Q4 2019 Results Compared to Q4 2018 | |||||||||
Per Share (1) | |||||||||
EPS | FFO | Core FFO | |||||||
Q4 2018 per share reported results | $ | 2.79 | $ | 2.17 | $ | 2.31 | |||
Established and Redevelopment Community NOI | 0.07 | 0.07 | 0.07 | ||||||
Development and Other Stabilized Community NOI | 0.10 | 0.10 | 0.10 | ||||||
Capital markets and transaction activity | 0.03 | 0.02 | (0.06 | ) | |||||
Joint venture income | 0.01 | 0.01 | 0.01 | ||||||
Overhead and other | 0.02 | 0.02 | — | ||||||
Income tax expense | (0.01 | ) | (0.01 | ) | — | ||||
Gain on sale of real estate and depreciation expense | (1.81 | ) | — | — | |||||
Q4 2019 per share reported results | $ | 1.20 | $ | 2.38 | $ | 2.43 | |||
(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Attachment 15, table 4. | |||||||||
Full Year 2019 Results | |||||||||
Comparison to Full Year 2018 | |||||||||
Per Share (1) | |||||||||
EPS | FFO | Core FFO | |||||||
2018 per share reported results | $ | 7.05 | $ | 8.81 | $ | 9.00 | |||
Established and Redevelopment Community NOI | 0.30 | 0.30 | 0.30 | ||||||
Development and Other Stabilized Community NOI | 0.33 | 0.33 | 0.32 | ||||||
Capital markets and transaction activity | (0.15 | ) | (0.17 | ) | (0.26 | ) | |||
Joint venture income | 0.05 | 0.05 | 0.05 | ||||||
Overhead and other | (0.04 | ) | (0.04 | ) | (0.07 | ) | |||
Income tax expense | (0.10 | ) | (0.10 | ) | — | ||||
Gain on sale of real estate and depreciation expense | (1.81 | ) | — | — | |||||
2019 per share reported results | $ | 5.63 | $ | 9.18 | $ | 9.34 | |||
(1) For additional detail on reconciling items between EPS, FFO and Core FFO, see Attachment 15, table 4. | |||||||||
Q4 2019 Compared to Q4 2018 | ||||||||||||
Rental Revenue (1)(2) | Opex (2)(3) | NOI | % of NOI (4) | |||||||||
New England | 3.2 | % | 2.9 | % | 3.5 | % | 14.3 | % | ||||
Metro NY/NJ | 1.9 | % | 2.3 | % | 1.9 | % | 22.7 | % | ||||
Mid-Atlantic | 3.0 | % | 0.9 | % | 3.8 | % | 16.1 | % | ||||
Pacific NW | 2.2 | % | 12.0 | % | (0.9 | )% | 6.2 | % | ||||
No. California | 2.6 | % | 3.3 | % | 2.4 | % | 20.3 | % | ||||
So. California | 2.3 | % | 1.1 | % | 2.8 | % | 20.4 | % | ||||
Total | 2.5 | % | 2.6 | % | 2.5 | % | 100.0 | % | ||||
(1) See Attachment 4, Quarterly Rental Revenue and Occupancy Changes, for additional detail. | ||||||||||||
(2) 2018 results have been adjusted to reflect uncollectible lease revenue as an adjustment to revenue. See Attachment 15, table 1. | ||||||||||||
(3) See Attachment 7, Operating Expenses ("Opex"), for discussion of variances. | ||||||||||||
(4) Represents % of total NOI for Q4 2019 in the presented regions, including amounts related to communities that have been sold or that are classified as held for sale. | ||||||||||||
Full Year 2019 Compared to Full Year 2018 | ||||||||||||
Rental Revenue (1)(2) | Opex (2)(3) | NOI | % of NOI (4) | |||||||||
New England | 3.1 | % | 2.3 | % | 3.5 | % | 14.3 | % | ||||
Metro NY/NJ | 2.6 | % | 2.9 | % | 2.6 | % | 22.6 | % | ||||
Mid-Atlantic | 3.0 | % | 2.2 | % | 3.3 | % | 16.0 | % | ||||
Pacific NW | 3.7 | % | 0.9 | % | 4.9 | % | 5.9 | % | ||||
No. California | 3.0 | % | 3.3 | % | 3.0 | % | 20.6 | % | ||||
So. California | 2.9 | % | 3.6 | % | 2.7 | % | 20.6 | % | ||||
Total | 2.9 | % | 2.8 | % | 3.1 | % | 100.0 | % | ||||
(1) See Attachment 6, Full Year Rental Revenue and Occupancy Changes, for additional detail. | ||||||||||||
(2) 2018 results have been adjusted to reflect uncollectible lease revenue as an adjustment to revenue. See Attachment 15, table 1. | ||||||||||||
(3) See Attachment 7, Operating Expenses ("Opex"), for discussion of variances. | ||||||||||||
(4) Represents % of total NOI for Full Year 2019 in the presented regions, including amounts related to communities that have been sold or that are classified as held for sale. | ||||||||||||
• | Avalon Boonton, located in Boonton, NJ; |
• | Avalon Belltown Towers, located in Seattle, WA; and |
• | Avalon Saugus, located in Saugus, MA. |
• | Avalon Acton II, located in Acton, MA; |
• | Avalon Woburn, located in Woburn, MA; |
• | AVA RiNo, located in Denver, CO; |
• | Avalon Monrovia, located in Monrovia, CA; and |
• | Avalon Alderwood Mall, located in Lynnwood, WA, which is being developed by the Company through an unconsolidated joint venture in which the Company owns a 50% interest. |
• | completed the development of seven apartment communities containing an aggregate of 2,027 apartment homes and 34,000 square feet of retail space for an aggregate Total Capital Cost of $667,000,000; and |
• | commenced the development of eight apartment communities, which in the aggregate are expected to contain 2,377 apartment homes, and are expected to be completed for an aggregate Total Capital Cost of $794,000,000 at share. |
• | The Company issued $450,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of $446,877,000. The notes mature in June 2029 and were issued with a 3.30% coupon. The effective interest rate of the notes is 3.66%, including the impact of an interest rate hedge and offering costs. |
• | The Company reduced its outstanding secured indebtedness by $189,251,000. The Company repaid $219,501,000 principal amount of mortgage notes secured by seven operating communities, at par, of which $140,389,000 was variable rate and $79,112,000 was fixed rate with a weighted average effective interest rate of 3.22%. The Company utilized $47,174,000 of restricted cash held in principal reserve funds as partial repayment of this indebtedness. These repayments were partially offset by a 3.26% fixed rate $30,250,000 secured mortgage that matures in August 2029, which was entered into in conjunction with the acquisition of a community. |
• | In the fourth quarter of 2019, under the Company's current continuous equity program, the Company issued 947,868 shares of common stock for net proceeds of $197,122,000 in settlement of the forward contract entered into September 2019. |
• | During the first half of 2019, the Company issued 994,634 shares of common stock for net proceeds of $196,700,000 under both the Company's previous and current continuous equity programs. |
Projected EPS, Projected FFO and Projected Core FFO Outlook (1) | ||||
Full Year 2020 | ||||
Low | High | |||
Projected EPS | $5.89 | - | $6.29 | |
Projected FFO per share | $9.46 | - | $9.86 | |
Projected Core FFO per share | $9.62 | - | $10.02 | |
(1) See Attachment 15, table 9, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS. | ||||
Full Year 2020 Outlook | |||||||||
Comparison to Full Year 2019 Results | |||||||||
Per Share | |||||||||
EPS | FFO | Core FFO | |||||||
2019 per share reported results | $ | 5.63 | $ | 9.18 | $ | 9.34 | |||
Established and Redevelopment Community NOI | 0.33 | 0.33 | 0.33 | ||||||
Development and Other Stabilized Community NOI | 0.42 | 0.42 | 0.43 | ||||||
Capital markets and transaction activity | (0.22 | ) | (0.22 | ) | (0.18 | ) | |||
Joint venture income | (0.05 | ) | (0.05 | ) | (0.04 | ) | |||
Overhead and other | (0.09 | ) | (0.09 | ) | (0.06 | ) | |||
Income tax expense | 0.09 | 0.09 | — | ||||||
Gain on sale of real estate and depreciation expense | (0.02 | ) | — | — | |||||
2020 per share outlook (1) | $ | 6.09 | $ | 9.66 | $ | 9.82 | |||
(1) Represents the mid-point of the Company's February 2020 outlook. | |||||||||
Company Profile | ||
Condensed Consolidated Operating Information........................................................................................................... | Attachment 1 | |
Condensed Consolidated Balance Sheets.................................................................................................................... | Attachment 2 | |
Sequential Operating Information by Business Segment.............................................................................................. | Attachment 3 | |
Market Profile - Established Communities | ||
Quarterly Rental Revenue and Occupancy Changes.................................................................................................... | Attachment 4 | |
Sequential Quarterly Rental Revenue and Occupancy Changes.................................................................................. | Attachment 5 | |
Full Year Rental Revenue and Occupancy Changes............................................................................................... | Attachment 6 | |
Operating Expenses ("Opex")........................................................................................................................................ | Attachment 7 | |
Development, Joint Venture, Debt Profile and Disposition Activity | ||
Expensed Community Maintenance Costs and Capitalized Community Expenditures................................................. | Attachment 8 | |
Development Communities............................................................................................................................................ | Attachment 9 | |
Future Development...................................................................................................................................................... | Attachment 10 | |
Unconsolidated Real Estate Investments...................................................................................................................... | Attachment 11 | |
Debt Structure and Select Debt Metrics......................................................................................................................... | Attachment 12 | |
Summary of Disposition Activity..................................................................................................................................... | Attachment 13 | |
Financial Outlook | ||
2020 Financial Outlook.................................................................................................................................................. | Attachment 14 | |
