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What changed in Mid-America Apartment Communities's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Mid-America Apartment Communities's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+235 added−238 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-09)

Top changes in Mid-America Apartment Communities's 2024 10-K

235 paragraphs added · 238 removed · 201 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe own 80% of the joint venture that owns this property. Dispositions We sell apartment communities and other assets that no longer meet our long-term strategy or when market conditions are favorable, and we redeploy the proceeds from those sales to acquire, develop and redevelop additional apartment communities and rebalance our portfolio across or within geographic regions.
Biggest changeThe following multifamily development projects were completed during the year ended December 31, 2024 (dollars in thousands): As of December 31, 2024 Project Location Total Units Development Costs Development Costs per Unit Construction Completed Novel Daybreak (1) Salt Lake City, UT 400 $ 95,091 $ 238 3rd Quarter 2024 Novel Val Vista (1) Phoenix, AZ 317 78,707 248 4th Quarter 2024 MAA Milepost 35 Denver, CO 352 123,634 351 4th Quarter 2024 Total 1,069 $ 297,432 (1) We own 80% of the joint venture that owns this property. 5 Dispositions We sell apartment communities and other assets that no longer meet our long-term strategy or when market conditions are favorable, and we redeploy the proceeds from those sales to acquire, develop and redevelop additional apartment communities and rebalance our portfolio across or within geographic regions.
We believe our competitive advantages include: • a fully integrated organization with property management, development, redevelopment, acquisition, marketing, sales and financing expertise; • scalable operating and support systems, which include automated systems to meet the changing technological needs of our residents and associates; • access to a wide variety of debt and equity capital sources; • geographic diversification with a presence in 39 defined markets across the Southeast, Southwest and Mid-Atlantic regions of the U.S.; and • significant presence in many of our major markets that allows us to be a local operating expert and offer varying location options within a market to meet a variety of prospective resident preferences.
We believe our competitive advantages include: • a fully integrated organization with property management, development, redevelopment, acquisition, marketing, sales and financing expertise; • scalable operating and support systems, which include automated systems to meet the changing technological needs of our residents and associates; • access to a wide variety of debt and equity capital sources; • geographic diversification with a presence in 39 defined markets across the Southeast, Southwest and Mid-Atlantic regions of the U.S.; and • significant presence in many of our major markets that allows us to be a local operating expert and offer varying location, product type and price options within a market to meet a variety of prospective resident preferences.
With respect to our workforce, we focus on driving diversity and inclusion, providing market-competitive pay and benefits to support our associates’ well-being, encouraging our associates’ growth and development, fostering associate engagement and protecting our associates’ health and safety. We respect the privilege of providing value to those whose lives we touch.
With respect to our workforce, we focus on inclusion, providing market-competitive pay and benefits to support our associates’ well-being, encouraging our associates’ growth and development, fostering associate engagement and protecting our associates’ health and safety. We respect the privilege of providing value to those whose lives we touch.
Compliance with the various laws and regulations we are subject to did not have a material effect on our capital expenditures, results of operations and competitive position for the year ended December 31, 2023 as compared to prior periods.
Compliance with the various laws and regulations we are subject to did not have a material effect on our capital expenditures, results of operations and competitive position for the year ended December 31, 2024 as compared to prior periods.
Even if MAA continues to qualify as a REIT, it will continue to be subject to certain federal, state and local taxes on its income and its property. For the year ended December 31, 2023, MAA paid total distributions of $5.600 per share of common stock to its shareholders, which was above the 90% REIT distribution requirement.
Even if MAA continues to qualify as a REIT, it will continue to be subject to certain federal, state and local taxes on its income and its property. For the year ended December 31, 2024, MAA paid total distributions of $5.88 per share of common stock to its shareholders, which was above the 90% REIT distribution requirement.
We intend to target our total debt, net of cash held, to a range of approximately 30% to 36% of our adjusted total assets (as defined in the covenants for the bonds issued by MAALP). Our charter and bylaws do not limit our debt levels and our Board of Directors can modify this policy at any time.
We intend to target our total debt, net of cash held, to a range of approximately 30% to 36% of our adjusted total assets (as defined in the covenants for the unsecured senior notes issued by MAALP). Our charter and bylaws do not limit our debt levels and our Board of Directors can modify this policy at any time.
We encourage our associates to “embrace opportunities” including developing skills and knowledge needed for increased responsibilities as they promote within the company. Communication and Engagement We place an emphasis on communication to ensure associates feel informed and connected as an organization.
We encourage our associates to “embrace opportunities” including developing skills and knowledge needed for increased responsibilities as they promote within the company. We place an emphasis on communication in an effort to ensure associates feel informed and connected as an organization.
We routinely make new investments when we believe it will be accretive to shareholder value over the life of the investments. 7 Competition and Market Demand Our apartment communities are located in areas that include other apartment communities. Occupancy and rental rates are affected by the number of competitive apartment communities in a particular area.
We routinely make new investments when we believe it will be accretive to shareholder value over the life of the investments. Competition and Market Demand Our apartment communities are located in areas that include other apartment communities. Occupancy and rental rates are affected by the number of competitive apartment communities as well as demand for housing in a particular area.
The program includes targeted plans to move all apartment units at such apartment communities to higher rents. For the year ended December 31, 2023, we spent $17.0 million on this program. Portfolio Strategy Our goal is to maintain a diversified, balanced portfolio that we believe provides the optimal path to maximizing operating performance over the full economic cycle.
The program includes targeted plans to move all apartment units at such apartment communities to higher rents. For the year ended December 31, 2024, we spent $4.8 million on this program. Portfolio Strategy Our goal is to maintain a diversified, balanced portfolio that we believe provides the optimal path to maximizing operating performance over the full economic cycle.
To achieve these objectives, we intend to continue to pursue the following goals and strategies: • create value for our shareholders, residents, associates and the communities in which our properties are located; • effectively operate our existing properties with an intense property and asset management focus; • utilize technology to provide services desired by our residents and create efficiencies and performance advantages in our operations; • take an opportunistic approach to buying, selling, developing and renovating apartment communities; • diversify our portfolio across markets, submarkets and price points in the geographical areas in which we operate to minimize operating performance volatility; • offer attractive work environments, compensation and incentive packages and career development opportunities to attract and retain required talent; and • actively manage our balance sheet and capital structure.
To achieve these objectives, we intend to continue to pursue the following goals and strategies: • create value for our shareholders, residents, associates and the communities in which our properties are located; • effectively operate our existing properties with an intense property and asset management focus; • utilize technology to provide services desired by our residents and create efficiencies and performance advantages in our operations; • take an opportunistic approach to buying, selling, developing and renovating apartment communities; • diversify our portfolio across markets, submarkets, product type (i.e., garden style, mid-rise, and high-rise) and price points to minimize operating performance volatility; • offer attractive work environments, compensation and incentive packages and career development opportunities to attract and retain required talent; and • actively manage our balance sheet and capital structure.
These laws and regulation include landlord-tenant laws, employment laws, antitrust and other competition laws, laws benefitting disabled persons, privacy laws, tax laws, environmental laws, zoning laws, building codes and other laws regulating housing or that are generally applicable to our business and operations.
These laws and regulations include landlord-tenant laws, employment laws, antitrust and other competition laws, laws benefiting disabled persons, privacy laws, tax laws, environmental laws, zoning laws, building codes and other laws regulating housing or that are generally applicable to our business and operations.
Human Capital As of December 31, 2023, we employed 2,427 associates. Our associates’ time, energy, creativity and passion are essential to our continued success as a company.
Human Capital As of December 31, 2024, we employed 2,532 associates. Our associates’ time, energy, creativity and passion are essential to our continued success as a company.
We may issue new equity to maintain our debt within the target range. Covenants for our unsecured senior notes limit our total debt to 60% or less of our adjusted total assets. As of December 31, 2023, our total debt was 27.8% of our adjusted total assets.
We may issue new equity to maintain our debt within the target range. Covenants for our unsecured senior notes limit our total debt to 60% or less of our adjusted total assets.
MAA is the sole general partner of the Operating Partnership, holding 116,694,124 OP Units, comprising a 97.4% partnership interest in the Operating Partnership as of December 31, 2023.
MAA is the sole general partner of the Operating Partnership, holding 116,883,421 OP Units, comprising a 97.4% partnership interest in the Operating Partnership as of December 31, 2024.
During the year ended December 31, 2023, we disposed of one land parcel totaling approximately 21 acres. Property Redevelopment and Repositioning Activity We focus on both interior unit upgrades and property amenity and common area upgrades above and beyond routine capital upkeep on our apartment communities that we believe have the ability to support additional rent growth.
During the year ended December 31, 2024, we disposed of two multifamily communities totaling 488 units. Property Redevelopment and Repositioning Activity We focus on both interior unit upgrades and property amenity and common area upgrades above and beyond routine capital upkeep on our apartment communities that we believe have the ability to support additional rent growth.
Typically, fixed price construction contracts are signed with unrelated parties to minimize construction risk. We may also engage in limited expansion development opportunities on existing communities in which we typically serve as the developer. During the year ended December 31, 2023, we incurred $198.2 million in development costs and completed one development project.
Typically, fixed price construction contracts are signed with unrelated parties to minimize the risk of increases in construction costs. We may also engage in limited expansion development opportunities on existing communities in which we typically serve as the developer. During the year ended December 31, 2024, we incurred $313.9 million in development costs and completed three development projects.
As of December 31, 2023, ethnic/cultural minorities represented approximately 53% of our workforce, 42% of our collective corporate, regional and property leadership positions and 50% of our associates promoted during the year ended December 31, 2023.
