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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021

☐	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

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Equity Residential Yes ☐ No ☒	ERP Operating Limited Partnership Yes ☐ No ☒

The number of EQR Common Shares of Beneficial Interest, $0.01 par value, outstanding on October 22, 2021 was 375,016,222.


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EXPLANATORY NOTE

This report combines the reports on Form 10-Q for the quarterly period ended September 30, 2021 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:

EQR is the general partner of, and as of September 30, 2021 owned an approximate 96.7% ownership interest in, ERPOP. The remaining 3.3% 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-Q 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 I, Item 4, 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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TABLE OF CONTENTS

	PAGE

PART I.

Item 1. Financial Statements of Equity Residential:

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	2

Consolidated Statements of Operations and Comprehensive Income for the nine months and quarters ended September 30, 2021 and 2020	3

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	5

Consolidated Statements of Changes in Equity for the nine months and quarters ended September 30, 2021 and 2020	8

Financial Statements of ERP Operating Limited Partnership:

Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	10

Consolidated Statements of Operations and Comprehensive Income for the nine months and quarters ended September 30, 2021 and 2020	11

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	13

Consolidated Statements of Changes in Capital for the nine months and quarters ended September 30, 2021 and 2020	16

Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited Partnership	18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3. Quantitative and Qualitative Disclosures about Market Risk	51

Item 4. Controls and Procedures	51

PART II.

Item 1. Legal Proceedings	52

Item 1A. Risk Factors	52

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 3. Defaults Upon Senior Securities	52

Item 4. Mine Safety Disclosures	52

Item 5. Other Information	52

Item 6. Exhibits	52


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EQUITY RESIDENTIAL

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share amounts)

(Unaudited)

	September 30,			December 31,
	2021			2020
ASSETS
Land	$	5,779,686		$	5,785,367
Depreciable property		21,840,344			20,920,654
Projects under development		163,659			411,134
Land held for development		82,026			86,170
Investment in real estate		27,865,715			27,203,325
Accumulated depreciation		(8,260,846	)		(7,859,657	)
Investment in real estate, net		19,604,869			19,343,668
Investments in unconsolidated entities		79,429			52,782
Cash and cash equivalents		39,707			42,591
Restricted deposits		187,042			57,137
Right-of-use assets		477,693			499,287
Other assets		274,275			291,426
Total assets	$	20,663,015		$	20,286,891

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,281,165		$	2,293,890
Notes, net		5,833,483			5,335,536
Line of credit and commercial paper		30,000			414,830
Accounts payable and accrued expenses		166,522			107,366
Accrued interest payable		56,777			65,896
Lease liabilities		313,361			329,130
Other liabilities		350,201			345,064
Security deposits		64,617			60,480
Distributions payable		233,306			232,262
Total liabilities		9,329,432			9,184,454

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		459,933			338,951
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 September 30, 2021 and December 31, 2020		37,280			37,280
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 375,002,588 shares issued and outstanding as of September 30, 2021 and 372,302,000 shares issued and outstanding as of December 31, 2020		3,750			3,723
Paid in capital		9,131,078			9,128,599
Retained earnings		1,527,115			1,399,715
Accumulated other comprehensive income (loss)		(36,666	)		(43,666	)
Total shareholders’ equity		10,662,557			10,525,651
Noncontrolling Interests:
Operating Partnership		208,955			233,162
Partially Owned Properties		2,138			4,673
Total Noncontrolling Interests		211,093			237,835
Total equity		10,873,650			10,763,486
Total liabilities and equity	$	20,663,015		$	20,286,891

See accompanying notes


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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
REVENUES
Rental income	$	1,818,867		$	1,958,270		$	623,206		$	622,433

EXPENSES
Property and maintenance		341,261			333,333			116,461			113,065
Real estate taxes and insurance		297,780			288,043			96,909			95,273
Property management		74,357			71,513			23,772			20,196
General and administrative		43,102			37,212			13,041			10,859
Depreciation		616,032			619,003			215,397			200,605
Total expenses		1,372,532			1,349,104			465,580			439,998

Net gain (loss) on sales of real estate properties		587,623			352,218			363,928			(25	)

Operating income		1,033,958			961,384			521,554			182,410

Interest and other income		25,293			4,006			973			535
Other expenses		(10,908	)		(8,324	)		(3,456	)		(4,097	)
Interest:
Expense incurred, net		(202,733	)		(248,349	)		(68,251	)		(80,874	)
Amortization of deferred financing costs		(6,172	)		(6,253	)		(2,048	)		(2,101	)
Income before income and other taxes, income (loss) from investments in unconsolidated entities and net gain (loss) on sales of land parcels		839,438			702,464			448,772			95,873
Income and other tax (expense) benefit		(679	)		(502	)		(284	)		(262	)
Income (loss) from investments in unconsolidated entities		(3,028	)		(2,445	)		(1,156	)		(246	)
Net gain (loss) on sales of land parcels		5			—			—			—
Net income		835,736			699,517			447,332			95,365
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(27,903	)		(24,624	)		(14,847	)		(3,376	)
Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Net income attributable to controlling interests		805,876			660,780			431,951			91,286
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
Net income available to Common Shares	$	803,558		$	658,462		$	431,178		$	90,513

Earnings per share – basic:
Net income available to Common Shares	$	2.15		$	1.77		$	1.15		$	0.24
Weighted average Common Shares outstanding		373,474			371,749			374,308			371,869

Earnings per share – diluted:
Net income available to Common Shares	$	2.14		$	1.77		$	1.15		$	0.24
Weighted average Common Shares outstanding		387,642			385,973			388,374			385,652

See accompanying notes


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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
Comprehensive income:
Net income	$	835,736		$	699,517		$	447,332		$	95,365
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		—			(1,190	)		—			—
Losses reclassified into earnings from other comprehensive income		7,000			17,275			2,363			5,877
Other comprehensive income (loss)		7,000			16,085			2,363			5,877
Comprehensive income		842,736			715,602			449,695			101,242
Comprehensive (income) attributable to Noncontrolling Interests		(30,100	)		(39,316	)		(15,459	)		(4,290	)
Comprehensive income attributable to controlling interests	$	812,636		$	676,286		$	434,236		$	96,952

See accompanying notes


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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	835,736		$	699,517
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		616,032			619,003
Amortization of deferred financing costs		6,172			6,253
Amortization of above/below market lease intangibles		(154	)		(53	)
Amortization of discounts and premiums on debt		3,934			3,834
Amortization of deferred settlements on derivative instruments		6,991			17,266
Amortization of right-of-use assets		10,286			8,785
Write-off of pursuit costs		3,557			4,864
(Income) loss from investments in unconsolidated entities		3,028			2,445
Distributions from unconsolidated entities – return on capital		—			100
Net (gain) loss on sales of real estate properties		(587,623	)		(352,218	)
Net (gain) loss on sales of land parcels		(5	)		—
Realized/unrealized (gain) loss on derivative instruments		—			50
Realized (gain) loss on sale of investment securities		(23,432	)		—
Compensation paid with Company Common Shares		21,919			18,275
Other operating activities, net		—			1,805
Changes in assets and liabilities:
(Increase) decrease in other assets		16,269			(30,197	)
Increase (decrease) in accounts payable and accrued expenses		69,170			54,418
Increase (decrease) in accrued interest payable		(9,119	)		(1,183	)
Increase (decrease) in lease liabilities		(4,112	)		(1,650	)
Increase (decrease) in other liabilities		5,427			(8,381	)
Increase (decrease) in security deposits		4,137			(8,609	)
Net cash provided by operating activities		978,213			1,034,324
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions		(1,022,275	)		(48,898	)
Investment in real estate – development/other		(172,850	)		(157,778	)
Capital expenditures to real estate		(107,706	)		(92,123	)
Non-real estate capital additions		(1,251	)		(19,290	)
Interest capitalized for real estate and unconsolidated entities under development		(12,365	)		(6,880	)
Proceeds from disposition of real estate, net		1,014,328			747,600
Investments in unconsolidated entities		(31,081	)		(6,664	)
Distributions from unconsolidated entities – return of capital		4			1,000
Purchase of investment securities and other investments		(167,791	)		(509	)
Proceeds from sale of investment securities		191,398			—
Net cash provided by (used for) investing activities		(309,589	)		416,458

