AvalonBay Communities (AVB) Citi’s Miami Global Property CEO Conference 2026 summary

Strategic Focus and Operational Transformation

• Leveraging scale, technology, and AI to drive operating efficiencies and incremental NOI, targeting $80 million annually, with $7 million expected this year and 60% of the goal already achieved.

• Four strategic focus areas: innovate and transform operations, optimize portfolio allocation, leverage development capabilities, and maintain a growth-oriented balance sheet.

• Portfolio allocation is shifting toward suburbs and expansion regions, targeting 75-80% suburban allocation and 25% expansion region allocation.

• Ongoing innovation aims to enhance customer service and shareholder returns, with significant development capabilities and $3.6 billion in projects under construction, fully funded by a 2024 equity raise.

• Strong balance sheet (A- rating/A3), $2.7B in liquidity, and net debt-to-core EBITDAre of 4.7x enable continued development and flexibility for stock buybacks.

Development and Capital Activity

• 2026 development starts are projected at $800 million, with $47 million in projected Development NOI.

• Development pipeline expected to generate substantial earnings, especially in 2027–2028, with over 90% of 2026 development occupancies at 11 communities.

• Net Development Earnings for 2026 are projected at $0.10/share, with development contribution offset by refinancing and transaction activity.

• Portfolio optimization through asset sales at low-5% cap rates and buybacks at low-6% cap rates, with $600 million repurchased at $180/share, funded mainly by asset sales.

• Year-to-date share repurchases total $113 million at $177/share, with $410 million of dispositions closed or under agreement for sale in 2026; total repurchases since 3Q25 reach $601 million.

Earnings Outlook and Market Positioning

• Development NOI forecasted to rise from $25 million in 2025 to $47 million in 2026 and $75 million more in 2027, driven by the $3.6 billion development pipeline.

• 2026 Core FFO per share growth is projected at 0.1% at the midpoint, with same store residential revenue growth of 1.4%.

• 4Q25 Core FFO per share grew 1.8% year-over-year; full-year 2025 growth was 2.1%.

• Dividend increased by ~1.7% to $1.78 per share.

• Current market undervalues future development earnings, creating an attractive entry point for shareholders.