As of December 31, 2024, ethnic/cultural minorities represented approximately 54% of our workforce, 43% of our collective corporate, regional and property leadership positions and 55% of our associates promoted during the year ended December 31, 2024.
As of December 31, 2023, we maintained full or partial ownership of apartment communities, including communities currently in development, across 16 states and the District of Columbia, summarized as follows: Multifamily Communities (1) Units Consolidated 295 (2) 100,625 (3) Unconsolidated 1 269 Total 296 100,894 (1) As of December 31, 2023, 34 of the Company’s apartment communities included retail components.
As of December 31, 2024, we maintained full or partial ownership of apartment communities, including communities currently in development, across 16 states and the District of Columbia, summarized as follows: Multifamily Communities (1) Units Consolidated 300 (2) 102,079 (3) Unconsolidated 1 269 Total 301 102,348 (1) As of December 31, 2024, 35 of the Company’s apartment communities included retail components.
We call this outlook our “Brighter View.” To achieve these objectives, we use our Core Values to guide the way we interact with each other and conduct business by: • appreciating the uniqueness of each individual; • communicating openly and with integrity; • embracing opportunities; and • doing the right thing at the right time for the right reasons.
We call this outlook our “Brighter View.” To achieve these objectives, we use our Core Values to guide the way we interact with each other and conduct business by: • appreciating the uniqueness of each individual; • communicating openly and with integrity; • embracing opportunities; and • doing the right thing at the right time for the right reasons. 6 We strive to recruit, develop and retain a talented and diverse workforce that mirrors the diversity of our residents and the communities where we do business.
Moreover, no assurance can be given concerning future laws, ordinances or regulations, or the potential introduction of hazardous or toxic substances by neighboring properties or residents. 8 Government Regulations We must own, operate, manage, acquire, develop and redevelop our properties in compliance with numerous federal, state and local laws and regulations, some of which may conflict with one another or are subject to limited judicial or regulatory interpretations.
Government Regulations We must own, operate, manage, acquire, develop and redevelop our properties in compliance with numerous federal, state and local laws and regulations, some of which may conflict with one another or are subject to limited judicial or regulatory interpretations.
We believe this is an important factor in the management of our debt levels to maintain an optimal capital structure, and it is also considered in the assignment of our credit ratings. Adjusted EBITDA re is measured on a trailing twelve-month basis. As of December 31, 2023, our net debt to Adjusted EBITDA re ratio was 3.6x.
We monitor our debt levels to a ratio of net debt to Adjusted EBITDA re in order to maintain our investment grade credit ratings. We believe this is an important factor in the management of our debt levels to maintain an optimal capital structure, and it is also considered in the assignment of our credit ratings.
(2) Number of communities includes five communities under development as of December 31, 2023. (3) Number of units excludes development units not yet delivered as of December 31, 2023. Our business is conducted principally through the Operating Partnership.
(2) Number of communities includes seven communities under development as of December 31, 2024. One of these developments is a phase II expansion of an existing apartment community. (3) Number of units excludes development units not yet delivered as of December 31, 2024. Our business is conducted principally through the Operating Partnership.
Our residents have the ability to conduct business with us 24 hours a day, 7 days a week and complete online leasing applications, leases and renewals through our web-based resident portal. Interacting with our residents through such technology has allowed us to improve resident satisfaction ratings and increase the efficiency of our operating teams.
Investment in technology continues to drive operating efficiencies in our business and helps us to better meet the changing needs of our residents. Our residents have the ability to conduct business with us 24 hours a day, 7 days a week and complete online leasing applications, leases and renewals through our web-based resident portal.
We continue to invest in technology to enable potential residents to examine their future homes both online (virtual touring) or by self-guided tour (self-touring) in addition to the more traditional guided tour. 4 Acquisitions and Development Our external growth strategy is to acquire existing apartment communities, utilize our internal development team to develop our own apartment communities and partner with select developers to develop apartment communities that we will own completely after stabilization, which we refer to as a pre-purchase transaction.
Acquisitions and Development Our external growth strategy is to acquire existing apartment communities, utilize our internal development team to develop our own apartment communities and partner with select developers to develop apartment communities that we will own completely after stabilization, which we refer to as a pre-purchase transaction.
We believe this plan of operation, coupled with the portfolio’s strengths in targeting residents across a geographically diverse platform, should position us for continued operational growth. For information regarding trends in market demand, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Trends” in this Annual Report on Form 10-K.
We believe this plan of operation, coupled with the portfolio’s strengths in targeting residents across a geographically diverse platform, should position us for continued operational growth.
Also, as of December 31, 2023, females represented approximately 46% of our workforce, 56% of our collective corporate, regional and property leadership positions and 53% of our associates promoted during the year ended December 31, 2023.
Also, as of December 31, 2024, females represented approximately 46% of our workforce, 57% of our collective corporate, regional and property leadership positions and 54% of our associates promoted during the year ended December 31, 2024. We take a comprehensive approach to supporting our associates’ physical and emotional health as well as their financial and professional well-being.
During the year ended December 31, 2023, we renovated the kitchen and bathroom of 6,858 apartment units at an average cost of $6,453 per apartment unit, achieving average rental rate increases of 7.1% above the normal market rate for similar but non-renovated apartment units. 5 We have installed smart home technology (unit entry locks, mobile control of lights and thermostat and leak monitoring) at many of our apartment communities in order to provide additional resident value and increase rent growth.
We have installed smart home technology (unit entry locks, mobile control of lights and thermostat and leak monitoring) at many of our apartment communities in order to provide additional resident value and increase rent growth.
Environmental Matters As a part of our standard apartment community acquisition and development processes, we generally obtain environmental studies of the sites from outside environmental engineering firms. The purpose of these studies is to identify potential sources of contamination at the site and to assess the status of environmental regulatory compliance.
The purpose of these studies is to identify potential sources of contamination at the site and to assess the status of environmental regulatory compliance.
We intend to target the ratio of our net debt to Adjusted EBITDA re to a range of 4.5x to 5.5x. We monitor our debt levels to a ratio of net debt to Adjusted EBITDA re in order to maintain our investment grade credit ratings.
As of December 31, 2024, our total debt was 29.0% of our adjusted total assets. 7 We intend to target the ratio of our net debt to Adjusted EBITDA re to a range of 4.5x to 5.5x.
The system contains property and accounting modules that allow for operating efficiencies and continued expense control, provide for various expanded revenue management practices and improve the support provided to on-site property operations.
Our significant platform allows us to take advantage of technology that makes information sharing easier on a real-time basis, allows for operating efficiencies and continued expense control, and provides for various expanded revenue management practices to improve the support provided to on-site property operations.
To support our operational structure, senior management, along with various asset management functions, are proactively involved in supporting and optimizing property operations and reviewing property management performance through extensive reporting processes and on-site visits. To maximize the amount of information shared between senior management and the properties on a real-time basis, we utilize a web-based property management system.
We believe in leveraging the strength of our enterprise as a foundation for our operating structure, which capitalizes on local management with specific market knowledge and accountability. Senior management, along with certain centralized asset management functions, are proactively involved in supporting and optimizing property operations and reviewing property management performance through extensive reporting processes and on-site visits.
We acquired the following properties during the year ended December 31, 2023: Multifamily Acquisitions Market Units Date Acquired MAA Central Ave Phoenix, AZ 323 October 2023 MAA Optimist Park Charlotte, NC 352 November 2023 Land Acquisitions Market Acres Date Acquired MAA Packing District II Orlando, FL 6 February 2023 MAA Nixie Raleigh, NC 0.4 November 2023 Development activities may be conducted through wholly-owned entities or through joint ventures with our pre-purchase transaction partners.
We own 95% of the joint venture that owns this property. Construction of this development commenced in the second quarter of 2024. Land Acquisitions Market Acres Date Acquired MAA Porter Richmond, VA 3.3 August 2024 MAA Nixie II Raleigh/Durham, NC 3.3 December 2024 Development activities may be conducted through wholly-owned entities or through joint ventures with our pre-purchase transaction partners.
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We believe that leveraging the strength of enterprise solutions in conjunction with our decentralized operating structure capitalizes on specific market knowledge and provides greater accountability than an entirely centralized structure.
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Interacting with our residents through such technology has allowed us to improve resident satisfaction ratings and increase the efficiency of our operating teams. We continue to invest in technology to enable potential residents to examine their future homes both online (virtual touring) or by self-guided tour (self-touring) in addition to the more traditional guided tour.
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We use a “yield management” pricing program that helps our property managers optimize rental revenues, and we also utilize purchase order and accounts payable software to provide improved controls and management information. Investment in technology continues to drive operating efficiencies in our business and helps us to better meet the changing needs of our residents.
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We will continue to evaluate opportunities that arise, and we will utilize this strategy to increase our number of apartment communities in strong and growing markets. 4 We acquired the following properties during the year ended December 31, 2024: Multifamily Acquisitions Market Units Date Acquired MAA Vale Raleigh, NC 306 May 2024 MAA Boggy Creek Orlando, FL 310 September 2024 MAA Cathedral Arts Dallas, TX 386 October 2024 Modera Chandler (1) Phoenix, AZ 345 April 2024 (1) Represents a pre-purchase multifamily development.
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We will continue to evaluate opportunities that arise, and we will utilize this strategy to increase our number of apartment communities in strong and growing markets.
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For information regarding our development costs, see Note 1 (Organization and Summary of Significant Accounting Policies – Development Costs) to the consolidated financial statements included in this Annual Report on Form 10-K.
