Mid-America Apartment Communities (MAA) 28 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Eric Bolton	Chairman and CEO
Al Campbell	Executive VP, CFO
Rob DelPriore	Executive VP, CAO and General Counsel
Tom Grimes	Executive VP, COO
Brad Hill	Executive VP, Chief Investment Officer
Tim Argo	Executive VP, Chief Strategy and Analysis Officer
Joe Fracchia	Executive VP, Chief Technology and Innovation Officer
Andrew Schaeffer	Senior VP, Treasurer and Director of Capital Markets
Nicholas Joseph	Citi
John Kim	BMO Capital Markets
Brad Heffern	RBC Capital Markets
Austin Wurschmidt	KeyBanc Capital
Rich Anderson	SMBC
Rob Stevenson	Janney
Anthony Powell	Barclays
Alexander Goldfarb	Piper Sandler
Chandni Luthra	Goldman Sachs
Tayo Okusanya	Credit Suisse

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the MAA Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, July 28, 2022. I will now turn the call over to Andrew Schaeffer, Senior Vice President, Treasurer and Director of Capital Markets of MAA for opening comments.

Andrew Schaeffer

Thank you, Gretchen, and good morning, everyone. This is Andrew Schaeffer, Treasurer and Director of Capital Markets for MAA. Grimes team are on Al Eric DelPriore, Fracchia, management me call Campbell, the Joe morning Hill. this Bolton, Tom of also the participating with Rob Members Brad and Tim Argo,

we may point that management differ to will materially with I discussion, forward-looking making of out prepared filings this from as comments Before release with morning, begin statements. future want be the this part company We SEC, our forward-looking refer Actual statements and encourage our yesterday's in results. projections. risk XXx our describe to earnings the impact which factors you section may results to that

this During and the supplemental non-GAAP in and directly will most comparable release non-GAAP certain GAAP can our comparable financial earnings GAAP differences financial between measures well discuss be of measures. call, measures found financial presentation reconciliations the we A of as data. also as

Our copy later and management questions. earnings now page will be are some website turn Eric. Investors will supplement this website of available our at also prepared the comments, available brief over answer call our to After team -- available the call be of I on currently on release to audio recording and our www.maac.com. today. will prepared A of the an comments

Eric Bolton

year of new from roughly season, increased rent Leasing Thanks, the hold new the to X% home into back become single-family applications, fueling prior through of Leasing revenue next calendar leasing real also year-over-year our the remained near-term during of our growth the Sunbelt up current of from quarter we comparisons to occupancy fuel conditions the XX% Sunbelt poised XX% and in move-ins. second year last more the expenses leasing strong households lease trends this footprint generating on start no busy not Andrew, migrating performance up But see continued for is ownership in migration and strong any halfway second Pressure supporting Further strength remained momentum the quarter year up the labor to traffic drove move-ins and prior are slowing. jump growth rent the the second rent on in taxes from that quarter. XX.X% over quarter and collected, touch compared while for very continue in Collections indications we morning. the and the the do were change do that first of will the estate is XX.X% with in slightly strong a difficult. from solid remains cost our well year build leases quarter. second to actually demand as continue, leasing market, we levels was supply and as expect see leads quarter collected the that year. it's higher moderation competitive of preceding the slightly inflationary and half indication Al a continued portfolio, strong worth and rent in trends we the see operating of or some anticipate are we'll XX%, demand ratio affordable increasingly good rent which continue pressures the new chain in that the executed the across and conditions job rent-to-income in and it growth, growth, prospects range. market to the noting positive

margin some for the growth as NOI in our persist balance, relief the year We in we, expansion new over year. the our in XXXX harvest expand. increasing beginning once with operating On from expect we again, pressures as our of earnings release, to our these and top line continues balance for increased income begin And strong will benefits to likely performance, initiatives. the expectations given margin same-store noted net tech

very is Tampa an of and existing are adjacent the market return. transaction located with opportunity pleased to very new within on-site our attractive acquisition to actually property providing opportunity property our seeing directly this investment to properties acquisition increasing operations X drive We are consolidate month. completed This a earlier

our to Our well drive of we new and development attractive pipeline value continues capital. continue expand to yields find as opportunities to cost above overall

encouraged growing projects existing of conditions the current leasing our on XXXX's outperforming concerns facing lease-up initial ourselves in We believe concerns projects performance. remain calendar backdrop pipeline will Our potential pro variables key are environment. recession. we and or course, XXXX, later momentum and that MAA for in remains year early economic and Should There of well very very broader surrounding year surrounding budget, formas. an a by such weaker our that define find a positioned is construction the economy the are, we this

economic enable than an First, coverage weather we as portfolio other more will our strong point any MAA's sheet believe to balance that at to nature better the diversified markets our and to of very are better regions. and history. continue well in affordable compared slowdown Sunbelt ratios our and company's

that has well changes we and responding We current over find I operating will had higher of all way our resilience, and call practices and and new Meanwhile, more such in have over in are the cycles, drive turn introduce that to to should I'll strong. ourselves conditions a record environment. next of I'm demonstrate to established leasing continue will That's margins couple prepared comments, an that positive, the again Brad. down remains of very our now outlook years. we and the efficiency performance to technology confident MAA

Brad Hill

in in with as and activity contract the increase first with of saw investment Unlike the the of meaningfully of morning, shorter second year everyone. the to a higher properties coupled economic degree Buyers quarter. fall quarters, using Ascend previous you, as second horizons from time sidelines. well Transaction combined leverage of quarter the have as buyers Eric, out we number uncertainty interest the higher quarter in rates Thank good slowed a

For than in traded the cap closed that basis the close, generally, did first that they quarter. institutional deals rates points XX quality where with were investors stronger properties at higher

the uncertainty ability increase all team. significant our As and cash inbound move a our to the has market close calls quickly transaction has in led to risen, to in

that acquired fully operational years. constructed harvest to we mentioned, As the XXX-unit MAA property will July, Eric over margin our property adjacent into a Tampa efficiencies existing the in expansion successfully is be next an newly in property, fully MSA. existing and This will property and few opportunities we creating integrated

