AvalonBay Communities Announces 2006 Dividend Income Tax Treatment

ALEXANDRIA, Va.--(BUSINESS WIRE)--

AvalonBay Communities, Inc. (NYSE: AVB) announced today the final income allocations of the Company's 2006 dividend distributions on its Common Stock and Preferred Stock. The final income allocations as they will be reported on Form 1099-DIV is set forth in the following tables:

Common Shares (CUSIP #053484101)
------------------------------------


                                                  Taxable
Declaration   Record      Payable   Distribution  Ordinary
   Date        Date        Date      Per Share   Income (1)
----------- ----------- ----------- ------------ ----------

 1/23/2006   3/31/2006   4/17/2006     $0.78000   $0.37440
 5/17/2006   6/30/2006   7/17/2006      0.78000    0.37440
 9/13/2006   10/2/2006  10/16/2006      0.78000    0.37440
 12/6/2006  12/29/2006   1/16/2007      0.78000    0.37440
                                    ------------ ----------
                          Totals       $3.12000   $1.49760
                                        100%        48%
                                    ============ ==========



                                                        Unrecap.
Declaration   Record      Payable   Return of  Capital   Section
   Date        Date        Date      Capital    Gain    1250 Gain
----------- ----------- ----------- --------- --------- ---------

 1/23/2006   3/31/2006   4/17/2006  $0.00000  $0.33540  $0.07020
 5/17/2006   6/30/2006   7/17/2006   0.00000   0.33540   0.07020
 9/13/2006   10/2/2006  10/16/2006   0.00000   0.33540   0.07020
 12/6/2006  12/29/2006   1/16/2007   0.00000   0.33540   0.07020
                                    --------- --------- ---------
                          Totals    $0.00000  $1.34160  $0.28080
                                       0%        43%       9%
                                    ========= ========= =========


Preferred Shares Series H (CUSIP #053484705)
---------------------------------------------


                                                  Taxable
Declaration   Record      Payable   Distribution  Ordinary
   Date        Date        Date      Per Share   Income (1)
----------- ----------- ----------- ------------ ----------

 12/6/2005    3/1/2006   3/15/2006     $0.54375   $0.26100
 1/23/2006    6/1/2006   6/15/2006      0.54375    0.26100
 5/17/2006   8/31/2006   9/15/2006      0.54375    0.26100
 9/13/2006   12/1/2006  12/15/2006      0.54375    0.26100
                                    ------------ ----------
                          Totals       $2.17500   $1.04400
                                        100%        48%
                                    ============ ==========


                                                        Unrecap.
Declaration   Record      Payable   Return of  Capital   Section
   Date        Date        Date      Capital    Gain    1250 Gain
----------- ----------- ----------- --------- --------- ---------

 12/6/2005    3/1/2006   3/15/2006  $0.00000  $0.23381  $0.04894
 1/23/2006    6/1/2006   6/15/2006   0.00000   0.23381   0.04894
 5/17/2006   8/31/2006   9/15/2006   0.00000   0.23381   0.04894
 9/13/2006   12/1/2006  12/15/2006   0.00000   0.23381   0.04894
                                    --------- --------- ---------
                          Totals    $0.00000  $0.93524  $0.19576
                                       0%        43%       9%
                                    ========= ========= =========

Components may not sum to the totals due to rounding differences. Additionally, the Company did not incur any foreign taxes, and the information above presents final income allocations.

(1) None of the dividends classified as taxable ordinary income represents "qualified dividend income" and, therefore, are not eligible for capital gains rates.

About AvalonBay Communities, Inc.

As of December 31, 2006, AvalonBay Communities, Inc., headquartered in Alexandria, Virginia, owned or held an ownership interest in 167 apartment communities containing 48,294 apartment homes in ten states and the District of Columbia, of which 17 communities were under construction and six communities were under reconstruction. AvalonBay is in the business of developing, redeveloping, acquiring, and managing apartment communities in high barrier-to-entry markets of the United States. More information on AvalonBay may be found on AvalonBay's Web site at http://www.avalonbay.com.

Copyright (C) 2007 AvalonBay Communities, Inc. All Rights Reserved

Source: AvalonBay Communities, Inc.