EX-99.1 2 q32023ex-991.htm EX-99.1
Exhibit 99.1
For Immediate News Release
October 25, 2023
AVALONBAY COMMUNITIES, INC.
ANNOUNCES THIRD QUARTER 2023 OPERATING RESULTS AND
FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL OUTLOOK
(Arlington, VA) AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported Earnings per Share – diluted (“EPS”), Funds from Operations attributable to common stockholders - diluted (“FFO”) per share and Core FFO per share (as defined in this release) for the three and nine months ended September 30, 2023 and 2022 as detailed below.

|  | Q3 2023 |  | Q3 2022 |  | % Change
EPS |  | $ | 1.21 |  |  | $ | 3.53 |  |  | (65.7) | %
FFO per share (1) | $ | 2.48 |  |  | $ | 2.46 |  |  | 0.8 | %
Core FFO per share (1) | $ | 2.66 |  |  | $ | 2.50 |  |  | 6.4 | %
|  | YTD 2023 |  | YTD 2022 |  | % Change
EPS |  | $ | 4.86 |  |  | $ | 6.40 |  |  | (24.1) | %
FFO per share (1) | $ | 7.69 |  |  | $ | 7.11 |  |  | 8.2 | %
Core FFO per share (1) | $ | 7.89 |  |  | $ | 7.19 |  |  | 9.7 | %
(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Definitions and Reconciliations, table 3.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended September 30, 2023 to its results for the prior year period:

Q3 2023 Results Compared to Q3 2022
| Per Share
| EPS | FFO | Core FFO
Q3 2022 per share reported results | $ | 3.53 |  | $ | 2.46 |  | $ | 2.50 |
Same Store Residential NOI (1) | 0.15 |  | 0.15 |  | 0.15 |
Development and Other Stabilized Residential NOI | 0.06 |  | 0.06 |  | 0.06 |
Commercial NOI | (0.02) |  | (0.02) |  | (0.02) |
Overhead and other | (0.02) |  | (0.02) |  | (0.02) |
Capital markets and transaction activity | 0.02 |  | (0.01) |  | (0.01) |
Non-core items (2) | (0.14) |  | (0.14) |  | — |
Real estate gains, depreciation expense and other | (2.37) |  | — |  | — |
Q3 2023 per share reported results | $ | 1.21 |  | $ | 2.48 |  | $ | 2.66 |
(1) Consists of increases of $0.22 in revenue and $0.07 in operating expenses.
(2) For detail of non-core items, see Definitions and Reconciliations, table 3.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the
three months ended September 30, 2023 to its July 2023 outlook:

Q3 2023 Results Compared to July 2023 Outlook
| Per Share
| EPS | FFO | Core FFO
Projected per share (1) | $ | 1.27 |  | $ | 2.55 |  | $ | 2.60 |
Same Store Residential NOI (2) | 0.04 |  | 0.04 |  | 0.04 |
Development and Other Stabilized Residential NOI | 0.01 |  | 0.01 |  | 0.01 |
Overhead and other | (0.01) |  | (0.01) |  | (0.01) |
Capital markets and transaction activity | 0.02 |  | 0.02 |  | 0.02 |
Non-core items (3) | (0.13) |  | (0.13) |  | — |
Real estate gains, depreciation expense and other | 0.01 |  | — |  | — |
Q3 2023 per share reported results | $ | 1.21 |  | $ | 2.48 |  | $ | 2.66 |
(1) The mid-point of the Company's July 2023 outlook.
(2) Consists of higher revenue of $0.02 and lower operating expenses of $0.02.
(3) For detail of non-core items for the three months ended September 30, 2023, see Definitions and Reconciliations, table 3.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the nine months ended September 30, 2023 to its results for the prior year period:

YTD 2023 Results Compared to YTD 2022
| Per Share
| EPS | FFO | Core FFO
YTD 2022 per share reported results | $ | 6.40 |  | $ | 7.11 |  | $ | 7.19 |
Same Store Residential NOI (1) | 0.60 |  | 0.60 |  | 0.60 |
Development and Other Stabilized Residential NOI | 0.17 |  | 0.17 |  | 0.17 |
Commercial NOI | (0.01) |  | (0.01) |  | (0.01) |
Overhead and other | (0.03) |  | (0.03) |  | (0.03) |
Capital markets and transaction activity | (0.01) |  | (0.05) |  | (0.05) |
Unconsolidated investment income and management fees | 0.03 |  | 0.03 |  | 0.03 |
Non-core items (2) | (0.13) |  | (0.13) |  | (0.01) |
Real estate gains, depreciation expense and other | (2.16) |  | — |  | — |
YTD 2023 per share reported results | $ | 4.86 |  | $ | 7.69 |  | $ | 7.89 |
(1) Consists of increases of $0.87 in revenue and $0.27 in operating expenses.
(2) For detail of non-core items, see Definitions and Reconciliations, table 3.

Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
1

Same Store Operating Results for the Three Months Ended September 30, 2023 Compared to the Prior Year Period
Same Store total revenue increased $30,305,000, or 5.0%, to $642,093,000. Same Store Residential rental revenue increased $31,361,000, or 5.2%, to $635,318,000, as detailed in the following table:

Same Store Residential Rental Revenue Change
Q3 2023 Compared to Q3 2022
Lease rates | 4.2 | %
Concessions and other discounts | — | %
Economic occupancy | (0.2) | %
Other rental revenue | 1.0 | %
Uncollectible lease revenue (excluding rent relief) (1) | 1.0 | %
Rent relief (2) | (0.8) | %
Residential rental revenue | 5.2 | %
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue decreased to 2.1% in Q3 2023 from 3.2% in Q3 2022. See Definitions and Reconciliations, table 11 for further detail of uncollectible lease revenue for the Company’s Same Store portfolio.
(2) The Company recognized $1,516,000 and $6,490,000 from government rent relief programs during Q3 2023 and Q3 2022, respectively.

Same Store Residential operating expenses increased $9,736,000, or 5.0%, to $202,828,000 and Same Store Residential NOI increased $21,609,000, or 5.3%, to $432,922,000.
The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the three months ended September 30, 2023 compared to the three months ended September 30, 2022:

Q3 2023 Compared to Q3 2022
|  | Same Store Residential
| Rental Revenue (1) | Opex (2) |  |  |  | % of Q3 2023 NOI
|  | NOI |
New England |  | 5.7 | % |  | 8.0 | % |  | 4.4 | % |  | 14.1 | %
Metro NY/NJ |  | 4.7 | % |  | 5.6 | % |  | 4.3 | % |  | 20.5 | %
Mid-Atlantic |  | 5.2 | % |  | 1.8 | % |  | 6.9 | % |  | 14.6 | %
Southeast FL |  | 7.4 | % |  | 6.8 | % |  | 7.6 | % |  | 2.7 | %
Denver, CO |  | 4.0 | % |  | 6.0 | % |  | 3.2 | % |  | 1.2 | %
Pacific NW |  | 1.1 | % |  | 3.4 | % |  | (0.1) | % |  | 6.7 | %
N. California |  | 3.6 | % |  | 3.5 | % |  | 3.7 | % |  | 17.4 | %
S. California |  | 7.6 | % |  | 5.6 | % |  | 8.5 | % |  | 21.9 | %
Other Expansion Regions |  | 8.2 | % |  | 13.4 | % |  | 6.7 | % |  | 0.9 | %
Total |  | 5.2 | % |  | 5.0 | % |  | 5.3 | % |  | 100.0 | %
(1) See full release for additional detail.
(2) See full release for discussion of variances.

