EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
Capital Markets Update
February 2010
 
 
 
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 • Sixteen Year Record of Success
 – Top-Tier Returns to Shareholders
 – Strong Operator; Sophisticated Platform
 – S&P Small-Cap 600
 – Strong Corporate Governance
 • Disciplined Capital Deployment
 – Value Investor
 – Extensive Network & Deal Flow
 – Proven Success with Joint Ventures
 • High Quality Multifamily Portfolio
 – High Growth Sunbelt Region Focus
 – Young Portfolio
 – Two-Tier Market Strategy
 • Strong Balance Sheet
 – Capacity to Pursue Opportunities
 – Superior Ratios
 • Dividend Payout
 • Leverage
 • Fixed Charge
Talus Ranch, Phoenix, AZ
Providence at Brier Creek, Raleigh, NC
Strong Public Company Platform
 
 
 
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Source: Green Street, December ’09 Update (with
growth rates adjusted by GS for estimated benefit
of revenue enhancing capex differences)
Seven+ Year Time Frame Inclusive of
Recovery/Strong Market Cycle and
Weakening Market Cycle
Same Store NOI Growth
Full Cycle Strategy
 • MAA began re-positioning its portfolio in
 2003; profile that is well positioned to
 compete favorably in ‘up’ cycles and holds
 up better in ‘down’ cycles
 • Over the last six years MAA’s operating
 platform has been strengthened through
 expanded asset management focus,
 commitment to new technologies and
 improved efficiencies
 • MAA’s average same-store NOI growth
 2002 - 2009 (thru Q3)
 – Out-performing the sector mean
 – Strong relative performance in both ‘up cycle’
 and more recent ‘down cycle’ market
 environment
 • Portfolio Strategy, Investment Disciplines
 and Operating Capabilities Drive Strong
 “Relative” Performance as compared to the
 apartment REIT sector
 • Based on total shareholder return, MAA is
 best performing apartment REIT over the
 past 10 years
 
 
 
4
National MSA Average
2.6%
MAA Market Average
3.1%
Employment Growth Projections 2011 - 2013
Annual Compounded Growth Rates
MAA in 7 of the top 10 projected “Echo Boom Household” Markets:
Dallas, Houston, Atlanta, Phoenix, Austin, South FL, Orlando.
MAA is heavily allocated (60%) to the “Top 25 Apt. REIT Markets,” as
well as select high-growth secondary markets (40%) = Out Performance
Source: Economy.com
Focus on High Growth Region
• Strong pro-business environment
• Increasing port activity; jobs
• Access to less expensive labor
• Good transportation infrastructure
• Low business/living costs
• Positive demographic flows
• Positive migration, immigration flows
• Diversified employment base
 – Logistics
 – Manufacturing
 – Technology
 – Financial Industries
 – Health/Education
 – Global Trade
 – Leisure Travel
 – Military/Defense
 
 
 
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Key Assumptions
2010 Forecast
FFO/Share
$3.45 - $3.65
AFFO/Share
$2.73 - $2.93
SS Revenue
(2%) - (3%)*
SS Expense
2% - 3%*
SS NOI
(5%) - (7%)
Avg. Interest
4.2%
MAA Acquisitions
$150MM
Fund II Acquisitions
$150MM
Annual Dividend
$2.46
*New cable program will require change in reporting of associated
revenues and expenses (gross reporting instead of net);
adjusted for new reporting impact 2010 forecast is revenues
(1%) - 0%, expenses 7% - 8%.
Near-Term Outlook
 • Leasing will remain challenged
 over the next few quarters.
 • Focus remains on holding
 occupancy and aggressively
 managing expenses.
 • Pricing trends in 2009 will carry
 into 2010; stable re-pricing in
 2010 expected to set the stage
 for improvement in 2011.
 • New initiatives and fee programs
 combine to off-set some of the
 pricing pressure.
 • Expect to see positive
 momentum in revenues emerge
 late 2010.
 
 
 
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Recovery begins in late 2010 and outlook very strong thereafter
Source: Witten Advisors
Strong Long-Term Outlook
• Eventual recovery in employment trends will generate a rapid recovery in NOI
 – Pent-up demand; Significant growth of prime rental demographic
• New apartment starts are predicted to hit a post-WW II low
 – Lack of financing; Investment returns insufficient
• Single family home ownership likely to remain relatively constrained
 – Higher down-payments; Tighter credit; Higher mortgage interest rates
• Home ownership currently 67.5% of households
 – Peaked at 69.5%; May revert to more sustainable 30 year level of 64.5% or lower
 – Each 1% movement is 1.1 million households
 
 
 
