AvalonBay Communities Annual Report 2013

FY2013 Annual Report · AvalonBay Communities

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2013 AnnuAl RepoRt

AvalonBay Communities, Inc. is an
equity ReIt in the business of developing,
redeveloping, acquiring and managing
apartment communities in high barrier-to-
entry markets of the united States.

leAdeRS in Bui ldinG
lAStinG VAlue

AnnuAlized tOtAl SHAReHOldeR RetuRn (1)
Source: SNL Financial, as of December 31, 2013

AvAlonBAy
multIfAmIly SeCtoR We Ighted AveRAge

18.6%

17.1%

14.0%

9.7%

13.8%

11.7%

5 yeARS

10 yeARS

15 yeARS

AvAlonBAy CommunItI eS has a long-term track
record of delivering attractive apartment homes in desirable
locations to customers and outsized, risk-adjusted returns
to shareholders. Building lasting value while maintaining
a leadership edge in property development sets us apart.
For 20 years, we’ve been developing new apartment homes,
reinvesting in our core communities and generating growth
that expands the possibilities for our shareholders, customers
and associates. With equal parts experience and vision,
AvalonBay has established a leadership position rooted in
building value for the long term.

AnnuAlized FFO PeR SHARe GROwtH (2)

AvalonBay
Multifamily Sector Weighted Average

8.9 %

3.9 %

7.0 %

5.3 %

2.7%

2.0 %

5 yeARS

10 yeARS

15 yeARS

Source: SNL Financial, as of December 31, 2013
2013 FFO for AVB and EQR has been adjusted to account for non-routine
costs associated with the Archstone acquisition.

AnnuAlized nAV PeR SHARe GROwtH (3)

AvalonBay
Multifamily Sector Weighted Average

12.5 %

11.3 %

11.1%

6.3 %

9.6 %

4.3 %

5 yeARS

10 yeARS

15 yeARS

Source: Green Street Advisors, Inc., as of December 31, 2013

AvAlonBAy | 2013 Annual Report

Avalon at Wesmont Station, Wood-Ridge, NJ

letter to our shareholders
from our Chairman and Ceo,
tim naughton

lOOkinG BAck...
And AHeAd

totAl ApARtment CommunItIeS

273

125

1993
Ipo AvAlon
pRopeRtIeS

1994
Ipo BAy
CommunItIeS

1998
AvAlonBAy
CommunItIeS

2013
AvAlonBAy
CommunItIeS

Avalon mosaic, Fairfax, VA

2013 At A gl AnCe:

14.7%

ffo peR ShARe gRoWth
(Adjusted for non-routine items)

$1.3 Billion

neW development
StARtS

37.3%

poRtfolIo gRoWth
(Apartment homes)

tHe YeAR in ReView
2013 was a record-setting year for AvalonBay. We delivered
another year of exceptional operating results, completed
the largest acquisition in Company history, expanded
development to an all-time high and raised a record amount
of capital. For the year, adjusted for non-routine items, we
delivered sector-leading FFO per Share growth totaling
nearly 15%. Over the last three years, we have increased FFO
per Share, adjusted for non-routine items, by 57%, well above
the sector average. This growth has been driven by accretive
investment activity and strong portfolio performance, with
same-store NOI up 22% cumulatively over the last three years.

In February, we closed on the $6.5 billion acquisition of the
Archstone portfolio. This was a rare opportunity to acquire
a high-quality portfolio concentrated in our markets. We
increased brand penetration, largely met our geographic
portfolio allocation objectives, and enhanced G&A and
operating synergies at the corporate and property levels
while preserving the strength of our balance sheet, liquidity
and financial flexibility.

We continued to invest aggressively in new development
in 2013, starting 13 new communities representing a
projected Total Capital Cost of $1.3 billion. We completed
the development of 12 communities containing nearly 2,900
apartment homes, on schedule and below budget. These
completed communities represent a total capital investment
of approximately $630 million and are projected to produce
a weighted average initial stabilized yield of approximately
7.3%, generating value creation of approximately $260
million(4) based on current market capitalization rates. By
year end, total development under construction stood at
$2.8 billion. In addition, we acquired new development
rights, mostly in the form of land options, which provide
us with the opportunity to invest an estimated $2 billion
in future development activity and will support sustained
future earnings growth.

