The new executive team reporting to President and CEO Benjamin Schall in the AvalonBay Communities-Equity Residential “merger of equals” will have a strong AVB presence.

In addition to claiming five of the seven management spots at the combined company, AVB’s leaders will also have a strong say over capital allocation, according to a news release. The two EQR executives moving into top roles will head up property operations and legal. 

The announcement came as a little bit of a surprise to some. “I think most people expected a little bit more balance in a merger of equals,” Haendel St. Juste, managing director and senior REITs analyst for investment bank Mizuho Securities, told Multifamily Dive in emailed comments. “But the AVB c-suite has a bit more tenure and experience generally.”

St. Juste added that the executive team could take a different shape down the road. “I’m not sure what the longer-term internal succession plans are beyond this current post-merger slate,” he said.

Before the new combined company rolled out its new management team, EQR also released a pair of SEC filings showing how it’s messaging the merger to its rank-and-file team members, as the biggest merger the apartment industry has seen in years heads toward closing in the second half of the year.

The new executive team

Equity Residential Chief Operating Officer Michael Manelis will become executive vice president and chief operating officer of the combined company. He will direct the day-to-day property operations, including leasing, maintenance and engineering; technology; centralized services; and revenue management and marketing, per the release.

AvalonBay CFO Kevin O'Shea will serve as executive vice president and CFO, with responsibility for the balance sheet, capital markets activity, investor relations and financial reporting and controls. 

AVB Chief Investment Officer Matthew Birenbaum will become executive vice president and chief development officer, with oversight of the regional development and construction teams, and chair of the combined company’s management investment committee. 

Sean Breslin moves into a different role at the company. The AVB chief operating officer will be executive vice president and chief investment and growth officer, where he will lead the combined firm’s investments platform, including acquisitions, dispositions, capital partnerships and new business opportunities. 

Breslin, who has prior experience in asset management, investments and fund management, will also lead data analytics and market research.

EQR Executive Vice President, General Counsel and Corporate Secretary Scott Fenster will hold the same title at the new company, leading its legal function, including oversight of regulatory affairs.

AVB Executive Vice President of Portfolio and Asset Management Pamela Thomas will keep the same title at the combined company. Thomas will oversee operational and investment opportunities across the portfolio, as well as capital expenditure initiatives, sustainability, management of joint venture partnerships and retail and mixed-use activities.

AVB Executive Vice President, Human Capital and Administration Alaine Walsh will hold the same title at the combined company. There she will lead human resources, compensation, learning and development and talent development across the organization. 

AvalonBay Executive Vice President and General Counsel Ted Schulman will serve as executive vice president of legal affairs, working with Schall and Fenster through the integration process before transitioning to a senior advisor role. 

Rank-and-file messaging

While AVB will have a strong presence on the leadership team, the combined company’s board of trustees will initially consist of seven existing directors of AvalonBay and seven existing trustees of Equity Residential. Steve Sterrett, current lead independent trustee of EQR, will serve as chairman of the combined company. 

The Arlington, Virginia-based REIT’s shareholders will own approximately 51.2% of the new entity. EQR’s shareholders will own 48.8%, per the original press release announcing the deal.

“We want to begin by reemphasizing why the two companies entered into this transformative merger of equals,” the REITs said in one June 5 SEC filing. “This combination is not about getting bigger just to be bigger. It is about creating a new and fundamentally stronger company.”

The REITs emphasized that “more growth means more opportunities for associates to take on new roles and develop new skills,” as the new company will bring people from both organizations to identify best practices, technologies and ways of working. 

“A merger of equals is not about one company’s way winning out over the other’s. It is about finding the best way forward — from wherever it comes — and building a new company with a new identity in the process,” the companies said in the filing.

The REITs plan to host town halls in their dual headquarters locations — Arlington and Chicago — for employees to ask questions. In the coming weeks, they will establish “integration planning teams and begin the detailed work required to prepare the new company for a successful launch,” according to that SEC filing.

“There is a significant amount of work ahead,” the REITs said in the filing. “Much of it will create meaningful opportunity. We also recognize, however, that not every decision will be universally welcomed, that challenges will arise despite careful planning, and that we will need to continue learning and refining our approach as we move forward.”

In a separate June 5 SEC filing, Equity Residential President and CEO Mark Parrell said decisions regarding the elimination of positions or role changes have not yet been made. However, he said severance will be available to employees who are involuntarily terminated as a result of the merger. 

“Merger-related severance benefits, developed with the support of a third-party consultant and based on current market practices, will vary based on level and tenure, reflecting differences in responsibilities and career progression, while also recognizing longer-term,” Parrell said.

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