Same Store Operating Results for the Nine Months Ended September 30, 2023 Compared to the Prior Year Period
Same Store total revenue increased $120,733,000, or 6.8%, to $1,899,041,000. Same Store Residential rental revenue increased $121,808,000, or 6.9%, to $1,878,017,000, as detailed in the following table:

Same Store Residential Rental Revenue Change
YTD 2023 Compared to YTD 2022
Lease rates | 6.1 | %
Concessions and other discounts | 0.6 | %
Economic occupancy | (0.2) | %
Other rental revenue | 0.9 | %
Uncollectible lease revenue (excluding rent relief) (1) | 1.2 | %
Rent relief (2) | (1.7) | %
Residential rental revenue | 6.9 | %
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue decreased to 2.5% in YTD 2023 from 3.8% in YTD 2022. See Definitions and Reconciliations, table 11 for further detail of uncollectible lease revenue for the Company’s Same Store portfolio.
(2) The Company recognized $6,944,000 and $36,341,000 from government rent relief programs during YTD 2023 and YTD 2022, respectively.

Same Store Residential operating expenses increased $37,261,000, or 6.8%, to $587,768,000 and Same Store Residential NOI increased $84,535,000, or 7.0%, to $1,291,576,000.
The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022:

YTD 2023 Compared to YTD 2022
|  | Same Store Residential
| Rental Revenue (1) | Opex (2) |  |  |  | % of YTD 2023 NOI
|  | NOI |
New England |  | 8.5 | % |  | 6.8 | % |  | 9.4 | % |  | 14.1 | %
Metro NY/NJ |  | 8.2 | % |  | 8.3 | % |  | 8.2 | % |  | 20.7 | %
Mid-Atlantic |  | 6.7 | % |  | 3.2 | % |  | 8.3 | % |  | 14.7 | %
Southeast FL |  | 11.7 | % |  | 5.7 | % |  | 15.0 | % |  | 2.8 | %
Denver, CO |  | 5.9 | % |  | 16.6 | % |  | 2.0 | % |  | 1.1 | %
Pacific NW |  | 5.3 | % |  | 6.3 | % |  | 4.8 | % |  | 6.8 | %
N. California |  | 6.0 | % |  | 5.3 | % |  | 6.2 | % |  | 17.4 | %
S. California |  | 5.4 | % |  | 8.4 | % |  | 4.1 | % |  | 21.5 | %
Other Expansion Regions |  | 10.5 | % |  | 13.8 | % |  | 9.5 | % |  | 0.9 | %
Total |  | 6.9 | % |  | 6.8 | % |  | 7.0 | % |  | 100.0 | %
(1) See full release for additional detail.
(2) See full release for discussion of variances.

Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
2

Development Activity
Consolidated Development Communities
During the three months ended September 30, 2023, the Company completed the development of three communities:
•Avalon Somerville Station, located in Somerville, NJ;
•Avalon North Andover, located in North Andover, MA; and
•Avalon Merrick Park, located in Miami, FL.
These communities contain an aggregate of 849 apartment homes and were constructed for an aggregate Total Capital Cost of $302,000,000.
During the three months ended September 30, 2023, the Company started the construction of two apartment communities:
•Avalon Princeton Shopping Center, located in Princeton, NJ; and
•Avalon South Miami, located in South Miami, FL.
These communities are expected to contain an aggregate of 490 apartment homes and 32,000 square feet of commercial space, which is substantially leased, and be developed for an estimated Total Capital Cost of $268,000,000.
During the nine months ended September 30, 2023, the Company completed the development of five communities containing an aggregate of 1,172 apartment homes and 29,000 square feet of commercial space for an aggregate Total Capital Cost of $486,000,000.
At September 30, 2023, the Company had 16 consolidated Development communities under construction that are expected to contain 5,402 apartment homes and 59,000 square feet of commercial space. Estimated Total Capital Cost at completion for these Development communities is $2,257,000,000.
Disposition Activity
Consolidated Apartment Communities
During the three months ended September 30, 2023, the Company sold Avalon Columbia Pike, a wholly-owned community, located in Arlington, VA, for $105,000,000, resulting in a gain in accordance with GAAP of $22,345,000
and an Economic Loss of $2,409,000. Avalon Columbia Pike contains 269 apartment homes and 27,000 square feet of commercial space.
During the nine months ended September 30, 2023, the Company sold three wholly-owned communities containing an aggregate of 758 apartment homes and 27,000 square feet of commercial space. These communities were sold for $342,000,000 and a weighted average initial Market Cap Rate of 4.7%, resulting in a gain in accordance with GAAP of $209,686,000 and an Economic Gain of $120,869,000.
Acquisition Activity
During the three and nine months ended September 30, 2023, the Company acquired Avalon Frisco at Main, a wholly-owned community, located in Frisco, TX, containing 360 apartment homes for a purchase price of $83,100,000.
In October 2023, the Company acquired two wholly-owned communities:
•Avalon Mooresville, located in Mooresville, NC, contains 203 apartment homes for a purchase price of $52,100,000.
•Avalon West Plano, located in Carrollton, TX, contains 568 apartment homes for a purchase price of $142,000,000, which includes the assumption of a $63,041,000 fixed rate mortgage loan, with a contractual interest rate of 4.18%, maturing in May 2029.
Structured Investment Program ("SIP") Activity
During the three and nine months ended September 30, 2023, the Company entered into two additional commitments, agreeing to provide an aggregate investment of up to $51,660,000 in multifamily development projects in North Carolina and Florida. As of September 30, 2023, the Company had five commitments to fund either mezzanine loans or preferred equity investments for the development of multifamily projects in the Company's markets, up to $144,035,000 in the aggregate. At September 30, 2023, the Company's investment commitments had a weighted average rate of return of 10.9%. The commitments have initial maturity dates between September 2025 and August 2027. As of September 30, 2023, the Company had funded $76,274,000 of these commitments.
Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
3

