,053

 

 

 

(24,345,405

)

 

 

17,142,648

 

 

 

 

Liberty Tower

 

Arlington, VA

 

G

 

 

2008

 

 

235

 

 

 

16,382,822

 

 

 

83,817,078

 

 

 

7,907,595

 

 

 

16,382,822

 

 

 

91,724,673

 

 

 

108,107,495

 

 

 

(41,539,645

)

 

 

66,567,850

 

 

 

 

Lincoln Heights

 

Quincy, MA

 

 

 

 

1991

 

 

336

 

 

 

5,928,400

 

 

 

33,595,262

 

 

 

16,724,209

 

 

 

5,928,400

 

 

 

50,319,471

 

 

 

56,247,871

 

 

 

(42,708,830

)

 

 

13,539,041

 

 

 

 

Lofts at Kendall Square (fka Kendall Square)

 

Cambridge, MA

 

 

 

 

1998

 

 

186

 

 

 

18,696,674

 

 

 

78,445,657

 

 

 

8,134,204

 

 

 

18,696,674

 

 

 

86,579,861

 

 

 

105,276,535

 

 

 

(34,435,985

)

 

 

70,840,550

 

 

 

 

Lofts at Kendall Square ll (fka 249 Third Street)

 

Cambridge, MA

 

G

 

 

2019

 

 

84

 

 

 

4,603,326

 

 

 

44,187,266

 

 

 

51,779

 

 

 

4,603,326

 

 

 

44,239,045

 

 

 

48,842,371

 

 

 

(5,641,481

)

 

 

43,200,890

 

 

 

 

Longacre House

 

New York, NY

 

G

 

 

2000

 

 

293

 

 

 

73,170,045

 

 

 

53,962,510

 

 

 

7,138,240

 

 

 

73,170,045

 

 

 

61,100,750

 

 

 

134,270,795

 

 

 

(32,498,890

)

 

 

101,771,905

 

 

 

 

Longfellow Place

 

Boston, MA

 

G

 

 

1975

 

 

710

 

 

 

38,264,917

 

 

 

132,175,915

 

 

 

102,674,772

 

 

 

38,264,917

 

 

 

234,850,687

 

 

 

273,115,604

 

 

 

(182,527,965

)

 

 

90,587,639

 

 

 

 

Luna Upper Westside

 

Atlanta, GA

 

 

 

 

2020

 

 

345

 

 

 

14,847,420

 

 

 

108,325,394

 

 

 

286,230

 

 

 

14,847,420

 

 

 

108,611,624

 

 

 

123,459,044

 

 

 

(8,732,860

)

 

 

114,726,184

 

 

 

 

Madox

 

Jersey City, NJ

 

G

 

 

2013

 

 

131

 

 

 

9,679,635

 

 

 

64,594,205

 

 

 

1,526,495

 

 

 

9,679,635

 

 

 

66,120,700

 

 

 

75,800,335

 

 

 

(12,710,345

)

 

 

63,089,990

 

 

 

 

Mantena

 

New York, NY

 

G

 

 

2012

 

 

98

 

 

 

22,346,513

 

 

 

61,501,158

 

 

 

1,952,525

 

 

 

22,346,513

 

 

 

63,453,683

 

 

 

85,800,196

 

 

 

(24,407,861

)

 

 

61,392,335

 

 

 

 

Mara Pacific Beach

 

San Diego, CA

 

G

 

 

2020

 

 

172

 

 

 

25,360,682

 

 

 

87,755,429

 

 

 

402,658

 

 

 

25,360,682

 

 

 

88,158,087

 

 

 

113,518,769

 

 

 

(5,771,661

)

 

 

107,747,108

 

 

 

 

Marina 41 (fka Marina Del Rey)

 

Marina Del Rey, CA

 

 

 

 

1973

 

 

623

 

 

 

 

 

 

168,842,442

 

 

 

11,795,707

 

 

 

 

 

 

180,638,149

 

 

 

180,638,149

 

 

 

(72,019,685

)

 

 

108,618,464

 

 

 

 

Mariposa at Playa Del Rey (fka Playa Del Rey)

 

Playa Del Rey, CA

 

 

 

 

2004

 

 

354

 

 

 

60,900,000

 

 

 

89,311,482

 

 

 

8,681,246

 

 

 

60,900,000

 

 

 

97,992,728

 

 

 

158,892,728

 

 

 

(38,697,798

)

 

 

120,194,930

 

 

 

 

 

S-6


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Market Street Village

 

San Diego, CA

 

 

 

 

2006

 

 

229

 

 

 

13,740,000

 

 

 

40,757,301

 

 

 

3,086,270

 

 

 

13,740,000

 

 

 

43,843,571

 

 

 

57,583,571

 

 

 

(25,501,351

)

 

 

32,082,220

 

 

 

 

Marlowe (fka Oakwood Crystal City)

 

Arlington, VA

 

 

 

 

1987

 

 

162

 

 

 

15,400,000

 

 

 

35,474,336

 

 

 

5,248,421

 

 

 

15,400,000

 

 

 

40,722,757

 

 

 

56,122,757

 

 

 

(16,520,673

)

 

 

39,602,084

 

 

 

 

Milano Lofts

 

Los Angeles, CA

 

G

 

 

1925/2006

 

 

99

 

 

 

8,125,216

 

 

 

27,378,784

 

 

 

4,867,971

 

 

 

8,125,216

 

 

 

32,246,755

 

 

 

40,371,971

 

 

 

(13,222,232

)

 

 

27,149,739

 

 

 

 

Mill Creek

 

Milpitas, CA

 

 

 

 

1991

 

 

516

 

 

 

12,858,693

 

 

 

57,168,503

 

 

 

19,425,365

 

 

 

12,858,693

 

 

 

76,593,868

 

 

 

89,452,561

 

 

 

(50,263,493

)

 

 

39,189,068

 

 

 

 

Milo

 

Denver, CO

 

 

 

 

2020

 

 

319

 

 

 

15,957,975

 

 

 

153,331,358

 

 

 

1,032,312

 

 

 

15,957,975

 

 

 

154,363,670

 

 

 

170,321,645

 

 

 

(9,704,486

)

 

 

160,617,159

 

 

 

 

Mosaic at Metro

 

Hyattsville, MD

 

 

 

 

2008

 

 

260

 

 

 

 

 

 

59,580,898

 

 

 

2,012,533

 

 

 

 

 

 

61,593,431

 

 

 

61,593,431

 

 

 

(30,003,658

)

 

 

31,589,773

 

 

 

 

Mountain View Redevelopment

 

Mountain View, CA

 

 

 

 

(F)

 

 

 

 

 

 

 

 

2,589,543

 

 

 

 

 

 

 

 

 

2,589,543

 

 

 

2,589,543

 

 

 

 

 

 

2,589,543

 

 

 

 

Mozaic at Union Station

 

Los Angeles, CA

 

 

 

 

2007

 

 

272

 

 

 

8,500,000

 

 

 

52,529,446

 

 

 

3,490,903

 

 

 

8,500,000

 

 

 

56,020,349

 

 

 

64,520,349

 

 

 

(31,748,137

)

 

 

32,772,212

 

 

 

 

Murray Hill Tower (fka Murray Hill)

 

New York, NY

 

G

 

 

1974

 

 

270

 

 

 

75,800,000

 

 

 

102,705,401

 

 

 

14,991,455

 

 

 

75,800,000

 

 

 

117,696,856

 

 

 

193,496,856

 

 

 

(48,050,917

)

 

 

145,445,939

 

 

 

 

Next on Sixth

 

Los Angeles, CA

 

G

 

 

2017

 

 

398

 

 

 

52,509,906

 

 

 

136,635,650

 

 

 

717,015

 

 

 

52,509,906

 

 

 

137,352,665

 

 

 

189,862,571

 

 

 

(24,161,125

)

 

 

165,701,446

 

 

 

 

North Pier at Harborside

 

Jersey City, NJ

 

 

 

 

2003

 

 

297

 

 

 

4,000,159

 

 

 

94,290,590

 

 

 

12,335,354

 

 

 

4,000,159

 

 

 

106,625,944

 

 

 

110,626,103

 

 

 

(65,149,768

)

 

 

45,476,335

 

 

 

 

Northglen

 

Valencia, CA

 

 

 

 

1988

 

 

234

 

 

 

9,360,000

 

 

 

20,778,553

 

 

 

7,684,511

 

 

 

9,360,000

 

 

 

28,463,064

 

 

 

37,823,064

 

 

 

(20,322,900

)

 

 

17,500,164

 

 

 

 

Northpark

 

Burlingame, CA

 

 

 

 

1972

 

 

510

 

 

 

38,607,000

 

 

 

77,472,217

 

 

 

18,243,943

 

 

 

38,607,000

 

 

 

95,716,160

 

 

 

134,323,160

 

 

 

(51,062,231

)

 

 

83,260,929

 

 

 

 

Oak Park Combined

 

Agoura Hills, CA

 

 

 

 

