MAA - Earnings call transcript Q1 2018 | Mid-America Apartment Communities, Inc.

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Operator

Good morning, ladies and gentlemen. Welcome to the MAA First Quarter 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded today, May 3, 2018. I will now turn the conference over to Tim Argo, Senior Vice President of Finance for MAA.

Tim Argo

good and Savannah, you, morning. Thank Argo, This for President Finance Vice is Tim MAA. of Senior are CEO; With CFO; Bolton, Eric me our Grimes, COO. and Al our Tom our Campbell,

would prepared Before We with discussion, encourage our to results company making refer as comments may like be the to the will you statements. this part we to of point our forward-looking projections. morning, forward-looking begin management differ that out from with the earnings the that and I yesterday's section statements Actual today's this release will available of risk results. XX-Act filings morning’s prepared copy which and factors be SEC, in on may These our describe reports, copy comments future website. impact our audio call along an materially with of

we the non-GAAP to certain Eric. call, over this release financial be in discuss turn also GAAP comparable supplemental our will now call Reconciliations and I'll found earnings can measures to data. measures. financial During

Eric Bolton

Tim, Thanks, and good morning.

slightly expectation on renewing our strong. quarter high, growth markets. rent ahead across First and of Occupancy housing the were and continued leases demand apartment our results is for solid reflect is

leases elevated for However, new to on continue on new ability of to growth rent residents. supply our drive weigh levels written

continue the pressures with supply number We expect we busy of believe this year, for But that revenue of to most the as enter that bottomed encouraged, out trends this trends persist are the will moderating through with we XXXX. trends season, and cycle. capturing, in summer are have we leasing

operating pricing the on and and high our pricing; levels; expenses strong the job Post our demand trends key same-store by the trends continued several continued These strong continued performance being portfolio; renewal forward, performance occupancy apartment in markets; improvement margins. lease variables. on include for supported moving the strong operating and are our favorable expectations, within housing captured finally, across Our growth the legacy improving in

better for see appreciate very we mostly service low a remain associates, with these X.X% our the leasing XX.X% our evident NOI, support that favorable healthy lease of the forward, in I positive in quality our first housing provided This pricing associated continued next face pricing few the improvement development several quarter. areas momentum pressures continued apartment markets in should properties within turnover results basis. of on-site and in incremental of is of is quarters, more running portfolio. belief, key the in moderate. higher supply in urban-oriented Resident new growth the on testament for healthy is will submarkets continued This moving the While performance our during in statement despite and of higher really pressures XXXX impact markets, remains about renewal supply supply in rent a by at the XX-month continue not level to demand new of very to pressures a their but strong with also higher efforts. levels only The belief,

the leases points, blended XXX more the portfolio to However, in year. it's by rent the of first quarter legacy worth within quarter Post growth basis urban-oriented that the on compared overall first improve did last noting signed as

will as redevelopment believe portfolio opportunity management legacy portfolio, opportunities rent performance the within pressures accelerated practices improved of for of the revenue we supply support new and the in our growth, trends. both meaningful much the As moderate, Post result execution a a

details associated implemented. impact with various a scale the portfolio on margins. practices efficiencies will cover operating early progress release, strong more results. operating the in As to been associated continue but noted And in fully results expenses we earnings the operating positive overall have are portfolio, Post our legacy larger within our comments, his the Tom with pleased managing drive with as our are making

the Over integration systems with wrap associated we the our with to course the merger summer, associated Post. the work of and back-office up expect with

capture with value outlined accelerate that to portfolios we is -- about. redevelopment associated continue continue unit same within we effort, and As having the merger the the previously refine accretion operating benefits interior the we've to something feel as platform the both Post on Post for well as the confident

to to As late noted Denver. of acquisition was the property release, closed of construction last of Phase the during closing on located a Denver, X This property great retail earnings year, station is location that property the in is to Denver this high-quality is project. addition terrific downtown in recently a our that adjacent with high-end located in developed negotiated rail located adjacent restaurant acquisition property of off-market our to approved we to a newly new the April, and This portfolio. subject will and venues. light The a connect completion a shopping

underway the to year. get Phase X property with We the expect later expansion of this

typically Resident the sheet, capabilities call In forward and the over the summer of volume, believe transaction turn of XXXX will Post over balance done very is first and prepared surrounding out as external play year, have of proposition I'll We high of our and along year. have our nearing the all of MAA and the the of has property all season. deliveries, about platform, that team a continue all we expected. Tom. to hard the That's proven we further cycle increasing work enthused earnings-accretive that continue heavy the yield believe execution our work value looked integrating stabilizing underwriting We're the deal in lines rent for and capacity past into to our the reporting our year I steps the opportunity legacy surrounding X-year remain growth. activities completion high. reaching our the flow remains summary, strong, be in optionality we us the to to and with and fully to the in retention to and appreciate start merger. slower we opportunity with I front trends important will new quarter in see leasing with continue Demand like I along for long-term stabilized. and final the to portfolios, we to excited the comments, operating way to now look

