Mid-America Apartment Communities, Inc. 2016 Annual Report

136 Pages·2017·2.68 MB·English

2021 ANNUAL REPORT
Building on
Our Momentum
MAA Midtown Phoenix, Phoenix, AZ
To my fellow
shareholders
MAA’s performance for calendar year 2021 was strong. Leasing conditions across our markets exceeded
our expectations as the demand for apartment housing in our Sunbelt markets continued to increase.
Strong job and population growth and resulting higher household formations drove record rent growth
for MAA in 2021. As we head into 2022, the exceptional market dynamics of the prior year continue in
our footprint. We are building on our momentum to deliver increasing value.

Beyond the opportunities for strong rent growth associated with favorable market conditions, we are
driving value through creative redevelopment of many of our properties. Our ongoing kitchen and bath
upgrade initiative and our repositioning of resident amenity areas, both of which incorporate water
and energy efficient fixtures and appliances, will continue to support rent growth, expense savings
and resulting profit margin expansion over the coming years. In addition, our expansive LED lighting
retrofit project and implementation of new Smart Home technology, that includes automated control
of thermostats and lighting as well as leak detection, along with new and expanding virtual leasing
capabilities will continue to enhance the resident experience throughout our portfolio and create
additional efficiencies in our operations with less waste of our environmental resources.
H. Eric Bolton, Jr.
Chairman and Chief Executive Officer
28
YEARS PUBLIC
Balance Sheet Strength
NET DEBT/ADJ EBITDAre*
4.34x
MAA
5.56x
PEER AVG
*Adjusted EBITDAre represents trailing 12-month period ended 12/31/2021.
Peer Average includes multifamily peers AVB, CPT, EQR, ESS, UDR.
19K
UNITS REDEVELOPED
OVER LAST 3 YEARS
06 MAA
S&P 500
MEMBER COMPANY
Consistent Annual
Dividend/Share Growth
10-YEAR DIVIDEND RECORD
0 0
8 48 3.69 $3.84 $4.0 $4.1
8 2 3. $
2 0 3. $
$2.51 $2.64 $2.78 $2.9 $3. $
2011 2021
$703M
2021 DEVELOPMENT &
LEASE-UP PIPELINE
Our talented team of associates who make these initiatives development platform continues to expand and is poised
and our outperformance possible, have done so despite the to deliver significant new value over the next few years. We
ongoing challenges surrounding COVID. Although somewhat believe MAA’s long established record of development
abated from the previous year, the pandemic continued and performance across the region will drive increasing
to impact our residents, associates and operations during opportunity for attractive new growth.
2021. Our dedication to deliver superior service and support
for our residents remained strong as we continued to A Service-Driven Mission and Culture. Underpinning
provide a range of services introduced in 2020 for those our platform’s strong capabilities is a culture and mind-set
impacted by the virus including active promotion of federal anchored with a deep understanding of our responsibilities
rent relief programs, rent deferral options and early lease to drive higher value for all the constituents that depend on
terminations. We also remained active in supporting our our work. This influence behind all our decisions and actions
associates with their health and safety needs including is the strongest and most critical variable in our ability to
maintaining our safety protocols and offering education and outperform over the long term.
assistance related to vaccinations and providing time off
from work when needed. As we begin calendar year 2022, MAA’s long established strategy and approach to creating
I am hopeful that the worst of this terrible pandemic is value are driven by a goal to outperform over the full market
behind us, but we stand prepared to protect and help those cycle, inclusive of both expansion and recessionary phases
who depend on MAA. of the broader economy. As a publicly traded, real estate
company structured as a REIT, with the associated dividend
As the economy and we, as a society, gain lost ground from performance objectives this entails, a full cycle performance
the last two years, we believe MAA is best positioned to strategy is key to our goal. When compared to the publicly
outperform during the recovery cycle for many reasons, traded apartment REIT Index, MAA’s top tier performance for
including: shareholders over a 1-year, 3-year, 5-year, 10-year, and 20-
year period is a testament to this focus and objective.
A Successful and Proven Strategy. Over our 28-year
history as a publicly traded apartment REIT we have In closing, I want to make note of the loss of our company
consistently focused on the high-growth Sunbelt region founder, George Cates, this past year. George entered
