Form: 10-K

Annual report pursuant to Section 13 and 15(d)

March 5, 2004

 



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-K

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

For the fiscal year ended December 31, 2003

Commission file number 1-12672

AVALONBAY COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)


Maryland   77-0404318
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)
2900 Eisenhower Avenue, Suite 300
Alexandria, Virginia 22314
(Address of principal executive office, including zip code)

(703) 329-6300
(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
     
Common Stock, par value $.01 per share   New York Stock Exchange, Pacific Exchange
8.70% Series H Cumulative Redeemable Preferred Stock,
par value $.01 per share
  New York Stock Exchange, Pacific Exchange
(Title of each class)   (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None

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

Yes x            No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes x            No o

The aggregate market value of the Registrant’s Common Stock, par value $.01 per share, held by nonaffiliates of the Registrant, as of June 30, 2003 was $2,879,772,904.

The number of shares of the Registrant’s Common Stock, par value $.01 per share, outstanding as of February 27, 2004 was 71,145,602.

Documents Incorporated by Reference

Portions of AvalonBay Communities, Inc.’s Proxy Statement for the 2004 annual meeting of stockholders, a definitive copy of which will be filed with the SEC within 120 days after the year end of the year covered by this Form 10-K, are incorporated by reference herein as portions of Part III of this Form 10-K.



 


 

TABLE OF CONTENTS

             
        PAGE
PART I
 
           
ITEM 1.
  BUSINESS     1  
 
           
ITEM 2.
  COMMUNITIES     7  
 
           
ITEM 3.
  LEGAL PROCEEDINGS     33  
 
           
ITEM 4.
  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS     33  
 
           
PART II
 
           
ITEM 5.
 
MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
    34  
 
           
ITEM 6.
  SELECTED FINANCIAL DATA     35  
 
           
ITEM 7.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    38  
 
           
ITEM 7a.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
    56  
 
           
ITEM 8.
  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA     57  
 
           
ITEM 9.
 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
    57  
 
           
ITEM 9a.
  CONTROLS AND PROCEDURES     57  
 
           
PART III
 
           
ITEM 10.
  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT     57  
 
           
ITEM 11.
  EXECUTIVE COMPENSATION     57  
 
           
ITEM 12.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    57  
 
           
ITEM 13.
  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS     59  
 
           
ITEM 14.
  PRINCIPAL ACCOUNTING FEES AND SERVICES     59  
 
           
PART IV
 
           
ITEM 15.
 
EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND
REPORTS ON FORM 8-K
    60  
 
           
SIGNATURES     64  

 


 

PART I

This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Our actual results could differ materially from those set forth in each forward-looking statement. Certain factors that might cause such a difference are discussed in this report, included in the section entitled “Forward-Looking Statements” on page 54 of this Form 10-K.

ITEM 1.  BUSINESS

General

AvalonBay Communities, Inc. is a Maryland corporation that has elected to be treated as a real estate investment trust, or REIT, for federal income tax purposes. We focus on the development, redevelopment, acquisition, ownership and operation of apartment communities in high barrier-to-entry markets of the United States. This is because we believe that, long term, the limited new supply of apartment homes and lower housing affordability in these markets will result in larger increases in cash flows relative to other markets over an entire business cycle. These barriers-to-entry generally include a difficult and lengthy entitlement process with local jurisdictions and dense urban or suburban areas where zoned and entitled land is in limited supply. Our markets are located in the Northeast, Mid-Atlantic, Midwest, Pacific Northwest, and Northern and Southern California regions of the United States. We believe that we have penetrated substantially all of the high barrier-to-entry markets of the country.

At February 27, 2004, we owned or held a direct or indirect ownership interest in 131 operating apartment communities containing 38,504 apartment homes in ten states and the District of Columbia, of which two communities containing 1,089 apartment homes were under reconstruction. In addition, we owned or held a direct or indirect ownership interest in 11 communities under construction that are expected to contain an aggregate of 3,493 apartment homes when completed. We also owned a direct or indirect ownership interest in rights to develop an additional 40 communities that, if developed in the manner expected, will contain an estimated 10,070 apartment homes. We generally obtain ownership in an apartment community by developing a new community on vacant land or by acquiring and either repositioning or redeveloping an existing community. In selecting sites for development, redevelopment or acquisition, we favor locations that are near expanding employment centers and convenient to recreation areas, entertainment, shopping and dining.

Our real estate investments consist of the following reportable segments: Established Communities, Other Stabilized Communities and Development/Redevelopment Communities. Established Communities are generally operating communities that were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year. Other Stabilized Communities are generally all other operating communities that have stabilized occupancy and operating expenses as of the beginning of the current year, but had not achieved stabilization as of the beginning of the prior year. Development/Redevelopment Communities consist of communities that are under construction, communities where substantial redevelopment is in progress or is planned to begin during the current year and communities under lease-up. A more detailed description of these segments and other related information can be found in Note 9, “Segment Reporting,” of the Consolidated Financial Statements set forth in Item 8 of this report.

Our principal financial goal is to increase long-term stockholder value by successfully and cost-effectively developing, redeveloping, acquiring, owning and operating high-quality communities in our selected markets that contain features and amenities desired by residents, as well as by providing our residents with efficient and effective service. To help fulfill this goal, we regularly (i) monitor our investment allocation by geographic market and product type, (ii) develop, redevelop and acquire apartment communities in high barrier-to-entry markets with growing or high potential for demand, (iii) selectively sell apartment communities that no longer meet our long-term strategy due to product type, location or relative potential for future appreciation and redeploy the proceeds from those sales, and (iv) endeavor to maintain a capital structure that is aligned with our business risks such that we maintain continuous access to cost-effective capital. Our long-term strategy is to more deeply penetrate the high barrier-to-entry markets in our chosen regions with a broad range of products and services and an intense focus on our customer. A substantial majority of our current communities are upscale (commanding among the highest rents in their submarkets). We also pursue the ownership and operation of apartment communities that target a variety of customer segments and price points, consistent with our goal to offer a broad range of products and services.

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During the three years ended December 31, 2003, we acquired five apartment communities, disposed of 20 apartment communities, and completed the development of 23 apartment communities and the redevelopment of three apartment communities. During 2003, we shifted from acquiring to selling apartment communities in response to strong investor demand, allowing us to realize a portion of the value created over the past business cycle, as well as providing additional liquidity. In 2004, we plan to continue our disposition activity, although at a reduced level, and we expect to expand our acquisition and development volume. The level of disposition, acquisition or development activity, however, is heavily influenced by capital market conditions, including prevailing interest rates. A further discussion of our development, redevelopment, disposition and acquisition strategy follows.

Development Strategy. We carefully select land for development and follow established procedures that we believe minimize both the cost and the risks of development. As one of the largest developers of multifamily apartment communities in high barrier-to-entry markets of the United States, we identify development opportunities through local market presence and access to local market information achieved through our regional offices. In addition to our principal executive offices in Alexandria, Virginia, we also maintain regional offices and administrative or specialty offices in or near the following cities:

  •   Boston, Massachusetts;
  •   Chicago, Illinois;
  •   New Canaan, Connecticut;
  •   New York, New York;
  •   Newport Beach, California;
  •   San Jose, California;
  •   Seattle, Washington; and
  •   Woodbridge, New Jersey.

After selecting a target site, we usually negotiate for the right to acquire the site either through an option or a long-term conditional contract. Options and long-term conditional contracts generally enable us to acquire the target site shortly before the start of construction, which reduces development-related risks as well as preserves capital. After we acquire land, we generally shift our focus to construction. Except for certain mid-rise and high-rise apartment communities where we may elect to use third-party general contractors or construction managers, we act as our own general contractor and construction manager. We generally perform these functions directly (and not through a subsidiary) both for ourselves and for the joint ventures and partnerships of which we are a member or a partner. We believe this enables us to achieve higher construction quality, greater control over construction schedules and significant cost savings. Our development, property management and construction teams monitor construction progress to ensure high-quality workmanship and a smooth and timely transition into the leasing and operational phase.

Throughout this report, the term “development” is used to refer to the entire property development cycle, including pursuit of zoning approvals, procurement of architectural and engineering designs and the construction process. References to “construction” refer to the actual construction of the property, which is only one element of the development cycle.

Redevelopment Strategy. When we undertake the redevelopment of a community, our goal is to generally renovate and/or rebuild an existing community so that our total investment is significantly below replacement cost and the community is one of the highest quality apartment communities or best rental values for an apartment community in its local area. We have established procedures to minimize both the cost and risks of redevelopment. Our redevelopment teams, which include key redevelopment, construction and property management personnel, monitor redevelopment progress. We believe we achieve significant cost savings by acting as our own general contractor. More importantly, this helps to ensure high-quality design and workmanship and a smooth and timely transition into the lease-up and restabilization phase.

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Throughout this report, the term “redevelopment” is used to refer to the entire redevelopment cycle, including planning and procurement of architectural and engineering designs, budgeting and actual renovation work. The actual renovation work is referred to as “reconstruction,” which is only one element of the redevelopment cycle.

Disposition Strategy. We sell assets when market conditions are favorable and redeploy the proceeds from those sales to develop, redevelop and acquire communities and to rebalance our portfolio across geographic regions. This also allows us to realize a portion of the value created over the past business cycle, as well as provides additional liquidity. We are then able to redeploy the net proceeds from our dispositions in lieu of raising that amount of capital externally by issuing debt or equity securities. When we decide to sell a community, we generally solicit competing bids from unrelated parties for these individual assets and consider the sales price of each proposal.

Acquisition Strategy. Our core competencies in development and redevelopment discussed above allow us to be selective in the acquisitions we target. From time to time, in order to achieve rapid penetration into markets that are generally supply constrained and in which we desire an increased presence and to help us achieve our desired product mix, or to rebalance our portfolio, we will acquire existing apartment communities.

Property Management Strategy. We intend to increase operating income through innovative, proactive property management that will result in higher revenue from communities and controlled operating expenses.

Our principal strategies to maximize revenue include:

  •   strong focus on resident satisfaction;
  •   staggering lease terms such that lease expirations are better matched to traffic patterns;
  •   balancing high occupancy with premium pricing, and increasing rents as market conditions permit;
  •   managing community occupancy for optimal rental revenue levels; and
  •   applying new technology to optimize revenue from each community.

Controlling operating expenses is another way in which we intend to increase earnings growth. Growth in our portfolio and the resulting increase in revenue allows for fixed operating costs to be spread over a larger volume of revenue, thereby increasing operating margins. We control operating expenses as follows:

  •   receive and approve invoices on-site to ensure careful monitoring of budgeted versus actual expenses;
  •   purchase supplies in bulk where possible;
  •   bid third-party contracts on a volume basis;
  •   strive to retain residents through high levels of service in order to eliminate the cost of preparing an apartment home for a new resident and to reduce marketing and vacant apartment utility costs;
  •   perform turnover work in-house or hire third-parties, generally depending upon the least costly alternative;
  •   undertake preventive maintenance regularly to maximize resident satisfaction and property and equipment life; and
  •   aggressively pursue real estate tax appeals.

On-site property management teams receive bonuses based largely upon the net operating income produced at their respective communities.

We generally manage the operation and leasing activity of our communities directly (and not through a subsidiary) both for ourselves and the joint ventures and partnerships of which we are a member or a partner.

