UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 31, 2026

EQUITY RESIDENTIAL

(Exact Name of Registrant as Specified in its Charter)

     Maryland

     1-12252

     13-3675988

     (State or Other Jurisdiction
of Incorporation)

     (Commission
File Number)

     (I.R.S. Employer
Identification No.)

    

ERP OPERATING LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in its Charter)

     Illinois

     0-24920

     36-3894853

     (State or Other Jurisdiction
of Incorporation)

     (Commission
File Number)

     (I.R.S. Employer
Identification No.)

    

      
     Two North Riverside Plaza
Chicago, Illinois

     60606

      
     (Address of Principal Executive Offices)

     (Zip Code)

Registrant's telephone number, including area code: (312) 474-1300

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Item 8.01. Other Events.

As previously announced, on May 20, 2026, Equity Residential, a Maryland real estate investment trust (“Equity Residential”), and ERP Operating Limited Partnership, an Illinois limited partnership (the “ERP Operating Partnership”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among AvalonBay Communities, Inc., a Maryland corporation (“AvalonBay”), Equity Residential, ERP Operating Partnership and Canopy Merger Sub LLC, a Maryland limited liability company and a direct wholly owned subsidiary of Equity Residential (“Merger Sub”). Upon the terms and subject to the conditions set forth in the Merger Agreement, (i) on the closing date but prior to the effective time of the merger (the "Effective Time"), AvalonBay will contribute certain assets (the "Asset Contribution") in exchange for units of partnership interest in ERP Operating Partnership that have, in the aggregate, a value equal to the fair market value of such contributed assets and (ii) following the Asset Contribution and at the Effective Time, AvalonBay will merge with and into Merger Sub, with Merger Sub surviving as a direct, wholly owned subsidiary of Equity Residential (the "Merger"). Immediately following the closing of the Merger, Merger Sub will merge with and into ERP Operating Partnership, with ERP Operating Partnership remaining as the surviving entity.

Equity Residential and ERP Operating Partnership are filing this Current Report on Form 8-K to provide certain financial information with respect to the proposed Merger. Included in this Current Report on Form 8-K are the unaudited pro forma condensed consolidated financial statements of Equity Residential and ERP Operating Partnership giving effect to the Merger (the “unaudited pro forma financial statements”), which include the Unaudited Pro Forma Condensed Consolidated Balance Sheets as of June 30, 2026 and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2025 and the six months ended June 30, 2026, which are included as Exhibit 99.1.

Immediately following the completion of the Merger, legacy AvalonBay stockholders are expected to own approximately 51% and legacy Equity Residential shareholders approximately 49% of the then outstanding Equity Residential common shares. After consideration of all applicable factors pursuant to the business combination accounting rules, the Merger results in a reverse acquisition in which Equity Residential is considered the "legal acquirer" because Equity Residential issues Equity Residential common shares to AvalonBay stockholders, while AvalonBay is the "accounting acquirer" based on the following indicators: (i) legacy AvalonBay stockholders will hold the largest portion of the ownership percentage in the combined company; and (ii) AvalonBay's senior management will comprise the majority of the executive management team of the combined company. Although Equity Residential is issuing Equity Residential common shares to AvalonBay stockholders for legal purposes, AvalonBay is treated as the buyer for accounting purposes with Equity Residential treated as the acquiree. Accordingly, the following Unaudited Pro Forma Condensed Consolidated Financial Statements present AvalonBay's historical balances and results, with Equity Residential's assets and liabilities recorded at estimated fair value.

The unaudited pro forma financial statements included in this Current Report on Form 8-K have been prepared for informational purposes only and on the basis of certain assumptions and estimates. They are subject to other uncertainties and do not purport to reflect what Equity Residential’s and ERP Operating Partnership’s actual results of operations or financial condition would have been had the merger been consummated on the dates assumed for purposes of such unaudited pro forma financial statements or to be indicative of Equity Residential’s or ERP Operating Partnership’s financial condition, results of operations or metrics as of or for any future date or period.

This Current Report on Form 8-K does not modify or update the consolidated financial statements of Equity Residential or ERP Operating Partnership included in their Annual Report on Form 10-K for the fiscal year ended December 31, 2025 or Quarterly Reports on Form 10-Q for the quarters ended March 31, 2026 or June 30, 2026. The information included in Exhibits 99.2, 99.3 and 99.4 was provided by AvalonBay.

Item 9.01. Financial Statements and Exhibits.


Exhibit Number		Exhibit

23.1		Consent of Ernst & Young LLP.

99.1		Unaudited Pro Forma Condensed Consolidated Financial Statements of Equity Residential and ERP Operating Partnership.

99.2		Audited consolidated balance sheets of AvalonBay as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, the related notes, and the related report of Ernst & Young LLP, AvalonBay's independent registered public accounting firm.

99.3		Unaudited condensed consolidated balance sheets of AvalonBay as of March 31, 2026 and December 31, 2025, the related condensed consolidated statements of operations, comprehensive income, equity and cash flows for the three months ended March 31, 2026 and 2025, and the related notes.


99.4		Unaudited condensed consolidated balance sheets of AvalonBay as of June 30, 2026 and December 31, 2025, the related condensed consolidated statements of operations, comprehensive income and equity for the six and three months ended June 30, 2026 and 2025, the condensed consolidated statements of cash flows for the six months ended June 30, 2026 and 2025, and the related notes.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

Cautionary Statement Regarding Forward-Looking Statements

In addition to historical information, this Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, which are based on current expectations, estimates and projections about the industry and markets in which Equity Residential and AvalonBay operate, as well as beliefs and assumptions of Equity Residential and AvalonBay. Words such as “anticipate,” “become,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “possible,” “predict,” “project,” “target,” “seek,” “shall,” “should,” “will,” or “would,” including variations of such words and similar expressions, are intended to identify forward-looking statements. All statements that address operating performance, events or developments that Equity Residential or AvalonBay expects or anticipates will occur in the future are forward-looking statements, including statements relating to any possible transaction between Equity Residential and AvalonBay, multifamily market conditions, development, redevelopment, acquisition or disposition activity, general conditions in the geographic areas where Equity Residential and AvalonBay operate and Equity Residential’s and AvalonBay’s respective debt, capital structure and financial position. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors that are difficult to predict and may cause the actual results to differ materially from future results expressed or implied by such forward-looking statements.

Important factors, risks and uncertainties that could cause actual results to differ materially from such plans, estimates or expectations include but are not limited to: (i) the parties’ ability to complete the proposed transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to Equity Residential’s and AvalonBay’s ability to obtain the required respective shareholder or stockholder, as applicable, approval, and the parties’ ability to satisfy the other conditions to consummating the proposed transaction; (ii) the inability to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction; (iii) the risk that Equity Residential’s and AvalonBay’s businesses will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; (iv) significant transaction costs and/or unknown or inestimable liabilities; (v) potential litigation relating to the proposed transaction that could be instituted against Equity Residential, AvalonBay or their trustees, directors, managers or officers, including resulting expense or delay and the effects of any outcomes related thereto; (vi) the risk that disruptions from the proposed transaction, including diverting the attention of Equity Residential and AvalonBay management from ongoing business operations, will harm Equity Residential’s and AvalonBay’s businesses during the pendency of the proposed transaction or otherwise; (vii) certain restrictions during the pendency of the business combination that may impact Equity Residential’s and AvalonBay’s ability to pursue certain business opportunities or strategic transactions; (viii) the possibility that the business combination may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (ix) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, including in circumstances requiring Equity Residential or AvalonBay to pay a termination fee; (x) the effect of the announcement of the proposed transaction on the ability of Equity Residential and AvalonBay to operate their respective businesses and retain and hire key personnel, and to maintain favorable business relationships; (xi) risks related to the market value of Equity Residential common shares to be issued in the proposed transaction; (xii) other risks related to the completion of the proposed transaction and actions related thereto; (xiii) potential business uncertainty, including changes to existing business relationships, during the pendency of the business combination or otherwise that could affect Equity Residential’s or AvalonBay’s financial performance; (xiv) legislative, regulatory and economic developments, including the level of new multifamily communities construction and development, government regulations and competition; (xv) unpredictability and severity of local, regional, national and international economic, political and catastrophic climates, conditions and events, including but not limited to acts of terrorism, outbreaks of war or hostilities or pandemics, as well as management’s response to any of the aforementioned factors; (xvi) changes in global financial markets, interest rates and foreign currency exchange rates; (xvii) increased or unanticipated competition affecting Equity Residential’s and AvalonBay’s properties; (xviii) risks associated with acquisitions, dispositions, development and redevelopment of properties; (xix) increased costs of labor and construction material; (xx) maintenance of real estate investment trust status, tax structuring and changes in income tax laws and rates; (xxi) environmental uncertainties, including risks of natural disasters; (xxii) those risks and uncertainties set forth in Equity Residential’s and AvalonBay’s Annual Reports on Form 10-K for the year ended December 31, 2025 under the headings “Forward-Looking Statements” and “Risk Factors,” as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by Equity Residential or AvalonBay, as the case may be, with the Securities and Exchange Commission ("SEC") from time to time, which are available via the SEC’s website at www.sec.gov; and (xxiii) those risks that are described in the registration statement on Form S-4 (File No. 333-297128) filed by Equity Residential with the SEC which includes the joint proxy statement of Equity Residential and AvalonBay that also constitutes a prospectus of Equity Residential in connection with the proposed transaction. There can be no assurance that the proposed transaction will be completed, or if it is

completed, that it will close within the anticipated time period. These factors should not be construed as exhaustive and should be read in conjunction with the other forward-looking statements. Forward-looking statements relate only to events as of the date on which the statements are made. Neither Equity Residential nor AvalonBay undertakes any obligation to publicly update or review any forward-looking statement except as required by law, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if Equity Residential’s and AvalonBay’s underlying assumptions prove to be incorrect, Equity Residential’s, AvalonBay’s and the combined company’s actual results may vary materially from what Equity Residential or AvalonBay may have expressed or implied by these forward-looking statements. Equity Residential and AvalonBay caution not to place undue reliance on any of Equity Residential’s or AvalonBay’s forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect Equity Residential or AvalonBay.

No Offer or Solicitation

This Current Report on Form 8-K is for informational purposes only and is not intended to, and shall not, constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	EQUITY RESIDENTIAL

Date: July 31, 2026	By:	/s/ Ian S. Kaufman
	Name:	Ian S. Kaufman
	Its:	Senior Vice President and Chief Accounting Officer
		(Principal Accounting Officer)


	ERP OPERATING LIMITED PARTNERSHIP BY: EQUITY RESIDENTIAL ITS GENERAL PARTNER

Date: July 31, 2026	By:	/s/ Ian S. Kaufman
	Name:	Ian S. Kaufman
	Its:	Senior Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

EX-23.1 2 eqr-ex23_1.htm EX-23.1 EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated February 27, 2026, with respect to the consolidated financial statements and schedule of AvalonBay Communities, Inc. included in this Form 8-K and incorporated by reference in the following Registration Statements:

(1) Registration Statements (Forms S-3 No. 333-287237, No. 333-199036, No. 333-204573, No. 333-178040, No. 333-175242, No. 333-151588, No. 333-142723, No. 333-141261, No. 333-135503, No. 333-100631, No. 333-63176, No. 333-80835, No. 333-72961, No. 333-12983, No. 333-06873, No. 33-97680, and No. 33-84974) of Equity Residential,

(2) Registration Statements (Forms S-4 No. 333-297128, No. 333-44576-01 and No. 333-35873) of Equity Residential,

(3) Registration Statement (Form S-8 No. 333-107244) pertaining to the 1996 Non-Qualified Employee Share Purchase Plan of Equity Residential,

(4) Registration Statement (Form S-8 No. 333-175173) pertaining to the 2011 Share Incentive Plan of Equity Residential,

(5) Registration Statement (Form S-8 No. 333-232630) pertaining to the 2019 Share Incentive Plan of Equity Residential,

(6) Registration Statement (Form S-3 No. 333-287237-01) of ERP Operating Limited Partnership, and

(7) Registration Statements (Forms S-4 No. 333-44576 and No. 333-36053) of ERP Operating Limited Partnership.

/s/ Ernst & Young LLP

Tysons, Virginia

July 31, 2026

EX-99.1 3 eqr-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Introduction

On May 20, 2026, AvalonBay Communities, Inc., a Maryland corporation ("AvalonBay"), Equity Residential, a Maryland real estate investment trust ("Equity Residential"), ERP Operating Limited Partnership, an Illinois limited partnership ("ERP Operating Partnership") and Canopy Merger Sub LLC, a Maryland limited liability company and a direct wholly owned subsidiary of Equity Residential ("Merger Sub") entered into an Agreement and Plan of Merger (the "Merger Agreement") to combine through a stock-for-stock merger (the "Merger") and form the combined company (the "Combined Company"). Upon the terms and subject to the conditions of the Merger Agreement, (i) on the closing date but prior to the effective time, AvalonBay will contribute certain assets in exchange for partnership interests in ERP Operating Partnership ("ERP Operating Partnership Units") that have, in the aggregate, a value equal to the fair market value of such contributed assets and (ii) following the asset contribution and at the effective time, AvalonBay will merge with and into Merger Sub, with Merger Sub surviving the Merger as a direct, wholly owned subsidiary of Equity Residential. Immediately following the closing of the Merger, Merger Sub will merge with and into ERP Operating Partnership, with ERP Operating Partnership remaining as the surviving entity.

Equity Residential is the general partner of, and as of June 30, 2026, owned an approximate 97.6% ownership interest in ERP Operating Partnership. ERP Operating Partnership Units can be exchanged on a one-for-one basis with common shares of beneficial interest, par value $0.01 per share, of Equity Residential ("Equity Residential Common Shares"). References to the "Parent Company" mean collectively Equity Residential and ERP Operating Partnership. The Parent Company refers to "Common Shares" and "Units" as equity securities for Equity Residential and "General Partner Units" and "Limited Partner Units" as equity securities for ERP Operating Partnership.

The Merger Agreement provides that each outstanding share of common stock of AvalonBay, par value $0.01 per share ("AvalonBay Common Stock") (other than shares of AvalonBay Common Stock held in treasury or held or owned by AvalonBay, Equity Residential or Merger Sub (collectively, the ("Cancelled Shares")) issued and outstanding immediately prior to the Merger will be converted at the effective time into the right to receive 2.793 Equity Residential Common Shares and cash in lieu of fractional shares, if any (the "Exchange Ratio"). This Exchange Ratio is fixed and will not be adjusted to reflect stock price changes prior to the consummation of the Merger. Accordingly, the value of the consideration to be received in exchange for each share of AvalonBay Common Stock will fluctuate with the market value of Equity Residential Common Shares until the Merger is completed.

Equity Residential and AvalonBay expect to complete the Merger in the second half of 2026, although Equity Residential and AvalonBay cannot assure completion by any particular date, if at all.

Immediately following the completion of the Merger, legacy AvalonBay stockholders are expected to own approximately 51% and legacy Equity Residential shareholders approximately 49% of the Combined Company. After consideration of all applicable factors pursuant to the business combination accounting rules, the Merger results in a reverse acquisition in which Parent Company is considered the “legal acquirer” because Equity Residential issues Equity Residential Common Shares to AvalonBay stockholders, while AvalonBay is the “accounting acquirer” based on the following indicators: (i) legacy AvalonBay stockholders will hold the largest portion of the ownership percentage in the Combined Company; and (ii) AvalonBay’s senior management, including its Chief Executive Officer and President, will comprise the majority of the executive management team of the Combined Company. Although Equity Residential is issuing Equity Residential Common Shares to AvalonBay stockholders for legal purposes, AvalonBay is treated as the buyer for accounting purposes with Parent Company treated as the acquiree. Accordingly, the following Unaudited Pro Forma Condensed Consolidated Financial Statements present AvalonBay’s historical balances and results, with Parent Company’s assets and liabilities recorded at estimated fair value.

On May 20, 2026, in connection with the Merger, ERP Operating Partnership entered into a commitment letter (the "Commitment Letter") with Morgan Stanley Senior Funding, Inc. ("MSSF"), Wells Fargo Securities, LLC and Wells Fargo Bank, National Association ("Wells Fargo Bank"), pursuant to which MSSF (and its designated affiliates) and Wells Fargo Bank committed to provide ERP Operating Partnership with, subject to the terms and conditions of the Commitment Letter, up to $2.0 billion of senior unsecured bridge loans (the "Bridge Facility"). The proceeds of the Bridge Facility, together with cash on hand and proceeds of commercial paper issuances, are expected to be available to fund any repayment or refinancing of ERP Operating Partnership’s existing indebtedness and AvalonBay’s existing indebtedness and to pay fees and expenses related to the Merger, subject to the satisfaction of customary conditions set forth in the Commitment Letter. The Bridge Facility is expected to initially bear interest on amounts drawn at a rate of SOFR + 0.725% per annum (subject to change based on credit ratings and the time the Bridge Facility remains outstanding) plus additional fees, and will mature 364 days following the closing of the Merger. The timing and amounts of borrowings under the Bridge Facility, if any, have not yet been determined. Therefore, the pro forma financial information does not give effect to the Bridge Facility. However, the pro forma financial information gives effect to the expected issuance of commercial paper to finance estimated transaction costs that will be incurred for the Merger.

Pro Forma Information

The accompanying Unaudited Pro Forma Condensed Consolidated Balance Sheets as of June 30, 2026 have been prepared as if the Merger had occurred as of that date. The accompanying Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2025 and for the six months ended June 30, 2026 have been prepared as if the Merger had occurred on January 1, 2025. This report combines the Unaudited Pro Forma Condensed Consolidated Financial Statements of Equity Residential and ERP Operating Partnership as Parent Company believes that combining them into this single report provides the following benefits:

•

enhances investors' understanding of the Parent Company 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 Equity Residential and ERP Operating Partnership; and

•

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Pro forma adjustments, and the assumptions on which they are based, are described in the accompanying “Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.” The pro forma adjustments and the preliminary fair value measurements as presented are based on estimates and certain information that is currently available. The total deemed consideration (calculated based on the fair value of shares of AvalonBay Common Stock as if AvalonBay had issued AvalonBay Common Stock to effect the Merger) and the assignment of fair values to Parent Company’s identifiable assets acquired and liabilities assumed are preliminary and based upon currently available information and certain assumptions, are subject to change and could vary materially from the actual amounts at the time the Merger is completed. The fair value allocation will be finalized subsequent to the Merger being consummated.

The pro forma information has been prepared in accordance with Article 11 of Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"), as amended by the SEC’s final rule, Release No. 33-10786, “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” All significant adjustments necessary to reflect the effects of the Merger are based on reasonable estimates using the information currently available. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the combined operating results or financial position that would have occurred if such transactions had been consummated on the dates and in accordance with the assumptions described herein, nor is it necessarily indicative of future operating results or financial position of the Combined Company.

The Unaudited Pro Forma Condensed Consolidated Financial Statements, although helpful in illustrating the financial position and results of operations of the Combined Company under one set of assumptions, do not reflect the benefits of expected cost savings (or associated costs to achieve such savings), opportunities to earn additional revenue and any costs necessary to earn additional revenue, or other factors that may result as a consequence of the Merger and do not attempt to predict or suggest future results.

You are urged to read the pro forma information below together with the historical audited and unaudited consolidated financial statements of each of AvalonBay and Parent Company and the related notes thereto.

AVALONBAY AND EQUITY RESIDENTIAL

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2026
(Amounts in thousands)


	AvalonBay Historical		Equity Residential Historical (A)			Pro Forma Merger Adjustments				Other Pro Forma Adjustments				Combined Company Pro Forma


ASSETS
Real estate, net	$	20,974,899	$	18,986,902		$	14,969,138		(C)	$	—			$	54,930,939
Unconsolidated investments		199,046		323,342			32,260		(D)		—				554,648
Cash and cash equivalents		80,682		36,405			—				(50,470	)	(E)		66,617
Restricted cash		165,436		106,975			—				—				272,411
Right-of-use lease assets		144,141		450,474			(3,504	)	(F)		—				591,111
Other assets		736,147		371,479			(43,624	)	(G)		—				1,064,002
Total assets	$	22,300,351	$	20,275,577		$	14,954,270			$	(50,470	)		$	57,479,728

LIABILITIES AND EQUITY
Liabilities:
Unsecured debt, net	$	7,408,395	$	6,002,002		$	(314,148	)	(H)	$	—			$	13,096,249
Variable rate unsecured credit facility and commercial paper, net		915,786		667,846			(66	)	(H)		689,530		(H)		2,273,096
Mortgage notes payable, net		700,599		1,591,821			(56,299	)	(H)		—				2,236,121
Dividends payable		256,954		269,489			—				—				526,443
Accrued expenses and other liabilities		627,515		554,009			—				—				1,181,524
Lease liabilities		162,444		303,831			(53,860	)	(F)		—				412,415
Total liabilities		10,071,693		9,388,998			(424,373	)			689,530				19,725,848

Redeemable Noncontrolling Interests – ERP Operating Partnership		—		189,941			—		(M)		—				189,941
Equity:
Shareholders' equity:
Preferred shares		—		17,155			—				—				17,155
Common shares		1,419		3,749			(3,749	)	(I)		6,287		(I)		7,706
Additional paid-in-capital		11,739,908		9,840,190			15,663,270		(I)		(6,287	)	(I)		37,237,081
Accumulated other comprehensive income		38,896		2,748			(2,748	)	(J)		—				38,896
Retained earnings		242,188		651,138			(651,138	)	(K)		(740,000	)	(K)		(497,812	)
Total shareholders’ equity		12,022,411		10,514,980			15,005,635				(740,000	)			36,803,026
Noncontrolling Interests:
DownREIT Units and Partially Owned Properties		206,247		(1,158	)		116,965		(L)		—				322,054
ERP Operating Partnership		—		182,816			256,043		(M)		—				438,859
Total Noncontrolling Interests		206,247		181,658			373,008				—				760,913
Total equity		12,228,658		10,696,638			15,378,643				(740,000	)			37,563,939
Total liabilities and equity	$	22,300,351	$	20,275,577		$	14,954,270			$	(50,470	)		$	57,479,728

AVALONBAY AND EQUITY RESIDENTIAL

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six months ended June 30, 2026
(in thousands, except per share data)


	AvalonBay Historical			Equity Residential Historical (A)			Pro Forma Merger Adjustments				Other Pro Forma Adjustments				Combined Company Pro Forma


REVENUES
Total revenue	$	1,548,047		$	1,565,326		$	—		(N)	$	—			$	3,113,373

EXPENSES
Operating expenses, excluding property taxes		394,188			402,698			—				—				796,886
Property taxes		180,223			205,324			—				—				385,547
Expensed transaction, development and other costs		28,011			1,610			—				—				29,621
Interest expense, net		141,559			161,883			19,635		(P)		15,289		(P)		338,366
Depreciation expense		466,079			493,875			150,529		(Q)		—				1,110,483
General and administrative expenses		49,214			78,045			—				—				127,259
Total expenses		1,259,274			1,343,435			170,164				15,289				2,788,162

Income (loss) from investments in unconsolidated entities		1,120			5,997			—				—				7,117
Structured Investment Program interest income		15,185			—			—				—				15,185
Gain (loss) on sale of real estate and other income		179,881			(16,214	)		—				—				163,667
Income before income taxes		484,959			211,674			(170,164	)			(15,289	)			511,180
Income tax benefit (expense)		224			(833	)		—				—				(609	)
Income from continuing operations		485,183			210,841			(170,164	)			(15,289	)			510,571
Net income		485,183			210,841			(170,164	)			(15,289	)			510,571
Net (income) loss attributable to Noncontrolling Interests:
DownREIT Units and Partially Owned Properties		(3,733	)		(2,173	)		1,054		(R)		—				(4,852	)
ERP Operating Partnership		—			(4,454	)		(1,203	)	(S)		164		(S)		(5,493	)
Preferred distributions		—			(711	)		—				—				(711	)
Net income attributable to common shareholders	$	481,450		$	203,503		$	(170,313	)		$	(15,125	)		$	499,515

Earnings per share – basic:	$	3.43		$	0.54										$	0.65		(T)
Earnings per share – diluted:	$	3.43		$	0.54										$	0.65		(T)

AVALONBAY AND EQUITY RESIDENTIAL

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 2025
(in thousands, except per share data)


	AvalonBay Historical			Equity Residential Historical (A)			Pro Forma Merger Adjustments				Other Pro Forma Adjustments				Combined Company Pro Forma


REVENUES
Total revenue	$	3,040,725		$	3,095,208		$	—		(N)	$	—			$	6,135,933

EXPENSES
Operating expenses, excluding property taxes		778,171			748,036			—				—				1,526,207
Property taxes		342,743			401,457			—				—				744,200
Expensed transaction, development and other costs		12,122			7,734			—				740,000		(O)		759,856
Interest expense, net		259,181			309,626			38,663		(P)		35,181		(P)		642,651
Depreciation expense		913,376			1,010,400			909,766		(Q)		—				2,833,542
General and administrative expenses		86,679			114,029			—				—				200,708
Total expenses		2,392,272			2,591,282			948,429				775,181				6,707,164

Income (loss) from investments in unconsolidated entities		39,691			6,433			—				—				46,124
Structured Investment Program interest income		27,476			—			—				—				27,476
Gain (loss) on sale of real estate and other income		339,844			643,175			—				—				983,019
Income before income taxes		1,055,464			1,153,534			(948,429	)			(775,181	)			485,388
Income tax benefit (expense)		1,135			(1,585	)		—				—				(450	)
Income from continuing operations		1,056,599			1,151,949			(948,429	)			(775,181	)			484,938
Net income		1,056,599			1,151,949			(948,429	)			(775,181	)			484,938
Net (income) loss attributable to Noncontrolling Interests:
DownREIT Units and Partially Owned Properties		(5,298	)		(4,455	)		2,433		(R)		—				(7,320	)
ERP Operating Partnership		—			(27,405	)		13,901		(S)		8,307		(S)		(5,197	)
Preferred distributions		—			(1,422	)		—				—				(1,422	)
Net income attributable to common shareholders	$	1,051,301		$	1,118,667		$	(932,095	)		$	(766,874	)		$	470,999

Earnings per share – basic:	$	7.40		$	2.95										$	0.61		(T)
Earnings per share – diluted:	$	7.40		$	2.94										$	0.60		(T)

AVALONBAY AND ERP OPERATING PARTNERSHIP

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2026
(Amounts in thousands)


	AvalonBay Historical (B)		ERP Operating Partnership Historical (A)			Pro Forma Merger Adjustments				Other Pro Forma Adjustments				Combined Company Pro Forma


ASSETS
Real estate, net	$	20,974,899	$	18,986,902		$	14,969,138		(C)	$	—			$	54,930,939
Unconsolidated investments		199,046		323,342			32,260		(D)		—				554,648
Cash and cash equivalents		80,682		36,405			—				(50,470	)	(E)		66,617
Restricted cash		165,436		106,975			—				—				272,411
Right-of-use lease assets		144,141		450,474			(3,504	)	(F)		—				591,111
Other assets		736,147		371,479			(43,624	)	(G)		—				1,064,002
Total assets	$	22,300,351	$	20,275,577		$	14,954,270			$	(50,470	)		$	57,479,728

LIABILITIES AND EQUITY
Liabilities:
Unsecured debt, net	$	7,408,395	$	6,002,002		$	(314,148	)	(H)	$	—			$	13,096,249
Variable rate unsecured credit facility and commercial paper, net		915,786		667,846			(66	)	(H)		689,530		(H)		2,273,096
Mortgage notes payable, net		700,599		1,591,821			(56,299	)	(H)		—				2,236,121
Dividends payable		256,954		269,489			—				—				526,443
Accrued expenses and other liabilities		627,515		554,009			—				—				1,181,524
Lease liabilities		162,444		303,831			(53,860	)	(F)		—				412,415
Total liabilities		10,071,693		9,388,998			(424,373	)			689,530				19,725,848

Redeemable Limited Partners		—		189,941			—		(M)		—				189,941
Capital:
Partners' capital:
Preference Units		—		17,155			—				—				17,155
General Partner		11,983,515		10,495,077			15,008,383		(I)(K)		(740,000	)	(I)(K)		36,746,975
Limited Partners		—		182,816			256,043		(M)		—				438,859
Accumulated other comprehensive income		38,896		2,748			(2,748	)	(J)		—				38,896
Total partners' capital		12,022,411		10,697,796			15,261,678				(740,000	)			37,241,885
Noncontrolling Interests:
DownREIT Units and Partially Owned Properties		206,247		(1,158	)		116,965		(L)		—				322,054
Total Noncontrolling Interests		206,247		(1,158	)		116,965				—				322,054
Total capital		12,228,658		10,696,638			15,378,643				(740,000	)			37,563,939
Total liabilities and capital	$	22,300,351	$	20,275,577		$	14,954,270			$	(50,470	)		$	57,479,728

AVALONBAY AND ERP OPERATING PARTNERSHIP

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six months ended June 30, 2026
(in thousands, except per Unit data)


	AvalonBay Historical (B)			ERP Operating Partnership Historical (A)			Pro Forma Merger Adjustments				Other Pro Forma Adjustments				Combined Company Pro Forma


REVENUES
Total revenue	$	1,548,047		$	1,565,326		$	—		(N)	$	—			$	3,113,373

EXPENSES
Operating expenses, excluding property taxes		394,188			402,698			—				—				796,886
Property taxes		180,223			205,324			—				—				385,547
Expensed transaction, development and other costs		28,011			1,610			—				—				29,621
Interest expense, net		141,559			161,883			19,635		(P)		15,289		(P)		338,366
Depreciation expense		466,079			493,875			150,529		(Q)		—				1,110,483
General and administrative expenses		49,214			78,045			—				—				127,259
Total expenses		1,259,274			1,343,435			170,164				15,289				2,788,162

Income (loss) from investments in unconsolidated entities		1,120			5,997			—				—				7,117
Structured Investment Program interest income		15,185			—			—				—				15,185
Gain (loss) on sale of real estate and other income		179,881			(16,214	)		—				—				163,667
Income before income taxes		484,959			211,674			(170,164	)			(15,289	)			511,180
Income tax benefit (expense)		224			(833	)		—				—				(609	)
Income from continuing operations		485,183			210,841			(170,164	)			(15,289	)			510,571
Net income		485,183			210,841			(170,164	)			(15,289	)			510,571
DownREIT Units and Partially Owned Properties		(3,733	)		(2,173	)		1,054		(R)		—				(4,852	)
Net income attributable to controlling interests	$	481,450		$	208,668		$	(169,110	)		$	(15,289	)		$	505,719
ALLOCATION OF NET INCOME:
Preference Units	$	—		$	711		$	—			$	—			$	711

General Partner	$	481,450		$	203,503		$	(170,313	)		$	(15,125	)		$	499,515
Limited Partners		—			4,454			1,203		(S)		(164	)	(S)		5,493
Net income available to Units	$	481,450		$	207,957		$	(169,110	)		$	(15,289	)		$	505,008

Earnings per Unit – basic:	$	3.43		$	0.54										$	0.65		(U)
Earnings per Unit – diluted:	$	3.43		$	0.54										$	0.65		(U)

AVALONBAY AND ERP OPERATING PARTNERSHIP

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year ended December 31, 2025
(in thousands, except per Unit data)


	AvalonBay Historical (B)			ERP Operating Partnership Historical (A)			Pro Forma Merger Adjustments				Other Pro Forma Adjustments				Combined Company Pro Forma


REVENUES
Total revenue	$	3,040,725		$	3,095,208		$	—		(N)	$	—			$	6,135,933

EXPENSES
Operating expenses, excluding property taxes		778,171			748,036			—				—				1,526,207
Property taxes		342,743			401,457			—				—				744,200
Expensed transaction, development and other costs		12,122			7,734			—				740,000		(O)		759,856
Interest expense, net		259,181			309,626			38,663		(P)		35,181		(P)		642,651
Depreciation expense		913,376			1,010,400			909,766		(Q)		—				2,833,542
General and administrative expenses		86,679			114,029			—				—				200,708
Total expenses		2,392,272			2,591,282			948,429				775,181				6,707,164

Income (loss) from investments in unconsolidated entities		39,691			6,433			—				—				46,124
Structured Investment Program interest income		27,476			—			—				—				27,476
Gain (loss) on sale of real estate and other income		339,844			643,175			—				—				983,019
Income before income taxes		1,055,464			1,153,534			(948,429	)			(775,181	)			485,388
Income tax benefit (expense)		1,135			(1,585	)		—				—				(450	)
Income from continuing operations		1,056,599			1,151,949			(948,429	)			(775,181	)			484,938
Net income		1,056,599			1,151,949			(948,429	)			(775,181	)			484,938
DownREIT Units and Partially Owned Properties		(5,298	)		(4,455	)		2,433		(R)		—				(7,320	)
Net income attributable to controlling interests	$	1,051,301		$	1,147,494		$	(945,996	)		$	(775,181	)		$	477,618
ALLOCATION OF NET INCOME:
Preference Units	$	—		$	1,422		$	—			$	—			$	1,422

General Partner	$	1,051,301		$	1,118,667		$	(932,095	)		$	(766,874	)		$	470,999
Limited Partners		—			27,405			(13,901	)	(S)		(8,307	)	(S)		5,197
Net income available to Units	$	1,051,301		$	1,146,072		$	(945,996	)		$	(775,181	)		$	476,196

Earnings per Unit – basic:	$	7.40		$	2.95										$	0.61		(U)
Earnings per Unit – diluted:	$	7.40		$	2.94										$	0.60		(U)

NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Basis of Pro Forma Presentation

For purposes of the Unaudited Pro Forma Condensed Consolidated Financial Statements, which we refer to as the unaudited pro forma financial statements, we have assumed a total preliminary purchase price for the Merger of approximately $25.5 billion, which for accounting purposes as a reverse acquisition, consists of shares of AvalonBay Common Stock issued.

The pro forma adjustments that give effect to the Merger assume the acquisition of Parent Company is a business combination, with AvalonBay considered the accounting acquirer of Parent Company. Accordingly, the purchase price is allocated to the underlying Parent Company tangible and intangible assets acquired and liabilities assumed based on their respective fair values.

We expect that the Merger will create operational and general and administrative cost savings, including property management costs, investment management costs, and costs associated with corporate administration and infrastructure, including duplicative public company costs. There can be no assurance that we will be successful in achieving these anticipated cost savings. Therefore, the unaudited pro forma financial statements included herein do not give effect to any synergies or dis-synergies, potential cost reductions or other operating efficiencies expected to result from the Merger based on management’s plans or intent after the Merger.

To the extent identified, certain reclassifications have been reflected in the unaudited pro forma financial statements to conform Parent Company’s financial statement presentation to that of AvalonBay as the accounting acquirer. However, consistent with the requirements of reverse acquisition accounting, the equity structure presented reflects that of the legal acquirer. Accordingly, because AvalonBay does not have a limited partnership capital structure, certain reclassifications have been reflected in the unaudited pro forma financial statements to conform the capital portion of AvalonBay's financial statement presentation to that of ERP Operating Partnership. The unaudited pro forma financial statements may not reflect all the adjustments necessary to conform Parent Company’s accounting policies to those of AvalonBay due to limitations on the availability of information as of the date of this report.

(A)

The Parent Company historical amounts include reclassification of certain Parent Company balances to conform to the AvalonBay presentation as described below:

Balance Sheet:

•

Parent Company’s presentation included separate line items for Accounts payable and accrued expenses and Other liabilities. These balances have been reclassified to Accrued expenses and other liabilities to conform to AvalonBay’s presentation.

Statement of Operations:

•

Parent Company’s presentation included asset management income and other income as a component of Interest and other income. These balances have been reclassified to Total revenue.


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
Rental income (historical)	$	1,564,895	$	3,093,959
Add: Portion of Interest and other income		431		1,249
Total Revenue, as presented	$	1,565,326	$	3,095,208

•

Parent Company’s Property and maintenance and Property management line items have been reclassified to Operating expenses, excluding property taxes. Further, insurance from Parent Company’s Property taxes and insurance and a portion of Parent Company’s Other expenses line item primarily related to advocacy costs have been reclassified to Operating expenses, excluding property taxes.


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
Property and maintenance (historical)	$	292,410	$	564,704
Property management (historical)		73,290		133,369
Add: Insurance from Real estate taxes and insurance		33,959		48,997
Add: Portion of Other expenses		3,039		966
Operating expenses, excluding property taxes, as presented	$	402,698	$	748,036

•

Parent Company’s presentation included Real estate taxes and insurance within one line item. Insurance costs have been reclassified to Operating expenses, excluding property taxes.


	Six Months Ended June 30, 2026			Year Ended December 31, 2025
	Six Months Ended June 30, 2026			Year Ended December 31, 2025
Real estate taxes and insurance	$	239,283		$	450,454
Less: Insurance		(33,959	)		(48,997	)
Property taxes, as presented	$	205,324		$	401,457

•

Parent Company’s presentation included transaction and pursuit costs of $1.6 million and $7.7 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively, as part of the Other expenses line item. Transaction and pursuit costs have been reclassified to Expensed transaction, development and other costs.

•

Parent Company’s presentation separately disclosed interest income within Interest and other income and non-debt-related interest expense and bank fees within Other expenses. AvalonBay’s presentation discloses Interest expense, net which includes all interest expense and bank fees, and is net of interest income. Parent Company’s interest income, non-debt-related interest expense and bank fees were reclassified to Interest expense, net.


	Six Months Ended June 30, 2026			Year Ended December 31, 2025
	Six Months Ended June 30, 2026			Year Ended December 31, 2025
Interest expense incurred, net (historical)	$	159,832		$	306,798
Amortization of deferred financing costs (historical)		4,290			8,768
Less: Portion of Interest and other income		(3,843	)		(8,976	)
Add: Portion of Other expenses		1,604			3,036
Interest expense, net, as presented	$	161,883		$	309,626

•

Parent Company’s presentation of Other expenses included various litigation and other settlement costs that AvalonBay classifies as part of General and administrative expenses.


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
General and administrative (historical)	$	33,505	$	65,280
Add: Portion of Other expenses		44,540		48,749
General and administrative, as presented	$	78,045	$	114,029

•

Parent Company’s presentation includes realized and unrealized gains and losses on investment securities as part of Interest and other income. These amounts were reclassified to Income from unconsolidated investments.


	Six Months Ended June 30, 2026			Year Ended December 31, 2025
	Six Months Ended June 30, 2026			Year Ended December 31, 2025
Income (loss) from investments in unconsolidated entities (historical)	$	(4,360	)	$	(18,915	)
Add: Portion of Interest and other income		10,357			25,348
Income from unconsolidated investments, as presented	$	5,997		$	6,433

•

Parent Company’s presentation separately disclosed Net gain (loss) on sale of real estate properties and Net gain (loss) on sale of land parcels. These amounts were reclassified to Gain (loss) on sale of real estate and other income along with a portion of Interest and other income related to miscellaneous one-time tax credits.


	Six Months Ended June 30, 2026			Year Ended December 31, 2025
	Six Months Ended June 30, 2026			Year Ended December 31, 2025
Net gain (loss) on sales of real estate properties (historical)	$	(16,776	)	$	626,388
Net gain (loss) on sales of land parcels (historical)		—			(80	)
Add: Portion of Interest and other income		562			16,867
Gain (loss) on sale of real estate and other income	$	(16,214	)	$	643,175

(B)

The AvalonBay historical presentation includes reclassification of certain AvalonBay financial statement line items to conform to the presentation of a limited partnership as described below:

Balance Sheet:

•

AvalonBay's presentation of Equity - Common shares, Equity - Additional paid-in capital, and Equity - Retained earnings have been reclassified in total as Partners' Capital - General Partner.


