Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | AVALONBAY COMMUNITIES INC | |
Entity Central Index Key | 915,912 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 136,877,195 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Real estate: | ||
Land and improvements | $ 3,584,531 | $ 3,432,769 |
Buildings and improvements | 12,873,941 | 12,258,009 |
Furniture, fixtures and equipment | 448,476 | 402,940 |
Gross operating real estate | 16,906,948 | 16,093,718 |
Less accumulated depreciation | (3,212,258) | (2,874,578) |
Net operating real estate | 13,694,690 | 13,219,140 |
Construction in progress, including land | 1,542,201 | 1,417,246 |
Land held for development | 553,729 | 180,516 |
Operating real estate assets held for sale, net | 0 | 118,838 |
Real Estate Investments, Net | 15,790,620 | 14,935,740 |
Cash and cash equivalents | 318,557 | 509,460 |
Cash in escrow | 101,888 | 95,625 |
Resident security deposits | 30,875 | 29,617 |
Investments in unconsolidated real estate entities | 268,647 | 298,315 |
Deferred financing costs, net | 37,727 | 39,728 |
Deferred development costs | 32,321 | 67,029 |
Prepaid expenses and other assets | 201,344 | 201,209 |
Total assets | 16,781,979 | 16,176,723 |
LIABILITIES AND EQUITY | ||
Unsecured notes, net | 3,568,098 | 2,993,265 |
Variable rate unsecured credit facility | 0 | 0 |
Mortgage notes payable | 2,738,629 | 3,532,587 |
Dividends payable | 171,098 | 153,207 |
Payables for construction | 103,042 | 101,946 |
Accrued expenses and other liabilities | 271,195 | 244,549 |
Accrued interest payable | 35,904 | 41,318 |
Resident security deposits | 54,048 | 49,189 |
Liabilities related to real estate assets held for sale | 0 | 1,492 |
Total liabilities | 6,942,014 | 7,117,553 |
Redeemable noncontrolling interests | 10,512 | 12,765 |
Equity: | ||
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at September 30, 2015 and December 31, 2014; zero shares issued and outstanding at September 30, 2015 and December 31, 2014 | 0 | 0 |
Common stock, $0.01 par value; 280,000,000 shares authorized at September 30, 2015 and December 31, 2014; 136,876,753 and 132,050,382 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 1,369 | 1,320 |
Additional paid-in capital | 10,048,752 | 9,354,685 |
Accumulated earnings less dividends | (182,487) | (267,085) |
Accumulated other comprehensive loss | (38,181) | (42,515) |
Total equity | 9,829,453 | 9,046,405 |
Total liabilities and equity | $ 16,781,979 | $ 16,176,723 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 280,000,000 | 280,000,000 |
Common stock, shares issued | 136,876,753 | 132,050,382 |
Common stock, shares outstanding | 136,876,753 | 132,050,382 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenue: | |||||
Rental and other income | $ 473,199 | $ 428,022 | $ 1,367,473 | $ 1,236,154 | |
Management, development and other fees | 2,161 | 2,503 | 7,714 | 8,253 | |
Total revenue | 475,360 | 430,525 | 1,375,187 | 1,244,407 | |
Expenses: | |||||
Operating expenses, excluding property taxes | 115,655 | 105,212 | 340,501 | 304,812 | |
Property taxes | 50,416 | 44,996 | 143,505 | 131,920 | |
Interest expense, net | [1] | 43,234 | 46,376 | 133,398 | 132,631 |
(Gain) loss on extinguishment of debt, net | (18,987) | 0 | (26,736) | 412 | |
Depreciation expense | [1] | 120,184 | 111,836 | 355,664 | 328,598 |
General and administrative expense | 10,503 | 11,290 | 32,614 | 30,745 | |
Expensed acquisition, development and other pursuit costs, net of recoveries | 3,391 | 406 | 5,251 | 3,139 | |
Casualty and impairment loss (gain), net | (658) | 0 | 10,668 | 0 | |
Total expenses | 325,054 | 320,116 | 973,529 | 932,257 | |
Equity in income of unconsolidated real estate entities | 20,554 | 130,592 | 68,925 | 143,527 | |
Gain on sale of real estate | 0 | 0 | 9,647 | 0 | |
Gain on sale of communities | 35,216 | 0 | 106,151 | 60,945 | |
Income from continuing operations | 206,076 | 241,001 | 586,381 | 516,622 | |
Discontinued operations: | |||||
Income from discontinued operations | 0 | 0 | 0 | 310 | |
Gain on sale of discontinued operations | 0 | 0 | 0 | 37,869 | |
Total discontinued operations | 0 | 0 | 0 | 38,179 | |
Net income | 206,076 | 241,001 | 586,381 | 554,801 | |
Net loss (income) attributable to noncontrolling interests | 66 | 99 | 229 | (13,872) | |
Net income attributable to common stockholders | 206,142 | 241,100 | 586,610 | 540,929 | |
Other comprehensive income: | |||||
Cash flow hedge losses reclassified to earnings | 1,342 | 1,546 | 4,334 | 4,557 | |
Comprehensive income | $ 207,484 | $ 242,646 | $ 590,944 | $ 545,486 | |
Earnings per common share - basic: | |||||
Income (loss) from continuing operations attributable to common stockholders (in dollars per share) | $ 1.54 | $ 1.83 | $ 4.42 | $ 3.86 | |
Discontinued operations attributable to common stockholders (in dollars per share) | 0 | 0 | 0 | 0.29 | |
Net income attributable to common stockholders (in dollars per share) | 1.54 | 1.83 | 4.42 | 4.15 | |
Earnings per common share - diluted: | |||||
Income (loss) from continuing operations attributable to common stockholders (in dollars per share) | 1.53 | 1.83 | 4.39 | 3.85 | |
Discontinued operations attributable to common stockholders (in dollars per share) | 0 | 0 | 0 | 0.29 | |
Net income attributable to common stockholders (in dollars per share) | 1.53 | 1.83 | 4.39 | 4.14 | |
Dividends per common share (in dollars per share) | $ 1.25 | $ 1.16 | $ 3.75 | $ 3.48 | |
[1] | Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Cash flows from operating activities: | |||
Net income | $ 586,381 | $ 554,801 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation expense | [1] | 355,664 | 328,598 |
Amortization of deferred financing costs | 5,117 | 4,763 | |
Amortization of debt premium | (19,571) | (26,271) | |
(Gain) loss on extinguishment of debt, net | (26,736) | 412 | |
Amortization of stock-based compensation | 11,980 | 10,354 | |
Equity in loss (income) of, and return on, unconsolidated entities and noncontrolling interests, net of eliminations | 13,502 | 2,911 | |
Casualty and impairment gain, net | (17,303) | 0 | |
Abandonment of development pursuits | 0 | 1,455 | |
Cash flow hedge losses reclassified to earnings | 4,334 | 4,557 | |
Gain on sale of real estate assets | (146,745) | (229,200) | |
(Increase) decrease in cash in operating escrows | (8,409) | 771 | |
Decrease (increase) in resident security deposits, prepaid expenses and other assets | 2,986 | (12,808) | |
Increase in accrued expenses, other liabilities and accrued interest payable | 33,072 | 1,086 | |
Net cash provided by operating activities | 794,272 | 641,429 | |
Cash flows from investing activities: | |||
Development/redevelopment of real estate assets including land acquisitions and deferred development costs | (1,265,829) | (861,466) | |
Capital expenditures - existing real estate assets | (40,358) | (33,324) | |
Capital expenditures - non-real estate assets | (4,887) | (5,776) | |
Proceeds from sale of real estate, net of selling costs | 232,415 | 186,651 | |
Insurance recoveries for property damage claims | 44,142 | 0 | |
Mortgage note receivable payment | 0 | 21,748 | |
Increase in payables for construction | 1,010 | 3,463 | |
Distributions from unconsolidated real estate entities | 47,873 | 197,463 | |
Investments in unconsolidated real estate entities | (881) | (5,254) | |
Net cash used in investing activities | (986,515) | (496,495) | |
Cash flows from financing activities: | |||
Issuance of common stock | 674,631 | 340,091 | |
Dividends paid | (484,251) | (440,632) | |
Issuance of mortgage notes payable | 0 | 53,000 | |
Repayments of mortgage notes payable, including prepayment penalties | (743,653) | (28,718) | |
Issuance of unsecured notes | 574,066 | 250,000 | |
Repayment of unsecured notes | 0 | (150,000) | |
Payment of deferred financing costs | (4,741) | (3,414) | |
Distributions to DownREIT partnership unitholders | (28) | (26) | |
Distributions to joint venture and profit-sharing partners | (274) | (262) | |
Redemption of preferred interest obligation | (14,410) | (6,300) | |
Net cash provided by financing activities | 1,340 | 13,739 | |
Net (decrease) increase in cash and cash equivalents | (190,903) | 158,673 | |
Cash and cash equivalents, beginning of period | 509,460 | 281,355 | |
Cash and cash equivalents, end of period | 318,557 | 440,028 | |
Cash paid during the period for interest, net of amount capitalized | $ 149,097 | $ 154,653 | |
[1] | Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Supplemental disclosures of non-cash investing and financing activities | |||||
Stock issued in connection with stock grants (in shares) | 157,779 | 113,822 | |||
Common stock issued through the dividend reinvestment plan (in shares) | 1,608 | 1,868 | |||
Common stock issued through the dividend reinvestment plan | $ 275,000 | $ 250,000 | |||
Number of shares withheld to satisfy employees' tax withholding and other liabilities | 39,800 | 53,983 | |||
Shares withheld to satisfy employees' tax withholding and other liabilities, value | $ 5,921,000 | $ 4,701,000 | |||
Net operating real estate | $ 13,694,690,000 | 13,694,690,000 | $ 13,219,140,000 | ||
Dividends declared but not paid | 171,098,000 | $ 153,125,000 | 171,098,000 | 153,125,000 | $ 153,207,000 |
(Decrease) increase in redeemable noncontrolling interests | (1,722,000) | 4,088,000 | |||
Cash flow hedge losses reclassified to earnings | 1,342,000 | $ 1,546,000 | $ 4,334,000 | 4,557,000 | |
Noncontrolling Interest, Decrease from Deconsolidation | $ 17,816,000 | ||||
Restricted stock | |||||
Supplemental disclosures of non-cash investing and financing activities | |||||
Conversion of restricted stock units (in shares) | 95,826 | 16,209 | |||
Restricted stock granted (in shares) | 61,953 | 97,613 | |||
Fair value of shares issued | $ 10,721,000 | $ 12,605,000 | |||
Stock Issued During Period, Shares, Share-based Compensation, Forfeited | 200 | ||||
Stock Issued During Period, Value, Share-based Compensation, Forfeited | $ 1,826,000 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Supplemental disclosures of non-cash investing and financing activities | |||||
Restricted stock granted (in shares) | 82,812 | ||||
Stock Issued During Period, Shares, Share-based Compensation, Forfeited | 4,293 | ||||
Stock Issued During Period, Value, Share-based Compensation, Forfeited | $ 502,000 | ||||
Avalon at Edgewater [Member] | |||||
Supplemental disclosures of non-cash investing and financing activities | |||||
Net operating real estate | $ 21,844,000 | $ 21,844,000 | |||
Deferred Compensation, Share-based Payments [Member] | Non Employee Director [Member] | |||||
Supplemental disclosures of non-cash investing and financing activities | |||||
Conversion of restricted stock units (in shares) | 46,589 | ||||
Fair value of shares issued | $ 3,552,000 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Organization, Basis of Presentation and Significant Accounting Policies | Organization, Basis of Presentation and Significant Accounting Policies Organization and Basis of Presentation AvalonBay Communities, Inc. (the “Company,” which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries), is a Maryland corporation that has elected to be treated as a real estate investment trust (“REIT”) for federal income tax purposes under the Internal Revenue Code of 1986 (the “Code”). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. At September 30, 2015 , the Company owned or held a direct or indirect ownership interest in 255 operating apartment communities containing 74,202 apartment homes in 11 states and the District of Columbia, of which eight communities containing 2,675 apartment homes were under reconstruction. In addition, the Company has 27 communities under construction that are expected to contain an aggregate of 8,649 apartment homes when completed. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 33 communities that, if developed as expected, will contain an estimated 9,752 apartment homes. The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s 2014 Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included. Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q. Earnings per Common Share Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share (“EPS”). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company’s earnings per common share are determined as follows (dollars in thousands, except per share data): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Basic and diluted shares outstanding Weighted average common shares - basic 133,669,584 131,330,078 132,516,847 130,165,873 Weighted average DownREIT units outstanding 7,500 7,500 7,500 7,500 Effect of dilutive securities 1,032,376 568,417 1,139,423 554,627 Weighted average common shares - diluted 134,709,460 131,905,995 133,663,770 130,728,000 Calculation of Earnings per Share - basic Net income attributable to common stockholders $ 206,142 $ 241,100 $ 586,610 $ 540,929 Net income allocated to unvested restricted shares (467 ) (366 ) (1,444 ) (858 ) Net income attributable to common stockholders, adjusted $ 205,675 $ 240,734 $ 585,166 $ 540,071 Weighted average common shares - basic 133,669,584 131,330,078 132,516,847 130,165,873 Earnings per common share - basic $ 1.54 $ 1.83 $ 4.42 $ 4.15 Calculation of Earnings per Share - diluted Net income attributable to common stockholders $ 206,142 $ 241,100 $ 586,610 $ 540,929 Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations 9 9 28 26 Adjusted net income available to common stockholders $ 206,151 $ 241,109 $ 586,638 $ 540,955 Weighted average common shares - diluted 134,709,460 131,905,995 133,663,770 130,728,000 Earnings per common share - diluted $ 1.53 $ 1.83 $ 4.39 $ 4.14 All options to purchase shares of common stock outstanding as of September 30, 2015 are included in the computation of diluted earnings per share. Certain options to purchase shares of common stock in the amount of 1,499 were outstanding at September 30, 2014 , but were not included in the computation of diluted earnings per share because such options were anti-dilutive for the quarter. The Company is required to estimate the forfeiture of stock options and recognize compensation cost net of the estimated forfeitures. The estimated forfeitures included in compensation cost are adjusted to reflect actual forfeitures at the end of the vesting period. The forfeiture rate at September 30, 2015 was 1.0% and is based on the average forfeiture activity over a period equal to the estimated life of the stock options. The application of estimated forfeitures did not materially impact compensation expense for the three and nine months ended September 30, 2015 or 2014 . Derivative Instruments and Hedging Activities The Company enters into interest rate swap and interest rate cap agreements (collectively, “Hedging Derivatives”) for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives transactions for trading or other speculative purposes. The Company assesses the effectiveness of qualifying cash flow and fair value hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of general and administrative expenses. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For the Hedging Derivatives positions that the Company has determined qualify as effective cash flow hedges, the Company has recorded the effective portion of cumulative changes in the fair value of Hedging Derivatives in other comprehensive income. Amounts recorded in other comprehensive income will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of Hedging Derivatives that the Company has determined qualified as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding debt being hedged. See Note 10, "Fair Value," for further discussion of derivative financial instruments. Legal and Other Contingencies In January 2015, a fire occurred at the Company’s Avalon at Edgewater apartment community located in Edgewater, New Jersey ("Edgewater"). Edgewater consisted of two residential buildings. One building, containing 240 apartment homes, was destroyed. The second building, containing 168 apartment homes, suffered minimal damage and has been repaired. The Company is still assessing its losses resulting from the fire, including liability to third parties who incurred damages as a result of the fire. The Company is also evaluating whether to rebuild and replace the building that was destroyed and does not believe that the outcome of this decision will have a material impact on the Company’s financial condition or results of operations. The Company believes that the fire was caused by sparks from a torch used during repairs being performed by a Company employee who was not a licensed plumber. The Company’s insurers are negotiating and settling claims submitted to the insurers by third parties who incurred property damage and are claiming other losses. Four putative class action lawsuits have been filed against the Company on behalf of Edgewater residents and others who may have been harmed by the fire; these actions have been consolidated by the court into one civil putative class action. In addition, 17 lawsuits representing approximately 133 individual plaintiffs have been filed against the Company. The Company believes that it has meritorious defenses to the extent of damages claimed. Additional lawsuits arising from the fire may be filed. Following the fire, the Company received a civil citation for “failure to notify Fire Department of an active fire” from Bergen County, New Jersey. The Company has decided not to appeal this citation. The Company has also received two citations that were alleged to be serious by the Occupational Safety and Health Administration ("OSHA"); the Company has appealed these citations. It is possible that additional governmental investigations are or may be ongoing. The Company is unable to evaluate the nature and potential materiality of any such investigations or actions. Having incurred applicable deductibles and a self-insured amount equal to 12% of the first $50,000,000 of property damage, the Company currently believes that all of its remaining liability to third parties and all of the Company's additional cost for replacement cost coverage for property damage resulting from the fire will be substantially covered by its insurance policies. However, the Company can give no assurances in this regard and continues to evaluate this matter. See Note 5, "Investments in Real Estate Entities," and Part II, Item 1, "Legal Proceedings," for further discussion of the casualty gains and losses and lawsuits associated with the Edgewater fire. The Company is involved in various other claims and/or administrative proceedings unrelated to the Edgewater fire that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these other outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations. Acquisitions of Investments in Real Estate The Company accounts for acquisitions of investments in real estate in accordance with the authoritative guidance for the initial measurement, which requires the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree to be recognized at fair value. Typical assets and liabilities acquired include land, building, furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes various sources, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to amounts in prior years’ financial statements to conform to current year presentations as a result of changes in held for sale classification as described in Note 6, “Real Estate Disposition Activities.” Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, a revenue recognition standard that will result in companies recognizing revenue from contracts when control for the service or product that is the subject of the contract is transferred from the seller to the buyer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers-Deferral of the Effective Date, which defers the effective date of the new revenue recognition standard one year. The guidance is effective in the first quarter of 2018, and the Company is assessing whether the new standard will have a material effect on its financial position or results of operations. In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis, which amends the criteria for determining variable interest entities (“VIEs”), amends the criteria for determining if a service provider possesses a variable interest in a VIE, and eliminates the presumption that a general partner should consolidate a limited partnership. The guidance is effective in the first quarter of 2016 and allows for early adoption. The Company is currently assessing the effect of adoption on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. The guidance requires debt issuance costs related to a recognized debt liability to be presented as a direct deduction from the carrying amount of that debt liability. The new guidance will only impact financial statement presentation. In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The guidance codified the SEC staff's view on the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. The guidance is effective in the first quarter of 2016 and allows for early adoption. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements. |
Interest Capitalized
Interest Capitalized | 9 Months Ended |
Sep. 30, 2015 | |
Interest Capitalized | |
Interest Capitalized | Interest Capitalized The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company’s development or redevelopment activities totaled $20,356,000 and $15,989,000 for the three months ended September 30, 2015 and 2014 , respectively, and $59,186,000 and $54,294,000 for the nine months ended September 30, 2015 and 2014 , respectively. |
Notes Payable, Unsecured Notes
Notes Payable, Unsecured Notes and Credit Facility | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable, Unsecured Notes and Credit Facility | Notes Payable, Unsecured Notes and Credit Facility The Company’s mortgage notes payable, unsecured notes, Term Loan and Credit Facility, both as defined below, as of September 30, 2015 and December 31, 2014 , are summarized below (dollars in thousands). The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of September 30, 2015 and December 31, 2014 , as shown in the Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, “Real Estate Disposition Activities”). 9/30/2015 12/31/2014 Fixed rate unsecured notes (1) $ 3,275,000 $ 2,750,000 Term Loan 300,000 250,000 Fixed rate mortgage notes payable - conventional and tax-exempt (2) 1,668,496 2,400,677 Variable rate mortgage notes payable - conventional and tax-exempt (2) 1,045,486 1,047,461 Total mortgage notes payable and unsecured notes 6,288,982 6,448,138 Credit Facility — — Total mortgage notes payable, unsecured notes and Credit Facility $ 6,288,982 $ 6,448,138 _____________________________________ (1) Balances at September 30, 2015 and December 31, 2014 exclude $6,902 and $6,735 of debt discount, respectively, as reflected in unsecured notes, net on the Company’s Condensed Consolidated Balance Sheets. (2) Balances at September 30, 2015 and December 31, 2014 exclude $24,647 and $84,449 of debt premium, respectively, as reflected in mortgage notes payable on the Company’s Condensed Consolidated Balance Sheets. The following debt activity occurred during the nine months ended September 30, 2015 : • In January 2015, in conjunction with the disposition of Avalon on Stamford Harbor, the Company substituted AVA Belltown as collateral for the disposed community's outstanding fixed rate secured mortgage loan. • In March 2015, the Company borrowed the final $50,000,000 available under the $300,000,000 variable rate unsecured term loan (the “Term Loan”), maturing in March 2021. • In April 2015, the Company repaid an aggregate of $481,582,000 principal amount of secured indebtedness, which includes eight fixed rate mortgage loans secured by eight wholly-owned operating communities, at par. The indebtedness had an aggregate effective interest rate of 3.12% , and a stated maturity date of November 2015 . The Company incurred a gain on the early debt extinguishment of $8,724,000 , representing the excess of the write-off of unamortized premium resulting from the debt assumed in the Archstone Acquisition, as defined in our Form 10-K for the year ended December 31, 2014. • In May 2015, the Company issued $525,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $520,653,000 . The notes mature in June 2025 and were issued at a 3.45% coupon interest rate. • In June 2015, the Company repaid a $15,778,000 fixed rate secured mortgage note with an effective interest rate of 7.50% in advance of its February 2041 maturity date, recognizing a charge of $455,000 for a prepayment penalty and write-off of deferred financing costs. • In June 2015, the Company repaid a $7,805,000 fixed rate secured mortgage note with an effective interest rate of 7.84% at par and without penalty in advance of its May 2027 maturity date, recognizing a charge of $263,000 for the write-off of deferred financing costs. • In June 2015, the Company repaid the $74,531,000 fixed rate secured mortgage note secured by Edgewater with an effective interest rate of 5.95% at par and without penalty in advance of its May 2019 maturity date, recognizing a charge of $259,000 for the write-off of deferred financing costs. • In July 2015, the Company repaid a $140,346,000 fixed rate secured mortgage note with an effective interest rate of 5.56% in advance of its May 2053 maturity date, resulting in a recognized gain of $18,987,000 , consisting of the write-off of unamortized premium net of deferred financing costs of $30,215,000 , partially offset by a prepayment penalty of $11,228,000 . The Company has a $1,300,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the “Credit Facility”) which matures in April 2017. The Company has the option to extend the maturity by up to one year under two , six month extension options for an aggregate fee of $1,950,000 . The Credit Facility bears interest at varying levels based on the LIBOR rating levels achieved on the unsecured notes and on a maturity schedule selected by the Company. The current stated pricing is LIBOR plus 0.95% ( 1.14% at September 30, 2015 ), assuming a one month borrowing rate. The annual facility fee is approximately $1,950,000 based on the $1,300,000,000 facility size and based on the Company’s current credit rating. The Company had no borrowings outstanding under the Credit Facility and had $43,580,000 and $49,407,000 outstanding in letters of credit that reduced the borrowing capacity as of September 30, 2015 and December 31, 2014 , respectively. In the aggregate, secured notes payable mature at various dates from December 2015 through July 2066, and are secured by certain apartment communities (with a net carrying value of $3,363,527,000 , excluding communities classified as held for sale, as of September 30, 2015 ). As of September 30, 2015 , the Company has guaranteed approximately $234,500,000 of mortgage notes payable held by wholly-owned subsidiaries; all such mortgage notes payable are consolidated for financial reporting purposes. The weighted average interest rate of the Company’s fixed rate mortgage notes payable (conventional and tax-exempt) was 4.7% and 4.5% at September 30, 2015 and December 31, 2014 , respectively. The weighted average interest rate of the Company’s variable rate mortgage notes payable (conventional and tax exempt), the Term Loan and its Credit Facility, including the effect of certain financing related fees, was 1.7% and 1.8% at September 30, 2015 and December 31, 2014 , respectively. Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at September 30, 2015 are as follows (dollars in thousands): Year Secured notes payments Secured notes maturities Unsecured notes maturities Stated interest rate of unsecured notes 2015 $ 4,295 $ 103,743 $ — — % 2016 16,164 16,256 250,000 5.750 % 2017 17,166 709,991 250,000 5.700 % 2018 16,364 76,673 — — % 2019 5,099 588,428 — — % 2020 4,057 50,825 250,000 6.100 % 400,000 3.625 % 2021 4,017 27,844 250,000 3.950 % 300,000 LIBOR + 1.450% 2022 4,295 — 450,000 2.950 % 2023 4,578 — 350,000 4.200 % 250,000 2.850 % 2024 4,888 — 300,000 3.500 % Thereafter — 1,059,299 525,000 3.450 % $ 80,923 $ 2,633,059 $ 3,575,000 The Company was in compliance at September 30, 2015 with customary financial and other covenants under the Credit Facility, the Term Loan, and the Company’s fixed rate unsecured notes. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity The following summarizes the changes in equity for the nine months ended September 30, 2015 (dollars in thousands): Common stock Additional paid-in capital Accumulated earnings less dividends Accumulated other comprehensive loss Total equity Balance at December 31, 2014 $ 1,320 $ 9,354,685 $ (267,085 ) $ (42,515 ) $ 9,046,405 Net income attributable to common stockholders — — 586,610 — 586,610 Cash flow hedge loss reclassified to earnings — — — 4,334 4,334 Change in redemption value of redeemable noncontrolling interest — — 1,722 — 1,722 Dividends declared to common stockholders — — (502,417 ) — (502,417 ) Issuance of common stock, net of withholdings 49 673,302 (1,317 ) — 672,034 Amortization of deferred compensation — 20,765 — — 20,765 Balance at September 30, 2015 $ 1,369 $ 10,048,752 $ (182,487 ) $ (38,181 ) $ 9,829,453 As of September 30, 2015 and December 31, 2014 , the Company’s charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock. During the nine months ended September 30, 2015 , the Company: i. issued 155,173 shares of common stock in connection with stock options exercised; ii. issued 1,608 common shares through the Company’s dividend reinvestment plan; iii. issued 157,779 common shares in connection with stock grants and the conversion of restricted stock units to restricted shares; iv. issued 46,589 common shares in conjunction with the conversion of deferred stock awards; v. withheld 39,800 common shares to satisfy employees’ tax withholding and other liabilities; vi. issued 5,022 common shares through the Employee Stock Purchase Program; and vii. issued 4,500,000 shares of common stock in settlement of the Forward. Any deferred compensation related to the Company’s stock option, restricted stock and restricted stock unit grants during the nine months ended September 30, 2015 is not reflected on the Company’s Condensed Consolidated Balance Sheet as of September 30, 2015 , and will not be reflected until earned as compensation cost. In August 2012, the Company commenced a third continuous equity program (“CEP III”), under which the Company was authorized by its Board of Directors to sell up to $750,000,000 of shares of its common stock from time to time during a 36 -month period, which expired on August 3, 2015. Actual sales depended on a variety of factors determined by the Company, including market conditions, the trading price of the Company’s common stock and determinations by the Company of the appropriate sources of funding for the Company. In conjunction with CEP III, the Company engaged sales agents who received compensation of approximately 1.5% of the gross sales price for shares sold. During the nine months ended September 30, 2015 , the Company had no sales under CEP III. On September 9, 2014, based on a market closing price of $155.83 per share on that date, the Company entered into a forward contract to sell 4,500,000 shares of common stock for an initial forward price of $151.74 per share, net of offering fees and discounts (the "Forward"). The sales price and proceeds achieved by the Company were determined on the dates of settlement, with adjustments during the term of the contract for the Company’s dividends as well as for a daily interest factor that varies with changes in the Fed Funds rate. During the three months ended September 30, 2015 , the Company issued 3,890,725 shares of common stock at a sales price of $146.35 per share, for net proceeds of $569,423,000 , for final settlement of the Forward. In the aggregate, the Company issued 4,500,000 shares for net proceeds of $659,423,000 for settlement of the Forward during the nine months ended September 30, 2015 . |
Investments in Real Estate Enti
