Group 1 - The investment group High Yield Landlord is offering new members a promotion of $100 off and a 30-day money-back guarantee to encourage sign-ups at the beginning of 2026 [1] - High Yield Landlord has released its Top Picks for 2026, indicating a strategic focus on identifying promising investment opportunities for the upcoming year [1] - Jussi Askola, the President of Leonberg Capital, leads the High Yield Landlord group, which provides real-time insights into REIT investments and includes features like multiple portfolios and direct access to analysts [2] Group 2 - Jussi Askola has a strong background in REIT investing, having authored award-winning academic papers and built relationships with top REIT executives, enhancing the credibility of the investment group [2] - The group offers three distinct portfolios: core, retirement, and international, catering to different investment strategies and goals [2]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 2.1% for 2025, with a turnover rate of 41%, the lowest in its history [6][8] - The company raised $2.4 billion of capital at an initial cost of 5%, positioning for continued investment in 2026 [8][10] - The quarterly dividend was increased to $1.78 per share, reflecting a conservative payout ratio [10] Business Line Data and Key Metrics Changes - The company started $1.65 billion of projects in 2025 with a projected initial stabilized yield of 6.2% [7] - Development earnings are expected to uplift as projects lease up during 2026, with a forecasted revenue growth of 1.4% [9][10] - The company anticipates a same-store operating expense growth of 3.8% for 2026, driven by various factors including the phase-out of property tax abatement programs [21] Market Data and Key Metrics Changes - Revenue growth in New York and New Jersey is projected at roughly 2%, driven by contributions from New York City and Westchester [16] - The Mid-Atlantic region is expected to see just under 1% revenue growth, impacted by job losses in the back half of 2025 [18] - Northern California is projected to produce mid-3% revenue growth, supported by stable occupancy and lease rate growth [19] Company Strategy and Development Direction - The company aims to utilize its scale and investments in technology to drive incremental growth from its existing portfolio [9] - The focus for 2026 includes restraining new starts to $800 million, consisting of 7 projects with an average development yield of 6.5% to 7% [10][11] - The company is positioned to generate meaningful earnings and value creation as operating fundamentals improve and development earnings ramp into 2027 [14] Management's Comments on Operating Environment and Future Outlook - Management expects modest revenue growth of 1.4% in 2026, with job growth slightly stronger than in 2025 [9][11] - Demand for apartments is supported by rent-to-income ratios below 2020 levels, and the relative attractiveness of renting versus homeownership [12][13] - The supply outlook indicates only 80 basis points of stock this year in established regions, which is expected to serve as a tailwind [12][13] Other Important Information - The company raised almost $900 million of equity in 2024, the only one among peers to do so [7] - The company repurchased shares worth almost $490 million at an average price of $182 per share [8] - Legislative changes in Colorado and California are impacting the ability to charge certain fees, affecting other rental revenue [80][81] Q&A Session Summary Question: Renewal rates and expectations - Management indicated that renewal offers for February and March were in the 4%-4.5% range, with historical settlements typically lower [32] - The overall forecast for 2026 anticipates renewals averaging in the mid-3% range, with an expected improvement in move-ins [33][34] Question: Guidance lessons from 2025 - The company emphasized a detailed process for guidance, considering both upside and downside scenarios [45][46] - Development earnings are viewed as more concrete, with clarity on income rolling in from projects under construction [47] Question: Development starts and market conditions - The reduction in development starts is attributed to both a lack of suitable deals and a conscious decision to be cautious in a choppy environment [50][51] - The planned starts are heavily weighted towards established East Coast regions, which tend to have higher yields [53] Question: Impact of legislative changes - Management noted that legislation in Colorado and California is impacting revenue, with ongoing monitoring of potential ballot initiatives in Massachusetts [80][81] - The company is engaged with various associations to address legislative challenges and promote favorable outcomes [83]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 2.1% for 2025, with a turnover rate of 41%, the lowest in its history [6][7] - The company raised $2.4 billion of capital at an initial cost of 5%, positioning for continued investment in 2026 [8][10] - The quarterly dividend was increased to $1.78 per share, reflecting a conservative payout ratio [10] Business Line Data and Key Metrics Changes - The company started $1.65 billion of projects in 2025 with a projected initial stabilized yield of 6.2% [7] - Development earnings are expected to contribute $0.10 to Core FFO per share in 2026, with a projected $0.33 of expected earnings growth from development communities [23][25] - Same-store operating expense growth is projected at 3.8%, driven by the phase-out of property tax abatement programs and other factors [21] Market Data and Key Metrics Changes - The company anticipates modest revenue growth of 1.4% in 2026, with expectations of improved job growth and lower supply supporting this outlook [9][11] - Revenue growth in New York and New Jersey is projected at around 2%, while the Mid-Atlantic region expects just under 1% revenue growth due to job losses [16][18] - Northern California is expected to produce mid-3% revenue growth, supported by stable occupancy and lease rate growth [18][20] Company Strategy and Development Direction - The company aims to utilize its scale and investments in technology to drive incremental growth from its existing portfolio [9] - The focus for 2026 includes restraining new starts to $800 million, with an average development