Leslie Shaver
4 min read
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Like its REIT peers, MAA beat expectations in the first quarter. However, that overperformance didn’t change its outlook for the rest of 2025.
“Despite the beat, management maintained guidance, following the lead of others given the uncertain macro [environment],” wrote Alexander Goldfarb, managing director and senior research analyst for investment bank and financial services company Piper Sandler, in a report shared with Multifamily Dive.
Still, President and CEO Brad Hill said the Memphis-based REIT is well-positioned to handle market turbulence.
“While macroeconomic uncertainties have increased due to the potential tariffs, our exclusive focus on high-growth markets; lower average price point; broad diversification by market, submarket and price point; our operating efficiencies and scale should position MAA to weather tariff or economic challenges and allow us to take advantage of growth opportunities that may arise,” Hill said.
In Q1, MAA’s markets — many of which have been hit with high levels of apartment supply over the past couple of years — continued to show improvement. Still, those metros probably won’t see a full recovery this year.
MAA reported improving turnover at 41.5% in Q1. Two years ago, that rate sat at 46%. “That 5% reduction is a long-term trend that I think will stay low, and … there are significant implications for that,” Hill said.
Improved turnover boosted renewal rents, which grew 4.5% on a lease-over-lease basis. MAA expects that trend to continue.
“Encouragingly, on the renewals, May and June look really strong and [we’re] sending out July right now, which we expect to be strong as well,” MAA Chief Strategy and Analysis Officer Tim Argo said on the earnings call. “So we think the renewals will continue to have a bigger part of that mix. We continue to see the renewal acceptance rates be stronger than what they were last year.”
|
Category |
Q1 |
YOY Change |
|
Property revenues |
$518.8 million |
0.1% |
|
Net operating income |
$332.8 million |
-0.6 |
|
Operating expenses |
$186 million |
1.2% |
|
Funds from operations |
$2.21 |
-8.3% |
|
Rent per unit |
$1,690 |
-0.6 |
|
Occupancy rate |
95.6% |
30bps |
SOURCE: MAA
Elevated supply in many of the REIT’s markets continued to pressure new lease rents, which fell 6.3% on a lease-over-lease basis in Q1. Blended leases fell 0.5% YOY.
