AvalonBay Communities Inc. AVB reported first-quarter 2016 funds from operations (“FFO”) per share of $2.07 that exceeded the Zacks Consensus Estimate by 2 cents. Also, FFO per share increased 10.1% from the prior-year quarter figure of $1.88. We expect the outperformance to lead to stock movement.Core FFO per share rose 12.6% year over year to $1.97 in the quarter. Results reflect a rise in net operating income (“NOI”) from newly developed and existing operating communities, together with business interruption insurance proceeds from the Edgewater casualty loss.Total revenue of this residential real estate investment trust (“REIT”) increased 14.9% year over year to around $508.5 million in the first quarter, surpassing the Zacks Consensus Estimate of $486 million.Quarter in DetailSame-store rental revenues improved 5.5% year over year, thanks to a 5.9% increase in average rental rates that offset the 0.4% decrease in economic occupancy. Same-store operating expenses climbed 0.1% year over year and consequently, same-store NOI rose 7.9% year over year to $264.1 million.LiquidityAs of Mar 31, 2016, AvalonBay had no borrowings outstanding under its $1.5 billion unsecured credit facility. The company had around $267.9 million in unrestricted cash and cash in escrow as of that date. Moreover, the company’s annualized net debt-to-core EBITDA for first-quarter 2016 was 5.0 times.OutlookFor second-quarter 2016, projected FFO per share is in the range of $2.07 to $2.13. Core FFO per share is guided in the range of $1.97 to $2.03. The Zacks Consensus Estimate for the quarter currently stands at $2.04.In ConclusionAvalonBay remains well poised for growth, aided by higher demand from household formation and favorable demographics. Yet, completions of a number of projects in its markets, leading to higher supply, keep us concerned.AvalonBay currently carries a Zacks Rank #3 (Hold). Investors interested in the residential REIT industry can consider some better-ranked stocks like Camden Property Trust CPT, Essex Property Trust Inc. ESS and Mid-America Apartment Communities Inc. MAA. All three stocks have a Zacks Rank #2 (Buy).Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AVALONBAY CMMTY (AVB): Free Stock Analysis Report MID-AMER APT CM (MAA): Free Stock Analysis Report CAMDEN PPTY TR (CPT): Free Stock Analysis Report ESSEX PPTY TR (ESS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research