Liquidity and Capital Markets
At September 30, 2023, the Company had $508,571,000 in unrestricted cash and cash equivalents. In addition, the Company had $234,008,000 in restricted cash, which is composed of principal reserve funds for secured borrowing arrangements and proceeds from dispositions held in escrow for subsequent tax deferred exchange activity.
As of September 30, 2023, the Company did not have any borrowings outstanding under its $2,250,000,000 unsecured revolving credit facility (the "Credit Facility") and had $70,000,000 outstanding under its $500,000,000 unsecured commercial paper note program. The commercial paper program is backstopped by the Company's commitment to maintain available borrowing capacity under its Credit Facility in an amount equal to actual borrowings under the program.
The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the third quarter of 2023 was 4.1 times and Unencumbered NOI (as defined in this release) for the nine months ended September 30, 2023 was 95%.
During the three months ended September 30, 2023, the Company repaid its $150,000,000 principal amount variable rate unsecured term loan at par in advance of its February 2024 maturity date.
During the nine months ended September 30, 2023, in addition to the debt activity discussed above, the Company repaid $250,000,000 principal amount of its 2.85% unsecured notes at its maturity.
During the nine months ended September 30, 2023, the Company settled the outstanding equity forward contracts entered into in April 2022 (the "Equity Forward"), issuing 2,000,000 shares of common stock for $491,912,000, or $245.96 per share, net of offering fees and discounts.
Fourth Quarter and Full Year 2023 Financial Outlook
For its fourth quarter and full year 2023 financial outlook, the Company expects the following:

Projected EPS, Projected FFO and Projected Core FFO Outlook (1)
|  | Q4 2023 |  | Full Year 2023
|  | Low |  | High |  | Low |  | High
Projected EPS |  | $ | 1.76 |  | — | $ | 1.86 |  |  | $ | 6.61 |  | — | $ | 6.71 |
Projected FFO per share | $ | 2.65 |  | — | $ | 2.75 |  |  | $ | 10.34 |  | — | $ | 10.44 |
Projected Core FFO per share | $ | 2.69 |  | — | $ | 2.79 |  |  | $ | 10.58 |  | — | $ | 10.68 |
(1) See Definitions and Reconciliations, table 9, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS.
Full Year Financial Outlook
|  |  |  | Full Year 2023
|  |  |  | vs. Full Year 2022
|  |  |  |  |  | Low |  | High
Same Store: |  |  |  |  |  |  |  |
Residential revenue change |  |  |  | 6.2% | — | 6.4%
Residential Opex change |  |  |  | 6.1% | — | 6.5%
Residential NOI change |  |  |  | 6.1% | — | 6.5%

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the third quarter 2023 to the mid-point of its fourth quarter 2023 financial outlook:

Q3 2023 Results Compared to Q4 2023 Outlook
| Per Share
| EPS | FFO | Core FFO
Q3 2023 per share reported results | $ | 1.21 |  | $ | 2.48 |  | $ | 2.66 |
Same Store Residential revenue | 0.01 |  | 0.01 |  | 0.01 |
Same Store Residential Opex | 0.06 |  | 0.06 |  | 0.06 |
Development and Other Stabilized Residential NOI | 0.01 |  | 0.01 |  | 0.01 |
Overhead and other | 0.01 |  | 0.01 |  | 0.01 |
Capital markets and transaction activity | (0.01) |  | (0.01) |  | (0.01) |
Non-core items (1) | 0.14 |  | 0.14 |  | — |
Gain on sale of real estate and depreciation expense | 0.38 |  | — |  | — |
Projected per share - Q4 2023 outlook (2) | $ | 1.81 |  | $ | 2.70 |  | $ | 2.74 |
(1) For detail of non-core items, see Definitions and Reconciliations, table 3 and table 9.
(2) Represents the mid-point of the Company's outlook.

The following table compares the mid-point of the Company’s October 2023 full year outlook for EPS, FFO per share and Core FFO per share to its July 2023 full year outlook:
Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
4

October 2023 Full Year Outlook Compared to July 2023 Full Year Outlook
| Per Share
| EPS | FFO | Core FFO
Projected per share - July 2023 outlook (1) | $ | 6.93 |  | $ | 10.47 |  | $ | 10.56 |
Same Store Residential revenue | 0.04 |  | 0.04 |  | 0.04 |
Same Store Residential Opex | 0.01 |  | 0.01 |  | 0.01 |
Overhead and other | (0.03) |  | (0.03) |  | (0.03) |
Capital markets and transaction activity | 0.05 |  | 0.05 |  | 0.05 |
Non-core items (2) | (0.15) |  | (0.15) |  | — |
Gain on sale of real estate and depreciation expense | (0.19) |  | — |  | — |
Projected per share - October 2023 outlook (1) | $ | 6.66 |  | $ | 10.39 |  | $ | 10.63 |
(1) Represents the mid-point of the Company's outlook.
(2) For detail of non-core items, see Definitions and Reconciliations, table 9.

Other Matters
The Company will hold a conference call on October 26, 2023 at 1:00 PM ET to review and answer questions about this release, its third quarter 2023 results, the Attachments (described below) and related matters. To participate on the call, dial 877-407-9716.
To hear a replay of the call, which will be available from October 26, 2023 at 4:00 PM ET to November 26, 2023, dial 844-512-2921 and use replay passcode: 13734361. A webcast of the conference call will also be available at https://investors.avalonbay.com, and an online playback of the webcast will be available for at least seven days following the call.
The Company produces Earnings Release Attachments (the "Attachments") that provide detailed information regarding operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company's website at https://investors.avalonbay.com. To receive future press releases via e-mail, please submit a request through https://investors.avalonbay.com/other-information.
In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at https://investors.avalonbay.com subsequent to this release and before the market opens on October 26, 2023.
About AvalonBay Communities, Inc.
As of September 30, 2023, the Company owned or held a direct or indirect ownership interest in 296 apartment communities containing 89,240 apartment homes in 12
states and the District of Columbia, of which 17 communities were under development and one community was under redevelopment. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas 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. More information may be found on the Company’s website at https://www.avalonbay.com. For additional information, please contact Jason Reilley, Vice President of Investor Relations, at 703-317-4681.
Forward-Looking Statements
This release, including its Attachments, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which you can identify by the Company’s use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook,” “may,” “shall,” “will,” “pursue” and similar expressions that predict or indicate future events and trends and that do not report historical matters, are based on the Company’s expectations, forecasts and assumptions at the time of this release, which may not be realized and involve risks and uncertainties that cannot be predicted accurately or that might not be anticipated. These could cause actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Risks and uncertainties that might cause such differences include the following: we may abandon development or redevelopment opportunities for which we have already incurred costs; adverse capital and credit market conditions, including rising interest rates, may affect our access to various sources of capital and/or cost of capital, which may affect our business activities, earnings and common stock price, among other things; changes in local employment conditions, demand for apartment homes, supply of competitive housing products, landlord-tenant laws, including the adoption of rent control regulations, and other economic or regulatory conditions may result in lower than expected occupancy and/or rental rates and adversely affect the profitability of our communities; delays in completing development, redevelopment and/or lease-up, and general price inflation, may result in increased financing and construction costs and may delay and/or reduce the profitability of a community; debt and/or equity financing for development, redevelopment or acquisitions of
Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
5

