MAA - Earnings call transcript Q2 2018 | Mid-America Apartment Communities, Inc.

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Operator

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

As a reminder, this conference is being recorded today, August 2, 2018. I will now turn the conference over to Tim Argo, Senior Vice President, Finance for MAA.

Tim Argo

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

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

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

Eric Bolton

Thanks, Leasing our reflect to continue apartment conditions demand morning. for Tim, markets strong housing. across and good

points of During This with a growth captured rate in with the is merger captured Post. pricing and quarter, lease-over-lease of growth XX quarterly second improvement blended last QX lease-over-lease rent we meaningful better basis year, best than X.X%. the since our

several will over of to positive point, this inflection We the believe capture and momentum the stronger renewal move-in QX the new pricing rent growth year. with highest rent the expect the basis, a at reached encouraged lease-over-lease over last We're leases expect of a second trends support historically remains we where and we to year. trends see on believe quarters. improvement growth pricing X.X%. captured we was level, pressure, the a residents have positive a competition turnover during and revenue that momentum strong supply in at and generate for significant growth Looking Resident an next low over new XXX-basis-point half

performance favorable year-over-year expenses. We in operating and growth continue very to capture

the favorable the a legacy same-store in with continued and and of I'm encouraged across pricing by our improving performance, result continue As be performance improving trends Post portfolio. we trends comfortable outlook particularly for emerging NOI to pricing performance. expense the

As portfolio. fact season, practices Post to our we past hold work over year submarkets This and in capture merger strengthen our associates wind We're to much the our impact. with that battling thrilled revenue the now appreciate of the Post to of work the beginning and on-site year's many this we across continue pressures practices. of hanging reconciliation through challenging Merger-related legacy and the we some as activities supply despite reconcile operating with are have more very legacy positive the there the leasing are is new locations, management through takes currently they're down. us place I at

excited a the We're system. one wrapped operating we effort and July, During reporting operations be company. further platform. now significant meant to to has management position our behind the completed and successfully of part in one reporting have associated This MAA and Post systems legacy conversion of and consolidation the work onto a final legacy up every opportunities by effort on being harvest this with to us,

on As projects new aggressive the as activity expansions which the the season progress communities in I'm adjacent months two that parcels second Each performance owned. existing encouraged us, of keeps ahead both a year-to-date. to of summary, and development we existing We located on for acquisition we pricing outlined land while earnings with In of already few leasing still have is us initiate our are quiet project properties. fairly during did remains a release, busy of quarter, sidelines. largely us

back the of that with half play our We year continue in will the expectations. believe line out to

from G&A improving We of early merger Post in continue clearly the expenses operating evident. with and area benefits pricing synergy, our trends capture to and great are now

While management and operation in Merger Post an consolidated made are improvements are and essentially revenue executing headwind, to complete, to now impact. beginning look practices platform. supply a creating we activities legacy the our some the pressures new make now portfolio currently are forward fully integration on

that will based seeing positive starts leasing now moderation footprint hard new thank and We to focus what work conversion on continue our extra their and basis, are our With the serving up this the effort in turn supply in strong MAA Tom. various through number our over completing a call across their comments, on projected and to also see we're consolidation on to our believe pressure ground new some XXXX. we my That concludes our with a want conditions season that work summer well as see and I'll submarkets with all not momentum. wrapping daily that our data associated the we and as for in will associated in residents to of markets merger. in expectations, optimistic associates continue our continued employment but only busy I activities permitting

Thomas Grimes

Thanks, everyone. good morning, Eric, and

the seen performance year. a strong blended higher Post during that in in is trends and QX. saw quarter, the down the This quarter, work lease the portfolios. is quarter was which sequential time performance drove - points XX the QX year. Despite Encouragingly, the year. the is the lease-over-lease Our highest operating performance performance our improving as drove our rent in this first we quarter This average new up second XXX is price the result the year. Post last than platform pricing of quarter lease-over-lease This fact in combined overall trend in have basis on X.X% time the primarily pricing blended the grow positive on which XXX basis saw a rent Post new of blended X.X% from than for merger. time points lease-over-lease up growth, effective quarter. We higher continues our better improve evident expected last for occupancy X% with sequential XXX increase steady supply, came basis our points from during to second same pricing second by Expense bright continued support are a and a points spot momentum for new rates than operating to Post the integration was outlook the second The both portfolio leasing same building the submarkets basis performance we experiencing strong the portfolio. in that be significant since heavy last

quarter. are now showing in X.X% expenses operating Overall, within pricing, management shown results. and practices as and were While expenses to more just our costs, up Post well Total for expenses X.X%. have property programs maintenance portfolio on the by were during as down same-store repair revenue up quarter That just was expenses the improvement casualty the portfolio in immediate in personnel reductions aggressively driven more insurance. the

