GERMANTOWN, Tenn., May 1, 2024 /PRNewswire/ -- Mid-America Apartment Communities, Inc., or MAA (NYSE:MAA), today announced operating results for the quarter ended March 31, 2024. First Quarter 2024 Operating Results Three months ended March 31, 2024 2023 Earnings per common share - diluted $ 1.22 $ 1.16 Funds from operations (FFO) per Share - diluted $ 2.41 $ 2.31 Core FFO per Share - diluted $ 2.22 $ 2.28 A reconciliation of Net income available for MAA common shareholders to FFO and Core FFO, and discussion of the components of FFO and Core FFO, can be found later in this release. FFO per Share – diluted and Core FFO per Share – diluted include diluted common shares and units.  Eric Bolton, Chairman and Chief Executive Officer, said, "Performance trends and Core FFO results for the first quarter were in line with our expectations reflecting the impact of new supply deliveries across a number of markets.  We enter the busy summer leasing season well positioned with stable occupancy, high leasing traffic, low resident turnover, and strong collections performance.  With continued solid demand and the resulting steady absorption of the new supply pipeline, we continue to believe that the decline in new supply deliveries expected late this year and into 2025 will fuel a strong and quick rebound in rent performance.  MAA's investment-grade balance sheet is well positioned for both the near-term leasing conditions and to capture emerging new growth opportunities." Highlights During the first quarter of 2024, MAA's Same Store Portfolio produced growth in revenues of 1.4%, as compared to the same period in the prior year, with Average Effective Rent per Unit up 1.5% while capturing Average Physical Occupancy of 95.3%. During the first quarter of 2024, MAA's Same Store Portfolio property operating expense increased by 5.4% and MAA's Same Store Portfolio Net Operating Income (NOI) decreased by 0.7%, in each case as compared to the same period in the prior year. As of March 31, 2024, resident turnover remained historically low at 44.4% on a trailing twelve month basis driven by a record low level of move-outs associated with buying single family-homes of 12.9%. As of the end of the first quarter of 2024, MAA had five communities under development, representing 1,970 units once complete, with a projected total cost of $647.3 million and an estimated $201.7 million remaining to be funded. During April 2024, MAA started construction on a 302-unit multifamily apartment community located in the Charlotte, North Carolina market with a projected total cost of approximately $102 million on land previously acquired through our pre-purchase development program. Subsequent to the end of the first quarter of 2024, MAA closed on the acquisition of a land parcel located in the Phoenix, Arizona market through our pre-purchase development program with construction expected to begin in the second quarter of 2024 on a 345-unit multifamily apartment community. As of the end of the first quarter of 2024, MAA had one recently completed development community and the two communities acquired during the fourth quarter of 2023 in lease-up. Two communities are expected to stabilize in the third quarter of 2024, and one is expected to stabilize in the fourth quarter of 2024. In January 2024, MAA's operating partnership, Mid-America Apartments, L.P. (referred to as MAALP or the Operating Partnership), issued $350.0 million of 10-year unsecured senior notes at a coupon of 5.000% and an issue price of 99.019%. MAA's balance sheet remains strong with a Net Debt/Adjusted EBITDAre ratio of 3.6x and $1.1 billion of combined cash and available capacity under MAALP's unsecured revolving credit facility as of March 31, 2024. Same Store Portfolio Operating ResultsTo ensure comparable reporting with prior periods, the Same Store Portfolio includes properties that were owned by MAA and stabilized at the beginning of the previous year. Same Store Portfolio results for the three months ended March 31, 2024 as compared to the same period in the prior year are summarized below: Three months ended March 31, 2024 vs. 2023 Revenues Expenses NOI Average Effective Rent per Unit Same Store Operating Growth 1.4 % 5.4 % -0.7 % 1.5 % A reconciliation of Net income available for MAA common shareholders to NOI, including Same Store NOI, and discussion of the components of NOI, can be found later in this release. Same Store Portfolio operating statistics for the three months ended March 31, 2024, which were in line with prior guidance expectations, are summarized below: Three months ended March 31, 2024 March 31, 2024 Average Effective Rent per Unit Average Physical Occupancy Resident Turnover Same Store Operating Statistics $ 1,690 95.3 % 44.4 % Same Store Portfolio lease pricing for new leases that were effective during the first quarter of 2024 was impacted by new supply pressures and typical first quarter seasonal factors. New lease pricing declined 6.2% during the first quarter of 2024, representing an 80-basis point improvement from the fourth quarter of 2023.  The increase in renewal lease pricing remained steady, increasing 5.0%, representing a 20-basis point improvement from the fourth quarter of 2023.  This in turn produced a decrease of 0.6% for both new and renewing lease pricing on a blended basis in the first quarter of 2024, representing a 100-basis point improvement from the fourth quarter of 2023. Through April 29, 2024, both new and renewal lease pricing for leases that were effective during April 2024 further improved 10-basis points compared to the first quarter of 2024, declining 6.1% and increasing 5.1%, respectively, resulting in a decrease of 0.4% for both new and renewing lease pricing on a blended basis, a 20-basis point improvement from the first quarter of 2024, while Average Physical Occupancy for April 2024 improved to 95.5%.  