After assessing REITs space and prepared a pitch book presentation for AvalonBay Communities (AVB), I explain that the company has strong fundamentals and great potential to sustain its growth in the next years. I support this view by pointing out that AVB seems to have a differentiated outlook on supply growth than other market participants, the economics for builders still looks attractive enough for the project to get started, and the demand side of the equation has increased, national job boost confidence in the sector. I note that the main principles to estimate REITs real value is based on an understanding of all the issues that impact the value of a property. In addition, my research points out that a lower price target for the stock is of $183.10, and the other side of the spectrum, the perpetuity growth method has a target as high as $225.07.

1. AvalonBay Communities, Inc.
Monday, 15 July 2019
By: Sergio Miqueleti

3. Contents
Executive Summary Page 4
AvalonBay Communities Page 6-12
Real Estate Market Page 14
Financial Due Diligence 16-19
Conclusions 21-23

4. ValuationHighlights
 Analyst Reports:Analysts consensus on Nasdaqis suggesting ahold rating.
 Comps: AvalonBay Communities looks undervalued looking at comparable.
 Precedents: Undervalued compared to Multiple Methods and Perpetuity
Growth Method
 Overvalued compared to NetAsset Value Model (NAV)
Valuation& SharePerformance(AVB)
Current SharePrice: $208.42 52-Week High/Low: $209.37 / 206.04
2017 2018 2019 2020 2021 2022 2023 2024
Revenues ($M)
$ 2,158,628.00 $ 2,284,535.00 $ 2,413,991.98 $ 2,534,691.58 $ 2,560,038.50 $ 2,675,240.23 $ 2,902,635.65 $ 3,028,416.53
Revenues Growth 5.83% 5.67% 5.00% 1.00% 4.50% 8.50% 4.33% 5.83%
EBITDA($M) $ 1,660,612 $ 1,826,185 $ 1,879,965 $ 1,843,450 $ 1,896,283 $ 1,964,673 $ 2,142,351 $ 2,228,191
EBITDA Margin 76.9% 79.9% 77.9% 72.7% 74.1% 73.4% 73.8% 73.6%
KeyMetrics/ Applicable
Valuation Multiples2018
AvalonBay
Communities
Comparables
GrossRealEstateAssets $ 17,730,890 $6,757,396
Leverage (Debt to total Assets) 32.1% 43.1%
EV/EBITDA 19.3 x 16.8 x
EquityValue/FFO 17.2 x 17.7 x
ExecutiveSummary
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AVB Stock Price Comparision with Peers
AIV Adj Close AMH Adj Close ACC Adj Close
LPT Adj Close Avalon Adj Close NNN Adj Close

5. AvalonBay Communities

6. AvalonBay Communities, Inc – Senior ManagementTeam
6
Stephen W. Wilson
Executive Vice President –
Development
Edward M. Schulman
Executive Vice President -
General Counsel and
Secretary
William M. McLaughlin
Executive Vice President -
Development
Leo S. Horey III
Chief Administrative Officer
Michael M. Feigin
Chief Construction Officer
Sean J. Breslin
Chief Operating Officer
Matthew H. Birenbaum
Chief Investment Officer
Kevin O'Shea
Chief Financial Officer
Timothy J.
Naughton
Chairman, Chief
Executive Officer
and President