Our under lease-up million. remains $XXX at construction and in pipeline

in construction on we X,XXX on pushed approximately to our and start start development subsequent in appropriate We a and Denver previously a project progressing no building end, to start work we XXX-unit Orlando. second These the land year. to the construction XXXX a Denver MSA had land our also purchased and to Raleigh, bring Raleigh of expect XXX-unit we start acceptable in this a did expect of quarter we development we development Denver Tampa construction projects for permits, for site Also, entitlements year, Predevelopment in but XXXX. our quarter, units. costs these sites parcel expected to projects on we've sites purchase on and start owned sites for our the receiving starts subject construction still purchases While are construction planned land that with X this the in to XXXX. Tampa to

time, we prepurchase start in-house as of on this and the Atlanta, Salt with pipeline starts $XXX approximately in We in expect change of and that to between construction and of to construction we at expect can this year, months. pipeline we the construction approval projects several the continue under Denver, million construction on additional Lake bidding timing predevelopment and projects located year the both million next X,XXX million. Orlando $XXX work $XXX lease-up local units and planned work and XX developments construction but processes and to start City Charlotte, hope we over over end The under a through

we today, has working push causing in the Denver. increase to a traffic our overall a back tremendous Novel labor and did process construction and building earlier materials quarter leasing our management X the escalation moved Due past. performance performance by shortages in In to in dates material To forma our the we our expectations cost. we continues is our making at prevalent continues to all property X cost biggest meaningful initial of our ahead at surrounding supplemental, the leading and to our in our had MAA team to at delays, Westland, Val permits the strengthen, and leads of much Park lease-up delivery to material remain and to Central securing the all third expected with actively market Our done remain their in communities pro team job stabilization our well we've to expected from lease-up elevated, contractors costs avoid purchase projects delivery 'XX. by quarter pressures achieved strong are inflationary Vista date on to keep that than job Operating in Nevertheless, manage so commitments rents our up by communities. Phoenix quarter, of challenges.

the million. we As market properties for disposition Fort mentioned sold release, Worth our our in $XXX in X successfully

way all we in and market. have the X comments. is the We of this one properties planned hope in year. disposition close is to That's market that Maryland, in more in prepared have Suburban late One the Austin I

to Tom. over with I'll So turn that, it

Tom Grimes

Brad, the performance blended well. season you, quarter going second everyone. was portfolio was our morning, achieved again quarter is once quarter saw summer and up the strong Same-store across We during the good XX.X%. and for Thank the during performance pricing busy lease-over-lease robust, pricing

revenue in-place XX.X% As all year-over-year rent driver growth primary on a prior we and expect to it our increased from basis is quarter. rent and blended effective continue momentum, pricing effective result, Average with X% the a by rents current strengthen. to growth the or

unit technology In mobile smart our environment a new security This includes our well the XX.X. daily as interior create upgrade for package for includes and well as strong that detection. strong The leak quarter of product control to installation initiatives. our was redevelopment as opportunities continues program home lights, of as addition, average occupancy demand thermostat

XX,XXX. home of During approach interior expect of over installed and completed to X,XXX the home to XX,XXX year, end number complete the the X,XXX we smart X,XXX packages. units unit upgrades smart we By packages. unit total XXXX, plan quarter, and smart our upgrades In approximately interior we

repricing our final of have are we're and repositioning stages results now first program the program, properties in X our at the exceeded in expectations. the For that complete, leases the

this occupancy We pricing physical of another in as XX.X. as a July the underway result, in Renewal just are is Strong a July prior the of approximately with lease-over-lease as XX, up pricing July lease. on units lease portfolio blended rent prior notices XX.X% move-ins vacant projects of X XX X.X%. lease lease Both pricing for thus the XX.X% leasing have was and ahead running of activity of continues all that the expectations. Same-store year. Same-store is is new numbers plus is is in for which our are far period, XX.X% Exposure, through line XX-day July. July.

have performed and now serving turn the seasons. to positioned all for fall Our our season our during call the and grateful time the summer well over portfolio I'm teams to I'll commitment well winter have busy and for their Al. slower stakeholders.

Al Campbell

the quarter in XX.X% the blended expect through do prior to Thank comps year as produced good $X.XX grow quarter. projected came year the share from pricing of morning, more inflationary lease expenses property virtually impact more for even of quarter. than rental for stronger in bit and the pricing tax was outperformance for we midpoint just more as FFO above moment. as trends We expectations saw year as of everyone. challenging half during of the in the discuss Reported [indiscernible] quarter, expenses increase and in late a as continued for return real which Tom, a came which through to continue you, all per began growing quarter. more prior than the our and quarter move as back fourth pressures were The a a valuation the strong slightly seasonal revenues $X.XX guidance information higher from repair comparisons we normal guidance core well revised the a the the projected Same-store quarter, operating pattern as during as estate we'll costs well some for maintenance a

more Our revised are the these by revenues pressures, guidance. year reflected offset than revised by growing for as these guidance reflects our but expense NOI

stronger credit is than by the sheet rating A- reflected upgrade Our Fitch balance ever an by the during as quarter. to

ratings discussions strength be our continue confident other with We to agencies the and have other are will in well. as reflected eventually the

completed a of primary we short-term and end funding liquidity development, the of which Just for maturities of needs. debt renewal facility, our our after is the short-term quarter, operating and unsecured credit tool

debt range full the We and for core of guidance the growth or our year. At facility we points and essentially $X.XX average prior to mentioned, we debt low $X.XX at the projecting XX.X% increased the at fixed $X of the X% over for result same-store historically in end with a interest basis our per we're XXX rent our to we of year higher maturity are potential an increased in a of had year for through range the borrowings as $X.XX quarter, by share and FFO renewal, increasing X.X increase This at to strong per the $X.XX second effective EBITDA billion the of price part continued quarter, midpoint. leverage $X.XX both billion terms growth revenue X.XXx a under to financing year, pricing full improvements to and with markets. expectation now As despite our XXX% the of intends This the for performance quarter rates our share of increase remainder volatility second of midpoint. we finally, or all the represents core years, credit the rate now the growth, environment. And low size the a the and in outstanding at our FFO expectations year. XX.XX% and the given is midpoint had interest facility, the was a capture from rising providing no growing

the for some growing projection the year and half from continues revenue Our during to seasonal mentioned. normal for pricing the on be we the as occupancy year strong and quarter, comps year impact trends built with stable prior second performance fourth for

high of approximately blended for second in in a be the We top captured pricing of the expect to blended XX% year, on lease last of X% for record is pricing which half the context half back growth year.