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 • 85% of the properties owned by the Apartment REIT Sector are concentrated in 25 markets
 • MAA’s markets are concentrated in the high growth Sunbelt region, including a large presence
 in many of these REIT “top 25” markets (60% of portfolio), as well as diversification in other
 high growth secondary markets throughout the region
 • MAA’s portfolio strategy puts the company in position to deliver superior performance during
 the coming recovery cycle
Source: Economy.com
Annual Employment Growth
MAA Positioned to Out-Perform
 
 
 
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Source: Economy.com
MAA Positioned to Out-Perform
 
 
 
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• The Panama canal is currently undergoing a $5
 billion expansion that will allow ships triple the size
 of current capacity to pass.
• Currently, these ships port on the West Coast or
 reach the East Coast via the Suez Canal.
• These ships will now have a more direct, cost
 efficient route to the Gulf Coast and the East Coast.
• The combination of a well developed rail and truck
 delivery network, coupled with the closer access to
 the majority of U.S. population (east of the MS
 River), makes port access to the U.S. via the Gulf
 Coast and East Coast attractive.
• In addition, lower labor costs, lower taxes and
 greater expansion capabilities, makes the Gulf and
 Southeast markets very attractive for business
 expansion.
• This route is expected to gain an increasing market
 share, creating jobs and spurring economic
 development for the Southeast and affected ports.
• Ports impacted include Houston, Tampa, Miami,
 Jacksonville, Savannah, Charleston, and Norfolk
• Many of these ports are already beginning upgrades
 and dredging projects to accommodate increased
 traffic.
Port cities likely
to benefit
Expansion of Panama Canal Expected
To Create Additional Long-Term
Employment Growth For The Southeast
Region Out-Performance Prospects
 
 
 
10
New Multifamily Supply Projections (REIS Data)
Market
Average Annual
Supply
(# of Units)
1999-2009
Projected Average
Annual Supply
(# of Units)
2010-2013
% Drop in Average
Annual Supply
MAA Markets (*)
65,709
28,686
56%
Primary REIT Markets
89,591
48,261
46%
United States
131,614
76,129
42%
West Region
33,613
22,920
32%
Northeast Region
12,085
8,054
33%
Midwest Region
12,986
8,799
32%
* Represents over 75% of MAA’s portfolio
While delivery of new supply over the next few years is expected to drop
significantly in almost every market across the country, MAA’s portfolio is
particularly well positioned to see lower levels of new supply pressure.
MAA Positioned to Out-Perform
 
 
 
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Employment Growth *
Completions **
 
2010
2011
2012
2013
2010
2011
2012
2013
Historical
Dallas/Ft. Worth
0.5%
2.7%
3.8%
4.0%
7,031
5,202
4,420
3,517
10,717
Houston
0.3%
2.5%
4.1%
4.0%
6,887
2,579
2,686
2,574
10,156
Austin
1.5%
2.5%
3.9%
4.4%
2,501
2,071
1,804
1,836
5,179
Atlanta
-2.1%
0.9%
3.8%
5.5%
2,214
1,512
2,202
2,829
7,391
Jacksonville
-2.1%
1.7%
3.4%
2.6%
792
711
484
974
1,322
Nashville
-0.3%
2.1%
3.2%
3.1%
1,245
406
856
1,019
1,073
Tampa
-2.4%
3.0%
4.3%
3.5%
1,387
828
1,028
1,135
3,358
Raleigh
0.6%
2.6%
3.9%
3.5%
2,225
1,114
1,283
1,153
3,198
Memphis
-0.9%
1.6%
3.2%
3.0%
132
487
208
171
977
Other MAA
Markets
-0.5%
2.0%
3.7%
3.4%
11,327
7,507
10,802
11,288
22,338
National
-0.7%
1.6%
3.2%
2.9%
82,194
62,800
72,757
72,139
131,614
Sources: Economy.com* and REIS **
Employment growth out-performance, coupled with new supply delivery well
below historical averages, positions the portfolio for strong revenue growth potential
MAA Positioned to Out-Perform
 
 
 
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Technology platform supports efforts to both optimize revenue growth
and better control expenses
Prospects/Resident Contact
Pricing & Fees Optimization
Resident Screening
Inventory Management
Billing & Collections
Sophisticated Operating Platform
• Pricing system
 – Supported strong occupancy while achieving optimal pricing in a weak
 leasing environment…will also support faster recovery in improving market
 – Enabled more comprehensive analysis of ‘market environment’ and leads
 to higher quality and faster decision making
 – Enabled more differentiation in ‘price points’ and thereby created more
 revenue opportunity without adding complexity for on-site staff
• Fee programs
 – Bulk-cable roll-out has been well received
 – New billing platform has supported opportunity to capture higher fees
 without compromising occupancy or turnover
 – “In house” utility reimbursement billing driven more cost efficiency
• Resident screening and collections
 – Creating more efficiencies with on-site staff time
 – More controlled lease application review without compromising timing
 – Quicker and more effective collection efforts
• Efficient prospect and resident contact
 – Web based traffic > 50% of total
 – On-line leasing driving more traffic and driving down cost per new lease
 – Electronic payment processing improving collections efforts on and on-site
 time
• Lower turn costs
 – Inventory management more efficient
 – “Make ready” process
 
