AvalonBay Communities, Inc. Announces 2025 Operating Results, 1.7% Dividend Increase and Initial 2026 Outlook

ARLINGTON, Va.--(BUSINESS WIRE)--AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported Earnings per Share – diluted (“EPS”), Funds from Operations attributable to common stockholders - diluted (“FFO”) per share and Core FFO per share (as defined in this release) for the three months and year ended December 31, 2025 and 2024 as detailed below. Q4 2025 Q4 2024 % Change EPS $ 1.17 $ 1.98 (40.9 )% FFO per share (1) $ 2.80 $ 2.63 6.5 % Core FFO per share (1) $ 2.85 $ 2.80 1.8 % Full Year 2025 Full Year 2024 % Change EPS $ 7.40 $ 7.60 (2.6 )% FFO per share (1) $ 11.40 $ 10.98 3.8 % Core FFO per share (1) $ 11.24 $ 11.01 2.1 % (1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Definitions and Reconciliations, table 3. The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended December 31, 2025 to its results for the prior year period: Q4 2025 Results Compared to Q4 2024 Per Share EPS FFO Core FFO Q4 2024 per share reported results $ 1.98 $ 2.63 $ 2.80 Same Store Residential NOI (1) 0.04 0.04 0.04 Development and other NOI 0.05 0.05 0.05 Capital markets and transaction activity (0.04 ) (0.04 ) (0.03 ) Unconsolidated investment income (0.01 ) (0.01 ) (0.01 ) Non-core items (2) 0.13 0.13 — Real estate gains, net, depreciation expense and other (0.98 ) — — Q4 2025 per share reported results $ 1.17 $ 2.80 $ 2.85 (1) Consists of increases of $0.08 in revenue and $0.04 in operating expenses. (2) For detail of non-core items, see Definitions and Reconciliations, table 3. The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended December 31, 2025 to its October 2025 outlook: Q4 2025 Results Compared to October 2025 Outlook Per Share EPS FFO Core FFO Projected per share (1) $ 1.23 $ 2.81 $ 2.85 Same Store Residential NOI (2) (0.01 ) (0.01 ) (0.01 ) Development NOI 0.01 0.01 0.01 Overhead and other (0.01 ) (0.01 ) (0.01 ) Capital markets and transaction activity — 0.01 0.01 Non-core items (3) (0.01 ) (0.01 ) — Real estate gains, net, depreciation expense and other (0.04 ) — — Q4 2025 per share reported results $ 1.17 $ 2.80 $ 2.85 (1) The mid-point of the Company's October 2025 outlook. (2) Consists of unfavorable revenue of $0.01. (3) For detail of non-core items, see Definitions and Reconciliations, table 3. The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the year ended December 31, 2025 to its results for the prior year: Full Year 2025 Results Compared to Full Year 2024 Per Share EPS FFO Core FFO Full Year 2024 per share reported results $ 7.60 $ 10.98 $ 11.01 Same Store Residential NOI (1) 0.24 0.24 0.24 Development and other NOI 0.26 0.26 0.26 Overhead and other (0.02 ) (0.02 ) (0.02 ) Capital markets and transaction activity (0.22 ) (0.24 ) (0.25 ) Non-core items (2) 0.18 0.18 — Real estate gains, net, depreciation expense and other (0.64 ) — — Full Year 2025 per share reported results $ 7.40 $ 11.40 $ 11.24 (1) Consists of increases of $0.46 in revenue and $0.22 in operating expenses. (2) For detail of non-core items, see Definitions and Reconciliations, table 3. Same Store Operating Results for the Three Months Ended December 31, 2025 Compared to the Prior Year Period Same Store Residential revenue increased $11,825,000, or 1.8%, to $680,523,000. Same Store Residential operating expenses increased $6,040,000, or 2.9%, to $213,377,000 and Same Store Residential NOI increased $5,785,000, or 1.3%, to $467,146,000. Same Store Operating Results for the Year Ended December 31, 2025 Compared to the Prior Year Same Store Residential revenue increased $66,107,000, or 2.5%, to $2,712,066,000. Same Store Residential operating expenses increased $31,509,000, or 3.8%, to $851,659,000 and Same Store Residential NOI increased $34,598,000, or 1.9%, to $1,860,407,000. Development Activity During the three months ended December 31, 2025, the Company completed the development of two wholly-owned communities: Avalon Hunt Valley West, located in Hunt Valley, MD; and Avalon South Miami, located in South Miami, FL. These communities contain an aggregate of 612 apartment homes and 32,000 square feet of