of the country. While more investment capital is now being the apartment industry in 1970, later forming The Cates
drawn to the strong value proposition offered by these Company which he ultimately transformed into MAA
markets, we believe MAA’s uniquely diversified strategy, through a public offering in 1994. Though he retired as CEO
high quality portfolio, proven operating experience and deep in 2001, his passion for service to others, his enthusiasm
insights in operating and growing value in this region of the for MAA and his appreciation for the critical nature that
country will support continued out-performance. our culture has on our long-term success not only made
a deep impression on me, personally, but continue to
Operating Advantages. MAA has execution capabilities be the foundation of our culture and are reflected in the
that generate clear competitive advantages when compared compassion and dedication of MAA associates. Our
to others operating across the Sunbelt region. MAA’s company’s record of long-term outperformance is directly
larger scale and efficiencies, unique approach to pricing tied to the many things we learned from George.
management, significant redevelopment opportunities
within our existing portfolio and expanded virtual leasing I also want to thank our roughly 2,500 MAA associates and
capabilities support higher future operating margins. our board of directors for their support and our tremendous
results in 2021. And I want to thank you, our loyal investors,
A Strong Focus on Technology and Innovation. who have remained supportive of our strategy and execution
Providing a seamless and high-quality experience to our over the many years. We look forward to 2022 and the
residents is an important part of our future growth. Our opportunities to drive higher value for those we serve and
continued investments in technology to increase customer who depend on MAA.
engagement, service, and satisfaction will not only produce
accelerated efficiencies in our operations but will provide Sincerely,
additional support to our growing pricing and revenue
trends.
Higher New Growth. Supported by a strong balance H. Eric Bolton, Jr.
sheet with significant capacity for new growth, our new Chairman and Chief Executive Officer
Our Sunbelt Advantage
MAA’s 28 years of Sunbelt strategy and expertise
continue to be a differentiator in today’s recovery cycle.
Our markets are experiencing tremendous demand and
we are in a strong position to capture the opportunities
before us to grow value for our stakeholders.
Sand Lake, Orlando, FL
102K
Homes
Multifamily Market
16 Multifamily Market
and Regional Office
States + DC
Multifamily Market and
Corporate Headquarters
297
Multifamily Development
Communities Underway
UNIQUE DIVERSIFICATION ACROSS THE HIGH-GROWTH SUNBELT REGION*
*Map and community data represent the total portfolio including active developments at December 31, 2021.
Core AFFO/Share Core FFO/Share MAA-US MSCI US REIT S&P 500
INDEX (RMS)
%
7
8. % %
$5.30 $5.90 $5.35 $5.96 $5.64 $6.26 $5.75 $6.43 $6.32 $7.01 85.8% 43.1% 2 18.1 11.3% 16.6 17.1% 10.7% 9.5%
2017 2018 2019 2020 2021 1-YR 10-YR 20-YR
STEADY CORE AFFO & CORE FFO GROWTH TOTAL SHAREHOLDER RETURNS1
2021 YOY Growth | 9.9%, 9.0% Annualized at 12/31/2021
1 Compounded annual growth rate in share value due to appreciation in price and
dividends paid, assuming dividends reinvested.
SECURED BBB+
COMMON EQUITY DEBT 1.2%
$27.20B Standard & Poor’s Rating Services3
UNSECURED
DEBT + PREFERRED $4.08B DEBT 13.1%
$4.56B CEQOUMIMTYO N PREFERRED Baa1
85.6% EQUITY 0.1% Moody’s Investors Service4
$15.00B
BBB+
Fitch Ratings3
TOTAL CAPITALIZATION2
CREDIT RATINGS
At 12/31/2021
Positive Outlook from All Three Rating Agencies in 2021
2 Common shares and units outstanding multiplied by closing stock price on 12/31/2021, plus total
debt outstanding at 12/31/2021, plus Preferred stock ($50 redeemable stock price multiplied by total 3 Corporate credit rating assigned to MAA and MAALP
shares outstanding). 4 Corporate credit rating assigned to MAALP, the operating partnership of MAA
Note: For definitions of terms used herein, as well as a reconciliation of non-GAAP terms to the most comparable GAAP measure, please refer to our earnings release for the fourth quarter of 2021, which may be found at our
website, www.maac.com, under the “For Investors” tab and the “Filings & Financials” and “Quarterly Results” sub-tabs.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
O R
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECUR ITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission File Number 001-12762 (Mid-America Apartment Communities, Inc.)
Commission File Number 333-190028-01 (Mid-America Apartments, L.P.)

