Mid-America Apartment Communities (MAA) 2 May 242024 Q1 Earnings call transcript

Good morning, and welcome to Mid-America Apartment Communities or MAA's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Afterwards, the company will conduct a question-and-answer session. [Operator Instructions] This conference call is being recorded today. I will now turn the call over to Andrew Schaeffer, Senior Vice President, Treasurer and Director of Capital Markets of MAA for opening comments.

Thank you, Regina, and good morning, everyone. This is Andrew Schaeffer, Treasurer and Director of Capital Markets for MAA. team are the Tim Eric Clay management with this Argo the Holder. comments prepared Bolton, of participating call on morning and Members Brad Hill, as participating Joe available are and also DelPriore for Fracchia questions well. and

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

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

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

move-ins and resident enter of our summer new leasing several the performance Thanks, positioned. new to line with trends supply Andrew, in impact trends from for the we in and our season first in reflect markets. quarter expectations, delivering were Pricing the well continue

quarter points the was as April captured Encouragingly, first quarter, pricing of strong. blended that basis compared remained quarter followed pricing improvement prior lease-over-lease the pricing performance. renewal first by in Our to ahead the XXX

as leasing the head front is we our of into positioning early of us, bulk in summer the we season. do like leasing the still While year

with stable producing the steady occupancy, new prior that will markets sufficient supply that continued to provided solid high-growth revenue enable manner we strong in and results outlook pricing, are continue collections We a are that in believe our overall demand the aligned strong our renewal to absorb guidance. that

turnover, and demand. Our and stable portfolio to leasing traffic net markets drive low diversified employment strong migration and continue across conditions our solid favorable record trends remains resident

are While record-high will new our poised terrific should technology this a Resident years the by a new several new and on-site remain competitive we as tapering introduced conditions sector-leading doing remaining strong, supply stable that recover begin optimistic remaining expect in deliveries in year, and are quickly leasing later resident our early demand Services conditions leasing With over along XXXX. of rates, through by actively improving past management supply our with meaningful retention difference trends the pressured occupancy environment. ratings reflected remain making deliveries couple to teams and group year, Google by we asset supported capabilities job. Superior begin this

years. to our prior to be balance While performance comfortable are more the ability our his operated the high-growth a positioned sheet transaction through we the year. I transaction we work current optimistic with in for even we've to platform XX-year next Brad to lease-up and about an touch absorb our supply diversified expectation markets opportunities operating markets, cycle stronger record excited We're the compete continue stronger outlook higher-quality and portfolio, have high-growth With over comments, on few on higher market our new with which remains level. at us projects, focused we new in supply. through the seeing believe about remain will for our acquisition supply these cycles. Today, ability slow, our

for offer investors. estate attractive to employers, markets high-growth households real Our long-term continue appeal and

will from initiatives higher efficiencies leasing and growth meaningful also horizon operating pipeline supply margins a send new our solid to new as will appreciation on redevelopment conditions team our growth continues drive a decline have additional existing properties. And I'd to the finally, technology a opportunities portfolio deliveries for meaningful I'll call start and existing of the external rent MAA from our to further my with like and growth. the drive strengthen. to NOI our setting growth for turn higher that, future to We Several pipeline expand, a Brad. XXXX. And over stage

our environment you, XXX-unit in for North XXXX, Carolina, work to yields in the continue are quarter progress growth. Subsequent prepurchase and project current end, under putting started earnings in mid-X% construction in what development our in at a stabilized will are least Phoenix, this deliver start expected a and deliver by XXX-unit deliver stronger Eric, preparation first morning, we everyone. Arizona platform leasing. we development In we MSA. Both achieving that construction mid-XXXX, consistent to units XXXX NOI are on capacity quarter balance good future on Thank to what prepurchase make believe developments be projects and we expect to Charlotte, with we the to to through our a sheet range leasing on

that that remains We of X.X%, seen closed rates two firm a with But from up approximately market and of our total team averaging credit track volume, this we at $XX we are stabilize acquisition Raleigh is and points increased first continue in of late to in point, currently X,XXX in rate actively we active $XXX $XXX that cost approximately X This basis newly interest in the a under in property select supply, deals addition cap that low. constructed our these at up approximately to of find the XX contract XXXX. At quarter, is continues have to is tight occupancy we good developments projects, close million. believe million has With performance. volatility month. bit units acquire this the initial off-market an which new to With volume represents compelling X have to quarter the rates mid- under quarter. Despite previous forecasted completed leasing for fourth expect Despite its opportunities. development lease transaction X lease-up transaction is property conditions, acquisition continued the currently are million low from pipeline and lower our to expected cap deliver suburban volume XX% XXX-unit on achievable. than construction and pressure our

average weeks, select rates shareholder more and additional While rents with originally at XX% on pressure facing creating new lease value. continue achieve are X concessions our weeks than up slightly original driving to to we and the expectations, on from above earnings moment long-term higher approximately units, NOI projected X

yield original expectations by exceeding average points. For our these XX of X.X%, X projects, basis we an NOI expect to achieve stabilized

We continue on for work projects. to the make progress predevelopment of a number

expect quarter to two to addition a In Xnd two this start the starts construction to projects moment one on year. later ago, I we more mentioned development

recent have While encouragingly, of on our we a have some reduction construction in not on we achieved supporting ability seen level construction to costs, broad start our pricing reduction projects. these

execution participation, to process the our We to which subs better better expect we stronger with have construction throughout seen bid starts. lead subcontractor for new

that hopeful to will starts significant lead are region construction we've in declines. substantial seen our that We construction more in cost the drop

we development to this we we and supported patient remain pipeline, project progress maintain that to us own on start X,XXX units. We construction or our is year, XXXX allowing the representing As start in timing. in Any likely will units supply. aligning we deliver sites opportunities disciplined in us projects, execution strong growth significantly and with optionality lower well-located our to by allowing be environment, year XXXX a these on of what first start either of control, which when additional leasing XX through today consists nearly additional

continues in-house opportunities well prepurchase future our Our and environment, prepurchase could development evaluate as to team current development In sites and additional land liquidity-constrained to as this development add we possible pipeline. it's additional opportunities.

