GERMANTOWN, Tenn., Oct. 30,
2024 /PRNewswire/ -- Mid-America Apartment
Communities, Inc., or MAA (NYSE: MAA), today announced operating
results for the three months ended September
30, 2024.
Third Quarter 2024
Operating Results
|
|
Three months
ended
September 30,
|
|
|
Nine months
ended
September 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Earnings per common
share - diluted
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
3.07
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
(FFO) per Share - diluted
|
|
$
|
2.10
|
|
|
$
|
2.16
|
|
|
$
|
6.57
|
|
|
$
|
6.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per Share -
diluted
|
|
$
|
2.21
|
|
|
$
|
2.29
|
|
|
$
|
6.65
|
|
|
$
|
6.85
|
|
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, "We continue to see strong demand for
apartment housing, which is contributing to the steady absorption
of the high volume of new supply delivered in the third quarter,
which we believe has now peaked. Resident turnover is at
record low levels, lease renewal pricing is strong, occupancy is
steady, and collections also remain strong. We are confident
that in calendar year 2025 we will see a meaningful decline in the
amount of new supply impacting our portfolio, and we will enter a
new multi-year cycle with demand outpacing supply. The upside
opportunity within our current portfolio from these changing market
conditions, coupled with the growing contribution from our new
development and acquisitions pipeline, has MAA very well
positioned."
Highlights
- During the third quarter of 2024, MAA's Same Store Portfolio
captured strong Average Physical Occupancy of 95.7%, matching the
performance in the same period in the prior year. During the third
quarter of 2024, MAA's Same Store Portfolio produced flat revenue
growth, as compared to the same period in the prior year, with
Average Effective Rent per Unit down 0.4%, offset by a 2.6%
increase in other property revenues.
- During the third quarter of 2024, MAA's Same Store Portfolio
property operating expense increased by 3.0% and MAA's Same Store
Portfolio Net Operating Income (NOI) decreased by 1.7%, in each
case as compared to the same period in the prior year.
- As of September 30, 2024,
resident turnover remained historically low at 42.8% on a trailing
twelve month basis with a record low level of move-outs associated
with buying single family-homes.
- During the third quarter of 2024, MAA acquired a newly built
310-unit multifamily apartment community in initial lease-up
located in Orlando, Florida.
Subsequent to the end of the third quarter of 2024, MAA acquired a
386-unit multifamily community located in Dallas, Texas.
- Subsequent to the end of the third quarter of 2024, MAA closed
on the disposition of a 216-unit multifamily community located in
Charlotte, North Carolina.
- As of September 30, 2024, MAA had
eight communities under development, representing 2,762 units once
complete, with a projected total cost of $978.3 million and an estimated $367.9 million remaining to be funded. During the
third quarter of 2024, MAA started construction on a 306-unit
multifamily apartment community located in Richmond, Virginia. Also during the third
quarter of 2024, MAA agreed to finance a third party's development
of a 239-unit multifamily apartment community currently under
construction located in Charlotte, North
Carolina. During the third quarter of 2024, MAA completed
the development of Novel Daybreak, located in the Salt Lake City, Utah market.
- As of September 30, 2024, MAA had
two recently completed development communities and three recently
acquired communities in lease-up. Two communities are expected to
stabilize in the fourth quarter of 2024, one is expected to
stabilize in the first quarter of 2025 and two are expected to
stabilize in the second quarter of 2025. During the third quarter
of 2024, MAA completed the lease-up of MAA Central Avenue, located
in Phoenix, Arizona.
- MAA's balance sheet remains strong with a Net Debt/Adjusted
EBITDAre ratio of 3.9x and $805.7
million of combined cash and available capacity under
MAALP's unsecured revolving credit facility as of September 30, 2024. MAALP refers to Mid-America
Apartments, L.P., which is MAA's operating partnership.
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 and nine months ended September 30, 2024 as compared to the same
periods in the prior year are summarized below:
|
|
Three months ended
September 30, 2024 vs. 2023
|
|
Nine months ended
September 30, 2024 vs. 2023
|
|
|
Revenues
|
|
Expenses
|
|
NOI
|
|
|
Average Effective
Rent per Unit
|
|
Revenues
|
|
Expenses
|
|
NOI
|
|
|
Average Effective
Rent per Unit
|
Same Store Operating
Growth
|
|
0.0 %
|
|
3.0 %
|
|
|
(1.7)
|
%
|
|
(0.4) %
|
|
0.7 %
|
|
4.0 %
|
|
|
(1.1)
|
%
|
|
0.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and nine
months ended September 30, 2024 are
summarized below:
|
|
Three months ended
September 30, 2024
|
|
Nine months ended
September 30, 2024
|
|
September 30,
2024
|
|
|
Average
Effective Rent
per Unit
|
|
|
Average Physical
Occupancy
|
|
Average
Effective Rent
per Unit
|
|
|
Average Physical
Occupancy
|
|
Resident
Turnover
|
Same Store Operating
Statistics
|
|
$
|
1,691
|
|
|
95.7 %
|
|
$
|
1,690
|
|
|
95.5 %
|
|
42.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store Portfolio lease pricing for new leases that were
effective during the third quarter of 2024 declined 5.4%, while
Same Store Portfolio lease pricing for renewing leases that were
effective during the third quarter of 2024 increased 4.1%,
producing a decrease of 0.2% for both new and renewing lease
pricing on a blended basis in the third quarter of 2024 as compared
to the prior lease.
Same Store Portfolio lease pricing for both new and renewing
leases effective during the nine months ended September 30,
2024, on a blended basis, declined 0.2% as compared to the prior
lease, driven by a 5.5% decrease for leases to new move-in
residents, partially offset by a 4.5% increase for renewing
leases.
Brad Hill, President and Chief
Investment Officer, said, "Despite the record level of new
apartment deliveries in many of our markets, we are encouraged by
the momentum we are beginning to see, and as we approach the slower
winter leasing season, where only 16% of our leases are set to
expire, our portfolio is well positioned. Through
October 28th, our 60-day exposure
(which represents all current vacant units plus all notices to
vacate over the next 60 days) at 6.3% is the lowest level we've
seen in more than five years, our fourth quarter sequential
seasonal deceleration in blended pricing should be better than
previous years with October blends relatively consistent with the
prior month, and our average physical occupancy is stable at
95.4%. Additionally, our recent acquisitions and our record,
under-construction, development pipeline of nearly $1 billion are expected to provide continued,
incremental earnings growth as we enter a multi-year period where
the delivery of new apartment supply is poised to decline."
Acquisition and Disposition Activity
In September 2024, MAA acquired a
310-unit multifamily community currently in lease-up and located in
Orlando, Florida for approximately
$84 million.
In October 2024, MAA acquired a
386-unit multifamily community located in Dallas, Texas for approximately $106 million and closed on the disposition of a
216-unit multifamily community located in Charlotte, North Carolina for net proceeds of
approximately $39 million.