Definitions and Reconciliations | ||
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms................................................... | Attachment 15 |
Q4 | Q4 | Full Year | Full Year | |||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||
Revenue: | ||||||||||||||||||||||
Rental and other income (1) | $ | 592,089 | $ | 577,702 | 2.5 | % | $ | 2,319,666 | $ | 2,280,963 | 1.7 | % | ||||||||||
Management, development and other fees | 1,477 | 820 | 80.1 | % | 4,960 | 3,572 | 38.9 | % | ||||||||||||||
Total | 593,566 | 578,522 | 2.6 | % | 2,324,626 | 2,284,535 | 1.8 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Direct property operating expenses, excluding property taxes (1) | 103,749 | 107,983 | (3.9 | )% | 427,114 | 441,155 | (3.2 | )% | ||||||||||||||
Property taxes | 65,071 | 60,442 | 7.7 | % | 252,961 | 241,563 | 4.7 | % | ||||||||||||||
Property management and other indirect operating expenses | 21,573 | 22,680 | (4.9 | )% | 88,031 | 83,838 | 5.0 | % | ||||||||||||||
Total operating expenses | 190,393 | 191,105 | (0.4 | )% | 768,106 | 766,556 | 0.2 | % | ||||||||||||||
Interest expense, net | (54,190 | ) | (55,180 | ) | (1.8 | )% | (203,585 | ) | (220,974 | ) | (7.9 | )% | ||||||||||
Loss on extinguishment of debt, net | — | (14,775 | ) | (100.0 | )% | (602 | ) | (17,492 | ) | (96.6 | )% | |||||||||||
General and administrative expense (2) | (12,602 | ) | (15,985 | ) | (21.2 | )% | (58,042 | ) | (60,369 | ) | (3.9 | )% | ||||||||||
Joint venture income (3) | 7,872 | 2,710 | 190.5 | % | 8,652 | 15,270 | (43.3 | )% | ||||||||||||||
Expensed transaction, development and other pursuit costs, net of recoveries | (2,428 | ) | (1,052 | ) | 130.8 | % | (4,991 | ) | (3,265 | ) | 52.9 | % | ||||||||||
Depreciation expense | (171,364 | ) | (158,914 | ) | 7.8 | % | (661,578 | ) | (631,196 | ) | 4.8 | % | ||||||||||
Income tax (expense) benefit (4) | (1,825 | ) | 247 | N/A | (13,003 | ) | 160 | N/A | ||||||||||||||
Casualty and impairment loss, net (4) | — | (826 | ) | (100.0 | )% | — | (215 | ) | (100.0 | )% | ||||||||||||
Gain on sale of communities (5) | 256 | 242,532 | (99.9 | )% | 166,105 | 374,976 | (55.7 | )% | ||||||||||||||
Gain on other real estate transactions | 65 | 9 | 622.2 | % | 439 | 345 | 27.2 | % | ||||||||||||||
For-sale condominium marketing and administrative costs (4) | (1,286 | ) | (547 | ) | 135.1 | % | (3,812 | ) | (1,044 | ) | 265.1 | % | ||||||||||
Net income | 167,671 | 385,636 | (56.5 | )% | 786,103 | 974,175 | (19.3 | )% | ||||||||||||||
Net (income) loss attributable to noncontrolling interests | (21 | ) | 98 | N/A | (129 | ) | 350 | N/A | ||||||||||||||
Net income attributable to common stockholders | $ | 167,650 | $ | 385,734 | (56.5 | )% | $ | 785,974 | $ | 974,525 | (19.3 | )% | ||||||||||
Net income attributable to common stockholders per common share - basic | $ | 1.20 | $ | 2.79 | (57.0 | )% | $ | 5.64 | $ | 7.05 | (20.0 | )% | ||||||||||
Net income attributable to common stockholders per common share - diluted | $ | 1.20 | $ | 2.79 | (57.0 | )% | $ | 5.63 | $ | 7.05 | (20.1 | )% | ||||||||||
FFO (4) | $ | 332,932 | $ | 300,032 | 11.0 | % | $ | 1,280,690 | $ | 1,218,752 | 5.1 | % | ||||||||||
Per common share - diluted | $ | 2.38 | $ | 2.17 | 9.7 | % | $ | 9.18 | $ | 8.81 | 4.2 | % | ||||||||||
Core FFO (4) | $ | 339,906 | $ | 319,521 | 6.4 | % | $ | 1,303,207 | $ | 1,244,286 | 4.7 | % | ||||||||||
Per common share - diluted | $ | 2.43 | $ | 2.31 | 5.2 | % | $ | 9.34 | $ | 9.00 | 3.8 | % | ||||||||||
Dividends declared - common | $ | 214,046 | $ | 203,750 | 5.1 | % | $ | 851,287 | $ | 813,722 | 4.6 | % | ||||||||||
Per common share | $ | 1.52 | $ | 1.47 | 3.4 | % | $ | 6.08 | $ | 5.88 | 3.4 | % | ||||||||||
Average shares and participating securities outstanding - basic | 139,761,996 | 138,322,285 | 1.0 | % | 139,420,111 | 138,247,513 | 0.8 | % | ||||||||||||||
Average shares outstanding - diluted | 139,968,027 | 138,463,943 | 1.1 | % | 139,571,550 | 138,289,241 | 0.9 | % | ||||||||||||||
Total outstanding common shares and operating partnership units | 140,651,462 | 138,515,924 | 1.5 | % | 140,651,462 | 138,515,924 | 1.5 | % |
(1) | Historically, the Company presented charges related to uncollectible lease revenue in operating expenses. With the Company’s adoption of ASU 2016-02, Leases, the Company is presenting such charges as an adjustment to revenue in its consolidated GAAP financial statements on a prospective basis, beginning January 1, 2019. |
(2) | Amounts include legal settlement proceeds as detailed in Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 4. |
(3) | Joint venture income includes amounts related to disposition activity as well as amounts earned for the Company's promoted interest. |
(4) | For additional detail, see Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 4. |
(5) | Amounts for the three months and year ended December 31, 2018 include 100% of the gain recognized on the contribution of five operating communities to the NYC Joint Venture in which the Company has retained a 20.0% ownership interest. |
December 31, | December 31, | |||||||
2019 | 2018 | |||||||
Real estate | $ | 21,796,900 | $ | 20,424,325 | ||||
Less accumulated depreciation | (5,164,398 | ) | (4,601,447 | ) | ||||
Net operating real estate | 16,632,502 | 15,822,878 | ||||||
Construction in progress, including land | 1,303,751 | 1,768,132 | ||||||
Land held for development | — | 84,712 | ||||||
For-sale condominium inventory (1) | 457,809 | — | ||||||
Real estate assets held for sale, net | 38,927 | 55,208 | ||||||
Total real estate, net | 18,432,989 | 17,730,930 | ||||||
Cash and cash equivalents | 39,687 | 91,659 | ||||||
Cash in escrow | 87,927 | 126,205 | ||||||
Resident security deposits | 34,224 | 31,816 | ||||||
Investments in unconsolidated real estate entities | 165,806 | 217,432 | ||||||
Other assets | 360,418 | 182,158 | ||||||
Total assets | $ | 19,121,051 | $ | 18,380,200 | ||||
Unsecured notes, net | $ | 6,358,648 | $ | 5,905,993 | ||||
Unsecured credit facility | — | — | ||||||
Notes payable, net | 937,642 | 1,134,270 | ||||||
Resident security deposits | 61,752 | 58,415 | ||||||
Other liabilities | 769,559 | 645,672 | ||||||
Total liabilities | 8,127,601 | 7,744,350 | ||||||
Redeemable noncontrolling interests | 3,252 | 3,244 | ||||||
Equity | 10,990,198 | 10,632,606 | ||||||
Total liabilities and equity | $ | 19,121,051 | $ | 18,380,200 |
Total | Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||||||||
Apartment | December | September | June | March | December | ||||||||||||||||||
Homes | 31, 2019 | 30, 2019 | 30, 2019 | 31, 2019 | 31, 2018 | ||||||||||||||||||
RENTAL REVENUE (2)(3) | |||||||||||||||||||||||
Established | 59,802 | $ | 462,797 | $ | 462,054 | $ | 457,495 | $ | 452,026 | $ | 451,520 | ||||||||||||
Other Stabilized (4) | 10,677 | 77,693 | 75,969 | 72,942 | 69,793 | 70,333 | |||||||||||||||||
Redevelopment | 3,941 | 30,931 | 30,866 | 30,089 | 29,269 | 29,390 | |||||||||||||||||
Development | 8,659 | 18,116 | 12,977 | 7,418 | 3,767 | 2,277 | |||||||||||||||||
Total Consolidated Communities | 83,079 | $ | 589,537 | $ | 581,866 | $ | 567,944 | $ | 554,855 | $ | 553,520 | ||||||||||||
OPERATING EXPENSE (3) | |||||||||||||||||||||||
Established | $ | 127,825 | $ | 134,221 | $ | 130,817 | $ | 126,004 | $ | 124,555 | |||||||||||||
Other Stabilized (4) | 24,449 | 25,507 | 23,611 | 22,341 | 21,598 | ||||||||||||||||||
Redevelopment | 9,558 | 9,862 | 9,459 | 9,242 | 9,230 | ||||||||||||||||||
Development | 6,566 | 5,209 | 3,940 | 2,341 | 1,179 | ||||||||||||||||||
Total Consolidated Communities | $ | 168,398 | $ | 174,799 | $ | 167,827 | $ | 159,928 | $ | 156,562 | |||||||||||||
NOI (5) | |||||||||||||||||||||||
Established | $ | 335,483 | $ | 328,216 | $ | 327,285 | $ | 326,488 | $ | 327,297 | |||||||||||||
Other Stabilized (4) | 53,823 | 51,205 | 49,560 | 47,857 | 45,508 | ||||||||||||||||||
Redevelopment | 21,382 | 21,010 | 20,629 | 20,030 | 20,162 | ||||||||||||||||||
Development | 11,559 | 7,773 | 3,481 | 1,429 | 1,099 | ||||||||||||||||||
Total Consolidated Communities | $ | 422,247 | $ | 408,204 | $ | 400,955 | $ | 395,804 | $ | 394,066 | |||||||||||||
AVERAGE REVENUE PER OCCUPIED HOME (6) | |||||||||||||||||||||||
Established | $ | 2,682 | $ | 2,685 | $ | 2,654 | $ | 2,625 | $ | 2,620 | |||||||||||||
Other Stabilized (4) | $ | 2,640 | $ | 2,648 | $ | 2,653 | $ | 2,613 | $ | 2,610 | |||||||||||||
Redevelopment | $ | 2,772 | $ | 2,756 | $ | 2,681 | $ | 2,645 | $ | 2,640 | |||||||||||||
ECONOMIC OCCUPANCY (6) | |||||||||||||||||||||||
Established | 96.2 | % | 95.9 | % | 96.1 | % | 96.0 | % | 96.1 | % | |||||||||||||
Other Stabilized (4) | 95.1 | % | 95.4 | % | 94.6 | % | 94.4 | % | 94.4 | % | |||||||||||||
Redevelopment | 94.4 | % | 94.7 | % | 94.9 | % | 93.6 | % | 94.2 | % | |||||||||||||
ESTABLISHED COMMUNITIES TURNOVER (7) | |||||||||||||||||||||||
Current year period / Prior year period | 40.1% / 42.2% | 65.3% / 67.4% | 56.5% / 58.1% | 41.6% / 44.2% | 42.2% / 45.2% | ||||||||||||||||||
Current year period YTD / Prior year period YTD | 50.9% / 53.0% | 53.0% / 53.0% |
(1) | Includes consolidated communities and excludes amounts related to communities that have been sold or that are classified as held for sale. |
(2) | Rental revenue excludes non-qualified REIT income and business interruption insurance proceeds. |
(3) | Q4 2018 results have been adjusted to reflect uncollectible lease revenue as a reduction of revenue for comparable presentation to the Q1, Q2, Q3 and Q4 2019 results. See Attachment 15, table 2, for additional detail and reconciliations. |