	As of June 30, 2026
Equity - Common shares (historical)	$	1,419
Equity - Additional paid-in-capital (historical)		11,739,908
Equity - Retained earnings (historical)		242,188
Partners' Capital - General Partner, as presented	$	11,983,515

•

AvalonBay's presentation included $12.0 billion on the Total shareholders' equity line item. This amount has been reclassified as Total partners' capital.

•

AvalonBay's presentation included $12.2 billion on the Total equity line item. This amount has been reclassified as Total capital.

•

AvalonBay's presentation included $22.3 billion on the Total liabilities and equity line item. This amount has been reclassified as Total liabilities and capital.

Statement of Operations:

•

AvalonBay's presentation included Net income attributable to common shareholders of $481.5 million and $1.1 billion for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively. These amounts have been reclassified as Net income attributable to controlling interests, Allocation of net income to General Partner, and Net income available to Units.

The unaudited pro forma adjustments are based on preliminary estimates, accounting judgments and currently available assumptions that AvalonBay and Parent Company’s management believes are reasonable. All significant adjustments necessary to reflect the effects of the Merger are based on reasonable estimates using the information currently available.

Transaction Costs

For purposes of the pro forma information, adjustments for the estimated transaction costs for the Merger have been included. The estimated transaction and integration costs ("Transaction Costs") for both AvalonBay and Parent Company are expected to be approximately $740.0 million in the aggregate, comprised of (i) real estate transfer taxes, (ii) advisory fees, (iii) legal and accounting and other professional fees, (iv) financing costs, and (v) executive change-in-control and severance payments for executives not expected to continue with the Combined Company. These Transaction Costs are expensed as incurred and are reflected as a pro forma adjustment to the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2025. These Transaction Costs estimates are preliminary and subject to change as additional information becomes available; actual costs incurred may differ materially from these estimates. The Transaction Costs, together with the associated interest expense on the commercial paper issued to fund them, are non-recurring items directly attributable to the Merger and are not expected to affect the Combined Company's results of operations beyond the twelve months following the closing of the Merger.

The unaudited pro forma financial statements do not reflect: (i) non-executive employee severance, redundancy or workforce reduction costs, (ii) technology, systems integration or data migration costs, (iii) any cost savings or operating synergies that the Combined Company may realize following the Merger or the costs necessary to achieve such synergies or (iv) any dis-synergies that may result from the Merger.

Note 2: Significant Accounting Policies

The accounting policies used in the preparation of these unaudited pro forma financial statements are those set out in AvalonBay’s unaudited consolidated financial statements as of and for the six months ended June 30, 2026 and AvalonBay’s audited consolidated financial statements for the year ended December 31, 2025. Based on the procedures performed to date, AvalonBay and Parent Company’s management have not identified any significant accounting policy differences expected to have a material impact on the pro forma financial information. A more comprehensive review will be completed prior to the closing date.

AvalonBay will continue to conduct a more detailed review of Parent Company’s accounting policies to determine if differences in accounting policies require further reclassification or adjustment of Parent Company’s assets, liabilities or noncontrolling interests, or reclassification or adjustment of results of operations to conform to AvalonBay’s accounting policies and classifications. Therefore, AvalonBay may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on the unaudited pro forma financial statements. In certain cases, the information necessary to evaluate the differences in accounting policies and the impacts thereof may not be available until after the closing date.

Note 3: Preliminary Purchase Price and Consideration

As AvalonBay is the accounting acquirer, the calculation of the purchase price for accounting purposes is based on shares of AvalonBay Common Stock. However, under the terms of the Merger Agreement, each share of AvalonBay Common Stock (other than the Cancelled Shares) issued and outstanding immediately prior to the Merger will be converted at the effective time into the right to receive 2.793 Equity Residential Common Shares, plus cash in lieu of fractional shares, if any. The conversion would result in approximately 770.6 million common shares of the Combined Company outstanding following the Merger, based on the number of shares of AvalonBay Common Stock and Equity Residential Common Shares outstanding in each case as of June 30, 2026.

The estimated aggregate consideration has been determined based on the closing price of shares of AvalonBay Common Stock on July 15, 2026, the latest practicable date prior to the date of this report, of $190.29.

The pro forma financial information reflects estimated aggregate consideration of approximately $25.5 billion for the Merger, as calculated below due to AvalonBay being the accounting acquirer (in thousands, except price per share):


Total estimated common shares of Combined Company		770,588
Equivalent pre-exchange shares of AvalonBay		275,900
Less: Outstanding shares of AvalonBay as of June 30, 2026		(141,876	)
Hypothetical AvalonBay shares to be issued to acquire Parent Company as of June 30, 2026		134,024
AvalonBay share price as of July 15, 2026	$	190.29
Total estimated aggregate consideration	$	25,503,460

The above estimated aggregate consideration excludes an estimate for the fair value of the pre-combination portion of Equity Residential’s share-based compensation awards, as this amount is not expected to be material. In addition, we have not included an adjustment to the Unaudited Pro Forma Condensed Consolidated Statements of Operations to reflect the change in compensation expense as a result of the estimated fair value of Equity Residential’s unamortized share-based compensation awards attributable to the post-combination period as the impact is not expected to be material.

The actual purchase price will fluctuate with the market price of shares of AvalonBay Common Stock until the Merger is consummated. As a result, the final purchase price could differ significantly from the current estimate, which could materially impact the unaudited pro forma financial statements.

The following table presents the changes to the value of the consideration for the Merger and the total preliminary estimated purchase price based on a ten percent (10%) increase and decrease in the price per share of AvalonBay Common Stock (in thousands, except the per share price of AvalonBay Common Stock) and 134,024,000 shares to be issued. Changes in share price and the value of the consideration could impact the fair value of the acquired real estate assets and related depreciation recognized in the Combined Company’s financial statements. These estimates are preliminary and subject to change upon finalization of the purchase price allocation.


	Price of AvalonBay Common Stock		Estimated Aggregate Consideration
	Price of AvalonBay Common Stock		Estimated Aggregate Consideration
AvalonBay share price as of July 15, 2026	$	190.29	$	25,503,460
Decrease of 10%	$	171.26	$	22,953,114
Increase of 10%	$	209.32	$	28,053,807

Note 4: Preliminary Purchase Price Allocation

The preliminary estimated purchase price has been allocated to the assets acquired and liabilities assumed for purposes of these unaudited pro forma financial statements, based on their fair values, assuming the Merger was completed on June 30, 2026. The final fair values will be based upon valuations and other analyses for which there is currently insufficient information to make a definitive valuation. Accordingly, the purchase price allocation adjustments are preliminary and have been made solely for the purpose of providing these unaudited pro forma financial statements. The final purchase price allocation will be determined after the Merger is completed and all information necessary to determine the fair value of Parent Company’s assets and liabilities has been received. As a result, the final acquisition accounting adjustments could differ materially from the unaudited pro forma adjustments presented herein.

The preliminary estimated purchase price of Parent Company (as calculated in the manner described above) is allocated to the assets to be acquired and the liabilities to be assumed on the following preliminary basis (in thousands):


Real Estate, net	$	33,956,040
Unconsolidated investments		355,602
Cash and cash equivalents		36,405
Restricted cash		106,975
Right-of-use lease assets		446,970
Other assets		327,855
Unsecured debt, net		(5,687,854	)
Variable rate unsecured credit facility and commercial paper, net		(667,780	)
Mortgage notes payable, net		(1,535,522	)
Dividends payable		(269,489	)
Accrued expenses and other liabilities		(554,009	)
Lease liabilities		(249,971	)
Redeemable Noncontrolling Interests - ERP Operating Partnership		(189,941	)
Preferred shares		(17,155	)
Noncontrolling Interests - Partially Owned Properties		(115,807	)
Noncontrolling Interests - ERP Operating Partnership		(438,859	)
Total estimated aggregate consideration	$	25,503,460

Note 5: Pro Forma Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance Sheet

(C)

Real estate, net

The real estate assets to be acquired by AvalonBay through the Merger are reflected in the Unaudited Pro Forma Condensed Consolidated Balance Sheet based on a preliminary estimated fair value using a discounted cash flow analysis. The real estate assets acquired generally consist of land and improvements, buildings and improvements, in-place leases and furniture, fixtures and equipment. The adjustments reflected in the Unaudited Pro Forma Condensed Consolidated Balance Sheet represent the differences between the preliminary fair value of the multifamily property assets to be acquired by AvalonBay through the Merger and Parent Company’s historical balances for investment in real estate, net of accumulated depreciation. Parent Company’s historical accumulated depreciation was eliminated since the assets are recognized and presented at fair value.

(D)

Unconsolidated investments

The interests in unconsolidated investments to be acquired by AvalonBay through the Merger are reflected in the Unaudited Pro Forma Condensed Consolidated Balance Sheet based on a preliminary estimated fair value. Parent Company’s historical unconsolidated investments in real estate assets have been adjusted to their estimated fair value based on Parent Company’s ownership percentage of the estimated total fair value of the real estate assets valued using a discounted cash flow approach, net of the estimated total fair value of the related debt. Parent Company’s historical unconsolidated investments in real estate technology funds/companies have been adjusted to the estimated fair value of Parent Company’s ownership percentage in the funds’ holdings as reported by the funds/companies. Income (loss) from unconsolidated entities is not expected to be materially different as a result of these adjustments.

(E)

Cash and cash equivalents

In connection with the Merger, it is expected that Parent Company will issue commercial paper to cover Merger Transaction Costs. The aggregate Transaction Costs for both AvalonBay and Parent Company are expected to be approximately $740.0 million, as described above. The pro forma adjustment to cash and cash equivalents reflects (i) the receipt of gross proceeds of $740.0 million from the issuance of commercial paper, less (ii) the original issue discount of $50.5 million associated with the issuance of the commercial paper (interest expense) and (iii) the payment of $740.0 million of Transaction Costs. The following table summarizes the pro forma adjustment (in thousands):


	June 30, 2026
Issuance of commercial paper	$	740,000
Original issue discount on commercial paper (interest expense)		(50,470	)
Payment of Transaction Costs		(740,000	)
Total pro forma adjustment	$	(50,470	)

(F)

Right-of-use lease assets and Lease liabilities

The right-of-use lease assets and lease liabilities are related to ground and corporate office leases for which Parent Company is the lessee as of June 30, 2026. These leases, which will be acquired by AvalonBay through the Merger, are reflected as if the leases are new as of June 30, 2026. The lease liabilities are initially measured at the present value of the remaining contractual lease payments using AvalonBay’s incremental borrowing rate as the discount rate, as the rates implicit in the

leases and the incremental borrowing rate of the Combined Company are not currently readily determinable. The weighted average discount rate used was 5.9%. The right-of-use lease assets are initially measured at an amount equal to the lease liability, adjusted for prepaid amounts and off-market lease intangibles. As the fair value of off-market lease intangibles as of June 30, 2026 are not expected to differ materially from Parent Company’s historical off-market lease intangible balances as of June 30, 2026, the related lease expense is not expected to materially change. These amounts are preliminary and subject to change upon finalization of the fair value allocation following the completion of the Merger.

(G)

Other assets

The pro forma adjustment for Other assets included the elimination of historical carrying values for balances that are not treated as separately recognized net assets as well as the fair value of Parent Company’s equity investments. The following table summarizes the pro forma adjustment (in thousands):


	June 30, 2026
Straight-line rents receivable	$	(30,914	)
Line of credit deferred financing fees		(12,710	)
Total pro forma adjustment	$	(43,624	)

(H)

Unsecured debt, net, Variable rate unsecured credit facility and commercial paper, net, and Mortgage notes payable, net

The pro forma adjustments to debt balances reflect the estimated fair value and are inclusive of the elimination of historical unamortized deferred financing costs and discounts of $60.1 million which will not be a component of the net assets acquired by the Combined Company. In addition, in connection with the Merger, it is expected that Parent Company will issue $740.0 million in commercial paper to cover expected Transaction Costs, as described above. The amount and form of the borrowings has not yet been finalized, and AvalonBay and Parent Company continue to evaluate available debt financing alternatives. These amounts are preliminary and subject to change upon completion of the Merger. The pro forma adjustments for debt include the following (in thousands):


	Elimination of Historical Amounts		Recognition of Post-Merger Amounts			Net Pro Forma Merger Adjustments			Debt Transaction Costs		Total Pro Forma Adjustments
	Elimination of Historical Amounts		Recognition of Post-Merger Amounts			Net Pro Forma Merger Adjustments			Debt Transaction Costs		Total Pro Forma Adjustments
Unsecured debt, net	$	40,023	$	(354,171	)	$	(314,148	)	$	—	$	(314,148	)
Variable rate unsecured credit facility and commercial paper, net		154		(220	)		(66	)		689,530		689,464
Mortgage notes payable, net		19,971		(76,270	)		(56,299	)		—		(56,299	)
	$	60,148	$	(430,661	)	$	(370,513	)	$	689,530	$	319,017

The unsecured debt of AvalonBay that will be assumed by ERP Operating Partnership if it consummates the post-closing merger with Merger Sub (as successor to AvalonBay following the Merger of AvalonBay with and into Merger Sub), with ERP Operating Partnership surviving such post-closing merger as the surviving entity, will rank equally with all of ERP Operating Partnership’s other present and future unsecured and unsubordinated indebtedness, but will be effectively subordinated to ERP Operating Partnership's secured indebtedness and will not be the obligation of any of ERP Operating Partnership's subsidiaries.

(I)

Common shares and Additional paid-in capital/General partner's capital

As AvalonBay is the accounting acquirer in this reverse acquisition, the pro forma adjustment reflects a deemed equity issuance measured at the fair value of AvalonBay Common Stock as of July 15, 2026 with the legal capital structure of the Combined Company reflected using Equity Residential’s Common Share/limited partnership structure.

As such, the 396.3 million Equity Residential Common Shares issued to AvalonBay stockholders are recorded at $0.01 par value per share, with the excess of deemed fair value over par recorded to additional paid-in capital. AvalonBay’s historical par value of $1.4 million is eliminated and Equity Residential’s existing 374.3 million Common Shares outstanding are retained at their historical par value.

Additional paid-in capital for the Combined Company is comprised of AvalonBay's historical additional paid-in-capital balance of $11.7 billion and the total estimated consideration of $25.5 billion for the acquisition of Parent Company (which creates an adjustment of $15.7 billion of additional paid-in capital over Parent Company's historical balance of $9.8 billion), less $6.3 million allocated to the par value of common shares of the Combined Company.

General partner's capital for the Combined Company is comprised of AvalonBay's historical general partner's capital balance of $12.0 billion (as reclassified per Note B) and the total estimated consideration of $25.5 billion for the acquisition

of Parent Company (which creates an adjustment of $15.0 billion of general partner's capital over Parent Company's historical balance of $10.5 billion), less $740.0 million of Transaction Costs.

The following tables summarize the pro forma adjustments (in thousands, except the Exchange Ratio):


	As of June 30, 2026
Common shares:
AvalonBay Common Stock outstanding		141,876
Exchange Ratio to convert AvalonBay Common Stock to Equity Residential Common Shares		2.793
Equity Residential Common Shares issued to AvalonBay stockholders		396,260
Equity Residential Common Shares outstanding		374,330
Total Combined Company common shares outstanding, $0.01 par value		770,590
Par value of total Combined Company common shares outstanding	$	7,706
Historical par value of AvalonBay Common Stock outstanding		(1,419	)
Adjustment to reflect par value of total common shares of Combined Company	$	6,287

	As of June 30, 2026
Additional paid-in capital:
Historical balance of AvalonBay additional paid-in capital	$	11,739,908
Total estimated aggregate consideration for acquisition		25,503,460
Adjustment to reflect par value of total common shares of Combined Company		(6,287	)
Combined Company additional paid-in capital	$	37,237,081

	As of June 30, 2026
General Partner:
AvalonBay General partner's capital outstanding	$	11,983,515
Total estimated aggregate consideration for acquisition		25,503,460
Recognition of Transaction Costs		(740,000	)
Combined Company General partner's capital	$	36,746,975

(J)

Accumulated other comprehensive income

Represents the elimination of Parent Company’s historical accumulated other comprehensive income related to the deferred gains and losses on Parent Company’s forward starting swaps designated as cash flow hedges.

(K)

Retained earnings

Represents the elimination of Equity Residential’s historical retained earnings of $651.1 million and the recognition of $740.0 million of Transaction Costs. Retained earnings is included in general partner's capital in the AvalonBay and ERP Operating Partnership Unaudited Pro Forma Condensed Consolidated Balance Sheet.

(L)

Noncontrolling Interests – DownREIT Units and Partially Owned Properties

The pro forma adjustment represents the fair value of minority interests in a number of Parent Company’s consolidated operating properties. Historical balances of non-controlling interest in certain operating properties have been adjusted to their estimated fair value calculated based on the minority interest ownership percentage of the estimated fair value of the underlying community assets, calculated based on a discounted cash flow analysis, net of the estimated total fair value of the related debt.

(M)

Noncontrolling Interests – ERP Operating Partnership/Limited Partners Capital and Redeemable Noncontrolling Interests – ERP Operating Partnership/Redeemable Limited Partners

The Noncontrolling Interests – ERP Operating Partnership/Limited Partners Capital and Redeemable Noncontrolling Interests – ERP Operating Partnership/Redeemable Limited Partners to be acquired by AvalonBay through the Merger are reflected at fair value in the Unaudited Pro Forma Condensed Consolidated Balance Sheet based on the number of ERP Operating Partnership Units outstanding as of June 30, 2026 and the price of Equity Residential Common Shares as of June 30, 2026. The adjustment to Noncontrolling Interests – ERP Operating Partnership/Limited Partners Capital reflected in the Unaudited Pro Forma Condensed Consolidated Balance Sheet represents the difference between the fair value of the Noncontrolling Interests – ERP Operating Partnership/Limited Partners Capital and Parent Company’s historical balance.

Redeemable Noncontrolling Interests – ERP Operating Partnership/Redeemable Limited Partners are those where Equity Residential is required, either by contract or securities law, to deliver registered common shares. 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 ERP Operating Partnership as the primary source of cash for Equity Residential, resulting in presentation in the mezzanine section of the balance sheet and are presented at the greater of book value or fair market value based on the common share price at the end of each respective reporting period. The Redeemable Noncontrolling Interests – ERP Operating Partnership/Redeemable Limited Partners were adjusted to fair market value as of June 30, 2026 on Parent Company’s historical balance sheet; therefore, no pro forma adjustment was necessary on the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of that date.

Note 6: Pro Forma Adjustments to the Unaudited Pro Forma Condensed Consolidated Statement of Operations

(N)

Total revenue

No pro forma adjustment to Parent Company’s historical revenue related to deferred straight-line rent or above- or below-market in-place leases was recorded as the majority of Parent Company’s leases have a term of one year or less and do not contain rent increases. Additionally, because residential leases reset to prevailing market rates at each annual renewal, in-place residential rents are expected to approximate current market rents at the assumed acquisition date, with any above- or below-market variance limited to a remaining lease term of approximately six months or less, resulting in an immaterial fair value adjustment. With respect to Parent Company’s commercial leases, the impact of deferred straight-line rent and above- or below-market lease intangibles on revenue are likewise expected to be immaterial.

(O)

Expensed transaction, development, and other costs

The expensed transaction, development, and other costs adjustment of $740.0 million for the year ended December 31, 2025 is for estimated Transaction Costs in connection with the Merger, as described above.

(P)

Interest expense, net

Parent Company’s interest expense was adjusted to reflect the (i) removal of historical interest expense related to amortization of deferred financing costs, debt issuance premiums and discounts and amortization of deferred hedging gains and losses of $7.5 million and $15.5 million, for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively, and (ii) the addition of interest expense related to amortization of premiums and discounts based on the estimated fair value of the debt of $27.1 million and $54.2 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively.

The Combined Company pro forma interest expense includes estimated interest expense of $15.3 million and $35.2 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively, related to an estimated $740.0 million commercial paper issuance to fund Transaction Costs. The issuance was assumed to have occurred on January 1, 2025. Commercial paper interest rates are variable in nature. The estimated interest expense amounts represent an approximate 4.13% and 4.75% weighted average rate for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively. A 10% fluctuation in the weighted average rates would change the estimated interest expense amounts by approximately $1.5 million and $3.5 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively.

(Q)

Depreciation expense

Depreciation expense was adjusted to remove $493.9 million and $1.0 billion of Parent Company’s historical depreciation expense and recognize $644.4 million and $1.9 billion of depreciation expense for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively. For purposes of this adjustment, the estimated depreciation expense recognized reflects the estimated fair values of the real estate, net, the estimated components of the real estate acquired, and an estimated useful life of 30 years for building and improvements, an estimated amortization period for in-place leases of 6 months and an estimated useful life of 7 years for furniture and fixtures, consistent with AvalonBay’s useful life policy.

(R)

Net (income) loss attributable to noncontrolling interests – DownREIT Units and Partially Owned Properties

An adjustment of $1.1 million for the six months ended June 30, 2026 and $2.4 million for the year ended December 31, 2025 was made to the income allocated to noncontrolling interests in the partially owned properties that Equity Residential consolidates. The adjustment was calculated based on the net impact of the purchase accounting adjustments to depreciation expense based on the fair values of the underlying real estate.

(S)

Net (income) loss attributable to Noncontrolling Interests – ERP Operating Partnership/Limited Partners

An adjustment of $1.2 million for the six months ended June 30, 2026 and $13.9 million for the year ended December 31, 2025 was made to the income allocated to the ERP Operating Partnership unitholders/limited partners based on the adjusted net income of Parent Company and changes in the estimated non-controlling interest/limited partner ownership percentage in the Combined Company.

Additionally, an adjustment of $0.2 million for the six months ended June 30, 2026 and $8.3 million for the year ended December 31, 2025 was made to the income allocated to the ERP Operating Partnership unitholders/limited partners based on the estimated Transaction Costs and interest expense associated with the Merger.

Note 7: Pro Forma Net Income Available to Common Shareholders and Unitholders per Share/Unit

(T)

Earnings per share

Pro forma basic and diluted earnings per share are calculated using the weighted average number of Equity Residential Common Shares outstanding during the period as Equity Residential is the legal acquirer for the reverse acquisition. The Equity Residential Common Shares issued to AvalonBay stockholders are included in the denominator for the full period presented because the pro forma income statement assumes the Merger was consummated at the beginning of the period. The weighted average shares attributable to AvalonBay stockholders are computed by multiplying the historical weighted average of AvalonBay Common Stock outstanding by the Exchange Ratio, converting them into an Equity Residential Common Share equivalent. The unaudited pro forma adjustment to earnings per share is as follows (in thousands, except per share data and the Exchange Ratio):


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
Numerator:
Net Income attributable to shareholders - basic	$	499,515	$	470,999
Net Income attributable to shareholders	$	499,515	$	470,999
Net Income attributable to ERP Operating Partnership		5,493		5,197
Net Income attributable to shareholders – diluted	$	505,008	$	476,196

Denominator:
Weighted average common shares – basic		766,073		775,488
Effect of dilutive securities		13,172		13,837
Weighted average common shares – diluted		779,245		789,325
Earnings per share – basic	$	0.65	$	0.61
Earnings per share – diluted	$	0.65	$	0.60


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
AvalonBay historical weighted average common shares – basic		140,052		141,739
Exchange Ratio		2.793		2.793
Adjusted AvalonBay weighted average common shares - basic		391,166		395,878
Equity Residential historical weighted average common shares - basic		374,907		379,610
Combined Company weighted average common shares - basic		766,073		775,488
AvalonBay historical dilutive securities		1,271		1,087
Exchange Ratio		2.793		2.793
Adjusted AvalonBay dilutive securities		3,551		3,036
Equity Residential historical dilutive securities		9,621		10,801
Combined Company dilutive securities		13,172		13,837
Combined Company weighted average common shares - diluted		779,245		789,325

(U)

Earnings per Unit

Pro forma basic and diluted earnings per unit are calculated using the weighted average number of ERP Operating Partnership Units outstanding during the period as ERP Operating Partnership is the legal acquirer for the reverse acquisition. The ERP Operating Partnership Units issued to AvalonBay stockholders are included in the denominator for the full period presented because the pro forma income statement assumes the Merger was consummated at the beginning of the period. The weighted average ERP Operating Partnership Units attributable to AvalonBay stockholders are computed by multiplying the historical weighted average of AvalonBay Common Stock outstanding by the Exchange Ratio, converting them into an ERP Operating Partnership Unit equivalent. The unaudited pro forma adjustment to earnings per Unit is as follows (in thousands, except per Unit data and the Exchange Ratio):


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
Numerator:
Net Income attributable to unitholders - basic and diluted	$	505,008	$	476,196

Denominator:
Weighted average Units – basic		774,275		784,979
Effect of dilutive securities		4,970		4,346
Weighted average Units – diluted		779,245		789,325
Earnings per Unit – basic	$	0.65	$	0.61
Earnings per Unit – diluted	$	0.65	$	0.60


	Six Months Ended June 30, 2026		Year Ended December 31, 2025
	Six Months Ended June 30, 2026		Year Ended December 31, 2025
AvalonBay historical weighted average Units – basic		140,052		141,739
Exchange Ratio		2.793		2.793
Adjusted AvalonBay weighted average Units - basic		391,166		395,878
ERP Operating Partnership historical weighted average Units - basic		383,109		389,101
Combined Company weighted average Units - basic		774,275		784,979
AvalonBay historical dilutive securities		1,271		1,087
Exchange Ratio		2.793		2.793
Adjusted AvalonBay dilutive securities		3,551		3,036
ERP Operating Partnership historical dilutive securities		1,419		1,310
Combined Company dilutive securities		4,970		4,346
Combined Company weighted average Units - diluted		779,245		789,325

EX-99.2 4 eqr-ex99_2.htm EX-99.2 EX-99.2

Exhibit 99.2

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of AvalonBay Communities, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AvalonBay Communities, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

F-1


	Valuation of Deferred Development Costs and Land Held for Development
Description of the Matter	As of December 31, 2025, the Company’s deferred development costs and land held for development totaled $73.2 million and $123.8 million, respectively, collectively “Development Rights”. As discussed in Footnote 1 of the consolidated financial statements, the Company capitalizes costs associated with its development activities to the basis of land held when future development is probable, or if the Company has either not yet acquired the land or if the project is subject to a leasehold interest, the costs are capitalized as deferred development costs. Future development is dependent upon various factors, including zoning and regulatory approvals, rental market conditions, construction costs and the availability of capital. Auditing the valuation of deferred development costs and land held for development involved a high degree of subjectivity as management’s assessment of the probability that future development will occur was highly judgmental and subject to the various factors affecting future development discussed above. The Company’s assessment of probability of future development included an analysis of the likelihood of factors outside their control that could prevent the development from occurring and factors that could cause the Company to decide not to pursue or complete the development.
How We Addressed the Matter in Our Audit	We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to assess the valuation of deferred development costs and land held for development. For example, we tested controls over the Company’s pursuit monitoring process and management’s review of the probability assessment related to future development. Our procedures included, among others, evaluating the Company’s determination that the future development is probable. We performed procedures to test the accuracy and completeness of the information included in the Company’s qualitative analysis by agreeing data to underlying agreements, communications, minutes of management’s quarterly development meetings, and third-party evidence, where available. We further assessed the likelihood of the Company’s ability to obtain zoning and regulatory approvals for developments by considering, among other things, the Company’s prior experience with other development projects and the current status of the future projects for which pursuit or development rights costs were capitalized or land was held for development. We also met with executives who lead the Company’s development team to further understand the probability of future development.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Tysons, Virginia

February 27, 2026

F-2

AVALONBAY COMMUNITIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)


	December 31, 2025	December 31, 2024
ASSETS
Real estate:
Land and improvements	$ 4,960,568	$ 4,888,146
Buildings and improvements	21,252,137	20,454,276
Furniture, fixtures and equipment	1,546,813	1,387,506
	27,759,518	26,729,928
Less accumulated depreciation	(8,686,084)	(8,164,411)
Net operating real estate	19,073,434	18,565,517
Construction in progress, including land	1,458,795	1,042,673
Land held for development	123,751	151,922
Real estate assets held for sale, net	150,262	6,950
Total real estate, net	20,806,242	19,767,062

Cash and cash equivalents	187,234	108,576
Restricted cash	165,849	158,500
Unconsolidated investments	193,441	227,320
Deferred development costs	73,237	43,675
Prepaid expenses and other assets	618,597	540,950
Right of use lease assets	147,537	154,654
Total assets	$ 22,192,137	$ 21,000,737

LIABILITIES AND EQUITY
Unsecured debt, net	$ 7,879,380	$ 7,358,784
Variable rate unsecured credit facility and commercial paper, net	739,608	—
Mortgage notes payable, net	709,564	718,465
Dividends payable	250,548	244,967
Payables for construction	92,267	85,954
Accrued expenses and other liabilities	391,973	356,987
Lease liabilities	165,200	173,282
Accrued interest payable	68,591	58,377
Resident security deposits	60,689	62,829
Total liabilities	10,357,820	9,059,645

Commitments and contingencies

Equity:

F-3


Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at December 31, 2025 and December 31, 2024; zero shares issued and outstanding at December 31, 2025 and December 31, 2024	—	—
Common stock, $0.01 par value; 280,000,000 shares authorized at December 31, 2025 and December 31, 2024; 140,080,657 and 142,254,022 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively	1,401	1,422
Additional paid-in capital	11,212,296	11,314,116
Accumulated earnings less dividends	371,157	591,250
Accumulated other comprehensive income	26,486	34,304
Total stockholders' equity	11,611,340	11,941,092
Noncontrolling interests	222,977	—
Total equity	11,834,317	11,941,092
Total liabilities and equity	$ 22,192,137	$ 21,000,737

See accompanying notes to Consolidated Financial Statements.

F-4

AVALONBAY COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per share data)


	For the year ended December 31,
	2025	2024	2023
Revenue:
Rental and other income	$ 3,033,683	$ 2,906,676	$ 2,760,187
Management, development and other fees	7,042	7,081	7,722
Total revenue	3,040,725	2,913,757	2,767,909

Expenses:
Operating expenses, excluding property taxes	778,171	745,846	681,338
Property taxes	342,743	327,611	306,794
Expensed transaction, development and other pursuit costs, net of recoveries	10,846	18,341	33,479
Interest expense, net	259,181	226,589	205,992
Loss on extinguishment of debt, net	—	—	150
Depreciation expense	913,376	846,853	816,965
General and administrative expense	86,679	77,697	76,534
Casualty and impairment loss	1,276	2,935	9,118
Total expenses	2,392,272	2,245,872	2,130,370

Income from unconsolidated investments	39,691	32,231	8,436
Structured Investment Program interest income	27,476	18,451	5,018
Gain on sale of communities, net	335,713	363,300	287,424
Other real estate activity	4,131	753	174

Income before income taxes	1,055,464	1,082,620	938,591
Income tax benefit (expense)	1,135	(445)	(10,153)

Net income	1,056,599	1,082,175	928,438
Net (income) loss attributable to noncontrolling interests	(5,298)	(181)	387

Net income attributable to common stockholders	$ 1,051,301	$ 1,081,994	$ 928,825

Other comprehensive income:
(Loss) gain on cash flow hedges	(4,488)	18,659	13,332
Cash flow hedge (gains) losses reclassified to earnings	(3,330)	(471)	1,360
Comprehensive income	$ 1,043,483	$ 1,100,182	$ 943,517

Earnings per common share - basic:
Net income attributable to common stockholders	$ 7.40	$ 7.61	$ 6.56

Earnings per common share - diluted:

F-5


Net income attributable to common stockholders	$ 7.40		$ 7.60		$ 6.56

See accompanying notes to Consolidated Financial Statements.

F-6

AVALONBAY COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)


	Common stock shares issued	Common stock	Additional paid-in capital	Accumulated earnings less dividends	Accumulated other comprehensive (loss) income	Total stockholder's equity	Noncontrolling interests	Total equity
Balance at December 31, 2022	139,916,864	$ 1,400	$ 10,765,508	$ 485,221	$ 1,424	$ 11,253,553	$ —	$ 11,253,553
Net income attributable to common stockholders	—	—	—	928,825	—	928,825	—	928,825
Gain on cash flow hedges, net	—	—	—	—	13,332	13,332	—	13,332
Cash flow hedge losses reclassified to earnings	—	—	—	—	1,360	1,360	—	1,360
Noncontrolling interest activity	—	—	—	(1,217)	—	(1,217)	—	(1,217)
Dividends declared to common stockholders ($6.60 per share)	—	—	—	(935,305)	—	(935,305)	—	(935,305)
Issuance of common stock, net of withholdings	2,120,392	20	485,029	1,635	—	486,684	—	486,684
Repurchase of common stock, including repurchase costs	(11,800)	—	(908)	(1,003)	—	(1,911)	—	(1,911)
Stock-based compensation expense	—	—	37,997	—	—	37,997	—	37,997
Balance at December 31, 2023	142,025,456	1,420	11,287,626	478,156	16,116	11,783,318	—	11,783,318
Net income attributable to common stockholders	—	—	—	1,081,994	—	1,081,994	—	1,081,994
Gain on cash flow hedges, net	—	—	—	—	18,659	18,659	—	18,659
Cash flow hedge gains reclassified to earnings	—	—	—	—	(471)	(471)	—	(471)
Noncontrolling interest activity	—	—	(77)	—	—	(77)	—	(77)
Dividends declared to common stockholders ($6.80 per share)	—	—	—	(969,345)	—	(969,345)	—	(969,345)

F-7


Issuance of common stock, net of withholdings	228,566	2	(9,875)	445	—	(9,428)	—	(9,428)
Stock-based compensation expense	—	—	36,442	—	—	36,442	—	36,442
Balance at December 31, 2024	142,254,022	1,422	11,314,116	591,250	34,304	11,941,092	—	11,941,092
Net income	—	—	—	1,051,301	—	1,051,301	5,298	1,056,599
Loss on cash flow hedges, net	—	—	—	—	(4,488)	(4,488)	—	(4,488)
Cash flow hedge gains reclassified to earnings	—	—	—	—	(3,330)	(3,330)	—	(3,330)
Issuance of DownREIT Units	—	—	—	—	—	—	222,653	222,653
Dividends declared to noncontrolling interests ($4.69 per share)	—	—	—	—	—	—	(4,974)	(4,974)
Dividends declared to common stockholders ($7.00 per share)	—	—	—	(993,683)	—	(993,683)	—	(993,683)
Issuance of common stock, net of withholdings	505,354	6	71,641	(1,094)	—	70,553	—	70,553
Repurchase of common stock, including repurchase costs	(2,678,719)	(27)	(211,471)	(276,617)	—	(488,115)	—	(488,115)
Amortization of deferred compensation	—	—	38,010	—	—	38,010	—	38,010
Balance at December 31, 2025	140,080,657	$ 1,401	$ 11,212,296	$ 371,157	$ 26,486	$ 11,611,340	$ 222,977	$ 11,834,317

See accompanying notes to Consolidated Financial Statements.

F-8

AVALONBAY COMMUNITIES, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)


	For the year ended December 31,
	2025	2024	2023
Cash flows from operating activities:
Net income	$ 1,056,599	$ 1,082,175	$ 928,438
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	913,376	846,853	816,965
Amortization of deferred financing costs and debt discount	13,685	13,280	12,732
Loss on extinguishment of debt, net	—	—	150
Amortization of stock-based compensation	26,458	25,373	27,142
Equity in (income) loss of, and return on, unconsolidated investments and noncontrolling interests, net of eliminations	(23,610)	(21,693)	5,332
Casualty and impairment loss	1,276	1,415	4,622
Expensed transaction, development and other pursuit costs, net of recoveries	10,846	18,341	33,479
Cash flow hedge (gains) losses reclassified to earnings	(1,292)	(471)	1,360
Gain on sale of real estate assets, net	(339,954)	(364,159)	(287,987)
Increase in accrued interest receivable	(26,124)	(14,582)	(5,803)
(Increase) decrease in prepaid expenses and other assets	(3,182)	(16,576)	11,580
Increase in accrued expenses, other liabilities, accrued interest payable and resident security deposits	43,027	37,922	12,019
Net cash provided by operating activities	1,671,105	1,607,878	1,560,029

Cash flows from investing activities:
Development/redevelopment of real estate assets including land acquisitions and deferred development costs	(1,209,454)	(951,101)	(901,847)
Acquisition of real estate assets, including partnership interest	(682,163)	(464,419)	(215,889)
Capital expenditures - existing real estate assets	(261,769)	(193,348)	(178,312)
Capital expenditures - non-real estate assets	(3,173)	(4,678)	(18,962)
Increase (decrease) in payables for construction	6,313	(1,749)	14,901
Proceeds from sale of real estate, net of selling costs	799,419	711,279	467,096
Note receivable lending	(24,079)	(90,088)	(82,802)
Note receivable payments	15,048	237	253
Distributions from unconsolidated entities and investment sale proceeds	7,500	11,178	5,468
Unconsolidated investments	(40,009)	(14,175)	(18,861)
Net cash used in investing activities	(1,392,367)	(996,864)	(928,955)

Cash flows from financing activities:
Issuance of common stock, net	86,645	10,535	496,706
Repurchase of common stock, net	(488,115)	—	(1,911)
Dividends paid	(992,333)	(961,914)	(922,657)
Net borrowings under unsecured credit facility and commercial paper	739,608	—	—
Repayments of mortgage notes payable, including prepayment penalties	(11,465)	(9,793)	(47,000)
Issuance of unsecured debt	1,347,312	398,788	399,756
Repayment of unsecured debt	(825,000)	(300,000)	(750,000)
Payment of deferred financing costs	(23,147)	(3,763)	(3,964)
Receipt for termination of forward interest rate swaps	4,341	16,839	8,331
Payments related to tax withholding for share-based compensation	(16,713)	(16,883)	(10,639)
Noncontrolling interests, joint venture and preferred equity transactions	(13,864)	(8,707)	(2,981)
Net cash used in financing activities	(192,731)	(874,898)	(834,359)

Net increase (decrease) in cash, cash equivalents and restricted cash	86,007	(263,884)	(203,285)

F-9



Cash, cash equivalents and restricted cash, beginning of year	267,076	530,960	734,245
Cash, cash equivalents and restricted cash, end of year	$ 353,083	$ 267,076	$ 530,960

Cash paid during the year for interest, net of amount capitalized	$ 236,549	$ 213,253	$ 187,523

See accompanying notes to Consolidated Financial Statements.

F-10

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported with the Consolidated Statements of Cash Flows (dollars in thousands):


	December 31, 2025	December 31, 2024	December 31, 2023
Cash and cash equivalents	$ 187,234	$ 108,576	$ 397,890
Restricted cash	165,849	158,500	133,070
Cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows	$ 353,083	$ 267,076	$ 530,960

Supplemental disclosures of non-cash investing and financing activities:

During the year ended December 31, 2025:

•

As described in Note 4, "Equity," the Company issued 183,260 shares of common stock as part of the Company's stock-based compensation plans, of which 103,332 shares related to the conversion of performance awards to shares of common stock, and the remaining 79,928 shares valued at $17,678,000 were issued in connection with new stock grants; 3,761 shares valued at $749,000 were issued through the Company's dividend reinvestment plan; 74,517 shares valued at $16,678,000 were withheld to satisfy employees' tax withholding and other liabilities; and 3,116 restricted shares with an aggregate value of $614,000 were forfeited.