for demand our expectation So in reflects this continued I markets. think strong our

points the we but basis for expectations the during increased range, expenses is reflected our a margin same-store by our of year. As rollbacks impact to expectation the operating from now be changes for these points quarter. a basis well year, by these the XXXX the growth in represents prior increased rate end at the also up of from finalized year assessments, increase and year late to for full for XX.X% mentioned, taxes valuation valuations in midpoint first the year, in growth at we expected the year same-store this X.X% XXX to primarily point full the the pressure provided for our reflecting X.X% to quarter, NOI of by and real as XXX And costs midpoint we XX%, of repair maintenance expansion basis offset mainly the as the in for Texas, the estate expect in to partially full net Property taxes. rate overall aggressive received do millage an for the our reflect The XXX increases impact.

in sale of our changes as note proceeds of $XX So we in funding development million other the as remaining reflecting to really a our Maryland reduction finalized X were the revised for Austin. in guidance in a gross well reduction expected timing year, spending properties as of disposition $XX million the

So that's of way all that comments. we have the prepared in

So questions. Gretchen to for the turn call over we'll now you back any

Operator

Instructions] question from from first Our Citi. Joseph comes [Operator Nicholas

Nicholas Joseph

income. you appreciate the change been the But you off commentary seeing move-outs have any moving existing stats portfolio, anything of because the is But requalify helpful. of rent of rents high? obviously, are kind them the in would move-ins. that provided for too of of kind terms for on but portfolio don't existing you new affordability Obviously, other up, Or be affordability

Tom Grimes

improved XX.X, there. Nick, to jump XX.X at in but collections Yes. from encouraging. different I I'll mean a I looking is fronts, think which few

Our efficiency seeing are and and flight performing our efficiencies unit Xs, types, Xs Xs to not we're consistently. a

moved on headcount Our to that. [mid-XXs] has from units heads X.X

steadily. seems to in we're XX%. are those rates, But I it to at a in increase. we mean and do moving we again, pushing back see move-outs really rent moving tick-up be So folks

pretty goes, it's as steady So Nick. it

Nicholas Joseph

helpful. the year-to-date, I That's expectations trends, you as year of terms pricing also earn-in about that back year. the of the What in to guess, think start your in And then half but XXXX? the next does in at look for

Tim Argo

hit I'll Yes, this one. that is Nick, Tim.

about into that, blend of expect that our way So we somewhere full call The XXXX. lease-over-lease half would this around blended think thinking to typically about we for earn-in. year, is it, year the

about think blended X% XX.X% year of expecting there the the year, comes out out that what laid XXXX. the is XX%, that full If somewhere half you blended for we're forecast back about lease-over-lease So we in lease-over-lease to

call earn-in as sit somewhere So here X% it, about we today.

Nicholas Joseph

And kind earnings? of how of does to that compare the history

Tim Argo

we've highest the certainly It's had. ever

I think highest X so, XXXX, going about was last certainly to year, so I think seen. was or X% we've back the it it

Operator

comes question BMO John from next from Markets. Kim Our Capital

John Kim

to the Eric, you give to point. And a you Should on an update more Class more part classic recession? consumer what a B? price for A your Class versus diversified better portfolio able portfolio focus perform what in were we percentage transformed of of

Tom Grimes

look balance the and fragmented. I question John, on B the that? what's think first was And as between you're really A we assets

Tim Argo

we are would so. plus A plus or Between A Yes. about XX-XX. roughly A I call some XX-XX B B, nuances and it's and I mean what and between would there B talk

John Kim

we better into what do recession? And you the part second was perform will head think if

Eric Bolton

Eric. Well, is this John,

see that but portfolio. that and across speaking, I product and pretty consistent see Bs our we we our markets is think the As mean, rent-to-income our I the ratio footprint, for across between is broadly that pretty that

portfolio. the consistent Our collections across performance is still

downturn to a question than So don't think to I do Bs better. you're maybe historically broadly, that better little it slightly region certainly, product markets as bit becomes I a slightly downturn up find just our just a a will employment downturns. sort, a Sunbelt I little ourselves it in. think And about that of think think probably has employment we across affordable will And if that a that it's base, more bit more little whole the that affordable huge downturn we a be holds As a But diversification. the more trying in bit do there's think because markets, I going a product. some honestly, think in prior always in in do better a But difference

John Kim

my question is on And Okay. expenses. second

You've inflationary state [indiscernible] realize real expenses type you pressure some of a of your And seen and some taxes. higher made that in just coastal than technology you But had. is as peers. I similar investment

I'm this going quarter. wondering the if on guidance could you So expense up comment

Tom Grimes

John, were inflation there and really you broken guidance. something expense about

