|
|
Maryland
|
|
|
77-0404318
|
|
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
|
||
|
incorporation or organization)
|
|
Identification No.)
|
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
||
Common Stock, par value $0.01 per share
|
|
AVB
|
|
New York Stock Exchange
|
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
PAGE
|
|
PART I - FINANCIAL INFORMATION
|
|
|
|
|
|
ITEM 1.
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2020
|
|
12/31/2019
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
|
||
Real estate:
|
|
|
|
|
|
||
Land and improvements
|
$
|
4,336,662
|
|
|
$
|
4,299,162
|
|
Buildings and improvements
|
16,818,729
|
|
|
16,668,496
|
|
||
Furniture, fixtures and equipment
|
875,453
|
|
|
829,242
|
|
||
|
22,030,844
|
|
|
21,796,900
|
|
||
Less accumulated depreciation
|
(5,327,725
|
)
|
|
(5,164,398
|
)
|
||
Net operating real estate
|
16,703,119
|
|
|
16,632,502
|
|
||
Construction in progress, including land
|
1,273,989
|
|
|
1,303,751
|
|
||
Land held for development
|
38,115
|
|
|
—
|
|
||
For-sale condominium inventory
|
365,120
|
|
|
457,809
|
|
||
Real estate assets held for sale, net
|
28,296
|
|
|
38,927
|
|
||
Total real estate, net
|
18,408,639
|
|
|
18,432,989
|
|
||
|
|
|
|
||||
Cash and cash equivalents
|
777,995
|
|
|
39,687
|
|
||
Cash in escrow
|
90,426
|
|
|
87,927
|
|
||
Resident security deposits
|
34,904
|
|
|
34,224
|
|
||
Investments in unconsolidated real estate entities
|
173,734
|
|
|
165,806
|
|
||
Deferred development costs
|
74,553
|
|
|
70,486
|
|
||
Prepaid expenses and other assets
|
168,741
|
|
|
164,971
|
|
||
Right of use lease assets
|
162,344
|
|
|
124,961
|
|
||
Total assets
|
$
|
19,891,336
|
|
|
$
|
19,121,051
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Unsecured notes, net
|
$
|
6,404,432
|
|
|
$
|
6,358,648
|
|
Variable rate unsecured credit facility
|
750,000
|
|
|
—
|
|
||
Mortgage notes payable, net
|
937,025
|
|
|
937,642
|
|
||
Dividends payable
|
225,714
|
|
|
215,414
|
|
||
Payables for construction
|
92,597
|
|
|
92,135
|
|
||
Accrued expenses and other liabilities
|
257,293
|
|
|
274,013
|
|
||
Lease liabilities
|
185,025
|
|
|
140,468
|
|
||
Accrued interest payable
|
61,931
|
|
|
47,154
|
|
||
Resident security deposits
|
61,717
|
|
|
61,752
|
|
||
Liabilities related to real estate assets held for sale
|
360
|
|
|
375
|
|
||
Total liabilities
|
8,976,094
|
|
|
8,127,601
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
2,700
|
|
|
3,252
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
|
|
||
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at March 31, 2020 and December 31, 2019; zero shares issued and outstanding at March 31, 2020 and December 31, 2019
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 280,000,000 shares authorized at March 31, 2020 and December 31, 2019; 140,733,340 and 140,643,962 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
|
1,407
|
|
|
1,406
|
|
||
Additional paid-in capital
|
10,732,022
|
|
|
10,736,733
|
|
||
Accumulated earnings less dividends
|
225,656
|
|
|
282,913
|
|
||
Accumulated other comprehensive loss
|
(47,157
|
)
|
|
(31,503
|
)
|
||
Total stockholders' equity
|
10,911,928
|
|
|
10,989,549
|
|
||
Noncontrolling interests
|
614
|
|
|
649
|
|
||
Total equity
|
10,912,542
|
|
|
10,990,198
|
|
||
Total liabilities and equity
|
$
|
19,891,336
|
|
|
$
|
19,121,051
|
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
Revenue:
|
|
|
|
|
|
||
Rental and other income
|
$
|
600,644
|
|
|
$
|
565,045
|
|
Management, development and other fees
|
1,007
|
|
|
1,139
|
|
||
Total revenue
|
601,651
|
|
|
566,184
|
|
||
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
||
Operating expenses, excluding property taxes
|
131,993
|
|
|
123,455
|
|
||
Property taxes
|
67,026
|
|
|
61,329
|
|
||
Interest expense, net
|
55,914
|
|
|
47,892
|
|
||
Loss on extinguishment of debt, net
|
9,170
|
|
|
280
|
|
||
Depreciation expense
|
177,911
|
|
|
162,057
|
|
||
General and administrative expense
|
17,320
|
|
|
13,706
|
|
||
Expensed transaction, development and other pursuit costs, net of recoveries
|
3,334
|
|
|
622
|
|
||
Total expenses
|
462,668
|
|
|
409,341
|
|
||
|
|
|
|
||||
Equity in income (loss) of unconsolidated real estate entities
|
1,175
|
|
|
(1,060
|
)
|
||
Gain on sale of communities
|
24,436
|
|
|
14,835
|
|
||
Gain on other real estate transactions, net
|
43
|
|
|
267
|
|
||
Gain on for-sale condominiums, net of marketing and administrative costs
|
3,460
|
|
|
(473
|
)
|
||
|
|
|
|
||||
Income before income taxes
|
168,097
|
|
|
170,412
|
|
||
Income tax expense (benefit)
|
91
|
|
|
(6
|
)
|
||
|
|
|
|
||||
Net income
|
168,006
|
|
|
170,418
|
|
||
Net income attributable to noncontrolling interests
|
(35
|
)
|
|
(52
|
)
|
||
|
|
|
|
||||
Net income attributable to common stockholders
|
$
|
167,971
|
|
|
$
|
170,366
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
||
Loss on cash flow hedges
|
(17,603
|
)
|
|
(7,231
|
)
|
||
Cash flow hedge losses reclassified to earnings
|
1,949
|
|
|
1,468
|
|
||
Comprehensive income
|
$
|
152,317
|
|
|
$
|
164,603
|
|
|
|
|
|
||||
Earnings per common share - basic:
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
1.19
|
|
|
$
|
1.23
|
|
|
|
|
|
||||
Earnings per common share - diluted:
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
1.19
|
|
|
$
|
1.23
|
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
168,006
|
|
|
$
|
170,418
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
||||
Depreciation expense
|
177,911
|
|
|
162,057
|
|
||
Amortization of deferred financing costs
|
1,882
|
|
|
1,692
|
|
||
Amortization of debt discount
|
411
|
|
|
394
|
|
||
Loss on extinguishment of debt, net
|
9,170
|
|
|
280
|
|
||
Amortization of stock-based compensation
|
5,338
|
|
|
5,621
|
|
||
Equity in loss of, and return on, unconsolidated real estate entities and noncontrolling interests, net of eliminations
|
1,871
|
|
|
5,517
|
|
||
Abandonment of development pursuits
|
1,988
|
|
|
208
|
|
||
Cash flow hedge losses reclassified to earnings
|
1,949
|
|
|
1,468
|
|
||
Gain on sale of real estate assets
|
(24,479
|
)
|
|
(15,102
|
)
|
||
Gain on for-sale condominiums
|
(4,903
|
)
|
|
—
|
|
||
Increase in resident security deposits, prepaid expenses and other assets
|
(1,239
|
)
|
|
(3,087
|
)
|
||
Increase in accrued expenses, other liabilities and accrued interest payable
|
3,799
|
|
|
32,320
|
|
||
Net cash provided by operating activities
|
341,704
|
|
|
361,786
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Development/redevelopment of real estate assets including land acquisitions and deferred development costs
|
(245,789
|
)
|
|
(278,075
|
)
|
||
Acquisition of real estate assets, including partnership interest
|
—
|
|
|
(91,548
|
)
|
||
Capital expenditures - existing real estate assets
|
(32,922
|
)
|
|
(20,069
|
)
|
||
Capital expenditures - non-real estate assets
|
(10,663
|
)
|
|
(488
|
)
|
||
Increase in payables for construction
|
462
|
|
|
5,444
|
|
||
Proceeds from sale of real estate, net of selling costs
|
63,073
|
|
|
71,455
|
|
||
Proceeds from the sale of for-sale condominiums, net of selling costs
|
98,790
|
|
|
—
|
|
||
Mortgage note receivable lending
|
(179
|
)
|
|
(159
|
)
|
||
Mortgage note receivable payments
|
960
|
|
|
978
|
|
||
Investments in unconsolidated real estate entities
|
(9,799
|
)
|
|
(724
|
)
|
||
Net cash used in investing activities
|
(136,067
|
)
|
|
(313,186
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Issuance of common stock, net
|
125
|
|
|
155,561
|
|
||
Dividends paid
|
(213,671
|
)
|
|
(203,499
|
)
|
||
Net borrowings under unsecured credit facility
|
750,000
|
|
|
—
|
|
||
Issuance of mortgage notes payable
|
51,000
|
|
|
—
|
|
||
Repayments of mortgage notes payable, including prepayment penalties
|
(51,484
|
)
|
|
(1,668
|
)
|
||
Issuance of unsecured notes
|
699,252
|
|
|
—
|
|
||
Repayment of unsecured notes, including prepayment penalties
|
(658,655
|
)
|
|
—
|
|
||
Payment of deferred financing costs
|
(5,988
|
)
|
|
(6,841
|
)
|
||
Payment for termination of forward interest rate swaps
|
(20,314
|
)
|
|
—
|
|
||
Payment to noncontrolling interest
|
(35
|
)
|
|
—
|
|
||
Payments related to tax withholding for share-based compensation
|
(14,346
|
)
|
|
(14,206
|
)
|
||
Distributions to DownREIT partnership unitholders
|
(12
|
)
|
|
(11
|
)
|
||
Distributions to joint venture and profit-sharing partners
|
(102
|
)
|
|
(113
|
)
|
||
Preferred interest obligation redemption and dividends
|
(600
|
)
|
|
(480
|
)
|
||
Net cash provided by (used in) financing activities
|
535,170
|
|
|
(71,257
|
)
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
740,807
|
|
|
(22,657
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents and restricted cash, beginning of period
|
127,614
|
|
|
217,864
|
|
||
Cash and cash equivalents and restricted cash, end of period
|
$
|
868,421
|
|
|
$
|
195,207
|
|
|
|
|
|
||||
Cash paid during the period for interest, net of amount capitalized
|
$
|
36,895
|
|
|
$
|
25,513
|
|
|
|
For the three months ended
|
||||||
|
|
3/31/2020
|
|
3/31/2019
|
||||
Cash and cash equivalents
|
|
$
|
777,995
|
|
|
$
|
62,999
|
|
Cash in escrow
|
|
90,426
|
|
|
132,208
|
|
||
Cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows
|
|
$
|
868,421
|
|
|
$
|
195,207
|
|
•
|
As described in Note 4, "Equity," 161,229 shares of common stock were issued as part of the Company's stock-based compensation plans, of which 96,317 shares related to the conversion of performance awards to restricted shares, and the remaining 64,912 shares valued at $14,640,000 were issued in connection with new stock grants; 529 shares valued at $112,000 were issued through the Company's dividend reinvestment plan; 70,351 shares valued at $14,346,000 were withheld to satisfy employees' tax withholding and other liabilities; and 3,931 restricted shares with an aggregate value of $660,000 previously issued in connection with employee compensation were canceled upon forfeiture.