Development and Lease-up ActivityA summary of MAA's development communities under construction as of the end of the first quarter of 2024 is set forth below (dollars in thousands): Units as of Development Costs as of Expected Project Total March 31, 2024 March 31, 2024 Completions By Year Development Expected Spend Expected Projects (1) Total Delivered Leased Total to Date Remaining 2024 2025 5 1,970 458 243 $ 647,250 $ 445,572 $ 201,678 3 2 (1)        Three of the development projects are currently leasing.     During the first quarter of 2024, MAA funded $43.8 million of costs for current and planned projects, including predevelopment activities. In April 2024, MAA started construction on a 302-unit multifamily apartment community located in the Charlotte, North Carolina market on land previously acquired through our pre-purchase development program.  The development is expected to be completed in the third quarter of 2027 with an expected stabilization in the second quarter of 2028 and expected total cost of approximately $102 million.  In April 2024, MAA also closed on the acquisition of a land parcel located in the Phoenix, Arizona market through our pre-purchase development program with construction on a 345-unit multifamily apartment community expected to begin in the second quarter of 2024.   MAA expects to begin four to six multifamily development projects over the next 18 to 24 months including the two projects expected to start in the second quarter of  2024 discussed above. A summary of the total units, physical occupancy and cost of MAA's lease-up communities as of the end of the first quarter of 2024 is set forth below (dollars in thousands): Total As of March 31, 2024 Lease-Up Total Physical Spend Projects (1) Units Occupancy to Date 3 1,015 71.0 % $ 299,673 (1)        Two of the lease-up projects are expected to stabilize in the third quarter of 2024, and one is expected to stabilize in the fourth quarter of 2024.   The current expected average stabilized NOI yield on the three in progress development communities and one recently completed development community that are currently leasing is 6.5%. Property Redevelopment and Repositioning ActivityA summary of MAA's interior redevelopment program as of the end of the first quarter of 2024 is set forth below: As of March 31, 2024 Units Average Cost Increase in Average Completed per Unit Effective Rent per Unit YTD YTD YTD Redevelopment 1,099 $ 6,311 $ 93 As of March 31, 2024, MAA had completed installation of Smart Home technology (unit entry locks, mobile control of lights and thermostat and leak monitoring) in over 94,000 units across its apartment community portfolio providing an increase in Average Effective Rent per Unit of approximately $25 since the initiative began during the first quarter of 2019. During the first quarter of 2024, MAA continued its property repositioning program to upgrade and reposition the amenity and common areas at select apartment communities for higher and above market rent growth after projects are completed and units are fully repriced. For the three months ended March 31, 2024, MAA spent $0.5 million on this program.  MAA expects to begin six projects under this program in the second half of 2024.  Capital ExpendituresA summary of MAA's capital expenditures and Funds Available for Distribution (FAD) for the three months ended March 31, 2024 and 2023 is set forth below (dollars in millions, except per Share data): Three months ended March 31, 2024 2023 Core FFO attributable to common shareholders and unitholders $ 266.2 $ 272.2 Recurring capital expenditures (19.0) (16.3) Core Adjusted FFO (Core AFFO) attributable to common shareholders and unitholders 247.2 255.9 Redevelopment, revenue enhancing, commercial and other capital expenditures (32.8) (51.4) FAD attributable to common shareholders and unitholders $ 214.4 $ 204.5 Core FFO per Share - diluted $ 2.22 $ 2.28 Core AFFO per Share - diluted $ 2.06 $ 2.14 A reconciliation of Net income available for MAA common shareholders to FFO, Core FFO, Core AFFO and FAD, and discussion of the components of FFO, Core FFO, Core AFFO and FAD, can be found later in this release.  Balance Sheet and Financing ActivitiesAs of March 31, 2024, MAA had $1.1 billion of combined cash and available capacity under MAALP's unsecured revolving credit facility. Dividends and distributions paid on shares of common stock and noncontrolling interests during the first quarter of 2024 were $176.2 million, as compared to $166.1 million for the same period in the prior year. In January 2024, MAALP publicly issued $350 million of unsecured senior notes due March 2034 with a coupon rate of 5.000% per annum, and at an issue price of 99.019%. Interest is payable semi-annually in arrears on March 15 and September 15 of each year, commencing September 15, 2024. The proceeds from the sale of the notes were used to repay borrowings on MAALP's commercial paper program. The notes have an effective interest rate of 5.123%. Balance sheet highlights as of March 31, 2024 are summarized below (dollars in billions): Total debt to adjusted total assets (1) Net Debt/Adjusted EBITDAre (2) Total debt outstanding Average effective interest rate Fixed rate debt as a % of total debt Total debt average years to maturity 28.1 % 3.6x $ 4.6 3.6 % 94.9 % 7.2 (1)        As defined in the covenants for the bonds issued by MAALP. (2)        Adjusted EBITDAre is calculated for the trailing twelve month period ended March 31, 2024. A reconciliation of Unsecured notes payable and Secured notes payable to Net Debt and a reconciliation of Net income to Adjusted EBITDAre, along with discussion of the components of Net Debt and Adjusted EBITDAre, can be found later in this release. 