•

The Company acquired six apartment communities, in the Dallas-Fort Worth metropolitan area, containing 1,844 apartment homes for $415,579,000, with the consideration comprised of a cash payment of $193,000,000 and the issuance of 1,059,995 units representing limited partnership interests (the “DownREIT Units”).

•

Common stock and DownREIT Unit dividends declared but not paid totaled $247,436,000.

•

The Company recorded (i) a decrease to prepaid expenses and other assets of $4,488,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $3,330,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

During the year ended December 31, 2024:

•

The Company issued 250,806 shares of common stock as part of the Company's stock-based compensation plans, of which 146,725 shares related to the conversion of performance awards to shares of common stock, and the remaining 104,081 shares valued at $18,020,000 were issued in connection with new stock grants; 12,290 shares valued at $1,972,000 were issued in conjunction with the conversion of deferred stock awards; 3,533 shares valued at $690,000 were issued through the Company’s dividend reinvestment plan; 94,288 shares valued at $16,892,000 were withheld to satisfy employees’ tax withholding and other liabilities; and 4,408 restricted shares with an aggregate value of $801,000 were forfeited.

•

Common stock dividends declared but not paid totaled $243,479,000.

•

The Company recorded (i) an increase to prepaid expenses and other assets of $18,659,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $471,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

•

The Company recorded $25,719,000 of lease liabilities and offsetting right of use lease assets related to the execution of one new ground lease for a development right.

F-11

During the year ended December 31, 2023:

•

The Company issued 153,162 shares of common stock as part of the Company's stock based compensation plans, of which 60,016 shares related to the conversion of performance awards to shares of common stock, and the remaining 93,146 shares valued at $16,552,000 were issued in connection with new stock grants; 3,454 shares valued at $619,000 were issued through the Company’s dividend reinvestment plan; 62,937 shares valued at $10,639,000 were withheld to satisfy employees’ tax withholding and other liabilities; and 2,119 restricted shares with an aggregate value of $413,000 were forfeited.

•

Common stock dividends declared but not paid totaled $236,133,000.

•

The Company recorded (i) an increase to prepaid expenses and other assets of $13,332,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $1,360,000 of cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

•

The Company assumed a $63,041,000 fixed rate mortgage loan in conjunction with the acquisition of Avalon West Plano.

See accompanying notes to Consolidated Financial Statements.

F-12

AVALONBAY COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization, Basis of Presentation and Significant Accounting Policies

Organization and Basis of Presentation

AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company develops, redevelops, acquires, owns and operates multifamily communities in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

At December 31, 2025, the Company owned or held a direct or indirect ownership interest in 320 apartment communities containing 98,694 apartment homes in 11 states and the District of Columbia, of which 24 communities were under construction. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 32 communities that, if developed as expected, will contain an estimated 9,032 apartment homes (unaudited).

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, certain joint venture partnerships, subsidiary partnerships structured as DownREITs, and any variable interest entities that qualify for consolidation. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company accounts for joint venture entities and subsidiary partnerships in accordance with the consolidation guidance. The Company determines first whether to follow the variable interest entity ("VIE") or the voting interest entity ("VOE") model for each joint venture entity. The Company then evaluates whether it should consolidate the venture. Under the VIE model, the Company consolidates an investment when it has control to direct the activities of the venture and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company's maximum exposure for its VIEs is limited to its investments in the respective VIEs and its portion of any loan guarantee. Under the VOE model, the Company consolidates an investment when (i) it controls the investment through ownership of a majority voting interest if the investment is not a limited partnership or (ii) it controls the investment through its ability to remove the other partners in the investment, at its discretion, when the investment is a limited partnership.

The Company generally uses the equity method of accounting or net asset value ("NAV") for its unconsolidated investments, including when the Company holds a noncontrolling limited partner interest in a joint venture. Any investment in excess of the Company's cost basis at acquisition or formation of an equity method venture that owns real estate, will be recorded as a component of the Company's investment in the joint venture and recognized over the life of the underlying fixed assets of the venture as a reduction to its equity in income from the venture. Investments in which the Company has little or no influence are accounted for using the measurement alternative with the carrying amount of the investment adjusted to fair value when there is an observable transaction indicating a change in fair value.

Real Estate

Operating real estate assets are stated at cost and consist of land and improvements, buildings and improvements, furniture, fixtures and equipment, and other costs incurred during their development, redevelopment and acquisition. Significant expenditures that improve or extend the life of an existing asset and that will benefit the Company for periods greater than a year are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

F-13

Project costs related to the development, construction and redevelopment of real estate projects (including interest and related loan fees, property taxes and other direct costs) are capitalized as a cost of the project. Indirect project costs that relate to several projects are capitalized and allocated to the projects to which they relate. Indirect costs not clearly related to development, construction and redevelopment activity are expensed as incurred. For development, capitalization (i) begins when the Company has determined that development of the future asset is probable, (ii) can be suspended if there is no current development activity underway, but future development is still probable and (iii) ends when the asset, or a portion of an asset, is ready for its intended use, or the Company's intended use changes such that capitalization is no longer appropriate.

For land parcels acquired for development improved with operating real estate, the Company generally manages the improvements until all tenant obligations have been satisfied or eliminated through negotiation, and construction of new apartment communities is ready to begin. Revenue from incidental operations received from the current improvements on land parcels in excess of any incremental costs are recorded as a reduction of total capitalized costs of the respective Development Right and not as part of net income. Incidental operating costs in excess of incidental operating income are expensed in the period incurred.

For redevelopment efforts, the Company capitalizes costs either (i) in advance of taking homes out of service when significant renovation of the common area has begun until the redevelopment is completed, or (ii) when an apartment home is taken out of service for redevelopment until the redevelopment is completed and the apartment home is available for a new resident. Rental income and operating costs incurred during the initial lease-up or post-redevelopment lease-up period are recognized in earnings.

Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of in-place leases and leases priced above or below market. The Company utilizes various sources to determine fair value, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. The purchase price allocation to tangible assets is reflected in real estate assets and depreciated over their estimated useful lives. Any purchase price allocation to intangible assets, other than in-place lease intangibles, is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets and amortized over the term of the acquired intangible asset. The Company values land based on a market approach, looking to recent sales of similar properties, adjusting for differences due to location, the state of entitlement as well as the shape and size of the parcel. Improvements to land are valued using a replacement cost approach and consider the structures and amenities included for the communities and is reduced by estimated depreciation. The value for furniture, fixtures and equipment is also determined based on a replacement cost approach, considering costs for both items in the apartment homes as well as common areas and is adjusted for estimated depreciation. The fair value of buildings is estimated using the replacement cost approach, assuming the buildings were vacant at acquisition. The replacement cost approach considers the composition of structures acquired, adjusted for depreciation which considers industry standard information and estimated useful life of the acquired property. The in-place lease intangible considers the estimated cost of leasing the apartment homes as if the acquired building(s) were vacant and is determined using an average total lease-up time, the number of apartment homes and market rent considering actual leasing and industry rental rate data generated during the lease-up time. The above or below market lease intangibles represent the value of the current leases relative to market-rate leases and is based on market comparables. Given the heterogeneous nature of multifamily real estate, the fair values for the land, debt, real estate assets and in-place leases incorporate significant unobservable inputs and therefore are considered to be Level 3 prices within the fair value hierarchy. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed.

F-14

Depreciation is generally calculated on a straight-line basis over the estimated useful lives of the assets, which for buildings and related improvements range from seven years to 30 years and for furniture, fixtures and equipment range from three years to seven years.

Noncontrolling Interests

The Company classifies the carrying value of the DownREIT Units as noncontrolling interests, as the units may be redeemed by unitholders on or after April 30, 2026 for cash or common stock at the Company's election. Net income is allocated to the DownREIT Units pro-rata based on the weighted average proportion of DownREIT Units to the weighted average combined total of outstanding common stock, participating securities, and DownREIT Units for the period.

Income Taxes

The Company elected to be treated as a REIT for federal income tax purposes for its tax year ended December 31, 1994 and has not revoked such election. A REIT is a corporate entity which holds real estate interests and can deduct from its federally taxable income qualifying dividends it pays if it meets a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its adjusted taxable income to stockholders. Therefore, as a REIT, the Company generally will not be subject to corporate level federal income tax on its taxable income if it annually distributes 100% of its taxable income to its stockholders.

The states in which the Company operates have similar tax provisions which recognize the Company as a REIT for state income tax purposes. Management believes that all such conditions for the exemption from income taxes on ordinary income have been or will be met for the periods presented. Accordingly, no provision for federal and state income taxes has been made. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal corporate income taxes at regular corporate rates and may not be able to qualify as a corporate REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income and in certain other instances.

Taxable income from activities performed through taxable REIT subsidiaries ("TRS") is subject to federal, state and local income taxes. The Company recognized income tax benefit of $1,135,000 in 2025 and income tax expense of $445,000 and $10,153,000 in 2024 and 2023, respectively, with amounts in 2023 primarily due to dispositions of residential condominiums at The Park Loggia. In addition, the Company may sell tax credits related to solar installation projects at its communities, recognizing the sales proceeds as income tax benefit in the period of sale. As of December 31, 2025 and 2024, the Company did not have any unrecognized tax positions. The Company does not believe that there will be any material changes in its unrecognized tax positions over the next 12 months. The Company is subject to examination by the respective taxing authorities for the tax years 2022 through 2024.

The following summarizes the tax components of the Company's common dividends declared for the years ended December 31, 2025, 2024 and 2023 (unaudited):


	2025	2024	2023
Ordinary income	74%	90%	83%
20% capital gain	9%	4%	11%
Unrecaptured §1250 gain	17%	6%	6%
Total	100%	100%	100%

F-15

Deferred Financing Costs

Deferred financing costs include expenditures necessary to obtain debt financing and are amortized on a straight-line basis, which approximates the effective interest method, over the shorter of the loan term or the related credit enhancement facility, if applicable. Unamortized financing costs are charged to earnings when debt is retired before the maturity date. Deferred financing costs, except for costs associated with line-of-credit arrangements, are presented as a direct deduction from the related debt liability. Unamortized deferred financing costs for the Company's Credit Facility and commercial paper were $18,629,000 and $13,059,000 as of December 31, 2025 and 2024, respectively, and were included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents includes all cash and liquid investments with an original maturity of three months or less from the date acquired. Restricted cash includes principal reserve funds that are restricted for the repayment of specified secured financing, amounts the Company has designated for planned 1031 exchange activity and resident security deposits. The majority of the Company's cash, cash equivalents and restricted cash are held at major commercial banks.

Comprehensive Income

Comprehensive income, as reflected on the Consolidated Statements of Comprehensive Income, is defined as all changes in equity during each period except for those resulting from investments by or distributions to shareholders. Accumulated other comprehensive income (loss), as reflected on the Consolidated Statements of Equity, reflects the cumulative changes in the fair value of derivatives in qualifying cash flow hedge relationships and the related reclassifications to earnings.

Earnings per Common Share

Basic earnings per common share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common stockholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per common share. Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per common share on a diluted basis. Diluted earnings per common share was computed using the treasury stock method for performance awards, options, participating securities and forward contracts, and using the if-converted method

F-16

for DownREIT Units. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):


	For the year ended December 31,
	2025	2024	2023
Basic and diluted shares outstanding
Weighted average common shares—basic	141,739,349	142,000,934	141,307,186
Effect of dilutive securities	1,087,033	457,670	336,602
Weighted average common shares—diluted	142,826,382	142,458,604	141,643,788

Calculation of Earnings per Common Share—basic
Net income attributable to common stockholders	$ 1,051,301	$ 1,081,994	$ 928,825
Net income allocated to unvested restricted shares	(1,974)	(2,069)	(1,663)
Net income attributable to common stockholders—basic	$ 1,049,327	$ 1,079,925	$ 927,162

Weighted average common shares—basic	141,739,349	142,000,934	141,307,186

Earnings per common share—basic	$ 7.40	$ 7.61	$ 6.56

Calculation of Earnings per Common Share—diluted
Net income attributable to common stockholders	$ 1,051,301	$ 1,081,994	$ 928,825
Net income attributable to DownREIT unitholders in consolidated partnerships	5,298	—	25
Net income—diluted	$ 1,056,599	$ 1,081,994	$ 928,850

Weighted average common shares—diluted	142,826,382	142,458,604	141,643,788

Earnings per common share—diluted	$ 7.40	$ 7.60	$ 6.56

Certain options to purchase shares of common stock in the amounts of 31,917, forward contracts to sell shares of common stock in the amounts of 3,680,000, and unvested performance awards in the amounts of 42,686 as of December 31, 2025 were not included in the computation of diluted earnings per common share because they were anti-dilutive for the period. Certain options to purchase shares of common stock in the amounts of 9,793 and 303,784 were outstanding as of December 31, 2024 and 2023, respectively, were not included in the computation of diluted earnings per common share because they were anti-dilutive for the period.

Expensed Transaction, Development and Other Pursuit Costs

F-17

of $10,846,000, $18,341,000 and $33,479,000 during the years ended December 31, 2025, 2024 and 2023, respectively. These costs are included in expensed transaction, development and other pursuit costs, net of recoveries on the accompanying Consolidated Statements of Comprehensive Income. The amounts for the year ended December 31, 2025 and 2024 include a write-off of $3,668,000 and $8,947,000, respectively, for one development opportunity in each year that the Company determined is no longer probable. The amount for 2023 includes write-offs of $27,455,000 related to seven Development Rights that the Company determined were no longer probable. These costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

Casualty and Impairment of Long-Lived Assets

The Company evaluates its real estate and other long-lived assets for impairment when potential indicators of impairment exist. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of an asset may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Company recognizes an impairment loss to the extent the carrying amount exceeds the estimated fair value of the asset. Based on periodic tests of recoverability of long-lived assets, for the years ended December 31, 2025, 2024 and 2023, the Company did not recognize any material impairment losses. During the years ended December 31, 2025, 2024 and 2023 the Company recognized expense of $1,276,000, $2,935,000 and $9,118,000, respectively, for the property and casualty damage to certain of the Company's communities, reported as casualty and impairment loss on the accompanying Consolidated Statements of Comprehensive Income. The charge for the year ended December 31, 2025 related primarily to damage from a water pipe break at a community in Massachusetts. The charges for the year ended December 31, 2024 related to flooding and water damage at communities in California from extensive rainfall and a fire at a community in New Jersey. The charges for the year ended December 31, 2023 related to damage to certain communities in the Northeast and California regions from severe weather.

The Company assesses its portfolio of land held for both development and investment for impairment if the intent of the Company changes with respect to either the development of, or the expected holding period for, the land. For the years ended December 31, 2025, 2024 and 2023, the Company did not recognize any impairment charges on its investment in land.

The Company evaluates its unconsolidated investments for other than temporary impairment, considering both whether the carrying value of the investment exceeds the fair value, and the Company’s intent and ability to hold the investment to recover its carrying value. The Company also evaluates its proportionate share of any impairment of assets held by unconsolidated investments. The Company did not recognize any other than temporary impairment losses during the years ended December 31, 2025, 2024 or 2023.

F-18

Assets Held for Sale and Discontinued Operations

The Company presents the assets and liabilities of any communities which have been sold, or otherwise qualify as held for sale, separately in the accompanying Consolidated Balance Sheets. In addition, the results of operations for those assets that meet the definition of discontinued operations are presented as such in the accompanying Consolidated Statements of Comprehensive Income. Real estate assets held for sale are measured at the lower of the carrying amount or the fair value less the cost to sell. Upon the classification of an asset as held for sale, no further depreciation is recorded. Disposals representing a strategic shift in operations (e.g., a disposal of a major geographic area, a major line of business or a major equity method investment) are presented as discontinued operations, and for those assets qualifying for classification as discontinued operations, the specific components of net income presented as discontinued operations include net operating income, depreciation expense and interest expense, net. For periods prior to the asset qualifying for discontinued operations, the Company reclassifies the results of operations to discontinued operations. In addition, the net gain or loss (including any impairment loss) on the eventual disposal of assets held for sale will be presented as discontinued operations when recognized. A change in presentation for held for sale or discontinued operations has no impact on the Company's financial condition or results of operations. The Company combines the operating, investing and financing portions of cash flows attributable to discontinued operations with the respective cash flows from continuing operations on the accompanying Consolidated Statements of Cash Flows. The Company had three real estate asset that qualified as held for sale at December 31, 2025.

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap and interest rate cap agreements (collectively, "Hedging Derivatives") for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives for trading or other speculative purposes. The Company assesses the effectiveness of qualifying hedges, both at inception and on an ongoing basis. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets and the fair values of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net on the accompanying Consolidated Statements of Comprehensive Income. For the Hedging Derivatives that qualify as effective cash flow hedges, the Company records the cumulative changes in the Hedging Derivatives' fair value in accumulated other comprehensive income on the accompanying Consolidated Statements of Comprehensive Income. Amounts recorded in accumulated other comprehensive income will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that qualify as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding hedged item. Receipts or payments associated with the gains and losses on the Company’s cash flow hedges of future fixed rate debt issuances are presented as a component of cash flows from financing activities in the period the hedges are terminated and the receipt or payments for the Company’s cash flow hedges of interest on variable rate debt are presented as a component of cash flows from operating activities. Payments for derivatives that are not designated in hedging relationships are presented as a component of cash flows from operating activities. See Note 11, "Fair Value," for further discussion of derivative financial instruments.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to amounts in prior years' financial statements and notes to the financial statements to conform to current year presentations as a result of changes in held for sale classification, disposition activity and segment classification.

F-19

Leases

The Company is party to leases as both a lessor and a lessee, primarily as follows:

•

lessor of residential and commercial space within its apartment communities; and

•

lessee under (i) ground leases for land underlying current operating or development communities and certain commercial and parking facilities and (ii) office leases for its corporate headquarters and regional offices.

Lessee Considerations

The Company assesses whether a contract is or contains a lease based on whether the contract conveys the right to control the use of an identified asset, including specified portions of larger assets, for a period of time in exchange for consideration.

The Company’s leases include both fixed and variable lease payments that are based on an index or rate such as the consumer price index (CPI) or percentage rents based on total sales. Variable lease payments are generally not included in the lease liability, but recognized as variable lease expense in the period in which they are incurred.

For leases that have options to extend the term or terminate the lease early, the Company only factored the impact of such options into the lease term if the option was considered reasonably certain to be exercised. The Company determines the discount rate associated with its ground and office leases on a lease-by-lease basis using the Company’s actual borrowing rates as well as indicative market pricing for longer term rates and taking into consideration the remaining term of the lease agreements. For leases that are 12 months or less, the Company elected the practical expedient to not recognize the lease asset and liability.

Lessor Considerations

The Company's residential and commercial leases at its apartment communities are operating leases. For leases that include rent concessions and/or fixed and determinable rent increases, rental income is recognized on a straight-line basis over the noncancellable term of the lease, which, for residential leases, is generally one year. Some of the Company’s commercial leases have renewal options which the Company will only include in the lease term if, at the commencement of the lease, it is reasonably certain that the lessee will exercise this option.

For the Company’s leases, which are comprised of a lease component and common area maintenance as a non-lease component, the Company determined that (i) the leases are operating leases, (ii) the lease component is the predominant component and (iii) all components of its operating leases share the same timing and pattern of transfer.

Revenue and Gain Recognition

The Company recognizes revenue for the transfer of goods and services to customers for consideration that the Company expects to receive. The majority of the Company’s revenue is derived from residential and commercial rental and other lease income, which are accounted for as discussed above, under "Leases". The Company's revenue streams that are not accounted for as residential and commercial rental and other lease income include:

F-20

•

Management fees - The Company has investment interests in real estate joint ventures, for which the Company may manage (i) the venture, (ii) the associated operating communities owned by the ventures and/or (iii) the construction, development or redevelopment of those communities. For these activities, the Company receives asset management, property management, development and/or redevelopment fee revenue. The performance obligation is the management of the venture, community or other defined task such as the development or redevelopment of the community. While the individual activities that comprise the performance obligation of the management fees can vary day to day, the nature of the overall performance obligation to provide management service is the same and considered by the Company to be a series of services that have the same pattern of transfer to the customer and the same method to measure progress toward satisfaction of the performance obligation. The Company also provides various third party back-office, financial administrative support services. The Company recognizes revenue for fees as earned.

•

Non-lease related revenue - The Company recognizes revenue for items not considered to be components of a lease as earned including, but not limited to, application fees, renters insurance fees and vendor revenue sharing.

•

Gains or losses on sales of real estate - The Company accounts for the sale of real estate and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions. The Company recognizes the sale, and associated gain or loss from the disposition when the criteria for the sale of an asset have been met, which include when (i) a contract exists and (ii) the buyer obtained control of the nonfinancial asset that was sold.

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, "Segment Reporting," for the years ended December 31, 2025, 2024 and 2023. The segments are classified based on the individual community's status at December 31, 2025 for the years ended December 31, 2025 and 2024, and at December 31, 2024 for the year ended December 31, 2023. Segment information for total revenue excludes real estate assets that were sold from January 1, 2023 through December 31, 2025, or otherwise qualify as held for sale as of December 31, 2025, as described in Note 6, "Real Estate Disposition Activities." (dollars in thousands):

F-21


	Same Store	Other Stabilized	Development/ Redevelopment	Non- allocated (1)	Total
For the period ended December 31, 2025
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 7,042	$ 7,042
Non-lease related revenue (2)	8,753	6,494	364	—	15,611
Total non-lease revenue	8,753	6,494	364	7,042	22,653

Lease income (3)	2,730,758	168,121	47,174	—	2,946,053

Total revenue	$ 2,739,511	$ 174,615	$ 47,538	$ 7,042	$ 2,968,706

For the period ended December 31, 2024
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 7,081	$ 7,081
Non-lease related revenue (2)	10,479	5,563	148	—	16,190
Total non-lease revenue	10,479	5,563	148	7,081	23,271

Lease income (3)	2,662,792	77,771	9,519	—	2,750,082

Total revenue	$ 2,673,271	$ 83,334	$ 9,667	$ 7,081	$ 2,773,353

For the year ended December 31, 2023
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 7,722	$ 7,722
Non-lease related revenue (2)	12,752	4,697	128	—	17,577
Total non-lease revenue	12,752	4,697	128	7,722	25,299

Lease income (3)	2,482,052	73,628	6,042	—	2,561,722

Total revenue	$ 2,494,804	$ 78,325	$ 6,170	$ 7,722	$ 2,587,021

__________________________________

(1)

Represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)

Amounts include revenue streams related to leasing activities that are not considered components of a lease, and revenue streams not related to leasing activities including, but not limited to, application fees, renters insurance fees and vendor revenue sharing.

(3)

Represents residential and commercial rental and other lease income, as discussed above, under "Leases".

Due to the nature and timing of the Company’s identified revenue streams, there were no material amounts of outstanding or unsatisfied performance obligations as of December 31, 2025.

Uncollectible Lease Revenue Reserves

The Company assesses the collectability of its lease revenue and receivables on an ongoing basis by (i) assessing the probability of receiving all lease amounts due on a lease-by-lease basis, (ii) fully reserving for those leases where collection of substantially all of the remaining lease payments is not probable and (iii) subsequently, only recognizing revenue to the extent cash is received.

F-22

If the Company determines that collection of the remaining lease payments becomes probable at a future date, the Company will recognize the cumulative revenue that would have been recorded under the original lease agreement.

In addition to the specific reserves recognized, the Company also evaluates its lease receivables for collectability at a portfolio level. The Company recognizes a reserve on a portfolio level when the uncollectible revenue is probable and reasonably estimable. The Company applies this reserve to the Company’s revenue and receivables not addressed as part of the specific reserve.

The Company recorded an aggregate offset to income for uncollectible lease revenue, net of amounts received from government rent relief programs, for its residential and commercial portfolios of $47,240,000, $47,046,000 and $57,906,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

Recently Issued and Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures, which requires (i) a tabular rate reconciliation of the reported income tax expense (benefit) from continuing operations into specific categories, (ii) separate disclosure for any reconciling items within certain categories above a quantitative threshold, (iii) disclosure of income taxes paid disaggregated by federal, state and material jurisdictions and (iv) disclosure of income tax expense from continuing operations disaggregated by federal and state. The Company adopted the guidance as of January 1, 2025, and it did not have a material effect on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires the disaggregation for certain expenses presented on the face of an entity’s income statement in the entity's disclosures. Additionally, it requires the disclosure of selling expenses and descriptions of amounts not separately disaggregated. The new standard will be effective for annual reporting periods beginning January 1, 2027, and interim reporting periods beginning January 1, 2028. The Company is assessing the standard and does not expect it to have a material effect on the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which updates the accounting for software implementation and development, specifically with respect to cost capitalization. The amendments replace the former model which considered prescriptive and sequential software development stages with an approach that is focused on management authorization and probability that the project will be completed and used for its intended purpose. The new standard will be effective for annual reporting periods beginning January 1, 2027, and interim reporting periods within those annual periods. The Company is assessing the standard and does not expect it to have a material effect on the Company's financial position or results of operations.

2. Interest Capitalized

The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company's development and redevelopment activities totaled $50,115,000, $43,185,000 and $47,133,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

F-23

3. Debt

The Company's debt, which consists of unsecured notes, the variable rate term loan (the "Term Loan"), mortgage notes payable, the Credit Facility and Commercial Paper, each as defined below, as of December 31, 2025 and 2024 is summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of December 31, 2025 and 2024, as shown in the accompanying Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities"). The weighted average interest rates in the following table for secured and unsecured debt include costs of financing including debt issuance costs as well as credit enhancement and trustees' fees, the impact of interest rate hedges and mark-to-market adjustments.


	December 31, 2025		December 31, 2024
Fixed rate unsecured debt (1)	$ 7,925,000	3.6%	$ 7,400,000	3.4%
Fixed rate mortgage notes payable—conventional and tax-exempt	332,602	3.9%	333,479	3.9%
Variable rate mortgage notes payable—conventional and tax-exempt	390,550	4.0%	400,950	5.2%
Total mortgage notes payable, unsecured debt	8,648,152	3.6%	8,134,429	3.5%
Credit Facility	—	—%	—	—%
Commercial paper	740,000	4.0%	—	—%
Total principal outstanding	9,388,152	3.7%	8,134,429	3.5%
Less deferred financing costs and debt discount (2)	(59,600)		(57,180)
Total	$ 9,328,552		$ 8,077,249

_________________________________

(1)

Includes the $550,000,000 Term Loan that has been swapped to an effective fixed rate of 4.44% using interest rate hedges.

(2)

Excludes deferred financing costs associated with the Credit Facility and commercial paper, which are included in Prepaid expenses and other assets on the accompanying Consolidated Balance Sheets.

The availability on the Company's Credit Facility as of December 31, 2025 and 2024 was as follows (dollars in thousands):


	December 31, 2025	December 31, 2024

Credit Facility commitment	$ 2,500,000	$ 2,250,000
Credit Facility outstanding	—	—
Commercial paper outstanding	(740,000)	—
Letters of credit outstanding (1)	(864)	(1,714)
Total Credit Facility available	$ 1,759,136	$ 2,248,286

_____________________________________

(1)

In addition, the Company had $52,584 and $45,910 outstanding in additional letters of credit unrelated to the Credit Facility as of December 31, 2025 and 2024, respectively.

The following debt activity occurred during the year ended December 31, 2025:

F-24

•

In April 2025, the Company entered into the Seventh Amended and Restated Revolving Loan Agreement with a syndicate of banks, amending the prior credit facility, dated September 27, 2022. The amended and restated Credit Facility (i) increased the borrowing capacity under the Credit Facility from $2,250,000,000 to $2,500,000,000, and (ii) extended the term from September 2026 to April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 4.58% at December 31, 2025 and was composed of (i) the Secured Overnight Financing Rate ("SOFR"), applicable to the period of borrowing for a particular draw of funds from the Credit Facility (e.g., one month to maturity, three months to maturity, etc.), plus (ii) the current borrowing spread to SOFR of 0.705% per annum, assuming a daily SOFR borrowing rate. The borrowing spread to SOFR can vary from SOFR plus 0.65% to SOFR plus 1.40% based upon the rating of the Company's unsecured senior notes. There is also an annual facility commitment fee of 0.12% of the borrowing capacity under the Credit Facility, which can vary from 0.10% to 0.30% based upon the rating of the Company's unsecured senior notes. The Credit Facility contains a sustainability-linked pricing component which provides for interest rate margin and commitment fee reductions or increases related to certain environmental sustainability targets, specifically greenhouse gas emission reductions, with the adjustment determined annually. An annual determination under the sustainability-linked pricing component occurred in July 2025, maintaining reductions of approximately 0.02% to the interest rate margin and 0.005% to the commitment fee due to the Company's achievement of sustainability targets. On August 1, 2025, the Company amended the Credit Facility to extend the applicability of its sustainability-linked pricing component. All other terms of the Credit Facility, including its maturity date of April 2030, remain unchanged.

•

In April 2025, the Company entered into a $450,000,000 Term Loan which matures in April 2029. On August 1, 2025, the Company amended the Term Loan to (i) exercise its full accordion option to increase the amount of its Term Loan by $100,000,000 to $550,000,000 and (ii) extend the applicability of its sustainability-linked pricing component. During the year ended December 31, 2025, the Company drew down the $550,000,000 available under the Term Loan and entered into $550,000,000 notional amount of interest rate swaps to hedge the impact of variability in interest rates on the Term Loan. The swaps are coterminous with the Term Loan, maturing in April 2029. The Term Loan bears interest at varying levels based on (i) the SOFR applicable to the period of borrowing for a particular draw of funds from the facility, which rate is recalculated at the end of each such period if the Term Loan remains outstanding, (ii) a stated spread over SOFR that can vary from SOFR plus 0.70% to SOFR plus 1.60% per annum based upon the rating of the Company’s unsecured and unsubordinated long-term indebtedness and (iii) a sustainability spread adjustment that can range from (0.02)% to 0.02%. The current borrowing spread to SOFR under the Term Loan is 0.78% per annum, inclusive of a sustainability spread adjustment of (0.02)%. Including the impact of these swaps and transaction costs, assuming the Term Loan will be fully drawn until maturity and the Company's current borrowing spread to SOFR, the effective interest rate on borrowings under the Term Loan is fixed at 4.44%.

•

In April 2025, the Company increased the capacity of the Commercial Paper Program from $500,000,000 to $1,000,000,000. Under the terms of the Commercial Paper Program, the Company may issue unsecured commercial paper notes with maturities of less than one year. The program is backstopped by the Company's commitment to maintain available borrowing capacity under its unsecured credit facility in an amount equal to actual borrowings under the program.

•

In June 2025, the Company repaid $525,000,000 of its 3.45% coupon unsecured notes at par upon maturity.

F-25

•

In July 2025, the Company issued $400,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for proceeds net of underwriting fees and discounts of approximately $394,888,000, before considering the impact of other offering costs. The notes mature in August 2035 and were issued at a 5.00% coupon. The effective interest rate on the notes is 5.05%, considering the net proceeds and including the impact of offering costs and hedging activity.

•

In November 2025, the Company repaid $300,000,000 of its 3.50% coupon unsecured notes at par upon maturity.

•

In December 2025, the Company issued $400,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for proceeds net of underwriting fees and discounts of approximately $397,424,000, before considering the impact of other offering costs. The notes mature in December 2030 and were issued at a 4.35% coupon. The effective interest rate on the notes is 4.52%, considering the net proceeds and including the impact of offering costs and hedging activity.

In the aggregate, secured notes payable mature at various dates from March 2027 through July 2066, and are secured by certain apartment communities (with a net carrying value of $1,208,731,000, excluding communities classified as held for sale, as of December 31, 2025).

Scheduled payments and maturities of secured notes payable and unsecured debt outstanding at December 31, 2025 were as follows (dollars in thousands):


Year	Secured notes principal payments and maturities	Unsecured debt maturities	Stated interest rate of unsecured debt
2026	$ 11,811	$ 475,000	2.95%
		300,000	2.90%
2027	248,859	400,000	3.35%
2028	13,902	450,000	3.20%
		400,000	1.90%
2029	126,262	450,000	3.30%
		550,000	SOFR + 0.78%
2030	3,300	700,000	2.30%
		400,000	4.35%
2031	3,500	600,000	2.45%
2032	4,000	700,000	2.05%
2033	5,000	350,000	5.00%
		400,000	5.30%
2034	10,900	400,000	5.35%
2035	13,400	400,000	5.00%
Thereafter	282,218	350,000	3.90%
		300,000	4.15%
		300,000	4.35%
	$ 723,152	$ 7,925,000

F-26

The Company's unsecured notes are redeemable at the Company's option, in whole or in part, generally at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present value of the remaining scheduled payments of principal and interest discounted at a rate equal to the yield on U.S. Treasury securities with a comparable maturity plus a spread between 10 and 30 basis points depending on the specific series of unsecured notes, plus accrued and unpaid interest to the redemption date.

The Company is subject to financial covenants contained in the Credit Facility, the Term Loan and the indentures under which the unsecured notes were issued. The principal financial covenants include the following:

•

limitations on the amount of total and secured debt in relation to the Company's overall capital structure;

•

limitations on the amount of the Company's unsecured debt relative to the undepreciated basis of real estate assets that are not encumbered by property-specific financing; and

•

minimum levels of debt service coverage.

The Company was in compliance with these covenants at December 31, 2025.

4. Equity

As of December 31, 2025 and 2024, the Company's charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock.

During the year ended December 31, 2025, the Company:

issued 8,759 shares of common stock in connection with stock options exercised;

ii.

issued 3,761 shares of common stock through the Company's dividend reinvestment plan;

iii.

issued 183,260 shares of common stock in connection with restricted stock grants and the conversion of performance awards to shares of common stock;

iv.

issued 20,094 shares of common stock through the Employee Stock Purchase Plan;

issued 367,113 shares of common stock through the settlement of the equity forward contracts under the CEP;

vi.

withheld 74,517 shares of common stock to satisfy employees' tax withholding and other liabilities;

vii.

canceled 3,116 shares of restricted common stock upon forfeiture; and

viii.

repurchased 2,678,719 shares of common stock through the 2020 Stock Repurchase Program and 2025 Stock Repurchase Program, discussed below.

Deferred compensation granted under the Company's Second Amended and Restated 2009 Equity Incentive Plan (the "Plan") does not impact the Company's Consolidated Financial Statements until recognized as compensation cost.

The Company has a CEP under which the Company may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of its common stock from time to time. Actual sales will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company's common stock and the Company's determinations of the appropriate funding sources. The Company expects that, if entered into, it will physically settle each forward sale agreement on one or more dates specified by the Company on or prior to the maturity date of that particular forward sale agreement, in which case the Company will receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the forward sale price. However, the Company may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, the Company will pay the forward seller, in the form of a reduced initial forward sale price, a commission of up to 1.5% of the sales prices of all borrowed shares of common stock sold. During the year ended December 31, 2025, the Company settled the outstanding forward contracts that were entered into under the CEP during the year ended December 31, 2024, selling 367,113 shares of common stock for proceeds, net of fees, of $81,333,000, based on the gross weighted average price of $223.27 per share. During the year ended December 31, 2025, the Company did not have any new forward sale agreements under the CEP. As of December 31, 2025, the Company had $623,997,000 remaining authorized for issuance under the program.

F-27

In addition to the CEP, during the year ended December 31, 2024, the Company entered into the September 2024 Equity Offering pursuant to which we entered into forward contracts to sell 3,680,000 shares of common stock at a discount to the closing price of $226.52 per share for approximate net proceeds of $808,606,000 based on the initial forward price. The final proceeds will be determined on the date(s) of settlement and are subject to certain customary adjustments for dividends and a daily interest factor. During the year ended December 31, 2025, the Company amended each of the forward contracts related to the September 2024 Equity Offering to extend the settlement of the forward contracts to a date no later than December 31, 2026.

In October 2025, the Company terminated the 2020 Stock Repurchase Program, which had $162,407,000 remaining authorized for purchase, and adopted a new 2025 Stock Repurchase Program under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $500,000,000. During the year ended December 31, 2025, the Company repurchased 2,678,719 shares of common stock at an average price of $182.20 per share, including fees, for a total of $488,115,000 under the 2020 Stock Repurchase Program and 2025 Stock Repurchase Program. During the year ended December 31, 2024, the Company had no repurchases under the 2020 Stock Repurchase Program. During the year ended December 31, 2023, the Company repurchased 11,800 shares of common stock at an average price of $161.96 under the 2020 Stock Repurchase program. As of December 31, 2025, the Company had $163,769,000 remaining authorized for purchase under the 2025 Stock Repurchase Program.

5. Investments

Investments in Consolidated Real Estate Entities

Details regarding communities acquired in 2025, 2024 and 2023, are summarized in the following table (dollars in thousands):


Community name	Location	Number of communities	Apartment Homes	Purchase price	Commercial square feet
Avalon Hill Country	Austin, TX	1	554	$ 136,000	—
Avalon Wolf Ranch	Georgetown, TX	1	303	51,000	—
eaves Twin Creeks (1)	Allen, TX	1	216	44,784	—
Avalon Benbrook (1)	Benbrook, TX	1	301	60,194	—
Avalon Castle Hills (1)	Lewisville, TX	1	276	65,491	—
Avalon Frisco (1)	Frisco, TX	1	330	80,419	—
Avalon Frisco North (1)	Frisco, TX	1	349	88,606	—
eaves North Dallas (1)	Dallas, TX	1	372	76,085	—
Avalon at Palisades	Charlotte, NC	1	274	72,300	—
Avalon Coconut Creek	Coconut Creek, FL	1	270	99,000	—
eaves Redmond Campus II	Redmond, WA	1	40	15,650	—
Avalon Townhome Collection Brier Creek	Durham, NC	1	93	36,500	—
Total 2025 acquisitions		12	3,378	$ 826,029	—

Total 2024 acquisitions		6	1,441	$ 460,100	1,700

Total 2023 acquisitions		3	1,131	$ 277,200	—

(1) Included in the transaction to acquire six apartment communities in the Dallas-Fort Worth metropolitan area during the year ended December 31, 2025.

During the year ended December 31, 2025, the Company acquired the six apartment communities in the Dallas-Fort Worth metropolitan area included in the list above, containing 1,844 apartment homes for $415,579,000. The consideration was comprised of a cash payment of $193,000,000 and the final shares issued, adjusted for rounding, of 1,059,995 DownREIT Units,

F-28

which were valued based on the closing price of the Company's common stock on the acquisition date. The DownREIT Units are entitled to receive distributions at the same rate as dividends on a share of the Company’s common stock (pro rated for the time outstanding during the first quarter of issuance). Beginning on April 30, 2026, holders of DownREIT Units may present some or all of their units for redemption, being entitled to receive a cash amount per unit that is related to the then fair market value of the Company’s common stock, except that in lieu of such cash redemption the Company may elect to redeem units in exchange for an equal number of shares of the Company’s common stock.

In addition, during the year ended December 31, 2025, the Company acquired its joint venture partner's 50% interest in Avalon Alderwood Place, a 328 home community in Lynnwood, WA for a purchase price of $71,250,000. With the buyout of the joint venture partner's interest, Avalon Alderwood Place is now a wholly owned community and consolidated for financial reporting purposes.

