AvalonBay Communities Announces Joint Venture Activity.

Business Editors

ALEXANDRIA, Va.--(BUSINESS WIRE)--March 17, 2004

AvalonBay Communities, Inc. (NYSE/PCX:AVB) announced today the closing of a joint venture agreement in connection with the construction start of Avalon Chrystie Place I, a multifamily community located in New York, New York.

Avalon Chrystie Place I will offer 361 studio, one- and two-bedroom apartment homes, approximately 90,000 square feet of retail space and a 42,700 square foot community center.

Avalon Chrystie Place I is the first phase of a potential multi-phase development and is being developed by Chrystie Venture Partners ("CVP") I, LLC, a joint venture partnership between AvalonBay and the New York State Common Retirement Fund. AvalonBay holds a 20% equity interest in CVP I, LLC. AvalonBay has an option on the land for two additional phases, which if developed would comprise an additional 320 apartment homes and an additional 38,000 square feet of retail space. This development is taking place on formerly city-owned land. The apartments being created are part of Mayor Michael R. Bloomberg's "New Housing Marketplace: Creating Housing for the Next Generation" plan. This plan will facilitate the creation and preservation by the city of New York of 65,000 new homes and apartments citywide over the next five years.

Avalon Chrystie Place I, located in the Cooper Square Urban Renewal Area on Houston Street between Bowery and Chrystie Street, is conveniently located at the intersection of four lower Manhattan neighborhoods: NoLita, the East Village, the Lower East Side and Greenwich Village. The Sixth Avenue F and V subway lines are adjacent to the community, and the number 6 train station is also nearby, providing easy access to employment in east and west midtown, the financial district, downtown Brooklyn and along the East River. The immediate neighborhood includes New York University, one of the area's largest employers, as well as dining, shopping and entertainment venues.

Apartment home features will vary, but most will include kitchens with granite countertops and ceramic tile. Other living areas will include parquet floors. Washers and dryers will also be available in approximately half of the apartment homes. Residents will also enjoy many community amenities including a fully equipped fitness center, clubhouse, billiards room, conference room, storage and on-site convenience retail. The 42,700 square foot public community facility will be jointly operated by the YMCA and University Settlement and will include a 25-yard pool, gym and basketball court that will also be available to residents.

The total cost expected to complete construction of Avalon Chrystie Place I is approximately $149.9 million. Construction of Avalon Chrystie Place I will be partially funded through the issuance by the New York State Housing Finance Agency ("NYSHFA") of $117 million in variable rate, tax-exempt debt, $58.5 million of which closed in February 2004, with the remainder expected to close in the fourth quarter of 2004. Avalon Chrystie Place I was eligible for NYSHFA bond financing because 20% of the apartment homes are required to be affordable to households with incomes below 50% of the area median income. The joint venture will also receive tax abatements through a land lease arrangement with the Empire State Development Corporation that will replicate New York City's 421-a program.

Initial occupancy is expected in the third quarter of 2005, and construction completion is expected in the fourth quarter of 2005. The monthly average stabilized rent per home is expected to be in the range of $2,600 to $2,700.

AvalonBay Communities, Inc. has maintained a regional office in New York City since 1998 and has completed development of 19 communities with more than 5,600 apartment homes for a total construction cost of approximately $920 million in the greater New York Metropolitan area. Avalon Chrystie Place I marks the Company's first development community in Manhattan.

About AvalonBay Communities

AvalonBay Communities, Inc., headquartered in Alexandria, Virginia, currently owns or holds an ownership interest in 143 apartment communities containing 41,997 apartment homes in ten states and the District of Columbia, of which eleven communities are under construction and two communities are under reconstruction. AvalonBay is in the business of developing, redeveloping, acquiring and managing apartment communities in high barrier-to-entry markets of the United States. More information on AvalonBay may be found on AvalonBay's Web site at http://www.avalonbay.com.

This release 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. The forward-looking statements contained in this release are statements that involve risks and uncertainties, including, but not limited to, changes in the demand for apartment homes, the effects of economic conditions, the impact of competition and competitive pricing, the effects of the Company's accounting policies and other matters detailed 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, 2003 under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements." Because of these risks and uncertainties, the number of apartment homes, construction cost, anticipated stabilized rents, initial occupancy and completion dates described in this release may be different than currently anticipated by the Company.

Copyright (C) 2004 AvalonBay Communities, Inc. All Rights Reserved