Residential REITs: Resi Rundown: June underwhelms, NYC freezes rents, ROAD to Housing paused

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Residential REITs: Resi Rundown: June underwhelms, NYC freezes rents, ROAD to Housing paused

Equity Residential (EQR)

Our $76 PO for EQR trades in line with our forward NAV. We derive our NAV estimate by

applying a 5.3% cap rate to our forward NOI estimate. We use a 5.3% cap rate based on

our view of interest rates over the next year, current private market/transaction comps,

and the market exposure of EQR. The upside risks to our price objective are better-than-

expected employment and operating conditions in EQR's markets and lower interest

rates. The downside risks to our price objective are employment and operating

conditions in EQR's markets deteriorating beyond our expectations and higher interest

rates. The development pipeline also exposes EQR to project execution and lease-up risk.

In addition, a reduction in GSE (government-sponsored enterprise) lending to the

multifamily sector could weigh on EQR's access to capital, borrowing costs and direct

real estate values. An additional risk is if the announced deal with AvalonBay (expected

2H26) does not close.

GO Residential REIT (YGOU)

Our price objective for GO.U of $11 is based on our 12-month forward NAV to which we

apply a 10% discount. We derive our NAV by applying a 6.0% cap rate to our forward

NOI estimate. We use a 6.0% cap rate based on our view of interest rates over the next

year, current private market/transaction comps and the market exposure of GO.U.

The upside risks to our PO are better job growth and operating conditions in GO.U's

markets and lower interest rates.

The downside risks to our price objective are employment and operating conditions in

GO.U's markets deteriorating beyond our expectations and higher interest rates. The