See accompanying notes


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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021			2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs	$	(6,447	)	$	(2,923	)
Mortgage notes payable, net:
Proceeds		51,298			505,375
Lump sum payoffs		(59,880	)		(127,767	)
Scheduled principal repayments		(5,570	)		(5,821	)
Notes, net:
Proceeds		497,470			—
Line of credit and commercial paper:
Line of credit proceeds		—			1,870,000
Line of credit repayments		—			(1,890,000	)
Commercial paper proceeds		4,305,170			6,726,167
Commercial paper repayments		(4,690,000	)		(7,724,000	)
Proceeds from (payments on) settlement of derivative instruments		—			(1,240	)
Finance ground lease principal payments		(349	)		—
Proceeds from Employee Share Purchase Plan (ESPP)		3,455			3,556
Proceeds from exercise of options		68,807			11,426
Payment of offering costs		(267	)		—
Other financing activities, net		(31	)		(31	)
Contributions – Noncontrolling Interests – Partially Owned Properties		—			417
Contributions – Noncontrolling Interests – Operating Partnership		—			12
Distributions:
Common Shares		(674,531	)		(659,668	)
Preferred Shares		(2,318	)		(2,318	)
Noncontrolling Interests – Operating Partnership		(23,949	)		(24,440	)
Noncontrolling Interests – Partially Owned Properties		(4,461	)		(11,312	)
Net cash provided by (used for) financing activities		(541,603	)		(1,332,567	)
Net increase (decrease) in cash and cash equivalents and restricted deposits		127,021			118,215
Cash and cash equivalents and restricted deposits, beginning of period		99,728			116,999
Cash and cash equivalents and restricted deposits, end of period	$	226,749		$	235,214

Cash and cash equivalents and restricted deposits, end of period
Cash and cash equivalents	$	39,707		$	178,333
Restricted deposits		187,042			56,881
Total cash and cash equivalents and restricted deposits, end of period	$	226,749		$	235,214

See accompanying notes


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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021			2020
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	199,799		$	223,703
Net cash paid (received) for income and other taxes	$	1,040		$	(1,092	)
Amortization of deferred financing costs:
Investment in real estate, net	$	(227	)	$	(180	)
Other assets	$	1,754		$	1,755
Mortgage notes payable, net	$	1,702		$	1,337
Notes, net	$	2,943		$	3,341
Amortization of discounts and premiums on debt:
Mortgage notes payable, net	$	2,069		$	1,791
Notes, net	$	1,865		$	2,043
Amortization of deferred settlements on derivative instruments:
Other liabilities	$	(9	)	$	(9	)
Accumulated other comprehensive income	$	7,000		$	17,275
Write-off of pursuit costs:
Investment in real estate, net	$	3,000		$	4,621
Other assets	$	533		$	219
Accounts payable and accrued expenses	$	24		$	24
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities	$	2,062		$	1,474
Other liabilities	$	966		$	971
Realized/unrealized (gain) loss on derivative instruments:
Other liabilities	$	—		$	1,240
Accumulated other comprehensive income	$	—		$	(1,190	)
Interest capitalized for real estate and unconsolidated entities under development:
Investment in real estate, net	$	(12,260	)	$	(6,880	)
Investments in unconsolidated entities	$	(105	)	$	—
Investments in unconsolidated entities:
Investment in real estate, net	$	967		$	—
Investments in unconsolidated entities	$	(30,038	)	$	(5,164	)
Other liabilities	$	(2,010	)	$	(1,500	)
Debt financing costs:
Other assets	$	228		$	(231	)
Mortgage notes payable, net	$	(2,344	)	$	(2,692	)
Notes, net	$	(4,331	)	$	—
Right-of-use assets and lease liabilities initial measurement and reclassifications:
Right-of-use assets	$	11,308		$	—
Lease liabilities	$	(11,308	)	$	—
Non-cash share distribution from unconsolidated entities:
Investments in unconsolidated entities	$	1,430		$	—
Other assets	$	(1,430	)	$	—

See accompanying notes


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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
SHAREHOLDERS’ EQUITY
PREFERRED SHARES
Balance, beginning of period	$	37,280		$	37,280		$	37,280		$	37,280
Balance, end of period	$	37,280		$	37,280		$	37,280		$	37,280
COMMON SHARES, $0.01 PAR VALUE
Balance, beginning of period	$	3,723		$	3,717		$	3,744		$	3,722
Conversion of OP Units into Common Shares		11			1			—			—
Exercise of share options		14			2			6			—
Employee Share Purchase Plan (ESPP)		1			—			—			—
Share-based employee compensation expense:
Restricted shares		1			2			—			—
Balance, end of period	$	3,750		$	3,722		$	3,750		$	3,722
PAID IN CAPITAL
Balance, beginning of period	$	9,128,599		$	8,965,577		$	9,110,121		$	9,118,332
Common Share Issuance:
Conversion of OP Units into Common Shares		68,246			3,912			1,597			57
Exercise of share options		68,793			11,424			29,178			104
Employee Share Purchase Plan (ESPP)		3,454			3,556			788			1,197
Share-based employee compensation expense:
Restricted shares		6,571			9,236			1,758			1,984
Share options		2,541			1,819			565			526
ESPP discount		798			626			165			210
Offering costs		(267	)		—			(267	)		—
Supplemental Executive Retirement Plan (SERP)		(1,335	)		(395	)		722			111
Change in market value of Redeemable Noncontrolling Interests – Operating Partnership		(119,237	)		169,825			(17,271	)		41,072
Adjustment for Noncontrolling Interests ownership in Operating Partnership		(27,085	)		438			3,722			2,425
Balance, end of period	$	9,131,078		$	9,166,018		$	9,131,078		$	9,166,018
RETAINED EARNINGS
Balance, beginning of period	$	1,399,715		$	1,386,495		$	1,321,875		$	1,505,694
Net income attributable to controlling interests		805,876			660,780			431,951			91,286
Common Share distributions		(676,158	)		(673,019	)		(225,938	)		(224,269	)
Preferred Share distributions		(2,318	)		(2,318	)		(773	)		(773	)
Balance, end of period	$	1,527,115		$	1,371,938		$	1,527,115		$	1,371,938
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of period	$	(43,666	)	$	(77,563	)	$	(39,029	)	$	(67,355	)
Accumulated other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		—			(1,190	)		—			—
Losses reclassified into earnings from other comprehensive income		7,000			17,275			2,363			5,877
Balance, end of period	$	(36,666	)	$	(61,478	)	$	(36,666	)	$	(61,478	)

DISTRIBUTIONS
Distributions declared per Common Share outstanding	$	1.8075		$	1.8075		$	0.6025		$	0.6025