|
•
|
Common stock dividends declared but not paid totaled $224,079,000.
|
•
|
The Company recorded a decrease of $471,000 in redeemable noncontrolling interest with a corresponding increase 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 11, "Fair Value."
|
•
|
The Company recorded an increase to accrued expenses and other liabilities of $3,302,000, an increase in prepaid expenses and other assets of $22,000 and a corresponding adjustment to accumulated other comprehensive loss, and reclassified $1,949,000 of cash flow hedge losses from other comprehensive income (loss) to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.
|
•
|
The Company recorded $46,875,000 of lease liabilities and offsetting right of use lease assets related to the execution of two new office leases.
|
•
|
The Company issued 148,004 shares of common stock as part of the Company's stock-based compensation plans, of which 73,072 shares related to the conversion of performance awards to restricted shares, and the remaining 74,932 shares valued at $14,666,000 were issued in connection with new stock grants; 602 shares valued at $108,000 were issued through the Company's dividend reinvestment plan; 75,195 shares valued at $14,206,000 were withheld to satisfy employees' tax withholding and other liabilities; and 616 restricted shares with an aggregate value of $102,000 previously issued in connection with employee compensation were canceled upon forfeiture.
|
•
|
Common stock dividends declared but not paid totaled $212,166,000.
|
•
|
The Company recorded an increase of $224,000 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 an increase to other liabilities of $7,231,000, and a corresponding adjustment to accumulated other comprehensive loss, and reclassified $1,468,000 of cash flow hedge losses from other comprehensive income (loss) to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.
|
•
|
The Company recorded $122,276,000 of lease liabilities and offsetting right of use lease assets for its ground and office leases, upon the adoption of ASU 2016-02, Leases, as of January 1, 2019.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
Basic and diluted shares outstanding
|
|
|
|
|
|
||
Weighted average common shares - basic
|
140,376,996
|
|
|
138,331,248
|
|
||
Weighted average DownREIT units outstanding
|
7,500
|
|
|
7,500
|
|
||
Effect of dilutive securities
|
393,377
|
|
|
493,453
|
|
||
Weighted average common shares - diluted
|
140,777,873
|
|
|
138,832,201
|
|
||
|
|
|
|
||||
Calculation of Earnings per Share - basic
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
167,971
|
|
|
$
|
170,366
|
|
Net income allocated to unvested restricted shares
|
(427
|
)
|
|
(501
|
)
|
||
Net income attributable to common stockholders, adjusted
|
$
|
167,544
|
|
|
$
|
169,865
|
|
|
|
|
|
||||
Weighted average common shares - basic
|
140,376,996
|
|
|
138,331,248
|
|
||
|
|
|
|
||||
Earnings per common share - basic
|
$
|
1.19
|
|
|
$
|
1.23
|
|
|
|
|
|
||||
Calculation of Earnings per Share - diluted
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
167,971
|
|
|
$
|
170,366
|
|
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations
|
12
|
|
|
11
|
|
||
Adjusted net income attributable to common stockholders
|
$
|
167,983
|
|
|
$
|
170,377
|
|
|
|
|
|
||||
Weighted average common shares - diluted
|
140,777,873
|
|
|
138,832,201
|
|
||
|
|
|
|
||||
Earnings per common share - diluted
|
$
|
1.19
|
|
|
$
|
1.23
|
|
•
|
lessor of residential and retail space within its apartment communities; and
|
•
|
lessee under (i) ground leases for land underlying current operating or development communities and (ii) office leases for its corporate headquarters and regional offices.
|
|
|
For the three months ended
|
||||||||||||||||||
|
|
Established
Communities |
|
Other
Stabilized Communities |
|
Development/
Redevelopment Communities (1) |
|
Non-
allocated (2) |
|
Total
|
||||||||||
For the period ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Management, development and other fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,007
|
|
|
$
|
1,007
|
|
Rental and non-rental related income (3)
|
|
1,609
|
|
|
476
|
|
|
232
|
|
|
—
|
|
|
2,317
|
|
|||||
Total non-lease revenue (4)
|
|
1,609
|
|
|
476
|
|
|
232
|
|
|
1,007
|
|
|
3,324
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease income (5)
|
|
546,347
|
|
|
35,015
|
|
|
15,541
|
|
|
—
|
|
|
596,903
|
|
|||||
Business interruption insurance proceeds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
547,956
|
|
|
$
|
35,491
|
|
|
$
|
15,773
|
|
|
$
|
1,007
|
|
|
$
|
600,227
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the period ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Management, development and other fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,139
|
|
|
$
|
1,139
|
|
Rental and non-rental related income (3)
|
|
1,833
|
|
|
481
|
|
|
16
|
|
|
—
|
|
|
2,330
|
|
|||||
Total non-lease revenue (4)
|
|
1,833
|
|
|
481
|
|
|
16
|
|
|
1,139
|
|
|
3,469
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease income (5)
|
|
529,824
|
|
|
21,546
|
|
|
533
|
|
|
—
|
|
|
551,903
|
|
|||||
Business interruption insurance proceeds
|
|
172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
531,829
|
|
|
$
|
22,027
|
|
|
$
|
549
|
|
|
$
|
1,139
|
|
|
$
|
555,544
|
|
(1)
|
The Company had no Redevelopment Communities for the three months ended March 31, 2020 and 2019.
|
(2)
|
Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment.
|
(3)
|
Amounts include revenue streams related to leasing activities that are not considered components of a lease, including but not limited to, apartment hold fees and application fees, as well as revenue streams not related to leasing activities, including but not limited to, vendor revenue sharing, building advertising, vending and dry cleaning revenue.
|
(4)
|
Represents all revenue accounted for under ASU 2014-09.
|
(5)
|
Amounts include all revenue streams derived from residential and retail rental income and other lease income, which are accounted for under ASC 842.
|
|
3/31/2020
|
|
12/31/2019
|
||||
|
|
|
|
||||
Fixed rate unsecured notes (1)
|
$
|
5,900,000
|
|
|
$
|
5,850,000
|
|
Variable rate unsecured notes (1)
|
300,000
|
|
|
300,000
|
|
||
Term Loans (1)
|
250,000
|
|
|
250,000
|
|
||
Fixed rate mortgage notes payable - conventional and tax-exempt (2)
|
478,738
|
|
|
479,221
|
|
||
Variable rate mortgage notes payable - conventional and tax-exempt (2)
|
476,150
|
|
|
476,150
|
|
||
Total mortgage notes payable and unsecured notes and Term Loans
|
7,404,888
|
|
|
7,355,371
|
|
||
Credit Facility
|
750,000
|
|
|
—
|
|
||
Total mortgage notes payable, unsecured notes, Term Loans and Credit Facility
|
$
|
8,154,888
|
|
|
$
|
7,355,371
|
|
(1)
|
Balances at March 31, 2020 and December 31, 2019 exclude $8,880 and $8,610, respectively, of debt discount, and $36,688 and $32,742, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Condensed Consolidated Balance Sheets.
|
(2)
|
Balances at March 31, 2020 and December 31, 2019 exclude $14,671 and $14,464, respectively, of debt discount, and $3,192 and $3,265, respectively, of deferred financing costs, as reflected in mortgage notes payable, net on the accompanying Condensed Consolidated Balance Sheets.
|
•
|
In February 2020, the Company issued $700,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $694,701,000. The notes mature in March 2030 and were issued at a 2.30% interest rate.
|
•
|
In February 2020, the Company refinanced the secured borrowing for Avalon San Bruno III. The secured borrowing had a fixed interest rate of 3.08% and was refinanced for a principal balance of $51,000,000, with a fixed interest rate of 2.38% and maturity date of March 2027.
|
•
|
In March 2020, the Company repaid (i) $400,000,000 principal amount of its 3.625% unsecured notes in advance of the October 2020 scheduled maturity and (ii) $250,000,000 principal amount of its 3.95% unsecured notes in advance of the January 2021 scheduled maturity. In conjunction with these repayments, the Company recognized a loss on debt extinguishment of $9,170,000 for prepayment penalties and the non-cash write-off of unamortized deferred financing costs.
