Mid-America Apartment Communities (MAA) 2 Feb 232022 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the MAA Fourth Quarter and Full Year 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, the company will conduct a question-and-answer session.

As a reminder, this conference call is being recorded today, February 22nd, 2022 [2023].

I will now turn the call over to Andrew Schaeffer, Senior Vice President, Treasurer and Director of Capital Markets of MAA for opening comments. ahead. go Please

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

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

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

the Our on are and Investors page atwww.maac.com. supplement currently available our earnings of release website For

today. be A recording of also questions. answer an copy and our comments, available management brief some audio on be our website will call of available to prepared this prepared later the After will comments team

I will now turn the call over to Eric.

higher of unit taxes. XXXX Thanks, real everyone. from and ahead wrapped higher quarter as more fourth with than year average for income Andrew, rent results growth morning, offset FFO along calendar strong in per good were expectations and up with estate fee core that MAA pressure occupancy continued

employment the the the is there broader pace outlook year, of coming for some clearly the and to uncertainty ahead economy. inflation surrounding markets, the Looking

in continue conditions. as to believe the know that year while XXXX coming for we higher MAA the be we deliveries addition, than returns more leasing that to normalized is In positioned in XXXX, broadly well supply new will do market

pricing effective growth lease-over-lease over year. XXXX's This assumption, on of the drive are X% unit performance earn-in for per year coming environment Our coupled in of with rent built coming a should expectations from growth the around the X%. rent

course, some vary submarket believe moderation weather high is uniquely will, by in solid We from market last location, conditions to position rate a but portfolio our the year. expected of and of that growth historically we see

three our This an that Sunbelt view the supported advantageous given first, stable is in markets for demand, believe more really capturing variables: continue by footprint we Sunbelt maintains to stronger states. position and employment the key

ratios low continue job and We see to migration resident turnover. growth, affordable rent-to-income trends, positive

diversification secondary levels supply the soften unique both region, Secondly, help to sectors and in of and employment to larger number some a the markets. across MAA's large exposure works our high-growth pressures surrounding a of including range Sunbelt markets, good provides of new

for more top-line our point around mostly the XX% normalize a the will in performance rent we delivered, And that segment capture believe new and product conditions the rental XXXX. market appeals broad average below high-end leasing price being price of we to stability thirdly, with of portfolio our as it and is point

the in of past costs more with later headed with expect we years, or severe as generally large markets. XX in consistently concentrated economy ourselves contraction year perform in the has coastal find those lower do the recession, seen than over portfolios we a that MAA event a demonstrated to towards is traded level what the In more a volatility and/or

control. four with initiate second and before patient own XXXX are the will half under are be plans opportunities that already remains projects we new likewise have sites data becomes We do the in expect year our The we development or with do transaction very market more what associated I of see. we quiet pricing to readily it on that remaining available.

another In performance our couple tremendous MAA for projects These and conclusion, give big delivering you want record to I will, their course, of service of for inXXXX. a to start years. associates units not thank actually

impact company tech the the well positively new have coming over a the positioned We performance for number next cycle, years. will initiatives as of

pipeline provides for a sheet to growth growth continues well strong current and expand the operations, active our external pursuit supporting as Our balance foundation opportunities. of portfolio new as good,

That's all to turn and way in I call the comments have of over the I'll prepared Tim.

and and Thank performance Same-store expectations. ahead once strong morning, good was everyone. again you, of quarter for our the Eric,

had from the While X.X%. September moderated was the during lease-over-lease pricing performance we blended year-to-date, achieved record quarter up fourth growth pricing

for Alongside effective Full versus the result, year a quarter and XX.X%, was blended the effective pricing year daily XX.X%. or the year average X.X% XXXX. for strong prior As steady the at growth was quarter rent for year rent XX.X%, sequentially and occupancy full helping pricing the XX.X% lease-over-lease on performance, XXXX leases to remained the fourth in-place from fourth quarter. all growth of the prior full growth XX.X% drive

January lease year we lease negative of X.X% and new any higher new improved of since X.X% our December's from In represents negative than other been data. tracking XXXX the lease rate line seasonality, than rate rate with have a normal new

Combined strong pricing is lease-over-lease with next expected, XXXX for few pricing to is XX.X%. and pricing, new lagged January range. moderating daily typical renewal more to for much strong was pricing pricing expected pricing which a the new With of and for renewal months average before a occupancy the as providing be lease catalyst was moderating X.X%, X.X% lease January blended of

on We some growth but renewals to supply several on new X% our expect XXXX, benefit from remain and job remain first of to demand rent for the around growth. elevated and indicators strong achieving we household population quarter. in X% of portfolio growth, are our to markets the continue rates signed various do putting expect pressure We in

dramatic of will Eric to should As diversification some mentioned, see market's mitigate expect and price economy impact we our point from the more a we help downturn the performance. in here,

program. our installation the of smart program, product repositioning redevelopment our includes various During broader quarter, our continued and unit initiatives. our home This we technology amenity-based property upgrade interior

we installed X,XXX upgrades than full unit and more interior the XX,XXX year completed over home smart For packages. XXXX,

expect XX,XXX, XX, finish of of December out to number the portfolio XXXX, we is of XXXX. smart As the remainder in units total and the over

For averaging properties yields our at XX in or fully have construction. projects the expectations this and additional approximately with costs begin results repositioning quarter on been leases XX%.We have our the program that partially repriced have four and repricing the program, currently under five exceeded will first another projects

I'll turn of are call my over Brad. Those to comments. all now prepared the

and two good dispositions Despite our disposition successfully the Tim, in challenges last in market, our by the our execution you, closing Thank for fourth XXXX completed transaction team morning. plan quarter.