Thomas Grimes

and Eric, everyone. you, morning, good Thank

X.X%. performance prior growth. expected. Our the Revenues came as occupancy for quarter operating over NOI and X.X% over the increased year, XX.X increased first daily in average rent just with were year, X.X% X.X% effective and by prior Expenses

portfolio headwinds, quarter. be of driven Looking saw a This growth portfolio XX.X% occupancy further growth, which the continues quarter the both daily elevated the at a which XXX had year. of markets the legacy supported rent effective X.X% of significant first February, occupancy trends lease-over-lease company performance been with Post and revenue and the lease is Despite X.X%; X.X%. the Blended by legacy spot same is same XX.X portfolios. with on same-store March, the X.X%; as is and points blended quarter, improved we is by the bright primarily the from revenue last for basis January the time this in to time to X.X%. in quarter, average our year, -- The quarters. first XX revenue result portfolio daily portfolio primarily generated grow X.X% by compared the Post overall by year. drivers X.X% average growth rent of pricing effective prior X.X% first during the has growth. basis several was than monthly in Expense growth on This combined the portfolio, for supply last in for Supply a points higher new improving performance pricing MAA

While expense increased quarter. Overall same-store repair up more Post X.X%. manage the on maintenance were $XXX,XXX expenses X.X%. during winter our more property Total quarter than cost, That as storm by during within less personnel driven the practices expenses and cost, portfolio reductions in portfolio related expenses Adjusting well in the up insurance. management operating in storm revenue down results. just just now have and X%. aggressively as includes cost for are were incurred expenses improvements immediate casualty shown the showing was our This programs the pricing, of to

As the have on basis legacy This a in programs year. continued Post improvement on we last made margin result, and portfolio points. the expense improved with run the of point of Post room the is to We still XXXX. expect quarter basis operating quarter of first XXX management top first portfolio, another in XX our progress

were now of our was disciplines Our show savings and XX.X%, place, are legacy year-over-year points higher blended up momentum. Post This platform fully driven by occupancy average than XX XX April rate, is is blended points basis Overall in consolidated lease-over-lease which April in operating rates which April daily the will benefit run same-store the year. is at April current XX better improvement continue. last Overall, same-store the the portfolio. basis prior year. X.X%, in than the in results rents basis point and a

of X.X% exposure, XX,XXX XXXX, to was to Dallas, picture elevated X.X%. group. are supply documented. supply a Richmond, in and both and XX-day X.X% growth for strong, in encouraged from robust strong growth expect In a is remain all at seeing and vacant growth that We're well growth X,XXX out in well year. has pressured pressure. most in good expected period, in XXXX. markets, increase The the X.X% levels number units job several of nationwide rent our These of represents deliveries. facing remained at in deliveries to ahead XXXX, Our XXXX, have in is Jacksonville markets. we a low was Phoenix, growth Austin job notices are in growth XX-day trends trends. with for job and and the Dallas Orlando stood expect and line and We're which again prior All markets. Dallas expected Austin we and Austin, X.X%

year. completed achieved renovation by X.X%. quarter. customer more overall continue Momentum additional In complete redevelopment dividends. Move-outs $X,XXX XXXX, is down are low X.X% in retention decrease non-redeveloped XXX on by focus renewal down the low. completed portfolio Our to We've our this were flat in X,XXX and portfolio. XX% quarter, rent and average, home-buying rolling were On was On rents current Move-outs unit. our increasing first cost to is the Home our move-outs basis, Post turnover last same-store remains X,XXX remain X%, were increase a we for in turnover paying historic Move-outs legacy comparable on insignificant turnover building XX.X%. getting the across for to units. program to XX-month and an on dropped and than service year. to of residents units expect essentially for a renting accounts while steady X% less this the a of an we than to home-renting move-outs. spending the with for The

that units Post compelling XX,XXX of total redevelopment a opportunity. identified have we've reminder, a As

portfolio, total the to we For expect interior over unit X,XXX upgrades. complete in XXXX,

On of the portfolio, to Post the legacy stands a MAA the continue combined redevelopment pipeline legacy in now units. On total XX,XXX XX,XXX to we with neighborhood portfolio, our pipeline units. redevelopment a robust of have basis XX,XXX

Houston, release, in you in Oaks, As tell are communities as can Post lease-up first well the at our quarter, expected. Afton from performing active the stabilized

pipeline Post of Lamar Midtown, remaining End track North Post II, River on properties, stabilize are II, South lease-up Our the West to Denton Post all Acklen schedule. on and

XXXX us. teams. We Centennial of integration now bulk platforms the XXXX We in for and year operating with started significant X was the work. leasing have completely is pleased with our begun The Atlanta. Post Post a behind portfolio of Park organization. We're change

aligned Results equation, forward to in sides have XXXX activities and capture Al? as integration a the cohesive team. as both We opportunities value-creation full finalize look expected. XXXX. operating on to We expense of more much revenue progressing continuing started platform we with are the and and

