AvalonBay Communities Inc (NYSE:AVB) stock rose 0.47% (As on April 11, 11:22:40 AM UTC-4, Source: Google Finance) after Evercore ISI Group analyst Steve Sakwa upgraded the company from In-Line to Outperform. According to Sakwa, the market has not fully appreciated the potential for FFO/NAV accretion from AVB’s renewed ramp-up in development. This, coupled with the REIT‘s underperformance compared to peers since pre-pandemic times, creates an “attractive setup” for AVB. Sakwa also updated Q1 models and noted that AVB has declined 11% since Feb. 24, 2020, compared to -9% for Equity Residential and -7% for Essex Property Trust. Despite the more optimistic Outperform rating, Sakwa’s price target of $194 for AVB remains the same as in 2017 when he last upgraded the stock.
Meanwhile, the company announced that Same Store Residential rental revenue for the two months ended February 28, 2023, increased 10.5% over the prior year period. Renewal Offers for March and April 2023 were delivered to residents at an average increase in the 7% range over the existing lease.
As of December 31, 2022, the Company did not have any borrowings outstanding under its $2,250,000,000 unsecured revolving credit facility or its $500,000,000 unsecured commercial paper note program. The commercial paper program is backstopped by the Company’s commitment to maintain available borrowing capacity under its Credit Facility in an amount equal to actual borrowings under the program. The Company had $2,248,086,000 available under the Credit Facility after considering its commercial paper program and letters of credit as of December 31, 2022. In addition, at December 31, 2022, the Company had $613,189,000 in unrestricted cash and cash equivalents and $121,056,000 in cash in escrow, which is restricted primarily related to principal reserve funds for secured borrowing arrangements. The Company’s annualized Net Debt-to-Core EBITDAre for the fourth quarter of 2022 was 4.5 times and Unencumbered NOI for the year ended December 31, 2022 was 95%.
In addition, at December 31, 2022, the Company had 17 consolidated Development communities under construction that are expected to contain 5,417 apartment homes and 56,000 square feet of commercial space. Estimated Total Capital Cost at completion for these Development communities is $2,259,000,000.
On the other hand, the Company has declared a dividend for the first quarter of 2023 of $1.65 per share on the Company’s common stock (par value of $0.01 per share), which represents a 3.8% increase. The dividend is payable on April 17, 2023 to common stockholders of record as of March 31, 2023.