Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Investor Presentation (November 2022)
35 slides from Mid-america Apartment Communities's investor presentation, Nov 8, 2022
Slide 1: Capital Markets Update November 2022
Capital Markets Update November 2022 www.maac.com 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: Consistently Strong Performance for Shareholders
Consistently Strong Performance for Shareholders Steady Annual Core FFO Growth Consistent and compounding Core FFO and dividend growth through market cycles; high quality earnings stream Strong dividend track record; steady growth and well-covered Top tier shareholder returns within the multifamily
Slide 4: Differentiated Portfolio Strategy
Differentiated Portfolio Strategy Unique Sunbelt focus…captures benefits of high growth and demand Diversification within Sunbelt…mitigates periodic supply-side pressures… drives superior full cycle performance Diversified renter price point… appeals to largest segment of the rental market… creates
Slide 5: About MAA | 28 Years of Sunbelt Strategy & Expertise
28 S&P 500 $22.9B 102K ~2,400 21 YR YEARS PUBLIC MEMBER COMPANY TOTAL MARKET CAP APARTMENT UNITS ASSOCIATES AVG EXEC TENURE ~$1B 14K A- 3.97x 13.2% 115 ’22F TOTAL DEVELOPMENT, LU PIPELINE UNIT OPPORTUNITY REDEVELOPMENT PROGRAM CREDIT RATING UPGRADE BY S&P ON 8/24/22 NET DEBT TO ADJ EBITDAre 10-YEAR
Slide 6: Unique Diversification and Balance across the Sunbelt Region
TOP 10 MARKETS | % 3Q22 Same Store NOI TOP 10 MARKETS 1 Atlanta, GA 12.8% 6 Austin, TX 6.2% 2 Dallas, TX 9.2% 7 Raleigh/Durham, NC 5.5% 3 Tampa, FL 6.9% 8 Nashville, TN 4.7% 4 Charlotte, NC 6.5% 9 Houston, TX 3.8% 5 Orlando, FL 6.3% 10 Charleston, SC 3.6% Unique Diversification and Balance across th
Slide 7: A Proven Portfolio Strategy for Long-Term Growth and Stability
A Proven Portfolio Strategy for Long-Term Growth and Stability Our diverse portfolio of high-quality Sunbelt properties appeals to the largest segment of the rental market Our portfolio strategy drives robust long-term growth and greater stability through the full market cycle + MAA Robinson, Orland
Slide 8: Strong Demand Prospects for MAA Markets
Strong Demand Prospects for MAA Markets Total Move-ins from Non-MAA States Trailing 12 Months at 9/30/22 CA | NY | IL | NJ | MA | WA 49% Of Move-ins from Non-MAA States Came from Peer Coastal/Gateway States MAA Markets continued to see strong in-migration through 3Q 2022 while out-migration has rema
Slide 9: High Quality Resident Profile + Affordable Rents = Solid Rent Growth Opportunity
High Quality Resident Profile + Affordable Rents = Solid Rent Growth Opportunity PRIMARY EMPLOYMENT SECTORS FOR EXISTING RESIDENTS QTD AT 9/30/22 Healthcare Technology Finance/ Banking/ Insurance Education Retail Professional Services Restaurants/ Food Service Government Manufacturing Self Employed
Slide 10: Continued Low Resident Turnover
Continued Low Resident Turnover Our total move outs to a single-family home remain below the historical average of <26%. Trailing 12 Month Resident Turnover % of Total Move Outs to Rent or Buy Single Family Homes Current Resident Turnover and Move-Outs Associated with Single-Family Housing at Histor
Slide 11: Strong Performance Today, While Strengthening for Tomorrow
Strong Performance Today, While Strengthening for Tomorrow Cumulative Same Store NOI Growth MAA continues to deliver on its mission to drive long-term outperformance through all phases of the economic cycle with less volatility Outperformance during the latest down cycle positions us well, as compar
Slide 12: 2022 Pricing Trends
2022 Pricing Trends SAME STORE FULL YEAR 2020 JAN-JUN 2021 JUL-DEC 2021 Full year 2021 JAN-JUN 2022 q3 2022 OCT 2022 Full year 2022F EFFECTIVE LEASES NEW LEASE AVG Pricing Growth Lease Over Lease -2.5% 4.7% 19.3% 11.8% 17.3% 13.7% 5.3% RENEWAL AVG Pricing Growth Lease Over Lease 5.2% 7.5% 11.9% 9.7%
Slide 13: Full Year 2022 Same Store Outlook
Property Revenue Growth [13.0% … 13.5% … 14.0%] Effective Rent Growth Seasonal trends and comparisons expected to impact 2H 2022 [14.0% … 14.5% … 15.0%] Average Physical Occupancy Forecast 30bps below prior year [95.6% … 95.8% … 96.0%] Full Year 2022 Same Store Outlook REVENUE Property Expense Growt
Slide 14: 2022 Core FFO and Investment Outlook
2022 Core FFO and Investment Outlook Full Year 20222 [$8.37 … $8.45 … $8.53] Q4 20223 [$2.19 … $2.27 … $2.35] Total Overhead Corporate Property Management + G&A [$122.5M … $124.5M … $126.5M] EXPECTED CORE FFO/SHARE1 Midpoint is up approximately 14.5% from 2021 primarily driven by technology investme
Slide 15: Development Program Supports Continued Value Creation
Development Program Supports Continued Value Creation PHOENIX, AZ Novel Val Vista ATLANTA, GA Novel West Midtown SALT LAKE CITY, UT Novel Daybreak DENVER, CO MAA Milepost 35 I AUSTIN, TX MAA Windmill Hill Combination of In-House and Joint Venture “Pre-Purchased” Development Expands Revenue Growth Po
Slide 16: Development Pipeline and Lease-ups Poised To Deliver Value
Development Pipeline and Lease-ups Poised To Deliver Value 5.7% EXPECTED AVERAGE STABILIZED NOI YIELD $25M - $26M EXPECTED TOTAL STABILIZED INCREMENTAL NOI ACTIVE DEVELOPMENTS AT 9/30/22 PROPERTY MSA TOTAL UNITS EXP TOTAL COST (IN MILLIONS) EXPECTED INITIAL OCCUPANCY EXPECTED STABILIZATION1 MAA Wind
