Good afternoon, everyone, and welcome to Bank of America's Global Real Estate Conference. I'm Josh Dennerlein, and I cover the residential REITs at B of A. I'm pleased to have with us MAA's President and CIO, Brad Hill, and CFO, Clay Holder, as well as SVP, Treasurer, and Director of Capital Markets, Andrew Schaeffer. With that, I'll pass it over to Brad, but I love making these interactive, so I'll poll the field for questions as I go, but I have plenty as well. With that, Brad, I'll pass it over to you. Yeah. Well, thanks, Josh. First of all, if you don't have a package, Andrew can bring one to you. Just let us know if you need something. And agree, would love to make this as interactive as we can here. So for those of you that aren't familiar with MAA and our story, I'll give a brief introduction of who we are, kinda some of the focus areas, and then we can get into questions that you guys have. So, MAA is a S&P 500 multifamily-focused REIT. You know, we just celebrated this year our 30th year anniversary as a public company, so it's a big year for us. You know, our strategy is pretty simple, and our strategy is really to deliver high-quality earnings, a high-quality, recurring earning stream, over the full cycle. And our goal there is really to support a steady but growing dividend. And we believe the best way for us to do that is to deliver superior compounded TSR over a long period of time. And if you look at slide four that we have in our package, really what you'll see is whether you're looking at a five-year period, 10-year period, 15-year, 20-year, you can see that relative performance and that outperformance that I just described. That's our goal. And importantly, when you look at that, we're one of the only REITs of a handful of public REITs that have never suspended or reduced our dividend. And that's a key component of our strategy as we look forward, protecting our ability to pay a dividend. And I think we've really accomplished this through what we would say is our unique and differentiated focus and strategy of focusing on demand. A lot of folks get hung up on the Sun Belt region of the country, these high-growth markets that we're located in, and they really focus on supply. And for us, the biggest factor in terms of generating that long-term TSR performance is really by focusing on demand. It's not the supply levels, and so we really focus our capital deployment strategy on the region of the country that is likely to see the highest demand factors over a long period of time. So if you turn to slide seven, you can see a little bit about where we're focused, where we focus our capital. So if you go up toward the Northeast, we go up through DC, we're throughout the Carolinas as you go down the East Coast. We go as far south as South Florida, and then we go west through Texas, Georgia, Kansas City. We're also in a number of markets in Texas, then you go, as far west as Las Vegas, Nevada, including inside of Las Vegas. We're in Phoenix, we're in Denver, as well, which those may or may not be considered Sun Belt markets, but definitely high-growth markets nevertheless. So demand is our main focus. And if you look at demand in the Sun Belt region, over the last few years, and this year, demand continues to be strong. Absorption in our region of the country has outperformed, and probably held up better than what a lot of folks would have thought, given the amount of supply that we've seen, in our region of the country. We did put out a release showing our results, third quarter, quarter to date. Our blended leases are flat quarter to date. Our renewals continue to hold in there pretty strong at 4%, and our new lease rates continue to feel the pressure of that new supply in the market, but importantly, our occupancy is holding up, and if you look broadly at our market, pointing to the demand factors and the demand levels that I just mentioned, as a market, absorptions are high, and we're hanging in there from an occupancy standpoint. We're not digging a hole that we have to dig out of from an occupancy standpoint, which leads us to believe that the recovery in 2025, late 2025, 2026, and 2027 should be pretty compelling. The other thing I would just draw your attention to is the bottom of slide seven. So in addition to focusing on really the high-demand region of the country, we're further differentiated from a number of our peers just by the number of markets that we're focused in, the diversification that we have by market, by sub-market. We're in more states than any of our peers, and then we look to further diversify within those markets by product type. You'll also see in there, we have multiple product types, high-rise, mid-rise, garden, properties. We're also diversified by price point, and we believe this gives us exposure to a broad segment of the rental market, which positions us very well in times like this, where we're facing competition. Finally, we also further diversify by including exposure to some mid-tier markets. Just on the chart there and on