Major multifamily REITs AvalonBay Communities and Equity Residential are in talks to unite.

The discussions are in very early stages, and a transaction isn't guaranteed at this point, anonymous sources told Bloomberg.

But any transaction would be significant for the industry. AvalonBay and Equity Residential are both valued at about $25B, and any combination of the two would likely trigger antitrust attention, according to Bloomberg.

Arlington, Virginia-based AvalonBay Communities and Chicago-based Equity Residential are coming off a rough 2025 in which expenses outpaced operating income.

"2025 was a challenging year for the rental housing industry, including Equity Residential," CEO Mark Parrell said on a February earnings call.

The REITs reported rosier first-quarter earnings this week, with both expecting the supply hangover from the pandemic to finally burn off.

Equity Residential owns and oversees just over 300 properties containing more than 85,000 apartments across the country. AvalonBay owns or has an interest in 319 properties with more than 98,000 apartments across 11 states.

EQR's stock was up 1.16% and AvalonBay's was up 1.2% after hours following the Wednesday evening report of a potential union.

Equity Residential has faced antitrust allegations through a Department of Justice lawsuit filed against RealPage that also ensnared many of the country's biggest landlords. That suit said the parties were colluding to set rents using RealPage software. AvalonBay wasn't among the landlords included in the case.

As part of a class-action suit unrelated to the federal antitrust case, EQR settled earlier this month for $56M.