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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):
June 8, 2026
AVALONBAY
COMMUNITIES, INC.
(Exact name of registrant as specified in its
charter)
|
Maryland
(State or other jurisdiction of
incorporation or organization) |
1-12672
(Commission File Number) |
77-0404318
(I.R.S. Employer
Identification No.) |
4040 Wilson Blvd., Suite 1000
Arlington,
Virginia 22203
(Address of principal executive offices)(Zip
code)
(703)
329-6300
(Registrant’s telephone number, including
area code)
(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:
x 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 Stock, par value $0.01 per share |
|
AVB |
|
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. ¨
As previously disclosed, on May 20, 2026,
AvalonBay Communities, Inc., a Maryland corporation (“AvalonBay"), entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Equity Residential, a Maryland real estate investment trust (“Equity Residential”), ERP Operating Partnership,
an Illinois limited partnership, and Canopy Merger Sub LLC, a Maryland limited liability company and a direct wholly owned subsidiary
of Equity Residential. The Merger Agreement provides for the combination of AvalonBay and Equity Residential in an all-stock merger-of-equals
transaction upon the terms and subject to the conditions set forth in the Merger Agreement (the “Merger”). The combined company
will operate under a new name to be announced prior to the closing of the Merger and the other transactions contemplated by the Merger
Agreement (the “Closing”).
On June 8, 2026, AvalonBay and Equity Residential
issued a joint press release announcing members of the executive leadership team for the combined company following the Closing. A copy
of the joint press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
|
Description |
| 99.1 |
|
Joint Press Release, dated June 8, 2026. |
| 104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Cautionary Statement Regarding Forward-Looking Statements
This
communication contains “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 AvalonBay Communities, Inc. (“AvalonBay”)
and Equity Residential operate, as well as beliefs and assumptions of AvalonBay and Equity Residential. 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 AvalonBay and Equity Residential expects or anticipates will occur in
the future are forward-looking statements, including statements relating to any possible transaction between AvalonBay and Equity Residential,
multifamily market conditions, development, redevelopment, acquisition or disposition activity, general conditions in the geographic areas
where AvalonBay and Equity Residential operate and AvalonBay’s and Equity Residential’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 AvalonBay’s and Equity Residential’s ability to obtain
the required respective stockholder 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 AvalonBay’s and Equity Residential’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 AvalonBay,
Equity Residential 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 AvalonBay and
Equity Residential management from ongoing business operations, will harm AvalonBay’s and Equity Residential’s businesses
during the pendency of the proposed transaction or otherwise; (vii) certain restrictions during the pendency of the business combination
that may impact AvalonBay’s and Equity Residential’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 AvalonBay and Equity Residential to pay a termination fee; (x) the effect
of the announcement of the proposed transaction on the ability of AvalonBay and Equity Residential 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 AvalonBay’s and Equity Residential’s financial performance;
(xiv) other risks related to the completion of the proposed transaction and actions related thereto; (xv) legislative, regulatory
and economic developments, including the level of new multifamily communities construction and development, government regulations and
competition; (xvi) 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; (xvii) changes in global financial markets, interest rates and foreign
currency exchange rates; (xviii) increased or unanticipated competition affecting AvalonBay’s and Equity Residential’s properties;
(xix) risks associated with acquisitions, dispositions, development and redevelopment of properties; (xx) increased costs of labor and
construction material; (xxi) maintenance of real estate investment trust status, tax structuring and changes in income tax laws and
rates; (xxii) environmental uncertainties, including risks of natural disasters; (xxiii) those risks and uncertainties set forth in AvalonBay’s
and Equity Residential’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 AvalonBay and Equity Residential, as the case may be, with the Securities and Exchange Commission (the “SEC”)
from time to time, which are available via the SEC’s website at www.sec.gov; and (xxiv) those risks that will be described in the
Registration Statement and Joint Proxy Statement/Prospectus (each as defined below) that will be filed with the SEC in connection with
the proposed transaction and available from the sources indicated below. 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 AvalonBay nor Equity Residential 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 AvalonBay’s and Equity Residential’s underlying assumptions
prove to be incorrect, AvalonBay’s, Equity Residential’s and the combined company’s actual results may vary materially
from what AvalonBay and Equity Residential may have expressed or implied by these forward-looking statements. AvalonBay and Equity Residential
caution not to place undue reliance on any of AvalonBay’s or Equity Residential’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 AvalonBay
or Equity Residential.
