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Investing in AvalonBay Communities: A Must-Know Company Overview

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Brief history

Headquartered in Arlington, Virginia, AvalonBay Communities (AVB) was founded by Gilbert M. Meyer in 1978. Avalon Properties, Inc. was incorporated in the state of Maryland as a REIT in 1993 and in the same year, the company raised $400 million in a public offering. AvalonBay Communities was the result of a merger between Avalon Properties, Inc. and Bay Apartment Communities in 1998. The latter was formed as a REIT in 1994, assuming the assets of San Jose-based Greenbrier Development Company, which was also founded in 1978. AvalonBay Communities is a part of an S&P 500 index.

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Business interest

AvalonBay Communities is a leading REIT focused on developing, redeveloping, acquiring, and managing high-quality apartment communities in high barrier-to-entry markets of the United States. The company’s portfolio of assets is comprised of 283 apartment communities consisting of 82,974 rental apartment units.

Competitors

AvalonBay Communities is the second-largest apartment REIT company in the US after Equity Residential (EQR) with a market capitalization of $22.8 billion. The company competes with a number of other apartment REITs in the US for rental properties. In addition, competition also comes from other forms of rental properties and single-family housing that provide housing alternatives to potential residents of multifamily properties. On the other hand, apartment REITs also compete on residents’ decision of owning a home or renting an apartment. When home prices are high, renting becomes more attractive and vice versa.

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Apart from Equity Residential (EQR), major competitors of AvalonBay Communities in the apartment REIT space include California-based Essex Property Trust (ESS), Colorado-based UDR (UDR), Texas-based Camden Property Trust (CPT), Colorado-based Apartment Investment & Management Company (AIV), and Tennessee-based Mid-America Apartment Communities (MAA). The iShares Residential Real Estate Capped ETF (REZ) invests 8.25% of its portfolio in AvalonBay Communities.

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