While busier good our external we to continue a leasing in into remains growth position portfolio numerous season. the heading pursue existing opportunities,

times broad supply with provides higher support currently markets during a number Our mid-tier our outperforming. of diversification of

year. As to current absorption, Tim solid with supply, will demand to further, this see time last high new better leading level outline and exposure continue the we future improved than occupancy despite of

pre-COVID at strong XX.X% billed Our and near are collections of levels rents.

by costs. high Our coupled is base choosing to longer, with stable service, residents focus housing customer with live supported our us resident single-family with more on

the Before Tim. I exceeding I of our do call say our all improve our to corporate Tim business to offices. to and over that, our those all on expectations call properties associates want I'll in and that the serve regional you and to at over to while residents turn turn thank around you depend the us. With you for those of

Thanks, Brad, everyone. and good morning,

the growing of to second outperforming the and first new as from From collections resulting these such are continued basis time D.C. The to and Eric relatively lease-over-lease net drove markets. for to in area supply This, pricing hold improvement pricing delinquency X.X%. in Charleston less growth X%. continue metros up pricing the pricing the of expectations slower Washington, blended basis build strong, our traffic of XXX in Because Nashville continue quarter. Average Savannah, a with third we mentioned, outperformed traffic also and markets of on the to less that new leases intentionally All of than to our Greenville, the low in combined a the of mid-tier lease-over-lease negative Richmond, all pricing showed physical larger for market patterns metro typically with rents. be quarter, points repriced quarter, portfolio first steady by new As this first an in standpoint. attributed our perspective, XX% several X.X%. Renewal blended X.X% of XX.X%, new of well to of occupancy quarters, improvement. Many the from year lease the lease the representing Houston and negative was evident elevated X.X% rates and broader the quarter a deliveries quarter with tends factors resulted fourth revenue quarter. be lease-over-lease to renewal lease as than stayed compared be impacted

and helps of negatively with during along is submarket Our balance markets by new impacted supply, be into quarter. performance the supply delivered between the the markets on of and The market other highlights some getting which more of are lot being two Jacksonville demonstrates performance Nashville, that a like diversification to improving market those the mid-tier through absolute continue the a larger of cycle. diversification. level diversification Austin benefit markets. Touching

upgrade continued initiatives. redevelopment our and product various We

X,XXX unit nearly completed we XXXX, interior of quarter upgrades. first the For

Given the to typical would up of XXXX. a to units reaccelerate and expect year, XXXX than lease renovate across our currently, expect but portfolio in fewer in would the units program number in we we

and now few home completed properties year. program, expect upgrades complete we this have inception the We to the of over since XX,XXX the smart remaining

repricing program, X projects in additional XXXX. a repricing the later that begin plan active repositioning have XXXX complete our projects have phase, an to we are targeted with we in construction For begin X to and and in

from first from by This notably XX-day improvement last also a quarter X.X%, Regarding improvement year April encouraged remained of and prior quarter basis a at Brad March. an year both as and lower XX basis in ahead XX from X.X%, blended basis renewal a comprised basis March. Average pricing quarter XX time from both slightly pricing March negative this a of improvement And the up from both quarter negative X.X%. pricing metrics, of the are the the point quarter we also April the and pricing from versus first and exposure point accelerating was the first occupancy And point from XX.X%, points of first new improvement X.X%, of is X.X% of for and occupancy. March. March. April than improvement XX basis physical trends the noted, first point lease XX is and

of supply our to delivered we new continues is to discussed, in still we outlook markets, being similar many be last a quarter. we've what believe As but discussed the headwind

increase in expect do traffic pressure XXXX, for seen believe maximum leasing we this summer, have peaked the and And years with of for varies pressure by will that we late new XXXX impact the the on we is continue on to to maximum spring demand outlook supply and and we've the pricing about It but in already in pricing While to much new likely average, and to XXXX. our new expected starts portfolio is construction lease construction early market, that footprint after store. mid-XXXX. typically historically seen into leasing better X

the Sun Absorption demand first still X was moderate expected as highest is in the as the While the any evident country. Job well. Belt still quarter revised compared factor in and region in XXXX, growth key quarter of XXXX. has highest strength in household the expected and third of to with to the growth demand first supply strongest quarter the any some formation. recently in upwards our of for in remains combined the elevated, in-migration markets of be quarter been decades Job growth but last to is since XXXX accelerate continued the

a saw home. decline expect with quarter, we in buy a residents Additionally, fewer to it resident to we and remain first to turnover moving the low continued out

the were XX.X% prepared that I call buying lowest turn fact, quarter due of of Clay. comments. In the to I'll MAA. That's a home the all the way the resident for in ever move-outs a in first over to with have

is to overhead nonoperating timing Thank you, and $X.XX We of estate guidance. our the real interest morning, income. related per the the everyone. and of while share About expense collective $X.XX taxes, reported per favorability for half was was above the of Tim, the outperformance timing midpoint of share, the cost, FFO good which first core to of quarter related remaining quarter

