EQR

Corporate governance · Internal controls and risk management

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have a negative impact on our share price.

Corporate governance · Shareholder rights and activism

Certain provisions of our Declaration of Trust and Bylaws and Maryland law and certain REIT tax requirements could inhibit changes in control. Certain provisions of our Declaration of Trust and Bylaws and Maryland law and certain REIT tax requirements may delay or prevent a change in control of the Company or other transactions that could provide our security holders with a premium over the then-prevailing market price of their securities.

Reputation and brand · Brand damage and negative publicity

Corporate responsibility, specifically related to sustainability efforts, may expose us to new risks. Corporate responsibility evaluations remain highly important to some investors and other stakeholders. We may face reputational damage in the event our corporate responsibility procedures or standards do not meet the standards set by various constituencies.

Credit and liquidity · Access to capital and financing

Disruptions in the financial markets could hinder our ability to obtain debt and equity financing and impact our acquisitions and dispositions. Dislocations and disruptions in capital markets could result in increased costs or lack of availability of debt financing (including under our commercial paper program) and equity financing.

Market and investment · Interest rate and yield curve risk

Rising interest rates can increase costs and impact the value of the Company's assets. The Company is exposed to market risk from financial instruments primarily from changes in market interest rates. Such risks derive from the refinancing of debt at or prior to maturity, from exposure to interest rate fluctuations on floating rate debt and from derivative instruments utilized to swap fixed rate debt to floating rates.

Strategic execution · Merger acquisition and divestiture risks

We actively acquire, develop and renovate multifamily operating properties as part of our business strategy. Newly acquired, developed or renovated properties may not perform as we expect. We may overestimate the revenue (or underestimate the expenses) that these new or repositioned properties may generate. Additionally, we have and may in the future acquire large portfolios of properties or companies that could increase our size and result in alterations to our capital structure.

Strategic execution · Geographic expansion and market entry

Furthermore, we have in the past and may in the future decide to invest in new markets and/or product types by acquiring and/or developing properties in accordance with the Company's long-term investment strategy. Our historical experience does not ensure that we will be able to operate successfully in new markets, should we choose to enter them. Investing in new markets and/or new product types may expose us to a variety of risks, including an inability to accurately evaluate local market conditions and local economies.

Market position and competition · Pricing pressure and margin compression

Additionally, our properties face competition for residents as a result of innovations in technology and amenities. Therefore, we may not be able to retain residents or attract new residents if we are unable to identify and cost effectively implement new, relevant technologies/amenities and keep up with constantly changing resident demand for the latest innovations in these areas.

Customer and revenue · Changing customer preferences and behavior

Additionally, our properties face competition for residents as a result of innovations in technology and amenities. Therefore, we may not be able to retain residents or attract new residents if we are unable to identify and cost effectively implement new, relevant technologies/amenities and keep up with constantly changing resident demand for the latest innovations in these areas.

Economic and market conditions · Inflation and deflation pressures

Significant inflation could negatively impact our business. Substantial inflationary pressures can adversely affect us by disproportionately increasing the costs of land, materials, labor and other costs needed to operate our business. In a highly inflationary environment, we may not be able to raise rental rates at or above the rate of inflation, which could reduce our profit margins.

Natural and catastrophic events · Natural disasters and extreme weather

Our properties may be located in areas that could experience catastrophic weather and other natural disasters from time to time, including wildfires, snow or ice storms, hail, windstorms or hurricanes, drought, flooding or other severe disasters. These severe weather and natural disasters could cause substantial damages or losses to our properties which may not be covered or could exceed our insurance coverage.

Natural and catastrophic events · Pandemic and public health crises

Risk of Pandemics or Other Health Crises. Pandemics, epidemics or other health crises or public emergencies have and could in the future disrupt our business. Both global and locally targeted health events could materially affect areas where our properties, corporate/regional offices or major service providers are located.

Natural and catastrophic events · Financial exposure to weather related losses

Earthquake risk: Our policies insuring against earthquake losses have substantial deductibles which are applied to the values of the buildings involved in the loss. With the geographic concentration of our properties, a single earthquake affecting a market may have a significant negative effect on our financial condition and results of operations, as well as insurers' ability to pay claims.

Supply chain and procurement · Raw material availability and cost volatility

We have experienced and may continue to experience changes in local market conditions and/or an increase in financing or construction costs due to general disruptions, such as supply chain disruptions, trade disputes, tariffs, immigration issues, labor unrest, geopolitical conflicts or other factors that create inflationary pressures.

Project and contract management · Project execution and delivery risks

Construction risks on our development projects could affect our profitability. We intend to continue to develop multifamily properties through both wholly owned and joint venture arrangements as part of our business strategy. Development often includes long planning and entitlement timelines, subjecting the projects to changes in market conditions. It can involve complex and costly activities, including significant environmental remediation or construction work in our markets.

Legal and litigation · Litigation and legal proceedings

Litigation risk could affect our business. We are involved and may continue to be involved in legal proceedings, claims, class actions, inquiries and governmental investigations in the ordinary course of business. These legal proceedings may include, but are not limited to, proceedings related to consumer, shareholder, securities, antitrust, employment, environmental, development, condominium conversion, privacy, tort, eviction and commercial legal issues.

Tax and financial reporting · Tax compliance and changes in tax law

Our failure to qualify as a REIT would have serious adverse consequences to our security holders. We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements, for which there is limited judicial and administrative interpretation, however, are highly technical and complex. Therefore, we cannot guarantee that we have qualified or will qualify as a REIT in the future.

Industry regulation · Safety and environmental regulations

Compliance or failure to comply with regulatory requirements could result in substantial costs. Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements, building and zoning codes, environmental and other related regulations, and federal, state and local accessibility requirements, including and in addition to those imposed by the Americans with Disabilities Act and the Fair Housing Act.

Information management · Technology vendor dependence

Our business and operations rely on specialized information technology systems, the failure of or inadequacy of which could impact our business. These systems often are developed and hosted by third-party vendors whom we rely upon for ongoing maintenance, upgrades and enhancements. While we maintain a rigorous process around selecting appropriate information technology systems and partnering with vendors, our failure to adequately do so could negatively impact our operations and competitive position.

Cybersecurity and data protection · Data privacy and protection regulations

We are also subject to laws, rules, and regulations in the United States, such as the California Privacy Rights Act (CPRA), relating to the collection, use, and security of resident, tenant, employee and other data. Evolving compliance and operational requirements under the CPRA and the privacy laws of other jurisdictions in which we operate may impose significant costs that are likely to increase over time.