Average of margin to growth for result, XX points. As improvement, quarter momentum. We're and we Post which further our within of the a margin drive and expansion second This blended was start were continued XX.X% daily of improvement for see benefit in another we rates at improved XX.X%. quarter and ended is Post second platform show XX.X%, at strong month basis portfolio the made portfolio. the same-store the occupancy consolidated up lease-over-lease year. the month Overall operating the rent top July pleased last results X.X%. the the the should we'll July a on XXX-basis-point August

leasing for was XX,XXX we growth We're has XX-day X,XXX and which X.X%. trends These notices X.X% job are nationwide and exposure, in units the job growth last well Dallas. encouraged strong trends. all for pressure. of The season. up And documented. well both expect us Austin sets period XX markets. Austin, deliveries. expect slower [indiscernible] most and Austin vacant in job winter in represents Currently, and ahead growth the facing XX-day growth the the remained deliveries we was are strong supply XXXX, Our Dallas by which [indiscernible] is that In Dallas for months

next are to with XX% expected market XXXX, the demand, and our improve drop strong we in deliveries to in year. forward, expect leasing environment Looking continued

and our our Dallas Phoenix, good rent Jacksonville a of markets. really supply several in While elevated seeing number particularly revenue stood levels and growth in Orlando of growth have Richmond, pressured we're Austin, group. out markets, the from

coupled to buying for XX-month same-store a renter down were continue Our the completed is strong turnover. second our focus demand we've Post home move-outs X,XXX a year. cause in units basis, And insignificant a and more decrease steady by The renting spending X% residents non-redeveloped XX.X%. retention the comparable X%. by program and redevelopment unit. current down complete - rent $X,XXX is of and renewal with to Move-outs for accounts for legacy remain across rolling getting to the drive On down Momentum quarter, move-outs. the was X.X% turnover increase resident compatible low historic on of rents the X,XXX service we're Move-outs On an average, that home for remain low. dropped Through continue X.X%. than customer increasing we're a and only turnover quarter. portfolio - spending were expect on to this to turnover by our achieved Move-outs overall XX% building portfolio. to about

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

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

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

and in communities Our are with performing active our expectations. lease-up well line

are End, track Midtown, We're the revenue expected. South was originally The it The merger River our for down. both expense to move We're the lease-up sides looking third I'm date properties, the of months. the - quarter remaining Al? stabilize winding SyncXX integration capture last Our up of and stabilization on as the schedule. Acklen proud XXXX North and work opportunities The - we of leased team on faster forward West hard planned. than on Post all the are of put of progressing II up XX leasing Lamar Denton effort we and to moved pipeline value-creation as forward. to team as over pleased Post II, equation we quarter in results to has our continuing to have a Post

Albert Campbell

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

primarily points was same-store with Same-store quarter quarter. was growth in results XX growth XX%, or basis which our based year, core revenue effective the strong first for the earnings slightly the rent were on but growth the also above X.X%, reported points basis XX rent in at was for offsetting line encouragingly Our growth. the for Average prior second of quarter below expectations remained occupancy our second quarter.

share back revenue a growth before, increase our All lease-over-lease a was X.X%, over to Tom this is momentum is life Favorable timing FFO performance second year. share support settlement mentioned, X.X% favorable enhanced an during strong acquired and was with $X.XX the the mentioned with primarily renewal with quarter And occupancy, per which may the most merger, of You combined expenses a for same-store first busiest by built $X.XX this forecast season. continued leases half points finally, primarily support for insurance pricing another policy provides of to quarter which the as new per per second some expectation. integration our interest the performance, and in were combined, unexpected for leasing basis quarter, as year-over-year of NOI expenses, expense our projected our by line blended the of and share. recall XX perhaps $X.XX favorable importantly, pricing favorability; results which produce X.X%, in produced remaining growth G&A quarter, Post producing another combined;