We are also pursuing ancillary services which could provide additional revenue sources. In general, as a REIT we cannot directly provide services to our tenants that are not customarily provided by a landlord, nor can we share in the income of a third party that provides such services. However, we can provide such non-customary services to residents if we do so through a “taxable REIT subsidiary,” which is a subsidiary that is treated as a “C corporation” and is therefore subject to federal income taxes. We have used taxable REIT subsidiaries on a limited basis, such as to receive a commission from a “preferred provider” maid service company used by residents.

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Technology Strategy. We believe that an innovative management information system infrastructure is an important element in managing our future growth. This is because timely and accurate collection of financial and resident profile data will enable us to maximize revenue through careful leasing decisions and financial management.

We currently have minority investments in three technology companies. These investments were made with the belief that they would promote the development and application of technology and services which would improve the operating performance of our real estate holdings. Our technology investments consist of (i) an entity engaged in the development and deployment of an on-site property management and leasing automation system that enables management to capture, review and analyze data to a greater extent than is possible using existing commercial software; (ii) an entity formed by a number of real estate investment trusts and real estate operating companies for the purpose of investing in multi-sector real estate technology opportunities; and (iii) an internet-based rental housing information provider.

Financing Strategy. We have consistently maintained, and intend to continue to maintain, a capital structure that is aligned to the business risks presented by our corporate strategy. At December 31, 2003, our debt-to-total market capitalization was 39.9%, and our permanent long-term floating rate debt, not including borrowings under our unsecured credit facility, was 1.4% of total market capitalization. Total market capitalization reflects the aggregate of the market value of our common stock, the market value of our operating partnership units outstanding (based on the market value of our common stock), the liquidation preference of our preferred stock and the outstanding principal amount of our debt.

We estimate that a portion of our short-term liquidity needs will be met from retained operating cash and borrowings under our variable rate unsecured credit facility. If required to meet the balance of our current or anticipated liquidity needs, we will attempt to arrange additional capacity under our existing unsecured credit facility, sell existing communities or land and/or issue additional debt or equity securities. A determination to engage in an equity or debt offering depends on a variety of factors such as general market and economic conditions, including interest rates, our short and long term liquidity needs, the adequacy of our expected liquidity sources, the relative costs of debt and equity capital, and growth opportunities. A summary of debt and equity activity for the last three years is reflected on our Consolidated Statement of Cash Flows of the Consolidated Financial Statements set forth in Item 8 of this report.

While we believe we have the financial position to expand our short-term credit capacity and access the capital markets as needed, we cannot assure you that we will be successful in completing these arrangements, sales or offerings. The failure to complete these transactions on a cost-effective basis or at all could have a material adverse impact on our operating results and financial condition.

We may, from time to time, enter into joint ventures (including limited liability companies) or partnerships through which we would own an indirect economic interest in less than 100% of the property or properties owned directly by such joint venture or partnership. Our decision whether to hold an apartment community in fee simple or to have an indirect interest in the community through a joint venture or partnership is based on a variety of facts and considerations, including: (i) the economic and tax terms required by a seller of land or of a community, who may prefer that (or who may require less payment if) the land or community is contributed to a joint venture or partnership; (ii) our desire to diversify our portfolio of communities by market, submarket and product type; (iii) our desire at times to preserve our capital resources to maintain liquidity or balance sheet strength; and (iv) our projection, in some circumstances, that we will achieve higher returns on our invested capital or reduce our risk if a joint venture or partnership vehicle is used. Any future investments in joint ventures or partnerships will not be limited to a specified percentage of our assets. Each joint venture or partnership agreement is individually negotiated, and our ability to operate and/or dispose of a community in our sole discretion may be limited to varying degrees depending on the terms of the joint venture or partnership agreement.

In addition, we may, from time to time, offer shares of our equity securities, debt securities or options to purchase stock in exchange for property.

While we emphasize equity real estate investments in apartment communities, we have the ability, which would be exercised in the discretion of our Board of Directors, to invest in other types of real estate, mortgages (including participating or convertible mortgages), securities of other REITs or real estate operating companies, or securities of

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technology companies that relate to our real estate operations or of companies that provide services to us or our residents, in each case consistent with our qualification as a REIT. On occasion, we own and operate retail space at our communities when either (i) the highest and best use of the space is for retail (e.g., street level in an urban area) or (ii) we believe the retail space will enhance the attractiveness of the community to residents. As of December 31, 2003, we had a total of 192,040 square feet of rentable retail space that produced gross rental revenue in 2003 of $2,329,000 (0.4% of total revenue). Any investment in securities of other entities is subject to the percentage of ownership limitations and gross income tests necessary for REIT qualification. Our current policy does not contemplate future investments in mortgages or deeds of trust.

We have not engaged in trading, underwriting or agency distribution or sale of securities of other issuers and do not intend to do so. At all times we intend to make investments in a manner as to qualify as a REIT unless, because of circumstances or changes to the Internal Revenue Code (or the Treasury Regulations), the Board of Directors determines that it is no longer in our best interest to qualify as a REIT.

Inflation and Deflation

Substantially all of our leases are for a term of one year or less, which may enable us to realize increased rents upon renewal of existing leases or the beginning of new leases. Such short-term leases generally minimize the risk to us of the adverse effects of inflation, although as a general rule these leases permit residents to leave at the end of the lease term and therefore our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. Short-term leases combined with relatively consistent demand have allowed rents, and therefore cash flow from the portfolio, to provide an attractive inflation hedge. However, in a deflationary rent environment as is currently being experienced, we are exposed to declining rents more quickly under these shorter-term leases.

Tax Matters

We filed an election with our initial federal income tax return to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and intend to maintain our qualification as a REIT in the future. As a qualified REIT, with limited exceptions, we will not be taxed under federal and certain state income tax laws at the corporate level on our net income to the extent net income is distributed to our stockholders. We expect to make sufficient distributions to avoid income tax at the corporate level.

Competition

We face competition from other real estate investors, including insurance companies, pension and investment funds, partnerships and investment companies and other apartment REITs, to acquire and develop apartment communities and acquire land for future development. As an owner and operator of apartment communities, we also face competition for prospective residents from other operators whose communities may be perceived to offer a better location or better amenities or whose rent may be perceived as a better value proposition given the quality, location and amenities that the resident seeks. We also compete with the condominium and single-family home markets. Although we often compete against large sophisticated developers and operators for development opportunities and for prospective residents, real estate developers and operators of any size can provide effective competition.

Environmental and Related Matters

Under various federal, state and local environmental laws, regulations and ordinances, a current or previous owner or operator of real estate may be required, regardless of knowledge or responsibility, to investigate and remediate the effects of hazardous or toxic substances or petroleum product releases at the property and may be held liable to a governmental entity or to third parties for property damage and for investigation and remediation costs incurred by these parties as a result of the contamination. These damages and costs may be substantial. The presence of such substances, or the failure to properly remediate the contamination, may adversely affect the owner’s ability to borrow against, sell or rent the affected property. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs it incurs as a result of the contamination.

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Certain federal, state and local laws, regulations and ordinances govern the removal, encapsulation or disturbance of asbestos containing materials (“ACMs”) when such materials are in poor condition or in the event of reconstruction, remodeling, renovation, or demolition of a building. These laws may impose liability for release of ACMs and may provide for third parties to seek recovery from owners or operators of real properties for personal injury associated with exposure to ACMs. We are not aware that any ACMs were used in the construction of the communities we developed. ACMs were, however, used in the construction of several of the communities that we acquired. We have implemented an operations and maintenance program for each of the communities at which ACMs have been detected. We do not anticipate that we will incur any material liabilities as a result of the presence of ACMs at our communities.

We are aware that some of our communities have lead paint and have implemented an operations and maintenance program at each of those communities. We do not anticipate that we will incur any material liabilities as a result of the presence of lead paint at our communities.

All of our stabilized operating communities, and all of the communities that we are currently developing or redeveloping, have been subjected to at least a Phase I or similar environmental assessment, which generally does not involve invasive techniques such as soil or ground water sampling. These assessments, together with subsurface assessments conducted on some properties, have not revealed, and we are not otherwise aware of, any environmental conditions that we believe would have a material adverse effect on our business, assets, financial condition or results of operations. In connection with our ownership, operation and development of communities, from time to time we undertake remedial action in response to the presence of subsurface or other contaminants. In some cases, an indemnity exists upon which we may be able to rely if environmental liability arises from the contamination. There can be no assurance, however, that all necessary remediation actions have been or will be undertaken at our properties or that we will be indemnified, in full or at all, in the event that environmental liability arises.

Mold growth may occur when excessive moisture accumulates in buildings or on building materials, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Although the occurrence of mold at multifamily and other structures, and the need to remediate such mold, is not a new phenomenon, there has been increased awareness in recent years that certain molds may in some instances lead to adverse health effects, including allergic or other reactions. To help limit mold growth, we educate residents about the importance of adequate ventilation and request or require that they notify us when they see mold or excessive moisture. We have established procedures for promptly addressing and remediating mold or excessive moisture from apartment homes when we become aware of its presence regardless of whether we or the resident believe a health risk is present. However, we cannot assure that mold or excessive moisture will be detected and remediated in a timely manner. If a significant mold problem arises at one of our communities, we could be required to undertake a costly remediation program to contain or remove the mold from the affected community and could be exposed to other liabilities.

Additionally, we have occasionally been involved in developing, managing, leasing and operating various properties for third parties. Consequently, we may be considered to have been an operator of such properties and, therefore, potentially liable for removal or remediation costs or other potential costs which could relate to hazardous or toxic substances. We are not aware of any material environmental liabilities with respect to properties managed or developed by us or our predecessors for such third parties.

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We cannot assure you that:

  •   the environmental assessments described above have identified all potential environmental liabilities;
  •   no prior owner created any material environmental condition not known to us or the consultants who prepared the assessments;
  •   no environmental liabilities have developed since the environmental assessments were prepared;
  •   the condition of land or operations in the vicinity of our communities, such as the presence of underground storage tanks, will not affect the environmental condition of our communities;
  •   future uses or conditions, including, without limitation, changes in applicable environmental laws and regulations, will not result in the imposition of environmental liability; and
  •   no environmental liabilities will develop at communities that we have sold for which we may have liability.

Other Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934 are available free of charge in the “Investor Relations” section of our website (www.avalonbay.com) as soon as reasonably practicable after the reports are filed with or furnished to the SEC.

We were incorporated under the laws of the State of California in 1978. In 1995, we reincorporated in the State of Maryland and have been focused on the ownership and operation of apartment communities since that time. As of December 31, 2003, we had 1,622 employees.

ITEM 2.  COMMUNITIES

Our real estate investments consist primarily of current operating apartment communities, communities in various stages of development (“Development Communities”) and Development Rights as defined below. Our current operating communities are further distinguished as Established Communities, Other Stabilized Communities, Lease-Up Communities and Redevelopment Communities. The following is a description of each category:

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

  •   Established Communities (also known as Same Store Communities) are communities where a comparison of operating results from the prior year to the current year is meaningful, as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year. We determine which of our communities fall into the Established Communities category annually as of January 1st of each year and maintain that classification throughout the year. For the year ended December 31, 2003, the Established Communities are communities that had stabilized occupancy and operating expenses as of January 1, 2002 and are not conducting or planning to conduct substantial redevelopment activities, as described below, and are not held for sale or planned for disposition within the current year. We consider a community to have stabilized occupancy at the earlier of (i) attainment of 95% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.
 
