Upcoming AWS Coverage on Equity Residential Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 3, 2017 / Active Wall St. announces its post-earnings coverage on AvalonBay Communities, Inc. (NYSE: AVB). The Company announced its first quarter fiscal 2017 results on April 26, 2017. The residential real estate investment trust exceeded revenue expectations and also provided forecast for the upcoming quarter. Register with us now for your free membership at:

http://www.activewallst.com/register/

One of AvalonBay Communities' competitors within the REIT - Residential space, Equity Residential (NYSE: EQR), released its Q1 2017 operating results on Tuesday, April 25, 2017 after the close of market. AWS will be initiating a research report on Equity Residential in the coming days.

Today, AWS is promoting its earnings coverage on AVB; touching on EQR. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

For the three months ended March 31, 2017, AvalonBay's total revenue increased by 2.7% to $522.33 million, primarily due to growth in revenue from stabilized operating communities and development communities. The Company's revenue numbers surpassed Wall Street's expectations of $521.3 million.

During Q1 2017, AvalonBay's Established Communities' average rental rates increased 3.1% and economic occupancy increased 0.1%, resulting in an increase in rental revenue of 3.2%. Total revenue for Established Communities increased 3.2% to $388.91 million. Operating expenses for Established Communities increased 1.5% to $112.80 million and NOI for Established Communities increased 3.9% to $276.11 million.

For Q1 2017, AvalonBay reported net income attributable to common stockholders of $235,875,000. This resulted in a decrease in earnings per share (EPS) of 0.6% to $1.72 for the reported quarter compared to diluted EPS of $1.73 in Q1 2016.

AvalonBay's Funds from Operations ("FFO") attributable to common stockholders per share for Q1 2017 decreased 1.4% to $2.04 from $2.07 in Q1 2016. The Company's Core FFO per share for the reported quarter increased 6.1% to $2.09 from $1.97 in the year ago period. AvalonBay's FFO numbers came in below analysts' consensus of $2.11 per share.

The decreases in EPS and FFO per share were attributed to a casualty and impairment loss in the current year's same period compared to a gain in the prior year's comparable period. The change in EPS was also due to an increase in depreciation expense, partially offset by an increase in wholly-owned real estate sales and related gains.

Development Activity

During Q1 2017, AvalonBay completed the development of Avalon Willoughby Square/AVA DoBro, located in Brooklyn, New York; Avalon Huntington Beach, located in Huntington Beach, California and Avalon Laurel, located in Laurel, Maryland. The Company noted that these communities contain an aggregate of 1,548 apartment homes and were constructed for an aggregate total capital cost of $648.80 million.

At March 31, 2017, AvalonBay had 24 communities under construction, which on aggregate basis are expected to contain 7,581 apartment homes and estimated to be completed for an estimated total capital cost of $3.35 billion including the Company's share of joint ventures.

During the reported quarter, AvalonBay added four development rights which, if developed as expected, will contain 1,191 apartment homes and will be developed for an estimated total capital cost of $387.00 million.

AvalonBay's projected total capital cost of development rights increased to $3.4 billion at March 31, 2017, from $3.0 billion at December 31, 2016.

Disposition Activity

Consolidated Apartment Communities

During Q1 2017, AvalonBay sold Avalon Pines, a wholly-owned operating community containing 450 apartments, and the adjacent golf course, located in Coram, New York for $140.00 million, which in accordance to GAAP principles resulted in a gain of $87.95 million and an economic gain of $58.46 million. Avalon Pines generated an unleveraged IRR of 12.5% over a weighted average investment period of 11.2 years.

Liquidity and Capital Markets

As on March 31, 2017, AvalonBay did not have any borrowings outstanding under its $1.50 billion unsecured credit facility, and had $368.72 million in unrestricted cash and cash in escrow. The Company's annualized net debt-to-core EBITDA for Q1 2017 was 5.0x.

During Q1 2017, AvalonBay entered into a $250.00 million variable rate unsecured term loan, of which $100.00 matures in February 2022 with stated pricing of LIBOR plus 0.90%, and $150.00 matures in February 2024 with stated pricing of LIBOR plus 1.50%. At March 31, 2017, the Company had not drawn any of the amounts available under the term loan.

Under the current continuous equity program established in December 2015, AvalonBay sold 306,177 shares of common stock at an average sales price of $186.44 per share, for net proceeds of $56.23 million in the reported quarter.

Outlook

For Q2 2017, AvalonBay expects its FFO per share in the range of $2.18 to $2.24 and core FFO per share in the band of $2.07 to $2.13.

Stock Performance

On Tuesday, May 02, 2017, the stock closed the trading session at $191.20, slightly up 0.09% from its previous closing price of $191.02. A total volume of 685.80 thousand shares have exchanged hands, which was higher than the 3-month average volume of 664.38 thousand shares. AvalonBay Communities' stock price advanced 11.18% in the last three months, 15.95% in the past six months, and 9.02% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 8.77%. The stock is trading at a PE ratio of 25.49 and has a dividend yield of 2.97%.

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SOURCE: Active Wall Street