10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 1-12672

AVALONBAY COMMUNITIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	77-0404318
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4040 Wilson Blvd., Suite 1000

Arlington, Virginia 22203

(Address of principal executive offices) (Zip Code)

(703) 329-6300

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		AVB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days.

Yes ☒                    No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒                    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐                    No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date:

139,818,224 shares of common stock, par value $0.01 per share, were outstanding as of April 29, 2022.

AVALONBAY COMMUNITIES, INC.

FORM 10-Q

INDEX

		PAGE
PART I - FINANCIAL INFORMATION
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2022 (UNAUDITED) AND DECEMBER 31, 2021	1
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021	2
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021	3
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		24
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		48
ITEM 4. CONTROLS AND PROCEDURES		48
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS		48
ITEM 1A. RISK FACTORS		48
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		49
ITEM 3. DEFAULTS UPON SENIOR SECURITIES		49
ITEM 4. MINE SAFETY DISCLOSURES		49
ITEM 5. OTHER INFORMATION		49
ITEM 6. EXHIBITS		50
SIGNATURES		51

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

	3/31/2022		12/31/2021
	(unaudited)
ASSETS
Real estate:
Land and improvements	$	4,593,092	$	4,564,723
Buildings and improvements	18,390,979		18,198,584
Furniture, fixtures and equipment	1,066,224		1,036,640
	24,050,295		23,799,947
Less accumulated depreciation	(6,389,336)		(6,208,610)
Net operating real estate	17,660,959		17,591,337
Construction in progress, including land	755,274		807,101
Land held for development	218,852		147,546
For-sale condominium inventory	110,763		146,535
Real estate assets held for sale, net	—		17,065
Total real estate, net	18,745,848		18,709,584
Cash and cash equivalents	343,457		420,251
Cash in escrow	113,954		123,537
Resident security deposits	34,512		33,757
Investments in unconsolidated entities	219,075		216,390
Deferred development costs	47,165		40,414
Prepaid expenses and other assets	217,327		211,484
Right of use lease assets	148,289		146,599
Total assets	$	19,869,627	$	19,902,016
LIABILITIES AND EQUITY
Unsecured notes, net	$	7,250,902	$	7,349,394
Variable rate unsecured credit facility and commercial paper	—		—
Mortgage notes payable, net	754,131		754,153
Dividends payable	224,552		225,392
Payables for construction	66,846		63,722
Accrued expenses and other liabilities	295,806		296,006
Lease liabilities	167,974		166,497
Accrued interest payable	67,561		50,300
Resident security deposits	61,227		59,787
Liabilities related to real estate assets held for sale	—		304
Total liabilities	8,888,999		8,965,555
Commitments and contingencies
Redeemable noncontrolling interests	3,336		3,368
Equity:
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at March 31, 2022 and December 31, 2021; zero shares issued and outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value; 280,000,000 shares authorized at March 31, 2022 and December 31, 2021; 139,818,068 and 139,751,926 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,399		1,398
Additional paid-in capital	10,711,327		10,716,414
Accumulated earnings less dividends	278,948		240,821
Accumulated other comprehensive loss	(14,938)		(26,106)
Total stockholders' equity	10,976,736		10,932,527
Noncontrolling interests	556		566
Total equity	10,977,292		10,933,093
Total liabilities and equity	$	19,869,627	$	19,902,016

See accompanying notes to Condensed Consolidated Financial Statements.

1

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(Dollars in thousands, except per share data)

	For the three months ended
	3/31/2022		3/31/2021
Revenue:
Rental and other income	$	613,175	$	550,258
Management, development and other fees	752		877
Total revenue	613,927		551,135
Expenses:
Operating expenses, excluding property taxes	151,312		140,050
Property taxes	70,738		69,410
Expensed transaction, development and other pursuit costs, net of recoveries	987		(170)
Interest expense, net	56,526		52,613
Gain on extinguishment of debt, net	—		(122)
Depreciation expense	201,786		183,297
General and administrative expense	17,421		17,352
Total expenses	498,770		462,430
Income (loss) from investments in unconsolidated entities	317		(467)
Gain on sale of communities	148,800		53,727
Gain on other real estate transactions, net	37		427
Net for-sale condominium activity	236		(913)
Income before income taxes	264,547		141,479
Income tax (expense) benefit	(2,471)		755
Net income	262,076		142,234
Net income attributable to noncontrolling interests	(32)		(11)
Net income attributable to common stockholders	$	262,044	$	142,223
Other comprehensive income (loss):
Gain on cash flow hedges	10,155		—
Cash flow hedge losses reclassified to earnings	1,013		2,367
Comprehensive income	$	273,212	$	144,590
Earnings per common share - basic:
Net income attributable to common stockholders	$	1.87	$	1.02
Earnings per common share - diluted:
Net income attributable to common stockholders	$	1.87	$	1.02

See accompanying notes to Condensed Consolidated Financial Statements.

2

AVALONBAY COMMUNITIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(Dollars in thousands)

	For the three months ended
	3/31/2022		3/31/2021
Cash flows from operating activities:
Net income	$	262,076	$	142,234
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	201,786		183,297
Amortization of deferred financing costs	1,998		1,837
Amortization of debt discount	693		642
Gain on extinguishment of debt, net	—		(122)
Amortization of stock-based compensation	6,970		5,382
Equity in loss of, and return on, unconsolidated entities and noncontrolling interests, net of eliminations	913		1,994
Abandonment of development pursuits	8		246
Unrealized gain on terminated cash flow hedges	—		(2,654)
Cash flow hedge losses reclassified to earnings	1,013		2,367
Gain on sale of real estate assets	(148,837)		(54,154)
Gain on for-sale condominiums	(1,002)		(131)
(Decrease) increase in resident security deposits, prepaid expenses and other assets	(1,233)		9,423
Increase in accrued expenses, other liabilities and accrued interest payable	19,295		39,784
Net cash provided by operating activities	343,680		330,145
Cash flows from investing activities:
Development/redevelopment of real estate assets including land acquisitions and deferred development costs	(232,038)		(198,373)
Acquisition of real estate assets, including partnership interest	(95,426)		—
Capital expenditures - existing real estate assets	(29,472)		(28,020)
Capital expenditures - non-real estate assets	(2,472)		(2,234)
Increase (decrease) in payables for construction	3,124		(8,655)
Proceeds from sale of real estate, net of selling costs	230,617		76,543
Proceeds from the sale of for-sale condominiums, net of selling costs	37,119		13,569
Mortgage note receivable payments	1,946		1,250
Investments in unconsolidated entities	(3,598)		(10,032)
Net cash used in investing activities	(90,200)		(155,952)
Cash flows from financing activities:
Issuance of common stock, net	459		11
Dividends paid	(223,063)		(222,734)
Repayments of mortgage notes payable, including prepayment penalties	(362)		(28,488)
Repayment of unsecured notes, including prepayment penalties	(100,000)		—
Payment of deferred financing costs	(421)		—
Receipt for termination of forward interest rate swaps	—		6,962
Payment to noncontrolling interest	(16)		(22)
Payments related to tax withholding for share-based compensation	(16,353)		(13,228)
Distributions to DownREIT partnership unitholders	(12)		(12)
Distributions to joint venture and profit-sharing partners	(89)		(82)
Preferred interest obligation redemption and dividends	—		(400)
Net cash used in financing activities	(339,857)		(257,993)
Net decrease in cash, cash equivalents and cash in escrow	(86,377)		(83,800)
Cash, cash equivalents and cash in escrow, beginning of period	543,788		313,532
Cash, cash equivalents and cash in escrow, end of period	$	457,411	$	229,732
Cash paid during the period for interest, net of amount capitalized	$	36,290	$	37,252

See accompanying notes to Condensed Consolidated Financial Statements.

3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

The following table provides a reconciliation of cash, cash equivalents and cash in escrow reported in the Condensed Consolidated Statements of Cash Flows (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Cash and cash equivalents	$	343,457	$	129,298
Cash in escrow	113,954		100,434
Cash, cash equivalents and cash in escrow reported in the Condensed Consolidated Statements of Cash Flows	$	457,411	$	229,732

Supplemental disclosures of non-cash investing and financing activities:

During the three months ended March 31, 2022:

•As described in Note 4, "Equity," the Company issued 132,135 shares of common stock as part of the Company's stock-based compensation plans, of which 54,053 shares related to the conversion of performance awards to shares of common stock, and the remaining 78,082 shares valued at $18,441,000 were issued in connection with new stock grants; 605 shares valued at $150,000 were issued through the Company's dividend reinvestment plan; 69,721 shares valued at $16,365,000 were withheld to satisfy employees' tax withholding and other liabilities; and 1,181 restricted shares with an aggregate value of $255,000 previously issued in connection with employee compensation were canceled upon forfeiture.

•Common stock dividends declared but not paid totaled $222,754,000.

•The Company recorded an increase of $43,000 in redeemable noncontrolling interest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.

•The Company recorded (i) an increase to prepaid expenses and other assets of $10,155,000 and a corresponding adjustment to accumulated other comprehensive loss and (ii) reclassified $1,013,000 of cash flow hedge losses from other comprehensive income (loss) to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.

During the three months ended March 31, 2021:

•The Company issued 149,520 shares of common stock as part of the Company's stock-based compensation plans, of which 56,545 shares related to the conversion of performance awards to shares of common stock, and the remaining 92,975 shares valued at $16,347,000 were issued in connection with new stock grants; 839 shares valued at $138,000 were issued through the Company's dividend reinvestment plan; 74,726 shares valued at $13,228,000 were withheld to satisfy employees' tax withholding and other liabilities; and 343 restricted shares with an aggregate value of $69,000 previously issued in connection with employee compensation were canceled upon forfeiture.

•Common stock dividends declared but not paid totaled $222,424,000.

•The Company recorded an increase of $273,000 in redeemable noncontrolling interest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.

•The Company reclassified $2,367,000 of cash flow hedge losses from other comprehensive income (loss) to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.

4

AVALONBAY COMMUNITIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.  Organization, Basis of Presentation and Significant Accounting Policies

Organization and Basis of Presentation

AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities 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 of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

At March 31, 2022, the Company owned or held a direct or indirect ownership interest in 296 operating apartment communities containing 87,918 apartment homes in 12 states and the District of Columbia, of which 18 communities were under development and two were under redevelopment, as well as The Park Loggia, which contains 172 for-sale residential condominiums, of which 138 have been sold as of March 31, 2022, and 66,000 square feet of commercial space, of which 87% has been leased as of March 31, 2022. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 29 communities that, if developed as expected, will contain an estimated 10,122 apartment homes.

The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.

Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q.

Earnings per Common Share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share ("EPS"). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):

5

	For the three months ended
	3/31/2022		3/31/2021
Basic and diluted shares outstanding
Weighted average common shares - basic	139,559,904		139,291,187
Weighted average DownREIT units outstanding	7,500		7,500
Effect of dilutive securities	408,678		253,726
Weighted average common shares - diluted	139,976,082		139,552,413
Calculation of Earnings per Share - basic
Net income attributable to common stockholders	$	262,044	$	142,223
Net income allocated to unvested restricted shares	(523)		(324)
Net income attributable to common stockholders, adjusted	$	261,521	$	141,899
Weighted average common shares - basic	139,559,904		139,291,187
Earnings per common share - basic	$	1.87	$	1.02
Calculation of Earnings per Share - diluted
Net income attributable to common stockholders	$	262,044	$	142,223
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations	12		12
Adjusted net income attributable to common stockholders	$	262,056	$	142,235
Weighted average common shares - diluted	139,976,082		139,552,413
Earnings per common share - diluted	$	1.87	$	1.02

Certain options to purchase shares of common stock in the amount of 9,793 and 294,115 were outstanding as of March 31, 2022 and 2021, respectively, but were not included in the computation of diluted earnings per share because such options were anti-dilutive for the period.

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap and interest rate cap agreements (collectively, "Hedging Derivatives") for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives for trading or other speculative purposes. The Company assesses the effectiveness of qualifying cash flow and fair value hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of interest expense, net. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. The Company does not present or disclose the fair value of Hedging Derivatives on a net basis. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For the Hedging Derivatives that qualify as effective cash flow hedges, the Company has recorded the cumulative changes in the fair value of Hedging Derivatives in accumulated other comprehensive loss. Amounts recorded in accumulated other comprehensive loss will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that qualify as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding hedged item. See Note 11, “Fair Value,” for further discussion of derivative financial instruments.

Legal and Other Contingencies

The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

6

Acquisitions of Investments in Real Estate

The Company accounts for acquisitions of real estate in accordance with the authoritative guidance for the initial measurement, which first requires that the Company determine if the real estate investment is the acquisition of an asset or a business combination. Under either model, the Company must identify and determine the fair value of any assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes various sources, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed. For a business combination, the Company records the assets acquired and liabilities assumed based on the fair value of each respective item. For an asset acquisition, the allocation of the purchase price is based on the relative fair value of the net assets. The Company expenses all applicable acquisition costs for a business combination and capitalizes all applicable acquisition costs for an asset acquisition. The Company expects that acquisitions of individual operating communities will generally be asset acquisitions.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to amounts in prior years' notes to financial statements to conform to current year presentations as a result of changes in held for sale classification, disposition activity and segment classification.

For-Sale Condominium Inventory

The Company presents for-sale condominium inventory at historical cost and evaluates the condominiums for impairment when potential indicators exist, as further discussed in Note 5, "Investments." 

Income Taxes

During the three months ended March 31, 2022, the Company recognized income tax expense of $2,471,000 primarily related to the condominium dispositions at The Park Loggia.

Leases

The Company is party to leases as both a lessor and a lessee, primarily as follows:

•lessor of residential and commercial space within its apartment communities; and

•lessee under (i) ground leases for land underlying current operating or development communities and certain commercial and parking facilities and (ii) office leases for its corporate headquarters and regional offices.

Lessee Considerations

The Company assesses whether a contract is or contains a lease based on whether the contract conveys the right to control the use of an identified asset, including specified portions of larger assets, for a period of time in exchange for consideration. The Company’s leases include both fixed and variable lease payments. Lease payments included in the lease liability include only fixed lease payments. For leases that have options to extend the term or terminate the lease early, the Company only factored the impact of such options into the lease term if the option was considered reasonably certain to be exercised. The Company determined the discount rate associated with its ground and office leases on a lease by lease basis using the Company’s actual borrowing rates as well as indicative market pricing for longer term rates and taking into consideration the remaining term of the lease agreements.

7

Lessor Considerations

The Company has determined that the residential and commercial leases at its apartment communities are operating leases. For leases that include rent concessions and/or fixed and determinable rent increases, rental income is recognized on a straight-line basis over the noncancellable term of the lease, which, for residential leases, is generally one year. Some of the Company’s commercial leases have renewal options which the Company will only include in the lease term if, at the commencement of the lease, it is reasonably certain that the lessee will exercise this option.

For the Company’s leases, which are comprised of a lease component and common area maintenance as a non-lease component, the Company determined that (i) the leases are operating leases, (ii) the lease component is the predominant component and (iii) all components of its operating leases share the same timing and pattern of transfer.

Revenue and Gain Recognition

Under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, the Company recognizes revenue for the transfer of goods and services to customers for consideration that the Company expects to receive. The majority of the Company’s revenue is derived from residential and commercial rental and other lease income, which are accounted for as discussed above, under "Leases". The Company's revenue streams that are not accounted for under ASC 842, Leases, include (i) management, development and other fees, (ii) rental and non-rental related income and (iii) gains or losses on the sale of real estate.

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, “Segment Reporting,” for the three months ended March 31, 2022 and 2021. Segment information for total revenue excludes real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities" (dollars in thousands):

	For the three months ended
	Same Store		Other Stabilized		Development/ Redevelopment		Non- allocated (1)		Total
For the period ended March 31, 2022
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	752	$	752
Rental and non-rental related income (2)	2,060		587		57		—		2,704
Total non-lease revenue (3)	2,060		587		57		752		3,456
Lease income (4)	544,779		45,012		17,461		—		607,252
Total revenue	$	546,839	$	45,599	$	17,518	$	752	$	610,708
For the period ended March 31, 2021
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	877	$	877
Rental and non-rental related income (2)	1,684		447		47		—		2,178
Total non-lease revenue (3)	1,684		447		47		877		3,055
Lease income (4)	501,509		20,511		7,026		—		529,046
Total revenue	$	503,193	$	20,958	$	7,073	$	877	$	532,101

__________________________________

(1)Revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)Amounts include revenue streams related to leasing activities that are not considered components of a lease, including but not limited to, apartment hold fees and application fees, as well as revenue streams not related to leasing activities, including but not limited to, vendor revenue sharing, building advertising, vending and dry cleaning revenue.

(3)Represents revenue accounted for under ASC 606.

(4)Represents residential and commercial rental and other lease income, which are accounted for under ASC 842.

8

Due to the nature and timing of the Company’s identified revenue streams, there are no material amounts of outstanding or unsatisfied performance obligations as of March 31, 2022.

Uncollectible Lease Revenue Reserves

The Company assesses the collectability of its lease revenue and receivables on an on-going basis, (i) assessing the probability of receiving all lease amounts due on a lease by lease basis, (ii) reserving all amounts for those leases where collection of substantially all of the remaining lease payments is not probable and (iii) subsequently, will only recognize revenue to the extent cash is received. If the Company determines that collection of the remaining lease payments becomes probable at a future date, the Company will recognize the cumulative revenue that would have been recorded under the original lease agreement.

In addition to the specific reserves recognized under ASC 842, the Company also evaluates its lease receivables for collectability at a portfolio level under ASC 450, Contingencies – Loss Contingencies. The Company recognizes a reserve under ASC 450 when the uncollectible revenue is probable and reasonably estimable. The Company applies this reserve to the population of the Company’s revenue and receivables not specifically addressed as part of the specific ASC 842 reserve.

COVID-19 Pandemic

In March 2020, the World Health Organization designated COVID-19 as a pandemic (the "Pandemic"). While the Company has taken actions in response to the Pandemic, the ultimate impact on its consolidated results of operations, cash flows, financial condition and liquidity will depend on, among other factors, (i) the effect of the Pandemic on the multifamily industry and the general economy, including from measures taken by businesses and the government, such as governmental limitations on multifamily owners' ability to evict residents who are delinquent in the payment of their rent and (ii) consumer and business preferences for living and working arrangements both during and after the Pandemic.

As of March 31, 2022, the Company assessed the collectibility of outstanding lease receivables considering the impact of the Pandemic, and recorded an aggregate offset to income for uncollectible lease revenue for its residential and commercial portfolios of $13,600,000 and $18,645,000 for the three months ended March 31, 2022 and 2021, respectively.

2.  Interest Capitalized

The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company's development or redevelopment activities totaled $7,100,000 and $8,799,000 for the three months ended March 31, 2022 and 2021, respectively.

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3.  Debt

The Company's debt, which consists of unsecured notes, variable rate unsecured term loans (the "Term Loans"), mortgage notes payable, the Credit Facility and the Commercial Paper Program, as defined below, as of March 31, 2022 and December 31, 2021 are summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of March 31, 2022 and December 31, 2021, as shown in the accompanying Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities").

	3/31/2022		12/31/2021
Fixed rate unsecured notes (1)	$	7,150,000	$	7,150,000
Term Loans (1)	150,000		250,000
Fixed rate mortgage notes payable - conventional and tax-exempt (2)	306,118		306,281
Variable rate mortgage notes payable - conventional and tax-exempt (2)	463,950		464,150
Total mortgage notes payable and unsecured notes and Term Loans	8,070,068		8,170,431
Credit Facility	—		—
Commercial paper	—		—
Total	$	8,070,068	$	8,170,431

_____________________________________

(1)Balances at March 31, 2022 and December 31, 2021 exclude $9,617 and $10,033, respectively, of debt discount, and $39,481 and $40,573, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Condensed Consolidated Balance Sheets.

(2)Balances at March 31, 2022 and December 31, 2021 exclude $13,251 and $13,528, respectively, of debt discount, and $2,686 and $2,750, respectively, of deferred financing costs, as reflected in mortgage notes payable, net on the accompanying Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2022, the Company repaid its $100,000,000 variable rate unsecured term loan at par upon maturity.

At March 31, 2022, the Company had a $1,750,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the “Credit Facility”) which matures in February 2024. The Credit Facility bears interest at varying levels based on (i) the London Interbank Offered Rate (“LIBOR”) applicable to the period of borrowing for a particular draw of funds from the facility (e.g., one month to maturity, three months to maturity, etc.) and (ii) the rating levels for our unsecured notes. The current stated pricing for drawn borrowings is LIBOR plus 0.775% per annum (1.23% at March 31, 2022), assuming a one month borrowing rate. The annual facility fee for the Credit Facility remained at 0.125%, resulting in a fee of $2,188,000 annually based on the $1,750,000,000 facility size and based on the Company's current credit rating.

The Company had no borrowings outstanding under the Credit Facility and had $6,914,000 and $11,969,000 outstanding in letters of credit that reduced the borrowing capacity as of March 31, 2022 and December 31, 2021, respectively. In addition, the Company had $39,831,000 and $39,581,000 outstanding in additional letters of credit unrelated to the Credit Facility as of March 31, 2022 and December 31, 2021, respectively.

In March 2022, the Company established an unsecured commercial paper note program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, the Company may issue, from time to time, unsecured commercial paper notes with varying maturities of less than one year. Amounts available under the Commercial Paper Program may be issued, repaid and re-issued from time to time, with the maximum aggregate face or principal amount outstanding at any one time not to exceed $500,000,000. The Commercial Paper Program is backstopped by liquidity under the Credit Facility, with the principal amount of the notes outstanding under the Commercial Paper Program effectively reducing the borrowing capacity under the Credit Facility by an amount equal to the value of such notes. The Company had no amounts outstanding under the Commercial Paper Program as of March 31, 2022.

In the aggregate, secured notes payable mature at various dates from March 2027 through July 2066, and are secured by certain apartment communities (with a net carrying value of $1,248,432,000, excluding communities classified as held for sale, as of March 31, 2022).

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The weighted average interest rate of the Company's fixed rate secured notes payable (conventional and tax-exempt) was 3.7% at both March 31, 2022 and December 31, 2021. The weighted average interest rate of the Company's variable rate secured notes payable (conventional and tax-exempt), including the effect of certain financing related fees, was 2.1% and 1.7% at March 31, 2022 and December 31, 2021, respectively.

In addition to the Commercial Paper Program, scheduled payments and maturities of secured notes payable and unsecured notes outstanding at March 31, 2022 are as follows (dollars in thousands):

Year	Secured notes principal payments		Secured notes maturities		Unsecured notes and Term Loan maturities		Stated interest rate of unsecured notes and Term Loan
2022	$	7,901	$	—	$	—	—
2023	8,999		—		350,000		4.200	%
					250,000		2.850	%
2024	9,837		—		300,000		3.500	%
					150,000		LIBOR + 0.85%
2025	10,478		—		525,000		3.450	%
					300,000		3.500	%
2026	11,420		—		475,000		2.950	%
					300,000		2.900	%
2027	13,765		236,100		400,000		3.350	%
2028	18,512		—		450,000		3.200	%
					400,000		1.900	%
2029	9,462		66,250		450,000		3.300	%
2030	10,014		—		700,000		2.300	%
2031	10,669		—		600,000		2.450	%
Thereafter	111,538		245,123		700,000		2.050	%
					350,000		3.900	%
					300,000		4.150	%
					300,000		4.350	%
	$	222,595	$	547,473	$	7,300,000

The Company was in compliance at March 31, 2022 with customary covenants under the Credit Facility and the Commercial Paper Program, the Term Loan and the Company's fixed rate unsecured notes.

4.  Equity

The following summarizes the changes in equity for the three months ended March 31, 2022 (dollars in thousands):

	Common stock		Additional paid-in capital		Accumulated earnings less dividends		Accumulated other comprehensive loss		Total stockholder's equity		Noncontrolling interests		Total equity
Balance at December 31, 2021	$	1,398	$	10,716,414	$	240,821	$	(26,106)	$	10,932,527	$	566	$	10,933,093
Net income attributable to common stockholders	—		—		262,044		—		262,044		—		262,044
Gain on cash flow hedges, net	—		—		—		10,155		10,155		—		10,155
Cash flow hedge losses reclassified to earnings	—		—		—		1,013		1,013		—		1,013
Change in redemption value of redeemable noncontrolling interest	—		—		(43)		—		(43)		—		(43)
Noncontrolling interest distribution and income allocation	—		—		—		—		—		(10)		(10)
Dividends declared to common stockholders ($1.59 per share)	—		—		(222,373)		—		(222,373)		—		(222,373)
Issuance of common stock, net of withholdings	1		(14,263)		(1,501)		—		(15,763)		—		(15,763)
Amortization of deferred compensation	—		9,176		—		—		9,176		—		9,176
Balance at March 31, 2022	$	1,399	$	10,711,327	$	278,948	$	(14,938)	$	10,976,736	$	556	$	10,977,292

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The following summarizes the changes in equity for the three months ended March 31, 2021 (dollars in thousands):

	Common stock		Additional paid-in capital		Accumulated earnings less dividends		Accumulated other comprehensive loss		Total stockholder's equity		Noncontrolling interests		Total equity
Balance at December 31, 2020	$	1,395	$	10,664,416	$	126,022	$	(40,250)	$	10,751,583	$	591	$	10,752,174
Net income attributable to common stockholders	—		—		142,223		—		142,223		—		142,223
Cash flow hedge losses reclassified to earnings	—		—		—		2,367		2,367		—		2,367
Change in redemption value of redeemable noncontrolling interest	—		—		(273)		—		(273)		—		(273)
Noncontrolling interest distribution and income allocation	—		—		—		—		—		(16)		(16)
Dividends declared to common stockholders ($1.59 per share)	—		—		(221,779)		—		(221,779)		—		(221,779)
Issuance of common stock, net of withholdings	1		(14,037)		958		—		(13,078)		—		(13,078)
Amortization of deferred compensation	—		7,286		—		—		7,286		—		7,286
Balance at March 31, 2021	$	1,396	$	10,657,665	$	47,151	$	(37,883)	$	10,668,329	$	575	$	10,668,904

As of March 31, 2022 and December 31, 2021, the Company's charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock.

During the three months ended March 31, 2022, the Company:

i.issued 4,304 shares of common stock in connection with stock options exercised;

ii.issued 605 shares of common stock through the Company's dividend reinvestment plan;

iii.issued 132,135 shares of common stock in connection with restricted stock grants and the conversion of performance awards to shares of common stock;

iv.withheld 69,721 shares of common stock to satisfy employees' tax withholding and other liabilities; and

v.canceled 1,181 shares of restricted common stock upon forfeiture.

Deferred compensation granted under the Company's Second Amended and Restated 2009 Equity Incentive Plan (the "2009 Plan") during the three months ended March 31, 2022 is not reflected on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2022, and will not be reflected until recognized as compensation cost.

In July 2020, the Company’s Board of Directors approved a stock repurchase program under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $500,000,000 (the "2020 Stock Repurchase Program"). Purchases of common stock under the 2020 Stock Repurchase Program may be exercised at the Company’s discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements and other corporate liquidity requirements and priorities. The 2020 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice. During the three months ended March 31, 2022, the Company had no repurchases of shares under this program. As of March 31, 2022, the Company had $316,148,000 remaining authorized for purchase under this program.

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In May 2019, the Company commenced a fifth continuous equity program ("CEP V") under which the Company may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of its common stock from time to time. Actual sales will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company's common stock and the Company's determinations of the appropriate funding sources. The Company engaged sales agents for CEP V who receive compensation of up to 1.5% of the gross sales price for shares sold. The Company expects that, if entered into, it will physically settle each forward sale agreement on one or more dates specified by the Company on or prior to the maturity date of that particular forward sale agreement, in which case the Company will receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the forward sale price. However, the Company may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, the Company will pay the forward seller, in the form of a reduced initial forward sale price, a commission of up to 1.5% of the sales prices of all borrowed shares of common stock sold. During the three months ended March 31, 2022, the Company had no sales under this program. In December 2021, the Company entered into a forward contract under CEP V to sell 68,577 shares of common stock for approximate proceeds of $16,000,000 net of offering fees and discounts and based on the initial forward price, with settlement of the forward contract to occur on one or more dates not later than December 31, 2022. The final proceeds will be determined on the date(s) of settlement after adjustments for the Company's dividends and a daily interest factor. As of March 31, 2022, the Company had $705,961,000 remaining authorized for issuance under CEP V, after consideration of the forward contract.

5.  Investments

Unconsolidated Investments

As of March 31, 2022, the Company had investments in seven unconsolidated real estate entities with ownership interest percentages ranging from 20.0% to 50.0% and other unconsolidated investments including property technology investment funds. The Company accounts for its investments in unconsolidated entities under the equity method of accounting or under the measurement alternative with the carrying amount of the investment adjusted to fair value when there is an observable transaction for the same or similar investment of the same issuer indicating a change in fair value. The significant accounting policies of the Company's unconsolidated investments are consistent with those of the Company in all material respects. Certain of these investments are subject to various buy‑sell provisions or other rights which are customary in real estate joint venture agreements. The Company and its partners in these entities may initiate these provisions to either sell the Company's interest or acquire the interest from the Company's partner.

The following is a combined summary of the financial position of the Company's unconsolidated investments discussed above, accounted for using the equity method and presented on the accompanying Condensed Consolidated Balance Sheets as of the dates presented, including development joint ventures and unconsolidated communities sold during the respective periods (dollars in thousands):

	3/31/2022		12/31/2021
	(unaudited)
Assets:
Real estate, net	$	1,198,088	$	1,184,041
Other assets (1)	409,751		399,591
Total assets	$	1,607,839	$	1,583,632
Liabilities and partners' capital:
Mortgage notes payable, net (2)	$	660,210	$	645,235
Other liabilities	166,097		168,403
Partners' capital	781,532		769,994
Total liabilities and partners' capital	$	1,607,839	$	1,583,632

_________________________________

(1)    Consists primarily of property technology investment management funds, in-place leases and cash and cash equivalents.

(2)    Other than a construction loan on the AVA Arts District development, with $27,333 currently outstanding as of March 31, 2022 and reflected in the table above, the Company has not guaranteed any other outstanding debt, nor does the Company have any obligation to fund any debt that it has not guaranteed, should the unconsolidated entity be unable to do so.

The following is a combined summary of the operating results of the entities accounted for using the equity method discussed above and presented on the accompanying Condensed Consolidated Statements of Comprehensive Income, for the periods presented (dollars in thousands):

13

	For the three months ended
	3/31/2022		3/31/2021
	(unaudited)
Rental and other income (1)	$	26,450	$	26,398
Operating and other expenses	(11,383)		(13,631)
Gain on sale of communities	58		—
Interest expense, net	(6,026)		(7,668)
Depreciation expense	(7,318)		(8,478)
Net income	$	1,781	$	(3,379)
Company's share of net income	$	416	$	61
Direct investment gains, amortization of excess investment and other (2)	(99)		(528)
Income from investments in unconsolidated entities	$	317	$	(467)

_________________________________

(1)    Includes unrealized gains on the Company's indirect investments in property technology ventures accounted for under the equity method of accounting during the three months ended March 31, 2022.

(2) Includes unrealized gains on the Company’s direct investment in equity securities of property technology investments during the three months ended March 31, 2022.

Investments in Consolidated Real Estate Entities

During the three months ended March 31, 2022, the Company acquired Avalon Flatirons, located in Lafayette, CO, which contains 207 apartment homes and 16,000 square feet of commercial space and was acquired for a purchase price of $95,000,000.

The Company accounted for this purchase as an asset acquisition and recorded the acquired assets and assumed liabilities, including identifiable intangibles, at their relative fair values based on the purchase price and acquisition costs incurred. The Company used third party pricing or internal models for the value of the land, a valuation model for the value of the building, and an internal model to determine the fair value of the remaining real estate assets and in-place leases. Given the heterogeneous nature of multifamily real estate, the fair values for the land, debt, real estate assets and in-place leases incorporated significant unobservable inputs and therefore are considered to be Level 3 prices within the fair value hierarchy.

Expensed Transaction, Development and Other Pursuit Costs

The Company capitalizes pre-development costs incurred in pursuit of new development opportunities when future development is probable ("Development Rights"). Future development of these Development Rights is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and the availability of capital. Costs incurred for pursuits for which future development is not yet considered probable are expensed as incurred. In addition, if the status of a Development Right changes, making future development by the Company no longer probable, any non-recoverable capitalized pre-development costs are expensed. The Company expensed costs related to development pursuits not yet considered probable for development and the abandonment of Development Rights, as well as costs incurred in pursuing the acquisition or disposition of assets for which such acquisition and disposition activity did not occur. The amount for the three months ended March 31, 2022 was a net expense of $987,000. The amount for the three months ended March 31, 2021 was a net recovery of $170,000. These costs are included in expensed transaction, development and other pursuit costs, net of recoveries on the accompanying Condensed Consolidated Statements of Comprehensive Income. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

Casualty and Impairment of Long-Lived Assets

In the Company's evaluation of its real estate portfolio for impairment, as discussed below, it considered the impact of the Pandemic and did not identify any indicators of impairment as a result.

