Mid-America Apartment Communities, Inc.

Good morning, ladies and gentlemen, and welcome to the MAA first quarter 2026 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 30, 2026, and in consideration of time, we have a one-question limit. I will now turn the call over to Andrew Schaefer, Senior Vice President, Treasurer, and Director of Capital Markets at MAA for opening comments.

Thank you, Regina, 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 DelFrori. Before we begin with 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 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. 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. When we get to Q&A, please be respectful of everyone's time and attempt to complete our call within one hour due to other earnings calls today. 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.

Well, thanks, Andrew, and good morning, everyone. As highlighted in our release, we delivered first quarter results that exceeded our expectations, driven by the resilient demand in our footprint, strong resident retention, as well as our focus on expense management and some timing-related items. New lease pricing continued to reflect supply pressure in several markets, but despite this pressure, new lease pricing improved sequentially. And supported by our continued strong renewal performance, Blended lease over lease pricing improved 140 basis points from the fourth quarter. With the bulk of the leasing season ahead, we'd like our positioning and momentum going into summer with stable occupancy and better 60-day exposure than a year ago. Our high-growth markets are producing solid demand to absorb the new supply in a steady manner that we believe will enable continued stable occupancy, favorable renewal pricing, strong collections, and overall earnings performance in line with the outlook we provided in our prior guidance. Our leasing traffic remains strong and positive migration trends, strong wage growth and stable employment conditions across our diversified portfolio and markets combined to drive solid demand as evidenced by first quarter absorption exceeding new supply deliveries in our footprint. Operationally, our on-site teams, actively supported by our asset management team, continue to execute at a high level, controlling expenses while delivering an excellent resident experience as reflected in our sector-leading Google scores. As a result of our strong customer service and the ongoing single-family affordability challenges, renewals remain consistent, helping to deliver year-over-year blended lease improvement for five consecutive quarters. We continue to allocate capital in a balanced and disciplined manner, taking advantage of the current pricing dislocation of our existing portfolio in the public market to buy back shares, as well as executing on initiatives to deliver long-term earnings growth while protecting our strong balance sheet. With acquisition cap rates around four and a half for high quality properties in our footprint, our external growth efforts are predominantly focused on new development through our existing pipeline of owned and controlled land sites representing over 4,300 units of future growth. We started construction on our first project for the year in April, a 286 unit community in the Kansas City market. Based on our current approval and construction timelines, we now expect to start construction on four projects this year, reducing our expected development spend for the year to $350 million. While this is down from the $400 million in our original forecast, it's up from the $315 million we invested in the two projects we started in 2025. The projects we expect to start this year will deliver in 2028 and 2029, during what we believe will be a more favorable supply-demand environment. As we look forward, we remain encouraged by underlying demand across our markets, declining new deliveries, and the strength of our resident base with continued strong collections and affordable rents at a 20% rent-to-income ratio. Our high-growth markets continue to offer attractive long-term appeal for employers, households, and investors. With positive absorption, stable demand, and market-level occupancies improving, We are optimistic we will continue to build momentum through the spring and summer, supporting improved new lease pricing as the year progresses. In addition to capturing increased organic growth from our existing asset base through the year, we expect a growing NOI contribution from a number of areas, including new initiatives to drive efficiencies and higher operating margin from our existing portfolio, our growing redevelopment opportunities, as well as a growing development pipeline that continues to lease up. Today, we believe our more diversified and higher quality portfolio, our stronger operating platform, and our stronger balance sheet position us to capture improving performance and to deliver meaningful shareholder value over the approaching recovery cycle. We're excited about the outlook over the next few years. To all our associates across our properties and corporate offices, thank you for your continued dedication and focus. And with that, I'll turn the call over to Tim.