Our Same-store revenues collections. driven with by in slightly of operating the for expectations was performance quarter ahead for expectations. the line strong were our same-store essentially quarter, rent

timing the same-store expenses, to favorable property real than higher quarter estate costs. onetime Excluding operating of primarily were due tax guidance, our first expenses slightly

$XX development to next million of pipeline, pipeline of expected be funded cost on nearly million the quarter, $XXX this we funded $XXX the the million During current over years. X leaving approximately

Although support. complete expect that additional Brad the pipeline year, we well our is remainder the projects second which the of with sheet half three we over to positioned the of expect earlier, starts to mentioned balance grow in to our continue development XXXX to

expect of and to capital our of the through total $X.X we quality continue our produce installation smart portfolio. and we million the During rent repositioning which redevelopment, invested to a solid programs, of quarter, returns enhance

fund nearly We in ended Our our shape. combined balance to investments. quarter $X.X the revolving future significant sheet with opportunity providing remains great and facility, in credit cash under borrowing billion capacity

quarter an net our low debt-to-EBITDA at Our of of debt approximately years at leverage was at maturity remains X.X XX% outstanding with with average end, rate X.X%. fixed And X.Xx. an effective

During million to proceeds January, issued rate paper. the an XX-year pay our of down of we effective using $XXX bonds public commercial X.X%, outstanding at

We have has X%. an that June an rate million $XXX maturity of upcoming effective in

the XXXX. fourth Following in of is next maturity scheduled this the quarter bond maturity,

us, $X.XX the range year we with the for Finally, of leasing share. bulk guidance slightly full of year of to reaffirming season $X.XX the the are FFO core while ahead to per our midpoint tightening

well for our is are We maintaining in other year. That of the we way as have ranges also same comments. all as store key prepared the guidance that

So to call Regina, we will now turn the back you for questions.

from the We come for question questions. [Operator call will now up Austin open Instructions] Our first Wurschmidt line of the KeyBanc. with will

in renewal pushing occupancy. on breakdown growth and you how that and at thinking about sort growth the hit Just the lease the in provide And you're this embedded new And between and months rate the want to has detail was I on on a operating you business. point? side could couple at of the little of playbook next guidance some rate hoping lease all changed of operating bit

an -- occupancy my I is give think mean where this in mentioned with place exposure, Tim. there. we in we're as with good I we in you are of Yes, are I a we're we bit overview. I'll feel little a Austin where like comments,

and look on property. It's we're by where decision. continue on property where So with the as not occupancy based but comfortable get growth push by on little We push is. we busier that, on to the rent necessarily we pricing we'll a bit exposure at balance lease of continue and new a occupancy portfolio-wide everything can. can We'll into depending now, we season part where certainly, property,

over probably we would quarter XX% far leases couple terms total it was where to be the about blend with XX% more renewal, to next I did of it between little QX. in lease first renewals quarters. that a of the expected in mix As as we renewals, new to expect the towards

that the than we key a in year about renewals weight So and as bit rest the pricing of have the is heavier for turnover new keep that you to little that's a to leases. thing remain mind expect the think do low, trajectory

I there was issue the into exposure softness, in mean versus you your pull comparing March of helpful. March alluded better I and bit then in prepared which March implies to pocket back a May? a a anything to Just remarks, little comp the That's just portfolio And data that a think from or to additional April position the you perspective caused some for XX-day heading there. looking detail April.

is I a on And February little towards was. was always February has start in expirations in a you waiting looking Yes. where to push or and up it I see frame late occupancy, to time where it at of it up demand of say, a that and starts as on to based as March do late exposure targeted of there March mean year more early it that's is the pick and kind time pick the lease basis you're would early again bit March.

as there lean So during occupancy in where bit towards that occupancy in we we're and period. we little you pricing And as April, in of both a acceleration into from got March. saw saw, a was

Your Markets. the will next RBC with Capital question come Brad of line Heffern from

different April. spreads. Just it sticking leasing you seems March January was February. so than but uptick it's there decent know a like with sized was an the Obviously, saw uptick, in in and weak I see what and not Typically, you tremendously

up April? a spreads I guess in didn't And has more So leasing increase surprised sequentially? the you are picked lot traffic that

good haven't as XXXX, we seen up factor. back and at at We've of have talked exposure yes, leads XXXX. look question, was. probably leads, and unit, what for To pick a it it the about kind kind exposed as we year going normal that's seen of We the traffic we since to first lead look volume,

you March done levels mean, traffic a and not the things pricing, ton into of in when all of internally I about there's getting -- months, we volatility, mean, lease quarter. sort demand. I can that leads individual it's and be for when the think at we're leases the it volume for exceeding So exposed and new those with get you first look

the from going it general out see we're see that it's or to next X play mean is for trajectory quarter-to-quarter, it of and So the the leases we reprice up, XX% to flow about moving will has kind to that be we're of also What what impact pick of and really over the biggest seeing when month-to-month. June, will and will we ebb July start the between May, and Obviously, and of our on year that months. I traffic up. part August. see year, X the looking that's

So or out months. over X will it where that's as really X play next these

curious on then in remarks, environment when stronger you would a project of could thinking strength starts it? and the Or why give And if lot is leasing that agree low it. But at drops that's through a XXXX indefinitely you there? the just I'm you people far Got Okay. supply would I a XXXX. driving the said what's think off, of least prepared your expectation that level maintained out is

those cheap relative we seeing us. Brad, realization available this of the couple the that I that supply behind and a in think Brad. years financing of are that times over partly it's today is is of level that comment, realizing Yes, are general, just a that's last been result to high

going couple next country a do long-term more years, environment out to but environment to back believe back the very fundamentals just of will years. few seeing of could in getting demand we our us of leads are perhaps to long-term we get supply But on number the the strength supply into when get as closer the be think so region layer that a top years. good below that over you normal a the very, forward for of averages, averages we be And future. I then that, the

will Dennerlein question come Your line Bank America. of of next Josh with from the

