This is Andrew Schaeffer, Treasurer and Director of Capital Markets for MAA. We encourage you to refer to the forward-looking statements section in yesterday's earnings release and our '34 Act filings with the SEC, which describe risk factors that may impact future results. A presentation of the most directly comparable GAAP financial measures, as well as reconciliations of the differences between non-GAAP and comparable GAAP measures, can be found in our earnings release and supplemental financial data. Our earnings release and supplement are currently available on the For Investors page of our website at www.maac.com.
In an attempt to complete our call within one hour due to other earnings calls today, we will limit questions to one per analyst. As demand remains resilient and new deliveries continue to decline, we expect the recovery to expand and accelerate. We continue to focus on expense control, and with second quarter year-over-year same-store operating expense growth of just 80 basis points, the teams are excelling in this area. At the same time, the persistent single-family affordability and availability challenges are supporting resident demand for affordable and high-quality rental housing, two areas where MAA excels.
Our customer service focus continues to differentiate the MAA experience, driving increased resident loyalty and contributing to our record low turnover and strong renewal rate growth, improving 50 basis points year-over-year. Our property-wide Wi-Fi initiative is in high demand from our residents and is performing well. On the external growth front, the improving demand supply dynamic, combined with the decreased availability of capital for new projects, makes disciplined investing in new developments an attractive capital allocation option. The acquisition market remains slow, with Cap rates in the mid to upper 4% range for high-quality communities that fit our profile.
| Metric | Period | Current guidance |
|---|---|---|
| Core FFO per share (midpoint) | FY2026 | $8.53 (maintained; expense/non-same-store favorability offsets a lower revenue outlook) |
| Same-store effective rent growth | FY2026 | Slightly reduced to reflect a slower new-lease pricing recovery |
| Same-store average occupancy | FY2026 | Slightly reduced |
| Same-store total operating expense growth | FY2026 | ~1.75% (guide cut ~90 bps at the midpoint on lower taxes, insurance and personnel/R&M costs) |
| Full-year blended lease pricing | FY2026 | ~0.5% for the full year; ~0.6% implied for the back half (Q3 blended expected to beat Q2, Q4 to beat Q1) |
| Development starts | FY2026 | On track for four development starts (Kansas City done; Nashville started in July; Northern Virginia in August; one more later in the year) |
| Metric | YoY | Note |
|---|---|---|
| Core FFO per diluted share | $2.08 (beat guidance midpoint by $0.02) | Same-store expense favorability of $0.015 plus ~$0.01 of non-same-store NOI, partially offset by slightly soft same-store revenue. |
| Revenue (GAAP) | +1.0% to $555M | Modest top-line growth as blended pricing recovers slowly against elevated supply, with expense discipline carrying the earnings beat. |
| GAAP diluted EPS | $1.04 | Net income per share for the quarter (REITs are managed on Core FFO, reported here at $2.08/share). |
| Same-store operating expense growth | +80 bps | Strong cost control on repair-and-maintenance and personnel, full staffing, and higher retention reducing turn costs. |
| Blended lease-over-lease pricing | +100 bps vs Q1; +20 bps vs Q2'25 | New-lease pricing up 170 bps sequentially and renewals at 5.2%, with roughly 80% of markets posting positive blends. |
| Resident turnover | 39.6% (record low) | Strong resident health, high satisfaction and renewal retention above both Q2 and prior-year Q3 levels. |
| Interior renovation cash-on-cash return | ~25% (vs 19% expected) | 3,504 units YTD (+30% YoY) at ~$5,134/unit spend earning $110 of incremental monthly rent over non-upgraded units, leasing ~10 days faster. |
| Net debt / EBITDA | 4.5x | Solid balance sheet with over $880M of cash and revolver capacity, 6-year average maturity at a 3.9% effective rate. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| New-lease pricing recovery cadence | Recovery underway but pressured by supply | Management expects Q3 blended pricing to exceed Q2 — a break from the last four years when Q3 typically trailed Q2 — on higher renewal retention (~98% of Q3 renewals locked), 10-15% higher lead volume, ~10% higher visit volume, and easier prior-year comps (last year new-lease pricing fell 70 bps July-August and 140 bps August-September). | — |
| Supply moderation and absorption | Unprecedented supply deliveries pressuring high-concentration markets | New starts have trailed long-term averages for 13 straight quarters and are projected to stay low for at least three years; Q2 absorption ran 1.8x deliveries, and management sees no uptick in starts because equity capital for new development remains scarce. | — |
| Capital allocation discipline | Balanced approach across development, buybacks and recycling | Development remains the top priority (targeting a ~$1B pipeline, currently ~$804M pro forma; new-project yields 6.25-6.5%), with $50M of buybacks (383K shares at $130.66), disposition proceeds roughly matching buybacks, and a $350M delayed-draw term loan to cover a $300M September maturity. | — |
| Accretive internal-growth programs | Scaling renovations, repositioning and Wi-Fi | Interior renovations up 30% YoY at ~25% returns, common-area/amenity repositioning earning ~13% cash-on-cash, and community Wi-Fi expanding from 28 to an additional 38 properties — all set to expand further in 2027 as new deliveries stabilize (new-community rents run ~30% above existing rents). | — |
| Market diversification strategy | Large + mid-tier Sun Belt exposure | Mid-tier markets are outperforming with less supply pressure; Virginia and South Carolina (Norfolk, Richmond, Charleston, Greenville, D.C.) lead, Atlanta and Dallas outperform, and Austin/Orlando show improving momentum, while management continues to evaluate demand-driven new markets such as Columbus, Ohio. | — |
| Resident financial health | Healthy resident base | Rent-to-income improved to a multi-year-best 18%, collections strong with 0.3% net delinquency, supporting demand for MAA's affordable, high-quality housing amid persistent single-family affordability challenges. | — |