AvalonBay Communities, Inc. Announces Second Quarter 2024 Results and Raises Full Year 2024 Outlook

Rhea-AI Summary

AvalonBay Communities (NYSE: AVB) reported strong Q2 2024 results and raised its full-year outlook. Core FFO per share increased 4.1% to $2.77, beating expectations. Same Store Residential revenue grew 3.2% to $666.2 million, while NOI rose 3.0% to $462.1 million. The company completed three development communities and started construction on three more. AVB sold five communities for $513.7 million and acquired three for $223.6 million. For full-year 2024, AvalonBay now projects:

• EPS of $7.34 - $7.54
• FFO per share of $10.84 - $11.04
• Core FFO per share of $10.92 - $11.12
• Same Store Residential revenue growth of 3.0% - 4.0%
• Same Store Residential NOI growth of 2.1% - 3.7%

Positive

• Core FFO per share increased 4.1% year-over-year to $2.77 in Q2 2024
• Same Store Residential revenue grew 3.2% to $666.2 million in Q2 2024
• Same Store Residential NOI increased 3.0% to $462.1 million in Q2 2024
• Completed three development communities and started construction on three more
• Sold five communities for $513.7 million at a 5.1% cap rate
• Raised full-year 2024 Core FFO per share guidance to $10.92 - $11.12

Negative

• EPS decreased 31.3% year-over-year to $1.78 in Q2 2024
• Same Store Residential operating expenses increased 3.8% in Q2 2024
• Projected Same Store Residential operating expense growth of 4.3% - 5.3% for full-year 2024

Insights

Financial Analyst

AvalonBay Communities' Q2 2024 results demonstrate solid performance and improved outlook for the full year. Core FFO per share increased by 4.1% year-over-year to $2.77, surpassing the company's April 2024 outlook. This growth was primarily driven by strong Same Store Residential NOI, which increased by 3.0% year-over-year.

Key highlights include:

• Same Store total revenue increased by 3.2% to $672.9 million
• Same Store Residential NOI grew by 3.0% to $462.1 million
• Completed development of three communities with 901 apartment homes
• Started construction on three new communities with an estimated Total Capital Cost of $384 million

The company's balance sheet remains strong, with a Net Debt-to-Core EBITDAre of 4.2x and 95% Unencumbered NOI. AvalonBay also raised its full-year 2024 outlook, projecting Core FFO per share between $10.92 and $11.12, up from the previous range of $10.79 to $11.03.

While these results are encouraging, investors should note the 31.3% year-over-year decrease in EPS to $1.78, primarily due to lower gains from property sales. This highlights the importance of focusing on Core FFO as a more stable measure of operational performance for REITs.

Real Estate Market Analyst

AvalonBay's Q2 2024 results offer valuable insights into the multifamily real estate market. The company's performance across different regions reveals varying market dynamics:

• Southern California led with a 5.6% NOI growth, indicating strong demand and pricing power
• New England followed with 6.1% NOI growth, suggesting a robust recovery in this market
• Northern California saw a 1.6% NOI decline, potentially reflecting ongoing challenges in the Bay Area market

The company's development and acquisition activities also provide a window into AvalonBay's growth strategy and market outlook. The focus on markets like Pleasanton, CA, Roseland, NJ and Quincy, MA for new developments suggests confidence in these areas' long-term potential.

The disposition of properties in Seattle, Los Angeles, Boston and Darien at a weighted average Market Cap Rate of 5.1% is noteworthy. This could indicate AvalonBay's strategy to optimize its portfolio by selling mature assets in high-value markets and reinvesting in growth opportunities.

The acquisition of properties in Lewisville, TX, Morrisville, NC and Englewood, CO signals AvalonBay's continued expansion into high-growth suburban markets, likely capitalizing on shifting demographic trends post-pandemic.

Overall, AvalonBay's activities reflect a cautiously optimistic outlook on the multifamily market, with a strategic focus on portfolio optimization and targeted growth in promising submarkets.

Investment Strategist

AvalonBay's Q2 2024 results and updated outlook present several key considerations for investors:

• Operational Strength: The 4.1% year-over-year growth in Core FFO per share demonstrates AvalonBay's ability to drive organic growth through effective property management and strategic positioning.
• Development Pipeline: With 17 communities under construction and a $2.54 billion estimated Total Capital Cost, AvalonBay has a robust pipeline for future growth. This could provide a steady stream of new, high-quality assets in the coming years.
• Capital Recycling: The company's active disposition and acquisition strategy helps optimize the portfolio and redeploy capital into higher-growth opportunities. The $513.7 million in dispositions year-to-date at a 5.1% cap rate suggests the company is selling mature assets at attractive valuations.
• Balance Sheet Management: The issuance of $400 million in unsecured notes with a 5.35% coupon demonstrates AvalonBay's ability to access capital markets at competitive rates. The 4.2x Net Debt-to-Core EBITDAre ratio indicates a conservative leverage profile.
• Market Diversification: AvalonBay's performance across different regions highlights the benefits of geographic diversification, with stronger markets offsetting weaker ones.

Investors should weigh these positives against potential headwinds such as rising interest rates, inflationary pressures on operating expenses (up 3.8% year-over-year) and varying regional performance. The raised full-year outlook suggests management's confidence in navigating these challenges.

For long-term investors, AvalonBay's strategic positioning in high-barrier-to-entry markets, robust development pipeline and solid balance sheet make it an attractive option in the multifamily REIT sector. However, short-term volatility may persist due to macroeconomic uncertainties and regional market variations.

ARLINGTON, Va.--(BUSINESS WIRE)-- AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported Earnings per Share – diluted (“EPS”), Funds from Operations attributable to common stockholders - diluted (“FFO”) per share and Core FFO per share (as defined in this release) for the three and six months ended June 30, 2024 and 2023 as detailed below.