We raised a record level of attractively priced capital to fund
this investment activity. For the Archstone acquisition, we
raised $2.1 billion in equity and $250 million of long-term

unsecured debt in late 2012 after announcing the acquisition.
In February 2013, we assumed $2.0 billion of indebtedness
and issued $1.9 billion of additional equity to the seller when
we completed the acquisition. To fund our ongoing business,
including our development activity, we raised another $2
billion of capital, composed of $1.3 billion from the sale of
existing apartment communities at an average cap rate of less
than 5%, and $750 million of long-term unsecured debt at
an average interest rate of less than 4%. After a record year of
raising and deploying capital, our balance sheet and liquidity
remains the strongest in the sector, with net debt-to-EBITDA
running at less than 6x and with more than $1.5 billion
of cash and undrawn capacity under our corporate line of
credit. This financial strength and flexibility, when combined
with our sector-leading development capability, provides
AvalonBay with an unmatched opportunity in our sector
to continue building lasting value through a development-
focused investment strategy in one of the healthiest
apartment cycles in several decades.

lOOkinG BAck
Over the past year, the Company celebrated several
important milestones: the 20th anniversaries of the
Initial Public Offerings (IPOs) of Avalon and Bay, and
the 15th anniversary of the two companies joining forces
to form AvalonBay.

It is remarkable to reflect back on the achievements of
the past 20 years. At the combined IPOs of Avalon and
Bay, the companies owned 32 communities with just over
9,000 apartments and had an Enterprise Value of less than
$1 billion. Today, AvalonBay owns or holds an interest
in 273 apartment communities, containing over 81,000
apartment homes, with an Enterprise Value of approximately
$23 billion. At the time of Avalon’s and Bay’s IPOs, each
company’s portfolio consisted largely of wood-frame,
suburban garden apartments. Today, AvalonBay’s portfolio
is remarkably diverse, containing a mix of garden, mid-rise,
high-rise and mixed-use communities, located in suburban,
urban and transit-oriented submarkets.

AvAlonBAy | 2013 Annual ReportIn 1994, Avalon and Bay were led by entrepreneurial
executives who had a vision of creating an evergreen
apartment company, united by a common purpose and set
of values, which could become a leader in the modern REIT
era. Early on, our founders established a culture emphasizing
excellence, collaboration, continuous improvement and a
relentless focus on hiring and growing talent.

AvalonBay today is largely a fulfillment of
that vision—an apartment company that
has successfully transitioned from one
generation of leaders to another, all while
maintaining our position as a leading
apartment REIT serving the most attractive
customer segments in the best performing
markets. In addition to having best-in-class
capabilities in the areas of development,
construction and operations, we are a fully
integrated company with important strategic
capabilities in capital management, market
research, customer insight and design. Our
platform includes a team of sophisticated
professionals, processes and technologies that
support hiring and retaining the best talent,
delivering exceptional customer experiences,
and operating a large and diverse portfolio.

it’S R emARkABle tO
ReFlect BAck On tHe
AcHieVementS
OF tHe PASt
twentY
YeARS

It is with tremendous pride that we reflect on all we have
accomplished as a public company. While our strategy
continues to evolve with the changing landscape, in the end,
our results speak for themselves. Over the last 20 years, we’ve
consistently delivered extraordinary returns to shareholders.
We’ve provided a workplace where our associates are highly
engaged and motivated, and we’ve built communities that our
residents are proud to call home.

lOOkinG AHeAd
We are just as optimistic about AvalonBay’s prospects in
2014 and beyond, with healthy fundamentals and a strong
competitive position providing a stage for continued
outperformance.

U.S. economic conditions appear stronger than at any time
in the last five years. Fiscal headwinds are fading and U.S.
corporations are reporting record profits. Lending institutions
are liquid and well-capitalized. U.S. household debt burdens
are lower than they have been in nearly 30 years, and
business sentiment and consumer confidence are improving.

These favorable conditions are projected to support apartment
market fundamentals through stronger job and income growth
in our markets, which are forecasted to grow by 1.6% and 5%
in 2014, respectively, and accelerating household formation,
forecasted to increase by 1.4 million this year and by 9 million
by the end of the decade (NABE, Moody’s).