Thank you, Brad, and good morning, everyone. For the first quarter, same store NOI beat our expectations with inline same store revenue combining with lower same store expenses to drive the favorability. From a pricing standpoint, new lease over lease growth improved 110 basis points sequentially from the fourth quarter, but continues to be under pressure due to elevated but moderating new supply combined with more macro level economic uncertainty. On the renewal side, similar to the last several quarters, Retention rates and lease rates remain strong. Renewal lease over lease growth improved 70 basis points sequentially from the fourth quarter, driving blended lease over lease growth up 140 basis points from the fourth quarter. Average physical occupancy remains strong at 95.5% for the quarter. Additionally, we had another quarter of strong collections with net delinquency representing just 0.3% of billed rents in line with the last several quarters. From a market standpoint, Many of the markets where we saw strong performance in the fourth quarter and most of last year continue to show strength in the first quarter. We have noted on several occasions the performance of our mid-tier markets, particularly in Virginia and South Carolina. Richmond, Greenville, the D.C. area markets, and Charleston all demonstrated strong pricing power and strong occupancy in the quarter. Encouragingly, our three largest markets in terms of same-store NOI contribution were Atlanta, Dallas, and Orlando all outperformed the portfolio in the first quarter in blended lease over lease pricing. Austin, though improving, is still a challenge, particularly on the new lease pricing side. Charlotte and Savannah are two other markets facing challenges in the wake of heavy supply pressure. In our lease-up portfolio, NAA Liberty Row in Charlotte and NAA Breakwater in Tampa completed construction in the fourth quarter and moved into our lease-up portfolio. We now have five properties in lease-up with a combined occupancy of 68.3% as of the end of the first quarter and an additional two development properties that are actively leasing units. Elevated concessions remain the case for some of these lease-up properties with up to eight weeks on certain floor plans. However, these projects are still expected to achieve our underwritten yields as markets continue to improve and therefore retain their long-term value creation opportunities. We're off to a quick start in the first quarter on our various targeted redevelopment and repositioning initiatives. During the first quarter of 2026, we completed 1,386 interior unit upgrades, up from just over 1,100 units that we renovated in the first quarter of 2025. We achieved rent increases of $104 above non-upgraded units on average unit level spend of $7,349, representing a cash-on-cash return of approximately 17%. These units continue to lease faster than non-renovated units when adjusted for the additional turn time, averaging about nine days quicker. For our common area and amenity repositioning program, we are over 90% repriced at six recent projects, with an average NOI yield above 10% and rent growth far exceeding peer MAA properties. Five additional projects are nearing construction completion and will begin repricing between May and August. And then six additional properties are in the planning phase with expectations to be complete in time for repricing in the spring of 2027. Our Wi-Fi retrofit initiative that began in 2024 and expanded in 2025 continues to grow. We have 27 live properties where the service is rolling out to residents as leases are signed, and we are further expanding this initiative in 2026 to an additional 35-plus properties. As we head into the busier part of the leasing season, we are well-positioned. Average physical occupancy for April is 95.5%, in line with April 2025, and 60-day exposure is currently 8.3%, 20 basis points better than where we ended April of 2025. With increased absorption in our markets in the first quarter, where the number of incrementally occupied units exceeded new deliveries, supply pressure continues to moderate. And despite the previously mentioned economic uncertainty, lead volume remains strong and ahead of last year. Strong renewal performance continues in the second quarter, with retention rates and lease-over-lease growth rates on renewals accepted, remaining consistent with what we've seen the last few quarters. With an assumed backdrop of steady demand, we expect gradual, seasonal improvement in new lease rates through the second and early third quarters, along with consistent renewal growth and retention. As we get later in the year, improving fundamentals will become even more impactful, setting up a stronger 2027. That's all I have in the way of prepared comments. Now I'll turn the call over to Clay. Thank you, Tim, and good morning, everyone.