		Q2 2024			Q2 2023			% Change
EPS		$	1.78		$	2.59		(31.3	)%
FFO per share (1)		$	2.75		$	2.67		3.0	%
Core FFO per share (1)		$	2.77		$	2.66		4.1	%
		YTD 2024			YTD 2023			% Change
EPS		$	3.00		$	3.65		(17.8	)%
FFO per share (1)		$	5.48		$	5.21		5.2	%
Core FFO per share (1)		$	5.47		$	5.23		4.6	%
(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Definitions and Reconciliations, table 3.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2024 to its results for the prior year period:

Q2 2024 Results Compared to Q2 2023
	Per Share
	EPS			FFO			Core FFO
Q2 2023 per share reported results	$	2.59		$	2.67		$	2.66
Same Store Residential NOI (1)		0.09			0.09			0.09
Other Residential NOI		0.10			0.10			0.10
Overhead and other		(0.03	)		(0.03	)		(0.03	)
Capital markets and transaction activity		(0.04	)		(0.04	)		(0.04	)
Unconsolidated investment income and management fees		(0.01	)		(0.01	)		(0.01	)
Non-core items (2)		(0.03	)		(0.03	)		—
Real estate gains, depreciation expense and other		(0.89	)		—			—
Q2 2024 per share reported results	$	1.78		$	2.75		$	2.77
(1) Consists of increases of $0.14 in revenue and $0.05 in operating expenses.
(2) For detail of non-core items, see Definitions and Reconciliations, table 3.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2024 to its April 2024 outlook:

Q2 2024 Results Compared to April 2024 Outlook
	Per Share
	EPS		FFO		Core FFO
Projected per share (1)	$	1.65	$	2.64	$	2.68
Same Store Residential NOI (2)		0.05		0.05		0.05
Other Residential and Commercial NOI		0.02		0.02		0.02
Overhead and other		0.01		0.01		0.01
Capital markets and transaction activity		0.01		0.01		0.01
Non-core items (3)		0.02		0.02		—
Real estate gains, depreciation expense and other		0.02		—		—
Q2 2024 per share reported results	$	1.78	$	2.75	$	2.77
(1) The mid-point of the Company's April 2024 outlook.
(2) Consists of favorable revenue of $0.02 and favorable operating expenses of $0.03.
(3) For detail of non-core items for the three months ended June 30, 2024, see Definitions and Reconciliations, table 3.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the six months ended June 30, 2024 to its results for the prior year period:

YTD 2024 Results Compared to YTD 2023
	Per Share
	EPS			FFO			Core FFO
YTD 2023 per share reported results	$	3.65		$	5.21		$	5.23
Same Store Residential NOI (1)		0.21			0.21			0.21
Other Residential NOI		0.17			0.17			0.17
Overhead and other		(0.05	)		(0.05	)		(0.05	)
Capital markets and transaction activity		(0.06	)		(0.07	)		(0.08	)
Unconsolidated investment income and management fees		(0.01	)		(0.01	)		(0.01	)
Non-core items (2)		0.02			0.02			—
Real estate gains, depreciation expense and other		(0.93	)		—			—
YTD 2024 per share reported results	$	3.00		$	5.48		$	5.47
(1) Consists of increases of $0.33 in revenue and $0.12 in operating expenses.
(2) For detail of non-core items, see Definitions and Reconciliations, table 3.

Same Store Operating Results for the Three Months Ended June 30, 2024 Compared to the Prior Year Period

Same Store total revenue increased $20,928,000, or 3.2%, to $672,942,000. Same Store Residential revenue increased $20,644,000, or 3.2%, to $666,166,000. Same Store Residential operating expenses increased $7,396,000, or 3.8%, to $204,092,000 and Same Store Residential NOI increased $13,248,000, or 3.0%, to $462,074,000.

The following table presents percentage changes in Same Store Residential revenue, operating expenses and NOI for the three months ended June 30, 2024 compared to the three months ended June 30, 2023:

Q2 2024 Compared to Q2 2023
		Same Store Residential
	Revenue (1)				Opex (2)						% of Q2 2024 NOI
								NOI
New England		4.4	%		0.9	%		6.1	%		13.7	%
Metro NY/NJ		3.8	%		4.5	%		3.4	%		19.8	%
Mid-Atlantic		2.6	%		7.5	%		0.5	%		15.2	%
Southeast FL		2.5	%		4.4	%		1.5	%		3.4	%
Denver, CO		1.3	%		(10.4	)%		6.9	%		1.6	%
Pacific NW		3.6	%		2.9	%		3.9	%		6.6	%
N. California		0.5	%		5.9	%		(1.6	)%		16.2	%
S. California		4.8	%		3.0	%		5.6	%		22.3	%
Other Expansion Regions		(2.0	)%		(10.3	)%		2.9	%		1.2	%
Total		3.2	%		3.8	%		3.0	%		100.0	%
(1) See full release for additional detail.
(2) See full release for discussion of variances.

Same Store Operating Results for the Six Months Ended June 30, 2024 Compared to the Prior Year Period

Same Store total revenue increased $48,611,000, or 3.8%, to $1,340,130,000. Same Store Residential revenue increased $47,122,000, or 3.7%, to $1,325,606,000. Same Store Residential operating expenses increased $17,532,000, or 4.5%, to $406,169,000 and Same Store Residential NOI increased $29,590,000, or 3.3%, to $919,437,000.

The following table presents percentage changes in Same Store Residential revenue, operating expenses and NOI for the six months ended June 30, 2024 compared to the six months ended June 30, 2023:

YTD 2024 Compared to YTD 2023
		Same Store Residential
	Revenue (1)				Opex (2)						% of YTD 2024 NOI
								NOI
New England		4.6	%		1.8	%		6.0	%		13.5	%
Metro NY/NJ		3.9	%		6.5	%		2.7	%		19.8	%
Mid-Atlantic		3.0	%		7.6	%		1.1	%		15.3	%
Southeast FL		2.1	%		4.9	%		0.7	%		3.4	%
Denver, CO		2.1	%		(2.8	)%		4.1	%		1.6	%
Pacific NW		3.3	%		3.5	%		3.2	%		6.5	%
N. California		1.1	%		5.1	%		(0.5	)%		16.3	%
S. California		6.1	%		3.1	%		7.4	%		22.4	%
Other Expansion Regions		(1.0	)%		(2.5	)%		(0.2	)%		1.2	%
Total		3.7	%		4.5	%		3.3	%		100.0	%
(1) See full release for additional detail.
(2) See full release for discussion of variances.

