Benjamin W. Schall
Chief Executive Officer and President at AvalonBay Communities
Thank you, Jason, and thank you, everyone, for joining us today. I'm here with Kevin O'Shea, our Chief Financial Officer; Matt Birenbaum, our Chief Investment Officer; and Sean Breslin, our Chief Operating Officer. Sean and I have some prepared remarks, and then we'll open the line for questions. Per our practice, we posted a presentation in conjunction with our earnings release, which we will reference on today's call.
I'd like to start today's call with an update on the four strategic priorities, we highlighted during our Investor Day last November. As summarized on Slide 4 of the earnings presentation, our organization has been laser focused on executing our plans in each one of these areas, confident that they will continue to deliver superior growth for shareholders.
First, as highlighted on Slide 5, we continue to make meaningful progress in transforming our operating model and driving both operating efficiencies and incremental revenue. Last November, we raised our target to $80 million of annual incremental NOI to come as a result of these operating initiatives. We are tracking on plan, including further deployments of AvalonConnect and our neighborhood operating model, as well as advancements in our utilization of AI. By year-end, we expect to add another $10 million, bringing our total achievement to $37 million towards our $80 million target, highlighting both our strong progress to date and the significant runway of future earnings we expect to deliver over the coming years.
Second, we continue to optimize our portfolio's future growth through proactive portfolio management, and our strategy to increase our allocation to the suburbs and our expansion regions as summarized on Slide 6. Our portfolio is now 73% suburban, up from 70% last year, and well positioned in the near term to benefit from steady demand and low levels of new supply, and in the long term, from shifting demographics, including aging millennials.
We also continue to make steady progress toward our expansion region target of 25%, having now reached a 10% allocation. This year, we sold almost $600 million of assets, all from our established regions, half urban and half suburban, and reallocated that capital predominantly to suburban assets in our expansion regions at a very attractive basis as we look to further optimize and diversify our portfolio for the future.
The third area that we detailed at our Investor Day was our unique development growth engine and our ability to consistently drive accretive external growth. As highlighted on Slide 7, our 2024 completions have meaningfully outperformed our original underwriting, achieving a 6.5% yield, or 50 basis points above pro forma, generating additional earnings growth and value creation. We've increased our planned development starts for this year to nearly $1.1 billion, with a projected untrended initial stabilized yield of 6.3% on these projects which we consider to be well within our strike zone of generating 100 basis points to 150 basis points of spread to both underlying cap rates and our cost of capital.
Looking forward, we believe there could be an attractive window to further leverage our development capabilities and our cost of capital advantage to capture an outsized share of what's likely to be a lower overall level of new starts in the industry, which brings me to our fourth strategic priority, ensuring continuous access to cost-effective capital to fuel future growth. As highlighted on Slide 8, our balance sheet is as strong as it's ever been, among the strongest in the REIT industry, and supported further by our recent forward equity activity, sourcing $850 million at an implied initial cost of approximately 5% to fund future accretive development.
We're committed to providing this type of follow-up to you at our Investor Day last year, and we're pleased to report out on the strong progress that we've made in each of these four strategic priorities over the last 12 months. We're confident these strategies will position AvalonBay for a continued superior growth in the quarters and years ahead. And as I transition to our Q3 results, I want to thank our 3,000 AvalonBay associates for their effort, collaboration and commitment to these strategic priorities and for delivering another strong quarter of results.
Slide 9 summarizes Q3 and year-to-date results and activities, with the headline being that we exceeded core FFO guidance for the quarter by $0.03 per share. We also started $450 million of new developments this quarter as part of our planned $1.1 billion of starts this year, a vintage of projects that should face less competition when they open for leasing in a couple of years.
Based on our continued operating momentum, we increased our full year core FFO guidance for 2024 for the third time this year to $11.04 per share, implying a peer-leading 3.9% core FFO growth rate as highlighted on Slide 10. For our same-store portfolio, we continue to expect same-store revenue growth of 3.5%, and we lowered the midpoint of our same-store operating expense estimate by 30 basis points to 4.5%, which resulted in an increase in our same-store NOI guidance to 3% for the full year 2024.
Sean will now speak to our performance in more detail, our momentum in Q4, and our building blocks as we head into 2025. Sean?