$24,703,191,114. 137,330,988. markets that do not have these characteristics. capable associates. Fund I disposed of the last of its communities in 2014, and was dissolved in April 2015. $428,370,000. In addition, we sold other real estate primarily composed of ancillary real estate and recognized a gain in accordance with GAAP of $10,224,000. Development Strategy. We select land for development and follow established procedures that we believe minimize both the cost and the risks of development. As one of the largest developers of multifamily rental apartment communities in third parties (such as unimproved ground floor retail space, municipal garages or parks). Costs we incur in connection with these activities may be accounted for as additional invested capital in the community or we may earn fee income for providing these services. Particularly with large scale, urban in-fill developments, we may engage in significant environmental remediation efforts to prepare a site for construction. required to make tax protection payments with respect to any of these assets. From time to time we may engage a third party to manage leasing and/or maintenance activity at one or more of our communities. See “Tax Matters” below. and certain state income tax laws at the corporate level on our taxable net income to the extent taxable net income is distributed to our stockholders. We expect to make sufficient distributions to avoid income tax at the corporate level. While we believe that we are organized and qualified as a REIT and we intend to operate in a manner that will allow us to continue to qualify as a REIT, there can be no assurance that we will be successful in this regard. Qualification as a REIT involves the application of highly technical and complex provisions of the Code for which there are limited ” SEC. In addition, the charters of our Board's Nominating and Corporate Governance Committee, Audit Committee and Compensation Committee, as well as our Director Independence Standards, Corporate Governance Guidelines, Code of Business Conduct and Ethics, Policy Regarding Shareholder Rights such laws or regulations and the number of our communities that become subject to any such restriction on rent increases, our revenues and net income could be adversely affected. For example, in 2016 in Mountain View, California, the voters passed a referendum that would limit rent increases on existing tenants (but not on new move-ins) in communities built before 1995. We have three communities with a total of 946 apartment homes that would be subject to the new law, although the implementation of the Mountain View ordinance is currently stayed in connection with a lawsuit challenging the ordinance filed by the California Apartment Association. profitability for new investments. Item 7. sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, the trading price of our stock would experience downward pressure if a significant number of our stockholders sell shares of our stock in order to pay taxes owed on dividends. could occur, which reputation. As further described in Item 2. be obligated to repay any mortgage indebtedness or other obligations related to the community. If an uninsured liability to a third party were to occur, we would incur the cost of defense and settlement with, or court ordered damages to, that third party. A significant uninsured property or liability loss could materially and adversely affect our business and our financial condition and results of operations. approval, which could allow the Board to issue one or more classes or series of preferred stock that could discourage or delay a tender offer or a change in control. Current Communities Established Communities: New England Metro NY/NJ Mid-Atlantic Pacific Northwest Northern California Southern California Total Established Other Stabilized Communities: New England Metro NY/NJ Mid-Atlantic Pacific Northwest Northern California Southern California Non-Core Total Other Stabilized Lease-Up Communities Redevelopment Communities Total Current Communities Development Communities Development Rights Our holdings under each of the above categories are discussed on the following pages. New England Boston, MA Fairfield County, CT Metro NY/NJ Long Island, NY Northern New Jersey Central New Jersey New York, NY New York Suburban Mid-Atlantic Washington Metro Pacific Northwest Seattle, WA Northern California Oakland-East Bay, CA San Francisco, CA San Jose, CA Southern California Los Angeles, CA Orange County, CA San Diego, CA Non-Core development. CURRENT COMMUNITIES NEW ENGLAND Boston, MA Avalon at Lexington Avalon Oaks Eaves Quincy Avalon Essex Avalon Oaks West Avalon Orchards Avalon at Newton Highlands(11) Avalon at The Pinehills Eaves Peabody Avalon at Bedford Center Avalon Chestnut Hill Avalon Shrewsbury Avalon Danvers Avalon at Lexington Hills Avalon Acton Avalon Sharon Avalon at Center Place(13) Avalon at Hingham Shipyard Avalon Northborough Avalon Blue Hills Avalon Cohasset Avalon Andover Eaves Burlington Avalon at Prudential Center III Avalon at Prudential Center II Avalon at Prudential Center I Avalon Burlington Avalon Bear Hill Eaves North Quincy Avalon Natick Fairfield-New Haven, CT Eaves Trumbull Eaves Stamford Avalon Wilton I Avalon Valley Avalon on Stamford Harbor Avalon New Canaan(12) Avalon at Greyrock Place Avalon Danbury Avalon Darien Avalon Milford I Avalon Huntington Avalon Norwalk Avalon Wilton II Avalon Shelton Avalon East Norwalk METRO NY/NJ Long Island, NY Avalon Commons Avalon Towers Avalon Court Avalon at Glen Cove(13) Avalon Pines Avalon at Glen Cove North(13) Avalon Charles Pond Avalon Rockville Centre Avalon Garden City Avalon Westbury Northern New Jersey Avalon Cove Avalon at Edgewater Avalon at Florham Park Avalon Lyndhurst Avalon North Bergen Avalon at Wesmont Station Avalon at Wesmont Station II Avalon Hackensack(13) Central New Jersey Avalon Run(10) Avalon Princeton Junction Avalon at Freehold Avalon Run East Avalon at Tinton Falls Avalon West Long Branch Avalon Somerset New York, NY Avalon Riverview I(13) Avalon Bowery Place I Avalon Riverview North(13) Avalon Bowery Place II Avalon Morningside Park(13) Avalon Fort Greene Avalon Midtown West Avalon Clinton North Avalon Clinton South New York Suburban, NY Eaves Nanuet Avalon Green Avalon Willow The Avalon Avalon White Plains Avalon Green II MID-ATLANTIC Baltimore, MD Avalon at Fairway Hills(10) Eaves Columbia Town Center Avalon Russett Washington Metro Avalon at Foxhall Avalon at Gallery Place Eaves Washingtonian Center I Eaves Washingtonian Center II Avalon at Grosvenor Station Avalon at Traville Eaves Fair Lakes AVA Ballston Eaves Fairfax City Avalon Crescent Avalon at Arlington Square Avalon Park Crest Fairfax Towers AVA H Street Archstone First & M The Albemarle Eaves Tunlaw Gardens The Statesman Eaves Glover Park The Consulate Oakwood Philadelphia(15) Avalon Ballston Place Eaves Tysons Corner Archstone Ballston Square Archstone Courthouse Place Avalon Reston Landing Oakwood Arlington(15) PACIFIC NORTHWEST Seattle, WA Avalon Redmond Place Avalon at Bear Creek Avalon Bellevue Avalon RockMeadow Avalon ParcSquare Avalon Brandemoor AVA Belltown Avalon Meydenbauer Avalon Towers Bellevue(13) AVA Queen Anne Avalon Brandemoor II AVA Ballard Eaves Redmond Campus Archstone Redmond Lakeview NORTHERN CALIFORNIA Oakland-East Bay, CA Avalon Fremont Eaves Dublin Eaves Pleasanton Eaves Union City Eaves Fremont Avalon Union City Avalon Walnut Creek(13) Eaves Walnut Creek Avalon Walnut Ridge I Avalon Walnut Ridge II San Francisco, CA Eaves Daly City AVA Nob Hill Eaves San Rafael Eaves Foster City Avalon Pacifica Avalon Sunset Towers Eaves Diamond Heights Avalon at Mission Bay North Avalon at Mission Bay III Avalon Ocean Avenue Archstone San Bruno Archstone San Bruno II Archstone San Bruno III San Jose, CA Avalon Campbell Eaves San Jose Avalon on the Alameda Avalon Silicon Valley Avalon Mountain View(12) Eaves Creekside Avalon at Cahill Park Avalon Towers on the Peninsula Avalon Willow Glen Eaves West Valley Eaves Mountain View at Middlefield Eaves West Valley II SOUTHERN CALIFORNIA Orange County, CA AVA Newport Avalon Mission Viejo Eaves South Coast Eaves Santa Margarita Eaves Huntington Beach Avalon Anaheim Stadium Avalon Irvine The Springs(6) Eaves Lake Forest Avalon Irvine II Eaves Seal Beach San Diego, CA Avalon at Mission Bay Eaves Mission Ridge AVA Cortez Hill Avalon Fashion Valley Eaves San Marcos Eaves Rancho Penasquitos Archstone La Jolla Colony Eaves La Mesa Los Angeles, CA AVA Burbank Avalon Woodland Hills Eaves Warner Center Avalon at Glendale(13) Avalon Burbank Avalon Camarillo Avalon Wilshire Avalon Encino Avalon Warner Place Eaves Phillips Ranch Eaves San Dimas Eaves San Dimas Canyon AVA Pasadena Eaves Cerritos Avalon Del Rey Avalon Simi Valley Archstone Studio City II Archstone Studio City III Avalon Calabasas Avalon Oak Creek Avalon Santa Monica on Main Avalon Del Mar Station Eaves Old Town Pasadena Eaves Thousand Oaks Eaves Los Feliz Oakwood Toluca Hills(15) Eaves Woodland Hills Avalon Thousand Oaks Plaza Avalon Pasadena Archstone Studio City Non-Core Archstone Lexington Archstone Memorial Heights DEVELOPMENT COMMUNITIES Avalon Exeter(13) Avalon West Chelsea/AVA High Line(13) Avalon Mosaic Avalon/AVA Assembly Row(13) AVA University District Avalon Dublin Station II Avalon Morrison Park AVA 55 Ninth Avalon Bloomingdale Avalon Wharton Avalon Ossining AVA Little Tokyo AVA Stuart Street Avalon Canton Avalon at Stratford Avalon Bloomfield Station Avalon Willoughby Square/AVA DoBro Avalon Huntington Station Avalon Alderwood I Avalon Hayes Valley Avalon Baker Ranch Avalon Vista Avalon San Dimas Avalon Glendora Maple Leaf(9) Avalon Arlington North Avalon Berkeley Archstone Toscano Archstone Memorial Heights Phase I UNCONSOLIDATED COMMUNITIES(14) Avalon at Mission Bay North II(12) Avalon Chrystie Place I(12) South Hills Apartments(6) Weymouth Place(6) Avalon at Rutherford Station(6) Avalon Fair Oaks(7) Avalon Bellevue Park(7) Eaves Tustin(7) Eaves Los Alisos(7) Eaves Carlsbad(7) Eaves Rancho San Diego(7) Briarwood Apartments(7) Eaves Gaithersburg(7) Eaves Rockville(7) Eaves Plainsboro(7) Captain Parker Arms(7) Avalon Watchung(7) Archstone North Point(9) Avalon Station 250(8) Avalon Kips Bay(8) Brandywine(12) Archstone Woodland Park(9) Avalon Grosvenor Tower(8) Eaves Sunnyvale(8) Boca Town Center(8) Avalon Kirkland at Carillon Point(8) Avalon Studio 4041(8) Avalon Marina Bay(8) (13) Avalon Venice on Rose(8) As of December 31, 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. As of December 31, Development Rights In addition, two Development Rights are additional development phases of existing stabilized operating communities we own, and will be constructed on land currently associated with those operating communities. During the next 12 months we expect to commence construction of apartment communities on three of the Development Rights for which we currently own the land, with a carrying basis of $49,584,000. or to continue to pursue once an investment in a Development Right is made, are business judgments that we make after we perform financial, demographic and other analyses. In the event that we do not proceed with a Development Right, we generally would not recover any of the capitalized costs incurred in the pursuit of those communities, unless we were to recover amounts in connection with the sale of land; however, we cannot guarantee a recovery. Pre-development costs incurred in the pursuit of Development Rights, for which future development is not yet considered probable, are expensed as incurred. In addition, if the status of a Development Right changes, making future development no longer probable, any capitalized pre-development costs are charged to expense. During Boston, MA Fairfield-New Haven, CT New York Suburban New Jersey Baltimore, MD Washington, DC Metro Seattle, WA Oakland-East Bay, CA San Francisco, CA Orange County, CA Los Angeles, CA Total $522,850,000. first $50,000,000 of loss. make terrorism insurance available through a federal back-stop The limited cyber liability insurance is part of our professional liability coverage and has limits of $15,000,000 per occurrence and in the annual aggregate. The cyber liability coverage protects us from certain claims arising out of data breach, wrongful acts, data privacy issues and media liability. Quarter ended March 31 Quarter ended June 30 Quarter ended September 30 Quarter ended December 31 2017. October 1 - October 31, 2013 November 1 - November 30, 2013 December 1 - December 31, 2013 Information regarding securities authorized for issuance under equity compensation plans is included in the section entitled Revenue: Rental and other income Management, development and other fees Total revenue Expenses: Operating expenses, excluding property taxes Property taxes Interest expense, net Loss on interest rate contract Loss on extinguishment of debt, net Depreciation expense General and administrative expense Expensed acquisition, development and other pursuit costs Casualty and impairment loss Total expenses Equity in (loss) income of unconsolidated entities Gain on sale of land Gain on acquisition of unconsolidated entity Income from continuing operations Discontinued operations: Income from discontinued operations Gain on sale of communities Total discontinued operations Net income Net loss attributable to noncontrolling interests Net income attributable to the Company Net income attributable to common stockholders Per Common Share and Share Information: Earnings per common share—basic: Income from continuing operations attributable to common stockholders (net of dividends attributable to preferred stock) Discontinued operations attributable to common stockholders Net income attributable to common stockholders Weighted average shares outstanding—basic(1) Earnings per common share—diluted: Income from continuing operations attributable to common stockholders (net of dividends attributable to preferred stock) Discontinued operations attributable to common stockholders Net income attributable to common stockholders Weighted average shares outstanding—diluted Cash dividends declared Other Information: Net income attributable to the Company Depreciation—continuing operations Depreciation—discontinued operations Interest expense, net—continuing operations(1) Interest expense, net—discontinued operations(1) EBITDA(2) Funds from Operations(3) Number of Current Communities(4) Number of apartment homes Balance Sheet Information: Real estate, before accumulated depreciation Total assets Notes payable and unsecured credit facilities Cash Flow Information: Net cash flows provided by operating activities Net cash flows used in investing activities Net cash flows (used in) provided by financing activities consolidated borrowings; above. Net income attributable to the Company Depreciation—real estate assets, including discontinued operations and joint venture adjustments Distributions to noncontrolling interests, including discontinued operations Gain on sale of unconsolidated entities holding previously depreciated real estate assets Write-down of investment in unconsolidated real estate entities Gain on sale of previously depreciated real estate assets Gain on acquisition of unconsolidated real estate entity Funds from Operations attributable to common stockholders Weighted average shares outstanding—diluted FFO per common share—diluted We regularly evaluate the allocation of our investments by the amount of invested capital and by product type within our individual markets. newly developed, acquired and existing operating communities and an increase in real estate sales and related gains. These amounts were partially offset by increases in depreciation and interest expense and a loss on extinguishment of debt in the current year, coupled with a gain on extinguishment of debt in the prior year. debt, preferred equity and/or common equity); the sale of apartment communities; or through the formation of joint ventures. See the discussion underLiquidity and Capital Resources. NOI related to disposed communities; and capital market and financing activity. A comparison of our operating results for Revenue: Rental and other income Management, development and other fees Total revenue Expenses: Direct property operating expenses, excluding property taxes Property taxes Total community operating expenses Corporate-level property management and other indirect operating expenses Investments and investment management expense Expensed acquisition, development and other pursuit costs Interest expense, net Loss on interest rate contract Loss on extinguishment of debt, net Depreciation expense General and administrative expense Casualty and impairment loss Gain on sale of land Gain on acquisition of unconsolidated real estate entity Total other expenses (Loss) equity in income of unconsolidated entities Income from continuing operations Discontinued operations: Income from discontinued operations Gain on sale of communities Total discontinued operations Net income Net loss attributable to noncontrolling interests Net income attributable to common stockholders NOI is considered by management to be an important and appropriate supplemental performance measure to net income because it helps both investors and management to understand the core operations of a community or communities prior to the allocation of any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an Net income Indirect operating expenses, net of corporate income Investments and investment management expense Expensed acquisition, development and other pursuit costs Interest expense, net Loss on interest rate contract Loss on extinguishment of debt, net General and administrative expense Loss (equity) in income of unconsolidated entities Depreciation expense Casualty and impairment loss Gain on sale of real estate assets Income from discontinued operations Gain on acquisition of unconsolidated real estate entity Net operating income Established Communities Other Stabilized Communities Development and Redevelopment Communities Total 2014. 2017. prior years. 2017. 2017. Expensed acquisition, development and other pursuit costs, net of recoveries primarily reflect the costs incurred related to our asset investment activity, abandoned pursuit costs, which include costs incurred for development pursuits not yet considered probable for development, as well as the abandonment of Development Rights, acquisition pursuits and disposition Depreciation expense increased business interruption insurance proceeds. $1,122,488,000. rating. 2017. 2016. issued debt as a yield adjustment. meet our currently anticipated liquidity needs, we cannot assure you that additional debt financing or debt or equity offerings will be available or, if available, that they will be on terms we consider satisfactory. $211,000. Tax-exempt bonds Fixed rate(4) Eaves Washingtonian Center I Avalon Oaks Avalon Oaks West Avalon at Chestnut Hill Avalon Westbury Variable rate(2)(4) Avalon at Mountain View Avalon at Mission Viejo AVA Nob Hill Avalon Campbell Avalon Pacifica Avalon Bowery Place I Avalon Acton Avalon Walnut Creek Avalon Walnut Creek Avalon Morningside Park Avalon Clinton North Avalon Clinton South Avalon Midtown West Archstone San Bruno Avalon Calabasas Conventional loans(4) Fixed rate $100 Million unsecured notes $150 Million unsecured notes $250 Million unsecured notes $250 Million unsecured notes $250 Million unsecured notes $250 Million unsecured notes $450 Million unsecured notes $250 Million unsecured notes $400 Million unsecured notes $350 Million unsecured notes Avalon at Tysons West Avalon Orchards Avalon at Arlington Square Avalon Crescent Avalon at Silicon Valley Avalon Darien Avalon Greyrock Place Avalon Walnut Creek Avalon Shrewsbury Eaves Trumbull Avalon at Stamford Harbor Avalon Freehold Avalon Run East Eaves Nanuet Avalon at Edgewater Avalon Foxhall Avalon at Gallery Place Avalon at Traville Avalon Bellevue Avalon on The Alameda Avalon at Mission Bay North Fairfax Towers Eaves Phillips Ranch AVA Pasadena Eaves Seal Beach Oakwood Toluca Hills Mountain View at Middlefield Tunlaw Gardens Eaves Glover Park Oakwood Philadelphia Oakwood Arlington Eaves North Quincy Avalon Thousand Oaks Plaza Archstone La Jolla Colony Eaves Old Town Pasadena Eaves Thousand Oaks Avalon Walnut Ridge I Eaves Los Feliz Avalon Oak Creek Avalon Del Mar Station Archstone Courthouse Place Avalon Pasadena Eaves West Valley Eaves Woodland Hills Avalon Russett Archstone First + M Archstone San Bruno II Avalon Westbury Archstone Lexington Avalon Andover Archstone San Bruno III Variable rate(2)(4) Avalon Walnut Creek Avalon Calabasas Total indebtedness—excluding unsecured credit facility Future Financing and Capital Needs—Portfolio and operating results, and our proportionate share of their operating results. Fund I 1. The Springs—Corona, CA(4) 2. Avalon Rutherford Station—East Rutherford, NJ 3. South Hills Apartments—West Covina, CA 4. Weymouth Place—Weymouth, MA Total Fund I Fund II 1. Avalon Bellevue Park—Bellevue, WA 2. Avalon Fair Oaks—Fairfax, VA 3. The Apartments at Briarwood—Owings Mills, MD 4. Eaves Gaithersburg—Gaithersburg, MD(5) 5. Eaves Tustin—Tustin, CA 6. Eaves Los Alisos—Lake Forest, CA 7. Eaves Plainsboro—Plainsboro, NJ(5) 8. Eaves Carlsbad—Carlsbad, CA 9. Eaves Rockville—Rockville, MD 10 Captain Parker Arms—Lexington, MA 11 Eaves Rancho San Diego—San Diego, CA 12 Avalon Watchung—Watchung, NJ Total Fund II U.S. Fund 1. Eaves Sunnyvale—Sunnyvale, CA(5) 2. Avalon Studio 4041—Studio City, CA 3. Marina Bay—Marina del Rey, CA(6) 4. Avalon Venice on Rose—Venice, CA 5. Boca Town Center—Boca Raton, FL(7) 6. Avalon Station 250—Dedham, MA 7. Avalon Grosvenor Tower—Bethesda, MD 8. Avalon Kips Bay—New York, NY 9. Avalon Kirkland at Carillon—Kirkland, WA Total U.S. Fund AC JV(8) 1. Archstone North Point—Cambridge, MA(9) 2. Archstone Woodland Park—Herndon, VA(9) Total AC JV Residual JV(11) 1. SWIB Total Residual JV Other Operating Joint Ventures 1. Avalon Chrystie Place I—New York, NY(10) 2. Avalon at Mission Bay North II—San Francisco, CA(10) 3. Archstone Brandywine—Washington, DC Off-Balance Sheet Arrangements In the future, in the event There are no other material lines of credit, side agreements, financial guarantees or any other derivative financial instruments related to or between our unconsolidated real estate entities and us. In evaluating our capital structure and overall leverage, management takes into consideration our proportionate share of the indebtedness of unconsolidated entities in which we have an interest. Debt Obligations Interest on Debt Obligations Capital Lease Obligations(1) Operating Lease Obligations(1) Inflation and Deflation Litigation Reform Act operations; and composition; and We defer external costs associated with originating new leases, recognizing the impact of these costs in earnings over the term of the lease. $4,520,000. $4,018,000. carrying amount exceeds the estimated fair value of the property. We future years. December 31, 1994 and have not revoked such election. A corporate REIT is a legal entity which holds real estate interests and must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted taxable income to stockholders. As a REIT, we generally will not be subject to corporate level federal income tax on taxable income if we distribute 100% of our taxable income to our stockholders over time periods allowed under the Code. If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income taxes at regular corporate rates (subject to any applicable alternative minimum tax) and may not be able to elect to qualify as a REIT for four subsequent taxable years. For example, if we failed to qualify as a REIT in $415,669,000. $334,076,000. 18, 2017. 18, 2017. Equity compensation plans approved by security holders(1) Equity compensation plans not approved by security holders(4) Total 18, 2017. Index to Financial Statements Consolidated Financial Statements and Financial Statement Schedule: All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. ASSETS Real estate: Land Buildings and improvements Furniture, fixtures and equipment Less accumulated depreciation Net operating real estate Construction in progress, including land Land held for development Operating real estate assets held for sale, net Total real estate, net Cash and cash equivalents Cash in escrow Resident security deposits Investments in unconsolidated real estate entities Deferred financing costs, net Deferred development costs Prepaid expenses and other assets Total assets LIABILITIES AND EQUITY Unsecured notes, net Variable rate unsecured credit facility Mortgage notes payable Dividends payable Payables for construction Accrued expenses and other liabilities Accrued interest payable Resident security deposits Liabilities related to real estate assets held for sale Total liabilities Redeemable noncontrolling interests Equity: Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at both December 31, 2013 and December 31, 2012; zero shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively Common stock, $0.01 par value; 280,000,000 and 140,000,000 shares authorized at December 31, 2013 and December 31, 2012, respectively; 129,416,695 and 114,403,472 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively Additional paid-in capital Accumulated earnings less dividends Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Revenue: Rental and other income Management, development and other fees Total revenue Expenses: Operating expenses, excluding property taxes Property taxes Interest expense, net Loss on interest rate contract Loss on extinguishment of debt, net Depreciation expense General and administrative expense Expensed acquisition, development and other pursuit costs Casualty and impairment loss Total expenses Equity in (loss) income of unconsolidated entities Gain on sale of land Gain on acquisition of unconsolidated entity Income from continuing operations Discontinued operations: Income from discontinued operations Gain on sale of real estate assets Total discontinued operations Net income Net loss attributable to noncontrolling interests Net income attributable to common stockholders Other comprehensive income: Unrealized loss on cash flow hedges Cash flow hedge losses reclassified to earnings Comprehensive income Earnings per common share—basic: Income from continuing operations attributable to common stockholders Discontinued operations attributable to common stockholders Net income attributable to common stockholders Earnings per common share—diluted: Income from continuing operations attributable to common stockholders Discontinued operations attributable to common stockholders Net income attributable to common stockholders Balance at December 31, 2010 Net income attributable to common stockholders Unrealized loss on cash flow hedges Change in redemption value of redeemable noncontrolling interest Noncontrolling interest consolidation and income allocation Dividends declared to common stockholders Issuance of common stock, net of withholdings Amortization of deferred compensation Balance at December 31, 2011 Net income attributable to common stockholders Unrealized loss on cash flow hedges Cash flow hedge losses reclassified to earnings Change in redemption value of redeemable noncontrolling interest Noncontrolling interest consolidation and income allocation Dividends declared to common stockholders Issuance of common stock, net of withholdings Amortization of deferred compensation Balance at December 31, 2012 Net income attributable to common stockholders Cash flow hedge losses reclassified to earnings Change in redemption value of redeemable noncontrolling interest Noncontrolling interest consolidation and income allocation Dividends declared to common stockholders Issuance of common stock, net of withholdings Amortization of deferred compensation Balance at December 31, 2013 Cash flows from operating activities: Net income Adjustments to reconcile net income to cash provided by operating activities: Depreciation expense Depreciation expense from discontinued operations Amortization of deferred financing costs and debt (premium) discount Amortization of stock-based compensation Equity in loss (income) of, and return on, unconsolidated entities and noncontrolling interests, net of eliminations Cash flow hedge losses reclassified to earnings Casualty loss and impairment of real estate assets Loss on extinguishment of debt, net Gain on sale of real estate assets Gain on acquisition of unconsolidated entity (Increase) decrease in cash in operating escrows (Increase) decrease in resident security deposits, prepaid expenses and other assets Decrease (increase) in accrued expenses, other liabilities and accrued interest payable Net cash provided by operating activities Cash flows from investing activities: Development/redevelopment of real estate assets including land acquisitions and deferred development costs Acquisition of real estate assets, including partnership interest Capital expenditures—existing real estate assets Capital expenditures—non-real estate assets Proceeds from exchange/sale of real estate, net of selling costs Increase in payables for construction Decrease in cash in construction escrows Acquisition of mortgage note Decrease (increase) in investments in unconsolidated real estate entities Net cash used in investing activities Cash flows from financing activities: Issuance of common stock Dividends paid Issuance of mortgage notes payable Repayments of mortgage notes payable, including prepayment penalties Issuance of unsecured notes Settlement of interest rate contract Repayment of unsecured notes Payment of deferred financing costs and issuance discounts Redemption of units for cash by minority partners Acquisition of joint venture partner equity interest Distributions to DownREIT partnership unitholders Distributions to joint venture and profit-sharing partners Redemption of preferred interest obligation Net cash (used in) provided by financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Cash paid during the year for interest, net of amount capitalized an AvalonBay Value Added Fund, L.P. (“Fund I”) subsidiary. California. homes (unaudited). recognition. In accordance with the Company's standard lease terms, rental payments are generally due on a monthly basis. Any cash concessions given at the inception of the lease are amortized over the approximate life of the lease, which is generally one year. The Company records a charge to income for outstanding receivables greater than 90 days past due as a component of operating expenses, excluding property taxes on the accompanying Consolidated Statements of Comprehensive Income. continuing involvement. The Company acquisitions of operating communities. The Company valued land based on a market approach, looking to recent sales of similar properties, adjusting for differences due to location, the state of entitlement as well as the shape and size of the parcel. Improvements to land were valued using a replacement cost approach and consider the structures and amenities included for the communities. The approach applied industry standard replacement costs adjusted for geographic specific considerations and reduced by estimated depreciation. The value for furniture, fixtures and equipment was also determined based on a replacement cost approach, considering costs for both items in the apartment homes as well as common areas and was adjusted for estimated depreciation. The fair value of buildings acquired was estimated using the replacement cost approach, assuming the buildings were vacant at acquisition. The replacement cost approach considered the composition of structures acquired, adjusted for an estimate of depreciation. The estimate of depreciation was made considering industry standard information, depreciation curves for the identified asset classes and estimated useful life of the acquired property. The value of the acquired lease-related intangibles considered the estimated cost of leasing the apartment homes as if the acquired building(s) were vacant, as well as the value of the current leases relative to market-rate leases. The in-place lease value was determined using an average total lease-up time, the number of apartment homes and net revenues generated during the lease-up time. The lease-up period for an apartment community was assumed to be 12 months to achieve stabilized occupancy. Net revenues used market rent considering actual leasing and industry rental rate data. The value of current leases relative to a market-rate lease was based on market rents obtained for market comparables, and considered a market derived discount rate. Given the significance of unobservable inputs used in the value of real estate assets acquired, the Company classified them as Level 3 prices in the fair value hierarchy. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed. 2015. Net income attributable to common stockholders GAAP gain on sale of communities (in excess of) less than tax gain Depreciation/amortization timing differences on real estate Tax compensation expense less than (in excess of) GAAP Casualty and impairment loss Other adjustments Taxable net income Ordinary income 15% capital gain (20% for 2013) Unrecaptured §1250 gain 2016 and 2015, respectively. Deferred financing costs, except for costs associated with line-of-credit arrangements, are presented as a direct deduction from the related debt liability. Accumulated amortization of deferred financing costs related to the Company's Credit Facility was $6,490,000 and $4,967,000 as of December 31, 2016 and 2015, respectively, and was included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets. Basic and diluted shares outstanding Weighted average common shares—basic Weighted average DownREIT units outstanding Effect of dilutive securities Weighted average common shares—diluted Calculation of Earnings per Share—basic Net income attributable to common stockholders Net income allocated to unvested restricted shares Net income attributable to common stockholders, adjusted Weighted average common shares—basic Earnings per common share—basic Calculation of Earnings per Share—diluted Net income attributable to common stockholders Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations Adjusted net income attributable to common stockholders Weighted average common shares—diluted Earnings per common share—diluted Dividends per common share share. The Company also evaluates its related to the Edgewater casualty loss, $1,509,000 and $2,494,000 in income related business interruption insurance proceeds for the years ended December 31, 2016, 2015 and 2014, respectively. Company's financial condition or results of operations. The Company combines the operating, investing and financing portions of cash flows attributable to discontinued operations with the respective cash flows from continuing operations on the accompanying Consolidated Statements of Cash Flows. The Company had 2016. ” presentations as a result of changes in held for sale classification and disposition activity. classified as held for sale, if any, as of December 31, Fixed rate unsecured notes(1) Fixed rate mortgage notes payable—conventional and tax-exempt(2) Variable rate mortgage notes payable—conventional and tax-exempt Total notes payable and unsecured notes Credit Facility Total mortgage notes payable, unsecured notes and Credit Facility The following debt activity occurred during the year ended December 31, 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Thereafter 2016. compensation cost. Land and land improvements Buildings and improvements FF&E Construction-in-progress, including land and land held for development(1) In-place lease intangibles Other assets Total consolidated assets Interest in unconsolidated real estate entities Total assets Fair value of assumed mortgage notes payable Liability for preferred obligations Other liabilities Noncontrolling interest Net Assets Acquired Common shares issued Cash consideration Revenues Loss attributable to common shareholders(1) Revenues Income from continuing operations Earnings per common share—diluted (from continuing operations) $1,768,000 and was reported as a reduction of equity in income of unconsolidated real estate entities on the accompanying Consolidated Statements of Comprehensive Income. U.S. Fund as part of the Archstone Acquisition. construct AVA North Point and the future operating budget for the community upon completion. AVA North Point is the third phase of a master planned development, the other phases of which are owned through the AC JV. During 2016, the Company provided the partners of the AC JV the opportunity to acquire the AVA North Point land parcel owned by the Company as required in the ROFO provisions for the AC JV. After certain partners of the AC JV declined to participate, the Company entered into the new joint venture and sold the land parcel to the venture in exchange for a cash payment and a capital account credit, and is overseeing the development in exchange for a developer fee. Upon sale of the land parcel, the Company recognized a gain of $10,621,000, included in gain on sale of other real estate on the accompanying Consolidated Statements of Comprehensive Income. At December 31, 2016, excluding costs incurred in excess of equity in the underlying net assets of North Point II JV, LP, the Company has an equity investment of $12,398,000. Assets: Real estate, net Other assets Total assets Liabilities and partners' capital: Mortgage notes payable and credit facility Other liabilities Partners' capital Total liabilities and partners' capital Rental and other income Operating and other expenses Gain on sale of real estate(1) Interest expense, net Depreciation expense Net income In conjunction with the formation of Fund These amounts are being amortized over the lives of the underlying assets as a component of equity in income of unconsolidated real estate entities on the accompanying Consolidated Statements of Comprehensive Income. Fund I(1) Fund II(2) CVP I, LLC(3) MVP I, LLC(4) Avalon Del Rey, LLC(5) Juanita Village(6) U.S. Fund(7) AC JV(7) Brandywine(7) Residual JV(7)(8) Total a net recovery of $7,681,000. These amounts are primarily comprised of property tax and mortgage insurance refunds. GAAP of Crystal House I & II Avalon at Decoverly Avalon at Dublin Station I Archstone Vanoni Ranch Avalon on the Sound East Archstone Wheaton Station Avalon Rosewalk Total of 2013 asset sales(1) Total of 2012 asset sales Total of 2011 asset sales as of and for periods prior to December 31, 2013, are included in income from continuing operations on the accompanying Consolidated Statements of Comprehensive Income. Rental income Operating and other expenses Interest expense, net Loss on extinguishment of debt Depreciation expense Income (loss) from discontinued operations During the years ended December 31, 2016 and 2014, the Company received $417,000 and $1,933,000 in legal recoveries. There were no material receipts during the year ended December 31, 2015, excluding amounts for the Residual JV. Operating Lease Obligations Capital Lease Obligations(1) 2016. Net income Indirect operating expenses, net of corporate income Investments and investment management expense Expensed acquisition, development and other pursuit costs Interest expense, net Loss on interest rate contract Loss on extinguishment of debt, net General and administrative expense Equity in loss (income) of unconsolidated entities Depreciation expense Casualty and impairment loss Gain on sale of real estate assets Income from discontinued operations Gain on acquisition of unconsolidated real estate entity Net operating income adjusted For the period ended December 31, 2013 Established New England Metro NY/NJ Mid-Atlantic Pacific Northwest Northern California Southern California Total Established(2) Other Stabilized Development / Redevelopment Land Held for Future Development Non-allocated(3) Total For the period ended December 31, 2012 Established New England Metro NY/NJ Mid-Atlantic Pacific Northwest Northern California Southern California Total Established(2) Other Stabilized Development / Redevelopment Land Held for Future Development Non-allocated(3) Total For the period ended December 31, 2011 Established New England Metro NY/NJ Mid-Atlantic Pacific Northwest Northern California Southern California Total Established(2) Other Stabilized Development / Redevelopment Land Held for Future Development Non-allocated(3) Total Options Outstanding, December 31, 2010 Exercised Granted Forfeited Options Outstanding, December 31, 2011 Exercised Granted Forfeited Options Outstanding, December 31, 2012 Exercised Granted Forfeited Options Outstanding, December 31, 2013 Options Exercisable: December 31, 2011 December 31, 2012 December 31, 2013 Weighted average fair value per share Life of options (in years) Dividend yield Volatility Risk-free interest rate granted is as follows: 3.5 years. 2016, 2015 and 2014. As discussed Note 1, “Organization, Basis of Presentation and Significant Accounting Policies,” under “Recently Issued and Adopted Accounting Standards,” the Company will adopt the provision of ASU 2016-09 and recognize forfeitures as they occur beginning in 2017. employees of the Company are eligible to participate provided that, as of the applicable election period, they have been employed by the Company for 12 months. Under the ESPP, eligible employees are permitted to acquire shares of the Company's common stock through payroll deductions, subject to maximum purchase limitations. Notional balance Weighted average interest rate(1) Weighted average capped interest rate Earliest maturity date Latest maturity date 2015. values and are Level 1 within the fair value hierarchy. Interest Rate Caps Put(s) DownREIT units Indebtedness Total 12-31-2012 Interest Rate Caps Interest Rate Swaps Put DownREIT units Indebtedness Total Total revenue(1) Income (loss) from continuing operations(1) Total discontinued operations(1) Net income (loss) attributable to common stockholders Net income (loss) per common share—basic Net income (loss) per common share—diluted Total revenue(1) Income from continuing operations(1) Total discontinued operations(1) Net income attributable to common stockholders Net income per common share—basic Net income per common share—diluted 2016 Avalon Fremont Eaves Dublin Avalon Campbell Eaves Daly City AVA Nob Hill Eaves San Jose Eaves San Rafael Eaves Pleasanton AVA Newport AVA Burbank Avalon Mission Viejo Eaves South Coast Avalon at Mission Bay Eaves Mission Ridge Eaves Union City Avalon on the Alameda Eaves Foster City Eaves Pacifica Avalon Sunset Towers Avalon Silicon Valley Avalon Woodland Hills Avalon Mountain View Eaves Santa Margarita Eaves Diamond Heights Eaves Fremont Eaves Creekside Eaves Warner Center Eaves Huntington Beach AVA Cortez Hill Avalon at Cahill Park Avalon Towers on the Peninsula Avalon at Mission Bay North 2016 Avalon at Glendale Avalon Burbank Avalon Camarillo Avalon Wilshire Avalon Encino Avalon Warner Place Avalon Fashion Valley Avalon Anaheim Stadium Avalon Union City Avalon Irvine Avalon at Mission Bay III Avalon Walnut Creek Avalon Ocean Avenue Eaves Phillips Ranch Eaves San Dimas Eaves San Dimas Canyon Eaves San Marcos Eaves Rancho Penasquitos Eaves Lake Forest AVA Pasadena Eaves Cerritos Avalon Del Rey Eaves Walnut Creek Avalon Simi Valley Eaves La Mesa Archstone Studio City II Archstone Studio City III Avalon Willow Glen Avalon Calabasas 2016 Avalon Oak Creek Avalon Santa Monica on Main Avalon Del Mar Station Archstone La Jolla Colony Eaves Old Town Pasadena Eaves Thousand Oaks Avalon Walnut Ridge I Eaves Los Feliz Eaves West Valley Eaves Seal Beach Oakwood Toluca Hills Eaves Woodland Hills Eaves Mountain View at Middlefield Avalon Thousand Oaks Plaza Archstone San Bruno Archstone San Bruno II Archstone San Bruno III Avalon Walnut Ridge II Avalon Pasadena Archstone Studio City The Springs (1) Eaves Trumbull Eaves Stamford Avalon Wilton I Avalon Valley Avalon on Stamford Harbor Avalon New Canaan Avalon at Greyrock Place 2016 Avalon Danbury Avalon Darien Avalon Milford I Avalon Norwalk Avalon Huntington Avalon Wilton II Avalon at Foxhall Avalon at Gallery Place The Albemarle Eaves Tunlaw Gardens The Statesman Eaves Glover Park The Consulate Avalon at Lexington Avalon Oaks Eaves Quincy Avalon Essex Avalon Oaks West Avalon Orchards Avalon at Newton Highlands Avalon at The Pinehills Eaves Peabody Avalon at Bedford Center Avalon Chestnut Hill Avalon Shrewsbury Avalon Danvers Avalon at Lexington Hills Avalon Acton Avalon at Hingham Shipyard Avalon Sharon Avalon Northborough Avalon Blue Hills Avalon Cohasset Avalon Andover 2016 Avalon at Prudential Center III Avalon at Prudential Center II Avalon at Prudential Center I Eaves Burlington Avalon Burlington Avalon Bear Hill Eaves North Quincy Avalon at Fairway Hills Eaves Washingtonian Center I Eaves Washingtonian Center II Eaves Columbia Town Center Avalon at Grosvenor Station Avalon at Traville Avalon Russett Avalon Cove Avalon Run Avalon Princeton Junction Avalon at Edgewater Avalon at Florham Park Avalon at Freehold Avalon Run East Avalon Lyndhurst Avalon at Tinton Falls Avalon West Long Branch Avalon North Bergen 2016 Avalon at Wesmont Station Avalon Commons Eaves Nanuet Avalon Green Avalon Towers Avalon Willow Avalon Court The Avalon Avalon Riverview I Avalon at Glen Cove Avalon Pines Avalon Bowery Place Avalon at Glen Cove North Avalon Riverview North Avalon Bowery Place II Avalon White Plains Avalon Morningside Park Avalon Charles Pond Avalon Fort Greene Avalon Rockville Centre Avalon Green II Avalon Westbury Avalon Midtown West Avalon Clinton North Avalon Clinton South Oakwood Philadelphia 2016 Avalon at Center Place Archstone Lexington Archstone Memorial Heights Eaves Fair Lakes AVA Ballston Eaves Fairfax City Avalon Crescent Avalon at Arlington Square Fairfax Towers Avalon Ballston Place Eaves Tysons Corner Archstone Ballston Square Archstone Courthouse Place Avalon Reston Landing Oakwood Arlington Avalon Redmond Place Avalon at Bear Creek Avalon Bellevue Avalon RockMeadow Avalon ParcSquare Avalon Brandemoor AVA Belltown Avalon Meydenbauer Avalon Towers Bellevue AVA Queen Anne Avalon Brandemoor II Eaves Redmond Campus Archstone Redmond Lakeview 2016 Development Communities Avalon Irvine II AVA Little Tokyo Avalon Dublin Station II AVA 55 Ninth Avalon Morrison Park Avalon San Dimas Avalon Hayes Valley Avalon Glendora Avalon Vista Avalon Baker Ranch Avalon Berkeley Eaves West Valley II Avalon Shelton Avalon East Norwalk Avalon at Stratford AVA H Street Archstone First & M Avalon Exeter Avalon Natick Avalon/AVA Assembly Row AVA Stuart Street Avalon Canton Avalon Hackensack Avalon Somerset Avalon at Wesmont Station II Avalon Bloomingdale Avalon Wharton Avalon Bloomfield Station Avalon West Chelsea/AVA High Line 2016 Avalon Garden City Avalon Ossining Avalon Huntington Station Avalon Willoughby Square/AVA DoBro Archstone Toscano Archstone Memorial Heights Phase 1 Avalon Park Crest Avalon Mosaic Avalon Arlington North AVA Ballard AVA University District Avalon Alderwood I Land held for development Corporate overhead 2016 2016. Balance, beginning of period Acquisitions, construction costs and improvements Dispositions, including impairment loss on planned dispositions Balance, end of period Balance, beginning of period Depreciation, including discontinued operations Dispositions Balance, end of periodUse these links to rapidly review the documentTABLE OF CONTENTSPART III20132016Maryland 77-0404318 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) 77-0404318(I.R.S. Employer
Identification No.)Ballston Tower671 N. Glebe Rd, Suite 800Arlington, Virginia 22203(Address of principal executive office)(703) 329-6300(Registrant's telephone number, including area code)(Title of each class) (Name of each exchange on which registered) Common Stock, par value $.01 per share New York Stock Exchange "large“large accelerated filer," "accelerated filer"” “accelerated filer” and "smaller“smaller reporting company"company” in Rule 12b-2 of the Exchange Act. (Check one): (Do repobrtingreporting company o28, 201330, 2016 was $17,455,382,529.20142017 was 129,417,333.20142017 annual meeting of stockholders, a definitive copy of which will be filed with the SEC within 120 days after the year end of the year covered by this Form 10-K, are incorporated by reference herein as portions of Part III of this Form 10-K.PAGE PART IITEM 1.BUSINESS1
RISK FACTORS
ITEM 2.
COMMUNITIES
23
LEGAL PROCEEDINGS
PART II
ITEM 9b.
OTHER INFORMATION
75PART III
ITEM 11.
