EX-99.2 3 q32022ex-992.htm EX-99.2 Document

Exhibit 99.2
avbpressreleaseheader1a19.jpg
For Immediate News Release
November 3, 2022

AVALONBAY COMMUNITIES, INC. ANNOUNCES
THIRD QUARTER 2022 OPERATING RESULTS AND
FOURTH QUARTER 2022 FINANCIAL OUTLOOK





(Arlington, VA) AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported today that Net Income Attributable to Common Stockholders for the three months ended September 30, 2022 was $494,747,000. This resulted in an increase in Earnings per Share – diluted (“EPS”) for the three months ended September 30, 2022 of 530.4% to $3.53 from $0.56 for the prior year period, primarily attributable to an increase in gain on sale of real estate and an increase in Same Store Residential NOI, as detailed in the table below.

Funds from Operations attributable to common stockholders - diluted (“FFO”) per share for the three months ended September 30, 2022 increased 25.5% to $2.46 from $1.96 for the prior year period. Core FFO per share (as defined in this release) for the three months ended September 30, 2022 increased 21.4% to $2.50 from $2.06 for the prior year period.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended September 30, 2022 to its results for the prior year period:
Q3 2022 Results Compared to Q3 2021
Per Share (1)
EPSFFOCore FFO
Q3 2021 per share reported results$0.56 $1.96 $2.06 
Same Store Residential NOI (2)0.35 0.35 0.35 
Development and Other Stabilized Residential NOI0.14 0.14 0.14 
Commercial NOI0.03 0.03 0.03 
Overhead and other (0.06)(0.06)(0.04)
Capital markets and transaction activity 0.06 0.06 (0.06)
Unconsolidated investment income— — 0.02 
Income taxes(0.02)(0.02)— 
Gain on sale of real estate and depreciation expense2.47 — — 
Q3 2022 per share reported results$3.53 $2.46 $2.50 
(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Attachment 12, table 3.
(2) Consists of increases of $0.43 in revenue and $0.08 in operating expenses.
The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended September 30, 2022 to its July 2022 outlook:
Q3 2022 Results Compared to July 2022 Outlook
Per Share
EPSFFOCore FFO
Projected per share (1)$3.53 $2.54 $2.52 
Same Store Residential NOI (2)(0.03)(0.03)(0.03)
Development and Other Stabilized Residential NOI— — — 
Commercial NOI0.01 0.01 0.01 
Overhead and other (0.05)(0.05)(0.01)
Capital markets and transaction activity (0.01)(0.01)— 
Unconsolidated investment income and other0.04 0.04 0.01 
Income taxes(0.04)(0.04)— 
Gain on sale of real estate and depreciation expense0.08 — — 
Q3 2022 per share reported results$3.53 $2.46 $2.50 
(1) The mid-point of the Company's July 2022 outlook.
(2) Consists of $0.01 for revenue and $0.02 for operating expenses.

For the nine months ended September 30, 2022, EPS increased 33.6% to $6.40 from $4.79 for the prior year period, FFO per share increased 21.3% to $7.11 from $5.86 for the prior year period, and Core FFO per share increased 20.0% to $7.19 from $5.99 for the prior year period.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the nine months ended September 30, 2022 to its results for the prior year period:

Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
1


YTD 2022 Results Compared to YTD 2021
Per Share (1)
EPSFFOCore FFO
YTD 2021 per share reported results$4.79 $5.86 $5.99 
Same Store Residential NOI (2)1.00 1.00 1.00 
Development and Other Stabilized Residential NOI0.49 0.49 0.49 
Commercial NOI0.07 0.07 0.07 
Overhead and other (0.17)(0.17)(0.15)
Capital markets and transaction activity (0.10)(0.10)(0.24)
Unconsolidated investment income0.01 0.01 0.03 
Income taxes(0.05)(0.05)— 
Gain on sale of real estate and depreciation expense0.36 — — 
YTD 2022 per share reported results$6.40 $7.11 $7.19 
(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Attachment 12, table 3.
(2) Consists of increases of $1.19 in revenue and $0.19 in operating expenses.

Same Store Operating Results for the Three Months Ended September 30, 2022 Compared to the Prior Year Period

Same Store total revenue increased $61,001,000, or 11.9%, to $574,782,000. Same Store Residential rental revenue increased $60,008,000, or 11.8%, to $567,890,000, as detailed in the following table:

Same Store Residential Rental Revenue Change
Q3 2022 Compared to Q3 2021
Residential rental revenue
Lease rates9.5 %
Concessions and other discounts2.4 %
Economic occupancy(0.2)%
Other rental revenue0.9 %
Uncollectible lease revenue (excluding rent relief) (1)0.6 %
Rent relief (2)(1.4)%
Total Residential rental revenue11.8 %
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue decreased to 2.90% in Q3 2022 from 3.84% in Q3 2021.
(2) The Company recognized $5,673,000 and $12,663,000 from government rent relief programs during Q3 2022 and Q3 2021, respectively.

Same Store Residential operating expenses increased $10,990,000, or 6.5%, to $179,907,000 and Same Store Residential NOI increased $48,991,000, or 14.4%, to $388,397,000.

The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the three months ended September 30, 2022 compared to the three months ended September 30, 2021:

Q3 2022 Compared to Q3 2021
Same Store Residential
Rental Revenue
(1)
Opex
(2)
% of
Q3 2022 NOI
Rental Revenue cash basis (3)
 NOI
New England14.2 %2.7 %21.0 %15.1 %13.1 %
Metro NY/NJ14.5 %11.1 %16.2 %20.8 %14.0 %
Mid-Atlantic8.8 %6.7 %9.9 %14.4 %8.6 %
Southeast FL18.5 %5.2 %26.8 %1.6 %17.2 %
Denver, CO13.5 %(3.5)%22.3 %1.3 %13.6 %
Pacific NW17.9 %8.4 %22.5 %6.5 %14.4 %
N. California10.7 %5.0 %13.1 %18.7 %7.1 %
S. California8.5 %6.4 %9.4 %21.6 %7.7 %
   Total11.8 %6.5 %14.4 %100.0 %10.5 %
(1) See Attachment 4, Quarterly Residential Rental Revenue and Occupancy Changes, for additional detail.
(2) See Attachment 7, Residential Operating Expenses ("Opex"), for discussion of variances.
(3) The change in Residential Rental Revenue with Concessions on a Cash Basis.

