Good morning and welcome to Mid-America Apartment Communities, or MAA's Third Quarter 2024 Earnings Conference Call. During management's prepared comments, all participants will be in a listen-only mode. Afterward, the company will conduct a question-and-answer session. In the interest of time, the company has requested a two-question limit. This conference call is being recorded today, Thursday, October 31st, 2024. I will now turn the call over to Andrew Schaeffer, Senior Vice President, Treasurer, and Director of Capital Markets of MAA for opening comments. Thank you, Julianne, and good morning, everyone. This is Andrew Schaeffer, Treasurer and Director of Capital Markets for MAA. Members of the management team participating on the call this morning are Eric Bolton, Brad Hill, Tim Argo, Clay Holder, and Rob DelPriore. Before we begin with prepared comments this morning, I want to point out that as part of this discussion, company management will be making forward-looking statements. Actual results may differ materially from our projections. We encourage you to refer to the forward-looking statements section in yesterday's earnings release and our 1934 Act filings with the SEC, which describe risk factors that may impact future results. During this call, we will also discuss certain non-GAAP financial measures. A presentation of the most directly comparable GAAP financial measures, as well as reconciliations of the differences between non-GAAP and comparable GAAP measures, can be found in our earnings release and supplemental financial data. Our earnings release and supplement are currently available on the For Investors page of our website at www.maac.com. A copy of our prepared comments and an audio recording of this call will also be available on our website later today. After some brief prepared comments, the management team will be available to answer questions. I will now turn the call over to Eric. Thanks, Andrew, and good morning. Third Quarter Results for Core FFO were ahead of our expectations as same-store NOI came in better than our forecast. Based on our analysis, we believe that peak deliveries of new supply that is impacting our submarkets and properties occurred this past third quarter. Despite this record high supply pressure in Q3, we were able to capture solid performance in occupancy, record low resident turnover, strong collections, and better than expected performance with operating expenses, which all contributed to the third quarter NOI results. In addition, as Tim will detail in his comments, we are beginning to see early trends with new lease pricing that support our position that the worst of the pressures on pricing for new supply are likely behind us. As we have been discussing for the past year or so, we are now poised to see moderating trends in the amount of new supply deliveries that are impacting our portfolio as we head into 2025. We expect to see normal seasonal leasing patterns for the next couple of quarters and remain convinced that the spring leasing season will usher in the start of a recovery cycle with more favorable leasing conditions as demand and absorption trends across our markets remain strong and the volume of new supply deliveries steadily declines. With strengthening leasing conditions, significant redevelopment opportunity in our existing portfolio, and meaningful efficiency gains from various new technology initiatives, we are excited about the upside outlook from our existing asset base. This momentum, coupled with the significant expansion of our external growth pipeline from our in-house new development projects, our pre-purchase joint venture program, and our recent new property acquisitions, all combine for what we believe is a positive outlook for meaningful value growth. Before turning the call over to Brad, I'd like to send my appreciation out to our MAA associates for their tremendous work and great results over this very busy third quarter. Now I'll turn the call over to Brad. Thank you, Eric. And good morning, everyone. MAA's long-term strategy of focusing on high-growth markets and diversifying within those markets uniquely positions our portfolio to benefit from the continued strong demand and our footprint. As an attractive, more affordable alternative to much of the higher-priced new multifamily supply being delivered, as well as the available single-family housing options, our residents are choosing to stay with us longer, with only 11.5% of our move-outs occurring due to residents buying a home. Our customer service is reflected in our Google scores, which continues to lead the sector, supports our strong renewals, and record low turnover rate. With our 60-day exposure, which represents all current vacancies and notices over the next 60 days, 30 basis points better than last year, and new deliveries poised to decline, our communities are well-positioned for the seasonally slower months and for what we believe will be a stronger leasing environment in the spring and summer of 2025. Throughout this year, we've continued to make progress using our balance sheet capacity to support future earnings growth. In the third quarter, we added two new projects to our under-construction development pipeline, bringing our total under-construction developments to eight projects representing 2,762 units at a cost of approximately $978 million, a record level of development for MAA. In addition to the previously disclosed 239-unit The Charlotte, project, where we provided financing to take out the equity partner on an under-construction community, we also closed and started construction on a 360-unit community in Richmond, Virginia, in the third quarter. The Richmond project was a fully entitled shovel-ready development that we took over from a developer who was unable to obtain financing. The Charlotte, project should deliver first units in the third quarter of 2025, and we expect the Richmond project to deliver first units in the first quarter of 2027. We expect to start construction on one more project during the fourth quarter, bringing our total development starts for the year to five at a cost of $508 million, exceeding our original guidance for the year. We expect these projects to deliver an average expected stabilized NOI yield of 6.3%. With our development pipeline approaching $1 billion, our focus turns to maintaining our pipeline at this level going forward. Pre-development work continues on a number of projects in our pipeline, which now includes 10 projects representing future growth of over 2,800 units at an expected cost of $1.1 billion. We have seen some construction cost declines in a few markets and remain hopeful that as the total under-construction pipeline in our markets continues its steep decline, we could see further improvement in construction costs and schedules as well as we get into 2025, supporting our ability to start construction on additional opportunities at compelling yields. In the transaction market, volume remains relatively low, with cap rates trending down into the high 4% range. Our team continues to find select but compelling acquisition opportunities at pricing the market cap rates, generally in lease-up and often on an off-market basis. In the third quarter, we closed on a 310-unit suburban property in Orlando for approximately $84 million, approximately 10% below replacement costs. This newly constructed property is nearly stabilized at just under 90% occupancy. Subsequent to quarter-end, we closed on a 386-unit mid-rise property in the Knox- Henderson area of Dallas at pricing 15% below current replacement costs. This property just wrapped up construction and is in its initial lease-up. This brings our total acquisition volume for the year to just over $270 million at an average stabilized NOI yield of 5.9%. Our team is actively evaluating other acquisition opportunities, and we are hopeful we'll close another compelling acquisition before year-end. Subsequent to quarter-end, we sold a 216-unit property in Charlotte, North Carolina, for $39 million, and we have an additional property in Richmond, Virginia, under contract to sell with an expected closing during the fourth quarter. We have two more properties in Columbia, South Carolina, on the market with a likely closing in early 2025. Before I turn the call over to Tim, I want to echo Eric's comments to our associates. Thank you for your hard work and dedication during this busy third quarter. With that, I'll turn it over to Tim. Thanks, Brad. Good morning, everyone. As noted by both Eric and Brad, various demand metrics we track remain strong, partially mitigating the impact of new supply deliveries that we believe peaked in the third quarter. 