EXECUTIVE COMPENSATION
76
PART IV
SIGNATURES
"Forward-Looking Statements"“Forward-Looking Statements” included in this Form 10-K. You should also review Item 1a., "Risk Factors,"1A. “Risk Factors” for a discussion of various risks that could adversely affect us."Company,"“Company,” which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries), is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT"(“REIT”) for federal income tax purposes. We engage in the development, redevelopment, acquisition, ownershipdevelop, redevelop, acquire, own and operation ofoperate multifamily communities located primarily in high barrier to entry markets of the United States. These barriers to entry generally include a difficult and lengthy entitlement process with local jurisdictions and dense urban or suburban areas where zoned and entitled land is in limited supply. Our primary markets are located in New England, the New York/New Jersey Metrometro area, the Mid-Atlantic, the Pacific Northwest, and the Northern and Southern California regions of the United States.California. We focus on leading metropolitan areas in these markets becauseregions that we believe that, overare characterized by growing employment in high wage sectors of the long-term, a limited new supply of apartment homes andeconomy, lower housing affordability inand a diverse and vibrant quality of life. We believe these markets will result in higher growth in cash flowsmarket characteristics offer the opportunity for superior risk-adjusted returns on apartment community investments relative to other markets.2014,2017, we owned or held a direct or indirect ownership interest in:•24472,81175,038 apartment homes in twelve10 states and the District of Columbia, of which 214244 communities containing 63,51470,864 apartment homes were consolidated for financial reporting purposes, threefive communities containing 9791,539 apartment homes were held by joint ventures in which we hold an ownership interest, and 2710 communities containing 8,3182,635 apartment homes were owned by the Funds (as defined below). ThreeFour of the consolidated communities containing 1,1261,671 apartment homes were under redevelopment, as discussed below;•29 wholly-ownedconstructiondevelopment, one of which is being developed through a joint venture, that are expected to contain an aggregate of 8,7088,629 apartment homes when completed, including one community in which we had an indirect interest expected to contain 103 apartment homes;completed; and•4625 communities that, if developed in the manner expected, will contain an estimated 12,9868,487 apartment homes; andhomes.•an indirect interest in a joint venture formed with Equity Residential (as defined in this Form 10-K) which owns direct and indirect interests in assets acquired as part of the Archstone Acquisition, including a direct interest in apartment communities in Germany, an indirect interest in a joint venture which owns six apartment communities with 1,902 apartment homes in the United States, and two land parcels.9, "Segment8, “Segment Reporting,"” of the Consolidated Financial Statements set forth in Item 8 of this report.stockholdershareholder value through the development, redevelopment, acquisition, operation and, when appropriate, disposition of apartment communities in our markets. To help meet this goal, we regularly (i) monitor our investment allocation by geographic market and product type, (ii) develop, redevelop and acquire an interestinterests in apartment communities in high barrier to entryour selected markets, with growing or high potential for demand and high for-sale housing costs, (iii) selectively sell apartment communities that no longer meet our long-term strategy or when opportunities are presented to realize a portion of the value created through our investment and redeploy the proceeds from those sales and (iv) endeavor to maintain a capital structure that is aligned with our business risks with a view to maintaining continuous access to cost-effective capital. We pursue our development, investment and operating activities with the purpose of Creating a Better Way to Live. Our strategystrategic vision is to be leadersthe leading apartment company in multifamilyselect US markets, providing a range of distinctive living experiences that customers value. We pursue this vision by targeting what we believe are among the best markets and submarkets, leveraging our strategic capabilities in market research and consumer insight and being disciplined in our capital allocation delivering a range of multifamily offerings tailoredand balance sheet management. In addition to serve the needs of the most attractive customer segmentsour in-house development and construction capabilities, we supplement our growth through our in-house redevelopment and acquisition platforms. We believe that our organizational structure, which includes dedicated development and operational teams in the best-performing U.S. submarkets. A substantial majorityeach of our current communitiesregions, and strong culture are upscale, which generally command among the highest rents in their markets. However, we also pursue the ownershipkey differentiators and operation of apartment communities that target a variety of customer segmentsprovide us with access to highly talented, dedicated and price points, consistent with our goal of offering a broad range of products and services."Avalon"Avalon brand is our core offering, focusing on upscale apartment living and high end amenities and services in urban and suburban markets. Our"AVA"AVA brand is designed for people who want to live in or near urban neighborhoods and in close proximity to public transportation, services, shopping and night-life.AVA apartments are generally smaller, many engineered for roommate living and feature modern design and a technology focus. OurEaves by Avalon brand is designed for renters who seek good quality apartment living, often in a suburban setting, with practical amenities and services at a more modest price point.2013,2016, we acquired six apartment communities and disposed of 16 apartment communities, excluding activity for the Funds (as defined below), we acquired 59 apartment communities, of which 54 were acquired as part of the Archstone Acquisition (as defined in this Form 10-K). In addition, in conjunction with the Archstone Acquisition, excluding investments in joint ventures formed with Equity Residential, we acquired interests in three unconsolidated joint ventures, as discussed below, which own an aggregate of 12 apartment communities. During the three years ended December 31, 2013,2016, we disposed of 15 apartment communities, four of which were acquired in the Archstone Acquisition, and completed the development of 2638 apartment communities and the redevelopment of 2419 apartment communities. Duringwe also purchased ourthe Company, together with Equity Residential, acquired, directly or indirectly, all of the assets owned by Archstone Enterprise LP (“Archstone,” which has since changed its name to Jupiter Enterprise LP), including all of the ownership interests in joint venture partner's interest in one operating community, obtaining a 100% ownership interest in that apartment community. In addition, in 2011 we exchanged a portfolioventures and other entities owned by Archstone, and assumed Archstone’s liabilities, both known and unknown, with certain limited exceptions. Under the terms of three communitiesthe purchase agreement, the Company acquired approximately 40.0% of Archstone's assets and a parcelliabilities and Equity Residential acquired approximately 60.0% of land we owned for a portfolio of six communitiesArchstone’s assets and $26,000,000 in cash. In addition, we sold one community in 2014 through the date this Form 10-K was filed.liabilities (the “Archstone Acquisition”).("(“Fund I"I”), a private, discretionary real estate investment vehicle, which we managemanaged and in which we ownowned a 15.2% interest. Fund I acquired communities with the objective of either redeveloping or repositioning them, or taking advantage of market cycle timing and improved operating performance. From its inception in March 2005 through the close of its investment period in March 2008, Fund I acquired 20 communities. During the three years ended December 31, 2013,2016, we realized our pro rata share of the gain from the sale of 16the last of the four communities owned by Fund I.("(“Fund II"II”), a second institutional discretionary real estate investment fund which we manage and in which we own a 31.3% interest. In 2012, Fund II acquired its final operating community, which was an active acquisition candidate as of August 2011, the end of the investment period for Fund II.community. From the commencement of Fund II through the close of theits investment period, Fund II acquired 13 operating communities. As of December 31, 2016, Fund II owns three communities containing 1,366 apartment homes. During the three years ended December 31, 2013,2016, we realized our pro rata share of the gain from the sale of one communitynine communities owned by Fund II. In conjunction with the Archstone Acquisition, excluding joint ventures formed with Equity Residential, we acquired interests in three additional joint ventures, Brandywine Apartments of Maryland, LLC ("Brandywine"), "U.S. Fund"“U.S. Fund”) and Multifamily Partners AC JV LP (the "AC JV"). Brandywine owns a 305 apartment home community located in Washington, DC, which is managed by a third party. Brandywine is comprised of five members who hold various interests in the joint venture. In conjunction with the Archstone Acquisition, we acquired a 26.1% equity interest in the venture, and subsequently purchased an additional 2.6% interest, and as of December 31, 2013, hold a 28.7% equity interest in the venture. The U.S. Fund was formed in July 2011 and is fully invested. TheAs of December 31, 2016, the U.S. Fund owns nineseven communities containing 1,7261,269 apartment homes, one of which includes a marina containing 229 boat slips. ThroughIn conjunction with the Archstone Acquisition, through subsidiaries, we acquired and own the general partner of the fundU.S. Fund and hold a 28.6% interest in the fund. TheU.S. Fund. During the three years ended December 31, 2016, we realized our pro rata share of the gain from the sale of two communities owned by the U.S. Fund.20%20.0% ownership interest. The AC JV was formed in 2011 and as of December 31, 2016, owns twothree operating apartment communities containing 818921 apartment homes, one of which completed development in Cambridge, MA and Herndon, VA, and one development community which, if completed as expected, will contain 103 apartment homes in Cambridge, MA.2014. The AC JV partnership agreement contains provisions that require us to provide a right of first offer ("ROFO"(“ROFO”) to the AC JV in connection with additional opportunities to acquire or develop additional interests in multifamily real estate assets within a specified geographic radius of the existing assets, generally one mile or less. We own one land parcel for the development of 301 apartment homes, classified as a Development Right in Cambridge, MA, acquired as part of the Archstone Acquisition that is subject to the ROFO restrictions. The ROFO restriction expires in 2019.and(collectively, the “Funds”), the AC JV (collectively, the "Funds"), Brandywineand other joint ventures and the related investment activity can be found in the discussion in Note 6, "Investments5, “Investments in Real Estate Entities,"” of the Consolidated Financial Statements in Item 8 of this report and in Item 7, "Management's7. “Management's Discussion and Analysis of Financial Condition and Results of Operations." Including” and entities in which we held a residual profits interest, during 2013 we sold 16 operating communities and recognized a gain in accordance with U.S. generally accepted accounting principles ("GAAP"(“GAAP”) of $292,684,000.Table of Contentshigh barrier to entryour selected markets, of the United States, we identify development opportunities through local market presence and access to local market information achieved through our regional offices. In addition to our principal executive office in Arlington, Virginia, we also maintain regional offices, administrative offices or specialty offices, including offices that are in or near the following cities:•••••Newport Beach,•••Seattle, Washington;•Fairfield, Connecticut;•Virginia; andVirginia.•Woodbridge, New Jersey."Communities"“Communities” in this report. and certain development communities acquired as part of the Archstone Acquisition, where we may elect to use third-party general contractors as construction managers. We generally perform these functions directly (although we may use a wholly-owned subsidiary) both for ourselves and for the joint ventures and partnerships of which we are a member or a partner. We believe direct involvement in construction enables us to achieve higher construction quality, greater control over construction schedules and cost savings. Our development, property management and construction teams monitor construction progress to ensure quality workmanship and a smooth and timely transition into the leasing and operating phase."development"“development” is used to refer to the entire property development cycle, including pursuit of zoning approvals, procurement of architectural and engineering designs and the construction process. References to "construction"“construction” refer to the actual construction of the property, which is only one element of the development cycle.a dedicated group of associatesredevelopment teams and procedures that are intended to control both the cost and risks of redevelopment. Our redevelopment teams, which include redevelopment, construction and property management personnel, monitor redevelopment progress. We believe we achieve significant cost savings by actingundertaking the redevelopment primarily through an occupied turn strategy, in which we continue to operate the community as we install improvements, working to minimize any impact on our own general contractor. More importantly, this helps to ensure quality design and workmanship and a smooth and timely transition into the lease-up and restabilization phases.current residents."redevelopment"“redevelopment” is used to refer to the entire redevelopment cycle, including planning and procurement of architectural and engineering designs, budgeting and actual renovation work. The actual renovation work is referred to as "reconstruction,"“reconstruction,” which is only one element of the redevelopment cycle. We acquired 16 assets infor which outstandingwe acquired, and still own, 14 assets that had previously been contributed by third parties retainedon a tax-deferred basis to an indirect interest with associatedArchstone partnership in which the third parties received ownership interests. To protect the tax-deferred nature of the contribution, the third parties are entitled to cash payments if we trigger tax obligations to the third parties by selling, or failing to maintain sufficient levels of secured financing on, the contributed assets. Our tax protection rights which may be triggered ifpayment obligations with respect to these assets expire at different times and in some cases don’t expire until the death of a third party who contributed ownership interests to the Archstone partnership. After review and investigation of Archstone’s tax and accounting records, we sell the assetsestimate that, had we sold or repay secured financing thereon; if triggered upon a sale oftaken other triggering actions in 2016 with respect to all 1614 assets, the associatedaggregate amount of the tax protection payments are estimatedthat would have been triggered would have been approximately $54,600,000. At the present time, we do not intend to take actions that would cause us to be approximately $44 million at December 31, 2013.("NOI"(“NOI”). We•••••••••depending uponconsidering the least costly alternative;•andas well as to maximize property and equipment life;•"taxable“taxable REIT subsidiary,"” which is a subsidiary that is treated as a "C corporation"“C corporation” subject to federal income taxes.$1,300,000,000$1,500,000,000 revolving variable rate unsecured credit facility (the "Credit Facility"“Credit Facility”), sales of current operating communities and/or issuance of additional debt or equity securities. A determination to engage in an equity or debt offering depends on a variety of factors such as general market and economic conditions, our short and long-term liquidity needs, the relative costs of debt and equity capital and growth opportunities. A summary of debt and equity activity for the last three years is reflected on our Consolidated Statement of Cash Flows of the Consolidated Financial Statements set forth in Item 8 of this report.2013,2016, we had a total of 659,847693,410 square feet of rentable retail space, excluding retail space within communities currently under construction.development. Gross rental revenue provided by leased retail space in 20132016 was $15,946,000 (1.1%$21,390,000 (1.0% of total revenue). We may also develop a property in conjunction with another real estate company that will own and operate the retail componentor for-sale residential components of a mixed-use building or project that we help develop. If we secure a development right and believe that its best use, in whole or in part, is to develop the real estate with the intent to sell rather than hold the asset, we may, through a taxable REIT subsidiary, develop real estate for sale. Any investment in securities of other entities, and any development of real estate for sale, is subject to the percentage of ownership limitations, gross income tests, and other limitations that must be observed for REIT qualification.Regulations)Regulations thereunder), our Board of Directors determines that it is no longer in our best interest to qualify as a REIT.Archstone Acquisition On February 27, 2013, pursuant to an asset purchase agreement (the "Purchase Agreement") dated November 26, 2012, by and among the Company, Equity Residential and its operating partnership, ERP Operating Limited Partnership (together, "Equity Residential"), Lehman Brothers Holdings, Inc. ("Lehman," which term is sometimes used in this report to refer to Lehman Brothers Holdings, Inc., and/or its relevant subsidiary or subsidiaries), and Archstone Enterprise LP ("Archstone," which has since changed its name to Jupiter Enterprise LP), we, together with Equity Residential, acquired, directly or indirectly, all of Archstone's assets, including all of the ownership interests in joint ventures and other entities owned by Archstone, and assumed Archstone's liabilities,both known and unknown, with certain limited exceptions. Under the terms of the Purchase Agreement, we acquired approximately 40% of Archstone's assets and liabilities and Equity Residential acquired approximately 60% of Archstone's assets and liabilities (the "Archstone Acquisition"). We acquired the following as part of the Archstone Acquisition:•54 operating apartment communities that were consolidated for financial reporting purposes, containing 18,423 apartment homes, of which four communities containing 1,368 apartment homes were subsequently disposed of during 2013;•six communities that were under construction and/or in lease-up, of which two have been completed with 553 homes and the other four of which are expected to be completed during 2014 and contain 1,114 apartment homes;•six parcels of land, one of which we sold to the AC JV, which is currently being developed;•options to acquire two additional parcels of land, of which one was acquired in 2013 and will begin construction in 2014;•interests in unconsolidated joint ventures in which we are the general partner or managing member, which joint ventures own 11 apartment communities containing 2,544 apartment homes, and an interest in an unconsolidated joint venture in which we are a limited partner, which joint venture owns one apartment community containing 305 apartment homes, as further discussed below; and•a 40% ownership interest in unconsolidated joint venture arrangements with Equity Residential which will hold assets and liabilities that we and Equity Residential will jointly manage, and that we and Equity Residential intend to sell to or resolve with third parties, and/or subsequently transfer to Equity Residential or to us. The Company provided the following consideration for the Archstone Acquisition:•the issuance of 14,889,706 shares of the Company's common stock, valued at $1,875,210,000 as of the market's close on the closing date, February 27, 2013;•cash payment of approximately $760,000,000;•the assumption of consolidated indebtedness with a fair value of approximately $3,732,980,000, as of February 27, 2013, consisting of $3,512,202,000 principal amount of consolidated indebtedness and $220,777,000 representing the amount by which fair value of the aforementioned debt exceeds the principal face value, $70,479,000 of which excess related to debt the Company repaid concurrent with the Archstone Acquisition;•the acquisition with Equity Residential of interests in entities that have preferred units outstanding, some of which may be presented for redemption from time to time. The Company's 40% share of the fair value of the collective obligations, including accrued dividends on these outstanding Archstone preferred units as of February 27, 2013, was approximately $67,500,000; and•the assumption with Equity Residential of all other liabilities, known or unknown, of Archstone, other than certain excluded liabilities. The Company shares 40% of the responsibility for these liabilities.Internal Revenue Code of 1986, as amended, ("the Code") and intend to maintain our qualification as a REIT in the future. As a qualified REIT, with limited exceptions, such as those described under “Property Management Strategy” above, we will not be taxed under federal1a., "Risk1A. “Risk Factors.""Investors"“Investor Relations” section of our website as soon as reasonably practicable after the reports are filed with or furnished to theAgreement,Agreements, Policy Regarding Shareholder Approval of Future Severance Agreements, Executive Stock Ownership Guidelines, Policy on Political Contributions and Government Relations, and Policy foron Recoupment, of Incentive Compensation, are available free of charge in that section of our website or by writing to AvalonBay Communities, Inc., Ballston Tower, Suite 800, 671 N. Glebe Rd., Arlington, Virginia 22203, Attention: Chief Financial Officer. To the extent required by the rules of the SEC and the NYSE, we will disclose amendments and waivers relating to these documents in the same place on our website.2014,2017, we had 2,9003,071 employees.1a.1A. RISK FACTORS1a.1A. includes forward-looking statements. You should refer to our discussion of the qualifications and limitations on forward-looking statements in this Form 10-K.constructionoperating risks could affect our profitability.••••••••••••••••••••plant closings,•••••TableContentsprofitability.ourexcluding any net capital gain. This requirement limits the amount of our cash flow available to meet required principal and interest payments. The principal outstanding balance on a portion of our debt will not be fully amortized prior to its maturity. Although we may be able to repay our debt by using our cash flows, we cannot assure you that we will have sufficient cash flows available to make all required principal payments. Therefore, we may need to refinance at least a portion of our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that a refinancing will not be done on as favorable terms; either of these outcomes could have a material adverse effect on our financial condition and results of operations."tax-exempt bonds"“tax-exempt bonds” and generally must be secured by mortgages on our communities. As a condition to obtaining tax-exempt financing, or on occasion as a condition to obtaining favorable zoning in some jurisdictions, we will commit to make some of the apartments in a community available to households whose income does not exceed certain thresholds (e.g., 50% or 80% of area median income), or who meet other qualifying tests. As of December 31, 2013,2016, approximately 6%5.8% of our apartment homes at current operating communities were under income limitations such as these. These commitments, which may run without expiration or may expire after a period of time (such as 15 or 20 years), may limit our ability to raise rents and, in consequence, can also adversely affect the value of the communities subject to these restrictions.Banka syndicate of America, N.A., as administrative agent, swing lender, issuing bank and a bank, JPMorgan Chase Bank, N.A., as a bank and as syndication agent, Deutsche Bank Trust Company Americas, Morgan Stanley Bank and Wells Fargo Bank, N.A., each as a bank and as documentation agent, Barclays Bank PLC as a bank and as co-documentation agent, UBS AG, Stamford Branch, as a co-documentation agent, Goldman Sachs Bank USA, The Bank of New York Mellon, Compass Bank, PNC Bank, National Association, and Suntrust Bank, each as a bank and as a managing agent, Branch Banking and Trust Company, Bank of Tokyo Mitsubishi UFJ, Ltd., and Capital One, N.A., each as a bank and as a co-agent, and the other bank parties signatory thereto.commercial banks. Our organizational documents do not limit the amount or percentage of indebtedness that may be incurred. Accordingly, subject to compliance with outstanding debt covenants, we could incur more debt, resulting in an increased risk of default on our obligations and an increase in debt service requirements that could adversely affect our financial condition and results of operations., "Management's “Management's Discussion and Analysis of Financial Condition and Results of Operations,"Operations” for further discussion.•• We are currently implementing two new brands of communities that target various customer preferences. We cannot assure that these brands will be successful or that our costs in developing and implementing these brands will result in incremental revenue and earnings., "Communities— “Communities—Other Land and Real Estate Assets,"” in the event that the fair market value of a parcel changes such that we determine that the carrying basis of the parcel reflected in our financial statements is greater than the parcel's then current fair value, less costs to dispose, we would be subject to an impairment charge, which would reduce our net income.Risks involved inRisksWe are exposed to risks associated with an investment in and management of discretionary real estate investment funds and joint ventures. Fund I and Fund II, in which we have an equity interest of 15.2% and 31.3%, and as part of the Archstone Acquisition we acquired equity interests in the U.S. Fund and the AC JV of 28.6% and 20.0%, respectively, which, through wholly-owned subsidiaries, we manage as the general partner and managing member and in which at December 31, 2013 we have an aggregate equity investment, excluding costs incurred in excess of our equity in the underlying net assets of each respective fund, of approximately $270,178,000, net of distributions to us and excluding our purchase of a mortgage note secured by a Fund I community.member. The investment periods for Fund I, Fund II and the U.S. Fund are over. TheseThe Funds and joint ventures (collectively, the "ventures") present risks, including the following:•Fundsventures are generally liable, under partnership law, for the debts and obligations of the respective Funds,ventures, subject to certain exculpation and indemnification rights pursuant to the terms of the partnership agreement of the Funds;•Fundsventures holding a majority of the partnership interests may remove us as the general partner without cause, in the case of Fund II, subject to our right to receive compensation for an additional period of management fees after such removal and our right to acquire one of the properties then held by the Funds;•Funds and make investment decisions on behalf of the Funds,ventures, the investors or an advisory committee comprised of representatives of the investors must approve certain matters, and as a result we may be unable to cause the Fundsventures to implement certain decisions that we consider beneficial; and•Funds,ventures, or the REIT entities associated with the Funds and/or the U.S. Fund and/or AC JV,ventures, fail to comply with various tax or other regulatory matters.wouldcould adversely affect the applicable joint venture and decrease potential returns to us and our investors.financial condition.coverprovide some coverage for certain risks arising out of data and network breaches.athere can be no assurance that we will be able to prevent unauthorized access to this information. Any failure in or breach of our operational or information security systems, or those of our third party service providers, as a result of cyber attacks or information security breaches could result in a wide range of potentially serious harm to our business operations and financial prospects, including (among others) disruption of our business and operations, disclosure or misuse of confidential or proprietary information (including personal information of our residents and/or associates), damage to our reputation, and/or potentially significant legal and/or financial liabilities.Riskliabilities and penalties.earthquake damage.our insurance coverage, including risks discussed below., "Communities— “Communities—Insurance and Risk of Uninsured Losses,"” many of our West Coast communities are located in the general vicinity of active earthquake faults. We cannot assure you that an earthquake would not cause damage or losses greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected community, as well as anticipated future revenue from that community. We would also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. Any such loss could materially and adversely affect our business and our financial condition and results of operations.due toand in limited industry capacity.supply. As a result, we may experience shortages in desired coverage levels if market conditions are such that insurance is not available or the cost of insurance makes it, in management's view, economically impractical.We may incur costs and increased expenses to repair property damage resulting from inclement weather. Particularly in New England and the Metro New York/New Jersey area, we are exposed to risks associated with inclement weather, including increased costs related to winter weather, such as costs for the removal of snow and ice, repair of water and wind damage from storms, as well as from delays in construction. In addition, inclement weather could increase the need for maintenance and repair of our communities.suchthese substances, or the failure to properly remediate the contamination, may adversely affect our ability to borrow against, develop, sell or rent the affected property. In addition, some environmental laws create or allow a government agency to impose a lien on the contaminated site in favor of the government for damages and costs it incurs as a result of the contamination.SuchThese laws and regulations may impose restrictions on the manner in which our communities may be developed, and noncompliance with suchthese laws and regulations may subject us to fines and penalties. We do not currently anticipate that we will incur any material liabilities as a result of noncompliance with these laws.("ACMs"(“ACMs”) when such materials are in poor condition or in the event of renovation or demolition of a building. These laws and the common law may impose liability for release of ACMs and may allow third parties to seek recovery from owners or operators of real properties for personal injury associated with exposure to ACMs. We are not aware that any ACMs were used in the construction of the communities we developed. ACMs were, however, used in the construction of a number of the communities that we have acquired. We implement an operations and maintenance program at each of the communities at which ACMs are detected. We do not currently anticipate that we will incur any material liabilities as a result of the presence of ACMs at our communities. We do not currently anticipate that we will incur any material liabilities as a result of the presence of lead paint at our communities. We currently donot anticipate that we will incur any material liabilities as a result of vapor intrusion at our communities.ground watergroundwater sampling. These assessments, together with subsurface assessments conducted on some properties, have not revealed, and we are not otherwise aware of, any environmental conditions that we believe would have a material adverse effect on our business, assets, financial condition or results of operations. In connection with our ownership, operation and development of communities, from time to time we undertake substantial remedial action in response to the presence of subsurface or other contaminants, including contaminants in soil, groundwater and soil vapor beneath or affecting our buildings. In some cases, an indemnity exists upon which we may be able to rely if environmental liability arises from the contamination or remediation costs exceed estimates. There can be no assurance, however, that all necessary remediation actions have been or will be undertaken at our properties or that we will be indemnified, in full or at all, in the event that environmental liability arises. We are not aware of any material environmental liabilities with respect to properties managed or developed by us or our predecessors for such third parties.••••••Internal Revenue Code for which there are only limited judicial and administrative interpretations and involves the determination of a variety of factual matters and circumstances not entirely within our control. Our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other requirements on a continuing basis. In addition, future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws or the application of the tax laws with respect to qualification as a REIT for federal income tax purposes or the federal income tax consequences of this qualification.Our non-U.S. assets may be subject to foreign taxes. In addition, we may through our taxable REIT subsidiaries hold certain assets and engage in certain activities that a REIT could not engage in directly through our taxable REIT subsidiaries.directly. We also use taxable REIT subsidiaries to hold certain assets that we believe would be subject to the 100% prohibited transaction tax if sold at a gain outside of a taxable REIT subsidiary. Our domestic taxable REIT subsidiaries are subject to U.S. tax as regular corporations. The Archstone Acquisition increased the amount of assets held through our taxable REIT subsidiaries.Our Board of Directors waived this ownership limit with respect to the common stock issued to Lehman in connection with the Archstone Acquisition. These ownership limits may prevent or delay a change in control and, as a result, could adversely affect our stockholders' ability to realize a premium for their shares of common stock.1b.1B. UNRESOLVED STAFF COMMENTS("(“Development Communities"Communities”) and Development Rights (as defined below). Our current operating communities are further distinguished as Established Communities, Other Stabilized Communities, Lease-Up Communities, and Redevelopment Communities and exclude communities in which we obtained an indirect interest through joint ventures we formed with Equity Residential as part of the Archstone Acquisition.Unconsolidated Communities. While we generally establish the classification of communities on an annual basis, we mayintend to update the classification of communities during the calendar year to the extent that our plans with regard to the disposition or redevelopment of a community change during the year. The following is a description of each category:RedevelopmentUnconsolidated according to the following attributes:•and operating expenses as of the beginning of the respective prior year. ForThe Established Communities for the year ended December 31, 2013, the Established Communities2016 are communities that are consolidated for financial reporting purposes, had stabilized occupancy and operating expenses as of January 1, 2012,2015, are not conducting or planning to conduct substantial redevelopment activities, and are not held for sale or planned for disposition within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 95% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.•includesare all other completed consolidated communities that we own or have a direct or indirect ownership interest in, and that have stabilized occupancy, as defined above. Other Stabilized Communities do not include communities that are conducting or planning to conduct substantial redevelopment activities within the current year.••final certificate or certificates of occupancy hasfor the entire community have not been received. These communities may be partially complete and operating.for whichwhere we either have an option to acquire land or enter into a leasehold interest, for whichwhere we are the buyer under a long-term conditional contract to purchase land, or where we control the land through a ground lease or own land to develop a new community.community, or where we are the designated developer in a public-private partnership. We capitalize related pre-development costs incurred in pursuit of new developments for which we currently believe future development is probable.under an operating lease. The lease term ends in 2020, subject to two five year renewal options. Allas well as our other regional and administrative offices are leased under operating leases.2013,2016, communities that we owned or held a direct or indirect interest in were classified as follows.follows: Current Communities Established Communities: New England 40 9,009 Metro NY/NJ 35 11,084 Mid-Atlantic 27 9,575 Pacific Northwest 13 3,221 Northern California 33 9,987 Southern California 43 12,032 Total Established 191 54,908 Other Stabilized Communities: New England 4 1,032 Metro NY/NJ 8 2,024 Mid-Atlantic 5 1,607 Pacific Northwest 1 367 Northern California 5 1,455 Southern California 10 3,419 Non-Core 3 1,014 Total Other Stabilized 36 10,918 Lease-Up Communities 12 2,867 Redevelopment Communities 4 1,671 Unconsolidated Communities 15 4,174 Total Current Communities 258 74,538 Development Communities (1) 27 9,129 Total Communities 285 83,667 Development Rights 25 8,487 (1) Development Communities includes AVA North Point, expected to contain 265 apartment homes, which is being developed within a joint venture. Number of
communities Number of
apartment homes 29 7,222 25 8,416 11 4,443 10 2,387 18 5,224 22 5,827 115 33,519 17 3,749 19 5,876 25 8,206 5 1,142 17 5,502 33 10,562 3 1,030 119 36,067 7 2,099 3 1,126 244 72,811 29 8,708 46 12,986 ForDetermined as of January 1 of each of the respective years, the Established Communities portfolios for the years ended December 31, 2013, 20122016, 2015 and 2011, there2014 were 19, 11 and 14 communities added to the Established Communities portfolio, respectively, and 7, 17 and 7 communities removed, respectively. We anticipate updating the composition of our Established Communities portfolio as of both January 1, 2014 and April 1, 2014. The expected April 1, 2014 update is primarily to incorporate the stabilized apartment communities acquired in February 2013 as part of the Archstone acquisition, although we will also add previously existing assets that we owned that qualify for inclusion in our Established Communities portfolio as of April 1, 2014.follows:Established Communities as of December 31, 2013 115 Communities added 67 Communities removed (1): Redevelopment Communities (8 ) Disposed Communities (2 ) Established Communities as of December 31, 2014 172 Communities added 13 Communities removed (1): Redevelopment Communities (4 ) Disposed Communities (3 ) Other Stabilized (2) (1 ) Established Communities as of December 31, 2015 177 Communities added 25 Communities removed (1): Redevelopment Communities (3 ) Disposed Communities (6 ) Communities with multiple phases combined (2 ) Established Communities as of December 31, 2016 191 (1) We remove a community from our Established Communities portfolio for the upcoming year (and then generally maintain that designation) if we believe that planned activity for a community for the upcoming year will result in that community's expected operations not being comparable to the prior year period. We believe that a community's expected operations will not be comparable to the prior year period when we intend either (i) to undertake a significant capital renovation of the community, such that we would consider the community to be classified as a Redevelopment Community; or (ii) to dispose of a community through a sale or other disposition transaction. (2) Avalon at Edgewater was moved from the Established Communities portfolio to the Other Stabilized portfolio as a result of the fire that occurred in January 2015. 2014,2017, our current communitiesCurrent Communities consisted of 145 garden-style (of which 16 are mixed communities and/or include town homes), 22 high-rise and 77 mid-rise apartment communities.the following: Garden-style (1) 135 41,147 Mid-rise 100 26,968 High-rise 24 6,923 Total Current Communities 259 75,038 (1) Includes 16 communities with 5,186 apartment homes that include town homes. ••••fireplaces;••••••1,1. “Business,” we operate under three core brandsAvalon, AVA andEaves by Avalon. Our core “"Avalon"Avalon” brand focuses on upscale apartment living and high end amenities and services. “"AVA"AVA” targets customers in high energy, transit-served urban neighborhoods and generally feature smaller apartments, many of which are designed for roommate living with an emphasis on modern design and a technology focus. “"Eaves by Avalon"Avalon” is targeted to the cost conscious, "value"“value” segment in suburban areas. We believe that these brands allow us to further penetrate our existing markets by targeting our market by consumer preference and attitude as well as by location and price.Enhancing the Lives of our ResidentsCreating a Better Way To Live helps us achieve higher rental rates and occupancy levels while minimizing resident turnover and operating expenses. Number of
communities at Number of
apartment homes at Percentage of total
apartment homes at 1-31-13 1-31-14 1-31-13 1-31-14 1-31-13 1-31-14 1/31/2016 1/31/2017 1/31/2016 1/31/2017 1/31/2016 1/31/2017 42 49 9,652 11,868 18.4 % 16.3 % 53 50 12,528 11,783 16.6 % 15.7 % 29 34 6,792 8,518 12.9 % 11.7 % 39 37 9,639 9,234 12.8 % 12.3 % 13 15 2,860 3,350 5.5 % 4.6 % Fairfield-New Haven, CT 14 13 2,889 2,549 3.8 % 3.4 % 38 45 12,698 14,676 24.2 % 20.2 % 49 49 14,843 14,604 19.7 % 19.4 % 8 10 2,281 2,881 4.4 % 4.0 % 7 9 2,048 2,414 3.9 % 3.3 % 8 9 3,258 3,642 6.2 % 5.0 % 6 10 2,196 3,581 4.2 % 4.9 % New York City, NY 12 12 4,292 4,583 5.7 % 6.1 % 9 7 2,915 2,158 5.6 % 3.0 % 17 17 4,949 4,513 6.6 % 6.0 % New Jersey 20 20 5,602 5,508 7.4 % 7.3 % 21 37 8,493 13,118 16.2 % 18.0 % 36 39 13,308 14,374 17.6 % 19.2 % 21 37 8,493 13,118 16.2 % 18.0 % Washington Metro/Baltimore, MD 36 39 13,308 14,374 17.6 % 19.2 % 12 16 2,810 3,794 5.4 % 5.2 % 17 17 4,225 4,092 5.6 % 5.5 % 12 16 2,810 3,794 5.4 % 5.2 % 17 17 4,225 4,092 5.6 % 5.5 % 28 37 8,338 11,104 15.9 % 15.3 % 41 42 12,158 12,410 16.0 % 16.5 % San Jose, CA 14 13 5,158 4,905 6.8 % 6.5 % 8 10 2,573 3,244 4.9 % 4.5 % 11 13 3,338 3,843 4.4 % 5.1 % 11 14 2,535 3,207 4.8 % 4.4 % 16 16 3,662 3,662 4.8 % 4.9 % 9 13 3,230 4,653 6.2 % 6.4 % 37 57 10,436 17,221 19.9 % 23.7 % 58 59 17,473 16,761 23.2 % 22.3 % 18 34 4,636 10,344 8.8 % 14.2 % 36 38 10,855 11,291 14.5 % 15.0 % 11 13 3,017 3,745 5.8 % 5.1 % 12 12 3,715 3,243 4.9 % 4.3 % 8 10 2,783 3,132 5.3 % 4.3 % 10 9 2,903 2,227 3.8 % 3.0 % — 3 — 1,030 0.0 % 1.4 % 3 3 1,014 1,014 1.3 % 1.4 % 178 244 52,427 72,811 100.0 % 100.0 % 257 259 75,549 75,038 100.0 % 100.0 % 2013,2016, we completed construction of 4,9071,715 apartment homes in 12eight communities and sold 4,907twelve operating communities containing an aggregate of 4,026 apartment homes in 16 communities.homes. The average age of our Current Communities, on a weighted average basis according to number of apartment homes, is 19.619.3 years. When adjusted to reflect redevelopment activity, as if redevelopment were a new construction completion date, the weighted average age of our Current Communities is 13.512.5 years.2014,2017, we owned (directly or through wholly-owned subsidiaries):•in 211 operating communities, 11 of whichand 16 that are on land subject to a land lease, four of which are dual-branded communities with each pair of dual-branded communities being governed by a single land lease. The leases expiringexpire in October 2026, November 2028, May 2041, July 2046, December 2061, September 2065, November 2067, December 2086, April 2095, May 2105, September 2105, April 2106, November 2106 and March 2142;•I, Fund II, the U.S. Fund and the AC JV. Subsidiaries of Fund I own a fee simple interest in four operating communities, subsidiaries of Fund II own a fee simple interest in 12three operating communities, subsidiaries of the U.S. Fund own a fee simple interest in nineseven operating communities, of which one is subject to a land lease, and subsidiaries of the AC JV own a fee simple interest in twothree operating communities and one development community;communities;•"DownREIT,"“DownREIT,” as described more fully below, that owns one community; and•fivethree limited liability companies, that each hold a fee simple interest in an operating community.2625 of the 2927 Development CommunitiesCommunities. One Development Community is being developed within a joint venture and one Development Community is being developed with a leasehold interest in threeprivate development partner and we will own the multifamily rental portion of the Development Communities with the land leases expiring in July 2046, December 2086, and November 2106. Two of the three land leases (those expiring in 2046 and 2086) provide options for the Company to purchase the land at some point during the lease term.2014,2017, there were 7,500 DownREIT partnership units outstanding. The DownREIT partnership is consolidated for financial reporting purposes.Profile of Current, Development and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
reporting
cost(5)
of homes
Apt(4)
Sq. Ft. Lexington, MA 198 230,926 1994 1,166 92.9 % 95.1 % 96.1% (2) 2,152 1.76 23,805 Wilmington, MA 204 229,752 1999 1,126 81.4 % 95.9 % 96.5 % 1,451 1.24 22,675 Quincy, MA 245 224,538 1986/1996 916 90.6 % 96.5 % 96.8 % 1,605 1.69 25,478 Peabody, MA 154 198,478 2000 1,289 90.3 % 96.3 % 97.0 % 1,846 1.38 23,175 Wilmington, MA 120 133,376 2002 1,111 95.0 % 96.1 % 96.3 % 1,588 1.37 17,360 Marlborough, MA 156 175,399 2002 1,124 94.9 % 96.6 % 97.1 % 1,679 1.44 22,772 Newton, MA 294 341,717 2003 1,162 92.2 % 96.2 % 94.7 % 2,501 2.07 59,899 Plymouth, MA 192 151,712 2004/2011 790 95.0 % 97.0 % 96.0 % 1,966 2.41 37,413 Peabody, MA 286 250,624 2004 876 91.3 % 96.0 % 96.3 % 1,490 1.63 35,433 Bedford, MA 139 159,912 2005 1,150 96.4 % 96.4 % 95.5 % 2,035 1.70 25,040 Chestnut Hill, MA 204 270,956 2007 1,328 93.1 % 96.6 % 94.9 % 2,827 2.06 61,760 Shrewsbury, MA 251 272,880 2007 1,087 90.8 % 96.1 % 95.8 % 1,576 1.39 36,304 Danvers, MA 433 492,345 2006 1,137 93.3 % 96.8 % 95.5 % 1,691 1.44 84,639 Lexington, MA 387 484,560 2007 1,252 93.5 % 95.8 % 96.0 % 2,336 1.79 88,237 Acton, MA 380 375,119 2007 987 88.9 % 96.7 % 96.7 % 1,581 1.55 63,185 Sharon, MA 156 175,389 2007 1,124 92.3 % 97.3 % 96.4 % 1,826 1.58 30,457 Providence, RI 225 222,835 1991/1997 990 88.9 % 96.1 % 96.1% (2) 2,523 2.45 37,046 Hingham, MA 235 290,790 2009 1,237 89.4 % 95.3 % 94.4 % 2,425 1.87 53,940 Northborough, MA 382 182,757 2009/2010 478 91.4 % 94.5 % 96.3 % 1,784 3.52 60,614 Randolph, MA 276 269,675 2009 977 96.4 % 94.7 % 96.2 % 1,534 1.49 45,908 Cohasset, MA 220 293,272 2012 1,333 89.5 % 94.2 % 70.8% (3) 1,999 1.41 54,980 Andover, MA 115 132,918 2012 1,156 90.4 % 94.4 % 63.1% (3) 1,868 1.52 26,059 Burlington, MA 203 198,193 1988/2012 976 92.1 % 96.1 % 96.1% (3) 1,576 1.55 40,321 Boston, MA 271 246,935 1968/1998 911 87.8 % 96.1 %(2) 95.2% (2) 3,311 3.49 (2) 75,447 Boston, MA 266 243,315 1968/1998 915 88.7 % 96.1 %(2) 95.2% (2) 3,357 3.53 (2) 62,085 Boston, MA 243 242,410 1968/1998 998 94.7 % 96.1 %(2) 94.9% (2) 3,452 3.33 (2) 56,613 Boston, MA 312 315,575 2013 1,011 86.9 % 96.1 %(3) N/A 1,812 1.72 (3) 79,850 Waltham, MA 324 391,394 1999/2013 1,208 93.5 % 96.1 %(3) N/A 2,570 2.04 (3) 129,044 Quincy, MA 224 157,908 1977/2013 705 94.6 % 96.1 %(3) N/A 1,747 2.38 (3) 53,572 Natick, MA 407 362,744 2011 891 95.1 % 96.1 %(3) N/A 2,992 3.23 (3) 79,124
Trumbull, CT 340 379,242 1997 1,115 91.2 % 96.0 % 96.0 % 1,755 1.51 38,542 Stamford, CT 238 222,165 1991 933 89.5 % 96.1 %(2) 96.2 % 2,063 2.12 (2) 41,315 Wilton, CT 102 158,259 1997 1,552 87.3 % 95.5 % 94.9% (2) 3,281 2.02 22,543 Danbury, CT 268 299,923 1999 1,119 92.2 % 95.7 % 96.1 % 1,702 1.45 26,701 Stamford, CT 323 322,461 2003 998 90.7 % 95.7 % 95.5 % 2,507 2.40 63,739 New Canaan, CT 104 132,080 2002 1,270 94.2 % 93.7 % 94.5 % 3,276 2.42 24,854 Stamford, CT 306 315,380 2002 1,031 92.5 % 95.5 % 96.3 % 2,300 2.13 72,267 Danbury, CT 234 235,320 2005 1,006 92.7 % 95.9 % 96.1 % 1,702 1.62 36,124 Darien, CT 189 242,675 2004 1,284 89.4 % 95.8 % 95.8 % 2,855 2.13 42,995 Milford, CT 246 217,077 2004 882 93.9 % 96.0 % 95.7 % 1,595 1.74 32,022 Shelton, CT 99 139,869 2008 1,413 91.9 % 97.3 % 96.0 % 2,283 1.57 25,406 Norwalk, CT 311 310,629 2011 999 91.6 % 96.7 % 95.6 % 2,079 2.01 74,254 Wilton, CT 100 128,716 2011 1,287 94.0 % 95.6 % 93.1 % 2,408 1.79 30,376 Shelton, CT 250 249,190 2013 997 88.8 % 41.8 %(3) N/A 3,789 1.59 (3) 48,185 Norwalk, CT 240 223,698 2013 932 87.9 % 32.8 %(3) N/A 3,423 1.20 (3) 46,089 and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
reporting
cost(5)
of homes
Apt(4)
Sq. Ft. Smithtown, NY 312 377,240 1997 1,209 96.2 % 96.6 % 97.3 % 2,389 1.91 38,625 Long Beach, NY 109 124,611 1990/1995 1,143 90.8 % 95.7 % 96.4 % 3,543 2.96 21,705 Melville, NY 494 596,874 1997/2000 1,208 94.3 % 96.2 % 96.2 % 2,725 2.17 61,981 Glen Cove, NY 256 261,425 2004 1,021 95.3 % 96.9 % 96.6 % 2,582 2.45 68,833 Coram, NY 450 545,989 2005/2006 1,213 94.2 % 96.8 % 96.0 % 2,130 1.70 71,982 Glen Cove, NY 111 100,754 2007 908 91.0 % 96.5 % 97.0 % 2,494 2.65 40,080 Coram, NY 200 208,532 2009 1,043 94.5 % 96.6 % 95.8 % 1,898 1.76 48,383 Rockville Centre, NY 349 349,048 2012 1,000 91.7 % 96.7 % 81.2% (3) 2,884 2.79 110,834 Garden City, NY 204 288,443 2012 1,414 93.6 % 95.4 %(3) 28.8% (3) 3,541 2.39 (3) 67,483 Westbury, NY 396 401,496 2006/2013 1,014 94.4 % 96.6 %(3) N/A (3) 2,631 2.51 (3) 119,210
Jersey City, NJ 504 574,339 1997 1,140 92.9 % 96.1 % 96.0% (2) 3,246 2.74 111,502 Edgewater, NJ 408 428,792 2002 1,051 91.7 % 96.5 % 96.7 % 2,627 2.41 78,768 Florham Park, NJ 270 330,410 2001 1,224 91.1 % 96.7 % 96.7 % 2,853 2.25 43,460 Lyndhurst, NJ 328 330,408 2006 1,007 92.4 % 96.2 % 96.1 % 2,224 2.12 79,022 North Bergen, NJ 164 146,170 2012 891 95.7 % 97.0 % 62.7% (3) 2,036 2.22 40,172 Wood-Ridge, NJ 266 242,637 2012 912 93.2 % 95.9 % 48.4% (3) 1,997 2.10 57,459 Wood-Ridge, NJ 140 146,799 2013 1,049 97.9 % 65.8 %(3) N/A 2,998 1.88 (3) 22,811 Hackensack, NJ 226 228,184 2013 1,010 97.8 % 49.3 %(3) N/A 3,202 1.56 (3) 44,270
Lawrenceville, NJ 632 707,592 1994/1996 1,120 91.9 % 96.1 % 96.1 % 1,565 1.34 77,630 West Windsor, NJ 512 486,069 1988 949 92.6 % 96.7 % 96.6 % 1,658 1.69 48,584 Freehold, NJ 296 317,356 2002 1,072 90.2 % 96.7 % 97.5 % 1,918 1.73 35,295 Lawrenceville, NJ 312 341,320 2003 1,094 91.0 % 96.5 % 96.6 % 1,914 1.69 52,734 Tinton Falls, NJ 216 237,747 2007 1,101 94.9 % 96.4 % 96.8 % 1,911 1.67 41,161 West Long Branch, NJ 180 193,511 2011 1,075 92.2 % 96.8 % 98.0 % 1,955 1.76 25,660 Somerset, NJ 384 390,365 2013 1,017 90.1 % 51.9 %(3) 6.6% (3) 1,903 0.97 (3) 75,894
Long Island City, NY 372 332,991 2002 895 93.3 % 96.8 % 96.4 % 3,460 3.74 97,654 New York, NY 206 152,725 2006 741 96.6 % 96.7 % 97.0 % 5,094 6.64 95,323 Long Island City, NY 602 477,665 2007 793 93.0 % 96.6 % 96.3 % 3,276 3.99 169,007 New York, NY 90 73,596 2007 818 95.6 % 96.5 % 96.9 % 4,682 5.53 57,689 New York, NY 295 245,320 2009 832 95.3 % 96.2 % 95.7 % 3,467 4.01 115,114 Brooklyn, NY 631 498,651 2010 790 94.8 % 96.0 % 96.0 % 3,125 3.80 302,124 New York, NY 550 393,554 1998/2013 716 94.4 % 93.4 %(3) N/A 4,002 5.22 (3) 346,771 New York, NY 339 181,672 2008/2013 536 91.4 % 94.6 %(3) N/A 3,200 5.65 (3) 195,860 New York, NY 288 160,368 2007/2013 557 92.7 % 93.7 %(3) N/A 3,248 5.47 (3) 166,439
Nanuet, NY 504 608,842 1998 1,208 91.9 % 96.9 % 97.2 % 2,224 1.78 57,368 Elmsford, NY 105 113,538 1995 1,081 90.5 % 95.5 % 97.5 % 2,447 2.16 13,748 Mamaroneck, NY 227 216,161 2000 952 91.6 % 96.0 % 96.4 % 2,435 2.45 48,325 Bronxville, NY 110 118,952 1999 1,081 89.1 % 93.2 %(2) 96.0% (2) 4,135 3.56 (2) 39,161 White Plains, NY 407 372,406 2009 915 92.6 % 96.2 % 96.5 % 2,984 3.14 152,755 Elmsford, NY 444 533,539 2012 1,202 90.5 % 95.9 % 55.0% (3) 2,519 2.01 104,549 Profile of Current, Development and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
reporting
cost(5)
of homes
Apt(4)
Sq. Ft. Columbia, MD 720 724,027 1987/1996 1,006 94.2 % 95.9 %(2) 95.6% (2) 1,523 1.45 (2) 58,877 Columbia, MD 392 180,410 1986 460 90.9 % 96.1 % 95.8 % 1,542 3.22 55,764 Laurel, MD 238 274,663 1999/2013 1,154 95.0 % 95.1 %(3) N/A 1,829 1.51 (3) 60,215
Washington, DC 308 297,875 1982 967 93.5 % 94.6 % 93.7 % 2,589 2.53 45,819 Washington, DC 203 184,157 2003 907 90.1 % 96.1 % 96.3 % 2,913 3.08 49,118 Gaithersburg, MD 192 191,280 1996 996 94.3 % 97.0 % 96.4 % 1,537 1.50 14,846 Gaithersburg, MD 96 99,386 1998 1,035 91.7 % 96.7 % 94.5 % 1,739 1.62 8,424 North Bethesda, MD 497 476,585 2004 959 93.8 % 95.2 % 96.2 % 1,975 1.96 83,925 North Potomac, MD 520 573,717 2004 1,103 94.6 % 96.8 % 96.9 % 1,929 1.69 70,383 Fairfax, VA 420 355,228 1989/1996 846 93.3 % 96.4 % 96.8 % 1,552 1.77 38,532 Arlington, VA 344 294,271 1990 855 93.3 % 95.3 %(2) 92.8% (2) 2,207 2.46 (2) 52,585 Fairfax, VA 141 148,282 1988/1997 1,052 95.7 % 96.1 % 95.6% (2) 1,813 1.66 16,449 McLean, VA 558 613,426 1996 1,099 94.1 % 95.8 % 96.2 % 2,040 1.78 58,703 Arlington, VA 842 895,781 2001 1,064 94.3 % 95.4 % 95.7 % 2,121 1.90 114,830 Tysons Corner, VA 354 288,231 2010 814 94.9 % 83.7 %(3) 29.4% (3) 2,480 2.55 (3) 77,042 Falls Church, VA 415 336,051 1978/2011 810 94.0 % 96.4 % 96.8 % 1,747 2.08 93,255 Washington, DC 138 95,594 2012 693 91.3 % 72.2 %(3) 4.7% (3) 2,775 2.89 (3) 32,893 Washington, DC 469 410,812 2013 876 84.0 % 80.6 %(3) N/A 2,879 2.65 (3) 200,037 Washington, DC 228 256,610 1966/2013 1,123 95.2 % 96.9 %(3) N/A 2,637 2.27 (3) 81,122 Washington, DC 166 135,450 1944/2013 816 95.2 % 96.3 %(3) N/A 1,817 2.15 (3) 41,079 Washington, DC 281 190,420 1961/2013 678 91.1 % 96.1 %(3) N/A 1,972 2.80 (3) 76,888 Washington, DC 120 104,310 1953/2013 869 93.3 % 96.6 %(3) N/A 2,329 2.59 (3) 37,710 Washington, DC 269 225,924 1978/2013 843 93.3 % 94.2 %(3) N/A 2,181 2.45 (3) 84,714 Philadelphia, PA 80 66,440 1945/2013 831 N/A N/A (3) N/A N/A 2.25 (3) 36,235 Arlington, VA 383 333,677 2001/2013 871 94.8 % 95.3 %(3) N/A 2,591 2.83 (3) 165,782 Vienna, VA 217 209,940 1980/2013 967 91.7 % 96.8 %(3) N/A 1,798 1.80 (3) 63,690 Arlington, VA 714 626,170 1992/2013 877 93.1 % 94.8 %(3) N/A 2,374 2.57 (3) 297,083 Arlington, VA 564 478,896 1999/2013 849 92.2 % 94.9 %(3) N/A 2,440 2.73 (3) 242,381 Reston, VA 400 398,192 2000/2013 995 93.5 % 96.5 %(3) N/A 1,831 1.77 (3) 113,921 Arlington, VA 184 154,376 1987/2013 839 N/A N/A (3) N/A N/A 2.24 (3) 59,235
Redmond, WA 222 211,450 1991/1997 952 94.1 % 95.4 % 96.2 % 1,577 1.58 32,519 Redmond, WA 264 288,250 1998 1,092 93.9 % 95.6 % 95.5 % 1,582 1.38 37,722 Bellevue, WA 200 165,504 2001 828 92.5 % 95.6 % 96.5 % 1,790 2.07 32,416 Bothell, WA 206 243,958 2000 1,184 89.3 % 95.5 % 96.2 % 1,430 1.15 26,193 Redmond, WA 124 127,251 2000 1,026 90.3 % 95.9 % 96.3 % 1,786 1.67 21,271 Lynwood, WA 424 453,602 2001 1,070 93.4 % 95.9 % 96.1 % 1,301 1.17 46,902 Seattle, WA 100 82,418 2001 824 91.0 % 96.1 % 97.2 % 1,916 2.23 19,198 Bellevue, WA 368 331,945 2008 902 95.9 % 96.5 % 96.8 % 1,856 1.98 91,339 Bellevue, WA 397 331,366 2011 835 91.7 % 95.3 % 95.4 % 2,165 2.47 123,267 Seattle, WA 203 164,644 2012 811 92.1 % 95.6 % 69.0% (3) 2,011 2.37 53,785 Lynwood, WA 82 93,320 2011 1,138 91.5 % 96.3 % 94.0 % 1,529 1.29 13,998 Seattle, WA 265 190,043 2012 717 92.1 % 47.9 %(3) N/A 2,814 1.88 (3) 63,121 Redmond, WA 422 429,164 1991/2013 1,017 94.1 % 94.4 %(3) N/A 1,760 1.63 (3) 114,623 Redmond, WA 166 141,000 1987/2013 849 97.6 % 96.0 %(3) N/A 1,478 1.67 (3) 38,460 Profile of Current, Development and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
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cost(5)
of homes
Apt(4)
Sq. Ft. Fremont, CA 308 316,052 1994 1,026 96.8 % 96.3 % 96.8 % 2,031 1.91 59,134 Dublin, CA 204 179,004 1989/1997 877 95.1 % 96.4 % 95.8 % 1,836 2.02 29,575 Pleasanton, CA 456 366,062 1988/1994 803 93.4 % 96.5 % 95.3 % 1,794 2.16 79,416 Union City, CA 208 150,225 1973/1996 722 93.3 % 96.4 % 97.1 % 1,516 2.02 23,866 Fremont, CA 235 191,935 1985/1994 817 94.9 % 96.4 % 96.1 % 1,835 2.17 42,895 Union City, CA 439 429,768 2009 979 93.2 % 96.7 % 96.3 % 1,840 1.82 118,989 Walnut Creek, CA 418 409,890 2010 981 95.2 % 95.8 % 95.8 % 2,305 2.25 146,994 Walnut Creek, CA 510 380,542 1987/2013 746 94.3 % 95.7 %(3) N/A 1,614 2.07 (3) 116,914 Walnut Creek, CA 106 80,942 2000/2013 764 90.6 % 95.0 %(3) N/A 1,952 2.43 (3) 30,530 Walnut Creek, CA 360 251,901 1989/2013 700 96.1 % 94.7 %(3) N/A 1,698 2.30 (3) 87.425
Daly City, CA 195 141,411 1972/1997 725 95.9 % 96.0 % 97.0 % 1,939 2.57 32,508 San Francisco, CA 185 108,962 1990/1995 589 95.7 % 97.0 % 97.2 % 2,520 4.15 33,857 San Rafael, CA 254 221,780 1973/1996 873 91.7 % 97.4 % 96.4 % 1,911 2.13 46,888 Foster City, CA 288 222,364 1973/1994 772 93.1 % 95.2 % 91.9 %(2) 2,073 2.56 50,505 Pacifica, CA 220 186,800 1971/1995 849 94.5 % 96.9 % 96.3 % 1,898 2.17 33,192 San Francisco, CA 243 171,836 1961/1996 707 95.5 % 95.2 % 96.1 %(2) 2,391 3.22 39,716 San Francisco, CA 154 123,047 1972/1994 799 96.1 % 96.7 % 96.1 % 2,341 2.83 29,646 San Francisco, CA 250 241,788 2003 967 94.0 % 96.1 % 96.7 % 3,975 3.95 94,405 San Francisco, CA 260 261,169 2009 1,004 97.3 % 96.2 % 96.3 % 3,977 3.81 147,918 San Francisco, CA 173 161,083 2012 931 95.4 % 96.5 % 47.5 %(3) 3,104 3.22 58,152 San Bruno, CA 300 267,171 2004/2013 891 96.0 % 94.9 %(3) N/A 2,400 2.56 (3) 112,220 San Bruno, CA 185 156,583 2007/2013 846 96.2 % 95.8 %(3) N/A 2,275 2.58 (3) 70,397 San Bruno, CA 187 231,306 2010/2013 1,237 95.7 % 95.6 %(3) N/A 3,222 2.49 (3) 98,567
��
Campbell, CA 348 326,796 1995 939 95.4 % 95.2 %(2) 95.7 %(2) 2,041 2.07 (2) 72,773 San Jose, CA 440 322,992 1985/1996 734 94.4 % 96.5 %(2) 93.8 %(2) 1,908 2.51 (2) 84,791 San Jose, CA 305 299,762 1999 983 94.8 % 96.5 % 96.2 % 2,317 2.27 57,964 Sunnyvale, CA 710 653,929 1997/1998 921 95.9 % 96.2 % 95.2 % 2,352 2.46 124,896 Mountain View, CA 248 211,552 1986 853 96.4 % 96.0 % 96.3 % 2,520 2.84 58,659 Mountain View, CA 294 215,680 1962/1997 734 92.9 % 95.9 %(2) 96.5 % 1,973 2.58 (2) 44,425 San Jose, CA 218 218,177 2002 1,001 95.0 % 96.2 % 95.8 % 2,361 2.27 53,284 Mountain View, CA 211 218,392 2002 1,035 97.2 % 96.0 % 95.2 % 3,333 3.09 66,654 San Jose, CA 412 382,147 2002/2013 928 94.4 % 95.0 %(3) N/A 2,107 2.16 (3) 131,888 San Jose, CA 789 504,171 1970/2013 639 95.1 % 95.0 %(3) N/A 1,592 2.37 (3) 211,273 Mountain View, CA 402 261,702 1969/2013 651 95.0 % 96.0 %(3) N/A 2,079 3.07 (3) 137,629 San Jose, CA 84 71,136 2013 847 76.2 % 26.2 %(3) N/A 816 0.25 (3) 17,291 Profile of Current, Development and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
reporting
cost(5)
of homes
Apt(4)
Sq. Ft. Costa Mesa, CA 145 122,415 1956/1996 844 86.2 % 96.0 % 94.9 %(2) 1,940 2.21 15,590 Mission Viejo, CA 166 124,600 1984/1996 751 93.4 % 95.9 % 96.6 % 1,337 1.71 14,260 Costa Mesa, CA 258 207,672 1973/1996 805 94.6 % 95.4 % 95.7 % 1,616 1.92 33,541 Rancho Santa Margarita, CA 301 229,593 1990/1997 763 92.7 % 96.2 % 94.4 %(2) 1,490 1.88 31,766 Huntington Beach, CA 304 268,000 1971/1997 882 95.1 % 96.0 % 96.3 % 1,606 1.75 34,138 Anaheim, CA 251 302,480 2009 1,205 86.5 % 96.1 % 95.4 % 2,279 1.82 97,626 Irvine, CA 279 243,157 2010 872 91.4 % 95.0 % 95.1 % 1,851 2.02 77,501 Corona, CA 320 241,440 1987/2006 755 93.4 % 96.6 % 96.9 % 1,099 1.41 30,047 Lake Forest, CA 225 215,319 1975/2011 957 91.1 % 96.4 % 95.5 % 1,538 1.55 26,728 Irvine, CA 179 160,987 2012 899 87.2 % 76.1 %(3) 8.3 %(2) 1,916 1.62 (3) 45,229 Seal Beach, CA 549 387,594 1971/2013 706 91.3 % 94.7 %(3) N/A 1,731 2.32 (3) 151,083
San Diego, CA 564 402,285 1969/1997 713 94.5 % 96.5 % 96.2 % 1,514 2.05 68,132 San Diego, CA 200 207,700 1960/1997 1,039 91.0 % 96.3 % 95.9 % 1,753 1.63 24,825 San Diego, CA 299 230,395 1973/1998 771 92.0 % 95.8 % 92.3 %(2) 1,729 2.15 46,367 San Diego, CA 161 183,802 2008 1,142 92.5 % 96.8 % 94.2 % 2,380 1.80 64,884 San Marcos, CA 184 161,352 1988/2011 877 93.5 % 96.2 % 96.6 % 2,381 1.70 16,662 San Diego, CA 250 191,256 1986/2011 765 92.8 % 96.2 % 94.4 % 2,382 1.86 33,872 San Diego, CA 180 137,036 1987/2013 761 91.1 % 97.0 %(3) N/A 2,383 2.14 (3) 46,094 La Mesa, CA 168 139,428 1989/2013 830 93.5 % 95.8 %(3) N/A 2,384 1.80 (3) 39,069
Burbank, CA 748 530,160 1961/1997 709 93.6 % 95.1 %(2) 97.2 %(2) 1,548 2.08 (2) 93,048 Woodland Hills, CA 663 594,396 1989/1997 897 93.8 % 96.7 % 96.7 % 1,702 1.84 111,131 Woodland Hills, CA 227 191,443 1979/1998 843 93.8 % 97.4 % 97.4 % 1,621 1.87 29,218 Burbank, CA 223 241,714 2003 1,084 94.2 % 95.6 % 96.8 % 2,378 2.10 43,217 Burbank, CA 400 360,587 1988/2002 901 93.8 % 96.3 % 96.1 % 2,281 2.44 94,643 Camarillo, CA 249 233,273 2006 937 95.6 % 96.1 % 96.3 % 1,698 1.74 48,822 Los Angeles, CA 123 125,093 2007 1,017 95.9 % 95.1 % 96.2 % 2,865 2.68 47,595 Los Angeles, CA 131 131,220 2008 1,002 89.3 % 97.7 % 97.4 % 2,660 2.60 62,242 Canoga Park, CA 210 186,402 2007 888 95.2 % 97.0 % 96.6 % 1,710 1.87 52,931 Pomona, CA 501 498,036 1989/2011 994 94.8 % 96.6 % 96.4 % 1,507 1.46 51,595 San Dimas, CA 102 94,200 1978/2011 924 97.1 % 97.2 % 96.6 % 1,338 1.41 9,759 San Dimas, CA 156 144,669 1981/2011 927 92.9 % 97.1 % 96.6 % 1,436 1.50 15,561 Pasadena, CA 84 70,648 1973/2012 841 90.5 % 87.8 %(2) 97.9 %(3) 1,837 1.92 (2) 23,534 Artesia, CA 151 106,961 1973/2012 708 95.4 % 95.2 % 93.7 %(3) 1,406 1.89 29,500 Del Rey, CA 309 283,183 2006/2012 916 93.5 % 96.8 % 97.2 %(3) 2,154 2.27 103,205 Simi Valley, CA 500 430,218 2007/2013 860 95.0 % 96.4 %(3) N/A 1,674 1.88 (3) 119,684 Studio City, CA 101 84,207 1991/2013 834 92.1 % 94.0 %(3) N/A 1,937 2.18 (3) 28,523 Profile of Current, Development and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
reporting
cost(5)
of homes
Apt(4)
Sq. Ft. Studio City, CA 276 263,512 2002/2013 955 91.7 % 94.4 %(3) N/A 2,330 2.30 (3) 97,194 Calabasas, CA 600 506,394 1988/2013 844 92.7 % 95.5 %(3) N/A 1,749 1.98 (3) 156,518 Agoura Hills, CA 336 364,176 2004/2013 1,084 92.6 % 94.8 %(3) N/A 2,281 2.00 (3) 127,587 Santa Monica, CA 133 122,502 2007/2013 921 90.2 % 93.8 %(3) N/A 4,040 4.11 (3) 95,736 Pasadena, CA 347 338,466 2006/2013 975 93.7 % 94.3 %(3) N/A 2,220 2.15 (3) 130,181 Pasadena, CA 96 66,420 1972/2013 692 94.8 % 96.4 %(3) N/A 1,726 2.41 (3) 25,468 Thousand Oaks, CA 154 134,388 1992/2013 873 93.5 % 95.7 %(3) N/A 1,861 2.04 (3) 35,835 Los Angeles, CA 263 201,830 1989/2013 767 92.8 % 96.0 %(3) N/A 1,749 2.19 (3) 65,273 Los Angeles, CA 1,151 795,442 1973/2013 691 N/A N/A (3) N/A N/A 2.07 (3) 256,316 Woodland Hills, CA 883 578,365 1971/2013 655 95.1 % 95.8 %(3) N/A 1,374 2.01 (3) 166,429 Thousand Oaks, CA 148 140,452 2002/2013 949 95.9 % 96.5 %(3) N/A 1,944 1.98 (3) 37,031 Pasadena, CA 120 102,516 2004/2013 854 92.5 % 95.1 %(3) N/A 2,343 2.61 (3) 43,325 Studio City, CA 450 331,324 1987/2013 736 93.3 % 94.9 %(3) N/A 1,801 2.32 (3) 112,222
Flower Mound, TX 222 218,309 2000/2013 983 91.4 % 96.3 %(3) N/A 1,300 1.27 (3) 32,108 Houston, TX 556 434,236 1996/2013 781 91.0 % 95.4 %(3) N/A 1,397 1.71 (3) 187,351
Boston, MA 187 200,641 N/A 1,073 17.6 % N/A (3) N/A N/A N/A (3) 95,579 New York, NY 710 226,556 N/A 319 N/A N/A (3) N/A N/A N/A (3) 228,950 Tysons Corner, VA 531 458,198 N/A 863 27.7 % 6.5 %(3) N/A N/A N/A (3) 110,310 Somerville, MA 445 181,910 N/A 409 19.5 % N/A (3) N/A N/A N/A (3) 99,880 Seattle, WA 283 201,389 N/A 712 42.4 % 22.6 %(3) N/A N/A N/A (3) 68,640 Dublin, CA 253 247,301 N/A 977 24.5 % N/A (3) N/A N/A N/A (3) 74,099 San Jose, CA 250 277,710 N/A 1,111 22.0 % 4.0 %(3) N/A N/A N/A (3) 68,443 San Francisco, CA 273 236,907 N/A 868 4.0 % N/A (3) N/A N/A N/A (3) 100,858 Bloomingdale, NJ 174 176,542 N/A 1,015 71.8 % 27.2 %(3) N/A N/A N/A (3) 28,831 Wharton, NJ 248 246,814 N/A 995 N/A N/A (3) N/A N/A N/A (3) 20,533 Ossining, NY 168 184,137 N/A 1,096 12.5 % N/A (3) N/A N/A N/A (3) 24,768 Los Angeles, CA 280 282,917 N/A 1,010 N/A N/A (3) N/A N/A N/A (3) 62,238 Boston, MA 398 324,768 N/A 816 N/A N/A (3) N/A N/A N/A (3) 52,037 Canton, MA 196 235,437 N/A 1,201 6.1 % N/A (3) N/A N/A N/A (3) 20,638 Stratford, CT 130 148,720 N/A 1,144 N/A N/A (3) N/A N/A N/A (3) 13,398 Bloomfield, NJ 224 211,008 N/A 942 N/A N/A (3) N/A N/A N/A (3) 12,332 New York, NY 826 606,284 N/A 734 N/A N/A (3) N/A N/A N/A (3) 172,272 Huntington Station, NY 303 364,602 N/A 1,203 1.3 % N/A (3) N/A N/A N/A (3) 48,921 Lynnwood, WA 367 352,320 N/A 960 N/A N/A (3) N/A N/A N/A (3) 31,288 San Francisco, CA 182 135,044 N/A 742 N/A N/A (3) N/A N/A N/A (3) 39,052 Lake Forest, CA 430 424,840 N/A 988 N/A N/A (3) N/A N/A N/A (3) 34,803 Vista, CA 221 222,768 N/A 1,008 N/A N/A (3) N/A N/A N/A (3) 15,349 San Dimas, CA 156 152,724 N/A 979 N/A N/A (3) N/A N/A N/A (3) 18,729 Los Angeles, CA 256 242,176 N/A 946 N/A N/A (3) N/A N/A N/A (3) 23,052 Profile of Current, Development and Unconsolidated Communities(1)(14)
rentable area
(Sq. Ft.)
completion/
acquisition
size
(Sq. Ft.)
occupancy
at
12/31/13
reporting
cost(5)
of homes
Apt(4)
Sq. Ft. Cambridge, MA 103 46,453 N/A 451 N/A N/A (3) N/A N/A N/A (3) N/A Arlington, VA 228 268,618 N/A 1,178 14.5 % N/A (3) N/A N/A N/A (3) 69,524 Berkeley, CA 94 79,524 N/A 846 N/A N/A (3) N/A N/A N/A (3) 23,096 Houston, TX 474 460,983 N/A 973 62.9 % 37.9 %(3) N/A 1,336 N/A (3) 86,419 Houston, TX 318 305,262 N/A 960 4.7 % N/A(3 ) N/A N/A N/A (3) 35,920
San Francisco, CA 313 291,556 2006 931 93.9 % 96.5 % 96.3 % 3,843 3.98 N/A New York, NY 361 266,940 2005 739 94.5 % 94.2 % 95.7 % 4,651 5.93 N/A West Covina, CA 85 104,600 1966/2007 1,231 92.9 % 97.0 % 96.4 % 1,807 1.42 N/A Weymouth, MA 211 154,957 1971/2007 734 90.5 % 95.8 % 97.3 % 1,331 1.74 N/A East Rutherford, NJ 108 112,709 2005/2007 1,044 92.6 % 96.2 % 95.9 % 2,383 2.20 N/A Fairfax, VA 491 373,843 1987/2009 761 93.7 % 96.5 % 97.0 % 1,504 1.91 N/A Bellevue, WA 220 165,948 1994/2009 754 95.9 % 95.8 % 95.7 % 1,516 1.92 N/A Tustin, CA 628 511,992 1968/2010 815 92.4 % 96.0 % 95.1 % 1,469 1.73 N/A Lake Forest, CA 140 126,480 1978/2010 903 92.1 % 97.4 % 95.6 % 1,448 1.56 N/A San Diego, CA 450 340,371 1985/2011 756 92.4 % 96.4 % 96.3 % 1,403 1.79 N/A San Diego, CA 676 587,500 1985/2011 869 90.8 % 95.7 % 95.9 % 1,463 1.61 N/A Owings Mills, MD 348 340,868 1999/2010 980 93.7 % 96.2 % 96.1 % 1,283 1.26 N/A Gaithersburg, MD 684 658,846 1974/2010 963 94.6 % 96.4 % 95.4 % 1,326 1.33 N/A Rockville, MD 210 403,912 1970/2011 1,923 95.2 % 96.9 % 90.2 % 2,162 1.09 N/A Plainsboro, NJ 776 553,320 1973/2010 713 90.5 % 96.4 % 96.6 % 1,215 1.64 N/A Lexington, MA 94 88,680 1965/2011 943 95.7 % 95.8 % 96.0 % 2,116 2.15 N/A Watchung, NJ 334 336,586 2003/2012 1,008 94.9 % 96.3 % 96.2 % 1,945 1.86 N/A Cambridge, MA 426 383,537 2008/2013 900 89.2 % 94.0 %(3) N/A 3,354 3.50 (3) N/A Dedham, MA 285 306,375 2011/2013 1,075 90.2 % 94.9 %(3) N/A 2,094 1.85 (3) N/A New York, NY 209 152,865 1997/2013 731 94.3 % 93.3 %(3) N/A 4,581 5.84 (3) N/A Washington, DC 305 390,456 1954/2013 1,280 N/A 92.0 %(3) N/A 2,388 1.72 (3) N/A Herndon, VA 392 393,112 2000/2013 1,003 92.9 % 95.0 %(3) N/A 1,694 1.60 (3) N/A Bethesda, MD 237 229,392 1987/2013 972 94.5 % 94.1 %(3) N/A 2,107 2.05 (3) N/A Sunnyvale, CA 192 204,096 1991/2013 1,063 95.3 % 95.7 %(3) N/A 2,591 2.33 (3) N/A Boca Raton, FL 252 268,128 1988/2013 1,064 90.1 % 95.1 %(3) N/A 1,520 1.36 (3) N/A Kirkland, WA 131 174,720 1990/2013 1,344 90.1 % 95.6 %(3) N/A 2,510 1.80 (3) N/A Studio City, CA 149 125,299 2009/2013 841 96.0 % 94.9 %(3) N/A 2,187 2.47 (3) N/A Marina del Rey, CA 205 167,075 1967/2013 815 35.6 % 65.4 %(2)(3) N/A 1,259 1.01 (3) N/A Venice, CA 70 84,490 2011/2013 1,207 91.4 % 93.3 %(3) N/A 4,655 3.60 (3) N/A 1.We own a fee simple interest in the communities listed, excepted as noted below.2.Represents a community that was under redevelopment during the year, which could result in lower average economic occupancy and average rental rate per square foot for the year.3.Represents a community that is under construction at the respective year end or that completed development or was purchased during the year, which could result in lower average economic occupancy and average rental rate per square foot for the year.4.Represents the average rental revenue per occupied apartment home.5.Dollars in thousands. Costs are presented in accordance with GAAP. For current Development Communities, cost represents total costs incurred through December 31, 2013. Financial reporting costs are excluded for unconsolidated communities, see Note 6, "Investments in Real Estate Entities."6.We own a 15.2% combined general partnership and indirect limited partner equity interest in this community.7.We own a 31.3% combined general partnership and indirect limited partner equity interest in this community.8.We own a 28.6% combined general partnership and indirect limited partner equity interest in this community.9.We own a 20.0% combined general partnership and indirect limited partner equity interest in this community.10.We own a general partnership interest in a partnership that owns a fee simple interest in this community.11.We own a general partnership interest in a partnership structured as a DownREIT that owns this community.12.We own a membership interest in a limited liability company that holds a fee simple interest in this community.13.Community is located on land subject to a land lease.14.Does not include our indirect interest in the joint venture formed with Equity Residential (as defined in this Form 10-K).15.Community is master leased to a third party manager.Development Communities2013,2016, we had 29owned or held a direct or indirect interest in 27 Development Communities under construction. We expect these Development Communities, when completed, to add a total of 8,7089,129 apartment homes to our portfolio for a total capitalized cost, including land acquisition costs, of approximately $2,802,900,000. In addition, the land for three Development Communities that we control under long-term land lease agreements is subject to future minimum rental amounts of approximately $8,552,000 in 2014 in the aggregate.$4,045,000,000. We cannot assure you that we will meet our schedule for construction completion or that we will meet our budgeted costs, either individually, or in the aggregate. You should carefully review Item 1a., "Risk Factors,"1A. “Risk Factors” for a discussion of the risks associated with development activity and our discussion under Item 7., "Management's “Management's Discussion and Analysis of Financial Condition and Results of Operations,"Operations” (including the factors identified under “Forward-Looking Statements”) for further discussion of development activity.direct or indirect fee simple ownership interest in these communities except where noted.(directly or through a wholly-owned subsidiary) unless otherwise noted in the table. Initial actual/ projected occupancy (2) 1. 826 $ 456.3 Q3 2013 Q4 2015 Q1 2017 Q3 2017 2. 378 120.3 Q2 2014 Q1 2016 Q1 2017 Q3 2017 3. 294 153.6 Q2 2014 Q1 2017 Q4 2017 Q2 2018 4.
Boston, MA503 271.2 Q3 2014 Q4 2016 Q1 2018 Q3 2018 5. 482 137.8 Q3 2014 Q1 2016 Q2 2017 Q4 2017 6. 280 95.5 Q4 2014 Q3 2016 Q3 2017 Q1 2018 7. 332 74.0 Q1 2015 Q3 2016 Q3 2017 Q1 2018 8. 438 148.3 Q2 2015 Q2 2017 Q1 2018 Q3 2018 9. 395 95.3 Q2 2015 Q2 2016 Q3 2017 Q1 2018 10. 191 78.9 Q2 2015 Q2 2017 Q3 2017 Q1 2018 11. 344 72.4 Q2 2015 Q2 2016 Q2 2017 Q4 2017 12.
Brooklyn, NY180 86.4 Q3 2015 Q3 2017 Q4 2017 Q2 2018 13.
Newcastle, WA378 116.3 Q3 2015 Q4 2016 Q4 2017 Q2 2018 14. 331 96.6 Q3 2015 Q4 2016 Q4 2017 Q1 2018 15. 235 65.4 Q4 2015 Q2 2017 Q4 2017 Q2 2018 16. 165 57.8 Q4 2015 Q3 2017 Q4 2017 Q2 2018 17 319 75.6 Q4 2015 Q3 2017 Q2 2018 Q4 2018 18.
