MID AMERICA APARTMENT COMMUNITIES INC. Q4 FY2024 earnings call

• Eric Bolton noted MAA finished 2024 in line with expectations, recovery trends in apartment leasing, CEO succession with Brad assuming President and CEO, confidence in leadership team, supply dynamics with new supply delivery decline, portfolio positioned for demand growth, tech initiatives, and strong external growth pipeline. • Brad Hill discussed fourth quarter focus on occupancy, new lease pricing moderation, growth prospects, technology initiatives like property-wide Wi-Fi rollout, interior renovation, external growth pipeline with development and acquisitions, property sales and dispositions, and capital recycling. • Tim Argo detailed fourth quarter occupancy, lease-over-lease pricing, renewal rates, redevelopment initiatives, Wi-Fi rollout, January trends, absorption, and supply pressure moderation. • Clay Holder mentioned core FFO, same-store revenue, same-store expense, development funding, balance sheet strength, debt metrics, 2025 FFO guidance, and refinancing plans.

No detailed product segment financial performance breakdown provided in the transcript.

• 2025 FFO projected at $8.61 to $8.93 per share, midpoint $8.77. • Same-store revenue growth midpoint 0.4%, effective rent growth midpoint 0.2%, occupancy midpoint 95.6%, other revenue growth 2.5%. • Acquisition range $350 million to $450 million, development range $250 million to $350 million. • Overhead expenses projected $134.5 million midpoint, 4.5% increase from 2024. • Refinancing plans for $100 million bonds maturing in 2025.

• Supply pressure from new deliveries remaining a headwind in some markets. • Potential impact of immigration policy changes on labor and development. • Fraud prevention measures in some markets, though delinquency in affected markets is consistent with broader portfolio.

Q: Could you put a finer point on the 1.7% blend outlook for 2025, specifically new versus renewal and when new lease spreads might turn positive?

A: New lease pricing expected in negative 1.5% range seasonally, with lowest point now and slight positives in late Q2/early Q3, then trending back down; renewals steady in 4.25% to 4.5% range.

Q: What are your thoughts on turnover and how it trends throughout the year?

A: Expect turnover consistent with 2024, major reasons for move-outs like buying a home (down 20% in Q4 2024), not expected to change much.

Q: How do changes in immigration policy impact the portfolio?

A: No significant impact seen on same-store portfolio from immigration policy changes, but potential impact on new development labor and supply.

Q: Could you talk about cap rates on dispositions and acquisitions?

A: Disposition cap rates low sixes, acquisitions in lease-up with yields close to 6% upon stabilization, developments with NOI yields around 6.4%.

Q: When do you expect net effective rent to turn positive year-over-year?

A: Likely by mid-2025, mid-Q3 and beyond.

Q: How does the return of pricing power depend on occupancy and supply growth?

A: Occupancy and exposure levels, along with declining supply, support pricing power, with confidence in pushing pricing as spring and summer approach.