The Company evaluates its real estate and other long-lived assets for impairment when potential indicators of impairment exist. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property or long-lived asset may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the property or long-lived asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, the

14

Company recognizes an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property or long-lived asset. Based on periodic tests of recoverability of long-lived assets, the Company did not recognize any impairment losses for the three months ended March 31, 2022 and 2021.

The Company evaluates its for-sale condominium inventory for potential indicators of impairment, considering whether the fair value of the individual for-sale condominium units exceeds the carrying value of those units. For-sale condominium inventory is stated at cost, unless the carrying amount of the inventory is not recoverable when compared to the fair value of each unit. The Company determines the fair value of its for-sale condominium inventory as the estimated sales price less direct costs to sell. For the three months ended March 31, 2022 and 2021, the Company did not recognize any impairment losses on its for-sale condominium inventory.

The Company assesses its portfolio of land held for both development and investment for impairment if the intent of the Company changes with respect to either the development of, or the expected holding period for, the land. During the three months ended March 31, 2022 and 2021, the Company did not recognize any impairment charges on its investment in land.

The Company evaluates its unconsolidated investments for other than temporary impairment, considering both the extent and amount by which the carrying value of the investment exceeds the fair value, and the Company's intent and ability to hold the investment to recover its carrying value. The Company also evaluates its proportionate share of any impairment of assets held by unconsolidated investments. There were no other than temporary impairment losses recognized for any of the Company's investments in unconsolidated real estate entities during the three months ended March 31, 2022 and 2021.

6.  Real Estate Disposition Activities

The following real estate sales occurred during the three months ended March 31, 2022 (dollars in thousands):

Community name	Location	Period of sale	Apartment homes	Gross sales price		Gain on  disposition (1)
Avalon West Long Branch	West Long Branch, NJ	Q122	180	$	75,000	$	56,434
Avalon Ossining	Ossining, NY	Q122	168	$	70,000	$	40,512
Avalon East Norwalk	Norwalk, CT	Q122	240	$	90,000	$	51,762

_________________________________

(1)    Gain on disposition was reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income.

At March 31, 2022, the Company had no real estate assets that qualified as held for sale.

The Park Loggia

The Park Loggia, located in New York, NY, contains 172 for-sale residential condominiums and 66,000 square feet of commercial space. During the three months ended March 31, 2022, the Company sold 15 residential condominiums at The Park Loggia for gross proceeds of $40,336,000, resulting in a gain in accordance with GAAP of $1,002,000. As of March 31, 2022, there were 34 residential condominiums remaining to be sold. The Company incurred $766,000 and $1,044,000 during the three months ended March 31, 2022 and 2021, respectively, in marketing, operating and administrative costs. All amounts are included in net for-sale condominium activity, on the accompanying Condensed Consolidated Statements of Comprehensive Income. As of March 31, 2022 and December 31, 2021, the unsold for-sale residential condominiums at The Park Loggia had an aggregate carrying value of $110,763,000 and $146,535,000, respectively, presented as for-sale condominium inventory on the accompanying Condensed Consolidated Balance Sheets.

7. Commitments and Contingencies

Lease Obligations

The Company owns seven apartment communities and two commercial properties, located on land subject to ground leases expiring between July 2046 and April 2106. The Company has purchase options for all ground leases expiring prior to 2062. The ground leases for six of the seven apartment communities and the two commercial properties are operating leases, with rental expense recognized on a straight-line basis over the lease term. In addition, the Company is party to 12 leases for its corporate and regional offices with varying terms through 2031, all of which are operating leases.

15

As of March 31, 2022 and December 31, 2021, the Company had total operating lease assets of $120,004,000 and $118,370,000, respectively, and lease obligations of $147,866,000 and $146,377,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets. The Company incurred costs of $3,706,000 and $3,827,000 for the three months ended March 31, 2022 and 2021, respectively, related to operating leases.

The Company has one apartment community located on land subject to a ground lease and four leases for portions of parking garages adjacent to apartment communities, that are finance leases. As of March 31, 2022 and December 31, 2021, the Company had total finance lease assets of $28,285,000 and $28,229,000, respectively, and total finance lease obligations of $20,107,000 and $20,120,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets.

8.  Segment Reporting

The Company's reportable operating segments include Same Store, Other Stabilized and Development/Redevelopment. Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change. In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment.

The Company's segment disclosures present the measure(s) used by the chief operating decision maker ("CODM") for assessing each segment's performance. The Company's CODM is comprised of several members of its executive management team who use net operating income ("NOI") as the primary financial measure for Same Store communities and Other Stabilized communities. 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, gain on extinguishment of debt, net, general and administrative expense, (income) loss from investments in unconsolidated entities, depreciation expense, income tax expense (benefit), gain on sale of communities, gain on other real estate transactions, net, net for-sale condominium activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis. The commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represent 2.0% and 1.5% of total NOI for the three months ended March 31, 2022 and 2021, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income.

A reconciliation of NOI to net income for the three months ended March 31, 2022 and 2021 is as follows (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Net income	$	262,076	$	142,234
Property management and other indirect operating expenses, net of corporate income	28,113		24,470
Expensed transaction, development and other pursuit costs, net of recoveries	987		(170)
Interest expense, net	56,526		52,613
Gain on extinguishment of debt, net	—		(122)
General and administrative expense	17,421		17,352
(Income) loss from investments in unconsolidated entities	(317)		467
Depreciation expense	201,786		183,297
Income tax expense (benefit)	2,471		(755)
Gain on sale of communities	(148,800)		(53,727)
Gain on other real estate transactions, net	(37)		(427)
Net for-sale condominium activity	(236)		913
Net operating income from real estate assets sold or held for sale	(1,699)		(11,247)
Net operating income	$	418,291	$	354,898

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The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Rental income from real estate assets sold or held for sale	$	3,219	$	19,034
Operating expenses from real estate assets sold or held for sale	(1,520)		(7,787)
Net operating income from real estate assets sold or held for sale	$	1,699	$	11,247

The primary performance measure for communities under development or redevelopment depends on the stage of completion.  While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget.

The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2022. Segment information for the three months ended March 31, 2022 and 2021 has been adjusted to exclude the real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities."

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	For the three months ended
	Total revenue		NOI		Gross real estate (1)
For the period ended March 31, 2022
Same Store
New England	$	81,818	$	52,587	$	2,888,176
Metro NY/NJ	115,476		79,506		4,244,572
Mid-Atlantic	82,093		55,992		3,257,920
Southeast Florida	9,071		5,977		396,555
Denver, CO	6,315		4,727		320,803
Pacific Northwest	34,298		24,222		1,290,332
Northern California	96,729		68,699		3,651,325
Southern California	121,039		84,717		4,409,369
Total Same Store	546,839		376,427		20,459,052
Other Stabilized	45,599		29,542		2,511,859
Development / Redevelopment	17,518		12,322		1,721,164
Land Held for Development	N/A		N/A		218,852
Non-allocated (2)	752		N/A		224,257
Total	$	610,708	$	418,291	$	25,135,184
For the period ended March 31, 2021
Same Store
New England	$	74,871	$	47,445	$	2,862,749
Metro NY/NJ	106,846		73,273		4,215,804
Mid-Atlantic	78,105		53,051		3,233,446
Southeast Florida	7,241		4,189		394,451
Denver, CO	5,652		4,019		319,667
Pacific Northwest	30,532		20,391		1,283,372
Northern California	92,855		65,552		3,614,708
Southern California	107,091		72,535		4,363,142
Total Same Store	503,193		340,455		20,287,339
Other Stabilized	20,958		10,971		1,665,418
Development / Redevelopment	7,073		3,472		1,081,493
Land Held for Development	N/A		N/A		184,058
Non-allocated (2)	877		N/A		356,064
Total	$	532,101	$	354,898	$	23,574,372

__________________________________

(1)Does not include gross real estate assets held for sale or classified as held for sale subsequent to March 31, 2021 of $485,631.

(2)Revenue represents third-party management, accounting, and developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."

9.  Stock-Based Compensation Plans

As part of its long-term compensation plans, the Company has granted stock options, performance awards and restricted stock under the 2009 Plan. Details of the outstanding awards and activity under the 2009 Plan for the three months ended March 31, 2022 are presented below.

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Stock Options:

	2009 Plan shares	Weighted average exercise price per share
Options Outstanding at December 31, 2021	299,149	$	178.71
Granted (1)	9,793	236.14
Exercised	(4,304)	141.41
Forfeited	(2,444)	180.32
Options Outstanding at March 31, 2022	302,194	$	181.09
Options Exercisable at March 31, 2022	7,058	$	135.62

__________________________________

(1)Grants are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

Performance Awards:

	Performance awards	Weighted average grant date fair value per award (1)
Outstanding at December 31, 2021	284,522	$	214.73
Granted (2)	72,189	255.01
Change in awards based on performance (3)	(20,356)	200.92
Converted to shares of common stock	(54,053)	217.33
Forfeited	(755)	223.60
Outstanding at March 31, 2022	281,547	$	225.54

__________________________________

(1)Weighted average grant date fair value per award includes the impact of post grant modifications.

(2)The shares of common stock that may be earned is based on the total shareholder return metrics for the Company's common stock for 39,645 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 32,544 performance awards.

(3)Represents the change in the number of performance awards earned based on performance achievement.

The Company used a Monte Carlo model to assess the compensation cost associated with the portion of the performance awards granted for which achievement will be determined by using total shareholder return measures. For the awards granted in 2022, the assumptions used are as follows:

	2022
Dividend yield	2.7%
Estimated volatility over the life of the plan (1)	16.1% - 36.8%
Risk free rate	0.72% - 1.68%
Estimated performance award value based on total shareholder return measure	$271.98

__________________________________

(1)Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

For the portion of the performance awards granted in 2022 for which achievement will be determined by using financial metrics, the compensation cost was based on a weighted average grant date value of $234.18, and the Company's estimate of corporate achievement for the financial metrics.

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Restricted Stock:

	Restricted stock shares	Restricted stock shares weighted average grant date fair value per share		Restricted stock shares converted from performance awards
Outstanding at December 31, 2021	157,066	$	192.90	74,627
Granted - restricted stock shares	78,082	236.17		—
Vested - restricted stock shares	(70,596)	195.83		(47,335)
Forfeited	(1,120)	219.75		(28)
Outstanding at March 31, 2022	163,432	$	212.12	27,264

Total employee stock-based compensation cost recognized in income was $6,887,000 and $5,247,000 for the three months ended March 31, 2022 and 2021, respectively, and total capitalized stock-based compensation cost was $2,377,000 and $1,903,000 for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, there was a total unrecognized compensation cost of $67,583,000 for unvested restricted stock, stock options and performance awards, which is expected to be recognized over a weighted average period of 2.2 years. Forfeitures are included in compensation cost as they occur.

10.  Related Party Arrangements

Unconsolidated Entities

The Company manages unconsolidated real estate entities for which it receives asset management, property management, development and redevelopment fee revenue. From these entities, the Company earned fees of $752,000 and $877,000 for the three months ended March 31, 2022 and 2021, respectively. In addition, the Company had outstanding receivables associated with its property and construction management roles of $5,057,000 and $3,964,000 as of March 31, 2022 and December 31, 2021, respectively.

Director Compensation

The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock units in the amount of $515,000 and $465,000 in the three months ended March 31, 2022 and 2021, respectively, as a component of general and administrative expense. Deferred compensation relating to these restricted stock grants and deferred stock units to non-employee directors was $281,000 and $696,000 on March 31, 2022 and December 31, 2021, respectively, reported as a component of prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets.

11.  Fair Value

Financial Instruments Carried at Fair Value

Derivative Financial Instruments

The Company uses Hedging Derivatives to manage its interest rate risk. These instruments are carried at fair value in the Company's financial statements. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions which have an A or better credit rating by the Standard & Poor's Ratings Group, and monitors the credit ratings of counterparties and the exposure of the Company to any single entity. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, such as interest rate, term to maturity and volatility, the credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of March 31, 2022, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined it is not significant. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

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The following table summarizes the consolidated derivative positions at March 31, 2022 (dollars in thousands):

	Non-designated Hedges			Cash Flow Hedges
	Interest Rate Caps			Interest Rate Swaps
Notional balance	$	402,670		$	150,000
Weighted average interest rate (1)	2.1		%	N/A
Weighted average swapped/capped interest rate	6.1		%	1.4		%
Earliest maturity date	January 2024			November 2022
Latest maturity date	November 2026			November 2022

____________________________________

(1)For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.

As of March 31, 2022, the Company had $150,000,000 in aggregate outstanding pay fixed interest rate swap agreements that were entered into as hedges of changes in interest rates for our anticipated future debt issuance activity. At the time of the future debt issuance activity, the Company expects to cash settle the swaps and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the hedging impact from these positions will then be recognized over the life of the issued debt as a yield adjustment.

The Company had five derivatives not designated as hedges at March 31, 2022 for which the fair value changes for the three months ended March 31, 2022 and 2021 were not material. The Company did not have any derivatives designated as fair value hedges as of March 31, 2022 and 2021.

The following table summarizes the deferred losses reclassified from accumulated other comprehensive loss into earnings (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Cash flow hedge losses reclassified to earnings	$	1,013	$	2,367

The Company anticipates reclassifying approximately $4,051,000 of net hedging losses from accumulated other comprehensive loss into earnings within the next 12 months as an offset to the hedged item during this period.

Redeemable Noncontrolling Interests

The Company issued and has outstanding 7,500 units of limited partnership interest in a DownREIT which can be presented for cash redemption as determined by the partnership agreement. Under the DownREIT agreement, for each limited partnership unit, the limited partner is entitled to receive cash in the amount equal to the fair value of the Company's common stock on or about the date of redemption. In lieu of cash redemption, the Company may elect to exchange such units for an equal number of shares of the Company's common stock. The limited partnership units in the DownREIT are valued using the market price of the Company's common stock, a Level 1 price under the fair value hierarchy.

Financial Instruments Not Carried at Fair Value

Cash and Cash Equivalents

Cash and cash equivalent balances are held with various financial institutions within accounts designed to preserve principal. The Company monitors credit ratings of these financial institutions and the concentration of cash and cash equivalent balances with any one financial institution and believes the likelihood of realizing material losses related to cash and cash equivalent balances is remote. Cash and cash equivalents are carried at their face amounts, which reasonably approximate their fair values and are Level 1 within the fair value hierarchy.

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Other Financial Instruments

Rents and other receivables and prepaid expenses, accounts and construction payable and accrued expenses and other liabilities are carried at their face amounts, which reasonably approximate their fair values.

Indebtedness

The Company values its fixed rate unsecured notes using quoted market prices, a Level 1 price within the fair value hierarchy. The Company values its mortgage notes payable, variable rate unsecured notes, including the Term Loans and any outstanding amounts under the Credit Facility and Commercial Paper Program using a discounted cash flow analysis on the expected cash flows of each instrument. This analysis reflects the contractual terms of the instrument, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The process also considers credit valuation adjustments to appropriately reflect the Company's nonperformance risk. The Company has concluded that the value of its mortgage notes payable, variable rate unsecured notes, Term Loans and any outstanding amounts under the Credit Facility and Commercial Paper Program are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy.

Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis

The following tables summarize the classification between the three levels of the fair value hierarchy of the Company's financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands):

	3/31/2022
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non Designated Hedges
Interest Rate Caps	$	955	$	—	$	955	$	—
Interest Rate Swaps - Assets	13,359		—		13,359		—
DownREIT units	(1,863)		(1,863)		—		—
Indebtedness
Fixed rate unsecured notes	(7,040,472)		(7,040,472)		—		—
Mortgage notes payable and Term Loan	(841,293)		—		(841,293)		—
Total	$	(7,869,314)	$	(7,042,335)	$	(826,979)	$	—

	12/31/2021
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non Designated Hedges
Interest Rate Caps	$	225	$	—	$	225	$	—
Interest Rate Swaps - Assets	3,204		—		3,204		—
DownREIT units	(1,895)		(1,895)		—		—
Indebtedness
Fixed rate unsecured notes	(7,624,560)		(7,624,560)		—		—
Mortgage notes payable, variable rate unsecured notes and Term Loans	(940,779)		—		(940,779)		—
Total	$	(8,563,805)	$	(7,626,455)	$	(937,350)	$	—

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12.  Subsequent Events

The Company has evaluated subsequent events through the date on which this Form 10-Q was filed, the date on which these financial statements were issued, and identified the items below for discussion.

In April 2022, the Company completed an underwritten public offering of 2,000,000 shares of its common stock in connection with forward contracts entered into with certain financial institutions acting as forward purchasers. Assuming full physical settlement of the forward contracts, which the Company expects to occur no later than December 31, 2023, the Company will receive approximate proceeds of $494,200,000 net of offering fees and discounts and based on the initial forward price. The final proceeds will be determined on the date(s) of settlement and are subject to certain customary adjustments for the Company's dividends and a daily interest factor during the term of the forward contracts.

In April 2022, the Company entered into the first commitment under its mezzanine loan and preferred equity investment program (the "Structured Investment Program"), through which the Company will provide mezzanine loans or preferred equity investments to third party multifamily developers. This initial commitment is for a mezzanine loan of up to $52,575,000 to fund a multifamily development project in Denver, CO.

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help provide an understanding of our business, financial condition and results of operations. This MD&A should be read in conjunction with our Condensed Consolidated Financial Statements and the accompanying Notes to Condensed Consolidated Financial Statements included elsewhere in this report. This report, including the following MD&A, contains forward-looking statements regarding future events or trends that should be read in conjunction with the factors described under "Forward-Looking Statements" included in this report. Actual results or developments could differ materially from those projected in such statements as a result of the factors described under "Forward-Looking Statements" as well as the risk factors described in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021 (the "Form 10-K") and in Part II, Item 1A. "Risk Factors" in this report.

Capitalized terms used without definition have the meanings provided elsewhere in this Form 10-Q.

Executive Overview

Business Description

We develop, redevelop, acquire, own and operate multifamily apartment communities 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 our expansion markets of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. We focus on leading metropolitan areas that we believe historically have been characterized by growing employment in high wage sectors of the economy, higher home ownership cost and a diverse and vibrant quality of life. We believe these market characteristics have offered and will continue to offer the opportunity for superior long-term risk-adjusted returns on apartment community investments relative to other markets that do not have these characteristics. We seek to create long-term shareholder value by accessing cost effective capital; deploying that capital to develop, redevelop and acquire apartment communities in our markets; leveraging our scale and competencies in technology and data science to operate apartment communities; and selling communities when they no longer meet our long-term investment strategy or when pricing is attractive.

Our strategic vision is to be the leading apartment company in select U.S. markets, providing a range of distinctive living experiences that customers value. We pursue this vision by targeting what we believe are among the best markets and submarkets, leveraging our strategic capabilities in market research and consumer insight with disciplined capital allocation and balance sheet management. Our communities are predominately upscale and generally command among the highest rents in their markets. However, we also pursue the ownership and operation of apartment communities that target a variety of customer segments and price points, consistent with our goal of offering a broad range of products and services. We regularly evaluate the market allocation of our investments by current market value and share of total revenue and NOI, as well as relative asset value and submarket positioning.

First Quarter 2022 Operating Highlights

•Net income attributable to common stockholders for the three months ended March 31, 2022 was $262,044,000, an increase of $119,821,000, or 84.2%, as compared to the prior year period. The increase is primarily due to increases in real estate sales and related gains and NOI from communities, over the prior year period.

•Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential revenue ("Residential"), for the three months ended March 31, 2022 was $371,119,000, an increase of $34,684,000, or 10.3%, over the prior year period. The increase over the prior year period was due to an increase in Residential rental revenues of $42,320,000, or 8.5%, partially offset by an increase in Residential property operating expenses of $7,649,000, or 4.7%.

COVID-19 Pandemic

In response to the Pandemic, we adjusted our business operations to address the safety of and financial impacts on our residents and associates, including, in certain jurisdictions (i) providing flexible lease renewal options, (ii) creating payment plans for residents impacted by the Pandemic and (iii) waiving late fees and certain other customary fees associated with apartment rentals. To the extent still implemented, we may discontinue these measures at any time except where required by law.

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The impact on our consolidated results of operations from the Pandemic for future periods will depend, among other factors, on (i) the effect of the Pandemic on the multifamily industry and the general economy, including from measures taken by businesses and the government, such as governmental limitations on the ability of multifamily owners to evict residents who are delinquent in the payment of their rent, and (ii) the preferences of consumers and businesses for living and working arrangements both during and after the Pandemic.

The Pandemic continues to impact our collections and associated outstanding receivables, with the impact partially mitigated by payments received under government rent relief programs. The following table presents the percentages of the following charges to residents that we have collected, including (i) apartment base rent charged to residents and (ii) other rentable items, such as parking and storage rent, along with pet and other fees in accordance with residential leases (collectively, "Collected Residential Revenue"), and excludes transactional and other fees for our 2022 Same Store communities. Collections also include rent relief payments, of which $11,946,000 was received during the three months ended March 31, 2022 and $28,823,000 during the year ended December 31, 2021.

	At quarter end (1)(2)	At April 30, 2022 (3)(4)
Q2 - Q4 2020	95.1%	98.4%
Q1 - Q4 2021	95.3%	99.0%
Q1 2022	94.9%	96.6%

_________________________

(1)Same Store communities' Residential collections presented in this table exclude Commercial revenue, which was 1.0% of our 2021 Same Store total revenue.

(2)The average Collected Residential Revenue percentage as of the last day in the respective quarter for the period.

(3)The percentage of Collected Residential Revenue as of April 30, 2022.

(4)Collected Residential Revenue for April 2022 at April 30, 2022 was 92.9%.

The collection rates are based on resident activity as reflected in our property management systems and are presented to provide information about collections trends during the Pandemic. Prior to the Pandemic, the collections information provided was not routinely produced for internal use by senior management or publicly disclosed and is a result of analysis that is not subject to internal controls over financial reporting. This information is not prepared in accordance with GAAP, does not reflect GAAP revenue or cash flow metrics and may be subject to adjustment in preparing GAAP revenue and cash flow metrics. Additionally, this information should not be interpreted as predicting our financial performance, results of operations or liquidity for any period. At March 31, 2022 and December 31, 2021, the outstanding rent receivable balance for residential and commercial tenants, net of reserves, of $19,734,000 and $18,594,000, respectively, which includes outstanding receivables for approved but not yet received rent relief payments.

First Quarter 2022 Development Highlights

At March 31, 2022, we owned or held a direct or indirect interest in:

•16 wholly-owned communities under construction, which are expected to contain 4,903 apartment homes with a projected total capitalized cost of $2,057,000,000, and two unconsolidated communities under construction, which are expected to contain 803 apartment homes with a projected total capitalized cost of $386,000,000.

•Land or rights to land on which we expect to develop an additional 29 apartment communities that, if developed as expected, will contain 10,122 apartment homes and will be developed for an aggregate total capitalized cost of $4,016,000,000.

First Quarter 2022 Real Estate Transaction Highlights

During the three months ended March 31, 2022, we sold three wholly-owned operating communities containing 588 apartment homes for $235,000,000 for a gain in accordance with GAAP of $148,708,000. In addition, we sold 15 residential condominiums at The Park Loggia for gross proceeds of $40,336,000, resulting in a gain in accordance with GAAP of $1,002,000.

During the three months ended March 31, 2022, we acquired Avalon Flatirons, located in Lafayette, CO, which contains 207 apartment homes and 16,000 square feet of commercial space, for a purchase price of $95,000,000.

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Communities Overview

Our real estate investments consist primarily of current operating apartment communities ("Current Communities"), consolidated and unconsolidated communities in various stages of development ("Development" communities and "Unconsolidated Development" communities) and Development Rights (as defined below). Our Current Communities are further classified as Same Store communities, Other Stabilized communities, Lease-Up communities, Redevelopment communities and Unconsolidated communities. While we generally establish the classification of communities on an annual basis, we update the classification of communities during the calendar year to the extent that our plans with regard to the disposition or redevelopment of a community change. The following is a description of each category:

Current Communities are categorized as Same Store, Other Stabilized, Lease-Up, Redevelopment, or Unconsolidated according to the following attributes:

•Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had stabilized occupancy as of the beginning of the respective prior year period. For the three month periods ended March 31, 2022 and 2021, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2021, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale as of March 31, 2022 or probable for disposition to unrelated third parties within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

•Other Stabilized is composed of completed consolidated communities that we own and that are not Same Store but that had stabilized occupancy, as defined above, as of January 1, 2022, or which were acquired subsequent to January 1, 2021. Other Stabilized includes stabilized operating communities in Charlotte, North Carolina and Dallas, Texas, the two new expansion markets we entered in 2021, but excludes communities that are conducting or are probable to conduct substantial redevelopment activities within the current year, as defined below.

•Lease-Up is composed of consolidated communities where construction has been complete for less than one year and that do not have stabilized occupancy.

•Redevelopment is composed of 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.

•Unconsolidated is composed of communities that we have an indirect ownership interest in through our investment interest in an unconsolidated joint venture.

Development is composed of consolidated 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.

Unconsolidated Development is composed of communities that are either currently under construction, or were under construction and were completed during the current year, in which we have an indirect ownership interest through our investment interest in an unconsolidated joint venture. These communities may be partially or fully complete and operating.

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

We currently lease our corporate headquarters located in Arlington, Virginia, as well as our other regional and administrative offices, under operating leases.

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As of March 31, 2022, communities that we owned or held a direct or indirect interest in were classified as follows:

	Number of communities	Number of apartment homes
Current Communities
Same Store:
New England	38	9,774
Metro NY/NJ	42	12,258
Mid-Atlantic	38	12,931
Southeast Florida	4	1,214
Denver, CO	4	1,086
Pacific Northwest	18	4,807
Northern California	40	12,120
Southern California	57	16,766
Total Same Store	241	70,956
Other Stabilized:
New England	3	253
Metro NY/NJ	3	1,354
Mid-Atlantic	3	993
North Carolina	3	500
Southeast Florida	3	973
Texas	1	425
Denver, CO	1	207
Pacific Northwest	2	667
Northern California	1	200
Southern California	2	849
Total Other Stabilized	22	6,421
Lease-Up	3	1,187
Redevelopment	2	1,058
Unconsolidated	10	2,590
Total Current	278	82,212
Development	16	4,903
Unconsolidated Development	2	803
Total Communities	296	87,918
Development Rights	29	10,122

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Results of Operations

As discussed above under “Executive Overview - COVID-19 Pandemic” and elsewhere in this report, the Pandemic continues to affect our business, and may continue to do so. See also Part II, Item 1A, “Risk Factors.” Our year-over-year operating performance is primarily affected by both overall and individual geographic market conditions and apartment fundamentals and is reflected in changes in Same Store NOI; NOI derived from acquisitions, development completions and development under construction and in lease-up; loss of NOI related to disposed communities; and capital market and financing activity. A comparison of our operating results for the three months ended March 31, 2022 and 2021 follows (unaudited, dollars in thousands).

	For the three months ended
	3/31/2022		3/31/2021		$ Change		% Change
Revenue:
Rental and other income	$	613,175	$	550,258	$	62,917	11.4	%
Management, development and other fees	752		877		(125)		(14.3)	%
Total revenue	613,927		551,135		62,792		11.4	%
Expenses:
Direct property operating expenses, excluding property taxes	122,461		114,707		7,754		6.8	%
Property taxes	70,738		69,410		1,328		1.9	%
Total community operating expenses	193,199		184,117		9,082		4.9	%
Corporate-level property management and other indirect operating expenses	(28,851)		(25,343)		(3,508)		13.8	%
Expensed transaction, development and other pursuit costs, net of recoveries	(987)		170		(1,157)		N/A (1)
Interest expense, net	(56,526)		(52,613)		(3,913)		7.4	%
Gain on extinguishment of debt, net	—		122		(122)		(100.0)	%
Depreciation expense	(201,786)		(183,297)		(18,489)		10.1	%
General and administrative expense	(17,421)		(17,352)		(69)		0.4	%
Income (loss) from investments in unconsolidated entities	317		(467)		784		N/A (1)
Gain on sale of communities	148,800		53,727		95,073		177.0	%
Gain on other real estate transactions, net	37		427		(390)		(91.3)	%
Net for-sale condominium activity	236		(913)		1,149		N/A (1)
Income before income taxes	264,547		141,479		123,068		87.0	%
Income tax (expense) benefit	(2,471)		755		(3,226)		N/A (1)
Net income	262,076		142,234		119,842		84.3	%
Net income attributable to noncontrolling interests	(32)		(11)		(21)		190.9	%
Net income attributable to common stockholders	$	262,044	$	142,223	$	119,821	84.2	%

_________________________

(1)Percent change is not meaningful.

Net income attributable to common stockholders increased $119,821,000, or 84.2%, to $262,044,000 for the three months ended March 31, 2022 as compared to the prior year period. The increase for the three months ended March 31, 2022 is primarily due to increases in real estate sales and related gains and NOI from communities, over the prior year period.

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NOI is considered by management to be an important and appropriate supplemental performance measure to net income 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 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 group of assets. We define NOI 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, gain on extinguishment of debt, net, general and administrative expense, (income) loss from investments in unconsolidated entities, depreciation expense, income tax expense (benefit), gain on sale of communities, gain on other real estate transactions, net, net for-sale condominium activity and net operating income from real estate assets sold or held for sale.

NOI does not represent cash generated from operating activities in accordance with GAAP, and NOI should not be considered an alternative to net income as an indication of our performance. NOI should also not be considered an alternative to net cash flow from operating activities, as determined by GAAP, as a measure of liquidity, nor is NOI indicative of cash available to fund cash needs. Residential NOI represents results attributable to our apartment rental operations, including parking and other ancillary residential revenue. Reconciliations of NOI and Residential NOI for the three months ended March 31, 2022 and 2021 to net income for each period are as follows (unaudited, dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Net income	$	262,076	$	142,234
Property management and other indirect operating expenses, net of corporate income	28,113		24,470
Expensed transaction, development and other pursuit costs, net of recoveries	987		(170)
Interest expense, net	56,526		52,613
Gain on extinguishment of debt, net	—		(122)
General and administrative expense	17,421		17,352
(Income) loss from investments in unconsolidated entities	(317)		467
Depreciation expense	201,786		183,297
Income tax expense (benefit)	2,471		(755)
Gain on sale of communities	(148,800)		(53,727)
Gain on other real estate transactions, net	(37)		(427)
Net for-sale condominium activity	(236)		913
Net operating income from real estate assets sold or held for sale	(1,699)		(11,247)
NOI	418,291		354,898
Commercial NOI (1)	(8,320)		(5,311)
Residential NOI	$	409,971	$	349,587

_________________________

(1)Represents results attributable to the non-apartment components of our mixed-use communities and other non-residential operations ("Commercial").

The Residential NOI changes for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 consist of changes in the following categories (unaudited, dollars in thousands):

	For the three months ended
	3/31/2022
Same Store	$	34,684
Other Stabilized	17,035
Development / Redevelopment	8,665
Total	$	60,384

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The increase in our Same Store Residential NOI for the three months ended March 31, 2022 is due to an increase in rental revenue of $42,320,000, or 8.5%, partially offset by an increase in property operating expenses of $7,649,000, or 4.7%, over the three months ended March 31, 2021.

Rental and other income increased $62,917,000, or 11.4%, for the three months ended March 31, 2022, compared to the prior year period, primarily due to additional rental income generated from development, acquired and existing operating communities and an increase in rental rates at our Same Store communities, discussed below.

As discussed elsewhere in this report, the Pandemic, and direct and indirect related economic, regulatory and operating impacts, are likely to continue to adversely affect our rental revenue. Deteriorating financial conditions of our residents and commercial tenants, as well as regulations that limit our ability to evict residents and tenants, may continue to result in higher than normal uncollectible lease revenue. The Pandemic may also continue to depress consumer demand for our apartments for a variety of reasons, including (i) if consumers decide to live in markets that are less costly than ours for one or more reasons, such as a decline in their income, remote working arrangements, or if they cannot freely access neighborhood amenities like restaurants, gyms and entertainment venues; (ii) that consumers who would otherwise rent may seek home ownership; and (iii) ongoing downward pressures on demand for certain types of housing (e.g., corporate apartment homes) or by certain consumers (e.g., students or consumers who require seasonal job-related demand such as in the entertainment industry).

Consolidated Communities — The weighted average number of occupied apartment homes for consolidated communities increased to 77,081 apartment homes for the three months ended March 31, 2022, compared to 74,275 homes for the prior year period. The weighted average monthly rental revenue per occupied apartment home increased to $2,648 for the three months ended March 31, 2022 compared to $2,466 in the prior year period.

Same Store rental revenue increased $43,634,000, or 8.7%, for the three months ended March 31, 2022, compared to the prior year period.

