Equity Residential at Nareit REITweek: Urban Strength and Strategic Moves

On Tuesday, 03 June 2025, Equity Residential (NYSE:EQR) participated in the Nareit REITweek: 2025 Investor Conference. The company discussed its robust operational performance and strategic acquisitions. While highlighting strong market recoveries and efficient expense management, it also acknowledged challenges such as insurance costs in Florida and negative leverage in capital allocation.

Key Takeaways

• Equity Residential acquired an eight-property portfolio in Atlanta for $535 million, funded by selling older assets.
• The company benefits from urban recoveries, especially in San Francisco and Seattle.
• A strong focus on efficient expense management and strategic market expansion is evident.
• Rent growth is observed across most markets, with a cautious approach to capital allocation due to interest rates.
• The company aims to grow cash flow and dividends while maintaining a strong balance sheet.

Financial Results

• Operations are ahead of initial expectations.
• The Atlanta acquisition was made at a 5.1% cap rate, funded by $350 million from asset sales.
• Initial guidance for acquisitions and dispositions was $1 billion each, with revisions expected.
• The Atlanta acquisition is projected to be flat in the first year but will contribute to FFO in the second.
• Equity Residential’s stock is trading at a discount, presenting a potential buying opportunity.
• Debt costs are in the mid-5% range, influencing capital allocation.

Operational Updates

• New York occupancy is strong at 97%, with San Francisco and Seattle exceeding recovery expectations.
• Southern California shows mixed results, with Orange County and San Diego performing well.
• Boston’s leasing season picked up in May, showing strong occupancy.
• Supply declines across markets are expected to continue, benefiting demand.
• Millennials and Gen Z are driving rental demand, with a projected 7% increase in the rentership pool by 2030.

Future Outlook

• The company focuses on urban assets and efficient expense management.
• Expansion into Atlanta, Dallas, Austin, and Denver is driven by job growth and high housing costs.
• Equity Residential aims to compound cash flow growth with minimal volatility.
• The Florida market is monitored cautiously due to high insurance costs.
• Rents in Atlanta are expected to decline temporarily before rising due to low supply and strong demand.

Q&A Highlights

• Capital allocation is adjusted to match acquisitions with dispositions due to negative leverage.
• Priority is given to markets with strong growth potential, avoiding dilutive expansion.
• Florida is of interest, but high insurance costs and resilience risks are concerns.
• The company focuses on growing cash flow and dividends with minimal volatility for shareholders.

For more detailed insights, readers are encouraged to refer to the full transcript.

Full transcript - Nareit REITweek: 2025 Investor Conference:

Rich Hightower, Senior REIT Analyst, Barclays: Okay. I think the clock just started. So good afternoon, everybody. My name is Rich Hightower, senior REIT analyst at Barclays. Very happy to be up here with the senior management team of Equity Residential.

So to my immediate left is Mark Farrell, CEO then Michael Manelis, Chief Operating Officer and then to my right, Bob Garrashana, the CFO. I think Mark has some initial comments and then we’ll get into questions after that.

Mark Farrell, CEO, Equity Residential: All right. Great. Well, thanks, Rich. Thanks, everyone, for joining us today, both remotely and here together in New York. So in the investor presentation that we posted last week on our website, we said that operations were continuing to run on track and ahead of the expectations we put out there at the beginning of the year.

And we can elaborate on that. I’m sure Rich will have plenty of questions for Michael Manelis on that. But we’re feeling pretty good about the residential business and how operations are going this year. We also said in our presentation that we acquired an eight property or we’re under contract to acquire an eight property portfolio in Atlanta, the Atlanta Metro Area, mostly north of the city. These are suburban assets, dollars $535,000,000 purchase price, 5.1% or so cap rate forward on our numbers.

We’re really excited to add these properties. They’re very complementary to our existing portfolio. So now we’ll be at scale. We’ll be at 22 assets across the market, a little more than 4% of our NOI when it’s again on the platform. So again, very exciting complementary acquisition for us.

