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AvalonBay reports Q2 gain in core FFO

AvalonBay Communities Inc. reported second-quarter core funds from operations attributable to common stockholders of $288.4 million, or $2.09 per share, a 3.6% rise in the aggregate from $278.5 million, or $2.03 per share, in the 2016 second quarter.

FFO attributable to common stockholders for the second quarter fell 4.1% on an annual basis to $262.3 million, or $1.90 per share, from $273.6 million, or $1.99 per share.

The S&P Capital IQ consensus FFO-per-share estimate for the quarter was $2.13.

The decrease in FFO per share was due to an increase in debt extinguishment losses, the company said.

In reporting results, AvalonBay said it expects FFO per share in the range of $2.25 to $2.31 for the third quarter. The company also forecasts FFO per share for the full year between $8.35 and $8.55.

For the third quarter, core FFO per share is expected in a range of $2.14 to $2.20. Additionally, the company forecasts core FFO per share to total between $8.50 and $8.70.

In February, the company said it expected full-ear FFO and core FFO of $8.59 to $8.99 and $8.44 to $8.84, respectively.

The S&P Capital IQ consensus FFO-per-share estimate for the third quarter is $2.17, while analysts expect FFO per share for the full year at $8.65.

Net operating income for established communities increased 2.1% year over year in the second quarter.

During the quarter, the company completed development of four properties: Avalon Esterra Park, in Redmond, Wash.; Avalon Quincy, in Quincy, Mass.; Avalon Princeton, in Princeton, N.J.; and Avalon Hunt Valley, in Hunt Valley, Md.

In the first half of 2017, AvalonBay Value Added Fund II LP, a private discretionary real estate investment vehicle in which the company holds an equity interest of roughly 31.3%, sold the 684-unit Eaves Gaithersburg for $117 million. In July, the fund sold the 348-unit Briarwood Apartments for $64.8 million.

Under the company's continuous equity program, AvalonBay sold 262,247 shares of common stock during the quarter at a weighted average sales price of $190.66 per share, for net proceeds of $49.3 million.