page seven, you'll see us focus capital, not only in larger markets like in Atlanta, Dallas, which are some of our largest markets, and Tampa. But you'll also see us allocate capital to mid-tier markets like Charleston, Greenville, Savannah, Jacksonville, markets like that. We think that's a very important part of our strategy, and really helps provide less volatility in our earnings stream. But the knock on the Sun Belt has always been the amount of supply that can come into the market, and it's really over the long term really just hasn't been an issue for us. The demand generally has always held in there and helped us weather the storm of supply periodically. You know, what we always say is we wanna have a product and be located in a market where somebody wants our product. The problem is when you have a product that nobody wants. And so the demand-induced down cycle is much more problematic for folks than a supply-induced down cycle. And so, again, our strategy is to outperform in the full cycle, and if you compare where we are today, we're in a supply-driven down part of the cycle for us. Our forecast for this year is that our NOI would decline by 1.3%. And that's in a supply environment, the highest it's been in fifty years. If you contrast that with some of the down cycles that we've seen historically, you go back to 2002, 2009, 2010, 2020, where we saw a demand down cycle, you'll see our peer returns were off between 5% and 6%. Their NOI performance was down 5%-6%. So that starts to give you a little bit of a comparison of how we've constructed our portfolio, how our strategy helps us focus on the highest demand region and the results, and how we're able to get to the TSR results that I just mentioned. A couple other points I'll make, and then we can go into questions. Going forward, a major focus for us as an organization is on driving incremental earnings growth, and we're focused on doing that through our existing portfolio. We have a number of margin expansion opportunities that we have done over the last few years, and some that we continue to do and continue to implement. We're also focused on customer service with our residents, certainly recognizing that the most profitable lease that we can write as an organization is our renewal lease, and so the higher customer service that we're able to provide our residents, the more likely they're gonna stay with us. So we're highly focused on that: continued focus on redevelopment and repositioning. Certainly, the supply that's coming into the market continues to support our ability to do that. And then the last point I'll make is just on the balance sheet. Our balance sheet continues to be well-positioned with leverage very low, lots of capacity for us to be able to execute. So we're also looking to grow earnings incrementally through external growth. We're really leaning into development at the moment. We have about $1 billion under construction today. We've really worked to grow that pipeline over the last couple of years and plan to continue to have it at that level. Acquisitions is a focus for ours as well. This year, our forecast is about $400 million in acquisitions. We are well on our way to hit those, and we're able to achieve stabilized NOI yields approaching 6%. I didn't mention this, I'll just mention this real quick, but on developments, anything we're starting today, the yields that we're able to achieve on those is about a 6.5%. So very accretive use of capital, really gearing up the portfolio to be able to drive that incremental earnings growth, especially as we get into 2026, 2027, where these new deliveries will deliver at a time where the supply pipeline will be much less than it is today. Interesting. I could say it was about a year ago, we had met and did a similar roundtable, and I think things were kind of fine at that point, and then afterwards, September, October, the demand things started to kind of roll over. Yeah. I guess, one, in hindsight, like, what happened that was missed? And then how do we get comfort that that won't happen again this year? Yeah. Yeah, I mean, as we look at kind of the macroeconomic environment that we were in at this time last year, I would say it's completely different this year. Going into this time last year, you know, the outlook for interest rates was much higher. Interest rate, the ten-year, was close to 5% at this time last year. You know, at that point, we were debating what level of job loss were we gonna have? You know, were we gonna have a recession or not at that point? Inflation was running extremely high at that point, and the supply wave was really ahead of us. It was really to come. And so there were a lot of pressure points at this point last year. As we sit here today, I would say all of those have been resolved to the positive. Interest rates clearly are down from where they were this time last year. Inflation is trending down considerably from where it was this time last year. The supply pipeline, we have clear indications that that is trending