1989 & 1990

 

 

444

 

 

 

3,390,700

 

 

 

30,517,274

 

 

 

12,750,164

 

 

 

3,390,700

 

 

 

43,267,438

 

 

 

46,658,138

 

 

 

(38,437,510

)

 

 

8,220,628

 

 

 

 

Oaks

 

Santa Clarita, CA

 

 

 

 

2000

 

 

520

 

 

 

23,400,000

 

 

 

61,020,438

 

 

 

14,204,778

 

 

 

23,400,000

 

 

 

75,225,216

 

 

 

98,625,216

 

 

 

(46,957,294

)

 

 

51,667,922

 

 

 

 

Ocean Crest

 

Solana Beach, CA

 

 

 

 

1986

 

 

146

 

 

 

5,111,200

 

 

 

11,910,438

 

 

 

5,469,025

 

 

 

5,111,200

 

 

 

17,379,463

 

 

 

22,490,663

 

 

 

(13,994,857

)

 

 

8,495,806

 

 

 

 

Odin (fka Tallman)

 

Seattle, WA

 

 

 

 

2015

 

 

301

 

 

 

16,807,519

 

 

 

64,519,515

 

 

 

690,891

 

 

 

16,807,519

 

 

 

65,210,406

 

 

 

82,017,925

 

 

 

(18,952,155

)

 

 

63,065,770

 

 

 

 

Olivian at the Realm

 

Lewisville, TX

 

 

 

 

2021

 

 

421

 

 

 

14,854,564

 

 

 

109,310,039

 

 

 

154,217

 

 

 

14,854,564

 

 

 

109,464,256

 

 

 

124,318,820

 

 

 

(7,519,616

)

 

 

116,799,204

 

 

 

 

One Henry Adams

 

San Francisco, CA

 

G

 

 

2016

 

 

241

 

 

 

30,224,393

 

 

 

139,654,146

 

 

 

941,609

 

 

 

30,224,393

 

 

 

140,595,755

 

 

 

170,820,148

 

 

 

(33,716,718

)

 

 

137,103,430

 

 

 

 

One India Street (fka Oakwood Boston)

 

Boston, MA

 

G

 

 

1901

 

 

94

 

 

 

22,200,000

 

 

 

28,672,979

 

 

 

7,157,116

 

 

 

22,200,000

 

 

 

35,830,095

 

 

 

58,030,095

 

 

 

(14,916,926

)

 

 

43,113,169

 

 

 

 

Osprey

 

Atlanta, GA

 

G

 

 

2020

 

 

320

 

 

 

18,121,932

 

 

 

116,950,910

 

 

 

172,416

 

 

 

18,121,932

 

 

 

117,123,326

 

 

 

135,245,258

 

 

 

(8,948,571

)

 

 

126,296,687

 

 

 

 

Pacific Place

 

Los Angeles, CA

 

 

 

 

2008

 

 

430

 

 

 

32,250,000

 

 

 

110,750,000

 

 

 

4,111,677

 

 

 

32,250,000

 

 

 

114,861,677

 

 

 

147,111,677

 

 

 

(42,362,494

)

 

 

104,749,183

 

 

 

 

Packard Building

 

Seattle, WA

 

G

 

 

2010

 

 

61

 

 

 

5,911,041

 

 

 

19,954,959

 

 

 

1,469,814

 

 

 

5,911,041

 

 

 

21,424,773

 

 

 

27,335,814

 

 

 

(6,446,067

)

 

 

20,889,747

 

 

 

 

Parc 77

 

New York, NY

 

G

 

 

1903

 

 

137

 

 

 

40,504,000

 

 

 

18,025,679

 

 

 

7,676,398

 

 

 

40,504,000

 

 

 

25,702,077

 

 

 

66,206,077

 

 

 

(16,735,945

)

 

 

49,470,132

 

 

 

 

Parc Cameron

 

New York, NY

 

G

 

 

1927

 

 

166

 

 

 

37,600,000

 

 

 

9,855,597

 

 

 

8,276,153

 

 

 

37,600,000

 

 

 

18,131,750

 

 

 

55,731,750

 

 

 

(13,345,490

)

 

 

42,386,260

 

 

 

 

Parc Coliseum

 

New York, NY

 

G

 

 

1910

 

 

177

 

 

 

52,654,000

 

 

 

23,045,751

 

 

 

10,565,103

 

 

 

52,654,000

 

 

 

33,610,854

 

 

 

86,264,854

 

 

 

(22,366,482

)

 

 

63,898,372

 

 

 

 

Parc East Towers

 

New York, NY

 

G

 

 

1977

 

 

324

 

 

 

102,163,000

 

 

 

108,989,402

 

 

 

14,803,968

 

 

 

102,163,000

 

 

 

123,793,370

 

 

 

225,956,370

 

 

 

(69,894,282

)

 

 

156,062,088

 

 

 

 

Parc on Powell (fka Parkside at Emeryville)

 

Emeryville, CA

 

G

 

 

2015

 

 

173

 

 

 

16,667,059

 

 

 

65,473,337

 

 

 

1,021,766

 

 

 

16,667,059

 

 

 

66,495,103

 

 

 

83,162,162

 

 

 

(20,020,764

)

 

 

63,141,398

 

 

 

 

Park Connecticut

 

Washington, D.C.

 

 

 

 

2000

 

 

142

 

 

 

13,700,000

 

 

 

59,087,519

 

 

 

3,885,983

 

 

 

13,700,000

 

 

 

62,973,502

 

 

 

76,673,502

 

 

 

(23,160,708

)

 

 

53,512,794

 

 

 

 

Park West (CA)

 

Los Angeles, CA

 

 

 

 

1987/1990

 

 

444

 

 

 

3,033,500

 

 

 

27,302,383

 

 

 

14,094,687

 

 

 

3,033,500

 

 

 

41,397,070

 

 

 

44,430,570

 

 

 

(36,021,598

)

 

 

8,408,972

 

 

 

 

Parkside

 

Union City, CA

 

 

 

 

1979

 

 

208

 

 

 

6,246,700

 

 

 

11,827,453

 

 

 

8,737,771

 

 

 

6,246,700

 

 

 

20,565,224

 

 

 

26,811,924

 

 

 

(16,030,621

)

 

 

10,781,303

 

 

 

 

Pearl, The (WA)

 

Seattle, WA

 

G

 

 

2008

 

 

80

 

 

 

6,972,585

 

 

 

26,527,415

 

 

 

1,403,758

 

 

 

6,972,585

 

 

 

27,931,173

 

 

 

34,903,758

 

 

 

(8,660,957

)

 

 

26,242,801

 

 

 

 

Pearl MDR (fka Oakwood Marina Del Rey)

 

Marina Del Rey, CA

 

G

 

 

1969

 

 

597

 

 

 

 

 

 

120,795,359

 

 

 

13,477,577

 

 

 

 

 

 

134,272,936

 

 

 

134,272,936

 

 

 

(53,218,370

)

 

 

81,054,566

 

 

 

 

Pegasus

 

Los Angeles, CA

 

G

 

 

1949/2003

 

 

322

 

 

 

18,094,052

 

 

 

81,905,948

 

 

 

10,224,057

 

 

 

18,094,052

 

 

 

92,130,005

 

 

 

110,224,057

 

 

 

(42,331,513

)

 

 

67,892,544

 

 

 

 

Portofino

 

Chino Hills, CA

 

 

 

 

1989

 

 

176

 

 

 

3,572,400

 

 

 

14,660,994

 

 

 

4,818,688

 

 

 

3,572,400

 

 

 

19,479,682

 

 

 

23,052,082

 

 

 

(16,141,591

)

 

 

6,910,491

 

 

 

 

Portofino (Val)

 

Valencia, CA

 

 

 

 

1989

 

 

216

 

 

 

8,640,000

 

 

 

21,487,126

 

 

 

6,883,676

 

 

 

8,640,000

 

 

 

28,370,802

 

 

 

37,010,802

 

 

 

(20,895,885

)

 

 

16,114,917

 

 

 

 

Portside Towers

 

Jersey City, NJ

 

G

 

 

1992-1997

 

 

527

 

 

 

22,487,006

 

 

 

96,842,913

 

 

 

30,111,517

 

 

 

22,487,006

 

 

 

126,954,430

 

 

 

149,441,436

 

 

 

(103,497,789

)

 

 

45,943,647

 

 

 

 

Potrero 1010

 

San Francisco, CA

 

G

 

 

2016

 

 

453

 

 

 

40,830,011

 

 

 

181,924,463

 

 

 

1,837,147

 

 

 

40,830,011

 

 

 

183,761,610

 

 

 

224,591,621

 

 

 

(48,837,157

)

 

 

175,754,464

 

 

 

 

Prado (fka Glendale)

 

Glendale, CA

 

 

 

 

1988

 

 

264

 

 

 

 

 

 

67,977,313

 

 

 

7,080,681

 

 

 

 

 

 

75,057,994

 

 

 

75,057,994

 

 

 

