Latest news with #AvalonBay
Yahoo
22-05-2025
- Business
- Yahoo
AvalonBay Communities (NYSE:AVB) Declares US$1.75 Quarterly Dividend Per Share
AvalonBay Communities recently declared a cash dividend of $1.75 per share for the second quarter of 2025, set for payment on July 15. This announcement aligns with its historical focus on delivering consistent shareholder value. Despite a flat share price movement over the past week, this dividend revelation comes amid market fluctuations influenced by fiscal policy concerns, which saw major indexes either slightly rise or stabilize after previous sell-offs. Although these broader market dynamics dominated investor attention, AvalonBay's steady approach with dividend affirmations provided some stability amid the market's recent volatility. AvalonBay Communities has 3 risks (and 2 which are concerning) we think you should know about. The end of cancer? These 23 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The recent dividend declaration by AvalonBay Communities reflects its commitment to delivering shareholder value even as the broader market remains sensitive to fiscal policy shifts. Although AvalonBay's stock price remained flat recently, its total return, including dividends, was 50.84% over the past five years, indicating consistent long-term performance. This return context emphasizes a steady past, though current market conditions present ongoing challenges. Over the past year, AvalonBay underperformed the US Residential REITs industry, which saw a 5.6% increase, suggesting some relative weakness. Nonetheless, the company's overall direction aligns with its focus on maintaining high occupancy and stable revenue in suburban regions. The dividend announcement could positively impact revenue and earnings forecasts by reinforcing the firm's existing strategies to manage occupancy and growth efficiently in its diversified markets. In terms of share price and valuation, AvalonBay shares are trading at a 15.99% discount to analysts' consensus price target of US$233.1, suggesting potential room for appreciation if predicted revenue and earnings growth materialize. Despite analysts forecasting a decline in earnings over the next three years, AvalonBay's supportive dividend policy and operational strategies may help mitigate some revenue pressures. Investors are encouraged to independently evaluate these factors against personal expectations and market dynamics. Take a closer look at AvalonBay Communities' potential here in our financial health report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:AVB. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-05-2025
- Business
- Yahoo
Federal firings, economic uncertainty stain REIT outlooks
Equity reported a record low turnover rate in the first quarter at 7.9 percent, COO Michael Manelis said. Camden reported a 3.3 percent pop in lease renewals, one of the firm's highest-ever rates, Executive Vice Chairman Keith Oden said. Right now, renters are holding on to those keys — tightly. 'People, if they lose their jobs, don't immediately give us the keys.' 'We are a lagging, not a leading indicator of changes in the economy,' Parrell said on the firm's Wednesday earnings call. Neither the REIT nor peers Equity and Camden said layoffs had hit leasing numbers. But impacts typically manifest six to eight months down the line, Breslin said; Equity's CEO Mark Parrell echoed this. AvalonBay will feel that absence. About 12 percent of its residents work for the federal government, Breslin said. Swap the local lens for a national one and 260,000 federal employees have exited the workforce — by choice, force or some mix — since President Donald Trump took office, according to a May analysis by Reuters. The federal workforce in D.C., alone, is projected to shrink 21 percent by September 30, according to the District's Office of Revenue Analysis, which now forecasts the metro region to enter a mild recession by year's end. The REIT, headquartered in Arlington, Virginia, owns multifamily in 12 states and, notably, Washington, D.C., where sweeping federal layoffs have marred the job market and stoked lasting fears among the still employed. AvalonBay CEO Sean Breslin said talk from tenants, both prospective and current, has centered on: 'I have a job today; will I have a job tomorrow?' Mortgage rates and home prices are high, which has dissuaded would-be buyers from leaving leases and further pressured a nationally undersupplied housing market. Meanwhile, peak rental season is dawning, creating a perfect storm for owners. All three REITs said demand is about as robust as it gets — at least right now. The upshot: Market fundamentals are solid and poised to strengthen; the biggest unknown now is the jobs market. Execs admitted uncertainty clouded crystal balls. Still, they shared what they could divine. 'You're like the only apartment REIT that so far has really talked about resident concerns,' Piper Sandler analyst Alexander Goldfarb said on AvalonBay's Thursday call. An outlook during earnings season should be par for the course. But the industry has basically been mum since 'Liberation Day,' making straight talk on earnings calls held by Equity Residential, AvalonBay Communities and Camden Property Trust a much-needed novelty. The heads of the country's largest apartment REITs are finally giving their two cents on how tariffs, trade wars and economic tumult might affect business. Story Continues That's good news for right now. But it also signals tenants are responding to uncertainty, and hard times may be on the horizon. Breslin outlined the typical chain of events when economic outlooks get dicey: tenants hunker down, then they cut the 'wants' in their budget until they're forced to trim the 'needs' — critically, rent. The signs are there. Discretionary spending is down. It has slipped precipitously since November 2025, according to Deloitte, though it remains above 2023 and 2024 lows. And tenants since February have reported higher expected costs for housing and utilities, signaling pocketbooks are being pinched. 