Development and Lease-up Activity
A summary of MAA's development communities under construction as
of the end of the third quarter of 2024 is set forth below (dollars
in thousands):
|
|
|
Units as
of
|
|
|
Development Costs as
of
|
|
|
Expected
Project
|
|
Total
|
|
|
September 30,
2024
|
|
|
September 30,
2024
|
|
|
Completions By
Year
|
|
Development
|
|
|
|
|
|
|
|
|
|
|
|
Expected
|
|
|
Spend
|
|
|
Expected
|
|
|
|
|
Projects
(1)
|
|
|
Total
|
|
|
Delivered
|
|
|
Leased
|
|
|
Total
|
|
|
to
Date
|
|
|
Remaining
|
|
|
2024
|
|
|
2025
|
|
|
2026
|
|
|
2027
|
|
|
8
|
|
|
|
2,762
|
|
|
|
506
|
|
|
|
356
|
|
|
$
|
978,300
|
|
|
$
|
610,370
|
|
|
$
|
367,930
|
|
|
|
2
|
|
|
|
2
|
|
|
|
3
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Three of the
development projects are currently
leasing.
|
During the third quarter of 2024, MAA funded approximately
$167 million of costs for current and
planned projects, including predevelopment activities.
In July 2024, MAA agreed to
finance a third party's development of a 239-unit multifamily
apartment community currently under construction located in
Charlotte, North Carolina.
This development is expected to deliver its first units in the
third quarter of 2025, to be completed in the first quarter of 2026
and to reach stabilization in the fourth quarter of 2026 at a total
cost of approximately $112
million. MAA has the option to purchase the
development once it is stabilized.
In September 2024, MAA started
construction on a 306-unit multifamily apartment community located
in Richmond, Virginia on a land
parcel acquired by MAA in August 2024. The development is
expected to deliver its first units in the first quarter of 2027,
to be completed in the third quarter of 2027 and to reach
stabilization in the first quarter of 2028 at a total cost of
approximately $100 million.
A summary of the total units, physical occupancy and cost of
MAA's lease-up communities as of the end of the third quarter of
2024 is set forth below (dollars in thousands):
Total
|
|
|
As of
September 30, 2024
|
|
Lease-Up
|
|
|
Total
|
|
|
Physical
|
|
|
Spend
|
|
Projects
(1)
|
|
|
Units
|
|
|
Occupancy
|
|
|
to
Date
|
|
|
5
|
|
|
|
1,708
|
|
|
|
76.2
|
%
|
|
$
|
457,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Two of the lease-up
projects are expected to stabilize in the fourth quarter of 2024,
one in the first quarter of 2025 and two in the second quarter of
2025.
|
Property Redevelopment and Repositioning Activity
A summary of MAA's interior redevelopment program as of the end
of the third quarter of 2024 is set forth below:
|
|
As of
September 30, 2024
|
|
|
|
|
Units
|
|
|
Average
Cost
|
|
|
Increase in
Average
|
|
|
|
|
Completed
|
|
|
per
Unit
|
|
|
Effective Rent per
Unit
|
|
|
|
|
YTD
|
|
|
YTD
|
|
|
YTD
|
|
|
Redevelopment
|
|
|
4,535
|
|
|
$
|
6,406
|
|
|
$
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2024, MAA had completed installation of
Smart Home technology (unit entry locks, mobile control of lights
and thermostat and leak monitoring) in over 94,000 units across its
apartment community portfolio providing an increase in Average
Effective Rent per Unit of approximately $25 since the initiative began during the first
quarter of 2019.
During the third quarter of 2024, MAA continued its property
repositioning program to upgrade and reposition the amenity and
common areas at select apartment communities for higher and above
market rent growth after projects are completed and units are fully
repriced. For the nine months ended September 30, 2024, MAA
spent $1.7 million on this
program. Under this program, MAA started six projects
during the third quarter of 2024.
Capital Expenditures
A summary of MAA's capital expenditures and Funds Available for
Distribution (FAD) for the three and nine months ended September 30, 2024 and 2023 is set forth below
(dollars in millions, except per Share data):
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Core FFO attributable
to common shareholders and unitholders
|
|
$
|
264.8
|
|
|
$
|
274.9
|
|
|
$
|
797.6
|
|
|
$
|
820.4
|
|
Recurring capital
expenditures
|
|
|
(33.6)
|
|
|
|
(36.4)
|
|
|
|
(88.8)
|
|
|
|
(85.4)
|
|
Core Adjusted FFO (Core
AFFO) attributable to common shareholders and
unitholders
|
|
|
231.2
|
|
|
|
238.5
|
|
|
|
708.8
|
|
|
|
735.0
|
|
Redevelopment, revenue
enhancing, commercial and other capital expenditures
|
|
|
(60.1)
|
|
|
|
(47.5)
|
|
|
|
(145.8)
|
|
|
|
(156.3)
|
|
FAD attributable to
common shareholders and unitholders
|
|
$
|
171.1
|
|
|
$
|
191.0
|
|
|
$
|
563.0
|
|
|
$
|
578.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per Share -
diluted
|
|
$
|
2.21
|
|
|
$
|
2.29
|
|
|
$
|
6.65
|
|
|
$
|
6.85
|
|
Core AFFO per Share -
diluted
|
|
$
|
1.93
|
|
|
$
|
1.99
|
|
|
$
|
5.91
|
|
|
$
|
6.14
|
|
A reconciliation of Net income available for MAA common
shareholders to FFO, Core FFO, Core AFFO and FAD, and discussion of
the components of FFO, Core FFO, Core AFFO and FAD, can be found
later in this release.
Balance Sheet and Financing Activities
As of September 30, 2024, MAA had $805.7 million of combined cash and available
capacity under MAALP's unsecured revolving credit facility.
Dividends and distributions paid on shares of common stock and
noncontrolling interests during the third quarter of 2024 were
$176.3 million, as compared to
$167.8 million for the same period in
the prior year.
Balance sheet highlights as of September
30, 2024 are summarized below (dollars in billions):
Total debt to
adjusted
total assets (1)
|
|
Net
Debt/Adjusted
EBITDAre (2)
|
|
Total debt
outstanding
|
|
|
Average
effective
interest rate
|
|
Fixed rate debt as a
%
of total debt
|
|
Total debt
average
years to maturity
|
|
28.7 %
|
|
3.9x
|
|
$
|
4.9
|
|
|
3.8 %
|
|
90.0 %
|
|
|
7.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As defined in the
covenants for the bonds issued by MAALP.
|
(2)
|
Adjusted
EBITDAre is calculated for the trailing twelve month period
ended September 30, 2024.
|
A reconciliation of Unsecured notes payable and Secured notes
payable to Net Debt and a reconciliation of Net income to Adjusted
EBITDAre, along with discussion of the components of Net
Debt and Adjusted EBITDAre, can be found later in this
release.
123rd Consecutive Quarterly Common Dividend Declared
MAA declared its 123rd consecutive quarterly common dividend,
which will be paid on October 31,
2024 to holders of record on October
15, 2024. The current annual dividend rate is $5.88 per common share. The timing and amount of
future dividends will depend on actual cash flows from operations,
MAA's financial condition, capital requirements, the annual
distribution requirements under the REIT provisions of the Internal
Revenue Code of 1986 and other factors as MAA's Board of Directors
deems relevant. MAA's Board of Directors may modify the dividend
policy from time to time.
2024 Earnings and Same Store Portfolio Guidance
MAA is updating its prior 2024 guidance for Earnings per
diluted common share, Core FFO per diluted Share, Core AFFO per
diluted Share and Same Store performance. MAA expects to
update its 2024 Earnings per diluted common share, Core FFO per
diluted Share and Core AFFO per diluted Share guidance on a
quarterly basis.
FFO, Core FFO and Core AFFO are non-GAAP financial measures.