No Offer or Solicitation
This communication 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.
Important Additional Information and Where to Find It
In
connection with the proposed transaction between AvalonBay and Equity Residential, Equity Residential intends to file with the SEC a registration
statement on Form S-4 (the “Registration Statement”) that will include a joint proxy statement of AvalonBay and Equity Residential
that also constitutes a prospectus of Equity Residential (the “Joint Proxy Statement/Prospectus”). A definitive Joint Proxy
Statement/Prospectus will be mailed to AvalonBay’s stockholders and Equity Residential’s shareholders seeking their
respective approval of the proposed transaction and other related matters. Each of AvalonBay and Equity Residential may also file other
relevant documents with the SEC regarding the proposed transaction. This communication is not a substitute for the Registration Statement,
Joint Proxy Statement/Prospectus or any other document that AvalonBay and Equity Residential (as applicable) may file with the SEC in
connection with the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF AVALONBAY
AND EQUITY RESIDENTIAL ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS
WHEN THEY BECOME AVAILABLE WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus
(when they become available) and other documents filed with the SEC by AvalonBay and Equity Residential, which contain important information,
through the website maintained by the SEC at www.sec.gov. The documents filed by AvalonBay with the SEC may be obtained free of charge
by accessing the “Investor” section of AvalonBay’s website at www.avalonbay.com or by writing to AvalonBay, 4040 Wilson
Blvd., Suite 1000, Arlington, Virginia 22203, Attention: Corporate Secretary (Legal Department) or by email at investor_relations@avalonbay.com.
The documents filed by Equity Residential with the SEC may be obtained free of charge by accessing “Filings – SEC Filings”
in the “Investor” section of Equity Residential’s website at www.equityapartments.com, by writing to Equity Residential
– Investor Relations, Two North Riverside Plaza, Suite 500, Chicago, Illinois 60606, by telephone at 1-888-879-6356 or by email
at investorrelations@eqr.com.
Participants in the Solicitation
AvalonBay,
Equity Residential, and certain of their respective trustees, directors and executive officers may be deemed to be participants in the
solicitation of proxies from AvalonBay’s and Equity Residential’s stockholders in respect of the proposed transaction. Information
about the directors and executive officers of AvalonBay, including a description of their direct or indirect interests, by security holdings
or otherwise, is set forth in AvalonBay’s proxy statement for its 2026 Annual Meeting of Stockholders under the headings “Director
Nominees,” “Transactions with Related Persons, Promoters and Certain Control Persons,” “Director Compensation,”
“Director Compensation Table,” “Compensation Discussion and Analysis,” “Executive Compensation Tables”
and “Officers, Stock Ownership and Other Information,” which was filed with the SEC on April 6, 2026,
and in AvalonBay’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the
SEC on February 27, 2026.
Information about the trustees and executive officers of Equity Residential, including a description of their direct or indirect interests,
by security holdings or otherwise, is set forth in Equity Residential’s proxy statement for its 2026 Annual Meeting of Shareholders
under the headings “Biographical Information and Qualifications of Trustees,” “Biographical Information of Executives,”
“Common Share Ownership of Trustees and Executives,” “Compensation Discussion and Analysis,” “Executive
Compensation” and “Trustee Compensation,” which was filed with the SEC on April 14, 2026,
and in Equity Residential’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed
with the SEC on February 13, 2026.
