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AvalonBay Communities Inc. Reports Operating Results (10-Q)

August 03, 2012 | About:

10qk

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AvalonBay Communities Inc. (AVB) filed Quarterly Report for the period ended 2012-06-30.

Avalonbay Communities, Inc. has a market cap of $13.87 billion; its shares were traded at around $145.56 with a P/E ratio of 29.2 and P/S ratio of 14.3. The dividend yield of Avalonbay Communities, Inc. stocks is 2.7%.

Highlight of Business Operations:

Established Communities Rental revenue increased $10,421,000, or 5.8% and $22,013,000, or 6.2%, for the three and six months ended June 30, 2012, respectively, over the prior year periods. The increase for the three months ended June 30, 2012 is due to an increase in rental rates of 6.2% offset partially by a decrease in economic occupancy of 0.4%. The increase for the six months ended June 30, 2012 is due to an increase in rental rates of 6.2%, while maintaining economic occupancy at 96.0%. Economic occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different

The New England region accounted for 21.9% of the Established Community rental revenue for the six months ended June 30, 2012 and experienced a rental revenue increase of 4.9% over the prior year period. Average rental rates increased 5.5% to $2,046, offset partially by a decrease in economic occupancy of 0.6% to 95.5% for the six months ended June 30, 2012, as compared to the prior year period. Sequential revenue increased over the prior quarter by 1.6% during the three months ended June 30, 2012. The performance of the New England region, which includes metropolitan Boston and southwest Connecticut, has seen improvement in the job market in downtown Boston, which is supported by an improving high-tech sector and other industries in the region. This was offset partially by an increase in move-outs due to home purchases of 3.6% for the six months ended June 30, 2012 over the prior year period. In addition, job weakness in the financial services sector had a negative impact on renter demand in the Fairfield-New Haven area.

The Mid-Atlantic region, which represented 13.6% of Established Community rental revenue for the six months ended June 30, 2012, experienced an increase in rental revenue of 4.5% over the prior year period. Average rental rates increased by 4.0% to $1,884, while economic occupancy increased 0.5% to 96.0% for the six months ended June 30, 2012 as compared to the prior year period. The Mid-Atlantic region also experienced sequential quarterly rental revenue growth of 0.5%. Recent construction starts for new apartment development are at levels that exceed long-term averages in the Washington, DC metro area. While we expect continued positive operating performance near-term, the expected increase in new rental deliveries combined with the uncertainty surrounding federal spending is likely to slow growth in rental revenue relative to our other regions.

The Pacific Northwest region accounted for 4.2% of the Established Community rental revenue for the six months ended June 30, 2012 and experienced a rental revenue increase of 8.7% over the prior year period. Average rental rates increased 7.4% to $1,446, and economic occupancy increased 1.3% to 96.7% for the six months ended June 30, 2012 as compared to the prior year period. The Pacific Northwest showed sequential rental revenue growth of 2.6%, led by job gains in the regions professional services sector. Increasing development activity in the region may result in moderating revenue growth in 2013 as new supply is absorbed in certain submarkets.

In November 2010, we commenced our second continuous equity program (CEP II), under which we were authorized to sell up to $500,000,000 of our common stock during a 36-month period. In conjunction with CEP II, we engaged sales agents who receive compensation of approximately 1.5% of the gross sales price for shares sold. During the six months ended June 30, 2012 we sold 1,119,892 shares under CEP II at an average sales price of $140.14 per share, for aggregate net proceeds of $154,588,000. In July 2012 we completed the program, issuing an additional 315,323 shares at the weighted average price of $141.35 per share for aggregate net proceeds of $43,901,000. From program inception in November 2010 through July 31, 2012, we sold 3,925,980 shares at an average price of $127.36 per share, for aggregate net proceeds of $492,490,000.

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10qk
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