AvalonBay Communities AVB reported first-quarter 2025 core funds from operations (FFO) per share of $2.83, beating the Zacks Consensus Estimate of $2.80. The figure also climbed 4.8% from the prior-year quarter’s tally.

The quarterly performance reflects better-than-expected operating results. AVB has also reaffirmed its full-year 2025 outlook.

Total revenues in the quarter came in at $745.9 million, missing the Zacks Consensus Estimate marginally. However, the figure increased 4.6% on a year-over-year basis.

AVB’s Quarter in Detail

In the reported quarter, same-store residential revenues increased 3% year over year to $693.1 million. Same-store residential operating expenses rose 4% to $214.76 million. As a result, the same-store residential NOI climbed 2.6% to $478.3 million.

Same-store average revenue per occupied home rose to $3,032 in the first quarter, up 2.9% from $2,946 in the year-ago period. Same-store economic occupancy of 96% rose 10 basis points (bps) year over year. Our estimate for the metric was 95.9%.

Interest expenses also increased 9.3% year over year to $59.9 million. Our estimate for the metric was $58.9 million.

As of March 31, 2025, AvalonBay had 19 wholly owned Development communities under construction (expected to contain 6,595 apartment homes and 69,000 square feet of commercial space). The estimated total capital cost of these development communities at completion is $2.5 billion.

AVB’s Portfolio Activity

In February 2025, AVB entered into agreements to acquire eight apartment communities in its Texas expansion region. During the first quarter, the company acquired the two communities in the Austin metropolitan area, comprising 857 homes, for $187.0 million. It was funded mainly with disposition proceeds. The remaining six communities located in the Dallas-Fort Worth metropolitan area were acquired on April 30, 2025 for a stated purchase price of $431.5 million.

During the reported quarter, AVB sold Avalon Wilton on River Road, a wholly owned community with 102 apartment homes, in Wilton, CT, for $65.1 million, resulting in a gain in accordance with GAAP of $56.48 million. It marked the company's exit from the Connecticut market.

AVB’s Balance Sheet Position

AVB had $53.26 million in unrestricted cash and cash equivalents as of March 31, 2025. As of the same date, the company did not have any borrowings outstanding under its unsecured revolving credit facility. It had outstanding borrowings of $224.9 million under its unsecured commercial paper note program.

Additionally, its annualized net debt-to-core EBITDAre for the January-March period was 4.3 times, and the unencumbered NOI for the year ended March 31, 2025 was 95%.

Story Continues

AVB’s 2025 Outlook

For full-year 2025, AVB has reaffirmed its full-year core FFO and same-store outlooks as disclosed in its prior earnings release in February. At that time, AVB projected core FFO per share between $11.14 and $11.64. The Zacks Consensus Estimate presently stands at $11.41, within the projected range.

Management expected same-store residential revenue growth of 2-4% and an operating expense increase of 3-5.2%. Same-store residential NOI is projected to expand 1.3-3.5%.

For the second quarter of 2025, AvalonBay expects core FFO per share in the range of $2.72-$2.82. This is lower than the Zacks Consensus Estimate, which is currently pegged at $2.85.

AvalonBay currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AvalonBay Communities, Inc. Price, Consensus and EPS SurpriseAvalonBay Communities, Inc. Price, Consensus and EPS Surprise

AvalonBay Communities, Inc. price-consensus-eps-surprise-chart | AvalonBay Communities, Inc. Quote

Performance of Other Residential REITs

Equity Residential EQR reported first-quarter 2025 normalized FFO per share of 95 cents, which outpaced the Zacks Consensus Estimate of 93 cents. The figure also improved 2.2% from the year-ago quarter. Rental income of $760.8 million missed the consensus mark of $766.8 million. Rental income was up 4.1% year over year. Equity Residential’s results reflected a rise in same-store revenues and physical occupancy on a year-over-year basis. Equity Residential reaffirmed its guidance for 2025. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Mid-America Apartment Communities MAA, commonly known as MAA, reported first-quarter 2025 core FFO per share of $2.20, which surpassed the Zacks Consensus Estimate of $2.16. However, the reported figure fell 0.9% year over year from $2.22. MAA’s results reflected healthy demand and an occupancy rise. Mid-America witnessed low levels of resident turnover. Rental and other property revenues of $549.3 million for the first quarter missed the Zacks Consensus Estimate of $551.3 million. However, the reported figure was 1.04% higher than the year-ago quarter’s tally.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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