communities may not be available or may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; expenses may result in communities that we develop or redevelop failing to achieve expected profitability; our assumptions concerning risks relating to joint ventures and our ability to successfully dispose of certain assets may not be realized; investments made under the SIP in either mezzanine debt or preferred equity of third-party multifamily development may not be repaid as expected; our assumptions and expectations in our financial outlook may prove to be too optimistic; litigation costs and consequences may exceed our expectations; and risks related to an outbreak of disease or other public health event may affect the multifamily industry and general economy, including from measures taken by businesses and the government and the preferences of consumers and businesses for living and working arrangements both during and after such an event. Additional discussions of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements appear in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 under the heading “Risk Factors” and under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements” and in subsequent quarterly reports on Form 10-Q.
The Company does not undertake a duty to update forward-looking statements, including its expected 2023 operating results and other financial data forecasts contained in this release. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.
Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
6

Definitions and Reconciliations
Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined, reconciled and further explained on Attachment 12, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 12 is included in the full earnings release available at the Company’s website at https://investors.avalonbay.com. This wire distribution includes only the following definitions and reconciliations.
Average Monthly Rental Revenue per Occupied Home is calculated by the Company as Residential rental revenue in accordance with GAAP, divided by the weighted average number of occupied apartment homes.
Commercial represents results attributable to the non-apartment components of the Company's mixed-use communities and other non-residential operations.
Development is composed of consolidated communities that are either currently under construction, or were under construction and were completed during the current year. These communities may be partially or fully complete and operating.
EBITDA, EBITDAre and Core EBITDAre are considered by management to be supplemental measures of our financial performance. EBITDA is defined by the Company as net income or loss computed in accordance with GAAP before interest expense, income taxes, depreciation and amortization. EBITDAre is calculated by the Company in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), as EBITDA plus or minus losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property, with adjustments to reflect the Company's share of EBITDAre of unconsolidated entities. Core EBITDAre is the Company’s EBITDAre as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered part of the Company’s core business operations, Core EBITDAre can help one compare the core operating and financial performance of the Company between periods. A reconciliation of EBITDA, EBITDAre and Core EBITDAre to net income is as follows (dollars in thousands):

TABLE 1
|  | Q3
|  | 2023
Net income |  | $ | 171,790 |
Interest expense and loss on extinguishment of debt |  | 59,091 |
Income tax expense |  | 4,372 |
Depreciation expense |  | 200,982 |
EBITDA |  | $ | 436,235 |
Casualty loss |  | 3,499 |
Gain on sale of communities |  | (22,121) |
Unconsolidated entity EBITDAre adjustments (1) |  | 2,770 |
EBITDAre |  | $ | 420,383 |
Unconsolidated entity losses, net |  | 827 |
Joint venture promote |  | (424) |
Structured Investment Program loan reserve |  | 539 |
Hedge accounting activity |  | 65 |
Executive transition compensation costs |  | 300 |
Severance related costs |  | 993 |
Expensed transaction, development and other pursuit costs, net of recoveries |  | 18,070 |
Other real estate activity |  | (237) |
Legal settlements |  | 14 |
Core EBITDAre |  | $ | 440,530 |
(1) Includes joint venture interest, taxes, depreciation, gain on dispositions of depreciated real estate and impairment losses, if applicable, included in net income.

7

Economic (Loss) Gain is calculated by the Company as the gain on sale in accordance with GAAP, less accumulated depreciation through the date of sale and any other adjustments that may be required under GAAP accounting. Management generally considers Economic (Loss) Gain to be an appropriate supplemental measure to gain on sale in accordance with GAAP because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold community. The Economic (Loss) Gain for disposed communities is based on their respective final settlement statements. A reconciliation of the aggregate Economic (Loss) Gain to the aggregate gain on sale in accordance with GAAP for the wholly-owned communities disposed of during the three and nine months ended September 30, 2023 is as follows (dollars in thousands):

TABLE 2
| Q3 2023 |  | YTD 2023
GAAP Gain | $ | 22,345 |  |  | $ | 209,686 |
Accumulated Depreciation and Other | (24,754) |  |  | (88,817) |
Economic (Loss) Gain | $ | (2,409) |  |  | $ | 120,869 |

Economic Occupancy is defined as total possible Residential revenue less vacancy loss as a percentage of total possible Residential revenue. Total possible Residential revenue (also known as “gross potential”) is determined by valuing occupied units at contract rates and vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant apartments at their Market Rents, Economic Occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a community’s gross revenue.
FFO and Core FFO are generally considered by management to be appropriate supplemental measures of our operating and financial performance. FFO is calculated by the Company in accordance with the definition adopted by Nareit. FFO is calculated by the Company 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 which are driven by a decrease in the value of depreciable real estate assets held by the affiliate and depreciation of real estate assets, including adjustments for unconsolidated partnerships and joint ventures. FFO can help one compare the operating and financial performance of a real estate company between periods or as compared to different companies because adjustments such as (i) gains or losses on sales of previously depreciated property or (ii) real estate depreciation may impact comparability between companies 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. Core FFO is the Company's FFO as adjusted for non-core items outlined in the table below. By further adjusting for items that are not considered by us to be part of our core business operations, Core FFO can help with the comparison of core operating performance of the Company between periods. A reconciliation of Net income attributable to common stockholders to FFO and to Core FFO is as follows (dollars in thousands):
8