(29,571,046

)

 

 

45,486,948

 

 

 

 

Prime, The

 

Arlington, VA

 

 

 

 

2002

 

 

281

 

 

 

34,625,000

 

 

 

77,879,740

 

 

 

8,041,396

 

 

 

34,625,000

 

 

 

85,921,136

 

 

 

120,546,136

 

 

 

(41,828,588

)

 

 

78,717,548

 

 

 

 

Prism at Park Avenue South (fka 400 Park Avenue South)

 

New York, NY

 

G

 

 

2015

 

 

269

 

 

 

76,292,169

 

 

 

171,812,112

 

 

 

403,354

 

 

 

76,292,169

 

 

 

172,215,466

 

 

 

248,507,635

 

 

 

(52,304,125

)

 

 

196,203,510

 

 

 

 

Promenade at Town Center I & II

 

Valencia, CA

 

 

 

 

2001

 

 

564

 

 

 

28,200,000

 

 

 

69,795,915

 

 

 

16,878,188

 

 

 

28,200,000

 

 

 

86,674,103

 

 

 

114,874,103

 

 

 

(54,285,113

)

 

 

60,588,990

 

 

 

 

Providence

 

Bothell, WA

 

 

 

 

2000

 

 

200

 

 

 

3,573,621

 

 

 

19,055,505

 

 

 

6,546,316

 

 

 

3,573,621

 

 

 

25,601,821

 

 

 

29,175,442

 

 

 

(15,360,712

)

 

 

13,814,730

 

 

 

 

 

S-7


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Quarry Hills

 

Quincy, MA

 

 

 

 

2006

 

 

316

 

 

 

26,900,000

 

 

 

84,411,162

 

 

 

5,919,777

 

 

 

26,900,000

 

 

 

90,330,939

 

 

 

117,230,939

 

 

 

(35,205,398

)

 

 

82,025,541

 

 

 

 

Radiant Fairfax Ridge

 

Fairfax, VA

 

 

 

 

2016

 

 

213

 

 

 

7,352,547

 

 

 

63,018,744

 

 

 

599,521

 

 

 

7,352,547

 

 

 

63,618,265

 

 

 

70,970,812

 

 

 

(6,560,278

)

 

 

64,410,534

 

 

 

 

Radius Uptown

 

Denver, CO

 

 

 

 

2017

 

 

372

 

 

 

13,644,960

 

 

 

121,899,084

 

 

 

2,496,966

 

 

 

13,644,960

 

 

 

124,396,050

 

 

 

138,041,010

 

 

 

(24,982,459

)

 

 

113,058,551

 

 

 

 

Redmond Court

 

Bellevue, WA

 

 

 

 

1977

 

 

206

 

 

 

10,300,000

 

 

 

33,488,745

 

 

 

5,065,385

 

 

 

10,300,000

 

 

 

38,554,130

 

 

 

48,854,130

 

 

 

(15,412,602

)

 

 

33,441,528

 

 

 

 

Regency Palms

 

Huntington Beach, CA

 

 

 

 

1969

 

 

310

 

 

 

1,857,400

 

 

 

16,713,254

 

 

 

9,273,705

 

 

 

1,857,400

 

 

 

25,986,959

 

 

 

27,844,359

 

 

 

(21,987,950

)

 

 

5,856,409

 

 

 

 

Reserve at Burlington, The

 

Burlington, MA

 

 

 

 

2019

 

 

270

 

 

 

20,250,000

 

 

 

114,476,423

 

 

 

999,016

 

 

 

20,250,000

 

 

 

115,475,439

 

 

 

135,725,439

 

 

 

(10,286,168

)

 

 

125,439,271

 

 

 

 

Reserve at Clarendon Centre, The

 

Arlington, VA

 

G

 

 

2003

 

 

252

 

 

 

10,500,000

 

 

 

52,812,935

 

 

 

5,641,747

 

 

 

10,500,000

 

 

 

58,454,682

 

 

 

68,954,682

 

 

 

(38,910,541

)

 

 

30,044,141

 

 

 

 

Reserve at Eisenhower, The

 

Alexandria, VA

 

 

 

 

2002

 

 

226

 

 

 

6,500,000

 

 

 

34,585,059

 

 

 

5,968,046

 

 

 

6,500,000

 

 

 

40,553,105

 

 

 

47,053,105

 

 

 

(26,987,506

)

 

 

20,065,599

 

 

 

 

Reserve at Empire Lakes

 

Rancho Cucamonga, CA

 

 

 

 

2005

 

 

467

 

 

 

16,345,000

 

 

 

73,080,670

 

 

 

10,689,811

 

 

 

16,345,000

 

 

 

83,770,481

 

 

 

100,115,481

 

 

 

(47,908,127

)

 

 

52,207,354

 

 

 

 

Reserve at Fairfax Corner

 

Fairfax, VA

 

 

 

 

2001

 

 

652

 

 

 

15,804,057

 

 

 

63,129,050

 

 

 

14,579,441

 

 

 

15,804,057

 

 

 

77,708,491

 

 

 

93,512,548

 

 

 

(53,894,121

)

 

 

39,618,427

 

 

 

 

Reserve at Mountain View (fka Mountain View)

 

Mountain View, CA

 

 

 

 

1965

 

 

180

 

 

 

27,000,000

 

 

 

33,029,605

 

 

 

9,378,941

 

 

 

27,000,000

 

 

 

42,408,546

 

 

 

69,408,546

 

 

 

(18,449,986

)

 

 

50,958,560

 

 

 

 

Reserve at Potomac Yard

 

Alexandria, VA

 

 

 

 

2002

 

 

588

 

 

 

11,918,917

 

 

 

68,862,641

 

 

 

20,648,643

 

 

 

11,918,917

 

 

 

89,511,284

 

 

 

101,430,201

 

 

 

(57,505,652

)

 

 

43,924,549

 

 

 

 

Reserve at Town Center I-III (WA)

 

Mill Creek, WA

 

G

 

 

2001, 2009, 2014

 

 

584

 

 

 

16,768,705

 

 

 

77,623,664

 

 

 

13,119,148

 

 

 

16,768,705

 

 

 

90,742,812

 

 

 

107,511,517

 

 

 

(46,947,259

)

 

 

60,564,258

 

 

 

 

Rianna I & II

 

Seattle, WA

 

G

 

 

2000/2002

 

 

156

 

 

 

4,430,000

 

 

 

29,298,096

 

 

 

3,312,507

 

 

 

4,430,000

 

 

 

32,610,603

 

 

 

37,040,603

 

 

 

(15,749,206

)

 

 

21,291,397

 

 

 

 

Ridgewood Village I&II

 

San Diego, CA

 

 

 

 

1997

 

 

408

 

 

 

11,809,500

 

 

 

34,004,048

 

 

 

7,923,377

 

 

 

11,809,500

 

 

 

41,927,425

 

 

 

53,736,925

 

 

 

(32,573,463

)

 

 

21,163,462

 

 

 

 

Riva Terra I (fka Redwood Shores)

 

Redwood City, CA

 

 

 

 

1986

 

 

304

 

 

 

34,963,355

 

 

 

84,587,658

 

 

 

9,098,327

 

 

 

34,963,355

 

 

 

93,685,985

 

 

 

128,649,340

 

 

 

(38,559,988

)

 

 

90,089,352

 

 

 

 

Riva Terra II (fka Harborside)

 

Redwood City, CA

 

 

 

 

1986

 

 

149

 

 

 

17,136,645

 

 

 

40,536,531

 

 

 

4,332,667

 

 

 

17,136,645

 

 

 

44,869,198

 

 

 

62,005,843

 

 

 

(17,412,318

)

 

 

44,593,525

 

 

 

 

Riverpark

 

Redmond, WA

 

G

 

 

2009

 

 

321

 

 

 

14,355,000

 

 

 

80,894,049

 

 

 

6,065,713

 

 

 

14,355,000

 

 

 

86,959,762

 

 

 

101,314,762

 

 

 

(36,678,117

)

 

 

64,636,645

 

 

 

 

Rivington, The

 

Hoboken, NJ

 

 

 

 

1999

 

 

240

 

 

 

34,340,640

 

 

 

112,112,152

 

 

 

4,792,489

 

 

 

34,340,640

 

 

 

116,904,641

 

 

 

151,245,281

 

 

 

(24,887,916

)

 

 

126,357,365

 

 

 

 

Rivington II, The

 

Hoboken, NJ

 

 

 

 

(F)

 

 

 

 

 

 

 

 

850,870

 

 

 

 

 

 

 

 

 

850,870

 

 

 

850,870

 

 

 

 

 

 

850,870

 

 

 

 

Rosecliff II

 

Quincy, MA

 

 

 

 

2005

 

 

130

 

 

 

4,922,840

 

 

 

30,202,160

 

 

 

2,681,231

 

 

 

4,922,840

 

 

 

32,883,391

 

 

 

37,806,231

 

 

 

(14,457,252

)

 

 

23,348,979

 

 

 

 

