Mid-America Apartment Communities Q4 Earnings Call Highlights

Mid-America Apartment Communities (NYSE:MAA) said fourth-quarter 2025 results came in as expected as the company began to see signs of an operating recovery despite what management described as still-elevated supply across its markets. Executives pointed to improving occupancy, year-over-year improvement in blended lease performance, and continued strong resident retention and collections as key indicators heading into 2026.

Fourth-quarter operating trends: occupancy up, blended leasing improves

MAA reported that fourth-quarter Core FFO was $2.23 per diluted share, in line with the midpoint of its guidance, and full-year 2025 Core FFO was $8.74 per share. Management said fourth-quarter Core FFO met expectations “despite continued elevated supply levels.”

On operating metrics, average physical occupancy was 95.7%, up 10 basis points from both the fourth quarter of 2024 and the third quarter of 2025. Blended rates improved 40 basis points year-over-year, which management attributed to a 50 basis point improvement in renewal rates and flat new lease rates.

Collections remained strong, with net delinquency at 0.3% of billings for the quarter, consistent with the full-year collection performance.

Market performance: strength in mid-tier markets, Austin remains weakest

Management highlighted several mid-tier markets—particularly in Virginia and South Carolina—as outperformers, citing Charleston, Greenville, Richmond, and the Washington, D.C.-area markets as demonstrating strong pricing power and occupancy.

Executives also said the company’s two largest exposure markets, Atlanta and Dallas, showed year-over-year improvement. Along with Denver, those markets posted the largest year-over-year improvement in blended pricing among MAA’s top 20 markets for the quarter.

Austin was described as the company’s weakest market on pricing, with management pointing to the cumulative delivery of 25% of inventory over the last four years as the key driver.

Supply backdrop and leasing outlook: decelerating deliveries and renewal strength

Looking to 2026, management said it expects improving revenue momentum throughout the year, particularly in new lease rates. The company expects an improvement versus 2025 of 110–160 basis points in blended lease rates and an 85 basis point improvement in effective rent growth, as described in prepared remarks.

Executives emphasized that new deliveries are decelerating sharply, with management stating deliveries are expected to be down over 60% in 2026 from the peak, while new starts have been muted for nearly three years and are down nearly 70% from peak levels. The company also cited record retention, improving rent-to-income ratios, and continued immigration and wage gains as supportive demand factors.

Management said renewal strength has carried into early 2026, with renewal lease-over-lease growth rates for January through March accepted renewals all running above 5%, compared with 4.5% in the first quarter of 2025. The company’s 2026 guidance assumes renewal pricing in the 5%–5.25% range.

On the cadence of 2026 leasing, management said it expects normal seasonality—strength into the summer and moderation later in the year—but with less steep late-year declines than typical as the market moves further from peak supply. The company also said it is not providing month-by-month new lease rate detail, but expects the year-over-year improvement in new lease pricing to become more pronounced later in 2026.

When asked about turnover assumptions embedded in guidance, management said it expects turnover to remain consistent with last year, with no indications it will rise.

Investment, redevelopment, and development pipeline updates

MAA said it plans to expand capital investments in repositioning and redevelopment by more than 10% in 2026, citing fewer competitive units in lease-up and continued single-family affordability challenges that keep move-outs to homeownership near historical lows.

• Renovations: The company completed 1,227 interior upgrades in the fourth quarter and 5,995 for full-year 2025. Renovated units achieved $95 higher rent than non-upgraded units and delivered a 19% cash-on-cash return. Management said renovated units leased about 11 days faster than non-renovated units after adjusting for added turn time.
• Amenities/common-area repositioning: Management said six recent projects were over 70% repriced on average, with an average NOI yield above 10%. Five more projects are underway with anticipated repricing in mid-2026, and six additional properties are targeted to begin later in 2026 for repricing in 2027.
• Community-wide Wi-Fi: Vendor and equipment delays slowed progress, but MAA said 14 of 23 projects started in 2025 were live, with the remaining nine expected to go live in the first quarter.

On development, management said the active pipeline stands at $932 million. During the fourth quarter, MAA purchased a shovel-ready project in Scottsdale, Arizona, which management said came from a developer unable to secure equity after three years of due diligence. In the first quarter of 2026, MAA also purchased land in the Clarendon neighborhood of Arlington, Virginia, with plans to begin construction later in 2026 on a 287-unit community.

