Pending Merger

On May 20, 2026, EQR, ERPOP, AvalonBay and Canopy Merger Sub LLC, a direct, wholly owned subsidiary of EQR (“Merger Sub”), entered into an agreement and plan of merger (the “Merger Agreement”), which provides for the combination of EQR and AvalonBay in a merger of equals transaction.

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 ERPOP 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 EQR (the “Merger”). Each of the Board of Trustees of EQR and the Board of Directors of AvalonBay has unanimously approved or adopted, as applicable, the Merger Agreement and the transactions contemplated by the Merger Agreement.

The Merger Agreement provides that each share of common stock, par value $0.01 per share, of AvalonBay (“AvalonBay Common Stock”), issued and outstanding immediately prior to the Effective Time (other than certain excluded shares described in the Merger Agreement) will be converted into the right to receive 2.793 Common Shares and cash in lieu of fractional shares, if any (the “Merger Consideration”). Upon completion, legacy EQR shareholders are expected to own approximately 49% of the combined company, and legacy AvalonBay stockholders are expected to own approximately 51%.

The transaction will be accounted for as a reverse acquisition under the business combination accounting rules in which EQR is considered the legal acquirer because EQR issues 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, EQR’s historical assets and liabilities will be recorded at estimated fair value as of the closing date, and the combined financial statements will present AvalonBay’s historical balances and results.

The preliminary purchase price and the amount of expected transaction costs are both subject to change until the closing date. To fund the expected transaction costs and planned refinancing of existing debt, ERPOP entered into a commitment letter on May 20, 2026 for a senior unsecured bridge loan facility of up to $2.0 billion. Borrowings under the facility will initially bear interest at a variable rate of SOFR plus 0.725% per annum (subject to adjustments based on credit ratings and time outstanding) plus additional fees, with a maturity of 364 days following the closing of the Merger. The exact timing and amount of any borrowings remain undetermined. The completion of the Merger is not conditioned upon the availability of the bridge facility or any other financing. See Note 8 for additional discussion.

Following the closing, the combined company will operate under a new name and will have dual headquarters in Chicago, Illinois and Arlington, Virginia. The Board of Trustees of the combined company will consist of 14 members, composed of seven members from each of the Board of Trustees of EQR and the Board of Directors of AvalonBay.

EQR and AvalonBay expect to complete the Merger in the second half of 2026, subject to the satisfaction or waiver of customary closing conditions, including the approval of the issuance of shares of the Company in connection with the Merger (the “Share Issuance”) by the Company’s shareholders, the approval of the Merger by the AvalonBay stockholders and the absence of any injunction or order by any court or other governmental entity prohibiting or making illegal the Merger. However, EQR and AvalonBay cannot predict the actual date on which the Merger will be completed because completion is subject to conditions beyond their control, and it is possible that such conditions could result in the Merger being completed later or not being completed at all.

In connection with the pending Merger, the Company has engaged financial advisors whose compensation is substantially success-based and substantially contingent upon the closing of the transaction.

The Merger Agreement also contains a reciprocal termination fee framework. Under specified circumstances, EQR may be required to pay AvalonBay a termination fee of approximately $1.005 billion, and under specified circumstances AvalonBay may be required to pay EQR a termination fee of approximately $1.070 billion.

The pending Merger will constitute a change in control under the Company’s employee benefit and share incentive plans. The Company maintains change in control agreements with its executive officers that provide for lump-sum cash severance, prorated incentive grants and continuous welfare benefits if the executive experiences a qualifying termination within 24 to 36 months following

the change in control. Certain post-closing management retention equity awards and cash transaction bonuses have also been authorized under the terms of the Merger Agreement.

Commitments

Real Estate Development Commitments

As of June 30, 2026, the Company has both consolidated and unconsolidated real estate projects under development. The following table summarizes the gross remaining total project costs for the Company’s projects under development at June 30, 2026 (total project costs remaining in thousands):

We have entered into, and may continue in the future to enter into, joint venture agreements with third-party partners for the development of multifamily rental properties. The joint venture agreements with each development partner include buy-sell provisions that provide the right, but not the obligation, for the Company to acquire each respective partner’s interests or sell its interests at any time following the occurrence of certain pre-defined events described in the joint venture agreements. See Note 5 for additional discussion.

Other Commitments

We have entered into, and may continue in the future to enter into, real estate technology and other real estate fund investments. As of June 30, 2026, the Company has invested in eleven separate such investments totaling $53.0 million with aggregate remaining commitments of approximately $15.0 million.

Contingencies

Litigation and Legal Matters

The Company, as an owner of real estate, is subject to various federal, state and local laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future.

The Company is involved in various pending and threatened legal proceedings which arise in the ordinary course of business. The Company evaluates these litigation matters on an ongoing basis, but in no event less than quarterly, in assessing the adequacy of its accruals and disclosures. For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, the Company records new accruals and/or adjusts existing accruals that represent its best estimate of the loss incurred based on the facts and circumstances known at that time. As of June 30, 2026 and December 31, 2025, the Company’s litigation accruals approximated $43.1 million and $70.6 million, respectively, and are included in other liabilities in the consolidated balance sheets. Actual losses may differ materially from the amounts noted above and the ultimate outcome of these legal proceedings is generally not yet determinable. As of June 30, 2026 and December 31, 2025, the Company does not believe there is any litigation pending or threatened against it that, either individually or in the aggregate and inclusive of the matters accrued for as noted above and the matters discussed below, may reasonably be expected to have a material adverse effect on the Company and its financial condition.

The Company has been named as a defendant in a number of cases filed by private plaintiffs in late 2022 and 2023 alleging antitrust violations by RealPage, Inc., a seller of revenue management software products, and various owners and/or operators of multifamily housing, including us, that have utilized these products. The complaints allege collusion among the defendants to illegally fix and inflate the pricing of multifamily rents and seek monetary damages, injunctive relief, fees and costs. All of the cases except for two have been consolidated into a single putative class action in the United States District Court for the Middle District of Tennessee. On December 28, 2023, motions to dismiss this consolidated action, filed by RealPage, Inc. as well as us and our multifamily co-defendants, were denied by the Court and the case is proceeding. On April 13, 2026, the Company entered into a settlement agreement to fully resolve the consolidated putative class action litigation at an amount totaling $56.0 million. On May 12, 2026, the Company funded the $56.0 million to the claims administrator in accordance with the terms of the settlement agreement, and on May 22, 2026,

the settlement received preliminary approval from the court. It remains subject to final court approval. The Company also continues to vigorously defend two other cases with similar allegations filed by the District of Columbia and the State of Maryland, respectively, against RealPage, Inc. and a number of multifamily owners and/or operators, including us, and no assurance can be given that similar additional cases will not be filed in the future. The resolution of these proceedings cannot be predicted with certainty.

The Company is named as a defendant in a class action in the United States District Court for the Northern District of California filed in 2016 which alleges that the amount of late fees charged by the Company were improperly determined under California law. The plaintiffs are seeking monetary damages and other relief. On April 8, 2024, the Court issued certain findings of facts and conclusions of law that are adverse to the Company’s legal position. During the fourth quarter of 2025, the parties reached a settlement in principle to fully resolve these matters at an amount approximating $42.7 million, of which $2.7 million was funded to the claims administrator following final court approval of one portion of this case. The remaining $40.0 million is included in the litigation accruals noted above. In February 2026, the court granted preliminary approval of the remaining settlement but it is subject to final court approval.