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The following multifamily projects were under development as of December 31, 2023 (dollars in thousands): Project Market Total Units Units Completed Cost to Date Budgeted Cost Estimated Cost Per Unit Expected Completion Novel Daybreak (1) Salt Lake City, UT 400 196 $ 91,620 $ 99,450 $ 249 3rd Quarter 2024 Novel Val Vista (1) Phoenix, AZ 317 3 71,227 79,800 252 4th Quarter 2024 MAA Milepost 35 Denver, CO 352 3 92,980 125,000 355 4th Quarter 2024 MAA Nixie Raleigh, NC 406 — 45,932 145,500 358 3rd Quarter 2025 MAA Breakwater Tampa, FL 495 — 89,851 197,500 399 4th Quarter 2025 Total 1,970 202 $ 391,610 $ 647,250 (1) This pre-purchase multifamily community development is being developed through a joint venture with a local developer.
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The following multifamily projects were under development as of December 31, 2024 (dollars in thousands): Project Market Total Units Units Completed Costs to Date Budgeted Costs Estimated Costs Per Unit Expected Completion MAA Nixie Raleigh/Durham, NC 406 73 $ 127,944 $ 145,500 $ 358 3rd Quarter 2025 MAA Breakwater Tampa, FL 495 — 154,540 197,500 399 4th Quarter 2025 Modera Liberty Row (1) Charlotte, NC 239 — 100,492 112,000 469 1st Quarter 2026 MAA Plaza Midwood (2) Charlotte, NC 302 — 29,105 101,500 336 4th Quarter 2026 Modera Chandler (2) Phoenix, AZ 345 — 34,068 117,500 341 4th Quarter 2026 MAA Porter Richmond, VA 306 — 15,994 99,500 325 3rd Quarter 2027 MAA Milepost 35 II Denver, CO 219 — 15,038 78,000 356 4th Quarter 2026 Total 2,312 73 $ 477,181 $ 851,500 (1) In July 2024, we agreed to finance the third-party development of this property currently under construction.
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During the year ended December 31, 2023, we installed smart devices in 21,159 apartment units at an average cost of $1,533 per apartment unit and a projected average monthly rent increase of approximately $20 per unit upon lease renewal or unit turnover.
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We have the option to purchase the property once construction is complete and the property is stabilized. We consider an apartment community to be stabilized once it achieves 90% average physical occupancy for 90 days. (2) We own 95% of the joint venture that owns this property.
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As of December 31, 2023, we have completed installation of smart home technology at more than 90% of our existing apartment units and are employing smart home technology in all of our new developments. Separately, we continued our property repositioning program to upgrade and reposition the amenity and common areas at certain of our apartment communities.
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During the year ended December 31, 2024, we renovated the kitchens and bathrooms of 5,665 apartment units at an average cost of $6,219 per apartment unit, achieving average rental rate increases of 7.3% above the normal market rate for similar but non-renovated apartment units.
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Diversity, Equity and Inclusion We strive to recruit, develop and retain a talented and diverse workforce that mirrors the diversity of our residents and the communities where we do business.
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As of December 31, 2024, we had completed installation of Smart Home technology in over 96,000 units across our apartment community portfolio providing an increase in average effective rent per unit of approximately $25 per month since the initiative began during the first quarter of 2019.
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We intend to continue using a combination of targeted recruiting, talent development and internal promotion strategies to expand the diversity of our employee base across all roles and functions. 6 Well-being and Development We take a comprehensive approach to supporting our associates’ physical and emotional health as well as their financial and professional well-being.
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For a definition of average effective rent per unit, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Trends” in this Annual Report on Form 10-K. Separately, we continued our property repositioning program to upgrade and reposition the amenity and common areas at certain of our apartment communities.
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Adjusted EBITDA re is measured on a trailing twelve-month basis. As of December 31, 2024, our net debt to Adjusted EBITDA re ratio was 4.0x.
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For information regarding trends in market demand, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Trends” in this Annual Report on Form 10-K. 8 Environmental Matters As a part of our standard apartment community acquisition and development processes, we generally obtain environmental studies of the sites from outside environmental engineering firms.
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Moreover, no assurance can be given concerning future laws, ordinances or regulations, or the potential introduction of hazardous or toxic substances by neighboring properties or residents.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur development and construction activities are subject to the following risks: • we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in increased development costs, could delay initial occupancy dates for all or a portion of a development community and could require us to abandon our activities entirely with respect to a project for which we are unable to obtain permits or authorizations; • we may be unable to obtain financing for development activities under favorable terms, which could cause a delay in construction resulting in increased costs, decreases in revenue and potentially cause us to abandon the opportunity; • yields may be less than anticipated as a result of delays in completing projects, costs that exceed budget, higher than expected concessions for lease-up and lower rents than initially estimated; • bankruptcy of developers in our development projects could impose delays and costs on us with respect to the development of our communities and may adversely affect our financial condition and results of operations; • we may abandon development opportunities that we have already begun to explore, and we may fail to recover expenses already incurred in connection with exploring such opportunities; • we may be unable to complete construction and lease-up of an apartment community on schedule, or incur development or construction costs that exceed our original estimates and we may be unable to charge rents that would compensate for any increase in such costs; • occupancy rates and rents at a newly developed apartment community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our profitability goals for that community; 13 • when we sell apartment communities that we developed or renovated, we may be subject to warranty or construction defects that are uninsured or exceed the limit of our insurance; • our failure to successfully enter into a joint venture agreement may prohibit an otherwise advantageous investment if we cannot raise the money through other means; and • adoption of laws and regulations designed to address climate change and its effects, including, for example, “green” building codes, could increase our costs of development and cause delays in the construction of our development communities.
Biggest changeOur development and construction activities are subject to the following risks: • we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in increased development costs, could delay initial occupancy dates for all or a portion of a development community and could require us to abandon our activities entirely with respect to a project for which we are unable to obtain permits or authorizations; • we may be unable to obtain financing for development activities under favorable terms, which could cause a delay in construction resulting in increased costs, decreases in revenue and potentially cause us to abandon the opportunity; • yields may be less than anticipated as a result of delays in completing projects, costs that exceed budget, higher than expected concessions for lease-up and lower rents than initially estimated; • bankruptcy of developers in our development projects could impose delays and costs on us with respect to the development of our communities and may adversely affect our financial condition and results of operations; • we may abandon development opportunities that we have already begun to explore, and we may fail to recover expenses already incurred in connection with exploring such opportunities; • we may be unable to complete construction and lease-up of an apartment community on schedule, including by reason of work stoppages, labor disputes, shortages of skilled tradespeople and shortages of building components and materials; • we may incur development or construction costs, including labor and building components and materials, that exceed our original estimates and we may be unable to charge rents that would compensate for any increase in such costs; 13 • occupancy rates and rents at a newly developed apartment community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our profitability goals for that community; • when we sell apartment communities that we developed or renovated, we may be subject to warranty or construction defects that are uninsured or exceed the limit of our insurance; • our failure to successfully enter into a joint venture agreement may prohibit an otherwise advantageous investment; • changes in laws and regulations, or enforcement priorities, such as the imposition of tariffs or changes in immigration laws or their enforcement, could result in higher building component costs, tighter overall labor conditions and a shortage of skilled tradespeople, which could increase our costs of development and cause delays in the construction of our development communities; and • adoption of laws and regulations designed to address climate change and its effects, including “green” building codes, could increase our costs of development and cause delays in the construction of our development communities.
Such factors could include: • weakness in the general economy, which lowers job growth and the associated demand for apartment housing; • competition from other apartment communities or alternative housing options (including condominiums and single-family houses for rent or sale); • overbuilding of new apartments or oversupply of available apartments or alternative housing options in our markets, which might adversely affect occupancy or rental rates and/or require rent concessions in order to lease apartments; • increases in operating costs (including real estate taxes, utilities and insurance premiums) due to inflation and other factors, which may not be offset by increased rental rates; • inability to rent apartments on favorable economic terms; • changes in governmental regulations and the related costs of compliance; • the enactment of rent control or rent stabilization laws in the areas in which we operate or other laws regulating multifamily housing; • other changes in laws, including tax laws and housing laws; • an uninsured loss, including those resulting from a catastrophic storm, earthquake or act of terrorism; • changes in interest rate levels and the availability of financing, borrower credit standards and down-payment requirements which could lead renters to purchase homes (if interest rates decrease and home loans are more readily 10 available) or increase our acquisition and operating costs (if interest rates increase and financing is less readily available); and • the relative illiquidity of real estate investments.
Such factors could include: • weakness in the general economy, which lowers job growth and the associated demand for apartment housing; • competition from other apartment communities or alternative housing options (including condominiums and single-family houses for rent or sale); • overbuilding of new apartments or oversupply of available apartments or alternative housing options in our markets, which might adversely affect occupancy or rental rates and/or require rent concessions in order to lease apartments; • increases in operating costs (including real estate taxes, utilities and insurance premiums) due to inflation and other factors, which may not be offset by increased rental rates; • inability to rent apartments on favorable economic terms; • changes in governmental regulations and the related costs of compliance; • the enactment of rent control or rent stabilization laws in the areas in which we operate or other laws regulating multifamily housing; • other changes in laws, including tax laws and housing laws; • an uninsured loss, including those resulting from a catastrophic storm, earthquake or act of terrorism; 10 • changes in interest rate levels and the availability of financing, borrower credit standards and down-payment requirements which could lead renters to purchase homes (if interest rates decrease and home loans are more readily available) or increase our acquisition and operating costs (if interest rates increase and financing is less readily available); and • the relative illiquidity of real estate investments.
Similarly, some of our competitors may have loan covenants or fund requirements that encourage decisions on occupancy targets or rental rates that vary from decisions based on market conditions, which could require us to react in ways that may affect our strategy or negatively affect our performance. We also face competition from other businesses for acquisition and development opportunities.
