Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — NAREIT Investor Forum June 2007
24 slides from Mid-america Apartment Communities's conference presentation, Jun 4, 2007
Slide 1: NAREIT Investor Forum June 2007
NAREIT Investor Forum June 2007
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Statements contained in this presentation, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which can cause act
Slide 3: Strong Public Company Platform
Strong Public Company Platform • IPO January 1994 – Exclusively multifamily – $3.0 billion total capitalization • High quality portfolio – Sunbelt – High Growth region focus – 137 communities; 40,036 units – Average age 14 years • Strong balance sheet – Debt/Market Cap of 42% – Growth capacity – Sol
Slide 4: Focus on High Growth Region
Focus on High Growth Region Southeast and southwest regional focus, with solid diversification across the region MAA’s investment region is expected to capture higher demand for multifamily housing as compared to other regions of the U.S.
Slide 5: Portfolio Strategy
Portfolio Strategy • Significant change in market profile of portfolio Stable Income Markets over the last few years Columbus High Growth Markets Dallas Lexington • As a result, a much more Augusta Atlanta robust performance profile Houston Columbia Others… • Focus on high growth Phoenix Tampa regio
Slide 6: High-Barrier Vs. High-Growth
High-Barrier Vs. High-Growth % of MAA 2007 through 2010 Mean Growth Over 90% of Major Market Portfolio Employment New Supply Absorption Memphis 9.8% 1.3% 0.9% 0.37% MF REIT Raleigh-Cary 3.7% 2.1% 1.4% 0.34% development Jacksonville, FL 8.1% 1.3% 1.4% 0.22% is occurring in San Jose-Santa Clara CA 1.1
Slide 7: MAA - Position to Out Perform
MAA - Position to Out Perform Strong demand fundamentals, muted new supply projections and well diversified portfolio profile, set the stage for solid performance prospects over the next few years Absorption as % of inventory stock 2007 2008 2009 2010 Mean Mid-America 0.05% 0.15% 0.18% 0.02% 0.09% B
Slide 8: 20% Newer Than Sector Average
20% Newer Than Sector Average Steady growth and recycling efforts continue to position MAA’s portfolio as one of the younger portfolios in the sector; solid long-term upside potential. Portfolio Age Units owned Post 10 20,028 Camden 10 53,827 Mid-America 14 40,036 Avalon Bay 14 39,800 Colonial 15 31
Slide 9: Sophisticated Operating Platform
Sophisticated Operating Platform Collection Agency Collections Integration; real-time Management • Innovative Solutions for Lease Delinquency reporting Key Processes Revenue Training and 24/7 training availability; high degree of control; Procedures – Marketing and leasing Optimizer on-line procedur
Slide 10: Strong Internal Growth Prospects
Strong Internal Growth Prospects Continued recovery; Solid market fundamentals Tightening of single family Positioned for mortgage continued growth market in value and steady performance; high New technology earnings quality (LRO) and strong operating platform Redevelopment upside within portfolio
Slide 11: Solid Apartment Market Prospects
Solid Apartment Market Prospects Recent trends impacting home ownership favor MAA; 25% of Mid-America’s resident turnover is attributable to SF home buying • Home ownership peaked in 2005 at 69.1%; encouraged by easy credit and expectations of price inflation • Mid-America’s turnover and occupancy s
Slide 12: Interior Re-Position Upside
Interior Re-Position Upside Brentwood Downs Nashville, TN 93 Units Completed 14% rent increase 2007 Plan focused on 33 communities with another 7 communities being tested this year. Targeting to complete 1,500 to 2,000 units this year as part of routine unit turnover. Runaway Bay Charleston, SC 203
Slide 13: Significant Redevelopment Upside
Significant Redevelopment Upside • Over 10,000 units within the existing portfolio have been initially identified with potential for redevelopment – Kitchen/bath upgrades; typically at $4,500/unit – Incremental rent increases of $80 to $100 per month • Assuming 2,000 unit upgraded annually, program
Slide 14: Improving New Growth Prospects
Improving New Growth Prospects • Broader market focus and expanded product focus will widen field of opportunity for capturing transactions • Regional focus and extensive network developed over last thirteen years generates high deal flow • FL market acquisition opportunities increasing • New value-
Slide 15: New "Value Add" Development
New “Value Add” Development Three new “value add” new development projects currently underway. At stabilization new units are projected to deliver ± 7.5% NOI yields and contribute $1MM FFO ($.03 - $.04/share) Brier Creek Phase II St. Augustine at the Lake II Copper Ridge Raleigh, NC Jacksonville, FL
Slide 16: Strong Joint Venture Platform
Strong Joint Venture Platform • Experienced with JV programs – Blackstone ’98 – ’01 – Crow Holdings ’01 – ’04 – Crow Holdings ’04 – ’06 • Average IRR’s captured for MAA range 30% - 38% • Opportunity to further “monetize” and leverage value of deal flow, asset management and property management platf
Slide 17: Mid-America Multifamily Fund I
Mid-America Multifamily Fund I $500MM Fund, One-Third Owned by Mid-America • Value-add investment opportunities – 7+ year old properties – Repositioning potential – Management upside • 65% leverage • 3-year target investment period, 6-year target hold • Sunbelt markets; existing MAA foot-print • MAA
Slide 18: Solid Balance Sheet Position
Solid Balance Sheet Position Mid-America’s balance sheet has significantly improved over the last few years. Coverage ratios and capacity are in line with sector averages; especially when considering lower risk investment and growth strategy. • Leverage (debt + preferred as a % of gross assets) has
Slide 19: Strong Q1 Results
Strong Q1 Results • Record Results – Quarterly FFO/share result is a record high – FFO was 2 cents/share ahead of guidance mid-point – AFFO was up 6% over prior year – Same store revenues up 4.9% • Last JV property sold at 4.6% cap rate • Lease-ups provide growth potential – Brier Creek II – Talus R
Slide 20: Guidance for 2007
Guidance for 2007 • Same store NOI 5% - 6% • $25MM - $30MM new development FFO/share • $7MM - $10MM redevelopment $3.40 - $3.60 (5.1% growth at mid-point) • $150MM core acquisitions AFFO/share • $150MM JV acquisitions $2.77 - $2.97 • Long-term value/current year (11% growth at mid-point) “headwind”
Slide 21: Excessive Spread In Pricing
Excessive Spread In Pricing Price/’07 Projected Price/’07 Projected • “High Barrier” markets offering less favorable absorption than FFO AFFO some “High Growth” markets PPS 25.2 PPS 29.4 • Over 90% of multifamily REIT AVB 22.7 CLP 25.0 development is concentrated in ASN 22.3 ASN 24.3 coastal markets
Slide 22: Investment Summary
Investment Summary • Focus on high growth region • Proven investment disciplines • High quality of earnings • Redevelopment upside in portfolio • Value add new development • Innovative asset management • Aggressive property management • Proven JV platform & opportunity • Solid balance sheet position
Slide 23: End of Presentation
(YY. Mid-America Apartment Communities End of Presentation
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