 
  •   Other Stabilized Communities includes all other completed communities that have stabilized occupancy, as defined above. Other Stabilized Communities do not include communities that are conducting or planning to conduct substantial redevelopment activities within the current year.

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  •   Lease-Up Communities are communities where construction has been complete for less than one year and where physical occupancy has not reached 95%.
 
 
  •   Redevelopment Communities are communities where substantial redevelopment is in progress or is planned to begin during the current year. Redevelopment is considered substantial when capital invested during the reconstruction effort exceeds the lesser of $5,000,000 or 10% of the community’s acquisition cost.

Development Communities are communities that are under construction and for which a final certificate of occupancy has not been received. These communities may be partially complete and operating.

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

As of December 31, 2003, our communities were classified as follows:

                 
    Number of   Number of
    communities
  apartment homes
Current Communities
               
                 
Established Communities:
               
Northeast
    30       7,559  
Mid-Atlantic
    16       4,684  
Midwest
    4       1,296  
Pacific Northwest
    9       2,436  
Northern California
    29       8,663  
Southern California
    11       3,180  
 
   
 
     
 
 
Total Established
    99       27,818  
 
   
 
     
 
 
Other Stabilized Communities:
               
Northeast
    12       3,891  
Mid-Atlantic
    1       842  
Midwest
    —       —  
Pacific Northwest
    3       723  
Northern California
    3       655  
Southern California
    3       1,442  
 
   
 
     
 
 
Total Other Stabilized
    22       7,553  
 
   
 
     
 
 
Lease-Up Communities
    8       2,044  
 
               
Redevelopment Communities
    2       1,089  
 
   
 
     
 
 
Total Current Communities
    131       38,504  
 
   
 
     
 
 
Development Communities
    11       3,493  
 
   
 
     
 
 
Development Rights
    40       10,070  
 
   
 
     
 
 

Our holdings under each of the above categories are discussed on the following pages.

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Current Communities

The Current Communities are primarily garden-style apartment communities consisting of two and three-story buildings in landscaped settings. The Current Communities, as of February 27, 2004, include 98 garden-style (of which 10 are mixed communities and include townhomes), 19 high-rise and 14 mid-rise apartment communities. The Current Communities offer many attractive amenities including some or all of the following:

  •   vaulted ceilings;
  •   lofts;
  •   fireplaces;
  •   patios/decks; and
  •   modern appliances.

Other features at various communities may include:

  •   swimming pools;
  •   fitness centers;
  •   tennis courts; and
  •   business centers.

We also have an extensive and ongoing maintenance program to keep all communities and apartment homes substantially free of deferred maintenance and, where vacant, available for immediate occupancy. We believe that the aesthetic appeal of our communities and a service oriented property management team, focused on the specific needs of residents, enhances market appeal to discriminating residents. We believe this will ultimately achieve higher rental rates and occupancy levels while minimizing resident turnover and operating expenses.

9


 

These Current Communities are located in the following geographic markets:

                                                 
    Number of   Number of   Percentage of total
    communities at
  apartment homes at
  apartment homes at
    1-1-03
  2-27-04
  1-1-03
  2-27-04
  1-1-03
  2-27-04
Northeast
    45       47       12,667       13,213       31.5 %     34.3 %
Boston, MA
    13       15       3,142       3,716       7.8 %     9.7 %
Fairfield County, CT
    13       14       3,350       3,673       8.3 %     9.5 %
Long Island, NY
    3       3       915       915       2.3 %     2.4 %
Northern New Jersey
    5       4       1,802       1,451       4.5 %     3.8 %
Central New Jersey
    4       4       1,440       1,440       3.6 %     3.7 %
New York, NY
    7       7       2,018       2,018       5.0 %     5.2 %
 
                                               
Mid-Atlantic
    22       20       6,754       6,423       16.8 %     16.7 %
Baltimore, MD
    4       4       1,054       1,054       2.6 %     2.7 %
Washington, DC
    18       16       5,700       5,369       14.2 %     13.9 %
 
                                               
Midwest
    9       4       2,624       1,296       6.5 %     3.4 %
Chicago, IL
    4       4       1,296       1,296       3.2 %     3.4 %
Minneapolis, MN
    5       —       1,328       —       3.3 %     —  
 
                                               
Pacific Northwest
    12       12       3,159       3,159       7.9 %     8.2 %
Seattle, WA
    12       12       3,159       3,159       7.9 %     8.2 %
 
                                               
Northern California
    32       33       9,318       9,568       23.2 %     24.8 %
Oakland-East Bay, CA
    6       6       2,090       2,090       5.2 %     5.4 %
San Francisco, CA
    8       9       1,765       2,015       4.4 %     5.2 %
San Jose, CA
    18       18       5,463       5,463       13.6 %     14.2 %
 
                                               
Southern California
    17       15       5,657       4,845       14.1 %     12.6 %
Los Angeles, CA
    5       5       2,401       2,261       6.0 %     5.9 %
Orange County, CA
    8       6       2,022       1,350       5.0 %     3.5 %
San Diego, CA
    4       4       1,234       1,234       3.1 %     3.2 %
 
 
 
   
 
   
 
   
 
   
 
   
 
 
 
    137       131       40,179       38,504       100.0 %     100.0 %
 
 
 
   
 
   
 
   
 
   
 
   
 
 

We manage and operate all of the Current Communities. During the year ended December 31, 2003, we completed construction of 1,959 apartment homes in seven communities and sold 3,634 apartment homes in twelve communities. The average age of the Current Communities, on a weighted average basis according to number of apartment homes, is 8.1 years.

Of the Current Communities, as of February 27, 2004, we own:

  •   a fee simple, or absolute, ownership interest in 104 operating communities;
  •   a fee simple, or absolute, ownership interest in four operating communities which are on land subject to land leases expiring in January 2062, April 2095, May 2099 and March 2142;
  •   a general partnership interest in three partnerships that each own a fee simple interest in an operating community;
  •   a general partnership interest in five partnerships structured as “DownREITs,” as described more fully below, that own an aggregate of 15 communities;
  •   a membership interest in four limited liability companies that each hold a fee simple interest in an operating community, two of which are on land subject to land leases with one lease expiring in July 2029 and one lease expiring in November 2089; and

10


 

  •   a 100% interest in a senior participating mortgage note secured by one community, which allows us to share in part of the rental income or resale proceeds of the community.

We also hold a fee simple ownership interest in nine of the Development Communities, a membership interest in a limited liability company that owns one Development Community and a general partnership interest in a partnership structured as a “DownREIT” that owns one Development Community.

In each of our six partnerships structured as DownREITs, either AvalonBay or one of our wholly-owned subsidiaries is the general partner, and there are one or more limited partners whose interest in the partnership is represented by units of limited partnership interest. For each DownREIT partnership, limited partners are entitled to receive an initial distribution before any distribution is made to the general partner. Although the partnership agreements for each of the DownREITs are different, generally the distributions per unit paid to the holders of units of limited partnership interests have approximated our current common stock dividend amount. Each DownREIT partnership has been structured so that it is unlikely the limited partners will be entitled to a distribution greater than the initial distribution provided for in the applicable partnership agreement. The holders of units of limited partnership interest have the right to present each unit of limited partnership interest for redemption for cash equal to the fair market value of a share of our common stock on the date of redemption. In lieu of a cash redemption by the partnership, we may elect to acquire any unit presented for redemption for one share of our common stock or for such cash amount. As of February 27, 2004, there were 589,412 DownREIT partnership units outstanding. The DownREIT partnerships are consolidated for financial reporting purposes.

11


 

Profile of Current, Development and Unconsolidated Communities (1)
(Dollars in thousands, except per apartment home data)

                                                                                                             
                                                Average economic           Average            
                Approx.
rentable
          Year of   Average   Physical   occupancy
          rental rate
          Financial
        Number of   area           completion/   size   occupancy                                   $ per   $ per           reporting
    City and state
  homes
  (Sq. Ft.)
  Acres
  acquisition
  (Sq. Ft.)
  at 12/31/03
  2003
          2002
          Apt (4)
  Sq. Ft.
          cost (5)
CURRENT COMMUNITIES
                                                                                                           
NORTHEAST
                                                                                                           
Boston, MA
                                                                                                           
Avalon at Center Place (10)
  Providence, RI     225       231,671       1.2     1991/1997     1,030     91.6%     93.7 %             96.2 %           $ 2,162     $ 1.97             $ 27,761  
Avalon at Faxon Park
  Quincy, MA     171       175,494       8.3     1998     1,026     98.8%     93.5 %             93.9 %             1,706       1.55               15,322  
Avalon at Flanders Hill
  Westborough, MA     280       299,978       62.0     2003     1,099     92.9%     79.9 %     (3 )     N/A               1,451       1.08       (3 )     36,642  
Avalon at Lexington
  Lexington, MA     198       231,182       16.1     1994     1,168     93.4%     91.6 %             93.8 %             1,793       1.41               15,448  
Avalon at Newton Highlands (7)
  Newton, MA     294       401,241       7.0     2003     1,177     63.3%     27.9 %     (3 )     N/A               2,180       0.45       (3 )     55,121  
Avalon at Prudential Center
  Boston, MA     781       747,954       1.0     1968/1998     958     94.4%     92.0 %     (2 )     89.2 %     (2 )     2,582       2.48       (2 )     154,665  
Avalon Essex
  Peabody, MA     154       173,520       11.1     2000     1,127     96.8%     93.1 %             94.0 %             1,767       1.46               21,619  
Avalon Estates
  Hull, MA     162       188,392       55.0     2001     1,163     93.2%     92.9 %             88.5 %             1,545       1.23               20,322  
Avalon Ledges
  Weymouth, MA     304       315,554       58.0     2002     1,023     94.1%     80.1 %             37.5 %     (3 )     1,398       1.08               36,016  
Avalon Oaks
  Wilmington, MA     204       229,748       22.5     1999     1,023     90.2%     92.2 %             92.2 %             1,562       1.28               20,935  
Avalon Oaks West
  Wilmington, MA     120       123,960       27.0     2002     1,033     90.8%     91.7 %             76.3 %     (3 )     1,497       1.33               16,799  
Avalon Orchards
  Marlborough, MA     156       186,500       23.0     2002     1,219     95.5%     93.0 %             63.1 %     (3 )     1,481       1.15               21,010  
Avalon Summit
  Quincy, MA     245       203,848       8.0     1986/1996     832     96.3%     91.5 %             90.7 %             1,290       1.42               16,863  
Avalon West
  Westborough, MA     120       147,472       8.0     1996     1,229     90.8%     89.1 %             92.1 %             1,416       1.03               11,083  
Fairfield-New Haven, CT
                                                                                                           