60-day exposure is better than at any point over the last five years. The seasonal deceleration of new lease pricing is less than the prior year and pre-COVID periods, and absorption remains strong. However, pricing growth, particularly on new leases, continues to be impacted by elevated new supply deliveries, but as noted, showed less seasonal deceleration than we typically see this time of the year. For the third quarter, new lease pricing on a lease-over-lease basis was -5.4%, just a 30 basis point decline from the second quarter compared to a 270 basis point decline over the same period last year. In fact, 10 of our top 15 highest concentration markets showed new lease-over-lease growth acceleration from the second to third quarter. Renewal rates for the quarter stayed strong, growing lease-over-lease basis. These two components resulted in lease-over-lease pricing on a blended basis of - 0.2%, also a 30 basis point decline from the second quarter and compared to a 220 basis point decline over the same period last year. Average physical occupancy was 95.7%, up 20 basis points from the second quarter, demonstrating the strong absorption in our markets. Collections continued to outperform expectations, with net delinquency representing just 0.4% of billed rents. All these factors drove the resulting same-store revenue that was in line with the third quarter of 2023. Along with the demand metrics noted, our unique market diversification strategy that Brad mentioned continues to benefit overall portfolio results. As we have mentioned previously, several of our mid-tier markets are holding up better in this higher supply environment. Savannah, Richmond, Charleston, Greenville, and our Fredericksburg and our other Northern Virginia properties are all outperforming the broader portfolio from a blended lease-over-lease pricing standpoint. Particularly in a down cycle, our portfolio balance between large and mid-tier markets helps strengthen overall portfolio performance. Also, as has been the case all year, Austin, Atlanta, and Jacksonville are markets that continue to be more negatively impacted by the absolute level of supply being delivered into those markets, with Austin being the toughest challenge of all the markets. We continue to execute on our various redevelopment and repositioning initiatives where it makes sense in this elevated supply environment, with the expectation of starting to re-accelerate next year. For the third quarter of 2024, we completed over 1,700 interior unit upgrades, achieving rent increases of $108 above non-upgraded units. We are encouraged by the strength of this program in this competitive environment, demonstrated by the fact that these units lease quicker on average than a non-renovated unit when adjusted for the additional turn time. For our repositioning program, we have two active projects that are in the repricing phase with NOI yields approaching 10%. We have an additional six projects underway with a plan to complete construction and begin repricing in the spring of 2025 in what we believe will be an improving leasing environment. As we wrap up October, we are seeing normal seasonal moderation, but are encouraged by demand that should continue to keep the sequential seasonal pricing deceleration better than historical trends. Our 60-day exposure of 6.3% should serve to keep occupancy stable and allow for more pricing power than last year as we also start to lap new lease pricing that weakened significantly during the fourth quarter of last year. Absorption remains strong in our markets, with the third quarter representing the first time since the first quarter of 2022 that units absorbed exceeded units delivered. Therefore, there is not a significant backlog of inventory needing to be absorbed. Accordingly, October new lease pricing is within 10 basis points of September new lease pricing, demonstrating this demand and our expectation of less seasonal moderation in the fourth quarter than we normally experience. Furthermore, lease-over-lease rates on accepted renewals for November and December are in the 4.25% range, and we will only reprice approximately 16% of our leases in the fourth quarter, which minimizes the impact of this moderation on the portfolio. As we have discussed over the last few quarters, new supply deliveries continue to be a headwind in many of our markets. However, we still believe the near-term outlook is in line with what we have discussed the last few quarters. That is, we expect this new supply will begin to moderate and that we have likely already seen the maximum impact of new lease-over-lease pricing growth and that the supply-demand balance continues to improve from here, subject to normal seasonality. At a portfolio level, construction starts in our footprint peaked in mid-2022, and we have seen historically that the maximum pressure on leasing is typically about two years after construction starts. That's all I have in the way of prepared comments. I'll now turn the call over to Clay. Thank you, Tim, and good morning, everyone. We reported Core FFO for the quarter of $2.21 per share, which was $0.05 per share above the midpoint of our third quarter guidance. Just under $0.03 of the favorability was related to favorable same-store expenses, with an additional $0.02 driven by a combination of favorable overhead cost, interest expense, and non-operating income. Our same-store revenue results for the quarter were relatively in line with expectations. As Tim mentioned, same-store revenues benefited from strong occupancy during the quarter. Our same-store expense performance, particularly real estate taxes, was favorable compared to our guidance for the quarter. We received property valuations for our Florida portfolio, which were lower than our expectations. Repairs and maintenance costs continue to show moderation, growing at 2% compared to third quarter last year. During the quarter, we funded nearly $167 million of development costs of the current $978 million pipeline, leaving an expected $368 million to be funded on this pipeline over the next two years- three years. We also invested approximately $13 million of capital through our redevelopment and repositioning programs during the quarter, which we expect to produce solid returns and continue to enhance the quality of our portfolio. Our balance sheet remained solid. We ended the quarter with just over $800 million in combined cash and borrowing capacity under our