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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&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" 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" as well as the risk factors described in Part I, Item 1A. "Risk Factors" of this report.

Capitalized terms used without definition have the meanings provided elsewhere in this Form 10-K.

Executive Overview

2025 Financial Highlights

Net income attributable to common stockholders for the year ended December 31, 2025 was $1,051,301,000, a decrease of $30,693,000, or 2.8%, from the prior year. The decrease was primarily attributable to an increase in depreciation expense from newly acquired or developed communities, a decrease in gains from real estate sales and increased interest expense, net over the prior year due to decreased interest income resulting from lower cash amounts invested at lower rates, increased commercial paper outstanding and increased effective interest expense for our unsecured indebtedness. These decreases were partially offset by increases in NOI from communities over the prior year.

Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential ("Residential") revenue, for the year ended December 31, 2025 was $1,860,407,000, an increase of $34,598,000, or 1.9%, over the prior year. The increase was due to an increase in Residential revenue of $66,107,000, or 2.5%, partially offset by an increase in Residential property operating expenses of $31,509,000, or 3.8%, over 2024.

During 2025, excluding the equity capital raised through forward sales of our common shares not yet settled, we raised approximately $2,253,402,000 of gross capital through the sale of wholly-owned real estate, the issuance of unsecured notes, the settlement of outstanding equity forward contracts entered into in 2024 and borrowings under a variable rate term loan (the "Term Loan"). We believe that our current capital structure will continue to provide financial flexibility to access capital on attractive terms.

We believe our portfolio management activity through dispositions, development and acquisitions will continue to create long-term value. During 2025, we:

•sold nine wholly-owned communities containing an aggregate of 2,102 apartment homes and 38,000 square feet of commercial space for $811,680,000;

•completed the construction of four wholly-owned communities containing an aggregate of 1,320 apartment homes and 32,000 square feet of commercial space for an aggregate total capitalized cost of $561,000,000;

•started the construction of eleven wholly-owned communities and expanded the development of two existing communities. These communities, including the expansions, are expected to contain an aggregate of 3,888 apartment homes when completed for an estimated total capitalized cost of $1,636,000,000;

•acquired 12 wholly-owned communities containing an aggregate of 3,378 apartment homes for an aggregate purchase price of $826,029,000; and

•acquired our joint venture partner's 50% interest in Avalon Alderwood Place, a 328 apartment home community in Lynnwood, WA, for a purchase price of $71,250,000. With the buyout of the joint venture partner's interest, Avalon Alderwood Place is now a wholly owned apartment community and consolidated for financial reporting purposes.

During 2025, we i) issued $800,000,000 principal amount of fixed rate unsecured notes, ii) repaid $825,000,000 principal amount of fixed rate unsecured notes, iii) entered into a $550,000,000 variable rate Term Loan, and iv) increased the borrowing capacity under our Credit Facility and Commercial Paper Program to $2,500,000,000 and $1,000,000,000, respectively.

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We believe that our balance sheet strength, as measured by our current level of indebtedness, our current ability to service interest and other fixed charges, and our current moderate use of financial encumbrances (such as secured financing), provide us with adequate access to liquidity from the capital markets. We expect to be able to meet our reasonably foreseeable liquidity needs, as they arise, through a combination of one or more of the following sources: existing cash on hand; operating cash flows; the settlement of the outstanding equity forwards; borrowings under our Credit Facility and Commercial Paper Program; the issuance of corporate securities (which could include unsecured debt, preferred equity and/or additional common equity after considering the outstanding equity forwards); the sale of apartment communities; secured debt; or through the formation of joint ventures. See the discussion under "Liquidity and Capital Resources."

Communities Overview

As of December 31, 2025, we owned or held a direct or indirect ownership interest in 320 communities containing 98,694 apartment homes in 11 states and the District of Columbia, of which 24 communities were under construction. We had an indirect interest in eight of the 320 communities which were owned by entities that were not consolidated for financial reporting purposes. In addition, we held a direct or indirect ownership interest in Development Rights for an additional 32 apartment communities that, if developed as expected, will contain an estimated 9,032 apartment homes.

Our real estate investments consist primarily of Current Communities, Development communities, Unconsolidated Development communities and Development Rights. Our Current Communities are further classified as Same Store communities, Other Stabilized communities, Redevelopment communities and Unconsolidated communities.

Same Store communities are consolidated communities that were owned and had stabilized occupancy as of the beginning of the prior year, allowing for a meaningful comparison of operating results between years. Other Stabilized communities are generally all other completed consolidated communities that have stabilized occupancy at the beginning of the current year or were acquired during the current or prior year. Redevelopment communities are consolidated communities where substantial redevelopment is in progress or is probable to begin during the current year. Unconsolidated communities are communities in which we have an indirect ownership interest in an unconsolidated joint venture. A more detailed description of our reportable segments and other related operating information can be found in Note 8, "Segment Reporting," of our Consolidated Financial Statements.

Although each of these categories is important to our business, we generally evaluate overall operating, industry and market trends based on the operating results of Same Store communities, for which a detailed discussion can be found in "Results of 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 under “Liquidity and Capital Resources.”

NOI of our current operating communities is one of the financial measures that we use to evaluate the performance of our communities. NOI is affected by the demand and supply dynamics within our markets, our rental rates and occupancy levels and our ability to control operating costs. Our overall financial performance is also impacted by the general availability and cost of capital and the performance of newly developed, redeveloped and acquired apartment communities.

Results of Operations

Our results of operations are driven by our operating platform and are also affected by national and local market conditions and are reflected in changes in Same Store NOI; NOI derived from acquisitions, development completions and development under construction and in lease-up; loss of NOI related to disposed communities; and capital market and financing activity. See also Part I, Item 1A, "Risk Factors." Discussion of our operating results for 2024 and comparison to 2023 can be found in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K filed with the SEC on February 27, 2025. A comparison of our operating results for 2025 and 2024 follows (dollars in thousands).

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For the year ended December 31,

Revenue:

Management, development and other fees 7,042 7,081

Expenses:

Direct property operating expenses, excluding property taxes (623,580) (576,115)

Property management and other indirect operating expenses (154,591) (169,731)

General and administrative expense (86,679) (77,697)

Casualty and impairment loss (1,276) (2,935)

Income from unconsolidated investments 39,691 32,231

Structured Investment Program interest income 27,476 18,451

Other real estate activity 4,131 753

Income tax benefit (expense) $ 1,135 (445)

Net income attributable to noncontrolling interests (5,298) (181)

Net income attributable to common stockholders decreased $30,693,000, or 2.8%, to $1,051,301,000 in 2025 from 2024, primarily due to (i) an increase in depreciation expense from newly acquired or developed communities, (ii) a decrease in gains from real estate sales and (iii) increased interest expense, net over the prior year due to decreased interest income resulting from lower cash amounts invested at lower rates, increased commercial paper outstanding and increased effective interest expense for our unsecured indebtedness.

NOI. We define NOI as total property revenue less direct property operating expenses (including property taxes), and excluding:

•corporate-level income (such as management, development and other fees);

•property management and other indirect operating expenses, net of corporate income;

•expensed transaction, development and other pursuit costs, net of recoveries;

•interest expense, net;

•loss on extinguishment of debt, net;

•general and administrative expense;

•income from unconsolidated investments;

•SIP interest income;

•depreciation expense;

•income tax expense (benefit);

•casualty and impairment loss;

•gain on sale of communities, net;

•other real estate activity; and

•net operating income from real estate assets sold or held for sale.

Management considers NOI 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 property management overhead or financing-related costs. NOI reflects the operating performance of a

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community and allows for an easier 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 impact 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.

NOI does not represent cash generated from operating activities in accordance with 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. Residential NOI represents results attributable to our apartment rental operations, including parking and other ancillary residential revenue. Reconciliations of NOI and Residential NOI for the years ended December 31, 2025 and 2024 to net income for each year are as follows (dollars in thousands):

For the year ended December 31,

Income from unconsolidated investments (39,691) (32,231)

Structured Investment Program interest income (27,476) (18,451)

Income tax (benefit) expense (1,135) 445

Other real estate activity (4,131) (753)

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(1)Represents results attributable to the retail and other non-residential operations at our communities ("Commercial").

The Residential NOI changes for 2025 as compared to 2024 consist of changes in the following categories (dollars in thousands):

For the year ended

Development / Redevelopment 19,675

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(1)Other Stabilized is generally composed of two types of consolidated communities: (i) completed development communities that had stabilized occupancy as of January 1, 2025, and (ii) operating communities which were acquired during the years ended December 31, 2025 or 2024. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% physical occupancy or (ii) the one year anniversary of completion of development or redevelopment.