Structured Investment Program

The Company operates a Structured Investment Program (the "SIP"), an investment platform through which the Company provides mezzanine loans or preferred equity to third-party multifamily developers. During the year ended December 31, 2025, the Company entered into two additional commitments, agreeing to provide an investment of up to $48,000,000 in multifamily development projects in California and Southeast Florida. As of December 31, 2025, the Company had nine commitments to fund up to $239,585,000 in the aggregate. The Company's investment commitments have a weighted average rate of return of 11.7% and a weighted average initial maturity date of May 2027. As of December 31, 2025 and 2024, the Company had funded $210,628,000 and $186,549,000 of its commitments, respectively. The Company recognized interest income of $27,172,000, $16,022,000 and $6,189,000 for the years ended December 31, 2025, 2024 and 2023, respectively, from the SIP. Interest income and any change in the expected credit loss are included as a component of Structured Investment Program interest income on the accompanying Consolidated Statements of Comprehensive Income.

The Company evaluates each SIP commitment to determine the classification as a loan or an investment in a real estate development project. As of December 31, 2025, all of the SIP commitments are classified as loans. The Company includes amounts outstanding under the SIP as a component of prepaid expenses and other assets on the accompanying Consolidated Balance Sheets. The Company evaluates the credit risk for each commitment on an ongoing basis, estimating the reserve for credit losses using relevant available information from internal and external sources. Market-based historical credit loss data provides the basis for the estimation of expected credit losses, with adjustments, if necessary, for differences in current commitment-specific risk characteristics, such as the amount of equity capital provided by a borrower, amount of senior debt secured by the project, nature of the real estate being developed or other factors.

Unconsolidated Investments

The Company accounts for its investments in unconsolidated entities under the equity method of accounting, NAV, or under the measurement alternative, as discussed in Note 1, "Organization, Basis of Presentation and Significant Accounting Policies," under Principles of Consolidation. As of December 31, 2025, the Company had investments in four unconsolidated entities with real estate holdings, with ownership interests ranging from 20.0% to 28.6%, coupled with other unconsolidated investments including investments in third-party property technology and sustainability focused companies through investment management funds. The significant accounting policies of the unconsolidated investments are consistent with those of the Company in all material respects. Certain of these investments are subject to various buy‑sell provisions or other rights which are customary in real estate joint venture agreements. The Company and its partners in these entities may initiate these provisions to either sell the Company's interest or acquire the interest from the Company's partner. The Company is responsible for the day-to-day operations of the unconsolidated communities below and is the management agent subject to the terms of management agreements for all communities except for Brandywine Apartments of Maryland, LLC, which is managed by a third party.

The following presents the Company's unconsolidated investments for the years ended December 31, 2025, 2024 and 2023, including significant activities during those years:

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Legacy JV—As part of the Archstone Acquisition the Company entered into a limited liability company agreement with Equity Residential, through which it assumed obligations of Archstone in the form of preferred interests, some of which were governed by tax protection arrangements (the "Legacy JV"). The Company has a 40.0% interest in the Legacy JV. During the years ended December 31, 2025, the Legacy JV redeemed the remaining outstanding preferred interest, with the Company contributing its proportionate share of $13,864,000 to the Legacy JV. During the years ended December 31, 2024 and 2023, the Legacy JV redeemed certain of the preferred interests and paid accrued dividends, for which the Company contributed $1,320,000 and $940,000, respectively. At December 31, 2025, after redemption, the Legacy JV had no remaining outstanding preferred interests.

NYTA MF Investors LLC ("NYC Joint Venture")—During 2018, the Company contributed five wholly-owned communities containing an aggregate of 1,301 apartment homes and 58,000 square feet of commercial space, located in New York City, NY, to a newly formed joint venture with the intent to own and operate the communities. The Company retained a 20.0% equity interest in the venture with the partners sharing in returns in accordance with their ownership interests. NYC Joint Venture has outstanding $394,734,000 fixed rate mortgage loans that are payable by the venture. The Company has not guaranteed the debt of NYC Joint Venture, nor does the Company have any obligation to fund this debt should NYC Joint Venture be unable to do so.

MVP I, LLC—During 2004, the Company entered into a joint venture agreement with an unrelated third-party to develop Avalon at Mission Bay II, an apartment community located in San Francisco, CA, which completed construction during 2006 and contains 313 apartment homes. The Company has a 25.0% equity interest in the venture. During the year ended December 31, 2025, MVP I, LLC repaid its $103,000,000 outstanding fixed rate mortgage loan at par upon maturity. The equity investors contributed capital in proportion to their ownership interests to repay the outstanding loan.

Brandywine Apartments of Maryland, LLC ("Brandywine")—The Company acquired its interest in Brandywine as part of the Archstone Acquisition. Brandywine owns a 305 apartment home community located in Washington, D.C. Brandywine is comprised of five members who hold various interests in the joint venture, with the Company having a 28.6% equity interest in Brandywine. Brandywine had an outstanding $17,651,000 fixed rate mortgage loan that is payable by the venture. The Company has not guaranteed the debt of Brandywine, nor does the Company have any obligation to fund this debt should Brandywine be unable to do so.

Avalon Alderwood MF Member, LLC—During 2019, the Company entered into a joint venture to develop, own, and operate Avalon Alderwood Place, an apartment community located in Lynnwood, WA, which completed construction during 2022 and contains 328 apartment homes. The Company owned a 50% interest in the venture prior to acquiring its joint venture partner's 50% interest during the year ended December 31, 2025 for a purchase price of $71,250,000 accounted for under the cost accumulation method. With the buyout of the joint venture partner's interest, Avalon Alderwood Place is now a wholly owned community and consolidated for financial reporting purposes.

Arts District Joint Venture—During 2020, the Company entered into a joint venture to develop, own, and operate AVA Arts District, an apartment community located in Los Angeles, CA, which completed construction and contains 475 apartment homes and 57,000 square feet of commercial space. As of December 31, 2025, the Company has a 25.0% interest in the venture. In June 2025, the Arts District joint venture secured a variable rate loan of up to $173,000,000. The outstanding borrowing is subject to an interest rate cap, which will limit the interest rate to 8.2%, based on the current borrowing spread. The loan matures in July 2028 and has two one-year extension options, subject to certain conditions. The joint venture used the proceeds to repay its outstanding $158,735,000, variable rate construction loan which was scheduled to mature in August 2025. The Company has provided the lender a partial payment guarantee for 25% of the loan's maximum borrowing capacity, on behalf of the venture. Any amounts payable under the 25% loan guarantee by the Company are obligations of the joint venture partners in proportion to their ownership interest, and in the event the Company is obligated to perform under its loan guarantee, its joint venture partner is obligated to reimburse the Company for 75% of amounts paid. As of December 31, 2025, the loan had an outstanding principal balance of $162,104,000. The venture is an unconsolidated VIE as the Company is not the primary beneficiary due to shared control and decision making with its venture partner. The Company and its venture partner share decision making authority for all significant aspects of the venture's activities including, but not limited to, changes in ownership, changes to the development plan or budget, and major operating decisions including annual business plans.

F-30

Property Technology and Environmental Investments—The Company has invested $72,428,000 in various third-party property technology and sustainability focused companies directly and indirectly through investment management funds. The Company’s interest in each individual investment is minor such that the Company does not have influence over operating or financial policies of the investments. In addition, as of December 31, 2025, the Company had $46,287,000 in outstanding equity commitments, with the timing and amount for these commitments to be fulfilled dependent on if, and when, investment opportunities are identified by the respective funds. During the years ended December 31, 2025, 2024 and 2023, the Company recognized realized and unrealized gains of $39,247,000, $33,137,000 and $4,161,000, respectively, related to these investments, which was reported as a component of income from unconsolidated investments on the accompanying Consolidated Statements of Comprehensive Income.

6. Real Estate Disposition Activities

Details regarding the real estate sales, which resulted in a net gain in accordance with GAAP of $335,713,000, excluding residential condominiums at The Park Loggia and post disposition gain (loss) true ups, are summarized in the following table (dollars in thousands):


Community name	Location	Period of sale	Apartment Homes	Gross sales price	Gain (Loss) on disposition (1)	Commercial square feet
Avalon Wilton on River Road	Wilton, CT	Q1 2025	102	$ 65,100	$ 56,476	—
Avalon Wesmont Station I & II	Wood-Ridge, NJ	Q2 2025	406	161,500	99,636	18,000
Avalon at Gallery Place	Washington D.C.	Q3 2025	203	87,100	63,026	9,000
Avalon First and M	Washington D.C.	Q3 2025	469	181,750	41,499	4,000
AVA NoMa	Washington D.C.	Q3 2025	438	142,480	31,051	7,000
Avalon Brooklyn Bay	Brooklyn, NY	Q3 2025	180	74,500	(1,668)	—
Archstone Redmond Lakeview	Redmond, WA	Q3 2025	166	63,250	34,454	—
AVA H Street	Washington D.C.	Q3 2025	138	36,000	12,175	—
Other real estate	Multiple	2025	N/A	—	4,241	—
Total of 2025 asset sales			2,102	$ 811,680	$ 340,890	38,000

Total of 2024 asset sales			1,532	$ 726,200	$ 363,208	24,000

Total of 2023 asset sales			987	$ 446,000	$ 287,587	27,000

(1) Gain (Loss) on disposition was reported in gain on sale of communities, net on the accompanying Consolidated Statements of Comprehensive Income.

As of December 31, 2025, the Company had three real estate assets that qualified as held for sale.

7. Commitments and Contingencies

Employment Agreements and Arrangements

The standard restricted stock, option and performance award agreements used by the Company in its compensation program provide that upon an employee's termination without cause or the employee's Retirement (as defined in the agreement), (i) all outstanding stock options and restricted shares of stock held by the employee will vest, and the employee will have up to 12 months or until the fifth anniversary of the grant date, if later, or until the option expiration date, if earlier, to exercise any options

F-31

then held and (ii) a pro rata share (based on the portion of the performance period that has been completed) of performance awards that have completed at least one year of their performance period shall vest, with settlement to occur at the end of the performance period in accordance with achievement thereunder. Under the agreements, Retirement generally means a termination of employment and other business relationships, other than for cause, after attainment of age 50, provided certain conditions are met, including that (i) the employee has worked for the Company for at least 10 years, (ii) the employee's age at Retirement plus years of employment with the Company equals at least 70 and (iii) the employee provides at least six months written notice of intent to retire.

If a sale event (as defined in the agreement) of the Company occurs, all outstanding multiyear performance awards will vest at their target value and will settle. The Company also has an Officer Severance Program (the “Program”). Under the Program, in the event an officer who is not otherwise covered by a severance arrangement is terminated (other than for cause), or chooses to terminate his or her employment for good reason (as defined in the agreement), in either case in connection with or within 24 months following a sale event (as defined in the agreement) of the Company, such officer will generally receive a cash lump sum payment equal to a multiple of the officer's covered compensation (base salary plus annual cash bonus). The multiple is one time for vice presidents and senior vice presidents, two times for executive vice presidents and three times for the chief executive officer. The officer's restricted stock, options and performance awards would also vest. Costs related to the Program are deferred and recognized over the requisite service period when considered by management to be probable and estimable.

Legal Contingencies

The Company recognizes a loss associated with contingent legal matters when the loss is probable and estimable.

In 2022 and early 2023, the Company was named as a defendant in cases brought by private litigants alleging antitrust violations by RealPage, Inc. and owners and/or operators of multifamily housing which utilize revenue management systems provided by RealPage, Inc. The Company engaged with the plaintiffs' counsel to explain why it believed that these cases were without merit as they pertained to the Company. Following these discussions, the plaintiffs filed a notice of voluntary dismissal in July 2023, which resulted in the Company being dismissed without prejudice from these cases. Subsequently, on November 1, 2023, the District of Columbia filed a lawsuit in the Superior Court of the District of Columbia against RealPage, Inc. and a number of owners and/or operators of multifamily housing in the District of Columbia, including the Company, alleging that the defendants violated the District of Columbia Antitrust Act by unlawfully agreeing to use RealPage, Inc. revenue management systems and sharing sensitive data (the "D.C. Antitrust Litigation"). The court has denied the Company’s motions to dismiss and for judgment on the pleadings.

On January 15, 2025, the Office of the Attorney General of the State of Maryland filed a lawsuit similar to the D.C. Antitrust Litigation in the Circuit Court for Prince George’s County, Maryland in which RealPage, Inc. and a number of owners and/or operators of multifamily properties in Maryland, including the Company, have been named and alleged to have violated state antitrust law (the “Maryland Antitrust Litigation”). On February 28, 2025, the Company filed a motion to dismiss.

While the Company intends to vigorously defend against the D.C. Antitrust Litigation, the Maryland Antitrust Litigation and the New Jersey Antitrust Litigation, the Company is unable to predict the outcome or estimate the amount of loss, if any, that may result from the lawsuits.

The Company is involved in various other claims and/or administrative proceedings that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these other outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

F-32

Lease Obligations

The Company owns seven apartment communities, two commercial properties and one development community located on land subject to ground leases expiring between July 2046 and May 2123. The Company has purchase options for all ground leases expiring prior to 2062. The ground leases for six of the seven apartment communities, the two commercial properties and one development community are operating leases, with rental expense recognized on a straight-line basis over the lease term. In addition, the Company is party to 13 leases for its corporate and regional offices with varying terms through 2033, all of which are operating leases. During the year ended December 31, 2025, the Company did not enter into any new ground leases.

During the year ended December 31, 2024, the Company entered into a new ground lease at Avalon Mission Valley, a development community in San Diego, CA, expiring May 2123, resulting in minimum lease payments over the term of the lease of $155,600,000. During the year ended December 31, 2025, the Company reached a construction milestone under the ground lease which activated a completion guaranty, obligating the Company to complete construction of the community and certain off-site infrastructure improvements prior to May 2030.

As of December 31, 2025 and 2024, the Company had total operating lease assets of $119,888,000 and $126,572,000, respectively, and lease obligations of $145,319,000 and $153,333,000, respectively, reported as components of right of use lease assets and lease liabilities, respectively, on the accompanying Consolidated Balance Sheets. The Company incurred costs of $14,827,000, $16,298,000 and $16,342,000 for the years ended December 31, 2025, 2024 and 2023, respectively, related to operating leases.

The Company has one apartment community located on land subject to a ground lease and four leases for portions of parking garages adjacent to apartment communities, that are finance leases. As of December 31, 2025 and 2024, the Company had total finance lease assets of $27,649,000 and $28,082,000, respectively, and total finance lease obligations of $19,881,000 and $19,949,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Consolidated Balance Sheets.

The following table details the weighted average remaining lease term and discount rates for the Company’s ground and office leases:


Weighted-average remaining lease term - finance leases	20 years
Weighted-average remaining lease term - operating leases	52 years
Weighted-average discount rate - finance leases	4.63%
Weighted-average discount rate - operating leases	5.20%

The following table details the future minimum payments of the Company's current leases as of December 31, 2025 (dollars in thousands):


	Operating Leases	Financing Leases
2026	$ 15,653	$ 1,091
2027	15,732	1,095
2028	14,838	1,096
2029	13,887	1,099
2030	12,742	1,101
Thereafter	392,364	33,562
Total	465,216	39,044
Less discount for time value	(319,897)	(19,163)
Lease liability	$ 145,319	$ 19,881

F-33

8. Segment Reporting

The Company's reportable operating segments include Same Store, Other Stabilized and Development/Redevelopment. Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change.

•

Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had stabilized occupancy as of the beginning of the respective prior year. For the year ended December 31, 2025, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2024, are not conducting or are not expected to conduct substantial redevelopment activities and are not held for sale as of December 31, 2025. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% physical occupancy or (ii) the one year anniversary of completion of development or redevelopment.

•

Other Stabilized is composed of completed consolidated communities that the Company owns and that are not Same Store but that had stabilized occupancy, as defined above, as of January 1, 2025, or which were acquired during the years ended December 31, 2025 or 2024. Other Stabilized excludes communities that are conducting or are probable to conduct substantial redevelopment activities within the fiscal year.

•

Development/Redevelopment is composed of (i) consolidated communities that are either currently under construction, or were under construction during the fiscal year, which may be partially or fully complete and operating, (ii) consolidated communities where substantial redevelopment is in progress or is probable to begin during the fiscal year and (iii) communities that have been complete for less than one year and did not have stabilized occupancy, as defined above, as of January 1, 2025.

In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment.

The Company's segment disclosures present the measure(s) used by the Chief Operating Decision Maker ("CODM") for assessing each segment's performance. The Company's CODM is comprised of several members of its executive management team, including its Chief Executive Officer and President, Chief Financial Officer, Chief Investment Officer, Chief Operating Officer, and Executive Vice President- Portfolio and Asset Management. The CODM uses net operating income ("NOI") as the primary financial measure for Same Store communities and Other Stabilized communities. NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), property management and other indirect operating expenses, net of corporate income, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, loss on extinguishment of debt, net, general and administrative expense, income from unconsolidated investments, Structured Investment Program interest income, depreciation expense, income tax expense (benefit), casualty and impairment loss, gain on sale of communities, net, other real estate activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis. The commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represent 1.6%, 1.7% and 1.8% of total NOI for the years ended December 31, 2025, 2024 and 2023, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income and consistent with how the Company's CODM evaluates total NOI.

F-34

A reconciliation of NOI to net income for years ended December 31, 2025, 2024 and 2023 is as follows (dollars in thousands):


	For the year ended December 31,
	2025	2024	2023
Net income	$ 1,056,599	$ 1,082,175	$ 928,438
Property management and other indirect operating expenses, net of corporate income	147,548	162,594	134,312
Expensed transaction, development and other pursuit costs, net of recoveries	10,846	18,341	33,479
Interest expense, net	259,181	226,589	205,992
Loss on extinguishment of debt, net	—	—	150
General and administrative expense	86,679	77,697	76,534
Income from unconsolidated investments	(39,691)	(32,231)	(8,436)
Structured Investment Program interest income	(27,476)	(18,451)	(5,018)
Depreciation expense	913,376	846,853	816,965
Income tax (benefit) expense	(1,135)	445	10,153
Casualty and impairment loss	1,276	2,935	9,118
Gain on sale of communities, net	(335,713)	(363,300)	(287,424)
Other real estate activity	(4,131)	(753)	(174)
Net operating income from real estate assets sold or held for sale	(46,410)	(92,814)	(123,303)
Net operating income	$ 2,020,949	$ 1,910,080	$ 1,790,786

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):


	For the year ended December 31,
	2025	2024	2023

Rental income from real estate assets sold or held for sale	$ 72,019	$ 140,404	$ 180,888
Operating expenses from real estate assets sold or held for sale	(25,609)	(47,590)	(57,585)
Net operating income from real estate assets sold or held for sale	$ 46,410	$ 92,814	$ 123,303

The primary performance measure for communities under development or redevelopment depends on the stage of completion. While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget.

The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at December 31, 2025 for the years ended December 31, 2025 and 2024 and at December 31, 2024 for the year ended December 31, 2023. Segment information for the years ended December 31, 2025, 2024 and 2023 has been adjusted to exclude the real estate assets that were sold from January 1, 2023 through December 31, 2025, or otherwise qualify as held for sale as of December 31, 2025, as described in Note 6, "Real Estate Disposition Activities."

F-35


	For the year ended December 31, 2025
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 2,739,511	$ 174,615	$ 47,538	$ 2,961,664
Same Store Operating Expense
Property Taxes	(306,405)			(306,405)
Payroll	(156,693)			(156,693)
Repairs & Maintenance	(159,930)			(159,930)
Utilities	(112,313)			(112,313)
Office Operations	(62,249)			(62,249)
Insurance	(42,098)			(42,098)
Marketing	(16,929)			(16,929)
Same Store Operating Expense	(856,617)	—	—	(856,617)
Non-Same Store Operating Expense	—	(61,014)	(23,084)	(84,098)
Total Expenses	(856,617)	(61,014)	(23,084)	(940,715)
Total NOI	$ 1,882,894	$ 113,601	$ 24,454	$ 2,020,949
Gross Real Estate	$ 23,850,464	$ 2,592,636	$ 2,675,257	$ 29,118,357

	For the year ended December 31, 2024
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 2,673,271	$ 83,334	$ 9,667	$ 2,766,272
Same Store Operating Expense
Property Taxes	(303,406)			(303,406)
Payroll	(150,476)			(150,476)
Repairs & Maintenance	(146,516)			(146,516)
Utilities	(106,687)			(106,687)
Office Operations	(62,250)			(62,250)
Insurance	(39,434)			(39,434)
Marketing	(15,259)			(15,259)
Same Store Operating Expense	(824,028)	—	—	(824,028)
Non-Same Store Operating Expense	—	(26,305)	(5,859)	(32,164)
Total Expenses	(824,028)	(26,305)	(5,859)	(856,192)
Total NOI	$ 1,849,243	$ 57,029	$ 3,808	$ 1,910,080
Gross Real Estate	$ 23,563,613	$ 1,618,830	$ 1,519,907	$ 26,702,350

	For the year ended December 31, 2023
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 2,494,804	$ 78,325	$ 6,170	$ 2,579,299
Same Store Operating Expense
Property Taxes	(278,381)			(278,381)
Payroll	(145,542)			(145,542)
Repairs & Maintenance	(135,751)			(135,751)

F-36


Utilities	(88,642)			(88,642)
Office Operations	(61,676)			(61,676)
Insurance	(34,941)			(34,941)
Marketing	(14,151)			(14,151)
Same Store Operating Expense	(759,084)	—	—	(759,084)
Non-Same Store Operating Expense	—	(24,587)	(4,842)	(29,429)
Total Expenses	(759,084)	(24,587)	(4,842)	(788,513)
Total NOI	$ 1,735,720	$ 53,738	$ 1,328	$ 1,790,786
Gross Real Estate	$ 22,236,978	$ 1,269,462	$ 1,600,314	$ 25,106,754

________________________

(1)

Does not include non-allocated revenue. Non-allocated revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Non-allocated revenue is $7,042, $7,081 and $7,722 for the years ended December 31, 2025, 2024 and 2023, respectively.

(2)

Does not include non-allocated gross real estate and land held for development. Non-allocated gross real estate is $99,952, $118,341 and $70,822 for the years ended December 31, 2025, 2024 and 2023, respectively. Land held for development gross real estate is $123,751, $151,922 and $199,062 for the years ended December 31, 2025, 2024 and 2023, respectively.

9. Stock-Based Compensation Plans

The Company's Plan includes an authorization to issue shares of the Company's common stock, par value $0.01 per share. At December 31, 2025, the Company had 4,497,534 shares remaining available to issue under the Plan, exclusive of shares that may be issued to satisfy currently outstanding awards such as stock options or performance awards. The Plan provides for equity awards to associates, officers, non-employee directors and other key personnel of the Company and its subsidiaries in the form of restricted stock, restricted stock units, stock options that qualify as incentive stock options ("ISOs") under Section 422 of the Code, non-qualified stock options, stock appreciation rights and performance awards, among others. The Plan expires in 2027, however before its expiration the Company expects to amend the plan or adopt a new plan to allow for continued grants of equity awards.

The Company's share-based compensation framework includes annual restricted stock awards and multi-year performance awards (the "Performance Awards"). The annual restricted stock vests over a three-year period at one-third per year. For annual restricted stock awards, in lieu of restricted stock, an officer may elect to receive up to 100% of the award value, in increments of 25%, in the form of stock options, which vests consistent with the restricted stock awards. Annually, the Company grants a target number of performance awards, with the ultimate award determined by the total shareholder return of the Company's common stock and/or operating performance metrics, measured over a performance period of three years. Performance units earned at the end of the measurement period are settled in fully vested shares of common stock and a payment of a cash amount representing accrued dividends on earned performance awards. The Company granted supplemental stock options in February 2021, that have a ten-year term and cliff vested on March 1, 2023. The options were granted at an exercise price that equaled the closing stock price on the grant date with recipients having 12 months to exercise the option if terminated without cause and will have until the expiration date to exercise the options if they retire.

For Performance Awards, after the first year of the performance period, if an employee's employment terminates on account of death, disability, retirement, or termination without cause, the employee's target grant will be pro-rated based on the employee's service time during the performance period. The final payout is based on actual performance, at which time the units will be converted into shares and a payment of a cash amount for accrued dividends based on actual performance. For other terminating events, performance awards are generally forfeited.

Information with respect to stock options granted under the Plan is as follows:

F-37


	Options	Weighted average exercise price per option
Options Outstanding at December 31, 2022	293,813	$ 181.85
Granted (1)	15,744	177.83
Exercised	(5,773)	163.56
Forfeited	—	—
Options Outstanding at December 31, 2023	303,784	$ 181.99
Granted (1)	13,759	172.11
Exercised	(41,619)	179.89
Forfeited	—	—
Expired	(5,062)	180.32
Options Outstanding at December 31, 2024	270,862	$ 181.84
Granted (1)	9,473	221.58
Exercised	(8,759)	180.32
Forfeited	—	—
Options Outstanding at December 31, 2025	271,576	$ 183.28
Options Exercisable:
December 31, 2023	279,894	$ 180.97
December 31, 2024	246,877	$ 181.82
December 31, 2025	249,486	$ 182.29

__________________________________

(1)

All options are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

The Company used the Black-Scholes Option Pricing model to determine the grant date fair value of options. The assumptions used are as follows:


		2025
Dividend yield		3.5%
Estimated volatility		30.1%
Risk free rate		4.06%
Expected life of options		5 years
Estimated fair value		$50.92

The following summarizes the exercise prices and contractual lives of options outstanding as of December 31, 2025:


The Plan Number of Options	Range—Exercise Price			Weighted Average Remaining Contractual Term (in years)
252,310	$172.00	-	$181.99	5.4
9,473	$221.00	-	$230.99	9.2
9,793	$236.00	-	$245.99	6.1
271,576

Options outstanding at December 31, 2025 had an intrinsic value of $384,000. Options exercisable had an intrinsic value of $292,000 and had a weighted average contractual life of 5.3 years. The intrinsic value of options exercised under the Plan during 2025, 2024 and 2023 was $288,000, $1,394,000 and $113,000, respectively.

F-38

Information with respect to performance awards granted is as follows:


	Performance awards	Weighted average grant date fair value per award
Outstanding at December 31, 2022	279,067	$ 225.46
Granted	90,215	193.85
Change in awards based on performance (1)	(31,345)	241.49
Converted to shares of common stock	(60,016)	238.71
Forfeited	(2,719)	212.05
Outstanding at December 31, 2023	275,202	$ 210.52
Granted	95,782	185.97
Change in awards based on performance (1)	30,375	216.50
Converted to shares of common stock	(146,725)	201.07
Forfeited	(4,511)	201.41
Outstanding at December 31, 2024	250,123	$ 207.55
Granted	79,077	222.89
Change in awards based on performance (1)	34,016	257.33
Converted to shares of common stock	(103,332)	254.95
Forfeited	(3,507)	196.08
Outstanding at December 31, 2025	256,377	$ 199.94

_________________________________

(1) Represents the change in the number of performance awards earned based on performance achievement.

The Company grants performance awards based on (i) the total shareholder return metrics for the Company’s common stock or (ii) financial metrics related to operating performance, net asset value and leverage metrics of the Company. The number of performance awards granted that are based on total shareholder return metrics and financial metrics are as follows:


	2025	2024	2023
Total shareholder return metrics	43,495	52,683	49,611
Financial metrics	35,582	43,099	40,604
Total granted	79,077	95,782	90,215

The Company used a Monte Carlo model to assess the compensation cost associated with the portion of the performance awards granted for which achievement will be determined by using total shareholder return measures. The assumptions used are as follows:


	2025	2024	2023
Dividend yield	3.2%	3.9%	3.7%
Estimated volatility over the life of the plan (1)	20.4% - 21.6%	20.5% - 22.8%	22.9% - 26.1%
Risk free rate	4.00% - 4.01%	3.92% - 4.59%	4.35% - 4.61%
Estimated performance award value based on total shareholder return measure	$224.11	$189.47	$206.97

_________________________________

(1) Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

For the portion of the performance awards granted for which achievement will be determined by using financial metrics, the compensation cost was based on an average grant date value of $221.58, $175.54 and $177.83, for the years ended December 31, 2025, 2024 and 2023, respectively, and the Company's estimate of corporate achievement for the financial metrics.

F-39

Information with respect to restricted stock granted is as follows:


	Restricted stock shares	Weighted average grant date fair value per share	Restricted stock shares converted from performance awards
Outstanding at December 31, 2022	161,714	$ 210.97	26,370
Granted	93,146	177.70	—
Vested	(79,450)	207.93	(26,370)
Forfeited	(2,119)	194.78	—
Outstanding at December 31, 2023	173,291	$ 194.68	—
Granted	104,081	173.14	—
Vested	(90,582)	194.89	—
Forfeited	(4,408)	181.73	—
Outstanding at December 31, 2024	182,382	$ 182.59	—
Granted	79,928	221.17	—
Vested	(92,015)	191.69	—
Forfeited	(3,116)	197.01	—
Outstanding at December 31, 2025	167,179	$ 195.76	—

Total employee stock-based compensation cost recognized in income was $26,614,000, $25,390,000 and $27,417,000 for the years ended December 31, 2025, 2024 and 2023, respectively, and total capitalized stock-based compensation cost was $11,459,000, $11,117,000 and $10,906,000 for the years ended December 31, 2025, 2024 and 2023, respectively. At December 31, 2025, there was a total unrecognized compensation cost of $28,107,000 for unvested restricted stock, stock options and performance awards, which is expected to be recognized over a weighted average period of 1.8 years. The Company reverses any previously recognized compensation cost for forfeitures as they occur.

Employee Stock Purchase Plan

In October 1996, the Company adopted the 1996 Non-Qualified Employee Stock Purchase Plan (as amended, the "ESPP"). Initially, 1,000,000 shares of common stock were reserved for issuance, and as of December 31, 2025, there are 529,908 shares remaining available for issuance under the ESPP. Employees of the Company generally are eligible to participate in the ESPP if, as of the last day of the applicable purchase period, they have been employed by the Company for at least one calendar month. Under the ESPP, eligible employees can acquire shares of the Company's common stock through payroll deductions, subject to maximum purchase limitations, during two purchase periods. The first purchase period begins January 1 and ends June 10, and the second purchase period begins July 1 and ends December 10. The purchase price for common stock under the plan is 85% of the lesser of the fair market value of the Company's common stock on the first or the last day of the applicable purchase period. The offering dates, purchase dates and duration of purchase periods may be changed if the change is announced prior to the beginning of the affected date or purchase period. The Company issued 20,094, 19,014 and 23,059 shares and recognized compensation expense of $575,000, $859,000 and $911,000 under the ESPP for the years ended December 31, 2025, 2024 and 2023, respectively. The Company accounts for transactions under the ESPP using the fair value method prescribed by accounting guidance applicable to entities that use employee share purchase plans.

F-40

10. Related Party Arrangements

Unconsolidated Entities

The Company manages unconsolidated real estate entities and provides other real estate related services to third parties, for which it receives asset management, property management, construction, development and redevelopment fee revenue. From these entities, the Company earned fees of $7,042,000, $7,081,000 and $7,722,000 for the years ended December 31, 2025, 2024 and 2023, respectively. In addition, the Company had outstanding receivables associated with its property and construction management roles of $1,395,000 and $1,680,000 as of December 31, 2025 and 2024, respectively.

Director Compensation

Directors of the Company who are also employees receive no additional compensation for their services as a director. Following each annual meeting of stockholders, non-employee directors receive (i) a number of shares of restricted stock (or deferred stock units) having a value of $200,000 and (ii) a cash payment of $100,000, payable in equal quarterly installments of $25,000. The number of shares of restricted stock (or deferred stock units) is calculated based on the closing price on the day of the award. Non-employee directors may elect to receive all or a portion of cash payments in the form of deferred stock units. Additionally, the non-executive Chairman receives an additional annual fee of $250,000 payable in equal quarterly installments of $62,500, the Lead Independent Director receives in the aggregate an additional annual fee of $50,000 payable in equal quarterly installments of $12,500, the non-employee director serving as the chairperson of the Audit Committee receives an additional annual fee of $30,000 per year payable in equal quarterly installments of $7,500, the non-employee director serving as the chairperson of the Compensation Committee receives an additional annual fee of $25,000 per year payable in equal quarterly installments of $6,250 and the Nominating, Governance and Corporate Responsibility and Investment and Finance Committee chairpersons receive an additional annual fee of $20,000 payable in equal quarterly installments of $5,000.

The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock units in the amount of $2,476,000, $2,397,000 and $2,446,000 for the years ended December 31, 2025, 2024 and 2023, respectively, as a component of general and administrative expense on the accompanying Consolidated Statements of Comprehensive Income. Deferred compensation relating to these restricted stock grants and deferred stock units to non-employee directors was $910,000, $786,000 and $799,000 on December 31, 2025, 2024 and 2023, respectively, reported as a component of prepaid expenses and other assets on the accompanying Consolidated Balance Sheets.

11. Fair Value

Financial Instruments Carried at Fair Value

Derivative Financial Instruments

Hedging Derivatives are carried at fair value in the Company's financial statements. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions which have an A- or better credit rating by the Standard & Poor's Ratings Group or equivalent, and monitors the credit ratings of counterparties and the exposure of the Company to any single entity. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. The Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, such as interest rate, term to maturity and volatility. The Hedging Derivatives credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, which the Company concluded are not significant. As a result, the Company determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following table summarizes the consolidated derivative positions at December 31, 2025 (dollars in thousands):

F-41


	Non-designated Hedges	Cash Flow Hedges
	Interest Rate Caps	Interest Rate Swaps
Notional balance	$ 391,846	$ 550,000
Weighted average interest rate (1)	4.0%	N/A
Weighted average capped/swapped interest rate	6.7%	3.5%
Earliest maturity date	February 2026	April 2029
Latest maturity date	January 2027	April 2029

_________________________________

(1)

For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.

The following derivative activity occurred during the year ended December 31, 2025:

•

The Company entered into interest rate swap agreements with a notional amount of $550,000,000 to reduce the impact of variability in interest rates on the Term Loan, which the Company expects to remain outstanding through maturity of the Term Loan.

•

In connection with the issuance of the Company's $400,000,000 unsecured notes in July 2025 maturing in August 2035, the Company terminated $200,000,000 of interest rate swap agreements designated as cash flow hedges of the interest rate variability on the issuance of the unsecured notes, receiving payments of $4,099,000 in July 2025 which will be recognized over the life of the unsecured notes as a reduction in the effective interest rate. Of the $200,000,000 forward interest rate swap agreements terminated, $100,000,000 were entered into during the year ended December 31, 2025. The Company has deferred these gains in accumulated other comprehensive income on the accompanying Consolidated Balance Sheets, and is recognizing the impact as a component of interest expense, net, over the term of the respective hedged debt.

•

In connection with the issuance of the Company's $400,000,000 unsecured notes in December 2025 maturing in December 2030, the Company entered into and terminated $100,000,000 of interest rate swap agreements designated as cash flow hedges of the interest rate variability on the issuance of the unsecured notes, receiving payments of $242,000 in November 2025 which will be recognized over the life of the unsecured notes as a reduction in the effective interest rate. The Company has deferred these gains in accumulated other comprehensive income on the accompanying Consolidated Balance Sheets, and is recognizing the impact as a component of interest expense, net, over the term of the respective hedged debt.

The Company had certain derivatives not designated as hedges during the years ended December 31, 2025, 2024 and 2023, for which fair value changes during each of the respective years were not material.

Cash flow hedge gains reclassified from accumulated other comprehensive income into earnings were $3,330,000 and $471,000 for the years ended December 31, 2025 and 2024. Cash flow hedge losses reclassified from accumulated other comprehensive income into earnings were $1,360,000 for the year ended December 31, 2023.

The Company anticipates reclassifying approximately $2,478,000 of net hedging gains from accumulated other comprehensive income into earnings within the next 12 months as an offset to the hedged item during this period.

F-42

Financial Instruments Not Carried at Fair Value

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalent and restricted cash balances are held with various financial institutions within accounts designed to preserve principal. The Company monitors credit ratings of these financial institutions and the concentration of cash, cash equivalents and restricted cash balances with any one financial institution and believes the likelihood of realizing material losses related to cash, cash equivalent and restricted cash balances is remote. Cash, cash equivalents and restricted cash are carried at their face amounts, which reasonably approximate their fair values and are Level 1 within the fair value hierarchy.

Other Financial Instruments

Rents and other receivables and prepaid expenses, accounts and construction payable and accrued expenses and other liabilities are carried at their face amounts, which reasonably approximate their fair values. The Company determined that its notes receivables approximate fair value, because interest rates, yields and other terms are consistent with interest rates, yields and other terms currently available for similar instruments and are considered to be a Level 2 price within the fair value hierarchy.

Equity Securities

The Company has direct equity investments in third-party property technology companies. These investments are accounted for using the measurement alternative and are valued at the market price of observable transactions. During the years ended December 31, 2025, 2024 and 2023, the Company recognized unrealized gains of $36,096,000, $21,790,000 and $1,899,000, respectively, related to these investments, which was reported as a component of income from unconsolidated investments on the accompanying Consolidated Statements of Comprehensive Income. As of December 31, 2025, the Company had recorded cumulative fair value adjustments of $67,572,000 for unrealized gains related to equity securities.

Indebtedness

The Company values its fixed rate unsecured debt using quoted market prices, a Level 1 price within the fair value hierarchy. The Company values its mortgage notes payable, the Term Loan and any outstanding amounts under the Credit Facility and Commercial Paper Program using a discounted cash flow analysis on the expected cash flows of each instrument. This analysis reflects the contractual terms of the instrument, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The process also considers credit valuation adjustments to appropriately reflect the Company's nonperformance risk. The Company has concluded that the value of its mortgage notes payable, Term Loan and any outstanding amounts under the Credit Facility and Commercial Paper Program are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy.

Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis

The following tables summarize the classification between the three levels of the fair value hierarchy of the Company's financial instruments measured or disclosed at fair value on a recurring basis (dollars in thousands):

F-43


	December 31, 2025
Description	Total Fair Value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Investments
Notes Receivable, net	$ 259,051	$ —	$ 259,051	$ —
Total Assets	$ 259,051	$ —	$ 259,051	$ —

Liabilities
Interest Rate Swaps - Liabilities	$ 4,046	$ —	$ 4,046	$ —
Indebtedness
Fixed rate unsecured debt	7,025,656	7,025,656	—	—
Mortgage notes payable, Commercial Paper and Term Loan	1,970,177	—	1,970,177	—
Total Liabilities	$ 8,999,879	$ 7,025,656	$ 1,974,223	$ —

	December 31, 2024
Description	Total Fair Value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Investments
Notes Receivable, net	$ 223,896	$ —	$ 223,896	$ —
Non-Designated Hedges
Interest Rate Caps	24	—	24	—
Interest Rate Swaps - Assets	6,821	—	6,821	—
Total Assets	$ 230,741	$ —	$ 230,741	$ —

Liabilities
Indebtedness
Fixed rate unsecured debt	$ 6,796,066	$ 6,796,066	$ —	$ —
Mortgage notes payable and Commercial Paper Program	660,170	—	660,170	—
Total Liabilities	$ 7,456,236	$ 6,796,066	$ 660,170	$ —

F-44

12. Subsequent Events

The Company has evaluated subsequent events, through the date on which this Form 10-K was filed, the date on which these financial statements were issued, and identified the items below for discussion. In 2026, the Company had the following activity:

•

In January 2026, the Company sold Avalon Sunset Towers, located in San Francisco, CA, containing 243 apartment homes for $105,000,000.