|
Year
|
|
Secured notes
payments
|
|
Secured notes maturities
|
|
Unsecured notes maturities
|
|
Stated interest rate of unsecured notes
|
|||||||
2020
|
|
$
|
8,124
|
|
|
$
|
67,904
|
|
|
$
|
—
|
|
|
N/A
|
|
2021
|
|
9,304
|
|
|
27,844
|
|
|
—
|
|
|
N/A
|
|
|||
|
|
|
|
|
|
300,000
|
|
|
LIBOR + 0.43%
|
|
|||||
2022
|
|
9,918
|
|
|
—
|
|
|
450,000
|
|
|
2.950
|
%
|
|||
|
|
|
|
|
|
100,000
|
|
|
LIBOR + 0.90%
|
|
|||||
2023
|
|
10,739
|
|
|
—
|
|
|
350,000
|
|
|
4.200
|
%
|
|||
|
|
|
|
|
|
250,000
|
|
|
2.850
|
%
|
|||||
2024
|
|
11,577
|
|
|
—
|
|
|
300,000
|
|
|
3.500
|
%
|
|||
|
|
|
|
|
|
150,000
|
|
|
LIBOR + 0.85%
|
|
|||||
2025
|
|
12,508
|
|
|
—
|
|
|
525,000
|
|
|
3.450
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
3.500
|
%
|
|||||
2026
|
|
13,545
|
|
|
—
|
|
|
475,000
|
|
|
2.950
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
2.900
|
%
|
|||||
2027
|
|
14,980
|
|
|
236,100
|
|
|
400,000
|
|
|
3.350
|
%
|
|||
2028
|
|
20,607
|
|
|
—
|
|
|
450,000
|
|
|
3.200
|
%
|
|||
2029
|
|
11,742
|
|
|
66,250
|
|
|
450,000
|
|
|
3.300
|
%
|
|||
Thereafter
|
|
189,162
|
|
|
244,584
|
|
|
700,000
|
|
|
2.300
|
%
|
|||
|
|
|
|
|
|
350,000
|
|
|
3.900
|
%
|
|||||
|
|
|
|
|
|
300,000
|
|
|
4.150
|
%
|
|||||
|
|
|
|
|
|
300,000
|
|
|
4.350
|
%
|
|||||
|
|
$
|
312,206
|
|
|
$
|
642,682
|
|
|
$
|
6,450,000
|
|
|
|
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
earnings
less
dividends
|
|
Accumulated
other
comprehensive
loss
|
|
Total AvalonBay stockholder's equity
|
|
Noncontrolling interests
|
|
Total
equity
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2019
|
$
|
1,406
|
|
|
$
|
10,736,733
|
|
|
$
|
282,913
|
|
|
$
|
(31,503
|
)
|
|
$
|
10,989,549
|
|
|
$
|
649
|
|
|
$
|
10,990,198
|
|
Net income attributable to common stockholders
|
—
|
|
|
—
|
|
|
167,971
|
|
|
—
|
|
|
167,971
|
|
|
—
|
|
|
167,971
|
|
|||||||
Loss on cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,603
|
)
|
|
(17,603
|
)
|
|
—
|
|
|
(17,603
|
)
|
|||||||
Cash flow hedge losses reclassified to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,949
|
|
|
1,949
|
|
|
—
|
|
|
1,949
|
|
|||||||
Change in redemption value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
471
|
|
|
—
|
|
|
471
|
|
|
—
|
|
|
471
|
|
|||||||
Noncontrolling interests income allocation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|||||||
Dividends declared to common stockholders ($1.59 per share)
|
—
|
|
|
—
|
|
|
(224,083
|
)
|
|
—
|
|
|
(224,083
|
)
|
|
—
|
|
|
(224,083
|
)
|
|||||||
Issuance of common stock, net of withholdings
|
1
|
|
|
(12,492
|
)
|
|
(1,616
|
)
|
|
—
|
|
|
(14,107
|
)
|
|
—
|
|
|
(14,107
|
)
|
|||||||
Amortization of deferred compensation
|
—
|
|
|
7,781
|
|
|
—
|
|
|
—
|
|
|
7,781
|
|
|
—
|
|
|
7,781
|
|
|||||||
Balance at March 31, 2020
|
$
|
1,407
|
|
|
$
|
10,732,022
|
|
|
$
|
225,656
|
|
|
$
|
(47,157
|
)
|
|
$
|
10,911,928
|
|
|
$
|
614
|
|
|
$
|
10,912,542
|
|
|
Common
stock |
|
Additional
paid-in capital |
|
Accumulated
earnings less dividends |
|
Accumulated
other comprehensive loss |
|
Total
equity |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018
|
$
|
1,385
|
|
|
$
|
10,306,588
|
|
|
$
|
350,777
|
|
|
$
|
(26,144
|
)
|
|
$
|
10,632,606
|
|
Net income attributable to common stockholders
|
—
|
|
|
—
|
|
|
170,366
|
|
|
—
|
|
|
170,366
|
|
|||||
Loss on cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,231
|
)
|
|
(7,231
|
)
|
|||||
Cash flow hedge losses reclassified to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,468
|
|
|
1,468
|
|
|||||
Change in redemption value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(224
|
)
|
|
—
|
|
|
(224
|
)
|
|||||
Dividends declared to common stockholders ($1.52 per share)
|
—
|
|
|
—
|
|
|
(212,166
|
)
|
|
—
|
|
|
(212,166
|
)
|
|||||
Issuance of common stock, net of withholdings
|
9
|
|
|
143,202
|
|
|
(1,892
|
)
|
|
—
|
|
|
141,319
|
|
|||||
Amortization of deferred compensation
|
—
|
|
|
7,861
|
|
|
—
|
|
|
—
|
|
|
7,861
|
|
|||||
Balance at March 31, 2019
|
$
|
1,394
|
|
|
$
|
10,457,651
|
|
|
$
|
306,861
|
|
|
$
|
(31,907
|
)
|
|
$
|
10,733,999
|
|
i.
|
issued 1,902 shares of common stock in connection with stock options exercised;
|
ii.
|
issued 529 common shares through the Company's dividend reinvestment plan;
|
iii.
|
issued 161,229 common shares in connection with restricted stock grants and the conversion of performance awards to restricted shares;
|
iv.
|
withheld 70,351 common shares to satisfy employees' tax withholding and other liabilities; and
|
v.
|
canceled 3,931 common shares of restricted stock upon forfeiture.
|
|
3/31/2020
|
|
12/31/2019
|
||||
|
(unaudited)
|
|
|
||||
Assets:
|
|
|
|
|
|
||
Real estate, net
|
$
|
1,205,970
|
|
|
$
|
1,204,470
|
|
Other assets
|
199,312
|
|
|
196,488
|
|
||
Total assets
|
$
|
1,405,282
|
|
|
$
|
1,400,958
|
|
|
|
|
|
||||
Liabilities and partners' capital:
|
|
|
|
|
|
||
Mortgage notes payable, net (1)
|
$
|
781,234
|
|
|
$
|
782,257
|
|
Other liabilities
|
158,988
|
|
|
157,379
|
|
||
Partners' capital
|
465,060
|
|
|
461,322
|
|
||
Total liabilities and partners' capital
|
$
|
1,405,282
|
|
|
$
|
1,400,958
|
|
(1)
|
The Company has not guaranteed the debt, nor does the Company have any obligation to fund this debt should the unconsolidated entity be unable to do so.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
|
(unaudited)
|
||||||
Rental and other income
|
$
|
33,072
|
|
|
$
|
35,255
|
|
Operating and other expenses
|
(12,181
|
)
|
|
(14,204
|
)
|
||
Interest expense, net
|
(8,056
|
)
|
|
(8,554
|
)
|
||
Depreciation expense
|
(8,689
|
)
|
|
(21,696
|
)
|
||
Net income (loss)
|
$
|
4,146
|
|
|
$
|
(9,199
|
)
|
|
|
|
|
||||
Company's share of net income (loss)
|
$
|
1,705
|
|
|
$
|
(528
|
)
|
Amortization of excess investment and other
|
(530
|
)
|
|
(532
|
)
|
||
Equity in income (loss) from unconsolidated real estate investments
|
$
|
1,175
|
|
|
$
|
(1,060
|
)
|
•
|
In January 2020, the Company sold Avalon Shelton, located in Shelton, CT, containing 250 apartment homes for $64,750,000. The Company's gain on disposition was $24,413,000, reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
Net income
|
$
|
168,006
|
|
|
$
|
170,418
|
|
Indirect operating expenses, net of corporate income
|
22,799
|
|
|
19,722
|
|
||
Expensed transaction, development and other pursuit costs, net of recoveries
|
3,334
|
|
|
622
|
|
||
Interest expense, net
|
55,914
|
|
|
47,892
|
|
||
Loss on extinguishment of debt, net
|
9,170
|
|
|
280
|
|
||
General and administrative expense
|
17,320
|
|
|
13,706
|
|
||
Equity in (income) loss of unconsolidated real estate entities
|
(1,175
|
)
|
|
1,060
|
|
||
Depreciation expense
|
177,911
|
|
|
162,057
|
|
||
Income tax expense (benefit)
|
91
|
|
|
(6
|
)
|
||
Gain on sale of communities
|
(24,436
|
)
|
|
(14,835
|
)
|
||
Gain on other real estate transactions, net
|
(43
|
)
|
|
(267
|
)
|
||
Gain on for-sale condominiums, net of marketing and administrative costs
|
(3,460
|
)
|
|
473
|
|
||
Net operating income from real estate assets sold or held for sale
|
(896
|
)
|
|
(6,205
|
)
|
||
Net operating income
|
$
|
424,535
|
|
|
$
|
394,917
|
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
Rental income from real estate assets sold or held for sale
|
$
|
1,424
|
|
|
$
|
10,640
|
|
Operating expenses from real estate assets sold or held for sale
|
(528
|
)
|
|
(4,435
|
)
|
||
Net operating income from real estate assets sold or held for sale
|
$
|
896
|
|
|
$
|
6,205
|
|
|
For the three months ended
|
|
|
||||||||
|
Total
revenue |
|
NOI
|
|
Gross real estate (1)
|
||||||
For the period ended March 31, 2020
|
|
|
|
||||||||
Established
|
|
|
|
|
|
|
|
|
|||
New England
|
$
|
81,669
|
|
|
$
|
53,680
|
|
|
$
|
2,765,270
|
|
Metro NY/NJ
|
120,731
|
|
|
84,484
|
|
|
4,343,033
|
|
|||
Mid-Atlantic
|
91,717
|
|
|
66,309
|
|
|
3,545,582
|
|
|||
Pacific Northwest
|
28,736
|
|
|
20,838
|
|
|
991,802
|
|
|||
Northern California
|
104,360
|
|
|
80,451
|
|
|
3,268,787
|
|
|||
Southern California
|
114,810
|
|
|
82,455
|
|
|
4,142,235
|
|
|||
Expansion Markets
|
5,933
|
|
|
3,428
|
|
|
320,415
|
|
|||
Total Established
|
547,956
|
|
|
391,645
|
|
|
19,377,124
|
|
|||
|
|
|
|
|
|
||||||
Other Stabilized
|
35,491
|
|
|
23,496
|
|
|
1,591,348
|
|
|||
Development / Redevelopment (2)
