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Here are 1-3 brief analogies to describe AvalonBay Communities (AVB):

• The Marriott or Hilton of apartment communities: AvalonBay develops, owns, and manages a large portfolio of apartment buildings across prime metropolitan areas, similar to how major hotel chains operate.
• Like Simon Property Group, but for apartment buildings instead of shopping malls: AvalonBay is a large-scale equity REIT that develops, acquires, and manages residential properties, akin to how Simon Property Group does for retail properties.

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• Apartment Rentals: Providing residential living spaces to tenants across a portfolio of apartment communities.
• Apartment Community Development: Planning, constructing, and bringing new apartment communities to market.
• Apartment Community Redevelopment: Renovating and upgrading existing apartment communities to enhance their value and appeal.
• Apartment Community Acquisition: Purchasing existing apartment properties to expand the company's real estate portfolio.
• Property Management: Overseeing the daily operations, maintenance, and tenant services for its apartment communities.

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AvalonBay Communities (AVB) sells primarily to individuals rather than to other companies. Its major customers are the tenants who lease apartment homes in its communities. Based on the company's focus on leading metropolitan areas, its customer categories include:

1. Urban and Suburban Professionals and Young Couples: Individuals and couples who prioritize location, modern amenities, and convenient access to employment centers, entertainment, and transportation in metropolitan areas.
2. Families: Households seeking multi-bedroom units, often in suburban communities, who value good school districts, community amenities, and a family-friendly environment.
3. Empty Nesters and Downsizers: Older adults seeking a low-maintenance lifestyle, often attracted to amenity-rich properties, walkable neighborhoods, and a sense of community, frequently choosing to downsize from single-family homes.

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Benjamin W. Schall, Chief Executive Officer and President

Mr. Schall joined AvalonBay Communities as President and a director in January 2021, and became Chief Executive Officer effective January 3, 2022. Before joining AvalonBay, Mr. Schall served as the Chief Executive Officer, President, and a trustee of Seritage Growth Properties, a publicly traded REIT. Earlier in his career, he was the Chief Operating Officer of Rouse Properties, Inc., a publicly traded mall and retail REIT that was subsequently acquired, from 2012 to 2015. He also served as Senior Vice President of Vornado Realty Trust, another publicly traded REIT.

Kevin P. O'Shea, Chief Financial Officer

Mr. O'Shea has served as AvalonBay's Chief Financial Officer since June 2014. His previous roles at the company included Executive Vice President—Capital Markets from January 2013 to May 2014, and Senior Vice President—Investment Management from July 2003 until January 2013. Before joining AvalonBay, Mr. O'Shea was an Executive Director at UBS Investment Bank, where his experience included real estate investment banking. Earlier in his career, he practiced commercial real estate and banking law as an attorney. Mr. O'Shea is also a Trustee of Urban Edge Properties, a publicly traded REIT, a position he has held since 2014.

Sean J. Breslin, Chief Operating Officer

Mr. Breslin has served as AvalonBay's Chief Operating Officer since January 2015, with responsibility for the company's operating platform. Prior to this, he was the company's Executive Vice President—Investments and Asset Management since April 2012. His other roles at AvalonBay included Senior Vice President—Redevelopment and Asset Management and Senior Vice President—Investments. Before joining AvalonBay in 2002, Mr. Breslin was the Chief Operating Officer of CWS Capital Partners.

Matthew H. Birenbaum, Chief Investment Officer

Mr. Birenbaum has been AvalonBay's Chief Investment Officer since January 2015. In this role, he is responsible for the company's investment strategy and oversees the Development, Construction, Investments, and Market Research functions. Before assuming his current position, he served as Executive Vice President—Corporate Strategy from October 2011 to January 2015. Prior to re-joining AvalonBay in October 2011, Mr. Birenbaum was the founding principal of Abbey Road Property Group, LLC, a multi-family development and investment firm. He also previously served as a Senior Vice President at EYA and was a Regional Vice President of Development with AvalonBay before rejoining in 2011.

