Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Nareit REITweek 2023 Investor Conference
36 slides from Mid-america Apartment Communities's conference presentation, Jun 5, 2023
Slide 1: Nareit REITweek 2023 Investor Conference
Nareit REITweek 2023 Investor Conference June 6-8, 2023 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 per Share 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 mu
Slide 4: Differentiated Portfolio Strategy
Differentiated Portfolio Strategy Unique market focus…captures benefits of high growth and demand Diversification helps to lessen periodic supply-side pressures… drives superior full cycle performance Diversified renter price point… appeals to largest segment of the rental market… creates stability
Slide 5: About MAA | Strong Performance Platform
About MAA | Strong Performance Platform 29 S&P 500 $22.5B 102K ~2,400 20 YR YEARS PUBLIC MEMBER COMPANY TOTAL MARKET CAP APARTMENT UNITS ASSOCIATES AVG EXEC TENURE ~$1B 11K A3/A- 3.50x 11.9% 117 ’23F TOTAL DEVELOPMENT, LU PIPELINE UNIT OPPORTUNITY REDEVELOPMENT PROGRAM MOODY’S CREDIT RATING UPGRADE
Slide 6: Unique Diversification and Balance
TOP 10 MARKETS | % 1Q 2023 Same Store NOI TOP 10 MARKETS 1 Atlanta, GA 12.6% 6 Charlotte, NC 6.2% 2 Dallas, TX 9.7% 7 Raleigh/Durham, NC 5.6% 3 Tampa, FL 6.9% 8 Nashville, TN 4.8% 4 Orlando, FL 6.5% 9 Fort Worth, TX 3.7% 5 Austin, TX 6.4% 10 Houston, TX 3.7% Unique Diversification and Balance 1 Base
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 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 + Repositioned | MAA Worthingt
Slide 8: Strong Demand Drivers for MAA Markets
Strong Demand Drivers for MAA Markets Total Move-ins from Non-MAA States Trailing 12 Months at 3/31/2023 CA | NY | IL | NJ | MA | WA 49% Of Move-ins from Non-MAA States Came from Peer Coastal/Gateway States MAA markets continue to capture positive in-migration trends that continue to run higher than
Slide 9: Robust Job Creation in MAA Markets Continues
Robust Job Creation in MAA Markets Continues Georgia ATLANTA Hyundai-SK EV Battery Plant 3,500 Jobs | $4.5B Investment SAVANNAH Hyundai Group Meta Plant EV & Battery Plant 8,100 Jobs | $5.5B Investment Texas AUSTIN Samsung Electronics Co Chip Plant 2,000 Jobs | $25B Investment DALLAS/FORT WORTH Texa
Slide 10: Primary Employment Sectors and Resident Profile
PRIMARY EMPLOYMENT SECTORS FOR EXISTING RESIDENTS QTD AT 3/31/2023 Healthcare Technology Finance/ Banking/ Insurance Education Retail Professional Services Restaurants/ Food Service Government Manufacturing Self Employed Total Portfolio 14% 10% 8% 6% 5% 5% 5% 5% 4% 3% Affluent Resident Profile + Div
Slide 11: MAA's Ability to Outperform Full Cycle
MAA’s Ability to Outperform Full Cycle Supply pressure in our markets is not new. MAA markets faced higher levels of supply compared to national levels before and during the pandemic. In fact, some of the markets with the strongest rent growth captured by MAA over the past few years have been in mar
Slide 12: Strong Performance Through the Full Economic Cycle
Strong Performance Through the Full Economic Cycle MAA continues to deliver on its mission to drive long-term outperformance through all phases of the economic cycle with less volatility Our outperformance compared to Multifamily Peers2 during the latest down cycle and recovery period positions us w
Slide 13: 2023 Same Store Pricing Trends
2023 Same Store Pricing Trends Lease Over Lease Average Pricing Growth same store 1Q 2023 Apr 2023 May 2023 May YTD 2023 EFFECTIVE LEASES NEW LEASE -0.5% -0.1% 1.2% 0.0% RENEWAL 8.6% 7.9% 6.4% 7.8% BLENDED 3.9% 3.9% 3.9% 3.9% Occupancy SAME STORE 1Q 2023 Apr 2023 May 2023 May YTD 2023 AVG DAILY PHYS
Slide 14: Full Year 2023 Same Store Outlook
Property Revenue Growth [5.25% … 6.25% … 7.25%] Effective Rent Growth1 Earn-in of ~5.5% from 2022 with ~3% blended rent growth in 2023 (half impacting rent growth this year) [6.0% … 7.0% … 8.0%] Average Physical Occupancy Steady occupancy expected for full year [95.6% … 95.8% … 96.0%] Full Year 2023
Slide 15: 2023 Core FFO and Investment Outlook
2023 Core FFO and Investment Outlook Full Year 20232 [$8.93 … $9.11 … $9.29] Q2 20233 [$2.18 … $2.26 … $2.34] Total Overhead Corporate Property Management + G&A [$126.5M … $128.5M … $130.5M] Income Tax [$4.0M … $4.5M … $5.0M] EXPECTED CORE FFO/SHARE1 Midpoint represents approximately 7.2% increase o