revolving credit facility, providing significant opportunity to fund future investments. Our leverage remains low, with net debt to EBITDA at 3.9 x. At a quarter-end, our outstanding debt was approximately 90% fixed, with an average maturity of seven years at an effective rate of 3.8%. Finally, we are reaffirming the midpoint of our same-store NOI and core FFO guidance for the year while revising other areas of our detailed guidance that we've previously provided. Given our operating results achieved through the third quarter, we are slightly adjusting the midpoint of effective rent growth guidance by 15 basis points to 0.35% and revising total same-store revenue guidance for the year to 0.5% at the midpoint. With property valuations for our Florida portfolio now known, we have more insight into our overall real estate tax expense for 2024 and are lowering the midpoint of our guidance to 2%. This results in the lowering of our property operating expense growth projections for the year to 3.75% at the midpoint. The changes to our property operating expense projections, combined with our updated same-store revenue expectations, results in reaffirming our original midpoint expectation for same-store NOI at - 1.3%. In addition to updating our same-store operating projections, we are revising our 2024 guidance to reflect favorable trends in G&A and interest expense. These adjustments, combined with the $0.02-$0.03 of estimated impact of cleanup costs related to storms in the fourth quarter, result in us maintaining the midpoint of our full-year core FFO guidance at $8.88 per share while narrowing the range to $8.80-$8.96 per share. Including the fourth quarter, we estimate our 2024 results will include approximately $0.08-$0.09 of total storm cleanup costs compared to $0.01 of cost included in our initial 2024 guidance. That is all that we have in the way of prepared comments. Julianne, we will now turn the call back to you for questions. Thank you. We will now open the call for questions. If you would like to ask a question, please press star then one on your touch-tone phone. If you would like to withdraw your question, you may press star one again. Our first question comes from Jamie Feldman from Wells Fargo. Please go ahead. Your line is open. Great. Thanks, and good morning, and thanks for taking the call or the question. I guess just to start, can you talk about your 4Q expectations for blended rent growth and occupancy? You may have run through them, but I think it went kind of quickly. I don't know that I got it all. But I guess just trying to figure out, if you think about year-end occupancy, you sounded pretty positive on demand and on renewals. So just what are you thinking at year-end and how 4Q looks for occupancy and blends? Yeah. Jamie, this is Tim. Yeah, I think in terms of occupancy, pretty consistent with where we are right now. We're 95.4% currently. I think 95.4%-95.5% for Q4 is a range we're comfortable with, particularly with where we see exposure right now. As I mentioned in my comments, the renewal rates that we're getting for November and December are in the 4.25% range. So call it 4%-4.5% for the fourth quarter in terms of renewals. And then on new lease pricing, we mentioned the new lease pricing for October moderated only about 10 basis points from September. It was 6.9% in September, 7% in October. I think you see a little bit of moderation from here, but not much, and see less deceleration than we typically do, as we commented in the call. Okay. Thank you for that, and then, I mean, guidance, full-year guidance now seemed conservative when you first gave it. As we think about 2025, I mean, is there still a lot of juice to get on the expense side that could help you with efficiencies or anything else? Or do you think you get back to more of a normalized growth rate? Yeah. I think just kind of thinking through the expense structure, I mean, starting with real estate tax expenses and insurance, the growth that we've seen in real estate tax expenses of 2%, I believe that will be a little tough to repeat that level at next year. I would think that that would get to more of a normalized growth rate, call it somewhere between 3%-4%. But I believe that that would be appropriate for real estate taxes. Insurance, we had the slight decrease in our premium renewal this past July. And so we'll get that for the first half of next year. And then we'll have to reprice in July of next year. Hard to say at this point where that's going to ultimately end up. I don't think it gets back to the levels of increases that we saw over the past couple of years, but I also don't think it's going to be flat either. So somewhere in the 5%-10% range, keeping in mind that insurance is just a small piece of our overall expense stat. And in regards to personnel costs, I think that that continues to moderate a little bit. And as we get some of these inflationary impacts behind us, similar things for repair and maintenance. We've talked about some of the moderation we've seen this past year in repair and maintenance. I don't know that we'll be back at that level in 2025, but I think it will also be more of a reasonable growth rate, something around 3%-3.5%. Marketing expenses, I think, would be the other one to call out that may continue to run a little high in the first half of the year, but I would expect that to come back down as we comp some of these increases that we've seen this past year. Okay. Great. Yeah, that was super helpful. Thank you. Our next question comes from Josh Dennerlein from Bank of America. Please go ahead. Your line is open. Yeah. Hey, guys. Thanks for the time. I'm just kind of curious. Is there any way to kind of quantify the impact of the deliveries on that new lease rate growth? Are there any good examples of markets where you didn't really have supply pressure and maybe just how the new lease rate growth trended in those markets versus the more supply-heavy markets? Yeah. I mean, there are a couple of markets. Austin, as we've talked about all year, continues to be our most challenging market. And we saw new lease rates in Austin pick up in a negative way quite a bit from Q2 - Q3. We saw a little bit in Raleigh, but I think the point as far as Q3 is concerned, it was pretty targeted to a couple of markets. I made the comment in the prepared comments that out of our 15 highest concentration markets, we actually saw 10 of those 15 new lease rates accelerate. So actually, if you pull out, if you focus on just Austin and pull the new lease rates in Austin out of both the Q2 and Q3 numbers, we actually would have seen new lease rate from Q2 - Q3 accelerate about 10 basis points as opposed to a 30 basis point decline. So certainly, Austin was a big driver. Atlanta continues to be a struggle, but obviously, we feel really good about Austin long-term as it's just working through a lot of supply, but it did have an outsized impact on what we saw with new lease rates. Interesting. And then in those higher supply markets, were those also skewing renewal rates down as well? Do you have a similar stats for renewal if you strip out Austin for the high supply markets? Yeah. I mean, it impacts renewals to some extent. So if you think about for the third quarter, renewals were somewhere in the 4% range, 4.1%. Austin was 1.5% to give you some perspective on that. So it does tend to impact renewal rates a little bit, but we certainly see much stronger renewal spreads than we do even for some of those more challenging markets. Cool. No, appreciate the color. Thank you. Our next question