See accompanying notes


Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
NONCONTROLLING INTERESTS
OPERATING PARTNERSHIP
Balance, beginning of period	$	233,162		$	227,837		$	205,691		$	235,169
Issuance of restricted units to Noncontrolling Interests		—			12			—			—
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner		(68,257	)		(3,913	)		(1,597	)		(57	)
Equity compensation associated with Noncontrolling Interests		14,173			9,525			3,642			2,499
Net income attributable to Noncontrolling Interests		27,903			24,624			14,847			3,376
Distributions to Noncontrolling Interests		(23,366	)		(25,000	)		(7,367	)		(7,963	)
Change in carrying value of Redeemable Noncontrolling Interests – Operating Partnership		(1,745	)		(131	)		(2,539	)		1,917
Adjustment for Noncontrolling Interests ownership in Operating Partnership		27,085			(438	)		(3,722	)		(2,425	)
Balance, end of period	$	208,955		$	232,516		$	208,955		$	232,516
PARTIALLY OWNED PROPERTIES
Balance, beginning of period	$	4,673		$	1,183		$	2,365		$	4,634
Net income attributable to Noncontrolling Interests		1,957			14,113			534			703
Contributions by Noncontrolling Interests		—			417			—			76
Distributions to Noncontrolling Interests		(4,492	)		(11,343	)		(761	)		(1,043	)
Balance, end of period	$	2,138		$	4,370		$	2,138		$	4,370

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

	September 30,			December 31,
	2021			2020
ASSETS
Land	$	5,779,686		$	5,785,367
Depreciable property		21,840,344			20,920,654
Projects under development		163,659			411,134
Land held for development		82,026			86,170
Investment in real estate		27,865,715			27,203,325
Accumulated depreciation		(8,260,846	)		(7,859,657	)
Investment in real estate, net		19,604,869			19,343,668
Investments in unconsolidated entities		79,429			52,782
Cash and cash equivalents		39,707			42,591
Restricted deposits		187,042			57,137
Right-of-use assets		477,693			499,287
Other assets		274,275			291,426
Total assets	$	20,663,015		$	20,286,891

LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net	$	2,281,165		$	2,293,890
Notes, net		5,833,483			5,335,536
Line of credit and commercial paper		30,000			414,830
Accounts payable and accrued expenses		166,522			107,366
Accrued interest payable		56,777			65,896
Lease liabilities		313,361			329,130
Other liabilities		350,201			345,064
Security deposits		64,617			60,480
Distributions payable		233,306			232,262
Total liabilities		9,329,432			9,184,454

Commitments and contingencies

Redeemable Limited Partners		459,933			338,951
Capital:
Partners’ Capital:
Preference Units		37,280			37,280
General Partner		10,661,943			10,532,037
Limited Partners		208,955			233,162
Accumulated other comprehensive income (loss)		(36,666	)		(43,666	)
Total partners’ capital		10,871,512			10,758,813
Noncontrolling Interests – Partially Owned Properties		2,138			4,673
Total capital		10,873,650			10,763,486
Total liabilities and capital	$	20,663,015		$	20,286,891

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
REVENUES
Rental income	$	1,818,867		$	1,958,270		$	623,206		$	622,433

EXPENSES
Property and maintenance		341,261			333,333			116,461			113,065
Real estate taxes and insurance		297,780			288,043			96,909			95,273
Property management		74,357			71,513			23,772			20,196
General and administrative		43,102			37,212			13,041			10,859
Depreciation		616,032			619,003			215,397			200,605
Total expenses		1,372,532			1,349,104			465,580			439,998

Net gain (loss) on sales of real estate properties		587,623			352,218			363,928			(25	)

Operating income		1,033,958			961,384			521,554			182,410

Interest and other income		25,293			4,006			973			535
Other expenses		(10,908	)		(8,324	)		(3,456	)		(4,097	)
Interest:
Expense incurred, net		(202,733	)		(248,349	)		(68,251	)		(80,874	)
Amortization of deferred financing costs		(6,172	)		(6,253	)		(2,048	)		(2,101	)
Income before income and other taxes, income (loss) from investments in unconsolidated entities and net gain (loss) on sales of land parcels		839,438			702,464			448,772			95,873
Income and other tax (expense) benefit		(679	)		(502	)		(284	)		(262	)
Income (loss) from investments in unconsolidated entities		(3,028	)		(2,445	)		(1,156	)		(246	)
Net gain (loss) on sales of land parcels		5			—			—			—
Net income		835,736			699,517			447,332			95,365
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Net income attributable to controlling interests	$	833,779		$	685,404		$	446,798		$	94,662
ALLOCATION OF NET INCOME:
Preference Units	$	2,318		$	2,318		$	773		$	773

General Partner	$	803,558		$	658,462		$	431,178		$	90,513
Limited Partners		27,903			24,624			14,847			3,376
Net income available to Units	$	831,461		$	683,086		$	446,025		$	93,889

Earnings per Unit – basic:
Net income available to Units	$	2.15		$	1.77		$	1.15		$	0.24
Weighted average Units outstanding		385,841			384,759			386,327			384,871

Earnings per Unit – diluted:
Net income available to Units	$	2.14		$	1.77		$	1.15		$	0.24
Weighted average Units outstanding		387,642			385,973			388,374			385,652

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
Comprehensive income:
Net income	$	835,736		$	699,517		$	447,332		$	95,365
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		—			(1,190	)		—			—
Losses reclassified into earnings from other comprehensive income		7,000			17,275			2,363			5,877
Other comprehensive income (loss)		7,000			16,085			2,363			5,877
Comprehensive income		842,736			715,602			449,695			101,242
Comprehensive (income) attributable to Noncontrolling Interests – Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Comprehensive income attributable to controlling interests	$	840,779		$	701,489		$	449,161		$	100,539

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	835,736		$	699,517
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		616,032			619,003
Amortization of deferred financing costs		6,172			6,253
Amortization of above/below market lease intangibles		(154	)		(53	)
Amortization of discounts and premiums on debt		3,934			3,834
Amortization of deferred settlements on derivative instruments		6,991			17,266
Amortization of right-of-use assets		10,286			8,785
Write-off of pursuit costs		3,557			4,864
(Income) loss from investments in unconsolidated entities		3,028			2,445
Distributions from unconsolidated entities – return on capital		—			100
Net (gain) loss on sales of real estate properties		(587,623	)		(352,218	)
Net (gain) loss on sales of land parcels		(5	)		—
Realized/unrealized (gain) loss on derivative instruments		—			50
Realized (gain) loss on sale of investment securities		(23,432	)		—
Compensation paid with Company Common Shares		21,919			18,275
Other operating activities, net		—			1,805
Changes in assets and liabilities:
(Increase) decrease in other assets		16,269			(30,197	)
Increase (decrease) in accounts payable and accrued expenses		69,170			54,418
Increase (decrease) in accrued interest payable		(9,119	)		(1,183	)
Increase (decrease) in lease liabilities		(4,112	)		(1,650	)
Increase (decrease) in other liabilities		5,427			(8,381	)
Increase (decrease) in security deposits		4,137			(8,609	)
Net cash provided by operating activities		978,213			1,034,324
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions		(1,022,275	)		(48,898	)
Investment in real estate – development/other		(172,850	)		(157,778	)
Capital expenditures to real estate		(107,706	)		(92,123	)
Non-real estate capital additions		(1,251	)		(19,290	)
Interest capitalized for real estate and unconsolidated entities under development		(12,365	)		(6,880	)
Proceeds from disposition of real estate, net		1,014,328			747,600
Investments in unconsolidated entities		(31,081	)		(6,664	)
Distributions from unconsolidated entities – return of capital		4			1,000
Purchase of investment securities and other investments		(167,791	)		(509	)
Proceeds from sale of investment securities		191,398			—
Net cash provided by (used for) investing activities		(309,589	)		416,458