|
15,773
|
|
|
9,394
|
|
|
2,220,386
|
|
|||
Land Held for Development
|
N/A
|
|
|
N/A
|
|
|
38,115
|
|
|||
Non-allocated (3)
|
1,007
|
|
|
N/A
|
|
|
481,095
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
600,227
|
|
|
$
|
424,535
|
|
|
$
|
23,708,068
|
|
|
|
|
|
|
|
||||||
For the period ended March 31, 2019
|
|
|
|
||||||||
Established
|
|
|
|
|
|
|
|
|
|||
New England
|
$
|
78,688
|
|
|
$
|
52,083
|
|
|
$
|
2,717,130
|
|
Metro NY/NJ
|
118,377
|
|
|
82,984
|
|
|
4,311,202
|
|
|||
Mid-Atlantic
|
88,370
|
|
|
62,916
|
|
|
3,507,734
|
|
|||
Pacific Northwest
|
27,802
|
|
|
20,210
|
|
|
986,190
|
|
|||
Northern California
|
101,261
|
|
|
78,715
|
|
|
3,248,903
|
|
|||
Southern California
|
111,466
|
|
|
79,916
|
|
|
4,092,527
|
|
|||
Expansion Markets
|
5,865
|
|
|
3,513
|
|
|
319,558
|
|
|||
Total Established
|
531,829
|
|
|
380,337
|
|
|
19,183,244
|
|
|||
|
|
|
|
|
|
||||||
Other Stabilized
|
22,027
|
|
|
14,729
|
|
|
1,171,127
|
|
|||
Development / Redevelopment (2)
|
549
|
|
|
(149
|
)
|
|
1,130,302
|
|
|||
Land Held for Development
|
N/A
|
|
|
N/A
|
|
|
104,963
|
|
|||
Non-allocated (3)
|
1,139
|
|
|
N/A
|
|
|
672,727
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
555,544
|
|
|
$
|
394,917
|
|
|
$
|
22,262,363
|
|
(1)
|
Does not include gross real estate held for sale of $41,866 as of March 31, 2020 and gross real estate either sold or classified as held for sale subsequent to March 31, 2019 of $285,943.
|
(2)
|
The Company had no Redevelopment Communities for the three months ended March 31, 2020 and 2019.
|
(3)
|
Revenue represents third-party management, accounting, and developer fees and miscellaneous income which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."
|
|
|
2009 Plan
shares
|
|
Weighted average
exercise price
per share
|
|||
Options Outstanding, December 31, 2019
|
|
14,408
|
|
|
$
|
124.05
|
|
Exercised
|
|
(1,902
|
)
|
|
89.17
|
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Options Outstanding, March 31, 2020
|
|
12,506
|
|
|
$
|
129.35
|
|
Options Exercisable, March 31, 2020
|
|
12,506
|
|
|
$
|
129.35
|
|
|
|
Performance awards
|
|
Weighted average grant date fair value per award
|
|||
Outstanding at December 31, 2019
|
|
253,432
|
|
|
$
|
176.27
|
|
Granted (1)
|
|
76,164
|
|
|
238.86
|
|
|
Change in awards based on performance (2)
|
|
18,112
|
|
|
177.26
|
|
|
Converted to restricted stock
|
|
(96,317
|
)
|
|
177.26
|
|
|
Forfeited
|
|
(8,004
|
)
|
|
183.45
|
|
|
Outstanding at March 31, 2020
|
|
243,387
|
|
|
$
|
195.31
|
|
(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 38,314 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 37,850 performance awards.
|
(2)
|
Represents the change in the number of performance awards earned based on performance achievement for the performance period.
|
|
|
2020
|
Dividend yield
|
|
2.8%
|
Estimated volatility over the life of the plan (1)
|
|
11.1% - 15.5%
|
Risk free rate
|
|
1.45% - 1.62%
|
Estimated performance award value based on total shareholder return measure
|
|
$254.72
|
(1)
|
Estimated volatility of 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, 2019
|
|
148,326
|
|
|
$
|
181.29
|
|
|
163,111
|
|
Granted - restricted stock shares
|
|
64,912
|
|
|
225.54
|
|
|
96,317
|
|
|
Vested - restricted stock shares
|
|
(76,012
|
)
|
|
178.29
|
|
|
(109,758
|
)
|
|
Forfeited
|
|
(3,337
|
)
|
|
191.25
|
|
|
(594
|
)
|
|
Outstanding at March 31, 2020
|
|
133,889
|
|
|
$
|
204.20
|
|
|
149,076
|
|
|
Non-designated
Hedges Interest Rate Caps |
|
Cash Flow
Hedges
Interest Rate Swaps
|
||||
|
|
|
|
||||
Notional balance
|
$
|
442,611
|
|
|
$
|
150,000
|
|
Weighted average interest rate (1)
|
3.4
|
%
|
|
N/A
|
|
||
Weighted average swapped/capped interest rate
|
6.5
|
%
|
|
0.9
|
%
|
||
Earliest maturity date
|
January 2021
|
|
|
September 2020
|
|
||
Latest maturity date
|
November 2021
|
|
|
September 2020
|
|
(1)
|
For interest rate caps, represents the weighted average interest rate on the hedged debt.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
|
|
|
|
||||
Cash flow hedge losses reclassified to earnings
|
$
|
1,949
|
|
|
$
|
1,468
|
|
|
|
3/31/2020
|
||||||||||||||
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)
|
||||||||
|
|
|
|
|||||||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Caps
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
Interest Rate Swaps - Assets
|
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Interest Rate Swaps - Liabilities
|
|
(3,302
|
)
|
|
—
|
|
|
(3,302
|
)
|
|
—
|
|
||||
Puts
|
|
(123
|
)
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
||||
DownREIT units
|
|
(1,104
|
)
|
|
(1,104
|
)
|
|
—
|
|
|
—
|
|
||||
Indebtedness
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate unsecured notes
|
|
(6,030,476
|
)
|
|
(6,030,476
|
)
|
|
—
|
|
|
—
|
|
||||
Secured notes and variable rate unsecured indebtedness
|
|
(2,162,216
|
)
|
|
—
|
|
|
(2,162,216
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(8,197,190
|
)
|
|
$
|
(6,031,580
|
)
|
|
$
|
(2,165,487
|
)
|
|
$
|
(123
|
)
|
|
|
12/31/2019
|
||||||||||||||
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)
|
||||||||
|
|
|
|
|||||||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps - Assets
|
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
388
|
|
|
$
|
—
|
|
Interest Rate Swaps - Liabilities
|
|
(6,379
|
)
|
|
—
|
|
|
(6,379
|
)
|
|
—
|
|
||||
Puts
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
||||
DownREIT units
|
|
(1,573
|
)
|
|
(1,573
|
)
|
|
—
|
|
|
—
|
|
||||
Indebtedness
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate unsecured notes
|
|
(6,197,771
|
)
|
|
(6,197,771
|
)
|
|
—
|
|
|
—
|
|
||||
Secured notes and variable rate unsecured indebtedness
|
|
(1,398,147
|
)
|
|
—
|
|
|
(1,398,147
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(7,603,688
|
)
|
|
$
|
(6,199,344
|
)
|
|
$
|
(1,404,138
|
)
|
|
$
|
(206
|
)
|
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 March 31, 2020 was $167,971,000, a decrease of $2,395,000, or 1.4%, from the prior year period. The decrease is primarily due to increases in depreciation expense, loss on extinguishment of debt and interest expense in the current year period. These amounts were partially offset by an increase in NOI from communities across the portfolio, as well as increases in gains on real estate dispositions in the current year period.
|
•
|
Established Communities NOI for the three months ended March 31, 2020 was $391,645,000, an increase of $11,308,000, or 3.0%, over the prior year period.
|
•
|
19 communities under construction, which are expected to contain 6,198 apartment homes with a projected total capitalized cost of $2,378,000,000.
|
•
|
Land or rights to land on which we expect to develop an additional 28 apartment communities that, if developed as expected, will contain 9,720 apartment homes, and will be developed for an aggregate total capitalized cost of $4,087,000,000.
|
•
|
Established Communities (also known as Same Store Communities) are consolidated communities in the markets where we have a significant presence (New England, New York/New Jersey, Mid-Atlantic, Pacific Northwest, Northern and Southern California and our expansion markets of Southeast Florida and Denver, Colorado), and where a comparison of operating results from the prior year to the current year is meaningful, as these communities were owned and had stabilized occupancy as of the beginning of the respective prior year period. For the three month periods ended March 31, 2020 and 2019, Established Communities are communities that are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2019, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale as of March 31, 2020 or probable for disposition to unrelated third parties within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% 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 January 1, 2020, or which were acquired subsequent to January 1, 2019. Other Stabilized Communities excludes communities that are conducting or are probable to conduct substantial redevelopment activities within the current year, as defined below.
|
•
|
Lease-Up Communities are consolidated communities where construction has been complete for less than one year and that do not have stabilized occupancy.