Rental demand is expected to be further bolstered by
favorable demographics. Our prime renter cohort, those
aged 25–34, is projected to increase by 1.2 million in the next
two years and by nearly 4 million by the end of the decade.
Apartment fundamentals should also benefit from the for-
sale housing industry’s challenge in ramping up production
to meet household growth over the next few
years. Housing starts contracted significantly
in the downturn, averaging 50% of the post-
war average, as home builders substantially
reduced investments in land, entitlements
and infrastructure, and production capacity
has not returned to pre-recession levels.
Today, most of the excess housing inventory
from the mid/late 2000s has been absorbed.
With 930,000 total housing starts in 2013
and 1.5 million households expected to
be formed, on average, in 2014 and 2015,
housing production would have to increase
by 60% to meet household demand (BOC,
NABE, Moody’s).

For us, improving fundamentals should
support solid cash flow growth from our
stabilized portfolio and provide an attractive
environment for our 5,000 new apartment home deliveries in
2014. Overall, we remain extremely well positioned given our
coastal market focus, attractive pipeline of new opportunities
and robust organizational capabilities that allow us to create
value by building in strong market conditions. Given this
outlook, in January of this year we announced a dividend
increase of over 8%, continuing a 20-year tradition of strong
dividend growth that has averaged over 5% on an annual
compounded basis.

2014 is set to be another exceptional year for AvalonBay as
we deliver a record amount of new product to the market
and continue a tradition of Building Strong. I am extremely
proud of our accomplishments in 2013 and want to thank
our shareholders for their support, our associates for their
dedication and our residents for choosing AvalonBay.

Finally, I wish to thank our Chief Financial Officer, Tom
Sargeant, who will be retiring at the end of May 2014. Tom
has worked with AvalonBay and its predecessors for 28 years,
including the last 19 years as CFO. Tom is one of the most
highly regarded CFOs in our industry and has played an
influential leadership role throughout AvalonBay’s history.
We are grateful for Tom’s contribution and wish him the best
in his retirement.

tImothy J. nAughton
Chairman and CEO

Avalon first and m, Washington, DC

AvAlonBAy | 2013 Annual Report
tHRiVinG OVeR time

2013

AvalonBay closes
Archstone acquisition,
adding 60 communities
and 20,000 apartment
homes to the portfolio

AnnuAlized tOtAl
SHAReHOldeR RetuRn

thR ough de CemBeR 31, 2013

AvalonBay since merger
(06/04/98)

Avalon Properties IPO investor
(11/10/93)

Bay Communities IPO investor
(03/10/94)

Source: SNL Financial

1994

1997

Bay Communities
IPO 10 communities,
2,400 apartment
homes, 180 associates

1993

Avalon Properties
IPO 22 communities,
7,000 apartment
homes, 470 associates

1
4
9

1
0
6

1
0
2

1
0
5

1
0
0

Avalon Properties
completes the
development of Avalon
Cove (Jersey City,
NJ), its first mid-rise
development

2
0
5

1
1
3

1
0
5

13.0%

13.3%

15.0%

2
9
2

1
1
8

1
0
8

5
7
3

1
4
1

1
3
4

4
7
6

1
3
2

1
2
3

4
4
9

1
2
5

1
1
6

1
5
0
6

2
5
6

1
0
6
4

2
3
2

9
8
9

8
8
7

9
0
0

2
1
3

1998

1999

2001

2005

2007

2008

2011

AvalonBay introduces the AVA and eaves
apartment brands

2012

Timothy Naughton
is named CEO
of AvalonBay

AvalonBay is formed:
126 communities and
37,000 apartment
homes establishing
the first bicoastal
multifamily REIT

AvalonBay completes
the development of
Avalon Towers by the
Bay (San Francisco,
CA), its first West
Coast high-rise
development

Bryce Blair is named
Chairman and CEO
of AvalonBay

AvalonBay completes
the development of
Avalon Chrystie Place
(New York, NY),
its first Manhattan
mixed-use development
for Total Capital Costs
of $150 million

AvalonBay becomes
the 12th REIT to join
the S&P 500

AvalonBay commences
operations at its
Customer Care Center
(Virginia Beach, VA)

6
3
7

1
5
3

1
5
1

6
4
0

1
6
7

1
5
6

6
3
3

1
6
7

1
5
2

6
6
2

1
6
7

1
5
3

6
9
8

1
7
0

1
5
5

7
3
9

1
8
6

1
5
9

8
8
3

2
1
3

1
7
3

8
2
4

2
0
3

1
6
7

1
5
8

1
6
1

1
5
0

1
4
4

1
3
8

AvalonBay total revenue ($millions)
AvalonBay dividend (indexed to 100 in 1994)
Multifamily Sector Weighted Average dividend (indexed to 100 in 1994)

Source: SNL Financial

Multifamily Sector Weighted Average includes AEC, BRE, CPT, EQR, ESS, MAA, PPS, UDR.

