AvalonBay Communities reported third‑quarter 2025 results with earnings per share of $2.68, funds from operations of $3.01 per share, and core FFO of $2.75 per share. Year‑to‑date figures were EPS $6.22, FFO $8.60, and core FFO $8.40. Same‑store residential revenue rose to $685.4 million, up 2.3% from $669.3 million. Operating expenses increased to $224.3 million, up 4.6% from $214.5 million. Same‑store residential NOI reached $461.0 million, up 1.1% from $456.0 million.
Compared to the same quarter in 2024, EPS rose from $2.61 to $2.68, FFO from $2.80 to $3.01, core FFO from $2.82 to $2.75, operating expenses from $214.5 million to $224.3 million, and NOI from $456.0 million to $461.0 million. The company beat earnings by $0.05 per share, exceeding consensus estimates of $2.10.
The company completed the Avalon Annapolis development, adding 508 apartment homes at a capital cost of $195 million. It began construction on two new communities totaling 1,015 homes and 31,000 sq ft of commercial space, with an estimated capital cost of $434 million. The company sold six wholly‑owned communities—1,594 homes and 20,000 sq ft of commercial space—for $585.1 million, recording a GAAP net gain of $180.5 million. The company acquired three wholly‑owned communities for $187.95 million and purchased a 50% interest in Avalon Alderwood Place for $71.3 million.
Management noted that operating expense growth was driven by higher property taxes, utility costs, and investment in resident services. The company also launched a new $500 million share repurchase program and committed $28 million to a structured investment program in Southeast Florida, underscoring its focus on development and portfolio expansion.
Guidance for the fourth quarter projects EPS of $1.18 to $1.28, FFO of $2.76 to $2.86, and core FFO of $2.80 to $2.90. For the full year 2025, the company now expects EPS of $7.35 to $7.55, FFO of $11.31 to $11.51, and core FFO of $11.15 to $11.35. Same‑store residential revenue is projected to grow 2.3% to 2.7%, operating expenses 3.6% to 4.0%, and NOI 1.8% to 2.2%. Management indicated that the Q4 core FFO guidance is below analyst expectations due to slowing rental demand in Seattle, Northern California, San Francisco, and San Jose.
Liquidity remains strong, with $123.3 million in unrestricted cash and $234.98 million in unsecured commercial paper. The company’s capital structure includes active debt management, including the issuance of unsecured notes and the exercise of an accordion option on its term loan.
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