•Residential rental revenue increased $42,320,000, or 8.5%, for the three months ended March 31, 2022, compared to the prior year period. The increase for the three months ended March 31, 2022 was partially due to a reduction in uncollectible lease revenue of $4,927,000. See below for a table detailing the change in Same Store Residential rental revenue by market for the three months ended March 31, 2022, including the attribution of the change between rental rates and Economic Occupancy.

•As a result of the Pandemic, we increased our use of residential concessions during the three months ended March 31, 2022 and 2021 relative to concessions granted prior to 2020. Concessions for our Same Store communities granted in the three months ended March 31, 2022 decreased from the prior year period by $13,757,000 to $2,373,000. We amortize concessions on a straight-line basis over the life of the respective leases (generally one year), reducing the income recognized over the lease term. The amortization of residential concessions for our Same Store communities decreased by $6,762,000 contributing to the increase in revenue in the three months ended March 31, 2022 as compared to the prior year period. The remaining net unamortized balance of Same Store residential concessions at March 31, 2022 was $8,261,000.

•Commercial rental revenue increased $1,314,000, or 27.4%, for the three months ended March 31, 2022, compared to the prior year period. The increase in Same Store Commercial revenue was due in part to a reduction in uncollectible lease revenue of $404,000 for the three months ended March 31, 2022.

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The following table presents the increase in Same Store Residential rental revenue by component, for the three months ended March 31, 2022, compared to the prior year period (unaudited):

	For the three months ended
	3/31/2022
Residential rental revenue
Lease rates	4.8	%
Concessions and other discounts	1.3	%
Economic Occupancy	0.8	%
Other rental revenue	0.6	%
Uncollectible lease revenue	1.0	%
Total Residential rental revenue	8.5	%

The following table presents the change in Same Store Residential rental revenue, including the attribution of the change between rental rates and Economic Occupancy for the three months ended March 31, 2022 (unaudited, dollars in thousands).

	For the three months ended March 31, 2022
	Residential rental revenue										Average rental rates							Economic Occupancy (1)
					$ Change			% Change							% Change					% Change
	2022		2021			2022 to 2021			2022 to 2021		2022		2021			2022 to 2021		2022		2021		2022 to 2021
New England	$	81,748	$	74,913		$	6,835		9.1	%	$	2,873	$	2,674		7.4	%	97.0	%	95.3	%	1.7	%
Metro NY/NJ	114,004		105,163			8,841			8.4	%	3,204		2,981			7.5	%	96.8	%	95.9	%	0.9	%
Mid-Atlantic	81,390		77,570			3,820			4.9	%	2,194		2,104			4.3	%	95.6	%	95.0	%	0.6	%
Southeast Florida	9,056		7,227			1,829			25.3	%	2,570		2,073			24.0	%	96.8	%	95.5	%	1.3	%
Denver, CO	6,314		5,652			662			11.7	%	2,030		1,815			11.8	%	95.5	%	95.6	%	(0.1)	%
Pacific Northwest	32,981		29,484			3,497			11.9	%	2,395		2,162			10.8	%	95.5	%	94.4	%	1.1	%
Northern California	95,581		92,095			3,486			3.8	%	2,737		2,643			3.6	%	96.0	%	95.8	%	0.2	%
Southern California	119,315		105,965			13,350			12.6	%	2,459		2,192			12.2	%	96.5	%	96.1	%	0.4	%
Total Same Store	$	540,389	$	498,069		$	42,320		8.5	%	$	2,635	$	2,447		7.7	%	96.4	%	95.6	%	0.8	%

_________________________________

(1) Economic Occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a community's gross revenue. Economic Occupancy is defined as gross potential revenue less vacancy loss, as a percentage of gross potential revenue. Gross potential revenue is determined by valuing occupied homes at leased rates and vacant homes at market rents. Vacancy loss is determined by valuing vacant units at current market rents.

Direct property operating expenses, excluding property taxes, increased $7,754,000, or 6.8%, for the three months ended March 31, 2022, compared to the prior year period. The increase for the three months ended March 31, 2022 is primarily due to the addition of newly developed and acquired apartment communities as well as increased operating expenses at our Same Store communities as discussed below.

Same Store Residential direct property operating expenses, excluding property taxes, represents 99.9% of total Same Store operating expenses for the three months ended March 31, 2022. Same Store Residential direct property operating expenses, excluding property taxes, increased $5,986,000, or 5.9%, for the three months ended March 31, 2022, compared to the prior year period. The increases for the three months ended March 31, 2022 are primarily due to increased utilities and maintenance costs as well as bad debt associated with resident expense reimbursements.

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Property taxes increased $1,328,000, or 1.9%, for the three months ended March 31, 2022, compared to the prior year period. The increases for the three months ended March 31, 2022 are primarily due to the addition of newly developed and acquired apartment communities and increased assessments for our stabilized portfolio, partially offset by decreased property taxes from dispositions.

Same Store Residential property taxes represents 98.8% of total Same Store property taxes for the three months ended March 31, 2022. Same Store Residential property taxes increased $1,663,000, or 2.8%, for the three months ended March 31, 2022, compared to the prior year period. The increase for the three months ended March 31, 2022 is primarily due to the expiration of certain property tax incentive programs in New York City and increased assessments across the portfolio in the current year period.

Corporate-level property management and other indirect operating expenses increased $3,508,000, or 13.8%, for the three months ended March 31, 2022, compared to the prior year period, primarily due to increased compensation related costs as well as costs related to increased investment in technology initiatives in the current year period to improve future efficiency in services for residents and prospects.

Expensed transaction, development and other pursuit costs, net of recoveries primarily reflect costs incurred for development pursuits not yet considered probable for development, as well as the abandonment of Development Rights and costs related to abandoned acquisition and disposition pursuits and any recoveries of costs incurred. These costs can be volatile, particularly in periods of increased acquisition pursuit activity, periods of economic downturn or when there is limited access to capital, and therefore may vary significantly from year to year. In addition, the timing for potential recoveries will not always align with the timing for expensing an abandoned pursuit. Expensed transaction, development and other pursuit costs, net of recoveries, increased $1,157,000 for the three months ended March 31, 2022, compared to the prior year period.

Interest expense, net increased $3,913,000, or 7.4%, for the three months ended March 31, 2022, compared to the prior year period. This category includes interest costs offset by capitalized interest pertaining to development and redevelopment activity, amortization of premium/discount on debt, interest income and any mark to market impact from derivatives not in qualifying hedge relationships. The increases for the three months ended March 31, 2022 were primarily due to a decrease in the mark to market impact from the derivatives, a decrease in capitalized interest and an increase in the amount of unsecured indebtedness, partially offset by lower overall effective rates on unsecured indebtedness and a combination of a decrease in variable rates on, and amounts of, secured indebtedness.

Depreciation expense increased $18,489,000, or 10.1%, for the three months ended March 31, 2022, compared to the prior year period, primarily due to the addition of newly developed and acquired apartment communities, partially offset by dispositions.

Gain on sale of communities increased $95,073,000 for the three months ended March 31, 2022, compared to the prior year period. The amount of gain realized in a given period depends on many factors, including the number of communities sold, the size and carrying value of the communities sold and the market conditions in the local area. The gains of $148,800,000 and $53,727,000 for the three months ended March 31, 2022 and 2021, respectively, were primarily due to the sale of three and one wholly-owned operating communities for the three months ended March 31, 2022 and 2021, respectively.

Net for-sale condominium activity is a net gain of $236,000 for the three months ended March 31, 2022 and a net expense of $913,000 for the three months ended March 31, 2021, and is comprised of the net gain before taxes on the sale of condominiums at The Park Loggia and associated marketing, operating and administrative costs. During the three months ended March 31, 2022, we sold 15 residential condominiums at The Park Loggia, for gross proceeds of $40,336,000, resulting in a gain in accordance with GAAP of $1,002,000. During the three months ended March 31, 2021, we sold 10 residential condominiums at The Park Loggia for gross proceeds of $14,609,000, resulting in a gain in accordance with GAAP of $131,000. In addition, we incurred $766,000 and $1,044,000 for the three months ended March 31, 2022 and 2021, respectively, in marketing, operating and administrative costs.

Reconciliation of FFO and Core FFO

Consistent with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts® ("Nareit"), we calculate Funds from Operations Attributable to Common Stockholders ("FFO") 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 change in accounting principle;

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•impairment write-downs of depreciable real estate assets;

•write-downs of investments in affiliates due to a decrease in the value of depreciable real estate assets held by those affiliates;

•depreciation of real estate assets; and

•similar adjustments for unconsolidated partnerships and joint ventures, including those from a change in control.

FFO and FFO adjusted for non-core items, or "Core FFO," as defined below, are generally considered by management to be appropriate supplemental measures of our operating and financial performance. In calculating FFO, we exclude gains or losses related to dispositions of previously depreciated property and exclude 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 with the comparison of the operating and financial performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered by us to be part of our core business operations, Core FFO can help with the comparison of the core operating performance year over year. We believe that in order to understand our operating results, FFO and Core FFO should be considered in conjunction with net income as presented in our Condensed Consolidated Financial Statements included elsewhere in this report.

We calculate Core FFO as FFO, adjusted for:

•joint venture gains (if not adjusted through FFO), non-core costs and promoted interests from partnerships;

•casualty and impairment losses or gains, net on non-depreciable real estate;

•gains or losses from early extinguishment of consolidated borrowings;

•development pursuit write-offs and expensed transaction costs, net of recoveries;

•third-party business interruption insurance proceeds and the related lost NOI that is covered by the expected third party business interruption insurance proceeds;

•property and casualty insurance proceeds and legal settlement activity;

•gains or losses on sales of assets not subject to depreciation and other investment gains or losses;

•advocacy contributions, representing payments to promote our business interests;

•hedge ineffectiveness or gains or losses from derivatives not designated as hedges for accounting purposes;

•severance related costs;

•executive transition compensation costs;

•net for-sale condominium activity, including gains, marketing, operating and administrative costs and imputed carry cost;

•income taxes; and

•other non-core items.

FFO and Core FFO do not represent net income in accordance with GAAP, and therefore should not be considered an alternative to net income, which remains the primary measure, as an indication of our performance. In addition, FFO and Core FFO as calculated by other REITs may not be comparable to our calculations of FFO and Core FFO.

The following is a reconciliation of net income attributable to common stockholders to FFO attributable to common stockholders and to Core FFO attributable to common stockholders (unaudited, dollars in thousands, except per share amounts):

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	For the three months ended
	3/31/2022		3/31/2021
Net income attributable to common stockholders	$	262,044	$	142,223
Depreciation - real estate assets, including joint venture adjustments	200,652		182,314
Distributions to noncontrolling interests	12		12
Gain on sale of previously depreciated real estate	(148,800)		(53,727)
FFO attributable to common stockholders	313,908		270,822
Adjusting items:
Unconsolidated entity (gains) losses, net	(255)		101
Gain on extinguishment of consolidated debt	—		(122)
Gain on interest rate contract	(729)		(2,654)
Advocacy contributions	150		—
Executive transition compensation costs	402		1,781
Severance related costs	41		—
Development pursuit write-offs and expensed transaction costs, net of recoveries	159		(225)
Gain on for-sale condominiums (1)	(1,002)		(131)
For-sale condominium marketing, operating and administrative costs (1)	766		1,044
For-sale condominium imputed carry cost (2)	919		2,152
Gain on other real estate transactions, net	(37)		(427)
Legal settlements	130		60
Income tax expense (benefit) (3)	2,471		(755)
Core FFO attributable to common stockholders	$	316,923	$	271,646
Weighted average common shares outstanding - diluted	139,976,082		139,552,413
EPS per common share - diluted	$	1.87	$	1.02
FFO per common share - diluted	$	2.24	$	1.94
Core FFO per common share - diluted	$	2.26	$	1.95

_________________________

(1)The aggregate impact of (i) gain on for-sale condominiums and (ii) for-sale condominium marketing, operating and administrative costs is a net gain of $236 for the three months ended March 31, 2022 and a net expense of $913 for the three months ended March 31, 2021.

(2)Represents the imputed carry cost of for-sale residential condominiums at The Park Loggia. We computed this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by our weighted average unsecured debt rate.

(3)Amount for the three months ended March 31, 2022 represents the recognition of taxes primarily associated with The Park Loggia.

FFO and Core FFO also do not represent cash generated from operating activities in accordance with GAAP, and therefore should not be considered an alternative to net cash flows from operating activities, as determined by GAAP, as a measure of liquidity. Additionally, it is not necessarily indicative of cash available to fund cash needs.

A presentation of GAAP based cash flow metrics is as follows (unaudited, dollars in thousands) and a discussion of "Liquidity and Capital Resources" can be found later in this report:

	For the three months ended
	3/31/2022		3/31/2021
Net cash provided by operating activities	$	343,680	$	330,145
Net cash used in investing activities	$	(90,200)	$	(155,952)
Net cash used in financing activities	$	(339,857)	$	(257,993)

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Liquidity and Capital Resources

We employ a disciplined approach to our liquidity and capital management. When we source capital, we take into account both our view of the most cost effective alternative available and our desire to maintain a balance sheet that provides us with flexibility. Our principal focus on near-term and intermediate-term liquidity is to ensure we have adequate capital to fund:

•development and redevelopment activity in which we are currently engaged or in which we plan to engage;

•the minimum dividend payments on our common stock required to maintain our REIT qualification under the Code;

•debt service and principal payments either at maturity or opportunistically before maturity;

•normal recurring operating expenses and corporate overhead expenses; and

•investment in our operating platform, including strategic investments.

Factors affecting our liquidity and capital resources are our cash flows from operations, financing activities and investing activities (including dispositions) as well as general economic and market conditions. Cash flows from operations are determined by operating activities and factors including but not limited to (i) the number of apartment homes currently owned, (ii) rental rates, (iii) occupancy levels, (iv) uncollectible lease revenue levels or interruptions in collections caused by market conditions and (v) operating expenses with respect to apartment homes. The timing and type of capital markets activity in which we engage is affected by changes in the capital markets environment, such as changes in interest rates or the availability of cost-effective capital. Our plans for development, redevelopment, non-routine capital expenditure, acquisition and disposition activity are affected by market conditions and capital availability. We frequently review our liquidity needs, especially in periods with volatile market conditions, as well as the adequacy of cash flows from operations and other expected liquidity sources to meet these needs.

We had cash, cash equivalents and cash in escrow of $457,411,000 at March 31, 2022, a decrease of $86,377,000 from $543,788,000 at December 31, 2021. The following discussion relates to changes in cash, cash equivalents and cash in escrow due to operating, investing and financing activities, which are presented in our Condensed Consolidated Statements of Cash Flows included elsewhere in this report.

Operating Activities — Net cash provided by operating activities increased to $343,680,000 for the three months ended March 31, 2022 from $330,145,000 for the three months ended March 31, 2021, primarily due to increases in rental income, including the impact of uncollectible lease revenue.

Investing Activities — Net cash used in investing activities totaled $90,200,000 for the three months ended March 31, 2022. The net cash used was primarily due to:

•investment of $232,038,000 in the development and redevelopment of communities;

•acquisition of one operating community for $95,426,000; and

•capital expenditures of $31,944,000 for our operating communities and non-real estate assets.

These amounts were partially offset by:

•net proceeds from the disposition of three operating communities and ancillary real estate of $230,617,000; and

•net proceeds from the sale of for-sale residential condominiums of $37,119,000.

Financing Activities — Net cash used in financing activities totaled $339,857,000 for the three months ended March 31, 2022. The net cash used was primarily due to:

•payment of cash dividends in the amount of $223,063,000; and

•the repayment of the $100,000,000 variable rate unsecured term loan.

Variable Rate Unsecured Credit Facility

We have a $1,750,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the “Credit Facility”) which matures in February 2024. The Credit Facility bears interest at varying levels based on (i) the London Interbank Offered Rate (“LIBOR”) applicable to the period of borrowing for a particular draw of funds from the facility (e.g., one month to maturity, three months to maturity, etc.) and (ii) the rating levels for our unsecured notes. The current stated pricing for drawn borrowings is LIBOR plus 0.775% per annum (1.58% at April 29, 2022), assuming a one month borrowing rate. The annual facility fee for the Credit Facility remained at 0.125%, resulting in a fee of $2,188,000 annually based on the $1,750,000,000 facility size and based on our current credit rating.

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We had no borrowings outstanding under the Credit Facility and had $6,914,000 outstanding in letters of credit that reduced our borrowing capacity as of April 29, 2022. In addition, we had $39,831,000 outstanding in additional letters of credit unrelated to the Credit Facility as of April 29, 2022.

Commercial Paper Program

In March 2022, we established an unsecured commercial paper note program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, we may issue, from time to time, unsecured commercial paper notes with varying maturities of less than one year. Amounts available under the Commercial Paper Program may be issued, repaid and re-issued from time to time, with the maximum aggregate face or principal amount outstanding at any one time not to exceed $500,000,000. The Commercial Paper Program is backstopped by liquidity under the Credit Facility, with the principal amount of the notes outstanding under the Commercial Paper Program effectively reducing the borrowing capacity under the Credit Facility by an amount equal to the value of such notes. As of April 29, 2022, we did not have any amounts outstanding under the Commercial Paper Program.

Financial Covenants

We are subject to financial covenants contained in the Credit Facility and the Commercial Paper Program, Term Loan and the indentures under which our unsecured notes were issued. The principal financial covenants include the following:

•limitations on the amount of total and secured debt in relation to our overall capital structure;

•limitations on the amount of our unsecured debt relative to the undepreciated basis of real estate assets that are not encumbered by property-specific financing; and

•minimum levels of debt service coverage.

We were in compliance with these covenants at March 31, 2022.

In addition, some of our secured borrowings include yield maintenance, defeasance, or prepayment penalty provisions, which would result in us incurring an additional charge in the event of a full or partial prepayment of outstanding principal before the scheduled maturity. These provisions in our secured borrowings are generally consistent with other similar types of debt instruments issued during the same time period in which our borrowings were secured.

Continuous Equity Offering Program

In May 2019, we commenced our fifth continuous equity program ("CEP V") under which we may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of our common stock from time to time. Actual sales will depend on a variety of factors to be determined, including market conditions, the trading price of our common stock and our determinations of the appropriate funding sources. We engaged sales agents for CEP V who receive compensation of up to 1.5% of the gross sales price for shares sold. We expect that, if entered into, we will physically settle each forward sale agreement on one or more dates prior to the maturity date of that particular forward sale agreement and to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the forward sale price. However, we may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, we will pay the forward seller, in the form of a reduced initial forward sale price, a commission of up to 1.5% of the sales prices of all borrowed shares of common stock sold. During the three months ended March 31, 2022 and through April 29, 2022, we had no sales under this program. In December 2021, we entered into a forward contract under CEP V to sell 68,577 shares of common stock for approximate proceeds of $16,000,000 net of offering fees and discounts and based on the initial forward price, with settlement of the forward contract to occur on one or more dates not later than December 31, 2022. The final proceeds will be determined on the date(s) of settlement after adjustments for our dividends and a daily interest factor. As of April 29, 2022, we had $705,961,000 remaining authorized for issuance under this program, after consideration of the forward contract.

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Forward Equity Offering

In April 2022, we completed an underwritten public offering of 2,000,000 shares of common stock offered in connection with forward contracts entered into with certain financial institutions acting as forward purchasers. Assuming full physical settlement of the forward contracts, which we expect to occur no later than December 31, 2023, we will receive approximate proceeds of $494,200,000 net of offering fees and discounts and based on the initial forward price. The final proceeds will be determined on the date(s) of settlement and are subject to certain customary adjustments for our dividends and a daily interest factor during the term of the forward contracts.

Interest Rate Swap Agreements

As of March 31, 2022, we had $150,000,000 in aggregate outstanding pay fixed interest rate swap agreements that were entered into as hedges of changes in interest rates for our anticipated debt issuance activity. At the time of the future debt issuance activity, we expect to cash settle the swaps and either pay or receive cash for the then current fair value. Assuming that we issue the debt as expected, the hedging impact from these positions will then be recognized over the life of the issued debt as a yield adjustment.

Stock Repurchase Program

In July 2020, our Board of Directors approved a stock repurchase program under which we may acquire shares of our common stock in open market or negotiated transactions up to an aggregate purchase price of $500,000,000 (the "2020 Stock Repurchase Program"). Purchases of common stock under the 2020 Stock Repurchase Program may be exercised at our discretion with the timing and number of shares repurchased depending on a variety of factors including price, corporate and regulatory requirements and other corporate liquidity requirements and priorities. The 2020 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice. During the three months ended March 31, 2022 and through April 29, 2022, we had no repurchases of shares under this program. As of April 29, 2022, we had $316,148,000 remaining authorized for purchase under this program.

Future Financing and Capital Needs — Debt Maturities and Material Obligations

One of our principal long-term liquidity needs is the repayment of long-term debt at maturity. For both our unsecured and secured notes, a portion of the principal of these notes may be repaid prior to maturity. Early retirement of our unsecured or secured notes could result in gains or losses on extinguishment. If we do not have funds on hand sufficient to repay our indebtedness as it becomes due, it will be necessary for us to refinance or otherwise provide liquidity to satisfy the debt at maturity. This refinancing may be accomplished by uncollateralized private or public debt offerings, equity issuances, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility or Commercial Paper Program. In addition, to the extent we have amounts outstanding under the Commercial Paper Program, we are obligated to repay the short-term indebtedness at maturity through either current cash on hand or by incurring other indebtedness, including by way of borrowing under our Credit Facility. Although we believe we will have the capacity to meet our currently anticipated liquidity needs, we cannot assure you that capital from additional debt financing or debt or equity offerings will be available or, if available, that they will be on terms we consider satisfactory.

During the three months ended March 31, 2022, we repaid our $100,000,000 variable rate unsecured term loan at par upon maturity.

The following table details our consolidated debt obligations, including the effective interest rate and contractual maturity dates, and principal payments for periodic amortization and maturities for the next five years, excluding our Credit Facility and Commercial Paper Program and amounts outstanding related to communities classified as held for sale, for debt outstanding at March 31, 2022 and December 31, 2021 (dollars in thousands). We are not directly or indirectly (as borrower or guarantor) obligated in any material respect to pay principal or interest on the indebtedness of any unconsolidated entities in which we have an equity or other interest other than as disclosed related to the AVA Arts District construction loan.

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	All-In interest rate (1)		Principal maturity date		Balance Outstanding (2)				Scheduled Maturities
Community					12/31/2021		3/31/2022		2022		2023		2024		2025		2026		Thereafter
Tax-exempt bonds
Fixed rate
Avalon at Chestnut Hill	6.16	%	Oct-2047		$	35,770	$	35,607	$	501	$	699	$	737	$	778	$	820	$	32,072
					35,770		35,607		501		699		737		778		820		32,072
Variable rate
Avalon Acton	1.55	%	Jul-2040	(3)	45,000		45,000		—		—		—		—		—		45,000
Avalon Clinton North	2.20	%	Nov-2038	(3)	147,000		147,000		—		—		—		—		—		147,000
Avalon Clinton South	2.20	%	Nov-2038	(3)	121,500		121,500		—		—		—		—		—		121,500
Avalon Midtown West	2.13	%	May-2029	(3)	88,300		88,300		5,600		6,100		6,800		7,300		8,100		54,400
Avalon San Bruno I	2.09	%	Dec-2037	(3)	62,350		62,150		1,800		2,200		2,300		2,400		2,500		50,950
					464,150		463,950		7,400		8,300		9,100		9,700		10,600		418,850
Conventional loans
Fixed rate
$250 million unsecured notes	3.00	%	Mar-2023		250,000		250,000		—		250,000		—		—		—		—
$350 million unsecured notes	4.30	%	Dec-2023		350,000		350,000		—		350,000		—		—		—		—
$300 million unsecured notes	3.66	%	Nov-2024		300,000		300,000		—		—		300,000		—		—		—
$525 million unsecured notes	3.55	%	Jun-2025		525,000		525,000		—		—		—		525,000		—		—
$300 million unsecured notes	3.62	%	Nov-2025		300,000		300,000		—		—		—		300,000		—		—
$475 million unsecured notes	3.35	%	May-2026		475,000		475,000		—		—		—		—		475,000		—
$300 million unsecured notes	3.01	%	Oct-2026		300,000		300,000		—		—		—		—		300,000		—
$350 million unsecured notes	3.95	%	Oct-2046		350,000		350,000		—		—		—		—		—		350,000
$400 million unsecured notes	3.50	%	May-2027		400,000		400,000		—		—		—		—		—		400,000
$300 million unsecured notes	4.09	%	Jul-2047		300,000		300,000		—		—		—		—		—		300,000
$450 million unsecured notes	3.32	%	Jan-2028		450,000		450,000		—		—		—		—		—		450,000
$300 million unsecured notes	3.97	%	Apr-2048		300,000		300,000		—		—		—		—		—		300,000
$450 million unsecured notes	3.66	%	Jun-2029		450,000		450,000		—		—		—		—		—		450,000
$700 million unsecured notes	2.69	%	Mar-2030		700,000		700,000		—		—		—		—		—		700,000
$600 million unsecured notes	2.65	%	Jan-2031		600,000		600,000		—		—		—		—		—		600,000
$700 million unsecured notes	2.16	%	Jan-2032		700,000		700,000		—		—		—		—		—		700,000
$400 million unsecured notes	2.03	%	Dec-2028		400,000		400,000		—		—		—		—		—		400,000
Avalon Walnut Creek	4.00	%	Jul-2066		4,161		4,161		—		—		—		—		—		4,161
eaves Los Feliz	3.68	%	Jun-2027		41,400		41,400		—		—		—		—		—		41,400
eaves Woodland Hills	3.67	%	Jun-2027		111,500		111,500		—		—		—		—		—		111,500
Avalon Russett	3.77	%	Jun-2027		32,200		32,200		—		—		—		—		—		32,200
Avalon San Bruno III	2.38	%	Mar-2027		51,000		51,000		—		—		—		—		—		51,000
Avalon Cerritos	3.35	%	Aug-2029		30,250		30,250		—		—		—		—		—		30,250
					7,420,511		7,420,511		—		600,000		300,000		825,000		775,000		4,920,511
Variable rate
Term Loan - $100 million	—	%	Feb-2022	(4)	100,000		—		—		—		—		—		—		—
Term Loan - $150 million	1.22	%	Feb-2024		150,000		150,000		—		—		150,000		—		—		—
					250,000		150,000		—		—		150,000		—		—		—
Total indebtedness - excluding Credit Facility and Commercial Paper					$	8,170,431	$	8,070,068	$	7,901	$	608,999	$	459,837	$	835,478	$	786,420	$	5,371,433

_________________________

(1)Rates are given as of March 31, 2022 and include credit enhancement fees, facility fees, trustees' fees, the impact of interest rate hedges, offering costs, mark to market amortization and other fees.

(2)Balances outstanding represent total amounts due at maturity, and exclude deferred financing costs and debt discount for the unsecured notes of $49,098 and $50,606 as of March 31, 2022 and December 31, 2021, respectively, and deferred financing costs and debt discount associated with secured notes of $15,937 and $16,278 as of March 31, 2022 and December 31, 2021, respectively, as reflected on our Condensed Consolidated Balance Sheets included elsewhere in this report.

(3)Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement.

(4)During 2022, we repaid this borrowing at its scheduled maturity date.

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In addition to consolidated debt, we have scheduled contractual obligations associated with (i) ground leases for land underlying current operating or development communities and commercial and parking facilities and (ii) office leases for our corporate headquarters and regional offices. As of March 31, 2022, other than as discussed in this Form 10-Q, there have been no other material changes in our scheduled contractual obligations as disclosed in our Form 10-K.

Future Financing and Capital Needs — Portfolio and Capital Markets Activity

We invest in various real estate and real estate related investments, which include (i) the acquisition, development and redevelopment of communities both wholly-owned and through the formation of joint ventures, (ii) investments in other real estate-related ventures through direct and indirect investments in property technology and environmentally focused companies and investment management funds and (iii) other indirect investments in real estate through our mezzanine loan and preferred equity investment program (the "Structured Investment Program"), all as further discussed below.

In 2022, we expect to meet our liquidity needs from one or more of a variety of internal and external sources, which may include (i) real estate dispositions, (ii) cash balances on hand as well as cash generated from our operating activities, (iii) borrowing capacity under the Credit Facility, (iv) issuances under the Commercial Paper Program and (v) secured and unsecured debt financings. Additional sources of liquidity in 2022 may include the issuance of common and preferred equity, including the issuance of shares of our common stock under CEP V. Our ability to obtain additional financing will depend on a variety of factors, such as market conditions, the general availability of credit, the overall availability of credit to the real estate industry, our credit ratings and credit capacity, as well as the perception of lenders regarding our long or short-term financial prospects.

Before beginning new construction or reconstruction activity in 2022, including activity related to communities owned by unconsolidated joint ventures, we plan to source sufficient capital to complete these undertakings, although we cannot assure you that we will be able to obtain such financing. In the event that financing cannot be obtained, we may abandon Development Rights, write-off associated pre-development costs that were capitalized and/or forego reconstruction activity. In such instances, we will not realize the increased revenues and earnings that we expected from such Development Rights or reconstruction activity and significant losses could be incurred.

From time to time we use joint ventures to hold or develop individual real estate assets. We generally employ joint ventures to mitigate asset concentration or market risk and secondarily as a source of liquidity. We may also use joint ventures related to mixed-use land development opportunities and new markets where our partners bring development and operational expertise and/or experience to the venture. Each joint venture or partnership agreement has been individually negotiated, and our ability to operate and/or dispose of a community in our sole discretion may be limited to varying degrees depending on the terms of the joint venture or partnership agreement. We cannot assure you that we will achieve our objectives through joint ventures.

In evaluating our allocation of capital within our markets, we sell assets that do not meet our long-term investment criteria or when capital and real estate markets allow us to realize a portion of the value created over our ownership periods and redeploy the proceeds from those sales to develop and redevelop communities. Because the proceeds from the sale of communities may not be immediately redeployed into revenue generating assets that we develop, redevelop or acquire, the immediate effect of a sale of a community for a gain is to increase net income, but reduce future total revenues, total expenses and NOI until such time as the proceeds have been redeployed into revenue generating assets. We believe that the temporary absence of future cash flows from communities sold will not have a material impact on our ability to fund future liquidity and capital resource needs.

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Unconsolidated Real Estate Investments and Off-Balance Sheet Arrangements

Unconsolidated Investments - Operating Communities

As of March 31, 2022, we had investments in the following unconsolidated real estate entities accounted for under the equity method of accounting, excluding development joint ventures. See Note 5, "Investments," of the Condensed Consolidated Financial Statements included elsewhere in this report, which includes information on the aggregate assets, liabilities and equity, as well as operating results, and our proportionate share of their operating results. For ventures holding operating apartment communities as of March 31, 2022, detail of the real estate and associated indebtedness underlying our unconsolidated investments is presented in the following table (dollars in thousands).

	Company  ownership percentage		# of apartment homes	Total capitalized cost		Debt (1)
									Interest rate		Maturity date
Unconsolidated Real Estate Investments						Amount		Type
NYTA MF Investors LLC
1. Avalon Bowery Place I - New York, NY			206	$	212,412	$	93,800	Fixed	4.01	%	Jan 2029
2. Avalon Bowery Place II - New York, NY			90	91,060		39,639		Fixed	4.01	%	Jan 2029
3. Avalon Morningside - New York, NY (2)			295	211,310		112,155		Fixed	3.55	%	Jan 2029/May 2046
4. Avalon West Chelsea - New York, NY (3)			305	128,999		66,000		Fixed	4.01	%	Jan 2029
5. AVA High Line - New York, NY (3)			405	121,499		84,000		Fixed	4.01	%	Jan 2029
Total NYTA MF Investors LLC	20.0	%	1,301	765,280		395,594			3.88	%
Archstone Multifamily Partners AC LP
1. Avalon Studio 4121 - Studio City, CA			149	57,277		26,121		Fixed	3.34	%	Nov 2022
2. Avalon Station 250 - Dedham, MA			285	99,672		50,853		Fixed	3.73	%	Sep 2022
3. Avalon Grosvenor Tower - Bethesda, MD			237	81,098		39,422		Fixed	3.74	%	Sep 2022
Total Archstone Multifamily Partners AC LP	28.6	%	671	238,047		116,396			3.65	%
Other Operating Joint Ventures
1. MVP I, LLC	25.0	%	313	129,232		103,000		Fixed	3.24	%	Jul 2025
2. Brandywine Apartments of Maryland, LLC	28.7	%	305	19,383		20,219		Fixed	3.40	%	Jun 2028
Total Other Joint Ventures			618	148,615		123,219			3.27	%
Total Unconsolidated Investments			2,590	$	1,151,942	$	635,209		3.72	%

_____________________________

(1)We have not guaranteed the debt of these unconsolidated investees and bear no responsibility for the repayment unless otherwise disclosed.

(2)Borrowing on this community is comprised of two mortgage loans. The interest rate is the weighted average interest rate as of March 31, 2022.

(3)Borrowing on this dual-branded community is comprised of a single mortgage loan.

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Unconsolidated Investments - Development Communities

The following table presents a summary of the Unconsolidated Development Communities.