Investments in Real Estate Entities | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Real Estate Entities | Investments in Real Estate Entities Investment in Unconsolidated Real Estate Entities As of September 30, 2015 , the Company had investments in five unconsolidated real estate entities, excluding an interest in the Residual JV (as defined in this Form 10-Q), with ownership interest percentages ranging from 20.0% to 31.3% . The Company accounts for its investments in unconsolidated real estate entities under the equity method of accounting. The significant accounting policies of the Company’s unconsolidated real estate entities are consistent with those of the Company in all material respects. During the nine months ended September 30, 2015 , AvalonBay Value Added Fund II, L.P. ("Fund II") sold four communities: • Eaves Plainsboro, located in Plainsboro, NJ, containing 776 apartment homes was sold for $117,000,000 . The Company's share of the gain in accordance with GAAP for the disposition was $9,660,000 . • Eaves Los Alisos, located in Lake Forest, CA, containing 140 apartment homes was sold for $39,500,000 . The Company's share of the gain in accordance with GAAP for the disposition was $4,551,000 . • Captain Parker Arms, located in Lexington, MA, containing 94 apartment homes was sold for $31,600,000 . The Company's share of the gain in accordance with GAAP for the disposition was $3,385,000 . • Eaves Carlsbad, located in Carlsbad, CA, containing 450 apartment homes was sold for $112,000,000 . The Company's share of the gain in accordance with GAAP for the disposition was $12,130,000 . In conjunction with the disposition of these communities during the nine months ended September 30, 2015 , Fund II repaid $69,036,000 of related secured indebtedness in advance of the scheduled maturity dates. This resulted in charges for a prepayment penalty and write-off of deferred financing costs, of which the Company's portion was $1,400,000 , which was reported as a reduction of equity in income (loss) of unconsolidated real estate entities on the accompanying Condensed Consolidated Statements of Comprehensive Income. During the nine months ended September 30, 2015 , the Company received $20,680,000 from the joint venture partner associated with MVP I, LLC, the entity that owns Avalon at Mission Bay North II, upon agreement with the partner to modify the joint venture agreement to eliminate the Company's promoted interest for future return calculations and associated distributions. Prospectively, earnings and distributions will be based on the Company's 25.0% equity interest in the venture. In addition, MVP I, LLC obtained a $103,000,000 , 3.24% fixed rate loan, with a maturity date of July 2025 , and used the proceeds and cash on hand to repay its existing $105,000,000 , variable rate loan which was scheduled to mature in December 2015 , at par. The following is a combined summary of the financial position of the entities accounted for using the equity method as of the dates presented, excluding amounts associated with the Residual JV (dollars in thousands): 9/30/2015 12/31/2014 (unaudited) (unaudited) Assets: Real estate, net $ 1,390,002 $ 1,617,627 Other assets 180,919 72,290 Total assets $ 1,570,921 $ 1,689,917 Liabilities and partners’ capital: Mortgage notes payable and credit facility $ 902,242 $ 980,128 Other liabilities 23,891 24,884 Partners’ capital 644,788 684,905 Total liabilities and partners’ capital $ 1,570,921 $ 1,689,917 The following is a combined summary of the operating results of the entities accounted for using the equity method for the periods presented, excluding amounts associated with the Residual JV (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 (unaudited) (unaudited) Rental and other income $ 43,868 $ 49,388 $ 132,518 $ 154,034 Operating and other expenses (17,910 ) (19,989 ) (52,622 ) (61,680 ) Gain on sale of communities 66,410 327,539 98,899 333,221 Interest expense, net (14,883 ) (22,922 ) (35,694 ) (50,335 ) Depreciation expense (11,213 ) (11,934 ) (35,058 ) (40,214 ) Net income $ 66,272 $ 322,082 $ 108,043 $ 335,026 In conjunction with the formation of Fund II, the Company incurred costs in excess of its equity in the underlying net assets of the respective investments. These costs represent $2,591,000 at September 30, 2015 and $3,880,000 at December 31, 2014 of the respective investment balances. As part of the formation of Fund II, the Company provided to one of the limited partners a guarantee. The guarantee provided that if, upon final liquidation of Fund II, the total amount of all distributions to that partner during the life of Fund II (whether from operating cash flow or property sales) did not equal a minimum of the total capital contributions made by that partner, then the Company would pay the partner an amount equal to the shortfall, but in no event more than 10% of the total capital contributions made by the partner. During the three months ended September 30, 2015 , the limited partner transferred its investment interest to an unrelated third party. The guarantee was not transferred with the investment interest, so the Company has no further obligation under the guarantee. In addition, through subsidiaries, the Company and Equity Residential are members in three limited liability company agreements (collectively, the “Residual JV”). The Company and Equity Residential jointly control the Residual JV and the Company holds a 40.0% economic interest in the assets and liabilities of the Residual JV. During the nine months ended September 30, 2015 , the Company recognized equity in income of unconsolidated real estate entities of $11,630,000 , associated with the settlement of outstanding legal claims against third parties and disposition activity in the Residual JV. Investment in Consolidated Real Estate Entities In conjunction with the development of Avalon Sheepshead Bay, the Company entered into a joint venture agreement to construct a mixed use building that will contain rental apartments, for-sale residential condominium units and related common elements. The Company will own a 70.0% interest in the venture and have all of the rights and obligations associated with the rental apartments, and the venture partner will own the remaining 30.0% interest and have all of the rights and obligations associated with the for-sale condominium units. The Company is responsible for the development and construction of the structure, and is providing a loan to the venture partner for the venture partner's share of costs. As of September 30, 2015 , the Company has a receivable from the venture partner in the amount of $7,340,000 , reported as a component of prepaid expenses and other assets on the Condensed Consolidated Balance Sheets. The loan provided to the venture partner will be repaid with the proceeds received from the sale of the residential condominium units. The venture is considered a variable interest entity, and the Company consolidates its interest in the rental apartments and common areas, and accounts for the for-sale component of the venture as an unconsolidated investment. Expensed Acquisition, Development and Other Pursuit Costs and Impairment of Long-Lived Assets The Company capitalizes pre-development costs incurred in pursuit of new development opportunities for which the Company currently believes future development is probable (“Development Rights”). Future development of these Development Rights is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and the availability of capital. Initial pre-development costs incurred for pursuits for which future development is not yet considered probable are expensed as incurred. In addition, if the status of a Development Right changes, making future development by the Company no longer probable, any capitalized pre-development costs are written off with a charge to expense. The Company expensed costs related to the abandonment of Development Rights as well as costs incurred in pursuing the acquisition of assets or costs incurred pursuing the disposition of assets for which such disposition activity did not occur, in the amounts of $3,391,000 and $406,000 for the three months ended September 30, 2015 and 2014 , respectively, and $5,251,000 and $3,139,000 for the nine months ended September 30, 2015 and 2014 , respectively. These costs are included in expensed acquisition, development, and other pursuit costs, net of recoveries on the accompanying Condensed Consolidated Statements of Comprehensive Income. These costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods. The Company evaluates its real estate and other long-lived assets for impairment when potential indicators of impairment exist. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the long-lived asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Company recognizes an impairment loss to the extent the carrying amount exceeds the estimated fair value of the long-lived asset. Based on periodic tests of recoverability of long-lived assets, the Company did not record any impairment losses for the three and nine months ended September 30, 2015 and 2014 , other than related to the impairment on land held for investment and casualty gains and losses from property damage discussed below. The Company assesses its portfolio of land held for both development and investment for impairment if the intent of the Company changes with respect to either the development of, or the expected holding period for, the land. The Company did not recognize any impairment charges on its investment in land during the three months ended September 30, 2015 . During the nine months ended September 30, 2015 , the Company recognized an impairment charge of $800,000 relating to a parcel of land that was sold during the nine months ended September 30, 2015 , to reduce the Company's basis to the contracted sales price less expected costs to sell. This charge is included in casualty and impairment loss (gain), net on the accompanying Condensed Consolidated Statements of Comprehensive Income. The Company did not recognize any impairment charges on its investment in land for the three and nine months ended September 30, 2014 . The Company also evaluates its unconsolidated investments for other than temporary impairment, considering both the extent and amount by which the carrying value of the investment exceeds the fair value, and the Company’s intent and ability to hold the investment to recover its carrying value. The Company also evaluates its proportionate share of any impairment of assets held by unconsolidated investments. Excluding amounts associated with the Residual JV, there was no impairment loss recognized by any of the Company’s investments in unconsolidated entities during the three and nine months ended September 30, 2015 and 2014 . Casualty Gains and Losses The Company recorded a casualty charge for additional demolition and incident costs related to Edgewater of $658,000 for the three months ended September 30, 2015 , and a net casualty gain of $15,663,000 for the nine months ended September 30, 2015 , which are included in casualty and impairment loss (gain), net on the accompanying Condensed Consolidated Statements of Comprehensive Income. During the nine months ended September 30, 2015 , the Company received $44,142,000 in insurance proceeds, which were partially offset by casualty charges of $21,844,000 to write off the net book value of the building destroyed by the fire at Edgewater, and $6,635,000 to record demolition and additional incident expenses. See discussion in Note 1, "Organization, Basis of Presentation and Significant Accounting Policies, Legal and Other Contingencies," and Part II, Item 1, "Legal Proceedings," for further discussion of the Edgewater fire. During the nine months ended September 30, 2015 , several of the Company's communities in its Northeast markets incurred property and casualty damages from severe winter storms experienced during this time. The Company has recorded an impairment due to a casualty loss of $4,195,000 to recognize the damages from the storms, included in casualty and impairment loss (gain), net on the accompanying Condensed Consolidated Statements of Comprehensive Income. |
Real Estate Disposition Activit
Real Estate Disposition Activities | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Real Estate Disposition Activities | Real Estate Disposition Activities During the nine months ended September 30, 2015 , the Company sold two wholly-owned operating communities, two land parcels and air rights. • Avalon on Stamford Harbor, located in Stamford, CT, containing 323 homes and a marina with 74 boat slips, was sold for $115,500,000 . The Company’s gain on the disposition was $70,936,000 , reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income. • Avalon Lyndhurst, located in Lyndhurst, NJ, containing 328 homes, was sold for $99,000,000 . The Company's gain on the disposition was $35,216,000 , reported in gain on sale of communities on the accompanying Condensed Consolidated Statements of Comprehensive Income. • Two undeveloped land parcels and air rights, representing the right to increase density for future residential development, in the New York Metro region were sold for an aggregate sales price of $23,820,000 , resulting in an aggregate gain of $9,626,000 , reported in gain on sale of real estate on the accompanying Condensed Consolidated Statements of Comprehensive Income. The Company had previously recognized impairment charges of $800,000 during the three months ended March 31, 2015, and $5,933,000 in 2008 for the land parcels. The results of operations for Avalon on Stamford Harbor and Avalon Lyndhurst are included in income from continuing operations on the accompanying Condensed Consolidated Statements of Comprehensive Income. The operations for any real estate assets sold from January 1, 2014 through September 30, 2015 and which were classified as held for sale and discontinued operations as of and for the period ended December 31, 2013, have been presented as income from discontinued operations in the accompanying Condensed Consolidated Statements of Comprehensive Income. The following is a summary of income from discontinued operations for the periods presented (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 (unaudited) (unaudited) Rental income $ — $ — $ — $ 579 Operating and other expenses — — — (269 ) Depreciation expense — — — — Income from discontinued operations $ — $ — $ — $ 310 At September 30, 2015 , the Company had no real estate assets that qualified as held for sale. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company’s reportable operating segments include Established Communities, Other Stabilized Communities, and Development/Redevelopment Communities. Annually as of January 1 st , the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change. In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment. The Company’s segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment’s performance. The Company’s chief operating decision maker is comprised of several members of its executive management team who use net operating income (“NOI”) as the primary financial measure for Established Communities and Other Stabilized Communities. NOI is defined by the Company as total property revenue less direct property operating expenses, including property taxes, and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, investments and investment management expenses, expensed acquisition, development and other pursuit costs, net interest expense, gain (loss) on extinguishment of debt, general and administrative expense, joint venture income (loss), depreciation expense, casualty and impairment loss (gain), net, gain on sale of real estate assets, gain on sale of discontinued operations, income from discontinued operations and net operating income from real estate assets sold or held for sale, not classified as discontinued operations. Although the Company considers NOI a useful measure of a community’s or communities’ operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income. A reconciliation of NOI to net income for the three and nine months ended September 30, 2015 and 2014 is as follows (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Net income $ 206,076 $ 241,001 $ 586,381 $ 554,801 Indirect operating expenses, net of corporate income 13,427 13,173 43,642 36,333 Investments and investment management expense 1,167 1,079 3,274 3,195 Expensed acquisition, development and other pursuit costs, net of recoveries 3,391 406 5,251 3,139 Interest expense, net (1) 43,234 46,376 133,398 132,631 (Gain) loss on extinguishment of debt, net (18,987 ) — (26,736 ) 412 General and administrative expense 10,503 11,290 32,614 30,745 Equity in income of unconsolidated real estate entities (20,554 ) (130,592 ) (68,925 ) (143,527 ) Depreciation expense (1) 120,184 111,836 355,664 328,598 Casualty and impairment loss (gain), net 658 — (10,668 ) — Gain on sale of real estate assets (35,216 ) — (115,798 ) (60,945 ) Gain on sale of discontinued operations — — — (37,869 ) Income from discontinued operations — — — (310 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations (843 ) (4,144 ) (3,634 ) (16,666 ) Net operating income $ 323,040 $ 290,425 $ 934,463 $ 830,537 __________________________________ (1) Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. The following is a summary of NOI from real estate assets sold or held for sale, not classified as discontinued operations, for the periods presented (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Rental income from real estate assets sold or held for sale, not classified as discontinued operations $ 1,353 $ 6,904 $ 6,162 $ 27,499 Operating expenses from real estate assets sold or held for sale, not classified as discontinued operations (510 ) (2,760 ) (2,528 ) (10,833 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations $ 843 $ 4,144 $ 3,634 $ 16,666 The primary performance measure for communities under development or redevelopment depends on the stage of completion. While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget. The following table provides details of the Company’s segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community’s status at the beginning of the given calendar year, or April 1, 2014, when the Company updated its operating segments, primarily to include communities acquired as part of the Archstone Acquisition in its Established Community portfolio. Therefore, each year the composition of communities within each business segment is adjusted. Accordingly, the amounts between years are not directly comparable. Segment information for the three and nine months ended September 30, 2015 and 2014 has been adjusted for the real estate assets that were sold from January 1, 2014 through September 30, 2015 , or otherwise qualify as held for sale and/or discontinued operations as of September 30, 2015 , as described in Note 6, “Real Estate Disposition Activities.” For the three months ended For the nine months ended Total revenue NOI % NOI change from prior year Total NOI % NOI change from prior year Gross real estate (1) For the period ended September 30, 2015 Established New England $ 50,377 $ 32,202 3.1 % $ 147,138 $ 91,026 0.6 % $ 1,487,944 Metro NY/NJ 98,585 68,973 3.7 % 289,288 201,962 3.2 % 3,196,771 Mid-Atlantic 52,839 36,157 0.3 % 156,806 108,125 (0.4 )% 2,172,951 Pacific Northwest 19,493 13,502 5.1 % 57,029 40,532 7.3 % 720,223 Northern California 69,850 53,095 9.5 % 202,508 155,464 10.8 % 2,412,264 Southern California 65,019 43,714 7.9 % 190,513 130,278 9.1 % 2,505,625 Total Established 356,163 247,643 5.1 % 1,043,282 727,387 5.1 % 12,495,778 Other Stabilized 56,571 36,930 N/A 165,335 108,283 N/A 2,106,947 Development / Redevelopment 59,112 38,467 N/A 152,694 98,793 N/A 3,795,868 Land Held for Future Development N/A N/A N/A N/A N/A N/A 553,729 Non-allocated (2) 2,161 N/A N/A 7,714 N/A N/A 50,556 Total $ 474,007 $ 323,040 11.2 % $ 1,369,025 $ 934,463 12.5 % $ 19,002,878 For the period ended September 30, 2014 (3) Established New England $ 46,788 $ 30,258 4.6 % $ 133,732 $ 85,123 0.9 % $ 1,363,271 Metro NY/NJ 93,905 65,839 3.8 % 231,259 161,879 2.4 % 2,297,417 Mid-Atlantic 47,122 32,284 (2.2 )% 73,964 51,947 (3.3 )% 645,872 Pacific Northwest 16,744 11,668 9.4 % 40,437 28,104 6.3 % 499,611 Northern California 64,120 48,805 12.2 % 129,560 99,030 7.8 % 1,401,286 Southern California 63,126 41,655 6.8 % 103,919 71,054 4.5 % 1,224,729 Total Established 331,805 230,509 5.5 % 712,871 497,137 3.0 % 7,432,186 Other Stabilized 45,003 31,926 N/A 370,569 255,350 N/A 6,003,229 Development / Redevelopment 44,310 27,990 N/A 125,215 78,050 N/A 3,639,770 Land Held for Future Development N/A N/A N/A N/A N/A N/A 176,484 Non-allocated (2) 2,503 N/A N/A 8,253 N/A N/A 34,018 Total $ 423,621 $ 290,425 13.6 % $ 1,216,908 $ 830,537 16.5 % $ 17,285,687 __________________________________ (1) Does not include gross real estate assets held for sale of $245,060 as of September 30, 2014 . (2) Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment. (3) Results for the three months ended September 30, 2014 reflect the operating segments updated as of April 1, 2014, which include most stabilized communities acquired as part of the Archstone Acquisition in the Established Communities segment. Results for the nine months ended September 30, 2014 reflect the operating segments determined as of January 1, 2014, which include stabilized communities acquired as part of the Archstone Acquisition in the Other Stabilized segment. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Plans | Stock-Based Compensation Plans Information with respect to stock options granted under the Company’s 1994 Stock Option and Incentive Plan (the “1994 Plan”) and its 2009 Stock Option and Incentive Plan (the “2009 Plan”) is as follows (dollars in thousands, other than per share amounts): 2009 Plan shares Weighted average exercise price per share 1994 Plan shares Weighted average exercise price per share Options Outstanding, December 31, 2014 340,062 $ 122.67 272,402 $ 104.96 Exercised (54,719 ) 121.70 (100,454 ) 90.82 Forfeited — — — — Options Outstanding, September 30, 2015 285,343 $ 122.85 171,948 $ 113.23 Options Exercisable, September 30, 2015 224,246 $ 121.19 171,948 $ 113.23 The Company granted 82,812 restricted stock units with an estimated aggregate compensation cost of $12,340,000 , as part of its stock-based compensation plan, during the nine months ended September 30, 2015 . The amount of restricted stock ultimately earned is based on the total shareholder return metrics related to the Company’s common stock for 53,164 restricted stock units and financial metrics related to operating performance and leverage metrics of the Company for 29,648 restricted stock units. For the portion of the grant for which the award is determined by the total shareholder return of the Company’s common stock, the Company used a Monte Carlo model to assess the compensation cost associated with the restricted stock units. The estimated compensation cost was derived using the following assumptions: baseline share value of $166.23 ; dividend yield of approximately 3.0% ; estimated volatility figures ranging from 14.7% to 17.4% over the life of the plan for the Company using 50% historical volatility and 50% implied volatility; and risk free rates over the life of the plan ranging from 0.07% to 1.09% , resulting in an average estimated fair value per restricted stock unit of $139.18 . For the portion of the grant for which the award is determined by financial metrics, the estimated compensation cost was based on the baseline share value of $166.23 and the Company's estimate of corporate achievement for the financial metrics. During the nine months ended September 30, 2015 , the Company also issued 157,779 shares of restricted stock, of which 95,826 shares related to the conversion of restricted stock units to restricted shares, and the remaining 61,953 shares were new grants with a fair value of $10,721,000 , based on the share price at the grant date. At September 30, 2015 , the Company had 247,888 outstanding unvested restricted shares granted under the Company's restricted stock awards. Restricted stock vesting during the nine months ended September 30, 2015 totaled 98,602 shares, of which 7,907 shares related to the conversion of restricted stock units and 90,695 shares related to restricted stock awards, which had fair values at the grant date ranging from $115.83 to $149.05 per share. The total grant date fair value of shares vested under restricted stock awards was $11,497,000 and $11,143,000 for the nine months ended September 30, 2015 and 2014 , respectively. Total employee stock-based compensation cost recognized in income was $11,255,000 and $9,897,000 for the nine months ended September 30, 2015 and 2014 , respectively, and total capitalized stock-based compensation cost was $7,738,000 and $4,635,000 for the nine months ended September 30, 2015 and 2014 , respectively. At September 30, 2015 , there was a total unrecognized compensation cost of $326,000 for unvested stock options and $25,191,000 for unvested restricted stock and restricted stock units, which does not include estimated forfeitures. The unrecognized compensation cost for unvested stock options and restricted stock and restricted stock units is expected to be recognized over a weighted average period of 0.4 years and 3.7 years, respectively. |
Related Party Arrangements
Related Party Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party Arrangements Unconsolidated Entities The Company manages unconsolidated real estate entities for which it receives asset management, property management, development and redevelopment fee revenue. From these entities, the Company earned fees of $2,161,000 and $2,503,000 during the three months ended September 30, 2015 and 2014 , respectively and $7,714,000 and $8,253,000 during the nine months ended September 30, 2015 and 2014 , respectively. These fees are included in management, development and other fees on the accompanying Condensed Consolidated Statements of Comprehensive Income. In addition, the Company has outstanding receivables associated with its management role of $3,270,000 and $6,868,000 as of September 30, 2015 and December 31, 2014 , respectively. Director Compensation The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock awards in the amount of $293,000 and $250,000 in the three months ended September 30, 2015 and 2014 , respectively, and $842,000 and $750,000 in the nine months ended September 30, 2015 and 2014 , respectively, as a component of general and administrative expense. Deferred compensation relating to these restricted stock grants and deferred stock awards to non-employee directors was $780,000 and $452,000 on September 30, 2015 and December 31, 2014 , respectively. During the nine months ended September 30, 2015 , the Company issued 46,589 shares in conjunction with the conversion of deferred stock awards. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Financial Instruments Carried at Fair Value Derivative Financial Instruments Currently, the Company uses interest rate cap agreements to manage its interest rate risk. These instruments are carried at fair value in the Company’s financial statements. In adjusting the fair value of its derivative contracts for the effect of counterparty nonperformance risk, the Company has considered the impact of its net position with a given counterparty, as well as any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions which have an A or better credit rating by the Standard & Poor’s Ratings Group. As part of its on-going control procedures, the Company monitors the credit ratings of counterparties and the exposure of the Company to any single entity, thus reducing credit risk concentration. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, such as interest rate, term to maturity and volatility, the credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of September 30, 2015 , the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined it is not significant. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. Hedge ineffectiveness did not have a material impact on earnings of the Company for the three and nine months ended September 30, 2015 , or any prior period, and the Company does not anticipate that it will have a material effect in the future. The following table summarizes the consolidated derivative positions at September 30, 2015 (dollars in thousands): Non-designated Hedges Cash Flow Hedges Notional balance $ 726,662 $ 36,935 Weighted average interest rate (1) 1.8 % 2.3 % Weighted average capped interest rate 5.8 % 5.9 % Earliest maturity date Feb 2016 Apr 2019 Latest maturity date Jun 2020 Apr 2019 ____________________________________ (1) Represents the weighted average interest rate on the hedged debt. Excluding derivatives executed to hedge secured debt on communities classified as held for sale, the Company had one derivative designated as a cash flow hedge and 15 derivatives not designated as hedges at September 30, 2015 . Fair value changes for derivatives not in qualifying hedge relationships for the three and nine months ended September 30, 2015 and 2014 were not material. The Company reclassified $1,342,000 and $4,334,000 of deferred losses from accumulated other comprehensive income as a component of interest expense, net, for the three and nine months ended September 30, 2015 , respectively. The Company reclassified $1,546,000 and $4,557,000 of deferred losses from accumulated other comprehensive income as a component of interest expense, net, for the three and nine months ended September 30, 2014 , respectively. The Company anticipates reclassifying approximately $5,493,000 of hedging losses from accumulated other comprehensive loss into earnings within the next 12 months to offset the variability of cash flows of the hedged item during this period. The Company entered into additional derivative positions for hedging purposes in October 2015. See Note 11, "Subsequent Events," for further discussion. Redeemable Noncontrolling Interests The Company provided redemption options (the “Puts”) that allow joint venture partners of the Company to require the Company to purchase their interests in the investment at a guaranteed minimum amount related to three ventures. The Puts are payable in cash. The Company determines the fair value of the Puts based on unobservable inputs considering the assumptions that market participants would make in pricing the obligations, applying a guaranteed rate of return to the joint venture partners’ net capital contribution balances as of period end. Given the significance of the unobservable inputs, the valuations are classified in Level 3 of the fair value hierarchy. The Company issued units of limited partnership interest in DownREITs which provide the DownREIT limited partners the ability to present all or some of their units for redemption for cash as determined by the partnership agreement. Under the DownREIT agreements, for each limited partnership unit, the limited partner is entitled to receive cash in the amount equal to the fair value of the Company’s common stock on or about the date of redemption. In lieu of cash redemption, the Company may elect to exchange such units for an equal number of shares of the Company’s common stock. The limited partnership units in the DownREITs are valued using the market price of the Company’s common stock, a Level 1 price under the fair value hierarchy. Financial Instruments Not Carried at Fair Value Cash and Cash Equivalents Cash and cash equivalent balances are held with various financial institutions within principal protected accounts. The Company monitors credit ratings of these financial institutions and the concentration of cash and cash equivalent balances with any one financial institution and believes the likelihood of realizing material losses related to cash and cash equivalent balances is remote. Cash and cash equivalents are carried at their face amounts, which reasonably approximate their fair values and are Level 1 within the fair value hierarchy. Other Financial Instruments Rents receivable, accounts and construction payable and accrued expenses and other liabilities are carried at their face amounts. Due to their short-term nature, this reasonably approximates their fair values. The Company values its unsecured notes using quoted market prices, a Level 1 price within the fair value hierarchy. The Company values its notes payable and outstanding amounts under the Credit Facility and Term Loan using a discounted cash flow analysis on the expected cash flows of each instrument. This analysis reflects the contractual terms of the instrument, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The process also considers credit valuation adjustments to appropriately reflect the Company’s nonperformance risk. The Company has concluded that the value of its notes payable and amounts outstanding under its Credit Facility and Term Loan are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy. Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis The following table summarizes the classification between the three levels of the fair value hierarchy of the Company’s financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands): Total Fair Value Quoted Prices in Active Markets for Significant Other Observable Significant Unobservable Identical Assets Inputs Inputs Description 9/30/2015 (Level 1) (Level 2) (Level 3) Non-Designated Hedges Interest Rate Caps $ 15 $ — $ 15 $ — Cash Flow Hedges Interest Rate Caps 8 — 8 — Puts (8,765 ) — — (8,765 ) DownREIT units (1,311 ) (1,311 ) — — Indebtedness Unsecured notes (3,375,267 ) (3,375,267 ) — — Mortgage notes payable and unsecured term loan (2,891,388 ) — (2,891,388 ) — Total $ (6,276,708 ) $ (3,376,578 ) $ (2,891,365 ) $ (8,765 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the date on which this Form 10-Q was filed, the date on which these financial statements were issued, and identified the items below for discussion. In October 2015: The Company entered into $400,000,000 of forward interest rate swap agreements to reduce the impact of variability in interest rates on a portion of the Company’s expected debt issuance activity in 2016 and 2017. At maturity of the agreements, the Company expects to cash settle the contracts and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the impact from settling these positions will then be recognized over the life of the issued debt as a yield adjustment. |