Development Activity

During the three months ended June 30, 2024, the Company completed the development of three communities.

• Avalon Amityville, located in Amityville, NY;
• Avalon Montville, located in Montville, NJ; and
• Avalon Redmond Campus, located in Redmond, WA.

These communities contain an aggregate of 901 apartment homes and were constructed for an aggregate Total Capital Cost of $351,000,000.

During the three months ended June 30, 2024, the Company started the construction of three apartment communities:

• Avalon Pleasanton I, located in Pleasanton, CA;
• Avalon Roseland II, located in Roseland, NJ; and
• Avalon Quincy Adams; located in Quincy, MA.

These communities are expected to contain an aggregate of 903 apartment homes and 6,000 square feet of commercial space. Estimated Total Capital Cost at completion for these Development communities is $384,000,000.

At June 30, 2024, the Company had 17 consolidated Development communities under construction that are expected to contain 6,066 apartment homes and 65,000 square feet of commercial space. Estimated Total Capital Cost at completion for these Development communities is $2,537,000,000.

Disposition Activity

During 2024 through the date of this release, the Company sold five wholly-owned communities containing, in the aggregate, 1,069 apartment homes for $513,700,000 and a weighted average Market Cap Rate of 5.1%.

The Company sold three wholly-owned communities during the three months ended June 30, 2024:

• AVA Belltown, located in Seattle, WA;
• AVA North Hollywood, located in Los Angeles, CA; and
• Avalon Hackensack at Riverside, located in Hackensack, NJ.

In aggregate, these communities contain 482 apartment homes and 12,000 square feet of commercial space and were sold for $181,700,000, resulting in a gain in accordance with GAAP of $68,381,000 and an Economic Gain of $22,071,000.

The Company sold two wholly-owned communities in July 2024:

• AVA Theater District, located in Boston, MA; and
• Avalon Darien, located in Darien, CT.

In aggregate, these communities contain 587 apartment homes and were sold for $332,000,000.

Acquisition Activity

During the three months ended June 30, 2024, the Company acquired Avalon at Pier 121, a wholly-owned community, located in Lewisville, TX, containing 300 apartment homes for a purchase price of $62,100,000.

In July 2024, the Company acquired two wholly-owned communities:

• Avalon Perimeter Park, located in Morrisville, NC, containing 262 apartment homes for a purchase price of $66,500,000; and
• Avalon Cherry Hills, located in Englewood, CO, containing 306 apartment homes for a purchase price of $95,000,000.

Structured Investment Program ("SIP") Activity

As of June 30, 2024, the Company had seven commitments to fund either mezzanine loans or preferred equity investments for the development of multifamily projects in the Company's markets, up to $191,585,000 in the aggregate. At June 30, 2024, the Company's investment commitments had a weighted average rate of return of 11.5% and a weighted average initial maturity date of December 2026. As of June 30, 2024, the Company had funded $138,970,000 of these commitments.

Liquidity and Capital Markets

At June 30, 2024, the Company had $545,769,000 in unrestricted cash and cash equivalents.

During the three months ended June 30, 2024, the Company issued $400,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds before offering costs of $396,188,000. The notes mature in June 2034 and were issued with a 5.35% coupon. The effective interest rate of the notes is 5.05%, including the impact of offering costs and hedging activity.

As of June 30, 2024, the Company did not have any borrowings outstanding under its $2,250,000,000 unsecured revolving credit facility (the "Credit Facility") or its $500,000,000 unsecured commercial paper note program. The commercial paper program is backstopped by the Company's commitment to maintain available borrowing capacity under its Credit Facility in an amount equal to actual borrowings under the program.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the second quarter of 2024 was 4.2 times and Unencumbered NOI (as defined in this release) for the six months ended June 30, 2024 was 95%.

Third Quarter and Full Year 2024 Financial Outlook

For its third quarter and full year 2024 financial outlook, the Company expects the following:

Projected EPS, Projected FFO and Projected Core FFO Outlook (1)
	Q3 2024						Full Year 2024
	Low			High			Low				High
Projected EPS	$	2.69	—	$	2.79		$	7.34		—	$	7.54
Projected FFO per share	$	2.59	—	$	2.69		$	10.84		—	$	11.04
Projected Core FFO per share	$	2.66	—	$	2.76		$	10.92		—	$	11.12
(1) See Definitions and Reconciliations, table 9, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS.
Full Year 2024 Financial Outlook
							Full Year 2024
							vs. Full Year 2023
							Low				High
Same Store:
Residential revenue change								3.0	%	—		4.0	%
Residential Opex change								4.3	%	—		5.3	%
Residential NOI change								2.1	%	—		3.7	%

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the second quarter 2024 to the mid-point of its third quarter 2024 financial outlook:

Q2 2024 Results Compared to Q3 2024 Outlook
	Per Share
	EPS			FFO			Core FFO
Q2 2024 per share reported results	$	1.78		$	2.75		$	2.77
Same Store Residential revenue		0.05			0.05			0.05
Same Store Residential Opex		(0.09	)		(0.09	)		(0.09	)
Development and Other Stabilized Residential NOI		0.03			0.03			0.03
Capital markets and transaction activity		(0.03	)		(0.03	)		(0.03	)
Overhead and other		(0.02	)		(0.02	)		(0.02	)
Non-core items (1)		(0.05	)		(0.05	)		—
Gain on sale of real estate and depreciation expense		1.07			—			—
Projected per share - Q3 2024 outlook (2)	$	2.74		$	2.64		$	2.71
(1) For detail of non-core items, see Definitions and Reconciliations, table 3 and table 9.
(2) Represents the mid-point of the Company's outlook.