Josh. Chen Stephen for is This on

improvements? whether Where of markets. see kind the can your biggest maybe question usage. quick see like you on a concession and across concession the the you Wondering comment that, you where on Just

pretty Tim. This at similar in I Yes. what usage high mean level, QX. a is to saw we is concession

seen We better. haven't or materially it get worse

a and a little we're as quarter. last market a last market, it then I seeing where X.X us lot closer of months where probably X pick this area, got than rents about Atlanta, X we're where certainly quite Austin the an is would before, obviously you market continues was say, Central a again, to to what I one At months broadly, with were I a varies than a is we're little it year. heavy if For in of most in we've keeping that the to of quarter. One late and a seen X.X% level, worse the bit. about heavier Austin. And rents seeing bit movement developers think to you've about concession last we've little But in uses submarkets eye be, not kind from portfolio concession concession Midtown not of said, Charlotte, usage X seen saw probably up from of bit. would seeing X, there. obviously, other we say, quarter. stable no we Austin really It's on, as get but the usage X.X%

that, on also for a right comments like development what's starts? the I different the on now? subject comment costs yield, And but missed the sorry if maybe you're you the new then you're seeing on can underwriting some And construction on yield

new delivering Brad. are that starts on our our development this mid-X% with for Yes, today is that yields range, expecting consistent portfolio. is This we're I on the would which we're comment in the existing year what

pretty So cap where spread good are, current Xs as is rates it, my call comments. from mentioned a low I in that

we other really are dropped and seen and costs. really market specific. a in points XXX mentioned it, than some rates, construction call broad which range in reduction There to spread in so So markets think scope with get basis positive partners markets we're our earlier that my starting, able is supply reductions where are cost others, comments, construction general. two construction cap faster for in those been not pipeline have costs, us. And example, in markets. There we seeing good the we're cost construction we projects across seeing to really cost still a the projects, feels I in we're for I without of those quicker those, of reduction are both current board or which have markets, reduction but in that terms seen haven't some in is our It's reductions the

Your with next question from the Michael comes UBS. of line Goldsmith

quarter It was in just line with strong. generally seems unseasonably like was expectations the above the midpoint, demand yet

mean So of forward? at strong going does that of that kind to high demand the guidance to unseasonably levels stay needs hit the point

I mean higher I we needs necessarily levels at don't what it to than think expected. stay

seen needs it has we've to migration for a of seeing Job a outside footprint while. while. our declined. in the markets I there pretty now think that demand move-outs our -- in at of has be for growth our continues. consistently mean The of I to number been levels we're that outside

is pretty that migration net it's with in consistent where So been.

expect QX, greater demand getting into heavier we're is at the which steady we see obviously it's level. there, And traffic lower we a didn't which and to get see But heavier you patterns. really to obviously have in benefit. So heavier and would the continuing now a just lease traffic period, as traffic demand what now benefit, is is will into that a season expirations, the QX then

level, where of is a it high that to guidance. our at move some think, to would think about shock, thinking it's something take that attainable sort I demand not So economic in of I it terms just seeing mainly

can during at X% And can Does renewals what up is, leasing on follow-up my down new when the And And your that, expectations increased lease be of negotiation along picked X%? renewals? the peak leasing to much new season? is on hold lead momentum side? are spreads with you leases how that

hugely and the I expect mean fairly but out is, typically year, little little summer. bit first renewals. it leases I this wide time you're where bit and when gapped not It's those as looking of always get a spreads the there's we a to spread at new we're into -- from different, Yes. narrow spring a

Our outsized to and year. kind somewhere X.X%, for renewals, talked an X% when X.X% those renewals range. quarter, of lower X.XX% is expectation the last been going about little think about that bit I the We've right think to reasonable impact think now. in it's the keeping we've you for And X% are mind, in closer rest that range too, to We a in turnover, of have on but leasing spreads the the for lease pricing, the blended is moderate so or months our positive. to get for pricing we as lease it's down accelerate over pricing. And new don't into back full more QX, it going expect still, lease while negative get X next and then to here new be it the few new see to for We year. to from expectation get

But spring XXXX how we're before level high summer season, we that's a I think it. thinking spring that. see the probably well into about and it's

is And Eric. Michael, this

is on Tim add what to Just saying. to

mind really. terms another in I X% to what's think new than bigger keep look thing when dollar versus in lease of at pricing I is on a implies, play at people's comparison, difference some you of in lease-over-lease that that negative think, a X% mind renewal

spread a to over of spring tends the course summer. the And is biggest Tim the the new If on the see it is a about the bit seasonal that we're -- from and that look at we and of you that, rent leases spread we're of the course, amount and renewals actual amount narrow achieving as achieving only kind is rent $XXX, then perspective. mentioned, actual on only

and concerns and narrow think, is over -- a So again, the other we us friction issues particular suggest you performance of cost bit think outlined, to and what recognizing to us moving along summer. continue that renewal the to. the it's achieve some We of any going you're and don't spread terms of of we opportunity see the the run lines to into moving about yields in what we've referring spread the for -- spring an pricing