Amounts prior to merger represent the sum of Avalon Properties and Bay Communities.

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

deVelOPinG FOR tHe
lOnG teRm

ouR deCentRAlI zed, fully IntegRAted
development And Con StR uCtIon plAtfoRm
has been integral to our success and a leading generator of
value for shareholders since our founding as a public company.
It is unmatched in the industry and hard to replicate.

We understand what it takes to bring sites through the
entitlements process while minimizing risk along the
way. Development is a local business, requiring long-term
commitment and focus to consistently generate value across
multiple business cycles. This is why we maintain 11 regional
offices—four in the New York metro area alone—each
fully staffed with a team of professionals in development,
construction and residential services. We choose to act as
our own general contractor in most cases, allowing us to
further control costs and quality while ensuring that the
communities we develop are built to last.

In 2014, we expect to deliver over $1 billion of new
communities, with more to come in the years ahead. We
expect these new developments will be put in place at a cost
basis that is approximately 8% below the market value of our
current 17-year-old stabilized portfolio and command rents
that are 20% higher.

$335

$308

deVelOPinG VAlue (5)
(dollars in thousands)

Current communities—
fair market value per
Green Street Advisors, Inc.
Under construction—
projected cost basis per home

Source: Company Reports, as of December 31, 2013

mARket Rent
PeR HOme

Current communities
Projected under construction

$2,445

$2,040

Source: Company Reports, as of December 31, 2013

AllOcAtinG cAPitAl
FOR GROwtH

AnnuAlized diVidend GROwtH
Source: SNL Financial, as of December 31, 2013

AvAlonBAy
multIfAmIly SeCtoR We Ighted AveRAge

5.4%

4.3%

3.0%

0.8%

-0.6%

-2.5%

5 yeARS

10 yeARS

15 yeARS

duRIng ouR 20-yeAR h IStoRy, our strategy of
augmenting growth through development has been supported
by a solid financial foundation. We’ve maintained low
leverage and healthy debt service coverage and have
produced sector-leading dividend growth.

Looking ahead, we plan to preserve our financial foundation
of balance-sheet strength and financial flexibility through
a capital management strategy that emphasizes matching
long-term investments with long-term capital. This strategy
focuses on accessing the most cost-effective mix of capital
from a variety of sources.

OuR PRActice OF mAtcH-FundinG
lOckS in AttRActiVe
inVeStment mARGinS
On new deVelOPment

deBt-tO-mARket cAPitAlizAtiOn RAtiO

Equity
Fixed-rate debt
Floating-rate debt

72%

23%

AvAlonBAy | 2013 Annual Report

Avalon Bloomingdale, Bloomingdale, NJ

Source: Company Reports, as of December 31, 2013

VAluinG OuR cultuRe
And cAPABilitieS

cuStOmeR SAtiSFActiOn
Source: Company Reports, as of December 13, 2013

emPlOYee enGAGement†
Source: Company Reports, as of December 13, 2013

AvAlonBAy
InduStRy Index

AvAlonBAy
gloBAl Index ‡

83%

76%

78%

73%

† Engagement measures the degree to which an associate is actively engaged in the organization.
‡ Survey results from Kenexa, comparing AVB to its global database of more than 700 companies.

OuR cultuRe iS GROunded in OuR
tHRee cORe VAlueS:

• A commitment to integrity
• A spirit of caring
• A focus on continuous improvement

ouR deCentRAlI zed StR uCtuRe, so critical
to our development success, depends upon a culture
of collaboration and responsibility to balance the
autonomy of our regional offices with the centralized
support and oversight provided by corporate headquarters
in Arlington, VA.

Regional offices are able to improve execution by drawing
on our centralized strategic capabilities in market research,
customer insight, design and capital management. They
are also able to apply insights gleaned from across our
portfolio to our multiple growth platforms in development,
redevelopment, acquisitions and operations.