comes from Nick Yulico from Scotiabank. Please go ahead. Your line is open. Hey, good morning, guys. It's Daniel Tricarico. Along with Nick, I wanted to clarify how you're thinking about this peaking of supply ultimately impacting market rent growth next year. I'm obviously not talking guidance, but there's obviously still a lot of units to absorb. So just curious how you'd see that relative change in supply impacting the seasonal curve and market rents in those higher supply markets. Yeah. I mean, as we've talked about, supply definitely peaked sort of the mid to second, third quarter of 2022, and that's pretty consistent across all our markets. Some of them lagged or were ahead of that maybe a quarter or so, but pretty consistent. So as we talked about, we think about two years from start is when we see the maximum amount of pressure, which is kind of about right now and what we saw in Q3. And I think we'll see a little bit of moderating pressure in Q4, won't necessarily show up with seasonal moderation and just less traffic, less leases expiring. So I think as we get into the spring and summer, I would expect we'll see normal seasonality just like we would any other period, but start to see some strength, particularly on the new lease side as demand picks up seasonally and as the impact of the moderating supply, which we think in general supply is probably down 20% or so in 2025 as compared to 2024. So should start to see that strength as we get into the spring. No, that's great. Thank you. And then can you just quantify what you'd expect the loss to lease and revenue earning to be at the end of the year? Yeah. I think in terms of earnings, if you think about our blended lease-over-lease expectations for full year 2024, it's somewhere in that negative 3% range, and half of that, if not a little more, carries over into 2025, which kind of drives the earnings, so slightly negative, call it 20 basis points-30 basis points, somewhere in that range where we sit right now in terms of earnings. Our next question comes from Michael Goldsmith from UBS. Please go ahead. Your line is open. Morning. Thanks a lot for taking my question. Absorption was clearly a positive in the quarter. Do you assume that absorption levels continue through the remainder of the year? Level of demand is baked into guidance, and have you seen traffic or conversion levels move or change as we've moved into the slower leasing season? Thanks. Not sure I call it all of that, but I know you were asking about absorption initially. I mean, yeah, we don't see any reason for absorption to go backwards. I mean, if you look at absorption so far this year, Q1 was a record high for any first quarter since we've been tracking it. Q2 was the highest absorption since early 2021. And Q3, as I mentioned, saw us actually absorb more units than were delivered for the first time since Q1 in 2022. So we don't see anything on the demand side that's moderating. I mean, you think about job growth, household formation, population growth, move-outs to buy a home. We expect turnover to continue to stay low. So I think demand will hold up strong. As supply starts to moderate, which we think it will, I would expect absorption to be as good, if not better, as we look into 2025. Got it. And as a follow-up, and I'll try to streamline questions better, but just how are concession levels trending for merchant developer lease-up properties? Are you offering any concession at stabilized properties? And maybe just can you frame the price differential, if there is any, between the typical MAA property and the new developments? Yeah. I mean, broadly, concessions in Q3 were pretty consistent with Q2. I mean, it's pretty standard in a lot of markets that you're seeing on a stabilized submarket, half a month to a month, something like that. Now, we are seeing in lease-up areas a little more than that. And as the markets I've mentioned, particularly Austin and Atlanta, in Austin, you're seeing up to three months in some of the when you think about Central Austin and Round Rock, Georgetown area, and then particularly Midtown Atlanta seeing up to three months. So I would call out those two kind of submarket markets as the highest concessionary environment, but pretty consistent with what it's been in most of our other markets. But we are still seeing, if we look at the new supply being delivered on aggregate, it's about anywhere from $250-$300 higher price point than our average portfolio. Thank you very much. Our next question comes from Brad Heffern from RBC Capital Markets. Please go ahead. Your line is open. Yeah. Thanks. Obviously, leverage is still well below the long-term target, and it seems like you're seeing a lot of opportunities both on the acquisition and development fronts. Does it make sense to grow at this point using mainly leverage to get metrics back into the target range, or do you want to save that capacity for something bigger? Yeah. Right now, that's kind of where we're leaning into. I mean, when we look at our cost of equity versus our cost of debt, right now, we're actually trading at probably a slight discount. So we're going to probably lean more into the debt side versus the equity side for the time being. But as things begin to change, and we expect to maybe get a little bit of more benefit there on the equity side at some point, and we'd probably lean a little bit more in that direction when the time is right. Okay. Got it, and then I think I heard you say 3% gain- to- lease earlier in the call. Correct me if I'm wrong, but I would think that that would weigh on new lease spreads in 2025. I'm just curious, big picture, when you think we might see those actually turn positive? We didn't say 3%. I think our gain- to- lease right now, looking at if you look at where October rents or October lease is compared to in-place rents, it's about 0.7% gain- to- lease, which is not too unusual this time of year with seasonal pricing starts to decelerate some seasonally. So it's not a big number for us right now. I think what we did talk about was just kind of the earnings being slightly negative headed into 2025, and then I would expect we see better new lease pricing in 2025 as compared to what we saw in 2024. Okay. Thank you. Our next question comes from Alexander Goldfarb from Piper Sandler. Please go ahead. Your line is open. Hey, good morning. Thank you. Two questions here. First, just based on your responses to a lot of the other analysts, it sounds like, one, Atlanta and Austin are the only two markets of supply concern. And then, two, it sounds like your comments around strengthening 2025 and being in a better leasing position is predicated on the current run rate of absorption, meaning even though you expect absorption rates to improve, your comments around expectations of leasing for 2025 aren't predicated on improving absorptions based on the current trend. Yeah. I would say your second point is right. I mean, we would expect to see consistent demands, certainly consistent, if not a little bit better absorption. But where we think and would like to see that play out is more on rates and more on new lease rates as opposed to trying to get occupancy to 96% or 96.5% or something like that. We would prefer to focus on rates. To your first point, I mean, I wouldn't say those are the only ones feeling supply pressure. Those are certainly feeling more supply pressure. I mean, most of our markets are getting more supply than what we would call a typical market, but holding up a little better given where the supply is occurring relative to our