AvalonBay Communities
Annual Report 2011

Plain-text annual report

Targeted Growth 2011 Annual Report AvalonBay Communities, Inc. is an equity REIT primarily engaged in developing, redeveloping, acquiring and managing quality apart-ment communities in high barrier-to-entry markets within the United States. Our markets are located in the Northeast, Mid-Atlantic, Pacific Northwest, and Northern and Southern California. Our strat-egy is to be leaders in customer insight, market research and capi-tal allocation, delivering a range of multifamily offerings tailored to serve the needs of the most attractive customer segments in the best-performing submarkets. At year-end 2011, our Total Market Capitalization was approximately $16 billion.AvalonBay Communities, Inc. common shares are traded on the New York Stock Exchange under the ticker symbol AVB and are included in the S&P 500 Index. More information about AvalonBay may be found on our website at www.avalonbay.com.FFONAVTSRAVB Multifamily Sector Avg.10 - Year Compound Annual Growth RateSource: Green Street Advisors, SNL FinancialLONG-TERM OUTPERFORMANCE(2)20%15%10%5%0%-5%-2.0%1.5%8.3%16.0%11.4%6.1%Cover: AVA™ Queen Anne, Seattle, WAThis Page: Avalon Charles Pond, Long Island, NY1 year3 year10 yearAVB Multifamily Sector Avg.Compound Annual Growth RateTOTAL SHAREHOLDER RETURN(1)40%30%20%10%0%11.9%19.4%34.6%16.0%11.4%28.2%Source: SNL Financialthe best-performing targeted Customer Markets segments distinct, tailored Brands 2 AvalonBay Communities, Inc.2011 was a great year for AvalonBay. Led by impressive same store Net Operating Income (NOI) growth of over 8%, we enjoyed Funds from Opera-tions per Share (FFO) growth of just over 14% – our best performance in over ten years. Our development, investments, and redevelopment platforms were all active, laying the foundation for strong growth in the years to come. We con-tinued to fortify our already best-in-class balance sheet with additional capital raising activity of nearly $1 billion. For the year, our Total Shareholder Return was 19%, while our ten-year average Total Shareholder Return stands at 16%.Shareholdersto ourAVA Queen Anne, Seattle, WAAVA Queen Anne, Seattle, WA Well established demographic trends created a powerful tailwind for rental performance, marked by strong growth in younger age segments more likely to rent than own, and a continued decline in the homeownership rate, particularly among young adults. This increased demand was met with exceptionally low levels of new rental supply, with completions running at the lowest levels in over 30 years. We continue to enjoy an advantaged position within our industry, distinguished by our 25-year history in some of the best markets in the US -- markets with key structural advantages. We use that experience, including the established relationships and deep market knowledge that come with it, to further add value through a diverse set of capabilities including operations, development, redevelopment, and asset management. Additionally, our capital markets expertise and our con- servative balance sheet management allow us to access capital on terms which further extend our competitive advantage and provide opportunities that others may not be able to exploit. As we begin 2012, Tim steps into the CEO role with a sharper focus on our time-tested strategy. We plan to continue to build on our advantaged position and more deeply penetrate our chosen markets. To appeal more specifically to the most profitable customer segments within our markets, we recently announced the introduction of two new brands to complement our core Avalon product offering. We are confident that our multi-brand strategy will contribute to out- performance in the future, and we see tremendous opportunities to apply it within our portfolio and submarket allocation strategy. By utilizing our proprietary insights from our growing capa- bilities in market research and consumer insight, we look forward to Targeted Growth in 2012 and beyond. The Year in Review On a national and international level, 2011 was a year of uncertainty and unmet expectations for economic recovery. The debt ceiling debate in Washington, sovereign debt crisis in Europe, and continued fragile consumer confidence contributed to disappointing job growth, averaging just shy of 150,000 net new jobs per month. The corporate sector, enjoying record liquidity, was reluctant to expand due to lack of confidence in future growth given the uncertainty that seemed to be everywhere. Despite the backdrop of this weak macro environment, we did experience strong demand/supply fundamentals in the apartment sector. Growth in jobs and households was concentrated among young adults, who are more likely to rent than own. In