The company expects stabilized NOI yields of 6%–6.5% on its development, which management said is “well above current market cap rates.” Subject to market conditions, MAA expects to start construction on five to seven new development projects in 2026 that would deliver into what it believes will be a stronger operating environment in 2028 and 2029.

Management acknowledged current development deliveries are being pressured by elevated concessions and longer lease-up periods. The company said these factors have pushed the “full earnings contribution” from lease-ups out by about a year, although it still expects those projects to reach underwritten yields as conditions improve. Management added that on existing lease-ups, recurring rents in place were 2% above pro forma, and renewal rent growth on those properties was described as in the low double digits, signaling to executives that concessions are temporary.

Balance sheet, capital allocation, and 2026 guidance

MAA ended the quarter with $880 million in combined cash and revolver borrowing capacity and a net debt-to-EBITDA ratio of 4.3x. Outstanding debt was about 87% fixed, with an average maturity of 6.4 years and an effective rate of 3.8%.

In November, the company issued $400 million of seven-year public bonds at an effective rate of just over 4.75%, using proceeds to repay commercial paper borrowings that had been used to address a November 2025 bond maturity.

MAA also repurchased 207,000 shares at a weighted average price of $131.61, which management said was its first share repurchase since 2001. Executives framed the decision as driven by a “persistent and sizable discount” in the public share price relative to private-market values, while noting the company’s broader capital priorities include development and internal investments, limiting capacity for large buybacks.

For 2026, MAA guided Core FFO to $8.35–$8.71 per share, with a midpoint of $8.53. The company’s same-store assumptions include:

• Same-store revenue growth: 0.55% at the midpoint, driven by a rental pricing earn-in of -0.2% and a blended rental pricing expectation of 1%–1.5%.
• Effective rent growth: approximately 0.35% at the midpoint.
• Average occupancy: 95.6% at the midpoint.
• Other income growth: just over 2%, primarily reimbursements and fees.
• Same-store expense growth:2.65% at the midpoint; personnel costs expected to rise by less than 2%, with continued pressure expected from utilities, marketing, and office operations.
• Same-store NOI: projected to decline 0.75% at the midpoint.

Management expects the non-same-store portfolio to contribute $0.19 in NOI in 2026. The company also anticipates external growth funding of $350 million–$450 million from debt financing and internal cash flow, and expects to “match fund” $250 million of acquisitions with dispositions. Executives said the external growth program is expected to be slightly dilutive to Core FFO in 2026 before turning accretive after stabilization.

MAA projects overhead expenses of $136 million, up 5% from 2025. The company expects to refinance $300 million of bonds maturing in September 2026 that carry an effective rate of 1.2%, and it plans to redeem outstanding preferred shares in the second half of 2026. Management said these actions and related financing needs are expected to drive incremental interest expense of over $0.05 and lift total interest expense by over 15% in 2026.

Executives noted that Winter Storm Fern impacted about 70% of the portfolio and reduced leasing traffic for several days, but said January ended with physical occupancy of 95.6% and 60-day exposure of 7.1%, in line with the same time last year. Management said it is still assessing the storm’s impact and anticipates excluding storm-related impacts from Core FFO due to expected insurance proceeds covering a portion of damages.

Separately, the company addressed the RealPage multi-district litigation settlement, stating it involved no admission of wrongdoing or liability and does not require material changes to business operations. Management said the settlement was intended to reduce distraction and uncertainty, and noted two ongoing state attorney general matters remain in process.

About Mid-America Apartment Communities (NYSE:MAA)

Mid-America Apartment Communities, Inc (NYSE: MAA) is a publicly traded real estate investment trust (REIT) specializing in the acquisition, development, redevelopment and operation of multifamily residential properties. The company focuses on high-barrier-to-entry apartment communities, offering a mix of one-, two- and three-bedroom homes designed to meet the needs of diverse renter demographics. Its integrated business model encompasses property management, leasing, maintenance and customer service, providing residents with a comprehensive living experience under one ownership platform.

MAA’s portfolio comprises more than 100 communities and over 40,000 apartment homes across key Sun Belt markets.