San Francisco, CA326 203.4 Q4 2015 Q4 2017 Q3 2018 Q1 2019 19. 290 64.0 Q1 2016 Q2 2017 Q1 2018 Q3 2018 20. 152 45.1 Q2 2016 Q3 2017 Q1 2018 Q3 2018 21. 265 113.9 Q2 2016 Q1 2018 Q4 2018 Q2 2019 22. 350 91.2 Q3 2016 Q2 2019 Q1 2020 Q3 2020 23. 172 603.7 Q4 2016 Q2 2019 Q4 2019 Q2 2020 24. 275 146.9 Q4 2016 Q3 2019 Q4 2019 Q2 2020 25. 285 139.6 Q4 2016 Q3 2018 Q1 2019 Q3 2019 26. 248 70.4 Q4 2016 Q4 2018 Q2 2019 Q4 2019 27. 695 365.1 Q4 2016 Q2 2019 Q2 2020 Q4 2020 Total 9,129 $ 4,045.0 (1) Projected total capitalized cost includes all capitalized costs projected to be or actually incurred to develop the respective Development Community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees. Projected total capitalized cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. (2) Initial projected occupancy dates are estimates. There can be no assurance that we will pursue to completion any or all of these proposed developments. (3) (4) Developments containing at least 10,000 square feet of retail space include Avalon Huntington Beach (10,000 square feet), Avalon West Hollywood (32,000 square feet), Avalon Esterra Park (17,000 square feet), Avalon Newcastle Commons I (15,000 square feet), 11 West 61st Street (67,000 square feet), Avalon Belltown Towers (11,000 square feet) and AVA Hollywood (19,000 square feet). (5) We are developing this project with a private development partner. We will own the rental portion of the development on floors 3 through 19 and the partner will own the for-sale condominium portion on floors 20 through 30 of the development. The information above represents only our portion of the project. We are providing a construction loan to the development partner, expected to be $48,800,000 which together with the partner's contributed equity is expected to fund the condominium portion of the project. A more detailed description of Avalon Sheepshead Bay can be found in Note 5, “Investments in Real Estate Entities,” of the Consolidated Financial Statements set forth in Item 8 of this report. (6) In February 2017, a fire occurred at at Avalon Maplewood. See "Insurance and Risk of Uninsured Losses" for further discussion. (7) We are developing this project within a joint venture that was formed in July 2016, in which we own a 55.0% interest. The information above represents the total cost for the venture. Number of
apartment
homes Projected total
capitalized cost(1)
($ millions) Construction
start Initial projected
occupancy(2) Estimated
completion Estimated
stabilization(3) Archstone Toscano 474 $ 90.2 Q2 2011 Q1 2013 Q1 2014 Q3 2014 Houston, TX Avalon Bloomingdale 174 32.2 Q3 2012 Q3 2013 Q1 2014 Q3 2014 Bloomingdale, NJ AVA University District 283 75.7 Q2 2012 Q3 2013 Q2 2014 Q4 2014 Seattle, WA Avalon Mosaic 531 116.4 Q1 2012 Q3 2013 Q4 2014 Q2 2015 Tysons Corner, VA Avalon West Chelsea/AVA High Line(4) 710 276.1 Q4 2011 Q4 2013 Q1 2015 Q3 2015 New York, NY Avalon Arlington North(5) 228 87.2 Q2 2012 Q4 2013 Q3 2014 Q1 2015 Arlington, VA Avalon Morrison Park 250 79.7 Q3 2012 Q4 2013 Q3 2014 Q1 2015 San Jose, CA Avalon Dublin Station II 253 77.7 Q2 2012 Q1 2014 Q2 2014 Q4 2014 Dublin, CA Avalon/AVA Assembly Row(4) 445 113.5 Q2 2012 Q1 2014 Q3 2014 Q1 2015 Somerville, MA AVA 55 Ninth 273 123.3 Q3 2012 Q1 2014 Q4 2014 Q2 2015 San Francisco, CA Avalon Exeter(4) 187 120.0 Q2 2011 Q1 2014 Q3 2014 Q1 2015 Boston, MA Avalon Ossining 168 37.4 Q4 2012 Q1 2014 Q3 2014 Q1 2015 Ossining, NY Avalon Canton 196 40.9 Q2 2013 Q1 2014 Q4 2014 Q2 2015 Canton, MA Avalon Huntington Station 303 83.3 Q1 2013 Q1 2014 Q1 2015 Q3 2015 Huntington Station, NY Archstone Memorial Heights Phase I 318 54.9 Q3 2012 Q1 2014 Q3 2014 Q1 2015 Houston, TX Avalon Berkeley(5) 94 30.2 Q3 2012 Q2 2014 Q3 2014 Q4 2014 Berkeley, CA AVA Little Tokyo 280 109.8 Q4 2012 Q3 2014 Q2 2015 Q4 2015 Los Angeles, CA Avalon Wharton 248 55.6 Q4 2012 Q1 2015 Q3 2015 Q1 2016 Wharton, NJ AVA Stuart Street 398 175.7 Q1 2013 Q1 2015 Q3 2015 Q1 2016 Boston, MA Avalon Alderwood I 367 69.2 Q2 2013 Q2 2014 Q2 2015 Q4 2015 Lynnwood, WA Avalon San Dimas 156 41.4 Q2 2013 Q4 2014 Q1 2015 Q3 2015 San Dimas, CA Maple Leaf(6) 103 28.0 Q3 2013 Q3 2014 Q4 2014 Q1 2015 Cambridge, MA Number of
apartment
homes
($ millions) Total capitalized cost per sq. ft. Quarter of completion 1. 384 $ 106.3 396,536 $ 268 Q1 2016 2. 280 83.5 266,226 $ 314 Q1 2016 3. 68 22.3 77,722 $ 287 Q1 2016 4. 249 81.5 191,488 $ 426 Q2 2016 5. 156 55.7 151,363 $ 368 Q2 2016 6. 202 50.3 230,418 $ 218 Q2 2016 7. 252 84.6 243,809 $ 347 Q3 2016 8. 124 26.6 119,926 $ 222 Q3 2016 Total 1,715 $ 510.8 (1) Total capitalized cost is as of December 31, 2016. We generally anticipate incurring additional costs associated with these communities that are customary for new developments. (2) Approximate rentable area includes 16,000 square feet of retail space. Number of
apartment
homes Projected total
capitalized cost(1)
($ millions) Construction
start Initial projected
occupancy(2) Estimated
completion Estimated
stabilization(3) Avalon at Stratford 130 29.7 Q3 2013 Q3 2014 Q4 2014 Q2 2015 Stratford, CT Avalon Hayes Valley 182 90.2 Q3 2013 Q1 2015 Q2 2015 Q4 2015 San Francisco, CA Avalon Willoughby Square/AVA DoBro 826 444.9 Q3 2013 Q3 2015 Q4 2016 Q2 2017 Brooklyn, NY Avalon Baker Ranch 430 132.9 Q4 2013 Q1 2015 Q1 2016 Q3 2016 Lake Forest, CA Avalon Vista 221 58.3 Q4 2013 Q2 2015 Q4 2015 Q2 2016 Vista, CA Avalon Bloomfield Station 224 53.4 Q4 2013 Q3 2015 Q1 2016 Q3 2016 Bloomfield, NJ Avalon Glendora 256 75.1 Q4 2013 Q3 2015 Q1 2016 Q3 2016 Glendora, CA Total 8,708 $ 2,802.9 (1)Projected total capitalized cost includes all capitalized costs projected to be or actually incurred to develop the respective Development Community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees. Total capitalized cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount.(2)Future initial occupancy dates are estimates. There can be no assurance that we will pursue to completion any or all of these proposed developments.(3)Stabilized operations is defined as the earlier of (i) attainment of 95% or greater physical occupancy or (ii) the one-year anniversary of completion of development.(4)This Development Community is owned subject to a leasehold interest.(5)Avalon North Arlington and Avalon Berkeley were formerly Archstone branded developments.(6)The Company has a 20% ownership interest in this community through the AC JV.Redevelopment Communities2013,2016, there were threefour communities under redevelopment. We expect the total capitalized cost to redevelop these communities to be $36,800,000,$80,700,000, excluding costs incurred prior to redevelopment. We have found that the cost to redevelop an existing apartment community is more difficult to budget and estimate than the cost to develop a new community. Accordingly, we expect that actual costs may vary from our budget by a wider range than for a new development community. We cannot assure you that we will meet our schedule for reconstruction completion or for attaining restabilized operations, or that we will meet our budgeted costs, either individually or in the aggregate. We anticipate maintaining or increasing our current level of redevelopment activity related to communities in our current operating portfolio. You should carefully review Item 1a., "Risk Factors,"1A. “Risk Factors” for a discussion of the risks associated with redevelopment activity.Communities.Communities: 1.
Arlington, VA 842 $ 32.8 Q4 2014 Q3 2017 Q1 2018 2. 450 28.3 Q1 2016 Q2 2017 Q4 2017 3. 211 13.5 Q2 2016 Q1 2017 Q3 2017 4. 168 6.1 Q3 2016 Q1 2017 Q3 2017 Total 1,671 $ 80.7 (1) Projected total capitalized cost does not include capitalized costs incurred prior to redevelopment. (2) Restabilized operations is defined as the earlier of (i) attainment of 95% or greater physical occupancy or (ii) the one-year anniversary of completion of redevelopment. Number of
apartment
homes Projected total
capitalized cost(1)
($ millions) Reconstruction
start Estimated
reconstruction
completion Estimated
restabilized
operations(2)1. AVA Burbank 748 $ 19.3 Q4 2012 Q4 2014 Q1 2015 Burbank, CA 2. AVA Pasadena 84 5.6 Q2 2013 Q3 2014 Q1 2015 Pasadena, CA 3. Eaves Creekside 294 11.9 Q3 2013 Q4 2014 Q2 2015 Mountain View, CA Total(3)(4) 1,126 $ 36.8 (1)Projected total capitalized cost does not include capitalized costs incurred prior to redevelopment.(2)Restabilized operations is defined as the earlier of (i) attainment of 95% or greater physical occupancy or (ii) the one-year anniversary of completion of redevelopment.(3)We commenced the redevelopment of AVA Back Bay in Boston, MA during the first quarter of 2013 for an estimated total capitalized cost of $16.9 million. The redevelopment of this community is primarily focused on the exterior and/or common area and is not expected to have a material impact on community operations. This community is therefore included in the Established Community portfolio and not classified as a Redevelopment Community.(4)We assumed responsibility for the redevelopment of Marina Bay, comprised of 205 apartment homes and 229 boat slips, in conjunction with the Archstone Acquisition. Marina Bay, located in Marina del Rey, CA is owned by the U.S. Fund, in which we hold a 28.6% interest, and is being redeveloped for an estimated total capitalized cost of $32.9 million. All capital necessary for the redevelopment of Marina Bay was contributed to the venture prior to us acquiring an interest in the venture.2013,2016, we had $300,364,000$84,293,000 in acquisition and related capitalized costs for direct interests in land parcels we own, and $31,592,000$40,179,000 in capitalized costs (including legal fees, design fees and related overhead costs) related to Development Rights for which we control the land parcel, typically through ana conditional agreement or option to purchase or lease the land.land, as well as land associated with the building destroyed in the Edgewater (as defined below) casualty loss not considered a Development Right. Collectively, the land held for development and associated costs for deferred development rights relate to 4625 Development Rights for which we expect to develop new apartment communities in the future. The cumulative capitalized costs for land held for development as of December 31, 20132016 includes $244,619,000$63,082,000 in original land acquisition costs. The original land acquisition cost per home, after consideration of planned sales of associated outparcels and other real estate, ranged from $13,000$24,000 per home in MassachusettsWashington to $126,000$51,000 per home in California.Virginia. The Development Rights range from those beginning design and architectural planning to those that have completed site plans and drawings and can begin construction almost immediately. We estimate that the successful completion of all of these communities would ultimately add approximately 12,9868,487 apartment homes to our portfolio. Substantially all of these apartment homes will offer features like those offered by the communities we currently own.3118 Development Rights, we control the land through ana conditional agreement or option to purchase or lease the parcel. While we generally prefer to hold Development Rights through conditional agreements or options to acquire land, for the 15five remaining Development Rights we either currently own the land, have an ownership interest in a joint venture that owns the land or have executed a long term land lease for the parcel of land on which a community would be built if we proceeded with development.2013,2016, we incurred a charge of approximately $998,000$4,183,000 for development pursuits that were not yet probable of future development at the time incurred, or for pursuits that we determined would not likely be developed.Section 1a., "RiskItem 1A. “Risk Factors,"” for a discussion of the risks associated with Development Rights.thesethe Development Rights: Number
of rights Estimated
number
of homes Projected total
capitalized
cost
($ millions)(1) 6 2,033 $ 655 1 160 40 6 1,097 343 14 3,872 939 1 343 69 7 2,290 630 5 1,547 444 2 486 173 1 330 162 2 534 171 1 294 152 46 12,986 $ 3,778 (1)Projected total capitalized cost includes all projected capitalized costs incurred to date (if any) and projected to be incurred to develop the respective community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees.Market Number of rights New England 6 1,409 $ 481 Metro NY/NJ 9 4,065 1,396 Mid-Atlantic 2 723 217 Pacific Northwest 3 911 238 Northern California 4 904 458 Southern California 1 475 238 Total 25 8,487 $ 3,028 (1) Projected total capitalized cost includes all capitalized costs incurred to date (if any) and projected to be incurred to develop the respective community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees. 2013,2016 we acquired land parcels for 17eight Development Rights, as shown in the table below, for an aggregate purchase priceinvestment of approximately $278,642,000.$101,372,000. For 15all of the 17 parcels, construction has either started or willis expected to start within the next 12 months. Estimated
number of
apartment
homes Projected total
capitalized
cost(1)
($ millions) Date
acquired1 Avalon Baker Ranch 430 $ 132.9 March 2013 Lake Forest, CA 2 AVA 55 M 436 136.2 February 2013(2) Washington, DC 3 Avalon Huntington Beach 378 117.1 February 2013(2) Huntington Beach, CA 4 North Point II 341 147.0 February 2013(2) Cambridge, MA 5 Maple Leaf 103 28.0 February 2013(2) Cambridge, MA 6 Avalon Hillwood Square 384 111.2 June 2013 Falls Church, VA 7 Avalon Glendora 256 75.1 June/July/August 2013 Glendora, CA 8 Avalon Irvine III 156 54.1 April 2013 Irvine, CA 9 Avalon San Dimas 156 41.4 May 2013 San Dimas, CA 10 Avalon Wharton 248 55.6 April 2013 Wharton, NJ 11 Avalon Hayes Valley 182 90.2 August 2013 San Francisco, CA 12 Avalon Movietown 294 152.3 September 2013 West Hollywood, CA 13 Avalon Marlborough 350 76.6 October 2013 Marlborough, MA 14 Avalon Bloomfield 224 53.4 November 2013 Bloomfield, NJ 15 Avalon Roseland 136 46.2 December 2013 Roseland, NJ 16 AVA Capitol Hill 249 81.3 December 2013 Seattle, WA 17 Avalon Nashua Street 503 242.8 December 2013 Boston, MA Total 4,826 $ 1,641.4 (1)Projected total capitalized cost includes all capitalized costs incurred to date (if any) and projected to be incurred to develop the respective community, determined in accordance with GAAP, including land and related acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees.(2)We acquired these land parcels as part of the Archstone Acquisition. Maple Leaf is now owned by the AC JV and is being developed. North Point II is subject to a ROFO in favor of the AC JV. 1. 290 $ 64.0 March 2016 2. 350 91.2 April 2016 3. 275 146.9 April 2016 4. 152 45.1 June 2016 5. 285 139.6 November 2016 6. 248 70.4 December 2016 7. 323 89.6 December 2016 8. 360 89.9 December 2016 Total 2,283 $ 736.7 (1) Projected total capitalized cost includes all capitalized costs incurred to date (if any) and projected to be incurred to develop the respective community, determined in accordance with GAAP, including land and related acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, net of projected proceeds for any planned sales of associated outparcels and other real estate. approximately $29,839,000 that$46,958,000, which we do not currently plan to develop.develop, of which $20,846,000 was under contract to be sold as of December 31, 2016 and was disposed of in January 2017. These parcels consist of land that we (i) originally planned to develop and (ii)both ancillary parcels acquired in connection with Development Rights that we had not planned to develop.develop and land parcels we acquired for development and now intend to sell. During 2016, we recognized an aggregate impairment charge of $10,500,000 relating to three ancillary land parcels which we either sold during the year or intend to sell as of the date of this report. We believe that the current carrying value for all of theseother land parcels is such that there is no indication of impaired value, or further need to record a charge for impairment in the case of assets previously impaired. However, we may be subject to the recognition of further charges for impairment in the event that there are future indicators of such impairment and we determine that the carrying value of the assets is greater than the current fair value, less costs to dispose. (i) sell assets when they do not meet our long-term investment strategy or when capital and real estate markets allow us to realize a portion of the value created over the past business cycle and (ii)generally redeploy the proceeds from those sales to develop, redevelop and acquire communities. Pending such redeployment, we will generally use the proceeds from the sale of these communities to reduce amounts outstanding under our Credit Facility or retain the cash proceeds on our balance sheet until it is redeployed into acquisition, development or redevelopment activity. On occasion, we will set aside the proceeds from the sale of communities into a cash escrow account to facilitate a tax deferred, like-kind exchange transaction. From January 1, 20132016 to January 31, 2014,2017, we sold our interest in eightseven wholly-owned communities, four of which were acquired by the Company as part of the Archstone Acquisition, containing 3,2992,051 apartment homes. The aggregate gross sales price for these assets was $932,800,000.carrymaintain commercial general liability insurance and property insurance with respect to all of our communities. These policies, andalong with other insurance policies we carry,maintain, have policy specifications, insured and self-insured limits, exclusions and deductibles that we consider commercially reasonable. There are, however, certain types of losses (such as losses arising from nuclear liability or acts of war) that are not insured, in full or in part, because they are either uninsurable or the cost of insurance makes it, in management'smanagement’s view, economically impractical. You should carefully review the discussion under Item 1a., "Risk Factors,"1A. “Risk Factors” of this Form 10-K for a discussion of risks associated with an uninsured property or liability loss.and the Hayward Fault.Fault or other geological faults that are known or unknown. We cannot assure you that an earthquake would not cause damage or losses greater than our current insured levels. We have in placeprocure property damage and resulting business interruption insurance coverage with respect to communities located in California and Washington,limits of $175,000,000 for any single occurrence and in the annual aggregate for losses resulting from earthquakes. However for communities located in California or Washington, the limit is $150,000,000 of coverage, an increase over the $75,000,000 of coverage under our prior insurance policy. Earthquake coverage outside of California and Washington is subject to a $175,000,000 limit for eachany single occurrence and in the aggregate. Inannual aggregate for losses resulting from earthquakes. The deductible applicable to losses resulting from earthquakes occurring in California the deductible for each occurrence is five percent of the insured value of each damaged building. building subject to a minimum of $100,000 and a maximum of $25,000,000 per loss.earthquakecommunities are insured for property damage and business interruption losses through a combination of community specific insurance outsidepolicies and/or coverage provided under a master property insurance policy covering the majority of Californiaour communities. The master policy provides a $400,000,000 limit for any single occurrence, subject to certain sublimits and exclusions. Under the master policy we are subject to a $100,000 deductible per occurrence, except thatas well as additional self-insured retention for the next $350,000 of loss, per occurrence, outside California will be treated as an additional self-insured retention until the totalaggregate incurred self-insured retention exceeds $1,500,000. In May 2013, we renewed$1,500,000 for the policy year.with no material changeon a per occurrence basis, in coverage terms other thanexcess of any applicable deductibles up to the increase in our earthquake coverage discussed above. In August 2013, we renewed our general liability and workers compensation insurance policies with no material change in coverage.December 2007, Congress passedJanuary 2015, the President signed the Terrorism Risk Insurance Program Reauthorization Act ("TRIPRA"(“TRIPRA”) which extended a program that is designed toprogram until it expires in December 2014. Congress is currently considering extending the act, however there can be no assurance atprogram. Certain communities are insured for terrorism related losses through this time that Congress will extend the provisions of the act. In connection with this legislation, wefederal program. We have also purchased private-market insurance for property damage due to terrorism up to $250,000,000. Additionally, we have purchased insurance forwith limits of $600,000,000 per occurrence and in the annual aggregate that includes certain terrorist acts, notcoverages (not covered under TRIPRA,TRIPRA) such as domestic-based terrorism. This insurance, often referred to as "non-certified"“non-certified” terrorism insurance, is subject to deductibles, limits and exclusions. Our general liability policy provides terrorism coverage through TRIPRA coverage (subject to deductibles and insured limits) for liability to third parties that result from terrorist acts at our communities.growth.growth or other environmental contamination. Mold growth may occur when excessive moisture accumulates in buildings or on building materials, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. If a significant mold problem arises at one of our communities, we could be required to undertake a costly remediation program to contain or remove the mold from the affected community and could be exposed to other liabilities. For further discussion of the risks and the Company'sour related prevention and remediation activities, please refer to the discussion under Item 1a., "Risk Factors—1A. “Risk Factors - We may incur costs due to environmental contamination or non-compliance,"non-compliance” elsewhere in this report. We cannot provide assurance that we will have coverage under our existing policies for property damage or liability to third parties arising as a result of exposure to mold or a claim of exposure to mold at one of our communities.thatand limited cyber liability insurance. The crime policies protect the Company,us, up to $5,000,000$30,000,000 per occurrence (subject to sublimits and exclusions), from employee theft of money, securities or property.ourits business. While no assurances can be given, the Company does not currently believe that any of these other outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.20132016 and 2012,2015, as reported by the NYSE. On January 31, 20142017 there were 563484 holders of record of an aggregate of 129,417,333137,330,988 shares of our outstanding common stock. The number of holders does not include individuals or entities who beneficially own shares but whose shares are held of record by a broker or clearing agency, but does include each such broker or clearing agency as one record holder. 2013 2012 Sales Price Sales Price 2016 2015 Dividends
declared Dividends
declared Sales Price Sales Price High Low High Low High Low High Low $ 139.15 $ 124.02 $ 1.0700 $ 141.69 $ 123.71 $ 0.9700 $ 190.49 $ 160.66 $ 1.35 $ 181.69 $ 163.81 $ 1.25 $ 141.46 $ 127.97 $ 1.0700 $ 148.54 $ 134.51 $ 0.9700 $ 192.29 $ 166.59 $ 1.35 $ 176.43 $ 158.72 $ 1.25 $ 141.04 $ 122.36 $ 1.0700 $ 151.11 $ 134.03 $ 0.9700 $ 188.00 $ 168.57 $ 1.35 $ 180.24 $ 158.97 $ 1.25 $ 134.25 $ 116.86 $ 1.0700 $ 139.70 $ 126.12 $ 0.9700 $ 177.77 $ 158.32 $ 1.35 $ 186.89 $ 168.83 $ 1.25 January 2014,February 2017, we announced that our Board of Directors declared a dividend on our common stock for the first quarter of 20142017 of $1.16$1.42 per share, an 8.4%a 5.2% increase over the previous quarterly dividend per share of $1.07.$1.35. The dividend will be payable on April 15, 201417, 2017 to all common stockholders of record as of March 31, 2014.Period October 1 - October 31, 2016 137 $ 165.63 — $ 200,000 November 1 - November 30, 2016 — $ — — $ 200,000 December 1 - December 31, 2016 102 $ 168.77 — $ 200,000 (1) Reflects shares surrendered to the Company in connection with exercise of stock options as payment of exercise price, as well as for taxes associated with the vesting of restricted share grants. (2) As disclosed in our Form 10-Q for the quarter ended March 31, 2008, represents amounts outstanding under the Company's $500,000,000 Stock Repurchase Program. There is no scheduled expiration date to this program. (a)
Total Number
of Shares
Purchased(1) (b)
Average
Price Paid
per Share (c)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (d)
Maximum Dollar
Amount that May Yet
be Purchased Under
the Plans or Programs
(in thousands)(2) — — — $ 200,000 — — — $ 200,000 3,560 $ 118.23 — $ 200,000 (1)Reflects shares surrendered to the Company in connection with exercise of stock options as payment of exercise price, as well as for taxes associated with the vesting of restricted share grants.(2)As disclosed in our Form 10-Q for the quarter ended March 31, 2008, represents amounts outstanding under the Company's $500,000,000 Stock Repurchase Program. There is no scheduled expiration date to this program."SecurityItem 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters"Matters” in this Form 10-K.information)data). For the year ended 12-31-13 12-31-12 12-31-11 12-31-10 12-31-09 $ 1,451,419 $ 990,370 $ 890,431 $ 800,689 $ 755,479 11,502 10,257 9,656 7,354 7,328 1,462,921 1,000,627 900,087 808,043 762,807 352,245 259,350 246,872 235,168 224,068 158,774 97,555 88,964 84,319 74,759 172,402 136,920 167,814 169,997 145,090 51,000 — — — — 14,921 1,179 1,940 — 25,910 560,215 243,680 226,728 208,662 185,135 39,573 34,101 29,371 26,846 28,748 45,050 11,350 2,967 2,741 5,842 — 1,449 14,052 — 21,152 1,394,180 785,584 778,708 727,733 710,704 (11,154 ) 20,914 5,120 762 1,441 240 280 13,716 — 4,830 — 14,194 — — — 57,827 250,431 140,215 81,072 58,374 16,713 26,820 20,065 18,933 32,013 278,231 146,311 281,090 74,074 63,887 294,944 173,131 301,155 93,007 95,900 352,771 423,562 441,370 174,079 154,274 370 307 252 1,252 1,373 353,141 423,869 441,622 175,331 155,647 $ 353,141 $ 423,869 $ 441,622 $ 175,331 $ 155,647 $ 0.46 $ 2.57 $ 1.55 $ 0.97 $ 0.73 2.32 1.77 3.34 1.11 1.21 $ 2.78 $ 4.34 $ 4.89 $ 2.08 $ 1.94 126,855,754 $ 97,416,401 $ 89,922,465 $ 83,859,936 $ 79,951,348 $ 0.46 $ 2.55 $ 1.55 $ 0.97 $ 0.74 2.32 1.77 3.32 1.10 1.19 $ 2.78 $ 4.32 $ 4.87 $ 2.07 $ 1.93 127,265,903 $ 98,025,152 $ 90,777,462 $ 84,632,869 $ 80,599,657 $ 4.28 $ 3.88 $ 3.57 $ 3.57 $ 3.57 (1)Amounts do not include unvested restricted shares included in the calculation of Earnings per Share. Please refer to Note 1, "Organization and Basis of Presentation—Earnings per Common Share" of the Consolidated Financial Statements set forth in Item 8 of this report for a discussion of the calculation of Earnings per Share. For the year ended 12/31/16 12/31/15 12/31/14 12/31/13 12/31/12 Operating data: Total revenue $ 2,045,255 $ 1,856,028 $ 1,685,061 $ 1,462,921 $ 1,000,627 Gain on sale of real estate $ 384,847 $ 125,272 $ 85,415 $ 240 $ 280 Income from continuing operations $ 1,033,708 $ 741,733 $ 659,148 $ 57,827 $ 250,431 Total discontinued operations $ — $ — $ 38,179 $ 294,944 $ 173,131 Net income $ 1,033,708 $ 741,733 $ 697,327 $ 352,771 $ 423,562 Net income attributable to common stockholders $ 1,034,002 $ 742,038 $ 683,567 $ 353,141 $ 423,869 Per Common Share and Share Information: Earnings per common share—basic: Income from continuing operations attributable to common stockholders (net of dividends attributable to preferred stock) $ 7.53 $ 5.54 $ 4.93 $ 0.46 $ 2.57 Discontinued operations attributable to common stockholders — — 0.29 2.32 1.77 Net income attributable to common stockholders $ 7.53 $ 5.54 $ 5.22 $ 2.78 $ 4.34 Weighted average shares outstanding—basic (1) 136,928,251 133,565,711 130,586,718 126,855,754 97,416,401 Earnings per common share—diluted: Income from continuing operations attributable to common stockholders (net of dividends attributable to preferred stock) $ 7.52 $ 5.51 $ 4.92 $ 0.46 $ 2.55 Discontinued operations attributable to common stockholders — — 0.29 2.32 1.77 Net income attributable to common stockholders $ 7.52 $ 5.51 $ 5.21 $ 2.78 $ 4.32 Weighted average shares outstanding—diluted 137,461,637 134,593,177 131,237,502 127,265,903 98,025,152 Cash dividends declared $ 5.40 $ 5.00 $ 4.64 $ 4.28 $ 3.88 Other Information: Net income attributable to common stockholders $ 1,034,002 $ 742,038 $ 683,567 $ 353,141 $ 423,869 Depreciation—continuing operations 531,434 477,923 442,682 560,215 243,680 Depreciation—discontinued operations — — — 13,500 16,414 Interest expense, net—continuing operations (2) 194,585 148,879 181,030 238,323 138,099 Interest expense, net—discontinued operations (2) — — — — 735 Income tax expense 305 1,483 9,368 — — EBITDA (3) $ 1,760,326 $ 1,370,323 $ 1,316,647 $ 1,165,179 $ 822,797 Funds from Operations (4) $ 1,135,762 $ 1,083,085 $ 951,035 $ 642,814 $ 521,047 Core Funds from Operations (4) $ 1,125,341 $ 1,016,035 $ 890,081 $ 792,888 $ 532,490 Number of Current Communities (5) 258 259 251 244 180 Number of apartment homes 74,538 75,584 73,963 72,811 52,792 Balance Sheet Information: Real estate, before accumulated depreciation $ 20,776,626 $ 19,268,099 $ 17,849,316 $ 16,800,321 $ 10,071,342 Total assets $ 17,867,271 $ 16,931,305 $ 16,140,578 $ 15,292,922 $ 11,128,662 Notes payable and unsecured credit facilities, net $ 7,030,880 $ 6,456,948 $ 6,489,707 $ 6,110,083 $ 3,819,617 Cash Flow Information: Net cash flows provided by operating activities $ 1,143,484 $ 1,056,754 $ 886,641 $ 724,315 $ 540,819 Net cash flows used in investing activities $ (1,037,352 ) $ (1,199,517 ) $ (816,760 ) $ (1,181,174 ) $ (623,386 ) Net cash flows (used in) provided by financing activities $ (291,645 ) $ 33,810 $ 158,224 $ (1,995,404 ) $ 2,199,332 For the year ended 12-31-13 12-31-12 12-31-11 12-31-10 12-31-09 $ 353,141 $ 423,869 $ 441,622 $ 175,331 $ 155,647 560,215 243,680 226,728 208,662 185,135 13,500 16,414 23,541 24,280 33,151 238,323 138,099 169,754 169,997 171,000 — 735 8,688 5,212 5,914 $ 1,165,179 $ 822,797 $ 870,333 $ 583,482 $ 550,847 $ 642,814 $ 521,047 $ 414,482 $ 338,353 $ 315,841 244 180 181 172 165 72,811 52,792 53,294 51,245 47,926 $ 16,800,321 $ 10,049,484 $ 9,288,496 $ 8,661,211 $ 8,360,091 $ 15,328,143 $ 11,160,078 $ 8,482,390 $ 7,821,488 $ 7,457,605 $ 6,145,391 $ 3,851,033 $ 3,632,296 $ 4,067,657 $ 3,974,872 $ 724,501 $ 540,819 $ 429,354 $ 332,106 $ 376,581 $ (1,181,174 ) $ (623,386 ) $ (443,141 ) $ (298,936 ) $ (333,559 ) $ (1,995,404 ) $ 2,199,332 $ 326,233 $ 167,565 $ (4,285 ) Notes to Selected Financial Data(1)Interest expense, net includes any loss or gain incurred from the extinguishment of debt.(2)(1) Amounts do not include unvested restricted shares included in the calculation of Earnings per Share. Please refer to Note 1, “Organization, Basis of Presentation and Significant Accounting Policies—Earnings per Common Share,” of the Consolidated Financial Statements set forth in Item 8 of this report for a discussion of the calculation of Earnings per Share. (2) Interest expense, net includes any gain or loss incurred from the extinguishment of debt. (3) EBITDA is defined as net income before interest income and expense, income taxes, depreciation and amortization from both continuing and discontinued operations. Under this definition, EBITDA includes gains on sale of assets and gain on sale of partnership interests. Management generally considers EBITDA to be an appropriate supplemental measure to net income of our operating performance because it helps investors to understand our ability to incur and service debt and to make capital expenditures. EBITDA should not be considered as an alternative to net income (as determined in accordance with GAAP), as an indicator of our operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity. Our calculation of EBITDA may not be comparable to EBITDA as calculated by other companies.(3)We generally consider Funds from Operations, or "FFO," as defined below, to be an appropriate supplemental measure to net income of our operating performance because it helps investors to understand our ability to incur and service debt and to make capital expenditures. EBITDA should not be considered as an alternative to net income (as determined in accordance with GAAP), as an indicator of our operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity. Our calculation of EBITDA may not be comparable to EBITDA as calculated by other companies.(4) Refer to “Reconciliation of Non-GAAP Financial Measures” below. (5) Current Communities consist of all communities other than those which are still under construction and for which a certificate or certificates of occupancy for the entire community have not been received. performance because, by excludingperformance. In calculating FFO, we exclude gains or losses related to dispositions of previously depreciated property and excludingexclude real estate depreciation, which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates,estimates. FFO can help one compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of our core business operations, Core FFO allows one to compare the core operating performance of the Company year over year. We believe that in order to understand our operating results, FFO and Core FFO should be examined with net income as presented in the Consolidated Statements of Comprehensive Income included elsewhere in this report.("NAREIT"(“NAREIT”), we calculate FFO as net income or loss attributable to common stockholders computed in accordance with GAAP, adjusted for:••extraordinary gains or losses (as defined by GAAP);•••••TableContentsdoesand Core FFO do not represent net income in accordance with GAAP, and therefore it should not be considered an alternative to net income, which remains the primary measure, as an indication of our performance. In addition, FFO and Core FFO as calculated by other REITs may not be comparable to our calculationcalculations of FFO and Core FFO.doesdo not represent cash generated from operating activities in accordance with GAAP, and therefore should not be considered an alternative to net cash flows from operating activities, as determined by GAAP, as a measure of liquidity. Additionally, it is not necessarily indicative of cash available to fund cash needs. A presentation of GAAP based cash flow metrics is provided in "Cash“Cash Flow Information"Information” in the table on the previous page. For the year ended 12-31-13 12-31-12 12-31-11 12-31-10 12-31-09 $ 353,141 $ 423,869 $ 441,622 $ 175,331 $ 155,647 582,325 265,627 256,986 237,041 221,415 32 28 27 55 66 (14,453 ) (7,972 ) (3,063 ) — — — — — — 2,600 (278,231 ) (146,311 ) (281,090 ) (74,074 ) (63,887 ) — (14,194 ) — — — $ 642,814 $ 521,047 $ 414,482 $ 338,353 $ 315,841 127,265,903 98,025,152 90,777,462 84,632,869 80,599,657 $ 5.05 $ 5.32 $ 4.57 $ 4.00 $ 3.92 For the year ended 12/31/16 12/31/15 12/31/14 12/31/13 12/31/12 Net income attributable to common stockholders $ 1,034,002 $ 742,038 $ 683,567 $ 353,141 $ 423,869 Depreciation—real estate assets, including discontinued operations and joint venture adjustments 538,606 486,019 449,769 582,325 265,627 Distributions to noncontrolling interests, including discontinued operations 41 38 35 32 28 Gain on sale of unconsolidated entities holding previously depreciated real estate assets (58,069 ) (33,580 ) (73,674 ) (14,453 ) (7,972 ) Gain on sale of previously depreciated real estate assets (1) (374,623 ) (115,625 ) (108,662 ) (278,231 ) (146,311 ) Gain on acquisition of unconsolidated real estate entity — — — — (14,194 ) Casualty and impairment (recovery) loss, net on real estate (2) (6) (4,195 ) 4,195 — — — FFO attributable to common stockholders $ 1,135,762 $ 1,083,085 $ 951,035 $ 642,814 $ 521,047 Adjusting items: Joint venture losses (gains) (3) 6,031 (9,059 ) (5,194 ) 35,554 (940 ) Impairment loss on real estate (4) (6) 10,500 800 — — — Casualty (gain) loss, net on real estate (5) (6) (10,239 ) (15,538 ) — — 3,321 Business interruption insurance proceeds (7) (20,565 ) (1,509 ) (2,494 ) (299 ) — Lost NOI from casualty losses covered by business interruption insurance (8) 7,366 7,862 — — — Loss (gain) on extinguishment of consolidated debt 7,075 (26,736 ) 412 14,921 2,070 Acquisition costs (9) 3,523 3,806 (7,682 ) 44,052 9,965 Severance related costs 852 1,999 815 3,580 587 Development pursuit and other write-offs 3,662 1,838 2,564 1,506 — Joint venture promote (10) (7,985 ) (21,969 ) (58,128 ) — (4,055 ) Gain on sale of other real estate (10,224 ) (9,647 ) (490 ) (240 ) (280 ) Legal settlements (417 ) — — — 775 Income taxes (11) — 1,103 9,243 — — Loss on interest rate protection agreement — — — 51,000 — Core FFO attributable to common stockholders $ 1,125,341 $ 1,016,035 $ 890,081 $ 792,888 $ 532,490 Weighted average common shares outstanding - diluted 137,461,637 134,593,177 131,237,502 127,265,903 98,025,152 EPS per common share - diluted $ 7.52 $ 5.51 $ 5.21 $ 2.78 $ 4.32 FFO per common share - diluted $ 8.26 $ 8.05 $ 7.25 $ 5.05 $ 5.32 Core FFO per common share - diluted $ 8.19 $ 7.55 $ 6.78 $ 6.23 $ 5.43 (4)Current Communities consist of all communities other than those which are still under construction and have not received a certificate of occupancy.(1) Amount for 2014 excludes a gain of $14,132, representing our joint venture partners' portion of the gain on sale from a Fund I community which we consolidated for financial reporting purposes. (2) During 2015, we recognized an impairment on depreciable real estate of $4,195 from the severe winter storms that occurred in our Northeast markets. During 2016, we received insurance proceeds, net of additional costs incurred, of $5,732 related to the winter storms, and recognized $4,195 of this recovery as an offset to the loss recognized in the prior year period. The balance of the net insurance proceeds received in 2016 of $1,537 is recognized as a casualty gain and is included in the reconciliation of FFO to Core FFO. (3) Amount for 2016 is primarily composed of our proportionate share of yield maintenance charges incurred for the early repayment of debt associated with joint venture disposition activity and the write-off of asset management fee intangibles primarily associated with the disposition of communities in the U.S. Fund. Amounts for 2014 and 2015 are primarily composed of the Company's proportionate share Table (4) Amounts include impairment charges relating to ancillary land parcels. (5) Amount for 2016 includes $8,702 in property damage insurance proceeds for the Edgewater casualty loss, and $1,537 in insurance proceeds in excess of the total recognized loss related to severe winter storms in our Northeast markets that occurred in 2015. Amount for 2015 includes $44,142 of Edgewater insurance proceeds received partially offset by $28,604 for the write-off of real estate and related costs. Amount for 2012 includes losses incurred related to Superstorm Sandy, and the write-off of certain costs related to a commercial tenant. (6) The aggregate impact of (i) casualty and impairment (recovery) loss, net on real estate, (ii) impairment loss on real estate and (iii) casualty (gain) loss, net on real estate for 2016 and 2015 are gains of $3,935 and $10,542, respectively. (7) Amount for 2016 is primarily composed of business interruption insurance proceeds resulting from the final insurance settlement of the Edgewater casualty loss. (8) Amounts relate to lost NOI resulting from the Edgewater casualty loss, for which we received $20,306 in business interruption insurance proceeds in the first quarter of 2016. (9) Amount for 2014 is primarily composed of receipts related to communities acquired as part of the Archstone Acquisition for periods prior to the Company’s ownership, which are primarily comprised of property tax and mortgage insurance refunds. Amounts for 2012 and 2013 primarily consist of costs related to the Archstone Acquisition. (10) Amount for 2016 is for the recognition of our promoted interest in Fund II. Amount for 2015 is primarily composed of amounts received related to the modification of the joint venture agreement for the entity that owns Avalon at Mission Bay II to eliminate our promoted interest in future distributions. Amount for 2014 relates to our promoted interests from the sale of Avalon Chrystie Place, and the amount for 2012 relates to our promoted interests from the acquisition of our joint venture partner's interest in Avalon Del Rey. (11) Amounts for 2015 and 2014 are composed of income taxes on income that was earned in taxable REIT subsidiaries and that is not considered to be a component of primary operations. ("(“MD&A"&A”) is intended to help provide an understanding of our business, financial condition and results of operations. This MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in this report. This report, including the following MD&A, contains forward-looking statements regarding future events or trends that should be read in conjunction with the factors described under "Forward-Looking Statements"“Forward-Looking Statements” included in this report. Actual results or developments could differ materially from those projected in such statements as a result of the factors described under "Forward-Looking Statements"“Forward-Looking Statements” as well as the risk factors described in Item 1a, "Risk Factors,"1A. “Risk Factors” of this report.are primarily engaged in developing, acquiring, owningdevelop, redevelop, acquire, own and operatingoperate multifamily apartment communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California. We focus on leading metropolitan areas that we believe are characterized by growing employment in high barrier to entry marketswage sectors of the United States.economy, lower housing affordability and a diverse and vibrant quality of life. We believe thatthese market characteristics offer the opportunity for superior risk-adjusted returns on apartment communities are an attractive long-term investment opportunity comparedcommunity investments relative to other real estate investments, because a broad potential resident base should help reduce demand volatility over a real estate cycle.markets that do not have these characteristics. We seek to create long-term shareholder value by accessing capital on cost effective terms; deploying that capital to develop, redevelop and acquire apartment communities in high barrier to entryour selected markets; operating apartment communities; and selling communities when they no longer meet our long-term investment strategy or when pricing is attractive. Barriers to entry in our markets generally include a difficult and lengthy entitlement process with local jurisdictions and dense urban or suburban areas where zoned and entitled land is in limited supply.strategystrategic vision is to be leadersthe leading apartment company in select US markets, providing a range of distinctive living experiences that customers value. We pursue this vision by targeting what we believe are among the best markets and submarkets, leveraging our strategic capabilities in market research and consumer insight and being disciplined in our capital allocation delivering a range of multifamily offerings tailored to serve the needs of the most attractive customer segments in the best-performing submarkets of the United States.and balance sheet management. Our communities are predominately upscale and generally command among the highest rents in their markets. However, we also pursue the ownership and operation of apartment communities that target a variety of customer segments and price points, consistent with our goal of offering a broad range of products and services.markets, which are primarily located in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and the Northern and Southern California regions of the United States.2013,2016, net income attributable to common stockholders was $353,141,000 compared to $423,869,000 for 2012, a decrease of 16.7%. The decrease is attributable primarily to$1,034,002,000, an increase in depreciation expense and expensed transaction costs associated withof $291,964,000, or 39.3%, over the Archstone Acquisition, coupled with the recognition of a loss associated with an interest rate protection agreement.prior year. The decrease was partially offset byincrease is primarily attributable to an increase in NOI from our communities.2013,2016, Established Communities NOI increased by $26,147,000,$49,606,000, or 4.7%4.8%, over the prior year. The increase was driven by an increase in rental revenue of 4.3%, partially offset by an increase in operating expenses of 3.5%3.1% over 2012.2015. On February 27, 2013, pursuant to the Purchase Agreement dated November 26, 2012, by and among us, Equity Residential, Lehman, and Archstone, we, together with Equity Residential, acquired, directly or indirectly, all of Archstone's assets, including all of the ownership interests in joint ventures and other entities owned by Archstone, and assumed Archstone's liabilities, with certain limited exceptions. Under the terms of the Purchase Agreement, we acquired approximately 40% of Archstone's assets and liabilities and Equity Residential acquired approximately 60% of Archstone's assets and liabilities. We acquired the following:•54 operating apartment communities that were consolidated for financial reporting purposes, containing 18,423 apartment homes, of which four communities containing 1,368 apartment homes were subsequently disposed of during 2013;•six communities that were under construction and/or in lease-up, of which two have been completed with 553 homes and the other four of which are expected to be completed during 2014 and contain 1,114 apartment homes;•six parcels of land, one of which we sold to the AC JV, which is currently being developed;•options to acquire two additional parcels of land, of which one was acquired in 2013 and will begin construction in 2014;•interests in unconsolidated joint ventures in which we are the general partner or managing member, which joint ventures own 11 apartment communities containing 2,544 apartment homes, and an interest in an unconsolidated joint venture in which we are a limited partner, which joint venture owns one apartment community containing 305 apartment homes; and•a 40% ownership interest in unconsolidated joint venture arrangements with Equity Residential which will hold assets and liabilities that we and Equity Residential will jointly manage, and that we and Equity Residential intend to sell to or resolve with third parties, and/or subsequently transfer to Equity Residential or to us. In 2013, our capital activity related to funding the Archstone Acquisition as well as our core business activities in our development and redevelopment platforms. Our funding for the Archstone Acquisition included the assumption of approximately $2 billion in net indebtedness, as well as the issuance to Lehman of 14,889,706 shares of our common stock. In addition to this activity, during 2013$1,682,800,000$1,668,474,000 of gross capital through the issuance of unsecured notes and asset sales.the sale of real estate, exclusive of proceeds from the disposition of joint ventures and secured debt assumed in conjunction with acquisitions. The funds raised from dispositionsthe sale of real estate consist of the proceeds from the sale of eightseven operating communities, for gross sales proceeds of $932,800,000. In addition, in February 2014 we sold one community, Avalon Valley, located in Danbury, CT, for $53,325,000.land parcel and ancillary real estate. We believe that our current capital structure will continue to provide financial flexibility to access capital on attractive terms.We increased development activity during 2013 from the prior year in anticipation of favorable economic conditions and apartment fundamentals. During 2013,2016, we completed the developmentconstruction of 12eight communities containing an aggregate of 1,715 apartment homes for an aggregate total capitalized cost of $630,000,000.$510,800,000. We also started the developmentconstruction of 13nine communities containing an aggregate of 2,732 apartment homes, which are expected to be completed for an estimated total capitalized cost of $1,323,000,000.$1,588,600,000, including our share of the total capitalized cost for one community being developed within a joint venture in which we own a 55.0% interest. In addition, during 20132016 we completed the redevelopment of six10 communities containing an aggregate of 2,739 apartment homes for a total investment of $52,700,000,$115,900,000, excluding costs incurred prior to the redevelopment. �� In addition to the Archstone Acquisition, during the year ended December 31, 2013, we acquired Arboretum at Burlington, located in Burlington MA. Arboretum at Burlington contains 312 apartment homes and was acquired for a purchase price of $79,850,000. We established Fund I and Fund II (collectively the "Funds") to engage in real estate acquisition programs through discretionary investment funds. We believe this investment format provides the following attributes: (i) third-party joint venture equity as an additional source of financing to expand and diversify our portfolio; (ii) additional sources of income in the form of property management and asset management fees and, potentially, incentive distributions if the performance of the Funds exceeds certain thresholds; and (iii) additional visibility into the transactions occurring in multi-family assets that helps us with other investment decisions related to our wholly-owned portfolio. Fund I has nine institutional investors, including us. One of our wholly-owned subsidiaries is the general partner of Fund I and, excluding costs incurred in excess of our equity in the underlying net assets of Fund I, we have an equity investment of approximately $14,209,000 in Fund I (net of distributions and excluding the purchase by us of a mortgage note secured by a Fund I community), representing a 15.2% combined general partner and limited partner equity interest. Fund I was our principal vehicle for acquiring apartment communities from its formation in March 2005 through the close of its investment period in March 2008. Fund I has a term that expires in March 2015. During the year ended December 31, 2013, Fund I sold seven communities:•Avalon Yerba Buena, a 160 apartment home community with 32,300 square feet of retail located in San Francisco, CA, for $103,000,000;•Avalon at Civic Center, a 192 apartment home community located in Norwalk, CA, for $45,844,000;•Avalon at Cedar Place, a 156 apartment home community located in Columbia, MD, for $26,000,000;•Avalon Sunset, a 82 apartment home community located in Los Angeles, CA for $25,800,000;•Crystal Hill, a 169 apartment home community located in Pomona, NY for $33,050,000;•Centerpoint, a 392 apartment home community located in Baltimore, MD for $75,250,000; and•Middlesex Crossing, a 252 apartment home community located in Billerica, MA, for $40,250,000. Our proportionate share of the gain from the sale of these communities was $11,484,000. Fund II has six institutional investors, including us. One of our wholly owned subsidiaries is the general partner of Fund II and, excluding costs incurred in excess of our equity in the underlying net assets of Fund II, we have made an equity investment of $93,714,000 (net of distributions), representing a 31.3% combined general partner and limited partner equity interest. Fund II served as the exclusive vehicle through which we acquired investment interests in apartment communities from its formation in 2008 through the close of its investment period in August 2011. Fund II has a term that expires in August 2020, assuming the exercise of two one-year extension options. During the year ended December 31, 2013, Fund II sold Avalon Rothbury, located in Gaithersburg, MD, for $39,600,000. The Company's proportionate share of the gain in accordance with GAAP for the disposition was $2,790,000. In 2013, in conjunction with the Archstone Acquisition, we acquired an interest in one additional discretionary real estate management investment fund. The U.S. Fund has six institutional investors,including us. Through subsidiaries, we own the general partner of the U.S. Fund and, excluding costs incurred in excess of our equity in the underlying net assets of the U.S. Fund, we have made an equity investment of $93,685,000 (net of distributions), representing a 28.6% combined general partner and limited partner equity interest. The U.S. Fund has a term that expires in July 2023, assuming the exercise of two one-year extension options.2013,2016 we owned or held a direct or indirect ownership interest in 273285 apartment communities containing 81,51983,667 apartment homes in 1210 states and the District of Columbia, of which 2927 communities were under constructiondevelopment and threefour communities were under reconstruction.redevelopment. Of these communities, 3616 were owned by entities that were not consolidated for financial reporting purposes, including four owned by subsidiaries of Fund I, 12three owned by subsidiaries of Fund II, and nineseven owned by the U.S. Fund.Fund, three owned by the AC JV and one that is being developed within a joint venture. In addition, we ownedheld a direct or indirect ownership interest in Development Rights to develop an additional 4625 wholly-owned communities that, if developed in the manneras expected, will contain an estimated 12,9868,487 apartment homes.current operating apartment communities,Current Communities, Development Communities and Development Rights. Our current operating communitiesCurrent Communities are further distinguished as Established Communities, Other Stabilized Communities, Lease-Up Communities, Redevelopment Communities and RedevelopmentUnconsolidated Communities.operatingconsolidated communities that are consolidated for financial reporting purposes and were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, which allows the performanceallowing for a meaningful comparison of these communities to be comparedoperating results between years. Other Stabilized Communities are generally all other completed consolidated operating communities that have stabilized occupancy and operating expenses during the current year, but had not achieved stabilization as of the beginning of the prior year. Lease-Up Communities consist ofare consolidated communities where construction ishas been complete but stabilizationfor less than one year and stabilized occupancy has not been achieved. Redevelopment Communities consist ofare consolidated communities where substantial redevelopment is in progress or is planned to begin during the current year. Unconsolidated Communities are communities that we have an indirect ownership interest in through our investment interest in an unconsolidated joint venture. A more detailed description of our reportable segments and other related operating information can be found in Note 9, "Segment8, “Segment Reporting,"” of our Consolidated Financial Statements."Results“Results of Operations"Operations” as part of our discussion of overall operating results. We evaluate our current and future cash needs and future operating potential based on acquisition, disposition, development, redevelopment and financing activities within Other Stabilized, Redevelopment and Development Communities. Discussions related to current and future cash needs and financing activities can be found in "Liquidityunder Liquidity and Capital Resources."2013, 20122016, 2015 and 20112014 follows (dollars in thousands):For the year ended 2016 vs. 2015 2015 vs. 2014 2013 2012 $ Change % Change 2012 2011 $ Change % Change 2016 2015 2014 $ Change % Change $ Change % Change $ 1,451,419 $ 990,370 $ 461,049 46.6 % $ 990,370 $ 890,431 $ 99,939 11.2 % $ 2,039,656 $ 1,846,081 $ 1,674,011 $ 193,575 10.5 % $ 172,070 10.3 % 11,502 10,257 1,245 12.1 % 10,257 9,656 601 6.2 % 5,599 9,947 11,050 (4,348 ) (43.7 )% (1,103 ) (10.0 )% 1,462,921 1,000,627 462,294 46.2 % 1,000,627 900,087 100,540 11.2 % 2,045,255 1,856,028 1,685,061 189,227 10.2 % 170,967 10.1 %
295,150 211,086 84,064 39.8 % 211,086 201,533 9,553 4.7 % 406,577 377,317 345,846 29,260 7.8 % 31,471 9.1 % 158,774 97,555 61,219 62.8 % 97,555 88,964 8,591 9.7 % 204,837 193,499 178,634 11,338 5.9 % 14,865 8.3 % 453,924 308,641 145,283 47.1 % 308,641 290,497 18,144 6.2 % 611,414 570,816 524,480 40,598 7.1 % 46,336 8.8 % 53,105 42,193 10,912 25.9 % 42,193 40,213 1,980 4.9 % 67,038 67,060 60,341 (22 ) — % 6,719 11.1 % 3,990 6,071 (2,081 ) (34.3 )% 6,071 5,126 945 18.4 % 4,822 4,370 4,485 452 10.3 % (115 ) (2.6 )% 45,050 11,350 33,700 296.9 % 11,350 2,967 8,383 282.5 % Expensed acquisition, development and other pursuit costs, net of recoveries 9,922 6,822 (3,717 ) 3,100 45.4 % 10,539 N/A (1) 172,402 136,920 35,482 25.9 % 136,920 167,814 (30,894 ) (18.4 )% 187,510 175,615 180,618 11,895 6.8 % (5,003 ) (2.8 )% 51,000 — 51,000 100.0 % — — — 0.0 % 14,921 1,179 13,742 1,165.6 % 1,179 1,940 (761 ) (39.2 )% Loss (gain) on extinguishment of debt, net 7,075 (26,736 ) 412 33,811 (126.5 )% (27,148 ) N/A (1) 560,215 243,680 316,535 129.9 % 243,680 226,728 16,952 7.5 % 531,434 477,923 442,682 53,511 11.2 % 35,241 8.0 % 39,573 34,101 5,472 16.0 % 34,101 29,371 4,730 16.1 % 45,771 42,774 41,425 2,997 7.0 % 1,349 3.3 % — 1,449 (1,449 ) (100.0 )% 1,449 14,052 (12,603 ) (89.7 )% (240 ) (280 ) 40 (14.3 )% (280 ) (13,716 ) 13,436 (98.0 )% — (14,194 ) 14,194 (100.0 )% (14,194 ) — 14,194 (100.0 )% Casualty and impairment (gain) loss, net (3,935 ) (10,542 ) — 6,607 (62.7 )% (10,542 ) 100.0 % 940,016 462,469 477,547 103.3 % 462,469 474,495 (12,026 ) (2.5 )% 849,637 737,286 726,246 112,351 15.2 % 11,040 1.5 % (11,154 ) 20,914 (32,068 ) (153.3 )% 20,914 5,120 15,794 308.5 % Equity in income of unconsolidated real estate entities 64,962 70,018 148,766 (5,056 ) (7.2 )% (78,748 ) (52.9 )% Gain on sale of communities 374,623 115,625 84,925 258,998 224.0 % 30,700 36.1 % Gain on sale of other real estate 10,224 9,647 490 577 6.0 % 9,157 1,868.8 % Income from continuing operations before taxes 1,034,013 743,216 668,516 290,797 39.1 % 74,700 11.2 % Income tax expense 305 1,483 9,368 (1,178 ) (79.4 )% (7,885 ) (84.2 )%
57,827
250,431
(192,604
)
(76.9
)%
250,431
140,215
110,216
78.6
%1,033,708 741,733 659,148 291,975 39.4 % 82,585 12.5 % 16,713 26,820 (10,107 ) (37.7 )% 26,820 20,065 6,755 33.7 % — — 310 — — % (310 ) (100.0 )% 278,231 146,311 131,920 90.2 % 146,311 281,090 (134,779 ) (47.9 )% Gain on sale of discontinued operations — — 37,869 — — % (37,869 ) (100.0 )% 294,944 173,131 121,813 70.4 % 173,131 301,155 (128,024 ) (42.5 )% — — 38,179 — — % (38,179 ) (100.0 )%
352,771
423,562
(70,791
)
(16.7
)%
423,562
441,370
(17,808
)
(4.0
)%1,033,708 741,733 697,327 291,975 39.4 % 44,406 6.4 % 370 307 63 20.5 % 307 252 55 21.8 % Net loss (income) attributable to noncontrolling interests 294 305 (13,760 ) (11 ) (3.6 )% 14,065 N/A (1) $ 353,141 $ 423,869 $ (70,728 ) (16.7 )% $ 423,869 $ 441,622 $ (17,753 ) (4.0 )% $ 1,034,002 $ 742,038 $ 683,567 $ 291,964 39.3 % $ 58,471 8.6 % (1) Percent change is not meaningful. decreased $70,728,000,increased $291,964,000, or 16.7%39.3%, to $353,141,000$1,034,002,000 in 20132016 primarily due primarily to an increase in depreciation expense and expensed transaction costs associated with the Archstone Acquisition, coupled with the recognition of a loss associated with an interest rate protection agreement. The decrease was partially offset by an increase in NOI from communities acquired in the Archstone Acquisition and our existing and newly developed, acquired and existing operating communities in 2013, as well asand an increase in real estate sales and related gains. These amounts were partially offset by increases in depreciation and interest expense, and a loss on extinguishment of debt in the current year coupled with a gain on saleextinguishment of communities as compared todebt in the prior year. Net income attributable to common stockholders decreased $17,753,000,increased $58,471,000, or 4.0%8.6%, to $742,038,000 in 2012 over 20112015 from 2014 primarily due primarily to an increase in NOI from newly developed and existing operating communities, and gains from net insurance recoveries and the extinguishment of debt, partially offset by a decrease in gain on saleequity in income of communities as compared to the prior year, offset partially by increased NOI in 2012 over 2011.unconsolidated real estate entities.Table of Contentseasyeasier comparison of the operating performance of individual assets or groups of assets. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impactsimpact to overhead as a result of acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. We define NOI as total property revenue less direct property operating expenses including(including property taxes.taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, investments and investment management expenses, expensed acquisition, development and other pursuit costs, net of recoveries, interest expense, net, loss (gain) on extinguishment of debt, net, general and administrative expense, equity in income of unconsolidated real estate entities, depreciation expense, corporate income tax expense, casualty and impairment (gain) loss, net, gain on sale of real estate assets, gain on sale of discontinued operations, income from discontinued operations and net operating income from real estate assets sold or held for sale, not classified as discontinued operations.GAAP. Therefore,GAAP, and NOI should not be considered an alternative to net income as an indication of our performance. NOI should also not be considered an alternative to net cash flow from operating activities, as determined by GAAP, as a measure of liquidity, nor is NOI indicative of cash available to fund cash needs. Reconciliations of NOI for the years ended December 31, 2013, 20122016, 2015 and 20112014 to net income for each year are as follows (dollars in thousands): For the year ended 12/31/16 12/31/15 12/31/14 Net income $ 1,033,708 $ 741,733 $ 697,327 Indirect operating expenses, net of corporate income 61,403 56,973 49,055 Investments and investment management expense 4,822 4,370 4,485 Expensed acquisition, development and other pursuit costs, net of recoveries 9,922 6,822 (3,717 ) Interest expense, net (1) 187,510 175,615 180,618 Loss (gain) on extinguishment of debt, net 7,075 (26,736 ) 412 General and administrative expense 45,771 42,774 41,425 Equity in income of unconsolidated real estate entities (64,962 ) (70,018 ) (148,766 ) Depreciation expense (1) 531,434 477,923 442,682 Income tax expense 305 1,483 9,368 Casualty and impairment (gain) loss, net (3,935 ) (10,542 ) — Gain on sale of real estate assets (384,847 ) (125,272 ) (85,415 ) Gain on sale of discontinued operations — — (37,869 ) Income from discontinued operations — — (310 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations (2) (17,509 ) (34,133 ) (49,708 ) Net operating income $ 1,410,697 $ 1,240,992 $ 1,099,587 (1) Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. (2) Represents NOI from real estate assets sold or held for sale as of December 31, 2016 that are not classified as discontinued operations. For the year ended 12-31-13 12-31-12 12-31-11 $ 352,771 $ 423,562 $ 441,370 41,554 31,911 30,550 3,990 6,071 5,126 45,050 11,350 2,967 172,402 136,920 167,814 51,000 — — 14,921 1,179 1,940 39,573 34,101 29,371 11,154 (20,914 ) (5,120 ) 560,215 243,680 226,728 — 1,449 14,052 (278,471 ) (146,591 ) (294,806 ) (16,713 ) (26,820 ) (20,065 ) — (14,194 ) — $ 997,446 $ 681,704 $ 599,927 20132016 and 2012,2015, as compared to the prior year, period, consist of changes in the following categories (dollars in thousands): Full Year
2013 Full Year