Wolfe next of line from the Your come with will Eric Citigroup. question

guidance, blended And your guidance I to on there that guess follow-up the a level? of looks Based about year. X.X%, is sort just way hit right hit that growth question on the think it that your it? need a we'll around blended for Michael's think Maybe spread ago. you like to do I X.X% you second mean, when

say, spreads talking new talking about blended? blended When are you or you you lease, about

mean X%. mean, before spread, I think is blended spread. guidance Blended your I I

thus like the probably if if rest And far, year, of you're negative of the based see understand right, done the of I we'll X.X% guess, was just X.X%, for need what's of you the new those you when for lease. rest like X% the But calculating embedded on the lease then year and assume were So on on what rest I side, you've the think renewal to year? levels. X% sort you for trying new we

mean is think keep mean, of things quite to leases. I QX it's I that the we Yes. couple all alluded represent XX% the I leases. in one, to said you mind on the new level don't and XX%, about to a sort of of will QX

also which is the strongest -- period. So

more in portion that, mix heavier year as see even weigh into we to tend and well. will then with of that QX that blended. full And the So along tick QX the up renewal

a dialed to a in heavier -- weighting throughout about spread the on have the So heavier when the you in dialed on renewals thinking and a year. weighting you're lease

But little the accelerating X% would and now. And QX not drop get the negative, renewal new weighting leases new September think just of think back from and per in expect in leases thing into kind yes, mean, I they certainly saw a and of talked but terms beyond, quite we So where main level the to X.X% you to then last down, range year, kind about I the as staying it to is but in then keep bit leases weighting negative. of both the mind between of to we in I further quarter certainly renewals. are

year, helpful. there rental it That's in and about quick in comment it. year. And you a remarks then was in your Got this release performance to alluded turnaround next a the later

of think see that the Sort we'll do fastest. what you markets turnaround

do supply projections, your on you that based we'll quicker So see where turnaround? think

can extent. The some in Florida and some strong, and been I that remain supply and the and at I'm continue and level, D.C. ones improvement, strong, the both markets are Charleston to show on some will, Savannah mid-tier thinking be I markets, than Houston a along a really an the that we're, then markets I starting start would I And other have Yes. then if you would and of some markets. helping Orlando to would of and that Tampa keep high I that to Greenville bit Richmond think eye and expect strong. further say some about absorption, little like to think,

that well. lot working are And in are It's So remarked getting it, in the we about where a some and another one I continue of couple. I prepared those comments That's see supply benefit from. well pretty Nashville market as a but is to think then that through positioned.

would I steady now. the those ones have beyond right us So say for pretty three that been

Your next comes the Scotiabank. Yulico from line Nick question of with

the also, acquisition in your the on on you And deal? expand stabilized in Nick. Daniel for you is confidence It's lease-up for Raleigh highlighted the Brad, initial opportunity yield and that the what prepared remarks? Tricarico can Maybe

Yes.

your NOI lease-up part I'm missed X% the that. is a very deal Raleigh I what is And out question. yield the we're first of of So expecting sorry,

commentary had the general opportunity prepared the the set. a Just on confidence you in acquisition remarks in

we've if the the quarters, couple mean has last at Yes. today, where is the you of supply sit a few up. I said as look transaction for quiet over I been market years, think but we

build market continues feel looking at I volume So has volatility out. like right tell is in now. been transactions need There's rates more the seeing really slowed we're transact has not more up. interest the market just while to think the we just There's on deals difficulty the the we've I'll reviewed, underwriting you, the that occurring. But coming our from transactions down to

I years we it was what was first not what a to couple quarter. of where think we underwrote -- was fourth It's it in still double quarter, ago.

say on XX side. reputation thing years, the of the the that, just exclusively our Sun transaction on this been we we've region and confidence the operating have side mentioned us other that our region country, or whether sit Belt. Eric gives we performance focused we So just for in believe it's do from of history today. volume is a I in that would where to really continues And grow

an that and and perhaps that. we like The So opportunities opportunity we get. I of was that have think others a not got, looks lot off-market opportunity get specifically other do we'll Raleigh opportunities

region are pretty with Our especially relationships in who developers the strong this are the country, deep region. of and the in merchant largest builders this

we was merchant XX at years, from that almost If what last you developers. of the over look $X over purchased XX% billion,

with as think additional all a lead will have opportunities year. good very go those And relationship to of we we that through the folks. we So

job revenue in just the no guidance outlook, we to about How change to then should numbers you that? interpreting pretty now the seem X talked the an months year, components initial guidance. into revenue And be but the obviously conservative back going growth

I about the first Like fact XX% season of I leasing our that leases. interpreting us. said, the the leasing think of heavier really to have quarter just is we ahead

driving That's do but it's months, we'll over the -- is. next side really plays demand certainly few XX% encourage So how out next months. it the when seeing X where over just the