The following table compares the mid-point of the Company’s July 2024 full year outlook for EPS, FFO per share and Core FFO per share to its April 2024 outlook:

July 2024 Full Year Outlook Compared to April 2024 Full Year Outlook
	Per Share
	EPS			FFO			Core FFO
Projected per share - April 2024 outlook (1)	$	7.18		$	10.83		$	10.91
Same Store Residential revenue		0.06			0.06			0.06
Same Store Residential Opex		0.04			0.04			0.04
Development and Other Stabilized Residential NOI		0.03			0.03			0.03
Capital markets and transaction activity		—			—			—
Overhead and other		(0.02	)		(0.02	)		(0.02	)
Gain on sale of real estate and depreciation expense		0.15			—			—
Projected per share - July 2024 outlook (1)	$	7.44		$	10.94		$	11.02
(1) Represents the mid-point of the Company's outlook.

Other Matters

The Company will hold a conference call on August 1, 2024 at 1:00 PM ET to review and answer questions about this release, its second quarter 2024 results, the Attachments (described below) and related matters. To participate on the call, dial 877-407-9716.

To hear a replay of the call, which will be available from August 1, 2024 at 6:00 PM ET to September 1, 2024, dial 844-512-2921 and use replay passcode: 13740498. A webcast of the conference call will also be available at https://investors.avalonbay.com, and an online playback of the webcast will be available for at least seven days following the call.

The Company produces Earnings Release Attachments (the "Attachments") that provide detailed information regarding operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company's website at https://investors.avalonbay.com. To receive future press releases via e-mail, please submit a request through https://investors.avalonbay.com/news-events/email-alerts.

In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at https://investors.avalonbay.com subsequent to this release and before the market opens on August 1, 2024.

About AvalonBay Communities, Inc.

AvalonBay Communities, Inc., a member of the S&P 500, is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. As of June 30, 2024, the Company owned or held a direct or indirect ownership interest in 300 apartment communities containing 91,399 apartment homes in 12 states and the District of Columbia, of which 17 communities were under development. More information may be found on the Company’s website at https://www.avalonbay.com. For additional information, please contact Jason Reilley, Vice President of Investor Relations, at 703-317-4681.

Forward-Looking Statements

This release, including its Attachments, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the Company’s use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “project,” “plan,” “may,” “shall,” “will,” “pursue,” “outlook” and other similar expressions that predict or indicate future events and trends and that do not report historical matters. These statements include, among other things, statements regarding the Company’s intent, belief, forecasts, assumptions or expectations with respect to: potential development, redevelopment, acquisition or disposition of communities; the timing and cost of completion of apartment communities under construction, reconstruction, development or redevelopment; the timing of lease-up, occupancy and stabilization of communities; the pursuit of land for future development; the anticipated operating performance of communities; cost, yield, revenue, NOI and earnings estimates; the impact of landlord-tenant laws and rent regulations; the Company’s expansion into new regions; declaration or payment of dividends; joint venture activities; the Company’s policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters; the Company’s qualification as a REIT under the Code; the real estate markets in regions where the Company operates; the availability of debt and equity financing; interest rates, inflation and other general economic conditions and their potential impacts; trends affecting the Company’s financial condition or results of operations; regulatory changes that may affect the Company; and the impact of legal proceedings.

The Company cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed. The Company does not undertake a duty to update these forward-looking statements, and therefore they may not represent the Company’s estimates and assumptions after the date of this release. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company’s control. These risks, uncertainties and other factors may cause the Company’s actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by these forward-looking statements. You should carefully review the discussion under Part I, Item 1A. “Risk Factors” of the Company’s Form 10-K for the fiscal year ended December 31, 2023 and Part II, Item 1A. “Risk Factors” in subsequent quarterly reports on Form 10-Q for further discussion of risks associated with forward-looking statements.

Some of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: the Company may fail to secure development opportunities due to an inability to reach agreements with third parties to obtain land at attractive prices or to obtain desired zoning and other local approvals; the Company may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; construction costs of a community may exceed original estimates; the Company may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in expected rental revenues; occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond the Company’s control; the Company’s cash flows from operations and access to cost-effective capital may be insufficient for the development of the Company’s pipeline, which could limit the Company’s pursuit of opportunities; an outbreak of disease or other public health event may affect the multifamily industry and general economy; the Company’s cash flows may be insufficient to meet required payments of principal and interest, and the Company may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness; the Company may be unsuccessful in its management of joint ventures and the REIT vehicles that are used with certain joint ventures; new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting the Company’s ability to increase rents, charge fees or evict tenants, may impact its revenue or increase costs; the Company’s expectations, estimates and assumptions as of the date of this filing regarding legal proceedings are subject to change; the Company’s assumptions and expectations in its financial outlook may prove to be too optimistic; the possibility that the Company may choose to pay dividends in its stock instead of cash, which may result in stockholders having to pay taxes with respect to such dividends in excess of the cash received, if any; and investments made under the SIP may not be repaid as expected or the development may not be completed on schedule, which could require the Company to engage in litigation, foreclosure actions, and/or first party project completion to recover its investment, which may not be recovered in full or at all in such event.

Definitions and Reconciliations

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined, reconciled and further explained on Attachment 13, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 13 is included in the full earnings release available at the Company’s website at https://investors.avalonbay.com. This wire distribution includes only the following definitions and reconciliations.

Average Monthly Revenue per Occupied Home is calculated by the Company as Residential revenue in accordance with GAAP, divided by the weighted average number of occupied apartment homes.

Commercial represents results attributable to the non-apartment components of the Company's mixed-use communities and other non-residential operations.

Development is composed of consolidated communities that are either currently under construction, or were under construction and were completed during the current year. These communities may be partially or fully complete and operating.

