Exhibit

Exhibit 99.2

For Immediate News Release

May 6, 2020

AVALONBAY COMMUNITIES, INC. ANNOUNCES

FIRST QUARTER 2020 OPERATING RESULTS

(Arlington, VA) AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported today that Net Income Attributable to Common Stockholders for the three months ended March 31, 2020 was $167,971,000. This resulted in a decrease in Earnings per Share – diluted (“EPS”) for the three months ended March 31, 2020 of 3.3% to $1.19 from $1.23 for the prior year period.

Funds from Operations attributable to common stockholders - diluted (“FFO”) per share for the three months ended March 31, 2020 decreased 1.3% to $2.28 from $2.31 for the prior year period. Core FFO per share (as defined in this release) for the three months ended March 31, 2020 increased 3.9% to $2.39 from $2.30 for the prior year period.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended March 31, 2020 to its results for the prior year period:




Q1 2020 Results Compared to Q1 2019
	Per Share (1)
	EPS			FFO			Core FFO
Q1 2019 per share reported results	$	1.23		$	2.31		$	2.30
Established Community NOI	0.08			0.08			0.08
Development and Other Stabilized Community NOI	0.10			0.10			0.10
Capital markets and transaction activity	(0.12		)	(0.13		)	(0.06		)
Joint venture income	(0.01		)	(0.01		)	(0.01		)
Overhead and other	(0.07		)	(0.07		)	(0.02		)
Gain on sale of real estate and depreciation expense	(0.02		)	—			—
Q1 2020 per share reported results	$	1.19		$	2.28		$	2.39

(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Attachment 12, table 3.

Established Communities Operating Results for the Three Months Ended March 31, 2020 Compared to the Prior Year Period

For Established Communities, total revenue increased $16,127,000, or 3.0%, to $547,956,000. Operating expenses for Established Communities increased $4,819,000, or 3.2%, to $156,311,000. NOI for Established Communities increased $11,308,000, or 3.0%, to $391,645,000. Rental revenue for Established Communities increased 3.1% as a result of an increase in Average Rental Rates of 2.7% and Economic Occupancy of 0.4%.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the three months ended March 31, 2020 compared to the three months ended March 31, 2019:




Q1 2020 Compared to Q1 2019
	Rental Revenue (1)		Opex (2)		NOI		% of NOI (3)
New England	3.8	%	5.2	%	3.1	%	14.1	%
Metro NY/NJ	2.0	%	2.4	%	1.8	%	22.1	%
Mid-Atlantic	3.8	%	(0.2	)%	5.4	%	15.9	%
Pacific NW	3.3	%	4.0	%	3.1	%	6.3	%
No. California	3.0	%	6.0	%	2.2	%	20.3	%
So. California	3.0	%	2.6	%	3.2	%	20.5	%
Expansion Mkts	1.2	%	6.5	%	(2.4	)%	0.8	%
Total	3.1	%	3.2	%	3.0	%	100.0	%

(1) See Attachment 4, Quarterly Rental Revenue and Occupancy Changes, for additional detail.
(2) See Attachment 6, Operating Expenses ("Opex"), for discussion of variances.
(3) Represents % of total NOI for Q1 2020, including amounts related to communities that have been sold or that are classified as held for sale.

COVID-19 Policy and Operational Updates

Resident and Associate Update

The Company has taken various actions in response to the COVID-19 pandemic to adjust our business operations and to address the needs of our residents and associates. The Company is committed to the health and safety of its associates and residents and has implemented many new protocols based on the Centers for Disease Control (CDC) and other government-mandated or recommended guidelines, including establishing social-distancing procedures and other safety and operating measures. The Company has made changes to its daily operations at its communities that include the following:


•	community office practices have been modified to minimize in-person contact, with resident support being provided through phone and e-mail communications where possible and by leveraging the Company's digital solutions and centralized Customer Care Center;


•	communities have implemented enhanced cleaning and disinfecting protocols and have closed common area amenities;


•	apartment maintenance requests are being completed for essential or emergency services only and maintenance associates have been instructed on proper personal protective equipment (PPE) to use when performing work; and


•	prospect tours are generally being completed on a self-guided basis or through virtual channels.

The Company has also adopted certain measures to help mitigate the financial impact arising from the pandemic on its residents, including the following:


•	providing flexible lease renewal options at no rent increase for leases expiring through June 30, 2020;


•	creating payment plans for residents who are unable to pay their rent because they are impacted by this pandemic; and


•	waiving late fees and certain other customary fees associated with apartment rentals.

To support its associates during this difficult time, the Company has elected to (i) adopt new, temporary leave policies and is providing all full- and part-time associates with up to six weeks of emergency paid leave to use in the event they have been materially impacted by COVID-19, as well as (ii) pay the full cost of testing and inpatient treatment resulting from COVID-19 for members of its healthcare plan.

April Established Communities Collections Update

The following table provides an update for April 2020 residential revenue collections for Established Communities, through April 30, 2020, detailed by (i) major customer segment and (ii) percentage of rent collected as compared to rent deferred and uncollected. Billed residential revenue consists of apartment base rent charged to residents and other rentable items, including parking and storage rent, along with pet and other fees in accordance with residential leases ("Billed Residential Revenue"). Collected residential revenue represents the portion of Billed Residential Revenue that has been collected and satisfied ("Collected Residential Revenue"). The deferred and uncollected portion of Billed Residential Revenue represents the portion that is either covered by an established payment plan where rent is deferred to a future period or is otherwise not yet collected ("Deferred and Uncollected Residential Revenue").




Established Communities Collections - April 2020 (1)
	Billed Residential Revenue		Collected Residential Revenue		Deferred and Uncollected Residential Revenue
Residential Revenue
Market rent apartments	94.3	%	94.5	%	5.5	%
Affordable apartments	2.8	%	92.0	%	8.0	%
Corporate apartments	2.9	%	74.0	%	26.0	%
Total Residential Revenue	100.0	%	93.9	%	6.1	%

AVB Residential Revenue benchmark (2)			97.9	%	2.1	%
April 2020 Collected Residential Revenue as a % of AVB benchmark			95.9	%

(1) Information presented above excludes (i) billed and collected transactional fees, such as application and cancellation fees and (ii) certain fees that would have been billed and collected under the lease terms, such as common area amenity, late and credit card fees, which were waived in April 2020 due to the closure of the Company’s amenity spaces or to mitigate the financial impact of COVID-19 on residents. The fees waived in (ii) above averaged $1,400,000 per month for the period from April 2019 to March 2020.
(2) Amounts represent the Company's historical weighted average monthly percentages as of the last day of the month for the period of April 2019 to March 2020.

Retail revenue for Established Communities represented 1.4% of the total revenue for Established Communities for full year 2019. For April 2020, collected retail revenue and deferred and uncollected retail revenue was 44% and 56%, respectively.

The impact from COVID-19 on the Company's consolidated results of operations, including expectations of dispositions of real estate, will be dictated by the duration and severity of the pandemic, and how quickly and to what extent normal economic and operating conditions resume. Given those factors are beyond the Company's control and knowledge, the adverse impact of the pandemic on the Company's results of operations cannot be reasonably estimated, and could be

material. In addition, the Company's historical results, including results for the three months ended March 31, 2020 and information for the month ended April 30, 2020, may not be indicative of results for future periods.

Development Activity

During the three months ended March 31, 2020, the Company completed the development of three apartment communities:


•	Avalon Teaneck, located in Teaneck, NJ;


•	Avalon North Creek, located in Bothell, WA; and


•	Avalon Norwood, located in Norwood, MA.

These communities contain an aggregate of 762 apartment homes and were constructed for a Total Capital Cost of $217,000,000.

The Company has not started the construction of any new development communities during the three months ended March 31, 2020 and through the date of this release, and will evaluate future starts on an individual basis, based on evolving economic and market conditions.

At March 31, 2020, the Company had 19 Development Communities under construction that in the aggregate are expected to contain 6,198 apartment homes and 64,000 square feet of retail space. Estimated Total Capital Cost at completion for these Development Communities is $2,323,000,000 at share. As of March 31, 2020, the Company has an estimated remaining Total Capital Cost of $873,000,000 to invest over the next several years, including the 19 Development Communities under construction and recently completed Development Communities.

The projected Total Capital Cost of Development Rights at March 31, 2020 decreased to $4.1 billion from $4.2 billion at December 31, 2019.

COVID-19 Development Update

As of April 30, 2020, construction at six of the Company's Development Communities had been temporarily suspended after considering state and local regulations and/or advisories, and construction at many of the remaining Development Communities had been slowed due to the impact of safety precautions, labor availability and inspection constraints. As of May 4, 2020, the Company is in the process of restarting construction at four of the six communities that had been temporarily suspended, after changes in state and local advisories in Washington state and Northern California. The Company may be required to, or may in its discretion, temporarily suspend ongoing construction at one or more of

its remaining Development Communities as a result of either governmental actions or social or economic conditions arising as a result of the COVID-19 pandemic.