|
•
|
Redevelopment Communities are consolidated communities where substantial redevelopment is in progress or is probable to begin during the current year. Redevelopment is considered substantial when (i) capital invested during the reconstruction effort is expected to exceed the lesser of $5,000,000 or 10% of the community's pre-redevelopment gross cost basis and (ii) physical occupancy is below or is expected to be below 90% during, or as a result of, the redevelopment activity. We had no Redevelopment Communities at March 31, 2020.
|
•
|
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
|
|
40
|
|
|
10,055
|
|
Metro NY/NJ
|
|
47
|
|
|
13,268
|
|
Mid-Atlantic
|
|
39
|
|
|
13,838
|
|
Pacific Northwest
|
|
16
|
|
|
4,116
|
|
Northern California
|
|
40
|
|
|
11,362
|
|
Southern California
|
|
56
|
|
|
16,379
|
|
Expansion Markets
|
|
3
|
|
|
912
|
|
Total Established
|
|
241
|
|
|
69,930
|
|
|
|
|
|
|
||
Other Stabilized Communities:
|
|
|
|
|
|
|
New England
|
|
3
|
|
|
705
|
|
Metro NY/NJ
|
|
3
|
|
|
1,070
|
|
Mid-Atlantic
|
|
1
|
|
|
151
|
|
Pacific Northwest
|
|
2
|
|
|
745
|
|
Northern California
|
|
1
|
|
|
873
|
|
Southern California
|
|
2
|
|
|
681
|
|
Expansion Markets
|
|
5
|
|
|
1,388
|
|
Total Other Stabilized
|
|
17
|
|
|
5,613
|
|
|
|
|
|
|
||
Lease-Up Communities
|
|
6
|
|
|
1,666
|
|
|
|
|
|
|
||
Redevelopment Communities
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Unconsolidated Communities
|
|
13
|
|
|
3,189
|
|
|
|
|
|
|
||
Total Current Communities
|
|
277
|
|
|
80,398
|
|
|
|
|
|
|
||
Development Communities (1)
|
|
19
|
|
|
6,198
|
|
|
|
|
|
|
||
Total Communities
|
|
296
|
|
|
86,596
|
|
|
|
|
|
|
||
Development Rights
|
|
28
|
|
|
9,720
|
|
(1)
|
Development Communities includes Avalon Alderwood Mall, expected to contain 328 apartment homes, which is being developed within an unconsolidated joint venture.
|
|
For the three months ended
|
|||||||||||||
|
3/31/2020
|
|
3/31/2019
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Rental and other income
|
$
|
600,644
|
|
|
$
|
565,045
|
|
|
$
|
35,599
|
|
|
6.3
|
%
|
Management, development and other fees
|
1,007
|
|
|
1,139
|
|
|
(132
|
)
|
|
(11.6
|
)%
|
|||
Total revenue
|
601,651
|
|
|
566,184
|
|
|
35,467
|
|
|
6.3
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Direct property operating expenses, excluding property taxes
|
108,181
|
|
|
102,586
|
|
|
5,595
|
|
|
5.5
|
%
|
|||
Property taxes
|
67,026
|
|
|
61,329
|
|
|
5,697
|
|
|
9.3
|
%
|
|||
Total community operating expenses
|
175,207
|
|
|
163,915
|
|
|
11,292
|
|
|
6.9
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Corporate-level property management and other indirect operating expenses
|
23,812
|
|
|
20,869
|
|
|
2,943
|
|
|
14.1
|
%
|
|||
Expensed transaction, development and other pursuit costs, net of recoveries
|
3,334
|
|
|
622
|
|
|
2,712
|
|
|
436.0
|
%
|
|||
Interest expense, net
|
55,914
|
|
|
47,892
|
|
|
8,022
|
|
|
16.8
|
%
|
|||
Loss on extinguishment of debt, net
|
9,170
|
|
|
280
|
|
|
8,890
|
|
|
3,175.0
|
%
|
|||
Depreciation expense
|
177,911
|
|
|
162,057
|
|
|
15,854
|
|
|
9.8
|
%
|
|||
General and administrative expense
|
17,320
|
|
|
13,706
|
|
|
3,614
|
|
|
26.4
|
%
|
|||
Total other expenses
|
287,461
|
|
|
245,426
|
|
|
42,035
|
|
|
17.1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Equity in income (loss) of unconsolidated real estate entities
|
1,175
|
|
|
(1,060
|
)
|
|
2,235
|
|
|
N/A (1)
|
|
|||
Gain on sale of communities
|
24,436
|
|
|
14,835
|
|
|
9,601
|
|
|
64.7
|
%
|
|||
Gain on other real estate transactions, net
|
43
|
|
|
267
|
|
|
(224
|
)
|
|
(83.9
|
)%
|
|||
Gain on for-sale condominiums, net of marketing and administrative costs
|
3,460
|
|
|
(473
|
)
|
|
3,933
|
|
|
N/A (1)
|
|
|||
Income before income taxes
|
168,097
|
|
|
170,412
|
|
|
(2,315
|
)
|
|
(1.4
|
)%
|
|||
Income tax expense (benefit)
|
91
|
|
|
(6
|
)
|
|
97
|
|
|
N/A (1)
|
|
|||
Net income
|
168,006
|
|
|
170,418
|
|
|
(2,412
|
)
|
|
(1.4
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Net income attributable to noncontrolling interests
|
(35
|
)
|
|
(52
|
)
|
|
17
|
|
|
(32.7
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Net income attributable to common stockholders
|
$
|
167,971
|
|
|
$
|
170,366
|
|
|
$
|
(2,395
|
)
|
|
(1.4
|
)%
|
(1)
|
Percent change is not meaningful.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
|
|
|
|
||||
Net income
|
$
|
168,006
|
|
|
$
|
170,418
|
|
Indirect operating expenses, net of corporate income
|
22,799
|
|
|
19,722
|
|
||
Expensed transaction, development and other pursuit costs, net of recoveries
|
3,334
|
|
|
622
|
|
||
Interest expense, net
|
55,914
|
|
|
47,892
|
|
||
Loss on extinguishment of debt, net
|
9,170
|
|
|
280
|
|
||
General and administrative expense
|
17,320
|
|
|
13,706
|
|
||
Equity in (income) loss of unconsolidated real estate entities
|
(1,175
|
)
|
|
1,060
|
|
||
Depreciation expense
|
177,911
|
|
|
162,057
|
|
||
Income tax expense (benefit)
|
91
|
|
|
(6
|
)
|
||
Gain on sale of real estate assets
|
(24,436
|
)
|
|
(14,835
|
)
|
||
Gain on other real estate transactions, net
|
(43
|
)
|
|
(267
|
)
|
||
Gain on for-sale condominiums, net of marketing and administrative costs
|
(3,460
|
)
|
|
473
|
|
||
Net operating income from real estate assets sold or held for sale
|
(896
|
)
|
|
(6,205
|
)
|
||
Net operating income
|
$
|
424,535
|
|
|
$
|
394,917
|
|
|
For the three months ended
|
||
|
3/31/2020
|
||
|
|
|
|
Established Communities
|
$
|
11,308
|
|
Other Stabilized Communities
|
8,767
|
|
|
Development / Redevelopment (1)
|
9,543
|
|
|
Total
|
$
|
29,618
|
|
(1)
|
We had no Redevelopment Communities at March 31, 2020.
|
|
For the three months ended March 31, 2020
|
|||||||||||||||||||||||||||||||||
|
Rental revenue (000s)
|
|
Average rental rates
|
|
Economic Occupancy (1)
|
|||||||||||||||||||||||||||||
|
|
|
|
$ Change
|
% Change
|
|
|
|
|
% Change
|
|
|
% Change
|
|
||||||||||||||||||||
|
2020
|
|
2019
|
|
2020 to
2019 |
|
2020 to
2019 |
|
2020
|
|
2019
|
|
2020 to
2019 |
|
2020
|
|
2019
|
|
2020 to
2019 |
|||||||||||||||
New England
|
$
|
81,741
|
|
|
$
|
78,728
|
|
|
$
|
3,013
|
|
|
3.8
|
%
|
|
$
|
2,840
|
|
|
$
|
2,744
|
|
|
3.5
|
%
|
|
95.4
|
%
|
|
95.1
|
%
|
|
0.3
|
%
|
Metro NY/NJ
|
120,646
|
|
|
118,232
|
|
|
2,414
|
|
|
2.0
|
%
|
|
3,152
|
|
|
3,098
|
|
|
1.7
|
%
|
|
96.2
|
%
|
|
95.9
|
%
|
|
0.3
|
%
|
|||||
Mid-Atlantic
|
91,638
|
|
|
88,310
|
|
|
3,328
|
|
|
3.8
|
%
|
|
2,290
|
|
|
2,213
|
|
|
3.5
|
%
|
|
96.4
|
%
|
|
96.1
|
%
|
|
0.3
|
%
|
|||||
Pacific Northwest
|
28,608
|
|
|
27,696
|
|
|
912
|
|
|
3.3
|
%
|
|
2,384
|
|
|
2,326
|
|
|
2.5
|
%
|
|
97.2
|
%
|
|
96.4
|
%
|
|
0.8
|
%
|
|||||
Northern California
|
104,227
|
|
|
101,145
|
|
|
3,082
|
|
|
3.0
|
%
|
|
3,152
|
|
|
3,081
|
|
|
2.3
|
%
|
|
97.0
|
%
|
|
96.3
|
%
|
|
0.7
|
%
|
|||||
Southern California
|
114,721
|
|
|
111,328
|
|
|
3,393
|
|
|
3.0
|
%
|
|
2,420
|
|
|
2,369
|
|
|
2.2
|
%
|
|
96.5
|
%
|
|
95.7
|
%
|
|
0.8
|
%
|
|||||
Expansion Markets
|
5,933
|
|
|
5,865
|
|
|
68
|
|
|
1.2
|
%
|
|
2,304
|
|
|
2,248
|
|
|
2.5
|
%
|
|
94.1
|
%
|
|
95.4
|
%
|
|
(1.4
|
)%
|
|||||
Total Established
|
$
|
547,514
|
|
|
$
|
531,304
|
|
|
$
|
16,210
|
|
|
3.1
|
%
|
|
$
|
2,709
|
|
|
$
|
2,639
|
|
|
2.7
|
%
|
|
96.3
|
%
|
|
95.9
|
%
|
|
0.4
|
%
|
(1)
|
Economic occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a community's gross revenue. Economic occupancy is defined as gross potential revenue less vacancy loss, as a percentage of gross potential revenue. Gross potential revenue is determined by valuing occupied homes at leased rates and vacant homes at market rents.