Same Store Operating Results for the Nine Months Ended September 30, 2022 Compared to the Prior Year Period

Same Store total revenue increased $169,167,000, or 11.3%, to $1,671,920,000. Same Store Residential rental revenue increased $165,244,000, or 11.1%, to $1,652,297,000, as detailed in the following table:

Same Store Residential Rental Revenue Change
YTD 2022 Compared to YTD 2021
Residential rental revenue
Lease rates7.3 %
Concessions and other discounts2.0 %
Economic occupancy0.2 %
Other rental revenue0.9 %
Uncollectible lease revenue (excluding rent relief) (1)(0.5)%
Rent relief (2)1.2 %
Total Residential rental revenue11.1 %
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue increased to 3.56% in YTD 2022 from 3.42% in YTD 2021.
(2) The Company recognized $33,718,000 and $16,371,000 from government rent relief programs YTD 2022 and YTD 2021, respectively.

Same Store Residential operating expenses increased $25,987,000, or 5.3%, to $513,869,000 and Same Store Residential NOI increased $139,367,000, or 13.9%, to $1,139,668,000.

The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:

Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
2


YTD 2022 Compared to YTD 2021
Same Store Residential
Rental Revenue
(1)
Opex
(2)
% of
YTD 2022 NOI
Rental Revenue cash basis (3)
 NOI
New England12.2 %5.1 %16.3 %14.7 %13.5 %
Metro NY/NJ11.8 %8.1 %13.6 %20.5 %13.2 %
Mid-Atlantic7.1 %4.6 %8.3 %14.5 %7.5 %
Southeast FL22.0 %3.5 %34.6 %1.6 %20.7 %
Denver, CO13.1 %(4.9)%21.4 %1.3 %12.3 %
Pacific NW15.6 %3.4 %21.7 %6.5 %14.1 %
N. California7.9 %4.2 %9.4 %18.6 %6.7 %
S. California13.2 %5.5 %16.8 %22.3 %12.3 %
   Total11.1 %5.3 %13.9 %100.0 %11.1 %
(1) See Attachment 6, Year to Date Residential Rental Revenue and Occupancy Changes, for additional detail.
(2) See Attachment 7, Residential Opex, for discussion of variances.
(3) The change in Residential Rental Revenue with Concessions on a Cash Basis.

Development Activity

Consolidated Development Communities

During the three months ended September 30, 2022, the Company started the construction of Avalon Annapolis, located in Annapolis, MD. Avalon Annapolis is expected to contain 508 apartment homes when completed and be developed for an estimated Total Capital Cost of $202,000,000.

During the nine months ended September 30, 2022, the Company completed the development of four communities containing an aggregate of 1,686 apartment homes for an aggregate Total Capital Cost of $598,000,000.

At September 30, 2022, the Company had 17 consolidated Development communities under construction that are expected to contain 5,427 apartment homes and 56,000 square feet of commercial space. Estimated Total Capital Cost at completion for these Development communities is $2,277,000,000.

Unconsolidated Development Communities

At September 30, 2022, the Company had one Unconsolidated Development community under construction that is expected to contain 475 apartment homes and 56,000 square feet of commercial space.

Disposition Activity

Consolidated Apartment Communities

During the three months ended September 30, 2022, the Company sold five wholly-owned communities:

Avalon Green I, Avalon Green II and Avalon Green III, located in Elmsford, NY;
Avalon Del Mar Station, located in Pasadena, CA; and
Avalon Sharon, located in Sharon, MA.

In aggregate, these communities contain 1,120 apartment homes and were sold for $543,950,000 and a weighted average Initial Market Cap Rate of 4.1%, resulting in a gain in accordance with GAAP of $317,962,000 and an Economic Gain of $218,881,000.

During the nine months ended September 30, 2022, the Company sold eight wholly-owned communities containing an aggregate of 1,708 apartment homes. These assets were sold for $778,950,000 and a weighted average initial Market Cap Rate of 4.0%, resulting in a gain in accordance with GAAP of $466,670,000 and an Economic Gain of $338,685,000.

During the three and nine months ended September 30, 2022, the Company sold 10 and 38, respectively, of the 172 residential condominiums at The Park Loggia, located in New York, NY, for gross proceeds of $38,991,000 and $120,328,000, respectively. As of September 30, 2022, the Company has sold 161 of the 172 residential condominiums for aggregate gross proceeds of $472,158,000.

The Company utilized a portion of the aggregate disposition proceeds received to acquire the wholly-owned communities discussed below during the nine months ended September 30, 2022.

Unconsolidated Real Estate Investments

During the three months ended September 30, 2022, Archstone Multifamily Partners AC LP (the "U.S. Fund"), a private discretionary real estate investment vehicle in which the Company holds an equity interest of 28.6%, sold its final three communities, Avalon Grosvenor Tower, Avalon Studio 4121 and Avalon Station 250. These communities contain an aggregate of 671 apartment homes and were sold for $313,500,000. With the disposition of these communities, the Company recognized $4,690,000 in joint venture income associated with its promoted interest in the U.S. Fund.
Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
3


Acquisition Activity

During the three months ended September 30, 2022, the Company acquired Avalon Miramar Park Place, a wholly-owned community, located in Miramar, FL, containing 650 apartment homes for a purchase price of $295,000,000.

During the nine months ended September 30, 2022, the Company acquired three wholly-owned communities containing 1,053 apartment homes and 16,000 square feet of commercial space for a total purchase price of $459,500,000.

In October 2022, the Company acquired Avalon Highland Creek, a wholly-owned community, located in Charlotte, NC, containing 260 apartment homes for a purchase price of $76,700,000.

Structured Investment Program Activity

During the nine months ended September 30, 2022, the Company entered into the first commitments under its Structured Investment Program, through which the Company will provide mezzanine loans or preferred equity to third party multifamily developers. The initial commitments are for three mezzanine loans of up to $92,375,000 in the aggregate, including a $12,800,000 loan commitment entered into during the three months ended September 30, 2022. These commitments are to fund multifamily development projects in the Company's existing markets. At September 30, 2022, the commitments had a weighted average interest rate of 9.2% and the Company had funded $15,514,000 of these commitments.

