(Arlington, VA) AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported today that Net Income Attributable to Common Stockholders (“Net Income”) for the quarter ended December 31, 2011 was $323,085,000. This resulted in Earnings per Share – diluted (“EPS”) of $3.38 for the quarter ended December 31, 2011, compared to EPS of $0.31 for the comparable period of 2010. For the year ended December 31, 2011, EPS was $4.87 compared to $2.07 for the year ended 2010.

The increases in EPS for the quarter and year ended December 31, 2011 over the prior year periods are due primarily to an increase in real estate sales and related gains in 2011 coupled with an increase in Net Operating Income (“NOI”) from communities. The full year per share increase is composed of the following:

(1) Includes recapture of cumulative straight-line lease expense charged in excess of cash payments for a land lease asset sold in Q4 2011, a per share impact of $1.35.

Funds from Operations attributable to common stockholders - diluted (“FFO”) per share for the quarter ended December 31, 2011 increased 17.8% to $1.19 from $1.01 for the comparable period of 2010. FFO per share for the year ended December 31, 2011 increased 14.3% to $4.57 from $4.00 for 2010. Adjusting for the non-routine items detailed in Attachment 17, FFO per share for the three months and full year ended December 31, 2011 would have increased by 25.7% and 16.6%, respectively over the prior year periods.

The following table provides a comparison of the Company’s actual results to the outlook provided in its third quarter 2011 earnings release in October 2011:

(1) Mid-point of the Company’s October 2011 Outlook.

(2) Charges for certain debt prepayment costs discussed in our third quarter 2011 Earnings Release were not included in our October 2011 Outlook.

Commenting on the Company’s results, Tim Naughton, CEO and President, said “Fourth Quarter 2011 results cap a near-record year for FFO per share and NOI growth. We expect the strong fundamentals for rental housing will continue into 2012, supporting our outlook for 18% FFO per share growth and our 9% dividend increase for the upcoming year.”

Operating Results for the Quarter Ended December 31, 2011 Compared to the Prior Year Period

For the Company, including discontinued operations, total revenue increased by $23,513,000, or 10.1%, to $255,522,000. For Established Communities, rental revenue increased 6.2%, attributable to an increase in Average Rental Rates of 5.8% and an increase in Economic Occupancy of 0.4%. Total revenue for Established Communities increased $10,170,000 to $176,859,000. Operating expenses for Established Communities decreased $1,033,000, or 1.8%, to $55,100,000. Accordingly, NOI for Established Communities increased by 10.1%, or $11,203,000, to $121,758,000.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities from the fourth quarter of 2011 compared to the fourth quarter of 2010:

(1) Total represents each region’s % of total NOI from the Company, including discontinued operations.

Operating Results for the Year Ended December 31, 2011 Compared to the Prior Year

For the Company, including discontinued operations, total revenue increased by $89,852,000, or 10.0% to $989,377,000. For Established Communities, rental revenue increased 5.1%. Total revenue for Established Communities increased $33,045,000 to $691,537,000. Operating expenses for Established Communities decreased $3,145,000, or 1.4% to $222,975,000. Accordingly, NOI for Established Communities increased by $36,190,000, or 8.4%, to $468,562,000.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the year ended December 31, 2011 as compared to the year ended December 31, 2010:

(1) Total represents each region’s % of total NOI from the Company, including discontinued operations.

Development Activity

During the fourth quarter of 2011, the Company started construction of four communities: AVA H Street, located in Washington, DC, Avalon West Chelsea/AVA High Line, located in New York, NY, Avalon Natick, located in Natick, MA and Avalon Somerset, located in Somerset, NJ. These four communities will contain 1,644 apartment homes and will be developed for an estimated Total Capital Cost of $473,600,000.

During 2011, the Company started construction of 11 communities which will contain a total of 3,071 apartment homes for an expected aggregate Total Capital Cost of $892,500,000.

During 2011, the Company completed the construction of six communities containing 1,161 homes for a Total Capital Cost of $297,100,000. Savings from the original budgeted Total Capital Cost for these six communities totaled $12,100,000.

Redevelopment Activity

During the fourth quarter of 2011, the Company commenced the redevelopment of seven communities. Two of these communities will be redeveloped under our AVA brand, two communities will be redeveloped under our Eaves by Avalon brand, and the remaining three communities will maintain the current Avalon branding. These communities contain a total of 1,404 apartment homes and will be redeveloped for an estimated Total Capital Cost of $51,600,000, excluding costs incurred prior to redevelopment.

During 2011, the Company commenced the redevelopment of 11 communities. These 11 communities contain 2,522 apartment homes and will be redeveloped for an estimated Total Capital Cost of $85,600,000, excluding costs incurred prior to redevelopment.

During the fourth quarter of 2011, the Company completed the redevelopment of two communities, one redeveloped under the Company’s AVA brand and one redeveloped under the Company’s Eaves by Avalon brand. These communities contain 443 apartment homes and were redeveloped for $13,300,000, excluding costs incurred prior to redevelopment.