The 1.9% increase in our Same Store Residential NOI in 2025 is due to an increase in Residential revenue of $66,107,000, or 2.5%, partially offset by an increase in Residential property operating expenses of $31,509,000, or 3.8%, over 2024.

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Inflation can adversely impact our current and expected operating results by increasing (i) our corporate and community level operating costs, (ii) our cost of capital for new or variable rate borrowing activity as well as (iii) the costs for construction, development and other capitalized projects. This risk may be partially or fully mitigated by increases in rents for residential leases, which are generally for a term of one year or less.

Rental and other income increased $127,007,000, or 4.4%, in 2025 compared to the prior year primarily due to an increase in rental revenue from our stabilized operating communities, discussed below.

Consolidated Communities — The weighted average number of occupied apartment homes for consolidated communities increased to 81,487 apartment homes for 2025, compared to 79,242 apartment homes for 2024. The weighted average monthly residential revenue per occupied apartment home increased to $3,082 in 2025, compared to $3,032 in 2024.

Same Store Communities — The following table presents the change in Same Store Residential revenue, including the attribution of the change between average revenue per occupied home and Economic Occupancy (as defined below) for the year ended December 31, 2025 (dollars in thousands).

For the year ended December 31,

$ Change % Change % Change % Change

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(1)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 contract rates and vacant homes at market rents. Vacancy loss is determined by valuing vacant units at current market rents. Economic Occupancy considers that apartment homes of different sizes and locations within a community have different economic impacts on a community's gross revenue.

The following table details the increase in Same Store Residential revenue by component for the year ended December 31, 2025, compared to the prior year:

For the year ended

Residential revenue

Lease rates 1.9 %

Concessions and other discounts (0.2) %

Economic Occupancy 0.1 %

Other rental revenue 0.6 %

Uncollectible lease revenue 0.1 %

Total Residential revenue 2.5 %

We use concessions periodically as a means to increase leasing velocity, providing our new and existing residents an upfront incentive to enter into a new lease, or extend an existing lease. During 2025, concessions granted for our Same Store communities increased over the prior year by $6,976,000 to $24,198,000. We amortize concessions on a straight-line basis over the life of the respective leases (generally one year), reducing the income recognized over the lease term. For the year ended December 31, 2025, amortized concessions increased by $4,246,000, partially offsetting the increase in revenue as compared to

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the prior year. The remaining net unamortized balance of Same Store residential concessions as of December 31, 2025 and 2024 was $13,025,000 and $9,436,000, respectively.

Direct property operating expenses, excluding property taxes, increased $47,465,000, or 8.2%, in 2025 compared to the prior year, primarily due to the addition of newly developed and acquired apartment communities as well as increased Residential operating expenses at our Same Store communities as discussed below.

Same Store Residential direct property operating expenses, excluding property taxes, increased $28,539,000, or 5.5%, in 2025 compared to the prior year, primarily due to increased (i) repairs and maintenance costs, (ii) utility costs, including from our bulk internet offering, the costs for which are more than offset by the associated bulk internet revenue included as a component of rental and other income and (iii) payroll costs primarily from increased employee benefit costs, growth in average salaries and bonus achievement, partially offset by a reduction in on-site associates.

Property taxes increased $15,132,000, or 4.6%, in 2025 compared to the prior year, primarily due to the addition of newly developed and acquired apartment communities and increases for our Same Store Residential portfolio, partially offset by decreased property taxes from dispositions.

Same Store Residential property taxes increased $2,970,000, or 1.0%, in 2025 compared to the prior year, primarily due to increased assessments across most of the portfolio and the expiration of property tax incentive programs, partially offset by successful tax appeals at certain of our properties in the current year in excess of the prior year.

Property management and other indirect operating expenses, net of corporate income decreased $15,140,000, or 8.9%, in 2025, primarily due to decreased advocacy costs, partially offset by increases in costs related to our shared service center.

Expensed transaction, development and other pursuit costs, net of recoveries includes costs incurred for write downs and abandonment of Development Rights and development pursuits not yet considered probable for development, as well as costs related to abandoned acquisition and disposition pursuits, offset by any recoveries of costs incurred. In periods of increased acquisition and pursuit activity, periods of economic downturn or when there is limited access to capital, these costs may vary significantly from year to year. In addition, the timing for recoveries will not always align with the timing for expensing an abandoned pursuit. Expensed transaction, development and other pursuit costs, net of recoveries, was $10,846,000 and $18,341,000 for the years ended December 31, 2025 and 2024, respectively. The amounts for 2025 and 2024 include a write-off of $3,668,000 and $8,947,000, respectively, for one development opportunity in each year that we determined is no longer probable.

Interest expense, net increased $32,592,000, or 14.4%, in 2025 compared to the prior year. This category includes interest costs offset by capitalized interest pertaining to development and redevelopment activity, amortization of premium/discount on debt, interest income and any mark-to-market impact from derivatives not in qualifying hedge relationships. The increase in 2025 is primarily due to decreases in interest income compared to the prior year due to lower cash amounts invested and lower rates, increased commercial paper outstanding and increased effective interest expense for our unsecured indebtedness. The increase in 2025 is partially offset by increased capitalized interest compared to the prior year.

Depreciation expense increased $66,523,000, or 7.9%, in 2025 compared to the prior year, primarily due to the addition of newly developed and acquired apartment communities, partially offset by dispositions.

General and administrative expense increased $8,982,000, or 11.6%, in 2025 as compared to the prior year, primarily due to an increase in legal costs and settlements and higher compensation expense.

Casualty and impairment loss for the year ended December 31, 2025 of $1,276,000 represents property and casualty damage to certain of our communities and was primarily driven by damage from a water pipe break at a community in Massachusetts.

Income from unconsolidated investments increased $7,460,000 in 2025 compared to the prior year, primarily due to an increase in unrealized gains on our property technology and sustainability fund investments.

Structured Investment Program interest income increased $9,025,000 in 2025, compared to the prior year, primarily due to the increased principal amount funded in our SIP investments.

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Gain on sale of communities, net decreased $27,587,000 in 2025 compared to the prior year. The amount of gain realized in a particular period depends on many factors, including the number of communities sold, expected operating performance of the communities and the market conditions in the local area. The gains of $335,713,000 and $363,300,000 in 2025 and 2024, respectively, were primarily due to the sale of nine and eight wholly-owned communities in 2025 and 2024, respectively.

Income tax benefit of $1,135,000 for 2025 was primarily due to the sale of solar tax credits.

Non-GAAP Financial Measures — Reconciliation of FFO and Core FFO

FFO and FFO adjusted for non-core items, or "Core FFO," as defined below, are generally considered by management to be appropriate supplemental measures of our operating and financial performance.

Consistent with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts® ("Nareit"), we calculate Funds from Operations Attributable to Common Stockholders ("FFO") as net income or loss attributable to common stockholders computed in accordance with GAAP, adjusted for:

•gains or losses on sales of previously depreciated operating communities;

•cumulative effect of a change in accounting principle;

•impairment write-downs of depreciable real estate assets;

•write-downs of investments in affiliates due to a decrease in the value of depreciable real estate assets held by those affiliates;

•depreciation of real estate assets; and

•similar adjustments for unconsolidated partnerships and joint ventures, including those from a change in control.

FFO can help with the comparison of the operating and financial performance of a real estate company between periods or as compared to different companies because the adjustments such as (i) gains or losses on sales of previously depreciated property or (ii) real estate depreciation may impact comparability as the amount and timing of these or similar items can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates. By further adjusting for items that we do not consider part of our core business operations, Core FFO can help with the comparison of our core operating performance year over year. We believe that, in order to understand our operating results, FFO and Core FFO should be considered in conjunction with net income as presented in the Consolidated Statements of Comprehensive Income included elsewhere in this report.

We calculate Core FFO as FFO, adjusted for:

•joint venture gains (if not adjusted through FFO), non-core costs and promoted interests from partnerships;

•casualty and impairment losses or gains, net on non-depreciable real estate or other investments;

•gains or losses from early extinguishment of consolidated borrowings;

•expensed transaction, development and other pursuit costs, net of recoveries;

•legal recoveries, settlement proceeds, and certain legal costs;

•property and casualty insurance proceeds;

•gains or losses on sales of assets not subject to depreciation and other investment gains or losses;

•advocacy contributions, representing payments to promote our business interests;

•hedge ineffectiveness or gains or losses from derivatives not designated as hedges for accounting purposes;

•changes to expected credit losses associated with the lending commitments under the SIP;

•severance related costs;

•executive transition compensation costs;

•net for-sale condominium activity, including gains, marketing, operating and administrative costs and imputed carry cost; and

•income taxes.

