AvalonBay Communities and Equity Residential are on the verge of merging, insiders say, with a formal announcement expected as early as Thursday. The transaction would pool two of the nation’s largest multifamily landlords into a single entity, reshaping the U.S. apartment market. AvalonBay shareholders will receive 2.793 Equity Residential shares for each AvalonBay share they hold. The move follows a year of consolidation in the sector.

Both companies have seen their stock climb in recent months on the back of robust rent growth and low vacancy rates. AvalonBay’s market capitalisation stands near $26 billion, while Equity Residential is valued at roughly $25 billion. Combining the balance sheets creates a platform with over 300,000 units, giving the new firm leverage to negotiate construction costs and financing on more favorable terms.

The merger would produce the largest publicly traded owner‑operator of apartments, intensifying competition with private equity‑backed landlords. Investors may reassess exposure to the sector, as the combined balance sheet could attract higher‑yielding debt and support dividend growth. Regulators are likely to scrutinise the deal for antitrust concerns, but the parties appear confident the transaction will close without major obstacles.