During 2011, the Company completed the redevelopment of seven communities containing 2,532 apartment homes for a Total Capital Cost of $67,500,000.

Land Activity

During the fourth quarter of 2011, the Company acquired four parcels of land for an aggregate purchase price of $76,739,000. Included in these purchases is the acquisition of an additional parcel under our outstanding land purchase commitment for a Development Right in New York for $22,989,000. The remaining three land parcels were acquired for the development of 919 apartment homes with an expected Total Capital Cost of approximately $232,389,000. The Company has started or anticipates starting construction on these three land parcels in 2012.

Disposition Activity

During the fourth quarter of 2011, the Company sold three communities: Avalon at Rock Spring, located in Bethesda, MD, Avalon at Cameron Court, located in Alexandria, VA, and Avalon at Stratford Green, located in Bloomingdale, IL. These communities, containing a total of 1,038 apartment homes, were sold for an aggregate price of $258,490,000. The dispositions resulted in an aggregate gain in accordance with GAAP of $273,415,000 and an Economic Gain of $137,393,000. As discussed earlier in this release, incorporated in the GAAP gain is the recapture of cumulative straight line rent expense charged in excess of actual cash payments totaling $122,416,000 for Avalon at Rock Spring, which was subject to a long-term ground lease.

Also during the fourth quarter of 2011, AvalonBay Value Added Fund, L.P. (“Fund I”), a private discretionary real estate investment vehicle in which the Company holds an equity interest of approximately 15%, sold Avalon Columbia, located in Columbia, MD. This community contains 170 apartment homes and was sold for $34,650,000. This disposition resulted in a gain in accordance with GAAP of $9,814,000 and an Economic Gain of $4,155,000. The Company’s share of the gain in accordance with GAAP was $1,319,000 and its share of the Economic Gain was approximately $462,000. In conjunction with the disposition, Fund I repaid a 5.48% fixed rate secured mortgage note in the amount of $22,275,000 in advance of its April 2013 scheduled maturity date.

In addition, in January 2012, Fund I sold Avalon Lakeside. Avalon Lakeside, located in Chicago, IL, contains 204 apartment homes and was sold for $20,500,000, resulting in a GAAP gain of $5,306,000 of which the Company’s share is $699,000.

The weighted average Initial Year Market Cap rate for wholly-owned communities not subject to joint venture ownership during the Company’s investment period, Avalon at Cameron Court and Avalon at Stratford Green, was 5.1%, and the Unleveraged IRR over a 13.4 year average holding period was 16.0%.

Acquisition Activity

During the fourth quarter of 2011, AvalonBay Value Added Fund II, L.P. (“Fund II”), a private, discretionary real estate investment vehicle in which the Company holds an equity interest of approximately 31%, acquired Highlands at Rancho San Diego, a garden style community consisting of 676 apartment homes in San Diego, CA for a purchase price of $124,000,000. In conjunction with the acquisition, Fund II extinguished an outstanding mortgage note secured by the community, incurring a prepayment penalty, of which the Company’s proportionate share is approximately $950,000.

As of January 31, 2012, Fund II has invested $772,069,000. While the investment period for Fund II ended August 2011, in 2012 the Company expects Fund II to acquire an operating community, which was an active acquisition candidate at the end of the investment period.

Financing, Liquidity and Balance Sheet Statistics

At December 31, 2011, the Company had no amounts outstanding under its $750,000,000 unsecured credit facility.

At December 31, 2011, the Company had $690,329,000 in unrestricted cash and cash in escrow. The cash in escrow includes amounts available for development activity.

Unencumbered NOI as a percentage of total NOI generated by real estate assets for the year ended December 31, 2011 was 72%. Interest Coverage for the fourth quarter of 2011 was 4.0 times.

Debt Repayment Activity

In anticipation of the Avalon at Cameron Court disposition, the Company repaid a 4.95% fixed rate secured mortgage note in the amount of $94,572,000 in advance of its April 2013 scheduled maturity date. The Company incurred a charge of $3,880,000 for a prepayment penalty and the write-off of deferred financing costs which was recognized as loss on extinguishment of debt in the fourth quarter of 2011.

In October 2011, the Company repaid a 5.88% fixed rate secured mortgage note in the amount of $54,584,000 in advance of its January 2019 scheduled maturity. As part of this transaction the Company incurred a charge of $1,940,000 for a prepayment penalty and the write-off of deferred financing costs, which was recognized as loss on extinguishment of debt in the fourth quarter of 2011.

In January 2012, the Company repaid $179,400,000 principal amount of its 5.5% coupon unsecured notes pursuant to their scheduled maturity.

First Quarter 2012 Dividend Declaration

The Company’s Board of Directors declared a dividend for the first quarter of 2012 of $0.97 per share of the Company’s common stock (par value of $0.01 per share). The declared dividend is an 8.7% increase over the Company’s prior quarterly dividend of $0.8925 per share. The dividend is payable on April 16, 2012 to common stockholders of record as of March 30, 2012.