We reported core FFO for the quarter of $2.13 per diluted share, which was two cents ahead of our first quarter guidance. For the quarter, same-store expenses were favorable to our guidance by one and a half cents, along with non-same-store NOI favorable by one cent, offset by unfavorable interest expense of a half a cent. same-store repair and maintenance expenses, personnel costs, and marketing costs were all below our expectations and were reflected by our disciplined expense control along with expense timing. During the quarter, we funded approximately $100 million in development costs. At quarter end, our development pipeline was at $623 million, leaving an expected $234 million to be funded on the current pipeline over the next three years. As previously discussed, we did adjust the number of development starts from our initial guidance and accordingly lowered our development spend for the year by $50 million. While the size of our pipeline at a point in time can vary based on starts and deliveries during the quarter, we expect the pipeline to grow throughout the year as we begin construction on new projects. Our balance sheet remains in great shape to support this and other growth initiatives. At the end of the quarter, we had nearly $840 million in combined cash and borrowing capacity under our revolving credit facility, and our net debt to EBITDA ratio was 4.5 times. At quarter end, our outstanding debt had an average maturity of 6.1 years at an effective rate of 3.9%. During February, we issued $200 million of seven-year public bonds at an effective rate of just over 4.6%, using proceeds to repay borrowings under our commercial paper program. Also, during the quarter, we repurchased 558,000 shares of our common stock at a weighted average share price of $130.46 for a total of $73 million. As for our full-year outlook with the bulk of the leasing season ahead of us, we are reaffirming the midpoint of our same-store and core FFO guidance for the year while tightening the core FFO range. For the quarter, we expect core FFO to be in the range of $2 and $2.12 per diluted share, or $2.06 per share at the midpoint. Our second quarter guidance reflects the typical seasonal increase in leasing, as well as higher maintenance-related operating costs. The increase in interest expense from first to second quarter is largely attributable to the delivery of additional development units and incremental borrowings associated with share repurchases and the litigation settlement. These impacts and interest expense are expected to be partially offset by proceeds from property dispositions. That is all that we have in the way of prepared comments. So, Regina, we will now turn the call back to you for questions.

We will now open the call up for questions. If you'd like to ask a question, please press star then one on your touchtone phone. If you'd like to withdraw your question, press star then one again. Our first question will come from the line of Eric Wolf with Citi. Please go ahead.

Hey, good morning. Thanks for taking my question. Based on your guidance, you're expecting blended rates to ramp through the year. I think you just said a moment ago that you're expecting sort of a typical seasonal impact in the second quarter. Could you just talk about sort of specifically what you expect to see over the next couple months? I think last quarter you actually gave sort of the guidance for first quarter blends. So I was hoping you could do the same for the second quarter blends and talk about whether you're finally starting to see some of the supply impact easing in some of your markets?

Yeah, Eric. This is Tim. I'll answer that, and I'll walk you through kind of how we're thinking about our blended guidance for the year. So, guidance remains 1 to 1.5 blended for the full year. As we reported, we did negative 0.3% blended in Q1, but we are starting to see some steady incremental improvement on the newly side and then continue to see the steady renewals. As we think about the rest of the year, to your point, like we would expect new lease pricing to continue to accelerate through to about July and then start to moderate seasonally, but we expect that seasonal moderation to be less so in the back part of the year than it typically is as we continue to see the supply impact moderate, continue to think that renewals will be in that five-plus range and stay pretty consistent. So if you think through all that, get to our one-to-one-and-a-half, you're kind of at a 1.3 to 1.8 blended for the last three quarters of the year. So you can kind of think about how that trajectory will work out from where we are here and using that seasonal curve that I've talked about.

Our next question will come from the line of Ayanna Gallen with Bank of America. Please go ahead.

Thank you. Good morning. Sorry, Tim, question for you again. Can you maybe speak to performance on both the concessions and supply absorption in Atlanta and in Dallas?

Yeah, so Atlanta and Dallas, we continue to see some pretty solid performance, particularly in Dallas. If I look at Dallas for a moment and you look at where we are from a pricing standpoint right now and an agency standpoint, compared to, say, this time last year, we saw about a 240 basis point improvement in blended pricing from Q125 to Q126 and steady, steady occupancy along with that. Similarly, in Atlanta, we saw about a 50 basis point increase from blended pricing last year to this year, and about a 20 basis point increase in occupancy. So Atlanta probably started to recover for us a little bit early, and we've seen that continue to stabilize and move forward. Dallas was a little bit later, but we're seeing some good strength out of that. As I just mentioned, I expect Dallas to be one of our stronger performing markets this year. We're seeing a pretty broad base. There's still some pressure in the Allen-McKinney areas, but uptown is performing well, some of the other suburban markets. And then similar in Atlanta, we're seeing... Still some of the in-town and downtown, midtown, Buckhead, some markets outperformed. Some of the suburbs, Duluth and Smyrna are still a little bit weaker, still seeing higher concessions. But for Dallas, we've seen concessions come down a little bit. They're not as broad-based in Dallas as some of the other markets. So we have seen some relief there, particularly in the urban areas. And then we talked about Atlanta. The concessions were coming down a little bit last quarter, and they may – pretty consistent with where they were last quarter. He still has a month or so out there on average, but the sub-marks that I talked about have come down quite a bit.