Disposition Activity

During the three months ended March 31, 2020, the Company sold Avalon Shelton, a wholly-owned operating community, located in Shelton, CT. Avalon Shelton contains 250 apartment homes and was sold for $64,750,000, resulting in a gain in accordance with GAAP of $24,413,000 and an Economic Gain of $14,928,000.

During the three months ended March 31, 2020, the Company sold 36 of the 172 residential condominiums at The Park Loggia, located in New York, NY, for gross proceeds of $105,607,000. At March 31, 2020, 64% of the 67,000 square feet of retail space has been leased. In addition, subsequent to quarter end and through the date of this release, the Company sold five residential condominiums for gross proceeds of $23,292,000.

Liquidity and Capital Markets

At March 31, 2020, the Company had $750,000,000 outstanding under its $1,750,000,000 unsecured credit facility. Including amounts drawn on the unsecured credit facility, the Company had $868,421,000 in unrestricted cash and cash in escrow. As of April 30, 2020, the Company has $215,000,000 outstanding under its unsecured credit facility, after having used unrestricted cash for net repayments of $535,000,000 during April 2020.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the first quarter of 2020 was 4.6 times and Unencumbered NOI (as defined in this release) was 93%.

During the three months ended March 31, 2020, the Company had the following debt activity:


•	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 $694,701,000. The notes mature in March 2030 and were issued with a 2.30% coupon. The effective interest rate of the notes is 2.68%, including the impact of an interest rate hedge and offering costs.


•	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 composed of prepayment penalties and the non-cash write-off of unamortized deferred financing costs.


•	The Company obtained a $51,000,000 mortgage note with a maturity date of March 2027 with a contractual interest rate of 2.38%, in conjunction with the refinancing of $50,616,000 of secured indebtedness that had a contractual interest rate of 3.08%.

Other Matters

The Company will hold a conference call on May 7, 2020 at 12:00 PM ET to review and answer questions about this release, its first quarter 2020 results, the Attachments (described below) and related matters. To participate on the call, dial 888-394-8218 and use conference id: 8962631.

To hear a replay of the call, which will be available from May 7, 2020 at 5:00 PM ET to May 14, 2020 at 5:00 PM ET, dial 888-203-1112 and use conference id: 8962631. A webcast of the conference call will also be available at http://www.avalonbay.com/earnings, and an on-line playback of the webcast will be available for at least seven days following the call.

The Company produces Earnings Release Attachments (the "Attachments") that provide detailed information regarding operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company's website at http://www.avalonbay.com/earnings. To receive future press releases via e-mail, please submit a request through http://investors.avalonbay.com/email_notification.

In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at http://www.avalonbay.com/earnings subsequent to this release and before the market opens on May 7, 2020.

About AvalonBay Communities, Inc.

As of March 31, 2020, the Company owned or held a direct or indirect ownership interest in 296 apartment communities containing 86,596 apartment homes in 11 states and the District of Columbia, of which 19 communities were under

development. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion markets consisting of Southeast Florida and Denver, Colorado (the "Expansion Markets"). More information may be found on the Company’s website at http://www.avalonbay.com. For additional information, please contact Jason Reilley, Vice President of Investor Relations, at 703-317-4681.

Forward-Looking Statements

This release, including its Attachments, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which you can identify by the Company’s use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook” and similar expressions that do not relate to historical matters, are based on the Company’s expectations, forecasts and assumptions at the time of this release, which may not be realized and involve risks and uncertainties that cannot be predicted accurately or that might not be anticipated. These could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Risks and uncertainties that might cause such differences include those related to the COVID-19 pandemic, about which there are many uncertainties, including (i) the duration and severity of the pandemic and (ii) the effect on the multifamily industry and the general economy of measures taken by businesses and the government to prevent the spread of the novel coronavirus and relieve economic distress of consumers, such as governmental limitations on the ability of multifamily owners to evict residents who are delinquent in the payment of their rent. Due to this uncertainty we are not able at this time to estimate the effect of these factors on our business, but the adverse impact of the pandemic on our business, results of operations, cash flows and financial condition could be material. In addition, the effects of the pandemic are likely to heighten the following risks, which we routinely face in our business: we may abandon development or redevelopment opportunities for which we have already incurred costs; adverse capital and credit market conditions may affect our access to various sources of capital and/or cost of capital, which may affect our business activities, earnings and common stock price, among other things; changes in local employment conditions, demand for apartment homes, supply of competitive housing products, landlord-tenant laws and other economic or regulatory conditions may result in lower than expected occupancy and/or rental rates and

adversely affect the profitability of our communities; delays in completing development, redevelopment and/or lease-up may result in increased financing and construction costs and may delay and/or reduce the profitability of a community; debt and/or equity financing for development, redevelopment or acquisitions of communities may not be available or may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; expenses may result in communities that we develop or redevelop failing to achieve expected profitability; our assumptions concerning risks relating to our lack of control of joint ventures and our abilities to successfully dispose of certain assets may not be realized; our assumptions and expectations in our financial outlook may prove to be too optimistic; and the timing and net proceeds of condominium sales may not equal our current expectations. Additional discussions of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements (and which risks may also be heightened because of the COVID-19 pandemic) appear in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 under the heading “Risk Factors” and under the heading “Management’s Discussion and Analysis of Financial 2019 and Results of Operations - Forward-Looking Statements” and in subsequent quarterly reports on Form 10-Q.

The Company does not undertake a duty to update forward-looking statements. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.

Definitions and Reconciliations

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined, reconciled and further explained on Attachment 12, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 12 is included in the full earnings release available at the Company’s website at http://www.avalonbay.com/earnings.

FIRST QUARTER 2020

Supplemental Operating and Financial Data

Table of Contents



Company Profile
Condensed Consolidated Operating Information...........................................................................................................		Attachment 1
Condensed Consolidated Balance Sheets....................................................................................................................		Attachment 2
Sequential Operating Information by Business Segment..............................................................................................		Attachment 3

Market Profile - Established Communities
Quarterly Rental Revenue and Occupancy Changes....................................................................................................		Attachment 4
Sequential Quarterly Rental Revenue and Occupancy Changes..................................................................................		Attachment 5
Operating Expenses ("Opex")........................................................................................................................................		Attachment 6

Development, Joint Venture and Debt Profile
Expensed Community Maintenance Costs and Capitalized Community Expenditures.................................................		Attachment 7
Development Communities............................................................................................................................................		Attachment 8
Future Development......................................................................................................................................................		Attachment 9
Unconsolidated Real Estate Investments......................................................................................................................		Attachment 10
Debt Structure and Select Debt Metrics.........................................................................................................................		Attachment 11

Definitions and Reconciliations
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms...................................................		Attachment 12

The following is a "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The projections and estimates contained in the following attachments, including but not limited to Attachments 8, 9, and 12 contain forward-looking statements that involve risks and uncertainties, and actual results may differ materially from those projected in such statements. Risks associated with the Company's development, redevelopment, construction, and lease-up activities which could impact the forward-looking statements are discussed in the paragraph titled "Forward-Looking Statements" in the release that accompanies, and should be read in conjunction with, these attachments. These and other risks are also described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and the Company's Quarterly Reports on Form 10-Q for subsequent quarters, and could cause actual results to differ materially from such projections and estimates.

Attachment 1

AvalonBay Communities, Inc.

