What will AVB stockholders receive in the merger?

Each share of AVB common stock will be converted into 2.793 newly issued EQR common shares, plus cash in lieu of any fractional shares. The transaction is all-stock with no cash consideration, so the value received will fluctuate with EQR's share price until closing. Equity awards are converted using the same exchange ratio.

What are the expected synergies and how do they affect earnings?

Management estimates $175 million of gross annual operating synergies, made up of $50 million in corporate overhead, $65 million in property management overhead, and $60 million in portfolio NOI. After about $50 million of real estate tax reassessments, run-rate net synergies are about $125 million, expected to be fully in place within about 18 months. The companies say the merger will be accretive to core FFO for both AVB and EQR shareholders, based on the midpoint of 2026 guidance on a full run-rate basis and subject to final accounting adjustments.

What happens to dividends before the deal closes?

Both companies may pay regular quarterly dividends without the other's consent, up to $1.78 per share for AVB and $0.7025 per share for EQR, plus amounts needed to maintain REIT status. The companies have agreed to align record and payment dates starting with the Q3 2026 dividend. The combined company expects an initial annualized dividend of $2.81 per share.

What are the main risks that could prevent the deal from closing?

Closing requires approval from AVB stockholders and EQR shareholders, an effective Form S-4, NYSE listing approval, and no court or governmental order blocking the merger. Each company must also receive a tax opinion that the merger is a tax-free reorganization and a REIT status opinion. Either party can terminate if the deal is not completed by May 20, 2027, or in other specified situations, and a termination fee of about $1.0 billion or more may be payable by either side. The forward-looking statements also flag integration risk, disruption to operations, and litigation.

Who will lead the combined company?

Steve Sterrett, currently EQR's lead independent trustee, will become Chairman, and AVB CEO Benjamin Schall will become President and CEO. The 14-member board will include seven members from each legacy board, including David Neithercut and Timothy Naughton. EQR CEO Mark Parrell is expected to retire at closing, and the full management team will be announced before closing.

AVB 8-K: Material Agreements & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed May 21, 2026. Cited figures are marked; the original filing is the authoritative source.

On May 20, 2026, AvalonBay Communities (AVB) and Equity Residential (EQR) signed a definitive Agreement and Plan of Merger for an all-stock merger of equals.

Each AVB share converts into 2.793 EQR common shares, and AVB holders will own about 51.2% of the combined company on a fully diluted basis, with EQR holders owning about 48.8%. The combined company would have a pro forma equity market capitalization of roughly $52 billion^a, an enterprise value of about $69 billion, and more than 180,000 apartment homes. Management projects $175 million of gross operating synergies and $125 million of net run-rate synergies after real estate tax reassessments, and says the deal will be accretive to both companies' core FFO.

The filing also says the combined company expects an initial annualized dividend of $2.81^b per share, equal to EQR's current dividend and above AVB's current yield. Governance and leadership are set at closing. The board will have 14 members, seven from each legacy board.

Steve Sterrett, currently EQR's lead independent trustee, becomes chairman, and AVB CEO Benjamin Schall becomes CEO. EQR CEO Mark Parrell is slated to retire at closing. The company will be dual-headquartered in Arlington, VA and Chicago, IL and will adopt a new name to be announced before closing.

Closing is expected in the second half of 2026, subject to stockholder approval at AVB and shareholder approval at EQR, an effective Form S-4, NYSE listing approval, and tax opinions that the merger qualifies as a tax-free reorganization and that each company retains REIT status. The agreement includes a termination fee of about $1.070 billion^c payable by AVB and about $1.005 billion payable by EQR in specified circumstances, capped at the amount that would not jeopardize REIT status for the year. Either party may terminate if the merger is not completed by May 20, 2027.

Until closing, both companies are restricted from paying dividends beyond specified amounts: AVB at up to $1.78 per quarter and EQR at up to $0.7025^d per quarter. The companies also agreed to align dividend record and payment dates starting with the Q3 2026 dividend. For AVB holders, the deal is a stock exchange with no cash consideration, so the value they receive will move with EQR's share price until closing.

02—Key points

Key Highlights

Exchange ratio of 2.793 EQR common shares for each AVB common share; AVB holders own about 51.2% of the combined company and EQR holders about 48.8% (fully diluted).
Pro forma equity market capitalization of about $52 billion and enterprise value of about $69 billion, with more than 180,000 apartment homes.
Projected $175 million in gross operating synergies ($50M corporate overhead, $65M property management overhead, $60M portfolio NOI), or $125 million net after about $50 million of real estate tax reassessments.
Initial annualized dividend of $2.81 per share, equal to EQR's current dividend and above AVB's current yield; both companies must align dividend record and payment dates from Q3 2026.
Leadership at close: Steve Sterrett as Chairman, Benjamin Schall as CEO, a 14-member board split evenly between the two legacy boards, and dual headquarters in Arlington, VA and Chicago, IL under a new name.
Termination fees of about $1.070 billion (AVB payable) and $1.005 billion (EQR payable), each capped at the amount that would not jeopardize REIT status; outside date of May 20, 2027.
Closing expected in 2H 2026, subject to stockholder and shareholder votes, an effective S-4, NYSE listing approval, and tax and REIT status opinions; the combined company cites $4.4 billion of development underway (about 10,800 apartments) and a $4.2 billion development rights pipeline.

03—Questions

Frequently Asked Questions

What will AVB stockholders receive in the merger?
Each share of AVB common stock will be converted into 2.793 newly issued EQR common shares, plus cash in lieu of any fractional shares. The transaction is all-stock with no cash consideration, so the value received will fluctuate with EQR's share price until closing. Equity awards are converted using the same exchange ratio.
What are the expected synergies and how do they affect earnings?
Management estimates $175 million of gross annual operating synergies, made up of $50 million in corporate overhead, $65 million in property management overhead, and $60 million in portfolio NOI. After about $50 million of real estate tax reassessments, run-rate net synergies are about $125 million, expected to be fully in place within about 18 months. The companies say the merger will be accretive to core FFO for both AVB and EQR shareholders, based on the midpoint of 2026 guidance on a full run-rate basis and subject to final accounting adjustments.
What happens to dividends before the deal closes?
Both companies may pay regular quarterly dividends without the other's consent, up to $1.78 per share for AVB and $0.7025 per share for EQR, plus amounts needed to maintain REIT status. The companies have agreed to align record and payment dates starting with the Q3 2026 dividend. The combined company expects an initial annualized dividend of $2.81 per share.
What are the main risks that could prevent the deal from closing?
Closing requires approval from AVB stockholders and EQR shareholders, an effective Form S-4, NYSE listing approval, and no court or governmental order blocking the merger. Each company must also receive a tax opinion that the merger is a tax-free reorganization and a REIT status opinion. Either party can terminate if the deal is not completed by May 20, 2027, or in other specified situations, and a termination fee of about $1.0 billion or more may be payable by either side. The forward-looking statements also flag integration risk, disruption to operations, and litigation.
Who will lead the combined company?
Steve Sterrett, currently EQR's lead independent trustee, will become Chairman, and AVB CEO Benjamin Schall will become President and CEO. The 14-member board will include seven members from each legacy board, including David Neithercut and Timothy Naughton. EQR CEO Mark Parrell is expected to retire at closing, and the full management team will be announced before closing.

04—Continue

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