2012 $ 26,146 $ 35,412 254,488 17,395 35,108 28,970 $ 315,742 $ 81,777 Full Year 2016 2015 Established Communities $ 49,606 $ 52,763 Other Stabilized Communities (1) 59,022 28,199 Development and Redevelopment Communities 61,077 60,443 Total $ 169,705 $ 141,405 (1) NOI for the year ended December 31, 2016 includes $20,306 in business interruption insurance proceeds related to the Edgewater casualty loss. 20132016 and 2015 is due to increased rental rates, and increased occupancy, partially offset by decreased economic occupancy and increased operating expenses. During 2013, we experienced increases in rental rates over 2012, while maintaining occupancy of at least 95% in all markets, offset partially by an increase in operating expenses.20132016 and 2012 as2015 compared to the prior years due to additional rental income generated from newly developed, acquired and acquiredexisting operating communities including those acquired in the Archstone Acquisition in 2013, and increasesan increase in rental rates and occupancy at our Established Communities. The increase for 2016 is also due to business interruption insurance proceeds received due to the final settlement of the Edgewater casualty loss. Overall Portfolio—57,24067,849 apartment homes for 2013, which includes the impact of communities acquired in the Archstone Acquisition,2016, as compared to 43,41164,211 homes for 20122015 and 42,61361,686 homes for 2011. The increase in 2013 over 2012 is due to homes available from newly developed and acquired communities, which includes the impact of communities acquired in the Archstone Acquisition offset partially by communities sold during 2013 and 2012.2014. The weighted average monthly revenue per occupied apartment home increased to $2,171$2,476 for 20132016 as compared to $2,017$2,388 in 20122015 and $1,911$2,254 in 2011.$34,749,000,$64,206,000, or 4.3%, to $1,541,034,000 for 2013 and increased $41,698,000 or 5.8%, for 2012 as compared to2016 from $1,476,828,000 in the respective prior years. For 2013, the weighted average monthly revenue per occupied apartment home increased 4.2% to $2,156 compared to $2,069 in 2012.year. The increase for 2013 is due to an increase in average rental rates of 4.2% and4.4% to $2,450 per apartment home, partially offset by a decrease in economic occupancy of 0.1% to 96.2%95.5%. Rental revenue increased $66,136,000, or 5.0%, for 2015, as compared to the prior year. Economic occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a community's gross revenue. Economic occupancy is defined as gross potential revenue less vacancy loss, as a percentage of gross potential revenue. Gross potential revenue is determined by valuing occupied homes at leased rates and vacant homes at market rents.CommunitiesCommunities' regions in 20132016 as compared to the prior year, as discussed in more detail below.which accounted for approximately 29.9%24.5% of the Established Community rental revenue for 2013,2016 and experienced an increase ina rental revenue increase of 4.3%2.9% for 2013 as compared to 2012.2016 over the prior year. Average rental rates increased 4.3% during 20132.8% to $2,563$2,972 per apartment home, and economic occupancy remained consistent at 96.5%. Apartment demand inincreased 0.1% to 95.7% for 2016 as compared to 2015. While New York City is absorbing a larger pipeline of new apartment deliveries, suburban markets surrounding the Metro New York/New Jersey region is being driven by job growth across a diverse group of industries including healthcare, professional business services, technology, retail, hospitalitycity are more insulated from this new competition, and education. The region also experienced an increase in construction related employment growth related to Hurricane Sandy recovery efforts. Wewe expect to see continued but moderating growth over the prior year in the Metro New York/New Jersey region in 2014. New York City is beginning to see a larger pipeline of new apartment deliveries in 2014, but suburban markets surrounding the city are mostly insulated from this new competition.New EnglandNorthern California region accounted for approximately 21.3%20.7% of the Established Community rental revenue for 20132016 and experienced a rental revenue increase of 3.2%6.7% for 2016 over the prior year. Average rental rates increased 3.1%6.9% to $2,137,$2,795 per apartment home, and were partially offset by a 0.2% decrease in economic occupancy increased 0.1% to 95.8%95.2% for 20132016 as compared to 2012. The New England region's favorable results are driven by employment growth in the medical, education and technology fields in the Boston metro area. In response to a favorable employment market, the region benefitted from an in-migration. The Boston metro area is seeing a recovery in for-sale housing ahead of most other regions, resulting in resurgence in suburban employment. The Fairfield market continues to experience slower growth due to this market's greater exposure to the financial services sector, which has experienced2015. We expect slower job growth during this recovery than other industries. While demand drivers should become more favorableand elevated levels of new apartment deliveries will temper growth in 2014, we expect this market2017 relative to continue to lag due to new supply pressure, particularly in and around Stamford.NorthernSouthern California region accounted for approximately 16.9%18.9% of the Established Community rental revenue for 20132016 and experienced a rental revenue increase of 8.1%6.3% for 2016 over the prior year. Average rental rates increased 7.8%6.5% to $2,335,$2,111 per apartment home, and were partially offset by a 0.2% decrease in economic occupancy increased 0.3% to 96.3%95.6% for 20132016 as compared to 2012. While new apartment supply may slow revenue growth in future periods, we expect the strength in the technology and medical sectors to continue to fuel demand for apartment homes in 2014. The Southern California region accounted for approximately 14.3% of the Established Community rental revenue for 2013 and experienced a rental revenue increase of 3.9% over the prior year. Average rental rates increased 3.7% to $1,767, and economic occupancy increased 0.2% to 96.3% for 2013 as compared to 2012.2015. Southern California has seen steady job growth and limited new apartment supply, which we expect will continue to support favorable operating results in 2014.Mid-Atlantic region, which represented approximately 12.0% of the Established Community rental revenue during 2013, experienced an increase in rental revenue of 0.8% as compared to 2012. Average rental rates increased by 0.9% to $1,967, and were partially offset by a decrease in economic occupancy of 0.1% to 95.9% for 2013 as compared to 2012. The region experienced a modest decrease in revenue growth in the second half of 2013, driven by an increase in the supply of apartment homes combined with the impact of the decline in federal government spending. We expect rental revenue to decline further in the Mid-Atlantic region during 2014 as additional supply is delivered into the market. The Pacific NorthwestNew England region accounted for approximately 5.6%15.5% of the Established Community rental revenue for 20132016 and experienced a rental revenue increase of 7.2%3.4% for 2016 over the prior year. Average rental rates increased 7.5%3.6% to $1,695,$2,314 per apartment home, and were partially offset by a 0.2% decrease in economic occupancy of 0.3% to 95.7%95.6% for 20132016 as compared to 2012.2015. Stable job growth in the Boston metro area is expected to support apartment demand in 2017. The region's innovative technology, e-commerce,Fairfield market continues to experience moderate economic growth due to the area’s greater exposure to the financial services sector, which has experienced slower job growth during this recovery than other industries.manufacturing sectorsexperienced a rental revenue increase of 1.7% for 2016 over the prior year. Average rental rates increased 2.0% to $2,134 per apartment home, and were partially offset by a 0.3% decrease in economic occupancy to 95.3% for 2016 as compared to 2015. Although new apartment supply will remain elevated, accelerating job growth is expected to support modest growth in 2017.growthfavorable operating results in the economy and improvement in apartment fundamentals. Rental revenue growth may be tempered in the near term due to the increased supply of apartment homes in 2014, particularly in the urban core of Seattle, which may affect our future revenue growth in this region.increased $1,245,000decreased $4,348,000 or 12.1%43.7%, and $1,103,000, or 10.0%, in 20132016 and increased $601,000, or 6.2%, in 2012 as compared to the prior years. The increase in 2013 was primarily due to management fees related to the U.S. Fund and the AC JV, partially offset by lower property management and other management fees earned related to dispositions from Fund I and Fund II. The increase in 2012 was primarily due to increased asset management fees and property management fees from Fund II over the prior year.Direct property operating expenses, excluding property taxes increased $84,064,000, or 39.8%, and $9,553,000, or 4.7%, in 2013 and 2012,2015, respectively, as compared to the prior years. The decrease in 2016 was primarily due to lower property and asset management fees earned as a result of dispositions from Fund II and the U.S. Fund, as well as asset management and disposition fees earned in the prior year not present in 2016 from the Residual JV. The decrease in 2015 was primarily due to lower property and asset management fees earned as a result of dispositions from Fund I and Fund II, partially offset by an increase in 2013 wasdisposition fees in 2015 related to the sale of communities owned within the Residual JV.homes, including the communities acquired as part of the Archstone Acquisition.communities. The increase for 2016 was partially offset by a decrease in 2012 was primarily duesnow removal and other costs related to the additionsevere winter storms in our Northeast markets that occurred during the first quarter of newly developed apartment homes.2015, which contributed to the increase in the prior year.$4,374,000,$7,256,000, or 2.6%2.5%, and $8,207,000, or 3.1%, in 20132016 and decreased $475,000, or 0.3%, in 2012 as compared to the prior years. The increase in 2013 was primarily due to increased repairs and maintenance, insurance, and office operations costs.Property taxes increased $61,219,000, or 62.8%, and $8,591,000, or 9.7%, in 2013 and 2012,2015, respectively, as compared to the prior years. The increase in 20132016 was primarily due to increased bad debt expense, compensation and community repairs and maintenance costs, partially offset by decreased utility costs and a decrease in snow removal and other costs related to the severe winter storms in our Northeast markets that occurred during the first quarter of 2015. The increase in 2015 was primarily due to increased repairs and maintenance costs, payroll and benefit costs, and insurance costs, as well as snow removal and other costs related to the severe winter storms in our Northeast markets during the first quarter of 2015.homes, including communities, acquired as part of the Archstone Acquisition, coupled with increased tax rates and assessments across our portfolio. The increaseportfolio and successful appeals and reductions of supplemental taxes in 2012 was primarily due to the additionrespective prior years in excess of newly developed and redeveloped apartment homes and overall higher assessments. Property tax increases are also impacted bythose recognized in the size and timing of successful tax appeals.then current year.$4,282,000,$6,616,000, or 5.4%4.4%, and $4,581,000,$3,829,000, or 6.5%2.8%, in 20132016 and 2012,2015, respectively, as compared to the prior years. The increase in 20132016 was primarily due to higher ratesincreased assessments as well as appeals and assessments, partially offset by highersupplemental tax reversals in the prior year in excess of those recognized in the current year. The increase in 2015 was primarily due to successful appeals and refunds receivedreductions of supplemental taxes in 2013,Table2014 in excess of Contentsas comparedthose in 2015, related primarily to the prior year.our West Coast markets. For communities in California, property tax changes are determined by the change in the California Consumer Price Index, with increases limited by law (Proposition 13). Massachusetts also has laws in place to limit property tax increases. The increase in 2012 was primarily due to appeals and settlements recognized in 2011 that were not present in 2012, coupled with increased rates and assessments throughout our regions. We evaluate property tax increases internally and also engage third-party consultants to assist in our evaluations. We appeal property tax increases when appropriate.$10,912,000,$6,719,000, or 25.9%11.1%, in 2013 and increased $1,980,000, or 4.9%, in 2012,2015, as compared to the prior years. The increasesincrease in both years were2015 was primarily due to increasedan increase in compensation related costs with the increase in 2013 over 2012 including the increase in overhead associated with the Archstone Acquisition. The increase in 2012 was also attributable to costs associated with our introduction and implementation of our AVA and Eaves by Avalon brands.certain employee separation costs.Investments and investment management costs decreased $2,081,000, or 34.3%, in 2013 and increased by $945,000, or 18.4%, in 2012, due to reductions in compensation costs, as our investment fund management activity has declined.pursuits.pursuits, offset by any recoveries associated with acquisitions for periods prior to our ownership. These costs can be volatile, particularly in periods of increased acquisition activity, periods of economic downturn or when there is limited access to capital, and the costs may vary significantly from period to period. These costs increased $33,700,000,$3,100,000, or 296.9%45.4%, and $8,383,000, or 282.5%,$10,539,000 in 20132016 and 2012,2015, respectively, as compared to the prior years,years. The increase in 2016 was primarily due to costs related to five operating communities acquired in 2016, as well as the non-cash write-off of asset management fee intangibles associated with the disposition of communities in the U.S. Fund. The increase in 2015 was primarily due to receipts in 2014 related to communities acquired as part of the Archstone Acquisition.Acquisition for periods prior to our ownership, which are primarily comprised of property tax and mortgage insurance refunds, as well as increased costs associated with the acquisition of real estate and abandonment of pursuits, as compared to the prior year.$35,482,000,$11,895,000, or 25.9%6.8%, and decreased $5,003,000, or 2.8%, in 20132016 and decreased $30,894,000, or 18.4%, in 2012,2015, respectively, as compared to the prior years. This category includes interest costs offset by capitalized interest pertaining to development and redevelopment activity, amortization of the mark to market adjustmentpremium/discount on debt, assumed as part of the Archstone Acquisition, and interest income. The increase in 20132016 was due to an increase in outstanding unsecured indebtedness from net issuance activity in 2015 and 2016, as well as an increase in variable interest rates. The decrease in 2015 was primarily due to net interest costs on debt assumedthe repayment of secured indebtedness in the Archstone Acquisition, partially offset by2015 and increased capitalized interest as compared to the prior year. The decrease in 2012 was primarily due to decreased average outstanding indebtedness and lower average effective interest rates coupled witha result of our increased capitalized interest. This decrease wasdevelopment activity, partially offset by interest income associated with escrow accounts for certain tax exempt secured borrowings recognized in 2011 that were not present in 2012. Thean increase in capitalized interest in both 2013 and 2012 overoutstanding unsecured indebtedness resulting from the respective prior years was driven primarily by increased development activity and development pursuits.issuance of $875,000,000 aggregate principal amount during 2015.on interest rate contract reflects the loss recorded by the Company related to the forward interest rate protection agreement that matured in May 2013. Based on changes in the Company's capital needs in 2013, the Company did not issue the anticipated debt for which the interest rate protection agreement was transacted.Loss(gain) on the extinguishment of debt, net reflectsprepayment penalties, the expensingwrite-off of unamortized deferred financing costs and premiums from our debt repurchase and retirement activity, or payments to acquire our outstanding debt at amounts above or below the carrying basis of the debt acquired, excluding costs related to debt secured by assets sold or held for sale, which is included in discontinued operations, below. During 2013, we incurred a chargesale. The loss of $7,075,000 for 2016 was primarily due to the prepayment penaltiespenalty associated with the early repayment of $250,000,000 principal amount of 5.70% coupon unsecured notes and the write-off of deferred fees related to the early retirement of three secured notes. During 2012, we recognized a non-cash charge for the write-off of deferred financing fees relatedcosts for the variable rate debt secured by Avalon Walnut Creek. The gain of $26,736,000 for 2015 was primarily due to the write-off of unamortized mark to market adjustments, net of unamortized deferred financing costs and any applicable related prepayment penalties associated with the early retirementrepayment of a secured note.certain debt assumed as part of the Archstone Acquisition.Table of Contents$316,535,000$53,511,000, or 129.9%11.2%, and $16,952,$35,241,000, or 7.5%8.0%, in 20132016 and 2012,2015, respectively, as compared to the prior years. The increases in 2016 and 2015 were primarily due to the addition of newly developed apartment communities. The increase in 2016 was also due to the addition of newly acquired apartment communities.20132016 was primarily due to additional depreciation expense froman increase in legal and consulting fees, as well as increased charitable contributions over the Archstone Acquisition, consisting largely of the depreciation of in-place lease intangibles, which were depreciated over a six month period.prior year. The increase in 20122015 was primarily due to the net increaselegal settlement proceeds received in assets from the completion of development, redevelopment and acquisition activity,2014 not present in 2015, partially offset by a reductiondecrease in depreciationcompensation expense, from assets sold during the year.General and administrative expense ("G&A") increased $5,472,000, or 16.0%, and $4,730,000, or 16.1%including severance, in 2013 and 2012, respectively,2015 as compared to the prior years. The increases in both years were primarily due to increased compensation costs, including costs related to the Archstone Acquisition in 2013. The increase in 2012 was also due to increased professional fees.year.20122016 consists of property damage insurance proceeds from the losses we incurred associated with Superstorm Sandy. Amountsfinal insurance settlement for 2011 consistthe Edgewater casualty loss and net third-party insurance proceeds related to severe winter storms that occurred in 2015 in our Northeast markets, partially offset by impairment charges recognized for ancillary land parcels. Casualty and impairment (gain) loss, net for 2015 consists of Edgewater insurance proceeds received, partially offset by (i) incident and demolition expenses and the write-off of the write downnet book value of two land parcelsthe fixed assets destroyed in the fire at Edgewater, (ii) property and casualty damages incurred across several communities in our Northeast markets related to severe winter storms, and (iii) an other than temporary impairment of an investment in unconsolidated joint venture.Gain on sale of land decreased in 2013 and 2012 as compared to the prior years, due to decreased volume and associated gains on the salecharge recognized for a parcel of land parcels.sold during 2015.Gain on acquisitionEquity in income of unconsolidated real estate entity represents the amount by which the fair value of our prior ownership interest in the joint venture that owned Avalon Del Rey exceeded our carrying value.Equity in (loss) income of unconsolidated entities decreased $32,068,000,$5,056,000, or 153.3%7.2%, and $78,748,000, or 52.9%, in 20132016 and increased $15,794,000, or 308.5%, in 2012,2015, respectively, as compared to the prior years. The decrease in 2013 is primarily due to costs of approximately $39,543,000 associated with the Archstone Acquisition that were incurred through the unconsolidated joint venture entities owned with Equity Residential during the year. The increase in 20122016 was primarily due to decreased NOI from the recognitionventures due to disposition activity in 2015 and 2016, as well as amounts received in 2015 for Avalon at Mission Bay II, discussed below, partially offset by increased gains from dispositions in 2016. The decrease in 2015 was primarily due to both gains on, and our promoted interests from, the sale of income fromcommunities in various ventures, including Avalon Chrystie Place, in 2014 in excess of gains on dispositions in 2015. The decrease in 2015 was partially offset by amounts received related to the modification of the joint venture agreement for the entity that owns Avalon at Mission Bay II to eliminate our promoted interest for Avalon Del Reyin future distributions, as well as the settlement of outstanding legal claims and an increasenet gains on the sales of communities in our proportionate sharevarious ventures.gains from Fund I disposition activity over the prior year.Income from discontinued operationscommunities represents the net income generated by real estate sold or qualifying as discontinued operations during the period from January 1, 2011 through December 31, 2013. Income from discontinued operations decreased in 2013 and increased in 2012, due to changes in the number of communities sold, the size2016 and carrying value of those communities and the market conditions in the local area2015 as compared to the prior year. See Note 7, "Real Estate Disposition Activities," to our Consolidated Financial Statements.Gain on sale of communities increased in 2013 and decreased in 2012, due to changes in the volume of community disposition activity and associated gains as compared to the prior year.years. The amount of gain realized upon disposition of communitiesin a given period depends on many factors, including the number of communities sold, the size and carrying value of thosethe communities sold and the market conditions in the local area.Net loss attributable Prior to noncontrolling interestsour adoption of ASU 2014-08 as of January 1, 2014, gain on sale of communities was presented in gain on sale of discontinued operations. The gain of $374,623,000 in 2016 was primarily due to gains on the sale of seven wholly-owned operating communities, and the gain of $115,625,000 in 2015 was due to gains on the sale of three wholly-owned operating communities.resulteddecreased by $1,178,000 in an allocation2016andby $7,885,000 in 2015, as compared to the prior years. The decreases in 2016 and 2015 were primarily due to the timing of lossfederal income tax expense amounts related to dispositions of $370,000our direct and indirect interests in 2013, $307,000certain real estate assets acquired in 2012,the Archstone Acquisition, which were owned through a taxable REIT subsidiary.$252,000qualifying as discontinued operations during the period from January 1, 2014 through December 31, 2016. Income from discontinued operations decreased in 2011.2015, as compared to the prior year due to the change in accounting guidance for discontinued operations as discussed above.believeemploy a disciplined approach to our liquidity and capital management. When we source capital, we take into account both our view of the most cost effective alternative then available and our desire to maintain a balance sheet that provides us with flexibility. Our principal short-term liquidity needs are to fund:•••• In 2014, we expect to meet our liquidity needs from a variety of internal and external sources, which may include real estate dispositions, cash balances on hand, borrowing capacity under our Credit Facility, secured and unsecured debt financings, and other public or private sources of liquidity including the issuance of common and preferred equity, as well as cash generated from our operating activities. Our ability to obtain additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to the real estate industry, our credit ratings and credit capacity, as well as the perception of lenders regarding our long or short-term financial prospects. Capital raising activities in 2013 included asset sales, the issuance of unsecured notes in September and December, and the issuance of common shares to Lehman and assumption of secured debt as part of the Archstone Acquisition. Unrestrictedtotaled $281,541,000of $214,994,000 at December 31, 2013,2016, a decrease of $2,452,077,000$185,513,000 from $2,733,618,000$400,507,000 at December 31, 2012.2015. The following discussion relates to changes in cash due to operating, investing and financing activities, which are presented in our Consolidated Statements of Cash Flows included elsewhere in this report.$724,501,000$1,143,484,000 in 20132016 from $540,819,000$1,056,754,000 in 2012.2015. The increasechange was driven primarily driven by increased NOI from community operations in 2013 as compared to 2012existing and newly developed and acquired communities and the timingreceipt of payments of corporate expenditures.$1,181,174,000 in 2013 primarily related to investments in assets through acquisition, development and redevelopment. In 2013, we invested $2,151,799,000 in the following areas:•we invested $839,469,000 in the acquisition of real estate related to acquisitions, primarily the Archstone Acquisition;•we invested $1,285,715,000$1,201,026,000 in the development and redevelopment of communities;•we had $26,615,000$72,852,000 for real estateour operating communities and non-real estate assets.$1,995,404,000$291,645,000 in 2013.2016. The net cash used iswas primarily due to the repayment of $2,110,347,000 in secured notes and prepayment penalties, primarily in conjunction with the Archstone Acquisition, to:$526,050,000, and the $726,749,000;$100,000,000unsecured notes in unsecuredthe amount of $504,403,000; and$750,000,000unsecured notes in the aggregate principal amount of unsecured notes. The Company has a $1,300,000,000 revolving variable rate unsecured credit facilityathe approval of the syndicate of bankslenders, we increased the aggregate facility size from $1,300,000,000 to $1,500,000,000 (the "Credit Facility"“Credit Facility Increase”) which matures in April 2017.. We may further extend the maturityterm for up to one year throughnine months, provided we are not in default and upon payment of a $1,500,000 extension fee. In connection with the exercise of two, six month extension options for an aggregate fee of $1,950,000.Credit Facility Increase, the applicable margin over reference rates used to determine the applicable interest rates on our borrowings from time to time decreased. The Credit Facility bears interest at varying levels based on the London Interbank Offered Rate("LIBOR" (“LIBOR”), rating levels achieved on our unsecured notes and on a maturity schedule selected by us. The current stated pricing is LIBOR plus 1.05% (1.21%0.825% per annum (1.60% at January 31, 20142017 assuming a one month borrowing rate). The stated spread over LIBOR can vary from LIBOR plus 0.80% to LIBOR plus 1.55% based on our credit ratings. In addition, a competitive bid option is available for borrowings up to 65% of the Credit Facility amount, which allows banks that are part of the lender consortium to bid to make loans at a rate that is lower than the stated rate if market conditions allow. In connection with the Credit Facility Increase, the annual facility fee iswas also amended to lower the fee to 0.125% from 0.15% (or, resulting in a fee of approximately $1,950,000$1,875,000 annually based on the $1,300,000,000$1,500,000,000 facility size and based on our current credit rating).did not have anyhad no borrowings outstanding under the Credit Facility and had $66,396,000$45,321,000 outstanding in letters of credit that reduced our borrowing capacity as of January 31, 2014.•••2013.August 2012,December 2015, we commenced a thirdfourth continuous equity program ("(“CEP III"IV”), under which we are authorized by our Board of Directors tomay sell up to $750,000,000 of shares$1,000,000,000 of our common stock from time to time duringtime. Actual sales will depend on a 36-month period.variety of factors to be determined, including market conditions, the trading price of our common stock and determinations of the appropriate sources of funding. In conjunction with CEP IIIIV, we have engaged sales agents who will receive compensation of approximately 1.5%up to 2.0% of the gross sales price for shares sold. DuringCEP IV also allows us to enter into forward sale agreements up to $1,000,000,000 in aggregate sales price of our common stock. We expect that we will physically settle each forward sale agreement on one or more dates prior to the year endedmaturity date of that particular forward sale agreement, in which case we will expect to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the relevant forward sale price. However, we may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, we will pay the relevant forward seller, in the form of a reduced initial forward sale price, commission of up to 2.0% of the sales prices of all borrowed shares of common stock sold. As of December 31, 2013,2016, we had no sales under CEP IIIthe program and have $646,274,000had not entered into any forward sale agreements. As of January 31, 2017, we had $1,000,000,000 of shares that remainremaining authorized for issuance under this program.IssuanceCommon Stockforward interest rate swap agreements to reduce the impact of variability in Archstone Acquisition During 2013 we issued 14,889,706 shares of common stock to Lehman (as defined in Note 5, "Archstone Acquisition"interest rates on a portion of our Consolidated Financial Statements)expected debt issuance activity in 2016 and 2017. During 2016, we settled $400,000,000 of forward interest rate swap agreements in conjunction with the Archstone Acquisition. On February 18, 2014, Lehman announced that it had sold allMay 2016 unsecured notes issuance, making a payment of $14,847,000. At maturity of the shares of our common stock it received as considerationremaining outstanding forward interest rate swap agreements, we expect to cash settle the contracts and either pay or receive cash for the Archstone Acquisition. Lehman received allthen current fair value. Assuming that we issue the debt as expected, the impact from settling these positions will then be recognized over the life of the net proceeds from the sale of its shares of our common stock, and Lehman's sale of such shares did not impact the total number of the our shares of common stock outstanding.the time that such debt matures.maturity. For both our unsecured and secured notes, a portion of the principal of these notes may be repaid prior to maturity. Early retirement of our unsecured or secured notes could result in gains or losses on extinguishment. If we do not have funds on hand sufficient to repay our indebtedness as it becomes due, it will be necessary for us to refinance or repayotherwise provide liquidity to satisfy the debt.debt at maturity. This refinancing or repayment may be accomplished by uncollateralized private or public debt offerings, equity issuances, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility. Although we believe we will have the capacity toadditional financingdebt activity occurred during 2013:•connectionJanuary 2016, in conjunction with the Archstone Acquisition,disposition of Eaves Trumbull, Avalon Stratford was substituted as collateral for the outstanding fixed rate mortgage note secured by Eaves Trumbull.$2,034,482,000 net principal amount of Archstone's existing secured indebtedness, detailed in the following table.•In March 2013, we repaid $100,000,000 principal amount of 4.95% unsecured notes pursuant to their scheduled maturity.•In April 2013, we obtained a 3.06% fixed rate secured mortgage loan in the amount of $15,000,000 that matures in April 2018.•In April 2013, we repaid a 4.69% fixed rate secured mortgage note in the amount of $170,125,000 pursuant to its scheduled maturity date.•In May 2013, we repaid a $5,393,000 fixed rate secured mortgage note with ana principal balance of $67,904,000 and a contractual interest rate of 5.55%4.18% maturing in December 2020.July 2028 scheduledMarch 2016 maturity date. Upon repayment, Archstone Lexington was substituted as collateral for the outstanding fixed rate mortgage note secured by Avalon Walnut Ridge I.•2013, we obtained a 3.08% fixed rate secured mortgage loan that matures in June 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 refinancing was necessitated by the secured community-specific tax protection obligation assumed through certain of the preferred interests we assumed as part of the Archstone Acquisition.•In May 2013, we repaid a $52,806,000 fixed rate secured mortgage note with an interest rate of 5.24% pursuant to its scheduled maturity date.•In September 2013,2016, we issued $400,000,000$475,000,000 principal amount of unsecured notes in a public offering under our existing shelf registration statement for net proceeds of approximately $396,212,000.$471,751,000. The notes mature in May 2026 and were issued at a 2.95% coupon rate.20202026 and were issued at a 3.63%2.90% coupon interest rate. The notes have an effective interest rate of 3.79% including the effect of offering costs.•December 2013,October 2016, we issued $350,000,000 principal amount of unsecured notes in a public offering under our existing shelf registration statement for net proceeds of approximately $346,934,000.$345,520,000. The notes mature in December 2023October 2046 and were issued at a 4.20%3.90% coupon interest rate. The notes have an effective interest rate of 4.30% including the effect of offering costs.•December 2013,November 2016, we repaid a $150,000,000 fixed rate secured mortgage note with an interest rate$250,000,000 principal amount of 5.66%, a $110,600,000 fixed rate secured mortgage note with an interest rate of 5.48%, and a $41,439,000 fixed rate secured mortgage note with an interest rate of 4.75%,our 5.70% coupon unsecured notes in advance of their 2015its March 2017 scheduled maturity, dates, and incurredrecognizing a charge for repayment penaltiesof $4,614,000, consisting of a prepayment penalty of $4,403,000 and the write-off of deferred feesfinancing costs of $14,921,000.20132016 and 2015 (dollars in thousands) as compared to the amounts of debt outstanding as of at December 31, 2012.. We are not directly or indirectly (as borrower or guarantor) obligated in any material respect to pay principal or interest on the indebtedness of any unconsolidated entities in which we have anyan equity or other interest. Balance Outstanding Scheduled maturities All-In
interest
rate(1) Principal
maturity
date 12-31-12 12-31-13 2014 2015 2016 2017 2018 Thereafter 7.83 % May-2027 $ 8,764 $ 8,401 $ 390 $ 419 $ 449 $ 482 $ 517 $ 6,144 7.50 % Feb-2041 16,288 16,094 207 222 238 255 276 14,896 7.54 % Apr-2043 16,205 16,032 185 198 211 225 241 14,972 6.15 % Oct-2047 40,390 39,979 434 457 482 509 536 37,561 4.13 % Nov-2036 — 62,200 (7) — — — — — 62,200 81,647 142,706 1,216 1,296 1,380 1,471 1,570 135,773 0.98 % Feb-2017 18,300 18,300 (3) — — — 18,300 — — 1.21 % Jun-2025 7,635 7,635 (3) — — — — — 7,635 1.14 % Jun-2025 20,800 20,800 (3) — — — — — 20,800 1.48 % Jun-2025 38,800 38,800 (3) — — — — — 38,800 1.49 % Jun-2025 17,600 17,600 (3) — — — — — 17,600 3.02 % Nov-2037 93,800 93,800 (3) — — — — — 93,800 1.59 % Jul-2040 45,000 45,000 (3) — — — — — 45,000 1.37 % Mar-2046 116,000 116,000 (9) — — — — — 116,000 1.37 % Mar-2046 10,000 10,000 (9) — — — — — 10,000 1.61 % May-2046 100,000 100,000 (5) — — — — — 100,000 1.75 % Nov-2038 — 147,000 (7)(3) — — — — — 147,000 1.75 % Nov-2038 — 121,500 (7)(3) — — — — — 121,500 1.65 % May-2029 — 100,500 (7)(3) — — — — — 100,500 1.73 % Dec-2037 — 64,450 (7)(3) — — — — — 64,450 1.82 % Apr-2028 — 44,410 (7)(3) — — — — 128 44,282 467,935 945,795 — — — 18,300 128 927,367 — % Mar-2013 100,000 — — — — — — — 5.52 % Apr-2014 150,000 150,000 150,000 — — — — — 5.89 % Sep-2016 250,000 250,000 — — 250,000 — — — 5.82 % Mar-2017 250,000 250,000 — — — 250,000 — — 6.19 % Mar-2020 250,000 250,000 — — — — — 250,000 4.04 % Jan-2021 250,000 250,000 — — — — — 250,000 4.30 % Sep-2022 450,000 450,000 — — — — — 450,000 3.00 % Mar-2023 250,000 250,000 — — — — — 250,000 3.78 % Oct-2020 — 400,000 — — — — — 400,000 4.30 % Dec-2023 — 350,000 — — — — — 350,000 — % Jul-2028 5,465 — (8) — — — — — — 7.78 % Jul-2033 17,939 17,530 438 470 503 539 577 15,003 — % Apr-2013 170,125 — (6) — — — — — — — % May-2015 110,600 — (10) — — — — — — — % Jul-2015 150,000 — (10) — — — — — — 6.22 % Dec-2016 49,221 48,484 785 47,699 — — — — 6.13 % Dec-2016 59,292 58,385 962 57,423 — — — — 4.30 % Jul-2066 2,500 3,042 — — — — — 3,042 5.92 % May-2019 20,737 20,464 289 307 323 346 367 18,832 5.93 % May-2019 40,552 40,018 566 601 631 676 717 36,827 5.92 % May-2019 64,472 63,624 900 955 1,003 1,075 1,140 58,551 5.94 % May-2019 35,948 35,475 502 532 559 599 636 32,647 5.94 % May-2019 38,519 38,013 538 571 599 642 681 34,982 6.06 % May-2019 65,004 64,149 907 963 1,011 1,083 1,150 59,035 5.94 % May-2019 77,103 76,088 1,076 1,142 1,199 1,285 1,363 70,023 6.05 % May-2019 57,912 57,150 808 858 901 965 1,024 52,594 6.06 % May-2019 44,997 44,405 628 667 700 750 796 40,864 5.91 % May-2019 76,254 75,251 1,065 1,130 1,186 1,271 1,348 69,251 5.92 % May-2019 26,201 25,856 366 388 408 437 463 23,794 5.91 % May-2019 52,975 52,278 740 785 824 883 937 48,109 5.90 % May-2019 71,905 70,959 1,004 1,065 1,118 1,198 1,272 65,302 — % Aug-2015 42,459 — (10) — — — — — — — % Jun-2013 53,348 — (6) — — — — — — 4.05 % Jun-2018 11,958 11,869 (7) 186 195 202 213 11,073 — 3.12 % Nov-2015 — 86,167 (7) — 86,167 — — — — 3.12 % Nov-2015 — 167,595 (7) — 167,595 — — — — 3.12 % Nov-2015 — 72,374 (7) — 72,374 — — — — 3.12 % Nov-2015 — 28,844 (7) — 28,844 — — — — 3.12 % Nov-2015 — 23,858 (7) — 23,858 — — — — 3.12 % Nov-2015 — 10,427 (7) — 10,427 — — — — 3.12 % Nov-2015 — 42,703 (7) — 42,703 — — — — 3.12 % Nov-2015 — 37,212 (7) — 37,212 — — — — 3.12 % Nov-2015 — 28,742 (7) — 28,742 — — — — 3.36 % Nov-2017 — 27,176 (7) — — — 27,176 — — 3.36 % Nov-2017 — 15,669 (7) — — — 15,669 — — 3.36 % Nov-2017 — 27,411 (7) — — — 27,411 — — 3.36 % Nov-2017 — 20,754 (7) — — — 20,754 — — All-In
interest
rate (1) Principal
maturity
date Balance Outstanding Scheduled Maturities Community 12/31/2015 12/31/2016 2017 2018 2019 2020 2021 Thereafter Tax-exempt bonds (2) Fixed rate Avalon Oaks West 7.55 % Apr-2043 15,649 15,420 225 241 257 275 293 14,129 Avalon at Chestnut Hill 6.16 % Oct-2047 39,088 38,564 509 536 566 596 629 35,728 Avalon Westbury 3.81 % Nov-2036 (3) 62,200 62,200 — — — — — 62,200 116,937 116,184 734 777 823 871 922 112,057 Variable rate (4) Avalon at Mountain View 1.47 % Feb-2017 (5)(6) 17,700 17,300 17,300 — — — — — Eaves Mission Viejo 1.78 % Jun-2025 (6) 7,635 7,635 — — — — — 7,635 AVA Nob Hill 1.65 % Jun-2025 (6) 20,800 20,800 — — — — — 20,800 Avalon Campbell 1.98 % Jun-2025 (6) 38,800 38,800 — — — — — 38,800 Eaves Pacifica 2.00 % Jun-2025 (6) 17,600 17,600 — — — — — 17,600 Avalon Bowery Place I 3.58 % Nov-2037 (6) 93,800 93,800 — — — — — 93,800 Avalon Acton 2.40 % Jul-2040 (6) 45,000 45,000 — — — — — 45,000 Avalon Walnut Creek 1.50 % Mar-2046 (7) 116,000 — — — — — — — Avalon Walnut Creek 1.50 % Mar-2046 (7) 10,000 — — — — — — — Avalon Morningside Park 1.85 % May-2046 (3) 100,000 100,000 — — — — 345 99,655 Avalon Clinton North 2.41 % Nov-2038 (6) 147,000 147,000 — — — — — 147,000 Avalon Clinton South 2.41 % Nov-2038 (6) 121,500 121,500 — — — — — 121,500 Avalon Midtown West 2.32 % May-2029 (6) 100,500 100,500 — — — — — 100,500 Avalon San Bruno I 2.30 % Dec-2037 (6) 64,450 64,450 — — — — — 64,450 Avalon Calabasas 2.22 % Apr-2028 (6) 44,410 44,410 — — — — — 44,410 945,195 818,795 17,300 — — — 345 801,150 Conventional loans (2) Fixed rate $250 Million unsecured notes 5.89 % Sep-2016 (8) 250,000 — — — — — — — $250 Million unsecured notes 5.82 % Mar-2017 (9) 250,000 — — — — — — — $250 Million unsecured notes 6.19 % Mar-2020 250,000 250,000 — — — 250,000 — — $250 Million unsecured notes 4.04 % Jan-2021 250,000 250,000 — — — — 250,000 — $450 Million unsecured notes 4.30 % Sep-2022 450,000 450,000 — — — — — 450,000 $250 Million unsecured notes 3.00 % Mar-2023 250,000 250,000 — — — — — 250,000 $400 Million unsecured notes 3.78 % Oct-2020 400,000 400,000 — — — 400,000 — — $350 Million unsecured notes 4.30 % Dec-2023 350,000 350,000 — — — — — 350,000 $300 Million unsecured notes 3.66 % Nov-2024 300,000 300,000 — — — — — 300,000 $525 Million unsecured notes 3.55 % Jun-2025 525,000 525,000 — — — — — 525,000 $300 Million unsecured notes 3.62 % Nov-2025 300,000 300,000 — — — — — 300,000 $475 Million unsecured notes 3.35 % May-2026 — 475,000 — — — — — 475,000 $300 Million unsecured notes 3.01 % Oct-2026 — 300,000 — — — — — 300,000 $350 Million unsecured notes 3.95 % Oct-2046 — 350,000 — — — — — 350,000 Avalon Orchards 7.80 % Jul-2033 16,621 16,075 539 577 619 663 710 12,967 Avalon Walnut Creek 4.00 % Jul-2066 3,289 3,420 — — — — — 3,420 Avalon Mission Oaks 6.04 % May-2019 (10) 19,867 19,545 347 367 18,831 — — — Avalon Stratford 6.02 % May-2019 (11) 38,852 38,221 676 717 36,828 — — — AVA Belltown 6.00 % May-2019 61,769 60,766 1,075 1,140 58,551 — — — Avalon Encino 6.06 % May-2019 (10) 34,441 33,882 599 636 32,647 — — — Avalon Run East 5.95 % May-2019 36,904 36,305 642 681 34,982 — — — Avalon Wilshire 6.18 % May-2019 (10) 62,279 61,268 1,083 1,150 59,035 — — — Avalon at Foxhall 6.06 % May-2019 55,484 54,583 965 1,024 52,594 — — — Avalon at Gallery Place 6.06 % May-2019 43,110 42,410 750 796 40,864 — — — Avalon at Traville 5.91 % May-2019 73,057 71,871 1,271 1,348 69,252 — — — Avalon Bellevue 5.92 % May-2019 25,103 24,695 437 463 23,795 — — — Avalon on the Alameda 5.91 % May-2019 50,754 49,930 883 937 48,110 — — — Avalon at Mission Bay I 5.90 % May-2019 68,890 67,772 1,198 1,272 65,302 — — — AVA Pasadena 4.06 % Jun-2018 11,489 11,287 213 11,074 — — — — Avalon La Jolla Colony 3.36 % Nov-2017 (12) 27,176 26,682 26,682 — — — — — Eaves Old Town Pasadena 3.36 % Nov-2017 (12) 15,669 14,120 14,120 — — — — — Eaves Thousand Oaks 3.36 % Nov-2017 (12) 27,411 26,392 26,392 — — — — — Archstone Lexington 3.36 % Nov-2017 (12) — 21,601 21,601 — — — — — Avalon Walnut Ridge I 3.36 % Nov-2017 (12) 20,754 — — — — — — — Eaves Los Feliz 3.36 % Nov-2017 (12) 43,258 41,302 41,302 — — — — — Avalon Oak Creek 3.36 % Nov-2017 (12) 85,288 69,696 69,696 — — — — — Avalon Del Mar Station 3.36 % Nov-2017 (12) 76,471 70,854 70,854 — — — — — Avalon Courthouse Place 3.36 % Nov-2017 (12) 140,332 118,112 118,112 — — — — — Avalon Pasadena 3.36 % Nov-2017 (12) 28,079 25,805 25,805 — — — — — Eaves West Valley 3.36 % Nov-2017 (12) 83,087 146,696 146,696 — — — — — Eaves Woodland Hills 3.36 % Nov-2017 (12) 104,694 98,732 98,732 — — — — — Avalon Russett 3.36 % Nov-2017 (12) 39,972 32,199 32,199 — — — — — Avalon San Bruno II 3.85 % Apr-2021 30,514 30,001 468 534 564 591 27,844 — Avalon Westbury 4.88 % Nov-2036 (3) 18,975 17,745 1,293 1,358 1,426 1,499 1,574 10,595 Archstone Lexington 3.32 % Mar-2016 (13) 16,255 — — — — — — — Avalon San Bruno III 3.17 % Jun-2020 55,650 54,408 1,093 1,226 1,264 50,825 — — Avalon Andover 3.28 % Apr-2018 14,179 13,844 347 13,497 — — — — Avalon Natick 3.14 % Apr-2019 14,499 14,170 339 349 13,482 — — — Avalon Hoboken 3.55 % Dec-2020 (14) — 67,904 — — — 67,904 — — Avalon Columbia Pike 3.24 % Nov-2019 (14) — 70,019 1,505 1,557 66,957 — — — 5,019,172 5,752,312 707,914 40,703 625,103 771,482 280,128 3,326,982 Variable rate (4) Avalon Walnut Creek 1.88 % Mar-2046 (7) 8,500 — — — — — — — Avalon Calabasas 2.41 % Aug-2018 (6) 54,756 53,570 1,225 52,345 — — — — Avalon Natick 2.69 % Apr-2019 (6) 36,731 35,897 857 884 34,156 — — — Term Loan 2.14 % Mar-2021 300,000 300,000 — — — — 300,000 — 399,987 389,467 2,082 53,229 34,156 — 300,000 — Total indebtedness - excluding Credit Facility $ 6,481,291 $ 7,076,758 $ 728,030 $ 94,709 $ 660,082 $ 772,353 $ 581,395 $ 4,240,189 (1) Includes credit enhancement fees, facility fees, trustees’ fees, the impact of interest rate hedges, offering costs, mark to market amortization and other fees. (2) Balances outstanding represent total amounts due at maturity, and exclude deferred financing costs and debt discount for the unsecured notes of $36,698 and $29,326 as of December 31, 2016 and 2015, respectively, and deferred financing costs net of premium associated with secured notes of $9,180 as of December 31, 2016, and premium associated with secured notes net of deferred financing costs of $4,983 as of December 31, 2015, as reflected on our Consolidated Balance Sheets included elsewhere in this report. (3) Maturity date reflects the contractual maturity of the underlying bond. There is also an associated earlier credit enhancement maturity date. (4) Variable rates are given as of December 31, 2016. (5) In February 2017, we repaid this borrowing at its scheduled maturity date. (6) Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement. (7) In April 2016, we repaid this borrowing at par in advance of its scheduled maturity date. (8) In September 2016, we repaid this borrowing pursuant to its scheduled maturity date. (9) In November 2016, we repaid this borrowing in advance of its scheduled maturity date. (10) In August 2016, Avalon Mission Oaks, Avalon Encino and Avalon Wilshire, were substituted as collateral for the outstanding borrowings secured by Avalon Shrewsbury, Avalon at Freehold and Eaves Nanuet, respectively. (11) In January 2016, Avalon Stratford was substituted as collateral for the outstanding borrowing secured by Eaves Trumbull. (12) In February 2016, Archstone Lexington was substituted as collateral for the outstanding borrowing secured by Avalon Walnut Ridge I, and the aggregate principal balance from the secured borrowing was reallocated between the communities serving as collateral. (13) In February 2016, we repaid this borrowing at par in advance of its maturity date, subsequently substituting the operating community as collateral for another borrowing as discussed in note (12). (14) This borrowing was assumed in conjunction with the acquisition of the respective operating community in 2016. Balance Outstanding Scheduled maturities All-In
interest
rate(1) Principal
maturity
date 12-31-12 12-31-13 2014 2015 2016 2017 2018 Thereafter 3.36 % Nov-2017 — 43,258 (7) — — — 43,258 — — 3.36 % Nov-2017 — 85,288 (7) — — — 85,288 — — 3.36 % Nov-2017 — 76,471 (7) — — — 76,471 — — 3.36 % Nov-2017 — 140,332 (7) — — — 140,332 — — 3.36 % Nov-2017 — 28,079 (7) — — — 28,079 — — 3.36 % Nov-2017 — 83,087 (7) — — — 83,087 — — 3.36 % Nov-2017 — 104,694 (7) — — — 104,694 — — 3.36 % Nov-2017 — 39,972 (7) — — — 39,972 — — 5.55 % May-2053 — 142,061 (7) 901 954 987 1,067 1,129 137,023 3.85 % Apr-2021 — 31,398 (7) 430 454 475 506 534 28,999 4.13 % Nov-2036 — 21,260 (7) 1,095 1,155 1,315 1,275 1,340 15,080 3.32 % Mar-2016 — 16,780 (7) 255 270 16,255 — — — 3.28 % Apr-2018 — 14,821 309 319 328 339 13,526 — 4.87 % Jun-2020 — 56,210 — 561 1,147 1,188 1,226 52,088 3,295,486 4,875,683 164,750 617,386 281,674 958,528 41,299 2,812,046 1.71 % Mar-2046 9,000 8,500 (9) — — — — — 8,500 2.60 % Aug-2018 — 57,314 (7)(3) 1,020 1,084 1,152 1,225 52,833 — 9,000 65,814 1,020 1,084 1,152 1,225 52,833 8,500 $ 3,854,068 $ 6,029,998 $ 166,986 $ 619,766 $ 284,206 $ 979,524 $ 95,830 $ 3,883,686 (1)Includes credit enhancement fees, facility fees, trustees' fees, the impact of interest rate hedges, offering costs, mark to market amortization and other fees.(2)Variable rates are given as of December 31, 2013.(3)Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement.(4)Balances outstanding represent total amounts due at maturity, and are net of $5,291 of debt discount and $4,202 of debt discount and basis adjustments associated with the hedged unsecured notes as of December 31, 2013 and December 31, 2012, respectively, and $120,684 and $1,167 of premium associated with secured notes as of December 31, 2013 and December 31, 2012, respectively, as reflected on our Consolidated Balance Sheets included elsewhere in this report.(5)In July 2012 we remarketed the bonds converting them to a variable rate through July 2017.(6)Borrowing was repaid in accordance with its scheduled maturity.(7)Borrowing was assumed as part of the Archstone Acquisition.(8)Borrowing was repaid in May 2013 at par in advance of its scheduled maturity in July 2028.(9)In July 2013 we remarketed the bonds converting them to variable rate through July 2018.(10)Borrowing was repaid in December 2013 in advance of its 2015 scheduled maturity.OtherCapital Markets Activity AsDecember 31, 2013, we had 29 wholly-owned communities under construction,internal and three wholly-owned communities under reconstruction. Substantially all of the capital expenditures necessary to complete the communities currently under construction and reconstruction and fund development costs related to pursuing Development Rights will be funded from:
short-term financial prospects.•our $1,300,000,000 Credit Facility;•currentlybalances on hand investedas well as cash generated from our operating activities, (iii) borrowing capacity under our Credit Facility and (iv) secured and unsecured debt financings. Additional sources of liquidity in highly liquid overnight money market funds and repurchase agreements, and short-term investment vehicles;•retained operating cash;•the net proceeds from sales of existing communities;•debtcommon and preferred equity. Our ability to obtain additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to the real estate industry, our credit ratings and credit capacity, as well as the perception of lenders regarding our long or equity securities; and/or•private equity funding, including joint venture activity.plannedbeginning new construction or reconstruction activity, including activity related to communities owned by unconsolidated joint ventures, begins, or the construction of a Development Right begins, we intend to arrangeplan adequate financing to complete these undertakings, although we cannot assure you that we will be able to obtain such financing. In the event that financing cannot be obtained, we may have to abandon Development Rights, write off associated pre-development costs that were capitalized and/or forego reconstruction activity. In such instances, we will not realize the increased revenues and earnings that we expected from such Development Rights or reconstruction activity and significant losses could be incurred.NOI. However, weNOI until such time as the proceeds have been redeployed into revenue generating assets. We believe that the temporary absence of future cash flows from communities sold will not have a minimalmaterial impact on our ability to fund future liquidity and capital resource needs.2013,2016, we had investments in the following unconsolidated real estate entities accounted for under the equity method of accounting.accounting excluding development joint ventures. Refer to Note 5, "Archstone Acquisition," and Note 6, "Investments“Investments in Real Estate Entities"Entities,” of the Consolidated Financial Statements locatedincluded elsewhere in this report, which includes information on the aggregate assets, liabilities and equity, as well asDetailFor ventures holding operating apartment communities as of December 31, 2016, detail of the real estate and associated funding underlying our unconsolidated investments is presented in the following table. Debt (2) Unconsolidated Real Estate Investments Principal Amount Type Fund II 1. Briarwood Apartments - Owings Mills, MD 348 $ 46,079 $ 25,239 Fixed 3.64 % Nov 2017 2. Eaves Gaithersburg - Gaithersburg, MD (4) 684 103,180 63,200 Fixed 5.42 % Jan 2018 3. Avalon Watchung - Watchung, NJ 334 66,687 39,569 Fixed 3.37 % Apr 2019 Total Fund II 31.3 % 1,366 $ 215,946 $ 128,008 4.44 % U.S. Fund 1. Eaves Sunnyvale—Sunnyvale, CA (4) 192 $ 67,285 $ 32,839 Fixed 5.33 % Nov 2019 2. Avalon Studio 4121—Studio City, CA 149 56,911 29,474 Fixed 3.34 % Nov 2022 3. Avalon Marina Bay—Marina del Rey, CA (5) 205 77,146 51,300 Fixed 1.56 % Dec 2020 4. Avalon Venice on Rose—Venice, CA 70 57,236 29,734 Fixed 3.28 % Jun 2020 5. Avalon Station 250—Dedham, MA 285 96,310 57,433 Fixed 3.73 % Sep 2022 6. Avalon Grosvenor Tower—Bethesda, MD 237 79,748 44,514 Fixed 3.74 % Sep 2022 7. Avalon Kirkland at Carillon—Kirkland, WA 131 60,747 28,961 Fixed 3.75 % Feb 2019 Total U.S. Fund 28.6 % 1,269 $ 495,383 $ 274,255 3.43 % AC JV 1. Avalon North Point—Cambridge, MA (6) 426 $ 187,272 $ 111,653 Fixed 6.00 % Aug 2021 2. Avalon Woodland Park—Herndon, VA (6) 392 85,689 50,647 Fixed 6.00 % Aug 2021 3. Avalon North Point Lofts — Cambridge, MA 103 26,805 — N/A N/A N/A Total AC JV 20.0 % 921 $ 299,766 $ 162,300 6.00 % Other Operating Joint Ventures 1. MVP I, LLC 25.0 % 313 $ 124,931 $ 103,000 Fixed 3.24 % Jul 2025 2. Brandywine Apartments of Maryland, LLC 28.7 % 305 18,966 23,307 Fixed 3.40 % Jun 2028 Total Other Joint Ventures 618 $ 143,897 $ 126,307 3.27 % Total Unconsolidated Investments 4,174 $ 1,154,992 $ 690,870 4.19 % Debt(2) Company
Ownership
Percentage # of
Apartment
Homes Total
Capitalized
Cost(1) Amount Type Interest
Rate(3) Maturity
Date 320 $ 30,047 $ 22,169 Fixed 6.06 % Oct 2014 108 36,849 18,746 Fixed 6.13 % Sep 2016 85 25,014 11,762 Fixed 5.92 % Oct 2014 211 25,499 13,455 Fixed 5.12 % Mar 2015 15.2 % 724 $ 117,409 $ 66,132 5.86 % 220 $ 34,108 $ 21,515 Fixed 5.52 % Jun 2019 491 72,561 42,279 Fixed 5.26 % May 2017 348 45,655 26,809 Fixed 3.64 % Nov 2017 684 102,385 63,200 Fixed 5.42 % Jan 2018 628 100,511 59,100 Fixed 3.81 % Oct 2017 140 27,466 — N/A N/A N/A 776 91,498 52,167 Fixed 4.56 % Nov 2014 449 80,456 46,141 Fixed 4.68 % Feb 2018 210 51,535 30,875 Fixed 4.26 % Aug 2019 94 22,058 13,500 Fixed 3.90 % Sep 2019 676 126,803 71,423 Fixed 3.45 % Nov 2018 334 65,955 40,950 Fixed 3.37 % Apr 2019 31.3 % 5,050 $ 820,991 $ 467,959 4.34 % 192 $ 66,902 $ 33,888 Fixed 5.32 % Nov 2019 149 56,671 30,150 Fixed 3.34 % Nov 2022 205 68,347 — N/A N/A N/A 70 56,529 31,696 Fixed 3.31 % Jun 2020 252 45,761 25,000 Fixed 3.71 % Feb 2019 285 94,925 60,000 Fixed 3.73 % Sep 2022 235 76,793 46,500 Fixed 3.74 % Sep 2022 208 133,686 70,000 Fixed 4.25 % Jan 2019 130 49,467 30,615 Fixed 3.75 % Feb 2019 28.6 % 1,726 $ 649,081 $ 327,849 3.93 % 426 $ 186,444 $ 111,653 Fixed 6.00 % July 2021 392 84,776 50,647 Fixed 6.00 % July 2021 20.0 % 818 $ 271,220 $ 162,300 6.00 % 1,902 $ 434,173 $ 187,021 Fixed/Variable 4.37 % Dec 2014(12 ) 8.0 % 1,902 $ 434,173 $ 187,021 4.37 % 20.0 % 361 $ 138,386 $ 117,000 Variable 0.63 % Nov 2036 25.0 % 313 $ 124,337 $ 105,000 Fixed 6.02 % Dec 2015 28.7 % 305 $ 17,290 $ 24,839 Fixed 4.30 % Jun 2028 979 $ 280,013 $ 246,839 3.29 % 11,199 $ 2,572,887 $ 1,458,100 4.33 % (1)Represents total capitalized cost as of December 31, 2013.(2)We have not guaranteed the debt of unconsolidated investees and bear no responsibility for the repayment.(3)Represents weighted average rate on outstanding debt as of December 31, 2013.(4)Beginning in the third quarter of 2010, we consolidated the net assets and results of operations of The Springs.(5)Borrowing on this community is comprised of two mortgage loans.(6)This community is currently under redevelopment for which the venture is expecting to invest $32.9 million. Currently approximately one half of the apartment homes are not in service due to the redevelopment. This community is owned through a leasehold interest.(7)The debt secured by this community is a variable rate note converted to an effective fixed rate borrowing with an interest rate swap.(8)As discussed in this report, the venture commenced the construction of a third operating community in Cambridge, MA that, when completed, is expected to contain 103 apartments homes for a total capitalized cost of $28,000,000.(9)Borrowing is comprised of four mortgage loans made by the equity investors in the venture in proportion to their equity interests.(1) Represents total capitalized cost as of December 31, 2016. (2) We have not guaranteed the debt of unconsolidated investees and bear no responsibility for the repayment. (3) Represents weighted average rate on outstanding debt as of December 31, 2016. (4) (5) Borrowing on this community is a variable rate loan which has been converted to a fixed rate borrowing with an interest rate swap. (6) (10)After the venture makes certain threshold distributions to the third-party partner, we will generally receive 50% of all further distributions.(11)Our ownership interest of 8.0% is determined by our 40.0% ownership interest in the joint venture entity with Equity Residential which owns a 20% interest in this joint venture.(12)Maturity date represents the earliest of the maturity dates on the two loans and six draws on the credit facility relating to the six communities owned by SWIB. Maturity dates range from December 2014 to December 2029.6, "Investments5, “Investments in Real Estate Entities,"” of our Consolidated Financial Statements locatedincluded elsewhere in this report.•Subsidiaries of Fund I have four loans secured by individual assets with aggregate amounts outstanding of $66,132,000, including $22,169,000 for the mortgage note of a Fund I subsidiary that we purchased during 2010. Fund I subsidiary loans have varying maturity dates (and, in some cases, dates after which the loans can be prepaid without penalty), ranging from October 2014 to September 2016. These mortgage loans are secured by the underlying real estate. The mortgage loans are payable by the subsidiaries of Fund I with operating cash flow or disposition proceeds from the underlying real estate. Fund I,our unconsolidated real estate entities, as referenced in the table above, nor do we have any obligation to fund this debt should Fund Ithe unconsolidated real estate entities be unable to do so.In addition, as part of the formation of Fund I, we have provided to one of the limited partners a guarantee. The guarantee provides that if, upon final liquidation of Fund I, the total amount of all distributions to that partner during the life of Fund I (whether from operating cash flow or property sales) does not equal a minimum of the total capital contributions made by that partner, then we will pay the partner an amount equal to the shortfall, but in no event more than 10% of the total capital contributions made by the partner (maximum of approximately $7,500,000 as of December 31, 2013). As of December 31, 2013, the expected realizable value of the real estate assets owned by Fund I is considered adequate to cover such potential payment to that partner under the expected Fund I liquidation scenario. The estimated fair value of, and our obligation under, this guarantee both at inception and as of December 31, 2013, was not significant and therefore we have not recorded any obligation for this guarantee as of December 31, 2013.•As of December 31, 2013, subsidiaries of Fund II have 13 loans secured by individual assets with aggregate amounts outstanding of $467,959,000 with varying maturity dates (or dates after which the loans can be prepaid without penalty), ranging from November 2014 to September 2019. The mortgage loans are payable by the subsidiaries of Fund II with operating cash flow or disposition proceeds from the underlying real estate. We have not guaranteed the debt of Fund II, nor do we have any obligation to fund this debt should Fund II be unable to do so.In addition, as part of the formation of Fund II, we have provided to one of the limited partners a guarantee. The guarantee provides that if, upon final liquidation of Fund II, the total amount of all distributions to that partner during the life of Fund II (whether from operating cash flow or property sales) does not equal a minimum of the total capital contributions made by that partner, then we will pay the partner an amount equal to the shortfall, but in no event more than 10% of the total capital contributions made by the partner (maximum of approximately $8,910,000 as of December 31, 2013). As of December 31, 2013, the expected realizable value of the real estate assets owned by Fund II is considered adequate to cover such potential payment to that partner under the expected Fund II liquidation scenario. The estimated fair value of, and our obligation under, this guarantee, both at inception and as of December 31, 2013, was not significant and therefore we have not recorded any obligation for this guarantee as of December 31, 2013.•Each individual mortgage loan of Fund I or Fund II was made to a special purpose, single asset subsidiary of the Funds. Each mortgage loan provides that it is the obligation of the respective subsidiary only, except under exceptional circumstances (such as fraud or misapplication of funds) in which case the respective Fund could also have obligations with respect to the mortgage loan. In no event do the mortgage loans provide for recourse against investors in the Funds, including against us or our wholly-owned subsidiaries that invest in the Funds. A default by a Fund or a Fund subsidiary on any loan to it would not constitute a default under any of our loans or any loans of our other "non-Fund" subsidiaries or affiliates. If either the Funds or a subsidiary of one of the Funds were unable to meet its obligations under a loan, the value of our investment in that Fund would likely decline and we might also be more likely to be obligated under the guarantee we provided to one of the Fund partners in each Fund as described above. If a Fund subsidiary or a Fund were unable to meet its obligations under a loan, we and/or the other investors might evaluate whether it was in our respective interests to voluntarily support the Fund through additional equity contributions and/or take other actions to avoid a default under a loan or the consequences of a default (such as foreclosure of a Fund asset).either of the Fundsunconsolidated real estate entities were unable to meet their obligations under a loan, we cannot predict at this time whether we would provide any voluntary support, or take any other action, as any such action would depend on a variety of factors, including the amount of support required and the possibility that such support could enhance the return of either of the Fundsunconsolidated real estate entities and/or our returns by providing time for performance to improve.•CVP I, LLC,entityobligation of the respective subsidiary only, except under exceptional circumstances (such as fraud or misapplication of funds) in which case Fund II could also have obligations with respect to the mortgage loan. In no event do the mortgage loans provide for recourse against investors in Fund II, including against us or our wholly-owned subsidiaries that owns Avalon Chrystie Place I, has outstanding tax-exempt, variable rate bonds maturatinginvest in November 2036 in the amountFund II. A default by Fund II or a Fund II subsidiary on any loan to it would not constitute a default under any of $117,000,000, which have permanent credit enhancement. We have not guaranteed the debtour loans or any loans of CVP I, LLC, nor do we have any obligation to fund this debt should CVP I, LLC beour other non-Fund subsidiaries or affiliates. If Fund II or a subsidiary of Fund II were unable to do so.•MVP I, LLC, the entity that owns Avalon at Mission Bay North II, hasmeet its obligations under a loan, secured by the underlying real estate assetsvalue of the community for $105,000,000. The loan isour investment in Fund II would likely decline. If a fixed rate, interest-only note bearing interest at 6.02%, maturing in December 2015. We have not guaranteed the debt of MVP I, LLC, nor do we have any obligation to fund this debt should MVP I, LLC beFund II subsidiary or Fund II were unable to do so. In conjunction withmeet its obligations under a loan, we and/or the Archstone Acquisition,other investors might evaluate whether it was in our respective interests to voluntarily support Fund II through additional equity contributions and/or take other actions to avoid a default under a loan or the Company acquired interests in the following entities:•The U.S.consequences of a default (such as foreclosure of a Fund was formed in July 2011 and is fully invested. As of December 31, 2013, the U.S. Fund owns nine communities containing 1,726 apartment homes, one of which includes a marina containing 229 boat slips. Through subsidiaries we own the general partner of the U.S. Fund and hold a 28.6% interest in the U.S. Fund.