Al Campbell

I in think also -- estate said he taxes real

John Kim

guidance expense [indiscernible] -- increase the on

Al Campbell

a and but [indiscernible] and on a of they're bit. we Texas. the coming couple with They're But jump our And you're put think of guidance which And pretty that then of up particularly on estimates is higher. here. please which from information out obviously for saw it. that. start picture, driver in started a I aggressive particularly, in as almost things year with XX% Tom, that's asking of John, it's come best things, no I big think our that. in valuations were I'll we you X broken primarily, real the up, expenses, And the really, And estate this, taxes, and that, real

large like And and in As litigate progresses. for expect a or formally rate to year our we we of in portfolio. that get picture it we'll certainly to of year, we'll But over come so get rollbacks rollbacks of continue fight mentioned, hard every Texas half late we we the do those millage that. a rate as it's part do

for quarter you say the one taxes. toward but maintenance So to repair guidance both Tom, year, that's of in I on give well tilting really as as the more the a tax might in color out, you little and pressure. would have and any, the back And the want taxes part probably if that's

Operator

Markets. next comes question Brad RBC from Heffern Our Capital from

Brad Heffern

February need if curious I and that could it know like settled sold next about be the an range plan especially year, lower? of really for $XXX the talk forwards target with but was the for I likely to in equity obvious by you last leverage year, were there's moving capital, they seem million below doesn't need the

Al Campbell

think mean don't draw we that's question. right, I hit think I immediate Yes, great you for I to then into I We now are that fund outstanding development plans have and to, that of remaining February but next help we as the this think, year. go a Ford next and to year expectations the that, to on our expectations between year. draw have

our important. it longer of we we our term leverage don't to a that over take need certainly is So the lower, think but funding part is

Brad Heffern

at Okay. up you of Xx ramp maybe or number to development get running that acquisition leverage is to back fuel high comfortable And net into Xs? to are mid- a like some guys' there the that sort leverage desire activity or do

Al Campbell

and Eric I of target little add area. the right strategy, give I'll the of about in working our add a the strength last we the now. every to maybe Brad talk couple for business we're and but talked are on to range other always the mean, quarters, parts will we've below leverage

strong So on very sheet, now. right our we're balance

leverage below. X.XX%. That's historically low Our may is debt touched EBITDA to

say and want wouldn't would I current to think I credit X% in we certainly above -- would get preferred. our probably to you X% Andrew X.X%, ratings. is between X%

be. we opportunity, to protection need believe where We below we're and as that's both opportunities. So

do up and and this come as to move give flexibility that Brad we want them the So to recession we team, for that. into some opportunities

Brad Hill

this Brad, Brad is Hill.

optionality disruptions grow we're to development sheet say side, comments that us and really and keeping do really the has certainly on the with to I area. about out focused eyes balance like to certainly, market, in past the just Al of And region provided to our that that the take is and we're the able on the last in have been there. would what with the our pipeline, able pace And open my as I of country we've be think years. the certainly, laid do talked done within for footprint, the few Sunbelt on quarters, XX he vision our and advantage over plan last those acquisition we've we that to in I has the

that we last We country. for of on executed operating the do the parts and side of there region transaction certainly have know So side both XX years the a all then cycle.

Al puts with what So during in this a great opportunities, us doing time. some balance to on the position sheet themselves which is be to able manifest execute to likely are

Operator

Our Capital. from next Austin question Wurschmidt comes from KeyBanc

Austin Wurschmidt

had So of when you pull many you that is pipeline forward with Eric, you've demand we kind that little a the if further, migration that in years. perhaps economic And up. in bit markets couple years, an a if of that sort get you've marry concerned are I'm curious all Sunbelt just the a trends to referenced in recent the fact under-construction slowdown begin at of if soften of for do

you of kind think the versus curious for setup prior about just that and ahead So any downturns? how portfolio maybe of the

Eric Bolton

best the on to that effort been business out part part full where the cycle, believed long focus of has approach our us up the notion position cycle population strategy cycle. of have to both these retain to Sunbelt and for think we our has to job our Austin, continue cycle, do that be over markets we long-term long over that is the Well, trying take to time, way on caused of performance. of to the markets. likely cyclicality further to growth full the which an on In a and And to focus growth, down the is this the based

is that as rental segment touched large We thing have markets we or we've secondary don't the portfolio averaged a The purposely some well the years was well. middle. as of right diversified kind the been as to the low sort have end capital to end. of in that the over region that we super market. broadest the across differentiated very And earlier, markets between the as in the the as do on of select price of allocation as region appeals other tend high done intentionally our the of well point We

So market. the we're you the largest to of will, segment if appealing, rental

to to say serve strategy, about that years, evident long So to there migration prior couple time. all of for the that were our talked we've of very last us course, think, over The trends continued we well they a the COVID and people from has that X% we're moving into around somewhere outside Sunbelt now from move-ins prior to move-ins, -- move-ins And the footprint of to were coming X%. our running up our our Sunbelt. it's of COVID, into

Now to it's up move-ins Sunbelt. people from XX% to of coming are our

gone move-ins long from our a saying, of XX%. to a nature. or while in of that way of of not So that worked migration there's been It's favor. like has X% our huge. It's certainly trend it's been something It's not XX%

going you that particular you variable think sometimes out as hasn't depressed when it on think of I significant trends, as and been will, migration I others to So as make move-ins what's nationally. if helpful what read

of would the we in much Sunbelt, retain helpful a we I find will in I in be ourselves work that Beyond have affordability if in that all scenario, a that, such tell environment, the And employment that the diversification should the of favor. have I think characteristics we defensive recessionary think that region to today, that the the ourselves employers, just find continues I think we our a in you think downturn. base, we to our very

Austin Wurschmidt

acquisition curious upbeat And sort mean answer. about fairly you were the REIT. I then That's when of a thoughtful just in opportunities. we spoke

the ago? where X today think then size But you rates the emerge. in can pipeline and was today still like if it balance for fairly capitalize like be what negotiations to fund can you opportunities sheet certainly seem You just what you to cap months have to the what upbeat up on? the markets maybe your XX or versus are really And looks

