VOL. 130 | NO. 147 | Thursday, July 30, 2015
MAA Reports Surging Profits
By Amos Maki
Mid-America Apartment Communities Inc. reported a banner second quarter highlighted by surging profits.
Fueled by strong leasing conditions in high-value markets and strategic sales, the real estate investment trust reported net income of $136.3 million, or $1.81 per share, a company record. That’s compared to $31.6 million, or 42 cents per share, over the same period a year ago.
Core funds from operations – a key stat that defines a REIT’s cash flow from operations – reached $1.36 per share in the quarter, a 15 percent jump from the year-ago quarter and a record for the company.
Memphis-based MAA, which buys, manages and sells apartment communities, said revenue rose to $258.9 million, up 5.6 percent over the same three-month period a year ago.
"Leasing conditions across our high-growth markets coupled with the opportunities captured from our merger transaction closed in late 2013 continue to generate strong results," said MAA chairman Eric Bolton in a statement. "Delivery of new apartment product across a number of our markets is being well absorbed by the growing demand for apartment housing."
In October 2013, MAA completed its nearly $2.2 billion acquisition of Birmingham-based Colonial Properties, a deal that created the second-largest apartment-focused REIT in the country.
Notable transactions in the quarter include the acquisition of a 325-unit apartment community in Scottsdale, Arizona, and a 254-unit apartment community in Richmond, Virginia. The real estate investment trust has sold 21 apartment properties for $354.3 million, which improved the company's results by $105.4 million.
“We're pleased with the results captured from our planned property sales for the year,” Bolton said during a Thursday, July 30, conference call. “The capital recycling being completed this year, coupled with the significant recycling activity over the past few years, has the company well positioned to capture the benefits of the robust leasing environment and the full cycle performance objective that drives our strategy."
Bolton did not rule out more strategic sales during the call but said the company was in no hurry to dispose of additional communities.
“We feel pretty good about where we have the portfolio at this point,” Bolton said.
“We don’t feel any pressure to accelerate as we move forward now,” he said. “Having said that, we’re always going to look at opportunities to cycle capital.”
MAA, which employs 2,220 across the U.S., including roughly 200 in Memphis, acknowledged in June that growth has caused the company to tap Cushman & Wakefield/ Commercial Advisors to review its long-term office needs. MAA currently has its headquarters in a 43,000-square-foot office building at 6584 Poplar Ave. which company founder George E. Cates developed in 1979.