fact, rental household growth of 1.2 million for the year represented 84% of total household growth, a far higher share than long-run averages. And AvalonBay Communities, Inc. 3 4 AvalonBay Communities, Inc.We have a 25-year history in some of the best-performing markets in the US – markets with key structural advantages.AVB MarketsU.S.HIGHER HOUSEHOLD INCOME$70,000$65,000$60,000$55,000$50,000$45,000Median Household IncomeAVB MarketsU.S.Median House Price (in thousands)Ratio: Price to IncomeHIGH BARRIERS TO HOMEOWNERSHIP$400$300$200$10006.04.02.00.0Median Existing Ratio: Median HomeHome Price Price to Median Household Income AVB MarketsU.S.Share of Population >25 Years Old with Bachelor’s Degree or HigherMORE COLLEGE-EDUCATED RESIDENTS35%30%20%24.0%32.0%Marketsthe best-performingSource: Moody’s Analyticswith new completions of only 80,000 apartments, representing just 37% of the 15-year average, demand/supply conditions were favorable for raising rents in 2011. In our same store portfolio, we benefited from this imbalance of demand and supply with revenue growth of 5%. Combined with a decline in operating expenses of over 1%, same store NOI growth ended the year at over 8%. As the year progressed, rental revenue accelerated in our West Coast markets, particularly those markets driven by technology, while East Coast markets, which led our portfolio earlier in the year, enjoyed strong but moderating growth. In addition to the operating performance of our existing portfolio, increased investment activity also drove results, reflecting an organization creating value from multiple platforms, including: Development Development is the primary driver of Targeted Growth over time. We were early in ramp- ing up our development activity, investing in anticipation of the strong fundamentals our markets currently enjoy. The benefit of this foresight will accrue to us over time as we deliver new development at an attractive cost basis and bring new communities on line in what we expect will be a great environment for new lease-ups. In 2011, we completed six new communities totaling over 1,100 apartment homes for a Total Capital Cost of almost $300 million, and started 11 additional communities representing 3,100 apartment homes at a projected Total Capital Cost of approximately $900 million. At year end, we had about $1.5 billion of development underway. Portfolio Management 2011 was an ideal time to redevelop assets with greater Targeted Growth potential. We invested additional capital early in the cycle and used our expanded brand portfolio to target different customer segments based on the profile and location of the asset and its residents. We started ten redevelopments during the year for a Total Capital Cost of approximately $85 million, and completed seven redevelopments representing approxi- mately $70 million of additional investment.[3] We also phased in our occupied turn program at all but the most complex redevelopment communities. Under this pioneering initiative, we typically renovate our apartment homes while our customer remains in resi- dence, allowing for shorter, more predictable redevelopment schedules and lower vacancy loss. This program is a real competitive advantage, and we are now applying it as standard practice in redevelopment. In addition, we were opportunistic in pursuing our broader portfolio allocation objectives by selling several communities in the Washington, DC and Boston areas and acquiring eight communities in Southern California, significantly increasing our presence there. AvalonBay Communities, Inc. 5 Capital Management As we grow our investment activity to take advantage of the opportunities we are finding in the market, we are ever mindful of the need to source cost effective capital to fund this activity while preserving and enhancing the strength of our balance sheet. To this end, we raised over $950 million of equity in 2011, and reduced our debt outstanding by $430 million. This reduction in leverage, combined with strong earnings growth, resulted in a significant improvement in key credit metrics by year end: (cid:85) Debt-to-Total Market Capitalization of approximately 23%, as compared to the sector average of 38%. (cid:85) Debt-to-EBITDA of 5.3x, as compared to the sector average of 7.4x. (cid:85) An Interest Coverage ratio of 4.0 compared to a sector average of 2.8. With significant Targeted Growth planned for 2012 and beyond, we enhanced our liquidity position, finishing the year with $700 million in cash on hand and $750 million of available capacity under our credit facility. Adding it all up, FFO per share increased 14% for the full year, or 17% after adjusting for non-routine items. Earnings per Share (EPS) increased 135%, driven by gains on assets sold as