Brad Hill

Yes. Austin, this Brad. is

to different terms based rates, X the in quality, a X definitely I movement months. keep cap high-quality But to my mind, we're segment assets, mentioned on we're is the that comments, there's that a of brand-new And in very assets last there. that just assets. are at In location. is well-located as been the at looking assets, asset really of the just I mean assets looking asset in the movement out

is cap institutional we've seen, change we've what traded assets every to asset rates. a quarter, we in the the capital. traded what XX the high-quality that is about though, there look went in so also points a that basis And And second at seen

to And past, through to flock find So in our able we're just to where buyers high-quality markets when high-quality XX-year we're seeing through changed, that and that's sellers markets in. the buyers. opportunities been certainly where, history we've and seeing capabilities assets, we're in execution our our flock also the the have

we know are So on we've we today, received, they're to at ever than a close couple here calls assets that getting just taking can frankly, assets. or look that to acquisitions of fell either are sit as they more of folks out contract the

to of So believe we're just deals underwriting continue getting coming that will I region assets, performance from the leads at well, to within continue high to a a assets. country looking us an extremely from the market think assets And lot perform. are our are to likely do that which of then the these just And quality I again, look that we're are standpoint, very perspective, think perform that to that at trade.

a a Well, X.X. at versus year looking year were A on today are today X.X. ago, what we're rates ago. cap rates cap they mentioned You

So we were year a where under kind of ago. we're still

quarter, some movement, rates back went been although the second interest down So up there's a they're bit. recent in

X% rate range. You right a the X%, in can get now X%, XX-year

for assets X% that to cap assets. pricing are X%, So to there moment still appears these that into to floor high-quality at in a are the the be bidders X%, range. There stepping we on are against the rate bidding X% on

there So of for be to bid appears certainly a those type assets.

talking get we're differential that have for little bit outside different, add. You that value significant what aren't The located, a of not about. can that's as a but assets be well price

our So execution capabilities.

I that platform on will doing us our execute can Our like ability assets place opportunity or in X to selectively asset the with on. we're Tampa we put value an think these yield

Operator

SMBC. from Anderson Rich from comes question next Our

Rich Anderson

do Q&A time. alphabetically maybe suggestion question just the next And

that of So the income? to the is XX%? type So income. question range per first kind X.X a of What's of unit assuming what's person that, there's the though, range of XX% the assumes that that rent

Tim Argo

The of Rich, all going is lowest pretty band. is Tim. XX%. narrow markets Yes, this right the is I'm highest through It's now. XX%, our a

So most XX% pretty of that them in narrowband, range.

Rich Anderson

Okay. And into lead my then that to question. second

occupant You stretched? -- for to moving that replacing the increases XX% like lease rent of that move-outs out you're cadence but I is Tom what's increases, that and Is same a a that margin with feel to roommates because advance that, rent moving going there's starting that's income. new maybe and I'm not think on? in. sort you're of an it was people But that's by on but are doubling the who single happening that event XX% having at dynamic mentioned suggesting that in up, themselves going are

Tom Grimes

'XX quarter the really up. we seeing that our look dropped And not pre-COVID. unit, since of we're count if QX per Rich, each doubling it's at head

doubling we occurring. up not So signs are of seeing

Operator

Our from Rob next from Stevenson question Janney. comes

Rob Stevenson

with ballpark parcels the And projects future control that those bought, on? out cost how the land development expected you Brad, what's do now for parcels? to many you've land develop

Brad Hill

of contract for site have Raleigh the not terms we additional X,XXX, in that as I that units. X example, purchased, close we this mentioned own would currently be include that site. year So That does comments, not we sites have to an that look we X,XXX we where later in my the sites, have under

as additional would be sites partners have that JV we Our contract well. with under sites

but X,XXX in to XXX] right a bit. vary assets. X,XXX, there it, What is of [XXX on terms call So costs -- X those and about, in now, me units. have those unit I on we a front sites, of control own are The what

Rob Stevenson

you Okay. And start development caused guys push then That's to helpful. what the Denver out?

Brad Hill

a That lot the than some that approval what of the longer a is we Even issue, development the the that those or Tampa project taking and Yes. Al changed anticipated really and all process we're really that's funding projects. requirements on, mentioned. needs is on really from of permitting what Raleigh working

finding it's a kind and is kicking cane this point, are is really lot delay and deal. What So reviewing but on down Denver these we getting that than of taking longer expected, the things delayed. permitting generally a they're all the we're the municipalities at road

Rob Stevenson

can standpoint, you going look and a guys? of the margin we left an when the terms much from operating look material the -- you is how for on already for Tom, When And that's next that over incremental. point operating and more impact you done couple make and operating what type everything the margins in there at the Al of now where are Okay. potential you And here drivers stuff you spend any haven't then, really you some from at is at years where and what's for started? the continued of or point there of spend, initiatives what's this come? technology to impact is on you've going expenses what's to Or forward

Tom Grimes

that. We've got our walk made outline a and and he'll revenue come, through of ton more a great on that progress Tim's lot on a to you

Tim Argo

hit think, a couple Yes, of are I important. I'll and that walk through key points,

terms also the and So going in initial Rent] really and some very I XXXX, and our more capturing you [Smart to then from with opportunities, really self-touring with do what that for little on of operations in the would could the as was make really early revenue us that, late innings of infrastructure XXXX, opportunities efficiencies say, side, that on service help efficient. expense the some mentioned, well, back our plan early focus puts that we're the a site integrates staff And more the maintenance And seamless place on revenue as as then key into offer a result, options. it side. opportunities can

for NOI XXXX, $XX And NOI today, on roll of the strictly roll XXXX, mid-XXXX, stream related we And about as get probably the our basis some basis stream full so just fully related as priced the just important Smart about of rolled then $XX ongoing think in it to embedded more, we rent to our this from talking year margin to will and million to the out, So million of note XXX probably of of think there's by by expansion have Home. out end these of XXXX. I sort we that. fully about of million NOI XXX there's $XX enhancement then points points X/X units. out or And been increases piece margin it think you're out, I for

