US CREDIT UPDATE: AvalonBay Communities (AVB): 3Q25 Results

AvalonBay Communities: 3Q25 Results
(AVB; A3/A-/NR)
 

Mostly met BBG consensus and adjusted outlook lower. Slowdown in job growth started to meaningly hit results in September and carried through into October. Credit fundamentals and liquidity remain intact. Slight credit negative given outlook. Current levels at fair value for a A- REIT.

• Total revenues were $767m and matched BBG consensus. Same Store Res Rev growth of 2.3% YOY. Uncollectible rents remained low at 1.6%, unchanged YOY.
• SS Residential op expense growth was 4.6% due mostly to higher maintenance and insurance costs.
• SS Res NOI was up 1.1%.
• EBITDA was $468m in line with consensus of $469m
• Net Income of $381m was better than consensus of $172m
• FFO/sh of $2.75/sh was lower than consensus of $2.80/sh
• Net debt/Core EBITDAre was 4.5x. Total liquidity was $3.4b.
• Development starts were $434m and completions were $195m. Projects under construction totaled $3.0b. Acquisitions were $258m. Dispositions totaled $585m.
• FY25 guidance was lowered. Core FFO/sh now will only be 2.2% down from initial expectations of 3.5%. SS res rev growth now expected at 2.5% (down from 2.8%), SS op ex growth now at 3.8% (up from 3.1%) and SS NOI growth only now expected at 2.0% (was 2.7%).
• Q4 Core FFO/sh now expected at $2.85/sh and FY25 should be $11.25/sh.