we harvested value created over the past real estate cycle. [4] On the strength of this performance and our outlook for 2012 and beyond, we announced a 9% divi- dend increase in the first quarter of 2012. Looking Forward: Targeted Growth Outlook for 2012 Prospects for 2012 look promising. The consensus forecast for the US economy is for modestly stronger growth, as the corporate sector starts to put some of its liquidity to work through increased hiring and capital investment. Wage growth is also expected to improve after years of productivity gains and suppressed income growth from soft labor market conditions. In the apartment market, demand should remain strong, as the demographic tailwind continues and consumer psychology continues to favor the flexibility of renting. Meanwhile, new completions nationwide in 2012 will continue to run below the long-term average. 6 AvalonBay Communities, Inc. AvalonBay Communities, Inc. 7Avalon Union City, CAThrough our proprietary market and consumer research, we can better identify the most attractive customer segments in each of our markets and tailor our product and service offerings to maximize appeal to those segments.targeted segmentsCustomer8 AvalonBay Communities, Inc.For discerning residents who want to live comfortably and enjoy select advantages that complement their lifestyle.Moderately-priced apartments for residents who want a better standard in apartment living.We offer three distinct brands – Avalon®, AVA™ and eaves™ – allowing us to segment our markets by consumer preference and attitude as well as by location and price. Our expanded brand portfolio will help us reach new customers and better serve our existing customers.Avalon Union City, For urban-minded people who crave the energy of a vibrant neighborhood, social engage-ment and personal expression.Brandsdistinct, tailored™™®Similar to last year, we expect Targeted Growth to come from multiple platforms in 2012. With com- pelling industry fundamentals, we expect another strong year from our stabilized portfolio. We will continue to expand our investment activity through new development, with over $1.1 billion in new starts planned for the year, while we bring on line approximately 2,100 apartments in communities currently under construction. We also plan to invest in our existing portfolio through redevelopment starts of another $125 million. Finally, we expect to address our portfolio allocation goals through transaction activity, including both acquisitions and dispositions. This Targeted Growth will be supported by our strong balance sheet and robust organizational capabilities. Strategic Evolution We’ve had a long-standing focus on structurally advantaged coastal markets with high house- hold incomes, lower home affordability and constraints on new supply. In last year’s report, we discussed the importance of submarket focus and price point/asset quality in optimiz- ing overall portfolio performance. Because no single strategy or product type offers consistent outperformance in each of our markets, the right market position for any particular asset will vary depending on the asset and the submarket – our business is not “one size fits all”. Our brand strat- egy is a natural extension of this conclusion, and provides a key vehicle for us to better target our product and service offerings to multiple customer segments and geographic submarkets within our footprint. Our expanded brand lineup includes three distinct offerings: Avalon remains our core offering, focusing on upscale apartment living and high-end amenities and services in leading urban and suburban submarkets. Avalon branded properties will continue to grow primarily through new development. AVA is designed to attract the increasing number of people, particularly the younger “Gen Y” segment, who want to live in or near high energy, transit-served urban neigh- borhoods. AVA communities will generally have smaller apartments, many designed for roommate living, and feature modern design, a technology focus and amenities that maximize the social experience of residents. The AVA brand will grow primarily through new development and redevelopment. eaves by Avalon rounds out our brand lineup, and is targeted to the resident seeking moderately-priced, good quality apartment living with practical and functional amenities and services. eaves by Avalon communities will tend to be located in suburban areas and will generally be established assets, with the brand growing through redevelopment and acquisitions, and, in certain circumstances, through the re-branding of existing assets. Avalon Union City, Oakland/East Bay, CA AvalonBay Communities, Inc. 9 We opened our first three AVA communities in 2011 (two redevelopments and one