To the extent holdings of AvalonBay’s securities by its directors and executive officers have changed since the amounts set forth
in AvalonBay’s definitive proxy statement for its 2026 Annual meeting of Stockholders or the holdings of Equity Residential’s
securities by its trustees or executive officers have changed since the amounts set forth in Equity Residential’s definitive proxy
statement for its 2026 Annual Meeting of Shareholders, such changes have been or will be reflected on an Initial Statement of Beneficial
Ownership of Securities on Form 3, Statement of Changes in Beneficial Ownership on Form 4, or Annual Statement of Changes in Beneficial
Ownership on Form 5, in each case filed with the SEC and available on the SEC’s website at www.sec.gov. Other information regarding
the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise,
will be contained in the Registration Statement, the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the
SEC regarding the proposed transaction when such materials become available. Investors and security holders should read the Registration
Statement and the Joint Proxy Statement/Prospectus carefully when they become available before making any voting or investment decisions.
Investors may obtain free copies of these documents from AvalonBay or Equity Residential using the sources indicated above.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
AVALONBAY COMMUNITIES, INC. |
| |
|
|
| Dated: June 8, 2026 |
By: |
/s/ Kevin P. O’Shea |
| |
|
Kevin P. O’Shea |
| |
|
Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
AvalonBay Communities and Equity Residential Announce Leadership
Team for Combined Company
Appointments to take effect upon completion of previously announced
merger of equals
CHICAGO,
IL & ARLINGTON, VA (BUSINESS WIRE) Equity Residential (NYSE: EQR) and AvalonBay Communities, Inc. (NYSE: AVB) today
announced the executive leadership team that will lead the combined company following the closing of the previously announced merger of
equals, expected in the second half of 2026.
"This
leadership team brings unmatched expertise, complementary strengths, and a collective drive to create one of the country’s great
real estate companies. We are excited to take the next step as leaders in creating a new and stronger company, drawing on the foundational
strengths and deep talent across both organizations. I am honored to lead this group into this next chapter," said Benjamin
W. Schall, President and Chief Executive Officer of AvalonBay Communities, who will serve as President and Chief Executive Officer of
the combined company.
"I am incredibly proud of the leadership team we have assembled
for this new organization. With this combination of exceptional leaders from both organizations, we are creating a powerhouse of talent
that is uniquely positioned to drive innovation, operational excellence, and long-term value for our shareholders, customers, and employees
in the dynamic markets we serve," said Steve Sterrett, Board Chair of the combined company.
The following executives will report directly to Mr. Schall as of the
closing:
Michael
Manelis — Executive Vice President and Chief Operating Officer
Mr. Manelis will direct the day-to-day operations of the
combined company's portfolio. His responsibilities will span property operations, including leasing, maintenance, and engineering; technology;
centralized services; and revenue management and marketing, among other operational functions. Michael currently serves as Chief Operating
Officer of Equity Residential.
Kevin
O'Shea — Executive Vice President and Chief Financial Officer
Mr. O'Shea will oversee the combined company's financial
foundation, with responsibility for the balance sheet, capital markets activity, investor relations, and financial reporting and controls.
Kevin currently serves as Chief Financial Officer of AvalonBay.
Matthew
Birenbaum — Executive Vice President and Chief Development Officer
Mr. Birenbaum will lead all aspects of the combined
company's development activities, including oversight of our regional development and construction teams, and chair the combined company’s
Management Investment Committee. Matt currently serves as Chief Investment Officer of AvalonBay.
Sean Breslin
— Executive Vice President and Chief Investment and Growth Officer
Mr. Breslin will lead the combined company's investments
platform, including acquisitions, dispositions, capital partnerships, and new business opportunities. Data analytics and market research
will also report to him. Sean currently serves as Chief Operating Officer of AvalonBay, with prior experience in asset management, investments,
and fund management.
Scott
Fenster — Executive Vice President, General Counsel and Corporate Secretary
Mr. Fenster will lead the combined company's
legal function, including oversight of regulatory affairs. Scott currently serves as Executive Vice President, General Counsel and Corporate
Secretary of Equity Residential.