'The probability of a recession remains at 60 percent,' J.P. Morgan bluntly proclaimed in its mid-April report. Still, those jitters aren't yet rattling the REITs. Or so they claim. 'As of today, we are not seeing any signs of consumer weakness,' Equity's Manelis said. When weakness does show up, it manifests as broken leases, move-outs for lower rents, fewer renewals and late payments. 'We haven't had people coming in and saying, 'Oh my god, I've lost my job in the federal government, you need to let me off my lease,'' said Camden CEO Ric Campo. 'We just haven't seen it.' Positive supply signs The good news, however, is the oversupply story seems to be in the rearview mirror, and, barring a surge in unemployment, dwindling deliveries should give rents a boost. The first quarter marked the first time since 2021 that tenants nationally leased new units faster than developers could deliver them. Last year, Washington, D.C. pumped out the greatest excess of apartments, as compared to tenant demand, according to RealPage. Then came Houston and Las Vegas. The scales are tipping in landlords' favor in Dallas, Atlanta and Denver, Equity Chief Investment Officer Alec Brackenridge said. Austin, Charlotte and Phoenix 'haven't cauterized the bleeding from all the supply that they've been under,' he added, but dwindling pipelines signal they soon may. Austin, which has led the pack nationally in oversupply, produced fewer units than were leased in the first three months of 2025 — the first time in three and a half years it has recorded positive net absorption, according to the brokerage MMG. The pipeline is still robust, but construction is slowing 'pretty significantly towards the back half of 2025,' Camden's Camp said. After nearly two years of negative growth, rent changes are now projected to turn positive by 2026, according to Origin Investments. Sun Belt snap back Groups such as AvalonBay are betting on that sea change. The firm went into contract on eight Texas multifamily properties in the first quarter — two in Austin, the rest in Dallas-Fort Worth — for over $600 million. 'Look at the basis at which we can enter these markets,' Breslin said, specifying the Texas deal had priced out to $230,000 a door. By comparison, per-unit pricing in Austin topped out at $275,000 during the last cycle. Houston-based Camden one-upped AvalonBay in Febraury, scooping up Austin's Emerson at Leander for about $68 million or $192,000 a unit — a 16 percent discount from its appraised value. Across the Sun Belt, distress that marred values from 2022 through last year is working its way through the system and investors eyeing the shift are stepping off the sidelines. 'Lenders have just kind of had it: they're not extending loans anymore; they're not extending caps on interest rates,' Equity's Brackenridge said. S2 Capital, for example, one of the multifamily syndicators to ride out the Sun Belt's downturn, snapped up a good chunk of buildings owned by GVA – a syndicator that didn't fare so well. One of the cycle's largest investors, GVA has lost dozens of assets to foreclosure and forced sales after interest rates soared on its floating-rate loans; it faces multiple investor suits alleging shady dealings. S2, in partnership with WindMass Capital (a third syndicator), picked up one of GVA's struggling Austin assets in January for $50 million. S2 also stepped in as the general partner on a 1,768-unit GVA portfolio with buildings in Dallas and Nashville, and Knoxville, Tennessee. 'We're seeing some more products starting to come to the market,' Brackenridge underscored. 'At the same time, there's a lot of interest in buying that product.' Equity is currently combing Dallas, Denver and Atlanta for acquisition opportunities. Unlike its peers, it doesn't quite have the appetite for Austin yet. 'There's such a glut of supply — that's probably a little bit later for us,' CEO Parrell said. What about tariffs? All three REITs, which double as developers, said tariffs would pressure expenses. AvalonBay estimated a 5 percent jump in hard costs and said the uptick 'could be enough to tip some projects into being infeasible.' 'Even with no change in costs, it's really hard to make deals underwrite right now,' Brackenridge said. A mix of uncertainty and still-high rates is complicating the math. But as new development activity dries up, contractors and subcontractors are more willing to come down on pricing, which figures to offset the higher price of materials, executives said. 'Contractors [are] getting really hungry,' Brackenridge added. 'They see the pipeline dwindling and so they're accepting less of a margin.' AvalonBay, which acts as its own contractor, said, 'Our phones are ringing off the hook with deeper bid coverage and stronger subcontractor availability than we have seen in years.' 'This bodes well,' Chief Investment Officer Matt Birenbaum said. Read more This article originally appeared on The Real Deal. Click here to read the full story.