Our next question comes from the line of Austin Worshmuth with KeyBank. Please go ahead.

Thanks. Good morning. Kind of sticking with Tim here. One on new lease rate growth. I know you had some weather disruption in the first quarter. I guess, were you surprised, though, at the pace of improvement in new lease rate growths versus the fourth quarter? And are you seeing that pace improve or accelerate, I guess, into the second quarter? Or is it more similar from what you saw from the fourth quarter of last year into the first quarter of this year? Thanks.

Yeah, I mean, if you remember last year, we were seeing some strong acceleration in new lease rates through about April, and then it really kind of plateaued with... Liberation Day, and we saw it sort of peak there, not really get momentum past May. I think what we're seeing this year is more of a steady acceleration. To your point, February kind of stalled out for a little bit and brought Q1 news pricing a little bit down from where we expected, but then we saw it quickly return in March, and then we're seeing some momentum play out in April as well. And then we think about where we are with exposure and occupancy in I would expect May to outperform where we were in May last year, where we, again, were kind of stalled out. So I would say we're seeing a more seasonal or more normal acceleration new lease rates. This year, last year, it was a little quicker, but then it slowed to a complete halt. I think we would expect that not to continue. And all the, you know, the stats we look at, where we are with exposure, where we are with lead volume, where we are with occupancy, and kind of seeing what's out there with pre-leasing, we would expect that momentum to continue beyond May, unlike it did last year.

Yeah, and I would just add a couple of points to what Tim's saying, just speaking more broadly. I mean, I think one of the things that gives us encouragement about the trajectory, as Tim was mentioning a moment ago, as we go throughout the balance of the year, is first, if you look at just the broad demand fundamentals in our region of the country continue to screen quite well, really across the board. You know, job growth continues to be resilient. The other demand factors, migration trends, population growth, all continue to be very resilient within our region of the country. And then if you look at just the momentum that Tim was just talking about, market-level occupancies in the first quarter continue to firm up. You look at absorption numbers exceeding deliveries in the first quarter. With the renewal positioning that we have right now, as Tim mentioned, our occupancy is stable and our exposure is in a better position than it was this time last year, puts us in a really good position to continue the momentum that we've seen in April as we get into May and June. And so we feel like the momentum is building from the dashboards that we have to date. That momentum continues to build in the second quarter, which is what we need to see in order to continue to see new lease progressions. throughout the year, which aligns with what our expectations are for the year.

Our next question will come from the line at the Handel St. Just with Mizuho. Please go ahead.

Hey there. Maybe a question on capital deployment. I understand the decision to lower the acquisition guide given market pricing and your cost of capital, but maybe expound a bit more on the decision to pull back on some of the new development starts. And would that lower use of capital, I guess lower capital deployment overall, suggest you might be more open to doing more stock buybacks here in the near term, given the compelling yield on that side? Thanks.

