Research Desk Line-up: Essex Property Trust Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 7, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Mid-America Apartment Communities, Inc. (NYSE: MAA) ("MAA"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=MAA, following the Company's disclosure of its second quarter fiscal 2017 results on July 26, 2017. The real estate investment outperformed Funds from Operations (FFO) expectations and also raised its FFO and earnings guidance for FY17. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the REIT - Residential industry. Pro-TD has currently selected Essex Property Trust, Inc. (NYSE: ESS) for due-diligence and potential coverage as the Company announced on July 27, 2017, its related business activities and financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on Essex Property Trust when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on MAA; also brushing on ESS. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=MAA

http://protraderdaily.com/optin/?symbol=ESS

Earnings Reviewed

For the quarter ended June 30, 2017, MAA recorded total operating revenue of $382.79 million compared to revenue of $272.24 million for Q2 2016. The Company's revenue numbers matched Wall Street's expectations.

During Q2 2017, MAA's combined adjusted same store net operating income (NOI) increased 2.8% on a y-o-y basis, based on a 2.3% increase in revenue and a 1.6% increase in property operating expenses. The Company's average effective rent per unit for the combined adjusted same store portfolio increased to $1,161 during the reported quarter, reflecting a 2.4% increase on a y-o-y basis, while average physical occupancy was at 96.1% for Q2 2017.

For the quarter ended June 30, 2017, net income available for MAA's common shareholders was $47.4 million, or $0.42 per diluted common share, compared to $45.1 million, or $0.60 per diluted common share, for Q2 2016. The Company's reported quarter results included $4.2 million, or $0.04 per diluted common share, of merger and integration costs related to the merger transaction with Post Properties, Inc.

For Q2 2017, MAA's FFO was $174.5 million, or $1.48 per diluted common share and unit, compared to $122.6 million, or $1.54 per share, for Q2 2016. The Company's reported quarter results included $4.2 million, or $0.04 per share, of merger and integration costs related to the Post Properties' merger. The Company's FFO numbers topped analysts' estimates for revenue of $1.45 per share.

Acquisition and Disposition Activity

During Q2 2017, MAA closed on the disposition of two vacant undeveloped land parcels in the Tampa, Florida and Atlanta, Georgia markets, respectively, for an aggregate sales price of $1.4 million.

In July 2017, MAA also sold three wholly-owned communities with an average age of 28 years, Paddock Club Lakeland, a 464-unit community located in Lakeland, Florida, Paddock Club Montgomery, a 208-unit community located in Montgomery, Alabama, and Northwood Place, a 270-unit community located in the Fort Worth, Texas market, for combined proceeds of $88.4 million. The Company expects to recognize total net gains on the sale of real estate assets of approximately $60 million in Q3 2017 in connection with these sales, achieving an economic cap rate after all CapEx of 5.3%.

Development and Lease-up Activity

As of the end of Q2 2017, MAA had six development communities under construction, consisting of three expansion projects and three new development communities. Total development costs for the six communities are projected to be $396.1 million, of which an estimated $103.0 million remained to be funded as of the end of the reported quarter. The expected average stabilized NOI yield on these communities is 6.5%. During Q2 2017, the Company funded $49.9 million of construction costs on development projects. MAA had six communities, containing a total of 1,771 units, remaining in initial lease-up as of the end of the second quarter of 2017.

Redevelopment Activity

During Q2 2017, MAA redeveloped a total of 2,342 units at an average cost of $5,129 per unit, bringing the total units renovated during the six months ended June 30, 2017 to 3,863, at an average cost of $4,785, achieving average rental rate increases of 9.7% above non-renovated units. MAA expects a total of 6,000 to 7,000 units to be redeveloped in 2017.

Balance Sheet

As of June 30, 2017, MAA's total debt to total assets was 34.0% compared to 33.9% as of December 31, 2016. The Company's total debt outstanding was $4.6 billion at an average effective interest rate of 3.6%. The Company had approximately $877.3 million combined cash and capacity under its unsecured revolving credit facility and unencumbered NOI was 82.5% of total NOI, compared to 78.4% as of December 31, 2016.

MAA's recurring capital expenditures totaled $24.4 million for Q2 2017, or approximately $0.21 per share, compared to $18.9 million, or $0.24 per Share, for Q2 2016. The Company's redevelopment, revenue enhancing, and other capital expenditures during the reported quarter were $25.7 million compared to $21.7 million for the prior year's corresponding quarter. These expenditures led to Funds Available for Distribution (FAD) of $124.4 million for Q2 2017 compared to $82.0 million for Q2 2016.

During Q2 2017, MAA repaid $156.4 million in secured property mortgages with Fannie Mae that was scheduled to mature in June 2019. As part of this payoff, the Company recognized a $2.2 million net gain on debt extinguishment due to the write-off of the mark-to-market debt adjustment related to the mortgages, partially offset by a cash prepayment penalty of $1.6 million.

Outlook

MAA updated its FY17 guidance for net income and FFO per share. The Company is forecasting net income per diluted common share to be in the range of $2.69 to $2.89 per diluted common share, while FFO per share for the year is expected to be in the range of $5.77 to $5.97 per share, or $5.87 per share at the midpoint, compared to a prior range of $5.74 to $5.94. For Q3 2017, MAA is forecasting FFO per share in the band of $1.39 to $1.49 per share, or $1.44 per share at the midpoint.

Stock Performance

At the closing bell, on Friday, August 04, 2017, Mid-America Apartment Communities' stock slightly fell 0.17%, ending the trading session at $103.76. A total volume of 398.98 thousand shares have exchanged hands. The Company's stock price advanced 3.71% in the last three months, 5.90% in the past six months, and 0.97% in the previous twelve months. Moreover, the stock gained 5.96% since the start of the year. The stock is trading at a PE ratio of 44.70 and has a dividend yield of 3.35%. The stock currently has a market cap of $11.81 billion.

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