Equity Residential (now Vivmark Residential) grew normalized FFO 3.0% to $1.02 a share in its last standalone quarter as San Francisco rents jumped, while a property-sale loss cut GAAP EPS 40% to $0.30.
Revenue
$785M
+2.1% YoY
Net income
$114M
-40.7% YoY
Diluted EPS
$0.30
-40.0% YoY
How VMRK compares with Real Estate peers
Figure
VMRK
Peer median
Rank
Revenue growth (YoY)
+2.1%
+6.8%
23rd of 28
EPS growth (YoY)
-40.0%
+5.9%
21st of 27
Rank 1 = fastest revenue growth, fastest EPS growth. Peers are the other Real Estate companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
Rents held up, a property-sale loss sank GAAP profit, and this was Equity Residential's last quarter as a standalone company
Vivmark Residential (NYSE: VMRK) is the new name of Equity Residential (formerly NYSE: EQR). The company took the name on August 17, 2026, when its all-stock merger with AvalonBay Communities closed. This report covers the second quarter of 2026 (April to June), the last period Equity Residential reported on its own, filed on July 30, 2026. Anyone searching for "EQR earnings" or "VMRK earnings" is looking at the same company and the same SEC registrant.
The quarter's operating results were steady. Rental income rose 2.1% to $785.0 million. Normalized FFO, the per-share cash-earnings figure apartment REITs are judged on, rose 3.0% to $1.02. Management raised its full-year outlook for rent and property income. GAAP earnings per share fell 40% to $0.30. The main reason is that this quarter included a $16.7 million loss on selling two properties, while the same quarter last year included a $58.3 million gain.
At a glance
Normalized FFO of $1.02 per share, up 3.0%: the underlying business earned more per share. About half of that gain came from having about 2% fewer shares after buybacks, not from the properties.
Same-store revenue up 1.9%, expenses up 3.0%: costs are rising faster than rents. Profit from properties owned in both years (same-store NOI) grew only 1.4%.
San Francisco same-store revenue up 7.0%, Denver down 6.4%: the coastal markets carried the quarter, while the Sun Belt and mountain markets with heavy new construction pulled it down.
Why GAAP profit and FFO tell different stories for a REIT
A REIT (real estate investment trust) owns property and has to pay out most of its taxable income as dividends. Accounting rules make it charge depreciation: each year it deducts part of each building's cost, as if the building were wearing out. Well-located apartment buildings usually hold or gain value, so that charge makes profit look smaller than the cash the business generates. This quarter depreciation was $246.4 million, more than twice the $117.7 million of net income. GAAP profit also swings with one-off gains and losses on property sales.
FFO (funds from operations) is the industry's standard fix. It starts from net income, adds back real-estate depreciation, and removes gains and losses on property sales. goes further and also removes items the company considers non-recurring, such as litigation reserves and merger costs. For this quarter, EPS was $0.30, FFO was $1.00 per share and Normalized FFO was $1.02 per share.
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NOI (net operating income) is rental income minus the direct cost of running the buildings: property taxes, insurance, payroll, utilities and repairs. It is the core profit measure for a single property. "Same-store" compares only the 78,612 apartments the company owned and ran in a stable state in both periods, so acquisitions, sales and new buildings don't distort the growth rate. The company does not report an operating-income line, so no operating margin is shown.
What drove the quarter
Rents rose slowly, and occupancy slipped a little. Same-store residential revenue grew 2.1%. By component, higher lease rates added 1.8 points, lower bad debt (rent that isn't collected) added 0.2 points, and other income added 0.5 points. Concessions (upfront discounts to tenants) took away 0.1 points and vacancy took away 0.3 points. The average rent was $3,194 a month, up 2.5%. Physical occupancy fell from 96.6% to 96.2%. The company said revenue growth was "driven by strong Physical Occupancy and better than anticipated Renewal Rate Achieved". Occupancy was still high but lower than a year earlier.