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021			2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs	$	(6,447	)	$	(2,923	)
Mortgage notes payable, net:
Proceeds		51,298			505,375
Lump sum payoffs		(59,880	)		(127,767	)
Scheduled principal repayments		(5,570	)		(5,821	)
Notes, net:
Proceeds		497,470			—
Line of credit and commercial paper:
Line of credit proceeds		—			1,870,000
Line of credit repayments		—			(1,890,000	)
Commercial paper proceeds		4,305,170			6,726,167
Commercial paper repayments		(4,690,000	)		(7,724,000	)
Proceeds from (payments on) settlement of derivative instruments		—			(1,240	)
Finance ground lease principal payments		(349	)		—
Proceeds from EQR’s Employee Share Purchase Plan (ESPP)		3,455			3,556
Proceeds from exercise of EQR options		68,807			11,426
Payment of offering costs		(267	)		—
Other financing activities, net		(31	)		(31	)
Contributions – Noncontrolling Interests – Partially Owned Properties		—			417
Contributions – Limited Partners		—			12
Distributions:
OP Units – General Partner		(674,531	)		(659,668	)
Preference Units		(2,318	)		(2,318	)
OP Units – Limited Partners		(23,949	)		(24,440	)
Noncontrolling Interests – Partially Owned Properties		(4,461	)		(11,312	)
Net cash provided by (used for) financing activities		(541,603	)		(1,332,567	)
Net increase (decrease) in cash and cash equivalents and restricted deposits		127,021			118,215
Cash and cash equivalents and restricted deposits, beginning of period		99,728			116,999
Cash and cash equivalents and restricted deposits, end of period	$	226,749		$	235,214

Cash and cash equivalents and restricted deposits, end of period
Cash and cash equivalents	$	39,707		$	178,333
Restricted deposits		187,042			56,881
Total cash and cash equivalents and restricted deposits, end of period	$	226,749		$	235,214

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2021			2020
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	199,799		$	223,703
Net cash paid (received) for income and other taxes	$	1,040		$	(1,092	)
Amortization of deferred financing costs:
Investment in real estate, net	$	(227	)	$	(180	)
Other assets	$	1,754		$	1,755
Mortgage notes payable, net	$	1,702		$	1,337
Notes, net	$	2,943		$	3,341
Amortization of discounts and premiums on debt:
Mortgage notes payable, net	$	2,069		$	1,791
Notes, net	$	1,865		$	2,043
Amortization of deferred settlements on derivative instruments:
Other liabilities	$	(9	)	$	(9	)
Accumulated other comprehensive income	$	7,000		$	17,275
Write-off of pursuit costs:
Investment in real estate, net	$	3,000		$	4,621
Other assets	$	533		$	219
Accounts payable and accrued expenses	$	24		$	24
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities	$	2,062		$	1,474
Other liabilities	$	966		$	971
Realized/unrealized (gain) loss on derivative instruments:
Other liabilities	$	—		$	1,240
Accumulated other comprehensive income	$	—		$	(1,190	)
Interest capitalized for real estate and unconsolidated entities under development:
Investment in real estate, net	$	(12,260	)	$	(6,880	)
Investments in unconsolidated entities	$	(105	)	$	—
Investments in unconsolidated entities:
Investment in real estate, net	$	967		$	—
Investments in unconsolidated entities	$	(30,038	)	$	(5,164	)
Other liabilities	$	(2,010	)	$	(1,500	)
Debt financing costs:
Other assets	$	228		$	(231	)
Mortgage notes payable, net	$	(2,344	)	$	(2,692	)
Notes, net	$	(4,331	)	$	—
Right-of-use assets and lease liabilities initial measurement and reclassifications:
Right-of-use assets	$	11,308		$	—
Lease liabilities	$	(11,308	)	$	—
Non-cash share distribution from unconsolidated entities:
Investments in unconsolidated entities	$	1,430		$	—
Other assets	$	(1,430	)	$	—

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
PARTNERS’ CAPITAL
PREFERENCE UNITS
Balance, beginning of period	$	37,280		$	37,280		$	37,280		$	37,280
Balance, end of period	$	37,280		$	37,280		$	37,280		$	37,280
GENERAL PARTNER
Balance, beginning of period	$	10,532,037		$	10,355,789		$	10,435,740		$	10,627,748
OP Unit Issuance:
Conversion of OP Units held by Limited Partners into OP Units held by General Partner		68,257			3,913			1,597			57
Exercise of EQR share options		68,807			11,426			29,184			104
EQR’s Employee Share Purchase Plan (ESPP)		3,455			3,556			788			1,197
Share-based employee compensation expense:
EQR restricted shares		6,572			9,238			1,758			1,984
EQR share options		2,541			1,819			565			526
EQR ESPP discount		798			626			165			210
Net income available to Units – General Partner		803,558			658,462			431,178			90,513
OP Units – General Partner distributions		(676,158	)		(673,019	)		(225,938	)		(224,269	)
Offering costs		(267	)		—			(267	)		—
Supplemental Executive Retirement Plan (SERP)		(1,335	)		(395	)		722			111
Change in market value of Redeemable Limited Partners		(119,237	)		169,825			(17,271	)		41,072
Adjustment for Limited Partners ownership in Operating Partnership		(27,085	)		438			3,722			2,425
Balance, end of period	$	10,661,943		$	10,541,678		$	10,661,943		$	10,541,678
LIMITED PARTNERS
Balance, beginning of period	$	233,162		$	227,837		$	205,691		$	235,169
Issuance of restricted units to Limited Partners		—			12			—			—
Conversion of OP Units held by Limited Partners into OP Units held by General Partner		(68,257	)		(3,913	)		(1,597	)		(57	)
Equity compensation associated with Units – Limited Partners		14,173			9,525			3,642			2,499
Net income available to Units – Limited Partners		27,903			24,624			14,847			3,376
Units – Limited Partners distributions		(23,366	)		(25,000	)		(7,367	)		(7,963	)
Change in carrying value of Redeemable Limited Partners		(1,745	)		(131	)		(2,539	)		1,917
Adjustment for Limited Partners ownership in Operating Partnership		27,085			(438	)		(3,722	)		(2,425	)
Balance, end of period	$	208,955		$	232,516		$	208,955		$	232,516
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of period	$	(43,666	)	$	(77,563	)	$	(39,029	)	$	(67,355	)
Accumulated other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		—			(1,190	)		—			—
Losses reclassified into earnings from other comprehensive income		7,000			17,275			2,363			5,877
Balance, end of period	$	(36,666	)	$	(61,478	)	$	(36,666	)	$	(61,478	)

DISTRIBUTIONS
Distributions declared per Unit outstanding	$	1.8075		$	1.8075		$	0.6025		$	0.6025

See accompanying notes


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES
Balance, beginning of period	$	4,673		$	1,183		$	2,365		$	4,634
Net income attributable to Noncontrolling Interests		1,957			14,113			534			703
Contributions by Noncontrolling Interests		—			417			—			76
Distributions to Noncontrolling Interests		(4,492	)		(11,343	)		(761	)		(1,043	)
Balance, end of period	$	2,138		$	4,370		$	2,138		$	4,370

See accompanying notes


Table of Contents

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 high quality 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 September 30, 2021 owned an approximate 96.7% 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 September 30, 2021, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 307 properties located in 10 states and the District of Columbia consisting of 79,322 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):


Wholly Owned Properties	290	75,548
Partially Owned Properties – Consolidated	17	3,774
	307	79,322

Note: Effective July 31, 2021, the Company took over management of its last remaining third-party master-leased property containing 162 apartment units located in the Washington D.C. market and the property is now included in the Wholly Owned Properties count.

