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AvalonBay Communities AVB reported first-quarter 2025 core funds from operations (FFO) per share of $2.83, beating the Zacks Consensus Estimate of $2.80. The figure also climbed 4.8% from the prior-year quarter’s tally.
The quarterly performance reflects better-than-expected operating results. AVB has also reaffirmed its full-year 2025 outlook.
Total revenues in the quarter came in at $745.9 million, missing the Zacks Consensus Estimate marginally. However, the figure increased 4.6% on a year-over-year basis.
AVB’s Quarter in Detail
In the reported quarter, same-store residential revenues increased 3% year over year to $693.1 million. Same-store residential operating expenses rose 4% to $214.76 million. As a result, the same-store residential NOI climbed 2.6% to $478.3 million.
Same-store average revenue per occupied home rose to $3,032 in the first quarter, up 2.9% from $2,946 in the year-ago period. Same-store economic occupancy of 96% rose 10 basis points (bps) year over year. Our estimate for the metric was 95.9%.
Interest expenses also increased 9.3% year over year to $59.9 million. Our estimate for the metric was $58.9 million.
As of March 31, 2025, AvalonBay had 19 wholly owned Development communities under construction (expected to contain 6,595 apartment homes and 69,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.5 billion.
AVB’s Portfolio Activity
In February 2025, AVB entered into agreements to acquire eight apartment communities in its Texas expansion region. During the first quarter, the company acquired the two communities in the Austin metropolitan area, comprising 857 homes, for $187.0 million. It was funded mainly with disposition proceeds. The remaining six communities located in the Dallas-Fort Worth metropolitan area were acquired on April 30, 2025 for a stated purchase price of $431.5 million.
During the reported quarter, AVB sold Avalon Wilton on River Road, a wholly owned community with 102 apartment homes, in Wilton, CT, for $65.1 million, resulting in a gain in accordance with GAAP of $56.48 million. It marked the company's exit from the Connecticut market.
AVB’s Balance Sheet Position
AVB had $53.26 million in unrestricted cash and cash equivalents as of March 31, 2025. As of the same date, the company did not have any borrowings outstanding under its unsecured revolving credit facility. It had outstanding borrowings of $224.9 million under its unsecured commercial paper note program.
Additionally, its annualized net debt-to-core EBITDAre for the January-March period was 4.3 times, and the unencumbered NOI for the year ended March 31, 2025 was 95%.