Organization, Basis of Presen18
Organization, Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation AvalonBay Communities, Inc. (the “Company,” which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries), is a Maryland corporation that has elected to be treated as a real estate investment trust (“REIT”) for federal income tax purposes under the Internal Revenue Code of 1986 (the “Code”). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. At September 30, 2015 , the Company owned or held a direct or indirect ownership interest in 255 operating apartment communities containing 74,202 apartment homes in 11 states and the District of Columbia, of which eight communities containing 2,675 apartment homes were under reconstruction. In addition, the Company has 27 communities under construction that are expected to contain an aggregate of 8,649 apartment homes when completed. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 33 communities that, if developed as expected, will contain an estimated 9,752 apartment homes. The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s 2014 Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included. Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q. |
Earnings per Common Share | Earnings per Common Share Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share (“EPS”). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company enters into interest rate swap and interest rate cap agreements (collectively, “Hedging Derivatives”) for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivatives transactions for trading or other speculative purposes. The Company assesses the effectiveness of qualifying cash flow and fair value hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of general and administrative expenses. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For the Hedging Derivatives positions that the Company has determined qualify as effective cash flow hedges, the Company has recorded the effective portion of cumulative changes in the fair value of Hedging Derivatives in other comprehensive income. Amounts recorded in other comprehensive income will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of Hedging Derivatives that the Company has determined qualified as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding debt being hedged. |
Legal and Other Contingencies | Legal and Other Contingencies In January 2015, a fire occurred at the Company’s Avalon at Edgewater apartment community located in Edgewater, New Jersey ("Edgewater"). Edgewater consisted of two residential buildings. One building, containing 240 apartment homes, was destroyed. The second building, containing 168 apartment homes, suffered minimal damage and has been repaired. The Company is still assessing its losses resulting from the fire, including liability to third parties who incurred damages as a result of the fire. The Company is also evaluating whether to rebuild and replace the building that was destroyed and does not believe that the outcome of this decision will have a material impact on the Company’s financial condition or results of operations. The Company believes that the fire was caused by sparks from a torch used during repairs being performed by a Company employee who was not a licensed plumber. The Company’s insurers are negotiating and settling claims submitted to the insurers by third parties who incurred property damage and are claiming other losses. Four putative class action lawsuits have been filed against the Company on behalf of Edgewater residents and others who may have been harmed by the fire; these actions have been consolidated by the court into one civil putative class action. In addition, 17 lawsuits representing approximately 133 individual plaintiffs have been filed against the Company. The Company believes that it has meritorious defenses to the extent of damages claimed. Additional lawsuits arising from the fire may be filed. Following the fire, the Company received a civil citation for “failure to notify Fire Department of an active fire” from Bergen County, New Jersey. The Company has decided not to appeal this citation. The Company has also received two citations that were alleged to be serious by the Occupational Safety and Health Administration ("OSHA"); the Company has appealed these citations. It is possible that additional governmental investigations are or may be ongoing. The Company is unable to evaluate the nature and potential materiality of any such investigations or actions. Having incurred applicable deductibles and a self-insured amount equal to 12% of the first $50,000,000 of property damage, the Company currently believes that all of its remaining liability to third parties and all of the Company's additional cost for replacement cost coverage for property damage resulting from the fire will be substantially covered by its insurance policies. However, the Company can give no assurances in this regard and continues to evaluate this matter. See Note 5, "Investments in Real Estate Entities," and Part II, Item 1, "Legal Proceedings," for further discussion of the casualty gains and losses and lawsuits associated with the Edgewater fire. The Company is involved in various other claims and/or administrative proceedings unrelated to the Edgewater fire that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these other outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to amounts in prior years’ financial statements to conform to current year presentations as a result of changes in held for sale classification as described in Note 6, “Real Estate Disposition Activities.” |
Recently Adopted Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, a revenue recognition standard that will result in companies recognizing revenue from contracts when control for the service or product that is the subject of the contract is transferred from the seller to the buyer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers-Deferral of the Effective Date, which defers the effective date of the new revenue recognition standard one year. The guidance is effective in the first quarter of 2018, and the Company is assessing whether the new standard will have a material effect on its financial position or results of operations. In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis, which amends the criteria for determining variable interest entities (“VIEs”), amends the criteria for determining if a service provider possesses a variable interest in a VIE, and eliminates the presumption that a general partner should consolidate a limited partnership. The guidance is effective in the first quarter of 2016 and allows for early adoption. The Company is currently assessing the effect of adoption on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. The guidance requires debt issuance costs related to a recognized debt liability to be presented as a direct deduction from the carrying amount of that debt liability. The new guidance will only impact financial statement presentation. In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The guidance codified the SEC staff's view on the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. The guidance is effective in the first quarter of 2016 and allows for early adoption. The Company does not expect the adoption of this standard to materially impact its consolidated financial statements. |
Organization, Basis of Presen19
Organization, Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of earnings per common share | The Company’s earnings per common share are determined as follows (dollars in thousands, except per share data): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Basic and diluted shares outstanding Weighted average common shares - basic 133,669,584 131,330,078 132,516,847 130,165,873 Weighted average DownREIT units outstanding 7,500 7,500 7,500 7,500 Effect of dilutive securities 1,032,376 568,417 1,139,423 554,627 Weighted average common shares - diluted 134,709,460 131,905,995 133,663,770 130,728,000 Calculation of Earnings per Share - basic Net income attributable to common stockholders $ 206,142 $ 241,100 $ 586,610 $ 540,929 Net income allocated to unvested restricted shares (467 ) (366 ) (1,444 ) (858 ) Net income attributable to common stockholders, adjusted $ 205,675 $ 240,734 $ 585,166 $ 540,071 Weighted average common shares - basic 133,669,584 131,330,078 132,516,847 130,165,873 Earnings per common share - basic $ 1.54 $ 1.83 $ 4.42 $ 4.15 Calculation of Earnings per Share - diluted Net income attributable to common stockholders $ 206,142 $ 241,100 $ 586,610 $ 540,929 Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations 9 9 28 26 Adjusted net income available to common stockholders $ 206,151 $ 241,109 $ 586,638 $ 540,955 Weighted average common shares - diluted 134,709,460 131,905,995 133,663,770 130,728,000 Earnings per common share - diluted $ 1.53 $ 1.83 $ 4.39 $ 4.14 |
Notes Payable, Unsecured Note20
Notes Payable, Unsecured Notes and Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of company's mortgage notes payable, unsecured notes and Credit Facility excluding mortgage notes secured by communities classified as held for sale | The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of September 30, 2015 and December 31, 2014 , as shown in the Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, “Real Estate Disposition Activities”). 9/30/2015 12/31/2014 Fixed rate unsecured notes (1) $ 3,275,000 $ 2,750,000 Term Loan 300,000 250,000 Fixed rate mortgage notes payable - conventional and tax-exempt (2) 1,668,496 2,400,677 Variable rate mortgage notes payable - conventional and tax-exempt (2) 1,045,486 1,047,461 Total mortgage notes payable and unsecured notes 6,288,982 6,448,138 Credit Facility — — Total mortgage notes payable, unsecured notes and Credit Facility $ 6,288,982 $ 6,448,138 _____________________________________ (1) Balances at September 30, 2015 and December 31, 2014 exclude $6,902 and $6,735 of debt discount, respectively, as reflected in unsecured notes, net on the Company’s Condensed Consolidated Balance Sheets. (2) Balances at September 30, 2015 and December 31, 2014 exclude $24,647 and $84,449 of debt premium, respectively, as reflected in mortgage notes payable on the Company’s Condensed Consolidated Balance Sheets. |
Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding | Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at September 30, 2015 are as follows (dollars in thousands): Year Secured notes payments Secured notes maturities Unsecured notes maturities Stated interest rate of unsecured notes 2015 $ 4,295 $ 103,743 $ — — % 2016 16,164 16,256 250,000 5.750 % 2017 17,166 709,991 250,000 5.700 % 2018 16,364 76,673 — — % 2019 5,099 588,428 — — % 2020 4,057 50,825 250,000 6.100 % 400,000 3.625 % 2021 4,017 27,844 250,000 3.950 % 300,000 LIBOR + 1.450% 2022 4,295 — 450,000 2.950 % 2023 4,578 — 350,000 4.200 % 250,000 2.850 % 2024 4,888 — 300,000 3.500 % Thereafter — 1,059,299 525,000 3.450 % $ 80,923 $ 2,633,059 $ 3,575,000 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Summary of changes in equity | The following summarizes the changes in equity for the nine months ended September 30, 2015 (dollars in thousands): Common stock Additional paid-in capital Accumulated earnings less dividends Accumulated other comprehensive loss Total equity Balance at December 31, 2014 $ 1,320 $ 9,354,685 $ (267,085 ) $ (42,515 ) $ 9,046,405 Net income attributable to common stockholders — — 586,610 — 586,610 Cash flow hedge loss reclassified to earnings — — — 4,334 4,334 Change in redemption value of redeemable noncontrolling interest — — 1,722 — 1,722 Dividends declared to common stockholders — — (502,417 ) — (502,417 ) Issuance of common stock, net of withholdings 49 673,302 (1,317 ) — 672,034 Amortization of deferred compensation — 20,765 — — 20,765 Balance at September 30, 2015 $ 1,369 $ 10,048,752 $ (182,487 ) $ (38,181 ) $ 9,829,453 |
Investments in Real Estate En22
Investments in Real Estate Entities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Combined summary of the financial position of the entities accounted for using the equity method | The following is a combined summary of the financial position of the entities accounted for using the equity method as of the dates presented, excluding amounts associated with the Residual JV (dollars in thousands): 9/30/2015 12/31/2014 (unaudited) (unaudited) Assets: Real estate, net $ 1,390,002 $ 1,617,627 Other assets 180,919 72,290 Total assets $ 1,570,921 $ 1,689,917 Liabilities and partners’ capital: Mortgage notes payable and credit facility $ 902,242 $ 980,128 Other liabilities 23,891 24,884 Partners’ capital 644,788 684,905 Total liabilities and partners’ capital $ 1,570,921 $ 1,689,917 |
Combined summary of the operating results of the entities accounted for using the equity method | The following is a combined summary of the operating results of the entities accounted for using the equity method for the periods presented, excluding amounts associated with the Residual JV (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 (unaudited) (unaudited) Rental and other income $ 43,868 $ 49,388 $ 132,518 $ 154,034 Operating and other expenses (17,910 ) (19,989 ) (52,622 ) (61,680 ) Gain on sale of communities 66,410 327,539 98,899 333,221 Interest expense, net (14,883 ) (22,922 ) (35,694 ) (50,335 ) Depreciation expense (11,213 ) (11,934 ) (35,058 ) (40,214 ) Net income $ 66,272 $ 322,082 $ 108,043 $ 335,026 |
Real Estate Disposition Activ23