II asset).As of December 31, 2013, subsidiaries of the U.S. Fund have nine loans secured by individual assets with aggregate amounts outstanding of $327,849,000 with varying maturity dates, ranging from January 2019 to November 2022. The mortgage loans are payable by the subsidiaries of the U.S. Fund with operating cash flow or disposition proceeds from the underlying real estate. We have not guaranteed the debt of the U.S. Fund, nor do we have any obligation to fund this debt should the U.S. Fund be unable to do so.•The AC JV is a joint venture in which we acquired Archstone's 20% ownership interest. The AC JV was formed in 2011 and as of December 31, 2013 owned two operating apartment communities containing 818 apartment homes in Cambridge, MA and Herndon, VA. The AC JV partnership agreement contains provisions that require the Company to provide a ROFO to the AC JV in connection with additional opportunities to acquire or develop additional interests in multifamily real estate assets within a specified geographic radius of the existing assets, generallyone mile or less. During the year ended December 31, 2013, the Company provided the AC JV with the opportunity to acquire a parcel of land owned by the Company as required in the right of first offer provisions for the joint venture. The AC JV exercised its right to acquire the land parcel for development and commenced construction of an additional apartment community located in Cambridge, MA, which is expected to contain 103 apartment homes and be completed for a total capitalized cost of $28,000,000. The Company sold the parcel of land to the AC JV in exchange for a cash payment and a capital account credit, and is overseeing the development in exchange for a developer fee. The Company owns one additional land parcel for the development of 301 apartment homes, classified as a Development Right in Cambridge, MA, acquired as part of the Archstone Acquisition that is subject to ROFO restrictions. The ROFO restriction expires in 2019.As of December 31, 2013, subsidiaries of the AC JV have eight unsecured loans outstanding in the aggregate amount of $162,300,000 which mature in July 2021, and which were made by the investors in the venture, including us, in proportion to the investors' respective equity ownership interest. The unsecured loans are payable by the subsidiaries of the AC JV with operating cash flow from the venture. We have not guaranteed the debt of the AC JV, nor do we have any obligation to fund this debt should the AC JV be unable to do so.•Brandywine owns a 305 apartment home community located in Washington, DC. The community is managed by a third party. Brandywine is comprised of five members who hold various interests in the joint venture. In conjunction with the Archstone Acquisition, we acquired a 26.1% equity interest in the venture, and subsequently purchased an additional 2.6% interest, and as of December 31, 2013, hold a 28.7% equity interest in the venture.As of December 31, 2013, Brandywine has an outstanding $24,839,000 fixed rate mortgage loan that is payable by Brandywine. We have not guaranteed the debt of Brandywine, nor do we have any obligation to fund this debt should Brandywine be unable to do so.•Through subsidiaries, the Company and Equity Residential entered into three limited liability company agreements (collectively, the "Residual JV") through which the Company and Equity Residential acquired (i) certain assets of Archstone that the Company and Equity Residential plan to divest (to third parties or to the Company or Equity Residential) over time (the "Residual Assets"), and (ii) various liabilities of Archstone that the Company and Equity Residential agreed to assume in conjunction with the Archstone Acquisition (the "Residual Liabilities"). The Residual Assets include interests in apartment communities in Germany (including through a fund which Archstone managed); a 20.0% interest in SWIB, a joint venture which owns and manages six apartment communities with 1,902 apartment homes in the United States; two land parcels; and various licenses, insurance policies, contracts, office leases and other miscellaneous assets. The Residual Liabilities generally include most existing or future litigation and claims related to Archstone's operations for periods before the close of the Archstone Acquisition, except for (i) claims that principally relate to the physical condition of the assets acquired directly by the Company or Equity Residential, which generally remain the sole responsibility of the Company or Equity Residential, as applicable, and (ii) certain tax and other litigation between Archstone and various equity holders in Archstone related to periods before the close of the Archstone Acquisition, and claims which may arise due to changes in the capital structure of Archstone that occurred prior to closing, for which Lehman has agreed to indemnify the Company and Equity Residential. The Company and Equity Residential jointly control the Residual JV and the Company generally holds a 40% economic interest in the assets and liabilities of the Residual JV.As of December 31, 2013, SWIB has two loans and draws on a credit facility secured by individual assets with aggregate amounts outstanding of $187,021,000 with varying maturity dates, ranging from December 2014 to December 2029. We have not guaranteed the debt of SWIB, nor do we have any obligation to fund this debt should SWIB be unable to do so.20132016 (dollars in thousands): Payments due by period Total 1-3 Years 3-5 Years Debt Obligations $ 7,076,758 $ 728,030 $ 754,791 $ 1,353,748 $ 4,240,189 Interest on Debt Obligations 1,879,345 252,880 417,256 301,904 907,305 Capital Lease Obligations (1) (2) 68,237 18,874 2,148 2,157 45,058 Operating Lease Obligations (1) 1,314,593 22,818 46,797 41,021 1,203,957 $ 10,338,933 $ 1,022,602 $ 1,220,992 $ 1,698,830 $ 6,396,509 (1) Includes land leases expiring between October 2026 and March 2142. Amounts do not include any adjustment for purchase options available under the land leases. (2) Aggregate capital lease payments include $27,374 in interest costs. Payments due by period Total Less than 1
Year 1-3 Years 3-5 Years More than 5
Years $ 6,029,998 $ 166,986 $ 903,972 $ 1,075,354 $ 3,883,686 2,179,768 259,520 484,354 359,229 1,076,665 64,461 1,863 20,968 1,696 39,934 1,345,871 19,801 39,185 38,191 1,248,694 $ 9,620,098 $ 448,170 $ 1,448,479 $ 1,474,470 $ 6,248,979 (1)Includes land leases expiring between October 2026 and March 2142. Amounts do not include any adjustment for purchase options available under the land leases."forward-looking statements"“forward-looking statements” as that term is defined under the Private Securities"believe," "expect," "anticipate," "intend," "estimate," "assume," "project," "plan," "may," "shall," "will"“believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “project,” “plan,” “may,” “shall,” “will” and other similar expressions in this Form 10-K, that predict or indicate future events and trends and that do not report historical matters. These statements include, among other things, statements regarding our intent, belief or expectations with respect to:••••••••••RevueRevenue Code;••••thecurrent economic conditions; and•operations.1a. "Risk Factors,"1A. “Risk Factors” in this report for further discussion of risks associated with forward-looking statements.•••••••• Fund I, Fund II, the U.S. Fund, the AC JV or the REIT vehicles that are used with each of them; and•composition."Organization and“Organization, Basis of Presentation"Presentation and Significant Accounting Policies,” of our Consolidated Financial Statements.joint venture entities the company formed with Equity Residential as part of the Archstone Acquisition,Residual JV, at December 31, 2013,2016, our assets would have increased by $1,925,274,000$827,020,000 and our liabilities would have increased by $1,280,744,000.$706,110,000. We would be required to consolidate those joint ventures currently not consolidated for financial reporting purposes if the facts and circumstances changed, including but not limited to the following reasons, none of which are currently expected to occur:••project specificproject-specific financing, as well as for general corporate financing to the extent of our aggregate investment in the projects. Indirect project costs, which include personnel and office and administrative costs that are clearly associated with our development and redevelopment efforts, are also capitalized. Capitalized indirect costs associated with our development and redevelopment activities are comprised primarily of compensation related costs for associates dedicated to our development and redevelopment efforts and total $38,128,000, $26,513,000,$45,201,000, $43,943,000 and $23,984,000$37,433,000 for 2013, 20122016, 2015 and 2011,2014, respectively. The estimation of the direct and indirect costs to capitalize as part of our development and redevelopment activities requires judgment and, as such, we believe cost capitalization to be a critical accounting estimate.20132016 our development activities decreased by 10%, and there were no corresponding decrease in our indirect project costs, our costs charged to expense would have increased by $3,813,000.20132016 would have decreased by $3,159,000. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we assess its recoverability by comparing the carrying amount of the property to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent theBased on periodic tests of recoverability of long-lived assets, for the years ended December 31, 2013, 2012 and 2011, we did not recognize any impairment losses for wholly-owned operating real estate assets. expensed costs related to abandoned pursuits, which includes the abandonment of Development Rights and disposition pursuits, in the amounts of $998,000 in 2013, $1,757,000 in 2012 and $1,957,000 in 2011. These costs are included in operating expenses, excluding property taxes on the accompanying Consolidated Statements of Operations and Other Comprehensive Income. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future years. We also assess land held for development for impairment if our intent changes with respect to the development of the land. We did not recognize any impairment charges for land holdings in 2013 or 2012. During 2011, we concluded that we would pursue the sale of two land parcels where the carrying values of the two land parcels were not fully recoverable. As a result, we recognized an aggregate charge of $12,097,000 for the impairment of these land parcels. We had previously recognized an impairment loss of $9,952,000 in 2008 when we determined that we no longer intended to pursue development of the assets. Our change in intent to pursue disposition of these assets rather than holding for investment triggered the determination that a further impairment of the basis of the land parcels existed. We looked to a combination of internal models and third-party pricing estimates to determine the fair values for these impaired land parcels. Considering our knowledge of multifamily residential development, the fair values of parcels zoned for multifamily development were generated using an internal model. Land parcels zoned for other purposes were valued using third-party estimates of fair value. For the internally generated fair values, we used a discounted cash flow analysis on the expected cash flows for a multifamily rental community. The cash flow analysis incorporated assumptions that market participants would make, including applying discount factors to the estimated future cash flows of the underlying asset, as well as potential disposition proceeds. The third-party values incorporated the use of estimated rates of return, investment time horizons and sales prices for land parcels considered to be market comparables, adjusted for known differences in critical areas including the existing entitlements (such as zoning and state of infrastructure readiness). Both valuation methods included significant other unobservable inputs and are therefore classified as Level 3 prices in the fair value hierarchy. We also evaluate our unconsolidated investments for impairment, considering both the carrying value of the investment, estimated to be the expected proceeds that it would receive if the entity were dissolved and the net assets were liquidated, as well as our proportionate share of any impairment of assets held by unconsolidated investments. During 2011, we concluded that becausemarket for for-sale housing development had not improved as expected,abandonment of Development Rights and disposition pursuits. These costs can vary greatly, and the investmentcosts incurred in an unconsolidated joint venture was impaired and that impairment was other than temporary. As a result, we recognized a charge of $1,955,000 for the impairment of the investmentany given period may be significantly different in the unconsolidated joint venture. There were no impairment losses recognized by any of our investments in unconsolidated entities during 2013 or 2012.1a., "Risk Factors"1A. “Risk Factors” in this Form 10-K.2013,2016, our net income would have decreased by approximately $141,963,000. We accountourthe acquisition of investments in real estate. Prior to adoption of ASU 2017-01 on October 1, 2016, we accounted for acquisitions of investments in real estate in accordance with the authoritative guidance for the initial measurement, which requiresrequired the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree to be recognized at fair value. Typical assets and liabilities acquired include land, building,buildings, furniture, fixtures and equipment and identified intangible assets and liabilities, consisting of the value of above-belowabove or below market leases and in-place leases. In making estimates of fair values for purposes of allocating purchase price, we utilizeutilized various sources, including our own analysis of recently acquired and existing comparable properties in our portfolio and other market data.Federal Income Tax Changes and Updates Consideration for Incorporation in Existing Registration Statements The following discussion updates the disclosures under "Federal Income Tax Considerations and Consequences of Your Investment"acquisitions is typically in the prospectus dated February 27, 2012 containedform of cash unless otherwise disclosed. We expensed all costs incurred related to acquisitions of operating communities. Subsequent to adoption of ASU 2017-01, we assess each acquisition of an operating community to determine if it meets the definition of a business or if it qualifies as an asset acquisition. We expect that acquisitions of individual operating communities will generally be viewed as asset acquisitions, and result in our Registration Statement on Form S-3 filed with the SEC on February 27, 2012capitalization of acquisition costs, and in our other registration statements into which this Annual Report on Form 10-K is incorporated by reference.Additional Disclosure Relatingthe allocation of purchase price to Taxation of AvalonBay as a REIT The section captioned "Taxation of AvalonBay as a REIT—Ownership of Partnership Interests by a REIT" is replaced in its entirety by the following: Ownership of Partnership Interests by a REIT. A REIT that is a partner in a partnership (or a member in a limited liability company or other entity that is treated as a partnership for U.S. federal income tax purposes) will be deemed to own its proportionate share of the assets of the partnership and will be deemed to earn its proportionate share of the partnership's income. The assets and gross income of the partnership retain the same character in the hands of the REIT for purposes of the asset and gross income tests applicable to REITs as described below. Thus, our proportionate share of the assets and items of gross income of any entity taxable as a partnership for U.S. federal income tax purposes in which we hold an interest will be treated as our assetsacquired and liabilities and our items of income for purposes of applying the requirements described in this prospectus. The assets, liabilities and items of income of any partnership in which we own an interest include such entity's share of the assets and liabilities and items of income with respect to any partnership in which it holds an interest. The assets of one of our joint ventures with Equity Residential include indirect interests in partnerships controlled by Equity Residential, and thus for purposes of our compliance with the REIT asset and gross income requirements we will be treated as owning our proportionate share of the assets and as receiving our proportionate share of gross income of the Equity Residential partnerships in which the joint venture has an interest. Although Equity Residential has agreed to operate thosepartnerships in compliance with the REIT requirements, we cannot assure you that such Equity Residential partnerships will be operated in compliance with the REIT requirements. Failure by those partnerships to comply with the REIT requirements could potentially jeopardize our REIT status. The discussion above does not apply to our interest in any partnership or other unincorporated entity treated as a corporation for U.S. federal income tax purposes. If an entity that we treated as a partnership for U.S. federal income tax purposes and the REIT requirements were determined instead to be taxed as a corporation, we could fail one or more of the REIT income and asset tests described below. Generally, a domestic unincorporated entity with two or more owners is treated as a partnership for U.S. federal income tax purposes unless it affirmatively elects to be treated as a corporation. However, certain "publicly traded partnerships" are treated as corporations for U.S. federal income tax purposes. A "publicly traded partnership" is any partnership (i) the interests in which are traded on an established securities market or (ii) the interests in which are readily tradable on a "secondary market or the substantial equivalent thereof." However, under the relevant Treasury Regulations, interests in a partnership will not be considered readily tradable on a secondary market or on the substantial equivalent of a secondary market if the partnership qualifies for specified "safe harbors," which areassumed based on the specific facts and circumstances relating to the partnership. Moreover, certain publicly traded partnerships will avoid being treated as a corporation for U.S. federal income tax purposes if the partnership derives at least 90% of its gross income from certain specified sources of "qualifying income." We do not believe that any of our direct or indirect subsidiary partnerships should be treated as corporations under the publicly traded partnership rules. However, a contrary determination could prevent us from qualifying as a REIT. The fifth paragraph in the section captioned "Taxation of AvalonBay as a REIT—Income Tests Applicable to REITs" is replaced with the following: Taxable dividends from a taxable REIT subsidiary and gain from a sale or other taxable disposition of interests in a taxable REIT subsidiary will qualify under the 95% income test, but not the 75% income test. Our need to satisfy the 75% income test may adversely affect our ability to distribute earnings from, or dispose of our investment in, a taxable REIT subsidiary. The following paragraph is added at the endrelative fair value of the section captioned "Taxation of AvalonBay as a REIT—Asset Tests Applicable to REITs": Shares in other qualifying REITs are treated as "real estate assets" for purposes of the REITrespective assets tests, while shares of our taxable REIT subsidiaries do not qualify as "real estate assets." The last sentence in the section captioned "Other U.S. Federal Income Tax Withholding and Reporting Requirements" is replaced with the following: The most recent guidance from the IRS delays withholding under FATCA on withholdable payments to foreign financial institutions and non-financial foreign entities until after December 31, 2016 with respect to gross proceeds of a disposition of property that can produce U.S. source interest or dividends and certain other sources of income and after June 30, 2014 with respect to other withholdable payments. The section captioned "Expiration of Certain Reduced Tax Provisions" is replaced with the following:Federal Income Tax Rates Update As of January 1, 2013, (1) the maximum tax rate on "qualified dividend income" for non-corporate taxpayers is 20%, (2) the maximum tax rate on long-term capital gain for non-corporate taxpayers is 20%, (3) the highest marginal non-corporate income tax rate is 39.6%, and (4) the backup withholding rate remains at 28%. Thus, references in the prospectus to "15% rate gain distributions" shall be replaced with references to "20% rate gain distributions," which are taxed to non-corporate U.S. shareholders at the new maximum 20% long-term capital gains rate.7a.7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK20132016 and 2012,2015, we had $1,011,609,000$1,208,262,000 and $476,935,000,$1,345,182,000, respectively, in variable rate debt outstanding, with no amounts outstanding under our Credit Facility. If interest rates on the variable rate debt had been 100 basis points higher throughout 20132016 and 2012,2015, our annual interest costs would have increased by approximately $9,680,000$12,901,000 and $3,969,000,$14,492,000, respectively, based on balances outstanding during the applicable years. In conjunction with the Archstone Acquisition, we assumed approximately $2,034,482,000 secured fixed and floating rate indebtedness, which impacted the Company's overall exposure to interest rate risk. In May 2013, a $215,000,000 forward interest rate protection agreement matured, resulting in a payment to the counterparty of $51,000,000, the fair value at time of settlement.and the current valuation of the position is a net liability for us, we do not believe there is exposure at this time to a default by a counterparty provider.carrying valueprincipal amount outstanding of $6,029,998,000$7,076,758,000 at December 31, 20132016 had an estimated aggregate fair value of $6,294,850,000$6,963,089,000 at December 31, 2013.2016. Contractual fixed rate debt represented $5,255,089,000$5,926,025,000 of the fair value at December 31, 2013.2016. If interest rates had been 100 basis points higher as of December 31, 2013,2016, the fair value of this fixed rate debt would have decreased by approximately $321,709,000. None.9a.9A. CONTROLS AND PROCEDURES(a)(a) Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. We continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. (b)Management's Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2013 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2013.(b) Management's Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2016. 20132016 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.(c)Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the fourth quarter of the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.(c) Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the fourth quarter of the period covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 9b.9B. OTHER INFORMATION None.21, 2014.21, 2014.21, 2014,18, 2017, to the extent not set forth below."2009 Plan"“2009 Plan”) and the 1996 Non-Qualified Employee Stock Purchase Plan (the "ESPP"“ESPP”), pursuant to which common stock or other equity awards may be issued or granted to eligible persons."1994 Plan"“1994 Plan”) under which awards were previously made, and the ESPP as of December 31, 2013: (a) (b) (c) Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights Weighted-average
exercise price of
outstanding options,
warrants and rights Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)) 1,545,891 (2) 112.32 (3) 2,341,585 — n/a 724,675 1,545,891 112.32 (3) 3,066,260
2016:(1)Consists of the 2009 Plan.(2)Includes 87,856 deferred units granted under the 2009 Plan and the 1994 Plan, which, subject to vesting requirements, will convert in the future to common stock on a one-for-one basis. Also includes the maximum number of shares that may be issued upon settlement of outstanding Performance Awards awarded to officers and maturing on December 31, 2014 and December 31, 2015, and the number of shares issuable based on actual performance for Performance Awards awarded to officers maturing on December 31, 2013. Does not include 182,083 shares of restricted stock that are outstanding and that are already reflected in the Company's outstanding shares.(3)Excludes deferred units granted under the 2009 Plan and the 1994 Plan, which, subject to vesting requirements, will convert in the future to common stock on a one-for-one basis.(4)Consists of the ESPP. (a) (b) (c) Plan category Equity compensation plans approved by security holders (1) 717,741 (2) $ 119.03 (3) 878,622 Equity compensation plans not approved by security holders (4) — N/A 692,812 Total 717,741 $ 119.03 (3) 1,571,434 (1) Consists of the 2009 Plan and the 1994 Plan. (2) Includes 15,541 deferred units granted under the 2009 Plan and the 1994 Plan, which, subject to vesting requirements, will convert in the future to common stock on a one-for-one basis. Also includes the maximum number of shares that may be issued upon settlement of outstanding Performance Awards awarded to officers and maturing on December 31, 2016, 2017 and 2018. Does not include 313,403 shares of restricted stock that are outstanding and that are already reflected in the Company's outstanding shares. (3) Excludes performance awards and deferred units granted under the 2009 Plan and the 1994 Plan, which, subject to vesting requirements, will convert in the future to common stock on a one-for-one basis. (4) Consists of the ESPP. "Stock-Based“Stock-Based Compensation Plans,"” of ourthe Consolidated Financial Statements includedset forth in Item 8 of this report.21, 2014.21, 2014. F-1 F-3 F-4 F-5 F-6 F-9 F-47 Exhibit No. Description 3(i).1 — Articles of Amendment and Restatement of Articles of Incorporation of the Company, dated as of June 4, 1998. (Incorporated by reference to Exhibit 3(i) to Form 10-K of the Company filed March 1, 2007.)
3(i).2
—
Articles of Amendment, dated as of October 2, 1998. (Incorporated by reference to Exhibit 3(i).2 to Form 10-K of the Company filed March 1, 2007.)
3(i).3
—
Articles of Amendment, dated as of May 22, 2013. (Incorporated by reference to Exhibit 3(i).3 to Form 8-K of the Company filed on May 22, 2013.)
3(ii).1
—
Amended and Restated Bylaws of the Company, as adopted by the Board of Directors on May 21, 2009.November 12, 2015. (Incorporated by reference to Exhibit 3(ii).13(i).3 to Form 10-Q10-K of the Company filed November 2, 2012.on February 26, 2016.)
3(ii).2
—
Amendment to Amended and Restated Bylaws of AvalonBay Communities, Inc., dated February 10, 2010. (Incorporated by reference to Exhibit 3(ii).2 to Form 10-Q of the Company, filed November 2, 2012.)3(ii).3—Amendment to Amended and Restated Bylawsas adopted by the Board of AvalonBay Communities, Inc., dated September 19, 2012.Directors on February 16, 2017. (Incorporated by reference to Exhibit 3.2 to Form 8-K of the Company filed September 20, 2012.on February 21, 2017.)
4.1
—
Indenture for Senior Debt Securities, dated as of January 16, 1998, between the Company and State Street Bank and Trust Company, as Trustee. (Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
4.2
—
First Supplemental Indenture, dated as of January 20, 1998, between the Company and State Street Bank and Trust Company as Trustee. (Incorporated by reference to Exhibit 4.2 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
4.3
—
Second Supplemental Indenture, dated as of July 7, 1998, between the Company and State Street Bank and Trust Company as Trustee. (Incorporated by reference to Exhibit 4.3 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
4.4
—
Amended and Restated Third Supplemental Indenture, dated as of July 10, 2000 between the Company and State Street Bank and Trust Company as Trustee. (Incorporated by reference to Exhibit 4.4 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
4.5
—
Fourth Supplemental Indenture, dated as of September 18, 2006, between the Company and U.S. Bank National Association as Trustee. (Incorporated by reference to Exhibit 4.5 to Registration Statement on Form S-3 of the Company (File No. 333-139839), filed January 8, 2007.)
4.6
—__
Fifth Supplemental Indenture, dated as of November 21, 2014, between the Company and the Bank of New York Mellon, as Trustee. (Incorporated by reference to Exhibit 4.1 to Form 8-K of the Company filed on November 21, 2014.)4.7 — Dividend Reinvestment and Stock Purchase Plan of the Company. (Incorporated by reference to Exhibit 8.1 to Registration Statement on Form S-3 of the Company (File No. 333-87063), filed September 14, 1999.) 4.74.8
—
Amendment to the Company's Dividend Reinvestment and Stock Purchase Plan filed on December 17, 1999. (Incorporated by reference to the Prospectus Supplement filed pursuant to Rule 424(b)(2) of the Securities Act of 1933 on December 17, 1999.)4.84.9 — Amendment to the Company's Dividend Reinvestment and Stock Purchase Plan filed on March 26, 2004. (Incorporated by reference to the Prospectus Supplement filed pursuant to Rule 424(b)(3) of the Securities Act of 1933 on March 26, 2004.) 4.94.10
—
Amendment to the Company's Dividend Reinvestment and Stock Purchase Plan filed on May 15, 2006. (Incorporated by reference to the Prospectus Supplement filed pursuant to Rule 424(b)(3) of the Securities Act of 1933 on May 15, 2006.)10.1—Amended and Restated Limited Partnership Agreement of AvalonBay Value Added Fund, L.P., dated as of March 16, 2005. (Incorporated by reference to Exhibit 10.2 to Form 10-K of the Company filed February 23, 2011.)10.210.1
—
Master Cross-Collateralization Agreement, dated as of April 24, 2009, between Deutsche Bank Berkshire Mortgage, Inc., parties identified on Exhibit A-Schedule 1 attached thereto, and Shady Grove Financing, LLC. (Incorporated by reference to Exhibit 10.2 to Form 10-Q of the Company filed August 10, 2009.)10.310.2
—
Master Substitution Agreement, dated April 23, 2009, between Deutsche Bank Berkshire Mortgage, Inc., AvalonBay Traville, LLC and the entities identified on Schedule B attached thereto. (Incorporated by reference to Exhibit 10.3 to Form 10-Q of the Company filed August 10, 2009.)10.410.3
—
Form of Multifamily Note, dated April 24, 2009. (Used in connection with the properties identified on Exhibit B to the Master Cross-Collateralization Agreement dated April 24, 2009.) (Incorporated by reference to Exhibit 10.4 to Form 10-Q of the Company filed August 10, 2009.)10.510.4
—
Form of Guaranty, dated April 24, 2009. (Used in connection with the properties identified on Exhibit B to the Master Cross-Collateralization Agreement dated April 24, 2009.) (Incorporated by reference to Exhibit 10.5 to Form 10-Q of the Company filed August 10, 2009.)10.6+10.5+
—
Endorsement Split Dollar Agreements and Amendments thereto with Messrs. Blair, Naughton Sargeant, and Horey. (Incorporated by reference to Exhibit 10.8 to Form 10-K of the Company filed February 23, 2011.)10.7+10.6+
—
Form of Amendment to Endorsement Split Dollar Agreement with Messrs. Blair, Naughton Sargeant, and Horey. (Incorporated by reference to Exhibit 10.4 to Form 10-K of the Company filed March 2, 2009.)10.8+10.7+
—
Employment Agreement between the Company and Timothy J. Naughton, dated as of December 16, 2011. (Incorporated by reference to Exhibit 10.1 to Form 8-K of the Company filed December 21, 2011.)10.9+—Employment Agreement between the Company and Thomas J. Sargeant dated as of December 16, 2011. (Incorporated by reference to Exhibit 10.2 to Form 8-K of the Company filed December 21, 2011.)10.10+—Employment Agreement between the Company and Leo S. Horey dated as of December 16, 2011. (Incorporated by reference to Exhibit 10.3 to Form 8-K of the Company filed December 21, 2011.)10.11+—
AvalonBay Communities, Inc. Amended and Restated 2009 Stock Option and Incentive Plan. (Incorporated by reference to Exhibit 10.199.1 to Form 8-K of the Company filed May 28, 2009.February 16, 2016.)10.12+10.8+ — Form of Incentive Stock Option Agreement (2009 Stock Option and Incentive Plan). (Incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-8 of the Company filed May 22, 2009.) 10.13+10.9+
—
Form of Non-Qualified Stock Option Agreement (2009 Stock Option and Incentive Plan). (Incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-8 of the Company filed May 22, 2009.)10.14+10.10+
—
Form of Stock Grant and Restricted Stock Agreement (2009 Stock Option and Incentive Plan). (Incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-8 of the Company filed May 22, 2009.)10.15+10.11+
—
Form of Stock Grant and Restricted Stock Agreement adopted February 11, 2016 (2009 Stock Option and Incentive Plan). (Incorporated by reference to Exhibit 99.3 to Form 8-K of the Company filed February 16, 2016.)10.12+ — Form of Director Restricted Stock Agreement (2009 Stock Option and Incentive Plan). (Incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-8 of the Company filed May 22, 2009.) 10.16+10.13+
—
Form of Director Restricted Unit Agreement (2009 Stock Option and Incentive Plan). (Incorporated by reference to Exhibit 10.5 to Registration Statement on Form S-8 of the Company filed May 22, 2009.)10.17+10.14+
—
1996 Non-Qualified Employee Stock Purchase Plan, dated June 26, 1997, as amended and restated. (Incorporated by reference to Exhibit 99.1 to Post-effective Amendment No. 1 to Registration Statement on Form S-8 of the Company (File No. 333-16837), filed June 26, 1997.)10.18+—1996 Non-Qualified Employee Stock Purchase Plan—Plan Information Statement dated June 26, 1997. (Incorporated by reference to Exhibit 99.2 to Registration Statement on Form S-8 of the Company (File No. 333-16837), filed November 26, 1996.)10.19+—
Form of Indemnity Agreement between the Company and its Directors. (Incorporated by reference to Exhibit 10.110.19 to Form 10-Q10-K of the Company filed August 2, 2013.February 19, 2015.)10.20+10.15+
—
The Company's Officer Severance Plan, as amended and restated on November 9, 2011.February 11, 2016. (Incorporated by reference to Exhibit 10.199.2 to Form 8-K of the Company filed November 15, 2011.February 16, 2016.)10.21+10.16+
—
AvalonBay Communities, Inc. 1994 Stock Incentive Plan, as amended and restated in full on December 8, 2004. (Incorporated by reference to Exhibit 10.21 to Form 10-K of the Company filed March 2, 2009.)10.22+10.17+
—
Amendment dated February 9, 2006, to the AvalonBay Communities, Inc. 1994 Stock Incentive Plan, as amended and restated on December 8, 2004. (Incorporated by reference to Exhibit 10.23 to Form 10-K of the Company filed February 22, 2013.)10.23+10.18+
—
Amendment, dated December 6, 2006, to the AvalonBay Communities, Inc. 1994 Stock Incentive Plan, as amended and restated on December 8, 2004. (Incorporated by reference to Exhibit 10.24 to Form 10-K of the Company filed February 22, 2013.)10.24+—10.19+ — Amendment, dated September 20, 2007, to the AvalonBay Communities, Inc. 1994 Stock Incentive Plan, as amended and restated on December 8, 2004. (Incorporated by reference to Exhibit 10.25 to Form 10-K of the Company filed February 22, 2013.) 10.25+10.20+
—
Form of AvalonBay Communities, Inc. Non-Qualified Stock Option Agreement (1994 Stock Incentive Plan, as Amended and Restated). (Incorporated by reference to Exhibit 10.26 to Form 10-K of the Company filed February 22, 2013.)10.26+10.21+ — Form of AvalonBay Communities, Inc. Incentive Stock Option Agreement (1994 Stock Incentive Plan, as Amended and Restated.)Restated). (Incorporated by reference to Exhibit 10.27 to Form 10-K of the Company filed February 22, 2013.)10.27+10.22+
—
Form of AvalonBay Communities, Inc. Employee Stock Grant and Restricted Stock Agreement (1994 Stock Incentive Plan, as Amended and Restated.)Restated). (Incorporated by reference to Exhibit 10.33 to Form 10-K of the Company filed March 2, 2009.)10.28+10.23+
—
Form of AvalonBay Communities, Inc. Director Restricted Unit Agreement (1994 Stock Incentive Plan, as Amended and Restated). (Incorporated by reference to Exhibit 10.29 to Form 10-K of the Company filed February 22, 2013.)10.29+10.24+
—
Form of AvalonBay Communities, Inc. Director Restricted Stock Agreement (1994 Stock Incentive Plan, as Amended and Restated). (Incorporated by reference to Exhibit 10.30 to Form 10-K of the Company filed February 22, 2013.)10.3110.25
—
ThirdFourth Amended and Restated Revolving Loan Agreement, dated as of September 29, 2011, withJanuary 14, 2016, among the Company, as Borrower, Bank of America, N.A., as administrative agent, swing lender,an issuing bank and a bank, JPMorgan Chase Bank, N.A., as an issuing bank, a bank and asa syndication agent, Deutsche Bank Trust Company Americas, Morgan Stanley Bank and Wells Fargo Bank, N.A., each as an issuing bank, a bank and as documentationa syndication agent, Barclays Bank PLC as a bankJ.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and as co-documentation agent, UBSWells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers, and a co-documentation agent, The Banksyndicate of New York Mellon, BBVA Compass Bank, PNC Bank, National Association, and Suntrust Bank, eachother financial institutions, serving as a bank and as a managing agent, Branch Banking and Trust Company, Bank of Tokyo Mitsubishi UFJ, Ltd., and Citizens Bank, each as a bank and as a co-agent, and the other bank parties signatory theretobanks. (Incorporated by reference to Exhibit 10.11.1 to Form 10-Q8-K/A of the Company filed November 7, 2011.on January 15, 2016.)10.3210.26+
—
Amendment No. 1 to Third Amended and Restated Revolving Loan Agreement, dated as of December 20, 2012, among the Company, as Borrower, the banks signatory thereto, each as a Bank, and Bank of America, N.A., as Administrative Agent. (Incorporated by reference to Exhibit 10.1 to Form 8-K of the Company, filed December 21, 2012.)10.33+—
Rules and Procedures for Non-Employee Directors' Deferred Compensation Program, as adopted on November 20, 2006, as amended on December 11, 2008, February 10, 2010 and November 10, 2010. (Incorporated by reference to Exhibit 10.49 to Form 10-K of the Company filed February 23, 2011.)10.34+10.27+
—
Amended and Restated AvalonBay Communities, Inc. Deferred Compensation Plan, effective as of January 1, 2011. (Incorporated by reference to Exhibit 10.1 to Form 10-Q of the Company filed August 6, 2010.)10.3510.28+
—
Asset Purchase Agreement, dated November 26, 2012, byFirst Amendment to Amended and amongRestated AvalonBay Communities, Inc., Equity Residential and its operating partnership, ERP Operating Partnership, LP, Lehman Brothers Holdings, Inc., and Archstone Enterprise LP. (Incorporated by reference to Exhibit 2.1 to Form 8-K Deferred Compensation Plan, effective as of the Company filed November 26, 2012.7, 2011. (Filed herewith.)10.36+10.29+
—
Form ofSecond Amendment to Amended and Restated AvalonBay Communities, Inc. 2008 PerformanceDeferred Compensation Plan, Deferred Stock Award Agreement. (Incorporated by reference to Exhibit 10.1 to Form 8-Keffective as of the Company filed May 22, 2008.November 15, 2012. (Filed herewith.)10.37+10.30+
—
Form of AvalonBay Communities, Inc. Award Terms of Performance-Based Restricted Stock Units. (Incorporated by reference to Exhibit 10.1 to Form 10-Q filed May 10, 2013.)10.3810.31+ — Shareholders Agreement, dated February 27, 2013, by and among the Company, Archstone Enterprise LP and Lehman Brothers HoldingsForm of AvalonBay Communities, Inc. Award Terms of Performance-Based Restricted Stock Units. (Incorporated by Referencereference to Exhibit 10.210.1 to Form 10-Q filed May 4, 2015.)10.32+ — Form of AvalonBay Communities, Inc. Award Terms of Performance-Based Restricted Stock Units, approved February 11, 2016. (Incorporated by reference to Exhibit 99.4 to Form 8-K of the Company filed March 5, 2013.February 16, 2016.)10.3910.33
—
Archstone Residual JV, LLC Limited Liability Company Agreement. (Incorporated by reference to Exhibit 10.3 to Form 8-K of the Company filed March 5, 2013.)10.4010.34
—
Archstone Parallel Residual JV, LLC Limited Liability Company Agreement. (Incorporated by reference to Exhibit 10.4 to Form 8-K of the Company filed March 5, 2013.)10.41—10.35 — Archstone Parallel Residual JV 2, LLC Limited Liability Company Agreement. (Incorporated by reference to Exhibit 10.5 to Form 8-K of the Company filed March 5, 2013.) 10.4210.36
—
Legacy Holdings JV, LLC Limited Liability Company Agreement. (Incorporated by reference to Exhibit 10.6 to Form 8-K of the Company filed March 5, 2013.)10.4310.37
—
Master Credit Facility Agreement, dated February 27, 2013, by and among Federal National Mortgage Association and the parties named therein. (Incorporated by reference to Exhibit 10.7 to Form 8-K of the Company filed March 5, 2013.)12.110.38
—
Term Loan Agreement, dated March 31, 2014, among the Company, as Borrower, Wells Fargo Bank, National Association, as Administrative Agent and a bank, PNC Bank, National Association, as Syndication Agent and a bank, and a syndicate of other financial institutions, serving as banks. (Incorporated by reference to Exhibit 10.1 to Form 8-K of the Company filed April 2, 2014.)12.1 — Statements re: Computation of Ratios. (Filed herewith.)
21.1
—
Schedule of Subsidiaries of the Company. (Filed herewith.)
23.1
—
Consent of Ernst & Young LLP. (Filed herewith.)
31.1
—
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer). (Filed herewith.)
31.2
—
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer). (Filed herewith.)
32
—
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). (Furnished herewith.)
101
—
XBRL (Extensible Business Reporting Language). The following materials from AvalonBay Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013,2016, formatted in XBRL: (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of cash flows, (iv) consolidated changes in stockholders' equity, and (v) notes to consolidated financial statements.+Management contract or compensatory plan or arrangement required to be filed or incorporated by reference as an exhibit to this Form 10-K pursuant to Item 15(a)(3) of Form 10-K.+ Management contract or compensatory plan or arrangement required to be filed or incorporated by reference as an exhibit to this Form 10-K pursuant to Item 15(a)(3) of Form 10-K. AvalonBay Communities, Inc.
Date: February 27, 201424, 2017
By:
/s/ TIMOTHY J. NAUGHTONTimothy J. Naughton, Director, Chairman, Chief Executive Officer and President (Principal Executive Officer) Date: February 27, 201424, 2017 By: /s/ TIMOTHY J. NAUGHTON Timothy J. Naughton, Director, Chairman, Chief Executive Officer and President (Principal Executive Officer)
Date: February 27, 201424, 2017
By:
/s/ THOMAS J. SARGEANTThomas J. Sargeant,KEVIN P. O’SHEAKevin P. O’Shea, Chief Financial Officer
(Principal Financial Officer)
Date: February 27, 201424, 2017
By:
/s/ KERI A. SHEA
Date: February 27, 201424, 2017
By:
/s/ GLYN F. AEPPELGlyn F. Aeppel, Director
Date: February 27, 201424, 2017
By:
/s/ TERRY S. BROWNTerry S. Brown, Director Date: February 24, 2017 By: /s/ ALAN B. BUCKELEW Alan B. Buckelew, Director
Date: February 27, 201424, 2017
By:
/s/ BRUCE A. CHOATEBruce A. Choate, DirectorRONALD L. HAVNER, JR.Ronald L. Havner, Jr., Director Date: February 27, 201424, 2017
By:
/s/ JOHNRICHARD J. HEALY, JR.John J. Healy, Jr., DirectorLIEBRichard J. Lieb, Director Date: February 27, 201424, 2017
By:
/s/ LANCE R. PRIMISLance R. Primis, Director
Date: February 27, 201424, 2017
By:
/s/ PETER S. RUMMELLPeter S. Rummell, Director
Date: February 27, 201424, 2017
By:
/s/ H. JAY SARLESH. Jay Sarles, Director
Date: February 27, 201424, 2017
By:
/s/ SUSAN SWANEZYSusan Swanezy, Director Date: February 24, 2017 By: /s/ W. EDWARD WALTER W. Edward Walter, Director
AvalonBay Communities, Inc.:20132016 and 2012,2015, and the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2013.2016. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.20132016 and 2012,2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013,2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects, the information set forth therein.'s’s internal control over financial reporting as of December 31, 2013,2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992(2013 framework) and our report dated February 28, 201424, 2017 expressed an unqualified opinion thereon.28, 201424, 2017
AvalonBay Communities, Inc.:'s’s internal control over financial reporting as of December 31, 2013,2016, based on criteria established in Internal Control—IntegratedControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992(2013 framework) (the COSO criteria). AvalonBay Communities, Inc.'s’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management'sManagement’s Report on Internal Control over Financial Reporting in Item 9a.9A. Our responsibility is to express an opinion on the company'scompany’s internal control over financial reporting based on our audit.company'scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'scompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'scompany’s assets that could have a material effect on the financial statements.2013,2016, based on the COSO criteria.20132016 and 2012,2015, and the related consolidated statements of comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 20132016 of AvalonBay Communities, Inc. and our report dated February 28, 201424, 2017 expressed an unqualified opinion thereon.28, 201424, 2017(Dollars in thousands) 12-31-13 12-31-12 $ 3,315,521 $ 1,406,706 11,230,813 6,847,227 343,802 249,023 14,890,136 8,502,956 (2,503,902 ) (1,945,281 ) 12,386,234 6,557,675 1,583,120 802,779 300,364 316,037 14,491 338,629 14,284,209 8,015,120 281,541 2,733,618 98,481 49,950 26,672 24,748 367,866 129,352 40,677 38,700 31,592 24,665 197,105 143,925 $ 15,328,143 $ 11,160,078 $ 2,594,709 $ 1,945,798 — — 3,550,682 1,905,235 138,476 110,966 94,472 52,903 243,045 216,756 43,353 33,056 45,485 37,049 874 10,495 6,711,096 4,312,258 17,320 7,027 — — 1,294 1,144 8,988,723 7,086,407 (345,254 ) (142,329 ) (48,631 ) (108,007 ) 8,596,132 6,837,215 3,595 3,578 8,599,727 6,840,793 $ 15,328,143 $ 11,160,078 See accompanying notes to Consolidated Financial Statements.AVALONBAY COMMUNITIES, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands, except per share data) For the year ended 12-31-13 12-31-12 12-31-11 $ 1,451,419 $ 990,370 $ 890,431 11,502 10,257 9,656 1,462,921 1,000,627 900,087 352,245 259,350 246,872 158,774 97,555 88,964 172,402 136,920 167,814 51,000 — — 14,921 1,179 1,940 560,215 243,680 226,728 39,573 34,101 29,371 45,050 11,350 2,967 — 1,449 14,052 1,394,180 785,584 778,708 (11,154 ) 20,914 5,120 240 280 13,716 — 14,194 — 57,827 250,431 140,215 16,713 26,820 20,065 278,231 146,311 281,090 294,944 173,131 301,155 352,771 423,562 441,370 370 307 252 $ 353,141 $ 423,869 $ 441,622 — (22,876 ) (85,845 ) 59,376 1,889 — $ 412,517 $ 402,882 $ 355,777 $ 0.46 $ 2.57 $ 1.55 2.32 1.77 3.34 $ 2.78 $ 4.34 $ 4.89 $ 0.46 $ 2.55 $ 1.55 2.32 1.77 3.32 $ 2.78 $ 4.32 $ 4.87 12/31/16 12/31/15 ASSETS Real estate: Land and improvements $ 3,941,250 $ 3,636,761 Buildings and improvements 14,314,981 13,056,292 Furniture, fixtures and equipment 532,994 458,224 18,789,225 17,151,277 Less accumulated depreciation (3,743,632 ) (3,303,751 ) Net operating real estate 15,045,593 13,847,526 Construction in progress, including land 1,882,262 1,592,917 Land held for development 84,293 484,377 Real estate assets held for sale, net 20,846 17,489 Total real estate, net 17,032,994 15,942,309 Cash and cash equivalents 214,994 400,507 Cash in escrow 114,983 104,821 Resident security deposits 32,071 30,077 Investments in unconsolidated real estate entities 175,116 216,919 Deferred development costs 40,179 37,577 Prepaid expenses and other assets 256,934 199,095 Total assets $ 17,867,271 $ 16,931,305 LIABILITIES AND EQUITY Unsecured notes, net $ 4,463,302 $ 3,845,674 Variable rate unsecured credit facility — — Mortgage notes payable, net 2,567,578 2,611,274 Dividends payable 185,397 171,257 Payables for construction 100,998 98,802 Accrued expenses and other liabilities 274,676 260,005 Accrued interest payable 38,307 40,085 Resident security deposits 57,023 53,132 Liabilities related to real estate assets held for sale 808 553 Total liabilities 7,688,089 7,080,782 Commitments and contingencies Redeemable noncontrolling interests 7,766 9,997 Equity: Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at December 31, 2016 and 2015; zero shares issued and outstanding at December 31, 2016 and 2015 — — Common stock, $0.01 par value; 280,000,000 shares authorized at December 31, 2016 and 2015; 137,330,904 and 137,002,031 shares issued and outstanding at December 31, 2016 and 2015, respectively 1,373 1,370 Additional paid-in capital 10,105,654 10,068,532 Accumulated earnings less dividends 94,899 (197,989 ) Accumulated other comprehensive loss (30,510 ) (31,387 ) Total equity 10,171,416 9,840,526 Total liabilities and equity $ 17,867,271 $ 16,931,305 EQUITY
COMPREHENSIVE INCOMEthousands)
thousands, except per share data) Shares issued Accumulated
earnings
less
dividends Accumulated
other
comprehensive
loss Total
AvalonBay
stockholders'
equity Preferred
stock Common
stock Preferred
stock Common
stock Additional
paid-in
capital Noncontrolling
interests Total
equity — 85,899,080 $ — $ 859 $ 3,593,677 $ (282,743 ) $ (1,175 ) $ 3,310,618 $ 4,973 $ 3,315,591
—
—
—
—
—
441,622
—
441,622
(1,172
)
440,450 — — — — — — (85,845 ) (85,845 ) — (85,845 ) — — — — — (2,607 ) — (2,607 ) — (2,607 ) — — — — — — — — 3,350 3,350 — — — — — (326,813 ) — (326,813 ) — (326,813 ) — 9,276,597 — 93 1,036,316 (1,107 ) — 1,035,302 — 1,035,302 — — — — 22,464 — — 22,464 — 22,464
—
95,175,677
—
952
4,652,457
(171,648
)
(87,020
)
4,394,741
7,151
4,401,892
—
—
—
—
—
423,869
—
423,869
—
423,869 — — — — — — (22,876 ) (22,876 ) — (22,876 ) — — — — — — 1,889 1,889 — 1,889 — — — — — (375 ) — (375 ) — (375 ) — — — — — — — — (3,573 ) (3,573 ) — — — — — (391,906 ) — (391,906 ) — (391,906 ) — 19,227,795 — 192 2,416,852 (2,269 ) — 2,414,775 — 2,414,775 — — — — 17,098 — — 17,098 — 17,098
—
114,403,472
—
1,144
7,086,407
(142,329
)
(108,007
)
6,837,215
3,578
6,840,793
—
—
—
—
—
353,141
—
353,141
—
353,141 — — — — — — 59,376 59,376 — 59,376 — — — — — (1,246 ) — (1,246 ) — (1,246 ) — — — — 1,515 — — 1,515 17 1,532 — — — — — (553,829 ) — (553,829 ) — (553,829 ) — 15,013,223 — 150 1,873,792 (991 ) — 1,872,951 — 1,872,951 — — — — 27,009 — — 27,009 — 27,009 — 129,416,695 $ — $ 1,294 $ 8,988,723 $ (345,254 ) $ (48,631 ) $ 8,596,132 $ 3,595 $ 8,599,727 For the year ended 12/31/16 12/31/15 12/31/14 Revenue: Rental and other income $ 2,039,656 $ 1,846,081 $ 1,674,011 Management, development and other fees 5,599 9,947 11,050 Total revenue 2,045,255 1,856,028 1,685,061 Expenses: Operating expenses, excluding property taxes 478,437 448,747 410,672 Property taxes 204,837 193,499 178,634 Interest expense, net 187,510 175,615 180,618 Loss (gain) on extinguishment of debt, net 7,075 (26,736 ) 412 Depreciation expense 531,434 477,923 442,682 General and administrative expense 45,771 42,774 41,425 Expensed acquisition, development and other pursuit costs, net of recoveries 9,922 6,822 (3,717 ) Casualty and impairment (gain) loss, net (3,935 ) (10,542 ) — Total expenses 1,461,051 1,308,102 1,250,726 Income from continuing operations before equity in income of unconsolidated real estate entities, gain on sale of communities and other real estate, and taxes 584,204 547,926 434,335 Equity in income of unconsolidated real estate entities 64,962 70,018 148,766 Gain on sale of communities 374,623 115,625 84,925 Gain on sale of other real estate 10,224 9,647 490 Income from continuing operations before taxes 1,034,013 743,216 668,516 Income tax expense 305 1,483 9,368 Income from continuing operations 1,033,708 741,733 659,148 Discontinued operations: Income from discontinued operations — — 310 Gain on sale of discontinued operations — — 37,869 Total discontinued operations — — 38,179 Net income 1,033,708 741,733 697,327 Net loss (income) attributable to noncontrolling interests 294 305 (13,760 ) Net income attributable to common stockholders $ 1,034,002 $ 742,038 $ 683,567 Other comprehensive income: (Loss) income on cash flow hedges (5,556 ) 5,354 (121 ) Cash flow hedge losses reclassified to earnings 6,433 5,774 6,237 Comprehensive income $ 1,034,879 $ 753,166 $ 689,683 Earnings per common share—basic: Income from continuing operations attributable to common stockholders $ 7.53 $ 5.54 $ 4.93 Discontinued operations attributable to common stockholders — — 0.29 Net income attributable to common stockholders $ 7.53 $ 5.54 $ 5.22 Earnings per common share—diluted: Income from continuing operations attributable to common stockholders $ 7.52 $ 5.51 $ 4.92 Discontinued operations attributable to common stockholders — — 0.29 Net income attributable to common stockholders $ 7.52 $ 5.51 $ 5.21 INC
INC.CASH FLOWS
EQUITY For the year ended 12-31-13 12-31-12 12-31-11 $ 352,771 $ 423,562 $ 441,370 560,215 243,680 226,728 13,500 16,414 23,541 (22,947 ) 6,427 5,834 15,160 8,707 7,244 33,125 (12,103 ) 2,246 59,376 1,889 — — 1,449 14,052 14,921 1,781 5,820 (278,471 ) (146,591 ) (294,806 ) — (14,194 ) — (28,960 ) 6,543 (7,702 ) (5,186 ) 7,992 (4,018 ) 10,997 (4,737 ) 9,045 724,501 540,819 429,354
(1,285,715 ) (755,363 ) (640,778 ) (839,469 ) (155,755 ) (46,275 ) (24,415 ) (23,452 ) (41,851 ) (2,200 ) (3,076 ) (8,281 ) 919,682 274,018 310,228 34,779 16,832 2,342 — 16,824 14,109 — — (1,701 ) 16,164 6,586 (30,934 ) (1,181,174 ) (623,386 ) (443,141 )
