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AvalonBay Communities AVB reported fourth-quarter 2024 core funds from operations (FFO) per share of $2.80, missing the Zacks Consensus Estimate of $2.83. However, the figure climbed 2.2% from the prior-year quarter’s tally.
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The quarterly results reflect higher property management, other indirect operating expenses and interest expenses. However, a year-over-year increase in same-store residential revenues and same-store net operating income (NOI) have supported the results to an extent.
Total revenues in the quarter came in at $740.5 million, missing the Zacks Consensus Estimate marginally. The figure increased 5.1% on a year-over-year basis.
For full-year 2024, the core FFO per share came in at $11.01, up 3.6% year over year. However, it lagged the Zacks Consensus Estimate of $11.04. Total revenues for full-year 2024 came in at $2.91 billion, an improvement of 5.3% year over year.
AVB’s Fourth Quarter in Detail
In the reported quarter, same-store residential revenues increased 3.2% year over year to $670.1 million. Same-store residential operating expenses rose 5.4% to $208.1 million. As a result, the same-store residential NOI climbed 2.3% to $462.1 million.
Same-store average revenue per occupied home rose to $3,040 in the fourth quarter, up from $3,033 in the third quarter of 2024 and $2,944 in the year-ago quarter. While the same-store economic occupancy of 95.6% rose 10 basis points (bps) sequentially, it shrunk 10 bps year over year. Our estimate for the metric was 95.8%.
However, property management and other indirect operating expenses rose 40.1% year over year to $51.4 million. Interest expenses also increased 19.2% year over year to $59 million.
As of Dec. 31, 2024, AvalonBay had 17 consolidated development communities under construction (expected to contain 6,004 apartment homes and 59,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.25 billion.
AVB’s Portfolio Activity
In the fourth quarter, AVB acquired two wholly owned communities. These include Avalon Townhomes in Bee Cave, TX, comprising 126 townhomes for $49 million and Avalon Lowry in Denver, CO, with 347 apartment homes for $136.5 million.
During the reported quarter, AVB sold three wholly owned communities, namely Avalon New Canaan in New Canaan, CT, Avalon Berkeley in Berkeley, CA, and AVA Ballard in Seattle, WA. These three communities, which contained all 463 apartment homes, were disposed of for $212.5 million, resulting in a gain in accordance with GAAP of $121.8 million.