Equity Residential, AvalonBay to Merge for $52B Apartment REIT

Apartment REITs Equity Residential and AvalonBay Communities, Inc. on Thursday announced a definitive agreement to combine in an all-stock merger of equals. The new company will have a pro forma equity market capitalization of approximately $52 billion and a total enterprise value of approximately $69 billion, with more than 180,000 rental apartments and nearly 11,000 units in the construction pipeline.

Under the agreement, AvalonBay shareholders will own approximately 51.2% of the combined company and Equity Residential shareholders will own 48.8% on a fully diluted basis. AvalonBay president and CEO Benjamin Schall will lead the combined company, which will have dual headquarters in Chicago and Arlington, VA. Mark J. Parrell, who has served as CEO of Equity Residential for eight years and at the company for 27 years, will retire at the transaction close.

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

The board of trustees will initially consist of seven existing trustees of Equity Residential and seven existing directors of AvalonBay. Steve Sterrett, current lead independent trustee of Equity Residential, will serve as chairman. David Neithercut, current non-executive chair of Equity Residential, and Tim Naughton, current non-executive chairman of AvalonBay, will each serve as Trustees of the combined company.

The merger is expected to close in the second half of 2026, pending approval by shareholders of both REITs. At that time, the name of the combined company will be announced.

Goldman Sachs is serving as lead financial advisor to AvalonBay and Goodwin Procter LLP is serving as legal advisor to AvalonBay. J.P. Morgan and Wells Fargo are also serving as financial advisors to AvalonBay.

Morgan Stanley and Centerview Partners LLC are serving as lead financial advisors to Equity Residential and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Equity Residential. BofA Securities is also serving as a financial advisor to Equity Residential.

Pictured: Equity Residential’s Mantena property in Midtown Manhattan.

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