Mid-America Apartment Communities (MAA) Q2 2024 earnings summary

Executive summary

• Core FFO for Q2 2024 was $2.22 per share, $0.03 above guidance midpoint, with strong demand, stable occupancy, and favorable expenses, though net income available for common shareholders was $101.0 million, down 30.2% year-over-year.

• Same Store segment revenue increased 0.7% year-over-year, with average physical occupancy at 95.5% and average effective rent per unit up 0.5%.

• Portfolio benefits from diversification across large and mid-tier markets, with strong rent-to-income ratios, low delinquency, and record resident retention and satisfaction.

• Property operating expenses rose 5.9% year-over-year, mainly from higher personnel, insurance, office, and utility costs.

• Portfolio comprised 291 apartment communities across 16 states and DC, with seven development projects underway totaling 2,617 units.

Financial highlights

• Q2 2024 revenues were $546.4 million, up from $535.1 million in Q2 2023, with net income at $101.0 million, or $0.86 per diluted share.

• Core FFO for Q2 2024 was $266.6 million, down from $273.3 million in Q2 2023; Core FFO per diluted share was $2.22, down from $2.28.

• Net debt to EBITDA/Adjusted EBITDAre was 3.7x as of June 30, 2024.

• 93.3% of debt was fixed rate with a 7.4-year average maturity at a 3.8% effective rate.

• Issued $400M in 7-year bonds at just below 5.4%, refinancing a 4% bond maturing in June.

Outlook and guidance

• Midpoint of full-year core FFO guidance reaffirmed at $8.88 per share, range narrowed to $8.74–$9.02; Core AFFO per share guidance is $7.78–$8.06.

• Effective rent growth guidance midpoint lowered by 35 bps to 0.5%; average occupancy guidance lowered by 20 bps to 95.5%.

• Same-store NOI guidance reaffirmed at -1.3% for 2024; full-year EPS guidance revised to $4.37–$4.65.

• Development spend guidance increased to $350M for the year; capital expenditures for development and redevelopment expected in line with 2023.

• Expect supply pressure to moderate in 2025, with demand outpacing new deliveries.