Investor Presentation MAY 2016 1 340 Fremont San Francisco, CA - - PowerPoint PPT Presentation

Investor Presentation May 2016 1

340 Fremont – San Francisco, CA Estimated completion in 2016

Investor Presentation

MAY 2016 1

Investor Presentation May 2016 2

By the Numbers

Americans Are Renting at Historic Levels

*Sources: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys. **Source: US Census Bureau

325 500 425 290 500 900

1960s 1970s 1980s 1990s 2000s 2010-14

Average Annual Change In Renter Households*

(in thousands)

Change in Number of U.S. households Since End Of 2020**

(In Millions) 10 8 6 4 2

• 2

2001 2005 2010 2015

RECESSIONS

– Owner Occupied – Renter Occupied

June 23, 2015

Baby Boomers Will drive Demand for Apartments, U.S. Fed Study Shows

June 24, 2015

More Americans Are Renting, and Paying More, as Homeownership Falls

December 9, 2015

The Number Of Renters Is Exploding And It's Not Because Of Millennials

Investor Presentation May 2016 3

By the Numbers

Urban Living is on the Rise

Reurbanization Driving Rental Demand In Major Metros

*Source: Study from Smart Growth America and Cushman & Wakefield **Source: United Nations

January 27, 2016

Real Estate Investors Ride the Reurbanization Trend

April 21, 2015

Companies Trade Suburbs for City Life

Locations deemed ‘walkable’ appreciate more than those that are car-dependent

51 52 66 88 79 78

Walk Score Transit Score Bike Score

Corporations Looking for Urban Convenience*

(Before and After a Corporate Move)

 Before  After

U.S. Urban Population Continues to Expand**

(Population in thousands) 400 350 250 200 150 100 50 1950 1970 1990 2010 2030 2050

 Urban  Rural

Investor Presentation May 2016 4 Investor Presentation May 2016 4

EQR: Capitalizing on Industry Trends

Proven Leader in Apartment Investing

• Founded by Sam Zell
• Over 100 years of combined operating experience
• State-of-the-art operating platform

Attractive Portfolio in High Value Markets

• Portfolio positioned to take advantage of reurbanization trend in high

growth markets

• Excellent growth in asset value
• Compelling industry fundamentals support long-term growth

Disciplined Capital Allocation Strategy

• Strong asset utilization and attractive cash flows
• Proven track record of opportunistic acquisitions, timely dispositions and

focused development

• Consistent return to shareholders through regular quarterly dividends and

capital appreciation

Balance Sheet Strength

• Conservative balance sheet and superior liquidity through access to

multiple sources of financing

• Strong credit ratings and debt metrics with little debt maturing in next

two years

WELL-POSITIONED TO CREATE LONG-TERM SHAREHOLDER VALUE

Investor Presentation May 2016 5

$1.9 $1.8 $2.4 $2.6 $2.8

2011 2012 2013 2014 2015

Revenue

(in billions)

$2.43 $2.76 $2.85 $3.17 $3.48

2011 2012 2013 2014 2015

Normalized Funds from Operations

(Per Share)

• Focused on the acquisition, development

and management of high-quality rental apartment properties in top U.S. growth markets

• Portfolio of 315 properties consisting of

83,551 rental apartment units with a net asset value of more than $35 billion

»

Properties are 96% occupied

• Over 3,900 apartment units under

development at a total cost of approximately $1.97 billion

Equity Residential Overview

Markets as a % of Stabilized NOI

25.0% 19.4% 17.7% 17.6% 11.3% 7.8% 1.2%

Southern California New York San Francisco Washington DC Boston Seattle Other

Investor Presentation May 2016 6

• Constructing our Portfolio

»

High costs of homeownership;

»

Barriers to new apartment supply in the form of land constraints and government restrictions;

»

Substantial job growth and household formations; and

»

Attractive lifestyle for residents to live, work and play

• Managing our Portfolio

»

Opportunistic acquisitions and divestitures

»

Timely development of new projects

• Maintaining efficient operations

»

State-of-the-art operating platform

Proven Strategy

SEEK TO ACQUIRE AND BUILD APARTMENT PROPERTIES THAT GIVE US THE HIGHEST RISK-ADJUSTED TOTAL RETURNS

Investor Presentation May 2016 7

Sam Zell

Founder & Chairman

David Neithercut

President & CEO

Mark Parrell

CFO

• Founder and Chairman

since initial public

• ffering in 1993
• Over 45 years of

experience as a chairman, director, and executive of companies in various industries around the world

• Recognized founder of

the modern REIT industry

• Senior leader within the

company since 1995

• CEO since 2006
• CFO from 1995-

2004

• Director of General

Growth Properties, Inc.