And we think the very substantial decline in supply in Atlanta of all the Sunbelt markets, Atlanta has one of the largest declines and you can see that in our materials. So though we think the first year will be a pretty flat year, we think our team can operate the assets pretty efficiently, but rents continue to be challenged in Atlanta. We expect going forward year two on this will contribute meaningfully to FFO. We’re funding it with dispositions. We’ve sold about $350,000,000 already of older assets in some of our coastal markets that we thought had less desirable return characteristics, and we’re using those proceeds to buy these assets.

And we have other properties under contract during marketing. So quite exciting times in the apartment industry. We feel very well positioned for the rest of the year. And then going forward, solid demand picture, good demographics as we talked about at Investor Day. And this supply picture, which is already good in our East Coast markets, is getting a lot better all across the other markets, including in the West Coast.

So I’ll kick it back to you, Rich. All right, great.

Rich Hightower, Senior REIT Analyst, Barclays: So I’ll just kind of go off of what you kind of started with there. But Equity Residential owns some of the most productive multifamily real estate on the planet. There are a lot of high quality apartment REITs in addition to EQR. So what makes EQR unique?

Mark Farrell, CEO, Equity Residential: Yeah, question. So I think we have a unique collection of assets and a unique opportunity in front of us. So we are the most urban owner of apartments. And I can tell you in the public space, I can tell you that was pretty challenging during the pandemic, but that’s really turned around. Here in New York, ninety seven percent occupied, feeling really good.

DC continues to feel really good. The fundamentals are really strong and what’s very distinguishing for us is our West Coast exposure. We have certainly have suburban exposure, but we have a lot of urban exposure, particularly in San Francisco and Seattle, and we’re seeing very good recoveries there that, again, we can elaborate on in a minute. And that’s distinguishing for us. Again, in our deck, you can see us quantify that opportunity in terms of dollars going forward, and we feel that recovery strongly in San Francisco and also in Seattle.

So I think that’s a very unique thing for us, that urban collection of assets.

Rich Hightower, Senior REIT Analyst, Barclays: And then just taking a step back, you know, not everybody in the room might be sort of totally familiar with the the basic fundamental setup for apartments. So just maybe walk us through supply demand, maybe break it up across Sunbelt and Coastal, just so we kind of understand what are the indicators for rent growth? How do you get there?

Bob Garrashana, CFO, Equity Residential: Yes. So I’ll take that quickly. We’re really excited about the fundamentals within the multifamily space, starting, let’s say, first and foremost with supply. So we already see declines in supply across all of our markets, but in particular, very limited supply in our existing coastal markets. Since we’re benefiting from that from an operational standpoint, as Mark alluded to in his opening remarks, in a lot of the coastal markets already.

But we also see, much like the portfolio that we’re acquiring, declines in supply coming forward in the expansion markets. So that is in the markets of Atlanta, Dallas, Austin to a lesser degree where we have a small presence, but also Denver. So that supply dynamic is really great from the next three to five year time horizon. When you couple that with good demand, meaning we have millennial cohorts that are staying in our units longer. We’ve reported record levels of retention.

And you also have this Gen Z population entering the rentership basis. You have really good demand coupled with the low supply, and we think that that can lead to some of the best years in multifamily that we’ve seen in quite some time. And in fact, we talked a fair amount about that at our Investor Day presentation in February and also included some of that dynamics and some of those that information in Page 10 of our book. But we think we’re really well positioned, Rich, for the markets.

Mark Farrell, CEO, Equity Residential: And just to add a little bit to that, again, with this urban exposure and the uniqueness, supply goes where demand was. I mean, capital is going to fund a lot of suburban development over the next few years to the extent there is any. And I think there’ll be a lot less development in urban centers. And I bet you the hiatus is going to be longer. So I think our runway of outperformance will be longer in these urban markets where we have in these markets, we have a larger urban concentration.

I think I just want to point out is, it’s not just revenue that matters, though that’s certainly in a high margin business, the most important things. We are extremely good managers of expenses, overhead and CapEx. So we push more of each dollar down to the bottom line than our competitors. So we think the combination of a portfolio that is, I think, well positioned for the future here with supply declines as well as the recovery in the urban centers, combined with the operating platform overhead and CapEx efficiency is a unique opportunity to own the company going forward.