Acquisition and disposition activity materially affects
depreciation and capital gains or losses, which combined, generally
represent the majority of the difference between Net income
available for common shareholders and FFO. As discussed in the
definitions of non-GAAP financial measures found later in this
release, MAA's definition of FFO is in accordance with the National
Association of Real Estate Investment Trusts', or NAREIT's,
definition, and Core FFO represents FFO as adjusted for items that
are not considered part of MAA's core business operations. MAA
believes that Core FFO is helpful in understanding operating
performance in that Core FFO excludes not only depreciation expense
of real estate assets and certain other non-routine items, but it
also excludes certain items that by their nature are not comparable
over periods and therefore tend to obscure actual operating
performance.
2024
Guidance
|
|
Previous
Range
|
|
Previous
Midpoint
|
|
Revised
Range
|
|
Revised
Midpoint
|
Earnings:
|
|
Full Year
2024
|
|
Full Year
2024
|
|
Full Year
2024
|
|
Full Year
2024
|
Earnings per common
share - diluted
|
|
$4.37 to
$4.65
|
|
$4.51
|
|
$4.45 to
$4.61
|
|
$4.53
|
Core FFO per Share -
diluted
|
|
$8.74 to
$9.02
|
|
$8.88
|
|
$8.80 to
$8.96
|
|
$8.88
|
Core AFFO per Share -
diluted
|
|
$7.78 to
$8.06
|
|
$7.92
|
|
$7.84 to
$8.00
|
|
$7.92
|
|
|
|
|
|
|
|
|
|
MAA Same Store
Portfolio:
|
|
|
|
|
|
|
|
|
Property revenue
growth
|
|
0.15% to
1.15%
|
|
0.65 %
|
|
0.25% to
0.75%
|
|
0.50 %
|
Property operating
expense growth
|
|
3.75% to
4.75%
|
|
4.25 %
|
|
3.25% to
4.25%
|
|
3.75 %
|
NOI growth
|
|
-2.50% to
-0.10%
|
|
-1.30 %
|
|
-1.90% to
-0.70%
|
|
-1.30 %
|
MAA expects Core FFO for the fourth quarter of 2024 to be
in the range of $2.15 to $2.31
per diluted Share, or $2.23 per
diluted Share at the midpoint. The projected difference between
Core FFO per diluted Share for the third quarter of 2024 to the
midpoint of MAA's guidance for the fourth quarter of 2024 is
summarized below:
|
|
Core FFO per diluted
Share
|
|
Q3 2024 reported
results
|
|
$
|
2.21
|
|
Same Store
Revenues
|
|
|
(0.03)
|
|
Same Store
Expenses
|
|
|
0.07
|
|
Non-Same Store NOI
(1)
|
|
|
0.01
|
|
General and
administrative expenses
|
|
|
(0.01)
|
|
Interest expense and
Other non-operating (expense) income
|
|
|
(0.02)
|
|
Q4 2024 guidance
midpoint
|
|
$
|
2.23
|
|
|
|
(1)
|
Non-Same Store NOI
results for the third quarter of 2024 included $0.03 of
storm-related clean-up costs. Guidance for the fourth quarter
of 2024 includes $0.02 to $0.03 of projected storm costs to be
reflected in Non-Same Store NOI.
|
MAA does not forecast Earnings per diluted common share on a
quarterly basis as MAA generally cannot predict the timing of
forecasted acquisition and disposition activity within a particular
quarter (rather than during the course of the full year).
Additional details and guidance items are provided in the
Supplemental Data to this release.
Supplemental Material and Conference Call
Supplemental Data to this release can be found on the "For
Investors" page of the MAA website at www.maac.com. MAA will host a
conference call to further discuss third quarter results on
October 31, 2024, at 9:00 AM Central Time. The conference call-in
number is (800) 715-9871. You may also join the live webcast of the
conference call by accessing the "For Investors" page of the MAA
website at www.maac.com. MAA's filings with the Securities and
Exchange Commission (SEC) are filed under the registrant names of
Mid-America Apartment Communities, Inc. and Mid-America Apartments,
L.P.
About MAA
MAA, an S&P 500 company, is a real estate investment trust
(REIT) focused on delivering full-cycle and superior investment
performance for shareholders through the ownership, management,
acquisition, development and redevelopment of quality apartment
communities primarily in the Southeast, Southwest and Mid-Atlantic
regions of the United States. As
of September 30, 2024, MAA had ownership interest in 104,469
apartment units, including communities currently in development,
across 16 states and the District of
Columbia. For further details, please visit the MAA website
at www.maac.com or contact Investor Relations at
investor.relations@maac.com, or via mail at MAA, 6815 Poplar Ave.,
Suite 500, Germantown, TN 38138,
Attn: Investor Relations.
Forward-Looking Statements
Sections of this release contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, with respect to our expectations for future periods.
Forward-looking statements do not discuss historical fact, but
instead include statements related to expectations, projections,
intentions or other items related to the future. Such
forward-looking statements include, without limitation, statements
regarding expected operating performance and results, property
stabilizations, property acquisition and disposition activity,
joint venture activity, development and renovation activity and
other capital expenditures, and capital raising and financing
activity, as well as lease pricing, revenue and expense growth,
occupancy, interest rate and other economic expectations. Words
such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "forecasts," "projects," "assumes," "will,"
"may," "could," "should," "budget," "target," "outlook,"
"proforma," "opportunity," "guidance" and variations of such words
and similar expressions are intended to identify such
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, as
described below, which may cause our actual results, performance or
achievements to be materially different from the results of
operations, financial conditions or plans expressed or implied by
such forward-looking statements. Although we believe that the
assumptions underlying the forward-looking statements contained
herein are reasonable, any of the assumptions could be inaccurate,
and therefore such forward-looking statements included in this
release may not prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as
a representation by us or any other person that the results or
conditions described in such statements or our objectives and plans
will be achieved.
The following factors, among others, could cause our actual
results, performance or achievements to differ materially from
those expressed or implied in the forward-looking statements:
- inability to generate sufficient cash flows due to unfavorable
economic and market conditions, changes in supply and/or demand,
competition, uninsured losses, changes in tax and housing laws, or
other factors;
- exposure to risks inherent in investments in a single industry
and sector;
- adverse changes in real estate markets, including, but not
limited to, the extent of future demand for multifamily units in
our significant markets, barriers of entry into new markets which
we may seek to enter in the future, limitations on our ability to
increase or collect rental rates, competition, our ability to
identify and consummate attractive acquisitions or development
projects on favorable terms, our ability to consummate any planned
dispositions in a timely manner on acceptable terms, and our
ability to reinvest sale proceeds in a manner that generates
favorable returns;
- failure of development communities to be completed within
budget and on a timely basis, if at all, to lease-up as anticipated
or to achieve anticipated results;
- unexpected capital needs;
- material changes in operating costs, including real estate
taxes, utilities and insurance costs, due to inflation and other
factors;
- inability to obtain appropriate insurance coverage at
reasonable rates, or at all, losses due to uninsured risks,
deductibles and self-insured retentions, or losses from
catastrophes in excess of coverage limits;
- ability to obtain financing at favorable rates, if at all, or
refinance existing debt as it matures;
- level and volatility of interest or capitalization rates or
capital market conditions;
- the effect of any rating agency actions on the cost and
availability of new debt financing;
- the impact of adverse developments affecting the U.S. or global
banking industry, including bank failures and liquidity concerns,
which could cause continued or worsening economic and market
volatility, and regulatory responses thereto;
- significant change in the mortgage financing market or other
factors that would cause single-family housing or other alternative
housing options, either as an owned or rental product, to become a
more significant competitive product;
- ability to continue to satisfy complex rules in order to
maintain our status as a REIT for federal income tax purposes, the
ability of MAALP to satisfy the rules to maintain its status as a
partnership for federal income tax purposes, the ability of our
taxable REIT subsidiaries to maintain their status as such for
federal income tax purposes, and our ability and the ability of our
subsidiaries to operate effectively within the limitations imposed
by these rules;
- inability to attract and retain qualified personnel;
- cyber liability or potential liability for breaches of our or
our service providers' information technology systems, or business
operations disruptions;
- potential liability for environmental contamination;
- changes in the legal requirements we are subject to, or the
imposition of new legal requirements, that adversely affect our
operations;
- extreme weather and natural disasters;
- disease outbreaks and other public health events and measures
that are taken by federal, state, and local governmental
authorities in response to such outbreaks and events;
- impact of climate change on our properties or operations;
- legal proceedings or class action lawsuits;
- impact of reputational harm caused by negative press or social
media postings of our actions or policies, whether or not
warranted;
- compliance costs associated with numerous federal, state and
local laws and regulations; and
- other risks identified in this release and in reports we file
with the SEC or in other documents that we publicly
disseminate.
