AvalonBay Communities, Inc. Announces Third Quarter 2022 Operating Results and Fourth Quarter 2022 Financial Outlook
AvalonBay Communities reported a significant surge in its Q3 2022 financial results with a net income of $494.7 million, marking a 530.4% increase in EPS to $3.53 from $0.56 a year prior. Key factors driving this growth include enhanced gains from real estate sales and a rise in Same Store Residential NOI by 14.4%.
Additionally, FFO per share grew by 25.5% to $2.46, while Core FFO increased 21.4% to $2.50. Year-to-date statistics reveal a 33.6% rise in EPS to $6.40, with FFO per share at $7.11 and Core FFO at $7.19.
- Net income rose to $494.7 million, an increase of 530.4%.
- EPS increased to $3.53 from $0.56 year-over-year.
- FFO per share grew by 25.5% to $2.46.
- Core FFO increased by 21.4% to $2.50.
- Same Store Residential NOI up by 14.4%.
- Total revenue for Same Store increased by only 11.9%, which may indicate a slowdown in growth.
- Increased operating expenses of 6.5% limited profitability growth.
Funds from Operations attributable to common stockholders - diluted (“FFO”) per share for the three months ended
The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended
|
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Q3 2022 Results Compared to Q3 2021 |
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|
Per Share (1) |
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|
EPS |
FFO |
Core FFO |
||||||
Q3 2021 per share reported results |
$ |
0.56 |
|
$ |
1.96 |
|
$ |
2.06 |
|
Same Store Residential NOI (2) |
|
0.35 |
|
|
0.35 |
|
|
0.35 |
|
Development and Other Stabilized Residential NOI |
|
0.14 |
|
|
0.14 |
|
|
0.14 |
|
Commercial NOI |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
Overhead and other |
|
(0.06 |
) |
|
(0.06 |
) |
|
(0.04 |
) |
Capital markets and transaction activity |
|
0.06 |
|
|
0.06 |
|
|
(0.06 |
) |
Unconsolidated investment income |
|
— |
|
|
— |
|
|
0.02 |
|
Income taxes |
|
(0.02 |
) |
|
(0.02 |
) |
|
— |
|
Gain on sale of real estate and depreciation expense |
|
2.47 |
|
|
— |
|
|
— |
|
Q3 2022 per share reported results |
$ |
3.53 |
|
$ |
2.46 |
|
$ |
2.50 |
|
|
|
|
|
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(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Definitions and Reconciliations, table 3. |
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(2) Consists of increases of |
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|
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The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended
|
|||||||||
Q3 2022 Results Compared to |
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|
Per Share |
||||||||
|
EPS |
FFO |
Core FFO |
||||||
Projected per share (1) |
$ |
3.53 |
|
$ |
2.54 |
|
$ |
2.52 |
|
Same Store Residential NOI (2) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
Development and Other Stabilized Residential NOI |
|
— |
|
|
— |
|
|
— |
|
Commercial NOI |
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
Overhead and other |
|
(0.05 |
) |
|
(0.05 |
) |
|
(0.01 |
) |
Capital markets and transaction activity |
|
(0.01 |
) |
|
(0.01 |
) |
|
— |
|
Unconsolidated investment income and other |
|
0.04 |
|
|
0.04 |
|
|
0.01 |
|
Income taxes |
|
(0.04 |
) |
|
(0.04 |
) |
|
— |
|
Gain on sale of real estate and depreciation expense |
|
0.08 |
|
|
— |
|
|
— |
|
Q3 2022 per share reported results |
$ |
3.53 |
|
$ |
2.46 |
|
$ |
2.50 |
|
|
|
|
|
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(1) The mid-point of the Company's |
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(2) Consists of |
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|
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For the nine months ended
The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the nine months ended
|
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YTD 2022 Results Compared to YTD 2021 |
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|
Per Share (1) |
||||||||
|
EPS |
FFO |
Core FFO |
||||||
YTD 2021 per share reported results |
$ |
4.79 |
|
$ |
5.86 |
|
$ |
5.99 |
|
Same Store Residential NOI (2) |
|
1.00 |
|
|
1.00 |
|
|
1.00 |
|
Development and Other Stabilized Residential NOI |
|
0.49 |
|
|
0.49 |
|
|
0.49 |
|
Commercial NOI |
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
Overhead and other |
|
(0.17 |
) |
|
(0.17 |
) |
|
(0.15 |
) |
Capital markets and transaction activity |
|
(0.10 |
) |
|
(0.10 |
) |
|
(0.24 |
) |
Unconsolidated investment income |
|
0.01 |
|
|
0.01 |
|
|
0.03 |
|
Income taxes |
|
(0.05 |
) |
|
(0.05 |
) |
|
— |
|