|
•
|
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
|
•
|
similar adjustments for unconsolidated partnerships and joint ventures, including those from a change in control.
|
•
|
joint venture gains (if not adjusted through FFO), non-core costs and promoted interests;
|
•
|
casualty and impairment losses or gains, net on non-depreciable real estate;
|
•
|
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 expected business interruption insurance proceeds;
|
•
|
property and casualty insurance proceeds and legal settlements;
|
•
|
gains or losses on sales of assets not subject to depreciation;
|
•
|
advocacy contributions, representing payments to promote our business interests;
|
•
|
hedge ineffectiveness;
|
•
|
severance related costs;
|
•
|
expensed transaction costs;
|
•
|
for-sale condominium activity, including gains, marketing and administrative costs and imputed carry cost;
|
•
|
income taxes; and
|
•
|
other non-core items.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
|
|
|
|
||||
Net income attributable to common stockholders
|
$
|
167,971
|
|
|
$
|
170,366
|
|
Depreciation - real estate assets, including joint venture adjustments
|
177,428
|
|
|
164,746
|
|
||
Distributions to noncontrolling interests
|
12
|
|
|
11
|
|
||
Gain on sale of unconsolidated entities holding previously depreciated real estate
|
—
|
|
|
—
|
|
||
Gain on sale of previously depreciated real estate
|
(24,436
|
)
|
|
(14,835
|
)
|
||
FFO attributable to common stockholders
|
320,975
|
|
|
320,288
|
|
||
|
|
|
|
||||
Adjusting items:
|
|
|
|
||||
Business interruption insurance proceeds
|
—
|
|
|
(172
|
)
|
||
Loss on extinguishment of consolidated debt
|
9,170
|
|
|
280
|
|
||
Advocacy contributions
|
301
|
|
|
—
|
|
||
Severance related costs
|
1,951
|
|
|
19
|
|
||
Development pursuit write-offs and expensed transaction costs, net
|
3,120
|
|
|
277
|
|
||
Gain on for-sale condominiums (1)(2)
|
(4,903
|
)
|
|
—
|
|
||
For-sale condominium marketing and administrative costs (2)
|
1,443
|
|
|
473
|
|
||
For-sale condominium imputed carry cost (3)
|
3,609
|
|
|
—
|
|
||
Gain on other real estate transactions
|
(43
|
)
|
|
(267
|
)
|
||
Legal settlements
|
43
|
|
|
(1,016
|
)
|
||
Income tax expense (benefit)
|
91
|
|
|
(6
|
)
|
||
Core FFO attributable to common stockholders
|
$
|
335,757
|
|
|
$
|
319,876
|
|
|
|
|
|
||||
Weighted average common shares outstanding - diluted
|
140,777,873
|
|
|
138,832,201
|
|
||
|
|
|
|
||||
EPS per common share - diluted
|
$
|
1.19
|
|
|
$
|
1.23
|
|
FFO per common share - diluted
|
$
|
2.28
|
|
|
$
|
2.31
|
|
Core FFO per common share - diluted
|
$
|
2.39
|
|
|
$
|
2.30
|
|
(1)
|
Amount for the three months ended March 31, 2020 includes the sale of 36 residential condominiums at The Park Loggia.
|
(2)
|
The aggregate impact of (i) gain on for-sale condominiums and (ii) for-sale condominium marketing and administrative costs is a gain of $3,460 for the three months ended March 31, 2020 and a loss of $473 for the three months ended March 31, 2019.
|
(3)
|
Represents the imputed carry cost of for-sale residential condominiums at The Park Loggia. We compute this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by our weighted average unsecured debt rate.
|
|
For the three months ended
|
||||||
|
3/31/2020
|
|
3/31/2019
|
||||
Net cash provided by operating activities
|
$
|
341,704
|
|
|
$
|
361,786
|
|
Net cash used in investing activities
|
$
|
(136,067
|
)
|
|
$
|
(313,186
|
)
|
Net cash provided by (used in) financing activities
|
$
|
535,170
|
|
|
$
|
(71,257
|
)
|
•
|
development and redevelopment activity in which we are currently engaged or in which we plan to engage;
|
•
|
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 $245,789,000 in the development and redevelopment of communities; and
|
•
|
capital expenditures of $43,585,000 for our operating communities and non-real estate assets.
|
•
|
borrowings under the Credit Facility of $750,000,000;
|
•
|
proceeds from the issuance of unsecured notes in the amount of $699,252,000; and
|
•
|
the issuance of a secured note that was part of a refinancing, as discussed below, in the amount of $51,000,000.
|
•
|
repayments of unsecured notes in the amount of $658,655,000;
|
•
|
payment of cash dividends in the amount of $213,671,000; and
|
•
|
repayment of a mortgage note payable in the amount of $51,484,000 that was subsequently refinanced, as discussed above.
|
•
|
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 2020, we issued $700,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $694,701,000. The notes mature in March 2030 and were issued at a 2.30% interest rate.
|
•
|
In February 2020, we refinanced the secured borrowing for Avalon San Bruno III. The secured borrowing had a fixed interest rate of 3.08% and was refinanced for a principal balance of $51,000,000, with a fixed interest rate of 2.38% and maturity date of March 2027.
|
•
|
In March 2020, we repaid (i) $400,000,000 principal amount of its 3.625% unsecured notes in advance of the October 2020 scheduled maturity and (ii) $250,000,000 principal amount of its 3.95% unsecured notes in advance of the January 2021 scheduled maturity. In conjunction with these repayments, we recognized a loss on debt extinguishment of $9,170,000 for prepayment penalties and the non-cash write-off of unamortized deferred financing costs.
|
|
|
All-In
interest rate (1) |
|
Principal
maturity date |
|
Balance Outstanding (2)
|
|
Scheduled Maturities
|
|||||||||||||||||||||||||||||
Community
|
|
|
|
12/31/2019
|
|
3/31/2020
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|||||||||||||||||||
Tax-exempt bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon at Chestnut Hill
|
|
6.16
|
%
|
|
Oct-2047
|
|
$
|
36,995
|
|
|
$
|
36,849
|
|
|
$
|
450
|
|
|
$
|
629
|
|
|
$
|
663
|
|
|
$
|
699
|
|
|
$
|
737
|
|
|
$
|
33,671
|
|
Avalon Westbury
|
|
3.86
|
%
|
|
Nov-2036
|
(3)
|
62,200
|
|
|
62,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,200
|
|
||||||||
|
|
|
|
|
|
|
99,195
|
|
|
99,049
|
|
|
450
|
|
|
629
|
|
|
663
|
|
|
699
|
|
|
737
|
|
|
95,871
|
|
||||||||
Variable rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon Acton
|
|
2.87
|
%
|
|
Jul-2040
|
(4)
|
45,000
|
|
|
45,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,000
|
|
||||||||
Avalon Clinton North
|
|
3.52
|
%
|
|
Nov-2038
|
(4)
|
147,000
|
|
|
147,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147,000
|
|
||||||||
Avalon Clinton South
|
|
3.52
|
%
|
|
Nov-2038
|
(4)
|
121,500
|
|
|
121,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121,500
|
|
||||||||
Avalon Midtown West
|
|
3.43
|
%
|
|
May-2029
|
(4)
|
98,200
|
|
|
98,200
|
|
|
4,700
|
|
|
5,200
|
|
|
5,600
|
|
|
6,100
|
|
|
6,800
|
|
|
69,800
|
|
||||||||
Avalon San Bruno I
|
|
3.41
|
%
|
|
Dec-2037
|
(4)
|
64,450
|
|
|
64,450
|
|
|
1,400
|
|
|
1,900
|
|
|
2,000
|
|
|
2,200
|
|
|
2,200
|
|
|
54,750
|
|
||||||||
|
|
|
|
|
|
476,150
|
|
|
476,150
|
|
|
6,100
|
|
|
7,100
|
|
|
7,600
|
|
|
8,300
|
|
|
9,000
|
|
|
438,050
|
|
|||||||||
Conventional loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$250 million unsecured notes
|
|
4.04
|
%
|
|
Jan-2021
|
(5)
|
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
|
(5)
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
||||||||
$300 million unsecured notes
|
|
4.09
|
%
|
|
Jul-2047
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$450 million unsecured notes
|
|
3.32
|
%
|
|
Jan-2028
|
|
450,000
|
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
||||||||
$300 million unsecured notes
|
|
3.97
|
%
|
|
Apr-2048
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$450 million unsecured notes
|
|
3.66
|
%
|
|
Jun-2029
|
|
450,000
|
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
||||||||
$700 million unsecured notes
|
|
2.68
|
%
|
|
Mar-2030
|
|
—
|
|
|
700,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
700,000
|
|
||||||||
Avalon Walnut Creek
|
|
4.00
|
%
|
|
Jul-2066
|
|
3,847
|
|
|
3,847
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,847
|
|
||||||||
Eaves Los Feliz
|
|
3.68
|
%
|
|
Jun-2027
|
|
41,400
|
|
|
41,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,400
|
|
||||||||
Eaves Woodland Hills
|
|
3.67
|
%
|
|
Jun-2027
|
|
111,500
|
|
|
111,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,500
|
|
||||||||
Avalon Russett
|
|
3.77
|
%
|
|
Jun-2027
|
|
32,200
|
|
|
32,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,200
|
|
||||||||
Avalon San Bruno II
|
|
3.85
|
%
|
|
Apr-2021
|
|
28,435
|
|
|
28,288
|
|
|
444
|
|
|
27,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Westbury
|
|
4.88
|
%
|
|
Nov-2036
|
(3)
|
13,665
|
|
|
13,300
|
|
|
1,130
|
|
|
1,575
|
|
|
1,655
|
|
|
1,740
|
|
|
1,840
|
|
|
5,360
|
|
||||||||
Avalon San Bruno III
|
|
3.18
|
%
|
|
Jun-2020
|
(6)
|
50,825
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon San Bruno III
|
|
2.38
|
%
|
|
Mar-2027
|
(6)
|
—
|
|
|
51,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,000
|
|
||||||||
Avalon Hoboken
|
|
3.55
|
%
|
|
Dec-2020
|
|
67,904
|
|
|
67,904
|
|
|
67,904
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Cerritos
|
|
3.35
|
%
|
|
Aug-2029
|
|
30,250
|
|
|
30,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,250
|
|
||||||||
|
|
|
|
|
|
|
6,230,026
|
|
|
6,279,689
|
|
|
69,478
|
|
|
29,419
|
|
|
451,655
|
|
|
601,740
|
|
|
301,840
|
|
|
4,825,557
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Variable rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Term Loan - $100 million
|
|
2.69
|
%
|
|
Feb-2022
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Term Loan - $150 million
|
|
2.62
|
%
|
|
Feb-2024
|
|
150,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
||||||||
$300 million unsecured notes
|
|
2.45
|
%
|
|
Jan-2021
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
550,000
|
|
|
550,000
|
|
|
—
|
|
|
300,000
|
|
|
100,000
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total indebtedness - excluding Credit Facility
|
|
|
|
|
|
|
$
|
7,355,371
|
|
|
$
|
7,404,888
|
|
|
$
|
76,028
|
|
|
$
|
337,148
|
|
|
$
|
559,918
|
|
|
$
|
610,739
|
|
|
$
|
461,577
|
|
|
$
|
5,359,478
|
|
(1)
|
Rates are given as of March 31, 2020 and include 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 $45,568 and $41,352 as of March 31, 2020 and December 31, 2019, respectively, and deferred financing costs and debt discount associated with secured notes of $17,863 and $17,729 as of March 31, 2020 and December 31, 2019, respectively, 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)
|
Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement.