Condensed Consolidated Operating Information

March 31, 2020

(Dollars in thousands except per share data)

(unaudited)



	Q1			Q1
	2020			2019			% Change
Revenue:
Rental and other income	$	600,644		$	565,045		6.3	%
Management, development and other fees	1,007			1,139			(11.6	)%
Total	601,651			566,184			6.3	%
Operating expenses:
Direct property operating expenses, excluding property taxes	108,181			102,586			5.5	%
Property taxes	67,026			61,329			9.3	%
Property management and other indirect operating expenses	23,812			20,869			14.1	%
Total operating expenses	199,019			184,784			7.7	%

Interest expense, net	(55,914		)	(47,892		)	16.8	%
Loss on extinguishment of debt, net	(9,170		)	(280		)	3,175.0	%
General and administrative expense (1)	(17,320		)	(13,706		)	26.4	%
Joint venture income (loss)	1,175			(1,060		)	N/A
Expensed transaction, development and other pursuit costs, net of recoveries	(3,334		)	(622		)	436.0	%
Depreciation expense	(177,911		)	(162,057		)	9.8	%
Gain on sale of communities	24,436			14,835			64.7	%
Gain on other real estate transactions	43			267			(83.9	)%
Gain on for-sale condominiums, net of marketing and administrative costs (2)	3,460			(473		)	N/A
Income before income taxes	168,097			170,412			(1.4	)%

Income tax (expense) benefit (2)	(91		)	6			N/A
Net income	168,006			170,418			(1.4	)%

Net income attributable to noncontrolling interests	(35		)	(52		)	(32.7	)%
Net income attributable to common stockholders	$	167,971		$	170,366		(1.4	)%

Net income attributable to common stockholders per common share - basic	$	1.19		$	1.23		(3.3	)%
Net income attributable to common stockholders per common share - diluted	$	1.19		$	1.23		(3.3	)%

FFO (2)	$	320,975		$	320,288		0.2	%
Per common share - diluted	$	2.28		$	2.31		(1.3	)%

Core FFO (2)	$	335,757		$	319,876		5.0	%
Per common share - diluted	$	2.39		$	2.30		3.9	%

Dividends declared - common	$	224,079		$	212,166		5.6	%
Per common share	$	1.59		$	1.52		4.6	%

Average shares and participating securities outstanding - basic	140,734,522			138,738,917			1.4	%
Average shares outstanding - diluted	140,777,873			138,832,201			1.4	%
Total outstanding common shares and operating partnership units	140,740,840			139,410,722			1.0	%


(1)	Amounts include severance related costs and legal settlement proceeds as detailed in Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 3.


(2)	For additional detail, see Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 3.

Attachment 2

AvalonBay Communities, Inc.

Condensed Consolidated Balance Sheets

March 31, 2020

(Dollars in thousands)

(unaudited)




	March 31,			December 31,
	2020			2019

Real estate	$	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 (1)	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 (2)	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
Other assets	405,638			360,418

Total assets	$	19,891,336		$	19,121,051

Unsecured notes, net	$	6,404,432		$	6,358,648
Unsecured credit facility (2)	750,000			—
Notes payable, net	937,025			937,642
Resident security deposits	61,717			61,752
Other liabilities	822,920			769,559
Total liabilities	8,976,094			8,127,601

Redeemable noncontrolling interests	2,700			3,252
Equity	10,912,542			10,990,198

Total liabilities and equity	$	19,891,336		$	19,121,051

(1) Consists of the aggregate carrying value of the unsold for-sale residential condominiums of The Park Loggia.

(2) As of March 31, 2020, the Company had drawn $750,000 from its $1,750,000 unsecured credit facility. As of April 30, 2020, the Company has $215,000 outstanding under its unsecured credit facility, utilizing unrestricted cash for the net repayments of $535,000 during April 2020.

Attachment 3

AvalonBay Communities, Inc.

Sequential Operating Information by Business Segment (1)

March 31, 2020

(Dollars in thousands, except per home data)

(unaudited)



	Total	Quarter Ended			Quarter Ended
	Apartment	March			December
	Homes	31, 2020			31, 2019
RENTAL REVENUE (2)
Established	69,930	$	547,514		$	545,424
Other Stabilized (3)	5,397	35,114			32,164
Development/Redevelopment (4)	7,536	15,749			10,649
Total Consolidated Communities	82,863	$	598,377		$	588,237

OPERATING EXPENSE
Established		$	156,311		$	153,469
Other Stabilized (3)		11,988			9,938
Development/Redevelopment (4)		6,380			4,539
Total Consolidated Communities		$	174,679		$	167,946

NOI (5)
Established		$	391,645		$	392,561
Other Stabilized (3)		23,496			22,724
Development/Redevelopment (4)(6)		9,394			6,113
Total Consolidated Communities		$	424,535		$	421,398

AVERAGE REVENUE PER OCCUPIED HOME (7)
Established		$	2,709		$	2,707
Other Stabilized (3)		$	2,286		$	2,280

ECONOMIC OCCUPANCY (7)
Established		96.3		%	96.0		%
Other Stabilized (3)		94.6		%	94.5		%

ESTABLISHED COMMUNITIES TURNOVER (8)
Current year period / Prior year period		39.5% / 41.4%			40.4% / 42.4%



(1)	Includes consolidated communities and excludes amounts related to communities that have been sold or that are classified as held for sale.
(2)	Rental revenue excludes non-qualified REIT income and business interruption insurance proceeds.
(3)	Results for these communities for quarters prior to January 1, 2020 may reflect community operations prior to stabilization, including periods of lease-up, such that occupancy levels are below what would be considered stabilized.
(4)	The Company had no Redevelopment Communities for the periods presented.
(5)	See Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.
(6)	Amount for the three months ended March 31, 2020 includes $1,562 of NOI from the retail space at The Park Loggia.
(7)	For per home rent projections and Economic Occupancy for Development Communities currently under construction and/or completed in Q1 2020, see Attachment 8 - Development Communities.
(8)	Turnover represents the annualized number of units turned over during the period, divided by the total number of apartment homes for Established Communities for the respective reporting period.
(9)	Expansion market communities’ effective like-term rent change is not available as the comparable prior year period is either prior to the acquisition or stabilization of the communities in these markets.




ESTABLISHED COMMUNITIES LIKE-TERM EFFECTIVE RENT CHANGE (5)

	Q1 2020	Q1 2019
New England	1.7%	3.0%
Metro NY/NJ	1.5%	2.2%
Mid-Atlantic	2.3%	2.0%
Pacific NW	4.9%	2.5%
No. California	1.4%	3.6%
So. California	1.1%	2.6%
Expansion Markets	3.0%	N/A (9)
Total	1.7%	2.7%

Attachment 4

AvalonBay Communities, Inc.

Quarterly Rental Revenue and Occupancy Changes - Established Communities (1)

March 31, 2020

(unaudited)



	Apartment Homes	Average Rental Rates (2)						Economic Occupancy						Rental Revenue ($000s)
																					% change excl. retail (3)
		Q1 20		Q1 19		% Change		Q1 20		Q1 19		% Change		Q1 20		Q1 19		% Change			% change excl. retail (3)
New England
Boston, MA	8,641	$	2,882	$	2,777	3.8	%	95.3	%	94.9	%	0.4	%	$	71,186	$	68,344	4.2	%			4.2	%
Fairfield, CT	1,414	2,582		2,548		1.3	%	96.4	%	96.1	%	0.3	%	10,555		10,384		1.6	%			2.0	%
New England	10,055	2,840		2,744		3.5	%	95.4	%	95.1	%	0.3	%	81,741		78,728		3.8	%			3.9	%

Metro NY/NJ
New York City, NY	3,788	3,832		3,744		2.4	%	95.9	%	95.4	%	0.5	%	41,783		40,597		2.9	%			3.4	%
New York - Suburban	4,079	3,202		3,169		1.0	%	95.7	%	95.5	%	0.2	%	37,495		37,036		1.2	%			1.2	%
New Jersey	5,401	2,636		2,588		1.9	%	96.8	%	96.8	%	0.0	%	41,368		40,599		1.9	%			2.0	%
Metro NY/NJ	13,268	3,152		3,098		1.7	%	96.2	%	95.9	%	0.3	%	120,646		118,232		2.0	%			2.2	%

Mid-Atlantic
Washington Metro	12,276	2,353		2,272		3.6	%	96.4	%	96.2	%	0.2	%	83,538		80,475		3.8	%			3.7	%
Baltimore, MD	1,562	1,795		1,745		2.9	%	96.3	%	95.8	%	0.5	%	8,100		7,835		3.4	%			3.4	%
Mid-Atlantic	13,838	2,290		2,213		3.5	%	96.4	%	96.1	%	0.3	%	91,638		88,310		3.8	%			3.7	%

Pacific Northwest	4,116	2,384		2,326		2.5	%	97.2	%	96.4	%	0.8	%	28,608		27,696		3.3	%			3.4	%

Northern California
San Jose, CA	3,840	3,214		3,123		2.9	%	96.9	%	96.6	%	0.3	%	35,859		34,739		3.2	%			3.2	%
Oakland-East Bay, CA	3,847	2,606		2,580		1.0	%	97.2	%	96.3	%	0.9	%	29,223		28,666		1.9	%			2.0	%
San Francisco, CA	3,675	3,657		3,562		2.7	%	97.1	%	96.1	%	1.0	%	39,145		37,740		3.7	%			3.8	%
Northern California	11,362	3,152		3,081		2.3	%	97.0	%	96.3	%	0.7	%	104,227		101,145		3.0	%			3.1	%

Southern California
Los Angeles, CA	11,492	2,500		2,444		2.3	%	96.3	%	95.5	%	0.8	%	83,055		80,559		3.1	%			3.0	%
Orange County, CA	2,821	2,237		2,191		2.1	%	96.4	%	96.7	%	(0.3	)%	18,244		17,927		1.8	%			2.4	%
San Diego, CA	2,066	2,221		2,174		2.2	%	97.5	%	95.2	%	2.3	%	13,422		12,842		4.5	%			4.5	%
Southern California	16,379	2,420		2,369		2.2	%	96.5	%	95.7	%	0.8	%	114,721		111,328		3.0	%			3.1	%

Expansion Markets	912	2,304		2,248		2.5	%	94.1	%	95.4	%	(1.3	)%	5,933		5,865		1.2	%			1.0	%

Total Established	69,930	$	2,709	$	2,639	2.7	%	96.3	%	95.9	%	0.4	%	$	547,514	$	531,304	3.1	%	(4)		3.1	%


(1)	Established Communities are communities with Stabilized Operations as of January 1, 2019 such that a comparison of Q1 2019 to Q1 2020 is meaningful.


