Maryland
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77-0404318
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer (Do not check if a smaller reporting company)
o
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Smaller reporting company
o
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Emerging growth company
o
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PAGE
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PART I - FINANCIAL INFORMATION
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ITEM 1.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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6/30/2017
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12/31/2016
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(unaudited)
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ASSETS
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Real estate:
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Land and improvements
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$
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3,990,033
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$
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3,941,250
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Buildings and improvements
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14,719,690
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14,314,981
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Furniture, fixtures and equipment
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556,690
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532,994
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19,266,413
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18,789,225
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Less accumulated depreciation
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(3,969,049
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)
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(3,743,632
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)
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Net operating real estate
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15,297,364
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15,045,593
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Construction in progress, including land
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1,736,367
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1,882,262
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Land held for development
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86,016
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84,293
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Real estate assets held for sale, net
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15,271
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20,846
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Total real estate, net
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17,135,018
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17,032,994
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Cash and cash equivalents
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53,477
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214,994
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Cash in escrow
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239,676
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114,983
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Resident security deposits
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33,654
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32,071
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Investments in unconsolidated real estate entities
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169,854
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175,116
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Deferred development costs
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45,157
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40,179
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Prepaid expenses and other assets
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266,909
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256,934
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Total assets
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$
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17,943,745
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$
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17,867,271
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LIABILITIES AND EQUITY
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Unsecured notes, net
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$
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5,405,897
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$
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4,463,302
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Variable rate unsecured credit facility
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105,000
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—
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Mortgage notes payable, net
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1,480,862
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2,567,578
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Dividends payable
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196,079
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185,397
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Payables for construction
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94,535
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100,998
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Accrued expenses and other liabilities
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275,940
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274,676
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Accrued interest payable
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34,880
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38,307
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Resident security deposits
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59,176
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57,023
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Liabilities related to real estate assets held for sale
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122
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808
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Total liabilities
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7,652,491
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7,688,089
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Commitments and contingencies
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Redeemable noncontrolling interests
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8,842
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7,766
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Equity:
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Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at June 30, 2017 and December 31, 2016; zero shares issued and outstanding at June 30, 2017 and December 31, 2016
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—
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—
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Common stock, $0.01 par value; 280,000,000 shares authorized at June 30, 2017 and December 31, 2016; 138,083,281 and 137,330,904 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
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1,381
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1,373
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Additional paid-in capital
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10,221,474
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10,105,654
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Accumulated earnings less dividends
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102,546
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94,899
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Accumulated other comprehensive loss
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(42,989
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)
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(30,510
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)
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Total equity
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10,282,412
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10,171,416
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Total liabilities and equity
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$
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17,943,745
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$
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17,867,271
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For the three months ended
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For the six months ended
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6/30/2017
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6/30/2016
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6/30/2017
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6/30/2016
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Revenue:
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Rental and other income
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$
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529,414
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$
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500,840
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$
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1,050,539
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$
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1,007,814
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Management, development and other fees
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1,098
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1,467
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2,298
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2,990
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Total revenue
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530,512
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502,307
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1,052,837
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1,010,804
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Expenses:
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Operating expenses, excluding property taxes
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126,687
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118,903
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249,730
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235,530
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Property taxes
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53,566
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51,107
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106,497
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101,174
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Interest expense, net
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50,102
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46,581
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99,397
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89,991
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Loss on extinguishment of debt, net
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24,162
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2,461
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24,162
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2,461
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Depreciation expense
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141,439
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132,469
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282,060
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259,685
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General and administrative expense
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13,947
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12,011
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27,153
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23,414
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Expensed acquisition, development and other pursuit costs, net of recoveries
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570
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1,436
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1,298
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4,897
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Casualty and impairment (gain) loss, net
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—
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(1,732
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)
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11,688
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(3,935
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)
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Total expenses
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410,473
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363,236
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801,985
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713,217
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Income before equity in income of unconsolidated real estate entities, gain on sale of communities and other real estate, and income taxes
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120,039
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139,071
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250,852
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297,587
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Equity in income of unconsolidated real estate entities
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1,146
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27,151
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17,819
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55,120
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Gain on sale of communities
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44,067
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30,990
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132,016
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82,420
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Gain on sale of other real estate
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—
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143
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366
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143
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Income before income taxes
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165,252
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197,355
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401,053
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435,270
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Income tax expense
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58
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36
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78
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73
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Net income
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165,194
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197,319
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400,975
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435,197
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Net loss attributable to noncontrolling interests
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31
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125
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125
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180
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Net income attributable to common stockholders
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$
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165,225
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$
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197,444
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$
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401,100
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$
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435,377
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Other comprehensive loss:
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Loss on cash flow hedges
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(16,158
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)
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(26,788
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)
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(16,013
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)
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(74,545
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)
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Cash flow hedge losses reclassified to earnings
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1,781
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1,561
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3,534
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2,935
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Comprehensive income
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$
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150,848
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$
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172,217
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$
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388,621
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$
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363,767
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Earnings per common share - basic:
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Net income attributable to common stockholders
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$
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1.20
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$
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1.44
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$
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2.91
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$
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3.17
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Earnings per common share - diluted:
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Net income attributable to common stockholders
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$
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1.20
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$
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1.44
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$
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2.91
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$
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3.17
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Dividends per common share
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$
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1.42
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$
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1.35
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$
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2.84
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$
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2.70
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For the six months ended
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6/30/2017
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6/30/2016
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Cash flows from operating activities:
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Net income
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$
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400,975
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$
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435,197
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Adjustments to reconcile net income to cash provided by operating activities:
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||||
Depreciation expense
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282,060
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259,685
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Amortization of deferred financing costs
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3,873
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3,827
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Amortization of debt premium
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(6,454
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)
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(9,436
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)
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Loss on extinguishment of debt, net
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24,162
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2,461
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Amortization of stock-based compensation
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9,658
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8,482
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Equity in (income) loss of, and return on, unconsolidated real estate entities and noncontrolling interests, net of eliminations
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(4,473
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)
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7,255
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Casualty and impairment loss (gain), net
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11,688
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(3,935
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)
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Abandonment of development pursuits
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388
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|
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—
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Cash flow hedge losses reclassified to earnings
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3,534
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2,935
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Gain on sale of real estate assets
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(141,079
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)
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(135,735
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)
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Increase in cash in operating escrows
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(13,296
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)
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(2,221
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)
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Increase in resident security deposits, prepaid expenses and other assets
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(13,174
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)
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(9,936
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)
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Increase (decrease) in accrued expenses, other liabilities and accrued interest payable
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4,498
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(5,401
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)
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Net cash provided by operating activities
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562,360
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553,178
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Cash flows from investing activities:
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Development/redevelopment of real estate assets including land acquisitions and deferred development costs
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(495,868
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)
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(587,287
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)
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Acquisition of real estate assets, including partnership interest
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—
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(170,022
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)
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Capital expenditures - existing real estate assets
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(22,415
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)
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(24,696
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)
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Capital expenditures - non-real estate assets
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(6,334
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)
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(3,919
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)
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Proceeds from sale of real estate, net of selling costs
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270,481
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116,941
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Increase in cash in deposit escrows
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(112,890
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)
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—
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Insurance proceeds for property damage claims
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6,192
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17,196
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Mortgage note receivable lending
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(11,069
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)
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—
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(Decrease) increase in payables for construction
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(6,463
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)
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2,074
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Distributions from unconsolidated real estate entities
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21,852
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58,870
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Investments in unconsolidated real estate entities
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(10,100
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)
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(121,648
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)
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Net cash used in investing activities
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(366,614
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)
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(712,491
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)
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Cash flows from financing activities:
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Issuance of common stock, net
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110,033
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12,804
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Dividends paid
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(380,723
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)
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(356,235
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)
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Net borrowings under unsecured credit facility
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105,000
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—
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Issuance of mortgage notes payable
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185,100
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—
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Repayments of mortgage notes payable, including prepayment penalties
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(1,285,555
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)
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(157,552
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)
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Issuance of unsecured notes
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948,616
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474,838
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Payment of deferred financing costs
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(11,466
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)
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(10,014
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)
|
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Payment of capital lease obligation
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(18,422
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)
|
|
—
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Receipts (payments) for termination of forward interest rate swaps
|
391
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|
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(14,847
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)
|
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Payments related to tax withholding for share-based compensation
|
(10,441
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)
|
|
(7,659
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)
|
||
Distributions to DownREIT partnership unitholders
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(21
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)
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(20
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)
|
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Contributions from joint venture and profit-sharing partners
|
1,038
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|
|
—
|
|
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Distributions to joint venture and profit-sharing partners
|
(213
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)
|
|
(203
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)
|
||
Preferred interest obligation redemption and dividends
|
(600
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(357,263
|
)
|
|
(58,888
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(161,517
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)
|
|
(218,201
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)
|
||
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
214,994
|
|
|
400,507
|
|
||
Cash and cash equivalents, end of period
|
$
|
53,477
|
|
|
$
|
182,306
|
|
|
|
|
|
||||
Cash paid during the period for interest, net of amount capitalized
|
$
|
102,624
|
|
|
$
|
90,355
|
|
•
|
As described in Note 4, "Equity,"
201,314
shares of common stock were issued as part of the Company's stock-based compensation plans, of which
128,482
shares related to the conversion of performance awards to restricted shares, and the remaining
72,832
shares valued at
$13,079,000
were issued in connection with new stock grants;
1,828
shares valued at
$331,000
were issued through the Company's dividend reinvestment plan;
59,019
shares valued at
$10,496,000
were withheld to satisfy employees' tax withholding and other liabilities; and
2,211
restricted shares with an aggregate value of
$381,000
previously issued in connection with employee compensation were canceled upon forfeiture.
|
•
|
Common stock dividends declared but not paid totaled
$196,079,000
.
|
•
|
The Company recorded an increase of
$397,000
in redeemable noncontrolling interest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units. For further discussion of the nature and valuation of these items, see Note 10, "Fair Value."
|
•
|
The Company recorded an increase in prepaid expenses and other assets of
$674,000
and an increase in accrued expenses and other liabilities of
$1,612,000
, and a corresponding adjustment to other comprehensive income, and reclassified
$3,534,000
of cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.
|
•
|
As discussed in Note 5, "Investments in Real Estate Entities," the Company recognized a charge of
$16,361,000
to write-off the net book value of the fixed assets destroyed by the fire that occurred in February 2017 at the Company's Avalon Maplewood Development Community ("Maplewood"), and a receivable for the remaining
$10,951,000
of expected property damage insurance proceeds for the Maplewood casualty loss not received during the
six months ended June 30, 2017
.
|
•
|
The Company issued
196,059
shares of common stock as part of the Company's stock-based compensation plans, of which
115,618
shares related to the conversion of performance awards to restricted shares, and the remaining
80,441
shares valued at
$13,049,000
were issued in connection with new stock grants;
44,327
shares valued at
$3,894,000
were issued in conjunction with the conversion of deferred stock awards;
1,041
shares valued at
$186,000
were issued through the Company's dividend reinvestment plan;
53,011
shares valued at
$8,280,000
were withheld to satisfy employees' tax withholding and other liabilities; and
2,243
restricted shares with an aggregate value of
$360,000
previously issued in connection with employee compensation were canceled upon forfeiture.
|
•
|
Common stock dividends declared but not paid totaled
$185,369,000
.
|
•
|
The Company recorded an increase of
$375,000
in redeemable noncontrolling interest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.
|
•
|
The Company recorded a decrease in prepaid expenses and other assets of
$2,689,000
and an increase in accrued expenses and other liabilities of
$54,311,000
, and a corresponding loss to other comprehensive income of
$57,000,000
, and reclassified
$2,935,000
of cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.
|
•
|
The Company assumed fixed rate indebtedness with a principal amount of
$67,904,000
in conjunction with the acquisition of Avalon Hoboken.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
Basic and diluted shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares - basic
|
137,580,677
|
|
|
136,918,770
|
|
|
137,326,204
|
|
|
136,852,323
|
|
||||
Weighted average DownREIT units outstanding
|
7,500
|
|
|
7,500
|
|
|
7,500
|
|
|
7,500
|
|
||||
Effect of dilutive securities
|
584,974
|
|
|
511,463
|
|
|
519,921
|
|
|
550,564
|
|
||||
Weighted average common shares - diluted
|
138,173,151
|
|
|
137,437,733
|
|
|
137,853,625
|
|
|
137,410,387
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Calculation of Earnings per Share - basic
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to common stockholders
|
$
|
165,225
|
|
|
$
|
197,444
|
|
|
$
|
401,100
|
|
|
$
|
435,377
|
|
Net income allocated to unvested restricted shares
|
(468
|
)
|
|
(516
|
)
|
|
(1,122
|
)
|
|
(1,147
|
)
|
||||
Net income attributable to common stockholders, adjusted
|
$
|
164,757
|
|
|
$
|
196,928
|
|
|
$
|
399,978
|
|
|
$
|
434,230
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic
|
137,580,677
|
|
|
136,918,770
|
|
|
137,326,204
|
|
|
136,852,323
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share - basic
|
$
|
1.20
|
|
|
$
|
1.44
|
|
|
$
|
2.91
|
|
|
$
|
3.17
|
|
|
|
|
|
|
|
|
|
||||||||
Calculation of Earnings per Share - diluted
|
|
|
|
|
|
|
|
|
|
||||||
Net income attributable to common stockholders
|
$
|
165,225
|
|
|
$
|
197,444
|
|
|
$
|
401,100
|
|
|
$
|
435,377
|
|
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships
|
10
|
|
|
10
|
|
|
21
|
|
|
20
|
|
||||
Adjusted net income attributable to common stockholders
|
$
|
165,235
|
|
|
$
|
197,454
|
|
|
$
|
401,121
|
|
|
$
|
435,397
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares - diluted
|
138,173,151
|
|
|
137,437,733
|
|
|
137,853,625
|
|
|
137,410,387
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share - diluted
|
$
|
1.20
|
|
|
$
|
1.44
|
|
|
$
|
2.91
|
|
|
$
|
3.17
|
|
|
6/30/2017
|
|
12/31/2016
|
||||
|
|
|
|
||||
Fixed rate unsecured notes (1)
|
$
|
4,900,000
|
|
|
$
|
4,200,000
|
|
Term Loans (1)
|
550,000
|
|
|
300,000
|
|
||
Fixed rate mortgage notes payable - conventional and tax-exempt (2)
|
618,809
|
|
|
1,668,496
|
|
||
Variable rate mortgage notes payable - conventional and tax-exempt (2)
|
889,683
|
|
|
908,262
|
|
||
Total mortgage notes payable, unsecured notes and Term Loans
|
6,958,492
|
|
|
7,076,758
|
|
||
Credit Facility
|
105,000
|
|
|
—
|
|
||
Total mortgage notes payable, unsecured notes, Term Loans and Credit Facility
|
$
|
7,063,492
|
|
|
$
|
7,076,758
|
|
(1)
|
Balances at
June 30, 2017
and
December 31, 2016
exclude
$9,716
and
$8,930
, respectively, of debt discount, and
$34,387
and
$27,768
, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Condensed Consolidated Balance Sheets.