Similarly, some of our competitors may have loan covenants or fund requirements that encourage decisions on occupancy targets or rental rates that vary from decisions based on market conditions, which could require us to react in ways that may negatively affect our performance. We also face competition from other businesses for acquisition and development opportunities.
New or changed legal requirements implemented in the markets in which we operate could require us to make significant unanticipated expenditures and limit our ability to recover increases in operating expenses, impose limitations on our ability to charge market rents, increase rents or charge certain fees, impose limitations on our ability to enforce remedies for the failure to pay rent or otherwise adversely impact our operations.
New or changed legal requirements implemented in the markets in which we operate could require us to make significant unanticipated expenditures and could also limit our ability to recover increases in operating expenses, impose limitations on our ability to charge market rents or increase rents or charge certain fees, impose limitations on our ability to enforce remedies for the failure to pay rent or otherwise adversely impact our operations.
For example, various laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Among other things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency and waste management.
For example, various laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Among other things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy efficiency and waste management.
To the extent the current high interest rate environment continues or interest rates increase further, we could experience higher interest expense on our variable-rate debt or increase interest rates when refinancing maturing fixed-rate debt, which could have a material adverse effect on us and our ability to make payments on our debt and to make distributions or cause us to be in default under certain debt instruments.
To the extent the current interest rate environment continues or interest rates increase further, we could experience higher interest expense on our variable-rate debt or increase interest rates when refinancing maturing fixed-rate debt, which could have a material adverse effect on us and our ability to make payments on our debt and to make distributions or cause us to be in default under certain debt instruments.
In addition, the current high interest rate environment, or any further increase in interest rates, may lead holders of shares of our common stock to demand a higher yield on their shares from distributions by us, which could adversely affect the market price for our common stock.
In addition, the current interest rate environment, or any further increase in interest rates, may lead holders of shares of our common stock to demand a higher yield on their shares from distributions by us, which could adversely affect the market price for our common stock.
Competitive housing in a particular area, particularly new supply (and especially during early lease up efforts), could adversely affect our ability to retain residents, rent our apartments and increase or maintain rents, which could materially adversely affect our results of operations and financial condition.
Competitive housing in a particular area, particularly new supply (and especially during lease up efforts), could adversely affect our ability to retain residents, rent our apartments and increase or maintain rents, which could materially adversely affect our results of operations and financial condition.
As of December 31, 2023, 867,846 shares of preferred stock were issued and outstanding, all of which shares were MAA Series I preferred stock. 20 Tennessee Anti-Takeover Statutes As a Tennessee corporation, MAA is subject to various legislative acts, which impose restrictions on and require compliance with procedures designed to protect shareholders against unfair or coercive mergers and acquisitions.
As of December 31, 2024, 867,846 shares of preferred stock were issued and outstanding, all of which shares were MAA Series I preferred stock. 20 Tennessee Anti-Takeover Statutes As a Tennessee corporation, MAA is subject to various legislative acts, which impose restrictions on and require compliance with procedures designed to protect shareholders against unfair or coercive mergers and acquisitions.
Factors that may affect our occupancy levels, our rental revenues and/or the value of our properties include the following, among others: • downturns in global, national, regional and local economic conditions, particularly increases in unemployment; • declines in mortgage interest rates and home pricing, making alternative housing options more affordable; • government or builder incentives with respect to home ownership, making alternative housing options more attractive; • local real estate market conditions, including oversupply of apartments or other housing available for rent, or a reduction in demand for apartments in the area; • declines in the financial condition of our residents or commercial tenants, which may make it more difficult for us to collect rents from some residents or commercial tenants; • declines in market rental rates; • declines in household formation; and • increases in operating costs, if these costs cannot be passed through to our residents or commercial tenants.
Factors that may affect our occupancy levels, our rental revenues and/or the value of our properties include the following, among others: • downturns in global, national, regional and local economic conditions, particularly increases in unemployment or decreases in job growth in our markets; • declines in mortgage interest rates and home pricing, making alternative housing options more affordable; • government or builder incentives with respect to home ownership, making alternative housing options more attractive; • local real estate market conditions, including oversupply of apartments or other housing available for rent, or a reduction in demand for apartments in the area; • declines in the financial condition of our residents or commercial tenants, which may make it more difficult for us to collect rents from some residents or commercial tenants; • declines in market rental rates; • declines in household formation; and • increases in operating costs, if these costs cannot be passed through to our residents or commercial tenants.
To the extent climate change causes changes in weather patterns, areas where many of our communities are located could experience more frequent and intense extreme weather events and rising sea levels, which may cause significant damage to our properties, disrupt our operations and adversely impact our residents.
To the extent climate change causes changes in weather patterns, areas where many of our communities are located could experience more frequent and intense extreme weather events and rising sea levels, which may cause significant damage to our properties, disrupt our operations and adversely impact our residents and rental revenue.
We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn or slowdown in the multifamily sector or other economic factors. As of December 31, 2023, substantially all of our investments are concentrated in the multifamily sector.
We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn or slowdown in the multifamily sector or other economic factors. As of December 31, 2024, substantially all of our investments are concentrated in the multifamily sector.
For example, the current and potential impacts of climate change and the increased risk of extreme weather events and natural disasters have caused significant increases in our property insurance premiums and may adversely affect the availability and terms of coverage in the future.
For example, the current and potential impacts of climate change, along with the increased risk of extreme weather events and natural disasters have caused significant increases in our property insurance premiums and may adversely affect the availability and terms of coverage in the future.
Also, as of December 31, 2023, MAA owned approximately 97.4% of the OP Units. As such, MAA has substantial influence on the outcome of substantially all matters submitted to the Operating Partnership’s unitholders for approval.
Also, as of December 31, 2024, MAA owned approximately 97.4% of the OP Units. As such, MAA has substantial influence on the outcome of substantially all matters submitted to the Operating Partnership’s unitholders for approval.
For example, there are legislative efforts underway at the local, state and federal levels related to tenant screening limitations, affordable housing mandates, increased eviction notice periods, mandatory alternative dispute resolution and access to legal counsel for unrepresented tenants.
In addition, there are legislative efforts underway at the local, state and federal levels related to tenant screening limitations, affordable housing mandates, increased eviction notice periods, mandatory alternative dispute resolution and access to legal counsel for unrepresented tenants.
Some of our major expenses generally do not decline when related rents decline.
Some of our major expenses generally do not decline when rents decline.
As of December 31, 2023, approximately 41.4% of our portfolio (based on the number of completed apartment units) was located in our top five markets: Atlanta, Georgia; Dallas, Texas; Austin, Texas; Charlotte, North Carolina; and Orlando, Florida. In addition, our overall operations are concentrated in the Southeast, Southwest and Mid-Atlantic regions of the U.S.
As of December 31, 2024, approximately 41.2% of our portfolio (based on the number of completed apartment units) was located in our top five markets: Atlanta, Georgia; Dallas, Texas; Austin, Texas; Charlotte, North Carolina; and Orlando, Florida. In addition, our overall operations are concentrated in the Southeast, Southwest and Mid-Atlantic regions of the U.S.
Additionally, “social inflation” has resulted in the cost of general liability claims increasing at a rate well above general economic inflation due to a trend in increasing litigation costs related to unpredictable jury verdicts for plaintiffs seeking large monetary relief for their injuries. Premises liability is of particular concern for multifamily apartment owners.
Additionally, “social inflation” has caused the cost of general liability claims to rise at a rate well above general economic inflation, primarily due to a trend in increasing litigation costs related to unpredictable jury verdicts for plaintiffs seeking large monetary relief for their injuries. Premises liability is of particular concern for multifamily apartment owners.
Extreme weather or natural disasters may cause significant damage to our properties. Many of our apartment communities are located in areas that may be subject to extreme weather and natural disasters, such as floods, tornados, hurricanes and earthquakes, the likelihood or frequency of which events could increase in part based on the impact of climate change.
Extreme weather or natural disasters may cause significant damage to our properties. Many of our apartment communities are located in areas that may be subject to extreme weather and natural disasters, such as floods, tornados, hurricanes, earthquakes, wildfires and major winter storms, the likelihood or frequency of which events could increase in part based on the impact of climate change.
This risk of a data breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased due to the rise in new technologies and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflicts involving Russia, Belarus, Ukraine, Israel and other countries in the Middle East. 14 The security measures put in place by us and our service providers cannot provide absolute security and there can be no assurance that we or our service providers will not suffer a data security incident in the future, that unauthorized parties will not gain access to sensitive information stored on our or our service providers’ systems, that such access will not, whether temporarily or permanently, impact, interfere with or interrupt our operations, or that any such incident will be discovered in a timely manner.
This risk of a data breach or security failure, particularly through cyber-attacks or cyber-intrusion, has generally increased due to the rise in new technologies, such as ransomware and generative artificial intelligence, and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict, such as the ongoing conflicts involving Ukraine and in the Middle East. 14 The security measures put in place by us and our service providers cannot provide absolute security and there can be no assurance that we or our service providers will not suffer a data security incident in the future, that unauthorized parties will not gain access to sensitive information stored on our or our service providers’ systems, that such access will not, whether temporarily or permanently, impact, interfere with or interrupt our operations, or that any such incident will be discovered in a timely manner.
As of December 31, 2023, we had outstanding borrowings of $4.5 billion. Our indebtedness contains financial covenants as to interest coverage ratios, maximum secured debt, maintenance of unencumbered asset value, and total debt to gross assets, among others, and cross default provisions with other material debt.