7. AvalonBay Communities, Inc– CompanyOverview
• History: AvalonBay Communities, Inc was established in 1978, under the leadership of Mike Meyer. The company is
treated as a real estate investment trust (REIT) since 1993 for federal income tax purposes, it has grown into a leading
multifamily real estate investment firm that develop, redevelop, acquire, own and operate multifamily
communities. In 1994, AvalonBay went public and raised more than 200 million U.S dollars. Today, AvalonBay is
headquartered in Arlington, Virginia, and employs over 1,900 in 12 states and the District of Columbia. In 2017
AvalonBay began investing in Denver, Colorado, and Southeast Florida, leading metropolitan areas characterized by
growing employment in high wage sectors of the economy. The company operates by developing a new
community on either vacant or land, or byacquiring an existing community.
• Valuation: AvalonBay stock is relatively stable and has experienced an overall increase in market value of roughly
338% since March 2009, one year after the financialcrisis. Today,AvalonBay stock trades at $208.42 – Sinceit’s IPO, as a
value-centric organization, AvalonBay has experienced value creation by managing credit metrics, liquidity and debt
maturities. The company hasmanaged to report dividend which has always been covered by recurring cash flow.
• Strategy: Avalonhas made it clear that it views Corporate Responsibility asanintegral part of its business strategy; the
companyhas been awarded a Green Star by GRESB for its top ratings. Furthermore, the REIT giant has five main type of
strategy:Development, Redevelopment, Disposition,Acquisition, andPropertyManagement.
• Corporate Finance Transactions: Acquired The Lodge Denver West (2017): $76.8 Million; Sold 80% interest in 5
Manhattan Apartment Communities (2018); Acquired Ridge at Wheatlands (2019): $91.3 Million; Formed a partnership
with Harrison and the MTA (2019); $76.8 Million Company.
EnterpriseValue $ 35,275,295 Revenue $2,284,535
Market Cap $ 29,177,581 EBITDA(FY18) $1,825,185
P/FFO* 10.2 x EBITDAMargin 79.9%
EV/EBITDA* 19.3 x Debt / EBITDA 3.23 x
Cash $217,884 TotalDebt 5,905,993
SharePrice Current:$208.42 High/Low: $209.37 /206.04
KeyValuationStatistics($mm)
*P/FFO and EV/EBITDA are based on FY18(a) for comparison
Company Highlights Valuation&SharePerformance
Industry Data Average
Residential REITS
EV / EBITDA 20.3 x
Equity Value / FFO 17.7 x
Leverage (Debt to Assets) 43.1 %
Debt / EBITDA 4.7 x 7
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
180.00%
200.00%
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
AVB
Avalon Nasdaq

8. AvalonBay Communities, Inc– SharePricePerformance
0
2000000
4000000
6000000
8000000
10000000
12000000
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6/8/16
11/15/16
4/28/17
10/6/17
3/20/18
8/28/18
2/8/19
Volume Adj Close
8

9. AvalonBay- OutperformingREITSPeers
9
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
AVB
Avalon Nasdaq
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
NNN
Nasdaq National Retail Properties
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
AIV
Nasdaq Apartment Inv & Mgmt
-
0.50
1.00
1.50
2.00
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
AMH
Nasdaq American Homes 4 Rent Class A
-
0.50
1.00
1.50
2.00
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
LPT
Nasdaq Liberty Property Trust
-
0.50
1.00
1.50
2.00
6/30/14 6/30/15 6/30/16 6/30/17 6/30/18
ACC
Nasdaq American Campus Communities

10. AvalonBay – Portfolio
10
47
37
10
54
14
19
21
41
41
17
17
42
12
13
17
60
40
12 8 5
3
2 30
10
20
30
40
50
60
70
AVB: 2019-2018
Average apartment per established community: 6332
Development Communities: 21
Development Rights: 28
Approach: Consider-it done to customer service
AVA Brand: Urban sensitivity and designed to appeal to millennials.
Locations: Established urban and suburban submarkets
Total housing production: Includes rentals and single-family homes, is slightly more than a
million units yearly.
Size of
Opportunity
Management
Team
Acquisitions
Competitive
Advantage
Operational
Efficiency
Rental Growth
REITS RATINGS
AVB Peers