•

In February 2026, the Company sold Avalon White Plains, located in White Plains, NY, containing 407 apartment homes for $166,000,000.

•

From January 1, 2026 through February 26, 2026, the Company repurchased 637,958 shares of common stock at an average price of $176.85 per share, including fees, for a total of $112,824,000 under the 2025 Stock Repurchase Program. On February 26, 2026, the Company terminated the remaining authorization under the 2025 Stock Repurchase Program and adopted a new stock repurchase program under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $1,000,000,000 (the “2026 Stock Repurchase Program”). Purchases of common stock under the 2026 Stock Repurchase Program may occur from time to time at the Company’s discretion. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The 2026 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice.

F-45

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
SAME STORE
NEW ENGLAND
Avalon at Lexington	Lexington, MA	198	$ 2,124	$ 12,561	$ 18,294	$ 2,124	$ 30,855	$ 32,979	$ 23,856	$ 9,123	$ 9,397	$ —	1994
eaves Wilmington	Wilmington, MA	204	2,129	17,563	12,669	2,129	30,232	32,361	23,432	8,929	8,956	—	1999
eaves Quincy	Quincy, MA	245	1,743	14,662	18,709	1,743	33,371	35,114	26,235	8,879	10,307	—	1986/1995
eaves Wilmington West	Wilmington, MA	120	3,318	13,465	6,026	3,318	19,491	22,809	14,807	8,002	8,631	—	2002
Avalon at The Pinehills	Plymouth, MA	192	6,876	30,313	12,207	6,876	42,520	49,396	26,836	22,560	23,765	—	2004
eaves Peabody	Peabody, MA	286	4,645	18,919	20,161	4,645	39,080	43,725	25,661	18,064	17,782	—	1962/2004
Avalon at Bedford Center	Bedford, MA	139	4,258	20,551	6,316	4,258	26,867	31,125	19,641	11,484	12,238	—	2006
Avalon at Chestnut Hill	Chestnut Hill, MA	204	14,572	45,868	21,199	14,572	67,067	81,639	39,594	42,045	43,107	—	2007
Avalon at Lexington Hills	Lexington, MA	387	8,691	78,502	22,847	8,691	101,349	110,040	64,455	45,585	47,461	—	2008
Avalon Acton	Acton, MA	380	13,124	48,630	14,025	13,124	62,655	75,779	38,843	36,936	39,493	45,000	2008
Avalon at the Hingham Shipyard	Hingham, MA	235	12,218	41,516	17,341	12,218	58,857	71,075	37,312	33,763	35,185	—	2009
Avalon Acton II	Acton, MA	86	1,723	29,375	26	1,723	29,401	31,124	5,749	25,375	26,466	—	2021
Avalon Northborough	Northborough, MA	382	8,144	52,178	13,565	8,144	65,743	73,887	36,466	37,421	38,547	—	2009
Avalon Exeter (1)	Boston, MA	187	—	109,978	5,910	—	115,888	115,888	45,950	69,938	73,163	—	2014
Avalon Natick	Natick, MA	407	15,645	64,845	6,764	15,645	71,609	87,254	31,404	55,850	57,856	—	2013
Avalon at Assembly Row	Somerville, MA	195	8,599	52,454	9,980	8,599	62,434	71,033	26,020	45,013	46,552	—	2015
AVA Somerville	Somerville, MA	250	10,944	56,457	9,618	10,944	66,075	77,019	27,149	49,870	50,751	—	2015

F-46

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
AVA Back Bay	Boston, MA	271	9,034	36,536	54,944	9,034	91,480	100,514	60,425	40,089	42,653	—	1968/1998
Avalon at Prudential Center II	Boston, MA	266	8,776	35,479	67,208	8,776	102,687	111,463	62,514	48,949	52,210	—	1968/1998
Avalon at Prudential Center I	Boston, MA	243	8,002	32,349	59,007	8,002	91,356	99,358	54,803	44,555	47,261	—	1968/1998
eaves Burlington	Burlington, MA	203	7,714	32,499	11,802	7,714	44,301	52,015	20,575	31,440	32,237	—	1988/2012
Avalon Burlington	Burlington, MA	312	15,600	63,549	21,738	15,600	85,287	100,887	37,389	63,498	65,324	—	1989/2013
Avalon Marlborough	Marlborough, MA	350	15,367	59,723	5,507	15,367	65,230	80,597	24,219	56,378	58,252	—	2015
Avalon North Station	Boston, MA	503	22,796	247,270	1,684	22,796	248,954	271,750	74,882	196,868	204,645	—	2017
Avalon Framingham	Framingham, MA	180	9,315	34,604	1,302	9,315	35,906	45,221	12,852	32,369	33,154	—	2015
Avalon Quincy	Quincy, MA	395	14,694	79,655	2,565	14,694	82,220	96,914	26,237	70,677	72,608	—	2017
Avalon Easton	South Easton, MA	290	3,170	60,785	2,987	3,170	63,772	66,942	19,307	47,635	48,807	—	2017
Avalon Residences at the Hingham Shipyard	Hingham, MA	190	8,998	55,366	1,400	8,998	56,766	65,764	15,153	50,611	52,248	—	2019
Avalon Sudbury	Sudbury, MA	250	20,280	66,510	1,477	20,280	67,987	88,267	18,697	69,570	71,743	—	2019
Avalon Saugus	Saugus, MA	280	17,808	72,196	1,750	17,808	73,946	91,754	18,304	73,450	75,704	—	2019
Avalon Norwood	Norwood, MA	198	9,478	51,762	376	9,478	52,138	61,616	12,316	49,300	50,954	—	2020
Avalon Marlborough II	Marlborough, MA	123	5,523	36,175	72	5,523	36,247	41,770	7,380	34,390	35,746	—	2020
Avalon Easton II	South Easton, MA	44	570	14,090	12	570	14,102	14,672	2,224	12,448	12,975	—	2021
Avalon Woburn	Woburn, MA	350	$ 21,576	$ 97,848	$ 1,161	$ 21,576	$ 99,009	$ 120,585	$ 16,270	$ 104,315	$ 108,276	$ —	2022

F-47

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon North Andover	North Andover, MA	221	13,618	63,125	11	13,618	63,136	76,754	7,276	69,478	71,885	—	2023
Avalon Brighton	Boston, MA	180	11,166	77,850	342	11,166	78,192	89,358	8,344	81,014	84,147	—	2023
AVA North Point	Cambridge, MA	265	31,263	83,829	2,526	31,263	86,355	117,618	22,089	95,529	96,336	—	2018/2019
Avalon Bear Hill	Waltham, MA	324	27,350	98,537	31,136	27,350	129,673	157,023	60,856	96,167	98,288	—	1999/2013
TOTAL NEW ENGLAND		9,535	$ 400,851	$ 2,107,574	$ 484,664	$ 400,851	$ 2,592,238	$ 2,993,089	$ 1,095,522	$ 1,897,567	$ 1,965,110	$ 45,000

METRO NY/NJ
New York City, NY
Avalon Riverview (3)	Long Island City, NY	372	$ —	$ 94,061	$ 21,901	$ —	$ 115,962	$ 115,962	$ 88,595	$ 27,367	$ 29,433	$ —	2002
Avalon Riverview North (3)	Long Island City, NY	602	—	165,932	22,825	—	188,757	188,757	111,601	77,156	81,586	—	2008
AVA Fort Greene	Brooklyn, NY	631	83,038	216,802	14,660	83,038	231,462	314,500	123,589	190,911	198,019	—	2010
AVA DoBro	Brooklyn, NY	500	76,127	206,762	2,775	76,127	209,537	285,664	70,877	214,787	221,044	—	2017
Avalon Willoughby Square	Brooklyn, NY	326	49,635	134,840	2,280	49,635	137,120	186,755	44,350	142,405	146,091	—	2017
Avalon Midtown West	New York, NY	550	154,730	191,891	42,405	154,730	234,296	389,026	102,925	286,101	293,624	62,500	1998/2013
Avalon Clinton North	New York, NY	339	84,069	111,729	13,003	84,069	124,732	208,801	57,555	151,246	154,989	126,400	2008/2013
Avalon Clinton South	New York, NY	288	71,421	94,948	7,226	71,421	102,174	173,595	48,139	125,456	128,467	104,500	2007/2013
Total New York City, NY		3,608	$ 519,020	$ 1,216,965	$ 127,075	$ 519,020	$ 1,344,040	$ 1,863,060	$ 647,631	$ 1,215,429	$ 1,253,253	$ 293,400

F-48

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
New York - Suburban
Avalon Commons (2)	Smithtown, NY	312	$ 4,679	$ 27,811	$ 21,265	$ 4,679	$ 49,076	$ 53,755	$ 37,179	$ 16,576	$ 16,197	$ —	1997
Avalon Melville	Melville, NY	494	9,228	50,059	29,043	9,228	79,102	88,330	61,006	27,324	28,680	—	1997
Avalon Rockville Centre I	Rockville Centre, NY	349	32,212	78,806	8,866	32,212	87,672	119,884	45,607	74,277	76,914	—	2012
Avalon Garden City	Garden City, NY	204	18,205	49,301	3,343	18,205	52,644	70,849	24,166	46,683	47,850	—	2013
Avalon Huntington Station	Huntington Station, NY	303	21,899	58,429	4,731	21,899	63,160	85,059	24,835	60,224	61,511	—	2014
Avalon Great Neck	Great Neck, NY	191	14,777	65,412	1,863	14,777	67,275	82,052	20,712	61,340	62,472	—	2017
Avalon Rockville Centre II	Rockville Centre, NY	165	7,534	50,981	902	7,534	51,883	59,417	15,841	43,576	45,126	—	2017
Avalon Somers	Baldwin Place, NY	152	5,608	40,591	166	5,608	40,757	46,365	12,263	34,102	35,299	—	2018
Avalon Yonkers	Yonkers, NY	590	28,343	164,203	1,369	28,343	165,572	193,915	35,669	158,246	172,597	—	2021
Avalon Harrison	Harrison, NY	143	14,380	75,914	1,470	14,380	77,384	91,764	10,669	81,095	83,243	—	2023
Avalon Harbor Isle	Island Park, NY	172	18,812	75,401	10	18,812	75,411	94,223	9,728	84,495	88,467	—	2022
Avalon Westbury	Westbury, NY	396	69,620	49,350	18,255	69,620	67,605	137,225	38,196	99,029	99,962	—	2006/2013
Total New York - Suburban		3,471	$ 245,297	$ 786,258	$ 91,283	$ 245,297	$ 877,541	$ 1,122,838	$ 335,871	$ 786,967	$ 818,318	$ —

New Jersey
Avalon Cove	Jersey City, NJ	504	$ 8,760	$ 82,422	$ 38,243	$ 8,760	$ 120,665	$ 129,425	$ 102,535	$ 26,890	$ 30,246	$ —	1997
eaves West Windsor	West Windsor, NJ	512	5,585	21,752	38,583	5,585	60,335	65,920	42,971	22,949	23,263	—	1988/1993

F-49

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon at Edgewater I	Edgewater, NJ	168	$ 5,982	$ 24,389	$ 12,341	$ 5,982	$ 36,730	$ 42,712	$ 26,766	$ 15,946	$ 16,377	$ —	2002
Avalon Townhome Collection Florham Park	Florham Park, NJ	270	6,647	34,906	19,771	6,647	54,677	61,324	39,951	21,373	22,179	—	2001
Avalon North Bergen	North Bergen, NJ	164	8,984	30,994	2,468	8,984	33,462	42,446	15,605	26,841	27,270	—	2012
Avalon Bloomingdale	Bloomingdale, NJ	174	3,006	27,801	1,799	3,006	29,600	32,606	12,399	20,207	20,930	—	2014
Avalon Wharton	Wharton, NJ	247	2,273	48,609	2,322	2,273	50,931	53,204	19,630	33,574	34,831	—	2015
Avalon Bloomfield Station (1)	Bloomfield, NJ	224	10,701	36,430	4,011	10,701	40,441	51,142	14,549	36,593	36,716	—	2015
Avalon Townhome Collection Roseland	Roseland, NJ	136	11,288	34,868	1,633	11,288	36,501	47,789	13,428	34,361	35,348	—	2015
Avalon Princeton	Princeton, NJ	280	26,461	68,003	2,793	26,461	70,796	97,257	23,256	74,001	75,869	—	2017
Avalon Union	Union, NJ	202	11,695	36,315	2,191	11,695	38,506	50,201	13,367	36,834	37,981	—	2016
Avalon Hoboken	Hoboken, NJ	217	37,237	94,990	4,490	37,237	99,480	136,717	39,319	97,398	99,651	—	2008/2016
Avalon Maplewood	Maplewood, NJ	235	15,179	49,425	4,664	15,179	54,089	69,268	16,998	52,270	52,695	—	2018
Avalon Boonton	Boonton, NJ	350	3,595	89,407	2,251	3,595	91,658	95,253	22,690	72,563	75,547	—	2019
Avalon Teaneck	Teaneck, NJ	248	12,588	60,257	437	12,588	60,694	73,282	14,439	58,843	60,513	—	2020
Avalon Piscataway	Piscataway, NJ	360	14,329	75,897	1,839	14,329	77,736	92,065	20,751	71,314	73,604	—	2019
Avalon Old Bridge	Old Bridge, NJ	252	6,895	64,907	1,462	6,895	66,369	73,264	13,365	59,899	61,822	—	2021
Avalon Somerville Station (1)	Somerville, NJ	374	16,672	98,229	898	16,672	99,127	115,799	13,100	102,699	106,769	—	2023
Avalon at Edgewater II	Edgewater, NJ	240	8,605	60,809	818	8,605	61,627	70,232	17,654	52,578	54,071	—	2018

F-50

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Total New Jersey		5,157	$ 216,482	$ 1,040,410	$ 143,014	$ 216,482	$ 1,183,424	$ 1,399,906	$ 482,773	$ 917,133	$ 945,682	$ —
TOTAL METRO NY/NJ		12,236	$ 980,799	$ 3,043,633	$ 361,372	$ 980,799	$ 3,405,005	$ 4,385,804	$ 1,466,275	$ 2,919,529	$ 3,017,253	$ 293,400

MID-ATLANTIC
Washington Metro/Baltimore, MD
Avalon at Foxhall	Washington, D.C.	308	$ 6,848	$ 27,614	$ 28,108	$ 6,848	$ 55,722	$ 62,570	$ 46,433	$ 16,137	$ 16,874	$ —	1982/1994
eaves Tunlaw Gardens	Washington, D.C.	166	16,430	24,602	1,987	16,430	26,589	43,019	12,891	30,128	30,788	—	1944/2013
The Statesman	Washington, D.C.	281	38,140	38,732	4,457	38,140	43,189	81,329	22,254	59,075	60,389	—	1961/2013
eaves Glover Park	Washington, D.C.	120	9,580	28,082	3,215	9,580	31,297	40,877	14,844	26,033	25,405	—	1953/2013
AVA Van Ness	Washington, D.C.	269	22,890	61,701	24,876	22,890	86,577	109,467	36,891	72,576	74,131	—	1978/2013
eaves Washingtonian Center	North Potomac, MD	288	4,047	18,553	11,065	4,047	29,618	33,665	25,216	8,449	8,817	—	1996
eaves Columbia Town Center I	Columbia, MD	392	8,802	35,536	19,715	8,802	55,251	64,053	36,250	27,803	28,175	—	1986/1993
Avalon at Grosvenor Station	North Bethesda, MD	497	29,159	52,993	16,112	29,159	69,105	98,264	48,166	50,098	50,267	—	2004
Avalon at Traville	Rockville, MD	520	14,365	55,398	14,824	14,365	70,222	84,587	50,322	34,265	34,483	—	2004
AVA Wheaton	Wheaton, MD	319	6,494	69,027	857	6,494	69,884	76,378	21,275	55,103	56,841	—	2018
Kanso Twinbrook	Rockville, MD	238	9,151	56,955	63	9,151	57,018	66,169	10,758	55,411	57,613	—	2021
Avalon Hunt Valley	Hunt Valley, MD	332	10,872	62,974	2,135	10,872	65,109	75,981	20,797	55,184	56,371	—	2017
Avalon Laurel (2)	Laurel, MD	344	10,130	61,685	6,603	10,130	68,288	78,418	20,734	57,684	57,552	—	2017

F-51

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Towson	Towson, MD	371	12,906	98,279	188	12,906	98,467	111,373	21,128	90,245	93,746	—	2020
Avalon Fairway Hills - Meadows	Columbia, MD	192	$ 2,323	$ 9,297	$ 11,975	$ 2,323	$ 21,272	$ 23,595	$ 14,500	$ 9,095	$ 7,887	$ —	1987/1996
Avalon Fairway Hills - Woods	Columbia, MD	336	3,958	15,839	17,655	3,958	33,494	37,452	24,440	13,012	13,865	—	1987/1996
Avalon Arundel Crossing II	Linthicum Heights, MD	310	12,208	72,422	1,064	12,208	73,486	85,694	23,319	62,375	64,620	—	2018/2018
Avalon 555 President	Baltimore, MD	400	13,168	121,759	128	13,168	121,887	135,055	26,800	108,255	113,743	—	2021
Kanso Silver Spring	Silver Spring, MD	151	3,471	42,108	2,230	3,471	44,338	47,809	11,654	36,155	37,413	—	2009/2019
Avalon Foundry Row	Owings Mills, MD	437	11,132	86,261	17	11,132	86,278	97,410	15,700	81,710	85,280	—	2022
Avalon Arundel Crossing	Linthicum Heights, MD	384	9,933	111,114	1,049	9,933	112,163	122,096	25,857	96,239	100,962	—	2020/2021
Avalon Russett	Laurel, MD	238	10,200	49,834	7,088	10,200	56,922	67,122	28,100	39,022	40,992	32,200	1999/2013
eaves Fair Lakes	Fairfax, VA	420	6,096	24,400	17,364	6,096	41,764	47,860	35,380	12,480	13,628	—	1989/1996
AVA Ballston	Arlington, VA	344	7,291	29,177	29,588	7,291	58,765	66,056	41,472	24,584	25,016	—	1990
eaves Fairfax City	Fairfax, VA	141	2,152	8,907	6,390	2,152	15,297	17,449	12,093	5,356	5,486	—	1988/1997
Avalon Tysons Corner (2)	Tysons Corner, VA	558	13,851	43,397	36,888	13,851	80,285	94,136	52,008	42,128	33,672	—	1996
Avalon at Arlington Square (2)	Arlington, VA	842	22,041	90,296	47,129	22,041	137,425	159,466	91,204	68,262	68,783	—	2001
eaves Fairfax Towers	Falls Church, VA	415	17,889	74,727	18,802	17,889	93,529	111,418	45,934	65,484	67,222	—	1978/2011
Avalon Mosaic	Fairfax, VA	531	33,490	75,801	4,459	33,490	80,260	113,750	32,580	81,170	83,233	—	2014
Avalon Potomac Yard	Alexandria, VA	323	24,225	84,530	2,693	24,225	87,223	111,448	33,952	77,496	79,784	—	2014/2016

F-52

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Clarendon	Arlington, VA	300	22,573	99,297	9,757	22,573	109,054	131,627	42,511	89,116	91,786	—	2002/2016
Avalon Dunn Loring	Vienna, VA	440	29,377	120,884	2,635	29,377	123,519	152,896	43,450	109,446	113,080	—	2012/2017
eaves Tysons Corner	Vienna, VA	217	16,030	47,572	5,436	16,030	53,008	69,038	26,810	42,228	42,016	—	1980/2013
AVA Ballston Square (2)	Arlington, VA	714	71,640	225,206	58,020	71,640	283,226	354,866	125,435	229,431	237,093	—	1992/2013
Avalon Courthouse Place	Arlington, VA	564	56,550	185,632	15,875	56,550	201,507	258,057	94,158	163,899	169,625	—	1999/2013
Avalon Arlington North	Arlington, VA	228	21,600	59,076	10,737	21,600	69,813	91,413	28,617	62,796	64,568	—	2014
Avalon Reston Landing	Reston, VA	400	26,710	86,934	15,580	26,710	102,514	129,224	54,030	75,194	77,988	—	2000/2013
Avalon Falls Church (2)	Falls Church, VA	384	39,544	66,160	11,704	39,544	77,864	117,408	25,133	92,275	88,414	—	2016
TOTAL MID-ATLANTIC		13,714	$ 677,266	$ 2,522,761	$ 468,468	$ 677,266	$ 2,991,229	$ 3,668,495	$ 1,343,096	$ 2,325,399	$ 2,377,608	$ 32,200

SOUTHEAST FLORIDA
Avalon 850 Boca	Boca Raton, FL	370	$ 21,430	$ 117,895	$ 3,884	$ 21,430	$ 121,779	$ 143,209	$ 39,525	$ 103,684	$ 106,556	$ —	2017/2017
Avalon Doral	Doral, FL	350	23,375	92,966	534	23,375	93,500	116,875	17,521	99,354	102,281	—	2020
Avalon West Palm Beach	West Palm Beach, FL	290	9,597	94,119	5,264	9,597	99,383	108,980	29,903	79,077	82,000	—	2018/2018
Avalon Bonterra	Hialeah, FL	314	16,655	73,977	2,601	16,655	76,578	93,233	23,327	69,906	70,979	—	2018/2019
Avalon Toscana	Margate, FL	240	9,213	51,480	1,646	9,213	53,126	62,339	14,765	47,574	48,957	—	2016/2019
Avalon Fort Lauderdale	Fort Lauderdale, FL	243	20,029	126,505	3,434	20,029	129,939	149,968	24,138	125,830	130,485	—	2020/2021
Avalon Miramar	Miramar, FL	380	17,959	116,276	1,236	17,959	117,512	135,471	24,765	110,706	115,062	—	2018/2021

F-53

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Miramar Park Place	Miramar, FL	650	50,919	245,728	1,559	50,919	247,287	298,206	49,933	248,273	258,233	—	2022/2022
TOTAL SOUTHEAST FLORIDA		2,837	$ 169,177	$ 918,946	$ 20,158	$ 169,177	$ 939,104	$ 1,108,281	$ 223,877	$ 884,404	$ 914,553	$ —

DENVER,CO
Avalon Denver West	Lakewood, CO	252	$ 8,047	$ 69,373	$ 3,445	$ 8,047	$ 72,818	$ 80,865	$ 24,492	$ 56,373	$ 57,900	$ —	2016/2017
Avalon Castle Rock at the Meadows	Castle Rock, CO	240	8,527	65,325	1,194	8,527	66,519	75,046	20,539	54,507	56,545	—	2018/2018
Avalon Red Rocks	Littleton, CO	256	4,461	71,477	1,588	4,461	73,065	77,526	22,528	54,998	56,268	—	2018/2018
Avalon Southlands	Aurora, CO	338	5,101	86,653	1,783	5,101	88,436	93,537	26,548	66,989	68,668	—	2018/2019
AVA RiNo	Denver, CO	246	15,152	71,662	604	15,152	72,266	87,418	11,173	76,245	78,529	—	2022
Avalon Flatirons	Lafayette, CO	207	7,390	88,438	601	7,390	89,039	96,429	15,175	81,254	84,673	—	2020/2022
TOTAL DENVER, CO		1,539	$ 48,678	$ 452,928	$ 9,215	$ 48,678	$ 462,143	$ 510,821	$ 120,455	$ 390,366	$ 402,583	$ —

PACIFIC NORTHWEST
Seattle, WA
Avalon at Bear Creek	Redmond, WA	264	$ 6,786	$ 27,641	$ 12,077	$ 6,786	$ 39,718	$ 46,504	$ 33,232	$ 13,272	$ 13,295	$ —	1998/1998
Avalon Bellevue	Bellevue, WA	201	6,664	24,119	8,723	6,664	32,842	39,506	25,971	13,535	14,705	—	2001
eaves RockMeadow (2)	Bothell, WA	206	4,777	19,765	10,013	4,777	29,778	34,555	21,983	12,572	11,265	—	2000/2000
Avalon ParcSquare	Redmond, WA	124	3,789	15,139	7,297	3,789	22,436	26,225	17,114	9,111	8,682	—	2000/2000

F-54

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Meydenbauer	Bellevue, WA	368	12,697	77,450	13,006	12,697	90,456	103,153	52,718	50,435	50,802	—	2008
Avalon Towers Bellevue (3)	Bellevue, WA	397	—	123,029	11,008	—	134,037	134,037	68,905	65,132	68,324	—	2011
AVA Queen Anne	Seattle, WA	203	12,081	41,618	2,603	12,081	44,221	56,302	21,424	34,878	36,135	—	2012
Avalon Alderwood I	Lynnwood, WA	367	12,294	55,627	2,284	12,294	57,911	70,205	22,464	47,741	48,933	—	2015
AVA Capitol Hill	Seattle, WA	249	20,613	59,986	2,220	20,613	62,206	82,819	22,390	60,429	62,049	—	2016
Avalon Esterra Park	Redmond, WA	482	23,178	112,986	2,660	23,178	115,646	138,824	38,203	100,621	103,858	—	2017
Avalon Alderwood II	Lynnwood, WA	124	5,072	21,418	505	5,072	21,923	26,995	7,111	19,884	20,377	—	2016
Avalon Newcastle Commons I	Newcastle, WA	378	9,649	111,600	3,061	9,649	114,661	124,310	34,127	90,183	93,082	—	2017
Avalon Belltown Towers	Seattle, WA	274	24,638	121,064	1,509	24,638	122,573	147,211	29,924	117,287	121,084	—	2019
AVA Esterra Park	Redmond, WA	323	16,405	74,568	583	16,405	75,151	91,556	19,321	72,235	74,188	—	2019
Avalon Newcastle Commons II	Newcastle, WA	293	6,982	99,831	687	6,982	100,518	107,500	18,374	89,126	92,725	—	2021
Avalon North Creek	Bothell, WA	316	13,498	69,013	213	13,498	69,226	82,724	16,828	65,896	68,008	—	2020
eaves Redmond Campus	Redmond, WA	374	15,665	84,852	29,514	15,665	114,366	130,031	54,498	75,533	79,094	—	1991/2013
TOTAL PACIFIC NORTHWEST		4,943	$ 194,788	$ 1,139,706	$ 107,963	$ 194,788	$ 1,247,669	$ 1,442,457	$ 504,587	$ 937,870	$ 966,606	$ —

NORTHERN CALIFORNIA
San Jose, CA

F-55

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Campbell	Campbell, CA	348	$ 11,830	$ 47,825	$ 18,028	$ 11,830	$ 65,853	$ 77,683	$ 53,204	$ 24,479	$ 25,118	$ —	1995
eaves San Jose	San Jose, CA	442	12,920	53,047	21,985	12,920	75,032	87,952	56,087	31,865	33,399	—	1985/1996
Avalon on the Alameda	San Jose, CA	307	6,119	50,214	16,758	6,119	66,972	73,091	53,671	19,420	20,138	—	1999
Avalon Silicon Valley	Sunnyvale, CA	714	20,713	99,573	43,293	20,713	142,866	163,579	110,891	52,688	56,039	—	1998
Avalon Mountain View	Mountain View, CA	248	9,755	39,387	16,729	9,755	56,116	65,871	45,899	19,972	18,884	—	1986
eaves Creekside	Mountain View, CA	300	$ 6,546	$ 26,263	$ 24,748	$ 6,546	$ 51,011	$ 57,557	$ 39,538	$ 18,019	$ 18,512	$ —	1962/1997
Avalon at Cahill Park	San Jose, CA	218	4,765	47,600	6,393	4,765	53,993	58,758	41,649	17,109	18,071	—	2002
Avalon Towers on the Peninsula	Mountain View, CA	211	9,560	56,136	17,112	9,560	73,248	82,808	51,940	30,868	33,201	—	2002
Avalon Morrison Park	San Jose, CA	250	13,837	64,521	3,858	13,837	68,379	82,216	27,704	54,512	55,227	—	2014
Avalon Willow Glen	San Jose, CA	412	46,060	85,637	6,543	46,060	92,180	138,240	48,566	89,674	92,429	—	2002/2013
eaves West Valley	San Jose, CA	873	90,890	138,555	14,391	90,890	152,946	243,836	77,275	166,561	169,311	—	1970/2013
eaves Mountain View at Middlefield	Mountain View, CA	404	64,070	73,438	16,490	64,070	89,928	153,998	50,141	103,857	106,151	—	1969/2013
Total San Jose, CA		4,727	$ 297,065	$ 782,196	$ 206,328	$ 297,065	$ 988,524	$ 1,285,589	$ 656,565	$ 629,024	$ 646,480	$ —

East Bay, CA
Avalon Fremont (2)	Fremont, CA	308	$ 10,746	$ 43,399	$ 34,107	$ 10,746	$ 77,506	$ 88,252	$ 51,668	$ 36,584	$ 37,059	$ —	1992/1994
eaves Dublin (2)	Dublin, CA	204	5,276	19,642	28,080	5,276	47,722	52,998	27,150	25,848	26,621	—	1989/1997

F-56

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
eaves Pleasanton (2)	Pleasanton, CA	460	11,610	46,552	57,091	11,610	103,643	115,253	62,462	52,791	53,818	—	1988/1994
eaves Union City	Union City, CA	208	4,249	16,820	7,213	4,249	24,033	28,282	20,370	7,912	7,717	—	1973/1996
eaves Fremont	Fremont, CA	237	6,581	26,583	14,454	6,581	41,037	47,618	33,744	13,874	14,359	—	1985/1994
Avalon Union City	Union City, CA	439	14,732	104,024	9,215	14,732	113,239	127,971	62,626	65,345	68,623	—	2009
Avalon Walnut Creek (3)	Walnut Creek, CA	422	—	148,846	9,934	—	158,780	158,780	83,240	75,540	79,649	4,868	2010
Avalon Dublin Station	Dublin, CA	253	7,772	72,142	4,072	7,772	76,214	83,986	30,543	53,443	54,541	—	2014
Avalon Dublin Station II	Dublin, CA	252	7,762	76,587	2,997	7,762	79,584	87,346	26,558	60,788	62,213	—	2016
Avalon Public Market (1)	Emeryville, CA	289	27,394	145,898	689	27,394	146,587	173,981	33,019	140,962	145,325	—	2020
Avalon Walnut Creek II (3)	Walnut Creek, CA	200	—	112,768	795	—	113,563	113,563	23,040	90,523	94,760	—	2020
eaves Walnut Creek	Walnut Creek, CA	510	30,320	86,475	16,471	30,320	102,946	133,266	48,784	84,482	87,164	—	1987/2013
Avalon Walnut Ridge I	Walnut Creek, CA	106	9,860	20,630	5,605	9,860	26,235	36,095	12,402	23,693	24,541	—	2000/2013
Avalon Walnut Ridge II	Walnut Creek, CA	360	27,190	60,209	11,893	27,190	72,102	99,292	35,050	64,242	66,282	—	1989/2013
Total East Bay, CA		4,248	$ 163,492	$ 980,575	$ 202,616	$ 163,492	$ 1,183,191	$ 1,346,683	$ 550,656	$ 796,027	$ 822,672	$ 4,868

San Francisco, CA
AVA Nob Hill	San Francisco, CA	185	$ 5,403	$ 21,567	$ 12,658	$ 5,403	$ 34,225	$ 39,628	$ 27,562	$ 12,066	$ 13,470	$ —	1990/1995

F-57

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
eaves Foster City	Foster City, CA	290	7,852	31,445	19,085	7,852	50,530	58,382	39,994	18,388	19,045	—	1973/1994
eaves Pacifica	Pacifica, CA	220	6,125	24,792	8,329	6,125	33,121	39,246	28,057	11,189	10,359	—	1971/1995
Avalon at Mission Bay I	San Francisco, CA	250	14,029	78,452	13,328	14,029	91,780	105,809	70,083	35,726	37,589	—	2003
Avalon at Mission Bay III	San Francisco, CA	261	28,687	119,156	3,888	28,687	123,044	151,731	67,544	84,187	86,627	—	2009
Avalon Ocean Avenue	San Francisco, CA	173	5,544	50,906	4,559	5,544	55,465	61,009	25,972	35,037	36,227	—	2012
AVA 55 Ninth	San Francisco, CA	273	20,267	97,321	2,232	20,267	99,553	119,820	40,655	79,165	82,153	—	2014
Avalon Hayes Valley	San Francisco, CA	182	12,595	81,228	1,754	12,595	82,982	95,577	30,910	64,667	67,324	—	2015
Avalon Dogpatch	San Francisco, CA	326	23,523	180,698	1,300	23,523	181,998	205,521	52,136	153,385	158,894	—	2018
Avalon San Bruno I	San Bruno, CA	300	40,780	71,352	8,084	40,780	79,436	120,216	40,824	79,392	81,835	52,150	2004/2013
Avalon San Bruno II	San Bruno, CA	185	$ 23,787	$ 46,609	$ 3,483	$ 23,787	$ 50,092	$ 73,879	$ 23,186	$ 50,693	$ 52,125	$ —	2007/2013
Avalon San Bruno III	San Bruno, CA	187	33,303	65,255	2,321	33,303	67,576	100,879	31,138	69,741	71,884	51,000	2010/2013
Total San Francisco, CA		2,832	$ 221,895	$ 868,781	$ 81,021	$ 221,895	$ 949,802	$ 1,171,697	$ 478,061	$ 693,636	$ 717,532	$ 103,150
TOTAL NORTHERN CALIFORNIA		11,807	$ 682,452	$ 2,631,552	$ 489,965	$ 682,452	$ 3,121,517	$ 3,803,969	$ 1,685,282	$ 2,118,687	$ 2,186,684	$ 108,018

SOUTHERN CALIFORNIA
Los Angeles, CA

F-58

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
AVA Burbank (2)	Burbank, CA	750	$ 22,483	$ 28,078	$ 62,627	$ 22,483	$ 90,705	$ 113,188	$ 65,654	$ 47,534	$ 48,073	$ —	1961/1997
Avalon Woodland Hills	Woodland Hills, CA	663	23,828	40,329	92,876	23,828	133,205	157,033	78,669	78,364	80,697	—	1989/1997
eaves Warner Center (2)	Woodland Hills, CA	228	7,045	12,974	21,385	7,045	34,359	41,404	24,694	16,710	14,823	—	1979/1998
Avalon Glendale (3)	Glendale, CA	223	—	42,564	4,928	—	47,492	47,492	35,413	12,079	13,423	—	2003
Avalon Burbank	Burbank, CA	403	14,053	56,814	34,670	14,053	91,484	105,537	62,954	42,583	44,288	—	1988/2002
Avalon Camarillo	Camarillo, CA	249	8,446	40,239	6,194	8,446	46,433	54,879	30,747	24,132	25,524	—	2006
Avalon Wilshire	Los Angeles, CA	125	5,459	41,174	8,516	5,459	49,690	55,149	32,315	22,834	24,271	—	2007
Avalon Encino	Encino, CA	132	12,789	49,062	5,452	12,789	54,514	67,303	31,315	35,988	38,011	—	2008
Avalon Warner Place	Canoga Park, CA	210	7,920	44,823	4,494	7,920	49,317	57,237	29,284	27,953	29,533	—	2008
AVA Little Tokyo	Los Angeles, CA	280	14,734	93,977	3,338	14,734	97,315	112,049	37,848	74,201	77,050	—	2015
eaves Phillips Ranch (2)	Pomona, CA	503	9,796	41,675	21,196	9,796	62,871	72,667	30,741	41,926	42,283	—	1989/2011
eaves San Dimas	San Dimas, CA	102	1,916	7,803	3,586	1,916	11,389	13,305	5,967	7,338	7,532	—	1978/2011
eaves San Dimas Canyon	San Dimas, CA	156	2,953	12,369	3,515	2,953	15,884	18,837	8,122	10,715	10,705	—	1981/2011
AVA Pasadena	Pasadena, CA	84	8,400	11,522	7,429	8,400	18,951	27,351	8,547	18,804	19,037	—	1973/2012
eaves Cerritos	Artesia, CA	151	8,305	21,195	3,629	8,305	24,824	33,129	11,407	21,722	22,361	—	1973/2012
Avalon Playa Vista	Los Angeles, CA	309	30,900	71,944	11,406	30,900	83,350	114,250	41,232	73,018	75,275	—	2006/2012
Avalon San Dimas	San Dimas, CA	162	9,141	30,726	4,395	9,141	35,121	44,262	13,594	30,668	31,719	—	2014
Avalon Glendora	Glendora, CA	281	18,311	64,303	1,613	18,311	65,916	84,227	23,741	60,486	62,586	—	2016

F-59

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon West Hollywood	West Hollywood, CA	294	35,214	118,926	3,619	35,214	122,545	157,759	38,084	119,675	122,819	—	2017
Avalon Mission Oaks	Camarillo, CA	160	9,600	38,666	2,874	9,600	41,540	51,140	17,388	33,752	34,471	—	2014
Avalon Chino Hills	Chino Hills, CA	331	16,617	79,829	2,986	16,617	82,815	99,432	25,542	73,890	75,465	—	2017
AVA Hollywood at La Pietra Place	Los Angeles, CA	695	99,309	272,546	3,164	99,309	275,710	375,019	58,502	316,517	325,874	—	2021
Avalon Cerritos	Cerritos, CA	132	8,869	52,025	931	8,869	52,956	61,825	14,223	47,602	49,111	30,250	2017/2019
Avalon Monrovia	Monrovia, CA	154	12,125	56,202	579	12,125	56,781	68,906	10,212	58,694	60,783	—	2021
Avalon Simi Valley	Simi Valley, CA	500	42,020	77,521	13,681	42,020	91,202	133,222	44,625	88,597	89,709	—	2007/2013
AVA Studio City II	Studio City, CA	101	4,626	23,840	7,731	4,626	31,571	36,197	14,611	21,586	22,327	—	1991/2013
Avalon Studio City	Studio City, CA	276	15,756	81,318	17,699	15,756	99,017	114,773	48,279	66,494	69,461	—	2002/2013
Avalon Calabasas	Calabasas, CA	600	42,720	112,911	29,041	42,720	141,952	184,672	81,346	103,326	106,785	—	1988/2013
Avalon Oak Creek	Agoura Hills, CA	338	43,540	83,625	14,112	43,540	97,737	141,277	54,897	86,380	88,053	—	2004/2013
Avalon Santa Monica on Main	Santa Monica, CA	133	32,000	63,612	14,662	32,000	78,274	110,274	35,852	74,422	76,991	—	2007/2013
eaves Old Town Pasadena	Pasadena, CA	96	$ 9,110	$ 16,316	$ 7,084	$ 9,110	$ 23,400	$ 32,510	$ 10,879	$ 21,631	$ 22,089	$ —	1972/2013
eaves Thousand Oaks	Thousand Oaks, CA	158	13,950	21,574	7,193	13,950	28,767	42,717	16,925	25,792	26,085	—	1992/2013
eaves Los Feliz	Los Angeles, CA	263	18,940	46,201	14,359	18,940	60,560	79,500	28,895	50,605	51,172	41,400	1989/2013
AVA Toluca Hills (2)	Los Angeles, CA	1,151	86,450	170,241	107,790	86,450	278,031	364,481	110,754	253,727	249,772	—	1973/2013
eaves Woodland Hills	Woodland Hills, CA	894	68,940	96,808	27,583	68,940	124,391	193,331	66,383	126,948	129,746	111,500	1971/2013

