AvalonBay Communities, Inc. Provides Q2 2026 Results, Increases Same Store Outlook, and Suspends EPS, FFO, and Core FFO Outlook Due to Proposed Merger

ARLINGTON, Va.--(BUSINESS WIRE)--AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported Earnings per Share – diluted (“EPS”), Funds from Operations attributable to common stockholders - diluted (“FFO”) per share and Core FFO per share (as defined in this release) for the three and six months ended June 30, 2026 and 2025 as detailed below.

Commenting on the Company's results, Benjamin W. Schall, President and CEO of the Company, said, "Our second quarter was strong, exceeding expectations, and the results reflect the enduring qualities of our business — a high-quality portfolio in supply-constrained markets, a proven operating platform, and teams that execute with consistency and discipline.

"We are proud of AvalonBay’s over 30-year history as one of the leading public multi-family operators and developers. The proposed combination with Equity Residential now provides the opportunity to draw on the foundational strengths of two exceptional organizations to create the premier company in rental housing in the country. The scale, the talent, the portfolio, the operating capabilities and the investment opportunities all come together in ways that neither company could achieve alone. We’re extremely excited for our future and look forward to sharing more later this year."

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2026 to its results for the prior year period:

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2026 to its April 2026 outlook:

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the six months ended June 30, 2026 to its results for the prior year period:

Same Store Operating Results for the Three Months Ended June 30, 2026 Compared to the Prior Year Period

Same Store Residential revenue increased $10,958,000, or 1.6%, to $709,586,000. Same Store Residential operating expenses increased $6,134,000, or 2.9%, to $221,034,000 and Same Store Residential NOI increased $4,824,000, or 1.0%, to $488,552,000.

Commenting on the Company's operating results, Sean J. Breslin, Chief Operating Officer, said, "A healthier demand environment, easing new supply, and disciplined execution by our teams delivered strong rent growth and lower operating expenses in the first half of the year, enabling us to increase Same Store NOI guidance for the full year. These factors set a strong foundation as we bring two organizations together and position the combined company to produce healthy results in the quarters ahead."

Same Store Operating Results for the Six Months Ended June 30, 2026 Compared to the Prior Year Period

Same Store Residential revenue increased $21,953,000, or 1.6%, to $1,412,006,000. Same Store Residential operating expenses increased $16,053,000, or 3.7%, to $444,551,000 and Same Store Residential NOI increased $5,900,000, or 0.6%, to $967,455,000.

Development Activity

During the three months ended June 30, 2026, the Company completed the development of Avalon Parsippany, located in Parsippany, NJ. Avalon Parsippany contains 410 apartment homes and was constructed for a Total Capital Cost of $145,000,000.

During the three months ended June 30, 2026, the Company started the construction of three apartment communities:

• Avalon Townhome Collection Central Park, located in Denver, CO;
• Kanso Plymouth, located in Plymouth, MA; and
• Avalon Dulles Innovation, located in Herndon, VA.

These communities are expected to contain an aggregate of 801 apartment homes and 5,000 square feet of commercial space for an estimated Total Capital Cost of $283,000,000. Avalon Townhome Collection Central Park is being developed through the Company's Developer Funding Program ("DFP").

During the six months ended June 30, 2026, the Company:

• completed the development of two wholly-owned communities containing an aggregate of 755 apartment homes for a Total Capital Cost of $247,000,000; and
• started the construction of five apartment communities. These communities are expected to contain an aggregate of 1,247 apartment homes. Estimated Total Capital Cost for these communities is $471,000,000.

At June 30, 2026, the Company had 27 wholly-owned Development communities under construction that are expected to contain 9,064 apartment homes and 74,000 square feet of commercial space. Estimated Total Capital Cost for these communities is $3,526,000,000.

Disposition Activity

During the six months ended June 30, 2026, the Company sold three wholly-owned communities containing an aggregate of 884 apartment homes. These communities were sold for $340,750,000, resulting in a gain in accordance with generally accepted accounting principles in the United States ("GAAP") of $179,688,000 and an Economic Gain of $35,836,000.

In July 2026, the Company sold eaves Tysons Corner, a wholly-owned community with 217 apartment homes, located in Vienna, VA for $68,050,000.

Structured Investment Program ("SIP") Activity

As previously disclosed, during the three months ended June 30, 2026, the Company entered into one new mezzanine loan commitment, agreeing to provide an investment of up to $15,000,000.

During the six months ended June 30, 2026, the Company received full repayment of $17,580,000 for one mezzanine loan, which includes principal and contractual accrued interest in accordance with the terms of the agreement.

Both the repayment and new commitment were for multifamily development projects in Metro NY/NJ.

Liquidity and Capital Markets

At June 30, 2026, the Company had $80,682,000 in unrestricted cash and cash equivalents.