Avalon at Greyrock Place
  Stamford, CT     306       201,500       3.0     2002     1,040     95.8%     90.8 %             66.7 %     (3 )     1,938       2.67               70,316  
Avalon Corners
  Stamford, CT     195       192,174       3.2     2000     986     90.3%     92.1 %             87.7 %             1,862       1.74               31,810  
Avalon Gates
  Trumbull, CT     340       381,322       37.0     1997     1,122     71.8%     81.5 %             93.0 %             1,664       1.21               36,525  
Avalon Glen
  Stamford, CT     238       221,828       4.1     1991     932     92.4%     90.2 %             91.4 %             1,734       1.68               31,440  
Avalon Haven
  North Haven, CT     128       140,107       10.6     2000     1,095     96.1%     95.9 %             91.0 %             1,553       1.36               13,766  
Avalon Lake
  Danbury, CT     135       166,231       32.0     1999     1,184     94.1%     95.7 %             95.2 %             1,774       1.38               17,050  
Avalon New Canaan (6)
  New Canaan, CT     104       130,104       9.1     2002     1,251     83.7%     82.4 %             31.0 %     (3 )     2,472       1.63               24,285  
Avalon on Stamford Harbor
  Stamford, CT     323       336,566       12.1     2003     1,042     94.1%     87.0 %     (3 )     N/A               2,052       1.71       (3 )     62,465  
Avalon Springs
  Wilton, CT     102       158,259       12.0     1996     1,552     94.1%     93.0 %             86.1 %             2,499       1.50               17,058  
Avalon Valley
  Danbury, CT     268       297,479       17.1     1999     1,070     93.7%     96.0 %             96.4 %             1,630       1.41               26,059  
Avalon Walk I & II
  Hamden, CT     764       761,441       38.4     1992/1994     996     87.0%     89.6 %             94.6 %             1,301       1.17               59,203  
Long Island, NY
                                                                                                           
Avalon Commons
  Smithtown, NY     312       363,049       20.6     1997     1,164     95.5%     98.1 %             98.1 %             1,829       1.54               33,322  
Avalon Court
  Melville, NY     494       597,104       35.4     1997/2000     1,209     91.9%     96.7 %             98.9 %             2,265       1.81               59,341  
Avalon Towers
  Long Beach, NY     109       124,836       1.3     1990/1995     1,145     93.6%     97.9 %             97.6 %             2,928       2.50               17,307  

12


 

Profile of Current, Development and Unconsolidated Communities (1)
(Dollars in thousands, except per apartment home data)

                                                                                                             
                                                Average economic           Average            
                Approx.           Year of   Average   Physical   occupancy
          rental rate
          Financial
        Number of   rentable           completion   size   occupancy                                   $ per   $ per           reporting
    City and state
  homes
  (Sq. Ft.)
  Acres
  / acquisition
  (Sq. Ft.)
  at 12/31/03
  2003
          2002
          Apt (4)
  Sq. Ft.
          cost (5)
Northern New Jersey
                                                                                                           
Avalon at Edgewater
  Edgewater, NJ     408       405,144       7.1     2002     993     90.9%     90.0 %             71.9 %     (3 )     2,070       1.88               74,760  
Avalon at Florham Park
  Florham Park, NJ     270       331,560       41.9     2001     1,228     88.9%     91.5 %             93.4 %             2,240       1.67               41,572  
Avalon Cove
  Jersey City, NJ     504       574,675       11.0     1997     1,140     90.7%     89.5 %             87.4 %             2,305       1.81               92,247  
The Tower at Avalon Cove
  Jersey City, NJ     269       241,825       2.8     1999     905     94.4%     91.9 %             85.6 %             2,096       2.14               49,749  
Central New Jersey
                                                                                                           
Avalon at Freehold
  Freehold, NJ     296       317,608       42.3     2002     1,073     91.9%     91.3 %             80.7 %     (3 )     1,573       1.34               34,434  
Avalon Run East
  Lawrenceville, NJ     206       265,198       27.0     1996     1,287     92.7%     91.9 %             93.0 %             1,604       1.14               16,294  
Avalon Watch
  West Windsor, NJ     512       485,871       64.0     1988     949     98.2%     92.4 %             92.0 %             1,323       1.29               29,981  
New York, NY
                                                                                                           
Avalon Riverview I (10)
  Long Island City, NY     372       332,940       1.0     2002     895     94.1%     86.8 %             37.3 %     (3 )     2,560       2.48               94,393  
Avalon Gardens
  Nanuet, NY     504       638,439       55.0     1998     1,267     95.8%     95.0 %             90.7 %             1,859       1.39               54,474  
Avalon Green
  Elmsford, NY     105       113,538       16.9     1995     1,081     87.6%     92.9 %             94.8 %             2,204       1.89               12,634  
Avalon on the Sound (8) (10)
  New Rochelle, NY     412       372,860       2.4     2001     905     89.8%     92.0 %             87.7 %             2,222       2.26               91,598  
Avalon View
  Wappingers Falls, NY     288       335,088       41.0     1993     1,164     92.0%     93.7 %             95.3 %             1,373       1.11               18,494  
Avalon Willow
  Mamaroneck, NY     227       199,945       4.0     2000     881     91.6%     92.9 %             90.3 %             2,108       2.22               47,057  
The Avalon
  Bronxville, NY     110       119,186       1.5     1999     1,085     95.5%     93.6 %             96.0 %             3,247       2.81               31,227  
MID-ATLANTIC
                                                                                                           
Baltimore, MD
                                                                                                           
Avalon at Fairway Hills I & II
  Columbia, MD     720       724,253       44.0     1987/1996     1,005     96.7%     95.5 %             95.0 %             1,143       1.08               45,091  
Avalon at Symphony Glen
  Columbia, MD     176       179,867       10.0     1986     1,022     97.7%     97.2 %             97.2 %             1,182       1.12               9,219  
Avalon Landing
  Annapolis, MD     158       117,033       13.8     1984/1995     741     95.6%     96.2 %             97.7 %             1,053       1.37               9,881  
Washington, DC
                                                                                                           
AutumnWoods
  Fairfax, VA     420       355,228       24.2     1989/1996     846     94.8%     93.6 %             93.8 %             1,089       1.20               31,022  
Avalon at Arlington Square
  Arlington, VA     842       909,449       18.9     2001     1,080     93.9%     87.5 %             73.8 %     (3 )     1,667       1.35               112,294  
Avalon at Ballston - Vermont & Quincy Towers (7)
  Arlington, VA     454       420,242       2.3     1990/1997     926     94.3%     93.5 %             90.9 %             1,405       1.42               47,488  
Avalon at Ballston - Washington Towers
  Arlington, VA     344       294,786       4.1     1990     857     94.8%     94.1 %             91.9 %             1,399       1.54               37,463  
Avalon at Cameron Court
  Alexandria, VA     460       467,292       16.0     1998     1,016     95.2%     93.8 %             94.6 %             1,497       1.38               43,246  
Avalon at Decoverly
  Rockville, MD     368       368,446       25.0     1991/1995     1,001     96.2%     95.4 %             92.7 %             1,265       1.20               31,820  
Avalon at Foxhall
  Washington, D.C.     308       298,725       2.7     1982     970     72.7%     62.1 %     (2 )     88.4 %     (2 )     1,782       1.14       (2 )     43,273  
Avalon at Fox Mill
  Herndon, VA     165       219,360       12.8     2000     1,329     94.5%     91.6 %             93.3 %             1,517       1.05               19,515  
Avalon at Gallery Place I
  Washington, DC     203       183,326       0.5     2003     903     68.5%     33.6 %     (3 )     N/A               2,200       0.82       (3 )     52,271  
Avalon at Providence Park
  Fairfax, VA     141       148,211       4.0     1988/1997     1,051     93.6%     94.5 %             96.0 %             1,270       1.14               11,301  
Avalon at Rock Spring (8) (10)
  North Bethesda, MD     386       388,480       10.2     2003     1,006     79.8%     51.8 %     (3 )     N/A               1,570       0.81       (3 )     45,834  
Avalon Crescent
  McLean, VA     558       613,426       19.1     1996     1,099     95.3%     92.4 %             93.4 %             1,585       1.33               57,339  
Avalon Crossing
  Rockville, MD     132       147,690       5.0     1996     1,119     88.6%     91.8 %             94.0 %             1,666       1.37               13,895  
Avalon Fields I & II
  North Potomac, MD     288       292,282       9.2     1998     1,050     97.9%     93.9 %             92.3 %             1,285       1.19               22,699  
Avalon Knoll
  Germantown, MD     300       290,365       26.7     1985     968     92.0%     94.4 %             95.0 %             1,054       1.03               8,697  

13


 

Profile of Current, Development and Unconsolidated Communities (1)
(Dollars in thousands, except per apartment home data)

                                                                                                             
                                                Average economic           Average            
                Approx.           Year of   Average   Physical   occupancy
          rental rate
          Financial
        Number of   rentable           completion   size   occupancy                                   $ per   $ per           reporting
    City and state
  homes
  (Sq. Ft.)
  Acres
  / acquisition
  (Sq. Ft.)
  at 12/31/03
  2003
          2002
          Apt (4)
  Sq. Ft.
          cost (5)
MIDWEST
                                                                                                           
Chicago, IL
                                                                                                           
200 Arlington Place
  Arlington Heights, IL     409       346,832       2.8     1987/2000     848     91.7%     89.8 %             92.3 %             1,280       1.36               49,998  
Avalon at Danada Farms (7)
  Wheaton, IL     295       350,606       19.2     1997     1,188     92.9%     91.3 %             93.5 %             1,282       0.98               38,454  
Avalon at Stratford Green (7)
  Bloomingdale, IL     192       237,204       12.7     1997     1,235     90.6%     90.8 %             91.5 %             1,261       0.93               21,992  
Avalon at West Grove (7)
  Westmont, IL     400       388,500       17.4     1967     971     88.5%     90.2 %             91.5 %             859       0.80               30,187  
PACIFIC NORTHWEST
                                                                                                           
Seattle, WA
                                                                                                           
Avalon at Bear Creek (7)
  Redmond, WA     264       288,250       22.2     1998     1,092     90.9%     91.9 %             94.3 %             1,116       0.94               34,461  
Avalon Bellevue
  Bellevue, WA     202       164,226       1.7     2001     813     97.0%     93.8 %             92.5 %             1,151       1.33               30,649  
Avalon Belltown
  Seattle, WA     100       80,200       0.7     2001     802     97.0%     94.9 %             83.8 %             1,277       1.51               18,365  
Avalon Brandemoor (7)
  Lynwood, WA     424       453,602       22.6     2001     1,070     92.9%     91.8 %             93.9 %             900       0.77               45,326  
Avalon Greenbriar
  Renton, WA     356       382,382       17.0     1987     1,074     91.3%     94.6 %             91.0 %             1,055       0.93               36,297  
Avalon HighGrove (7)
  Everett, WA     391       422,482       19.0     2000     1,081     96.4%     94.1 %             94.8 %             873       0.76               39,626  
Avalon ParcSquare (7)
  Redmond, WA     124       127,236       2.0     2000     1,026     97.6%     95.9 %             95.7 %             1,234       1.15               19,134  
Avalon Redmond Place (7)
  Redmond, WA     222       206,004       8.4     1991/1997     928     93.7%     92.1 %             94.6 %             1,036       1.03               26,064  
Avalon RockMeadow (7)
  Bothell, WA     206       240,817       11.2     2000     1,169     97.1%     93.2 %             93.3 %             1,018       0.81               24,603  
Avalon WildReed (7)
  Everett, WA     234       259,080       23.0     2000     1,107     96.6%     94.9 %             94.4 %             848       0.73               22,956  
Avalon WildWood (7)
  Lynwood, WA     238       313,107       15.8     2001     1,316     97.9%     94.5 %             94.1 %             1,086       0.78               32,893  
Avalon Wynhaven (7)
  Issaquah, WA     333       424,604       11.6     2001     1,275     85.9%     87.0 %             89.3 %             1,209       0.82               52,591  
NORTHERN CALIFORNIA
                                                                                                           
