(Arlington, VA)  AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported today that Net Income Attributable to Common Stockholders (“Net Income”) for the quarter ended June 30, 2013 was $36,218,000. This resulted in Earnings per Share — diluted (“EPS”) of $0.28 for the quarter ended June 30, 2013, compared to EPS of $1.63 for the comparable period of 2012, a decrease of 82.8%. For the six months ended June 30, 2013, EPS was $0.89 compared to $2.24 for the comparable period of 2012, a decrease of 60.3%.

The decreases in EPS for the three and six months ended June 30, 2013 from the respective prior year periods are due primarily to additional depreciation expense and expensed transaction costs associated with the Archstone acquisition (as described in our first quarter earnings release dated April 30, 2013).  The decrease in EPS for the three months ended June 30, 2013 from the prior year period is also due to a decrease in gains from dispositions of real estate assets. The decreases in both the three and six months ended June 30, 2013 are partially offset by an increase in Net Operating Income (“NOI”) from communities acquired through the Archstone acquisition and existing and newly developed communities.

Funds from Operations attributable to common stockholders - diluted (“FFO”) per share for the quarter ended June 30, 2013 increased 15.7% to $1.55 from $1.34 for the comparable period of 2012.  FFO per share for the six months ended June 30, 2013 decreased 9.6% to $2.36 from $2.61 from the prior year period.  Adjusting for non-routine items as detailed in Attachment 15, FFO per share would have increased by 20.9% and 18.6% for the three and six months ended June 30, 2013, respectively, over the prior year periods.

The following table compares the Company’s results for the three months ended June 30, 2013, for both FFO per share as well as for FFO per share adjusted for non-routine items, to the outlook provided in April 2013.

Second Quarter 2013 Results

Comparison to April 2013 Outlook

Commenting on the Company’s results, Tim Naughton, Chairman and CEO, said, “This quarter we posted adjusted FFO growth of over 20%, driven by better than expected results from our operating portfolio as well as leasing of new development communities.  Same store revenue growth topped 5%, while NOI growth totaled 6.6%, both exceeding expectations.  Strong multi-family operating fundamentals support our revised higher outlook for revenue, NOI and adjusted FFO growth.”

Operating Results for the Quarter Ended June 30, 2013 Compared to the Prior Year Period

For the Company, including discontinued operations, total revenue increased by $128,261,000, or 49.0%, to $390,131,000.  For Established Communities, rental revenue increased 5.2%, attributable to increases in Average Rental Rates of 4.3%, and Economic Occupancy of 0.9%. As a result, total revenue for Established Communities increased $10,405,000 to $212,037,000. Operating expenses for Established Communities increased $1,226,000, or 2.0%, to $63,408,000. Accordingly, NOI for Established Communities increased by 6.6%, or $9,179,000, to $148,629,000.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the second quarter of 2013 compared to the second quarter of 2012:

Operating Results for the Six Months Ended June 30, 2013 Compared to the Prior Year Period

For the Company, including discontinued operations, total revenue increased by $189,133,000, or 36.6%, to $705,490,000.  For Established Communities, rental revenue increased 5.0%, attributable to an increase in Average Rental Rates of 4.5% and Economic Occupancy of 0.5%. Total revenue for Established Communities increased $20,185,000 to $420,281,000. Operating expenses for Established Communities increased $3,349,000, or 2.7%, to $126,994,000. Accordingly, NOI for Established Communities increased by 6.1%, or $16,836,000, to $293,287,000.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012:

Development Activity

During the second quarter of 2013, the Company started the construction of three communities:  Avalon Canton, located in Canton, MA, Avalon Alderwood I, located in Lynnwood, WA, and Avalon San Dimas, located in San Dimas, CA.  These three communities will contain 719 apartment homes when completed and will be developed for an estimated Total Capital Cost of $151,500,000.

