NEW YORK, April 30 Apartment landlord AvalonBay
Communities Inc reported a 23.7 percent decrease in a
key earnings performance measure in the first quarter, mostly
related to its acquisition of 40 percent of former rival
Archstone from Lehman Brothers.
But the results were much higher than the company had
forecast due to lower interest and Archstone-related costs as
well as higher net operating income.
The real estate investment trust posted first-quarter funds
from operations, or FFO, of $93 million, or 78 cents per share,
down from $122.0 million, or $1.28 per share, in the
The company had forecast a loss of 64 cents per share.
During the quarter, AvalonBay and Equity Residential closed
on their $6.5 billion acquisition of the properties of
Archstone, a company that Lehman Brothers helped take private in
2007, but which ultimately helped push the investment bank into
bankruptcy the following year.
Funds from operations is an industry measure that usually
excludes the effect of depreciation on earnings as well as
losses or gains from property sales.
Total revenue increased 23.9 percent to $315.4 million.
For properties the company has operated more than a year,
AvalonBay posted a 5.6 percent rise in first-quarter net
operating income, an indicator of how well they are managed. The
average rental rate rose 4.9 percent. The Pacific Northwest and
Northern California lead the rental revenue increases, up 8.9
percent and 8.7 percent, respectively. Those markets also turned
in double-digit net operating income growth.
AvalonBay revised its outlook for the year to FFO in the
range of $4.98 to $5.98 per share, up from $4.11 to $4.47 per
share. Analysts had forecast $4.35 per share, according to
Thomson Reuters I/B/E/S.
Shares of AvalonBay closed 1.5 percent higher at $133.04 on
the New York Stock Exchange on Tuesday, shortly before the
results came out. The shares were unchanged after-hours.