EXHIBIT 99.1
Mid-America Apartment Communities
Investor Update
October 2005
Safe Harbor Statement
Statements contained in this presentation, which
are not historical facts, are forward-looking
statements, as the term is defined in the Private
Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks
and uncertainties which can cause actual results
to differ materially from those currently
anticipated, due to a number of factors, which
include, but are not limited to, unfavorable
changes in the apartment market, changing
economic conditions, the impact of competition,
acquisitions which may not achieve anticipated
results and other risk factors discussed in documents
filed with the Securities and Exchange Commission
from time to time including the Company's
Annual Report on Form 10-K/A and the Company's
Quarterly Report on Form 10-Q. The
statements in this presentation are made based
upon information currently known to management
and the company assumes no obligation to update or
revise any of its forward-looking statements.
Slide 2
MAA Profile
>> Southeast Regional Focus
Strong apartment demand region; high job growth, migration and household
formations
>> Unique Market Tier Strategy
Diversified across large, middle and small tier markets; strong growth
prospects...with stability
>> High Quality Product Focus
Price point caters to largest market segment; lower volatility through full
market cycles
>> Strong Property Operating Focus
Hands-on approach to property management; strong operations and on-site
execution skills
>> Disciplined Capital Deployment
Investment policies and practices focused on protecting and growing
existing shareholder value
Slide 3
Regionally Focused Strategy
Diversified across a strong and stable growth region of the country...high and
steady demand for apartment housing
Higher Population Growth Projections:
2005 - 2010:
US Total 4.1%
MAA Region 4.7%
2005 - 2015:
US Total 8.4%
MAA Region 9.3%
Source: Dept. of Commerce, Current Population Reports
Both short-term demand
(job growth) and long-term
demand (household
formation) trends favor
this region...see
"Power Ranking" analysis
on slide #23.
[A map depicts the company's locations in the Southeast and Texas]
Slide 4
Growth and Stability
Unique three-tier market portfolio strategy delivers superior results, with
lower risks and volatility, through the full real estate cycle. We are two years
into a plan to shift the portfolio towards a more balanced allocation.
[Pie charts reflect the following data]
WAS
17% Large
37% Middle
46% Small
CURRENT
28% Large
38% Middle
34% Small
PLAN
35% Large
35% Middle
30% Small
Large Tier
Dallas
Atlanta
Houston
Tampa
South FL
Middle Tier
Jacksonville
Nashville
Memphis
Austin
Greenville
Orlando
others
Small Tier
Jackson
Lexington
Charleston
Little Rock
Savannah
Huntsville
Columbia
others
Slide 5
High Quality Product Focus
>> Average age of portfolio is 14 years; one of the newer portfolios in the
apartment REIT sector
>> Portfolio continuously upgraded/updated
* $280 MM of new construction brought on line 1998 - 2002
* $400 MM of high quality acquisitions added since May 2003
* $20 - $25 MM of annual refurbishment
Slide 6
Apartment REIT Sector Position
An efficient operating platform in place... and meaningful opportunity for
higher relative external growth performance
Scale of Operation Enterprise Value
Owned & Managed Units (in billions)
Aimco 263,734 Equity $ 17.8
Equity 200,149 Archstone $ 13.5
Archstone 81,188 AIMCO $ 12.1
United Dominion 78,855 Avalon Bay $ 8.6
Camden 52,570 United Dominion $ 6.6
Home Properties 47,186 Camden $ 5.7
Avalon Bay 40,142 Colonial $ 5.4
Mid-America 38,129 Home Properties $ 3.9
AMLI 29,448 BRE Properties $ 3.9
Essex Property 25,518 Essex Property $ 3.6
Colonial 25,009 Post Properties $ 2.8
Post Properties 24,700 Mid-America $ 2.4
BRE Properties 24,198 AMLI $ 1.8
Associated Estates 23,457 Town & Country $ 1.1
Town & Country 13,065 Associated Estates $ 0.9
Per 8/9/05 Stifel, Nicolaus Weekly Sector Scorecard Report
Slide 7
Steady improvement permits dividend increase
Steady growth in FFO and dividend coverage forecast to continue as market
conditions strengthen
Dividend rate raised to $2.38 annually effective 10-31-05
[A line graph depicts the following data]
2001 2002 2003 2004 2005F 2006F
FFO per share* $ 2.74 $ 2.69 $ 2.87 $ 3.00 $ 3.11 $ 3.20
Dividend per share $ 2.34 $ 2.34 $ 2.34 $ 2.34 $ 2.34 $ 2.38
* Before write-off of preferred share issuance cost ("non-cash"); Forecast per
First Call.