(2)	Reflects the effect of concessions amortized over the average lease term.


(3)	Represents the change in rental revenue if the Company were to exclude rental revenue from retail activities.


(4)	With concessions reflected on a cash basis, rental revenue from Established Communities increased 2.9% from Q1 2019 to Q1 2020. See Attachment 12, table 8, for additional detail and a reconciliation.

Attachment 5

AvalonBay Communities, Inc.

Sequential Quarterly Rental Revenue and Occupancy Changes - Established Communities (1)

March 31, 2020

(unaudited)



	Apartment Homes	Average Rental Rates (2)						Economic Occupancy						Rental Revenue ($000s)
																				% change excl. retail (3)
		Q1 20		Q4 19		% Change		Q1 20		Q4 19		% Change		Q1 20		Q4 19		% Change		% change excl. retail (3)
New England
Boston, MA	8,641	$	2,882	$	2,890	(0.3	)%	95.3	%	95.4	%	(0.1	)%	$	71,186	$	71,472	(0.4	)%		(0.4	)%
Fairfield, CT	1,414	2,582		2,602		(0.8	)%	96.4	%	95.8	%	0.6	%	10,555		10,573		(0.2	)%		0.1	%
New England	10,055	2,840		2,848		(0.3	)%	95.4	%	95.5	%	(0.1	)%	81,741		82,045		(0.4	)%		(0.3	)%

Metro NY/NJ
New York City, NY	3,788	3,832		3,821		0.3	%	95.9	%	96.5	%	(0.6	)%	41,783		41,917		(0.3	)%		(0.5	)%
New York - Suburban	4,079	3,202		3,217		(0.5	)%	95.7	%	95.3	%	0.4	%	37,495		37,527		(0.1	)%		(0.1	)%
New Jersey	5,401	2,636		2,645		(0.3	)%	96.8	%	96.9	%	(0.1	)%	41,368		41,543		(0.4	)%		(0.4	)%
Metro NY/NJ	13,268	3,152		3,157		(0.2	)%	96.2	%	96.3	%	(0.1	)%	120,646		120,987		(0.3	)%		(0.3	)%

Mid-Atlantic
Washington Metro	12,276	2,353		2,349		0.2	%	96.4	%	96.0	%	0.4	%	83,538		83,029		0.6	%		0.7	%
Baltimore, MD	1,562	1,795		1,781		0.8	%	96.3	%	96.4	%	(0.1	)%	8,100		8,051		0.6	%		0.6	%
Mid-Atlantic	13,838	2,290		2,285		0.2	%	96.4	%	96.0	%	0.4	%	91,638		91,080		0.6	%		0.7	%

Pacific Northwest	4,116	2,384		2,379		0.2	%	97.2	%	96.2	%	1.0	%	28,608		28,266		1.2	%		1.3	%

Northern California
San Jose, CA	3,840	3,214		3,204		0.3	%	96.9	%	96.2	%	0.7	%	35,859		35,499		1.0	%		1.0	%
Oakland-East Bay, CA	3,847	2,606		2,622		(0.6	)%	97.2	%	96.6	%	0.6	%	29,223		29,223		0.0	%		0.0	%
San Francisco, CA	3,675	3,657		3,624		0.9	%	97.1	%	96.4	%	0.7	%	39,145		38,522		1.6	%		1.2	%
Northern California	11,362	3,152		3,141		0.4	%	97.0	%	96.4	%	0.6	%	104,227		103,244		1.0	%		0.8	%

Southern California
Los Angeles, CA	11,492	2,500		2,498		0.1	%	96.3	%	95.8	%	0.5	%	83,055		82,539		0.6	%		0.5	%
Orange County, CA	2,821	2,237		2,238		0.0	%	96.4	%	96.1	%	0.3	%	18,244		18,197		0.3	%		0.7	%
San Diego, CA	2,066	2,221		2,216		0.2	%	97.5	%	96.6	%	0.9	%	13,422		13,272		1.1	%		1.1	%
Southern California	16,379	2,420		2,419		0.0	%	96.5	%	95.9	%	0.6	%	114,721		114,008		0.6	%		0.6	%

Expansion Markets	912	2,304		2,273		1.4	%	94.1	%	93.1	%	1.0	%	5,933		5,794		2.4	%		2.4	%

Total Established	69,930	$	2,709	$	2,707	0.1	%	96.3	%	96.0	%	0.3	%	$	547,514	$	545,424	0.4	%		0.4	%


(1)	Established Communities are communities with Stabilized Operations as of January 1, 2019.


(2)	Reflects the effect of concessions amortized over the average lease term.


(3)	Represents the change in rental revenue if the Company were to exclude rental revenue from retail activities.

Attachment 6

AvalonBay Communities, Inc.

Operating Expenses ("Opex") - Established Communities (1)

March 31, 2020

(Dollars in thousands)

(unaudited)



	Q1 2020		Q1 2019		% Change		Q1 2020 % of Total Opex

Property taxes (2)	$	59,756	$	56,724	5.3	%	38.2	%
Payroll (3)	36,439		34,791		4.7	%	23.3	%
Repairs & maintenance	23,390		23,098		1.3	%	15.0	%
Utilities (4)	14,837		15,422		(3.8	)%	9.5	%
Office operations (5)	12,954		12,065		7.4	%	8.3	%
Insurance	6,230		6,298		(1.1	)%	4.0	%
Marketing (6)	2,705		3,094		(12.6	)%	1.7	%
Total Established Communities Operating Expenses	$	156,311	$	151,492	3.2	%	100.0	%


(1)	Operating expenses for Established Communities exclude indirect costs for corporate-level property management and other support-related expenses.


(2)	Property taxes increased for the three months ended March 31, 2020 over the prior year period primarily due to increased assessments and rates across the portfolio, led by New England and the Pacific Northwest, as well as a successful appeal in Northern California in the prior year period.


(3)	Payroll costs increased for the three months ended March 31, 2020 over the prior year period primarily due to increased benefits costs and merit increases in associate compensation, partially offset by decreased bonuses and a reduction in the number of on-site leasing and management associates.

(4)

Utilities represents aggregate utility costs, net of resident reimbursements. The decrease for the three months ended March 31, 2020 from the prior year period is primarily due to a decrease in gas consumption due to warmer weather and a decrease in electric consumption resulting from the Company's solar and lighting sustainability initiatives, partially offset by an increase in costs for trash, water and sewer.


(5)	Office operations includes administrative costs, land lease expense and association and license fees. The increase for the three months ended March 31, 2020 over the prior year period is primarily due to increased legal costs related to evictions and audit fees.


(6)	Marketing costs decreased for the three months ended March 31, 2020 from the prior year period primarily due to decreased customer service incentives and call center costs related to centralized lead management.

Attachment 7

AvalonBay Communities, Inc.