 
 
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Fixed Charge Coverage
2.68
2.5
FFO Payout 2010
69%
77%*
Debt/Gross Assets
50%
56%
Sources: Sector data from Barclays Capital 1/29/10
*Sector Median impacted by stock dividends and
dividend reductions
Common
49%
Debt
46%
Preferred
5%
Strong Balance Sheet Position
 • Leverage and ratios at historically
 strong levels
 • Plenty of capacity - $100 MM unused
 • Only near-term maturity is $50 MM
 (bank line) for 2010 (Q1 planned
 close)
 • Agency loan maturities well laddered
 over 2011 - 2018
 
 
 
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Grand Courtyards, Dallas, TX
Lanier Club, Atlanta, GA
External Growth Opportunities
 • Improving opportunities for
 attractive acquisitions
 – Distressed markets
 – Distressed lease-ups
 – Failed condo/condo conversions
 – Pending refinancing requirement
 • MAA has balance sheet capacity
 – Credit facilities in place at pre-crisis
 pricing
 – Lowest leverage since the IPO
 • Fund Management
 – Fund II: a new $250 MM (total
 investment) value-add fund
 – MAA share 33%
 – Focus on existing MAA foot-print
 – 7+ year-old assets, 6-year hold
 – First acquisition completed in July
 
 
 
15
Lighthouse Court, Jacksonville, FL
Georgetown Grove, Savannah, GA
External Growth Opportunities
 • Competitive advantage over other
 potential buyers; particularly in
 secondary markets
 • MAA’s acquisition team sources an
 average of 200-300 potential
 acquisition opportunities each year
 • Best opportunities at the moment
 with ‘less than stabilized’ properties
 • Evidence growing that newer, high
 quality and stabilized properties are
 trading in the low 6 cap range
 • Values likely to hold and increase
 – Cash flows set to improve in late
 2010 and grow meaningfully in
 2011+
 – Long-term demographics are
 compelling
 – Investor and capital interest in
 apartment real estate likely to
 increase
 
 
 
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Village Oaks, Tampa, FL
Prescott, Atlanta, GA
 
MAA
Sector
2010E P/FFO
13.1x
14.8x
2010E P/FAD
15.4x
17.2x
2010E FAD Payout Ratio
82%
90%
Fixed Charge Coverage
2.6x
2.4x
Dividend Yield
5.3%
5.3%
MAA is well positioned for coming
recovery cycle:
1. Region and Markets employment
 growth forecasted to out-perform sector
2. Limited new supply risks
3. Balance sheet strong; capacity and
 ability to capture meaningful level of
 new growth
4. Strong dividend and coverage ratios
Source: RBC Capital Markets
MAA Offers An Attractive Value
 
 
 
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ü MAA Is a Proven Platform
 • 16 Years as a Public Company
 • Top-Tier Performance for Shareholders
 • Full Cycle Performer
 • Top Apartment REIT Performer 2000 - 2009
ü Opportunity to Invest Ahead of Recovery
 • Balance Sheet is Strong, With Capacity
 • Fund II New Growth Opportunities
 • Strong Deal Flow
ü Young Portfolio with Growth Upside
 • Focused on Top Growth Markets 2010-2013
 • New Supply Threat is Limited
 • Strong Operating Platform
 • Well Positioned for a Recovering Economy
ü Disciplined Capital Allocation Drives High
 Quality of Earnings
ü Strong Coverage Ratios and Liquidity
ü MAA’s Long-Term Earnings Outlook and
 Current Pricing Provides an Attractive
 Opportunity Within the Sector
Sky View Ranch, Phoenix, AZ
Stone Ranch, San Antonio, TX
Summary
 
 
 
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Statements contained in this presentation, which are not historical facts, are forward-looking statements, as the term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which can cause actual results to
differ materially from those currently anticipated, due to a number of factors, which include, but are not limited to, unfavorable changes in the
apartment market, changing economic conditions, the impact of competition, acquisitions which may not achieve anticipated results and other risk
factors discussed in documents filed with the Securities and Exchange Commission from time to time including the Company’s Annual Report on
Form 10-K and the Company’s Quarterly Report on Form 10-Q. The statements in this presentation are made based upon information currently
known to management and the company assumes no obligation to update or revise any of its forward-looking statements.
Watermark, Dallas, TX
Safe Harbor Disclosure