As apartment operators across the Sun Belt continue to navigate elevated supply and widespread concessions, early signs of rent pricing recovery are emerging, albeit unevenly.
That was one of the messages from Mid-America Apartment Communities during its latest earnings call, which reported stronger-than-expected first-quarter results.
“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,” said Andrew Schaeffer, MAA’s senior vice president, treasurer and director of capital markets.
Like other multifamily companies, the Memphis, Tennessee-based REIT is still contending with supply-driven pressure on new lease rates, particularly in high-growth markets. Still, MAA noted conditions improved sequentially during the quarter, helped by continued strength in renewals.
“Renewal lease-over-lease growth improved 70 basis points, driving blended lease-over-lease growth up 140 basis points from the fourth quarter,” Tim Argo, executive VP and chief strategy and analysis officer, said in the call.
BY THE NUMBERS
| Category | Q1 | YOY Change |
| Property revenues | $517 million | -0.4% |
| Net operating income | $328.7 million | -1.3% |
| Operating expenses | $188.3 million | 1.3% |
| FFO per share | $2.23 | 0.9% |
| Rent per unit | $1,685 | -0.3% |
| Occupancy rate | 95.5% | -10 bps |
SOURCE: MAA
Occupancy remained stable at 95.5% and collections stayed strong, with net delinquency at 0.3%, according to Argo. Executives noted that although new lease pricing is still under pressure, it is trending upward as the company enters the peak leasing season.
Demand remains a tailwind
MAA pointed to continued migration to the Sun Belt, wage growth and steady employment as key drivers of demand across its markets.
“Our leasing traffic remains strong, combined to drive solid demand, as evidenced by first-quarter absorption exceeding new supply deliveries,” Schaeffer said.
That demand has helped offset the impact of new deliveries, with absorption outpacing supply in the first quarter, which the company expects to continue as new construction slows.
Schaeffer noted MAA anticipates gradual improvement in new lease rates through the second and early third quarters, with stronger momentum heading into summer.
Development drives long-term growth
With acquisition cap rates hovering around 4.5%, MAA continues to lean into development as a primary growth strategy. The company began construction on a 286-unit project in Kansas City in April and expects to start four developments this year, totaling about $350 million. That’s down from the $400 million it originally planned, but more than the $315 million it invested in two projects in 2025.
“We continue to believe that’s one of the best uses of our capital to deliver long-term value for shareholders,” said President and CEO Brad Hill.
MAA’s new development pipeline includes more than 4,300 units on owned or controlled land, with deliveries expected in 2028 and 2029, when supply conditions are projected to be more favorable.
Hill said the firm is taking a balanced approach to capital allocation, weighing near-term opportunities like share buybacks with longer-term growth investments.
In addition to funding development, the REIT repurchased $73 million of its common stock during Q1. MAA ended the quarter with an average debt maturity of 6.1 years and an effective rate of 3.9%, and issued $200 million in bonds during the period.
Performance by market
Results varied across MAA’s footprint last quarter. Greenville and Charleston in South Carolina and Washington, D.C., posted strong occupancy and pricing, while Atlanta, Dallas and Orlando, Florida, outperformed the broader portfolio on blended rent growth.
Some markets remain under supply pressure: Austin, Texas; Charlotte, North Carolina; and Savannah, Georgia continue to see elevated levels of housing.
“In a three-year period, we had five years’ worth of supply delivered into our markets,” Hill said. “The good news is the supply pipeline is significantly declining.”
MAA reaffirmed its full-year guidance, calling for blended rent growth in the 1% to 1.5% range, with stronger performance expected later in the year as supply pressures ease. With occupancy holding steady and demand fundamentals intact, executives said the company is positioned to for improved performance through the remainder of 2026.
“We feel like the momentum is building and continues to build in the second quarter,” Argo said.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