NOI $XXX investment an a for old. age the X.X% stabilized an year of and million, average representing of yield approximately of Our total disposition for proceeds IRR XX.X% years with were XX assets

of rent capital to earnings out higher discipline the properties higher CapEx, growth our steadily intent In drive XXXX, will we lower with of to long-term redeploy growth the properties CapEx newer, continue higher recycling older, portfolio. capital the within into

planned While leasing the waiting muted, substantially properties market half sale season their transaction we sellers transaction of opportunities before year. back of least will the XXXX, timing. that more volume Currently, number the to continues majority the be the until spring down is at towards with likely reevaluating marketed provide from believe it's the of

characteristics, on rates some we and upward as the embedded the movement growth, submarket seen In pressure location. degree of market with well this face have rent cap lower on the varying of volume, as property based

will cap transparency transactions However, until increase closed around difficult. materially rates be

despite deal our differentiators more marketed to and does difficult buyer a ability will volume key strength expect transact When increase, execution strength speed our balance to be financial support sheet we of environment. attractive capacity credit and and

challenges the to On working our new and elevated steady developments, delays, costs our has done team our through permitting of in development tremendous pipeline. a construction growth job leading

cost construction started million, MAA. record starts XXXX,we units of a of for at level During on $XXX X,XXX a

two construction fourth begin the time. years, up three years likely two a quarter, projects leasing we that for with in environment. to is been we on have units predevelopment two delivering and should finish strong what lining believe During will be started in These well projects construction some in

and planned to of new start half the and starts processes, This timing construction during Charlotte as one four venture approval bidding Midtown pre-purchased through two West to developments one in work a X Phase in-house in joint our one development of Denver in other Atlanta. can developments, we the located change in construction the expect the Orlando developments, While includes local XXXX. located we back and and two

development to a job the costs inflationary increase our continues schedules. do meaningful our working actively with pressures tremendous to team a management and to overall construction contractors our or managing from chain causing projects and Our keep our supply

Despite these by budget approximately in three the million. headwinds, projects XXXX time and on $X.X under team delivered

our pro MAA yields During we ahead MAA reached expectations construction wrapped with stabilized West delivering operating and of well of MAA on Windmill the X.X%. fourth at on Robinson, MAA stabilization results average and up Park Point quarter, Glenn NOI forma Hill,

new had a our remains properties well not at competition from significant our with formas. on high the lease-up performance pro to-date, ahead impact other demand achieved rents supply being of and has, Leasing new

I That's in prepared comments. all the way have of

turn So with Al. that, over call to I'll the

for $X.XX and midpoint over for above and the of core morning, FFO the the year per was Reported share Brad, contributed good you, the increase core year. full everyone. quarter per Thank representing XX% Okay. $X.XX FFO a to share, of guidance of $X.XX prior our

earnings and to about for with in while pricing produce quarter, revenues, for the outperformance rental combined this higher two-thirds revenues, levels were fee Same-store occupancy line the quarter. expectations reimbursement with lease-up of and and strong commercial

This during estate by higher rates real for favorability expected partially tax in expenses, markets, came Texas. final the millage in quarter than was primarily offset as several

over year, rollbacks expected offset tax supported occurred Texas, managed estate Dallas on real based by tax strong overall Our estimates needs trends millage in were Austin. last strong than particularly valuations and rollbacks but less by the the as very counties expected in revenue were and rate

Our more area internal its for this backward-looking anticipate in me, a which guidance discuss moment in excuse our initial 'XX, some we'll nature. continued guidance, given pressure for –

Our balance with capacity of growth X.X% we XXXX. historically low average ofX.XX XX.X% leverage to ended interest debt of support $X.X as available late strong, in and with RE billion our debt-to-EBITDA sheet the fixed and rate maturities year very debt an at our with times manage remains

equity of before continue at near-term settled financing. refinancing of fund long-term end attractive expect our outstanding an capital. forward the currently capacity to We to $XXX needs stabilize financing and development short-term providing our to contracts, an the acquisition, at in cost locking debt capacity million with allowing January, Also additional markets we of

we our Core information provide Finally, to increase projected which year. or FFO for year represents in at over the guidance to the $X.XX a release, is initial share did be for the X.X% with detailed midpoint, which prior per XXXX is the supplemental $X.XX package. $X.XX earnings

a as growth the X% with more about combined strong XXXX higher remaining normalized rental pricing and the the is the rental year, as X.X% for The produced well performance XX%for of by year. historically revenue foundation blended continued for of projected same-store performance pricing occupancy XX.X% between earn-in

on total grew growth our pace. Based more income, effective X.XX%, midpoint year be the primarily slightly a at range, to at this, in items, which modest reimbursement rent revenues same-store from for of other with diluted the projected grow solid X% revenue a expected the fee to is

projected X.X%. midpoint operating items real alone year grow to Same-store operating items expected are X.XX% significant to expenses over remaining the are producing taxes Combined insurance most to at for estate for the the controllable just two the growth XXXX with with pressure. around and grow X% expected grow at these

development through pressures with are the both year combined revenue the expecting also to investment. the midpoint. million during growth We're acquisitions planned year continued for strong full with projected external at grow expense continued X.X% $XXX and by the growth, year a These the opportunities offset NOI

This of asset sales, by providing proceeds. expected $XXX million growth be partially will funded around

short-term we remaining year, as year and better opportunities rate providing for in to needs markets the expect flow stabilizing the anticipate borrowings, from to variable debt to the long-term rates. next internal continue capital lock We the fund over financing eventually cash

performance on rates, stabilize pressure FFO given expected high with short-term further. slight some but is financing when rewarded produce does costs to This year be lower markets long-term current

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

for turn any questions. back you we'll the call now to Nikki, So

ahead. first Yulico we [Operator go And Scotiabank. Nick will take from with our Instructions] question Please

everyone. morning, Good Thanks.