OuR cAPABilitY-led StRAteGY
sets us apart and positions us well to continue our
20-year track record of delivering outsized long-term returns
to shareholders.

t
R C h

A
m
R e

CA
mAnA

pIt

R
e
m
o
t
S
u

t
h
g

S
n

cAPABilitieS

p
e
R
A
t
I
o
n
S

SIgn

e n t &
C tIo n

d e v e l o
C o n S t

AvAlonBAy | 2013 Annual Report

AvalonBay Associates, Arlington, VA

FinAnciAlS

AvAlonBAy | 2013 Annual Report

AvA Ballard, Seattle, WA

tABle OF cOntentS

form 10-k page

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 Disclosures
About Market Risk

Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure

Consolidated Financial Statements

F-3

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 or FFO,
Net Operating Income or NOI, 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.

The Multifamily Sector Weighted Average is a weighted
average based on Total Market Capitalization per SNL
Financial. The weighted average for Total Shareholder
Return, FFO per Share Growth and Long-Term Dividend
Growth includes AEC, AIV, BRE, CPT, EQR, ESS, HME,
MAA, PPS and UDR. The weighted average for NAV per
Share Growth includes all multifamily companies under
Green Street Advisors, Inc.’s coverage, for which data is
available during each of the time periods presented and
includes AEC, AIV, BRE, CPT, EQR, ESS, PPS and UDR.

Net debt-to-EBITDA is calculated by the Company as total
debt, less cash and cash in escrow, divided by annualized
fourth quarter EBITDA from continuing operations.

cAlculAtiOn OF leVeRAGe
(as of December 31, 2013, dollars in thousands)

net deBt-tO-eBitdA
(as of December 31, 2013, dollars in thousands)

Total debt

Cash and cash in escrow

Net Debt

Net income attributable to common stockholders

Interest expense, net

Depreciation expense

Depreciation expense (discontinued operations)

EBITDA

EBITDA from continuing operations

EBITDA from discontinued operations

EBITDA from continuing operations, annualized

Net debt-to-EBITDA

$6,029,998

380,022

$5,649,976

252,212

44,630

104,806

345

$401,993

237,767

164,226

951,068

5.9

Total Market Capitalization, or Enterprise Value, 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 fixed and variable 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, 2013, is
as follows:

Common stock

Preferred stock

Operating partnership units

Total debt

Total market capitalization

Debt as a % of capitalization

$15,300,936

—

887

6,029,998

$21,331,821

28%

The Stock Performance Graph provides a comparison,
from December 2008 through December 2013, of the
cumulative total shareholder return (assuming reinvestment
of dividends) among the Company, the S&P 500 Index and
a peer group index (the FTSE NAREIT Apartment REIT
Index) composed of 14 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 SNL Financial.

StOck PeRFORmAnce

300

225

150

2008

2009

2010

2011

2012

2013

AvalonBay Communities, Inc.

FTSE NAREIT Apartment REIT Index

S&P 500

Period Ending

AvalonBay Communities, Inc.

FTSE NAREIT Apartment REIT Index

S&P 500

12-31-08

12-31-09

12-31-10

12-31-11

12-31-12

12-31-13

100

144

130

126

204

192

146

244

221

149

261

236

172

235

221

228

AvAlonBAy | 2013 Annual Report

FFO RecOnciliAtiOn tO net incOme
(dollars in thousands, except per share data)

For the Year Ended

2013

2012

2011

2010

2008

2003

1998

Net income

$353,141

$423,869

$441,622

$175,331

$411,487

$262,503

$68,560

Dividends attributable to preferred stock

—

(10,454)

(10,744)

—

Depreciation – real estate assets,
including discontinued operations
and joint venture adjustments

582,325

265,627

256,986

237,041

203,082

129,207

78,388

Distributions to noncontrolling interests,
including discontinued operations

216

1,263

1,174

Cumulative effect of change
in accounting principle

Gain on acquisition of
unconsolidated entities

Gain on sale of
unconsolidated entities

Gain on sale of
operating communities

—

(14,194)

—

(14,453)

(7,972)

(3,063)

—

(3,483)

—

(278,231)

(146,311)

(281,090)

(74,074)

(284,901)

(159,756)

(3,970)

Funds from operations attributable
to common stockholders

$642,814

$521,047

$414,482

$338,353

$315,947

$222,473

$144,152

Weighted average common shares
outstanding – diluted

127,265,903

98,025,152

90,777,462

84,632,869

77,578,852

70,203,467

50,146,909

EPS – diluted

$2.78

$4.32

$4.87

$2.07

$5.17

$3.60

$1.76

FFO per common share – diluted

$5.05

$5.32

$4.57

$4.00

$4.07

$3.17

$2.86

nOn-ROutine FFO itemS
(dollars in thousands, except per share data)