Yeah. Hey, Handel. This is Brad. Well, as I mentioned in my opening comments, the pullback in development spend, development is a little bit fluid with timing of when deals can start, approvals. can take a little bit longer than you think, things of that nature. So that's the nature of the reduction from, as we mentioned in the prior call, we could start between five and seven deals this year. Just based where we are in the approval cycle of those, it looks like it's going to be closer to four. But you never know, some of those could get approvals earlier, and if the economics make sense, we could start those toward the back part of the year. But that's where we certainly expect to be in terms of development for the year. We continue to believe that's one of the best uses of our capital to deliver long-term value for shareholders, so we'll continue to focus on that. As Clay mentioned in his comments, we expect the size of that pipeline to continue to grow. Our spend for the year is down from what we originally expected but still up from where it was last year, and we expect that on an ongoing basis to be into that pipeline. three to $400 million range. So no real change in terms of that. But, you know, I think in terms of share repurchases, you know, as we think about, you know, really how best to allocate capital, you know, we're really focused on generating high quality compounding earnings growth that supports a steady and growing dividend. We really think that's the best way to drive TSR performance over the full cycle. And when we do that, there are three things that we're considering when we decide where do we put our capital. And the first is we want to take a very balanced approach. And that balanced approach really helps us take advantage of near-term opportunities, which right now just happens to be the share buybacks. And so you've seen us be active in that space. But we also want to be able to take advantage of opportunities that we think again, contribute to that long-term TSR performance. And that's where development comes in. We still think that's the best opportunity for us to drive long-term TSR performance. We're getting accretive returns. And today, those are in the mid-sixes. And our development, importantly, has been able to deliver higher NOI growth, about 50 to 100 basis points on a long-term basis versus our existing portfolio. So we want to be balanced in terms of what we're doing. The second thing is we want to protect our balance sheet capacity. And so you're not going to see us go out and leverage up our balance sheet because we want to protect what we're able to do with our balance sheet. And then the third thing really is we like our portfolio. We like where we're located. We like the markets we're in. So we don't have a need to go and really materially reallocate capital amongst our markets, which can drive certainly higher dispositions in capital redeployment. So that's really how we're looking at, you know, our various opportunities for capital allocation and where share repurchases falls within that.

Our next question comes from the line of Alexandra Goldfarb with Piper Sandler. Please go ahead.

Hey. Morning down there. Just a question on the guidance. You guys talk pretty optimistically about the balance of the year, acceleration. You're talking about this year's leasing trends not looking to stall like last year did, but yet you adjusted guidance. You basically tightened the range. A lot of your peers sort of left it open-ended to revisit guidance in second quarter. So based on your commentary, it would sound like you'd think there's potential for upside, but yet you trimmed the top end and tightened the range. So Can you just talk a little bit more about your decision to revisit guidance now versus waiting to the second quarter?

Yeah, Alex, this is Clay. Just, you know, the real reason that we kind of brought down the guidance there, at least a range, keeping our midpoint the same as we came out with our initial guidance. But we were a little wider in our range as we started the year than what we would typically do. And we did that because of the macro uncertainty that Tim mentioned earlier, some of the demand concerns that were out there at that time. As we sit here today, that's less than we've got one quarter behind us. And so we tightened that range down to a range that we would typically go out the year with. And so that's really all that we were reflecting by tightening the range. Still feel very confident and our overall guidance as we move in throughout the year, though.

Our next question comes from the line of Adam Kramer with Morgan Stanley. Please go ahead.

Hey, guys. Good morning. Just wanted to ask a little bit about... sort of the, uh, the renewal growth with regards to concessions, uh, and if there's any way to sort of, you know, maybe disaggregate or break down what sort of percentage of the renewal growth that you guys are able to sort of get each quarter comes from concession burn off versus sort of gross rent increases. Um, and then maybe just the second part of that with regards to concessions. Um, and I think you mentioned it for some specific markets, but just maybe across the portfolio, what are you offering today in terms of concessions and, How does that compare to the same period a year ago?

Yeah, this is Tim. So for the first part of your question, there's not a lot there. I mean, with our portfolio, we don't use a ton of concessions. We're mostly in net effective pricing. If you look at our financials, concessions represent about 0.6% of our net potential rent. So for us, the... The burn-off of concessions in our same store renewal basis is very minimal, probably maybe 10 base points or something like that. It's more impactful in our lease-up properties. We're getting 8%, 9%, 10% renewals on lease-ups where there is some burn-off concessions, but it's driving part of that, so you can kind of distinguish between those two there. As far as the concession market across Across our portfolio, across our markets, I would say for Q1, pretty consistent with what it was in Q4. You know, we're seeing 60, 65% of our competitors offering some level of concession somewhere between four and five weeks is sort of a standard. So that's broadly across the portfolio. We have seen it take down just ever so slightly as we got into April. where not only the percent of competitors offering concessions come down a little bit and then a little bit decrease in the overall average concession. So I think that's perhaps a sign of some of the momentum to come. Absorption was positive this quarter, so a few release-up units out there. So we are starting to see it take down just a little bit.

Our next question will come from the line of Michael Goldsmith with UBS. Please go ahead.

My name is Amy. I'm with Michael. We were wondering how much of an impact does hiring from new college grads have on your peak leasing season? Do you tend to see more people trading up into MAA units or are they more first-time renters?