F-60

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Thousand Oaks Plaza	Thousand Oaks, CA	148	12,810	24,025	6,251	12,810	30,276	43,086	14,971	28,115	27,550	—	2002/2013
Avalon Pasadena	Pasadena, CA	120	10,240	33,038	6,287	10,240	39,325	49,565	17,946	31,619	32,409	—	2004/2013
AVA Studio City I	Studio City, CA	450	17,658	94,094	36,414	17,658	130,508	148,166	58,823	89,343	92,791	—	1987/2013
Total Los Angeles, CA		12,005	$ 806,973	$ 2,274,889	$ 625,289	$ 806,973	$ 2,900,178	$ 3,707,151	$ 1,341,381	$ 2,365,770	$ 2,420,654	$ 183,150

Orange County, CA
AVA Newport	Costa Mesa, CA	145	$ 1,975	$ 3,814	$ 12,822	$ 1,975	$ 16,636	$ 18,611	$ 11,306	$ 7,305	$ 7,103	$ —	1956/1996
eaves Mission Viejo	Mission Viejo, CA	166	2,517	9,241	7,910	2,517	17,151	19,668	13,954	5,714	5,713	—	1984/1996
eaves South Coast	Costa Mesa, CA	258	4,709	16,063	17,148	4,709	33,211	37,920	25,669	12,251	12,099	—	1973/1996
eaves Santa Margarita (2)	Rancho Santa Margarita, CA	302	4,607	16,895	19,343	4,607	36,238	40,845	25,979	14,866	13,001	—	1990/1997
eaves Huntington Beach	Huntington Beach, CA	304	4,871	19,729	14,702	4,871	34,431	39,302	29,914	9,388	9,785	—	1971/1997
Avalon Irvine I	Irvine, CA	279	9,911	67,504	10,140	9,911	77,644	87,555	42,634	44,921	47,455	—	2010
Avalon Irvine II	Irvine, CA	179	4,358	40,890	2,606	4,358	43,496	47,854	19,289	28,565	29,404	—	2013
eaves Lake Forest	Lake Forest, CA	225	5,199	21,117	9,385	5,199	30,502	35,701	16,093	19,608	20,489	—	1975/2011
Avalon Baker Ranch	Lake Forest, CA	430	31,689	98,004	2,834	31,689	100,838	132,527	37,364	95,163	97,389	—	2015
Avalon Irvine III	Irvine, CA	156	11,607	43,973	1,012	11,607	44,985	56,592	15,447	41,145	42,401	—	2016
Avalon Brea Place	Brea, CA	653	72,925	220,151	117	72,925	220,268	293,193	34,402	258,791	267,340	—	2022
eaves Seal Beach	Seal Beach, CA	549	46,790	104,129	34,789	46,790	138,918	185,708	61,413	124,295	128,808	—	1971/2013

F-61

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Huntington Beach	Huntington Beach, CA	378	13,055	105,981	2,040	13,055	108,021	121,076	35,453	85,623	88,709	—	2017
Total Orange County, CA		4,024	$ 214,213	$ 767,491	$ 134,848	$ 214,213	$ 902,339	$ 1,116,552	$ 368,917	$ 747,635	$ 769,696	$ —

San Diego, CA
AVA Pacific Beach	San Diego, CA	564	$ 9,922	$ 40,580	$ 45,215	$ 9,922	$ 85,795	$ 95,717	$ 65,063	$ 30,654	$ 33,574	$ —	1969/1997
eaves Mission Ridge	San Diego, CA	200	2,710	10,924	17,891	2,710	28,815	31,525	23,546	7,979	8,435	—	1960/1997
eaves San Marcos	San Marcos, CA	186	3,277	13,385	10,869	3,277	24,254	27,531	10,666	16,865	17,013	—	1988/2011
eaves Rancho Penasquitos	San Diego, CA	250	6,692	27,143	14,558	6,692	41,701	48,393	22,125	26,268	27,835	—	1986/2011
Avalon Vista	Vista, CA	221	12,689	43,328	2,003	12,689	45,331	58,020	17,149	40,871	41,783	—	2015
eaves La Mesa	La Mesa, CA	168	9,490	29,412	5,348	9,490	34,760	44,250	19,709	24,541	25,900	—	1989/2013
Avalon La Jolla Colony	San Diego, CA	180	16,760	29,234	11,600	16,760	40,834	57,594	20,595	36,999	38,110	—	1987/2013
Total San Diego, CA		1,769	$ 61,540	$ 194,006	$ 107,484	$ 61,540	$ 301,490	$ 363,030	$ 178,853	$ 184,177	$ 192,650	$ —
TOTAL SOUTHERN CALIFORNIA		17,798	$ 1,082,726	$ 3,236,386	$ 867,621	$ 1,082,726	$ 4,104,007	$ 5,186,733	$ 1,889,151	$ 3,297,582	$ 3,383,000	$ 183,150

OTHER EXPANSION REGIONS
North Carolina
Avalon South End	Charlotte, NC	265	$ 13,723	$ 90,017	$ 4,694	$ 13,723	$ 94,711	$ 108,434	$ 19,681	$ 88,753	$ 92,498	$ —	2020/2021
AVA South End	Charlotte, NC	164	9,367	45,277	4,812	9,367	50,089	59,456	9,002	50,454	50,284	—	2013/2021

F-62

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Hawk (1)	Charlotte, NC	71	2,564	44,255	310	2,564	44,565	47,129	7,167	39,962	41,379	—	2021/2021
Avalon Highland Creek	Charlotte, NC	260	4,586	73,014	875	4,586	73,889	78,475	12,516	65,959	68,671	—	2022/2022
Avalon Mooresville	Mooresville, NC	203	3,770	48,862	501	3,770	49,363	53,133	5,470	47,663	49,488	—	2017/2023
Total North Carolina		963	$ 34,010	$ 301,425	$ 11,192	$ 34,010	$ 312,617	$ 346,627	$ 53,836	$ 292,791	$ 302,320	$ —

Texas
Avalon Lakeside	Flower Mound, TX	425	$ 15,073	$ 102,992	$ 1,265	$ 15,073	$ 104,257	$ 119,330	$ 23,530	$ 95,800	$ 99,577	$ —	2015/2021
Avalon Addison	Addison, TX	196	11,174	59,132	1,260	11,174	60,392	71,566	9,914	61,652	63,526	—	1995/2022
Avalon Frisco at Main	Frisco, TX	360	11,919	71,978	1,597	11,919	73,575	85,494	10,470	75,024	77,462	—	2013/2023
Avalon West Plano	Carrollton, TX	568	14,100	123,617	1,607	14,100	125,224	139,324	19,181	120,143	124,700	61,384	2016/2023
Total Texas		1,549	$ 52,266	$ 357,719	$ 5,729	$ 52,266	$ 363,448	$ 415,714	$ 63,095	$ 352,619	$ 365,265	$ 61,384
TOTAL OTHER EXPANSION REGIONS		2,512	$ 86,276	$ 659,144	$ 16,921	$ 86,276	$ 676,065	$ 762,341	$ 116,931	$ 645,410	$ 667,585	$ 61,384

TOTAL SAME STORE		76,921	$ 4,323,013	$ 16,712,630	$ 2,826,347	$ 4,323,013	$ 19,538,977	$ 23,861,990	$ 8,445,176	$ 15,416,814	$ 15,880,982	$ 723,152

F-63

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
OTHER STABILIZED
Avalon Sunset Towers (4)	San Francisco, CA	243	$ 3,561	$ 21,313	$ 18,081	$ 3,561	$ 39,394	$ 42,955	$ 30,847	$ 12,108	$ 13,002	$ —	1961/1996
Avalon West Dublin	Dublin, CA	499	39,070	223,281	4	39,070	223,285	262,355	14,985	247,370	253,859	—	2024
AVA Balboa Park	San Diego, CA	100	10,537	40,706	1,160	10,537	41,866	52,403	2,608	49,795	50,313	—	2015/2024
Avalon Cherry Hills	Englewood, CO	306	9,798	85,404	4,209	9,798	89,613	99,411	7,632	91,779	91,855	—	2015/2024
Avalon Lowry	Denver, CO	347	15,382	121,829	160	15,382	121,989	137,371	8,757	128,614	136,211	—	2019/2024
Avalon The Albemarle (4)	Washington, D.C.	234	25,140	55,945	9,668	25,140	65,613	90,753	32,378	58,375	58,681	—	1966/2013
Avalon Merrick Park	Miami, FL	254	23,779	79,305	—	23,779	79,305	103,084	7,922	95,162	98,105	—	2023
Avalon Coconut Creek	Coconut Creek, FL	270	17,551	81,659	112	17,551	81,771	99,322	3,224	96,098	—	—	2014/2025
Avalon Perimeter Park	Morrisville, NC	262	11,533	55,229	2,597	11,533	57,826	69,359	5,047	64,312	64,486	—	2018/2024
Avalon Townhome Collection Brier Creek	Durham, NC	93	4,564	32,225	—	4,564	32,225	36,789	328	36,461	—	—	2020/2025
Avalon at Palisades	Charlotte, NC	274	5,881	66,081	62	5,881	66,143	72,024	2,606	69,418	—	—	2020/2025
Avalon Princeton Circle	Princeton, NJ	221	11,705	75,465	364	11,705	75,829	87,534	6,898	80,636	83,596	—	2023
Avalon White Plains (4)	White Plains, NY	407	15,391	137,312	7,291	15,391	144,603	159,994	80,216	79,778	82,287	—	2009
Avalon Amityville	Amityville, NY	338	22,466	113,145	8	22,466	113,153	135,619	8,857	126,762	131,423	—	2024
Kanso Milford	Milford, MA	162	14,361	48,955	6	14,361	48,961	63,322	2,949	60,373	60,710	—	2024
Avalon at Pier 121	Lewisville, TX	300	8,418	53,793	1,456	8,418	55,249	63,667	5,611	58,056	59,372	—	2014/2024
Avalon Townhome	Bee Cave, TX	126	7,955	41,352	365	7,955	41,717	49,672	2,608	47,064	48,748	—	2022/2024

F-64

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Collection Bee Cave
Avalon Hill Country	Austin, TX	554	19,430	117,062	409	19,430	117,471	136,901	10,478	126,423	—	—	2015/2025
Avalon Wolf Ranch	Georgetown, TX	303	6,891	44,462	545	6,891	45,007	51,898	3,123	48,775	—	—	2017/2025
eaves Twin Creeks	Allen, TX	216	9,762	35,812	208	9,762	36,020	45,782	2,176	43,606	—	—	2025
Avalon Benbrook	Benbrook, TX	301	3,623	57,314	96	3,623	57,410	61,033	3,733	57,300	—	—	2025
Avalon Castle Hills	Lewisville, TX	276	7,522	59,007	396	7,522	59,403	66,925	3,369	63,556	—	—	2025
Avalon Frisco	Frisco, TX	330	6,559	74,620	127	6,559	74,747	81,306	4,699	76,607	—	—	2025
Avalon Frisco North	Frisco, TX	349	12,118	77,253	155	12,118	77,408	89,526	5,356	84,170	—	—	2025
eaves North Dallas	Dallas, TX	372	16,558	60,334	166	16,558	60,500	77,058	4,908	72,150	—	—	2025
Avalon Bothell Commons	Bothell, WA	467	26,699	206,444	156	26,699	206,600	233,299	14,874	218,425	225,208	—	2024
Avalon Redmond Campus	Redmond, WA	214	7,007	81,817	104	7,007	81,921	88,928	5,657	83,271	85,846	—	2024
eaves Redmond Campus II	Redmond, WA	40	10,951	4,949	—	10,951	4,949	15,900	60	15,840	—	—	1987/2025
Avalon Alderwood Place	Lynnwood, WA	328	12,524	109,227	7	12,524	109,234	121,758	2,261	119,497	—	—	2022/2025
The Park Loggia Commercial	New York, NY	N/A	77,393	76,410	12,247	77,393	88,657	166,050	19,629	146,421	148,167	—	2019
TOTAL OTHER STABILIZED		8,186	$ 464,129	$ 2,337,710	$ 60,159	$ 464,129	$ 2,397,869	$ 2,861,998	$ 303,796	$ 2,558,202	$ 1,691,869	$ —

TOTAL CURRENT COMMUNITIES (5)		85,107	$ 4,787,142	$ 19,050,340	$ 2,886,506	$ 4,787,142	$ 21,936,846	$ 26,723,988	$ 8,748,972	$ 17,975,016	$ 17,572,851	$ 723,152
DEVELOPMENT (5)

F-65

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Pleasanton	Pleasanton, CA	362	$ 6,202	$ 118,419	$ 2	$ 6,202	$ 118,421	$ 124,623	$ 395	$ 124,228	$ 20,275	$ —	N/A
Avalon Mission Valley (3)	San Diego, CA	621	—	41,756	113	—	41,869	41,869	—	41,869	—	—	N/A
Kanso Hillcrest	San Diego, CA	182	—	40,718	56	—	40,774	40,774	—	40,774	15,807	—	N/A
Avalon San Ramon	San Ramon, CA	456	—	37,557	—	—	37,557	37,557	—	37,557	—	—	N/A
Avalon Westminster Promenade	Westminster, CO	312	6,291	105,184	—	6,291	105,184	111,475	5,255	106,220	112,719	—	2024
Avalon Governor's Park	Denver, CO	304	10,302	126,946	—	10,302	126,946	137,248	5,523	131,725	134,764	—	2024
Avalon Parker	Parker, CO	312	—	56,148	—	—	56,148	56,148	—	56,148	—	—	N/A
Avalon South Miami	South Miami, FL	290	24,472	144,735	—	24,472	144,735	169,207	1,041	168,166	126,402	—	2025
Avalon North Palm Beach	Lake Park, FL	279	1,241	50,037	—	1,241	50,037	51,278	358	50,920	—	—	N/A
Avalon Kendall	Kendall, FL	224	—	38,324	—	—	38,324	38,324	—	38,324	—	—	N/A
Avalon Quincy Adams	Quincy, MA	288	—	91,394	95	—	91,489	91,489	—	91,489	38,834	—	N/A
Avalon Billerica	Billerica, MA	200	—	16,789	—	—	16,789	16,789	—	16,789	—	—	N/A
Avalon Annapolis	Annapolis, MD	508	47,599	141,862	12	47,599	141,874	189,473	4,722	184,751	173,284	—	2025
Avalon Hunt Valley West	Hunt Valley, MD	322	10,021	86,721	—	10,021	86,721	96,742	1,426	95,316	79,435	—	2025
AVA Brewer's Hill	Baltimore, MD	418	—	44,508	—	—	44,508	44,508	—	44,508	23,182	—	N/A
Avalon Townhome Collection Arundel Mills	Hanover, MD	90	—	6,537	—	—	6,537	6,537	—	6,537	—	—	N/A
Avalon Durham	Durham, NC	336	17,331	100,922	—	17,331	100,922	118,253	5,472	112,781	115,657	—	2024

F-66

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances	Year of Completion / Acquisition
Avalon Lake Norman	Mooresville, NC	345	5,575	93,096	—	5,575	93,096	98,671	912	97,759	59,909	—	N/A
Avalon Carmel	Charlotte, NC	360	—	88,292	—	—	88,292	88,292	—	88,292	29,299	—	N/A
Avalon Oakridge I	Durham, NC	459	—	57,271	—	—	57,271	57,271	—	57,271	25,229	—	N/A
Avalon Brier Creek	Durham, NC	400	—	33,258	—	—	33,258	33,258	—	33,258	—	—	N/A
Avalon Southpoint	Durham, NC	394	—	16,385	—	—	16,385	16,385	—	16,385	—	—	N/A
Avalon W Squared at Princeton Junction	West Windsor, NJ	535	7,336	188,361	—	7,336	188,361	195,697	525	195,172	118,103	—	N/A
Avalon Princeton on Harrison	Princeton, NJ	200	8,891	68,871	—	8,891	68,871	77,762	2,078	75,684	68,584	—	2025
Avalon Wayne	Wayne, NJ	473	3,602	147,252	—	3,602	147,252	150,854	371	150,483	73,596	—	N/A
Avalon Parsippany	Parsippany, NJ	410	7,827	130,370	—	7,827	130,370	138,197	296	137,901	61,470	—	N/A
Avalon at Becker Farm	Roseland, NJ	533	2,389	148,361	—	2,389	148,361	150,750	58	150,692	65,048	—	N/A
Kanso Parsippany	Parsippany, NJ	280	—	30,552	—	—	30,552	30,552	—	30,552	—	—	N/A
Avalon Montville	Pine Brook, NJ	349	8,471	117,315	1	8,471	117,316	125,787	8,371	117,416	121,183	—	2024
Avalon Plano	Plano, TX	155	—	19,949	—	—	19,949	19,949	—	19,949	14,502	—	N/A
Avalon Tech Ridge I	Austin, TX	544	—	92,397	—	—	92,397	92,397	—	92,397	29,142	—	N/A
Avalon Northwest Hills	Austin, TX	252	—	16,368	—	—	16,368	16,368	—	16,368	—	—	N/A
TOTAL DEVELOPMENT		11,193	$ 167,550	$ 2,496,655	$ 279	$ 167,550	$ 2,496,934	$ 2,664,484	$ 36,803	$ 2,627,681	$ 1,506,424	$ —

Land Held for Development		N/A	$ 123,751	$ 8,663	$ —	$ 123,751	$ 8,663	$ 132,414	$ —	$ 132,414	$ 151,922	$ —

F-67

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)


			2025								2024	2025
			Initial Cost			Total Cost
Community	City and state	# of homes	Land and Improvements	Building / Construction in Progress & Improvements	Costs Subsequent to Acquisition / Construction	Land and Improvements	Building / Construction in Progress & Improvements	Total	Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Total Cost, Net of Accumulated Depreciation	Encumbrances		Year of Completion / Acquisition
Corporate Overhead		N/A	49,968	11,414	53,498	49,968	64,912	114,880	43,749	71,131	80,458	7,375,000
2025 Disposed Communities		N/A	—	—	—	—	—	—	—	—	455,407	—
TOTAL		96,300	$ 5,128,411	$ 21,567,072	$ 2,940,283	$ 5,128,411	$ 24,507,355	$ 29,635,766	$ 8,829,524	$ 20,806,242	$ 19,767,062	$ 8,098,152	(6)

_________________________________

(1)

Some or all of the land or an associated parking structure for this community is subject to a finance lease.

(2)

This community was under redevelopment for some or all of 2025, with the redevelopment activities not expected to materially impact community operations, and therefore this community is included in the Same Store portfolio and not classified as a Redevelopment Community.

(3)

Some or all of the land for this community is subject to an operating lease.

(4)

As of December 31, 2025, this community qualified as held for sale.

(5)

Current and Development Communities excludes Unconsolidated Communities and Unconsolidated Development Communities.

(6)

Balance outstanding represents total amount due at maturity, and excludes deferred financing costs and debt discount associated with the unsecured and secured notes of $45,620 and $13,588, respectively.

F-68

AVALONBAY COMMUNITIES, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2025

(Dollars in thousands)

Amounts include real estate assets held for sale.

The aggregate cost of total real estate for federal income tax purposes was approximately $28,049,554 at December 31, 2025.

The changes in total real estate assets for the years ended December 31, 2025, 2024 and 2023 are as follows:


	December 31, 2025	December 31, 2024	December 31, 2023
Balance, beginning of period	$ 27,949,782	$ 26,864,833	$ 25,871,363
Acquisitions, construction costs and improvements (1)	2,385,984	1,602,790	1,272,558
Dispositions, including casualty losses, and other activity	(700,000)	(517,841)	(279,088)
Balance, end of period	$ 29,635,766	$ 27,949,782	$ 26,864,833

_________________________________

(1) 2023 amounts have been adjusted to reflect the reclassification of software development costs from Furniture, fixtures and equipment to Prepaid expenses and other assets on the Consolidated Balance Sheet.

The changes in accumulated depreciation for the years ended December 31, 2025, 2024 and 2023, are as follows:


	December 31, 2025	December 31, 2024	December 31, 2023
Balance, beginning of period	$ 8,182,720	$ 7,521,962	$ 6,878,556
Depreciation (1)	913,376	846,853	781,313
Dispositions, including casualty losses, and other activity	(266,572)	(186,095)	(137,907)
Balance, end of period	$ 8,829,524	$ 8,182,720	$ 7,521,962

_________________________________

F-69

EX-99.3 5 eqr-ex99_3.htm EX-99.3 EX-99.3

Exhibit 99.3

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)


	March 31, 2026	December 31, 2025
	(unaudited)
ASSETS
Real estate:
Land and improvements	$ 4,989,148	$ 4,960,568
Buildings and improvements	21,444,491	21,252,137
Furniture, fixtures and equipment	1,596,077	1,546,813
	28,029,716	27,759,518
Less accumulated depreciation	(8,914,545)	(8,686,084)
Net operating real estate	19,115,171	19,073,434
Construction in progress, including land	1,575,669	1,458,795
Land held for development	135,134	123,751
Real estate assets held for sale, net	—	150,262
Total real estate, net	20,825,974	20,806,242

Cash and cash equivalents	121,231	187,234
Restricted cash	169,863	165,849
Unconsolidated investments	193,271	193,441
Deferred development costs	68,765	73,237
Prepaid expenses and other assets	602,145	618,597
Right of use lease assets	145,704	147,537
Total assets	$ 22,126,953	$ 22,192,137

LIABILITIES AND EQUITY
Unsecured debt, net	$ 7,881,320	$ 7,879,380
Variable rate unsecured credit facility and commercial paper, net	769,722	739,608
Mortgage notes payable, net	709,176	709,564
Dividends payable	251,694	250,548
Payables for construction	107,546	92,267
Accrued expenses and other liabilities	391,768	391,973
Lease liabilities	163,517	165,200
Accrued interest payable	76,415	68,591
Resident security deposits	61,174	60,689
Total liabilities	10,412,332	10,357,820

Commitments and contingencies

Equity:
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at March 31, 2026 and December 31, 2025; zero shares issued and outstanding at March 31, 2026 and December 31, 2025	—	—
Common stock, $0.01 par value; 280,000,000 shares authorized at March 31, 2026 and December 31, 2025; 139,111,007 and 140,080,657 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively	1,391	1,401
Additional paid-in capital	11,117,451	11,212,296
Accumulated earnings less dividends	339,630	371,157
Accumulated other comprehensive income	32,453	26,486
Total stockholders' equity	11,490,925	11,611,340
Noncontrolling interests	223,696	222,977


Total equity	11,714,621	11,834,317
Total liabilities and equity	$ 22,126,953	$ 22,192,137

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(Dollars in thousands, except per share data)


	For the three months ended March 31,
	2026	2025
Revenue:
Rental and other income	$ 768,446	$ 744,138
Management, development and other fees	1,833	1,742
Total revenue	770,279	745,880

Expenses:
Operating expenses, excluding property taxes	198,419	187,030
Property taxes	90,109	81,831
Expensed transaction, development and other pursuit costs, net of recoveries	3,416	4,744
Interest expense, net	71,489	59,864
Depreciation expense	233,104	217,888
General and administrative expense	22,077	19,780
Casualty and impairment loss	4,619	—
Total expenses	623,233	571,137

Loss from unconsolidated investments	(6,527)	(999)
Structured Investment Program interest income	7,481	6,113
Gain on sale of communities	179,912	56,469
Other real estate activity	84	155

Income before income taxes	327,996	236,481
Income tax benefit	294	116

Net income	328,290	236,597
Net income attributable to noncontrolling interests	(2,560)	—
Net income attributable to common stockholders	$ 325,730	$ 236,597

Earnings per common share - basic:
Net income attributable to common stockholders	$ 2.33	$ 1.66

Earnings per common share - diluted:
Net income attributable to common stockholders	$ 2.33	$ 1.66

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(Dollars in thousands)


	For the three months ended March 31,
	2026	2025
Comprehensive income:
Net income	$ 328,290	$ 236,597
Other comprehensive income (loss):
Gain (loss) on cash flow hedges	6,576	(3,597)
Cash flow hedge gains reclassified to earnings	(563)	(273)
Other comprehensive income (loss)	6,013	(3,870)
Comprehensive income	334,303	232,727
Comprehensive income attributable to noncontrolling interests	(2,606)	—
Comprehensive income attributable to common stockholders	$ 331,697	$ 232,727

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

(Dollars in thousands)


	Common stock	Additional paid-in capital	Accumulated earnings less dividends	Accumulated other comprehensive income (loss)	Total stockholders' equity	Noncontrolling interests	Total equity
Balance at December 31, 2025	$ 1,401	$ 11,212,296	$ 371,157	$ 26,486	$ 11,611,340	$ 222,977	$ 11,834,317
Net income	—	—	325,730	—	325,730	2,560	328,290
Gain on cash flow hedges, net	—	—	—	6,526	6,526	50	6,576
Cash flow hedge gains reclassified to earnings	—	—	—	(559)	(559)	(4)	(563)
Dividends declared ($1.78 per share)	—	—	(248,883)	—	(248,883)	(1,887)	(250,770)
Issuance of common stock, net of withholdings	2	(13,165)	371	—	(12,792)	—	(12,792)
Repurchase of common stock, including repurchase costs	(12)	(89,723)	(108,745)	—	(198,480)	—	(198,480)
Amortization of deferred compensation	—	8,043	—	—	8,043	—	8,043
Balance at March 31, 2026	$ 1,391	$ 11,117,451	$ 339,630	$ 32,453	$ 11,490,925	$ 223,696	$ 11,714,621


	Common stock	Additional paid-in capital	Accumulated earnings less dividends	Accumulated other comprehensive income (loss)	Total stockholders' equity	Noncontrolling interests	Total equity
Balance at December 31, 2024	$ 1,422	$ 11,314,116	$ 591,250	$ 34,304	$ 11,941,092	$ —	$ 11,941,092
Net income attributable to common stockholders	—	—	236,597	—	236,597	—	236,597
Loss on cash flow hedges, net	—	—	—	(3,597)	(3,597)	—	(3,597)
Cash flow hedge gains reclassified to earnings	—	—	—	(273)	(273)	—	(273)
Dividends declared to common stockholders ($1.75 per share)	—	—	(250,265)	—	(250,265)	—	(250,265)
Issuance of common stock, net of withholdings	1	(14,371)	(1,096)	—	(15,466)	—	(15,466)
Amortization of deferred compensation	—	8,195	—	—	8,195	—	8,195
Balance at March 31, 2025	$ 1,423	$ 11,307,940	$ 576,486	$ 30,434	$ 11,916,283	$ —	$ 11,916,283

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Dollars in thousands)


	For the three months ended March 31,
	2026	2025
Cash flows from operating activities:
Net income	$ 328,290	$ 236,597
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	233,104	217,888
Amortization of deferred financing costs and debt discount	3,634	3,233
Amortization of stock-based compensation	5,699	5,662
Equity in loss of, and return on, unconsolidated investments and noncontrolling interests, net of eliminations	9,851	3,093
Casualty and impairment loss	2,007	—
Expensed transaction, development and other pursuit costs, net of recoveries	3,416	4,744
Cash flow hedge gains reclassified to earnings	(388)	(273)
Gain on sale of real estate assets	(179,996)	(56,660)
Increase in accrued interest receivable	(7,186)	(5,806)
Decrease (increase) in prepaid expenses and other assets	13,111	(3,157)
Increase in accrued expenses, other liabilities, accrued interest payable and resident security deposits	7,391	10,582
Net cash provided by operating activities	418,933	415,903

Cash flows from investing activities:
Development/redevelopment of real estate assets including land acquisitions and deferred development costs	(336,820)	(237,282)
Acquisition of real estate assets, including partnership interest	—	(187,362)
Capital expenditures - existing real estate assets	(59,453)	(48,370)
Capital expenditures - non-real estate assets	(514)	(256)
Increase (decrease) in payables for construction	15,279	(3,400)
Proceeds from sale of real estate, net of selling costs	330,378	63,651
Note receivable lending	(11,999)	(12,560)
Note receivable repayments	17,580	109
Distributions from unconsolidated entities and investment sale proceeds	180	—
Unconsolidated investments	(3,611)	(2,395)
Net cash used in investing activities	(48,980)	(427,865)

Cash flows from financing activities:
Issuance of common stock, net	—	693
Repurchase of common stock, net	(198,480)	—
Dividends paid	(249,300)	(243,678)
Net borrowings under unsecured credit facility and commercial paper	30,114	224,942
Repayments of mortgage notes payable, including prepayment penalties	(982)	(1,171)
Payment of deferred financing costs	(224)	—
Payments related to tax withholding for share-based compensation	(13,070)	(16,353)
Noncontrolling interests, joint venture and preferred equity transactions	—	(440)
Net cash used in financing activities	(431,942)	(36,007)

Net decrease in cash, cash equivalents and restricted cash	(61,989)	(47,969)

Cash, cash equivalents and restricted cash, beginning of period	353,083	267,076
Cash, cash equivalents and restricted cash, end of period	$ 291,094	$ 219,107



Cash paid during the period for interest, net of amount capitalized	$ 60,407	$ 40,160

See accompanying notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported with the Condensed Consolidated Statements of Cash Flows (dollars in thousands):


	March 31, 2026	March 31, 2025
Cash and cash equivalents	$ 121,231	$ 53,255
Restricted cash	169,863	165,852
Cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows	$ 291,094	$ 219,107

Supplemental disclosures of non-cash investing and financing activities:

During the three months ended March 31, 2026:

•

As described in Note 4, "Equity," the Company issued 233,363 shares of common stock as part of the Company's stock-based compensation plans, of which 123,221 shares related to the conversion of performance awards to shares of common stock, and the remaining 110,142 shares valued at $19,790,000 were issued in connection with new stock grants; 1,790 shares valued at $324,000 were issued through the Company's dividend reinvestment plan; 74,065 shares valued at $13,124,000 were withheld to satisfy employees' tax withholding and other liabilities; and 402 restricted shares with an aggregate value of $79,000 were forfeited.

•

Common stock and DownREIT Unit dividends declared but not paid totaled $250,593,000.

•

The Company recorded (i) a decrease to prepaid expenses and other assets of $6,576,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $563,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

During the three months ended March 31, 2025:

•

The Company issued 181,588 shares of common stock as part of the Company's stock-based compensation plans, of which 103,332 shares related to the conversion of performance awards to shares of common stock, and the remaining 78,256 shares valued at $17,346,000 were issued in connection with new stock grants; 811 shares valued at $176,000 were issued through the Company's dividend reinvestment plan; and 72,196 shares valued at $16,229,000 were withheld to satisfy employees' tax withholding and other liabilities.

•

Common stock dividends declared but not paid totaled $249,599,000.

•

The Company recorded (i) a decrease to prepaid expenses and other assets of $3,597,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $273,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

AVALONBAY COMMUNITIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Organization, Basis of Presentation and Significant Accounting Policies

Organization and Basis of Presentation

AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company develops, redevelops, acquires, owns and operates multifamily communities in Boston, Massachusetts, the New York/New Jersey metro area, the Mid-Atlantic, Seattle, Washington, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

As of March 31, 2026, the Company owned or held a direct or indirect ownership interest in 319 apartment communities containing 98,271 apartment homes in 11 states and the District of Columbia, of which 25 communities were under construction. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 30 communities that, if developed as expected, will contain an estimated 9,866 apartment homes.

The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in this Form 8-K. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, certain joint venture partnerships, subsidiary partnerships structured as DownREITs, and any variable interest entities that qualify for consolidation. All significant intercompany balances and transactions have been eliminated in consolidation.

Noncontrolling Interests

The Company classifies the carrying value of the DownREIT Units as noncontrolling interests, as the units may be redeemed by unitholders on or after April 30, 2026 for cash or common stock at the Company's election. Net income and comprehensive income is allocated to the DownREIT Units pro-rata based on the weighted average proportion of DownREIT Units to the weighted average combined total of outstanding common stock, participating securities, and DownREIT Units for the period.

Cash, Cash Equivalents and Restricted Cash

amounts the Company has designated for planned 1031 exchange activity and resident security deposits. The majority of the Company's cash, cash equivalents and restricted cash are held at major commercial banks.

Earnings per Common Share


	For the three months ended March 31,
	2026	2025
Basic and diluted shares outstanding
Weighted average common shares - basic	139,549,709	142,113,283
Effect of dilutive securities	1,263,077	373,275
Weighted average common shares - diluted	140,812,786	142,486,558

Calculation of Earnings per Common Share - basic
Net income attributable to common stockholders	$ 325,730	$ 236,597
Net income allocated to unvested restricted shares	(649)	(445)
Net income attributable to common stockholders - basic	$ 325,081	$ 236,152

Weighted average common shares - basic	139,549,709	142,113,283

Earnings per common share - basic	$ 2.33	$ 1.66

Calculation of Earnings per Common Share - diluted
Net income attributable to common stockholders	$ 325,730	$ 236,597
Net income attributable to DownREIT unitholders in consolidated partnerships	2,560	—
Net income - diluted	$ 328,290	$ 236,597

Weighted average common shares - diluted	140,812,786	142,486,558

Earnings per common share - diluted	$ 2.33	$ 1.66

Certain options to purchase shares of common stock in the amounts of 294,892, forward contracts to sell shares of common stock in the amounts of 3,680,000, and unvested performance awards in the amounts of 96,575 as of March 31, 2026 were not included in the computation of diluted earnings per common share because they were anti-dilutive for the period. Certain options to purchase shares of common stock in the amounts of 19,266, forward contracts to sell shares of common stock in the amounts of

3,921,738, and unvested performance awards in the amount of 43,105 as of March 31, 2025 were not included in the computation of diluted earnings per common share because they were anti-dilutive for the period.

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap and interest rate cap agreements (collectively, "Hedging Derivatives") for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives for trading or other speculative purposes. The Company assesses the effectiveness of qualifying hedges, both at inception and on an ongoing basis. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets and the fair values of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities on the accompanying Condensed Consolidated Balance Sheets. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net on the accompanying Condensed Consolidated Statements of Operations. For the Hedging Derivatives that qualify as effective cash flow hedges, the Company records the cumulative changes in the Hedging Derivatives' fair value in accumulated other comprehensive income on the accompanying Condensed Consolidated Statements of Comprehensive Income. Amounts recorded in accumulated other comprehensive income will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that qualify as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding hedged item. Receipts or payments associated with the gains and losses on the Company’s cash flow hedges of future fixed rate debt issuances are presented as a component of cash flows from financing activities in the period the hedges are terminated and the receipt or payments for the Company’s cash flow hedges of interest on variable rate debt are presented as a component of cash flows from operating activities. Payments for derivatives that are not designated in hedging relationships are presented as a component of cash flows from operating activities. See Note 11, “Fair Value,” for further discussion of derivative financial instruments.

Acquisitions of Investments in Real Estate

The Company accounts for real estate acquisitions as either an asset acquisition or a business combination. Under either model, the Company identifies and determines the fair value of any assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. The Company utilizes various sources to determine fair value, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed. For a business combination, the Company records the assets acquired and liabilities assumed based on the fair value of each respective item. For an asset acquisition, the purchase price is allocated based on the relative fair value of the net assets. The Company expenses all applicable acquisition costs for a business combination and capitalizes all applicable acquisition costs for an asset acquisition. The Company expects that acquisitions of individual operating communities will generally be asset acquisitions.

Use of Estimates

Reclassifications

Leases

The Company is party to leases as both a lessor and a lessee, primarily as follows:

•

lessor of residential and commercial space within its apartment communities; and

•

Lessee Considerations

Lessor Considerations

Revenue and Gain Recognition

The Company recognizes revenue for the transfer of goods and services to customers for consideration that the Company expects to receive. The majority of the Company’s revenue is derived from residential and commercial rental and other lease income, which are accounted for as discussed above, under "Leases." The Company's revenue streams that are not accounted for as residential and commercial rental and other lease income include (i) management, development and other fees, (ii) non-lease related revenue and (iii) gains or losses on the sale of real estate.

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, “Segment Reporting,” for the three months ended March 31, 2026 and 2025. Segment information for total revenue excludes real

estate assets that were sold from January 1, 2025 through March 31, 2026, or otherwise qualify as held for sale as of March 31, 2026, as described in Note 6, "Real Estate Disposition Activities" (dollars in thousands):


	Same Store	Other Stabilized	Development/ Redevelopment	Non- allocated (1)	Total
For the three months ended March 31, 2026
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 1,833	$ 1,833
Non-lease related revenue (2)	2,296	1,556	179	—	4,031
Total non-lease revenue	2,296	1,556	179	1,833	5,864

Lease income (3)	709,122	32,310	18,585	—	760,017

Total revenue	$ 711,418	$ 33,866	$ 18,764	$ 1,833	$ 765,881

For the three months ended March 31, 2025
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 1,742	$ 1,742
Non-lease related revenue (2)	2,203	1,366	46	—	3,615
Total non-lease revenue	2,203	1,366	46	1,742	5,357

Lease income (3)	698,763	8,643	7,874	—	715,280

Total revenue	$ 700,966	$ 10,009	$ 7,920	$ 1,742	$ 720,637

______________________________

(1)

Represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)

(3)

Represents residential and commercial rental and other lease income, as discussed above, under "Leases."

Due to the nature and timing of the Company’s identified revenue streams, there were no material amounts of outstanding or unsatisfied performance obligations as of March 31, 2026.

Uncollectible Lease Revenue Reserves

The Company recorded an aggregate offset to income for uncollectible lease revenue, net of amounts received from government rent relief programs, for its residential and commercial portfolios of $10,643,000 and $12,074,000 for the three months ended March 31, 2026 and 2025, respectively.

Recently Issued and Adopted Accounting Standards

2. Interest Capitalized

The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company's development and redevelopment activities totaled $14,557,000 and $10,479,000 for the three months ended March 31, 2026 and 2025, respectively.

3. Debt

The Company's debt, which consists of unsecured notes, the variable rate term loan (the "Term Loan"), mortgage notes payable, the Credit Facility and Commercial Paper, each as defined below, as of March 31, 2026 and December 31, 2025 is summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of March 31, 2026 and December 31, 2025, as shown in the accompanying Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities"). The weighted average interest rates in the following table for secured and unsecured debt include financing costs, including debt issuance costs as well as credit enhancement and trustees' fees, the impact of interest rate hedges and mark-to-market adjustments.


	March 31, 2026		December 31, 2025

Fixed rate unsecured debt (1)	$ 7,925,000	3.6%	$ 7,925,000	3.6%
Fixed rate mortgage notes payable—conventional and tax-exempt	332,320	3.9%	332,602	3.9%
Variable rate mortgage notes payable—conventional and tax-exempt	389,850	4.0%	390,550	4.0%
Total mortgage notes payable and unsecured debt	8,647,170	3.6%	8,648,152	3.6%
Credit Facility	—	—%	—	—%
Commercial paper	770,000	4.1%	740,000	4.0%
Total principal outstanding	9,417,170	3.7%	9,388,152	3.7%
Less deferred financing costs and debt discount (2)	(56,952)		(59,600)
Total	$ 9,360,218		$ 9,328,552

_____________________________________

(1)

Includes the $550,000 Term Loan that has been swapped to an effective fixed rate of 4.44% using interest rate hedges.

(2)

Excludes deferred financing costs associated with the Credit Facility and Commercial Paper, which are included in Prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets.