New factors may also emerge from time to time that could have a
material adverse effect on our business. Except as required by law,
we undertake no obligation to publicly update or revise
forward-looking statements contained in this release to reflect
events, circumstances or changes in expectations after the date of
this release.
FINANCIAL
HIGHLIGHTS
|
|
Dollars in
thousands, except per share data
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Rental and other
property revenues
|
|
$
|
551,126
|
|
|
$
|
542,042
|
|
|
$
|
1,641,183
|
|
|
$
|
1,606,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for MAA common shareholders
|
|
$
|
114,273
|
|
|
$
|
109,810
|
|
|
$
|
358,131
|
|
|
$
|
389,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total NOI
(1)
|
|
$
|
339,565
|
|
|
$
|
342,819
|
|
|
$
|
1,026,024
|
|
|
$
|
1,029,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
3.07
|
|
|
$
|
3.34
|
|
Diluted
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
3.07
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per Share - diluted: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(1)
|
|
$
|
2.10
|
|
|
$
|
2.16
|
|
|
$
|
6.57
|
|
|
$
|
6.85
|
|
Core FFO
(1)
|
|
$
|
2.21
|
|
|
$
|
2.29
|
|
|
$
|
6.65
|
|
|
$
|
6.85
|
|
Core AFFO
(1)
|
|
$
|
1.93
|
|
|
$
|
1.99
|
|
|
$
|
5.91
|
|
|
$
|
6.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
common share
|
|
$
|
1.47
|
|
|
$
|
1.40
|
|
|
$
|
4.41
|
|
|
$
|
4.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends/Core FFO
(diluted) payout ratio
|
|
|
66.5
|
%
|
|
|
61.1
|
%
|
|
|
66.3
|
%
|
|
|
61.3
|
%
|
Dividends/Core AFFO
(diluted) payout ratio
|
|
|
76.2
|
%
|
|
|
70.4
|
%
|
|
|
74.6
|
%
|
|
|
68.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
|
$
|
42,726
|
|
|
$
|
36,651
|
|
|
$
|
124,352
|
|
|
$
|
110,655
|
|
Mark-to-market debt
adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25
|
|
Debt discount and debt
issuance cost amortization
|
|
|
(1,514)
|
|
|
|
(1,501)
|
|
|
|
(4,569)
|
|
|
|
(4,562)
|
|
Capitalized
interest
|
|
|
5,048
|
|
|
|
3,182
|
|
|
|
12,188
|
|
|
|
9,065
|
|
Total interest
incurred
|
|
$
|
46,260
|
|
|
$
|
38,332
|
|
|
$
|
131,971
|
|
|
$
|
115,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
principal on notes payable
|
|
$
|
—
|
|
|
$
|
124
|
|
|
$
|
—
|
|
|
$
|
854
|
|
|
|
(1)
|
A reconciliation of the
following items and discussion of their respective components can
be found later in this release: (i) Net income available for MAA
common shareholders to NOI; and (ii) Net income available for MAA
common shareholders to FFO, Core FFO and Core AFFO.
|
(2)
|
See the "Share and Unit
Data" section for additional information.
|
Dollars in
thousands, except share price
|
|
|
|
|
|
|
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
Gross Assets
(1)
|
|
$
|
16,984,512
|
|
|
$
|
16,349,193
|
|
Gross Real Estate
Assets (1)
|
|
$
|
16,733,158
|
|
|
$
|
16,089,909
|
|
Total debt
|
|
$
|
4,875,968
|
|
|
$
|
4,540,225
|
|
Common shares and units
outstanding
|
|
|
119,955,843
|
|
|
|
119,838,096
|
|
Share price
|
|
$
|
158.90
|
|
|
$
|
134.46
|
|
Book equity
value
|
|
$
|
6,154,112
|
|
|
$
|
6,299,122
|
|
Market equity
value
|
|
$
|
19,060,983
|
|
|
$
|
16,113,430
|
|
Net Debt/Adjusted
EBITDAre (2)
|
|
3.9x
|
|
|
3.6x
|
|
|
|
(1)
|
A reconciliation of
Total assets to Gross Assets and Real estate assets, net, to Gross
Real Estate Assets, along with discussion of their components, can
be found later in this release.