remains costs fourth and year expectation quarters. are for the total third certain now for integration full being in expenses but unchanged, incurred lease the Our

the We insignificant, year of also offset income making during essentially impact to which the million do expense million related impact the due with noncash guidance. $X.X had during shares, in this of the to valuation adjustments as include recorded the $X.X in first noncash of quarter, our item, guidance uncertainty quarter the full this preferred the any is year full our forecasting line noncash for reminder, in previous projections a valuation And item. not which from our

located SyncXX acquisition on of quarter, the Denver, land in parcel additional community, closed XX high-end develop During one units. we the new to which second XXX-unit the included an

and which to $XXX to will million. investment during on the the units total final this we community completed Once quarter, phase begin expect third in the bring the We yield total NOI X.X% project. is leased, additional projected expect about fully a

gain continued also parcels for of disposition during $X.X to million quarter. in the and of for We the of three on the XX total MAA gains a million producing proceeds sales the of non-core million recorded the brings parcel recorded land proceeds the the with parcels Colonial acquired located closed total Las Vegas net million year. monetize non-core Colonial acres sale, all from during $XX.X This for from year $X.X XX-acre We for acquired land total containing merger. quarter. of land received $X.X

under million yield of of funded. fully competed to Post Wade expansion located with and X.X% total We be at Frisco for construction leased, located of of Phase at two portfolio. a $XXX.X of construction $XX Bridges communities, communities the and Parkside the expect Once which Phase four in began Dallas. we cost quarter, projected have second now a Post Raleigh s stabilize III existing Sierra in the we NOI remains II do During million,

mentioned, occupancy expect quarter-end, during the for lease-up SyncXX, XX achieve including Average remaining is the was occupancy to over group other and the As third At communities days. stabilization XX% continues communities quarter, just our which at lease-up, was XX% we in the well. full during lease-up we two acquired six for of portfolio had end to perform Tom the quarter. in which quarter,

remaining to earnings next stream. We during contribution first the more to half the stabilize two of expect in our all to stabilize quarter and which will fourth year, the a two of XXXX growing provide

remains Our sheet in balance great shape.

coupon quarter, pay - under the combined at at this to XX-year in our capacity senior During from proceeds issuance cash second credit available and used rate. excuse issued down million me, X.X% to $XXX The we $XXX unsecured bringing our secured unsecured were notes borrowing facility, borrowings quarter-end. million

while Our was was quarter-end, our net bond covenants leverage by defined our at XX.X% debt-to-recurring-EBITDA over Xx. only just

the converting expense our strong revenue as and year with to the year we performance, quarter the our in for continue guidance given Finally, for projections. both previous remainder maintaining trends full second and same-store be of of are the Expectations which for pricing, leases averaging compares are recent is the built continued and on blended the year, and lease the strong combined year; for occupancy, well of new average remainder line remainder renewal trends. which to X.X% the XX% about

to integration guidance the diluted year. We're We are reflect increasing for our common the and now $X.XX net Post income to at ranges merger. be $X.XX per and merger uncertainty AFFO FFO for projected quarters year our to and the to is net projected to share is final mentioned per earlier. projected related costs of $X.XX year reduced share income for reflect the full FFO of per In two also now narrowing $X.XX the following per ranges guidance to performance at which be to midpoint. $X.XX $X.XX share the share XXXX. share $X.XX to items the share slightly $X.XX includes $X.XX is or midpoint, be full projected earnings summary, per to

The at FFO projected the is to be midpoint. share third per quarter to $X.XX or $X.XX $X.XX

outlined as full synergies guidance. NOI on overhead the are capture reflected We well with earnings our related to the the and merger which remain continue track to $XX other the Post in million of to merger, as current opportunities

back for turn we the over So the questions. to of comments, now Priscilla, prepared all in way we'll you that's have call

Operator

with question And Nick Instructions]. [Operator our first we'll from Citi. today Joseph take

Nicholas Joseph

you The you gave. and just a components the quarterly or trend and towards thank XQ? the XH to in you midpoint trended perspective, XQ maintained a versus you guidance. revenue from meaningful that results, ramp same-store do range for it year-to-date the on then above below? But implies Just in And expect how