Gain on sale of real estate and depreciation expense |
|
0.36 |
|
|
— |
|
|
— |
|
YTD 2022 per share reported results |
$ |
6.40 |
|
$ |
7.11 |
|
$ |
7.19 |
|
|
|
|
|
||||||
(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Definitions and Reconciliations, table 3. |
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(2) Consists of increases of |
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|
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Same Store Operating Results for the Three Months Ended
Same Store total revenue increased
|
|
Same Store Residential Rental Revenue Change |
|
Q3 2022 Compared to Q3 2021 |
|
Residential rental revenue |
|
Lease rates |
9.5 % |
Concessions and other discounts |
2.4 % |
Economic occupancy |
(0.2) % |
Other rental revenue |
0.9 % |
Uncollectible lease revenue (excluding rent relief) (1) |
0.6 % |
Rent relief (2) |
(1.4) % |
Total Residential rental revenue |
11.8 % |
|
|
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue decreased to |
|
(2) The Company recognized |
|
|
|
|
|
Same Store Residential operating expenses increased
The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the three months ended
|
||||||||||
Q3 2022 Compared to Q3 2021 |
||||||||||
|
|
Same Store Residential |
||||||||
|
|
Rental
|
|
Opex
|
|
|
|
% of
|
|
Rental
|
|
|
|
|
|
||||||
|
|
NOI |
|
|
||||||
|
|
14.2 % |
|
2.7 % |
|
21.0 % |
|
15.1 % |
|
13.1 % |
Metro NY/NJ |
|
14.5 % |
|
11.1 % |
|
16.2 % |
|
20.8 % |
|
14.0 % |
Mid- |
|
8.8 % |
|
6.7 % |
|
9.9 % |
|
14.4 % |
|
8.6 % |
Southeast FL |
|
18.5 % |
|
5.2 % |
|
26.8 % |
|
1.6 % |
|
17.2 % |
|
|
13.5 % |
|
(3.5) % |
|
22.3 % |
|
1.3 % |
|
13.6 % |
Pacific NW |
|
17.9 % |
|
8.4 % |
|
22.5 % |
|
6.5 % |
|
14.4 % |
N. California |
|
10.7 % |
|
5.0 % |
|
13.1 % |
|
18.7 % |
|
7.1 % |
S. California |
|
8.5 % |
|
6.4 % |
|
9.4 % |
|
21.6 % |
|
7.7 % |
Total |
|
11.8 % |
|
6.5 % |
|
14.4 % |
|
100.0 % |
|
10.5 % |
|
|
|
|
|
|
|
|
|
|
|
(1) See full release for additional detail. |
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(2) See full release for discussion of variances. |
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(3) The change in Residential Rental Revenue with Concessions on a Cash Basis. |
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|
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Same Store Operating Results for the Nine Months Ended
Same Store total revenue increased
|
|
Same Store Residential Rental Revenue Change |
|
YTD 2022 Compared to YTD 2021 |
|
Residential rental revenue |
|
Lease rates |
7.3 % |
Concessions and other discounts |
2.0 % |
Economic occupancy |
0.2 % |
Other rental revenue |
0.9 % |
Uncollectible lease revenue (excluding rent relief) (1) |
(0.5) % |
Rent relief (2) |
1.2 % |
Total Residential rental revenue |
11.1 % |
|
|
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue increased to |
|
(2) The Company recognized |
|
|
|
|
|
Same Store Residential operating expenses increased
The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the nine months ended
|
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YTD 2022 Compared to YTD 2021 |
||||||||||
|
|
Same Store Residential |
||||||||
|
|
Rental
|
|
Opex
|
|
|
|
% of
YTD
|
|
Rental
|
|
|
|
|
|
||||||
|
|
NOI |
|
|
||||||
|
|
12.2 % |
|
5.1 % |
|
16.3 % |
|
14.7 % |
|
13.5 % |
Metro NY/NJ |
|
11.8 % |
|
8.1 % |
|
13.6 % |
|
20.5 % |
|
13.2 % |
Mid- |
|
7.1 % |
|
4.6 % |
|
8.3 % |
|
14.5 % |
|
7.5 % |
Southeast FL |
|
22.0 % |
|
3.5 % |
|
34.6 % |
|
1.6 % |
|
20.7 % |
|
|
13.1 % |
|
(4.9) % |
|
21.4 % |
|
1.3 % |
|
12.3 % |
Pacific NW |
|
15.6 % |
|
3.4 % |
|
21.7 % |
|
6.5 % |
|
14.1 % |
N. California |
|
7.9 % |
|
4.2 % |
|
9.4 % |
|
18.6 % |
|
6.7 % |
S. California |
|
13.2 % |
|
5.5 % |
|
16.8 % |
|
22.3 % |
|
12.3 % |
Total |
|
11.1 % |
|
5.3 % |
|
13.9 % |
|
100.0 % |
|
11.1 % |
|
|
|
|
|
|
|
|
|
|
|
(1) See full release for additional detail. |
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(2) See full release for discussion of variances. |
||||||||||
(3) The change in Residential Rental Revenue with Concessions on a Cash Basis. |
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|
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Development Activity
Consolidated Development Communities
During the three months ended
During the nine months ended
At
Unconsolidated Development Communities
At
Disposition Activity
Consolidated Apartment Communities
During the three months ended
-
Avalon Green I, Avalon Green II and Avalon Green III, located inElmsford, NY ;
-
Avalon Del Mar Station , located inPasadena, CA ; and
-
Avalon Sharon , located inSharon, MA.