11. AvalonBay – FinancialInformation
Item 2017 2018
Revenue $M $ 2,158,628 $ 2,284,535
Growth 5.83% 6.17%
NetIncome $M $ 876,921 $ 974,525
GrossMargin (%) 26.14% 22.39%
Operating Margin(%) 41% 43%
EBITDA$M $ 1,686,345 $ 1,844,027
EBITDAMargin 0.78 0.81
Total Assets$M $ 18,414,821 $ 18,380,200
Cash$M $ 201,906 $ 217,884
Current Ratio 1.01 0.92
Total AssetsTurnover 0.117 0.124
InventoryTurnover 2.51 2.32
DaysInventory 145.39 157.19
Dayssalesoutstanding 67.31 74.63
DaysPayable 106.98 103.14
CashConversionCycle 105.72 128.68
Total Liabilities$M $ 8,020,719 $ 7,744,350
Equity$M $ 10,388,046 $ 10,632,606
ROA(%) 4.76% 5.30%
ROE(%) 8.44% 9.17%
ROIC(%) 4.82% 5.37%
EPS 6.38 7.07
Comments
11
Revenue: Growthisexperienced inallEstablished regions.
Operating Margin:Improvedsignificantly overthe 3-yearperiod.
EBITDAMargin: Increase in EBITDAMarginis apositive signfor theAvalonBay.
Current Ratio: The decrease in Current Ratio may signifies that the company
mighthave difficulties meeting its current obligations.
TotalAssetsTurnover: Increasingratio is apositivesignforAvalonBay implying that is
able to useits assetsmore efficiently. Themeasure isalso connectedto ROEandROA
CashConversion Cycle:Increased by more than 23daysover 2 years,which suggests
that Avalon abilitytoturn its input resourcesinto cashis lower.
ROA:improved dueto better margins and better turns. It is higher than peers
ROE:Higher than 90%of the playersin the industry. Notwithstanding of the lower debt
ratio the companyhas(Equity/ FFO Multiplier of17.2x)
ROIC:The companyis able to generatereturns with respect to the cost it sustained to
raise capital. Thecompanyis good at generating CFsper capitalinvested.
EPS:AvalonBay has beingable to generate positiveEPS..

12. AvalonBay – Environmental Scan
OPERATION
AvalonBay closed FY2018 with a significant improvement in its financial
statements mainly due to an increase NOI from existing, acquired and newly
developed communities
• A solution to decrease rising prices in properties is an extra supply in employment
centers.
• If unfavorable market and economic conditions hit the United States in the next 2
years future operating performance would decrease, this could significantly harm
Avalon ability to be profitable.
• It may incur some extra costs for the next years due to increases in material, labor
and others.
12
FINANCIALS
AvalonBay financials improved consistently since Q3 2017 earnings call.
• The alternative housing market can have a significant impact on AvalonBay
financials.
• Since AvalonBay is still able to generate positive CFs, it relies less on the now
$201,906 cash it has on its books.
• AvalonBay is growing at a sustainable rate in its industry; the question is what will
happen to the profitability of the company when recession comes to play?
• Its current ability to service interest and other fixed charges has increased providing
AvalonBay with adequate access to liquidity from the capital markets.
GOVERNANCE
The Global Real Estate Sustainability Benchmark (GRESB) awarded AvalonBay
4 out of 5 ”Green Star” for leadership in environmental sustainability in FY 2018.
• The governance provisions of AvalonBay joint ventures with Equity Residentials
involve risks not associated with direct ownership of Real Estate - risks of
inconsistency with AvalonBay business interest or goals
• AvalonBay has joined a group of leading companies that are setting emissions
reductions targets line with Science Based Target Initiative (SBTI). Management
see corporate citizenship as key operating element.
• Analysts believe that AvalonBay is a stock to hedge a long bet elsewhere. Its ESP is
+0.22%, making analysts confident of a positive surprise.
ACQUISITIONS
From FY2017 to FY 2018 they acquired land parcels for seven development
rights, four communities containing an aggregate of 1,096 apartment homes.
• AvalonBay may encounter appropriate opportunities outside of its existing market.
• AvalonBay also stated that they are planning to sell 21 communities under
development that contain an aggregate of 6,609 apartments – and have the right to
develop 28 communities, if developed as expected, will contain 9,769 apartments.
• There is too much capital chasing too few opportunities. We are in the mature part
of the cycle, and prices is high in many places.