|
(2)
|
Balances at
June 30, 2017
and
December 31, 2016
exclude
$16,156
of debt discount and
$1,866
of debt premium, respectively, and
$11,474
and
$11,046
, respectively, of deferred financing costs, as reflected in mortgage notes payable on the accompanying Condensed Consolidated Balance Sheets.
|
•
|
In February 2017, the Company repaid
$17,300,000
of variable rate debt secured by Avalon Mountain View at par at its scheduled maturity date.
|
•
|
In February 2017, the Company entered into a
$250,000,000
variable rate unsecured term loan (the "
$250 million
Term Loan"), of which
$100,000,000
matures in
February 2022
with stated pricing of
LIBOR
plus
0.90%
, and
$150,000,000
matures in
February 2024
with stated pricing of
LIBOR
plus
1.50%
. In April 2017, the Company borrowed the
$250,000,000
available under the
$250 million
Term Loan.
|
•
|
In May 2017, the Company repaid
$670,590,000
aggregate principal amount of
6.26%
fixed rate secured notes secured by
11
communities, representing the majority of the Fannie Mae pool 2 secured indebtedness assumed as part of the Archstone acquisition, which had a contractual maturity date of
November 2017
but opened for prepayment at par on April 30, 2017. In conjunction with the repayment, the Company recognized a gain of
$10,839,000
, primarily composed of the write-off of unamortized premium. The Company refinanced the secured borrowings for
three
of these communities for an aggregate principal amount of
$185,100,000
, with a contractual fixed interest rate of
3.61%
and maturity dates of
June 2027
.
|
•
|
In May 2017, the Company issued
$400,000,000
principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately
$396,016,000
. The notes mature in
May 2027
and were issued at a
3.35%
interest rate.
|
•
|
In June 2017, the Company issued
$300,000,000
principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately
$297,372,000
. The notes mature in
July 2047
and were issued at a
4.15%
interest rate.
|
•
|
In June 2017, the Company repaid
$556,313,000
aggregate principal amount of
5.86%
fixed rate secured notes secured by
12
wholly-owned operating communities, representing the remaining debt in the Company's Freddie Mac cross-collateralized pool financing originated in 2009, in advance of their
May 2019
maturity date. In conjunction with the repayment, the Company recognized a charge of
$34,965,000
, consisting of prepayment penalties of
$33,515,000
and the non-cash write-off of deferred financing costs of
$1,450,000
.
|
Year
|
|
Secured notes payments
|
|
Secured notes maturities
|
|
Unsecured notes maturities
|
|
Stated interest rate of unsecured notes
|
|||||||
2017
|
|
4,409
|
|
|
21,601
|
|
|
—
|
|
|
N/A
|
|
|||
2018
|
|
7,258
|
|
|
76,667
|
|
|
—
|
|
|
N/A
|
|
|||
2019
|
|
4,696
|
|
|
114,723
|
|
|
—
|
|
|
N/A
|
|
|||
2020
|
|
3,624
|
|
|
118,729
|
|
|
250,000
|
|
|
6.100
|
%
|
|||
|
|
|
|
|
|
|
|
400,000
|
|
|
3.625
|
%
|
|||
2021
|
|
3,551
|
|
|
27,844
|
|
|
250,000
|
|
|
3.950
|
%
|
|||
|
|
|
|
|
|
|
|
300,000
|
|
|
LIBOR + 1.450%
|
|
|||
2022
|
|
3,795
|
|
|
—
|
|
|
450,000
|
|
|
2.950
|
%
|
|||
|
|
|
|
|
|
100,000
|
|
|
LIBOR + .90%
|
|
|||||
2023
|
|
4,040
|
|
|
—
|
|
|
350,000
|
|
|
4.200
|
%
|
|||
|
|
|
|
|
|
|
|
250,000
|
|
|
2.850
|
%
|
|||
2024
|
|
4,310
|
|
|
—
|
|
|
300,000
|
|
|
3.500
|
%
|
|||
|
|
|
|
|
|
150,000
|
|
|
LIBOR + 1.50%
|
|
|||||
2025
|
|
4,585
|
|
|
84,835
|
|
|
525,000
|
|
|
3.450
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
3.500
|
%
|
|||||
2026
|
|
4,894
|
|
|
—
|
|
|
475,000
|
|
|
2.950
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
2.900
|
%
|
|||||
Thereafter
|
|
213,751
|
|
|
805,180
|
|
|
350,000
|
|
|
3.900
|
%
|
|||
|
|
|
|
|
|
400,000
|
|
|
3.350
|
%
|
|||||
|
|
|
|
|
|
300,000
|
|
|
4.150
|
%
|
|||||
|
|
$
|
258,913
|
|
|
$
|
1,249,579
|
|
|
$
|
5,450,000
|
|
|
|
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
earnings
less
dividends
|
|
Accumulated
other
comprehensive
loss
|
|
Total
equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
$
|
1,373
|
|
|
$
|
10,105,654
|
|
|
$
|
94,899
|
|
|
$
|
(30,510
|
)
|
|
$
|
10,171,416
|
|
Net income attributable to common stockholders
|
—
|
|
|
—
|
|
|
401,100
|
|
|
—
|
|
|
401,100
|
|
|||||
Loss on cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,013
|
)
|
|
(16,013
|
)
|
|||||
Cash flow hedge loss reclassified to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
3,534
|
|
|
3,534
|
|
|||||
Change in redemption value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(397
|
)
|
|
—
|
|
|
(397
|
)
|
|||||
Dividends declared to common stockholders
|
—
|
|
|
—
|
|
|
(391,735
|
)
|
|
—
|
|
|
(391,735
|
)
|
|||||
Issuance of common stock, net of withholdings
|
8
|
|
|
100,652
|
|
|
(1,321
|
)
|
|
—
|
|
|
99,339
|
|
|||||
Amortization of deferred compensation
|
—
|
|
|
15,168
|
|
|
—
|
|
|
—
|
|
|
15,168
|
|
|||||
Balance at June 30, 2017
|
$
|
1,381
|
|
|
$
|
10,221,474
|
|
|
$
|
102,546
|
|
|
$
|
(42,989
|
)
|
|
$
|
10,282,412
|
|
i.
|
issued
36,169
shares of common stock in connection with stock options exercised;
|
ii.
|
issued
1,828
common shares through the Company's dividend reinvestment plan;
|
iii.
|
issued
201,314
common shares in connection with restricted stock grants and the conversion of performance awards to restricted shares;
|
iv.
|
issued
568,424
shares under CEP IV as discussed below;
|
v.
|
withheld
59,019
common shares to satisfy employees' tax withholding and other liabilities;
|
vi.
|
issued
5,872
common shares through the Employee Stock Purchase Plan; and
|
vii.
|
canceled
2,211
common shares of restricted stock upon forfeiture.
|
|
6/30/2017
|
|
12/31/2016
|
||||
|
(unaudited)
|
|
(unaudited)
|
||||
Assets:
|
|
|
|
|
|
||
Real estate, net
|
$
|
856,588
|
|
|
$
|
954,493
|
|
Other assets
|
48,248
|
|
|
49,519
|
|
||
Total assets
|
$
|
904,836
|
|
|
$
|
1,004,012
|
|
|
|
|
|
||||
Liabilities and partners' capital:
|
|
|
|
|
|
||
Mortgage notes payable, net and credit facility
|
$
|
623,708
|
|
|
$
|
689,573
|
|
Other liabilities
|
14,230
|
|
|
16,537
|
|
||
Partners' capital
|
266,898
|
|
|
297,902
|
|
||
Total liabilities and partners' capital
|
$
|
904,836
|
|
|
$
|
1,004,012
|
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
|
(unaudited)
|
|
(unaudited)
|
||||||||||||
Rental and other income
|
$
|
26,789
|
|
|
$
|
33,808
|
|
|
$
|
55,432
|
|
|
$
|
70,763
|
|
Operating and other expenses
|
(9,914
|
)
|
|
(12,967
|
)
|
|
(21,009
|
)
|
|
(27,137
|
)
|
||||
Gain on sale of communities
|
—
|
|
|
76,934
|
|
|
29,447
|
|
|
180,256
|
|
||||
Interest expense, net (1)
|
(6,600
|
)
|
|
(9,938
|
)
|
|
(13,548
|
)
|
|
(29,938
|
)
|
||||
Depreciation expense
|
(6,795
|
)
|
|
(8,707
|
)
|
|
(14,122
|
)
|
|
(17,947
|
)
|
||||
Net income
|
$
|
3,480
|
|
|
$
|
79,130
|
|
|
$
|
36,200
|
|
|
$
|
175,997
|
|
(1)
|
Amounts for the
three and six
months ended
June 30, 2016
include charges for prepayment penalties and write-offs of deferred financing costs of
$1,480
and
$12,321
, respectively.
|
•
|
In January 2017, the Company sold
two
undeveloped land parcels, located in Newcastle, WA, that are adjacent to
one
of the Company's Development Communities, and 421-a tax certificates, representing the right to qualify for certain property tax exemptions in New York City, for an aggregate sales price of
$22,286,000
. The Company's gain in accordance with GAAP on the dispositions was
$366,000
, reported in gain on sale of other real estate on the accompanying Condensed Consolidated Statements of Comprehensive Income.
|
•
|
In March 2017, the Company sold Avalon Pines, located in Coram, NY, containing
450
homes, and the adjacent golf course for
$140,000,000
. The Company's gain in accordance with GAAP on the disposition was
$87,949,000
, reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income. The sale of Avalon Pines is expected to be part of a tax deferred exchange under which the Company has restricted the cash proceeds in an escrow account, classified as cash in escrow on the accompanying Condensed Consolidated Balance Sheet.