As of December 31, 2024, we had outstanding borrowings of $5.0 billion. Our indebtedness contains financial covenants as to interest coverage ratios, maximum secured debt, maintenance of unencumbered asset value, and total debt to gross assets, among others, and cross default provisions with other material debt.
Increasing real estate taxes, utilities and insurance premiums, as well as changes in the terms and conditions of our insurance policies, may negatively impact operating results. As a result of our substantial real estate holdings, the cost of real estate taxes, utilities and insuring our apartment communities is a significant component of expense.
Increasing real estate taxes, utilities and insurance premiums, as well as changes in the terms and conditions of our insurance policies, may negatively impact operating results. As a result of our substantial real estate holdings, the cost of real estate taxes, utilities and insurance for our apartment communities represents a significant component of expense.
As of December 31, 2023, the amount of our total debt was $4.5 billion. We may incur additional indebtedness in the future in connection with, among other things, our acquisition, development and operating activities.
As of December 31, 2024, the amount of our total debt was $5.0 billion. We may incur additional indebtedness in the future in connection with, among other things, our acquisition, development and operating activities.
Risks Related to Our Real Estate Investments and Our Operations Unfavorable market and economic conditions could adversely affect occupancy levels, rental revenues and the value of our properties. General economic conditions in the U.S. have fluctuated significantly in recent quarters with the U.S. experiencing negative macroeconomic conditions such as inflationary and labor market concerns.
Risks Related to Our Real Estate Investments and Our Operations Unfavorable market and economic conditions could adversely affect occupancy levels, rental revenues and the value of our properties. General economic conditions in the U.S. have fluctuated in recent quarters, and concerns persist regarding negative macroeconomic conditions, such as inflation and the labor market.
Likewise, such conditions also may negatively impact the types, pricing and terms of insurance we are able to procure.
Similarly, these conditions may also negatively impact the types, pricing and terms of insurance we are able to procure.
As of December 31, 2023, we had five development communities under construction representing 1,970 units once complete. We may make further investments in these and other development communities as opportunities arise and may do so through joint ventures with unaffiliated parties.
As of December 31, 2024, we had seven development communities under construction representing 2,312 units once complete. We may make further investments in these and other development communities as opportunities arise and may do so through joint ventures with unaffiliated parties.
Changes in federal, state and local laws and regulations on sustainable buildings could result in increased operating costs and/or capital expenditures to improve the energy efficiency of our existing communities and could also require us to spend more on our new development communities without a corresponding increase in rental revenues.
Changes in federal, state and local laws and regulations on sustainable buildings could result in increased operating costs and capital expenditures for us to meet mandated levels of energy efficiency and/or greenhouse gas emissions performance with respect to our existing communities and could also require us to spend more on our new development communities without a corresponding increase in rental revenues.
Legislative or regulatory income tax changes related to REITs could materially and adversely affect us. The U.S. federal income tax laws and regulations governing REITs and their shareholders, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect.
The U.S. federal income tax laws and regulations governing REITs and their shareholders, as well as the administrative interpretations of those laws and regulations, are constantly under review and may be changed at any time, possibly with retroactive effect.
Over time, such conditions could result in reduced demand for housing in areas where our communities are located and increased costs related to further developing our communities to mitigate the effects of climate change or repairing damage related to the effects of climate change that may or may not be fully covered by insurance.
Over time, such conditions could result in reduced demand for housing in areas where our communities are located, as well as higher costs for mitigating or repairing damage related to the effects of climate change, some which may not be fully covered by insurance.
The imposition of such requirements could increase the costs of maintaining or improving our existing communities (for example by requiring retrofits of existing communities to improve their energy efficiency and/or resistance to inclement weather) and developing new communities without creating corresponding increases in rental revenues, which would have an adverse impact on our operating results. 12 Operations from new acquisitions, development projects and redevelopment activities may fail to perform as expected.
The imposition of such requirements could increase the costs of maintaining or improving our existing communities (for example by requiring retrofits of existing communities to improve their energy efficiency and/or resistance to inclement weather) and developing new communities without creating corresponding increases in rental revenues, which would have an adverse impact on our operating results and could adversely impact the value of our properties.
A safe harbor to the characterization of the disposition of property as a prohibited transaction and the resulting imposition of the 100% tax is available; however, we cannot assure that we will be able to comply with such safe harbor in connection with any property dispositions.
A safe harbor to the characterization of the disposition of property as a prohibited transaction and the resulting imposition of the 100% tax is available; however, we cannot assure that we will be able to comply with such safe harbor in connection with any property dispositions. 23 Legislative or regulatory income tax changes related to REITs could materially and adversely affect us.
If the costs associated with real estate taxes, utilities and insurance premiums should rise, without being offset by a corresponding increase in rental revenues or (in the case of insurance) strategic self-retention of risk, our results of operations could be negatively impacted, and our ability to make payments on our debt and to make distributions could be adversely affected.
If the costs associated with real estate taxes, utilities and insurance premiums continue to rise without being offset by corresponding increases in rental revenues or, in the case of insurance, strategic self-retention of risk, our operating results could be negatively impacted, potentially affecting our ability to meet debt obligations and make distributions.
In the last two years, we have transformed our executive team by elevating internal candidates to the offices of President, Chief Financial Officer, Chief Administrative Officer, Chief Strategy and Analysis Officer and Chief Technology and Innovation Officer. In addition, at the 2023 annual meeting of MAA’s shareholders, we added three new members to MAA’s Board of Directors.
In the last three years, we have transformed our executive team by elevating internal candidates to the offices of Chief Executive Officer (effective April 1, 2025), President, Chief Financial Officer, Chief Administrative Officer, Chief Strategy and Analysis Officer and Chief Technology and Innovation Officer.
Many of our apartment communities are located along or near coastal areas that have historically been subject to the risk of extreme weather events.
Many of our apartment communities are located in areas, such as coastal regions, that have historically been vulnerable to extreme weather events.
In general, these factors have put pressure on insurance premiums and contributed to an inability to obtain appropriate insurance coverage at reasonable rates without the assumption of increasingly higher levels of self-retained risk.
In general, these factors have pressured insurance premiums and made it more challenging to obtain appropriate coverage at reasonable rates without assuming higher levels of self-retained risk.
Real estate taxes, utilities and insurance premiums are subject to significant increases and fluctuations, which can be widely outside of our control.
These costs are subject to substantial increases and fluctuations, which can be widely outside of our control.
The occupancy rates and rents at these properties may fail to meet our expectations underlying our investment.
We may also overestimate the revenue (or underestimate the expenses) that a new or repositioned property may generate. The occupancy rates and rents at these properties may fail to meet our expectations underlying our investment.
As described in more detail in Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K, we are currently a defendant, among other companies, in lawsuits filed by plaintiffs individually and on behalf of a purported class of plaintiffs alleging that RealPage, Inc. and lessors of multifamily residential real estate, including us, conspired to artificially inflate the prices of multifamily residential real estate above competitive levels. 15 Legal proceedings, if decided adversely to or settled by us, and not covered by insurance, could result in liability material to our financial condition, results of operations or cash flows.
For more detail on these lawsuits, see Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K. 15 Legal proceedings, if decided adversely to or settled by us, and not covered by insurance, could result in liability material to our financial condition, results of operations or cash flows.
We intend to acquire, develop and redevelop apartment communities as part of our business strategy. Newly acquired, developed or renovated properties may not perform as we expect. We may also overestimate the revenue (or underestimate the expenses) that a new or repositioned property may generate.
Additionally, if non-compliant with building efficiency standards, our existing communities may decrease in value. 12 Operations from new acquisitions, development projects and redevelopment activities may fail to perform as expected. We intend to acquire, develop and redevelop apartment communities as part of our business strategy. Newly acquired, developed or renovated properties may not perform as we expect.
No assurance can be given that our subsidiary REIT will qualify as a REIT for any particular year. If any REIT previously acquired by us failed to qualify as a REIT for U.S. federal income tax purposes, we would incur adverse tax consequences and our financial condition and results of operations would be materially adversely affected.
No assurance can be given that our subsidiary REIT will qualify as a REIT for any particular year. The Operating Partnership may fail to be treated as a partnership for federal income tax purposes.
Interest rates increased significantly in 2022 and 2023.
Interest rates increased significantly in 2022 and 2023, and while the Federal Reserve began cutting its benchmark interest rate in 2024, interest rates remain elevated.
Removed
In the past, we have acquired companies that operated in a manner intended to allow them to qualify as REITs for U.S. federal income tax purposes.
Added
The rapid evolution and increased adoption of artificial intelligence technologies, by us and our third-party service providers, may also heighten our cybersecurity risks by making cyber attacks more difficult to detect, contain and mitigate.
Removed
If any such REIT previously acquired by MAA, referred to as a Merged REIT, is determined to have lost its REIT status at any time prior to its merger with MAA, MAA would be subject to serious adverse tax consequences, including: • MAA would be required to pay U.S. federal income tax at regular corporate rates on the taxable income of such Merged REIT without the benefit of the dividends paid deduction for the taxable years that the Merged REIT did not qualify as a REIT and for which the statute of limitations period remains open; and • MAA would be required to pay any federal alternative minimum tax liability of the Merged REIT and any applicable state and local tax liability, in each case, for all taxable years that remain open under the applicable statute of limitations periods.
Added
For example, privacy laws continue to evolve, with several states passing new data privacy laws that govern the collection, processing, use, security and disclosure of information about state residents, such as the Texas Data Privacy and Security Act.
Removed
MAA is liable for any tax liability of a Merged REIT with respect to any periods prior to the merger of such Merged REIT with MAA.