Slide 17: 2022 Development Expectations
2022 Development Expectations msa Units Est Start Tampa, FL 495 4Q 2022 Raleigh, NC 406 4Q 2022 2022 Development Pipeline Expansion By the end of 2022 Development Pipeline Expected to Approach APPROXIMATELY $723 MILLION Beyond 2022… Additional Opportunities in: ATLANTA | CHARLOTTE DENVER | ORLANDO R
Slide 18: Unit Interior Upgrades Continues to Drive Higher Value
Unit Interior Upgrades Continues to Drive Higher Value Property Redevelopment Program Opportunity Approximately 14K 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 (p
Slide 19: Future Redevelopment Opportunity
Future Redevelopment Opportunity Potential for Continued Value Creation Remains MAA REDEVELOPMENT PIPELINE Currently Identified Redevelopment Opportunity Future Value Opportunity Revenue At 5.1% Cap Rate1 Net Value Creation $19.7M $386.3M $297.0M Legacy MAA Legacy CLP Legacy PPS Total MAA Units 5,20
Slide 20: Repositioning Select Properties to Drive Additional Value
Repositioning Select Properties to Drive Additional Value MAA Buckhead, Atlanta, GA Updated Leasing Centers Conference Areas to Support Remote Work Exterior Amenities for Today’s Lifestyles MAA Stratford, Atlanta, GA MAA McKinney, Dallas, TX Dramatic Transformations MAA Worthington, Dallas, TX Prope
Slide 21: 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 22: MAA's Technology Enhancements Expand, Upgrade Leasing Toolbox
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 resident journey from initial prospect engagement to ultimate move out.
Slide 23: 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 9/30/22, plus total debt outstanding at 9/30/22, plus Preferred stock ($50 redeemable stock price multiplied by total shares outstanding).
Slide 24: Balance Sheet Strength Positions Us Well for Future Growth Opportunities
Balance Sheet Strength Positions Us Well for Future Growth Opportunities % MATURING 2.8% 7.7% 8.8% 8.9% 6.6% 13.2% 8.8% 12.4% 6.6% 9.8% 14.4% Credit metrics At 9/30/22 MAA SECTOR AVG2,3 Total debt / adjusted total assets1 29.1% 31.1% Total secured debt / adjusted total assets1 2.3% 5.0% Unencumbered
Slide 25: A Brighter View for Today and Tomorrow: Our Sustainability Commitment
A Brighter View for Today and Tomorrow: Our Sustainability Commitment 2022 GRESB Public Disclosure Score A 75 100 29 30 46 70 2022 GRESB SCORE THREE GREEN STARS MANAGEMENT SCORE PERFORMANCE SCORE ENERGY USE INTENSITY 15% GREEN HOUSE GAS INTENSITY 15% WATER USE INTENSITY 10% 2018 – 2028 REDUCTION GOA
Slide 26: Supporting Our Associates' Well-Being
SUPPORTING OUR ASSOCIATES’ WELL—BEING A Brighter View for Today and Tomorrow: Our Sustainability Commitment Responsive service program and routine surveys Online resident portal for ease of transactions, service request submission and communication Property amenities to promote healthy lifestyles On
Slide 27: Appendix
Appendix At September 30, 2022 Reconciliation of Non-GAAP Financial Measures Definitions of Non-GAAP Financial Measures and Other Key Terms
Slide 28: Reconciliation of FFO, Core FFO, Core AFFO and FAD
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF FFO, CORE FFO, CORE AFFO AND FAD TO NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS Amounts in thousands, except per share and unit data Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Net income av
Slide 29: Reconciliation of Net Operating Income
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET OPERATING INCOME TO NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS Dollars in thousands Three Months Ended Nine Months Ended September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net Operating I
Slide 30: Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET INCOME Dollars in thousands Three Months Ended Twelve Months Ended September 30, 2022 September 30, 2021 September 30, 2022 December 31, 2021 Net income $ 125,703 $ 87,047 $ 646,756 $ 550,70
Slide 31: Reconciliation of Net Debt and Gross Assets
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET DEBT TO UNSECURED NOTES PAYABLE AND SECURED NOTES PAYABLE RECONCILIATION OF GROSS ASSETS TO TOTAL ASSETS RECONCILIATION OF GROSS REAL ESTATE ASSETS TO REAL ESTATE ASSETS, NET Dollars in thousands September 30, 2022 December 31, 2021
Slide 32: Reconciliation of EPS to Core FFO per Share for 2022 Guidance
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET INCOME PER DILUTED COMMON SHARE TO CORE FFO PER SHARE FOR 2022 GUIDANCE Full Year 2022 Guidance Range Low High Earnings per common share – diluted $ 5.59 $ 5.75 Real estate depreciation and amortization 4.59 4.59 Gains on sale of de
Slide 33: Definitions of Non-GAAP Financial Measures
Definitions of 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
Slide 34: Definitions of Non-GAAP Financial Measures: FFO
Definitions of Non-GAAP Financial Measures 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 and asset impairment, plus depreciation and amortization of real e
Slide 35: Definitions of Other Key Terms
Definitions of Other Key Terms 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
Mid-America Apartment Communities — Investor Presentation (November 2022) on 6ix