Albert Campbell

guidance around typically occupancy out to I expected talked think midpoint. the our for Nick, is lay about, be we stable - the we lay as that of XX% our performance typically, sorry, is we I'm year, Al, pricing on out performance based guidance average. trending And going towards this

so new blended guidance And combined for achieved to we X.X%. our talked renewals we leasing. and about, is year, of actually is which X.XX% as I think through X.XX% full the And July, pricing

average the leaves And achievable. about about of and it's so year, think that I X.X% for remainder on the

Nicholas Joseph

And from to a XQ expect quarterly perspective, it would XQ and you XQ? accelerate then to into from

Albert Campbell

I think we would expect there. - two things

quarter, rent which which to be into our in strength in fourth of think strong the softening unit, would I the portfolio per third pricing seasonally expect effective we average trends, that leases, your seasonal time, compounding grow. quarter. is at will all of the one to continued pricing will But performance drive follow continued would of the strong continue

to revenue quarter rent growing that in third the excuse expect performance in be the performance more fourth midpoint. the to quarter so to and drive - even that We the me, close

Nicholas Joseph

delivery And continue then largest drop then pressure? XX% next are the decrease? expected see have you Which year. to will had to projected markets which some And is in

Thomas Grimes

across-the-board is widespread, Nick, it's The any Atlanta it's and it's really Tom. really seeing trade-off But increases. market. not being one only slight driven DC pretty with and by

Operator

Wurschmidt Capital. from We'll next question our KeyBanc take Austin with

Austin Wurschmidt

thought Just said in blended you a was start for lease which wanted July. achieved clarify I rates X.X%. thought those Can two with you the just think just mentioned it off Al, clarification. you I said the to X.X%, release, numbers? you I But

Albert Campbell

great that's Yes, Austin, question. a

full was seven Let I the referring year, months that. me X.X% the clarify to together. average was I for -

which of that for trend growing. achieved did the we so is And July of shows month X.X%,

Eric Bolton

year-to-date. X.X%,

Albert Campbell

year-to-date. July sorry. was month of X.X% Yes, X.X%. But I'm

Eric Bolton

minimum the building. is So

Austin Wurschmidt

the half that the first achieve midpoint guess, it. largely X.X% X.X% that just compare you that the last I you or X.X% you sort compare, does second a answered question year that. How stable guidance can does little in and of And below of occupancy. But XXXX? how compare? half, to versus also Got of kind with mentioned needed of the

Eric Bolton

XXXX blended assuming And rent that which was the Nick, year. last X.X%, a that's going in feel bit the back drive talking fall I about was compounding half pretty off and forward the year. of Al growth what for that. mean, X.X% We're is for that effective us about a last good helps of

Albert Campbell

expect expect, moderate do point, we to fourth your We seasonally. to do quarter Austin, and the

the in so flat pricing blended. our And blended last was year, portfolio

we July project exceed performance. third year based And - [indiscernible] a continue August and so we on this that believe we'll to exceed and quarter strong that have

For quarter, to moderate be about it so. with XX project fourth last year we some or but seasonality, basis above points

Austin Wurschmidt

That's then of give can a of half And in half portfolio-wide of helpful. the seeing us of or ramp-up in just ratchet supply you expect year the kind back you back the the year? year-over-year Do sense of this a before down to in in it 'XX? backdrop terms decrease

Thomas Grimes

in it's occurred. volume again, the expect to saw No, year, This consistent. rest the the a supply Last awfully has consistent the year change been of relatively year. consistent it pretty of real that we throughout and that be quarters

Eric Bolton

big uptown. Dallas, the in Last year particularly months, the in a several in particularly really saw ramp-up last

Thomas Grimes

yes. we don't And this Correct, expect that no. occur year, to

Austin Wurschmidt

Great. more side. investment just And one sort me the on then of for

a talked reinvest to You you you discussed program as But to and a what look to opportunities flow? due kind the challenges the market development competitiveness. pipeline we the and in or even development your bigger see available of the acquisition cash repeatedly have I ramp in guess, have ramp, could

Eric Bolton

existing of looking a another couple on looking sites We're other at this opportunities, Raleigh frankly, pull be another contract, in that a that. own Denver, site we're year, these, other contract. own These site and under Austin, adjacent do that trigger We've development we got parcel under we of Eric. in that another under an at. we would next of site things land couple all Orlando another some side would the before it are in if do the is contract,