13. Real Estate Market

14. Real Estate MarketOverview
Market Trends
• A growing number of rental prices is expected to continue to outpace
inflation. Providing increasingly clear signals to rental demand, most of
the new households are renters, but they might fade way in 2021.
• Wages are starting to increase, this could lead to less pricing power in
the hands of the landlords.
• Expansion to new markets - Class B and Class C property types are
expected to increase in a constant rate until 2030, reaching more than 5
percent of annual rental growth.
85.71% 76.93%
79.94% 80.86% 80.86% 80.86% 75.66% 75.70% 75.70%
300.49%
352.45%
323.41%
302.99%
288.98%
295.33% 304.95% 281.40%
273.86%
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%
300.00%
350.00%
400.00%
2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4
AVALONBAY MARGIN FORECAST (2016-
2024)
EBITDA/REVENUE DEBT/EBITDA
AVB
19%
NNN
6%
AVI
4%
AMH
5%
ACC
4%LPT
5%
Others
57%
MARKET SHARE BY RESIDENTIAL REITS
AVB NNN AVI AMH ACC LPT Others
• AvalonBay Largest
apartment REITS
on the market.
• Total of 22
Residential REITS
• AvalonBay has
price stability and
large diversified
portfolio
$-
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
2016 2017 2018 2019 2020 2021 2022 2023 2024
AVB FFO & AFFO
FFO AFFO
0.00
0.05
0.10
0.15
0.20
2016 2017 2018 2019 2020 2021 2022 2023 2024
Funds to Operation
Multiple Forecast
Price / FFO Price / AFFO
14

15. Financial Due
Diligence
15

16. Free Cash Flow Projections: Historical: Projected
Units: FY 2017 FY 2018 FY2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Revenue: $ M $ 2,158,628
$
2,284,535 $ 2,413,992 $ 2,534,692 $ 2,560,038
$
2,675,240 $ 2,902,636
$
3,028,417
(-) Normalized Operating Expenses: $ M 1,588,013 1,700,896 1,786,937 1,878,307 1,905,469 1,977,240 2,156,054 2,250,143
Operating Income
(EBIT): $ M 1,076,462 1,194,989 1,230,810 1,161,838 1,207,855 1,245,266 1,361,794 1,413,810
Adjustments for Non-Cash
Charges:
(+) Depreciation & Amortization: $ M $ 584,150.00 $ 631,196.00 $ 649,154.65 $ 681,612.39 $ 688,428.51 $719,407.79 $ 780,557.46
$
814,381.61
(+/-) Change in Working Capital: $ M $ (247,956.67) $ (211,649.00) $ (340,548.32) $ (228,409.48) $ 18,835.31 $(212,054.64) $ (105,562.30)
$
(308,422.06)
(-) Recurring Maintenance CapEx: $ M $ (73,990.00) $ (86,932.00) $ (87,300.55) $ (94,058.32) $ (93,790.57) $(98,642.50) $(106,684.60)
$
(111,486.28)
(-) Acquisitions, Net of Cash
Acquired: $ M $ (462,317.00) $ (338,620.00) $ (437,408.60) $ (392,142.04) $ (378,766.87) $(378,096.45) $ (419,845.00)
$(433,024.88
)
(-) Developments &
Redevelopments: $ M $ (979,947.00) $ (1,139,954.00) $ (1,150,212.67) $ (1,210,904.22) $(1,170,206.13) $ (1,196,952.33) $ (1,254,698.41)
$(1,271,451.0
0)
(-) Proceeds from Asset
Dispositions: $ M $ (883,313.00) $ (503,039.00) $ (759,676.39) $ (652,544.07) $(681,152.39) $(646,761.14) $ (678,969.01)
$
(711,063.96)
Unlevered Free Cash Flow: $ M $ 392,315 $ 472,328 $ 739,312 $ 702,220 $ 953,507 $ (370,549) $ 416,282 $ 1,431,715
Discount Period: # 1 2 3 4 5 6
WACC: % 6.46% 6.46% 6.46% 6.46% 6.46% 6.46%
WACC - Cumulative Discount
Factor: # 0.939 0.882 0.829 0.779 0.731 0.687
PV of Unlevered FCF: $ M $ 694,454 $ 619,590 $ 790,261 $ (288,475) $ 304,415 $ 983,445

