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AvalonBay Communities (AVB - Free Report) reported a second-quarter 2024 core funds from operation (FFO) per share of $2.77, which beat the Zacks Consensus Estimate of $2.71. Moreover, the figure climbed 4.1% from the prior-year quarter’s tally.
The quarterly results reflect a year-over-year increase in same-store total revenues. The same-store average rental revenue per occupied home reported a rise. This residential REIT also raised its 2024 core FFO per share, same-store residential revenue and net operating income (NOI) growth outlook following the Q2 FFO beat.
Total revenues in the quarter came in at $726 million, which outpaced the Zacks Consensus Estimate of $718.5 million. The figure increased 5.1% on a year-over-year basis.
Quarter in Detail
In the reported quarter, same-store total revenues increased 3.2% year over year to $672.9 million. Same-store residential revenues climbed 3.2% year over year to $666.2 million. Same-store residential operating expenses rose 3.8% to $204.1 million. As a result, the same-store residential NOI climbed 3.0% to $462.1 million from the prior-year period.
Same-store average revenue per occupied home rose to $2,989 in the second quarter, up from $2,897 in the second quarter of 2023. The same-store economic occupancy remained unchanged year over year to 96%. We estimated the metric to be 96.1%.
As of Jun 30, 2024, AvalonBay had 17 consolidated development communities under construction (expected to contain 6,066 apartment homes and 65,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.54 billion.
Portfolio Activity
In the second quarter, AVB acquired Avalon at Pier 121, a wholly-owned community comprising 300 apartment homes, in Lewisville, TX, for $62.1 million.
During the reported quarter, AVB sold three wholly-owned communities, namely AVA Belltown in Seattle, WA; AVA North Hollywood in Los Angeles, CA; and Avalon Hackensack at Riverside in Hackensack, NJ, for $181.7 million. These communities consist of 482 apartment homes and 12,000 square feet of commercial space.
Balance Sheet
AVB had $545.8 million in unrestricted cash and cash equivalents as of Jun 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.
Additionally, its annualized net debt-to-core EBITDAre for the April-May period was 4.2 times, and the unencumbered NOI for the six months ended Jun 30, 2024, was 95%.
2024 Outlook Raised
For the third quarter of 2024, AvalonBay expects core FFO per share in the range of $2.66-$2.76. The Zacks Consensus Estimate is currently pegged at $2.72, which lies within the guided range.
For the full year, AVB now expects core FFO per share between $10.92 and $11.12, up from the $10.71-$11.11 range guided earlier. This indicates a 3.7% increase at the midpoint compared with the 2.6% expected earlier. The Zacks Consensus Estimate presently stands at $10.92, within the projected range.
For the full year, management expects same-store residential revenue growth to be 3.5% at the midpoint, up from 3.1% guided earlier, while operating expenses are projected to increase 4.8%, down from the prior outlook of 5.4%. Same-store residential NOI growth is estimated at 2.9% at the midpoint, ahead of the 2.1% projected before.
UDR Inc. (UDR - Free Report) reported second-quarter 2024 funds from operations as adjusted (FFOA) per share of 62 cents, which surpassed the Zacks Consensus Estimate of 61 cents. On a year-over-year basis, FFOA per share climbed 1.6%.
Results reflected an increase in revenues from same-store communities. UDR also raised its full-year 2024 guidance.
Essex Property Trust Inc. (ESS - Free Report) reported second-quarter 2024 core FFO per share of $3.94, which beat the Zacks Consensus Estimate of $3.84. The figure also improved 4.5% from the year-ago quarter.
Results reflected favorable growth in same-property revenues and NOI. ESS also raised its full-year 2024 guidance.
Equity Residential (EQR - Free Report) reported a second-quarter 2024 normalized FFO per share of 97 cents, which surpassed the Zacks Consensus Estimate of 96 cents. The quarterly rental income of $734.16 million also marginally beat the consensus mark of $734.14 million.
