The all-stock merger creates the largest U.S. apartment REIT, valued at approximately $30 billion in combined market capitalization.
AvalonBay Communities (AVB) and Equity Residential (EQR) announced a merger of equals, prompting a 1.5% decline in AVB shares and a 0.8% drop in EQR in late trading. The deal combines two of the largest U.S. apartment real estate investment trusts, forming a company with a projected market capitalization near $30 billion.
Both REITs reported steady occupancy rates above 95% in their latest earnings, though rising interest rates have pressured valuations in the sector. The merger follows a trend of consolidation among multifamily property owners as firms seek scale to offset higher financing costs.
Shares of both companies extended losses after the announcement, reflecting investor caution over integration risks and near-term execution challenges.