Sakura Crossing

 

Los Angeles, CA

 

G

 

 

2009

 

 

230

 

 

 

14,641,990

 

 

 

42,858,010

 

 

 

2,000,425

 

 

 

14,641,990

 

 

 

44,858,435

 

 

 

59,500,425

 

 

 

(20,432,415

)

 

 

39,068,010

 

 

 

 

Saxton

 

Seattle, WA

 

G

 

 

2019

 

 

325

 

 

 

38,805,400

 

 

 

128,652,023

 

 

 

812,621

 

 

 

38,805,400

 

 

 

129,464,644

 

 

 

168,270,044

 

 

 

(19,446,350

)

 

 

148,823,694

 

 

 

 

Seventh & James

 

Seattle, WA

 

G

 

 

1992

 

 

96

 

 

 

663,800

 

 

 

5,974,803

 

 

 

4,722,895

 

 

 

663,800

 

 

 

10,697,698

 

 

 

11,361,498

 

 

 

(9,353,898

)

 

 

2,007,600

 

 

 

 

Sheffield Court

 

Arlington, VA

 

 

 

 

1986

 

 

597

 

 

 

3,342,381

 

 

 

31,337,332

 

 

 

25,857,292

 

 

 

3,342,381

 

 

 

57,194,624

 

 

 

60,537,005

 

 

 

(46,325,259

)

 

 

14,211,746

 

 

 

 

Siena Terrace

 

Lake Forest, CA

 

 

 

 

1988

 

 

356

 

 

 

8,900,000

 

 

 

24,083,024

 

 

 

9,292,173

 

 

 

8,900,000

 

 

 

33,375,197

 

 

 

42,275,197

 

 

 

(26,789,841

)

 

 

15,485,356

 

 

 

 

Skycrest

 

Valencia, CA

 

 

 

 

1999

 

 

264

 

 

 

10,560,000

 

 

 

25,574,457

 

 

 

7,087,323

 

 

 

10,560,000

 

 

 

32,661,780

 

 

 

43,221,780

 

 

 

(23,685,443

)

 

 

19,536,337

 

 

 

 

Skyhouse South

 

Atlanta, GA

 

G

 

 

2014

 

 

320

 

 

 

14,182,277

 

 

 

101,911,177

 

 

 

560,298

 

 

 

14,182,277

 

 

 

102,471,475

 

 

 

116,653,752

 

 

 

(10,186,010

)

 

 

106,467,742

 

 

 

 

Skylark

 

Union City, CA

 

 

 

 

1986

 

 

174

 

 

 

1,781,600

 

 

 

16,731,916

 

 

 

5,933,120

 

 

 

1,781,600

 

 

 

22,665,036

 

 

 

24,446,636

 

 

 

(18,283,892

)

 

 

6,162,744

 

 

 

 

Skyview

 

Rancho Santa Margarita, CA

 

 

 

 

1999

 

 

260

 

 

 

3,380,000

 

 

 

21,952,863

 

 

 

7,296,364

 

 

 

3,380,000

 

 

 

29,249,227

 

 

 

32,629,227

 

 

 

(22,568,433

)

 

 

10,060,794

 

 

 

 

SoMa II

 

San Francisco, CA

 

 

 

 

(F)

 

 

 

 

 

29,406,606

 

 

 

5,921,781

 

 

 

 

 

 

29,406,606

 

 

 

5,921,781

 

 

 

35,328,387

 

 

 

 

 

 

35,328,387

 

 

 

 

Sonterra at Foothill Ranch

 

Foothill Ranch, CA

 

 

 

 

1997

 

 

300

 

 

 

7,503,400

 

 

 

24,048,507

 

 

 

6,847,223

 

 

 

7,503,400

 

 

 

30,895,730

 

 

 

38,399,130

 

 

 

(25,101,574

)

 

 

13,297,556

 

 

 

 

South City Station (fka South San Francisco)

 

San Francisco, CA

 

G

 

 

2007

 

 

368

 

 

 

68,900,000

 

 

 

79,476,861

 

 

 

8,971,334

 

 

 

68,900,000

 

 

 

88,448,195

 

 

 

157,348,195

 

 

 

(34,002,945

)

 

 

123,345,250

 

 

 

 

Southwood

 

Palo Alto, CA

 

 

 

 

1985

 

 

100

 

 

 

6,936,600

 

 

 

14,324,069

 

 

 

7,931,945

 

 

 

6,936,600

 

 

 

22,256,014

 

 

 

29,192,614

 

 

 

(16,836,599

)

 

 

12,356,015

 

 

 

 

Springline

 

Seattle, WA

 

G

 

 

2016

 

 

136

 

 

 

9,163,667

 

 

 

47,910,981

 

 

 

838,294

 

 

 

9,163,667

 

 

 

48,749,275

 

 

 

57,912,942

 

 

 

(11,855,973

)

 

 

46,056,969

 

 

 

 

Square One

 

Seattle, WA

 

 

 

 

2014

 

 

112

 

 

 

7,222,544

 

 

 

26,277,456

 

 

 

325,303

 

 

 

7,222,544

 

 

 

26,602,759

 

 

 

33,825,303

 

 

 

(8,950,176

)

 

 

24,875,127

 

 

 

 

STOA

 

Los Angeles, CA

 

G

 

 

2017

 

 

237

 

 

 

25,326,048

 

 

 

79,976,031

 

 

 

588,847

 

 

 

25,326,048

 

 

 

80,564,878

 

 

 

105,890,926

 

 

 

(14,520,667

)

 

 

91,370,259

 

 

 

 

Summerset Village

 

Chatsworth, CA

 

 

 

 

1985

 

 

280

 

 

 

2,890,450

 

 

 

23,670,889

 

 

 

9,290,561

 

 

 

2,890,450

 

 

 

32,961,450

 

 

 

35,851,900

 

 

 

(28,997,875

)

 

 

6,854,025

 

 

 

 

Ten23 (fka 500 West 23rd Street)

 

New York, NY

 

G

 

 

2011

 

 

111

 

 

 

 

 

 

58,881,873

 

 

 

1,746,694

 

 

 

 

 

 

60,628,567

 

 

 

60,628,567

 

 

 

(22,633,385

)

 

 

37,995,182

 

 

 

 

Terraces, The

 

San Francisco, CA

 

G

 

 

1975

 

 

117

 

 

 

14,087,610

 

 

 

16,314,151

 

 

 

3,018,966

 

 

 

14,087,610

 

 

 

19,333,117

 

 

 

33,420,727

 

 

 

(9,495,519

)

 

 

23,925,208

 

 

 

 

Theo

 

Denver, CO

 

G

 

 

2018

 

 

275

 

 

 

15,322,049

 

 

 

122,105,822

 

 

 

5,254,700

 

 

 

15,322,049

 

 

 

127,360,522

 

 

 

142,682,571

 

 

 

(8,502,526

)

 

 

134,180,045

 

 

 

 

 

S-8


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Third Square

 

Cambridge, MA

 

G

 

 

2008/2009

 

 

 

471

 

 

 

26,767,171

 

 

 

218,822,728

 

 

 

10,776,005

 

 

 

26,767,171

 

 

 

229,598,733

 

 

 

256,365,904

 

 

 

(111,180,199

)

 

 

145,185,705

 

 

 

 

Three20

 

Seattle, WA

 

G

 

 

2013

 

 

 

134

 

 

 

7,030,766

 

 

 

29,005,762

 

 

 

1,087,210

 

 

 

7,030,766

 

 

 

30,092,972

 

 

 

37,123,738

 

 

 

(10,939,955

)

 

 

26,183,783

 

 

 

 

Toscana

 

Irvine, CA

 

 

 

 

1991/1993

 

 

 

563

 

 

 

39,410,000

 

 

 

50,806,072

 

 

 

27,932,212

 

 

 

39,410,000

 

 

 

78,738,284

 

 

 

118,148,284

 

 

 

(55,741,592

)

 

 

62,406,692

 

 

 

 

Town Square at Mark Center I&II

 

Alexandria, VA

 

 

 

 

1996

 

 

 

678

 

 

 

39,928,464

 

 

 

141,208,321

 

 

 

16,912,775

 

 

 

39,928,464

 

 

 

158,121,096

 

 

 

198,049,560

 

 

 

(87,827,875

)

 

 

110,221,685

 

 

 

 

Troy Boston

 

Boston, MA

 

G

 

 

2015

 

 

 

378

 

 

 

34,641,051

 

 

 

181,607,331

 

 

 

3,073,444

 

 

 

34,641,051

 

 

 

184,680,775

 

 

 

219,321,826

 

 

 

(39,487,683

)

 

 

179,834,143

 

 

 

 

Urbana (fka Market Street Landing)

 

Seattle, WA

 

G

 

 

2014

 

 

 

289

 

 

 

12,542,418

 

 

 

75,800,090

 

 

 

3,686,862

 

 

 

12,542,418

 

 

 

79,486,952

 

 

 

92,029,370

 

 

 

(28,693,210

)