Our will the come of line next Haendel St. from question

with Mizuho. Juste

private to encouraged my and one, target I'm they on getting pricing market. summer so goals development is supply when absorption? the are some to more But is late end. on I'm to stabilizing. market leasing the than back private your better pipeline tracking hear pricing thinking I and private expected dropped how and the So Are guess, their is, achieve demand to last up that and leased summer concessions up guys impacting you the blink obviously up end in question your

or if coming that seeing on insight you progress is data be if I'm guess or summer? same the their facing later I into risk along can this So any curious could we the behavior anything how you're give

approach pressure general, time And to did measured this and from third, get market. And start, the And in at performing. quarter monitor of insight the have, our wave. we all in in of Brad, developers then the relationships that year just concession the we're are also, specifically to properties that of to bit in this comp comps via supply have I'll not We is properties. This pushing One, Tim fourth this We're the more We usage information of couple a just point I avenues. from earlier, of terms a the our a all how we're in can do we say last would wave have in seeing we add the now. year. it. seeing the little with as much than as developers I just mentioned supply ahead of

valuation. starting at and concessions too leaning severely now their look So transacting they're is to properties point into potentially monetizing to at impact and this their heavily going

measured at So at they're this point. were year than more year a see can being last from we the this they of time bit what

they're that quarter. And itself would into suggest get until Yes. I it you particularly change today, it even XXXX. later markets dial lease-up lease and into things moderate they're year any it can that as quarter, it And get that doing, is than doesn't properties seeing in right fourth sort in, track though the in numbers I manifest and how probably new on we you get the but leasing to down think right from and probably what as point. mean, quickly we terms And certainly we the less up will concerns of now, that. we're fourth the is are I'll quickly to part we this do get mean, add that of supply why think back side certainly, in that of not you be our that seeing on in will but now that thing. we in based

left remind Which to peak the quarter. supply hit markets peak you amongst are of you number larger can supply your us, good this markets? mentioned that And markets hitting are still

it's think range. probably a a that I a of look a one then And to a sort be frame. are same pretty Yes. takes are market of that's I peak within long would do again, starts would to like back how give we curve. that's certainly behind ahead pressure different most range we're within and kind that consistent, where high level, and hit. of of maybe at and of curve. probably But looks at is a bit that say lot them construction -- honest, one, I Tampa little is that that behind most in that little take, But when to mean quarter, a bit curve. Charlotte Atlanta time QX or to of little that of markets probably it Phoenix bit in landing and of

June but My market indicative the if what today just debt now, you're kind your this, we question what's second -- seeing what I'm you is pricing provided Curious for should assume? in the rates maturity? sorry of right

look Haendel, we're that this as is seeing now, Clay. anywhere X.X% maturity. Right between we X.X% and to

Your Kramer come Morgan will next question Adam the from Stanley. of line with

gone wondering May, point Just July at renewals? even June you've for for out your where and maybe this

up and of now, range. but we're X.X% X.X%, months, of the X.X%, just for the couple next we're next the for July months, in couple wrapping Yes,

to you developments undersupply and more to deliver takes? kind of 'XX more? So puts then had beginning would that quarter on on a the period of color the second the and you you maybe just And start balance development more kind again, it. higher in and sheet thought 'XX, start That's development, helpful. and to starts have capacity around in would Got of quarter. a the of more the do drive I I appreciate last disclosure what described where And sheet starts, Look, given and really is, maybe look, today, into kind at process really us whether balance now the the to level, I as 'XX, walk much a deliver or to the you think opportunity is And would I you just given supply where what 'XX, 'XX, 'XX. encourage you've kind prevent think in do less given your what compelling of into that think the just of bunch couple conceptual

preventing Really of us could of broadly, next couple building Adam, lean doing have been in the capability the years. been need deliver over tool the this for has what's years. hitting that over I and on our And projects us as into start pipeline Certainly, to returns have is value mentioned really we from we my a just that that more development developments. last Brad. comments, we and of we a a couple as

quarter And the range. where the point think, As second starting that we're to to puts yields I get that are mentioned, basis call rates we in X.X% in two us of XXX spread able cost some the X% we're that to construction the range. XXX get X.X% we're two in to reductions to cap it starting out that to that those

about in good area. that we'll those, have prepurchase where start We're layer perhaps to able be are could that we can't additional into our opportunities here along expect, to they that really hurdles long merchant raise to opportunity to have feel this those we I -- those and efficiencies two developments we us The year. the relationship in evaluate in we our term. to the So And costs that partner go, There backs aside when enough if But those from at that second another mentioned, that the I to as provides started we've construction markets, a one developer drive with opportunities. located. debt out equity another ability platform onto quarter, numbers deliver where or far by that we lines make continuing three we're down again, and to something we area a two or of they're approvals work to then place the lean those an end market. continuing get have mentioned. But the has another that land emerge evaluate ready

area that an and long-term in creating to strongly through focus terms of believe that So is continue development value avenue. on we

execute we that to make So we'll in returns sense, get to that continue the continue extent that the area. to

Adam, this Eric. is

enterprise put got and platform. keep And the put Brad increasingly one to where developers of throughout effectively to some today with we we issues to X% of you thinking than sort that in run around in share partnering that for recognizing of our would to is downside centered region, you on on sort no of well is that of exposure time values, we if the spend We much saying. of that us are development lot enables $X obligations, Just around how which could we this what of that like just has risk is things merchant it want we've been lot around idea of us, development program more funding that based on sometimes some know it a where pricing through we'd to repurchase billion. Also a add the the more about the risk our that will, development. quite into and the with forward at

would just So the to today, that have we're do of enterprise taking our sheet pipeline we something capacity both approach is up a bit given overall not hesitate from the where in taking and terms and balance it on value. we the

Brad as about what will was of good pretty this support much on the discussing. pushing terms in agenda feel numbers as we So

question Markets. the BMO next John will of Your come from Kim Capital line with

prepared have believe rates cap compressed interest X.X% his Adrian mentioned that despite rates. raise I the acquisition remarks in to in

leverage for come So one-off the is, I it negative were Or your that my question with is debt? guess below market appetite these transactions has back? view

that are don't these rates I'm there's I that below-market of think I quoting. these Brad. don't I mean assumptions representative is that debt. in numbers are this John, cap think loan many

cap the these are reflective very where transactions of a rate few days recent some of gotten ago, And as we've of information.

