Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Nareit REITworld 2024 Annual Conference
41 slides from Mid-america Apartment Communities's conference presentation, Nov 18, 2024
Slide 1: Nareit REITworld 2024 Annual Conference
Nareit REITworld 2024 Annual Conference November 18 - 21, 2024 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains 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 state
Slide 3: At a Glance
At a Glance1 About MAA | Strong Performance Platform ~2,400 ~$1B A3/A- 3.9x 11.7% 123 Associates ‘24F Development Pipeline Investment Grade Rated Net Debt to Adj EBITDAre 10-Year Annual Compounded TSR At 10/31/2024 Consecutive Quarterly Cash Dividends Paid Since IPO2 30 S&P 500 $23.9B 104.5K Years P
Slide 4: Strong Performance and Attractive Returns for Investors
Strong Performance and Attractive Returns for Investors Core FFO per Share Expected 5-Year Compounded Annual Growth Rate of 6.7% Compounding Core FFO per Share growth through market cycles; high quality earnings stream Strong dividend track record; steady growth and well-covered Superior long-term s
Slide 5: Full Cycle Earnings Performance
Full Cycle Earnings Performance Source: Green Street; Company Filings 1 Peer constituents include AVB, CPT, EQR, ESS and UDR. 2008-2024F from Company Filings; 2025F-2028F from Green Street Over the long-term, MAA’s Same Store NOI growth outperforms the peer average with less volatility 3.7% SAME STO
Slide 6: Creating Value Through the Full Market Cycle
Creating Value Through the Full Market Cycle Differentiated Portfolio Strategy Unique market focus…captures benefits of high growth and demand Submarket and property type/class diversification helps to lessen periodic supply-side pressures… drives strong, long-term and full-cycle performance Diversi
Slide 7: A Proven Portfolio Strategy for Long-Term Growth & Stability
Our diverse portfolio of high-quality properties appeals to a broader segment of the rental market, driving higher demand Our portfolio strategy aims to deliver long-term growth and greater stability through the full market cycle A Proven Portfolio Strategy for Long-Term Growth & Stability + Reposit
Slide 8: Unique Diversification & Balance
Unique Diversification & Balance Top 10 Markets1 1 3Q 2024 % Total Same Store NOI 2 Based on gross asset value at 9/30/2024 for total multifamily portfolio 3 Source: Yardi Matrix Asset Class Rating 4 Garden = 3 stories or less; Mid-rise = 4 to 9 stories; High rise = 10+ stories 70% 30% LARGE MARKETS
Slide 9: Resident Income + Job Mix + Affordability = Solid Growth Opportunity
Resident Income + Job Mix + Affordability = Solid Growth Opportunity + Collections SAME STORE RESIDENT PROFILE IN TOP MARKETS QTD AT 9/30/2024 AVG NEW RESIDENT INCOME AVG NEW LEASE RENT/ INCOME RESIDENT MED AGE RESIDENT % SINGLE TOP 5 EMPLOYMENT SECTORS 1 2 3 4 5 Atlanta, GA $103,698 20% 33 82% Dall
Slide 10: 2024 Same Store Pricing Trends
2024 Same Store Pricing Trends Lease Over Lease Average Pricing Growth same store 1Q 2024 2Q 2024 3Q 2024 OCT YTD 2024 EFFECTIVE LEASES NEW LEASE -6.2% -5.1% -5.4% -5.6% RENEWAL 5.0% 4.6% 4.1% 4.4% BLENDED -0.6% 0.1% -0.2% -0.3% Occupancy SAME STORE 1Q 2024 2Q 2024 3Q 2024 OCT YTD 2024 AVG DAILY PHY
Slide 11: Full Year 2024 Same Store Outlook
Full Year 2024 Same Store Outlook Property Revenue Growth [0.25% … 0.50% … 0.75%] Effective Rent Growth1 [0.25% … 0.35% … 0.45%] Average Physical Occupancy Steady occupancy expected for full year [95.4% … 95.5% … 95.6%] REVENUE Property Expense Growth [3.25% … 3.75% … 4.25%] Real Estate Tax Growth [
Slide 12: 2024 Core FFO and Investment Outlook
2024 Core FFO and Investment Outlook Full Year 20242 [$8.80 … $8.88 … $8.96] Q4 20243 [$2.15 … $2.23 … $2.31] CORE FFO/SHARE1 CAPITAL SPEND INITIATIVES Kitchen & Bath Redevelopment 5K to 6K units in 2024 [$36M … $40M … $44M] Repositioning Program 6 new properties started in 3Q 2024 [$8M … $10M … $12
Slide 13: Key Variables for 2025
Key Variables for 2025 FY 2024 FORECASTED GROWTH FY 2025 EXPECTED GROWTH Same Store Operating Expenses 3.75% Property Taxes 2% Expected 3% (+/-) range in 2025; not expecting same appeal benefits as 2024 Personnel 4% Slight decrease expected Repair & Maintenance 3% / Flat to slight increase
Slide 14: Supply Pressure Expected to Decrease in 2025
