AvalonBay: Acquires Property For Immediate Release July 20, 1998 AVALON BAY COMMUNITIES ACQUIRES RESIDENTIAL PORTION OF PRUDENTIAL CENTER IN BOSTON FOR $130,000,000 AvalonBay Communities, Inc. (NYSE: AVB), today announced that it has purchased from The Prudential Insurance Company of America, the residential portion of the Prudential Center in Boston, Massachusetts, for $130,000,000. AvalonBay Communities, Inc. worked in partnership with Boston Properties, Inc. throughout the bidding process. On July 2, 1998, The Prudential Insurance Company of America announced the sale of the commercial property and a portion of the development rights associated with the Prudential Center to Boston Properties, Inc. The Prudential Center is a 23-acre mixed-use development located in the heart of Boston's "Back Bay" office and residential neighborhood. The commercial portion of the Prudential Center consists of two office buildings totaling 1.72 million net rentable square feet, a 477,000 net rentable square foot retail complex and a parking garage with 2,700 spaces. Approximately 4,000 people work at the Prudential Center and it is estimated that, on average, 40,000 people visit, shop, or travel through the Prudentia l Center every day. The Prudential Center Apartments contain 781 studio, one, two, and three-bedroom apartment homes located in three 27-story high rise buildings which were completed in 1968. Approximately 13,200 square feet of commercial space is located within two of the three towers. Each apartment home features parquet floors, fully applianced kitchens, cable access, ample closet space and one building offers balconies for 230 apartment homes. Amenities include common laundry facilities, a 24-hour attended lobby, disco unted health club affiliations, and all of the cultural, retail, office and restaurant access associated with the property's location in the heart of the Back Bay. Up to 676 parking spaces will be made available for the exclusive use of the apartment residents. The weighted average net square footage and leased rent, respectively, are 941 and $1,765 ($1.88 per net square foot). New leases signed in 1998 have averaged $2.12 per net square foot. The proj ected stabilized yield is 9.1%. The Prudential Center Apartments are located in the heart of Boston's "Back Bay" which is considered one of the most attractive business locations and affluent residential neighborhoods in Boston. Approximately 75% of Back Bay residents are renters and the average household income in the Back Bay is $83,823. The average condominium price in the Back Bay in 1997 was $370,000. AvalonBay now owns 2,150 apartment homes in seven communities in the Boston market which includes the Prudential Center Apartments and Longwood Towers in Brookline. Additionally, AvalonBay currently has a community of 204 apartment homes under construction and two communities totaling approximately 600 apartment homes in the entitlement process. Multi-Housing News recently ranked Boston third in its annual "Top Ten Apartment Markets" report. Richard L. Michaux, AvalonBay's Chief Executive Officer, said, "With one of the most prestigious addresses in the country, these apartments represent a unique opportunity for AvalonBay to acquire not just a landmark residential community in an extremely high barrier-to-entry market-but to acquire a community in a market that we expect will provide significant future earnings growth. This is the foundation of AvalonBay's strategy to build value for its stockholders." David Raszmann, Prudential Vice President in charge of the property, said, "We are very pleased to have completed this transaction with AvalonBay, one of the nation's premier apartment developers, owners and managers. The residents and the local community will certainly benefit from this new ownership." This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect", "anticipate", "estimate", "projected", "budgeted", and other similar expressions which are predictions of or indicate future events and trends and which do not relate solely to historical matters, including information concerning the Company's future FFO estimates, identify forward-looking statements. Reliance shou ld not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the control of the Company and may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results. Factors that impact the Company's ability to meet these forward-looking statements include, but are not limited to, the market accept ance of the Company's new development, local market conditions, the ability to achieve projected costs and other factors discussed periodically in the Company's reports filed with the Securities and Exchange Commission. AvalonBay is an equity REIT operating in the high barrier-to-entry markets of the United States. The Company, named the Property Management Company of the Year for 1996/1997 and Development Company of the Year for 1997/1998 by the National Association of Home Builders, owns 146 communities totaling 42,881 apartment homes in 29 distinct markets, of which 15 communities are under construction and 23 are or will be under reconstruction. In addition, the Company holds future development rights for 23 communit ies. For more information on AvalonBay, visit the Company's website at http://www.avalonbay.com. For additional information, please contact Richard L. Michaux, CEO, at (703) 317-4601 or Bryce Blair, Senior Vice President - Development & Acquisitions at (617) 847-1250. Copyright (c) 1998 AvalonBay Communities, Inc. All Rights Reserved End