e424b3
PROSPECTUS
Filed pursuant to Rule 424(b)(3)
Registration Statement File No. 333-175242
245,711 Shares
EQUITY RESIDENTIAL
Common Shares of Beneficial Interest
This prospectus relates solely to the offer and sale from time to time of up to 245,711 of our
common shares of beneficial interest (“Common Shares”) by the persons listed below, who are, or may
become, shareholders of Equity Residential. In this prospectus we refer to these persons as the
Selling Shareholders. We may issue such Common Shares to the Selling Shareholders, upon their
request, in exchange for their units of limited partnership interest in ERP Operating Limited
Partnership, our operating partnership.
The Selling Shareholders may offer their common shares through public or private transactions,
on or off the New York Stock Exchange, at prevailing market prices, or at privately negotiated
prices. The Selling Shareholders may sell their Common Shares directly or through agents or
broker-dealers acting as principal or agent, or in a distribution by underwriters.
We are registering the Common Shares to permit the holders to sell without restriction in the
open market or otherwise, but the registration of these Common Shares does not necessarily mean
that any holders will elect to exchange their units of limited partnership interest in our
operating partnership or offer or sell any of these Common Shares. Also, we may elect to pay cash
for the units of our operating partnership tendered rather than issue Common Shares. Although we
will incur expenses in connection with the registration of the 245,711 Common Shares, we will not
receive any cash proceeds upon their issuance.
The Common Shares are listed on the New York Stock Exchange under the symbol “EQR”.
Investing in our securities involves risk. Before buying our securities, you should read and
consider the risk factors included in our periodic reports and in other information that we file
with the Securities and Exchange Commission. See “Special Note Regarding Forward-Looking
Statements.”
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is July 19, 2011.
TABLE OF CONTENTS
No dealer, salesperson or other individual has been authorized to give any information or
to make any representations not contained or incorporated by reference in this prospectus in
connection with the offering covered by this prospectus. If given or made, such information or
representations must not be relied upon as having been authorized by us. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the common share, in any
jurisdiction where, or to any person to whom, it is unlawful to make any such offer or
solicitation. Neither the delivery of this prospectus nor any offer or sale made hereunder shall,
under any circumstances, create an implication that there has not been any change in the facts set
forth in this prospectus or in our affairs since the date hereof.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in or incorporated by reference into this prospectus and any
accompanying prospectus supplement contains “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). We intend the
forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in that section. These forward-looking statements relate to, without
limitation, our anticipated future economic performance, our plans and objectives for future
operations and projections of revenue and other financial items, which can be identified by the use
of forward-looking words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate” or
“continue” or the negative thereof or other variations thereon or comparable terms. The cautionary
statements under the caption “Risk Factors” contained in our Annual Report on Form 10-K for the
year ended December 31, 2010, which is incorporated herein by reference, and other similar
statements contained in this prospectus or any accompanying prospectus supplement identify
important factors with respect to forward-looking statements, including certain risks and
uncertainties, that could cause actual results to differ materially from those in such
forward-looking statements.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and, in accordance therewith, we are required to file reports, proxy
statements and other information with the Securities and Exchange Commission (the “Commission”).
You may read and copy these reports, proxy statements and other information at the Public Reference
Room of the Commission, 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of
the reports, proxy and information statements and other information regarding issuers that file
electronically with the Commission by accessing the Commission’s World Wide Web site at
http://www.sec.gov. You may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We have filed the documents listed below with the Commission under the Exchange Act and these
documents are incorporated into this prospectus by reference (other than information furnished
pursuant to Items 2.02 and 7.01 of Form 8-K and any related exhibits):
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a. |
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Annual Report on Form 10-K for the year ended December 31, 2010 (File No.
001-12252). |
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b. |
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File No.
001-12252). |
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c. |
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Current Reports on Form 8-K filed on February 3, 2011 (two reports), April 8,
2011, May 23, 2011, June 22, 2011, July 12, 2011,
July 14, 2011 and July 18, 2011 (File No.