Albert Campbell

which remainder Thank of earnings available common finally, FFO share above was our diluted and for shareholders some on for guidance. $X.XX you, the $X.XX first the additional per morning, guidance was performance, for $X.XX common provide of balance Net for per activity, midpoint Tom, the company's quarter was quarter. on and income the share, I'll share XXXX. quarter commentary sheet per good everyone. the then

Same-store first from and $X.XX shares in deferred expense per better to the to performance, than produce the the this related interest not G&A included for noncash all the out-performance performance share our in the embedded derivative included was of and First Post merger, quarter valuation combined guidance. expense of expense quarter. slightly original and expected, the were issued

of quarter, the During not acquired quarter. recorded We however, total the acquire close X communities. net $X.X sales disposition merger about any Colonial in proceeds. million did the we in These for during first gains did, parcels land of on produced $XXX,XXX the

XXX-unit, X a part $XXX expansion, a we XXXX. of Saint is X begin April, to the in The parcel be mentioned, closed as to Eric Phase an expect acquisition total the included XX to which the community approximately units develop expansion, located the of high-end we acquisition additional XX, Denver. As expected in million. Phase on Including in investment later land

the Including projected a we one X.X% which construction Following yield. is our and at a We quarter $XX.X recognized X Post currently also was first in land of on of proceeds we X,XXX during million NOI Las $XXX.X The quarter, occupancy units. stabilized on lease-up completed a communities, additional X was early be will million, a plan communities, million, now was our River group portfolio second of gain Also, quarter. $X.X end. located as located of which total closed million parcel XXXX Vegas the community disposition Denver. $XX.X with remaining development Post River end. end, will for million be during Average expected of of a quarter XX.X% with North, complete have North, in all for at total communities quarter investment an construction produce of that but totaling total to cost $X.X under of contains the funded in

in the XXXX half will average X.X%, stabilize to yield the this over and We the of community produce $XX of stabilized NOI at overall million expect in X an stabilize first lease communities half NOI. ultimately to second of of remaining which year,

great Our balance shape. sheet in remains

our we unencumbered over to of debt, paid During XX%. NOI million the secured an quarter, pushing $XX additional first off

also $XXX to bond our quarter of just determined our our net for financings later executed secure while this was bond XX.X%, debt-to-recurring-EBITDA projected year. interest Xx. is only end, We forward hedges rate was future At million leverage over by covenants,

at cash We borrowing facility also capacity end. credit had million under of almost our $XXX unsecured and combined quarter

net of major transaction common net diluted projected volumes. maintaining our components related $X.XX to the all is to or $X.XX integration which the share projected is $X.XX midpoint, to be outstanding per we final AFFO, XXXX. full and to $X.XX per share and per share income year forecast, confirming is midpoint. be our of In cost FFO Finally, FFO, are to merger or $X.XX guidance including income, for summary, and $X.XX share to share includes performance Post projected AFFO per same-store $X.XX be per projected $X at $X.XX to merger. for

projected to $X.XX per For the share per or second $X.XX to quarter, at $X.XX FFO is midpoint. be the share

year. reflected comments. opportunities other synergies the the this the overhead of as capture to million prepared with While include guidance adjustments earnings of not are the Post we We both on impossible which That's adjustments all as track related of we to of the noncash way continued as merger, well year, full the these the expect do in merger remainder volatility related NOI over to remain Post and outlined $XX with have our are projections current valuation further valuation merger, the to deferred and predict. any the shares acquired in the our

now to for call Savannah, over you the we'll turn back questions. So

Operator

take Instructions]. can Nick We with Joseph our Citi. from question [Operator first

Nicholas Joseph

the guidance at X.X% it get you full revenue quarter did X% throughout just You I do sense pace, an want expect talked the for XQ the full year to growth first same-store same-store how you've X.X%? I and of a year, is midpoint. so high of do expect the in And around you about trend? revenue at know year guidance And to the end acceleration

Albert Campbell

X%, strong forecast performance pricing the through to before, this being few lease consistent, Al. being a part on talked year, through at Occupancy is major remaining is say, back year key components. back new half of the and about general, XX% in the built the will I as then what pricing that -- the over this is year. Nick, we've the X.X%, Renewal certainly, of year. really

for I'll guidance the We XX mentioned. the at expect expect I XX April, -- in pricing points of some in that actually, year, blended more first be improvement have tell lease capture at than And range do we've XX% much see will points. was year, and remainder what would that better pricing new to year, points discussed drive think of XX you, quarter XX, that basis we was we prior the the to above prior though, over the Tom year, -- basis our basis midpoint. captured the to as the

And very for outlined good and we're so feel so lined track. up we right far the we on the what and about trend prospects, and guidance,

Nicholas Joseph

year-over-year same-store of [indiscernible] by the acceleration. end the of should a the from towards then end guidance But year, basis you the top be

Albert Campbell

build, second based more -- fourth on as revenue right. and through we third still on would end. The in The the It be That's [indiscernible] grow that lower would point. revenue would the good quarter, significantly. went

Nicholas Joseph

saw then And revenue we to lower quarter, Actually, on the just view growth in so you're today? market. saw in get We the what what little quarter. seeing your the Houston wanted there just first same-store fourth than a year-over-year