EBITDA, EBITDAre and Core EBITDAre are considered by management to be supplemental measures of our financial performance. EBITDA is defined by the Company as net income or loss computed in accordance with GAAP before interest expense, income taxes, depreciation and amortization. EBITDAre is calculated by the Company in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), as EBITDA plus or minus losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property, with adjustments to reflect the Company's share of EBITDAre of unconsolidated entities. Core EBITDAre is the Company’s EBITDAre as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered part of the Company’s core business operations, Core EBITDAre can help one compare the core operating and financial performance of the Company between periods. A reconciliation of EBITDA, EBITDAre and Core EBITDAre to net income is as follows (dollars in thousands):

TABLE 1
		Q2
			2024
Net income		$	254,007
Interest expense and loss on extinguishment of debt			63,140
Income tax benefit			(62	)
Depreciation expense			206,923
EBITDA		$	524,008
Gain on sale of communities			(68,556	)
Unconsolidated entity EBITDAre adjustments (1)			4,050
EBITDAre		$	459,502
Unconsolidated entity gains, net			(1,177	)
Structured Investment Program loan reserve			(16	)
Advocacy contributions			2,107
Hedge accounting activity			16
Severance related costs			1,030
Expensed transaction, development and other pursuit costs, net of recoveries			471
Other real estate activity			(181	)
Legal settlements and costs			644
Core EBITDAre		$	462,396
(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income.

Economic Gain is calculated by the Company as the gain on sale in accordance with GAAP, less accumulated depreciation through the date of sale and any other adjustments that may be required under GAAP accounting. Management generally considers Economic Gain to be an appropriate supplemental measure to gain on sale in accordance with GAAP because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold community. The Economic Gain for disposed communities is based on their respective final settlement statements. A reconciliation of the aggregate Economic Gain to the aggregate gain on sale in accordance with GAAP for the wholly-owned communities disposed of during the three and six months ended June 30, 2024 is as follows (dollars in thousands):

TABLE 2
GAAP Gain	$	68,381
Accumulated Depreciation and Other		(46,310	)
Economic Gain	$	22,071

Economic Occupancy is defined as total possible Residential revenue less vacancy loss as a percentage of total possible Residential revenue. Total possible Residential revenue (also known as “gross potential”) is determined by valuing occupied units at contract rates and vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant apartments at their Market Rents, Economic Occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a community’s gross revenue.

FFO and Core FFO are generally considered by management to be appropriate supplemental measures of our operating and financial performance. FFO is calculated by the Company in accordance with the definition adopted by Nareit. FFO is calculated by the Company as Net income or loss attributable to common stockholders computed in accordance with GAAP, adjusted for gains or losses on sales of previously depreciated operating communities, cumulative effect of a change in accounting principle, impairment write-downs of depreciable real estate assets, write-downs of investments in affiliates due to a decrease in the value of depreciable real estate assets held by those affiliates and depreciation of real estate assets, including similar adjustments for unconsolidated partnerships and joint ventures, including those from a change in control. FFO can help one compare the operating and financial performance of a real estate company between periods or as compared to different companies because adjustments such as (i) gains or losses on sales of previously depreciated property or (ii) real estate depreciation may impact comparability between companies as the amount and timing of these or similar items can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates. Core FFO is the Company's FFO as adjusted for non-core items outlined in the table below. By further adjusting for items that we do not consider be part of our core business operations, Core FFO can help with the comparison of core operating performance of the Company between periods. A reconciliation of Net income attributable to common stockholders to FFO and to Core FFO is as follows (dollars in thousands):

TABLE 3
		Q2				Q2				YTD				YTD
			2024				2023				2024				2023
Net income attributable to common stockholders		$	253,934			$	367,923			$	427,383			$	514,825
Depreciation - real estate assets, including joint venture adjustments			206,338				199,197				417,685				402,477
Distributions to noncontrolling interests			—				13				—				25
Gain on sale of previously depreciated real estate			(68,556	)			(187,322	)			(68,486	)			(187,309	)
Casualty loss on real estate			—				—				2,935				5,051
FFO attributable to common stockholders			391,716				379,811				779,517				735,069
Adjusting items:
Unconsolidated entity gains, net (1)			(1,177	)			(1,795	)			(9,562	)			(4,851	)
Joint venture promote (2)			—				(1,072	)			—				(1,072	)
Structured Investment Program loan reserve (3)			(16	)			(105	)			42				(124	)
Hedge accounting activity			16				(37	)			55				191
Advocacy contributions			2,107				200				2,182				200
Executive transition compensation costs			—				297				104				644
Severance related costs			1,030				327				1,241				1,500
Expensed transaction, development and other pursuit costs, net of recoveries			471				797				3,605				3,248
Other real estate activity			(181	)			(341	)			(322	)			(470	)
For-sale condominium imputed carry cost (4)			21				169				41				424
Legal settlements and costs			644				148				1,508				50
Income tax (benefit) expense (5)			(62	)			(217	)			(84	)			3,343
Core FFO attributable to common stockholders		$	394,569			$	378,182			$	778,327			$	738,152
Weighted average common shares outstanding - diluted			142,389,866				142,124,117				142,306,310				141,073,964
Earnings per common share - diluted		$	1.78			$	2.59			$	3.00			$	3.65
FFO per common share - diluted		$	2.75			$	2.67			$	5.48			$	5.21
Core FFO per common share - diluted		$	2.77			$	2.66			$	5.47			$	5.23
(1) Amounts consist primarily of net unrealized gains on technology investments.
(2) Amount for 2023 is for the Company's recognition of its promoted interest in Archstone Multifamily Partners AC LP.
(3) Changes are the expected credit losses associated with the Company's lending commitments primarily under its SIP. The timing and amount of any actual losses that will be incurred, if any, is to be determined.
(4) Represents the imputed carry cost of the for-sale residential condominiums at The Park Loggia. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold for-sale residential condominiums by the Company's weighted average unsecured debt effective interest rate.
(5) Amount for 2023 is primarily for the recognition of taxes associated with The Park Loggia dispositions.

Interest Coverage is calculated by the Company as Core EBITDAre divided by interest expense. Interest Coverage is presented by the Company because it provides rating agencies and investors an additional means of comparing our ability to service debt obligations to that of other companies. A calculation of Interest Coverage for the three months ended June 30, 2024 is as follows (dollars in thousands):

TABLE 4
Core EBITDAre (1)	$	462,396
Interest expense (2)	$	63,140
Interest Coverage	7.3 times
(1) For additional detail, see Definitions and Reconciliations, table 1.
(2) Excludes the impact of non-core hedge accounting activity.

