Mid-America Apartment Communities, Inc.

Good morning, ladies and gentlemen, and welcome to the MAA first quarter 2023 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterward, the company will conduct a question and answer session. As a reminder, this conference call is being recorded today, April 27, 2023. I will now turn the call over to Andrew Schaffer, Senior Vice President, Treasurer, and Director of Capital Markets of MAA for opening comments. Please go ahead.

Thank you, Corliss, and good morning, everyone. This is Andrew Schaefer, Treasurer and Director of Capital Markets for MAA. Members of the management team also participating on the call with me this morning are Eric Bolton, Tim Argo, Al Campbell, Rob DelFrori, Joe Fracchia, and Brad Hill. Before we begin with our prepared comments this morning, I want to point out that as part of this discussion, 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 statement 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 reconciliation so 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. A copy of our prepared comments and an 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. I will now turn the call over to Eric.

Thanks, Andrew, and good morning. As detailed in our earnings release, first quarter results were ahead of expectations as solid demand for apartment housing continues across our portfolio. Consistent with the trends that we've seen for the past couple of years, solid employment conditions, positive net migration trends, and the high cost of single family ownership are supporting continued demand for apartment housing across our portfolio. And while new supply deliveries are expected to run higher over the next few quarters, we continue to see net positive absorption across our portfolio. We believe that MAA's more affordable price point, coupled with a unique diversification strategy, including both large and secondary markets, further supported by an active redevelopment program, will help mitigate some of the pressure from higher new supply in several of our markets. As outlined in our earnings release, our team is capturing steady progress and strong results from our various redevelopment and unit interior upgrade programs. We are on target to complete over 5,000 additional unit interior upgrades this year, in addition to completing installation of new smart home technology for the entire portfolio. We're also making great progress with our more extensive property repositioning projects, with the projects completed to date capturing NOI yields in the high teens on the incremental capital investment. These projects, coupled with a number of new technology initiatives, should provide additional performance upside from our existing portfolio. Our new development and lease-up pipeline is performing well, and we remain on track to start four new development projects later this year. Our various lease-up projects have achieved rents that are close to 11% ahead of pro forma. We did not close on any acquisitions or dispositions during the quarter, but continue to believe that transaction activity will pick up over the summer and have kept our assumptions for the year in place. The portfolio is well positioned for the important summer leasing season. Total occupancy exposure at the end of the quarter, which is a combination of current vacancy plus notices to move out, is consistent with where we stood at the same point last year. In addition, leasing traffic remains solid with onsite visits in comparison to the number of exposed units that we have is actually running slightly ahead of prior year. A number of new leasing tools that we implemented over the course of last year should continue to support stronger execution and our teams are well prepared for the upcoming summer leasing season. I want to thank our associates for their hard work over the last few months to position us for continued solid performance over the balance of the year. That's all I have in the way of prepared comments, and we'll now turn the call over to Tim.