AvalonBay Communities, Inc. Provides Third Quarter 2021 Operating and Acquisition Activity Update
September 23 2021 - 4:15PM
Business Wire
AVALONBAY COMMUNITIES, INC. (NYSE: AVB) (the “Company”)
announced today that for the three months ending September 30, 2021
it expects total residential rental revenue for Same Store
communities to increase between 0.9% and 1.1% over the prior year
period. The midpoint of this range is 180 basis points above what
the Company’s expectation was for total residential rental revenue
change for Same Store communities for the three months ending
September 30, 2021 when the Company published its outlook on July
28, 2021. This outperformance is attributable to (i)
lower-than-expected uncollectible lease revenue, due to
higher-than-expected delinquent rent payments from COVID rental
assistance programs(1), and (ii) better-than-expected effective
lease rates and occupancy.
The Company also provided the following residential operating
information for Same Store communities:
Average Physical
Occupancy
2021
Q1
Q2
July
August
September(2)
Suburban Communities
95.6%
96.3%
96.4%
96.5%
96.3%
Urban Communities
93.6%
94.8%
94.8%
95.9%
96.1%
Total
95.0%
95.9%
96.0%
96.3%
96.3%
Average Like-Term Effective
Rent Change
2021
Q1
Q2
July
August
September(2)
New England
(10.4%)
(1.8%)
5.8%
10.0%
12.8%
Metro New York / New Jersey
(7.8%)
(1.6%)
4.0%
8.1%
11.4%
Mid-Atlantic
(8.0%)
(2.2%)
2.3%
4.2%
8.1%
Southeast Florida
1.0%
7.3%
16.2%
19.3%
23.8%
Denver
5.2%
9.7%
12.1%
13.2%
16.4%
Pacific Northwest
(11.7%)
(0.5%)
6.8%
8.8%
14.5%
Northern California
(15.7%)
(7.5%)
2.1%
5.2%
6.4%
Southern California
(1.4%)
3.6%
8.6%
11.0%
12.8%
Total
(8.3%)
(1.3%)
5.0%
8.1%
11.0%
Suburban Communities
(3.8%)
2.3%
6.7%
8.7%
10.4%
Urban Communities
(17.4%)
(8.3%)
1.7%
7.1%
12.3%
Total
(8.3%)
(1.3%)
5.0%
8.1%
11.0%
The average Move-in Rent Value in September 2021, as of
September 22, 2021, was approximately 24% above the average Move-in
Rent Value for the month of December 2020, and it was approximately
6% above the average Move-in Rent Value for the month of September
2019.
(1)
Between July 1st, 2021 and
September 22nd, 2021, the Company recognized approximately $10
million of delinquent rent payments from COVID rental assistance
programs as Same Store total residential rental revenue. This
compares to the Company’s July 28, 2021 outlook for projected Same
Store total residential rental revenue for the three months ending
September 30, 2021, which included approximately $3 million of
projected delinquent rent payments from COVID rental assistance
programs.
(2)
Data through September 22nd.
In addition, the Company announced that it acquired:
- The Nexus Lakeside, located in Flower Mound, Texas, on
September 1, 2021 for a purchase price of approximately $117
million. The Nexus Lakeside contains 425 apartment homes and
approximately 18,000 square feet of commercial space.
- Hub South End, located in Charlotte, North Carolina, on
September 23, 2021 for a purchase price of approximately $104
million. Hub South End contains 265 apartment homes and
approximately 21,000 square feet of commercial space.
- Three30Five, located in Charlotte, North Carolina, on September
23, 2021 for a purchase price of approximately $53 million.
Three30Five contains 164 apartment homes.
Definitions
Like-Term Effective Rent Change
represents the percentage change in effective rent between two
leases of the same lease term category for the same apartment. The
Company defines effective rent as the contractual rent for an
apartment less amortized concessions and discounts. Average
Like-Term Effective Rent Change is weighted based on the number of
leases meeting the criteria for new move-in and renewal like-term
effective rent change. New Move-In Like-Term Effective Rent Change
is the change in effective rent between the contractual rent for a
resident who moves out of an apartment, and the contractual rent
for a resident who moves into the same apartment with the same
lease term category. Renewal Like-Term Effective Rent Change is the
change in effective rent between two consecutive leases of the same
lease term category for the same resident occupying the same
apartment.
Move-in Rent Value reflects the
average effective rent that the Company’s apartments would rent for
based on recent leasing activity, adjusting for apartment specific
characteristics (e.g., view premiums, renovation premiums). For a
given month, up to the ten most recent leases during the
immediately preceding last three months are used for each unit type
at a property. If no recent leasing activity has occurred for a
sparse unit type, then active leases or current asking rents, in
that order, would be used.
Same Store is composed of
consolidated communities in the markets where the Company has a
significant presence and 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 2021 operating results, Same Store is composed of
consolidated communities that have Stabilized Operations as of
January 1, 2020, are not conducting or are not probable to conduct
substantial redevelopment activities and are not held for sale or
probable for disposition within the current year.
Stabilized Operations is defined as
the earlier of (i) the attainment of 90% physical occupancy or (ii)
the one-year anniversary of completion of development or
redevelopment.
Suburban Communities are
communities located in submarkets with less than 3,500 households
per square mile.
Urban Communities are communities
located in submarkets with 3,500 households or more per square
mile.
Forward-Looking Statements
The projected change in total residential rental revenue for
Same Store communities in this press release is a forward-looking
statement under federal securities laws and is based on the
Company’s expectations, forecasts, and assumptions at the time of
this press release. The actual change, if any, may differ
materially from the projected change. Factors that could result in
a material difference include, among others, those related to the
COVID-19 pandemic and trends affecting the Company’s financial
condition or results of operations. These factors should not be
construed as exhaustive and should be read in conjunction with the
factors that are discussed in the Company’s filings with the
Securities and Exchange Commission, including the sections titled
“Forward-Looking Statements” and “Risk Factors” in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2020, as such factors may be updated from time to time in the
Company’s periodic filings with the Securities and Exchange
Commission.
The Company does not undertake a duty to update forward-looking
statements, including its expected operating results and other
financial data forecasts contained in this press 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 press release.
About AvalonBay Communities, Inc.
As of June 30, 2021, the Company owned or held a direct or
indirect ownership interest in 288 apartment communities containing
85,749 apartment homes in 11 states and the District of Columbia,
of which 16 communities were under development and two communities
were under redevelopment. The Company is an equity REIT in the
business of developing, redeveloping, acquiring, and managing
apartment communities in leading metropolitan areas in New England,
the New York/New Jersey Metro area, the Mid-Atlantic, Southeast
Florida, Denver, Colorado, the Pacific Northwest, and Northern and
Southern California. More information may be found on the Company’s
website at http://www.avalonbay.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20210923005899/en/
Jason Reilley Vice President Investor Relations AvalonBay
Communities, Inc. 703-317-4681
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