Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Nareit REITweek 2024 Investor Conference
40 slides from Mid-america Apartment Communities's conference presentation, Jun 3, 2024
Slide 1: Nareit REITweek 2024 Investor Conference
Nareit REITweek 2024 Investor Conference June 4 - 6, 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- 3.6x 10.2% 121 Associates ‘24F Development Pipeline Investment Grade Rated Net Debt to Adj EBITDAre 10-Year Annual Compounded TSR At 4/30/2024 Quarterly Cash Dividends Paid Since IPO 30 S&P 500 $20.4B 102.7K Years Public Member Co
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: 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 6: A Proven Portfolio Strategy for Long-Term Growth & Stability
Our diverse portfolio of high-quality properties appeals to the largest segment of the rental market Our portfolio strategy drives long-term growth and greater stability through the full market cycle A Proven Portfolio Strategy for Long-Term Growth & Stability + Repositioned | MAA Hyde Park | Tampa,
Slide 7: Unique Diversification & Balance
Unique Diversification & Balance Top 10 Markets1 1 1Q 2024 % Total Same Store NOI 2 Based on gross asset value at 3/31/2024 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 Diversified within SU
Slide 8: 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 3/31/2024 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 $95,142 21% 34 81% Dalla
Slide 9: 2024 Same Store Pricing Trends
2024 Same Store Pricing Trends Lease Over Lease Average Pricing Growth same store Q4 2023 Q1 2024 MAY qtd 20241 EFFECTIVE LEASES NEW LEASE -7.0% -6.2% -5.3% RENEWAL 4.8% 5.0% 5.0% BLENDED -1.6% -0.6% 0.1% Occupancy SAME STORE Q4 2023 Q1 2024 MAY QTD 20241 AVG DAILY PHYSICAL OCCUPANCY 95.5% 95.3% 95.
Slide 10: Full Year 2024 Same Store Outlook
Full Year 2024 Same Store Outlook Property Revenue Growth [0.15% … 0.90% … 1.65%] Effective Rent Growth1 [0.10% … 0.85% … 1.60%] Average Physical Occupancy Steady occupancy expected for full year [95.4% … 95.7% … 96.0%] REVENUE Property Expense Growth [4.10% … 4.85% … 5.60%] Real Estate Tax Growth [
Slide 11: 2024 Core FFO and Investment Outlook
2024 Core FFO and Investment Outlook Full Year 20242 [$8.70 … $8.88 … $9.06] Q2 20243 [$2.11 … $2.19 … $2.27] Total Overhead4 Asset Management / Tech / Regional Support + G&A [$130.5M … $132.5M … $134.5M] EXPECTED CORE FFO/SHARE1 CAPITAL SPEND INITIATIVES5 Kitchen & Bath Redevelopment 5K to 6K units
Slide 12: 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 13: Steady Demand Drivers for MAA Markets
Steady Demand Drivers for MAA Markets Move-ins from Non-MAA States Trailing 12 Months at 03/31/2024 CA | NY | IL | NJ | MA | WA 47% 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 14: Positioned for Continued Demand Outperformance
Positioned for Continued Demand Outperformance Net Migration (% Total Population) Population Growth Household Growth Job Growth Superior Demand Indicators Demand indicators for MAA Markets should continue to outperform those of REIT Peer Markets in the medium term. The market level migration trends
Slide 15: 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 16: 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 $300/unit less than new supply in our submarkets driving a better value proposition for the prospective renter and appealing to a larger segment of the renter market M
Slide 17: 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 Q1 2024 highlights the demand str
Slide 18: Development Program Supports Continued Value Creation
Atlanta, GA Novel West Midtown | NOW LEASING Phoenix, AZ Novel Val Vista | NOW LEASING Salt Lake City, UT Novel Daybreak | NOW LEASING Denver, CO MAA Milepost 35 | NOW LEASING Raleigh, NC MAA Nixie | LEASING Q4 2024 Tampa, FL MAA Breakwater | LEASING Q1 2025 Development Program Supports Continued Va
Slide 19: Development Pipeline and Lease-ups Poised to Deliver Value