Pamela
Thomas — Executive Vice President, Portfolio and Asset Management
Ms. Thomas will lead portfolio and asset management
for the combined company, identifying operational and investment opportunities across the portfolio. She will also oversee capital expenditure
initiatives, sustainability, and retail and mixed-use activities, along with the management of joint venture relationships. Pamela currently
serves as Executive Vice President of Portfolio and Asset Management at AvalonBay.
Alaine
Walsh — Executive Vice President, Human Capital and Administration
Ms. Walsh will build the people infrastructure of
the combined company, leading human resources, compensation, learning and development, and talent development across the organization.
Alaine currently serves as Executive Vice President, Human Capital and Administration at AvalonBay.
In addition to the above, Ted Schulman, will serve as Executive
Vice President of Legal Affairs, working closely with Mr. Schall and Mr. Fenster through the integration process, before transitioning
to a senior advisor role. Ted currently serves as Executive Vice President and General Counsel of AvalonBay.
Transaction Timeline
On May 21, 2026, Equity Residential and AvalonBay Communities announced
a definitive agreement to combine in an all-stock merger of equals to create one of the country's leading real estate companies with more
than 180,000 rental apartments and a pro forma enterprise value of approximately $69 billion. The transaction is expected to close in
the second half of 2026, subject to shareholder approval by both AvalonBay and Equity Residential and satisfaction of other customary
closing conditions. The combined company will be dual headquartered in Arlington, VA and Chicago, IL and will operate under a new name
to be announced at closing.
About Equity Residential
Equity Residential
is committed to creating communities where people thrive. The Company, a member of the S&P 500, owns and manages 312 properties consisting
of 85,211 apartment units in dynamic metro areas across the U.S. with a primary concentration in major coastal markets, diversified by
a targeted presence in the high-growth metro areas of Atlanta, Austin, Dallas/Ft. Worth and Denver. For more information on Equity Residential,
please visit our website at www.equityapartments.com.
About AvalonBay Communities
AvalonBay
Communities is committed to creating a better way to live. The Company, a member of the S&P 500, owns, develops, and manages approximately
90,000 apartment homes across the U.S., with a primary concentration in major coastal markets including Boston, the New York/New Jersey
metro area, the Mid-Atlantic, Seattle, and Northern and Southern California, diversified by a targeted presence in the high-growth markets
of North Carolina, Southeast Florida, Texas, and Colorado. For more information on AvalonBay Communities, please visit our website at
www.avalonbay.com
Media Contacts
Tara Vales
(703) 329-6300
media_relations@avalonbay.com
Investor Contacts
Equity Residential
Marty McKenna
mmckenna@EQR.com
(312) 928-1901
AvalonBay Communities, Inc.
Matthew Grover
Matthew_Grover@AvalonBay.com
(703) 317-4524
Cautionary Statement Regarding Forward-Looking Statements
This communication
contains “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 Communities, Inc. (“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 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) other risks related to the completion of the proposed transaction and actions related thereto; (xv) legislative, regulatory
and economic developments, including the level of new multifamily communities construction and development, government regulations and
competition; (xvi) 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; (xvii) changes in global financial markets, interest rates and foreign
currency exchange rates; (xviii) increased or unanticipated competition affecting Equity Residential’s and AvalonBay’s properties;
(xix) risks associated with acquisitions, dispositions, development and redevelopment of properties; (xx) increased costs of labor and
construction material; (xxi) maintenance of Real Estate Investment Trust status, tax structuring and changes in income tax laws and
rates; (xxii) environmental uncertainties, including risks of natural disasters; (xxiii) 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 (the “SEC”)
from time to time, which are available via the SEC’s website at www.sec.gov; and (xxiv) those risks that will be described in the
Registration Statement and Joint Proxy Statement/Prospectus (each as defined below) that will be filed with the SEC in connection with
the proposed transaction and available from the sources indicated below. 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 communication 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.