Real Estate Disposition Activities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of income from discontinued operations | The following is a summary of income from discontinued operations for the periods presented (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 (unaudited) (unaudited) Rental income $ — $ — $ — $ 579 Operating and other expenses — — — (269 ) Depreciation expense — — — — Income from discontinued operations $ — $ — $ — $ 310 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of NOI to net income | A reconciliation of NOI to net income for the three and nine months ended September 30, 2015 and 2014 is as follows (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Net income $ 206,076 $ 241,001 $ 586,381 $ 554,801 Indirect operating expenses, net of corporate income 13,427 13,173 43,642 36,333 Investments and investment management expense 1,167 1,079 3,274 3,195 Expensed acquisition, development and other pursuit costs, net of recoveries 3,391 406 5,251 3,139 Interest expense, net (1) 43,234 46,376 133,398 132,631 (Gain) loss on extinguishment of debt, net (18,987 ) — (26,736 ) 412 General and administrative expense 10,503 11,290 32,614 30,745 Equity in income of unconsolidated real estate entities (20,554 ) (130,592 ) (68,925 ) (143,527 ) Depreciation expense (1) 120,184 111,836 355,664 328,598 Casualty and impairment loss (gain), net 658 — (10,668 ) — Gain on sale of real estate assets (35,216 ) — (115,798 ) (60,945 ) Gain on sale of discontinued operations — — — (37,869 ) Income from discontinued operations — — — (310 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations (843 ) (4,144 ) (3,634 ) (16,666 ) Net operating income $ 323,040 $ 290,425 $ 934,463 $ 830,537 __________________________________ (1) Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. |
Schedule of net operating income from real estate assets sold or held for sale, not classified as discontinued operations | The following is a summary of NOI from real estate assets sold or held for sale, not classified as discontinued operations, for the periods presented (dollars in thousands): For the three months ended For the nine months ended 9/30/2015 9/30/2014 9/30/2015 9/30/2014 Rental income from real estate assets sold or held for sale, not classified as discontinued operations $ 1,353 $ 6,904 $ 6,162 $ 27,499 Operating expenses from real estate assets sold or held for sale, not classified as discontinued operations (510 ) (2,760 ) (2,528 ) (10,833 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations $ 843 $ 4,144 $ 3,634 $ 16,666 |
Schedule of details of segment information | For the three months ended For the nine months ended Total revenue NOI % NOI change from prior year Total NOI % NOI change from prior year Gross real estate (1) For the period ended September 30, 2015 Established New England $ 50,377 $ 32,202 3.1 % $ 147,138 $ 91,026 0.6 % $ 1,487,944 Metro NY/NJ 98,585 68,973 3.7 % 289,288 201,962 3.2 % 3,196,771 Mid-Atlantic 52,839 36,157 0.3 % 156,806 108,125 (0.4 )% 2,172,951 Pacific Northwest 19,493 13,502 5.1 % 57,029 40,532 7.3 % 720,223 Northern California 69,850 53,095 9.5 % 202,508 155,464 10.8 % 2,412,264 Southern California 65,019 43,714 7.9 % 190,513 130,278 9.1 % 2,505,625 Total Established 356,163 247,643 5.1 % 1,043,282 727,387 5.1 % 12,495,778 Other Stabilized 56,571 36,930 N/A 165,335 108,283 N/A 2,106,947 Development / Redevelopment 59,112 38,467 N/A 152,694 98,793 N/A 3,795,868 Land Held for Future Development N/A N/A N/A N/A N/A N/A 553,729 Non-allocated (2) 2,161 N/A N/A 7,714 N/A N/A 50,556 Total $ 474,007 $ 323,040 11.2 % $ 1,369,025 $ 934,463 12.5 % $ 19,002,878 For the period ended September 30, 2014 (3) Established New England $ 46,788 $ 30,258 4.6 % $ 133,732 $ 85,123 0.9 % $ 1,363,271 Metro NY/NJ 93,905 65,839 3.8 % 231,259 161,879 2.4 % 2,297,417 Mid-Atlantic 47,122 32,284 (2.2 )% 73,964 51,947 (3.3 )% 645,872 Pacific Northwest 16,744 11,668 9.4 % 40,437 28,104 6.3 % 499,611 Northern California 64,120 48,805 12.2 % 129,560 99,030 7.8 % 1,401,286 Southern California 63,126 41,655 6.8 % 103,919 71,054 4.5 % 1,224,729 Total Established 331,805 230,509 5.5 % 712,871 497,137 3.0 % 7,432,186 Other Stabilized 45,003 31,926 N/A 370,569 255,350 N/A 6,003,229 Development / Redevelopment 44,310 27,990 N/A 125,215 78,050 N/A 3,639,770 Land Held for Future Development N/A N/A N/A N/A N/A N/A 176,484 Non-allocated (2) 2,503 N/A N/A 8,253 N/A N/A 34,018 Total $ 423,621 $ 290,425 13.6 % $ 1,216,908 $ 830,537 16.5 % $ 17,285,687 __________________________________ (1) Does not include gross real estate assets held for sale of $245,060 as of September 30, 2014 . (2) Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of information with respect to stock options granted | Information with respect to stock options granted under the Company’s 1994 Stock Option and Incentive Plan (the “1994 Plan”) and its 2009 Stock Option and Incentive Plan (the “2009 Plan”) is as follows (dollars in thousands, other than per share amounts): 2009 Plan shares Weighted average exercise price per share 1994 Plan shares Weighted average exercise price per share Options Outstanding, December 31, 2014 340,062 $ 122.67 272,402 $ 104.96 Exercised (54,719 ) 121.70 (100,454 ) 90.82 Forfeited — — — — Options Outstanding, September 30, 2015 285,343 $ 122.85 171,948 $ 113.23 Options Exercisable, September 30, 2015 224,246 $ 121.19 171,948 $ 113.23 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of summary of consolidated Hedging Derivatives, excluding derivatives executed to hedge debt on communities classified as held for sale | The following table summarizes the consolidated derivative positions at September 30, 2015 (dollars in thousands): Non-designated Hedges Cash Flow Hedges Notional balance $ 726,662 $ 36,935 Weighted average interest rate (1) 1.8 % 2.3 % Weighted average capped interest rate 5.8 % 5.9 % Earliest maturity date Feb 2016 Apr 2019 Latest maturity date Jun 2020 Apr 2019 ____________________________________ (1) Represents the weighted average interest rate on the hedged debt. |
Schedule of summary of classification between the three levels of the fair value hierarchy of the Company's financial instruments measured at fair value on a recurring basis | The following table summarizes the classification between the three levels of the fair value hierarchy of the Company’s financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands): Total Fair Value Quoted Prices in Active Markets for Significant Other Observable Significant Unobservable Identical Assets Inputs Inputs Description 9/30/2015 (Level 1) (Level 2) (Level 3) Non-Designated Hedges Interest Rate Caps $ 15 $ — $ 15 $ — Cash Flow Hedges Interest Rate Caps 8 — 8 — Puts (8,765 ) — — (8,765 ) DownREIT units (1,311 ) (1,311 ) — — Indebtedness Unsecured notes (3,375,267 ) (3,375,267 ) — — Mortgage notes payable and unsecured term loan (2,891,388 ) — (2,891,388 ) — Total $ (6,276,708 ) $ (3,376,578 ) $ (2,891,365 ) $ (8,765 ) |
Organization, Basis of Presen27
Organization, Basis of Presentation and Significant Accounting Policies (Details) | Sep. 30, 2015statecommunityhome |
Organization and Basis of Presentation | |
Number of operating apartment communities | community | 255 |
Number of apartment homes included in operating apartment communities owned | 74,202 |
Number of states where operating apartment communities owned are located | state | 11 |
Number of communities with apartments under reconstruction | community | 8 |
Number of apartment homes under reconstruction | 2,675 |
Number of owned communities under construction | community | 27 |
Expected number of apartment homes under construction | 8,649 |
Communities under development rights | community | 33 |
Estimated number of apartment homes in communities to be developed | 9,752 |
Organization, Basis of Presen28
Organization, Basis of Presentation and Significant Accounting Policies (Details 2) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)communityhomebuilding$ / sharesshares | Sep. 30, 2014USD ($)$ / sharesshares | Sep. 30, 2015USD ($)communityClaimhomeCitationplaintiffbuilding$ / sharesshares | Sep. 30, 2014USD ($)$ / sharesshares | |
Loss Contingencies [Line Items] | ||||
Number of Real Estate Properties | community | 255 | 255 | ||
Number of apartment homes included in operating apartment communities owned | home | 74,202 | 74,202 | ||
Basic and diluted shares outstanding | ||||
Weighted average common shares - basic | shares | 133,669,584 | 131,330,078 | 132,516,847 | 130,165,873 |
Weighted average DownREIT units outstanding (in shares) | shares | 7,500 | 7,500 | 7,500 | 7,500 |
Effect of dilutive securities (in shares) | shares | 1,032,376 | 568,417 | 1,139,423 | 554,627 |
Weighted average common shares - diluted | shares | 134,709,460 | 131,905,995 | 133,663,770 | 130,728,000 |
Calculation of Earnings per Share - basic | ||||
Net income attributable to common stockholders | $ 206,142 | $ 241,100 | $ 586,610 | $ 540,929 |
Net income allocated to unvested restricted shares | (467) | (366) | (1,444) | (858) |
Net income attributable to common stockholders, adjusted | $ 205,675 | $ 240,734 | $ 585,166 | $ 540,071 |
Weighted average common shares - basic | shares | 133,669,584 | 131,330,078 | 132,516,847 | 130,165,873 |
Earnings per common share - basic (in dollars per share) | $ / shares | $ 1.54 | $ 1.83 | $ 4.42 | $ 4.15 |
Calculation of Earnings per Share - diluted | ||||
Net income attributable to common stockholders | $ 206,142 | $ 241,100 | $ 586,610 | $ 540,929 |
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations | 9 | 9 | 28 | 26 |
Adjusted net income available to common stockholders | $ 206,151 | $ 241,109 | $ 586,638 | $ 540,955 |
Weighted average common shares - diluted | shares | 134,709,460 | 131,905,995 | 133,663,770 | 130,728,000 |
Earnings per common share - diluted (in dollars per share) | $ / shares | $ 1.53 | $ 1.83 | $ 4.39 | $ 4.14 |
Options to purchase shares of common stock excluded from computation of earnings per share amount (in shares) | shares | 1,499 | |||
Estimated forfeiture rate of stock options (as a percent) | 1.00% | |||
Avalon at Edgewater [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of Real Estate Properties | building | 2 | 2 | ||
Number Of Real Estate Properties, Uninhabitable | building | 1 | 1 | ||
Number Of Units In Real Estate Property, Uninhabitable | home | 240 | 240 | ||
Number of apartment homes included in operating apartment communities owned | home | 168 | 168 | ||
Loss Contingency New Class Action Claims Filed Number | Claim | 4 | |||
Loss Contingency Consolidated Class Action Claims | Claim | 1 | |||
Loss Contingency, New Claims Filed, Number | Claim | 17 | |||
Loss Contingency, Number of Plaintiffs | plaintiff | 133 | |||
Loss Contingency, OSHA Citations | Citation | 2 | |||
Loss Contingency, Insurance, Percentage Of Policy Amount Company Is Obligated To Fund | 12.00% | 12.00% | ||
Loss Contingency, Insurance, Policy Amount For Calculating Self-Insurance Liability | $ 50,000 | $ 50,000 |
Interest Capitalized (Details)
Interest Capitalized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Interest Capitalized | ||||
Capitalized interest during the development and redevelopment of real estate assets | $ 20,356 | $ 15,989 | $ 59,186 | $ 54,294 |
Notes Payable, Unsecured Note30
Notes Payable, Unsecured Notes and Credit Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Notes Payable, Unsecured Notes and Credit Facility | |||
Total notes payable and unsecured notes | $ 6,288,982 | $ 6,448,138 | |
Credit Facility | 0 | 0 | |
Total mortgage notes payable, unsecured notes and Credit Facility | 6,288,982 | 6,448,138 | |
Unsecured notes | |||
Notes Payable, Unsecured Notes and Credit Facility | |||
Fixed rate notes | [1] | 3,275,000 | 2,750,000 |
Total notes payable and unsecured notes | 3,575,000 | ||
Amount of debt discount | 6,902 | 6,735 | |
Term Loan | |||
Notes Payable, Unsecured Notes and Credit Facility | |||
Variable rate notes | 300,000 | 250,000 | |
Secured notes | |||
Notes Payable, Unsecured Notes and Credit Facility | |||
Fixed rate notes | [2] | 1,668,496 | 2,400,677 |
Variable rate notes | 1,045,486 | 1,047,461 | |
Total notes payable and unsecured notes | 2,633,059 | ||
Amount of debt premium | 24,647 | 84,449 | |
Credit Facility | |||
Notes Payable, Unsecured Notes and Credit Facility | |||
Credit Facility | $ 0 | $ 0 | |
[1] | Balances at September 30, 2015 and December 31, 2014 exclude $6,902 and $6,735 of debt discount, respectively, as reflected in unsecured notes, net on the Company’s Condensed Consolidated Balance Sheets. | ||
[2] | Balances at September 30, 2015 and December 31, 2014 exclude $24,647 and $84,449 of debt premium, respectively, as reflected in mortgage notes payable on the Company’s Condensed Consolidated Balance Sheets. |
Notes Payable, Unsecured Note31
Notes Payable, Unsecured Notes and Credit Facility (Details 2) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Jul. 31, 2015USD ($) | Jun. 30, 2015USD ($) | May. 31, 2015USD ($) | Apr. 30, 2015USD ($)communityloan | Sep. 30, 2015USD ($)community | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)communityextension | Sep. 30, 2014USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Number of operating apartment communities | community | 255 | 255 | ||||||||
Gains (Losses) on Extinguishment of Debt | $ 18,987,000 | $ 0 | $ 26,736,000 | $ (412,000) | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.45% | |||||||||
Variable rate unsecured credit facility | 0 | 0 | $ 0 | |||||||
Mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Mortgage notes payable held by wholly owned subsidiaries guaranteed by the Company | 234,500,000 | 234,500,000 | ||||||||
Unsecured Notes 3.45 Percent [Member] | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Principal amount of notes issued | $ 525,000,000 | |||||||||
Proceeds from Issuance of Debt | $ 520,653,000 | |||||||||
Variable Rate Unsecured Term Loan [Member] | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Additional amount with option to draw | $ 50,000,000 | |||||||||
Principal amount of notes issued | $ 300,000,000 | |||||||||
Notes payable maturing in 2015 | Mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Repayments of secured mortgages | $ 481,582,000 | |||||||||
Mortgage Loans on Real Estate, Number of Loans | loan | 8 | |||||||||
Number of operating apartment communities | community | 8 | |||||||||
Current interest rate (as a percent) | 3.12% | |||||||||
Gains (Losses) on Extinguishment of Debt | $ 8,724,000 | |||||||||
Notes Payable Maturities 2041 [Member] | Mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Current interest rate (as a percent) | 7.50% | |||||||||
Gains (Losses) on Extinguishment of Debt | $ (455,000) | |||||||||
Repayments of Debt | $ 15,778,000 | |||||||||
Notes Payable Maturities 2027 [Member] | Mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Current interest rate (as a percent) | 7.84% | |||||||||
Gains (Losses) on Extinguishment of Debt | $ (263,000) | |||||||||
Repayments of Debt | $ 7,805,000 | |||||||||
Notes payable maturing in 2019 | Mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Current interest rate (as a percent) | 5.95% | |||||||||
Gains (Losses) on Extinguishment of Debt | $ (259,000) | |||||||||
Repayments of Debt | $ 74,531,000 | |||||||||
Notes Payable Maturities 2053 [Member] | Mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Repayments of secured mortgages | $ 140,346,000 | |||||||||
Current interest rate (as a percent) | 5.56% | |||||||||
Gains (Losses) on Extinguishment of Debt | $ 18,987,000 | |||||||||
Prepayment Penalty | 11,228,000 | |||||||||
Debt Instrument, Unamortized Premium, Write-off | $ 30,215,000 | |||||||||
Variable rate unsecured credit facility | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Available borrowing capacity | 1,300,000,000 | $ 1,300,000,000 | ||||||||
Line of credit facility, extension period | 1 year | |||||||||
Number of extension options | extension | 2 | |||||||||
Extension period under each option | 6 months | |||||||||
Extension fee | $ 1,950,000 | |||||||||
Period of borrowing rate assumed | 1 month | |||||||||
Annual facility fee | $ 1,950,000 | |||||||||
Outstanding balance of letters of credit | 43,580,000 | 43,580,000 | 49,407,000 | |||||||
Variable rate unsecured credit facility | 0 | 0 | $ 0 | |||||||
Net carrying value of apartment communities and improved land parcels securing debt | $ 3,363,527,000 | $ 3,363,527,000 | ||||||||
Fixed rate mortgage notes payable | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Weighted average interest rate, debt (as a percent) | 4.70% | 4.70% | 4.50% | |||||||
Variable rate mortgage notes payable, unsecured term loan and Credit Facility | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Weighted average interest rate, debt (as a percent) | 1.70% | 1.70% | 1.80% | |||||||
LIBOR | Variable Rate Unsecured Term Loan [Member] | Unsecured notes | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Debt instrument variable rate | LIBOR | |||||||||
Debt instrument, basis spread on variable rate (as a percent) | 1.45% | |||||||||