Full Year

FFO per Share, actual

Non-Routine Items

Loss on interest rate contract

Archstone acquisition and joint venture costs

Compensation plan update and severance charges

Land gains and joint venture activity

Debt prepayment penalty and deferred finance charge write-off

Asset reductions

Legal settlement and other

Severe weather costs

2013

$5.05

2012

2011

$5.32

$4.57

2010

$4.00

0.40

0.63

0.03

—

0.12

—

0.09

0.01

—

0.03

—

(0.06)

(0.15)

0.03

0.01

—

0.06

0.15

—

(0.03)

$(0.01)

—

$(0.02)

—

$0.01

$3.98

FFO per Share, as adjusted for non-routine items

$6.23

$5.43

$4.64

nOteS
1. totAl ShAR eholdeR 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. ffo pe R ShAR e gRoWth: The compound annual
growth rate of Funds from Operations (FFO) per Share
during the periods indicated. FFO per Share Growth for
each year within the time frame presented may vary.

3. nAv peR ShAR e 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.

4. vAlue CReAtIon: Determined by calculating the
fair market value, based on the Company’s standard
underwriting assumptions at completion, less the Total
Capital Cost.

5. vAlue pe R home foR Cu RRent CommunItI eS:
Derived from Company Net Asset Value from Green
Street Advisors, Inc. For Under Construction the Value
per Home is the projected cost basis.

AvAlonBAy | 2013 Annual Reportnew york, ny
275 Seventh Avenue
25th Floor
New York, NY 10001
Phone: 212.370.9269
Fax: 212.370.1415

San francisco, CA
455 Market Street
Suite 1650
San Francisco, CA 94105
Phone: 415.284.9080
Fax: 415.546.4138

San Jose, CA
400 Race Street
Suite 200
San Jose, CA 95126
Phone: 408.983.1500
Fax: 408.287.9167

Seattle, WA
600 108th Avenue NE
Suite 840
Bellevue, WA 98004
Phone: 425.468.9440
Fax: 425.455.0135

virginia Beach, vA
2901 Sabre Street
Suite 100
Virginia Beach, VA 23452
Phone: 757.631.5000
Fax: 757.486.1063

Woodbridge, nJ
Woodbridge Place
517 Route One South
Suite 5500
Iselin, NJ 08830
Phone: 732.404.4800
Fax: 732.283.9101

HeAdquARteRS

Arlington, vA
Ballston Tower
671 N. Glebe Road
Suite 800
Arlington, VA 22203
Phone: 703.329.6300
Fax: 703.329.9130

ReGiOnAl
OFFiceS

Boston, mA
51 Sleeper Street
Suite 750
Boston, MA 02210
Phone: 617.654.9500
Fax: 617.426.1610

fairfield, Ct
1499 Post Road
Second Floor
Fairfield, CT 06824
Phone: 203.319.4900
Fax: 203.319.4944

long Island, ny
58 S. Service Road
Suite 303
Melville, NY 11747
Phone: 631.843.0736
Fax: 631.843.0737

los Angeles, CA
16255 Ventura Boulevard
Suite 950
Encino, CA 91436
Phone: 818.784.2800
Fax: 818.874.2810

newport Beach, CA
4440 Von Karman Avenue
Suite 300
Newport Beach, CA 92660
Phone: 949.955.6200
Fax: 949.724.9208

inVeStOR RelAtiOnS

Investor Relations
AvalonBay Communities, Inc.
Ballston Tower
671 N. Glebe Road
Suite 800
Arlington, VA 22203
Phone: 703.329.6300
ir@avalonbay.com

Website
www.avalonbay.com

transfer Agent
Computershare
Regular Mail
P.O. Box 43006
Providence, RI 02940
Overnight Delivery
250 Royall Street
Canton, MA 02021
Phone: 866.230.0668

form 10-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 Annual Report and also
may be obtained without charge
by contacting Investor Relations.

Stock listing
NYSE-AVB

forward-looking Statements
This Annual Report contains
“forward-looking statements”
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 67 of our Annual Report
on Form 10-K for a discussion
regarding risks associated with
these statements.