commercial space. These Development Communities were constructed for an aggregate Total Capital Cost of $287,000,000. During the three months ended December 31, 2025, the Company started the construction of five apartment communities: Avalon Northwest Hills, located in Austin, TX; Kanso Parsippany, located in Parsippany, NJ; Avalon Billerica, located in Billerica, MA; Avalon San Ramon, located in San Ramon, CA; and Avalon Townhome Collection Arundel Mills, located in Hanover, MD. In addition, during the three months ended December 31, 2025, the Company expanded its existing development of Avalon Tech Ridge I, located in Austin, TX. The expanded development will include an additional 100 rental townhomes and $33,000,000 in estimated Total Capital Costs for a total of 544 apartment homes and an estimated Total Capital Cost of $153,000,000 for the development. Including the expansion of Avalon Tech Ridge I, these communities are expected to contain an aggregate of 1,378 apartment homes for an estimated Total Capital Cost of $592,000,000. Avalon Townhome Collection Arundel Mills is being developed through the Company's Developer Funding Program ("DFP"), which utilizes third-party multifamily developers to source and construct communities that the Company owns and operates. During the year ended December 31, 2025, the Company: completed the development of four wholly-owned communities containing an aggregate of 1,320 apartment homes and 32,000 square feet of commercial space for a Total Capital Cost of $561,000,000; and started the construction of 11 apartment communities and expanded the development of Avalon Pleasanton and Avalon Tech Ridge I. These communities are expected to contain an aggregate of 3,888 apartment homes and 42,000 square feet of commercial space. Estimated Total Capital Cost for these communities is $1,636,000,000. At December 31, 2025, the Company had 24 wholly-owned Development communities under construction that are expected to contain 8,572 apartment homes and 69,000 square feet of commercial space. Estimated Total Capital Cost for these communities is $3,307,000,000. Disposition Activity During the year ended December 31, 2025, the Company sold nine wholly-owned communities containing an aggregate of 2,102 apartment homes and 38,000 square feet of commercial space. These communities were sold for $811,680,000, resulting in a net gain in accordance with generally accepted accounting principles in the United States ("GAAP") of $336,649,000 and an Economic Gain of $104,989,000. In January 2026, the Company sold Avalon Sunset Towers, located in San Francisco, CA. Avalon Sunset Towers contains 243 apartment homes and was sold for $105,000,000. Acquisition Activity During the three months ended December 31, 2025, the Company acquired Avalon Townhome Collection Brier Creek, located in Durham, NC, containing 93 rental townhomes for a purchase price of $36,500,000. During the year ended December 31, 2025, the Company acquired 12 communities containing 3,378 apartment homes for a total purchase price of $841,950,000. This amount includes the agreed-upon value of the DownREIT Units issued for the Dallas-Fort Worth portfolio of six communities acquired in April 2025. Additionally, during the year ended December 31, 2025, the Company acquired its joint venture partner's 50% interest in Avalon Alderwood Place, located in Lynnwood, WA, containing 328 apartment homes for a purchase price of $71,250,000. Avalon Alderwood Place is now a wholly-owned apartment community and consolidated for financial reporting purposes. Structured Investment Program ("SIP") Activity During the year ended December 31, 2025, the Company entered into two new SIP commitments, agreeing to provide an aggregate investment of up to $48,000,000 in multifamily development projects at a weighted average return of 12.8%. Liquidity and Capital Markets At December 31, 2025, the Company had $187,234,000 in unrestricted cash and cash equivalents. Debt Activity During the three months ended December 31, 2025, the Company had the following debt activity: The Company issued $400,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds before offering