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
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
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).
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
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
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
No information has yet been sent to this
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
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.
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
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?