Development Pipeline and Lease-ups Poised to Deliver Value ACTIVE DEVELOPMENTS AT 3/31/2024 PROPERTY MSA UNITS EXPECTED COST (IN MILLIONS) EXPECTED 1ST OCCUPANCY EXPECTED STABILIZATION1 Novel Daybreak2,3 Salt Lake City, UT 400 $ 99.4 2Q 2023 1Q 2025 Novel Val Vista2,3 Phoenix, AZ 317 79.8 4Q 2023 3Q
Slide 20: 2024 Development Expectations
2024 Development Expectations msa Units STATUS Denver, CO 259 Owned Orlando, FL 698 Owned Denver, CO 181 Owned Raleigh, NC 191 Controlled Denver, CO 648 Owned Denver, CO 520 Owned Atlanta, GA 294 Owned TOTAL 2,791 2024 Development Pipeline Expected to Approach APPROXIMATELY $1 Billion Additional Opp
Slide 21: Unit Interior Upgrades Continues to Drive Higher Value
Unit Interior Upgrades Continues to Drive Higher Value Property Redevelopment Program Opportunity Approximately 10K 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 22: 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 23: 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 24: 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 25: 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 26: 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 3/31/2024, plus total debt outstanding at 3/31/2024, plus Preferred stock ($50 redeemable stock price multiplied by total shares outstandi
Slide 27: Balance Sheet Strength Positions Us Well for Future Growth Opportunities
Balance Sheet Strength Positions Us Well for Future Growth Opportunities TOTAL DEBT MATURING 13.7% 8.6% 6.5% 12.9% 8.6% 12.1% 6.4% 9.6% 0.0% 0.0% 21.6% FIXED RATE DEBT INTEREST RATE 4.0% 4.2% 1.2% 3.7% 4.2% 3.7% 3.1% 1.8% 0.0% 0.0% 4.2% Credit metrics At 3/31/2024 MAA SECTOR AVG2,3 Total debt / adju
Slide 28: Multiple Disparity
Multiple Disparity MAA FULL CYCLE EARNINGS PERFORMANCE UNDERPRICED COMPARED TO SECTOR FFO Multiple2 MAA: 13.7 Sector: 15.2 Same Store NOI Average MAA: 4.3% Sector: 3.6 % Source: Green Street; Company Filings; S&P Global 1 Sector constituents include AVB, CPT, EQR, ESS and UDR. 2014-2023 from Company
Slide 29: Cap Rate Disparity
Cap Rate Disparity Current implied cap rate SPREAD VS. LONG TERM PROVEN RESULTS provides opportunity Total Implied Unleveraged Return MAA is currently priced at a multiple and implied cap rate discount to the sector average Actual historical performance suggests this discount is not warranted; same
Slide 30: A Brighter View for Today & Tomorrow: Our Sustainability Commitment
A Brighter View for Today & Tomorrow: Our Sustainability Commitment 2023 GRESB Public Disclosure Score A 78 100 28 30 50 70 2023 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 31: 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 32: Appendix Reconciliation of Non-GAAP Financial Measures
Appendix Reconciliation of Non-GAAP Financial Measures Non-GAAP Financial Measures and Other Key Definitions
Slide 33: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS TO FFO, CORE FFO, CORE AFFO AND FAD (1) Included in Other non-operating income in the Consolidated Statements of Operations. (2) For the three months ended March 31, 2024, gain on investm
Slide 34: Reconciliation of Non-GAAP Financial Measures
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 March 31, 2024 December 31, 2023 March 31, 2023 Net income available for MAA common shareholders $ 142,827 $ 159,554 $ 134,
Slide 35: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures RECONCILIATION OF NET INCOME TO EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) Included in Other non-operating (income) expense in the Consolidated Statements of Operations. Dollars in thousands Three Months Ended Twelve Months Ended March 31, 2024 March 31,
Slide 36: Reconciliation of Non-GAAP Financial Measures
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 March 31, 2024 December 31, 2023 Rea
Slide 37: Reconciliation of Non-GAAP Financial Measures
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 38: 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 39: 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 40: 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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