So now the focus, place as on a more we've expense into got little is the side. that

think primarily you efficiencies some CRM can we're we visibility now staffing process task think greater now, so and portfolio, pods or on office some and come on-site prospects, to within year oversight new access the tool CRM with And on Right new across it and the proximity, on efficiencies benefits a get initially us however of close and to I near-term some focused think that label We efficiencies. that through it. the gives we so from properties and of focused roles properties or we're in live the our the call lot of over so. into next want the

that into will to pilot-type we think or about margin there's $X properties, on X million, as XXX portfolio think end XX we that towards XXXX million when it, piece. get of points of our property So of create call expansion just the about of scenario. more that our fit somewhere adding, $XX basis about We XX%

virtual then we as We're technology AI automating thinking some we're and reworking as testing beyond started and about initial activity. centralizing working we're processes related working well on. And on-site on and so scenarios pilot touring, the to self-touring,

So day-to-day across more one-size-fit-all a consumer just other isn't given of our our the on high in style, with high-rise, portfolio garden variability the size, efficiencies many tasks. ultimately side we markets. the that leasing In And creates in cases, degree frankly, just our and assets, mid-rise, variation, preferences some think there solution.

and that. that So of trying mindful to be thoughtful of

of your between over the to that podding. initial XXX couple opportunity expansion margin some of We I next points beyond of of basis question that the long mentioned more a and a way think there's So the years. Rent the Smart lot answering come

Rob Stevenson

then hitting when difficult last year-over-year of for are And most comps X blended Tom, lease in terms growth? your of you me. the Okay. month

Tom Grimes

it into heading now. We're

piece. half, We He's that split it on blended half into are it And just telling. front had I'll think headed is got share the that let him force now. back I handy. pretty Al

Al Campbell

year, quarter. spear and the I Yes, has back XX% fourth where the Rob the third the -- fourth of was when quarter tip about we mean third the -- in blended certainly you're pricing and leasing quarters to XX% in going last talked the in

that heal to of So are what that running probably peak to. those and of we're into comps comparing kind July August is

hope question. So I that the answers

Eric Bolton

quarter had the be really it off. we the third fall fourth will And is peak. little in last the think year, quarter, a I

quite not quarter. year third We expect was as so quarter the will, last you in it if versus -- high, fourth

good. the be that's in year. XX% year blended I of expect So But are month year of as the mean the will is be Al noted quarter But got July think quarter half most third half of rents, of as are to that his we outlined comments, we pricing on I in total back back challenging. top earlier, the over obviously the which last the X% the pretty for the first

think probably specifically, it'll toughest -- question really Rob, month, your monthly it's so next answer our And be this I to month, but comps.

Rob Stevenson

rolling anything have late? fourth? changed the has leases so still fairly quarter? better since of it's in a to -- you then level at Are you in amount pre-COVID Or leases since allowed the light of then fairly terms still a been consistent the And of role more fourth it's roll in

Tom Grimes

can on fourth We've a in and expirations target been and trouble remain that on our with quite the disciplined the into fourth that, in quarter. get quarter, Rob, lease drawdown you

Operator

question Barclays. comes Anthony from next Powell from Our

Anthony Powell

traffic you sectors? see and more focused some in we've do your any given any biotech seen you decline of those like seen since in now there to expect markets Or Raleigh. weakness those of the in tech Have Austin some markets? and job on Question

Tom Grimes

Yes.

it sides, because ongoing the X those on part not that's have is of transition We And a of particularly. tech large occurring.

-- Gigafactory its got Tesla opening just you've Austin, and that's picking on. So

country. in and is reallocating continues across so think the jobs area. jobs. companies just a large on But And the the campus headlines. bringing benefit Apple's there up then I hiring the building Raleigh, And Sunbelt And still to from tech those are that

are rent in shape now. good pretty in right X those markets we're there. fabulous So And increases

Anthony Powell

rents a much, going talked are so up. about you consistent lot the you rent incomes to income are as And even raise how levels

have as base Over to move-outs maybe the that run? the a more does the renter more ownership that risk over long run, long affluent speak that of raise you home may out

Tom Grimes

No.

at sure in thing over You time, going -- the point, lower point with the grown the than with keep to not have. in, the higher move-outs we've buying what's they homeownership a at incomes this I'm now. home coming right faster than our at rates mind that And has that seen on rate are is a rents percentage would that to and

Eric Bolton

a add frankly, also last profile out how our to the increasingly that the watch single, over well lifestyle. single-family to that years renter it's demographic continues female. demographic opposed play become as X what's And or the X to is communities wants continued lifestyle to our continues I'll interesting offering increasingly been And to evolve, become that a has we're as of

move-outs in very with are buying. any normally associated that developing risk housing So what we find that do a ourselves affordable should from early terms in not home single-family see we material concerns any we sort of we're at market of

Operator

from from Alexander Goldfarb comes question next Piper Our Sandler.

Alexander Goldfarb

the the in of to the I'm you to Sunbelt are inbound back not benefit trying you you with guys move-ins tend whether -- markets? of Sunbelt a based seeing the the while X% MAA's to representative markets in operate, migration guys I an you go or inbound outside in more impact guys the think your the residents how Or I tend you positioned differentiate in -- But total you're migration pull from that overall? operate question experience portfolio, to as saying guess you appreciate that inbound a your on question lot you Sunbelt, markets migration? XX% from is, your Sunbelt. is versus market big lot think to within to Sunbelt wanted about now. is your when Just if the about are that overall more

Eric Bolton

on in about mean, I at that a the actually the what the of that's into move outside you obviously, were to that from XX% we're based the we X% Honestly, that. don't metrics only Sunbelt answer talking markets, to question. I are traffic seeing and our know our Alex, good properties. sort it's seeing

