Units - June 2012 - (Page 71)
AvalonBay Communities Inc. is a publicly traded real estate investment trust headquartered in Arlington, Va. The company develops, redevelops, acquires and manages 199 communities totaling more than 59,000 units in high barrier-to-entry United States markets.
Q. The apartment industry in general, nationwide, has thrived for the past year or two. Has it peaked in terms of investor value and consumer popularity? Please explain why it will continue, why it is in decline or what events could occur for it to fluctuate? A: There has been a lot of talk lately as to whether we’re at or near
has experienced six quarters of positive year-over-year growth in NOI. When you compare this to the last two cycles, which on average lasted about 24 quarters, we believe that this market cycle has legs under it for some time going forward.
Q: The past few years showed minimal new apartment stock coming online. Today, and for the near future, it appears new construction will increase. How will this affect the industry overall and AVB’s performance? A: We still believe that the industry, and in particular
a cyclical peak, but there are several reasons which support our belief that this cycle has legs. First, we expect demand to remain favorable for several more years. We see this demand being fueled by the fact that homeownership remains less attractive or out of reach for many households, despite improved affordability. Additionally, demand is being driven by an improving economy that is producing meaningful job growth in the private sector. Second, any impact from new supply will be limited to just a few of our markets. Looking at the market, we believe that we’re still in the “early innings” of the current up-cycle. It’s normal to see revenue and NOI growth rates spike at the beginning of a cycle, as the market recovers, and that’s been the case. But this doesn’t mean that this up cycle is running out of steam. So far, for example, AvalonBay
w w w. n a a h q . o r g
AvalonBay, is in a good place with respect to capacity. First, it’s important to note that multifamily construction starts are still below the historical average nationwide. In fact, we don’t expect annual levels to return to a long-term average until 2014 or beyond. Of course, we are seeing increased construction starts in various markets, for example in metro Washington, D.C., and downtown Seattle. In recent months, we’ve even seen multifamily permit applications rising significantly in Sunbelt markets. This may well be a sign that markets, which are less supply constrained, will see construction levels increasing
Table of Contents for the Digital Edition of Units - June 2012
Units - June 2012
Size Doesn’t Really Matter
Lights, Camera, Apartments!
Wait-Lists and the Angry Resident
Q&A With AvalonBay CEO & President Tim Naughton
Keep Cool And Carry On
At Your Service
Better Late Than Never
NMHC Top 50: Annual Rankings Reveal Resurgent Rental Market
2012 NAHMA Affordable 100
Leading the Way
It’s A Wi-Fi World
The NAA Network
Career Builders: Sharing Value of NAAEI Designations
Units - June 2012