Rich Hightower, Senior REIT Analyst, Barclays: So let’s just dig into demand a little deeper for a second. So you guys have a couple of good slides in your Investor Day deck around the sort of growing core multifamily cohort. Historically, two to 34, and then people move out by house, whatever. Tell us why that core demographic is expanding and maybe what that means for the business over the next three to five years? Sure.

Mark Farrell, CEO, Equity Residential: Sure. So there’s really two components to that. First, there’s the millennials. So these are the folks now into their 40s, later 30s, who would be out buying homes at this point in a lot of cases. But because of lifestyle reasons, we do a good job elaborating, as Rich said in our book, people are getting married later, if at all, they’re having children later, if at all, half of our residents live alone in their units.

So you’ve got a lot of the population that’s chosen a lifestyle that doesn’t need as much space, doesn’t need yards, values a lifestyle where we’re doing the repair work for them, and they’re able to pee in places, whether it’s dense suburban or these urban nodes where there’s a lot of things to do, and they can feel very activated while still being a single person. So we feel like we’re sort of positioned right, rentership is right now for the times. And with single family housing so expensive, with units less available, a lot less production, we think that’s a really significant tailwind for the industry and our company. I also say that the Gen Z generation, so these are my kids, these are people 13 to about 25 years old, 28 years old actually at this point. So they’re just entering the work world, they’re just entering rentership.

We’re seeing them manifest their desires by wanting to live again in urban centers. We see a fair bit of that, that younger demographic. So that group is somewhat smaller, but not much than the millennials. So you’ve got a pretty big demographic in Gen Z, you’ve got the millennials staying longer and the combination of that is we see the rentership pool being about 7% larger in 2030 than it is today. So going up to around 84, 80 five million individuals.

Rich Hightower, Senior REIT Analyst, Barclays: So it’s really not a zero sum proposition between homeowners and apartment renters. It’s kind of a bleeding and a blending of categories.

Mark Farrell, CEO, Equity Residential: Sure. There’s a lot of great research on why people buy homes, and people buy homes mostly for social reasons. They got married, they have their second kid. Having a second child is a very high predictor of you buying a home that generally costly for you to pay for private education. That would usually rich trigger.

And I think Michael would tell you that usually moving out to buy a home would be 12% of our move outs, and now it’s an all time low of 8% of move outs. So buying a home is just expensive, and it’s not consistent with the social desires of our residents. It’s not the lifestyle they wish to have by and large. Did you have

Rich Hightower, Senior REIT Analyst, Barclays: anything like that? No. Okay. So what I’ll do, I’m going to we’re going to walk through maybe a summary of EQR’s key markets, and then maybe I’ll open it up to audience questions. And there is a mic right there, anybody wants to start lining up at that point.

But predominantly coastal portfolio, so we’ll start with those markets, then get into the expansion markets. But San Francisco and Seattle are a key part of the growth story for EQR this year. So maybe walk us through what you’re seeing in the marketplace, where we are on the post COVID recovery, especially in the Bay Area. And I’ll just let you go from there.

Michael Manelis, Chief Operating Officer, Equity Residential: Okay, great. So I think I’ll just start off and say as Mark alluded to, I mean, have some amazing unique urban centric portfolios in both Seattle and San Francisco. We included materials in the management presentation that we posted as to what a very reasonable 3% trend line recovery would look like from a dollar opportunity for us in the portfolio over the next couple of years. We modeled for improvement in 2025 in both of the markets, Seattle and San Francisco. Seattle to date, we’re kind of right through the spring leasing season heading into peak, right on track with kind of the improved expectations that we laid out.

We knew in Seattle, were going up a little bit against supply in Red Bend and in the city of Seattle. We got to work through some of that absorption. But sitting here today, we got sequential build and leasing velocity, meaning each week we’re adding more and more applications. We have pricing power in the marketplace in line with the improvement that we expected and feel really good about the recovery track that we’re seeing. In San Francisco, we modeled for that similar improvement and I would say to this date, it continues to exceed those expectations.

