» Subscribe Today!
More of what you want to know.
The Daily News

Forgot your password?
TDN Services
Research millions of people and properties [+]
Monitor any person, property or company [+]

Skip Navigation LinksHome >
VOL. 10 | NO. 22 | Saturday, May 27, 2017

Memphis-Based MAA Thriving As Demand for Rental Housing Grows

By Patrick Lantrip

Print | Front Page | Email this story | Email reporter | Comments ()

Since it was founded by George Cates in 1977, real estate investment trust MAA has grown from an upstart local business into a S&P 500 company with more than 100,000 units and total market capitalization of $16 billion.

MAA will occupy about 83,000 square feet in Gill Properties’ TraVure development in Germantown. The company has outgrown its current headquarters, located less than half a mile away on Poplar Avenue. (Memphis News/Patrick Lantrip)

Now, fresh off of its $4 billion merger with Atlanta-based rival Post Properties Inc., the company formerly known as Mid-America Apartment Communities Inc. is set to make a move of its own – consolidating its corporate headquarters into the TraVure mixed-use development, currently under construction in Germantown.

MAA announced last fall its plans to move into the Gill Properties development at 6815 Poplar Ave., less than half a mile from its current headquarters at 6584 Poplar.

The company will occupy about 83,000 square feet of TraVure’s five-story, 150,000-square-foot office building – part of a larger development that also includes a five-story parking garage, co-branded hotel, and restaurant and retail space.

The move will bring together MAA’s 200 corporate employees, which currently are spread between its 43,000-square-foot headquarters and an additional 18,000 square feet of office space MAA is leasing inside the Ridgeway loop.

“We felt it was important to bring everyone together under one roof for many reasons,” said Jennifer Patrick, MAA senior analyst, investor relations. “Chief among these was to enhance our efficiency of operations, to improve communications and to preserve our culture of service and teamwork.”

MAA founder George Cates bought the company’s current headquarters, 6584 Poplar Ave., in 1979. (Memphis News/Patrick Lantrip)

MAA expects some efficiencies to come with the Post Properties merger itself. When the deal closed in December, MAA said it would save the combined company $20 million in overhead costs and the elimination of duplicative costs associated with being separate public companies.

The firm retained the name MAA and is continuing to trade under the NYSE ticker symbol MAA.

Though the decision to relocate to TraVure was made prior to the Post merger, Patrick said the deal added 20,000 units to the company’s portfolio and made the decision even more important.

“We began the exhaustive search process for our new location in 2015,” she said. “At that time, we had completed $1.7 billion in acquisitions in five years and had completed our $4 billion merger with Colonial Properties Trust, which nearly doubled our ownership of apartment units.”

The combination with Birmingham, Alabama-based Colonial in 2013 created the second-largest multifamily real estate investment trust in the country, with 85,000 units in its portfolio.

MAA chairman and CEO Eric Bolton told The Daily News in June 2013, in the midst of the Colonial merger, that putting the combined company’s headquarters here would probably result in “some job growth,” but that MAA would likely be able to accommodate the additional employees at the company’s current office.

However, by 2015, the company announced it was starting to outgrow its 43,000-square-foot building – which Cates had purchased in 1979, just two years after founding the firm – and was proactively looking for space to grow.

The decision to lease additional office space has been a stopgap measure.

“Our current headquarters did not have enough office or parking space to accommodate our teams, which required us to seek a temporary solution of renting additional space nearby,” she said.

Another contributing factor that has led MAA on a path of growth is the current rise in demand for rental housing.

“The cohort that rents the most for us is the millennials who are in the 20- to 35-year-old age group,” Patrick said. “There has been significant growth in this demographic and they have the highest propensity to rent their housing.”

That, in turn, is having a ripple effect in the multifamily market, according to Ed Thomas, vice president of Office and Retail Services for Colliers International’s Memphis office.

“Kids just aren’t coming out of college and buying houses anymore,” he said. “People are getting out of school and wanting to rent.”

An example of this demand in action is the recent Highland Row multi-use development near the University of Memphis.

“They were signing 10 or 12 leases a week when they first opened,” said Thomas, who handled the leasing for some of the restaurants in the bottom floor of the development. “The millennials want to live in a spot where they can walk out of their front door and find entertainment at any given moment.”

The growth of the multifamily sector in MAA’s own backyard was one of the contributing factors that made it an easy decision to stay in the Memphis area when it was time to expand.

“Memphis is our home and we have deep roots here,” Patrick said of the Sunbelt-focused REIT. “We want to continue to invest in the people and the community that have supported us so well here in the Mid-South.”

PROPERTY SALES 36 154 6,546
MORTGAGES 34 94 4,129
BUILDING PERMITS 201 554 15,915
BANKRUPTCIES 43 126 3,396