Market Cap Rate is defined by the Company as Projected NOI of a single community for the first 12 months of operations (assuming no repositioning), less an estimate of typical capital expenditure allowance per apartment home, divided by the gross sales price for the community. Projected NOI, as referred to above, represents management’s estimate of projected rental revenue minus projected operating expenses before interest, income taxes (if any), depreciation and amortization. For this purpose, management’s projection of operating expenses for the community includes a management fee of 2.5% and an estimate of typical market costs for insurance, payroll and other operating expenses for which the Company may have proprietary advantages not available to a typical buyer. The Market Cap Rate, which may be determined in a different manner by others, is a measure frequently used in the real estate industry when determining the appropriate purchase price for a property or estimating the value for a property. Buyers may assign different Market Cap Rates to different communities when determining the appropriate value because they (i) may project different rates of change in operating expenses and capital expenditure estimates and (ii) may project different rates of change in future rental revenue due to different estimates for changes in rent and occupancy levels. The weighted average Market Cap Rate is weighted based on the gross sales price of each community.

Market Rents as reported by the Company are based on the current market rates set by the Company based on its experience in renting apartments and publicly available market data. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Net Debt-to-Core EBITDAre is calculated by the Company as total debt (secured and unsecured notes, and the Company's Credit Facility and commercial paper program) that is consolidated for financial reporting purposes, less consolidated cash and restricted cash, divided by annualized second quarter 2024 Core EBITDAre. A calculation of Net Debt-to-Core EBITDAre is as follows (dollars in thousands):

TABLE 5
Total debt principal (1)	$	8,436,061
Cash and cash equivalents and restricted cash		(725,660	)
Net debt	$	7,710,401
Core EBITDAre (2)	$	462,396
Core EBITDAre, annualized	$	1,849,584
Net Debt-to-Core EBITDAre	4.2 times
(1) Balance at June 30, 2024 excludes $44,848 of debt discount and deferred financing costs as reflected in unsecured notes, net, and $17,182 of debt discount and deferred financing costs as reflected in notes payable, net, on the Condensed Consolidated Balance Sheets.
(2) For additional detail, see Definitions and Reconciliations, table 1.

NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), property management and other indirect operating expenses, net of corporate income, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, loss on extinguishment of debt, net, general and administrative expense, income from unconsolidated investments, depreciation expense, income tax (benefit) expense, casualty loss, (gain) loss on sale of communities, other real estate activity and net operating income from real estate assets sold or held for sale. The Company considers NOI to be an important and appropriate supplemental performance measure to net income because it helps both investors and management to understand the core operations of a community or communities prior to the allocation of any corporate-level property management overhead or financing-related costs. NOI reflects the operating performance of a community and allows for an easier comparison of the operating performance of individual assets or groups of assets. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impact to overhead as a result of acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets.

Residential NOI represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue. Reconciliations of NOI and Residential NOI to net income, as well as a breakdown of Residential NOI by operating segment, are as follows (dollars in thousands):

TABLE 6
		Q2				Q2				Q1				Q4				YTD				YTD
			2024				2023				2024				2023				2024				2023
Net income		$	254,007			$	367,807			$	173,557			$	242,066			$	427,564			$	514,582
Property management and other indirect operating expenses, net of corporate income			37,553				32,115				35,204				34,706				72,757				66,051
Expensed transaction, development and other pursuit costs, net of recoveries			1,417				1,261				4,245				10,267				5,662				4,253
Interest expense, net			57,078				51,585				54,766				49,471				111,844				108,406
General and administrative expense			19,586				17,676				20,331				17,992				39,917				38,076
Income from unconsolidated investments			(4,822	)			(4,970	)			(10,847	)			(1,709	)			(15,669	)			(9,815	)
Depreciation expense			206,923				200,546				212,269				210,694				419,192				405,289
Income tax (benefit) expense			(62	)			(217	)			(22	)			2,438				(84	)			3,343
Casualty loss			—				—				2,935				568				2,935				5,051
(Gain) loss on sale of communities			(68,556	)			(187,322	)			70				(77,994	)			(68,486	)			(187,309	)
Other real estate activity			(181	)			(341	)			(141	)			533				(322	)			(470	)
NOI from real estate assets sold or held for sale			(6,511	)			(12,467	)			(7,060	)			(7,688	)			(13,571	)			(25,755	)
NOI			496,432				465,673				485,307				481,344				981,739				921,702
Commercial NOI			(8,848	)			(8,367	)			(8,028	)			(8,568	)			(16,876	)			(16,631	)
Residential NOI		$	487,584			$	457,306			$	477,279			$	472,776			$	964,863			$	905,071
Residential NOI
Same Store:
New England		$	63,325			$	59,701			$	60,940			$	60,394			$	124,265			$	117,262
Metro NY/NJ			91,551				88,500				90,054				89,866				181,605				176,760
Mid-Atlantic			70,448				70,104				70,678				71,565				141,126				139,542
Southeast FL			15,530				15,301				15,491				14,441				31,021				30,813
Denver, CO			7,249				6,782				7,353				7,213				14,602				14,025
Pacific NW			30,593				29,437				29,927				29,764				60,520				58,639
N. California			75,016				76,230				75,084				75,798				150,100				150,819
S. California			103,005				97,567				102,586				101,144				205,591				191,363
Other Expansion Regions			5,357				5,204				5,250				5,259				10,607				10,624
Total Same Store			462,074				448,826				457,363				455,444				919,437				889,847
Other Stabilized			16,422				9,045				15,563				15,150				31,985				16,080
Development/Redevelopment			9,088				(565	)			4,353				2,182				13,441				(856	)
Residential NOI		$	487,584			$	457,306			$	477,279			$	472,776			$	964,863			$	905,071

NOI as reported by the Company does not include the operating results from assets sold or classified as held for sale. A reconciliation of NOI from communities sold or classified as held for sale is as follows (dollars in thousands):