|
•
|
In June 2017, the Company sold AVA University District, located in Seattle, WA, containing
283
homes, for
$112,500,000
. The Company's gain in accordance with GAAP on the disposition was
$42,596,000
, reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
Net income
|
$
|
165,194
|
|
|
$
|
197,319
|
|
|
$
|
400,975
|
|
|
$
|
435,197
|
|
Indirect operating expenses, net of corporate income
|
16,423
|
|
|
15,477
|
|
|
32,720
|
|
|
32,015
|
|
||||
Investments and investment management expense
|
1,455
|
|
|
1,194
|
|
|
2,776
|
|
|
2,340
|
|
||||
Expensed acquisition, development and other pursuit costs, net of recoveries
|
570
|
|
|
1,436
|
|
|
1,298
|
|
|
4,897
|
|
||||
Interest expense, net
|
50,102
|
|
|
46,581
|
|
|
99,397
|
|
|
89,991
|
|
||||
Loss on extinguishment of debt, net
|
24,162
|
|
|
2,461
|
|
|
24,162
|
|
|
2,461
|
|
||||
General and administrative expense
|
13,947
|
|
|
12,011
|
|
|
27,153
|
|
|
23,414
|
|
||||
Equity in income of unconsolidated real estate entities
|
(1,146
|
)
|
|
(27,151
|
)
|
|
(17,819
|
)
|
|
(55,120
|
)
|
||||
Depreciation expense
|
141,439
|
|
|
132,469
|
|
|
282,060
|
|
|
259,685
|
|
||||
Income tax expense
|
58
|
|
|
36
|
|
|
78
|
|
|
73
|
|
||||
Casualty and impairment (gain) loss, net
|
—
|
|
|
(1,732
|
)
|
|
11,688
|
|
|
(3,935
|
)
|
||||
Gain on sale of real estate
|
(44,067
|
)
|
|
(31,133
|
)
|
|
(132,382
|
)
|
|
(82,563
|
)
|
||||
Net operating income from real estate assets sold or held for sale
|
(1,038
|
)
|
|
(9,345
|
)
|
|
(3,900
|
)
|
|
(19,321
|
)
|
||||
Net operating income
|
$
|
367,099
|
|
|
$
|
339,623
|
|
|
$
|
728,206
|
|
|
$
|
689,134
|
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
Rental income from real estate assets sold or held for sale
|
$
|
1,664
|
|
|
$
|
15,277
|
|
|
$
|
6,376
|
|
|
$
|
31,188
|
|
Operating expenses from real estate assets sold or held for sale
|
(626
|
)
|
|
(5,932
|
)
|
|
(2,476
|
)
|
|
(11,867
|
)
|
||||
Net operating income from real estate assets sold or held for sale
|
$
|
1,038
|
|
|
$
|
9,345
|
|
|
$
|
3,900
|
|
|
$
|
19,321
|
|
|
For the three months ended
|
|
For the six months ended
|
|
|
||||||||||||||||||||
|
Total
revenue |
|
NOI
|
|
% NOI change from prior year
|
|
Total
revenue |
|
NOI
|
|
% NOI change from prior year
|
|
Gross real estate (1)
|
||||||||||||
For the period ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Established
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
New England
|
$
|
59,292
|
|
|
$
|
37,658
|
|
|
1.3
|
%
|
|
$
|
117,898
|
|
|
$
|
75,474
|
|
|
2.3
|
%
|
|
$
|
1,879,079
|
|
Metro NY/NJ
|
90,402
|
|
|
61,538
|
|
|
0.9
|
%
|
|
179,564
|
|
|
122,502
|
|
|
2.3
|
%
|
|
2,967,335
|
|
|||||
Mid-Atlantic
|
56,022
|
|
|
38,343
|
|
|
—
|
%
|
|
111,777
|
|
|
77,490
|
|
|
1.8
|
%
|
|
2,064,723
|
|
|||||
Pacific Northwest
|
20,791
|
|
|
15,017
|
|
|
5.9
|
%
|
|
41,245
|
|
|
29,832
|
|
|
5.6
|
%
|
|
732,351
|
|
|||||
Northern California
|
84,028
|
|
|
64,587
|
|
|
2.3
|
%
|
|
167,351
|
|
|
128,304
|
|
|
2.1
|
%
|
|
2,819,965
|
|
|||||
Southern California
|
83,778
|
|
|
59,808
|
|
|
4.2
|
%
|
|
167,003
|
|
|
120,359
|
|
|
5.2
|
%
|
|
3,008,947
|
|
|||||
Total Established
|
394,313
|
|
|
276,951
|
|
|
2.1
|
%
|
|
784,838
|
|
|
553,961
|
|
|
3.0
|
%
|
|
13,472,400
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Stabilized
|
70,907
|
|
|
50,009
|
|
|
N/A
|
|
|
141,248
|
|
|
99,200
|
|
|
N/A
|
|
|
2,903,017
|
|
|||||
Development / Redevelopment
|
62,530
|
|
|
40,139
|
|
|
N/A
|
|
|
118,077
|
|
|
75,045
|
|
|
N/A
|
|
|
4,533,086
|
|
|||||
Land Held for Development
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
86,016
|
|
|||||
Non-allocated (2)
|
1,098
|
|
|
N/A
|
|
|
N/A
|
|
|
2,298
|
|
|
N/A
|
|
|
N/A
|
|
|
94,277
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
528,848
|
|
|
$
|
367,099
|
|
|
8.1
|
%
|
|
$
|
1,046,461
|
|
|
$
|
728,206
|
|
|
5.7
|
%
|
|
$
|
21,088,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
For the period ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Established
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
New England
|
$
|
59,288
|
|
|
$
|
37,977
|
|
|
2.9
|
%
|
|
$
|
117,854
|
|
|
$
|
75,415
|
|
|
9.0
|
%
|
|
$
|
1,841,109
|
|
Metro NY/NJ
|
85,021
|
|
|
58,778
|
|
|
2.3
|
%
|
|
168,099
|
|
|
115,480
|
|
|
2.7
|
%
|
|
2,889,770
|
|
|||||
Mid-Atlantic
|
58,464
|
|
|
40,530
|
|
|
2.5
|
%
|
|
115,994
|
|
|
80,593
|
|
|
1.9
|
%
|
|
2,331,290
|
|
|||||
Pacific Northwest
|
17,968
|
|
|
12,866
|
|
|
5.4
|
%
|
|
35,458
|
|
|
25,624
|
|
|
6.2
|
%
|
|
795,977
|
|
|||||
Northern California
|
79,632
|
|
|
60,850
|
|
|
6.8
|
%
|
|
158,084
|
|
|
121,097
|
|
|
9.1
|
%
|
|
2,653,785
|
|
|||||
Southern California
|
71,612
|
|
|
50,933
|
|
|
10.3
|
%
|
|
142,869
|
|
|
101,975
|
|
|
10.1
|
%
|
|
2,635,803
|
|
|||||
Total Established
|
371,985
|
|
|
261,934
|
|
|
5.1
|
%
|
|
738,358
|
|
|
520,184
|
|
|
6.5
|
%
|
|
13,147,734
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Stabilized (3)
|
53,118
|
|
|
35,784
|
|
|
N/A
|
|
|
124,557
|
|
|
91,718
|
|
|
N/A
|
|
|
2,166,893
|
|
|||||
Development / Redevelopment
|
60,460
|
|
|
41,905
|
|
|
N/A
|
|
|
113,711
|
|
|
77,232
|
|
|
N/A
|
|
|
4,065,071
|
|
|||||
Land Held for Development
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
511,797
|
|
|||||
Non-allocated (2)
|
1,467
|
|
|
N/A
|
|
|
N/A
|
|
|
2,990
|
|
|
N/A
|
|
|
N/A
|
|
|
81,186
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
487,030
|
|
|
$
|
339,623
|
|
|
12.0
|
%
|
|
$
|
979,616
|
|
|
$
|
689,134
|
|
|
16.8
|
%
|
|
$
|
19,972,681
|
|
(1)
|
Does not include gross real estate assets held for sale of
$15,271
and
$77,943
as of
June 30, 2017
and
2016
, respectively.
|
(2)
|
Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment.
|
(3)
|
Total revenue and NOI for the
six
months ended
June 30, 2016
includes
$20,306
in business interruption insurance proceeds related to the Edgewater casualty loss.
|
|
|
2009 Plan
shares
|
|
Weighted average
exercise price
per share
|
|
1994 Plan
shares
|
|
Weighted average
exercise price
per share
|
||||||
Options Outstanding, December 31, 2016
|
|
177,333
|
|
|
$
|
124.25
|
|
|
22,541
|
|
|
$
|
77.91
|
|
Exercised
|
|
(25,426
|
)
|
|
108.88
|
|
|
(10,743
|
)
|
|
99.47
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options Outstanding, June 30, 2017 (1)
|
|
151,907
|
|
|
$
|
126.83
|
|
|
11,798
|
|
|
$
|
58.28
|
|
(1)
|
All options outstanding are exercisable as of
June 30, 2017
.
|
|
|
Performance awards
|
|
Weighted average grant date fair value per award
|
|||
Outstanding at December 31, 2016
|
|
251,163
|
|
|
$
|
136.74
|
|
Granted (1)
|
|
81,708
|
|
|
176.59
|
|
|
Change in awards based on performance (2)
|
|
49,323
|
|
|
119.26
|
|
|
Converted to restricted stock
|
|
(128,482
|
)
|
|
118.75
|
|
|
Forfeited
|
|
(1,529
|
)
|
|
158.40
|
|
|
Outstanding at June 30, 2017
|
|
252,183
|
|
|
$
|
155.27
|
|
(1)
|
The amount of restricted stock that ultimately may be earned is based on the total shareholder return metrics related to the Company's common stock for
49,374
performance awards and financial metrics related to operating performance and leverage metrics of the Company for
32,334
performance awards.
|
(2)
|
Represents the change in the number of performance awards earned based on performance achievement.
|
|
|
2017
|
Dividend yield
|
|
3.2%
|
Estimated volatility over the life of the plan (1)
|
|
15.3% - 19.7%
|
Risk free rate
|
|
0.69% - 1.61%
|
Estimated performance award value based on total shareholder return measure
|
|
$175.86
|
(1)
|
Estimated volatility over the life of the plan is using
50%
historical volatility and
50%
implied volatility.
|
|
|
Restricted stock shares
|
|
Restricted stock shares weighted average grant date fair value per share
|
|
Restricted stock shares converted from performance awards
|
||||
Outstanding at December 31, 2016
|
|
136,705
|
|
|
$
|
158.51
|
|
|
176,698
|
|
Granted - restricted stock shares
|
|
72,832
|
|
|
179.58
|
|
|
128,482
|
|
|
Vested - restricted stock shares
|
|
(71,374
|
)
|
|
152.88
|
|
|
(70,595
|
)
|
|
Forfeited
|
|
(1,554
|
)
|
|
171.73
|
|
|
(657
|
)
|
|
Outstanding at June 30, 2017
|
|
136,609
|
|
|
$
|
172.53
|
|
|
233,928
|
|
|
Non-designated
Hedges
Interest Rate Caps
|
|
Cash Flow
Hedges
Interest Rate Caps
|
|
Cash Flow
Hedges
Interest Rate Swaps
|
||||||
|
|
|
|
|
|
||||||
Notional balance
|
$
|
695,642
|
|
|
$
|
35,471
|
|
|
$
|
250,000
|
|
Weighted average interest rate (1)
|
2.7
|
%
|
|
3.2
|
%
|
|
N/A
|
|
|||
Weighted average swapped/capped interest rate
|
6.1
|
%
|
|
5.9
|
%
|
|
2.4
|
%
|
|||
Earliest maturity date
|
Aug 2017
|
|
|
Apr 2019
|
|
|
May 2018
|
|
|||
Latest maturity date
|
Nov 2021
|
|
|
Apr 2019
|
|
|
May 2018
|
|
(1)
|
For interest rate caps, represents the weighted average interest rate on the hedged debt.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Cash flow hedge losses reclassified to earnings
|
$
|
1,781
|
|
|
$
|
1,561
|
|
|
$
|
3,534
|
|
|
$
|
2,935
|
|
Description
|
|
Total Fair Value
|
|
Quoted Prices
in Active Markets for Identical Asset
(Level 1)
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
|
|
|
|
|||||||||||||
|
|
6/30/2017
|
||||||||||||||
Non-Designated Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Caps
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps - Assets
|
|
674
|
|
|
—
|
|
|
674
|
|
|
—
|
|
||||
Interest Rate Swaps - Liabilities
|
|
(1,612
|
)
|
|
—
|
|
|
(1,612
|
)
|
|
—
|
|
||||
Puts
|
|
(5,928
|
)
|
|
—
|
|
|
—
|
|
|
(5,928
|
)
|
||||
DownREIT units
|
|
(1,441
|
)
|
|
(1,441
|
)
|
|
—
|
|
|
—
|
|
||||
Indebtedness
|
|
|
|
|
|
|
|
|
||||||||
Unsecured notes
|
|
(4,972,604
|
)
|
|
(4,972,604
|
)
|
|
—
|
|
|
—
|
|
||||
Secured notes payable and unsecured term loan
|
|
(1,984,423
|
)
|
|
—
|
|
|
(1,984,423
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(6,965,319
|
)
|
|
$
|
(4,974,045
|
)
|
|
$
|
(1,985,346
|
)
|
|
$
|
(5,928
|
)
|
Description
|
|
Total Fair Value
|
|
Quoted Prices
in Active Markets for Identical Asset
(Level 1)
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
|
|
|
|
|||||||||||||
|
|
12/31/2016
|
||||||||||||||
Non-Designated Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Caps
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
—
|
|
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Caps
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Interest Rate Swaps - Assets
|
|
14,775
|
|
|
—
|
|
|
14,775
|
|
|
—
|
|
||||
Puts
|
|
(6,002
|
)
|
|
—
|
|
|
—
|
|
|
(6,002
|
)
|
||||
DownREIT units
|
|
(1,329
|
)
|
|
(1,329
|
)
|
|
—
|
|
|
—
|
|
||||
Indebtedness
|
|
|
|
|
|
|
|
|
||||||||
Unsecured notes
|
|
(4,218,627
|
)
|
|
(4,218,627
|
)
|
|
—
|
|
|
—
|
|
||||
Secured notes payable and unsecured term loan
|
|
(2,744,462
|
)
|
|
—
|
|
|
(2,744,462
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(6,955,564
|
)
|
|
$
|
(4,219,956
|
)
|
|
$
|
(2,729,606
|
)
|
|
$
|
(6,002
|
)
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Net income attributable to common stockholders for the
three months ended June 30, 2017
was
$165,225,000
, a decrease of
$32,219,000
, or
16.3%
, as compared to the prior year period. The decrease is primarily due to an increase in debt extinguishment losses over the prior year period, as well as a decrease in joint venture real estate sales and related gains.
|
•
|
Established Communities NOI for the
three months ended June 30, 2017
was
$276,951,000
, an increase of
$5,727,000
, or
2.1%
, over the prior year period. This increase was driven by an increase in rental revenue of
2.5%
, partially offset by an increase in operating expenses of
3.5%
compared to the prior year period.
|
•
|
Established Communities (also known as Same Store Communities)
are 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 occupancy as of the beginning of the respective prior year period. For the
six
month periods ended
June 30, 2017
and
2016
, the Established Communities are communities that are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2016, are not conducting or planning to conduct substantial redevelopment activities and are not held for sale or planned for disposition within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of
95%
physical occupancy or (ii) the
one
-year anniversary of completion of development or redevelopment.