In aggregate, these communities contain 1,120 apartment homes and were sold for
During the nine months ended
During the three and nine months ended
The Company utilized a portion of the aggregate disposition proceeds received to acquire the wholly-owned communities discussed below during the nine months ended
Unconsolidated Real Estate Investments
During the three months ended
Acquisition Activity
During the three months ended
During the nine months ended
In
Structured Investment Program Activity
During the nine months ended
Liquidity and Capital Markets
In
In
The Company's cost of borrowing under the Credit Facility is composed of (i) SOFR, (ii) its current borrowing spread to SOFR of
As of
In addition, at
The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the third quarter of 2022 was 4.6 times and Unencumbered NOI (as defined in this release) for the nine months ended
During the three months ended
During the nine months ended
During the nine months ended
In
Fourth Quarter and Full Year 2022 Financial Outlook
For its fourth quarter and full year 2022 financial outlook, the Company expects the following:
|
||||||||
Projected EPS, Projected FFO and Projected Core FFO Outlook (1) |
||||||||
|
|
Q4 2022 |
|
Full Year 2022 |
||||
|
|
Low |
|
High |
|
Low |
|
High |
Projected EPS |
|
|
— |
|
|
|
— |
|
Projected FFO per share |
|
— |
|
|
|
— |
|
|
Projected Core FFO per share |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
(1) See Definitions and Reconciliations, table 9, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS. |
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|
|
|
|
|
||||
Full Year Financial Outlook |
||||||||
|
|
|
|
Full Year 2022 |
||||
|
|
|
|
vs. Full Year 2021 |
||||
|
|
|
|
|
|
Low |
|
High |
Same Store: |
|
|
|
|
|
|
|
|
Residential rental revenue change |
|
|
|
|
— |
|
||
Residential Opex change |
|
|
|
|
— |
|
||
Residential NOI change |
|
|
|
|
— |
|
||
|
|
|
|
|
||||
|
||||||||
The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the third quarter 2022 to its fourth quarter 2022 financial outlook:
|
|||||||||
Q3 2022 Results Compared to Q4 2022 Outlook |
|||||||||
|
Per Share |
||||||||
|
EPS |
FFO |
Core FFO |
||||||
Q3 2022 per share reported results |
$ |
3.53 |
|
$ |
2.46 |
|
$ |
2.50 |
|
Same Store Residential revenue |
|
0.04 |
|
|
0.04 |
|
|
0.04 |
|
Same Store Residential Opex |
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
Development and Other Stabilized Residential NOI |
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
Commercial NOI |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
Capital markets and transaction activity |
|
0.01 |
|
|
0.01 |
|
|
— |
|
Overhead and other |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
Gain on sale of real estate and depreciation expense |
|
(1.89 |
) |
|
— |
|
|
— |
|
Projected per share - Q4 2022 outlook (1) |
$ |
1.75 |
|
$ |
2.57 |
|
$ |
2.60 |
|
|
|
|
|
||||||
(1) Represents the mid-point of the Company's outlook. |
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|
|||||||||
The following table compares the Company’s
|
||||||
to |
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|
Per Share |
|||||
|
EPS |
FFO |
Core FFO |
|||
Projected per share - |
$ |
7.63 |
$ |
9.84 |
$ |
9.86 |
Same Store Residential revenue |
|
(0.04) |
|
(0.04) |
|
(0.04) |
Same Store Residential Opex |
|
(0.03) |
|
(0.03) |
|
(0.03) |
Development and Other Stabilized Residential NOI |
|
(0.01) |
|
(0.01) |
|
(0.01) |
Commercial NOI |
|
0.02 |
|
0.02 |
|
0.02 |
Capital markets and transaction activity |
|
(0.03) |
|
(0.03) |
|
(0.01) |
Overhead and other |
|
(0.08) |
|
(0.08) |
|
— |
Gain on sale of real estate and depreciation expense |
|
0.69 |
|
— |
|
— |
Projected per share - |
$ |
8.15 |
$ |
9.67 |
$ |
9.79 |
|
|
|
|
|||
(1) Represents the mid-point of the Company's outlook. |
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|
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Other Matters
The Company will hold a conference call on
To hear a replay of the call, which will be available from
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 http://www.avalonbay.com/earnings. To receive future press releases via e-mail, please submit a request through http://investors.avalonbay.com/email_notification.
