Earnings

Vivmark Raises Synergy Target After First Quarter as Combined REIT

The Tip Desk · November 5, 2026 · 4 min read

Core FFO was $1.03 a share in the three months ended September 30, 2026, as the company lifted expected annual net run-rate operating synergies to $135 million.

Vivmark Residential (VMRK) reported Core FFO of $1.03 a share for the three months ended September 30, 2026, up 5.1% from $0.98 a year earlier, in its first quarter as the combined apartment REIT formed by the August 17 merger of Equity Residential and AvalonBay Communities.

GAAP earnings swung to a $1.27 loss a share from $0.96 of profit, and FFO fell 92.6% to $0.08 a share from $1.08, after $0.92 a share of Merger-related costs that are excluded from Core FFO.

President and CEO Benjamin W. Schall said the company delivered operating results ahead of plan and is increasing its expectations for synergies and upfront value creation.

The company raised expected annual net run-rate operating synergies by $10 million to $135 million, citing increased portfolio NOI opportunities, and said it expects to reach the full run-rate by March 2028, 18 months after the Merger Date. It now expects total Merger-related costs of approximately $725 million, $25 million below an initial $750 million estimate that had included transaction costs only; the updated figure includes both transaction and integration costs.

On August 18, 2026, S&P Global Ratings raised the combined company’s long-term issuer credit rating to ‘A’ with a stable outlook from ‘A-’ for both AVB and EQR.

The merger was accounted for as a reverse acquisition, with EQR the legal acquirer and AVB the accounting acquirer. Results for the three months ended September 30, 2026 reflect AVB alone before the Merger Date and the combined company after it. Each AVB common share was exchanged for 2.793 Vivmark common shares.

For the Merged Same Store Portfolio of 157,377 apartment homes, which combines the company’s Same Store communities with stabilized EQR communities as if owned in all periods, revenues rose 2.4% versus the third quarter of 2025 and NOI rose 1.7%, with expenses up 3.6%. Physical occupancy was 95.8% versus 95.9% a year earlier, and turnover eased to 12.7% from 13.2%. EQR communities will not enter the company’s Same Store Portfolio until January 1, 2028.

Blended lease rate was 3.1% in the third quarter, down from 3.2% in the second quarter and 0.5% in the first. New-lease change was 0.4% after 1.1% in the second quarter and a 3.4% decline in the first; renewal rate achieved was 5.3% after 4.9% and 4.0%.

Chief Operating Officer Michael Manelis said the combined portfolio showed strong physical occupancy and improving pricing momentum across much of the portfolio.

As of quarter-end, development activity represented a total capital cost of $3.8 billion and a weighted average projected NOI of 6.2% of that cost. During the quarter the company completed two wholly-owned communities (761 homes, $291 million) and one unconsolidated joint venture (270 homes, $122 million), started one wholly-owned community (281 homes, $98 million), and sold two wholly-owned communities (467 homes, $208 million) for a $108 million GAAP gain and $51 million economic gain.

Available liquidity was $4.0 billion at quarter-end, against a $5.0 billion unsecured revolving credit commitment and $1.0 billion of commercial paper outstanding. The company repaid $92.0 million of 7.57% unsecured notes and $185.1 million of 3.61% secured mortgages, settled 2.57 million forward-equity shares for $202.0 million, and declared a $0.7025 distribution per common share and unit. Subsequent to quarter-end it repaid $300.0 million of 2.90% notes and $500.0 million of 2.85% notes at par upon maturity.

Fourth-quarter 2026 guidance is Core FFO of $1.01 to $1.05 a share (midpoint $1.03), FFO of $0.92 to $0.96, and EPS of $(0.95) to $(0.91). Full-year 2026 Merged Same Store guidance is revenue up 2.0% to 2.4%, expenses up 4.1% to 4.7% (midpoint 4.4%, or 3.6% excluding about $16 million of additional Merger-related California property taxes), and NOI up 0.8% to 1.4%. The company said the California tax increase is expected to add about $50 million of annual operating expenses beginning in 2027.