COVID-19 Pandemic

The Company continues to monitor the effects of and take various actions in response to the novel coronavirus (“COVID-19”) pandemic and its accompanying variants. Its duration, severity and the extent of the adverse health impact on the general population, our residents and employees, the rate of vaccine distribution and effectiveness of vaccinations, the overall reopening progress in the cities in which we operate and the potential long-term changes in customer preferences for living in our communities, are among the many unknowns that have had or could continue to have a significant future impact on the Company. These, among other items, have impacted the economy, the unemployment rate and our operations and could materially affect our future consolidated results of operations, financial condition, liquidity, investments and overall performance. There have been no material changes to the overall COVID-19 disclosures that were discussed in the notes to the consolidated financial statements of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020.

2.	Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and certain reclassifications considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.


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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. In response to the COVID-19 pandemic, management evaluated whether its estimates, such as lease collectibility (discussed below in Recently Adopted Accounting Pronouncements) and impairment, required revised approaches and generally concluded that no revisions were necessary at this time.

The balance sheets at December 31, 2020 have been derived from the audited financial statements at that date but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

For further information, including definitions of capitalized terms not defined herein, refer to the consolidated financial statements and footnotes thereto included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020.

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 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 taxes. The Company has elected taxable REIT subsidiary (“TRS”) 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.

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Included in the CARES Act were tax provisions which increased allowable interest expense deductions for 2019 and 2020 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.

Recently Issued 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. Instead of being required to assess whether an equity contract permits settlement in unregistered shares, which may require a legal analysis under the securities laws, entities will only analyze whether cash settlements are explicitly required when registered shares are unavailable. As a result, such contracts may be classified in permanent rather than mezzanine equity, which may affect the way the Company’s OP Units are presented on its financial statements. The update is effective for the Company beginning on January 1, 2022 as the Company did not early adopt the standard as allowed on January 1, 2021. The Company is currently evaluating the impact of adopting the new standard on its consolidated results of operations and financial position.

Recently Adopted Accounting Pronouncements

In August 2021, the FASB issued an amendment to the presentation of financial statements standard which aligns the financial statements and disclosure requirements with those of the final rules released by the SEC in May 2020. The amendment changes the significance tests that determine what disclosures about significant business acquisitions are required, the periods the financial statements must cover and the pro forma financial information that must be included in certain reports. The amendment was effective for the Company upon issuance on August 9, 2021. The Company has not yet acquired businesses that exceed the threshold as defined by the standard, therefore, the amendment did not have a material effect on its consolidated results of operations and financial position.

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. An example of such reform is the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Entities that make this optional expedient election would not have to remeasure the contracts at the modification date or reassess the accounting treatment if certain criteria are met and would continue applying hedge accounting for relationships affected by reference rate reform. The new standard was effective for the Company upon issuance and elections can be made through December 31, 2022. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index


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upon which future hedged transactions will be based matches the index on the corresponding derivatives. 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.

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 nine months ended September 30, 2021 and 2020:


Common Shares
Common Shares outstanding at January 1,	372,302,000		371,670,884
Common Shares Issued:
Conversion of OP Units	1,153,963		99,737
Exercise of share options	1,401,755		219,922
Employee Share Purchase Plan (ESPP)	59,297		69,986
Restricted share grants, net	85,573		178,720
Common Shares outstanding at September 30,	375,002,588		372,239,249
Units
Units outstanding at January 1,	13,858,073		13,731,315
Restricted unit grants, net	155,638		247,822
Conversion of OP Units to Common Shares	(1,153,963	)	(99,737	)
Units outstanding at September 30,	12,859,748		13,879,400
Total Common Shares and Units outstanding at September 30,	387,862,336		386,118,649
Units Ownership Interest in Operating Partnership	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 nine months ended September 30, 2021 and 2020:


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General and Limited Partner Units
General and Limited Partner Units outstanding at January 1,	386,160,073		385,402,199
Issued to General Partner:
Exercise of EQR share options	1,401,755		219,922
EQR’s Employee Share Purchase Plan (ESPP)	59,297		69,986
EQR’s restricted share grants, net	85,573		178,720
Issued to Limited Partners:
Restricted unit grants, net	155,638		247,822
General and Limited Partner Units outstanding at September 30,	387,862,336		386,118,649
Limited Partner Units
Limited Partner Units outstanding at January 1,	13,858,073		13,731,315
Limited Partner restricted unit grants, net	155,638		247,822
Conversion of Limited Partner OP Units to EQR Common Shares	(1,153,963	)	(99,737	)
Limited Partner Units outstanding at September 30,	12,859,748		13,879,400
Limited Partner Units Ownership Interest in Operating Partnership	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.

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 September 30, 2021 and December 31, 2020.

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 September 30, 2021 and 2020, the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners have a redemption value of approximately $459.9 million and $293.7 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.


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The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners for the nine months ended September 30, 2021 and 2020, respectively (amounts in thousands):

	2021		2020
Balance at January 1,	$	338,951	$	463,400
Change in market value		119,237		(169,825	)
Change in carrying value		1,745		131
Balance at September 30,	$	459,933	$	293,706

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.

The following table presents the Company’s issued and outstanding Preferred Shares/Preference Units as of September 30, 2021 and December 31, 2020:

				Amounts in thousands
		Annual
	Call	Dividend Per		September 30,		December 31,
	Date (1)	Share/Unit (2)		2021		2020
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 September 30, 2021 and December 31, 2020	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 June 2019 and expires in June 2022. 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. The current program matures in June 2022 and gives EQR the authority to issue up to 13.0 million shares, all of which remain outstanding as of September 30, 2021, pending the settlement of any outstanding forward sale agreements. As of September 30, 2021, the Company had entered into such forward sale agreements under this program for a total of approximately 1.7 million Common Shares at a weighted average initial forward price per share of $83.25. These forward sale agreements 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,


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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 potential inclusion of incremental shares, if any, within the calculation of diluted net income per share using the treasury stock method. 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. As of September 30, 2021, no shares under the forward sale agreements have been settled. These forward sale agreements must be settled by March 2023.

The Company may repurchase up to 13.0 million Common Shares under its share repurchase program. No open market repurchases have occurred since 2008, and no repurchases of any kind have occurred since February 2014. As of September 30, 2021, EQR has remaining authorization to repurchase up to 13.0 million of its shares.

4.	Real Estate

The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of September 30, 2021 and December 31, 2020 (amounts in thousands):

	September 30, 2021			December 31, 2020
Land	$	5,779,686		$	5,785,367
Depreciable property:
Buildings and improvements		19,211,662			18,464,484
Furniture, fixtures and equipment		2,125,441			1,970,033
In-Place lease intangibles		503,241			486,137
Projects under development:
Land		4,121			23,531
Construction-in-progress		159,538			387,603
Land held for development:
Land		46,160			46,160
Construction-in-progress		35,866			40,010
Investment in real estate		27,865,715			27,203,325
Accumulated depreciation		(8,260,846	)		(7,859,657	)
Investment in real estate, net	$	19,604,869		$	19,343,668

During the nine months ended September 30, 2021, the Company acquired the following from unaffiliated parties (purchase price in thousands):

		Properties				Apartment Units				Purchase Price
Rental Properties – Consolidated (1)			11				2,921			$	1,020,425
Total			11				2,921			$	1,020,425

(1)	Purchase price includes an allocation of approximately $134.2 million to land and $888.1 million to depreciable property (inclusive of capitalized closing costs).