001-12252). |
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d. |
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Description of our common shares contained in our registration statement on
Form 8-A/A dated August 10, 1993. |
All documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
(i) on or after the date of the initial filing of the registration statement containing this
prospectus and prior to the effectiveness of this registration statement and (ii) on or after the
date of this prospectus and prior to the termination of the offering of all Common Shares under
this prospectus will also be deemed to be incorporated by reference in this prospectus and to be a
part hereof from the date of filing those documents. We are not, however, incorporating by
reference any documents or portions thereof, whether specifically listed above or filed in the
future, that are not deemed “filed” with the Commission, including, but not limited to, any
information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or any exhibits furnished pursuant
to Item 9.01 of Form 8-K.
Any statement contained in this prospectus or in a document incorporated or deemed to be
incorporated by reference herein will be modified or superseded by inconsistent statements in any
document we file in the future that will be deemed incorporated by reference herein, including any
prospectus supplement that supplements this prospectus. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus
or any accompanying prospectus supplement. Subject to the foregoing, all information appearing in
this prospectus and each accompanying prospectus supplement is qualified in its entirety by the information appearing
in the documents incorporated by reference.
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We will provide, without charge, copies of all documents that are incorporated herein by
reference (not including the exhibits to such information, unless such exhibits are specifically
incorporated by reference in such information) to each person, including any beneficial owner, to
whom this prospectus is delivered upon written or oral request. Requests should be directed to
Equity Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attention:
Martin McKenna (telephone number: (312) 474-1300).
Unless otherwise indicated, when used herein, the terms “we” and “us” refer to Equity Residential,
a Maryland real estate investment trust, and its subsidiaries, including ERP Operating Limited
Partnership, its operating partnership.
THE COMPANY
We are a Maryland real estate investment trust (“REIT”) formed in March 1993 and are an S&P
500 company focused on the acquisition, development and management of high quality apartment
properties in top United States growth markets. We have elected to be taxed as a REIT.
We are one of the largest publicly traded real estate companies and the largest publicly
traded owner of multifamily properties in the United States of America (based on the aggregate
market value of our outstanding common shares, the number of apartment units wholly owned and total
revenues earned). Our corporate headquarters are located in Chicago, Illinois and we also operate
property management offices in each of our markets.
Our executive offices are located at Two North Riverside Plaza, Suite 400, Chicago, Illinois
60606, and our telephone number is (312) 474-1300.
NO PROCEEDS TO THE COMPANY
We will not receive any of the proceeds from the sale of Common Shares by Selling
Shareholders. We will pay all of the costs and expenses incurred in connection with the
registration under the Securities Act of the offering made hereby. Notwithstanding the previous
sentence, any brokerage fees and commissions, fees and disbursements of legal counsel for the
Selling Shareholders and share transfer and other taxes attributable to the issuance by us of the
Common Shares will be paid by the Selling Shareholders.
SELLING SHAREHOLDERS
We may issue up to 245,711 Common Shares to the Selling Shareholders if and to the extent that
the Selling Shareholders who currently hold units of limited partnership interest in our operating
partnership (“Units”) exchange their Units and we issue Common Shares to them in exchange therefor.
Following our issuance of any of the offered Common Shares, the Selling Shareholders may resell
the Common Shares covered by this prospectus as provided under the Plan of Distribution section of
this prospectus or as described in an applicable prospectus supplement.
The following table sets forth the name of each Selling Shareholder and the maximum number of
Common Shares to be owned upon exchange of Units, all of which may be offered by such Selling
Shareholders pursuant to this prospectus. The number of Common Shares set forth in the following
table is also the number of Common Shares beneficially owned by each selling shareholder prior to
the offering, except as otherwise set forth therein. Because the Selling Shareholders may sell all
or some of their offered Common Shares, no estimate can be made of the number of offered Common
Shares that will be sold by the Selling Shareholders or that will be owned by the Selling
Shareholders upon completion of the offering. We cannot assure you that the Selling Shareholders
will sell any of the offered Common Shares. In addition, we may elect to pay cash for any Units
exchanged, rather than exchanging those Units for Common Shares. The Common Shares covered by this
prospectus represent less than one percent of the total Common Shares outstanding as of March 31,
2011.