 

 

63,336,160

 

 

 

 

Uwajimaya Village

 

Seattle, WA

 

 

 

 

2002

 

 

 

176

 

 

 

8,800,000

 

 

 

22,188,288

 

 

 

7,342,363

 

 

 

8,800,000

 

 

 

29,530,651

 

 

 

38,330,651

 

 

 

(16,380,454

)

 

 

21,950,197

 

 

 

 

Vantage Hollywood

 

Los Angeles, CA

 

 

 

 

1987

 

 

 

298

 

 

 

42,580,326

 

 

 

56,014,674

 

 

 

4,125,563

 

 

 

42,580,326

 

 

 

60,140,237

 

 

 

102,720,563

 

 

 

(20,441,762

)

 

 

82,278,801

 

 

 

 

Veloce

 

Redmond, WA

 

G

 

 

2009

 

 

 

322

 

 

 

15,322,724

 

 

 

76,176,594

 

 

 

4,461,903

 

 

 

15,322,724

 

 

 

80,638,497

 

 

 

95,961,221

 

 

 

(30,895,677

)

 

 

65,065,544

 

 

 

 

Venue at the Promenade

 

Castle Rock, CO

 

 

 

 

2017

 

 

 

312

 

 

 

8,355,048

 

 

 

83,752,689

 

 

 

470,811

 

 

 

8,355,048

 

 

 

84,223,500

 

 

 

92,578,548

 

 

 

(14,700,491

)

 

 

77,878,057

 

 

 

 

Verde Condominium Homes (fka Mission Verde, LLC)

 

San Jose, CA

 

 

 

 

1986

 

 

 

108

 

 

 

5,190,700

 

 

 

9,679,109

 

 

 

5,573,142

 

 

 

5,190,700

 

 

 

15,252,251

 

 

 

20,442,951

 

 

 

(12,283,530

)

 

 

8,159,421

 

 

 

 

Veridian (fka Silver Spring)

 

Silver Spring, MD

 

G

 

 

2009

 

 

 

457

 

 

 

18,539,817

 

 

 

130,407,365

 

 

 

5,763,254

 

 

 

18,539,817

 

 

 

136,170,619

 

 

 

154,710,436

 

 

 

(62,907,818

)

 

 

91,802,618

 

 

 

 

Versailles

 

Woodland Hills, CA

 

 

 

 

1991

 

 

 

253

 

 

 

12,650,000

 

 

 

33,656,292

 

 

 

9,094,333

 

 

 

12,650,000

 

 

 

42,750,625

 

 

 

55,400,625

 

 

 

(29,209,935

)

 

 

26,190,690

 

 

 

 

Versailles (K-Town)

 

Los Angeles, CA

 

 

 

 

2008

 

 

 

225

 

 

 

10,590,975

 

 

 

44,409,025

 

 

 

2,593,220

 

 

 

10,590,975

 

 

 

47,002,245

 

 

 

57,593,220

 

 

 

(23,132,781

)

 

 

34,460,439

 

 

 

 

Victor on Venice

 

Los Angeles, CA

 

G

 

 

2006

 

 

 

115

 

 

 

10,350,000

 

 

 

35,433,437

 

 

 

4,209,804

 

 

 

10,350,000

 

 

 

39,643,241

 

 

 

49,993,241

 

 

 

(21,183,520

)

 

 

28,809,721

 

 

 

 

Villa Solana

 

Laguna Hills, CA

 

 

 

 

1984

 

 

 

272

 

 

 

1,665,100

 

 

 

14,985,677

 

 

 

13,685,294

 

 

 

1,665,100

 

 

 

28,670,971

 

 

 

30,336,071

 

 

 

(25,421,545

)

 

 

4,914,526

 

 

 

 

Village at Del Mar Heights, The (fka Del Mar Heights)

 

San Diego, CA

 

 

 

 

1986

 

 

 

168

 

 

 

15,100,000

 

 

 

40,859,396

 

 

 

4,208,000

 

 

 

15,100,000

 

 

 

45,067,396

 

 

 

60,167,396

 

 

 

(18,327,660

)

 

 

41,839,736

 

 

 

 

Virginia Square

 

Arlington, VA

 

G

 

 

2002

 

 

 

231

 

 

 

 

 

 

85,940,003

 

 

 

6,529,565

 

 

 

 

 

 

92,469,568

 

 

 

92,469,568

 

 

 

(36,782,306

)

 

 

55,687,262

 

 

 

 

Vista 99 (fka Tasman)

 

San Jose, CA

 

 

 

 

2016

 

 

 

554

 

 

 

27,709,329

 

 

 

177,556,948

 

 

 

2,423,476

 

 

 

27,709,329

 

 

 

179,980,424

 

 

 

207,689,753

 

 

 

(48,405,518

)

 

 

159,284,235

 

 

 

 

Vista Del Lago

 

Mission Viejo, CA

 

 

 

 

1986-1988

 

 

 

608

 

 

 

4,525,800

 

 

 

40,736,293

 

 

 

24,220,628

 

 

 

4,525,800

 

 

 

64,956,921

 

 

 

69,482,721

 

 

 

(57,478,601

)

 

 

12,004,120

 

 

 

 

Walden Park

 

Cambridge, MA

 

 

 

 

1966

 

 

 

232

 

 

 

12,448,888

 

 

 

52,044,448

 

 

 

5,522,419

 

 

 

12,448,888

 

 

 

57,566,867

 

 

 

70,015,755

 

 

 

(27,224,023

)

 

 

42,791,732

 

 

 

 

Water Park Towers

 

Arlington, VA

 

 

 

 

1989

 

 

 

362

 

 

 

34,400,000

 

 

 

108,485,859

 

 

 

14,359,832

 

 

 

34,400,000

 

 

 

122,845,691

 

 

 

157,245,691

 

 

 

(49,167,584

)

 

 

108,078,107

 

 

 

 

Watertown Square

 

Watertown, MA

 

G

 

 

2005

 

 

 

134

 

 

 

16,800,000

 

 

 

34,074,056

 

 

 

2,755,801

 

 

 

16,800,000

 

 

 

36,829,857

 

 

 

53,629,857

 

 

 

(14,197,322

)

 

 

39,432,535

 

 

 

 

Weaver, The

 

Austin, TX

 

G

 

 

2020

 

 

 

250

 

 

 

25,405,232

 

 

 

69,552,640

 

 

 

80,225

 

 

 

25,405,232

 

 

 

69,632,865

 

 

 

95,038,097

 

 

 

(5,864,080

)

 

 

89,174,017

 

 

 

 

West 96th

 

New York, NY

 

G

 

 

1987

 

 

 

209

 

 

 

84,800,000

 

 

 

67,055,501

 

 

 

8,473,061

 

 

 

84,800,000

 

 

 

75,528,562

 

 

 

160,328,562

 

 

 

(31,695,180

)

 

 

128,633,382

 

 

 

 

West End Apartments (fka Emerson Place/CRP II)

 

Boston, MA

 

G

 

 

2008

 

 

 

310

 

 

 

469,546

 

 

 

163,123,022

 

 

 

5,993,520

 

 

 

469,546

 

 

 

169,116,542

 

 

 

169,586,088

 

 

 

(84,958,233

)

 

 

84,627,855

 

 

 

 

Westchester at Rockville

 

Rockville, MD

 

 

 

 

2009

 

 

 

192

 

 

 

10,600,000

 

 

 

44,135,207

 

 

 

1,692,757

 

 

 

10,600,000

 

 

 

45,827,964

 

 

 

56,427,964

 

 

 

(17,362,650

)

 

 

39,065,314

 

 

 

 

Westerly

 

Dallas, TX

 

G

 

 

2021

 

 

 

331

 

 

 

11,958,829

 

 

 

79,169,818

 

 

 

335,530

 

 

 

11,958,829

 

 

 

79,505,348

 

 

 

91,464,177

 

 

 

(7,278,523

)

 

 

84,185,654

 

 

 

 

Westmont

 

New York, NY

 

G

 

 

1986

 

 

 

163

 

 

 

64,900,000

 

 

 

61,143,259

 

 

 

7,661,767

 

 

 

64,900,000

 

 

 

68,805,026

 

 

 

133,705,026

 

 

 

(27,260,798

)

 

 

106,444,228

 

 

 

 

Westside

 

Los Angeles, CA

 

 

 

 

2004

 

 

 

204

 

 

 

34,200,000

 

 

 

56,962,630

 

 

 

3,948,110

 

 

 

34,200,000

 

 

 

60,910,740

 

 

 

95,110,740

 

 

 

(23,529,443

)

 

 

71,581,297

 

 

 

 

Westside Barrington (fka Westside Villas III)

 

Los Angeles, CA

 

 

 

 

1999

 

 

 

36

 

 

 

3,060,000

 

 

 

5,538,871

 

 

 

1,243,160

 

 

 

3,060,000

 

 

 

6,782,031

 

 

 

9,842,031

 

 

 

(5,023,466

)

 

 