Sunbelt. fact may broader in that so sort statistics level reported will, if you that other some the second has of higher at XX% market it think than that you the to on, are we're trend the And markets But obviously, a of be, may the we and look lot of I into out occurring the coastal it alluding happening quarter. been that -- be that's that that and saw in migration of when published migration

reported through on probably affluence given think And that are that. see you pricing in going are markets homeowners it tell Sunbelt been there's the likely Nashville And of the moving think Sunbelt. relocating are homes. like Sunbelt A a to as that is outside a we in to would more people the coming into I lot that affluent the be roof, households. fairly not, these lot and homeowners than people are going I wanting lot and from Atlanta the I that outside single-family that Sunbelt home some coming degree, of the into households single-family

outsized captured there. that way I a differentiation think somehow which trying the was we point level are, of benefit within Sunbelt. our some the is notion that least, of portfolio to that been is I make -- outside on earlier, probably But from at to there the we've So certainly touched you relocations outside that significant

that's overstated. I bit been think a that,

it's still only X%, XX% move-ins. earlier. as I us, only of our -- as compared And For said to it's

seeing we're just the Sunbelt, vast the significant that on moving majority if executing a people the from still within around amount so will. and And leases are of we're you

Alexander Goldfarb

the Okay. second question. And then

XX disruption you On more, rates, market want you on on that the bps the better sellers about my of asked peers early the have many or discussed and up cap guys the call, said sponsors. buyers

really this year-over-year, when away rates aren't out fall buyers clear, and is look you be from to levered changed. that such cap Just stepping really

macro that off that, the understand levered the if rate, you regardless the are broader simply to fallout just up back I'm pick process are deals Or pulling the levered or simply because whether unwinding buyer it's in your specifically you're in interest a transactions? market as this market? beyond not day. is to like So fallout trying of favorite that more come [post] a it's suggesting on talking the of or of whether buyers

Brad Hill

Yes, this this say would that thing data a is there's Brad. not One point. is transaction I of at ton

third of data today, into higher the back So certainly a points. as is that I to to not we market there's to appears we're buyers type now. quarter, the the see related what use But we'll right term it start think, your seeing buyers I majority on the more fallout think frankly, the lot the And at. the cap They're shorter-term levered pulling get basis those looking certain are that horizons of points. we and XXX the impactful are that rates certainly And in are market. class. stuff asset not impacting pulling with hear as XX off We out time of market to a

not we're have with or that issue assets out. of point that seeing some not So type certain inherent them. are located this Clearly, at well

quarter from second bit, of tells this last You moved could on second seeing institutional the that they're not still down with the but moved at that capital for have every And saw certainly see in we were tremendously. there's demand that. assets us quality and by the institutional a we a closed deal they point. not capital that But well-located cap rates that And fact that quarter we're have was still where based year.

Operator

comes of Chandni next Our from Luthra Goldman Sachs. question

Chandni Luthra

Has So with of pressure about in are your on gas discussion just on any for if Could gone food impact your of you some day-to-day negotiation you expenses level talk commodities, renewables, day-to-day what more the up on seeing, on given perhaps? complex, prices. tenants inflation residence? negotiation

Tom Grimes

And a we on of last residents negotiated as negotiation, point from in that year. get well if percentage year you We the up Tom. offers. go increases went to it's of level less will, renewal terms the last began Chandni, feedback our up than renewal

flat. as basis fact, historically turnover high it's and has it not the over XX renewal staying accept And like pretty has changed rate has In points. continued That time.

questions needed getting but our renewal rates. we to get it, So about we're have we -- adjust not

our I renewal pushback mean, very accept excuse the so But me, lease what get the move look they they new and they're our little push out on. fairly and see that kind is area. of than priced is, rate still And higher in when They rate. at average -- which that in and $XXX market rate

Tim Argo

Tim. And is Chandni, it

look We or point a if our have in at assets. seen price assets. B I bit lower point think noting, actually quarters of worth on some the those pricing bit assets of you a do little performance better last couple little

be would from and little haven't pressure a ones seen feel those the that standpoint? it pricing just So we more arguably, might a

Chandni Luthra

Got it. please. quick could I And a follow-up, if get

color pipeline, if terms environment, that, talked you mathematical inflationary of impacted development about permitting give delays some could the the has us chain, supply In yields, how you that around please?

Brad Hill

is have X last much I months, the delays point in But the type a last is early our we say some single-family tremendous that Yes. on escalation that of the of X seen I'd increase a not escalation this of lumber impact we an to very and off municipal that are at alleviate yields. those commodity acute starting down signs Certainly, see would in months, given construction a are the down, just say. just overall is things cost Certainly, cost prices bit. bit. having

like escalation sit going rate the I So about. will you the think well substantially that but couple backwards, up slower. and we seeing side mitigate on that substantially will will holding those think itself. rent seeing cost start the then that And actually just forward our are of it slow. It to looks pretty from we're are talked go today, we like don't that looks it I increase from cost where delays I with yields

Operator

Tayo Okusanya take our next Suisse. We'll from Credit from question

Tayo Okusanya

Most of And impacting for base my mean have kind single, earlier of whether of how resident questions are is what in forward? could the unit turning I considerations development part costs throw have and you it's of any curious I'm one. going forward, answer. that just been just ESG how increasingly designed could a turning that buildings you increasingly did mention is as But quick on female. if mix answered. that also, kind implications that going

Brad Hill

to development account other aspect, a haven't I our that. to take changed frankly, From pets amenities a into relative whole has substantially. lot mean, than we increased

in desire then that in it matter thing of be on -- that. complex would design say, can than, But certainly hasn't that common gather certainly one say no has demographic time and a grown, broadly, just the we're attention folks other think more pet just whether And spaces the had what where more change with I would has other and meeting area lot been where and the folks community there. spending be demographic changed. to to, areas of I'd paid folks lot that for the a with spaces of So the I is, there we've change attention design whole really spend associated --

Eric Bolton

been hallways get is bit the a out the Smart of change and has longer the degree and a period this people you appreciate. was of but it certain horizon, parking And changed about that time, structured a I that elements provides X with general, I why to technology our and has -- think just think really to embraced. attractive that been what is structured of privacy product Home it's interior so a alluded think demographic response more interior I and demographic weather also [Smart deck. it Rent] longer and little hallways, in of would finding shift, reasons Tayo, I parking, I it over what that the say, think the It the shift in

find to I things those demographic we've and to So great have will that forward. it continued mentioned, do receptivity I really think continue going so this think shift

Tim Argo

your To Tayo, point. Tim. on this is hit ESG

development and that we've our a group green building of historically We're and in broad of we've certification. with least the closely works along terms evaluating ones at our group and ESG kind Our about silver, of -- standard we're perspective well. resident as considering but kind golds so thinking in from a for recently sense, from done makes even our perspective underwriting, and definitely built what

Operator

Our from Nick next from question Yulico comes Scotiabank.