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Number of Common |
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Shares Beneficially Owned and |
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| Name of Selling Shareholder |
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Offered Hereby |
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Macklowe Properties, LLC |
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186,685 |
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CPC, Inc. |
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24,754 |
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James D.S. Kim Family Trust |
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9,869 |
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The Gill Trust |
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5,967 |
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Number of Common |
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Shares Beneficially Owned and |
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| Name of Selling Shareholder |
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Offered Hereby |
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Teton, LLC |
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5,388 |
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Karin Lida Crilly-Hays |
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4,733 |
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Steven F. Glass |
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2,442 |
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Purcel Woodward and Ames, Inc. |
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1,886 |
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SRG Vintage, L.P. |
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1,129 |
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Estate of Allen Roy Stakee c/o Faye Fisher Stakee, Administrator |
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814 |
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Judy B. Blatt |
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745 |
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Lillian H. Wong |
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289 |
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Claude & Nina Gruen |
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289 |
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Thomas J. and Irene W. Shephard Sr., Revocable Family Trust |
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289 |
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Robert L. Wong |
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144 |
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Cynthia Wong |
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144 |
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Robert & Eleanor Lawrence 1992 Family Trust |
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144 |
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Total |
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245,711 |
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ADDITIONAL FEDERAL INCOME TAX CONSIDERATIONS
The following discussion supplements the discussion under the heading “Federal Income Tax
Considerations” in our annual report on Form 10-K for the year ended December 31, 2010, which has
been incorporated into this prospectus by reference. The following discussion summarizes the
material federal income tax considerations that may be relevant to a Selling Shareholder who
desires to have its Units exchanged for Common Shares.
Tax Treatment of an Exchange of Units. If a Selling Shareholder exchanges Units of limited
partnership interest in our operating partnership for Common Shares, the exchange will be a taxable
event and, as a result, the Selling Shareholder will recognize gain or loss. The determination of
the amount of gain or loss that will be recognized by a Selling Shareholder will be based on the
difference between the amount realized for tax purposes and the tax basis in the Selling
Shareholder’s Units. See “Basis of Units” below. The “amount realized” will be equal to the
product of (i) the number of Units exchanged, multiplied by the price of the Common Shares received
on the date of the exchange plus (ii) the portion of our operating partnership’s liabilities
allocable to the Units exchanged. To the extent that this amount exceeds the Selling Shareholder’s
tax basis in the Units exchanged, the Selling Shareholder will recognize gain. The amount of gain
the Selling Shareholder recognizes could exceed the value of the Common Shares that the Selling
Shareholder receives if the Selling Shareholder has a “negative tax capital account.” It is even
possible that the tax liability resulting from this gain could exceed the value of the Common
Shares that the Selling Shareholder receives.
Except as described below, any gain recognized upon a sale or other disposition of Units,
which includes the exchange of Units for Common Shares, will be treated as gain attributable to the
sale or disposition of a capital asset. To the extent, however, that the amount realized by a
Selling Shareholder in an exchange of Units for Common Shares attributable to a Selling
Shareholder’s share of “unrealized receivables” of our operating partnership exceeds the Selling
Shareholder’s basis attributable to the “unrealized receivables”, the excess will be treated as
ordinary income. Unrealized receivables include, to the extent not previously included in our
operating partnership’s income, any rights to payments for services rendered or to be rendered.
Unrealized receivables also include amounts that would be subject to recapture as ordinary income
if our operating partnership had sold its assets at their fair market value at the time of the
transfer of the Units.
For individuals, trusts and estates, net capital gain from the sale of an asset held 12 months
or less is subject to tax at the applicable rate for ordinary income. For these taxpayers, the
maximum rate of tax on the net capital gain from a sale or exchange of an asset held for more than 12 months generally is 15%. An exception to the
general 15% rule applies, however, to net capital gains attributable to the sale of depreciable
real property. Under the exception, gain attributable to prior depreciation deductions not
otherwise recaptured as ordinary income under other depreciation recapture rules is subject to a
rate of tax of 25%. The Internal Revenue Service has issued final Treasury regulations providing
that the 25% rate applies to sales or exchanges of interests in partnerships that hold depreciable
real property. Consequently, any gain on the sale or
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exchange of a unit held for more than 12 months could be treated partly as gain from the sale of depreciable real property subject to the
25% rate, partly as gain from the sale of a long-term capital asset subject to a 15% tax rate, and
to the extent that the gain is attributable to unrealized receivables, partly as ordinary income.