Expensed Community Maintenance Costs and Capitalized Community Expenditures

March 31, 2020

(Dollars in thousands except per home data)

(unaudited)




		Q1 2020 Maintenance Expensed Per Home						Categorization of Q1 2020 Additional Capitalized Value (2)
Current Communities	Apartment Homes (1)	Carpet Replacement		Other Maintenance (3)		Total		Acquisitions, Construction, Redevelopment & Dispositions (4)				NOI Enhancing (5)(6)		Asset Preservation		Q1 2020 Additional Capitalized Value			NOI Enhancing Per Home (6)		Asset Preservation Per Home

Established Communities	69,930	$	26	$	567	$	593	$	10,021		(7)	$	9,561	$	20,708	$	40,290		$	137	$	296
Other Stabilized Communities	5,397	17		529		546		2,315			(8)	1,485		139		3,939			$	275	$	26
Development/Redevelopment Communities (9)	7,536	—		170		170		145,864				—		—		145,864			—		—
Dispositions	—	—		—		—		(40,641		)		—		—		(40,641		)	—		—
Total	82,863	$	23	$	529	$	552	$	117,559			$	11,046	$	20,847	$	149,452		N/A		N/A



(1)	Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale.
(2)	Policy is to capitalize expenditures for the acquisition or development of new assets or expenditures that extend the life of existing assets that will benefit the Company for periods greater than a year.
(3)	Other maintenance includes maintenance, landscaping and redecorating costs, as well as maintenance related payroll expense.
(4)	Includes the write-off of impaired assets and additional capitalized spend related to recognized casualty losses, if applicable.
(5)	Includes $98 in rebates received during the three months ended March 31, 2020, primarily related to NOI Enhancing Capex incurred during 2019.
(6)	This Attachment excludes capitalized expenditures for the retail component of communities, which the Company classifies as NOI Enhancing. Established Communities and Other Stabilized Communities exclude $803 and $7, respectively, related to retail space.
(7)	Consists primarily of redevelopment spend at communities maintaining stabilized occupancy during the redevelopment.
(8)	Represents acquired communities, including those from joint venture partners, coupled with commitment close-outs and construction true-ups on recently constructed communities.
(9)	Represents communities that were under construction/reconstruction during the period, including communities where construction/reconstruction has been completed. The Company had no Redevelopment Communities for the three months ended March 31, 2020.




Other Capitalized Costs
	Interest		Overhead
Q2 2019	$	17,127	$	12,605
Q3 2019	$	15,443	$	12,538
Q4 2019	$	12,664	$	11,250
Q1 2020	$	11,498	$	13,433

Attachment 8

AvalonBay Communities, Inc.

Development Communities as of March 31, 2020

(unaudited)




Community Information			Number	Total			Schedule (1)						%		%		%			%
			of	Capital						Full Qtr	Avg Rent		Complete		Leased		Occupied			Economic
			Apt	Cost (1)				Initial		Stabilized	Per									Occ.
Development Name		Location	Homes	(millions)			Start	Occupancy	Complete	Ops	Home (1)		As of April 24, 2020							Q1 '20

	Communities Under Construction:
1.	Avalon Public Market	Emeryville, CA	289	$	175		Q4 2016	Q3 2019	Q3 2020	Q4 2020	$	3,605	76	%	66	%		63	%	58	%
2.	Avalon Yonkers	Yonkers, NY	590	189			Q4 2017	Q3 2019	Q1 2021	Q3 2021	2,845		43	%	38	%		32	%	25	%
3.	AVA Hollywood (2)	Hollywood, CA	695	373			Q4 2016	Q4 2019	Q1 2021	Q1 2021	3,515		46	%	30	%		25	%	19	%
4.	Avalon Towson	Towson, MD	371	114			Q4 2017	Q1 2020	Q4 2020	Q2 2021	2,065		18	%	7	%		4	%	1	%
5.	Avalon Walnut Creek II	Walnut Creek, CA	200	111			Q4 2017	Q2 2020	Q4 2020	Q2 2021	3,465		—		12	%		—		—
6.	Avalon Doral	Doral, FL	350	114			Q2 2018	Q2 2020	Q3 2020	Q4 2021	2,275		—		—			—		—
7.	Avalon 555 President	Baltimore, MD	400	139			Q3 2018	Q3 2020	Q3 2021	Q4 2021	2,615		—		—			—		—
8.	Avalon Old Bridge	Old Bridge, NJ	252	66			Q3 2018	Q3 2020	Q2 2021	Q4 2021	2,355		—		—			—		—
9.	Avalon Newcastle Commons II	Newcastle, WA	293	106			Q4 2018	Q4 2020	Q2 2021	Q4 2021	2,460		—		—			—		—
10.	Twinbrook Station	Rockville, MD	238	66			Q4 2018	Q4 2020	Q2 2021	Q4 2021	1,710		—		—			—		—
11.	Avalon Harrison (2)	Harrison, NY	143	76			Q4 2018	Q1 2021	Q1 2022	Q2 2022	3,780		—		—			—		—
12.	Avalon Brea Place	Brea, CA	653	290			Q2 2019	Q1 2021	Q2 2022	Q3 2022	2,785		—		—			—		—
13.	Avalon Foundry Row	Owings Mills, MD	437	100			Q2 2019	Q1 2021	Q1 2022	Q3 2022	1,805		—		—			—		—
14.	Avalon Marlborough II	Marlborough, MA	123	42			Q2 2019	Q3 2020	Q4 2020	Q1 2021	2,465		—		—			—		—
15.	Avalon Acton II	Acton, MA	86	31			Q4 2019	Q3 2020	Q1 2021	Q1 2021	2,610		—		—			—		—
16.	Avalon Woburn	Woburn, MA	350	121			Q4 2019	Q3 2021	Q2 2022	Q3 2022	2,610		—		—			—		—
17.	AVA RiNo	Denver, CO	246	87			Q4 2019	Q1 2022	Q2 2022	Q4 2022	2,230		—		—			—		—
18.	Avalon Monrovia	Monrovia, CA	154	68			Q4 2019	Q1 2021	Q3 2021	Q4 2021	3,010		—		—			—		—
19.	Avalon Alderwood Mall (3)	Lynnwood, WA	328	110			Q4 2019	Q3 2021	Q2 2022	Q3 2022	2,295		—		—			—		—
	Communities Under Construction Subtotal / Weighted Average
	Communities Under Construction Subtotal / Weighted Average		6,198	$	2,378						$	2,670

	Communities Completed this Quarter:
1.	Avalon Teaneck	Teaneck, NJ	248	$	73		Q4 2016	Q2 2019	Q1 2020	Q2 2020	$	2,550	100	%	98	%		98	%	90	%
2.	Avalon North Creek	Bothell, WA	316	83			Q4 2017	Q2 2019	Q1 2020	Q2 2020	2,025		100	%	95	%		93	%	89	%
3.	Avalon Norwood	Norwood, MA	198	61			Q2 2018	Q3 2019	Q1 2020	Q3 2020	2,495		100	%	92	%		87	%	71	%
	Communities Completed Subtotal / Weighted Average		762	$	217						$	2,315


	Total/Weighted Average Under Construction and Completed this quarter		6,960	$	2,595						$	2,630

	Total Weighted Average Projected NOI as a % of Total Capital Cost (1)			5.8%

Asset Cost Basis (millions) (4):
	Total Capital Cost, under construction and completed (1)			$	2,780
	Total Capital Cost, disbursed to date			(1,907		)
	Total Capital Cost, remaining to invest (1)			$	873



(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, the Company has 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 Company operating protocols, and other economic developments. The Company does not believe the estimates above should be relied upon for the purpose of estimating the Company’s future financial performance, but the Company believes the information is still meaningful for investors as it is an indicator of the relative magnitude, construction schedule, and projected rents of developments currently underway.

(2)	Developments containing at least 10,000 square feet of retail space include AVA Hollywood (19,000 sf) and Avalon Harrison (27,000 sf).

(3)	The Company is developing this project through an unconsolidated joint venture, in which the Company owns a 50.0% interest. Total Capital Cost is for the venture and total weighted average Projected NOI as a percent of Total Capital Cost excludes this venture.

(4)	Amounts reflect Development Communities in joint ventures at share, and include the communities presented and two additional communities with 554 apartment homes representing $240 million in Total Capital Costs which have completed construction but not yet achieved Stabilized Operations for the full quarter. Q1 2020 NOI for these communities was $6 million.

Attachment 9

AvalonBay Communities, Inc.

Future Development as of March 31, 2020

(unaudited)

DEVELOPMENT RIGHTS




			Estimated		Total Capital
	# of Rights		Number		Cost (1)
			of Homes		(millions)

Development Rights as of 12/31/2019	27		9,587		$	4,217

Q1 2020
Q1 Additions	2		420		$	137
Q1 Construction starts	—		—		—
Q1 Adjustments to existing Development Rights	(1	)	(287	)	(267		)
Development Rights as of 3/31/2020	28		9,720		$	4,087

Current Development Rights by Region as of March 31, 2020

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
	28		9,720		$	4,087

Current Development Rights by Classification as of March 31, 2020

Conventional	22		6,565		$	2,282
Asset Densification	4		1,745		847
Public-Private Partnership	2		1,410		958
	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, the Company has 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 Company operating protocols, and other economic developments. The Company does not believe the estimates above should be relied upon for the purpose of estimating the Company’s future financial performance, but the Company believes the information is still meaningful for investors as it is an indicator of the relative magnitude of our Development Rights.

Attachment 10

AvalonBay Communities, Inc.