markets and demand and all that. So we're certainly in a more elevated supply picture, but Austin and Atlanta are ones that stand out a little bit. But I think those start to get better next year, as do most of our other markets. Yeah. I think it's Alex, this is Eric. I think it's important to just recap what Tim said earlier is that of our 15 largest markets, 10 of those actually saw new lease-over-lease pricing improve in the third quarter as compared to the second quarter. And if you take just Austin out of the mix and just exclude Austin from our Q2 and Q3 performance trends on new lease pricing, our new lease pricing in Q3 would have been up 10 basis points from where it was in Q2. So Austin clearly is having an outsized impact on the portfolio right now. We feel great about that market long term, but certainly in 2024, it's weighing on the performance of the portfolio as a whole given just the absolute level of supply that came into that one market. Okay. The second question just revolves around the hurricane, obviously some big storms. As you guys assess your portfolio, because it's incredible, the REITs never really seem to have any major damage, is it a matter of either, one, you guys really only buy properties or invest in properties that are away from rivers or are away from shorelines or elevated, or is it some of the steps you're taking? Or why is it that we see some devastation, but then when the REITs report like you guys, the damage is minimal? Just trying to understand if that's active management on your part as far as how you select the properties and where geographically you're keeping, or if there's something else at work. It's broad. I think it's really a combination of factors. I think part of it is the selection of the sites and what we're building, but ultimately, it's the ongoing repair and maintenance that we're spending on the properties, making sure that the roofs are relatively new, they're intact, and the preparation we do before the storms come in really assists with minimizing our damage. So it really is only cleanup that we're stuck with and kind of some landscaping and other smaller things. Thank you. Our next question comes from Haendel St. Juste from Mizuho. Please go ahead. Your line is open. Hey, guys. Thanks for taking the question. Can you talk a bit about the transaction market and the opportunities coming across your desk? It seems like more sellers willing to engage with cap rates down to five and even sub five, as you noted. So as you guys look at the opportunities coming across your desk, what are the key items or non-negotiables you're seeking? Is it newer assets with operational upside, as you talked about previously? And then maybe some color on the compelling, I think was the word used, opportunities that you're looking at here, potentially closing by year-end? Is that a comment on the size, value creation, IRR potential? What's so compelling? Some color would be appreciated. Thanks. Hey, Haendel. This is Brad. I mean, generally, relative to the compelling comment, that really is similar to what we're investing in today. And if you look at the stabilized NOI yields of the three acquisitions we've had this year at 5.9% relative to where current market cap rates are, those are pretty compelling returns, I would say. Really, what we're focused on and where we're finding our opportunities are on properties that are generally brand new. Most times, they are just finishing up their initial lease-up or, excuse me, just finishing up construction and just entering into their initial lease-up. It's assets that are tougher for other folks to get financed, but given our ability to close all cash, we have some competitive advantage versus others in the market. There's also opportunities for us to put our operating platform on these assets to drive additional returns that many other folks can't do. Oftentimes, we're looking for properties that are in a proximity to current assets that we have where we're able to prod those properties and really generate additional returns. So those are kind of the, excuse me, the competitive angles that we're looking for where we're able to generate additional returns. And then the last point I would just make is generally a lot of what we're doing is off-market. We have extensive relationships in this region of the country exclusively operating for 30 years. About 80% of the $2 billion that we've purchased over the last 10 years have been with merchant developers. We have extensive relationships that we're able to lean on that allow us the opportunity to execute at returns that often exceed what the market rates are. Got it. Appreciate that. And just going back to development pipeline for a moment, now up to over a billion, I think you mentioned. Excuse me. And with a sizable opportunity beyond that with the shadow pipeline. I guess I'm curious, how large could that development pipeline grow near-term? How aggressive could you be given the opportunity you see to 2026? And then maybe some color on which core projects likely to be started next and how you're thinking about underwriting the rent growth in those markets the next couple of years. Thanks. Yeah. If I forget something in that question, please let me know. But yeah, I mean, in terms of the size of the development pipeline, we've commented for a couple of years now, really, a desire to build that pipeline to $1 billion-$1.2 billion total size. Today, we're just under $1 billion, so we've got a little bit of room to grow that a little bit. That would equate to about three to four starts a year in over a three-year period, which is really the timeline it takes for most of these projects that gets us to our $1 billion-$1.2 billion. So that's really we're very comfortable given the size of our balance sheet of really maintaining our pipeline at that level. Clearly, given what we think are going to be strong operating fundamentals in 2026, 2027, this is a great time for us to be ramping up that development pipeline to that $1 billion-$1.2 billion level. In terms of how we're underwriting these projects, very conservatively, the developments that we have delivering today, on average, even in this high-supplied environment, we're exceeding our underwritings on average by about 50 basis points. We underwrite very conservatively, very little trending in rents for the first few years. Typically, you get to year three, year four, you start trending a little bit more. We're trending our expenses the entire hold period. That's generally how we underwrite our deals, but on a very conservative basis. Okay. Thanks. Appreciate that. Our next question comes from Buck Horne from Raymond James. Please go ahead. Your line is open. Hey, thanks. Good morning. I just wanted to follow up on that. Just in thinking about the Richmond asset in terms of the start there, as you're rebuilding the development pipeline, thinking about your large markets versus mid-tier markets, would you expect to kind of restock and maybe look at more development opportunities in those mid-tier markets? And I'm kind of wondering what the differential in yields might be to do a development in a larger market versus a mid-tier market right now? Hey, Buck, this is Brad. Yeah. I mean, we definitely believe in our strategy of allocating capital between both large markets and these mid-tier markets. So we are very much committed to continuing to grow our presence and allocating capital both through acquisitions and development in some of these mid-tier markets. And really, it's been a function of just where the opportunities