121st Consecutive Quarterly Common Dividend DeclaredMAA declared its 121st consecutive quarterly common dividend, which will be paid on April 30, 2024 to holders of record on April 15, 2024. The current annual dividend rate is $5.88 per common share, 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. MAA's Board of Directors may modify the dividend policy from time to time. 2024 Earnings and Same Store Portfolio GuidanceMAA is updating its prior 2024 guidance for Earnings per diluted common share and reaffirming its prior 2024 guidance for Core FFO per diluted Share, Core AFFO per diluted Share and Same Store performance.  MAA expects to update its 2024 Earnings per diluted common share, Core FFO per diluted Share and Core AFFO per diluted Share guidance on a quarterly basis. FFO, Core FFO and Core AFFO are non-GAAP financial measures. Acquisition and disposition activity materially affects depreciation and capital gains or losses, which combined, generally represent the majority of the difference between Net income available for common shareholders and FFO. As discussed in the definitions of non-GAAP financial measures found later in this release, MAA's definition of FFO is in accordance with the National Association of Real Estate Investment Trusts', or NAREIT's, definition, and Core FFO represents FFO as adjusted for items that are not considered part of MAA's core business operations. MAA believes that Core FFO is helpful in understanding operating performance in that Core FFO excludes not only depreciation expense of real estate assets and certain other non-routine items, but it also excludes certain items that by their nature are not comparable over periods and therefore tend to obscure actual operating performance. 2024 Guidance Previous Range Previous Midpoint Revised Range Revised Midpoint Earnings: Full Year 2024 Full Year 2024 Full Year 2024 Full Year 2024 Earnings per common share - diluted $4.45 to $4.85 $4.65 $4.66 to $5.02 $4.84 Core FFO per Share - diluted $8.68 to $9.08 $8.88 $8.70 to $9.06 $8.88 Core AFFO per Share - diluted $7.72 to $8.12 $7.92 $7.74 to $8.10 $7.92 MAA Same Store Portfolio: Property revenue growth 0.15% to 1.65% 0.90 % No Change N/A Property operating expense growth 4.10% to 5.60% 4.85 % No Change N/A NOI growth -2.80% to 0.20% -1.30 % No Change N/A MAA expects Core FFO for the second quarter of 2024 to be in the range of $2.11 to $2.27 per diluted Share, or $2.19 per diluted Share at the midpoint. The difference between Core FFO per diluted Share for the first quarter of 2024 to the midpoint of MAA's guidance for the second quarter of 2024 is summarized below: Core FFO per diluted Share Q1 2024 reported results $ 2.22 Same Store Revenues 0.01 Same Store Expenses (1) (0.08) Non-Same Store NOI 0.02 Overhead 0.04 Interest expense and Other non-operating income (expense) (0.02) Q2 2024 guidance midpoint $ 2.19 (1)        The projected quarter-over-quarter change in Same Store operating expenses represents a 4.9% increase from the second quarter of 2023 and is primarily driven by higher expected building repair and maintenance, personnel and marketing costs.  This pattern of higher operating expense is typical between the first and second quarter as we transition into the busier summer leasing season. MAA does not forecast Earnings per diluted common share on a quarterly basis as 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). Additional details and guidance items are provided in the Supplemental Data to this release.  Supplemental Material and Conference CallSupplemental Data to this release can be found on the "For Investors" page of the MAA website at www.maac.com. MAA will host a conference call to further discuss first quarter results on May 2, 2024, at 9:00 AM Central Time. The conference call-in number is (800)-715-9871. You may also join the live webcast of the conference call by accessing the "For Investors" page of the MAA website at www.maac.com. MAA's filings with the Securities and Exchange Commission (SEC) are filed under the registrant names of Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P. About MAAMAA, an S&P 500 company, is a real estate investment trust (REIT) focused on delivering full-cycle and superior investment performance for shareholders through the ownership, management, acquisition, development and redevelopment of quality apartment communities primarily in the Southeast, Southwest and Mid-Atlantic regions of the United States. As of March 31, 2024, MAA had ownership interest in 102,661 apartment units, including communities currently in development, across 16 states and the District of Columbia. For further details, please visit the MAA website at www.maac.com or contact Investor Relations at or via mail at MAA, 6815 Poplar Ave., Suite 500, Germantown, TN 38138, Attn: Investor Relations. Forward-Looking StatementsSections of this release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Such forward-looking statements include, without limitation, statements regarding expected operating performance and results, property stabilizations, property acquisition and disposition activity, joint venture activity, development and renovation activity and other capital expenditures, and capital raising and financing activity, as well as lease pricing, revenue and expense growth, occupancy, interest rate and other economic expectations. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "forecasts," "projects," "assumes," "will," "may," "could," "should," "budget," "target," "outlook," "proforma," "opportunity," "guidance" and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, as described below, which may cause our actual results, performance or achievements to be materially different from the results of operations, financial conditions or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements included in this release may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. The following factors, among others, could cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements: inability to generate sufficient cash flows due to unfavorable economic and market conditions, changes in supply and/or demand, competition, ...