|
•
|
Other Stabilized Communities
are all other completed consolidated communities that have stabilized occupancy, as defined above, as of the beginning of the current calendar year. Other Stabilized Communities do not include communities that are conducting or planning to conduct substantial redevelopment activities within the current year.
|
•
|
Lease-Up Communities
are consolidated communities where construction has been complete for less than
one
year and where physical occupancy has not reached
95%
.
|
•
|
Redevelopment Communities
are consolidated communities where substantial redevelopment is in progress or is planned to begin during the current year. Redevelopment is considered substantial when capital invested during the reconstruction effort is expected to exceed the lesser of
$5,000,000
or
10%
of the community's pre-redevelopment basis and is expected to have a material impact on the operations of the community, including occupancy levels and future rental rates.
|
•
|
Unconsolidated Communities
are communities that we have an indirect ownership interest in through our investment interest in an unconsolidated joint venture.
|
|
|
Number of
communities
|
|
Number of
apartment homes
|
||
|
|
|
|
|
||
Current Communities
|
|
|
|
|
|
|
|
|
|
|
|
||
Established Communities:
|
|
|
|
|
|
|
New England
|
|
38
|
|
|
8,631
|
|
Metro NY/NJ
|
|
35
|
|
|
10,371
|
|
Mid-Atlantic
|
|
26
|
|
|
9,123
|
|
Pacific Northwest
|
|
13
|
|
|
3,305
|
|
Northern California
|
|
35
|
|
|
10,321
|
|
Southern California
|
|
45
|
|
|
13,330
|
|
Total Established
|
|
192
|
|
|
55,081
|
|
|
|
|
|
|
||
Other Stabilized Communities:
|
|
|
|
|
|
|
New England
|
|
7
|
|
|
1,868
|
|
Metro NY/NJ
|
|
10
|
|
|
2,672
|
|
Mid-Atlantic
|
|
8
|
|
|
3,285
|
|
Pacific Northwest
|
|
2
|
|
|
373
|
|
Northern California
|
|
4
|
|
|
1,279
|
|
Southern California
|
|
8
|
|
|
1,659
|
|
Non Core
|
|
3
|
|
|
1,014
|
|
Total Other Stabilized
|
|
42
|
|
|
12,150
|
|
|
|
|
|
|
||
Lease-Up Communities
|
|
7
|
|
|
2,537
|
|
|
|
|
|
|
||
Redevelopment Communities (1)
|
|
9
|
|
|
2,900
|
|
|
|
|
|
|
||
Unconsolidated Communities
|
|
14
|
|
|
3,490
|
|
|
|
|
|
|
||
Total Current Communities
|
|
264
|
|
|
76,158
|
|
|
|
|
|
|
||
Development Communities (2)
|
|
23
|
|
|
6,965
|
|
|
|
|
|
|
||
Total Communities
|
|
287
|
|
|
83,123
|
|
|
|
|
|
|
||
Development Rights
|
|
25
|
|
|
8,329
|
|
(1)
|
Redevelopment Communities includes the reconstruction of the building destroyed in the Edgewater casualty loss. Due to the nature of this reconstruction, the 240 apartment homes we expect the new building to contain upon completion are not included in the apartment home count presented, and will be included upon completion.
|
(2)
|
Development Communities includes AVA North Point, expected to contain 265 apartment homes, which is being developed within an unconsolidated joint venture.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||||||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
$ Change
|
|
% Change
|
|
6/30/2017
|
|
6/30/2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rental and other income
|
$
|
529,414
|
|
|
$
|
500,840
|
|
|
$
|
28,574
|
|
|
5.7
|
%
|
|
$
|
1,050,539
|
|
|
$
|
1,007,814
|
|
|
$
|
42,725
|
|
|
4.2
|
%
|
Management, development and other fees
|
1,098
|
|
|
1,467
|
|
|
(369
|
)
|
|
(25.2
|
)%
|
|
2,298
|
|
|
2,990
|
|
|
(692
|
)
|
|
(23.1
|
)%
|
||||||
Total revenue
|
530,512
|
|
|
502,307
|
|
|
28,205
|
|
|
5.6
|
%
|
|
1,052,837
|
|
|
1,010,804
|
|
|
42,033
|
|
|
4.2
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct property operating expenses, excluding property taxes
|
107,702
|
|
|
100,739
|
|
|
6,963
|
|
|
6.9
|
%
|
|
211,934
|
|
|
198,126
|
|
|
13,808
|
|
|
7.0
|
%
|
||||||
Property taxes
|
53,566
|
|
|
51,107
|
|
|
2,459
|
|
|
4.8
|
%
|
|
106,497
|
|
|
101,174
|
|
|
5,323
|
|
|
5.3
|
%
|
||||||
Total community operating expenses
|
161,268
|
|
|
151,846
|
|
|
9,422
|
|
|
6.2
|
%
|
|
318,431
|
|
|
299,300
|
|
|
19,131
|
|
|
6.4
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate-level property management and other indirect operating expenses
|
17,530
|
|
|
16,970
|
|
|
560
|
|
|
3.3
|
%
|
|
35,020
|
|
|
35,064
|
|
|
(44
|
)
|
|
(0.1
|
)%
|
||||||
Investments and investment management expense
|
1,455
|
|
|
1,194
|
|
|
261
|
|
|
21.9
|
%
|
|
2,776
|
|
|
2,340
|
|
|
436
|
|
|
18.6
|
%
|
||||||
Expensed acquisition, development and other pursuit costs, net of recoveries
|
570
|
|
|
1,436
|
|
|
(866
|
)
|
|
(60.3
|
)%
|
|
1,298
|
|
|
4,897
|
|
|
(3,599
|
)
|
|
(73.5
|
)%
|
||||||
Interest expense, net
|
50,102
|
|
|
46,581
|
|
|
3,521
|
|
|
7.6
|
%
|
|
99,397
|
|
|
89,991
|
|
|
9,406
|
|
|
10.5
|
%
|
||||||
Loss on extinguishment of debt, net
|
24,162
|
|
|
2,461
|
|
|
21,701
|
|
|
881.8
|
%
|
|
24,162
|
|
|
2,461
|
|
|
21,701
|
|
|
881.8
|
%
|
||||||
Depreciation expense
|
141,439
|
|
|
132,469
|
|
|
8,970
|
|
|
6.8
|
%
|
|
282,060
|
|
|
259,685
|
|
|
22,375
|
|
|
8.6
|
%
|
||||||
General and administrative expense
|
13,947
|
|
|
12,011
|
|
|
1,936
|
|
|
16.1
|
%
|
|
27,153
|
|
|
23,414
|
|
|
3,739
|
|
|
16.0
|
%
|
||||||
Casualty and impairment (gain) loss, net
|
—
|
|
|
(1,732
|
)
|
|
1,732
|
|
|
(100.0
|
)%
|
|
11,688
|
|
|
(3,935
|
)
|
|
15,623
|
|
|
N/A (1)
|
|
||||||
Total other expenses
|
249,205
|
|
|
211,390
|
|
|
37,815
|
|
|
17.9
|
%
|
|
483,554
|
|
|
413,917
|
|
|
69,637
|
|
|
16.8
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity in income of unconsolidated real estate entities
|
1,146
|
|
|
27,151
|
|
|
(26,005
|
)
|
|
(95.8
|
)%
|
|
17,819
|
|
|
55,120
|
|
|
(37,301
|
)
|
|
(67.7
|
)%
|
||||||
Gain on sale of communities
|
44,067
|
|
|
30,990
|
|
|
13,077
|
|
|
42.2
|
%
|
|
132,016
|
|
|
82,420
|
|
|
49,596
|
|
|
60.2
|
%
|
||||||
Gain on sale of other real estate
|
—
|
|
|
143
|
|
|
(143
|
)
|
|
(100.0
|
)%
|
|
366
|
|
|
143
|
|
|
223
|
|
|
155.9
|
%
|
||||||
Income before income taxes
|
165,252
|
|
|
197,355
|
|
|
(32,103
|
)
|
|
(16.3
|
)%
|
|
401,053
|
|
|
435,270
|
|
|
(34,217
|
)
|
|
(7.9
|
)%
|
||||||
Income tax expense
|
58
|
|
|
36
|
|
|
22
|
|
|
61.1
|
%
|
|
78
|
|
|
73
|
|
|
5
|
|
|
6.8
|
%
|
||||||
Net income
|
165,194
|
|
|
197,319
|
|
|
(32,125
|
)
|
|
(16.3
|
)%
|
|
400,975
|
|
|
435,197
|
|
|
(34,222
|
)
|
|
(7.9
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss attributable to noncontrolling interests
|
31
|
|
|
125
|
|
|
(94
|
)
|
|
(75.2
|
)%
|
|
125
|
|
|
180
|
|
|
(55
|
)
|
|
(30.6
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income attributable to common stockholders
|
$
|
165,225
|
|
|
$
|
197,444
|
|
|
$
|
(32,219
|
)
|
|
(16.3
|
)%
|
|
$
|
401,100
|
|
|
$
|
435,377
|
|
|
$
|
(34,277
|
)
|
|
(7.9
|
)%
|
(1)
|
Percent change is not meaningful.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
165,194
|
|
|
$
|
197,319
|
|
|
$
|
400,975
|
|
|
$
|
435,197
|
|
Indirect operating expenses, net of corporate income
|
16,423
|
|
|
15,477
|
|
|
32,720
|
|
|
32,015
|
|
||||
Investments and investment management expense
|
1,455
|
|
|
1,194
|
|
|
2,776
|
|
|
2,340
|
|
||||
Expensed acquisition, development and other pursuit costs, net of recoveries
|
570
|
|
|
1,436
|
|
|
1,298
|
|
|
4,897
|
|
||||
Interest expense, net
|
50,102
|
|
|
46,581
|
|
|
99,397
|
|
|
89,991
|
|
||||
Loss on extinguishment of debt, net
|
24,162
|
|
|
2,461
|
|
|
24,162
|
|
|
2,461
|
|
||||
General and administrative expense
|
13,947
|
|
|
12,011
|
|
|
27,153
|
|
|
23,414
|
|
||||
Equity in income of unconsolidated real estate entities
|
(1,146
|
)
|
|
(27,151
|
)
|
|
(17,819
|
)
|
|
(55,120
|
)
|
||||
Depreciation expense
|
141,439
|
|
|
132,469
|
|
|
282,060
|
|
|
259,685
|
|
||||
Income tax expense
|
58
|
|
|
36
|
|
|
78
|
|
|
73
|
|
||||
Casualty and impairment (gain) loss, net
|
—
|
|
|
(1,732
|
)
|
|
11,688
|
|
|
(3,935
|
)
|
||||
Gain on sale of real estate assets
|
(44,067
|
)
|
|
(31,133
|
)
|
|
(132,382
|
)
|
|
(82,563
|
)
|
||||
Net operating income from real estate assets sold or held for sale
|
(1,038
|
)
|
|
(9,345
|
)
|
|
(3,900
|
)
|
|
(19,321
|
)
|
||||
Net operating income
|
$
|
367,099
|
|
|
$
|
339,623
|
|
|
$
|
728,206
|
|
|
$
|
689,134
|
|
|
For the three months ended
|
|
For the six months ended
|
||||
|
6/30/2017
|
|
6/30/2017
|
||||
|
|
|
|
|
|||
Established Communities
|
$
|
5,727
|
|
|
$
|
16,026
|
|
Other Stabilized Communities (1)
|
11,591
|
|
|
8,483
|
|
||
Development and Redevelopment Communities
|
10,158
|
|
|
14,563
|
|
||
Total
|
$
|
27,476
|
|
|
$
|
39,072
|
|
(1)
|
NOI for the
six
months ended
June 30, 2016
includes
$20,306
in business interruption insurance proceeds related to the Edgewater casualty loss.
|
•
|
gains or losses on sales of previously depreciated operating communities;
|
•
|
cumulative effect of change in accounting principle;
|
•
|
impairment write-downs of depreciable real estate assets;
|
•
|
write-downs of investments in affiliates due to a decrease in the value of depreciable real estate assets held by those affiliates;
|
•
|
depreciation of real estate assets; and
|
•
|
adjustments for unconsolidated partnerships and joint ventures.
