Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — NAREIT Institutional Investor Forum June 2008
23 slides from Mid-america Apartment Communities's conference presentation, Jun 4, 2008
Slide 1: NAREIT Institutional Investor Forum June 2008
NAREIT Institutional Investor Forum June 2008
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Statements contained in this presentation, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which can cause act
Slide 3: Successful Public Company Record
Successful Public Company Record • IPO January 1994 – $3 Billion total capitalization – S&P Small Cap 600 Index – 90% institutional ownership – 14+ Years; 16% annualized TSR • High Quality Portfolio – 140 properties; 41,120 units – Exclusively multifamily; Sunbelt focus – Solid diversification – You
Slide 4: Strong Record of Creating Value
Strong Record of Creating Value Attributes and qualities that define MAA’s position in the public apartment REIT sector… • Sunbelt Regional Focus – Highest job growth and household formation trends in US – Supply concerns low for some time • Portfolio Strategy Focused on Delivering High Risk-Adjuste
Slide 5: Attractive Investment Opportunity
Attractive Investment Opportunity Why MAA and Why Now? ü Solid Outlook for Apartment Operating Fundamentals ü MAA is Uniquely Positioned to Capitalize on These Opportunities ü Not “at risk” from single-family/condo shadow supply issues ü Not “at risk” from significant new development funding obligat
Slide 6: Well Positioned in High Growth Region
Well Positioned in High Growth Region • MAA is uniquely positioned to capture Employment Growth Projections ’08 - ’12 the benefits of this high growth region • Market diversity spreads risk and Annual Compounded Growth Rates provides less exposure to over-building National MSA Average 1.08% • Divers
Slide 7: Portfolio Strategy
Portfolio Strategy • High Growth, Growth & Income and Stable Income market allocation strategy drives ability to capture benefits of region with lower risks • Market performance characteristics defined based on forecast net absorption, housing affordability index and market liquidity risk % Same Sto
Slide 8: Single Family Housing Impact
Single Family Housing Impact The change in the mortgage environment will drive higher levels of demand for rental apartments while also increasing retention of existing residents • Home ownership peaked in 2005 at 69.1%; encouraged by easy credit and expectations of price inflation • Potential benef
Slide 9: Upside From Property Redevelopment
Upside From Property Redevelopment Park Estate, Memphis: Case Study - Just over 60% of units redeveloped at an investment of $8K per unit; >30% IRR Before average rent = $852 After average rent = $1,123 4,100 Units Completed; 3,000+ Units Planned in 2008 at 9 $4,700 per unit. Significant potential w
Slide 10: Robust External Growth Platform
Robust External Growth Platform Changing environment …increasing opportunities • Acquisitions – Focus on newer assets – Extensive network – Competitive advantage • New Development/Lease-Up – High Quality New Assets – Unique value add opportunities – Attractive NPV returns – Regional advantages • Fun
Slide 11: Value of Growth Platform
Value of Growth Platform MAA’s disciplined growth plan will add to value per share* from five sources NPV/share Value Creation Plan of value created $150 MM/year of 100% owned $1.25 acquisitions $150 MM/year of Fund I $0.90 acquisitions $50 MM/year of development $1.25 $15 MM/year of redevelopment $
Slide 12: Strong Balance Sheet
Strong Balance Sheet Leverage and • Debt + Preferred as % of entity value is Funding Obligations (1) Development slightly lower than average • Lower development funding obligations, coupled with low leverage, puts MAA in a strong competitive position • Strong dividend coverage • Strong fixed charge
Slide 13: Strong First Quarter Results
Strong First Quarter Results • 10% growth in FFO/share* • Same Store NOI growth of 5.0%* • Occupancy at 14-year high for Q1 • Leasing concessions decline 46%* • Same Store revenues grow 3.8%* • Q1 FFO/share is a record • Move-outs due to home buying drop 16% to 25.6% of total turnover • First two ac
Slide 14: Outlook is Positive
Outlook is Positive Expectations for another solid year of performance and results in 2008 • Same store projected growth in NOI of 4.0% to 5.0% • FFO growth of 6.5% at mid-point of guidance range* • AFFO growth of 6.2% at mid- point of guidance range* • $150MM of acquisitions for Mid- America Fund I
Slide 15: High Quality Assets
High Quality Assets MAA’s younger than average portfolio will help to maintain a competitive advantage in capex spending requirements, long-term rent growth performance and steady internal AFFO growth prospects Portfolio Age Units owned Camden 9 52,039 Post 11 19,065 Mid-America 14 41,120 Colonial 1
Slide 16: Price to Value Opportunity
Price to Value Opportunity Implied Cap Rates • Younger portfolio supports lower implied relative cap rate in sector AVB 4.94% BRE 5.80% • High quality portfolio supports lower ESS 5.99% implied relative cap rate in sector UDR 6.11% • Comparative operating results support EQR 6.12% lower implied rela
Slide 17: Improved Performance Platform
Improved Performance Platform A focus on high growth Disciplined investment High quality of Strong asset management region with an expanded protocol and capital earnings; lower and property allocation to more robust deployment practices volatility management platforms markets Combine to create more
Slide 18: Improved Performance Platform
Improved Performance Platform A balanced approach Creation of a strong A strong property to market tier A re-tool of our asset management management culture in theallocation sunbelt region operating systems platform and “hands-on” focus markets Combine to create operating results that are materially
Slide 19: Value Opportunity
Value Opportunity (1) AFFO growth is competitive and (3) A strong balance sheet and solid prospects are good for continued earnings platform in position solid results… to support more growth… Long-Term AFFO Growth Rate Dividend/2008F AFFO (2) Upgraded portfolio, systems (4) Current relative pricing
Slide 20: Proven Value Creation
Proven Value Creation A solid record of generating value and competitive long-term investment returns to capital… Return on Invested Capital Total Cumulative Shareholder Returns (EBITDA/Gross Avg. Assets) 3 Year 5 Year 10 Year MAA 7.8% ESS 58.4% 143.6% 485.3% ESS 7.6% AVB 40.8% 178.0% 342.0% BRE 6.9
Slide 21: Summary
Summary ü Proven Platform ü Strong operations ü 14 years of success as Public Company ü Top-Tier Shareholder Returns - 1 year, 3 year, 5 year, 7 year, 10 year… ü Young Portfolio with Growth Upside ü Portfolio Well Positioned to Take Advantage of the Current Operating Environment ü Portfolio Strategy
Slide 22: End of Presentation
(Vs Mid-America Apartment Communities (2 vt P etl Nicos To Catt Home” End of Pre entation : s R= a
Slide 23: Slide 23
MID America Apartment Communities — NAREIT Institutional Investor Forum June 2008 on 6ix