During the nine months ended September 30, 2021, the Company disposed of the following to unaffiliated parties (sales price in thousands):

		Properties				Apartment Units				Sales Price
Rental Properties – Consolidated			10				1,842			$	1,021,800
Total			10				1,842			$	1,021,800


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The Company recognized a net gain on sales of real estate properties of approximately $587.6 million on the above sales.

5.	Commitments to Acquire/Dispose of Real Estate

The Company has not entered into any agreements to acquire rental properties or land parcels as of the date of filing.

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 September 30, 2021
Rental Properties - Consolidated			2				744			$	410,000			$	130,762
Total			2				744			$	410,000			$	130,762

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 14 for discussion of the properties acquired or disposed of, if any, subsequent to September 30, 2021.

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 Variable Interest Entities (“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 owning 17 properties containing 3,774 apartment units. The Company has determined that these joint ventures are 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 Company also has a separate consolidated joint venture which leases a land parcel that is currently being developed into a multifamily rental property. This joint venture has been deemed to be a VIE and is consolidated due to the Company being the primary beneficiary.

The consolidated assets and liabilities related to the VIEs discussed above were approximately $839.3 million and $247.9 million, respectively, at September 30, 2021 and approximately $784.1 million and $224.0 million, respectively, at December 31, 2020.


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Investments in Unconsolidated Entities

During the nine months ended September 30, 2021, the Company acquired two land parcels through separate unconsolidated joint ventures for the purpose of developing multifamily rental properties for an aggregate gross purchase price of approximately $55.4 million, with the Company’s share approximating $21.8 million. The Company, as a limited partner in both joint ventures, does not have substantive kick-out or voting rights in the entities. As a result, the entities qualify as VIEs. The Company has the obligation to absorb losses and the right to receive benefits from the VIE that could potentially be significant to the VIE, but does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. As a result, the Company is not the primary beneficiary and these entities are unconsolidated and recorded using the equity method of accounting.

The following table and information summarizes the Company’s investments in unconsolidated entities, which are accounted for under the equity method of accounting as the requirements for consolidation are not met, as of September 30, 2021 and December 31, 2020 (amounts in thousands except for ownership percentage):

	September 30, 2021			December 31, 2020			Ownership Percentage
Investments in Unconsolidated Entities:
Operating Property (VIE) (1)	$	36,652		$	38,288		33.3%
Projects Under Development (VIE) (2)		24,927			—		Varies
Real Estate Technology (3)		18,127			14,866		Varies
Other		(277	)		(372	)	Varies
Investments in Unconsolidated Entities	$	79,429		$	52,782

(1)

Represents an unconsolidated interest in an entity that owns the land underlying one of the consolidated joint venture properties noted above and owns and operates a related parking facility. The joint venture, as a limited partner, does not have substantive kick-out or participating rights in the entity. As a result, the entity qualifies as a VIE. The joint venture does not have a controlling financial interest in the VIE and is not the VIE’s primary beneficiary. The joint venture does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result, the entity that owns the land and owns and operates the parking facility is unconsolidated and recorded using the equity method of accounting.

(2)	Represents unconsolidated interests in the two unconsolidated joint ventures noted above.

(3)	Represents unconsolidated investments in six separate real estate technology funds/companies.

7.	Restricted Deposits

The following table presents the Company’s restricted deposits as of September 30, 2021 and December 31, 2020 (amounts in thousands):

	September 30, 2021		December 31, 2020
Mortgage escrow deposits:
Replacement reserves	$	10,830	$	9,877
Mortgage principal reserves/sinking funds		17,828		14,168
Mortgage escrow deposits		28,658		24,045
Restricted cash:
Tax-deferred (1031) exchange proceeds		121,799		—
Restricted deposits on real estate investments		292		307
Resident security and utility deposits		34,459		31,412
Other		1,834		1,373
Restricted cash		158,384		33,092
Restricted deposits	$	187,042	$	57,137

8.	Leases

Lessor Accounting

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

For the nine months ended September 30, 2021, approximately 97% of the Company’s total lease revenue is generated from residential apartment leases that are generally twelve months or less in length. The residential apartment leases may include lease income related to such items as utility recoveries, parking, storage 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. The collection of


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lease payments at lease commencement is probable and therefore the Company subsequently recognizes lease income over the lease term on a straight-line basis. Residential leases are renewable upon consent of both parties on an annual or monthly basis.

For the nine months ended September 30, 2021, approximately 3% of the Company’s total lease revenue is generated by non-residential leases that are generally for terms ranging between five to ten years. The non-residential leases generally consist of ground floor retail spaces and master-leased parking garages that serve as additional amenities for our residents. The 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. The collection of lease payments at lease commencement is probable and therefore the Company subsequently recognizes lease income over the lease term on a straight-line basis. Non-residential leases are renewable with market-based renewal options.

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 nine months ended September 30, 2021 and 2020 (amounts in thousands):

	Nine Months Ended September 30, 2021								Nine Months Ended September 30, 2020
Income Type	Residential Leases			Non-Residential Leases		Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	1,629,778		$	45,680	$	1,675,458		$	1,783,298		$	36,263		$	1,819,561
Utility recoveries (RUBS income) (1)		55,331			519		55,850			52,538			509			53,047
Parking rent		30,403			465		30,868			29,052			324			29,376
Other lease revenue (2)		(19,442	)		2,914		(16,528	)		(19,000	)		(5,530	)		(24,530	)
Total lease revenue	$	1,696,070		$	49,578		1,745,648		$	1,845,888		$	31,566			1,877,454
Parking revenue							18,455									16,648
Other revenue							54,764									64,168
Total other rental income (3)							73,219									80,816
Rental income						$	1,818,867								$	1,958,270

(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 the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the quarters ended September 30, 2021 and 2020 (amounts in thousands):

	Quarter Ended September 30, 2021							Quarter Ended September 30, 2020
Income Type	Residential Leases			Non-Residential Leases		Total		Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	551,474		$	14,443	$	565,917	$	576,192		$	6,042		$	582,234
Utility recoveries (RUBS income) (1)		18,798			189		18,987		17,306			134			17,440
Parking rent		10,513			103		10,616		9,592			101			9,693
Other lease revenue (2)		(472	)		1,776		1,304		(12,727	)		(4,299	)		(17,026	)
Total lease revenue	$	580,313		$	16,511		596,824	$	590,363		$	1,978			592,341
Parking revenue							6,883								5,336
Other revenue							19,499								24,756
Total other rental income (3)							26,382								30,092
Rental income						$	623,206							$	622,433

(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 economic impact of the pandemic on a subset of our residents and tenants has led to elevated levels of bad debt, which was reduced, in part, by governmental rental assistance payments paid on their behalf. We continue to work with our residents and tenants on payment plans and collections and our bad debt allowance policies remain consistent from those existing prior to the pandemic.

