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

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Zacks Equity Research
·4 min read
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Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported third-quarter 2020 core funds from operations (FFO) per share of $1.57, surpassing the Zacks Consensus Estimate of $1.53. The reported figure remained flat year over year.

The residential REIT’s quarterly results reflect rise in average effective rent per unit for the same-store portfolio. However, fall in same-store net operating income (NOI) hurt the company’s performance.

Rental and other property revenues came in at $423.2 million during the September-end quarter, outpacing the Zacks Consensus Estimate of $414.1 million. The reported figure was also came in 1.8% higher than the year-ago quarter’s $415.6 million.

The company stated that as of Oct 26, rent cash receipts and deferred payments aggregated 99.2% and 98.8% of billed residential rent for the third quarter and October, respectively. As of the same date, average physical occupancy for the same-store portfolio was 95.6% for October.

Quarter in Detail

The same-store portfolio revenues grew 2.1% on rise in average effective rent per unit of 1.8%, year over year. During the September-end quarter, the company’s same-store NOI edged down 1.1% year over year. Moreover, average physical occupancy for the same-store portfolio for the third quarter was 95.6%, contracting 50 basis points (bps), year over year.

During the third quarter, rent growth in the company’s same-store portfolio for both new and renewing leases, compared with the prior lease, came in at 0.8% on a combined basis.

As of Sep 30, 2020, unencumbered NOI was 93.2% of total NOI, higher than the 91.1% reported as of Jun 30, 2020.

As of Sep 30, 2020, MAA held cash and cash equivalents of $18.4 million, down from $20.5 million as of Dec 31, 2019. Additionally, as of the same date, total debt outstanding was $4.4 billion.

Furthermore, as of the same date, $980 million of combined cash and capacity were available under its unsecured revolving credit facility, net of commercial paper borrowings.

Portfolio Activity

During the July-September period, MAA sold a land parcel in Huntsville, AL, spanning an area of 27 acres for net proceeds of $2.6 million, resulting in a gain on sale of non-depreciable real estate assets of $1.3 million.

During the third quarter, the company redeveloped 1205 units. As of Sep 30, 2020, it had six development communities under construction with an expected average stabilized NOI yield of 6.1%.

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

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

Performance of Other REITS

Boston Properties Inc.’s BXP third-quarter 2020 FFO per share of $1.57 missed the Zacks Consensus Estimate of $1.64. The reported figure also decreased 4.3% from the year-ago quarter’s $1.64.

SITE Centers Corp.’s SITC third-quarter operating FFO per share of 23 cents came in line with the Zacks Consensus Estimate. The reported figure, however, declined 23.3% year over year.

Highwoods Properties, Inc. HIW third-quarter 2020 FFO per share of 86 cents lagged the Zacks Consensus Estimate of 88 cents. The figure includes 5 cents from debt extinguishment charges and non-cash straight-line credit losses. Nonetheless, the reported figure improved 3.6% from the 83 cents reported in the year-ago period.

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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