Supply Pressure Expected to Decrease in 2025 Source: Company, RealPage Market Analytics, Yardi Matrix 1 Unit-weighted supply pressure forecasted by applying estimated construction and lease-up timelines to construction starts as a percentage of inventory. Peak supply pressure indicates period at whi
Slide 15: High Absorption and Slowing Starts
High Absorption and Slowing Starts Quarterly Absorption in MAA and REIT Peer Markets (% of total units) High Absorption MAA Markets have displayed stronger absorption than REIT peer markets in all quarters since Q1 2020 except two. Unseasonably strong absorption for 1H 2024 highlights the demand str
Slide 16: Positive Outlook for 2025 and Beyond
Positive Outlook for 2025 and Beyond Absorption Continues (Concessions Abate Sunbelt Supply Slows Absorption Continues (Concessions Abate) Sunbelt Supply Slows Sunbelt Demand Outperforms Interest Rates Steady Strong Resident Profile Platform Initiatives/ Margin Expansion Redevelopment Opportunities
Slide 17: Steady Demand Drivers for MAA Markets
Steady Demand Drivers for MAA Markets Move-ins from Non-MAA States Trailing 12 Months at 09/30/2024 CA | NY | IL | NJ | MA | WA 50% Of Move-ins from Non-MAA States Came from Peer Coastal/Gateway States MAA markets continue to capture positive in-migration trends; migration outside our markets remain
Slide 18: Diversified Portfolio & Price Point Capture Demand, Help Ease Supply Pressure
Diversified Portfolio & Price Point Capture Demand, Help Ease Supply Pressure Submarket Supply Look1 MAA rents average approximately $270/unit less than new supply in our submarkets driving a better value proposition for the prospective renter and appealing to a broader segment of the renter market
Slide 19: Robust Job Creation in MAA Markets
Robust Job Creation in MAA Markets Georgia ATLANTA Hyundai-SK EV Battery Plant 3,500 Jobs | $4.5B Investment Expected Production 2025 SAVANNAH Hyundai Group Meta Plant EV & Battery Plant 8,100 Jobs | $5.5B Investment Expected Production 2025 Texas AUSTIN Samsung Electronics Co Chip Plant 2,000 Jobs
Slide 20: Compelling Acquisition Opportunities Emerging
Compelling Acquisition Opportunities Emerging MAA Central Ave Phoenix, AZ ACQUIRED 4Q 2023 MAA Optimist Park Charlotte, NC ACQUIRED 4Q 2023 MAA Vale Raleigh, NC ACQUIRED 2Q 2024 MAA Boggy Creek Orlando, FL ACQUIRED 3Q 2024 Recently Acquired Communities in Initial Lease-up Expected to Create Average
Slide 21: Acquisitions and Developments Poised to Deliver Additional Value
Acquisitions and Developments Poised to Deliver Additional Value ACTIVE DEVELOPMENTS AT 9/30/2024 PROPERTY MSA UNITS EXPECTED COST (IN MILLIONS) EXPECTED 1ST OCCUPANCY EXPECTED STABILIZATION1 Novel Val Vista 2,3 Phoenix, AZ 317 $ 79.8 4Q 2023 3Q 2025 MAA Milepost 35 3 Denver, CO 352 125.0 4Q 2023 3Q
Slide 22: Development Program Expands Revenue Growth Potential
Development Program Expands Revenue Growth Potential MAA Nixie | NOW LEASING Raleigh, NC MAA Breakwater Tampa, FL Novel Val Vista | NOW LEASING Phoenix, AZ MAA Milepost 35 | NOW LEASING Denver, CO MAA Plaza Midwood Charlotte, NC Modera Chandler Phoenix, AZ Combination of In-House and “Pre-Purchase”*
Slide 23: 2024 and Future Development Expectations
2024 and Future Development Expectations msa Units STATUS Denver, CO 219 Q4 2024 Start Denver, CO 259 Owned Orlando, FL 698 Owned Denver, CO 181 Owned Raleigh, NC 225 Controlled Denver, CO 429 Owned Denver, CO 520 Owned Atlanta, GA 294 Owned TOTAL 2,825 2024 2025 Development Pipeline EXPECTED TO B
Slide 24: Unit Interior Upgrades Continues to Drive Higher Value
Unit Interior Upgrades Continues to Drive Higher Value Property Redevelopment Program Opportunity Approximately 8K units identified for redevelopment across Same Store portfolio with potential to create additional rent growth value SCOPE Redevelopments are performed on turn at select communities (pr
Slide 25: Repositioning Select Properties to Drive Additional Value
Repositioning Select Properties to Drive Additional Value MAA Harbour Island | Tampa, FL Updated and Expanded Fitness Centers Co-working Areas to Support Remote Work Desirable Amenities MAA Gardens | Atlanta, GA MAA Gateway (Pet Spa) | Charlotte, NC Exterior Amenities for Today’s Lifestyles MAA Wort
Slide 26: Technology Advances Enhance Operations and Add Value
Technology Advances Enhance Operations and Add Value Mobile control of locks, lights and thermostat as well as leak detection provides additional resident value Additional synergy opportunities in repairs and maintenance, capex, and vacant and house electric charges Continued upgrades and expansion
