Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Investor Presentation (September 2024)
41 slides from Mid-america Apartment Communities's investor presentation, Sep 3, 2024
Slide 1: Capital Markets Update September 2024
Capital Markets Update September 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- 3.7x 12.3% 122 Associates ‘24F Development Pipeline Investment Grade Rated Net Debt to Adj EBITDAre 10-Year Annual Compounded TSR At 8/30/2024 Quarterly Cash Dividends Paid Since IPO 30 S&P 500 $21.8B 103.6K 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 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 7: Unique Diversification & Balance
Unique Diversification & Balance Top 10 Markets1 1 2Q 2024 % Total Same Store NOI 2 Based on gross asset value at 6/30/2024 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 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 6/30/2024 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 $96,034 21% 33 82% Dalla
Slide 9: 2024 Same Store Pricing Trends
2024 Same Store Pricing Trends Lease Over Lease Average Pricing Growth same store Q1 2024 Q2 2024 Aug Qtd 20241 EFFECTIVE LEASES NEW LEASE -6.2% -5.1% -4.8% RENEWAL 5.0% 4.6% 4.0% BLENDED -0.6% 0.1% 0.0% Occupancy SAME STORE Q1 2024 Q2 2024 aug Qtd 20241 AVG DAILY PHYSICAL OCCUPANCY 95.3% 95.5% 95.7
Slide 10: Full Year 2024 Same Store Outlook
Full Year 2024 Same Store Outlook Property Revenue Growth [0.15% … 0.65% … 1.15%] Effective Rent Growth1 [0.25% … 0.50% … 0.75%] Average Physical Occupancy Steady occupancy expected for full year [95.3% … 95.5% … 95.7%] REVENUE Property Expense Growth [3.75% … 4.25% … 4.75%] Real Estate Tax Growth [
Slide 11: 2024 Core FFO and Investment Outlook
2024 Core FFO and Investment Outlook Full Year 20242 [$8.74 … $8.88 … $9.02] Q3 20243 [$2.08 … $2.16 … $2.24] Total Overhead4 Asset Management / Tech / Regional Support + G&A [$128.5M … $130.5M … $132.5M] EXPECTED CORE FFO/SHARE1 CAPITAL SPEND INITIATIVES 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 06/30/2024 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; 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 1H 2024 highlights the demand str
Slide 18: Compelling Acquisition Opportunities Emerging
Compelling Acquisition Opportunities Emerging Recently Acquired Communities in Initial Lease-up Expected to Create Average Stabilized NOI Yields of ~6% MAA Optimist Park | Charlotte, NC | Acquired 4Q23 MAA Vale | Raleigh, NC | Acquired 2Q24 MAA Central Ave | Phoenix, AZ | Acquired 4Q23
Slide 19: Acquisitions and Developments Poised to Deliver Additional Value
Acquisitions and Developments Poised to Deliver Additional Value ACTIVE DEVELOPMENTS AT 6/30/2024 PROPERTY MSA UNITS EXPECTED COST (IN MILLIONS) EXPECTED 1ST OCCUPANCY EXPECTED STABILIZATION1 Novel Daybreak 2,4 Salt Lake City, UT 400 $ 99.4 2Q 2023 1Q 2025 Novel Val Vista 2,4 Phoenix, AZ 317 79.8 4Q
Slide 20: Development Program Expands Revenue Growth Potential
Novel West Midtown | NOW LEASING Atlanta, GA Development Program Expands Revenue Growth Potential Novel Daybreak | NOW LEASING Salt Lake City, UT MAA Nixie Raleigh, NC MAA Breakwater Tampa, FL Novel Val Vista | NOW LEASING Phoenix, AZ MAA Milepost 35 | NOW LEASING Denver, CO Alta 10th Charlotte, NC
Slide 21: 2024 Development Expectations
2024 Development Expectations msa Units STATUS Charlotte, NC2 239 Q3 2024 Start Richmond, VA 306 Q3 2024 Start Denver, CO 259 Owned Orlando, FL 698 Owned Denver, CO 181 Owned Raleigh, NC 225 Controlled Denver, CO 648 Owned Denver, CO 520 Owned Atlanta, GA 294 Owned TOTAL 3,370 2024 Development Pipel
Slide 22: Unit Interior Upgrades Continues to Drive Higher Value
Unit Interior Upgrades Continues to Drive Higher Value Property Redevelopment Program Opportunity Approximately 9K 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 23: 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 24: 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 25: 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 26: 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 27: 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 6/30/2024, plus total debt outstanding at 6/30/2024, plus Preferred stock ($50 redeemable stock price multiplied by total shares outstandi
Slide 28: Balance Sheet Strength Positions Us Well for Future Growth Opportunities
Balance Sheet Strength Positions Us Well for Future Growth Opportunities TOTAL DEBT MATURING 6.7% 8.5% 6.3% 12.7% 8.5% 11.9% 6.3% 9.5% 8.4% 0.0% 21.2% 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 6/30/2024 MAA SECTOR AVG2,3 Total debt / adjust
Slide 29: Multiple Disparity
Multiple Disparity MAA FULL CYCLE EARNINGS PERFORMANCE UNDERPRICED COMPARED TO SECTOR FFO Multiple2 MAA: 17.6 Peer Avg: 19.0 Avg Same Store NOI Growth1 MAA: 4.3% Peer Avg: 3.6% Source: Green Street; Company Filings; S&P Global 1 Peer constituents include AVB, CPT, EQR, ESS and UDR. 2014-2023 from Co
Slide 30: 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 peer average Actual historical performance suggests this discount is not warranted; same st
Slide 31: 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 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 (1) Included in Other non-operating expense (income) in the Consolidated Statements of Operations. (2) For the three months ended June 30, 2024, loss o
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 Six Months Ended June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Net income available for MAA common
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 Dollars in thousands Three Months Ended Twelve Months Ended June 30, 2024 June 30, 2023 June 30, 2024 December 31, 2023 Net income $ 104,662 $ 149,657 $ 530,872 $ 567,831 Depreciation
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 June 30, 2024 December 31, 2023 Unse
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
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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