|
•
|
joint venture gains, costs, and promoted interests;
|
•
|
casualty and impairment losses or gains, net;
|
•
|
gains or losses from early extinguishment of consolidated borrowings;
|
•
|
abandoned pursuits;
|
•
|
business interruption insurance proceeds and the related lost NOI that is covered by the business interruption insurance proceeds;
|
•
|
property and casualty insurance proceeds and legal settlements;
|
•
|
gains or losses on sales of assets not subject to depreciation;
|
•
|
hedge ineffectiveness;
|
•
|
severance related costs;
|
•
|
expensed acquisition costs related to business acquisitions that occurred prior to the adoption of ASU 2017-01 as of October 1, 2016; and
|
•
|
other non-core items.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common stockholders
|
$
|
165,225
|
|
|
$
|
197,444
|
|
|
$
|
401,100
|
|
|
$
|
435,377
|
|
Depreciation - real estate assets, including joint venture adjustments
|
141,128
|
|
|
134,858
|
|
|
282,085
|
|
|
262,558
|
|
||||
Distributions to noncontrolling interests
|
10
|
|
|
10
|
|
|
21
|
|
|
20
|
|
||||
Gain on sale of unconsolidated entities holding previously depreciated real estate
|
—
|
|
|
(23,547
|
)
|
|
(8,697
|
)
|
|
(53,172
|
)
|
||||
Gain on sale of previously depreciated real estate
|
(44,067
|
)
|
|
(30,990
|
)
|
|
(132,016
|
)
|
|
(82,420
|
)
|
||||
Casualty and impairment (recovery) loss, net on real estate (1)(6)
|
—
|
|
|
(4,195
|
)
|
|
—
|
|
|
(4,195
|
)
|
||||
FFO attributable to common stockholders
|
262,296
|
|
|
273,580
|
|
|
542,493
|
|
|
558,168
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusting items:
|
|
|
|
|
|
|
|
||||||||
Joint venture losses (2)
|
115
|
|
|
574
|
|
|
381
|
|
|
5,568
|
|
||||
Joint venture promote (3)
|
—
|
|
|
(3,447
|
)
|
|
(6,765
|
)
|
|
(3,447
|
)
|
||||
Impairment loss on real estate (4)(6)
|
—
|
|
|
4,000
|
|
|
9,350
|
|
|
10,500
|
|
||||
Casualty (gain) loss, net on real estate (5)(6)
|
—
|
|
|
(1,537
|
)
|
|
2,338
|
|
|
(10,239
|
)
|
||||
Business interruption insurance proceeds (7)
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(20,344
|
)
|
||||
Lost NOI from casualty losses covered by business interruption insurance (8)
|
2,062
|
|
|
1,833
|
|
|
3,867
|
|
|
3,703
|
|
||||
Loss on extinguishment of consolidated debt
|
24,162
|
|
|
2,461
|
|
|
24,162
|
|
|
2,461
|
|
||||
Hedge ineffectiveness
|
(753
|
)
|
|
—
|
|
|
(753
|
)
|
|
—
|
|
||||
Severance related costs
|
11
|
|
|
(24
|
)
|
|
135
|
|
|
561
|
|
||||
Development pursuit and other write-offs
|
412
|
|
|
338
|
|
|
835
|
|
|
771
|
|
||||
Gain on sale of other real estate
|
—
|
|
|
(143
|
)
|
|
(366
|
)
|
|
(143
|
)
|
||||
Acquisition costs
|
—
|
|
|
829
|
|
|
—
|
|
|
1,929
|
|
||||
Legal settlements
|
84
|
|
|
—
|
|
|
84
|
|
|
—
|
|
||||
Core FFO attributable to common stockholders
|
$
|
288,389
|
|
|
$
|
278,454
|
|
|
$
|
575,761
|
|
|
$
|
549,488
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - diluted
|
138,173,151
|
|
|
137,437,733
|
|
|
137,853,625
|
|
|
137,410,387
|
|
||||
|
|
|
|
|
|
|
|
||||||||
EPS per common share - diluted
|
$
|
1.20
|
|
|
$
|
1.44
|
|
|
$
|
2.91
|
|
|
$
|
3.17
|
|
FFO per common share - diluted
|
$
|
1.90
|
|
|
$
|
1.99
|
|
|
$
|
3.94
|
|
|
$
|
4.06
|
|
Core FFO per common share - diluted
|
$
|
2.09
|
|
|
$
|
2.03
|
|
|
$
|
4.18
|
|
|
$
|
4.00
|
|
(1)
|
During the three months ended
June 30, 2016
, we received insurance proceeds, net of additional costs incurred, of $5,732 related to the severe winter storms that occurred in our Northeast markets in 2015. For the three and
six
months ended
June 30, 2016
, we recognized $4,195 of this recovery as an offset to the impairment on depreciable real estate of $4,195 recognized in the prior year period. The balance of the net insurance proceeds received in 2016 of $1,537 is recognized as a casualty gain and is included in the reconciliation of FFO to Core FFO.
|
(2)
|
Amounts for the three and
six
months ended
June 30, 2016
, are primarily composed of our proportionate share of yield maintenance charges incurred for the early repayment of debt associated with joint venture disposition activity and the write-off of asset management fee intangibles primarily associated with the disposition of communities in the U.S. Fund. Amounts for the three and
six
months ended
June 30, 2017
, are primarily composed of our proportionate share of operating results for joint ventures formed with Equity Residential as part of the Archstone acquisition.
|
(3)
|
Amounts are composed of our recognition of our promoted interest in Fund II.
|
(4)
|
Amount for the
six
months ended
June 30, 2017
includes an impairment charge for a land parcel we had acquired for development and sold in July 2017. Amounts for the three and
six
months ended
June 30, 2016
include impairment charges relating to ancillary land parcels.
|
(5)
|
Amount for the
six
months ended
June 30, 2017
includes
$19,481
for the Maplewood casualty loss, partially offset by
$17,143
of expected property damage insurance proceeds, a portion of which was received during the period. Amounts for the three and
six
months ended
June 30, 2016
includes $1,537 in insurance proceeds in excess of the total recognized loss related to severe winter storms in
|
(6)
|
The aggregate impact of (i) casualty and impairment (recovery) loss, net on real estate, (ii) impairment loss on real estate and (iii) casualty (gain) loss, net on real estate, is a loss of
$11,688
for the
six
months ended
June 30, 2017
, and gains of
$1,732
and
$3,935
for the three and
six
months ended
June 30, 2016
, respectively.
|
(7)
|
Amount for the
six
months ended
June 30, 2016
is primarily composed of business interruption insurance proceeds resulting from the final insurance settlement of the Edgewater casualty loss.
|
(8)
|
Amounts primarily relate to lost NOI resulting from the Edgewater casualty loss, for which we received
$20,306
in business interruption insurance proceeds in the first quarter of 2016. Amounts for the three and
six
months ended
June 30, 2017
also include $292 related to the Maplewood casualty loss in the first quarter of 2017.
|
|
For the three months ended
|
|
For the six months ended
|
||||||||||||
|
6/30/2017
|
|
6/30/2016
|
|
6/30/2017
|
|
6/30/2016
|
||||||||
Net cash provided by operating activities (1)
|
$
|
268,898
|
|
|
$
|
275,396
|
|
|
$
|
562,360
|
|
|
$
|
553,178
|
|
Net cash used in investing activities
|
$
|
(131,267
|
)
|
|
$
|
(327,764
|
)
|
|
$
|
(366,614
|
)
|
|
$
|
(712,491
|
)
|
Net cash (used in) provided by financing activities (1)
|
$
|
(205,859
|
)
|
|
$
|
137,133
|
|
|
$
|
(357,263
|
)
|
|
$
|
(58,888
|
)
|
(1)
|
2016 amounts reflect certain reclassifications as a result of the retrospective adjustment of the presentation of payments related to tax withholding for share-based compensation. Refer to Note 1, "Organization, Basis of Presentation and Significant Accounting Policies, Change in Accounting Principle," of the Condensed Consolidated Financial Statements included elsewhere in this report.
|
•
|
development and redevelopment activity in which we are currently engaged;
|
•
|
the minimum dividend payments on our common stock required to maintain our REIT qualification under the Code;
|
•
|
debt service and principal payments either at maturity or opportunistically before maturity; and
|
•
|
normal recurring operating expenses and corporate overhead expenses.
|
•
|
investment of
$495,868,000
in the development and redevelopment of communities; and
|
•
|
capital expenditures of
$28,749,000
for our operating communities and non-real estate assets.
|
•
|
proceeds from dispositions, net of amounts held in escrow related to a planned tax deferred exchange, of
$157,591,000
; and
|
•
|
net distributions from unconsolidated real estate entities of
$11,752,000
.
|
•
|
the repayment of secured notes in the amount of
$1,285,555,000
; and
|
•
|
payment of cash dividends in the amount of
$380,723,000
.
|
•
|
proceeds from the issuance of unsecured notes and borrowing under the $250 million Term Loan in the aggregate amount of
$948,616,000
;
|
•
|
the issuance of secured notes in the amount of
$185,100,000
;
|
•
|
the issuance of common stock in the amount of
$110,033,000
, primarily through CEP IV; and
|
•
|
borrowings under the Credit Facility of
$105,000,000
.
|
•
|
limitations on the amount of total and secured debt in relation to our overall capital structure;
|
•
|
limitations on the amount of our unsecured debt relative to the undepreciated basis of real estate assets that are not encumbered by property-specific financing; and
|
•
|
minimum levels of debt service coverage.
|
•
|
In February 2017, we repaid
$17,300,000
of variable rate debt secured by Avalon Mountain View at par at its scheduled maturity date.
|
•
|
In February 2017, we entered into a
$250,000,000
variable rate unsecured term loan (the "$250 million Term Loan"), of which
$100,000,000
matures in
February 2022
with stated pricing of LIBOR plus 0.90%, and
$150,000,000
matures in
February 2024
with stated pricing of LIBOR plus 1.50%. In April 2017, we drew the
$250,000,000
available balance.
|
•
|
In May 2017, we repaid
$670,590,000
aggregate principal amount of
6.26%
fixed rate secured notes, secured by
11
communities, representing the majority of the Fannie Mae pool 2 secured indebtedness assumed as part of the Archstone acquisition, which had a contractual maturity date of
November 2017
but opened for prepayment at par on April 30, 2017. In conjunction with the repayment, we recognized a gain of
$10,839,000
, primarily composed of the write-off of unamortized premium. We refinanced the secured borrowings for
three
of these communities for an aggregate principal amount of
$185,100,000
, with a contractual fixed interest rate of
3.61%
and maturity dates of
June 2027
.
|
•
|
In May 2017, we issued
$400,000,000
principal amount of unsecured notes in a public offering under our existing shelf registration statement for net proceeds of approximately
$396,016,000
. The notes mature in
May 2027
and were issued at a
3.35%
interest rate.
|
•
|
In June 2017, we issued
$300,000,000
principal amount of unsecured notes in a public offering under our existing shelf registration statement for net proceeds of approximately
$297,372,000
. The notes mature in
July 2047
and were issued at a
4.15%
interest rate.
|
•
|
In June 2017, we repaid
$556,313,000
aggregate principal amount of
5.86%
fixed rate secured notes, secured by
12
wholly-owned operating communities, representing the remaining debt in the Company's Freddie Mac cross-collateralized pool financing originated in 2009, in advance of their
May 2019
maturity dates. In conjunction with the repayment, we recognized a charge of
$34,965,000
, consisting of prepayment penalties of
$33,515,000
and the non-cash write-off of deferred financing costs of
$1,450,000
.