Added
For example, we are currently a defendant, among other companies, in lawsuits filed by plaintiffs individually and on behalf of a purported class of plaintiffs alleging that RealPage, Inc. and many of the largest owners and operators of apartment communities in the country, including us, conspired to artificially inflate the prices of multifamily rents above competitive levels using RealPage’s revenue management software in violation of state and federal antitrust laws.
Removed
If a Merged REIT failed to qualify as a REIT, then in the event of a taxable disposition by MAA of an asset previously held by the Merged REIT during a specified period of up to five years following the merger of the Merged REIT with MAA, MAA will be subject to corporate income tax with respect to any built-in gain inherent in such asset as of the date of such merger.
Added
Similarly, another lawsuit alleging violations of the District of Columbia’s antitrust laws has been filed by the District of Columbia against RealPage and a number of large apartment community owners and operators, including us.
Removed
In addition, unless an applicable statutory relief provision applies, if a Merged REIT failed to qualify as a REIT for a taxable year, then the Merged REIT would not have been entitled to re-elect to be taxed as a REIT until the fifth taxable year following the year during which it was disqualified.
Removed
Furthermore, if both MAA and a Merged REIT were “investment companies” under the “investment company” rules set forth in Section 368 of the Code at the time of the merger of MAA and such Merged REIT, the failure of MAA or such Merged REIT to have qualified as a REIT at the time of their merger could result in such merger being treated as taxable for federal income tax purposes.
Removed
As a result of all these factors, the failure by a Merged REIT to have qualified as a REIT could jeopardize MAA’s qualification as a REIT and require the Operating Partnership to provide material amounts of cash to MAA to satisfy MAA’s additional tax liabilities and, therefore, could have a material adverse effect on MAA’s business prospects, financial condition or results of operations and on MAA’s ability to make payments on our debt and to make distributions. 23 The Operating Partnership may fail to be treated as a partnership for federal income tax purposes.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeKey processes in our program include: • regular cybersecurity training and testing for employees with company email and access to connected devices; • continuous security event monitoring, management and incident response; • regular testing of incident response procedures; • regular internal reporting; • regular consulting with external advisors and specialists regarding opportunities and enhancements to strengthen our cyber practices and policies and enhance our cybersecurity maturity; • independent third-party testing of our information technology controls and defenses, including penetration tests; • independent third-party audits of our cybersecurity controls; and • annual independent third-party reviews of program maturity based on the National Institute of Standards and Technology (NIST) cybersecurity framework. 24 In addition, as part of our cybersecurity risk management program, we have processes designed to oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers, and our cybersecurity risk management program takes into account third-party systems through which we could be impacted by the compromise of the security of a third-party service provider.
Biggest changeKey processes in our program include: • regular cybersecurity training and testing for employees with company email and access to connected devices; • continuous security event monitoring, management and incident response; • regular testing of incident response procedures; • regular internal reporting; • regular consulting with external advisors and specialists regarding opportunities and enhancements to strengthen our cyber practices and policies and enhance our cybersecurity maturity; • independent third-party testing of our information technology controls and defenses, including penetration tests; • independent third-party audits of our cybersecurity controls; and • annual independent third-party reviews of program maturity based on the National Institute of Standards and Technology (NIST) cybersecurity framework.
We maintain a cyber insurance policy, we periodically meet with our insurer to discuss emerging trends in cybersecurity and we utilize self-assessment tools and other services provided by our insurance broker and insurer, including annual tabletop exercises conducted by cybersecurity experts. Our cybersecurity risk management program is integrated into our overall risk management system.
We maintain a cyber insurance policy, we periodically meet with our insurance broker and insurer to discuss emerging trends in cybersecurity and we utilize self-assessment tools and other services provided by our insurance broker and insurer, including annual tabletop exercises conducted by cybersecurity experts. Our cybersecurity risk management program is integrated into our overall risk management system .
Likewise, the Audit Committee or the Board of Directors may request members of management or others to attend meetings at which cybersecurity risk management is addressed. 25 As part of our cybersecurity risk management program, we have adopted an incident response plan which provides for controls and procedures upon the occurrence of a cybersecurity event.
Likewise, the Audit Committee or the Board of Directors may request members of management or others to attend meetings at which cybersecurity risk management is addressed. As part of our cybersecurity risk management program, we have adopted an incident response plan which provides for controls and procedures upon the occurrence of a cybersecurity event.
Cybersecurity risks are part of the broader ERM process overseen by our Board of Directors. ERM risk assessment results are presented annually to the Board of Directors, and status updates are delivered quarterly to the Audit Committee. 26
Cybersecurity risks are part of the broader ERM process overseen by our Board of Directors. ERM risk assessment results are presented annually to the Board of Directors, and status updates are delivered quarterly to the Audit Committee. 25
Our Vice President Cyber Security has a dotted line reporting relationship to our Chief Administrative Officer and General Counsel to help ensure that risks from cybersecurity threats are considered as part of the broader ERM process. At a management level, our Chief Administrative Officer and General Counsel leads our ERM process.
Our Vice President Cyber Security has a dotted line reporting relationship to our Chief Administrative Officer and General Counsel to help ensure that risks from cybersecurity threats are considered as part of the broader ERM process.
At a management level, our cybersecurity risk management program is led by our Chief Technology and Innovation Officer who has over 20 years experience providing business and information technology, or IT, process consulting and regulatory compliance services, including founding a cyber-security consulting and regulatory compliance firm, and whose certifications include Big 4 SOX Global Subject Matter Specialist, Certified Public Accountant and Certified Information Systems Auditor.
At a management level, our cybersecurity risk management program is led by our Chief Technology and Innovation Officer who has over 20 years of experience providing business and information technology, or IT, process consulting and regulatory compliance services, including founding a cyber-security consulting and regulatory compliance firm and serving as Sarbanes-Oxley subject matter specialist for an international public accounting firm, and whose certifications include Certified Public Accountant and Certified Information Systems Auditor.
Members of our cybersecurity team deliver regular updates to our Chief Technology and Innovation Officer and Chief Administrative Officer and General Counsel. The Audit Committee of our Board of Directors receives regular reports, including an annual cybersecurity maturity assessment and quarterly scorecards, from our Chief Technology and Innovation Officer.
The Audit Committee of our Board of Directors receives regular reports, including an annual cybersecurity maturity assessment and quarterly scorecards, from our Chief Technology and Innovation Officer.
We do not believe that any risks from cybersecurity threats of which we are aware, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
At a management level, our Chief Administrative Officer and General Counsel leads our ERM process. 24 We do not believe that any risks from cybersecurity threats of which we are aware, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
Partnering with our Chief Technology and Innovations Officer is our Vice President Cyber Security, who has over 30 years of IT technical and IT business process experience, has been an IT and cyber security leader for multiple financial services companies and has certifications including training in Ethical Hacking, serving as the local IT Sector Chief for the Federal Bureau of Investigation’s, or FBI, InfraGard Program, FBI Secret Clearance for all IT related incidents/cybersecurity initiatives, and FBI Citizens Academy Alumni.
Partnering with our Chief Technology and Innovation Officer is our Vice President Cyber Security, who has over 30 years of IT technical and IT business process experience and has been an IT and cyber security leader for multiple financial services companies.
Removed
Collectively, our cybersecurity team consists of 11 professionals with an average cybersecurity tenure of 17 years and certifications including CISSP, AWS Trainer, AWS Architect, Okta administrator, Splunk administrator, CCNP and CCDA, Microsoft Security, Compliance and Identity, Azure CompTIA Security+ and Splunk, information systems auditor, Red Hat Enterprise Linux certification, among other degrees, certifications and work-related experience.
Added
In addition, as part of our cybersecurity risk management program, we have processes designed to oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers, and our cybersecurity risk management program takes into account third-party systems through which we could be impacted by the compromise of the security of a third-party service provider.
Added
Collectively, our cybersecurity team consists of 5 professionals with an average cybersecurity tenure of 15 years and various relevant certifications. Members of our cybersecurity team deliver regular updates to our Chief Technology and Innovation Officer and Chief Administrative Officer and General Counsel.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following schedule summarizes our apartment community portfolio and occupancy levels by location, as of December 31, 2023: Number of Communities (1) Number of Units (2) Average Physical Occupancy (3) Atlanta, GA 29 11,434 94.5 % Dallas, TX 27 10,116 95.6 % Austin, TX 20 6,829 95.1 % Charlotte, NC 19 5,651 95.6 % Raleigh/Durham, NC 15 5,350 95.9 % Orlando, FL 12 5,274 96.0 % Tampa, FL 14 5,220 95.8 % Houston, TX 15 4,867 95.6 % Nashville, TN 12 4,375 95.8 % Fort Worth, TX 9 3,687 95.6 % Jacksonville, FL 10 3,496 95.7 % Charleston, SC 11 3,168 95.9 % Phoenix, AZ 8 2,623 95.5 % Greenville, SC 10 2,355 96.1 % Northern Virginia 4 1,888 96.2 % Savannah, GA 6 1,837 96.2 % Memphis, TN 4 1,811 94.7 % Richmond, VA 6 1,732 95.9 % San Antonio, TX 4 1,504 95.8 % Birmingham, AL 5 1,462 96.2 % Fredericksburg, VA 4 1,435 96.4 % Huntsville, AL 3 1,228 95.3 % Kansas City, MO-KS 3 1,110 95.9 % Chattanooga, TN 4 943 95.7 % Lexington, KY 4 924 96.7 % Denver, CO 2 812 95.4 % Norfolk / Hampton / Virginia Beach, VA 3 788 95.9 % Las Vegas, NV 2 721 95.8 % Tallahassee, FL 2 604 95.2 % Gainesville, FL 2 468 95.7 % Louisville, KY 1 384 95.9 % Maryland 1 361 96.4 % Gulf Shores, AL 1 324 95.7 % Panama City, FL 1 254 95.5 % Charlottesville, VA 1 251 96.6 % Same Store 274 95,286 95.6 % Charlotte, NC 3 912 87.9 % Phoenix, AZ 3 671 91.1 % Orlando, FL 2 633 90.9 % Columbia, SC 2 576 95.2 % South Florida, FL 1 480 95.3 % Austin, TX 1 350 83.0 % Atlanta, GA 1 340 39.7 % Houston, TX 1 308 94.7 % Denver, CO 2 309 95.5 % Richmond, VA 1 272 96.5 % Tampa, FL 1 (4) 196 94.9 % Salt Lake City, UT 1 196 30.3 % Gulf Shores, AL 1 96 97.0 % Raleigh/Durham, NC 1 — — Total (5) 295 100,625 95.1 % (1) Number of communities includes five communities under development as of December 31, 2023.
