Jan 30 Apartment landlord AvalonBay Communities
Inc reported a 15 percent rise in a key earnings
performance measure in the fourth quarter but warned that costs
from the acquisition of some Archstone buildings would hurt its
Arlington, Virginia-based AvalonBay in November said it
would buy 40 percent of the apartment buildings owned by
Archstone, an apartment company formerly owned by Lehman
The real estate investment trust expects 2013 funds from
operations, or FFO, to be in the range of $4.11 to $4.47 per
share, including costs from the acquisition. Analysts were
expecting $6.28 per share, according to Thomson Reuters I/B/E/S.
Funds from operations is an industry measure that usually
excludes the effect depreciation has on earnings as well as
losses or gains from property sales.
AvalonBay, which owns or holds stakes in 203 apartment
towers and complexes containing 59,391 units, said a bulk of the
acquisition costs will be felt in the first quarter.
It forecast first-quarter FFO to be a loss of 62 cents to 66
cents per share.
For the fourth quarter, AvalonBay reported FFO of $130.6
million, or $1.27 per share, up from $113.4 million, or $1.19
per share, in the year-ago period. Revenue rose 8 percent to
FFO for the quarter would have been higher if not for the
elevated costs from the Archstone acquisition and superstorm
For properties the company has operated more than a year,
AvalonBay posted a 6 percent rise in fourth-quarter net
operating income, an indicator of how well they are managed. The
average rental rate rose 5 percent.
Shares of AvalonBay closed down 1.7 percent at $135.64 on
the New York Stock Exchange ahead of the results.