Form 8-K

8-K — EQUITY RESIDENTIAL

Accession: 0001193125-26-328612

Filed: 2026-07-31

Period: 2026-07-31

CIK: 0000906107

SIC: 6798 (REAL ESTATE INVESTMENT TRUSTS)

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — eqr-20260731.htm (Primary)

EX-23.1 (eqr-ex23_1.htm)

EX-99.1 (eqr-ex99_1.htm)

EX-99.2 (eqr-ex99_2.htm)

EX-99.3 (eqr-ex99_3.htm)

EX-99.4 (eqr-ex99_4.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: eqr-20260731.htm · Sequence: 1

8-K

00009311820000906107true0000906107eqr:ErpOperatingLimitedPartnershipMember2026-07-312026-07-310000906107eqr:ErpOperatingLimitedPartnershipMembereqr:SevenPointFiveSevenPercentNotesDueAugustFifteenTwoThousandTwentySixMember2026-07-312026-07-3100009061072026-07-312026-07-31

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

EX-23.1

Filename: eqr-ex23_1.htm · Sequence: 2

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

EX-99.1

Filename: eqr-ex99_1.htm · Sequence: 3

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EX-99.2

Filename: eqr-ex99_2.htm · Sequence: 4

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.

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. The Company generally views acquisitions of operating communities as asset acquisitions, which results in the capitalization of acquisition costs and the allocation of purchase price to the assets acquired and liabilities assumed, based on the relative fair value of the respective assets and liabilities.

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

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. In addition, if the Company determines a Development Right is no longer probable, the Company recognizes any necessary expense to write down its basis in the Development Right. The Company expensed costs related to development pursuits not yet considered probable for development and the abandonment of Development Rights, as well as costs incurred in pursuing the acquisition or disposition of assets for which such acquisition and disposition activity did not occur, in the amounts

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:

i.

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;

v.

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:

F-29

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.

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.

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

_________________________________

(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.

F-69

EX-99.3

EX-99.3

Filename: eqr-ex99_3.htm · Sequence: 5

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

1

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.

2

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.

3

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.

4

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

5

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.

6

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

7

Cash paid during the period for interest, net of amount capitalized

$ 60,407

$ 40,160

See accompanying notes to Condensed Consolidated Financial Statements.

8

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.

9

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

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,

10

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

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 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 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

11

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

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.

12

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 (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

13

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)

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 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.

14

Recently Issued and Adopted Accounting Standards

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 $14,557,000 and $10,479,000 for the three months ended March 31, 2026 and 2025, respectively.

15

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.

16

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.

17

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:

i.

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

v.

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

18

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.

19

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.

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

20

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.

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.

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.

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.

21

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 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. 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, 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.

22

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 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 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."

23

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.

24

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

25

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:

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.

26

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.

27

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

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

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.

28

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):

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)

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)

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

$ —

29

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.

30

EX-99.4

EX-99.4

Filename: eqr-ex99_4.htm · Sequence: 6

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

1

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.

2

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.

3

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.

4

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

5

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.

6

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

7

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.

8

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.

•

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 $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.

9

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.

10

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

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

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.

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

11

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 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

12

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

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.

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.

13

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 (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):

14

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.

15

(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 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

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 $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.

16

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)

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 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 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.

17

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.

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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:

i.

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;

v.

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

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 June 30,

19

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.

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 expense of $7,609,000 and $2,493,000 for the three months ended June 30, 2026 and 2025,

20

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.

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

21

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 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. Maryland filed an amended complaint on June 5, 2026, and, on June 29, 2026, the court denied as moot the Company’s motion to dismiss the original complaint due to Maryland’s amended complaint.

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.

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.

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.

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 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.

22

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 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. 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, 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):

23

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 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 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."

24

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

25

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.

26

(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.

27

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

54,687

Financial metrics

44,747

Total granted

99,434

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:

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

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.

28

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.

29

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

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

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 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.

30

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):

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)

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

$ —

31

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)

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 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.

32

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- Definition

Local phone number for entity.

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- Definition

Boolean flag that is true only for a security having no trading symbol.

+ References

No definition available.

+ Details

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Exchange Act

-Number 240

-Section 13e

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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14d

-Subsection 2b

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- Definition

Title of a 12(b) registered security.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b

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- Definition

Name of the Exchange on which a security is registered.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection d1-1

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Data Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14a

-Subsection 12

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- Definition

Trading symbol of an instrument as listed on an exchange.

+ References

No definition available.

+ Details

Name:

dei_TradingSymbol

Namespace Prefix:

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Data Type:

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Balance Type:

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Period Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 230

-Section 425

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