So us significant pipeline. a create you're see not going development really to

volume do than to our in out be going X% or that, be of I to I'm us. external Year-to-date, given to we've What a higher our of in we it's on frustrating encouraged X% flow, we've part feel $XXX deal by, for is, I more acquisition front to growth five $XXX will been some much years. pricing think million parameter which QX. haven't But to at frankly, where is is million enterprise the of laid we level in continue work. no higher money seen and value, put forward. that range ought story of going able it's that been our to QX that say just than sort the is though while last deal

So we of opportunities at of have a developers right we nature. and number as looking funding and are things lot things prepurchase now mean, development of conversations a continue with sort the to I about of that go

later So going I in encouraged cycle more continue the that to to opportunities be Difficulty] are emerge. [Technical

facilitate going the a balance got continue that a believe to pick We're pace patient. But the the disciplined. of We've in which As emerge, going our of I I opportunities - is stay bit. to shape. lot great mentioned, got growth to We're to is stay are little up sheet's ability going capacity. to to going

Operator

with We'll to Rich next Mizuho Securities. go Anderson

Richard Anderson

community? a and curious, and within the that's some units where a redevelopment So in pretty something to number XX,XXX substantial question of with buildings are opportunity? they identify of that there same building about In obviously. some the there do I'm other kind community are is others of X are not XX,XXX units not? words, and Or in that a redevelopable that first are you - But some are pipeline are is, units, redevelopment

Thomas Grimes

and forward the We plan-type out. and on property. maybe particularly pick Every studio generally, But general, assessment. whether property. that process does test might works renovate we it than is the rigorous property the then more it a work to a units, in a the accept others that And out leave will figure do. market the now or sensitive the and then, that through on that roll floor is a way that, testing it not is rarity. on a property-by-property we units the pretty we Rich, But there's honestly, that

Eric Bolton

on The we ever only don't force it we hesitation turnover, we have, do turns. so

we vacancy I affects impacting more and we we turnover, systematic community the it as Tom But start most our start on loss forcing think start it's for the really the negatively part. economics approach, renovate given program. units and at if mentioned, driving up really a a

Thomas Grimes

correct. That's

Richard Anderson

question, someone's lease leads could expires you they but to but going my raise if that next the Is if mean, rent you and potential you in right rent force that you've And an rate. of take great I'm great. I force think opportunity said, got not? you you, you say, So something your front about? don't that you above-market anything, redevelopment process, they "Well, why it, of don't, have this if to there. kind that not I growth guess, you by - If a

Thomas Grimes

Yes, is that downtime average I But investment, now, mentioned no it's strong are considered mean, and - thought [Technical that. no what have additional costs. we the and reprice, about you turn day those and vacant X% is Difficulty] to no pros

our that's like approach little feel is we a So - more stable.

Richard Anderson

you. is enough. in been question this Got theme the has low turnover. quarter for anyone the Last room, Fair

mentioned everybody it, guys mentioning much pretty You it. is

pretty a economy. have We good

it some Is market family just think would I'm residence that's Or inclined something it look improve You your to it of thoughts be as so driving down? housing are simply is why degree. their low? else market? would what single people and questionable, is around sort more curious to turnover is

Eric Bolton

Eric. this is Rich,

at to. couple referred think you things I is what play One of here. a

challenged by general the housing. the lack of I is increasingly in market affordable housing think single-family

the is to of But changes. becoming enough supply growth. little expensive. business the and see think I to thing There's think And pretty We just as with there. at of ratchet just starter out really function demographic that rental move think I more more a up. here not is just that play we a is continue for other rent see high society homes side pricing I it consequence, continuing increasingly bit a up

not It's this If XX% rental our female. or that And single, are in and XX% profile, is not just portfolio rent a - to believe so our home, single-family our profile continue more today, you ever out is look for for that I XX%, whether than XX%, move I of resident to married; motivated purchase. past. go demographic a today into the be really at

I factors think the it's those capture right helping some good that sort whole of retention. And now as industry combination pretty of so a a to are

Richard Anderson

get I you so. divorced guess, if can't you're single

Eric Bolton

That's right.