In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at http://www.avalonbay.com/earnings subsequent to this release and before the market opens on
About
As of
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. These forward-looking statements, which you can identify by the Company’s use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook,” "may," "shall," "will," "pursue" and similar expressions that predict or indicate future events and trends and that do not report historical matters, are based on the Company’s expectations, forecasts and assumptions at the time of this release, which may not be realized and involve risks and uncertainties that cannot be predicted accurately or that might not be anticipated. These could cause actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Risks and uncertainties that might cause such differences include the following: risks related to the COVID-19 pandemic, including the effect, among other factors, on the multifamily industry and the general economy of measures taken by businesses and the government, such as governmental limitations on the ability of multifamily owners to evict residents who are delinquent in the payment of their rent, the preferences of consumers and businesses for living and working arrangements, and federal efforts at economic stimulus; we may abandon development or redevelopment opportunities for which we have already incurred costs; adverse capital and credit market conditions, including rising interest rates, may affect our access to various sources of capital and/or cost of capital, which may affect our business activities, earnings and common stock price, among other things; changes in local employment conditions, demand for apartment homes, supply of competitive housing products, landlord-tenant laws, including the adoption of new rent control regulations, and other economic or regulatory conditions may result in lower than expected occupancy and/or rental rates and adversely affect the profitability of our communities; delays in completing development, redevelopment and/or lease-up, and general price inflation, may result in increased financing and construction costs and may delay and/or reduce the profitability of a community; debt and/or equity financing for development, redevelopment or acquisitions of communities may not be available or may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; expenses may result in communities that we develop or redevelop failing to achieve expected profitability; our assumptions concerning risks relating to joint ventures and our ability to successfully dispose of certain assets may not be realized; investments made under the Structured Investment Program in either mezzanine debt or preferred equity of third-party multifamily development may not be repaid as expected; our assumptions and expectations in our financial outlook may prove to be too optimistic; and the timing and net proceeds of condominium sales at The Park Loggia may not equal our current expectations. Additional discussions of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements appear in the Company’s filings with the
The Company does not undertake a duty to update forward-looking statements, including its expected 2022 operating results and other financial data forecasts contained in this release. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.
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 12, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 12 is included in the full earnings release available at the Company’s website at http://www.avalonbay.com/earnings. This wire distribution includes only the following definitions and reconciliations.
Average Rental Revenue per Occupied Home is calculated by the Company as Residential rental 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 attributable to the Company 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
TABLE 1 |
||||
|
|
Q3 |
||
|
|
|
2022 |
|
Net income |
|
$ |
494,632 |
|
Interest expense and loss on extinguishment of debt |
|
|
59,558 |
|
Income tax expense |
|
|
5,651 |
|
Depreciation expense |
|
|
206,658 |
|
EBITDA |
|
$ |
766,499 |
|
|
|
|
||
Gain on sale of communities |
|
|
(318,289 |
) |
Unconsolidated entity EBITDAre adjustments (1) |
|
|
(35,072 |
) |
EBITDAre |
|
$ |
413,138 |
|
|
|
|
||
Unconsolidated entity losses, net |
|
|
307 |
|
Joint venture promote |
|
|
(4,690 |
) |
Structured Investment Program loan reserve |
|
|
45 |
|
Gain on interest rate contract |
|
|
(64 |
) |
Executive transition compensation costs |
|
|
411 |
|
Severance related costs |
|
|
574 |
|
Expensed transaction, development and other pursuit costs, net of recoveries |
|
|
5,783 |
|
Gain on for-sale condominiums |
|
|
(644 |
) |
For-sale condominium marketing, operating and administrative costs |
|
|
340 |
|
Gain on other real estate transactions, net |
|
|
(15 |
) |
Legal settlements |
|
|
(3,677 |
) |
Core EBITDAre |
|
$ |
411,508 |
|
|
|
|
||
(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 nine months ended
TABLE 2 |
|||||||
|
Q3 2022 |
|
YTD 2022 |
||||
GAAP Gain |
$ |
317,962 |
|
|
$ |
466,670 |
|
|
|
|
|
||||
Accumulated Depreciation and Other |
|
(99,081 |
) |
|
|
(127,985 |
) |
|
|
|
|
||||
Economic Gain |
$ |
218,881 |
|
|
$ |
338,685 |
|
|
|
|
|
||||
|
|||||||
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 considered by management to be 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 which are driven by a decrease in the value of depreciable real estate assets held by the affiliate and depreciation of real estate assets, including adjustments for unconsolidated partnerships and joint ventures. By excluding gains or losses related to dispositions of previously depreciated operating communities and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating and financial performance of a company’s real estate between periods or as compared to different companies. Core FFO is the Company's FFO as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered by us to be part of our core business operations, Core FFO can help one compare the core operating and financial 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 |
