Mid-America Apartment Communities, Inc (MAA) Q4 2025 Earnings Call Transcript

Mid-America Apartment Communities, Inc (NYSE: MAA) Q4 2025 Earnings Call dated Feb. 05, 2026

Corporate Participants:

Andrew Schaeffer — Senior Vice President, Treasurer and Director of Capital Markets

Bradley Hill — President, Chief Executive Officer

Clay Holder — Executive Vice President, Chief Financial Officer

Timothy Argo — Executive Vice President, Chief Strategy & Analysis Officer

Analysts:

Unidentified Participant

Nicholas Yulico — Analyst

Eric Wolfe — Analyst

Jamie Feldman — Analyst

Jana Galan — Analyst

Haendel St. Juste — Analyst

Steve Sakwa — Analyst

Linda Tsai — Analyst

Alexander Goldfarb — Analyst

Buck Horne — Analyst

Brad Heffern — Analyst

John Kim — Analyst

Austin Wurschmidt — Analyst

Richard Hightower — Analyst

Mason Guell — Analyst

Alexander Kim — Analyst

Ann Chan — Analyst

Julien Blouin — Analyst

Presentation:

operator

Good morning ladies and gentlemen and welcome to the MAA fourth quarter and full year 2025 earnings conference call. During the presentation all participants will be in a listen only mode. Afterwards the company will conduct a question and answer session. As a reminder, this conference call is being recorded today, February 5, 2026. As a reminder, in consideration of time we have a one I will now turn the call over to Andrew Schaefer, Senior Vice President, Treasurer and Director of Capital Markets of MAA for opening comments.

Andrew Schaeffer — Senior Vice President, Treasurer and Director of Capital Markets

Thank you Julianne and good morning everyone. This is Andrew Schaefer, Treasurer and Director of Capital Markets for maa. Members of the management team participating on the call this morning are Brad Hill, Tim Argo, Clay Holder and Rob Delprardi. Before we begin with prepared comments this morning, I want to point out that as part of this discussion we Company Management will be making forward looking statements. Actual results may differ materially from our projections. 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.

During this call we will also discuss certain non GAAP financial measures. A presentation of the most directly comparable GAAP financial measures as well as reconciliations of the differences between non GAAP and comparable GAAP benefits. 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@www.maac.com. a copy of our prepared comments and audio recording of this call will also be available on our website later today. After some brief prepared comments, the management team will be available to answer questions when we get to Q and A.

Please be respectful of everyone’s time and attempt to complete our call within one hour. Due to other earnings calls, we will limit questions to one per analyst. We ask that you rejoin the queue if you have any follow up questions or additional items to discuss. I will now turn the call over to Brad.

Bradley Hill — President, Chief Executive Officer

Thank you Andrew and good morning everyone. As highlighted in our release, our fourth quarter core FFO results met expectations despite continued elevated supply levels with occupancy up 10 basis points and same store blended lease over lease performance 40 basis points stronger year over year. The recovery in fundamentals is underway. As we look ahead we are entering 2026 in a stronger position with a higher earn in and more top line revenue momentum that we expect to build throughout the year particularly in new lease rates, driving an anticipated 110 to 160 basis point improvement in blended lease rates and an 85 basis point improvement in effective rent growth compared to 2025.

While uncertainty remains in the broader economy, the level of uncertainty appears lower than what we navigated in 2025. Supported by expectations for sustained GDP growth, several of last year’s major headwinds are showing signs of easing. At the same time, the economy should benefit from the working families tax cut, easing inflationary pressure and improving consumer sentiment which is showing signs of recovering from multi decade lows. Looking at our portfolio, rent to income ratios have improved, making rents more affordable. New deliveries are decelerating Sharply, down over 60% in 2026 from the peak and new starts are muted and have been for nearly three years, down nearly 70% from peak levels.

Against this improving backdrop, we anticipate demand. Across our markets to remain solid and. Broad based, supported by stable job growth, continued in migration, healthy wage gains and record levels of resident retention. These trends point to a financially healthy resident base supporting our consistently strong collections, reinforcing the durability of our revenue profile and suggesting that absent a meaningful shift in the broader economy, underlying demand conditions remain well supported. Building on this foundation, our long term earnings growth will benefit from numerous strategic investments we’re making. This includes expanding our technology initiatives such as community wide WI fi and other enhancements designed to elevate the resident experience and improve operational efficiency. Our residents value our communities and the exceptional service our teams provide reflected in record retention levels, strong renewal rates and sector leading resident Google scores averaging 4.7 out of 5 for the year.

Persistent single family affordability challenges combined with favorable demographic trends continue to support renter demand and keep move outs to purchase a home near historical lows. These trends, along with fewer competitive units in lease up, support strong returns from our repositioning and redevelopment projects. As a result, we’re expanding our capital investments in these areas by more than 10% in 2026. Beyond these investments, we continue to grow our development pipeline by leveraging our strong balance sheet and development capabilities to invest early to take advantage of growth opportunities at a time when access to capital is more limited for others.

As such, during the fourth quarter we purchased a shovel ready project in Scottsdale, Arizona from a developer that was unable to line up equity for their project after three years of due diligence, bringing our active development pipeline to $932 million. Additionally, during the first quarter of 2026 we purchased a land parcel in the Clarendon Neighborhood of Arlington, Virginia and expect to start construction on a 287 unit apartment community later this year. As demand remains robust, new deliveries slow and new starts track well below historical levels across our region. Our development should continue to generate strong returns and earnings growth with stabilized NOI yields between 6 and 6 and well above current market cap rates.

