Avalon Exeter, the 28-story apartment tower building that will include 187 units, is under construction in the Back Bay.
Thomas Grillo
Real Estate Editor- Boston Business Journal
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AvalonBay Communities, the Virginia-based REIT with a significant concentration of apartments in Greater Boston, reported that funds from operations rose in the third quarter amid higher rents and its acquisition of Archstone Apartments, the former residential real estate arm of Lehman Brothers Holdings.
Archstone was sold by Lehman last fall to AvalonBay and Equity Residential for $6.5 billion in cash and stock. About 60 percent of the company, or 23,000 apartments, went to Equity Residential, the country’s largest publicly traded apartment company. AvalonBay, the second largest public multifamily landlord in the U.S., received the remaining 22,000 units.
The average rent among AvalonBay’s 5,070 units in Greater Boston increased by 4.3 percent to $2,163 in the quarter that ended Sept. 30. That same portfolio’s average rent was $2,074 in the year-earlier period.
The local rent increase was consistent throughout AvalonBay’s entire national portfolio of roughly 34,000 residential units, although there were exceptions. Northern California was the hottest market in the quarter as rents swelled by 8.1 percent. It was followed by the Pacific Northwest, where average rents hikes reached 7.7 percent, and New York City, where rents increased by 6.8 percent.
For the third quarter, AvalonBay said funds from operations rose to $153.4 million, compared with $140.2 million in the year-earlier quarter. On a per share basis, funds from operations fell to $1.18, compared with $1.44 a year earlier; the company had about 25 percent fewer shares in the year-ago quarter.
Analysts on average had expected funds from operations of $1.17 per share, according to Thomson Reuters.
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