Analyst Note
| Kevin Brown, CFA |First-quarter results for AvalonBay Communities were in line with our expectations, giving us confidence in our $234 fair value estimate for the no-moat company. Same-store occupancy improved 20 basis points sequentially, slightly better than our estimate of a 10-basis-point improvement. Same-store rental rates grew 7.7% year over year, in line with our estimate of 7.6% growth, leading to same-store revenue growth of 8.5%. Same-store operating expenses increased 4.7% in the first quarter, which resulted in the company reporting same-store net operating income, NOI, growth of 10.3% that was in line with our estimate of 10.1% growth. The significant growth by the same-store portfolio along with several development projects that have completed over the past year led to AvalonBay reporting core funds from operations of $2.26 per share in the first quarter, a 16.3% increase over the first quarter of 2021.