Why AvalonBay Communities Stock Plunged 26% in the First Half of 2020

Shares of apartment-focused real estate investment trust (REIT) AvalonBay Communities (NYSE: AVB) fell 26% through the first six months of 2020 according to data from S&P Global Market Intelligence. The broader REIT sector, as measured by Vanguard Real Estate ETF, was down around 15%. There's some logic to AvalonBay's laggard performance.

AvalonBay owns apartments. Its focus is on the higher end of the industry, with properties often located in high-barrier-to-entry markets. It's also an active portfolio manager, selling older apartments to help fund acquisitions of newer locations or, very often, the costs of building units from the ground up. It is generally considered one of the better-run names in the apartment niche. But COVID-19 is a very real headwind. So far, the hit hasn't been too big a deal, with rising costs for cleaning being the main trouble spot. 

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Source Fool.com