It's pretty consistent out here. You know, we've been looking at some of that, our younger age demographic with all the talk around some of the unemployment rates for that group in particular. And so if we look at Q1, for example, about 20% of our move-ins are 25 or under in age. And that's been really consistent over the last several years. That hasn't really ticked up or down. And then we look at also, you know, to try to gauge some of that pressure. Are there more of our residents needing a guarantor, indicating perhaps that their economic situation isn't great? And that's actually come down a little bit. So, but I would say on average, it's about 20-ish percent of our move-ins are in that 25th age group or under, but we're not seeing really any pressure or any changes in that as of yet.

Our next question will come from the line of Jamie Felsman with Wells Fargo. Please go ahead.

Great. Thank you. I think you had mentioned pulling back on development starts this year. You know, obviously, supplies come down in a pretty meaningful way, and some of your competitors are actually talking about ramping up into 28 and 29. Can you talk about that decision and how we should be thinking about development going forward? Is it more project specific or is there a bigger picture story we should be thinking about?

Yeah, Jamie, this is Brad. Yeah, I mean, again, the development reduction for the year of $50 million really is just a couple months delay on average in terms of starts for deals. And that's really deal specific to your point. That does not signal in any way a change in our posture toward development. We still continue to believe in the merits of developing deals. in particular the benefits of that for long-term TSR performance. So you'll continue to see us focus on development. I mean, we own or control, I think, 16 sites with approvals for over 4,000 units. So that'll be a continued focus. of us, you know, we'll continue to focus on spending $300 to $400 million a year. The start level numbers for each year can vary a little bit as it can be a little bit lumpy. You've got to go through the approval process, which, you know, can take a little longer than you expect sometimes. So, but our strategy and focus on development is the same as it has, and we'll continue to expand that pipeline to the, you know, billion, billion two range that we've talked about previously.

Our next question will come from the line of Steve Sokla with Evercore ISI. Please go ahead.

Yeah, thanks. I guess kind of a big picture question. If I told you that you could double the size of your portfolio today, I guess what are the pluses and minuses of managing a substantially large or larger portfolio than what you currently have? Is the data flow that much better that gives you better insight on pricing? Are there just more operational challenges? Like, you know, how do you sort of think about size and, and, you know, whether you need to be, you know, much bigger than you currently are?

Well, you know, I think, you know, certainly size isn't everything. You know, we have been through obviously two significant events in our recent history as an organization. And those events are very, very difficult to do. And, take a lot of time and there's risk associated with them, but there certainly could be a lot of upside if they're done right and the cultures align well between the organizations. You know, I would say at the scale that we are today, You know, to double our portfolio size, you know, I wouldn't think there's a material improvement in information flow, data flow, and things of that nature that you mentioned. Cost of capital is probably very similar. You know, it really is going to depend on, I would say, what we can get operational efficiency-wise. You know, some of the things that we're doing on the operating side from centralization and specialization and how we're approaching potting properties and things of that nature. Having scale near to one another within a particular market is very meaningful in that process. So certainly could see some ability to drive some level of operating efficiencies depending on where the properties are located.

Our next question will come from the line of Rich Anderson with Cantor Fitzgerald. Please go ahead.

Thanks. Good morning. Uh, so about a year ago, Brad, um, we, we had a dinner, uh, with the group and, um, there was some, at least some indication from my perspective that this time, you know, a year later, we would be talking about a lot more in the way of, you know, stabilize new lease rate, uh, growth and so on. And, you know, obviously it hasn't quite happened yet. Um, I'm curious, you know, in your mind, you know, taking over CEO around that time, 13 months ago, Are you surprised by the tail of supply impacting that line item in particular, or is everything kind of lining up the way you thought? We all know the biblical nature of the supply that came online in your markets over the past couple of years. I'm just curious if all this is coming as more of a surprise and not necessarily in alignment with