Oakland-East Bay, CA
                                                                                                           
Avalon at Union Square
  Union City, CA     208       150,140       8.5     1973/1996     722     95.7%     96.4 %             94.8 %             1,058       1.41               22,081  
Avalon at Willow Creek
  Fremont, CA     235       197,575       13.5     1985/1994     841     94.9%     97.2 %             95.8 %             1,240       1.43               34,550  
Avalon Dublin
  Dublin, CA     204       179,004       13.0     1989/1997     877     91.2%     94.4 %             94.9 %             1,334       1.44               26,788  
Avalon Fremont
  Fremont, CA     443       446,422       22.3     1994     1,008     96.6%     95.8 %             93.7 %             1,447       1.37               77,639  
Avalon Pleasanton
  Pleasanton, CA     456       377,438       14.7     1988/1994     828     94.3%     95.9 %             95.7 %             1,231       1.43               60,764  
Waterford
  Hayward, CA     544       451,937       11.1     1985/1986     831     89.3%     93.3 %             92.9 %             1,112       1.25               59,459  
San Francisco, CA
                                                                                                           
Avalon at Cedar Ridge
  Daly City, CA     195       141,411       7.0     1972/1997     725     95.4%     95.7 %             96.6 %             1,345       1.77               25,683  
Avalon at Diamond Heights
  San Francisco, CA     154       123,080       3.0     1972/1994     799     96.8%     97.9 %             92.2 %             1,514       1.86               24,636  
Avalon at Mission Bay North (10)
  San Francisco, CA     250       244,224       1.4     2003     977     94.0%     52.3 %     (3 )     N/A               2,444       1.31       (3 )     79,424  
Avalon at Nob Hill
  San Francisco, CA     185       109,238       1.4     1990/1995     590     94.6%     93.4 %             94.3 %             1,470       2.32               27,568  
Avalon Sunset Towers
  San Francisco, CA     243       175,511       16.0     1961/1996     722     97.5%     95.5 %             95.0 %             1,525       2.02               28,382  
Avalon Foster City
  Foster City, CA     288       222,276       11.0     1973/1994     772     97.9%     95.7 %             96.6 %             1,335       1.66               43,054  
Avalon Pacifica
  Pacifica, CA     220       186,785       21.9     1971/1995     849     98.2%     95.8 %             95.9 %             1,403       1.58               31,415  
Avalon Towers by the Bay
  San Francisco, CA     226       243,033       1.0     1999     1,075     97.8%     94.0 %             93.8 %             2,467       2.16               66,922  
Crowne Ridge
  San Rafael, CA     254       221,525       21.9     1973/1996     872     98.0%     92.5 %             93.4 %             1,336       1.42               31,587  

14


 

Profile of Current, Development and Unconsolidated Communities (1)
(Dollars in thousands, except per apartment home data)

                                                                                                             
                                                Average economic           Average            
                Approx.           Year of   Average   Physical   occupancy
          rental rate
          Financial
        Number of   rentable           completion   size   occupancy                                   $ per   $ per           reporting
    City and state
  homes
  (Sq. Ft.)
  Acres
  / acquisition
  (Sq. Ft.)
  at 12/31/03
  2003
    2002
    Apt (4)
  Sq. Ft.
          cost (5)
San Jose, CA
                                                                                                           
Avalon at Blossom Hill
  San Jose, CA     324       322,207       7.5     1995     994     96.3%     96.8 %             93.4 %             1,463       1.42               60,956  
Avalon at Cahill Park
  San Jose, CA     218       218,245       3.8     2002     1,001     91.7%     93.0 %             39.7 %     (3 )     1,669       1.55               52,352  
Avalon at Creekside
  Mountain View, CA     294       215,680       15.0     1962/1997     734     96.3%     95.7 %             96.3 %             1,267       1.65               42,966  
Avalon at Foxchase
  San Jose, CA     396       335,212       12.0     1988/1987     844     96.9%     97.7 %             94.9 %             1,222       1.41               59,295  
Avalon at Parkside
  Sunnyvale, CA     192       199,353       8.0     1991/1996     1,038     98.4%     95.8 %             95.8 %             1,593       1.47               37,922  
Avalon at Pruneyard
  Campbell, CA     252       197,000       8.5     1968/1997     782     96.0%     97.0 %             94.9 %             1,174       1.46               31,879  
Avalon at River Oaks
  San Jose, CA     226       210,050       4.0     1990/1996     929     94.7%     95.9 %             93.9 %             1,418       1.46               44,990  
Avalon Campbell
  Campbell, CA     348       326,796       10.8     1995     939     96.8%     94.0 %             93.1 %             1,451       1.45               60,035  
Avalon Cupertino
  Cupertino, CA     311       293,328       8.0     1999     943     97.7%     95.2 %             93.9 %             1,615       1.63               49,109  
Avalon Mountain View (6)
  Mountain View, CA     248       211,552       10.5     1986     853     95.2%     95.3 %             93.8 %             1,520       1.70               50,697  
Avalon on the Alameda
  San Jose, CA     305       299,722       8.9     1999     983     92.8%     93.9 %             92.7 %             1,787       1.71               56,432  
Avalon Rosewalk
  San Jose, CA     456       450,252       16.6     1997/1999     987     96.1%     96.6 %             92.7 %             1,458       1.43               78,261  
Avalon Silicon Valley
  Sunnyvale, CA     710       658,591       13.6     1997     928     97.2%     93.8 %             92.2 %             1,654       1.67               121,140  
Avalon Sunnyvale
  Sunnyvale, CA     220       159,653       5.0     1987/1995     726     98.6%     96.8 %             95.2 %             1,272       1.70               35,075  
Avalon Towers on the Peninsula
  Mountain View, CA     211       218,392       1.9     2002     1,035     97.2%     94.4 %             62.4 %     (3 )     2,123       1.94               65,692  
CountryBrook (7)
  San Jose, CA     360       323,012       14.0     1985/1996     897     93.6%     93.3 %             93.1 %             1,222       1.27               48,229  
Fairway Glen
  San Jose, CA     144       119,492       6.0     1986     830     99.3%     97.4 %             95.1 %             1,195       1.40               17,293  
San Marino
  San Jose, CA     248       209,465       11.5     1984/1988     845     96.8%     96.7 %             93.7 %             1,247       1.43               34,196  
SOUTHERN CALIFORNIA
                                                                                                           
Los Angeles, CA
                                                                                                           
Avalon at Media Center
  Burbank, CA     748       530,114       14.7     1961/1997     709     95.9%     94.6 %             90.3 %     (2 )     1,167       1.56               75,819  
Avalon at Warner Center
  Woodland Hills, CA     227       191,645       6.8     1979/1998     844     93.4%     95.0 %             96.5 %             1,364       1.53               26,445  
Avalon Glendale (10)
  Burbank, CA     223       241,712       5.1     2003     1,084     58.3%     24.8 %     (3 )     N/A               2,092       0.48       (3 )     39,920  
Avalon Woodland Hills
  Woodland Hills, CA     663       592,722       18.2     1989/1997     894     93.8%     95.0 %             95.4 %             1,304       1.39               71,862  
The Promenade
  Burbank, CA     400       360,587       6.9     1988/2002     923     91.5%     93.1 %             92.8 %     (3 )     1,484       1.53               71,003  
Orange County, CA
                                                                                                           
Avalon at Laguna Niguel
  Laguna Niguel, CA     176       174,848       10.0     1988/1998     993     94.9%     95.1 %             96.8 %             1,235       1.18               20,995  
Avalon at Pacific Bay
  Huntington Beach, CA     304       268,000       9.7     1971/1997     882     94.7%     96.7 %             95.3 %             1,248       1.37               31,947  
Avalon at South Coast
  Costa Mesa, CA     258       208,890       8.9     1973/1996     810     92.6%     95.3 %             96.5 %             1,180       1.39               24,837  
Avalon Mission Viejo
  Mission Viejo, CA     166       124,600       7.8     1984/1996     751     98.2%     96.8 %             95.9 %             1,114       1.44               13,298  
Avalon Newport
  Costa Mesa, CA     145       120,690       6.6     1956/1996     832     96.6%     96.2 %             97.7 %             1,389       1.60               10,113  
Avalon Santa Margarita
  Rancho Santa
Margarita, CA
    301       229,593       20.0     1990/1997     763     92.7%     94.0 %             94.4 %             1,137       1.40               23,955  
San Diego, CA
                                                                                                           
Avalon at Cortez Hill
  San Diego, CA     294       224,840       1.2     1973/1998     765     95.2%     94.6 %             92.5 %             1,245       1.54               34,401  
Avalon at Mission Bay
  San Diego, CA     564       402,327       12.9     1969/1997     713     96.1%     96.1 %             96.2 %             1,278       1.72               66,059  
Avalon at Mission Ridge
  San Diego, CA     200       208,100       4.0     1960/1997     1,041     94.5%     95.0 %             96.4 %             1,379       1.26               21,675  
Avalon at Penasquitos Hills
  San Diego, CA     176       141,120       8.8     1982/1997     802     95.5%     93.2 %             95.2 %             1,105       1.28               14,353  

15


 

Profile of Current, Development and Unconsolidated Communities (1)
(Dollars in thousands, except per apartment home data)

                                                                                                             
                                                Average economic           Average            
                Approx.
area
          Year of   Average   Physical   occupancy
          rental rate
          Financial
        Number of   rentable           completion   size   occupancy                                   $ per   $ per           reporting
    City and state
  homes
  (Sq. Ft.)
  Acres
  / acquisition
  (Sq. Ft.)
  at 12/31/03
  2003
          2002
          Apt (4)
  Sq. Ft.
          cost (5)
DEVELOPMENT COMMUNITIES
                                                                                                           
Avalon at Crane Brook
  Danvers & Peabody, MA     387       491,870       20.0     N/A     1,271     N/A     N/A               N/A               N/A       N/A               26,029  
Avalon at Glen Cove South
  Glen Cove, NY     256       270,000       4.0     N/A     1,050     N/A     N/A               N/A               N/A       N/A               49,731  
Avalon at Grosvenor Station (7)
  North Bethesda, MD     497       478,530       9.9     N/A     963     N/A     N/A               N/A               N/A       N/A               69,618  
Avalon at Steven’s Pond
  Saugus, MA     326       360,509       82.0     N/A     1,106     N/A     N/A               N/A               N/A       N/A               53,172  
Avalon at the Pinehills I
  Plymouth, MA     101       197,354       6.0     N/A     1,954     N/A     N/A               N/A               N/A       N/A               4,834  
Avalon Darien
  Darien, CT     189       242,311       30.0     N/A     1,282     N/A     N/A               N/A               N/A       N/A               37,213  
Avalon at Traville
  North Potomac, MD     520       573,560       47.9     N/A     1,103     N/A     N/A               N/A               N/A       N/A               46,056  
Avalon Milford I
  Milford, CT     246       218,000       22.0     N/A     886     N/A     N/A               N/A               N/A       N/A               14,926  
Avalon Run East II
  Lawrenceville, NJ     312       341,152       70.0     N/A     1,095     N/A     N/A               N/A               N/A       N/A               19,014  
Avalon Pines I
  Coram, NY     298       442,895       32.0     N/A     1,485     N/A     N/A               N/A               N/A       N/A               11,127  
Avalon Chrystie Place I (11)
  New York, NY     361       266,555       1.5     N/A     738     N/A     N/A               N/A               N/A       N/A               25,194  
UNCONSOLIDATED COMMUNITIES
                                                                                                           
Avalon Arbor (9)
  Shrewsbury, MA     302       297,989       26.0     1991     986     88.4%     90.4 %             92.0 %             1,246       1.14               N/A  
Avalon Bedford (8)
  Stamford, CT     368       331,655       4.6     1961/1998     819     88.4%     88.9 %             90.9 %             1,570       1.55               N/A  
Avalon Grove (8)
  Stamford, CT     402       363,408       12.0     1996     906     89.8%     90.3 %             84.9 %             1,942       1.94               N/A  
Avalon Run (6)
  Lawrenceville, NJ     426       443,168       9.0     1994     1,010     91.8%     90.5 %             91.4 %             1,366       1.19               N/A  

(1)   We own a fee simple interest in the communities listed, excepted as noted below.
 