Yahoo
03-05-2025
- Business
- Yahoo
2 Under-the-Radar Dividend Stocks With Market-Beating Potential
AvalonBay Communities is aggressively moving into some of the fastest-growing U.S. markets. Realty Income has lots of growth potential and has been beaten down in the high-interest rate environment. Both stocks have market-beating potential over the long term. Although the stock market has rebounded significantly from its lows, there are still some excellent bargains to be found by patient long-term investors. That's especially true when it comes to dividend stocks, as the persistent high-interest rate environment and uncertainty surrounding the Federal Reserve's future policy moves have created a headwind for income-focused investments. Real estate investment trusts, or REITs, are an area of the market where there are some particularly interesting opportunities right now. Here are two real estate stocks that aren't exactly household names for many investors, but could be worth a closer look right now. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » AvalonBay Communities (NYSE: AVB) is one of the largest owners of multifamily real estate in the world, with 309 apartment properties containing nearly 95,000 apartment homes. The company has been around for a while (its IPO was in 1994). But the strategy has shifted a bit recently from the company's traditional focus on large and high-cost metropolitan areas to expansion into some of the fastest-growing real estate markets in the United States. Specifically, much of AvalonBay's newer investments are in the "expansion markets" of major cities in North Carolina, Southeast Florida, Texas, and Colorado. These markets all have positive net migration, as well as above-average job and wage growth, and housing is still relatively affordable. This is a new part of AvalonBay's business within the past few years, and has already been built up to 10% of the company's rental income. AvalonBay intends to increase this to 25% in the medium term. I'm particularly excited about this aggressive move into Sun Belt markets because of AvalonBay's fantastic track record of value creation. The company's primary investment strategy is to develop properties from the ground up, and there are currently 19 communities under construction, into which AvalonBay is investing $2.5 billion. The company also strategically acquires existing properties, including eight Texas communities it has already acquired in 2025. AvalonBay has a 3.4% dividend yield at the current stock price and has produced a total return (dividends plus stock appreciation) of 12.5% annualized since its 1994 IPO, handily beating the S&P 500 (SNPINDEX: ^GSPC). With a massive growth opportunity and proven track record, AvalonBay could be a great long-term real estate play in your portfolio. I recently wrote an article explaining that if I had to choose just one stock to buy right now, it would be Realty Income (NYSE: O). Not only is Realty Income down by about 25% from its highs, but the company is well-positioned to deliver steadily growing income and excellent total returns over the long run. The company owns about 15,600 properties, about three-fourths of which (by rental income) are freestanding retail. The other major property type is industrial, and there are also some gaming and agricultural holdings as well. There are two big reasons why Realty Income is a bulletproof business: First, its tenants are generally recession-resistant and/or resistant to e-commerce disruption. Most of the retail tenants sell things people need, are discount-focused, or provide a service (as opposed to selling physical goods). Second, the tenants sign long-term lease agreements with gradual rent increases built in. These are triple net leases, which means the tenants cover essentially all the variable costs of property ownership: taxes, insurance, and maintenance. Realty Income has lots of room to grow. It estimates that its addressable real estate market in the United States is $5.4 trillion in size, and it's even larger in Europe. Thanks to a long history of smart capital allocation, Realty Income has produced 13.4% annualized total returns since its IPO more than 30 years ago, and it currently has a 5.6% dividend yield, which it pays in monthly installments. Of course, there's no guarantee that either company will replicate their returns from the past 30 years, but these track records of value creation speak for themselves. If you're looking for an income stock that could potentially be in your portfolio for decades, AvalonBay and Realty Income are worth a closer look. Before you buy stock in AvalonBay Communities, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AvalonBay Communities wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $611,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $684,068!* Now, it's worth noting Stock Advisor's total average return is 889% — a market-crushing outperformance compared to 162% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 Matt Frankel has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends AvalonBay Communities. The Motley Fool has a disclosure policy. 2 Under-the-Radar Dividend Stocks With Market-Beating Potential was originally published by The Motley Fool
Yahoo
02-05-2025
- Business
- Yahoo
AvalonBay Communities Inc (AVB) Q1 2025 Earnings Call Highlights: Strong Core FFO Growth and ...