Slide 8
Steady Improvement
Expect continued steady progress in 2005 and beyond
>> FFO
* 2005 1st half: $1.63 vs. 2004: $1.50
* 2005 Fcst: $3.04 to $3.16 vs. 2004: $3.00
>> Major 2005 Forecast Assumptions
* 2.3% to 2.8% same store NOI growth
* $150 MM total acquisitions ($102MM completed)
* Dispositions : Completed
* 5.25% blended average interest rate
>> Forecast external growth funded by DRSPP, dispositions, and existing credit
facilities
>> Market recovery continues
>> Asset management initiatives:
* Improved pricing capabilities
* Utility reimbursement potential
* Marketing
Slide 9
Q2 2005: A strong quarter
>> Reported record FFO per share of $0.85 vs. $0.74 last year (includes $0.07
of JV promote fee)
>> Continued improvement in dividend coverage
>> Successful conclusion of Crow JVI (36% IRR)
>> Early signs of market recovery in same-store performance
* NOI growth of 2.0% over Q2 04
* Physical Occupancy of 94.2% vs. 93.0% in Q2 04
>> $150MM of forward swaps executed, removing most interest rate risk thru
2006.
Slide 10
Encouraging Q3 performance trends
>> Quarter end physical occupancy* of 96.2%; well ahead of prior year (95.1%)
>> Resident turnover trends down; improvement continues
>> Collections performance improving
>> Minimal FFO impact from Hurricane Katrina damage
>> Expect Q4 occupancy boost from Hurricane Katrina leasing
>> Board raises annualized dividend by 4 cents
* (same-store)
Slide 11
Markets Impacted by Katrina
>> Highlighted markets represent 20,000 units or 52% of the MAA portfolio
>> 225 new leases written to date (0.6% additional occupancy)
>> Lease expiration management practices maintained
>> Mostly corporate leases and higher credit quality individual leases...
average rent of $760 vs. portfolio of $696
[A map depicts the company's locations impacted by Katrina]
Slide 12
Strong Oversight
Experienced and independent Board of Directors - expertise in apartment real
estate, capital markets and corporate governance
>> Independent Directors
* Robert Fogelman
President, Fogelman Investments. 30 years of multifamily development
and property management
* Ralph Horn, Chairman Governance and Compensation Committees
Former Chairman/CEO First Horizon. Director - Gaylord Entertainment,
Harrah's Entertainment
* Mike Starnes
Former CEO and President MS Carriers, Inc. Director - Regions
Financial Corporation
* John Grinalds
Former President, The Citadel University. Headmaster of Porter-Gaud
effective June 2006. Retired, Major General U.S. Marine Corps
* Alan Graf, Chairman Audit Committee
Executive Vice President and CFO, FedEx Corporation, Director - Nike
Inc., Kimball International
>> Non-Management Directors
* George Cates, Lead Director
Founder, former Chairman/CEO of MAA. 30 years multifamily experience.
* John Flournoy
Chairman and CEO, Flournoy Development Company (apartments), Director
- W.C. Bradley Company and Columbus Bank and Trust Company
>> Management Directors
* Eric Bolton
Chairman and CEO, 11 years with MAA, 20 years real estate experience
* Simon Wadsworth
Executive Vice President and CFO, 11 years with MAA
Insiders own 8% of MAA
Slide 13
Strong Management Team
Experienced management team and deep bench strength; succession planning and
leadership development on-going
Senior management team has an average tenure with MAA of 8 years
MAA is the only REIT endorsed by the Nat'l. Apt. Assoc. to provide training and
certification for Certified Apt. Mgr. (CAM designation). MAA currently has 106
CAMs.
Slide 14
Why Buy MAA
Significant FFO upside to capture from same store portfolio as market conditions
improve...earnings potential protected and enhanced
>> Same store pricing power of portfolio has been protected. ARU performance:
2002 -.2%, 2003 .1%, 2004 .2%, Q2 2005 1.2%
>> Leasing and credit standards have been aggressively managed and protected
>> During normalized market conditions, same store portfolio generated
$0.20/share of higher NOI (or $4MM) than in 2004
>> All three market tier segments (large, middle and small city markets) have
upside to capture
>> Successful implementation in 2004 of new web-based property and revenue
management system; strong productivity and pricing platform
>> New initiative under development focused on extensive unit interior
renovation opportunities; initially focused on 2,500 units
Slide 15
Why Buy MAA
A record of disciplined growth; extensive network in place and local knowledge
of markets ensures steady deal flow to capture new growth
>> Proven investment track record
>> In-depth local knowledge
* Very familiar with markets
* Able to review/underwrite most acquisition opportunities quickly and
accurately using our highly experienced team
* Never "high-bidder", but able to close rapidly without contingencies
* All in major markets: Atlanta, Dallas, Houston, South Florida,
Jacksonville, Austin, Nashville
>> Despite competitive environment, acquired $180 MM in last 12 months
Slide 16
Why Buy MAA
Investment decisions are governed by conservative underwriting, a minimum IRR
investment hurdle requirement and a requirement to ensure that meaningful
accretion to existing shareholder value is captured
>> Underwriting assumptions
* Growth rates primarily driven by third party data
* Exit cap rates used in proformas are greater than we are achieving in
our dispositions
>> Investment hurdles
* IRR: cost of equity + 200 bp
* AFFO accretion: + 20% on incremental shares
* Discount to replacement value
Slide 17
Why Buy MAA
Flexibility, coverage ratios and cost of debt have all materially improved over
the last three years; balance sheet positioned to support growth
>> Balance sheet materially strengthened
>> $150MM of forward-swaps put in place Q2. Most 2005/06 refinancing rate risk
minimized.