|
|
|
All-In
interest rate (1) |
|
Principal
maturity date |
|
Balance Outstanding
|
|
Scheduled Maturities
|
|||||||||||||||||||||||||||||
Community
|
|
|
|
12/31/2016
|
|
6/30/2017
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|||||||||||||||||||
Tax-exempt bonds (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon Oaks West
|
|
7.55
|
%
|
|
Apr-2043
|
|
$
|
15,420
|
|
|
$
|
15,327
|
|
|
$
|
115
|
|
|
$
|
241
|
|
|
$
|
257
|
|
|
$
|
275
|
|
|
$
|
293
|
|
|
$
|
14,146
|
|
Avalon at Chestnut Hill
|
|
6.16
|
%
|
|
Oct-2047
|
|
38,564
|
|
|
38,355
|
|
|
258
|
|
|
536
|
|
|
566
|
|
|
596
|
|
|
629
|
|
|
35,770
|
|
||||||||
Avalon Westbury
|
|
3.81
|
%
|
|
Nov-2036
|
(3)
|
62,200
|
|
|
62,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,200
|
|
||||||||
|
|
|
|
|
|
|
116,184
|
|
|
115,882
|
|
|
373
|
|
|
777
|
|
|
823
|
|
|
871
|
|
|
922
|
|
|
112,116
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Variable rate (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon Mountain View
|
|
1.42
|
%
|
|
Feb-2017
|
(5)
|
17,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Mission Viejo
|
|
1.94
|
%
|
|
Jun-2025
|
(6)
|
7,635
|
|
|
7,635
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,635
|
|
||||||||
AVA Nob Hill
|
|
1.94
|
%
|
|
Jun-2025
|
(6)
|
20,800
|
|
|
20,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,800
|
|
||||||||
Avalon Campbell
|
|
2.26
|
%
|
|
Jun-2025
|
(6)
|
38,800
|
|
|
38,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,800
|
|
||||||||
Eaves Pacifica
|
|
2.28
|
%
|
|
Jun-2025
|
(6)
|
17,600
|
|
|
17,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,600
|
|
||||||||
Avalon Bowery Place I
|
|
3.78
|
%
|
|
Nov-2037
|
(6)
|
93,800
|
|
|
93,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,800
|
|
||||||||
Avalon Acton
|
|
2.33
|
%
|
|
Jul-2040
|
(6)
|
45,000
|
|
|
45,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,000
|
|
||||||||
Avalon Morningside Park
|
|
2.01
|
%
|
|
May-2046
|
(3)
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
99,655
|
|
||||||||
Avalon Clinton North
|
|
2.60
|
%
|
|
Nov-2038
|
(6)
|
147,000
|
|
|
147,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147,000
|
|
||||||||
Avalon Clinton South
|
|
2.60
|
%
|
|
Nov-2038
|
(6)
|
121,500
|
|
|
121,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121,500
|
|
||||||||
Avalon Midtown West
|
|
2.51
|
%
|
|
May-2029
|
(6)
|
100,500
|
|
|
100,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,500
|
|
||||||||
Avalon San Bruno I
|
|
2.49
|
%
|
|
Dec-2037
|
(6)
|
64,450
|
|
|
64,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,450
|
|
||||||||
Avalon Calabasas
|
|
2.44
|
%
|
|
Apr-2028
|
(6)
|
44,410
|
|
|
44,410
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,410
|
|
||||||||
|
|
|
|
|
|
818,795
|
|
|
801,495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
801,150
|
|
|||||||||
Conventional loans (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$250 million unsecured notes
|
|
6.19
|
%
|
|
Mar-2020
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
||||||||
$250 million unsecured notes
|
|
4.04
|
%
|
|
Jan-2021
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
||||||||
$450 million unsecured notes
|
|
4.30
|
%
|
|
Sep-2022
|
|
450,000
|
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
||||||||
$250 million unsecured notes
|
|
3.00
|
%
|
|
Mar-2023
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
||||||||
$400 million unsecured notes
|
|
3.78
|
%
|
|
Oct-2020
|
|
400,000
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
||||||||
$350 million unsecured notes
|
|
4.30
|
%
|
|
Dec-2023
|
|
350,000
|
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||||||
$300 million unsecured notes
|
|
3.66
|
%
|
|
Nov-2024
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$525 million unsecured notes
|
|
3.55
|
%
|
|
Jun-2025
|
|
525,000
|
|
|
525,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
525,000
|
|
||||||||
$300 million unsecured notes
|
|
3.62
|
%
|
|
Nov-2025
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$475 million unsecured notes
|
|
3.35
|
%
|
|
May-2026
|
|
475,000
|
|
|
475,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475,000
|
|
||||||||
$300 million unsecured notes
|
|
3.01
|
%
|
|
Oct-2026
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$350 million unsecured notes
|
|
3.95
|
%
|
|
Oct-2046
|
|
350,000
|
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||||||
$400 million unsecured notes
|
|
3.50
|
%
|
|
May-2027
|
|
—
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
||||||||
$300 million unsecured notes
|
|
4.09
|
%
|
|
Jul-2047
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
Avalon Orchards
|
|
7.80
|
%
|
|
Jul-2033
|
|
16,075
|
|
|
15,853
|
|
|
274
|
|
|
577
|
|
|
619
|
|
|
663
|
|
|
710
|
|
|
13,010
|
|
||||||||
Avalon Walnut Creek
|
|
4.00
|
%
|
|
Jul-2066
|
|
3,420
|
|
|
3,420
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,420
|
|
||||||||
Avalon Mission Oaks
|
|
6.04
|
%
|
|
May-2019
|
(7)
|
19,545
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Stratford
|
|
6.02
|
%
|
|
May-2019
|
(7)
|
38,221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
AVA Belltown
|
|
6.00
|
%
|
|
May-2019
|
(7)
|
60,766
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Encino
|
|
6.06
|
%
|
|
May-2019
|
(7)
|
33,882
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Run East
|
|
5.95
|
%
|
|
May-2019
|
(7)
|
36,305
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Wilshire
|
|
6.18
|
%
|
|
May-2019
|
(7)
|
61,268
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon at Foxhall
|
|
6.06
|
%
|
|
May-2019
|
(7)
|
54,583
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon at Gallery Place
|
|
6.06
|
%
|
|
May-2019
|
(7)
|
42,410
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon at Traville
|
|
5.91
|
%
|
|
May-2019
|
(7)
|
71,871
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Bellevue
|
|
5.92
|
%
|
|
May-2019
|
(7)
|
24,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon on the Alameda
|
|
5.91
|
%
|
|
May-2019
|
(7)
|
49,930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon at Mission Bay I
|
|
5.90
|
%
|
|
May-2019
|
(7)
|
67,772
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
AVA Pasadena
|
|
4.06
|
%
|
|
Jun-2018
|
|
11,287
|
|
|
11,180
|
|
|
106
|
|
|
11,074
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon La Jolla Colony
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
26,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Old Town Pasadena
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
14,120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Thousand Oaks
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
26,392
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Archstone Lexington
|
|
3.36
|
%
|
|
Nov-2017
|
|
21,601
|
|
|
21,601
|
|
|
21,601
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Los Feliz
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
41,302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Oak Creek
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
69,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Del Mar Station
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
70,854
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Courthouse Place
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
118,112
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Pasadena
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
25,805
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves West Valley
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
146,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Woodland Hills
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
98,732
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Russett
|
|
3.36
|
%
|
|
Nov-2017
|
(7)
|
32,199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Los Feliz
|
|
3.71
|
%
|
|
Jun-2027
|
(8)
|
—
|
|
|
41,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,400
|
|
||||||||
Eaves Woodland Hills
|
|
3.69
|
%
|
|
Jun-2027
|
(8)
|
—
|
|
|
111,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,500
|
|
||||||||
Avalon Russett
|
|
3.84
|
%
|
|
Jun-2027
|
(8)
|
—
|
|
|
32,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,200
|
|
||||||||
Avalon San Bruno II
|
|
3.85
|
%
|
|
Apr-2021
|
|
30,001
|
|
|
29,787
|
|
|
254
|
|
|
534
|
|
|
564
|
|
|
591
|
|
|
27,844
|
|
|
—
|
|
||||||||
Avalon Westbury
|
|
4.88
|
%
|
|
Nov-2036
|
(3)
|
17,745
|
|
|
17,105
|
|
|
654
|
|
|
1,358
|
|
|
1,426
|
|
|
1,499
|
|
|
1,574
|
|
|
10,594
|
|
||||||||
Avalon San Bruno III
|
|
3.18
|
%
|
|
Jun-2020
|
|
54,408
|
|
|
53,912
|
|
|
597
|
|
|
1,226
|
|
|
1,264
|
|
|
50,825
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Andover
|
|
3.29
|
%
|
|
Apr-2018
|
|
13,844
|
|
|
13,672
|
|
|
175
|
|
|
13,497
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Natick
|
|
3.14
|
%
|
|
Apr-2019
|
|
14,170
|
|
|
14,002
|
|
|
171
|
|
|
349
|
|
|
13,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Hoboken
|
|
3.55
|
%
|
|
Dec-2020
|
|
67,904
|
|
|
67,904
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,904
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Columbia Pike
|
|
3.24
|
%
|
|
Nov-2019
|
|
70,019
|
|
|
69,391
|
|
|
753
|
|
|
1,553
|
|
|
67,085
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
5,752,312
|
|
|
5,402,927
|
|
|
24,585
|
|
|
30,168
|
|
|
84,440
|
|
|
771,482
|
|
|
280,128
|
|
|
4,212,124
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Variable rate (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon Calabasas
|
|
2.41
|
%
|
|
Aug-2018
|
(6)
|
53,570
|
|
|
52,717
|
|
|
621
|
|
|
52,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Natick
|
|
3.15
|
%
|
|
Apr-2019
|
(6)
|
35,897
|
|
|
35,471
|
|
|
431
|
|
|
884
|
|
|
34,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Term Loan - $300 million
|
|
2.58
|
%
|
|
Mar-2021
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
||||||||
Term Loan - $100 million
|
|
2.14
|
%
|
|
Feb-2022
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
||||||||
Term Loan - $150 million
|
|
2.68
|
%
|
|
Feb-2024
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||||||
|
|
|
|
|
|
|
389,467
|
|
|
638,188
|
|
|
1,052
|
|
|
52,980
|
|
|
34,156
|
|
|
—
|
|
|
300,000
|
|
|
250,000
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total indebtedness - excluding Credit Facility
|
|
|
|
|
|
|
$
|
7,076,758
|
|
|
$
|
6,958,492
|
|
|
$
|
26,010
|
|
|
$
|
83,925
|
|
|
$
|
119,419
|
|
|
$
|
772,353
|
|
|
$
|
581,395
|
|
|
$
|
5,375,390
|
|
(1)
|
Includes credit enhancement fees, facility fees, trustees' fees, the impact of interest rate hedges, offering costs, mark to market amortization and other fees.
|
(2)
|
Balances outstanding represent total amounts due at maturity, and exclude deferred financing costs and debt discount for the unsecured notes of
$44,103
and
$36,698
as of
June 30, 2017
and
December 31, 2016
, respectively, and deferred financing costs and debt discount associated with secured notes of
$27,630
as of
June 30, 2017
, and deferred financing costs net of premium of
$9,180
as of
December 31, 2016
, as reflected on our Condensed Consolidated Balance Sheets included elsewhere in this report.
|
(3)
|
Maturity date reflects the contractual maturity of the underlying bond. There is also an associated earlier credit enhancement maturity date.
|
(4)
|
Variable rates are given as of
June 30, 2017
.
|
(5)
|
In February 2017, we repaid this borrowing at par at its scheduled maturity date.
|
(6)
|
Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement.
|
(7)
|
During the three months ended
June 30, 2017
, we repaid this borrowing in advance of its scheduled maturity date.
|
(8)
|
In May 2017, we repaid a borrowing secured by this community, as discussed in note (7), and subsequently refinanced the secured borrowing.
|
|
|
Company
ownership percentage
|
|
# of Apartment homes
|
|
Total capitalized cost (1)
|
|
Debt (2)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
Interest rate (3)
|
|
Maturity date
|
||||||||||
Unconsolidated Real Estate Investments
|
|
|
|
|
Amount
|
|
Type
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fund II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Briarwood Apartments - Owings Mills, MD (4)
|
|
|
|
|
348
|
|
|
$
|
46,114
|
|
|
$
|
25,010
|
|
|
Fixed
|
|
3.64
|
%
|
|
Nov 2017
|
2. Avalon Watchung - Watchung, NJ
|
|
|
|
|
334
|
|
|
66,700
|
|
|
39,221
|
|
|
Fixed
|
|
3.37
|
%
|
|
Apr 2019
|
||
Total Fund II
|
|
31.3
|
%
|
|
682
|
|
|
112,814
|
|
|
64,231
|
|
|
|
|
3.48
|
%
|
|
|
||
U.S. Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Eaves Sunnyvale - Sunnyvale, CA (5)
|
|
|
|
|
192
|
|
|
67,293
|
|
|
32,626
|
|
|
Fixed
|
|
5.33
|
%
|
|
Nov 2019
|
||
2. Avalon Studio 4121 - Studio City, CA
|
|
|
|
|
149
|
|
|
57,010
|
|
|
29,222
|
|
|
Fixed
|
|
3.34
|
%
|
|
Nov 2022
|
||
3. Avalon Marina Bay - Marina del Rey, CA (6)
|
|
|
|
|
205
|
|
|
77,146
|
|
|
51,300
|
|
|
Fixed
|
|
1.56
|
%
|
|
Dec 2020
|
||
4. Avalon Venice on Rose - Venice, CA
|
|
|
|
|
70
|
|
|
57,238
|
|
|
29,443
|
|
|
Fixed
|
|
3.28
|
%
|
|
Jun 2020
|
||
5. Avalon Station 250 - Dedham, MA
|
|
|
|
|
285
|
|
|
96,453
|
|
|
56,943
|
|
|
Fixed
|
|
3.73
|
%
|
|
Sep 2022
|
||
6. Avalon Grosvenor Tower - Bethesda, MD
|
|
|
|
|
237
|
|
|
79,951
|
|
|
44,135
|
|
|
Fixed
|
|
3.74
|
%
|
|
Sep 2022
|
||
7. Avalon Kirkland at Carillon - Kirkland, WA
|
|
|
|
|
131
|
|
|
60,711
|
|
|
28,706
|
|
|
Fixed
|
|
3.75
|
%
|
|
Feb 2019
|
||
Total U.S. Fund
|
|
28.6
|
%
|
|
1,269
|
|
|
495,802
|
|
|
272,375
|
|
|
|
|
3.43
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
AC JV
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Avalon North Point - Cambridge, MA (7)
|
|
|
|
|
426
|
|
|
187,377
|
|
|
111,653
|
|
|
Fixed
|
|
6.00
|
%
|
|
Aug 2021
|
||
2. Avalon Woodland Park - Herndon, VA (7)
|
|
|
|
|
392
|
|
|
85,828
|
|
|
50,647
|
|
|
Fixed
|
|
6.00
|
%
|
|
Aug 2021
|
||
3. Avalon North Point Lofts - Cambridge, MA
|
|
|
|
103
|
|
|
26,805
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|||
Total AC JV
|
|
20.0
|
%
|
|
921
|
|
|
300,010
|
|
|
162,300
|
|
|
|
|
6.00
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Operating Joint Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. MVP I, LLC
|
|
25.0
|
%
|
|
313
|
|
|
125,154
|
|
|
103,000
|
|
|
Fixed
|
|
3.24
|
%
|
|
Jul 2025
|
||
2. Brandywine Apartments of Maryland, LLC
|
|
28.7
|
%
|
|
305
|
|
|
19,305
|
|
|
23,036
|
|
|
Fixed
|
|
3.40
|
%
|
|
Jun 2028
|
||
Total Other Joint Ventures
|
|
|
|
618
|
|
|
144,459
|
|
|
126,036
|
|
|
|
|
3.27
|
%
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Unconsolidated Investments
|
|
|
|
3,490
|
|
|
$
|
1,053,085
|
|
|
$
|
624,942
|
|
|
|
|
4.07
|
%
|
|
|
(1)
|
Represents total capitalized cost as of
June 30, 2017
.
|
(2)
|
We have not guaranteed the debt of unconsolidated investees and bear no responsibility for the repayment.
|
(3)
|
Represents weighted average rate on outstanding debt as of
June 30, 2017
.
|
(4)
|
In July 2017, this community was sold for a sales price of
$64,750
, a portion of which was used to repay the outstanding indebtedness.
|
(5)
|
Borrowing on this community is comprised of two mortgage loans.
|
(6)
|
Borrowing on this community is a variable rate loan which has been converted to a fixed rate borrowing with an interest rate swap.