17. Risk-Free Rate: % 2.49%
Equity Risk Premium: % 7.00%
Median Levered Beta from Comps: # 0.67
Cost of Equity: % 7.20%
Planned Debt-to-Total-Capital Ratio: % 20.2%
Cost of Debt: % 4.50%
Discount Rate (WACC): % 6.46%
PV of Future Stock Issuances: $ M $ 265,817
PV of Terminal Value of Stock Issuances: $ M $ 27,815.12
Estimated # of Future Shares to Be Issued: # Millions 1,408,846.913
Total Shares Outstanding: # Millions 141,403,000.913
Current Equity Value: $ 29,177,582
(-) Cash & Cash-Equivalents: 217,864
(+) Total Debt: 5,905,993
(+) Preferred Stock: -
(+) Noncontrolling Interests: (26,144)
Current Enterprise
Value: 35,275,295
Terminal Value - Multiples Method:
Median EV / EBITDA of Comps: 19.09
Baseline Terminal EBITDA Multiple: 21.2 x
Baseline Terminal Value: $ 47,332,011.13
Implied Terminal FCF Growth Rate: 3.33%
(+) PV of Terminal Value: $ 32,512,373.57
(+) Sum of PV of Free Cash Flows: $ 3,103,690.54
Implied Enterprise Value: $ 35,616,064.11
% of Implied EV from Terminal Value: 91.3%
(+) Cash & Cash-Equivalents: $ 217,864.00
(-) Total Debt: $ (5,905,993.00)
(-) Preferred Stock: -
(-) Noncontrolling Interests: $ (26,144.00)
Implied Equity Value: 29,901,791.11
Implied Share Price from DCF: $ 211.47
Premium / (Discount) to Current: 101.5%
Terminal Value - Perpetuity Growth Method:
Expected Long-Term GDP Growth: 2.1%
Baseline Terminal FCF Growth Rate: 3.0%
Baseline Terminal Value: $ 42,626,704
Implied Terminal EBITDA Multiple: 19.1 x
$ 34,436,176
$ 3,103,691
37,539,866
% of Implied EV from Terminal Value: 91.7%
(+) Cash & Cash-Equivalents: $ 217,864
(-) Total Debt: $ (5,905,993.00)
(-) Preferred Stock: -
(-) Noncontrolling Interests: $ (26,144.00)
Implied Equity Value: 31,825,593
Implied Share Price from DCF: $ 225.07
Premium / (Discount) to
Current: 108.5%
Sensitivity Analyses:
Weighted Average Cost of Capital (WACC):
$ 242.61 5.15% 5.40% 5.65% 5.90% 6.15% 6.40% 6.65% 6.90% 7.15% 7.40% 7.65%
Terminal EV /
EBITDA
Multiple
(Terminal
Value
Calculated
Using the
Multiples
Method):
22.20 x $ 260.40 $ 257.53 $ 254.69 $ 251.88 $ 249.10 $ 246.34 $ 243.62 $ 240.93 $ 238.26 $ 235.63 $ 233.02
21.40 x 250.12 247.35 244.60 241.89 239.20 236.55 233.92 231.32 228.75 226.20 223.68
20.60 x 239.83 237.16 234.52 231.90 229.31 226.75 224.22 221.71 219.23 216.78 214.35
19.80 x 229.55 226.97 224.43 221.91 219.42 216.95 214.51 212.10 209.71 207.35 205.01
19.00 x 219.26 216.79 214.34 211.92 209.52 207.15 204.81 202.49 200.20 197.93 195.68
18.20 x 208.98 206.60 204.25 201.93 199.63 197.36 195.11 192.88 190.68 188.50 186.34
17.40 x 198.69 196.42 194.17 191.94 189.74 187.56 185.41 183.27 181.16 179.08 177.01
16.60 x 188.41 186.23 184.08 181.95 179.85 177.76 175.70 173.66 171.65 169.65 167.68
15.80 x 178.12 176.05 173.99 171.96 169.95 167.97 166.00 164.05 162.13 160.23 158.34
Discounted Cash Flow Analysis - AvalonBay (Unlevered DCF)
($ USD in Millions Except Per Share and Per Unit Amounts in USD as Stated)