The Company has a $2,500,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the "Credit Facility") which matures in April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 4.39% at March 31, 2026 and was composed of (i) the Secured Overnight Financing Rate ("SOFR"), applicable to the period of borrowing for a particular draw of funds from the Credit Facility (e.g., one month to maturity, three months to maturity, etc.), plus (ii) the current borrowing spread to SOFR of 0.705% per annum, assuming a daily SOFR borrowing rate. The borrowing spread to SOFR can vary from SOFR plus 0.65% to SOFR plus 1.40% based upon the rating of the Company's unsecured senior notes. There is also an annual facility commitment fee of 0.12% of the borrowing capacity under the Credit Facility, which can vary from 0.10% to 0.30% based upon the rating of the Company's unsecured senior notes. The Credit Facility contains a sustainability-linked pricing component which provides for interest rate margin and commitment fee reductions or increases related to certain environmental sustainability targets, specifically greenhouse gas emission reductions, with the adjustment determined annually. The annual determination under the sustainability-linked pricing component occurred in July 2025, maintaining reductions of approximately 0.02% to the interest rate margin and 0.005% to the commitment fee due to the Company's achievement of sustainability targets.

The Company has an unsecured commercial paper note program (the “Commercial Paper Program”) with a maximum amount of commercial paper notes that can be outstanding at any one time not to exceed $1,000,000,000. Under the terms of the Commercial Paper Program, the Company may issue unsecured commercial paper notes with maturities of less than one year. The Commercial Paper Program is backstopped by the Company's commitment to maintain available borrowing capacity under its Credit Facility in an amount equal to actual borrowings under the Commercial Paper Program.

The availability under the Company's Credit Facility as of March 31, 2026 and December 31, 2025 was as follows (dollars in thousands):


	March 31, 2026	December 31, 2025

Credit Facility commitment	$ 2,500,000	$ 2,500,000
Credit Facility outstanding	—	—
Commercial paper outstanding	(770,000)	(740,000)
Letters of credit outstanding (1)	(864)	(864)
Total Credit Facility available	$ 1,729,136	$ 1,759,136

_____________________________________

(1)

In addition, the Company had $49,584 and $52,584 outstanding in additional letters of credit unrelated to the Credit Facility as of March 31, 2026 and December 31, 2025, respectively.

In the aggregate, secured notes payable mature at various dates from March 2027 through July 2066, and are secured by certain apartment communities with a net carrying value of $1,198,667,000, excluding communities classified as held for sale, if any, as of March 31, 2026.

Scheduled payments and maturities of secured notes payable and unsecured debt outstanding at March 31, 2026 were as follows (dollars in thousands):


Year	Secured notes principal payments and maturities	Unsecured debt maturities	Stated interest rate of unsecured debt
2026	10,829	475,000	2.95%
		300,000	2.90%
2027	248,859	400,000	3.35%
2028	13,902	450,000	3.20%
		400,000	1.90%
2029	126,262	450,000	3.30%
		550,000	SOFR + 0.78%
2030	3,300	700,000	2.30%
		400,000	4.35%
2031	3,500	600,000	2.45%
2032	4,000	700,000	2.05%
2033	5,000	350,000	5.00%
		400,000	5.30%
2034	10,900	400,000	5.35%
2035	13,400	400,000	5.00%
Thereafter	282,218	350,000	3.90%
		300,000	4.15%
		300,000	4.35%
	$ 722,170	$ 7,925,000

The Company was in compliance at March 31, 2026 with customary covenants under the Credit Facility, the Term Loan and the indentures under which the unsecured notes were issued.

4. Equity

As of March 31, 2026 and December 31, 2025, the Company's charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock.

During the three months ended March 31, 2026, the Company:

issued 1,790 shares of common stock through the Company's dividend reinvestment plan;

ii.

issued 233,363 shares of common stock in connection with restricted stock grants and the conversion of performance awards to shares of common stock;

iii.

withheld 74,065 shares of common stock to satisfy employees' tax withholding and other liabilities;

iv.

canceled 402 shares of restricted common stock upon forfeiture; and

repurchased 1,130,336 shares of common stock through the 2025 Stock Repurchase Program and 2026 Stock Repurchase Program, discussed below.

Deferred compensation granted under the Company's Second Amended and Restated 2009 Equity Incentive Plan (the "Plan") does not impact the Company's Condensed Consolidated Financial Statements until recognized as compensation cost.

The Company has a continuous equity program (the "CEP") under which the Company may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of its common stock from time to time. During the three months ended March 31, 2026 and 2025, the Company had no sales under the CEP. As of March 31, 2026, the Company had $623,997,000 remaining authorized for issuance under the program.

In addition to the CEP, during the year ended December 31, 2024, the Company completed an underwritten public offering pursuant to which it entered into forward contracts to sell 3,680,000 shares of common stock at a discount to the closing price of $226.52 per share for approximate net proceeds of $808,606,000 based on the initial forward price. Settlement of the forward contracts is expected to occur on one or more dates not later than December 31, 2026. The final proceeds will be determined on the date(s) of settlement and are subject to certain customary adjustments for dividends and a daily interest factor.

In February 2026, the Company terminated its then-existing stock repurchase program (the "2025 Stock Repurchase Program") and adopted a new stock repurchase program under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $1,000,000,000 (the "2026 Stock Repurchase Program"). Purchases of common stock under the 2026 Stock Repurchase Program may occur from time to time at the Company’s discretion. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The 2026 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice. During the three months ended March 31, 2026, the Company repurchased 1,130,336 shares of common stock at an average price of $175.59 per share, including fees, for a total of $198,480,000 under the 2025 Stock Repurchase Program and the 2026 Stock Repurchase Program. As of March 31, 2026, the Company had $914,354,000 remaining capacity under the 2026 Stock Repurchase Program.

5. Investments

Structured Investment Program

The Company operates a Structured Investment Program (the "SIP"), an investment platform through which the Company provides mezzanine loans or preferred equity to third-party multifamily developers. During the three months ended March 31, 2026, the Company received full repayment of $17,580,000 which includes principal and interest for one mezzanine loan. As of March 31, 2026, the Company had eight commitments to fund up to $226,785,000 in the aggregate with a weighted average rate of return of 11.8% and a weighted average final maturity date of October 2028. As of March 31, 2026, the Company had funded $209,827,000 of these commitments and recognized interest income, exclusive of expected credit losses, of $7,216,000 and $6,130,000 for the three months ended March 31, 2026 and 2025, respectively, from the SIP. Interest income and any change in

the expected credit loss are included as a component of Structured Investment Program interest income on the accompanying Condensed Consolidated Statements of Operations.

The Company evaluates each SIP commitment to determine the classification as a loan or an investment in a real estate development project. As of March 31, 2026, all of the SIP commitments are classified as loans. The Company includes amounts outstanding under the SIP as a component of prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets. The Company evaluates the credit risk for each commitment on an ongoing basis, estimating the reserve for credit losses using relevant available information from internal and external sources. Market-based historical credit loss data provides the basis for the estimation of expected credit losses, with adjustments, if necessary, for differences in current commitment-specific risk characteristics, such as the amount of equity capital provided by a borrower, amount of senior debt secured by the project, nature of the real estate being developed or other factors.

Unconsolidated Investments

As of March 31, 2026, the Company had investments in four unconsolidated entities with real estate holdings, with ownership interests ranging from 20.0% to 28.6%, coupled with other unconsolidated investments including third-party property technology and sustainability focused companies and investment management funds.

The Arts District joint venture, in which the Company holds a 25% ownership interest, owns one apartment community that is subject to a mortgage loan with an outstanding balance of $162,911,000 as of March 31, 2026. The Company has provided the lender a partial payment guarantee for 25% of the loan's maximum borrowing capacity. Any amounts payable under the 25% loan guarantee by the Company are obligations of the joint venture partners in proportion to their ownership interest, and in the event the Company is obligated to perform under its loan guarantee, its joint venture partner is obligated to reimburse the Company for 75% of amounts paid.

The Company accounts for its unconsolidated investments under the equity method of accounting, net asset value or the measurement alternative with the carrying amount of the investment adjusted to fair value when there is an observable transaction for the same or similar investment of the same issuer indicating a change in fair value. The significant accounting policies of the unconsolidated investments are consistent with those of the Company in all material respects. Certain of these investments are subject to various buy‑sell provisions or other rights which are customary in real estate joint venture agreements. The Company and its partners in these entities may initiate these provisions to either sell the Company's interest or acquire the interest from the Company's joint venture partner.

Expensed Transaction, Development and Other Pursuit Costs

The Company capitalizes costs associated with its development activities to the basis of land held when future development is probable, or if the Company has either not yet acquired the land or if the project is subject to a leasehold interest, the costs are capitalized as deferred development costs ("Development Rights"). Future development of these Development Rights is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and the availability of capital. Costs incurred for pursuits for which future development is not yet considered probable are expensed as incurred. If the Company determines a Development Right is no longer probable, the Company recognizes any necessary expense to write down its basis. The Company assesses its portfolio of land held for development and land held for investment for impairment if the intent of the Company changes with respect to either the development of, or the expected holding period for, the land. The Company incurred expenses of $3,416,000 and $4,744,000 for the three months ended March 31, 2026 and 2025, respectively, for expensed transaction, development and other pursuit costs, net of recoveries, which include costs related to development pursuits that were not yet probable of future development at the time incurred, or for pursuits that the Company determined are no longer probable of being developed. The amount for the three months ended March 31, 2025 includes a write-off of $3,668,000 for one development opportunity that the Company determined was no longer probable. These costs are included in expensed transaction, development and other pursuit costs, net of recoveries on the accompanying Condensed Consolidated Statements of Operations. These costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

Long-Lived Assets Casualty Loss

For the three months ended March 31, 2026, the Company recognized $4,619,000 of expense from property damage at certain of the Company's communities, reported as casualty and impairment loss on the accompanying Condensed Consolidated Statements of Operations. The expense for the three months ended March 31, 2026 relates to damage from a water pipe break at a community in New Jersey and damage at communities throughout the portfolio from winter storms.

6. Real Estate Disposition Activities

The following real estate sales occurred during the three months ended March 31, 2026 (dollars in thousands):


Community name	Location	Period of sale	Apartment homes	Gross sales price	Gain on disposition (1)	Commercial square feet
Avalon Sunset Towers	San Francisco, CA	Q1 2026	243	$ 105,000	$ 85,567	—
Avalon White Plains	White Plains, NY	Q1 2026	407	166,000	84,408	—
Avalon The Albemarle	Washington D.C.	Q1 2026	234	69,750	9,713	1,000
Total			884	$ 340,750	$ 179,688	1,000

_________________________________

(1) Gain on disposition was reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Operations.

At March 31, 2026, the Company had no real estate assets that qualified as held for sale.

7. Commitments and Contingencies

Legal Contingencies

The Company recognizes a loss associated with contingent legal matters when the loss is probable and estimable.

RealPage, Inc. The Company engaged with the plaintiffs' counsel to explain why it believed that these cases were without merit as they pertained to the Company. Following these discussions, the plaintiffs filed a notice of voluntary dismissal in July 2023, which resulted in the Company being dismissed without prejudice from these cases. Subsequently, on November 1, 2023, the District of Columbia filed a lawsuit in the Superior Court of the District of Columbia against RealPage, Inc. and a number of owners and/or operators of multifamily housing in the District of Columbia, including the Company, alleging that the defendants violated the District of Columbia Antitrust Act by unlawfully agreeing to use RealPage, Inc. revenue management systems and sharing sensitive data (the “D.C. Antitrust Litigation”). The court has denied the Company's motions to dismiss and for judgment on the pleadings.

On April 23, 2025, the Attorney General of the State of New Jersey and the New Jersey Division of Consumer Affairs filed a lawsuit similar to the D.C. Antitrust Litigation and the Maryland Antitrust Litigation in the U.S. District Court for the District of New Jersey. The lawsuit alleges that RealPage, Inc. and a number of owners and/or operators of multifamily properties in New Jersey, including the Company, violated federal and state antitrust laws and the state consumer fraud law (the “New Jersey Antitrust Litigation”) by unlawfully agreeing to use RealPage, Inc. revenue management systems and other related actions. On July 29, 2025, the Company filed a motion to dismiss. On March 31, 2026, the court granted without prejudice the Company’s motion with respect to the federal and state antitrust claims but denied it with respect to the state consumer fraud claim. See Note 12, "Subsequent Events," for further discussion of the New Jersey Antitrust Litigation.

Lease Obligations

The Company owns seven apartment communities, two commercial properties and one development community located on land subject to ground leases expiring between July 2046 and May 2123. The Company has purchase options for all ground leases expiring prior to 2062. The ground leases for six of the seven apartment communities, the two commercial properties and one development community are operating leases, with rental expense recognized on a straight-line basis over the lease term. In addition, the Company is party to 13 leases for its corporate and regional offices with varying terms through August 2031, all of which are operating leases. During the three months ended March 31, 2026, the Company did not enter into any new ground leases.

The ground lease for the development community includes a completion guaranty that obligates the Company to complete construction of the community and certain off-site infrastructure improvements prior to May 2030. The Company expects to complete construction in Q1 2029 for an estimated total capital cost of $302,000,000.

As of March 31, 2026 and December 31, 2025, the Company had total operating lease assets of $118,168,000 and $119,888,000, respectively, and lease obligations of $143,655,000 and $145,319,000, respectively, reported as components of right of use lease assets and lease liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheets. The Company incurred costs of $3,924,000 and $3,935,000 for the three months ended March 31, 2026 and 2025, respectively, related to operating leases.

The Company has one apartment community located on land subject to a ground lease and four leases for portions of parking garages adjacent to apartment communities that are finance leases. As of March 31, 2026 and December 31, 2025, the Company had total finance lease assets of $27,536,000 and $27,649,000, respectively, and total finance lease obligations of $19,862,000 and $19,881,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets.

8. Segment Reporting

The Company's segment disclosures present the measure(s) used by the Chief Operating Decision Maker ("CODM") for assessing each segment's performance. The Company's CODM is comprised of several members of its executive management team, including its Chief Executive Officer and President, Chief Financial Officer, Chief Investment Officer, Chief Operating Officer, and Executive Vice President- Portfolio and Asset Management. The CODM uses net operating income ("NOI") as the primary financial measure for Same Store communities and Other Stabilized communities. NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), property management and other indirect operating expenses, net of corporate income, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, loss on extinguishment of debt, net, general and administrative expense, income from unconsolidated investments, Structured Investment Program interest income, depreciation expense, income tax expense (benefit), casualty and impairment loss, gain on sale of communities, other real estate activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis. The commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represent 1.6% and 2.0% of total NOI for the three months ended March 31, 2026 and 2025, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income and consistent with how the Company's CODM evaluates total NOI.

A reconciliation of NOI to net income for the three months ended March 31, 2026 and 2025 is as follows (dollars in thousands):


	For the three months ended March 31,
	2026	2025
Net income	$ 328,290	$ 236,597
Property management and other indirect operating expenses, net of corporate income	38,100	36,100
Expensed transaction, development and other pursuit costs, net of recoveries	3,416	4,744
Interest expense, net	71,489	59,864
General and administrative expense	22,077	19,780
Loss from unconsolidated investments	6,527	999
Structured Investment Program interest income	(7,481)	(6,113)
Depreciation expense	233,104	217,888
Income tax benefit	(294)	(116)
Casualty and impairment loss	4,619	—
Gain on sale of communities	(179,912)	(56,469)
Other real estate activity	(84)	(155)
Net operating income from real estate assets sold or held for sale	(2,358)	(16,724)
Net operating income	$ 517,493	$ 496,395

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):


	For the three months ended March 31,
	2026	2025
Rental income from real estate assets sold or held for sale	$ 4,398	$ 25,243
Operating expenses from real estate assets sold or held for sale	(2,040)	(8,519)
Net operating income from real estate assets sold or held for sale	$ 2,358	$ 16,724

The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2026. Segment information for the three months ended March 31, 2026 and 2025 has been adjusted to exclude the real estate assets that were sold from January 1, 2025 through March 31, 2026, or otherwise qualify as held for sale as of March 31, 2026, as described in Note 6, "Real Estate Disposition Activities."


	For the three months ended March 31, 2026
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 711,418	$ 33,866	$ 18,764	$ 764,048
Same Store Operating Expense
Property Taxes	(82,042)			(82,042)
Payroll	(40,311)			(40,311)
Repairs & Maintenance	(39,249)			(39,249)
Utilities	(33,644)			(33,644)
Office Operations	(16,211)			(16,211)
Insurance	(10,449)			(10,449)
Marketing	(3,632)			(3,632)
Same Store Operating Expense	(225,538)	—	—	(225,538)
Non-Same Store Operating Expense	—	(12,843)	(8,174)	(21,017)
Total Expenses	(225,538)	(12,843)	(8,174)	(246,555)
Total NOI	$ 485,880	$ 21,023	$ 10,590	$ 517,493
Gross Real Estate	$ 25,209,461	$ 1,721,462	$ 2,568,160	$ 29,499,083

	For the three months ended March 31, 2025
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 700,966	$ 10,009	$ 7,920	$ 718,895
Same Store Operating Expense
Property Taxes	(77,363)			(77,363)
Payroll	(39,833)			(39,833)
Repairs & Maintenance	(37,956)			(37,956)
Utilities	(29,721)			(29,721)
Office Operations	(15,962)			(15,962)
Insurance	(10,530)			(10,530)
Marketing	(3,750)			(3,750)
Same Store Operating Expense	(215,115)	—	—	(215,115)
Non-Same Store Operating Expense	—	(4,174)	(3,211)	(7,385)
Total Expenses	(215,115)	(4,174)	(3,211)	(222,500)
Total NOI	$ 485,851	$ 5,835	$ 4,709	$ 496,395
Gross Real Estate	$ 24,896,320	$ 941,909	$ 1,329,542	$ 27,167,771

__________________________________

(1)

Does not include non-allocated revenue. Non-allocated revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Non-allocated revenue is $1,833 and $1,742 for the three months ended March 31, 2026 and 2025, respectively.

(2)

Does not include non-allocated gross real estate and land held for development. Non-allocated gross real estate is $106,319 and $118,630 as of March 31, 2026 and 2025, respectively. Land held for development is $135,134 and $141,978 as of March 31, 2026 and 2025, respectively.

9. Stock-Based Compensation Plans

As part of its long-term compensation plans, the Company has granted stock options, performance awards and restricted stock under the Plan. Details of the outstanding awards and activity under the Plan for the three months ended March 31, 2026 are presented below.

Stock Options:


	Options	Weighted average exercise price per option
Options Outstanding at December 31, 2025	271,576	$ 183.28
Granted (1)	23,316	179.67
Exercised	—	—
Forfeited	—	—
Expired	—	—
Options Outstanding at March 31, 2026	294,892	$ 182.99
Options Exercisable at March 31, 2026	261,043	$ 182.53

__________________________________

(1)

All options are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

Performance Awards:


	Performance awards	Weighted average grant date fair value per award
Outstanding at December 31, 2025	256,377	$ 199.94
Granted	99,172	173.72
Change in awards based on performance (1)	31,695	198.68
Converted to shares of common stock	(123,221)	198.41
Forfeited	(1,136)	206.88
Outstanding at March 31, 2026	262,887	$ 190.58

__________________________________

(1)

Represents the change in the number of performance awards earned based on performance achievement.

The Company grants performance awards based on (i) the total shareholder return metrics for the Company’s common stock and (ii) financial metrics related to operating performance and leverage metrics of the Company. The number of performance awards granted that are based on total shareholder return metrics and financial metrics are as follows:


		2026
Total shareholder return metrics		54,543
Financial metrics		44,629
Total granted		99,172


		2026
Dividend yield		4.0%
Estimated volatility over the life of the plan (1)		17.2% - 21.7%
Risk free rate		3.39% - 3.43%
Estimated performance award value based on total shareholder return measure		$168.69

__________________________________

(1)

Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

For the portion of the performance awards granted in 2026 for which achievement will be determined by using financial metrics, the compensation cost was based on an average grant date value of $179.67.

Restricted Stock:


	Restricted stock shares	Weighted average grant date fair value per share
Outstanding at December 31, 2025	167,179	$ 195.76
Granted	110,142	179.68
Vested	(86,599)	189.34
Forfeited	(402)	195.63
Outstanding at March 31, 2026	190,320	$ 189.38

Total employee stock-based compensation cost recognized in income was $5,786,000 and $5,731,000 for the three months ended March 31, 2026 and 2025, respectively, and total capitalized stock-based compensation cost was $2,294,000 and $2,534,000 for the three months ended March 31, 2026 and 2025, respectively. At March 31, 2026, total unrecognized compensation cost was $57,433,000 for unvested restricted stock, stock options and performance awards, which is expected to be recognized over a weighted average period of 2.4 years. The Company reverses any previously recognized compensation cost for forfeitures as they occur.

10. Related Party Arrangements

Unconsolidated Entities

The Company manages unconsolidated real estate entities and provides other real estate related services to third parties, for which it receives asset management, property management, construction, development and redevelopment fee revenue. From these entities, the Company earned fees of $1,833,000 and $1,742,000 for the three months ended March 31, 2026 and 2025, respectively. In addition, the Company had outstanding receivables associated with its property and construction management roles of $1,337,000 and $1,395,000 as of March 31, 2026 and December 31, 2025, respectively.

Director Compensation

The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock units in the amount of $692,000 and $589,000 for the three months ended March 31, 2026 and 2025, respectively, as a component of general and administrative expense on the accompanying Condensed Consolidated Statements of Operations. Deferred compensation relating to these restricted stock grants and deferred stock units to non-employee directors was $364,000 and $910,000 on March 31, 2026 and December 31, 2025, respectively, reported as a component of prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets.

11. Fair Value

Financial Instruments Carried at Fair Value

Derivative Financial Instruments

Hedging Derivatives are carried at fair value in the Company's financial statements. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions and monitors the credit ratings of counterparties and the exposure of the Company to any single entity. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. The Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, such as interest rate, term to maturity and volatility. The Hedging Derivatives credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, which the Company concluded are not significant. As a result, the Company determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following table summarizes the consolidated derivative positions at March 31, 2026 (dollars in thousands):


	Non-designated Hedges	Cash Flow Hedges
	Interest Rate Caps	Interest Rate Swaps
Notional balance	$ 357,289	$ 700,000
Weighted average interest rate (1)	4.0%	N/A
Weighted average capped/swapped interest rate	6.7%	3.6%
Earliest maturity date	July 2026	January 2027
Latest maturity date	May 2029	April 2029

____________________________________

(1)

For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.

During the three months ended March 31, 2026, the Company entered into $150,000,000 of forward starting interest rate swap agreements designated as cash flow hedges of interest rate variability on future debt issuance activity through December 31, 2026. The Company expects to cash settle the swaps and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the hedging impact from these positions will then be recognized over the life of the issued debt as a yield adjustment.

The Company had certain derivatives not designated as hedges during the three months ended March 31, 2026 and 2025, for which fair value changes during each of the respective periods were not material.

The Company anticipates reclassifying approximately $3,437,000 of net hedging gains from accumulated other comprehensive income into earnings within the next 12 months as an offset to the hedged item during this period.

Financial Instruments Not Carried at Fair Value

Cash, Cash Equivalents and Restricted Cash

Other Financial Instruments

Other financial instruments consist of (i) rents, (ii) other receivables, including notes receivable, (iii) prepaid expenses, (iv) accounts and construction payable and (v) accrued expenses and other liabilities. These assets and liabilities are carried at their face amounts, which reasonably approximate their fair values. The Company determined that its notes receivable approximate fair value because interest rates, yields and other terms are consistent with interest rates, yields and other terms currently available for similar instruments and are considered to be a Level 2 price within the fair value hierarchy.

Equity Securities

The Company has direct equity investments in third-party property technology companies. These investments are accounted for using the measurement alternative and are valued at the market price of observable transactions. During the three months ended March 31, 2026, the Company recognized an unrealized loss of $6,250,000 related to these investments, which was reported as a component of loss from unconsolidated investments on the accompanying Condensed Consolidated Statements of Operations. As of March 31, 2026, the Company had recorded cumulative fair value adjustments of $61,322,000 for net unrealized gains on equity securities.

Indebtedness

Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis


	March 31, 2026
Description	Total Fair Value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Description	Total Fair Value		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Investments
Notes Receivable, net	$ 258,128	$ —	$ 258,128	$ —
Non-designated Hedges
Interest Rate Caps	20	—	20	—
Interest Rate Swaps - Assets	3,375	—	3,375	—
Total Assets	$ 261,523	$ —	$ 261,523	$ —

Liabilities
Interest Rate Swaps - Liabilities	$ 1,022	$ —	$ 1,022	$ —
Indebtedness
Fixed rate unsecured debt	6,951,060	6,951,060	—	—
Mortgage notes payable, Commercial Paper and Term Loan	2,001,371	—	2,001,371	—
Total Liabilities	$ 8,953,453	$ 6,951,060	$ 2,002,393	$ —


	December 31, 2025
Description	Total Fair Value	Quoted Prices in Active Markets for Identical Asset (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Description	Total Fair Value		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Investments
Notes Receivable, net	$ 259,051	$ —	$ 259,051	$ —
Total Assets	$ 259,051	$ —	$ 259,051	$ —

Liabilities
Interest Rate Swaps - Liabilities	$ 4,046	$ —	$ 4,046	$ —
Indebtedness
Fixed rate unsecured debt	7,025,656	7,025,656	—	—
Mortgage notes payable, Commercial Paper and Term Loan	1,970,177	—	1,970,177	—
Total Liabilities	$ 8,999,879	$ 7,025,656	$ 1,974,223	$ —

12. Subsequent Events

The Company has evaluated subsequent events through the date on which this Form 10-Q was filed, the date on which these financial statements were issued, and identified the items below for discussion.

In April 2026 and through the date this Form 10-Q was filed, the Company had the following activity:

•

The Company entered into one new SIP commitment, agreeing to provide an aggregate investment of up to $15,000,000 in a multifamily development project in Metro NY/NJ.

•

On April 14, 2026, the Company filed a motion to reconsider the court’s ruling on the Company’s motion to dismiss the New Jersey Antitrust Litigation insofar as it did not dismiss the remaining state consumer fraud claim. See Note 7, "Commitments and Contingencies," for further discussion of the New Jersey Antitrust Litigation.

EX-99.4 6 eqr-ex99_4.htm EX-99.4 EX-99.4

Exhibit 99.4

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)


	June 30, 2026	December 31, 2025
	(unaudited)
ASSETS
Real estate:
Land and improvements	$ 5,007,247	$ 4,960,568
Buildings and improvements	21,628,963	21,252,137
Furniture, fixtures and equipment	1,642,780	1,546,813
	28,278,990	27,759,518
Less accumulated depreciation	(9,116,539)	(8,686,084)
Net operating real estate	19,162,451	19,073,434
Construction in progress, including land	1,668,998	1,458,795
Land held for development	101,508	123,751
Real estate assets held for sale, net	41,942	150,262
Total real estate, net	20,974,899	20,806,242

Cash and cash equivalents	80,682	187,234
Restricted cash	165,436	165,849
Unconsolidated investments	199,046	193,441
Deferred development costs	75,440	73,237
Prepaid expenses and other assets	660,707	618,597
Right of use lease assets	144,141	147,537
Total assets	$ 22,300,351	$ 22,192,137

LIABILITIES AND EQUITY
Unsecured debt, net	$ 7,408,395	$ 7,879,380
Variable rate unsecured credit facility and commercial paper, net	915,786	739,608
Mortgage notes payable, net	700,599	709,564
Dividends payable	256,954	250,548
Payables for construction	113,585	92,267
Accrued expenses and other liabilities	385,901	391,973
Lease liabilities	162,444	165,200
Accrued interest payable	65,814	68,591
Resident security deposits	62,215	60,689
Total liabilities	10,071,693	10,357,820

Commitments and contingencies

Equity:
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at June 30, 2026 and December 31, 2025; zero shares issued and outstanding at June 30, 2026 and December 31, 2025	—	—
Common stock, $0.01 par value; 280,000,000 shares authorized at June 30, 2026 and December 31, 2025; 141,875,567 and 140,080,657 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively	1,419	1,401
Additional paid-in capital	11,739,908	11,212,296
Accumulated earnings less dividends	242,188	371,157
Accumulated other comprehensive income	38,896	26,486
Total stockholders' equity	12,022,411	11,611,340
Noncontrolling interests	206,247	222,977


Total equity	12,228,658	11,834,317
Total liabilities and equity	$ 22,300,351	$ 22,192,137

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(Dollars in thousands, except per share data)


	For the three months ended June 30,		For the six months ended June 30,
	2026	2025	2026	2025
Revenue:
Rental and other income	$ 775,986	$ 758,601	$ 1,544,432	$ 1,502,739
Management, development and other fees	1,782	1,594	3,615	3,336
Total revenue	777,768	760,195	1,548,047	1,506,075

Expenses:
Operating expenses, excluding property taxes	195,769	190,940	394,188	377,970
Property taxes	90,114	86,031	180,223	167,862
Expensed transaction, development and other pursuit costs, net of recoveries	19,976	2,493	23,392	7,237
Interest expense, net	70,070	64,801	141,559	124,665
Depreciation expense	232,975	231,730	466,079	449,618
General and administrative expense	27,137	22,997	49,214	42,777
Casualty and impairment loss	—	858	4,619	858
Total expenses	636,041	599,850	1,259,274	1,170,987

Income (loss) from unconsolidated investments	7,647	(1,052)	1,120	(2,051)
Structured Investment Program interest income	7,704	6,937	15,185	13,050
(Loss) gain on sale of communities	(338)	99,457	179,574	155,926
Other real estate activity	223	3,637	307	3,792

Income before income taxes	156,963	269,324	484,959	505,805
Income tax (expense) benefit	(70)	531	224	647

Net income	156,893	269,855	485,183	506,452
Net income attributable to noncontrolling interests	(1,173)	(1,190)	(3,733)	(1,190)
Net income attributable to common stockholders	$ 155,720	$ 268,665	$ 481,450	$ 505,262

Earnings per common share - basic:
Net income attributable to common stockholders	$ 1.11	$ 1.89	$ 3.43	$ 3.55

Earnings per common share - diluted:
Net income attributable to common stockholders	$ 1.11	$ 1.88	$ 3.43	$ 3.54

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(Dollars in thousands)


	For the three months ended June 30,		For the six months ended June 30,
	2026	2025	2026	2025
Comprehensive income:
Net income	$ 156,893	$ 269,855	$ 485,183	$ 506,452
Other comprehensive income (loss):
Gain (loss) on cash flow hedges	7,178	(2,263)	13,754	(5,860)
Cash flow hedge gains reclassified to earnings	(687)	(570)	(1,250)	(843)
Other comprehensive income (loss)	6,491	(2,833)	12,504	(6,703)
Comprehensive income	163,384	267,022	497,687	499,749
Comprehensive income attributable to noncontrolling interests	(1,221)	(1,190)	(3,827)	(1,190)
Comprehensive income attributable to common stockholders	$ 162,163	$ 265,832	$ 493,860	$ 498,559

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

(Dollars in thousands)


	Common stock	Additional paid-in capital	Accumulated earnings less dividends	Accumulated other comprehensive income (loss)	Total stockholders' equity	Noncontrolling interests	Total equity
Balance at December 31, 2025	$ 1,401	$ 11,212,296	$ 371,157	$ 26,486	$ 11,611,340	$ 222,977	$ 11,834,317
Net income	—	—	325,730	—	325,730	2,560	328,290
Gain on cash flow hedges, net	—	—	—	6,526	6,526	50	6,576
Cash flow hedge gains reclassified to earnings	—	—	—	(559)	(559)	(4)	(563)
Dividends declared ($1.78 per share)	—	—	(248,883)	—	(248,883)	(1,887)	(250,770)
Issuance of common stock, net of withholdings	2	(13,165)	371	—	(12,792)	—	(12,792)
Repurchase of common stock, including repurchase costs	(12)	(89,723)	(108,745)	—	(198,480)	—	(198,480)
Amortization of deferred compensation	—	8,043	—	—	8,043	—	8,043
Balance at March 31, 2026	$ 1,391	$ 11,117,451	$ 339,630	$ 32,453	$ 11,490,925	$ 223,696	$ 11,714,621
Net income	—	—	155,720	—	155,720	1,173	156,893
Gain on cash flow hedges, net	—	—	—	7,125	7,125	53	7,178
Cash flow hedge gains reclassified to earnings	—	—	—	(682)	(682)	(5)	(687)
Redemption of DownREIT Units	—	2,656	—	—	2,656	(16,925)	(14,269)
Dividends declared ($1.78 per share)	—	—	(253,212)	—	(253,212)	(1,745)	(254,957)
Issuance of common stock, net of withholdings	28	608,158	50	—	608,236	—	608,236
Amortization of deferred compensation	—	11,643	—	—	11,643	—	11,643
Balance at June 30, 2026	$ 1,419	$ 11,739,908	$ 242,188	$ 38,896	$ 12,022,411	$ 206,247	$ 12,228,658


	Common stock	Additional paid-in capital	Accumulated earnings less dividends	Accumulated other comprehensive income (loss)	Total stockholders' equity	Noncontrolling interests	Total equity
Balance at December 31, 2024	$ 1,422	$ 11,314,116	$ 591,250	$ 34,304	$ 11,941,092	$ —	$ 11,941,092
Net income attributable to common stockholders	—	—	236,597	—	236,597	—	236,597
Loss on cash flow hedges, net	—	—	—	(3,597)	(3,597)	—	(3,597)
Cash flow hedge gains reclassified to earnings	—	—	—	(273)	(273)	—	(273)
Dividends declared to common stockholders ($1.75 per share)	—	—	(250,265)	—	(250,265)	—	(250,265)
Issuance of common stock, net of withholdings	1	(14,371)	(1,096)	—	(15,466)	—	(15,466)
Amortization of deferred compensation	—	8,195	—	—	8,195	—	8,195
Balance at March 31, 2025	$ 1,423	$ 11,307,940	$ 576,486	$ 30,434	$ 11,916,283	$ —	$ 11,916,283
Net income	—	—	268,665	—	268,665	1,190	269,855
Loss on cash flow hedges, net	—	—	—	(2,263)	(2,263)	—	(2,263)
Cash flow hedge gains reclassified to earnings	—	—	—	(570)	(570)	—	(570)
Issuance of DownREIT Units	—	—	—	—	—	222,653	222,653
Dividends declared to noncontrolling interests ($1.19 per share)	—	—	—	—	—	(1,264)	(1,264)
Dividends declared to common stockholders ($1.75 per share)	—	—	(249,610)	—	(249,610)	—	(249,610)
Issuance of common stock, net of withholdings	—	2,676	(6)	—	2,670	—	2,670
Amortization of deferred compensation	—	12,544	—	—	12,544	—	12,544
Balance at June 30, 2025	$ 1,423	$ 11,323,160	$ 595,535	$ 27,601	$ 11,947,719	$ 222,579	$ 12,170,298

See accompanying notes to Condensed Consolidated Financial Statements.

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Dollars in thousands)


	For the six months ended June 30,
	2026	2025
Cash flows from operating activities:
Net income	$ 485,183	$ 506,452
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	466,079	449,618
Amortization of deferred financing costs and debt discount	7,235	6,280
Amortization of stock-based compensation	13,729	14,119
Equity in loss of, and return on, unconsolidated investments and noncontrolling interests, net of eliminations	7,249	6,666
Casualty and impairment loss	2,007	858
Abandonment of development pursuits, net of recoveries	11,025	7,237
Cash flow hedge gains reclassified to earnings	(961)	(843)
Gain on sale of real estate assets	(179,881)	(159,786)
Increase in accrued interest receivable	(14,626)	(12,605)
Increase in prepaid expenses and other assets	(7,907)	(23,264)
Decrease in accrued expenses, other liabilities, accrued interest payable and resident security deposits	(6,060)	(1,017)
Net cash provided by operating activities	783,072	793,715

Cash flows from investing activities:
Development/redevelopment of real estate assets including land acquisitions and deferred development costs	(650,896)	(549,366)
Acquisition of real estate assets, including partnership interest	—	(384,495)
Capital expenditures - existing real estate assets	(134,257)	(109,039)
Capital expenditures - non-real estate assets	(3,322)	(1,875)
Increase in payables for construction	21,318	15,665
Proceeds from sale of real estate, net of selling costs	330,378	228,058
Note receivable lending	(39,908)	(15,630)
Note receivable repayments	17,580	25
Distributions from unconsolidated entities and investment sale proceeds	180	—
Unconsolidated investments	(6,954)	(6,553)
Net cash used in investing activities	(465,881)	(823,210)

Cash flows from financing activities:
Issuance of common stock, net	609,806	3,377
Repurchase of common stock, net	(198,480)	—
Dividends paid	(498,794)	(492,646)
Net borrowings under unsecured credit facility and commercial paper	176,178	665,000
Repayments of mortgage notes payable, including prepayment penalties	(10,153)	(9,430)
Issuance of unsecured debt	—	450,000
Repayment of unsecured debt	(475,000)	(525,000)
Payment of deferred financing costs	(225)	(15,966)
Payments related to tax withholding for share-based compensation	(13,219)	(16,544)
Noncontrolling interests, joint venture and preferred equity transactions	(14,269)	(1,000)
Net cash (used in) provided by financing activities	(424,156)	57,791

Net (decrease) increase in cash, cash equivalents and restricted cash	(106,965)	28,296


Cash, cash equivalents and restricted cash, beginning of period	353,083	267,076
Cash, cash equivalents and restricted cash, end of period	$ 246,118	$ 295,372

Cash paid during the period for interest, net of amount capitalized	$ 138,050	$ 130,414

See accompanying notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported with the Condensed Consolidated Statements of Cash Flows (dollars in thousands):


	June 30, 2026	June 30, 2025
Cash and cash equivalents	$ 80,682	$ 102,825
Restricted cash	165,436	192,547
Cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows	$ 246,118	$ 295,372

Supplemental disclosures of non-cash investing and financing activities:

During the six months ended June 30, 2026:

•

As described in Note 4, "Equity," the Company issued 234,445 shares of common stock as part of the Company's stock-based compensation plans, of which 123,221 shares related to the conversion of performance awards to shares of common stock, and the remaining 111,224 shares valued at $19,990,000 were issued in connection with new stock grants; 2,987 shares valued at $529,000 were issued through the Company's dividend reinvestment plan; 83,467 shares valued at $14,792,000 were withheld to satisfy employees' tax withholding and other liabilities; and 1,518 restricted shares with an aggregate value of $292,000 were forfeited.

•

Common stock and DownREIT Unit dividends declared but not paid totaled $254,748,000.

•

The Company recorded (i) a decrease to prepaid expenses and other assets of $13,754,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $1,250,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

During the six months ended June 30, 2025:

•

The Company issued 182,559 shares of common stock as part of the Company's stock-based compensation plans, of which 103,332 shares related to the conversion of performance awards to shares of common stock, and the remaining 79,227 shares valued at $17,546,000 were issued in connection with new stock grants; 1,691 shares valued at $353,000 were issued through the Company's dividend reinvestment plan; and 72,998 shares valued at $16,395,000 were withheld to satisfy employees' tax withholding and other liabilities.

•

Common stock and DownREIT Unit dividends declared but not paid totaled $250,874,000.

•

The Company recorded (i) a decrease to prepaid expenses and other assets of $5,860,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $843,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

AVALONBAY COMMUNITIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Organization, Basis of Presentation and Significant Accounting Policies

Organization

AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company develops, redevelops, acquires, owns and operates multifamily communities in Boston, Massachusetts, the New York/New Jersey metro area, the Mid-Atlantic, Seattle, Washington, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

As of June 30, 2026, the Company owned or held a direct or indirect ownership interest in 322 apartment communities containing 99,072 apartment homes in 11 states and the District of Columbia, of which 27 communities were under construction. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 31 communities that, if developed as expected, will contain an estimated 9,997 apartment homes.