For taxable years beginning after December 31, 2012, the 15% capital gains tax rate is
currently scheduled to increase to 20% and the rate applicable to dividends will increase to the
tax rate then applicable to ordinary income. In addition, Selling Shareholders that are U.S.
domestic corporations may be required to treat up to 20% of some capital gain dividends as ordinary
income. Selling Shareholders should consult their own tax advisors regarding the effect, if any,
of these changes to tax rates scheduled to occur beginning in 2013.
Tax Treatment of a Redemption of Units. We have the right to pay to a Selling Shareholder
cash in lieu of issuing Common Shares in exchange for Units. If we elect to redeem Units for cash,
the tax consequences to a Selling Shareholder would depend on whether or not the redemption is a
redemption of all of a Selling Shareholder’s Units. If the redemption is a redemption of all of a
Selling Shareholder’s Units, the Selling Shareholder would recognize taxable gain only to the
extent that the cash, plus the share of our operating partnership’s liabilities allocable to the
redeemed Units, exceeded the Selling Shareholder’s tax basis in all of the Selling Shareholder’s
Units immediately before the redemption. On the other hand, the Selling Shareholder would
recognize taxable loss only to the extent that the Selling Shareholder’s tax basis in all of the
Selling Shareholder’s Units immediately before the redemption exceeded the cash, plus the share of
our operating partnership’s liabilities allocable to the redeemed Units. If the redemption is a
redemption of less than all of the Selling Shareholder’s Units, the Selling Shareholder would not
be permitted to recognize any loss occurring on the transaction and would recognize taxable gain
only to the extent that the cash, plus the share of our operating partnership’s liabilities
allocable to the redeemed Units, exceeded the Selling Shareholder’s tax basis in all of the Selling
Shareholder’s Units immediately before the redemption.
Basis of Units. In general, a Selling Shareholder who originally received Units in exchange
for a contribution of property to our operating partnership had an initial tax basis in the Units
equal to the Selling Shareholder’s basis in the contributed property. A Selling Shareholder’s tax
basis in the Units generally is increased by the Selling Shareholder’s share of our operating
partnership’s taxable income and increases in the Selling Shareholder’s share of liabilities of our
operating partnership allocated to such Selling Shareholder. If the Selling Shareholder is an
obligated partner under a deficit restoration obligation or has guaranteed partnership
indebtedness, the Selling Shareholder’s basis may also include additional liabilities. A Selling
Shareholder’s initial tax basis in the Units generally is decreased, but not below zero, by the
Selling Shareholder’s share of our operating partnership’s distributions, decreases in the Selling
Shareholder’s liabilities in our operating partnership allocated to such Selling Shareholder, the
amount of any Selling Shareholder liabilities assumed by the operating partnership, the Selling
Shareholder’s share of losses of our operating partnership, and the Selling Shareholder’s share of
nondeductible expenditures of our operating partnership that are not chargeable to capital.
Potential Application of the Disguised Sale Rules to a Redemption of Units. There is a risk
that if a Unit is redeemed, particularly if it is redeemed within two years of when it was issued,
the IRS might contend that the original transaction pursuant to which the Units were issued should
be treated as a “disguised sale” of property. Under the disguised sale rules, unless an exception
applies, a partner’s contribution of property to a partnership and a simultaneous or subsequent
transfer of money or other consideration, including the assumption of or taking subject to a
liability, from the partnership to the partner may be treated as a sale, in whole or in part, of
the property by the partner to the partnership. If money or other consideration is transferred by
a partnership to a partner within two years of the partner’s contribution of property, the
transactions are presumed to be a sale of the contributed property unless the facts and
circumstances clearly establish that the transfers do not constitute a sale. If two years have
passed between the transfer of money or other consideration and the contribution of property, the
transactions will not be presumed to be a sale unless the facts and circumstances clearly establish
that the transfers constitute a sale.