down below long-term averages in terms of new starts. So there is definitely a benefit on the horizon. We're also seeing clear evidence that there is a market for these properties within our region of the country, where things are still transacting in the I call it 4.75%-5% cap rate range. So there's a market out there. So the mentality is a little bit different at this time this year than it was last year. Having said that, I think you'll still see seasonality in the fourth quarter, as we always do. You know, as we look at our results that we just put out, you compare June to August performance this year versus last year. Last year, June to August, our blended lease rates were down 220 basis points. This year, June to August, we're down 40 basis points. So what we're seeing in the market today is more typical seasonal downturn in terms of the new lease rates. That's where the pressure is generally seen. It's very consistent with pre-COVID seasonality trends, and really nothing more than that we're seeing in the market at this point. How should maybe of last year's kind of like slippage in new lease rate kind of presents an opportunity just on the base effects? Like, how do we think about the base effects from what we've, what's been reported through August through like the balance of the year, and how we should think about like the growth rates? Yeah. I think as you kind of think through the back half of the year, I mean, you're still gonna see negative new lease pricing, and that's typical for, you know, just over the overall seasonality curve. But I think as we get to some of these through the back half of the year, especially the fourth quarter, you're gonna get some easier comps as you're looking at with it. So I would expect it to still be negative, but I don't think it'll be nearly as negative as what we saw last year in the fourth quarter. How sustainable? You've gone from 11 to today, 9% gap between renewals and new leases, but how sustainable is that gap, 9%-10%? I mean, tenant's okay is gonna ask the mover, but- Yeah You know, I don't, I don't know how stupid, not stupid, but these guys are, for how long? Yeah. Well, certainly, the gap today at 1,000 basis points is probably a little bit wider than, wider than normal. In the fourth quarter of last year, it was about 1,100 basis points, so we have been a little bit wider than normal. I would say in the first quarter, fourth quarter, it's common for that to be 900 or so basis points. In the second and third, you're gonna be 600 or so basis points, so we're a little wider than that at the moment. What we're watching there is the move-outs, the move-out reasons, folks that don't, you know, moving out because they don't wanna pay the rental increase. And what we've seen in that metric is it, it's actually trending down. It's not going up. Folks, leaving us today because they don't wanna pay the rental increase is about 8%-8.5% or so. So it's still very, very manageable. The other thing I'd say is the actual dollar amount between a new lease and a renewal is about $130. So what we're asking those residents to do is to pay a renewal that's $130 more than a new lease. So on a 12-month basis, you know, that's $2,000 or so dollars. You know, that's for most of them, it's too much of a hassle to move over that. The other piece of that, I would say, is that we're very intentional in how we're focusing on customer service for our residents, as I've mentioned in my comments. If we're able to go in and take care of that resident, both from our leasing staff in the office as well as our maintenance folks, if we're able to hit our maintenance metrics in terms of the maintenance request that we are fulfilling in 24 hours and 72 hours, and meet the needs of those residents, their satisfaction will be really high, increasing our likelihood of retaining a renewal. Google score is something we really focus on. We have the highest Google Score rating of anyone in the space, and we think that that also helps our ability to be able to retain these residents and continue to get strong renewals. So we'll monitor that percent to move out, because they don't wanna pay the rent increase, and if we see that start to move, then we can adjust our tactics, but it's actually moving the other way at this point. Other questions from the field? I got another one. Yep. [audio distortion] affordable rents, but is there some offset to that, that people have to move to buy a home? Yeah, I mean, I think on the margin, you probably could see a little bit of movement there. Move out today to buy a home is 12.5% or so of our folks. So it's pretty small. It's obviously been trending down. I think the important thing to note is that, you know, the average cost of a home in our region of the country has increased 55%-60% over the last five years. So take interest rates off the table for a moment. That, you know, rent-to-own gap is still substantial without considering interest rates. Then I think when you start looking at interest rates, in order for the