So guidance on wanted start with the to same-store I just revenue.

around you're sort that X% if at midpoint, the close was of you So that right had year. an number to think guys the coming at earn-in I into

in flat roughly being occupancy have you guidance. the So,

market to assuming you So of kind might and well. some be as trying offset growth, as – what just understand are to rent the

guidance the there So of on anything as bit there just revenue kind based buildup is growth why to trying missing a cited? and the little we're understand earnings to be you've if higher the wouldn't

color, little and of But Yes. give built on components it, the the it’s give Nick, the Al. maybe – he components a earn-in. how we you of is I'll on I'll you some if this built can really Tim components. like, give the would

talked when it think That's the pricing same up our it about think level, that built be based aboutX.X%, end year it. that's we to down, You about is not we on where earnings would pricing way what carry-forward into was if at were about the or portfolio. the

And X%. of expected on half about the top about of current that, talked And you as blended get pricing. expecting about, we're we year

add you you get numbers right we the effective So growth X% those at two that together, guidance put rent out.

that revenue modestly as stream expected grow to the that. other things from is, in those and little from moderated our items. Now reimbursements About mentioned a comments, we income they're is more XX% bit of fees than and

terms and So that's of components, to really is. what that's X.XX%, the in earn-in it the what gets but

type just get economic question whether commentary losses, is this second the Thanks. from what just a modest is guidance scenario then the landing into economic on job outlook baked And with any for helpful. That's a would of you guys helpful? Thanks. is be feel Okay. to softer

will is be fueled something what this the I is mentioned, growth next the overall to Nick, what I we today. rent expect to year a around be market be for employment relatively seeing mean expect Well, which by do broadly, continued X%, mean, stable backdrop Eric. going we're that we think to as I Al

of evidence, positive. relating significant not building to be any collections. very this continue of losing We're to real any our people jobs. surrounding weakness point Migration or seeing markets having not in employment trends We're any evidence at issues kind

now. about it any a we were so, what – or for at worse think seeing in the not the markets that materially And definitely 'XX, a a any sort we're it's moderated was – XXXX, occur outlook I but the from employment we're severe of worse mean, to moment contraction as decline concerns

severe that alluded and that's through into defensive in back, ourselves that a If pull that where the in my in does to really that strategy start I recessions been start happen as to markets built think more we've think is, find characteristics to the contraction, comments, broadly our employment the we we've of where really we past, sort if we economic number all provide secondary we're of price severe have we and that diversification markets in dividend play that a lower our across the into us find where comes markets pay our if for the downturn. of that's to broad if and you a into we come point play cushion, product on sectors large level of will, ourselves employment in, some more

should we're weather now, it that, think happen, for calling lot probably So right better not but we others. pressure would that a of that we have than

Thanks, Eric.

take question Piper will with ahead. next from Please Alexander Sandler. our We Goldfarb go

morning. good Hey,

development Just, appetite your first and is on using question capital. for

closed. whatever, guys CMBS The rates for is cap Freddie, but sort overall that of Fannie, in market – for that's still better clearly sort debt stabilized guess, said are flux. which products apartments, CMBS, you You more still remains I use of well, or don't

guys better on you you're more potential into starting think do guys? see about may from the off someone who starting off you from development, people as other you about that own a your account run on rather from pick think better you're up or to else ground So than difficulty, financial you where buying risk-adjusted, do

sheet mean is both. sites, partners, Brad. seen are and that. spitting yet both what spitting this balance well. on with at it's sites. as our with looking both developers I'd Alex, say haven't I'll opportunities, kind We're off Yes, broadly land working start of I then we

not gone that kind interested sites let that but bit, a it under not not well of little the that really being seen in. contract located go, yet. We've it's have we're seen seen we've We've sites been

the our on keep land other sure, pick we for those So presents itself that's up because can our I we sheet that where think will opportunity where eye sites for on-balance drop. people developments that of some

showing deals. out market their up I debt term kind mentioned get of think maybe partners exactly for the can't is debt the equity developments of some difficulties on of going short they what are financing backing we seeing our or what development is some in you through partners, the

that JV could NMHC a are shovel-ready, follow-up We've a already We seeing week and we've number from folks e-mails term. of are that, opportunities that development where got team this that at projects, a start are out of short of got their mid-year.

those long evaluating look we'll those story is I of in be begin ones both debt are how think now. market we'll because opportunities are for the So to and going the by just the But that right areas. that those is, impacted tight

Okay. going and of state And employment. on of question back markets to question the second the sort Nick's the is just

it common the seems that supply, Sunbelt of growth be and about your offset to refrains economic taxes, is, of about to has the insurance. more higher you lot manage the than ability higher always but relative One to a spoke

Or on resident will at stats year, look or substantial any able see sit XXXX within the on? more were managers do you not risk were see that markets assessing growth back you be as base today, like your As about job and economic in around let's round the you a employment property now like, you that as your what when employment guys this – would concerned November, supply the guys how than exceed sit to say, based markets among your your you and more look? in, table, we new there we're coming are markets, few you're here

is this Alex, Eric. Well,

about sit demand us. the continue of here we good for today, equation we As side feel the to

– mentioned, we're seeing I strong. still and is As volume that mean, seeing traffic any we're I not lead the

evidence We renters our seeing collections. stress – seeing not terms in of with are any of

– to talking any up. out about not in, their losing seeing We're trends needing evidence not starting pick We're any because coming their of get lease. roommating seeing to people and of job

also, and we outside at people we that from in the look here did sit for the then you the Sunbelt. still – of so, Sunbelt as the leases of quarter saw moving into XX% fourth migration were trends, we And

So, build at any on we point, what demand still are still worries but quite it strong. moderating from the side equation this seeing not the of was

good. All you. Thank you. Thank

Okay. Thank you.

We'll take Wurschmidt our with question Markets. next ahead. go from Please Capital Austin KeyBanc

X% alluded growth Great. Thanks bit I'm back provided and believe half progresses? I was how on And guidance. wondering could of just lease could – curious maybe blended sort lease-over-leases, year the in you you rate trending the the embedded as share lower breakdown if if little renewals guys. just assumption the I you you a between that kind assumption as half, of first to, figure

