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Mid-America Apartment Communities Inc. Message Board

  • roberthardin roberthardin Aug 6, 2002 11:06 AM Flag

    question for ericbolton

    i recently sent an email to MAA investor relations, but did not receive a response. i'm considering investing in MAA , but am concerned about increasing debt levels & decreasing equity as payouts continue to exceed reported earnings. any press releases or sec filings that discuss this? thanks

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    • Sorry you've not heard back on your earlier response....we'll look into it.

      We did discuss our dividend payout (and our belief that it is secure) in the Q2 earnings release last week and the associated quarterly conference call comments. You can find both of these documents at our web site at Look under the "Investors" page, then the "Financial Reports" tab and then under "Quarterly & Other Reports." We believe that the Balance Sheet continues to grow stronger (coverage ratios improving, debt maturities and interest rate renewal well laddered and fixed, and completion of all development funding...reducing non-fully productive assets) and that we are well positioned to improve earnings growth from: (1) an improving economy and rising interest rate environment (same store revenues temporarily pressured by very high leasing concessions), (2) achieving full production from new development that is just now being leased up, and (3) deployment of existing capital capacity in our new acquisition JV.

      Eric Bolton
      Mid-America Apts.

    • roberthardin,

      I concur.

      I am impressed with any CEO who would take even an occasional peek at these boards and keep in touch with shareholders on such an informal level. Bravo! HOWEVER, has Mr. Bolton publicly suggested that he frequents this board or are you relying on the posts themselves (and their being a bit more eloquent than is typical!)<g>

      I�ve Been following this company for some time...looking for a comfortable entry point. Dividends have been exceeding (non-financed) cash flows as of late but I like the story and, more importantly, the transparency management provides. One could argue that now is a good time to look at apartment REIT�s for the same reason it was good to look at REIT�s in general in 98-99. However, we all want the payout continuity to act as a bridge for us over any difficult operating environment. The question is: can MAA bridge this gap? I believe management is giving us all they can with regard to forward guidance. The problem is that the turnaround timeline for multifamily keeps being pushed further back. It reminds me of the old statement �Everytime I try to make ends meet, somebody keeps moving the ends�.

      In the last CC Mr. Bolton said �In conclusion, while leasing continues to be a challenge, we believe that most of the markets have bottomed out and that we will soon see a return to a more robust growth environment�. I think we can rely on that statement with respect to the multifamily market itself. My concern is that the macro economic environment is much more �murky� to forecast and its trickle down effects are obvious.

      The next six months may tell us quite a bit. With regard to the company specifically; I found it heartening that Mr. Bolton stated in the last CC "An increase in mortgage rates would be required to create a more immediate recovery in revenue performance". However, the concern might now be if mortgage rates were lowered from these levels. Would this spur a new wave of demand for single family? MAA still has some debt to refi at a potentially lower rate but I am quite sure this would not offset the negative effects of a new surge in single family demand.

      All in all I like this companies niche in the south/southeast; Conservative development approach; Focus on new properties; Disciplined and open management; and it�s commitment to the dividend. The concern I have is a double dip recession or lower rate environment. Are these fine attributes enough amid that kind of environment?

      Where�s my crystal ball?<g>


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