|
(2)
|
Adjusted
EBITDAre is calculated for the trailing twelve month period
for each date presented. A reconciliation of the following items
and discussion of their respective components can be found later in
this release: (i) Unsecured notes payable and Secured notes payable
to Net Debt; and (ii) Net income to EBITDA, EBITDAre and
Adjusted EBITDAre.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Dollars in
thousands, except per share data (Unaudited)
|
|
Three months
ended
September 30,
|
|
|
Nine months
ended
September 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and other
property revenues
|
|
$
|
551,126
|
|
|
$
|
542,042
|
|
|
$
|
1,641,183
|
|
|
$
|
1,606,221
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding real estate taxes and insurance
|
|
|
134,475
|
|
|
|
122,660
|
|
|
|
378,887
|
|
|
|
347,868
|
|
Real estate taxes and
insurance
|
|
|
77,086
|
|
|
|
76,563
|
|
|
|
236,272
|
|
|
|
228,491
|
|
Depreciation and
amortization
|
|
|
146,722
|
|
|
|
146,702
|
|
|
|
434,764
|
|
|
|
424,175
|
|
Total property
operating expenses
|
|
|
358,283
|
|
|
|
345,925
|
|
|
|
1,049,923
|
|
|
|
1,000,534
|
|
Property management
expenses
|
|
|
17,265
|
|
|
|
16,298
|
|
|
|
54,461
|
|
|
|
50,317
|
|
General and
administrative expenses
|
|
|
12,728
|
|
|
|
13,524
|
|
|
|
42,444
|
|
|
|
43,329
|
|
Interest
expense
|
|
|
42,726
|
|
|
|
36,651
|
|
|
|
124,352
|
|
|
|
110,655
|
|
Loss on sale of
depreciable real estate assets
|
|
|
—
|
|
|
|
75
|
|
|
|
25
|
|
|
|
61
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(54)
|
|
Other non-operating
expense (income)
|
|
|
1,678
|
|
|
|
16,493
|
|
|
|
(2,604)
|
|
|
|
(3,966)
|
|
Income before income
tax (expense) benefit
|
|
|
118,446
|
|
|
|
113,076
|
|
|
|
372,582
|
|
|
|
405,345
|
|
Income tax (expense)
benefit
|
|
|
(670)
|
|
|
|
209
|
|
|
|
(3,485)
|
|
|
|
(3,596)
|
|
Income from continuing
operations before real estate joint venture activity
|
|
|
117,776
|
|
|
|
113,285
|
|
|
|
369,097
|
|
|
|
401,749
|
|
Income from real
estate joint venture
|
|
|
454
|
|
|
|
447
|
|
|
|
1,405
|
|
|
|
1,214
|
|
Net income
|
|
|
118,230
|
|
|
|
113,732
|
|
|
|
370,502
|
|
|
|
402,963
|
|
Net income
attributable to noncontrolling interests
|
|
|
3,035
|
|
|
|
3,000
|
|
|
|
9,605
|
|
|
|
10,633
|
|
Net income available
for shareholders
|
|
|
115,195
|
|
|
|
110,732
|
|
|
|
360,897
|
|
|
|
392,330
|
|
Dividends to MAA
Series I preferred shareholders
|
|
|
922
|
|
|
|
922
|
|
|
|
2,766
|
|
|
|
2,766
|
|
Net income available
for MAA common shareholders
|
|
$
|
114,273
|
|
|
$
|
109,810
|
|
|
$
|
358,131
|
|
|
$
|
389,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
3.07
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
3.07
|
|
|
$
|
3.34
|
|
SHARE AND UNIT
DATA
|
|
Shares and units in
thousands
|
|
Three months
ended
September 30,
|
|
|
Nine months
ended
September 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Net Income Shares
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares - basic
|
|
|
116,820
|
|
|
|
116,633
|
|
|
|
116,758
|
|
|
|
116,479
|
|
Effect of dilutive
securities
|
|
|
—
|
|
|
|
78
|
|
|
|
—
|
|
|
|
134
|
|
Weighted average
common shares - diluted
|
|
|
116,820
|
|
|
|
116,711
|
|
|
|
116,758
|
|
|
|
116,613
|
|
Funds From
Operations Shares And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - basic
|
|
|
119,900
|
|
|
|
119,787
|
|
|
|
119,865
|
|
|
|
119,635
|
|
Weighted average
common shares and units - diluted
|
|
|
119,954
|
|
|
|
119,833
|
|
|
|
119,919
|
|
|
|
119,683
|
|
Period End Shares
And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares at
September 30,
|
|
|
116,880
|
|
|
|
116,687
|
|
|
|
116,880
|
|
|
|
116,687
|
|
Operating Partnership
units at September 30,
|
|
|
3,076
|
|
|
|
3,148
|
|
|
|
3,076
|
|
|
|
3,148
|
|
Total common shares
and units at September 30,
|
|
|
119,956
|
|
|
|
119,835
|
|
|
|
119,956
|
|
|
|
119,835
|
|
|
|
(1)
|
For additional
information on the calculation of diluted common shares and
earnings per common share, please refer to the Notes to the
Condensed Consolidated Financial Statements in MAA's Quarterly
Report on Form 10-Q for the quarterly period ended
September 30, 2024, expected to be filed with the SEC on or
about October 31, 2024.
|
CONSOLIDATED BALANCE
SHEETS
|
|
Dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
Assets
|
|
|
|
|
|
|
Real estate
assets:
|
|
|
|
|
|
|
Land
|
|
$
|
2,085,464
|
|
|
$
|
2,031,403
|
|
Buildings and
improvements and other
|
|
|
13,956,601
|
|
|
|
13,515,949
|
|
Development and
capital improvements in progress
|
|
|
499,619
|
|
|
|
385,405
|
|
|
|
|
16,541,684
|
|
|
|
15,932,757
|
|
Less: Accumulated
depreciation
|
|
|
(5,217,893)
|
|
|
|
(4,864,690)
|
|
|
|
|
11,323,791
|
|
|
|
11,068,067
|
|
Undeveloped
land
|
|
|
73,861
|
|
|
|
73,861
|
|
Investment in real
estate joint venture
|
|
|
41,693
|
|
|
|
41,977
|
|
Real estate assets,
net
|
|
|
11,439,345
|
|
|
|
11,183,905
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
50,232
|
|
|
|
41,314
|
|
Restricted
cash
|
|
|
13,829
|
|
|
|
13,777
|
|
Other assets
|
|
|
237,525
|
|
|
|
245,507
|
|
Assets held for
sale
|
|
|
15,321
|
|
|
|
—
|
|
Total
assets
|
|
$
|
11,756,252
|
|
|
$
|
11,484,503
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Unsecured notes
payable
|
|
$
|
4,515,733
|
|
|
$
|
4,180,084
|
|
Secured notes
payable
|
|
|
360,235
|
|
|
|
360,141
|
|
Accrued expenses and
other liabilities
|
|
|
726,172
|
|
|
|
645,156
|
|
Total
liabilities
|
|
|
5,602,140
|
|
|
|
5,185,381
|
|
|
|
|
|
|
|
|
Redeemable common
stock
|
|
|
22,518
|
|
|
|
19,167
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
9
|
|
|
|
9
|
|
Common
stock
|
|
|
1,166
|
|
|
|
1,168
|
|
Additional paid-in
capital
|
|
|
7,413,674
|
|
|
|
7,399,921
|
|
Accumulated
distributions in excess of net income
|
|
|
(1,458,816)
|
|
|
|
(1,298,263)
|
|
Accumulated other
comprehensive loss
|
|
|
(7,359)
|
|
|
|
(8,764)
|
|
Total MAA
shareholders' equity
|
|
|
5,948,674
|
|
|
|
6,094,071
|
|
Noncontrolling
interests - Operating Partnership units
|
|
|
155,562
|
|
|
|
163,128
|
|
Total shareholders'
equity
|
|
|
6,104,236
|
|
|
|
6,257,199
|
|
Noncontrolling
interests - consolidated real estate entities
|
|
|
27,358
|
|
|
|
22,756
|
|
Total
equity
|
|
|
6,131,594
|
|
|
|
6,279,955
|
|
Total liabilities and
equity
|
|
$
|
11,756,252
|
|
|
$
|
11,484,503
|
|
RECONCILIATION OF
NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS TO
FFO, CORE FFO, CORE AFFO AND FAD
|
|
Amounts in