(2)   Represents community which was under redevelopment during the year, resulting in lower average economic occupancy and average rental rate per square foot for the year.
 
(3)   Represents community that completed development or was purchased during the year, which could result in lower average economic occupancy and average rental rate per square foot for the year.
 
(4)   Represents the average rental revenue per occupied apartment home.
 
(5)   Costs are presented in accordance with generally accepted accounting principles. For current Development Communities, cost represents total costs incurred through December 31, 2003. Financial reporting costs are excluded for unconsolidated communities, see Note 6, “Investments in Unconsolidated Entities.”
 
(6)   We own a general partnership interest in a partnership that owns a fee simple interest in this community.
 
(7)   We own a general partnership interest in a partnership structured as a DownREIT that owns this community.
 
(8)   We own a membership interest in a limited liability company that holds a fee simple interest in this community.
 
(9)   We have a 100% interest in a senior participating mortgage note secured by this community, which allows us to share in part of the rental income or resale proceeds of the community.
 
(10)   Community is located on land subject to a land lease.
 
(11)   This community is being financed under a joint venture structure with third-party financing, in which the community is owned by a limited liability company managed by one of our wholly-owned subsidiaries.

16


 

Features and Recreational Amenities - Current and Development Communities

                                                                                                                     
    1 BR
  2BR
  3BR
                  Washer
& dryer
              Large
storage
  Balcony,
patio
          Non-
direct
  Direct   Homes w/
pre-wired
    1/1.5   1/1.5   2/2.5   2/2.5       Studios/           Parking   hook-ups   Vaulted           or walk-in   deck or   Built-in   Car-   access   access   security
    BA
  BA
  /3 BA
  BA
  3BA
  efficiencies
  Other
  Total
  spaces
  or units
  ceilings
  Lofts
  Fireplaces
  closet
  sunroom
  bookcases
  ports
  garages
  garages
  garages
CURRENT COMMUNITIES (1)
                                                                                                                   
 
                                                                                                                   
NORTHEAST
                                                                                                                   
 
                                                                                                                   
Boston, MA
                                                                                                                   
Avalon at Center Place
    103       —       111       5       —       6       —       225       371     All   None   None   None   Half   Some   None   No   No   No   None
Avalon at Faxon Park
    68       —       75       28       —       —       —       171       327     All   Some   Some   Some   All   All   None   No   Yes   No   All
Avalon at Flanders Hill
    108       —       142       30       —       —       —       280       589     All   None   Some   Some   All   Some   None   No   Yes   Yes   All
Avalon at Lexington
    28       24       90       56       —       —       —       198       362     All   Some   Some   Some   Most   All   None   Yes   Yes   No   All
Avalon at Newton Highlands
    90       46       92       56       4       6       —       294       540     All   Some   Some   Some   Most   Most   None   No   Yes   No   All
Avalon at Prudential Center
    361       —       237       —       23       148       12       781       538     None   None   None   None   Most   Some   None   No   No   No   None
Avalon Essex
    50       —       62       —       —       —       42       154       336     All   None   Some   Some   All   All   None   No   Yes   Yes   All
Avalon Estates
    66       16       80       —       —       —       —       162       345     All   Some   Some   Some   All   All   None   No   Yes   Yes   All
Avalon Ledges
    124       —       152       28       —       —       —       304       594     All   None   Some   Some   All   Some   None   No   Yes   No   All
Avalon Oaks
    60       24       96       24       —       —       —       204       394     All   Some   Some   Some   All   All   None   No   Yes   No   All
Avalon Oaks West
    48       12       48       12       —       —       —       120       232     All   Some   Some   Some   All   All   None   No   Yes   No   All
Avalon Orchards
    69       12       75       —       —       —       —       156       307     All   None   Half   Some   Most   All   None   No   Yes   Yes   All
Avalon Summit
    154       61       28       2       —       —       —       245       366     None   None   None   None   None   All   None   No   Yes   No   None
Avalon West
    40       —       55       25       —       —       —       120       285     All   Some   Some   Some   All   Half   None   No   Yes   Yes   All
 
                                                                                                                   
Fairfield-New Haven, CT
                                                                                                                   
Avalon at Greyrock Place
    104       91       99       12       —       —       —       306       464     All   None   None   None   All   All   None   No   No   Yes   All
Avalon Corners
    118       —       77       —       —       —       —       195       273     All   Some   Some   Some   All   All   None   No   Yes   No   All
Avalon Gates
    122       —       168       50       —       —       —       340       688     All   Some   Some   None   All   All   None   Yes   Yes   No   All
Avalon Glen
    124       —       114       —       —       —       —       238       363     Most   Some   Some   Some   Half   Most   None   Yes   Yes   No   Most
Avalon Haven
    44       60       —       24       —       —       —       128       256     All   None   Some   Some   All   All   None   Yes   Yes   No   All
Avalon Lake
    36       —       46       —       —       24       29       135       290     All   Some   Some   Some   All   All   None   No   Yes   No   All
Avalon New Canaan
    16       —       64       24       —       —       —       104       194     All   None   Some   Some   All   All   None   No   Yes   Yes   All
Avalon on Stamford Harbor
    159       —       130       20       —       14       —       323       623     All   Some   Some   Some   Most   All   None   No   No   No   All
Avalon Springs
    —       —       70       32       —       —       —       102       264     All   Half   Half   Most   All   All   None   No   No   Yes   All
Avalon Valley
    106       —       134       28       —       —       —       268       637     All   Some   Some   Some   All   All   None   Yes   Yes   No   All
Avalon Walk I & II
    272       116       122       74       —       —       180       764       1,411     All   Some   Some   Half   All   All   Some   Yes   No   No   Half
 
                                                                                                                   
Long Island, NY
                                                                                                                   
Avalon Commons
    128       40       112       32       —       —       —       312       485     All   Some   Some   Some   All   All   None   No   Yes   No   All
Avalon Court
    172       54       194       44       30       —       —       494       1,110     All   Some   Most   Some   All   All   None   No   Yes   Yes   All
Avalon Towers
    —       —       37       1       3       1       67       109       198     All   None   None   None   All   Most   None   No   No   Yes   All
 
                                                                                                                   
Northern New Jersey
                                                                                                                   
Avalon at Edgewater
    158       —       190       60       —       —       —       408       872     All   None   Some   Some   All   All   None   No   No   Yes   Some
Avalon at Florham Park
    46       —       107       117       —       —       —       270       581     All   Most   None   Some   All   Some   None   No   No   Yes   All
Avalon Cove
    190       —       190       46       2       —       76       504       464     All   Some   Some   Some   All   Most   None   No   Yes   Some   All
The Tower at Avalon Cove
    147       24       74       24       —       —       —       269       296     All   None   None   None   Half   Some   None   No   Yes   No   All
 
                                                                                                                   
Central New Jersey
                                                                                                                   
Avalon at Freehold
    42       41       176       37       —       —       —       296       591     All   Some   Some   Some   All   All   None   No   Yes   No   None
Avalon Run East
    64       —       106       36       —       —       —       206       401     All   Some   Some   Some   All   All   None   Yes   Yes   Yes   All
Avalon Watch
    252       36       142       82       —       —       —       512       781     Most   Some   None   Some   All   All   None   No   Yes   No   None

17


 

Features and Recreational Amenities - Current and Development Communities

                                                                                                                     
    1 BR
  2BR
  3BR
                  Washer
& dryer
              Large
storage
  Balcony,
patio
          Non-
direct
  Direct   Homes w/
pre-wired
    1/1.5   1/1.5   2/2.5   2/2.5       Studios/           Parking   hook-ups   Vaulted           or walk-in   deck or   Built-in   Car-   access   access   security
    BA
  BA
  /3 BA
  BA
  3BA
  efficiencies
  Other
  Total
  spaces
  or units
  ceilings
  Lofts
  Fireplaces
  closet
  sunroom
  bookcases
  ports
  garages
  garages
  garages
 
                                                                                                                   
New York, NY
                                                                                                                   
Avalon Riverview I
    184       —       114       —       31       43       —       372       426     All   None   None   None   Most   Some   None   No   Yes   No   Some
Avalon Gardens
    208       48       144       104       —       —       —       504       1,382     All   Half   Half   Some   All   Most   None   Yes   Yes   Yes   All
Avalon Green
    25       24       56       —       —       —       —       105       208     All   Some   Half   Some   All   All   None   Yes   No   No   All
Avalon on the Sound
    143       —       184       22       20       43       —       412       648     Most   None   Some   None   Most   Some   None   No   Yes   No   Some
Avalon View
    115       47       62       64       —       —       —       288       598     All   Some   Some   Some   Most   All   None   Yes   No   No   None
Avalon Willow
    150       77       —       —       —       —       —       227       371     All   Some   Some   None   Most   All   None   No   Yes   Yes   All
The Avalon
    55       2       43       10       —       —       —       110       167     All   Some   Some   Some   Most   Half   None   No   Yes   No   All
 
                                                                                                                   
MID-ATLANTIC
                                                                                                                   
 
                                                                                                                   
Baltimore, MD
                                                                                                                   
Avalon at Fairway Hills I & II
    283       223       154       60       —       —       —       720       1,171     All   Some   None   Some   Some   All   Some   No   No   No   None
Avalon at Symphony Glen
    88       14       54       20       —       —       —       174       268     All   Some   None   Most   All   All   Half   No   No   No   None
Avalon Landing
    65       18       57       —       —       —       18       158       256     All   None   None   Most   Most   All   None   Yes   No   No   None
 