yield between 6.5% and 7% [10][11] - The company is positioned to generate meaningful earnings and value creation as operating fundamentals improve and development earnings ramp into 2027 [14] Management's Comments on Operating Environment and Future Outlook - Management expects a job growth environment slightly stronger than 2025, with potential catalysts for improved business investment and consumer confidence [11][12] - The demand for apartments is supported by favorable rent-to-income ratios and the attractiveness of renting versus homeownership [12][13] - The supply outlook indicates only 80 basis points of stock this year in established regions, which is expected to serve as a tailwind for the company [13] Other Important Information - The company has one of the strongest balance sheets in the industry and has been proactive in capital sourcing and allocation [7][8] - The company is monitoring legislative changes that could impact rental revenue, particularly in Colorado and California [80][81] Q&A Session Summary Question: Renewal rates and expectations - Management indicated that renewal offers for February and March were in the 4%-4.5% range, with historical settlements typically lower [32] - The overall forecast for 2026 anticipates renewals averaging in the mid-3% range, with expectations for improved move-ins [33][34] Question: Guidance lessons from 2025 - Management emphasized a detailed process for setting guidance, considering both upside and downside scenarios [45] - Development earnings are viewed as more concrete, with clarity on income from projects under construction [47] Question: Development starts and market conditions - The reduction in development starts is attributed to both a lack of suitable deals and a conscious decision to be cautious in a choppy environment [50] - The company is focusing on established East Coast regions for new projects, which tend to have higher yields [53] Question: Legislative impacts on revenue - Management highlighted legislation in Colorado affecting fee structures and utility recoveries as significant drags on other rental revenue [80] - The company is closely monitoring potential ballot initiatives in Massachusetts and other states that could impact operations [81]

Financial Data and Key Metrics Changes - AvalonBay Communities reported a revenue growth of 2.1% for 2025, with a turnover rate of 41%, the lowest in the company's history [4][5] - The company raised $2.4 billion of capital at an initial cost of 5% during 2025, positioning itself for continued investment in 2026 [6][7] - The quarterly dividend was increased to $1.78 per share, reflecting a conservative payout ratio in the industry [9] Business Line Data and Key Metrics Changes - The company expects modest revenue growth of 1.4% for 2026, driven primarily by an increase in lease rates and a better mix of jobs [8][13] - Development earnings are projected to increase significantly as projects lease up during 2026, despite funding costs from previous developments [9][25] - The company started $1.65 billion in projects in 2025 with a projected initial stabilized yield of 6.2% [5][27] Market Data and Key Metrics Changes - Revenue growth in New York and New Jersey is expected to be around 2%, driven by contributions from New York City and Westchester [14] - The Mid-Atlantic region is projected to see just under 1% revenue growth due to job losses in the back half of 2025 [16] - Northern California is expected to produce mid-3% revenue growth, supported by stable occupancy and lease rate growth [18] Company Strategy and Development Direction - AvalonBay aims to utilize its scale and investments in technology to drive incremental growth from its existing portfolio [8] - The company is focusing on a conservative approach to new starts, limiting activity to $800 million in 2026, with a strong spread to underlying cap rates [9][25] - The company is well-positioned with a high-quality portfolio and one of the strongest balance sheets in the REIT sector, despite expecting modest growth in 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management anticipates a job growth environment slightly stronger than 2025, with 750,000 net new jobs forecasted for 2026 [10] - Demand for apartments is expected to be supported by favorable rent-to-income ratios and the relative attractiveness of renting versus homeownership [11] - The supply outlook indicates only 80 basis points of stock this year in established regions, which is expected to serve as a tailwind for the company [11] Other Important Information - The company expects same-store operating expense growth of 3.8% in 2026, driven by the phase-out of property tax abatement programs and other factors [20] - Legislative actions in Colorado and California are impacting the ability to charge certain fees, which is expected to drag on other rental revenue [80] Q&A Session Summary Question: Renewal rates and expectations - Management indicated that renewal offers for February and March were in the 4%-4.5% range, but actual settlements are expected to be lower, typically around 100-125 basis points of dilution [32][33] Question: Guidance lessons from 2025 - The company emphasized a detailed process for setting guidance, considering both upside and downside scenarios, with confidence in development earnings being more concrete [44][46] Question: Development starts and market conditions - Management noted that the reduction in development starts was due to both a lack of suitable deals and a conscious decision to be cautious in a choppy environment [50][53] Question: Impact of legislative activity on revenue - Management highlighted that new legislation in Colorado and California is affecting revenue, with ongoing monitoring of potential political initiatives [80][81]

INVESTOR TELECONFERENCE PRESENTATION FOURTH QUARTER 2025 FEBRUARY 5, 2026 Avalon Ocean Avenue San Francisco, CA [FAVORABLE SUPPLY BACKDROP FOR ESTABLISHED REGIONS PERSISTS, For the reasons described in the referenced forward-looking statements, our historical results may not be indicative of future results. Avalon Belltown Towers Seattle, WA [FAVORABLE SUPPLY BACKDROP FOR ESTABLISHED REGIONS PERSISTS, WHILE THE SUNBELT CONTINUES TO DIGEST STANDING INVENTORY] [SUBURBAN COASTAL PORTFOLIO POSITIONED TO OUTPERF ...

