MAA REPORTS FIRST QUARTER 2024 RESULTS - 01.05.24 - News

GERMANTOWN, Tenn., May 1, 2024

First Quarter 2024 Operating Results

Three months ended March 31,

2024

2023

Earnings per common share - diluted

ARIVA.DE Börsen-Geflüster

Kurse

Mid American Apartment

139,32 $

+0,80%

$

1.22

$

1.16

Funds from operations (FFO) per Share - diluted

$

2.41

$

2.31

Core FFO per Share - diluted

$

2.22

$

2.28

A reconciliation of Net income available for MAA common shareholders to FFO and Core FFO, and discussion of the components of FFO and Core FFO, can be found later in this release. FFO per Share – diluted and Core FFO per Share – diluted include diluted common shares and units.

Eric Bolton, Chairman and Chief Executive Officer, said, "Performance trends and Core FFO results for the first quarter were in line with our expectations reflecting the impact of new supply deliveries across a number of markets. We enter the busy summer leasing season well positioned with stable occupancy, high leasing traffic, low resident turnover, and strong collections performance. With continued solid demand and the resulting steady absorption of the new supply pipeline, we continue to believe that the decline in new supply deliveries expected late this year and into 2025 will fuel a strong and quick rebound in rent performance. MAA's investment-grade balance sheet is well positioned for both the near-term leasing conditions and to capture emerging new growth opportunities."

Highlights

During the first quarter of 2024, MAA's Same Store Portfolio produced growth in revenues of 1.4%, as compared to the same period in the prior year, with Average Effective Rent per Unit up 1.5% while capturing Average Physical Occupancy of 95.3%.
During the first quarter of 2024, MAA's Same Store Portfolio property operating expense increased by 5.4% and MAA's Same Store Portfolio Net Operating Income (NOI) decreased by 0.7%, in each case as compared to the same period in the prior year.
As of March 31, 2024, resident turnover remained historically low at 44.4% on a trailing twelve month basis driven by a record low level of move-outs associated with buying single family-homes of 12.9%.
As of the end of the first quarter of 2024, MAA had five communities under development, representing 1,970 units once complete, with a projected total cost of $647.3 million and an estimated $201.7 million remaining to be funded. During April 2024, MAA started construction on a 302-unit multifamily apartment community located in the Charlotte, North Carolina market with a projected total cost of approximately $102 million on land previously acquired through our pre-purchase development program.
Subsequent to the end of the first quarter of 2024, MAA closed on the acquisition of a land parcel located in the Phoenix, Arizona market through our pre-purchase development program with construction expected to begin in the second quarter of 2024 on a 345-unit multifamily apartment community.
As of the end of the first quarter of 2024, MAA had one recently completed development community and the two communities acquired during the fourth quarter of 2023 in lease-up. Two communities are expected to stabilize in the third quarter of 2024, and one is expected to stabilize in the fourth quarter of 2024.
In January 2024, MAA's operating partnership, Mid-America Apartments, L.P. (referred to as MAALP or the Operating Partnership), issued $350.0 million of 10-year unsecured senior notes at a coupon of 5.000% and an issue price of 99.019%.
MAA's balance sheet remains strong with a Net Debt/Adjusted EBITDAre ratio of 3.6x and $1.1 billion of combined cash and available capacity under MAALP's unsecured revolving credit facility as of March 31, 2024.

Same Store Portfolio Operating Results
To ensure comparable reporting with prior periods, the Same Store Portfolio includes properties that were owned by MAA and stabilized at the beginning of the previous year. Same Store Portfolio results for the three months ended March 31, 2024 as compared to the same period in the prior year are summarized below:

	Three months ended March 31, 2024 vs. 2023
	Revenues	Expenses	NOI	Average Effective Rent per Unit
Same Store Operating Growth	1.4 %	5.4 %	-0.7 %	1.5 %

A reconciliation of Net income available for MAA common shareholders to NOI, including Same Store NOI, and discussion of the components of NOI, can be found later in this release.

Same Store Portfolio operating statistics for the three months ended March 31, 2024, which were in line with prior guidance expectations, are summarized below:

	Three months ended March 31, 2024			March 31, 2024
	Average Effective Rent per Unit		Average Physical Occupancy	Resident Turnover
Same Store Operating Statistics	$	1,690	95.3 %	44.4 %

Same Store Portfolio lease pricing for new leases that were effective during the first quarter of 2024 was impacted by new supply pressures and typical first quarter seasonal factors. New lease pricing declined 6.2% during the first quarter of 2024, representing an 80-basis point improvement from the fourth quarter of 2023. The increase in renewal lease pricing remained steady, increasing 5.0%, representing a 20-basis point improvement from the fourth quarter of 2023. This in turn produced a decrease of 0.6% for both new and renewing lease pricing on a blended basis in the first quarter of 2024, representing a 100-basis point improvement from the fourth quarter of 2023. Through April 29, 2024, both new and renewal lease pricing for leases that were effective during April 2024 further improved 10-basis points compared to the first quarter of 2024, declining 6.1% and increasing 5.1%, respectively, resulting in a decrease of 0.4% for both new and renewing lease pricing on a blended basis, a 20-basis point improvement from the first quarter of 2024, while Average Physical Occupancy for April 2024 improved to 95.5%.

Development and Lease-up Activity
A summary of MAA's development communities under construction as of the end of the first quarter of 2024 is set forth below (dollars in thousands):

Units as of

Development Costs as of

Expected Project

Total

March 31, 2024

Completions By Year

Development

Expected

Spend

Expected

Projects ⁽¹⁾

Total

Delivered

Leased

Total

to Date

Remaining

2024

2025

5

1,970

458

243

$

647,250

$

445,572

$

201,678

3

2


⁽¹⁾	Three of the development projects are currently leasing.

During the first quarter of 2024, MAA funded $43.8 million of costs for current and planned projects, including predevelopment activities.

In April 2024, MAA started construction on a 302-unit multifamily apartment community located in the Charlotte, North Carolina market on land previously acquired through our pre-purchase development program. The development is expected to be completed in the third quarter of 2027 with an expected stabilization in the second quarter of 2028 and expected total cost of approximately $102 million.

In April 2024, MAA also closed on the acquisition of a land parcel located in the Phoenix, Arizona market through our pre-purchase development program with construction on a 345-unit multifamily apartment community expected to begin in the second quarter of 2024.

MAA expects to begin four to six multifamily development projects over the next 18 to 24 months including the two projects expected to start in the second quarter of 2024 discussed above.

A summary of the total units, physical occupancy and cost of MAA's lease-up communities as of the end of the first quarter of 2024 is set forth below (dollars in thousands):

Total

As of March 31, 2024

Lease-Up

Total

Physical

Spend

Projects ⁽¹⁾

Units

Occupancy

to Date

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