Based on the midpoint of the Projected FFO per share range provided later in this release, the new dividend rate results in an expected annual ratio of dividends per share to FFO per share of 72% for 2012.

In declaring the increased dividend, the Board of Directors evaluated the Company’s past performance and future prospects for earnings growth. Additional factors considered in determining the increase included current dividend distributions, the ratio of the current common dividend distribution to the Company’s FFO, the relationship of dividend distributions to taxable income, distribution requirements under rules governing real estate investment trusts, and expected growth in taxable income.

2012 Financial Outlook

The following presents the Company’s financial outlook for 2012, the details of which are summarized on Attachments 15 and 16.

In setting operating expectations for 2012, management considers third party macroeconomic forecasts, local market conditions and performance at individual communities. Management expects continued, moderate economic growth for 2012. Positive annual rental revenue growth in our Established Communities is expected in all regions.

Projected EPS is expected to be within a range of $4.90 to $5.20 for the full year 2012.

The Company expects 2012 Projected FFO per share to be in the range of $5.25 to $5.55 representing an 18.2% increase over full year 2011 FFO per share of $4.57 at the midpoint of the range.

For the first quarter of 2012, the Company expects projected EPS within a range of $0.53 to $0.57. The Company expects Projected FFO per share in the first quarter of 2012 within a range of $1.20 to $1.24. This outlook includes the expected first quarter 2012 non-cash charge for unamortized deferred finance costs totaling $1,200,000 related to the repayment of a $48,500,000 variable rate secured note in advance of its November 2039 scheduled maturity date.

The Company’s 2012 financial outlook is based on a number of assumptions and estimates, which are provided on Attachment 15 of this release. The primary assumptions and estimates include the following:

Property Operations

Development

Redevelopment Activity

Acquisition & Disposition Activity

Capital Markets

The Company expects to issue between $700,000,000 and $900,000,000 of new unsecured and secured debt, common stock or other forms of securities in 2012.

First Quarter 2012 Conference/Event Schedule

Management is schedule to present at Citi’s Global Property CEO Conference from March 12 – 14, 2012. Management may discuss the Company’s current operating environment; operating trends; development, redevelopment, disposition and acquisition activity; financial outlook; portfolio strategy and other business and financial matters affecting the Company. Details on how to access a webcast of the Company’s presentation will be available in advance of the conference event at the Company’s website at http://www.avalonbay.com/events.

Other Matters

The Company will hold a conference call on February 2, 2012 at 1:00 PM ET to review and answer questions about this release, its fourth quarter and full year 2011 results, the Attachments (described below) and related matters. To participate in the call, dial 877-510-2397 domestically and 763-416-6924 internationally.

To hear a replay of the call, which will be available from February 2, 2012 at 3:00 PM ET to February 9, 2012 at 11:59 PM ET, dial 855-859-2056 domestically and 404-537-3406 internationally, and use Access Code: 42025058. A webcast of the conference call will also be available at http://www.avalonbay.com/earnings, and an on-line playback of the webcast will be available for at least 30 days following the call.

The Company produces Earnings Release Attachments (the “Attachments”) that provide detailed information regarding operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company’s website at http://www.avalonbay.com/earnings. To receive future press releases via e-mail, please submit a request through http://www.avalonbay.com/email.

About AvalonBay Communities, Inc.

As of December 31, 2011, the Company owned or held a direct or indirect ownership interest in 200 apartment communities containing 58,538 apartment homes in ten states and the District of Columbia, of which 19 communities were under construction and 13 communities were under reconstruction. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in high barrier-to-entry markets of the United States. More information may be found on the Company’s website at http://www.avalonbay.com. For additional information, please contact John Christie, Senior Director of Investor Relations and Research, at 703-317-4747 or Thomas J. Sargeant, Chief Financial Officer, at 703-317-4635.

Forward-Looking Statements

This release, including its Attachments, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by the Company’s use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook” and similar expressions that do not relate to historical matters. Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of risks and uncertainties, which

include the following: we may abandon development or redevelopment opportunities for which we have already incurred costs; adverse capital and credit market conditions may affect our access to various sources of capital and/or cost of capital, which may affect our business activities, earnings and common stock price, among other things; changes in local employment conditions, demand for apartment homes, supply of competitive housing products, and other economic conditions may result in lower than expected occupancy and/or rental rates and adversely affect the profitability of our communities; delays in completing development, redevelopment and/or lease-up may result in increased financing and construction costs and may delay and/or reduce the profitability of a community; debt and/or equity financing for development, redevelopment or acquisitions of communities may not be available or may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; and increases in costs of materials, labor or other expenses may result in communities that we develop or redevelop failing to achieve expected profitability. Additional discussions of risks and uncertainties appear in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements” and in subsequent quarterly reports on Form 10-Q.

The Company does not undertake a duty to update forward-looking statements, including its expected first quarter and full year 2012 operating results. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.

Definitions and Reconciliations

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and further explained on Attachment 17, “Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.” Attachment 17 is included in the full earnings release available at the Company’s website at http://www.avalonbay.com/earnings.