development community), and anticipate having approximately 20 open or under construction by the end of 2013. We plan to re-brand over 40 existing communities to eaves by Avalon by the end of 2013. The addition of these new brands will allow us to further penetrate our existing markets, and pro- vide for Targeted Growth by segmenting our markets by consumer preference and attitude as well as by location and price. By delivering distinctive offerings to different customer segments, AVA and eaves by Avalon will help us reach new customers and better serve our existing customers, all while staying within our established geography. Conclusion This is an exciting time for our industry and for AvalonBay. Tim’s transition to CEO is a reflection of stable and steady leadership, resulting from a senior management team that has worked together for 20 years with leadership from Bryce over the last ten years, providing deep institutional knowl- edge and perspective. The fundamentals look great, our markets continue to be the strongest in the country, and we are in an enviable competitive position given our track record and long-standing commitment to our markets. Through a well-designed extension of our time-tested strategy, we are positioned for Targeted Growth in the future that will enhance our sector-leading performance. As always, thank you to our shareholders for your continued support, to our associates for your extraordinary efforts, and to our residents who have chosen to make an AvalonBay community their home. Bryce Blair, Chairman Tim Naughton, Chief Executive Officer & President 10 AvalonBay Communities, Inc. Avalon Wilton, Fairfield County, CT AvalonBay Communities, Inc. 11We have the strongest balance sheet in our sector. With a debt to total market capitalization of just 23%, we have the financial flexibility to fund new investment and protect our liquidity from volatile capital markets.Avalon Wilton, Fairfield County, CTa strong Balance SheetDec 2009Dec 2010Dec 2011AVB Multifamily Sector Avg.STRONG AND IMPROVING DEBT-TO-EBITDA10x9x8x7x6x5xLOW DEBT-TO-MARKET CAPITALIZATION RATIOFixed Debt19%Equity77%Floating Debt3%AVB10-Year Dividend Change (2001-2011)Compound Annual Growth RateLONG-TERM DIVIDEND GROWTH10.0%5.0%0%-5.0%Multifamily Sector Avg.-2.7%3.4%Source: SNL Financial12 AvalonBay Communities, Inc. Avalon Walnut Creek, Oakland/East Bay, CA Notes 1. Total Shareholder Return: The change in value over the period stated with all dividends reinvested. Total Shareholder Return is sometimes presented as the compound annual growth rate. The Total Shareholder Return for each year within the timeframe presented may vary. 2. NAV per Share Growth: The estimated compound annual growth rate of Net Asset Value (NAV) per Share as estimated by Green Street Advisors, Inc. during the periods indicated. NAV per Share Growth for each year within the timeframe presented may vary. 3. Redevelopment investment is shown excluding dollars invested prior to start of redevelopment. 4. A significant portion of the increase in EPS came from the sale of an asset subject to a ground lease. Upon sale, prior straight- line lease expense in excess of cash payments totaling $1.35 per share was reversed, increasing the gain on sale. Table Of Contents Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosure About Market Risk Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Consolidated Financial Statements 32 33 36 56 57 F-3 Form 10-K Page Definitions And Reconciliations Of Non-GAAP Financial Measures And Other Terms This Annual Report contains certain non-GAAP financial measures and other terms. The definition and calculation of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. The non-GAAP financial measures referred to below should not be considered an alternative to net income as an indication of our performance. In addition, these non-GAAP financial measures do not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered as an alternative measure of liquidity or as indicative of cash available to fund cash needs. The definitions of non-GAAP financial measures and other terms not included below (Funds from Operations, Net Operating Income, Established/Same Store Communities) are contained in our Annual Report on Form 10-K which is distributed with and a part of this Annual Report. Debt to EBITDA is calculated as the par value of debt (excluding preferred shares) net of cash / forward 12-month cash EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). Interest Coverage is calculated by the Company as EBITDA from continuing operations, excluding land gains and gain on the sale of investments in real estate joint ventures, divided by the sum of interest expense, net, and preferred dividends. Interest Coverage is