FFO and Core FFO do not represent (i) net income in accordance with GAAP, and therefore should not be considered an alternative to net income, which remains the primary measure, as an indication of our performance, or (ii) 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. In addition, FFO and Core FFO are not necessarily indicative of cash available to fund cash needs and may not be comparable to FFO and Core FFO as calculated by other REITs.

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The following is a reconciliation of net income attributable to common stockholders to FFO attributable to common stockholders and to Core FFO attributable to common stockholders for the years ended December 31, 2025 and 2024 (dollars in thousands, except per share amounts).

For the year ended December 31,

Income attributable to noncontrolling interests 5,298 —

Gain on sale of previously depreciated real estate, net (335,713) (363,300)

Casualty loss and impairment on real estate 1,276 2,935

Adjusting items:

Structured Investment Program loan reserve (2) (304) (1,057)

Hedge accounting activity 24 61

Executive transition compensation costs — 304

Other real estate activity (4) (4,086) (669)

Income tax (benefit) expense (1,135) 445

Earnings per common share - diluted $ 7.40 $ 7.60

FFO per common share - diluted $ 11.40 $ 10.98

Core FFO per common share - diluted $ 11.24 $ 11.01

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(1)Amounts consist primarily of net unrealized gains on property technology and sustainability fund investments.

(2)Reflects changes to expected credit losses associated with our lending commitments primarily under the SIP. The timing and amount of actual losses that will be incurred, if any, is to be determined at the maturity of each respective lending agreement.

(3)Amounts for 2025 and 2024 include a write-off of $3,668 and $8,947 for one development opportunity in each year that we determined is no longer probable.

(4)Amount for 2025 consists primarily of the gain on sale of a development right and gains on sale of other non-operating real estate. Amount for 2024 consists primarily of gains on sale of other non-operating real estate, as well as the imputed carry cost of for-sale residential condominiums at The Park Loggia. We compute this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by the weighted average effective interest rate on our unsecured debt.

Liquidity and Capital Resources

We employ 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 available and our desire to maintain a balance sheet that provides us with flexibility. Our principal focus on near-term and intermediate-term liquidity is to ensure we have adequate capital to fund:

•development and redevelopment activity in which we are currently engaged or in which we plan to engage;

•the minimum dividend payments on our common stock required to maintain our REIT qualification under the Code;

•regularly scheduled principal and interest payments and principal payments either at maturity or opportunistically before maturity;

•normal recurring operating and corporate overhead expenses; and

•investment in our operating platform, including strategic investments.

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Factors affecting our liquidity and capital resources include our cash flows from operations, financing activities and investing activities (including dispositions) as well as general economic and market conditions. Cash flows from operations are determined by operating activities and factors including but not limited to (i) the number of apartment homes owned, (ii) rental rates, (iii) occupancy levels, (iv) uncollectible lease revenue levels or interruptions in collections caused by market conditions, (v) operating expenses and (vi) capital expenditures with respect to our communities. The timing and type of capital markets activity in which we engage is affected by changes in the capital markets environment, such as changes in interest rates or the availability of cost-effective capital. Our plans for development, redevelopment, non-routine capital expenditure, acquisition and disposition activity are affected by market conditions and capital availability. We frequently review our liquidity needs, especially in periods with volatile market conditions, as well as the adequacy of cash flows from operations and other expected liquidity sources to meet these needs.

We had cash, cash equivalents and restricted cash of $353,083,000 at December 31, 2025, an increase of $86,007,000 from $267,076,000 at December 31, 2024. The following discussion relates to changes in cash, cash equivalents and restricted cash due to operating, investing and financing activities.

A presentation of GAAP based cash flow metrics is as follows (dollars in thousands):

For the year ended December 31,

Net cash used in financing activities $ (192,731) $ (874,898)

•Net cash provided by operating activities increased primarily due to an increase in NOI from our stabilized operating communities as well as from our Development Communities.

•Net cash used in investing activities was primarily due to (i) the investment of $1,209,454,000 in the development and redevelopment of apartment communities, (ii) acquisition of 12 wholly-owned communities and our joint venture partner's 50% interest in Avalon Alderwood Place for a total of $682,163,000 and (iii) capital expenditures of $264,942,000 for our wholly-owned communities and non-real estate assets. These amounts were partially offset by net proceeds from the disposition of real estate assets of $799,419,000.

•Net cash used in financing activities was primarily due to (i) the payment of cash dividends in the amount of $992,333,000, (ii) repayment of $825,000,000 of our unsecured notes at par upon maturity and (iii) the repurchase of 2,678,719 shares of common stock at an average price of $182.20 per share for a total purchase price including fees of $488,115,000. These amounts were partially offset by proceeds from the issuance of unsecured notes, including amounts borrowed under the Term Loan, in the amount of $1,347,312,000 and proceeds from the issuance of commercial paper in the amount of $739,608,000.

Variable Rate Unsecured Credit Facility

In April 2025, we entered into an amended and restated Credit Facility with a syndicate of banks, which replaced our prior credit facility, dated September 27, 2022. The amended and restated Credit Facility (i) increased the borrowing capacity under the Credit Facility from $2,250,000,000 to $2,500,000,000, and (ii) extended the term of the Credit Facility from September 2026 to April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 4.39% at January 31, 2026 and is composed of (i) the Secured Overnight Financing Rate ("SOFR"), applicable to the period of borrowing for a particular draw of funds from the Credit Facility (e.g., one month to maturity, three months to maturity, etc.), plus (ii) the current borrowing spread to SOFR of 0.705% per annum, assuming a daily SOFR borrowing rate. The borrowing spread to SOFR can vary from SOFR plus 0.65% to SOFR plus 1.40% based upon the rating of our unsecured senior notes. There is also an annual facility commitment fee of 0.12% of the borrowing capacity under the Credit Facility, which can vary from 0.10% to 0.30% based upon the rating of our unsecured senior notes. The Credit Facility contains a sustainability-linked pricing component which provides for interest rate margin and commitment fee reductions or increases related to certain environmental sustainability targets, specifically greenhouse gas emission reductions, with the adjustment determined annually. The most recent annual determination under the sustainability-linked pricing component occurred in July 2025, maintaining reductions of approximately 0.02% to the interest rate margin and 0.005% to the commitment fee due to our achievement of sustainability targets. On August 1, 2025, the Company amended the Credit Facility to extend the applicability of its sustainability-linked pricing component. All other terms of the Credit Facility, including its maturity date of April 2030, remain unchanged.

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The availability on the Credit Facility as of January 31, 2026 is as follows (dollars in thousands):

Credit Facility commitment $ 2,500,000

Credit Facility outstanding —

Commercial paper outstanding (880,000)

Letters of credit outstanding (1) (864)

Total Credit Facility available $ 1,619,136

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(1)In addition, we had $52,284 outstanding in additional letters of credit unrelated to the Credit Facility as of January 31, 2026.

Commercial Paper Program

We have a Commercial Paper Program in which we may issue unsecured commercial paper notes with maturities of less than one year. In April 2025, we increased the maximum amount of commercial paper notes that can be outstanding under the Commercial Paper Program from $500,000,000 to $1,000,000,000. The Commercial Paper Program is backstopped by our commitment to maintain available borrowing capacity under the Credit Facility in an amount equal to actual borrowings under the Commercial Paper Program. As of January 31, 2026, we had $880,000,000 of borrowings outstanding under the Commercial Paper Program.

Secured and Unsecured Borrowings—Financial Covenants and Early Repayment Provisions

We are subject to financial covenants contained in the Credit Facility, the Term Loan and the indentures under which our unsecured notes were issued. The principal financial covenants include the following:

•limitations on the amount of total and secured debt in relation to our overall capital structure;

•limitations on the amount of our unsecured debt relative to the undepreciated basis of real estate assets that are not encumbered by property-specific financing; and

•minimum levels of debt service coverage.

We were in compliance with these covenants at December 31, 2025.

In addition, some of our secured and unsecured borrowings include yield maintenance, defeasance, or prepayment penalty provisions, which could result in us incurring an additional charge in the event of a full or partial prepayment of outstanding principal before the scheduled maturity. These provisions in our borrowings are generally consistent with other similar types of debt instruments issued during the same time period in which our borrowings were issued.