(4) | Results for these communities for quarters prior to January 1, 2019 may reflect community operations prior to stabilization, including periods of lease-up, such that occupancy levels are below what would be considered stabilized. |
(5) | See Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(6) | For per home rent projections and Economic Occupancy for Development Communities currently under construction and/or completed in Q4 2019, see Attachment 9 - Development Communities. |
(7) | Turnover represents the annualized number of units turned over during the period, divided by the total number of apartment homes for Established Communities for the respective reporting period. |
ESTABLISHED COMMUNITIES LIKE-TERM EFFECTIVE RENT CHANGE (5) | ||||
Q4 2019 | Q4 2018 | |||
New England | 2.6% | 2.9% | ||
Metro NY/NJ | 2.1% | 3.0% | ||
Mid-Atlantic | 2.2% | 2.1% | ||
Pacific NW | 2.3% | 2.1% | ||
No. California | 0.8% | 3.0% | ||
So. California | 1.2% | 2.2% | ||
Total | 1.7% | 2.6% | ||
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) | |||||||||||||||||||||||||||||||||||
% Change incl. Redev (3) | ||||||||||||||||||||||||||||||||||||||
Q4 19 | Q4 18 | % Change | Q4 19 | Q4 18 | % Change | Q4 19 | Q4 18 | % Change | ||||||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||||||
Boston, MA | 7,045 | $ | 2,748 | $ | 2,644 | 3.9 | % | 95.6 | % | 96.1 | % | (0.5 | )% | $ | 55,521 | $ | 53,688 | 3.4 | % | 3.7 | % | |||||||||||||||||
Fairfield, CT | 1,121 | 2,451 | 2,420 | 1.3 | % | 96.9 | % | 96.2 | % | 0.7 | % | 7,988 | 7,828 | 2.0 | % | 1.6 | % | |||||||||||||||||||||
New England | 8,166 | 2,707 | 2,615 | 3.5 | % | 95.8 | % | 96.1 | % | (0.3 | )% | 63,509 | 61,516 | 3.2 | % | 3.4 | % | |||||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||||||
New York City, NY | 3,058 | 3,838 | 3,716 | 3.3 | % | 96.7 | % | 96.4 | % | 0.3 | % | 34,059 | 32,871 | 3.6 | % | 3.5 | % | |||||||||||||||||||||
New York - Suburban | 3,533 | 3,246 | 3,183 | 2.0 | % | 95.3 | % | 96.2 | % | (0.9 | )% | 32,805 | 32,460 | 1.1 | % | 1.2 | % | |||||||||||||||||||||
New Jersey | 4,872 | 2,571 | 2,549 | 0.9 | % | 96.8 | % | 96.5 | % | 0.3 | % | 36,391 | 35,967 | 1.2 | % | 1.5 | % | |||||||||||||||||||||
Metro NY/NJ | 11,463 | 3,117 | 3,056 | 2.0 | % | 96.3 | % | 96.4 | % | (0.1 | )% | 103,255 | 101,298 | 1.9 | % | 2.1 | % | |||||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 11,232 | 2,279 | 2,213 | 3.0 | % | 96.2 | % | 96.2 | % | 0.0 | % | 73,858 | 71,740 | 3.0 | % | 3.5 | % | |||||||||||||||||||||
Mid-Atlantic | 11,232 | 2,279 | 2,213 | 3.0 | % | 96.2 | % | 96.2 | % | 0.0 | % | 73,858 | 71,740 | 3.0 | % | 3.5 | % | |||||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||||||
Seattle, WA | 4,116 | 2,379 | 2,340 | 1.7 | % | 96.2 | % | 95.7 | % | 0.5 | % | 28,266 | 27,648 | 2.2 | % | 2.6 | % | |||||||||||||||||||||
Pacific Northwest | 4,116 | 2,379 | 2,340 | 1.7 | % | 96.2 | % | 95.7 | % | 0.5 | % | 28,266 | 27,648 | 2.2 | % | 2.6 | % | |||||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||||||
San Jose, CA | 3,535 | 3,185 | 3,061 | 4.1 | % | 96.1 | % | 95.9 | % | 0.2 | % | 32,466 | 31,137 | 4.3 | % | 4.0 | % | |||||||||||||||||||||
Oakland-East Bay, CA | 3,252 | 2,633 | 2,597 | 1.4 | % | 96.6 | % | 96.0 | % | 0.6 | % | 24,812 | 24,315 | 2.0 | % | 2.3 | % | |||||||||||||||||||||
San Francisco, CA | 3,349 | 3,541 | 3,504 | 1.1 | % | 96.3 | % | 96.0 | % | 0.3 | % | 34,270 | 33,788 | 1.4 | % | 1.4 | % | |||||||||||||||||||||
Northern California | 10,136 | 3,126 | 3,059 | 2.2 | % | 96.3 | % | 95.9 | % | 0.4 | % | 91,548 | 89,240 | 2.6 | % | 2.6 | % | |||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Los Angeles, CA | 9,802 | 2,510 | 2,459 | 2.1 | % | 96.0 | % | 95.9 | % | 0.1 | % | 70,892 | 69,397 | 2.2 | % | 2.9 | % | |||||||||||||||||||||
Orange County, CA | 2,821 | 2,238 | 2,194 | 2.0 | % | 96.1 | % | 95.7 | % | 0.4 | % | 18,197 | 17,765 | 2.4 | % | 3.7 | % | |||||||||||||||||||||
San Diego, CA | 2,066 | 2,216 | 2,169 | 2.2 | % | 96.6 | % | 96.0 | % | 0.6 | % | 13,272 | 12,916 | 2.8 | % | 2.8 | % | |||||||||||||||||||||
Southern California | 14,689 | 2,417 | 2,368 | 2.1 | % | 96.1 | % | 95.9 | % | 0.2 | % | 102,361 | 100,078 | 2.3 | % | 3.0 | % | |||||||||||||||||||||
Total Established | 59,802 | $ | 2,682 | $ | 2,620 | 2.4 | % | 96.2 | % | 96.1 | % | 0.1 | % | $ | 462,797 | $ | 451,520 | 2.5 | % | (4) | 2.8 | % |
(1) | Established Communities are communities with Stabilized Operations as of January 1, 2018 such that a comparison of Q4 2018 to Q4 2019 is meaningful. Q4 2018 operating results for Established Communities have been adjusted to reflect uncollectible lease revenue as a reduction of revenue for comparable presentation to Q4 2019 operating results. See Attachment 15, table 1, for additional detail and a reconciliation. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | Represents the change in rental revenue if the Company were to include planned, current and previously completed Redevelopment Communities, excluding those with operations impacted by a casualty loss, as part of its Established Communities portfolio. |
(4) | With concessions reflected on a cash basis, rental revenue from Established Communities increased 2.4% from Q4 2018 to Q4 2019. See Attachment 15, table 10, for additional detail and a reconciliation. With uncollectible lease revenue included as a component of operating expenses instead of as an adjustment to revenue, rental revenue from Established Communities would have increased 2.7%. See Attachment 15, table 1, for additional detail and a reconciliation. |
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) | |||||||||||||||||||||||||||||||||||
% Change incl. Redev (3) | ||||||||||||||||||||||||||||||||||||||
Q4 19 | Q3 19 | % Change | Q4 19 | Q3 19 | % Change | Q4 19 | Q3 19 | % Change | ||||||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||||||
Boston, MA | 7,045 | $ | 2,748 | $ | 2,729 | 0.7 | % | 95.6 | % | 96.0 | % | (0.4 | )% | $ | 55,521 | $ | 55,370 | 0.3 | % | 0.1 | % | |||||||||||||||||
Fairfield, CT | 1,121 | 2,451 | 2,449 | 0.1 | % | 96.9 | % | 95.8 | % | 1.1 | % | 7,988 | 7,892 | 1.2 | % | 0.7 | % | |||||||||||||||||||||
New England | 8,166 | 2,707 | 2,691 | 0.6 | % | 95.8 | % | 96.0 | % | (0.2 | )% | 63,509 | 63,262 | 0.4 | % | 0.2 | % | |||||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||||||
New York City, NY | 3,058 | 3,838 | 3,803 | 0.9 | % | 96.7 | % | 96.5 | % | 0.2 | % | 34,059 | 33,682 | 1.1 | % | 0.9 | % | |||||||||||||||||||||
New York - Suburban | 3,533 | 3,246 | 3,271 | (0.8 | )% | 95.3 | % | 95.7 | % | (0.4 | )% | 32,805 | 33,178 | (1.1 | )% | (1.3 | )% | |||||||||||||||||||||
New Jersey | 4,872 | 2,571 | 2,608 | (1.4 | )% | 96.8 | % | 95.9 | % | 0.9 | % | 36,391 | 36,554 | (0.4 | )% | (0.4 | )% | |||||||||||||||||||||
Metro NY/NJ | 11,463 | 3,117 | 3,131 | (0.4 | )% | 96.3 | % | 96.0 | % | 0.3 | % | 103,255 | 103,414 | (0.2 | )% | (0.2 | )% | |||||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 11,232 | 2,279 | 2,278 | 0.0 | % | 96.2 | % | 96.2 | % | 0.0 | % | 73,858 | 73,845 | 0.0 | % | 0.1 | % | |||||||||||||||||||||
Mid-Atlantic | 11,232 | 2,279 | 2,278 | 0.0 | % | 96.2 | % | 96.2 | % | 0.0 | % | 73,858 | 73,845 | 0.0 | % | 0.1 | % | |||||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||||||
Seattle, WA | 4,116 | 2,379 | 2,406 | (1.1 | )% | 96.2 | % | 95.9 | % | 0.3 | % | 28,266 | 28,481 | (0.8 | )% | (0.5 | )% | |||||||||||||||||||||
Pacific Northwest | 4,116 | 2,379 | 2,406 | (1.1 | )% | 96.2 | % | 95.9 | % | 0.3 | % | 28,266 | 28,481 | (0.8 | )% | (0.5 | )% | |||||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||||||
San Jose, CA | 3,535 | 3,185 | 3,192 | (0.2 | )% | 96.1 | % | 96.2 | % | (0.1 | )% | 32,466 | 32,573 | (0.3 | )% | (0.3 | )% | |||||||||||||||||||||
Oakland-East Bay, CA | 3,252 | 2,633 | 2,634 | 0.0 | % | 96.6 | % | 95.9 | % | 0.7 | % | 24,812 | 24,640 | 0.7 | % | 0.7 | % | |||||||||||||||||||||
San Francisco, CA | 3,349 | 3,541 | 3,549 | (0.2 | )% | 96.3 | % | 95.9 | % | 0.4 | % | 34,270 | 34,210 | 0.2 | % | 0.2 | % | |||||||||||||||||||||
Northern California | 10,136 | 3,126 | 3,131 | (0.2 | )% | 96.3 | % | 96.0 | % | 0.3 | % | 91,548 | 91,423 | 0.1 | % | 0.2 | % | |||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Los Angeles, CA | 9,802 | 2,510 | 2,509 | 0.0 | % | 96.0 | % | 95.5 | % | 0.5 | % | 70,892 | 70,461 | 0.6 | % | 0.8 | % | |||||||||||||||||||||
Orange County, CA | 2,821 | 2,238 | 2,234 | 0.2 | % | 96.1 | % | 95.3 | % | 0.8 | % | 18,197 | 18,023 | 1.0 | % | 1.1 | % | |||||||||||||||||||||
San Diego, CA | 2,066 | 2,216 | 2,208 | 0.4 | % | 96.6 | % | 96.0 | % | 0.6 | % | 13,272 | 13,145 | 1.0 | % | 1.0 | % | |||||||||||||||||||||
Southern California | 14,689 | 2,417 | 2,414 | 0.1 | % | 96.1 | % | 95.5 | % | 0.6 | % | 102,361 | 101,629 | 0.7 | % | 0.9 | % | |||||||||||||||||||||
Total Established | 59,802 | $ | 2,682 | $ | 2,685 | (0.1 | )% | 96.2 | % | 95.9 | % | 0.3 | % | $ | 462,797 | $ | 462,054 | 0.2 | % | (4) | 0.2 | % |
(1) | Established Communities are communities with Stabilized Operations as of January 1, 2018. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | Represents the change in rental revenue if the Company were to include planned, current and previously completed Redevelopment Communities, excluding those with operations impacted by a casualty loss, as part of its Established Communities portfolio. |
(4) | With uncollectible lease revenue included as a component of operating expenses instead of as an adjustment to revenue, rental revenue from Established Communities would have increased 0.3%. See Attachment 15, table 1, for additional detail and a reconciliation. |
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) | |||||||||||||||||||||||||||||||||||
Full Year 2019 | Full Year 2018 | % Change | Full Year 2019 | Full Year 2018 | % Change | Full Year 2019 | Full Year 2018 | % Change | % Change incl. Redev (3) | |||||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||||||