TABLE 3
|  | Q3 |  | Q3 |  | YTD |  | YTD
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Net income attributable to common stockholders |  | $ | 172,031 |  |  | $ | 494,747 |  |  | $ | 686,856 |  |  | $ | 895,482 |
Depreciation - real estate assets, including joint venture adjustments |  | 199,546 |  |  | 205,489 |  |  | 602,023 |  |  | 604,634 |
Distributions to noncontrolling interests |  | — |  |  | 12 |  |  | 25 |  |  | 36 |
Gain on sale of unconsolidated entities holding previously depreciated real estate |  | — |  |  | (38,062) |  |  | — |  |  | (38,062) |
Gain on sale of previously depreciated real estate |  | (22,121) |  |  | (318,289) |  |  | (209,430) |  |  | (467,493) |
Casualty loss on real estate |  | 3,499 |  |  | — |  |  | 8,550 |  |  | — |
FFO attributable to common stockholders |  | 352,955 |  |  | 343,897 |  |  | 1,088,024 |  |  | 994,597 |
Adjusting items: |  |  |  |  |  |  |  |
Unconsolidated entity losses (gains), net (1) |  | 827 |  |  | 307 |  |  | (4,024) |  |  | (1,988) |
Joint venture promote (2) |  | (424) |  |  | (4,690) |  |  | (1,496) |  |  | (4,690) |
Structured Investment Program loan reserve (3) |  | 539 |  |  | 45 |  |  | 415 |  |  | 1,653 |
Loss on extinguishment of consolidated debt |  | 150 |  |  | 1,646 |  |  | 150 |  |  | 1,646 |
Hedge accounting activity |  | 65 |  |  | (64) |  |  | 256 |  |  | (496) |
Advocacy contributions |  | — |  |  | — |  |  | 200 |  |  | 534 |
Executive transition compensation costs |  | 300 |  |  | 411 |  |  | 944 |  |  | 1,220 |
Severance related costs |  | 993 |  |  | 574 |  |  | 2,493 |  |  | 639 |
Expensed transaction, development and other pursuit costs, net of recoveries (4) |  | 18,070 |  |  | 5,783 |  |  | 21,318 |  |  | 7,781 |
Other real estate activity |  | (237) |  |  | (319) |  |  | (707) |  |  | (564) |
For-sale condominium imputed carry cost (5) |  | 110 |  |  | 400 |  |  | 534 |  |  | 2,035 |
Legal settlements (6) |  | 14 |  |  | (3,677) |  |  | 64 |  |  | (3,418) |
Income tax expense (7) |  | 4,372 |  |  | 5,651 |  |  | 7,715 |  |  | 7,963 |
Core FFO attributable to common stockholders |  | $ | 377,734 |  |  | $ | 349,964 |  |  | $ | 1,115,886 |  |  | $ | 1,006,912 |
Average shares outstanding - diluted |  | 142,198,099 |  |  | 139,981,959 |  |  | 141,448,675 |  |  | 139,964,172 |
Earnings per share - diluted |  | $ | 1.21 |  |  | $ | 3.53 |  |  | $ | 4.86 |  |  | $ | 6.40 |
FFO per common share - diluted |  | $ | 2.48 |  |  | $ | 2.46 |  |  | $ | 7.69 |  |  | $ | 7.11 |
Core FFO per common share - diluted |  | $ | 2.66 |  |  | $ | 2.50 |  |  | $ | 7.89 |  |  | $ | 7.19 |
(1) Amounts consist primarily of net unrealized gains on technology investments.
(2) Amounts for 2023 and 2022 are for the Company's recognition of its promoted interest in the U.S. Fund.
(3) Amounts are the expected credit losses associated with the Company's lending commitments under its SIP. The timing and amount of any actual losses that will be incurred, if any, is to be determined.
(4) Amounts for 2023 include the write-offs of $17,111 for three development opportunities in Northern and Southern California and the Mid-Atlantic that the Company determined are no longer probable. Amounts for 2022 include the write-off of $5,335 for a development opportunity in the Pacific Northwest that the Company determined is no longer probable.
(5) Represents the imputed carry cost of the for-sale residential condominiums at The Park Loggia. The Company computes this adjustment by multiplying the Total Capital Cost of completed and unsold for-sale residential condominiums by the Company's weighted average unsecured debt effective interest rate.
(6) In 2022, the Company received $6,000 of legal settlement proceeds, of which $3,684 is adjusted for Core FFO.
(7) Amounts are primarily for the recognition of taxes associated with The Park Loggia.

Interest Coverage is calculated by the Company as Core EBITDAre divided by interest expense. Interest Coverage is presented by the Company because it provides rating agencies and investors an additional means of comparing our ability to service debt obligations to that of other companies. A calculation of Interest Coverage for the three months ended September 30, 2023 is as follows (dollars in thousands):
9

TABLE 4
Core EBITDAre (1) | $ | 440,530 |
Interest expense (2) | $ | 59,091 |
Interest Coverage | 7.5 times
(1) For additional detail, see Definitions and Reconciliations, table 1.
(2) Excludes the impact of non-core hedge accounting activity.

Market Cap Rate is defined by the Company as Projected NOI of a single community for the first 12 months of operations (assuming no repositioning), less estimates for non-routine allowance of approximately $300 - $500 per apartment home, divided by the gross sales price for the community. Projected NOI, as referred to above, represents management’s estimate of projected rental revenue minus projected operating expenses before interest, income taxes (if any), depreciation and amortization. For this purpose, management’s projection of operating expenses for the community includes a management fee of 2.25%. The Market Cap Rate, which may be determined in a different manner by others, is a measure frequently used in the real estate industry when determining the appropriate purchase price for a property or estimating the value for a property. Buyers may assign different Market Cap Rates to different communities when determining the appropriate value because they (i) may project different rates of change in operating expenses and capital expenditure estimates and (ii) may project different rates of change in future rental revenue due to different estimates for changes in rent and occupancy levels. The weighted average Market Cap Rate is weighted based on the gross sales price of each community.
Market Rents as reported by the Company are based on the current market rates set by the Company based on its experience in renting apartments and publicly available market data. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.
Net Debt-to-Core EBITDAre is calculated by the Company as total debt (secured and unsecured notes, and the Company's Credit Facility and commercial paper program) that is consolidated for financial reporting purposes, less consolidated cash and restricted cash, divided by annualized third quarter 2023 Core EBITDAre. A calculation of Net Debt-to-Core EBITDAre is as follows (dollars in thousands):

TABLE 5
Total debt principal (1) | $ | 8,002,301 |
Cash and cash equivalents and restricted cash | (742,579) |
Net debt | $ | 7,259,722 |
Core EBITDAre (2) | $ | 440,530 |
Core EBITDAre, annualized | $ | 1,762,120 |
Net Debt-to-Core EBITDAre | 4.1 times
(1) Balance at September 30, 2023 excludes $42,207 of debt discount and deferred financing costs as reflected in unsecured notes, net, and $13,089 of debt discount and deferred financing costs as reflected in notes payable, net, on the Condensed Consolidated Balance Sheets.
(2) For additional detail, see Definitions and Reconciliations, table 1.