Core Insights - AvalonBay Communities (AVB) reported Q4 2025 core funds from operations (FFO) per share of $2.85, exceeding the Zacks Consensus Estimate of $2.84, and reflecting a 1.8% increase from $2.80 in the prior year [1][9] - The company experienced higher same-store net operating income (NOI) and occupancy growth year over year, although higher interest expenses had a negative impact [1][4] - AVB increased its dividend per share by 1.7% to $1.78 [12] Financial Performance - Total revenues for Q4 2025 were $767.9 million, slightly below the Zacks Consensus Estimate of $768.3 million, but up 3.7% year over year [2] - For the full year 2025, core FFO per share was $11.24, a 2.1% increase year over year, aligning with the Zacks Consensus Estimate [2] - Total revenues for the full year 2025 reached $3.04 billion, marking a 4.4% improvement year over year [2] Operational Highlights - Same-store residential revenues rose 1.8% year over year to $680.5 million, while same-store residential operating expenses increased by 2.9% to $213.4 million, resulting in a 1.3% rise in same-store residential NOI to $467.1 million [3] - The same-store average revenue per occupied home increased to $3,079, up 1.7% from $3,028 in the previous year [4] - Same-store economic occupancy improved by 10 basis points year over year to 95.8% [4] Portfolio Activity - In Q4, the company acquired Avalon Townhome Collection Brier Creek in Durham, NC, for $36.5 million, consisting of 93 rental townhomes [5] - In January 2026, AvalonBay sold Avalon Sunset Towers in San Francisco, CA, for $105 million, comprising 243 apartment homes [5] - The company completed the development of two wholly owned communities with 612 apartment units and 32,000 square feet of commercial space at a total construction cost of $287 million [6] Development Pipeline - As of December 31, 2025, AvalonBay had 24 wholly owned development communities under construction, expected to contain 8,572 apartment homes and 69,000 square feet of commercial space, with an estimated total capital cost of $3.31 billion [7] Balance Sheet Position - As of December 31, 2025, AvalonBay had $187.2 million in unrestricted cash and cash equivalents, with no borrowings outstanding under its credit facility, but had nearly $739.6 million in outstanding borrowings under its unsecured commercial paper program [8] 2026 Guidance - For the full year 2026, AvalonBay expects core FFO per share to be between $11.00 and $11.50, indicating a slight increase at the midpoint from the 2025 reported number [11] - Management anticipates same-store residential revenue growth of 0.4%-2.4% and an operating expense increase of 2.7%-4.9%, with same-store residential NOI projected between negative 0.7% and 1.3% [11]

Financial Performance - Q4 2025 diluted EPS was $1.17, a decrease of 40.9% compared to Q4 2024's $1.98; full year EPS was $7.40, down 2.6% from $7.60 in 2024[4] - Q4 2025 FFO per share increased by 6.5% to $2.80 from $2.63 in Q4 2024; full year FFO per share rose 3.8% to $11.40 from $10.98[4] - Q4 2025 total revenue increased by 3.7% to $767.856 million compared to Q4 2024, with full-year revenue rising 4.4% to $3.040725 billion[59] - Net income attributable to common stockholders decreased by 41.6% to $164.733 million in Q4 2025, with full-year net income down 2.8% to $1.051301 billion[59] - Funds from operations (FFO) for Q4 2025 increased by 6.1% to $397.619 million, while full-year FFO rose 4.0% to $1.627863 billion[59] Revenue and Occupancy - Same Store Residential revenue for Q4 2025 increased by $11.8 million, or 1.8%, to $680.5 million; operating expenses rose by $6.0 million, or 2.9%, to $213.4 million[8] - Same Store average revenue per occupied home increased to $3,079, up 1.7% from $3,028 in the prior year[68] - Economic occupancy for Same Store properties was 95.8%, slightly up from 95.7% in the previous year[68] - The Same Store turnover rate for the current year period was 33.2%, down from 34.7% in the prior year[67] - Economic occupancy for the same store portfolio improved slightly to 95.9% in 2025 from 95.8% in 2024[74] Development and Acquisitions - The Company completed the development of two communities with a total capital cost of $287 million, adding 612 apartment homes and 32,000 square feet of commercial space[10] - During 2025, the Company sold nine communities for $811.7 million, resulting in a net gain of $336.6 million[14] - The Company acquired 12 communities in 2025 for a total purchase