|
(7)
|
Borrowing is comprised of
four
mortgage loans made by the equity investors in the venture in proportion to their equity interests.
|
|
Number of
apartment
homes
|
|
Projected total
capitalized cost (1)
($ millions)
|
|
Construction
start
|
|
Initial projected occupancy (2)
|
|
Estimated
completion
|
|
Estimated
stabilized operations (3)
|
|||||
1.
|
|
Avalon West Hollywood (4)
West Hollywood, CA
|
294
|
|
|
$
|
153.6
|
|
|
Q2 2014
|
|
Q1 2017
|
|
Q1 2018
|
|
Q2 2018
|
2.
|
|
Avalon North Station
Boston, MA |
503
|
|
|
271.2
|
|
|
Q3 2014
|
|
Q4 2016
|
|
Q1 2018
|
|
Q3 2018
|
|
3.
|
|
AVA NoMa
Washington, D.C.
|
438
|
|
|
148.3
|
|
|
Q2 2015
|
|
Q1 2017
|
|
Q1 2018
|
|
Q3 2018
|
|
4.
|
|
Avalon Great Neck
Great Neck, NY
|
191
|
|
|
79.6
|
|
|
Q2 2015
|
|
Q2 2017
|
|
Q4 2017
|
|
Q2 2018
|
|
5.
|
|
Avalon Brooklyn Bay (5)
Brooklyn, NY |
180
|
|
|
89.7
|
|
|
Q3 2015
|
|
Q3 2017
|
|
Q4 2017
|
|
Q3 2018
|
|
6.
|
|
Avalon Newcastle Commons I (4)
Newcastle, WA |
378
|
|
|
116.3
|
|
|
Q3 2015
|
|
Q4 2016
|
|
Q4 2017
|
|
Q3 2018
|
|
7.
|
|
Avalon Chino Hills
Chino Hills, CA
|
331
|
|
|
96.6
|
|
|
Q3 2015
|
|
Q4 2016
|
|
Q3 2017
|
|
Q4 2017
|
|
8.
|
|
Avalon Maplewood (6)
Maplewood, NJ
|
235
|
|
|
65.4
|
|
|
Q4 2015
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
9.
|
|
Avalon Rockville Centre II
Rockville Centre, NY
|
165
|
|
|
57.8
|
|
|
Q4 2015
|
|
Q3 2017
|
|
Q1 2018
|
|
Q3 2018
|
|
10.
|
|
AVA Wheaton
Wheaton, MD
|
319
|
|
|
75.6
|
|
|
Q4 2015
|
|
Q3 2017
|
|
Q2 2018
|
|
Q4 2018
|
|
11.
|
|
Avalon Dogpatch
San Francisco, CA |
326
|
|
|
203.4
|
|
|
Q4 2015
|
|
Q3 2017
|
|
Q3 2018
|
|
Q1 2019
|
|
12.
|
|
Avalon Easton
Easton, MA
|
290
|
|
|
64.0
|
|
|
Q1 2016
|
|
Q1 2017
|
|
Q1 2018
|
|
Q3 2018
|
|
13.
|
|
Avalon Somers
Somers, NY
|
152
|
|
|
45.1
|
|
|
Q2 2016
|
|
Q2 2017
|
|
Q1 2018
|
|
Q3 2018
|
|
14.
|
|
AVA North Point (7)
Cambridge, MA
|
265
|
|
|
113.9
|
|
|
Q2 2016
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
15.
|
|
Avalon Boonton
Boonton, NJ
|
350
|
|
|
91.2
|
|
|
Q3 2016
|
|
Q2 2019
|
|
Q1 2020
|
|
Q3 2020
|
|
16.
|
|
11 West 61st Street (4)
New York, NY
|
172
|
|
|
603.7
|
|
|
Q4 2016
|
|
Q2 2019
|
|
Q4 2019
|
|
Q2 2020
|
|
17
|
|
Avalon Belltown Towers (4)
Seattle, WA
|
275
|
|
|
146.9
|
|
|
Q4 2016
|
|
Q3 2019
|
|
Q4 2019
|
|
Q2 2020
|
|
18.
|
|
Avalon Public Market
Emeryville, CA
|
285
|
|
|
139.6
|
|
|
Q4 2016
|
|
Q3 2018
|
|
Q1 2019
|
|
Q3 2019
|
|
19.
|
|
Avalon Teaneck
Teaneck, NJ
|
248
|
|
|
70.4
|
|
|
Q4 2016
|
|
Q4 2018
|
|
Q2 2019
|
|
Q4 2019
|
|
20.
|
|
AVA Hollywood (4)
Hollywood, CA
|
695
|
|
|
365.1
|
|
|
Q4 2016
|
|
Q2 2019
|
|
Q2 2020
|
|
Q4 2020
|
|
21.
|
|
AVA Esterra Park
Redmond, WA
|
323
|
|
|
90.9
|
|
|
Q2 2017
|
|
Q4 2018
|
|
Q3 2019
|
|
Q1 2020
|
|
22.
|
|
Avalon at the Hingham Shipyard II
Hingham, MA
|
190
|
|
|
64.2
|
|
|
Q2 2017
|
|
Q4 2018
|
|
Q2 2019
|
|
Q4 2019
|
|
23.
|
|
Avalon Piscataway
Piscataway, NJ
|
360
|
|
|
89.2
|
|
|
Q2 2017
|
|
Q3 2018
|
|
Q2 2019
|
|
Q4 2019
|
|
|
|
Total
|
6,965
|
|
|
$
|
3,241.7
|
|
|
|
|
|
|
|
|
|
(1)
|
Projected total capitalized cost includes all capitalized costs projected to be or actually incurred to develop the respective Development Community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees. Projected total capitalized cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount.
|
(2)
|
Initial projected occupancy dates are estimates. There can be no assurance that we will pursue to completion any or all of these proposed developments.
|
(3)
|
Stabilized operations is defined as the earlier of (i) attainment of
95%
or greater physical occupancy or (ii) the
one
-year anniversary of completion of development.
|
(4)
|
Development communities containing at least 10,000 square feet of retail space include Avalon West Hollywood (32,000 square feet), Avalon Newcastle Commons I (15,000 square feet), 11 West 61st Street (67,000 square feet), Avalon Belltown Towers (11,000 square feet) and AVA Hollywood (19,000 square feet).
|
(5)
|
We are developing this project with a private development partner. We will own the rental portion of the development on floors 3 through19 and the partner will own the for-sale condominium portion of the development on floors 20 through 30. The information above represents only our portion of the project. We are providing a construction loan to the development partner, expected to be $48,800,000, which together with the partner's contributed equity is expected to fund the condominium portion of the project.
|
(6)
|
In February 2017, a fire occurred at Maplewood. See Note 1, "Organization, Basis and Presentation and Significant Accounting Policies - Legal and Other Contingencies," and Note 5, "Investments in Real Estate Entities - Casualty Gains and Losses," in the accompanying Condensed Consolidated Financial Statements for additional discussions related to the Maplewood casualty loss.
|
(7)
|
We are developing this project within an unconsolidated joint venture that was formed in July 2016, in which we own a
55.0%
interest. The projected total capitalized cost above represents the total cost for the venture.
|
|
Number of
apartment homes |
|
Total capitalized
cost (1)
($ millions) |
|
Approximate rentable area
(sq. ft.)
|
|
Total capitalized cost per sq. ft.
|
||||||||
1.
|
|
Avalon Esterra Park (2)
Redmond, WA
|
482
|
|
|
$
|
137.8
|
|
|
440,848
|
|
|
$
|
313
|
|
2.
|
|
Avalon Quincy
Quincy, MA
|
395
|
|
|
93.4
|
|
|
372,683
|
|
|
$
|
251
|
|
|
3.
|
|
Avalon Princeton
Princeton, NJ
|
280
|
|
|
94.8
|
|
|
287,386
|
|
|
$
|
330
|
|
|
4.
|
|
Avalon Hunt Valley
Hunt Valley, MD
|
332
|
|
|
74.0
|
|
|
320,968
|
|
|
$
|
231
|
|
|
|
|
Total
|
1,489
|
|
|
$
|
400.0
|
|
|
|
|
|
|
(1)
|
Total capitalized cost is as of
June 30, 2017
. We generally anticipate incurring additional costs associated with these communities that are customary for new developments.
|
(2)
|
Avalon Esterra Park contains 17,000 square feet of retail space.
|
|
|
|
|
Number of
apartment
homes
|
|
Projected total
capitalized cost (1)
($ millions)
|
|
Reconstruction
start
|
|
Estimated
reconstruction
completion
|
|
Estimated
restabilized
operations (2)
|
|||
1.
|
|
Avalon on the Alameda
San Jose, CA
|
|
305
|
|
|
$
|
6.2
|
|
|
Q1 2017
|
|
Q1 2018
|
|
Q3 2018
|
2.
|
|
Eaves Old Town Pasadena
Pasadena, CA
|
|
96
|
|
|
5.7
|
|
|
Q1 2017
|
|
Q3 2017
|
|
Q1 2018
|
|
3.
|
|
Toluca Hills Apartments by Avalon
Los Angeles, CA
|
|
1,151
|
|
|
40.0
|
|
|
Q1 2017
|
|
Q1 2020
|
|
Q3 2020
|
|
4.
|
|
Avalon at Chestnut Hill
Chestnut Hill, MA
|
|
204
|
|
|
9.2
|
|
|
Q1 2017
|
|
Q4 2017
|
|
Q2 2018
|
|
5.
|
|
Avalon Prudential Center II
Boston, MA
|
|
266
|
|
|
18.7
|
|
|
Q1 2017
|
|
Q3 2019
|
|
Q1 2020
|
|
6.
|
|
Avalon Midtown West
New York, NY
|
|
550
|
|
|
9.6
|
|
|
Q1 2017
|
|
Q4 2017
|
|
Q2 2018
|
|
7.
|
|
Avalon Willow
Mamaroneck, NY |
|
227
|
|
|
13.1
|
|
|
Q2 2017
|
|
Q1 2018
|
|
Q3 2018
|
|
8.
|
|
Avalon at Edgewater II (3)
Edgewater, NJ |
|
240
|
|
|
60.0
|
|
|
Q2 2017
|
|
Q1 2019
|
|
Q3 2019
|
|
9.
|
|
AVA Studio City II
Studio City, CA
|
|
101
|
|
|
5.8
|
|
|
Q2 2017
|
|
Q4 2017
|
|
Q2 2018
|
|
|
|
Total
|
|
3,140
|
|
|
$
|
168.3
|
|
|
|
|
|
|
|
(1)
|
Projected total capitalized cost does not include capitalized costs incurred prior to redevelopment.
|
(2)
|
Restabilized operations is defined as the earlier of (i) attainment of 95% or greater physical occupancy or (ii) the one-year anniversary of completion of redevelopment.
|
(3)
|
Redevelopment Communities includes the reconstruction of the building destroyed in the Edgewater casualty loss. Due to the nature of this reconstruction, the 240 apartment homes that we expect the new building to contain upon completion are not included in the apartment home count presented elsewhere in this Form 10-Q, and will be included upon completion.
|
Market
|
|
Number of rights
|
|
Estimated
number of homes
|
|
Projected total
capitalized cost ($ millions) (1)
|
||||
|
|
|
|
|
|
|
||||
New England
|
|
5
|
|
|
1,158
|
|
|
$
|
411
|
|
Metro NY/NJ
|
|
10
|
|
|
4,128
|
|
|
1,539
|
|
|
Mid-Atlantic
|
|
3
|
|
|
998
|
|
|
314
|
|
|
Pacific Northwest
|
|
2
|
|
|
588
|
|
|
147
|
|
|
Northern California
|
|
4
|
|
|
982
|
|
|
498
|
|
|
Southern California
|
|
1
|
|
|
475
|
|
|
245
|
|
|
Total
|
|
25
|
|
|
8,329
|
|
|
$
|
3,154
|
|
(1)
|
Projected total capitalized cost includes all capitalized costs incurred to date (if any) and projected to be incurred to develop the respective community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees.
|
•
|
our potential development, redevelopment, acquisition or disposition of communities;
|
•
|
the timing and cost of completion of apartment communities under construction, reconstruction, development or redevelopment;
|
•
|
the timing of lease-up, occupancy and stabilization of apartment communities;
|
•
|
the pursuit of land on which we are considering future development;
|
•
|
the anticipated operating performance of our communities;
|
•
|
cost, yield, revenue, NOI and earnings estimates;
|
•
|
our declaration or payment of distributions;
|
•
|
our joint venture and discretionary fund activities;
|
•
|
our policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters;
|
•
|
our qualification as a REIT under the Internal Revenue Code;
|
•
|
the real estate markets in Northern and Southern California and markets in selected states in the Mid-Atlantic, New England, Metro New York/New Jersey and Pacific Northwest regions of the United States and in general;
|
•
|
the availability of debt and equity financing;
|
•
|
interest rates;
|
•
|
general economic conditions including the potential impacts from current economic conditions;
|
•
|
trends affecting our financial condition or results of operations; and
|
•
|
the impact of legal proceedings relating to the Edgewater casualty loss and related matters, including liability to third parties resulting therefrom.
|
•
|
we may fail to secure development opportunities due to an inability to reach agreements with third-parties to obtain land at attractive prices or to obtain desired zoning and other local approvals;
|
•
|
we may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses;
|
•
|
construction costs of a community may exceed our original estimates;
|
•
|
we may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in our expected rental revenues;
|
•
|
occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond our control;
|
•
|
financing may not be available on favorable terms or at all, and our cash flows from operations and access to cost effective capital may be insufficient for the development of our pipeline which could limit our pursuit of opportunities;
|
•
|
our cash flows may be insufficient to meet required payments of principal and interest, and we may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness;
|
•
|
we may be unsuccessful in our management of Fund II, the U.S. Fund, the AC JV or the REIT vehicles that are used with each respective joint venture;
|
•
|
we may be unsuccessful in managing changes in our portfolio composition; and
|
•
|
our expectations, estimates and assumptions as of the date of this filing regarding the outcome of investigations and/or legal proceedings resulting from the Edgewater casualty loss, are subject to change.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROL AND PROCEDURES
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal controls over financial reporting.