The following table presents residential and non-residential accounts receivable and straight-line receivable balances for the Company’s properties as of September 30, 2021 and December 31, 2020 (amounts in thousands):


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	Residential							Non-Residential
Balance Sheet (Other assets):	September 30, 2021				December 31, 2020			September 30, 2021			December 31, 2020
Resident/tenant accounts receivable balances	$	42,126			$	30,856		$	4,001		$	7,598
Allowance for doubtful accounts		(37,669	)			(24,021	)		(3,442	)		(6,527	)
Net receivable balances	$	4,457		(1)	$	6,835		$	559		$	1,071

Straight-line receivable balances	$	12,650			$	19,992		$	12,759		$	13,413

(1)	The Company held residential security deposits approximating 58.4% of the net receivable balance at September 30, 2021.

The following table presents residential bad debt for the Company’s properties for the nine months and quarters ended September 30, 2021 and 2020 (amounts in thousands):

	Nine Months Ended September 30,						Quarter Ended September 30,
Income Statement (Rental income):		2021			2020			2021			2020
Bad debt, net (1)	$	29,751		$	29,419		$	3,979		$	16,071
% of rental income		1.7	%		1.5	%		0.7	%		2.6	%

(1)	The nine months and quarter ended September 30, 2021 benefited from additional resident payments due to governmental rental assistance programs.

Due to the impact of COVID-19 and the resulting economic impact on our non-residential tenants, we recognized a non-cash write-off of non-residential straight-line lease receivables of approximately $0.1 million and $12.9 million during the nine months ended September 30, 2021 and 2020, respectively. In addition, we reduced rental revenues by approximately $5.7 million and $5.6 million during the nine months ended September 30, 2021 and 2020, respectively, due to rent payment deferrals/abatements granted to our non-residential tenants.

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 nine months ended September 30, 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 table summarizes the Company’s mortgage notes payable activity for the nine months ended September 30, 2021 (amounts in thousands):

	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 September 30, 2021
Fixed Rate Debt:
Secured – Conventional	$	1,901,091	$	28,500	(2)	$	(28,200	)	$	(5,570	)	$	1,140	$	689		$	1,897,650
Floating Rate Debt:
Secured – Conventional		31,494		22,798			—			—			—		(1,719	)		52,573
Secured – Tax Exempt		361,305		—			(31,680	)		—			929		388			330,942
Floating Rate Debt		392,799		22,798			(31,680	)		—			929		(1,331	)		383,515
Total	$	2,293,890	$	51,298		$	(59,880	)	$	(5,570	)	$	2,069	$	(642	)	$	2,281,165

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

(2)	Obtained 3.58% fixed rate mortgage debt maturing on March 1, 2031.


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The following table summarizes certain interest rate and maturity date information as of and for the nine months ended September 30, 2021:

		September 30, 2021
Interest Rate Ranges		0.06% - 4.21%
Weighted Average Interest Rate		3.16%
Maturity Date Ranges		2022-2061

As of September 30, 2021, the Company had $250.0 million of secured debt (primarily tax-exempt bonds) subject to third-party credit enhancement.

Notes

The following table summarizes the Company’s notes activity for the nine months ended September 30, 2021 (amounts in thousands):

		Notes, net as of December 31, 2020				Proceeds				Lump sum payoffs				Realized/unrealized (gain) loss on derivative instruments				Amortization of premiums/ discounts				Amortization of deferred financing costs, net (1)				Notes, net as of September 30, 2021
Fixed Rate Debt:
Unsecured – Public		$	5,335,536			$	497,470		(2)	$	—			$	—			$	1,865			$	(1,388	)		$	5,833,483

(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 nine months ended September 30, 2021:

		September 30, 2021
Interest Rate Ranges		1.85% - 7.57%
Weighted Average Interest Rate		3.69%
Maturity Date Ranges		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 the nine months ended September 30, 2021.

Line of Credit and Commercial Paper

The Company has a $2.5 billion unsecured revolving credit facility maturing November 1, 2024. 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 LIBOR plus a spread (currently 0.775%), 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 nine months ended September 30, 2021.

The Company has an unsecured commercial paper note program in 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 notes bear interest at various floating rates with a weighted average interest rate of 0.28% for the nine months ended September 30, 2021 and a weighted average maturity of 1 day as of September 30, 2021. The weighted average amount outstanding for the nine months ended September 30, 2021 was approximately $556.7 million.


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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 September 30, 2021 (amounts in thousands):

	September 30, 2021
Unsecured revolving credit facility commitment	$	2,500,000
Commercial paper balance outstanding		(30,000	)
Unsecured revolving credit facility balance outstanding		—
Other restricted amounts		(100,442	)
Unsecured revolving credit facility availability	$	2,369,558

Other

The following table summarizes the Company’s total debt extinguishment costs recorded as additional interest expense during the nine months ended September 30, 2021 (amounts in thousands):

		September 30, 2021
Write-offs of unamortized deferred financing costs		$	264

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 nine months ended September 30, 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 September 30, 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 following table summarizes the inputs to the valuations for each type of fair value measurement:

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,


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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 September 30, 2021 and December 31, 2020, respectively (amounts in thousands):

	September 30, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value (Level 2)		Carrying Value		Estimated Fair Value (Level 2)
Mortgage notes payable, net	$	2,281,165	$	2,303,890	$	2,293,890	$	2,313,263
Unsecured debt, net		5,863,483		6,534,974		5,750,366		6,686,612
Total debt, net	$	8,144,648	$	8,838,864	$	8,044,256	$	8,999,875

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 September 30, 2021 and December 31, 2020, respectively (amounts in thousands):

				Fair Value Measurements at Reporting Date Using
Description	Balance Sheet Location	9/30/2021		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	$	160,914	$	160,914	$	—	$	—

Liabilities
Supplemental Executive Retirement Plan	Other Liabilities	$	160,914	$	160,914	$	—	$	—

Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners	Mezzanine	$	459,933	$	—	$	459,933	$	—

				Fair Value Measurements at Reporting Date Using
Description	Balance Sheet Location	12/31/2020		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	$	160,293	$	160,293	$	—	$	—

Liabilities
Supplemental Executive Retirement Plan	Other Liabilities	$	160,293	$	160,293	$	—	$	—

Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners	Mezzanine	$	338,951	$	—	$	338,951	$	—

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 nine months ended September 30, 2021 and 2020, respectively (amounts in thousands):

September 30, 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	$	(7,000	)
Total	$	—		$	(7,000	)


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September 30, 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	$	(17,275	)
Total	$	(1,190	)		$	(17,275	)

As of September 30, 2021 and December 31, 2020, there were approximately $36.7 million and $43.7 million in deferred losses, net, included in accumulated other comprehensive income (loss), respectively, related to derivative instruments, of which an estimated $10.5 million may be recognized as additional interest expense during the twelve months ending September 30, 2022.