Boston, MA | 7,045 | $ | 2,699 | $ | 2,602 | 3.7 | % | 95.6 | % | 95.9 | % | (0.3 | )% | $ | 218,020 | $ | 210,896 | 3.4 | % | 3.7 | % | |||||||||||||||||
Fairfield, CT | 1,121 | 2,429 | 2,402 | 1.1 | % | 96.4 | % | 96.7 | % | (0.3 | )% | 31,495 | 31,231 | 0.8 | % | 0.9 | % | |||||||||||||||||||||
New England | 8,166 | 2,662 | 2,575 | 3.4 | % | 95.7 | % | 96.0 | % | (0.3 | )% | 249,515 | 242,127 | 3.1 | % | 3.3 | % | |||||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||||||
New York City, NY | 3,058 | 3,789 | 3,672 | 3.2 | % | 96.3 | % | 96.1 | % | 0.2 | % | 133,843 | 129,453 | 3.4 | % | 2.9 | % | |||||||||||||||||||||
New York - Suburban | 3,533 | 3,242 | 3,140 | 3.2 | % | 95.6 | % | 96.3 | % | (0.7 | )% | 131,411 | 128,144 | 2.5 | % | 2.7 | % | |||||||||||||||||||||
New Jersey | 4,872 | 2,573 | 2,532 | 1.6 | % | 96.6 | % | 96.3 | % | 0.3 | % | 145,249 | 142,608 | 1.9 | % | 2.1 | % | |||||||||||||||||||||
Metro NY/NJ | 11,463 | 3,104 | 3,024 | 2.6 | % | 96.2 | % | 96.2 | % | 0.0 | % | 410,503 | 400,205 | 2.6 | % | 2.6 | % | |||||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 11,232 | 2,256 | 2,195 | 2.8 | % | 96.2 | % | 96.0 | % | 0.2 | % | 292,691 | 284,131 | 3.0 | % | 3.1 | % | |||||||||||||||||||||
Mid-Atlantic | 11,232 | 2,256 | 2,195 | 2.8 | % | 96.2 | % | 96.0 | % | 0.2 | % | 292,691 | 284,131 | 3.0 | % | 3.1 | % | |||||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||||||
Seattle, WA | 4,116 | 2,368 | 2,284 | 3.7 | % | 96.2 | % | 96.2 | % | 0.0 | % | 112,553 | 108,549 | 3.7 | % | 3.6 | % | |||||||||||||||||||||
Pacific Northwest | 4,116 | 2,368 | 2,284 | 3.7 | % | 96.2 | % | 96.2 | % | 0.0 | % | 112,553 | 108,549 | 3.7 | % | 3.6 | % | |||||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||||||
San Jose, CA | 3,535 | 3,156 | 3,018 | 4.6 | % | 96.3 | % | 96.6 | % | (0.3 | )% | 128,971 | 123,709 | 4.3 | % | 4.3 | % | |||||||||||||||||||||
Oakland-East Bay, CA | 3,252 | 2,620 | 2,577 | 1.7 | % | 96.2 | % | 96.2 | % | 0.0 | % | 98,360 | 96,756 | 1.7 | % | 2.1 | % | |||||||||||||||||||||
San Francisco, CA | 3,349 | 3,530 | 3,422 | 3.2 | % | 96.0 | % | 96.3 | % | (0.3 | )% | 136,223 | 132,414 | 2.9 | % | 2.9 | % | |||||||||||||||||||||
Northern California | 10,136 | 3,107 | 3,011 | 3.2 | % | 96.2 | % | 96.4 | % | (0.2 | )% | 363,554 | 352,879 | 3.0 | % | 3.1 | % | |||||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||||||
Los Angeles, CA | 9,802 | 2,495 | 2,417 | 3.2 | % | 95.8 | % | 96.0 | % | (0.2 | )% | 281,153 | 272,848 | 3.0 | % | 3.7 | % | |||||||||||||||||||||
Orange County, CA | 2,821 | 2,218 | 2,167 | 2.4 | % | 96.1 | % | 95.7 | % | 0.4 | % | 72,156 | 70,190 | 2.8 | % | 2.3 | % | |||||||||||||||||||||
San Diego, CA | 2,066 | 2,198 | 2,148 | 2.3 | % | 95.9 | % | 96.2 | % | (0.3 | )% | 52,247 | 51,199 | 2.0 | % | 2.0 | % | |||||||||||||||||||||
Southern California | 14,689 | 2,400 | 2,330 | 3.0 | % | 95.9 | % | 96.0 | % | (0.1 | )% | 405,556 | 394,237 | 2.9 | % | 3.3 | % | |||||||||||||||||||||
Total Established | 59,802 | $ | 2,661 | $ | 2,584 | 3.0 | % | 96.0 | % | 96.1 | % | (0.1 | )% | $ | 1,834,372 | $ | 1,782,128 | 2.9 | % | (4) | 3.1 | % |
(1) | Established Communities are communities with Stabilized Operations as of January 1, 2018 such that a comparison of full year 2018 to full year 2019 is meaningful. Full year 2018 operating results for Established Communities have been adjusted to reflect uncollectible lease revenue as a reduction of revenue for comparable presentation to full year 2019 operating results. See Attachment 15, table 1, for additional detail and a reconciliation. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | Represents the change in rental revenue if the Company were to include planned, current and previously completed Redevelopment Communities, excluding those with operations impacted by a casualty loss, as part of its Established Communities portfolio. |
(4) | With concessions reflected on a cash basis, rental revenue from Established Communities increased 2.8% between years. See Attachment 15, table 10, for additional detail and a reconciliation. With uncollectible lease revenue included as a component of operating expenses instead of as an adjustment to revenue, rental revenue from Established Communities would have remained consistent with an increase of 2.9%. See Attachment 15, table 1, for additional detail and a reconciliation. |
Q4 2019 | Q4 2018 | % Change | Q4 2019 % of Total Opex | Full Year 2019 | Full Year 2018 | % Change | Full Year 2019 % of Total Opex | |||||||||||||||||||||
Property taxes (2) | $ | 49,456 | $ | 46,444 | 6.5 | % | 38.7 | % | $ | 192,817 | $ | 186,714 | 3.3 | % | 37.2 | % | ||||||||||||
Payroll (3) | 28,543 | 28,544 | — | % | 22.3 | % | 118,541 | 116,126 | 2.1 | % | 22.8 | % | ||||||||||||||||
Repairs & maintenance (4) | 19,415 | 21,003 | (7.6 | )% | 15.2 | % | 85,917 | 83,462 | 2.9 | % | 16.6 | % | ||||||||||||||||
Utilities (5) | 11,658 | 11,007 | 5.9 | % | 9.1 | % | 47,129 | 47,224 | (0.2 | )% | 9.1 | % | ||||||||||||||||
Office operations (6) | 10,829 | 10,173 | 6.4 | % | 8.5 | % | 41,258 | 40,656 | 1.5 | % | 7.9 | % | ||||||||||||||||
Insurance (7) | 5,477 | 3,857 | 42.0 | % | 4.3 | % | 21,674 | 18,442 | 17.5 | % | 4.2 | % | ||||||||||||||||
Marketing (8) | 2,447 | 3,527 | (30.6 | )% | 1.9 | % | 11,531 | 12,166 | (5.2 | )% | 2.2 | % | ||||||||||||||||
Total Established Communities Operating Expenses | $ | 127,825 | $ | 124,555 | 2.6 | % | 100.0 | % | $ | 518,867 | $ | 504,790 | 2.8 | % | 100.0 | % |
(1) | Operating expenses for Established Communities exclude indirect costs for corporate-level property management and other support-related expenses. For comparability purposes, Q4 and Full Year 2019 results have been adjusted to present uncollectible lease revenue as a reduction of revenue. Had uncollectible lease revenue been presented as a component of office operations, total Established Communities operating expenses would have increased 3.3% and 2.6% during the three and twelve months ended December 31, 2019, respectively, as compared to the prior year periods. See Attachment 15, table 1, for additional detail and a reconciliation. |
(2) | Property taxes increased for the three and twelve months ended December 31, 2019 over the prior year periods primarily due to increased assessments and rates in the Company's East Coast markets, as well as successful appeals in the Company's Pacific Northwest market in the prior year periods, partially offset by decreased tax rates in the Pacific Northwest. The increase for the twelve months ended December 31, 2019 is also partially offset by a successful appeal in Northern California in the current year period. |
(3) | Payroll costs increased for the twelve months ended December 31, 2019 over the prior year periods primarily due to merit increases in associate compensation and increased benefits costs, partially offset by decreased bonuses and a reduction in the number of on-site leasing and management associates. |
(4) | Repairs and maintenance decreased for the three months ended December 31, 2019 from the prior year period primarily due to timing and decreased spending for various maintenance projects and decreased turnover costs. |
(5) | Utilities represents aggregate utility costs, net of resident reimbursements. The increase for the three months ended December 31, 2019 over the prior year period is primarily due to increased water taxes in Southern California, an increase in costs for gas due to climate credits in Southern California received in the prior year period, and electricity costs resulting from increased rates. The decrease for the twelve months ended December 31, 2019 from the prior year period is primarily due to a decrease in electric consumption resulting from the Company's solar and lighting sustainability initiatives, increased recoveries for water submetering and a decrease in costs for gas from the receipt of climate credits in Southern California. |
(6) | Office operations includes administrative costs, land lease expense and association and license fees. Refer to (1) above for discussion of uncollectible lease revenue. The increases for the three and twelve months ended December 31, 2019 over the prior year periods are primarily due to an increase in legal costs, temporary help and third party security costs and association fees. The increase for the twelve months ended December 31, 2019 is also due to an increase in land lease costs, partially offset by a decrease in government license fees. |
(7) | Insurance costs consist of premiums, expected claims activity and associated reductions from receipt of claims recoveries. The increases for the three and twelve months ended December 31, 2019 over the prior year periods are primarily due to recoveries in the prior year periods, the timing of claims and increased property insurance premiums and deductibles. Insurance costs can be variable due to the amounts and timing of estimated and actual claim activity and the related recoveries received. |
(8) | Marketing costs decreased for the three and twelve months ended December 31, 2019 from the prior year periods primarily due to decreased customer service incentives and internet advertising costs in the current year periods, as well as other initiatives related to centralized lead management. |
Full Year 2019 Maintenance Expensed Per Home | Categorization of Full Year 2019 Additional Capitalized Value (2) | ||||||||||||||||||||||||||||||||||||||
Current Communities | Apartment Homes (1) | Carpet Replacement | Other Maintenance (3) | Total | Acquisitions, Construction, Redevelopment & Dispositions (4) | NOI Enhancing (5)(6) | Asset Preservation | 2019 Additional Capitalized Value | NOI Enhancing Per Home (6) | Asset Preservation Per Home | |||||||||||||||||||||||||||||