Subject to market conditions, we expect to begin construction on five to seven new development projects in 2026 that should deliver into a much stronger operating environment than the one experienced over this past year. Additionally, our balance sheet provides the flexibility to pursue compelling acquisition opportunities as they materialize. We remain encouraged by the progress we’re seeing across our portfolio. With more than 30 years of navigating economic cycles, we believe we are well positioned to serve our residents and to deliver compounded earnings growth over the full cycle. As market conditions continue to strengthen, improving fundamentals coupled with our strategic investments should provide meaningful opportunities to enhance performance and support a stronger revenue trajectory over the next few years.

To all our associates across our properties and corporate offices, thank you for your continued commitment to customer service. With that, I’ll turn the call over to Tim.

Timothy Argo — Executive Vice President, Chief Strategy & Analysis Officer

Thank you Brad and good morning everyone. For the fourth quarter, the key operating fundamentals of pricing and occupancy combined were in line with expectations. New lease growth continues to be muted due to the moderating but still elevated supply picture combined with the normal seasonal slowdown in the fourth quarter. We did however continue that strong retention and renewal lease rates and achieve sequentially improved average physical occupancy as compared to the fourth quarter of 2024. Blended rates improved 40 basis points supported by a 50 basis point improvement in renewal rates and flat new lease rates. Average physical occupancy was 95.7% which was a 10 basis point improvement from both the fourth quarter of 2024 and the third quarter of 2025.

Additionally, we had another quarter of strong collections with net delinquency representing just 0.3% of BUILD grants in line with the collection performance for the full year. While we broadly saw normal seasonality in pricing during the fourth quarter, many of our mid tier markets, particularly in Virginia and South Carolina, continue to be outperformers relative to the portfolio. Charleston, Greenville, Richmond and the D.C. area markets all demonstrated strong pricing power and strong occupancy in the quarter. Encouragingly, our two highest concentration markets, Atlanta and Dallas continue to show improvement as compared to the prior year. Of our top 20 largest markets, these two along with Denver had the largest year over year improvement in blended pricing as compared to the fourth quarter of last year.

Austin continues to be our weakest market in terms of pricing as it continues to work through the 25% of inventory that has been delivered cumulatively over the last four years. In our lease up portfolio, MAA Vail and the Raleigh Durham Market reached stabilization in the fourth quarter. We now have three properties remaining in lease out with a combined occupancy of 65.7% as of the end of the fourth quarter and an additional three development properties that are actively leasing units. Elevated concessions and longer lease up periods continue to have a greater impact on the lease out properties and have pushed the full earnings contribution from these out about a year.

However, these projects are still expected to achieve our underwritten yields as markets continue to improve and retained a long term value creation opportunity. Despite the overall leasing velocity being behind original expectations, we continue to progress on our various targeted redevelopment and repositioning initiatives in the fourth quarter and as Brad mentioned, expect to accelerate each of these programs in 2026 with improving fundamentals. During the fourth quarter of 2025 we completed 1,227 interior unit upgrades bringing the total for the year to 5,995 units renovated with rent increases of $95 above non upgraded units and a cash on cash return of 19%.

Despite this more competitive supply environment for the full year these units lease on average 11 days faster than non renovated units. When adjusted for the additional turn time for our common area and amenity repositioning program, we are on average over 70% repriced at six recent projects with an average NOI yield above 10% and rent growth far exceeding peer MAA Properties. Five additional projects are well underway with anticipated repricing in mid-2026 during the prime leasing season. We have targeted an additional six properties to begin later this year that will reprice in 2027. While vendor challenges and equipment delivery delays have slowed progress on our community wide WI FI retrofit project, we relied on 14 of the 23 projects started in 2025 with the remaining nine expected to go live in the first quarter.

Similar to our redevelopment plans, we expect to expand this initiative in 2026 offset. Looking forward to 2026, we are well positioned. While Winter Storm Fern did impact about 70% of our portfolio and slow traffic for several days, we ended January with physical occupancy of 95.6% and 60 day exposure 7.1%, both in line with this time last year. As Brad referenced, new supply pressures continue to moderate and demand remains strong with market level occupancies including lease ups in our markets well above where they were this time last year. Strong renewal performance continues in the first quarter with high retention rates and lease over lease growth rates on renewals accepted for January, February and March all above 5%.

This compares to the 4.5% we achieved in the first quarter of 2025. We expect gradual seasonal improvement in new lease rates along with consistent renewal growth will drive improved performance in 2026 and be particularly impactful to 2027 as pressure from supply subsides throughout the year. That’s all I have in the way of preparing comments now. I’ll turn the call over to Clay.

Clay Holder — Executive Vice President, Chief Financial Officer

Thank you Tim and good morning everyone. We reported core to for the quarter of $2.23 per diluted share, which was in line with the midpoint of our fourth quarter guidance and contributed to core FFO for the full year of $8.74 per share. Fourth quarter same store NOI was in line with our guidance as same store revenues were $0.01 unfavorable due to other revenues and pricing offset by same store expenses favorable by $0.01 due to office operations, repair and maintenance and real estate taxes. Favorable interest expense was offset by overhead expenses and operating performance from our non sync store portfolio.

During the quarter we funded approximately $81 million in development costs for our current $932 million pipeline, leaving an expected $306 million to be funded on the current pipeline over the next three years. As Brad noted, our balance sheet remains well positioned to support these and other future growth opportunities. At the end of the quarter we had $880 million in combined cash and borrowing capacity under our revolving credit facility and our net debt to ebitda ratio was 4.3 times. At quarter end our outstanding debt was approximately 87% fixed with an average maturity of 6.4 years at an effective rate of 3.8%.

