AvalonBay Communities, Inc. (AVB) Q1 2023 Earnings Call Transcript

AvalonBay Communities, Inc. (NYSE:AVB) Q1 2023 Earnings Conference Call April 27, 2023 1:00 PM ET

Company Participants

Jason Reilley - Vice President, Investor Relations

Ben Schall - Chairman and Chief Executive Officer and President

Kevin O’Shea - Chief Financial Officer

Sean Breslin - Chief Operating Officer

Matt Birenbaum - Chief Investment Officer

Conference Call Participants

Nick Joseph - Citi

Eric Wolfe - Citi

Steve Sakwa - Evercore

Austin Wurschmidt - KeyBanc

Adam Kramer - Morgan Stanley

Chandni Luthra - Goldman Sachs

John Pawlowski - Green Street

Jamie Feldman - Wells Fargo

John Kim - BMO Capital Markets

Josh Dennerlein - Bank of America

Haendel St. Juste - Mizuho

Alexander Goldfarb - Piper Sandler

Ami Probandt - UBS

Anthony Powell - Barclays

Operator

Good morning, ladies and gentlemen and welcome to the AvalonBay Communities First Quarter 2023 Earnings Conference Call. [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’ first quarter 2023 earnings conference call. As a reminder, this call may contain forward-looking statements and actual results may differ materially. There is a discussion of these risks and uncertainties in yesterday’s afternoon’s press release as well as in the company’s Form 10-K and Form 10-Q filed with the SEC.

I’ll now turn the call over to Ben Schall, Chairman and CEO and President of AvalonBay for his remarks. Ben?

Ben Schall

Thanks, Jason. In terms of key themes for this quarter, I will start by reviewing our strong start to the year and describe why we believe our suburban coastal portfolio is particularly well-positioned. Sean will discuss our operating performance and relative strength as we enter the peak leasing season. Matt will comment on the evolving development market and detail the differentiated earnings stream that our developments currently underway set to provide. And Kevin will review our strong financial position and highlight the advancements at our industry-leading centralized service center we utilize to drive revenue and operating efficiencies.

Turning to our presentation, starting on Page 4, we continue to meaningfully grow earnings in Q1 with core FFO increasing 13.7%. A significant part of this uplift is related to the roll-through of leases signed last year. We also continue to grow rents during Q1 with like-term effective rent change of 4.1%. For the quarter, we exceeded core FFO guidance by $0.05, with the $0.01 of revenue primarily attributable to better-than-expected collection rates from residents, $0.03 due to lower operating expenses and $0.01 related to interest income and other items. In early April, we drew down the proceeds of our equity forward, which we entered into about a year ago, at the spot price of $255 per share.