AvalonBay Communities, Inc. (NYSE:AVB) announced today that its Board of Directors declared a dividend on the Company's Common Stock (par value $0.01 per share) for the first quarter of 2008. The declared dividend represents a 5.0%, or $0.0425 per share, increase over the Company’s prior quarterly dividend of $0.85 per share. The Common Stock dividend is $0.8925 per share and is payable April 15, 2008 to all Common Stockholders of Record as of April 1, 2008.

In declaring the increased dividend, the Board of Directors evaluated the Company’s past performance and future prospects for earnings growth. Additional factors considered in determining the increase include current dividend distributions (both common and preferred dividends), the ratio of the current common dividend distribution to the Company’s Funds From Operations (FFO), the relationship of dividend distributions to taxable income, and expected growth in taxable income. Taxable income growth is not directly comparable to growth in FFO.

The Board of Directors also declared a dividend on the Series H Cumulative Redeemable Preferred Stock (par value $0.01 per share) for the first quarter of 2008. The Series H Cumulative Redeemable Preferred Stock dividend is $0.54375 per share and is payable June 16, 2008 to all Series H Stockholders of Record as of June 2, 2008.

Definition of a Non-GAAP Financial Measure

Funds From Operations (FFO) is determined based on a definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO is calculated by the Company as net income or loss computed in accordance with GAAP, adjusted for gains or losses on sales of previously depreciated operating communities, extraordinary gains or losses (as defined by GAAP), cumulative effect of a change in accounting principle and depreciation of real estate assets, including adjustments for unconsolidated partnerships and joint ventures. Management generally considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses related to dispositions of previously depreciated operating communities and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a company’s real estate between periods or as compared to different companies.

About AvalonBay Communities

As of December 31, 2007, the Company owned or held a direct or indirect ownership interest in 184 apartment communities containing 52,748 apartment homes in ten states and the District of Columbia, of which 21 communities were under construction and eight communities were 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, an S&P 500 company, may be found on the Company’s Web site at http://www.avalonbay.com.

Contacts:

AvalonBay Communities, Inc.
John Christie
Senior Director
Investor Relations & Research
703-317-4747