18. 18
Valuation Statistics: Capitalization Gross Leverage Enterprise Value / Equity Value /
TICKER Equity Enterprise Real Estate Portfolio (Debt to EBITDA FFO
Company Name Value Value Assets Cap Rate Total Assets) FY16 FY17 FY18 FY16 FY17 FY18
National Retail Property NNN $ 8,470,949 $ 11,143,415 $ 6,853,757 6.0% 40.1% 23.0 x 20.3 x 19.1 x 20.4 x 17.8 x 15.9 x
Apartment Investment and Management AIV 8,103,116 12,131,170 5,723,475 15.1% 65.8% 12.6 x 14.0 x 9.7 x 7.0 x 8.3 x 4.7 x
American Homes 4 Rent AMH 7,161,449 7,810,992 8,492,575 2.8% 25.7% 17.8 x 16.1 x 14.1 x 48.4 x 36.5 x 28.3 x
American Campus Communities ACC 6,595,377 9,725,096 6,661,034 3.3% 43.0% 24.9 x 25.9 x 20.2 x 22.7 x 21.6 x 19.4 x
Liberty Property Trust LPT 7,627,170 10,760,495 4,937,518 13.2% 44.6% 16.5 x 20.3 x 14.6 x 9.9 x 14.0 x 10.4 x
Equity Residential EQR 28,939,200 35,028,875 19,814,741 4.3% 43.2% 22.4 x 22.0 x 21.3 x 5.6 x 21.1 x 19.7 x
Maximum $ 28,939,200 $ 35,028,875 $ 19,814,741 15.1% 65.8% 24.9 x 25.9 x 21.3 x 48.4 x 36.5 x 28.3 x
75th Percentile 8,378,991 11,884,231 8,082,871 11.4% 44.3% 22.8 x 21.6 x 19.9 x 22.1 x 21.5 x 19.6 x
Median $ 7,865,143 $ 10,951,955 $ 6,757,396 5.1% 43.1% 20.1 x 20.3 x 16.8 x 15.2 x 19.5 x 17.7 x
25th Percentile 7,277,879 9,983,946 5,957,865 3.5% 40.9% 16.8 x 17.1 x 14.2 x 7.8 x 14.9 x 11.8 x
Minimum 6,595,377 7,810,992 4,937,518 2.8% 25.7% 12.6 x 14.0 x 9.7 x 5.6 x 8.3 x 4.7 x
AvalonBay Communities Inc. AVB $ 29,177,582 $ 35,275,295 $ 17,730,890 6.7% 32.1% 20.1 x 21.2 x 19.3 x 15.6 x 20.1 x 17.3 x
Operating Statistics: Gross Forward Net Leverage Projected Projected
Share Diluted Total Real Estate Operating Portfolio (Debt to EBITDA Funds from Operations (FFO) EBITDA FFO
Company Name Ticker Price Shares Cash Debt Assets Assets Income Cap Rate
Total
Assets) FY17 FY18 FY17 FY18 Growth Growth
National Retail Property NNN 54.39 155,744,601.00 114,267.00 2,851,395.00 7,103,438 6,853,757 408,294.00 6.0% 40.1% 547,802.00 582,692.00 475,348.00 531,915.00 6.4% 11.9%
Apartment Investment and
Management AIV 51.55 157,189,447.00 72,595.00 4,075,665.00 6,190,004 5,723,475 866,861.00 15.1% 65.8% 867,660.00 1,244,647.00 973,894.00 1,721,476.00 43.4% 76.8%
American Homes 4 Rent AMH 25.03 286,114,637.00 175,214.00 2,310,743.00 9,001,481 8,492,575 235,338.00 2.8% 25.7% 486,402.00 554,023.00 195,938.00 253,284.00 13.9% 29.3%
American Campus Communities ACC 47.76 138,094,154.00 106,517.00 3,027,599.00 7,038,846 6,661,034 218,352.00 3.3% 43.0% 376,198.00 481,555.00 305,708.00 340,013.00 28.0% 11.2%
Liberty Property Trust LPT 51.57 147,899,354.00 95,822.00 3,092,746.00 6,934,394 4,937,518 649,324.00 13.2% 44.6% 529,278.00 738,954.00 545,427.00 730,838.00 39.6% 34.0%
Equity Residential EQR 78.34 369,405,161.00 116,318.00 8,817,939.00 20,394,209 19,814,741 858,560.00 4.3% 43.2% 1,591,220.00 1,644,285.00 1,372,130.00 1,470,917.00 3.3% 7.2%
Maximum 78.34 369,405,161.00 175,214.00 8,817,939.00 20,394,209 19,814,741 866,861.00 15.1% 65.8% 1,591,220.00 1,644,285.00 1,372,130.00 1,721,476.00 43.4% 76.8%
75th Percentile 53.69 253,883,339.50 115,805.25 3,829,935.25 8,526,970 8,082,870 806,251.00 11.4% 44.3% 787,695.50 1,118,223.75 866,777.25 1,285,897.25 36.7% 32.8%
Median 51.56 156,467,024.00 110,392.00 3,060,172.50 7,071,142 6,757,395 528,809.00 5.1% 43.1% 538,540.00 660,823.00 510,387.50 631,376.50 21.0% 20.6%
25th Percentile 48.71 149,860,665.75 98,495.75 2,895,446.00 6,960,507 5,957,864 278,577.00 3.5% 40.9% 497,121.00 561,190.25 348,118.00 387,988.50 8.3% 11.4%
Minimum 25.03 138,094,154.00 72,595.00 2,310,743.00 6,190,004 4,937,518 218,352.00 2.8% 25.7% 376,198.00 481,555.00 195,938.00 253,284.00 3.3% 7.2%
AvalonBay Communities Inc. AVB $ 208.42 139,994,154.0 $ 217,864 $ 5,905,993 $ 18,380,200 $ 17,730,890 $ 1,194,989 6.7% 32.1% $ 1,660,612 $ 1,826,185 $ 1,453,988 $ 1,684,535 10.0% 15.9%
Comparable Companies - Independent, U.S.-Based Residential REITs
($ USD in Millions Except Per Share and Per Unit Amounts in USD as Stated)

