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MID AMERICA APARTMENT COMMUNITIES INC. (MAA)·Q4 2024 Earnings Summary

Executive Summary

  • Core FFO per diluted share was $2.23, flat sequentially and in line with prior guidance midpoint ($2.23), while GAAP diluted EPS rose to $1.42; rental and other property revenues were $549.8M (+1.4% YoY) and Total NOI was $344.9M (-1.6% YoY) .
  • Same Store occupancy remained strong at 95.6% and blended lease pricing moderation improved versus the prior year; renewal rates rose 4.2% while new lease pricing was down 8.0% in Q4, producing a blended -2.0% on a lease-over-lease basis .
  • Management introduced 2025 guidance with Core FFO per share of $8.61–$8.93 (midpoint $8.77) and Same Store NOI growth of -2.15% to -0.15% amid supply normalization; Q1 2025 Core FFO guided to $2.08–$2.24 (midpoint $2.16) .
  • Capital structure remained conservative: Net Debt/Adjusted EBITDAre at 4.0x, average effective interest rate 3.8%, 95% fixed debt; issued $350M 10-year notes at 4.95% in December to term out CP, supporting development and lease-up investments .

What Went Well and What Went Wrong

What Went Well

  • “We are encouraged by the performance trends … early signs of improvement in pricing trends as the record level of new supply deliveries has now peaked,” and blended lease pricing sequential moderation improved by 140 bps versus the prior year, setting up for better rent growth into 2025–2026 .
  • Occupancy and collections were solid; average physical occupancy was 95.6% and net delinquency ~0.3% of billed rents, underpinning stable Same Store revenues (-0.2% YoY) despite supply pressure .
  • External growth pipeline robust: seven projects under development (2,312 units; $851.5M total cost, $374.3M to fund) and eight lease-up communities (2,763 units; 69.7% occupancy; $766.1M costs to date), with expected stabilized NOI yields ~6.3% on developments .

What Went Wrong

  • Same Store property operating expenses rose 3.4% YoY, driving Same Store NOI down 2.1% YoY; personnel, insurance, and marketing costs were notable contributors .
  • New lease pricing faced headwinds (-8.0% in Q4), with concessions steady to slightly declining at ~one month free portfolio-wide but more severe in high-supply submarkets (e.g., downtown Austin, Midtown Atlanta, uptown Charlotte) .
  • Interest expense increased (Q4 consolidated interest expense $44.2M vs. $38.6M prior year) and management expects ~13% interest expense growth in 2025 and ~$0.03 Core FFO dilution from refinancing and 2024 activities .

Financial Results

Core Income Statement Metrics by Quarter

MetricQ2 2024Q3 2024Q4 2024
Rental and other property revenues ($USD Thousands)$546,435 $551,126 $549,832
Diluted EPS ($)$0.86 $0.98 $1.42
FFO per diluted share ($)$2.06 $2.10 $2.21
Core FFO per diluted share ($)$2.22 $2.21 $2.23
Core AFFO per diluted share ($)$1.92 $1.93 $2.03
Total NOI ($USD Thousands)$340,639 $339,565 $344,899

Q4 Year-over-Year Comparison

MetricQ4 2023Q4 2024YoY Change
Rental and other property revenues ($USD Thousands)$542,247 $549,832 +1.4%
Diluted EPS ($)$1.37 $1.42 +3.6%
Core FFO per diluted share ($)$2.32 $2.23 -3.9%
Total NOI ($USD Thousands)$350,465 $344,899 -1.6%
Same Store NOI Growth (%)—-2.1% -2.1%

Same Store Growth (YoY)

MetricQ2 2024Q3 2024Q4 2024
Revenues YoY (%)+0.7% 0.0% -0.2%
Expenses YoY (%)+3.7% +3.0% +3.4%
NOI YoY (%)-1.0% -1.7% -2.1%

KPIs

KPIQ2 2024Q3 2024Q4 2024
Average Physical Occupancy (%)95.5% 95.7% 95.6%
Average Effective Rent per Unit ($)$1,690 $1,691 $1,684
Resident Turnover (TTM, %)43.5% 42.8% 42.0%
Blended Lease Pricing (QoQ vs prior lease, %)+0.1% (Q2) -0.2% (Q3) -2.0% (Q4)
New Lease Pricing (lease-over-lease, %)-5.1% (Q2) -5.4% (Q3) -8.0% (Q4)
Renewal Lease Pricing (lease-over-lease, %)+4.6% (Q2) +4.1% (Q3) +4.2% (Q4)