Hey, heard Austin, Yes, for this that bulk of carrying for comments pricing in us the me renewals is mention you catalyst the of right and Tim. now kind lease are XXXX. strength, new renewals the outpace the

knew kind renewal we So this early the on some XXXX. through that's we side runway of us part carrying of had

a the So, the of then first sort kind the to we're think more negative carries probably seen I call I starts slightly would get that I year, X% on in what right June the which be the of is expect from through X% quarter, about through a MAA, to now. new renewals, little bit X% with side, it lease as typically it, probably, to moderate talked of little then that you range and rest and you've normal into X% to on sitting

then year. the I of positive down will end and trend the go accelerate back think slowly and towards and through modestly that summer the spring

a bit, lease-over-lease. and you forecast renewals that rates and slightly then have blend we lease little together higher just would we all through of then the kind year year, to with see the that for kind new and as typically the first growing of the of blended get in moderating QX moderating in So, seasonality, half

before I surpass Well, achieved and half that's I X% the would low seems of on back into specifically X% rate like relative you've in think with what kind year. you what growth, mean to – guess that it period moderates historically, pre-pandemic the of rent peak the new the fairly side, leasing lease it season market you that

to understand also the draconian to kind And would then, guidance range end? to I'm rate seems guess could lower low lease end that what in achieve you to just the guidance? Thanks. the trying I share that able assumption cautious of of because your be growth like So, you get pretty a new scenario

more the consistent most Tim give on the stronger becomes laid give for is the will -- higher of around the in you two how we I'll new X% quarter, with little it's second sort that obviously pricing specifics a quarter by hold mentioned, and lease out year, as quarters traffic year more as it. of more get renewals little robust. forecast It a Tim and fairly and

given really pricing is to band lease come demand. to X% expectation, going fairly of the It's over around the year. overall as through our just in new the down variable tight blend But the

And so...

I lease we part new Yes, typically again, November-December, quarter, negative. that up kind are following of of year highs, rate, absent record lease was the on the mean, early rates new last first

So to not and summer. it's we start new unusual the and they lease rates that kind then into of now right seeing get accelerate we're spring the as

getting end the to get a to end Eric's the economic of if end, I opposite back a better and see to and demand pricing the obviously But think towards and kind economy, see on the could that's of little further lower we guidance. would economic the get then the comments bit or drive higher you front a something pricing us in deceleration it's of of on that backdrop lower more shock in revenue terms guidance low how higher push

came, shot will be manifest -- part leases it it the as given probably That the in. -- year through that in those it's pricing, come coming blended new If of the latter would impact would

Great. helpful. Got it. everybody. That’s Thanks

ahead. our take Please with question Nick from Joseph Citi. We'll next go

there's acquisitions, like else? half you on a that sounds more opportunities the Is could stuff, talked think the maybe been come on second call, in balance growth capture comments it comments that's about from? the sheet your land, think emerge sounds have may of like any more to do 'XX comment. from you something position your strong a where you It and in Eric, Thanks. opportunities. But

through in fairly be opportunity I tell been in the that in is is are construction. already level newly you at this find They in not more initial we where we've tend There Nick, my XX%-XX% that have lease-up, constructed. finished best past, the No, that the to belief lease-up. occupancy that may their are would projects

for of better part the the probably leasing year. been They've

getting assets still just I – run are they a we're they're starting turnover, itself. lease-up say, more now a are on we will thus, to point that that as fully leverage the not much into they're and yet so more a So where where opportunities to expirations typical And brings and stabilized they're of that kind which these, hopeful find related more difficult emerging buyer to pressure lease from finance in scenario. effort that's

that for I We've And point XXXX, guidance out, acquisition is built mean, think certainly is things million to of I is assumption our built the seen the around volume. of our one past. important – $XXX around a assumptions in the

investments, while going $XXX X%, acquisition only non-stabilized that value yield long performance is that term. initial assuming is so year, of million are value opportunity it this on of we the we proposition, for FFO reflecting that these that great think forward their has status Now on weighing

for the to – financing difficult environment the coming we've market, what year, the into ourselves our And year. in, given guidance that of and think we is that, the that's supply find going of this emerge kind over that's of dialed area so opportunity the we're course into we given

of you're markets blended market guess, into think growth of kind what the the a you helpful. new that from in that about on 'XX, I and are backdrop concerned assumption rent kind time very if given and then, lot of top guidance, That's macro of for we've goes performers your a does perspective which which And But and spent revenue. Thanks. everything kind about? imply

is about I expect larger our our of pretty rent to Nick, Yes, growth Orlando, Tim. you ones of we solid think the this for to some I due growth markets, mean in, or into be continues of really that about earned strong we several for I with XXXX, should markets revenue continue will just market But mean, that be the earn-in. a us. talked if think stronger

of It's been now a strong couple for years.

growth is supply it's in It Orlando where terms portfolio that our the little of but it's are supply, #X markets is only for getting market job in expecting is In demand, situated not one a Orlando. some we're getting our of XXXX. of bit portfolio that in most necessarily those our of

Orlando supply the of we our combined strong have there Dallas XXXX. some the strong. expects So another continued be blended with can strength really we both one It's I'd January. one QX in is to It's supply that demand, And out show pricing would in think markets to then point and lower expect.

much There portfolio couple that is Allen, as bit been pressure, hasn't a will little and in, average. and Dallas higher Plano seen supply Dallas, than supply. January pricing North broadly, submarkets Frisco, that QX seen in particularly some we're we've get a But the both in

got a of downside It's on from strength more demand. Austin our that on supply anything. the kind standpoint. got probably one that than we're is a we've and that keeping our the are couple on eye those extremes of So eye on kind

job migration, also growth, the the top out our X of population, absolute submarkets the of markets has it XX the terms coming with of of demand supply portfolio of indicators are Austin. high all but that seeing that, or into one in in market supply, of portfolios It's any any better we're our various of the out in

expect pretty moderate, So to that's we though it rate good one does in earned growth. do have

our of eye area kind keeping couple those that on. So, we're

helpful. That's Thanks.

the still bit? large maybe like that So a spread secondary narrows maybe or 'XX it the in markets sounds outperformed

But holdup growth, in the little again, We I environment. with Yes, it secondary the softer expect economic probably moderating well. would markets revenue I that narrows markets of large we the growth. pretty a a terms more typically up bit just into get see with hold if think broadly earn-in, rent

much. very you Thank

from next ahead. Please Anthony our Barclays. go We'll take question with Powell

Thanks. morning. good Hi,

Just get the economic question leasing new as pricing and spring. I guess, bit more pushing to how and the a bit you job to you approach a spring improvement season, it to well? may to general if your into be the on sentiment, cause lease it be get rate Just on going peak a continuing would just spreads change is, would confident do What curious to pricing more, get market you better? things in where

sort rent the look push of that we generally, that. versus and income price I and at we want at going demand, look we to of mean, – be – drives some will to exposure, be look things Yes. we and our there are always the lead much decisions volume, it's various at we occupancy. economy It's balancing it on to how