costs of $397,424,000. The notes mature in December 2030 and were issued with a 4.35% coupon. The effective interest rate of the notes is 4.52%, including the impact of offering costs and hedging activity; and The Company repaid $300,000,000 principal amount of its 3.50% coupon unsecured notes at par upon maturity. During the year ended December 31, 2025, the Company borrowed a total principal amount of $1,350,000,000, consisting of unsecured notes and borrowings under the term loan, at a weighted average effective rate of 4.64%, and repaid $825,000,000 principal amount of unsecured notes at a weighted average coupon of 3.47%. In addition, during the year ended December 31, 2025, the Company (i) amended and restated its Credit Facility to increase its borrowing capacity to $2,500,000,000 and extend the maturity date to April 2030, and (ii) increased the capacity of its unsecured commercial paper program to $1,000,000,000. The commercial paper program is backstopped by the Company's commitment to maintain available borrowing capacity under its unsecured credit facility in an amount equal to actual borrowings under the program. As of December 31, 2025, the Company did not have any borrowings outstanding under its Credit Facility and had outstanding borrowings of $739,608,000 under its unsecured commercial paper program. As of February 2, 2026, the Company had outstanding borrowings of $775,000,000 under its unsecured commercial paper program. The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the fourth quarter of 2025 was 4.7 times and Unencumbered NOI (as defined in this release) for the year ended December 31, 2025 was 95%. Equity Activity During the three months ended December 31, 2025, the Company repurchased 1,891,922 shares of common stock at an average price of $177.74 per share, including fees, for a total of $336,269,000 under the previously disclosed new stock repurchase program adopted during the three months ended December 31, 2025. During the year ended December 31, 2025, the Company repurchased 2,678,719 shares of common stock for a total of $488,115,000 under the 2020 Stock Repurchase Program and 2025 Stock Repurchase Program. There have been no repurchases subsequent to December 31, 2025. As of January, the Company had $163,769,000 remaining authorized for purchase under the current Board of Directors' approved authorization. As previously disclosed, during the year ended December 31, 2024, the Company entered into forward contracts to sell 3,680,000 shares of common stock at a discount to the closing price of $226.52 per share for approximate net proceeds of $808,606,000. During the year ended December 31, 2025, the Company extended the settlement of these forward contracts to a date no later than December 31, 2026. During the three months and year ended December 31, 2025, the Company settled the outstanding equity forward contracts under its continuous equity program entered into during 2024, issuing 367,113 shares of common stock at $223.27 per share for proceeds, net of offering fees and dividend adjustments, of $81,333,000. First Quarter 2026 Dividend Declaration The Company’s Board of Directors declared a dividend for the first quarter of 2026 of $1.78 per share on the Company’s common stock (par value of $0.01 per share). The declared dividend is a 1.7% increase over the Company’s prior quarterly dividend of $1.75 per share. The dividend is payable on April 15, 2026 to common stockholders of record as of March 31, 2026. In declaring the increased dividend, the Board of Directors evaluated the Company’s past performance and future prospects for earnings growth. Additional factors considered in determining the increase included current common dividend distributions, the relationship of the current common dividend distribution to the Company’s Core FFO, the relationship of dividend distributions to taxable income, distribution requirements under rules governing real estate investment trusts, and expected growth in taxable income. First Quarter and Full Year 2026 Financial Outlook For its first quarter and full year 2026 financial outlook, the Company expects the following: Projected