Liquidity and Capital Markets

In March 2022, the Company established an unsecured commercial paper note program, which allows the Company to issue, from time to time, unsecured commercial paper notes with varying maturities of less than one year up to a maximum amount outstanding at any one time of $500,000,000. The program is backstopped by the Company's commitment to maintain available borrowing capacity under its Credit Facility in an amount equal to actual borrowings under the program. The Company had $49,985,000 outstanding under its commercial paper program as of September 30, 2022.

In September 2022, the Company amended and restated its unsecured revolving credit facility (the "Credit Facility") to (i) increase its borrowing capacity from $1,750,000,000 to $2,250,000,000, (ii) extend the term of the Credit Facility from February 2024 to September 2026, with two six-month extension options available to the Company for a fee, (iii) amend certain provisions, notably to reduce the capitalization rate used to derive certain financial covenants from 6.0% to 5.75% and (iv) transition the benchmark rate from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR").

The Company's cost of borrowing under the Credit Facility is composed of (i) SOFR, (ii) its current borrowing spread to SOFR of 0.825% per annum, which consists of a 0.10% SOFR adjustment plus 0.725% per annum, (iii) potential sustainability rate and facility fee adjustments that can range from (0.025)% to 0.025% in the aggregate and (iv) an annual facility fee of 0.125%. The borrowing spread to SOFR and the annual facility fee can vary and are determined by the ratings of our unsecured and unsubordinated long-term indebtedness. The sustainability rate and facility fee adjustments can vary and are determined by achievement under certain established environmental, social and governance metrics, with the initial adjustment date effective in July 2023 and recalculation annually thereafter. Prior to the amended and restated Credit Facility, the Company's cost of borrowing was comprised of LIBOR plus 0.775% and an annual facility fee at 0.125% both as determined by the Company's credit ratings.

As of September 30, 2022, the Company did not have any borrowings outstanding under the Credit Facility, and after taking into account its commercial paper program and letters of credit, the Company had $2,193,101,000 available under the Credit Facility.

In addition, at September 30, 2022, the Company had $487,126,000 in unrestricted cash and cash in escrow.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the third quarter of 2022 was 4.6 times and Unencumbered NOI (as defined in this release) for the nine months ended September 30, 2022 was 95%.
Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
4


During the three months ended September 30, 2022, the Company repaid $35,276,000 principal amount secured fixed rate debt with an effective rate of 6.16% in advance of the October 2047 maturity date, recognizing a loss on debt extinguishment of $1,399,000 composed of prepayment penalties and the non-cash write off of unamortized deferred financing costs.

During the nine months ended September 30, 2022, in addition to the debt activity discussed above, the Company repaid $100,000,000 principal amount of its variable rate unsecured term loan at its maturity. The variable rate unsecured term loan was indexed to LIBOR plus 0.90% and entered into in February 2017.

During the nine months ended September 30, 2022, in connection with an underwritten offering of shares, the Company entered into forward contracts to sell 2,000,000 shares of common stock by the end of 2023 for approximate proceeds of $494,200,000 net of offering fees and discounts and based on the initial forward price. The proceeds that the Company expects to receive on the date or dates of settlement are subject to certain customary adjustments during the term of the forward contract for the Company's dividends and a daily interest charge.

In October 2022, the Company settled the outstanding forward contracts entered into in December 2021 under its current continuous equity program, selling 68,577 shares of common stock for $229.34 per share, for net proceeds of $15,727,000.

Fourth Quarter and Full Year 2022 Financial Outlook

For its fourth quarter and full year 2022 financial outlook, the Company expects the following:
Projected EPS, Projected FFO and Projected Core FFO Outlook (1)
 Q4 2022Full Year 2022
 LowHighLowHigh
Projected EPS $1.70 $1.80 $8.10 $8.20 
Projected FFO per share $2.52 $2.62 $9.62 $9.72 
Projected Core FFO per share$2.55 $2.65 $9.74 $9.84 
(1) See Attachment 12, table 9, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS.
Full Year Financial Outlook
Full Year 2022
vs. Full Year 2021
LowHigh
Same Store:
   Residential rental revenue change10.8%11.2%
   Residential Opex change5.5%6.0%
   Residential NOI change13.0%13.8%

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the third quarter 2022 to its fourth quarter 2022 financial outlook:

Q3 2022 Results Compared to Q4 2022 Outlook
Per Share
EPSFFOCore FFO
Q3 2022 per share reported results $3.53 $2.46 $2.50 
Same Store Residential revenue0.04 0.04 0.04 
Same Store Residential Opex0.07 0.07 0.07 
Development and Other Stabilized Residential NOI0.02 0.02 0.02 
Commercial NOI(0.02)(0.02)(0.02)
Capital markets and transaction activity0.01 0.01 — 
Overhead and other(0.01)(0.01)(0.01)
Gain on sale of real estate and depreciation expense(1.89)— — 
Projected per share - Q4 2022 outlook (1)$1.75 $2.57 $2.60 
(1) Represents the mid-point of the Company's outlook.

The following table compares the Company’s October 2022 outlook for EPS, FFO per share and Core FFO per share to its July 2022 financial outlook for the full year 2022:

October 2022 Full Year Outlook Compared
to July 2022 Full Year Outlook
Per Share
EPSFFOCore FFO
Projected per share - July 2022 outlook (1)$7.63 $9.84 $9.86 
Same Store Residential revenue(0.04)(0.04)(0.04)
Same Store Residential Opex(0.03)(0.03)(0.03)
Development and Other Stabilized Residential NOI(0.01)(0.01)(0.01)
Commercial NOI0.02 0.02 0.02 
Capital markets and transaction activity(0.03)(0.03)(0.01)
Overhead and other(0.08)(0.08)— 
Gain on sale of real estate and depreciation expense0.69 — — 
Projected per share - October 2022 outlook (1)$8.15 $9.67 $9.79 
(1) Represents the mid-point of the Company's outlook.

Other Matters

The Company will hold a conference call on November 4, 2022 at 11:00 AM ET to review and answer questions about this release, its third quarter 2022 results, the Attachments (described below) and related matters. To participate on the call, dial 877-407-9716.