– So blinking you downturn. monitoring We're that of year, about think what sort everything time see there's metrics typically right the during looks lights we that we're kind of this suggest and there various of no the during winter. would kind those of any red is right now all now would nothing

we up be really demand. will demand picks factor as be So will it that as where and up traffic summer into terms really get up pick in of pick determining heads XXXX and spring we and on the

And pretty to how Okay, there call And out? responded turnover to trends any lease thanks. residents certain any in renewals, changes increases? seemed consistent. price want And you

we've Historically move-out the little But one QX, down factors, low. reasons certainly have turn other. the mean it for the job seen was two in but or a way it's remains was a the what increase little those house transfer actually bit and speaking, from it's a been consistent. the pretty seen rent still in biggest but are trends no but We've a pretty buy I – up Yes. have turnover notable been the decline still past. to bit, –

Right. Thank you.

Chandni go with Luthra Sachs. with Please We'll ahead. move next Goldman

about there, the guidance then, Thank end morning talking question. end? high where property get see others? other does could talk low Could are time for you. you taking good the what And thank And outlook some perhaps but taxes time Hi, expense spend XXXX, pressures some tax versus you more about for you elements? in spend the on would the versus you you what markets to and my

is on I'll color some maybe of and Tim this give then Al. Chandni, that some with can that. start

general main is, the pressures inflationary insurance into in but go continuing drivers the think a to are about I way our see bit we're the expenses, pressure. as of and taxes that think really to you XXXX

of my And that's taxes X% expenses. operating and -- really I comments, over as those together two XX% are in and mentioned are all so

about it's the very X.X%. expenses then together So other meaningful. And are

personnel, see things. we're and think in those moderation to I repair some maintenance beginning

primarily us lot I year, and lower you'll but you'll be that to components can guidance see and going manifest would there's could have a Tim of those. of taxes don't of to But we loan little which the items. or in manifest, on on and information back And see as the overall, pressure about talk think move more of we of insurance, the taxes point. higher insurance, that a be into more those either is it, What take a our yet X

that and on in a issues. valuations year, the you're go you a Taxes, you when based volatile totally rates, on think -- be with municipalities but rate you year-or-so millage don't lot, off notoriously, into last markets, been have deal you're have you will as good their has budget the what guessing going cap very idea

last we've some In finished. continue those we're we from fight year, of few formally we'll yet – Texas, fights of got over have mean our half litigate some than and we've to left So things year think a I this hard, did properties not year. we we to. that got we last and going and

like so to that's the best that, are can make And we've there do. in or there our appropriate now, and you like go estimate – higher things thing lower. got right We that feel

And pressure insurance moderation expenses, by the so driven some expense overall, and controllable in we'll see taxes. but

add Chandni, that. Yes, to I'll

mentioned, are taxed then expenses other around the of XX% call And around X%. insurance, As it, our XX% X.X%. at about Al

I just had growth, thinking real of is tax I rank of sort in terms to I probably estate if say in year-over-year highest, them, absolute third. second the is R&M the would probably So insurance highest the

you inflationary on up XX%. really will, HVAC of R&M, XX%, worse inflationary earn-in, expect that if of some really saw kind it's much so plumbing up XXXX up hitting So appliances that the seen XXXX,we've carry by not increases in XX%, we on pressures, we to any over get driven in

what So per lower do personnel that's the from I the but still the moderates saw think XXXX. than on R&M sector side, we expected to unit a remain average. drive in on pressure basis we

-- then But items think have we line and the opportunity smaller some I fairly there. manageable. other are

side think a R&M, the it's we driving it's you increase. of controllable, will, if is So bulk on the really

Thank details. all that you for

are trying if understand question, how I guidance there follow-up how and my For anything XXXX? clarify compare to or versus in just debt in is to XXXX? wanted about does bad you thinking What's that your embedded

how your very markets, supply in talked you. that concessions? thinking you've higher seeing your thoughts as about you would you are Thank more then XXXX, Any being properties? And Are be concessions in helpful. obviously in around about

dialed have maybe, in with the debt. close, start I normal, much have I but our practices not points I something very say collections delinquency, which mean I'll are think good. XXX% guidance, collection what back XX very we say. But in historic of pretty come we bad to to about XX terms normal, low. in that. is call it, close What very to to basis would as

almost any programs. coming we no And from collections have government

as of amount from history our uncollected to the have it We continues decline.

So in position we're very there. a good

forecast our so that. the And reflects year for

moderating And our normal has collections putting that are in forecast so normalizing where environment. a we're or really they typically trends about

in concessions one, significant concession we're was increase in at point, Yes. X.X% It rents what point. QX. on line saw the seeing any we And, which overall not this of I'll with QX, in is add in

of of of the urban change across couple the are we've seen in the some seeing has concession no portfolio, on the them, from and generally, We less what seeing seen in it's to the usage more extent quarters. supply largely suburban downtown -- last . more assets. big more we're which submarkets, or But still

that. Thank you for

take question Haendel We'll next our from St.

