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Mid-America Apartment (MAA) Q3 FFO & Revenues Top Estimates

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Mid-America Apartment Communities, Inc. (MAA - Free Report) , commonly referred to as MAA, reported third-quarter 2020 core funds from operations (FFO) per share of $1.57, surpassing the Zacks Consensus Estimate of $1.53. The reported figure remained flat year over year.

The residential REIT’s quarterly results reflect rise in average effective rent per unit for the same-store portfolio. However, fall in same-store net operating income (NOI) hurt the company’s performance.

Rental and other property revenues came in at $423.2 million during the September-end quarter, outpacing the Zacks Consensus Estimate of $414.1 million. The reported figure was also came in 1.8% higher than the year-ago quarter’s $415.6 million.

The company stated that as of Oct 26, rent cash receipts and deferred payments aggregated 99.2% and 98.8% of billed residential rent for the third quarter and October, respectively. As of the same date, average physical occupancy for the same-store portfolio was 95.6% for October.

Quarter in Detail

The same-store portfolio revenues grew 2.1% on rise in average effective rent per unit of 1.8%, year over year. During the September-end quarter, the company’s same-store NOI edged down 1.1% year over year. Moreover, average physical occupancy for the same-store portfolio for the third quarter was 95.6%, contracting 50 basis points (bps), year over year.

During the third quarter, rent growth in the company’s same-store portfolio for both new and renewing leases, compared with the prior lease, came in at 0.8% on a combined basis.

As of Sep 30, 2020, unencumbered NOI was 93.2% of total NOI, higher than the 91.1% reported as of Jun 30, 2020.

As of Sep 30, 2020, MAA held cash and cash equivalents of $18.4 million, down from $20.5 million as of Dec 31, 2019. Additionally, as of the same date, total debt outstanding was $4.4 billion.

Furthermore, as of the same date, $980 million of combined cash and capacity were available under its unsecured revolving credit facility, net of commercial paper borrowings.

Portfolio Activity

During the July-September period, MAA sold a land parcel in Huntsville, AL, spanning an area of 27 acres for net proceeds of $2.6 million, resulting in a gain on sale of non-depreciable real estate assets of $1.3 million.

During the third quarter, the company redeveloped 1205 units. As of Sep 30, 2020, it had six development communities under construction with an expected average stabilized NOI yield of 6.1%.

MAA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITS

Boston Properties Inc.’s (BXP - Free Report) third-quarter 2020 FFO per share of $1.57 missed the Zacks Consensus Estimate of $1.64. The reported figure also decreased 4.3% from the year-ago quarter’s $1.64.

SITE Centers Corp.’s (SITC - Free Report) third-quarter operating FFO per share of 23 cents came in line with the Zacks Consensus Estimate. The reported figure, however, declined 23.3% year over year.

Highwoods Properties, Inc. (HIW - Free Report) third-quarter 2020 FFO per share of 86 cents lagged the Zacks Consensus Estimate of 88 cents. The figure includes 5 cents from debt extinguishment charges and non-cash straight-line credit losses. Nonetheless, the reported figure improved 3.6% from the 83 cents reported in the year-ago period.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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