||||||||||||||||
|
|
Q3 |
|
Q3 |
|
YTD |
|
YTD |
||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income attributable to common stockholders |
|
$ |
494,747 |
|
|
$ |
78,914 |
|
|
$ |
895,482 |
|
|
$ |
669,090 |
|
Depreciation - real estate assets, including joint venture adjustments |
|
|
205,489 |
|
|
|
192,435 |
|
|
|
604,634 |
|
|
|
558,006 |
|
Distributions to noncontrolling interests |
|
|
12 |
|
|
|
12 |
|
|
|
36 |
|
|
|
36 |
|
Gain on sale of unconsolidated entities holding previously depreciated real estate |
|
|
(38,062 |
) |
|
|
— |
|
|
|
(38,062 |
) |
|
|
(23,305 |
) |
Gain on sale of previously depreciated real estate |
|
|
(318,289 |
) |
|
|
(58 |
) |
|
|
(467,493 |
) |
|
|
(388,354 |
) |
Casualty and impairment loss on real estate |
|
|
— |
|
|
|
1,940 |
|
|
|
— |
|
|
|
3,117 |
|
FFO attributable to common stockholders |
|
|
343,897 |
|
|
|
273,243 |
|
|
|
994,597 |
|
|
|
818,590 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusting items: |
|
|
|
|
|
|
|
|
||||||||
Unconsolidated entity losses (gains), net (1) |
|
|
307 |
|
|
|
(6,924 |
) |
|
|
(1,988 |
) |
|
|
(9,056 |
) |
Joint venture promote (2) |
|
|
(4,690 |
) |
|
|
— |
|
|
|
(4,690 |
) |
|
|
— |
|
Structured Investment Program loan reserve (3) |
|
|
45 |
|
|
|
— |
|
|
|
1,653 |
|
|
|
— |
|
Loss on extinguishment of consolidated debt |
|
|
1,646 |
|
|
|
17,890 |
|
|
|
1,646 |
|
|
|
17,768 |
|
Gain on interest rate contract |
|
|
(64 |
) |
|
|
— |
|
|
|
(496 |
) |
|
|
(2,654 |
) |
Advocacy contributions |
|
|
— |
|
|
|
— |
|
|
|
534 |
|
|
|
— |
|
Executive transition compensation costs |
|
|
411 |
|
|
|
411 |
|
|
|
1,220 |
|
|
|
2,599 |
|
Severance related costs |
|
|
574 |
|
|
|
284 |
|
|
|
639 |
|
|
|
386 |
|
Expensed transaction, development and other pursuit costs, net of recoveries (4) |
|
|
5,783 |
|
|
|
273 |
|
|
|
7,781 |
|
|
|
575 |
|
Gain on for-sale condominiums (5) |
|
|
(644 |
) |
|
|
(1,345 |
) |
|
|
(2,113 |
) |
|
|
(2,051 |
) |
For-sale condominium marketing, operating and administrative costs (5) |
|
|
340 |
|
|
|
1,187 |
|
|
|
1,644 |
|
|
|
3,453 |
|
For-sale condominium imputed carry cost (6) |
|
|
400 |
|
|
|
1,648 |
|
|
|
2,035 |
|
|
|
5,779 |
|
Gain on other real estate transactions, net |
|
|
(15 |
) |
|
|
(1,543 |
) |
|
|
(95 |
) |
|
|
(2,002 |
) |
Legal settlements |
|
|
(3,677 |
) |
|
|
22 |
|
|
|
(3,418 |
) |
|
|
1,100 |
|
Income tax expense (7) |
|
|
5,651 |
|
|
|
2,179 |
|
|
|
7,963 |
|
|
|
1,434 |
|
Core FFO attributable to common stockholders |
|
$ |
349,964 |
|
|
$ |
287,325 |
|
|
$ |
1,006,912 |
|
|
$ |
835,921 |
|
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding - diluted |
|
|
139,981,959 |
|
|
|
139,737,725 |
|
|
|
139,964,172 |
|
|
|
139,645,069 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - diluted |
|
$ |
3.53 |
|
|
$ |
0.56 |
|
|
$ |
6.40 |
|
|
$ |
4.79 |
|
FFO per common share - diluted |
|
$ |
2.46 |
|
|
$ |
1.96 |
|
|
$ |
7.11 |
|
|
$ |
5.86 |
|
Core FFO per common share - diluted |
|
$ |
2.50 |
|
|
$ |
2.06 |
|
|
$ |
7.19 |
|
|
$ |
5.99 |
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Amounts for the nine months ended |
||||||||||||||||
(2) Amount for 2022 is for the Company's recognition of its promoted interest in the |
||||||||||||||||
(3) Amounts represent the change in expected credit losses associated with the Company's lending commitments under its Structured Investment Program. The timing and amount of any actual losses that will be incurred, if any, is to be determined. |
||||||||||||||||
(4) Amounts for 2022 include the write-off of |
||||||||||||||||
(5) Aggregate impact of (i) Gain on for-sale condominiums and (ii) For-sale condominium marketing, operating and administrative costs, is a net gain of |
||||||||||||||||
(6) 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. |
||||||||||||||||
(7) Amounts are for the recognition of taxes primarily associated with The Park Loggia. |
||||||||||||||||
|
||||||||||||||||
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
TABLE 4 |
||
|
|
|
Core EBITDAre (1) |
$ |
411,508 |
|
|
|
Interest expense (2) |
$ |
59,558 |
|
|
|
Interest Coverage |
6.9 times |
|
|
|
|
(1) For additional detail, see Definitions and Reconciliations, table 1. |
||
(2) Excludes the impact of gain on interest rate contract. |
||
|
|
|
|
||
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 estimates for non-routine allowance of approximately
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 cash in escrow, divided by annualized third quarter 2022 Core EBITDAre. A calculation of Net Debt-to-Core EBITDAre is as follows (dollars in thousands):
TABLE 5 |
|||
|
|
||
Total debt principal (1) |
$ |
8,078,012 |
|
Cash and cash in escrow |
|
(487,126 |
) |
Net debt |
$ |
7,590,886 |
|
|
|
||
Core EBITDAre (2) |
$ |
411,508 |
|
|
|
||
Core EBITDAre, annualized |
$ |
1,646,032 |
|
|
|
||
Net Debt-to-Core EBITDAre |
4.6 times |
||
|
|
||
(1) Balance at |
|||
(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), corporate-level property management and other indirect operating expenses, 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 investments in unconsolidated entities, depreciation expense, income tax expense (benefit), casualty and impairment loss, gain on sale of communities, gain on other real estate transactions, net, net for-sale condominium 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 of operating performance of a community or communities 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 groups of assets.
Residential NOI represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue. A reconciliation of Residential NOI to Net Income, as well as a breakdown of Residential NOI by operating segment, is as follows (dollars in thousands):
TABLE 6 |
||||||||||||||||||||||||||||
|
|
Q3 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
YTD |
|
YTD |
||||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
|
$ |
494,632 |
|
|
$ |
78,847 |
|
|
$ |
138,566 |
|
|
$ |
262,076 |
|
|
$ |
335,298 |
|
|
$ |
895,274 |
|
|
$ |
669,058 |
|
Property management and other indirect operating expenses, net of corporate income |
|
|
29,374 |
|
|
|
25,322 |
|
|
|
30,632 |
|
|
|
28,113 |
|
|
|
24,555 |
|
|
|
88,119 |
|
|
|
74,110 |
|
Expensed transaction, development and other pursuit costs, net of recoveries |
|
|
6,514 |
|
|
|
417 |
|
|
|
2,364 |
|
|
|
987 |
|
|
|
1,331 |
|
|
|
9,865 |
|
|
|
1,900 |
|
Interest expense, net |
|
|
57,290 |
|
|
|
55,987 |
|
|
|
58,797 |
|
|
|
56,526 |
|
|
|
55,711 |
|
|
|
172,613 |
|
|
|
164,704 |
|
Loss on extinguishment of debt, net |
|
|
1,646 |
|
|
|
17,890 |
|
|
|
— |
|
|
|
— |
|
|
|
19 |
|
|
|
1,646 |
|
|
|
17,768 |
|
General and administrative expense |
|
|
14,611 |
|
|
|
17,313 |
|
|
|
21,291 |
|
|
|
17,421 |
|
|
|
16,481 |
|
|
|
53,323 |
|
|
|
53,130 |
|
Income from investments in unconsolidated entities |
|
|
(43,777 |
) |
|
|
(6,867 |
) |
|
|
(2,480 |
) |
|
|
(317 |
) |
|
|
(5,626 |
) |
|
|
(46,574 |
) |
|
|
(32,959 |
) |
Depreciation expense |
|
|
206,658 |
|
|
|
193,791 |
|
|
|
199,302 |
|
|
|
201,786 |
|
|
|
197,036 |
|
|
|
607,746 |
|
|
|
561,560 |
|
Income tax expense (benefit) |
|
|
5,651 |
|
|
|
2,179 |
|
|
|
(159 |
) |
|
|
2,471 |
|
|
|
4,299 |
|
|
|
7,963 |
|
|
|
1,434 |
|
Casualty and impairment loss |
|
|
— |
|
|
|
1,940 |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
3,117 |
|
Gain on sale of communities |
|
|
(318,289 |
) |
|
|
(58 |
) |
|
|
(404 |
) |
|
|
(148,800 |
) |
|
|
(213,881 |
) |
|
|
(467,493 |
) |
|
|
(388,354 |
) |
Gain on other real estate transactions, net |
|
|
(15 |
) |
|
|
(1,543 |
) |
|
|
(43 |
) |
|
|
(37 |
) |
|
|
(95 |
) |
|
|
(95 |
) |
|
|
(2,002 |
) |
Net for-sale condominium activity |
|
|
(304 |
) |
|
|
(158 |
) |
|
|
71 |
|
|
|
(236 |
) |
|
|
(425 |
) |
|
|
(469 |
) |
|
|
1,402 |
|
NOI from real estate assets sold or held for sale |
|
|
(4,839 |
) |
|
|
(13,147 |
) |
|
|
(7,811 |
) |
|
|
(9,197 |
) |
|
|
(12,192 |
) |
|
|
(21,847 |
) |
|
|
(48,913 |
) |
NOI |
|
|
449,152 |
|
|
|
371,913 |
|
|
|
440,126 |
|
|
|
410,793 |
|
|
|
402,513 |
|
|
|
1,300,071 |
|
|
|
1,075,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial NOI |
|
|
(11,005 |
) |
|
|
(6,672 |
) |
|
|
(7,673 |
) |
|
|
(8,224 |
) |
|
|
(7,945 |
) |
|
|
(26,902 |
) |
|
|
(17,381 |
) |
Residential NOI |
|
$ |
438,147 |
|
|
$ |
365,241 |
|
|
$ |
432,453 |
|
|
$ |
402,569 |
|
|
$ |
394,568 |
|
|
$ |
1,273,169 |
|
|
$ |
1,058,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential NOI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Same Store: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
$ |
58,675 |
|
|
$ |
48,497 |
|
|
$ |
56,523 |
|
|
$ |
51,901 |
|
|
$ |
51,816 |
|
|
$ |
167,099 |
|
|
$ |
143,710 |
|
Metro NY/NJ |
|
|
80,865 |
|
|
|
69,582 |
|
|
|
78,483 |
|
|
|
74,707 |
|
|
|
74,329 |
|
|
|
234,055 |
|
|
|
206,118 |
|
Mid- |
|
|
55,903 |
|
|
|
50,889 |
|
|
|
55,767 |
|
|
|
53,946 |
|
|
|
53,727 |
|
|
|
165,616 |
|
|
|
152,912 |
|
Southeast FL |
|
|
6,359 |
|
|
|
5,015 |
|
|
|
6,161 |
|
|
|
5,965 |
|
|
|
5,904 |
|
|
|
18,485 |
|
|
|
13,738 |
|
|
|
|
4,904 |
|
|
|
4,011 |
|
|
|
4,900 |
|
|
|
4,727 |
|
|
|
4,486 |
|
|
|
14,531 |
|
|
|
11,965 |
|
Pacific NW |
|
|
25,325 |
|
|
|
20,672 |
|
|
|
25,212 |
|
|
|
23,122 |
|
|
|
21,598 |
|
|
|
73,659 |
|
|
|
60,536 |
|
N. California |
|
|
72,440 |
|
|
|
64,040 |
|
|
|
71,439 |
|
|
|
67,807 |
|
|
|
67,052 |
|
|
|
211,686 |
|
|
|
193,458 |