During November we issued $400 million of seven year public bonds at an effective rate of just over 4.75%, using proceeds to repay borrowings under our commercial paper program which were used to repay the November 20252025 bond maturity. During the quarter we repurchased 207,000 shares at a weighted average share price of $131.61, our first repurchase since 2001. Finally, we provided initial earnings guidance for 2026 in our release, which is detailed in the Supplemental Information Package. Floor FFO for 2026 is projected to be $8.35 to $8.71 or $8.53 per. Share at the midpoint of as was. Outlined in the prior comments. With the continuing improvement in supply impacting our markets coupled with solid demand fundamentals. We expect rental pricing to grow during the year and to drive improving earnings performance as we progress throughout the year. Projected 2026 thanks to a revenue growth midpoint of 0.55% results from a rental pricing earn in of minus 0.2%, an. Improvement compared to 2025’s earn in combined. With a blended rental pricing expectation in the range of 1 to 1.5% year new lease pricing is expected to show. Improvement over last year. We expect supply levels to continue to impact new lease pricing, particularly in the first half of the year, but believe the impact will increasingly improve over the course of the year as the effect from new supply continues to decline. Renewable prices expected remain strong and in. The five to five and a quarter percent range throughout the year. For the same store portfolio, we expect effective rent growth to be approximately 0.35% at the midpoint of our range, occupancy to average 95.6 at the midpoint and other revenue items, primarily from reimbursement and fee income to grow just over 2%. Same store operating expenses are projected to grow at a midpoint of 2.65% for the year. Personnel costs are expected to grow by less than 2%. While we expect some continued pressure from utilities, marketing costs and office operations. These expense projections combined with the revenue growth of 0.55% results in a projected decline in same store NOI of 0.75% at the bit point as outlined in our release.

We expect our non same store portfolio to contribute $0.19 in NOI during 2026 with the related interest carry along with the slower leasing velocity and higher lease of concessions that Tim mentioned. We anticipate the recently completed developments and acquisitions will be slightly accretive to 2026 core FSO and move closer to their expected yields in 2027 and beyond. We expect continued external growth in 2026 consisting of our current development pipeline and the projected new starts that Brad noted with funding between $350 million to $450 million coming from debt financing and internal cash flow. We also expect to match fund $250 million in acquisition opportunities with dispositions.

This external growth is expected to be slightly diluted to core FFO in 2026 and then turn accretive to core FFO after stabilization. We project total overhead expenses, a combination of property management expenses and G and A expenses to be $136 million. A 5% increase over 2025 results bringing our three year average increase to 2.5%. We also expect to refinance $300 million in bonds maturing in September 2026, which had an effective rate of 1.2%. Further, we plan to redeem the outstanding preferred shares in the second half of the year. These anticipated transactions, coupled with our 2025 refinancing activities, will result in incremental interest expense of over $0.05 and combined with finances to support our 2025 development deliveries and the expected deliveries in 2026, we project interest expense to increase by over 15% for the year.

We are still early in the assessment of the impact of Winter Storm Firm, but based on initial assessments, we anticipate excluding the impact from our core FFO results as we expect to receive insurance proceeds to cover a portion of the cost of the damages. That is all that we have in. The way of prepared comments. So Julie Ann, we will now turn it back to you for questions.

Questions and Answers:

operator

Thank you. We will now open the call up for questions. If you would like to ask a question, please press Star then one on your touchtone phone. If you would like to withdraw your question, you may press Star one Again, our first question comes from Jamie Feldman from Wells Fargo. Please go ahead. Your line is open.

Jamie Feldman

Great. Thanks for taking the question. You know, I apologize that you went really quickly through the new renewal and blend outlook. Can you just run through those numbers again and maybe just talk us through your level of confidence in each, your cadence on each throughout the quarters and just where you think, you know, if you think about your markets where you’re most confident and most concerned about hitting those numbers. Thank you.

Timothy Argo

Yeah, Jamie, this is Tim. I can walk you through that and I think Clay may have something to add as well. As Clay mentioned our blended guidance about one to one and a half for 2026. You know, on the renewal side I mentioned in my comments that we’re seeing a little bit above 5% so far this year. So we would expect renewals to be in that five and a quarter range and then start to slowly see momentum on the new lease. Do the math on the new leaf side with those components and I would say generally we expect a normal seasonal curve where we see strength into the summer and then start to moderate into the late summer and fall, but see less of that moderation in late Q3 and Q4 than we typically do again as we get further away from the peak of the supply and expected demand to solidify as well.

So normal seasonality but less, less steep declines as we get late in the year. As far as markets, I mentioned a few of Those on the prepared comments. We’re continuing to see strength out of the markets that have been strong. Some of the Carolinas and Virginia encouraged with what we’re seeing out of Atlanta and Dallas. Those are obviously our two largest markets. We continue to see steady progress there both on the pricing front and the occupancy front. The year over year improvement in Q4 pricing for both of those was significant and two of our highest.

I think we’ll start to see a little bit of momentum in Tampa. That’s one where occupancy has stabilized and we’re expect to see a decent amount of demand there. But other than that, I think the ones that have been pretty solid for us this year, I expect those to continue to be solid for us in 2026.

operator

Our next question comes from Jana Gellen from Bank of America. Please go ahead. Your line is open.

Jana Galan

Thank you. Good morning. I was curious if you could comment a little more on the transaction market. We’re hearing there’s more variance on cap rates between core and value add and then maybe on your decision to add to the development pipeline rather than buying assets or buying back more stock.

Bradley Hill

Yeah, thanks. This is Brad. I’ll kick that one off. I mean, you know, in terms of the transaction market, you know, it continues to be pretty aggressive on those core assets as you mentioned. You know what we looked at in the fourth quarter we continue to see cap rates in the call it 4, 6 range in terms of the spread between core and value add. You know, I would say you’re probably seeing a 55, 50 to 75 basis point spread all depending on, you know, certainly the markets that the value adds located in what that upside opportunity looks like.

