Summary
AvalonBay Communities, Inc. (AVB) announced on February 13, 2004, its intention to explore the formation of an investment fund with institutional investors, primarily pension funds. This potential fund, if established, would serve as a primary vehicle for AvalonBay to acquire and operate apartment communities for a period of three years, subject to certain exceptions. AvalonBay itself would commit approximately 20% of the fund's total capital. The proposed fund is expected to have aggregate capital commitments of around $250 million, with approximately $715 million available for investment, including equity and debt. Notably, AvalonBay's development activities would remain separate from the fund. The company plans to present its historical property acquisition performance to potential investors, suggesting it is consistent with previously disclosed performance metrics.
Key Highlights
- 1AvalonBay is exploring the formation of a new investment fund focused on acquiring and operating apartment communities.
- 2The potential fund would involve collaborations with institutional investors, primarily pension funds.
- 3AvalonBay anticipates committing approximately 20% of the fund's total capital commitments, which are projected to be around $250 million.
- 4The fund, if formed, would have roughly $715 million available for investment, combining equity and debt financing.
- 5AvalonBay's development activities would be excluded from the scope of the proposed fund.
- 6The fund is intended to be the exclusive vehicle for AvalonBay's property acquisitions for an initial three-year period, with certain exceptions.
- 7The company plans to showcase its historical property acquisition track record to prospective investors.