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Mid-America Apartment (MAA) Q1 FFO & Revenues Top Estimates

Zacks Equity Research
·4 min read

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported first-quarter 2020 core funds from operations (FFO) of $1.62 per share, surpassing the Zacks Consensus Estimate of $1.60. Further, the reported tally comes in higher than the prior-year quarter’s $1.50.

The residential REIT’s quarterly results reflect growth in same-store net operating income (NOI) and rise in average effective rent per unit for the same-store portfolio.

Rental and other property revenues came in at $418.1 million in the quarter, marginally outpacing the Zacks Consensus Estimate of $417.8 million. The reported figure also comes in 4.2% higher than the year-ago quarter’s $401.2 million.

The company informed that as of May 5, it has collected 99.3% of its billed rent in rent cash collections for April. For May, it has collected 94.2% of its billed rent in rent cash collections.

Quarter in Detail

The same-store portfolio revenues grew 4.2%, backed by rise in average effective rent per unit of 4.2%, year over year. During the first quarter, the company’s same-store NOI increased 4.8% year over year. Average physical occupancy for the same-store portfolio was 95.7%, contracting 20 basis points (bps) year over year.

During the first quarter, rent growth in the company’s same-store portfolio for both new and renewing leases, compared with the prior lease, came in at 2.6% on a combined basis.

As of Mar 31, 2020, unencumbered NOI was 90.6% of total NOI, higher than the 90.2% reported as of Dec 31, 2019.

As of Mar 31, 2020, MAA held cash and cash equivalents of $34.5 million, up from $20.5 million as of Dec 31, 2019. Additionally, as of the same date, total debt outstanding was $4.5 billion.

Furthermore, as of the same date, $931.8 million of combined cash and capacity were available under its unsecured revolving credit facility, net of commercial paper borrowings.

Portfolio Activity

During the March-end quarter, the company acquired a 22-acre land parcel located in the Austin, TX market for development.

During the quarter ended Mar 31, 2020, MAA completed the renovation of 1,440 units under its redevelopment program.

At the end of the reported quarter, MAA had seven development community projects under construction, with total projected costs of $489.5 million. Notably, an estimated $304.9 million remained to be funded as of Mar 31, 2020.

Outlook

MAA withdrew its 2020 guidance in March in light of the coronavirus pandemic-related uncertainties.

The company had earlier projected 2020 core FFO per share of $6.38-$6.62.

Its full-year outlook was based on same-store portfolio revenue growth of 3.25-4.25%, same-store portfolio operating expense rise of 3.75-4.75% and same-store NOI increase of 3-4%.

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

MidAmerica Apartment Communities Inc Price, Consensus and EPS Surprise

MidAmerica Apartment Communities Inc Price, Consensus and EPS Surprise
MidAmerica Apartment Communities Inc Price, Consensus and EPS Surprise

MidAmerica Apartment Communities Inc price-consensus-eps-surprise-chart | MidAmerica Apartment Communities Inc Quote

We now look forward to the earnings releases of other REITs like Simon Property Group, Inc. SPG, Park Hotels & Resorts Inc. PK and The Macerich Company MAC. While Simon Property and Park Hotels & Resorts are slated to report quarterly numbers on May 11, The Macerich Company will release results on May 12.

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

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