But those can trade, you know, somewhere in the five and a quarter to you know, call it five and a half range again depending on the market that that’s located in. But, but I don’t think that spread has changed. You know, that that spread has been there for the last couple of years. So I wouldn’t say there’s a material change in that at the moment in terms of our capital allocation. Yeah, I mean development continues to be a big focus of ours. If we can, you know, as I indicated in my comments, you know, when we’re in an environment where demand continues to be solid, the supply pipeline over the next few years continues to be muted.

We’ve got the past three years now of starts have been below long term averages in our region of the country. You know, this is a good time for us to be able to use our Balance sheet capacity to invest in new assets that will deliver into a much stronger operating environment. The development yields that we’re still able to achieve today selectively, not on everything that we look at, but on the deals that we move forward with. And we’re in the 6 to 6.5% range. So we continue to believe that that’s a good use of our capital to drive long term earnings growth out of our portfolio.

In terms of share repurchases, you know, again, we look at all opportunities for capital allocation, whether that’s external growth, internal growth, developing or, excuse me, investing in our existing platform. We talked about the redevelopment, repositioning, the WI FI initiatives, various initiatives we have to drive margin expansion opportunities. Those continue to be very, very compelling for us. And you know, when we look at our opportunity set there, that does leave us with limited capacity for share repurchases. You know, one of the things that, that we’re not really targeting is a big disposition portfolio of properties to dispose of.

And we generally like where we’re located and we don’t need to reallocate capital between markets. So you’re generally not going to see us move forward with a big disposition plan to support a share repurchase. Rather, what we’ll do on the disposition side is continue to cycle out of older assets, redeploy that capital into newer assets. And if you look at what we’ve done over the last last five years, we’ve taken capital off of dispositions, we’ve earned almost a 20% IRR on those and redeployed them into new assets, driving 1000 basis points better NOI margins and a 1500 basis points better after CAPEX NOI margin.

So we think that’s the best opportunity for us on dispositions moving forward.

operator

Our next question comes from Nick Uliko from Scotiabank. Please go ahead. Your line is open.

Nicholas Yulico

Thanks. Good morning everyone. So in terms of development, I was hoping you could talk some more about, you know, why that you have a focus on development right now when you know, clearly you have a view, there’s value creation to be had over time. You’re building it, you know, higher yield than where you think assets are trading. But from a SFO and accretion growth standpoint, it’s not helping right now. I mean, you’ve talked about slower development, lease up period. You have an issue like others, where capitalized interest benefit is lower than where you’re borrowing. So can you just maybe talk about how this, you know, make sense to be picking up development right now? If you are having all these, you know, near term FFO impacts because of that.

Bradley Hill

Yeah, thanks Nick, this is Brad. No, I think that’s a good question. Fair question. I think it’s important to keep in mind with our development pipeline that we are delivering currently at a time where that those particular properties are under more pressure than they ever have been. I mean, keep in mind that if you look at the amount of supply that’s delivered on our markets, from 23 to 25, we delivered five years worth of supply over a three year period. So those properties are facing much more pressure which we are seeing right now in terms of their ability to lease up, the velocity of their lease up and certainly the use of concessions right now.

But that’s temporary. If you look at the lease over lease return rents, we’re getting on renewals on our new lease up properties, we’re getting low double digit returns. So the concessions that we’re offering are burning off. If you look at the recurring rents that are in place on those development projects right now, they’re 2% above pro forma. So again, this is a temporary issue with our developments. If you look at what we’ve developed over the last five years, we have delivered developments on average that have exceeded our underwritten yields by 90 basis points. So you’re right, we’re under pressure right now on that development pipeline and we do think that that’s temporary.

And as the market firms and concessions burn off, we will, as Tim mentioned in his comments, capture the value proposition associated with those. And then in terms of starting new developments today, you know, they’ll be delivering in 28, 29. And as I mentioned in my comments, you know, we’ve had three years now of below long term average supply in our starts in our market which will support a stronger operating environment when those new developments come online. So we very much believe in the merits of continuing to allocate capital to developments despite the pressure that we’re under currently.

operator

Our next question comes from Eric Wolf from Citi. Please go ahead. Your line is open.

Eric Wolfe

Hey, thanks and good morning. You mentioned that renewals are being accepted above 5% so far this year. Could you just talk about what the. Dollar premium is on renewals versus new leases right now, how that premium compares versus history and just any thoughts on how sustainable you think this 5% renewal rate is?

Timothy Argo

Yeah, Eric, this is Tim. You know, as far as the GAAP Q4 was around $180, $185 or so at least first renewal. Now that’s after the renewal increase and the renewal increase is about $80 or so. That’s certainly higher than our long term averages, but not too much different. Q4 is when it always tends to gap out as we see obviously more moderation in new lease rates and traffic patterns, that sort of thing. So if I look, you know, look back to the last couple of Q4s, that’s not too much different than what we’ve seen there.

So. But we’ve now seen that, you know, there’s been eight or nine quarters now where it’s been a little bit wider than normal but still been able to maintain the growth that we’ve achieved on renewals. And I think, you know, there’s a lot of reasons for that. We’ve talked about this in the past. I mean, I think the, you know, there isn’t, there’s a cost, there’s a hassle to moving, you know, as our, as our residents get a little bit older. The cost of that and the willingness to go through that hassle and spend that money and take that time, I think is people are less willing to do that with the resident base that we have.

And we’re very thoughtful of how we go about our renewal increases. It’s based on where our residents are relative to market and we scale that higher or lower based on that. And we’re looking at it on a very strategic basis. And there’s a, there’s a customer service factor there as well. You know, Brad mentioned the Google scores that we have, which are highest in the sector, the customer service component. And I think when you factor all those things in the service you’re getting, the cost, the hassle, everything that goes into moving, it’s just not worth it for a lot of our residents when they consider their value that they’re getting with us.