4,818,565

 

 

 

 

Westside Barry (Westside Villas VI)

 

Los Angeles, CA

 

 

 

 

1989

 

 

 

18

 

 

 

1,530,000

 

 

 

3,023,523

 

 

 

811,372

 

 

 

1,530,000

 

 

 

3,834,895

 

 

 

5,364,895

 

 

 

(2,819,131

)

 

 

2,545,764

 

 

 

 

Westside Beloit (fka Westside Villas I)

 

Los Angeles, CA

 

 

 

 

1999

 

 

 

21

 

 

 

1,785,000

 

 

 

3,233,254

 

 

 

836,921

 

 

 

1,785,000

 

 

 

4,070,175

 

 

 

5,855,175

 

 

 

(3,041,406

)

 

 

2,813,769

 

 

 

 

Westside Bundy (fka Westside Villas II)

 

Los Angeles, CA

 

 

 

 

1999

 

 

 

23

 

 

 

1,955,000

 

 

 

3,541,435

 

 

 

824,134

 

 

 

1,955,000

 

 

 

4,365,569

 

 

 

6,320,569

 

 

 

(3,237,578

)

 

 

3,082,991

 

 

 

 

Westside Butler (fka Westside Villas IV)

 

Los Angeles, CA

 

 

 

 

1999

 

 

 

36

 

 

 

3,060,000

 

 

 

5,539,390

 

 

 

1,347,078

 

 

 

3,060,000

 

 

 

6,886,468

 

 

 

9,946,468

 

 

 

(5,076,540

)

 

 

4,869,928

 

 

 

 

Westside Villas (fka Westside Villas V &VII)

 

Los Angeles, CA

 

 

 

 

1999 & 2001

 

 

 

113

 

 

 

9,605,000

 

 

 

19,983,385

 

 

 

3,194,844

 

 

 

9,605,000

 

 

 

23,178,229

 

 

 

32,783,229

 

 

 

(16,789,962

)

 

 

15,993,267

 

 

 

 

Windridge (CA)

 

Laguna Niguel, CA

 

 

 

 

1989

 

 

 

344

 

 

 

2,662,900

 

 

 

23,985,497

 

 

 

13,661,399

 

 

 

2,662,900

 

 

 

37,646,896

 

 

 

40,309,796

 

 

 

(33,906,750

)

 

 

6,403,046

 

 

 

 

Wisconsin Place

 

Chevy Chase, MD

 

 

 

 

2009

 

 

 

432

 

 

 

 

 

 

172,089,355

 

 

 

2,076,371

 

 

 

 

 

 

174,165,726

 

 

 

174,165,726

 

 

 

(65,458,283

)

 

 

108,707,443

 

 

 

 

Woodleaf

 

Campbell, CA

 

 

 

 

1984

 

 

 

178

 

 

 

8,550,600

 

 

 

16,988,183

 

 

 

7,575,252

 

 

 

8,550,600

 

 

 

24,563,435

 

 

 

33,114,035

 

 

 

(19,366,947

)

 

 

13,747,088

 

 

 

 

Zephyr on the Park

 

Redmond, WA

 

G

 

 

2021

 

 

 

193

 

 

 

15,637,106

 

 

 

89,964,029

 

 

 

245,884

 

 

 

15,637,106

 

 

 

90,209,913

 

 

 

105,847,019

 

 

 

(6,844,304

)

 

 

99,002,715

 

 

 

 

Management Business

 

Chicago, IL

 

 

 

 

(D)

 

 

 

 

 

 

 

 

 

 

 

 

144,428,737

 

 

 

 

 

 

144,428,737

 

 

 

144,428,737

 

 

 

(113,190,150

)

 

 

31,238,587

 

 

 

 

Operating Partnership

 

Chicago, IL

 

 

 

 

(F)

 

 

 

 

 

 

 

 

 

2,867,660

 

 

 

 

 

 

 

 

 

2,867,660

 

 

 

2,867,660

 

 

 

 

 

 

2,867,660

 

 

 

 

Other

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

111,362

 

 

 

 

 

 

111,362

 

 

 

111,362

 

 

 

(95,482

)

 

 

15,880

 

 

 

 

Wholly Owned Unencumbered

 

 

 

 

 

 

 

 

 

 

67,542

 

 

 

4,740,181,596

 

 

 

17,196,859,828

 

 

 

1,873,288,046

 

 

 

4,740,181,596

 

 

 

19,070,147,874

 

 

 

23,810,329,470

 

 

 

(7,664,733,730

)

 

 

16,145,595,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S-9


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Wholly Owned Encumbered:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1111 Belle Pre (fka The Madison)

 

Alexandria, VA

 

G

 

 

2014

 

 

360

 

 

 

18,937,702

 

 

 

94,758,679

 

 

 

1,301,957

 

 

 

18,937,702

 

 

 

96,060,636

 

 

 

114,998,338

 

 

 

(34,860,500

)

 

 

80,137,838

 

 

 

86,361,102

 

2501 Porter

 

Washington, D.C.

 

 

 

 

1988

 

 

202

 

 

 

13,000,000

 

 

 

75,271,179

 

 

 

7,884,211

 

 

 

13,000,000

 

 

 

83,155,390

 

 

 

96,155,390

 

 

 

(34,040,743

)

 

 

62,114,647

 

 

(H)

 

300 East 39th (fka East 39th)

 

New York, NY

 

G

 

 

2001

 

 

254

 

 

 

48,900,000

 

 

 

96,174,639

 

 

 

7,769,517

 

 

 

48,900,000

 

 

 

103,944,156

 

 

 

152,844,156

 

 

 

(40,193,465

)

 

 

112,650,691

 

 

 

63,893,638

 

303 East 83rd (fka Camargue)

 

New York, NY

 

G

 

 

1976

 

 

261

 

 

 

79,400,000

 

 

 

79,122,624

 

 

 

13,844,760

 

 

 

79,400,000

 

 

 

92,967,384

 

 

 

172,367,384

 

 

 

(38,462,652

)

 

 

133,904,732

 

 

(H)

 

425 Broadway

 

Santa Monica, CA

 

G

 

 

2001

 

 

101

 

 

 

12,600,000

 

 

 

34,394,772

 

 

 

4,097,606

 

 

 

12,600,000

 

 

 

38,492,378

 

 

 

51,092,378

 

 

 

(15,477,611

)

 

 

35,614,767

 

 

(H)

 

Artisan Square

 

Northridge, CA

 

 

 

 

2002

 

 

140

 

 

 

7,000,000

 

 

 

20,537,359

 

 

 

2,895,523

 

 

 

7,000,000

 

 

 

23,432,882

 

 

 

30,432,882

 

 

 

(15,715,350

)

 

 

14,717,532

 

 

 

35,644,779

 

Avanti

 

Anaheim, CA

 

 

 

 

1987

 

 

162

 

 

 

12,960,000

 

 

 

18,497,682

 

 

 

4,388,146

 

 

 

12,960,000

 

 

 

22,885,828

 

 

 

35,845,828

 

 

 

(13,934,940

)

 

 

21,910,888

 

 

 

28,058,907

 

Avenir Apartments

 

Boston, MA

 

G

 

 

2009

 

 

241

 

 

 

 

 

 

114,321,619

 

 

 

7,751,473

 

 

 

 

 

 

122,073,092

 

 

 

122,073,092

 

 

 

(46,061,694

)

 

 

76,011,398

 

 

 

850,000

 

City Pointe

 

Fullerton, CA

 

G

 

 

2004

 

 

183

 

 

 

6,863,792

 

 

 

36,476,208

 

 

 

5,576,589

 

 

 

6,863,792

 

 

 

42,052,797

 

 

 

48,916,589

 

 

 

(20,067,743

)

 

 

28,848,846

 

 

 

39,644,941

 

Cleveland House

 

Washington, D.C.

 

 

 

 

1953

 

 

214

 

 

 

18,300,000

 

 

 

66,392,414

 

 

 

7,798,160

 

 

 

18,300,000

 

 

 

74,190,574

 

 

 

92,490,574

 

 

 

(28,821,216

)

 

 

63,669,358

 

 

(H)

 

Elevé

 

Glendale, CA

 

G

 

 

2013

 

 

208

 

 

 

14,080,560

 

 

 

56,419,440

 

 

 

1,584,949

 

 

 

14,080,560

 

 

 

58,004,389

 

 

 

72,084,949

 

 

 

(20,141,393

)

 

 

51,943,556

 

 

 

38,417,797

 

Estancia at Santa Clara (fka Santa Clara)

 

Santa Clara, CA

 

 

 

 

2000

 

 

450

 

 

 

 

 

 

123,759,804

 

 

 

6,477,555

 

 

 

 

 

 

130,237,359

 

 

 

130,237,359

 

 

 

(49,544,280

)

 

 

80,693,079

 

 

(H)

 

Fairchase

 

Fairfax, VA

 

 

 

 

2007

 

 

392

 

 

 

23,500,000

 

 

 

87,722,321

 

 

 

2,935,251

 

 

 

23,500,000

 

 

 

90,657,572

 

 

 

114,157,572

 

 

 

(33,752,961

)

 

 

80,404,611

 

 

(H)

 

Flats at DuPont Circle

 

Washington, D.C.

