AvalonBay Communities’ Real Estate Investment Trust Coursework

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The real estate investment trust (REIT) for AvalonBay Communities will be described below. Consequently, the company’s properties, amount invested, asset analysis, size of portfolio, geographic location, tenant concentrations and lease expiry will be described in this section. AvalonBay communities demonstrate its competence in building and housing estate. The company provides rent apartment, office complex, and buildings for individual, organizations, government agencies, and corporate institutions in the United States. The geographic location of AvalonBay Communities includes Virginia, New York, California, Connecticut, San Francisco, Seattle, Chicago, and New Jersey. As a result, the company’s marketing strategy targets multifamily landlords that desire decent homes and apartment units. After scaling legal and financial challenges, the organization was licensed to own and manage real estates, apartment units and office buildings. Thus, AvalonBay Communities manages business units under the Tax Reform Act of 1986.

REIT description

  • Company: AvalonBay Communities
  • Headquarters: Arlington, VA, United States
  • Incorporated: 1978
  • Average occupancy: 96%
  • Monthly rent: $2,370
  • Q3-14 rental revenue: 3.7%
  • Stock share value: $176.88
  • Employees: 3766
  • Sales $987 million (2014)
  • Company’s Symbol: AVB

Asset Analysis

The company has 248 building communities in 11 states in the United States. Consequently, the company has one apartment in the District of Columbia. However, 96% of the apartment portfolio is leased. AvalonBay stock is listed on the NYSE and S&P 500 component. AvalonBay Communities manage, rent, and redevelops housing apartments in the US market. The company owns more than300 apartment buildings and 80,000 units (AVALONBAY COMMUNITIES, INC, 2013). Currently, the company is expanding its assets with 3000 units and 35 communities. The company released 4.8 million shares at $ 151 per share to investors in 2014.

Geographic locationTenant leaseLease expiryRemarks
CommunitiesApartmentsPer year
Boston4010,238Monthly rental
New York1551,68x
New York Suburban, NY72,000x
Central New Jersey134,816x
San Jose, CA123389x
Washington, DC102,478x
Long Island, N113,567x
Oakland-East Bay, CA153,534x
San Diego, CA124,456x
Maryland Suburban, MD112,345x
Seattle, WA194,687x
Pacific Northwest234,456

Lease location and rentable area

Geographic locationRentable area (sq. Ft)
Bloomingdale, NJ176,542
Ossining, NY184,137
San Francisco, CA135,564
Berkeley, CA156,789
Stratford, CT148,736
Huntington Station, NY364,802
Houston, TX305,855
Fairfax, VA167,687

Company’s strategy

AvalonBay’s business strategies include developments, rebranding, acquisition, and managing apartment units. Strategic properties are acquired under the Land Reform Act. As a result, the company maintains its presence in 11 states across the United State. The states include Boston, New York, Los Angeles, Newport Beach, San Jose, Seattle, Connecticut, Virginia Beach, and New Jersey. AvalonBay’s property development strategy hinges on lon0term use and optimal yield. As a result, the firm’s estate agents estimate the property value and income. If the target site meets the company’s requirement, it is acquired and developed to suit multifamily landlords. The company rebuilds communities and apartments to meet the market requirement. The unstable business market influenced the redevelopment strategy to meet customer’s requirement, surpass close substitutes, and control the stock value. Thus, the organization improves on its design, innovation and workmanship. The factors that control investment in land assets include property type, target site, quality, location, and market type. As a result, the organization expands its presence in states with higher pre-capita income. Thus, a multifamily landlord is influenced by higher income and taste of preference.

Same store pool

A property owned by the organization as at the end of a financial year is called same store pool. The financial outlook for the organization improved over the years. As a result, the financial statement, income, and balance sheets have been stable compared to previous fiscal reports. Consequently, the company’s EPS and FFO per share were $0.34 and $1.45 respectively (AVALONBAY COMMUNITIES, INC, 2013). The company notices a decline in the FFO by eleven percent. However, the fourth quarter business operations increased by 2.5 percent. The records revealed that store-pool influenced the company’s marketing strategy. As a result, the organization completed 7000 communities and apartment with $7oo million. Consequently, the organization acquired, redeveloped, and constructed 10 communities to improve its presence in Boston, California, and Texas. Thus, the revenue allocation for construction, redevelopment and investment was $1 billion.

The company’s areas of strategic focus include property operations, business & culture, portfolio management, redevelopment & development, and balance sheet. The strategic focus on property operations includes operational cost, turnover, and result over-cycle. Consequently, the strategic focus on portfolio management includes market volatility, conditioned capital recycling, rental rates per apartment. As a result, the property operations will improve customer service and reduce turnover philosophy. Consequently, property operation improves the operating performance of the organization. AvalonBay’s portfolio management is strengthened by geographic diversification and price point diversification. As a result, the organization maintains its presence while expanding its average price point.

Important Statistics

AvalonBay Communities: Performance

Period Ended2014 F42014 F3Remarks
Gross Depreciable Property16,187,05715,923,713
Net Property Investment13,295,80313,124,034
Finance Leases00
Property Held for Sale: Non-depreciable42,17580,624
Construction in Progress1,417,2461,343,157
Mortgage Loans00

Portfolio overview

LocationCurrent communitiesDevelopment unitsRedevelopment units
New England12,0001,900500
New York13,0433,023214
Midwest12,466567867
Northern California11,050434712
Southern California1,8973404,960
Pacific Northwest3,94500
Non-core1,23200

Reference

AVALONBAY COMMUNITIES, INC: Form 10-k, annual report pursuant to section 13 or 15(d) of the securities exchange act of 1934. (2013). Web.

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