Core FFO Growth: 4.8% in Q1 relative to last year, exceeding prior Q1 guidance by $0.03. Development Projects: $3 billion of projects underway, match-funded with attractively priced capital. Equity Raised: $890 million of equity raised on a forward basis at an average gross price of $226 per share. Occupancy: April occupancy roughly 30 basis points above the same time last year. Same-Store Revenue: Slightly ahead of plan due to modestly higher occupancy. Year-to-Date Average Asking Rent Increase: Roughly 5%, led by San Francisco with gains of approximately 7%. Liquidity: $2.8 billion of liquidity, supported by recent financing transactions. Unsecured Delayed Draw Term Loan: $450 million hedged to an effective fixed interest rate of 4.5%. Commercial Paper Program: Expanded to $1 billion, backed by a secured credit facility of $2.5 billion. Warning! GuruFocus has detected 5 Warning Sign with AVB. Release Date: May 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. AvalonBay Communities Inc (NYSE:AVB) reported strong core FFO growth of 4.8% in Q1 2025, exceeding prior guidance by $0.03. The company has a robust development pipeline with $3 billion in projects underway, expected to drive significant earnings growth as they lease up. AvalonBay's balance sheet and liquidity position are strong, with $2.8 billion in liquidity and $890 million in undrawn equity capital. The company is benefiting from strong occupancy rates and limited new deliveries in established regions, supporting healthy pricing power. AvalonBay has successfully raised $890 million of equity at an attractive price, which will be deployed into accretive development opportunities. The company is experiencing operating softness in its expansion regions due to high levels of new deliveries, impacting market occupancies. Renewal rate growth has moderated and is lower than in previous years, indicating potential challenges in achieving higher rent increases. The Los Angeles market is underperforming due to weak job growth, particularly in the entertainment sector, affecting rent growth. There is uncertainty in the job market, with residents expressing concerns about job security, which could impact leasing decisions. The company faces potential cost increases due to tariffs, which could raise total project costs by about 3% to 4%. Q: Your like-term effective rent growth has been lower than last year. Is this due to leaning into occupancy more or recent economic disruptions? A: Sean Breslin, COO: We're generally tracking to plan regarding rent change. The performance in Q1 was due to slightly higher occupancy. Last year, we had an earlier acceleration of occupancy, which allowed us to hit harder on rates earlier in the year. Q: You've outlined a plan to grow your expansion markets to 25% of your portfolio. Could economic or policy changes alter this plan? A: Benjamin Schall, CEO: Most of our movement towards the 25% target in expansion regions has been through trading. The capital markets environment is somewhat agnostic to this. If transaction markets dry up, it might slow us down, but if they remain active, we'll continue to pursue our goal. Q: What factors will you monitor closely for projected development starts? A: Matthew Birenbaum, CIO: Each project updates its pro forma for construction start. We monitor costs, NOI, and transaction market conditions. Currently, costs are lower than expected, which is positive. Changes in rents or transaction markets could impact our decisions. Q: How does the development pipeline impact FFO in 2025 versus 2024, and how will it be a tailwind in 2026? A: Kevin O'Shea, CFO: In 2025, we expect 2,300 homes to be occupied, compared to 2,600 in 2024, leading to less development NOI. However, in 2026, we anticipate a tailwind with 2,800 homes expected to be occupied, increasing development NOI. Q: Are you seeing outperformance in suburban assets versus urban ones, and how does this affect your target allocations? A: Sean Breslin, COO: Year-over-year revenue growth favors suburban assets, but near-term rent change is more balanced due to improvements in urban areas like San Francisco. Matthew Birenbaum, CIO: We still favor suburban areas due to long-term supply dynamics and demographic factors. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
30-04-2025
- Business
- Yahoo
What to Expect From AvalonBay Communities in Q1 Earnings?