Established Communities | 59,802 | $ | 141 | $ | 2,278 | $ | 2,419 | $ | — | $ | 42,204 | $ | 86,120 | $ | 128,324 | $ | 706 | $ | 1,440 | ||||||||||||||||||||
Other Stabilized Communities | 10,677 | 57 | 2,247 | 2,304 | 408,340 | (7) | 1,326 | 3,165 | 412,831 | $ | 124 | $ | 296 | ||||||||||||||||||||||||||
Redevelopment Communities (8) | 3,941 | 90 | 2,486 | 2,576 | 76,274 | — | — | 76,274 | — | — | |||||||||||||||||||||||||||||
Development Communities (8)(9) | 8,659 | 2 | 462 | 464 | 577,004 | — | — | 577,004 | — | — | |||||||||||||||||||||||||||||
Dispositions | — | — | — | — | (282,765 | ) | — | — | (282,765 | ) | — | — | |||||||||||||||||||||||||||
Total | 83,079 | $ | 113 | $ | 2,095 | $ | 2,208 | $ | 778,853 | $ | 43,530 | $ | 89,285 | $ | 911,668 | N/A | N/A |
(1) | Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale. |
(2) | Policy is to capitalize expenditures for the acquisition or development of new assets or expenditures that extend the life of existing assets that will benefit the Company for periods greater than a year. |
(3) | Other maintenance includes maintenance, landscaping and redecorating costs, as well as maintenance related payroll expense. |
(4) | Includes the write-off of impaired assets and additional capitalized spend related to recognized casualty losses, if applicable. |
(5) | Includes $547 in rebates received during the year ended December 31, 2019, primarily related to NOI Enhancing Capex incurred during 2018. |
(6) | This Attachment excludes capitalized expenditures for the retail component of communities, which the Company classifies as NOI Enhancing. Established Communities and Other Stabilized Communities exclude $1,813 and $306, respectively, related to retail space. |
(7) | Represents acquired communities, including those from joint venture partners, coupled with commitment close-outs and construction true-ups on recently constructed communities. |
(8) | Represents communities that were under construction/reconstruction during the period, including communities where construction/reconstruction has been completed. |
(9) | Includes amounts spent for The Park Loggia. |
Other Capitalized Costs | ||||||
Interest | Overhead | |||||
Q1 2019 | $ | 17,589 | $ | 11,775 | ||
Q2 2019 | $ | 17,127 | $ | 12,605 | ||
Q3 2019 | $ | 15,443 | $ | 12,538 | ||
Q4 2019 | $ | 12,664 | $ | 11,250 | ||
Community Information | Number | Total | Schedule | % | % | % | % | ||||||||||||||||||||||||||||
of | Capital | Full Qtr | Avg Rent | Complete | Leased | Occupied | Economic | ||||||||||||||||||||||||||||
Apt | Cost | Initial | Stabilized | Per | Occ. | ||||||||||||||||||||||||||||||
Development Name | Location | Homes | (millions) | Start | Occupancy | Complete | Ops | Home | As of January 13, 2020 | Q4 '19 | |||||||||||||||||||||||||
Communities Under Construction: | |||||||||||||||||||||||||||||||||||
1. | Avalon Teaneck | Teaneck, NJ | 248 | $ | 73 | Q4 2016 | Q2 2019 | Q1 2020 | Q2 2020 | $ | 2,545 | 100 | % | 85 | % | 79 | % | 59 | % | ||||||||||||||||
2. | Avalon North Creek | Bothell, WA | 316 | 84 | Q4 2017 | Q2 2019 | Q1 2020 | Q2 2020 | 1,965 | 100 | % | 85 | % | 79 | % | 56 | % | ||||||||||||||||||
3. | Avalon Norwood | Norwood, MA | 198 | 61 | Q2 2018 | Q3 2019 | Q1 2020 | Q3 2020 | 2,480 | 79 | % | 70 | % | 55 | % | 32 | % | ||||||||||||||||||
4. | Avalon Public Market | Emeryville, CA | 289 | 175 | Q4 2016 | Q3 2019 | Q3 2020 | Q4 2020 | 3,605 | 52 | % | 54 | % | 42 | % | 38 | % | ||||||||||||||||||
5. | Avalon Yonkers | Yonkers, NY | 590 | 189 | Q4 2017 | Q3 2019 | Q4 2020 | Q2 2021 | 2,860 | 27 | % | 25 | % | 21 | % | 15 | % | ||||||||||||||||||
6. | AVA Hollywood (1) | Hollywood, CA | 695 | 373 | Q4 2016 | Q4 2019 | Q4 2020 | Q1 2021 | 3,380 | 20 | % | 17 | % | 12 | % | 5 | % | ||||||||||||||||||
7. | Avalon Towson | Towson, MD | 371 | 114 | Q4 2017 | Q1 2020 | Q4 2020 | Q2 2021 | 2,065 | — | — | — | — | ||||||||||||||||||||||
8. | Avalon Walnut Creek II | Walnut Creek, CA | 200 | 111 | Q4 2017 | Q1 2020 | Q3 2020 | Q1 2021 | 3,465 | — | — | — | — | ||||||||||||||||||||||
9. | Avalon Doral | Doral, FL | 350 | 114 | Q2 2018 | Q2 2020 | Q3 2020 | Q3 2021 | 2,275 | — | — | — | — | ||||||||||||||||||||||
10. | Avalon East Harbor | Baltimore, MD | 400 | 139 | Q3 2018 | Q3 2020 | Q3 2021 | Q4 2021 | 2,615 | — | — | — | — | ||||||||||||||||||||||
11. | Avalon Old Bridge | Old Bridge, NJ | 252 | 66 | Q3 2018 | Q2 2020 | Q1 2021 | Q3 2021 | 2,355 | — | — | — | — | ||||||||||||||||||||||
12. | Avalon Newcastle Commons II | Newcastle, WA | 293 | 106 | Q4 2018 | Q3 2020 | Q2 2021 | Q4 2021 | 2,460 | — | — | — | — | ||||||||||||||||||||||
13. | Twinbrook Station | Rockville, MD | 238 | 66 | Q4 2018 | Q3 2020 | Q1 2021 | Q3 2021 | 1,710 | — | — | — | — | ||||||||||||||||||||||
14. | Avalon Harrison (1) | Harrison, NY | 143 | 76 | Q4 2018 | Q1 2021 | Q1 2022 | Q2 2022 | 3,780 | — | — | — | — | ||||||||||||||||||||||
15. | Avalon Brea Place | Brea, CA | 653 | 290 | Q2 2019 | Q1 2021 | Q2 2022 | Q3 2022 | 2,785 | — | — | — | — | ||||||||||||||||||||||
16. | Avalon Foundry Row | Owings Mills, MD | 437 | 100 | Q2 2019 | Q1 2021 | Q1 2022 | Q3 2022 | 1,805 | — | — | — | — | ||||||||||||||||||||||
17. | Avalon Marlborough II | Marlborough, MA | 123 | 42 | Q2 2019 | Q2 2020 | Q4 2020 | Q1 2021 | 2,465 | — | — | — | — | ||||||||||||||||||||||
18. | Avalon Acton II | Acton, MA | 86 | 31 | Q4 2019 | Q3 2020 | Q4 2020 | Q1 2021 | 2,610 | — | — | — | — | ||||||||||||||||||||||
19. | Avalon Woburn | Woburn, MA | 350 | 121 | Q4 2019 | Q3 2021 | Q2 2022 | Q3 2022 | 2,610 | — | — | — | — | ||||||||||||||||||||||
20. | AVA RiNo | Denver, CO | 246 | 87 | Q4 2019 | Q1 2022 | Q2 2022 | Q4 2022 | 2,230 | — | — | — | — | ||||||||||||||||||||||
21. | Avalon Monrovia | Monrovia, CA | 154 | 68 | Q4 2019 | Q1 2021 | Q3 2021 | Q4 2021 | 3,010 | — | — | — | — | ||||||||||||||||||||||
22. | Avalon Alderwood Mall (2) | Lynnwood, WA | 328 | 110 | Q4 2019 | Q3 2021 | Q2 2022 | Q3 2022 | 2,295 | — | — | — | — | ||||||||||||||||||||||
Communities Under Construction Subtotal / Weighted Average | |||||||||||||||||||||||||||||||||||
6,960 | $ | 2,596 | $ | 2,615 | |||||||||||||||||||||||||||||||
Communities Completed this Quarter: | |||||||||||||||||||||||||||||||||||
1. | Avalon Boonton | Boonton, NJ | 350 | $ | 93 | Q3 2016 | Q1 2019 | Q4 2019 | Q2 2020 | $ | 2,505 | 100 | % | 91 | % | 91 | % | 80 | % | ||||||||||||||||
2. | Avalon Belltown Towers (1) (3) | Seattle, WA | 274 | 147 | Q4 2016 | Q2 2019 | Q4 2019 | Q3 2020 | $ | 3,470 | 100 | % | 62 | % | 58 | % | 55 | % | |||||||||||||||||
3. | Avalon Saugus (1) | Saugus, MA | 280 | 93 | Q2 2018 | Q2 2019 | Q4 2019 | Q3 2020 | $ | 2,415 | 100 | % | 69 | % | 64 | % | 55 | % | |||||||||||||||||
Communities Completed Subtotal / Weighted Average | 904 | $ | 333 | $ | 2,770 | ||||||||||||||||||||||||||||||
Total/Weighted Average Under Construction and Completed this quarter | 7,864 | $ | 2,929 | $ | 2,630 | ||||||||||||||||||||||||||||||
Total Weighted Average Projected NOI as a % of Total Capital Cost | 5.9% | ||||||||||||||||||||||||||||||||||
Asset Cost Basis (millions) (4)(5): | |||||||||||||||||||||||||||||||||||
Total Capital Cost, under construction and completed | $ | 3,592 | |||||||||||||||||||||||||||||||||
Total Capital Cost, disbursed to date | (2,559 | ) | |||||||||||||||||||||||||||||||||
Total Capital Cost, remaining to invest | $ | 1,033 |
(1) | Developments containing at least 10,000 square feet of retail space include AVA Hollywood (19,000 sf), Avalon Harrison (27,000 sf), Avalon Belltown Towers (11,000 sf), and Avalon Saugus (23,000 sf). |
(2) | The Company is developing this project through an unconsolidated joint venture, in which the Company owns a 50.0% interest. Total Capital Cost is for the venture and total weighted average Projected NOI as a percent of Total Capital Cost excludes this venture. |
(3) | Leased and occupied metrics exclude 20% of the apartment homes, which have been leased on a temporary basis to a third-party hotel operator effective August 2019. |
(4) | Includes the communities presented and The Park Loggia, which contains 172 for-sale residential condominiums and 67,000 square feet of retail space, and was developed for a Total Capital Cost of $626,000,000. The Company completed the first residential condominiums and initial retail space in Q2 2019, with full completion in Q4 2019. The Company is proceeding with the sale of the residential condominiums and commenced closings in 2020. |
(5) | Includes the communities presented and one additional community with 323 apartment homes representing $91 million in Total Capital Costs which has completed construction but not yet achieved Stabilized Operations for the full quarter. Q4 2019 NOI for these communities was $6 million. Additionally, Q4 2019 NOI for the retail portion of The Park Loggia was $1 million. |
DEVELOPMENT RIGHTS |
Estimated | Total Capital | |||||||||
# of Rights | Number | Cost | ||||||||
of Homes | (millions) | |||||||||
Development Rights as of 12/31/2018 | 28 | 9,769 | $ | 4,124 | ||||||
Q1, Q2, & Q3 2019 | ||||||||||
Q1, Q2, & Q3 Additions | 9 | 2,463 | $ | 773 | ||||||
Q1, Q2, & Q3 Construction starts | (3 | ) | (1,213 | ) | (432 | ) | ||||
Q1, Q2, & Q3 Adjustments to existing Development Rights | (3 | ) | (1,025 | ) | (248 | ) | ||||
Development Rights as of 9/30/2019 | 31 | 9,994 | $ | 4,217 | ||||||
Q4 2019 | ||||||||||
Q4 2019 Additions | 2 | 1,009 | $ | 382 | ||||||
Q4 2019 Construction starts | (5 | ) | (1,164 | ) | (417 | ) | ||||
Q4 2019 Adjustments to existing Development Rights | (1 | ) | (252 | ) | 35 | |||||
Development Rights as of 12/31/2019 | 27 | 9,587 | $ | 4,217 | ||||||