thousands, except per share and unit data
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Net income available
for MAA common shareholders
|
|
$
|
114,273
|
|
|
$
|
109,810
|
|
|
$
|
358,131
|
|
|
$
|
389,564
|
|
Depreciation and
amortization of real estate assets
|
|
|
145,256
|
|
|
|
145,278
|
|
|
|
430,470
|
|
|
|
419,532
|
|
Loss on sale of
depreciable real estate assets
|
|
|
—
|
|
|
|
75
|
|
|
|
25
|
|
|
|
61
|
|
MAA's share of
depreciation and amortization of real estate assets of real estate
joint venture
|
|
|
157
|
|
|
|
153
|
|
|
|
466
|
|
|
|
456
|
|
Gain on consolidation
of third-party development (1)
|
|
|
(11,033)
|
|
|
|
—
|
|
|
|
(11,033)
|
|
|
|
—
|
|
Net income
attributable to noncontrolling interests
|
|
|
3,035
|
|
|
|
3,000
|
|
|
|
9,605
|
|
|
|
10,633
|
|
FFO attributable to
common shareholders and unitholders
|
|
|
251,688
|
|
|
|
258,316
|
|
|
|
787,664
|
|
|
|
820,246
|
|
Loss on embedded
derivative in preferred shares (1)
|
|
|
18,257
|
|
|
|
11,250
|
|
|
|
14,451
|
|
|
|
1,863
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(54)
|
|
Loss (gain) on
investments, net of tax (1)(2)
|
|
|
533
|
|
|
|
5,166
|
|
|
|
(2,873)
|
|
|
|
(603)
|
|
Casualty related
(recoveries) charges, net (1)
|
|
|
(5,714)
|
|
|
|
217
|
|
|
|
(9,664)
|
|
|
|
588
|
|
Gain on debt
extinguishment (1)
|
|
|
—
|
|
|
|
(57)
|
|
|
|
—
|
|
|
|
(57)
|
|
Legal costs,
settlements and (recoveries), net (1)(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
8,000
|
|
|
|
(1,600)
|
|
Mark-to-market debt
adjustment (4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25)
|
|
Core FFO attributable
to common shareholders and unitholders
|
|
|
264,764
|
|
|
|
274,892
|
|
|
|
797,578
|
|
|
|
820,358
|
|
Recurring capital
expenditures
|
|
|
(33,535)
|
|
|
|
(36,368)
|
|
|
|
(88,810)
|
|
|
|
(85,367)
|
|
Core AFFO attributable
to common shareholders and unitholders
|
|
|
231,229
|
|
|
|
238,524
|
|
|
|
708,768
|
|
|
|
734,991
|
|
Redevelopment capital
expenditures
|
|
|
(12,769)
|
|
|
|
(19,723)
|
|
|
|
(33,767)
|
|
|
|
(77,442)
|
|
Revenue enhancing
capital expenditures
|
|
|
(21,924)
|
|
|
|
(19,123)
|
|
|
|
(60,566)
|
|
|
|
(51,168)
|
|
Commercial capital
expenditures
|
|
|
(1,211)
|
|
|
|
(2,104)
|
|
|
|
(4,281)
|
|
|
|
(4,540)
|
|
Other capital
expenditures
|
|
|
(24,183)
|
|
|
|
(6,554)
|
|
|
|
(47,158)
|
|
|
|
(23,109)
|
|
FAD attributable to
common shareholders and unitholders
|
|
$
|
171,142
|
|
|
$
|
191,020
|
|
|
$
|
562,996
|
|
|
$
|
578,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and
distributions paid
|
|
$
|
176,329
|
|
|
$
|
167,766
|
|
|
$
|
528,824
|
|
|
$
|
501,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares - diluted
|
|
|
116,820
|
|
|
|
116,711
|
|
|
|
116,758
|
|
|
|
116,613
|
|
FFO weighted average
common shares and units - diluted
|
|
|
119,954
|
|
|
|
119,833
|
|
|
|
119,919
|
|
|
|
119,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
0.98
|
|
|
$
|
0.94
|
|
|
$
|
3.07
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per Share -
diluted
|
|
$
|
2.10
|
|
|
$
|
2.16
|
|
|
$
|
6.57
|
|
|
$
|
6.85
|
|
Core FFO per Share -
diluted
|
|
$
|
2.21
|
|
|
$
|
2.29
|
|
|
$
|
6.65
|
|
|
$
|
6.85
|
|
Core AFFO per Share -
diluted
|
|
$
|
1.93
|
|
|
$
|
1.99
|
|
|
$
|
5.91
|
|
|
$
|
6.14
|
|
|
|
(1)
|
Included in Other
non-operating expense (income) in the Consolidated Statements of
Operations.
|
(2)
|
For the three months
ended September 30, 2024 and 2023, loss on investments is
presented net of tax benefit of $0.1 million and $1.4 million,
respectively. For the nine months ended September 30,
2024 and 2023, gain on investments is presented net of tax expense
of $0.8 million and $0.1 million, respectively.
|
(3)
|
For the nine months
ended September 30, 2024, in accordance with its accounting
policies, MAA recognized $8.0 million of accrued legal defense
costs that are expected to be incurred through July
2027.
|
(4)
|
Included in Interest
expense in the Consolidated Statements of Operations.
|
RECONCILIATION OF
NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS TO NET OPERATING
INCOME
|
|
Dollars in
thousands
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September 30,
2024
|
|
|
June 30,
2024
|
|
|
September 30,
2023
|
|
|
September 30,
2024
|
|
|
September 30,
2023
|
|
Net income available
for MAA common shareholders
|
|
$
|
114,273
|
|
|
$
|
101,031
|
|
|
$
|
109,810
|
|
|
$
|
358,131
|
|
|
$
|
389,564
|
|
Depreciation and
amortization
|
|
|
146,722
|
|
|
|
145,022
|
|
|
|
146,702
|
|
|
|
434,764
|
|
|
|
424,175
|
|
Property management
expenses
|
|
|
17,265
|
|
|
|
17,201
|
|
|
|
16,298
|
|
|
|
54,461
|
|
|
|
50,317
|
|
General and
administrative expenses
|
|
|
12,728
|
|
|
|
12,671
|
|
|
|
13,524
|
|
|
|
42,444
|
|
|
|
43,329
|
|
Interest
expense
|
|
|
42,726
|
|
|
|
41,265
|
|
|
|
36,651
|
|
|
|
124,352
|
|
|
|
110,655
|
|
Loss on sale of
depreciable real estate assets
|
|
|
—
|
|
|
|
23
|
|
|
|
75
|
|
|
|
25
|
|
|
|
61
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(54)
|
|
Other non-operating
expense (income)
|
|
|
1,678
|
|
|
|
19,244
|
|
|
|
16,493
|
|
|
|
(2,604)
|
|
|
|
(3,966)
|
|
Income tax expense
(benefit)
|
|
|
670
|
|
|
|
1,020
|
|
|
|
(209)
|
|
|
|
3,485
|
|
|
|
3,596
|
|
Income from real
estate joint venture
|
|
|
(454)
|
|
|
|
(469)
|
|
|
|
(447)
|
|
|
|
(1,405)
|
|
|
|
(1,214)
|
|
Net income
attributable to noncontrolling interests
|
|
|
3,035
|
|
|
|
2,709
|
|
|
|
3,000
|
|
|
|
9,605
|
|
|
|
10,633
|
|
Dividends to MAA
Series I preferred shareholders
|
|
|
922
|
|
|
|
922
|
|
|
|
922
|
|
|
|
2,766
|
|
|
|
2,766
|
|
Total NOI
|
|
$
|
339,565
|
|
|
$
|
340,639
|
|
|
$
|
342,819
|
|
|
$
|
1,026,024
|
|
|
$
|
1,029,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
NOI
|
|
$
|
327,267
|
|
|
$
|
328,280
|
|
|
$
|
332,973
|
|
|
$
|
990,130
|
|
|
$
|
1,001,513
|
|
Non-Same Store and
Other NOI
|
|
|
12,298
|
|
|
|
12,359
|
|
|
|
9,846
|
|
|
|
35,894
|
|
|
|
28,349
|
|
Total NOI
|
|
$
|
339,565
|
|
|
$
|
340,639
|
|
|
$
|
342,819
|
|
|
$
|
1,026,024
|
|
|
$
|
1,029,862
|
|
RECONCILIATION OF
NET INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre
|
|
Dollars in
thousands
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
September 30,
2024
|
|
|
September 30,
2023
|
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
Net income
|
|
$
|
118,230
|
|
|
$
|
113,732
|
|
|
$
|
535,370
|
|
|
$
|
567,831
|
|
Depreciation and
amortization
|
|
|
146,722
|
|
|
|
146,702
|
|
|
|
575,652
|
|
|
|
565,063
|
|
Interest
expense
|
|
|
42,726
