AvalonBay Q4 FFO & Revenues Miss Estimates, Dividend Raised

Core Insights - AvalonBay Communities (AVB) reported fourth-quarter 2024 core funds from operations (FFO) per share of $2.80, missing the Zacks Consensus Estimate of $2.83, but reflecting a 2.2% increase year-over-year [1] - Total revenues for the quarter were $740.5 million, slightly below the Zacks Consensus Estimate, but up 5.1% year-over-year [2] - For full-year 2024, core FFO per share was $11.01, a 3.6% increase year-over-year, but also below the Zacks Consensus Estimate of $11.04 [3] Financial Performance - Same-store residential revenues increased by 3.2% year-over-year to $670.1 million, while same-store residential operating expenses rose by 5.4% to $208.1 million, leading to a 2.3% increase in same-store residential NOI to $462.1 million [4] - Same-store average revenue per occupied home rose to $3,040 in the fourth quarter, up from $3,033 in the previous quarter and $2,944 in the year-ago quarter [5] - Property management and other indirect operating expenses increased by 40.1% year-over-year to $51.4 million, and interest expenses rose by 19.2% year-over-year to $59 million [5] Development and Acquisitions - As of December 31, 2024, AvalonBay had 17 consolidated development communities under construction, expected to contain 6,004 apartment homes and 59,000 square feet of commercial space, with an estimated total capital cost of $2.25 billion [6] - In the fourth quarter, AVB acquired two wholly owned communities for a total of $185.5 million [7] - The company sold three wholly owned communities for $212.5 million, resulting in a GAAP gain of $121.8 million [8] Balance Sheet and Debt Position - As of December 31, 2024, AvalonBay had $108.6 million in unrestricted cash and cash equivalents and $158.5 million in restricted cash, with no borrowings outstanding under its $2.25 billion unsecured revolving credit facility or $500 million unsecured commercial paper note program [9] - The annualized net debt-to-core EBITDAre for the October-December period was 4.2 times, with an unencumbered NOI of 95% for the year ended December 31, 2024 [10] Future Guidance - For full-year 2025, AVB expects core FFO per share to be between $11.14 and $11.64, indicating a 3.5% increase at the midpoint from the 2024 reported number [12] - Management anticipates same-store residential revenue growth of 2-4% and an operating expense increase of 3-5.2%, with same-store residential NOI projected to expand by 1.3-3.5% [12] Dividend Announcement - Concurrent with its fourth-quarter earnings release, AvalonBay declared a first-quarter 2025 dividend of $1.75 per share, a 2.9% increase over the prior quarter's dividend [13]