Investments in Partially Owned Entities

12 Months Ended

Dec. 31, 2024

Investments In Partially Owned Entities [Abstract]

The Company has invested in various entities with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated).

Consolidated VIEs

In accordance with accounting standards for consolidation of VIEs, the Company consolidates ERPOP on EQR’s financial statements. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. The limited partners are not able to exercise substantive kick-out or participating rights. As a result, ERPOP qualifies as a VIE. EQR has a controlling financial interest in ERPOP and, thus, is ERPOP’s primary beneficiary. EQR has the power to direct the activities of ERPOP that most significantly impact ERPOP’s economic performance as well as the obligation to absorb losses or the right to receive benefits from ERPOP that could potentially be significant to ERPOP.

The Company has various equity interests in certain joint ventures that have been deemed to be VIEs, and the Company is the VIEs’ primary beneficiary. As a result, the joint ventures are required to be consolidated on the Company’s financial statements. The following table summarizes the Company’s consolidated joint ventures as of December 31, 2024 and 2023:


	Operating Properties (1)				Projects Under Development (2)				Projects Held for Development (2), (3)
	Properties		Apartment Units		Projects		Apartment Units (4)		Projects		Apartment Units (4)
2024 Consolidated Joint Ventures (VIE)		12		2,656		1		440		—		—
2023 Consolidated Joint Ventures (VIE)		14		3,060		—		—		1		440

(1)

The land parcel under one of the properties in 2023 is subject to a long-term ground lease.

(2)

Represents separate consolidated joint ventures for the purpose of developing multifamily rental properties.

(3)

Represents separate consolidated joint ventures that have not yet started.

(4)

Represents the intended number of apartment units to be developed.

The following table provides consolidated assets and liabilities related to the Company's VIEs as of December 31, 2024 and 2023 (amounts in thousands):


	December 31, 2024		December 31, 2023
Consolidated Assets	$	528,076	$	599,788
Consolidated Liabilities	$	47,137	$	41,153

During the years ended December 31, 2024 and 2023, the Company completed the following transactions:

2024

•

Acquired its joint venture partner’s 8.0% interest in a 312-unit apartment property for $3.1 million in cash (the Company had previously repaid the $67.9 million construction mortgage during 2023; see further discussion below). The property is now wholly owned. In connection with the buyout, the carrying amount of the Noncontrolling Interests – Partially Owned Properties totaling $4.2 million was reduced to zero and the remaining $1.1 million was recorded to paid in capital/General Partner's Capital; and

•

Sold one partially owned property consisting of 92 apartment units for approximately $29.5 million.

2023

•

Acquired its joint venture partner's 10.0% interest in a 200-unit apartment property for $4.6 million, of which the Company paid $3.7 million in cash and ERPOP issued $0.9 million of 3.00% Series Q Preference Units (see Note 3 for additional

discussion). The property is now wholly owned. In connection with the buyout, the carrying amount of the Noncontrolling Interests – Partially Owned Properties totaling $3.7 million was reduced to zero and the remaining $0.9 million was recorded to paid in capital/General Partner's Capital. The Company also repaid $64.7 million of mortgage debt at par prior to maturity in conjunction with the buyout;

•

Repaid the $67.9 million outstanding principal balance of the variable rate construction mortgage for one of its consolidated development joint ventures;

•

Sold one partially owned property consisting of 166 apartment units for approximately $60.1 million; and

•

Entered into an amended joint venture agreement for one of the unconsolidated projects held for development for the purpose of making the Company the joint venture manager and responsible for funding any further budgeted project costs up to a $139.0 million commitment as preferred and mezzanine contributions. The project is now consolidated. There was no funding at the closing of the amended joint venture. See the supplemental information in the consolidated statements of cash flows for disclosure of the consolidated amounts.

Investments in Unconsolidated Entities

The Company has various equity interests in certain joint ventures that are unconsolidated and accounted for using the equity method of accounting. Most of these have been deemed to be VIEs and the Company is not the VIEs' primary beneficiary. The remaining have been deemed not to be VIEs and the Company does not have a controlling voting interest.

The following table and information summarizes the Company’s investments in unconsolidated entities as of December 31, 2024 and 2023 (amounts in thousands except for ownership percentage):


	December 31, 2024			December 31, 2023			Ownership Percentage
Investments in Unconsolidated Entities:
Various Real Estate Holdings (VIE)	$	34,510		$	35,421		Varies
Projects Under Development and Land Held for Development (VIE)		323,998			220,192		62% - 95% (1)
Real Estate Technology Funds/Companies (VIE)		28,276			26,691		Varies
Other		(253	)		(255	)	Varies
Investments in Unconsolidated Entities	$	386,531		$	282,049

(1)

In certain instances, the joint venture agreements contain provisions for promoted interests in favor of our joint venture partner. If the terms of the promoted interest are attained, then our share of the proceeds from a sale or other capital event of the unconsolidated entity may be less than the indicated ownership percentage.

The following table summarizes the Company’s unconsolidated joint ventures that were deemed to be VIEs as of December 31, 2024 and 2023:


	Operating Properties (1)				Real Estate Holdings (2)		Projects Under Development (3), (4)				Projects Held for Development (3), (5)
	Properties		Apartment Units		Entities		Projects		Apartment Units (6)		Projects		Apartment Units (6)
2024 Unconsolidated Joint Ventures (VIE)		4		1,262		3		4		1,359		2		526
2023 Unconsolidated Joint Ventures (VIE)		—		—		3		6		1,982		4		1,164

(1)

The land parcel under one of these properties is subject to a long-term ground lease.

(2)

Represents entities that hold various real estate investments.

(3)

Represents separate unconsolidated joint ventures for the purpose of developing multifamily rental properties.

(4)

The land parcel under one of the projects in 2023 is subject to a long-term ground lease.

(5)

Represents separate unconsolidated joint ventures that have not yet started.

(6)

Represents the intended number of apartment units to be developed.

New Development Joint Ventures

The following table provides information on total unconsolidated development joint ventures entered into during the year ended December 31, 2023 (there were no new development joint ventures entered into during the year ended December 31, 2024) (amounts in thousands except for number of unconsolidated joint ventures and apartment units).


	December 31, 2023
Number of unconsolidated joint ventures (1)		2
Apartment units (2)		639
Investments in unconsolidated entities – acquisitions	$	2,800

(1)

The entities qualify as VIEs, but the Company is not the primary beneficiary because it does not have the power to direct the activities that most significantly impact the VIE’s performance. Therefore, the entities are unconsolidated and recorded using the equity method of accounting. See Note 2 for additional discussion.

(2)

Represents the intended number of apartment units to be developed.