Operator

BMO take from Kim our with next Markets. We'll Capital John question

John Kim

guess, your costs one same-store of cost of to year you and future levers redevelopment? of And for I maintenance wondering growth is or these in maintain periods these deferring at is building you're have some X.X% capitalizing the expense to I'm costs decline basically if the X%. to Or that...

Thomas Grimes

end in paints and have And costs. carpets that do is those and number we what or a drastically this. the Yes, our contracting heavily to in-house in-house, they doing the number of on that cleans driving driving and and really At of the we increasing neither do did repair capitalizing mean, in-house, portfolio that of is - we of that those, is maintenance day, John. what XXX% was putting the maintenance I we're the number at is deferred approach more nothing weighted the of to out labor. that certainly,

Eric Bolton

products equation you the renegotiated every contract And in of the we have part that's I'll and been for the as that virtually tell is services the well scale. other benefits use of economy procuring single we I thing we just of mean, that. on, that the really as down deferral the you going all there's assure point can operation too, It's prices those we got scale of mentioned the on-site a consequence of advantage. no activities, and the scale Tom so I went and

John Kim

this integration? Post is attributable to So mostly

Thomas Grimes

right, is yes. Right. Yes. That

Albert Campbell

to really had that last actually thing, it first was think I faster talking quarters, been little John, was We've a several about expected. better with the on we Yes. jump for than begin and that easiest us

bit, we the a into I and will would XXXX. but revenue as we growing be move normalize that contributing in to opportunities are think 'XX, expect

So how we that's of it. kind think about

John Kim

how Okay. lease half the kind then year, of bit in and And much down visibility on forecast I you the X.X% but a as growth significant rates know you new got August rate of renewal as second little a growth? in far have do July, blended you the

Thomas Grimes

because renewals, mean, in as range, continuing on back far limited like as I getting X% and Sure. lease, high they're all that. haven't to out executed new the our went to October we enough none obviously August, do that X% and we're range. September in out. as But go

good feel of that we part the equation. about So

John Kim

lower that's you quarter. second So than in the that got correct? Is basis points about XX what

Thomas Grimes

X.X% Yes. forward. for and But X.X%, mentioned plan with. we I that. think pleased mean, really at didn't NAREIT, we going plan And shouldn't on I we're one

Operator

question Jefferies. our take Tayo Okusanya we'll next from And with

Omotayo Okusanya

you these little of you increased about lot is seeing to kind to supply bit drive And they competing? kind do impacting assets? seeing developers talk you Are a still trying in portfolio? a that are your lease-up their markets What where Could are the How how pressures? concessions? of of are

Thomas Grimes

it you're Dallas. better will and Q&A, I would kind as in Tayo, new we what as at places, hit is in hitting concessions are it pockets as of places far it concessions. that we in on mentioned earlier time. of saw generally And heavy I Austin marketplace, now tell you, than Atlanta, tell late competing last with of ramped Atlanta, And up. development those year, was a just that an on really, in they're like we you seeing the

really of and concessions. upfront they're just market that doing that's they're with It month, there. how submarket a competing, you're seeing still So free. But discounts there months the two it's on depends

Omotayo Okusanya

Got you.

headwinds And then growth. guys amazing of we of back the job seems that, could of that's continue the imply about have of potential in And think for there go half been you to are that guidance an there back second But that the I any of of number year? year, the done managing make the going kind up year. OpEx half just rest with when your Okay. the kind think to all,

Albert Campbell

Tayo, this on feel Al. on half back of confident don't pretty headwinds, significant is see current and We any expenses year. the the in our for guidance we

talked that's from lot would Post of As expect scale opportunities, processes the mentioned, performance we to those attributable or we achieving a and synergies about. favorable the

more a may part to of some lines as I up normal the XXXX, think as move repair to pick expect point the stronger I So well. we we as And synergies we of that level. mentioned, think maintenance into revenue and the those at and moderate

Omotayo Okusanya

with about for you're just Okay. one And for quarter? DC of an last to exposure? your relative since the that typical of the are latest me, portfolio it's then kind the kind portfolio? just outlier How feeling trends How what's regional the

Thomas Grimes

mean, I been for No, DC has us. steady

were Our X. group blended rate that X lease-over-lease for rents

to be there it it DC And in continue opportunity. as goes We redevelopment the is for steady the with and us. pleased teams

