AvalonBay Completes Archstone Acquisition

Wed Feb 27, 2013 5:15pm EST

* Reuters is not responsible for the content in this press release.



ARLINGTON, Va.--(Business Wire)--
AvalonBay Communities, Inc. (NYSE: AVB) announced today that it and Equity
Residential (NYSE: EQR) have completed their previously announced acquisition
("Archstone Acquisition") of the assets and liabilities of Archstone Enterprise
LP ("Archstone") from Lehman Brothers Holdings, Inc., which consist principally
of a portfolio of high quality apartment communities in major markets in the
United States. AvalonBay acquired approximately 40% of Archstone`s assets and
liabilities and Equity Residential acquired approximately 60% of Archstone`s
assets and liabilities. 

AvalonBay`s portion of the completed transaction is valued at approximately $6.5
billion. In addition to assuming approximately $3.9 billion of consolidated and
unconsolidated indebtedness, AvalonBay paid $669 million in cash and delivered
14,889,706 shares of AvalonBay common stock, valued at $1.9 billion as of the
market`s close on Wednesday, February 27, 2012. 

As a part of the Archstone Acquisition, AvalonBay acquired 60 apartment
communities, containing 20,089 apartment homes, of which 5 communities are under
construction and are expected to contain 1,198 apartment homes upon completion;
5 parcels of land, which if developed as anticipated, are expected to contain a
total of 1,414 apartment homes; interests in joint ventures (which may be
acquired on a deferred closing basis) which own 12 apartment communities,
containing 2,851 apartment homes; and a 40% ownership interest in a joint
venture arrangement with Equity Residential that contains certain non-core
assets and residual liabilities that will be jointly managed until disposition
or resolution. 

Commenting on the Acquisition, Tim Naughton, AvalonBay`s CEO and President said,
"Our acquisition of assets from Archstone represents a rare opportunity to
expand our presence across our markets with a portfolio that is complementary on
three important dimensions - market concentration, submarket positioning, and
price point. In addition, this acquisition provides scale benefits in terms of
brand penetration and G&A leverage, which we believe will strengthen our
competitive position over time and create long-term value for shareholders." 

The following table depicts the preliminary approximate allocation of
AvalonBay`s investment:

                                                                            Acquisition Value (1)       
                                                                            (Dollars in thousands)      
 Consolidated stabilized assets                                             $             5,700,000     
 Development communities under construction                                               300,000       
 Land held for future development                                                         100,000       
 Net equity in unconsolidated joint ventures plus allocable venture debt                  400,000       
 Total                                                                      $             6,500,000     

   (1)    Value is based on the closing price of our common stock on February 27, 2013 and the debt to be assumed after a $200 million adjustment to the face value of debt to reflect debt at fair market value.  

About AvalonBay Communities, Inc.

As of December 31, 2012, the Company owned or held an interest in 203 apartment
communities containing 59,391 apartment homes in nine states and the District of
Columbia, of which 23 communities were under construction and five communities
were under reconstruction. AvalonBay is in the business of developing,
redeveloping, acquiring, and managing apartment communities in high
barrier-to-entry markets of the United States. More information on AvalonBay, an
S&P 500 listed company, may be found on AvalonBay's website at

Forward-Looking Statements

This press release contains "forward-looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995. You can identify
forward-looking statements by our use of the words "believe," "expect,"
"anticipate," "intend," "estimate," "assume," "project," "plan," "may," "shall,"
"will" and other similar expressions in this press release, that predict or
indicate future events and trends and that do not report historical matters. 

Forward-looking statements or forecasts relating to the business, prospects,
operating statistics or financial results that relate to or may be expected to
result from the Archstone Acquisition are based on expectations, forecasts and
assumptions that are inherently speculative and are subject to substantial risks
and uncertainties, many of which we cannot predict with accuracy and some of
which we may not have anticipated. As a result, the actual operating statistics
and financial results that relate to or may be expected to result from the
Archstone Acquisition may differ materially from the Company's forecasts. Risks,
uncertainties and other factors related to the Archstone Acquisition that might
cause such differences include, among other things, the following: we may not be
able to integrate the assets and operations acquired in the Archstone
Acquisition in a manner consistent with our assumptions and/or we may fail to
achieve expected efficiencies and synergies; we may encounter liabilities
related to the Archstone Acquisition for which we may be responsible that were
unknown to us at the time we agreed to the Archstone Acquisition or at the time
of this press release; and our assumptions concerning risks relating to our lack
of control of joint ventures and our ability to successfully dispose of certain
assets may not be realized. 

We do not undertake a duty to update these forward-looking statements, and
therefore they may not represent our estimates and assumptions after the date of
this press release. You should not rely on forward-looking statements because
they involve known and unknown risks, uncertainties and other factors, some of
which are beyond our control, and which may cause our actual results,
performance or achievements to differ materially from the anticipated future
results, performance or achievements expressed or implied by these
forward-looking statements. In addition to the factors referred to above, you
should carefully review the discussion in our Annual Report on Form 10-K for the
year ended December 31, 2012, filed with the Securities and Exchange Commission
on February 22, 2013, under Item 1a., "Risk Factors," and the other disclosures
elsewhere in the Form 10-K and our subsequent reports on Form 10-Q and 8-K and
other filings with the SEC for further discussion of additional risks and
uncertainties associated with our business and these forward-looking statements.

Copyright © 2013 AvalonBay Communities, Inc. All Rights Reserved

AvalonBay Communities, Inc.
Timothy J. Naughton
Chief Executive Officer and President

Copyright Business Wire 2013