AvalonBay Communities, Inc. (AVB) Q2 2023 Earnings Call Transcript

AvalonBay Communities, Inc. (NYSE:AVB) Q2 2023 Earnings Conference Call August 1, 2023 1:00 PM ET

Company Participants

Jason Reilley – Vice President of Investor Relations

Ben Schall – Chief Executive Officer and President

Sean Breslin – Chief Operating Officer

Matt Birenbaum – Chief Investment Officer

Kevin O’Shea – Chief Financial Officer

Conference Call Participants

Nick Joseph – Citi

Austin Wurschmidt – KeyBanc

Adam Kramer – Morgan Stanley

John Kim – BMO Capital Markets

Alan Peterson – Green Street

Sanket Agrawal – Evercore

Jamie Feldman – Wells Fargo

Josh Dennerlein – Bank of America

Alexander Goldfarb – Piper Sandler

Brad Heffern – RBC Capital Markets

Michael Goldsmith – UBS

Anthony Powell – Barclays

Operator

Good morning, ladies and gentlemen, and welcome to AvalonBay Communities Second Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. Following remarks by the company, we will conduct a question-and-answer session. [Operator Instructions] Your host for today’s conference call is Mr. Jason Reilley, Vice President of Investor Relations.

Mr. Reilley, you may begin your conference.

Jason Reilley

Thank you, Doug, and welcome to AvalonBay Communities second quarter 2023 earnings conference call. Before we begin, please note that forward-looking statements may be made during this discussion. There are a variety of risks and uncertainties associated with forward-looking statements, and actual results may differ materially. There is a discussion of these risks and uncertainties in yesterday afternoon’s press release as well as in the company’s Form 10-K and Form 10-Q filed with the SEC.

As usual, this press release does include an attachment with definitions and reconciliations of non-GAAP financial measures and other terms, which may be used in today’s discussion. The attachment is also available on our website at www.avalonbay.com/earnings, and we encourage you to refer to this information during the review of our operating results and financial performance.

And with that, I will turn the call over to Ben Schall, CEO and President of AvalonBay Communities, for his remarks. Ben?

Ben Schall

Thank you, Jason, and thank you, everyone, for joining us today. I will start with an overview of our outperformance in Q2, speak to the limited new supply in our markets as compared to most other markets and then provide additional color on our guidance raise, our second raise of the year. Sean will speak to our underlying market fundamentals, including the progress we are making on bad debt and provide a further update on our operating model initiatives, which are exceeding expectations. And then Matt will highlight the continued outperformance of our new projects in lease-up and summarize our recent transaction activity, including the sale of three assets at a 4.7% cap rate. Our balance sheet is as strong as it has ever been with total liquidity of $3 billion, and Kevin is also here with us for Q&A.