And particularly in this environment, when you think about the concessions on lease ups and some of the eight to 10 weeks free that they’re saying, that’s a short term thing and you’re going to get that big increase when you try to renew if you are willing to move. So we expect we’ve got visibility really out into April now and seeing consistent take rates and consistent performance on renewals. So feel confident, comfortable about where we are in the renewal set.

operator

Our next question comes from Michael Goldsmith from ubs. Please go ahead. Your line is open.

Unidentified Participant

Hi, thanks. This is Amy, I’m with Michael. What gives you the confidence that you can see an acceleration in new lease through and maybe a little bit past the typical lease season given the softer macro? I Know, you mentioned some tailwinds, but within your markets, what are you seeing in terms of job growth that really gives you confidence that the remaining supply can be absorbed and rents can accelerate? And maybe if you could talk about the new lease growth from trough to peak and how that would compare to historical.

Thank you.

Bradley Hill

Yeah, Amy, this is Brad. I’ll kick off and Tim can certainly give you some details. But I think it’s, you know, the pace of recovery and the expectation for a recovery to accelerate this year for us is really, as I mentioned in my comments, really anchored in the fact that we do think some of the, some of the headwinds that we had last year are a little bit less than what we are, less this year than what we expected last year. And we’re seeing the momentum. If you look at our fundamentals as we talked about, they’re improving.

The operating fundamentals are. Now it takes time for that to make its way into the revenue and earnings portion as the rent roll turns. But we’ve had four straight quarters now of blends improving year over year, which really, which really indicates that we’re turning the corner. Certainly less uncertainty as I talked about. And then I think as you look out into the next year and the cadence of new deliveries declining this year where they’ll be down by more than 60% from the peak and down 35% year over year. And then I think as Tim mentioned earlier, with the backdrop of market level occupancies continuing to firm up in less units in lease up, the sustained demand that we’re seeing across our portfolio right now should have a more pronounced impact on fundamentals.

And certainly as we get into, and particularly on the new lease rate side and as we get into the spring and summer leasing season, we would expect that to continue to manifest itself to a larger degree.

Timothy Argo

Yeah, I’ll just add one point I think important to keep in mind on the new lease side is typically in Q4 and Q1, we historically see negative new lease rates even in a good environment, even in a more historically favorable supply demand environment. You see negative new lease rates in those two quarters just from normal seasonality, from traffic declining. So that’s not unusual to see that, but we would expect some good acceleration, as I mentioned, into the summer and then start to moderate into the fall. But all the things Brad mentioned, and think about it, when we get to the back half of 2026, how far we are from the peak continuing to see those units absorbed, we think the demand picture will continue to solidify all the various Factors in our region of the country, whether it’s job growth, migration, household formation, population growth, the health of our renters in terms of income, rent to income are all extremely strong, particularly compared to other areas of the country.

So all of those factors are combined to give us the confidence that we think 2026 looks better than 2025.

operator

Our next question comes from Haendel St. Juste from Mizuho Please go ahead. Your line is open.

Haendel St. Juste

Hey guys, just wanted to come back to the point on blends one more time. Just doing a quick math. By our numbers, it looks like there’s about a 200 basis point ramp implied into the back half of the year versus the first half, which is similar to what you saw or what we saw at this point last year and you subsequently had to cut a few times. So first I guess is my, is my math correct? And it sounds like secondly that it’s a little bit of lower supply. You have some optimism in the demand picture here.

But what about turnover? I’m curious, kind of what you’re factoring as well for turnover into that math.

Timothy Argo

Thanks. I’ll hit that last point. I might like talk a little bit about the, the first part. As far as turnover, we’re expecting pretty consistent turnover. You know, there’s nothing that suggests that we think it’ll pick up. So we’ve effectively dialed in consistent turnover of what we did last year. So certainly the renewal performance and the impact of renewals versus new leases is helping in that blend. As we expect turnover to stay low. We’re not necessarily dialing it in to, to be lower, but not dialing into being higher either.

Clay Holder

And just on the, on the new. Lease side, I mean, as far as. Kind of the pace of that plays. Itself out to be, I mean, you know, it’s, it’s, as Tim’s mentioned earlier, it’s increasing over the first half of the year and then subsiding over the back half of the year, kind of. Following the typical seasonal curve. But we do expect there to be continued improvement versus what we’ve seen in 2024. And so as that wraps up over the course of the, over the course of the year, we see that, that. Playing itself out into the splitted rates. That we were describing.

operator

Our next question comes from Brad Heffern from RNBC Capital Markets. Please go ahead. Your line is open.

Brad Heffern

Yeah, hey everybody, thanks. Can you talk through what the path is back to positive new lease growth? Obviously it was originally expected in mid 25. It doesn’t look like the guidance would suggest that we would see it in 26 and then if renewals are a little higher than normal, I don’t think you’ve done anything in the 5 since 23. So it feels like that would put pressure on new lease in 27 as well. So I’m just wondering your best guess on, you know, when we would see positive new lease growth and then when new lease growth in general could kind of go back to normal.

Timothy Argo

Well, I’m not going to put a target on going to positive new lease growth. I mean we don’t, we don’t necessarily have that dialed in to our expectations. As you noted in 2026, we do expect it to continue to accelerate from where we are now and then as mentioned, seeing the steady renewals. But you know, I think as we get into 2027, I mean, I think one thing to be clear about on what we bowed in 2026 because of the acceleration of new lease rates and I mentioned in my comments, less of the normal seasonality as we get into August, September and beyond, more of that impacting new lease rates is, is going to impact 2027 more so on the revenue side than 2026 because of it being a little more backloaded.