4,703 2,430,190 1,049,835 (526,050 ) (365,572 ) (318,231 ) 84,928 — — (2,110,347 ) (110,013 ) (200,166 ) 750,000 700,000 — (51,000 ) (54,930 ) — (100,000 ) (381,001 ) (189,900 ) (10,100 ) (15,664 ) (5,996 ) (1,965 ) — (25 ) — (3,350 ) (9,070 ) (32 ) (29 ) (20 ) (317 ) (299 ) (194 ) (35,224 ) — — (1,995,404 ) 2,199,332 326,233 (2,452,077 ) 2,116,765 312,446 2,733,618 616,853 304,407 $ 281,541 $ 2,733,618 $ 616,853 $ 179,325 $ 119,268 $ 156,898 Shares issued Balance at December 31, 2013 — 129,416,695 $ — $ 1,294 $ 8,988,723 $ (345,254 ) $ (48,631 ) $ 8,596,132 $ 3,595 $ 8,599,727 Net income attributable to common stockholders — — — — — 683,567 — 683,567 — 683,567 Loss on cash flow hedges — — — — — — (121 ) (121 ) — (121 ) Cash flow hedge losses reclassified to earnings — — — — — — 6,237 6,237 — 6,237 Change in redemption value of noncontrolling interest — — — — — 3,709 — 3,709 — 3,709 Noncontrolling interests income allocation — — — — — — — — 14,221 14,221 Noncontrolling interests derecognition — — — — — — — — (17,816 ) (17,816 ) Dividends declared to common stockholders — — — — — (608,709 ) — (608,709 ) — (608,709 ) Issuance of common stock, net of withholdings — 2,633,687 — 26 339,186 (398 ) — 338,814 — 338,814 Amortization of deferred compensation — — — — 26,776 — — 26,776 — 26,776 Balance at December 31, 2014 — 132,050,382 — 1,320 9,354,685 (267,085 ) (42,515 ) 9,046,405 — 9,046,405 Net income attributable to common stockholders — — — — — 742,038 — 742,038 — 742,038 Income on cash flow hedges — — — — — — 5,354 5,354 — 5,354 Cash flow hedge losses reclassified to earnings — — — — — — 5,774 5,774 — 5,774 Change in redemption value and acquisition of noncontrolling interest — — — — (1,088 ) 2,053 — 965 — 965 Dividends declared to common stockholders — — — — — (673,670 ) — (673,670 ) — (673,670 ) Issuance of common stock, net of withholdings — 4,951,649 — 50 688,677 (1,325 ) — 687,402 — 687,402 Amortization of deferred compensation — — — — 26,258 — — 26,258 — 26,258 Balance at December 31, 2015 — 137,002,031 — 1,370 10,068,532 (197,989 ) (31,387 ) 9,840,526 — 9,840,526 Net income attributable to common stockholders — — — — — 1,034,002 — 1,034,002 — 1,034,002 Loss on cash flow hedges — — — — — — (5,556 ) (5,556 ) — (5,556 ) Cash flow hedge losses reclassified to earnings — — — — — — 6,433 6,433 — 6,433 Change in redemption value and acquisition of noncontrolling interest — — — — — 1,489 — 1,489 — 1,489 Dividends declared to common stockholders — — — — — (741,313 ) — (741,313 ) — (741,313 ) Issuance of common stock, net of withholdings — 328,873 — 3 11,982 (1,290 ) — 10,695 — 10,695 Amortization of deferred compensation — — — — 25,140 — — 25,140 — 25,140 Balance at December 31, 2016 — 137,330,904 $ — $ 1,373 $ 10,105,654 $ 94,899 $ (30,510 ) $ 10,171,416 $ — $ 10,171,416 (Continued) For the year ended 12/31/16 12/31/15 12/31/14 Cash flows from operating activities: Net income $ 1,033,708 $ 741,733 $ 697,327 Adjustments to reconcile net income to cash provided by operating activities: Depreciation expense 531,434 477,923 442,682 Amortization of deferred financing costs 7,661 6,871 6,383 Amortization of debt premium (18,866 ) (24,261 ) (34,961 ) Loss (gain) on extinguishment of debt, net 7,075 (26,736 ) 412 Amortization of stock-based compensation 15,082 15,321 13,927 Equity in and return on, unconsolidated real estate entities and noncontrolling interests, net of eliminations 8,870 12,225 4,906 Casualty and impairment (gain) loss, net (3,935 ) (17,303 ) — Abandonment of development pursuits 1,743 — 1,455 Cash flow hedge losses reclassified to earnings 6,433 5,774 6,237 Gain on sale of real estate assets (442,916 ) (158,852 ) (255,300 ) (Increase) decrease in cash in operating escrows (8,226 ) (11,837 ) 55 (Increase) decrease in resident security deposits, prepaid expenses and other assets (5,403 ) 12,783 (3,441 ) Increase in accrued expenses, other liabilities and accrued interest payable 10,824 23,113 6,959 Net cash provided by operating activities 1,143,484 1,056,754 886,641 Cash flows from investing activities: Development/redevelopment of real estate assets including land acquisitions and deferred development costs (1,201,026 ) (1,569,326 ) (1,241,832 ) Acquisition of real estate assets, including partnership interest (393,316 ) — (47,000 ) Capital expenditures - existing real estate assets (66,971 ) (48,170 ) (46,902 ) Capital expenditures - non-real estate assets (5,881 ) (7,695 ) (5,923 ) Proceeds from sale of real estate, net of selling costs 532,717 282,163 297,466 Increase in cash in deposit escrows (5,000 ) — — Insurance proceeds for property damage claims 17,196 44,142 — Mortgage note receivable lending (19,115 ) — — Mortgage note receivable payment — — 21,748 Increase (decrease) in payables for construction 2,196 (3,230 ) 7,400 Distributions from unconsolidated real estate entities 111,598 109,181 203,945 Investments in unconsolidated real estate entities (9,750 ) (6,582 ) (5,662 ) Net cash used in investing activities (1,037,352 ) (1,199,517 ) (816,760 ) Cash flows from financing activities: Issuance of common stock, net 15,526 690,184 346,134 Dividends paid (726,749 ) (655,248 ) (593,643 ) Issuance of mortgage notes payable — — 53,000 Repayments of mortgage notes payable, including prepayment penalties (165,012 ) (850,963 ) (32,859 ) Issuance of unsecured notes 1,122,488 873,088 550,000 Repayment of unsecured notes, including prepayment penalties (504,403 ) — (150,000 ) Payment of deferred financing costs (16,240 ) (7,343 ) (7,820 ) Redemption of noncontrolling interest and units for cash by minority partners — (1,088 ) — Payment for termination of forward interest rate swaps (14,847 ) — — Distributions to DownREIT partnership unitholders (41 ) (38 ) (26 ) Distributions to joint venture and profit-sharing partners (407 ) (372 ) (262 ) Preferred interest obligation redemption and dividends (1,960 ) (14,410 ) (6,300 ) Net cash (used in) provided by financing activities (291,645 ) 33,810 158,224 Net (decrease) increase in cash and cash equivalents (185,513 ) (108,953 ) 228,105 Cash and cash equivalents, beginning of year 400,507 509,460 281,355 Cash and cash equivalents, end of year $ 214,994 $ 400,507 $ 509,460 Cash paid during the year for interest, net of amount capitalized $ 194,059 $ 188,782 $ 191,966 2013:•"Equity," 14,889,706“Equity,” 197,018 shares of common stock valued at $1,875,210,000 were issued as partial consideration forpart of the Archstone Acquisition (as defined in this Form 10-K); 123,977Company's stock based compensation plans, of which 115,618 shares related to the conversion of common stockperformance awards to restricted shares, and the remaining 81,400 shares valued at $16,019,000$13,217,000 were issued in connection with new stock grants; 2,00244,327 shares valued at $269,000$3,894,000 were issued in conjunction with the conversion of deferred stock awards; 2,396 shares valued at $424,000 were issued through the Company'sCompany’s dividend reinvestment plan; 48,31053,453 shares valued at $6,127,000$8,356,000 were withheld to satisfy employees'employees’ tax withholding and other liabilities; and 7,6534,262 restricted shares and certain options valued at $1,105,000with an aggregate value of $694,000 previously issued in connection with employee compensation were cancelledcanceled upon forfeiture. In addition, the Company granted 215,230 options for common stock at a value of $5,768,000.•The Company reclassified $5,892,000 of deferred cash flow hedge losses from other comprehensive income to interest expense, net, and $53,484,000 to loss on interest rate contract, to record the impact of the Company's derivative and hedge accounting activity.•$138,476,000.$185,397,000.•$13,262,000 in redeemable noncontrolling interests associated with consolidated joint ventures acquired as parta decrease of the Archstone Acquisition. The Company also recorded an increase of $1,246,000$1,489,000 in redeemable noncontrolling interest with a corresponding decreaseincrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units. For further discussion of the nature and valuation of these items, see Note 11, "Fair“Fair Value."”•The Company assumed secured indebtedness with a principal amount of $3,512,202,000 in conjunction with the Archstone Acquisition, discussed further in Note 3, "Notes Payable, Unsecured Notes and Credit Facility." The Company also assumed an obligation related to outstanding preferred interests of approximately $67,500,000, included in accrued expenses and other liabilities, and discussed further in Note 5, "Archstone Acquisition." During the year ended December 31, 2012:•96,592 shares of common stock valued at $12,883,000 were issued in connection with stock grants, 2,331 shares valued at $321,000 were issued through the Company's dividend reinvestment plan, 121,351 shares valued at $15,543,000 were withheld to satisfy employees' tax withholding and other liabilities and 7,558 shares and options valued at $393,000 previously issued in connection with employee compensation were cancelled upon forfeiture. In addition, the Company granted 115,303 options for common stock at a value of $3,357,000.•toin prepaid expenses and other liabilitiesassets and a corresponding lossgain to other comprehensive income of $22,876,000;$12,085,000, and reclassified $1,889,000$6,433,000 of deferred cash flow hedge losses from other comprehensive income to interest expense, net, and recorded a decrease to prepaid expenses and other assets of $11,000, with a corresponding offset to the basis of unsecured notes, net to record the impact of the Company'sCompany’s derivative and hedge accounting activity.•$110,966,000.$171,257,000.•an increasea decrease of $375,000$2,053,000 in redeemable noncontrolling interestsinterest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put option held by a joint venture partner and DownREIT partnership units.CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)•The Company assumed a 4.61% fixed rate mortgage loan with an outstanding balance of $11,958,000 in conjunction with the acquisition of The Mark Pasadena. During the year ended December 31, 2011:•511,817 shares of common stock valued at $64,747,000 were issued in connection with stock grants, 3,343 shares valued at $403,000 were issued through the Company's dividend reinvestment plan, 129,762 shares valued at $14,891,000 were withheld to satisfy employees' tax withholding and other liabilities and 505 shares valued at $35,000 were forfeited, for a net value of $50,224,000. In addition, the Company granted 144,827 options for common stock at a value of $4,258,000.•7,500 units of limited partnership, valued at $365,000, were presented for redemption to the DownREIT partnerships that issued such units and were acquired by the Company in exchange for an equal number of shares of the Company's stock.•The Company recorded an increase to other liabilities and a corresponding loss to other comprehensive income of $85,845,000; and recorded a decrease to prepaid expenses and other assets of $1,498,000, with a corresponding offset to the basis of unsecured notes, net to record the impact of the Company's hedge accounting activity.•Common stock dividends declared but not paid totaled $84,953,000.•The Company recorded an increase of $2,607,000 in redeemable noncontrolling interests with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.•repaid all amounts due underrecorded an increase in prepaid expenses and other assets and a $93,440,000 variable rate, tax-exempt bond financing usingcorresponding gain to other comprehensive income of $5,354,000, and reclassified $5,774,000 of cash flow hedge losses from other comprehensive income to interest expense, net, to record the proceeds which were held in escrow.impact of the Company’s derivative and hedge accounting activity.•assumedrecognized a 4.75%charge of $26,039,000 to write off the net book value of the fixed rate mortgage loan with an outstanding balance of $44,044,000assets destroyed by the fire that occurred in conjunction with the acquisition of Fairfax Towers.•As part of an asset exchange in April 2011, the Company assumed a $55,400,000 fixed rate mortgage loan with a 5.24% fixed rate2015 at Avalon at Edgewater (“Edgewater”) and relinquished a $55,800,000 mortgage loan with a 5.86% fixed rate.winter storm damage.•entered into a ground lease that is consideredrecognized a capital lease associated with a parking garage adjacent to a Development Community, recording a capital lease obligation of $14,500,000$3,299,000 in accrued expenses and other liabilities, with a corresponding offsetasset to construction in progress.buildings and improvements.•entered intoissued 115,163 shares of common stock as part of the Company's stock based compensation plan, of which 16,209 shares related to the conversion of performance awards to restricted shares, and the remaining 98,954 shares valued at $12,799,000 were issued in connection with new stock grants; 2,434 shares valued at $335,000 were issued through the Company’s dividend reinvestment plan; 55,523 shares valued at $4,746,000 were withheld to satisfy employees’ tax withholding and other liabilities; and 7,970 restricted shares with an aggregate value of $2,938,000 previously issued in connection with employee compensation were canceled upon forfeiture.ground lease that is considereddecrease of $3,709,000 in redeemable noncontrolling interest with a capital leasecorresponding increase to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.Development Right, recording a capital lease obligation of $17,285,000decrease in accruedprepaid expenses and other liabilities withassets and a corresponding offsetloss to land.other comprehensive income of $121,000 and reclassified $6,237,000 of deferred cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company’s derivative and hedge accounting activity.•recorded an increasederecognized $17,816,000 in noncontrolling interest of $3,350,000 associatedin conjunction with the consolidationdeconsolidation of a development joint venture.Organization"Company,"“Company,” which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its consolidated subsidiaries), is a Maryland corporation that has elected to be taxedtreated as a real estate investment trust ("REIT"(“REIT”) for federal income tax purposes under the Internal Revenue Code of 1986 (the "Code"“Code”). The Company focuses on the development, redevelopment, acquisition, ownership and operation of apartmentmultifamily communities primarily in high barrier to entry markets of the United States. The Company's primary markets are located in New England, the New York/New Jersey Metrometro area, the Mid-Atlantic, the Pacific Northwest, and the Northern and Southern California regions of the United States.2013,2016, the Company owned or held a direct or indirect ownership interest in 244258 operating apartment communities containing 72,81174,538 apartment homes in 1210 states and the District of Columbia, of which threefour communities containing 1,1261,671 apartment homes were under reconstruction.redevelopment. In addition, the Company owned or held a direct or indirect ownership interest in 2927 communities under constructiondevelopment that are expected to contain an aggregate of 8,7089,129 apartment homes when completed. The Company also owned or held a direct or indirect ownership interest in land or rights to land in which the Company expects to develop an additional 4625 communities that, if developed as expected, will contain an estimated 12,9868,487 apartment homes.the meaning asmeanings provided elsewhere in this Form 10-K.qualifiedqualify for consolidation. All significant intercompany balances and transactions have been eliminated in consolidation.that are not variable interest entities in accordance with the guidance applicable to limited partnerships or similar entities.consolidation guidance. The Company evaluates the partnership of each joint venture entity and determines first whether control overto follow the partnership lies withvariable interest entity (“VIE”) or the general partner or, whenvoting interest entity (“VOE”) model. Once the limited partners have certain rights, withappropriate consolidation model is identified, the limited partners. TheCompany then evaluates whether it should consolidate the venture. Under the VIE model, the Company consolidates an investment when both (i)it has control to direct the activities of the venture and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the VOE model, the Company consolidates an investment when 1) it controls the investment through ownership of a majority voting interest if the investment is not a limited partnership or 2) it controls the general partner and (ii) the limited partner interests do not overcome the Company's presumption of control by having either substantive participating rights, theinvestment through its ability to remove the Company asother partners in the general partner orinvestment, at its discretion, when the ability to dissolve theinvestment is a limited partnership. (i) the Company holds a general partner interest but the presumption of control by the Company is overcome by the limited partner interests as described in the preceding paragraph or (ii) the Company holds a noncontrolling limited partner interest in a joint venture. Any investment in excess of the Company's cost basis at acquisition or formation of an equity method venture, will be recorded as a component of the Company's investment in the joint venture and recognized over the life of the underlying fixed assets of the venture as a reduction to its equity in income from the venture. Investments in which the Company has little or no influence are accounted for using the cost method.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basis of Presentation (Continued)isdoes not obligated to performhave significant activities after the sale. Improvements and upgrades are generally capitalized only if the item exceeds $15,000, extends the useful life of the asset and is not related to making an apartment home ready for the next resident. Purchases of personal property, such as computers and furniture, are generally capitalized only if the item is a new addition and exceeds $2,500. The Company generally expenses purchases of personal property made for replacement purposes.acquired as Development Rights four land parcels improveddefers external costs associated with office buildings, industrial space and other commercial and residential ventures occupied by unrelated third parties. As of December 31, 2013,originating new leases, recognizing the Company is actively pursuing development of allimpact of these parcels. Forcosts in earnings over the land parcels for which the Company intends to pursue development, the Company will manage the current improvements until such time as all tenant obligations have been satisfied or eliminated through negotiation, and construction of new apartment communities is ready to begin. Revenue from incidental operations received from the current improvements on these land parcels in excess of any incremental costs are being recorded as a reduction of total capitalized coststerm of the Development Right and not as partlease.net income.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basisoperating communities. Prior to adoption of Presentation (Continued) In connection withASU 2017-01 on October 1, 2016, the acquisition of an operating community was viewed as an acquisition of a business, and the Company identifiesidentified and recordsrecorded each asset acquired and liability assumed in such transaction at its estimated fair value at the date of acquisition. The purchase price allocationsallocation to tangible assets, such as land and improvements, buildings and improvements, and furniture, fixtures and equipment, and the in-place lease intangible assets, arewas reflected in real estate assets and depreciated over their estimated useful lives. Any purchase price allocation to intangible assets, other than in-place lease intangibles, iswas included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets and amortized over the term of the acquired intangible asset. The fair value of acquired in-place leases is determined based on the estimated cost to replace such leases, including foregone rents during an assumed re-lease period, as well as the impact on projected cash flow of acquired leases with leased rents above or below current market rents. The Company expensesexpensed all costs incurred related to acquisitions.thirty30 years. Furniture, fixtures and equipment are generally depreciated using the straight-line method over their estimated useful lives, which range from three years (primarily computer-related equipment) to seven years.20132016 and 2012,2015, the Company did not have any unrecognized tax benefits. The Company does not believe that there will be any material changes in its unrecognized tax positions over the next 12 months. The Company is subject to examination by the respective taxing authorities for the tax years 20102013 through 2012.avoidance ofexemption from income taxes on ordinary income have been or will be met for the periods presented. Accordingly, no provision for federal and state income taxes has been made. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. The Company did not incur any charges or receive refunds of excise taxes related to the years ended December 31, 2013, 20122016, 2015 and 2011.2014. In addition, taxable income from non-REIT activities performed through taxable REIT subsidiaries (“TRS”) is subject to federal, state and local income taxes, although no taxes weretaxes. The Company incurred during 2013, 2012income tax expense of $305,000, $1,483,000 and 2011.$9,368,000 in 2016, 2015 and 2014, respectively, associated primarily with activities transacted through a TRS.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basis of Presentation (Continued)2013, 20122016, 2015 and 2011 (dollars2014 (unaudited, dollars in thousands): 2013 Estimate 2012 Actual 2011 Actual 2016 Estimate 2015 Actual 2014 Actual $ 353,141 $ 423,869 $ 441,622 $ 1,034,002 $ 742,038 $ 683,567 29,388 37,525 (84,152 ) (204,767 ) (20,900 ) 22,127 176,982 9,572 9,192 (10,183 ) (24,657 ) (10,735 ) Amortization of debt/mark to market interest (19,763 ) (64,676 ) (38,202 ) 31,524 (26,314 ) (43,145 ) 5,592 (1,244 ) (5,252 ) — 1,449 14,052 Casualty and impairment (gain) loss, net (3,935 ) (10,542 ) — (14,974 ) (9,034 ) 183 (10 ) (12,829 ) 14,323 $ 576,061 $ 437,067 $ 337,752 $ 800,936 $ 607,190 $ 665,828 2013, 20122016, 2015 and 2011:2014 (unaudited): 2013 2012 2011 2016 2015 2014 42 % 47 % 34 % 68 % 83 % 62 % 40 % 33 % 47 % 20% capital gain 26 % 12 % 29 % 18 % 20 % 19 % 6 % 5 % 9 % $19,719,000$14,008,000 and $11,995,000 as of December 31, 20132016 and $20,773,0002015, respectively, and related to mortgage notes payable was $10,562,000 and $12,315,000 as of December 31, 2012.construction financing proceedsprincipal reserve funds that are restricted for use in the constructionrepayment of a specific community.specified secured financing. The majority of the Company's cash, cash equivalents and cash in escrowsescrow are held at major commercial banks.Interest Rate Contracts The Company utilizes derivative financial instruments to manage interest rate risk. See Note 11, "Fair Value," for further discussion of derivative financial instruments.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basis of Presentation (Continued)("EPS"(“EPS”). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data): For the year ended 12-31-13 12-31-12 12-31-11 126,855,754 97,416,401 89,922,465 7,500 7,500 8,322 402,649 601,251 846,675 127,265,903 98,025,152 90,777,462 $ 353,141 $ 423,869 $ 441,622 (563 ) (1,264 ) (1,631 ) $ 352,578 $ 422,605 $ 439,991 126,855,754 97,416,401 89,922,465 $ 2.78 $ 4.34 $ 4.89 $ 353,141 $ 423,869 $ 441,622 32 28 27 $ 353,173 $ 423,897 $ 441,649 127,265,903 98,025,152 90,777,462 $ 2.78 $ 4.32 $ 4.87 $ 4.28 $ 3.88 $ 3.57 For the year ended 12/31/16 12/31/15 12/31/14 Basic and diluted shares outstanding Weighted average common shares—basic 136,928,251 133,565,711 130,586,718 Weighted average DownREIT units outstanding 7,500 7,500 7,500 Effect of dilutive securities 525,886 1,019,966 643,284 Weighted average common shares—diluted 137,461,637 134,593,177 131,237,502 Calculation of Earnings per Share—basic Net income attributable to common stockholders $ 1,034,002 $ 742,038 $ 683,567 Net income allocated to unvested restricted shares (2,610 ) (1,774 ) (1,523 ) Net income attributable to common stockholders, adjusted $ 1,031,392 $ 740,264 $ 682,044 Weighted average common shares—basic 136,928,251 133,565,711 130,586,718 Earnings per common share—basic $ 7.53 $ 5.54 $ 5.22 Calculation of Earnings per Share—diluted Net income attributable to common stockholders $ 1,034,002 $ 742,038 $ 683,567 Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations 41 38 35 Adjusted net income attributable to common stockholders $ 1,034,043 $ 742,076 $ 683,602 Weighted average common shares—diluted 137,461,637 134,593,177 131,237,502 Earnings per common share—diluted $ 7.52 $ 5.51 $ 5.21 Dividends per common share $ 5.40 $ 5.00 $ 4.64 AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basis of Presentation (Continued) Certainin the amounts of 605,899 and 396,346 were outstanding as of December 31, 20132016, 2015 and 2012, respectively, but were not2014 are included in the computation of diluted earnings per share because such options were anti-dilutive.20132016 was 1.4%0.8% and is based on the average forfeiture activity over a period equal to the estimated life of the stock options. The application of estimated forfeitures did not materially impact compensation expense for the years ended December 31, 2013, 20122016, 2015 and 2011.Casualty Loss, 2014. As discussed under "Recently Issued and Adopted Accounting Standards," the Company will adopt the provision of ASU 2016-09 and recognize forfeitures as they occur beginning in 2017. During the year ended December 31, 2012 the Company incurred damages related to Superstorm Sandy at certain of its communities on the East Coast, and recognized a charge of $1,449,000 for the casualty loss associated with this damage on the accompanying Consolidated Statements of Comprehensive Income. The Company did not incur a casualty loss in 2013 or 2011. The Company evaluates its real estate and other long-lived assets for impairment when potential indicators of impairment exist. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the property to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Company recognizes an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property. Based on periodic tests of recoverability of long-lived assets, for the years ended December 31, 2013, 2012 and 2011, the Company did not recognize any impairment losses for wholly-owned operating real estate assets.("(“Development Rights"Rights”). Future development of these Development Rights is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and the availability of capital. Initial pre-development costs incurred for pursuits for which future development is not yet considered probable are expensed as incurred. In addition, if the status of a Development Right changes, making future development by the Company no longer probable, any capitalized pre-development costs are written off with a charge to expense.expensed. The Company expensed costs related to the abandonment of Development Rights, as well as costs incurred in pursuing the acquisition of assets or costs incurred pursuing the disposition of assets for which such acquisition and disposition activity did not occur, in the amounts of $998,000, $1,757,000$4,183,000, $3,016,000 and $1,957,000$3,964,000 during the years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively. These costs are included in operating expenses, excluding property taxesexpensed acquisition, development and other pursuit costs, net of recoveries on the accompanying Consolidated Statements of Comprehensive Income. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.holdholding period for, the land. During the year ended December 31, 2016, the Company recognized $10,500,000 of aggregate impairment charges related to three ancillary land parcels for which the Company has either sold or intends to sell. These charges were determined as the excess of the Company's carrying basis over the expected sales price for each parcel, and is included in casualty and impairment (gain) loss, net on the accompanying Consolidated Statements of Comprehensive Income. The Company did not recognize any material impairment charges foron its investment in land holdings in 2013 or 2012.during the years ended December 31, 2015 and 2014.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. OrganizationBasis of Presentation (Continued)During 2011, the Company concluded thatamount by which the carrying basis of two land parcels was not fully recoverable when the Company decided to pursue the sale of these assets. As a result, the Company recognized an aggregate charge of $12,097,000 for the impairment of these land parcels. The impairment recognized in 2011 was primarily attributable to onevalue of the land parcels, whichinvestment exceeds the Company sold in 2012. The Company had previously recognized an impairment loss of $9,952,000 in 2008 whenfair value, and the Company determined that it no longer intended to pursue development of these two land parcels. At that time, the Company had theCompany’s intent and ability to hold the assets for the foreseeable future. The Company lookedinvestment to a combination of internal models and third-party pricing estimates to determine the fair values for these impaired land parcels. Considering the Company's knowledge of multifamily residential development, the fair values of parcels zoned for multifamily development were generated using an internal model. Land parcels zoned for other purposes were valued using third-party estimates of fairrecover its carrying value. For the internally generated fair values, the Company used a discounted cash flow analysis on the expected cash flows for a multifamily rental community. The cash flow analysis incorporated assumptions that market participants would make, including applying discount factors to the estimated future cash flows of the underlying asset, as well as potential disposition proceeds. The third-party values incorporated the use of estimated rates of return, investment time horizons and sales prices for land parcels considered to be market comparables, adjusted for known differences in critical areas including the existing entitlements (such as zoning and state of infrastructure readiness). Both valuation methods included significant other unobservable inputs and are therefore classified as Level 3 prices in the fair value hierarchy. unconsolidated investments for impairment, considering both its carrying value of the investment, estimated as the expected proceeds that it would receive if the entity were dissolved and the net assets were liquidated, as well as the Company's proportionate share of any impairment of assets held by unconsolidated investments. There were no other than temporary impairment losses recognized by any of the Company's investments in unconsolidated real estate entities during the years ended December 31, 20132016, 2015 or 2014.2012. During 2011,2016, the Company recognizedreached a charge of $1,955,000final insurance settlement for the Company's property damage and lost income for the Edgewater casualty loss, for which it received aggregate insurance proceeds for Edgewater of $73,150,000, after self-insurance and deductibles, as discussed below.investmentNortheast markets incurred property and casualty damages from severe winter storms, for which the Company recorded an impairment due to a casualty loss of $4,195,000. During the year ended December 31, 2016, the Company recorded a net casualty gain related to the 2015 severe winter storms of $5,732,000, which is comprised of $8,493,000 in an unconsolidated joint venture,third-party insurance proceeds received, partially offset by incremental costs of $2,761,000. These amounts are included in casualty and impairment (gain) loss, net on the accompanying Consolidated Statements of Comprehensive Income.disposed of during 2013.Company'saccompanying Consolidated Statements of Comprehensive Income. Held for sale and discontinued operations classifications are provided in both the current and prior periods presented. Real estate assets held for sale are measured at the lower of the carrying amount or the fair value less the cost to sell. Both the real estate assets and corresponding liabilities are presented separately in the accompanying Consolidated Balance Sheets. Subsequent toUpon the classification of an asset as held for sale, no further depreciation is recorded. ForSubsequent to the adoption of ASU 2014-08 on January 1, 2014, as discussed under "Recently Issued and Adopted Accounting Standards," disposals representing a strategic shift in operations (e.g., a disposal of a major geographic area, a major line of business or a major equity method investment) will be presented as discontinued operations, and for those assets qualifying for classification as discontinued operations, the specific components of net income presented as discontinued operations include net operating income, depreciation expense and interest expense, net. For periods prior to the asset qualifying for discontinued operations, the Company reclassifies the results of operations to discontinued operations. In addition, the net gain or loss (including any impairment loss) on the eventual disposal of assets held for sale will be presented as discontinued operations when recognized. A change in presentation for held for sale or discontinued operations will not have any impact on theAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basis of Presentation (Continued)one operating communitytwo ancillary land parcels that qualified foras held for sale presentation at December 31, 2013.shares,stock, where permitted, may not be within the Company's control. The nature and valuation of the Company's redeemable noncontrolling interests are discussed further in Note 11, "Fair“Fair Value.""Hedging Derivatives"“Hedging Derivatives”) for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivative transactions for trading or other speculative purposes. The Company assesses both at inception and on an on-going basis, the effectiveness of qualifying cash flow and fair value hedges.hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of general and administrative expenses. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. Other thanThe Company does not present or disclose the $51,000,000 lossfair value of Hedging Derivatives on interest rate contract recorded during 2013, faira net basis. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For the Hedging Derivative positions that the Company has determined qualify as effective cash flow hedges, the Company has recorded the effective portion of cumulative changes in the fair value of the Hedging Derivatives in other comprehensive income.income (loss). Amounts recorded in other comprehensive income (loss) will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that the Company has determined qualified as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding debt being hedged.Noncontrolling Interests Noncontrolling interests represent our joint venture partners' claims on consolidated investments where the Company owns less than a 100% interest. The Company records these interests at their initial fair value, adjusting the basis prospectively See Note 11, “Fair Value,” for the joint venture partners' sharefurther discussion of the respective consolidated investments' results of operations and applicable changes in ownership.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)1. Organization and Basis of Presentation (Continued)Legal and Other Contingencies The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of the Company's business. While no assurances can be given, the Company does not believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on the Company's financial position or results of operations.presentations.February 2013,January 2017, the FASB issued ASU 2017-01-Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to assist in determining when a set of transferred assets is a business. The guidance on reclassifications out of accumulated other comprehensive income (AOCI). For significant items reclassified out of AOCI to net income in their entirety, reporting is required about the effectstates that if substantially all of the reclassifications onfair value of the respective line items where net incomegross assets acquired is presented. Additionally, for itemsconcentrated in a single identifiable asset or a group of similar identifiable assets, the transaction is an asset acquisition and not a business combination. If the fair value of the gross assets acquired is not concentrated into a single asset or group of similar assets, the acquired assets are viewed as a business combination only if they include, at a minimum, an input and a substantive process that are not reclassifiedtogether significantly contribute to net income in their entirety, a cross referencethe ability to other disclosures is requiredcreate output. The guidance will be effective in the notes.first quarter of 2018 and allows for early adoption of transactions that have not been reported in financial statements that have been issued or made available for issuance. The Company adopted the guidance as of October 1, 2016 and did not acquire any businesses during the fourth quarter of 2016. The adoption of the standard did not have a material impacteffect on the Company'sCompany’s financial position or results of operations.$66,838,000, $49,556,000$78,872,000, $79,834,000 and $33,863,000$69,961,000 for years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively.20132016 and December 31, 20122015 are summarized below (dollars in thousands).below. The following amounts and discussion do not include the mortgage notes related to the communitiesAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)3. Notes Payable, Unsecured Notes and Credit Facility (Continued)20132016 and 2012,2015, as shown in the Consolidated Balance Sheets (dollars in thousands) (see Note 7, "Real6, “Real Estate Disposition Activities"Activities”). 12/31/16 12/31/15 Fixed rate unsecured notes (1) $ 4,200,000 $ 3,575,000 Term Loan 300,000 300,000 Fixed rate mortgage notes payable—conventional and tax-exempt (2) 1,668,496 1,561,109 Variable rate mortgage notes payable—conventional and tax-exempt (2) 908,262 1,045,182 Total mortgage notes payable and unsecured notes 7,076,758 6,481,291 Credit Facility — — Total mortgage notes payable, unsecured notes and Credit Facility $ 7,076,758 $ 6,481,291 (1) Balances at December 31, 2016 and 2015 exclude $8,930 and $7,601, respectively, of debt discount, and $27,768 and $21,725, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Consolidated Balance Sheets. (2) Balances at December 31, 2016 and 2015 exclude $1,866 and $19,686, respectively, of debt premium, and $11,046 and $14,703, respectively, of deferred financing costs, as reflected in mortgage notes payable, net on the accompanying Consolidated Balance Sheets. 12-31-13 12-31-12 $ 2,600,000 $ 1,950,000 2,418,389 1,427,133 1,011,609 476,935 6,029,998 3,854,068 — — $ 6,029,998 $ 3,854,068 (1)Balances at December 31, 2013 and December 31, 2012 exclude $5,291 and $4,202 of debt discount, respectively, as reflected in unsecured notes, net on the Company's Consolidated Balance Sheets.(2)Balances at December 31, 2013 and December 31, 2012 exclude $120,684 and $1,167 of debt premium, respectively, as reflected in mortgage notes payable on the Company's Consolidated Balance Sheets.2013:•February 2013,January 2016, in conjunction with the disposition of Eaves Trumbull, Avalon Stratford was substituted as a portion of the considerationcollateral for the Archstone Acquisition,outstanding fixed rate mortgage note secured by Eaves Trumbull.$3,512,202,000 consolidated principal amount of Archstone's existing secured indebtedness, repaying $1,477,720,000 principal amount of the indebtedness assumed concurrent with the closing of the Archstone Acquisition.•In March 2013, the Company repaid $100,000,000 of its 4.95% unsecured notes in accordance with the scheduled maturity.•In April 2013, the Company obtained a 3.06% fixed rate, secured mortgage loan in the amount of $15,000,000 that matures in April 2018.•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 date.•In May 2013, the Company repaid a $5,393,000 fixed rate secured mortgage note with ana principal balance of $67,904,000 and a contractual interest rate of 5.55%4.18% maturing in December 2020.July 2028 scheduledMarch 2016 maturity date.•In May 2013, Upon repayment, Archstone Lexington was substituted as collateral for the Company obtained a 3.08%outstanding fixed rate mortgage note secured mortgage loan that matures in June 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 refinancing was necessitated by the secured community-specific tax protection obligation assumed through certain of the preferred interests the Company assumed as part of the Archstone Acquisition.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)3. Notes Payable, Unsecured Notes and Credit Facility (Continued)•May 2013,April 2016, the Company repaid $134,500,000 of variable rate debt secured by Avalon Walnut Creek at par in advance of its March 2046 maturity date, recognizing a $52,806,000 fixed rate secured mortgage note with an interest ratenon-cash charge of 5.24% pursuant to its scheduled maturity date.$2,461,000 for the write-off of deferred financing costs.•September 2013,May 2016, the Company issued $400,000,000$475,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $396,212,000.$471,751,000. The notes mature in May 2026 and were issued at a 2.95% coupon rate.20202026 and were issued at a 3.63%2.90% coupon interest rate. The notes have an effective interest rate of 3.79% including the effect of offering costs.•December 2013,October 2016, the Company issued $350,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $346,934,000.$345,520,000. The notes mature in December 2023October 2046 and were issued at a 4.20%3.90% coupon interest rate. The notes have an effective interest rate of 4.30% including the effect of offering costs.•December 2013,November 2016, the Company repaid a $150,000,000 fixed rate secured mortgage note with an interest rate$250,000,000 principal amount of 5.66%, a $110,600,000 fixed rate secured mortgage note with an interest rate of 5.48%, and a $41,439,000 fixed rate secured mortgage note with an interest rate of 4.75%,its 5.70% coupon unsecured notes in advance of their 2015its March 2017 scheduled maturity, dates, and incurredrecognizing a charge forof $4,614,000, consisting of a prepayment penaltiespenalty of $4,403,000 and the write-off of deferred feesfinancing costs of $14,921,000. The$211,000.has a $1,300,000,000extended the maturity of its revolving variable rate unsecured credit facility (the “Credit Facility”) from April 2017 to April 2020, and amended other provisions in the Credit Facility. In addition, pursuant to an option available under the terms of the Credit Facility, with athe approval of the syndicate of bankslenders, the Company increased the aggregate facility size from $1,300,000,000 to $1,500,000,000 (the "Credit Facility"“Credit Facility Increase”) which matures in April 2017.. The Company has the option tomay further extend the maturity byterm for up to one year under two, six monthnine months, provided the Company is not in default and upon payment of a $1,500,000 extension options for an aggregate fee of $1,950,000.fee. In connection with the Credit Facility Increase, the applicable margin over reference rates used to determine the applicable interest rates on the Company's borrowings from time to time decreased. The Credit Facility bears interest at varying levels based on the London Interbank Offered Rate ("LIBOR"(“LIBOR”), rating levels achieved on the Company's unsecured notes and on a maturity schedule selected by the Company. The current stated pricing is LIBOR plus 1.05% (1.22%0.825% per annum (1.60% at December 31, 2013)2016), assuming a one month borrowing rate. The stated spread over LIBOR can vary from LIBOR plus 0.80% to LIBOR plus 1.55% based on the Company's credit ratings. In addition, a competitive bid option is available for borrowings up to 65% of the Credit Facility amount, which allows banks that are part of the lender consortium to bid to make loans at a rate that is lower than the stated rate if market conditions allow. In connection with the Credit Facility Increase, the annual facility fee iswas also amended to lower the fee to 0.125% from 0.15%, resulting in a fee of approximately $1,950,000$1,875,000 annually based on the $1,300,000,000$1,500,000,000 facility size and based on the Company's current credit rating.$65,018,000$46,711,000 and $44,833,000$43,049,000 outstanding in letters of credit that reduced the borrowing capacity as of December 31, 20132016 and December 31, 2012,2015, respectively.November 2015February 2017 through July 2066, and are secured by certain apartment communities and improved land parcels (with a net carrying value of $4,469,421,000,$3,460,572,000, excluding communities classified as held for sale, as of December 31, 2013)2016).2013,2016, the Company has guaranteed approximately $309,358,000 ofa $100,000,000 mortgage notesnote payable held by a wholly-owned subsidiaries; allsubsidiary; such mortgage notesnote payable areis consolidated for financial reporting purposes. The weighted average interest rate of the Company's fixed rate mortgage notes payable (conventional and tax-exempt) was 3.4%4.4% and 5.8%4.6% at December 31, 20132016 and December 31, 2012,2015, respectively. The weighted average interest rate of the Company's variable rate mortgage notes payable (conventional and tax exempt), the Term Loan and its Credit Facility, including the effect of certain financing related fees, was 1.8%2.3% and 2.7%1.8% at December 31, 20132016 and December 31, 2012,2015, respectively.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)3. Notes Payable, Unsecured Notes and Credit Facility (Continued)20132016 are as follows (dollars in thousands): Secured
notes
payments Secured
notes
maturities Unsecured
notes
maturities Stated
interest rate
of unsecured
notes $ 16,986 $ — $ 150,000 5.375 % 16,722 603,044 — — 17,951 16,255 250,000 5.750 % 19,033 710,491 250,000 5.700 % $ 18,539 $ 709,491 $ — N/A 18,398 77,432 — — 17,793 76,916 — N/A 7,125 610,811 — — 4,696 655,386 — N/A 6,190 50,824 250,000 6.100 % 3,624 118,729 250,000 6.100 % 400,000 3.625 % 400,000 3.625 % 5,965 27,844 250,000 3.950 % 3,551 27,844 250,000 3.950 % 300,000 LIBOR + 1.450% 6,350 — 450,000 2.950 % 3,795 — 450,000 2.950 % 6,744 — 350,000 4.300 % 4,040 — 350,000 4.200 % 250,000 3.000 % 250,000 2.850 % 2024 4,310 — 300,000 3.500 % 2025 4,585 84,835 525,000 3.450 % 300,000 3.500 % 2026 4,859 — 475,000 2.950 % 300,000 2.900 % 85,771 1,126,062 — — % 213,685 620,080 350,000 3.900 % $ 207,235 $ 3,222,763 $ 2,600,000 $ 283,477 $ 2,293,281 $ 4,500,000 ourthe Company's option, in whole or in part, generally at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present value of the remaining scheduled payments of principal and interest discounted at a rate equal to the yield on U.S. Treasury securities with a comparable maturity plus a spread between 2520 and 45 basis points depending on the specific series of unsecured note,notes, plus accrued and unpaid interest to the redemption date. The indenture under which the Company's unsecured notes were issued, containsthe Company's Credit Facility agreement and the Company's Term Loan agreement contain limitations on the amount of debt the Company can incur or the amount of assets that can be used to secure other financing transactions, and other customary financial and other covenants, with which the Company was in compliance at December 31, 2013.20132016 and 2012,2015, the Company's charter had authorized for issuance a total of 280,000,000 and 140,000,000 shares of common stock respectively, and 50,000,000 shares of preferred stock.2013,2016, the Company:(i)issued 44,241 shares of common stock in connection with stock options exercised;(ii)issued 2,002 common shares through the Company's dividend reinvestment plan;(iii)issued 123,977 common shares in connection with stock grants;(iv)withheld 48,310 common shares to satisfy employees' tax withholding and other liabilities;(v)cancelled 7,653 shares of restricted common stock upon forfeiture;i. issued 131,499 shares of common stock in connection with stock options exercised; ii. issued 2,396 common shares through the Company's dividend reinvestment plan; iii. issued 197,018 common shares in connection with restricted stock grants and the conversion of performance awards to restricted shares; iv. issued 44,327 common shares in conjunction with the conversion of deferred stock awards; v. withheld 53,453 common shares to satisfy employees' tax withholding and other liabilities; vi. issued 11,348 shares through the Employee Stock Purchase Plan; and vii. canceled 4,262 shares of restricted stock upon forfeiture. AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)4. Equity (Continued)(vi)issued 14,889,706 common shares in connection with the closing of the Archstone Acquisition; and(vii)issued 9,260 shares through the Employee Stock Purchase Plan. With respect14,889,706 sharesCompany’s stock option, restricted stock and performance award grants during the year ended December 31, 2016 is not reflected on the Company’s Consolidated Balance Sheet as of common stock issued in conjunction with the Archstone Acquisition to Lehman (as defined below), in May 2013, Lehman sold 7,870,000 of the Company's common shares that it had receivedDecember 31, 2016, and will not be reflected until recognized as consideration for the Archstone Acquisition. Lehman received all of the net proceeds from the offering. See discussion in Note 14, "Subsequent Events" for discussion of Lehman selling all of its remaining holdings of the Company's common stock in 2014.August 2012,December 2015, the Company commenced a thirdfourth continuous equity program ("(“CEP III"IV”), under which the Company is authorized by its Board of Directors tomay sell up to $750,000,000 of shares$1,000,000,000 of its common stock from time to time during a 36-month period.time. Actual sales will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company's common stock and determinations by the Company of the appropriate sources of funding for the Company. In conjunction with CEP III,IV, the Company engaged sales agents who will receive compensation of approximately 1.5%up to 2.0% of the gross sales price for shares sold. DuringCEP IV also allows the year ended December 31, 2013,Company to enter into forward sale agreements up to $1,000,000,000 in aggregate sales price of its common stock. The Company will physically settle each forward sale agreement on one or more dates specified by the Company on or prior to the maturity date of that particular forward sale agreement, in which case the Company will expect to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the relevant forward sale price. However, the Company may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, the Company will pay the relevant forward seller, in the form of a reduced initial forward sale price, commission of up to 2.0% of the sales prices of all borrowed shares of common stock sold. In 2016, the Company had no sales under CEP IIIthe program and had $646,274,000 of shares that remain authorized under CEP III for issuance under this program.5. Archstone Acquisition On February 27, 2013, pursuant to an asset purchase agreement (the "Purchase Agreement") dated November 26, 2012, by and among the Company, Equity Residential and its operating partnership, ERP Operating Limited Partnership (together, "Equity Residential"), Lehman Brothers Holdings, Inc. ("Lehman", which term is sometimes used in this report to refer to Lehman Brothers Holdings, Inc., and/or its relevant subsidiary or subsidiaries), and Archstone Enterprise LP ("Archstone," which has since changed its name to Jupiter Enterprise LP), the Company, together with Equity Residential, acquired, directly or indirectly, all of Archstone's assets, including all of the ownership interests in joint ventures and other entities owned by Archstone, and assumed Archstone's liabilities, both known and unknown, with certain limited exceptions. Under the terms of the Purchase Agreement, the Company acquired approximately 40% of Archstone's assets and liabilities and Equity Residential acquired approximately 60% of Archstone's assets and liabilities (the "Archstone Acquisition"). The Company accounted for the acquisition as a business combination and recorded the purchase price to acquired tangible assets consisting primarily of direct and indirect interests in land and related improvements, buildings and improvements, construction in progress and identified intangible assets and liabilities, consisting primarily of the valueAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)5. Archstone Acquisition (Continued)of above and below market leases, and the value of in-places leases, at their fair values. The following table summarizes the Company's final purchase price allocation: Acquisition Date
Fair Value (dollars in thousands) $ 1,745,520 3,711,853 52,290 401,747 182,467 109,717 6,203,594 276,954 6,480,548 3,732,980 67,493 31,984 13,262 2,634,829 1,875,210 $ 759,619 (1)Includes amounts for in-place leases for development communities. To finalize the purchase price allocation, the Company looked to transaction activity and data received subsequent to the acquisition date which provided the Company better information about the fair value of assets acquired and/or liabilities assumed. Additionally, the Company undertook an effort to evaluate identified assumed obligations as being attributable to the Company, the joint ventures formed with Equity Residential or as being covered under indemnification provisions of the Archstone Acquisition. The final acquisition date fair value has been updated to reflect the additional fair value support, the Company's determination of ownership for assumed liabilities, verification of rights to certain assets acquired, and the Company's allocable portion of the final working capital acquired. The Company's final purchase price allocation represents its best estimate of the fair value as of the acquisition date. Changes to the initial purchase price allocation did not have a material impact on the Company's Consolidated Financial Statements. The Company engaged a third party valuation specialist to assist in the determination of the fair value of each of the component parts of the operating communities, consisting of land and land improvements, buildings and improvements, furniture, fixtures and equipment, above and below market leases and in-place lease-related intangibles.Archstone Acquisition (Continued) Land valuation was based on a market approach, whereby recent sales of similar properties were used, adjusted for differences due to location, the state of entitlement as well as the shape and size of the parcel. Improvements to the land were valued using a replacement cost approach and considered the structures and amenities included for the communities. The approach applied industry standard replacement costs adjusted for geographic specific considerations, and reduced by estimated depreciation. The value for furniture, fixtures and equipment was also determined based on a replacement cost approach, adjusted for estimated depreciation. The FF&E value estimate considered both costs for items in the apartment homes, such as appliances and furnishings, and those for common areas such as exercise facilities and on-site offices. The fair value of buildings acquired was estimated using the replacement cost approach, assuming the buildings were vacant at acquisition. The replacement cost approach considered the composition of structures in the acquired portfolio, adjusted for an estimate of depreciation. The estimate of depreciation was made considering industry standard information and depreciation curves for the identified asset classes. If the operating community is held in an unconsolidated joint venture, the Company valued its interest in the operating community based on its ownership interest. The value of the acquired lease-related intangibles considered the estimated cost of leasing the apartment homes as if the acquired buildings were vacant, as well as the value of the current leases relative to market-rate leases. The in-place lease value was determined using an average total lease-up time, the number of apartment homes and net revenues generated during the lease-up time. The lease-up period for an apartment community was assumed to be 12 months to achieve stabilized occupancy. Net revenues were developed using market rent considering actual leasing and industry rental rate data. The value of current leases relative to a market-rate lease was based on market rents obtained for market comparables, and considered a market derived discount rate. The Company applied a weighted average depreciation period for the in-place lease intangibles of six months. During the year ended December 31, 2013, the Company recognized $184,763,000 of depreciation expense for in-place lease intangibles, of which $179,733,000 is recorded as a component of depreciation expense on the accompanying Consolidated Statements of Comprehensive Income, and $5,030,000 is recorded as a component of income from discontinued operations on the accompanying Consolidated Statements of Comprehensive Income. The Company used a market approach where applicable, or otherwise an internal model to determine the fair value for the development land parcels acquired. The internal model applied a discounted cash flow analysis on the expected cash flows for each land parcel as if the expected multifamily rental community is constructed. The cash flow analysis incorporated assumptions that market participants would make, including the application of (i) discount factors to the estimated future cash flows of the underlying asset, (ii) a compound annual growth rate for the revenue from the operating community, and (iii) an exit capitalization rate. The Company valued the Development Communities under construction and/or in lease-up using either the invested capital basis, or an internal model, depending on the stage of construction completion. For Development Communities earlier in the construction process and not yet in lease-up, invested capital was the relevant metric and was considered reflective of the fair value of the community. For Development Communities that either had completed construction or that were substantially complete with construction and in lease-up, the Company used a capitalization rate model. The capitalization rate model considered the pro-forma NOI for the Development Community, relativeAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)5. Archstone Acquisition (Continued)to NOI for comparable operating communities, with adjustments for the location and/or quality of the community. A capitalization rate was applied to each Development Community's NOI which was based on a relevant capitalization rate observed in comparable acquisition or disposition transactions, if available, as adjusted by the Company for differences in fundamentals between the Development Community and the referenced comparable transactions. Given the significance of unobservable inputs, the Company has classified the valuations of the real estate assets acquired as Level 3 prices under the fair value hierarchy. Other assets acquired consisted primarily of working capital determined by the Company to be reflective of the fair value. During the year ended December 31, 2013, the Company recognized $83,594,000 acquisition related expenses associated with the Archstone Acquisition, with $39,543,000 reported as a component of equity in income (loss) of unconsolidated entities, and the balance in expensed acquisition, development, and other pursuit costs on the accompanying Consolidated Statements of Comprehensive Income.Consideration Pursuant to the Purchase Agreement and separate arrangements between the Company and Equity Residential governing the allocation of liabilities assumed under the Purchase Agreement, the Company's portion of consideration under the Purchase Agreement consisted of the following:•the issuance of 14,889,706 shares of the Company's common stock, valued at $1,875,210,000 as of the market's close on the closing date, February 27, 2013;•cash payment of approximately $760,000,000;•the assumption of consolidated indebtedness with a fair value of approximately $3,732,980,000, as of February 27, 2013, consisting of $3,512,202,000 principal amount of consolidated indebtedness and $220,777,000 representing the amount by which fair value of the aforementioned debt exceeds the principal face value, $70,479,000 of which excess related to debt the Company repaid concurrent with the Archstone Acquisition;•the acquisition with Equity Residential of interests in entities that have preferred units outstanding, some of which may be presented for redemption from time to time. The Company's 40% share of the fair value of the collective obligations, including accrued dividends on these outstanding Archstone preferred units as of February 27, 2013, was approximately $67,500,000; and•the assumption with Equity Residential of all other liabilities, known or unknown, of Archstone, other than certain excluded liabilities. The Company shares 40% of the responsibility for these liabilities. The Company valued the assumed mortgage notes payable using a discounted cash flow analysis that incorporated assumptions that market participants would use. This analysis reflects the contractual terms of the instrument, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The process also considered credit valuation adjustments to appropriately reflect the Company's nonperformance risk. The Company has concluded that the value of the assumedAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)5. Archstone Acquisition (Continued)mortgage notes payable are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy. The Company valued its obligation under the preferred units outstanding based on the current liquidation price of the respective preferred unit series, including accrued but unpaid dividends as appropriate. During the year ended December 31, 2013, the Company paid approximately $35,224,000 to redeem its proportionate share of a portion of the preferred interest obligations assumed in conjunction with the Archstone Acquisition. The Company used the pricing for the settlement as the fair value at February 27, 2013.Pro Forma Information The following table presents information for assets acquired in the Archstone Acquisition that is included in the Company's Consolidated Statement of Comprehensive Income from the closing date of the acquisition, February 27, 2013, through December 31, 2013 (in thousands). For the period including
February 28, 2013 through
December 31, 2013 $ 353,427 $ (105,589 ) (1)Amounts exclude acquisition costs for the Archstone Acquisition. The following table presents the Company's supplemental consolidated pro forma information as if the acquisition had occurred on January 1, 2012 (in thousands, except per share amounts): For the year ended
December 31, 2013 For the year ended