Existing tenants carried the pricing. Tenants who renewed paid 5.2% more than on their previous lease, and 60.0% of tenants offered a renewal accepted it. New tenants paid 0.7% less than the previous tenant in the same apartment. The blended rent change across both groups was +2.8%, up from +1.5% in Q1. The preliminary July figures improved again: blended +3.0%, new leases -0.1%.
Coastal cities did well and the Sun Belt was weak. Same-store residential results by market:
Market
Share of NOI
Revenue
NOI
San Francisco
17.9%
+7.0%
+11.0%
New York
14.3%
+3.8%
+3.7%
Boston
10.7%
+1.6%
-0.1%
Southern California
24.4%
+1.2%
-0.3%
Seattle
9.0%
+1.1%
-0.1%
Washington, D.C.
14.9%
+0.8%
-0.5%
Atlanta
3.1%
-0.3%
-2.6%
Dallas/Austin
2.2%
-1.3%
+0.8%
Denver
3.5%
-6.4%
-9.9%
San Francisco's 11.0% NOI gain was the biggest single driver of the company-wide result. Management's guidance raise pointed to "strong momentum in the San Francisco market along with improvements in Bad Debt". Denver was the weakest market: its average rent fell 7.7%. The two markets that have always made up most of the portfolio, Southern California and Washington, D.C., grew revenue about 1% but saw NOI shrink.
Costs rose faster than rent. Same-store operating expenses increased 3.0%. Utilities rose 9.6% ($3.3 million), which was almost half the $7.0 million increase. On-site payroll rose 3.1% and insurance 4.0%. Real estate taxes, the largest cost at 40% of the total, rose only 1.3%.
What the headline numbers hide
About half the per-share growth came from buybacks. In the first half of 2026 the company spent $219.4 million buying back 3.46 million shares at an average price of $63.42. Diluted shares and units fell 1.9% to 383.9 million. Total Normalized FFO rose only 1.7%, from $386.8 million to $393.4 million. The company's own bridge from last year's $0.99 to this year's $1.02 shows +$0.02 from same-store NOI, +$0.01 from new buildings filling up, -$0.01 from property sales and purchases, -$0.01 from higher interest cost, and +$0.02 from "other items (primarily corporate overhead and share repurchase impacts)".
Same-store NOI grew but total NOI was flat. Same-store NOI rose 1.4%, yet total NOI was $520.0 million against $520.2 million a year earlier. NOI from properties outside the same-store pool fell from $17.6 million to $10.5 million, and their operating costs rose from $15.7 million to $25.1 million. The same-store figure alone makes the portfolio look better than the full income statement does.
The GAAP decline mostly comes from property sales. In Q2 the company sold two older buildings, one in Los Angeles and one in San Francisco, with 515 apartments and an average age of 30 years. The price was $164.0 million, and the sale was booked at a $16.7 million loss. Q2 2025 had a $58.3 million gain from sales. That $75 million swing explains most of the $81 million drop in net income. Higher interest cost ($82.5 million, up from $75.3 million) and higher "other expenses" explain most of the rest.
What Normalized FFO leaves out. In Q2 the company excluded $10.9 million net ($0.03 per share): a $13.5 million litigation reserve, $5.1 million of merger transaction costs and $2.9 million of merger financing costs, partly offset by excluding a $10.1 million gain on investment securities. For the first half the litigation figure is much larger, at $50.1 million. It relates mainly to a $56.0 million settlement, paid in May, of the class action alleging that apartment owners colluded on rents through RealPage software, and to a California late-fee class action settled for about $42.7 million. Similar RealPage-related cases brought by D.C. and Maryland are still open. These costs appear to be one-time, but they have recurred for several years. Stripping them out makes Normalized FFO look smoother than the cash that actually went out.
Cash conversion weakened, for identifiable reasons. Operating cash flow for the first half was $702.4 million, down $82.7 million (10.5%) from a year earlier and about 91% of Normalized FFO. The 10-Q attributes the decline to about $58.7 million of litigation settlement payments, merger costs and higher interest payments. Excluding those, cash generation is roughly in line with Normalized FFO.