presented by the Company because it provides rating agencies and investors an additional means of comparing our ability to service debt obligations to that of other companies. EBITDA is defined by the Company as net income or loss attributable to the Company before interest income and expense, income taxes, depreciation and amortization. A reconciliation of EBITDA and a calculation of Interest Coverage for the fourth quarter of 2011 are as follows (dollars in thousands): $323,085 Net income attributable to common stockholders 37,718 Interest expense, net Interest expense (discontinued operations) 808 Depreciation expense 63,008 306 Depreciation expense (discontinued operations) EBITDA EBITDA from continuing operations EBITDA from discontinued operations EBITDA EBITDA from continuing operations Interest expense, net Interest coverage $424,925 $152,656 272,269 $424,925 $152,656 37,718 4.0 AvalonBay Communities, Inc. 13 Avalon Walnut Creek, Oakland/East Bay, CA Total Capital Cost includes all capitalized costs projected to be or actually incurred to develop the respective Development or Redevelopment Community or Development Right, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, all as determined in accordance with GAAP. For Redevelopment Communities, Total Capital Cost excludes costs incurred prior to the start of redevelopment when indicated. With respect to communities where development or redevelopment was completed in a prior or the current period, Total Capital Cost reflects the actual cost incurred, plus any contingency estimate made by management. Total Capital Cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. For joint ventures not in construction, Total Capital Cost is equal to gross real estate cost. Redevelopment Communities are communities where the Company owns a majority interest and where substantial redevelopment is in progress or is planned to begin during the current year. Redevelopment is generally considered substantial when capital invested during the reconstruction effort is expected to exceed either $5,000,000 or 10% of the community’s pre-development basis and is expected to have a material impact on the community’s operations, including occupancy levels and future rental rates. Development Rights are development opportunities in the early phase of the development process for which the Company either has an option to acquire land or enter into a leasehold interest, for which the Company is the buyer under a long-term conditional contract to purchase land or where the Company controls the land through a ground lease or owns land to develop a new community. The Company capitalizes related pre-development costs incurred in pursuit of new developments for which future development is probable. Total Market Capitalization represents the aggregate of the market value of the Company’s common stock, the market value of the Company’s operating partnership units outstanding (based on the market value of the Company’s common stock) and the outstanding principal balance of the Company’s debt. Leverage is total debt as a percentage of Total Market Capitalization. Management believes that Leverage can be one useful measure of a real estate operating company’s long-term liquidity and balance sheet strength, because it shows an approximate relationship between a company’s total debt and the current total market value of its assets based on the current price at which the Company’s common stock trades. Changes in Leverage also can influence changes in per share results. A calculation of Leverage as of December 31, 2011 is as follows (dollars in thousands): Common stock Preferred stock Operating partnership units Total debt Total market capitalization Debt as % of capitalization $12,429,943 – 7,500 $3,633,125 $16,064,000 22.6% Because Leverage changes with fluctuations in the Company’s stock price, which occur regularly, the Company’s Leverage may change even when the Company’s earnings, interest and debt levels remain stable. Investors should also note that the net realizable value of the Company’s assets in liquidation is not easily determinable and may differ substantially from the Company’s Total Market Capitalization. The Multifamily Sector Average is a weighted average based on Total Market Capitalization per SNL Financial. The weighted average for “Total Shareholder Return” includes AIV, BRE, CPT, EQR, ESS, HME, and UDR. The weighted average for “NAV per Share Growth” includes all companies under Green Street Advisors, Inc.’s coverage for which data is available during each of the time periods presented and includes AEC, BRE, CPT, EQR, PPS and UDR. The weighted average for “Leverage”, “Fixed Charge Coverage” and “Debt to EBITDA” includes AIV, BRE, CPT, EQR, ESS, HME, and