AvalonBay Communities AVB reported fourth-quarter 2024 core funds from operations (FFO) per share of $2.80, missing the Zacks Consensus Estimate of $2.83. However, the figure climbed 2.2% from the prior-year quarter’s tally.

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The quarterly results reflect higher property management, other indirect operating expenses and interest expenses. However, a year-over-year increase in same-store residential revenues and same-store net operating income (NOI) have supported the results to an extent.

Total revenues in the quarter came in at $740.5 million, missing the Zacks Consensus Estimate marginally. The figure increased 5.1% on a year-over-year basis.

For full-year 2024, the core FFO per share came in at $11.01, up 3.6% year over year. However, it lagged the Zacks Consensus Estimate of $11.04. Total revenues for full-year 2024 came in at $2.91 billion, an improvement of 5.3% year over year.

AVB’s Fourth Quarter in Detail

In the reported quarter, same-store residential revenues increased 3.2% year over year to $670.1 million. Same-store residential operating expenses rose 5.4% to $208.1 million. As a result, the same-store residential NOI climbed 2.3% to $462.1 million.

Same-store average revenue per occupied home rose to $3,040 in the fourth quarter, up from $3,033 in the third quarter of 2024 and $2,944 in the year-ago quarter. While the same-store economic occupancy of 95.6% rose 10 basis points (bps) sequentially, it shrunk 10 bps year over year. Our estimate for the metric was 95.8%.

However, property management and other indirect operating expenses rose 40.1% year over year to $51.4 million. Interest expenses also increased 19.2% year over year to $59 million.

As of Dec. 31, 2024, AvalonBay had 17 consolidated development communities under construction (expected to contain 6,004 apartment homes and 59,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.25 billion.

AVB’s Portfolio Activity

In the fourth quarter, AVB acquired two wholly owned communities. These include Avalon Townhomes in Bee Cave, TX, comprising 126 townhomes for $49 million and Avalon Lowry in Denver, CO, with 347 apartment homes for $136.5 million.

During the reported quarter, AVB sold three wholly owned communities, namely Avalon New Canaan in New Canaan, CT, Avalon Berkeley in Berkeley, CA, and AVA Ballard in Seattle, WA. These three communities, which contained all 463 apartment homes, were disposed of for $212.5 million, resulting in a gain in accordance with GAAP of $121.8 million.

AVB’s Balance Sheet Position

AVB had $108.6 million in unrestricted cash and cash equivalents and $158.5 million in restricted cash as of Dec. 31, 2024. As of the same date, the company did not have any borrowings outstanding under its $2.25 billion unsecured revolving credit facility or its $500 million unsecured commercial paper note program.

Additionally, its annualized net debt-to-core EBITDAre for the October-December period was 4.2 times, and the unencumbered NOI for the year ended Dec. 31, 2024 was 95%.

2025 Guidance by AVB

For the full year, AVB expects core FFO per share between $11.14 and $11.64, rising 3.5% at the midpoint from the 2024 reported number. The Zacks Consensus Estimate presently stands at $11.57, within the projected range.

Management expects same-store residential revenue growth of 2-4% and an operating expense increase of 3-5.2%. Same-store residential NOI is projected to expand 1.3-3.5%.

AVB’s Dividend Raise

Concurrent with its fourth-quarter earnings release, AvalonBay declared its first-quarter 2025 dividend of $1.75 per share, an increase of 2.9% over the prior quarter’s dividend payment. The new dividend will be paid out on April 15 to shareholders on record as of March 31, 2025.

AVB’s Zacks Rank

AvalonBay currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AvalonBay Communities, Inc. Price, Consensus and EPS Surprise

AvalonBay Communities, Inc. price-consensus-eps-surprise-chart | AvalonBay Communities, Inc. Quote

Performance of Other Residential REITs

Essex Property Trust Inc. ESS reported fourth-quarter 2024 core FFO per share of $3.92, beating the Zacks Consensus Estimate of $3.90. The figure also improved by 2.3% from the year-ago quarter.

Results reflected favorable growth in same-property revenues and NOI. ESS issued first-quarter and full-year 2025 guidance for core FFO per share.

Equity Residential EQR reported a fourth-quarter 2024 normalized FFO per share of $1.00, in line with the Zacks Consensus Estimate. The figure remained unchanged from the prior-year quarter’s tally.

Results reflected a rise in same-store revenues and physical occupancy. EQR issued its guidance for 2025.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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