Unconsolidated Real Estate Investments

March 31, 2020

(Dollars in thousands)

(unaudited)



		Company		Number of		NOI (2)(3)		Debt
Unconsolidated Real Estate	Number of	Ownership		Apartment		Q1		Principal			Interest
Investments (1)	Communities	Percentage		Homes		2020		Amount (2)			Rate (4)

NYTA MF Investors LLC	5	20.0	%		1,301	$	10,452	$	395,939			3.88	%
Archstone Multifamily Partners AC LP	4	28.6	%		741	3,905		149,984				3.58	%
Multifamily Partners AC JV LP	2	20.0	%		529	3,481		111,653		(5)		6.00	%
MVP I, LLC	1	25.0	%		313	3,003		103,000				3.24	%
Brandywine Apartments of Maryland, LLC	1	28.7	%		305	1,120		21,461				3.40	%
Total Unconsolidated Real Estate Investments	13				3,189	$	21,961	$	782,037			4.03	%


(1)	Excludes development joint ventures.


(2)	NOI and outstanding indebtedness are presented at 100% ownership.


(3)	NOI excludes property management fees as the Company serves as the property management company for all ventures except Brandywine Apartments of Maryland, LLC.


(4)	Represents the weighted average interest rate as of March 31, 2020.


(5)	Borrowing is comprised of loans made by the equity investors in the venture in proportion to their equity interests.

Attachment 11

AvalonBay Communities, Inc.

Debt Structure and Select Debt Metrics

March 31, 2020

(Dollars in thousands)

(unaudited)




DEBT COMPOSITION AND MATURITIES

				Average Interest Rate (1)		Principal Amortization Payments and Maturities (2)
Debt Composition		Amount				Year	Secured notes amortization and maturities		Unsecured notes maturities		Total
Debt Composition		Amount				Year	Secured notes amortization and maturities		Unsecured notes maturities		Total
Secured notes						2020	$	76,028	$	—	$	76,028
	Fixed rate	$	478,738	3.8	%	2021	37,148		300,000		337,148
	Variable rate	476,150		3.4	%	2022	9,918		550,000		559,918
	Subtotal, secured notes	954,888		3.6	%	2023	10,739		600,000		610,739
						2024	11,577		450,000		461,577
Unsecured notes						2025	12,508		825,000		837,508
	Fixed rate	5,900,000		3.6	%	2026	13,545		775,000		788,545
	Variable rate	550,000		2.5	%	2027	251,080		400,000		651,080
	Subtotal, unsecured notes	6,450,000		3.5	%	2028	20,607		450,000		470,607
						2029	77,992		450,000		527,992
Variable rate facility (3)		750,000		1.8	%	Thereafter	433,746		1,650,000		2,083,746
Total Debt		$	8,154,888	3.3	%		$	954,888	$	6,450,000	$	7,404,888




SELECT DEBT METRICS

Net Debt-to-Core EBITDAre (4)	4.6x	Interest Coverage (4)	7.0x	Unencumbered NOI (4)	93%	Weighted avg years to maturity of total debt (2)	9.5




DEBT COVENANT COMPLIANCE

Unsecured Line of Credit Covenants		March 31, 2020		Requirement

	Total Outstanding Indebtedness to Capitalization Value (5)	27.1	%	<	65%
	Combined EBITDA to Combined Debt Service	6.25x		>	1.50x
	Unsecured Indebtedness to Unencumbered Asset Value	24.6	%	<	65%
	Secured Indebtedness to Capitalization Value (5)	3.6	%	<	40%

Unsecured Senior Notes Covenants (6)		March 31, 2020		Requirement

	Total Outstanding Indebtedness to Total Assets (7)	33.5	%	<	65%
	Secured Indebtedness to Total Assets (7)	3.8	%	<	40%
	Unencumbered Assets to Unsecured Indebtedness	312.4	%	>	150%
	Consolidated Income Available for Debt Service to the Annual Service Charge	7.22x		>	1.50x


(1)	Rates are as of March 31, 2020 and, for secured and unsecured notes, include costs of financing such as credit enhancement fees, trustees' fees, the impact of interest rate hedges and mark-to-market adjustments.


(2)	Excludes the Company's unsecured credit facility and any associated issuance discount, mark-to-market discounts and deferred financing costs if applicable.


(3)	Represents amounts outstanding at March 31, 2020 under the Company's $1.75 billion unsecured credit facility. As of March 31, 2020, the Company had drawn $750,000 from its $1,750,000 unsecured credit facility. As of April 30, 2020, the Company has $215,000 outstanding under its unsecured credit facility.


(4)	See Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(5)

Capitalization Value represents the Company’s Combined EBITDA for operating communities that the Company has owned for at least 12 months as of March 31, 2020, capitalized at a rate of 6% per annum, plus the book value of Development Communities and real estate communities acquired. For discussion of other defined terms, see "Debt Covenant Compliance" in Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(6)

The information about the Company’s unsecured senior notes covenants shows compliance with selected covenants under the Company’s 1998 Indenture, under which debt securities are outstanding with maturity dates through 2047, subject to prepayment or redemption at the Company’s election. See “Debt Covenant Compliance” in Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Different covenants apply to debt securities outstanding under the Company’s 2018 Indenture.


(7)	Total Assets represents the sum of the Company's undepreciated real estate assets and other assets, excluding accounts receivable. See "Debt Covenant Compliance" in Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

Attachment 12

AvalonBay Communities, Inc.

Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms

March 31, 2020

(unaudited)

This release, including its attachments, contains certain non-GAAP financial measures and other terms. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. The non-GAAP financial measures referred to below should not be considered an alternative to net income as an indication of our performance. In addition, these non-GAAP financial measures do not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered as an alternative measure of liquidity or as indicative of cash available to fund cash needs.

Asset Preservation Capex represents capital expenditures that the Company does not expect will directly result in increased revenue or expense savings.

Average Rent per Home, as calculated for certain Development Communities in lease-up, reflects management’s projected stabilized rents net of estimated stabilized concessions, including estimated stabilized other rental revenue and excluding projected commercial revenue. Projected stabilized rents are based on one or more of the following: (i) actual average leased rents on apartments leased through quarter end, (ii) projected rollover rents on apartments leased through quarter end where the lease term expires within the first twelve months of Stabilized Operations and (iii) Market Rents on unleased homes.

Average Rental Rates are calculated by the Company as rental revenue in accordance with GAAP, divided by the weighted average number of occupied apartment homes.

Debt Covenant Compliance ratios for the Unsecured Line of Credit Covenants show the Company's compliance with selected covenants provided in the Company’s Fifth Amended and Restated Revolving Loan Agreement dated as of February 28, 2019 and the Company’s Amended and Restated Term Loan Agreement dated February 28, 2019, which have been filed as exhibits to the Company’s SEC reports. The ratios for the Unsecured Senior Notes Covenants show only the Company's compliance with selected covenants provided in the Company’s Indenture dated as of January 16, 1998, as supplemented by the First Supplemental Indenture dated as of January 20, 1998, Second Supplemental Indenture dated as of July 7, 1998, Amended and Restated Third Supplemental Indenture dated as of July 20, 2000, Fourth Supplemental Indenture dated as of September 18, 2006 and Fifth Supplemental Indenture dated as of November 21, 2014 (collectively, the “1998 Indenture"), which have been filed as exhibits to the Company’s SEC reports. Different covenants apply to debt securities outstanding under the Company’s Indenture dated as of February 23, 2018, as supplemented by the First Supplemental Indenture dated as of March 26, 2018 and the Second Supplemental Indenture dated as of May 29, 2018 (collectively, the “2018 Indenture”), which have been filed as exhibits to the Company's SEC reports. Compliance with selected covenants under the 2018 Indenture is excluded from the presentation of Debt Covenant Compliance in this release.

The Debt Covenant Compliance ratios are provided only to show the Company’s compliance with certain covenants contained in the 1998 Indenture governing a majority of the Company's unsecured debt securities and in the Company’s Credit Facility and Term Loans, as of the date reported. These ratios should not be used for any other purpose, including without limitation to evaluate the Company’s financial condition or results of operations, nor do they indicate the Company’s covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the Indenture or the Credit Facility and the Term Loans, and may differ materially from similar terms (a) used elsewhere in this release and the Attachments and (b) used by other companies that present information about their covenant compliance. For risks related to failure to comply with these covenants, see “Risk Factors – Risks related to indebtedness” and other risks discussed in the Company’s 2019 Annual Report on Form 10-K and the Company’s other reports filed with the SEC.

Development Communities are communities that are either currently under construction, or were under construction and were completed during the current year. These communities may be partially or fully complete and operating.

Attachment 12

Development Rights are development opportunities in the early phase of the development process for which the Company either has an option to acquire land or enter into a leasehold interest, for which the Company is the buyer under a long-term conditional contract to purchase land, where the Company controls the land through a ground lease or owns land to develop a new community, or where the Company is the designated developer in a public-private partnership. The Company capitalizes related pre-development costs incurred in pursuit of new developments for which the Company currently believes future development is probable.