UDR. The Stock Performance Graph provides a comparison, from December 2006 through December 2011, of the cumulative total shareholder return (assuming reinvestment of dividends) among the Company, the Standard & Poor’s 500 Index, and a peer group index (the FTSE NAREIT Apartment REIT Index) composed of 15 publicly-traded apartment REITs, including the Company based on an initial purchase price of $100. The FTSE NAREIT Apartment REIT Index includes only REITs that invest directly or indirectly primarily in the equity ownership of multifamily residential apartment communities. Upon written request to the Company’s Secretary, the Company will provide any stockholder with a list of REITs included in the FTSE NAREIT Apartment REIT Index. The historical information set forth below is not necessarily indicative of future performance. Data for the FTSE NAREIT Apartment REIT Index and the S&P 500 Index were provided to the Company by NAREIT. STOCK PERFORMANCE $200 $150 $100 $50 $0 2006 2007 2008 2009 2010 2011 AVB FTSE NAREIT Apartment REIT Index S&P 500 Index Source: NAREIT Benchmarked at 12/06=$100 14 AvalonBay Communities, Inc. Dec 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011 AvalonBay FTSE NAREIT Apartment REIT Index S&P 500 Index $100 100 100 $75 75 105 $52 56 66 $74 73 84 $106 107 97 $126 123 99 Ten Year FFO Reconciliation to Net Income (dollars in thousands): For the Year Ended (Dollars in thousands) 12-31-11 12-31--10 12-31-09 12-31-08 12-31-07 12-31-06 12-31-05 12-31-04 12-31-03 12-31-02 Net income Dividends attributable to preferred stock Depreciation—real estate assets, including discontinued operations and joint venture adjustments Distributions to noncontrolling interests, including discontinued operations Cumulative effect of change in accounting principle Gain on sale of unconsolidated entities $441,622 — $175,331 — $155,647 — $411,487 (10,454) $358,160 (8,700) $266,546 (8,700) $310,468 (8,700) $207,779 (8,700) $262,503 (10,744) $173,125 (17,896) 256,986 237,041 221,415 203,082 184,731 165,982 163,252 159,221 129,207 143,026 27 — (3,063) 55 — — 66 — — 216 280 391 1,363 3,048 1,263 1,601 — (3,483) — (59,927) — (6,609) — — (4,547) — — — — — Gain on sale of operating communities (281,090) (74,074) (63,887) (284,901) (106,487) (97,411) (195,287) (121,287) (159,756) (48,893) Funds from Operations attributable to common stockholders Weighted average common shares outstanding—diluted $414,482 $338,353 $313,241 $315,947 $368,057 $320,199 $271,096 $235,514 $222,473 $250,963 90,777,462 84,632,869 80,599,657 77,578,852 79,856,927 75,586,898 74,759,318 73,354,956 70,203,467 70,674,211 EPS—diluted $4.87 $2.07 $1.93 $5.17 $4.38 $3.42 $4.05 $2.75 $3.60 $2.22 FFO per common share—diluted $4.57 $4.00 $3.89 $4.07 $4.61 $4.24 $3.63 $3.21 $3.17 $3.55 AvalonBay Communities, Inc. 15 AvalonBay Corporate Information BOARD OF DIRECTORS Bryce Blair (4) Chairman of the Board AvalonBay Communities, Inc. Alan B. Buckelew (2, 4) CEO and President Princess Cruises, Inc. A global cruise line Bruce A. Choate (4,5) President and CEO Watson Land Company A real estate investment trust John J. Healy, Jr. (2,5) Private Investor Timothy J. Naughton (4) Chief Executive Officer and President AvalonBay Communities, Inc. Lance R. Primis (1,3,5) Managing Partner Lance R. Primis and Partners, LLC A management consulting firm Peter S. Rummell (3,4) Private Investor H. Jay Sarles (2,3) Private Investor W. Edward Walter (2,4) President and CEO Host Hotels & Resorts, Inc A real estate investment trust 1 Lead Independent Director 2 Audit Committee 3 Compensation Committee 4 Investment and Finance Committee 5 Nominating and Corporate Governance Committee OF F I C ER S Bryce Blair Chairman of the Board Timothy J. Naughton Chief Executive Officer and President Thomas J. Sargeant Chief Financial Officer Leo S. Horey III Chief Administrative Officer Matthew H. Birenbaum Executive Vice President Corporate Strategy 16 AvalonBay Communities, Inc. Sean J. Breslin Executive Vice President Investments, Asset Management & Property Operations William M. McLaughlin Executive Vice President Development & Construction – Northeast Edward M. Schulman Executive Vice President General Counsel Stephen W. Wilson Executive Vice President Development & Construction – West Coast, Mid-Atlantic David W. Bellman Senior Vice President Construction - East Coast Kurt D. Conway Senior Vice President Brand Strategy Deborah A. Coombs Senior Vice President Property Operations - West Coast Jonathan B. Cox Senior Vice President Development - Mid-Atlantic Scott W. Dale Senior Vice President Development – MA Ronald S. Ladell Senior Vice President Development - NJ Joanne M. Lockridge Senior Vice President Finance, Assistant Treasurer and Assistant Secretary J. Richard