19. Projected
Balance Sheet: Units: FY2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
ASSETS:
Forward Property Net Operating
Income (NOI): $ M $ 1,452,126 $ 1,164,849 $ 1,195,382 $ 1,204,467 $ 1,479,999 $ 1,534,139
(÷) Assumed Cap Rate: % 6.7% 5.0% 5.0% 5.0% 5.0% 5.0%
Market Value of Gross Real
Estate Operating Assets: $ M $ 21,546,213 $ 23,296,977 $ 23,907,645 $ 24,089,348 $ 29,599,987 $ 30,682,780
Construction-in-Progress: $ M 2,800,000 2,600,000 2,400,000 1,400,000 1,200,000 1,100,000
(x) Market Value Adjustment: % 120.0% 120.0% 120.0% 120.0% 120.0% 120.0%
Market Value of Construction-
in-Progress: $ M 3,360,000 3,120,000 2,880,000 1,680,000 1,440,000 1,320,000
Cash & Cash-Equivalents: $ M 224,618 231,581 238,760 246,162 253,793 261,660
Accounts Receivable: $ M 138,891 143,197 147,636 152,213 156,931 161,796
Goodwill & Other Intangibles: $ M 221,998 226,660 231,420 236,280 241,242 246,308
(x) Market Value Adjustment: % 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%
Market Value of Goodwill &
Other Intangibles: $ M 66,599 67,998 69,426 70,884 72,372 73,892
Other Assets: $ M 80,964 82,665 84,400 86,173 87,983 89,830
Total Market Value of Assets: $ M $ 25,417,286 $ 26,942,417 $ 27,327,867 $ 26,324,779 $ 31,611,066 $ 32,589,958
LIABILITIES & EQUITY:
Debt & Other Borrowings: $ M 5,914,064 5,966,973 6,017,112 5,941,903 6,208,357 6,259,389
(x) Market Value Adjustment: % 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Market Value of Debt & Other
Borrowings: $ M (591,406) (596,697) (601,711) (594,190) (620,836) (625,939)
Accounts Payable: $ M (1,469,443) (1,643,683) (1,658,412) (1,807,789) (1,886,435) (2,103,865)
Other Liabilities: $ M 85,542 71,044 75,013 80,020 79,760 84,280
Share Price Noncontrolling Interests (NCI): $ M 4,792 4,078 4,585 4,490 4,756 4,886
Net Asset Value (NAV): $ M $ 23,446,771 $ 24,777,160 $ 25,147,342 $ 24,007,310 $ 29,188,311 $ 29,949,321
NAV per Share: $ as Stated $ 167.48 $ 176.99 $ 179.63 $ 171.49 $ 208.50 $ 213.93
Current Share Price: $ as Stated $ 215.30 $ 186.48 $ 203.00 $ 207.22 $ 225.44 $ 235.27
NAV per Share Premium /
(Discount) to Current: % (22.2%) (5.1%) (11.5%) (17.2%) (7.5%) (9.1%)
Cap Rate Implied by Current
Share Price: % 16.33% 12.38% 12.00% 10.44% 12.05% 11.74%
AvalonBay Communities Inc. - Net Asset Value (NAV) Model
( $ USD in Millions Except Per Share and Per Unit Amounts in USD as Stated)
$ 186.34