LIBOR | Secured Mortgage | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Debt instrument variable rate | LIBOR | |||||||||
LIBOR | Variable rate unsecured credit facility | ||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||||
Current interest rate (as a percent) | 1.14% | 1.14% | ||||||||
Debt instrument, basis spread on variable rate (as a percent) | 0.95% |
Notes Payable, Unsecured Note32
Notes Payable, Unsecured Notes and Credit Facility (Details 3) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2015 | Apr. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | May. 31, 2015 | Dec. 31, 2014 | |
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Gains (Losses) on Extinguishment of Debt | $ 18,987 | $ 0 | $ 26,736 | $ (412) | ||||
Mortgage notes payable and unsecured notes | 6,288,982 | 6,288,982 | $ 6,448,138 | |||||
Stated interest rate of unsecured notes (as a percent) | 3.45% | |||||||
Secured notes | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 80,923 | 80,923 | ||||||
Mortgage notes payable and unsecured notes | 2,633,059 | 2,633,059 | ||||||
Secured notes | Notes payable maturing in 2015 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Gains (Losses) on Extinguishment of Debt | $ 8,724 | |||||||
Secured notes payments | 4,295 | 4,295 | ||||||
Mortgage notes payable and unsecured notes | 103,743 | 103,743 | ||||||
Secured notes | Notes Payable Maturities 2016 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 16,164 | 16,164 | ||||||
Mortgage notes payable and unsecured notes | 16,256 | 16,256 | ||||||
Secured notes | Notes Payable Maturities 2017 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 17,166 | 17,166 | ||||||
Mortgage notes payable and unsecured notes | 709,991 | 709,991 | ||||||
Secured notes | Notes Payable Maturities 2018 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 16,364 | 16,364 | ||||||
Mortgage notes payable and unsecured notes | 76,673 | 76,673 | ||||||
Secured notes | Notes payable maturing in 2019 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Gains (Losses) on Extinguishment of Debt | $ (259) | |||||||
Secured notes payments | 5,099 | 5,099 | ||||||
Mortgage notes payable and unsecured notes | 588,428 | 588,428 | ||||||
Secured notes | Notes Payable Maturities 2020 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 4,057 | 4,057 | ||||||
Mortgage notes payable and unsecured notes | 50,825 | 50,825 | ||||||
Secured notes | Notes Payable Maturities 2021 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 4,017 | 4,017 | ||||||
Mortgage notes payable and unsecured notes | 27,844 | 27,844 | ||||||
Secured notes | Notes payable maturing in 2022 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 4,295 | 4,295 | ||||||
Secured notes | Notes payable maturing in 2023 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 4,578 | 4,578 | ||||||
Secured notes | Notes Payable Maturities 2024 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Secured notes payments | 4,888 | 4,888 | ||||||
Secured notes | Notes payable with maturities after 2023 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | 1,059,299 | 1,059,299 | ||||||
Secured notes | Notes Payable Maturities 2027 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Gains (Losses) on Extinguishment of Debt | $ (263) | |||||||
Unsecured notes | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | 3,575,000 | 3,575,000 | ||||||
Unsecured notes | Notes Payable Maturities 2016 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 250,000 | $ 250,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 5.75% | 5.75% | ||||||
Unsecured notes | Notes Payable Maturities 2017 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 250,000 | $ 250,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 5.70% | 5.70% | ||||||
Unsecured notes | Notes Payable 6.100 Percent Maturities 2020 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 250,000 | $ 250,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 6.10% | 6.10% | ||||||
Unsecured notes | Notes Payable 3.625 Percent Maturities 2020 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 400,000 | $ 400,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 3.625% | 3.625% | ||||||
Unsecured notes | Notes payable maturing in 2021 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 250,000 | $ 250,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 3.95% | 3.95% | ||||||
Unsecured notes | Term Loan | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 300,000 | $ 300,000 | ||||||
Unsecured notes | Term Loan | LIBOR | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Debt instrument variable rate | LIBOR | |||||||
Debt instrument, basis spread on variable rate (as a percent) | 1.45% | |||||||
Unsecured notes | Notes payable maturing in 2022 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 450,000 | $ 450,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 2.95% | 2.95% | ||||||
Unsecured notes | Notes payable maturing in 2023 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 350,000 | $ 350,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 4.20% | 4.20% | ||||||
Unsecured notes | Notes Payable 2.850 Maturities 2023 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 250,000 | $ 250,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 2.85% | 2.85% | ||||||
Unsecured notes | Notes Payable Maturities 2024 [Member] | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 300,000 | $ 300,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 3.50% | 3.50% | ||||||
Unsecured notes | Notes payable with maturities after 2023 | ||||||||
Notes Payable, Unsecured Notes and Credit Facility | ||||||||
Mortgage notes payable and unsecured notes | $ 525,000 | $ 525,000 | ||||||
Stated interest rate of unsecured notes (as a percent) | 3.45% | 3.45% |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in equity | ||||
Beginning Balance | $ 9,046,405 | |||
Net income attributable to common stockholders | $ 206,142 | $ 241,100 | 586,610 | $ 540,929 |
Cash flow hedge loss reclassified to earnings | 1,342 | $ 1,546 | 4,334 | $ 4,557 |
Change in redemption value of redeemable noncontrolling interest | 1,722 | |||
Dividends declared to common stockholders | (502,417) | |||
Issuance of common stock, net of withholdings | 672,034 | |||
Amortization of deferred compensation | 20,765 | |||
Ending Balance | 9,829,453 | 9,829,453 | ||
Common stock | ||||
Changes in equity | ||||
Beginning Balance | 1,320 | |||
Issuance of common stock, net of withholdings | 49 | |||
Ending Balance | 1,369 | 1,369 | ||
Additional paid-in capital | ||||
Changes in equity | ||||
Beginning Balance | 9,354,685 | |||
Issuance of common stock, net of withholdings | 673,302 | |||
Amortization of deferred compensation | 20,765 | |||
Ending Balance | 10,048,752 | 10,048,752 | ||
Accumulated earnings less dividends | ||||
Changes in equity | ||||
Beginning Balance | (267,085) | |||
Net income attributable to common stockholders | 586,610 | |||
Change in redemption value of redeemable noncontrolling interest | 1,722 | |||
Dividends declared to common stockholders | (502,417) | |||
Issuance of common stock, net of withholdings | (1,317) | |||
Ending Balance | (182,487) | (182,487) | ||
Accumulated other comprehensive loss | ||||
Changes in equity | ||||
Beginning Balance | (42,515) | |||
Cash flow hedge loss reclassified to earnings | 4,334 | |||
Ending Balance | $ (38,181) | $ (38,181) |
Equity (Details 2)
Equity (Details 2) - USD ($) | Sep. 09, 2014 | Aug. 31, 2012 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Class of Stock [Line Items] | ||||||
Common stock, shares authorized | 280,000,000 | 280,000,000 | 280,000,000 | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||
Common stock shares issued in connection with stock options exercised | 155,173 | |||||
Common stock issued through the dividend reinvestment plan (in shares) | 1,608 | 1,868 | ||||
Stock issued in connection with stock grants (in shares) | 157,779 | 113,822 | ||||
Number of shares of stock grants withheld | 39,800 | 53,983 | ||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 5,022 | |||||
Maximum value of shares of common stock that can be sold (in dollars) | $ 750,000,000 | |||||
Period during which common stock can be sold | 36 months | |||||
Percentage of compensation received by sales agent | 1.50% | |||||
Common stock shares issued | 0 | 0 | ||||
Issuance of common stock | $ 674,631,000 | $ 340,091,000 | ||||
Non Employee Director [Member] | Deferred Compensation, Share-based Payments [Member] | ||||||
Class of Stock [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Conversion of Shares | 46,589 | |||||
Forward Contracts [Member] | ||||||
Class of Stock [Line Items] | ||||||
Forward Contract Indexed to Issuer's Equity, Shares | 4,500,000 | 4,500,000 | ||||
Share Price | $ 155.83 | |||||
Forward Contract Indexed to Issuer's Equity, Forward Rate Per Share | $ 151.74 | |||||
Forward Contract Indexed to Issuers Equity, Shares Issued in Settlement | 3,890,725 | |||||
Forward Contract Indexed To Issuers Equity, Settlement Price Per Share | $ 146.35 | |||||
Issuance of common stock | $ 569,423,000 | $ 659,423,000 |
Investments in Real Estate En35
Investments in Real Estate Entities (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)entity | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)communityhomeentity | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Investment in Real Estate Entities | |||||
Number of Apartment Communities Sold | community | 2 | ||||
Gain on sale of communities | $ 66,410,000 | $ 327,539,000 | $ 98,899,000 | $ 333,221,000 | |
Gains (Losses) on Extinguishment of Debt | 18,987,000 | $ 0 | 26,736,000 | $ (412,000) | |
Long-term Debt | $ 6,288,982,000 | $ 6,288,982,000 | $ 6,448,138,000 | ||
Unconsolidated real estate entities | |||||
Investment in Real Estate Entities | |||||
Number of unconsolidated real estate entities | entity | 5 | 5 | |||
Unconsolidated real estate entities | Minimum | |||||
Investment in Real Estate Entities | |||||
Ownership interest percentage | 20.00% | 20.00% | |||
Unconsolidated real estate entities | Maximum | |||||
Investment in Real Estate Entities | |||||
Ownership interest percentage | 31.30% | 31.30% | |||
Avalon Bay Value Added Fund II LP [Member] | |||||
Investment in Real Estate Entities | |||||
Number of Apartment Communities Sold | community | 4 | ||||
Repayments of secured mortgages | $ 69,036,000 | ||||
Gains (Losses) on Extinguishment of Debt | $ 1,400,000 | ||||
Avalon Bay Value Added Fund II LP [Member] | Eaves Plainsboro [Member] | |||||
Investment in Real Estate Entities | |||||
Number of apartment homes sold | home | 776 | ||||
Proceeds from sale of real estate | $ 117,000,000 | ||||
Gain on sale of communities | $ 9,660,000 | ||||
Avalon Bay Value Added Fund II LP [Member] | Eaves Los Alisos [Member] | |||||
Investment in Real Estate Entities | |||||
Number of apartment homes sold | home | 140 | ||||
Proceeds from sale of real estate | $ 39,500,000 | ||||
Gain on sale of communities | $ 4,551,000 | ||||
Avalon Bay Value Added Fund II LP [Member] | Captain Parker Arms [Member] | |||||
Investment in Real Estate Entities | |||||
Number of apartment homes sold | home | 94 | ||||
Proceeds from sale of real estate | $ 31,600,000 | ||||
Gain on sale of communities | $ 3,385,000 | ||||
Avalon Bay Value Added Fund II LP [Member] | Eaves Carlsbad [Member] | |||||
Investment in Real Estate Entities | |||||
Number of apartment homes sold | home | 450 | ||||
Proceeds from sale of real estate | $ 112,000,000 | ||||
Gain on sale of communities | 12,130,000 | ||||
MVPI LLC [Member] | |||||
Investment in Real Estate Entities | |||||
Payments for (Proceeds from) Other Real Estate Partnerships | $ 20,680,000 | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 25.00% | 25.00% | |||
Long-term Debt | $ 103,000,000 | $ 103,000,000 | |||
Fixed rate (as a percent) | 3.24% | 3.24% | |||
Secured notes | MVPI LLC [Member] | |||||
Investment in Real Estate Entities | |||||
Repayments of secured mortgages | $ 105,000,000 |
Investments in Real Estate En36
Investments in Real Estate Entities (Details 2) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)agreement | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)agreement | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Assets: | |||||
Real estate, net | $ 1,390,002,000 | $ 1,390,002,000 | $ 1,617,627,000 | ||
Other assets | 180,919,000 | 180,919,000 | 72,290,000 | ||
Total assets | 1,570,921,000 | 1,570,921,000 | 1,689,917,000 | ||
Liabilities and partners' capital: | |||||
Mortgage notes payable and credit facility | 902,242,000 | 902,242,000 | 980,128,000 | ||
Other liabilities | 23,891,000 | 23,891,000 | 24,884,000 | ||
Partners' capital | 644,788,000 | 644,788,000 | 684,905,000 | ||
Total liabilities and partners' capital | 1,570,921,000 | 1,570,921,000 | 1,689,917,000 | ||
Combined summary of the operating results of the accounted for using the equity method | |||||
Rental and other income | 43,868,000 | $ 49,388,000 | 132,518,000 | $ 154,034,000 | |
Operating and other expenses | (17,910,000) | (19,989,000) | (52,622,000) | (61,680,000) | |
Gain on sale of communities | 66,410,000 | 327,539,000 | 98,899,000 | 333,221,000 | |
Interest expense, net | (14,883,000) | (22,922,000) | (35,694,000) | (50,335,000) | |
Depreciation expense | (11,213,000) | (11,934,000) | (35,058,000) | (40,214,000) | |
Net income | 66,272,000 | 322,082,000 | 108,043,000 | 335,026,000 | |
Equity in income of unconsolidated real estate entities | 20,554,000 | 130,592,000 | 68,925,000 | 143,527,000 | |
Expensed acquisition, development and other pursuit costs, net of recoveries | 3,391,000 | 406,000 | 5,251,000 | 3,139,000 | |
Impairment of Real Estate | 658,000 | 0 | (10,668,000) | 0 | |
Other than Temporary Impairment Losses, Investments | 0 | $ 0 | 0 | $ 0 | |
Real Estate Investment Property, Net | 13,694,690,000 | 13,694,690,000 | 13,219,140,000 | ||
Fund II | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Costs in excess of equity in underlying net assets of the respective investments | $ 2,591,000 | $ 2,591,000 | $ 3,880,000 | ||
Guarantor Obligations, Liquidation Proceeds, Percentage | 10.00% | ||||
Residual Joint Venture [Member] | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Number of Limited Liability Company Agreements | agreement | 3 | 3 | |||
Equity in income of unconsolidated real estate entities | $ 11,630,000 | ||||
Sheepshead Bay [Member] | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 70.00% | ||||
Variable Interest Entity, Ownership Interest by Partner | 30.00% | ||||
Due from Related Parties | $ 7,340,000 | $ 7,340,000 | |||
Avalon Mills [Member] | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Impairment of Real Estate | 800,000 | ||||
Avalon at Edgewater [Member] | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Impairment of Real Estate | 658,000 | (15,663,000) | |||
Insurance Proceeds | 44,142,000 | ||||
Real Estate Investment Property, Net | $ 21,844,000 | 21,844,000 | |||
Casualty Loss | 6,635,000 | ||||
New England [Member] | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Impairment of Real Estate | $ 4,195,000 | ||||
Residual Joint Venture [Member] | |||||
Combined summary of the operating results of the accounted for using the equity method | |||||
Ownership Interest Held by Subsidiaries | 40.00% | 40.00% |
Real Estate Disposition Activ37
Real Estate Disposition Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($)communityitem | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)communityland_parcelhomeitem | Sep. 30, 2014USD ($) | Dec. 31, 2008USD ($) | |
Summary of income from discontinued operations | |||||
Number of Apartment Communities Sold | community | 2 | ||||
Number of Land Parcels Sold | land_parcel | 2 | ||||
Proceeds from Sale of Real Estate | $ 232,415 | $ 186,651 | |||
Gain on sale of communities | 146,745 | 229,200 | |||
Gain on sale of real estate | $ 0 | $ 0 | 9,647 | 0 | |
Impairment of Real Estate | $ 658 | $ 0 | $ (10,668) | $ 0 | |
Number Of Communities Held For Sale | community | 0 | 0 | |||
Avalon Lyndhurst [Member] | |||||
Summary of income from discontinued operations | |||||
Apartment homes | home | 328 | ||||