 

 

 

 

1967

 

 

306

 

 

 

35,200,000

 

 

 

108,768,198

 

 

 

4,979,171

 

 

 

35,200,000

 

 

 

113,747,369

 

 

 

148,947,369

 

 

 

(41,675,966

)

 

 

107,271,403

 

 

(H)

 

Glo

 

Los Angeles, CA

 

G

 

 

2008

 

 

201

 

 

 

16,047,023

 

 

 

48,650,963

 

 

 

4,244,622

 

 

 

16,047,023

 

 

 

52,895,585

 

 

 

68,942,608

 

 

 

(23,712,129

)

 

 

45,230,479

 

 

 

32,872,538

 

Heights on Capitol Hill

 

Seattle, WA

 

G

 

 

2006

 

 

104

 

 

 

5,425,000

 

 

 

21,138,028

 

 

 

2,318,311

 

 

 

5,425,000

 

 

 

23,456,339

 

 

 

28,881,339

 

 

 

(13,336,645

)

 

 

15,544,694

 

 

 

22,598,847

 

Kelvin Court (fka Alta Pacific)

 

Irvine, CA

 

 

 

 

2008

 

 

132

 

 

 

10,752,145

 

 

 

34,846,856

 

 

 

1,280,833

 

 

 

10,752,145

 

 

 

36,127,689

 

 

 

46,879,834

 

 

 

(18,179,103

)

 

 

28,700,731

 

 

 

26,266,190

 

Kenwood Mews

 

Burbank, CA

 

 

 

 

1991

 

 

141

 

 

 

14,100,000

 

 

 

24,662,883

 

 

 

4,497,673

 

 

 

14,100,000

 

 

 

29,160,556

 

 

 

43,260,556

 

 

 

(17,987,698

)

 

 

25,272,858

 

 

 

37,645,358

 

La Terrazza at Colma Station

 

Colma, CA

 

G

 

 

2005

 

 

155

 

 

 

 

 

 

41,251,044

 

 

 

4,821,270

 

 

 

 

 

 

46,072,314

 

 

 

46,072,314

 

 

 

(24,784,283

)

 

 

21,288,031

 

 

 

25,039,995

 

Lindley Apartments

 

Encino, CA

 

 

 

 

2004

 

 

129

 

 

 

5,805,000

 

 

 

25,705,000

 

 

 

3,047,415

 

 

 

5,805,000

 

 

 

28,752,415

 

 

 

34,557,415

 

 

 

(13,227,135

)

 

 

21,330,280

 

 

 

28,056,926

 

Lofts 590

 

Arlington, VA

 

 

 

 

2005

 

 

212

 

 

 

20,100,000

 

 

 

67,909,023

 

 

 

1,634,837

 

 

 

20,100,000

 

 

 

69,543,860

 

 

 

89,643,860

 

 

 

(25,270,231

)

 

 

64,373,629

 

 

 

43,047,692

 

Longview Place

 

Waltham, MA

 

 

 

 

2004

 

 

348

 

 

 

20,880,000

 

 

 

90,255,509

 

 

 

14,729,499

 

 

 

20,880,000

 

 

 

104,985,008

 

 

 

125,865,008

 

 

 

(61,621,009

)

 

 

64,243,999

 

 

 

84,324,510

 

Mark on 8th

 

Seattle, WA

 

G

 

 

2016

 

 

174

 

 

 

23,004,387

 

 

 

51,116,647

 

 

 

631,037

 

 

 

23,004,387

 

 

 

51,747,684

 

 

 

74,752,071

 

 

 

(11,613,846

)

 

 

63,138,225

 

 

(H)

 

Metro on First

 

Seattle, WA

 

G

 

 

2002

 

 

102

 

 

 

8,540,000

 

 

 

12,209,981

 

 

 

4,050,272

 

 

 

8,540,000

 

 

 

16,260,253

 

 

 

24,800,253

 

 

 

(9,137,232

)

 

 

15,663,021

 

 

 

21,503,008

 

Moda

 

Seattle, WA

 

G

 

 

2009

 

 

251

 

 

 

12,649,228

 

 

 

36,842,012

 

 

 

2,688,215

 

 

 

12,649,228

 

 

 

39,530,227

 

 

 

52,179,455

 

 

 

(18,867,144

)

 

 

33,312,311

 

 

(I)

 

Montierra (CA)

 

San Diego, CA

 

 

 

 

1990

 

 

272

 

 

 

8,160,000

 

 

 

29,360,938

 

 

 

11,542,219

 

 

 

8,160,000

 

 

 

40,903,157

 

 

 

49,063,157

 

 

 

(30,150,419

)

 

 

18,912,738

 

 

 

61,056,297

 

Notch

 

Newcastle, WA

 

 

 

 

2020

 

 

158

 

 

 

5,463,324

 

 

 

43,490,989

 

 

 

209,022

 

 

 

5,463,324

 

 

 

43,700,011

 

 

 

49,163,335

 

 

 

(5,297,358

)

 

 

43,865,977

 

 

(H)

 

Old Town Lofts

 

Redmond, WA

 

G

 

 

2014

 

 

149

 

 

 

7,740,467

 

 

 

44,146,181

 

 

 

1,323,622

 

 

 

7,740,467

 

 

 

45,469,803

 

 

 

53,210,270

 

 

 

(14,024,622

)

 

 

39,185,648

 

 

 

35,588,915

 

Olympus Towers

 

Seattle, WA

 

G

 

 

2000

 

 

328

 

 

 

14,752,034

 

 

 

73,335,425

 

 

 

14,449,983

 

 

 

14,752,034

 

 

 

87,785,408

 

 

 

102,537,442

 

 

 

(56,949,584

)

 

 

45,587,858

 

 

 

94,800,450

 

Park Place at San Mateo (fka San Mateo)

 

San Mateo, CA

 

G

 

 

2001

 

 

575

 

 

 

71,900,000

 

 

 

211,907,141

 

 

 

18,068,811

 

 

 

71,900,000

 

 

 

229,975,952

 

 

 

301,875,952

 

 

 

(89,508,506

)

 

 

212,367,446

 

 

(H)

 

Red 160 (fka Redmond Way)

 

Redmond, WA

 

G

 

 

2011

 

 

250

 

 

 

15,546,376

 

 

 

65,320,010

 

 

 

3,100,845

 

 

 

15,546,376

 

 

 

68,420,855

 

 

 

83,967,231

 

 

 

(27,642,178

)

 

 

56,325,053

 

 

(H)

 

Skyhouse Denver

 

Denver, CO

 

G

 

 

2017

 

 

354

 

 

 

13,562,331

 

 

 

126,360,318

 

 

 

1,503,996

 

 

 

13,562,331

 

 

 

127,864,314

 

 

 

141,426,645

 

 

 

(25,694,150

)

 

 

115,732,495

 

 

 

74,226,664

 

SoMa Square Apartments (fka South Market)

 

San Francisco, CA

 

G

 

 

1986

 

 

410

 

 

 

79,900,000

 

 

 

177,316,977

 

 

 

21,165,844

 

 

 

79,900,000

 

 

 

198,482,821

 

 

 

278,382,821

 

 

 

(76,177,456

)

 

 

202,205,365

 

 

(H)

 

Teresina

 

Chula Vista, CA

 

 

 

 

2000

 

 

440

 

 

 

28,600,000

 

 

 

61,916,670

 

 

 

9,132,262

 

 

 

28,600,000

 

 

 

71,048,932

 

 

 

99,648,932

 

 

 

(41,706,770

)

 

 

57,942,162

 

 

 

37,940,000

 

Vintage

 

Ontario, CA

 

 

 

 

2005-2007

 

 

300

 

 

 

7,059,230

 

 

 

47,677,762

 

 

 

5,044,823

 

 

 

7,059,230

 

 

 

52,722,585

 

 

 

59,781,815

 

 

 

(28,688,384

)

 

 

31,093,431

 

 

 

49,162,360

 

Vintage at 425 Broadway (fka Promenade)

 

Santa Monica, CA

 

G

 

 

1934/2001

 

 

60

 

 

 

9,000,000

 

 

 

13,961,523

 

 

 

2,017,699

 

 

 

9,000,000

 

 

 

15,979,222

 

 

 

24,979,222

 

 

 

(6,698,223

)

 

 

18,280,999

 

 

(H)

 

West 54th

 

New York, NY

 

G

 

 

2001

 

 

222

 

 

 

60,900,000

 

 

 

48,193,837

 

 

 

5,292,317

 

 

 

60,900,000

 

 

 

53,486,154

 

 

 

114,386,154

 

 

 

(22,720,803

)

 

 

91,665,351

 

 

 

50,209,568

 

Portfolio/Entity Encumbrances (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

799,609,043

 