10

NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, 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, depreciation expense, income tax expense (benefit), casualty loss, gain on sale of communities, other real estate activity and net operating income from real estate assets sold or held for sale. The Company considers NOI to be an important and appropriate supplemental performance measure to net income of operating performance of a community or communities 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 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 groups of assets.
Residential NOI represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue. A reconciliation of Residential NOI to net income, as well as a breakdown of Residential NOI by operating segment, is as follows (dollars in thousands):
11

TABLE 6
|  | Q3 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  | YTD |  | YTD
|  | 2023 |  | 2022 |  | 2023 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net income |  | $ | 171,790 |  |  | $ | 494,632 |  |  | $ | 367,807 |  |  | $ | 146,775 |  |  | $ | 241,164 |  |  | $ | 686,372 |  |  | $ | 895,274 |
Property management and other indirect operating expenses, net of corporate income |  | 30,421 |  |  | 29,374 |  |  | 28,972 |  |  | 30,784 |  |  | 26,081 |  |  | 90,177 |  |  | 88,119 |
Expensed transaction, development and other pursuit costs, net of recoveries |  | 18,959 |  |  | 6,514 |  |  | 1,261 |  |  | 2,992 |  |  | 6,700 |  |  | 23,212 |  |  | 9,865 |
Interest expense, net |  | 48,115 |  |  | 57,290 |  |  | 51,585 |  |  | 56,821 |  |  | 57,461 |  |  | 156,521 |  |  | 172,613 |
Loss on extinguishment of debt, net |  | 150 |  |  | 1,646 |  |  | — |  |  | — |  |  | — |  |  | 150 |  |  | 1,646 |
General and administrative expense |  | 20,466 |  |  | 14,611 |  |  | 17,676 |  |  | 20,400 |  |  | 20,741 |  |  | 58,542 |  |  | 53,323 |
Income from unconsolidated investments |  | (1,930) |  |  | (43,777) |  |  | (4,970) |  |  | (4,845) |  |  | (6,820) |  |  | (11,745) |  |  | (46,574) |
Depreciation expense |  | 200,982 |  |  | 206,658 |  |  | 200,546 |  |  | 204,743 |  |  | 207,232 |  |  | 606,271 |  |  | 607,746 |
Income tax expense (benefit) |  | 4,372 |  |  | 5,651 |  |  | (217) |  |  | 3,560 |  |  | 6,683 |  |  | 7,715 |  |  | 7,963 |
Casualty loss |  | 3,499 |  |  | — |  |  | — |  |  | 5,051 |  |  | — |  |  | 8,550 |  |  | — |
(Gain) loss on sale of communities |  | (22,121) |  |  | (318,289) |  |  | (187,322) |  |  | 13 |  |  | (88,065) |  |  | (209,430) |  |  | (467,493) |
Other real estate activity |  | (237) |  |  | (319) |  |  | (341) |  |  | (129) |  |  | (4,563) |  |  | (707) |  |  | (564) |
NOI from real estate assets sold or held for sale |  | (2,089) |  |  | (10,994) |  |  | (5,652) |  |  | (6,471) |  |  | (7,095) |  |  | (14,212) |  |  | (39,583) |
NOI |  | 472,377 |  |  | 442,997 |  |  | 469,345 |  |  | 459,694 |  |  | 459,519 |  |  | 1,401,416 |  |  | 1,282,335 |
Commercial NOI |  | (8,098) |  |  | (10,801) |  |  | (8,529) |  |  | (8,565) |  |  | (9,158) |  |  | (25,192) |  |  | (26,494) |
Residential NOI |  | $ | 464,279 |  |  | $ | 432,196 |  |  | $ | 460,816 |  |  | $ | 451,129 |  |  | $ | 450,361 |  |  | $ | 1,376,224 |  |  | $ | 1,255,841 |
Residential NOI |  |  |  |  |  |  |  |  |  |  |  |  |  |
Same Store: |  |  |  |  |  |  |  |  |  |  |  |  |  |
New England |  | $ | 60,944 |  |  | $ | 58,356 |  |  | $ | 61,567 |  |  | $ | 59,241 |  |  | $ | 59,677 |  |  | $ | 181,752 |  |  | $ | 166,148 |
Metro NY/NJ |  | 89,084 |  |  | 85,428 |  |  | 89,090 |  |  | 88,989 |  |  | 90,837 |  |  | 267,163 |  |  | 246,938 |
Mid-Atlantic |  | 63,158 |  |  | 59,078 |  |  | 63,437 |  |  | 62,950 |  |  | 62,304 |  |  | 189,545 |  |  | 174,953 |
Southeast FL |  | 11,889 |  |  | 11,048 |  |  | 11,984 |  |  | 12,172 |  |  | 11,359 |  |  | 36,045 |  |  | 31,335 |
Denver, CO |  | 5,061 |  |  | 4,905 |  |  | 4,821 |  |  | 4,945 |  |  | 5,121 |  |  | 14,827 |  |  | 14,531 |
Pacific NW |  | 29,069 |  |  | 29,085 |  |  | 29,657 |  |  | 29,411 |  |  | 28,929 |  |  | 88,137 |  |  | 84,130 |
N. California |  | 75,209 |  |  | 72,543 |  |  | 75,767 |  |  | 74,123 |  |  | 73,386 |  |  | 225,099 |  |  | 211,932 |
S. California |  | 94,739 |  |  | 87,337 |  |  | 93,195 |  |  | 89,507 |  |  | 89,178 |  |  | 277,441 |  |  | 266,509 |
Other Expansion Regions |  | 3,769 |  |  | 3,533 |  |  | 3,864 |  |  | 3,934 |  |  | 3,853 |  |  | 11,567 |  |  | 10,565 |
Total Same Store |  | 432,922 |  |  | 411,313 |  |  | 433,382 |  |  | 425,272 |  |  | 424,644 |  |  | 1,291,576 |  |  | 1,207,041 |
Other Stabilized |  | 20,926 |  |  | 16,541 |  |  | 19,701 |  |  | 19,765 |  |  | 20,237 |  |  | 60,392 |  |  | 37,032 |
Development/Redevelopment |  | 10,431 |  |  | 4,342 |  |  | 7,733 |  |  | 6,092 |  |  | 5,480 |  |  | 24,256 |  |  | 11,768 |
Residential NOI |  | $ | 464,279 |  |  | $ | 432,196 |  |  | $ | 460,816 |  |  | $ | 451,129 |  |  | $ | 450,361 |  |  | $ | 1,376,224 |  |  | $ | 1,255,841 |

NOI as reported by the Company does not include the operating results from assets sold or classified as held for sale. A reconciliation of NOI from communities sold or classified as held for sale is as follows (dollars in thousands):

TABLE 7
|  | Q3 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  |  |  | YTD |  | YTD
|  | 2023 |  | 2022 |  | 2023 |  | 2023 |  | 2022 |  |  |  | 2023 |  | 2022
Revenue from real estate assets sold or held for sale |  | $ | 3,058 |  |  | $ | 16,242 |  |  | $ | 8,339 |  |  | $ | 9,003 |  |  | $ | 10,119 |  |  |  |  | $ | 20,402 |  |  | $ | 59,663 |
Operating expenses from real estate assets sold or held for sale |  | (969) |  |  | (5,248) |  |  | (2,687) |  |  | (2,532) |  |  | (3,024) |  |  |  |  | (6,190) |  |  | (20,080) |
NOI from real estate assets sold or held for sale |  | $ | 2,089 |  |  | $ | 10,994 |  |  | $ | 5,652 |  |  | $ | 6,471 |  |  | $ | 7,095 |  |  |  |  | $ | 14,212 |  |  | $ | 39,583 |

