Multifamily Giant AvalonBay Credits Healthy Q1 to National Trends
REIT cites drier development pipeline, buoyant wages and — especially — the higher costs of buying in explaining its positive first-quarter performance
By Tom Acitelli April 28, 2026 5:11 pm
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Multifamily giant AvalonBay beat analysts’ expectations in the first quarter of 2026 regarding a key profitability metric, crediting strong tailwinds from both the asset class and the wider financial reality on the ground for the nation’s renters.
The Alexandria, Va.-based real estate investment trust (REIT), which says it owns 98,694 apartments nationwide, recorded $398.7 million, or $2.83 per share, in funds from operations (FFO) — a key profitability metric for REITs — in the first three months of 2026. Analysts had expected an FFO of $2.80 a share.
AvalonBay’s other first-quarter numbers were also generally pretty positive. Revenue for the quarter was nearly $770.3 million, up 3.3 percent annually but slightly off analysts’ expectations. Same-store residential revenue — a financial measure for existing AvalonBay properties — was up 1.6 percent annually to $703.9 million. Net income came in at nearly $328.3 million, up 38.8 percent compared to the first quarter of 2025.
Executives on the company’s Tuesday earnings call cited a handful of reasons for the REIT’s performance.
Occupancy in existing AvalonBay buildings remains high — well over 85 percent, even in regions where the company is relatively new, such as Denver, Austin, Charlotte and South Florida, and over 90 percent within the company’s established outposts in bigger coastal markets.
Deliveries of new market-rate apartments are relatively anemic in AvalonBay’s markets (a hangover from an era of overbuilding) but average wages continued to grow in 2025 and into 2026 — though growth won’t be as sharp as in 2023 and 2024.
But the single, biggest reason for the company’s buoyancy is how tough buying a home has become. It can be approximately $2,100 cheaper per month to rent on a median basis in AvalonBay’s established markets than to buy, according to the company.
“The economics of renting versus. homeownership remain very favorable,” AvalonBay CEO and President Ben Schall said on the call. “During the quarter, the percentage of customers leaving us to purchase a home declined to 8 percent.”
Turnover at AvalonBay properties was less than 35 percent in each month of the first quarter, below historical norms, the company said.
Executives also noted nearly $341 million in sales of apartment complexes in San Francisco, Washington, D.C., and White Plains, N.Y. The company finished building one complex in Mooresville, N.C., near Charlotte; and it started work on two complexes in New Jersey’s Saddle River and Somerville.
Tom Acitelli can be reached at tacitelli@commercialobserver.com.