Important Additional Information and Where to Find It
In connection
with the proposed transaction between Equity Residential and AvalonBay, Equity Residential intends to file with the SEC a registration
statement on Form S-4 (the “Registration Statement”) that will include a joint proxy statement of Equity Residential and AvalonBay
that also constitutes a prospectus of Equity Residential (the “Joint Proxy Statement/Prospectus”). A definitive Joint Proxy
Statement/Prospectus will be mailed to Equity Residential’s shareholders and AvalonBay’s stockholders seeking their
respective approval of the proposed transaction and other related matters. Each of Equity Residential and AvalonBay may also file other
relevant documents with the SEC regarding the proposed transaction. This communication is not a substitute for the Registration Statement,
Joint Proxy Statement/Prospectus or any other document that Equity Residential or AvalonBay (as applicable) may file with the SEC in connection
with the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF Equity
Residential AND AvalonBay ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS
WHEN THEY BECOME AVAILABLE WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus
(when they become available) and other documents filed with the SEC by Equity Residential and AvalonBay, which contain important information,
through the website maintained by the SEC at www.sec.gov. The documents filed by Equity Residential with the SEC may be obtained free
of charge by accessing “Filings – SEC Filings” in the “Investor” section of Equity Residential’s website
at www.equityapartments.com, by writing to Equity Residential – Investor Relations, Two North Riverside Plaza, Suite 500, Chicago,
Illinois 60606, by telephone at 1-888-879-6356 or by email at investorrelations@eqr.com. The documents filed by AvalonBay with the SEC
may be obtained free of charge by accessing the “Investors” section of AvalonBay’s website at www.avalonbay.com or by
writing to AvalonBay, 4040 Wilson Blvd., Suite 1000, Arlington, Virginia 22203, Attention: Corporate Secretary (Legal Department) or by
email at investor_relations@avalonbay.com.
Participants in the Solicitation
Equity Residential,
AvalonBay, and certain of their respective trustees, directors and executive officers may be deemed to be participants in the solicitation
of proxies from Equity Residential’s and AvalonBay’s shareholders in respect of the proposed transaction. Information about
the directors and executive officers of AvalonBay, including a description of their direct or indirect interests, by security holdings
or otherwise, is set forth in AvalonBay’s proxy statement for its 2026 Annual Meeting of Stockholders under the headings “Director
Nominees,” “Transactions with Related Persons, Promoters and Certain Control Persons,” “Director Compensation,”
“Director Compensation Table,” “Compensation Discussion and Analysis,” “Executive Compensation Tables”
and “Officers, Stock Ownership and Other Information,” which was filed with the SEC on April 6, 2026,
and in AvalonBay’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the
SEC on February 27, 2026.
Information about the trustees and executive officers of Equity Residential, including a description of their direct or indirect interests,
by security holdings or otherwise, is set forth in Equity Residential’s proxy statement for its 2026 Annual Meeting of Shareholders
under the headings “Biographical Information and Qualifications of Trustees,” “Biographical Information of Executives,”
“Common Share Ownership of Trustees and Executives,” “Compensation Discussion and Analysis,” “Executive
Compensation” and “Trustee Compensation,” which was filed with the SEC on April 14, 2026,
and in Equity Residential’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed
with the SEC on February 13, 2026.
To the extent holdings of Equity Residential’s securities by its trustees or executive officers have changed since the amounts set
forth in Equity Residential’s definitive proxy statement for its 2026 Annual Meeting of Shareholders or the holdings of AvalonBay’s
securities by its directors or executive officers have changed since the amounts set forth in AvalonBay’s definitive proxy statement
for its 2026 Annual Meeting of Stockholders, such changes have been or will be reflected on an Initial Statement of Beneficial Ownership
of Securities on Form 3, Statement of Changes in Beneficial Ownership on Form 4, or Annual Statement of Changes in Beneficial Ownership
on Form 5, in each case filed with the SEC and available on the SEC’s website at www.sec.gov. Other information regarding the participants
in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained
in the Registration Statement, the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC regarding the
proposed transaction when such materials become available. Investors and security holders should read the Registration Statement and the
Joint Proxy Statement/Prospectus carefully when they become available before making any voting or investment decisions. Investors may
obtain free copies of these documents from Equity Residential or AvalonBay using the sources indicated above.