To hear a replay of the call, which will be available from November 4, 2022 at 2:00 PM ET to December 4, 2022, dial 844-512-2921 and use replay passcode: 13733776. A
Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
5


webcast of the conference call will also be available at http://www.avalonbay.com/earnings, and an online playback of the webcast will be available for at least seven days following the call.

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

In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at http://www.avalonbay.com/earnings subsequent to this release and before the market opens on November 4, 2022.

About AvalonBay Communities, Inc.

As of September 30, 2022, the Company owned or held a direct or indirect ownership interest in 293 apartment communities containing 88,405 apartment homes in 12 states and the District of Columbia, of which 18 communities were under development and one community was under redevelopment. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion markets of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. More information may be found on the Company’s website at http://www.avalonbay.com. For additional information, please contact Jason Reilley, Vice President of Investor Relations, at 703-317-4681.

Forward-Looking Statements

This release, including its Attachments, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which you can identify by the Company’s use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook,” "may," "shall," "will," "pursue" and similar expressions that predict or indicate future events and trends and that do not report historical matters, are based on the
Company’s expectations, forecasts and assumptions at the time of this release, which may not be realized and involve risks and uncertainties that cannot be predicted accurately or that might not be anticipated. These could cause actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Risks and uncertainties that might cause such differences include the following: risks related to the COVID-19 pandemic, including the effect, among other factors, on the multifamily industry and the general economy of 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, the preferences of consumers and businesses for living and working arrangements, and federal efforts at economic stimulus; we may abandon development or redevelopment opportunities for which we have already incurred costs; adverse capital and credit market conditions, including rising interest rates, may affect our access to various sources of capital and/or cost of capital, which may affect our business activities, earnings and common stock price, among other things; changes in local employment conditions, demand for apartment homes, supply of competitive housing products, landlord-tenant laws, including the adoption of new rent control regulations, and other economic or regulatory conditions may result in lower than expected occupancy and/or rental rates and adversely affect the profitability of our communities; delays in completing development, redevelopment and/or lease-up, and general price inflation, may result in increased financing and construction costs and may delay and/or reduce the profitability of a community; debt and/or equity financing for development, redevelopment or acquisitions of communities may not be available or may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; expenses may result in communities that we develop or redevelop failing to achieve expected profitability; our assumptions concerning risks relating to joint ventures and our ability to successfully dispose of certain assets may not be realized; 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; our assumptions and expectations in our financial outlook may prove to be too optimistic; and the timing and net proceeds of condominium sales at The Park Loggia may not equal our current expectations. Additional discussions of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements appear in the Company’s filings with the Securities and Exchange Commission, including the
Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
6


Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under the heading “Risk Factors” and under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements” and in subsequent quarterly reports on Form 10-Q.

The Company does not undertake a duty to update forward-looking statements, including its expected 2022 operating results and other financial data forecasts contained in this release. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.
 
Definitions and Reconciliations

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

Copyright © 2022 AvalonBay Communities, Inc. All Rights Reserved
7


er-q3x2022.jpg
8



 THIRD QUARTER 2022
 
Supplemental Operating and Financial Data
 
Table of Contents
 
Company Profile  
Condensed Consolidated Operating Information..........................................................................................................Attachment 1
Condensed Consolidated Balance Sheets....................................................................................................................Attachment 2
Sequential Operating Information.................................................................................................................................Attachment 3
  
Market Profile - Same Store  
Quarterly Residential Rental Revenue and Occupancy Changes................................................................................Attachment 4
Sequential Quarterly Residential Rental Revenue and Occupancy Changes..............................................................Attachment 5
Year to Date Residential Rental Revenue and Occupancy Changes...........................................................................Attachment 6
Residential Operating Expenses ("Opex")....................................................................................................................Attachment 7
  
Development, Joint Venture and Debt Profile   
Expensed Community Maintenance Costs and Capitalized Community Expenditures................................................Attachment 8
Development Communities...........................................................................................................................................Attachment 9
Unconsolidated Real Estate Investments.....................................................................................................................Attachment 10
Debt Structure and Select Debt Metrics........................................................................................................................Attachment 11
Definitions and Reconciliations  
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms...................................................Attachment 12

 
The following is a "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The projections and estimates contained in the following attachments, including but not limited to Attachments 9, 10 and 12 contain forward-looking statements that involve risks and uncertainties, and actual results may differ materially from those projected in such statements. Risks associated with the Company's development, redevelopment, construction, and lease-up activities which could impact the forward-looking statements are discussed in the paragraph titled "Forward-Looking Statements" in the release that accompanies, and should be read in conjunction with, these attachments. These and other risks are also described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the Company's Quarterly Reports on Form 10-Q for subsequent quarters, and could cause actual results to differ materially from such projections and estimates.
9