Results reflected decent same-store performances, backed by healthy demand and modest supply. EQR also raised 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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AvalonBay (AVB) Q2 FFO & Revenues Beat Estimates, View Raised
AvalonBay Communities (AVB - Free Report) reported a second-quarter 2024 core funds from operation (FFO) per share of $2.77, which beat the Zacks Consensus Estimate of $2.71. Moreover, the figure climbed 4.1% from the prior-year quarter’s tally.
The quarterly results reflect a year-over-year increase in same-store total revenues. The same-store average rental revenue per occupied home reported a rise. This residential REIT also raised its 2024 core FFO per share, same-store residential revenue and net operating income (NOI) growth outlook following the Q2 FFO beat.
Total revenues in the quarter came in at $726 million, which outpaced the Zacks Consensus Estimate of $718.5 million. The figure increased 5.1% on a year-over-year basis.
Quarter in Detail
In the reported quarter, same-store total revenues increased 3.2% year over year to $672.9 million. Same-store residential revenues climbed 3.2% year over year to $666.2 million. Same-store residential operating expenses rose 3.8% to $204.1 million. As a result, the same-store residential NOI climbed 3.0% to $462.1 million from the prior-year period.
Same-store average revenue per occupied home rose to $2,989 in the second quarter, up from $2,897 in the second quarter of 2023. The same-store economic occupancy remained unchanged year over year to 96%. We estimated the metric to be 96.1%.
As of Jun 30, 2024, AvalonBay had 17 consolidated development communities under construction (expected to contain 6,066 apartment homes and 65,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.54 billion.
Portfolio Activity
In the second quarter, AVB acquired Avalon at Pier 121, a wholly-owned community comprising 300 apartment homes, in Lewisville, TX, for $62.1 million.
During the reported quarter, AVB sold three wholly-owned communities, namely AVA Belltown in Seattle, WA; AVA North Hollywood in Los Angeles, CA; and Avalon Hackensack at Riverside in Hackensack, NJ, for $181.7 million. These communities consist of 482 apartment homes and 12,000 square feet of commercial space.
Balance Sheet
AVB had $545.8 million in unrestricted cash and cash equivalents as of Jun 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.
Additionally, its annualized net debt-to-core EBITDAre for the April-May period was 4.2 times, and the unencumbered NOI for the six months ended Jun 30, 2024, was 95%.
2024 Outlook Raised
For the third quarter of 2024, AvalonBay expects core FFO per share in the range of $2.66-$2.76. The Zacks Consensus Estimate is currently pegged at $2.72, which lies within the guided range.
For the full year, AVB now expects core FFO per share between $10.92 and $11.12, up from the $10.71-$11.11 range guided earlier. This indicates a 3.7% increase at the midpoint compared with the 2.6% expected earlier. The Zacks Consensus Estimate presently stands at $10.92, within the projected range.
For the full year, management expects same-store residential revenue growth to be 3.5% at the midpoint, up from 3.1% guided earlier, while operating expenses are projected to increase 4.8%, down from the prior outlook of 5.4%. Same-store residential NOI growth is estimated at 2.9% at the midpoint, ahead of the 2.1% 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 - Free Report) reported second-quarter 2024 funds from operations as adjusted (FFOA) per share of 62 cents, which surpassed the Zacks Consensus Estimate of 61 cents. On a year-over-year basis, FFOA per share climbed 1.6%.
Results reflected an increase in revenues from same-store communities. UDR also raised its full-year 2024 guidance.
Essex Property Trust Inc. (ESS - Free Report) reported second-quarter 2024 core FFO per share of $3.94, which beat the Zacks Consensus Estimate of $3.84. The figure also improved 4.5% from the year-ago quarter.
Results reflected favorable growth in same-property revenues and NOI. ESS also raised its full-year 2024 guidance.
Equity Residential (EQR - Free Report) reported a second-quarter 2024 normalized FFO per share of 97 cents, which surpassed the Zacks Consensus Estimate of 96 cents. The quarterly rental income of $734.16 million also marginally beat the consensus mark of $734.14 million.
Results reflected decent same-store performances, backed by healthy demand and modest supply. EQR also raised 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.