AvalonBay operates in 16 high barrier-to-entry markets characterized by a limited supply of new apartment homes and a high cost of single-family housing, leading to more favorable demand/supply fundamentals over the long-term.  Our strategy is to deeply penetrate these core markets through a broad range of products and services and an intense focus on our customer.  We continually assess our portfolio composition and make capital allocation decisions with a goal of achieving desired market concentrations and the highest risk-adjusted returns.  We operate in the following markets and our current concentration in each market is as follows.

Portfolio Overview - As of September 30, 2007