AvalonBay forecasts quarterly FFO below estimates as rental demand slows

U.S.-based real estate investment trust AvalonBay Communities forecast fourth-quarter core funds from operations below Wall Street estimates on Wednesday, as weaker consumer activity weighed on rentals.

High interest rates and tariff uncertainty have delayed home purchases, putting pressure on leasing demand, sending the company's shares down 2.3% after the bell.

AvalonBay's portfolio in Seattle, Northern California, San Francisco and San Jose has softened amid slowing rental demand and an oversupply of units.


The company expects core FFO for the fourth quarter to be in the range of $2.80 to $2.90 per share, the midpoint of which is below the analysts' average estimate of $2.87 per share, according to data compiled by LSEG.

It reported third-quarter core FFO, a key profitability metric for REITs, of $2.75 per share, below analysts' expectations of $2.80 apiece.

Same-store residential revenue rose 2.3% in the third quarter.

On a diluted basis, the company reported a per-share profit of $2.68 for the quarter ended September 30, compared to $2.61 per share a year earlier.