Equity Residential (EQR) and AvalonBay Communities (AVB) are expected to benefit from their merger through cost savings and stronger technology capabilities, BofA Securities said in a note Wednesday.

The companies said last week they plan to merge in an all-stock deal that will create one of the largest apartment landlords in the US with a combined enterprise value of about $69 billion.

The analysts said, in the short term, the benefits are expected to come mainly from expense savings, while over time the larger platform could create new revenue opportunities, improve access to cheaper capital, and attract more interest from broader investors.

The merger makes strategic sense because the two companies already overlap in about 95% of their markets, which should allow them to reduce duplicate costs. Both companies have also invested heavily in technology, so combining their research and development efforts could potentially allow them to develop products that could be sold to their real estate industry peers.

BofA upgraded Equity Residential to buy from neutral with a price target set at $76. The firm reiterated its buy rating on AvalonBay Communities with a price target of $213.

Price: 67.31, Change: +1.18, Percent Change: +1.78