Biggest changeThe following schedule summarizes our apartment community portfolio by location as of December 31, 2024, as well as occupancy levels and average effective rent per unit by location for the year ended December 31, 2024: Number of Communities (1) Number of Units (2) Average Physical Occupancy (3) Average Effective Rent per Unit (4) Atlanta, GA 29 11,434 94.6 % $ 1,819 Dallas, TX 27 10,117 95.3 % 1,662 Austin, TX 20 6,829 95.0 % 1,585 Charlotte, NC 19 5,651 95.6 % 1,638 Orlando, FL 13 5,643 95.9 % 1,979 Tampa, FL 14 5,416 96.0 % 2,093 Raleigh/Durham, NC 15 5,350 95.8 % 1,540 Houston, TX 16 5,175 95.4 % 1,432 Nashville, TN 12 4,375 95.9 % 1,691 Fort Worth, TX 9 3,687 95.3 % 1,579 Jacksonville, FL 10 3,496 95.7 % 1,514 Charleston, SC 11 3,168 96.1 % 1,801 Phoenix, AZ 9 2,968 95.3 % 1,734 Greenville, SC 10 2,354 95.8 % 1,331 Northern Virginia 4 1,888 96.6 % 2,445 Savannah, GA 6 1,837 95.8 % 1,706 Memphis, TN 4 1,811 95.2 % 1,371 Richmond, VA 6 1,732 96.4 % 1,659 San Antonio, TX 4 1,504 95.6 % 1,373 Birmingham, AL 5 1,462 95.6 % 1,403 Fredericksburg, VA 4 1,435 96.6 % 1,850 Huntsville, AL 3 1,228 95.2 % 1,307 Denver, CO 3 1,118 95.3 % 1,974 Kansas City, MO-KS 3 1,110 95.8 % 1,614 Chattanooga, TN 4 943 95.4 % 1,291 Lexington, KY 4 924 96.4 % 1,273 Norfolk / Hampton / Virginia Beach, VA 3 788 94.8 % 1,671 Las Vegas, NV 2 721 96.5 % 1,582 Tallahassee, FL 2 604 95.6 % 1,538 South Florida, FL 1 480 95.5 % 2,421 Gainesville, FL 2 468 95.8 % 1,692 Louisville, KY 1 384 95.7 % 1,201 Maryland, MD 1 361 96.4 % 2,265 Gulf Shores, AL 1 324 95.3 % 1,429 Panama City, FL 1 254 95.2 % 1,687 Charlottesville, VA 1 251 96.3 % 2,081 Same Store 279 97,290 95.5 % $ 1,688 Charlotte, NC 4 (5) 696 89.5 % 1,908 Phoenix, AZ 3 (5) 640 88.3 % 1,887 Columbia, SC 2 576 92.9 % 1,247 Orlando, FL 2 574 87.9 % 2,098 Salt Lake City, UT 1 400 69.5 % 1,766 Raleigh/Durham, NC 2 379 70.8 % 1,876 Denver, CO 1 352 66.9 % 2,268 Austin, TX 1 350 95.5 % 1,626 Atlanta, GA 1 340 82.1 % 2,115 Dallas, TX 1 386 44.0 % 1,978 Richmond, VA 1 (5) — — — Tampa, FL 1 (5) — — — Gulf Shores, AL 1 96 95.7 % 2,325 Total (6) 300 102,079 94.8 % $ 1,697 (1) Number of communities includes seven communities under development as of December 31, 2024.
(4) Includes a completed MAA multifamily apartment community expansion development and a new multifamily apartment community development that has not yet delivered any units. (5) Schedule excludes a 269-unit joint venture property in Washington, D.C. 27 Thirty-four of our apartment communities reflected in the above schedule also include retail components.
(5) Includes a new multifamily apartment community development that has not yet delivered any units. (6) Schedule excludes a 269-unit joint venture property in Washington, D.C. Thirty-five of our apartment communities reflected in the above schedule also include retail components.
(2) Number of units excludes development units not yet delivered. (3) Average physical occupancy is calculated by dividing the average daily number of units occupied in 2023 by the total number of units at each apartment community.
One of these development communities is a phase II expansion of an existing apartment community. (2) Number of units excludes development units not yet delivered. (3) Average physical occupancy is calculated by dividing the average daily number of units occupied in 2024 by the total number of units at each apartment community.
Mortgage Financing As of December 31, 2023, we had $363.3 million of indebtedness collateralized, secured and outstanding as set forth in Schedule III – Real Estate and Accumulated Depreciation included in this Annual Report on Form 10-K.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for a discussion of our Same Store and Non-Same Store and Other segments. 26 Mortgage Financing As of December 31, 2024, we had $363.3 million of indebtedness collateralized, secured and outstanding as set forth in Schedule III – Real Estate and Accumulated Depreciation included in this Annual Report on Form 10-K.
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See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K for a discussion of our Same Store and Non-Same Store and Other segments.
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(4) Average effective rent per unit represents the average of gross rent amounts, after the effect of leasing concessions, for occupied apartment units plus prevalent market rates asked for unoccupied apartment units, divided by the total number of units. Leasing concessions represent discounts to the current market rate.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(3) This column reflects the number of shares of MAA’s common stock that are available for purchase under the 4.0 million share repurchase program authorized by MAA’s Board of Directors in December 2015. 29 Comparison of Five-year Cumulative Total Returns The following graph compares the cumulative total returns of the shareholders of MAA since December 31, 2018 with the S&P 500 Index and the Dow Jones U.S.
Biggest changePurchases of Equity Securities The following table reflects repurchases of shares of MAA’s common stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs (1) October 1, 2024 - October 31, 2024 — $ — — 4,000,000 November 1, 2024 - November 30, 2024 — $ — — 4,000,000 December 1, 2024 - December 31, 2024 — $ — — 4,000,000 Total — — 4,000,000 (1) This column reflects the number of shares of MAA’s common stock that are available for purchase under the 4.0 million share repurchase program authorized by MAA’s Board of Directors in December 2015. 28 Comparison of Five-year Cumulative Total Returns The following graph compares the cumulative total returns of the shareholders of MAA since December 31, 2019 with the S&P 500 Index and the Dow Jones (DJ) U.S.
The DRSPP also allows for the optional purchase of MAA common stock of at least $250, but not more than $5,000 in any given month. In our absolute discretion, we may grant waivers to allow for optional cash payments in excess of $5,000.
The DRSPP also allows for the optional purchase of MAA’s common stock of at least $250, but not more than $5,000 in any given month. In its absolute discretion, MAA may grant waivers to allow for optional cash payments in excess of $5,000.
Direct Stock Purchase and Distribution Reinvestment Plan We have established the dividend and distribution reinvestment stock purchase plan, or DRSPP, under which holders of common stock, preferred stock and OP Units can elect to automatically reinvest their distributions in shares of MAA common stock.
Direct Stock Purchase and Distribution Reinvestment Plan MAA has established the dividend and distribution reinvestment stock purchase plan, or DRSPP, under which holders of common stock, preferred stock and OP Units can elect to automatically reinvest their distributions in shares of MAA’s common stock.
To fulfill our obligations under the DRSPP, we may either issue additional shares of common stock or repurchase common stock in the open market. We may elect to sell shares under the DRSPP at up to a 5% discount.
To fulfill its obligations under the DRSPP, MAA may either issue additional shares of common stock or repurchase common stock in the open market. MAA may elect to sell shares under the DRSPP at up to a 5% discount.
As of February 6, 2024, there were approximately 2,100 holders of record of the common stock. MAA believes it has a significantly larger number of beneficial owners of its common stock. MAA has a history of declaring dividends to holders of MAA common stock.
As of February 4, 2025, there were approximately 2,000 holders of record of the common stock. MAA believes it has a significantly larger number of beneficial owners of its common stock. MAA has a history of declaring dividends to holders of MAA common stock.
During the year ended December 31, 2023, we issued 9,787 shares through our DRSPP and no shares were issued at a discount. Mid-America Apartments, L.P. Operating Partnership Units There is no established public trading market for the Operating Partnership’s OP Units.
During the year ended December 31, 2024, MAA issued 10,610 shares through the DRSPP and no shares were issued at a discount. Mid-America Apartments, L.P. Operating Partnership Units There is no established public trading market for the Operating Partnership’s OP Units.
During the year ended December 31, 2023, MAA issued a total of 41,184 shares of common stock upon redemption of OP Units.
During the year ended December 31, 2024, MAA issued a total of 68,419 shares of common stock upon redemption of OP Units.
As of December 31, 2023, there were 119,838,096 OP Units outstanding in the Operating Partnership, of which 116,694,124 OP Units, or 97.4%, were owned by MAA and 3,143,972 OP Units, or 2.6%, were owned by limited partners.