have come. So we haven't seen as many opportunities given the lower level of supply in some of these mid-tier markets, but we are seeing some of those opportunities now. We acquired the Raleigh project earlier this year, the development here in Richmond. So you'll see us continue to have a focus in those mid-tier markets. I would say from a stabilized yield perspective, there's maybe 10 basis points-20 basis points difference in today's rate. Richmond's close to 6.5%, and some of the other projects are maybe 6.25%, 6.3%. There's not a big swing in terms of some of the yields for these projects, but really, that is going to manifest itself maybe a little bit on IRRs where we're getting higher IRRs on the projects in the secondary markets as the exit cap rates may be a little bit different. But that's really the only difference in terms of the underwriting projects. That's great. Really helpful. Second question. With these new mandates coming out for return- to- office, I know it's maybe not as big in Sun Belt markets, but have you seen any changes or shifts recently in terms of traffic releasing patterns in urban locations versus suburban locations that might be affected by certain return-to-office policies? Hey, Buck. This is Tim. Nothing that we've seen at a material level. I mean, we did see we talk about performance between A and B assets and urban-suburban. We did see that narrow a little bit where the urban property is performing a little bit better. Not sure that's necessarily related to anything return- to- office, but we did see a little bit of performance there. But no, broadly speaking, not seeing a lot of shift in any of the metrics that we track. Got it. Thanks, guys. Appreciate it. Good luck. Our next question comes from Eric Wolfe from Citi. Please go ahead. Your line is open. Hey, thanks. As you get ready to give guidance next year, I guess what will you be looking at over the next couple of months to determine your view on market rent growth or blended spreads for next year? I think you said new leases might be down like 7% or 8% in November and December. Does that even weigh into your view? Does it not really matter? Just wondering what we should be looking at to kind of understand what market rent growth should be like next year. Yeah. This is Tim. I mean, I think new lease pricing is the key metric that we're looking at in terms of it's not going to what happens in the rest of this quarter is not going to be impactful necessarily to 2024, but does have some impact to some extent on earnings and where we start the year. Occupancy, we think, will be relatively stable, and so it's going to and we think renewals will continue to be stable. They've been in that 4%-5% range all throughout this year, so we don't expect to see that change necessarily. So it'll come down to the new lease rates and sort of how those play out. And then we'll have more to say as we get into Q4 earnings release. But certainly, sitting here today compared to where we were 12 months ago, feel a lot better both in terms of just macroeconomic variables. Recession risk is down. There's a little more certainty there. We know supply is starting to moderate. And so feel pretty good that sets up for a little bit better year. I mean, it's still going to be elevated supply. And even in a "normal" environment, new lease rates in Q1 and Q4 are typically negative, so we don't expect that necessarily to change. But we do expect to see a little more positive momentum in terms of new lease pricing when we get into Q2 and Q3. Yeah. The other thing that I'll add to that quickly on top of Tim's comment is that don't forget what Tim mentioned in that we intentionally only have about 16% of our leases expiring in the fourth quarter. And then you consider that roughly a good percentage of those are going to renew as a renewal transaction versus a new lease transaction. So the overall impact on earnings from new lease performance between now and the end of the year is not as significant as you might think it is given the low percentage of leases set to expire and the split between renewal and new lease pricing that will take place. Yeah. That's helpful. And then I guess, are there any other items that we should be thinking about when it comes to your revenue growth potential next year? I know I sometimes ask about this other income, but I think you've been studying the Wi-Fi cable program, so I was curious if that might pick up next year, if that's maybe an opportunity more for like 2026 and 2027. Yeah. I mean, you called out one that can start to have an impact. I mean, we're testing or retrofitting four properties this year that are just now starting to go live that have the property-wide ubiquitous Wi-Fi, if you will. And so if you think about those four properties by themselves, once it's fully rolled out and kind of flows through the portfolio, it's close to $1 million. So you can start to extrapolate the opportunities that we have there. So we expect to expand that pretty significantly next year, initially looking at maybe 20 properties- 25 properties that we do in 2025. So on the revenue side, that would be one that I call out. We're wrapping up the SmartRent installations at the last few properties now. There'll be a little bit of tailwind from that in 2025. But other than rent growth and stable occupancy, I think the Wi-Fi starts to slowly have a bit of an impact. Thank you. Our next question comes from John Kim from BMO Capital Markets. Please go ahead. Your line is open. Thank you. As far as hurricane and storm-related costs, you don't exclude or add back those costs to get to your Core FFO, which I think is a really standout policy versus maybe some of your peers. But going forward, will you be including a larger assumed expense in your guidance as you look to 2025? And how do you think about exposure in some of these markets like Tampa? Yeah. John, hey, this is Clay. Yeah. So I think whenever you kind of look at what the cost that we had that we were projecting for the full year this year, it's going to be somewhere around $10 million, $9 million-$10 million cost. When you look back at over the past seven years, six years, seven years, we haven't had anything of this magnitude that we've had to deal with. And it's been spread across each quarter of this year. It hasn't been just one quarter or one storm. It's been multiple storms impacting us throughout the year. So I think as we look towards next year, that's not something we've traditionally done in the past as far as including some storm cost in our guidance. Now, we did include $0.01 in our guidance this past year in Q4 2023 earnings back in February and then released our 2024 guidance in February. So we reflected that, but that's the only cost that we reflected in our guidance. But as we look forward to next year, I think that you would expect to see something in there. It will not be at the levels that we experienced this year just because history hasn't shown that that's the norm. But I would expect that we'll include something in our guidance to account for that. Does it make you think differently about some of your Florida exposure? I know you just purchased something in Orlando. As far as Tampa or maybe some other markets where insurance costs could be pretty significant? The one that's the insurance cost in Florida gets a lot of publicity. Of course, one thing you have to consider is just our overall portfolio and that we're able to defer a little bit of that risk across all of our markets, not just in the Florida market. We're still committed to