Across the Downtown San Francisco market, we are seeing very strong pricing power, very strong application volume. We’re seeing migration patterns showing us people coming into the market from the outer ring of the MSA, meaning they’re coming back into the city from further out. We also have a lot of RTO, not just the main tech companies returned to office policies changing, but it’s all those other companies that kind of follow suit. So we’re seeing this pullback from the RTL. You also have a huge improvement in the quality of life that’s occurred in San Francisco along with the city of Seattle.

Both of those markets really put forth a lot of effort over the past year and a half to change the quality of life in the market and we’re seeing that play out. They are vibrant markets and we’re very pleased with that trajectory that we see.

Rich Hightower, Senior REIT Analyst, Barclays: Great. DC is a big market for EQR. Strangely, the headlines obviously would suggest that things are dropping off a cliff, but it turns out to be one of the strongest department markets in the country right now. So what’s the disconnect?

Michael Manelis, Chief Operating Officer, Equity Residential: Yes. I mean, I think there’s headline risk for sure still in DC with the Doge cuts and trying to understand just the overall employment levels. For us, we really tell our on-site teams, focus on your dashboards, not on the headline. And these dashboards have a market that’s over 97% They’ve got strong sequential builds. They’ve got pricing power.

So we’re watching to see kind of the headline risk play out. And to this day, I will tell you, we just haven’t seen it. We look for kind of any signs of weakness in the financial health. That’s residents coming in wanting to downsize their units, transfer to lower cost units, take on roommates, give us their keys back, like notice to vacates and leave their lease early. We’re just not seeing kind of any of that activity play out.

What I’ll tell you, and this is interesting because we saw this the last time we saw massive job cuts. We actually just saw this in Seattle with Microsoft announcing. So Microsoft just announced major job cuts. We had one of our residents come in and said, yes, they indeed did lose their job. Their job is being eliminated at the August and they have six months of severance.

So these types of individuals have confidence that they’re going to be reemployed. They tend to bunker down when there’s these periods of ambiguity and just like in DC, there’s a lot of headline risk, everybody’s watching, retention goes up, people bunker down, they’re not willing to make big lifestyle changes and that’s kind of what we’re seeing play out.

Mark Farrell, CEO, Equity Residential: Resident state.

Michael Manelis, Chief Operating Officer, Equity Residential: Yeah, resident state. Oh yeah, the resident in Seattle said no intention of leaving, renewed their lease, and really had a lot of confidence that they would be employed.

Rich Hightower, Senior REIT Analyst, Barclays: New York.

Michael Manelis, Chief Operating Officer, Equity Residential: On fire. We’re here this market continues to exceed expectations. I think this is a place where people want to be. Clearly, know recent college grads, I have a couple that are in that mix, are really excited about a potential to come to this kind of market to be employed. There’s just no supply here.

And whether even if we go into Jersey to the Hudson Waterfront, all of the submarkets around here are just performing very well for us.

Rich Hightower, Senior REIT Analyst, Barclays: Southern California.

Michael Manelis, Chief Operating Officer, Equity Residential: Okay. So Southern California, it’s a little bit of a tale of two cities here. I’ll tell you for Orange County, San Diego, they’re performing like you would expect, normal seasonality, normal sequential build, normal pricing power kind of building throughout the leasing season. LA, we came into the year, we did not have high expectations for it. We kind of understand the impact on the overall demand because of the lack of kind of momentum that we’re seeing in the film industry there.

LA is also a market that really hasn’t put forth the effort and the focus on the quality of life. So some of that urban centric portfolio, we’re just not seeing any pricing power. We didn’t expect to see pricing power. What I will tell you is the last several weeks we have noticed a pickup in demand in West LA. So for the whole year right now, we’ve looked across these submarkets and outside the deep suburban submarkets of like Ventura County and Santa Clarita, we really haven’t had any pricing power.

We’re now starting to see a little bit of that come into the West LA submarket for us. We’ll just see how long that lasts for us.

Rich Hightower, Senior REIT Analyst, Barclays: Okay. This one’s maybe a little more recent in terms of the headline risk, but Boston obviously has a huge educational contribution to the renter pool. What are you seeing? What are you hearing?