TABLE 7
		Q2				Q2				Q1				Q4				YTD				YTD
			2024				2023				2024				2023				2024				2023
Revenue from real estate assets sold or held for sale		$	9,959			$	18,818			$	10,743			$	11,480			$	20,705			$	38,262
Operating expenses from real estate assets sold or held for sale			(3,448	)			(6,351	)			(3,683	)			(3,792	)			(7,134	)			(12,507	)
NOI from real estate assets sold or held for sale		$	6,511			$	12,467			$	7,060			$	7,688			$	13,571			$	25,755

Commercial NOI is composed of the following components (in thousands):

TABLE 8
		Q2				Q2				Q1				Q4				YTD				YTD
			2024				2023				2024				2023				2024				2023
Commercial Revenue		$	10,683			$	9,981			$	9,842			$	10,377			$	20,525			$	19,894
Commercial Operating Expenses			(1,835	)			(1,614	)			(1,814	)			(1,809	)			(3,649	)			(3,263	)
Commercial NOI		$	8,848			$	8,367			$	8,028			$	8,568			$	16,876			$	16,631

Other Stabilized is composed of completed consolidated communities that the Company owns, which have Stabilized Operations as of January 1, 2024, or which were acquired subsequent to January 1, 2023. Other Stabilized excludes communities that are conducting or are probable to conduct substantial redevelopment activities.

Projected FFO and Projected Core FFO, as provided within this release in the Company’s outlook, are calculated on a basis consistent with historical FFO and Core FFO, and are therefore considered to be appropriate supplemental measures to projected net income from projected operating performance. A reconciliation of the ranges provided for Projected FFO per share (diluted) for the third quarter and full year 2024 to the ranges provided for projected EPS (diluted) and corresponding reconciliation of the ranges for Projected FFO per share to the ranges for Projected Core FFO per share are as follows:

TABLE 9
		Low Range				High Range
Projected EPS (diluted) - Q3 2024		$	2.69			$	2.79
	Depreciation (real estate related)		1.49				1.49
	Gain on sale of communities		(1.59	)			(1.59	)
Projected FFO per share (diluted) - Q3 2024			2.59				2.69
	Unconsolidated entity gains, net		0.01				0.01
	Expensed transaction, development and other pursuit costs, net of recoveries		0.01				0.01
	Advocacy contributions		0.05				0.05
Projected Core FFO per share (diluted) - Q3 2024		$	2.66			$	2.76
Projected EPS (diluted) - Full Year 2024		$	7.34			$	7.54
	Depreciation (real estate related)		5.95				5.95
	Gain on sale of communities		(2.47	)			(2.47	)
	Casualty loss on real estate		0.02				0.02
Projected FFO per share (diluted) - Full Year 2024			10.84				11.04
	Unconsolidated entity gains, net		(0.05	)			(0.05	)
	Severance related costs		0.01				0.01
	Expensed transaction, development and other pursuit costs, net of recoveries		0.04				0.04
	Legal settlements and costs		0.01				0.01
	Advocacy contributions		0.07				0.07
Projected Core FFO per share (diluted) - Full Year 2024		$	10.92			$	11.12

Projected NOI, as used within this release for certain Development communities and in calculating the Market Cap Rate for dispositions, represents management’s estimate, as of the date of this release (or as of the date of the buyer’s valuation in the case of dispositions), of projected stabilized rental revenue minus projected stabilized operating expenses. For Development communities, Projected NOI is calculated based on the first twelve months of Stabilized Operations following the completion of construction. In calculating the Market Cap Rate, Projected NOI for dispositions is calculated for the first twelve months following the date of the buyer’s valuation. Projected stabilized rental revenue represents management’s estimate of projected gross potential minus projected stabilized economic vacancy and adjusted for projected stabilized concessions plus projected stabilized other rental revenue. Projected stabilized operating expenses do not include interest, income taxes (if any), depreciation or amortization, or any allocation of corporate-level property management overhead or general and administrative costs. In addition, projected stabilized operating expenses for Development communities do not include property management fee expense. Projected gross potential for Development communities and dispositions is generally based on leased rents for occupied homes and management’s best estimate of rental levels for homes which are currently unleased, as well as those homes which will become available for lease during the twelve-month forward period used to develop Projected NOI. The weighted average Projected NOI as a percentage of Total Capital Cost is weighted based on the Company’s share of the Total Capital Cost of each community, based on its percentage ownership.

Management believes that Projected NOI of the Development communities, on an aggregated weighted average basis, assists investors in understanding management's estimate of the likely impact on operations of the Development communities when the assets are complete and achieve stabilized occupancy (before allocation of any corporate-level property management overhead, general and administrative costs or interest expense). However, in this release the Company has not given a projection of NOI on a company-wide basis. Given the different dates and fiscal years for which NOI is projected for these communities, the projected allocation of corporate-level property management overhead, general and administrative costs and interest expense to communities under development is complex, impractical to develop, and may not be meaningful. Projected NOI of these communities is not a projection of the Company's overall financial performance or cash flow. There can be no assurance that the communities under development will achieve the Projected NOI as described in this release.

Redevelopment is composed of consolidated communities where substantial redevelopment is in progress or is probable to begin during the current year. Redevelopment is considered substantial when (i) capital invested during the reconstruction effort is expected to exceed the lesser of $5,000,000 or 10% of the community’s pre-redevelopment basis and (ii) physical occupancy is below or is expected to be below 90% during or as a result of the redevelopment activity.

Residential represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue.

Residential Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to Residential revenue in conformity with GAAP to help investors evaluate the impact of both current and historical concessions on GAAP-based Residential revenue and to more readily enable comparisons to revenue as reported by other companies. In addition, Residential Revenue with Concessions on a Cash Basis allows an investor to understand the historical trend in cash concessions.