Attachment 1
AvalonBay Communities, Inc.
Condensed Consolidated Operating Information
September 30, 2022
(Dollars in thousands except per share data)
(unaudited)
Q3Q3YTDYTD
20222021% Change20222021% Change
Revenue:   
Rental and other income$663,889 $580,079 14.4 %$1,920,721 $1,691,273 13.6 %
Management, development and other fees1,399 695 101.3 %3,054 2,380 28.3 %
Total665,288 580,774 14.6 %1,923,775 1,693,653 13.6 %
Operating expenses:
Direct property operating expenses, excluding property taxes134,810 122,691 9.9 %382,119 353,905 8.0 %
Property taxes75,091 72,332 3.8 %216,695 212,518 2.0 %
Total community operating expenses209,901 195,023 7.6 %598,814 566,423 5.7 %
Property management and other indirect operating expenses(30,770)(26,013)18.3 %(91,162)(76,472)19.2 %
Expensed transaction, development and other pursuit costs, net of recoveries (1)(6,514)(417)N/A(9,865)(1,900)419.2 %
Interest expense, net (2)(57,290)(55,987)2.3 %(172,613)(164,704)4.8 %
Loss on extinguishment of debt, net(1,646)(17,890)(90.8)%(1,646)(17,768)(90.7)%
Depreciation expense(206,658)(193,791)6.6 %(607,746)(561,560)8.2 %
General and administrative expense (3)(14,611)(17,313)(15.6)%(53,323)(53,130)0.4 %
Casualty and impairment loss— (1,940)100.0 %— (3,117)100.0 %
Income from investments in unconsolidated entities43,777 6,867 537.5 %46,574 32,959 41.3 %
Gain on sale of communities318,289 58 N/A467,493 388,354 20.4 %
Gain on other real estate transactions, net15 1,543 (99.0)%95 2,002 (95.3)%
Net for-sale condominium activity (4)304 158 92.4 %469 (1,402)N/A
Income before income taxes500,283 81,026 517.4 %903,237 670,492 34.7 %
Income tax expense (1)(5,651)(2,179)159.3 %(7,963)(1,434)455.3 %
Net income494,632 78,847 527.3 %895,274 669,058 33.8 %
Net income attributable to noncontrolling interests 115 67 71.6 %208 32 550.0 %
Net income attributable to common stockholders$494,747 $78,914 526.9 %$895,482 $669,090 33.8 %
Net income attributable to common stockholders per common share - basic$3.54 $0.57 521.1 %$6.40 $4.79 33.6 %
Net income attributable to common stockholders per common share - diluted$3.53 $0.56 530.4 %$6.40 $4.79 33.6 %
FFO (1)$343,897 $273,243 25.9 %$994,597 $818,590 21.5 %
Per common share - diluted$2.46 $1.96 25.5 %$7.11 $5.86 21.3 %
Core FFO (1)$349,964 $287,325 21.8 %$1,006,912 $835,921 20.5 %
Per common share - diluted$2.50 $2.06 21.4 %$7.19 $5.99 20.0 %
Dividends declared - common$222,753 $222,472 0.1 %$668,279 $667,343 0.1 %
Per common share$1.59 $1.59 — %$4.77 $4.77 — %
Average shares and participating securities outstanding - basic139,891,547 139,670,482 0.2 %139,869,827 139,639,943 0.2 %
Average shares outstanding - diluted139,981,959 139,737,725 0.2 %139,964,172 139,645,069 0.2 %
Total outstanding common shares and operating partnership units139,835,842 139,646,425 0.1 %139,835,842 139,646,425 0.1 %
(1)See Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 3.
(2)Amounts for the nine months ended September 30, 2022 and 2021 include gains on interest rate contracts of $496 and $2,654, respectively. Amounts for the nine months ended September 30, 2022 also include $1,653 for reserves related to our Structured Investment Program. See Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 3.
(3)Amounts include legal settlements, severance costs and other non-Core items, as detailed in Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 3.
(4)Amounts include $340 and $1,187 of for-sale condominium marketing, operating and administrative costs and are offset by $644 and $1,345 of gains on for-sale condominiums for the three months ended September 30, 2022 and 2021, respectively. Amounts include $1,644 and $3,453 of for-sale condominium marketing, operating and administrative costs and are offset by $2,113 and $2,051 of gains on for-sale condominiums for the nine months ended September 30, 2022 and 2021, respectively. See Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 3.
10


Attachment 2
 
AvalonBay Communities, Inc.
Condensed Consolidated Balance Sheets
September 30, 2022
(Dollars in thousands)
(unaudited)
 
 September 30,December 31,
 20222021
Real estate$24,344,314 $23,799,947 
Less accumulated depreciation(6,671,984)(6,208,610)
Net operating real estate17,672,330 17,591,337 
Construction in progress, including land1,014,252 807,101 
Land held for development167,277 147,546 
For-sale condominium inventory (1)38,509 146,535 
Real estate assets held for sale, net56,275 17,065 
Total real estate, net18,948,643 18,709,584 
Cash and cash equivalents200,999 420,251 
Cash in escrow286,127 123,537 
Resident security deposits36,958 33,757 
Investments in unconsolidated entities217,265 216,390 
Other assets474,778 398,497 
Total assets$20,164,770 $19,902,016 
Unsecured notes, net$7,254,365 $7,349,394 
Unsecured credit facility and commercial paper49,985 — 
Notes payable, net713,609 754,153 
Resident security deposits63,506 59,787 
Other liabilities869,862 802,221 
Total liabilities8,951,327 8,965,555 
Redeemable noncontrolling interests2,855 3,368 
Equity11,210,588 10,933,093 
Total liabilities and equity$20,164,770 $19,902,016 
(1)Consists of the aggregate carrying value of the unsold for-sale residential condominiums of The Park Loggia.

11


Attachment 3
AvalonBay Communities, Inc.
Sequential Operating Information (1)
September 30, 2022
(Dollars in thousands, except per home data)
(unaudited)
Total Apartment
Homes
Quarter Ended
September 30, 2022
Quarter Ended
June 30,
2022
Quarter Ended
March 31, 2022
Quarter Ended
December 31, 2021
Residential Rental Revenue (2)  
Same Store69,491 $567,890 $555,528 $528,879 $518,380 
Other Stabilized (3)7,267 50,495 45,104 41,633 37,950 
Development/Redevelopment (4)8,571 24,436 20,796 17,176 14,546 
Commercial Rental Revenue (2)N/A12,577 9,235 9,924 9,284 
     Total Rental Revenue85,329 $655,398 $630,663 $597,612 $580,160 
Residential Operating Expense
Same Store$179,907 $168,458 $165,504 $158,572 
Other Stabilized (3)17,814 14,668 15,178 13,160 
Development/Redevelopment8,132 6,879 5,177 5,216 
Commercial Operating Expense1,572 1,562 1,700 1,339 
Total Operating Expense$207,425 $191,567 $187,559 $178,287 
Residential NOI (5)
Same Store$388,397 $387,555 $363,716 $360,149 
Other Stabilized (3)33,432 30,973 26,846 25,081 
Development/Redevelopment16,318 13,925 12,007 9,338 
Commercial NOI (5)11,005 7,673 8,224 7,945 
Total NOI$449,152 $440,126 $410,793 $402,513 
Same Store Average Rental Revenue per Occupied Home (6)$2,839 $2,766 $2,634 $2,586 
Same Store Economic Occupancy96.0 %96.4 %96.3 %96.2 %
Same Store Turnover (7)
Current year period / Prior year period54.9% / 55.8%46.8% / 50.8%35.3% / 44.2%37.5% / 47.9%
Current year period YTD / Prior year period YTD45.8% / 50.3%47.1% / 52.7%
SAME STORE LIKE-TERM EFFECTIVE RENT CHANGE (5)
July 2022August 2022September 2022October 2022
  New England16.3 %12.9 %10.4 %6.9 %
  Metro NY/NJ14.1 %12.6 %9.7 %8.8 %
  Mid-Atlantic10.2 %10.2 %8.0 %6.3 %
  Southeast FL17.0 %16.5 %12.3 %7.4 %
  Denver, CO13.9 %10.3 %8.9 %5.4 %
  Pacific NW14.8 %12.9 %8.0 %5.2 %
  N. California12.0 %10.1 %5.0 %3.8 %
  S. California10.4 %8.5 %8.2 %5.2 %
     Total12.9 %11.1 %8.5 %6.2 %
(1)Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale.
(2)Rental revenue excludes non-qualified REIT income.
(3)Results for these communities prior to January 1, 2022 may reflect operations prior to stabilization, including lease-up, such that occupancy is not stabilized.
(4)For per home rent projections and Economic Occupancy for Development communities currently under construction, see Attachment 9 - Development Communities.
(5)See Attachment 12 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.
(6)Reflects the effect of Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs.
(7)Turnover is the annualized number of units turned over during the period, divided by the total number of Same Store apartment homes for the respective period.
12