12

Commercial NOI is composed of the following components (in thousands):

TABLE 8
|  | Q3 |  | Q3 |  | Q2 |  | Q1 |  | Q4 |  |  |  | YTD |  | YTD
|  | 2023 |  | 2022 |  | 2023 |  | 2023 |  | 2022 |  |  |  | 2023 |  | 2022
Commercial Revenue |  | $ | 9,945 |  |  | $ | 12,331 |  |  | $ | 10,175 |  |  | $ | 10,244 |  |  | $ | 10,769 |  |  |  |  | $ | 30,364 |  |  | $ | 31,211 |
Commercial Operating Expenses |  | (1,847) |  |  | (1,530) |  |  | (1,646) |  |  | (1,679) |  |  | (1,611) |  |  |  |  | (5,172) |  |  | (4,717) |
Commercial NOI |  | $ | 8,098 |  |  | $ | 10,801 |  |  | $ | 8,529 |  |  | $ | 8,565 |  |  | $ | 9,158 |  |  |  |  | $ | 25,192 |  |  | $ | 26,494 |

Other Stabilized is composed of completed consolidated communities that the Company owns, which have Stabilized Operations as of January 1, 2023, or which were acquired subsequent to January 1, 2022. Other Stabilized excludes communities that are conducting or are probable to conduct substantial redevelopment activities.
Projected FFO and Projected Core FFO, as provided within this release in the Company’s outlook, are calculated on a basis consistent with historical FFO and Core FFO, and are therefore considered to be appropriate supplemental measures to projected net income from projected operating performance. A reconciliation of the ranges provided for Projected FFO per share (diluted) for the fourth quarter and full year 2023 to the ranges provided for projected EPS (diluted) and corresponding reconciliation of the ranges for Projected FFO per share to the ranges for Projected Core FFO per share are as follows:

TABLE 9
|  | Low Range |  | High Range
Projected EPS (diluted) - Q4 2023 | $ | 1.76 |  |  | $ | 1.86 |
| Depreciation (real estate related) | 1.43 |  |  | 1.43 |
| Gain on sale of communities | (0.54) |  |  | (0.54) |
Projected FFO per share (diluted) - Q4 2023 | 2.65 |  |  | 2.75 |
| Expensed transaction, development and other pursuit costs, net of recoveries | 0.01 |  |  | 0.01 |
| Advocacy contributions | 0.03 |  |  | 0.03 |
Projected Core FFO per share (diluted) - Q4 2023 | $ | 2.69 |  |  | $ | 2.79 |
Projected EPS (diluted) - Full Year 2023 | $ | 6.61 |  |  | $ | 6.71 |
| Depreciation (real estate related) | 5.69 |  |  | 5.69 |
| Gain on sale of communities | (2.02) |  |  | (2.02) |
| Casualty loss | 0.06 |  |  | 0.06 |
Projected FFO per share (diluted) - Full Year 2023 | 10.34 |  |  | 10.44 |
| Joint venture promote and unconsolidated entity gains, net | (0.03) |  |  | (0.03) |
| Structured Investment Program loan reserve | 0.01 |  |  | 0.01 |
| Executive transition compensation costs | 0.01 |  |  | 0.01 |
| Severance related costs | 0.02 |  |  | 0.02 |
| Expensed transaction, development and other pursuit costs, net of recoveries | 0.16 |  |  | 0.16 |
| Income tax expense | 0.05 |  |  | 0.05 |
| Other real estate activity | (0.01) |  |  | (0.01) |
| Advocacy contributions | 0.03 |  |  | 0.03 |
Projected Core FFO per share (diluted) - Full Year 2023 | $ | 10.58 |  |  | $ | 10.68 |

13

Projected NOI, as used within this release for certain Development communities and in calculating the Market Cap Rate for dispositions, represents management’s estimate, as of the date of this release (or as of the date of the buyer’s valuation in the case of dispositions), of projected stabilized rental revenue minus projected stabilized operating expenses. For Development communities, Projected NOI is calculated based on the first twelve months of Stabilized Operations following the completion of construction. In calculating the Market Cap Rate, Projected NOI for dispositions is calculated for the first twelve months following the date of the buyer’s valuation. Projected stabilized rental revenue represents management’s estimate of projected gross potential minus projected stabilized economic vacancy and adjusted for projected stabilized concessions plus projected stabilized other rental revenue. Projected stabilized operating expenses do not include interest, income taxes (if any), depreciation or amortization, or any allocation of corporate-level property management overhead or general and administrative costs. In addition, projected stabilized operating expenses for Development communities do not include property management fee expense. Projected gross potential for Development communities and dispositions is generally based on leased rents for occupied homes and management’s best estimate of rental levels for homes which are currently unleased, as well as those homes which will become available for lease during the twelve-month forward period used to develop Projected NOI. The weighted average Projected NOI as a percentage of Total Capital Cost is weighted based on the Company’s share of the Total Capital Cost of each community, based on its percentage ownership.
Management believes that Projected NOI of the Development communities, on an aggregated weighted average basis, assists investors in understanding management's estimate of the likely impact on operations of the Development communities when the assets are complete and achieve stabilized occupancy (before allocation of any corporate-level property management overhead, general and administrative costs or interest expense). However, in this release the Company has not given a projection of NOI on a company-wide basis. Given the different dates and fiscal years for which NOI is projected for these communities, the projected allocation of corporate-level property management overhead, general and administrative costs and interest expense to communities under development is complex, impractical to develop, and may not be meaningful. Projected NOI of these communities is not a projection of the Company's overall financial performance or cash flow. There can be no assurance that the communities under development will achieve the Projected NOI as described in this release.
Redevelopment is composed of consolidated communities where substantial redevelopment is in progress or is probable to begin during the current year. Redevelopment is considered substantial when (i) capital invested during the reconstruction effort is expected to exceed the lesser of $5,000,000 or 10% of the community’s pre-redevelopment basis and (ii) physical occupancy is below or is expected to be below 90% during or as a result of the redevelopment activity. Redevelopment includes one community containing 714 apartment homes that is currently under active redevelopment as of September 30, 2023.
Residential represents results attributable to the Company's apartment rental operations, including parking and other ancillary Residential revenue.
Residential Rental Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to Residential rental revenue in conformity with GAAP to help investors evaluate the impact of both current and historical concessions on GAAP-based Residential rental revenue and to more readily enable comparisons to revenue as reported by other companies. In addition, Residential Rental Revenue with Concessions on a Cash Basis allows an investor to understand the historical trend in cash concessions.
A reconciliation of Same Store Residential rental revenue in conformity with GAAP to Residential Rental Revenue with Concessions on a Cash Basis is as follows (dollars in thousands):

