MAA's Strong Q4 Performance Signals Improved Leasing Trends Ahead
The multifamily apartment REIT, MAA, recently reported its Q4 and full-year 2024 earnings, revealing a promising start to the year. According to Eric Bolton, CEO of MAA, the company is in a great position for the recovery cycle for apartment leasing that should become increasingly evident over the course of this year.
Despite still working through the impact of record-high levels of new supply delivered over the past year, MAA's early recovery trends have shown positive lease-over-lease pricing performance. This trend is expected to gain momentum as the improving conditions take a more obvious compounding impact on overall portfolio results late this year and into 2026.
MAA's CEO succession planning program is set to execute its next step, with Brad Hill assuming the role of President and CEO effective April 1. Bolton expressed his confidence in the new leadership team, citing their deep understanding of MAA's strategy and approach to executing on that strategy, which has delivered sector-leading long-term results for shareholder capital.
One of the key factors driving MAA's improved outlook is the moderation of pressure from new supply deliveries. According to Bolton, the volume of new construction started in calendar year 2023 dropped 39% from the peak of starts during the extraordinary low interest rate environment in calendar year 2022, and then started to sequentially drop another 50% in calendar year 2024.
This is expected to result in a significant decline in actual unit deliveries starting this year and continuing for several years. Given where MAA currently stands with interest rates and construction losses, the company continues to see challenges in the market's ability to meaningfully restart and increase in new projects.
MAA believes that its portfolio is uniquely well-positioned to capture the benefits from job growth, population growth, and high single-family housing costs. This will drive a resulting growth in demand for apartment housing across their markets that will outpace national trends over the long haul.
The company's forward-looking statements highlight potential risks and uncertainties that may impact future results. MAA encourages investors to refer to its 34-Act filings with the SEC, which describe these risk factors.