Attachment 4
AvalonBay Communities, Inc.
Quarterly Residential Rental Revenue and Occupancy Changes - Same Store (1)
September 30, 2022
(unaudited)
 Apartment HomesAverage Rental Revenue Per Occupied Home (2)Economic OccupancyResidential Rental Revenue ($000s)
% Change on a Cash Basis (3)
  Q3 22Q3 21% ChangeQ3 22Q3 21% ChangeQ3 22Q3 21% Change
          
  New England9,618 $3,166 $2,775 14.1 %96.9 %96.8 %0.1 %$88,490 $77,510 14.2 %13.1 %
  Metro NY/NJ
     New York City, NY3,788 3,871 3,200 21.0 %97.2 %96.9 %0.3 %42,777 35,251 21.3 %20.5 %
     New York - Suburban3,202 3,585 3,325 7.8 %94.6 %96.2 %(1.6)%32,566 30,670 6.2 %5.6 %
     New Jersey4,651 3,255 2,817 15.5 %96.0 %96.6 %(0.6)%43,581 37,926 14.9 %14.8 %
  Metro NY/NJ11,641 3,546 3,080 15.1 %96.0 %96.6 %(0.6)%118,924 103,847 14.5 %14.0 %
  Mid-Atlantic
     Washington Metro11,015 2,400 2,202 9.0 %94.9 %95.1 %(0.2)%75,271 69,214 8.8 %8.6 %
     Baltimore, MD1,562 2,017 1,832 10.1 %96.1 %97.3 %(1.2)%9,087 8,347 8.9 %8.6 %
  Mid-Atlantic12,577 2,352 2,157 9.0 %95.1 %95.3 %(0.2)%84,358 77,561 8.8 %8.6 %
  Southeast FL1,214 2,791 2,314 20.6 %94.9 %97.0 %(2.1)%9,642 8,137 18.5 %17.2 %
  Denver, CO1,086 2,209 1,929 14.5 %95.7 %96.7 %(1.0)%6,891 6,069 13.5 %13.6 %
  Pacific Northwest4,807 2,642 2,231 18.4 %95.1 %95.6 %(0.5)%36,232 30,723 17.9 %14.4 %
  Northern California
     San Jose, CA4,723 2,897 2,592 11.8 %95.6 %95.9 %(0.3)%39,255 35,192 11.5 %7.2 %
     Oakland-East Bay, CA4,136 2,666 2,488 7.2 %96.0 %95.4 %0.6 %31,757 29,461 7.8 %6.6 %
     San Francisco, CA3,267 3,277 2,932 11.8 %95.4 %94.6 %0.8 %30,633 27,204 12.6 %7.3 %
  Northern California12,126 2,921 2,649 10.3 %95.7 %95.3 %0.4 %101,645 91,857 10.7 %7.1 %
  Southern California
     Los Angeles, CA11,284 2,544 2,353 8.1 %96.5 %96.6 %(0.1)%83,082 76,896 8.0 %7.1 %
     Orange County, CA3,371 2,567 2,346 9.4 %95.9 %97.7 %(1.8)%24,892 23,136 7.6 %7.3 %
     San Diego, CA1,767 2,656 2,357 12.7 %97.5 %97.1 %0.4 %13,734 12,145 13.1 %12.9 %
  Southern California16,422 2,561 2,353 8.8 %96.5 %96.8 %(0.3)%121,708 112,177 8.5 %7.7 %
        Total Same Store69,491 $2,839 $2,534 12.0 %96.0 %96.2 %(0.2)%$567,890 $507,881 11.8 %10.5 %

(1) Same Store is composed of communities with Stabilized Operations as of January 1, 2021 such that a comparison of Q3 2021 to Q3 2022 is meaningful.
(2) Reflects the effect of Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs.
(3) Represents the change in Residential Rental Revenue with Concessions on a Cash Basis. See Attachment 12, table 10, for additional detail and a reconciliation.

13


Attachment 5
AvalonBay Communities, Inc.
Sequential Quarterly Residential Rental Revenue and Occupancy Changes - Same Store (1)
September 30, 2022
(unaudited)
 Apartment HomesAverage Rental Revenue Per Occupied Home (2)Economic OccupancyResidential Rental Revenue ($000s)
% Change on a Cash Basis (3)
  Q3 22Q2 22% ChangeQ3 22Q2 22% ChangeQ3 22Q2 22% Change
          