Unconsolidated  Development Community		Company  ownership percentage		# of apartment homes	Projected total capitalized cost (1) ($ millions)		Construction start	Initial projected or actual (2) occupancy	Estimated completion
1.	Avalon Alderwood Mall Lynnwood, WA	50.0	%	328	$	110	Q4 2019	Q4 2021	Q3 2022
2.	AVA Arts District (3)(4) Los Angeles, CA	25.0	%	475	276		Q3 2020	Q1 2023	Q4 2023
	Total			803	$	386

_____________________________

(1)Projected total capitalized cost includes all capitalized costs projected to be incurred to develop the respective Unconsolidated Development Community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees and other regulatory fees, as well as costs incurred for first generation commercial tenants such as tenant improvements and leasing commissions. Projected total capitalized cost is the total projected joint venture amount.

(2)Initial projected occupancy dates are estimates.

(3)AVA Arts District is expected to contain 56,000 square feet of commercial space.

(4)As of March 31, 2022, we have contributed our total equity investment in AVA Arts District of $28,088,000. The venture has secured a variable rate construction loan with a maximum borrowing of $167,147,000 to fund approximately 60% of the development of AVA Arts District, of which $27,333,000 has been drawn as of March 31, 2022. The venture commenced draws under the loan subsequent to required equity contributions by the venture partners. We guarantee the construction loan on behalf of the venture, and any obligations we may incur under the guarantee, except for those due to our misconduct, are required capital contributions of the partners based on ownership interest.

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Development Communities

As of March 31, 2022, we owned or held a direct interest in 16 Development Communities under construction. We expect these Development Communities, when completed, to add a total of 4,903 apartment homes and 39,000 square feet of commercial space to our portfolio for a total capitalized cost, including land acquisition costs, of approximately $2,057,000,000. We cannot assure you that we will meet our schedule for construction completion or that we will meet our budgeted costs, either individually, or in the aggregate.

The following table presents a summary of the Development Communities.

		Number of apartment homes	Projected total capitalized cost (1) ($ millions)		Construction start	Initial projected or actual occupancy (2)	Estimated completion	Estimated stabilized operations (3)
1.	Avalon Harrison (4) Harrison, NY	143	$	88	Q4 2018	Q3 2021	Q1 2023	Q3 2023
2.	Avalon Brea Place Brea, CA	653	293		Q2 2019	Q1 2021	Q3 2022	Q1 2023
3.	AVA RiNo Denver, CO	246	87		Q4 2019	Q4 2021	Q2 2022	Q4 2022
4.	Avalon Harbor Isle Island Park, NY	172	91		Q4 2020	Q2 2022	Q3 2022	Q1 2023
5.	Avalon Somerville Station Somerville, NJ	375	117		Q4 2020	Q2 2022	Q3 2023	Q1 2024
6.	Avalon North Andover North Andover, MA	170	56		Q2 2021	Q4 2022	Q1 2023	Q3 2023
7.	Avalon Brighton Boston, MA	180	89		Q2 2021	Q1 2023	Q2 2023	Q4 2023
8.	Avalon Merrick Park Miami, FL	254	101		Q2 2021	Q1 2023	Q2 2023	Q4 2023
9.	Avalon Amityville I Amityville, NY	338	129		Q2 2021	Q3 2023	Q2 2024	Q1 2025
10.	Avalon Bothell Commons I Bothell, WA	472	203		Q2 2021	Q2 2023	Q1 2024	Q3 2024
11.	Avalon Westminster Promenade Denver, CO	312	107		Q3 2021	Q3 2023	Q4 2023	Q2 2024
12.	Avalon West Dublin Dublin, CA	499	270		Q3 2021	Q4 2023	Q1 2025	Q2 2025
13.	Avalon Princeton Circle Princeton, NJ	221	84		Q4 2021	Q1 2023	Q4 2023	Q1 2024
14.	Avalon Montville Montville, NJ	350	127		Q4 2021	Q3 2023	Q3 2024	Q4 2024
15.	Avalon Redmond Campus (5) Redmond, WA	214	80		Q4 2021	Q3 2023	Q1 2024	Q2 2024
16.	Avalon Governor's Park Denver, CO	304	135		Q1 2022	Q2 2024	Q3 2024	Q1 2025
	Total	4,903	$	2,057

_________________________________

(1)Projected total capitalized cost includes all capitalized costs projected to be or actually incurred to develop the respective Development Community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, as well as costs incurred for first generation commercial tenants such as tenant improvements and leasing commissions.

(2)Initial projected occupancy dates are estimates.

(3)Stabilized operations is defined as the earlier of (i) attainment of 90% or greater physical occupancy or (ii) the one-year anniversary of completion of development.

(4)Avalon Harrison contains 27,000 square feet of commercial space.

(5)Avalon Redmond Campus is a densification of the existing eaves Redmond Campus operating community, where 48 existing older apartment homes were demolished and will be replaced by a new Avalon branded 214 apartment home community.

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During the three months ended March 31, 2022, we completed the development of the following wholly-owned communities:

		Number of apartment homes		Total capitalized  cost (1) ($ millions)		Approximate rentable area (sq. ft.)	Total capitalized cost per sq. ft.
1.	Avalon Foundry Row Owings Mill, MD	$	437	$	98	364,310	$	269
2.	Avalon Woburn Woburn, MA	350		120		329,792	$	364
	Total	787		$	218

____________________________________

(1)Total capitalized cost is as of March 31, 2022. We generally anticipate incurring additional costs associated with these communities that are customary for new developments.

Development Rights

At March 31, 2022, we had $218,852,000 in acquisition and related capitalized costs for direct interests in 10 land parcels we own. In addition, we had $47,165,000 in capitalized costs (including legal fees, design fees and related overhead costs) related to (i) 15 Development Rights for which we control the land parcel, typically through a conditional agreement or option to purchase or lease the land, as well as (ii) costs incurred for four Development Rights that are additional development phases of existing stabilized operating communities we own and which will be constructed on land currently adjacent to or directly associated with those operating communities for which we own the land. Collectively, the land held for development and associated costs for deferred development rights relate to 29 Development Rights for which we expect to develop new apartment communities in the future. The Development Rights range from those beginning design and architectural planning to those that have completed site plans and drawings and can begin construction almost immediately. We estimate that the successful completion of all of these communities would ultimately add approximately 10,122 apartment homes to our portfolio. Substantially all of these apartment homes will offer features like those offered by the communities we currently own.

The Development Rights are in different stages of the due diligence and regulatory approval process. The decisions as to which of the Development Rights to invest in, if any, or to continue to pursue once an investment in a Development Right is made, are business judgments that we make after we perform financial, demographic and other analyses. In the event that we do not proceed with a Development Right, we generally would not recover any of the capitalized costs incurred in the pursuit of those communities, unless we were to recover amounts in connection with the sale of land; however, we cannot guarantee a recovery. Pre-development costs incurred in the pursuit of Development Rights for which future development is not yet considered probable are expensed as incurred. In addition, if the status of a Development Right changes, making future development no longer probable, any unrecoverable capitalized pre-development costs are charged to expense. During the three months ended March 31, 2022, we incurred a charge of $987,000 for expensed transaction, development and other pursuit costs, net of recoveries, which include development pursuits that were not yet probable of future development at the time incurred, or for pursuits that we determined were no longer probable of being developed.

Structured Investment Program

In April 2022, we entered into the first commitment under the Structured Investment Program through which we will provide mezzanine loans or preferred equity investments to third party multifamily developers. The initial commitment under the Structured Investment Program is for a mezzanine loan of up to $52,575,000 to fund a multifamily development project in Denver, CO.

You should carefully review Part I, Item 1A. "Risk Factors" of our Form 10-K, as well as the discussion under Part II, Item 1A. "Risk Factors" in this report, for a discussion of the risks associated with our investment activity.

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Insurance and Risk of Uninsured Losses

We maintain commercial general liability insurance and property insurance with respect to all of our communities, with insurance policies issued by a combination of third party insurers as well as a wholly-owned captive insurance company. These policies, along with other insurance policies we maintain, have policy specifications, insured and self-insured limits, exclusions and deductibles that we consider commercially reasonable. We utilize a wholly-owned captive insurance company to insure certain types and amounts of risks, which include property damage and resulting business interruption losses, general liability insurance and other construction related liability risks. The captive is utilized to insure other limited levels of risk, which may be in part reinsured by third party insurance. There are, however, certain types of losses (including, but not limited to, losses arising from nuclear liability, pandemic or acts of war) that are not insured, in full or in part, because they are either uninsurable or the cost of insurance makes it, in management’s view, economically impractical. You should carefully review the discussion under Part I, Item 1A. “Risk Factors” of our Form 10-K for a discussion of risks associated with an uninsured property or casualty loss.

Our communities are insured for certain property damage and business interruption losses through a combination of community specific insurance policies and/or a master property insurance program which covers the majority of our communities. This master property program provides a $400,000,000 limit for any single occurrence and annually in the aggregate, subject to certain sub-limits and exclusions. Under the master property program, we are subject to various deductibles per occurrence, as well as additional self-insured retentions. In addition to our potential liability for the various policy self-insured retentions and deductibles, our captive insurance company is directly responsible for 100% of the first $25,000,000 of losses (per occurrence) and 10% of the second $25,000,000 of losses (per occurrence) incurred by the master property insurance policy. Our master property insurance program includes coverage for losses resulting from customary perils, including but not limited to wildfires and windstorms. Limits, deductibles, self-insured retentions and coverages may increase or decrease annually during the insurance renewal process, which occurs on different dates throughout the calendar year.

Many of our West Coast communities are located within the general vicinity of active earthquake faults. Many of our communities are near, and thus susceptible to, the major fault lines in California, including the San Andreas Fault, the Hayward Fault or other geological faults that are known or unknown. We cannot assure you that an earthquake would not cause damage or losses greater than our current insured levels. We procure property damage and resulting business interruption insurance coverage with a loss limit of $175,000,000 for any single occurrence and in the annual aggregate for losses resulting from earthquakes subject to deductibles and self-insured retentions. However, for any losses resulting from earthquakes at communities located in California or Washington, the loss limit is $200,000,000 for any single occurrence and in the annual aggregate subject to deductibles and self-insured retentions.

Our Southeast Florida communities are in wind exposed locations that could be impacted by significant storm events like hurricanes. We include coverage for losses arising from these types of weather events within our master property insurance program.

Our communities are insured for third-party liability losses through a combination of community specific insurance policies and/or coverage provided under a master commercial general liability and umbrella/excess insurance program. The master commercial general liability and umbrella/excess insurance policies cover the majority of our communities and are subject to certain coverage limitations and exclusions. After applicable self-insured retentions borne by us, our captive insurance company is directly responsible for the first $2,000,000 of losses (per occurrence) covered by the master general liability insurance policy.

We also maintain certain casualty policies (general liability, umbrella/excess and workers compensation) for construction related risks that have various exclusions and deductibles that, in management’s view, are commercially reasonable.

Just as with office buildings, transportation systems and government buildings, apartment communities could become targets of terrorism. Our communities are insured for terrorism related losses through the Terrorism Risk Insurance Program Reauthorization Act (“TRIPRA”) program. This coverage extends to most of our casualty exposures (subject to deductibles and insured limits) and certain property insurance policies. We have also purchased private-market insurance for property damage due to terrorism with limits of $600,000,000 per occurrence and in the annual aggregate that includes certain coverages (not covered under TRIPRA) such as domestic-based terrorism. This insurance, often referred to as “non-certified” terrorism insurance, is subject to deductibles, limits and exclusions.

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An additional consideration for insurance coverage and potential uninsured losses is mold growth or other environmental contamination. Mold growth may occur when excessive moisture accumulates in buildings or on building materials, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. If a significant mold problem arises at one of our communities, we could be required to undertake a costly remediation program to contain or remove the mold from the affected community and could be exposed to other liabilities. For further discussion of the risks and our related prevention and remediation activities, please refer to the discussion under Part I, Item 1A. “Risk Factors - We may incur costs due to environmental contamination or non-compliance” of our Form 10-K. We cannot provide assurance that we will have coverage under our existing policies for property damage or liability to third parties arising as a result of exposure to mold or a claim of exposure to mold at one of our communities.

We also maintain other insurance programs that provide coverage for events including but not limited to employee dishonesty, loss of data, and liability associated with management of certain employee benefit plans. These policies are subject to maximum loss limits and include coverage limitations or exclusion that may preclude us from fully recovering.

The amount or types of insurance we maintain may not be sufficient to cover all losses and we may change our policy limits, coverages, and self-insured retentions at any time.

Forward-Looking Statements

This Form 10-Q contains "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by our use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "project," "plan," "may," "shall," "will," "pursue" and other similar expressions in this Form 10-Q, that predict or indicate future events and trends and that do not report historical matters. These statements include, among other things, statements regarding our intent, belief or expectations with respect to:

•the impact of the Pandemic on our business, results of operations and financial condition;

•our potential development, redevelopment, acquisition or disposition of communities;

•the timing and cost of completion of apartment communities under construction, reconstruction, development or redevelopment;

•the timing of lease-up, occupancy and stabilization of apartment communities;

•the timing and net sales proceeds of condominium sales;

•the pursuit of land on which we are considering future development;

•the anticipated operating performance of our communities;

•cost, yield, revenue, NOI and earnings estimates;

•the impact of landlord-tenant laws and rent regulations;

•our expansion into new markets;

•our declaration or payment of dividends;

•our joint venture and discretionary fund activities;

•our policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters;

•our qualification as a REIT under the Code;

•the real estate markets in Metro New York/New Jersey, Northern and Southern California, Denver, Colorado, Southeast Florida, Dallas and Austin, Texas and Charlotte and Raleigh-Durham, North Carolina, and markets in selected states in the Mid-Atlantic, New England and Pacific Northwest regions of the United States and in general;

•the availability of debt and equity financing;

45

•interest rates;

•general economic conditions including the potential impacts from current economic conditions, including rising interest rates and general price inflation, and the Pandemic;

•trends affecting our financial condition or results of operations; and

•the impact of outstanding legal proceedings.

We cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect our current expectations of the approximate outcomes of the matters discussed. We do not undertake a duty to update these forward-looking statements, and therefore they may not represent our estimates and assumptions after the date of this report. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors may cause our actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by these forward-looking statements. You should carefully review the discussion under Part I, Item 1A. "Risk Factors" of our Form 10-K and Part II, Item 1A. "Risk Factors" in this report, for further discussion of risks associated with forward-looking statements.

Risks and uncertainties that might cause such differences include those related to the Pandemic, including, among other factors, (i) the Pandemic's effect on the multifamily industry and the general economy, including from measures taken by businesses and the government, such as governmental limitations on the ability of multifamily owners to evict residents who are delinquent in the payment of their rent and (ii) the preferences of consumers and businesses for living and working arrangements both during and after the Pandemic. In addition, the effects of the Pandemic are likely to heighten the following risks, which we routinely face in our business.

Some of the factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following:

•we may fail to secure development opportunities due to an inability to reach agreements with third-parties to obtain land at attractive prices or to obtain desired zoning and other local approvals;

•we may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses;

•construction costs of a community may exceed our original estimates;

•we may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in our expected rental revenues;

•the timing and net proceeds of condominium sales may not equal our current expectations;

•occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond our control;

•financing may not be available on favorable terms or at all, and our cash flows from operations and access to cost effective capital may be insufficient for the development of our pipeline which could limit our pursuit of opportunities;

•the impact of new landlord-tenant laws and rent regulations may be greater than we expect;

•our cash flows may be insufficient to meet required payments of principal and interest, and we may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness;

•we may be unsuccessful in our management of joint ventures and the REIT vehicles that are used with certain joint ventures;

46

•laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge fees or evict tenants, may impact our revenue or increase our costs;

•our expectations, estimates and assumptions as of the date of this filing regarding outstanding legal proceedings are subject to change;

•the possibility that we may choose to pay dividends in our stock instead of cash, which may result in stockholders having to pay taxes with respect to such dividends in excess of the cash received, if any; and

•investments made under the Structured Investment Program in either mezzanine debt or preferred equity of third party multifamily development may not be repaid as expected or the development may not be completed on schedule, which could require us to engage in litigation, foreclosure actions, and/or first party project completion to recover our investment, which may not be recovered in full or at all in such event.

Critical Accounting Policies and Estimates

Preparing financial statements in conformity with GAAP requires management judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or a different presentation of our financial statements. Our critical accounting policies consist of the following: (i) cost capitalization and (ii) abandoned pursuit costs and asset impairment. Our critical accounting policies and estimates have not changed materially from the discussion of our significant accounting policies found in Management's Discussion and Analysis and Results of Operations in our Form 10-K.

47

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our exposures to market risk since December 31, 2021.

ITEM 4.    CONTROLS AND PROCEDURES

(a)Evaluation of disclosure controls and procedures. 

The Company carried out an evaluation under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of March 31, 2022. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.

We continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

(b)Changes in internal controls over financial reporting.

None.

PART II.    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

ITEM 1A.     RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors that could materially affect our business, financial condition or future results discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 in Part I, Item 1A. "Risk Factors." The risks described in our Form 10-K are not the only risks that could affect the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and/or operating results in the future. There have been no material changes to our risk factors since December 31, 2021.

48

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None.

(b) Not applicable.

(c) Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares Purchased (1)	(b) Average Price Paid  Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Dollar Amount that May Yet be Purchased Under the Plans or Programs (in thousands) (2)
January 1 - January 31, 2022	105	$	241.22	—	$	316,148
February 1 - February 28, 2022	3,582	$	244.48	—	$	316,148
March 1 - March 31, 2022	66,034	$	234.18	—	$	316,148
Total	69,721	$	234.72	—

___________________________________

(1)Consists of shares surrendered to the Company in connection with exercise of stock options as payment of exercise price, as well as for taxes associated with the vesting of restricted share grants.

(2)In July 2020, the Board of Directors approved the 2020 Stock Repurchase Program, under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $500,000,000. Purchases of common stock under the 2020 Stock Repurchase Program may be exercised from time to time in the Company’s discretion and in such amounts as market conditions warrant. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other corporate liquidity requirements and priorities. The 2020 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.        MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.        OTHER INFORMATION

None.

49

ITEM 6.        EXHIBITS

Exhibit No.		Description
3(i).1	—	Articles of Amendment and Restatement of Articles of Incorporation of the Company, dated as of June 4, 1998. (Incorporated by reference to Exhibit 3(i).1 to Form 10-K of the Company filed March 1, 2007.)
3(i).2	—	Articles of Amendment, dated as of October 2, 1998. (Incorporated by reference to Exhibit 3(i).2 to Form 10-K of the Company filed March 1, 2007.)
3(i).3	—	Articles of Amendment, dated as of May 22, 2013. (Incorporated by reference to Exhibit 3(i).3 to Form 8-K of the Company filed May 22, 2013.)
3(i).4	—	Articles of Amendment, dated as of May 14, 2020. (Incorporated by reference to Exhibit 3(i).4 to Form 8-K of the Company filed May 15, 2020.)
3(ii).1	—	Amended and Restated Bylaws of the Company, as adopted by the Board of Directors on November 12, 2015, and as further amended on February 16, 2017, November 9, 2017, and May 6, 2019. (Incorporated by reference to Exhibit 3(ii).1 to Form 10-Q of the Company filed August 6, 2019.)
10.1+	—	Form of Agreement for Grant of Performance-Based Restricted Stock Units with attached Award Terms and noted variations for Mr. Naughton's 2022-2024 award (subject to changes in the following for future agreements: metrics used; target, threshold and maximum levels of achievement for each metric; and weightings between the metrics). (Filed herewith.)
31.1	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer). (Filed herewith.)
31.2	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer). (Filed herewith.)
32	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). (Furnished herewith.)
101	—	The following financial materials from AvalonBay Communities, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2022 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) Notes to the Condensed Consolidated Financial Statements. (Filed herewith.)
104	—	Cover Page Interactive Data File (embedded within the Inline XBRL document). (Filed herewith.)

_______________________________________________________________________________

+    Management contract or compensatory plan or arrangement required to be filed or incorporated by reference as an exhibit to this Form 10-Q.

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AVALONBAY COMMUNITIES, INC.
Date:	May 4, 2022	/s/ Benjamin W. Schall
		Benjamin W. Schall
		Chief Executive Officer and President
		(Principal Executive Officer)
Date:	May 4, 2022	/s/ Kevin P. O'Shea
		Kevin P. O'Shea
		Chief Financial Officer
		(Principal Financial Officer)

51

EX-10.1

[(20XX)-(20XX+3) TSR and Operating Metrics Awards]

Form of

Personal Performance Award Agreement Exhibit

for the

Three Year Performance Period Ending December 31, 20XX1

Name: /$ParticipantName$/

Initial Target Dollar Value of Award: /$GrantTxt$/

Date of Grant: /$GrantDate$/

As an officer of Avalonbay Communities, Inc., you have been awarded two performance awards with an aggregate total target dollar value as listed above:

Fifty-five percent of such total dollar value is allocated to a performance award that employs total shareholder return metrics. The number of target units for such award and other information about such award is set forth in Exhibit A attached hereto.

Forty-five percent of such total dollar value is allocated to a performance award that employs operating performance metrics. The number of target units for such award and other information about such award is set forth in Exhibit B attached hereto.

In consideration of the receipt of such awards, you acknowledge receipt of, and agree to be bound by, the two award agreements attached hereto and the Award Terms attached hereto in Exhibit C, the Plan, and any exhibits to the Award Terms (all as defined pursuant to the attached exhibits).

                AVALONBAY COMMUNITIES, INC.

Benjamin W. Schall,

Chief Executive Officer and President

                Agreed and Acknowledged:

The recipient of this award shall agree and acknowledge receipt of this award and its terms through acceptance of the award via the grant acceptance functionality at the recipient’s Merrill Lynch Benefits Online account.

1 The following in this form of agreement are subject to change from time to time for future versions of this agreement: the metrics used; the target, threshold and maximum levels of achievement for each metric; and the weightings among the metrics.

Page 1 of 15

[Exhibit A – TSR Metrics Unit Award 20XX-(20XX+3)]

Form of

Personal Performance Award Agreement Exhibit

for

Total Shareholder Return (TSR) Metrics Units

(20XX Award – Maturing December 31, 20XX+3)

Name: /$ParticipantName$/

Date of Grant: /$GrantDate$/

Dollar Value for TSR Units: /$GrantTxt2$/

Valuation per Unit (average closing price of a share of AvalonBay common stock over the 20 trading days immediately prior to the first day of the Performance Period) : /$GrantTxt4$/

Number of TSR Target Units: /$AwardsGranted$/

Performance Period:    January 1, 20XX – December 31, (20XX+3)

Threshold/Target/Max Multiplier: 50%/100%/200%

As an officer or associate of AvalonBay Communities, Inc. (“AvalonBay” or the “Company”), you have been awarded Performance-Based Restricted Stock Units (“Units”) that employ total shareholder return (TSR) metrics as outlined below. The award described herein is subject to the “Award Terms of Performance-Based Restricted Stock Units” as most recently approved by the Board of Directors and its Compensation Committee on or before the Date of Grant, a copy of which has been distributed to you with this Award Agreement (the “Award Terms”). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Award Terms.

This Personal Performance Award Agreement Exhibit contains specific information about the awards being made this year that employ TSR metrics for the indicated Performance Period as well as information about your specific award.

TSR Performance Metrics:

Your award consists initially of the number of Target Units indicated above but you could earn less or more than that number based on the threshold/target/max multiplier above and the terms described herein. The final number of Units you may earn shall be determined following the completion of the Performance Period based on the Total Shareholder Return of a share of AvalonBay common stock over the Performance Period, expressed as an annualized rate of return (i.e., the rate of return which, when compounded annually over the Performance Period, equals the Total Shareholder Return for the period) (“AVB Annualized Performance”).

You have been awarded/$AwardsGranted$/ of Target Units that employ TSR-based Performance Metrics. The Performance Metrics that will determine the final number of Units you may earn are as follows:

1. Relative Metric against the FTSE NAREIT Apartment Index: Sixty-five percent (65.0%) of the Target Number of TSR Units may be earned based on comparing the AVB Annualized Performance to the annualized total shareholder return of the FTSE NAREIT Equity Apartments Index (Bloomberg ticker: FNAPTTR) (the “Apt Index”) for the Performance Period as follows:

AVB Annualized Performance below (-) or above (+) the Apt Index Return	Percentage of 65.0% Earned
more than -400 basis points below	0%
-400 basis points(threshold*)	50%
0 basis points (target*)	100%
+400 basis points (maximum*)	200%

Page 2 of 15

[Exhibit A – TSR Metrics Unit Award 20XX-(20XX+3)]

*For results between threshold and target, or between target and maximum, the percentage of 65.0% of the Target Number of TSR Units earned shall be based on interpolation. In performing this calculation, (i) AVB Annualized Performance shall be determined to the nearest whole basis point, (ii) the Apt Index Return shall be determined to the nearest whole basis point, and the difference shall be determined by subtracting the amount determined in clause (ii) from the amount determined in clause (i).

2. Relative Metric against the FTSE NAREIT Equity REITs Index: Thirty-five percent (35.0%) of the Target Number of TSR Units may be earned based on comparing the AVB Annualized Performance to the annualized total shareholder return of the FTSE NAREIT Equity REITs Index (Bloomberg ticker: FNRETR)2 (the “REIT Equity Index”) for the Performance Period as follows:

AVB Annualized Performance below (-) or above (+) the REIT Equity Index Return	Percentage of 35.0% Earned
more than -600 basis points below	0%
-600 basis points (threshold*)	50%
0 basis points (target*)	100%
+600 basis points (maximum*)	200%

*For results between threshold and target, or between target and maximum, the percentage of 35.0% of the Target Number of Units earned shall be based on interpolation. In performing this calculation, (i) AVB Annualized Performance shall be determined to the nearest whole basis point, (ii) the REIT Equity Index Return shall be determined to the nearest whole basis point, and the difference shall be determined by subtracting the amount determined in clause (ii) from the amount determined in clause (i).

It is noted that each performance metric is independent of the others. For example, if the threshold is not achieved for the Apt Index TSR metric, but target performance is achieved for the REIT Equity Index TSR metric, the number of units earned would equal (35% x 100% x Target Number of Units). Earned Units shall be rounded to the nearest whole value.

Settlement in Unrestricted AvalonBay Common Stock and Payment of Cash Equal to Accrued Dividends Thereon: Following the end of the Performance Period and the effectiveness of the Compensation Committee’s final determination of (i) the Company’s Total Shareholder Return for the Performance Period and how it compared to the TSR Performance Metrics and goals set forth in this award, and (ii) the number of Units earned by you on account thereof, the earned portion of this Award (i.e., the earned Units) shall be settled with the issuance to you of unrestricted shares of AvalonBay Common Stock effective March 1 of the year following the end of the Performance Period or, if not a business day, the next business day. I.e., for a Performance Period ending December 31, 20XX, your shares of unrestricted stock will be issued March 1, 20XX+1. On or about the time of the issuance of such shares of unrestricted stock to you (but in no event later than March 15 of such year), the Company will pay to you, as additional compensation and subject to tax withholding, cash equal in amount to the dividends that would have been payable on such number of shares for dividend record dates that occurred from the Date of Grant of this award through its settlement date following the end of the Performance Period (for clarification, this is usually 12 dividend record dates if the Date of Grant is in February of the first year of the Performance Period), without any supplement thereto in the nature of interest or compounding thereon.

Forfeiture of Units; Sale Event: As provided in the Award Terms, no Units may be earned if your employment (or other business relationship) terminates for any reason prior to the completion of the first

2 Note: The FTSE NAREIT Equity REITs index (FNRETR) is described by FTSE as spanning the commercial real estate space across the U.S. economy and contains all equity REITs not designated as timber REITs or infrastructure REITs.

Page 3 of 15

[Exhibit A – TSR Metrics Unit Award 20XX-(20XX+3)]

year of the Performance Period. Thereafter, you may vest in a portion of the award, to be earned and settled in unrestricted shares of AvalonBay common stock and a cash payment equal in amount to the accrued dividends thereon as described above, if your employment (or other business relationship) terminates due to death, Disability, Retirement, or termination without Cause. The Award terms describe special rules that apply in the event of a Sale Event.

[End of Text]

Page 4 of 15

[Exhibit B – Operating Metrics Unit Award 20XX-(20XX+3)]

Form of

Personal Performance Award Agreement Exhibit

For

Operating Metrics

(20XX Award – Maturing December 31, (20XX+3))

Name: /$ParticipantName$/

Date of Grant: /$GrantDate$/

Dollar Value for Operating Metrics Units: /$GrantTxt3$/

Valuation per Unit (average closing price of a share of AvalonBay common stock over the 20 trading days immediately prior to the first day of the Performance Period)): /$GrantTxt4$/

Number ofOperating Metrics Target Units: /$GrantTxt6$/

Performance Period:    January 1, 20XX – December 31, (20XX+3)

Threshold/Target/Max Multiplier: 50%/100%/200%

As an officer or associate of AvalonBay Communities, Inc. (“AvalonBay” or the “Company”), you have been awarded Performance-Based Restricted Stock Units (“Units”) that employ operating performance metrics as outlined below. The award described herein is subject to the “Award Terms of Performance-Based Restricted Stock Units” as most recently approved by the Board of Directors and its Compensation Committee on or before the Date of Grant, a copy of which has been distributed to you with this Award Agreement (the “Award Terms”). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Award Terms.

This Personal Performance Award Agreement Exhibit contains specific information about the awards being made this year that employ operating performance metrics for the indicated Performance Period as well as information about your specific award.

Operating Performance Metrics:

Your award consists initially of the number of Target Units indicated above but you could earn less or more than that number based on the threshold/target/max multiplier above and the terms described herein. The final number of Units you may earn shall be determined following the completion of the Performance Period based on AvalonBay’s performance on three operating performance metrics measured over the Performance Period.

You have been awarded /$GrantTxt6$/ of Target Units that employ operating performance metrics. The Performance Metrics that will determine the final number of Units you may earn are as follows:

1. Core Funds from Operations (“Core FFO”) per share growth, measured over the Performance Period and expressed as a compound annual growth rate, as compared against the Peer Group Weighted Average. Forty percent (40.0%) of the Target Number of Operating Metric Units may be earned based on comparing AvalonBay’s Core FFO3 growth as compared to the Peer Group Weighted Average4:

3 The determination of Core FFO and Core FFO per share growth rates for AvalonBay and the Peer Group shall be approved by the Compensation Committee taking into account published Core FFO/share amounts and adjustments deemed appropriate to derive comparable results between the Core FFO and Core FFO per share growth of the Company and its peers, which may include adjustments deemed appropriate in the event of special dividends and distributions to shareholders as a result, for example, of portfolio sales. Core FFO may be calculated (before such adjustments, if any) as presented in the Company’s earnings releases or as presented in third party published reports.

4 The “Peer Group” consists of the following companies, identified by their stock symbols AIRC, CPT, EQR, ESS, MAA, and UDR. The peer group may be adjusted (including for an interim period during a performance period) as the Compensation Committee of the Board of Directors reasonably deems necessary to take into account unanticipated events (whether announced or occurring before or after the date of this award), such as mergers, acquisitions, corporate reorganizations or splits, going private activity, and/or the resulting effects of any such event.

Page 5 of 15

[Exhibit B – Operating Metrics Unit Award 20XX-(20XX+3)]

AVB Performance Period Core FFO/share growth below (-) or above (+) the Peer Group Core FFO/share growth	Percentage of 40.0% Earned
more than -400 basis points below	0%
-400 basis points (threshold*)	50%
0 basis points (target*)	100%
+400 basis points (maximum*)	200%

*For results between threshold and target, or between target and maximum, the percentage of 40.0% of the Target Number of Operating Metric Units earned shall be based on interpolation. In performing this calculation, (i) AVB Performance Period Core FFO/share growth shall be determined to the nearest whole basis point, (ii) the Peer Group Core FFO/share growth shall be determined to the nearest whole basis point (using each individual peer company Core FFO/share growth unrounded in determining the average, which is then rounded), and the difference shall be determined by subtracting the amount determined in clause (ii) from the amount determined in clause (i).

2. Net Debt (i.e., outstanding indebtedness less cash on the balance sheet) divided by Core Earnings before Interest, Depreciation and Amortization (EBITDA), measured at the end of each quarter during the Performance Period and averaged, as compared against the Peer Group Weighted Average of the same calculation over the performance period. Forty percent (40.0%) of the Target Number of Operating Metric Units may be earned based on comparing AvalonBay’s Net Debt/EBITDA5 during the performance period as compared to the Peer Group Weighted Average:

AVB Performance Period Net Debt/Core EBITDA more than orless than the Peer Group average	Percentage of 40.0% Earned
(AVB Net Debt/Core EBITDA calculation minus Peer Group calculation) is more than 1.50	0%
(AVB Net Debt/Core EBITDA calculation minus Peer Group calculation) equals 1.50 (threshold*)	50%
(AVB Net Debt/Core EBITDA calculation minus Peer Group calculation) equals 0 (target*)	100%
(AVB Net Debt/Core EBITDA calculation minus Peer Group calculation) is -1.50 (negative 1.5) or less (i.e., a larger negative number) (maximum*)	200%

*For results between threshold and target, or between target and maximum, the percentage of 40.0% of the Target Number of Operating Metric Units earned shall be based on interpolation. In performing this calculation, (i) AVB Performance Period Net Debt/Core EBITDA shall be determined to the nearest second decimal point (i.e., 1/100th), (ii) the Peer Group average shall be determined to the nearest second decimal point (using each individual peer company Net Debt/Core EBITDA growth unrounded in determining the average, which is then rounded), and the difference shall be determined by subtracting the amount determined in clause (ii) from the amount determined in clause (i).