                                                                                                                   
Washington, DC
                                                                                                                   
AutumnWoods
    220       72       96       —       —       —       32       420       720     All   Some   None   Some   All   All   Some   Yes   No   No   None
Avalon at Arlington Square
    383       20       342       97       —       —       —       842       1,411     All   Some   Some   Some   Some   Some   Some   No   No   Some   All
Avalon at Ballston — Vermont & Quincy Towers
    333       37       84       —       —       —       —       454       972     All   None   None   None   Most   All   None   No   No   Yes   None
Avalon at Ballston — Washington Towers
    205       28       111       —       —       —       —       344       470     All   None   None   Some   Most   All   None   No   No   Yes   None
Avalon at Cameron Court
    208       —       168       —       —       —       84       460       897     All   Some   Some   Some   All   Most   None   No   Yes   Yes   All
Avalon at Decoverly
    156       —       104       64       44       —       —       368       627     All   Some   Some   Most   Most   All   None   No   No   No   None
Avalon at Foxhall
    160       70       —       3       —       27       48       308       335     All   None   None   Some   Most   All   Some   No   Yes   No   None
Avalon at Fox Mill
    —       —       92       73       —       —       —       165       366     All   Most   None   Most   All   All   None   No   No   Yes   All
Avalon at Gallery Place I
    111       77       —       4       —       11       —       203       125     All   Some   None   None   All   Some   None   No   No   No   None
Avalon at Providence Park
    19       —       112       4       —       —       6       141       299     All   None   None   Most   All   All   None   No   No   No   None
Avalon at Rock Spring
    178       39       133       36       —       —       —       386       680     All   Some   Some   Some   Most   Most   Some   No   No   Yes   All
Avalon Crescent
    186       26       346       —       —       —       —       558       989     All   Some   Some   Half   Most   All   Some   No   Yes   Yes   All
Avalon Crossing
    —       27       105       —       —       —       —       132       224     All   Some   Some   Half   All   All   Some   No   Yes   Yes   All
Avalon Fields I & II
    74       32       84       32       —       —       66       288       461     All   Some   Some   Half   All   Most   None   No   Yes   No   All
Avalon Knoll
    136       55       81       28       —       —       —       300       477     All   Some   None   Half   All   All   Some   No   No   No   None
 
                                                                                                                   
MIDWEST
                                                                                                                   
 
                                                                                                                   
Chicago, IL
                                                                                                                   
200 Arlington Place
    142       89       148       —       —       30       —       409       650     All   None   None   None   All   Some   None   No   Yes   No   None
Avalon at Danada Farms
    80       52       134       29       —       —       —       295       555     All   None   None   Some   All   Some   Some   No   No   Yes   None
Avalon at Stratford Green
    45       9       108       21       —       —       9       192       420     All   None   None   Some   Most   Some   Some   No   Yes   Yes   None
Avalon at West Grove
    200       200       —       —       —       —       —       400       599     None   None   None   None   None   All   None   Yes   No   No   None
 
                                                                                                                   
PACIFIC NORTHWEST
                                                                                                                   
 
                                                                                                                   
Seattle, WA
                                                                                                                   
Avalon at Bear Creek
    55       40       110       59       —       —       —       264       515     All   All   None   Most   All   All   Some   Yes   Yes   Yes   All
Avalon Bellevue
    110       —       67       —       —       25       —       202       300     All   None   Some   Some   All   All   None   No   No   No   None
Avalon Belltown
    64       —       20       —       —       16       —       100       134     All   None   None   None   All   Some   None   No   No   No   Some
Avalon Brandemoor
    88       109       149       78       —       —       —       424       732     All   Some   None   Most   All   All   Some   Yes   Yes   Yes   All
Avalon Greenbriar
    16       19       217       169       —       —       —       421       731     All   Some   None   Most   All   All   Some   Yes   No   No   None
Avalon HighGrove
    84       119       124       56       8       —       —       391       721     All   Some   None   Most   Most   All   Some   Yes   Yes   Yes   All
Avalon ParcSquare
    31       26       55       5       7       —       —       124       189     All   None   None   None   All   All   None   No   No   No   All
Avalon Redmond Place
    76       44       67       35       —       —       —       222       384     All   Some   None   Most   All   All   None   Yes   Yes   No   None
Avalon RockMeadow
    28       48       86       28       16       —       —       206       415     All   Some   None   Most   Most   All   Some   Yes   Yes   Yes   All
Avalon WildReed
    36       60       78       60       —       —       —       234       463     All   Some   None   Most   Most   All   Some   Yes   Yes   No   All
Avalon Wildwood
    5       —       211       —       17       —       5       238       484     All   Some   None   Most   Some   Most   None   No   No   Yes   All
Avalon Wynhaven
    3       42       239       13       28       —       8       333       1,486     All   Most   Some   Most   All   All   None   Yes   Yes   Yes   All

18


 

Features and Recreational Amenities - Current and Development Communities

                                                                                                                     
    1 BR
  2BR
  3BR
                  Washer
& dryer
              Large
storage
  Balcony,
patio
          Non-
direct
  Direct   Homes w/
pre-wired
    1/1.5   1/1.5   2/2.5   2/2.5       Studios/           Parking   hook-ups   Vaulted           or walk-in   deck or   Built-in   Car-   access   access   security
    BA
  BA
  /3 BA
  BA
  3BA
  efficiencies
  Other
  Total
  spaces
  or units
  ceilings
  Lofts
  Fireplaces
  closet
  sunroom
  bookcases
  ports
  garages
  garages
  garages
 
                                                                                                                   
NORTHERN CALIFORNIA
                                                                                                                   
 
                                                                                                                   
Oakland-East Bay, CA
                                                                                                                   
Avalon at Union Square
    124       84       —       —       —       —       —       208       210     None   None   None   Most   All   All   None   Yes   No   No   None
Avalon at Willow Creek
    99       —       136       —       —       —       —       235       240     All   None   None   None   All   All   None   Yes   No   No   None
Avalon Dublin
    72       8       60       48       —       —       16       204       435     Most   Some   None   Most   All   All   None   No   Yes   No   None
Avalon Fremont
    130       81       176       —       56       —       —       443       892     All   Most   None   Some   Most   All   None   Yes   Yes   No   All
Avalon Pleasanton
    238       —       218       —       —       —       —       456       856     All   Some   None   Most   All   All   None   Yes   Yes   Yes   None
Waterford
    208       —       336       —       —       —       —       544       910     Some   Some   None   None   All   All   None   Yes   No   No   None
 
                                                                                                                   
San Francisco, CA
                                                                                                                   
Avalon at Cedar Ridge
    117       33       24       —       —       21       —       195       259     None   None   Some   None   Some   All   None   Yes   No   Yes   None
Avalon at Diamond Heights
    90       —       49       15       —       —       —       154       155     None   Some   None   None   All   All   None   No   Yes   No   None
Avalon at Mission Bay North
    148       —       95       6       —       1       —       250       198     All   None   Some   None   All   Some   None   No   Yes   No   None
Avalon at Nob Hill
    114       —       25       —       —       46       —       185       104     None   None   None   None   None   Some   Most   No   Yes   No   None
Avalon Sunset Towers
    183       20       20       —       —       20       —       243       244     None   None   None   None   None   Some   None   No   No   Yes   None
Avalon Foster City
    124       123       1       —       —       40       —       288       490     None   None   None   None   Most   Most   None   Yes   No   No   None
Avalon Pacifica
    58       106       56       —       —       —       —       220       329     None   None   None   Some   Some   All   None   Yes   Yes   No   None
Avalon Towers by the Bay
    103       —       120       —       3       —       —       226       235     All   Some   None   Some   Half   Most   None   No   No   Yes   All
Crowne Ridge
    158       68       24       —       —       4       —       254       396     Some   Some   None   Some   None   All   None   Yes   No   Yes   None
 
                                                                                                                   
San Jose, CA
                                                                                                                   
Avalon at Blossom Hill
    90       —       210       —       24       —       —       324       379     All   Some   None   None   Most   All   None   Yes   Yes   No   All
Avalon at Cahill Park
    118       —       94       —       6       —       —       218       283     All   Some   Some   Some   Most   All   None   No   Yes   No   None
Avalon at Creekside
    158       128       —       —       —       8       —       294       441     None   None   None   Some   None   Most   None   Yes   No   No   None
Avalon at Foxchase
    168       —       228       —       —       —       —       396       666     All   Some   None   None   Some   All   None   Yes   No   No   None
Avalon at Parkside
    60       —       96       36       —       —       —       192       351     All   Some   None   Half   All   All   Some   Yes   Yes   No   None
Avalon at Pruneyard
    212       40       —       —       —       —       —       252       400     All   None   None   None   None   Half   None   Yes   Yes   No   None
Avalon at River Oaks
    100       —       126       —       —       —       —       226       358     All   None   None   Most   All   All   None   No   No   Yes   None
Avalon Campbell
    156       —       180       —       12       —       —       348       454     All   Some   None   None   All   All   None   Yes   Yes   No   All
Avalon Cupertino
    145       —       152       —       14       —       —       311       501     All   Some   None   Some   Some   All   Some   No   Yes   No   None
Avalon Mountain View
    108       —       88       52       —       —       —       248       248     All   Some   None   None   Some   All   None   Yes   No   No   None
Avalon on the Alameda
    113       —       164       —       28       —       —       305       558     All   Some   None   Some   All   All   Some   No   Yes   No   All
Avalon Rosewalk
    168       —       264       —       24       —       —       456       705     All   Some   None   Some   Some   All   Most   Yes   Yes   No   All
Avalon Silicon Valley
    338       —       336       18       15       3       —       710       1,400     All   Some   Some   Some   Most   All   Some   No   Yes   No   None
Avalon Sunnyvale
    112       10       54       —       —       44       —       220       394     Some   None   None   None   All   All   None   No   No   Yes   None
Avalon Towers on the Peninsula
    90       —       115       —       6       —       —       211       512     All   None   None   None   Most   All   None   No   Yes   No   None
CountryBrook
    108       —       252       —       —       —       —       360       692     All   Some   None   All   None   All   None   Yes   Yes   No   None
Fairway Glen
    60       —       84       —       —       —       —       144       245     All   Some   None   None   None   All   None   Yes   No   No   Some
San Marino
    103       —       145       —       —       —       —       248       439     All   Some   None   None   Most   All   None   Yes   No   No   None
 
                                                                                                                   
SOUTHERN CALIFORNIA
                                                                                                                   
 
                                                                                                                   
Los Angeles, CA
                                                                                                                   
Avalon at Media Center
    296       102       117       12       —       221       —       748       910     Some   None   None   Some   Some   Some   None   Yes   Yes   No   None
Avalon at Warner Center
    88       54       65       20       —       —       —       227       449     All   Some   None   Some   Some   All   None   Yes   No   No   None
Avalon Glendale
    75       —       121       —       27       —       —       223       460     All   None   None   Some   All   All   None   No   Yes   No   All
Avalon Woodland Hills
    222       —       441       —       —       —       —       663       1,353     Some   None   Some   None   Most   All   None   No   No   No   None
The Promenade
    153       —       196       51       —       —       —       400       720     Some   None   Some   All   Some   All   None   No   No   No   None

19


 

Features and Recreational Amenities - Current and Development Communities

                                                                                                                     
    1 BR
  2BR
  3BR
                  Washer
& dryer
              Large
storage
  Balcony,
patio
          Non-
direct
  Direct   Homes w/
pre-wired
    1/1.5   1/1.5   2/2.5   2/2.5       Studios/           Parking   hook-ups   Vaulted           or walk-in   deck or   Built-in   Car-   access   access   security
    BA
  BA
  /3 BA
  BA
  3BA
  efficiencies
  Other
  Total
  spaces
  or units
  ceilings
  Lofts
  Fireplaces
  closet
  sunroom
  bookcases
  ports
  garages
  garages
  garages
 