A reconciliation of Same Store Residential revenue in conformity with GAAP to Residential Revenue with Concessions on a Cash Basis is as follows (dollars in thousands):

TABLE 10
		Q2				Q2				Q1				YTD				YTD
			2024				2023				2024				2024				2023
Residential revenue (GAAP basis)		$	666,166			$	645,522			$	659,440			$	1,325,606			$	1,278,484
Residential concessions amortized			4,203				3,472				4,272				8,475				6,870
Residential concessions granted			(2,494	)			(2,794	)			(3,387	)			(5,881	)			(6,414	)
Residential Revenue with Concessions on a Cash Basis		$	667,875			$	646,200			$	660,325			$	1,328,200			$	1,278,940
						Q2 2024 vs. Q2 2023				Q2 2024 vs. Q1 2024								YTD 2024 vs. YTD 2023
% change -- GAAP revenue							3.2	%			1.0	%							3.7	%
% change -- cash revenue							3.4	%			1.1	%							3.9	%

Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had Stabilized Operations, as defined below, as of the beginning of the respective prior year period. Therefore, for 2024 operating results, Same Store is composed of consolidated communities that have Stabilized Operations as of January 1, 2023, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale or probable for disposition within the current year.

Stabilized Operations is defined as operations of a community that occur after the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

Total Capital Cost includes all capitalized costs projected to be or actually incurred to develop the respective Development or Redevelopment community, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees and a contingency estimate, offset by proceeds from the sale of any associated land or improvements, all as determined in accordance with GAAP. Total Capital Cost also includes costs incurred related to first generation commercial tenants, such as tenant improvements and leasing commissions. For Redevelopment communities, Total Capital Cost excludes costs incurred prior to the start of redevelopment when indicated. With respect to communities where development or redevelopment was completed in a prior period or the current period, Total Capital Cost reflects the actual cost incurred, plus any contingency estimate made by management. Total Capital Cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. For joint ventures not in construction, Total Capital Cost is equal to gross real estate cost.

Uncollectible lease revenue and government rent relief

The following table provides uncollectible Residential lease revenue as a percentage of total Residential revenue in the aggregate and excluding amounts recognized from government rent relief programs in each respective period. Government rent relief reduces the amount of uncollectible Residential lease revenue. The Company expects the amount of rent relief recognized to continue to decline in 2024 absent funding from the Federal government.

TABLE 11
		Same Store Uncollectible Residential Lease Revenue
		Q2			Q2			Q1			Q4
		2024			2023			2024			2023
		Total	Excluding Rent Relief		Total	Excluding Rent Relief		Total	Excluding Rent Relief		Total	Excluding Rent Relief
New England		0.5 %	0.9 %		0.7 %	1.3 %		0.2 %	0.6 %		0.9 %	1.2 %
Metro NY/NJ		2.1 %	2.2 %		2.3 %	3.1 %		2.1 %	2.4 %		2.8 %	3.0 %
Mid-Atlantic		2.3 %	2.3 %		1.9 %	2.2 %		2.3 %	2.6 %		2.5 %	2.7 %
Southeast FL		1.7 %	1.8 %		2.8 %	3.2 %		2.4 %	2.4 %		2.5 %	2.6 %
Denver, CO		1.0 %	1.0 %		0.9 %	1.0 %		1.2 %	1.4 %		1.1 %	1.1 %
Pacific NW		1.4 %	1.4 %		0.8 %	1.0 %		0.9 %	1.0 %		1.1 %	1.2 %
N. California		1.3 %	1.4 %		1.2 %	1.3 %		1.1 %	1.2 %		1.2 %	1.3 %
S. California		2.2 %	2.4 %		3.3 %	3.4 %		2.1 %	2.4 %		2.2 %	2.4 %
Other Expansion Regions		1.5 %	1.5 %		0.6 %	0.6 %		1.2 %	1.2 %		1.3 %	1.3 %
Total Same Store		1.7 %	1.9 %		1.9 %	2.3 %		1.6 %	1.9 %		2.0 %	2.1 %

Unconsolidated Development is composed of communities that are either currently under construction, or were under construction and were completed during the current year, in which we have an indirect ownership interest through our investment interest in an unconsolidated joint venture. These communities may be partially or fully complete and operating.

Unencumbered NOI as calculated by the Company represents NOI generated by real estate assets unencumbered by outstanding secured notes payable as of June 30, 2024 as a percentage of total NOI generated by real estate assets. The Company believes that current and prospective unsecured creditors of the Company view Unencumbered NOI as one indication of the borrowing capacity of the Company. Therefore, when reviewed together with the Company’s Interest Coverage, EBITDA and cash flow from operations, the Company believes that investors and creditors view Unencumbered NOI as a useful supplemental measure for determining the financial flexibility of an entity. A calculation of Unencumbered NOI for the six months ended June 30, 2024 is as follows (dollars in thousands):

TABLE 12
		YTD 2024
		NOI
Residential NOI:
Same Store		$	919,437
Other Stabilized			31,985
Development/Redevelopment			13,441
Total Residential NOI			964,863
Commercial NOI			16,876
NOI from real estate assets sold or held for sale			13,571
Total NOI generated by real estate assets			995,310
Less NOI on encumbered assets			(49,620	)
NOI on unencumbered assets		$	945,690
Unencumbered NOI			95	%

Copyright © 2024 AvalonBay Communities, Inc. All Rights Reserved

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730322114/en/

Jason Reilley, Vice President of Investor Relations, 703-317-4681

Source: AvalonBay Communities, Inc.

FAQ

What was AvalonBay's Core FFO per share for Q2 2024?

AvalonBay's Core FFO per share for Q2 2024 was $2.77, representing a 4.1% increase from Q2 2023.

How much did AvalonBay's Same Store Residential revenue grow in Q2 2024?

AvalonBay's Same Store Residential revenue grew 3.2% to $666.2 million in Q2 2024 compared to Q2 2023.

What is AvalonBay's full-year 2024 Core FFO per share guidance?

AvalonBay raised its full-year 2024 Core FFO per share guidance to a range of $10.92 - $11.12.

How many communities did AvalonBay sell in 2024 through the date of the release?

AvalonBay sold five wholly-owned communities containing 1,069 apartment homes for $513.7 million in 2024 through the date of the release.