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 $48 million annual run-rate achieved from 2021 baseline by YE25 and $7 million more expected in 2026.

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

• 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.

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

• Strong balance sheet with A3/A- rating, $2.7 billion in liquidity, and flexibility for development and stock buybacks, targeting $800 million in new development starts in 2026.

Development Pipeline and Earnings Outlook

• Development activity is expected to generate substantial earnings, with projected Development NOI ramping from $47 million in 2026 to $75 million in 2027.

• Initial stabilized yields for new projects are targeted at 6.5%-7%, funded mainly by asset sales, with $600 million in stock repurchased at $180/share.

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

• Development activity is concentrated in suburban submarkets within established regions, with over 90% of 2026 development occupancies at 11 communities.

• Portfolio pruning monetizes slower-growth assets at lower cap rates, reallocating capital to higher-yielding opportunities and optimizing future growth.

Market Conditions and Demand Outlook

• Current demand environment is stable but modest, with job growth and absorption lower than historical norms; supply in established regions is at post-GFC lows, supporting pricing power.

• Projected 2026 new market rate apartment deliveries are down ~40% year-over-year in key markets, with established regions representing 92% of the projected 2026 Same Store Pool and supply at its lowest since 2012.

• Rent growth is expected to accelerate in the second half of 2026 due to softer comps and lower supply, especially in markets like the Mid-Atlantic, where supply is down 60%.

• Early 2026 indicators show asking rents up 2.5% YTD, turnover down 100 bps, and occupancy up 20 bps, all consistent with expectations.

• Northern California is projected to lead 2026 same store revenue growth, with Metro NY/NJ leading on the East Coast.