Slide 27: Platform Value Initiatives - Technology Enabled
Platform Value Initiatives - Technology Enabled Installations complete by end of 2024 $25-$30 million of NOI (140bps margin) expected in the run rate by the end of 2024 Nearly 1,300 leaks detected through system in 2023; estimated expense/capital savings of $1 million Smart Home Technology $18 milli
Slide 28: Online Leasing Platform Enhances Leasing Efficiency
Online Leasing Platform Enhances Leasing Efficiency MAA’s Technology Enhancements Expand, Upgrade Leasing Toolbox Objective to create a multi-functional and fully integrated self-service/self-touring leasing platform that results in a seamless, easy to use process for the entire leasing process Tech
Slide 29: Strong, Investment Grade Balance Sheet
Strong, Investment Grade Balance Sheet Note: Total Capitalization is defined here as common shares and units outstanding multiplied by the closing stock price on 9/30/2024, plus total debt outstanding at 9/30/2024, plus Preferred stock ($50 redeemable stock price multiplied by total shares outstandi
Slide 30: Balance Sheet Strength Positions Us Well for Future Growth Opportunities
Balance Sheet Strength Positions Us Well for Future Growth Opportunities TOTAL DEBT MATURING 10.1% 8.2% 6.1% 12.3% 8.2% 11.4% 6.1% 9.1% 8.1% 0.0% 20.4% FIXED RATE DEBT INTEREST RATE N/A 4.2% 1.2% 3.7% 4.2% 3.7% 3.1% 1.8% 5.4% 0.0% 4.2% Credit metrics At 9/30/2024 MAA SECTOR AVG2,3 Total debt / adjus
Slide 31: A Brighter View for Today & Tomorrow: Our Sustainability Commitment
A Brighter View for Today & Tomorrow: Our Sustainability Commitment 2024 GRESB Public Disclosure Score A 80 100 29 30 51 70 2024 GRESB SCORE THREE GREEN STARS MANAGEMENT SCORE PERFORMANCE SCORE ENERGY USE INTENSITY 35% GREEN HOUSE GAS INTENSITY 45% WATER USE INTENSITY 10% 2018 – 2028 REDUCTION GOALS
Slide 32: A Brighter View for Today & Tomorrow: Our Sustainability Commitment
A Brighter View for Today & Tomorrow: Our Sustainability Commitment SUPPORTING ASSOCIATE WELL-BEING Responsive service program and routine surveys Online resident portal for ease of transactions, service request submission and communication Property amenities to promote healthy lifestyles Ongoing re
Slide 33: Appendix: Reconciliation of Non-GAAP Financial Measures
Appendix Reconciliation of Non-GAAP Financial Measures Non-GAAP Financial Measures and Other Key Definitions
Slide 34: Reconciliation of Net Income to FFO, Core FFO, Core AFFO and FAD
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS TO FFO, CORE FFO, CORE AFFO AND FAD Included in Other non-operating expense (income) in the Consolidated Statements of Operations. For the three months ended September 30, 2024 and 2023,
Slide 35: Reconciliation of Net Income to Net Operating Income
Reconciliation of Non-GAAP Financial Measures 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 avai
Slide 36: Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) Included in Other non-operating expense (income) in the Consolidated Statements of Operations. During the twelve months ended September 30, 2024, in accordance with its accounting
Slide 37: Reconciliation of Notes Payable to Net Debt and Gross Assets
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF UNSECURED NOTES PAYABLE AND SECURED NOTES PAYABLE TO NET DEBT RECONCILIATION OF TOTAL ASSETS TO GROSS ASSETS RECONCILIATION OF REAL ESTATE ASSETS, NET TO GROSS REAL ESTATE ASSETS Dollars in thousands September 30, 2024 December 31, 2023
Slide 38: Reconciliation of EPS to Core FFO for 2024 Guidance
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF EARNINGS PER DILUTED COMMON SHARE TO CORE FFO AND CORE AFFO PER DILUTED SHARE FOR FULL YEAR 2024 GUIDANCE Non-Core FFO items may include adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shar
Slide 39: Non-GAAP Financial Measures: Adjusted EBITDAre
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
Slide 40: Non-GAAP Financial Measures: Funds Available for Distribution (FAD)
Non-GAAP Financial Measures 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 pr
Slide 41: Definitions of Non-GAAP Financial Measures and Other Key Definitions
Definitions of Non-GAAP Financial Measures and Other Key Definitions 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 p
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