Mid-America Apartment Communities, Inc. Q4 FY2025 earnings call

• Brad Hill highlighted that fourth quarter core FFO met expectations despite elevated supply, with occupancy up and same-store blended lease performance stronger. Entering 2026 with higher earn-in and revenue momentum, expecting improved blended lease and effective rent rates. Noted easing of major headwinds, favorable economy trends, and solid demand supported by various factors. Discussed strategic investments in technology, redevelopment, and development pipeline. • Tim Argo stated fourth quarter operating fundamentals in line with expectations, with blended rates improved, strong retention, and collections. Mentioned market performance by region, lease-up portfolio status, redevelopment and repositioning progress, and community-wide WiFi projects. Anticipated 2026 improvement with seasonal trends and strong renewal performance. • Clay Holder reported core FFO for the quarter and full year, same-store NOI, development funding, balance sheet position, debt details, share repurchase, and 2026 earnings guidance including FFO projections, revenue, expense, and external growth expectations.

No specific product segment financial performance breakdown provided in the transcript.

• Core FFO for 2026 projected to be $8.35 to $8.71 per share. • Projected same-store revenue growth midpoint of 0.55%, rental pricing range 1% to 1.5%, effective rent growth ~0.35%, occupancy average 95.6%, other revenue growth over 2%, same-store operating expenses growth midpoint 2.65%. • Expect non-same-store portfolio to contribute $0.19 in NOI in 2026. • Expect external growth with development pipeline funding between $350 million to $450 million from debt and internal cash flow, and $250 million in acquisitions. • Plan to refinance $300 million in bonds and redeem preferred shares, expecting incremental interest expense increase.

• Uncertainties in the broader economy. • Impact of Winter Storm Fern, but expecting insurance proceeds to cover portion of damages. • Ongoing litigation matters, including the RealPage multidistrict lawsuit settlement and ongoing attorney general matters.

Q: Could you run through the new renewal and blend outlook again and talk about confidence in markets?

A: Tim Argo discussed blended guidance 1% to 1.5% for 2026, renewals in 5.25% range, normal seasonal curve with less steep declines later, and strength in certain markets like Carolinas, Virginia, Atlanta, Dallas.

Q: Comment on transaction market and capital allocation to development vs buying assets/buying back stock?

A: Brad Hill talked about transaction market cap rates, spread between core and value-add, preference for development due to muted supply and good yields, and limited capacity for share repurchases due to focus on other growth initiatives.

Q: Why focus on development despite near-term FFO impacts?

A: Brad Hill explained temporary pressure on current development pipeline due to past supply, but renewals on new lease-up properties are strong, and future developments will deliver into stronger environment with muted new starts.

Q: Dollar premium on renewals vs new leases and sustainability?

A: Tim Argo said Q4 gap around $180-$185, renewal increase ~$80, similar to past few quarters, and sustainability due to resident factors like cost, hassle, and good customer service.

Q: Confidence in new lease growth acceleration and job growth impact?

A: Brad Hill and Tim Argo discussed new lease growth acceleration following seasonal curve, job growth, migration, household formation, and population growth supporting demand.

Q: Path to positive new lease growth and when to expect normal?

A: Tim Argo said not putting a target, expecting acceleration in 2026, and real momentum in 2027 as supply peak further behind.

Q: Disposition guidance and why not selling more?

A: Brad Hill mentioned wanting to protect earnings quality, liking portfolio location, and tax implications making large dispositions less favorable.

Q: Pace of new lease rate improvement vs last year and turnover factor?

A: Tim Argo said improvement expected to widen later in year, with consistent turnover factored in.

Q: Share repurchases philosophy and change?

A: Brad Hill said shares trading at discount, unique situation now, and monitoring for long-term shareholder returns.

Q: Macro view on job growth and market performance?

A: Brad Hill and Tim Argo discussed GDP strength, job growth, demand metrics, and wage growth supporting market performance.

Q: Concessions burn off and which markets soonest?

A: Tim Argo said concessions consistent, some markets like Dallas, Atlanta showing improvement, others with mixed trends.

Q: Risk of concessions rolling and churn?

A: Tim Argo said not a major risk due to fewer units in lease-up and low turnover.

Q: Stratification of Class A vs B performance?

A: Tim Argo said limited differentiation, but urban vs suburban showing some performance differences.

Q: Acquisition opportunities on lease-ups?

A: Brad Hill said fewer lease-ups being marketed due to valuation impact from uncertainty.

Q: Renewal and new lease rates in Atlanta?

A: Unknown Executive reported strong performance in Atlanta with higher blended pricing and occupancy, improving delinquency.

Q: Transaction market for stabilized product and volumes?

A: Brad Hill said robust investor appetite, increasing transaction volume, healthy cap rates expected.

Q: New lease rate for January and RealPage lawsuit?

A: Tim Argo said not getting into individual month details, Rob DelPriore discussed RealPage settlement and ongoing litigation matters.

Q: Absorption volumes trend and concern?

A: Tim Argo and Brad Hill said absorption slowed seasonally, but not a concern due to fewer units in lease-up and steady demand.