ahead. Please Mizuho. with go Juste

there premium curious a doesn't market perhaps advantage half back year? out is it me acquisition to a perhaps put morning if of But year institutional shortage Few willing too, you was but good capitalize growth assets a a that as to an the the more that mean of and but products. heard if in the I external and is now there. more guess redeploy the on way the the be National dilution in I questions more see favorable sellers from to front. Multi-Housing, on I that to at to selling sell would buyers in even earlier a Hey, a am – demand, bit

is Haendel, I'll this Yes. that. Brad. take

we That's do. ability disposition entered is capital. really you big looking plan year, big our is As the a redeploy to this part to we're of component of as what mentioned, that, that

disposition the do in-depth very of to And going in third, We the looking for time what fourth of a the sell year. we're our review not quarter really so we're plans to market. year the to identify

speaking, trying terms a And company market supports we be generally the do pay earnings don't time. that. really factor a maximizing want to going long-term We in over dynamics we're do build what that dividend we broadly is really value. of to in just within are ability what growing think our to to the But

growth then on to so think the better in proceeds capital consistent we're opportunities. to into our redeploy maximize can And we that external sell a and to be that's best assets, basis where done a position able we

assets that's that we other right in lot aren't little now we plan. bit can proceeds and there is that a in frankly, is targeting So will we'll kind out we And the and on bit think values. dispositions that's come of And sale a the that that best where asset maximize a a more now in buyers strong down the what direction can where Charlotte are little right we sellers visibility our a market. a less there terms a be then reason of the us fact primary we're growth X little bit, think get We right bit have given year year. for our the will later specific external debt market the markets settled in out when earlier the volatile forecast think in little spreads now than be our where of they of for our with in

That's bid-ask growth the the seeing the this some seen you'd there. think but or clearing spread rate follow-up late, fairly very helpful. how is external cap from different out? A a I folks, hearing so the to market kind you're appreciate on what high And We've what pay but price that bid-ask here? wide, four side, trades of deals get done of do lot mid on some XX-ish curious Thanks. maybe and spread? willing hearing color to the What related. of plays remains be or you

market at would we really track, interested in Yes. assets is was that fourth seven. the the of the there I and It's hard quarter, we say. looked in to there mean just, as only buying in honestly, terms be

we deals of they're have universe very, small universe would in the tracking XX the X.X third seen in is say, and seven rates only a to have So quarter normally move on very projects we cap us I a in quarter, around up. that at. looked transact the

that not interested and that asset the location not of We spread, they In fourth into We were located. X.XX. when cap really in a call it's obviously, rate generally, it, where saw – or you're getting but the found we're on one ideal and the generally fourth depends range the quarter, are traded, a quarter but for in. X.XX, right quality location the now, the that assets we that it is there is

the still So for in range. assets X.XX in, interested we're they're

To properties and your that fact quarter driver of bit. are up earlier not later third is happen second the that market cap to even is part I quarter mean year, more rates substantially. late market, into think there likely we a just more will I think the expand come point, to the think as I those interest to rates this a on volume as lot the there's And come which market.

that's of rates a until X rates the leverage something is Today, we negative there's got have range. X.X to maintain that there buyers perpetuity. market, cap to up that and are you assets a setting really to coming can assets But at point, that some a push significant hard aggressive debt number in bidding of not are volume going to out rate cap still are lower be at

And then majority be I that selling now would a to of continues right assumptions. what's also say loan

us really and of rates see out market, just to And masks what true help that. we need volume cap in so that the are kind

That's or squeeze more. it, full I I share your really year you what assumption appreciate I one is you too, turnover for can If share in did think but Thanks. helpful, could that. don't heard 'XX? a guys

Tim. Yes, Haendel, this is

pretty it expecting similar. to be we're now, For

I general, other of reasons that drove saw in we're But a some probably think bit we the . bit. go XXXX. some the and up maybe to in a turnover what this little reasons little of year turnover similar expecting moderate

Got it. Thanks.

from Anderson ahead. with question We'll Please take Rich go next SMBC. our

obviously, wondering sensing is growth, XXXX, of Thanks. nitty-gritty detail your can if Good by is how morning. of landing, sort on one that. rent My is no of you I'm into first of the surprised it in How Are get much expected But you're of part? proactive fatigue deceleration question much reactive? you the of it where from on some more customers? is

you the environment your some are headed in the given just of in revenue XXXX? to protecting moving noticing I quarter. you're growth you reacting occupancy same-store to you where or for uptick of I Tim, think more – you pinpoint turnover? in the you're mentioned fourth mentioned any proactive being downside approach? in Are Or you that macro around and that's think sort the causing Are turnover things there uncertainty

is Rich, Eric. this Well,

Let me that. try answer to

weaker that no I that touched that at we're we're think really I our with a distress at still point coming not seeing at I say to of mean much on level, earlier, mean base. the demand anything as the evidence this environment I would ground we're that causes seeing year. us over I believe vendor looking

ratios they rent-to-income that in positive. migrate to any to We're has be been. quite Our trends the migration Collections been continue things stable – not of relative seeing to remain trends We're roommating, where changes behavioral with not strong. nature. have performance very very

to Sunbelt our to move and markets continue outs the of quite low. Move out be non-MAA outs

evidence employers their are for really any anything on than starting more employment an eye the think downsizing I and and us, aggressive the keep we're economy markets trying broader get and that just to staffing. downscaling So to at the broader

to rent And people starting due not we've we're macro to that mounting asking pay for, that no that's and level, still be seen a obviously change wanting at that low, home yet, buying quite reason. to increase third be concern. But outs the to cause not move-outs is there's for but our a would continues their that biggest to move evidence and

what in having the we're willing asking them do more were we they to renewing still people pay. pay than to when But out, resident after come move

that's – is indicator that is So fairly holding still market strong well. me, quite a a that to the up

just we're not – in incredible what's think And significant and seeing of that's so, But we demand, we're moderating off are pullback highs I here. this of just any in terms that point. happening at

enough. Fair Okay.

developers what like of Second for Always than I just opportunity typical conversation, loop private around? you question the or is Or smart the step a sort down XXXX. perhaps happens supply strategy. normal delivering chasing XXXX typical interest time for even sort model variables, environment, in is And of at on ground it road? of a but the is, to closing growth you different, two you do a obviously, an like my a point feel more down But the road? on you environment else, do year shaker feel developer is everything always the question the by is, in guess rates and product and opportunity some this