Michael Manelis, Chief Operating Officer, Equity Residential: Yeah. So I would put Boston up there like DC from a headline risk standpoint, the pullback on funding, a lot of the press around kind of students and foreign students. So first to clarify student population in our portfolio, it’s a very small subset. It’s like 3% of our overall units are housed with students. What we saw in Boston is a little bit of a slower start to the leasing season in April, and then we turn the corner into May, and it’s like off to the races.

So Boston is very well positioned right now, both from an overall occupancy standpoint, as well as from a pricing power, what you would expect to see at this time of the year.

Rich Hightower, Senior REIT Analyst, Barclays: Okay. And then so that kind of rounds out the coastal markets. I’m going to ask a question on expansion markets. But again, if anybody would like to ask a question, there’s a mic over there. So maybe start lining up.

But just take us through the expansion market thesis. Is this there’s a lot of reasons why this might make sense. Is it structurally higher job growth? Is it regulatory arbitrage? You talked about the waning of supply,

Mark Farrell, CEO, Equity Residential: markets. We picked Atlanta, we picked Dallas, we picked Austin, we picked Denver because we really like the job growth. We really like the high housing costs. So the ability to quickly switch into owned housing is more challenging. So we used to be owners in Atlanta Ten, Twelve Years ago.

When that was the case, our best resident would move after six months and buy a home because homes were cheap, dollars 200,000 homes. Now they’re $600 to $800,000 homes, and our resident would move out in the middle of the night. That was the story of Atlanta. There was a ton of supply. That was true in Dallas, and that was the Sunbelt story.

But what’s changed is the quality of life, the quality of jobs has changed and the cost of housing. Those are all positive characteristics. So we remain consistent with our theme of basically catering to a higher earning resident, but in more cities. So we think of ourselves as in the 12 or so best places to live, work and play, And our younger sort of 25 to 40 some year old demographic likes to be in those cities, and those cities do include places like Atlanta, and they stay for a while with us because, again, it’s not cheap to just immediately go and buy a house. So we’re really excited about that portfolio balance.

We are trying to balance out regulatory risks. Regulatory risks are certainly higher in New York and California than Texas and Georgia. There’s resilience risks in some of the wildfire risks in California, certainly heat risks in Texas. So I think having a portfolio like ours, our goal is to compound cash flow growth for you at the highest possible rate with the least amount of volatility, being levered to a higher end consumer across these 12 markets that have these kind of characteristics I just spoke of is to us the best way to do that. And the final ingredient is you got to sit in on top of a super efficient operating platform.

And our operating platform, again, taking in account overhead, which is the lowest in the space, CapEx, which is relatively low as a percentage of each rent dollar, and then as well just operating expenses. So to us, Rich, that’s the whole story of how those pieces all sort of fit together.

Rich Hightower, Senior REIT Analyst, Barclays: You did mention the Atlanta portfolio deal, I think in your prepared comments. Walk us through that underwriting. How do you think about returns growth? How should we think about it?

Mark Farrell, CEO, Equity Residential: Sure. So again, to just sketch those probably about 2,000 units, eight properties. If you look straight North of Atlanta, up Route 400, it’s basically along that route in places like Cummings as well as what’s the other? Alpharetta. Alpharetta.

Thank you, Bob. Alpharetta. These are places that have pretty significant office nodes now, including places like Home Depot and Cox Communications. So good job bases in the areas. These are more B plus, A minus assets.

We often own just A assets, but this is a little bit of a variety for us. We like these assets because places like Alpharetta, there is land to build, but the town doesn’t want new apartments. A lot of very expensive single family homes, so there’s a lot of pushback. It may not be California in terms of NIMBYism, but it’s got some aspects of it. So we like the supply picture.

We’re not competing a lot with single family. We don’t expect a lot of new units. We didn’t see a lot recently. The demographic is still good. We did a lot of diligence on their employment, and we feel really good about it.