Continuous Equity Offering Program

Under our continuous equity program (the "CEP"), we may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of our common stock from time to time. Actual sales will depend on a variety of factors to be determined, including market conditions, the trading price of our common stock and our determinations of the appropriate funding sources. We expect that, if entered into, we will physically settle each forward sale agreement on one or more dates prior to the maturity date of that particular forward sale agreement, and to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the 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 forward seller, in the form of a reduced initial forward sale price, a commission of up to 1.5% of the sales prices of all borrowed shares of common stock sold. During the year ended December 31, 2025, the Company settled the outstanding forward contracts that were entered into under the CEP during the year ended December 31, 2024, selling 367,113 shares of common stock for proceeds, net of fees, of $81,333,000, based on the gross weighted average price per share of $223.27. During the year ended December 31, 2025 and through January 31, 2026, we did not have any new forward sale agreements under the CEP. As of January 31, 2026, we had $623,997,000 remaining authorized for issuance under this program.

Forward Equity Offering

In addition to the CEP, during the year ended December 31, 2024, we completed an underwritten public offering pursuant to which we entered into forward contracts to sell 3,680,000 shares of common stock at a discount to the closing price of $226.52 per share for approximate net proceeds of $808,606,000 based on the initial forward price (the "September 2024 Equity

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Offering"). The final proceeds will be determined on the date(s) of settlement and are subject to certain customary adjustments for dividends and a daily interest factor. During the year ended December 31, 2025, we amended each of the forward contracts related to the September 2024 Equity Offering to extend the settlement of the forward contracts from a date no later than December 31, 2025 to a date no later than December 31, 2026.

Stock Repurchases

In October 2025, we terminated the 2020 Stock Repurchase Program and adopted a new 2025 Stock Repurchase Program. During the year ended December 31, 2025, we repurchased 2,678,719 shares of common stock at an average price of $182.20 per share, including fees, for a total of $488,115,000 under the 2020 Stock Repurchase Program and the 2025 Stock Repurchase Program. From January 1, 2026 through February 26, 2026, we repurchased 637,958 shares of common stock at an average price of $176.85 per share, including fees, for a total of $112,824,000 of the $163,769,000 of capacity remaining under the 2025 Stock Repurchase Program as of January 1, 2026.

On February 26, 2026, we terminated the 2025 Stock Repurchase Program and adopted the 2026 Stock Repurchase Program. Purchases of common stock under the 2026 Stock Repurchase Program may occur from time to time at our discretion. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The 2026 Stock Repurchase Program does not have an expiration date and may be suspended or terminated at any time without prior notice.

Future Financing and Capital Needs—Debt Maturities and Material Obligations

One of our principal long-term liquidity needs is the repayment of long-term debt at maturity. For both our unsecured and secured debt, a portion of the principal of the debt may be repaid prior to maturity. Early retirement of our unsecured or secured debt could result in gains or losses on extinguishment. We may use capital from a variety of sources to repay debt at maturity, including cash from operations and proceeds received from the dispositions of our operating communities or other direct and indirect investments in real estate. 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 otherwise provide liquidity to satisfy the debt at maturity. This refinancing may be accomplished by uncollateralized private or public debt offerings, equity issuances, including through the settlement of the outstanding equity forwards, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility, Term Loan or Commercial Paper Program. In addition, to the extent we have amounts outstanding under the Commercial Paper Program, we are obligated to repay the short-term indebtedness at maturity through either current cash on hand or by incurring other indebtedness, including by way of borrowing under our Credit Facility or Term Loan. While we believe we will have the capacity to meet our currently anticipated liquidity needs, we cannot assure you that capital from additional debt financing or debt or equity offerings will be available or, if available, that they will be on terms we consider satisfactory.

The following debt and derivative activity occurred during the year ended December 31, 2025:

•As discussed above, in April 2025, we entered into an amended and restated Credit Facility, which replaced our prior credit facility, dated September 27, 2022. The amended and restated Credit Facility (i) increased the borrowing capacity under the Credit Facility from $2,250,000,000 to $2,500,000,000, and (ii) extended the term of the Credit Facility from September 2026 to April 2030.

•In April 2025, we entered into a $450,000,000 Term Loan which matures in April 2029. On August 1, 2025, we amended the Term Loan to (i) exercise our full accordion option to increase the amount of the Term Loan by $100,000,000 to $550,000,000 and (ii) extend the applicability of the sustainability-linked pricing component. During the year ended December 31, 2025, we drew down the full amount of the Term Loan and entered into $550,000,000 notional amount of interest rate swaps to hedge the impact of variability in interest rates on the Term Loan. The swaps are coterminous with the Term Loan, maturing in April 2029. The Term Loan bears interest at varying levels based on (i) the SOFR applicable to the period of borrowing for a particular draw of funds from the facility, which rate is recalculated at the end of each such period if the Term Loan remains outstanding, (ii) a stated spread over SOFR that can vary from SOFR plus 0.70% to SOFR plus 1.60% per annum based upon the rating of our unsecured and unsubordinated long-term indebtedness and (iii) a sustainability spread adjustment that can range from (0.02)% to 0.02%. The current borrowing spread to SOFR under the Term Loan is 0.78% per annum, inclusive of a sustainability spread adjustment of (0.02)%. Including the impact of these swaps and transaction costs, assuming the Term Loan will be fully drawn until maturity and our current borrowing spread to SOFR, the effective interest rate on borrowings under the Term Loan is fixed at 4.44%.

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•As discussed above, in April 2025, the Company increased the capacity of the Commercial Paper Program from $500,000,000 to $1,000,000,000.

•In June 2025, we repaid $525,000,000 of our 3.45% coupon unsecured notes at par upon maturity.

•In July 2025, we issued $400,000,000 principal amount of unsecured notes in a public offering under our existing shelf registration statement for proceeds net of underwriting fees and discounts of approximately $394,888,000, before considering the impact of other offering costs. The notes mature in August 2035 and were issued at a 5.00% coupon. The effective interest rate of the notes is 5.05%, considering the net proceeds and including the impact of other offering costs and hedging activity. In connection with the issuance of our $400,000,000 unsecured notes, we terminated $200,000,000 of interest rate swap agreements designated as cash flow hedges of the interest rate variability on the issuance of the unsecured notes, receiving payments of $4,099,000 in July 2025 which will be recognized over the life of the unsecured notes as a reduction in the effective interest rate. Of the $200,000,000 forward interest rate swap agreements terminated, $100,000,000 were entered into during the year ended December 31, 2025.

•In November 2025, we repaid $300,000,000 of our 3.50% coupon unsecured notes at par upon maturity.

•In December 2025, we issued $400,000,000 principal amount of unsecured notes in a public offering under our existing shelf registration statement for proceeds net of underwriting fees and discounts of approximately $397,424,000, before considering the impact of other offering costs. The notes mature in December 2030 and were issued at a 4.35% coupon. The effective interest rate on the notes is 4.52%, considering the net proceeds and including the impact of offering costs and hedging activity. In connection with the issuance of our $400,000,000 unsecured notes, we entered into and terminated $100,000,000 of interest rate swap agreements designated as cash flow hedges of the interest rate variability on the issuance of the unsecured notes, receiving payments of $242,000 in December 2025 which will be recognized over the life of the unsecured notes as a reduction in the effective interest rate.

The following table details our consolidated debt obligations, including the effective interest rate and contractual maturity dates, and principal payments for periodic amortization and maturities for the next five years, excluding our Credit Facility and Commercial Paper Program and amounts outstanding related to communities classified as held for sale, at December 31, 2025 and 2024 (dollars in thousands). 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 an equity or other interest other than as disclosed related to the AVA Arts District loan (see "Unconsolidated Operating Communities" for further discussion of the AVA Arts District loan).

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Tax-exempt bonds

Variable rate

Conventional loans

Fixed rate

_________________________________

(1)Rates are as of December 31, 2025 and include 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 debt of $45,620 and $41,216 as of December 31, 2025 and 2024, respectively, and deferred financing costs and debt discount for the secured notes of $13,588 and $15,964 as of December 31, 2025 and 2024, respectively, as reflected on our Consolidated Balance Sheets included elsewhere in this report.

(3)Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement.

(4)During 2025, we repaid this borrowing at par on its scheduled maturity date.

(5)The variable rate Term Loan has been swapped to an effective fixed rate using interest rate swaps.

In addition to consolidated debt, we have scheduled contractual obligations associated with (i) ground leases for land underlying current operating or development communities and commercial and parking facilities and (ii) office leases for our corporate headquarters and regional offices of $16,744,000 for 2026, $16,827,000 for 2027 and $470,689,000 thereafter.

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Future Financing and Capital Needs—Portfolio and Capital Markets Activity

We invest in various real estate and real estate related investments, which include (i) the acquisition, development and redevelopment of communities both wholly-owned and through the formation of joint ventures, (ii) other indirect investments in real estate through the SIP, all as discussed further below and (iii) investments in other real estate-related ventures through direct and indirect investments in third-party property technology and sustainability focused companies and investment management funds.

