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VOL. 133 | NO. 25 | Friday, February 2, 2018

MAA Releases Fourth-Quarter Results

By Patrick Lantrip

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Memphis-based real estate investment trust MAA wrapped up what chief operating officer Tom Grimes called a “year of significant change for our organization” by reporting fourth-quarter net income of $122.5 million, or $1.08 per diluted common share.

The Q4 2017 results, released Wednesday, Jan. 31, compare with $39.1 million in net income, or 44 cents per share, a year ago.

The increase was largely attributed to the $68.3 million, or 60 cents per share, that resulted from the sale of various real estate assets. Costs related to the Post Properties merger totaling $5.5 million, or 5 cents per diluted share, were also factored into the fourth-quarter 2017 results.

“We started 2017 with two completely different operating platforms and teams,” Grimes said Thursday, Feb. 1, during an earnings call with analysts. “We are pleased that the bulk of the integration work of the Post portfolio is now behind us. We are starting 2018 with a much more aligned and cohesive operating platform and team.”

For comparison, the results for the fourth quarter 2016 only included $31.8 million, or $0.36 per diluted common share, of gains related to the sale of real estate assets, while $36.9 million, or $0.42 per diluted common share, of costs related to the Post Properties Merger were reported.

For the entirety of 2017, MAA reported $324.7 million, or $2.86 per diluted common share, in net income, which is up from $211.9 million, or $2.69 per diluted common share, for 2016.

The 2017 results included $127.4 million, or $1.12 per diluted common share, in gains garnered from the sale of various assets, and $20.0 million, or $0.18 per diluted common share, in costs related to the Post Properties Merger.

Comparatively, the 2016 results included $82.6 million, or $1.05 per diluted common share, in real estate sales and $40.8 million, or $0.52 per diluted common share, of merger and integration costs.

MAA’s fourth quarter acquisitions included Acklen West End, a newly developed 320-unit apartment community in Nashville’s Downtown/West End submarket they acquired for $71.8 million.

Conversely, MAA sold apartment communities in Atlanta, Georgia, Terraces at Fieldstone, a 316-unit community, and Terraces at Towne Lake, a 502-unit community, for a combined $97.4 million, which resulted in total net gains of approximately $68.3 million.

In terms of construction, had three development communities under construction in the fourth quarter, including two new development communities and one expansion project. The three developments carried a projected price tag of $214.0 million, $46.3 million of which remained to be funded as of the end of the fourth quarter.

Additionally, MAA redeveloped a total of 1,832 units at an average cost of $6,503 per unit during the fourth quarter of 2017, which brought the total units renovated during 2017 to 8,375, at an average cost of $5,463.

“Our development pipeline continues to deliver new earnings growth at attractive yields,” Tim Argo, senior vice president of finance for MAA said. “And while both our development portfolio and lease-up properties represent a drag on earnings in 2018, with almost 2,500 units, this pipeline will become increasingly productive in 2019.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 74 74 17,458
MORTGAGES 93 93 20,128
FORECLOSURE NOTICES 9 9 2,654
BUILDING PERMITS 126 126 36,072
BANKRUPTCIES 63 63 11,227
BUSINESS LICENSES 32 32 5,741
UTILITY CONNECTIONS 0 0 6,715
MARRIAGE LICENSES 51 51 3,967