Apartment Giant AvalonBay’s Turnover Rate Drops to Record Low

It continues to pay to be in the multifamily business. That’s if apartment giant AvalonBay’s fourth-quarter 2025 numbers are any lodestar. 

The real estate investment trust, which has ownership interests in 320 communities containing 98,694 apartments in 11 states plus D.C., posted $404.1 million in core funds from operations (FFO) — a key measure for REITs — in the last three months of 2025. That was ahead of the $399.4 million posted during the fourth quarter of 2025. What’s more, core FFO was up 2.4 percent for all of 2025, to more than $1.6 billion, according to an earnings presentation released Thursday. 

Avalon’s fourth-quarter core FFO per share was $2.85, beating Wall Street forecasts by a penny. That was also up from $2.80 a share at the end of 2024. 

Much of the stronger performance at the tail end of the year was due to simple demand, according to top executives on a Thursday earnings call. While multifamily supply in general has spiked over the past few years, AvalonBay said it in particular was able to fill new units — and keep them filled. 

“In fact, our turnover rate of 41 percent in 2025 was the lowest in our company’s history,” CEO and President Ben Schall said on the call. (AvalonBay dates from 1998.) 

Moreover, the company anticipates in 2026 it will see the lowest level of new supply in its more established markets since 2012, when the multifamily market was still recovering from the Global Financial Crisis. 

Some rain did fall during the fourth quarter. Revenue increased 3.7 percent annually to $767.9 million, the vast majority coming from rent and other income. That was slightly below Wall Street forecasts, however. And, at the same time, net income dropped more than 41 percent annually in the fourth quarter, to $164.7 million. Schall said that AvalonBay expects “modest revenue growth of 1.4 percent” in 2026. 

Executives expect macroeconomic trends to sustain demand through 2026. Good thing, too, as Avalon started construction in the fourth quarter on five projects in Texas, New Jersey, California, Massachusetts and Maryland. AvalonBay said it finished two projects in the quarter — one in Hunt Valley, Md., and one in South Miami, Fla. — with 612 units total. And, during all of 2025, AvalonBay acquired a dozen apartment complexes with 3,378 units total for $841.95 million.

“Our outlook assumes a job growth environment that is slightly stronger than in 2025, but still relatively modest,” Schall said, noting that such growth fuels demand for housing. 

The REIT’s recent performance led its board of directors to declare a dividend of $1.78 per share for the first quarter of 2026. 

Tom Acitelli can be reached at tacitelli@commercialobserver.com.