In 2026, we expect to continue to meet our liquidity needs from one or more of a variety of internal and external sources, which may include (i) settlement of our outstanding equity forward contracts, (ii) real estate dispositions, (iii) cash balances on hand as well as cash generated from our operating activities, (iv) borrowing capacity under the Credit Facility, (v) borrowings under the Commercial Paper Program and (vi) secured and unsecured debt financings. Additional sources of liquidity in 2026 may include the issuance of common and preferred equity, including the issuance of additional shares of our common stock under the CEP. 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.

Before beginning new construction or reconstruction activity, including activity related to communities owned by unconsolidated joint ventures, we plan to source sufficient capital to complete these undertakings, although we cannot assure you that we will be able to obtain such financing on acceptable terms or at all. In the event that financing cannot be obtained, we may 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.

From time to time, we use joint ventures to hold or develop individual real estate assets. We generally employ joint ventures to mitigate asset concentration or market risk and as a source of liquidity. We may also use joint ventures related to mixed-use land development opportunities and new markets where our partners bring development and operational expertise and/or experience to the venture. Each joint venture or partnership agreement has been individually negotiated, and our ability to operate and/or dispose of a community in our sole discretion may be limited to varying degrees depending on the terms of the joint venture or partnership agreement. We cannot assure you that we will achieve our objectives through joint ventures.

In addition, we may invest, through mezzanine loans or preferred equity investments, in multifamily development projects being undertaken by third parties. In these cases, we do not expect to acquire the underlying real estate but rather to earn a return on our investment (through interest or fixed rate preferred equity returns) and a return of the invested capital generally following completion of construction either on or before a set due date.

In evaluating our allocation of capital within our markets, we sell assets that do not meet our long-term investment criteria or when capital and real estate markets allow us to realize a portion of the value created over our ownership periods and redeploy the proceeds from those sales to develop, redevelop and acquire communities. Because the proceeds from the sale of communities may not be immediately redeployed into revenue generating assets that we develop, redevelop or acquire, the immediate effect of a sale of a community for a gain is to increase net income, but reduce future total revenues, total expenses and NOI until such time as the proceeds have been redeployed into revenue generating assets. While we believe that the temporary absence of future cash flows from communities sold will not materially impair our liquidity, the timing and success of reinvestment of sale proceeds may vary and is subject to market conditions.

Investments

We invest in consolidated real estate entities, unconsolidated investments in real estate ventures and direct and indirect investments in third-party property technology and sustainability focused companies through investment management funds.

Consolidated Investments

During the year ended December 31, 2025, we acquired the following wholly-owned communities (dollars in thousands). See Note 5, "Investments," of the Consolidated Financial Statements included elsewhere in this report for further discussion.

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Community name Location Apartment Homes Purchase price

Avalon Wolf Ranch Georgetown, TX 303 51,000

Avalon Castle Hills (1) Lewisville, TX 276 65,491

Avalon at Palisades Charlotte, NC 274 72,300

Avalon Coconut Creek Coconut Creek, FL 270 99,000

eaves Redmond Campus II Redmond, WA 40 15,650

Avalon Townhome Collection Brier Creek Durham, NC 93 36,500

(1) Included in the transaction to acquire six apartment communities in the Dallas-Fort Worth metropolitan area during the year ended December 31, 2025.

During the year ended December 31, 2025, we acquired the six apartment communities in the Dallas-Fort Worth metropolitan area included in the list above, containing 1,844 apartment homes for $415,579,000. The consideration was comprised of a cash payment of $193,000,000 and the issuance of 1,059,995 DownREIT Units.

During the year ended December 31, 2025, we acquired our joint venture partner's 50% interest in Avalon Alderwood Place, a 328 apartment home community in Lynnwood, WA for a purchase price of $71,250,000. With the buyout of the joint venture partner's interest, Avalon Alderwood Place is now a wholly owned apartment community and consolidated for financial reporting purposes.

During the year ended December 31, 2025, we sold the following wholly-owned communities (dollars in thousands). See Note 6, "Real Estate Disposition Activities," of the Consolidated Financial Statements included elsewhere in this report for further discussion.

In January 2026, we sold Avalon Sunset Towers, located in San Francisco, CA, containing 243 apartment homes for $105,000,000.

Unconsolidated Operating Communities

During the year ended December 31, 2025, we had the following investments in and activity for our unconsolidated real estate and third-party property technology and sustainability fund investments. See Note 5, "Investments," of the Consolidated Financial Statements included elsewhere in this report for further discussion.

•Arts District Joint Venture was formed to develop, own, and operate AVA Arts District, an apartment community located in Los Angeles, CA, which completed construction in 2024 and contains 475 apartment homes and 57,000

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square feet of commercial space. We have a 25% ownership interest in the venture. As of December 31, 2025, we have an equity investment of $32,224,000 in the venture. In June 2025, the Arts District joint venture secured a variable rate loan of up to $173,000,000. The outstanding borrowing is subject to an interest rate cap, which will limit the interest rate to 8.2%, based on the current borrowing spread. The loan matures in July 2028 and has two one-year extension options, subject to certain conditions. The joint venture used the proceeds to repay its outstanding $158,735,000 variable rate construction loan which was scheduled to mature in August 2025. We provided the lender a partial payment guarantee for 25% of the loan's maximum borrowing capacity, on behalf of the venture. Any amounts payable under the 25% loan guarantee by us are obligations of the joint venture partners in proportion to their ownership interest, and in the event we are obligated to perform under our loan guarantee, the joint venture partner is obligated to reimburse us for 75% of amounts paid. As of December 31, 2025, the loan had an outstanding principal balance of $162,104,000.

•MVP I, LLC joint venture was formed with an unrelated third party to develop Avalon at Mission Bay II, a community located in San Francisco, CA, which completed construction during 2006 and contains 313 apartment homes. The Company has a 25% equity interest in the venture. During the year ended December 31, 2025, MVP I, LLC repaid its $103,000,000 outstanding fixed rate mortgage loan at par upon maturity. The equity investors contributed capital in proportion to their ownership interests to repay the outstanding loan.

•We invested $13,458,000 in various third-party property technology and sustainability focused companies directly and indirectly through investment management funds during the year ended December 31, 2025. As of December 31, 2025, we have invested $72,428,000 and have $46,287,000 of remaining equity commitments to contribute to these investment management funds, with the timing and amount for these commitments to be fulfilled dependent on if, and when, investment opportunities are identified by the respective funds. During the year ended December 31, 2025, we recognized realized and unrealized gains of $39,247,000 related to these investments, included as a component of income from unconsolidated investments on the Consolidated Statements of Comprehensive Income.

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Supplemental U.S. Federal Income Tax Considerations

The following discussion supplements and updates the disclosures under the heading “Certain U.S. Federal Income Tax Considerations and Consequences of Your Investment” in the prospectus dated February 23, 2024, contained in our Registration Statement on Form S-3 (File No. 333-277313) filed with the SEC on February 23, 2024 (the “Existing Tax Disclosure”). Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in the Existing Tax Disclosure.

On July 4, 2025, H.R. 1, informally known as the One Big Beautiful Bill Act (the “OBBB”), was enacted. The OBBB makes major changes to the Code, including some provisions of the Code that affect the taxation of REITs and their investors. In particular,

•For taxable years beginning on or after January 1, 2026, the OBBB relaxed the REIT asset test requirement with respect to taxable REIT subsidiaries, providing that not more than 25% (relaxed from 20%) of the gross value of a REIT’s assets may be represented by securities of one or more taxable REIT subsidiaries.

•The OBBB permanently extended the pass-through qualified business income deduction, generally allowing individuals to deduct 20% of the aggregate amount of ordinary REIT dividends distributed by a REIT. This deduction was due to expire for tax years beginning after December 31, 2025.

To the extent the information set forth in the Existing Tax Disclosure is inconsistent with this supplemental information, this supplemental information supersedes the information in the Existing Tax Disclosure. This supplemental information is provided on the same basis and subject to the same qualifications as are set forth in the first seven paragraphs of the Existing Tax Disclosure as if those paragraphs were set forth in this Form 10-K.

Structured Investment Program

During the year ended December 31, 2025, we entered into two additional commitments under the SIP, agreeing to provide an investment of up to $48,000,000 in multifamily development projects. As of January 31, 2026, we had nine commitments to fund up to $239,585,000 in the aggregate under the SIP. As of January 31, 2026, our investment commitments had a weighted average rate of return of 11.7% and a weighted average initial maturity date of May 2027. As of January 31, 2026, we had funded $212,147,000 of these commitments. See Note 5, "Investments," of the Consolidated Financial Statements included elsewhere in this report.