Florida. Yes, there's some higher cost-related insurance there, but just given our size and portfolio or our platform that we have across the portfolio, we can still take advantage of some opportunities there. Just to clarify, you do exclude these costs from same-store expense, but do you keep those affected properties in the same-store pool? Yes. You got to think whenever the damage that we've seen has been extremely minor. So damage is probably a strong word. It's more of a cleanup that we see whenever these properties are typically impacted. If you did have a property that was significantly damaged, lost a number of units that would not be able to be occupied, we would probably remove that property from same-store while it was being repaired and put back into service. So we'll treat that particular property as appropriate just based on our general policy of how we include stores in same-store versus non-same-store. But to your point, these cleanup costs, we've reflected those as non-same-store cost in our earnings. Primarily, the cost, we don't want it to impact the comparability of the same-store portfolio. Got it. Great. Thank you. Our next question comes from Julien Blouin from Goldman Sachs. Please go ahead. Your line is open. Yeah. Thank you. I just want to make sure I heard a couple of numbers correctly, so the earnings going into next year, about - 30 basis points, and then gain- to- lease currently around - 70 basis points and then with my real sort of question here is with new lease spreads down 7% in October, do you still think we can get to sort of positive new lease spreads by spring, early summer? Just seems like quite the ramp to get there. Yeah. To answer your first question, you have those numbers correct. That is what we stated. As far as new lease rates, we'll talk more about this, obviously, in our next quarter earnings. Difficult to say right now exactly where it'll get to. We're kind of going through our budgeting planning process now. I think one point to make is through this year, our best new lease pricing was about - 4%, - 4.2%, something like that in July. We certainly expect to exceed that. And to reiterate a point I made earlier, even in normal supply-demand environments, Q1, Q4, typically negative new lease pricing anyway. So it's really Q2 and Q3 where you start to see it go positive. So more to come on that, but we certainly believe all of the factors, supply and demand, point to much better new lease performance in 2025 than 2024. Of course, the prior year comparisons factor into this as well. That's right. Yeah. Thank you. Yeah. On those sort of comparisons, it does feel like the comparisons get a lot easier year- over- year in November and December, given just the new lease deceleration and concessions we saw last year. So if the worst of supply pressure is behind us and October held steady versus September, why wouldn't that sort of new lease spread begin to improve sequentially into November and December? We'll see. It might. We certainly don't expect it to get much worse for all the reasons we've laid out, including those easier comps. It's always new lease is certainly the tip of the spear and can change on a dime, but we feel comfortable it's going to stay in this range, if not start to improve a little bit, but the other point is just there's not much leases, as we mentioned, 16%, and frankly, not a lot of traffic, particularly when you get into mid-November on through December, just with holidays, just not a lot of people searching, so it's not going to have a material impact one way or the other, but we could see it sort of hanging in where it is right now. Okay. Great. Thank you. Our next question comes from Adam Kramer from Morgan Stanley. Please go ahead. Your line is open. Hey, great. Thanks for the time. Just wanted to ask about kind of the portfolio opportunity out there. I think you talked a little bit about kind of the one-off acquisition opportunities and clearly seeing you guys be a little bit more acquisitive there. But are you seeing any change in terms of kind of sellers of portfolios out there? We've seen some large portfolios trade recently. Is that something that maybe you guys could take advantage of, or is the pricing there not kind of what you're looking for? Yeah. Hey, Adam. This is Brad. I mean, generally, what we see on portfolios is a lot of times the quality of the assets are not what we're looking for. There's some type of bad with the good, so to speak. In some of the portfolios that we've seen recently, I mean, frankly, part of that has been pricing. Some of the pricing on those assets were more aggressive than what we believed was appropriate or where we want to invest our capital. I mean, if you look at the three one-off acquisitions that we transacted on, close to 6% on an NOI yield basis for brand new assets. So from an after CapEx basis, it's pretty appealing, especially considered to where some of these portfolios are trading. And then if you take into account the age and after CapEx nature of those, we just feel like what we've been able to do so far has been a very good strategy for us. Now, if there's a portfolio out there that we think has some type of strategic nature to it that makes us stronger in some way, we would absolutely take a look at that. And if it's accretive to earnings, we would be interested in looking at something like that. Great. And then just as a quick follow-up here, just remind us where kind of the pre-COVID bad debt level or rule of thumb is and then kind of where you are today relative to that. And your view as to kind of getting back to that pre-COVID number, is that something that could happen in 2025, or is that still multiple years away? I mean, honestly, we're just about there. I mean, I think pre-COVID, it was anywhere from 30 basis points- 40 basis points of net delinquency. Right now, we're at about 40 basis points. So at most, there's 5 basis points- 10 basis points of difference in terms of where we were pre-COVID. We certainly didn't deteriorate near as much as some other markets, and we've just about gotten back to where we were pre-COVID. This is really helpful. Thanks for the time. Our next question comes from Michael Lewis from Truist Securities. Please go ahead. Your line is open. Thank you. So Eric, in the press release last night and your remarks, you said, "We're confident we will enter a new multi-year cycle with demand outpacing supply." One of the points of pushback I sometimes get is with cost pressures easing and short-term interest rates coming down and developers who have capital like you already starting projects, that maybe this cycle will be short, right? That maybe what ends up happening is your same-store growth in 2025 is similar or a little bit better than 2024, and maybe 2026 is a good year. And then by the time you get to 2027, you have your next wave of delivery. So maybe there's historical precedent or kind of what do you think about the reason why Sun Belt supply won't just rise up to meet the demand kind of more quickly than in the past? I think to put it in context, what's important to recall or remember is that the deliveries this year. This is not a normal supply cycle. The deliveries this year is a 50-year high. Do I think that by 2027, 2028, and 2029 that we could see supply levels pick up from where they will likely be in 2025 and 2026? It is certainly possible. You have to start to think about financing cost and construction cost, and will things pencil out by that point in a way that is super compelling for developers? I think that the idea that we are going to, anytime in the next 10 years, repeat this 50-year high cycle, I think, is not reasonable, in my opinion. So I think that, and of course, we've long believed that ultimately what really drives performance and ability to drive value for shareholder capital over a long period of time is really the demand side of the business. We go through these periodic cycles where supply picks up. But because of some of the things Brad mentioned in terms of how we've diversified across both mid-tier and large-tier markets, we think we can weather these supply cycles okay. And if you'd have told me two years ago, three years ago, we were headed to a 50-year high delivery of new supply and that our NOI was only going to go down by 1.3%, I'd take that all day long. If that's as bad as it gets in a 50-year per iod, that's okay. And next year will be better. 