Thomas Grimes

occupancy we Nick, with it's and rent negative Tom. growth. and Last year, high Yes, ran

a and the replaced As you changed be unit. revised know, the bit, each takes time to hurricane that for pricing on it

give just up We what's in just we So were the on system. you need to through revenues to rents will X.X%, flavor that Houston April a for fall. get to blended repricing and think continue coming,

Operator

to KeyBanc Wurschmidt we go Markets. Capital Austin next And can with

Austin Wurschmidt

I And year? to have that of that you impact you guess, have some prior As you're to second, supply, and supply throughout quarterly pushed, each table that's properties laid out your still the as of was decreases growth then feeling curious, that just tend lease think do from that investor it completion? year? significant that the relates see some seen fairly to into you quarter. case guys market supply, guess, we already should it by Or I you indicated one, down, think later some a deck the showed ratchet in I by quarter do the

Eric Bolton

question year right, We the that yes, Yes, recent appears and some slipping we will, not is supply slippage, bit of actual some worrisome that supply the as more new slipping later of But the is that the activity until is for I the mean, such think based some I a do What you're later of to thing a in of deliveries in little the in respects anyway. up. some the lease starts sense fourth we will a your year saw And updated the answer with into leasing of take quarter, year. to the problem time to the begin really was the information do the it's is year. we most the year, the on, of of quarter I've pricing the to quarter leasing be course robust quarter worst as the would deliveries of yes. third into on have move slippage thought place the particularly, pre-leasing we into pressure happen that prior in you unit, in last you the see tell if the mentioned, third which

of job a XX than we is blended accompanied up not that some also on to out is started into seeing such points than year. also that expected quickly given a the want a forecast bit the being basis year a basis with, on growth while about leasing growth we're more we've starting QX we thing, pick bad said QX, this the Having robust. deliveries supply little more revision I moving So job QX pushed is that, mention, activity seen by what higher

to with which So healthy we're little continued think bit taking terms growth is job place, around while going in of and helpful. the is timing, demand be encouraged I supplies a moving picture

Austin Wurschmidt

the growth? outlook? Or Any -- growth big the where particular drivers job of markets job improved that

Tim Argo

of up This is Austin as I push drivers helpful -- a really is continue which to Austin. markets. be I'm will and that our Yes, and mean, seeing they've our they larger been years, -- just engines be now job obviously, for Tim. X Dallas few

Austin Wurschmidt

Post, far savings And as from expenses, kept of really then and quarter low. as levels clearly, right. All another expense expense

lower a of ratcheting a maybe you're little to should do towards year the and about the As of think initial expenses bit through is full think also that higher range ratchet higher? revenue kind outlook bit little the finding guide? the that the Or opportunity year, end we continued you keep conservative that on

Albert Campbell

say we that expenses, would this Austin, X.X% feel X.X%. the guidance Al. for good full is have we is which I to about for year

that quarter back north on the you the expecting Now first what X%, somewhere of would with that at for up quarters the blended the is tell maybe X%, we're remaining year. around little half X.X%, X a of

I overall. think that's would expect we what

Eric Bolton

on If up obviously, wins the expense year. half of side last began in getting showing else the early were early some the we last something of

get continues, prior year. hard, back comps a year absolute but the year-over-year bit of comps, tougher as will towards affect the we a get the the half which So results. little little to comparisons the course just savings get of The

Austin Wurschmidt

the one between I me, was, appreciate last then expect well yield you Phase for breakout give deal X ultimately on be what on the will on $XXX that. you And the Denver us it as then the what just stabilization? and that on investment in can Phase deal, X million total going as and

Eric Bolton

something the X Phase million. Well, approaching $XX was

Albert Campbell

$XXX It's million.

Eric Bolton

the balance spend... is and million, we expect what to $XXX

Albert Campbell

$XXX million overall.

Eric Bolton

out upper-X X. out range, X we to leased as expect of it to fully Phase is that what expect up. gets stabilized yield get we project Yes, -- and spend Phase this The on built gets

think as in we, out yield is years location. great upper-X NOI range we the as to on so. or mentioned we I But the deal expect Denver over think in a going my it's to stabilized an this that our incredible build presence, this couple to And be next comments, the So we be continue of on addition. we

Austin Wurschmidt

X of at Phase on a put a X% basis? north yield So stand-alone does that

Albert Campbell

X of X very you from will will a math which Phase on as most obviously. efficient a things you the XX because be Phase that, The addition smaller unit, -- can do use is amenities Yes. the can it and

Eric Bolton

you it, of initial sort yield. XX% X so an Phase the that'll indication give of And when occupied about we the bought was

Operator

go Stephenson can Janney. to next Rob with we And

Robert Stevenson

X these within on are going Phase is much asset, land this future for the controlling that newly-acquired XX-or-so thinking what than of days next months? you development? And the other how you're Other to start

Eric Bolton

have in underway would parcels very and expect all Texas, we Cherry late Creek that The submarket year, own Fort of Dallas, in little North North satellite year, opportunities. those We Creek working predevelopment Worth, be we in a potentially have in McKinney, Dallas, city We McKinney, that in already Denver. site next on still with a site this into maybe to bit. early Cherry we're slip but to may X