5 The determination of Net Debt/Core EBITDA for AvalonBay and the Peer Group shall be approved by the Compensation Committee taking into account published debt, cash and equivalents, and Core EBITDA amounts and adjustments thereto deemed appropriate to derive comparable results between the Net Debt/Core EBITDA of the Company and its peers.

Page 6 of 15

[Exhibit B – Operating Metrics Unit Award 20XX-(20XX+3)]

3. Net Asset Value (“NAV”) per share growth, measured over the Performance Period and expressed as a compound annual growth rate, as compared against the Peer Group Weighted Average. Twenty percent (20.0%) of the Target Number of Operating Metric Units may be earned based on comparing AvalonBay’s NAV6 growth as compared to the Peer Group Weighted Average:

AVB Performance Period NAV/share growth below (-) or above (+) the Peer Group NAV/share growth	Percentage of 20.0% Earned
more than -400 basis points below	0%
-400 basis points (threshold*)	50%
0 basis points (target*)	100%
+400 basis points (maximum*)	200%

*For results between threshold and target, or between target and maximum, the percentage of 20.0% of the Target Number of Operating Metric Units earned shall be based on interpolation. In performing this calculation, (i) AVB Performance Period NAV/share growth shall be determined to the nearest whole basis point, (ii) the Peer Group Core NAV/share growth shall be determined to the nearest whole basis point (using each individual peer company NAV/share growth unrounded in determining the average, which is then rounded), and the difference shall be determined by subtracting the amount determined in clause (ii) from the amount determined in clause (i).

It is noted that each performance metric is independent of the others. For example, if the threshold is not achieved for the Core FFO metric but target performance is achieved for the Net Debt/Core EBITDA metric and the NAV metric, the number of units earned would equal (40.0% x 100% x Target Number of Operating Metric Units) + (20.0% x 100% x Target Number of Operating Units). Earned Units shall be rounded to the nearest whole value. References herein to the Peer Group Weighted Average mean an average of the results of each member of the Peer Group where the performance of each member is weighted in accordance with the equity market capitalization of such member at the beginning of the performance period. To determine the equity market capitalization of each member of the Peer Group as of the beginning of the performance period, (i) the simple average of the closing common stock price of the member over the 20 trading days immediately prior to the first day of the Performance Period shall be multiplied by (ii) the sum of the following as reported by the member as outstanding on the day immediately prior to the first day of the Performance Period (i.e., December 31, 20XX for a performance period beginning on January 1, 20XX+1): (x) the shares of common stock of such member outstanding on such day, and (y) the number of “OP (operating partnership) units” and “DownREIT units” (and other units of interest that are convertible into shares of common stock or a cash amount based on the trading value of common stock) outstanding as of such day and held by third parties other than the member’s publicly traded real estate investment trust. The Compensation Committee may use its discretion to adjust the Peer Group Weighted Average to take into account unanticipated events (whether announced or occurring before or after the date of this award), such as mergers, acquisitions, corporate reorganizations, splits, going private activity, and special dividends and distributions to shareholders as a result, for example, of portfolio sales, which in each case reasonably require, in the Compensation Committee’s determination, an adjustment to the equity market capitalization used for such member to more accurately reflect its equity market capitalization compared to other peers over the performance period.

6 The determination of NAV and NAV per share growth rates for AvalonBay and the Peer Group shall be approved by the Compensation Committee taking into account published NAV/share amounts and adjustments deemed appropriate to derive comparable results between the NAV and NAV per share growth of the Company and its peers, which may include adjustments deemed appropriate in the event of special dividends and distributions to shareholders as a result, for example, of portfolio sales. NAV may be calculated (before such adjustments, if any) as presented in third party published reports.

Page 7 of 15

[Exhibit B – Operating Metrics Unit Award 20XX-(20XX+3)]

Settlement in Unrestricted AvalonBay Common Stock and Payment of Cash Equal to Accrued Dividends Thereon: Following the end of the Performance Period and the effectiveness of the Compensation Committee’s final determination of (i) the Company’s performance for the Performance Period and how it compared to the Operating Performance Metrics and goals set forth in this award, and (ii) the number of Units earned by you on account thereof, the earned portion of this Award (i.e., the earned Units) shall be settled with the issuance to you of unrestricted shares of AvalonBay Common Stock effective March 1 of the year following the end of the Performance Period or, if not a business day, the next business day. I.e., for a Performance Period ending December 31, 20XX, your shares of unrestricted stock will be issued March 1, 20XX+1. On or about the time of the issuance of such shares of unrestricted stock to you (but in no event later than March 15 of such year), the Company will pay to you, as additional compensation and subject to tax withholding, cash equal in amount to the dividends that would have been payable on such number of shares for dividend record dates that occurred from the Date of Grant of this award through its settlement date following the end of the Performance Period (for clarification, this is usually 12 dividend record dates if the Date of Grant is in February of the first year of the Performance Period), without any supplement thereto in the nature of interest or compounding thereon.

Forfeiture of Units; Sale Event: As provided in the Award Terms, no Units may be earned if your employment (or other business relationship) terminates for any reason prior to the completion of the first year of the Performance Period. Thereafter, you may vest in a portion of the award, to be earned and settled in unrestricted shares of AvalonBay common stock and a cash payment equal in amount to the accrued dividends thereon as described above, if your employment (or other business relationship) terminates due to death, Disability, Retirement, or termination without Cause. The Award terms describe special rules that apply in the event of a Sale Event.

[End of Text]

Page 8 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

AWARD TERMS OF

PERFORMANCE-BASED RESTRICTED STOCK UNITS

GRANTED UNDER THE

AVALONBAY COMMUNITIES, INC.

SECOND AMENDED AND RESTATED 2009 EQUITY INCENTIVE PLAN

(As most recently approved by the Board of Directors and its Compensation Committeeon or before the Date of Grant)

Introduction    You have been granted performance-based restricted stock units under the AvalonBay Communities, Inc. Second Amended and Restated 2009 Equity Incentive Plan (as the same has or may be amended, the “Plan”), subject to the following Award Terms. This grant is also subject to the terms of (i) your Personal Performance Award Agreement Exhibit(s) (“Personal Exhibit”), as further explained herein, and (ii) the Plan, which is hereby incorporated by reference. To the extent that an Award Term conflicts with the Plan, the Plan shall govern.

Type of Award    You are being awarded performance-based restricted stock units (the “Units”). Units are bookkeeping entries only, and you shall have no rights as a stockholder of the Company, and no dividend and voting rights, with respect to the Units, nor shall a notional amount be reinvested in respect of “phantom dividends” for the purpose of crediting your account with additional Units.

Certain Principal

Terms    Your Personal Exhibit sets forth certain principal terms about the Units awarded for the applicable Performance Period, such as the performance metrics which will apply to determine the final number of Units earned. The terms included in your Personal Exhibit include the following:

•Date of Grant

•Number of Target Units Awarded

•Performance Period

•Total Shareholder Return and/or Operating Performance Metrics

No Transfers    You may not sell, gift, or otherwise transfer or dispose of any of the Units.

Performance Metrics     If you remain an active employee of AvalonBay from the Date of Grant through the last day of the Performance Period, then the number of Units you will earn at the end of the Performance Period will be based upon the performance of (i) the Company’s Total Shareholder Return, and/or (ii) the Company’s performance as measured against certain metrics of operating performance, in each case over the Performance Period and as described in your Personal Exhibit.

    The Company’s Total Shareholder Return represents the change in the value of an investment in one share of AvalonBay common stock over the Performance Period, expressed as a percentage, assuming the following:

Page 9 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

Beginning Stock Price: average closing price of a share of AvalonBay common stock over the 20 trading days immediately prior to the first day of the Performance Period.

Ending Stock Price: average closing price of a share of AvalonBay common stock over the last 20 trading days of the Performance Period.

Dividends reinvested in additional shares of AvalonBay common stock on the ex dividend date for such dividend at the closing price of a share of AvalonBay common stock.

    If the Company’s Total Shareholder Return is measured on a relative basis against an index, the Total Shareholder Return of the index will be measured by using a 20 trading day average of the beginning and ending price or level of the index.

    The Compensation Committee of the Board of Directors (the “Compensation Committee”), as promptly as practicable (but in no event later than 60 days) following the conclusion of the Performance Period, shall determine (i) the performance of the Company’s Total Shareholder Return over the Performance Period as compared against the Performance Metrics established for the period and/or the achievement of other operating metrics by the Company, and (ii) the actual number of Units that are earned by you, which shall be a percentage (from zero to 200%) of the Target Units you are awarded at the beginning of the Performance Period. You shall forfeit any portion of this Award that is not earned upon the conclusion of the Performance Period (i.e., any Target Units you are awarded that are in excess of the number of Units earned at the end of the Performance Period, as determined by the Compensation Committee, shall be forfeited).

Forfeiture for

Termination of

Employment During

First Year of

Measurement Period;

Vesting Provisions

After

First Year    In the event your employment (or other business relationship) terminates for any reason before the completion of the first year of a Performance Period (i.e., for a Performance Period beginning on January 1, 20xx, if your last day of employment or other business relationship is before December 31, 20xx), whether with or without Cause, or by reason of death or Disability or your voluntary departure or Retirement, you shall forfeit all Units and none of the Units shall be earned.

    In the event your employment (or other business relationship) terminates on or after the completion of the first year of a performance period (i.e, on or after December 31, 20xx for a Performance Period beginning on January 1, 20xx)7, then the following shall apply:

7 If your employment with the Company began after the first day of the performance period, this provision will only apply if, on the date of termination, you have been employed with the Company for at least one year.

Page 10 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

(A) In the event your employment (or other business relationship) terminates on account of any of the following (each, a “Qualifying Termination”):

•death,

•Disability (as defined in the Company’s standard form of Restricted Stock Agreement as in effect on March 1 of the first year of the Performance Period and thereafter, if applicable, subsequently amended (the “Restricted Stock Agreement Form” or, if not defined therein, as defined in the Plan)),

•Retirement (as defined in the Restricted Stock Agreement Form or, if not defined therein, as defined in the Plan), or

•termination without Cause (as defined in the Restricted Stock Agreement Form or, if not defined therein, as defined in the Plan),

then you shall vest in a percentage of the Performance Award (carried out to the nearest hundredth percentage point), such percentage (the “Percentage”) equaling [the number of days of employment served during the Performance Period divided by the total number of days in the Performance Period.]8 Thereafter, when the Performance Period ends, you shall earn the Percentage of the Units that otherwise would have been earned by you had your employment or other business relationship continued through to the end of the Performance Period, and such pro rated number of earned Units shall be settled in unrestricted shares of AvalonBay Common Stock and a cash payment on account of cumulative dividends as described in the related Performance Award Agreement. The Company may require, as a condition to your retaining an interest in the Performance Award following a termination of employment or other business relationship, that you sign and deliver, and do not revoke, a Separation Agreement (as defined in the Restricted Stock Agreement Form (but with a 24 month employee non-solicitation provision instead of a 12 month employee non-solicitation provision) or, if not defined therein, as defined in the Plan) within 30 days of the termination of your employment.For example, with respect to a Performance Award with 1000 target Units, if

(i)your employment (or other business relationship) terminates in a Qualifying Termination9 after the completion of one year of service during the Performance Period and you sign a Separation Agreement as described above,

(ii)you served for 45% of the Performance Period, and it is determined that 150% of target is achieved for that award,

8 Bracketed language is used in the general form of agreement. For the 2022-2024 performance award agreement for Mr. Naughton, Executive Chairman, the language reads as follows: “(i) in the case of Retirement, 100.00%, and (ii) in any of the other cases, the number of days of employment served during the Performance Period divided by the total number of days in the Performance Period, with the result expressed as a percentage.”

9 For the 2022-2024 performance award agreement for Mr. Naughton, Executive Chairman, the following text appears after “Qualfiying Termination”: “other than Retirement)”

Page 11 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

then after the Performance Period is completed you would receive 675 fully vested and unrestricted shares of Company common stock (1000 target Units x 150% achievement x 45% vesting = 675) and a cash payment (subject to tax withholding) on account of the dividends earned on such number of shares during the Performance Period.

(B)In the event your employment (or other business relationship) terminates on account of any reason other than those listed in (A) immediately above (and thus including a termination with Cause or a resignation by you that is not by reason of Retirement), then you shall forfeit all Units and none of the Units shall be earned.

For purposes hereof, a business relationship shall include (i) serving on the Company’s Board of Directors, which service preceded or began immediately following a termination of employment, or (ii) a consulting arrangement between you and the Company that immediately follows termination of employment or termination from the Board of Directors, but only if so stated in a written consulting or other agreement executed by the Company and you, and in such case as described in the preceding clauses (i) or (ii) you shall not be considered to have suffered a termination of employment or other business relationship until the termination of such service on the Board of Directors and/or consulting arrangement.

Leaves of

Absence    In the event that you take a leave of absence during the Performance Period, then, unless prohibited by law, the Company may adjust, in its sole discretion and up to a full forfeiture, the percentage of Units that are earned hereunder to equitably reflect (in the sole discretion of the Company) such absence. Without limiting the foregoing, it is noted that such adjustment may be made, in the sole discretion of the Company, by prorating the number of Units that would otherwise be earned without a leave of absence by:

(i)the portion of the year worked without a leave of absence during the last year of the Performance Period (e.g., if nine months are worked during the last year of the Performance Period, there may be a 25% downward adjustment in the percentage of Units that are earned (3 months absence divided by 12 months in the last year of the performance period), or

(ii)the portion of the Performance Period worked without a leave of absence (e.g., if three months are missed due to a leave of absence during a 36 month Performance Period there may be an 8.33% downward adjustment in the percentage of Units that are earned (3 months absence divided by 36 months in the Performance Period)).

Sale Event    If a Sale Event occurs during the Performance Period, then all outstanding Performance Awards shall vest at their target value (i.e., target number of units) and one unrestricted share of AvalonBay Common Stock shall be issued to you as of the date of the Sale Event for each Unit so earned, and the Company shall promptly pay

Page 12 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

to you, subject to tax withholding, an amount of cash equal to the dividends that would have been payble on such number of shares during the Performance Period up until the date of the Sale Event based on New York Stock Exchange ex-dividend dates (and not dividend payment dates) that occurred during the Performance Period, without any supplement thereto in the nature of interest or compounding thereon.

.

(It is noted that in the event that you acquired a vested interest in a Performance Award on account of a Qualifying Termination, and thereafter a Sale Event is completed, then only the percentage of the award that vested upon the Qualifying Termination shall convert at target into shares of unrestricted stock, and the cash payment related to dividend accrual shall be based on such number).

Notices    Any notice to be given under the terms of this Award Agreement to the Company shall be addressed to the Company in care of its Secretary, and any notice to be given to you shall be addressed to you at your address as set forth in the Company’s records. Either party may hereafter designate a different address for notices to be given to it or him or her.

Titles    Titles and captions are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement. Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Plan or as the context otherwise reasonably indicates.

Amendment     This Award Agreement may be amended only by a writing executed by the parties hereto which specifically states that it is amending this Award Agreement.

Governing Law    The laws of the State of Maryland shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Award Agreement regardless of the law that might be applied under principles of conflicts of laws.

Data Privacy Consent    In order to administer the Plan and this Award Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Award Agreement (the “Relevant Information”). By entering into this Award Agreement, you (i) authorize the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waive any privacy rights you may have with respect to the Relevant Information; (iii) authorize the Relevant Companies to store and transmit such information in electronic form; and (iv) authorize the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate. You shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law.

Page 13 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

Electronic Delivery    The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. By electronically accepting the Award Agreement and participating in the Plan, you agree to be bound by the terms and conditions in the Plan and this Award Agreement.

Non-Solicitation    By accepting an award of Units, you agree that, for a period of at least twenty-four (24) months following your termination of employment with the Company for any reason, you will not, without the prior written consent of the Company, solicit or attempt to solicit for employment with or on behalf of any other person, firm or entity any employee of the Company or any of its affiliates or any other person who was formerly employed by the Company or any of its affiliates within the preceding six months, unless such person’s employment was terminated by the Company or such affiliates.

Recoupment Policy    The Company’s Board of Directors has adopted a Policy for Recoupment of Incentive Compensation (the “Recoupment Policy”), which may be amended from time to time and is available on the Company’s website at www.AvalonBay.com/investors under “Corporate Governance Documents”. By accepting an award of Units, you agree that you have had an opportunity to review the Recoupment Policy and further agree to be bound by the terms of the Recoupment Policy, including without limitation all provisions relating to the recoupment of Incentive Compensation as defined in the Recoupment Policy.

Tax Withholding    The Company's obligation (i) to issue or deliver to you any certificate or certificates for unrestricted shares of AvalonBay Common Stock (“Stock”) in settlement of earned Units or (ii) to pay to you any dividends or make any distributions with respect to the shares of Stock issued in settlement of earned Units, is in each case expressly conditioned on the Company's satisfaction of its obligation, if any, to withhold taxes. You shall, not later than the date as of which the receipt of shares of Stock in settlement of earned Units becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event. The Company shall satisfy any required minimum tax withholding obligation with respect to shares of Stock (or such greater tax withholding as the Administrator may approve) by withholding, from shares of Stock to be issued or released by the transfer agent in connection with the settlement of Units, a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due (with the resulting number

Page 14 of 15

[Exhibit C – Award Terms Distributed with 20XX-(20XX+3) Performance Award]

being rounded up to the nearest whole share of Stock). In addition, by acceptance of this Award, you agrees that for all outstanding Awards not yet vested under the Plan, the Company shall satisfy any required minimum tax withholding obligation with respect to shares of Stock (or such greater tax withholding as the Administrator may approve) by withholding from shares of Stock to be issued under such awards a number of shares of Stock with an aggregate Fair Market Value that would satisfy the minimum tax withholding amount due (with the resulting number being rounded up to the nearest whole share of Stock).

Amendment of Prior

Outstanding Award

Terms; Acknowledgment

and Acceptance

of Award.     You agree that, to the extent the terms in these Award Terms (including any terms relating to accelerated vesting and conditions thereto, but in no event including (i) the number of units, (ii) the vesting schedule or calendar of vesting dates of units (or shares upon settlement of units or a cash payment equal to accrued dividends thereon), or (iii) the metrics or calculations for determining performance achievement) conflict with the Award Terms in any previously awarded and agreed to performance award agreement that is still outstanding (i.e., unforfeited and the performance period not yet complete), the provisions in these Award Terms shall apply. You also acknowledge that you may be required to evidence your acknowledgement of this award and agreement to the terms hereof by accepting this award in the Company’s stock plan administrator’s system, which acceptance may be required within a certain number of days from the grant date hereof in accordance with instructions and/or announcements provided by the Company to you and failing to accept this award within the Company’s stock plan administrator’s system within such number of days may constitute grounds for forfeiture of this award in the Company’s sole and absolute discretion.

Acknowledgement of

Modification to

Ranges on Metrics of

2020-2022 Award     If you hold a performance award for the period January 1, 2020 to December 31, 2022 (a “2020-2022 Award”), you acknowledge that, by action of the Compensation Committee of the Company’s Board of Directors on March 1, 2022, the ranges expressed with respect to the metrics in such award (i.e., the performance level above and below target that will establish threshold and maximum performance) were modified, and that as modified such ranges are consistent with the ranges for the analogous metrics in this award, and you agree, for the purpose of eliminating any ambiguity, that such modified ranges apply to your 2020-2022 Award (i.e., you acknowledge, and will not challenge, the right of such committee to take such binding action). No modification in the method of calculating the Company’s performance with respect to a metric as set forth in the 2020-2022 Award was made.

Counterparts    This Award Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Page 15 of 15

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Benjamin W. Schall, certify that:

1.I have reviewed this quarterly report on Form 10-Q of AvalonBay Communities, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 Date: May 4, 2022

/s/ BENJAMIN W. SCHALL

Benjamin W. Schall

Chief Executive Officer and President

(Principal Executive Officer)

1

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Kevin P. O'Shea, certify that:

1.I have reviewed this quarterly report on Form 10-Q of AvalonBay Communities, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2022

/s/ KEVIN P. O'SHEA

Kevin P. O'Shea

Chief Financial Officer

(Principal Financial Officer)

1

EX-32

Exhibit 32

CERTIFICATION

The undersigned officers of AvalonBay Communities, Inc. (the “Company”) hereby certify that the Company’s quarterly report on Form 10-Q to which this certification is attached (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2022

/s/ BENJAMIN W. SCHALL

Benjamin W. Schall

Chief Executive Officer and President

(Principal Executive Officer)

/s/ KEVIN P. O'SHEA

Kevin P. O'Shea

Chief Financial Officer

(Principal Financial Officer)

This certification is being furnished and not filed, and shall not be incorporated into any document for any purpose, under the Securities Exchange Act of 1934 or the Securities Act of 1933.

1

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2022	Apr. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	1-12672
Entity Registrant Name	AVALONBAY COMMUNITIES, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	77-0404318
Entity Address, Address Line One	4040 Wilson Blvd., Suite 1000
Entity Address, Address City or Town	Arlington
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22203
City Area Code	703
Local Phone Number	329-6300
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	AVB
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		139,818,224
Entity Central Index Key	0000915912
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Real estate:
Land and improvements	$ 4,593,092	$ 4,564,723
Buildings and improvements	18,390,979	18,198,584
Furniture, fixtures and equipment	1,066,224	1,036,640
Gross operating real estate	24,050,295	23,799,947
Less accumulated depreciation	(6,389,336)	(6,208,610)
Net operating real estate	17,660,959	17,591,337
Construction in progress, including land	755,274	807,101
Land held for development	218,852	147,546
For-sale condominium inventory	110,763	146,535
Real estate assets held for sale, net	0	17,065
Total real estate, net	18,745,848	18,709,584
Cash and cash equivalents	343,457	420,251
Cash in escrow	113,954	123,537
Resident security deposits	34,512	33,757
Investments in unconsolidated entities	219,075	216,390
Deferred development costs	47,165	40,414
Prepaid expenses and other assets	217,327	211,484
Right of use lease assets	148,289	146,599
Total assets	19,869,627	19,902,016
LIABILITIES AND EQUITY
Unsecured notes, net	7,250,902	7,349,394
Variable rate unsecured credit facility and commercial paper	0	0
Mortgage notes payable, net	754,131	754,153
Dividends payable	224,552	225,392
Payables for construction	66,846	63,722
Accrued expenses and other liabilities	295,806	296,006
Lease liabilities	167,974	166,497
Accrued interest payable	67,561	50,300
Resident security deposits	61,227	59,787
Liabilities related to real estate assets held for sale	0	304
Total liabilities	8,888,999	8,965,555
Commitments and contingencies
Redeemable noncontrolling interests	3,336	3,368
Equity:
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at March 31, 2022 and December 31, 2021; zero shares issued and outstanding at March 31, 2022 and December 31, 2021	0	0
Common stock, $0.01 par value; 280,000,000 shares authorized at March 31, 2022 and December 31, 2021; 139,818,068 and 139,751,926 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,399	1,398
Additional paid-in capital	10,711,327	10,716,414
Accumulated earnings less dividends	278,948	240,821
Accumulated other comprehensive loss	(14,938)	(26,106)
Total stockholders' equity	10,976,736	10,932,527
Noncontrolling interests	556	566
Total equity	10,977,292	10,933,093
Total liabilities and equity	$ 19,869,627	$ 19,902,016

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, liquidation preference (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	280,000,000	280,000,000
Common stock, shares issued (in shares)	139,818,068	139,751,926
Common stock, shares outstanding (in shares)	139,818,068	139,751,926

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenue:
Rental and other income	$ 613,175	$ 550,258
Management, development and other fees	752	877
Total revenue	613,927	551,135
Expenses:
Operating expenses, excluding property taxes	151,312	140,050
Property taxes	70,738	69,410
Expensed transaction, development and other pursuit costs, net of recoveries	987	(170)
Interest expense, net	56,526	52,613
Gain on extinguishment of debt, net	0	(122)
Depreciation expense	201,786	183,297
General and administrative expense	17,421	17,352
Total expenses	498,770	462,430
Income (loss) from investments in unconsolidated entities	317	(467)
Gain on sale of communities	148,800	53,727
Gain on other real estate transactions, net	37	427
Net for-sale condominium activity	236	(913)
Income before income taxes	264,547	141,479
Income tax (expense) benefit	(2,471)	755
Net income	262,076	142,234
Net income attributable to noncontrolling interests	(32)	(11)
Net income attributable to common stockholders	262,044	142,223
Other comprehensive income (loss):
Gain on cash flow hedges	10,155	0
Cash flow hedge losses reclassified to earnings	1,013	2,367
Comprehensive income	$ 273,212	$ 144,590
Earnings per common share - basic:
Net income attributable to common stockholders (in dollars per share)	$ 1.87	$ 1.02
Earnings per common share - diluted:
Net income attributable to common stockholders (in dollars per share)	$ 1.87	$ 1.02

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 262,076	$ 142,234
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	201,786	183,297
Amortization of deferred financing costs	1,998	1,837
Amortization of debt discount	693	642
Gain on extinguishment of debt, net	0	(122)
Amortization of stock-based compensation	6,970	5,382
Equity in loss of, and return on, unconsolidated entities and noncontrolling interests, net of eliminations	913	1,994
Abandonment of development pursuits	8	246
Unrealized gain on terminated cash flow hedges	0	(2,654)
Cash flow hedge losses reclassified to earnings	1,013	2,367
Gain on sale of real estate assets	(148,837)	(54,154)
Gain on for-sale condominiums	(1,002)	(131)
(Decrease) increase in resident security deposits, prepaid expenses and other assets	(1,233)	9,423
Increase in accrued expenses, other liabilities and accrued interest payable	19,295	39,784
Net cash provided by operating activities	343,680	330,145
Cash flows from investing activities:
Development/redevelopment of real estate assets including land acquisitions and deferred development costs	(232,038)	(198,373)
Acquisition of real estate assets, including partnership interest	(95,426)	0
Capital expenditures - existing real estate assets	(29,472)	(28,020)
Capital expenditures - non-real estate assets	(2,472)	(2,234)
Increase (decrease) in payables for construction	3,124	(8,655)
Proceeds from sale of real estate, net of selling costs	230,617	76,543
Proceeds from the sale of for-sale condominiums, net of selling costs	37,119	13,569
Mortgage note receivable payments	1,946	1,250
Investments in unconsolidated entities	(3,598)	(10,032)
Net cash used in investing activities	(90,200)	(155,952)
Cash flows from financing activities:
Issuance of common stock, net	459	11
Dividends paid	(223,063)	(222,734)
Repayments of mortgage notes payable, including prepayment penalties	(362)	(28,488)
Repayment of unsecured notes, including prepayment penalties	(100,000)	0
Payment of deferred financing costs	(421)	0
Receipt for termination of forward interest rate swaps	0	6,962
Payment to noncontrolling interest	(16)	(22)
Payments related to tax withholding for share-based compensation	(16,353)	(13,228)
Distributions to DownREIT partnership unitholders	(12)	(12)
Distributions to joint venture and profit-sharing partners	(89)	(82)
Preferred interest obligation redemption and dividends	0	(400)
Net cash used in financing activities	(339,857)	(257,993)
Net decrease in cash, cash equivalents and cash in escrow	(86,377)	(83,800)
Cash, cash equivalents and cash in escrow, beginning of period	543,788	313,532
Cash, cash equivalents and cash in escrow, end of period	457,411	229,732
Cash paid during the period for interest, net of amount capitalized	36,290	37,252
Supplemental Cash Flow Information [Abstract]
Cash and cash equivalents	343,457	129,298
Cash in escrow	113,954	100,434
Cash, cash equivalents and cash in escrow reported in the Condensed Consolidated Statements of Cash Flows	$ 457,411	$ 229,732

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Supplemental disclosures of non-cash investing and financing activities
Common stock issued through the dividend reinvestment plan (in shares)	605	839
Common stock issued through the dividend reinvestment plan	$ 150	$ 138
Number of shares withheld to satisfy employees' tax withholding and other liabilities (in shares)	69,721	74,726
Shares withheld to satisfy employees' tax withholding and other liabilities, value	$ 16,365	$ 13,228
Stock issued during period, value, share-based compensation, forfeited	255	69
Dividends declared but not paid	224,552
Change in redemption value of redeemable noncontrolling interest	(43)	(273)
Cash flow hedge losses reclassified to earnings	1,013
Cash flow hedge losses reclassified to earnings	$ 1,013	$ 2,367
Restricted Stock and Restricted Stock Converted From Performance Shares
Supplemental disclosures of non-cash investing and financing activities
Equity instruments granted (in shares)	132,135	149,520
Performance Shares
Supplemental disclosures of non-cash investing and financing activities
Equity instruments granted (in shares)	72,189
Converted to restricted stock (in shares)	54,053	56,545
Restricted stock
Supplemental disclosures of non-cash investing and financing activities
Equity instruments granted (in shares)	78,082	92,975
Fair value of shares issued	$ 18,441	$ 16,347
Stock issued during period, shares, share-based compensation, forfeited (in shares)	1,181	343
Common stock
Supplemental disclosures of non-cash investing and financing activities
Dividends declared but not paid	$ 222,754	$ 222,424
Accumulated earnings less dividends
Supplemental disclosures of non-cash investing and financing activities
Change in redemption value of redeemable noncontrolling interest	$ (43)	$ (273)

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Organization, Basis of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Organization, Basis of Presentation and Significant Accounting Policies

Organization, Basis of Presentation and Significant Accounting Policies

Organization and Basis of Presentation

AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities 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 of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

At March 31, 2022, the Company owned or held a direct or indirect ownership interest in 296 operating apartment communities containing 87,918 apartment homes in 12 states and the District of Columbia, of which 18 communities were under development and two were under redevelopment, as well as The Park Loggia, which contains 172 for-sale residential condominiums, of which 138 have been sold as of March 31, 2022, and 66,000 square feet of commercial space, of which 87% has been leased as of March 31, 2022. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 29 communities that, if developed as expected, will contain an estimated 10,122 apartment homes.

The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.

Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q.

Earnings per Common Share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share ("EPS"). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):

	For the three months ended
	3/31/2022		3/31/2021
Basic and diluted shares outstanding
Weighted average common shares - basic	139,559,904		139,291,187
Weighted average DownREIT units outstanding	7,500		7,500
Effect of dilutive securities	408,678		253,726
Weighted average common shares - diluted	139,976,082		139,552,413
Calculation of Earnings per Share - basic
Net income attributable to common stockholders	$	262,044	$	142,223
Net income allocated to unvested restricted shares	(523)		(324)
Net income attributable to common stockholders, adjusted	$	261,521	$	141,899
Weighted average common shares - basic	139,559,904		139,291,187
Earnings per common share - basic	$	1.87	$	1.02
Calculation of Earnings per Share - diluted
Net income attributable to common stockholders	$	262,044	$	142,223
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations	12		12
Adjusted net income attributable to common stockholders	$	262,056	$	142,235
Weighted average common shares - diluted	139,976,082		139,552,413
Earnings per common share - diluted	$	1.87	$	1.02

Certain options to purchase shares of common stock in the amount of 9,793 and 294,115 were outstanding as of March 31, 2022 and 2021, respectively, but were not included in the computation of diluted earnings per share because such options were anti-dilutive for the period.

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap and interest rate cap agreements (collectively, "Hedging Derivatives") for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives for trading or other speculative purposes. The Company assesses the effectiveness of qualifying cash flow and fair value hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of interest expense, net. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. The Company does not present or disclose the fair value of Hedging Derivatives on a net basis. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For the Hedging Derivatives that qualify as effective cash flow hedges, the Company has recorded the cumulative changes in the fair value of Hedging Derivatives in accumulated other comprehensive loss. Amounts recorded in accumulated other comprehensive loss will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that qualify as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding hedged item. See Note 11, “Fair Value,” for further discussion of derivative financial instruments.

Legal and Other Contingencies

The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

Acquisitions of Investments in Real Estate

The Company accounts for acquisitions of real estate in accordance with the authoritative guidance for the initial measurement, which first requires that the Company determine if the real estate investment is the acquisition of an asset or a business combination. Under either model, the Company must identify and determine the fair value of any assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes various sources, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed. For a business combination, the Company records the assets acquired and liabilities assumed based on the fair value of each respective item. For an asset acquisition, the allocation of the purchase price is based on the relative fair value of the net assets. The Company expenses all applicable acquisition costs for a business combination and capitalizes all applicable acquisition costs for an asset acquisition. The Company expects that acquisitions of individual operating communities will generally be asset acquisitions.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to amounts in prior years' notes to financial statements to conform to current year presentations as a result of changes in held for sale classification, disposition activity and segment classification.

