First quarter’s growth and effective rent for Mid-America Apartment Communities is the highest that the company has captured over the past eight quarters. According to the firm’s CEO, Eric Bolton, resident turnover remains historically low levels and rent growth on renewal transactions continue to be strong.
“The increase in combined new and renewal lease rates on a lease-over-lease basis was 240 basis points ahead of the performance in Q1 of last year. We’re of course just now entering the spring and summer leasing season, but we certainly like the trends that we’re capturing as the compounding benefit of steady rent growth continues to make a growing and positive impact,” he said on the firm’s Q1 earnings call.
He added that strong expense control continues to be evident, particularly in the areas of repair and maintenance cost and utility expenses. “Our property and asset management teams continue their record of innovation and expanding use of new technology, while also continuing to leverage the benefits of the larger scale of our platform.”
Beyond these encouraging trends with the same-store portfolio, he says, “our new development portfolio, our current lease sub-property portfolio and our redevelopment pipeline, all continue to come online and will make increasing contributions to FFO over the next couple of years.”
He notes that the company’s “high-growth Sun Belt markets continue to capture steady job growth and solid demand for apartment housing. As pressures are earning high housing and related cost of challenges continue to influence population growth and migration trends across the country, we continue to favor our regional focus. Across our portfolio, average rent as a percentage of monthly income continues to hover over in the 20% range a very affordable relationship. We believe that 3 to 4 cycle, our regional markets will drive job growth and resulting demand for apartment housing that will outperform other regions of the country.”