And so, you know, part of, part of that leads into where we expect 2027 to be. Again we’re even further from the supply peak consistently starts are continuing to go down. We think demand will be solidified. So as we get into 2027, I think that’s when you see real sustained momentum and starting to see potentially where we get into some of those positive new lease rate ranges.

operator

Our next question comes from John Kim from bmo. Please go ahead. Your line is open.

John Kim

Thank you. I wanted to follow up on your disposition guidance of 250 million which is following a year in which you had just a couple of assets. But just given the strong demand from institutions for your product, I’m wondering what’s holding you back from selling more into the strength.

Bradley Hill

Yeah, hey John, this is Brad. I mean, I think what’s holding us back from selling more is one, what we’ve always talked about. We want to protect the earnings quality and capability of our portfolio without introducing a lot of volatility into our earnings performance. And I think for us to go out and sell a large part of our portfolio I think could potentially introduce some earnings volatility. Second, we like where we’re located, we like the diversification of our portfolio in both large and mid tier markets. And there’s really not a portion of our portfolio that we are really targeting moving out of and reallocating that capital to another region of the country.

So we don’t really have the need to do that. And if you look again, as I said earlier, what we’ve been selling over the last couple of years, you know, it’s 30 year old properties. And I think that really fits nicely into our overall strategy of improving the earnings quality of the portfolio versus going out and selling a big portion of our portfolio and trying to determine what to do with that capital. I think you also have to remember that the fact that we are selling assets that are 30 years old, the taxable gains associated with that are sizable.

And for us to really protect that from having to pay some type of tax on that, we want to be able to 1031 exchange that. And that’s harder to do at a large scale in this market without paying cap rates that we think are very aggressive at the 4.5% range or so. And we think our opportunity is better to be measured and to deploy capital into other avenues.

operator

Our next question comes from Austin Werschmidt from KeyBank Capital Markets. Please go ahead. Your line is open.

Austin Wurschmidt

Hey, good morning everybody. Recognize it’s still pretty early in the year, but just wondering if the pace of improvement in new lease rate growth from the fourth quarter into January, February, and any future visibility you have into future months, how does that compare versus last year and do you expect just that gap or improvement to just gradually widen through the year? Is that what’s in that new lease rate growth assumption? Thanks.

Timothy Argo

Yeah, awesome. This is Tim, I think you characterize it well in the last part of your question. We would expect that variance, if you will, the prior year to continue to get a little bit wider as we get later in the year for all the reasons we’ve talked about with moderating supply right now, particularly on the blended side, we’re seeing we would Expect pricing in Q1 blended to be better than what it was this time last year and then we start to see it accelerate from there. So so far as expected and as I mentioned, I think the way you characterize it is the right way to think about.

operator

Our next question comes from Rich Hightower from Barclays. Please go ahead. Your line is open.

Richard Hightower

Hey guys, thanks for taking the question just to maybe follow on Austin and even Jamie earlier just to confirm you guys wouldn’t want to put a number on what new lease growth in the first quarter is going to be. And that’s not even my real question. My real question is just on share repurchases it seems like the philosophy, you know, it was always there as a possibility, but maybe it changed later in the fourth quarter and just wondering, you know, what the math around sort of, you know, sources and uses, you know, how that changed kind of later in the fourth quarter that led to, you know, repurchases for the first time in a long time.

Bradley Hill

Thank you. Hey Rich, this is Brad. I’ll kick that off and others can jump in if they need to. You know, I wouldn’t say it’s been a material change in terms of our outlook there. I mean, honestly, we’ve always had the position that if our shares traded at a persistent and sizable discount, our underlying value and we felt that investing in our existing shares provided an opportunity to drive earnings growth and value proposition for our shareholders, then we would do that. And I’d say what’s unique right now versus historical times is, is that we’re trading at a sizable discount persistently.

You know, we really have not done that. If you go back and look at our history in a long, long time, hence why we haven’t repurchased shares since 2001. So it’s not a position that we have found ourselves in historically and certainly think it’s unique given the supply pressures that, that we are under right now that are dissipating. So we do think that it is a temporary item given where we continue to see private market pricing relative to the public market. So as I mentioned, we have a limited appetite to do that. And so we have an authorization that’s in place, remains in place.

And so if we continue to find that to be the case, and we think that’s the best opportunity for our capital to drive long term shareholder returns, we’ll continue to monitor that and execute in that way.

operator

Our next question comes from Steve Sacwa from Evercore isi. Please go ahead. Your line is open.

Steve Sakwa

Yeah, thanks. Good morning. I just was curious if you had sort of an overarching kind of macro view that you’re laying on top of your expectations. I mean, you’re talking very positively about renewal pricing. Obviously job growth kind of slowed in the back half of last year and I’m just curious if there’s an underpinning or kind of broad assumption that you guys have about job growth kind of in either absolute terms or percentage growth. Because obviously job growth slowed pretty meaningfully from 24 into 25. Thanks, Steve.

Bradley Hill

This is Brad. I’ll kick off and Tim can add any details if he wants. I would say the broad view is that as I mentioned in My comments that GDP continues to be relatively strong this year. I think from a job growth number percentage perspective, what we’re looking at, the numbers we’re looking at for our markets showed absolute job growth going up slightly versus last year. The other demand metrics that we’re looking at continue to remain positive. As Tim mentioned earlier, household formation, population growth, migration trends continue to be positive in our region of the country.

And then just wage growth. We continue to see very strong wage growth in our resident base supporting declining rent to income ratios. So you know, I think all of those things really support just the broad view that we have that things on the demand side are holding up quite well in our region of the country and should continue to hold up quite well this year with the supply demand dynamics improving as we progress through the year.