TABLE 10
|  | Q3 |  | Q3 |  | Q2 |  | YTD |  | YTD
|  | 2023 |  | 2022 |  | 2023 |  | 2023 |  | 2022
Residential rental revenue (GAAP basis) |  | $ | 635,318 |  |  | $ | 603,957 |  | $ | 627,534 |  | $ | 1,878,017 |  |  | $ | 1,756,209
Residential concessions amortized |  | 4,066 |  |  | 3,469 |  | 3,265 |  | 10,433 |  |  | 19,059
Residential concessions granted |  | (6,194) |  |  | (2,225) |  | (2,768) |  | (12,539) |  |  | (6,764)
Residential Rental Revenue with Concessions on a Cash Basis |  | $ | 633,190 |  |  | $ | 605,201 |  | $ | 628,031 |  | $ | 1,875,911 |  |  | $ | 1,768,504
|  |  |  | Q3 2023 vs. Q3 2022 |  | Q3 2023 vs. Q2 2023 |  |  |  | YTD 2023 vs. YTD 2022
% change -- GAAP revenue |  |  |  | 5.2 | % |  | 1.2 | % |  |  |  | 6.9 | %
% change -- cash revenue |  |  |  | 4.6 | % |  | 0.8 | % |  |  |  | 6.1 | %

14

Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had Stabilized Operations, as defined below, as of the beginning of the respective prior year period. Therefore, for 2023 operating results, Same Store is composed of consolidated communities that have Stabilized Operations as of January 1, 2022, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale or probable for disposition within the current year.
Stabilized Operations/Restabilized Operations is defined as the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.
Total Capital Cost includes all capitalized costs projected to be or actually incurred to develop the respective Development or Redevelopment community, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees and a contingency estimate, offset by proceeds from the sale of any associated land or improvements, all as determined in accordance with GAAP. Total Capital Cost also includes costs incurred related to first generation commercial tenants, such as tenant improvements and leasing commissions. For Redevelopment communities, Total Capital Cost excludes costs incurred prior to the start of redevelopment when indicated. With respect to communities where development or redevelopment was completed in a prior period or the current period, Total Capital Cost reflects the actual cost incurred, plus any contingency estimate made by management. Total Capital Cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. For joint ventures not in construction, Total Capital Cost is equal to gross real estate cost.
Uncollectible lease revenue and government rent relief
The following table provides uncollectible Residential lease revenue as a percentage of total Residential rental revenue in the aggregate and excluding amounts recognized from government rent relief programs in each respective period. Government rent relief reduces the amount of uncollectible Residential lease revenue. The Company expects the amount of rent relief recognized to continue to decline in 2023 absent additional funding from the Federal government.

TABLE 11 |
|  | Same Store Uncollectible Residential Lease Revenue
|  | Q3 |  | Q3 |  | Q2 |  | Q1
|  | 2023 |  | 2022 |  | 2023 |  | 2023
|  | Total | Excluding Rent Relief |  | Total | Excluding Rent Relief |  | Total | Excluding Rent Relief |  | Total | Excluding Rent Relief
New England |  | 0.9 | % | 1.2 | % |  | 0.9 | % | 1.5 | % |  | 0.6 | % | 1.1 | % |  | 0.9 | % | 1.4 | %
Metro NY/NJ |  | 2.3 | % | 2.7 | % |  | 1.8 | % | 3.3 | % |  | 2.3 | % | 3.2 | % |  | 2.4 | % | 3.5 | %
Mid-Atlantic |  | 2.2 | % | 2.4 | % |  | 2.3 | % | 2.7 | % |  | 1.9 | % | 2.3 | % |  | 2.6 | % | 2.7 | %
Southeast FL |  | 3.0 | % | 3.0 | % |  | 3.5 | % | 4.6 | % |  | 2.6 | % | 3.1 | % |  | 2.3 | % | 3.0 | %
Denver, CO |  | 1.5 | % | 1.5 | % |  | 0.2 | % | 0.7 | % |  | 1.0 | % | 1.0 | % |  | 1.4 | % | 1.7 | %
Pacific NW |  | 1.6 | % | 1.8 | % |  | 0.9 | % | 1.3 | % |  | 0.8 | % | 1.0 | % |  | 0.9 | % | 1.2 | %
N. California |  | 1.2 | % | 1.4 | % |  | 1.0 | % | 2.2 | % |  | 1.2 | % | 1.3 | % |  | 1.7 | % | 1.9 | %
S. California |  | 2.5 | % | 2.7 | % |  | 4.5 | % | 5.9 | % |  | 3.4 | % | 3.5 | % |  | 4.9 | % | 5.2 | %
Other Expansion Regions |  | 0.5 | % | 0.5 | % |  | 1.4 | % | 1.4 | % |  | 0.3 | % | 0.3 | % |  | 0.6 | % | 0.6 | %
Total Same Store |  | 1.9 | % | 2.1 | % |  | 2.2 | % | 3.2 | % |  | 1.9 | % | 2.3 | % |  | 2.5 | % | 3.0 | %

Unconsolidated Development is composed of communities that are either currently under construction, or were under construction and were completed during the current year, in which we have an indirect ownership interest through our investment interest in an unconsolidated joint venture. These communities may be partially or fully complete and operating.
Unencumbered NOI as calculated by the Company represents NOI generated by real estate assets unencumbered by outstanding secured notes payable as of September 30, 2023 as a percentage of total NOI generated by real estate assets. The Company believes that current and prospective unsecured creditors of the Company view Unencumbered NOI as one indication of the borrowing capacity of the Company. Therefore, when reviewed together with the Company’s Interest Coverage, EBITDA and cash flow from operations, the Company believes that investors and creditors view Unencumbered NOI as a useful supplemental measure for determining the financial flexibility of an entity. A calculation of Unencumbered NOI for the nine months ended September 30, 2023 is as follows (dollars in thousands):
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TABLE 12
|  | YTD 2023
|  | NOI
Residential NOI: |  |
Same Store |  | $ | 1,291,576 |
Other Stabilized |  | 60,392 |
Development/Redevelopment |  | 24,256 |
Total Residential NOI |  | 1,376,224 |
Commercial NOI |  | 25,192 |
NOI from real estate assets sold or held for sale |  | 14,212 |
Total NOI generated by real estate assets |  | 1,415,628 |
Less NOI on encumbered assets |  | (66,572) |
NOI on unencumbered assets |  | $ | 1,349,056 |
Unencumbered NOI |  | 95 | %

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