You are advised to consult with your own tax advisors regarding the specific tax consequences
of the exchange or redemption of Units, including the federal, state, local, foreign or other tax
consequences relating thereto.
PLAN OF DISTRIBUTION
Any of the Selling Shareholders may from time to time, in one or more transactions, sell all
or a portion of the offered Common Shares on the New York Stock Exchange, in the over-the-counter
market, on any other national securities exchange on which the Common Shares are listed or traded,
in negotiated transactions, in underwritten transactions or otherwise, at prices then prevailing or
related to the then current market price or at negotiated prices. The offering price of the
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offered Common Shares from time to time will be determined by the Selling Shareholders and, at the time of
such determination, may be higher or lower than the market price of the Common Shares on the New
York Stock Exchange. In connection with an underwritten offering, underwriters or agents may
receive compensation in the form of discounts, concessions or commissions from a Selling
Shareholder or from purchasers of offered Common Shares for whom they may act as agents, and
underwriters may sell offered Common Shares to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Under agreements that may be
entered into by us, underwriters, dealers and agents who participate in the distribution of offered
Common Shares may be entitled to indemnification by us against certain liabilities, including
liabilities under the Securities Act, or to contribution with respect to payments which such
underwriters, dealers or agents may be required to make in respect thereof. The offered Common
Shares may be sold directly or through broker-dealers acting as principal or agent, or pursuant to
a distribution by one or more underwriters on a firm commitment or best-efforts basis. The methods
by which the offered Common Shares may be sold include: (a) a block trade in which the
broker-dealer so engaged will attempt to sell the offered Common Shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a
broker-dealer as principal and resale by such broker-dealer for its account pursuant to this
prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (d) an exchange distribution in accordance with the rules of the New York Stock
Exchange; (e) privately negotiated transactions; and (f) underwritten transactions. The selling
shareholders and any underwriters, dealers or agents participating in the distribution of the
offered Common Shares may be deemed to be “underwriters” within the meaning of the Securities Act,
and any profit on the sale of the offered Common Shares by the Selling Shareholders and any
commissions received by any such broker-dealers may be deemed to be underwriting commissions under
the Securities Act.
When a Selling Shareholder elects to make a particular offer of Common Shares, a prospectus
supplement, if required, will be distributed which will identify any underwriters, dealers or
agents and any discounts, commissions and other terms constituting compensation from such Selling
Shareholder and any other required information will be identified in a prospectus supplement.
In order to comply with the securities laws of certain states, if applicable, the Common
Shares may be sold only through registered or licensed brokers or dealers. In addition, in certain
states, the Common Shares may not be sold unless they have been registered or qualified for sale in
such state or an exemption from such registration or qualification requirement is available and is
complied with.
We have agreed to pay all costs and expenses incurred in connection with the registration
under the Securities Act of the Common Shares registered hereunder, including, without limitation,
all registration and filing fees, printing expenses and fees and disbursements of our counsel and
accountants. In addition, the Selling Shareholders will pay any brokerage fees and commissions,
fees and disbursements of their legal counsel and share transfer and other taxes attributable to
the sale of the Common Shares.
EXPERTS
The consolidated financial statements and schedule of Equity Residential appearing in Equity
Residential’s Annual Report (Form 10-K) for the year ended December 31, 2010, as amended by our
Current Report on Form 8-K dated May 23, 2011, and the effectiveness of Equity Residential’s
internal control over financial reporting as of December 31, 2010 also included in the Form 10-K,
have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth
in their reports thereon included therein, and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by reference, in reliance upon such
reports given on the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The legality of the offered Common Shares has been passed upon for us by the law firm of DLA
Piper LLP (US). Certain tax matters have been passed upon for us by DLA Piper LLP (US), Chicago,
Illinois, our special tax counsel.
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245,711 Shares
EQUITY RESIDENTIAL
Common Shares of Beneficial Interest
PROSPECTUS
July 19, 2011