We Raleigh, phase also also, have trigger on will an the this control opportunities, we in and another Carolina with North opportunity, property we likely a year. existing X that opportunity later pull

the In And another are working on. we we addition Denver have that working site in a to we that, on we are site also in have Orlando that we have contract. that

Robert Stevenson

most the deliveries from then there's late would basically, timing like I 'XX imagine mean, starts, I in to to that, it up mean, means going a of no this that which that wind I that to 'XX is at basically Okay. expectation standpoint, is sounds correct? all being either little or 'XX,

Eric Bolton

correct. That's

Robert Stevenson

Okay. Tom, bit guys that were way than any And bit then, expecting? weaker stronger, now through seeing that might the year -- a of a little initially X/X the you're markets you be little you're

Thomas Grimes

and But the right Orlando there those headwinds I Austin mean, and then not like and Honestly, in Phoenix with we growth there. the are Yes. now. job Rob, very out pleased pleased with shoot. and of Dallas places we're expected

Robert Stevenson

last Okay. one Al, And you. one for then,

spending days? hard cost turnover, guys you In terms these what unit are on of the

Albert Campbell

big all it's carpet replace on depending on around per $X,XXX in you a with think $X,XXX, I unit -- factor That's $X,XXX, or not. whether things there.

think if that pushes end I you it carpet. the replace at high

say think so roughly X that's and every or so, we that would do You years I what today.

Robert Stevenson

the are in you existing turnover, staff? to the to Mid-America that? having level do able And Okay. of to with reduced outside that contractors do given you're Or bring

Eric Bolton

and out. close contract that that of cleaning. in-house, labor us and sort Al their is carpet item of handling the portfolio helped XX% capital contract of installation and majority the carpet the turns those that with Post the really overwhelming replacement, cleans. And By to we meaning, paint mentioned, key one Post comparison, The for of that's things paint we're use carpet has

Operator

And & Dennis with Zelman Associates. we to McGill go can next

Dennis McGill

can had just new you XXX around you I how far question, couple the the that then trended Post overall leases 'XX? pieces year-over-year. the the and were XQ and then steps lease fill maybe for First was holes up said in as portfolio, new give think bps Can versus what of leases? new a as you

Thomas Grimes

Yes, sure.

last just on math, you roughly versus on if basis to blended, want detail XX I'll April year New on quarter, lease same-store, quarter up blended, a renewal, up rates lease was Renewals are XX negative rates new blended into X.X, then but go are points. the X.X. points basis were, basis, lease And for save new then X.X, first first and some it, X.X. was blended, positive. points combined and April, for is X.X; XX And basis

Dennis McGill

guess Got the that, were up I new points year-over-year. I basis so said leases, think question Post then And you only within it. XXX

Thomas Grimes

That's correct.

Dennis McGill

legacy the did on quarter first MAA What in do new? the

Thomas Grimes

new you -- said blended on lease MAA Legacy rates?

Dennis McGill

Right.

Thomas Grimes

MAA about second. new flat Bear with me just rates a for quarter. the lease were

Dennis McGill

Perfect.

finalized or expense-wise the will on revenue-wise? we see done either synergy Where you obvious operating be will most question, the that year. this benefits later the platforms that's Second know once

Eric Bolton

hard from if of will. now, terms Right of opportunity of Well, I systems for will to the and get in I will will, our comes various wasn't sets both renegotiating interface companies if just we in working putting effort, a the point you, to a platform. of We, much because as we look savings regional Generally, different of services consolidation result and having is having company. with system revenue fully and that tell how versions you and manage supplies -- services and and the side the get really at think function so that a are conversion on use, we a tell it of with gets on that optimized two a to the to result our more lot property revenue of opportunity of the you, products where frankly, or systems I is as still different our lot a of the little same and LRO two things. contracts where hope management two expense reports, to, not efficient you leadership is software. just management and as specific

So in X days that up have by systems. about the just consequence, it and just halfway efficiency terms we point point. the wrap I to XX business frankly, there's now. or how process a manage we're where a inefficiencies, having gets through lot And think conversion We'll have here And on more think ultimately of as in we another portfolios the of at this so. I different we

to The other as with from we're lot activities activity is bit in finalized, the intense as really to sort consequence new a that able lot focus to, aggregate, to the thing of of But is, new creates it's that we focus ability this if opposed system, on sort you together. on relates things. of web to a of much introducing just consolidated it in of back lot A systems comes intensity web-based robust will, work a to get lot We as fashion the a as things more little it platform that and are them we subtle. a to think of more bring merger. a a more being frankly, putting are so want

Albert Campbell

opportunities. and capture that three the to we've capping redevelopment. one Then capture the that years what of the X/X is too remaining I from if we're over might the Remember, question those year of is to talked is plan this to just about so, that. add or things

to see at pace doing years portfolio several we're off out roll this. take to will that opportunity it So the that

providing will for opportunity that future. us things several in are keep there the So