During the second quarter of 2013, the Company completed the development of three communities: Avalon Irvine II, located in Irvine, CA, AVA Ballard, located in Seattle, WA, and Avalon at Wesmont Station II, located in Wood-Ridge, NJ. These three communities contain an aggregate of 584 apartment homes and were constructed for an aggregate Total Capital Cost of $134,400,000.

During the second quarter of 2013, the Company added nine Development Rights. If developed as expected, these Development Rights will contain 2,583 apartment homes and will be developed for an estimated Total Capital Cost of $706,000,000.

The Company also acquired five land parcels during the quarter ended June 30, 2013 for an aggregate purchase price of approximately $70,187,000. The Company has started, or anticipates starting, construction of new apartment communities on these five land parcels during 2013.

Redevelopment Activity

During the second quarter of 2013, the Company commenced the redevelopment of AVA Pasadena, located in Pasadena, CA. AVA Pasadena contains 84 apartment homes and is expected to be redeveloped for a Total Capital Cost of $5,600,000, excluding costs incurred prior to redevelopment.

Disposition Activity

During the second quarter of 2013, the Company sold Avalon at Dublin Station I, located in Dublin, CA. Avalon at Dublin Station I, containing 305 apartment homes, was sold for $105,400,000 and resulted in a gain in accordance with GAAP of $33,682,000 and an Economic Gain of $20,137,000.

During the second quarter of 2013, 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 at Civic Center, located in Norwalk, CA. Avalon at Civic Center, containing 192 apartment homes, was sold for $45,844,000.  The Company’s share of the gain in accordance with GAAP was $1,472,000.

Financing, Liquidity and Balance Sheet Statistics

At June 30, 2013, the Company had $142,000,000 outstanding under its $1,300,000,000 unsecured credit facility. At June 30, 2013, the Company had $205,172,000 in cash, restricted cash, and cash in escrow, a substantial portion of which is restricted for specified legal, financing or regulatory requirements.

Debt Issuance and Repayment Activity

The Company had the following consolidated debt activity in the three months ended June 30, 2013.

In April 2013, the Company obtained a 3.06% fixed rate secured mortgage note that matures in April 2018 in the amount of $15,000,000.

In May 2013, the Company obtained a 3.08% fixed rate secured mortgage note that matures in May 2020 in the amount of $56,210,000, in association with the refinancing of an existing $47,000,000 variable rate secured mortgage note.

The secured loan issuance and refinancing activity that took place during the three months ended June 30, 2013 was in connection with either tax protection arrangements assumed by the Company (through the Archstone acquisition) or entitlement and permitting requirements in connection with certain Development Communities.

The Company’s secured borrowing activity, noted above, was offset by its repayment of secured debt during the three months ended June 30, 2013, detailed below:

·   in April 2013, the Company repaid a 4.69% fixed-rate, secured mortgage note in the amount of $170,125,000 pursuant to its scheduled maturity;

·   in May 2013, the Company repaid a $5,393,000 fixed-rate secured mortgage note with an interest rate of 5.55% at par and without penalty in advance of its July 2028 scheduled maturity date; and

·   also in May 2013, the Company repaid a $52,806,000 fixed-rate secured mortgage note with an interest rate of 5.24% pursuant to its scheduled maturity date.

The net effect of the Company’s secured debt activity listed above was to decrease the Company’s outstanding secured indebtedness by approximately $204,000,000.

Also during the second quarter of 2013, the Company paid approximately $32,100,000 to redeem its proportionate share of preferred interest obligations assumed as part of the Archstone acquisition.

Lehman Sale of Stock

On February 17, 2013, the Company issued 14,889,706 shares of its common stock to Lehman Brothers Holdings, Inc. (“Lehman”) as part of the consideration for the Archstone acquisition.  During the three months ended June 30, 2013, Lehman sold 7,870,000 of these shares in a secondary public offering. Lehman received all of the net proceeds from the offering, and the sale did not impact the total number of the Company’s common shares outstanding.

Third Quarter and Updated Full Year 2013 Outlook

During the year, the Company may update its financial outlook based in part on portfolio trend analysis, including actual rental rates and occupancy levels, in addition to considering actual economic conditions which differ from in the assumptions used in developing the Company’s outlook provided earlier in the year.