Proceeds from Sale of Real Estate | $ 99,000 | ||||
Gain on sale of communities | 35,216 | ||||
Other Real Estate Sales [Member] | |||||
Summary of income from discontinued operations | |||||
Proceeds from Sale of Real Estate | 23,820 | ||||
Gain on sale of real estate | $ 9,626 | ||||
Avalon on Stamford Harbor [Member] | |||||
Summary of income from discontinued operations | |||||
Apartment homes | home | 323 | ||||
Number of Boat Slips in Marina Communities | item | 74 | 74 | |||
Proceeds from Sale of Real Estate | $ 115,500 | ||||
Gain on sale of communities | 70,936 | ||||
Other Real Estate Sales [Member] | |||||
Summary of income from discontinued operations | |||||
Impairment of Real Estate | $ (5,933) | ||||
Avalon Mills [Member] | |||||
Summary of income from discontinued operations | |||||
Impairment of Real Estate | $ 800 |
Real Estate Disposition Activ38
Real Estate Disposition Activities (Details 2) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)community | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)community | Sep. 30, 2014USD ($) | |
Summary of income from discontinued operations | ||||
Rental income | $ 0 | $ 0 | $ 0 | $ 579 |
Operating and other expenses | 0 | 0 | 0 | (269) |
Depreciation expense | 0 | 0 | 0 | 0 |
Income from discontinued operations | $ 0 | $ 0 | $ 0 | $ 310 |
Number Of Communities Held For Sale | community | 0 | 0 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Reconciliation of NOI to net income | |||||
Net income | $ 206,076 | $ 241,001 | $ 586,381 | $ 554,801 | |
Indirect operating expenses, net of corporate income | 13,427 | 13,173 | 43,642 | 36,333 | |
Investments and investment management expense | 1,167 | 1,079 | 3,274 | 3,195 | |
Expensed acquisition, development and other pursuit costs | 3,391 | 406 | 5,251 | 3,139 | |
Interest expense, net | [1] | 43,234 | 46,376 | 133,398 | 132,631 |
(Gain) loss on extinguishment of debt, net | (18,987) | 0 | (26,736) | 412 | |
General and administrative expense | 10,503 | 11,290 | 32,614 | 30,745 | |
Equity in (income) loss of unconsolidated real estate entities | (20,554) | (130,592) | (68,925) | (143,527) | |
Depreciation expense | [1] | 120,184 | 111,836 | 355,664 | 328,598 |
Casualty and Impairment Loss (Gain) | 658 | 0 | (10,668) | 0 | |
Gain on sale of real estate assets | (35,216) | 0 | (115,798) | (60,945) | |
Gain on sale of discontinued operations | 0 | 0 | 0 | (37,869) | |
Income from discontinued operations | 0 | 0 | 0 | (310) | |
Net operating income from real estate assets sold or held for sale, not classified as discontinued operations | (843) | (4,144) | (3,634) | (16,666) | |
Net operating income | 323,040 | 290,425 | 934,463 | 830,537 | |
Continuing Operations | |||||
Reconciliation of NOI to net income | |||||
Net operating income | $ 323,040 | $ 290,425 | $ 934,463 | $ 830,537 | |
[1] | Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. |
Segment Reporting (Details 2)
Segment Reporting (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting [Abstract] | ||||
Rental income from real estate assets sold or held for sale, not classified as discontinued operations | $ 1,353 | $ 6,904 | $ 6,162 | $ 27,499 |
Operating expenses from real estate assets sold or held for sale, not classified as discontinued operations | (510) | (2,760) | (2,528) | (10,833) |
Income (Loss) From Assets Held for Sale, Not Classified as Discontinued Operations | $ 843 | $ 4,144 | $ 3,634 | $ 16,666 |
Segment Reporting (Details 3)
Segment Reporting (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Segment Reporting | |||||
Total revenue | $ 475,360 | $ 430,525 | $ 1,375,187 | $ 1,244,407 | |
NOI | 323,040 | 290,425 | 934,463 | 830,537 | |
Gross real estate assets held for sale | 245,060 | 245,060 | |||
Continuing Operations | |||||
Segment Reporting | |||||
Total revenue | 474,007 | 423,621 | 1,369,025 | 1,216,908 | |
NOI | $ 323,040 | $ 290,425 | $ 934,463 | $ 830,537 | |
% NOI change from prior year | 11.20% | 13.60% | 12.50% | 16.50% | |
Gross real estate | [1] | $ 19,002,878 | $ 17,285,687 | $ 19,002,878 | $ 17,285,687 |
Continuing Operations | Operating Segments | Established | |||||
Segment Reporting | |||||
Total revenue | 356,163 | 331,805 | 1,043,282 | 712,871 | |
NOI | $ 247,643 | $ 230,509 | $ 727,387 | $ 497,137 | |
% NOI change from prior year | 5.10% | 5.50% | 5.10% | 3.00% | |
Gross real estate | $ 12,495,778 | $ 7,432,186 | $ 12,495,778 | $ 7,432,186 | |
Continuing Operations | Operating Segments | Established | New England [Member] | |||||
Segment Reporting | |||||
Total revenue | 50,377 | 46,788 | 147,138 | 133,732 | |
NOI | $ 32,202 | $ 30,258 | $ 91,026 | $ 85,123 | |
% NOI change from prior year | 3.10% | 4.60% | 0.60% | 0.90% | |
Gross real estate | $ 1,487,944 | $ 1,363,271 | $ 1,487,944 | $ 1,363,271 | |
Continuing Operations | Operating Segments | Established | Metro NY/NJ | |||||
Segment Reporting | |||||
Total revenue | 98,585 | 93,905 | 289,288 | 231,259 | |
NOI | $ 68,973 | $ 65,839 | $ 201,962 | $ 161,879 | |
% NOI change from prior year | 3.70% | 3.80% | 3.20% | 2.40% | |
Gross real estate | $ 3,196,771 | $ 2,297,417 | $ 3,196,771 | $ 2,297,417 | |
Continuing Operations | Operating Segments | Established | Mid-Atlantic | |||||
Segment Reporting | |||||
Total revenue | 52,839 | 47,122 | 156,806 | 73,964 | |
NOI | $ 36,157 | $ 32,284 | $ 108,125 | $ 51,947 | |
% NOI change from prior year | 0.30% | (2.20%) | (0.40%) | (3.30%) | |
Gross real estate | $ 2,172,951 | $ 645,872 | $ 2,172,951 | $ 645,872 | |
Continuing Operations | Operating Segments | Established | Pacific Northwest | |||||
Segment Reporting | |||||
Total revenue | 19,493 | 16,744 | 57,029 | 40,437 | |
NOI | $ 13,502 | $ 11,668 | $ 40,532 | $ 28,104 | |
% NOI change from prior year | 5.10% | 9.40% | 7.30% | 6.30% | |
Gross real estate | $ 720,223 | $ 499,611 | $ 720,223 | $ 499,611 | |
Continuing Operations | Operating Segments | Established | Northern California | |||||
Segment Reporting | |||||
Total revenue | 69,850 | 64,120 | 202,508 | 129,560 | |
NOI | $ 53,095 | $ 48,805 | $ 155,464 | $ 99,030 | |
% NOI change from prior year | 9.50% | 12.20% | 10.80% | 7.80% | |
Gross real estate | $ 2,412,264 | $ 1,401,286 | $ 2,412,264 | $ 1,401,286 | |
Continuing Operations | Operating Segments | Established | Southern California | |||||
Segment Reporting | |||||
Total revenue | 65,019 | 63,126 | 190,513 | 103,919 | |
NOI | $ 43,714 | $ 41,655 | $ 130,278 | $ 71,054 | |
% NOI change from prior year | 7.90% | 6.80% | 9.10% | 4.50% | |
Gross real estate | $ 2,505,625 | $ 1,224,729 | $ 2,505,625 | $ 1,224,729 | |
Continuing Operations | Operating Segments | Other Stabilized | |||||
Segment Reporting | |||||
Total revenue | 56,571 | 45,003 | 165,335 | 370,569 | |
NOI | 36,930 | 31,926 | 108,283 | 255,350 | |
Gross real estate | 2,106,947 | 6,003,229 | 2,106,947 | 6,003,229 | |
Continuing Operations | Operating Segments | Development / Redevelopment | |||||
Segment Reporting | |||||
Total revenue | 59,112 | 44,310 | 152,694 | 125,215 | |
NOI | 38,467 | 27,990 | 98,793 | 78,050 | |
Gross real estate | 3,795,868 | 3,639,770 | 3,795,868 | 3,639,770 | |
Continuing Operations | Land Held for Future Development | |||||
Segment Reporting | |||||
Gross real estate | 553,729 | 176,484 | 553,729 | 176,484 | |
Continuing Operations | Non-allocated | |||||
Segment Reporting | |||||
Total revenue | [2] | 2,161 | 2,503 | 7,714 | 8,253 |
Gross real estate | $ 50,556 | $ 34,018 | $ 50,556 | $ 34,018 | |
[1] | Does not include gross real estate assets held for sale of $245,060 as of | ||||
[2] | (2)Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment. |
Stock-Based Compensation Plan42
Stock-Based Compensation Plans (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Shares | |
Exercised (in shares) | (155,173) |
2009 Plan | Stock Options | |
Shares | |
Options outstanding at the beginning of the period (in shares) | 340,062 |
Exercised (in shares) | (54,719) |
Forfeited (in shares) | 0 |
Options outstanding at the end of the period (in shares) | 285,343 |
Options exercisable at the end of the period (in shares) | 224,246 |
Weighted average exercise price per share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 122.67 |
Exercised (in dollars per share) | $ / shares | 121.70 |
Forfeited (in dollars per share) | $ / shares | 0 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | 122.85 |
Options exercisable at the end of the period (in dollars per share) | $ / shares | $ 121.19 |
1994 Plan | Stock Options | |
Shares | |
Options outstanding at the beginning of the period (in shares) | 272,402 |
Exercised (in shares) | (100,454) |
Forfeited (in shares) | 0 |
Options outstanding at the end of the period (in shares) | 171,948 |
Options exercisable at the end of the period (in shares) | 171,948 |
Weighted average exercise price per share | |
Options outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 104.96 |
Exercised (in dollars per share) | $ / shares | 90.82 |
Forfeited (in dollars per share) | $ / shares | 0 |
Options outstanding at the end of the period (in dollars per share) | $ / shares | 113.23 |
Options exercisable at the end of the period (in dollars per share) | $ / shares | $ 113.23 |
Stock-Based Compensation Plan43
Stock-Based Compensation Plans (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Additional disclosures | ||
Stock issued in connection with stock grants (in shares) | 157,779 | 113,822 |
Stock-based compensation expense | $ 11,255 | $ 9,897 |
Capitalized stock-based compensation cost | $ 7,738 | $ 4,635 |
Restricted stock | ||
Additional disclosures | ||
Restricted stock granted (in shares) | 61,953 | 97,613 |
Conversion of restricted stock units (in shares) | 95,826 | 16,209 |
Share Based Compensation Arrangement by Share Based Payment Award Equity Instruments Other than Options Issued in Period Fair Value | $ 10,721 | $ 12,605 |
Outstanding unvested shares granted | 247,888 | |
Shares vested | 98,602 | |
Conversion of restricted units | 7,907 | |
Restricted stock awards | 90,695 | |
Total fair value of shares vested | $ 11,497 | $ 11,143 |
Restricted stock | Minimum | ||
Additional disclosures | ||
Grant date fair value per share (in dollars per share) | $ 115.83 | |
Restricted stock | Maximum | ||
Additional disclosures | ||
Grant date fair value per share (in dollars per share) | $ 149.05 | |
Restricted Stock Units (RSUs) [Member] | ||
Additional disclosures | ||
Restricted stock granted (in shares) | 82,812 | |
Unrecognized compensation cost for unvested restricted stock | $ 12,340 | |
Restricted stock earned based on total shareholder return metrics related to common stock (in units) | 53,164 | |
Restricted stock earned based on operating performance and leverage metrics | 29,648 | |
Baseline share value (in dollars per share) | $ 166.23 | |
Dividend yield (as a percent) | 3.00% | |
Estimated volatility, Minimum (as a percent) | 14.70% | |
Estimated volatility, Maximum (as a percent) | 17.40% | |
Historical volatility (as a percent) | 50.00% | |
Implied volatility (as a percent) | 50.00% | |
Risk-free interest rate, minimum (as a percent) | 0.07% | |
Risk-free interest rate, maximum (as a percent) | 1.09% | |
Average estimated fair value (in dollars per share) | $ 139.18 | |
Stock Options | ||
Additional disclosures | ||
Unrecognized compensation cost for unvested stock options | $ 326 | |
Weighted average period for recognition of unrecognized compensation cost | 4 months 24 days | |
Restricted stock and restricted stock units | ||
Additional disclosures | ||
Unrecognized compensation cost for unvested restricted stock | $ 25,191 | |
Weighted average period for recognition of unrecognized compensation cost | 3 years 8 months 12 days |
Related Party Arrangements (Det
Related Party Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Arrangements | |||||
Management Fees Revenue | $ 2,161 | $ 2,503 | $ 7,714 | $ 8,253 | |
Compensation expense | 11,255 | 9,897 | |||
Unconsolidated real estate entities | |||||
Related Party Arrangements | |||||
Outstanding receivables | 3,270 | 3,270 | $ 6,868 | ||
Non Employee Director [Member] | Restricted stock and deferred stock awards | |||||
Related Party Arrangements | |||||
Compensation expense | 293 | $ 250 | 842 | $ 750 | |
Amount of deferred compensation | $ 780 | $ 780 | $ 452 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Conversion of Shares | 46,589 |
Fair Value (Details)
Fair Value (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)derivative | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)derivative | Sep. 30, 2014USD ($) | ||
Derivative instruments and Hedging Activities | |||||
Hedging losses reclassified from accumulated other comprehensive income into earnings | $ 1,342 | $ 1,546 | $ 4,334 | $ 4,557 | |
Estimated hedging losses to be reclassified from accumulated other comprehensive loss into earnings within the next twelve months | $ 5,493 | ||||
Cash Flow Hedges | |||||
Derivative instruments and Hedging Activities | |||||
Weighted average interest rate (as a percent) | [1] | 2.30% | 2.30% | ||
Number of derivative instruments held | derivative | 1 | 1 | |||
Interest Rate Cap [Member] | Cash Flow Hedges | |||||
Derivative instruments and Hedging Activities | |||||
Notional balance | $ 36,935 | $ 36,935 | |||
Weighted average capped interest rate (as a percent) | 5.90% | 5.90% | |||
Not Designated as Hedging Instrument [Member] | |||||
Derivative instruments and Hedging Activities | |||||
Number of derivative instruments held | derivative | 15 | 15 | |||
Not Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |||||
Derivative instruments and Hedging Activities | |||||
Notional balance | $ 726,662 | $ 726,662 | |||
Weighted average interest rate (as a percent) | [1] | 1.80% | 1.80% | ||
Weighted average capped interest rate (as a percent) | 5.80% | 5.80% | |||
[1] | Represents the weighted average interest rate on the hedged debt. |
Fair Value (Details 2)
Fair Value (Details 2) - Recurring basis $ in Thousands | Sep. 30, 2015USD ($) |
Fair Value, Inputs, Level 1 [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
DownREIT units | $ (1,311) |
Total | (3,376,578) |
Fair Value, Inputs, Level 2 [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Total | (2,891,365) |
Fair Value, Inputs, Level 3 [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Total | (8,765) |
Fair Value, Inputs, Level 3 [Member] | Puts | |
Financial Instruments Measured/Discussed at Fair Value | |
Fair value of remaining outstanding Puts | (8,765) |
Cash Flow Hedges | Fair Value, Inputs, Level 2 [Member] | Interest Rate Cap [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Derivative assets | 8 |
Unsecured notes | Fair Value, Inputs, Level 1 [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Indebtedness | (3,375,267) |
Secured Debt and Variable Rate Unsecured Term Loan [Member] | Fair Value, Inputs, Level 2 [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Indebtedness | (2,891,388) |
Not Designated as Hedging Instrument [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Cap [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Derivative assets | 15 |
Estimate of Fair Value Measurement [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
DownREIT units | (1,311) |
Total | (6,276,708) |
Estimate of Fair Value Measurement [Member] | Puts | |
Financial Instruments Measured/Discussed at Fair Value | |
Fair value of remaining outstanding Puts | (8,765) |
Estimate of Fair Value Measurement [Member] | Cash Flow Hedges | Interest Rate Cap [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Derivative assets | 8 |
Estimate of Fair Value Measurement [Member] | Unsecured notes | |
Financial Instruments Measured/Discussed at Fair Value | |
Indebtedness | (3,375,267) |
Estimate of Fair Value Measurement [Member] | Secured Debt and Variable Rate Unsecured Term Loan [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Indebtedness | (2,891,388) |
Estimate of Fair Value Measurement [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |
Financial Instruments Measured/Discussed at Fair Value | |
Derivative assets | $ 15 |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 31, 2015USD ($) |
Interest Rate Swap [Member] | Subsequent event | |
Subsequent events | |
Notional amount | $ 400,000,000 |