Portfolio Contribution (Q4 2024 vs Q4 2023)

SegmentOperating Revenues Q4 2024 ($USD Thousands)Operating Revenues Q4 2023 ($USD Thousands)Same Store Property Operating Expenses Q4 2024 ($USD Thousands)Q4 2023 ($USD Thousands)Same Store NOI Q4 2024 ($USD Thousands)Q4 2023 ($USD Thousands)
Same Store Communities$520,134 $521,169 $189,087 $182,872 $331,047 $338,297
Non-Same Store Communities$11,894 $12,478 $4,817 $4,486 $7,077 $7,992
Lease-up/Development$11,348 $2,284 $5,733 $1,363 $5,615 $921
Commercial Property/Land$6,456 $6,316 $2,675 $3,061 $3,781 $3,255
Total$549,832 $542,247 $204,933 $191,782 $344,899 $350,465

Property OpEx Components (Same Store)

ComponentQ4 2023 ($USD Thousands)Q4 2024 ($USD Thousands)YoY Change
Property Taxes$67,389 $68,624 +1.8%
Personnel$38,594 $40,712 +5.5%
Utilities$32,953 $34,290 +4.1%
Repair & Maintenance$22,744 $22,748 +0.0%
Office Operations$8,004 $9,008 +12.5%
Insurance$8,222 $8,332 +1.3%
Marketing$4,966 $5,373 +8.2%
Total$182,872 $189,087 +3.4%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core FFO per diluted shareQ4 2024$2.15–$2.31; midpoint $2.23 Actual $2.23 Met guidance
Core FFO per diluted shareFY 2025N/A$8.61–$8.93; midpoint $8.77 New
Core AFFO per diluted shareFY 2025N/A$7.63–$7.95; midpoint $7.79 New
Diluted EPSFY 2025N/A$5.51–$5.83; midpoint $5.67 New
Same Store property revenue growthFY 2025N/A-0.35% to 1.15%; midpoint 0.40% New
Same Store operating expense growthFY 2025N/A2.45% to 3.95%; midpoint 3.20% New
Same Store NOI growthFY 2025N/A-2.15% to -0.15%; midpoint -1.15% New
Total overhead (PM + G&A)FY 2025N/A$132.5–$136.5M; midpoint $134.5M New
Core FFO per diluted shareQ1 2025N/A$2.08–$2.24; midpoint $2.16 New; sequentially lower vs Q4 actual
Debt average effective interest rateFY 2025N/A3.5%–3.7%; midpoint 3.6% New
Acquisition volumeFY 2025N/A$350–$450M; midpoint $400M New
Disposition volumeFY 2025N/A$300–$350M; midpoint $325M New
Development investmentFY 2025N/A$250–$350M; midpoint $300M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Supply/demand and pricingPeak supply pressure but absorption steady; blended pricing +0.1% (Q2), -0.2% (Q3); exposure improving New lease -8.0%, renewal +4.2%, blended -2.0%; moderation better YoY; January new lease -7.1%, blended -0.9%; positive new lease months expected in late Q2/Q3 Improving through 2025 as supply declines
Technology initiatives (WiFi/centralization)Smart Home rollout >94k units; initial WiFi retrofits starting Aggressive property-wide WiFi rollout in 2025; supports centralization and self-touring; enhances efficiency and resident experience Scaling investment
Redevelopment/repositioningInterior redevelopments YTD 2,796 units; 6 repositioning projects planned 5,665 units in 2024; $106 rent uplift; NOI yields ~10% on two projects nearing repricing; more projects completing Apr–Jun Accelerating in 2025–2026
External growth (dev/acq/dispo)Dev pipeline ~$866M (7 projects); acquisitions in Raleigh; planned starts in Charlotte/Phoenix Dev pipeline $851.5M (7 projects); acquisitions Orlando/Dallas in lease-up; dispositions in Charlotte/Richmond; expected accretive stabilized yields ~6.3% Active pipeline; focus on lease-up
Capital markets & leverage$400M notes at 5.30% (May); Net Debt/Adj EBITDAre 3.7x $350M notes at 4.95% (Dec); Net Debt/Adj EBITDAre 4.0x; 95% fixed; avg maturity 7.3 years Laddering; modest leverage
ConcessionsPortfolio concessions steady; higher in supply-heavy urban nodes Concessions steady-to-slightly declining; still heavy in Austin/Atlanta/Central Charlotte submarkets Gradual improvement
Macro/regulatoryMigration sustaining; Q3 exposure low Macro (jobs, in-migration) assumed consistent with 2024; immigration policy impact minimal on ops, potential dev labor effects Stable macro assumptions

