NEWS - Commercial Real Estate

2nd Qtr. Financial Results are Positive, Reflecting Five New Projects During Qtr.

By Lou Phelps
SBJ Staff

Aug 8, 2011 - Mid-America Apartment Communities Inc. has continued its previously announced acquisition plan with the purchase last week of the Avala development at Savannah Quarters, a 256-unit apartment community within one of Savannah’s largest residential communities. The acquisition price was not disclosed.

It’s the second recent apartment acquisition by the company, including the purchase last week of 279-unit Tattersall at Tapestry Park, located in Jacksonville.  MAA has also purchase the 300-unit Hamptons at Hunton Park in Richmond, VA in June.

Avala at Savannah Quarters was developed in 2009 in the Greg Norman-designed golf and residential community of Savannah Quarters which features a fitness center, resort-style pool, picnic area and more than two acres of park and play area.

“We are very pleased to add Avala at Savannah Quarters to our Georgia portfolio,” according to Al Campbell, executive vice president and CFO. “We believe the continued growth of the Port of Savannah, which is the fourth largest container port in the United States, and the recently announced expansion of Mitsubishi Power Systems will further support steady economic growth in the area for the foreseeable future.”

The acquisition was funded by common stock issuances through MAA’s at-the-market program and borrowings under its current credit facilities. MAA (NYSE: MAA) is an apartment-only real estate investment trust.  The company also announced its 2nd Qtr. earnings last week.

Net income available for common shareholders for the quarter ended June 30, 2011 was $7.4 million, or $0.20 per diluted common share, as compared to net income available for common shareholders of $1.4 million, or $0.04 per diluted common share, for the quarter ended June 30, 2010.

Funds from operations, or FFO, a widely accepted measure of performance for real estate investment trusts, was $36.2 million, representing $0.93 per diluted share/unit, or per share, for the quarter ended June 30, 2011, as compared to $26.4 million, or $0.80 per share, for the quarter ended June 30, 2010.

Same store net operating income, or NOI, grew 4.5 percent over the second quarter of 2010 on a 3.8 percent increase in revenue and a 2.9 percent increase in operating expenses with bulk cable netted in revenues (discussed later in report). Year to date same store NOI grew 4.7 percent

Physical occupancy at the end of the quarter was a strong 96.3 percent and resident turnover remains at historic lows running at 54 percent on an annualized basis through the second quarter.

The company completed the acquisition of five wholly owned communities representing a total investment of $153 million and the company's initial investment in the Richmond, Virginia market in the quarter including the acquisition of a parcel of land in Little Rock, Arkansas and commenced development of 312 new high quality units.  Construction continues on two other development projects in Charlotte and Nashville.

According to Eric Bolton, chairman and CEO, "Strong second quarter results reflect robust leasing conditions with solid pricing momentum across the portfolio.  Despite continued sluggishness in the economy, we expect to capture steady upward pricing trends into 2012. Our new value growth opportunities also remain robust with a higher than expected volume of property acquisitions completed during the quarter. Additionally, we made significant progress during the quarter in executing on our long term financing strategy, further increasing the strength and flexibility of our balance sheet."

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