You should carefully review Part I, Item 1A. "Risk Factors" of this Form 10-K for a discussion of the risks associated with our investment activity.

Forward-Looking Statements

This Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company's forward-looking statements generally use the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "project," "plan," "may," "shall," "will," "pursue" and other similar expressions that indicate future events and trends and do not report historical matters. These statements, among other things, address the Company's intent, belief or expectations with respect to:

•development, redevelopment, acquisition or disposition of communities;

•the timing and cost of completion of communities under development or redevelopment;

•the timing of lease-up, occupancy and stabilization of communities;

•the pursuit of land for future development;

•the anticipated operating performance of our communities;

•cost, yield, revenue, NOI and earnings estimates;

•the impact of landlord-tenant laws and rent regulations, including rent caps;

•our expansion into new regions;

•our declaration or payment of dividends;

•our joint venture activities;

•our policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters;

•our qualification as a REIT under the Code;

•the real estate markets in regions where we operate and in general;

•the availability of debt and equity financing;

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•interest rates;

•inflation, tariffs and other economic conditions, and their potential impacts;

•trends affecting our financial condition or results of operations;

•regulatory changes that may affect us; and

•the impact of legal proceedings.

We cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect our current expectations of the outcomes of the matters discussed. We do not undertake a duty to update these forward-looking statements, and therefore they may not represent our estimates and assumptions after the date of this report. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors may cause our actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by these forward-looking statements. You should carefully review the discussion under Part I, Item 1A. "Risk Factors" in this Form 10-K for further discussion of risks associated with forward-looking statements.

Some of the factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following:

•we may fail to secure development opportunities due to an inability to reach agreements with third parties to obtain land at attractive prices or to obtain desired zoning and other local approvals;

•we may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses;

•construction costs of a community may exceed original estimates;

•we may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in expected rental revenues;

•occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond our control;

•our cash flows from operations and access to cost-effective capital may be insufficient for the development of our pipeline, which could limit our pursuit of opportunities;

•an outbreak of disease or other public health event may affect the multifamily industry and general economy;

•our cash flows may be insufficient to meet required payments of principal and interest, and we may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness;

•we may be unsuccessful in our management of joint ventures and the REIT vehicles that are used with certain joint ventures;

•we may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change;

•new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge non-rent fees or evict tenants, may impact our revenue or increase our costs;

•our expectations, estimates and assumptions as of the date of this filing regarding legal proceedings may change;

•we may choose to pay dividends in our stock instead of cash, which may result in stockholders having to pay taxes with respect to such dividends in excess of the cash received, if any; and

•investments made under the SIP may not be repaid as expected or the development may not be completed on schedule, which could require us to engage in litigation, foreclosure actions, and/or first party project completion to recover our investment, which may not be recovered in full or at all in such event.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or a different presentation of our financial statements. Below is a discussion of the accounting policies that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain. A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 1, "Organization, Basis of Presentation and Significant Accounting Policies," of our Consolidated Financial Statements.

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Cost Capitalization

We capitalize costs during the development of assets. Capitalization begins when we determine that development of a future asset is probable and continues until the asset, or a portion of the asset, is delivered and is ready for its intended use. For redevelopment efforts, we capitalize costs either (i) in advance of taking apartment homes out of service when significant renovation of the common area has begun and continue until the redevelopment is completed, or (ii) when an apartment home is taken out of service for redevelopment and continue until the redevelopment is completed and the apartment home is available for a new resident. Rental income and operating expenses incurred during the initial lease-up or post-redevelopment lease-up period are fully recognized in earnings as they accrue.

During the development and redevelopment efforts we capitalize all direct costs and indirect costs which have been incurred as a result of the development and redevelopment activities. These costs include interest and related loan fees, property taxes as well as other direct and indirect costs. Interest is capitalized for any project-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 $50,809,000 and $50,343,000 for 2025 and 2024, 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.

There may be a change in our operating expenses in the event that there are changes in accounting guidance governing capitalization or changes to our levels of development or redevelopment activity. If changes in the accounting guidance limit our ability to capitalize costs or if we reduce our development and redevelopment activities without a corresponding decrease in indirect project costs, there may be an increase in our operating expenses.

We capitalize pre-development costs incurred in pursuit of Development Rights. These costs include legal fees, design fees and related overhead costs. Future development of these pursuits is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and availability of capital. 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 no longer probable, any capitalized pre-development costs are written off with a charge to expense.

Due to the subjectivity in determining whether a pursuit will result in the development of an apartment community, and therefore should be capitalized, the accounting for pursuit costs is a critical accounting estimate. As of December 31, 2025, capitalized pursuit costs associated with Development Rights totaled $73,237,000.

Abandoned Pursuit Costs & Asset Impairment

We evaluate our direct and indirect investments in real estate and other long-lived assets for impairment when potential indicators of impairment exist. 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 the carrying amount exceeds the estimated fair value of the property. We assess land held for development for impairment if our intent changes with respect to the development of the land. We evaluate our unconsolidated investments for impairment, considering both the carrying value of the investment, estimated 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.

The assessment of impairment can involve subjectivity in determining if indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. Estimates of the undiscounted cash flows are sensitive to significant assumptions including future rental revenues, operating expenses, and our intent and ability to hold the related asset, which could be impacted by our expectations about the future economic, market or capital conditions.

We expense costs related to abandoned pursuits, which include the abandonment of Development Rights and costs related to development pursuits not yet considered probable for development, as well as costs incurred in pursuing the acquisition or disposition of assets for which such acquisition and disposition activity did not occur, of which we expensed $10,846,000, $18,341,000 and $33,479,000 of these costs during the years ended December 31, 2025, 2024 and 2023, respectively. These

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costs are included in expensed transaction, development and other pursuit costs, net of recoveries on the accompanying Consolidated Statements of Comprehensive Income. These costs can vary greatly, and the costs incurred in any given period may be significantly different in future years.

Our focus on value creation through real estate development presents an impairment risk in the event of a future deterioration of the real estate and/or capital markets or a decision by us to reduce or cease development. We cannot predict the occurrence of future events that may cause an impairment assessment to be performed, or the likelihood of any future impairment charges, if any. You should also review Item 1A. "Risk Factors" in this Form 10-K.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks from our financial instruments primarily from changes in market interest rates. Our financial instruments do not expose us to significant risk from foreign currency exchange rates or commodity or equity prices. We monitor interest rate risk as an integral part of our overall risk management, which recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effect on our results of operations. Our operating results are affected by changes in interest rates, primarily in short-term SOFR and the SIFMA index as a result of borrowings under our Credit Facility and Commercial Paper Program, outstanding bonds and unsecured debt with variable interest rates. In addition, the fair value of our fixed rate unsecured and secured debt is impacted by changes in market interest rates.

We currently use interest rate protection agreements in the form of interest rate cap agreements for our risk management objectives, as well as for compliance with the requirements of certain lenders, and not for trading or speculative purposes. In addition, we may use interest rate swap agreements for our risk management objectives. During the year ended December 31, 2025, in connection with the issuance of our $400,000,000 unsecured notes in July 2025 maturing in August 2035 and our $400,000,000 unsecured notes in December 2025 maturing in December 2030, we terminated $300,000,000 of forward interest rate swap agreements designated as cash flow hedges of the interest rate variability on the issuance of unsecured notes, receiving payments of $4,341,000 which are being recognized over the life of the unsecured notes as a reduction in the effective interest rate.

In addition, we have interest rate caps that serve to effectively limit the amount of interest rate expense we would incur on our outstanding floating rate borrowings. Further discussion of the financial instruments impacted and our exposure is presented below.

As of December 31, 2025 and 2024, we had $390,550,000 and $400,950,000, respectively, in variable rate debt outstanding. The variable rate debt outstanding as of December 31, 2025 excludes the fully hedged $550,000,000 term loan and $740,000,000 outstanding under our Commercial Paper Program. We had no amounts outstanding under our Credit Facility. If interest rates on the variable rate debt and commercial paper had been 100 basis points higher throughout 2025 and 2024, our annual interest incurred would have increased by approximately $7,406,000 and $4,102,000, respectively, based on balances outstanding during the applicable years.

Because the counterparties providing the interest rate cap and swap agreements are major financial institutions which have an A- or better credit rating by the Standard & Poor's Ratings Group or equivalent, we do not believe there is exposure at this time to a default by a counterparty provider.

