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Mid-America Apartment Communities Inc. Message Board

  • tjberk tjberk Nov 14, 1999 12:02 AM Flag

    Well Done, George Cates

    Congratulations. It looks like you got a nice
    price on the sale of some assets. Unlike many
    managements, who seem mainly interested in empire building,
    you seem to realize that this is actually a great
    opportunity for REITS to continue to grow FFO per share and
    decrease leverage at the same time. I would like to
    suggest that you consider using the proceeds of the asset
    sale to repurchase your preferred stock. The
    opportunity to sell assets yielding 8 to 10 percent and turn
    around and reinvest the money at a totally safe 13 1/2
    percent yield is too good to pass up. This will increase
    FFO growth more quickly then a repurchase of a mix of
    common stock and debt (which may only yield a composite
    10 percent yield). Buying the preferred will also
    deleverage your balance sheet more quickly. Buying common
    and debt reduces both assets and liabilities and
    doesn't reduce leverage much. The Walden actions have
    opened up the opportunity to repurchase the preferred
    shares at an incredible discount and this window may not
    be open for long, so I urge you to consider this
    while the opportunity exists. I also hope you won't let
    the complaints of one unhappy customer keep you from
    posting to the board. I know I speak for most others in
    saying we really appreciate being able to have this kind
    of access to the management of our company. Your are
    an example, a very rare example unfortunately, of
    how all managers should communicate with their
    shareholders

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    • Thank you for your reliance on the truth.


      MAA records rental revenues when earned as required
      by GAAP. For the apartment industry, rents are
      typically paid on a monthly basis in the period earned,
      which makes revenue recognition closely approximate
      cash flow from collections. An exception is prepaid
      rents, which are insignificant and normally recognized
      the following month.

      We are confident that
      there are no undisclosed issues or irregularities.
      Please contact me directly with any issues or concerns
      you know about, or regarding any that come to your
      attention.

      al.campbell@maac.net

    • further point on this message. While our coverage
      of ALL obligations (common and preferred, and debt)
      is actually slightly improved under our repurchase
      program forecast, I failed to note that the debt
      component (taken singly) does actually increase slightly,
      about 2% of our balance sheet.

    • Just a little paranoid right now about management
      integrity, especially in REITs. Although Mr. Cates' posts
      are a good sign, I have been lied to before (no
      offense Mr. Cates, statement definitey not made against
      you specifically, just a generalization).
      Even
      more impressive than his posts are Mr. Cates buying of
      shares, money always talks louder than words.

    • I think that the mg'mt is committed to increasing
      shareholder value. Read all of the posts from Gerge
      Cates...and notice that he put his money where his mouth is
      as shown by his substantial stock purchases. Mg,mt
      seems as alligned with the shareholders as any REIT I
      know.

    • All of what you said was what I thought to be
      true about the accounting and self-advised nature of
      MAA and the apartment business in general.


      One thing in your post that I have found not to be
      necessarily true is that significant insider ownership aligns
      management and shareholder interests. At best it helps. My
      most recent lesson is CRRR, which led to some of my
      paranoia about REIT managements. Outside of REITs have I
      seen the same with unethical managements, they want
      their money and they want your money.

    • Sapper, I think the following excerpt from MAA's
      10-K will answer your question: "Mid America Apartment
      Communities, Inc. is a self-administered and self-managed
      umbrella partnership real estate investment
      trust..."

      MAA insiders also have a very large ownership
      (greater than 18% based on last years proxy) which should
      help to align their personal interests with that of
      other common shareholders.

      On the revenue
      earning question, their 1998 financial statements say
      "Rental and other revenues are recorded when earned." My
      understanding is that revenue earned and cash collections for
      apartment companies should be very close, with the main
      exception being prepaid rents, which should be earned very
      quickly. I can't imagine anybody prepaying a years rent.


      MAA_Sux obviously has a personal ax to grind.

    • This writer asked MAA_Sux to return a writen
      acknowledgment of, a) the truthfulness of such statements being
      e-mailed and b) the recognition on his part that
      investment decisions may be made on such information. Copies
      were to be sent to myself and 3 other individuals.(
      one was an attorney, another a S.E.C. type of
      individual)

      No information has yet been sent to this
      writer

      Posting on Yahoo, both writer and reader are under agreed
      TOS regulations......when one removes himself to a
      private/business site and requests that individuals come to him
      for information involving stock purchase/investment
      is another situation governed by other rules/laws.
      MAA are you listening??????????

    • It was my take that MAA_Sux was blowing hot air,
      but you never know. When I asked him how he knew of
      his info, he never replied. I was so concerned with
      what he told me that I went out and bought back into
      MAA.
      I guess an apartment, since it collects monthly
      rents just before the beginning of that period, might
      be counting those rents fully earned when collected,
      but some how since it is the norm in terms of
      collections and 30 days is such a short time period it
      doesn't worry me much. Not quite the same as a magazine
      company doing the same with 3 year subscriptions.

      Yesterday, I got a HARD lesson yesterday on the importance
      of dealing with ethical management. I'm a little
      paranoid in that regard now.

    • If MAASux has any knowlege of accounting irregularities, this information should be e-mailed to the company auditors.

    • Does anyone know if MAA is self-advised? I am
      fairly sure it is self-advised, but want to make sure.
      Are there any other business relationships, that
      could be a potential conflict of interest between MAA's
      management and its shareholders. None that I know of, but
      double checking.
      Just got burned on Captec (CRRR),
      or is it decapiteced (kind of like decapitated get
      it). Nothing wrong with CRRR's operations, just a
      little problem with a proposal by management to do a
      bunch of things. It shows, I believe, a conflict of
      interest between CRRR's management and its shareholders.
      In reviewing where I could have seen this coming,
      the only thing I noticed was that management appears
      to own an advisory service linked to the REIT.

      As far as MAA_Sux, I emailed him. Won't go into
      details, but his message was of an accounting
      irregularity. By the way does anyone know how you book revenue
      ahead of earning it in the apartment business?

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