•	Asset Densification Development Rights are when the Company develops additional apartment homes at existing stabilized operating communities the Company owns on land currently associated with those operating communities.


•	Conventional Development Rights are when the Company either has an option to acquire the land or enter into a leasehold interest, for which the Company is the buyer under a long-term conditional contract to purchase land, where the Company controls the land through a ground lease or owns the land to develop a new community.


•	Public-Private Partnership Development Rights are when the Company has (i) an option to acquire the land, (ii) an option to enter into a leasehold interest or (iii) entered into a long-term conditional contract to purchase the land, where the Company is the designated developer in a public-private partnership with a local government entity.

Economic Occupancy (“Ec Occ”) is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue (also known as “gross potential”) is determined by valuing occupied units at contract rates and vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant apartments at their Market Rents, 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 Gain is calculated by the Company as the gain on sale in accordance with GAAP, less accumulated depreciation through the date of sale and any other non-cash adjustments that may be required under GAAP accounting. Management generally considers Economic Gain to be an appropriate supplemental measure to gain on sale in accordance with GAAP because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold community. The Economic Gain for disposed communities is based on their respective final settlement statements. A reconciliation of the aggregate Economic Gain to the aggregate gain on sale in accordance with GAAP for the wholly-owned operating communities disposed of during the three months ended March 31, 2020 is as follows (dollars in thousands):



TABLE 1
	Q1 2020
GAAP Gain	$	24,413

Accumulated Depreciation and Other	(9,485		)

Economic Gain	$	14,928

Established Communities are consolidated communities in the markets where the Company has a significant presence, including the Company's 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 Operations, as defined below, as of the beginning of the respective prior year period. Therefore, for 2020 operating results, Established Communities are consolidated communities that have Stabilized Operations as of January 1, 2019, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale or probable for disposition within the current year.

EBITDA, EBITDAre and Core EBITDAre are considered by management to be supplemental measures of our financial performance. EBITDA is defined by the Company as net income or loss attributable to the Company before interest income and expense, income taxes, depreciation and amortization. EBITDAre is calculated by the Company in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), as EBITDA plus or minus losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property, with adjustments to reflect the Company's share of EBITDAre of unconsolidated entities. Core EBITDAre is the Company’s EBITDAre as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered part of the Company’s core business operations, Core EBITDAre can help one compare the core operating and financial performance of the Company between periods. A reconciliation of EBITDA, EBITDAre and Core EBITDAre to net income is as follows (dollars in thousands):

Attachment 12



TABLE 2
	Q1
	2020
Net income	$	168,006
Interest expense, net, inclusive of loss on extinguishment of debt, net	65,084
Income tax expense	91
Depreciation expense	177,911
EBITDA	$	411,092

Gain on sale of communities	(24,436		)
Joint venture EBITDAre adjustments (1)	3,421
EBITDAre	$	390,077

Gain on other real estate transactions	(43		)
Advocacy contributions	301
Severance related costs	1,951
Development pursuit write-offs and expensed transaction costs, net	3,120
Gain on for-sale condominiums	(4,903		)
For-sale condominium marketing and administrative costs	1,443
Legal settlements	43
Core EBITDAre	$	391,989

(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income.

FFO and Core FFO are considered by management to be supplemental measures of our operating and financial performance. FFO is calculated by the Company in accordance with the definition adopted by NAREIT. FFO is calculated by the Company as Net income or loss attributable to common stockholders computed in accordance with GAAP, adjusted for gains or losses on sales of previously depreciated operating communities, cumulative effect of a change in accounting principle, impairment write-downs of depreciable real estate assets, write-downs of investments in affiliates which are driven by a decrease in the value of depreciable real estate assets held by the affiliate and depreciation of real estate assets, including adjustments for unconsolidated partnerships and joint ventures. By excluding gains or losses related to dispositions of previously depreciated operating communities and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating and financial performance of a company’s real estate between periods or as compared to different companies. Core FFO is the Company's FFO as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered part of our core business operations, Core FFO can help one compare the core operating and financial performance of the Company between periods. A reconciliation of Net income attributable to common stockholders to FFO and to Core FFO is as follows (dollars in thousands):

Attachment 12



TABLE 3
	Q1			Q1
	2020			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 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

Average shares outstanding - diluted	140,777,873			138,832,201

Earnings per 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) Aggregate impact of (i) Gains on for-sale condominiums and (ii) For-sale condominium marketing and administrative costs, is a net gain of $3,460 for Q1 2020 and a loss of $473 for Q1 2019 as shown on Attachment 1 - Condensed Consolidated Operating Information.
(3) Represents the imputed carry cost of the for-sale residential condominiums at The Park Loggia. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold for-sale residential condominiums by the Company's weighted average unsecured debt effective interest rate.

Attachment 12

Initial Year Market Cap Rate is defined by the Company as Projected NOI of a single community for the first 12 months of operations (assuming no repositioning), less estimates for non-routine allowance of approximately $300 - $500 per apartment home, divided by the gross sales price for the community. Projected NOI, as referred to above, represents management’s estimate of projected rental revenue minus projected operating expenses before interest, income taxes (if any), depreciation and amortization. For this purpose, management’s projection of operating expenses for the community includes a management fee of 2.5% - 3.5%. The Initial Year Market Cap Rate, which may be determined in a different manner by others, is a measure frequently used in the real estate industry when determining the appropriate purchase price for a property or estimating the value for a property. Buyers may assign different Initial Year Market Cap Rates to different communities when determining the appropriate value because they (i) may project different rates of change in operating expenses and capital expenditure estimates and (ii) may project different rates of change in future rental revenue due to different estimates for changes in rent and occupancy levels. The weighted average Initial Year Market Cap Rate is weighted based on the gross sales price of each community.

Interest Coverage is calculated by the Company as Core EBITDAre, divided by the sum of interest expense, net, and preferred dividends, if applicable. Interest Coverage is presented by the Company because it provides rating agencies and investors an additional means of comparing our ability to service debt obligations to that of other companies. A calculation of Interest Coverage for the three months ended March 31, 2020 is as follows (dollars in thousands):



TABLE 4

Core EBITDAre	$	391,989

Interest expense, net	$	55,914

Interest Coverage	7.0 times

Like-Term Effective Rent Change represents the percentage change in effective rent between two leases of the same lease term category for the same apartment. The Company defines effective rent as the contractual rent for an apartment less amortized concessions and discounts. Average Like-Term Effective Rent Change is weighted based on the number of leases meeting the criteria for new move-in and renewal like-term effective rent change. New move-in like-term effective rent change is the change in effective rent between the contractual rent for a resident who moves out of an apartment, and the contractual rent for a resident who moves into the same apartment with the same lease term category. Renewal like-term effective rent change is the change in effective rent between two consecutive leases of the same lease term category for the same resident occupying the same apartment.

Market Rents as reported by the Company are based on the current market rates set by the Company based on its experience in renting apartments and publicly available market data. Trends in Market Rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Net Debt-to-Core EBITDAre is calculated by the Company as total debt (secured and unsecured notes and the Company's variable rate unsecured credit facility) that is consolidated for financial reporting purposes, less consolidated cash and cash in escrow, divided by annualized first quarter 2020 Core EBITDAre, as adjusted. A calculation of Net Debt-to-Core EBITDAre is as follows (dollars in thousands):

Attachment 12



TABLE 5

Total debt principal (1)	$	8,154,888
Cash and cash in escrow	(868,421		)
Net debt	$	7,286,467

Core EBITDAre	$	391,989

Core EBITDAre, annualized	$	1,567,956

Net Debt-to-Core EBITDAre	4.6 times

(1) Balance at March 31, 2020 excludes $8,880 of debt discount and $36,688 of deferred financing costs as reflected in unsecured notes, net, and $14,671 of debt discount and $3,192 of deferred financing costs as reflected in notes payable on the Condensed Consolidated Balance Sheets.

NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, expensed transaction, development and other pursuit costs, net of recoveries, interest expense, net, loss (gain) on extinguishment of debt, net, general and administrative expense, joint venture (income) loss, depreciation expense, corporate income tax expense (benefit), casualty and impairment loss (gain), net, gain on sale of communities, (gain) loss on other real estate transactions, for-sale condominium marketing and administrative costs and net operating income from real estate assets sold or held for sale. The Company considers NOI to be an important and appropriate supplemental performance measure to Net Income of operating performance of a community or communities because it helps both investors and management to understand the core operations of a community or communities prior to the allocation of any corporate-level property management overhead or financing-related costs. NOI reflects the operating performance of a community, and allows for an easier comparison of the operating performance of individual assets or groups of assets. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impact to overhead as a result of acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or groups of assets.

