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US-based real estate investment trusts AvalonBay Communities and Equity Residential are reportedly nearing a merger agreement that could create one of the largest apartment housing REITs in the United States. According to media reports, AvalonBay shareholders may receive 2.793 shares of Equity Residential common stock for every AvalonBay share held, with AvalonBay investors expected to own slightly over 51% of the merged entity. The combined company is also expected to declare an initial annual dividend of USD 2.81 per share. Together, both companies manage more than 180,000 apartment units across the US housing market.
US-based real estate investment trusts (REITs) AvalonBay Communities and Equity Residential are reportedly close to finalising a merger deal, according to reports published in the past week by Bloomberg News and The Wall Street Journal, citing people familiar with the matter. Advertisement
As per the reports, the proposed transaction would involve AvalonBay shareholders receiving 2.793 shares of Equity Residential common stock for each AvalonBay share they own. The Wall Street Journal further reported that AvalonBay shareholders are expected to hold a little over 51% ownership in the combined company following the merger.
The merged entity is also expected to announce an initial annual dividend payout of USD 2.81 per share for shareholders. Reports indicated that an official announcement on the deal could come shortly.
Reuters stated that it could not independently verify the reports. Both AvalonBay Communities and Equity Residential had not issued official comments on the matter at the time of reporting.
The proposed merger would bring together two of the largest apartment-focused REITs in the United States. According to LSEG data, AvalonBay currently has a market valuation of nearly USD 26 billion, while Equity Residential is valued at close to USD 25 billion.
AvalonBay owns or has ownership interests in 319 apartment communities comprising 98,271 apartment units across the US. Equity Residential, meanwhile, owns 312 rental properties with a portfolio of 85,211 apartments.
The deal comes at a time when large housing REITs in the US are focusing on scale, operational efficiency and stable rental income amid changing interest rate conditions and housing demand trends. In recent years, consolidation activity in the REIT sector has increased as companies look to strengthen their portfolios and improve long-term returns for investors.
Both companies have a significant presence in major urban and high-growth residential markets across the United States, including regions with strong rental demand and limited housing supply.
Source Reuters
5th Jun, 2025
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