Dennis McGill

And how long or and on that in the you're you switch revenue management? run it so, efficient on platform, to you to flip XX after same the get stabilized, when days rate will take fully the a

Eric Bolton

think I happening. it's

I frankly. think instant, it be will

the remaining on I of system. consequence think finally it have we being of a sort dissipates same as inefficiencies happens. What little

Thomas Grimes

in the you new reporting quicker now, I Post tell And portfolio, reacting. Dennis, seeing rates, system you're benefit the Dennis, management to the streamline be capture that think on what of I the lease just that of and and and really we're would revenue is, beginning most

Dennis McGill

talked changing historic not across perspective Okay, then multi-family anywhere that not from we're space, of pretty being having Any that to go Eric, versus is consumer because seeing all how but much much last behavior constraint? housing. just the your you great. And inventory to and of at lows, turnover thoughts question, just of

Eric Bolton

I think that change behavior. a a lot it of is in

we see over couple -- to the continue portfolio average income resident certainly I continue to last within of up that age, average our years. move think

I But it of some to and social, that sure as consequence our it to female two last and of continue with the move trend. percentage of is just anything. go lot a patterns versus more home We -- continue or see buy out to the the believe is more the into as is up think factors Certainly, ability a years I more as challenging, about to much three a degree. I'm behavior of male that and to continue it resident our starter profile

Thomas Grimes

of likely indicates about And Dennis, form, is which sort X in or to sort point, a single we've get single. backlogged in buy married shape that and go the seen up people couple our be than house not percentage more we're Eric's unit of point, some seeing married way, a supporting rate assuming

Operator

next Yulico we And go to with Nick can UBS.

Trent Trujillo

appreciate Trujillo, on that Nick. back. you comments Trent all is the I had with just This wanted supply. I circle on to

back Just wanted topic both. to on circle that

you market start of D.C., of So larger plus can the Houston speak it to the maybe given experiencing concessions supply some you your and now, the some that market, seeing Atlanta, year? of that's said trended slippage of, how since you're peak level in across Dallas, perhaps, urban and quarter, your across first you're right

Eric Bolton

Concessions with the Cedar we're pretty -- with are and Uptown Austin, The to north we X is part then X,XXX is most earlier. or In area pressured was is or XXX about is through seeing on running X in really that just is rare there. Park, well which like was Midtown. units, we of what And of previously. perimeter, going X is and it about X corridor, Plano Sure, seeing really I'll 'XX, that and in submarket X-month the months 'XX. we is free, bit close pretty month slightly Atlanta it about Lamar Buckhead X to with perimeter. lease-up similar which places, of actually Atlanta. saw It in in in -- sort of supply We've It's are concessions. months pressure weeks a outside X to in And months. down sort the -- at tightest specific in pockets about And closer free Road Congress which X what expect weeks, X South -- see in and to Dallas, There we've and move South Frisco, is X better what to months Trent. in saw got and in That's we're has Roswell little Austin. there. than running which X uptown got we depending month Richardson.

Trent Trujillo

I quite perhaps, deals the deals land you market But that competitive the under mentioned something you acquisition commentary and And the earlier, Rob be you're of to mentioned about quarter sites transaction the amount that you is the Denver end, last think, market, acquisitions, looking but would how any regarding after I you can think had speak so considering? on X helpful. were just few at. currently a closed in review, quarter, had

Eric Bolton

underwrote deal slow years we've that X quarter my Yes. -- activity. I for we quarter, We, the is incredibly in a is the deals the quarter number first first we transaction the competitive. highest typically mean, mean, the in had of is market comments, call mentioned I as I in very over which in

seen the But a to lot you're last of volume. to we and markets, if continues of weigh or secondary some capital, smaller X bigger these more you're some to will, of more perhaps, markets has more, low X markets X.XX rates, of see X.XX, some over in -- and move down markets. I a little So into X we've bit. if non-coastal cap and in range anything, you the to mean, routinely, X.X months the continue

competitive. continue now, it's any justify that ourselves we of is capital market, of the we And it's we're where on that -- for and So hurdles but happening. that active some just in deployment holding to disciplines right see hard in the terms remain accountable pricing believe the to pricing that the really incredibly the based

we patient, going as we're a that to cycle. -- remain frankly, we get as so little And think later into the

what right supply being that think I competitive get a pretty year, later may opportunities this they it's bit more trends little now. favorable, but are, the

Operator

go next Baird. can Drew Babin with we to And

Andrew Babin

new like you're supply Would legacy you improvement year-over-year directly some you've on Atlanta speak pricing you the units units those acquired? Dallas, guess, to relative how and pricing the say on the portfolio. to Question new these that Austin? this in And Post is Uptown, within and CapEx places to lease ROI attributable of can I

Thomas Grimes

we to renewals adapting to was that we is and beginning direct CapEx reflection the completely. year haven't up, -- to getting really up. supply of different systems X on get done were enough and on were picking And merger our ability Drew, year, to the really just portfolio. was This we a move were of pricing the started where push really were last We we just when last number. pricing

tell just and the was second systems in in you, in is uptick place. getting And part learning would practices of what So significant us terms Drew? the question, our your the of portfolio habits then and sorry, I