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):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
Numerator for net income per share – basic:
Net income	$	835,736		$	699,517		$	447,332		$	95,365
Allocation to Noncontrolling Interests – Operating Partnership		(27,903	)		(24,624	)		(14,847	)		(3,376	)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
Numerator for net income per share – basic	$	803,558		$	658,462		$	431,178		$	90,513
Numerator for net income per share – diluted:
Net income	$	835,736		$	699,517		$	447,332		$	95,365
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Preferred distributions		(2,318	)		(2,318	)		(773	)		(773	)
Numerator for net income per share – diluted	$	831,461		$	683,086		$	446,025		$	93,889
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic		373,474			371,749			374,308			371,869
Effect of dilutive securities:
OP Units		12,367			13,010			12,019			13,002
Long-term compensation shares/units		1,801			1,214			2,047			781
Denominator for net income per share – diluted		387,642			385,973			388,374			385,652
Net income per share – basic	$	2.15		$	1.77		$	1.15		$	0.24
Net income per share – diluted	$	2.14		$	1.77		$	1.15		$	0.24


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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):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
Numerator for net income per Unit – basic and diluted:
Net income	$	835,736		$	699,517		$	447,332		$	95,365
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(1,957	)		(14,113	)		(534	)		(703	)
Allocation to Preference Units		(2,318	)		(2,318	)		(773	)		(773	)
Numerator for net income per Unit – basic and diluted	$	831,461		$	683,086		$	446,025		$	93,889
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit – basic		385,841			384,759			386,327			384,871
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units		1,801			1,214			2,047			781
Denominator for net income per Unit – diluted		387,642			385,973			388,374			385,652
Net income per Unit – basic	$	2.15		$	1.77		$	1.15		$	0.24
Net income per Unit – diluted	$	2.14		$	1.77		$	1.15		$	0.24

12.	Commitments and Contingencies

The Company, as an owner of real estate, is subject to various Federal, state and local laws, including, but not limited to, rent regulations and environmental 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, whether related to COVID-19 or otherwise, 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.

As of September 30, 2021, the Company has two consolidated projects (one wholly owned and one partially owned) and two unconsolidated projects totaling 1,441 apartment units in various stages of development with remaining commitments to fund of approximately $328.8 million (inclusive of applicable construction loans and joint venture partner obligations) and estimated completion dates ranging through June 30, 2024, as well as two consolidated completed development projects (one wholly owned and one partially owned) that are in lease-up.

As of September 30, 2021, the Company has two consolidated joint venture agreements with third-party partners for the development of multifamily rental properties, one of which is currently under construction as noted above and one of which was substantially completed during the quarter ended June 30, 2021. The Company also has two unconsolidated joint venture agreements with third-party partners for the development of multifamily rental properties, both of which are currently under construction as noted above. The joint venture agreements with each partner include a buy-sell provision that provides 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.

As of September 30, 2021, the Company entered into a commitment agreement (the “Commitment Agreement”) with Toll Brothers, Inc. (“Toll”) to pursue the joint development of multifamily rental properties. Over the next 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. As of September 30, 2021, the Company and Toll had not yet entered into any joint venture agreements under the Commitment Agreement.


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13.	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.

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 3.8% of total revenues for the nine months ended September 30, 2021 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 nine months and quarters ended September 30, 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 nine months and quarters ended September 30, 2021 and 2020, respectively (amounts in thousands):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2021			2020			2021			2020
Rental income	$	1,818,867		$	1,958,270		$	623,206		$	622,433
Property and maintenance expense		(341,261	)		(333,333	)		(116,461	)		(113,065	)
Real estate taxes and insurance expense		(297,780	)		(288,043	)		(96,909	)		(95,273	)
Total operating expenses		(639,041	)		(621,376	)		(213,370	)		(208,338	)
Net operating income	$	1,179,826		$	1,336,894		$	409,836		$	414,095


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The following tables present NOI for each segment from our rental real estate for the nine months and quarters ended September 30, 2021 and 2020, respectively, as well as total assets and capital expenditures at September 30, 2021 (amounts in thousands):

	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	337,153	$	109,997	$	227,156	$	346,599	$	108,594	$	238,005
Orange County		80,773		18,937		61,836		79,241		18,539		60,702
San Diego		58,211		13,920		44,291		56,001		13,684		42,317
Subtotal - Southern California		476,137		142,854		333,283		481,841		140,817		341,024

San Francisco		302,043		93,983		208,060		346,089		90,849		255,240
Washington D.C.		298,165		99,369		198,796		311,119		95,799		215,320
New York		299,320		152,228		147,092		324,866		148,145		176,721
Seattle		181,908		58,616		123,292		195,198		55,845		139,353
Boston		171,871		57,041		114,830		182,502		53,727		128,775
Denver		28,732		8,614		20,118		28,584		8,320		20,264
Total same store		1,758,176		612,705		1,145,471		1,870,199		593,502		1,276,697

Non-same store/other (2) (3)
Non-same store		28,581		10,916		17,665		11,440		2,534		8,906
Other (3)		32,110		15,420		16,690		76,631		25,340		51,291
Total non-same store/other		60,691		26,336		34,355		88,071		27,874		60,197

Totals	$	1,818,867	$	639,041	$	1,179,826	$	1,958,270	$	621,376	$	1,336,894

(1)	For the nine months ended September 30, 2021 and 2020, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2020, less properties subsequently sold, which represented 75,288 apartment units.

(2)	For the nine months ended September 30, 2021 and 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.

(3)	Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Quarter Ended September 30, 2021						Quarter Ended September 30, 2020
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	117,542	$	36,929	$	80,613	$	112,201	$	36,783	$	75,418
Orange County		28,264		6,480		21,784		26,229		6,457		19,772
San Diego		20,282		4,735		15,547		18,637		4,652		13,985
Subtotal - Southern California		166,088		48,144		117,944		157,067		47,892		109,175

San Francisco		102,166		31,542		70,624		109,908		30,913		78,995
Washington D.C.		100,019		34,397		65,622		103,160		32,979		70,181
New York		103,015		49,939		53,076		98,333		49,915		48,418
Seattle		61,888		20,117		41,771		62,748		18,972		43,776
Boston		58,864		19,504		39,360		59,527		18,601		40,926
Denver		9,812		2,940		6,872		9,509		2,892		6,617
Total same store		601,852		206,583		395,269		600,252		202,164		398,088

Non-same store/other (2) (3)
Non-same store		16,563		6,777		9,786		2,481		539		1,942
Other (3)		4,791		10		4,781		19,700		5,635		14,065
Total non-same store/other		21,354		6,787		14,567		22,181		6,174		16,007

Totals	$	623,206	$	213,370	$	409,836	$	622,433	$	208,338	$	414,095

(1)	For the quarters ended September 30, 2021 and 2020, same store primarily includes all properties acquired or completed that were stabilized prior to July 1, 2020, less properties subsequently sold, which represented 75,509 apartment units.


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(2)	For the quarters ended September 30, 2021 and 2020, non-same store primarily includes properties acquired after July 1, 2020, plus any properties in lease-up and not stabilized as of July 1, 2020.

(3)	Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Nine Months Ended September 30, 2021
	Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	2,926,617	$	13,959
Orange County		375,365		4,124
San Diego		234,733		2,060
Subtotal - Southern California		3,536,715		20,143

San Francisco		3,264,017		15,853
Washington D.C.		3,270,172		20,392
New York		3,902,715		22,641
Seattle		1,975,574		10,234
Boston		1,710,489		15,766
Denver		496,969		1,101
Total same store		18,156,651		106,130

Non-same store/other (2) (3)
Non-same store		1,484,091		659
Other (3)		1,022,273		917
Total non-same store/other		2,506,364		1,576

Totals	$	20,663,015	$	107,706

(1)	Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2020, less properties subsequently sold, which represented 75,288 apartment units.

(2)	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.

(3)	Other includes development, other corporate operations and capital expenditures for properties sold.

14.	Subsequent Events

Subsequent to September 30, 2021, the Company:

	•	Contributed $5.8 million for an unconsolidated land parcel subject to a long-term ground lease and $11.6 million for two unconsolidated land parcel acquisitions in connection with the formation of separate joint ventures with Toll under the Commitment Agreement; and

	•	Contributed $1.1 million for an unconsolidated land parcel acquisition as part of the formation of a joint venture with a third-party.


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Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations