| Metric [USD Thousands] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Same Store             | N/A     | **629,929**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **636,890**  **[0000915912-23-000014_avb-20230630.htm:10]**  | **642,093**  **[0000915912-23-000018_avb-20230930.htm:10]**  | **636,255**  **[0000915912-24-000002_q42023ex-992.htm:2]**  | **669,227**  **[0000915912-24-000009_q12024ex-991.htm:0]**  | **666,166**  **[0000915912-24-000013_q22024ex-992.htm:16]**  | N/A |
| Other Stabilized       | N/A     | **31,730**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **32,240**  **[0000915912-23-000014_avb-20230630.htm:10]**  | **33,241**  **[0000915912-23-000018_avb-20230930.htm:10]**  | **32,936**  **[0000915912-24-000002_q42023ex-992.htm:16]**  | **23,012**  **[0000915912-24-000009_q12024ex-992.htm:10]**  | **23,723**  **[0000915912-24-000013_q22024ex-992.htm:16]**  | N/A |
| Development/Redevelopment | N/A  | **10,500**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **13,029**  **[0000915912-23-000014_avb-20230630.htm:10]**  | **17,309**  **[0000915912-23-000018_avb-20230930.htm:10]**  | **20,376**  **[0000915912-24-000002_q42023ex-992.htm:16]**  | **8,017**  **[0000915912-24-000009_q12024ex-992.htm:10]**  | **13,668**  **[0000915912-24-000013_q22024ex-992.htm:16]**  | N/A |
| Commercial             | N/A     | N/A     | N/A     | N/A     | **10,574**  **[0000915912-24-000002_q42023ex-992.htm:16]**  | **10,112**  **[0000915912-24-000009_q12024ex-992.htm:10]**  | **10,683**  **[0000915912-24-000013_q22024ex-992.htm:16]**  | N/A |
| Non-allocated (Management, Development, and Other Fees and Other Ancillary Items) | **3,279**  **[0000915912-23-000002_q42022ex-992.htm:13]**  | **1,066**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **2,712**  **[0000915912-23-000014_avb-20230630.htm:10]**  | **1,934**  **[0000915912-23-000018_avb-20230930.htm:10]**  | N/A | N/A | N/A | **1,716**  **[0000915912-24-000021_avb-20240930.htm:12]**  |

93b96681bf0cadb72c583cb5c97fc89117a960ce87212a0925fc4ab343a7ea1b

| Geographical Segment | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| New England ($000)   | **89,478**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **92,435**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **91,252**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **92,745**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **96,557**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **91,649**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Metro NY/NJ ($000)   | **120,466**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **132,495**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **132,464**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **132,448**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **133,711**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **133,023**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Mid-Atlantic ($000)  | **84,701**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **92,079**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **91,915**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **92,926**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **101,206**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **102,937**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Southeast FL ($000)  | **10,082**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **19,310**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **18,351**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **18,319**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **23,954**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **24,076**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Denver, CO ($000)    | **6,979**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **6,847**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **7,036**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **7,166**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **10,066**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **10,136**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Pacific NW ($000)    | **35,953**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **42,660**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **41,944**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **41,878**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **42,023**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **42,861**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Northern CA ($000)   | **102,324**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **105,145**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **105,780**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **105,749**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **106,138**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **106,473**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Southern CA ($000)   | **121,845**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **133,099**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **135,394**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **138,284**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **147,426**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **146,897**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |
| Other Regions ($000) | N/A     | **5,859**  **[0000915912-23-000010_avb-20230331.htm:21]**  | **5,747**  **[0000915912-23-000012_q22023ex-992.htm:17]**  | **5,803**  **[0000915912-23-000016_q32023ex-992.htm:3]**  | N/A     | **8,146**  **[0000915912-24-000009_q12024ex-992.htm:11]**  | **8,114**  **[0000915912-24-000013_q22024ex-992.htm:18]**  | N/A     |

1f728c97f17fe5cd59ac8f829bd6013f0cdc6b64a6990c6dc53d7af4ab964249

| Metric | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------|---------|---------|---------|---------|---------|---------|---------|---------|
| Number of Communities | **294**  **[0000915912-23-000002_q42022ex-991.htm:7]** **[0000915912-23-000002_q42022ex-992.htm:7]**  | **295**  **[0001628280-23-013351_q12023ex-992.htm:3]**  | **294**  **[0000915912-23-000014_avb-20230630.htm:6]**  | **296**  **[0000915912-23-000018_avb-20230930.htm:34]**  | **299**  **[0000915912-24-000002_q42023ex-992.htm:7]** **[0000915912-24-000002_q42023ex-991.htm:8]** **[0000915912-24-000004_avb-20231231.htm:56]**  | **299**  **[0000915912-24-000009_q12024ex-992.htm:3]** **[0000915912-24-000009_q12024ex-991.htm:3]**  | **300**  **[0000915912-24-000013_q22024ex-992.htm:6]** **[0000915912-24-000013_q22024ex-991.htm:7]**  | **305**  **[0000915912-24-000021_avb-20240930.htm:8]**  |
| Number of Apartment Homes | **88,475**  **[0000915912-23-000002_q42022ex-991.htm:7]** **[0000915912-23-000002_q42022ex-992.htm:7]**  | **88,826**  **[0000915912-23-000010_avb-20230331.htm:6]**  | **88,659**  **[0000915912-23-000014_avb-20230630.htm:6]**  | **89,240**  **[0000915912-23-000018_avb-20230930.htm:6]**  | **90,669**  **[0000915912-24-000002_q42023ex-992.htm:7]**  | **90,673**  **[0000915912-24-000009_q12024ex-992.htm:3]**  | **91,399**  **[0000915912-24-000013_q22024ex-991.htm:7]** **[0000915912-24-000015_avb-20240630.htm:7]**  | **92,908**  **[0000915912-24-000021_avb-20240930.htm:8]**  |
| Total Capitalized Cost ($ millions) | **2,353**  **[0000915912-23-000002_q42022ex-992.htm:24]**  | **2,360**  **[0000915912-23-000010_avb-20230331.htm:28]** **[0000915912-23-000010_avb-20230331.htm:48]** **[0001628280-23-013351_q12023ex-991.htm:1]**  | **2,293**  **[0000915912-23-000014_avb-20230630.htm:31]** **[0000915912-23-000012_q22023ex-991.htm:4]**  | **2,257**  **[0000915912-23-000018_avb-20230930.htm:54]** **[0000915912-23-000016_q32023ex-991.htm:5]**  | **2,684**  **[0000915912-24-000002_q42023ex-992.htm:26]**  | **2,500**  **[0000915912-24-000011_avb-20240331.htm:44]** **[0000915912-24-000009_q12024ex-992.htm:1]**  | **2,537**  **[0000915912-24-000015_avb-20240630.htm:48]** **[0000915912-24-000013_q22024ex-991.htm:4]**  | **3,243**  **[0000915912-24-000019_q32024ex-992.htm:23]**  |
| Weighted Avg. Number of Occupied Apartment Homes | N/A | **77,482**  **[0000915912-23-000010_avb-20230331.htm:32]**  | **77,507**  **[0000915912-23-000014_avb-20230630.htm:35]**  | **77,439**  **[0000915912-23-000018_avb-20230930.htm:37]**  | **87,947**  **[0000915912-24-000002_q42023ex-992.htm:16]**  | **78,829**  **[0000915912-24-000011_avb-20240331.htm:29]**  | **79,111**  **[0000915912-24-000015_avb-20240630.htm:33]**  | **79,203**  **[0000915912-24-000021_avb-20240930.htm:35]**  |
| Weighted Avg. Monthly Revenue per Occupied Apartment Home ($) | **2,861**  **[0000915912-23-000002_q42022ex-992.htm:17]**  | **2,892**  **[0000915912-23-000010_avb-20230331.htm:32]**  | **2,920**  **[0000915912-23-000012_q22023ex-992.htm:14]**  | **2,962**  **[0000915912-23-000016_q32023ex-992.htm:16]**  | **2,967**  **[0000915912-24-000002_q42023ex-992.htm:18]**  | **2,999**  **[0000915912-24-000011_avb-20240331.htm:29]**  | **2,989**  **[0000915912-24-000013_q22024ex-992.htm:17]**  | **3,033**  **[0000915912-24-000019_q32024ex-992.htm:15]**  |
| Economic Occupancy (%) | **95.9**  **[0000915912-23-000002_q42022ex-992.htm:16]**  | **96.1**  **[0000915912-23-000010_avb-20230331.htm:32]**  | **96.0**  **[0000915912-24-000013_q22024ex-992.htm:17]**  | **95.7**  **[AVB_3362485_33]**  | **95.6**  **[0000915912-24-000002_q42023ex-992.htm:16]**  | **95.9**  **[0000915912-24-000009_q12024ex-992.htm:11]** **[0000915912-24-000009_q12024ex-992.htm:10]**  | **96.0**  **[0000915912-24-000013_q22024ex-992.htm:17]**  | **95.6**  **[0000915912-24-000019_q32024ex-992.htm:15]**  |
| Total Capitalized Cost of Development Communities ($ millions) | **2,259**  **[0000915912-23-000004_avb-20221231.htm:45]**  | **2,360**  **[0000915912-23-000010_avb-20230331.htm:48]**  | **2,293**  **[0000915912-23-000014_avb-20230630.htm:51]**  | **2,257**  **[0000915912-23-000018_avb-20230930.htm:54]**  | **2,491**  **[0000915912-24-000004_avb-20231231.htm:45]**  | **2,500**  **[0000915912-24-000011_avb-20240331.htm:44]**  | **2,537**  **[0000915912-24-000015_avb-20240630.htm:48]**  | **2,683**  **[0000915912-24-000021_avb-20240930.htm:51]**  |

27557e5a36d63bdc5dc4a8994a6b7fe43e30c5aed8f996ffd7a79f1bb1979bca

38a138a5c2650da50fe57ede84cf6eed45330af6b5931993f839de193f1e5d16

a6516f578d56ef2c3bca870ae45dd228db7d08c8ed644af87c5cafc6e09a873d

1. With the transaction market remaining thin and lacking distressed opportunities, how will you effectively execute your paired trade strategy to increase suburban and expansion region allocations without overpaying for acquisitions or being limited by capital gains constraints on dispositions?
2. Given the plan to increase development starts to nearly $1.1 billion amid a volatile interest rate environment, what specific strategies are you implementing to mitigate risks associated with rising construction costs and potential delays impacting your projected 6.3% untrended initial stabilized yields?
3. As you shift focus toward build-to-rent communities, including townhome products and potentially detached units, how do you plan to overcome operational challenges related to managing smaller, disparate assets and ensure that these investments achieve scale and desired returns?
4. Considering your expectation of reduced property tax expenses due to expiring tax abatement programs like New York City's 421-a, how are you preparing for potential increases in property taxes in expansion regions, especially in the Sunbelt, where higher rates could offset these benefits?
5. With increased development and expansion into new markets, how are you assessing and addressing the risk of oversupply potentially impacting rent growth and occupancy, particularly as deliveries are expected to remain elevated or increase in certain regions like New York City?

14dfdd42f5dd72217ed61b4e3270932c304fa2fbac2d7740f00bfb505a8843ad

Number of Communities

Number of Apartment Homes

Weighted Avg. Number of Occupied Apartment Homes

Weighted Avg. Monthly Revenue per Occupied Apartment Home ($)

Economic Occupancy (%)

6b21ec5ab0408c2b727582598dc1688d98eae40813edc85cf230f007dd69801b

9e47f2f4877c45b978d7f6cca5108b13af98d2fc8540abbfd201b99f06582998

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

2bc246c8f6ba1490073b62bce6c499066a8279668384cf88c1c018b51b93b84a

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO Guidance**: $11.04 per share, 3.9% growth  **[AVB_3405815_2]** .
  2. **Same-Store Revenue Growth**: 3.5%  **[AVB_3405815_2]** .
  3. **Same-Store Operating Expense**: 4.5%  **[AVB_3405815_2]** .
  4. **Same-Store NOI Guidance**: 3%  **[AVB_3405815_2]** .
  5. **Development Starts**: Nearly $1.1 billion, 6.3% yield  **[AVB_3405815_1]** .
  6. **Operating Expense Growth**: Expected moderation into 2025  **[AVB_3405815_4]** .
  7. **Other Rental Revenue Growth**: Strong growth, less than 15%  **[AVB_3405815_28]** .
  8. **Bad Debt Improvement**: 60 basis points improvement  **[AVB_3405815_3]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO per Share**: $11.02 per share, 3.7% growth  **[AVB_3396114_3]** .
  2. **Same-Store Revenue Growth**: 3.5%  **[AVB_3396114_5]** **[AVB_3396114_3]** .
  3. **Same-Store NOI Growth**: 2.9%  **[AVB_3396114_3]** .
  4. **Same-Store Operating Expense Growth**: 4.8%  **[AVB_3396114_3]** .
  5. **Like-Term Effective Rent Change**: 3% range  **[AVB_3396114_5]** .
  6. **Lease Renewals**: Mid-4% range  **[AVB_3396114_5]** .
  7. **New Development Starts**: Over $1 billion  **[AVB_3396114_3]** .
  8. **Incremental NOI from Operating Initiatives**: $10 million  **[AVB_3396114_5]** .
  9. **Bad Debt**: 1.7%  **[AVB_3396114_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Same-Store Revenue Growth**: 3.1%  **[AVB_3381315_4]** **[AVB_3381315_2]** .
  2. **Like-Term Effective Rent Change**: Mid-2% range  **[AVB_3381315_4]** **[AVB_3381315_18]** .
  3. **Renewals**: Low to mid-4% range  **[AVB_3381315_4]** **[AVB_3381315_18]** .
  4. **New Move-Ins**: 50 basis points  **[AVB_3381315_4]** **[AVB_3381315_18]** .
  5. **Underlying Bad Debt**: 1.7%  **[AVB_3381315_4]** .
  6. **Core FFO Guidance**: $10.91 per share, 2.6% increase  **[AVB_3381315_2]** .
  7. **Development Yields**: 100 to 150 basis points spread  **[AVB_3381315_5]** .
  8. **Capital Expenditure**: $1,600 to $1,700 per unit  **[AVB_3381315_24]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO per Share Growth**: 1.4%  **[AVB_3371724_3]** .
  2. **Same-Store Revenue Growth**: 2.6%  **[AVB_3371724_3]** .
  3. **Same-Store NOI Growth**: 1.25%  **[AVB_3371724_3]** .
  4. **Total Capital Uses**: $1.4 billion  **[AVB_3371724_3]** .
  5. **Capital Sources**: $850 million in new capital  **[AVB_3371724_3]** .
  6. **Unrestricted Cash**: $225 million projected  **[AVB_3371724_3]** .
  7. **Market Rent Growth**: 2.25% to 2.5%  **[AVB_3371724_24]** .
  8. **Same-Store Revenue Growth Drivers**: Embedded Rent Roll Growth 1%, Other Rental Revenue 13%, Bad Debt Improvement 60 basis points  **[AVB_3371724_4]** .
  9. **Operating Expense Growth**: 340 basis points  **[AVB_3371724_4]** .
  10. **Development and Investment Plans**: $870 million in new developments  **[AVB_3371724_5]** .

These summaries provide a comprehensive view of AVB's financial and operational expectations as discussed in their respective earnings calls.

bab4996f87536a70f4e5fb88abaab5ce79c4d228bbca310ceb532e31e642a219

| Name                | Position                                          | Start Date          | Short Bio                                                                                                                                                                                                 |
|---------------------|---------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Benjamin W. Schall  | Chief Executive Officer & President               | January 2021 (President), January 3, 2022 (CEO) | Benjamin W. Schall joined AvalonBay as President and a director in January 2021 and became CEO effective January 3, 2022. Previously, he was CEO and President of Seritage Growth Properties  **[0001308179-24-000352_lavb2024_def14a.htm:10]** **[0001308179-23-000619_lavb2023_def14a.htm:10]** .     |
| Kevin P. O'Shea     | Chief Financial Officer                           | June 2014           | Kevin P. O'Shea has been CFO since June 2014. He previously served as Executive Vice President—Capital Markets and Senior Vice President—Investment Management. He has a background in real estate investment banking  **[0001308179-24-000352_lavb2024_def14a.htm:68]** **[0001308179-23-000619_lavb2023_def14a.htm:68]** . |
| Matthew H. Birenbaum| Chief Investment Officer                          | January 2015        | Matthew H. Birenbaum has been CIO since January 2015, overseeing investment strategy and related functions. He re-joined AvalonBay in 2011 after founding Abbey Road Property Group, LLC  **[0001308179-24-000352_lavb2024_def14a.htm:68]** **[0001308179-23-000619_lavb2023_def14a.htm:68]** .          |
| Sean J. Breslin     | Chief Operating Officer                           | January 2015        | Sean J. Breslin has been COO since January 2015, responsible for the company's operating platform. He joined AvalonBay in 2002 and previously served as COO of CWS Capital Partners  **[0001308179-24-000352_lavb2024_def14a.htm:69]** .                  |
| Edward M. Schulman  | Executive Vice President—General Counsel & Secretary | 2012                | Edward M. Schulman has served as EVP—General Counsel and Secretary since 2012. He joined AvalonBay in 1999 and was previously a partner at Goodwin Procter LLP  **[0001308179-24-000352_lavb2024_def14a.htm:69]** .                                       |
| Keri A. Shea        | Senior Vice President—Finance & Treasurer         | 2013                | Keri A. Shea has been SVP—Finance and Treasurer since 2013 and principal accounting officer since 2009. She joined AvalonBay in 2002 and is a CPA. She plans to retire on January 1, 2025  **[0001308179-24-000352_lavb2024_def14a.htm:69]** .            |
| Alaine S. Walsh     | Executive Vice President—Human Capital and Administration | January 2024       | Alaine S. Walsh has been EVP—Human Capital and Administration since January 2024. She joined AvalonBay in 1998 and has held various positions, previously serving as SVP, Operations and Investment Services  **[0001308179-24-000352_lavb2024_def14a.htm:69]** . |

82dd915217d04c93cceaeaa8fe753bec0b52b28dbcdcc303b518c5083e3cc2bd

Total Revenue [USD, Thousands]

Cost of Goods Sold (COGS) [USD, Thousands]

SG&A [USD, Thousands]

R&D [USD, Thousands]

D&A [USD, Thousands]

Interest Expense [USD, Thousands]

Operating Income (EBIT) [USD, Thousands]

Net Income [USD, Thousands]

EPS - Basic [USD, Units]

EPS - Diluted [USD, Units]

ab18f92d4908332d62f560c4b489c00aefc9eb05248175fd6ca554254be14e46

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | July 2020  **[0000915912-24-000021_avb-20240930.htm:61]**    |
| End Date/Duration        | No expiration  **[0000915912-24-000021_avb-20240930.htm:61]**  |
| Total additional amount  | $500,000,000  **[0000915912-24-000021_avb-20240930.htm:61]**  |
| Remaining authorization  | $314,237,000  **[0000915912-24-000021_avb-20240930.htm:44]**  |
| Details                  | Provides flexibility to repurchase shares based on factors like price, market conditions, and corporate liquidity requirements.  **[0000915912-23-000010_avb-20230331.htm:40]** **[0000915912-23-000004_avb-20221231.htm:72]** **[0000915912-23-000010_avb-20230331.htm:59]**  |

53f3d3c197cc2f5cac45cbe39929d7d4f9f37e1b6c248c2213a8ed33355ee303

1. **Rent Growth Outlook**  
   **Q:** What's the expected blended rent growth for 2024?  
   **A:** Management expects a rent change of roughly **2%** in 2024, with renewals at about **4%** and new move-ins essentially flat.  **[AVB_3371724_7]**  They anticipate some acceleration in rent change in the second half of 2024 relative to the first half.  **[AVB_3371724_7]** 

2. **Development Pipeline Contribution**  
   **Q:** How will the development pipeline contribute to earnings in 2024?  
   **A:** The earnings accretion from development undergoing lease-up is about **$0.18 per share** this year, equating to approximately **170 basis points** of earnings growth in 2024, consistent with typical levels.  **[AVB_3371724_13]** 

3. **2024 Development Starts and Yields**  
   **Q:** What's the plan for 2024 development starts and expected yields?  
   **A:** AVB plans to start **$870 million** of development in 2024, mostly in the back half of the year.  **[AVB_3371724_9]** **[AVB_3371724_17]**  Expected yields are in the **mid-6% range**  **[AVB_3371724_16]** , with about one-third of starts in expansion markets like North Carolina.  **[AVB_3371724_16]** 

4. **Established vs. Expansion Regions Performance**  
   **Q:** How do established and expansion regions compare in lease rate growth?  
   **A:** Demand and supply fundamentals are better in established regions.  **[AVB_3371724_11]**  In Q4, suburban portfolios saw about **200 basis points** better growth than urban, but management doesn't expect this gap to persist at that level.  **[AVB_3371724_12]** 

5. **Sensitivity to Macroeconomic Conditions**  
   **Q:** How sensitive are rent growth projections to macroeconomic conditions?  
   **A:** Rent growth depends on job and wage growth and timing. A significant improvement in the macro environment could boost rent growth, especially if it occurs before peak leasing season.  **[AVB_3371724_25]** 

6. **Capitalized Interest and Development Balance**  
   **Q:** How is capitalized interest expense expected to change, and why?  
   **A:** Capitalized interest expense is expected to decrease by **$5 million** year-over-year due to more completions than new projects entering construction.  **[AVB_3371724_14]** 

7. **San Francisco and Seattle Market Recovery**  
   **Q:** How are the San Francisco and Seattle markets recovering?  
   **A:** Northern California rents are still down roughly **10%** from pre-COVID peaks, with San Francisco down **12–13%**.  **[AVB_3371724_26]**  Seattle rents are up about **8%**, but the urban core remains more challenged due to supply and quality-of-life issues.  **[AVB_3371724_26]** 

8. **AvalonConnect's Impact on Revenue and Expenses**  
   **Q:** How will AvalonConnect impact revenue and expenses?  
   **A:** AvalonConnect contributes about **80 basis points** to revenue growth from other rental revenue.  **[AVB_3371724_20]**  The associated costs are essentially **100% expensed**.  **[AVB_3371724_19]** 

9. **Transaction Market and Cap Rates**  
   **Q:** What's the outlook for acquisitions and cap rates?  
   **A:** There's still a significant bid-ask spread. Management expects transactions to begin at cap rates between **5% and 5.5%** in the next few months, primarily for highly desirable assets.  **[AVB_3371724_34]** 

10. **Sunbelt Market Supply Impact**  
    **Q:** How is supply affecting the Sunbelt markets and revenue growth?  
    **A:** Expansion regions are experiencing flat blended rent change, with new move-ins down about **150 basis points** and renewals up **low to mid-3%**.  **[AVB_3371724_28]**  The most significant revenue impact is expected in **2025** as leases roll over to lower market rents.  **[AVB_3371724_28]** 

d8d9d8ab65733506d6baf22960afde146eb4218306bd22ed794b9d07ac7e60af

Same Store

Established Communities

- Lease Income

Other Stabilized

Development/Redevelopment

Non-allocated

- Management, Development, and Other Fees

Non-lease Related Revenue

Total Revenue

7ae8e3251a7588e576e582eb1ebc2c71c119d59316272cb740001adc47c717c7

**Annual guidance for FY 2024:**
- **Core FFO per Share**: $11.04  **[AVB_3405815_2]**  (raised from $11.02  **[AVB_3396114_3]** )  
- **Same-Store Revenue Growth**: 3.5%  **[AVB_3405815_2]**  (no change from prior guidance  **[AVB_3396114_5]** **[AVB_3396114_3]** )  
- **Same-Store Operating Expense Growth**: 4.5%  **[AVB_3405815_2]**  (lowered from 4.8%  **[AVB_3396114_3]** )  
- **Same-Store NOI Guidance**: 3%  **[AVB_3405815_2]**  (raised from 2.9%  **[AVB_3396114_3]** )  
- **Development Starts**: nearly $1.1 billion, 6.3% yield  **[AVB_3405815_1]**  (raised from over $1 billion  **[AVB_3396114_3]** )  
- **Operating Expense Growth**: expected moderation into 2025  **[AVB_3405815_4]**  (no prior guidance)  
- **Other Rental Revenue Growth**: strong growth, less than 15%  **[AVB_3405815_28]**  (no prior guidance)  
- **Bad Debt Improvement**: 60 basis points improvement  **[AVB_3405815_3]**  (lowered from 1.7%  **[AVB_3396114_5]** )  

410cfb24686f2f396e133ad6b99b9089ad0ea7d4b6391bd0914f2a36346748f4

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2002  **[0000915912-24-000004_avb-20231231.htm:98]**    | Present  | Current auditor   |

fe6e7d7f14e8a8a9153872e34d09f41be40d90f37437a7c70beca371e403887e

95a4b18a036e1f001a07f37c698ba481e20a06eee494383e6a1d72af2c8568e7

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $731.0 million (+5% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Net Income: $372.519 million (**+116%** YoY)  **[0000915912-23-000018_avb-20230930.htm:3]** **[0000915912-24-000021_avb-20240930.htm:3]**   
- Diluted EPS: $2.62 (**+115%** YoY)  **[0000915912-23-000018_avb-20230930.htm:3]** **[0000915912-24-000021_avb-20240930.htm:3]**   
- Same Store Revenue: $677.579 million (+5.5% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Development/Redevelopment Revenue: $20.108 million (+16% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Mid-Atlantic Region: $105.465 million (+13% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Southeast Florida Region: $24.292 million (+29% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Denver, CO Region: $10.369 million (+45% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Southern California Region: $149.491 million (+7% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Other Expansion Regions: $8.591 million (+40% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   
- Non-allocated Revenue: $1.716 million (-11% YoY)  **[0000915912-23-000018_avb-20230930.htm:25]** **[0000915912-24-000021_avb-20240930.htm:23]**   

a7e2a952fb8e6849f5e55c8fd2c4dc246f786dcb77adabd61f7a37000c3b4af4

f0706e0c7492887ababe178b4b02be5b898856725dc9309bf4723214522c981a

| Year | Amount Due (in millions) | Debt Type                  | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|---------------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | 300.461                      | Unsecured Notes                | 3.50                 | 3.6% = (300.461 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2025     | 835.765                      | Unsecured Notes                | 3.45, 3.50           | 9.9% = (835.765 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2026     | 786.811                      | Unsecured Notes                | 2.95, 2.90           | 9.3% = (786.811 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2027     | 650.159                      | Unsecured & Secured Notes      | 3.35                 | 7.7% = (650.159 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2028     | 868.902                      | Unsecured Notes                | 3.20, 1.90           | 10.3% = (868.902 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                |
| 2029     | 734.910                      | Unsecured & Secured Notes      | 3.30                 | 8.7% = (734.910 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2030     | 709.100                      | Unsecured Notes                | 2.30                 | 8.4% = (709.100 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2031     | 609.700                      | Unsecured Notes                | 2.45                 | 7.2% = (609.700 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2032     | 710.400                      | Unsecured Notes                | 2.05                 | 8.4% = (710.400 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| 2033     | 762.000                      | Unsecured Notes                | 5.00, 5.30           | 9.0% = (762.000 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                                 |
| Thereafter | 4,992.812                  | Unsecured & Secured Notes      | 3.90, 4.15, 4.35     | 59.2% = (4,992.812 / 8,434.91) * 100 **[0000915912-24-000021_avb-20240930.htm:14]** **[0000915912-24-000021_avb-20240930.htm:46]**                              |

611cef265e3f9cb4f292f38cceb1bde00324fd361f29a6ee4e7973f3849af7ab

- **AvalonBay expects their suburban coastal business to continue outperforming in 2025** and plans to lean into external growth opportunities through development and potential increased transaction activity  **[AVB_3405815_24]** .
- **Improving bad debt levels are anticipated in 2025 in key regions like New York, New Jersey, Mid-Atlantic, Los Angeles, and Northern California**, which could enhance net operating income  **[AVB_3405815_32]** .
- **Expansion into build-to-rent communities**, leveraging existing capabilities and focusing on townhome products, represents a new growth opportunity  **[AVB_3405815_20]** .

3b82cb443d09ea1df922b28b9c255549746443b4ea6edb1c5ec52133eee8d9f2

- **Strong Demand Supported by Favorable Rent vs. Own Economics**: AVB is experiencing a unique situation where, in some markets, it is **almost twice as expensive to own versus rent**, providing a cushion that supports rental demand and serving as a **tailwind for several years**.  **[AVB_3381315_21]**
- **Improvement in Bad Debt Levels**: The company has seen **notable improvements in underlying bad debt**, particularly in the New York metro area where bad debt declined from **3.1% in Q4 to 2.4% in Q1**.  **[AVB_3381315_30]**
- **Strong Performance of Lower Price Point Assets**: AVB's **lower price point assets are performing quite well**, in some cases **better than higher price point assets**, driven by healthy demand and consumer trends.  **[AVB_3381315_33]**

0c747836c042a1a964d623096dafe42223d41d30c065efd78f9b1bba201e9029

- **Despite a negative 1.9% new rent growth in January, AvalonBay expects rents to turn positive in Q2 and Q3 of 2024 as seasonal trends improve, indicating strong demand ahead.**  **[AVB_3371724_31]**
- **Their suburban portfolio outperformed the urban portfolio by about 200 basis points in Q4, and they expect suburban markets to continue holding up better, which aligns with their strategic focus on shifting investments to suburban areas.**  **[AVB_3371724_12]**
- **AvalonBay anticipates average asking rent growth of 2.25% to 2.5% in 2024, with actual rent changes in the portfolio of approximately 2%, signaling positive revenue growth for the year.**  **[AVB_3371724_24]**

574b86bc419e3eb2c76b4b4d6ebb039727b2074cca32b1f82f76a4e5114f9a94

1. **Sunbelt Supply Impact**  
   **Q:** How long will Sunbelt rent pressures last?  
   **A:** Management expects pressure on rents and occupancy in the Sunbelt to last at least through **2025 and possibly into 2026** due to elevated supply levels and the time it takes for new projects to lease up and roll through rent rolls.  **[AVB_3381315_9]**  They highlight that **Austin** is among the markets that will be in pain longer due to a high percentage of new stock coming online.  **[AVB_3381315_10]** 

2. **Acquisition Opportunities Below Replacement Cost**  
   **Q:** How much below replacement cost are acquisitions in the Sunbelt?  
   **A:** The company is seeing assets that are **10 years old trading 15% to 20% below current replacement cost**.  **[AVB_3381315_7]**  While brand-new assets haven't come to market at compelling prices yet, they anticipate more volume becoming available and are hopeful to accelerate asset trading activity.  **[AVB_3381315_8]** 

3. **Bay Area Recovery Prospects**  
   **Q:** What's needed for Bay Area market outperformance?  
   **A:** Management states that improving the Bay Area's performance requires business leaders to be more confident in bringing people back to offices, addressing quality-of-life issues, and seeing signs of job growth, especially from sectors like **generative AI**.  **[AVB_3381315_12]**  While supply isn't a significant issue, demand needs to strengthen.

4. **Renewal Rent Growth Expectations**  
   **Q:** Can renewal rent growth exceed 4%?  
   **A:** Renewal offers for May and June are around the **high 5% range**, but they expect settlements in the **low to mid 4% range**, indicating potential for some upside but staying cautious based on historical norms.  **[AVB_3381315_15]** 

5. **Conservative Blended Rate Assumptions**  
   **Q:** Are blended rent growth assumptions too conservative?  
   **A:** With **asking rent growth at 5.5%** through the latest data, management believes blended rate assumptions of around **3.2% to 3.3%** for the second quarter are reasonable, reflecting current trends and anticipated seasonal patterns.  **[AVB_3381315_25]** 

6. **Dispositions and Asset Valuations**  
   **Q:** Do recent asset sales reflect current valuations?  
   **A:** Although none of the dispositions have closed yet, the assets sold are a mix across geographies, and the market remains bifurcated. Smaller deals attract private buyers, while larger assets garner institutional interest. Cap rates vary accordingly, and there's a scarcity premium benefiting sellers.  **[AVB_3381315_11]** 

7. **West Coast Revenue Growth Drivers**  
   **Q:** What drives high revenue expectations on the West Coast?  
   **A:** A significant contributor to revenue growth in **Southern California** is the improvement in underlying **bad debt**, accounting for roughly **40%** of revenue growth in the first quarter.  **[AVB_3381315_17]**  Reductions in concessions, especially in markets like **Seattle**, also play a role.  **[AVB_3381315_13]** 

8. **Increased CapEx Plans**  
   **Q:** What are the planned CapEx per unit investments?  
   **A:** Asset preservation CapEx is consistent at around **$1,600 to $1,700 per unit**, roughly **7% of NOI**.  **[AVB_3381315_25]**  The company plans to double its NOI-enhancing CapEx this year, investing in expanded **solar production** and **accessory dwelling units** in California.  **[AVB_3381315_25]** 

9. **Debt Maturities and Refinancing**  
   **Q:** How will you handle 2024 and 2025 debt maturities?  
   **A:** Management does not anticipate prepaying 2025 maturities and plans to address them as they come due. For 2024, they have a capital plan involving **$1.4 billion** in uses, including **$300 million** debt maturity, and expect to source capital through free cash flow, unrestricted cash, and **$850 million** of external capital.  **[AVB_3381315_34]** 

10. **Economic Environment and Outlook**  
    **Q:** Are there any concerns about market weakness?  
    **A:** While the overall demand is healthy, management notes challenges in certain submarkets due to demand or supply issues, such as **urban Seattle**, **downtown LA**, and **Washington D.C.** They also mention crosswinds like inflationary impacts on consumers and the resumption of **student loan repayments** affecting the outlook.  **[AVB_3381315_29]** 

45e5b3f44fff3e2246b0e1dd99d2cd0db2c808703b33f2012207ac06534d79ed

1. **2025 Earnings Outlook**
   **Q:** Is the strong Q4 growth a good run rate for 2025?
   **A:** Management stated that they weren't signaling anything about 2025 guidance yet, as it's too early. The sequential increase in earnings from Q3 to Q4 is primarily due to seasonal declines in operating expenses and some sequential revenue growth, not necessarily indicative of 2025 performance.  **[AVB_3396114_8]** 

2. **Bad Debt Trends**
   **Q:** What's causing the unevenness in bad debt, and will it return to normal levels?
   **A:** Bad debt is trending in the right direction, declining from **2.3%** last year to an expected **1.7%** in 2024. However, management hasn't provided a precise forecast for returning to normal levels due to underlying activities like court cases.  **[AVB_3396114_9]** 

3. **Development Pipeline Yields**
   **Q:** How do development yields compare for future projects?
   **A:** Yields vary by geography. In the Mid-Atlantic and New Jersey, yields are in the **mid- to high 6%**, even pushing **7%** on some projects. Expansion regions show yields around **6%**, while the West Coast lags due to difficulty finding projects yielding in the 6% range.  **[AVB_3396114_17]** 

4. **Acquisition Cap Rates and Volume**
   **Q:** What are the cap rates on recent acquisitions, and what's the expected acquisition volume?
   **A:** The three properties acquired recently had cap rates around **5%**. Management aims to acquire at least another **$300 million** worth of assets before year-end.  **[AVB_3396114_20]** 

5. **Regional Performance Outlook**
   **Q:** How do you expect different regions to perform in the back half of the year?
   **A:** Management expects continued outperformance in established East Coast regions compared to the Sunbelt and West Coast, except for Seattle, which has surpassed expectations.  **[AVB_3396114_14]** 

6. **Build-to-Rent Margins**
   **Q:** How do you view build-to-rent opportunities and their margins?
   **A:** The company is increasingly active in the build-to-rent space, particularly with townhomes. Operating margins for these projects are very comparable to traditional multifamily communities in the region.  **[AVB_3396114_13]** 

7. **Seasonality of Expenses**
   **Q:** Why do same-store expenses rise in Q3 and then moderate in Q4?
   **A:** There is a seasonal uptick in operating expenses in Q3 due to increases in redecorating, utilities, marketing, and non-routine expenses. In Q4, these expenses typically decline seasonally.  **[AVB_3396114_12]** 

8. **Rent Growth and Renewals**
   **Q:** Where are you setting renewal rates for upcoming months?
   **A:** For August and September, renewal offers went out in the **low 6%** range, reflecting the visibility management has at this time.  **[AVB_3396114_16]** 

9. **ESG Initiatives and Financial Impact**
   **Q:** Are solar site incomes included in the $80 million incremental NOI from operating model transformation?
   **A:** The income from solar sites is not included in the **$80 million** target. It's part of a separate NOI-enhancing pool with sustainability benefits.  **[AVB_3396114_21]** 

10. **Regulatory Risks**
    **Q:** Are there any concerns about rent control proposals affecting the business?
    **A:** Management is actively engaging with associations and political entities to address potential rent control policies, emphasizing the negative impact such measures could have on housing supply.  **[AVB_3396114_25]** 

a4261bca66ff62832dc6cdb8ce96bdc3a640673b796fec52a064ffc66f5cb1cb

- **Elevated bad debt levels in key markets like New York City, Mid-Atlantic, and Los Angeles continue to persist, running in the low 2% range, which could negatively impact the company's financial performance.**  **[AVB_3405815_32]**
- **Potential increases in property taxes due to the expiration of tax abatement programs, notably the 421-a program in New York City, may boost overall expense growth and affect profitability.**  **[AVB_3405815_18]**
- **Expansion into build-to-rent (BTR) communities involves uncertainties, as the company has dedicated resources but hasn't defined the pipeline, which could introduce execution risks in an unfamiliar market segment.**  **[AVB_3405815_20]**

8cedcfedac19296f105f55d2285439f2b8d53cdc5d064120663f633010cd657f

- The company reported **negative new rent growth of -1.9% in January**, and acknowledged that rent growth trends are **modestly below historical norms**, indicating potential weakness in demand.  **[AVB_3371724_31]** **[AVB_3371724_23]**
- Operating expenses are expected to rise due to **double-digit growth in insurance costs**, **mid-4% increase in property taxes**, and **low double-digit increase in utilities expenses**, which could pressure net operating income.  **[AVB_3371724_22]**
- The **urban portfolio was essentially flat in Q4**, and urban markets like **San Francisco** and **Seattle** are expected to **lag** due to specific market challenges, potentially impacting overall growth.  **[AVB_3371724_12]**

04fdfc522986c7f66a07c7a1036890b00475c74f3ca0eb24d07f706aebe685f2

1. **2025 Development Starts Outlook**  
   **Q:** What's in the pipeline for possible starts in '25?  
   **A:** Matt Birenbaum indicated they may increase start activity in 2025 to around **$1.5 billion** from **$1.05 billion** this year.  **[AVB_3405815_8]**  They plan to leverage their balance sheet and capabilities to capture a greater share of fewer starts. The pipeline includes projects across established and expansion regions, focusing on lower-density garden-style developments where economics are more favorable now.  **[AVB_3405815_8]** 

2. **Expense Growth and Insurance Costs**  
   **Q:** Will expense growth be higher or lower in '25 vs. '24?  
   **A:** Kevin O'Shea expects overall insurance costs to stabilize, projecting **mid- to high single-digit** increases in 2025, closer to normal levels.  **[AVB_3405815_9]**  Sean Breslin added that they expect operating expense growth rates to **ease in 2025** compared to 2024, as impacts from the 421-a tax program and AvalonConnect deployment diminish, reducing their contributions to expense growth.  **[AVB_3405815_9]** 

3. **Supply Outlook**  
   **Q:** Where do you see delivery percentages over the next years?  
   **A:** Sean Breslin stated they're expecting a reduction in deliveries in their established coastal regions in 2025, except for a slight uptick in New York City.  **[AVB_3405815_6]**  Challenging development conditions, including higher construction and capital costs and decreased starts, suggest deliveries in coastal regions will continue to trend down over the next few years.  **[AVB_3405815_6]** 

4. **Lease Growth Outlook**  
   **Q:** Can lease growth reaccelerate in November and December?  
   **A:** Sean Breslin said that current asking rents are about **3% higher** than last year.  **[AVB_3405815_10]**  October blended rent change was **1.2%**, expected to increase to the **high 1%** range in November and **mid-2%** in December.  **[AVB_3405815_10]**  Improvement is anticipated mainly from new move-ins, supported by easier comps and higher asking rents.  **[AVB_3405815_10]** 

5. **Bad Debt Normalization Timeline**  
   **Q:** When will bad debt return to pre-COVID levels?  
   **A:** Sean Breslin expects that by the end of 2025, they will be making good progress but likely won't reach fully normalized bad debt levels until **2026**.  **[AVB_3405815_11]**  This is based on the volume of skips and evictions, with over **300 evictions** in Q3 and about **1,300 accounts** still needing to be processed.  **[AVB_3405815_11]** 

6. **Development Yields in Sunbelt Projects**  
   **Q:** What's the yield on the 4 Sunbelt projects started?  
   **A:** The 4 deals in expansion regions underwrite to around a **6%** yield on today's rents, on the lower end of their range but well above their cost of capital.  **[AVB_3405815_7]**  The Austin project, their first investment there, benefits from hard costs down **double digits** compared to 18 months ago, with lease-up expected in 2026 and little new competition anticipated.  **[AVB_3405815_7]** 

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- **Elevated Bad Debt Levels Due to Slow Legal Processes in Key Markets**: AvalonBay is experiencing higher bad debt levels, particularly in the **New York/New Jersey region**, which represents **only 23% of outstanding accounts but about one-third of outstanding receivables**. The slow pace of the courts is delaying eviction processes, negatively impacting cash flows.  **[AVB_3396114_23]**
- **Expected Increase in Same-Store Operating Expenses**: The company anticipates a **6% rise in same-store operating expenses in the third quarter**, driven by seasonal upticks in redecorating, utilities, marketing expenses, and timing-related non-routine expenses. This could pressure margins and profitability.  **[AVB_3396114_12]**
- **Competitive Pressure in Expansion Markets Due to Oversupply**: In certain expansion markets like **Austin and Charlotte**, there is **hyper supply** leading to significant concessions of **2 to 3 months free rent**. This intense competition may affect AvalonBay's returns in these markets.  **[AVB_3396114_26]**

c6e592ae8883af8f816dfe7b2c7c303cc2d52a2ea8b4230de607babc0b31979f

- **Urban submarkets are experiencing softness due to high supply and demand issues**, particularly in the **District of Columbia**, **urban Seattle**, and **downtown L.A.**, leading to **choppy performance in these areas**. As per the executive: "The District of Columbia is quite soft for both demand and supply reasons... some of these urban submarkets with plentiful supply, some still quality of life conditions that are challenging as a little more choppy."  **[AVB_3381315_29]**
- **Inflationary impacts on consumers' wallets**, including **student loans** and **car loans**, are creating **crosswinds** that may pressure demand, especially for higher-priced assets. Executives acknowledged that "consumers are feeling a little bit of pinch from what's happened with inflation, student loans, car leases expire, etc."  **[AVB_3381315_33]** **[AVB_3381315_29]**
- **AVB plans to increase its allocation to expansion markets, including the Sunbelt, from **8% today to 25%**, but **elevated supply in those markets is expected to pressure rents and occupancy at least through 2025 and possibly into 2026**, potentially impacting their performance. The executive stated, "we expect there to continue to be pressure" in the Sunbelt due to high supply in certain submarkets.  **[AVB_3381315_2]** **[AVB_3381315_9]**

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- AvalonBay Communities is achieving **higher yields on new development projects**, with 2024 starts underwriting to yields of **6.4%**, benefiting from **lower land costs** reflective of the current market, which should enhance future profitability.  **[AVB_3396114_18]**
- The company is **actively recycling capital**, selling assets at cap rates of around **5.1%** and acquiring assets at slightly lower cap rates of **5%**, with plans to **increase acquisition volume by at least $300 million**, indicating strategic growth and better investment opportunities.  **[AVB_3396114_19]**
- AvalonBay is **investing in sustainable initiatives** like **solar projects** that contribute to NOI growth and have additional benefits beyond their **$80 million operating model transformation target**, indicating more avenues for revenue enhancement.  **[AVB_3396114_20]**

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AvalonBay Communities Inc (AVB)

Financials