Wholly Owned Encumbered

 

 

 

 

 

 

 

 

 

8,941

 

 

 

750,628,599

 

 

 

2,410,192,655

 

 

 

216,080,295

 

 

 

750,628,599

 

 

 

2,626,272,950

 

 

 

3,376,901,549

 

 

 

(1,095,745,422

)

 

 

2,281,156,127

 

 

 

1,816,819,525

 

 

S-10


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

 

Description

 

 

Initial Cost to
Company

 

 

Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)

 

 

Gross Amount Carried at
Close of Period 12/31/22

 

 

 

 

Apartment Name

 

Location

 

Non-Residential
Components

 

 

Date of
Construction

 

Apartment
Units

 

 

Land

 

 

Building &
Fixtures

 

 

Building &
Fixtures

 

 

Land

 

 

Building &
Fixtures (A)

 

 

Total (B)

 

 

Accumulated
Depreciation (C)

 

 

Investment
in Real
Estate, Net at
12/31/22

 

 

Encumbrances

 

Partially Owned Unencumbered:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2300 Elliott

 

Seattle, WA

 

G

 

 

1992

 

 

92

 

 

 

796,800

 

 

 

7,173,725

 

 

 

8,079,953

 

 

 

796,800

 

 

 

15,253,678

 

 

 

16,050,478

 

 

 

(13,410,704

)

 

 

2,639,774

 

 

 

 

Bellevue Meadows

 

Bellevue, WA

 

 

 

 

1983

 

 

180

 

 

 

4,507,100

 

 

 

12,574,814

 

 

 

6,996,090

 

 

 

4,507,100

 

 

 

19,570,904

 

 

 

24,078,004

 

 

 

(15,908,888

)

 

 

8,169,116

 

 

 

 

Canyon Ridge

 

San Diego, CA

 

 

 

 

1989

 

 

162

 

 

 

4,869,448

 

 

 

11,955,064

 

 

 

4,630,428

 

 

 

4,869,448

 

 

 

16,585,492

 

 

 

21,454,940

 

 

 

(13,766,694

)

 

 

7,688,246

 

 

 

 

Country Oaks

 

Agoura Hills, CA

 

 

 

 

1985

 

 

256

 

 

 

6,105,000

 

 

 

29,561,865

 

 

 

8,216,848

 

 

 

6,105,000

 

 

 

37,778,713

 

 

 

43,883,713

 

 

 

(26,756,533

)

 

 

17,127,180

 

 

 

 

Harrison Square (fka Elliot Bay)

 

Seattle, WA

 

G

 

 

1992

 

 

166

 

 

 

7,600,000

 

 

 

35,844,345

 

 

 

6,509,034

 

 

 

7,600,000

 

 

 

42,353,379

 

 

 

49,953,379

 

 

 

(17,983,188

)

 

 

31,970,191

 

 

 

 

Lantern Cove

 

Foster City, CA

 

 

 

 

1985

 

 

232

 

 

 

6,945,000

 

 

 

23,064,976

 

 

 

9,119,269

 

 

 

6,945,000

 

 

 

32,184,245

 

 

 

39,129,245

 

 

 

(23,642,181

)

 

 

15,487,064

 

 

 

 

Radius Koreatown

 

Los Angeles, CA

 

 

 

 

2014/2016

 

 

301

 

 

 

32,494,154

 

 

 

84,645,203

 

 

 

871,171

 

 

 

32,494,154

 

 

 

85,516,374

 

 

 

118,010,528

 

 

 

(22,022,979

)

 

 

95,987,549

 

 

 

 

Rosecliff

 

Quincy, MA

 

 

 

 

1990

 

 

156

 

 

 

5,460,000

 

 

 

15,721,570

 

 

 

5,467,734

 

 

 

5,460,000

 

 

 

21,189,304

 

 

 

26,649,304

 

 

 

(16,448,847

)

 

 

10,200,457

 

 

 

 

Schooner Bay I

 

Foster City, CA

 

 

 

 

1985

 

 

168

 

 

 

5,345,000

 

 

 

20,390,618

 

 

 

8,671,731

 

 

 

5,345,000

 

 

 

29,062,349

 

 

 

34,407,349

 

 

 

(20,233,539

)

 

 

14,173,810

 

 

 

 

Schooner Bay II

 

Foster City, CA

 

 

 

 

1985

 

 

144

 

 

 

4,550,000

 

 

 

18,064,764

 

 

 

7,729,384

 

 

 

4,550,000

 

 

 

25,794,148

 

 

 

30,344,148

 

 

 

(17,946,115

)

 

 

12,398,033

 

 

 

 

St Johns West

 

Austin, TX

 

 

 

 

2020

 

 

297

 

 

 

10,097,109

 

 

 

47,928,229

 

 

 

162,483

 

 

 

10,097,109

 

 

 

48,090,712

 

 

 

58,187,821

 

 

 

(6,385,716

)

 

 

51,802,105

 

 

 

 

Venn at Main

 

Bellevue, WA

 

G

 

 

2016

 

 

350

 

 

 

26,626,497

 

 

 

151,520,448

 

 

 

1,204,708

 

 

 

26,626,497

 

 

 

152,725,156

 

 

 

179,351,653

 

 

 

(32,823,149

)

 

 

146,528,504

 

 

 

 

Virgil Square

 

Los Angeles, CA

 

 

 

 

1979

 

 

142

 

 

 

5,500,000

 

 

 

15,216,613

 

 

 

4,271,846

 

 

 

5,500,000

 

 

 

19,488,459

 

 

 

24,988,459

 

 

 

(12,300,149

)

 

 

12,688,310

 

 

 

 

Partially Owned Unencumbered

 

 

 

 

 

 

 

 

 

2,646

 

 

 

120,896,108

 

 

 

473,662,234

 

 

 

71,930,679

 

 

 

120,896,108

 

 

 

545,592,913

 

 

 

666,489,021

 

 

 

(239,628,682

)

 

 

426,860,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partially Owned Encumbered:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aero Apartments

 

Alameda, CA

 

G

 

 

2021

 

 

200

 

 

 

13,107,242

 

 

 

100,503,088

 

 

 

82,614

 

 

 

13,107,242

 

 

 

100,585,702

 

 

 

113,692,944

 

 

 

(6,598,126

)

 

 

107,094,818

 

 

 

64,664,406

 

Canyon Creek (CA)

 

San Ramon, CA

 

 

 

 

1984

 

 

268

 

 

 

5,425,000

 

 

 

18,812,120

 

 

 

8,724,976

 

 

 

5,425,000

 

 

 

27,537,096

 

 

 

32,962,096

 

 

 

(21,143,889

)

 

 

11,818,207

 

 

 

28,240,084

 

Reverb (fka 9th and W)

 

Washington, D.C.

 

G

 

 

(F)

 

 

 

 

 

 

 

 

88,378,413

 

 

 

 

 

 

 

 

 

88,378,413

 

 

 

88,378,413

 

 

 

 

 

 

88,378,413

 

 

 

43,714,070

 

Partially Owned Encumbered

 

 

 

 

 

 

 

 

 

468

 

 

 

18,532,242

 

 

 

207,693,621

 

 

 

8,807,590

 

 

 

18,532,242

 

 

 

216,501,211

 

 

 

235,033,453

 

 

 

(27,742,015

)

 

 

207,291,438

 

 

 

136,618,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consolidated Investment in Real Estate

 

 

 

 

 

 

 

 

 

79,597

 

 

$

5,630,238,545

 

 

$

20,288,408,338

 

 

$

2,170,106,610

 

 

$

5,630,238,545

 

 

$

22,458,514,948

 

 

$

28,088,753,493

 

 

$

(9,027,849,849

)

 

$

19,060,903,644

 

 

$

1,953,438,085

 

 

(1)
See attached Encumbrances Reconciliation.

 

S-11


Table of Contents

 

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2022

NOTES:

(A)
The balance of furniture & fixtures included in the total investment in real estate amount was $2,352,049,700 as of December 31, 2022.
(B)
The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 2022 was approximately $12.9 billion (unaudited).
(C)
The life to compute depreciation for building is 30 years, for building improvements ranges from 5 to 15 years, for furniture & fixtures, replacements and renovations is 5 to 10 years and for lease intangibles is the average remaining term of each respective lease.
(D)
This asset consists of costs owned by the Management Business acquired/added at various acquisition dates and largely represents furniture, fixtures and equipment and computer equipment and software costs, which are generally depreciated over periods ranging from 3 to 7 years, and leasehold improvements, which are generally depreciated over the term of each respective lease.
(E)
Primarily represents capital expenditures for building improvements, replacements and renovations incurred subsequent to each property’s acquisition date.
(F)
Primarily represents land and/or construction-in-progress on projects either held for future development or projects currently under development.
(G)
A portion of these properties includes and/or will include non-residential components (consisting of retail and/or public parking garage operations).
(H)
See Encumbrances Reconciliation schedule.
(I)
Boot property for Bond Partnership mortgage pool.

 

S-12