Andrew Babin

what's come there the to season. the to as in far certain in pricing it? the of delivering I proposition Is peak relative supply rent I the these the markets? leasing maybe there's from that goal where of guess market to more benefit supply of just these targeting a the strategy you're new value your is guess, to as new to relative relative gap kind renovated sort units

Thomas Grimes

did is of -- test of fine stood the that That's really time. really, what we're so excited about job locations the a picking Post Post portfolio on

what is XX So that are foot. have old, product mid-rise that got being years for let's by say. looking was shaded to a we're you've out And essentially, we rises X high $X

a unit, stay sweet $XXX less we're even with So able than the to upgrade the It's for well-developed in to great lease we're us. $XXX bones, units and real spot pricing. property, new upgrade to able

Andrew Babin

now if pricing And bond for maybe whether unsecured economics of just XX anything sheet, XX MAA a you flat over helpful. given the spread really That's yield lastly, years, and consider curve? doing could of right there, with a on of Al, the kind a kind duration then would years, question balance give

Albert Campbell

keep $XXX day, like gone a up rates, Yes, underlying a financing Drew, in done preparation the hedges million up rates year. as the good in recently, the a to it'd we've bit have XX-year this once be bond bond, if treasury around But that's has I do X.X But little both range, at. point. and we I XX-year mean, in probably gone market. mind, some of X.X something for mentioned, spreads

I this So when bit say. a and little be year, do if we that, deal lower we'll a than would

And second question, was so that? the -- what that's of and second part

Andrew Babin

XX-year.

Albert Campbell

question. we've few balance over hard before no And our years. about things absolutely, of worked the Oh is sheet we've very last talked one the

We liquidity. And Now of outstanding sheet a we're specific to maturities for think our Drew. the push years, public looking are to out. we've lot point. ready to strengthen on one market do continue next at the to XX-year we of got target is or bonds at duration balance that few some a a us potentially things a point we're go over our That's to

tell tactically you can't over kind we us next that work to activity market when So do the when that. we're do gives but would year expect Obviously, or opportunity, going that to two. the we seek of

Operator

And Tayo go to Jefferies. next we with Okusanya can

Omotayo Okusanya

A couple for questions me. of

First increasing of all, Denver to market. you exposure the your overall are quickly

Just years, in of exclusively you're over few the curious get and why that next Denver to focusing on how kind expect big market? you

Eric Bolton

several years. market Denver the at the looking frankly, last for, been we've Well,

dynamics We believe are the there continue growth to very that compelling.

and think good demand job lot household with a growth that from associated Denver a migration think market. I occur that XX just in I likely of -- and there's years for that next things perspective the

lot in. Some like West markets continue to favor to households to expensive the that as and employers of We Coast prohibitively well. live Denver, with the of become markets find Phoenix, a think continue

to the into had toehold been are we a underway at. market of really SyncXX that you we as with off-market in Denver that and a then acquisition may so several created we consequence now they of working already we And for the -- the went the out more the gave an us that project there, As looked on years. Post, spending find result a merger and development did opportunity time recall, market, we've actually

that site also there, we just submarket, have working on. mentioned, southeast had compelling another I balance and Creek high-end of we're that already submarket in little sheet bit very Post the downtown on As Cherry a

we're year that going we're sort or then working to So working of site recently for -- that we tie-up. so past and another been we've got the continue to have

both and process our look to work well So be much we'll And patient slow like of we acquisition. that very build continue the feel that in as methodical continuing we're to that us. in market, a presence through, the we it's but it's good as market, development terms in growth as a just very to fit for out dynamics Denver

Omotayo Okusanya

helpful. that's So

is second question The for Al.

that down? I quarter, might mix kind with and particular, But this even low only and in range? again, be I'm see you where really guidance you holding forward, up quarter that good within curious the of you still that think cost talk I could Just category-by-category going maintenance, X.X%. a property kind keep back where tax effect, know of bit for going able how just same-store your guidance But hold costs will to of kind those little down. year, is rest was to you repairs you the guess, of is, do

Albert Campbell

Yes.

the think definitely us, of good and to I see maintenance for performer you'll for year, the Tayo. a continue repair rest be

now. You'll show line in we're opportunity. maintenance probably the see is it more capturing to what favorability, Post as and be personnel Repair continues of

appeal some will X.X are for consistent. but timing year was QX, be finalization. pretty real of think taxes, there I taxes, It prior the estate

will for X% X% end negative, low, in be long picture. the term, year will the right that the lower about expenses So is low of of, on think I we say full to kind but marketing X then not range. And

of year And the back those this year. so opportunity. the as year. have you renewal July, are the drivers of of do In insurance in we X that a the look of lot we last the half July at I it, half year, is renew think providing The key first

have bit that's so We increase of correct, wildcard. that's but to having that projected, little there We is increase we're a feel determined. like our a be an yet

