Avalon: News Release


 Avalon Bay Communities, Inc. 

              AVALON BAY COMMUNITIES ANNOUNCES $250 MILLION
     NOTES OFFERING, IMPROVED RATINGS AND LOWER CREDIT FACILITY PRICING 

For Immediate Release
Alexandria, Virginia
July 2, 1998

Avalon Bay Communities, Inc. (NYSE/PCX Symbol: AVB) announced today that the
Company priced a $250 million offering of senior unsecured notes under a shelf
registration statement that has been declared effective by the Securities and
Exchange Commission.

$100 million of the notes will bear interest at 6.50% payable semi-annually on
July 15 and January 15 and will mature on July 15, 2003. These five-year notes
were priced at 99.719% of par value to yield 6.566% to maturity or 115 basis
points over the five-year U.S. Treasury Note. 

$150 million of the notes will bear interest at 6.80% payable semi-annually on
July 15 and January 15 and will mature on July 15, 2006. These eight-year notes
were priced at 99.723% of par value to yield 6.845% to maturity or 131 basis
points over the U.S. Treasury Note.

The weighted average all-in interest rate on the $250 million senior unsecured
notes, taking into account the underwriting discounts, commissions and all
other anticipated issuance costs, will be approximately 6.86%.  The Company
will use the net proceeds of the offering of approximately $247.6 million to
reduce borrowings under its $600 million unsecured credit facility. The
offering is expected to close on July 7, 1998.

The Company also announced increased ratings from Standard and Poor's and
Moody's Investors Service.  Standard and Poor's increased the rating for the
Company's unsecured debt to BBB+ and to BBB for the Company's preferred stock. 
The ratings from Moody's Investors Service on these same securities were
increased to Baa1 and Baa2 , respectively.  As a result of these improved
ratings, the stated rate under the Company's unsecured credit facility
decreased by 0.15% to LIBOR + 0.60%.

This press release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of these securities in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.
Offering prospectuses may be obtained from PaineWebber Incorporated, 1285
Avenue of the Americas, New York, N.Y. 10019.

Avalon Bay is an equity REIT operating in high barrier-to-entry markets of the
United States.  The Company owns 146 communities totaling 42,074 apartment
homes in 29 distinct markets, of which 17 communities are under construction
and 24 are under redevelopment.  In addition, the Company holds future
development rights for 20 communities.  For more information on Avalon Bay,
visit the Company's website at http://www.avalonbay.com.  For additional
information, please contact Richard L. Michaux, CEO, at (703) 317-4602 or
Thomas J. Sargeant, CFO, at (703) 317-4635.

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, market demand, the effect of economic
conditions, the impact of competition and competitive pricing, changes in
construction scope or costs, the result of financing efforts, actual purchases
under agreement, the effect of the Company's accounting policies and other
risks detailed in the Company's Securities and Exchange Commission filings.


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