rates in terms the X.X% from it, it really, again, in the I numbers current X% in now we're than low seeing range. been X.X% of yields. has mean what very cap to, are past. I call honestly, and of wider these that is is spread averaging the that mean, right spread So

terms where X% rates in debt it's in of high X%. the So are debt is the -- almost in range, today,

rate in a be able interest my they're down. a are So that years assumption back take where couple or in to fundamentals these either assuming run-up underwritings would refinance of the

market And levels is at willing because the this are to now? these transact you

Well, we're not.

that was we're that's transact, at this and range. $XXX in we transaction finance believe, we're And help nature, in that balance where our representative in able last to are based had at for so that acquisition, transacting. market year. forecast. ability point, has sheet rate, in high our example, comfortable the on a we not all find that fourth are where That's active to us hard to that yield be lease-up or If representative the X% acquisitions which ability strength, of to two are Raleigh of you cash a we'll cap opportunities perspective, the look quarter and of again, of selectively, price hit Raleigh things willing our we and million a level the in But that the then that yield. That's close properties Xs from been X% focusing a broad some to on at

maybe that on than it's My just are now different of at up ago, move buy has your of to and concession maybe surprising years the the market a of Okay. level, record a residents question, lot I a I out dynamics land in, cost about moving if is squeeze home. whether they're residents aware which given gone more few turnover second the is to came more anything are today used?. was not But or realize low the less could else mobile one or a there reluctant moving is

they've markets the all been the what But of at years. This of especially are demographics couple is sort I the the anything resident. consistent Tim, resident with We in John. don't different And pretty there's think look last average our much more given it where than buy particular, interest more a it's expensive you certainly, our rent. is about difficult now, in household it's if are look XX% to rates house. at

then cost very that. and difference consider all that's So a you significant moving and

out the as is we've seen couple plays down what that well. the And down move so to into rent certainly a than years it. in And of that's last reason increase or pretty significantly other

think and highest that job always historically our of -- the with things buying, I reason is two it driving those are transfer cost out. along which are move So primarily that's houses just by for

that's So combined driving with move-out think the I it down, increase.

Fargo. question of comes Wells line Jamie from the Feldman Your next with

changed? about Can you're in the expenses guidance the kind should for that be hit guess decline the thinking about to I the talk point side. as Are there out gear you're able item of first just outsized expense you And or confident year, we more less any want being on in rest to areas your quarter? may where of anything the to has the to? or shifting your just numbers more paying you attention things just

This Jamie. Sure, Clay. is

first significant, there the around what had damages The but saw were we unfavorable dialing it called of of number quarter had biggest what slight bit the around of for we was some property we some at in to nothing that we speaking and a out Just costs there. comments, the -- -- a really we storm the onetime outside that in a bit quarter. properties, was

are there, that what same some very well. through we're the As of in items but component at number, we that continue about expenses early the the forward feel are I of still really of line remainder trended still information for expenses, estate those, and real personnel what think year-over-year. Also, on it you we still a peg more and some X.XX% maintenance although mean, growth insurance come those feel line real were you to we we think expecting operating over expense there specifically we the more in our guidance and first manner And on. information expect quarter, rest much that stack, our we to items forth about costs, estate with those our going confident repair we about we before confident the still and year. that expenses about costs look expense as line to year, other set need when larger on touching tax smaller can will, about When

like of not outcome the Okay. what I kind like, but you're comfortable... sure pretty mean, there sounds it you're of so looks risk some on those, you all baked if in quite

probably pretty that of I'd say have more valuation majority a in. expenses dialed to with expense again, much well. taxes fair. around mean, Same bit insurance quarter, again, say we'll we've what In real in estate quarter And little second will late call. that. the as quarter, in the the for other that's early second third the line about I get

And are the buying, when to Or footprint, going may your or and got then in I guess and you've also portfolio Birmingham, think you we capital opportunities out cycle think you've those back you your Okay. X look to more? you guys are the you got grow in larger stick about if in thinking of put we MSAs -- access Kansas Fredericksburg. then maybe City, population, where Great. the in think And the and this more? years with you're about be as faster like opportunities no, markets up markets show build some the to you more types mean, cycle got Do about you've that's markets market supply-challenged the portfolio your you I the just seeing job larger want growth of exposure where footprint, also where work?

Brad. Jamie, this is

that's want the quite both you where noted look to mentioned. we're broadly our of comments, And where to mid-tier I as capital, the Tim's that our located he performing some larger speaking, as well of markets right we're in prepared mid-tier we are well regions at that think be deploy markets I is mean going now. high-growth as markets of what we some targeting.

larger Our markets.

those. We to are committed

as perform they it's for I of stream, story, looking combine components both the of well and those of when earnings together. think think our for, that our we part I diversification part we're

new generally both the last over So say growing. I buying are that I been purchased age average there just we in in would year. as that terms see the properties us years that lease-up, focus X also we say components on of you would would on has where XX focus

going follow broadly speaking, be are to going bit the opportunities the is. we areas of both going a That's those generally, we're properties where that will brand-new of be that on. are are these find. portfolio little to So But segments to supply our focus where

acquisitions, you the what you're deal? your What quick maybe the just when rent in are a on And modeling 'XX, that. 'XX, Okay. outlook? Like is guys follow-up underwriting 'XX, for time growth

deals be which market. it's in to would underwriting remember the new also to than our different have I on leases, existing leases portfolio. flattish. be based Yes, new but is all predominantly into our on the to that general, different 'XX say, But But leases acquisition, on are an going you we're portfolio, we're each generally is bringing that going

uptick going 'XX to and X, to on going and be XXXX be long-term to flattish a higher have than going 'XX positive are it's is So year averages average.