|
S. California |
|
|
83,926 |
|
|
|
76,700 |
|
|
|
89,070 |
|
|
|
81,541 |
|
|
|
81,237 |
|
|
|
254,537 |
|
|
|
217,864 |
|
|
|
|
388,397 |
|
|
|
339,406 |
|
|
|
387,555 |
|
|
|
363,716 |
|
|
|
360,149 |
|
|
|
1,139,668 |
|
|
|
1,000,301 |
|
Other Stabilized |
|
|
33,432 |
|
|
|
18,784 |
|
|
|
30,973 |
|
|
|
26,846 |
|
|
|
25,081 |
|
|
|
91,251 |
|
|
|
43,310 |
|
Development/Redevelopment |
|
|
16,318 |
|
|
|
7,051 |
|
|
|
13,925 |
|
|
|
12,007 |
|
|
|
9,338 |
|
|
|
42,250 |
|
|
|
14,963 |
|
Residential NOI |
|
$ |
438,147 |
|
|
$ |
365,241 |
|
|
$ |
432,453 |
|
|
$ |
402,569 |
|
|
$ |
394,568 |
|
|
$ |
1,273,169 |
|
|
$ |
1,058,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
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 |
||||||||||||||||||||||||||||
|
|
Q3 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
YTD |
|
YTD |
||||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenue from real estate assets sold or held for sale |
|
$ |
7,315 |
|
|
$ |
21,636 |
|
|
$ |
11,956 |
|
|
$ |
14,838 |
|
|
$ |
19,694 |
|
|
$ |
34,110 |
|
|
$ |
79,989 |
|
Operating expenses from real estate assets sold or held for sale |
|
|
(2,476 |
) |
|
|
(8,489 |
) |
|
|
(4,145 |
) |
|
|
(5,641 |
) |
|
|
(7,502 |
) |
|
|
(12,263 |
) |
|
|
(31,076 |
) |
NOI from real estate assets sold or held for sale |
|
$ |
4,839 |
|
|
$ |
13,147 |
|
|
$ |
7,811 |
|
|
$ |
9,197 |
|
|
$ |
12,192 |
|
|
$ |
21,847 |
|
|
$ |
48,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial NOI is composed of the following components (in thousands):
TABLE 8 |
||||||||||||||||||||||||||||
|
|
Q3 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
YTD |
|
YTD |
||||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial Revenue |
|
$ |
12,577 |
|
|
$ |
8,174 |
|
|
$ |
9,235 |
|
|
$ |
9,924 |
|
|
$ |
9,284 |
|
|
$ |
31,736 |
|
|
$ |
21,730 |
|
Commercial Operating Expenses |
|
|
(1,572 |
) |
|
|
(1,502 |
) |
|
|
(1,562 |
) |
|
|
(1,700 |
) |
|
|
(1,339 |
) |
|
|
(4,834 |
) |
|
|
(4,349 |
) |
Commercial NOI |
|
$ |
11,005 |
|
|
$ |
6,672 |
|
|
$ |
7,673 |
|
|
$ |
8,224 |
|
|
$ |
7,945 |
|
|
$ |
26,902 |
|
|
$ |
17,381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Other Stabilized is composed of completed consolidated communities that the Company owns, which have Stabilized Operations as of
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 fourth quarter and full year 2022 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) - Q4 2022 |
$ |
1.70 |
|
|
$ |
1.80 |
|
Depreciation (real estate related) |
|
1.42 |
|
|
|
1.42 |
|
Gain on sale of communities |
|
(0.60 |
) |
|
|
(0.60 |
) |
Projected FFO per share (diluted) - Q4 2022 |
|
2.52 |
|
|
|
2.62 |
|
Expensed transaction, development and other pursuit costs, net of recoveries |
|
0.01 |
|
|
|
0.01 |
|
Income tax expense |
|
0.02 |
|
|
|
0.02 |
|
Projected Core FFO per share (diluted) - Q4 2022 |
$ |
2.55 |
|
|
$ |
2.65 |
|
|
|
|
|
||||
Projected EPS (diluted) - Full Year 2022 |
$ |
8.10 |
|
|
$ |
8.20 |
|
Depreciation (real estate related) |
|
5.74 |
|
|
|
5.74 |
|
Gain on sale of communities |
|
(4.22 |
) |
|
|
(4.22 |
) |
Projected FFO per share (diluted) - Full Year 2022 |
|
9.62 |
|
|
|
9.72 |
|
|
|
|
|
||||
Joint venture promote and unconsolidated entity gains, net |
|
(0.05 |
) |
|
|
(0.05 |
) |
Expensed transaction, development and other pursuit costs, net of recoveries |
|
0.06 |
|
|
|
0.06 |
|
Executive transition compensation costs |
|
0.01 |
|
|
|
0.01 |
|
Legal settlements |
|
(0.02 |
) |
|
|
(0.02 |
) |
Structured Investment Program loan reserve |
|
0.01 |
|
|
|
0.01 |
|
Income tax expense |
|
0.07 |
|
|
|
0.07 |
|
Adjustments related to residential for-sale condominiums at The Park Loggia (1) |
|
0.01 |
|
|
|
0.01 |
|
Loss on extinguishment of consolidated debt |
|
0.01 |
|
|
|
0.01 |
|
Other |
|
0.02 |
|
|
|
0.02 |
|
Projected Core FFO per share (diluted) - Full Year 2022 |