For-Sale Condominium Inventory

The Company presents for-sale condominium inventory at historical cost and evaluates the condominiums for impairment when potential indicators exist, as further discussed in Note 5, "Investments." 

Income Taxes

During the three months ended March 31, 2022, the Company recognized income tax expense of $2,471,000 primarily related to the condominium dispositions at The Park Loggia.

Leases

The Company is party to leases as both a lessor and a lessee, primarily as follows:

•lessor of residential and commercial space within its apartment communities; and

•lessee under (i) ground leases for land underlying current operating or development communities and certain commercial and parking facilities and (ii) office leases for its corporate headquarters and regional offices.

Lessee Considerations

The Company assesses whether a contract is or contains a lease based on whether the contract conveys the right to control the use of an identified asset, including specified portions of larger assets, for a period of time in exchange for consideration. The Company’s leases include both fixed and variable lease payments. Lease payments included in the lease liability include only fixed lease payments. For leases that have options to extend the term or terminate the lease early, the Company only factored the impact of such options into the lease term if the option was considered reasonably certain to be exercised. The Company determined the discount rate associated with its ground and office leases on a lease by lease basis using the Company’s actual borrowing rates as well as indicative market pricing for longer term rates and taking into consideration the remaining term of the lease agreements.

Lessor Considerations

The Company has determined that the residential and commercial leases at its apartment communities are operating leases. For leases that include rent concessions and/or fixed and determinable rent increases, rental income is recognized on a straight-line basis over the noncancellable term of the lease, which, for residential leases, is generally one year. Some of the Company’s commercial leases have renewal options which the Company will only include in the lease term if, at the commencement of the lease, it is reasonably certain that the lessee will exercise this option.

For the Company’s leases, which are comprised of a lease component and common area maintenance as a non-lease component, the Company determined that (i) the leases are operating leases, (ii) the lease component is the predominant component and (iii) all components of its operating leases share the same timing and pattern of transfer.

Revenue and Gain Recognition

Under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, the Company recognizes revenue for the transfer of goods and services to customers for consideration that the Company expects to receive. The majority of the Company’s revenue is derived from residential and commercial rental and other lease income, which are accounted for as discussed above, under "Leases". The Company's revenue streams that are not accounted for under ASC 842, Leases, include (i) management, development and other fees, (ii) rental and non-rental related income and (iii) gains or losses on the sale of real estate.

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, “Segment Reporting,” for the three months ended March 31, 2022 and 2021. Segment information for total revenue excludes real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities" (dollars in thousands):

	For the three months ended
	Same Store		Other Stabilized		Development/ Redevelopment		Non- allocated (1)		Total
For the period ended March 31, 2022
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	752	$	752
Rental and non-rental related income (2)	2,060		587		57		—		2,704
Total non-lease revenue (3)	2,060		587		57		752		3,456
Lease income (4)	544,779		45,012		17,461		—		607,252
Total revenue	$	546,839	$	45,599	$	17,518	$	752	$	610,708
For the period ended March 31, 2021
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	877	$	877
Rental and non-rental related income (2)	1,684		447		47		—		2,178
Total non-lease revenue (3)	1,684		447		47		877		3,055
Lease income (4)	501,509		20,511		7,026		—		529,046
Total revenue	$	503,193	$	20,958	$	7,073	$	877	$	532,101

__________________________________

(1)Revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)Amounts include revenue streams related to leasing activities that are not considered components of a lease, including but not limited to, apartment hold fees and application fees, as well as revenue streams not related to leasing activities, including but not limited to, vendor revenue sharing, building advertising, vending and dry cleaning revenue.

(3)Represents revenue accounted for under ASC 606.

(4)Represents residential and commercial rental and other lease income, which are accounted for under ASC 842.

Due to the nature and timing of the Company’s identified revenue streams, there are no material amounts of outstanding or unsatisfied performance obligations as of March 31, 2022.

Uncollectible Lease Revenue Reserves

The Company assesses the collectability of its lease revenue and receivables on an on-going basis, (i) assessing the probability of receiving all lease amounts due on a lease by lease basis, (ii) reserving all amounts for those leases where collection of substantially all of the remaining lease payments is not probable and (iii) subsequently, will only recognize revenue to the extent cash is received. If the Company determines that collection of the remaining lease payments becomes probable at a future date, the Company will recognize the cumulative revenue that would have been recorded under the original lease agreement.

In addition to the specific reserves recognized under ASC 842, the Company also evaluates its lease receivables for collectability at a portfolio level under ASC 450, Contingencies – Loss Contingencies. The Company recognizes a reserve under ASC 450 when the uncollectible revenue is probable and reasonably estimable. The Company applies this reserve to the population of the Company’s revenue and receivables not specifically addressed as part of the specific ASC 842 reserve.

COVID-19 Pandemic

In March 2020, the World Health Organization designated COVID-19 as a pandemic (the "Pandemic"). While the Company has taken actions in response to the Pandemic, the ultimate impact on its consolidated results of operations, cash flows, financial condition and liquidity will depend on, among other factors, (i) the effect of the Pandemic on the multifamily industry and the general economy, including from measures taken by businesses and the government, such as governmental limitations on multifamily owners' ability to evict residents who are delinquent in the payment of their rent and (ii) consumer and business preferences for living and working arrangements both during and after the Pandemic.

As of March 31, 2022, the Company assessed the collectibility of outstanding lease receivables considering the impact of the Pandemic, and recorded an aggregate offset to income for uncollectible lease revenue for its residential and commercial portfolios of $13,600,000 and $18,645,000 for the three months ended March 31, 2022 and 2021, respectively.

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Interest Capitalized	3 Months Ended
	Mar. 31, 2022
Interest Capitalized
Interest Capitalized	Interest CapitalizedThe Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company's development or redevelopment activities totaled $7,100,000 and $8,799,000 for the three months ended March 31, 2022 and 2021, respectively.

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Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

The Company's debt, which consists of unsecured notes, variable rate unsecured term loans (the "Term Loans"), mortgage notes payable, the Credit Facility and the Commercial Paper Program, as defined below, as of March 31, 2022 and December 31, 2021 are summarized below. The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of March 31, 2022 and December 31, 2021, as shown in the accompanying Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities").

	3/31/2022		12/31/2021
Fixed rate unsecured notes (1)	$	7,150,000	$	7,150,000
Term Loans (1)	150,000		250,000
Fixed rate mortgage notes payable - conventional and tax-exempt (2)	306,118		306,281
Variable rate mortgage notes payable - conventional and tax-exempt (2)	463,950		464,150
Total mortgage notes payable and unsecured notes and Term Loans	8,070,068		8,170,431
Credit Facility	—		—
Commercial paper	—		—
Total	$	8,070,068	$	8,170,431

_____________________________________

(1)Balances at March 31, 2022 and December 31, 2021 exclude $9,617 and $10,033, respectively, of debt discount, and $39,481 and $40,573, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Condensed Consolidated Balance Sheets.

(2)Balances at March 31, 2022 and December 31, 2021 exclude $13,251 and $13,528, respectively, of debt discount, and $2,686 and $2,750, respectively, of deferred financing costs, as reflected in mortgage notes payable, net on the accompanying Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2022, the Company repaid its $100,000,000 variable rate unsecured term loan at par upon maturity.

At March 31, 2022, the Company had a $1,750,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the “Credit Facility”) which matures in February 2024. The Credit Facility bears interest at varying levels based on (i) the London Interbank Offered Rate (“LIBOR”) applicable to the period of borrowing for a particular draw of funds from the facility (e.g., one month to maturity, three months to maturity, etc.) and (ii) the rating levels for our unsecured notes. The current stated pricing for drawn borrowings is LIBOR plus 0.775% per annum (1.23% at March 31, 2022), assuming a one month borrowing rate. The annual facility fee for the Credit Facility remained at 0.125%, resulting in a fee of $2,188,000 annually based on the $1,750,000,000 facility size and based on the Company's current credit rating.

The Company had no borrowings outstanding under the Credit Facility and had $6,914,000 and $11,969,000 outstanding in letters of credit that reduced the borrowing capacity as of March 31, 2022 and December 31, 2021, respectively. In addition, the Company had $39,831,000 and $39,581,000 outstanding in additional letters of credit unrelated to the Credit Facility as of March 31, 2022 and December 31, 2021, respectively.

In March 2022, the Company established an unsecured commercial paper note program (the “Commercial Paper Program”). Under the terms of the Commercial Paper Program, the Company may issue, from time to time, unsecured commercial paper notes with varying maturities of less than one year. Amounts available under the Commercial Paper Program may be issued, repaid and re-issued from time to time, with the maximum aggregate face or principal amount outstanding at any one time not to exceed $500,000,000. The Commercial Paper Program is backstopped by liquidity under the Credit Facility, with the principal amount of the notes outstanding under the Commercial Paper Program effectively reducing the borrowing capacity under the Credit Facility by an amount equal to the value of such notes. The Company had no amounts outstanding under the Commercial Paper Program as of March 31, 2022.

In the aggregate, secured notes payable mature at various dates from March 2027 through July 2066, and are secured by certain apartment communities (with a net carrying value of $1,248,432,000, excluding communities classified as held for sale, as of March 31, 2022).

The weighted average interest rate of the Company's fixed rate secured notes payable (conventional and tax-exempt) was 3.7% at both March 31, 2022 and December 31, 2021. The weighted average interest rate of the Company's variable rate secured notes payable (conventional and tax-exempt), including the effect of certain financing related fees, was 2.1% and 1.7% at March 31, 2022 and December 31, 2021, respectively.

In addition to the Commercial Paper Program, scheduled payments and maturities of secured notes payable and unsecured notes outstanding at March 31, 2022 are as follows (dollars in thousands):

Year	Secured notes principal payments		Secured notes maturities		Unsecured notes and Term Loan maturities		Stated interest rate of unsecured notes and Term Loan
2022	$	7,901	$	—	$	—	—
2023	8,999		—		350,000		4.200	%
					250,000		2.850	%
2024	9,837		—		300,000		3.500	%
					150,000		LIBOR + 0.85%
2025	10,478		—		525,000		3.450	%
					300,000		3.500	%
2026	11,420		—		475,000		2.950	%
					300,000		2.900	%
2027	13,765		236,100		400,000		3.350	%
2028	18,512		—		450,000		3.200	%
					400,000		1.900	%
2029	9,462		66,250		450,000		3.300	%
2030	10,014		—		700,000		2.300	%
2031	10,669		—		600,000		2.450	%
Thereafter	111,538		245,123		700,000		2.050	%
					350,000		3.900	%
					300,000		4.150	%
					300,000		4.350	%
	$	222,595	$	547,473	$	7,300,000

The Company was in compliance at March 31, 2022 with customary covenants under the Credit Facility and the Commercial Paper Program, the Term Loan and the Company's fixed rate unsecured notes.

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Equity

3 Months Ended

Mar. 31, 2022

Stockholders' Equity Note [Abstract]

Equity

Equity

The following summarizes the changes in equity for the three months ended March 31, 2022 (dollars in thousands):

	Common stock		Additional paid-in capital		Accumulated earnings less dividends		Accumulated other comprehensive loss		Total stockholder's equity		Noncontrolling interests		Total equity
Balance at December 31, 2021	$	1,398	$	10,716,414	$	240,821	$	(26,106)	$	10,932,527	$	566	$	10,933,093
Net income attributable to common stockholders	—		—		262,044		—		262,044		—		262,044
Gain on cash flow hedges, net	—		—		—		10,155		10,155		—		10,155
Cash flow hedge losses reclassified to earnings	—		—		—		1,013		1,013		—		1,013
Change in redemption value of redeemable noncontrolling interest	—		—		(43)		—		(43)		—		(43)
Noncontrolling interest distribution and income allocation	—		—		—		—		—		(10)		(10)
Dividends declared to common stockholders ($1.59 per share)	—		—		(222,373)		—		(222,373)		—		(222,373)
Issuance of common stock, net of withholdings	1		(14,263)		(1,501)		—		(15,763)		—		(15,763)
Amortization of deferred compensation	—		9,176		—		—		9,176		—		9,176
Balance at March 31, 2022	$	1,399	$	10,711,327	$	278,948	$	(14,938)	$	10,976,736	$	556	$	10,977,292

The following summarizes the changes in equity for the three months ended March 31, 2021 (dollars in thousands):

	Common stock		Additional paid-in capital		Accumulated earnings less dividends		Accumulated other comprehensive loss		Total stockholder's equity		Noncontrolling interests		Total equity
Balance at December 31, 2020	$	1,395	$	10,664,416	$	126,022	$	(40,250)	$	10,751,583	$	591	$	10,752,174
Net income attributable to common stockholders	—		—		142,223		—		142,223		—		142,223
Cash flow hedge losses reclassified to earnings	—		—		—		2,367		2,367		—		2,367
Change in redemption value of redeemable noncontrolling interest	—		—		(273)		—		(273)		—		(273)
Noncontrolling interest distribution and income allocation	—		—		—		—		—		(16)		(16)
Dividends declared to common stockholders ($1.59 per share)	—		—		(221,779)		—		(221,779)		—		(221,779)
Issuance of common stock, net of withholdings	1		(14,037)		958		—		(13,078)		—		(13,078)
Amortization of deferred compensation	—		7,286		—		—		7,286		—		7,286
Balance at March 31, 2021	$	1,396	$	10,657,665	$	47,151	$	(37,883)	$	10,668,329	$	575	$	10,668,904

As of March 31, 2022 and December 31, 2021, the Company's charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock.

During the three months ended March 31, 2022, the Company:

i.issued 4,304 shares of common stock in connection with stock options exercised;

ii.issued 605 shares of common stock through the Company's dividend reinvestment plan;

iii.issued 132,135 shares of common stock in connection with restricted stock grants and the conversion of performance awards to shares of common stock;

iv.withheld 69,721 shares of common stock to satisfy employees' tax withholding and other liabilities; and

v.canceled 1,181 shares of restricted common stock upon forfeiture.

Deferred compensation granted under the Company's Second Amended and Restated 2009 Equity Incentive Plan (the "2009 Plan") during the three months ended March 31, 2022 is not reflected on the accompanying Condensed Consolidated Balance Sheets as of March 31, 2022, and will not be reflected until recognized as compensation cost.

In July 2020, the Company’s Board of Directors approved a stock repurchase program under which the Company may acquire shares of its common stock in open market or negotiated transactions up to an aggregate purchase price of $500,000,000 (the "2020 Stock Repurchase Program"). Purchases of common stock under the 2020 Stock Repurchase Program may be exercised at the Company’s discretion with the timing and number of shares repurchased depending on a variety of factors, including price, corporate and regulatory requirements and other corporate liquidity requirements and priorities. The 2020 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice. During the three months ended March 31, 2022, the Company had no repurchases of shares under this program. As of March 31, 2022, the Company had $316,148,000 remaining authorized for purchase under this program.

In May 2019, the Company commenced a fifth continuous equity program ("CEP V") under which the Company may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of its common stock from time to time. Actual sales will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company's common stock and the Company's determinations of the appropriate funding sources. The Company engaged sales agents for CEP V who receive compensation of up to 1.5% of the gross sales price for shares sold. The Company expects that, if entered into, it will physically settle each forward sale agreement on one or more dates specified by the Company on or prior to the maturity date of that particular forward sale agreement, in which case the Company will receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the forward sale price. However, the Company may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, the Company will pay the forward seller, in the form of a reduced initial forward sale price, a commission of up to 1.5% of the sales prices of all borrowed shares of common stock sold. During the three months ended March 31, 2022, the Company had no sales under this program. In December 2021, the Company entered into a forward contract under CEP V to sell 68,577 shares of common stock for approximate proceeds of $16,000,000 net of offering fees and discounts and based on the initial forward price, with settlement of the forward contract to occur on one or more dates not later than December 31, 2022. The final proceeds will be determined on the date(s) of settlement after adjustments for the Company's dividends and a daily interest factor. As of March 31, 2022, the Company had $705,961,000 remaining authorized for issuance under CEP V, after consideration of the forward contract.

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Investments

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investments

Investments

Unconsolidated Investments

As of March 31, 2022, the Company had investments in seven unconsolidated real estate entities with ownership interest percentages ranging from 20.0% to 50.0% and other unconsolidated investments including property technology investment funds. The Company accounts for its investments in unconsolidated entities under the equity method of accounting or under the measurement alternative with the carrying amount of the investment adjusted to fair value when there is an observable transaction for the same or similar investment of the same issuer indicating a change in fair value. The significant accounting policies of the Company's unconsolidated investments are consistent with those of the Company in all material respects. Certain of these investments are subject to various buy‑sell provisions or other rights which are customary in real estate joint venture agreements. The Company and its partners in these entities may initiate these provisions to either sell the Company's interest or acquire the interest from the Company's partner.

The following is a combined summary of the financial position of the Company's unconsolidated investments discussed above, accounted for using the equity method and presented on the accompanying Condensed Consolidated Balance Sheets as of the dates presented, including development joint ventures and unconsolidated communities sold during the respective periods (dollars in thousands):

	3/31/2022		12/31/2021
	(unaudited)
Assets:
Real estate, net	$	1,198,088	$	1,184,041
Other assets (1)	409,751		399,591
Total assets	$	1,607,839	$	1,583,632
Liabilities and partners' capital:
Mortgage notes payable, net (2)	$	660,210	$	645,235
Other liabilities	166,097		168,403
Partners' capital	781,532		769,994
Total liabilities and partners' capital	$	1,607,839	$	1,583,632

_________________________________

(1)    Consists primarily of property technology investment management funds, in-place leases and cash and cash equivalents.

(2)    Other than a construction loan on the AVA Arts District development, with $27,333 currently outstanding as of March 31, 2022 and reflected in the table above, the Company has not guaranteed any other outstanding debt, nor does the Company have any obligation to fund any debt that it has not guaranteed, should the unconsolidated entity be unable to do so.

The following is a combined summary of the operating results of the entities accounted for using the equity method discussed above and presented on the accompanying Condensed Consolidated Statements of Comprehensive Income, for the periods presented (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
	(unaudited)
Rental and other income (1)	$	26,450	$	26,398
Operating and other expenses	(11,383)		(13,631)
Gain on sale of communities	58		—
Interest expense, net	(6,026)		(7,668)
Depreciation expense	(7,318)		(8,478)
Net income	$	1,781	$	(3,379)
Company's share of net income	$	416	$	61
Direct investment gains, amortization of excess investment and other (2)	(99)		(528)
Income from investments in unconsolidated entities	$	317	$	(467)

_________________________________

(1)    Includes unrealized gains on the Company's indirect investments in property technology ventures accounted for under the equity method of accounting during the three months ended March 31, 2022.

(2) Includes unrealized gains on the Company’s direct investment in equity securities of property technology investments during the three months ended March 31, 2022.

Investments in Consolidated Real Estate Entities

During the three months ended March 31, 2022, the Company acquired Avalon Flatirons, located in Lafayette, CO, which contains 207 apartment homes and 16,000 square feet of commercial space and was acquired for a purchase price of $95,000,000.

The Company accounted for this purchase as an asset acquisition and recorded the acquired assets and assumed liabilities, including identifiable intangibles, at their relative fair values based on the purchase price and acquisition costs incurred. The Company used third party pricing or internal models for the value of the land, a valuation model for the value of the building, and an internal model to determine the fair value of the remaining real estate assets and in-place leases. Given the heterogeneous nature of multifamily real estate, the fair values for the land, debt, real estate assets and in-place leases incorporated significant unobservable inputs and therefore are considered to be Level 3 prices within the fair value hierarchy.

Expensed Transaction, Development and Other Pursuit Costs

The Company capitalizes pre-development costs incurred in pursuit of new development opportunities when future development is probable ("Development Rights"). Future development of these Development Rights is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and the availability of capital. Costs incurred for pursuits for which future development is not yet considered probable are expensed as incurred. In addition, if the status of a Development Right changes, making future development by the Company no longer probable, any non-recoverable capitalized pre-development costs are expensed. The Company expensed costs related to development pursuits not yet considered probable for development and the abandonment of Development Rights, as well as costs incurred in pursuing the acquisition or disposition of assets for which such acquisition and disposition activity did not occur. The amount for the three months ended March 31, 2022 was a net expense of $987,000. The amount for the three months ended March 31, 2021 was a net recovery of $170,000. These costs are included in expensed transaction, development and other pursuit costs, net of recoveries on the accompanying Condensed Consolidated Statements of Comprehensive Income. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

Casualty and Impairment of Long-Lived Assets

In the Company's evaluation of its real estate portfolio for impairment, as discussed below, it considered the impact of the Pandemic and did not identify any indicators of impairment as a result.

The Company evaluates its real estate and other long-lived assets for impairment when potential indicators of impairment exist. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property or long-lived asset may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the property or long-lived asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, the

Company recognizes an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property or long-lived asset. Based on periodic tests of recoverability of long-lived assets, the Company did not recognize any impairment losses for the three months ended March 31, 2022 and 2021.

The Company evaluates its for-sale condominium inventory for potential indicators of impairment, considering whether the fair value of the individual for-sale condominium units exceeds the carrying value of those units. For-sale condominium inventory is stated at cost, unless the carrying amount of the inventory is not recoverable when compared to the fair value of each unit. The Company determines the fair value of its for-sale condominium inventory as the estimated sales price less direct costs to sell. For the three months ended March 31, 2022 and 2021, the Company did not recognize any impairment losses on its for-sale condominium inventory.

The Company assesses its portfolio of land held for both development and investment for impairment if the intent of the Company changes with respect to either the development of, or the expected holding period for, the land. During the three months ended March 31, 2022 and 2021, the Company did not recognize any impairment charges on its investment in land.

The Company evaluates its unconsolidated investments for other than temporary impairment, considering both the extent and amount by which the carrying value of the investment exceeds the fair value, and the Company's intent and ability to hold the investment to recover its carrying value. The Company also evaluates its proportionate share of any impairment of assets held by unconsolidated investments. There were no other than temporary impairment losses recognized for any of the Company's investments in unconsolidated real estate entities during the three months ended March 31, 2022 and 2021.

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Real Estate Disposition Activities

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Real Estate Disposition Activities

Real Estate Disposition Activities

The following real estate sales occurred during the three months ended March 31, 2022 (dollars in thousands):

Community name	Location	Period of sale	Apartment homes	Gross sales price		Gain on  disposition (1)
Avalon West Long Branch	West Long Branch, NJ	Q122	180	$	75,000	$	56,434
Avalon Ossining	Ossining, NY	Q122	168	$	70,000	$	40,512
Avalon East Norwalk	Norwalk, CT	Q122	240	$	90,000	$	51,762

_________________________________

(1)    Gain on disposition was reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income.

At March 31, 2022, the Company had no real estate assets that qualified as held for sale.

The Park Loggia

The Park Loggia, located in New York, NY, contains 172 for-sale residential condominiums and 66,000 square feet of commercial space. During the three months ended March 31, 2022, the Company sold 15 residential condominiums at The Park Loggia for gross proceeds of $40,336,000, resulting in a gain in accordance with GAAP of $1,002,000. As of March 31, 2022, there were 34 residential condominiums remaining to be sold. The Company incurred $766,000 and $1,044,000 during the three months ended March 31, 2022 and 2021, respectively, in marketing, operating and administrative costs. All amounts are included in net for-sale condominium activity, on the accompanying Condensed Consolidated Statements of Comprehensive Income. As of March 31, 2022 and December 31, 2021, the unsold for-sale residential condominiums at The Park Loggia had an aggregate carrying value of $110,763,000 and $146,535,000, respectively, presented as for-sale condominium inventory on the accompanying Condensed Consolidated Balance Sheets.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lease Obligations

The Company owns seven apartment communities and two commercial properties, located on land subject to ground leases expiring between July 2046 and April 2106. The Company has purchase options for all ground leases expiring prior to 2062. The ground leases for six of the seven apartment communities and the two commercial properties are operating leases, with rental expense recognized on a straight-line basis over the lease term. In addition, the Company is party to 12 leases for its corporate and regional offices with varying terms through 2031, all of which are operating leases.

As of March 31, 2022 and December 31, 2021, the Company had total operating lease assets of $120,004,000 and $118,370,000, respectively, and lease obligations of $147,866,000 and $146,377,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets. The Company incurred costs of $3,706,000 and $3,827,000 for the three months ended March 31, 2022 and 2021, respectively, related to operating leases. The Company has one apartment community located on land subject to a ground lease and four leases for portions of parking garages adjacent to apartment communities, that are finance leases. As of March 31, 2022 and December 31, 2021, the Company had total finance lease assets of $28,285,000 and $28,229,000, respectively, and total finance lease obligations of $20,107,000 and $20,120,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets.

Commitments and Contingencies

Commitments and Contingencies

Lease Obligations

The Company owns seven apartment communities and two commercial properties, located on land subject to ground leases expiring between July 2046 and April 2106. The Company has purchase options for all ground leases expiring prior to 2062. The ground leases for six of the seven apartment communities and the two commercial properties are operating leases, with rental expense recognized on a straight-line basis over the lease term. In addition, the Company is party to 12 leases for its corporate and regional offices with varying terms through 2031, all of which are operating leases.

As of March 31, 2022 and December 31, 2021, the Company had total operating lease assets of $120,004,000 and $118,370,000, respectively, and lease obligations of $147,866,000 and $146,377,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets. The Company incurred costs of $3,706,000 and $3,827,000 for the three months ended March 31, 2022 and 2021, respectively, related to operating leases. The Company has one apartment community located on land subject to a ground lease and four leases for portions of parking garages adjacent to apartment communities, that are finance leases. As of March 31, 2022 and December 31, 2021, the Company had total finance lease assets of $28,285,000 and $28,229,000, respectively, and total finance lease obligations of $20,107,000 and $20,120,000, respectively, reported as components of right of use lease assets and lease liabilities on the accompanying Condensed Consolidated Balance Sheets.

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Segment Reporting

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company's reportable operating segments include Same Store, Other Stabilized and Development/Redevelopment. Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change. In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment.

The Company's segment disclosures present the measure(s) used by the chief operating decision maker ("CODM") for assessing each segment's performance. The Company's CODM is comprised of several members of its executive management team who use net operating income ("NOI") as the primary financial measure for Same Store communities and Other Stabilized communities. 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, gain on extinguishment of debt, net, general and administrative expense, (income) loss from investments in unconsolidated entities, depreciation expense, income tax expense (benefit), gain on sale of communities, gain on other real estate transactions, net, net for-sale condominium activity and net operating income from real estate assets sold or held for sale. The CODM evaluates the Company's financial performance on a consolidated residential and commercial basis. The commercial results attributable to the non-apartment components of the Company's mixed-use communities and other nonresidential operations represent 2.0% and 1.5% of total NOI for the three months ended March 31, 2022 and 2021, respectively. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income.

A reconciliation of NOI to net income for the three months ended March 31, 2022 and 2021 is as follows (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Net income	$	262,076	$	142,234
Property management and other indirect operating expenses, net of corporate income	28,113		24,470
Expensed transaction, development and other pursuit costs, net of recoveries	987		(170)
Interest expense, net	56,526		52,613
Gain on extinguishment of debt, net	—		(122)
General and administrative expense	17,421		17,352
(Income) loss from investments in unconsolidated entities	(317)		467
Depreciation expense	201,786		183,297
Income tax expense (benefit)	2,471		(755)
Gain on sale of communities	(148,800)		(53,727)
Gain on other real estate transactions, net	(37)		(427)
Net for-sale condominium activity	(236)		913
Net operating income from real estate assets sold or held for sale	(1,699)		(11,247)
Net operating income	$	418,291	$	354,898

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Rental income from real estate assets sold or held for sale	$	3,219	$	19,034
Operating expenses from real estate assets sold or held for sale	(1,520)		(7,787)
Net operating income from real estate assets sold or held for sale	$	1,699	$	11,247

The primary performance measure for communities under development or redevelopment depends on the stage of completion.  While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget.

The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2022. Segment information for the three months ended March 31, 2022 and 2021 has been adjusted to exclude the real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities."

	For the three months ended
	Total revenue		NOI		Gross real estate (1)
For the period ended March 31, 2022
Same Store
New England	$	81,818	$	52,587	$	2,888,176
Metro NY/NJ	115,476		79,506		4,244,572
Mid-Atlantic	82,093		55,992		3,257,920
Southeast Florida	9,071		5,977		396,555
Denver, CO	6,315		4,727		320,803
Pacific Northwest	34,298		24,222		1,290,332
Northern California	96,729		68,699		3,651,325
Southern California	121,039		84,717		4,409,369
Total Same Store	546,839		376,427		20,459,052
Other Stabilized	45,599		29,542		2,511,859
Development / Redevelopment	17,518		12,322		1,721,164
Land Held for Development	N/A		N/A		218,852
Non-allocated (2)	752		N/A		224,257
Total	$	610,708	$	418,291	$	25,135,184
For the period ended March 31, 2021
Same Store
New England	$	74,871	$	47,445	$	2,862,749
Metro NY/NJ	106,846		73,273		4,215,804
Mid-Atlantic	78,105		53,051		3,233,446
Southeast Florida	7,241		4,189		394,451
Denver, CO	5,652		4,019		319,667
Pacific Northwest	30,532		20,391		1,283,372
Northern California	92,855		65,552		3,614,708
Southern California	107,091		72,535		4,363,142
Total Same Store	503,193		340,455		20,287,339
Other Stabilized	20,958		10,971		1,665,418
Development / Redevelopment	7,073		3,472		1,081,493
Land Held for Development	N/A		N/A		184,058
Non-allocated (2)	877		N/A		356,064
Total	$	532,101	$	354,898	$	23,574,372

__________________________________

(1)Does not include gross real estate assets held for sale or classified as held for sale subsequent to March 31, 2021 of $485,631.

(2)Revenue represents third-party management, accounting, and developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."

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Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

Stock-Based Compensation PlansAs part of its long-term compensation plans, the Company has granted stock options, performance awards and restricted stock under the 2009 Plan. Details of the outstanding awards and activity under the 2009 Plan for the three months ended March 31, 2022 are presented below.

Stock Options:

	2009 Plan shares	Weighted average exercise price per share
Options Outstanding at December 31, 2021	299,149	$	178.71
Granted (1)	9,793	236.14
Exercised	(4,304)	141.41
Forfeited	(2,444)	180.32
Options Outstanding at March 31, 2022	302,194	$	181.09
Options Exercisable at March 31, 2022	7,058	$	135.62

__________________________________

(1)Grants are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

Performance Awards:

	Performance awards	Weighted average grant date fair value per award (1)
Outstanding at December 31, 2021	284,522	$	214.73
Granted (2)	72,189	255.01
Change in awards based on performance (3)	(20,356)	200.92
Converted to shares of common stock	(54,053)	217.33
Forfeited	(755)	223.60
Outstanding at March 31, 2022	281,547	$	225.54

__________________________________

(1)Weighted average grant date fair value per award includes the impact of post grant modifications.

(2)The shares of common stock that may be earned is based on the total shareholder return metrics for the Company's common stock for 39,645 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 32,544 performance awards.

(3)Represents the change in the number of performance awards earned based on performance achievement.

The Company used a Monte Carlo model to assess the compensation cost associated with the portion of the performance awards granted for which achievement will be determined by using total shareholder return measures. For the awards granted in 2022, the assumptions used are as follows:

	2022
Dividend yield	2.7%
Estimated volatility over the life of the plan (1)	16.1% - 36.8%
Risk free rate	0.72% - 1.68%
Estimated performance award value based on total shareholder return measure	$271.98

__________________________________

(1)Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

For the portion of the performance awards granted in 2022 for which achievement will be determined by using financial metrics, the compensation cost was based on a weighted average grant date value of $234.18, and the Company's estimate of corporate achievement for the financial metrics.

Restricted Stock:

	Restricted stock shares	Restricted stock shares weighted average grant date fair value per share		Restricted stock shares converted from performance awards
Outstanding at December 31, 2021	157,066	$	192.90	74,627
Granted - restricted stock shares	78,082	236.17		—
Vested - restricted stock shares	(70,596)	195.83		(47,335)
Forfeited	(1,120)	219.75		(28)
Outstanding at March 31, 2022	163,432	$	212.12	27,264

Total employee stock-based compensation cost recognized in income was $6,887,000 and $5,247,000 for the three months ended March 31, 2022 and 2021, respectively, and total capitalized stock-based compensation cost was $2,377,000 and $1,903,000 for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, there was a total unrecognized compensation cost of $67,583,000 for unvested restricted stock, stock options and performance awards, which is expected to be recognized over a weighted average period of 2.2 years. Forfeitures are included in compensation cost as they occur.

