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Mid-America Apartment Communities (MAA - Free Report) , which is commonly known as MAA, reported third-quarter 2024 core funds from operations (FFO) per share of $2.21, which surpassed the Zacks Consensus Estimate of $2.18. However, the reported figure fell 3.5% year over year from $2.29.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results reflect healthy demand despite elevated new supply and strong average physical occupancy for the same-store portfolio. The company witnessed low levels of resident turnover. However, an increase in same-store portfolio property operating expenses partly marred the positives.
Rental and other property revenues were $551.1 million, which surpassed the Zacks Consensus Estimate marginally. The reported figure was also 1.7% higher than the year-ago quarter’s nearly $542 million.
Per Eric Bolton, the chairman and CEO of MAA, "We continue to see strong demand for apartment housing, which is contributing to the steady absorption of the high volume of new supply delivered in the third quarter, which we believe has now peaked.” He added “We are confident that in calendar year 2025 we will see a meaningful decline in the amount of new supply impacting our portfolio, and we will enter a new multi-year cycle with demand outpacing supply.”
MAA’s Q3 in Detail
The same-store portfolio’s revenues remained flat on a year-over-year basis, with a decline of 0.4% in the average effective rent per unit. The same-store portfolio’s property operating expenses rose 3% on a year-over-year basis. The same-store portfolio’s net operating income (NOI) fell by 1.7% on a year-over-year basis.
The average physical occupancy for the same-store portfolio in the third quarter was 95.7%, which was similar to the year-ago quarter. Our estimate was 95.8%.
As of Sept. 30, 2024, resident turnover remained historically low at 42.8% on a trailing 12-month basis. This stemmed from record low levels of move-outs related to buying single-family homes.
During the third quarter, new lease pricing declined 5.4%. The rise in renewal lease pricing remained steady, increasing by 4.1%. As a result, there was a decrease of 0.2% for both new and renewing lease pricing on a blended basis in the third quarter of 2024.
MAA’s Portfolio Activity
In September 2024, MAA bought out a 310-unit multifamily apartment community in an initial lease-up located in Orlando, FL, for about $84 million. In July 2024, MAA agreed to finance a third party's development of a 239-unit multifamily apartment community currently under construction located in Charlotte, NC.
As of Sept. 30, 2024, MAA had eight communities under development, with 2,762 units at a total projected cost of $978.3 million and an estimated $367.9 million remaining to be funded. During the quarter end, MAA started developing a 306-unit multifamily apartment community in Richmond, VA. During the same time, it completed the development of Novel Daybreak in Salt Lake City, Utah Market.
Since the beginning of the year through Sept. 30, 2024, MAA has redeveloped 4,535 apartment units. As of the same date, MAA completed the installation of Smart Home technology in more than 94,000 units across its apartment community portfolio. This move provided an increase in the average effective rent per unit of around $25 since the initiative started during the first quarter of 2019.
MAA’s Balance Sheet Position
MAA exited the third quarter of 2024 with cash and cash equivalents of $50.2 million, down from $62.8 million recorded as of June 30, 2024.
As of Sept. 30, 2024, MAA had a strong balance sheet with $805.7 million in combined cash and capacity available under its unsecured revolving credit facility. It had a net debt/adjusted EBITDAre ratio of 3.9 times.
As of the same date, the total debt outstanding was $4.9 billion. Its total debt average years to maturity was seven years. As of Sept. 30, 2024, unencumbered NOI was 95.8% of the total NOI.
MAA’s 2024 Guidance
MAA projects a fourth-quarter 2024 core FFO per share in the band of $2.15-$2.31, with $2.23 at the midpoint. The Zacks Consensus Estimate of $2.25 lies within the range.
This residential REIT revised its guidance for 2024 core FFO per share and now expects it in the range of $8.80-$8.96, with the midpoint remaining unchanged at $8.88, compared with the $8.74-$9.02 range guided earlier. The Zacks Consensus Estimate for is currently pegged at $8.88 and lies within the range.
For 2024, management anticipates same-store property revenue growth of 0.25%-0.75% and operating expense growth of 3.25%-4.25%. As a result, the same-store NOI growth is anticipated between -1.90% and -0.70%. Average physical occupancy for the same-store portfolio is guided in the range of 95.4%-95.6%, with the midpoint being 95.5%.
We now look forward to the earnings releases of other REITs, such as AvalonBay Communities (AVB - Free Report) and Vornado Realty Trust (VNO - Free Report) , both of which are slated to report on Nov. 4.
The Zacks Consensus Estimate for AvalonBay’s third-quarter 2024 FFO per share stands at $2.71, indicating a 1.9% increase year over year. AVB currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Vornado Realty Trust’s third-quarter 2024 FFO per share is pegged at 51 cents, implying a 22.7% year-over-year decline. VNO currently carries a Zacks Rank #3.