December 31, 2012 $ 1,534,868 $ 1,411,504 $ 348,160 $ 158,738 $ 2.67 $ 1.22 The pro forma consolidated results are prepared for informational purposes only, and are based on assumptions and estimates considered appropriate by the Company's management. However, they are not necessarily indicative of what the Company's consolidated financial condition or results of operations actually would have been assuming the Archstone Acquisition had occurred on January 1, 2012, nor do they purport to represent the consolidated financial position or results of operations for future periods.Investments in Archstone Consolidated Entities In connection with the Archstone Acquisition, the Company entered into a limited liability company agreement with Equity Residential to acquire and own directly and indirectly certain Archstone entities (the "Archstone Legacy Entities") which hold indirect interests in real estate assets, including 16 of the 54 consolidated communities acquired by the Company. As of December 31, 2013, the Archstone Legacy Entities have outstanding preferred interests held by unrelated third parties withAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)5. Archstone Acquisition (Continued)an aggregate liquidation preference of approximately $90,000,000 (including accrued but unpaid distributions), which are generally subject to redemption at the election of the holders of such interests. One of the Archstone Legacy Entities previously entered into tax protection arrangements with the holders of certain of the preferred interests, which arrangements may limit for varying periods of time the Company's and Equity Residential's ability to dispose of the properties held indirectly by the Archstone Legacy Entities or to refinance certain related indebtedness, without making payments to the holders of such preferred interests. Pursuant to this LLC agreement, the Company has agreed to bear 40% of the economic cost of these preferred redemption obligations. The Company is also obligated to fund the tax protection payments that may arise from its disposition or refinancing of properties of the Archstone Legacy Entities that were contributed to a subsidiary that will be consolidated by the Company. The fair value of the Company's proportionate share of preferred redemption obligations and other liabilities of approximately $37,000,000 is recorded as a component of accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets. As part of the Archstone Acquisition, the Company and Equity Residential have agreed with Lehman and Archstone to require the acquired Archstone Legacy Entities to have sufficient funds available to honor their redemption obligations and to make any payments under its tax protection arrangements, when they may become due. The principal assets indirectly held by the limited liability company that acquired the Archstone Legacy Entities are interests in a subsidiary of the Company's (the "AvalonBay Legacy Subsidiary") and a subsidiary of Equity Residential, each of which subsidiaries acquired certain properties formerly owned by the Archstone Legacy Entities. The Company consolidates the assets, liabilities and results of operations of the AvalonBay Legacy Subsidiary.Investments in Archstone Unconsolidated Entities In conjunction with the Archstone Acquisition, the Company acquired interests in three joint ventures, Multifamily Partners AC LP ("the U.S. Fund"), Multifamily Partners AC JV LP ("the AC JV"), and Brandywine Apartments of Maryland, LLC ("Brandywine"), which are discussed in Note 6, "Investments in Real Estate Entities." Additionally, through subsidiaries, the Company and Equity Residential entered into three limited liability company agreements (collectively, the "Residual JV"), discussed further in Note 6, "Investments in Real Estate Entities."6. Investments in Real Estate Entitiesexcept as otherwise noted below, as discussed in Note 1, "Organization and“Organization, Basis of Presentation" and Significant Accounting Policies,” underPrinciples of Consolidation. The significant accounting policies of the Company's unconsolidated real estate entities are consistent with those of the Company in all material respects.2013,2016, the Company had investments in the following real estate entities:•AvalonBay Value Added Fund, LP ("Fund I")—In March 2005, the Company formed Fund I, a private, discretionary real estate investment vehicle, which acquired and operates communities in the Company's markets. Fund I served as the principal vehicle through which the CompanyTable of ContentsAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)acquired investments in apartment communities, subject to certain exceptions, until March 2008. Fund I has a term that expires in March 2015, after having exercised two one-year extension options. Fund I has nine institutional investors, including the Company. A significant portion of the investments made in Fund I by its investors were made through AvalonBay Value Added Fund, Inc., a Maryland corporation that qualifies as a REIT under the Code (the "Fund I REIT"). A wholly-owned subsidiary of the Company is the general partner of Fund I and has a 15.2% combined general partner and limited partner equity interest. Excluding costs incurred in excess of our equity in the underlying net assets of Fund I, the Company has an equity investment of $14,209,000 in Fund I and the Fund I REIT, net of distributions and excluding the purchase by the Company of a mortgage note secured by a Fund I community. The Company receives asset management fees, property management fees and redevelopment fees, as well as a promoted interest if certain thresholds are met. During 2013, Fund I sold seven communities:•Avalon Yerba Buena, located in San Francisco, CA, for $103,000,000;•Avalon at Civic Center, located in Norwalk, CA, for $45,844,000;•Avalon at Cedar Place, located in Columbia, MD, for $26,000,000;•Avalon Sunset, located in Los Angeles, CA, for $25,800,000;•Avalon Crystal Hill, located in Pomona, NY, for $33,050,000;•Avalon Centerpoint, located in Baltimore, MD, for $75,250,000; and•Middlesex Crossing, located in Billerica, MA, for $40,250,000. The Company's proportionate share of the gain in accordance with GAAP recognized on the sale of these seven communities was $11,484,000.Subsidiaries of Fund I have four loans secured by individual assets (including a mortgage owned by the Company) with aggregate amounts outstanding of $66,132,000. Fund I subsidiary loans have varying maturity dates (or dates after which the loans can be prepaid without penalty), ranging from October 2014 to September 2016. These mortgage loans are secured by the underlying real estate. The mortgage loans are payable by the subsidiaries of Fund I from operating cash flow or disposition proceeds from the underlying real estate. The Company has not guaranteed the debt of Fund I, nor does the Company have any obligation to fund this debt should Fund I be unable to do so.In addition, as part of the formation of Fund I, the Company provided to one of the limited partners a guarantee. The guarantee provides that if, upon final liquidation of Fund I, the total amount of all distributions to that partner during the life of Fund I (whether from operating cash flow or property sales) does not equal a minimum of the total capital contributions made by that partner, then the Company will pay the partner an amount equal to the shortfall, but in no event more than 10% of the total capital contributions made by the partner (maximum of approximately $7,500,000 as of December 31, 2013). Under the expected Fund I liquidation scenario, as of December 31, 2013, the expected realizable value of the real estate assets owned by Fund I is considered adequate to avoid payment under such guarantee to that partner. The estimated fair value of, and the Company's obligation under this guarantee, both at inceptionAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)and as of December 31, 2013, was not significant and therefore the Company has not recorded any obligation for this guarantee as of December 31, 2013.•LP ("L.P. (“Fund II"II”)—In September 2008, the Company formed Fund II, a private, discretionary real estate investment vehicle which acquired and operates communities in the Company's markets. Fund II served as the exclusive vehicle through which the Company acquired investment interests in apartment communities, subject to certain exceptions, through the close of its investment period in August 2011. Fund II has six institutional investors, including the Company. One of the Company's wholly owned subsidiaries is the general partner of Fund II and at December 31, 2016, excluding costs incurred in excess of our equity in the underlying net assets of Fund II, the Company has made an equity investment of $93,714,000$19,737,000 (net of distributions), representing a 31.3% combined general partner and limited partner equity interest.the year ended December 31, 2013,2016, Fund II sold Avalon Rothbury,three communities containing an aggregate of 1,514 apartment homes:Gaithersburg,El Cajon, CA, for $158,000,000,$39,600,000. $61,400,000.$2,790,000.13four loans secured by individual assets with aggregate amounts outstanding of $467,959,000,$128,008,000, with maturity dates that vary from November 20142017 to SeptemberApril 2019. The mortgage loans are payable by the subsidiaries of Fund II from operating cash flow or disposition proceeds from the underlying real estate. The Company has not guaranteed repayment of this debt, nor does the Company have any obligation to fund this debt should Fund II be unable to do so.In addition, as part of the formation of Fund II, the Company provided to one of the limited partners a guarantee. The guarantee provides that if, upon final liquidation of Fund II, the total amount of all distributions to that partner during the life of Fund II (whether from operating cash flow or property sales) does not equal a minimum of the total capital contributions made by that partner, then the Company will pay the partner an amount equal to the shortfall, but in no event more than 10% of the total capital contributions made by the partner (maximum of approximately $8,910,000 as of December 31, 2013). Under the expected Fund II liquidation scenario, as of December 31, 2013, the expected realizable value of the real estate assets owned by Fund II is considered adequate to avoid payment under such guarantee to that partner. The estimated fair value of, and the Company's obligation under, this guarantee, both at inception and as of December 31, 2013, was not significant and therefore the Company has not recorded any obligation for this guarantee as of December 31, 2013.•CVP I, LLC—In February 2004, the Company entered into a joint venture agreement with an unrelated third-party for the development of Avalon Chrystie Place, a 361 apartment-home community located in New York, New York, for which construction was completed in 2005. The Company holds a 20% equity interest in the venture (with a right to 50% of distributions after achievement of a threshold return, which was achieved in 2012 and 2013). The Company is the managing member of CVP I, LLC, however, property management services at the community are performed by an unrelated third party.As of December 31, 2013, CVP I, LLC has outstanding tax-exempt, variable rate bonds maturing in November 2036 in the amount of $117,000,000 which have permanent credit enhancement.Table of ContentsAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)The Company agreed to guarantee, under limited circumstances, the repayment to the credit enhancer of any advances it may make in fulfillment of CVP I, LLC's repayment obligations under the bonds. The Company's 80% partner in this venture agreed that it will reimburse us its pro rata share of any amounts paid relative to the outstanding guaranteed obligation. The estimated fair value of the Company's obligation under the outstanding guarantee, both at inception and as of December 31, 2013, was not significant. As a result the Company has not recorded any obligation associated with the guarantee at December 31, 2013.•MVP I, LLCArchstone Multifamily Partners AC LP (the “U.S. Fund”)—In December 2004, the Company entered into a joint venture agreement with an unrelated third-party for the development of Avalon at Mission Bay North II. Construction of Avalon at Mission Bay North II, a 313 apartment-home community located in San Francisco, California, was completed in December 2006. The Company holds a 25% equity interest in the venture (with a right to 45% of distributions after achievement of a threshold return, which was achieved in 2013). The Company is responsible for the day-to-day operations of the community and is the management agent subject to the terms of a management agreement. In December 2007, MVP I, LLC executed a fixed-rate conventional loan, which is secured by the underlying real estate assets of the community, for $105,000,000. The loan is a fixed rate, interest-only note bearing interest at 6.02%, maturing in December 2015. The Company has not guaranteed the debt of MVP I, LLC, nor does the Company have any obligation to fund this debt should MVP I, LLC be unable to do so.•Arna Valley View LP—In connection with the municipal approval process to develop a consolidated community, the Company entered into a limited partnership in February 1999 to develop, finance, own and operate Arna Valley View, a 101 apartment-home community in Arlington, Virginia. This community has affordable rents for 100% of the apartment homes related to the tax-exempt bond financing and tax credits used to finance construction of the community. A subsidiary of the Company is the general partner of the partnership with a 0.01% ownership interest. The Company manages the community and is subject to a management agreement. As of December 31, 2013, Arna Valley View has $4,829,000 of 6.25% fixed rate, tax-exempt bonds outstanding, which mature in November 2030. In addition, Arna Valley View has $5,836,000 of 4% fixed rate county bonds outstanding that mature in December 2030. Arna Valley View's debt is neither guaranteed by, nor recourse, to the Company. Due to the Company's limited ownership in this venture and the terms of the management agreement regarding the rights of the limited partners, it is accounted for using the cost method.•Aria at Hathorne Hill, LLC—In the second quarter of 2007, a wholly-owned taxable REIT subsidiary of the Company entered into an LLC agreement with a joint venture partner to develop 64 for-sale town homes in Danvers, Massachusetts on an out parcel adjacent to our Avalon Danvers rental apartment community. Approximately 30% of the homes have been built and sold. The out parcel was zoned for for-sale activity, and was contributed to the LLC by a subsidiary of the Company in exchange for a 50% ownership interest. During 2011, the Company concluded that because the market for for-sale housing development had not improved as expected, its investment in the venture was impaired and that impairment was other than temporary. As a result, the Company recognized a charge of $1,955,000 for the impairment of the investment in the unconsolidated joint venture, which holds nondepreciable real estate assets. In December 2011, the Company acquired the note that the venture had with a third party lender for $1,700,000. In 2013, the venture repaid the balance of the note and theAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)Company sold its interest to the unrelated third party partners in the venture, recognizing a gain in accordance with GAAP of $975,000. In conjunction with the Archstone Acquisition, the Company acquired interests in the following entities:•As of December 31, 2013, theThe U.S. Fund owns nine communities containing 1,726 apartment homes, onehas a term that expires in July 2023, assuming the exercise of which includes a marina containing 229 boat slips. Through subsidiariestwo, one-year extension options. The U.S. Fund has six institutional investors, including the Company. The Company ownsis the general partner of the fundU.S. Fund and, holdsat December 31, 2016 excluding costs incurred in excess of equity in the underlying net assets of the U.S. Fund, the Company has an equity investment of $49,693,000 (net of distributions), representing a 28.6% combined general partner and limited partner equity interest. The Company acquired its interest in the fund.nineeight loans secured by individual assets with aggregate amounts outstanding in the aggregate of $327,849,000$274,255,000, with varying maturity dates rangingthat vary from JanuaryFebruary 2019 to November 2022. The mortgage loans are payable by the subsidiaries of the U.S. Fund with operating cash flow or disposition proceeds from the underlying real estate. The Company has not guaranteed the debt of the U.S. Fund, nor does the Company have any obligation to fund this debt should the U.S. Fund be unable to do so.•in which the Company acquired Archstone's 20% ownership interest. The AC JVthat was formed in 2011 and ashas four institutional investors, including the Company. Excluding costs incurred in excess of equity in the underlying net assets of the AC JV, at December 31, 2013 owned two operating apartment communities containing 818 apartment homes2016 the Company has an equity investment of $50,674,000 (net of distributions), representing a 20.0% equity interest. The Company acquired its interest in Cambridge, MA and Herndon, VA. the AC JV as part of the Archstone Acquisition.("ROFO"(“ROFO”) to the AC JV in connection with additional opportunities to acquire or develop additional interests in multifamily real estate assets within a specified geographic radius of the existing assets, generally one mile or less. During the year ended December 31, 2013, the Company provided the AC JV with the opportunity to acquire a parcel of land owned by the Company as required in the right of first offer provisions for the joint venture. The AC JV exercised its right to acquire the land parcel for development and commenced construction of an additional apartment community located in Cambridge, MA. The Company sold the parcel of land to the AC JV in exchange for a cash payment and a capital account credit, and is overseeing the development in exchange for a developer fee. The Company owns one additional land parcel for the development of 301 apartment homes, classified as a Development Right in Cambridge, MA, acquired as part of the Archstone Acquisition that is subject to ROFO restrictions. The ROFO restriction expires in 2019.2013,2016, subsidiaries of the AC JV have eight unsecured loans outstanding in the aggregate of $162,300,000 which mature in JulyAugust 2021, and which were made by the investors in the venture, including the Company, in proportion to the investors' respective equity ownership interest. The unsecured loans are payable by the subsidiaries of the AC JV with operating cash flow from the venture. The Company has not guaranteed the debt of the AC JV, nor does the Company have any obligation to fund this debt should the AC JV be unable to do so.•DC.D.C. The community is managed by a third party. Brandywine is comprised of five members who hold various interests in the joint venture. In conjunction with the Archstone Acquisition, theThe Company acquired a 26.1% equity interest in the venture, and subsequently purchased an additional 2.6% interest, and as of December 31, 2013, holds a 28.7% equity interest in the venture.Brandywine.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)$24,839,000$23,307,000 fixed rate mortgage loan that is payable by the venture. The Company has not guaranteed the debt of Brandywine, nor does the Company have any obligation to fund this debt should Brandywine be unable to do so.•Through the plan to divest (to third parties or to the Company or Equity Residential) over timehave substantially divested (the "Residual Assets"“Residual Assets”), and (ii) various liabilities of Archstone that the Company and Equity Residential agreed to assume in conjunction with the Archstone Acquisition (the "Residual Liabilities"“Residual Liabilities”). The Residual Assets include interests in apartment communities in Germany (including through a fund which Archstone managed);included a 20.0% interest in Lake Mendota Investments, LLC and Subsidiaries ("SWIB"(“SWIB”), a joint venture which owns and manages six apartmentdisposed the last of its communities with 1,902 apartment homes in the United States; two land parcels; and2015, as well as various licenses, insurance policies, contracts, office leases and other miscellaneous assets.Archstone'sArchstone’s operations for periods before the close of the Archstone Acquisition, except for (i) claims that principally relate to the physical condition of the assets acquired directly by usthe Company or Equity Residential, which generally remain the sole responsibility of usthe Company or Equity Residential, as applicable, and (ii) certain tax and other litigation between Archstone and various equity holders in Archstone related to periods before the close of the Archstone Acquisition, and claims which may arise due to changes in the capital structure of Archstone that occurred prior to closing, for which Lehmanthe seller has agreed to indemnify the Company and Equity Residential. The Company and Equity Residential jointly control the Residual JV and the Company holds a 40%40.0% economic interest in the assets and liabilitiesResidual JV.Residual JV.AsArchstone Acquisition the Company entered into a limited liability company agreement with Equity Residential, through which it assumed obligations of December 31, 2013, SWIB has two loans and draws on a credit facility secured by individual assets with amounts outstandingArchstone in the aggregateform of $187,021,000 with varying maturity dates, ranging from December 2014 to December 2029.preferred interests, some of which are governed by tax protection arrangements (the “Legacy JV”). The Company has not guaranteeda 40.0% interest in the debtLegacy JV. During the years ended December 31, 2016, 2015 and 2014, the Legacy JV redeemed certain of SWIB, nor doesthe preferred interests and paid accrued dividends, of which the Company's portion was $1,960,000, $14,410,000 and $6,300,000, respectively. At December 31, 2016, the remaining preferred interests had an aggregate liquidation value of $39,921,000, the Company's share of which is included in accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets.haveentered into a joint venture agreement to purchase land and pursue entitlements and pre-development activity for a mixed-use development project in Sudbury, MA, including multifamily apartment homes, retail, senior housing and age-restricted housing. The Company has a 60.0% ownership interest in the venture. The venture is considered a VIE, though the Company is not considered to be the primary beneficiary because the Company and its third party partner share control of the joint venture as approval from both parties is required for all significant aspects of the venture's activities including, but not limited to, changes in the ownership or capital structure of the partnership, acquisitions or dispositions by the venture and decisions about the pre-development and related activities to be performed by the venture. At December 31, 2016, the Company has an equity investment of $6,680,000 in the venture, representing the Company's share of land acquisition and pre-development costs, net of distributions of proceeds from land sales by the venture.obligationchanges to fund this debt should SWIB be unablethe budget to do so.excluding joint venture entities the Company formed with Equity Residential as part of the Archstone Acquisition, as of the dates presented, excluding amounts associated with development joint ventures, the Residual JV and Legacy JV (dollars in thousands): 12-31-13 12-31-12 12/31/16 12/31/15 $ 1,890,496 $ 1,337,084 $ 954,493 $ 1,392,833 402,644 73,252 49,519 57,044 �� $ 2,293,140 $ 1,410,336 $ 1,004,012 $ 1,449,877 $ 1,251,067 $ 943,259 Mortgage notes payable, net and credit facility $ 689,573 $ 947,205 29,677 20,405 16,537 20,471 1,012,396 446,672 297,902 482,201 $ 2,293,140 $ 1,410,336 $ 1,004,012 $ 1,449,877 AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)excluding joint venture entities the Company formed with Equity Residential as part of the Archstone Acquisition, for the years presented, excluding amounts associated with development joint ventures, Avalon Clarendon, the Residual JV and Legacy JV (dollars in thousands): For the year ended 12/31/16 12/31/15 12/31/14 Rental and other income $ 131,901 $ 173,578 $ 198,939 Operating and other expenses (50,945 ) (67,962 ) (80,301 ) Gain on sale of communities 196,749 98,899 333,221 Interest expense, net (1) (45,886 ) (45,517 ) (61,458 ) Depreciation expense (34,471 ) (45,324 ) (52,116 ) Net income $ 197,348 $ 113,674 $ 338,285 (1) Amounts for the years ended December 31, 2016, 2015 and 2014 includes charges for prepayment penalties and write-offs of deferred financing costs of $12,659, $4,481 and $10,528, respectively. For the year ended 12-31-13 12-31-12 12-31-11 $ 208,979 $ 172,076 $ 160,066 (86,247 ) (73,955 ) (71,926 ) 96,152 106,195 22,246 (61,404 ) (53,904 ) (50,530 ) (61,002 ) (47,748 ) (47,920 ) $ 96,478 $ 102,664 $ 11,936 (1)Amount for the year ended December 31, 2012 includes $44,700 of gain recognized by the joint venture associated with the Company's acquisition of Avalon Del Rey from its joint venture partner.III and AVA North Point, and the acquisition of the U.S. Fund, II,AC JV and Brandywine, the Company incurred costs in excess of its equity in the underlying net assets of the respective investments. These costs represent $5,439,000$38,015,000 and $40,978,000 at December 31, 20132016 and $7,342,000 at December 31, 20122015, respectively, of the respective investment balances. For the year ended 12-31-13 12-31-12 12-31-11 $ 10,924 $ 7,041 $ 2,204 6,206 2,130 (1,053 ) 5,783 5,394 4,493 1,137 493 (626 ) 181 4,000 102 378 1,856 — (661 ) — — 2,569 — — 661 — — (38,332 ) — — $ (11,154 ) $ 20,914 $ 5,120 (1)Equity in income for the years ended December 31, 2013, 2012 and 2011 includes the Company's proportionate share of the gain on the sale of Fund I assets of $11,484, $7,971, and $3,063, respectively.(2)Equity in income for 2013 includes the Company's proportionate share of the gain on the sale of one Fund II asset of $2,790.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)6. Investments in Real Estate Entities (Continued)(3)Equity in income from this entity for 2013, 2012, and 2011 includes $5,527, $5,260, and $5,078, respectively, relating to the Company's recognition of its promoted interest.(4)Equity in income from this entity for 2013 includes $516 relating to the Company's recognition of its promoted interest.(5)During 2012, the Company purchased its joint venture partner's interest in this venture.(6)The Company's equity in income for this entity represents its residual profits from the sale of the community.(7)The Company's joint venture partner's interest was acquired in conjunction with the Archstone Acquisition.(8)Equity in income for the Residual JV includes certain expensed Archstone Acquisition costs borne by the venture. For the year ended 12/31/16 12/31/15 12/31/14 Fund I (1) $ 87 $ 871 $ 475 Fund II (2) 49,882 32,211 24,808 U.S. Fund (3) 15,635 2,052 342 AC JV 1,445 511 1,579 MVP I, LLC (4) 1,627 22,453 1,651 Brandywine 10 (1,474 ) 828 CVP I, LLC (5) 9 1,812 113,127 Residual JV (1,374 ) 11,582 3,547 Avalon Clarendon (6) (2,359 ) — — Arna Valley View LP (1) — — 2,406 Juanita Village (1) — — 3 Total $ 64,962 $ 70,018 $ 148,766 (1) The Company's equity in income for this entity represents its residual profits from the sale of the community, or liquidation of the venture. (2) (3) Equity in income for the year ended December 31, 2016 includes the Company's proportionate share of the gain on the sale of U.S. Fund assets of $16,568. (4) Equity in income for the years ended December 31, 2015 and 2014 includes $21,340 and $930, respectively, relating to the Company's recognition of its promoted interest. For 2015, $20,680 was from the joint venture partner upon agreement to modify the joint venture agreement to eliminate the Company's promoted interest from associated distribution for future return calculations. (5) Equity in income for the years ended December 31, 2015 and 2014 includes $1,289 and $61,218, respectively, relating to the Company's recognition of its promoted interest. Amount for 2014 also includes $50,478 related to the disposition of Avalon Chrystie Place. (6) In September 2016, the Company and its venture partner established separate legal ownership of Avalon Clarendon, after which the Company reported the operating results of Avalon Clarendon as part of its consolidated operations. In2013,31, 2016, in addition to Avalon Clarendon discussed above, the Company acquired Arboretum at Burlington,four consolidated communities:Burlington, MA. Arboretum at BurlingtonHoboken, NJ, contains 312217 apartment homes and was acquired for a purchase price of $79,850,000. The$129,700,000. In conjunction with the acquisition, the Company assumed a fixed rate secured mortgage note with a principal balance of $67,904,000 and a contractual interest rate of 4.18% maturing in December 2020.this acquisitionthese acquisitions as a business combinationcombinations and recorded the acquired assets and assumed liabilities, including identifiable intangibles, based onat their fair values. The Company looked toused third party pricing or internal models for the values of the land, a valuation model for the values of the buildings and debt, and an internal model to determine the fair values of the remaining real estate assets and in-place leases. Given the heterogeneous nature of multifamily real estate, the fair values for the land, debt, real estate assets and in-place leases incorporated significant unobservable inputs and therefore are considered to be Level 3 prices within the fair value hierarchy. The Company expenses transaction costs associated with acquisition activity as they are incurred. 20132016 and 2012,2015, all of which were accounted for as well as costs associated with the Archstone Acquisition,business combinations, totaled $44,052,000$5,139,000 and $9,593,000, respectively,$3,806,000, respectively. These amounts are reported as a component of expensed acquisition, development and other pursuit costs on the accompanying Consolidated Statements of Comprehensive Income. To the extent the Company received amounts related to acquired communities for periods prior to their acquisition, the Company reported these receipts, net with expensed acquisition costs. In 2014, the Company received amounts related to communities acquired in the Archstone Acquisition, for periods prior to the Company’s ownership, in excess of acquisition costs incurred, resulting in 2011 were not significant.7. 6. Real Estate Disposition Activities2013,2016, the Company sold eightseven wholly-owned operating communities, containing an aggregate of 3,2992,051 apartment homes for an aggregate gross sales price of $932,800,000$522,850,000 and an aggregate gain in accordance withAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)7. Real Estate Disposition Activities (Continued)$278,231,000. $370,301,000. In addition during 2016, the Company sold other real estate, including one land parcel which was sold to a joint venture in which we own a 55.0% interest, and ancillary real estate, for an aggregate sales price of $41,178,000, resulting in an aggregate gain in accordance with GAAP of $10,224,000.Community Name Location Debt Eaves Trumbull Trumbull, CT Q116 340 $ — $ 70,250 $ 68,665 Avalon Essex Peabody, MA Q216 154 — 45,100 44,085 Eaves Nanuet Nanuet, NY Q316 504 — 147,000 145,722 Avalon Shrewsbury Shrewsbury, MA Q316 251 — 60,500 59,263 Avalon at Freehold Freehold, NJ Q316 296 — 68,000 66,320 Avalon Brandemoor I & II Lynnwood, WA Q416 506 — 132,000 128,021 Other real estate dispositions (2) multiple Q1-Q416 N/A — 41,178 20,641 Total of 2016 asset sales 2,051 $ — $ 564,028 $ 532,717 Total of 2015 asset sales 851 $ — $ 289,320 $ 282,163 Total of 2014 asset sales 1,337 $ 16,341 $ 304,250 $ 281,125 (1) Net cash proceeds does not include the sale of an affordable restricted apartment building adjacent to one of the Company's Development Communities, for which consideration was received in the form of a mortgage note, discussed below. (2) Primarily composed of the sales of land to AVA North Point discussed in Note 5, “Investments in Real Estate Entities” and ancillary real estate discussed in note (1). Location Period
of sale Apartment
homes Debt Gross
sales price Net
proceeds Arlington, VA Q113 827 $ — $ 197,150 $ 196,583 Rockville, MD Q113 564 — 135,250 131,338 Dublin, CA Q213 305 — 105,400 104,218 Ventura, CA Q413 316 — 82,000 80,668 New Rochelle, NY Q413 588 — 210,000 206,138 Wheaton, MD Q413 243 — 57,000 56,306 San Jose, CA Q413 456 — 146,000 144,191 3,299 $ — �� $ 932,800 $ 919,442 1,578 $ — $ 280,550 $ 274,018 1,038 $ — $ 292,965 $ 287,358
the note. The note is secured by the underlying real estate, and is reported as a component of prepaid expenses and other assets on the Consolidated Balance Sheets. The Company expects to receive $16,891,000 during 2017, with the balance of the note to be received over a period of up to 35 years.(1)TotalDuring 2016, the Company completed the construction of 2013 asset sales excludesand sold an affordable restricted apartment building, containing 77 apartment homes, which is adjacent to one of the dispositionCompany's Development Communities. The Company received consideration for the sale in the form of development rights located in Hingham, MAa mortgage note, recording $18,643,000 to reflect the net present value of the note, determined based on the estimated contractual cash flows and Brooklyn, NY, for total net proceedsa discount rate commensurate with the nature of $1,313.2013,2016, the Company had one communitytwo ancillary land parcels that qualified as held for sale.20132014 through December 31, 20132016 and the real estate assets that qualifiedwhich were classified as discontinued operations and held for sale and discontinued operations as of and for periods prior to December 31, 2013, have been presented as income from discontinued operations in the accompanying Consolidated Statements of Comprehensive Income. Accordingly, certain reclassifications have been made to prior years to reflectThe operations for any real estate assets sold from January 1, 2014 through December 31, 2016 that were not classified as held for sale or discontinued operations consistent with current year presentation. For the year ended 12-31-13 12-31-12 12-31-11 $ 42,874 $ 63,406 $ 89,290 (12,661 ) (19,437 ) (36,996 ) — (133 ) (4,808 ) — (602 ) (3,880 ) (13,500 ) (16,414 ) (23,541 ) $ 16,713 $ 26,820 $ 20,065 For the year ended 12/31/16 12/31/15 12/31/14 Rental income $ — $ — $ 579 Operating and other expenses — — (269 ) Income from discontinued operations $ — $ — $ 310 8. 7. Commitments and Contingencies As of December 31, 2013, thehashad employment agreements with threetwo executive officers which expireexpired on December 31, 2015. Under2015, in accordance with their terms. At December 31, 2016, the Company does not have any employment agreements if the Company terminates thewith executive without cause the executive will be entitled to a multiple of his covered compensation,officers.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)8. Commitments and Contingencies (Continued)which is defined as base salary plus annual cash bonus. For two of the executives, the multiple is two times (three if the termination is in connection with a sale of the Company) and for one of the executives the multiple is one time (two if the termination is in connection with a sale of the Company). The employment agreements generally provide that it would be considered a termination without cause if the executive's title or role is reduced except as permitted by the agreement. The agreements provide, as do the standard restricted stock and option agreements used by the Company for its compensation programs, that upon a termination without cause the executive's restricted stock and options will vest."Program"“Program”), which applies only in connection with a sale of the Company for the benefit of those officers of the Company who do not have employment agreements. Under the Program, in the event an officer who is not otherwise covered by a severance arrangement is terminated (other than for cause), or the officer chooses to terminate his or her employment for good reason (as defined), in either case within 18 months following a sale event (as defined) of the Company, such officer will generally receive a cash lump sum payment equal to a multiple of the officer's covered compensation (base salary plus annual cash bonus). The multiple is one times for vice presidents and senior vice presidents, and two times for executive vice presidents. The officer's restricted stock and options would also vest. Costs related to the Company's employment agreements and the Program are deferred and recognized over the requisite service period when considered by management to be probable and estimable.subjectcurrently seeking reconsideration of that decision as well as certification to appeal.legalclaims and/or administrative proceedings and claimsunrelated to the Edgewater casualty loss that arise in the ordinary course of its business. These matters are frequently covered by insurance. If it has been determined that a loss is probable to occur andWhile no assurances can be reasonably estimated,given, the estimated amount of the loss is recorded in the financial statements. While the resolutionCompany does not currently believe that any of these other outstanding litigation matters, cannot be predicted with certainty, management currently believesindividually or in the final outcome of such mattersaggregate, will not have a material adverse effect on theits financial positioncondition or results of operations of the Company. In instances where the Company has a gain contingency associated with legal proceedings, the Company records a gain in the financial statements, to the extent of a loss recovery, when it is deemed probable to occur, can be reasonably estimated and is considered to be collectible.operations.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)8. Commitments and Contingencies (Continued)1116 apartment communities three communities under construction and two commercial properties which are located on land subject to land leases expiring between October 2026 and March 2142. Of theseThe leases 14for 13 apartment communities, of which two represent dual-branded communities with one underlying land lease, and the two commercial properties, are accounted for as operating leases recognizing rental expense on a straight-line basis over the lease term. These leases have varying escalation terms, and fourfive of these leases have purchase options exercisable through 2095. The Company incurred costs of $17,996,000, $17,604,000$23,343,000, $21,295,000 and $16,887,000$21,664,000 in the years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively, related to operating leases. Two of the Development CommunitiesThree apartment communities are located on land subject to a land lease which are accounted for as capital leases, of which two represent dual-branded communities with one underlying capital land lease. In addition, the Company is party to a lease for a portion of the parking garage adjacent to a lease-up community, accounted for as a capital lease. The Company has a total lease obligation of $33,879,000$37,458,000 reported as a component of accrued expenses and other liabilities. Each of these land leases accounted for as capital leases have options for the Company to purchase options that become exercisablethe land at varying times through 2046.some point during the lease terms which expire in 2046 and 2086. In addition, the Company is party to 13 leases certain office space,for its corporate and regional offices with varying terms through 2027, all of which isare accounted for as operating leases. Payments due by period 2017 2018 2019 2020 2021 Thereafter Operating Lease Obligations $ 22,818 $ 23,348 $ 23,449 $ 21,245 $ 19,776 $ 1,203,957 Capital Lease Obligations (1) (2) 18,874 1,073 1,075 1,077 1,080 45,058 $ 41,692 $ 24,421 $ 24,524 $ 22,322 $ 20,856 $ 1,249,015 (1) Aggregate capital lease payments include $27,374 in interest costs, with the timing of certain lease payments for capital land leases determined by completion of the construction of the associated apartment community. (2) Capital lease assets of $39,015 and $39,019 as of December 31, 2016 and 2015, respectively, are included as a component of land and improvements or building and improvements on the accompanying Consolidated Balance Sheets. Payments due by period 2014 2015 2016 2017 2018 Thereafter $ 19,801 $ 19,628 $ 19,557 $ 19,034 $ 19,157 $ 1,248,694 1,863 1,885 19,083 848 848 39,934 $ 21,664 $ 21,513 $ 38,640 $ 19,882 $ 20,005 $ 1,288,628 (1)Aggregate capital lease payments include $30,519 in interest costs.9. 8. Segment Reportingst, the Company determines which of its communities fall into each of these categories and generally maintains that classification unless disposition or redevelopment plans regarding a community change, throughout the year for the purpose of reporting segment operations.•and operating expenses as of the beginning of the prior year. ForThe Established Communities for the year 2013, the Established Communitiesended December 31, 2016, are communities that are consolidated for financial reporting purposes, had stabilized occupancy and operating expenses as of January 1, 2012,2015, are not conducting or planning to conduct substantial redevelopment activities and are not held for sale or planned for disposition within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 95% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.•AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)9. Segment Reporting (Continued)•final certificate of occupancy for the entire community, and where substantial redevelopment is in progress or is planned to begin during the current year and communities under lease-up that had not reached stabilized occupancy, as defined above, as of January 1, 2013.("NOI"(“NOI”) as the primary financial measure for Established Communities and Other Stabilized Communities. NOI is defined by the Company as total property revenue less direct property operating expenses.expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, investments and investment management expenses, expensed acquisition, development and other pursuit costs, net of recoveries, interest expense, net, loss (gain) on extinguishment of debt, net, general and administrative expense, equity in income of unconsolidated real estate entities, depreciation expense, corporate income tax expense, casualty and impairment (gain) loss, net, gain on sale of real estate assets, gain on sale of discontinued operations, income from discontinued operations and net operating income from real estate assets sold or held for sale, not classified as discontinued operations. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income.2013, 20122016, 2015 and 20112014 is as follows (dollars in thousands): For the year ended 12-31-13 12-31-12 12-31-11 $ 352,771 $ 423,562 $ 441,370 41,554 31,911 30,550 3,990 6,071 5,126 45,050 11,350 2,967 172,402 136,920 167,814 51,000 — — 14,921 1,179 1,940 39,573 34,101 29,371 11,154 (20,914 ) (5,120 ) 560,215 243,680 226,728 — 1,449 14,052 (278,471 ) (146,591 ) (294,806 ) (16,713 ) (26,820 ) (20,065 ) — (14,194 ) — $ 997,446 $ 681,704 $ 599,927 For the year ended 12/31/16 12/31/15 12/31/14 Net income $ 1,033,708 $ 741,733 $ 697,327 Indirect operating expenses, net of corporate income 61,403 56,973 49,055 Investments and investment management expense 4,822 4,370 4,485 Expensed acquisition, development and other pursuit costs, net of recoveries 9,922 6,822 (3,717 ) Interest expense, net (1) 187,510 175,615 180,618 Loss (gain) on extinguishment of debt, net 7,075 (26,736 ) 412 General and administrative expense 45,771 42,774 41,425 Equity in income of unconsolidated real estate entities (64,962 ) (70,018 ) (148,766 ) Depreciation expense (1) 531,434 477,923 442,682 Income tax expense 305 1,483 9,368 Casualty and impairment (gain) loss, net (3,935 ) (10,542 ) — Gain on sale of real estate assets (384,847 ) (125,272 ) (85,415 ) Gain on sale of discontinued operations — — (37,869 ) Income from discontinued operations — — (310 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations (2) (17,509 ) (34,133 ) (49,708 ) Net operating income $ 1,410,697 $ 1,240,992 $ 1,099,587 (1) Includes amounts associated with assets sold or held for sale, not classified as discontinued operations. (2) Represents NOI from real estate assets sold or held for sale as of December 31, 2016 that are not classified as discontinued operations. For the year ended 12/31/2016 12/31/2015 12/31/2014 Rental income from real estate assets sold or held for sale, not classified as discontinued operations $ 28,430 $ 55,674 $ 80,704 Operating expenses from real estate assets sold or held for sale, not classified as discontinued operations (10,921 ) (21,541 ) (30,996 ) Net operating income from real estate assets sold or held for sale, not classified as discontinued operations $ 17,509 $ 34,133 $ 49,708 as ofat the beginning of the given calendar year. Therefore, each year the composition of communities within each business segment is adjusted. Accordingly, the amounts between years are not directly comparable. Segment information for total revenue and NOI the years ended December 31, 2013, 20122016, 2015 and 20112014 have beenAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)9. Segment Reporting (Continued)forto exclude the real estate assets that were sold from January 1, 20112014 through December 31, 2013,2016, or otherwise qualify as held for sale and/or discontinued operations as of December 31, 2013,2016, as described in Note 7, "Real6, “Real Estate Disposition Activities." Total
revenue NOI % NOI change
from prior year Gross
real estate(1) $ 177,474 $ 114,966 1.8 % $ 1,375,961 249,742 172,912 4.4 % 1,921,307 100,548 71,851 0.1 % 633,598 46,564 31,283 5.3 % 444,825 141,038 106,745 11.7 % 1,233,851 119,024 81,182 5.1 % 1,058,883 834,390 578,939 4.7 % 6,668,425 499,843 339,159 n/a 6,770,517 117,186 79,348 n/a 3,024,035 n/a n/a n/a 300,364 11,502 n/a n/a 10,279 $ 1,462,921 $ 997,446 46.3 % $ 16,773,620 $ 163,110 $ 106,039 5.0 % $ 1,262,987 213,360 148,441 7.4 % 1,760,429 103,784 75,313 3.2 % 591,669 32,942 23,433 15.0 % 306,289 112,875 83,091 14.1 % 1,015,947 99,302 68,880 7.0 % 947,723 725,373 505,197 7.5 % 5,885,044 135,230 86,722 n/a 1,314,690 129,767 89,785 n/a 2,032,277 n/a n/a n/a 316,037 10,257 n/a n/a 73,724 $ 1,000,627 $ 681,704 14.5 % $ 9,621,772 $ 164,929 $ 105,848 9.8 % $ 1,275,866 180,003 120,714 6.8 % 1,347,796 102,834 74,754 6.6 % 603,349 30,057 20,374 6.0 % 301,661 79,868 57,749 10.8 % 704,066 75,120 50,391 9.8 % 697,705 632,811 429,830 8.3 % 4,930,443 137,779 89,949 n/a 1,567,875 119,841 80,148 n/a 1,752,006 n/a n/a n/a 325,918 9,656 n/a n/a 78,161 $ 900,087 $ 599,927 14.8 % $ 8,654,403
December 31, 2015.(1)Does not include” Segment information for gross real estate assets held for sale of $26,701, $449,570 and $634,089 as of December 31, 2013, 20122015 and 2011, respectively.(2)Gross2014 has not been adjusted to exclude real estate assets that were sold or otherwise qualified as held for the Company's established communities includes capitalized additions of approximately $33,553, $25,448 and $34,359 in 2013, 2012 and 2011, respectively.(3)Revenue represents third-party management, accounting, and developer fees and miscellaneous income which are not allocatedsale subsequent to a reportable segment. NOI For the year ended December 31, 2016 Established New England $ 239,201 $ 153,669 4.9 % $ 1,888,524 Metro NY/NJ 379,151 258,950 1.4 % 3,212,220 Mid-Atlantic 233,711 162,243 1.3 % 2,339,395 Pacific Northwest 79,684 57,494 6.5 % 737,289 Northern California 319,121 244,458 7.0 % 2,661,258 Southern California 291,567 207,537 9.1 % 2,672,691 Total Established (2) 1,542,435 1,084,351 4.8 % 13,511,377 Other Stabilized (3) 235,360 165,530 N/A 2,330,503 Development / Redevelopment 233,431 160,816 N/A 4,755,315 Land Held for Future Development N/A N/A N/A 84,293 Non-allocated (4) 5,599 N/A N/A 74,292 Total $ 2,016,825 $ 1,410,697 13.7 % $ 20,755,780 For the year ended December 31, 2015 Established New England $ 182,366 $ 114,717 2.7 % $ 1,460,746 Metro NY/NJ 361,902 256,907 3.4 % 3,152,361 Mid-Atlantic 209,013 145,497 0.2 % 2,177,823 Pacific Northwest 67,900 48,833 8.5 % 721,040 Northern California 273,432 210,226 11.9 % 2,414,184 Southern California 252,530 173,919 9.4 % 2,465,432 Total Established (2) 1,347,143 950,099 5.9 % 12,391,586 Other Stabilized 221,042 145,263 N/A 2,040,269 Development / Redevelopment 222,222 145,630 N/A 4,238,967 Land Held for Future Development N/A N/A N/A 484,377 Non-allocated (4) 9,947 N/A N/A 73,372 Total $ 1,800,354 $ 1,240,992 12.9 % $ 19,228,571 For the year ended December 31, 2014 (5) Established New England $ 164,181 $ 104,674 0.8 % $ 1,333,854 Metro NY/NJ 285,641 203,522 3.3 % 2,251,697 Mid-Atlantic 98,590 69,498 (2.5 )% 647,374 Pacific Northwest 46,041 32,012 6.8 % 500,247 Northern California 174,527 132,899 8.2 % 1,402,444 Southern California 139,841 95,626 5.2 % 1,225,328 Total Established (2) 908,821 638,231 3.6 % 7,360,944 Other Stabilized 497,634 343,477 N/A 6,057,783 Development / Redevelopment 186,852 117,879 N/A 3,972,180 Land Held for Future Development N/A N/A N/A 180,516 Non-allocated (4) 11,050 N/A N/A 32,444 Total $ 1,604,357 $ 1,099,587 16.5 % $ 17,603,867 (1) Does not include gross real estate assets held for sale of $20,846, $39,528 and $245,449 as of December 31, 2016, 2015 and 2014, respectively. (2) Gross real estate for the Company's Established Communities includes capitalized additions of approximately $85,676, $74,982 and $52,635 in 2016, 2015 and 2014, respectively. (3) Total revenue and NOI for the year ended December 31, 2016 includes $20,306 in business interruption insurance proceeds related to the Edgewater casualty loss. (4) Revenue represents third-party management, accounting, and developer fees and miscellaneous income which are not allocated to a reportable segment. (5) Results for the year ended December 31, 2014 reflect the operating segments determined as of January 1, 2014, which include stabilized communities acquired as part of the Archstone Acquisition in the Other Stabilized segment. Table of Contents9. AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)10. Stock-Based Compensation PlansCompany has a stock incentive plan, theCompany's 2009 Stock Option and Incentive Plan (the "2009 Plan"“2009 Plan”). The 2009 Plan includes an authorization to issue up to 4,199,822 shares of the Company's common stock, par value $0.01 per share, (2,930,000 newly authorizedshare. At December 31, 2016, the Company has 878,622 shares plus 1,269,822 shares that wereremaining available for grant as of May 21, 2009 under the Company's 1994 Stock Option and Incentive Plan (the "1994 Plan")), pursuant to awardsissue under the 2009 Plan.Plan, exclusive of shares that may be issued to satisfy currently outstanding awards such as stock options or performance awards. In addition, any awards that were outstanding under the 1994Company's1994 Stock Option and Incentive Plan (the “1994 Plan”) on May 21, 2009, the date the Company adopted the 2009 Plan, that are subsequently forfeited, canceled, surrendered or terminated (other than by exercise) will become available for awards under the 2009 Plan. The 2009 Plan provides for various types of equity awards to associates, officers, non-employee directors and other key personnel of the Company and its subsidiaries. The types of awards that may be granted under the 2009 Plan include restricted and deferred stock, stock options that qualify as incentive stock options ("ISOs"(“ISOs”) under Section 422 of the Code, non-qualified stock options, and stock appreciation rights.rights and performance awards, among others. The 2009 Plan will expire on May 21, 2019.follows (dollars in thousands, other than per share amounts):follows: 2009 Plan
shares Weighted
average
exercise price
per share 1994 Plan
shares Weighted
average
exercise price
per share 126,484 $ 74.20 2,072,217 $ 88.50 (23,908 ) 75.75 (930,391 ) 82.43 144,827 115.83 — — — — (28,867 ) 68.29 247,403 $ 98.42 1,112,959 $ 94.10 (43,265 ) 85.09 (364,519 ) 68.21 115,303 133.16 — — (11,887 ) 115.15 (28,610 ) 139.58 307,554 $ 112.67 719,830 $ 105.40 (19,949 ) 84.43 (24,292 ) 79.42 215,230 129.03 — — (1,267 ) 131.56 (4,012 ) 127.56 501,568 $ 120.77 691,526 $ 106.19
30,771
$
81.54
1,012,304
$
98.62 74,618 $ 97.46 719,830 $ 105.40 184,167 $ 107.18 691,526 $ 106.19 Options Outstanding, December 31, 2013 501,568 $ 120.77 691,526 $ 106.19 Exercised (157,454 ) 116.40 (342,743 ) 99.03 Granted — — — — Forfeited (4,052 ) 131.05 (76,381 ) 142.66 Options Outstanding, December 31, 2014 340,062 $ 122.67 272,402 $ 104.96 Exercised (90,884 ) 124.01 (190,207 ) 105.70 Granted — — — — Forfeited — — — — Options Outstanding, December 31, 2015 249,178 $ 122.17 82,195 $ 103.27 Exercised (71,845 ) 117.04 (59,654 ) 112.85 Granted — — — — Forfeited — — — — Options Outstanding, December 31, 2016 (1) 177,333 $ 124.25 22,541 $ 77.91 Options Exercisable: December 31, 2014 185,227 $ 116.71 272,402 $ 104.96 December 31, 2015 188,081 $ 119.98 82,195 $ 103.27 December 31, 2016 177,333 $ 124.25 22,541 $ 77.91 (1) AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)10. Stock-Based Compensation Plans (Continued)2013:2016:2009 Plan
Number of Options Range—Exercise Price Weighted Average
Remaining Contractual Term
(in years) 53,836 $70.00 - $79.99 6.1 124,414 110.00 - 119.99 7.1 75,059 120.00 - 129.99 9.2 246,760 130.00 - 139.99 8.6 1,499 140.00 - 149.99 8.5 501,568 Range—Exercise Price 10,607 $70.00 - $79.99 3.1 32,445 $110.00 - $119.99 4.1 29,862 $120.00 - $129.99 6.2 104,419 $130.00 - $139.99 5.6 177,333 1994 Plan
Number of Options Range—Exercise Price Weighted Average
Remaining Contractual Term
(in years) 88,323 $40.00 - $49.99 3.5 41,556 60.00 - 69.99 1.1 730 70.00 - 79.99 1.5 104,013 80.00 - 89.99 4.1 174,323 90.00 - 99.99 2.1 282,581 140.00 - 149.99 3.1 691,526 Range—Exercise Price 9,854 $40.00 - $49.99 2.1 9,506 $80.00 - $89.99 1.1 3,181 $140.00 - $149.99 0.1 22,541 under the 2009 and 1994 Plans at December 31, 2013 had an intrinsic value of $2,669,000 and $15,424,000, respectively. Options exercisable under the 2009 and 1994 Plans at December 31, 20132016 had an intrinsic value of $2,593,000$9,380,000 and $15,424,000,$2,237,000, respectively. Options exercisable under the 2009 and 1994 Plans had a weighted average contractual life of 8.15.4 years and 3.11.4 years, respectively. The intrinsic value of options exercised during 2013, 20122016, 2015 and 20112014 was $2,395,000, $26,746,000$9,187,000, $18,080,000 and $46,126,000,$20,028,000, respectively.The following table summarizes the weighted average fair value of employeeThere were no stock options for the periods showngranted in 2016, 2015 and the associated assumptions used to calculate the value: 2013 2012 2011 $ 26.78 $ 29.11 $ 29.40 5.0 5.0 7.0 3.7 % 3.5 % 4.0 % 34.00 % 35.00 % 35.00 % 0.91 % 0.87 % 3.04 % During 2013, theadoptedhas a revised compensation framework under which share-based compensation will beis granted, composed of annual awards and multiyear long term incentiveAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)10. Stock-Based Compensation Plans (Continued)performance awards. Annual awards will include restricted stock awards for which one third of the award will vestvests annually over a three year period, following the measurement period. Under the multiyearand multi-year long term incentive component ofperformance awards. Under the revisedCompany's multi-year long term incentive compensation framework, the Company will grantgrants a target number of restricted stock units,performance awards, with the ultimate award determined by the total shareholder return of the Company's common stock and/or operating performance metrics, measured in each case over a three-year measurement period.period of up to three years. The share-based compensationperformance awards are earned will be in the form of restricted stock, or upon election of the recipient, up to 25% in the form of stock options, for which one third of the award will vestvests annually over aan additional three year period following the completion of the performance cycle.period. At December 31, 2013date. However, for performance awards with performance periods beginning on or after January 1, 2015, after the first year of the performance period, if the employee's employment terminates on account of death, disability, retirement, or termination without cause at a time when the employee meets the age and 2012,service requirements for retirement, the Company had 182,083 and 202,218, respectively, outstanding unvested shares granted under restricted stock awards. The Company issued 123,977 sharesemployee shall vest in a pro rata portion of restricted stock valued at $16,019,000 as part of its stock-based compensation planthe award (based on the employee's service time during the year ended December 31, 2013. Restricted stock vesting during the year ended December 31, 2013 totaled 141,673performance period), with such vested portion to be earned and converted into shares and had fair values at the grant date ranging from $48.60end of the performance period based on actual achievement under the performance award.$149.05 per share. The total fair value of shares vested was $14,832,000, $36,337,000 and $35,029,000 for the years ended December 31, 2013, 2012 and 2011, respectively. The Companyperformance awards granted 191,008 restricted stock units with an estimated aggregate compensation cost of $13,371,000,is as part of its stock-based compensation plan during the year ended December 31, 2013. follows: Performance awards Weighted average grant date fair value per award Outstanding at December 31, 2013 189,765 $ 70.00 Granted (1) 136,276 117.43 Change in awards based on performance (2) (46,790 ) 74.37 Converted to restricted stock (16,209 ) 74.37 Forfeited (23,140 ) 76.22 Outstanding at December 31, 2014 239,902 $ 95.20 Granted (3) 85,636 148.49 Change in awards based on performance (2) 14,697 78.50 Converted to restricted stock (95,826 ) 78.50 Forfeited (6,143 ) 110.34 Outstanding at December 31, 2015 238,266 $ 119.65 Granted (4) 94,054 141.92 Change in awards based on performance (2) 36,091 101.52 Converted to restricted stock (115,618 ) 94.67 Forfeited (1,630 ) 141.98 Outstanding at December 31, 2016 251,163 $ 136.74 (1) The amount of restricted stock that ultimately may be earned is based on the total shareholder return metrics related to the Company’s common stock for 60,391 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 75,885 performance awards. (2) Represents the change in the number of performance awards earned based on performance achievement. (3) The amount of restricted stock that ultimately may be earned is based on the total shareholder return metrics related to the Company’s common stock for 55,162 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 30,474 performance awards. (4) The amount of restricted stock that ultimately may be earned is based on the total shareholder return metrics related to the Company’s common stock for 61,039 performance awards and financial metrics related to operating performance and leverage metrics of the Company for 33,015 performance awards. restricted stock units.portion of the performance awards determined by using total shareholder return measures. The estimatedassumptions used are as follows: 2016 2015 2014 Dividend yield 3.3% 3.0% 3.6% Estimated volatility over the life of the plan (1) 15.2% - 22.8% 12.0% - 17.3% 17.6% - 18.6% Risk free rate 0.44% - 0.88% 0.07% - 1.09% 0.04% - 0.72% Estimated performance award value based on total shareholder return measure $131.24 $139.18 $103.20 (1) Estimated volatility of the life of the plan is using 50% historical volatility and 50% implied volatility. derived using the following assumptions: baseline sharebased on a weighted average grant date value of $130.23; dividend yield of 3.3%; estimated volatility figures ranging from 17.0% to 21.0% over the life of the plan$161.66, $166.23 and $128.97, for the Company using 50% historical volatilityyears ended December 31, 2016, 2015 and 50% implied volatility;2014, respectively, and risk free rates over the lifeCompany's estimate of corporate achievement for the plan ranging from 0.09%financial metrics. 0.46%; resulting in an average estimated fair value per restricted stock unit of $70.00. Restricted stock shares Restricted stock shares weighted average grant date fair value per share Restricted stock shares converted from performance awards Outstanding at December 31, 2013 182,083 $ 124.35 — Granted - restricted stock shares 98,954 129.35 16,209 Vested - restricted stock shares (93,963 ) 120.81 (5,073 ) Forfeited (7,767 ) 128.62 (203 ) Outstanding at December 31, 2014 179,307 $ 129.06 10,933 Granted - restricted stock shares 61,953 173.04 95,826 Vested - restricted stock shares (91,847 ) 130.75 (8,412 ) Forfeited (1,529 ) 151.86 — Outstanding at December 31, 2015 147,884 $ 146.21 98,347 Granted - restricted stock shares 81,400 162.38 115,618 Vested - restricted stock shares (88,712 ) 141.38 (36,872 ) Forfeited (3,867 ) 162.43 (395 ) Outstanding at December 31, 2016 136,705 $ 158.51 176,698 $17,775,000, $9,961,000$14,666,000, $14,703,000 and $9,721,000$13,314,000 for the years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively, and total capitalized stock-based compensation cost was $8,379,000, $5,140,000$9,266,000, $9,667,000 and $5,284,000$5,457,000 for the years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively. At December 31, 2013,2016, there was a total of $2,674,000 and $7,889,000 in unrecognized compensation cost of $24,421,000 for unvested stock options and unvested restricted stock respectively,and performance awards, which does not include estimated forfeitures. The unrecognized compensation cost for unvested stock optionsforfeitures, and restricted stock is expected to be recognized over a weighted average period of 1.8 and 2.5 years, respectively.20132016 was 1.4%0.8%. The application of estimated forfeitures did not materially impact compensation expense for the years ended December 31, 2013, 2012 or 2011."ESPP"“ESPP”). Initially 1,000,000 shares of common stock were reserved for issuance under this plan. There are currently 724,675692,812 shares remaining available for issuance under the ESPP. Full-time employees of the Company generally are eligible to participate in the ESPP if, as of the last day of the applicable election period, they have been employed by the Company for at least one month. All otherAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)10. Stock-Based Compensation Plans (Continued)During 2013, the purchase period was a period of seven months beginning April 1 and ending October 30. The Company modified the ESPP beginning in 2014, establishing two purchase periods of approximately six months each.periods. The first purchase period begins January 1 and ends June 10, and the second purchase period begins July 1 and ends December 10. The purchase price for common stock purchased under the plan is 85% of the lesser of the fair market value of the Company's common stock on the first day of the applicable purchase period or the last day of the applicable purchase period. The offering dates, purchase dates and duration of purchase periods may be changed if the change is announced prior to the beginning of the affected date or purchase period. The Company issued 9,260, 6,26011,348, 10,667 and 6,9729,848 shares and recognized compensation expense of $174,000, $127,000$289,000, $321,000 and $216,000$407,000 under the ESPP for the years ended December 31, 2013, 20122016, 2015 and 2011,2014, respectively. The Company accounts for transactions under the ESPP using the fair value method prescribed by accounting guidance applicable to entities that use employee share purchase plans.2013,2016, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined it is not significant. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.20132016 or any prior period, and the Company does not anticipate that it will have a material effect in the future.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)11. Fair Value (Continued)Hedging Derivativesderivative positions at December 31, 2013, excluding derivatives executed to hedge debt on communities classified as held for sale2016 (dollars in thousands):
HedgesNotional balance $ 715,820 $ 35,898 $ 800,000 Weighted average interest rate (1) 2.5 % 2.7 % N/A Weighted average swapped/capped interest rate 6.2 % 5.9 % 2.3 % Earliest maturity date February 2017 April 2019 November 2017 Latest maturity date November 2021 April 2019 November 2017 (1) For interest rate caps, represents the weighted average interest rate on the hedged debt. Non-designated
Hedges Cash Flow
Hedges Interest
Rate Caps Interest
Rate Caps $ 611,395 $ 134,132 1.8 % 2.5 % 5.9 % 4.9 % Mar-14 Apr-15 Aug-18 Jun-15 (1)ForIn 2016 and 2015, the Company entered into $1,200,000,000 of forward interest rate caps, this representsswap agreements executed to reduce the weighted averageimpact of variability in interest rates on a portion of the Company's expected debt issuance activity in 2016 and 2017. In May 2016, the Company settled $400,000,000 of the aggregate outstanding swaps, as discussed below. For the remaining outstanding swaps, at maturity of the agreements, the Company expects to cash settle the contracts and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the impact from settling these positions will then be recognized over the life of the issued debt as a yield adjustment.debt.forecasted issuance of the unsecured notes, making a payment of $14,847,000. The Company has deferred the effective portion of the fair value change of these swaps in accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets, and will recognize the impact as a component of interest expense, net, over the life of the unsecured notes.three11 derivatives designated as a cash flow hedgeshedge and 1415 derivatives not designated as hedges at December 31, 2013. Other than the fair value change associated with the forward interest rate protection agreement discussed below, fair2016. Fair value changes for derivatives not in qualifying hedge relationships for years ended December 31, 2013, 2012 and 2011, were not material. To adjust the Hedging Derivatives in qualifying cash flow hedges to their fair value and recognize the impact of hedge accounting, the Company recorded a decrease to other comprehensive loss of $5,892,000 during the year ended December 31, 2013 and recorded an increase in other comprehensive loss of $22,876,000 and $85,845,000 during the years ended December 31, 20122016 and 2011, respectively. 2015, were not material. During 2016, the Company deferred $5,556,000 of losses for cash flow hedges reported as a component of other comprehensive income (loss).Company reclassified $59,376,000 offollowing table summarizes the deferred losses reclassified from accumulated other comprehensive income as a change to earnings, for the year ended December 31, 2013, primarily associated with the forwardcomponent of interest rate protection agreement discussed below. expense, net (dollars in thousands): For the year ended 12/31/16 12/31/15 12/31/14 Cash flow hedge losses reclassified to earnings $ 6,433 $ 5,774 $ 6,237 $5,493,000$6,975,000 of hedging losses from accumulated other comprehensive incomeloss into earnings within the next 12 months to offset the variability of cash flows of the hedged item during this period. The Company did not have any derivatives designated as fair value hedges as of December 31, 20132016 and 2012. The Company was party to a $215,000,000 forward interest rate protection agreement, which was entered into in 2011 to reduce the impact of variability in interest rates on a portion of its expected debt issuance activity in 2013. The Company settled this position at its maturity in May 2013 with a payment to the counterparty of $51,000,000, the fair value at the time of settlement. Based on changes in the Company's capital requirements for the year, the Company did not issue the anticipated debt for which this interest rate protection agreement was transacted. During the year ended December 31, 2013, the Company recognized the deferred loss of $53,484,000 for the forward interest rate protection agreement in Loss on interest rate contract on the accompanying Consolidated Statements of Comprehensive Income."Puts"“Puts”) that allow joint venture partners of the Company to require the Company to purchase their interests in the investment at a guaranteed minimum amount related to three ventures, two of which were assumed as part of the ArchstoneAVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)11. Fair Value (Continued)Acquisition.ventures. The Puts are payable in cash. The Company determines the fair value of the Puts based on unobservable inputs considering the assumptions that market participants would make in pricing the obligations, applying a guaranteed rate of return to the joint venture partners' net capital contribution balances as of period end. Given the significance of the unobservable inputs, the valuations are classified in Level 3 of the fair value hierarchy.values.receivable,and other receivables and prepaids, accounts and construction payable and accrued expenses and other liabilities are carried at their face amounts, which reasonably approximate their fair values.Company'sCompany’s nonperformance risk. The Company has concluded that the value of its notes payable and amounts outstanding under its credit facilityCredit Facility and Term Loan are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)11. Fair Value (Continued) Total Fair