And these are assets that again on top of the 14 we have already, we can run efficiently. So year one underwriting, we looked at it and we said, you know what, we can run it more cheaply on expenses, particularly payroll, insurance, we’re just a more efficient operator than private operators. On the rent side, we do expect rents to decline for the next six months or so in Atlanta. There’s still a lot of supply. And even though these properties don’t have supply rate by them, the market has supply and housing is a substitutable good.

So we do expect the first year to be kind of flat, year one to year zero. And then as you go forward, we think rents are going up because the amount of supply is so low and the demand characteristics of that market have been so good. So that’s the sort of ramp up. I think when you buy a little bit older assets, the thing to be really careful about is your CapEx underwriting. These assets are sixteen years old.

They need money. There’s a fair bit of money upfront to bring them up to EQR standard. There’s a couple of renovations in the pro form a. So I think Rich, we’re underwriting to a mid-8s unlevered IRR over ten years and we feel very confident those are numbers we can attain. That’s good.

Rich Hightower, Senior REIT Analyst, Barclays: Questions from the audience? Think.

Mark Farrell, CEO, Equity Residential: Sure. So the question was about Florida and whether we have interest in that market and obviously housing is much more expensive. They’re similar to my comment about Atlanta. So we did own Florida as well. And the when we sold out of Florida and our last portfolio was Southeast Florida, so think Fort Lauderdale through Miami, our perspective was the quality of jobs was not good.

And a lot of those jobs were in our minds related to tourism, honorable professions, but just not well earning jobs. We had delinquency issues that were relatively significant in the market and in our portfolio. So that was the knock on the market. I think Florida has changed in the sense that housing single family housing is much more expensive. The quality of jobs is better in that market, but what also changed was insurance costs.

When we left in 2015, ’20 ’16, our insurance costs per unit per year were $300 and now they’d be closer to $3,000 per unit per year. You need to have a lot of rent growth to offset that. And I’d also say that even though it’s common and we do that when there’s disasters, you sort of exclude some of those costs, but shareholders bear that cost. Insurance companies are not going to insure to the bottom dollar. And you’re going to have a fair bit of hurricane activity, it feels like to me, in Florida.

And if you keep seeing that sort of activity, those costs should be in your pro form a. So I would say I probably feel better about demand in Florida than we did two, three, four years ago when we were focusing on Atlanta, Dallas, Austin and Denver. And the supply picture in Florida has been mixed. There hasn’t been that much around Fort Lauderdale. There’s a lot in places like Orlando and Tampa.

But I still feel a little uncomfortable with this, I’ll call it resilience risk and even more these insurance costs. So again, we’ll keep our eye on Florida. I’m open to it. But I just think right now with these other markets, they’d probably be better to fill those in and not have that pretty significant, I’ll call it contingent liability of fixing up your property after a big storm. Thanks for the question.

Rich Hightower, Senior REIT Analyst, Barclays: Other questions? Okay, we’ll keep rolling along. I’m going give Bob here a shot on goal, okay? Unless he wants to hand it off to somebody else. Capital allocation, we talked about Atlanta, maybe walk us through sources, uses, whether in the form of uses, could talk about geographies, types of investment, we’ve talked about ramping up development.

So what are you thinking on that front?

Bob Garrashana, CFO, Equity Residential: Yeah, I’ll start with some of this and the rest of the team can answer, But maybe starting with sources and uses. Our guidance shows that we or implies initially that we anticipated acquiring $1,000,000,000 and disposing of $1,000,000,000 with a net acquisition component of $500,000,000 And as we’ve indicated to the market often, like that’s a guidance assumption, that’s not necessarily market conditions will dictate what happens, right? And I would tell you that in today’s market conditions, we’re probably more of an equal buyer and seller just because of the overall aggregate cost of capital when you look at relative sources. So for us, we are a very low levered company. We have a lot of debt capacity.

Net acquisitions would likely be funded with debt. But debt costs, for a borrower that is very well priced relative to the rest of the market, are high relative to cap rates. So for instance, just to give you a real live example, you have cap rates that are probably market cap rates are probably in the high 4s. You apply our platform and you maybe can choose that to a low five, but debt costs are probably mid 5s or above that. And so as such, we think it’s probably most prudent to be more of an equal buyer and seller in this environment and achieve our strategic objective of expanding in these markets for all the conditions that Mark kind of outlined, etcetera, but do so by selling some older assets.