|
|
|
|
36,651
|
|
|
|
162,931
|
|
|
|
149,234
|
|
Income tax
expense
|
|
|
670
|
|
|
|
(209)
|
|
|
|
4,633
|
|
|
|
4,744
|
|
EBITDA
|
|
|
308,348
|
|
|
|
296,876
|
|
|
|
1,278,586
|
|
|
|
1,286,872
|
|
Loss on sale of
depreciable real estate assets
|
|
|
—
|
|
|
|
75
|
|
|
|
26
|
|
|
|
62
|
|
Gain on consolidation
of third-party development (1)
|
|
|
(11,033)
|
|
|
|
—
|
|
|
|
(11,033)
|
|
|
|
—
|
|
Adjustments to reflect
MAA's share of EBITDAre of an unconsolidated
affiliate
|
|
|
340
|
|
|
|
340
|
|
|
|
1,356
|
|
|
|
1,350
|
|
EBITDAre
|
|
|
297,655
|
|
|
|
297,291
|
|
|
|
1,268,935
|
|
|
|
1,288,284
|
|
Loss (gain) on
embedded derivative in preferred shares (1)
|
|
|
18,257
|
|
|
|
11,250
|
|
|
|
(5,940)
|
|
|
|
(18,528)
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
(54)
|
|
Loss (gain) on
investments (1)
|
|
|
648
|
|
|
|
6,547
|
|
|
|
(7,369)
|
|
|
|
(4,449)
|
|
Casualty related
(recoveries) charges, net (1)
|
|
|
(5,714)
|
|
|
|
217
|
|
|
|
(9,272)
|
|
|
|
980
|
|
Gain on debt
extinguishment (1)
|
|
|
—
|
|
|
|
(57)
|
|
|
|
—
|
|
|
|
(57)
|
|
Legal costs,
settlements and (recoveries), net (1)(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
5,146
|
|
|
|
(4,454)
|
|
Adjusted
EBITDAre
|
|
$
|
310,846
|
|
|
$
|
315,248
|
|
|
$
|
1,251,500
|
|
|
$
|
1,261,722
|
|
|
|
(1)
|
Included in Other
non-operating expense (income) in the Consolidated Statements of
Operations.
|
|
(2)
|
During the twelve
months ended September 30, 2024, in accordance with its
accounting policies, MAA recognized $8.5 million of accrued legal
defense costs that are expected to be incurred through July
2027.
|
RECONCILIATION OF
UNSECURED NOTES PAYABLE AND SECURED NOTES PAYABLE TO NET
DEBT
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
Unsecured notes
payable
|
|
$
|
4,515,733
|
|
|
$
|
4,180,084
|
|
Secured notes
payable
|
|
|
360,235
|
|
|
|
360,141
|
|
Total debt
|
|
|
4,875,968
|
|
|
|
4,540,225
|
|
Cash and cash
equivalents
|
|
|
(50,232)
|
|
|
|
(41,314)
|
|
Net Debt
|
|
$
|
4,825,736
|
|
|
$
|
4,498,911
|
|
RECONCILIATION OF
TOTAL ASSETS TO GROSS ASSETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
Total assets
|
|
$
|
11,756,252
|
|
|
$
|
11,484,503
|
|
Accumulated
depreciation
|
|
|
5,217,893
|
|
|
|
4,864,690
|
|
Accumulated
depreciation for Assets held for sale (1)
|
|
|
10,367
|
|
|
|
—
|
|
Gross Assets
|
|
$
|
16,984,512
|
|
|
$
|
16,349,193
|
|
|
|
(1)
|
Included in Assets held
for sale in the Consolidated Balance Sheets.
|
RECONCILIATION OF
REAL ESTATE ASSETS, NET TO GROSS REAL ESTATE ASSETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
September 30,
2024
|
|
|
December 31,
2023
|
|
Real estate assets,
net
|
|
$
|
11,439,345
|
|
|
$
|
11,183,905
|
|
Accumulated
depreciation
|
|
|
5,217,893
|
|
|
|
4,864,690
|
|
Assets held for sale,
net
|
|
|
15,321
|
|
|
|
—
|
|
Accumulated
depreciation for Assets held for sale (1)
|
|
|
10,367
|
|
|
|
—
|
|
Cash and cash
equivalents
|
|
|
50,232
|
|
|
|
41,314
|
|
Gross Real Estate
Assets
|
|
$
|
16,733,158
|
|
|
$
|
16,089,909
|
|
|
|
(1)
|
Included in Assets held
for sale in the Consolidated Balance Sheets.
|
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDAre
For purposes of calculations in this release,
Adjusted Earnings Before Interest, Income Taxes, Depreciation and
Amortization for real estate, or Adjusted EBITDAre,
represents EBITDAre further adjusted for items that are not
considered part of MAA's core operations such as adjustments
related to the fair value of the embedded derivative in the MAA
Series I preferred shares, gain or loss on sale of non-depreciable
assets, gain or loss on investments, casualty related charges
(recoveries), net, gain or loss on debt extinguishment and legal
costs, settlements and (recoveries), net. As an owner and operator
of real estate, MAA considers Adjusted EBITDAre to be an
important measure of performance from core operations because
Adjusted EBITDAre excludes various income and expense items
that are not indicative of operating performance. MAA's computation
of Adjusted EBITDAre may differ from the methodology
utilized by other companies to calculate Adjusted EBITDAre.
Adjusted EBITDAre should not be considered as an alternative
to Net income as an indicator of operating performance.
Core Adjusted Funds from Operations (Core AFFO)
Core AFFO is composed of Core FFO less recurring
capital expenditures. Because net income attributable to
noncontrolling interests is added back, Core AFFO, when used in
this release, represents Core AFFO attributable to common
shareholders and unitholders. Core AFFO should not be considered as
an alternative to Net income available for MAA common shareholders
as an indicator of operating performance. As an owner and operator
of real estate, MAA considers Core AFFO to be an important measure
of performance from operations because Core AFFO measures the
ability to control revenues, expenses and recurring capital
expenditures.
Core Funds from Operations (Core FFO)
Core FFO represents FFO as adjusted for items
that are not considered part of MAA's core business operations such
as adjustments related to the fair value of the embedded derivative
in the MAA Series I preferred shares; gain or loss on sale of
non-depreciable assets; gain or loss on investments, net of tax;
casualty related charges (recoveries), net; gain or loss on debt
extinguishment; legal costs, settlements and (recoveries), net, and
mark-to-market debt adjustments. Because net income attributable to
noncontrolling interests is added back, Core FFO, when used in this
release, represents Core FFO attributable to common shareholders
and unitholders. While MAA's definition of Core FFO may be similar
to others in the industry, MAA's methodology for calculating Core
FFO may differ from that utilized by other REITs and, accordingly,
may not be comparable to such other REITs. Core FFO should not be
considered as an alternative to Net income available for MAA common
shareholders as an indicator of operating performance. MAA believes
that Core FFO is helpful in understanding its core operating
performance between periods in that it removes certain items that
by their nature are not comparable over periods and therefore tend
to obscure actual operating performance.
EBITDA
For purposes of calculations in this release,
Earnings Before Interest, Income Taxes, Depreciation and
Amortization, or EBITDA, is composed of net income plus
depreciation and amortization, interest expense, and income taxes.
