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AvalonBay Communities AVB reported third-quarter 2024 core funds from operation (FFO) per share of $2.74, which beat the Zacks Consensus Estimate of $2.71. Moreover, the figure climbed 3% from the prior-year quarter.

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The quarterly results reflected a year-over-year increase in same-store residential revenues. Same-store average monthly revenue per occupied home also rose. This residential REIT revised its 2024 core FFO per share outlook.

Total revenues in the quarter came in at $734.3 million, which outpaced the Zacks Consensus Estimate of $731.7 million. The figure increased 5.3% % on a year-over-year basis.

AvalonBay's Quarter in Detail

In the reported quarter, same-store residential revenues climbed 3.1% year over year to $671.5 million. Same-store residential operating expenses rose 5.4% to $214.8 million. Same-store residential NOI climbed 2.0% to $456.7 million from the prior-year period.

Same-store average revenue per occupied home rose to $3033 in the third quarter, up from $2,939 in the third quarter of 2023. The same-store economic occupancy was 95.6%, decreasing 10 basis points (bps) year over year. We estimated the metric to be 95.9%.

As of Sept. 30, 2024, AvalonBay had 19 wholly-owned development communities under construction (expected to contain 6,855 apartment homes and 56,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.68 billion.

AvalonBay's Portfolio Activity

During the third quarter, AvalonBay acquired three wholly-owned communities, Avalon Perimeter Park in Morrisville, NC, with 262 apartment homes for $66.5 million, Avalon Cherry Hills in Englewood, CO, with 306 apartment homes for $95 million; and AVA Balboa Park in San Diego, CA, with 100 apartment homes and 1,700 square feet of commercial space for $51 million.

AvalonBay's Balance Sheet

AVB had $552.4 million in unrestricted cash and cash equivalents as of Sept. 30, 2024. As of the same date, the company did not have any borrowings outstanding under its $2.25 billion unsecured revolving credit facility or $500 million unsecured commercial paper note program.

The annualized net debt-to-core EBITDAre for the third quarter was 4.2 times. The unencumbered NOI for the nine months ended Sept. 30, 2024, was 95%.

AVB's 2024 Outlook Revised

For the fourth quarter of 2024, AvalonBay expects core FFO per share in the range of $2.78-$2.88. The Zacks Consensus Estimate is currently pegged at $2.83, which lies within the guided range.

For the full year, AVB now expects core FFO per share between $10.99 and $11.09, compared with the previously guided range of $10.92-$11.12. This indicates a 3.9% increase at the midpoint compared with the 3.7% expected earlier. The Zacks Consensus Estimate presently stands at $11.02, within the projected range.

For the full year, management expects same-store residential revenue growth to be 3.5% at the midpoint, unchanged from prior guidance, while operating expenses are projected to increase by 4.5% at the midpoint, down from the prior outlook of 4.8%. Same-store residential NOI growth is estimated at 3.0% at the midpoint, higher than the 2.9% projected before.

AvalonBay currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AvalonBay Communities, Inc. Price, Consensus and EPS Surprise

AvalonBay Communities, Inc. price-consensus-eps-surprise-chart | AvalonBay Communities, Inc. Quote

Performance of Other Residential REITs

UDR Inc. UDR reported third-quarter 2024 funds from operations as adjusted (FFOA) per share of 62 cents, in line with the Zacks Consensus Estimate. On a year-over-year basis, FFOA per share declined 1.6%.

Results reflected an increase in revenues from same-store communities, prior-year acquisitions and completed developments. UDR raised its full-year 2024 guidance.

Essex Property Trust Inc. ESS reported third-quarter 2024 core FFO per share of $3.91, which beat the Zacks Consensus Estimate of $3.88. The figure also improved 3.4% from the year-ago quarter.

Results reflected favorable growth in same-property revenues and NOI. Essex Property Trust also raised its full-year 2024 guidance.

Equity Residential EQR reported third-quarter 2024 normalized FFO per share of 98 cents, in line with the Zacks Consensus Estimate. The figure also improved 2.1% from the year-ago quarter.

Results reflected decent same-store performances, backed by healthy demand amid modest supply. EQR revised its 2024 guidance.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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