>> Improved dividend coverage has increased flexibility
>> Cost-effective access to equity thru DRSPP & direct placements.
>> Fixed charge coverage has improved to 2.56 from 1.78 over last three years
>> Agency credit facilities offer optimum debt financing (price, flexibility)
Slide 18
Why Buy MAA
Current market pricing of MAA offers a discount to the underlying real estate
value
>> Market pricing is approximately $64.5K per unit, or 6.0% cap rate (at
$46.00/share)
>> One of the newer portfolios in the sector at an average age of 14 years
(40% of portfolio <10 years old)
>> 4,870 units at an average price of $72,000 added in the last 2+ years
>> Recent transactions (SMT, TCR) imply values of 5.5% to 5.75% cap rates at
$65,000
>> Equivalent pricing of MAA drives price range of $48 to $55 per share
"Our NAV for MAA is $51 per share...MAA is trading at a 12.8% discount to our
estimated NAV, and the apartment REIT sector trades at an average 13% premium to
consensus." Ryan Beck 8-5-05
Slide 19
Why Buy MAA
Current MAA pricing offers multiple points for upside movement
Relative Valuation Summary MAA's Valuation Versus Peers Versus Multifamily Sector
2005E FFO Multiple (1) Discount -9.5% -16.7%
2006E FFO Multiple (1) Discount -6.3% -14.5%
2005E Multiple/5 Year Growth (2) Discount -18.5% -22.3%
2005E AFFO Multiple (1) Discount -8.6% -12.4%
(1) Source: Morgan Stanley, August 5, 2005
(2) Source: Ryan Beck & Co., May 9, 2005
Slide 20
Why Buy MAA
MAA has better coverage than the sector, yet carries a higher dividend yield
AFFO AFFO
Payout Payout
Ratio Ratio
Yield 2004 2005E
MAA 5.0% 95.5% 92%
Sector Average 4.5% 103.5% 94%
Sector Median 5.6% 100.6% 104%
Source: Morgan Stanley 8-5-05 & KeyBanc Weekly Valuation Report May 23, 2005
Slide 21
Why Buy MAA
MAA is a lower risk investment than most in the sector*
>> Low beta stocks should be more resistant to a market sell-off
>> Apartment REITs have historically been low beta stocks versus most other
REIT sectors
>> MAA has demonstrated a lower beta than most apartment REITs over a 5-year
time horizon
* KeyBanc Capital Markets Monthly REITer January 2005
Slide 22
Why Buy MAA
As job growth leads to household growth, MAA's portfolio has the best "rental
demand growth prospects to pricing upside" ratio within the apartment REIT
sector...higher portfolio growth prospects AND higher stock price upside
opportunity
[Scatter charts depict the following data]
Job-Growth Based Rankings 2005 FFO Multiple
AVB 2.2 19.6
ASN 1.9 18.0
ESS 2.1 18.0
BRE 1.9 17.0
TCT 2.3 15.6
HME 1.9 14.0
AEC 1.9 9.0
EQR 1.7 14.2
CPT 1.6 14.0
UDR 1.7 13.9
AIV 1.6 12.8
AML 1.5 15.0
GBP 1.7 15.9
PPS 1.8 17.7
CLP 1.6 10.7
MAA 1.8 13.0
Household-Growth Based Rankings 2005 FFO Multiple
AVB 0.87 19.6
ASN 1.20 18.0
ESS 0.96 18.0
BRE 1.15 17.0
TCT 1.24 15.6
HME 0.93 14.0
AEC 0.97 9.0
EQR 1.27 14.2
CPT 1.46 14.0
UDR 1.43 13.9
AIV 1.27 12.8
AML 1.68 15.0
GBP 1.73 15.9
PPS 1.71 17.7
CLP 1.54 10.7
MAA 1.72 13.0
Reproduced from "Real Estate - Exclusive Power Ranking of Multifamily REITs,"
Wells Fargo Securities, 12/2/04. REITs ranked by two different power rankings:
(1) 2-year job growth estimates, and (2) 5-year straight-lined household growth
estimates. This proxy for property-level earnings growth potential is then
contrasted against current pricing (as a multiple of 2005 FFO forecast) to
assess pricing efficiency of individual REIT names.
Slide 23
Summary - Why Buy MAA
Significant internal earnings growth upside + steady and disciplined external
growth prospects + secure dividend + pricing upside
|X| Significant pricing upside relative to sector
|X| Lower-risk business strategy & operation
|X| Significant earnings upside to recapture
|X| Solid earnings & value growth prospects
|X| Disciplined approach to new growth
|X| Secure dividend
|X| Solid earnings platform for dividend
|X| Portfolio better positioned for growth
|X| Lower volatility and risks
|X| Shareholder focused management team
www.maac.net
Slide 24
Mid-America Apartment Communities
Creating Great Places to Live