of from comes Goldvarg question next Your the line with Alexander Piper Sandler.

questions. Two

imagined. The overly expectations? was stronger as have Or would first is like jobs the guys jobs to you better you much have clearly, Just and the just definitely have job than is, were than collectively conservative everyone my truly question And been in believed guys originally it's to allowing because better expected? going anyone understand the handle to supply be case. others the difference, on what's than trying been much

job so slowdown was and more more sources of Well, to of is be. the prospects a we use demand horizon compile Obviously, or growth economy. of going there our the surrounding the year to ago, different a a in material what number the nervousness view

but home is seen and that underpinnings markets Belt hold factor a certainly the frankly, resulting decline just job about 'XX new the had have probably probably with on that or as has about employer slightly them to we has compared pretty jobs The believed employment resident these move-outs our what's buy and real associated surprising more of home. and surprising growth for to leaving go 'XX, long a behavior buying impact and people been in to demand market who moderation surprised in very similar terms growth happening speaking, in projections. We such trends employment us holding We our thinking about what for few have up. What years. coming and we've migration broadly broadly felt some the that to has been, the continued more the really good demand job in we've the weren't 'XX markets experienced to by up stability Sun last surrounding that

been the I for scenario variable home buying biggest So the has us. say probably would surprise

question crisis, decade -- the over market the back go to it's dumped transaction tough. you'd mean, And RTC in almost, the But transaction market. past sort really the days of or then I second assets I onto never to market lucrative. the And is Okay. it guess, be to have fairness, we've the credit seen for so since

a regulators side what being look, thinking and Because So lot XX do more years a it's On the what that was it more aren't there sense? assets think developers Is force are don't doing banks ago, or with in would sort guy like developers force the -- been. is if the that lending for bank maybe is them lenient they effort, a with your the don't it sale dealing saying, the just foreclosure, banks? has of the on good XX, getting a or to transact that sounds owners changed? have you pushed a

So have more you attribute would that happen? or that's to forcing to would regulators not out otherwise deals you the expected there that the to else something

Yes. This Brad. is

extended number of have The there's specifically I say, seen XX% one, would we're were XXXX. we pushed. I in components think was two loans, the saw number of coming XXXX. in due, We're loans last of a number that really that. I

component there think So occurred. has that, that a of I do is

that lending, longer have is I last their construction to loans their get X developers, there's been years, in than the years the over I construction in of new certain able months, that construction their they're lot little they able there of X to they a I them, into couple X in to they're ever times, are what their hitting how they're loans think on components if loans. And year, in a forced for think to bit more approached seen relative ratios, X extend in they're specifically, those loans. change get where to it allowing ability be built I think of sell have able term now a coverage runway certain term X that developers the are they're years. construction built have to to before before,

So I components are think addressing those really two that.

play has and impacted confidence to we haven't ability some seen environment has banks create remained that contrast hang of among couple that A And period was recession opportunity demand there of in if of have is to plentiful the is the that I compare buying is contrast forthcoming, sidelines like buying on real distress. secondly, that you merchant to that. the opportunities great We time. lot that out cycles I that then to you X,XXX that more financial as on was have try so strong. And to been at past off going well, Alex, can builders think considerably. the know there as strong. what a Eric. where is saying. in will, to because following And where much think the I'll you X thing demand a in is so negatively would people the lot the years. But I and when really pounce sort a point now very has an that play function out this Demand in real other bought of, things that past, here of And of fall historical that the fell we anytime this Brad cycles just demand thought compared a and environment, off. really to to to X-year add buying apartments coming were And that's XXXX, recession, capital ready the XXXX, be

so demand into think capital I the better I enabled strong jump a multifamily, to markets lot the of to And to has pricing just think what thought than backdrop ready Sun was investor up in likely some in happen. hold particularly of the people Belt

comes from Linda line the Our next Jefferies. Tsai of with question

side to the on if differently marketing Just higher the wondering traffic markets? supply drive doing in anything you're

really quite which we've our We're which what's you involved a things is in can neighborhood, with but market-by-market a to in community actually better as not the just be opposed and probably organically and our everything some we people site and unit website media experience and more the expensive. have for anything intended mean, But drive type at basis, able updated thing. I plans more of is sort differently there using to through IOSs, there necessarily it's all our Tim. bit types trying to want to This of back towards look to and social traffic the drive floor on that getting some and have traffic of be a to that and feel really thing. February, toward website end and more

really to a social think as technology getting media So in little channels. we about continuing we just expand use the involved there it's and how of how more as some well that

any to along lines, Any updates then there? And or those automation efficiency initiatives? highlight

think it talking not year. think I only ubiquitous years, that I that about demand but coming wrapping is full something been the can the initiative sort there's X do traffic what for continuing in initiative X, property down this that we're of I up home of or terms X, mean biggest over the smart next our will margin that way. that Yes. is WiFi. we've mean drive marketing we the highlight about increased talked There's costs we a one and in

of half X higher enhanced our on other been margin. Internet version with have or a the program now. for but of years, We even doing this half there's We've bulk property for opportunities X that

a I opportunity million there. think there's more $XX

as then that's opportunities as we portfolio contracts, the existing bulk. part next think those Just of we some on not renegotiate the there's on And of years. there huge several the I look over

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

appreciate questions at see you I'm NAREIT free us this most sure. reach of and Thank other out you. to everyone We joining morning, and feel for

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