Operator

John to Advisors. we with next can Green Street Pawlowski go And

John Pawlowski

position plan recycling to capital lot the strategy? ground XXXX, begin to of what need the change capital in a specifically you to guess on what see I for to this but I Eric, the pivot ramping we past, on dispositions? understand would you've done would need

Eric Bolton

a I years, Well, worked really you think I that, as or events a the both last of consequence that significant more portfolio want X less fairly alluded as M&A over the capital the where have we've to, mean, position recycling lot of gotten it. and we X

markets I number think a we the if a -- that will, we've We able operate we're of we bit diversification. reduced, think created significantly pretty little you of consequence as shrunk, to portfolio. got in were the that how the the in terms more of and efficiency balance

So we I long sort of where a saying that way are think we of right it's like now.

match new now deployment growth capital improvement, we're are or having recycling rate opportunity earnings -- think hard that and ramp-up finding is attractive pricing. and by a in compelling those that to out our of what the you comes long-term we opportunity offer in more match terms or would the fund capital an over of selling of to to will, I fund assets right if back And the then something particularly to we're pull time selling. really dispositions into opportunities

point coverage we're using keep always wall think earnings I this the the patient that optionality to the a out way sheet be continue capital good not coming but for proceeds today, And at we is have now. And right where, right to a do now we're right be out I selling have and of going balance just the now. estate. chase the place. think will clip a keep to in it the consequence, moment compelling environment a to earnings of is I investments have bunch optionality of keep continue there's assets don't think that we that way, right And that lot thing is multi-family coupons to just we of our so as a think strong, the a a strong, at to we real that I think in there that continuing the obviously, that with

pressure creating now. and that good off -- the obviously, but to earnings difficult without pull a associated to with we're is of use capital an right a be time So finding attractive it's seller, really

John Pawlowski

in about Yes. on people tent the underwrite to willing is, deals how your sitting and the for acquisitions, you're bid certain growth comments But are. the that bidding competitive in not certain markets,

but build to not war So that for today. comparable And assets I own day, a with somebody your portfolio? shape, dream guess, another is dream why else sell in sell balance sheet in the chest good

Eric Bolton

right of Well, recycling we the we the merger dilution earnings assets. big enjoy put to that the organization earnings the earnings Post. think that X earnings assets. the We've we've dilutive to And Longer-term we've growth we're war both right that as -- do billion up a to capital that thing over terms the through right But compelling portfolio. low-yielding better in got over the high-yielding merger right with with well significant getting seem over through new is us. of now. chest pretty a to I now from is recently, and rate more consequence years, last of done a recycling amount the put significant a event, of think Colonial, $X think these to doesn't giving from now be particularly through for organization continue We the

deleveraged years. have balance massively sheet X the We the last over

of X a in for a growth of been accomplished last position think, So now. that lot future over a years earnings you dilution dilution, lot we've and will, better has the profile, done earnings order we to the company, right if

really for to So focus frankly, that X that's years, the more the a is. right harvest the big to over out We and thing last of the earnings where do us it to think, now. see is we years don't our stuff the do need next for we've done all few

John Pawlowski

and terms the margin, to than one MAA backdrop, look me, Last submarket forward more Okay. you Post the XXXX you footprint? of supply on for supply footprint on the expect to XXXX, start in do laying legacy

Eric Bolton

not really. No,

And I seen that, we frankly, change why done rise to think given significant is get thing the reason anytime think today. only to rise that the product. what you this construction does I right very the The continue is to It's see I've going a in only cost it work. significant and build high-end, it way pencils pretty land now in high-rent can development kind of cost. make

reason see all any change built a a starting modest to more that of to that going wave I fashion see fleet conditions see don't I don't of so product to happening. that sudden, a And such you're think in -- modest out. be just to are there's going those price

Operator

And we Markets. can Golladay with Capital RBC go next to Wes

Wesley Golladay

lease an I hurt issue this less we really you on want year, But in do got the should new guidance. spread? year? the and just average, quarter, to concessions I the you to progression of On entire of particularly at go year, expect and fourth concessions back questions the for know that how the hit to be concession. look last

Thomas Grimes

on expect. concessions. expect Well, months we Yes, It for that to I I want year. happen just last in the to going don't fourth I X really the would to again the anything continue up concessions, lease net rates, that this new they have to base, quarter first then indicating that's of would not take the a ramped And of pattern build year, year. and on effect see

Wesley Golladay

you handy, but if know the lease don't in I the new last quarter? And data have you spread have Okay. fourth the year do

Thomas Grimes

it up looking we're that, to Wes. We it follow number I No, not is my a with fingertips. to. do have comparing But you at on can forward back

Operator

we and and over Eric, additional appears further no you, it And can back have the go I ahead for any closing or turn questions this remarks. team time. it at to

Eric Bolton

you. look to Okay. we Well, morning. joining seeing thanks, few thank a for in this And NAREIT so everyone guess us in everyone, forward weeks, I

Operator

conclude you, your everyone, does call. for participation. this today's Thank And

have at a You day. may any great disconnect and time,

Mid-America Apartment Communities (MAA) 6 May 182018 Q1 Earnings call transcript