Current Development Rights by Region as of December 31, 2019 | ||||||||||
New England | 3 | 424 | $ | 164 | ||||||
Metro NY/NJ | 12 | 5,171 | 2,260 | |||||||
Mid-Atlantic | — | — | — | |||||||
Pacific Northwest | 3 | 1,223 | 446 | |||||||
Northern California | 4 | 1,198 | 714 | |||||||
Southern California | 2 | 637 | 326 | |||||||
Southeast Florida | 1 | 254 | 99 | |||||||
Denver | 2 | 680 | 208 | |||||||
27 | 9,587 | $ | 4,217 | |||||||
Current Development Rights by Classification as of December 31, 2019 | ||||||||||
Conventional | 20 | 6,270 | $ | 2,273 | ||||||
Asset Densification | 5 | 1,907 | 959 | |||||||
Public-Private Partnership | 2 | 1,410 | 985 | |||||||
27 | 9,587 | $ | 4,217 |
Select Operating Information | ||||||||||||||||||||||||||||||||||
Company | Number of | NOI (2)(3) | Disposition Gains and Other Activity (2)(4) | Debt | ||||||||||||||||||||||||||||||
Unconsolidated Real Estate | Number of | Ownership | Apartment | Q4 | Full Year | Q4 | Full Year | Principal | Interest | |||||||||||||||||||||||||
Investments (1) | Communities | Percentage | Homes | 2019 | 2019 | 2019 | 2019 | Amount (2) | Rate (5) | |||||||||||||||||||||||||
NYTA MF Investors LLC | 5 | 20.0 | % | 1,301 | $ | 10,809 | $ | 39,299 | $ | — | $ | — | $ | 395,939 | 3.88 | % | ||||||||||||||||||
U.S. Fund | 4 | 28.6 | % | 741 | 4,379 | 20,384 | 21,748 | 21,748 | 150,916 | 3.58 | % | |||||||||||||||||||||||
Multifamily Partners AC JV LP (the “AC JV”) | 2 | 20.0 | % | 529 | 3,642 | 13,673 | — | — | 111,653 | (6) | 6.00 | % | ||||||||||||||||||||||
MVP I, LLC | 1 | 25.0 | % | 313 | 3,021 | 11,704 | — | — | 103,000 | 3.24 | % | |||||||||||||||||||||||
Brandywine Apartments of Maryland, LLC | 1 | 28.7 | % | 305 | 632 | 2,887 | — | — | 21,610 | 3.40 | % | |||||||||||||||||||||||
Total Unconsolidated Real Estate Investments | 13 | 3,189 | $ | 22,483 | $ | 87,947 | $ | 21,748 | $ | 21,748 | $ | 783,118 | 4.03 | % |
(1) | Excludes development joint ventures. |
(2) | NOI, outstanding indebtedness and disposition gains and other activity are presented at 100% ownership. |
(3) | NOI includes $435 and $5,068 in Q4 and full year 2019, respectively, from one U.S. Fund community and the adjacent marina disposed of during the year ended December 31, 2019. NOI excludes $1,385 and $6,250 in Q4 and full year 2019, respectively, from North Point II JV, LP. During 2019, the Company acquired its partner's 45% interest in the venture that owned AVA North Point, a 265 apartment home community located in Cambridge, MA, and now consolidates the community. NOI excludes property management fees as the Company serves as the property management company for all ventures except Brandywine Apartments of Maryland, LLC. |
(4) | Disposition gains and other activity is composed primarily of gains on disposition of unconsolidated real estate investments, of which the Company's portion is included in joint venture income as presented on Attachment 1 - Condensed Consolidated Operating Information. The Company's portion of income from disposition gains and other activity for Q4 and full year 2019 was $5,788, related to a disposition by the U.S. Fund. The Company's portion of income from disposition gains and other activity for Q4 and full year 2018 was $2,019 and $10,655, respectively, related to dispositions by the U.S. Fund and the AC JV. |
(5) | Represents the weighted average interest rate as of December 31, 2019. |
(6) | Borrowing is comprised of loans made by the equity investors in the venture in proportion to their equity interests. |
DEBT COMPOSITION AND MATURITIES | ||||||||||||||||||||
Average Interest Rate (1) | Principal Amortization Payments and Maturities (2) | |||||||||||||||||||
Debt Composition | Amount | Year | Secured notes amortization and maturities | Unsecured notes maturities | Total | |||||||||||||||
Secured notes | 2020 | $ | 127,511 | $ | 400,000 | $ | 527,511 | |||||||||||||
Fixed rate | $ | 479,221 | 3.9 | % | 2021 | 37,148 | 550,000 | 587,148 | ||||||||||||
Variable rate | 476,150 | 3.2 | % | 2022 | 9,918 | 550,000 | 559,918 | |||||||||||||
Subtotal, secured notes | 955,371 | 3.5 | % | 2023 | 10,739 | 600,000 | 610,739 | |||||||||||||
2024 | 11,577 | 450,000 | 461,577 | |||||||||||||||||
Unsecured notes | 2025 | 12,508 | 825,000 | 837,508 | ||||||||||||||||
Fixed rate | 5,850,000 | 3.7 | % | 2026 | 13,545 | 775,000 | 788,545 | |||||||||||||
Variable rate | 550,000 | 2.7 | % | 2027 | 200,080 | 400,000 | 600,080 | |||||||||||||
Subtotal, unsecured notes | 6,400,000 | 3.6 | % | 2028 | 20,607 | 450,000 | 470,607 | |||||||||||||
2029 | 77,992 | 450,000 | 527,992 | |||||||||||||||||
Variable rate facility (3) | — | — | Thereafter | 433,746 | 950,000 | 1,383,746 | ||||||||||||||
Total Debt | $ | 7,355,371 | 3.6 | % | $ | 955,371 | $ | 6,400,000 | $ | 7,355,371 |
SELECT DEBT METRICS | ||||||||||
Net Debt-to-Core EBITDAre (4) | 4.6x | Interest Coverage (4) | 7.3x | Unencumbered NOI (4) | 93% | Weighted avg years to maturity of total debt (2) | 8.9 |
DEBT COVENANT COMPLIANCE | ||||||||||
Unsecured Line of Credit Covenants | December 31, 2019 | Requirement | ||||||||
Total Outstanding Indebtedness to Capitalization Value (5) | 26.4 | % | < | 65% | ||||||
Combined EBITDA to Combined Debt Service | 6.38x | > | 1.50x | |||||||
Unsecured Indebtedness to Unencumbered Asset Value | 22.1 | % | < | 65% | ||||||
Secured Indebtedness to Capitalization Value (5) | 3.8 | % | < | 40% | ||||||
Unsecured Senior Notes Covenants (6) | December 31, 2019 | Requirement | ||||||||
Total Outstanding Indebtedness to Total Assets (7) | 31.3 | % | < | 65% | ||||||
Secured Indebtedness to Total Assets (7) | 4.0 | % | < | 40% | ||||||
Unencumbered Assets to Unsecured Indebtedness | 338.5 | % | > | 150% | ||||||
Consolidated Income Available for Debt Service to the Annual Service Charge | 7.12x | > | 1.50x |
(1) | Rates are as of December 31, 2019 and, for secured and unsecured notes, include costs of financing such as credit enhancement fees, trustees' fees, the impact of interest rate hedges and mark-to-market adjustments. |
(2) | Excludes the Company's unsecured credit facility and any associated issuance discount, mark-to-market discounts and deferred financing costs if applicable. |
(3) | Represents amounts outstanding at December 31, 2019 under the Company's $1.75 billion unsecured credit facility. |
(4) | See Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(5) | Capitalization Value represents the Company’s Combined EBITDA for operating communities that the Company has owned for at least 12 months as of December 31, 2019, capitalized at a rate of 6% per annum, plus the book value of Development Communities and real estate communities acquired. For discussion of other defined terms, see "Debt Covenant Compliance" in Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(6) | The information about the Company’s unsecured senior notes covenants shows compliance with selected covenants under the Company’s 1998 Indenture, under which debt securities are outstanding with maturity dates through 2047, subject to prepayment or redemption at the Company’s election. See “Debt Covenant Compliance” in Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Different covenants apply to debt securities outstanding under the Company’s 2018 Indenture. |
(7) | Total Assets represents the sum of the Company's undepreciated real estate assets and other assets, excluding accounts receivable. See "Debt Covenant Compliance" in Attachment 15 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
Weighted Average | Accumulated | Weighted Average | Weighted Average | |||||||||||||||||||
Number of | Investment Period | Gross Sales | Depreciation | Economic | Initial Year Mkt. | Unleveraged | ||||||||||||||||
Communities Sold | (Years) | Price | GAAP Gain | and Other | Gain (Loss) | Cap Rate | IRR | |||||||||||||||
2010 - 2014: | ||||||||||||||||||||||
21 Communities (2) | 13.2 | $ | 1,872,440 | $ | 740,403 | $ | 256,790 | $ | 483,613 | 5.1% | 12.0% | |||||||||||
2015: | ||||||||||||||||||||||
3 Communities | 11.5 | $ | 265,500 | $ | 115,625 | $ | 47,451 | $ | 68,174 | 5.3% | 10.1% | |||||||||||
2016: | ||||||||||||||||||||||
7 Communities (3) | 15.3 | $ | 522,850 | $ | 370,301 | $ | 112,492 | $ | 257,809 | 5.3% | 13.0% | |||||||||||
2017: | ||||||||||||||||||||||
6 Communities | 9.6 | $ | 475,500 | $ | 251,163 | $ | 88,082 | $ | 163,081 | 5.3% | 11.0% | |||||||||||
2018: | ||||||||||||||||||||||
8 Communities (4) | 6.7 | $ | 618,750 | $ | 195,115 | $ | 102,170 | $ | 92,945 | 4.6% | 7.6% | |||||||||||
2019: | ||||||||||||||||||||||
6 Communities | 9.8 | $ | 427,600 | $ | 166,105 | $ | 95,233 | $ | 70,872 | 4.6% | 8.2% | |||||||||||
2010 - 2019 Total: | ||||||||||||||||||||||
51 Communities | 11.4 | $ | 4,182,640 | $ | 1,838,712 | $ | 702,218 | $ | 1,136,494 | 5.0% | 11.3% |
(1) | Provides disposition activity for consolidated communities for the most recent 10 year period. |
(2) | Communities sold during this period include the following considerations: |
i. | 2010 GAAP and Economic Gains include the recognition of $2,675 in deferred gains for prior year dispositions, recognition of which occurred in conjunction with settlement of associated legal matters. |
ii. | 2010 Gross Sales Price and GAAP and Economic Gains include the disposition of Avalon on the Sound, a consolidated community that was previously held in a joint venture for a portion of the Company's investment period. This community is not included in the calculation of Weighted Average Investment Period, Weighted Average Initial Year Market Cap Rate, or Weighted Average Unleveraged IRR. |
iii. | 2011 results exclude the Company's proportionate GAAP gain of $7,675 associated with an asset exchange. |
