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EXHIBIT 99.6
Avalon Bay Communities, Inc.
March 9, 1998
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Special Note: Statements in the Bay Apartment Communities, Inc. Web site
relating to Bay's ownership, management, development and acquisition of
multifamily apartment communities are forward-looking statements. There are a
number of important factors that could cause actual events to differ materially
from those indicated by such forward-looking statements. These factors include,
among others, local economic and market conditions which are beyond management's
control and may adversely affect occupancy rates and market rents; the
possibility that the Company may not be able to successfully integrate large
portfolio acquisitions in new markets with its current business operations; and
additional factors discussed periodically in the Company's reports filed with
the Securities and Exchange Commission.
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Table of Contents
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I. Transaction Summary
II. The Combined Company
III. Financial Highlights
IV. Conclusion
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Transaction Summary
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Transaction Summary
Overview
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- - Preeminent Luxury Apartment Company
- - National High "Barrier-to-Entry" Strategy
- - Significant Presence in Top 10 Apartment Markets
- - Expanded Construction and Reconstruction Capabilities
- - $3.7 Billion Total Market Capitalization
- - Superior Shareholder Value Creation
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Transaction Summary
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- - Company Name: Avalon Bay Communities, Inc.
- - Exchange Ratio: .7683 BYA shares issued per AVN share
- - Accretion: $0.15 estimated in 1999
- - Dividend: Increased from $1.68 to $2.04
- - Accounting Treatment: Purchase Accounting
- - Board Composition: 9 Independents, 3 Members of Senior
Management
- - Headquarters: Alexandria, VA; Super-regional Offices
in San Jose, CA and Wilton, CT
- - Anticipated Closing: June 1998
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Transaction Summary
Common Heritage
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- Identical High "Barrier-to-Entry" Strategies
- Similar Backgrounds as Investment Developers/ Builders
- Consistent High Quality Asset and Resident Profile
- "Superior Resident Service" Ethic
- Similar Capital Structures and Financing Strategies
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Transaction Summary
Merger Integration
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- Management and Board Committed to Integration Process
- Merger Integration Firms Retained
- "Best Practices" Focus
- Relocation of President & C.O.O.
- Scaleable Information Systems
- Waiving Acceleration of Options and Grants
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Transaction Summary
Post-Closing
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- $2.7 Billion of Combined Equity, including Preferred Stock
- $1.0 Billion of Combined Debt
- 140 Communities (1) with 40,506 Apartment Homes
- 16 States (including D.C.), 29 Distinct Markets
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(1) Includes Communities under development and in lease-up.
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- -------------------------------------------------------------------------------
The Combined Company
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The Combined Company
Office of the Executive
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Executive Chairman
Gilbert M. Meyer
- Real Estate Strategy
- Construction and Reconstruction
- West and National New Business
Chief Executive Officer
Richard L. Michaux
- Corporate and Financial Management
- Integration
- Internal and External Communication
- Mid-Atlantic New Business
(line to Meyer)
President & C.O.O.
Charles H. Berman
- Daily Operations
- Strategy Implementation
- Best Practices
- Northeast and National New Business
(line to Michaux)
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The Combined Company
Senior Management
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Executive Chairman
Gilbert M. Meyer
Chief Executive Officer
Richard L. Michaux
(line to Meyer)
President & C.O.O.
Charles H. Berman
(line to Michaux)
CFO Development/ Property Operations Investments
Thomas J. Sargent Acquisitions Robert H. Slater Jeffrey B. Van Horn
(line to Michaux) Bryce Blair (line to Berman) (line to Michaux)
(line to Berman)
Integration Construction Administration
Max L. Gardner Morton L. Newman Debra Lynn Shotwell
(line to Michaux) (line to Berman) (line to Michaux)
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The Combined Company
Organizational Model
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- Office of the Executive-Executive Chairman, CEO and President
- Each Serves on Board of Directors
- New Business
- Mentorship
- Localized Acquisition, Development and Construction
- Regionalized Property Operations
- Senior Vice President--Investments
- Capital Strategies and Allocation
- Strategic Market Research and New Business
- Investment Performance Evaluation
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The Combined Company
Strength of Management
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- "Local Sharpshooter" in All Markets
- Unparalleled Management Expertise
- Acquisition
- Development
- Construction
- Reconstruction
- Property Operations
- Significant Management Bench Strength
- Incentive Compensation to Encourage Employee Retention
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The Combined Company
Office Locations
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[Map of the United States indicating corporate headquarters and regional
office.]
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The Combined Company
Offices and Development Communities
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[Map of the United States indicating development community, corporate
headquarters and regional office.]