In addition, changes in interest rates affect the fair value of our fixed rate debt, computed using quoted market prices for our unsecured debt or a discounted cash flow model for our secured notes, considering our current market yields, which impacts the fair value of our aggregate indebtedness. As of December 31, 2025, we had outstanding debt of $9,388,152,000 with an estimated aggregate fair value of $8,995,833,000 at December 31, 2025. Contractual fixed rate debt represented $7,893,011,000 of the fair value at December 31, 2025. If interest rates had been 100 basis points higher as of December 31, 2025, the fair value of this fixed rate debt would have decreased by approximately $396,398,000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this Item 8 is included as a separate section of this Annual Report on Form 10-K. See Item 15.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a)Evaluation of Disclosure Controls and Procedures. As required by Rule 13a-15 under the Exchange Act, 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 SEC'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, 2025 based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 Framework (COSO). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.

Our internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.

(c)There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

During the three months ended December 31, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 pertaining to directors and executive officers of the Company and the Company's Code of Conduct and insider trading policies and procedures is incorporated herein by reference to the Company's Proxy Statement to be filed with the SEC within 120 days after the end of the year covered by this Form 10-K with respect to the Annual Meeting of Stockholders.

The Company has insider trading policies and procedures (the "Insider Trading Policy") that govern the purchase, sale and other dispositions of its securities by directors, officers, and employees, as well as by the Company itself. We believe these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 pertaining to executive compensation is incorporated herein by reference to the Company's Proxy Statement to be filed with the SEC within 120 days after the end of the year covered by this Form 10-K with respect to the Annual Meeting of Stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 pertaining to security ownership of management and certain beneficial owners of the Company's common stock is incorporated herein by reference to the Company's Proxy Statement to be filed with the SEC within 120 days after the end of the year covered by this Form 10-K with respect to the Annual Meeting of Stockholders, except for the information regarding compensation plans under which equity securities are authorized for issuance as set forth below.

The Company maintains the Second Amended and Restated 2009 Equity Incentive Plan (the "Plan") and the 1996 Non-Qualified Employee Stock Purchase Plan (the "ESPP"), pursuant to which common stock or other equity awards may be issued or granted to eligible persons.

The following table gives information about equity awards under the Plan and the ESPP as of December 31, 2025:

(a) (b) (c)

Equity compensation plans not approved by security holders (4) — N/A 529,908

_________________________________

(1) Consists of the Plan.

(2) Includes 98,775 deferred restricted stock units granted under the 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, 2025, 2026 and 2027. Does not include 167,179 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 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.

The ESPP, which was adopted by the Board of Directors on October 29, 1996, has not been approved by our shareholders. A further description of the ESPP appears in Note 9, "Stock-Based Compensation Plans," of the Consolidated Financial Statements set forth in Item 8 of this report.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 pertaining to certain relationships and related transactions is incorporated herein by reference to the Company's Proxy Statement to be filed with the SEC within 120 days after the end of the year covered by this Form 10-K with respect to the Annual Meeting of Stockholders.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 pertaining to the fees paid to and services provided by the Company's principal accountant is incorporated herein by reference to the Company's Proxy Statement to be filed with the SEC within 120 days after the end of the year covered by this Form 10-K with respect to the Annual Meeting of Stockholders. Our independent public accounting firm is Ernst & Young LLP, Tysons, Virginia, PCAOB Auditor ID 42.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

15(a)(1) Financial Statements

Index to Financial Statements

Consolidated Financial Statements and Financial Statement Schedule:

Reports of Independent Registered Public Accounting Firm F-1

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4

Notes to Consolidated Financial Statements F-10

15(a)(2) Financial Statement Schedule

Schedule III—Real Estate and Accumulated Depreciation F-38

15(a)(3) Exhibits

ITEM 16. FORM 10-K SUMMARY

Not Applicable.

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INDEX TO EXHIBITS

Exhibit No. Description

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21.1 — Schedule of Subsidiaries of the Company. (Filed herewith.)

23.1 — Consent of Ernst & Young LLP. (Filed herewith.)

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______________________________________________________________________________

+ 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.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AvalonBay Communities, Inc.

Date: February 27, 2026 By: /s/ BENJAMIN W. SCHALL

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: February 27, 2026 By: /s/ BENJAMIN W. SCHALL

Date: February 27, 2026 By: /s/ KEVIN P. O’SHEA

Kevin P. O’Shea, Chief Financial Officer(Principal Financial Officer)

Date: February 27, 2026 By: /s/ SEAN T. WILLSON

Date: February 27, 2026 By: /s/ GLYN F. AEPPEL

Glyn F. Aeppel, Director

Date: February 27, 2026 By: /s/ CONOR C. FLYNN

Conor C. Flynn, Director

Date: February 27, 2026 By: /s/ TERRY S. BROWN

Terry S. Brown, Director

Date: February 27, 2026 By: /s/ RONALD L. HAVNER, JR.

Ronald L. Havner, Jr., Director

Date: February 27, 2026 By: /s/ STEPHEN P. HILLS

Stephen P. Hills, Director

Date: February 27, 2026 By: /s/ CHRISTOPHER B. HOWARD

Christopher B. Howard, Director

Date: February 27, 2026 By: /s/ RICHARD J. LIEB

Richard J. Lieb, Director

Date: February 27, 2026 By: /s/ NNENNA LYNCH

Nnenna Lynch, Director

Date: February 27, 2026 By: /s/ CHARLES E. MUELLER, JR.

Charles E. Mueller, Jr., Director

Date: February 27, 2026 By: /s/ TIMOTHY J. NAUGHTON

Timothy J. Naughton, Director (Chairman of the Board of Directors)

Date: February 27, 2026 By: /s/ SUSAN SWANEZY

Susan Swanezy, Director

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of AvalonBay Communities, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AvalonBay Communities, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

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Valuation of Deferred Development Costs and Land Held for Development

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Tysons, Virginia

February 27, 2026

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of AvalonBay Communities, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited AvalonBay Communities, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, AvalonBay Communities, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 27, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’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’s Report on Internal Control over Financial Reporting in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’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’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’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Tysons, Virginia

February 27, 2026

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AVALONBAY COMMUNITIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

ASSETS

Real estate:

Real estate assets held for sale, net 150,262 6,950

LIABILITIES AND EQUITY

Variable rate unsecured credit facility and commercial paper, net 739,608 —

Commitments and contingencies

Equity:

Accumulated other comprehensive income 26,486 34,304

Noncontrolling interests 222,977 —

See accompanying notes to Consolidated Financial Statements.

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AVALONBAY COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per share data)

For the year ended December 31,

Revenue:

Expenses:

Loss on extinguishment of debt, net — — 150

Net (income) loss attributable to noncontrolling interests (5,298) (181) 387

Other comprehensive income:

Cash flow hedge (gains) losses reclassified to earnings (3,330) (471) 1,360

Earnings per common share - basic:

Net income attributable to common stockholders $ 7.40 $ 7.61 $ 6.56

Earnings per common share - diluted:

Net income attributable to common stockholders $ 7.40 $ 7.60 $ 6.56

See accompanying notes to Consolidated Financial Statements.

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AVALONBAY COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)

Cash flow hedge losses reclassified to earnings — — — — 1,360 1,360 — 1,360

Noncontrolling interest activity — — — (1,217) — (1,217) — (1,217)

Cash flow hedge gains reclassified to earnings — — — — (471) (471) — (471)

Noncontrolling interest activity — — (77) — — (77) — (77)

Loss on cash flow hedges, net — — — — (4,488) (4,488) — (4,488)

Cash flow hedge gains reclassified to earnings — — — — (3,330) (3,330) — (3,330)

See accompanying notes to Consolidated Financial Statements.

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AVALONBAY COMMUNITIES, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

For the year ended December 31,

Cash flows from operating activities:

Amortization of deferred financing costs and debt discount 13,685 13,280 12,732

Loss on extinguishment of debt, net — — 150

Cash flow hedge (gains) losses reclassified to earnings (1,292) (471) 1,360

(Increase) decrease in prepaid expenses and other assets (3,182) (16,576) 11,580

Cash flows from investing activities:

Capital expenditures - non-real estate assets (3,173) (4,678) (18,962)

Increase (decrease) in payables for construction 6,313 (1,749) 14,901

Cash flows from financing activities:

Repurchase of common stock, net (488,115) — (1,911)

Net borrowings under unsecured credit facility and commercial paper 739,608 — —

Receipt for termination of forward interest rate swaps 4,341 16,839 8,331

See accompanying notes to Consolidated Financial Statements.