Guidance: the ranges narrowed and the midpoints rose slightly. The full-year same-store outlook is now revenue +2.1% to +2.7% (previously +1.2% to +3.2%) and NOI +1.5% to +2.1% (previously +0.5% to +2.5%). The NOI midpoint rose 0.3 points. The expense outlook is unchanged at +3.0% to +4.0%, and occupancy guidance was trimmed to 96.3% from 96.4%. The company withdrew its EPS, FFO and Normalized FFO per-share guidance because of the merger, so there is no per-share target to measure the company against.
Takeaway: On a standalone basis, Equity Residential's per-share growth in this final quarter came about equally from its properties and from buybacks. Same-store NOI grew only 1.4% because expenses (+3.0%) rose faster than revenue (+1.9%), and the NOI gains were concentrated in San Francisco and New York. The merged Vivmark inherits a business where San Francisco and New York are producing the gains and where cost control, not rent growth alone, will determine whether per-share earnings keep rising.
Balance sheet
Total debt was $8.26 billion at June 30. Net debt was 4.28 times normalized EBITDAre, a standard leverage measure: debt compared with a year of operating cash earnings before interest, taxes and depreciation. That is down slightly from 4.35x at March 31. 90.0% of NOI came from properties not pledged as collateral for loans, which gives the company room to borrow. The weighted interest rate on its debt was 3.95%, compared with 3.93% a year earlier. In May the company arranged a bridge loan facility of up to $2.0 billion for merger costs and refinancing, and it had not drawn on it by June 30. Since the merger closed, the operating partnership has raised its commercial paper program (short-term borrowing) from $1.5 billion to $2.5 billion (8-K, September 16, 2026).
What comes next: the merger changes what future reports will show
The merger with AvalonBay closed on August 17, 2026. AvalonBay shareholders received 2.793 new shares for each AvalonBay share, about 400 million shares in total. The combined company owns more than 184,000 apartments, has dual headquarters in Chicago and Arlington, Virginia, and is led by former AvalonBay CEO Benjamin Schall.
One accounting detail matters for anyone comparing future results with this report. The 10-Q states that the deal is accounted for as a reverse acquisition, with AvalonBay as the accounting acquirer. Vivmark's future financial statements "will present AvalonBay's historical balances and results", and Equity Residential's assets will be recorded again at fair value as of the closing date. As a result, Vivmark's Q3 2026 report will not be directly comparable to the Equity Residential figures above. Year-over-year comparisons will be against AvalonBay's past results, and the revaluation of Equity Residential's buildings is likely to change depreciation and GAAP earnings.
Management's latest outlook. On September 15, 2026, Vivmark gave a first combined outlook. It expects full-year 2026 same-store residential revenue growth of about 2% at the midpoint for the combined legacy AvalonBay and Equity Residential pools, in line with what both companies had guided on July 22. As of September 11, same-store net effective asking rents were up 3.6% year over year and physical occupancy was 95.7%. The company named Northern California and New York City as the strongest markets. That occupancy figure is below the 96.2% Equity Residential reported for Q2, although the two figures are measured on different portfolios. It is worth watching in the first combined quarter.
Our read. On a standalone basis, the underlying trend is modest growth: same-store revenue of about 2%, expenses of 3–4%, and NOI growth in the low single digits. San Francisco and New York are the main sources of growth, and the Sun Belt markets are still working through a surplus of new apartments. For the combined company, the questions for the next few quarters are:
whether cost savings from the merger show up in property management and overhead;
how much the fair-value revaluation raises depreciation and lowers GAAP EPS;
whether renewal increases of about 5% hold as occupancy moves toward 95.7%;
whether the remaining RealPage-related lawsuits add new litigation charges.
Source: Equity Residential Form 10-Q for the quarter ended June 30, 2026 (filed July 30, 2026) and the Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 22, 2026). Merger, name-change and outlook details are from the company's 8-K filings of May 21, August 17 and September 15, 2026.