iv. | 2012 GAAP and Economic Gains include the recognition of $1,225 and $496, respectively, in deferred gains for prior year dispositions and gains for current year dispositions, which occurred in conjunction with settlement of associated legal matters. |
v. | 2013 and 2014 results include the sale of four and two Archstone communities, respectively, for Gross Sales Price and Weighted Average Initial Year Market Cap Rate, but exclude these dispositions for other metrics due to the short investment period. |
(3) | 2016 GAAP and Economic Gains exclude the impact of the consolidation of Avalon Clarendon, for which the Company recognized a gain of $4,322. |
(4) | 2018 results exclude the five communities the Company contributed to the NYC Joint Venture. |
Key Outputs (1) | Key Capital Items (7) | |||||||||||||||
2019 Actual | 2020 Projected | Projected Growth (2) | New capital sourced from asset and condominium sales and capital markets activity | $ | 1,425 | |||||||||||
EPS | $5.63 | $5.89 | to | $6.29 | 8.2% | Capital used for development and redevelopment activity, including land | $ | 1,000 | ||||||||
FFO per share | $9.18 | $9.46 | to | $9.86 | 5.2% | |||||||||||
Core FFO per share | $9.34 | $9.62 | to | $10.02 | 5.1% | Capital used for debt redemptions and amortization | $ | 770 | ||||||||
Projected change in cash and cash equivalents during 2020* | $ | — | ||||||||||||||
Assumptions | ||||||||||||||||
* Represents cash and cash equivalents as of December 31, 2019 of $40 and projected cash and cash equivalents as of December 31, 2020 of $40. | ||||||||||||||||
2020 Growth Assumptions - AvalonBay markets (3) | ||||||||||||||||
Expected job growth | 0.8% | |||||||||||||||
Expected total wage growth | 3.5% | Additional Information | ||||||||||||||
Expected apartment deliveries | 1.8% | Apartment Homes | Q4 2019 NOI (1) | |||||||||||||
2020 Projected | ||||||||||||||||
2020 Established Communities assumptions (4): | Q4 2019 NOI - restated for 2020 segments (4) | |||||||||||||||
Revenue change | 2.2% to 3.2% | Established | 69,821 | $ | 391,785 | |||||||||||
Operating expense change | 1.3% to 2.3% | Other Stabilized | 5,300 | 22,213 | ||||||||||||
NOI change | 2.5% to 3.5% | Redevelopment | 422 | 2,136 | ||||||||||||
Development | 7,536 | 6,113 | ||||||||||||||
Capitalized interest | $37 to $47 | Total consolidated communities | 83,079 | $ | 422,247 | |||||||||||
Expected capital cost for Development Communities: | Core FFO adjustment related to the for-sale residential condominiums at The Park Loggia | |||||||||||||||
Started in 2020 (AVB share / gross) | $800 to $1,000 / | |||||||||||||||
$1,000 to $1,200 | ||||||||||||||||
Completed in 2020 | $1,365 | Expensed costs incurred (8) | $5 | |||||||||||||
GAAP gain on sales, net (9) | (5) | |||||||||||||||
Development homes completed and delivered in 2020 | 3,100 | Imputed carry cost (10) | 11 | |||||||||||||
Development homes occupied in 2020 | 2,925 | Total Core FFO adjustments | $11 | |||||||||||||
2020 Projected NOI - Development (5) | $57 to $67 | |||||||||||||||
Total Core FFO adjustments (per share) | $0.08 |
2019 Actual | 2020 Projected | |||
Expensed overhead - Core FFO (6) | $150 | $153-$163 |
(1) | See Attachment 15 for Definitions and Reconciliations of Non-GAAP Financial Measures, including the reconciliation of Projected EPS to Projected FFO per share and Projected FFO per share to Projected Core FFO per share. |
(2) | Data generally represents the mid-point of management's expected ranges for 2020. |
(3) | Sources: National Association for Business Economics, Moody's Analytics, Axiometrics and AVB Market Research Group. Expected apartment deliveries reflect new market rate apartment deliveries as a percentage of existing market rate apartment stock. AvalonBay markets exclude expansion markets (Southeast Florida and Denver). |
(4) | Beginning January 1, 2020, the Company has updated its definition of Stabilized Operations and Redevelopment Communities. See Attachment 15 for the Company's updated definitions. |
(5) | Includes Projected NOI of $6.0 to $7.0 for the retail portion of The Park Loggia. |
(6) | Expensed overhead - Core FFO includes general and administrative expense and property management and other indirect operating expenses but excludes legal settlements, severance related costs and advocacy contributions as detailed as reconciling items between FFO and Core FFO. These reconciling items can be found on Attachment 15, table 4 for 2019 and Attachment 15, table 9 for 2020. |
(7) | 2020 data represents mid-points of management's expected ranges for 2020. |
(8) | Operating expenses incurred for condominium homes include property taxes, marketing expenses, sales staff and other operating costs. |
(9) | Reflects GAAP gain after taxes and costs of sales on condominium homes projected to be sold during 2020. Projected gross proceeds from sales are expected to be $230 to $250 in 2020. |
(10) | Represents the imputed carry cost of the for-sale residential condominiums at The Park Loggia. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold for-sale residential condominiums by the Company's weighted average unsecured debt rate. |
TABLE 1 | |||||||||||||||||||||||||||||
Q4 2019 | Q4 2018 | Q4 2019 to Q4 2018 % Change | Q3 2019 | Q4 2019 to Q3 2019 % Change | Full Year 2019 | Full Year 2018 | Full Year 2019 to Full Year 2018 % Change | ||||||||||||||||||||||
Total revenue, excluding uncollectible lease revenue | $ | 466,210 | $ | 453,861 | 2.7 | % | $ | 464,681 | 0.3 | % | $ | 1,845,925 | $ | 1,793,343 | 2.9 | % | |||||||||||||
Uncollectible lease revenue | (2,902 | ) | (2,009 | ) | 44.4 | % | (2,244 | ) | 29.3 | % | (9,586 | ) | (10,230 | ) | (6.3 | )% | |||||||||||||
Total revenue, including uncollectible lease revenue | 463,308 | 451,852 | 2.5 | % | 462,437 | 0.2 | % | 1,836,339 | 1,783,113 | 3.0 | % | ||||||||||||||||||
Rental revenue, excluding uncollectible lease revenue | 465,699 | 453,529 | 2.7 | % | 464,298 | 0.3 | % | 1,843,958 | 1,792,358 | 2.9 | % | ||||||||||||||||||
Uncollectible lease revenue | (2,902 | ) | (2,009 | ) | 44.4 | % | (2,244 | ) | 29.3 | % | (9,586 | ) | (10,230 | ) | (6.3 | )% | |||||||||||||
Rental revenue, including uncollectible lease revenue | 462,797 | 451,520 | 2.5 | % | 462,054 | 0.2 | % | 1,834,372 | 1,782,128 | 2.9 | % | ||||||||||||||||||
Operating expenses, excluding uncollectible lease revenue | 127,825 | 124,555 | 2.6 | % | 134,221 | (4.8 | )% | 518,867 | 504,790 | 2.8 | % | ||||||||||||||||||
Uncollectible lease revenue | 2,902 | 2,009 | 44.4 | % | 2,244 | 29.3 | % | 9,586 | 10,230 | (6.3 | )% | ||||||||||||||||||
Operating expenses, including uncollectible lease revenue | $ | 130,727 | $ | 126,564 | 3.3 | % | $ | 136,465 | (4.2 | )% | $ | 528,453 | $ | 515,020 | 2.6 | % | |||||||||||||
TABLE 2 | ||||||||||||||||
Q4 2018 | ||||||||||||||||
Established | Other Stabilized | Redevelopment | Development | |||||||||||||
Rental revenue, excluding uncollectible lease revenue | $ | 453,529 | $ | 71,079 | $ | 29,541 | $ | 2,282 | ||||||||
Uncollectible lease revenue | (2,009 | ) | (746 | ) | (151 | ) | (5 | ) | ||||||||
Rental revenue, including uncollectible lease revenue | 451,520 | 70,333 | 29,390 | 2,277 | ||||||||||||
Operating expenses, excluding uncollectible lease revenue | 124,555 | 21,598 | 9,230 | 1,179 | ||||||||||||
Uncollectible lease revenue | 2,009 | 746 | 151 | 5 | ||||||||||||
Operating expenses, including uncollectible lease revenue | $ | 126,564 | $ | 22,344 | $ | 9,381 | $ | 1,184 | ||||||||
• | Asset Densification Development Rights are when the Company develops additional apartment homes at existing stabilized operating communities the Company owns on land currently associated with those operating communities. |
• | Conventional Development Rights are when the Company either has an option to acquire the land or enter into a leasehold interest, for which the Company is the buyer under a long-term conditional contract to purchase land, where the Company controls the land through a ground lease or owns the land to develop a new community. |
• | Public-Private Partnership Development Rights are when the Company has (i) an option to acquire the land, (ii) an option to enter into a leasehold interest or (iii) entered into a long-term conditional contract to purchase the land, where the Company is the designated developer in a public-private partnership with a local government entity. |
TABLE 3 | ||||
Q4 | ||||
2019 | ||||
Net income | $ | 167,671 | ||
Interest expense, net, inclusive of loss on extinguishment of debt, net | 54,190 | |||
Income tax expense | 1,825 | |||
Depreciation expense | 171,364 | |||
EBITDA | $ | 395,050 | ||
Gain on sale of communities | (256 | ) | ||
Joint venture EBITDAre adjustments (1) | (2,079 | ) | ||
EBITDAre | $ | 392,715 | ||
Gain on other real estate transactions | (65 | ) | ||
Lost NOI from casualty losses covered by business interruption insurance | 265 | |||
Business interruption insurance proceeds | (527 | ) | ||
Advocacy contributions | 50 | |||
Severance related costs | 60 | |||
Development pursuit write-offs and expensed transaction costs, net | 2,093 | |||
For-sale condominium marketing and administrative costs | 1,286 | |||
Asset management fee intangible write-off and other joint venture losses | 52 | |||
Legal settlements | (2,221 | ) | ||
Core EBITDAre | $ | 393,708 | ||
(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income. | ||||
TABLE 4 | ||||||||||||||||
Q4 | Q4 | Full Year | Full Year | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income attributable to common stockholders | $ | 167,650 | $ | 385,734 | $ | 785,974 | $ | 974,525 | ||||||||
Depreciation - real estate assets, including joint venture adjustments | 171,314 | 158,838 | 666,563 | 629,814 | ||||||||||||
Distributions to noncontrolling interests | 12 | 11 | 46 | 44 | ||||||||||||