2026 will be even better. I think 2027 and 2028 will be even better. Now, is it possible that, again, supply picks up in 2028 and 2029? Probably so. But I don't see us going back to another 50-year high. Yeah. Michael, this is Brad. The only point I would add is if you look at the starts that occurred in first, second, third quarter of 2022, excuse me, there's a very high correlation with that associated with where interest rates were. Historic low interest rates. I think interest rates could come down a little bit from where they are today, but they certainly we don't think go back to that level that really spurred this kind of excessive 50-year high supply levels that Eric was talking about. Okay. Great. And I'm going to structure my second question kind of the same way, right? I'm going to read a brief excerpt from Cushman & Wakefield's 3Q National Apartment Report and then ask you a question. So they said, "Demand for apartment units is booming again. Resurgent international migration trends in recent years alongside a stout labor market continue to power some of the best multifamily demand on record." So maybe this is opening a can of worms, or maybe it's a better question after maybe for Nareit when hopefully we know who the next president's going to be. But since they singled out migration, it's not a topic that I hear a lot about as a primary demand driver. Now that maybe we'll have mass deportations, I don't know. But to the extent the migration picture changes, is this a major key variable? In 2025, is this going to be a key demand variable potentially where me and the rest of the analysts on the call are writing research reports about this, or do you think it's that wildly overstating the importance of how that trends? I think the influence migration has on apartment performance is a function of two things. It's a function of the markets, obviously, and I would argue that a number of the coastal gateway markets are going to be more influenced by immigration trends than a lot of our Sunbelt markets. Secondly, I would tell you that the price point of your product is going to also be impacted somewhat or is a variable that can be influenced by immigration trends, and we think that a lower price point portfolio is more likely than not to be more at risk from fluctuation with growing or declining levels of immigration. We think that we are not exposed in that way. Over 80% of our portfolio is single. Majority are female. We're serving a resident profile with average incomes of over $80,000-$85,000 a year. I mean, this is not a demographic that we're serving largely in our portfolio that's going to be influenced or impacted one way or the other by changing immigration trends. All right. Thank you. Our next question comes from Alex Kim from Zelman. Please go ahead and open it. Hey, good morning. Thanks for taking my question. I wanted to ask about occupancy trends. Same-store occupancy rose 20 basis points sequentially this quarter. And I know it stands at 95.4% in October, but could you talk through some of the drivers of the 3Q increase? And And with blended rent growth inflecting negatively during the quarter, I mean, when does incremental occupancy become less valuable than rent growth to your revenue strategy? I mean, I think as far as the increase in occupancy from Q2 - Q3 is a function of the absorption we talked about and the getting more units absorbed than were delivered, and we certainly saw that play out in our portfolio, and the majority of our markets saw that sequential gain. We balance pricing and occupancy at a market, sub-market property level. I think we're comfortable where we are right now with occupancy at the 95.4%, primarily because of what we see with exposure that we talked about. We're at a record low exposure, something we haven't seen ever at 6.3%, which, what that does, is kind of stabilizes where we think occupancy will be over the next 60 days or so and allows us, where we can, to push on pricing. So exposure is what we look at a little more than occupancy, and if it's in that range, we're certainly comfortable in this 95.4%-95.5% range and being able to push a little bit on pricing where we can. Got it. Thanks, and then just a quick follow-up here. This is now the second quarter that was already in lease-up. Can you talk through just kind of what you're seeing, what you like about that strategy, and if it's something that you'll continue employing moving forward? You kind of broke up in your question. Can you repeat that last question? Yeah. Sorry. Just asking about your recent activity in buying properties in lease-up. Just curious about that strategy and if it's something you'll continue. Yeah. Absolutely. Our acquisition strategy has been focused on brand new properties in their initial lease-up for the last few years. Again, we just think that there's an opportunity for us to execute in that area, given that it's harder to get to line up financing when a property is not stabilized. And our ability to execute all cash is a benefit for us that we're able to really execute, drive higher returns, higher NOI yields than what we could get on a fully marketed project that's stabilized. So yeah, we'll continue to focus in that area. Got it. Thanks for the time. Our last question today will come from Ann Chan from Green Street. Please go ahead. Your line is open. Hey, good morning. Just one question for me, and keeping on the topic demand earlier, amongst your larger markets, particularly where supply continues to pressure pricing, which markets are you underwriting a weaker or stronger job growth or in-migration on a relative basis? Certainly the market that we talked a lot about that's struggling right now, Austin is one that, as we think about longer term, is one that we're really high on. I mean, in terms of broader trends, we look at migration, we look at household formation, we look at population growth, and obviously look at job growth. And Austin is near the top of the list in all those. So that would be one. Raleigh is another one that we feel strong about. Orlando is one that has had some struggle with supply, but it's got some really strong demand metrics. So most of our footprint, we would be happy to continue to acquire in. But those are two or three markets that I would point out as having some really strong forward-looking demand trends. Got it. Thank you for your time. Thanks. We have no further questions. I will return the call to MAA for closing remarks. Okay. No further comments from the company. I appreciate you joining us this morning, and we look forward to seeing many of you out at Nareit. This concludes today's program. Thank you for your participation. You may now disconnect.