As an owner and operator of real estate, MAA considers EBITDA to be
an important measure of performance from core operations because
EBITDA excludes various expense items that are not indicative of
operating performance. EBITDA should not be considered as an
alternative to Net income as an indicator of operating
performance.
EBITDAre
For purposes of calculations in this release,
Earnings Before Interest, Income Taxes, Depreciation and
Amortization for real estate, or EBITDAre, is composed of
EBITDA further adjusted for the gain or loss on sale of depreciable
assets, gain on consolidation of third-party development and
adjustments to reflect MAA's share of EBITDAre of an
unconsolidated affiliate. As an owner and operator of real estate,
MAA considers EBITDAre to be an important measure of
performance from core operations because EBITDAre excludes
various expense items that are not indicative of operating
performance. While MAA's definition of EBITDAre is in
accordance with NAREIT's definition, it may differ from the
methodology utilized by other companies to calculate
EBITDAre. EBITDAre should not be considered as an
alternative to Net income as an indicator of operating
performance.
Funds Available for Distribution (FAD)
FAD is composed of Core FFO less total capital
expenditures, excluding development spending, property
acquisitions, capital expenditures relating to significant casualty
losses that management expects to be reimbursed by insurance
proceeds and corporate related capital expenditures. Because net
income attributable to noncontrolling interests is added back, FAD,
when used in this release, represents FAD attributable to common
shareholders and unitholders. FAD should not be considered as an
alternative to Net income available for MAA common shareholders as
an indicator of operating performance. As an owner and operator of
real estate, MAA considers FAD to be an important measure of
performance from core operations because FAD measures the ability
to control revenues, expenses and capital expenditures.
Funds From Operations (FFO)
FFO represents net income available for MAA
common shareholders (calculated in accordance with GAAP) excluding
gain or loss on disposition of operating properties, asset
impairment and gain on consolidation of third-party development,
plus depreciation and amortization of real estate assets, net
income attributable to noncontrolling interests and adjustments for
joint ventures. Because net income attributable to noncontrolling
interests is added back, FFO, when used in this release, represents
FFO attributable to common shareholders and unitholders. While
MAA's definition of FFO is in accordance with NAREIT's definition,
it may differ from the methodology for calculating FFO utilized by
other companies and, accordingly, may not be comparable to such
other companies. FFO should not be considered as an alternative to
Net income available for MAA common shareholders as an indicator of
operating performance. MAA believes that FFO is helpful in
understanding operating performance in that FFO excludes
depreciation and amortization of real estate assets. MAA believes
that GAAP historical cost depreciation of real estate assets is
generally not correlated with changes in the value of those assets,
whose value does not diminish predictably over time, as historical
cost depreciation implies.
Gross Assets
Gross Assets represents Total assets plus
Accumulated depreciation and Accumulated depreciation for Assets
held for sale. MAA believes that Gross Assets can be used as a
helpful tool in evaluating its balance sheet positions. MAA
believes that GAAP historical cost depreciation of real estate
assets is generally not correlated with changes in the value of
those assets, whose value does not diminish predictably over time,
as historical cost depreciation implies.
NON-GAAP FINANCIAL MEASURES (Continued)
Gross Real Estate Assets
Gross Real Estate Assets represents Real estate
assets, net plus Accumulated depreciation, Assets held for sale,
net, Accumulated depreciation for Assets held for sale, Cash and
cash equivalents and 1031(b) exchange proceeds included in
Restricted cash. MAA believes that Gross Real Estate Assets can be
used as a helpful tool in evaluating its balance sheet positions.
MAA believes that GAAP historical cost depreciation of real estate
assets is generally not correlated with changes in the value of
those assets, whose value does not diminish predictably over time,
as historical cost depreciation implies.
Net Debt
Net Debt represents Unsecured notes payable and
Secured notes payable less Cash and cash equivalents and 1031(b)
exchange proceeds included in Restricted cash. MAA believes Net
Debt is a helpful tool in evaluating its debt position.
Net Operating Income (NOI)
Net Operating Income represents Rental and other
property revenues less Total property operating expenses, excluding
depreciation and amortization, for all properties held during the
period, regardless of their status as held for sale. NOI should not
be considered as an alternative to Net income available for MAA
common shareholders. MAA believes NOI is a helpful tool in
evaluating operating performance because it measures the core
operations of property performance by excluding corporate level
expenses and other items not related to property operating
performance.
Non-Same Store and Other NOI
Non-Same Store and Other NOI represents Rental
and other property revenues less Total property operating expenses,
excluding depreciation and amortization, for all properties
classified within the Non-Same Store and Other Portfolio during the
period. Non-Same Store and Other NOI includes storm-related
expenses related to severe weather events, including hurricanes and
winter storms. Non-Same Store and Other NOI should not be
considered as an alternative to Net income available for MAA common
shareholders. MAA believes Non-Same Store and Other NOI is a
helpful tool in evaluating operating performance because it
measures the core operations of property performance by excluding
corporate level expenses and other items not related to property
operating performance.
Same Store NOI
Same Store NOI represents Rental and other
property revenues less Total property operating expenses, excluding
depreciation and amortization, for all properties classified within
the Same Store Portfolio during the period. Same Store NOI excludes
storm-related expenses related to severe weather events, including
hurricanes and winter storms. Same Store NOI should not be
considered as an alternative to Net income available for MAA common
shareholders. MAA believes Same Store NOI is a helpful tool in
evaluating operating performance because it measures the core
operations of property performance by excluding corporate level
expenses and other items not related to property operating
performance.
OTHER KEY DEFINITIONS
Average Effective Rent per Unit
Average Effective Rent per Unit represents the
average of gross rent amounts after the effect of leasing
concessions for occupied units plus prevalent market rates asked
for unoccupied units, divided by the total number of units. Leasing
concessions represent discounts to the current market rate. MAA
believes average effective rent is a helpful measurement in
evaluating average pricing. It does not represent actual rental
revenue collected per unit.
Average Physical Occupancy
Average Physical Occupancy represents the
average of the daily physical occupancy for an applicable
period.
Development Communities
Communities remain identified as development
until certificates of occupancy are obtained for all units under
development. Once all units are delivered and available for
occupancy, the community moves into the Lease-up Communities
portfolio.
Lease-up Communities
New acquisitions acquired during lease-up and
newly developed communities remain in the Lease-up Communities
portfolio until stabilized. Communities are considered stabilized
when achieving 90% average physical occupancy for 90 days.
Non-Same Store and Other Portfolio
Non-Same Store and Other Portfolio includes
recently acquired communities, communities in development or
lease-up, communities that have been disposed of or identified for
disposition, communities that have experienced a significant
casualty loss, stabilized communities that do not meet the
requirements defined by the Same Store Portfolio, retail properties
and commercial properties.
Resident Turnover
Resident turnover represents resident move outs
excluding transfers within the Same Store Portfolio as a
percentage of expiring leases on a trailing twelve month basis
as of the end of the reported quarter.
Same Store Portfolio
MAA reviews its Same Store Portfolio at the
beginning of each calendar year, or as significant transactions or
events warrant. Communities are generally added into the Same Store
Portfolio if they were owned and stabilized at the beginning of the
previous year. Communities are considered stabilized when achieving
90% average physical occupancy for 90 days. Communities that have
been approved by MAA's Board of Directors for disposition are
excluded from the Same Store Portfolio. Communities that have
experienced a significant casualty loss are also excluded from the
Same Store Portfolio.
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SOURCE MAA