Proposed Merger with Equity Residential

On May 20, 2026, the Company, Equity Residential, a Maryland real estate investment trust (“Equity Residential”), ERP Operating Limited Partnership, an Illinois limited partnership (the “ERP Operating Partnership”), and Canopy Merger Sub LLC, a Maryland limited liability company and a direct wholly owned subsidiary of Equity Residential (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, (i) on the closing date but prior to the effective time (the “Effective Time”) of the Merger (as defined below), the Company will contribute certain assets set forth in an exhibit to the Merger Agreement (the “Asset Contribution”) in exchange for units of partnership interest in the ERP Operating Partnership that have, in the aggregate, a value equal to the fair market value of such contributed assets and (ii) following the Asset Contribution and at the Effective Time, AvalonBay will merge with and into Merger Sub, with Merger Sub surviving as a direct, wholly owned subsidiary of Equity Residential (the “Merger” and, together with the Asset Contribution and the other transactions contemplated by the Merger Agreement, the “Transactions”). At the Effective Time, each outstanding share of AvalonBay common stock will be converted into the right to receive 2.793 Equity Residential common shares (the “Exchange Ratio”), resulting in legacy Equity Residential shareholders and former AvalonBay stockholders owning approximately 49% and 51% of the combined company, respectively. The board of trustees and board of directors of both companies, as applicable, have each unanimously approved the Merger Agreement and the Transactions.

The Merger will be accounted for as a reverse acquisition under the business combination accounting rules in which Equity Residential is considered the legal acquirer because Equity Residential will issue common shares to AvalonBay stockholders, while AvalonBay is designated as the accounting acquirer based primarily on post-Merger relative ownership percentage and the composition of senior executive leadership. Consequently, Equity Residential’s historical assets and liabilities will be recorded at estimated fair value as of the closing date of the Merger, and the combined financial statements will present AvalonBay’s historical balances and results.

The Merger Agreement contains provisions granting each of AvalonBay and Equity Residential the right to terminate the Merger Agreement under specified circumstances. Upon a termination of the Merger Agreement, under certain circumstances, (i) Equity Residential may be required to pay AvalonBay a termination fee of the lesser of approximately $1,005,000,000 or the maximum amount that could be paid to AvalonBay without causing it to fail to meet the REIT requirements for such year, or (ii) AvalonBay may be required to pay Equity Residential a termination fee of the lesser of approximately $1,070,000,000 or the maximum amount that could be paid to Equity Residential without causing it to fail to meet the REIT requirements for such year.

Following the closing of the Merger, the combined company will operate under a new name and will maintain dual headquarters in Chicago, Illinois and Arlington, Virginia. The Transactions are expected to be completed in the second half of 2026, subject to reciprocal shareholder approvals and other customary closing conditions.

Basis of Presentation

The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in this Form 8-K. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.

Principles of Consolidation

Noncontrolling Interests

The Company classifies the carrying value of the DownREIT Units as noncontrolling interests, as the units may be redeemed by unitholders on or after April 30, 2026 for cash or common stock at the Company's election. Net income and comprehensive income is allocated to the DownREIT Units pro-rata based on the weighted average proportion of DownREIT Units to the weighted average combined total of outstanding common stock, participating securities, and DownREIT Units for the period.

Cash, Cash Equivalents and Restricted Cash

Earnings per Common Share

for DownREIT Units. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):


	For the three months ended June 30,		For the six months ended June 30,
	2026	2025	2026	2025
Basic and diluted shares outstanding
Weighted average common shares - basic	140,555,264	142,195,859	140,052,487	142,154,571
Effect of dilutive securities	1,279,505	1,096,447	1,271,292	734,861
Weighted average common shares - diluted	141,834,769	143,292,306	141,323,779	142,889,432

Calculation of Earnings per Common Share - basic
Net income attributable to common stockholders	$ 155,720	$ 268,665	$ 481,450	$ 505,262
Net income allocated to unvested restricted shares	(327)	(497)	(984)	(942)
Net income attributable to common stockholders - basic	$ 155,393	$ 268,168	$ 480,466	$ 504,320

Weighted average common shares - basic	140,555,264	142,195,859	140,052,487	142,154,571

Earnings per common share - basic	$ 1.11	$ 1.89	$ 3.43	$ 3.55

Calculation of Earnings per Common Share - diluted
Net income attributable to common stockholders	$ 155,720	$ 268,665	$ 481,450	$ 505,262
Net income attributable to DownREIT unitholders in consolidated partnerships	1,173	1,190	3,733	1,190
Net income - diluted	$ 156,893	$ 269,855	$ 485,183	$ 506,452

Weighted average common shares - diluted	141,834,769	143,292,306	141,323,779	142,889,432

Earnings per common share - diluted	$ 1.11	$ 1.88	$ 3.43	$ 3.54

Certain options to purchase shares of common stock in the amounts of 42,582, forward contracts to sell shares of common stock in the amounts of 920,000, and unvested performance awards in the amounts of 96,506 as of June 30, 2026 were not included in the computation of diluted earnings per common share because they were anti-dilutive for the period. Certain options to purchase shares of common stock in the amounts of 19,266, forward contracts to sell shares of common stock in the amounts of 4,047,113, and unvested performance awards in the amount of 42,790 as of June 30, 2025 were not included in the computation of diluted earnings per common share because they were anti-dilutive for the period.

Derivative Instruments and Hedging Activities

the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that qualify as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding hedged item. Receipts or payments associated with the gains and losses on the Company’s cash flow hedges of future fixed rate debt issuances are presented as a component of cash flows from financing activities in the period the hedges are terminated and the receipt or payments for the Company’s cash flow hedges of interest on variable rate debt are presented as a component of cash flows from operating activities. Payments for derivatives that are not designated in hedging relationships are presented as a component of cash flows from operating activities. See Note 11, “Fair Value,” for further discussion of derivative financial instruments.

Acquisitions of Investments in Real Estate

Use of Estimates

Reclassifications

Leases

The Company is party to leases as both a lessor and a lessee, primarily as follows:

•

lessor of residential and commercial space within its apartment communities; and

•

Lessee Considerations

Lessor Considerations

Revenue and Gain Recognition

The Company recognizes revenue for the transfer of goods and services to customers for consideration that the Company expects to receive. The majority of the Company’s revenue is derived from residential and commercial rental and other lease income, which are accounted for as discussed above, under "Leases." The Company's revenue streams that are not accounted for as residential and commercial rental and other lease income include (i) management, development and other fees, (ii) non-lease related revenue and (iii) gains or losses on the sale of real estate.

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, “Segment Reporting,” for the three and six months ended June 30, 2026 and 2025. Segment information for total revenue excludes real estate assets that were sold from January 1, 2025 through June 30, 2026, or otherwise qualify as held for sale as of June 30, 2026, as described in Note 6, "Real Estate Disposition Activities" (dollars in thousands):


	Same Store	Other Stabilized	Development/ Redevelopment	Non- allocated (1)	Total
For the three months ended June 30, 2026
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 1,782	$ 1,782
Non-lease related revenue (2)	2,938	1,661	194	—	4,793
Total non-lease revenue	2,938	1,661	194	1,782	6,575

Lease income (3)	713,370	32,236	24,017	—	769,623

Total revenue	$ 716,308	$ 33,897	$ 24,211	$ 1,782	$ 776,198

For the three months ended June 30, 2025
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 1,594	$ 1,594
Non-lease related revenue (2)	2,716	1,520	73	—	4,309
Total non-lease revenue	2,716	1,520	73	1,594	5,903

Lease income (3)	701,671	20,129	8,827	—	730,627

Total revenue	$ 704,387	$ 21,649	$ 8,900	$ 1,594	$ 736,530


	Same Store	Other Stabilized	Development/ Redevelopment	Non- allocated (1)	Total
For the six months ended June 30, 2026
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 3,615	$ 3,615
Non-lease related revenue (2)	5,230	3,217	372	—	8,819
Total non-lease revenue	5,230	3,217	372	3,615	12,434

Lease income (3)	1,420,939	64,547	42,602	—	1,528,088

Total revenue	$ 1,426,169	$ 67,764	$ 42,974	$ 3,615	$ 1,540,522

For the six months ended June 30, 2025
Management, development and other fees and other ancillary items	$ —	$ —	$ —	$ 3,336	$ 3,336
Non-lease related revenue (2)	4,915	2,885	119	—	7,919
Total non-lease revenue	4,915	2,885	119	3,336	11,255

Lease income (3)	1,398,938	28,774	16,701	—	1,444,413

Total revenue	$ 1,403,853	$ 31,659	$ 16,820	$ 3,336	$ 1,455,668

______________________________

(1)

Represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)

(3)

Represents residential and commercial rental and other lease income, as discussed above, under "Leases."

Due to the nature and timing of the Company’s identified revenue streams, there were no material amounts of outstanding or unsatisfied performance obligations as of June 30, 2026.

Uncollectible Lease Revenue Reserves

The Company recorded an aggregate offset to income for uncollectible lease revenue, net of amounts received from government rent relief programs, for its residential and commercial portfolios of $10,853,000 and $11,806,000 for the three months ended June 30, 2026 and 2025, respectively, and $21,496,000 and $23,880,000 for the six months ended June 30, 2026 and 2025, respectively.

Recently Issued and Adopted Accounting Standards

2. Interest Capitalized

The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company's development and redevelopment activities totaled $15,930,000 and $11,904,000 for the three months ended June 30, 2026 and 2025, respectively, and $30,487,000 and $22,383,000 for the six months ended June 30, 2026 and 2025, respectively.

3. Debt

The Company's debt, which consists of unsecured notes, the variable rate term loan (the "Term Loan"), mortgage notes payable, the Credit Facility and Commercial Paper, each as defined below, as of June 30, 2026 and December 31, 2025 is summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of June 30, 2026 and December 31, 2025, as shown in the accompanying Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities"). The weighted average interest rates in the following table for secured and unsecured debt include financing costs, including debt issuance costs as well as credit enhancement and trustees' fees, the impact of interest rate hedges and mark-to-market adjustments.


	June 30, 2026		December 31, 2025

Fixed rate unsecured debt (1)	$ 7,450,000	3.6%	$ 7,925,000	3.6%
Fixed rate mortgage notes payable—conventional and tax-exempt	332,049	3.9%	332,602	3.9%
Variable rate mortgage notes payable—conventional and tax-exempt	380,950	4.3%	390,550	4.0%
Total mortgage notes payable and unsecured debt	8,162,999	3.7%	8,648,152	3.6%
Credit Facility	—	—%	—	—%
Commercial paper	916,100	4.0%	740,000	4.0%
Total principal outstanding	9,079,099	3.7%	9,388,152	3.7%
Less deferred financing costs and debt discount (2)	(54,319)		(59,600)
Total	$ 9,024,780		$ 9,328,552

_____________________________________

(1)

Includes the $550,000 Term Loan that has been swapped to an effective fixed rate of 4.44% using interest rate hedges.

(2)

The Company has a $2,500,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the "Credit Facility") which matures in April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 4.39% at June 30, 2026 and was composed of (i) the Secured Overnight Financing Rate ("SOFR"), applicable to the period of borrowing for a particular draw of funds from the Credit Facility (e.g., one month to maturity, three months to maturity, etc.), plus (ii) the current borrowing spread to SOFR of 0.705% per annum, assuming a daily SOFR borrowing rate. The borrowing spread to SOFR can vary from SOFR plus 0.65% to SOFR plus 1.40% based upon the rating of the Company's unsecured senior notes. There is also an annual facility commitment fee of 0.12% of the borrowing capacity under the Credit Facility, which can vary from 0.10% to 0.30% based upon the rating of the Company's unsecured senior notes. The Credit Facility contains a sustainability-linked pricing component which provides for interest rate margin and commitment fee reductions or increases related to certain environmental sustainability targets, specifically greenhouse gas emission reductions, with the adjustment determined annually. The annual determination under the sustainability-linked pricing component occurred in July 2025, maintaining reductions of approximately 0.02% to the interest rate margin and 0.005% to the commitment fee due to the Company's achievement of sustainability targets.

The availability under the Company's Credit Facility as of June 30, 2026 and December 31, 2025 was as follows (dollars in thousands):


	June 30, 2026	December 31, 2025

Credit Facility commitment	$ 2,500,000	$ 2,500,000
Credit Facility outstanding	—	—
Commercial paper outstanding	(916,100)	(740,000)
Letters of credit outstanding (1)	(864)	(864)
Total Credit Facility available	$ 1,583,036	$ 1,759,136

_____________________________________

(1)

In addition, the Company had $60,627 and $52,584 outstanding in additional letters of credit unrelated to the Credit Facility as of June 30, 2026 and December 31, 2025, respectively.

In May 2026, the Company repaid $475,000,000 of its 2.95% unsecured notes at par upon maturity.

In the aggregate, secured notes payable mature at various dates from March 2027 through July 2066, and are secured by certain apartment communities with a net carrying value of $1,190,937,000, excluding communities classified as held for sale, if any, as of June 30, 2026.

Scheduled payments and maturities of secured notes payable and unsecured debt outstanding at June 30, 2026 were as follows (dollars in thousands):


Year	Secured notes principal payments and maturities	Unsecured debt maturities	Stated interest rate of unsecured debt
2026	1,658	300,000	2.90%
2027	248,859	400,000	3.35%
2028	13,902	450,000	3.20%
		400,000	1.90%
2029	126,262	450,000	3.30%
		550,000	SOFR + 0.78%
2030	3,300	700,000	2.30%
		400,000	4.35%
2031	3,500	600,000	2.45%
2032	4,000	700,000	2.05%
2033	5,000	350,000	5.00%
		400,000	5.30%
2034	10,900	400,000	5.35%
2035	13,400	400,000	5.00%
Thereafter	282,218	350,000	3.90%
		300,000	4.15%
		300,000	4.35%
	$ 712,999	$ 7,450,000

The Company was in compliance at June 30, 2026 with customary covenants under the Credit Facility, the Term Loan and the indentures under which the unsecured notes were issued.

4. Equity

As of June 30, 2026 and December 31, 2025, the Company's charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock.

During the six months ended June 30, 2026, the Company:

issued 2,444 shares of common stock in connection with stock options exercised;

ii.

issued 2,987 shares of common stock through the Company's dividend reinvestment plan;

iii.

issued 234,445 shares of common stock in connection with restricted stock grants and the conversion of performance awards to shares of common stock;

iv.

issued 10,355 shares of common stock through the Employee Stock Purchase Plan;

issued 2,760,000 shares of common stock through the settlement of equity forward contracts;

vi.

withheld 83,467 shares of common stock to satisfy employees' tax withholding and other liabilities;

vii.

canceled 1,518 shares of restricted common stock upon forfeiture; and

viii.

repurchased 1,130,336 shares of common stock through the 2025 Stock Repurchase Program and 2026 Stock Repurchase Program, discussed below.

Deferred compensation related to the Company's stock option, performance award and restricted stock grants does not impact the Company's Condensed Consolidated Financial Statements until recognized as compensation cost.

The Company has a continuous equity program (the "CEP") under which the Company may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of its common stock from time to time. During the three and six months ended June 30, 2026 and 2025, the Company had no sales under the CEP. In connection with the pending Merger, the CEP was suspended as of the date of the Merger Agreement.

In addition to the CEP, during the year ended December 31, 2024, the Company completed an underwritten public offering pursuant to which it entered into forward contracts to sell 3,680,000 shares of common stock at a discount to the closing price of $226.52 per share for net proceeds of $808,606,000 based on the initial forward price. During the three months ended June 30, 2026, the Company partially settled the outstanding forward contracts, issuing 2,760,000 shares of common stock at $220.08 per share for proceeds of $607,433,000. See Note 12, "Subsequent Events," for further discussion of equity activity subsequent to June 30, 2026.

In February 2026, the Company terminated its then-existing stock repurchase program (the "2025 Stock Repurchase Program") and adopted a new stock repurchase program under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $1,000,000,000 (the "2026 Stock Repurchase Program"). Purchases of common stock under the 2026 Stock Repurchase Program may occur from time to time at the Company’s discretion. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The 2026 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice. During the six months ended June 30, 2026, the Company repurchased 1,130,336 shares of common stock at an average price of $175.59 per share, including fees, for a total of $198,480,000 under the 2025 Stock Repurchase Program and the 2026 Stock Repurchase Program. In connection with the pending Merger, the 2026 Stock Repurchase Program was suspended as of the date of the Merger Agreement.

5. Investments

Structured Investment Program

2026, the Company entered into one new SIP commitment, agreeing to provide an aggregate investment of up to $15,000,000 in a multifamily development project in Metro NY/NJ. During the six months ended June 30, 2026, the Company received full repayment of $17,580,000 which includes principal and interest for one mezzanine loan. As of June 30, 2026, the Company had nine commitments to fund up to $241,785,000 in the aggregate with a weighted average rate of return of 11.8% and a weighted average final maturity date of November 2028. As of June 30, 2026, the Company had funded $237,774,000 of these commitments and recognized interest income, exclusive of expected credit losses, of $7,806,000 and $6,689,000 for the three months ended June 30, 2026 and 2025, respectively, and $15,022,000 and $12,820,000 for the six months ended June 30, 2026 and 2025, respectively, from the SIP. Interest income and any change in the expected credit loss are included as a component of Structured Investment Program interest income on the accompanying Condensed Consolidated Statements of Operations.

The Company evaluates each SIP commitment to determine the classification as a loan or an investment in a real estate development project. As of June 30, 2026, all of the SIP commitments are classified as loans. The Company includes amounts outstanding under the SIP as a component of prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets. The Company evaluates the credit risk for each commitment on an ongoing basis, estimating the reserve for credit losses using relevant available information from internal and external sources. Market-based historical credit loss data provides the basis for the estimation of expected credit losses, with adjustments, if necessary, for differences in current commitment-specific risk characteristics, such as the amount of equity capital provided by a borrower, amount of senior debt secured by the project, nature of the real estate being developed or other factors.

Unconsolidated Investments

As of June 30, 2026, the Company had investments in four unconsolidated entities with real estate holdings, with ownership interests ranging from 20.0% to 28.6%, coupled with other unconsolidated investments including third-party property technology and sustainability focused companies and investment management funds.

The Arts District joint venture, in which the Company holds a 25% ownership interest, owns one apartment community that is subject to a mortgage loan with an outstanding balance of $162,911,000 as of June 30, 2026. The Company has provided the lender a partial payment guarantee for 25% of the loan's maximum borrowing capacity. Any amounts payable under the 25% loan guarantee by the Company are obligations of the joint venture partners in proportion to their ownership interest, and in the event the Company is obligated to perform under its loan guarantee, its joint venture partner is obligated to reimburse the Company for 75% of amounts paid.

Expensed Transaction, Development and Other Pursuit Costs

respectively, and $11,025,000 and $7,237,000 for the six months ended June 30, 2026 and 2025, respectively, for expensed development and other pursuit costs, net of recoveries, which include development pursuits that were not yet probable of future development at the time incurred, or for pursuits that we determined were no longer probable of being developed. The amount for the three and six months ended June 30, 2026 includes a write-off of $4,545,000 for one development opportunity that the Company determined was no longer probable. The amount for the six months ended June 30, 2025 includes a write-off of $3,668,000 for one development opportunity that the Company determined was no longer probable. In addition, the Company incurred costs of $12,367,000 during the three and six months ended June 30, 2026 related to the proposed Merger with Equity Residential. See Note 1, "Organization, Basis of Presentation and Significant Accounting Policies," for more information on the Merger. These costs are included in expensed transaction, development and other pursuit costs, net of recoveries on the accompanying Condensed Consolidated Statements of Operations. These costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

Long-Lived Assets Casualty Loss

For the six months ended June 30, 2026, the Company recognized $4,619,000 of expense from property damage at certain of the Company's communities, reported as casualty and impairment loss on the accompanying Condensed Consolidated Statements of Operations. For the three and six months ended June 30, 2025, the Company recognized $858,000 for the property damage to one of the Company's communities, reported as casualty and impairment loss on the accompanying Condensed Consolidated Statements of Operations. The expense for the six months ended June 30, 2026 relates to damage from a water pipe break at a community in New Jersey and damage at communities throughout the portfolio from winter storms. The expense for the three and six months ended June 30, 2025 relates to damage from a water pipe break at a community in Massachusetts.

6. Real Estate Disposition Activities

The following real estate sales occurred during the six months ended June 30, 2026 (dollars in thousands):


Community name	Location	Period of sale	Apartment homes	Gross sales price	Gain on disposition (1)	Commercial square feet
Avalon Sunset Towers	San Francisco, CA	Q1 2026	243	$ 105,000	$ 85,567	—
Avalon White Plains	White Plains, NY	Q1 2026	407	166,000	84,408	—
Avalon The Albemarle	Washington D.C.	Q1 2026	234	69,750	9,713	1,000
Total			884	$ 340,750	$ 179,688	1,000

_________________________________

(1) Gain on disposition was reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Operations.

At June 30, 2026, the Company had one real estate asset that qualified as held for sale.

7. Commitments and Contingencies

Legal Contingencies

The Company recognizes a loss associated with contingent legal matters when the loss is probable and estimable.

owners and/or operators of multifamily housing in the District of Columbia, including the Company, alleging that the defendants violated the District of Columbia Antitrust Act by unlawfully agreeing to use RealPage, Inc. revenue management systems and sharing sensitive data (the “D.C. Antitrust Litigation”). The court has denied the Company's motions to dismiss and for judgment on the pleadings. See Note 12, "Subsequent Events," for further discussion of the D.C. Antitrust Litigation.

On April 23, 2025, the Attorney General of the State of New Jersey and the New Jersey Division of Consumer Affairs filed a lawsuit similar to the D.C. Antitrust Litigation and the Maryland Antitrust Litigation in the U.S. District Court for the District of New Jersey. The lawsuit alleges that RealPage, Inc. and a number of owners and/or operators of multifamily properties in New Jersey, including the Company, violated federal and state antitrust laws and the state consumer fraud law (the “New Jersey Antitrust Litigation”) by unlawfully agreeing to use RealPage, Inc. revenue management systems and other related actions. On July 29, 2025, the Company filed a motion to dismiss. On March 31, 2026, the court granted without prejudice the Company’s motion with respect to the federal and state antitrust claims but denied it with respect to the state consumer fraud claim. On April 14, 2026, the Company filed a motion to reconsider the court’s ruling on the Company’s motion to dismiss the New Jersey Antitrust Litigation insofar as it did not dismiss the remaining state consumer fraud claim.

Lease Obligations

The Company owns seven apartment communities, two commercial properties and one development community located on land subject to ground leases expiring between July 2046 and May 2123. The Company has purchase options for all ground leases expiring prior to 2062. The ground leases for six of the seven apartment communities, the two commercial properties and one development community are operating leases, with rental expense recognized on a straight-line basis over the lease term. In addition, the Company is party to 15 leases for its corporate and regional offices with varying terms through December 2033, all of which are operating leases. During the six months ended June 30, 2026, the Company did not enter into any new ground leases.

As of June 30, 2026 and December 31, 2025, the Company had total operating lease assets of $116,712,000 and $119,888,000, respectively, and lease obligations of $142,601,000 and $145,319,000, respectively, reported as components of right of use lease assets and lease liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheets. The Company incurred costs of $3,842,000 and $3,836,000 for the three months ended June 30, 2026 and 2025, respectively, and $7,766,000 and $7,771,000 for the six months ended June 30, 2026 and 2025, respectively, related to operating leases.

The Company has one apartment community located on land subject to a ground lease and four leases for portions of parking garages adjacent to apartment communities that are finance leases. As of June 30, 2026 and December 31, 2025, the Company had total finance lease assets of $27,429,000 and $27,649,000, respectively, and total finance lease obligations of $19,843,000 and $19,881,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets.

8. Segment Reporting

The Company's segment disclosures present the measure(s) used by the Chief Operating Decision Maker ("CODM") for assessing each segment's performance. The Company's CODM is comprised of several members of its executive management team, including its Chief Executive Officer and President, Chief Financial Officer, Chief Investment Officer, Chief Operating Officer, and Executive Vice President- Portfolio and Asset Management. The CODM uses net operating income ("NOI") as the primary financial measure for Same Store communities and Other Stabilized communities. NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), property management and other indirect operating expenses, net of corporate income, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, loss on extinguishment of debt, net, general and administrative expense, income from unconsolidated investments, Structured Investment Program interest income, depreciation expense, income tax expense (benefit), casualty and impairment loss, gain on sale of communities, other real estate activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis. The commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represent 1.4% of total NOI for both the three months ended June 30, 2026 and 2025 and 1.5% and 1.7% of total NOI for the six months ended June 30, 2026 and 2025, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income and consistent with how the Company's CODM evaluates total NOI.

A reconciliation of NOI to net income for the three and six months ended June 30, 2026 and 2025 is as follows (dollars in thousands):


	For the three months ended June 30,		For the six months ended June 30,
	2026	2025	2026	2025
Net income	$ 156,893	$ 269,855	$ 485,183	$ 506,452
Property management and other indirect operating expenses, net of corporate income	38,483	38,153	76,583	74,254
Expensed transaction, development and other pursuit costs, net of recoveries	19,976	2,493	23,392	7,237
Interest expense, net	70,070	64,801	141,559	124,665
General and administrative expense	27,137	22,997	49,214	42,777
(Income) loss from unconsolidated investments	(7,647)	1,052	(1,120)	2,051
Structured Investment Program interest income	(7,704)	(6,937)	(15,185)	(13,050)
Depreciation expense	232,975	231,730	466,079	449,618
Income tax expense (benefit)	70	(531)	(224)	(647)
Casualty and impairment loss	—	858	4,619	858
Loss (gain) on sale of communities, net	338	(99,457)	(179,574)	(155,926)
Other real estate activity	(223)	(3,637)	(307)	(3,792)
Net operating income from real estate assets sold or held for sale	(1,124)	(15,631)	(4,516)	(33,379)
Net operating income	$ 529,244	$ 505,746	$ 1,045,703	$ 1,001,118

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):


	For the three months ended June 30,		For the six months ended June 30,
	2026	2025	2026	2025
Rental income from real estate assets sold or held for sale	$ 1,570	$ 23,665	$ 7,525	$ 50,407
Operating expenses from real estate assets sold or held for sale	(446)	(8,034)	(3,009)	(17,028)
Net operating income from real estate assets sold or held for sale	$ 1,124	$ 15,631	$ 4,516	$ 33,379

The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2026. Segment information for the three and six months ended June 30, 2026 and 2025 has been adjusted to exclude the real estate assets that were sold from January 1, 2025 through June 30, 2026, or otherwise qualify as held for sale as of June 30, 2026, as described in Note 6, "Real Estate Disposition Activities."


	For the three months ended June 30, 2026
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 716,308	$ 33,897	$ 24,211	$ 774,416
Same Store Operating Expense
Property Taxes	(82,021)			(82,021)
Payroll	(40,582)			(40,582)
Repairs & Maintenance	(40,975)			(40,975)
Utilities	(27,499)			(27,499)
Office Operations	(15,031)			(15,031)
Insurance	(11,343)			(11,343)
Marketing	(5,002)			(5,002)
Same Store Operating Expense	(222,453)	—	—	(222,453)
Non-Same Store Operating Expense	—	(12,523)	(10,196)	(22,719)
Total Expenses	(222,453)	(12,523)	(10,196)	(245,172)
Total NOI	$ 493,855	$ 21,374	$ 14,015	$ 529,244
Gross Real Estate	$ 25,229,174	$ 1,726,436	$ 2,879,771	$ 29,835,381

	For the three months ended June 30, 2025
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 704,387	$ 21,649	$ 8,900	$ 734,936
Same Store Operating Expense
Property Taxes	(79,262)			(79,262)
Payroll	(40,112)			(40,112)
Repairs & Maintenance	(39,198)			(39,198)
Utilities	(25,642)			(25,642)
Office Operations	(16,412)			(16,412)
Insurance	(10,513)			(10,513)
Marketing	(4,945)			(4,945)
Same Store Operating Expense	(216,084)	—	—	(216,084)
Non-Same Store Operating Expense	—	(9,098)	(4,008)	(13,106)
Total Expenses	(216,084)	(9,098)	(4,008)	(229,190)
Total NOI	$ 488,303	$ 12,551	$ 4,892	$ 505,746
Gross Real Estate	$ 24,896,266	$ 1,364,932	$ 1,658,532	$ 27,919,730


	For the six months ended June 30, 2026
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 1,426,169	$ 67,764	$ 42,974	$ 1,536,907
Same Store Operating Expense
Property Taxes	(163,846)	—	—	(163,846)
Payroll	(80,797)	—	—	(80,797)
Repairs & Maintenance	(80,102)	—	—	(80,102)
Utilities	(61,096)	—	—	(61,096)
Office Operations	(31,224)	—	—	(31,224)
Insurance	(21,778)	—	—	(21,778)
Marketing	(8,625)	—	—	(8,625)
Same Store Operating Expense	(447,468)	—	—	(447,468)
Non-Same Store Operating Expense	—	(25,366)	(18,370)	(43,736)
Total Expenses	(447,468)	(25,366)	(18,370)	(491,204)
Total NOI	$ 978,701	$ 42,398	$ 24,604	$ 1,045,703
Gross Real Estate	$ 25,229,174	$ 1,726,436	$ 2,879,771	$ 29,835,381

	For the six months ended June 30, 2025
	Same Store	Other Stabilized	Development / Redevelopment	Total (1) (2)
Total Revenue	$ 1,403,853	$ 31,659	$ 16,820	$ 1,452,332
Same Store Operating Expense
Property Taxes	(156,418)	—	—	(156,418)
Payroll	(79,859)	—	—	(79,859)
Repairs & Maintenance	(77,051)	—	—	(77,051)
Utilities	(55,325)	—	—	(55,325)
Office Operations	(32,350)	—	—	(32,350)
Insurance	(21,033)	—	—	(21,033)
Marketing	(8,687)	—	—	(8,687)
Same Store Operating Expense	(430,723)	—	—	(430,723)
Non-Same Store Operating Expense	—	(13,274)	(7,217)	(20,491)
Total Expenses	(430,723)	(13,274)	(7,217)	(451,214)
Total NOI	$ 973,130	$ 18,385	$ 9,603	$ 1,001,118
Gross Real Estate	$ 24,896,266	$ 1,364,932	$ 1,658,532	$ 27,919,730

__________________________________

(1)

Does not include non-allocated revenue. Non-allocated revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Non-allocated revenue is $1,782 and $1,594 for the three months ended June 30, 2026 and 2025, respectively, and $3,615 and $3,336 for the six months ended June 30, 2026 and 2025, respectively.

(2)

Does not include non-allocated gross real estate and land held for development. Non-allocated gross real estate is $112,539 and $117,894 as of June 30, 2026 and 2025, respectively. Land held for development is $101,508 and $101,066 as of June 30, 2026 and 2025, respectively.

9. Stock-Based Compensation Plans

On May 20, 2026, the stockholders of the Company approved the 2026 Equity Incentive Plan (the "2026 Plan"), which replaced the Company's Second Amended and Restated 2009 Equity Incentive Plan (the "2009 Plan"). The 2026 Plan includes an authorization to issue up to 4,000,000 shares of the Company's common stock, par value $0.01 per share and permits the Company to grant stock options, performance awards, restricted stock units, stock appreciation rights and restricted stock to eligible employees, directors, and other service providers. Shares issued under the 2009 Plan from March 15, 2026 through May 20, 2026 were counted towards the 2026 Plan authorization, which reduced the number of shares available for future grants to 3,999,180. The 2026 Plan will expire on May 20, 2036.

Effective as of the close of business on May 20, 2026, no awards may be granted under the 2009 Plan. The 2009 Plan provided for the same types of equity awards as the 2026 Plan, and would have expired by its terms on May 15, 2027. Outstanding awards previously granted under the 2009 Plan will not be affected by termination of the 2009 Plan, the terms of which shall continue to govern such previously granted awards. In addition to the 3,999,180 shares authorized for issuance under the 2026 Plan as described above, any awards that were outstanding under the 2009 Plan on May 20, 2026 that are subsequently forfeited, canceled, surrendered or terminated (other than by exercise) will become available for awards under the 2026 Plan. Details of the outstanding awards and activity under the 2026 Plan and 2009 Plan for the six months ended June 30, 2026 are presented below.

Stock Options:


	Options	Weighted average exercise price per option
Options Outstanding at December 31, 2025	271,576	$ 183.28
Granted (1)	23,316	179.67
Exercised	(2,444)	180.32
Forfeited	—	—
Expired	—	—
Options Outstanding at June 30, 2026	292,448	$ 183.01
Options Exercisable at June 30, 2026	258,599	$ 182.55

__________________________________

(1)

All options are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

Performance Awards:


	Performance awards	Weighted average grant date fair value per award
Outstanding at December 31, 2025	256,377	$ 199.94
Granted	99,434	173.73
Change in awards based on performance (1)	31,695	198.68
Converted to shares of common stock	(123,221)	198.41
Forfeited	(1,580)	201.43
Outstanding at June 30, 2026	262,705	$ 190.57

__________________________________

(1)

Represents the change in the number of performance awards earned based on performance achievement.


		2026
Total shareholder return metrics		54,687
Financial metrics		44,747
Total granted		99,434


		2026
Dividend yield		4.0%
Estimated volatility over the life of the plan (1)		17.2% - 21.7%
Risk free rate		3.39% - 3.43%
Estimated performance award value based on total shareholder return measure		$168.69

__________________________________

(1)

Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

Restricted Stock:


	Restricted stock shares	Weighted average grant date fair value per share
Outstanding at December 31, 2025	167,179	$ 195.76
Granted	111,224	179.73
Vested	(88,553)	189.43
Forfeited	(1,518)	192.57
Outstanding at June 30, 2026	188,332	$ 189.29

Total employee stock-based compensation cost recognized in income was $13,816,000 and $14,188,000 for the six months ended June 30, 2026 and 2025, respectively, and total capitalized stock-based compensation cost was $5,884,000 and $6,630,000 for the six months ended June 30, 2026 and 2025, respectively. At June 30, 2026, total unrecognized compensation cost was $46,174,000 for unvested restricted stock, stock options and performance awards, which is expected to be recognized over a weighted average period of 2.2 years. The Company reverses any previously recognized compensation cost for forfeitures as they occur.

10. Related Party Arrangements

Unconsolidated Entities

The Company manages unconsolidated real estate entities and provides other real estate related services to third parties, for which it receives asset management, property management, construction, development and redevelopment fee revenue. From these entities, the Company earned fees of $1,782,000 and $1,594,000 for the three months ended June 30, 2026 and 2025, respectively, and $3,615,000 and $3,336,000 for the six months ended June 30, 2026 and 2025. In addition, the Company had outstanding receivables associated with its property and construction management roles of $915,000 and $1,395,000 as of June 30, 2026 and December 31, 2025, respectively.

Director Compensation

The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock units in the amount of $692,000 and $604,000 for the three months ended June 30, 2026 and 2025, respectively, and $1,383,000 and $1,192,000 for the six months ended June 30, 2026 and 2025, respectively, as a component of general and administrative expense on the accompanying Condensed Consolidated Statements of Operations. Deferred compensation relating to these restricted stock grants and deferred stock units to non-employee directors was $2,017,000 and $910,000 on June 30, 2026 and December 31, 2025, respectively, reported as a component of prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets.

11. Fair Value

Financial Instruments Carried at Fair Value

Derivative Financial Instruments

Hedging Derivatives are carried at fair value in the Company's financial statements. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions and monitors the credit ratings of counterparties and the exposure of the Company to any single entity. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. The Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, such as interest rate, term to maturity and volatility. The Hedging Derivatives credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, which the Company concluded are not significant. As a result, the Company determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following table summarizes the consolidated derivative positions at June 30, 2026 (dollars in thousands):


	Non-designated Hedges	Cash Flow Hedges
	Interest Rate Caps	Interest Rate Swaps
Notional balance	$ 357,289	$ 700,000
Weighted average interest rate (1)	4.3%	N/A
Weighted average capped/swapped interest rate	6.7%	3.6%
Earliest maturity date	July 2026	January 2027
Latest maturity date	May 2029	April 2029

____________________________________

(1)

For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.

During the six months ended June 30, 2026, the Company entered into $150,000,000 of forward starting interest rate swap agreements designated as cash flow hedges of interest rate variability on future debt issuance activity through December 31, 2026. The Company expects to cash settle the swaps and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the hedging impact from these positions will then be recognized over the life of the issued debt as a yield adjustment.

The Company had certain derivatives not designated as hedges during the three and six months ended June 30, 2026 and 2025, for which fair value changes during each of the respective periods were not material.

The Company anticipates reclassifying approximately $5,189,000 of net hedging gains from accumulated other comprehensive income into earnings within the next 12 months as an offset to the hedged item during this period.

Financial Instruments Not Carried at Fair Value

Cash, Cash Equivalents and Restricted Cash

Other Financial Instruments

Equity Securities

The Company has direct equity investments in third-party property technology companies. These investments are accounted for using the measurement alternative and are valued at the market price of observable transactions. During the three months ended June 30, 2026 and 2025, the Company recognized unrealized gains of $170,000 and unrealized losses of $1,203,000, respectively, and unrealized losses of $6,080,000 and $2,445,000 during the six months ended June 30, 2026 and 2025, respectively, related to these investments, which was reported as a component of loss from unconsolidated investments on the accompanying Condensed Consolidated Statements of Operations. As of June 30, 2026, the Company had recorded cumulative fair value adjustments of $61,429,000 for net unrealized gains on equity securities.

Indebtedness

Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis


	June 30, 2026
Description	Total Fair Value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Description	Total Fair Value		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Investments
Notes receivable, net	$ 293,662	$ —	$ 293,662	$ —
Non-designated hedges
Interest rate caps	20	—	20	—
Interest rate swaps - assets	9,419	—	9,419	—
Total Assets	$ 303,101	$ —	$ 303,101	$ —

Liabilities
Indebtedness
Fixed rate unsecured debt	6,482,606	6,482,606	—	—
Mortgage notes payable, Commercial Paper and Term Loan	2,136,623	—	2,136,623	—
Total Liabilities	$ 8,619,229	$ 6,482,606	$ 2,136,623	$ —


	December 31, 2025
Description	Total Fair Value	Quoted Prices in Active Markets for Identical Asset (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Description	Total Fair Value		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets
Investments
Notes receivable, net	$ 259,051	$ —	$ 259,051	$ —
Total Assets	$ 259,051	$ —	$ 259,051	$ —

Liabilities
Interest rate swaps - liabilities	$ 4,046	$ —	$ 4,046	$ —
Indebtedness
Fixed rate unsecured debt	7,025,656	7,025,656	—	—
Mortgage notes payable, Commercial Paper and Term Loan	1,970,177	—	1,970,177	—
Total Liabilities	$ 8,999,879	$ 7,025,656	$ 1,974,223	$ —

12. Subsequent Events

In July 2026, the Company had the following activity:

•

The Company sold eaves Tysons Corner, located in Vienna, VA, containing 217 apartment homes for $68,050,000.

•

The Company settled the remaining outstanding equity forward contracts entered into during 2024, issuing 920,000 shares of common stock at $219.52 per share for proceeds of $201,958,000.

•

On July 16, 2026, the Company and the District of Columbia both filed motions for summary judgment in the D.C. Antitrust Litigation. See Note 7, "Commitments and Contingencies," for further discussion of the D.C. Antitrust Litigation.