EQUITY RESIDENTIAL (EQR) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that EQUITY RESIDENTIAL surfaced in its latest filing.

• The Merger is subject to approval of the issuance of shares by the Company’s shareholders and approval by AvalonBay stockholders.
• Under certain circumstances, the Company could owe substantial termination fees to AvalonBay if the Merger is not completed, including a termination fee of approximately $1.005 billion upon termination of the Merger Agreement in connection with an alternative proposal.
• Each eligible share of AvalonBay Common Stock will be converted into the right to receive 2.793 Common Shares, plus cash in lieu of fractional shares. The exchange ratio will not be adjusted for changes in the market price of either company's stock between signing and completion.
• From May 20, 2026 to July 24, 2026, the implied value of the Merger Consideration ranged from approximately $179.00 to $195.93 per AvalonBay share.May 20, 2026 to July 24, 2026
• Immediately following the Merger, the Board of Trustees will consist of 14 members, 7 current trustees of the Company and 7 current directors of AvalonBay.
• Under the Merger Agreement, the Company is restricted from entering into or amending contracts, acquiring or disposing of assets, incurring indebtedness, incurring capital expenditures, settling litigation, amending organizational documents, declaring dividends, entering new business lines, and investing in third parties.
• Under Maryland Real Estate Investment Trust Law and the Company’s declaration of trust, shareholders are not entitled to appraisal or dissenters’ rights in connection with the Merger.
• Completion of the Merger may trigger change in control or other provisions in certain agreements to which Equity Residential, AvalonBay or their respective subsidiaries are a party.
• Immediately after the Merger, legacy Company shareholders will own approximately 49% of the combined company's common shares, and AvalonBay's legacy stockholders will own approximately 51%.
• The combined company may need to refinance, amend, or obtain waivers for indebtedness of the Company and AvalonBay following the Merger. Completion of the Merger is not conditioned on completing such financing transactions.
• Goodwin Procter LLP expected to provide opinion that AvalonBay qualified as REIT from taxable year ended Dec 31, 1994 through pre-Merger.December 31, 1994
• DLA Piper LLP (US) expected to provide opinion that the Company qualified as REIT from taxable year ended Dec 31, 1992 through post-Merger.December 31, 1992