Equity Residential and AvalonBay Communities agreed to merge in an all-stock deal that would create a combined company with an enterprise value of approximately $69 billion and more than 180,000 rental apartments, the companies said Thursday.
The all-stock combination of the two apartment REITs would create a company with more than 180,000 rental units across the U.S.
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Equity Residential and AvalonBay Communities agreed to merge in an all-stock deal that would create a combined company with an enterprise value of approximately $69 billion and more than 180,000 rental apartments, the companies said Thursday.
Each AvalonBay share will be exchanged for 2.793 shares of Equity Residential common stock under the merger agreement. That exchange ratio would give AvalonBay investors a roughly 51.2% stake in the new entity, with Equity Residential shareholders holding the remaining 48.8%. The pro forma equity market capitalization of the combined company would be approximately $52 billion.
The deal, unanimously approved by both boards, is expected to close in the second half of 2026, subject to shareholder approval from both companies and other customary closing conditions. The transaction is structured to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Expected cost savings include $175 million in gross synergies, with $125 million remaining on a net basis after accounting for real estate tax reassessments. With their portfolios overlapping in 95% of markets, Reuters reported, the companies believe the geographic alignment will support localized management structures and drive down operating costs.
Benjamin Schall, who holds the top job at AvalonBay, is slated to become chief executive of the merged entity. Mark J. Parrell, who has spent 27 years at Equity Residential and currently serves as its president and CEO, plans to step down once the deal is finalized. The combined company will carry a new name to be announced at closing and will maintain dual headquarters in Arlington, Virginia and Chicago, Illinois.
The 14-member board will be split evenly between seven trustees from each company. Steve Sterrett, currently lead independent trustee of Equity Residential and a former long-time CFO of Simon Property Group, will serve as board chairman.
As of March 31, 2026, AvalonBay owned or held an ownership interest in 319 apartment communities containing 98,271 apartment homes across 11 states and the District of Columbia, the company said. Equity Residential owns and manages 312 properties with 85,211 apartment units, the company said.
The combined company expects to pay an initial annualized dividend of $2.81 per share. The companies said they have $4.4 billion and 10,800 apartments currently under construction across 32 communities.
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