Debt Activity

During the three months ended June 30, 2026, the Company repaid $475,000,000 principal amount of its 2.95% coupon unsecured notes at par upon maturity.

As of June 30, 2026, the Company did not have any borrowings outstanding under its Credit Facility and had outstanding borrowings of $915,786,000 under its unsecured commercial paper program.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the second quarter of 2026 was 4.6 times and Unencumbered NOI (as defined in this release) for the six months ended June 30, 2026 was 95%.

Equity Activity

During the three months ended June 30, 2026, the Company settled outstanding equity forward contracts entered into during 2024, issuing 2,760,000 shares of common stock at $220.08 per share for proceeds of $607,433,000.

In July 2026, the Company settled the remaining outstanding equity forward contracts, issuing 920,000 shares of common stock at $219.52 per share for proceeds of $201,958,000.

There were no repurchases of common stock during the three months ended June 30, 2026. During the six months ended June 30, 2026, the Company repurchased 1,130,336 shares of common stock at an average price of $175.59 per share, including fees, for a total of $198,480,000. There have been no repurchases subsequent to June 30, 2026.

Proposed Merger with Equity Residential

On May 21, 2026, Equity Residential (NYSE: EQR) and the Company announced a definitive agreement to combine in an all-stock merger of equals, creating one of the country's leading real estate companies with the differentiated scale, capabilities, and balance sheet strength to expand margins, accelerate growth, and redefine leadership in rental housing. The combined company will have a pro forma equity market capitalization of approximately $53 billion and a total enterprise value of approximately $71 billion, with more than 180,000 rental apartments (data as of July 17, 2026).

On June 8, 2026, the combined company announced the executive leadership team, led by Benjamin W. Schall, who will serve as the President and CEO of the combined company.

Under the terms of the merger agreement, the combined company's board will consist of 14 trustees, including seven members of the current Equity Residential board and seven members of the current AvalonBay board. The following members of the Equity Residential board will serve on the combined company board as of the closing of the merger: David J. Neithercut, Angela M. Aman, Chris Carr, Mary Kay Haben, Ann C. Hoff, Nina P. Jones and Stephen E. Sterrett. The following members of the AvalonBay board will serve on the combined company board as of the closing of the merger: Timothy J. Naughton, Benjamin W. Schall, Terry S. Brown, Conor C. Flynn, Christopher B. Howard, Charles E. Mueller Jr., and Susan Swanezy. Pursuant to the merger agreement, Mr. Sterrett will be appointed to serve as the Chairman of the combined company board.

On August 12, 2026, the Company will hold its special meeting of stockholders and Equity Residential will hold its special meeting of shareholders related to the proposed merger. For further information, please refer to the definitive joint proxy statement/prospectus filed by each of the Company and Equity Residential with the Securities and Exchange Commission (the "SEC") on July 13, 2026.

Same Store Full Year 2026 Financial Outlook

For its Same Store portfolio full year 2026 financial outlook, the Company expects the following:

Other Matters

In light of the Company’s proposed merger of equals with Equity Residential, the Company will not hold a conference call to discuss its second quarter 2026 financial results.

The Company produces Earnings Release Attachments (the "Attachments") that provide more detailed information regarding financial information and operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company's website at https://investors.avalonbay.com. To receive future press releases via e-mail, please submit a request through https://investors.avalonbay.com/news-events/email-alerts.

In addition to the Attachments, the Company is providing an investor presentation in connection with this release that will be available on the Company's website at https://investors.avalonbay.com after the market close on July 22, 2026.

About AvalonBay Communities, Inc.

AvalonBay Communities, Inc., a member of the S&P 500, is an equity REIT that develops, redevelops, acquires and manages apartment communities in leading metropolitan areas in Boston, Massachusetts, the New York/New Jersey Metro area, the Mid-Atlantic, Seattle, Washington, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. As of June 30, 2026, the Company owned or held a direct or indirect ownership interest in 322 apartment communities containing 99,072 apartment homes in 11 states and the District of Columbia, of which 27 communities were under development and one community was under redevelopment. More information may be found on the Company’s website at https://www.avalonbay.com. For additional information, please contact Matthew Grover, Senior Director of Investor Relations, at 703-317-4524.

