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Mid-America Apartment (MAA) Q3 FFO & Revenues Beat Estimates

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Mid-America Apartment Communities, Inc. (MAA - Free Report) , commonly referred to as MAA, reported third-quarter 2021 core funds from operations (FFO) per share of $1.78, surpassing the Zacks Consensus Estimate of $1.70. The reported number increased 13.4% from the year-ago figure of $1.57.

The residential REIT’s quarterly results were driven by an increase in the average effective rent per unit for the same-store portfolio. The average physical occupancy for the same-store portfolio also increased year over year.

The rental and other property revenues came in at $452.6 million during the September-end quarter, outpacing the Zacks Consensus Estimate of $449 million. The reported figure is also 6.9% higher than the year-ago quarter’s $423.2 million.

Per management, "Demand for apartment housing continues to increase across our Sunbelt markets.  Strong pricing trends across all our markets were captured in the third quarter and we will carry good momentum into 2022.”

Quarter in Detail

The same-store portfolio’s revenues grew 6.7% on a year-over-year rise of 6.3% in the average effective rent per unit. The average physical occupancy for the same-store portfolio in the third quarter was 96.4%, up from prior-year quarter’s 95.5%. In the third quarter, lease pricing at the company’s same-store portfolio for both new and renewing leases, compared with the prior lease, grew 15% on a combined basis. The same-store net operating income (NOI) reflects year-over-year growth of 10.2%.

However, the same-store portfolio property operating expenses flared up 1.5%.

Balance Sheet Position

As of Sep 30, 2021, $1 billion of combined cash and capacity were available under its unsecured revolving credit facility, net of commercial paper borrowings. As of the same date, the total debt outstanding was $4.5 billion.

As of Sep 30, 2021, unencumbered NOI was 95.1% of the total NOI.

As of the same date, MAA held cash and cash equivalents of $29.8 million, up from the $25.2 million reported at the end of 2020.

Portfolio Activity

During the third quarter, the company redeveloped 2192 units. As of Sep 30, 2021, it had eight development communities under construction, with a projected average stabilized NOI yield of 6%.

Outlook

MAA projects 2021 core FFO per share at $6.88-$7.00, the mid-point being $6.94. The Zacks Consensus Estimate for the same is pegged at $6.83.

It expects same-store property revenue growth of 4.90-5.30%, while the same-store property operating expense is projected to flare up 4.25-4.75%.

The company anticipates same-store NOI growth of 5-6%.

MAA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of other REITs like Apple Hospitality REIT, Inc. (APLE - Free Report) , CubeSmart  (CUBE - Free Report) and Sunstone Hotel Investors, Inc. (SHO - Free Report) scheduled for Nov 4.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.