AvalonBay to Merge With Equity Residential
CHICAGO & ARLINGTON, VA — Equity Residential and AvalonBay Communities announced an agreement to combine in an all-stock merger of equals creating one of the country’s leading apartment rental companies. 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.
AvalonBay, based in Arlington, has interest in 319 apartment communities containing 98,271 apartment homes in 11 states and the District of Columbia, of which 25 communities were under development. Equity Residential, based in Chicago, operates numerous apartment complexes in the DC metro area, Maryland and Virginia. The company manages 312 properties with a total of 85,211 apartment units.
Benjamin Schall, Chief Executive Officer and President of AvalonBay Communities, said, “This combination creates a new and fundamentally stronger company with differentiated capabilities that will drive structurally superior cash flow generation, earnings and dividend growth, and value for shareholders. As one of the country’s leading developers of new apartments across our regions, we will directly increase the supply of both market rate and affordable housing. Drawing on the foundational strengths and industry-leading teams across both of our organizations, our ambition is to redefine leadership in rental housing for the benefit of residents, associates, and shareholders.”
“We are excited to partner with AvalonBay to continue Equity Residential’s history of relentlessly seeking opportunities to create value for shareholders,” said Mark J. Parrell, Equity Residential’s President and CEO. “The combined company’s investors will benefit from accelerated growth from increased investment in operational innovation; a larger, self-funded development platform; and the variety of other value creation opportunities that world class scale affords. This, together with our similar cultures that prioritize exceeding the expectations of our employees and residents, positions the combined company to create exceptional value for its shareholders, customers and employees.”
Leading Operating Platform
- Tech‑Enabled Efficiency: Combined investments in AI, automation, and centralized services, coupled with increased portfolio scale, to drive margin expansion and enhance the resident experience
- Data‑Driven Insights: Unmatched scale to create a rich data ecosystem to optimize operational and portfolio allocation decisions
- Proximity Benefits: Further unlocks neighborhood-based operations and centralized services, reducing cost‑to‑serve and increasing Net Operating Income
- Resident-Centered Operations: Locally based professional teams who live and work in the markets they serve — delivering responsive, high-quality service backed by the resources and technology of a scaled organization
Leading Development Platform
- Embedded Growth: Currently $4.4 billion under construction (10,800 apartments) across 32 communities, including over 50% with an affordable or mixed-income component
- Accelerated Growth Engine: $4.2 billion development rights pipeline with expectation to meaningfully increase annual new development start activity
- Community Impact: Each new development provides needed housing, supports local jobs and suppliers, and expands the property tax base for essential public services and infrastructure
Benjamin Schall, President and Chief Executive Officer of AvalonBay, will serve as President and Chief Executive Officer and Trustee of the combined company. Mark J. Parrell, who has served as Chief Executive Officer of Equity Residential for eight years and at the company for 27 years, will retire at the transaction close, having built Equity Residential into one of the country’s premier apartment companies.
The full management team will be announced prior to closing and is expected to include substantial representation from both companies. Long-standing mutual respect between the two organizations creates a strong foundation for successful integration. Deep bench strength across both companies provides for succession planning and the ability to connect key talent with the most important strategic initiatives.
The combined company will have dual headquarters in Arlington, VA and Chicago, IL and intends to have a meaningful and ongoing presence in both locations. The company will operate under a new name to be announced at closing.