Note: Anything related to earningspresented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Mid-America Apartment's Q3 FFO & Revenues Beat Estimates
Mid-America Apartment Communities (MAA - Free Report) , which is commonly known as MAA, reported third-quarter 2024 core funds from operations (FFO) per share of $2.21, which surpassed the Zacks Consensus Estimate of $2.18. However, the reported figure fell 3.5% year over year from $2.29.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results reflect healthy demand despite elevated new supply and strong average physical occupancy for the same-store portfolio. The company witnessed low levels of resident turnover. However, an increase in same-store portfolio property operating expenses partly marred the positives.
Rental and other property revenues were $551.1 million, which surpassed the Zacks Consensus Estimate marginally. The reported figure was also 1.7% higher than the year-ago quarter’s nearly $542 million.
Per Eric Bolton, the chairman and CEO of MAA, "We continue to see strong demand for apartment housing, which is contributing to the steady absorption of the high volume of new supply delivered in the third quarter, which we believe has now peaked.” He added “We are confident that in calendar year 2025 we will see a meaningful decline in the amount of new supply impacting our portfolio, and we will enter a new multi-year cycle with demand outpacing supply.”
MAA’s Q3 in Detail
The same-store portfolio’s revenues remained flat on a year-over-year basis, with a decline of 0.4% in the average effective rent per unit. The same-store portfolio’s property operating expenses rose 3% on a year-over-year basis. The same-store portfolio’s net operating income (NOI) fell by 1.7% on a year-over-year basis.
The average physical occupancy for the same-store portfolio in the third quarter was 95.7%, which was similar to the year-ago quarter. Our estimate was 95.8%.
As of Sept. 30, 2024, resident turnover remained historically low at 42.8% on a trailing 12-month basis. This stemmed from record low levels of move-outs related to buying single-family homes.
During the third quarter, new lease pricing declined 5.4%. The rise in renewal lease pricing remained steady, increasing by 4.1%. As a result, there was a decrease of 0.2% for both new and renewing lease pricing on a blended basis in the third quarter of 2024.
MAA’s Portfolio Activity
In September 2024, MAA bought out a 310-unit multifamily apartment community in an initial lease-up located in Orlando, FL, for about $84 million. In July 2024, MAA agreed to finance a third party's development of a 239-unit multifamily apartment community currently under construction located in Charlotte, NC.
As of Sept. 30, 2024, MAA had eight communities under development, with 2,762 units at a total projected cost of $978.3 million and an estimated $367.9 million remaining to be funded. During the quarter end, MAA started developing a 306-unit multifamily apartment community in Richmond, VA. During the same time, it completed the development of Novel Daybreak in Salt Lake City, Utah Market.
Since the beginning of the year through Sept. 30, 2024, MAA has redeveloped 4,535 apartment units. As of the same date, MAA completed the installation of Smart Home technology in more than 94,000 units across its apartment community portfolio. This move provided an increase in the average effective rent per unit of around $25 since the initiative started during the first quarter of 2019.
MAA’s Balance Sheet Position
MAA exited the third quarter of 2024 with cash and cash equivalents of $50.2 million, down from $62.8 million recorded as of June 30, 2024.
As of Sept. 30, 2024, MAA had a strong balance sheet with $805.7 million in combined cash and capacity available under its unsecured revolving credit facility. It had a net debt/adjusted EBITDAre ratio of 3.9 times.
As of the same date, the total debt outstanding was $4.9 billion. Its total debt average years to maturity was seven years. As of Sept. 30, 2024, unencumbered NOI was 95.8% of the total NOI.
MAA’s 2024 Guidance
MAA projects a fourth-quarter 2024 core FFO per share in the band of $2.15-$2.31, with $2.23 at the midpoint. The Zacks Consensus Estimate of $2.25 lies within the range.
This residential REIT revised its guidance for 2024 core FFO per share and now expects it in the range of $8.80-$8.96, with the midpoint remaining unchanged at $8.88, compared with the $8.74-$9.02 range guided earlier. The Zacks Consensus Estimate for is currently pegged at $8.88 and lies within the range.
For 2024, management anticipates same-store property revenue growth of 0.25%-0.75% and operating expense growth of 3.25%-4.25%. As a result, the same-store NOI growth is anticipated between -1.90% and -0.70%. Average physical occupancy for the same-store portfolio is guided in the range of 95.4%-95.6%, with the midpoint being 95.5%.
MAA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Mid-America Apartment Communities, Inc. Price, Consensus and EPS Surprise
Mid-America Apartment Communities, Inc. price-consensus-eps-surprise-chart | Mid-America Apartment Communities, Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs, such as AvalonBay Communities (AVB - Free Report) and Vornado Realty Trust (VNO - Free Report) , both of which are slated to report on Nov. 4.
The Zacks Consensus Estimate for AvalonBay’s third-quarter 2024 FFO per share stands at $2.71, indicating a 1.9% increase year over year. AVB currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Vornado Realty Trust’s third-quarter 2024 FFO per share is pegged at 51 cents, implying a 22.7% year-over-year decline. VNO currently carries a Zacks Rank #3.
Note: Anything related to earningspresented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.