existing inventory to really become available, I think interest rates have to come down quite a bit. The majority of interest rates that are out there today are below 4%. So for folks to put their house on the market and move, it generally has to be some event occurring in their life, and I think other than that, interest rates need to come down quite a bit. The other thing that could drive that up is that, you know, the home builders could increase their inventory and their construction. We're not seeing that at this point, but if that picked up like it did pre-GFC, we performed quite well because that normally creates jobs within the market, which is a positive for us. So we don't see anything on the near-term horizon that makes us believe that the single-family piece, even if interest rates come down, really changes that affordability trade-off very much. It might move on the margin. 1.5% in 2021. 2021 is probably closer to 20. It was 14.5% last year, and back in 2021, it was probably pre-COVID, it was probably closer to 20. ...The other piece I would say on interest rates, you know, to the extent that folks have some type of variable rate debt, whether it's, you know, student loans, car loans, credit cards, that's actually going to be a benefit for the residents and their spending ability. So I think there's some benefit on that side that would show up as well. Brad, you mentioned margin expansions, and kind of what you're commenting on ties into a question I've been asking, like, every company I've had. A big focus of mine is just on platforms, like rates or permanent capital vehicles, or its ability to kind of invest for the long term. It sounds like you have some platform initiatives, and you want to drive the margin growth. Like, can you walk us through those and where you see that going from here? Yeah, I, you know, I think if you look at slide 25, we've got a number of the things that we are focused on, have focused on, continue to focus on. You know, if you look at those various technologies, smart home technology clearly is something that we've leaned into our entire portfolio of close to 103,000 units today. We basically have smart home technology rolled out, and that is really an enabler for other things that we can do on our properties, whether it's self-touring, whether it's on the maintenance side, drive some efficiencies in that way. We have done a number of initiatives on the sheet today, and today, we have in our run rate about $50 million worth of NOI improvements with some of these initiatives that we've already deployed. You know, going forward, I think near term, over the next few years at least, one of our main focuses will be on property-wide Wi-Fi. We're pretty early in that at this point. We're testing that at a few properties. That's something that the industry is really going towards. A lot of benefits of that for us to be able to provide coverage across our full property, and the benefits that provides to our residents. That's something that we're really early on. That'll be a multi-year rollout of that. But as you see there, that could ultimately be an opportunity of $30 million or more. Centralization, we're early in that. We have a number of functions that we have centralized, whether it's, you know, our collections, or whether it's some of our renewal practices. We've got some centralization that has occurred there. We are testing centralized lease administration, really with the goal of taking some of the transaction-related activities off of the properties to free them up, really, to focus on customer satisfaction and customer service. So we're working through some pilots, in those areas at this point. So I think the centralization piece will be another area that'll be an opportunity for us that we're really early in on, at the moment. I guess, have you guys quantified, like, the potential total margin expansion that, like, these initiatives could add to the...? I think the number that we have said previously is somewhere in the 200-300 basis points margin expansion opportunity with all of these combined. Obviously, some of those are already implemented at this point. Some of them are fully in the run rate, some are not at this point, so we'll continue to incrementally improve that over the next few years. Okay. Any questions from the field? Maybe just, you did mention, I think you're leaning into development today. Why do you think that's, like, the right external growth avenue in this environment? Yeah, well, in this environment, it's where we're finding more opportunities at the moment. So we have grown our development pipeline, as I mentioned, to $1 billion. You know, we've been focusing on that growth for some period of time, recognizing that given our scale, external growth needs to be a significant portion of our growth story going forward. And it's really hard to move the needle without a broad initiative like that to do it just through acquisitions. Acquisitions for us is a bit spottier. It's lumpy. You can't plan it quite