|
(5)
|
In March 2020, we repaid these borrowings in advance of their scheduled maturity date.
|
(6)
|
In February 2020, we repaid a borrowing secured by this community 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
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
NYC Joint Venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
1. Avalon Bowery Place I - New York, NY
|
|
|
|
206
|
|
|
$
|
208,598
|
|
|
$
|
93,800
|
|
|
Fixed
|
|
4.01
|
%
|
|
Jan 2029
|
|
2. Avalon Bowery Place II - New York, NY
|
|
|
|
90
|
|
|
90,756
|
|
|
39,639
|
|
|
Fixed
|
|
4.01
|
%
|
|
Jan 2029
|
|||
3. Avalon Morningside - New York, NY (4)
|
|
|
|
295
|
|
|
210,809
|
|
|
112,500
|
|
|
Fixed
|
|
3.55
|
%
|
|
Jan 2029/May 2046
|
|||
4. Avalon West Chelsea - New York, NY (5)
|
|
|
|
305
|
|
|
127,658
|
|
|
66,000
|
|
|
Fixed
|
|
4.01
|
%
|
|
Jan 2029
|
|||
5. AVA High Line - New York, NY (5)
|
|
|
|
405
|
|
|
121,212
|
|
|
84,000
|
|
|
Fixed
|
|
4.01
|
%
|
|
Jan 2029
|
|||
Total NYC Joint Venture
|
|
20.0
|
%
|
|
1,301
|
|
|
759,033
|
|
|
395,939
|
|
|
|
|
3.88
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Archstone Multifamily Partners AC LP (the "U.S. Fund")
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Avalon Studio 4121 - Studio City, CA
|
|
|
|
|
149
|
|
|
57,176
|
|
|
27,488
|
|
|
Fixed
|
|
3.34
|
%
|
|
Nov 2022
|
||
2. Avalon Venice on Rose - Venice, CA
|
|
|
|
|
70
|
|
|
57,453
|
|
|
27,435
|
|
|
Fixed
|
|
3.28
|
%
|
|
Jun 2020
|
||
3. Avalon Station 250 - Dedham, MA
|
|
|
|
|
285
|
|
|
98,107
|
|
|
53,551
|
|
|
Fixed
|
|
3.73
|
%
|
|
Sep 2022
|
||
4. Avalon Grosvenor Tower - Bethesda, MD
|
|
|
|
|
237
|
|
|
80,481
|
|
|
41,510
|
|
|
Fixed
|
|
3.74
|
%
|
|
Sep 2022
|
||
Total U.S. Fund
|
|
28.6
|
%
|
|
741
|
|
|
293,217
|
|
|
149,984
|
|
|
|
|
3.58
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Multifamily Partners AC JV LP (the “AC JV”)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Avalon North Point - Cambridge, MA (6)
|
|
|
|
|
426
|
|
|
190,149
|
|
|
111,653
|
|
|
Fixed
|
|
6.00
|
%
|
|
Aug 2021
|
||
2. Avalon North Point Lofts - Cambridge, MA
|
|
|
|
103
|
|
|
26,872
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|||
Total AC JV
|
|
20.0
|
%
|
|
529
|
|
|
217,021
|
|
|
111,653
|
|
|
|
|
6.00
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Operating Joint Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. MVP I, LLC
|
|
25.0
|
%
|
|
313
|
|
|
126,073
|
|
|
103,000
|
|
|
Fixed
|
|
3.24
|
%
|
|
Jul 2025
|
||
2. Brandywine Apartments of Maryland, LLC
|
|
28.7
|
%
|
|
305
|
|
|
19,383
|
|
|
21,461
|
|
|
Fixed
|
|
3.40
|
%
|
|
Jun 2028
|
||
Total Other Joint Ventures
|
|
|
|
618
|
|
|
145,456
|
|
|
124,461
|
|
|
|
|
3.27
|
%
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Unconsolidated Investments
|
|
|
|
3,189
|
|
|
$
|
1,414,727
|
|
|
$
|
782,037
|
|
|
|
|
4.03
|
%
|
|
|
(1)
|
Represents total capitalized cost as of March 31, 2020.
|
(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 March 31, 2020.
|
(4)
|
Borrowing on this community is comprised of two mortgage loans.
|
(5)
|
Borrowing on this dual-branded community is comprised of a single mortgage loan.
|
(6)
|
Borrowing is comprised of loans made by the equity investors in the venture in proportion to their equity interests.
|
|
Number of
apartment
homes
|
|
Projected total
capitalized cost (1) (2)
($ millions)
|
|
Construction
start
|
|
Initial projected
or actual occupancy
(1) (3)
|
|
Estimated
completion (1)
|
|
Estimated
stabilized operations
(1) (4)
|
|||||
1.
|
|
Avalon Public Market
Emeryville, CA |
289
|
|
|
$
|
175
|
|
|
Q4 2016
|
|
Q3 2019
|
|
Q3 2020
|
|
Q4 2020
|
2.
|
|
Avalon Yonkers
Yonkers, NY |
590
|
|
|
189
|
|
|
Q4 2017
|
|
Q3 2019
|
|
Q1 2021
|
|
Q3 2021
|
|
3.
|
|
AVA Hollywood (5)
Hollywood, CA |
695
|
|
|
373
|
|
|
Q4 2016
|
|
Q4 2019
|
|
Q1 2021
|
|
Q1 2021
|
|
4.
|
|
Avalon Towson
Towson, MD |
371
|
|
|
114
|
|
|
Q4 2017
|
|
Q1 2020
|
|
Q4 2020
|
|
Q2 2021
|
|
5.
|
|
Avalon Walnut Creek II
Walnut Creek, CA |
200
|
|
|
111
|
|
|
Q4 2017
|
|
Q2 2020
|
|
Q4 2020
|
|
Q2 2021
|
|
6.
|
|
Avalon Doral
Doral, FL |
350
|
|
|
114
|
|
|
Q2 2018
|
|
Q2 2020
|
|
Q3 2020
|
|
Q4 2021
|
|
7.
|
|
Avalon 555 President
Baltimore, MD
|
400
|
|
|
139
|
|
|
Q3 2018
|
|
Q3 2020
|
|
Q3 2021
|
|
Q4 2021
|
|
8.
|
|
Avalon Old Bridge
Old Bridge, NJ |
252
|
|
|
66
|
|
|
Q3 2018
|
|
Q3 2020
|
|
Q2 2021
|
|
Q4 2021
|
|
9.
|
|
Avalon Newcastle Commons II
Newcastle, WA |
293
|
|
|
106
|
|
|
Q4 2018
|
|
Q4 2020
|
|
Q2 2021
|
|
Q4 2021
|
|
10.
|
|
Twinbrook Station
Rockville, MD |
238
|
|
|
66
|
|
|
Q4 2018
|
|
Q4 2020
|
|
Q2 2021
|
|
Q4 2021
|
|
11.
|
|
Avalon Harrison (5)
Harrison, NY |
143
|
|
|
76
|
|
|
Q4 2018
|
|
Q1 2021
|
|
Q1 2022
|
|
Q2 2022
|
|
12.
|
|
Avalon Brea Place
Brea, CA |
653
|
|
|
290
|
|
|
Q2 2019
|
|
Q1 2021
|
|
Q2 2022
|
|
Q3 2022
|
|
13.
|
|
Avalon Foundry Row
Owings Mill, MD |
437
|
|
|
100
|
|
|
Q2 2019
|
|
Q1 2021
|
|
Q1 2022
|
|
Q3 2022
|
|
14.
|
|
Avalon Marlborough II
Marlborough, MA |
123
|
|
|
42
|
|
|
Q2 2019
|
|
Q3 2020
|
|
Q4 2020
|
|
Q1 2021
|
|
15.