Slide 16: 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 RALEIGH, NC MAA Nixie Combination of In-House and Joint Venture* “Pre-Purchased” Development Expands Revenue Growth Potentia
Slide 17: Development Pipeline and Lease-ups Poised To Deliver Value
Development Pipeline and Lease-ups Poised To Deliver Value 5.6% EXPECTED AVERAGE STABILIZED NOI YIELD $40M - $41M EXPECTED TOTAL STABILIZED INCREMENTAL NOI ACTIVE DEVELOPMENTS AT 3/31/2023 PROPERTY MSA TOTAL UNITS EXP TOTAL COST (IN MILLIONS) EXPECTED INITIAL OCCUPANCY EXPECTED STABILIZATION1 Novel
Slide 18: 2023 Development Expectations
2023 Development Expectations msa Units Est Start STATUS Denver, CO 259 2H 2023 Owned Orlando, FL 300 2H 2023 Owned Charlotte, NC 305 2H 2023 Owned Atlanta, GA 250 2H 2023 Controlled Denver, CO 181 2024 Owned Raleigh, NC 191 2024 Controlled Denver, CO 648 2024/2026 Owned Denver, CO 520 2024/2027 Own
Slide 19: Unit Interior Upgrades Continues to Drive Higher Value
Unit Interior Upgrades Continues to Drive Higher Value Property Redevelopment Program Opportunity Approximately 11K 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 20: Future Redevelopment Opportunity
Future Redevelopment Opportunity Potential for Continued Value Creation Remains MAA REDEVELOPMENT PIPELINE Currently Identified Redevelopment Opportunity Future Value Opportunity Revenue At 5.3% Cap Rate1 Net Value Creation $16.1M $303.8M $230.6M Legacy MAA Legacy CLP Legacy PPS Total MAA Units 3,84
Slide 21: 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 Worth
Slide 22: 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 23: 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 24: 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 3/31/2023, plus total debt outstanding at 3/31/2023, plus Preferred stock ($50 redeemable stock price multiplied by total shares outstandi
Slide 25: Balance Sheet Strength Positions Us Well for Future Growth
Balance Sheet Strength Positions Us Well for Future Growth Opportunities % MATURING 8.0% 9.1% 9.1% 6.8% 13.6% 9.0% 12.7% 6.8% 10.1% 0% 14.9% Credit metrics At 3/31/2023 MAA SECTOR AVG2,3 Total debt / adjusted total assets1 27.8% 30.6% Total secured debt / adjusted total assets1 2.3% 4.8% Unencumbere
Slide 26: 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 27: Supporting Associate Well-Being
SUPPORTING ASSOCIATE 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 Ongoing
Slide 28: Appendix
Appendix At MARCH 31, 2023 Reconciliation of Non-GAAP Financial Measures Definitions of Non-GAAP Financial Measures and Other Key Terms
Slide 29: 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 Included in Other non-operating income in the Consolidated Statements of Operations. For the three months ended March 31, 2023 and 2022, loss on invest
Slide 30: 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 March 31, 2023 December 31, 2022 March 31, 2022 Net Operating Income Same Store NOI $ 328,940 $ 329,458 $ 292,436 Non-Same
Slide 31: Reconciliation of EBITDA, EBITDAre and Adjusted EBITDAre
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET INCOME Included in Other non-operating income in the Consolidated Statements of Operations. For the three months ended March 31, 2022 and the twelve months ended March 31, 2023 and December
Slide 32: 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 Included in Restricted cash in the Consolidated Balance S
Slide 33: Reconciliation to Core FFO per Share for 2023 Guidance
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET INCOME PER DILUTED COMMON SHARE TO CORE FFO PER SHARE FOR 2023 GUIDANCE Non-Core FFO items may include adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares, gain or loss on sale of no
Slide 34: 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 35: Definitions of Non-GAAP Financial Measures: FAD
Definitions of 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
Slide 36: Definitions of Non-GAAP Financial Measures and Other Key Terms
Definitions of Non-GAAP Financial Measures and Other Key Terms 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.
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