past cycles of supply uh that you guys have been through I just wanted to get your take your temperature on that topic thanks yeah no thanks um yeah I recall our dinner and certainly at that time um you know believed that we would uh certainly see better improvement on new lease rate side excuse me uh over the past year uh which is you know what our expectations have been as related to our forecast for last year and going into this year. And I think it's also, you mentioned the biblical size of supply, but I do think it's important to put that in perspective. you know, in a three-year period, we had five years' worth of supply delivered into our markets. And so, you know, there is a level of lingering impact associated with that supply. The good news is, though, that absorption is happening. Market-level occupancies are improving. You know, when we had that dinner, I didn't think that, you know, new lease rates would take as long as they have to see improvement that we've seen. But the good news is we are seeing improvement. The other Positives are that the demand within our region continues to hold in there quite well, outperforming other regions of the country sometimes by a factor of two to three. The other good news is that the supply pipeline is significantly declining. If you look at the size of what's being delivered in our region this year, It's down 40% from last year. So while it is taking a little bit longer, if you keep in perspective just the size and the magnitude of the decline that we're seeing in supply in our region of the country, which is declining, to a larger degree than it is other regions of the country, balanced with the fact that demand continues to be resilient. You know, we're pretty excited about what the trajectory looks like from here. Yes, last year I would have hoped that it would have improved a little bit quicker, but that's not where we are, and certainly I think as we look forward based on supply and demand fundamentals, we're pretty excited.

Our next question comes from the line of Mason Gale with Baird. Please go ahead.

Hey, thanks. Good morning everyone. Do you expect to continue buying additional land parcels for the balance of the year?

Well, yeah, this is Brad. You know, it depends. We will likely have additional land parcels that we purchase later in the year. But the way that we are approaching buying land at this point is we are not looking to land bank various sites. We do not want to buy land that is speculative. We want to buy land that we have a clear and near-term path to being able to put that land into production. So you could, based on timing, you could see us buy a piece of land at some point this year that maybe starts construction next year, but certainly not with the intent to buy it and hold it for a few years before we're able to start construction on it. That's not what we're looking to do. We want to keep the balance sheet very efficient and be able to put land into production pretty quickly after we buy it.

Our next question comes from the line of Julian Bluen with Goldman Sachs. Please go ahead.

Thank you for taking my question. Following on from Steve's question, you guys are probably the best authorities in the space on public-to-public apartment deals, just given the post and colonial deals. Obviously, there's the initial G&A and overhead benefit that can be realized, but I guess You mentioned the potting benefit. How long does that sort of take to realize? And then if we think about what's different today versus when you did the post and colonial transactions, are there any additional benefits today, whether it's on, I don't know, the technology front, the AI front, Wi-Fi rollout and scale with vendors that would maybe make a deal, make even more sense today?

Ken Dewey, this is Brad. You know, I think in terms of potting, you know, that's more related to the quality of the property managers that you have and just opportunities that present themselves in terms of how quickly those can manifest themselves. Those can be relatively quick endeavors, but you got to make sure you have the right people. As you know, this is a very, you know, in any merger, This is a very people-intensive business, and so they can quickly determine whether or not you have success or not at a property level. So you've got to be really careful with what you're doing there. And I'm sorry, the second part of his question.

Any additional benefits that weren't there?

Yeah, in terms of the other benefits, I think. They're different than when we executed the post-colonial merger. It's on the technology front like you talk about. I think the cost of technology today continues to increase, but I also think the ability to spread that cost across obviously a bigger footprint, a bigger platform. One of the things that we've been focused on as an organization is continuing to improve our platform capabilities and be able to drive more out of our portfolio than what others are able to do. And part of that is the technology. Part of that is the centralization and specialization that we have and that we're focused on so that the marginal G&A cost associated and technology cost associated with adding additional units is less. So I do think that's a difference today versus what it was, you know, 10 or so years ago when we've gone through mergers.

Our next question will come from the line of Alex Kim with Zellman and Associates. Please go ahead.

Hey, morning. Thanks for taking my question. I wanted to ask about how lease of velocity has trended so far to date and, you know, kind of fitting that into the context of acquiring – projects that are in lease-up, you know, is that still a strategy that you maintain on a go-forward basis? Thanks.