Value Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) 12-31-2013 12/31/2016 Non Designated Hedges $ 106 $ — $ 106 $ — $ 79 $ — $ 79 $ — (15,998 ) — — (15,998 ) Cash Flow Hedges Interest Rate Caps 2 — 2 — Interest Rate Swaps 14,775 — 14,775 — Puts (6,002 ) — — (6,002 ) (887 ) (887 ) — — (1,329 ) (1,329 ) — — (6,294,848 ) (2,657,143 ) (3,637,705 ) — Unsecured notes (4,218,627 ) (4,218,627 ) — — Mortgage notes payable and Term Loan (2,744,462 ) — (2,744,462 ) — $ (6,311,627 ) $ (2,658,030 ) $ (3,637,599 ) $ (15,998 ) $ (6,955,564 ) $ (4,219,956 ) $ (2,729,606 ) $ (6,002 ) 12/31/2015 Non Designated Hedges Interest Rate Caps $ 26 $ — $ 26 $ — Cash Flow Hedges $ 19 $ — $ 19 $ — 5 — 5 — (53,484 ) — (53,484 ) — 5,422 — 5,422 — (5,574 ) — — (5,574 ) Puts (8,181 ) — — (8,181 ) (1,017 ) (1,017 ) — — (1,381 ) (1,381 ) — — (4,077,397 ) (2,102,927 ) (1,974,470 ) — Unsecured notes (3,668,417 ) (3,668,417 ) — — Mortgage notes payable and Term Loan (2,700,341 ) — (2,700,341 ) — $ (4,137,453 ) $ (2,103,944 ) $ (2,027,935 ) $ (5,574 ) $ (6,372,867 ) $ (3,669,798 ) $ (2,694,888 ) $ (8,181 ) Related Party ArrangementsUnconsolidated Entities The Company manages unconsolidated real estate entities for which it receives asset management, property management, development and redevelopment fee revenue. From these entities, the Company received fees of $11,502,000, $10,257,000 and $9,656,000 in the years ended December 31, 2013, 2012 and 2011, respectively. These fees are included in management, development and other fees on the accompanying Consolidated Statements of Comprehensive Income. In addition, the Company has outstanding receivables associated with its management role of $7,004,000 and $3,484,000 as of December 31, 2013 and 2012, respectively.Director Compensation Directors of the Company who are also employees receive no additional compensation for their services as a director. Following each annual meeting of stockholders, non-employee directors receive (i) a number of shares of restricted stock (or deferred stock awards) having a value of $125,000 and (ii) a cash payment of $60,000, payable in quarterly installments of $15,000. The number of shares of restricted stock (or deferred stock awards) is calculated based on the closing price on the day of the award. Non-employee directors may elect to receive all or a portion of cash payments in the form of a deferred stock award. In addition, the Lead Independent Director receives an annual fee of $30,000 payable in equal quarterly installments of $7,500.AVALONBAY COMMUNITIES, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)12. Related Party Arrangements (Continued) The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock awards in the amount of $992,000, $880,000, and $778,000 for the years ended December 31, 2013, 2012 and 2011, respectively, as a component of general and administrative expense. Deferred compensation relating to these restricted stock grants and deferred stock awards was $417,000 and $364,000 on December 31, 2013 and December 31, 2012, respectively.13. Quarterly Financial Information20132016 and 20122015 (dollars in thousands, except per share amounts)data): For the three months ended(2) 3-31-13 6-30-13 9-30-13 12-31-13 $ 301,356 $ 378,207 $ 389,189 $ 394,169 $ (14,767 ) $ 334 $ (15,949 ) $ 88,209 $ 90,237 $ 35,763 $ 5,063 $ 163,881 $ 75,427 $ 36,218 $ (10,715 ) $ 252,212 $ 0.63 $ 0.28 $ (0.08 ) $ 1.95 $ 0.63 $ 0.28 $ (0.08 ) $ 1.95 For the three months ended (1) 3/31/16 6/30/16 9/30/16 12/31/16 Total revenue $ 508,498 $ 502,307 $ 516,211 $ 518,240 Net income $ 237,877 $ 197,319 $ 356,329 $ 242,183 Net income attributable to common stockholders $ 237,931 $ 197,444 $ 356,392 $ 242,235 Net income per common share - basic $ 1.73 $ 1.44 $ 2.60 $ 1.76 Net income per common share - diluted $ 1.73 $ 1.44 $ 2.59 $ 1.76 For the three months ended (1) 3/31/15 6/30/15 9/30/15 12/31/15 Total revenue $ 442,367 $ 457,459 $ 475,360 $ 480,840 Net income $ 208,053 $ 172,253 $ 206,076 $ 155,352 Net income attributable to common stockholders $ 208,144 $ 172,324 $ 206,142 $ 155,428 Net income per common share - basic $ 1.57 $ 1.30 $ 1.54 $ 1.13 Net income per common share - diluted $ 1.56 $ 1.29 $ 1.53 $ 1.13 (1) Amounts may not equal full year results due to rounding. For the three months ended(2) 3-31-12 6-30-12 9-30-12 12-31-12 $ 236,788 $ 244,697 $ 257,568 $ 261,574 $ 50,380 $ 54,975 $ 80,715 $ 64,361 $ 7,229 $ 101,846 $ 6,033 $ 58,023 $ 57,758 $ 156,909 $ 86,844 $ 122,356 $ 0.61 $ 1.64 $ 0.89 $ 1.19 $ 0.60 $ 1.63 $ 0.89 $ 1.19 (1)Amounts may not equal previously reported results due to reclassification between income from continuing operations and income from discontinued operations.(2)Amounts may not equal full year results due to rounding.14. 13. Subsequent EventsFebruary 2014,January 2017, the Company entered into an agreement to sell an operating community containing 450 apartment homes and net real estate of $51,342,000 as of December 31, 2016, resulting in the community qualifying as held for sale. The Company expects to complete the sale in the first quarter of 2017.Avalon Valley,two undeveloped land parcels located in Danbury, CT. Avalon Valley contains 268 homes and was sold for $53,325,000. On February 18, 2014, Lehman announcedNewcastle, WA that it had sold all of the sharesare adjacent to one of the Company's common stock it receivedDevelopment Communities for $20,500,000.considerationwell as its potential liability to third parties who may have incurred damages on account of the fire. While the Company currently believes that its direct losses and any potential liability to third parties will be substantially covered by its insurance policies, including coverage for the Archstone Acquisition. Lehman received allreplacement cost of the net proceeds from the sale of its sharesbuilding, third party claims and business interruption loss, subject to deductibles as well as a self-insured portion of the Company's common stock, and Lehman's sale of such shares did not impactproperty insurance for which the total numberCompany is obligated for 12% of the Company's sharesfirst $50,000,000 in losses, the Company can give no assurances in this regard and continues to evaluate this matter.common stock outstanding.variable rate debt secured by Avalon at Mountain View at its scheduled maturity date.2013 Initial Cost Total Cost Community City and state Land Building /
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Acquisition Fremont, CA $ 10,746 $ 43,399 $ 4,989 $ 10,746 $ 48,388 $ 59,134 $ 26,226 $ 32,908 $ — 1994 Dublin, CA 5,276 19,642 4,657 5,276 24,299 29,575 13,221 16,354 — 1989/1997 Campbell, CA 11,830 47,828 13,115 11,830 60,943 72,773 26,380 46,393 38,800 1995 Daly City, CA 4,230 9,659 18,619 4,230 28,278 32,508 13,771 18,737 — 1972/1997 San Francisco, CA 5,403 21,567 6,887 5,403 28,454 33,857 13,017 20,840 20,800 1990/1995 San Jose, CA 12,920 53,047 18,824 12,920 71,871 84,791 26,152 58,639 — 1985/1996 San Rafael, CA 5,982 16,885 24,021 5,982 40,906 46,888 16,644 30,244 — 1973/1996 Pleasanton, CA 11,610 46,552 21,254 11,610 67,806 79,416 31,024 48,392 — 1988/1994 Costa Mesa, CA 1,975 3,814 9,801 1,975 13,615 15,590 4,982 10,608 — 1956/1996 Burbank, CA 22,483 28,104 42,461 22,483 70,565 93,048 29,267 63,781 — 1961/1997 Mission Viejo, CA 2,517 9,257 2,486 2,517 11,743 14,260 6,776 7,484 7,635 1984/1996 Costa Mesa, CA 4,709 16,063 12,769 4,709 28,832 33,541 12,855 20,686 — 1973/1996 San Diego, CA 9,922 40,580 17,630 9,922 58,210 68,132 30,126 38,006 — 1969/1997 San Diego, CA 2,710 10,924 11,191 2,710 22,115 24,825 11,438 13,387 — 1960/1997 Union City, CA 4,249 16,820 2,797 4,249 19,617 23,866 10,652 13,214 — 1973/1996 San Jose, CA 6,119 50,225 1,620 6,119 51,845 57,964 26,168 31,796 52,278 1999 Foster City, CA 7,852 31,445 11,208 7,852 42,653 50,505 19,676 30,829 — 1973/1994 Pacifica, CA 6,125 24,796 2,271 6,125 27,067 33,192 14,548 18,644 17,600 1971/1995 San Francisco, CA 3,561 21,321 14,834 3,561 36,155 39,716 14,941 24,775 — 1961/1996 Sunnyvale, CA 20,713 99,573 4,610 20,713 104,183 124,896 55,535 69,361 — 1997/1998 Woodland Hills, CA 23,828 40,372 46,931 23,828 87,303 111,131 33,347 77,784 — 1989/1997 Mountain View, CA 9,755 39,393 9,511 9,755 48,904 58,659 23,899 34,760 18,300 1986 Rancho Santa Margarita, CA 4,607 16,911 10,248 4,607 27,159 31,766 11,720 20,046 — 1990/1997 San Francisco, CA 4,726 19,130 5,790 4,726 24,920 29,646 12,155 17,491 — 1972/1994 Fremont, CA 6,581 26,583 9,731 6,581 36,314 42,895 17,974 24,921 — 1985/1994 Mountain View, CA 6,546 26,263 11,616 6,546 37,879 44,425 19,307 25,118 — 1962/1997 Woodland Hills, CA 7,045 12,986 9,187 7,045 22,173 29,218 12,142 17,076 — 1979/1998 Huntington Beach, CA 4,871 19,745 9,522 4,871 29,267 34,138 15,512 18,626 — 1971/1997 San Diego, CA 2,768 20,134 23,465 2,768 43,599 46,367 17,309 29,058 — 1973/1998 San Jose, CA 4,765 47,600 919 4,765 48,519 53,284 19,093 34,191 — 2002 Mountain View, CA 9,560 56,136 958 9,560 57,094 66,654 23,134 43,520 — 2002 San Francisco, CA 14,029 78,452 1,924 14,029 80,376 94,405 30,224 64,181 70,959 2003 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
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AcquisitionESTABLISHED COMMUNITIES NEW ENGLAND Boston, MA Avalon at Lexington Lexington, MA 198 $ 2,124 $ 12,567 $ 9,801 $ 2,124 $ 22,368 $ 24,492 $ 13,202 $ 11,290 $ 11,703 $ — 1994 Avalon Oaks Wilmington, MA 204 2,129 17,567 5,259 2,129 22,826 24,955 12,802 12,153 12,771 — 1999 Eaves Quincy Quincy, MA 245 1,743 14,662 9,937 1,743 24,599 26,342 13,543 12,799 13,449 — 1986/1995 Avalon Oaks West Wilmington, MA 120 3,318 13,465 1,140 3,318 14,605 17,923 7,481 10,442 10,687 15,420 2002 Avalon Orchards Marlborough, MA 156 2,983 17,970 2,520 2,983 20,490 23,473 10,608 12,865 13,431 16,075 2002 Avalon at Newton Highlands Newton, MA 294 11,039 45,547 4,411 11,039 49,958 60,997 23,327 37,670 39,040 — 2003 Avalon at The Pinehills Plymouth, MA 192 6,876 30,401 456 6,876 30,857 37,733 10,017 27,716 28,679 — 2004 Eaves Peabody Peabody, MA 286 4,645 18,919 12,758 4,645 31,677 36,322 11,993 24,329 25,110 — 1962/2004 Avalon at Bedford Center Bedford, MA 139 4,258 20,551 877 4,258 21,428 25,686 8,116 17,570 17,921 — 2006 Avalon at Chestnut Hill Chestnut Hill, MA 204 14,572 45,911 2,522 14,572 48,433 63,005 17,365 45,640 47,031 38,564 2007 Avalon at Lexington Hills Lexington, MA 387 8,691 79,121 3,574 8,691 82,695 91,386 25,145 66,241 67,206 — 2008 Avalon Acton Acton, MA 380 13,124 48,695 3,055 13,124 51,750 64,874 15,599 49,275 50,588 45,000 2008 Avalon at the Hingham Shipyard Hingham, MA 235 12,218 41,656 1,879 12,218 43,535 55,753 12,112 43,641 44,029 — 2009 Avalon Sharon Sharon, MA 156 4,719 25,478 613 4,719 26,091 30,810 7,850 22,960 23,674 — 2008 Avalon Northborough Northborough, MA 382 8,144 52,343 946 8,144 53,289 61,433 12,973 48,460 49,624 — 2009 Avalon Blue Hills Randolph, MA 276 11,110 34,580 1,068 11,110 35,648 46,758 9,444 37,314 38,309 — 2009 Avalon Cohasset Cohasset, MA 220 8,802 46,166 187 8,802 46,353 55,155 8,220 46,935 48,512 — 2012 Avalon Andover Andover, MA 115 4,276 21,871 180 4,276 22,051 26,327 3,702 22,625 23,291 13,844 2012 Avalon Natick Natick, MA 407 15,645 64,845 19 15,645 64,864 80,509 8,090 72,419 74,738 50,067 2013 Avalon at Assembly Row (1) Somerville, MA 195 8,537 52,378 — 8,537 52,378 60,915 4,885 56,030 53,757 — 2015 Avalon Prudential Center II (2) Boston, MA 266 8,776 35,496 44,920 8,776 80,416 89,192 29,974 59,218 56,806 — 1968/1998 Avalon Prudential Center I (2) Boston, MA 243 8,002 32,370 33,896 8,002 66,266 74,268 26,682 47,586 46,823 — 1968/1998 Eaves Burlington Burlington, MA 203 7,714 32,499 5,968 7,714 38,467 46,181 5,074 41,107 41,700 — 1988/2012 Avalon Canton at Blue Hills Canton, MA 196 6,562 33,956 133 6,562 34,089 40,651 3,260 37,391 38,543 — 2014 Avalon Burlington (2) Burlington, MA 312 15,600 58,499 17,434 15,600 75,933 91,533 10,398 81,135 81,080 — 1989/2013 Eaves North Quincy Quincy, MA 224 11,940 39,400 2,913 11,940 42,313 54,253 7,761 46,492 47,901 — 1977/2013 Avalon at Center Place (1) Providence, RI 225 — 26,816 11,511 — 38,327 38,327 22,752 15,575 16,005 — 1991/1997 Total Boston, MA 6,460 $ 207,547 $ 963,729 $ 177,977 $ 207,547 $ 1,141,706 $ 1,349,253 $ 342,375 $ 1,006,878 $ 1,022,408 $ 178,970 2013 Initial Cost Total Cost Community City and state Land Building /
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Acquisition Burbank, CA — 42,564 653 — 43,217 43,217 15,350 27,867 — 2003 Burbank, CA 14,053 56,827 23,763 14,053 80,590 94,643 26,423 68,220 — 1988/2002 Camarillo, CA 8,446 40,290 86 8,446 40,376 48,822 10,901 37,921 — 2006 Los Angeles, CA 5,459 41,182 954 5,459 42,136 47,595 9,762 37,833 — 2007 Los Angeles, CA 12,789 49,073 380 12,789 49,453 62,242 9,036 53,206 — 2008 Canoga Park, CA 7,920 44,848 163 7,920 45,011 52,931 8,895 44,036 — 2007 San Diego, CA 19,627 44,972 285 19,627 45,257 64,884 8,208 56,676 — 2008 Anaheim, CA 27,874 69,156 596 27,874 69,752 97,626 11,824 85,802 — 2009 Union City, CA 14,732 104,025 232 14,732 104,257 118,989 16,046 102,943 — 2009 Irvine, CA 9,911 67,524 66 9,911 67,590 77,501 10,104 67,397 — 2010 San Francisco, CA 28,687 119,156 75 28,687 119,231 147,918 18,465 129,453 — 2009 Walnut Creek, CA — 145,904 1,090 — 146,994 146,994 17,080 129,914 137,542 2010 San Francisco, CA 5,544 50,868 1,740 5,544 52,608 58,152 2,916 55,236 — 2012 Pomona, CA 9,796 41,740 59 9,796 41,799 51,595 4,023 47,572 — 1989/2011 San Dimas, CA 1,916 7,819 24 1,916 7,843 9,759 758 9,001 — 1978/2011 San Dimas, CA 2,953 12,428 180 2,953 12,608 15,561 1,201 14,360 — 1981/2011 San Marcos, CA 3,277 13,385 — 3,277 13,385 16,662 1,302 15,360 — 1988/2011 San Diego, CA 6,692 27,143 37 6,692 27,180 33,872 2,585 31,287 — 1986/2011 Lake Forest, CA 5,199 21,134 395 5,199 21,529 26,728 2,026 24,702 — 1975/2011 Pasadena, CA 8,400 11,547 3,587 8,400 15,134 23,534 732 22,802 11,869 1973/2012 Artesia, CA 8,305 21,195 — 8,305 21,195 29,500 1,131 28,369 — 1973/2012 Los Angeles, CA 30,900 72,008 297 30,900 72,305 103,205 3,508 99,697 — 2006/2012 Walnut Creek, CA 29,650 83,045 4,219 29,650 87,264 116,914 6,611 110,303 — 1987/2013 Simi Valley, CA 41,610 73,771 4,303 41,610 78,074 119,684 6,279 113,405 — 2007/2013 La Mesa, CA 6,950 31,022 1,097 6,950 32,119 39,069 1,897 37,172 — 1989/2013 Los Angeles, CA 4,626 22,954 943 4,626 23,897 28,523 1,641 26,882 — 1991/2013 Los Angeles, CA 15,756 78,178 3,260 15,756 81,438 97,194 5,590 91,604 — 2002/2013 San Jose, CA 47,030 80,987 3,871 47,030 84,858 131,888 6,364 125,524 — 2002/2013 Calabasas, CA 35,450 114,912 6,156 35,450 121,068 156,518 9,147 147,371 101,724 1988/2013 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
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AcquisitionFairfield-New Haven, CT Eaves Stamford Stamford, CT 238 $ 5,956 $ 23,993 $ 12,946 $ 5,956 $ 36,939 $ 42,895 $ 22,837 $ 20,058 $ 21,302 $ — 1991 Avalon Wilton on River Rd Wilton, CT 102 2,116 14,664 5,873 2,116 20,537 22,653 11,339 11,314 12,020 — 1997 Avalon New Canaan New Canaan, CT 104 4,834 22,990 1,943 4,834 24,933 29,767 12,178 17,589 18,345 — 2002 AVA Stamford Stamford, CT 306 13,819 56,499 5,263 13,819 61,762 75,581 30,120 45,461 47,552 — 2002/2002 Avalon Danbury Danbury, CT 234 4,933 30,638 1,004 4,933 31,642 36,575 12,630 23,945 24,890 — 2005 Avalon Darien Darien, CT 189 6,926 34,558 2,345 6,926 36,903 43,829 16,641 27,188 28,363 — 2004 Avalon Milford Milford, CT 246 8,746 22,699 1,296 8,746 23,995 32,741 10,260 22,481 23,102 — 2004 Avalon Norwalk Norwalk, CT 311 11,320 62,904 666 11,320 63,570 74,890 13,904 60,986 63,064 — 2011 Avalon Huntington Shelton, CT 99 5,277 20,029 242 5,277 20,271 25,548 5,808 19,740 20,311 — 2008 Avalon Wilton on Danbury Rd Wilton, CT 100 6,604 23,758 29 6,604 23,787 30,391 4,710 25,681 26,514 — 2011 Avalon Shelton Shelton, CT 250 7,749 40,264 26 7,749 40,290 48,039 5,213 42,826 44,286 — 2013 Avalon East Norwalk Norwalk, CT 240 10,395 36,246 — 10,395 36,246 46,641 4,324 42,317 43,660 — 2013 Avalon Stratford Stratford, CT 130 2,564 27,157 — 2,564 27,157 29,721 2,297 27,424 28,351 38,221 2014 Total Fairfield-New Haven, CT 2,549 $ 91,239 $ 416,399 $ 31,633 $ 91,239 $ 448,032 $ 539,271 $ 152,261 $ 387,010 $ 401,760 $ 38,221 TOTAL NEW ENGLAND 9,009 $ 298,786 $ 1,380,128 $ 209,610 $ 298,786 $ 1,589,738 $ 1,888,524 $ 494,636 $ 1,393,888 $ 1,424,168 $ 217,191 METRO NY/NJ New York City, NY Avalon Riverview (1) Long Island City, NY 372 $ — $ 94,061 $ 9,718 $ — $ 103,779 $ 103,779 $ 48,867 $ 54,912 $ 55,494 $ — 2002 Avalon Bowery Place I New York, NY 206 18,575 75,009 2,717 18,575 77,726 96,301 27,419 68,882 71,256 93,800 2006 Avalon Bowery Place II New York, NY 90 9,106 47,199 3,649 9,106 50,848 59,954 15,347 44,607 45,979 — 2007 Avalon Morningside Park (1) New York, NY 295 — 114,233 1,465 — 115,698 115,698 32,671 83,027 86,539 100,000 2009 Avalon Fort Greene Brooklyn, NY 631 83,038 216,802 1,742 83,038 218,544 301,582 50,369 251,213 258,047 — 2010 AVA High Line (1) New York, NY 405 — 155,989 16 — 156,005 156,005 3,878 152,127 152,111 — 2015 Avalon Midtown West New York, NY 550 154,730 180,253 13,608 154,730 193,861 348,591 35,495 313,096 318,046 100,500 1998/2013 Avalon Clinton North (2) New York, NY 339 84,069 105,821 10,390 84,069 116,211 200,280 19,540 180,740 181,136 147,000 2008/2013 Avalon Clinton South New York, NY 288 71,421 89,851 5,957 71,421 95,808 167,229 16,899 150,330 152,700 121,500 2007/2013 Total New York City, NY 3,176 $ 420,939 $ 1,079,218 $ 49,262 $ 420,939 $ 1,128,480 $ 1,549,419 $ 250,485 $ 1,298,934 $ 1,321,308 $ 562,800 New York - Suburban Avalon Commons Smithtown, NY 312 $ 4,679 $ 28,286 $ 6,012 $ 4,679 $ 34,298 $ 38,977 $ 21,265 $ 17,712 $ 18,817 $ — 1997 Avalon Willow Mamaroneck, NY 227 6,207 40,791 2,023 6,207 42,814 49,021 24,868 24,153 25,379 — 2000 2013 Initial Cost Total Cost Community City and state Land Building /
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Acquisition Agoura Hills, CA 34,560 88,954 4,084 34,560 93,038 127,598 6,535 121,063 85,288 2004/2013 Santa Monica, CA 31,980 60,790 2,966 31,980 63,756 95,736 4,654 91,082 — 2007/2013 Pasadena, CA 20,560 106,556 3,065 20,560 109,621 130,181 6,024 124,157 76,471 2006/2013 San Diego, CA 17,150 27,304 1,640 17,150 28,944 46,094 2,528 43,566 27,176 1987/2013 Pasadena, CA 8,930 15,551 987 8,930 16,538 25,468 1,441 24,027 15,669 1972/2013 Thousand Oaks, CA 14,500 19,661 1,674 14,500 21,335 35,835 2,313 33,522 27,411 1992/2013 Walnut Creek, CA 10,040 19,670 820 10,040 20,490 30,530 1,415 29,115 20,754 2000/2013 Los Feliz, CA 18,940 43,661 2,672 18,940 46,333 65,273 3,880 61,393 43,258 1989/2013 San Jose, CA 91,710 112,808 6,755 91,710 119,563 211,273 10,264 201,009 83,087 1970/2013 Huntington Beach, CA 46,310 100,479 4,294 46,310 104,773 151,083 7,336 143,747 86,167 1971/2013 Los Angeles, CA 89,450 157,256 9,610 89,450 166,866 256,316 13,883 242,433 167,595 1973/2013 Woodland Hills, CA 69,400 90,089 6,940 69,400 97,029 166,429 9,504 156,925 104,694 1970/2013 Mountain View, CA 65,960 67,128 4,541 65,960 71,669 137,629 6,760 130,869 72,374 1969/2013 Thousand Oaks, CA 13,010 22,381 1,640 13,010 24,021 37,031 2,304 34,727 28,742 2002/2013 San Bruno, CA 37,890 71,574 2,756 37,890 74,330 112,220 4,764 107,456 64,450 2004/2013 San Bruno, CA 23,787 44,934 1,676 23,787 46,610 70,397 2,991 67,406 31,398 2007/2013 San Bruno, CA 33,303 62,910 2,354 33,303 65,264 98,567 4,187 94,380 56,210 2010/2013 Walnut Creek, CA 27,190 57,041 3,194 27,190 60,235 87,425 4,922 82,503 — 1989/2013 Pasadena, CA 9,980 31,818 1,527 9,980 33,345 43,325 2,390 40,935 28,079 2004/2013 Los Angeles, CA 18,178 90,195 3,849 18,178 94,044 112,222 6,447 105,775 — 1987/2013 Corona, CA 5,724 23,433 890 5,724 24,323 30,047 3,013 27,034 — 1987/2006 Trumbull, CT 4,414 31,268 2,860 4,414 34,128 38,542 19,422 19,120 40,018 1997 Stamford, CT 5,956 23,993 11,366 5,956 35,359 41,315 18,636 22,679 — 1991 Wilton, CT 2,116 14,664 5,763 2,116 20,427 22,543 9,113 13,430 — 1997 Danbury, CT 2,277 23,561 863 2,277 24,424 26,701 12,210 14,491 — 1999 Stamford, CT 10,836 51,883 1,020 10,836 52,903 63,739 20,938 42,801 63,624 2003 New Canaan, CT 4,834 19,485 535 4,834 20,020 24,854 7,960 16,894 — 2002 Stamford, CT 13,819 56,499 1,949 13,819 58,448 72,267 22,691 49,576 58,385 2002 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
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AcquisitionAvalon Court Melville, NY 494 9,228 50,063 5,747 9,228 55,810 65,038 32,744 32,294 31,696 — 1997 The Avalon Bronxville, NY 110 2,889 28,324 8,318 2,889 36,642 39,531 18,467 21,064 22,038 — 1999 Avalon at Glen Cove (1) Glen Cove, NY 256 7,871 59,969 3,392 7,871 63,361 71,232 26,351 44,881 45,197 — 2004 Avalon Pines Coram, NY 450 8,700 62,931 1,401 8,700 64,332 73,032 25,211 47,821 49,598 — 2005 Avalon Glen Cove North (1) Glen Cove, NY 111 2,577 37,336 434 2,577 37,770 40,347 12,579 27,768 28,990 — 2007 Avalon White Plains White Plains, NY 407 15,391 137,353 369 15,391 137,722 153,113 36,925 116,188 120,690 — 2009 Avalon Rockville Centre I Rockville Centre, NY 349 32,212 78,806 334 32,212 79,140 111,352 14,157 97,195 99,724 — 2012 Avalon Green II Elmsford, NY 444 27,765 77,560 116 27,765 77,676 105,441 12,904 92,537 95,210 — 2012 Avalon Garden City Garden City, NY 204 18,205 49,332 236 18,205 49,568 67,773 7,600 60,173 61,775 — 2013 Avalon Ossining Ossining, NY 168 6,392 30,313 — 6,392 30,313 36,705 2,971 33,734 34,811 — 2014 Avalon Westbury Westbury, NY 396 69,620 43,781 10,246 69,620 54,027 123,647 12,895 110,752 112,699 79,945 2006/2013 Total New York - Suburban 3,928 $ 211,736 $ 724,845 $ 38,628 $ 211,736 $ 763,473 $ 975,209 $ 248,937 $ 726,272 $ 746,624 $ 79,945 New Jersey Avalon Cove Jersey City, NJ 504 $ 8,760 $ 82,422 $ 21,979 $ 8,760 $ 104,401 $ 113,161 $ 61,207 $ 51,954 $ 54,651 $ — 1997 Eaves Lawrenceville (2) Lawrenceville, NJ 632 14,650 60,486 11,430 14,650 71,916 86,566 29,232 57,334 56,391 — 1994 Avalon Princeton Junction West Windsor, NJ 512 5,585 22,382 21,115 5,585 43,497 49,082 24,495 24,587 25,952 — 1988/1993 Avalon at Florham Park Florham Park, NJ 270 6,647 34,906 3,190 6,647 38,096 44,743 20,913 23,830 24,668 — 2001 Avalon Run East Lawrenceville, NJ 312 6,766 45,359 1,400 6,766 46,759 53,525 19,560 33,965 35,330 36,305 2005 Avalon Tinton Falls Tinton Falls, NJ 216 7,939 33,170 489 7,939 33,659 41,598 10,070 31,528 32,576 — 2008 Avalon West Long Branch West Long Branch, NJ 180 2,721 22,925 99 2,721 23,024 25,745 5,196 20,549 21,382 — 2011 Avalon North Bergen North Bergen, NJ 164 8,984 30,994 919 8,984 31,913 40,897 5,211 35,686 36,900 — 2012 Avalon at Wesmont Station I Wood-Ridge, NJ 266 14,682 41,635 486 14,682 42,121 56,803 6,812 49,991 51,632 — 2012 Avalon Hackensack at Riverside (1) Hackensack, NJ 226 — 44,619 — — 44,619 44,619 5,520 39,099 40,722 — 2013 Avalon Somerset Somerset, NJ 384 18,241 58,338 101 18,241 58,439 76,680 7,657 69,023 71,074 — 2013 Avalon at Wesmont Station II Wood-Ridge, NJ 140 6,502 16,863 — 6,502 16,863 23,365 2,234 21,131 21,762 — 2013 Avalon Bloomingdale Bloomingdale, NJ 174 3,006 27,802 — 3,006 27,802 30,808 3,173 27,635 28,670 — 2014 Total New Jersey 3,980 $ 104,483 $ 521,901 $ 61,208 $ 104,483 $ 583,109 $ 687,592 $ 201,280 $ 486,312 $ 501,710 $ 36,305 TOTAL METRO NY/NJ 11,084 $ 737,158 $ 2,325,964 $ 149,098 $ 737,158 $ 2,475,062 $ 3,212,220 $ 700,702 $ 2,511,518 $ 2,569,642 $ 679,050 2013 Initial Cost Total Cost Community City and state Land Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
Acquisition Danbury, CT 4,933 30,638 553 4,933 31,191 36,124 9,251 26,873 — 2005 Darien, CT 6,926 34,659 1,410 6,926 36,069 42,995 12,348 30,647 48,484 2004 Milford, CT 8,746 22,699 577 8,746 23,276 32,022 7,662 24,360 — 2004 Norwalk, CT 11,320 62,910 24 11,320 62,934 74,254 7,142 67,112 — 2011 Shelton, CT 5,277 20,029 100 5,277 20,129 25,406 3,674 21,732 — 2008 Wilton, CT 6,604 23,766 6 6,604 23,772 30,376 2,140 28,236 — 2011 Washington, DC 6,848 27,614 11,357 6,848 38,971 45,819 23,539 22,280 57,150 1982 Washington, DC 8,800 39,658 660 8,800 40,318 49,118 15,057 34,061 44,405 2003 Washington, DC 25,180 52,419 3,523 25,180 55,942 81,122 5,009 76,113 — 1966/2013 Washington, DC 16,430 22,902 1,747 16,430 24,649 41,079 2,369 38,710 28,844 1944/2013 Washington, DC 38,140 35,352 3,396 38,140 38,748 76,888 4,505 72,383 — 1961/2013 Washington, DC 9,580 26,532 1,598 9,580 28,130 37,710 2,376 35,334 23,858 1978/2013 Washington, DC 22,960 58,621 3,133 22,960 61,754 84,714 4,755 79,959 — 1978/2013 Lexington, MA 2,124 12,599 9,082 2,124 21,681 23,805 10,620 13,185 — 1994 Wilmington, MA 2,129 18,676 1,870 2,129 20,546 22,675 10,271 12,404 16,094 1999 Quincy, MA 1,743 14,662 9,073 1,743 23,735 25,478 10,954 14,524 — 1986/1996 Peabody, MA 5,184 16,320 1,671 5,184 17,991 23,175 8,553 14,622 — 2000 Wilmington, MA 3,318 13,467 575 3,318 14,042 17,360 5,857 11,503 16,032 2002 Marlborough, MA 2,983 18,037 1,752 2,983 19,789 22,772 7,982 14,790 17,530 2002 Newton, MA 11,039 45,590 3,270 11,039 48,860 59,899 17,462 42,437 — 2003 Plymouth, MA 6,876 30,401 136 6,876 30,537 37,413 6,765 30,648 — 2004/2011 Peabody, MA 4,645 19,007 11,781 4,645 30,788 35,433 8,628 26,805 — 2004 Bedford, MA 4,258 20,569 213 4,258 20,782 25,040 5,922 19,118 — 2005 Chestnut Hill, MA 14,572 45,911 1,277 14,572 47,188 61,760 11,971 49,789 39,979 2007 Shrewsbury, MA 5,152 30,608 544 5,152 31,152 36,304 7,982 28,322 20,464 2007 Danvers, MA 7,010 76,904 725 7,010 77,629 84,639 17,168 67,471 — 2006 Lexington, MA 8,691 79,153 393 8,691 79,546 88,237 16,581 71,656 — 2007 Acton, MA 13,124 49,935 126 13,124 50,061 63,185 10,274 52,911 45,000 2007 Hingham, MA 12,218 41,591 131 12,218 41,722 53,940 7,548 46,392 — 2009 Sharon, MA 4,719 25,522 216 4,719 25,738 30,457 5,074 25,383 — 2007 Northborough, MA 8,144 52,454 16 8,144 52,470 60,614 7,277 53,337 — 2009/2010 Randolph, MA 11,110 34,736 62 11,110 34,798 45,908 5,587 40,321 — 2009 Cohasset, MA 8,802 46,162 16 8,802 46,178 54,980 3,254 51,726 — 2012 Andover, MA 4,276 21,783 — 4,276 21,783 26,059 1,303 24,756 14,821 2012 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
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Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
AcquisitionMID-ATLANTIC Washington Metro/Baltimore, MD Avalon at Foxhall Washington, D.C. 308 $ 6,848 $ 27,614 $ 13,649 $ 6,848 $ 41,263 $ 48,111 $ 27,751 $ 20,360 $ 20,663 $ 54,583 1982/1994 Avalon at Gallery Place Washington, D.C. 203 8,800 39,658 2,069 8,800 41,727 50,527 19,480 31,047 32,483 42,410 2003 AVA H Street Washington, D.C. 138 7,425 25,282 25 7,425 25,307 32,732 3,734 28,998 29,952 — 2013 Avalon The Albemarle Washington, D.C. 228 25,140 52,459 5,243 25,140 57,702 82,842 10,708 72,134 73,386 — 1966/2013 Eaves Tunlaw Gardens Washington, D.C. 166 16,430 22,902 2,275 16,430 25,177 41,607 4,856 36,751 37,426 — 1944/2013 The Statesman Washington, D.C. 281 38,140 35,352 3,857 38,140 39,209 77,349 8,515 68,834 70,058 — 1961/2013 Eaves Glover Park Washington, D.C. 120 9,580 26,532 2,317 9,580 28,849 38,429 5,485 32,944 33,836 — 1953/2013 AVA Van Ness Washington, D.C. 269 22,890 58,691 4,127 22,890 62,818 85,708 11,152 74,556 76,255 — 1978/2013 Avalon First and M Washington, D.C. 469 43,700 153,950 3,048 43,700 156,998 200,698 23,077 177,621 182,659 — 2012/2013 Avalon at Fairway Hills Columbia, MD 720 8,603 34,432 16,129 8,603 50,561 59,164 31,780 27,384 29,017 — 1987/1996 Eaves Washingtonian Center North Potomac, MD 288 4,047 18,553 1,985 4,047 20,538 24,585 13,327 11,258 11,103 — 1996 Eaves Columbia Town Center Columbia, MD 392 8,802 35,536 11,861 8,802 47,397 56,199 19,385 36,814 38,093 — 1986/1993 Avalon at Grosvenor Station Bethesda, MD 497 29,159 52,993 2,276 29,159 55,269 84,428 25,023 59,405 61,283 — 2004 Avalon at Traville Rockville, MD 520 14,365 55,398 3,901 14,365 59,299 73,664 25,599 48,065 49,262 71,871 2004 Avalon Russett Laurel, MD 238 10,200 47,524 2,883 10,200 50,407 60,607 9,182 51,425 53,187 32,199 1999/2013 Eaves Fair Lakes Fairfax, VA 420 6,096 24,400 8,564 6,096 32,964 39,060 20,074 18,986 19,927 — 1989/1996 AVA Ballston Arlington, VA 344 7,291 29,177 16,272 7,291 45,449 52,740 27,544 25,196 26,623 — 1990 Eaves Fairfax City Fairfax, VA 141 2,152 8,907 5,390 2,152 14,297 16,449 7,676 8,773 9,292 — 1988/1997 Avalon Tysons Corner Tysons Corner, VA 558 13,851 43,397 12,527 13,851 55,924 69,775 30,819 38,956 40,926 — 1996 Avalon Park Crest Tysons Corner, VA 354 13,554 63,526 83 13,554 63,609 77,163 9,568 67,595 69,885 — 2013 Eaves Fairfax Towers Falls Church, VA 415 17,889 74,727 2,156 17,889 76,883 94,772 15,509 79,263 81,868 — 1978/2011 Avalon Ballston Place Arlington, VA 383 38,490 123,645 4,640 38,490 128,285 166,775 20,296 146,479 150,147 — 2001/2013 Eaves Tysons Corner Vienna, VA 217 16,030 45,420 2,710 16,030 48,130 64,160 9,237 54,923 56,669 — 1980/2013 Avalon Ballston Square Arlington, VA 714 71,640 215,937 14,112 71,640 230,049 301,689 38,967 262,722 268,502 — 1992/2013 Avalon Courthouse Place Arlington, VA 564 56,550 178,032 9,924 56,550 187,956 244,506 31,392 213,114 218,300 118,112 1999/2013 Avalon Arlington North Arlington, VA 228 21,600 59,077 — 21,600 59,077 80,677 5,682 74,995 77,076 — 2014 Avalon Reston Landing Reston, VA 400 26,710 83,084 5,185 26,710 88,269 114,979 16,541 98,438 101,004 — 2000/2013 TOTAL MID-ATLANTIC 9,575 $ 545,982 $ 1,636,205 $ 157,208 $ 545,982 $ 1,793,413 $ 2,339,395 $ 472,359 $ 1,867,036 $ 1,918,882 $ 319,175 2013 Initial Cost Total Cost Community City and state Land Building /
Construction in
Progress &
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Construction in
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Depreciation Total Cost,
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Depreciation Encumbrances Year of
Completion/
Acquisition Boston, MA 9,034 36,540 29,873 9,034 66,413 75,447 23,974 51,473 — 1968/1998 Boston, MA 8,776 35,496 17,813 8,776 53,309 62,085 23,197 38,888 — 1968/1998 Boston, MA 8,002 32,370 16,241 8,002 48,611 56,613 21,150 35,463 — 1968/1998 Burlington, MA 7,714 32,536 71 7,714 32,607 40,321 1,185 39,136 — 1988/2012 Burlington, MA 15,600 62,100 2,150 15,600 64,250 79,850 153 79,697 — 1989/2013 Waltham, MA 29,660 93,659 5,725 29,660 99,384 129,044 7,305 121,739 — 1999/2013 Quincy, MA 12,120 39,220 2,232 12,120 41,452 53,572 3,379 50,193 37,212 1977/2013 Columbia, MD 8,603 34,432 15,842 8,603 50,274 58,877 26,655 32,222 — 1987/1996 Gaithersburg, MD 2,608 11,707 531 2,608 12,238 14,846 7,468 7,378 8,401 1996 Gaithersburg, MD 1,439 6,846 139 1,439 6,985 8,424 3,731 4,693 — 1998 Columbia, MD 8,802 35,536 11,426 8,802 46,962 55,764 14,663 41,101 — 1986 North Bethesda, MD 29,159 53,001 1,765 29,159 54,766 83,925 18,996 64,929 — 2004 North Potomac, MD 14,365 55,398 620 14,365 56,018 70,383 19,502 50,881 75,251 2004 Laurel, MD 10,800 46,924 2,491 10,800 49,415 60,215 3,862 56,353 39,972 1999/2013 Jersey City, NJ 8,760 82,422 20,320 8,760 102,742 111,502 50,429 61,073 — 1997 Lawrenceville, NJ 14,650 60,486 2,494 14,650 62,980 77,630 21,656 55,974 — 1994/1996 West Windsor, NJ 5,585 22,382 20,617 5,585 42,999 48,584 19,856 28,728 — 1988 Edgewater, NJ 14,528 60,240 4,000 14,528 64,240 78,768 26,363 52,405 76,088 2002 Florham Park, NJ 6,647 34,906 1,907 6,647 36,813 43,460 16,539 26,921 — 2001 Freehold, NJ 4,119 30,514 662 4,119 31,176 35,295 12,879 22,416 35,475 2002 Lawrenceville, NJ 6,766 45,366 602 6,766 45,968 52,734 14,710 38,024 38,013 2003 Lyndhurst, NJ 18,620 59,879 523 18,620 60,402 79,022 14,629 64,393 — 2006 Tinton Falls, NJ 7,939 33,173 49 7,939 33,222 41,161 6,545 34,616 — 2007 West Long Branch, NJ 2,721 22,940 (1 ) 2,721 22,939 25,660 2,625 23,035 — 2011 North Bergen, NJ 8,984 30,953 235 8,984 31,188 40,172 1,671 38,501 — 2012 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
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Accumulated
Depreciation Total Cost,
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AcquisitionPACIFIC NORTHWEST Seattle, WA Avalon Redmond Place Redmond, WA 222 $ 4,558 $ 18,368 $ 10,260 $ 4,558 $ 28,628 $ 33,186 $ 16,544 $ 16,642 $ 17,646 $ — 1991/1997 Avalon at Bear Creek Redmond, WA 264 6,786 27,641 4,187 6,786 31,828 38,614 19,969 18,645 19,290 — 1998/1998 Avalon Bellevue Bellevue, WA 201 6,664 24,119 1,920 6,664 26,039 32,703 14,262 18,441 19,258 24,695 2001 Avalon RockMeadow Bothell, WA 206 4,777 19,765 2,392 4,777 22,157 26,934 12,477 14,457 15,191 — 2000/2000 Avalon ParcSquare Redmond, WA 124 3,789 15,139 3,150 3,789 18,289 22,078 10,018 12,060 12,292 — 2000/2000 AVA Belltown Seattle, WA 100 5,644 12,733 1,013 5,644 13,746 19,390 7,387 12,003 12,409 60,766 2001 Avalon Meydenbauer Bellevue, WA 368 12,697 77,450 1,271 12,697 78,721 91,418 23,732 67,686 70,408 — 2008 Avalon Towers Bellevue (1) Bellevue, WA 397 — 123,029 925 — 123,954 123,954 27,956 95,998 100,369 — 2011 AVA Queen Anne Seattle, WA 203 12,081 41,618 431 12,081 42,049 54,130 7,488 46,642 48,129 — 2012 AVA Ballard Seattle, WA 265 16,460 46,926 985 16,460 47,911 64,371 6,478 57,893 59,684 — 2013 AVA University District Seattle, WA 283 12,594 60,845 480 12,594 61,325 73,919 6,634 67,285 69,274 — 2014 Eaves Redmond Campus Redmond, WA 422 22,580 88,001 5,994 22,580 93,995 116,575 17,418 99,157 102,525 — 1991/2013 Archstone Redmond Lakeview Redmond, WA 166 10,250 26,842 2,925 10,250 29,767 40,017 5,619 34,398 34,617 — 1987/2013 TOTAL PACIFIC NORTHWEST 3,221 $ 118,880 $ 582,476 $ 35,933 $ 118,880 $ 618,409 $ 737,289 $ 175,982 $ 561,307 $ 581,092 $ 85,461 NORTHERN CALIFORNIA San Jose, CA Avalon Campbell Campbell, CA 348 $ 11,830 $ 47,828 $ 13,459 $ 11,830 $ 61,287 $ 73,117 $ 33,162 $ 39,955 $ 42,162 $ 38,800 1995 Eaves San Jose San Jose, CA 440 12,920 53,047 18,869 12,920 71,916 84,836 33,693 51,143 53,631 — 1985/1996 Avalon on the Alameda San Jose, CA 305 6,119 50,225 2,873 6,119 53,098 59,217 31,720 27,497 28,335 49,930 1999 Avalon Mountain View Mountain View, CA 248 9,755 39,393 10,219 9,755 49,612 59,367 28,805 30,562 31,930 17,300 1986 Eaves Creekside Mountain View, CA 296 6,546 26,263 21,312 6,546 47,575 54,121 24,129 29,992 31,691 — 1962/1997 Avalon at Cahill Park San Jose, CA 218 4,765 47,600 1,775 4,765 49,375 54,140 24,304 29,836 31,284 — 2002 Avalon Morrison Park San Jose, CA 250 13,837 64,534 60 13,837 64,594 78,431 6,429 72,002 74,236 — 2014 Avalon Willow Glen San Jose, CA 412 46,060 81,957 4,137 46,060 86,094 132,154 16,506 115,648 118,974 — 2002/2013 Eaves West Valley San Jose, CA 873 90,890 132,040 8,581 90,890 140,621 231,511 25,740 205,771 209,788 146,696 1970/2013 Eaves Mountain View at Middlefield Mountain View, CA 402 64,070 69,018 5,316 64,070 74,334 138,404 15,001 123,403 126,006 — 1969/2013 Total San Jose, CA 3,792 $ 266,792 $ 611,905 $ 86,601 $ 266,792 $ 698,506 $ 965,298 $ 239,489 $ 725,809 $ 748,037 $ 252,726 Oakland - East Bay, CA Avalon Fremont Fremont, CA 308 $ 10,746 $ 43,399 $ 5,668 $ 10,746 $ 49,067 $ 59,813 $ 31,715 $ 28,098 $ 29,516 $ — 1992/1994 2013 Initial Cost Total Cost Community City and state Land Building /
Construction in
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Construction in
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Improvements Total Accumulated
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Completion/
Acquisition Wood-Ridge, NJ 14,682 41,616 1,161 14,682 42,777 57,459 2,450 55,009 — 2012 Smithtown, NY 4,679 28,286 5,660 4,679 33,946 38,625 17,351 21,274 — 1997 Nanuet, NY 8,428 45,660 3,280 8,428 48,940 57,368 26,480 30,888 64,149 1998 Elmsford, NY 1,820 10,525 1,403 1,820 11,928 13,748 7,558 6,190 — 1995 Long Beach, NY 3,118 11,973 6,614 3,118 18,587 21,705 10,753 10,952 — 1990/1995 Mamaroneck, NY 6,207 40,791 1,327 6,207 42,118 48,325 20,381 27,944 — 2000 Melville, NY 9,228 50,063 2,690 9,228 52,753 61,981 26,781 35,200 — 1997/2000 Bronxville, NY 2,889 28,324 7,948 2,889 36,272 39,161 14,572 24,589 — 1999 Long Island City, NY — 94,061 3,593 — 97,654 97,654 38,010 59,644 — 2002 Glen Cove, NY 7,871 59,969 993 7,871 60,962 68,833 19,855 48,978 — 2004 Coram, NY 8,700 62,931 351 8,700 63,282 71,982 18,703 53,279 — 2005/2006 New York, NY 18,575 75,009 1,739 18,575 76,748 95,323 19,439 75,884 93,800 2006 Glen Cove, NY 2,577 37,336 167 2,577 37,503 40,080 8,726 31,354 — 2007 Long Island City, NY — 166,856 2,151 — 169,007 169,007 36,401 132,606 — 2007 New York, NY 9,106 47,199 1,384 9,106 48,583 57,689 10,120 47,569 — 2007 White Plains, NY 15,391 137,353 11 15,391 137,364 152,755 22,593 130,162 — 2009 New York, NY — 114,327 787 — 115,114 115,114 20,490 94,624 100,000 2009 Coram, NY 14,715 33,640 28 14,715 33,668 48,383 5,606 42,777 — 2009 Brooklyn, NY 83,038 218,444 642 83,038 219,086 302,124 27,435 274,689 — 2010 Rockville Centre, NY 32,212 78,622 — 32,212 78,622 110,834 5,587 105,247 — 2012 Elmsford, NY 27,724 76,825 — 27,724 76,825 104,549 4,596 99,953 — 2012 Westbury, NY 69,620 43,781 5,809 69,620 49,590 119,210 7,036 112,174 83,460 2006/2013 New York, NY 154,740 180,243 11,788 154,740 192,031 346,771 16,875 329,896 100,500 1998/2013 New York, NY 84,058 105,831 5,971 84,058 111,802 195,860 8,969 186,891 147,000 2008/2013 New York, NY 71,412 89,860 5,167 71,412 95,027 166,439 7,698 158,741 121,500 2007/2013 Philadelphia, PA 3,100 22,342 793 3,100 23,135 26,235 1,313 24,922 10,427 1945/2013 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
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Acquisition /
Construction Land and improvements Building /
Construction in
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Depreciation Total Cost,
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Depreciation Encumbrances Year of
Completion/
AcquisitionEaves Pleasanton Pleasanton, CA 456 11,610 46,552 21,507 11,610 68,059 79,669 37,905 41,764 43,952 — 1988/1994 Eaves Union City Union City, CA 208 4,249 16,820 3,166 4,249 19,986 24,235 12,893 11,342 11,834 — 1973/1996 Eaves Fremont Fremont, CA 235 6,581 26,583 9,797 6,581 36,380 42,961 21,576 21,385 22,507 — 1985/1994 Avalon Union City Union City, CA 439 14,732 104,024 759 14,732 104,783 119,515 27,120 92,395 96,048 — 2009 Avalon Walnut Creek (1) Walnut Creek, CA 418 — 146,097 2,815 — 148,912 148,912 33,095 115,817 120,512 3,420 2010 Eaves Walnut Creek (2) Walnut Creek, CA 510 30,320 82,375 14,605 30,320 96,980 127,300 15,766 111,534 111,669 — 1987/2013 Avalon Walnut Ridge II Walnut Creek, CA 360 27,190 57,041 3,801 27,190 60,842 88,032 11,211 76,821 78,524 — 1989/2013 Avalon Berkeley Berkeley, CA 94 4,500 28,611 — 4,500 28,611 33,111 2,504 30,607 31,446 — 2014 Total Oakland - East Bay, CA 3,028 $ 109,928 $ 551,502 $ 62,118 $ 109,928 $ 613,620 $ 723,548 $ 193,785 $ 529,763 $ 546,008 $ 3,420 San Francisco, CA Eaves Daly City Daly City, CA 195 $ 4,230 $ 9,659 $ 19,017 $ 4,230 $ 28,676 $ 32,906 $ 16,733 $ 16,173 $ 16,838 $ — 1972/1997 AVA Nob Hill San Francisco, CA 185 5,403 21,567 7,067 5,403 28,634 34,037 16,057 17,980 18,861 20,800 1990/1995 Eaves San Rafael San Rafael, CA 254 5,982 16,885 24,604 5,982 41,489 47,471 20,782 26,689 27,899 — 1973/1996 Eaves Foster City Foster City, CA 288 7,852 31,445 11,296 7,852 42,741 50,593 24,153 26,440 27,811 — 1973/1994 Eaves Pacifica Pacifica, CA 220 6,125 24,796 2,873 6,125 27,669 33,794 17,619 16,175 17,057 17,600 1971/1995 Avalon Sunset Towers San Francisco, CA 243 3,561 21,321 15,463 3,561 36,784 40,345 18,526 21,819 22,583 — 1961/1996 Eaves Diamond Heights San Francisco, CA 154 4,726 19,130 6,031 4,726 25,161 29,887 14,574 15,313 15,928 — 1972/1994 Avalon at Mission Bay I San Francisco, CA 250 14,029 78,452 3,302 14,029 81,754 95,783 38,957 56,826 59,334 67,772 2003 Avalon at Mission Bay III San Francisco, CA 260 28,687 119,156 300 28,687 119,456 148,143 31,052 117,091 120,981 — 2009 Avalon Ocean Avenue San Francisco, CA 173 5,544 50,906 1,783 5,544 52,689 58,233 8,653 49,580 51,446 — 2012 AVA 55 Ninth San Francisco, CA 273 20,267 97,321 1,235 20,267 98,556 118,823 9,409 109,414 112,904 — 2014 Avalon San Bruno I San Bruno, CA 300 40,780 68,684 3,464 40,780 72,148 112,928 12,654 100,274 102,464 64,450 2004/2013 Avalon San Bruno II San Bruno, CA 185 23,787 44,934 1,792 23,787 46,726 70,513 7,634 62,879 64,310 30,001 2007/2013 Avalon San Bruno III San Bruno, CA 187 33,303 62,910 2,743 33,303 65,653 98,956 10,713 88,243 90,108 54,408 2010/2013 Total San Francisco, CA 3,167 $ 204,276 $ 667,166 $ 100,970 $ 204,276 $ 768,136 $ 972,412 $ 247,516 $ 724,896 $ 748,524 $ 255,031 TOTAL NORTHERN CALIFORNIA 9,987 $ 580,996 $ 1,830,573 $ 249,689 $ 580,996 $ 2,080,262 $ 2,661,258 $ 680,790 $ 1,980,468 $ 2,042,569 $ 511,177 SOUTHERN CALIFORNIA Los Angeles, CA AVA Burbank Burbank, CA 748 $ 22,483 $ 28,104 $ 48,244 $ 22,483 $ 76,348 $ 98,831 $ 37,963 $ 60,868 $ 63,710 $ — 1961/1997 Avalon Woodland Hills Woodland Hills, CA 663 23,828 40,372 48,635 23,828 89,007 112,835 42,401 70,434 72,111 — 1989/1997 Eaves Warner Center Woodland Hills, CA 227 7,045 12,986 9,555 7,045 22,541 29,586 14,995 14,591 15,589 — 1979/1998 2013 Initial Cost Total Cost Community City and state Land Building /
Construction in
Progress &
Improvements Costs Subsequent to Acquisition / Construction Land Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
Acquisition Providence, RI — 26,816 10,230 — 37,046 37,046 18,410 18,636 — 1991/1997 Flower Mound, TX 5,050 25,436 1,622 5,050 27,058 32,108 2,501 29,607 16,780 2000/2013 Houston, TX 37,070 45,981 4,300 37,070 50,281 87,351 5,680 81,671 — 1996/2013 Fairfax, VA 6,096 24,400 8,036 6,096 32,436 38,532 16,615 21,917 — 1989/1996 Arlington, VA 7,291 29,177 16,117 7,291 45,294 52,585 22,558 30,027 — 1990 Fairfax, VA 2,152 8,907 5,390 2,152 14,297 16,449 6,068 10,381 — 1988/1997 McLean, VA 13,851 43,397 1,455 13,851 44,852 58,703 25,130 33,573 — 1996 Arlington, VA 22,041 90,296 2,493 22,041 92,789 114,830 39,615 75,215 — 2001 Falls Church, VA 17,889 74,727 639 17,889 75,366 93,255 6,979 86,276 — 1978/2011 Arlington, VA 38,530 123,605 3,647 38,530 127,252 165,782 7,218 158,564 — 2001/2013 Vienna, VA 13,690 47,760 2,240 13,690 50,000 63,690 3,615 60,075 — 1980/2013 Arlington, VA 71,720 215,857 9,506 71,720 225,363 297,083 15,924 281,159 — 1992/2013 Arlington, VA 56,630 177,952 7,799 56,630 185,751 242,381 12,795 229,586 140,332 1999/2013 Reston, VA 28,280 81,514 4,127 28,280 85,641 113,921 6,640 107,281 — 2000/2013 Arlington, VA 18,930 38,465 1,840 18,930 40,305 59,235 2,980 56,255 42,703 1987/2013 Redmond, WA 4,558 18,368 9,593 4,558 27,961 32,519 13,534 18,985 — 1991/1997 Redmond, WA 6,786 27,641 3,295 6,786 30,936 37,722 16,170 21,552 — 1998 Bellevue, WA 6,664 24,119 1,633 6,664 25,752 32,416 11,190 21,226 25,856 2001 Bothell, WA 4,777 19,765 1,651 4,777 21,416 26,193 9,806 16,387 — 2000 Redmond, WA 3,789 15,139 2,343 3,789 17,482 21,271 7,900 13,371 — 2000 Lynwood, WA 8,608 36,679 1,615 8,608 38,294 46,902 16,740 30,162 — 2001 Seattle, WA 5,644 12,733 821 5,644 13,554 19,198 5,805 13,393 — 2001 Bellevue, WA 12,697 77,451 1,191 12,697 78,642 91,339 15,319 76,020 — 2008 Bellevue, WA — 123,020 247 — 123,267 123,267 14,551 108,716 — 2011 Seattle, WA 12,081 41,699 5 12,081 41,704 53,785 2,802 50,983 — 2012 Lynwood, WA 2,655 11,343 — 2,655 11,343 13,998 1,021 12,977 — 2011 Redmond, WA 24,370 86,211 4,042 24,370 90,253 114,623 6,901 107,722 — 1991/2013 Redmond, WA 10,580 26,512 1,368 10,580 27,880 38,460 2,227 36,233 — 1987/2013 $ 3,082,550 $ 9,848,158 $ 944,689 $ 3,082,550 $ 10,792,847 $ 13,875,397 $ 2,449,999 $ 11,425,398 $ 3,287,937 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
AcquisitionAvalon Glendale (1) Glendale, CA 223 — 42,564 1,620 — 44,184 44,184 20,062 24,122 25,401 — 2003 Avalon Burbank Burbank, CA 400 14,053 56,827 24,294 14,053 81,121 95,174 34,847 60,327 62,757 — 1988/2002 Avalon Camarillo Camarillo, CA 249 8,446 40,290 628 8,446 40,918 49,364 14,959 34,405 35,571 — 2006 Avalon Wilshire Los Angeles, CA 123 5,459 41,182 1,176 5,459 42,358 47,817 14,216 33,601 34,959 61,268 2007 Avalon Encino Encino, CA 131 12,789 49,073 803 12,789 49,876 62,665 14,253 48,412 49,863 33,882 2008 Avalon Warner Place Canoga Park, CA 210 7,920 44,845 535 7,920 45,380 53,300 13,573 39,727 40,914 — 2008 Eaves Phillips Ranch Pomona, CA 501 9,796 41,740 1,141 9,796 42,881 52,677 8,619 44,058 44,927 — 1989/2011 Eaves San Dimas San Dimas, CA 102 1,916 7,819 1,265 1,916 9,084 11,000 1,786 9,214 9,381 — 1978/2011 Eaves San Dimas Canyon San Dimas, CA 156 2,953 12,428 529 2,953 12,957 15,910 2,621 13,289 13,568 — 1981/2011 AVA Pasadena Pasadena, CA 84 8,400 11,547 5,513 8,400 17,060 25,460 2,581 22,879 23,511 11,287 1973/2012 Eaves Cerritos Artesia, CA 151 8,305 21,195 1,431 8,305 22,626 30,931 3,588 27,343 28,143 — 1973/2012 Avalon Playa Vista Los Angeles, CA 309 30,900 72,008 2,303 30,900 74,311 105,211 11,435 93,776 96,612 — 2006/2012 Avalon San Dimas San Dimas, CA 156 9,141 30,727 — 9,141 30,727 39,868 2,618 37,250 38,391 — 2014 Avalon Mission Oaks Camarillo, CA 160 9,600 35,842 2,943 9,600 38,785 48,385 4,104 44,281 44,423 19,545 2014 Avalon Simi Valley Simi Valley, CA 500 42,020 73,361 4,705 42,020 78,066 120,086 14,611 105,475 108,062 — 2007/2013 AVA Studio City II Studio City, CA 101 4,626 22,954 1,502 4,626 24,456 29,082 4,234 24,848 25,449 — 1991/2013 Avalon Studio City Studio City, CA 276 15,756 78,178 4,501 15,756 82,679 98,435 14,193 84,242 86,237 — 2002/2013 Avalon Calabasas Calabasas, CA 600 42,720 107,642 9,215 42,720 116,857 159,577 23,066 136,511 140,486 97,980 1988/2013 Avalon Oak Creek Agoura Hills, CA 336 43,540 79,974 5,314 43,540 85,288 128,828 17,548 111,280 114,645 69,696 2004/2013 Avalon Del Mar Station Pasadena, CA 347 20,560 106,556 3,459 20,560 110,015 130,575 17,007 113,568 117,160 70,854 2006/2013 Eaves Old Town Pasadena Pasadena, CA 96 9,110 15,371 1,510 9,110 16,881 25,991 3,347 22,644 23,171 14,120 1972/2013 Eaves Thousand Oaks Thousand Oaks, CA 154 13,950 20,211 2,468 13,950 22,679 36,629 5,143 31,486 32,148 26,392 1992/2013 Eaves Los Feliz Los Angeles, CA 263 18,940 43,661 3,772 18,940 47,433 66,373 8,810 57,563 58,938 41,302 1989/2013 Eaves Woodland Hills Woodland Hills, CA 883 68,940 90,549 10,439 68,940 100,988 169,928 21,061 148,867 151,841 98,732 1971/2013 Avalon Thousand Oaks Plaza Thousand Oaks, CA 148 12,810 22,581 2,006 12,810 24,587 37,397 5,140 32,257 33,092 — 2002/2013 Total Los Angeles, CA 8,297 $ 476,006 $ 1,250,587 $ 199,506 $ 476,006 $ 1,450,093 $ 1,926,099 $ 378,781 $ 1,547,318 $ 1,591,060 $ 545,058 Orange County, CA AVA Newport Costa Mesa, CA 145 $ 1,975 $ 3,814 $ 9,838 $ 1,975 $ 13,652 $ 15,627 $ 6,497 $ 9,130 $ 9,592 $ — 1956/1996 Eaves Mission Viejo Mission Viejo, CA 166 2,517 9,257 3,520 2,517 12,777 15,294 8,149 7,145 7,676 7,635 1984/1996 Eaves South Coast Costa Mesa, CA 258 4,709 16,063 12,933 4,709 28,996 33,705 15,876 17,829 18,770 — 1973/1996 Eaves Santa Margarita Rancho Santa Margarita, CA 301 4,607 16,911 10,526 4,607 27,437 32,044 14,820 17,224 18,166 — 1990/1997 Eaves Huntington Beach Huntington Beach, CA 304 4,871 19,745 10,172 4,871 29,917 34,788 18,824 15,964 16,503 — 1971/1997 2013 Initial Cost Total Cost Community City and state Land Building /
Construction in
Progress &
Improvements Costs Subsequent to Acquisition / Construction Land Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
Acquisition Irvine, CA $ 4,358 $ 40,871 $ — $ 4,358 $ 40,871 $ 45,229 $ 1,301 $ 43,928 $ — N/A Los Angeles, CA — 198 62,040 — 62,238 62,238 — 62,238 — N/A Dublin, CA — 753 73,346 — 74,099 74,099 — 74,099 — N/A San Francisco, CA — 1,183 99,675 — 100,858 100,858 — 100,858 — N/A San Jose, CA — 760 67,683 — 68,443 68,443 — 68,443 — N/A San Dimas, CA — — 18,729 — 18,729 18,729 — 18,729 — N/A San Francisco, CA — 113 38,939 — 39,052 39,052 — 39,052 — N/A Glendora, CA — 53 22,999 — 23,052 23,052 — 23,052 — N/A Vista, CA — — 15,349 — 15,349 15,349 — 15,349 — N/A Lake Forest, CA — — 34,803 — 34,803 34,803 — 34,803 — N/A Berkeley, CA — 167 22,929 — 23,096 23,096 — 23,096 — N/A San Jose, CA — 17,291 — — 17,291 17,291 114 17,177 — N/A Shelton, CT 7,779 40,406 — 7,779 40,406 48,185 770 47,415 — N/A Norwalk, CT 10,224 35,864 1 10,224 35,865 46,089 292 45,797 — N/A Stratford, CT — 28 13,370 — 13,398 13,398 — 13,398 — N/A Washington, DC 7,412 25,481 — 7,412 25,481 32,893 811 32,082 — N/A Washington, DC 51,000 146,650 2,387 51,000 149,037 200,037 6,655 193,382 142,061 N/A Boston, MA — 980 94,599 — 95,579 95,579 — 95,579 — N/A Natick, MA 15,637 63,487 — 15,637 63,487 79,124 1,084 78,040 — N/A Somerville, MA — 457 99,423 — 99,880 99,880 — 99,880 — N/A Boston, MA — — 52,037 — 52,037 52,037 — 52,037 — N/A Canton, MA — 90 20,548 — 20,638 20,638 — 20,638 — N/A Hackensack, NJ — 44,270 — — 44,270 44,270 675 43,595 — N/A Somerset, NJ 18,241 57,652 1 18,241 57,653 75,894 1,230 74,664 — N/A Wood-Ridge, NJ 6,502 16,309 — 6,502 16,309 22,811 348 22,463 — N/A Bloomingsdale, NJ 1,801 17,616 9,414 1,801 27,030 28,831 105 28,726 — N/A Wharton, NJ — 28 20,505 — 20,533 20,533 — 20,533 — N/A Bloomfield, NJ — 33 12,299 — 12,332 12,332 — 12,332 — N/A New York, NY — 2,502 226,448 — 228,950 228,950 — 228,950 — N/A 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
AcquisitionAvalon Anaheim Stadium Anaheim, CA 251 27,874 69,156 1,255 27,874 70,411 98,285 19,330 78,955 80,804 — 2009 Avalon Irvine I Irvine, CA 279 9,911 67,520 586 9,911 68,106 78,017 17,323 60,694 62,562 — 2010 Avalon Irvine II Irvine, CA 179 4,358 40,906 — 4,358 40,906 45,264 5,729 39,535 41,023 — 2013 Eaves Lake Forest Lake Forest, CA 225 5,199 21,134 2,272 5,199 23,406 28,605 4,735 23,870 24,598 — 1975/2011 Eaves Seal Beach Seal Beach, CA 549 46,790 99,999 4,847 46,790 104,846 151,636 18,977 132,659 136,470 — 1971/2013 Total Orange County, CA 2,657 $ 112,811 $ 364,505 $ 55,949 $ 112,811 $ 420,454 $ 533,265 $ 130,260 $ 403,005 $ 416,164 $ 7,635 San Diego, CA Eaves Mission Ridge San Diego, CA 200 $ 2,710 $ 10,924 $ 11,846 $ 2,710 $ 22,770 $ 25,480 $ 13,784 $ 11,696 $ 12,004 $ — 1960/1997 AVA Cortez Hill (1) San Diego, CA 299 2,768 20,134 23,568 2,768 43,702 46,470 21,927 24,543 26,003 — 1973/1998 Avalon Fashion Valley San Diego, CA 161 19,627 44,972 598 19,627 45,570 65,197 13,011 52,186 53,513 — 2008 Eaves Rancho Penasquitos San Diego, CA 250 6,692 27,143 2,679 6,692 29,822 36,514 5,787 30,727 31,147 — 1986/2011 Eaves La Mesa La Mesa, CA 168 9,490 28,482 1,694 9,490 30,176 39,666 5,826 33,840 34,813 — 1989/2013 Total San Diego, CA 1,078 $ 41,287 $ 131,655 $ 40,385 $ 41,287 $ 172,040 $ 213,327 $ 60,335 $ 152,992 $ 157,480 $ — TOTAL SOUTHERN CALIFORNIA 12,032 $ 630,104 $ 1,746,747 $ 295,840 $ 630,104 $ 2,042,587 $ 2,672,691 $ 569,376 $ 2,103,315 $ 2,164,704 $ 552,693 TOTAL ESTABLISHED COMMUNITIES 54,908 $ 2,911,906 $ 9,502,093 $ 1,097,378 $ 2,911,906 $ 10,599,471 $ 13,511,377 $ 3,093,845 $ 10,417,532 $ 10,701,057 $ 2,364,747 2013 Initial Cost Total Cost Community City and state Land Building /
Construction in
Progress &
Improvements Costs Subsequent to Acquisition / Construction Land Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
Acquisition Garden City, NY 18,200 49,283 — 18,200 49,283 67,483 2,241 65,242 — N/A Ossining, NY — 64 24,704 — 24,768 24,768 — 24,768 — N/A Huntington Station, NY — 302 48,619 — 48,921 48,921 — 48,921 — N/A Brooklyn, NY — 19 172,253 — 172,272 172,272 — 172,272 — N/A Houston, TX 11,515 53,802 21,102 11,515 74,904 86,419 943 85,476 — N/A Houston, TX — 333 35,587 — 35,920 35,920 — 35,920 — N/A Tysons Corner, VA 13,554 63,488 — 13,554 63,488 77,042 2,543 74,499 — N/A Tysons Corner, VA 9,727 25,746 74,837 9,727 100,583 110,310 155 110,155 — N/A Arlington, VA — 940 68,584 — 69,524 69,524 — 69,524 — N/A Seattle, WA 16,460 46,661 — 16,460 46,661 63,121 1,060 62,061 — N/A Seattle, WA 5,476 27,512 35,652 5,476 63,164 68,640 183 68,457 — N/A Lynnwood, WA — 89 31,199 — 31,288 31,288 — 31,288 — N/A 197,886 781,481 1,520,061 197,886 2,301,542 2,499,428 20,510 2,478,918 142,061 300,364 — — 300,364 — 300,364 — 300,364 — 37,362 21,323 66,447 37,362 87,770 125,132 45,603 79,529 2,600,000 $ 3,618,162 $ 10,650,962 $ 2,531,197 $ 3,618,162 $ 13,182,159 $ 16,800,321 $ 2,516,112 $ 14,284,209 $ 6,029,998 (1)This community is a Fund asset which the Company consolidated beginning in 2011. 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
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Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
AcquisitionOTHER STABILIZED Eaves Dublin Dublin, CA 204 $ 5,276 $ 19,642 $ 12,363 $ 5,276 $ 32,005 $ 37,281 $ 16,628 $ 20,653 $ 21,831 $ — 1989/1997 AVA Pacific Beach San Diego, CA 564 9,922 40,580 40,819 9,922 81,399 91,321 38,097 53,224 55,522 — 1969/1997 Avalon Silicon Valley Sunnyvale, CA 710 20,713 99,573 31,536 20,713 131,109 151,822 66,781 85,041 68,714 — 1998 AVA Little Tokyo Los Angeles, CA 280 14,734 93,985 318 14,734 94,303 109,037 7,123 101,914 104,796 — 2015 Eaves San Marcos San Marcos, CA 184 3,277 13,385 4,601 3,277 17,986 21,263 2,961 18,302 15,267 — 1988/2011 Avalon Dublin Station Dublin, CA 253 7,772 72,067 — 7,772 72,067 79,839 7,037 72,802 74,302 — 2014 Avalon Hayes Valley San Francisco, CA 182 12,594 81,104 — 12,594 81,104 93,698 4,953 88,745 90,402 — 2015 Avalon Vista Vista, CA 221 12,686 43,409 — 12,686 43,409 56,095 2,583 53,512 54,459 — 2015 Avalon Baker Ranch Lake Forest, CA 430 31,687 98,499 — 31,687 98,499 130,186 5,744 124,442 126,925 — 2015 Studio 77 North Hollywood, CA 156 18,408 49,485 4,069 18,408 53,554 71,962 1,146 70,816 N/A — 2015/2016 Avalon Santa Monica on Main Santa Monica, CA 133 32,000 60,770 12,677 32,000 73,447 105,447 11,230 94,217 95,038 — 2007/2013 Avalon La Jolla Colony San Diego, CA 180 16,760 27,694 12,222 16,760 39,916 56,676 6,293 50,383 43,289 26,682 1987/2013 Avalon Walnut Ridge I Walnut Creek, CA 106 9,860 19,850 5,038 9,860 24,888 34,748 3,827 30,921 29,351 — 2000/2013 Toluca Hills Apartments by Avalon Los Angeles, CA 1,151 86,450 161,256 13,106 86,450 174,362 260,812 32,998 227,814 231,169 — 1973/2013 Avalon Pasadena Pasadena, CA 120 10,240 31,558 6,683 10,240 38,241 48,481 5,901 42,580 39,890 25,805 2004/2013 Avalon Exeter (1) Boston, MA 187 16,313 110,028 147 16,313 110,175 126,488 9,744 116,744 120,677 — 2014 AVA Somerville (1) Somerville, MA 250 10,865 56,324 19 10,865 56,343 67,208 4,142 63,066 68,918 — 2015 AVA Back Bay Boston, MA 271 9,034 36,540 46,284 9,034 82,824 91,858 31,158 60,700 56,462 — 1968/1998 Avalon Bear Hill Waltham, MA 324 27,350 94,168 28,646 27,350 122,814 150,164 19,141 131,023 127,367 — 1999/2013 Avalon Wharton Wharton, NJ 247 2,273 48,608 — 2,273 48,608 50,881 3,426 47,455 49,079 — 2015 Avalon Roseland Roseland, NJ 136 11,281 34,814 — 11,281 34,814 46,095 2,017 44,078 45,016 — 2015 Avalon Hoboken Hoboken, NJ 217 37,237 86,508 8,660 37,237 95,168 132,405 7,970 124,435 N/A 67,904 2008/2016 Avalon Green I Elmsford, NY 105 1,820 10,525 7,516 1,820 18,041 19,861 9,228 10,633 10,711 — 1995 Avalon Towers Long Beach, NY 109 3,118 11,973 20,790 3,118 32,763 35,881 14,106 21,775 22,465 — 1990/1995 Avalon Riverview North (1) Long Island City, NY 602 — 166,099 9,907 — 176,006 176,006 53,588 122,418 121,052 — 2008 Avalon West Chelsea (1) New York, NY 305 — 123,066 31 — 123,097 123,097 20,277 102,820 109,020 — 2015 Avalon Huntington Station Huntington Station, NY 303 21,896 58,660 — 21,896 58,660 80,556 5,094 75,462 77,534 — 2014 Archstone Lexington Flower Mound, TX 222 4,540 25,946 1,937 4,540 27,883 32,423 5,754 26,669 27,706 21,601 2000/2013 Archstone Toscano Houston, TX 474 15,607 72,473 — 15,607 72,473 88,080 8,261 79,819 82,155 — 2014 Memorial Heights Villages Houston, TX 318 9,607 44,587 — 9,607 44,587 54,194 5,686 48,508 50,311 — 2014 Avalon Mosaic Fairfax, VA 531 33,490 75,802 — 33,490 75,802 109,292 7,655 101,637 104,300 — 2014 2013 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
AcquisitionAvalon Potomac Yard Alexandria, VA 323 24,225 76,633 7,849 24,225 84,482 108,707 5,374 103,333 N/A — 2014/2016 Avalon Clarendon Arlington, VA 300 22,573 89,431 8,744 22,573 98,175 120,748 2,903 117,845 N/A — 2002/2016 Avalon Columbia Pike Arlington, VA 269 18,830 76,429 6,904 18,830 83,333 102,163 1,811 100,352 N/A 70,019 2009/2016 Oakwood Arlington Arlington, VA 184 18,850 38,545 2,861 18,850 41,406 60,256 7,117 53,139 53,844 — 1987/2013 Avalon Alderwood I Lynnwood, WA 367 12,294 55,612 — 12,294 55,612 67,906 4,515 63,391 65,247 — 2015 TOTAL OTHER STABILIZED 10,918 $ 593,582 $ 2,305,628 $ 293,727 $ 593,582 $ 2,599,355 $ 3,192,937 $ 442,269 $ 2,750,668 $ 2,242,819 $ 212,011 LEASE-UP Avalon Glendora Glendora, CA 280 $ 18,311 $ 64,649 $ — $ 18,311 $ 64,649 $ 82,960 $ 2,602 $ 80,358 $ 81,730 $ — 2016 Avalon Irvine III Irvine, CA 156 11,607 43,872 — 11,607 43,872 55,479 1,247 54,232 52,308 — 2016 Avalon Dublin Station II Dublin, CA 252 7,762 76,421 — 7,762 76,421 84,183 2,077 82,106 80,691 — 2016 AVA Theater District Boston, MA 398 17,024 163,055 — 17,024 163,055 180,079 7,692 172,387 175,257 — 2015 Avalon Marlborough Marlborough, MA 350 15,315 60,153 — 15,315 60,153 75,468 3,129 72,339 73,460 — 2015 Avalon Framingham Framingham, MA 180 9,309 34,554 — 9,309 34,554 43,863 1,468 42,395 43,101 — 2015 Avalon Bloomfield Station Bloomfield, NJ 224 10,701 39,429 — 10,701 39,429 50,130 2,099 48,031 49,968 — 2015 Avalon Union Union, NJ 202 11,695 36,014 — 11,695 36,014 47,709 1,094 46,615 39,456 — 2016 Avalon Green III Elmsford, NY 68 4,985 17,237 — 4,985 17,237 22,222 637 21,585 21,103 — 2016 Avalon Falls Church Falls Church, VA 384 39,544 66,202 — 39,544 66,202 105,746 3,467 102,279 103,438 — 2016 AVA Capitol Hill Seattle, WA 249 20,613 60,276 — 20,613 60,276 80,889 1,983 78,906 79,008 — 2016 Avalon Alderwood II Redmond, WA 124 5,072 21,390 — 5,072 21,390 26,462 347 26,115 14,264 — 2016 TOTAL LEASE-UP 2,867 $ 171,938 $ 683,252 $ — $ 171,938 $ 683,252 $ 855,190 $ 27,842 $ 827,348 $ 813,784 $ — REDEVELOPMENT Avalon Towers on the Peninsula Mountain View, CA 211 $ 9,560 $ 56,136 $ 8,886 $ 9,560 $ 65,022 $ 74,582 $ 29,059 $ 45,523 $ 39,705 $ — 2002 AVA Studio City I Studio City, CA 450 17,658 90,715 24,339 17,658 115,054 132,712 16,391 116,321 100,198 — 1987/2013 Avalon at Edgewater (3) Edgewater, NJ 168 5,982 24,389 4,681 5,982 29,070 35,052 13,929 21,123 27,453 — 2002 Avalon at Arlington Square Arlington, VA 842 22,041 90,296 25,065 22,041 115,361 137,402 49,956 87,446 84,234 — 2001 TOTAL REDEVLOPMENT 1,671 $ 55,241 $ 261,536 $ 62,971 $ 55,241 $ 324,507 $ 379,748 $ 109,335 $ 270,413 $ 251,590 $ — TOTAL CURRENT COMMUNITIES 70,364 $ 3,732,667 $ 12,752,509 $ 1,454,076 $ 3,732,667 $ 14,206,585 $ 17,939,252 $ 3,673,291 $ 14,265,961 $ 14,009,250 $ 2,576,758 2016 2015 2016 Initial Cost Total Cost Community City and state # of homes Land and improvements Building /
Construction in
Progress &
Improvements Costs
Subsequent to
Acquisition /
Construction Land and improvements Building /
Construction in
Progress &
Improvements Total Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Total Cost,
Net of
Accumulated
Depreciation Encumbrances Year of
Completion/
AcquisitionDEVELOPMENT (4) Avalon West Hollywood West Hollywood, CA 294 $ — $ 1,438 $ 128,735 $ — $ 130,173 $ 130,173 $ — $ 130,173 $ 81,067 $ — N/A Avalon Chino Hills Chino Hills, CA 331 2,108 15,878 69,487 2,108 85,365 87,473 67 87,406 24,639 — N/A Avalon Dogpatch San Francisco, CA 326 — 362 108,203 — 108,565 108,565 — 108,565 62,306 — N/A Avalon Public Market Emeryville, CA 285 — 83 29,615 — 29,698 29,698 — 29,698 N/A — N/A AVA Hollywood Hollywood, CA 695 — 181 123,086 — 123,267 123,267 — 123,267 N/A — N/A Avalon Huntington Beach Huntington Beach, CA 378 10,560 86,201 19,701 10,560 105,902 116,462 1,193 115,269 88,629 — N/A AVA NoMa Washington, D.C. 438 — 987 108,213 — 109,200 109,200 — 109,200 47,794 — N/A Avalon North Station Boston, MA 503 1,633 19,710 227,728 1,633 247,438 249,071 49 249,022 142,911 — N/A Avalon Quincy Quincy, MA 395 8,586 46,296 29,740 8,586 76,036 84,622 490 84,132 34,498 — N/A Avalon Easton Easton, MA 290 — 137 28,937 — 29,074 29,074 — 29,074 N/A — N/A AVA Wheaton Wheaton, MD 319 — 307 35,054 — 35,361 35,361 — 35,361 18,295 — N/A Avalon Hunt Valley Hunt Valley, MD 332 4,773 28,466 33,969 4,773 62,435 67,208 189 67,019 29,230 — N/A Avalon Laurel Laurel, MD 344 7,766 48,128 14,381 7,766 62,509 70,275 743 69,532 31,008 — N/A Avalon Princeton Princeton, NJ 280 7,832 21,418 59,298 7,832 80,716 88,548 188 88,360 50,071 — N/A Avalon Maplewood Maplewood, NJ 235 — 620 47,833 — 48,453 48,453 — 48,453 19,180 — N/A Avalon Boonton Boonton, NJ 350 — 124 8,168 — 8,292 8,292 — 8,292 N/A — N/A Avalon Teaneck Teaneck, NJ 248 — — 14,034 — 14,034 14,034 — 14,034 N/A — N/A Avalon Willoughby Square/AVA DoBro Brooklyn, NY 826 114,499 294,247 44,940 114,499 339,187 453,686 5,873 447,813 408,812 — N/A Avalon Great Neck Great Neck, NY 191 — 424 55,247 — 55,671 55,671 — 55,671 26,237 — N/A Avalon Sheepshead Bay Brooklyn, NY 180 — 327 58,506 — 58,833 58,833 — 58,833 20,394 — N/A Avalon Rockville Centre II Rockville Centre, NY 165 — 249 26,547 — 26,796 26,796 — 26,796 11,302 — N/A Avalon Somers Somers, NY 152 — 38 16,548 — 16,586 16,586 — 16,586 N/A — N/A 11 West 61st Street New York, NY 172 — — 348,821 — 348,821 348,821 — 348,821 N/A — N/A Avalon Esterra Park Redmond, WA 482 14,034 69,247 45,866 14,034 115,113 129,147 1,161 127,986 84,428 — N/A Avalon Newcastle Commons I Newcastle, WA 378 1,054 12,210 79,057 1,054 91,267 92,321 54 92,267 27,140 — N/A Avalon Belltown Towers Seattle, WA 275 — 50 29,336 — 29,386 29,386 — 29,386 N/A — N/A TOTAL DEVELOPMENT 8,864 $ 172,845 $ 647,128 $ 1,791,050 $ 172,845 $ 2,438,178 $ 2,611,023 $ 10,007 $ 2,601,016 $ 1,207,941 $ — Land Held for Development N/A $ 84,293 $ — $ — $ 84,293 $ — $ 84,293 $ — $ 84,293 $ 484,377 $ — Corporate Overhead N/A 56,584 8,553 76,921 56,584 85,474 142,058 60,334 81,724 77,940 4,500,000 2016 Disposed Communities N/A — — — — — — — — 162,801 — TOTAL 79,228 $ 4,046,389 $ 13,408,190 $ 3,322,047 $ 4,046,389 $ 16,730,237 $ 20,776,626 $ 3,743,632 $ 17,032,994 $ 15,942,309 $ 7,076,758 (1) Some or all of the land for this community is subject to a land lease. (2) This community was under redevelopment for some or all of 2016, with the redevelopment effort primarily focused on the exterior and/or common area, with no expected material impact on community operations. This community is therefore included in the Established Community portfolio and not classified as a Redevelopment Community. (3) The Total Cost, Net of Accumulated Depreciation as of December 31, 2015 includes the land, but excludes the net book value, of fixed assets destroyed by the Edgewater casualty loss. (4) Development Communities excludes AVA North Point, which is being developed within an unconsolidated joint venture. $16,521,643$20,223,213 at December 31, 2013.2013, 20122016, 2015 and 20112014 are as follows: Years ended December 31, 2013 2012 2011 $ 10,071,342 $ 9,288,496 $ 8,661,211 7,157,639 934,936 864,439 (428,660 ) (152,089 ) (237,154 ) $ 16,800,321 $ 10,071,342 $ 9,288,496 For the year ended 12/31/2016 12/31/2015 12/31/2014 Balance, beginning of period $ 19,268,099 $ 17,849,316 $ 16,800,321 Acquisitions, construction costs and improvements 1,788,515 1,667,989 1,311,003 Dispositions, including casualty losses and impairment loss on planned dispositions (279,988 ) (249,206 ) (262,008 ) Balance, end of period $ 20,776,626 $ 19,268,099 $ 17,849,316 2013, 20122016, 2015 and 2011,2014, are as follows: Years ended December 31, 2013 2012 2011 $ 2,056,222 $ 1,863,466 $ 1,705,567 573,715 260,094 250,269 (113,825 ) (67,338 ) (92,370 ) $ 2,516,112 $ 2,056,222 $ 1,863,466 For the year ended 12/31/2016 12/31/2015 12/31/2014 Balance, beginning of period $ 3,325,790 $ 2,913,576 $ 2,516,112 Depreciation, including discontinued operations 531,434 477,923 442,682 Dispositions, including casualty losses (113,592 ) (65,709 ) (45,218 ) Balance, end of period $ 3,743,632 $ 3,325,790 $ 2,913,576