I lease-up terms definitely there's that for that Rich, on anything right terms in the I of currently. of sure, in think distress ground, market shaker say much in they're Brad. getting that this privates mean financing. is in are, new not starts, is I now. would

moment. a the selling So forced at lot there's of not

still capital there and they to folks equity of. want cycle that Now are out

by would that's say with right nothing the bit because As and in little earlier, model on taking – profit, really or start those the and inability developer deal a it, repeating. of and I'd predominantly they're rinsing region our asset developed the an flux and the new their next flux now reasons. built developers and selling bit say right merchant a little now moving to is controlled developing mentioned is more I selling on to in is I assets. private

much. Thanks Okay. very

from ahead. Baird. We'll our with go Golladay take question Please next Wes

this million nonrecurring how drive that there expenses CapEx, thinking had or year, Hey, anything about spend is you XXXX about everyone. year down would XXXX? in morning, Last in good you just for there are under the of $XXX maybe and

and this I I'll and capital. probably mean in around we're to $XXX start Wes, probably together recurring overall, enhancing all $XXX Al. frame her million. is -- the get the programs million spending

a a about$X,XXX that's more $X,XXX probably so and the recurring And rent-enhancing. little unit, rest being

programs which our in our grant. continue program, smart includes We redevelopment

talks so. with So property continue repositioning we'll $XX programs our about or million do we'll properties potential $XX Tim of another increasing taking million their and another that's interior revenue those program and

There's about will I in revenue So has that, some ESG think whether it's certainly future. $XXX for things some be mean the or certainly, we some things that investments overall, there's the have potential some some like there'll million.

large portion redevelopment We're seeing for fee that future some of repositioning program, pressures just in also And as that some investment and is those of inflationary in a smart rents. then the programs, well.

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

guess view this I just then as have else? down done, you when something ramp smart rent forward for to of do to just you And a fast big Okay. start this? maybe is on multiyear we we about think a years, the the few should on next How or does move ever pipeline

finish a this Smart The expect Wes, Brent fairly capital this I I year. is in to mean, that a it project bit. Tim. little we of is installation piece Yes. down significant comes think total, that.

redevelopment unit similar would and repositioning to see amenity-based program levels. I interior come sort the that of expect continue property But those on you'll program we I at think both broader that expect the down.

did have on Okay. now? you then might it? comment the I exposure missed And right

with was Exposure of we line is at X.X%, kind the would it in and year. what of what which time last typically about right now sit year this expect .

Okay. lot, everyone. Thanks a

Stevenson go Janney. our with Please next from Rob take question We'll ahead.

morning, given to construction for next of pressures going on in development what comments And new Tim's are seeing the Good year Brad, pressures, what markets six over forward starts guys. four terms the represented you R&M by cost the plus? are starts?

Yes, Rob.

in feel Atlanta. that we've we're good and starts Orlando one in Charlotte, got year. four We've one got on Denver, in we've we the for So this in in one shape got one for

my comments. prepared in had I I those think

working projects been for So plans process are on on a those. while those and in we've are

those. feel we pretty good So about

own we to sites those Orlando. number got projects, addition phase In we've some in another a and of Denver, in

phase in Raleigh market. the Second

But projects mentioned that this the of year, up for number next ones a in six or the XX add So so. the X that are over to my that I months comments. would those

construction XXXX. escalating like we're that costs increase were of year. We what they significant terms costs, In the saw not throughout now construction costs are is a right in seeing in

starting at second we're we or we point, relief there. will further that this quarter not and the At our this third moment. seeing our that some It's fourth hope get certainly times perhaps that where into year, get the developments as be

of do. didn't The contractors signs had originally, we're to saying bid they first are they now but calls that from think getting capacity that job they our

We're as hearing well. that subcontractors from

holding just the it's is to market construction So given down flat. we supply the where to but some now, that for see hope the come and on relief multifamily, new single-family fact starts expect on we side

G&A is was left, else 'XX is and Al, in then, the but And at Okay. the midpoint expected that Obviously, what Tom's XX.X guidance in for XX.X decrease? 'XX.

a well, me talked total. really as as about, we I think Rob, let at look that's, we overhead start with

which the very growth on X% is the that in we then had so strong total specific G&A But biggest And that's item there XXXX. would on over the I performance is and XXX.X focus think more in year, for we rise. line,

performance for certain you've target. max next based that then So our guidance is year incentive are got and said programs programs that on we

management going line, strengthen primarily really see And in, a on is of that's expense in part growth support initiatives So in platform you the big then to that. to both the that property were investments the our and on. technology, that, that

So, of overhead think overall that that's for because the both growth Rob. both and those together of a I part I year, answered

Thanks Okay. I appreciate it. guys.

We'll take our next question Please from go UBS. ahead. Michael with Goldsmith

that estate taxes, insurance than cadence the back expected half, or taking or for you And on that of midyear during thanks that does And last lower X.XX%, flat renewal are be guidance that accelerating? real but the morning. reconcile? year? compares the my the X.X% a relatively Good midpoint is the in then What's would how but is question. within growth Is expense that year. have easier

just understand also So, to of down the trying perhaps be year? shape expenses the would real the taxes year and the this estate slightly why through

Okay. I'll Al. is answer to try This that.

sort third year the you I lot QX – a wasn't inflationary what probably quarter saw expenses, sequentially to yet of most last you've with of continuation over the levels pressure think see and in you in and that's the in. pressure got built QX should for and because comparing we fourth of cadence inflationary that carrying a

QX be So and it down QX to the range. probably moderate more and mid-single-digit highest level will point more QX would that

that's So more last – thing. we rates the think was in looking they would to a I saw X.XX%, roll main the strong than we in thought are millage year, In what year, taxes, we come saw XXXX we back back did. that

little we the fourth talked a It surprised quarter us bit as about. in

in expected areas. than And expect little was higher reprising a move XXXX. key ended don't so – year XXXX, in we that as we significant I the we think And we

so and primarily and spilling on of we rates, of are it's beat for have and Texas XXXX. revaluing Our pretty XXXX what's expectations Atlanta, cases and we're have got parts pretty we – that a we our few this a given that good into – Atlanta, year, litigating Georgia, what's a of over part our there's from revaluing primarily millage

think that. wrong, of be on in what included And so win we've that. estimate estimate we'll we we've an may that, but got an on We got

a us together in very X.XX% stand, but that we we right of as where gets And a talked that's lot that about, estimate. all now, think So range. good that unknown that we

property strong, magnitude of has values Got NOI cap it. growth but And rise sticking due the the increase rate. had haven't been to with in you, same Al.

