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Sep 30, 2023
MAA Q3 2023 Earnings Report
Reported operating results ahead of expectations, driven by solid apartment housing demand and positive migration trends.
Key Takeaways
Mid-America Apartment Communities (MAA) reported third-quarter 2023 results that exceeded expectations, driven by strong demand for apartment housing, stable employment conditions, positive migration trends, and low resident move-outs. The company's diversified portfolio and strong operating platform have positioned it well to navigate the current new supply pipeline and pursue new growth opportunities.
Same Store Portfolio produced revenue growth of 4.1% compared to the same period in the prior year, with Average Effective Rent per Unit up 4.5% and Average Physical Occupancy of 95.7%.
Same Store Portfolio property operating expense and Net Operating Income (NOI) increased by 4.7% and 3.7%, respectively, compared to the same period in the prior year.
Resident turnover remained low at 45.2% on a trailing 12 month basis, driven by historically low levels of move-outs associated with buying single family-homes.
MAA's balance sheet remains strong with a historically low Net Debt/Adjusted EBITDAre ratio of 3.4x and $1.4 billion of combined cash and available capacity under MAALP’s unsecured revolving credit facility as of September 30, 2023.
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MAA Revenue by Segment
Revenue by Segment
Total Same Store Revenue
CapyFin.com Forward Guidance
MAA is updating its prior 2023 guidance for Earnings per common share, Core FFO per Share and Core AFFO per Share, along with its expectations for growth in Property revenue, Property operating expense and NOI for the Same Store Portfolio in 2023.
Positive Outlook
- Property revenue growth of 5.75% to 6.75%
- Core FFO per Share - diluted $9.06 to $9.22
- Core AFFO per Share - diluted $8.14 to $8.30
- NOI growth 5.50% to 6.50%
- Core FFO for the fourth quarter of 2023 to be in the range of $2.21 to $2.37 per Share, or $2.29 per Share at the midpoint.
Challenges Ahead
- Earnings per common share - diluted $4.36 to $4.52
- Property operating expense growth 6.00% to 7.00%
- The delivery of new apartment supply is currently impacting rent growth performance associated with new move-in residents, and we expect this pressure to persist for another few quarters.
- MAA generally cannot predict the timing of forecasted acquisition and disposition activity within a particular quarter (rather than during the course of the full year).
- The timing and amount of future dividends will depend on actual cash flows from operations, MAA’s financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986 and other factors as MAA’s Board of Directors deems relevant.