Yeah, Alex, it's Tim. I'll answer the first part of that question. We have seen the lease-up velocity pick up, particularly as we got into late Q1 and into April. You know, obviously it's a little bit slower in Q4 and Q1 just with traffic patterns, seasonal patterns. But if we look at April, for example, the five properties that are in our lease-up bucket averaged about 23 move-ins on average in the month of April. So we're starting to see that momentum pick up, got a really good lead volume. We're starting to see, you know, we're not seeing things get slower. We're not seeing concessions go up or anything like that. We're starting to see the momentum there. And I think as we get into the spring and summer, much like we've talked about with our same sort of portfolio, we would expect to continue to see some momentum in that group.

In terms of acquisitions, I think you asked if we're focused on buying properties and lease up. I mean, you know, I think at this point, you know, the best use of our capital is not acquiring. So we're not active in that market today. We continue to evaluate projects. I would also say we haven't seen as many lease up trades or lease ups coming to market to trade as we have historically. You know, if a seller is bringing a property to market today, they want it as leased up and occupied as they can get so that there's less risk, you know, out there for the buyer so that they can get better pricing at the moment. So, you know, we'll continue to look at lease ups as they come to market. And if we find an opportunity that makes sense, we certainly wouldn't, for the right price, we wouldn't hesitate to execute there. But we're just not seeing a lot of opportunities in that front that makes sense today.

Our next question will come from the line of Ann Chan with Green Street. Please go ahead.

Hi. Thanks for taking my question. So going back to other income, were there any unusual or non-recurring items that caused a drag or a boost on other income in first quarter? And related, when do you expect the benefit from the delayed Wi-Fi rollout in late 25 to start flowing to 26, if not already?

And just to confirm, are you referring to same-store other income? Correct. Yeah, so in Q1 – this is Clayton, by the way. So in Q1, we have seen – to your point, we have seen the continued rollout of Wi-Fi. We saw a little bit there, but not much, not really driving that in the quarter itself. What we would expect to really begin to see that benefit showing itself in the numbers would be as we move into the spring and summer leasing seasons – and we start having those leases turn, and that would be the time that we would push the Wi-Fi revenue to the residents, along with the expense that we have for that as well. So that should come in the middle and towards the latter part of the year.

Yeah, and I'll just add one point to that is, Tim, we're expecting somewhere in the neighborhood of $3 million or so of revenue in 2026 related to those Wi-Fi projects, which is certainly back-loaded, as Clay mentioned. Most of those projects got completed late Q4, early Q1, and we priced those out as the leases expired and the units turned. So expect a lot more impact from those as we get through the year, and then it'll compound certainly in 2027 and beyond.

Our next question will come from the line of Nick Ulico with Scotiabank. Please go ahead.

Hi, good morning. This is Elmer Chang on with Nick. I just wanted to go back on the concession topic and just ask, how is concession burn off trending in some of your maybe underperforming markets of late, like Charlotte, Austin, Nashville, et cetera? And when do you expect you'll reach a normalized level of concessions in those markets this year? I know you mentioned concession usage taking down through April and that you expect new lease rates will improve throughout the year. I was just wondering whether that outlook is mostly driven by your stronger markets like Atlanta, Dallas, Orlando. Thank you.

Yeah, this is Tim. I mean, we have started to see in some of those weaker markets, concessions come down a little bit. I've talked a few times about some of the more urban submarkets that have a lot of lease-ups where they were averaging... closer to three months, and I would say now that's more in the eight to 10 week type of concessionary environment, so come down a little bit there. Market like Austin, we have started to see it come down a little bit. We were pushing across the entire market close to almost two months broadly, and that started to take down slowly. We're particularly seeing better performance in In the southern part of Austin, northern Austin, Georgetown and that area is still seeing a lot of pressure and not seeing much relief there. Phoenix is probably another one where we've started to see concessions come down a little bit. I've been seeing that market stabilize, at least for us, over the last couple of quarters and now starting to see still underperforming broadly, but starting to see some good momentum out of Phoenix. You mentioned Charlotte. That's one that's still right in the mix of it. It got double-digit percent of inventory delivered over the last couple of years. I think that one's going to be a struggle, I think, through 2026, and that one's probably more of a 2027 recovery story in Charlotte, but feel great about that market long-term. Tons of demand, tons of jobs coming there, but just a whole lot of supply there right now.

We have no further questions. I'll return the call to MAA for closing comments.

All right. We appreciate everyone joining. We'll see you soon in various conferences. Thank you.

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