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The Memphis-based REIT Mid- America Apartment Communities, which owns over 250 apartment properties across the Southeast, Southwest and Mid-Atlantic, issued guidance for 2025 core adjusted funds from operations (AFFO/FFO) of USD 7.70-7.82 per share, below the analyst consensus of USD 8.74 per share. For the quarter ended September 30 it posted USD 1.81 per share versus an estimate of USD 2.19. The company attributes this shortfall to an oversupplied market, slower employment growth and economic uncertainty. Previously, the firm flagged that new supply deliveries had peaked and anticipated market conditions to tighten later.
The real-estate investment trust Mid-America Apartment Communities (MAA), headquartered in Memphis, Tennessee, announced that its outlook for annual adjusted funds from operations (AFFO) is coming in below what analysts had projected. The company expects core adjusted FFO in a range between USD 7.70 and USD 7.82 per share for 2025 placing the midpoint below the USD 8.74 per share average estimate compiled by LSEG. Advertisement
During the quarter that ended September 30, the REIT reported adjusted FFO of USD 1.81 per share, which fell short of the USD 2.19 per-share estimate. MAA said the weaker performance reflects persistent pressure in its key markets from an oversupplied apartment environment, slower employment growth and broader economic uncertainty.
MAA manages more than 250 apartment buildings in Sun Belt and Mid-Atlantic markets, including Austin, Memphis and Phoenix. It had previously noted that new construction deliveries had reached record levels and were beginning to moderate an important inflection point it saw as setting the stage for stronger rental conditions ahead. In its full-year 2024 report, the company recorded average physical occupancy of 95.6 % in its Same Store Portfolio, while average effective rent per unit declined 0.5 % and net operating income dropped 2.1 % year over year.
The company's revised guidance follows earlier updates which had the core FFO outlook at an even wider range of USD 7.63-7.95 per share. Its tighter, newer outlook nonetheless still falls behind analyst expectations.
The backdrop to this adjustment is a multifamily market in transition: although demand remains relatively healthy, supply additions in many of the markets MAA serves have been elevated, placing downward pressure on lease-rate growth for new and renewing tenants. MAA noted that in the first quarter of 2025 its Same Store blended lease rate declined by 0.5 % year-over-year, including a 6.3 % drop on new leases, partially offset by a 4.5 % increase on renewals.
MAA's management emphasised that 2025 will be a 'transition year' in which the decline in new deliveries is expected to improve market dynamics for rent growth. The hope is that as the pace of supply slows, that improvement in pricing trends will become more visible.
Source Reuters
5th Jun, 2025
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