915912--3/2/2009--AVALONBAY_COMMUNITIES

related topics

{investment, property, distribution}

{tax, income, asset}

{loan, real, estate}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{condition, economic, financial}

{stock, price, share}

{provision, law, control}

{cost, contract, operation}

{loss, insurance, financial}

{capital, credit, financial}

{acquisition, growth, future}

Unfavorable changes in market and economic conditions could hurt occupancy, rental rates, operating expenses, and the overall market value of our assets, including joint ventures and Fund investments. Changes in applicable laws, or noncompliance with applicable laws, could adversely affect our operations or expose us to liability. Short-term leases expose us to the effects of declining market rents. Competition could limit our ability to lease apartment homes or increase or maintain rents. Attractive investment opportunities may not be available, which could adversely affect our profitability. Capital and credit market conditions may continue to adversely affect our access to various sources of capital and/or the cost of capital, which could impact our business activities, dividends, earnings, and common stock price, among other things. Insufficient cash flow could affect our debt financing and create refinancing risk. Rising interest rates could increase interest costs and could affect the market price of our common stock. Bond financing and zoning compliance requirements could limit our income, restrict the use of communities and cause favorable financing to become unavailable. Failure to generate sufficient revenue or other liquidity needs could limit cash flow available for distributions to stockholders. The form, timing and/or amount of dividend distributions in future periods may vary and be impacted by economic and other considerations. We may in the future choose to pay dividends in our own stock, in which case stockholders may be required to pay tax in excess of the cash you receive. Debt financing may not be available and equity issuances could be dilutive to our stockholders. Difficulty of selling apartment communities could limit flexibility. Acquisitions may not yield anticipated results. Failure to succeed in new markets or in activities other than the development, ownership and operation of residential rental communities may have adverse consequences. Risks involved in real estate activity through joint ventures. Risks associated with an investment in and management of a discretionary investment fund A significant uninsured property or liability loss could have a material adverse effect on our financial condition and results of operations. We may incur costs and increased expenses to repair property damage resulting from inclement weather. We may incur costs due to environmental contamination or non-compliance. Failure to qualify as a REIT would cause us to be taxed as a corporation, which would significantly reduce funds available for distribution to stockholders. The ability of our stockholders to control our policies and effect a change of control of our company is limited by certain provisions of our charter and bylaws and by Maryland law.

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915912--3/2/2009--AVALONBAY_COMMUNITIES_INC