Timothy Argo

Just one thing I’ll add, just put some numbers on it. We’re projecting, you know, somewhere in the 340,000, 350,000 jobs in our markets in 2026 and then about half of that in terms of number of completions. So you think about that job to completion ratio certainly improving and a lot better position than we’ve been in the last few years.

operator

Our next question comes from Linda side from Jefferies. Please go ahead. Your line is open.

Linda Tsai

Thank you. For the markets where you’re seeing higher concessions, where would you expect to see the concessions burn off the soonest and then alternatively markets where the concessions might persist?

Timothy Argo

Yeah, this is Tim. I mean I would say at a broad level concessions have been pretty consistent. There’s probably about 2/3 or so of our direct comps are offering concessions and they’re averaging somewhere in the five week range. That’s kind of a broad assessment which is pretty consistent with what it’s been. Some of the lease up properties as we mentioned, if there’s a lot of lease ups have been a little bit higher More in the eight to 10 weeks we’re starting to. We’ve seen a little bit of increase in downtown Nashville, a little bit Raleigh and Charlotte.

Those are ones where we seen concessions pick up a little bit. We’ve seen them drop a little bit in Tampa and some in Houston. We’ve seen a lot of good stability in Phoenix where occupancy has stabilized and we’re not seeing the concession pick up. But broadly where we’ve seen some improvement over the last few quarters is a couple markets I mentioned earlier, Dallas and Atlanta and really starting to see those interloop and urban areas across the port portfolio work through that level of supply. So we’ve seen concession in some of the more urban areas come down, which again is encouraging that they’ve seen a lot of supply.

So broadly concession is pretty consistent and then it’s some increasing, some decreasing, depending on certain pockets and certain markets.

operator

Our next question comes from Alexander Goldfarb from Piper Sandler. Please go ahead. Your line is open.

Alexander Goldfarb

Hey, morning. Morning down there. Just, you know, think about concessions. Is there a risk of all the supply that was delivered the past two years? Presumably had a lot of concessions in that and those existing renters, you know, got the benefit of whatever 1, 2, 3 months free as those leases roll and those renters face market rents. Are you expecting a lot of churn where once again, even though supply is coming down, there’s suddenly a lot of competitive supply, if you will, because those units now are looking for full freight renters versus the concessionary ones that were currently in the lease up.

I’m just trying to understand how the first year anniversary of all that supply rolls, how that’s going to impact you guys in the overall market.

Timothy Argo

Yeah, Alex is. Tim. I mean, you know, certainly relative to where we’ve been over the last couple years, I don’t, I don’t consider that to be too much of a risk. I mean, because it still comes down to just, you know, how many units are out there that are available. We think there’s probably 110, 120,000 less units in lease up in our markets than there were, you know, at the peak.

And then you combine the lower turnover, that’s helping as well, where there’s just fewer units of existing assets. So. So I don’t consider that. I think it still just comes down to more of a supply demand picture of how many units will lease up. And that really drives it more than anything else. I think where it has helped us more, honestly is on the retention side where people knowing those concessions are going to burn off. I think that’s helped us more on the renewal side, but we don’t see that as a real risk.

operator

Our next question comes from Buck Horn from Raymond James. Please go ahead. Your line is open.

Buck Horne

Hey, thanks. Good morning, guys. I was wondering if you could help. Us stratify maybe the recent performance between. Your class A units versus Class B. And however you want to describe it, you know, new lease rates, occupancy, any sort of metric between A’s and B’s. And I’m just wondering if we’re starting. To see any sort of incremental pressure. From kind of the vacancy increases in the Class C units if that’s starting. To filter upwards or not.

Timothy Argo

Hey, bud, this is Tim as far as ab. And you know, you can think about AB or you think about urban, suburban and on how you want to find it. But the way we define A and B, haven’t seen a real, a real differentiation of performance there. But I did, I mentioned this a little bit earlier. Where we have started to see some differentiation over the last couple quarters is, is more of the urban versus suburban, more of the central business district and urban areas particularly. We don’t have a ton of that, but we have a fair amount in Dallas and Atlanta.

And we’ve seen that performance start to differentiate both on the occupancy side and the pricing side. We’re seeing pricing about 40 basis points better on blended pricing and probably 10 basis points or so higher occupancy. So I think that’s, that’s encouraging given where supply was occurring in those markets, but not a big mix on the AB side.

operator

Our next question comes from Mason Gwell from Baird. Please go ahead. Your mind is open.

Mason Guell

Hey, thanks. Good morning, everyone. On the acquisition side, are you seeing. More opportunities to acquire lease ups with the cycle taking longer to turn?

Bradley Hill

Yeah, this is. Brad. I wouldn’t say that we’re seeing more opportunities. I mean, certainly there are a lot of lease ups that are out there right now. But honestly, I think we’ve seen less lease ups actually being marketed than what we have historically. And I think that’s just because the valuation is more impacted right now because there’s just more uncertainty about the timing of the lease up, the roll off of concessions and things of that nature. So I think from a buyer’s perspective, there’s a little bit more hesitancy on lease ups versus a stabilized and so therefore the valuation could be impacted.

So sellers are really holding on to those assets a little bit longer right now trying to lease those up before they really bring them to market. So we’ve seen there’s lease ups out there that you certainly being marketed, but there’s, I think there’s less of those today than there have been in the years past.

operator

Our next question comes from Ann Chan from Green Street. Please go ahead. Your line is open.

Ann Chan

Hi, good morning. Thanks for taking my question. Could you share how renewable and new lease rates in Atlanta have trended late last year and into early this year?