Unidentified Analyst

been Nick. Most It's of lot answered of a have great [Daniel for detail. my Spark] on questions

Is is for X you quick expectation end in if this, new but for me, I through a assumed guide? new embedded there the and split renewal what like Just divergence in year the of answered 'XX? a an apologize the the between

Al Campbell

Al. is This

lower fourth the of X kind little I is color on that. because over for certainly, talked year, the expectation half that's we a there quarter would some that mean, the as holiday Just mentioned, as back because season. of of bit we begin about, seasonality talked the of X% Eric the about

strongest general, continue that but renewals double digits, double feel -- range lower to we've would built probably new in So leasing, on say, the sort probably of pressure single certainly seasonality is tends as can as which the that I what in digits, mid-single-digit both estimate to in with for in be digit well by the of the back comps of that's being the range, most you and half in. year roll likely

Unidentified Analyst

real roughly of X% estate know drivers components you X%. I then OpEx the mentioned what the of are the increase? And taxes main are guidance Great. to

the So increasing just rest to X.X% what's wondering that X.X%? of

Brad Hill

it's -- as X quarter repair maintenance increase We the talked well taxes. for In about general, taxes. really the as and components, for primarily

our demand talk so more when and and is repair a of well HVAC in our design units, summer -- of pushed highest the maintenance really about most hot of because And as turnover a just that's it's more because as of this months turnover so we is is I'll the have cost month by summer materials, our been costs there. we as

this to bit, year significantly the half there the I not back point. a and pressure at expect is being that dissipate So don't -- that we're seeing or that of built

the will and taxes mentioned were Tim maintenance repair the and of change. But things going that us Some really reasons help for forward.

Operator

[Alan next Peterson] Green from from Our comes Street. question

Unidentified Analyst

Brad, top marketing you for wondering if could you're on and of considering And then I marketing of was you to on just incremental be that, that share year-end? that could if that the great. touch assets just pricing expectations guiding those would you're through dispositions the too,

Brad Hill

Yes.

we mentioned look market the is in we on or now. assets and out One The these have to suburban to out. in it and on bring is are look in that comments. right my I average, think that So bring one -- XX-year-old I X initial then Austin, Maryland, XX

a big Normally, that's you that they first has Suburban set in deal, of the it, call to [ROFR] have nearby. So right to have any there that way did right we expect buy a, at not that terms offer in an they the ways. to They an that yields the of pricing and that of yield to of -- expectations yield advantage a the X it specific the is an That's asset, those, the county challenges achieve recently in but specifically they impact can asset has had they some number that assets. another for a entire on the take X% refusal those not asset, things on step had One, the is we asset there of a Maryland. having for a on X.X% on has match in our get. the year, years. And NOI and asset look is done in where

So buyer pool obviously, the of well that. aware is

any a contract county due through their the for product. under can asset to spend during due asset have on is at lot diligence, but period, the what because do and to roll So on the an go they more that time to they're continue diligence going time of reluctant

an with impact So that. of associated we're seeing a little bit

performance also We regulatory which on nature. recently asset has of things rolled that have that some impacted the cap it issues, renewal back, increases and but

from pricing returns normally impacting asset, is would which driving is off that dispositions those So a we expect. what that overall of bit the on little our

Unidentified Analyst

markets up in any there. color that more demand? supply might other noticing heavily your pickup Tom, are I be appreciate operators of in the you using drive concessions And any to

Tom Grimes

level been asset, heavily No. have a and where The concessions new now. on them see excess than lease-ups. them just in used see is pockets and on you but point less at demand potential is time-to-time much net our used demand drive stabilized not to good, they're our concessions really not the not where those this only X.X% being really we really from of use But to right having are we're compete with because

Operator

question from Barry from last Lu our And comes [indiscernible] Group.

Unidentified Analyst

was I bps is that you coming side. expense of investments from expansion on Do think was know the XXX top you technology of -- you much question line in mentioned your versus expense platform. -- how first Could revenue growth? from my I margin expansion

Tim Argo

Yes.

or revenue. expense then related in specific about on think there's what that further the the we've that's of and or of identified couple is all side the For XX opportunity we And the XXX, to so some next for expense now, years. rest is just

Unidentified Analyst

turnover are also, are pricing the loss of And And also, push much you know And capital see? the to you it. more willing more all? concerned we how about Got loss at what lease? do you your to

Tom Grimes

versus rolling is at my in very and opportunity career, forward is Turnover of lowest seen time for I've rate good pricing still the believe XX-month now XX% and good to a basis volume. very low, the we the and on sort going feel push about

good So we'll see is but rents. our and a growing seasonal slowdown and tougher priority is demand for comps,

Unidentified Analyst

mention you loss your lease sorry, was? what And

Tim Argo

Yes.

On lease, or June whole portfolio to so. you X% if compared the it's loss look sits, where rents at about blended our our

but XX%, is the it's now. new the look season, but that's right to would you where it of now. expect highest that stands just If we be peak This about at leases, sort right typically

Operator

the will no have I to for remarks. We MAA further call closing questions. return

Eric Bolton

being feel at we have on there ask. to the obviously, and like you'd point free out call if And questions everyone with us us. you Well, any other appreciate back reach to hanging to any

you very thank much. So

Operator

This concludes today's you Thank your participation. program. for

You at time. disconnect may any

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.