  New England9,618 $3,166 $3,006 5.3 %96.9 %97.5 %(0.6)%$88,490 $84,554 4.7 %3.7 %
  Metro NY/NJ
     New York City, NY3,788 3,871 3,605 7.4 %97.2 %97.3 %(0.1)%42,777 39,883 7.3 %5.2 %
     New York - Suburban3,202 3,585 3,473 3.2 %94.6 %95.4 %(0.8)%32,566 31,791 2.4 %1.9 %
     New Jersey4,651 3,255 3,070 6.0 %96.0 %96.5 %(0.5)%43,581 41,300 5.5 %4.7 %
  Metro NY/NJ11,641 3,546 3,354 5.7 %96.0 %96.4 %(0.4)%118,924 112,974 5.3 %4.1 %
  Mid-Atlantic
     Washington Metro11,015 2,400 2,323 3.3 %94.9 %95.3 %(0.4)%75,271 73,150 2.9 %2.5 %
     Baltimore, MD1,562 2,017 1,957 3.1 %96.1 %97.1 %(1.0)%9,087 8,904 2.1 %2.1 %
  Mid-Atlantic12,577 2,352 2,278 3.2 %95.1 %95.5 %(0.4)%84,358 82,054 2.8 %2.5 %
  Southeast FL1,214 2,791 2,717 2.7 %94.9 %95.3 %(0.4)%9,642 9,426 2.3 %2.0 %
  Denver, CO1,086 2,209 2,118 4.3 %95.7 %96.5 %(0.8)%6,891 6,661 3.5 %3.4 %
  Pacific Northwest4,807 2,642 2,547 3.7 %95.1 %95.9 %(0.8)%36,232 35,218 2.9 %2.5 %
  Northern California
     San Jose, CA4,723 2,897 2,812 3.0 %95.6 %96.5 %(0.9)%39,255 38,448 2.1 %1.5 %
     Oakland-East Bay, CA4,136 2,666 2,599 2.6 %96.0 %96.1 %(0.1)%31,757 30,995 2.5 %2.4 %
     San Francisco, CA3,267 3,277 3,222 1.7 %95.4 %95.5 %(0.1)%30,633 30,157 1.6 %2.4 %
  Northern California12,126 2,921 2,850 2.5 %95.7 %96.1 %(0.4)%101,645 99,600 2.1 %2.0 %
  Southern California
     Los Angeles, CA11,284 2,544 2,652 (4.1)%96.5 %96.7 %(0.2)%83,082 86,837 (4.3)%(4.3)%
     Orange County, CA3,371 2,567 2,556 0.4 %95.9 %96.6 %(0.7)%24,892 24,962 (0.3)%(0.3)%
     San Diego, CA1,767 2,656 2,557 3.9 %97.5 %97.7 %(0.2)%13,734 13,242 3.7 %3.6 %
  Southern California16,422 2,561 2,623 (2.4)%96.5 %96.8 %(0.3)%121,708 125,041 (2.7)%(2.7)%
        Total Same Store69,491 $2,839 $2,766 2.6 %96.0 %96.4 %(0.4)%$567,890 $555,528 2.2 %1.8 %

(1) Same Store is composed of communities with Stabilized Operations as of January 1, 2021.
(2) Reflects the effect of Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs.
(3) Represents the change in Residential Rental Revenue with Concessions on a Cash Basis. See Attachment 12, table 10, for additional detail and a reconciliation.
14


Attachment 6
AvalonBay Communities, Inc.
Year to Date Residential Rental Revenue and Occupancy Changes - Same Store (1)
September 30, 2022
(unaudited)
 Apartment HomesAverage Rental Revenue Per Occupied Home (2)Economic OccupancyResidential Rental Revenue ($000s)
% Change on a Cash Basis (3)
 Year to Date 2022Year to Date 2021% ChangeYear to Date 2022Year to Date 2021% ChangeYear to Date 2022Year to Date 2021% Change
  New England9,618 $3,017 $2,716 11.1 %97.1 %96.0 %1.1 %$253,700 $226,073 12.2 %13.5 %
  Metro NY/NJ
     New York City, NY3,788 3,644 3,189 14.3 %97.2 %96.6 %0.6 %120,768 105,098 14.9 %18.3 %
     New York - Suburban3,202 3,483 3,212 8.4 %95.3 %95.8 %(0.5)%95,628 88,644 7.9 %7.6 %
     New Jersey4,651 3,068 2,747 11.7 %96.5 %96.3 %0.2 %123,913 110,719 11.9 %13.0 %
  Metro NY/NJ11,641 3,370 3,018 11.7 %96.4 %96.3 %0.1 %340,309 304,461 11.8 %13.2 %
  Mid-Atlantic
     Washington Metro11,015 2,320 2,179 6.5 %95.2 %94.8 %0.4 %218,990 204,808 6.9 %7.5 %
     Baltimore, MD1,562 1,956 1,797 8.8 %96.7 %97.3 %(0.6)%26,581 24,558 8.2 %7.9 %
  Mid-Atlantic12,577 2,275 2,131 6.8 %95.4 %95.1 %0.3 %245,571 229,366 7.1 %7.5 %
  Southeast FL1,214 2,692 2,194 22.7 %95.6 %96.3 %(0.7)%28,124 23,055 22.0 %20.7 %
  Denver, CO1,086 2,119 1,863 13.7 %95.9 %96.5 %(0.6)%19,867 17,573 13.1 %12.3 %
  Pacific Northwest4,807 2,528 2,190 15.4 %95.5 %95.3 %0.2 %104,431 90,303 15.6 %14.1 %
  Northern California
     San Jose, CA4,723 2,797 2,600 7.6 %96.2 %96.3 %(0.1)%114,366 106,423 7.5 %7.3 %
     Oakland-East Bay, CA4,136 2,585 2,441 5.9 %96.1 %95.9 %0.2 %92,489 87,179 6.1 %4.7 %
     San Francisco, CA3,267 3,207 2,906 10.4 %95.4 %95.5 %(0.1)%89,973 81,553 10.3 %7.9 %
  Northern California12,126 2,835 2,628 7.9 %95.9 %95.9 %0.0 %296,828 275,155 7.9 %6.7 %
  Southern California
     Los Angeles, CA11,284 2,553 2,253 13.3 %96.5 %96.4 %0.1 %250,179 220,609 13.4 %12.4 %
     Orange County, CA3,371 2,520 2,230 13.0 %96.4 %97.1 %(0.7)%73,686 65,614 12.3 %11.6 %
     San Diego, CA1,767 2,559 2,257 13.4 %97.3 %97.0 %0.3 %39,602 34,844 13.7 %12.9 %
  Southern California16,422 2,547 2,250 13.2 %96.6 %96.6 %0.0 %363,467 321,067 13.2 %12.3 %
        Total Same Store69,491 $2,745 $2,476 10.9 %96.2 %96.0 %0.2 %$1,652,297 $1,487,053 11.1 %11.1 %