Thanks. So maybe does that beyond? opportunity more 'XX leave appeals in successful for and

what it's of this say looking revenues at of looking is they're is a rate cap think backward-looking year. very strong a has but I at revenue. changed, game, strong and we'd still fairly year XXXX stable looking that Yeah, kind the at environment still for It's 'XX Still beginning just pretty back stable.

So that's point, do is think your I very it. a point. I think, driving good

it's a some going into top move – more we a by Florida. primarily because year, in that in be point. We're your and line looking to taxes, to Georgia, normalized pressure driven would XXXX moderation most Texas, we expect As seeing in there back in they're normalized that

agree with that we So would comment.

Good Thank in you ‘XX luck much. very

take Pawlowski our question next John We'll ahead. from Green with Please Street. go

give conversation. a just degree property you portfolio me Hey, on thanks few just rough sense what of this percentage you Al, Could high for going. keeping a already quick tax have of the visibility follow-ups for call the year? maybe the the a increases

have we what pretty Obviously, they what we think is it's environment low we good high – degree we Man, given have than . is the of are. beat visibility what cap current on a are. the rate other know a values

and I John, Georgia. XX% our to XX% of tax exposure And mean, from Florida is Texas,

millage –we So going come to to millage back to probably to really what down municipalities rates. turn to rates the and rolling to strong going it's It's down have expect valuations need? again. going are continued What they

point. precise consultants I mean that up? visibility think ends we all us. this have to It's have that at Where hard help I

knowledge. We have a lot of market

it's expense. estimates drivers the So on of Texas key on based – Georgia our Florida, our based and

And we'll that think history do have third very good I we until quarter, wish can perfect, point, knowledge, John, I say. a markets, second as consultants more but our at – experience at more good but had as in would we'll this point, us have this our that's pretty I the our good we not quarter, give have understanding

a what worst-case think I around But all taxes a property range curious, and estimates. year? the do Okay for this reasonable just understand there's is scenario you AX,

we on why good – we've higher range That's I or that's a sorry little bit higher a wider of why kind That's John. a that, yes, question. been a range am put little

put top end that's we the our what say. we – I that saw at of You think would seven

I mean us hopeful could some fights several going things either against could in things that strong we're we think you didn't X.XX, go have be We're it that way. expect. would go these areas, – we seven but I some have

probability cities rates... if millage Is don't XX, X, X, X lower

we're XX. and given I revaluing cap on. of think probability low things is going looking X, is I back X, low to the mean where a low rate use again mean, to or to mean put think the probably, given I'm I too that I X, XXXX. a I shape are, X what's X XX probably strong end do very

And year. those beginning think John, we so to much reduction I that be this you argue some into that to But what see not it hard see so it's as would to of move in expectation able as expect be would XXXX. we moderation mentioned, the hard at we because XXXX,

Okay. Thank you.

We'll Tayo go Suisse. from with take our Please question next Credit Okusanya ahead.

for call Thanks everyone. the yes. keeping Good morning, going. Hi,

even broader question again, rent backdrop. of federal in regulatory been this you lot the but several additional Again, the around have asked, talk if a a level White the guidelines. control, general out just Just about apologize has at House municipalities putting I

kind reading your overall term. suggestions of it's if actually not this just think about any because particular maybe in medium may the at long But players short, are industry? curious, the the that impact bad of you all just thoughts on lot Just things have out impact or a in all you the

Tayo, Rob. shot at this that. is take I'll answering a

affordable level House weeks White on seem ago, lot really component – does if you they the at more on it. that it to focus couple like and the start of out really of housing blueprint the a put I a federal think

as states the which time, proposals ever as there, don't leverage our there we in the or time that of gain really any municipalities, really part And traction. we but the agencies to at almost them control pressure is using from operate and look up rent come some see

which it owners be any both a a rather the the and to term, anything we're is residents. as affordable gives is supply-driven the concern So significant of control, legislation board really added across needs ultimately rent pressure end goal, that it's see housing don't from kind tracking for view of still if more really than a short, we medium to as system and that us the on focusing the negative a

Thank Great. you.

next move will Wells go with of ahead. Feldman We Please Jamie Fargo.

risk include or your question, just any you, guess of guidance rent mean, any in kind I outlook? you. on rent Thank do a in follow-up way, handicap Great. control I your

not. have We

And if like recent and appreciate tech specifically pretty then, far going you in have sounds some color on But these I on the It like of are big so Okay. years all things others. probably guess layoffs of markets more Austin, in well. Nashville, still Raleigh, growth I than market kind focus markets.

Can of of you changing of of kind backfilling people anecdotal you. be anything the whether there, of rest Thank like anything or different move-outs the evidence vacancies provide helpful? portfolio those types kind markets that, any or would just versus it's

mean I are seen staff you going tech I to Nashville, of are the this ones mean are in to right date, think now, that where would haven't eye we impact an but what more terms of that. Tim. which terms than we of means already we're point Jamie, some is But keeping some Hey, exposure the it. out been announcements have it the by any seen the of have on we be others. in I exactly made, ones impacted Austin, Raleigh from as of haven't

those trends in we Austin are different with eye for an broader seen would haven't the be keeping but No yet, but sure. talked the sort supply/demand those anything on, broader markets we of than concerns, ones other we about

those you people seeing industries? of types demand Okay. Are employees, in from slower those

but of could forecast of that Not but tech, the risk yet. on Silicon quite we're lot blue-collar-type of not so reportable eye more be what Like drives nothing our an had aren't if these it's little want seen terms there. we've call really. it, It's employment far. of mid-level a in a say said, and mean, Valley the for I types the XXXX, downside keeping I markets we it or on, little more more that some a to more you

Thank right. you. All Okay.

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

us we morning. Well, everyone appreciate this joining Okay.

any questions at have reach other point. follow out just up, you any If thoughts or

us. joining for you So, thank

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

at disconnect time. You any may