Forward-Looking Statements

This release, including its Attachments, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company's forward-looking statements generally use the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “project,” “plan,” “may,” “shall,” “will,” “pursue,” “outlook” and other similar expressions that indicate future events and trends and do not report historical matters. These statements, among other things, address or reflect the Company’s intent, belief, forecasts, assumptions or expectations with respect to: development, redevelopment, acquisition or disposition of communities; the timing and cost of completion of communities under development or redevelopment; the timing of lease-up, occupancy and stabilization of communities; pursuit of land for future development; the anticipated operating performance of communities; cost, yield, revenue, NOI and earnings estimates; the impact of landlord-tenant laws and rent regulations, including rent caps; the Company’s expansion into new regions; declaration or payment of dividends; joint venture activities; the Company’s policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters; the Company’s qualification as a REIT under the Internal Revenue Code of 1986, as amended; the real estate markets in regions where the Company operates and in general; the availability of debt and equity financing; interest rates, inflation, tariffs and other economic conditions and their potential impacts; trends affecting the Company’s financial condition or results of operations; legal and regulatory changes; the impact of legal proceedings; the proposed transaction between the Company and Equity Residential; the expected timing and completion of the proposed transaction; and the anticipated benefits of the proposed transaction.

The Company cannot assure the future results or outcome of the matters described in these statements; rather these statements reflect the Company’s current expectations of the outcomes of the matters discussed. The Company does not undertake a duty to update these forward-looking statements, and therefore they may not represent the Company’s estimates and assumptions after the date of this release. You should not rely on forward-looking statements because they involve risks and uncertainties and other factors, some of which are beyond the Company’s control. These risks, uncertainties and other factors may cause the Company’s actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by these forward-looking statements. You should carefully review the discussion under Part I, Item 1A. “Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2025 and Part II, Item 1A. “Risk Factors” in subsequent quarterly reports on Form 10-Q, as well as the risks described in the Definitive Joint Proxy Statement/Prospectus (as defined below) that has been filed with the SEC in connection with the proposed transaction and is available from the sources indicated below, for further discussion of risks associated with forward-looking statements.

Some of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: the Company may fail to secure development opportunities due to an inability to reach agreements with third parties to obtain land at attractive prices or to obtain desired zoning and other local approvals; the Company may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; construction costs of a community may exceed original estimates; the Company may be unable to complete planned dispositions, or may complete such transactions on different timing or terms than expected; the Company may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in expected rental revenues; occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond the Company’s control; the Company’s cash flows from operations and access to cost-effective capital may be insufficient for the development of the Company’s pipeline, which could limit the Company’s pursuit of opportunities; an outbreak of disease or other public health event may affect the multifamily industry and general economy; the Company’s cash flows may be insufficient to meet required payments of principal and interest, and the Company may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness; the Company may be unsuccessful in its management of joint ventures and the REIT vehicles that are used with certain joint ventures; the Company may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change; new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting the Company’s ability to increase rents, charge non-rent fees or evict tenants, may impact its revenue or increase costs; the Company’s expectations, estimates and assumptions as of the date of this filing regarding legal proceedings may change; the Company’s assumptions and expectations in its financial outlook may prove to be too optimistic; the Company may choose to pay dividends in its stock instead of cash, which may result in stockholders having to pay taxes with respect to such dividends in excess of the cash received, if any; investments made under the SIP may not be repaid as expected or the development may not be completed on schedule, which could require the Company to engage in litigation, foreclosure actions, and/or first party project completion to recover its investment, which may not be recovered in full or at all in such event; the Company may be unable to complete the proposed transaction with Equity Residential on the proposed terms or on the anticipated timeline, or at all, including as a result of the failure to obtain the required respective stockholder or shareholder, as applicable, approval; the Company may not realize the anticipated benefits of the proposed transaction due to delay in completing the proposed transaction; the Company may face significant transaction costs and/or unknown or inestimable liabilities relating to the proposed transaction; the Company may face disruptions resulting from the proposed transaction, including the diversion of management’s attention from ongoing business operations, which may harm the Company’s business during the pendency of the proposed transaction or otherwise; the Company may face certain restrictions during the pendency of the business combination that may impact its ability to pursue certain business opportunities or strategic transactions; the possibility that the business combination may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the occurrence of certain events that may result in the termination of the merger agreement; and the Company’s financial performance may be affected by potential business uncertainty during the pendency of the business combination.

No Offer or Solicitation

This press release is for informational purposes only and is not intended to, and shall not, constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Important Additional Information and Where to Find It

In connection with the proposed transaction between the Company and Equity Residential, Equity Residential has filed with the SEC a registration statement on Form S-4 (File No. 333-297128) (the “Registration Statement”) which includes the joint proxy statement of the Company and Equity Residential that also constitutes a prospectus of Equity Residential. The Registration Statement was declared effective on July 13, 2026, and each of the Company and Equity Residential commenced mailing of the definitive joint proxy statement of the Company and Equity Residential that also constitutes a prospectus of Equity Residential (the “Definitive Joint Proxy Statement/Prospectus”) to their respective stockholders or shareholders, as applicable, on or about July 13, 2026.

For additional information, please contact Matthew Grover, Senior Director of Investor Relations, at 703-317-4524.