Management Commentary

  • “Calendar year 2025 will be a transition year for revenue performance … as we reprice leases over the busy spring and summer leasing season, the compounding impact … will become increasingly evident late this year and into 2026.” — Eric Bolton, CEO .
  • “We are continuing to invest in several key areas that will significantly impact future earnings, including various technology initiatives … property-wide WiFi … and increasing our investments in interior renovation and repositioning.” — Brad Hill, President & incoming CEO .
  • “Average physical occupancy was 95.6% … collections continued to outperform expectations with net delinquency representing just 0.3% of billed rents.” — Tim Argo, EVP .
  • “Core FFO for 2025 is projected at $8.61 to $8.93 … we expect momentum in rental pricing to grow over the course of the year and to drive improving year-over-year performance in core FFO over the back half of the year.” — A. Clay Holder, CFO .

Q&A Highlights

  • Pricing cadence: Management expects slightly positive new lease months in late Q2/early Q3, with renewals steady ~4.5%; weighting of lease expirations mid-year supports blended spread contribution .
  • Concessions: Portfolio concessions ~one month free; 2–3 months in tougher submarkets (downtown Austin, Midtown Atlanta, uptown Charlotte); slight improvement expected .
  • Supply outlook: Deliveries expected down ~15–20% in 2025 and ~30–40% in 2026; starts at 0.3% of inventory in Q4 2024, lowest in years .
  • Capital allocation: Dispositions in low-6% cap rates; acquisitions in lease-up targeting ~6% stabilized yields and ~15–20% below replacement cost; development yields ~6.3–6.4% .
  • Interest and overhead: 2025 interest expense projected +13%; refinancing $400M 2025 bonds likely at ~5%; total overhead midpoint $134.5M .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 EPS, revenue, and EBITDA were unavailable at time of request due to data access limits; result comparisons to Wall Street estimates cannot be provided. Values retrieved from S&P Global were unavailable due to rate limits.*
  • Company-guided Q4 Core FFO midpoint ($2.23) was met; Q1 2025 Core FFO guidance midpoint is $2.16, reflecting seasonality and interest carry from lease-up before turning accretive later in 2025 .

Key Takeaways for Investors

  • Occupancy resilience and improving lease pricing moderation suggest inflection potential into spring/summer; watch monthly new lease spreads and exposure trends for confirmation of the recovery path .
  • Same Store expense inflation remains a headwind (personnel, insurance, marketing); 2025 Same Store NOI guidance midpoint (-1.15%) embeds cautious revenue and expense assumptions .
  • External growth should be accretive post-stabilization; leasing velocity in eight lease-up communities and development starts will be key drivers of 2H25/2026 EPS/FFO momentum .
  • Balance sheet strength (4.0x Net Debt/Adj EBITDAre, 95% fixed, 7.3-year maturity) and recent bond issuance reduce CP reliance and support capital deployment amid a reopening transaction market .
  • 2025 guide implies back-half weighted improvement; near-term Core FFO pressure from interest carry/overhead to fade as supply abates and lease-ups stabilize .
  • Market-level performance dispersion persists; mid-tier (Tampa/Orlando/Charleston) showing improvement, while Austin/Atlanta remain supply-challenged—portfolio mix supports lower volatility .
  • Tactical trading: Monitor monthly pricing updates and any evidence of positive new lease months; potential catalysts include better-than-seasonal pricing, lease-up stabilizations, and transaction market acceleration in Q3 .

Other Relevant Q4 Press Releases

  • Increased quarterly common dividend to $1.515 per share (annualized $6.06); declared 124th consecutive quarterly dividend paid Jan 31, 2025 .
  • Issued $350M unsecured notes due 2035 at 4.950% (issue price 99.170%); proceeds used to repay commercial paper .
  • Announced CEO succession: Brad Hill to assume CEO (effective April 1) with Eric Bolton moving to Executive Chairman .
  • Announced regular preferred dividend, taxable composition of 2024 distributions, and Q4 earnings release/call dates .