AvalonBay Profit Rises on Asset-Sale Gain, Higher Rents -- Update

   By Josh Beckerman and Tess Stynes 
 

AvalonBay Communities Inc. said its first-quarter earnings rose 47% amid an asset-sale gain and as higher average rental rates boosted revenue.

For the current quarter, the apartment real-estate investment trust forecast funds from operations of $1.92 to $1.96 a share and core FFO of $1.80 to $1.84 a share.

Analysts expect FFO of $1.82 a share and adjusted FFO of $1.84 a share, according to a Thomson Reuters survey.

A January fire at an Edgewater, N.J., AvalonBay property destroyed more than 200 apartments. The company expected the fire would affect its 2015 funds from operations by 10 cents a share.

AvalonBay has said losses related to the fire would be substantially covered by its insurance policies, subject to deductibles and a self-insured portion of its property insurance.

AvalonBay said average rental rates increased 4.3% in its "established communities" portfolio, while occupancies were flat.

The company also sold its Avalon on Stamford Harbor community, which contains 323 apartment homes and a marina with 74 boat slips, for $115.5 million, resulting in a gain of $70.9 million.

Overall, AvalonBay reported a profit of $208.1 million, or $1.56 a share, compared with $141.6 million, or $1.09 a share, a year earlier.

Per-share FFO rose to $1.88 from $1.64, compared with the company's projection of $1.86 to $1.90. Excluding one-time items, per-share FFO rose to $1.75 from $1.63, compared with expectations for $1.71 to $1.75.

Revenue, including discontinued operations, increased 10% to $442.4 million. Analysts expected $440.9 million.

Write to Josh Beckerman at [e-mail] and Tess Stynes at [e-mail]

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