Mid-America Apartment cuts 2026 forecast as pricing recovery slips

Mid-America Apartment Communities Inc. (MAA), a real estate investment trust that owns apartment communities in 16 states, said on Oct. 28 that third-quarter revenue was $560.13 million, in line with the $564.25 million consensus estimate compiled by Finnhub.

The same release lowered the company's full-year 2026 earnings forecast, citing higher interest rates and later-than-expected gains in new resident pricing.

Here's how the company did:

• Earnings per diluted share: 72 cents vs. 84 cents a year earlier
• Core FFO per diluted share: $2.10 vs. $2.16 a year earlier
• Rental and other property revenues: $560.13 million vs. $554.37 million a year earlier

Core FFO is funds from operations adjusted for items the company does not consider part of its core business. The company said Core FFO met its expectations for the quarter.

For the nine months, earnings per diluted share were $2.82, compared with $3.30 a year earlier. Core FFO per diluted share was $6.31, compared with $6.51.

2026 guidance

The company lowered its full-year 2026 earnings per diluted share forecast to $3.61 to $3.73, from the $3.96 to $4.20 range it gave in its previous results release on July 29. The midpoint is now $3.67, down from $4.08.

Core FFO per diluted share is now forecast at $8.43 to $8.55, from $8.41 to $8.65, with a midpoint of $8.49 against $8.53 previously. Core AFFO per diluted share is forecast at $7.40 to $7.52, from $7.38 to $7.62.

Same Store property revenue growth is now forecast at -0.40% to -0.10%, from -0.20% to 0.40%. Same Store NOI growth is forecast at -1.70% to -0.80%, from -1.70% to 0.10%.

President and Chief Executive Officer Brad Hill said: “Our revised forecast reflects higher interest rates and new resident year-over-year pricing improvement occurring about a quarter later than we expected, impacting our blended pricing and occupancy as we built occupancy through the quarter.”

For the fourth quarter, the company expects Core FFO of $2.12 to $2.24 per diluted share, or $2.18 at the midpoint. It said it does not forecast earnings per diluted share on a quarterly basis.

Pricing and portfolio

Same Store revenue fell 0.4% from a year earlier to $519.07 million. Same Store expenses rose 2.0%, and Same Store NOI fell 1.8% to $316.04 million.

Blended lease rate growth was 0.4% in the quarter. Renewal lease pricing rose 5.3%, while new lease pricing fell 6.0%. Average physical occupancy was 95.3%, and resident turnover was 39.6% as of Sept. 30.

During the quarter, the company completed the lease-up of MAA Val Vista in Phoenix, Arizona, and MAA Breakwater in Tampa, Florida. It also completed development of MAA Milepost II in Denver, Colorado.

In September, a 269-unit community in Washington, D.C. was sold for gross proceeds of approximately $147 million. MAA holds a 35% interest in the joint venture that owned the property, which is expected to distribute the net proceeds in the fourth quarter.

Capital and dividends

MAA repurchased 0.4 million common shares in the quarter at a weighted average price of $126.72, for total consideration of $50.0 million.

On Oct. 1, the company redeemed all of its 8.50% Series I preferred stock for $43.4 million in cash. The cash came from proceeds of 0.3 million common shares sold through its at-the-market program.

The operating partnership borrowed an additional $250.0 million under its unsecured delayed draw term loan, leaving $350.0 million outstanding at Sept. 30. Combined cash and available capacity under its revolving credit facility was $660.7 million.

The board declared the company's 131st consecutive quarterly common dividend of $1.53 per share. It is payable Oct. 30 to holders of record on Oct. 15. The current annual dividend rate is $6.12 per common share.

The company will hold a conference call on Oct. 29 at 9:00 a.m. Central Time. It said it will update its 2026 earnings and Core FFO guidance on a quarterly basis.