Mark Farrell, CEO, Equity Residential: And if I can just make a pitch, I mean, we see in real time all these prices for these assets and we own three twenty of these well located properties that we think the cap rate on these assets would be in the high four, some in the mid four, some maybe a little above five. Yet I don’t know on your numbers, Rich, the company’s stock is probably trading because today was not a wonderful day in our sector in the high five. So I would say the argument on cash flow growth is clear to us and we made it in our Investor Day, but the entry point is also excellent when you compare it to just what values are in the private market. And it’s just again, I don’t always make that point because there’s fewer and fewer NAV focused investors in our world. But I would tell you, buying at a discount is a good thing.

And I think right now, high quality companies in the residential space, especially our company, are a bit on sale. So the question from Rich Paoli, which we always get insightful questions from Rich. The question from Rich was whether we were going to lower so our guidance again, 1,500,000,000 buys, 1,000,000,000 sales, which meant we were going to borrow $500,000,000 So what are we going to do with that? We won’t revise guidance until July. If I was doing it right now, I’d say it’s more likely to be $1,000,000,000 and $1,000,000,000 ish, Rich, just because there’s the volume has not been quite what we had hoped.

But if we can get to $1,000,000,000 match fund, our goal is not to materially dilute our current investors. We like our cash flow growth. We like raising that dividend. So we’ll manage that a little bit, Rich. But right now, I think it’s going to be more of a match funding, maybe a little down exercise than but if we see a portfolio we like, like we did with Blackstone, this portfolio we just did, it was forty five days from date of agreement to the day we closed in a week or so.

I mean, we’re capable of moving very quickly and we have certainty. So we are a preferred partner for a lot of private guys who need to sell. So we’ll keep our eyes open. I’m sorry, didn’t quite hear. So the question was how we’re doing with the negative leverage in real estate?

Well, we hate it. And it’s the reason why you’re seeing us match fund. So last year, Bob and his capable treasury team could borrow at a modestly lower rate than cap rates, We were a net borrower to the tune of 500 or $600,000,000 and we bought more than we sold and we grew the company and got scale and it was all that awesome kind of flywheel starting to work this year because, again, we probably borrow above 5.5% and cap rates are a bit below 5%. Taking that much dilution doesn’t make sense as it relates to current shareholders in our mind. So the effect that, that negative leverage is having on us is to slow down our transformation into those other expansion markets because, again, we have such a good story on the West Coast right now with the urban recovery.

There’s just no need to dilute that story.

Rich Hightower, Senior REIT Analyst, Barclays: Alright. We’ve got about sixty seconds left in the presentation, so one maybe one more.

Michael Manelis, Chief Operating Officer, Equity Residential: You said you had fewer NAV of your shareholders, but primarily your shareholder base is focused on

Mark Farrell, CEO, Equity Residential: Growing cash flow as quickly as possible while raising the dividend. I think that the shareholder base is interested in total return for sure, including the value of the assets, but they’re more interested I think in that sort of growth in income focus, compounding cash flow growth in the dividend over time with the least amount of volatility possible. So the question relates to just this, I’ll call it perpetual public market discount. So that kind of does come and go. We’ve been at points we issued when we did the Toll Brothers deal, was it three years ago, Bob?

We did issue 150 or 200,000,000 of equity. So it just kind of comes and goes a little bit, but I agree it were as a sector, we trade at a discount more, and that’s probably because of the existence of Fannie Mae and Freddie Mac. In sectors like healthcare, where you have a capital cost advantage that the big REITs have because they have an investment grade credit rating, our investment credit rating is worth ten, twenty basis points. There it’s worth one, two percentage points. So I think it’s the existence of the GSEs.

On the other hand, we’re super liquid and healthcare sector isn’t. So there’s and we trade at lower cap rate for a reason, the space does.

Rich Hightower, Senior REIT Analyst, Barclays: Okay. Thank you, guys. Let’s wrap it there.

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