Pamela R. Thomas, Executive Vice President—Portfolio and Asset Management

Ms. Thomas joined AvalonBay as Executive Vice President—Portfolio and Asset Management in July 2024. She is responsible for leading the company's Asset Management, Corporate Responsibility, and Mixed-Use groups. Before joining AvalonBay, Ms. Thomas was with CPP Investments, which oversees funds of the Canada Pension Plan, where she was Head of U.S. Real Estate from January 2020 and was promoted to Managing Director in June 2021. Prior to CPP Investments, she served as an Executive Director with JP Morgan Asset Management from 2013 and previously worked at RREEF/Deutsche Bank, focusing on East Coast multifamily investments.

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The key risks to AvalonBay Communities (AVB) are primarily driven by macroeconomic factors, interest rate sensitivity, and the evolving regulatory landscape in its target markets.

1. Macroeconomic and Market Headwinds: The company's performance is significantly impacted by overall economic conditions, including local economic and market dynamics, which can adversely affect occupancy rates, market rents, and property values. Economic uncertainty directly influences rental demand and pricing power. Furthermore, intense competition within suburban and urban markets, coupled with potential oversupply in some new markets, can further challenge rental growth and profitability. The cost of doing business, including operating expenses, is also rising faster than anticipated, squeezing Net Operating Income (NOI) growth.

2. Interest Rate Fluctuations: As an equity REIT, AvalonBay Communities is highly sensitive to changes in interest rates. Rising interest rates can significantly increase borrowing costs for new developments and acquisitions, thereby impacting the feasibility and profitability of capital projects. High interest rates also contribute to broader market headwinds that influence investor sentiment and property valuations.

3. Regulatory and Legislative Changes: AvalonBay operates in leading metropolitan areas known for dynamic regulatory environments. Changes in legislative frameworks governing rental markets, such as the implementation or expansion of rent control measures and other governmental limitations on property owners, pose significant regulatory risks. This is particularly a "persistent drag" in its established coastal markets.

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• Permanent shifts in remote work patterns: A significant and sustained increase in remote or hybrid work could reduce the historical demand drivers for premium apartment communities in highly dense, expensive urban core and close-in suburban areas where AVB primarily operates. If a substantial portion of the workforce no longer needs to commute daily to central business districts, it could lead to reduced demand, slower rent growth, or even potential population shifts away from these high-cost markets, impacting occupancy and rental income.
• Escalation of rent control and tenant protection legislation: There is a clear and growing trend of increased legislative and regulatory pressure for stricter rent control measures and expanded tenant protections in many of AVB's key markets, particularly in California, New York, the Pacific Northwest, and New England. These measures can directly limit AVB's ability to raise rents, recover costs, manage property expenses, and maintain the long-term profitability and value of its apartment communities.

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AvalonBay Communities (AVB) operates in the business of developing, redeveloping, acquiring, and managing apartment communities in leading metropolitan areas across the United States. The addressable markets for their main products and services, apartment rentals, can be characterized by the following estimated market sizes and relevant metrics:

• United States (Overall Multifamily Market): The U.S. multifamily market size was valued at approximately $265 billion in 2022 and is projected to reach $466 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 7.31% between 2023 and 2030. Apartment investment volume in the U.S. totaled $165.5 billion in 2025.
• California (Northern and Southern California combined): The apartment rental industry in California is estimated to have a market size of $48.5 billion in 2026.
• Southeast Florida: The apartment rental industry in Florida is projected to have a market size of $16.0 billion in 2026. As of October 2024, Southeast Florida had 944,000 renter households.
• New York/New Jersey Metro Area: For the New York portion of the metro area, with approximately 3,504,163 renter-occupied households and an average rent of $2,464 per month as of February 2026, the estimated annual rental market value is around $103.5 billion. In Manhattan, median rents for a one-bedroom apartment were above $4,200 in 2025. The average rent in New Jersey was $2,083 per month as of March 2026.
• New England (represented by Greater Boston): For Greater Boston, with a rental inventory of 294,188 units and an asking rent of $2,922 per month as of Q3 2025, the estimated annual rental market value is approximately $10.3 billion. Boston was identified as the hottest New England rental market in 2025, with a 95% occupancy rate.
• Mid-Atlantic (represented by Washington, D.C. Metro): The Washington, D.C. metro area had over 680,000 units of inventory and an average effective rent of $2,109 per unit as of Q3 2023. This represents an estimated annual rental market value of approximately $17.2 billion. The average rent across the broader Mid-Atlantic region was $1,700 per month as of February 2025.
• Pacific Northwest (represented by Portland Metro Area and Seattle): In the Portland Metro Area, the sales volume for buildings with 5 or more units reached $1.65 billion in 2024. This figure represents investment activity within the market. In Seattle, the citywide average rent was approximately $2,230 per month as of October 2025.
• Denver, Colorado: The median apartment rent in the Denver metropolitan area was $1,925 per month as of Q4 2023. As of March 2026, the average rent in Denver, CO, was $1,950. There were 15,596 units under development in the Denver metropolitan area as of Q4 2023.