as well from a capital allocation perspective. And it's really more dependent on market dynamics. Certainly, the development is also dependent on market dynamics, but to some degree, we can control our own destiny with that a bit. Acquisitions, we would love to do more in that market. We've had some success in the acquisition market, but our strategy really is to find acquisitions that where we're able to use some type of strength that we have to generate excess value. For us, we're able to go out and execute on these acquisitions, call it $400 million this year. We're executing those in a high 5%-6% NOI yield range. Today, if we were to go out and issue unsecured bond financing, we'd be call it 4.7-4.8. That's a pretty good value proposition for us to be able to do. Problem is, we can't do a $1 billion, $2 billion of that, but we also don't need to. That's a good incremental earnings opportunity for us. We're not reallocating capital from specific markets to other markets. We like where we're located, we like our portfolio breakdown between our markets, so we just feel right now, development from a risk-adjusted perspective, at 6.5, delivering into a market in 2026, 2027, where the supply environment is gonna be significantly less than it is today, feels really good use of capital at this point. Brad, how would you think about the rental IRR, toggle IRR on the developments? Yeah, it depends on the project, but we're generally somewhere on a levered IRR basis. Generally, how we look at it, we're in the 9%-10% range on our developments. It's only about 100 basis points less than that. How are you underwriting the risk around—like, if these projects are delivering 2026, 2027, how are you underwriting, like, the risks that, like, the current supply could, like, impact market rents? Yeah, I mean, we're. Well, one, we very conservatively underwrite any development deal. If you look at our current pipeline that is delivering today in this environment where there is excess supply, we're significantly outperforming our original expectations. The projects that are delivering today, they're outperforming on rents by 15-20 basis points. So, our yields that we underwrote were around a 5.7. We're delivering 6.5 even today. So, from a conservative standpoint, we underwrite everything very conservatively. So I think, that helps protect us a little bit, in terms of, if the market supply in 2026, 2027 were to surprise to the upside a bit. I think the other part of that is we're betting on demand. If you look at our region of the country, the demand dynamics continue to be very positive. And it, as you look out into 2025, 2026, 2027, we think the demand dynamics in our region of the country, if you look at the pro-business environment, you look at the corporate relocations, you look at the manufacturing jobs, which a lot of those facilities are just under construction now, so the real job growth hasn't started yet. We think the long-term demand aspects in our region of the country are likely to be higher going forward than they were historically, which I think also supports the notion of delivering more product into that environment. And that approach, does that put a strike through some sense of regulation? Yeah, I don't know if it puts a strike through, but it definitely puts a lower probability of regulation. 90% of our NOI comes out of states that has a state prohibition against local rent control, so it makes it a lot less likely. Other questions from the field? Maybe, turning to Clay. Sorry. Oh, yeah. Yeah, yeah. [audio distortion] in states that have prohibitions against rent control? It's in the state constitutions. In the constitution? Yeah. So- Correct. [audio distortion] Correct. [audio distortion] No, I would say Austin takes the cake in terms of the supply pressure and being more impacted there. The other markets that are high supply, that are being more impacted are Jacksonville, Florida. That one's sets apart. Generally, our mid-tier markets are performing better because they don't have quite the supply pressure. Jacksonville, obviously, is an exception to that. Phoenix is seeing higher supply pressure as well. I would say the positive with both Phoenix and Austin is that the job machines there are pretty robust. So I think once the supply spigot kinda cuts off in those markets, which it has, it's come down, but it did it later than other markets, so we're gonna have, you know, higher supply for a little bit longer in those markets. I think the job market there will overtake the supply. Again, we're not building a hole in occupancy. Even in those markets, we continue to hold up pretty well from an occupancy standpoint. So I think the recovery could be pretty significant, and rapid, if the job market continues to hold up in those markets. Maybe turning to Clay. Brad, you just said you have to fund $1 billion of development. I guess, how are you thinking about it from your seat? And I think you have one of the lowest levered balance sheets out there, just like, when do you start