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
(a)
Total Number of Shares
Purchased (1)
|
|
(b)
Average Price Paid
Per Share
|
|
(c)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
(d)
Maximum Dollar
Amount that May Yet
be Purchased Under
the Plans or Programs
(in thousands) (2)
|
||||||
April 1 - April 30, 2017
|
|
794
|
|
|
$
|
183.60
|
|
|
—
|
|
|
$
|
200,000
|
|
May 1 - May 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
200,000
|
|
June 1 - June 30, 2017
|
|
1,003
|
|
|
$
|
191.59
|
|
|
—
|
|
|
$
|
200,000
|
|
(1)
|
Reflects shares surrendered to the Company in connection with exercise of stock options as payment of exercise price, as well as for taxes associated with the vesting of restricted share grants.
|
(2)
|
As disclosed in our Form 10-Q for the quarter ended March 31, 2008, represents amounts outstanding under the Company's
$500,000,000
Stock Repurchase Program. There is no scheduled expiration date to this program.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Exhibit No.
|
|
|
|
Description
|
|
|
|
|
|
3(i).1
|
|
—
|
|
Articles of Amendment and Restatement of Articles of Incorporation of the Company, dated as of June 4, 1998. (Incorporated by reference to Exhibit 3(i).1 to Form 10-K of the Company filed March 1, 2007.)
|
3(i).2
|
|
—
|
|
Articles of Amendment, dated as of October 2, 1998. (Incorporated by reference to Exhibit 3(i).2 to Form 10-K of the Company filed March 1, 2007.)
|
3(i).3
|
|
—
|
|
Articles of Amendment, dated as of May 22, 2013. (Incorporated by reference to Exhibit 3(i).3 to Form 8-K of the Company filed May 22, 2013.)
|
3(ii).1
|
|
—
|
|
Amended and Restated Bylaws of the Company, as adopted by the Board of Directors on November 12, 2015. (Incorporated by reference to Exhibit 3(ii).1 to Form 10-K of the Company filed February 26, 2016.)
|
3(ii).2
|
|
—
|
|
Amendment to Amended and Restated Bylaws of the Company, as adopted by the Board of Directors on February 16, 2017. (Incorporated by reference to Exhibit 3.2 to Form 8-K of the Company filed February 21, 2017.)
|
4.1
|
|
—
|
|
Indenture for Senior Debt Securities, dated as of January 16, 1998, between the Company and State Street Bank and Trust Company, as Trustee. (Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
|
4.2
|
|
—
|
|
First Supplemental Indenture, dated as of January 20, 1998, between the Company and State Street Bank and Trust Company, as Trustee. (Incorporated by reference to Exhibit 4.2 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
|
4.3
|
|
—
|
|
Second Supplemental Indenture, dated as of July 7, 1998, between the Company and State Street Bank and Trust Company, as Trustee. (Incorporated by reference to Exhibit 4.3 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
|
4.4
|
|
—
|
|
Amended and Restated Third Supplemental Indenture, dated as of July 10, 2000, between the Company and State Street Bank and Trust Company, as Trustee. (Incorporated by reference to Exhibit 4.4 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
|
4.5
|
|
—
|
|
Fourth Supplemental Indenture, dated as of September 18, 2006, between the Company and U.S. Bank National Association, as Trustee. (Incorporated by reference to Exhibit 4.5 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
|
4.6
|
|
—
|
|
Fifth Supplemental Indenture, dated as of November 21, 2014, between the Company and the Bank of New York Mellon, as Trustee. (Incorporated by reference to Exhibit 4.1 to Form 8-K of the Company filed November 21, 2014.)
|
4.7
|
|
—
|
|
Dividend Reinvestment and Stock Purchase Plan of the Company. (Incorporated by reference to Exhibit 8.1 to Registration Statement on Form S-3 of the Company (File No. 333-87063), filed September 14, 1999.)
|
4.8
|
|
—
|
|
Amendment to the Company's Dividend Reinvestment and Stock Purchase Plan filed December 17, 1999. (Incorporated by reference to the Prospectus Supplement filed pursuant to Rule 424(b)(2) of the Securities Act of 1933 on December 17, 1999.)
|
4.9
|
|
—
|
|
Amendment to the Company's Dividend Reinvestment and Stock Purchase Plan filed March 26, 2004. (Incorporated by reference to the Prospectus Supplement filed pursuant to Rule 424(b)(3) of the Securities Act of 1933 on March 26, 2004.)
|
4.10
|
|
—
|
|
Amendment to the Company's Dividend Reinvestment and Stock Purchase Plan filed May 15, 2006. (Incorporated by reference to the Prospectus Supplement filed pursuant to Rule 424(b)(3) of the Securities Act of 1933 on May 15, 2006.)
|
10.1
|
|
—
|
|
Second Amended and Restated 2009 Equity Incentive Plan, approved by the Company’s Board of Directors on February 16, 2017, and approved by the Company’s Stockholders on May 18, 2017. (Filed herewith.)
|
12.1
|
|
—
|
|
Statements re: Computation of Ratios. (Filed herewith.)
|
31.1
|
|
—
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer). (Filed herewith.)
|
31.2
|
|
—
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer). (Filed herewith.)
|
32
|
|
—
|
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). (Furnished herewith.)
|
101
|
|
—
|
|
XBRL (Extensible Business Reporting Language). The following materials from AvalonBay Communities, Inc.'s Quarterly Report on Form 10-Q for the period ended June 30, 2017, formatted in XBRL: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows and (iv) notes to condensed consolidated financial statements.
|
|
AVALONBAY COMMUNITIES, INC.
|
|
|
|
|
|
|
|
Date:
|
August 4, 2017
|
/s/ Timothy J. Naughton
|
|
|
Timothy J. Naughton
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
|
|
Date:
|
August 4, 2017
|
/s/ Kevin P. O'Shea
|
|
|
Kevin P. O'Shea
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
SECTION 1.
|
GENERAL PURPOSE OF THE PLAN; DEFINITIONS
|
SECTION 2.
|
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
|
SECTION 3.
|
STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
|
SECTION 4.
|
ELIGIBILITY
|
SECTION 5.
|
STOCK OPTIONS
|
SECTION 6.
|
STOCK APPRECIATION RIGHTS
|
SECTION 7.
|
RESTRICTED STOCK AWARDS
|
SECTION 8.
|
RESTRICTED STOCK UNITS
|
SECTION 9.
|
UNRESTRICTED STOCK AWARDS
|
SECTION 10.
|
CASH-BASED AWARDS
|
SECTION 11.
|
PERFORMANCE SHARE AWARDS
|
SECTION 12.
|
PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
|
SECTION 13.
|
DIVIDEND EQUIVALENT RIGHTS
|
SECTION 14.
|
TRANSFERABILITY OF AWARDS
|
SECTION 15.
|
TAX WITHHOLDING
|
SECTION 16.
|
SECTION 409A AWARDS
|
SECTION 17.
|
TRANSFER, LEAVE OF ABSENCE, ETC.
|
SECTION 18.
|
AMENDMENTS AND TERMINATION
|
SECTION 19.
|
STATUS OF PLAN
|
SECTION 20.
|
GENERAL PROVISIONS
|
SECTION 21.
|
EFFECTIVE DATE OF PLAN; EXPIRATION ON MAY 15, 2027 OF RIGHT TO ISSUE NEW AWARDS UNDER PLAN; EXPIRATION ON FEBRUARY 16, 2027 OF RIGHT TO ISSUE NEW ISO'S UNDER PLAN.
|
SECTION 22.
|
GOVERNING LAW
|
|
Six Months Ended June 30, 2017
|
|
Year Ended
December 31, 2016 |
|
Year Ended
December 31, 2015 |
|
Year Ended
December 31, 2014 (1) |
|
Year Ended
December 31, 2013 (1) |
||||||||||
Income from continuing operations before cumulative effect of change in accounting principle
|
$
|
401,053
|
|
|
$
|
1,034,013
|
|
|
$
|
743,216
|
|
|
$
|
668,516
|
|
|
$
|
57,827
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in income of unconsolidated entities, net of distributions received
|
9,483
|
|
|
60,103
|
|
|
84,764
|
|
|
71,781
|
|
|
74,575
|
|
|||||
Amortization of capitalized interest (2)
|
14,475
|
|
|
27,779
|
|
|
25,150
|
|
|
22,489
|
|
|
20,157
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before fixed charges
|
$
|
425,011
|
|
|
$
|
1,121,895
|
|
|
$
|
853,130
|
|
|
$
|
762,786
|
|
|
$
|
152,559
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus) Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Portion of rents representative of the interest factor
|
$
|
3,784
|
|
|
$
|
8,483
|
|
|
$
|
7,790
|
|
|
$
|
7,504
|
|
|
$
|
7,112
|
|
Interest expense
|
99,397
|
|
|
187,510
|
|
|
175,615
|
|
|
180,618
|
|
|
172,402
|
|
|||||
Interest capitalized
|
35,100
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|
66,838
|
|
|||||
Preferred dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges (3)
|
$
|
138,281
|
|
|
$
|
274,865
|
|
|
$
|
263,239
|
|
|
$
|
258,083
|
|
|
$
|
246,352
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest capitalized
|
35,100
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|
66,838
|
|
|||||
Preferred dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Noncontrolling interest in income of a subsidiary that has not incurred fixed charges
|
—
|
|
|
—
|
|
|
—
|
|
|
14,132
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (4)
|
$
|
528,192
|
|
|
$
|
1,317,888
|
|
|
$
|
1,036,535
|
|
|
$
|
936,776
|
|
|
$
|
332,073
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio (4 divided by 3)
|
3.82
|
|
|
4.79
|
|
|
3.94
|
|
|
3.63
|
|
|
1.35
|
|
|
Six Months Ended June 30, 2017
|
|
Year Ended
December 31, 2016 |
|
Year Ended
December 31, 2015 |
|
Year Ended
December 31, 2014 (1) |
|
Year Ended
December 31, 2013 (1) |
||||||||||
Income from continuing operations before cumulative effect of change in accounting principle
|
$
|
401,053
|
|
|
$
|
1,034,013
|
|
|
$
|
743,216
|
|
|
$
|
668,516
|
|
|
$
|
57,827
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in income of unconsolidated entities, net of distributions received
|
9,483
|
|
|
60,103
|
|
|
84,764
|
|
|
71,781
|
|
|
74,575
|
|
|||||
Amortization of capitalized interest (2)
|
14,475
|
|
|
27,779
|
|
|
25,150
|
|
|
22,489
|
|
|
20,157
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before fixed charges
|
$
|
425,011
|
|
|
$
|
1,121,895
|
|
|
$
|
853,130
|
|
|
$
|
762,786
|
|
|
$
|
152,559
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus) Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Portion of rents representative of the interest factor
|
$
|
3,784
|
|
|
$
|
8,483
|
|
|
$
|
7,790
|
|
|
$
|
7,504
|
|
|
$
|
7,112
|
|
Interest expense
|
99,397
|
|
|
187,510
|
|
|
175,615
|
|
|
180,618
|
|
|
172,402
|
|
|||||
Interest capitalized
|
35,100
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|
66,838
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges (3)
|
$
|
138,281
|
|
|
$
|
274,865
|
|
|
$
|
263,239
|
|
|
$
|
258,083
|
|
|
$
|
246,352
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest capitalized
|
35,100
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|
66,838
|
|
|||||
Noncontrolling interest in income of a subsidiary that has not incurred fixed charges
|
—
|
|
|
—
|
|
|
—
|
|
|
14,132
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (4)
|
$
|
528,192
|
|
|
$
|
1,317,888
|
|
|
$
|
1,036,535
|
|
|
$
|
936,776
|
|
|
$
|
332,073
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio (4 divided by 3)
|
3.82
|
|
|
4.79
|
|
|
3.94
|
|
|
3.63
|
|
|
1.35
|
|
(1)
|
The results of operations for 2013 and 2014 have been adjusted to remove the Company's earnings classified as discontinued operations.
|
(2)
|
Represents an estimate of capitalized interest costs based on the Company’s established depreciation policy and an analysis of interest costs capitalized since 1998 (the year in which AvalonBay was formed).
|
1.
|
I have reviewed this quarterly report on Form 10-Q of AvalonBay Communities, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Timothy J. Naughton
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Timothy J. Naughton
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Chairman, Chief Executive Officer and President
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of AvalonBay Communities, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Kevin P. O'Shea
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Kevin P. O'Shea
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Chief Financial Officer
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(Principal Financial Officer)
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/s/ Timothy J. Naughton
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Timothy J. Naughton
|
|
Chairman, Chief Executive Officer and President
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|
(Principal Executive Officer)
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|
|
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/s/ Kevin P. O'Shea
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Kevin P. O'Shea
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Chief Financial Officer
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(Principal Financial Officer)
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