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The Combined Company
Community Locations
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[Map of the United States indicating development community, community,
pre-sale community, corporate headquarters and regional office.]
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The Combined Company
Portfolio Summary
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Bay Avalon Combined
---- ------ ----------
Current Communities 58 66 124
Development Communities 5 11 16
Homes(1) 17,957 22,549 40,506
States 3 13(2) 16(2)
Markets 11 18 29
Average Age(3) 8 8 8
Economic Occupancy(4) 96.6% 96.2% 96.4%
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(1) Includes homes under development.
(2) Includes District of Columbia.
(3) Average age based on year constructed or reconstructed and excludes
communities under reconstruction.
(4) Reflects average economic occupancy for stabilized communities for 1997.
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The Combined Company
Community Locations
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Number of Communities Number of Homes
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Current Development Development Current Development Development
Communities Communities Rights Communities Communities Rights
State
California 55 5 1 15,558 1,708 200
Connecticut 7 2 5 2,778 403 883
Illinois 3 - 1 887 - 200
Indiana 2 - - 376 - -
Maryland 12 1 - 3,430 96 -
Massachusetts 5 1 3 1,172 171 800
Michigan 3 - - 983 - -
Minnesota 3 - - 904 - -
New Jersey 5 2 3 2,008 620 1,182
New York 5 3 5 968 841 1,770
Ohio 1 - - 264 - -
Oregon 1 - - 279 - -
Rhode Island 1 - - 225 - -
Virginia 18 2 1 5,421 694 165
Washington 2 - - 412 - -
Washington, 1 - - 308 - -
D.C
---- ----- ----- ----- ----- -----
Total 124 16 19 35,973 4,533 5,200
--- -- -- ------ ----- ------
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The Combined Company
Geographic Diversification by State
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[Pie chart of Bay representing [Pie chart of Avalon representing
geographic diversification geographic diversification by
by state] state]
Note: By number of Apartment Homes. Does not include communities under
development.
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The Combined Company
Geographic Diversification by State
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[Pie chart of Bay/Avalon combined representing geographic diversification by
state.]
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Note: By number of Apartment Homes. Does not include communities under
development.
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The Combined Company
Geographic Diversification by Market
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[Pie chart representing Bay/Avalon combined geographic diversification by
market.]
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Note: By number of Apartment Homes. Does not include communities under
development.
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The Combined Company
Strength of Markets - Top Ten Apartment Markets
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Metropolitan Area Bay Avalon Combined
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1. San Francisco x x
2. Orange County x x
3. Boston x x
4. San Jose x x
5. New York/Nassau Suffolk x x
6. San Diego x x
7. Oakland/East Bay x x
8. Seattle x x x
9. Los Angeles x x
10. Minneapolis x x
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Source: Jan/Feb Multi-Housing News, 1998.
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Financial Highlights
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Financial Highlights
Combined Capital Structure
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[Pie chart representing combined capital structure.]
Preferred Equity
9%
Debt
28%
Common
Equity
63%
$3.7 Billion Total Market Capitalization
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Financial Highlights
Combined Debt Composition
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[Pie chart representing combined debt composition.]
Fixed Rate Fixed Rate
Secured Debt Unsecured Debt
6% 45%
Fixed Rate
Tax-Exempt
Debt
36%
Unsecured
Variable Rate Credit Facility
Tax-Exempt Debt 7%
6%
$1.0 Billion Total Debt
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Financial Highlights
Debt Summary as of 12/31/97 (1)
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($ in millions) Weighted Average Weighted Average Principal
Interest Rate Years to Maturity Balance
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Conventional - Fixed Rate Mortgages 7.792% 5.7 $58.2
Unsecured Debt - Fixed Rate 6.794% 7.3 $460.0
Tax - Exempt - Fixed Rate Bonds 6.581% 21.4 $376.8
Tax - Exempt - Variable Rate Bonds 4.765% 25.3 $63.7
Unsecured Credit Facility Libor + 0.90% 2.3 $75.5
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Total/Weighted Average 6.626% 13.1 $1,034.2
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(1) Pro Forma for $150 million notes issued by Bay on January 20, 1998 and
$100 million notes issued by Avalon on January 22, 1998. Proceeds of both
offerings were used to reduce the respective lines of credit.
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Conclusion
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Conclusion
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* Preeminent Luxury Apartment Home Company in the U.S.
* Significant Presence in Top 10 Apartment Markets
* Shareholder Value Creation
* $0.07 per Share Accretion Estimated for Remainder of 1998
* $0.15 per Share Accretion Estimated for 1999
* $0.36 Dividend Increase
* Low Cost of Capital and Expanded Growth Platform
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Avalon Bay Communities, Inc.