AvalonBay Communities, Inc. AVB, a leading real estate investment trust (REIT) specializing in the development, acquisition and management of multifamily properties, is set to announce its first-quarter 2025 results after the closing bell on April the last reported quarter, this residential REIT delivered a negative surprise of 1.06% in terms of core funds from operations (FFO) per share. The quarterly results reflected 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) supported the results to an the past four quarters, AvalonBay surpassed the Zacks Consensus Estimate on three occasions and missed on the other, the average beat being 1.13%. The graph below depicts the surprise history of the company: AvalonBay Communities, Inc. price-eps-surprise | AvalonBay Communities, Inc. Quote As we approach the release of AvalonBay's first-quarter 2025 earnings report, it is important to examine how this residential REIT is likely to have performed amid the current market conditions. The first quarter of 2025 brought a wave of strong apartment demand, offering a lift to occupancy and rent growth as the supply surge begins to wane. Per RealPage data, from January through March 2025, more than 138,000 market-rate apartment units were absorbed nationally. This marks the highest first-quarter demand on record in the RealPage data set covering more than three decades. Combined with the robust demand seen over the last three quarters of 2024, annual absorption reached nearly 708,000 units — essentially matching the absorption from the early 2022 demand in the year-ending first quarter of 2025 exceeded concurrent supply. Though nearly 577,000 units were delivered in the said period — just shy of last quarter's record high of about 589,000 units — annual supply volume is forecasted to decline in the coming months, indicating that the construction cycle may have rose modestly to 95.2% in March, the highest reading since October 2022. While still within long-term norms, the uptick provides confidence that the rental market is not materially oversupplied. Rent growth has also regained traction. Effective rents rose 0.75% in March and 1.1% in the year-ending March 2025 — the highest 12-month reading since June 2023. All of the nation's 50 largest apartment markets recorded rent increases on a monthly basis, signaling broad-based strength. The average effective rent was $1, the recovery is regionally uneven. The Midwest and Rust Belt regions led annual rent gains, with cities like Kansas City, MO, Chicago, IL, and Pittsburgh, PA, outperforming. In contrast, high-supply Sun Belt metros, such as Austin, TX, and Phoenix, AZ, continued to experience rent cuts. However, these markets saw monthly rent growth in March, suggesting momentum is returning ahead of the prime leasing season. AvalonBay's focus on developing, acquiring and redeveloping multifamily properties in high-growth areas has driven strong occupancy and premium rents over the years. By leveraging technology and scale, the company enhances margins and maintains financial stability. This is expected to have continued in the first elevated supply in some markets is likely to have kept a check on occupancy growth. Additionally, high interest rates are likely to have kept interest expenses high. While AvalonBay remains committed to long-term value creation, these factors may have affected its near-term growth furthered its portfolio optimization strategy by planning to acquire eight apartment communities across Texas. In February, AVB announced that it is under contract to acquire two apartment communities in the Austin metropolitan area and agreed to acquire six apartment communities in the Dallas-Fort Worth metropolitan area from BSR Real Estate Investment Trust and its subsidiaries. The move highlighted the company's strategic portfolio expansionary efforts in high-growth regions of Texas to boost its revenues and enhance portfolio Austin asset acquisition, worth $187 million, was anticipated to be completed around March 31, 2025, while the Dallas-Fort asset acquisition, worth $431.5 million, is expected to close in the second quarter of 2025. The eight apartment communities feature 2,701 homes with an average price per home of around $229,000 and a weighted average rent per home of $1,675 per month. In AvalonBay's first-quarter operating update, the company noted witnessing the same-store operating metrics in line with its expectations as provided in its initial 2025 outlook. Per the operating update, economic occupancy for its same-store residential portfolio was 95.9%, including actuals for January and projections for February as of Feb. 26. This was an improvement from 95.6% in the fourth quarter of 2024. The like-term effective rent change for the same-store residential portfolio was 1.6% from January through Feb. 26, up from 1.1% in the fourth quarter of project economic occupancy of 95.9% in the quarter, up 10 basis points sequentially, while same-store average rental rates are projected to increase 2.6% year over year. We expect same-store revenues to rise 3% year over year, while same-store net operating income (NOI) is projected to grow 3.3% year over year. Further, we expect interest expenses to increase 7.6% year over year in the first quarter. The Zacks Consensus Estimate of $746.93 million for first-quarter revenues suggests a 4.78% year-over-year jump. Before the first-quarter earnings release, the company's activities were inadequate to gain analysts' confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has been revised a cent south to $2.80 over the past month. However, it suggests year-over-year growth of 3.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Our proven model does not conclusively predict a surprise in terms of FFO per share for AvalonBay this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here. AvalonBay currently carries a Zacks Rank of 4(Sell) and has an Earnings ESP of +0.21%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Here are two stocks from the broader REIT sector — Welltower Inc. WELL and Camden Property Trust CPT — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this scheduled to report quarterly numbers on April 28, has an Earnings ESP of +1.69% and carries a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks Property Trust is slated to report quarterly numbers on May 1. CPT has an Earnings ESP of +0.26% and carries a Zacks Rank of 3 at Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AvalonBay Communities, Inc. (AVB) : Free Stock Analysis Report Camden Property Trust (CPT) : Free Stock Analysis Report Welltower Inc. (WELL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