(1) Same Store is composed of communities with Stabilized Operations as of January 1, 2021 such that a comparison of year to date 2021 to year to date 2022 is meaningful.
(2) Reflects the effect of Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs.
(3) Represents the change in Residential Rental Revenue with Concessions on a Cash Basis. See Attachment 12, table 10, for additional detail and a reconciliation.
15


Attachment 7
AvalonBay Communities, Inc.
Residential Operating Expenses ("Opex") - Same Store (1)
September 30, 2022
(Dollars in thousands)
(unaudited)
Q3
2022
Q3
2021
% ChangeQ3 2022 % of
Total Opex
Year to Date
2022
Year to Date
2021
% ChangeYear to Date 2022 % of
Total Opex
Property taxes (2)$62,344 $61,047 2.1 %34.6 %$181,376 $178,309 1.7 %35.3 %
Payroll (3)36,137 36,072 0.2 %20.1 %108,322 107,525 0.7 %21.1 %
Repairs & maintenance (4)33,644 31,238 7.7 %18.7 %91,888 86,252 6.5 %17.9 %
Utilities (5)20,146 16,716 20.5 %11.2 %54,953 46,365 18.5 %10.7 %
Office operations (6)16,677 13,011 28.2 %9.3 %45,368 38,051 19.2 %8.8 %
Insurance (7)7,541 7,208 4.6 %4.2 %21,941 20,904 5.0 %4.3 %
Marketing3,418 3,625 (5.7)%1.9 %10,021 10,476 (4.3)%1.9 %
Total Same Store Residential Operating Expenses$179,907 $168,917 6.5 %100.0 %$513,869 $487,882 5.3 %100.0 %

(1)Same Store operating expenses exclude indirect costs for corporate-level property management and other support-related expenses.
(2)Property taxes increased for the three and nine months ended September 30, 2022 over the prior year periods due to (i) increased assessments across the portfolio and (ii) the expiration of property tax incentive programs at certain of our properties in New York City, partially offset by successful appeals in the current year periods in excess of the prior year periods.
(3)Payroll costs increased for the nine months ended September 30, 2022 over the prior year period primarily due to merit increases, maintenance overtime and benefits costs, partially offset by a reduction in on-site leasing and administrative personnel.
(4)Repairs and maintenance increased for the three and nine months ended September 30, 2022 over the prior year periods due to increased turnover costs, costs for the operation and maintenance of smart access technology, as well as the operation and maintenance of common area amenities including swimming pools that re-opened in 2022.
(5)Utilities represents aggregate utility costs, net of resident reimbursements. The increases for the three and nine months ended September 30, 2022 over the prior year periods are primarily due to increased costs for electricity and gas rates, water and sewer charges, a refund for water and sewer in the prior year periods not present in the current year periods, trash removal as well as costs for the Company’s implementation of a bulk internet offering at its communities which is more than offset by the bulk internet revenue.
(6)Office operations includes administrative costs, legal and eviction costs, land lease expense and association and license fees. The increases for the three and nine months ended September 30, 2022 over the prior year periods are primarily due to bad debt expense associated with amounts due from residents for utility reimbursements, damage receipts and other related items, credit card fees which are offset in revenue, furnished housing furniture rental costs which are more than offset by furnished housing revenue premiums, government licenses and association fees in Northern California.
(7)Insurance is composed of premiums, expected claims activity and associated reductions from receipt of claims recoveries. The increase for the three months ended September 30, 2022 over the prior year period is due to increased property insurance premiums and the timing of claims. Insurance costs can be variable due to the amounts and timing of estimated and actual claim activity and the related recoveries received.
16


Attachment 8
AvalonBay Communities, Inc.
Expensed Community Maintenance Costs and Capitalized Community Expenditures
September 30, 2022
(Dollars in thousands except per home data)
(unaudited)
YTD 2022 Maintenance
Expensed Per Home
Categorization of YTD 2022
Additional Capitalized Value (2)
Current Communities Apartment Homes (1)Carpet ReplacementOther Maintenance (3)TotalAcquisitions, Construction, Redevelopment & Dispositions (4)NOI Enhancing (5)Asset PreservationYTD 2022 Additional Capitalized ValueNOI Enhancing Per HomeAsset Preservation Per Home
Same Store69,491 $91 $2,041 $2,132 $48,149 (6)$26,479 $80,952 $155,580 $381 $1,165 
Other Stabilized7,267 30 1,561 1,591 467,722 (7)306 1,670 469,698 $42 $230 
Development/Redevelopment (8)8,571 18 571 589 616,525 — — 616,525 — — 
Dispositions (9)— — — — (538,083)— — (538,083)— — 
        Total 85,329 $78 $1,853 $1,931 $594,313 $26,785 $82,622 $703,720 N/AN/A

(1)Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale.
(2)Expenditures are capitalized for the acquisition or development of new assets or expenditures that extend the life of existing assets and benefit the Company for periods greater than a year.
(3)Other maintenance includes maintenance, landscaping and redecorating costs, as well as maintenance related payroll expense.
(4)Includes the write-off of impaired assets and additional capitalized expenditures related to recognized casualty losses, if applicable.
(5)This Attachment excludes capitalized expenditures for the commercial component of communities, which the Company classifies as NOI Enhancing. Same Store and Other Stabilized exclude $636 and $7,556, respectively, related to commercial space.
(6)Consists primarily of expenditures for communities under redevelopment that have remained in Same Store with stabilized occupancy.
(7)Represents acquired communities coupled with commitment close-outs and construction true-ups on recently constructed communities.
(8)Includes communities that were under construction/reconstruction during the period, including communities where construction/reconstruction has been completed.
(9)Includes The Park Loggia condominium sales.
Other Capitalized Costs
InterestOverhead
Q3 2022$9,131 $12,934 
Q2 2022$8,193 $13,417 
Q1 2022$7,100 $12,088 
Q4 2021$7,664 $11,447 

17


Attachment 9
AvalonBay Communities, Inc.