MID-AMERICA APARTMENT COMMUNITIES, INC.
MID-AMERICA APARTMENTS, L.P.
(Exact name of registrant as specified in its charter)

Tennessee (Mid-America Apartment Communities, Inc.) 62-1543819
Tennessee (Mid-America Apartments, L.P.) 62-1543816
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

6815 Poplar Avenue, Suite 500, Germantown, Tennessee, 38138
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: [phone]
Securities registered pursuant to Section 12(b) of the Act:

Trading
Title of each class Symbol(s) Name of each exchange on which registered
Common Stock, par value $.01 per share (Mid-America Apartment Communities, Inc.) MAA New York Stock Exchange
8.50% Series I Cumulative Redeemable Preferred Stock, $.01 par value per share (Mid-America Apartment Communities, Inc.) MAA*I New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Mid-America Apartment Communities, Inc. Yes ☒ No ☐
Mid-America Apartments, L.P. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Mid-America Apartment Communities, Inc. Yes ☐ No ☒
Mid-America Apartments, L.P. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Mid-America Apartment Communities, Inc. Yes ☒ No ☐
Mid-America Apartments, L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Mid-America Apartment Communities, Inc. Yes ☒ No ☐
Mid-America Apartments, L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Mid-America Apartment Communities, Inc.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
Mid-America Apartments, L.P.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Mid-America Apartment Communities, Inc. ☒
Mid-America Apartments, L.P. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Mid-America Apartment Communities, Inc. Yes ☐ No ☒
Mid-America Apartments, L.P. Yes ☐ No ☒

The aggregate market value of the 81,749,318 shares of common stock of Mid-America Apartment Communities, Inc. held by non-affiliates was approximately $13.8 billion based
on the closing price of $168.42 as reported on the New York Stock Exchange on June 30, 2021. This calculation excludes shares of common stock held by the registrant’s officers and directors
and each person known by the registrant to beneficially own more than 5% of the registrant’s outstanding shares, as such persons may be deemed to be affiliates. This determination of affiliate
status should not be deemed conclusive for any other purpose. As of February 14, 2022, there were 115,341,027 shares of Mid-America Apartment Communities, Inc. common stock
outstanding.
There is no public trading market for the partnership units of Mid-America Apartments, L.P. As a result, an aggregate market value of the partnership units of Mid-America
Apartments, L.P. cannot be determined.
Documents Incorporated by Reference
Portions of the proxy statement for the annual shareholders meeting of Mid-America Apartment Communities, Inc. to be held on May 17, 2022 are incorporated by reference into
Part III of this report. We expect to file our proxy statement within 120 days after December 31, 2021.
MID-AMERICA APARTMENT COMMUNITIES, INC.
MID-AMERICA APARTMENTS, L.P.
TABLE OF CONTENTS

Item Page
PART I

1. Business. 3
1A. Risk Factors. 9
1B. Unresolved Staff Comments. 23
2. Properties. 23
3. Legal Proceedings. 25
4. Mine Safety Disclosures. 25

PART II

5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 25
Securities.
6. [Reserved]. 27
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 27
7A. Quantitative and Qualitative Disclosures About Market Risk. 37
8. Financial Statements and Supplementary Data. 37
9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 37
9A. Controls and Procedures. 38
9B. Other Information. 39
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 39

PART III

10. Directors, Executive Officers and Corporate Governance. 39
11. Executive Compensation. 39
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 39
13. Certain Relationships and Related Transactions, and Director Independence. 39
14. Principal Accountant Fees and Services. 39

PART IV

15. Exhibits and Financial Statement Schedules. 40
16. Form 10-K Summary. 44