Property Operations

Rental rates and occupancy through June 2013 have performed ahead of the Company’s January 2013 outlook and recent trends suggest that total rental revenue will continue to exceed the original outlook for revenue growth for 2013 provided in January 2013.

As a result, the Company revised its expected ranges for operating results, updating the ranges from the January 2013 outlook as follows:

·        the Company revised the range for its expected increase in Established Communities’ revenue growth from between 3.5% and 5.0% to between 4.25% and 5.0%;

·        the Company revised the range for its expected increase in Established Communities’ expense growth from between 3.0% and 4.0% to between 2.5% and 3.5%; and

·   the Company revised the range for its expected increase in Established Communities’ NOI growth from between 4.0% and 5.5%, to between 5.0% and 5.75%.

Development

The Company now expects the following development activity, updated from its January 2013 outlook.

·     The Company anticipates starting between $1,700,000,000 and $1,900,000,000 of new development during 2013 and currently has 27 communities under development.  The Company’s new development starts in 2013 include development Communities acquired in the Archstone acquisition.

·                  During 2013, the Company expects to disburse between $1,250,000,000 and $1,450,000,000 related to current and expected Development Communities, including the incremental spend for the Archstone Development Communities acquired and expected acquisitions of land for future development.

EPS and FFO Outlook

For the third quarter of 2013, the Company expects EPS in the range of $0.36 to $0.42.  The Company expects EPS for the full year 2013 to be in the range of $2.57 to $2.77.

The Company expects Projected FFO per share in the range of $1.13 to $1.19 for the third quarter of 2013 and Projected FFO per share for the full year 2013 to be in the range of $5.05 to $5.25.

The table below details the changes in the Company’s current 2013 full year outlook from the January 2013 outlook, including the expected impact of non-routine items.

Full Year 2013 Outlook

Comparison to January 2013 Outlook

In April 2013 the Company provided an interim outlook update for full year 2013 FFO per share and FFO per share as adjusted for non-routine items.  The table below details the changes from the Company’s interim full year 2013 outlook including the impact of non-routine items to the current revised outlook.

Full Year 2013 Outlook

Comparison to April 2013 Outlook

Further detail of the Company’s July 2013 outlook, including updated outlook for its transaction and capital markets activity is available on Attachment 14.

Other Matters

The Company will hold a conference call on July 25, 2013 at 1:00 PM ET to review and answer questions about this release, its second quarter 2013 results, the Attachments (described below) and related matters. To participate on the call, dial 877-510-2397 domestically and 763-416-6924 internationally and use conference id: 14451743.

To hear a replay of the call, which will be available from July 25, 2013 at 3:00 PM ET to August 1, 2013 at 11:59 PM ET, dial 855-859-2056 domestically and 404-537-3406 internationally, and use conference id: 14451743. 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 June 30, 2013, the Company owned or held a direct or indirect ownership interest in 273 apartment communities containing 81,499 apartment homes in twelve states and the District of Columbia, of which 27 communities were under construction and six 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 Jason Reilley, Director of Investor Relations at 1-703-317-4681.

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; increases in costs of materials, labor or other expenses may result in communities that we develop or redevelop failing to achieve expected profitability; we may not be able to integrate the assets and operations acquired in the Archstone acquisition in a manner consistent with our assumptions and/or we may fail to achieve expected efficiencies and synergies; we may encounter liabilities related to the Archstone acquisition for which we may be responsible that were unknown to us at the time we completed the Archstone acquisition or at the time of this press release; and our assumptions concerning risks relating to our lack of control of joint ventures and our abilities to successfully dispose of certain assets may not be realized. 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, 2012 under the heading “Risk Factors” and under the heading “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 third quarter and full year 2013 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 15, “Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.”  Attachment 15 is included in the full earnings release available at the Company’s website at http://www.avalonbay.com/earnings.

SELECTED FINANCIAL INFORMATION