Mid-America Apartment (MAA) Surpasses on Q1 FFO & Revenues
Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported first-quarter 2021 core funds from operations (FFO) per share of $1.64, surpassing the Zacks Consensus Estimate of $1.61. Also, the reported figure increased 1.2% from the year-ago number of $1.62.
The residential REIT’s quarterly results were driven by an increase in average effective rent per unit for the same-store portfolio. Average physical occupancy for the same-store portfolio remained flat year over year.
Rental and other property revenues were $425.01 million in the March-end quarter, outpacing the Zacks Consensus Estimate of $423.9 million. The reported figure was also 1.7% higher than the year-ago quarter’s $418.1 million.
Per management, “We are encouraged with the trends in rent growth and continued strong occupancy, reflecting the growing demand for apartment housing across our Sunbelt markets. We believe our uniquely diversified portfolio across this high-growth region has MAA well positioned as the economy and employment markets begin to recover.”
Quarter in Detail
The same-store portfolio’s revenues grew 1.4% on a year-over-year rise of 1.3% in average effective rent per unit. Average physical occupancy for the same-store portfolio for the first quarter was 95.7%, flat year over year. In the first quarter, lease pricing at the company’s same-store portfolio for both new and renewing leases compared with the prior lease grew 2.7% on a combined basis.
However, same-store portfolio property operating expenses flared up 5.4%, resulting in a year-over-year decline of 0.9% in same-store net operating income (NOI).
Balance-Sheet Position
As of Mar 31, 2021, $644.2 million of combined cash and capacity were available under its unsecured revolving credit facility, net of commercial paper borrowings. Additionally, as of the same date, the total debt outstanding was $4.7 billion.
As of Mar 31, 2021, unencumbered NOI was 95.3% of the total NOI.
Furthermore, as of the same date, MAA held cash and cash equivalents of $32.6 million, up from $25.2 million as of 2020 end.
Portfolio Activity
In the reported quarter, MAA completed the development of MAA Frisco Bridges II situated in Dallas, TX.
In the first quarter, the company redeveloped 964 units. As of Mar 31, 2021, it had seven development communities under construction, with a projected average stabilized NOI yield of 6%.
Outlook
MAA projects 2021 core FFO per share at $6.35-$6.65, the mid-point being $6.50. The Zacks Consensus Estimate for the same is pegged at $6.52.
It expects same-store property revenue growth of 1-3%, while same-store property operating expense growth is projected at 3-5%. Moreover, the company anticipates same-store NOI growth of 0-2%.
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-eps-surprise-chart | MidAmerica Apartment Communities, Inc. Quote
Performance of Other Residential REITs
Essex Property Trust Inc. ESS reported first-quarter 2021 core FFO per share of $3.07, beating the Zacks Consensus Estimate of $3.04. The figure also surpassed the mid-point of the company’s first-quarter 2021 guidance by 4 cents per share. Sequentially, the company experienced lower cash concessions and delinquency, leading to a marginal improvement in same-property gross revenues and NOI.
UDR Inc. UDR reported first-quarter 2021 FFO as adjusted per share of 47 cents, missing the Zacks Consensus Estimate of 48 cents. Also, the figure is lower than the prior year’s 54 cents. Results reflect the adverse impacts of the coronavirus pandemic. A decline in revenues from mature communities affected top-line growth.
Equity Residential’s EQR first-quarter 2021 normalized FFO per share of 68 cents was in line with the Zacks Consensus Estimate. Rental income of $597.6 million surpassed the consensus mark of $586.8 million. However, on a year-over-year basis, normalized FFO per share declined 21.8% and rental income fell 12.4%, reflecting the adverse impacts of the pandemic on its business.
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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