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The following table provides a reconciliation of cash, cash equivalents and restricted cash reported with the Consolidated Statements of Cash Flows (dollars in thousands):

Supplemental disclosures of non-cash investing and financing activities:

During the year ended December 31, 2025:

•As described in Note 4, "Equity," the Company issued 183,260 shares of common stock as part of the Company's stock-based compensation plans, of which 103,332 shares related to the conversion of performance awards to shares of common stock, and the remaining 79,928 shares valued at $17,678,000 were issued in connection with new stock grants; 3,761 shares valued at $749,000 were issued through the Company's dividend reinvestment plan; 74,517 shares valued at $16,678,000 were withheld to satisfy employees' tax withholding and other liabilities; and 3,116 restricted shares with an aggregate value of $614,000 were forfeited.

•The Company acquired six apartment communities, in the Dallas-Fort Worth metropolitan area, containing 1,844 apartment homes for $415,579,000, with the consideration comprised of a cash payment of $193,000,000 and the issuance of 1,059,995 units representing limited partnership interests (the “DownREIT Units”).

•Common stock and DownREIT Unit dividends declared but not paid totaled $247,436,000.

•The Company recorded (i) a decrease to prepaid expenses and other assets of $4,488,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $3,330,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

During the year ended December 31, 2024:

•The Company issued 250,806 shares of common stock as part of the Company's stock-based compensation plans, of which 146,725 shares related to the conversion of performance awards to shares of common stock, and the remaining 104,081 shares valued at $18,020,000 were issued in connection with new stock grants; 12,290 shares valued at $1,972,000 were issued in conjunction with the conversion of deferred stock awards; 3,533 shares valued at $690,000 were issued through the Company’s dividend reinvestment plan; 94,288 shares valued at $16,892,000 were withheld to satisfy employees’ tax withholding and other liabilities; and 4,408 restricted shares with an aggregate value of $801,000 were forfeited.

•Common stock dividends declared but not paid totaled $243,479,000.

•The Company recorded (i) an increase to prepaid expenses and other assets of $18,659,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $471,000 of cash flow hedge gains from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

•The Company recorded $25,719,000 of lease liabilities and offsetting right of use lease assets related to the execution of one new ground lease for a development right.

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During the year ended December 31, 2023:

•The Company issued 153,162 shares of common stock as part of the Company's stock based compensation plans, of which 60,016 shares related to the conversion of performance awards to shares of common stock, and the remaining 93,146 shares valued at $16,552,000 were issued in connection with new stock grants; 3,454 shares valued at $619,000 were issued through the Company’s dividend reinvestment plan; 62,937 shares valued at $10,639,000 were withheld to satisfy employees’ tax withholding and other liabilities; and 2,119 restricted shares with an aggregate value of $413,000 were forfeited.

•Common stock dividends declared but not paid totaled $236,133,000.

•The Company recorded (i) an increase to prepaid expenses and other assets of $13,332,000 and a corresponding adjustment to accumulated other comprehensive income; and (ii) reclassified $1,360,000 of cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedging activity.

•The Company assumed a $63,041,000 fixed rate mortgage loan in conjunction with the acquisition of Avalon West Plano.

See accompanying notes to Consolidated Financial Statements.

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AVALONBAY COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization, Basis of Presentation and Significant Accounting Policies

Organization and Basis of Presentation

AvalonBay Communities, Inc. (the "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") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company develops, redevelops, acquires, owns and operates multifamily communities in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.

At December 31, 2025, the Company owned or held a direct or indirect ownership interest in 320 apartment communities containing 98,694 apartment homes in 11 states and the District of Columbia, of which 24 communities were under construction. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 32 communities that, if developed as expected, will contain an estimated 9,032 apartment homes (unaudited).

Capitalized terms used without definition have meanings provided elsewhere in this Form 10-K.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, certain joint venture partnerships, subsidiary partnerships structured as DownREITs, and any variable interest entities that qualify for consolidation. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company accounts for joint venture entities and subsidiary partnerships in accordance with the consolidation guidance. The Company determines first whether to follow the variable interest entity ("VIE") or the voting interest entity ("VOE") model for each joint venture entity. The Company then evaluates whether it should consolidate the venture. Under the VIE model, the Company consolidates an investment when 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. The Company's maximum exposure for its VIEs is limited to its investments in the respective VIEs and its portion of any loan guarantee. Under the VOE model, the Company consolidates an investment when (i) it controls the investment through ownership of a majority voting interest if the investment is not a limited partnership or (ii) it controls the investment through its ability to remove the other partners in the investment, at its discretion, when the investment is a limited partnership.

The Company generally uses the equity method of accounting or net asset value ("NAV") for its unconsolidated investments, including when 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 that owns real estate, 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 measurement alternative with the carrying amount of the investment adjusted to fair value when there is an observable transaction indicating a change in fair value.

Real Estate

Operating real estate assets are stated at cost and consist of land and improvements, buildings and improvements, furniture, fixtures and equipment, and other costs incurred during their development, redevelopment and acquisition. Significant expenditures that improve or extend the life of an existing asset and that will benefit the Company for periods greater than a year are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Project costs related to the development, construction and redevelopment of real estate projects (including interest and related loan fees, property taxes and other direct costs) are capitalized as a cost of the project. Indirect project costs that relate to several projects are capitalized and allocated to the projects to which they relate. Indirect costs not clearly related to development, construction and redevelopment activity are expensed as incurred. For development, capitalization (i) begins when the Company has determined that development of the future asset is probable, (ii) can be suspended if there is no current

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development activity underway, but future development is still probable and (iii) ends when the asset, or a portion of an asset, is ready for its intended use, or the Company's intended use changes such that capitalization is no longer appropriate.

For land parcels acquired for development improved with operating real estate, the Company generally manages the improvements until 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 land parcels in excess of any incremental costs are recorded as a reduction of total capitalized costs of the respective Development Right and not as part of net income. Incidental operating costs in excess of incidental operating income are expensed in the period incurred.

For redevelopment efforts, the Company capitalizes costs either (i) in advance of taking homes out of service when significant renovation of the common area has begun until the redevelopment is completed, or (ii) when an apartment home is taken out of service for redevelopment until the redevelopment is completed and the apartment home is available for a new resident. Rental income and operating costs incurred during the initial lease-up or post-redevelopment lease-up period are recognized in earnings.

The Company accounts for real estate acquisitions as either an asset acquisition or a business combination. Under either model, the Company identifies and determines the fair value of any assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. The Company generally views acquisitions of operating communities as asset acquisitions, which results in the capitalization of acquisition costs and the allocation of purchase price to the assets acquired and liabilities assumed, based on the relative fair value of the respective assets and liabilities.

Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of in-place leases and leases priced above or below market. The Company utilizes various sources to determine fair value, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. The purchase price allocation to tangible assets is 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, is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets and amortized over the term of the acquired intangible asset. The Company values 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 are valued using a replacement cost approach and consider the structures and amenities included for the communities and is reduced by estimated depreciation. The value for furniture, fixtures and equipment is also determined based on a replacement cost approach, considering costs for both items in the apartment homes as well as common areas and is adjusted for estimated depreciation. The fair value of buildings is estimated using the replacement cost approach, assuming the buildings were vacant at acquisition. The replacement cost approach considers the composition of structures acquired, adjusted for depreciation which considers industry standard information and estimated useful life of the acquired property. The in-place lease intangible considers the estimated cost of leasing the apartment homes as if the acquired building(s) were vacant and is determined using an average total lease-up time, the number of apartment homes and market rent considering actual leasing and industry rental rate data generated during the lease-up time. The above or below market lease intangibles represent the value of the current leases relative to market-rate leases and is based on market comparables. Given the heterogeneous nature of multifamily real estate, the fair values for the land, debt, real estate assets and in-place leases incorporate significant unobservable inputs and therefore are considered to be Level 3 prices within the fair value hierarchy. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed.

Depreciation is generally calculated on a straight-line basis over the estimated useful lives of the assets, which for buildings and related improvements range from seven years to 30 years and for furniture, fixtures and equipment range from three years to seven years.

Noncontrolling Interests

The Company classifies the carrying value of the DownREIT Units as noncontrolling interests, as the units may be redeemed by unitholders on or after April 30, 2026 for cash or common stock at the Company's election. Net income is allocated to the DownREIT Units pro-rata based on the weighted average proportion of DownREIT Units to the weighted average combined total of outstanding common stock, participating securities, and DownREIT Units for the period.

Income Taxes

The Company elected to be treated as a REIT for federal income tax purposes for its tax year ended December 31, 1994 and has not revoked such election. A REIT is a corporate entity which holds real estate interests and can deduct from its federally

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