• Member of the

Executive Board of the National Association of Real Estate Investment Trusts (NAREIT)

• Senior leader within the

company since 1999

• CFO since 2007
• Chair of the Finance

Committee of NMHC and is a member of ULI

• Director of Brookdale

Senior Living Inc.

Experienced Leadership Team

OVER 100 YEARS OF COMBINED OPERATING EXPERIENCE

Barry Altshuler

EVP - Investments

Alan George

EVP - CIO

Alexander Brackenridge

EVP - Investments

David Santee

EVP - COO

Joined EQR: 1998 Joined EQR: 1997 Joined EQR: 1993 Joined EQR: 1996

Investor Presentation May 2016 8

Attractive Industry Fundamentals

• More than 8.3 million new households will be formed from 2015-2019

»

More than 2.4 million expected to end up in institutional-grade rental apartments

• 80 million Echo Boomers driving demand

»

More than 4 million young adults turning 25 every year through the end of the decade

»

Forming households and creating demand – 60% to 70% propensity to rent

• Job growth improving

»

Unemployment rate of the college educated is 2.6%

• Declining homeownership rate
• Homeownership not as economically or socially appealing

~8.3M

New households will be formed from 2015 – 2019

80M

Echo Boomers are driving housing demand

2.6%

Unemployment rate among college educated

Investor Presentation May 2016 9

Source: Census, Rosen Consulting

Lifestyle Choices

Keeping People Renting Longer

ABOUT HALF THE U.S. ADULT POPULATION IS SINGLE AND MORE LIKELY TO BE RENTERS

Average Marrying Age

Male Female 23 24 25 26 27 28 29 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Investor Presentation May 2016 10

Declining Homeownership

Translates Into More Renters

Sources: US Census Bureau, Moody’s Analytics & EQR Market Research

1981 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17E 70% 69% 68% 67% 66% 65% 64% 63% 62%

Homeownership Rate

% of households, 1% = 1.1 million households

64.2% 69.0% 64.5% 63.5% 63.3% 63.5%

Investor Presentation May 2016 11

Median Income vs. Median Home Price

(in thousands)

$82 $58 $66 $73 $92 $68 $53 $917 $467 $410 $406 $394 $372 $220 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

San Francisco Los Angeles New York Boston Washington DC Seattle U.S. Average

Median Income Median Home Price

EQR is Strategically Located

In Markets With Attractive Housing Dynamics

0% 2% 4% 6% 8% 10% 12%

U.S. Average Seattle Los Angeles San Francisco Washington DC Boston New York

Rental Vacancy Rates

(in percent) 2010 2015

Source: U.S. Census Data

Price/Income 11.2x 8.1x 6.2x 5.6x 4.3x 5.5x 4.2x

Investor Presentation May 2016 12

Compelling Underlying Fundamentals

EQR Core Markets Resident Profile:

Support Our Long-Term Growth Outlook

$53 $69 $100

All U.S. Markets EQR Markets EQR Residents

Median Resident Incomes

(in thousands)

$1,218 $2,051 $2,376

All U.S. Markets EQR Markets EQR Residents

Average Monthly Rent

$220 $519

All U.S. Markets EQR Markets

Median Single Family Homes Prices

(in thousands)

20-34 year olds:

51%

Median age:

34

Without children:

78%

50+ year olds:

21%

STRONG DEMOGRAPHICS FOR LONG-TERM INCOME GROWTH AND ASSET APPRECIATION

Source: U.S. Census and Company Data

Investor Presentation May 2016 13

25 50 75 100

2014 2015 2016

Attractive Dynamics in EQR Markets

EQR markets include Boston, New York, Washington DC, Southern California, San Francisco and Seattle Source: Moody’s Analytics, Green Street Advisors, MPF, EQR Research