Operator

Green move John Pawlowski with Street. We'll to now

John Pawlowski

risk? of units On are those this costs the there construction is incremental any year, or done to revamped rest out portfolio, the the bought be cost X,XXX

Thomas Grimes

we think that there experienced a upgrades that not or the our have It's renovate a been with dealing I Those costs. It out, out, we in volatility costs working not bought we're fairly are bought John. And but factor has tagged - fixed on I the seen won't construction call, mean, but not pricing. have with - risk just industry we return. I has them, - of have

John Pawlowski

new? guess, On the completely how said so XX,XXX broader growth. XX,XXX, pipeline, I rent the inflation is material shortages, labor it outpacing You to

the trend in construction So outpacing by pipeline a how broader of the do cost if margin? environment if persists, on years economics wide inflation the next are broadly the current couple

Thomas Grimes

don't it's sort well of those would just I and I history that and don't line It's I in have different. [Technical countertop. mean, costs. don't in that We number. concrete costs construction don't probably you steel have that we reskinning in some in of with have appliances; in Yes. number, your it tell It's trending think point. cases, understand really I Difficulty] lumber we we And a that's number in a why have made.

John Pawlowski

competitive nearly Okay. one could in us the directional 'XX. down you XXXX not how give of the it And minute next drop I supply And candidly, permitting, for it Because roll supply know XX% does proxy provide supply growth, year, near identify paint you what's being the level looks a on painful in comments overview well. pretty not XX% Makes for it's up but great, supply sense. what's new you which as the competitive? picture a when the market doesn't anything and

Thomas Grimes

doing broad then up comparing Yes. markets at all mean, our them. and adding data I of what is markets, AXIO looking there those the over and we're

an but asset-by-asset buildup, is using data. this So it is that buildup a not market

Eric Bolton

by what's and construction. what's - reasonableness in know our for our it check know I properties under we we mean, I submarkets mean, happening obviously

think not to I if that. XX or happen share that going not good year. it's not suggest we pretty opinion I it's deliveries. of easy construction so, look at pretty your to next with when see start to a not just it's do out going deliver going you that it's permitting, might now, to and at year it's sense get maybe because it what's we under a what's months under But construction deliver starts to know look now, to next XXXX, - of you reacceleration if XXXX, happening as

think I do questionable. to I bit terms that a up be think 'XX we supply a it is little of starts think next better get pressure. shaping year, year to in But more So beyond

Operator

[Operator Capital from question RBC Instructions]. Markets. Golladay next our We'll take Wes with

Wesley Golladay

back rent the go looking at change. Just want the to blended the to for revenue year, guidance

bit a to you in Assuming teens last high above XQ. you're little year, tracking get the

do You'll for a about correct, disruptive bit get leasing; the driven year rent blend, sounds you year, some in you this the XQ? sounds growth supply little as And select X.X% it and lot degree in in a that is highlighted the can there's be if not growth, probably a my were that math market, all blended to it will XQ new better be like lease you of but last flat need better will you new think disruptive like in materially supply XQ.

Albert Campbell

that was your keep the were math and though you that leases mind as mention second in in of quarter. is a signed second I'll quarter, doing about thing One that there lot the talk Yes.

simple quite you there. So won't average get

lower a But there because a I leases it you picture a general, the of picture a like think bit in better average outlined the it's were or quarter third in think little number for correctly. you quarter. consider I if fourth weighted the

Wesley Golladay

that you just you. percent overall year, I hit the in uptown, it the portfolio how does markets a new of alone few I lease guess, last have How impact? that, markets those do sense And maybe Okay. much much overall as down? few the the bring for a other Was think such market

Thomas Grimes

hit it's markets, I - down last don't breakdown. the particularly, have But the year Those exact the Dallas was supply impactful. way

Operator

at no this further call for time. closing have today questions any I'll the We back turn or additional remarks.

Eric Bolton

the with morning. Well, later. questions, Thank to us. talk free We this and reach appreciate Thanks thanks, everyone. Any joining we'll call you. feel everyone please out follow-up to you

Operator

you today's Thank participation. program. your for conclude does This

time. disconnect may any You at

Mid-America Apartment Communities (MAA) 5 Aug 182018 Q2 Earnings call transcript