EPS, Projected FFO and Projected Core FFO Outlook (1) Q1 2026 Full Year 2026 Low High Low High Projected EPS $ 2.35 — $ 2.45 $ 6.33 — $ 6.83 Projected FFO per share $ 2.69 — $ 2.79 $ 10.80 — $ 11.30 Projected Core FFO per share $ 2.73 — $ 2.83 $ 11.00 — $ 11.50 (1) See Definitions and Reconciliations, table 9, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS. Full Year 2026 Financial Outlook Full Year 2026 vs. Full Year 2025 Low High Same Store: Residential revenue change 0.4 % — 2.4 % Residential Opex change 2.7 % — 4.9 % Residential NOI change (0.7 )% — 1.3 % The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the full year 2025 to the mid-point of its full year 2026 financial outlook: Full Year 2025 Results Compared to Full Year 2026 Outlook Per Share EPS FFO Core FFO 2025 per share reported results $ 7.40 $ 11.40 $ 11.24 Same Store Residential revenue 0.27 0.27 0.27 Same Store Residential Opex (0.23 ) (0.23 ) (0.23 ) NOI from new Development 0.33 0.33 0.33 Capital markets and transaction activity (0.33 ) (0.33 ) (0.33 ) Overhead and other (0.03 ) (0.03 ) (0.03 ) Non-core items (1) (0.36 ) (0.36 ) — Gain on sale of real estate, net and depreciation expense (0.47 ) — — Projected per share - 2026 outlook (2) $ 6.58 $ 11.05 $ 11.25 (1) For detail of non-core items, see Definitions and Reconciliations, table 3 and table 9. (2) Represents the mid-point of the Company's outlook. The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the fourth quarter 2025 to the mid-point of its first quarter 2026 financial outlook: Q4 2025 Results Compared to Q1 2026 Outlook Per Share EPS FFO Core FFO Q4 2025 per share reported results $ 1.17 $ 2.80 $ 2.85 Same Store Residential revenue 0.01 0.01 0.01 Same Store Residential Opex (1) (0.05 ) (0.05 ) (0.05 ) NOI from new Development 0.01 0.01 0.01 Capital markets and transaction activity (0.02 ) (0.02 ) (0.02 ) Joint Venture and other (0.02 ) (0.02 ) (0.02 ) Non-core items (2) 0.01 0.01 — Gain on sale of real estate, net and depreciation expense 1.29 — — Projected per share - Q1 2026 outlook (3) $ 2.40 $ 2.74 $ 2.78 (1) Increase primarily due to a successful tax appeal in Q4 2025. See full release for additional information. (2) For detail of non-core items, see Definitions and Reconciliations, table 3 and table 9. (3) Represents the mid-point of the Company's outlook. Other Matters The Company will hold a conference call on February 5, 2026 at 1:00 PM ET to review and answer questions about this release, its fourth quarter 2025 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 February 5, 2026 at 6:00 PM ET to March 5, 2026, dial 844-512-2921 and use replay passcode: 13755577. A webcast of the conference call will also be available at https://investors.avalonbay.com, 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 more detailed information regarding financial information and 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 https://investors.avalonbay.com. To receive future press releases via e-mail, please submit a request through https://investors.avalonbay.com/news-events/email-alerts. In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at https://investors.avalonbay.com subsequent to this release and before the market opens on February 5, 2026. About AvalonBay Communities, Inc. AvalonBay Communities, Inc., a member of the S&P 500, is an equity REIT that develops, redevelops, acquires and manages 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 regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. As of December 31, 2025, the Company owned or held a direct or indirect ownership interest in 320 communities containing 98,694 apartment homes in 11 states and the District of Columbia, of which 24 communities were under development. More information may be found on the Company’s website at https://www.avalonbay.com. For additional information, please contact Matthew Grover, Senior Director of Investor Relations, at 703-317-4524. Forward-Looking StatementsRead the full story here

AvalonBay Communities, Inc. Announces 2025 Operating Results, 1.7% Dividend Increase and Initial 2026 Outlook

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