% of Inventory 1.1% 1.2% 0.85%

Apartment Demand vs. Supply

(in thousands)

Demand Supply

Investor Presentation May 2016 14 Los Angeles

Prime Locations

Relative to Closest Competitors

30 40 50 60 70 80 90 100

Boston

Source: walkscore.com

New York San Francisco

Average Walk Score by Market

(Relative ease of completing daily errands w/o a car on a 0-100 scale) Equity Residential AvalonBay Essex UDR

Seattle Washington DC

EQUITY RESIDENTIAL LOCATIONS ARE HIGHLY WALKABLE AND ADVANTAGEOUSLY POSITIONED COMPARED TO PEERS

EQR EQR EQR EQR EQR EQR

Investor Presentation May 2016 15

A Foundation of Six Core Markets

EQR Pro Forma Portfolio Characteristics

Highest quality, best located portfolio in the public apartment REIT sector Dominant presence in six markets: 24/7 gateway cities, Strong demand drivers, Best long term value creation, Operating efficiencies from asset concentration

Seattle

34 Properties / 6,806 Units

San Francisco

45 Properties / 13,202 Units

Southern California

91 Properties / 21,915 Units

Boston

24 Properties / 6,415 Units

New York

39 Properties / 10,512 Units

Washington, DC

47 Properties / 15,634 Units

Investor Presentation May 2016 16

Strong Balance Sheet, Liquidity Position and Fixed Charge Coverage

• Net debt to EBITDA ratio of 5.6x
• Durable cash flows
• Access to multiple sources of debt capital

»

Unsecured bonds

»

Secured loans

• Life insurance company loans
• Fannie Mae/Freddie Mac loans

»

Unsecured bank borrowings

»

Weighted average maturity of 9 years with minimal maturities due in 2016 & 2017

»

87% fixed rate; 13% floating rate

• Strong credit ratings

»

Moody’s: Baa1, placed on Positive Outlook

»

S&P: A-

5.6x

Net debt to EBITDA

9 Yrs.

Average debt maturity

Baa1/A-

Moody’s and S&P ratings

(Positive Outlook)

Investor Presentation May 2016 17

Net Asset Value Growth – CAGR

5-Year 10-Year

EQR

22.6% 8.5%

Apartment REIT Avg.

20.4% 6.7%

Total Shareholder Return

1-Year 3-Year 5-Year

EQR

8.0% 64.3% 75.8%

S&P 500

1.0% 38.2% 73.0%

S&P 500 Financial Index

• 4.5%

30.2% 51.3%

MSCI REIT Index

2.0% 31.4% 75.5%

TSR through 3/28/16 Source: Green Street Advisors

Compelling Absolute and Relative Returns

$1.58 $1.78 $1.85 $2.00 $2.21

2011 2012 2013 2014 2015

Dividend Per Share

• Dividend yield of ~3%
• Special dividends in 2016:
• $8/share in 2Q16
• Additional $2-4/share in 2H16

Investor Presentation May 2016 18 Investor Presentation May 2016 18

2016 Guidance

Normalized FFO

$3.05 - $3.15 per share

Same Store Net Operating Income Growth

5.0% - 6.0%

2016

Annual Dividend

$2.015 per share

Investor Presentation May 2016 19 Investor Presentation May 2016 19

EQR: Capitalizing on Industry Trends

Proven Leader in Apartment Investing

• Founded by Sam Zell
• Over 100 years of combined operating experience
• State-of-the-art operating platform

Attractive Portfolio in High Value Markets

• Portfolio positioned to take advantage of reurbanization trend in high

growth markets

• Excellent growth in asset value
• Compelling industry fundamentals support long-term growth

Disciplined Capital Allocation Strategy

• Strong asset utilization and attractive cash flows
• Proven track record of opportunistic acquisitions, timely dispositions and

focused development

• Consistent return to shareholders through regular quarterly dividends and

capital appreciation

Balance Sheet Strength

• Conservative balance sheet and superior liquidity through access to

multiple sources of financing

• Strong credit ratings and debt metrics with little debt maturing in next

two years

WELL-POSITIONED TO CREATE LONG-TERM SHAREHOLDER VALUE

Investor Presentation May 2016 20

20

170 Amsterdam – New York, NY Expected to receive LEED Certification

Thank You