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Related Party Arrangements

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Related Party Arrangements

Related Party Arrangements

Unconsolidated Entities

The Company manages unconsolidated real estate entities for which it receives asset management, property management, development and redevelopment fee revenue. From these entities, the Company earned fees of $752,000 and $877,000 for the three months ended March 31, 2022 and 2021, respectively. In addition, the Company had outstanding receivables associated with its property and construction management roles of $5,057,000 and $3,964,000 as of March 31, 2022 and December 31, 2021, respectively.

Director Compensation

The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock units in the amount of $515,000 and $465,000 in the three months ended March 31, 2022 and 2021, respectively, as a component of general and administrative expense. Deferred compensation relating to these restricted stock grants and deferred stock units to non-employee directors was $281,000 and $696,000 on March 31, 2022 and December 31, 2021, respectively, reported as a component of prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets.

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Fair Value

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Financial Instruments Carried at Fair Value

Derivative Financial Instruments

The Company uses Hedging Derivatives to manage its interest rate risk. These instruments are carried at fair value in the Company's financial statements. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions which have an A or better credit rating by the Standard & Poor's Ratings Group, and monitors the credit ratings of counterparties and the exposure of the Company to any single entity. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, such as interest rate, term to maturity and volatility, the credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of March 31, 2022, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined it is not significant. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following table summarizes the consolidated derivative positions at March 31, 2022 (dollars in thousands):

	Non-designated Hedges			Cash Flow Hedges
	Interest Rate Caps			Interest Rate Swaps
Notional balance	$	402,670		$	150,000
Weighted average interest rate (1)	2.1		%	N/A
Weighted average swapped/capped interest rate	6.1		%	1.4		%
Earliest maturity date	January 2024			November 2022
Latest maturity date	November 2026			November 2022

____________________________________

(1)For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.

As of March 31, 2022, the Company had $150,000,000 in aggregate outstanding pay fixed interest rate swap agreements that were entered into as hedges of changes in interest rates for our anticipated future debt issuance activity. At the time of the future debt issuance activity, the Company expects to cash settle the swaps and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the hedging impact from these positions will then be recognized over the life of the issued debt as a yield adjustment.

The Company had five derivatives not designated as hedges at March 31, 2022 for which the fair value changes for the three months ended March 31, 2022 and 2021 were not material. The Company did not have any derivatives designated as fair value hedges as of March 31, 2022 and 2021.

The following table summarizes the deferred losses reclassified from accumulated other comprehensive loss into earnings (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Cash flow hedge losses reclassified to earnings	$	1,013	$	2,367

The Company anticipates reclassifying approximately $4,051,000 of net hedging losses from accumulated other comprehensive loss into earnings within the next 12 months as an offset to the hedged item during this period.

Redeemable Noncontrolling Interests

The Company issued and has outstanding 7,500 units of limited partnership interest in a DownREIT which can be presented for cash redemption as determined by the partnership agreement. Under the DownREIT agreement, for each limited partnership unit, the limited partner is entitled to receive cash in the amount equal to the fair value of the Company's common stock on or about the date of redemption. In lieu of cash redemption, the Company may elect to exchange such units for an equal number of shares of the Company's common stock. The limited partnership units in the DownREIT are valued using the market price of the Company's common stock, a Level 1 price under the fair value hierarchy.

Financial Instruments Not Carried at Fair Value

Cash and Cash Equivalents

Cash and cash equivalent balances are held with various financial institutions within accounts designed to preserve principal. The Company monitors credit ratings of these financial institutions and the concentration of cash and cash equivalent balances with any one financial institution and believes the likelihood of realizing material losses related to cash and cash equivalent balances is remote. Cash and cash equivalents are carried at their face amounts, which reasonably approximate their fair values and are Level 1 within the fair value hierarchy.

Other Financial Instruments

Rents and other receivables and prepaid expenses, accounts and construction payable and accrued expenses and other liabilities are carried at their face amounts, which reasonably approximate their fair values.

Indebtedness

The Company values its fixed rate unsecured notes using quoted market prices, a Level 1 price within the fair value hierarchy. The Company values its mortgage notes payable, variable rate unsecured notes, including the Term Loans and any outstanding amounts under the Credit Facility and Commercial Paper Program using a discounted cash flow analysis on the expected cash flows of each instrument. This analysis reflects the contractual terms of the instrument, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The process also considers credit valuation adjustments to appropriately reflect the Company's nonperformance risk. The Company has concluded that the value of its mortgage notes payable, variable rate unsecured notes, Term Loans and any outstanding amounts under the Credit Facility and Commercial Paper Program are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy.

Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis

The following tables summarize the classification between the three levels of the fair value hierarchy of the Company's financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands):

	3/31/2022
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non Designated Hedges
Interest Rate Caps	$	955	$	—	$	955	$	—
Interest Rate Swaps - Assets	13,359		—		13,359		—
DownREIT units	(1,863)		(1,863)		—		—
Indebtedness
Fixed rate unsecured notes	(7,040,472)		(7,040,472)		—		—
Mortgage notes payable and Term Loan	(841,293)		—		(841,293)		—
Total	$	(7,869,314)	$	(7,042,335)	$	(826,979)	$	—

	12/31/2021
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non Designated Hedges
Interest Rate Caps	$	225	$	—	$	225	$	—
Interest Rate Swaps - Assets	3,204		—		3,204		—
DownREIT units	(1,895)		(1,895)		—		—
Indebtedness
Fixed rate unsecured notes	(7,624,560)		(7,624,560)		—		—
Mortgage notes payable, variable rate unsecured notes and Term Loans	(940,779)		—		(940,779)		—
Total	$	(8,563,805)	$	(7,626,455)	$	(937,350)	$	—

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Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated subsequent events through the date on which this Form 10-Q was filed, the date on which these financial statements were issued, and identified the items below for discussion.

In April 2022, the Company completed an underwritten public offering of 2,000,000 shares of its common stock in connection with forward contracts entered into with certain financial institutions acting as forward purchasers. Assuming full physical settlement of the forward contracts, which the Company expects to occur no later than December 31, 2023, the Company will receive approximate proceeds of $494,200,000 net of offering fees and discounts and based on the initial forward price. The final proceeds will be determined on the date(s) of settlement and are subject to certain customary adjustments for the Company's dividends and a daily interest factor during the term of the forward contracts.

In April 2022, the Company entered into the first commitment under its mezzanine loan and preferred equity investment program (the "Structured Investment Program"), through which the Company will provide mezzanine loans or preferred equity investments to third party multifamily developers. This initial commitment is for a mezzanine loan of up to $52,575,000 to fund a multifamily development project in Denver, CO.

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Organization, Basis of Presentation and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities 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 of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

At March 31, 2022, the Company owned or held a direct or indirect ownership interest in 296 operating apartment communities containing 87,918 apartment homes in 12 states and the District of Columbia, of which 18 communities were under development and two were under redevelopment, as well as The Park Loggia, which contains 172 for-sale residential condominiums, of which 138 have been sold as of March 31, 2022, and 66,000 square feet of commercial space, of which 87% has been leased as of March 31, 2022. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 29 communities that, if developed as expected, will contain an estimated 10,122 apartment homes.

The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.

Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q.

Earnings per Common Share

Earnings per Common Share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share ("EPS"). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):

	For the three months ended
	3/31/2022		3/31/2021
Basic and diluted shares outstanding
Weighted average common shares - basic	139,559,904		139,291,187
Weighted average DownREIT units outstanding	7,500		7,500
Effect of dilutive securities	408,678		253,726
Weighted average common shares - diluted	139,976,082		139,552,413
Calculation of Earnings per Share - basic
Net income attributable to common stockholders	$	262,044	$	142,223
Net income allocated to unvested restricted shares	(523)		(324)
Net income attributable to common stockholders, adjusted	$	261,521	$	141,899
Weighted average common shares - basic	139,559,904		139,291,187
Earnings per common share - basic	$	1.87	$	1.02
Calculation of Earnings per Share - diluted
Net income attributable to common stockholders	$	262,044	$	142,223
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations	12		12
Adjusted net income attributable to common stockholders	$	262,056	$	142,235
Weighted average common shares - diluted	139,976,082		139,552,413
Earnings per common share - diluted	$	1.87	$	1.02

Certain options to purchase shares of common stock in the amount of 9,793 and 294,115 were outstanding as of March 31, 2022 and 2021, respectively, but were not included in the computation of diluted earnings per share because such options were anti-dilutive for the period.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap and interest rate cap agreements (collectively, "Hedging Derivatives") for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives for trading or other speculative purposes. The Company assesses the effectiveness of qualifying cash flow and fair value hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of interest expense, net. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. The Company does not present or disclose the fair value of Hedging Derivatives on a net basis. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For the Hedging Derivatives that qualify as effective cash flow hedges, the Company has recorded the cumulative changes in the fair value of Hedging Derivatives in accumulated other comprehensive loss. Amounts recorded in accumulated other comprehensive loss will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that qualify as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding hedged item. See Note 11, “Fair Value,” for further discussion of derivative financial instruments.

Legal and Other Contingencies

Legal and Other Contingencies

The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

Acquisitions of Investments in Real Estate

Acquisitions of Investments in Real Estate

The Company accounts for acquisitions of real estate in accordance with the authoritative guidance for the initial measurement, which first requires that the Company determine if the real estate investment is the acquisition of an asset or a business combination. Under either model, the Company must identify and determine the fair value of any assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes various sources, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed. For a business combination, the Company records the assets acquired and liabilities assumed based on the fair value of each respective item. For an asset acquisition, the allocation of the purchase price is based on the relative fair value of the net assets. The Company expenses all applicable acquisition costs for a business combination and capitalizes all applicable acquisition costs for an asset acquisition. The Company expects that acquisitions of individual operating communities will generally be asset acquisitions.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassifications

ReclassificationsCertain reclassifications have been made to amounts in prior years' notes to financial statements to conform to current year presentations as a result of changes in held for sale classification, disposition activity and segment classification.

For-Sale Condominium Inventory

For-Sale Condominium Inventory The Company presents for-sale condominium inventory at historical cost and evaluates the condominiums for impairment when potential indicators exist, as further discussed in Note 5, "Investments."

Income Tax, Policy

Income Taxes

During the three months ended March 31, 2022, the Company recognized income tax expense of $2,471,000 primarily related to the condominium dispositions at The Park Loggia.

Lessee Considerations

Lessee Considerations

The Company assesses whether a contract is or contains a lease based on whether the contract conveys the right to control the use of an identified asset, including specified portions of larger assets, for a period of time in exchange for consideration. The Company’s leases include both fixed and variable lease payments. Lease payments included in the lease liability include only fixed lease payments. For leases that have options to extend the term or terminate the lease early, the Company only factored the impact of such options into the lease term if the option was considered reasonably certain to be exercised. The Company determined the discount rate associated with its ground and office leases on a lease by lease basis using the Company’s actual borrowing rates as well as indicative market pricing for longer term rates and taking into consideration the remaining term of the lease agreements.

Lessor Considerations

Lessor Considerations

The Company has determined that the residential and commercial leases at its apartment communities are operating leases. For leases that include rent concessions and/or fixed and determinable rent increases, rental income is recognized on a straight-line basis over the noncancellable term of the lease, which, for residential leases, is generally one year. Some of the Company’s commercial leases have renewal options which the Company will only include in the lease term if, at the commencement of the lease, it is reasonably certain that the lessee will exercise this option.

For the Company’s leases, which are comprised of a lease component and common area maintenance as a non-lease component, the Company determined that (i) the leases are operating leases, (ii) the lease component is the predominant component and (iii) all components of its operating leases share the same timing and pattern of transfer.

Revenue and Gain Recognition

Revenue and Gain Recognition

Under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, the Company recognizes revenue for the transfer of goods and services to customers for consideration that the Company expects to receive. The majority of the Company’s revenue is derived from residential and commercial rental and other lease income, which are accounted for as discussed above, under "Leases". The Company's revenue streams that are not accounted for under ASC 842, Leases, include (i) management, development and other fees, (ii) rental and non-rental related income and (iii) gains or losses on the sale of real estate.

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, “Segment Reporting,” for the three months ended March 31, 2022 and 2021. Segment information for total revenue excludes real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities" (dollars in thousands):

	For the three months ended
	Same Store		Other Stabilized		Development/ Redevelopment		Non- allocated (1)		Total
For the period ended March 31, 2022
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	752	$	752
Rental and non-rental related income (2)	2,060		587		57		—		2,704
Total non-lease revenue (3)	2,060		587		57		752		3,456
Lease income (4)	544,779		45,012		17,461		—		607,252
Total revenue	$	546,839	$	45,599	$	17,518	$	752	$	610,708
For the period ended March 31, 2021
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	877	$	877
Rental and non-rental related income (2)	1,684		447		47		—		2,178
Total non-lease revenue (3)	1,684		447		47		877		3,055
Lease income (4)	501,509		20,511		7,026		—		529,046
Total revenue	$	503,193	$	20,958	$	7,073	$	877	$	532,101

__________________________________

(1)Revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)Amounts include revenue streams related to leasing activities that are not considered components of a lease, including but not limited to, apartment hold fees and application fees, as well as revenue streams not related to leasing activities, including but not limited to, vendor revenue sharing, building advertising, vending and dry cleaning revenue.

(3)Represents revenue accounted for under ASC 606.

(4)Represents residential and commercial rental and other lease income, which are accounted for under ASC 842.

Due to the nature and timing of the Company’s identified revenue streams, there are no material amounts of outstanding or unsatisfied performance obligations as of March 31, 2022.

Uncollectible Lease Revenue Reserves

Uncollectible Lease Revenue Reserves

The Company assesses the collectability of its lease revenue and receivables on an on-going basis, (i) assessing the probability of receiving all lease amounts due on a lease by lease basis, (ii) reserving all amounts for those leases where collection of substantially all of the remaining lease payments is not probable and (iii) subsequently, will only recognize revenue to the extent cash is received. If the Company determines that collection of the remaining lease payments becomes probable at a future date, the Company will recognize the cumulative revenue that would have been recorded under the original lease agreement.

In addition to the specific reserves recognized under ASC 842, the Company also evaluates its lease receivables for collectability at a portfolio level under ASC 450, Contingencies – Loss Contingencies. The Company recognizes a reserve under ASC 450 when the uncollectible revenue is probable and reasonably estimable. The Company applies this reserve to the population of the Company’s revenue and receivables not specifically addressed as part of the specific ASC 842 reserve.

COVID-19 Pandemic

COVID-19 Pandemic

In March 2020, the World Health Organization designated COVID-19 as a pandemic (the "Pandemic"). While the Company has taken actions in response to the Pandemic, the ultimate impact on its consolidated results of operations, cash flows, financial condition and liquidity will depend on, among other factors, (i) the effect of the Pandemic on the multifamily industry and the general economy, including from measures taken by businesses and the government, such as governmental limitations on multifamily owners' ability to evict residents who are delinquent in the payment of their rent and (ii) consumer and business preferences for living and working arrangements both during and after the Pandemic.

As of March 31, 2022, the Company assessed the collectibility of outstanding lease receivables considering the impact of the Pandemic, and recorded an aggregate offset to income for uncollectible lease revenue for its residential and commercial portfolios of $13,600,000 and $18,645,000 for the three months ended March 31, 2022 and 2021, respectively.

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Organization, Basis of Presentation and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of earnings per common share

The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):

	For the three months ended
	3/31/2022		3/31/2021
Basic and diluted shares outstanding
Weighted average common shares - basic	139,559,904		139,291,187
Weighted average DownREIT units outstanding	7,500		7,500
Effect of dilutive securities	408,678		253,726
Weighted average common shares - diluted	139,976,082		139,552,413
Calculation of Earnings per Share - basic
Net income attributable to common stockholders	$	262,044	$	142,223
Net income allocated to unvested restricted shares	(523)		(324)
Net income attributable to common stockholders, adjusted	$	261,521	$	141,899
Weighted average common shares - basic	139,559,904		139,291,187
Earnings per common share - basic	$	1.87	$	1.02
Calculation of Earnings per Share - diluted
Net income attributable to common stockholders	$	262,044	$	142,223
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations	12		12
Adjusted net income attributable to common stockholders	$	262,056	$	142,235
Weighted average common shares - diluted	139,976,082		139,552,413
Earnings per common share - diluted	$	1.87	$	1.02

Disaggregation of revenue

The following table details the Company’s revenue disaggregated by reportable operating segment, further discussed in Note 8, “Segment Reporting,” for the three months ended March 31, 2022 and 2021. Segment information for total revenue excludes real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities" (dollars in thousands):

	For the three months ended
	Same Store		Other Stabilized		Development/ Redevelopment		Non- allocated (1)		Total
For the period ended March 31, 2022
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	752	$	752
Rental and non-rental related income (2)	2,060		587		57		—		2,704
Total non-lease revenue (3)	2,060		587		57		752		3,456
Lease income (4)	544,779		45,012		17,461		—		607,252
Total revenue	$	546,839	$	45,599	$	17,518	$	752	$	610,708
For the period ended March 31, 2021
Management, development and other fees and other ancillary items	$	—	$	—	$	—	$	877	$	877
Rental and non-rental related income (2)	1,684		447		47		—		2,178
Total non-lease revenue (3)	1,684		447		47		877		3,055
Lease income (4)	501,509		20,511		7,026		—		529,046
Total revenue	$	503,193	$	20,958	$	7,073	$	877	$	532,101

__________________________________

(1)Revenue represents third-party property management, developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment.

(2)Amounts include revenue streams related to leasing activities that are not considered components of a lease, including but not limited to, apartment hold fees and application fees, as well as revenue streams not related to leasing activities, including but not limited to, vendor revenue sharing, building advertising, vending and dry cleaning revenue.

(3)Represents revenue accounted for under ASC 606.

(4)Represents residential and commercial rental and other lease income, which are accounted for under ASC 842.

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Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Summary of company's mortgage notes payable, unsecured notes and Credit Facility excluding mortgage notes secured by communities classified as held for sale

The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of March 31, 2022 and December 31, 2021, as shown in the accompanying Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, "Real Estate Disposition Activities").

	3/31/2022		12/31/2021
Fixed rate unsecured notes (1)	$	7,150,000	$	7,150,000
Term Loans (1)	150,000		250,000
Fixed rate mortgage notes payable - conventional and tax-exempt (2)	306,118		306,281
Variable rate mortgage notes payable - conventional and tax-exempt (2)	463,950		464,150
Total mortgage notes payable and unsecured notes and Term Loans	8,070,068		8,170,431
Credit Facility	—		—
Commercial paper	—		—
Total	$	8,070,068	$	8,170,431

_____________________________________

(1)Balances at March 31, 2022 and December 31, 2021 exclude $9,617 and $10,033, respectively, of debt discount, and $39,481 and $40,573, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Condensed Consolidated Balance Sheets.

(2)Balances at March 31, 2022 and December 31, 2021 exclude $13,251 and $13,528, respectively, of debt discount, and $2,686 and $2,750, respectively, of deferred financing costs, as reflected in mortgage notes payable, net on the accompanying Condensed Consolidated Balance Sheets.

Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding

In addition to the Commercial Paper Program, scheduled payments and maturities of secured notes payable and unsecured notes outstanding at March 31, 2022 are as follows (dollars in thousands):

Year	Secured notes principal payments		Secured notes maturities		Unsecured notes and Term Loan maturities		Stated interest rate of unsecured notes and Term Loan
2022	$	7,901	$	—	$	—	—
2023	8,999		—		350,000		4.200	%
					250,000		2.850	%
2024	9,837		—		300,000		3.500	%
					150,000		LIBOR + 0.85%
2025	10,478		—		525,000		3.450	%
					300,000		3.500	%
2026	11,420		—		475,000		2.950	%
					300,000		2.900	%
2027	13,765		236,100		400,000		3.350	%
2028	18,512		—		450,000		3.200	%
					400,000		1.900	%
2029	9,462		66,250		450,000		3.300	%
2030	10,014		—		700,000		2.300	%
2031	10,669		—		600,000		2.450	%
Thereafter	111,538		245,123		700,000		2.050	%
					350,000		3.900	%
					300,000		4.150	%
					300,000		4.350	%
	$	222,595	$	547,473	$	7,300,000

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Equity (Tables)

3 Months Ended

Mar. 31, 2022

Stockholders' Equity Note [Abstract]

Summary of changes in equity

The following summarizes the changes in equity for the three months ended March 31, 2022 (dollars in thousands):

	Common stock		Additional paid-in capital		Accumulated earnings less dividends		Accumulated other comprehensive loss		Total stockholder's equity		Noncontrolling interests		Total equity
Balance at December 31, 2021	$	1,398	$	10,716,414	$	240,821	$	(26,106)	$	10,932,527	$	566	$	10,933,093
Net income attributable to common stockholders	—		—		262,044		—		262,044		—		262,044
Gain on cash flow hedges, net	—		—		—		10,155		10,155		—		10,155
Cash flow hedge losses reclassified to earnings	—		—		—		1,013		1,013		—		1,013
Change in redemption value of redeemable noncontrolling interest	—		—		(43)		—		(43)		—		(43)
Noncontrolling interest distribution and income allocation	—		—		—		—		—		(10)		(10)
Dividends declared to common stockholders ($1.59 per share)	—		—		(222,373)		—		(222,373)		—		(222,373)
Issuance of common stock, net of withholdings	1		(14,263)		(1,501)		—		(15,763)		—		(15,763)
Amortization of deferred compensation	—		9,176		—		—		9,176		—		9,176
Balance at March 31, 2022	$	1,399	$	10,711,327	$	278,948	$	(14,938)	$	10,976,736	$	556	$	10,977,292

The following summarizes the changes in equity for the three months ended March 31, 2021 (dollars in thousands):

	Common stock		Additional paid-in capital		Accumulated earnings less dividends		Accumulated other comprehensive loss		Total stockholder's equity		Noncontrolling interests		Total equity
Balance at December 31, 2020	$	1,395	$	10,664,416	$	126,022	$	(40,250)	$	10,751,583	$	591	$	10,752,174
Net income attributable to common stockholders	—		—		142,223		—		142,223		—		142,223
Cash flow hedge losses reclassified to earnings	—		—		—		2,367		2,367		—		2,367
Change in redemption value of redeemable noncontrolling interest	—		—		(273)		—		(273)		—		(273)
Noncontrolling interest distribution and income allocation	—		—		—		—		—		(16)		(16)
Dividends declared to common stockholders ($1.59 per share)	—		—		(221,779)		—		(221,779)		—		(221,779)
Issuance of common stock, net of withholdings	1		(14,037)		958		—		(13,078)		—		(13,078)
Amortization of deferred compensation	—		7,286		—		—		7,286		—		7,286
Balance at March 31, 2021	$	1,396	$	10,657,665	$	47,151	$	(37,883)	$	10,668,329	$	575	$	10,668,904

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Investments (Tables)

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Summary of financial information of equity method investments

The following is a combined summary of the financial position of the Company's unconsolidated investments discussed above, accounted for using the equity method and presented on the accompanying Condensed Consolidated Balance Sheets as of the dates presented, including development joint ventures and unconsolidated communities sold during the respective periods (dollars in thousands):

	3/31/2022		12/31/2021
	(unaudited)
Assets:
Real estate, net	$	1,198,088	$	1,184,041
Other assets (1)	409,751		399,591
Total assets	$	1,607,839	$	1,583,632
Liabilities and partners' capital:
Mortgage notes payable, net (2)	$	660,210	$	645,235
Other liabilities	166,097		168,403
Partners' capital	781,532		769,994
Total liabilities and partners' capital	$	1,607,839	$	1,583,632

_________________________________

(1)    Consists primarily of property technology investment management funds, in-place leases and cash and cash equivalents.

(2)    Other than a construction loan on the AVA Arts District development, with $27,333 currently outstanding as of March 31, 2022 and reflected in the table above, the Company has not guaranteed any other outstanding debt, nor does the Company have any obligation to fund any debt that it has not guaranteed, should the unconsolidated entity be unable to do so.

The following is a combined summary of the operating results of the entities accounted for using the equity method discussed above and presented on the accompanying Condensed Consolidated Statements of Comprehensive Income, for the periods presented (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
	(unaudited)
Rental and other income (1)	$	26,450	$	26,398
Operating and other expenses	(11,383)		(13,631)
Gain on sale of communities	58		—
Interest expense, net	(6,026)		(7,668)
Depreciation expense	(7,318)		(8,478)
Net income	$	1,781	$	(3,379)
Company's share of net income	$	416	$	61
Direct investment gains, amortization of excess investment and other (2)	(99)		(528)
Income from investments in unconsolidated entities	$	317	$	(467)

_________________________________

(1)    Includes unrealized gains on the Company's indirect investments in property technology ventures accounted for under the equity method of accounting during the three months ended March 31, 2022.

(2) Includes unrealized gains on the Company’s direct investment in equity securities of property technology investments during the three months ended March 31, 2022.

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Real Estate Disposition Activities (Tables)

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Real estate sales

The following real estate sales occurred during the three months ended March 31, 2022 (dollars in thousands):

Community name	Location	Period of sale	Apartment homes	Gross sales price		Gain on  disposition (1)
Avalon West Long Branch	West Long Branch, NJ	Q122	180	$	75,000	$	56,434
Avalon Ossining	Ossining, NY	Q122	168	$	70,000	$	40,512
Avalon East Norwalk	Norwalk, CT	Q122	240	$	90,000	$	51,762

_________________________________

(1)    Gain on disposition was reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income.

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Schedule of reconciliation of NOI to net income

A reconciliation of NOI to net income for the three months ended March 31, 2022 and 2021 is as follows (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Net income	$	262,076	$	142,234
Property management and other indirect operating expenses, net of corporate income	28,113		24,470
Expensed transaction, development and other pursuit costs, net of recoveries	987		(170)
Interest expense, net	56,526		52,613
Gain on extinguishment of debt, net	—		(122)
General and administrative expense	17,421		17,352
(Income) loss from investments in unconsolidated entities	(317)		467
Depreciation expense	201,786		183,297
Income tax expense (benefit)	2,471		(755)
Gain on sale of communities	(148,800)		(53,727)
Gain on other real estate transactions, net	(37)		(427)
Net for-sale condominium activity	(236)		913
Net operating income from real estate assets sold or held for sale	(1,699)		(11,247)
Net operating income	$	418,291	$	354,898

Schedule of net operating income from real estate assets sold or held for sale, not classified as discontinued operations

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Rental income from real estate assets sold or held for sale	$	3,219	$	19,034
Operating expenses from real estate assets sold or held for sale	(1,520)		(7,787)
Net operating income from real estate assets sold or held for sale	$	1,699	$	11,247

Schedule of details of segment information

The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community's status at January 1, 2022. Segment information for the three months ended March 31, 2022 and 2021 has been adjusted to exclude the real estate assets that were sold from January 1, 2021 through March 31, 2022, or otherwise qualify as held for sale as of March 31, 2022, as described in Note 6, "Real Estate Disposition Activities."

	For the three months ended
	Total revenue		NOI		Gross real estate (1)
For the period ended March 31, 2022
Same Store
New England	$	81,818	$	52,587	$	2,888,176
Metro NY/NJ	115,476		79,506		4,244,572
Mid-Atlantic	82,093		55,992		3,257,920
Southeast Florida	9,071		5,977		396,555
Denver, CO	6,315		4,727		320,803
Pacific Northwest	34,298		24,222		1,290,332
Northern California	96,729		68,699		3,651,325
Southern California	121,039		84,717		4,409,369
Total Same Store	546,839		376,427		20,459,052
Other Stabilized	45,599		29,542		2,511,859
Development / Redevelopment	17,518		12,322		1,721,164
Land Held for Development	N/A		N/A		218,852
Non-allocated (2)	752		N/A		224,257
Total	$	610,708	$	418,291	$	25,135,184
For the period ended March 31, 2021
Same Store
New England	$	74,871	$	47,445	$	2,862,749
Metro NY/NJ	106,846		73,273		4,215,804
Mid-Atlantic	78,105		53,051		3,233,446
Southeast Florida	7,241		4,189		394,451
Denver, CO	5,652		4,019		319,667
Pacific Northwest	30,532		20,391		1,283,372
Northern California	92,855		65,552		3,614,708
Southern California	107,091		72,535		4,363,142
Total Same Store	503,193		340,455		20,287,339
Other Stabilized	20,958		10,971		1,665,418
Development / Redevelopment	7,073		3,472		1,081,493
Land Held for Development	N/A		N/A		184,058
Non-allocated (2)	877		N/A		356,064
Total	$	532,101	$	354,898	$	23,574,372

__________________________________

(1)Does not include gross real estate assets held for sale or classified as held for sale subsequent to March 31, 2021 of $485,631.

(2)Revenue represents third-party management, accounting, and developer fees and miscellaneous income and other ancillary items which are not allocated to a reportable segment. Gross real estate includes the for-sale residential condominiums at The Park Loggia, as discussed in Note 6, "Real Estate Disposition Activities."

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Stock-Based Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of stock options

Stock Options:

	2009 Plan shares	Weighted average exercise price per share
Options Outstanding at December 31, 2021	299,149	$	178.71
Granted (1)	9,793	236.14
Exercised	(4,304)	141.41
Forfeited	(2,444)	180.32
Options Outstanding at March 31, 2022	302,194	$	181.09
Options Exercisable at March 31, 2022	7,058	$	135.62

__________________________________

(1)Grants are from recipient elections to receive a portion of earned restricted stock awards in the form of stock options.

Schedule of nonvested performance awards granted

Performance Awards:

	Performance awards	Weighted average grant date fair value per award (1)
Outstanding at December 31, 2021	284,522	$	214.73
Granted (2)	72,189	255.01
Change in awards based on performance (3)	(20,356)	200.92
Converted to shares of common stock	(54,053)	217.33
Forfeited	(755)	223.60
Outstanding at March 31, 2022	281,547	$	225.54

__________________________________

(1)Weighted average grant date fair value per award includes the impact of post grant modifications.

(2)The shares of common stock that may be earned is based on the total shareholder return metrics for the Company's common stock for 39,645 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 32,544 performance awards.

(3)Represents the change in the number of performance awards earned based on performance achievement.

Summary of valuation options

The Company used a Monte Carlo model to assess the compensation cost associated with the portion of the performance awards granted for which achievement will be determined by using total shareholder return measures. For the awards granted in 2022, the assumptions used are as follows:

	2022
Dividend yield	2.7%
Estimated volatility over the life of the plan (1)	16.1% - 36.8%
Risk free rate	0.72% - 1.68%
Estimated performance award value based on total shareholder return measure	$271.98

__________________________________

(1)Estimated volatility over the life of the plan is using 50% historical volatility and 50% implied volatility.