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AvalonBay Communities (AVB) anticipates several key drivers for future revenue growth over the next 2-3 years:

1. Rent Increases: The company expects a modest increase in rent prices to be a primary driver of same-store residential revenue growth. For instance, AvalonBay forecasts an effective rent increase of 2% for the full year 2026, with a stronger performance expected in the second half of the year. Early 2026 trends show a 100 basis point acceleration in like-term effective rent change from January to February.
2. Development Pipeline and Lease-Up: AvalonBay's active development pipeline is projected to contribute significantly to revenue as new projects are completed and leased up. The company expects a meaningful uplift in development Net Operating Income (NOI) as projects stabilize during 2026 and anticipates development NOI of $47 million in 2026 accelerating to $75 million in 2027. For 2026, development is expected to contribute $0.10 or 90 basis points to earnings growth.
3. Improved Occupancy Rates: The company has observed an uptick in physical occupancy, with a 20 basis point rise from December to February, and expects this trend of improving occupancy to continue, contributing to overall revenue growth.
4. Favorable Supply-Demand Dynamics: A projected decrease in new housing supply in AvalonBay's established regions, expected to be approximately 40% less in 2026 compared to 2025, is anticipated to create more favorable supply-demand conditions. This reduction in new deliveries should lead to improved pricing power and higher occupancy rates for the company's existing portfolio, 92% of which is concentrated in these markets.
5. Operating and Technology Initiatives: AvalonBay is implementing various operating initiatives and technology enhancements designed to generate incremental NOI. These programs are expected to contribute an additional $7 million of NOI in 2026, with a long-term goal of generating $80 million in annual incremental NOI from these efforts.

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Share Repurchases

• AvalonBay Communities authorized a new $1.0 billion share repurchase program with no expiration date on February 27, 2026.
• In 2025, the company repurchased $488.115 million of common stock under its 2020 and 2025 Stock Repurchase Programs.
• As of February 27, 2026, the company had repurchased $112.8 million of common stock year-to-date in 2026.

Share Issuance

• In September 2024, AvalonBay completed a public offering of 3.68 million shares of common stock through forward sale agreements, including the full exercise of underwriters' option, with expected net proceeds for corporate purposes like acquisitions and development.
• The initial forward price per share for the September 2024 offering was $219.73.
• In 2025, the company settled outstanding equity forward contracts from 2024, issuing 367,113 shares of common stock for net proceeds of $81.333 million.

Inbound Investments

• No direct large inbound investments from third-parties (e.g., strategic partners or private equity firms) were identified.
• AvalonBay raised $890 million of equity capital in 2024 via an equity forward, which was intended to fund development starts.

Outbound Investments

• In 2025, AvalonBay acquired 12 communities with 3,378 apartment homes for a total purchase price of $841.95 million, including a Dallas-Fort Worth portfolio.
• In 2025, the company sold nine wholly-owned communities, containing 2,102 apartment homes and 38,000 square feet of commercial space.
• In Q1 2023, AVB provided three mezzanine loans totaling up to $92.4 million to outside developers, with $42.1 million funded by the end of March 2023.

Capital Expenditures

• As of December 31, 2025, AvalonBay had 24 wholly-owned development communities under construction, with an estimated total capital cost of $3.307 billion, expecting to contain 8,572 apartment homes and 69,000 square feet of commercial space.
• In 2025, the company started construction on 11 apartment communities and expanded two others, with an estimated total capital cost of $1.636 billion.
• The company anticipates commencing $1.7 billion of new development projects in 2026, targeting a 100-150 basis point spread between development yields and its cost of capital.