20. Conclusions
20

21. Acquisition Opportunities
• Data: Gaining access to consumer life style (generated from software-intensive houses)
will give AvalonBay amajor competitive advantage in the Residential REITs sector.
• Acquiring a company with information system technology: AvalonBay would gain
access to superior ability to operate home rentals very differently – this would allow
AvalonBay to improve all of its future acquisitions potentially increase revenue of all
properties.
Alternative Solutions
StrategicRational
Concerns
Recommendation: TechnologyFocus
21
• AvalonBay advanced coastal presence across 12 states, and they are gathering great
amount of tenant consumption data. New capabilities to analyze, distil, and make
actionable decisions could improve future estimates to $500 M in revenue on an
annualized basis.
• AvalonBay was the above the average rated for management, policy & disclosure,
risks & opportunities, performance indicators, stakeholder engagement and
driving sustainability (Member of Global Real Estate Sustainability
Benchmark since 2016)
• AvalonBay could invest much more in R&D, however there is the risk that it will
not acquire the necessary know-how ahead of other competitors.
• Extend R&D in sustainability and energy management software to enhance
building performance measures.
• How can AvalonBay ensure that company’s ability to raise rents based solely on
market conditions?
• Is acquiring new buildings in mid-quality markets and investments in R&D going
to maintain the growing level of FFO?

22. Acquisition Opportunities
• The combination of AvalonBay acquisition strategy and expertise to allocating
capital to grow seamlessly into their new communities will allow to deliver a
more experiential things.
• An acquisition of a geographic information system by AvalonBay will increase
their cap rates by screening property improvements, and bring additional income
opportunities.
Alternative Solutions
StrategicRational
Concerns
Recommendation: Acquisition Focus
22
• AvalonBay will have to rapidly adapt its analytics in order to benefit from exp ected
future growth in demand for apartments.
• While AvalonBay has heavily achieved compounded earning per share growth
during five years, investors might be cautious towards its stock.
• Combining both earnings growth and revenue growth AvalonBay ability to
automate basic customer service functions could prove to be an effective way to
boost Revenue and reduce costs.
• Heavy in-house R&D and acquisition of better analytics to better harness all the
data collect.
• Creating premium systems and offerings.
• Will AvalonBay be able to integrate acquisition strategy with a highly disruptive
processes company?
• Will AvalonBay be able to adopt superior analytics in afinancially feasible manner?

23. Acquisition Opportunities
• AvalonBay is diversified and both supply and demand forces are driving rents
up.
• AvalonBay will have a cost leadership strategy aim to achieve the lowest cost of
operation in their Industry.
• AvalonBay will acquire products & services that have unique features for which
consumers are willing to pay extra.
• A growing job market gives AvalonBay room to acquire and grow, such as by
providing unique housing design, outstanding consumer service, or
technological supremacy.
Alternative Solutions
Strategic Rational
Concerns
Recommendation: Economy and Demographics Focus
23
• AvalonBay is utilizing its working capital more efficiently – a decrease in Capex is
boosting earnings and revenue growth.
• AvalonBay has extended in 2016 partnership with MRI Software for multifamily
Real Estate Property Management to have more flexibility on integrating both
proprietary and third party solutions empowering technology operations.
• How will AvalonBay management adapt its systems and amenities with
millennials being the largest living adult generation?
• Will AvalonBay be able to deliver distinct characteristic and benefits in
large scale to new consumer demands?
• What role will AvalonBay play in a market downturn?
• Interest rates can affect REITs performance, especially in the short-term – however,
AvalonBay after 2008 always kept its debt to equity and debt to total asset below the
average comparing to its peers.
• By using partnership as an innovation source, AvalonBay would be able to assess
more ideas. However, fully leveraging this resource often requires a tight
integration of third parties into the development process, which also increases
complexity.