A reconciliation of NOI to Net Income, as well as a breakdown of NOI by operating segment, is as follows (dollars in thousands):

Attachment 12



TABLE 6
	Q1			Q1			Q4
	2020			2019			2019
Net income	$	168,006		$	170,418		$	167,671
Indirect operating expenses, net of corporate income	22,799			19,722			20,073
Expensed transaction, development and other pursuit costs, net of recoveries	3,334			622			2,428
Interest expense, net	55,914			47,892			54,190
Loss on extinguishment of debt, net	9,170			280			—
General and administrative expense	17,320			13,706			12,602
Joint venture (income) loss	(1,175		)	1,060			(7,872		)
Depreciation expense	177,911			162,057			171,364
Income tax expense (benefit)	91			(6		)	1,825
Gain on sale of communities	(24,436		)	(14,835		)	(256		)
Gain on other real estate transactions	(43		)	(267		)	(65		)
Gain on for-sale condominiums, net of marketing and administrative costs	(3,460		)	473			1,286
NOI from real estate assets sold or held for sale	(896		)	(6,205		)	(1,848		)
NOI	$	424,535		$	394,917		$	421,398

Established:
New England	$	53,680		$	52,083		$	54,868
Metro NY/NJ	84,484			82,984			85,463
Mid-Atlantic	66,309			62,916			66,404
Pacific NW	20,838			20,210			20,687
No. California	80,451			78,715			79,415
So. California	82,455			79,916			82,323
Expansion Markets	3,428			3,513			3,401
Total Established	391,645			380,337			392,561
Other Stabilized	23,496			14,729			22,724
Development/Redevelopment (1)	9,394			(149		)	6,113
NOI	$	424,535		$	394,917		$	421,398

(1) The Company had no Redevelopment Communities for the periods presented.

NOI as reported by the Company does not include the operating results from assets sold or classified as held for sale. A reconciliation of NOI from communities sold or classified as held for sale is as follows (dollars in thousands):



TABLE 7
	Q1			Q1			Q4
	2020			2019			2019

Revenue from real estate assets sold or held for sale	$	1,424		$	10,640		$	2,721
Operating expenses from real estate assets sold or held for sale	(528		)	(4,435		)	(873		)
NOI from real estate assets sold or held for sale	$	896		$	6,205		$	1,848

Attachment 12

NOI Enhancing Capex represents capital expenditures that the Company expects will directly result in increased revenue or expense savings, and excludes any capital expenditures for Redevelopment Communities.

Other Stabilized Communities are completed consolidated communities that the Company owns, which have Stabilized Operations 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.

Projected NOI, as used within this release for certain Development Communities and in calculating the Initial Year Market Cap Rate for dispositions, represents management’s estimate, as of the date of this release (or as of the date of the buyer’s valuation in the case of dispositions), of projected stabilized rental revenue minus projected stabilized operating expenses. For Development Communities, Projected NOI is calculated based on the first twelve months of Stabilized Operations following the completion of construction. In calculating the Initial Year Market Cap Rate, Projected NOI for dispositions is calculated for the first twelve months following the date of the buyer’s valuation. Projected stabilized rental revenue represents management’s estimate of projected gross potential minus projected stabilized economic vacancy and adjusted for projected stabilized concessions plus projected stabilized other rental revenue. Projected stabilized operating expenses do not include interest, income taxes (if any), depreciation or amortization, or any allocation of corporate-level property management overhead or general and administrative costs. In addition, projected stabilized operating expenses for Development Communities do not include property management fee expense. Projected gross potential for Development Communities and dispositions is generally based on leased rents for occupied homes and management’s best estimate of rental levels for homes which are currently unleased, as well as those homes which will become available for lease during the twelve month forward period used to develop Projected NOI. The weighted average Projected NOI as a percentage of Total Capital Cost ("Weighted Average Initial Projected Stabilized Yield") is weighted based on the Company’s share of the Total Capital Cost of each community, based on its percentage ownership.

Management believes that Projected NOI of the Development Communities, on an aggregated weighted average basis, assists investors in understanding management's estimate of the likely impact on operations of the Development Communities when the assets are complete and achieve stabilized occupancy (before allocation of any corporate-level property management overhead, general and administrative costs or interest expense). However, in this release the Company has not given a projection of NOI on a company-wide basis. Given the different dates and fiscal years for which NOI is projected for these communities, the projected allocation of corporate-level property management overhead, general and administrative costs and interest expense to communities under development is complex, impractical to develop, and may not be meaningful. Projected NOI of these communities is not a projection of the Company's overall financial performance or cash flow. There can be no assurance that the communities under development will achieve the Projected NOI as described in this release.

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 basis and (ii) physical occupancy is below or is expected to be below 90% during or as a result of the redevelopment activity.

Rental Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to rental revenue in conformity with GAAP to help investors evaluate the impact of both current and historical concessions on GAAP-based rental revenue and to more readily enable comparisons to revenue as reported by other companies. In addition, Rental Revenue with Concessions on a Cash Basis allows an investor to understand the historical trend in cash concessions.

A reconciliation of rental revenue from Established Communities in conformity with GAAP to Rental Revenue with Concessions on a Cash Basis is as follows (dollars in thousands):

Attachment 12



TABLE 8
	Q1			Q1
	2020			2019
Rental revenue (GAAP basis)	$	547,514		$	531,304
Concessions amortized	517			823
Concessions granted	(1,088		)	(406		)

Rental Revenue with Concessions
on a Cash Basis	$	546,943		$	531,721

% change -- GAAP revenue				3.1		%

% change -- cash revenue				2.9		%

Stabilized Operations/Restabilized Operations is defined as the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

Total Capital Cost includes all capitalized costs projected to be or actually incurred to develop the respective Development or Redevelopment Community, or Development Right, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, offset by proceeds from the sale of any associated land or improvements, all as determined in accordance with GAAP. Total Capital Cost also includes costs incurred related to first generation retail tenants, such as tenant improvements and leasing commissions. For Redevelopment Communities, Total Capital Cost excludes costs incurred prior to the start of redevelopment when indicated. With respect to communities where development or redevelopment was completed in a prior or the current period, Total Capital Cost reflects the actual cost incurred, plus any contingency estimate made by management. Total Capital Cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. For joint ventures not in construction, Total Capital Cost is equal to gross real estate cost.

Unencumbered NOI as calculated by the Company represents NOI generated by real estate assets unencumbered by outstanding secured notes payable as of March 31, 2020 as a percentage of total NOI generated by real estate assets. The Company believes that current and prospective unsecured creditors of the Company view Unencumbered NOI as one indication of the borrowing capacity of the Company. Therefore, when reviewed together with the Company’s Interest Coverage, EBITDA and cash flow from operations, the Company believes that investors and creditors view Unencumbered NOI as a useful supplemental measure for determining the financial flexibility of an entity. A calculation of Unencumbered NOI for the three months ended March 31, 2020 is as follows (dollars in thousands):



TABLE 9
	Q1 2020
	NOI
NOI for Established Communities	$	391,645
NOI for Other Stabilized Communities	23,496
NOI for Development/Redevelopment Communities (1)	9,394
NOI from real estate assets sold or held for sale	896
Total NOI generated by real estate assets	425,431
NOI on encumbered assets	28,412
NOI on unencumbered assets	$	397,019

Unencumbered NOI	93		%

(1) The Company had no Redevelopment Communities as of March 31, 2020.

Attachment 12

Unleveraged IRR on sold communities refers to the internal rate of return calculated by the Company considering the timing and amounts of (i) total revenue during the period owned by the Company and (ii) the gross sales price net of selling costs, offset by (iii) the undepreciated capital cost of the communities at the time of sale and (iv) total direct operating expenses during the period owned by the Company. Each of the items (i), (ii), (iii) and (iv) is calculated in accordance with GAAP.

The calculation of Unleveraged IRR does not include an adjustment for the Company’s general and administrative expense, interest expense, or corporate-level property management and other indirect operating expenses. Therefore, Unleveraged IRR is not a substitute for Net Income as a measure of our performance. Management believes that the Unleveraged IRR achieved during the period a community is owned by the Company is useful because it is one indication of the gross value created by the Company’s acquisition, development or redevelopment, management and sale of a community, before the impact of indirect expenses and Company overhead. The Unleveraged IRR achieved on the communities as cited in this release should not be viewed as an indication of the gross value created with respect to other communities owned by the Company, and the Company does not represent that it will achieve similar Unleveraged IRRs upon the disposition of other communities. The weighted average Unleveraged IRR for sold communities is weighted based on all cash flows over the investment period for each respective community, including net sales proceeds.