$ |
9.74 |
|
|
$ |
9.84 |
|
|
|
|
|
||||
(1) The Park Loggia adjustments relate to the following for the for-sale condominiums: operating expenses incurred, GAAP gain after taxes and cost of sales, and imputed carry costs on unsold homes. |
|||||||
|
|
|
|
||||
|
|||||||
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 ("Weighted Average Initial Projected Stabilized Yield") 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
Residential represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue.
Residential Rental Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to Residential rental revenue in conformity with GAAP to help investors evaluate the impact of both current and historical concessions on GAAP-based Residential rental revenue and to more readily enable comparisons to revenue as reported by other companies. In addition, Residential Rental Revenue with Concessions on a Cash Basis allows an investor to understand the historical trend in cash concessions.
A reconciliation of Same Store Residential rental revenue in conformity with GAAP to Residential Rental Revenue with Concessions on a Cash Basis is as follows (dollars in thousands):
TABLE 10 |
||||||||||||||||||||
|
|
Q3 |
|
Q3 |
|
Q2 |
|
YTD |
|
YTD |
||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
Residential rental revenue (GAAP basis) |
|
$ |
567,890 |
|
|
$ |
507,881 |
|
|
$ |
555,528 |
|
|
$ |
1,652,297 |
|
|
$ |
1,487,053 |
|
Residential concessions amortized |
|
|
2,883 |
|
|
|
15,385 |
|
|
|
5,175 |
|
|
|
16,294 |
|
|
|
47,026 |
|
Residential concessions granted |
|
|
(1,932 |
) |
|
|
(8,344 |
) |
|
|
(1,667 |
) |
|
|
(5,926 |
) |
|
|
(37,702 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential Rental Revenue with Concessions on a Cash Basis |
|
$ |
568,841 |
|
|
$ |
514,922 |
|
|
$ |
559,036 |
|
|
$ |
1,662,665 |
|
|
$ |
1,496,377 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
Q3 2022 |
|
Q3 2022 |
|
|
|
YTD 2022 |
||||||||||
|
|
|
|
vs. Q3 2021 |
|
vs. Q2 2022 |
|
|
|
vs. YTD 2021 |
||||||||||
% change -- GAAP revenue |
|
|
|
|
11.8 |
% |
|
|
2.2 |
% |
|
|
|
|
11.1 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
% change -- cash revenue |
|
|
|
|
10.5 |
% |
|
|
1.8 |
% |
|
|
|
|
11.1 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||||||
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 2022 operating results, Same Store is composed of consolidated communities that have Stabilized Operations as of
Stabilized Operations/Restabilized Operations is defined as the earlier of (i) attainment of
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, 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 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.
Unencumbered NOI as calculated by the Company represents NOI generated by real estate assets unencumbered by outstanding secured notes payable as of
TABLE 11 |
||||
|
|
Year to Date 2022 |
||
|
|
NOI |
||
Residential NOI: |
|
|
||
Same Store |
|
$ |
1,139,668 |
|
Other Stabilized |
|
|
91,251 |
|
Development/Redevelopment |
|
|
42,250 |
|
Total Residential NOI |
|
|
1,273,169 |
|
Commercial NOI |
|
|
26,902 |
|
NOI from real estate assets sold or held for sale |
|
|
21,847 |
|
Total NOI generated by real estate assets |
|
|
1,321,918 |
|
Less NOI on encumbered assets |
|
|
(62,831 |
) |
NOI on unencumbered assets |
|
$ |
1,259,087 |
|
|
|
|
||
Unencumbered NOI |
|
|
95 |
% |
|
|
|
||
|
|
|
||
|
||||
Copyright © 2022
View source version on businesswire.com: https://www.businesswire.com/news/home/20221102006159/en/
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FAQ
What was AvalonBay Communities' net income for Q3 2022?
How much did AvalonBay's EPS increase in Q3 2022?
What is the FFO per share reported by AvalonBay for Q3 2022?
What growth did AvalonBay see in Same Store Residential NOI?
What are the projected EPS and FFO for AvalonBay for Q4 2022?