|
|
Avalon Acton II
Acton, MA |
86
|
|
|
31
|
|
|
Q4 2019
|
|
Q3 2020
|
|
Q1 2021
|
|
Q1 2021
|
|
16.
|
|
Avalon Woburn
Woburn, MA |
350
|
|
|
121
|
|
|
Q4 2019
|
|
Q3 2021
|
|
Q2 2022
|
|
Q3 2022
|
|
17.
|
|
AVA RiNo
Denver, CO |
246
|
|
|
87
|
|
|
Q4 2019
|
|
Q1 2022
|
|
Q2 2022
|
|
Q4 2022
|
|
18.
|
|
Avalon Monrovia
Monrovia, CA |
154
|
|
|
68
|
|
|
Q4 2019
|
|
Q1 2021
|
|
Q3 2021
|
|
Q4 2021
|
|
19.
|
|
Avalon Alderwood Mall (6)
Lynnwood, WA |
328
|
|
|
110
|
|
|
Q4 2019
|
|
Q3 2021
|
|
Q2 2022
|
|
Q3 2022
|
|
|
|
Total
|
6,198
|
|
|
$
|
2,378
|
|
|
|
|
|
|
|
|
|
(1)
|
The information above contains estimates and projections that may be materially impacted by the COVID-19 pandemic. Where possible, particularly for developments nearing completion or in lease-up, we have updated the information above with revised estimates, but in other cases the information has not been updated due to uncertainties as to the duration and severity of the pandemic and its related impacts, such as stay-at-home orders and other regulations, adjusted operating protocols and other economic developments. We do not believe the estimates above should be relied upon for the purpose of estimating our future financial performance, but we believe the information is still meaningful as it is an indicator of the relative magnitude and construction schedule of developments currently underway. See the disclosure concerning the impact of the COVID-19 pandemic on our development activities elsewhere in this report.
|
(2)
|
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, as well as costs incurred for first generation retail tenants such as tenant improvements and leasing commissions. 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 unless otherwise noted.
|
(3)
|
Initial projected occupancy dates are estimates. There can be no assurance that we will pursue to completion any or all of these proposed developments.
|
(4)
|
Stabilized operations is defined as the earlier of (i) attainment of 90% or greater physical occupancy or (ii) the one-year anniversary of completion of development.
|
(5)
|
Development Communities containing at least 10,000 square feet of retail space include AVA Hollywood (19,000 square feet) and Avalon Harrison (27,000 square feet).
|
(6)
|
We are developing this project within an unconsolidated joint venture that was formed in December 2019, in which we own a 50.0% interest. The information 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 Teaneck
Teaneck, NJ
|
248
|
|
|
$
|
73
|
|
|
242,988
|
|
|
$
|
300
|
|
2.
|
|
Avalon North Creek
Bothwell, WA |
316
|
|
|
83
|
|
|
304,083
|
|
|
$
|
273
|
|
|
3.
|
|
Avalon Norwood
Norwood, MA |
198
|
|
|
61
|
|
|
244,361
|
|
|
$
|
250
|
|
|
|
|
Total
|
762
|
|
|
$
|
217
|
|
|
|
|
|
(1)
|
Total capitalized cost is as of March 31, 2020. We generally anticipate incurring additional costs associated with Development Communities that are customary for new developments.
|
Market
|
|
Number of rights
|
|
Estimated
number
of homes
|
|
Projected total
capitalized cost ($ millions) (1) (2)
|
||||
|
|
|
|
|
|
|
||||
New England
|
|
3
|
|
|
394
|
|
|
$
|
148
|
|
Metro NY/NJ
|
|
13
|
|
|
5,391
|
|
|
2,222
|
|
|
Mid-Atlantic
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Pacific Northwest
|
|
3
|
|
|
1,129
|
|
|
429
|
|
|
Northern California
|
|
4
|
|
|
1,198
|
|
|
648
|
|
|
Southern California
|
|
1
|
|
|
475
|
|
|
265
|
|
|
Southeast Florida
|
|
1
|
|
|
254
|
|
|
95
|
|
|
Denver, CO
|
|
3
|
|
|
879
|
|
|
280
|
|
|
Total
|
|
28
|
|
|
9,720
|
|
|
$
|
4,087
|
|
(1)
|
The information above contains estimates and projections that may be materially impacted by the COVID-19 pandemic. Where possible, we have updated the information above with revised estimates, but in other cases the information has not been updated due to uncertainties as to the duration and severity of the pandemic and its related impacts, such as stay-at-home orders and other regulations, adjusted operating protocols and other economic developments. We do not believe the estimates above should be relied upon for the purpose of estimating our future financial performance, but we believe the information is still meaningful as it is an indicator of the relative magnitude of our Development Rights.
|
(2)
|
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, as well as costs incurred for first generation retail tenants such as tenant improvements and leasing commissions.
|
•
|
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 timing and net sales proceeds of condominium sales;
|
•
|
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;
|
•
|
the impact of landlord-tenant laws and rent regulations;
|
•
|
our declaration or payment of dividends;
|
•
|
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, Denver, Colorado, and Southeast Florida, 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 and the COVID-19 pandemic;
|
•
|
trends affecting our financial condition or results of operations; and
|
•
|
the impact of outstanding legal proceedings.
|
•
|
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;
|
•
|
the timing and net proceeds of condominium sales may not equal our current expectations;
|
•
|
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;
|
•
|
the impact of new landlord-tenant laws and rent regulations may be greater than we expected;
|
•
|
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 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;
|
•
|
laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge fees or evict tenants, may impact our revenue or increase our costs;
|
•
|
our expectations, estimates and assumptions as of the date of this filing regarding outstanding legal proceedings are subject to change; and
|
•
|
the likelihood that we may choose to pay dividends in our stock instead of cash, which may result in stockholders having to pay taxes with respect to such dividends in excess of the cash received, if any.
|
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
|
•
|
The spread of the COVID-19 virus could result in further increases in unemployment, and residents that experience deteriorating financial conditions as a result of the pandemic may be unwilling or unable to pay rent in full on a timely basis. In some cases, we may have to restructure tenants’ rent obligations and may not be able to do so on terms as favorable to us as those currently in place. In response to the COVID-19 pandemic, numerous state, local, and federal efforts have also imposed restrictions at present on our ability to enforce residents’ contractual lease obligations, and this will affect our ability to collect rent or enforce remedies for the failure to pay rent. In addition to these regulatory limits on evictions, in practical terms many of the housing courts and sheriff’s offices on which we rely to enforce our rights are not operating at the same level of volume or effectiveness as before the pandemic.
|
•
|
In the event of resident nonpayment, default or bankruptcy, the uncollectibility of rent could increase and we may not be able to re-lease apartment homes at current or projected rents. Our occupancy levels and pricing across our portfolio may decline due to changes in demand or logistical challenges in showing or leasing apartment homes to prospective residents, including restrictions inhibiting our employees’ ability to meet with existing or potential residents.
|
•
|
We may elect, and/or be required, to continue to waive late fees and certain other customary fees associated with our apartment rental business, resulting in continued foregone revenue.
|
•
|
Our properties may also incur significant costs or losses related to shelter-in-place orders, quarantines, infection, clean-up costs or other related factors.
|
•
|
Social distancing and other measures in response to the pandemic have caused us to revise the manner in which we meet with prospective residents and serve current residents. For example, prospective residents are generally visiting apartments at the present time virtually or on a self-tour rather than being accompanied by a leasing consultant. In addition, our common area amenities are generally closed at the present time. These factors may affect resident satisfaction and leasing velocity.
|
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)
|
||||||
January 1- January 31, 2020
|
|
8,075
|
|
|
$
|
216.67
|
|
|
—
|
|
|
$
|
200,000
|
|
February 1- February 29, 2020
|
|
4,170
|
|
|
$
|
225.59
|
|
|
—
|
|
|
$
|
200,000
|
|
March 1- March 31, 2020
|
|
58,106
|
|
|
$
|
200.59
|
|
|
—
|
|
|
$
|
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
|
|
—
|
|
|
3(i).2
|
|
—
|
|
|
3(i).3
|
|
—
|
|
|
3(ii).1
|
|
—
|
|
|
10.1+
|
|
—
|
|
|
31.1
|
|
—
|
|
|
31.2
|
|
—
|
|
|
32
|
|
—
|
|
|
101
|
|
—
|
|
The following financial materials from AvalonBay Communities, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2020 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) Notes to the Consolidated Financial Statements. (Filed herewith.)
|
104
|
|
—
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document). (Filed herewith.)
|
+
|
Management contract or compensatory plan or arrangement required to be filed or incorporated by reference as an exhibit to this Form 10-Q.
|
|
AVALONBAY COMMUNITIES, INC.
|
|
|
|
|
|
|
|
Date:
|
May 8, 2020
|
/s/ Timothy J. Naughton
|
|
|
Timothy J. Naughton
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
|
|
Date:
|
May 8, 2020
|
/s/ Kevin P. O'Shea
|
|
|
Kevin P. O'Shea
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Resolved:
|
That Section 2(g) of the Company’s Second Amended and Restated 2009 Equity Incentive Plan be and hereby is amended to read as follows:
|
i.
|
in the case of a grantee’s death, disability, retirement or termination of employment without cause, or (in the case of Performance-Based Awards) a Sale Event, and
|
ii.
|
in the case of credits of Awards under Dividend Equivalent Rights associated with Restricted Stock Units, and
|
iii.
|
in addition to the above exceptions, with respect to Awards made after the Effective Date and granted to employees that result in the issuance of up to 5% of the shares of Stock reserved and available for issuance under the Plan as of the Effective Date pursuant to Section 3(a).
|
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):
|
(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
|
(b)
|
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.
|
|
|
|
/s/ Timothy J. Naughton
|
|
Timothy J. Naughton
|
|
Chairman, Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
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/ 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
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Chairman, Chief Executive Officer and President
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(Principal Executive Officer)
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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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