Schedule of restricted stock granted

Restricted Stock:

	Restricted stock shares	Restricted stock shares weighted average grant date fair value per share		Restricted stock shares converted from performance awards
Outstanding at December 31, 2021	157,066	$	192.90	74,627
Granted - restricted stock shares	78,082	236.17		—
Vested - restricted stock shares	(70,596)	195.83		(47,335)
Forfeited	(1,120)	219.75		(28)
Outstanding at March 31, 2022	163,432	$	212.12	27,264

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of summary of consolidated Hedging Derivatives, excluding derivatives executed to hedge debt on communities classified as held for sale

The following table summarizes the consolidated derivative positions at March 31, 2022 (dollars in thousands):

	Non-designated Hedges			Cash Flow Hedges
	Interest Rate Caps			Interest Rate Swaps
Notional balance	$	402,670		$	150,000
Weighted average interest rate (1)	2.1		%	N/A
Weighted average swapped/capped interest rate	6.1		%	1.4		%
Earliest maturity date	January 2024			November 2022
Latest maturity date	November 2026			November 2022

____________________________________

(1)For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The following table summarizes the deferred losses reclassified from accumulated other comprehensive loss into earnings (dollars in thousands):

	For the three months ended
	3/31/2022		3/31/2021
Cash flow hedge losses reclassified to earnings	$	1,013	$	2,367

Schedule of summary of classification between the three levels of the fair value hierarchy of the Company's financial instruments measured at fair value on a recurring basis

The following tables summarize the classification between the three levels of the fair value hierarchy of the Company's financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands):

	3/31/2022
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non Designated Hedges
Interest Rate Caps	$	955	$	—	$	955	$	—
Interest Rate Swaps - Assets	13,359		—		13,359		—
DownREIT units	(1,863)		(1,863)		—		—
Indebtedness
Fixed rate unsecured notes	(7,040,472)		(7,040,472)		—		—
Mortgage notes payable and Term Loan	(841,293)		—		(841,293)		—
Total	$	(7,869,314)	$	(7,042,335)	$	(826,979)	$	—

	12/31/2021
Description	Total Fair Value		Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non Designated Hedges
Interest Rate Caps	$	225	$	—	$	225	$	—
Interest Rate Swaps - Assets	3,204		—		3,204		—
DownREIT units	(1,895)		(1,895)		—		—
Indebtedness
Fixed rate unsecured notes	(7,624,560)		(7,624,560)		—		—
Mortgage notes payable, variable rate unsecured notes and Term Loans	(940,779)		—		(940,779)		—
Total	$	(8,563,805)	$	(7,626,455)	$	(937,350)	$	—

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Organization, Basis of Presentation and Significant Accounting Policies - Narrative (Details) ft² in Thousands, $ in Thousands	3 Months Ended		27 Months Ended
	Mar. 31, 2022 USD ($) community residential_condominium ft² home state	Mar. 31, 2021 USD ($)	Mar. 31, 2022 community residential_condominium ft² home state
Real Estate Properties [Line Items]
Number of operating apartment communities	296		296
Number of apartment homes included in operating apartment communities owned | home	87,918		87,918
Number of states where operating apartment communities owned are located | state	12		12
Number of owned communities under construction	18		18
Number of Owned Communities under Reconstruction	2		2
Number of residential condominium units sold | residential_condominium	15		138
Communities under development rights	29		29
Estimated number of apartment homes in communities to be developed | home	10,122		10,122
Income tax expense (benefit) | $	$ 2,471	$ (755)
Uncollectible lease revenue | $	$ 13,600	$ 18,645
The Park Loggia
Real Estate Properties [Line Items]
Number of residential condominium units | residential_condominium	172		172
Square feet of commercial space | ft²	66		66
Percent of commercial square feet leased	87.00%		87.00%

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Organization, Basis of Presentation and Significant Accounting Policies - Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Basic and diluted shares outstanding
Weighted average common shares - basic (in shares)	139,559,904	139,291,187
Weighted average DownREIT units outstanding (in shares)	7,500	7,500
Effect of dilutive securities (in shares)	408,678	253,726
Weighted average common shares - diluted (in shares)	139,976,082	139,552,413
Calculation of Earnings per Share - basic
Net income attributable to common stockholders	$ 262,044	$ 142,223
Net income allocated to unvested restricted shares	(523)	(324)
Net income attributable to common stockholders, adjusted	$ 261,521	$ 141,899
Weighted average common shares - basic (in shares)	139,559,904	139,291,187
Earnings per common share - basic (in dollars per share)	$ 1.87	$ 1.02
Calculation of Earnings per Share - diluted
Net income attributable to common stockholders	$ 262,044	$ 142,223
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations	12	12
Adjusted net income attributable to common stockholders	$ 262,056	$ 142,235
Weighted average common shares - diluted (in shares)	139,976,082	139,552,413
Earnings per common share - diluted (in dollars per share)	$ 1.87	$ 1.02
Antidilutive securities excluded from the computation of earnings per share (in shares)	9,793	294,115

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Organization, Basis of Presentation and Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Management, development and other fees	$ 752	$ 877
Rental and other income	613,175	550,258
Total revenue	613,927	551,135
Operating Segments | Same Store
Disaggregation of Revenue [Line Items]
Total revenue	546,839	503,193
Operating Segments | Other Stabilized
Disaggregation of Revenue [Line Items]
Total revenue	45,599	20,958
Non-allocated
Disaggregation of Revenue [Line Items]
Total revenue	752	877
Continuing Operations
Disaggregation of Revenue [Line Items]
Management, development and other fees	3,456	3,055
Rental and other income	607,252	529,046
Total revenue	610,708	532,101
Continuing Operations | Management, development and other fees and other ancillary items
Disaggregation of Revenue [Line Items]
Management, development and other fees	752	877
Continuing Operations | Rental and non-rental related income
Disaggregation of Revenue [Line Items]
Management, development and other fees	2,704	2,178
Continuing Operations | Operating Segments | Same Store
Disaggregation of Revenue [Line Items]
Management, development and other fees	2,060	1,684
Rental and other income	544,779	501,509
Total revenue	546,839	503,193
Continuing Operations | Operating Segments | Other Stabilized
Disaggregation of Revenue [Line Items]
Management, development and other fees	587	447
Rental and other income	45,012	20,511
Total revenue	45,599	20,958
Continuing Operations | Operating Segments | Development/ Redevelopment
Disaggregation of Revenue [Line Items]
Management, development and other fees	57	47
Rental and other income	17,461	7,026
Total revenue	17,518	7,073
Continuing Operations | Operating Segments | Management, development and other fees and other ancillary items | Same Store
Disaggregation of Revenue [Line Items]
Management, development and other fees	0	0
Continuing Operations | Operating Segments | Management, development and other fees and other ancillary items | Other Stabilized
Disaggregation of Revenue [Line Items]
Management, development and other fees	0	0
Continuing Operations | Operating Segments | Management, development and other fees and other ancillary items | Development/ Redevelopment
Disaggregation of Revenue [Line Items]
Management, development and other fees	0	0
Continuing Operations | Operating Segments | Rental and non-rental related income | Same Store
Disaggregation of Revenue [Line Items]
Management, development and other fees	2,060	1,684
Continuing Operations | Operating Segments | Rental and non-rental related income | Other Stabilized
Disaggregation of Revenue [Line Items]
Management, development and other fees	587	447
Continuing Operations | Operating Segments | Rental and non-rental related income | Development/ Redevelopment
Disaggregation of Revenue [Line Items]
Management, development and other fees	57	47
Continuing Operations | Non-allocated
Disaggregation of Revenue [Line Items]
Management, development and other fees	752	877
Rental and other income	0	0
Total revenue	752	877
Continuing Operations | Non-allocated | Management, development and other fees and other ancillary items
Disaggregation of Revenue [Line Items]
Management, development and other fees	752	877
Continuing Operations | Non-allocated | Rental and non-rental related income
Disaggregation of Revenue [Line Items]
Management, development and other fees	$ 0	$ 0

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Interest Capitalized (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Interest Capitalized
Capitalized interest during the development and redevelopment of real estate assets	$ 7,100	$ 8,799

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Debt - Summary of Debt (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 8,070,068,000	$ 8,170,431,000
Credit Facility	0	0
Commercial paper	0	0
Total	8,070,068,000	8,170,431,000
Fixed rate unsecured notes
Notes Payable, Unsecured Notes and Credit Facility
Fixed rate notes	7,150,000,000	7,150,000,000
Secured notes maturities and Unsecured notes and Term Loan maturities	7,300,000,000
Amount of debt discount	9,617,000	10,033,000
Amount of deferred financing costs, net	39,481,000	40,573,000
Term Loans
Notes Payable, Unsecured Notes and Credit Facility
Variable rate notes	150,000,000	250,000,000
Secured notes
Notes Payable, Unsecured Notes and Credit Facility
Fixed rate notes	306,118,000	306,281,000
Variable rate notes	463,950,000	464,150,000
Secured notes maturities and Unsecured notes and Term Loan maturities	547,473,000
Amount of debt discount	13,251,000	13,528,000
Amount of deferred financing costs, net	$ 2,686,000	$ 2,750,000

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Debt - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Notes Payable, Unsecured Notes and Credit Facility
Repayments of unsecured debt	$ 100,000,000	$ 0
Credit Facility	0		$ 0
Commercial paper, maximum borrowing capacity	500,000,000
Commercial paper	0		0
Net carrying value of apartment communities and improved land parcels securing debt	1,248,432,000
Variable Rate Unsecured Term Loan $100 Million | Fixed rate unsecured notes
Notes Payable, Unsecured Notes and Credit Facility
Repayments of unsecured debt	100,000,000
Line of Credit
Notes Payable, Unsecured Notes and Credit Facility
Available borrowing capacity	$ 1,750,000,000
Annual facility fee, percentage	0.125%
Annual facility fee	$ 2,188,000
Credit Facility	0		0
Outstanding balance of letters of credit	$ 6,914,000		11,969,000
Line of Credit | LIBOR
Notes Payable, Unsecured Notes and Credit Facility
Debt instrument, basis spread on variable rate (as a percent)	0.775%
Current interest rate (as a percent)	1.23%
Other Letter of Credit
Notes Payable, Unsecured Notes and Credit Facility
Outstanding balance of letters of credit	$ 39,831,000		$ 39,581,000
Fixed Rate Mortgage Notes Payable
Notes Payable, Unsecured Notes and Credit Facility
Weighted average interest rate, debt (as a percent)	3.70%		3.70%
Variable Rate Mortgage Notes Payable Unsecured Term Loan and Credit Facility
Notes Payable, Unsecured Notes and Credit Facility
Weighted average interest rate, debt (as a percent)	2.10%		1.70%

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Debt - Scheduled Payments and Maturities of Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 8,070,068	$ 8,170,431
Secured notes
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	222,595
Secured notes maturities and Unsecured notes and Term Loan maturities	547,473
Secured notes | Notes payable maturing in 2022
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	7,901
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2023
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	8,999
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2024
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	9,837
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2025
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	10,478
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2026
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	11,420
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2027
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	13,765
Secured notes maturities and Unsecured notes and Term Loan maturities	236,100
Secured notes | Notes Payable Maturities 2028
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	18,512
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2029
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	9,462
Secured notes maturities and Unsecured notes and Term Loan maturities	66,250
Secured notes | Notes Payable Maturities 2030
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	10,014
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities 2031
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	10,669
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Secured notes | Notes Payable Maturities Thereafter
Notes Payable, Unsecured Notes and Credit Facility
Secured notes principal payments	111,538
Secured notes maturities and Unsecured notes and Term Loan maturities	245,123
Fixed rate unsecured notes
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	7,300,000
Fixed rate unsecured notes | Notes payable maturing in 2022
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	0
Fixed rate unsecured notes | Notes payable 4.200 Maturities 2023
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 350,000
Stated interest rate of unsecured notes (as a percent)	4.20%
Fixed rate unsecured notes | Notes Payable 2.850 Maturities 2023
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 250,000
Stated interest rate of unsecured notes (as a percent)	2.85%
Fixed rate unsecured notes | Notes Payable Maturities 2024
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 300,000
Stated interest rate of unsecured notes (as a percent)	3.50%
Fixed rate unsecured notes | Variable Rate Unsecured Term Loan $150 Million
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 150,000
Fixed rate unsecured notes | Variable Rate Unsecured Term Loan $150 Million | LIBOR
Notes Payable, Unsecured Notes and Credit Facility
Debt instrument, basis spread on variable rate (as a percent)	0.85%
Fixed rate unsecured notes | Notes Payable 3.450 Maturities 2025
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 525,000
Stated interest rate of unsecured notes (as a percent)	3.45%
Fixed rate unsecured notes | Notes Payable 3.500 Maturities 2025
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 300,000
Stated interest rate of unsecured notes (as a percent)	3.50%
Fixed rate unsecured notes | Notes Payable 2.950 Maturities 2026
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 475,000
Stated interest rate of unsecured notes (as a percent)	2.95%
Fixed rate unsecured notes | Notes Payable 2.900 Maturities 2026
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 300,000
Stated interest rate of unsecured notes (as a percent)	2.90%
Fixed rate unsecured notes | Notes Payable Maturities 2027
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 400,000
Stated interest rate of unsecured notes (as a percent)	3.35%
Fixed rate unsecured notes | Notes Payable Maturities 2028
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 450,000
Stated interest rate of unsecured notes (as a percent)	3.20%
Fixed rate unsecured notes | Notes Payable 1.900 Maturities 2028
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 400,000
Stated interest rate of unsecured notes (as a percent)	1.90%
Fixed rate unsecured notes | Notes Payable Maturities 2029
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 450,000
Stated interest rate of unsecured notes (as a percent)	3.30%
Fixed rate unsecured notes | Notes Payable Maturities 2030
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 700,000
Stated interest rate of unsecured notes (as a percent)	2.30%
Fixed rate unsecured notes | Notes Payable Maturities 2031
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 600,000
Stated interest rate of unsecured notes (as a percent)	2.45%
Fixed rate unsecured notes | Notes Payable Maturities 2032
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 700,000
Stated interest rate of unsecured notes (as a percent)	2.05%
Fixed rate unsecured notes | Notes Payable Maturities 2046
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 350,000
Stated interest rate of unsecured notes (as a percent)	3.90%
Fixed rate unsecured notes | Notes Payable Maturities 2047
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 300,000
Stated interest rate of unsecured notes (as a percent)	4.15%
Fixed rate unsecured notes | Notes Payable Maturities 2048
Notes Payable, Unsecured Notes and Credit Facility
Secured notes maturities and Unsecured notes and Term Loan maturities	$ 300,000
Stated interest rate of unsecured notes (as a percent)	4.35%

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Equity - Changes in Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Changes in equity
Beginning Balance	$ 10,933,093	$ 10,752,174
Net income attributable to common stockholders	262,044	142,223
Gain on cash flow hedges, net	10,155
Cash flow hedge losses reclassified to earnings	1,013	2,367
Change in redemption value of redeemable noncontrolling interest	(43)	(273)
Noncontrolling interest distribution and income allocation	(10)	(16)
Dividends declared to common stockholders ($1.59 per share)	(222,373)	(221,779)
Issuance of common stock, net of withholdings	(15,763)	(13,078)
Amortization of deferred compensation	9,176	7,286
Ending Balance	$ 10,977,292	$ 10,668,904
Dividends declared to common stockholders (in dollars per share)	$ 1.59	$ 1.59
Common stock
Changes in equity
Beginning Balance	$ 1,398	$ 1,395
Issuance of common stock, net of withholdings	1	1
Ending Balance	1,399	1,396
Additional paid-in capital
Changes in equity
Beginning Balance	10,716,414	10,664,416
Issuance of common stock, net of withholdings	(14,263)	(14,037)
Amortization of deferred compensation	9,176	7,286
Ending Balance	10,711,327	10,657,665
Accumulated earnings less dividends
Changes in equity
Beginning Balance	240,821	126,022
Net income attributable to common stockholders	262,044	142,223
Change in redemption value of redeemable noncontrolling interest	(43)	(273)
Dividends declared to common stockholders ($1.59 per share)	(222,373)	(221,779)
Issuance of common stock, net of withholdings	(1,501)	958
Ending Balance	278,948	47,151
Accumulated other comprehensive loss
Changes in equity
Beginning Balance	(26,106)	(40,250)
Gain on cash flow hedges, net	10,155
Cash flow hedge losses reclassified to earnings	1,013	2,367
Ending Balance	(14,938)	(37,883)
Total stockholder's equity
Changes in equity
Beginning Balance	10,932,527	10,751,583
Net income attributable to common stockholders	262,044	142,223
Gain on cash flow hedges, net	10,155
Cash flow hedge losses reclassified to earnings	1,013	2,367
Change in redemption value of redeemable noncontrolling interest	(43)	(273)
Dividends declared to common stockholders ($1.59 per share)	(222,373)	(221,779)
Issuance of common stock, net of withholdings	(15,763)	(13,078)
Amortization of deferred compensation	9,176	7,286
Ending Balance	10,976,736	10,668,329
Noncontrolling interests
Changes in equity
Beginning Balance	566	591
Noncontrolling interest distribution and income allocation	(10)	(16)
Ending Balance	$ 556	$ 575

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Equity - Narrative (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Jul. 31, 2020
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	280,000,000		280,000,000
Preferred stock, shares authorized (in shares)	50,000,000		50,000,000
Common stock issued in connection with stock options exercised (in shares)	4,304
Common stock issued through the dividend reinvestment plan (in shares)	605	839
Number of shares of stock grants withheld (in shares)	69,721	74,726
Repurchases of shares (in shares)	0
Stock repurchase program, remaining authorized amount	$ 316,148,000
2020 Stock Repurchase Program
Class of Stock [Line Items]
Stock repurchase program, authorized amount				$ 500,000,000
Continuous Equity Program CEP V
Class of Stock [Line Items]
Maximum value of shares of common stock that can be sold (in dollars)	$ 1,000,000,000
Common stock sold under CEP V (in shares)	0
Forward contract indexed to issuer's equity (in shares)			68,577
Net proceeds of forward contract indexed to issuer's equity			$ 16,000,000
Common stock value, remaining to be authorized under continuous equity program	$ 705,961,000
Maximum | Continuous Equity Program CEP V
Class of Stock [Line Items]
Percentage of compensation received by sales agent	1.50%
Restricted Stock and Restricted Stock Converted From Performance Shares
Class of Stock [Line Items]
Equity instruments granted (in shares)	132,135	149,520
Restricted stock
Class of Stock [Line Items]
Equity instruments granted (in shares)	78,082	92,975
Stock issued during period, shares, share-based compensation, forfeited (in shares)	(1,181)	(343)

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Investments - Narrative (Details) ft² in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) entity ft² home	Mar. 31, 2021 USD ($)
Equity method investment
Payments to acquire other real estate	$ 95,426	$ 0
Nonoperating expense related to development pursuits	(987)	170
Other than temporary losses on investments	$ 0	0
Avalon Flatirons
Equity method investment
Number of apartment homes acquired | home	207
Square feet of commercial space | ft²	16
Payments to acquire other real estate	$ 95,000
The Park Loggia
Equity method investment
Square feet of commercial space | ft²	66
Impairment of real estate	$ 0	0
Land Parcel
Equity method investment
Impairment of real estate	$ 0	$ 0
Unconsolidated real estate entities
Equity method investment
Number of unconsolidated real estate entities | entity	7
AVA Arts District [Member]
Equity method investment
Proceeds from construction loans	$ 27,333
Minimum | Unconsolidated real estate entities
Equity method investment
Ownership percentage	20.00%
Maximum | Unconsolidated real estate entities
Equity method investment
Ownership percentage	50.00%

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Investments - Financial Position and Operating Results (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
ASSETS
Real estate, net	$ 18,745,848		$ 18,709,584
Total assets	19,869,627		19,902,016
LIABILITIES AND EQUITY
Mortgage notes payable, net	754,131		754,153
Partners' capital	10,976,736		10,932,527
Total liabilities and equity	19,869,627		19,902,016
Combined summary of the operating results of the accounted for using the equity method
Rental and other income	613,927	$ 551,135
Operating and other expenses	(498,770)	(462,430)
Gain on sale of communities	148,800	53,727
Interest expense, net	(56,526)	(52,613)
Depreciation expense	(201,786)	(183,297)
Net income	262,076	142,234
Company's share of net income	416	61
Direct investment gains, amortization of excess investment and other	(99)	(528)
Income (loss) from investments in unconsolidated entities	317	(467)
Equity Method Investment, Nonconsolidated Investee or Group of Investees
ASSETS
Real estate, net	1,198,088		1,184,041
Other assets (1)	409,751		399,591
Total assets	1,607,839		1,583,632
LIABILITIES AND EQUITY
Mortgage notes payable, net	660,210		645,235
Other liabilities	166,097		168,403
Partners' capital	781,532		769,994
Total liabilities and equity	1,607,839		$ 1,583,632
Combined summary of the operating results of the accounted for using the equity method
Rental and other income	26,450	26,398
Operating and other expenses	(11,383)	(13,631)
Gain on sale of communities	58	0
Interest expense, net	(6,026)	(7,668)
Depreciation expense	(7,318)	(8,478)
Net income	$ 1,781	$ (3,379)

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Real Estate Disposition Activities (Details) ft² in Thousands	3 Months Ended		27 Months Ended
	Mar. 31, 2022 USD ($) residential_condominium home ft² community	Mar. 31, 2021 USD ($)	Mar. 31, 2022 USD ($) residential_condominium ft² community	Dec. 31, 2021 USD ($)
Summary of income from discontinued operations
Gain on sale of communities	$ 148,800,000	$ 53,727,000
Number of communities held for sale | community	0		0
Number of residential condominium units sold | residential_condominium	15		138
Gain on for-sale condominiums	$ 1,002,000	131,000
Number of residential condominiums remaining to be sold | residential_condominium	34		34
Other selling, general and administrative expense	$ 766,000	$ 1,044,000
For-sale condominium inventory	110,763,000		$ 110,763,000	$ 146,535,000
The Park Loggia
Summary of income from discontinued operations
Gross sales price	$ 40,336,000
Number of residential condominium units | residential_condominium	172		172
Square feet of commercial space | ft²	66		66
Gain on for-sale condominiums	$ 1,002,000
Avalon West Long Branch
Summary of income from discontinued operations
Apartment homes | home	180
Gross sales price	$ 75,000,000
Gain on sale of communities	$ 56,434,000
Avalon Ossining
Summary of income from discontinued operations
Apartment homes | home	168
Gross sales price	$ 70,000,000
Gain on sale of communities	$ 40,512,000
Avalon East Norwalk
Summary of income from discontinued operations
Apartment homes | home	240
Gross sales price	$ 90,000,000
Gain on sale of communities	$ 51,762,000

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Commitments and Contingencies - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) community Lease property	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Lessee, Lease, Description [Line Items]
Number of office leases | Lease	12
Operating lease assets	$ 120,004		$ 118,370
Operating lease obligation	147,866		146,377
Operating lease expense	3,706	$ 3,827
Finance lease asset	28,285		28,229
Finance lease obligation	$ 20,107		$ 20,120
Properties on Land Subject to Land Leases
Lessee, Lease, Description [Line Items]
Number of operating apartment communities owned | community	7
Number of commercial properties owned | property	2
Assets Held under Operating Leases
Lessee, Lease, Description [Line Items]
Number of operating apartment communities owned | community	6
Assets Held under Finance Leases
Lessee, Lease, Description [Line Items]
Number of operating apartment communities owned | community	1
Number of finance leases for parking garages adjacent to communities | Lease	4

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Segment Reporting - Reconciliation of NOI to Net Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Reconciliation of NOI to net income
Net income	$ 262,076	$ 142,234
Property management and other indirect operating expenses, net of corporate income	28,113	24,470
Expensed transaction, development and other pursuit costs, net of recoveries	987	(170)
Interest expense, net	56,526	52,613
Gain on extinguishment of debt, net	0	122
General and administrative expense	17,421	17,352
(Income) loss from investments in unconsolidated entities	(317)	467
Depreciation expense	201,786	183,297
Income tax expense (benefit)	2,471	(755)
Gain on sale of communities	(148,800)	(53,727)
Gain on other real estate transactions, net	(37)	(427)
Net for-sale condominium activity	(236)	913
Net operating income from real estate assets sold or held for sale	(1,699)	(11,247)
Net operating income	$ 418,291	$ 354,898
Non-Apartment Components Of Mixed-Use Communities And Other Nonresidential Operations | Operating Income (Loss) | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk (as a percent)	2.00%	1.50%

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Segment Reporting - NOI from Real Estate Assets Sold or Held for Sale (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting [Abstract]
Rental income from real estate assets sold or held for sale	$ 3,219	$ 19,034
Operating expenses from real estate assets sold or held for sale	(1,520)	(7,787)
Net operating income from real estate assets sold or held for sale	$ 1,699	$ 11,247

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Segment Reporting - Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting
Total revenue	$ 613,927	$ 551,135
NOI	418,291	354,898
Gross real estate	25,135,184	23,574,372
Operating Segments | Same Store
Segment Reporting
Total revenue	546,839	503,193
NOI	376,427	340,455
Gross real estate	20,459,052	20,287,339
Operating Segments | Same Store | New England
Segment Reporting
Total revenue	81,818	74,871
NOI	52,587	47,445
Gross real estate	2,888,176	2,862,749
Operating Segments | Same Store | Metro NY/NJ
Segment Reporting
Total revenue	115,476	106,846
NOI	79,506	73,273
Gross real estate	4,244,572	4,215,804
Operating Segments | Same Store | Mid-Atlantic
Segment Reporting
Total revenue	82,093	78,105
NOI	55,992	53,051
Gross real estate	3,257,920	3,233,446
Operating Segments | Same Store | Southeast Florida
Segment Reporting
Total revenue	9,071	7,241
NOI	5,977	4,189
Gross real estate	396,555	394,451
Operating Segments | Same Store | Denver, CO
Segment Reporting
Total revenue	6,315	5,652
NOI	4,727	4,019
Gross real estate	320,803	319,667
Operating Segments | Same Store | Pacific Northwest
Segment Reporting
Total revenue	34,298	30,532
NOI	24,222	20,391
Gross real estate	1,290,332	1,283,372
Operating Segments | Same Store | Northern California
Segment Reporting
Total revenue	96,729	92,855
NOI	68,699	65,552
Gross real estate	3,651,325	3,614,708
Operating Segments | Same Store | Southern California
Segment Reporting
Total revenue	121,039	107,091
NOI	84,717	72,535
Gross real estate	4,409,369	4,363,142
Operating Segments | Other Stabilized
Segment Reporting
Total revenue	45,599	20,958
NOI	29,542	10,971
Gross real estate	2,511,859	1,665,418
Operating Segments | Development / Redevelopment
Segment Reporting
Total revenue	17,518	7,073
NOI	12,322	3,472
Gross real estate	1,721,164	1,081,493
Operating Segments | Disposals
Segment Reporting
Gross real estate		485,631
Land Held for Future Development
Segment Reporting
Gross real estate	218,852	184,058
Non-allocated
Segment Reporting
Total revenue	752	877
Gross real estate	224,257	356,064
Continuing Operations
Segment Reporting
Total revenue	610,708	532,101
Continuing Operations | Operating Segments | Same Store
Segment Reporting
Total revenue	546,839	503,193
Continuing Operations | Operating Segments | Other Stabilized
Segment Reporting
Total revenue	45,599	20,958
Continuing Operations | Non-allocated
Segment Reporting
Total revenue	$ 752	$ 877

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Stock-Based Compensation Plans - Stock Options and Performance Awards (Details) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
2009 Plan shares
Exercised (in shares)	(4,304)
Employee and Directors Stock Options | Stock Option and Incentive Plan 2009
2009 Plan shares
Options Outstanding at beginning of period (in shares)	299,149
Granted (in shares)	9,793
Exercised (in shares)	(4,304)
Forfeited (in shares)	(2,444)
Options Outstanding at end of period (in shares)	302,194
Options Exerciseable (in shares)	7,058
Weighted average exercise price per share
Weighted average exercise price of options outstanding at beginning of period (in dollars per share)	$ 178.71
Weighted average exercise price of options granted (in dollars per share)	236.14
Weighted average exercise price of options exercised (in dollars per share)	141.41
Weighted average exercise price of options forfeited (in dollars per share)	180.32
Weighted average exercise price of options outstanding at end of period (in dollars per share)	181.09
Weighted average exercise price of options exercisable (in dollars per share)	$ 135.62
Performance Shares
Performance awards
Equity instruments outstanding at the beginning of the period (in shares)	284,522
Equity instruments granted (in shares)	72,189
Change in awards based on performance (in shares)	(20,356)
Converted to restricted stock (in shares)	(54,053)	(56,545)
Forfeited (in shares)	(755)
Equity instruments outstanding at the end of the period (in shares)	281,547
Weighted average grant date fair value per award
Equity instruments outstanding at the beginning of the period (in dollars per share)	$ 214.73
Grant date fair value per share (in dollars per share)	255.01
Change in awards based on performance (in dollars per share)	200.92
Converted to restricted stock (in dollars per share)	217.33
Forfeited (in dollars per share)	223.60
Equity instruments outstanding at the end of the period (in dollars per share)	$ 225.54
Grants in period based on total shareholder metrics (in shares)	39,645
Grants in period based on financial metrics (in shares)	32,544

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Stock-Based Compensation Plans - Valuation Assumptions (Details) - Performance Shares	3 Months Ended
	Mar. 31, 2022 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	2.70%
Estimated volatility over the life of the plan, minimum (as a percent)	16.10%
Estimated volatility over the life of the plan, maximum (as a percent)	36.80%
Risk-free rate, minimum (as a percent)	0.72%
Risk-free rate, maximum (as a percent)	1.68%
Estimated performance award value based on total shareholder return measure (in dollars per share)	$ 271.98
Historical volatility (as a percent)	50.00%
Implied volatility (as a percent)	50.00%

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Stock-Based Compensation Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Additional disclosures
Stock-based compensation expense	$ 6,887	$ 5,247
Capitalized stock-based compensation cost	$ 2,377	$ 1,903
Performance Shares
Additional disclosures
Weighted average grant date value (in dollars per share)	$ 234.18
Restricted stock and restricted stock units
Additional disclosures
Unrecognized compensation cost	$ 67,583
Weighted average period for recognition of unrecognized compensation cost	2 years 2 months 12 days

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Stock-Based Compensation Plans - Restricted Stock Activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Restricted stock
Restricted stock shares
Equity instruments outstanding at the beginning of the period (in shares)	157,066
Granted (in shares)	78,082	92,975
Vested (in shares)	(70,596)
Forfeited (in shares)	(1,120)
Equity instruments outstanding at the end of the period (in shares)	163,432
Restricted stock shares weighted average grant date fair value per share
Equity instruments outstanding at the beginning of the period (in dollars per share)	$ 192.90
Grant date fair value per share (in dollars per share)	236.17
Vested (in dollars per share)	195.83
Forfeited (in dollars per share)	219.75
Equity instruments outstanding at the end of the period (in dollars per share)	$ 212.12
Restricted Stock Converted From Performance Shares
Restricted stock shares
Equity instruments outstanding at the beginning of the period (in shares)	74,627
Granted (in shares)	0
Vested (in shares)	(47,335)
Forfeited (in shares)	(28)
Equity instruments outstanding at the end of the period (in shares)	27,264

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Related Party Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Related Party Arrangements
Management, development and other fees	$ 752	$ 877
Compensation expense	6,887	5,247
Unconsolidated real estate entities
Related Party Arrangements
Outstanding receivables	5,057		$ 3,964
Non Employee Director | Restricted stock and deferred stock awards
Related Party Arrangements
Compensation expense	515	$ 465
Amount of deferred compensation	$ 281		$ 696

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Fair Value - Consolidated Derivative Positions (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Not Designated as Hedging Instrument | Interest Rate Caps
Derivative instruments and Hedging Activities
Notional balance	$ 402,670
Weighted average interest rate	2.10%
Weighted average swapped/capped interest rate	6.10%
Cash Flow Hedges | Interest Rate Swaps
Derivative instruments and Hedging Activities
Notional balance	$ 150,000
Weighted average swapped/capped interest rate	1.40%

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Fair Value - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) derivative
Interest Rate Swaps | Cash Flow Hedges
Derivative instruments and Hedging Activities
Notional balance	$ 150,000
Reclassification out of Accumulated Other Comprehensive Income
Derivative instruments and Hedging Activities
Estimated hedging losses to be reclassified from accumulated other comprehensive loss into earnings within the next twelve months	$ 4,051
Not Designated as Hedging Instrument
Derivative instruments and Hedging Activities
Number of derivative instruments held | derivative	5

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Fair Value - Deferred Losses Reclassified From Accumulated Other Comprehensive Loss into Earnings (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fair Value Disclosures [Abstract]
Cash flow hedge losses reclassified to earnings	$ (1,013)	$ (2,367)

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Fair Value - Classification Between the Three Levels of the Fair Value Hierarchy (Details) - Recurring basis - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Estimate of Fair Value Measurement
Financial Instruments Measured/Discussed at Fair Value
DownREIT units	$ (1,863)	$ (1,895)
Total	(7,869,314)	(8,563,805)
Fixed rate unsecured notes | Estimate of Fair Value Measurement
Financial Instruments Measured/Discussed at Fair Value
Indebtedness	(7,040,472)	(7,624,560)
Mortgage notes payable, variable rate unsecured notes and Term Loans | Estimate of Fair Value Measurement
Financial Instruments Measured/Discussed at Fair Value
Indebtedness	(841,293)	(940,779)
Interest Rate Caps | Not Designated as Hedging Instrument | Estimate of Fair Value Measurement
Financial Instruments Measured/Discussed at Fair Value
Derivative assets	955	225
Interest Rate Swaps | Cash Flow Hedges | Estimate of Fair Value Measurement
Financial Instruments Measured/Discussed at Fair Value
Derivative assets	13,359	3,204
Quoted Prices in Active Markets for Identical Asset (Level 1)
Financial Instruments Measured/Discussed at Fair Value
DownREIT units	(1,863)	(1,895)
Total	(7,042,335)	(7,626,455)
Quoted Prices in Active Markets for Identical Asset (Level 1) | Fixed rate unsecured notes
Financial Instruments Measured/Discussed at Fair Value
Indebtedness	(7,040,472)	(7,624,560)
Significant Other Observable Inputs (Level 2)
Financial Instruments Measured/Discussed at Fair Value
Total	(826,979)	(937,350)
Significant Other Observable Inputs (Level 2) | Mortgage notes payable, variable rate unsecured notes and Term Loans
Financial Instruments Measured/Discussed at Fair Value
Indebtedness	(841,293)	(940,779)
Significant Other Observable Inputs (Level 2) | Interest Rate Caps | Not Designated as Hedging Instrument
Financial Instruments Measured/Discussed at Fair Value
Derivative assets	955	225
Significant Other Observable Inputs (Level 2) | Interest Rate Swaps | Cash Flow Hedges
Financial Instruments Measured/Discussed at Fair Value
Derivative assets	13,359	3,204
Significant Unobservable Inputs (Level 3)
Financial Instruments Measured/Discussed at Fair Value
Total	$ 0	$ 0

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Subsequent Events (Details) - Subsequent Event $ in Thousands	1 Months Ended
	Apr. 30, 2022 USD ($) shares
Subsequent Event [Line Items]
Forward contract indexed to issuer's equity (in shares) | shares	2,000,000
Net proceeds of forward contract indexed to issuer's equity	$ 494,200
Initial commitment for mezzanine loan	$ 52,575