price of $841.9 million, including a 50% interest in Avalon Alderwood Place for $71.3 million[19][20] - The company expanded Avalon Pleasanton by adding 280 apartment homes, with the initial 82 homes fully leased in 2025[91] - The total number of communities under construction is 22, with a total of 8,572 homes and a weighted average cost per home of $3,307 million[90] Cash and Debt Management - As of December 31, 2025, the Company had $187.2 million in unrestricted cash and cash equivalents[22] - The Company repurchased 2.7 million shares of common stock for a total of $488.1 million during 2025[28] - Total debt amounts to $9,388.15 million with an average interest rate of 3.7%[100] - The average interest rate on debt as of December 31, 2025, is 4.62%[94] - Unsecured debt, net, increased to $7.879380 billion in 2025 from $7.358784 billion in 2024[63] Future Projections - Projected EPS for Q1 2026 is between $2.35 and $2.45, while the full year 2026 EPS is projected to be between $6.33 and $6.83[35] - Projected FFO per share for Q1 2026 is estimated to be between $2.69 and $2.79, with full year 2026 FFO projected between $10.80 and $11.30[35] - The company projects a decrease in EPS from $7.40 in 2025 to a range of $6.33 to $6.83 in 2026, reflecting an 11.1% decline[107] - The company expects capital expenditures for development started in 2026 to be between $700 million and $900 million[107] - The company anticipates delivering 3,025 development homes in 2026, with 3,175 expected to be occupied[107] Operating Expenses - Direct property operating expenses, excluding property taxes, rose by 8.9% to $158.786 million in Q4 2025, with full-year expenses increasing 8.2% to $623.580 million[59] - General and administrative expenses increased by 23.6% to $21.874 million in Q4 2025, with full-year expenses up 11.6% to $86.679 million[59] - Total same-store residential operating expenses increased by 2.9% in Q4 2025 and 3.8% for the full year, totaling $213,377 in Q4 and $851,659 for the full year[79] - Payroll costs rose by 5.4% in Q4 2025 and 4.1% for the full year, driven by increased employee benefits and average salaries[82] - Repairs and maintenance expenses increased by 13.6% in Q4 2025 and 9.2% for the full year, attributed to higher third-party maintenance labor and deployment of smart access technology[82] Dividends and Shareholder Returns - The Company declared a dividend of $1.78 per share for Q1 2026, a 1.7% increase from the previous dividend of $1.75 per share[32] - The company declared dividends of $247.436 million for Q4 2025, a 2.1% increase from $242.252 million in Q4 2024[59] - The Company emphasizes the importance of maintaining compliance with REIT distribution requirements and taxable income growth in its dividend strategy[33] Market and Economic Conditions - The Company is expanding into new regions including Raleigh-Durham, Charlotte, Southeast Florida, Dallas, Austin, and Denver[44] - The Company anticipates a change in NOI from new development contributing positively to its financial outlook[36] - The weighted average Market Cap Rate is influenced by projected NOI and capital expenditure estimates, which vary among buyers[125] - Economic Gain for disposed communities in 2025 was $104,989, calculated from a GAAP gain on sale of $336,649 after deducting accumulated depreciation of $231,660[118] - Legal settlements and costs for Q4 2025 amounted to $4,563, contributing to the overall financial performance metrics[119]

分组1 - AvalonBay Communities (AVB) reported quarterly funds from operations (FFO) of $2.85 per share, exceeding the Zacks Consensus Estimate of $2.84 per share, and showing an increase from $2.80 per share a year ago, resulting in an FFO surprise of +0.23% [1] - The company posted revenues of $767.86 million for the quarter ended December 2025, which was slightly below the Zacks Consensus Estimate by 0.06%, and an increase from $740.55 million year-over-year [2] - Over the last four quarters, AvalonBay has surpassed consensus FFO estimates three times but has not beaten consensus revenue estimates [2] 分组2 - The stock has underperformed the market, losing about 3.9% since the beginning of the year compared to the S&P 500's gain of 1.1% [3] - The future performance of AvalonBay's stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][6] - The current consensus FFO estimate for the upcoming quarter is $2.85 on revenues of $774.77 million, and for the current fiscal year, it is $11.58 on revenues of $3.16 billion [7] 分组3 - The Zacks Industry Rank indicates that the REIT and Equity Trust - Residential sector is currently in the bottom 35% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for AvalonBay was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Core Insights - The current reporting cycle for real estate investment trusts (REITs) is active, with several earnings releases scheduled for this week [1] U.S. Apartment Market in Q4 - The U.S. apartment sector experienced a shift in Q4 2025, with net move-outs returning for the first time in three years, resulting in a loss of approximately 40,400 net units [3] - Annual absorption was just over 365,900 units, the lowest since mid-2024, indicating a return to long-term averages [3] - Approximately 409,500 units were completed in 2025, with 89,400 in Q4, marking a fourth consecutive quarterly decline in completions [4] - Occupancy rates dipped to 94.8% at year-end, and effective asking rents fell by 1.7% in Q4, with annual rents down 0.6%, the largest annual decline since early 2021 [5] - Over 23% of units offered concessions averaging 7%, reflecting landlords' focus on occupancy over rent growth [5] - Market segmentation showed steep rent declines in supply-heavy Sun Belt metros, while coastal and tech-oriented markets saw modest rent gains [6] Earnings Outlook for Residential REITs - AvalonBay Communities is expected to report moderated Q4 results, with a Zacks Consensus Estimate of $768.33 million for revenues, indicating a 3.75% year-over-year increase [7][8] - Essex Property Trust is projected to benefit from its West Coast exposure, with a revenue estimate of $476.57 million, reflecting a 4.86% increase year-over-year [11][12] - Mid-America Apartment Communities anticipates a revenue of $557.79 million, suggesting a 1.45% rise from the previous year [15][16] - Equity Residential's revenue estimate stands at $789.34 million, indicating a 2.94% year-over-year increase, supported by portfolio diversification [17][18] - Camden Property Trust expects revenues of $394.65 million, implying a growth of 2.15% from the year-ago figure [20][21]

Core Insights - AvalonBay Communities, Inc. (AVB) is set to announce its fourth-quarter and full-year 2025 results on February 4, with a previous negative surprise of 2.14% in core funds from operations (FFO) per share in the last quarter, attributed to weaker-than-expected top-line growth [1][2] Company Performance - Over the past four quarters, AvalonBay's earnings have surpassed the Zacks Consensus Estimate twice, with an average negative surprise of 0.36% [2] - The Zacks Consensus Estimate for fourth-quarter revenues is $768.33 million, indicating a year-over-year increase of 3.75% [10] - The consensus for same-store economic occupancy is projected at 95.65% for the fourth quarter [10] - The quarterly core FFO per share estimate has been revised down by 2 cents to $2.84, reflecting a year-over-year growth of 1.43% [11] Market Conditions - The US apartment market experienced a softening in fundamentals during the fourth quarter of 2025, with net move-outs of approximately 40,400 units, marking the first seasonal pullback in three years [3] - Full-year absorption totaled over 365,900 units, indicating a return to long-term leasing trends rather than a demand collapse [3] - Approximately 409,500 units were delivered in 2025, with 89,400 units in the fourth quarter, leading to increased competition despite a slowdown in completions [4] Financial Outlook - AvalonBay has lowered its core FFO per share growth outlook to 2.2% from 3.5%, with same-store residential NOI growth reduced to 2% from 2.7% due to lower revenue growth and higher expense growth [7] - The company has faced challenges from lower-than-expected job growth, leading to revenue moderation and higher operating costs in the second half of 2025 [8] - For full-year 2025, the Zacks Consensus Estimate for core FFO per share has been revised down by 3 cents to $11.24, indicating a year-over-year increase of 2.09% on revenues of $3.04 billion [12] Competitive Landscape - Market performance remains uneven, with supply-heavy Sun Belt markets experiencing the steepest rent pressure, while coastal and tech-oriented metros continue to see rent growth due to tighter supply [5] - AvalonBay's near-term outlook has moderated amid decelerating rent growth and rising expenses, but a solid balance sheet and limited upcoming supply in core markets position the company for long-term stability [6]