BOARd OF diRectORS

OFFiceRS

timothy J. naughton (4)
Chairman of the Board,
CEO and President
AvalonBay Communities, Inc.

glyn f. Aeppel (2, 4)
CEO and President
Glencove Capital
A hotel investment and
advisory company

Alan B. Buckelew (2, 4)
Chief Operating Officer
Carnival Corporation & plc
A global cruise line

Bruce A. Choate (4, 5)
CEO and President
Watson Land Company
A real estate investment trust

John J. healy Jr. (2, 5)
Private Investor

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 (3, 4)
CEO and President
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

timothy J. naughton
Chairman of the Board,
CEO and President

thomas J. Sargeant
Chief Financial Officer

leo S. horey III
Chief Administrative Officer

matthew h. Birenbaum
Executive Vice President
Corporate Strategy

Sean J. Breslin
Executive Vice President
Investments and Asset
Management

William m. mclaughlin
Executive Vice President
Development & Construction –
Northeast

kevin p. o’Shea
Executive Vice President
Capital Markets

edward m. Schulman
Executive Vice President
General Counsel & Secretary

Stephen W. Wilson
Executive Vice President
Development & Construction –
West Coast/Mid-Atlantic

david W. Bellman
Senior Vice President
Construction – Northeast

Sean m. Clark
Senior Vice President
Redevelopment & Asset
Management

kurt d. Conway
Senior Vice President
Brand Strategy & Marketing

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 – Boston

Brian e. fritz
Senior Vice President
Development – Pacific Northwest

nathan k. hong
Senior Vice President
Development – Northern California

Suzanne Jakstavich
Senior Vice President
Human Resources

Ronald S. ladell
Senior Vice President
Development – New Jersey

Joanne m. lockridge
Senior Vice President
Finance

J. Richard morris
Senior Vice President
Construction – West Coast/
Mid-Atlantic

Christopher l. payne
Senior Vice President
Development – Southern California

martin piazzola
Senior Vice President
Development – New York City

michael J. Roberts
Senior Vice President
Development – Boston

keri A. Shea
Senior Vice President
Finance & Treasurer

matthew t. Smith
Senior Vice President
Property Operations – East Coast

mona R. Stahling
Senior Vice President
Operational Services & Support

matthew B. Whalen
Senior Vice President
Development – Connecticut, Long
Island & West Chester

Alan Adamson
Vice President
Associate General Counsel

david Alagno
Vice President
Human Resources

danyell d. Alders
Vice President
Property Operations – Southern
California

lisa B. Bongardt
Vice President
Property Operations – Mid-Atlantic

Jonathan R. Busch-vogel
Vice President
Development – New York

Randall Caraway
Vice President
Property Operations – Southern
California

duane W. Carlson
Vice President
Construction – Northern California
& Pacific Northwest

Jong m. Chung
Vice President
Design

heather J. duffy
Vice President
Property Operations – Northern
California

linda l. early
Vice President
Property Operations – New York

Stephen m. fabian
Vice President
Customer Care Center

mitchell forlenza
Vice President
Construction – Connecticut, New
Jersey & Westchester

patrick gniadek
Vice President
Investments – East Coast

Jim l. graves
Vice President
Information Services

Chris B. helsabeck
Vice President
Development – Mid-Atlantic

kurt R. hesser
Vice President
Finance

karen A. hollinger
Vice President
Corporate Initiatives

david A. hutchins
Vice President
Internal Audit

mark d. Janda
Vice President
Development – Southern California

Scott R. kinter
Vice President
Construction – Northeast

david e. lewis
Vice President
Engineering

Sarah k. mathewson
Vice President
Property Operations –
Massachusetts, Rhode Island,
Connecticut & New Jersey

Robert S. Salkovitz
Vice President
Construction – Southern California

Brian p. Schley
Vice President
Risk Management

elizabeth A. Smith
Vice President
Redevelopment & Asset
Management – East Coast

Steven Spiro
Vice President
Construction – New York

Craig f. thomas
Vice President
Market Research

Jackie todesco
Vice President
Redevelopment & Asset
Management – West Coast

Alaine Walsh
Vice President
Corporate & Investment Services

timothy m. Walters
Vice President
Investments – West Coast

Catherine t. White
Vice President
Associate General Counsel

Sean t. Willson
Vice President
Corporate Controller

Front Cover: Avalon mosaic, Fairfax, VA

AvAlonBAy | 2013 Annual Report24