                                                                                                                   
Orange County, CA
                                                                                                                   
Avalon at Pacific Bay
    144       56       104       —       —       —       —       304       485     All   None   None   None   Half   All   None   Yes   Yes   No   None
Avalon at South Coast
    124       —       86       —       —       48               258       426     Some   Half   None   None   Half   All   None   Yes   Yes   No   None
Avalon Laguna Niguel
    —       —       176       —       —       —       —       176       381     None   Some   None   All   None   Most   None   Yes   No   No   None
Avalon Mission Viejo
    94       28       44       —       —       —       —       166       243     None   None   None   None   None   All   None   Yes   Yes   No   None
Avalon Newport
    44       54       —       35       —       12       —       145       244     Most   Some   None   Some   Most   Most   Some   Yes   Yes   No   None
Avalon Santa Margarita
    160       —       141       —       —       —       —       301       515     All   None   None   None   None   All   None   Yes   Yes   No   None
 
                                                                                                                   
San Diego, CA
                                                                                                                   
Avalon at Cortez Hill
    114       —       83       —       —       97       —       294       292     None   None   None   None   None   All   None   No   No   Yes   None
Avalon at Mission Bay
    270       9       165       —       —       120       —       564       746     None   None   None   None   Some   All   None   No   Yes   No   None
Avalon at Mission Ridge
    18       1       98       83       —       —       —       200       381     Most   None   None   Most   Most   Most   None   No   Yes   No   None
Avalon at Penasquitos Hills
    48       48       80       —       —       —       —       176       273     All   None   None   All   Some   All   All   Yes   No   No   None
 
                                                                                                                   
DEVELOPMENT COMMUNITIES
                                                                                                                   
 
                                                                                                                   
Avalon at Crane Brook
    160       12       177       38       —       —       —       387       737     All   Some   Some   Some   All   Some   None   No   Yes   No   All
Avalon at Glen Cove South
    112       —       91       —       —       53       —       256       458     All   None   None   Some   Most   Some   None   No   No   No   Some
Avalon at Grosvenor Station
    265       33       185       13       —       1       —       497       742     All   Some   Some   Some   Most   All   None   No   No   Yes   All
Avalon at Steven’s Pond
    102       —       202       22       —       —       —       326       663     All   Some   Some   Some   All   All   Some   No   Yes   Yes   All
Avalon at the Pinehills
    12       —       73       16       —       —       —       101       246     All   Some   Some   Some   All   All   None   No   No   Yes   All
Avalon Darien
    77       —       78       32       —       —       2       189       472     All   Some   Some   Some   Some   All   None   No   No   Yes   All
Avalon at Traville
    190       30       232       68       —       —       —       520       1,084     All   Some   Some   Some   Most   Most   Some   No   Yes   Yes   None
Avalon Milford I
    184       —       62       —       —       —       —       246       426     All   Some   None   Some   All   All   None   Yes   Yes   No   All
Avalon Run East II
    72       36       148       56       —       —       —       312       697     All   Some   Some   Some   Most   All   None   No   Yes   Yes   All
Avalon Pines I
    72       —       220       —       6       —       —       298       1,094     All   Most   Some   Some   Most   All   None   No   Yes   Yes   All
Avalon Chrystie Place I
    199       —       89       —       —       73       —       361       —     Some   None   None   None   Some   Some   None   No   No   No   No

20


 

Features and Recreational Amenities - Current and Development Communities

                                                                             
        Community   Building                                                                
    Buildings   entrance   entrance   Under-   Aerobics           Walking/                       Sand   Indoor/                
    w/security   controlled   controlled   ground   dance   Car   Picnic   jogging       Sauna/   Tennis   Racquet-   Fitness   volley-   outdoor   Clubhouse/   Business   Tot    
    systems
  access
  access
  parking
  studio
  wash
  area
  trail
  Pool
  whirlpool
  court
  ball
  center
  ball
  basketball
  clubroom
  center
  lot
  Concierge
CURRENT COMMUNITIES (1)
                                                                           
 
                                                                           
NORTHEAST
                                                                           
Boston, MA
                                                                           
Avalon at Center Place
  None   Yes   Yes   Yes   No   Yes   Yes   No   Yes   No   No   No   Yes   No   No   Yes   No   No   Yes
Avalon at Faxon Park
  None   No   Yes   No   No   No   Yes   No   Yes   Yes   No   No   Yes   No   No   Yes   No   Yes   No
Avalon at Flanders Hill
  All   No   Yes   No   No   No   Yes   No   Yes   Yes   No   No   Yes   No   Yes   Yes   No   Yes   No
Avalon at Lexington
  None   No   Yes   No   No   No   Yes   No   Yes   No   No   No   Yes   No   Yes   Yes   No   Yes   No
Avalon at Newton Highlands
  All   No   Yes   Yes   No   No   Yes   Yes   Yes   Yes   No   No   Yes   No   No   Yes   Yes   Yes   Yes
Avalon at Prudential Center
  None   No   Yes   Yes   No   No   Yes   No   No   No   No   No   No   No   No   Yes   No   No   Yes
Avalon Essex
  None   No   Yes   No   No   No   Yes   No   Yes   Yes   No   No   Yes   No   No   Yes   No   No   No
Avalon Estates
  None   No   No   No   No   No   Yes   Yes   Yes   Yes   No   No   Yes   No   No   No   Yes   Yes   No
Avalon Ledges
  All   No   Yes   No   No   No   Yes   No   Yes   Yes   No   No   Yes   No   Yes   Yes   No   Yes   No
Avalon Oaks
  None   No   Yes   No   No   No   Yes   No   Yes   Yes   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Oaks West
  All   No   Yes   No   No   No   Yes   No   Yes   Yes   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Orchards
  None   No   No   No   No   No   Yes   Yes   Yes   Yes   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Summit
  None   No   Yes   No   No   No   Yes   No   Yes   No   No   No   Yes   No   No   No   No   No   No
Avalon West
  None   No   Yes   No   No   No   Yes   No   Yes   No   No   No   No   No   Yes   Yes   No   Yes   No
 
                                                                           
Fairfield-New Haven, CT
                                                                           
Avalon at Greyrock Place
  All   Yes   No   Yes   No   No   Yes   No   Yes   No   Yes   No   Yes   No   No   Yes   Yes   Yes   Yes
Avalon Corners
  All   Yes   Yes   Yes   No   No   Yes   No   Yes   No   No   No   Yes   No   No   Yes   Yes   No   Yes
Avalon Gates
  None   Yes   No   No   No   No   Yes   No   Yes   No   No   Yes   Yes   Yes   Yes   Yes   No   Yes   No
Avalon Glen
  None   No   Yes   Yes   No   No   No   No   Yes   No   No   Yes   Yes   No   No   Yes   No   No   Yes
Avalon Haven
  None   No   No   No   No   No   Yes   No   Yes   No   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Lake
  None   No   No   No   No   No   Yes   No   Yes   No   No   No   Yes   No   No   No   No   No   No
Avalon New Canaan
  All   No   Yes   No   No   No   Yes   Yes   Yes   No   No   No   Yes   No   No   Yes   Yes   Yes   No
Avalon on Stamford Harbor
  All   Yes   Yes   Yes   No   No   Yes   Yes   Yes   No   No   Yes   Yes   No   Yes   Yes   Yes   No   Yes
Avalon Springs
  All   No   No   No   No   No   Yes   Yes   Yes   No   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Valley
  None   No   No   No   No   No   Yes   No   Yes   No   No   No   Yes   No   Yes   Yes   No   Yes   No
Avalon Walk I & II
  None   No   No   No   Yes   No   Yes   Yes   Yes   No   Yes   Yes   Yes   No   Yes   Yes   No   Yes   No
 
                                                                           
Long Island, NY
                                                                           
Avalon Commons
  All   No   Yes   No   No   No   Yes   No   Yes   No   No   No   Yes   No   Yes   Yes   Yes   Yes   No
Avalon Court
  All   Yes   Yes   No   No   Yes   Yes   Yes   Yes   No   No   Yes   Yes   No   Yes   Yes   Yes   Yes   No
Avalon Towers
  All   No   No   Yes   No   Yes   No   No   Yes   No   No   No   Yes   No   No   Yes   No   No   Yes
 
                                                                           
Northern New Jersey
                                                                           
Avalon at Edgewater
  All   Yes   Yes   Yes   No   No   No   No   Yes   No   No   No   Yes   No   No   Yes   Yes   No   Yes
Avalon at Florham Park
  None   No   No   No   No   No   No   No   Yes   No   No   No   Yes   No   No   Yes   No   No   No
Avalon Cove
  All   Yes   Yes   No   No   No   Yes   Yes   Yes   No   Yes   Yes   Yes   No   Yes   Yes   Yes   Yes   Yes
The Tower at Avalon Cove
  All   No   Yes   No   No   No   Yes   Yes   Yes   No   Yes   Yes   Yes   No   Yes   Yes   Yes   Yes   Yes
 
                                                                           
Central New Jersey
                                                                           
Avalon at Freehold
  None   No   No   No   No   No   Yes   No   Yes   No   No   No   Yes   No   No   Yes   Yes   Yes   No
Avalon Run East
  None   No   No   No   No   No   Yes   Yes   Yes   No   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Watch
  None   No   Yes   No   No   No   Yes   No   Yes   No   Yes   Yes   Yes   No   Yes   Yes   No   Yes   No

21


 

Features and Recreational Amenities - Current and Development Communities

                                                                             
        Community   Building                                                                
    Buildings   entrance   entrance   Under-   Aerobics           Walking/                       Sand   Indoor/                
    w/security   controlled   controlled   ground   dance   Car   Picnic   jogging       Sauna/   Tennis   Racquet-   Fitness   volley-   outdoor   Clubhouse/   Business   Tot    
    systems
  access
  access
  parking
  studio
  wash
  area
  trail
  Pool
  whirlpool
  court
  ball
  center
  ball
  basketball
  clubroom
  center
  lot
  Concierge
New York, NY
                                                                           
Avalon Riverview I
  All   Yes   Yes   No   No   No   Yes   Yes   No   No   No   No   Yes   No   No   Yes   Yes   No   Yes
Avalon Gardens
  All   No   No   No   No   No   Yes   No   Yes   No   Yes   Yes   Yes   Yes   Yes   Yes   Yes   Yes   Yes
Avalon Green
  All   No   No   No   No   No   No   No   Yes   No   No   No   No   Yes   No   Yes   No   No   No
Avalon on the Sound
  All   Yes   Yes   No   No   No   Yes   Yes   Yes   No   No   No   Yes   No   Yes   Yes   Yes   No   Yes
Avalon View
  None   No   No   No   No   No   Yes   No   Yes   No   Yes   No   Yes   No   Yes   Yes   No   Yes   No
Avalon Willow
  All   Yes   Yes   Yes   No   No   Yes   No   Yes   No   No   Yes   Yes   No   No   Yes   Yes   No   Yes
The Avalon
  All   No   Yes   Yes   No   No   No   No   No   No   No   No   Yes   No   No   Yes   Yes   No   Yes
 
                                                                           
MID-ATLANTIC
                                                                           
 
                                                                           
Baltimore, MD
                                                                           
Avalon at Fairway Hills I & II
  None   No   No   No   No   Yes   Yes   No   Yes   No   Yes   Yes   Yes   No   No   Yes   Yes   Yes   No
Avalon at Symphony Glen
  None   No   No   No   No   Yes   Yes   Yes   Yes   No   No   No   Yes   No   No   Yes   No   Yes   No
Avalon Landing
  None   No   No   No   No   Yes   Yes   Yes   Yes   No   No   No   Yes   No   No   Yes   No   No   No
 
                                                                           
Washington, DC
                                                                           
AutumnWoods
  None   No   No   No   No   Yes   Yes   Yes   Yes   No   Yes   No   Yes