Morris Senior Vice President Construction Kevin P. O’Shea Senior Vice President Investment Management Christopher L. Payne Senior Vice President Development - Southern CA Martin Piazzola Senior Vice President Development - NY Bernard J. Ward Senior Vice President National Operations Suzanne Jakstavich Vice President Human Resources Danyell D. Alders Vice President Property Operations - Southern CA Scott R. Kinter Vice President Construction - Northeast Lisa B. Bongardt Vice President Property Operations - Mid-Atlantic Lyn C. Lansdale Vice President Strategic Business Services Jonathan R. Busch-Vogel Vice President Development – NY Sarah K. Mathewson Vice President Property Operations - MA, RI Duane W. Carlson Vice President Construction - Northern CA, Pacific NW Michael J. Roberts Vice President Development - MA Jong M. Chung Vice President Design Robert S. Salkovitz Vice President Construction - Southern CA Sean M. Clark Vice President Redevelopment & Asset Management - West Coast Keri A. Shea Vice President Finance & Treasurer Elizabeth A. Smith Vice President Redevelopment & Asset Management - East Coast Margaret A. Spriggs Vice President Development - Northern CA Mona R. Stahling Vice President Operations Craig F. Thomas Vice President Market Research Alaine Walsh Vice President Corporate and Investment Services Timothy M. Walters Vice President Investments – West Coast Matthew B. Whalen Vice President Development – Long Island Catherine T. White Vice President Associate General Counsel Heather J. Duffy Vice President Property Operations - CT, NY Stephen M. Fabian Vice President Customer Care Center Mark Forlenza Vice President Development - CT Brian E. Fritz Vice President Development - Pacific NW Patrick Gniadek Vice President Investments - East Coast Christopher B. Helsabeck Vice President Development - Mid-Atlantic Kurt R. Hesser Vice President Finance Karen A. Hollinger Vice President Information Services David A. Hutchins Vice President Internal Audi AvalonBay Corporate Information HEADQUARTERS Washington, DC Ballston Tower 671 N. Glebe Road Suite 800 Arlington, VA 22203 Phone: Fax: (703) 329-6300 (703) 329-9130 REGIONAL OFFICES Boston, MA 51 Sleeper Street Suite 750 Boston, MA 02210 Phone: Fax: (617) 654-9500 (617) 426-1610 Shelton, CT 1000 Bridgeport Avenue Suite 258 Shelton, CT 06484 Phone: Fax: (203) 926-2300 (203) 926-2355 Long Island, NY 135 Pinelawn Road Suite 130 South Melville, NY 11747 Phone: Fax: (631) 843-0736 (631) 843-0737 Los Angeles, CA 16255 Ventura Boulevard Suite 950 Encino, CA 91436 Phone: Fax: (818) 784-2800 (818) 784-2810 Newport Beach, CA 4440 Von Karman Avenue Suite 300 Newport Beach, CA 92660 Phone: Fax: (949) 955-6200 (949) 724-9208 New York, NY 275 Seventh Avenue 25th Floor New York, NY 10001 Phone: Fax: (212) 370-9269 (212) 370-1415 San Francisco, CA 185 Berry Street Suite 3500 San Francisco, CA 94107 Phone: Fax: (415) 284-9080 (415) 546-4138 San Jose, CA 400 Race Street Suite 200 San Jose, CA 95126 Phone: Fax: (408) 983-1500 (408) 287-9167 Seattle, WA 11808 Northup Way Suite W311 Bellevue, WA 98005 Phone: Fax: (425) 576-2100 (425) 576-8447 Virginia Beach, VA 2901 Sabre Street Suite 100 Virginia Beach, VA 23452 Phone: Fax: (757) 631-5000 (757) 486-1063 Woodbridge, NJ Woodbridge Place 517 Route One South Suite 5500 Iselin, NJ 08830 Phone: Fax: (732) 404-4800 (732) 283-9105 INV ESTO R REL ATI ON S Investor Relations AvalonBay Communities, Inc. Ballston Tower 671 N. Glebe Road Suite 800 Arlington, VA 22203 Phone: ir@avalonbay.com (703) 329-6300 ext. 4747 Back Cover: Avalon at Mission Bay North, San Francisco, CA WE BSI TE www.avalonbay.com TRA N SFER A GEN T* Computershare P.O. Box 358015 Pittsburgh, PA 15252-8015 Phone: www.bnymellon.com/shareowner/equityaccess (866) 230-0668 IN D EP EN DEN T A UDIT ORS Ernst & Young, LLP 8484 Westpark Drive McLean, VA 22102 Phone: (703) 747-1000 FO RM 1 0- K A copy of the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission is being distributed with this An- nual Report and also may be obtained without charge by contacting Investor Relations. ST OC K L ISTI N GS NYSE–AVB FO RWA RD- LO OKI NG STATEM EN TS This Annual Report contains “forward-looking state- ments” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Please see our discussion titled “Forward-Looking Statements” on page 53 of our Annual Report on Form 10-K for a discussion regarding risks associated with these statements. * Computershare acquired BNY Mellon Shareowner Services effective 12/31/11. I O C S C N A R F N A S , . C N I , I G A R C & Y E N E H I : I N G S E D Ballston Tower 671 N. Glebe Road, Suite 800 Arlington, VA 22203 Tel: (703) 329-6300 www.avalonbay.com 

Continue reading text version or see original annual report in PDF format above