Gain on sale of unconsolidated entities holding previously depreciated real estate | (5,788 | ) | (2,019 | ) | (5,788 | ) | (10,655 | ) | ||||||||
Gain on sale of previously depreciated real estate | (256 | ) | (242,532 | ) | (166,105 | ) | (374,976 | ) | ||||||||
FFO attributable to common stockholders | 332,932 | 300,032 | 1,280,690 | 1,218,752 | ||||||||||||
Adjusting items: | ||||||||||||||||
Joint venture losses (1) | 87 | 538 | 87 | 852 | ||||||||||||
Joint venture promote (2) | — | — | — | (925 | ) | |||||||||||
Impairment loss on real estate | — | 826 | — | 826 | ||||||||||||
Casualty gain, net on real estate (3) | — | — | — | (612 | ) | |||||||||||
Business interruption insurance proceeds | (527 | ) | (26 | ) | (1,441 | ) | (26 | ) | ||||||||
Lost NOI from casualty losses covered by business interruption insurance | 265 | — | 675 | 1,730 | ||||||||||||
Loss on extinguishment of consolidated debt | — | 14,775 | 602 | 17,492 | ||||||||||||
Advocacy contributions | 50 | 2,040 | 50 | 3,489 | ||||||||||||
Severance related costs | 60 | 884 | 2,327 | 1,466 | ||||||||||||
Development pursuit write-offs and expensed transaction costs, net | 2,093 | 19 | 3,782 | 280 | ||||||||||||
For-sale condominium marketing and administrative costs | 1,286 | 547 | 3,812 | 1,044 | ||||||||||||
For-sale condominium imputed carry cost (4) | 4,121 | — | 6,351 | — | ||||||||||||
Gain on other real estate transactions | (65 | ) | (9 | ) | (439 | ) | (344 | ) | ||||||||
Legal settlements (5) | (2,221 | ) | 146 | (6,292 | ) | 513 | ||||||||||
Income tax expense (benefit) (6) | 1,825 | (251 | ) | 13,003 | (251 | ) | ||||||||||
Core FFO attributable to common stockholders | $ | 339,906 | $ | 319,521 | $ | 1,303,207 | $ | 1,244,286 | ||||||||
Average shares outstanding - diluted | 139,968,027 | 138,463,943 | 139,571,550 | 138,289,241 | ||||||||||||
Earnings per share - diluted | $ | 1.20 | $ | 2.79 | $ | 5.63 | $ | 7.05 | ||||||||
FFO per common share - diluted | $ | 2.38 | $ | 2.17 | $ | 9.18 | $ | 8.81 | ||||||||
Core FFO per common share - diluted | $ | 2.43 | $ | 2.31 | $ | 9.34 | $ | 9.00 | ||||||||
(1) Amounts are primarily composed of the write-off of asset management fee intangibles associated with the disposition of communities in the U.S. Fund and the AC JV. | ||||||||||||||||
(2) Amount for full year 2018 represents the Company's promoted interest in AvalonBay Value Added Fund II, L.P. | ||||||||||||||||
(3) Amount for full year 2018 consists primarily of legal settlement proceeds for construction defects at a community acquired as part of the Archstone acquisition. | ||||||||||||||||
(4) Represents the imputed carry cost of the for-sale residential condominiums at The Park Loggia. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold for-sale residential condominiums by the Company's weighted average unsecured debt effective interest rate. | ||||||||||||||||
(5) Amounts for 2019 include $2,237 in legal settlement proceeds related to a construction defect at a community, and amount for full year 2019 also includes $3,126 in legal settlement proceeds related to a former Development Right. | ||||||||||||||||
(6) Amount for full year 2019 consists of $5,782 related to GAAP to tax basis differences at The Park Loggia development and $7,221 related to the other activity the Company undertook through taxable REIT subsidiaries ("TRS"), including the disposition of two wholly-owned operating communities and deferred tax obligations related to the Company's sustainability initiatives. | ||||||||||||||||
TABLE 5 | |||
Core EBITDAre | $ | 393,708 | |
Interest expense, net | $ | 54,190 | |
Interest Coverage | 7.3 times | ||
TABLE 6 | |||
Total debt principal (1) | $ | 7,355,371 | |
Cash and cash in escrow | (127,614 | ) | |
Net debt | $ | 7,227,757 | |
Core EBITDAre | $ | 393,708 | |
Core EBITDAre, annualized | $ | 1,574,832 | |
Net Debt-to-Core EBITDAre | 4.6 times | ||
(1) Balance at December 31, 2019 excludes $8,610 of debt discount and $32,742 of deferred financing costs as reflected in unsecured notes, net, and $14,464 of debt discount and $3,265 of deferred financing costs as reflected in notes payable on the Condensed Consolidated Balance Sheets. | |||
TABLE 7 | ||||||||||||||||||||||||||||
Q4 | Q4 | Q3 | Q2 | Q1 | Full Year | Full Year | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||||||||
Net income | $ | 167,671 | $ | 385,636 | $ | 279,709 | $ | 168,305 | $ | 170,418 | $ | 786,103 | $ | 974,175 | ||||||||||||||
Indirect operating expenses, net of corporate income | 20,073 | 21,849 | 20,195 | 23,018 | 19,722 | 83,008 | 80,227 | |||||||||||||||||||||
Expensed transaction, development and other pursuit costs, net of recoveries | 2,428 | 1,052 | 175 | 1,766 | 622 | 4,991 | 3,265 | |||||||||||||||||||||
Interest expense, net | 54,190 | 55,180 | 51,493 | 50,010 | 47,892 | 203,585 | 220,974 | |||||||||||||||||||||
Loss on extinguishment of debt, net | — | 14,775 | 93 | 229 | 280 | 602 | 17,492 | |||||||||||||||||||||
General and administrative expense | 12,602 | 15,985 | 12,769 | 18,965 | 13,706 | 58,042 | 60,369 | |||||||||||||||||||||
Joint venture (income) loss | (7,872 | ) | (2,710 | ) | (1,643 | ) | (197 | ) | 1,060 | (8,652 | ) | (15,270 | ) | |||||||||||||||
Depreciation expense | 171,364 | 158,914 | 165,463 | 162,693 | 162,057 | 661,578 | 631,196 | |||||||||||||||||||||
Income tax expense (benefit) | 1,825 | (247 | ) | 11,184 | — | (6 | ) | 13,003 | (160 | ) | ||||||||||||||||||
Casualty and impairment loss, net | — | 826 | — | — | — | — | 215 | |||||||||||||||||||||
Gain on sale of communities | (256 | ) | (242,532 | ) | (130,484 | ) | (20,530 | ) | (14,835 | ) | (166,105 | ) | (374,976 | ) | ||||||||||||||
Gain on other real estate transactions | (65 | ) | (9 | ) | (73 | ) | (34 | ) | (267 | ) | (439 | ) | (345 | ) | ||||||||||||||
For-sale condominium marketing and administrative costs | 1,286 | 547 | 1,108 | 945 | 473 | 3,812 | 1,044 | |||||||||||||||||||||
NOI from real estate assets sold or held for sale | (999 | ) | (15,200 | ) | (1,785 | ) | (4,215 | ) | (5,318 | ) | (12,318 | ) | (79,372 | ) | ||||||||||||||
NOI | $ | 422,247 | $ | 394,066 | $ | 408,204 | $ | 400,955 | $ | 395,804 | $ | 1,627,210 | $ | 1,518,834 | ||||||||||||||
Established: | ||||||||||||||||||||||||||||
New England | $ | 42,332 | $ | 40,916 | $ | 41,746 | $ | 40,460 | $ | 40,440 | $ | 164,977 | $ | 159,394 | ||||||||||||||
Metro NY/NJ | 74,131 | 72,783 | 72,476 | 73,212 | 71,843 | 291,662 | 284,344 | |||||||||||||||||||||
Mid-Atlantic | 53,492 | 51,543 | 51,474 | 51,073 | 51,052 | 207,091 | 200,381 | |||||||||||||||||||||
Pacific NW | 20,687 | 20,868 | 20,683 | 20,605 | 20,210 | 82,186 | 78,313 | |||||||||||||||||||||
No. California | 70,529 | 68,866 | 70,096 | 69,342 | 70,248 | 280,216 | 272,096 | |||||||||||||||||||||
So. California | 74,312 | 72,321 | 71,741 | 72,593 | 72,695 | 291,340 | 283,795 | |||||||||||||||||||||
Total Established | 335,483 | 327,297 | 328,216 | 327,285 | 326,488 | 1,317,472 | 1,278,323 | |||||||||||||||||||||
Other Stabilized | 53,823 | 45,508 | 51,205 | 49,560 | 47,857 | 202,445 | 159,745 | |||||||||||||||||||||
Redevelopment | 21,382 | 20,162 | 21,010 | 20,629 | 20,030 | 83,052 | 79,893 | |||||||||||||||||||||
Development | 11,559 | 1,099 | 7,773 | 3,481 | 1,429 | 24,241 | 873 | |||||||||||||||||||||
NOI | $ | 422,247 | $ | 394,066 | $ | 408,204 | $ | 400,955 | $ | 395,804 | $ | 1,627,210 | $ | 1,518,834 | ||||||||||||||
TABLE 8 | ||||||||||||||||
Q4 | Q4 | Full Year | Full Year | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue from real estate assets sold or held for sale | $ | 1,421 | $ | 23,812 | $ | 21,441 | $ | 124,373 | ||||||||
Operating expenses from real estate assets sold or held for sale | (422 | ) | (8,612 | ) | (9,123 | ) | (45,001 | ) | ||||||||
NOI from real estate assets sold or held for sale | $ | 999 | $ | 15,200 | $ | 12,318 | $ | 79,372 | ||||||||
TABLE 9 | ||||||||
Low Range | High Range | |||||||
Projected EPS (diluted) - Full Year 2020 | $ | 5.89 | $ | 6.29 | ||||
Depreciation (real estate related) | 4.86 | 5.26 | ||||||
Gain on sale of communities | (1.29 | ) | (1.69 | ) | ||||
Projected FFO per share (diluted) - Full Year 2020 | 9.46 | 9.86 | ||||||
Adjustments related to residential for-sale condominiums at The Park Loggia (1) | 0.08 | 0.08 | ||||||
Other income, development pursuit and other write-offs | 0.02 | 0.02 | ||||||
Severance related costs | 0.02 | 0.02 | ||||||
Loss on extinguishment of consolidated debt | 0.04 | 0.04 | ||||||
Projected Core FFO per share (diluted) - Full Year 2020 | $ | 9.62 | $ | 10.02 | ||||
(1) See Attachment 14 - 2020 Financial Outlook for additional detail. | ||||||||
TABLE 10 | ||||||||||||||||
Q4 | Q4 | Full Year | Full Year | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Rental revenue (GAAP basis) | $ | 462,797 | $ | 451,520 | $ | 1,834,372 | $ | 1,782,128 | ||||||||
Concessions amortized | 261 | 336 | 862 | 3,690 | ||||||||||||
Concessions granted | (390 | ) | (233 | ) | (1,142 | ) | (1,090 | ) | ||||||||
Rental Revenue with Concessions | ||||||||||||||||
on a Cash Basis | $ | 462,668 | $ | 451,623 | $ | 1,834,092 | $ | 1,784,728 | ||||||||
% change -- GAAP revenue | 2.5 | % | 2.9 | % | ||||||||||||
% change -- cash revenue | 2.4 | % | 2.8 | % | ||||||||||||
TABLE 11 | ||||
Full Year 2019 | ||||
NOI | ||||
NOI for Established Communities | $ | 1,317,472 | ||
NOI for Other Stabilized Communities | 202,445 | |||
NOI for Redevelopment Communities | 83,052 | |||
NOI for Development Communities | 24,241 | |||
NOI from real estate assets sold or held for sale | 12,318 | |||
Total NOI generated by real estate assets | 1,639,528 | |||
NOI on encumbered assets | 109,454 | |||
NOI on unencumbered assets | $ | 1,530,074 | ||
Unencumbered NOI | 93 | % | ||