to lean into that? Yeah. Yeah. So today, we're sitting at 3.7 x leverage. You know, we've stated that we would like to go up to 4.5x-5 x. So, you know, the math on that turns out to be about $1.5 billion. So that's probably where the first, you know, first amount of that capital is coming from is from the debt markets. You know, we'd probably wanna maintain somewhere right around there. We could go up higher, a bit, but, you know, the main focus there is we wanna maintain our A- credit rating. And so we're very focused on protecting that and making sure we don't do anything that we would upset that rating. Okay. And you just have a couple small refinancings? Yeah, so we've got one refinancing. We had two this year, earlier this year, and we've got another refinancing in November of next year. It'll be at about a 4.2 effective rate that we'll be refinancing. But between now and then, I'd expect us to be back in the market again and looking to issue some debt to fund some of this growth opportunity that Brad's been talking about, and that we'll look to continue to do from both an acquisition and development standpoint. Any other questions from the field? Yes. [audio distortion] Is there... Do you ask the tenants, and is there ways to get [audio distortion] Yeah, I think that would be tough. Generally, what we found is, you know, the decision to move out to buy a home is driven by a change in some event in your life. Either you get married, you have kids, or something of that nature. So normally it's a life decision that drives that, not necessarily just that homes are more affordable. The other thing I'd mention is, in our demographics, 80% of our resident profile are single, and that generally doesn't lend itself to, you know, singles just going out and buying a home because, you know, they've become a little bit more affordable. Again, generally, it's correlated more toward getting married or some type of life event like that, which would be pretty hard to forecast and ask our residents. So it's not really something that we've done. ... Other questions? Maybe we didn't touch on just the redevelopment strategy and some of the value-add work you're doing. Like, is that something you can accelerate into 2025, or, or how are you thinking about kind of the pace of that program? Yeah. That's a program that we've been focused on intently over the years, and it's one of our most value-add uses of capital is going in there and redeveloping that unit, putting in new countertops, new appliances, you know, faucets, and those sorts of things. It's been very beneficial for us 'cause we can go in and raise the rent on that unit. We've... Given the supply pressure that we've seen this year, we've slowed that program down a bit. Not a whole lot, but a bit. But as we look forward into 2025 and beyond, we think that we can continue to lean into that particular program, especially as, you know, all this new supply is delivered, begins to be absorbed. That will allow us to be able to go in and better compete with some of that supply, you know, kinda shorten that gap between, you know, our unit price versus this new supply price that would be coming into our markets. Really, we have two programs that we're focused on there. One, that's our redevelopment program that Clay just talked about. We go in and renovate a kitchen and bath. You know, we'll increase that a little bit next year, and that's one of the benefits of the supply coming into our market. Generally, the new competitive supply is $300+ more per unit per month, on average, than what our existing rents are. So that provides us a little bit of that opportunity to be able to go in and renovate our units, and compete, really, change our comp set and really drive additional growth there. The other piece, other than our redevelopment, is our repositioning. That's where we go in and we completely renovate the amenity area, renovate the clubhouse, and we're able to again increase our rents associated with that component too, and really drive toward a higher comp set again related to that. We'll have, you know, six or eight properties that we do every year under that program as well. So both of those together will be an ongoing you know focus of ours to continue to grow those earnings associated with our existing portfolio. Awesome. So we're basically at time, but we have three rapid-fire questions we've been asking every company. They're multiple choice, so not too hard. The first one is: Do you expect real estate transactions to increase once the Fed starts to cut? Yes or no? Yes. If yes, when do you expect them to pick up? A, 4Q 2024, B, first half 2025, or C, second half 2025. First half 2025. How would you characterize demand for space today? A, improving, B, steady, C, weakening. Uh, steady. Last year, the majority of companies at our conference stated they expected to ramp up spending on AI initiatives in 2024. How would you characterize your plans over the next year? A, higher, B, flat, C, lower. Higher. Awesome. Thank you, guys.