Timothy Argo

Yeah, as far as Atlanta and I touched on this a little bit earlier, we’ve continued to see pretty good performance, continually increasing performance both in terms of really blended pricing and occupancy if I look at 2025, full year blended pricing for Atlanta versus where it was in 2024 is about 260 basis point higher. Blended pricing for the full year in 2025 and occupancy about 70 basis points higher for the full year. So continue to see steady improvement there. When I isolated to just the fourth quarter saw that improvement as well. So that’s market that I talked about that we’re starting to see some stability from.

We’ve seen delinquency go down to just about the portfolio average as well. So don’t see any concerns there. And on a relative basis, Atlanta has had less supply than some of our markets. So broadly pretty encouraged with what we’ve seen from Atlanta.

operator

Our next question comes from Alexander Kim from Zelman and Associates. Please go ahead. Your line is over.

Alexander Kim

Good morning. Thanks for taking my question. I wanted to dive into the transaction market a bit more here. Pricing power overall has been relatively soft in of terms, particularly on the new movement side. And at the same time you cited market cap rates in the 4, 6 range with investor demand still obvious. Can you talk about what you’re seeing in the transaction market for a stabilized product, I guess, and what you expect moving forward for transaction volumes with this particular dynamic in play?

Bradley Hill

Yeah, I mean we continue to see very robust investor appetite for for assets in our region of the country. You know, I think the volume of properties that have come to market have increased steadily during 25, certainly as interest rates stabilized and were more attractive for folks. So I do think that that is likely to continue in 26. I think the appetite for our region of the country will continue to be very, very strong. There’s a lot of capital out there. Interest rates, rates, spreads have decreased overall, the cost of capital has decreased. So I do think that the transaction market could be pretty healthy with healthy cap rates as we go forward.

I don’t really see those changing at this point. I think from as I mentioned a moment ago, I think from an underwriting perspective there’s a little bit of more uncertainty. There has been for the past year of what happens on the new lease rate side. And since these lease ups are generally leasing predominantly for the most part, at least in the first year, to new lease rates, there’s more pressure there. So then it comes down to the ability to turn those concessions off. So I think the market is certainly optimistic about what that looks like going forward and hence the low cap rates.

And so I see the transaction market picking up in activity as we go through 26.

operator

Our next question comes from Handel Saint. Just from Mizuho. Please go ahead. Your line is open.

Haendel St. Juste

Hey guys, thanks for taking the follow up. I might have missed it, but can you tell us what the new lease rate was for January specifically? And then would you also comment or can you comment on the pending settlement for the real page multi district lawsuit and then maybe remind us what other litigation there is on that front? Outstanding, thanks.

Timothy Argo

Yeah, no, it’s Tim. I’ll answer the first part. We’re not going to get into individual months on the new lease side. You know, it’s just pretty granular in a small population. But I will say, you know, I think the when you think about new lease pricing compared to last year, we expect the smallest Delta between those two in Q1 and then to get larger for all the reasons we’ve talked about and then blended basis to broadly we expect we would have better pricing in Q1 versus what we did this time last year. Hey Andy, this is Rob on the real gauge settlement.

I think first and foremost I would say the settlement has no admission of wrongdoing or liability and remain confident that we’ve acted lawfully and responsibly. And secondly, it does not require any material changes to how we operate the business. The prospective commitments are all ones that we believe are consistent with how we conduct operations today. So we don’t really expect any significant disruptions there. And then finally it really is just about removing distraction and uncertainty in a complex and evolving legal environment where this is really an attack on the entire industry and not just maa.

The resolution did allow us to eliminate significant cost and complexity and distraction of the continued and prolonged litigation and keep the focus of leadership where we really want it, which is on residents operations and value creation. Then the two ongoing Attorney General matters that are disclosed in our financial reports are still continuing and we will continue to defend those.

operator

And our last question will come from Julian Blouin from Goldman Sachs. Please go ahead. Your line is open.

Julien Blouin

Yeah, thank you for taking my question. I just wanted to check on maybe just the trend of absorption volumes in your markets. It seemed to, it seemed to maybe normalize somewhat in fourth quarter, certainly lower than it was in, in 4Q24. Do you worry at all that maybe absorption is starting to slow amidst the job environment that Steve alluded to? And maybe in this sort of slower migration environment you’re still dealing with elevated levels of vacant units in your markets. But just wondering how you feel about absorption.

Timothy Argo

Yeah, Julian, this is Tim. We did see absorption slow a little bit in the back part of the year and into Q4, but not really surprisingly.

I mean one just there’s a seasonal component to that that is not unexpected. And then frankly there’s just as supply and start to continue as we continue to get further from that peak, we would expect absorption to go down. There’s just fewer units to be absorbed but so we didn’t necessarily need to stay at those extremely high levels that we’ve seen over the last few quarters. But as we look forward, just given the fact that there’s so many fewer units in lease up than there were 12, 15, 18 months ago, continued steady demand scenario, no sign of supply picking back up, we would expect absorption to be pretty consistent demand to be pretty consistent and not concerned overall on that front.

Bradley Hill

Julian, this is Brad. I’ll just add one thing to that. As Tim mentioned, as new deliveries continue to decline, the absorption numbers the way they’re calculated are going to by nature continue to decline. And so one of the things that we’re also focused on is what our market level occupancies look like in our markets. And certainly we look at that on a total basis as well as just the stabilized occupancy. And as Tim mentioned I think in his opening comments, I mean we’ve seen significant improvement in those market level occupancy occupancies over the past year and the numbers continue to show that the lease ups that are in the market continue to be filled up and therefore the market level occupancies are firming which is one of the components of our strengthening belief of the strengthening performance throughout this year.

So occupancies appear to continue to improve.

operator

And we have no further questions. I will return the call to MAA for closing remarks.

Bradley Hill

All right, thanks for joining the call today. If you’ve got any follow ups, don’t hesitate to reach out. Thanks.

operator

This concludes today’s program. Thank you for your participation. You may disconnect at any time.