As of December 31, 2024, there were 119,958,973 OP Units outstanding in the Operating Partnership, of which 116,883,421 OP Units, or 97.4%, were owned by MAA and 3,075,552 OP Units, or 2.6%, were owned by limited partners.
MAA has no obligation to issue shares through the ATM program. 28 During the year ended December 31, 2023, MAA did not sell any shares of common stock under its ATM program. As of December 31, 2023, there were 4.0 million shares remaining under the current ATM program.
MAA has no obligation to issue shares through the ATM program. During the year ended December 31, 2024, MAA did not sell any shares of common stock under the ATM program.
Factors affecting this determination include, among others, the share price and expected rates of return. As of December 31, 2023, no shares have been repurchased under the authorization.
From time to time, we may repurchase shares under this authorization when we believe that shareholder value would be enhanced. Factors affecting this determination include, among others, the share price and expected rates of return. As of December 31, 2024, no shares have been repurchased under the authorization.
Stock Repurchase Plan In December 2015, MAA’s Board of Directors authorized the repurchase of up to 4.0 million shares of MAA common stock, which represented approximately 5.3% of MAA’s common stock outstanding at the time of such authorization. From time to time, we may repurchase shares under this authorization when we believe that shareholder value would be enhanced.
As of December 31, 2024, 4.0 million shares of MAA’s common stock remained issuable under the ATM program. 27 Stock Repurchase Plan In December 2015, MAA’s Board of Directors authorized the repurchase of up to 4.0 million shares of MAA common stock, which represented approximately 5.3% of MAA’s common stock outstanding at the time of such authorization.
At-the-Market Share Offering Program In November 2021, the Company entered into an equity distribution agreement to establish a new ATM program, replacing MAA’s previous ATM program and allowing MAA to sell shares of its common stock from time to time to or through its sales agents into the existing market at current market prices, and to enter into separate forward sales agreements to or through its forward purchasers.
At-the-Market Equity Offering Program MAA has entered into an at-the-money equity offering program, or ATM program, enabling MAA to sell shares of its common stock into the existing market at current market prices from time to time to or through the sales agents under the ATM program.
Under the current ATM program, MAA has the authority to issue up to an aggregate of 4.0 million shares of its common stock, at such times to be determined by MAA.
Pursuant to the ATM program, MAA from time to time may also enter into forward sale agreements and sell shares of common stock pursuant to these agreements. Through the ATM program, MAA may issue up to an aggregate of 4.0 million shares of its common stock at such times as determined by MAA.
Removed
Purchases of Equity Securities The following table reflects repurchases of shares of MAA’s common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs (3) October 1, 2023 - October 31, 2023 62 $ 129.23 — 4,000,000 November 1, 2023 - November 30, 2023 — $ — — 4,000,000 December 1, 2023 - December 31, 2023 — $ — — 4,000,000 Total — — 4,000,000 (1) The shares reflected in this column are shares of MAA’s common stock surrendered by employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares.
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Year Ended December 31, 2019 2020 2021 2022 2023 2024 Mid-America Apartment Communities, Inc. $ 100.00 $ 99.36 $ 184.68 $ 129.74 $ 115.38 $ 138.39 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 DJ U.S. Real Estate Apartments Index 100.00 88.07 142.47 96.76 103.64 124.86 Ite m 6. [Reserved]. 29
Removed
(2) The price per share is based on the closing price of MAA’s common stock as of the date of determination of the statutory minimum for federal and state tax obligations.
Removed
Year Ended December 31, 2018 2019 2020 2021 2022 2023 Mid-America Apartment Communities, Inc. $ 100.00 $ 142.52 $ 141.60 $ 263.20 $ 184.90 $ 164.44 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 DJ US REIT Apartment Index 100.00 128.11 112.83 182.52 123.96 132.77 Ite m 6. [Reserved]. 30

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents a reconciliation of net income to EBITDA, EBITDA re and Adjusted EBITDA re for the years ended December 31, 2023 and 2022, as we believe net income is the most directly comparable GAAP measure (dollars in thousands): Year Ended December 31, 2023 December 31, 2022 Net income $ 567,831 $ 654,776 Depreciation and amortization 565,063 542,998 Interest expense 149,234 154,747 Income tax expense (benefit) 4,744 (6,208 ) EBITDA 1,286,872 1,346,313 Loss (gain) on sale of depreciable real estate assets 62 (214,762 ) Adjustments to reflect MAA’s share of EBITDA re of unconsolidated affiliates 1,350 1,357 EBITDA re 1,288,284 1,132,908 (Gain) loss on embedded derivative in preferred shares (1) (18,528 ) 21,107 Gain on sale of non-depreciable real estate assets (54 ) (809 ) (Gain) loss on investments (1) (4,449 ) 45,357 Casualty related charges (recoveries), net (1) (2) 980 (29,930 ) (Gain) loss on debt extinguishment (1) (57 ) 47 Legal (recoveries), costs and settlements, net (1) (4,454 ) 8,535 COVID-19 related costs (1) — 575 Adjusted EBITDA re $ 1,261,722 $ 1,177,790 (1) Included in “Other non-operating (income) expense” in the Consolidated Statements of Operations.
Biggest changeThe following table presents a reconciliation of unsecured notes payable and secured notes payable to net debt as of December 31, 2024 and 2023, as we believe unsecured notes payable and secured notes payable, combined, is the most directly comparable GAAP measure (dollars in thousands): December 31, 2024 December 31, 2023 Unsecured notes payable $ 4,620,690 $ 4,180,084 Secured notes payable 360,267 360,141 Total debt 4,980,957 4,540,225 Cash and cash equivalents (43,018 ) (41,314 ) Net debt $ 4,937,939 $ 4,498,911 34 The following table presents a reconciliation of net income to EBITDA, EBITDA re and Adjusted EBITDA re for the years ended December 31, 2024 and 2023, as we believe net income is the most directly comparable GAAP measure (dollars in thousands): Year Ended December 31, 2024 December 31, 2023 Net income $ 541,576 $ 567,831 Depreciation and amortization 585,616 565,063 Interest expense 168,544 149,234 Income tax expense 5,240 4,744 EBITDA 1,300,976 1,286,872 (Gain) loss on sale of depreciable real estate assets (55,003 ) 62 Gain on consolidation of third-party development (1) (11,239 ) — Adjustments to reflect the Company’s share of EBITDA re of an unconsolidated affiliate 1,363 1,350 EBITDA re 1,236,097 1,288,284 Loss (gain) on embedded derivative in preferred shares (1) 18,751 (18,528 ) Gain on sale of non-depreciable real estate assets — (54 ) Gain on investments (1) (7,809 ) (4,449 ) Casualty related (recoveries) charges, net (1) (9,326 ) 980 Gain on debt extinguishment (1) — (57 ) Legal costs, settlements and (recoveries), net (1) (2) 9,437 (4,454 ) Adjusted EBITDA re $ 1,247,150 $ 1,261,722 (1) Included in “Other non-operating (income) expense” in the Consolidated Statements of Operations.
Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements as a result of many factors, including, but not limited to, those under the heading “Risk Factors” in this Annual Report on Form 10-K. MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT.
Our actual results, performance and achievements may differ materially from those expressed or implied by such forward-looking statements as a result of many factors, including, but not limited to, those under the heading “Risk Factors” in this Annual Report on Form 10-K. MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT.
In January 2023, MAA settled its two forward sale agreements with respect to all 1.1 million shares at a forward price per share of $185.23, which is inclusive of adjustments made to reflect the then-current federal funds rate, the amount of dividends paid to holders of MAA common stock and commissions paid to sales agents, for net proceeds of $203.7 million.
In January 2023, MAA settled its two forward sale agreements with respect to all 1.1 million shares at a forward price per share of $185.23, which is inclusive of adjustments made to reflect the then-current federal funds rate, the amount of dividends paid to holders of MAA’s common stock and commissions paid to sales agents, for net proceeds of $203.7 million.
The income for the year ended December 31, 2023 was driven by $18.5 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, $4.4 million of non-cash gain from investments, $5.5 million of miscellaneous income and $3.4 million of interest income, partially offset by $1.0 million in net casualty loss.
The income for the year ended December 31, 2023 was primarily driven by $18.5 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, $4.4 million of non-cash gain from investments, $5.5 million of miscellaneous income and $3.4 million of interest income, partially offset by $1.0 million in net casualty loss.
In calculating the asset value of acquired tangible and intangible assets, management may use significant subjective inputs, including forecasted net operating income, or NOI, and market specific capitalization and discount rates. Management analyzes historical stabilized NOI to determine its estimate for forecasted NOI.
In calculating the asset value of acquired tangible and intangible assets, management may use significant subjective inputs, including forecasted net operating income, or NOI, and market specific capitalization and discount rates. Management analyzes stabilized NOI to determine its estimate for forecasted NOI.
Adjusted EBITDA re is comprised of EBITDA re further adjusted for items that are not considered part of our core operations such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments; casualty related charges (recoveries), net; gain or loss on debt extinguishment; legal (recoveries), costs and settlements, net; and COVID-19 related costs.
Adjusted EBITDA re is comprised of EBITDA re further adjusted for items that are not considered part of our core operations such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments; casualty related charges (recoveries), net; gain or loss on debt extinguishment; and legal costs, settlements and (recoveries), net.
(2) Primarily comprised of a ground lease underlying one apartment community we own and the lease of our corporate headquarters. As of December 31, 2023, we also had obligations, which are not reflected in the table above, to make additional capital contributions to six technology-focused limited partnerships in which we hold equity interests.
(2) Primarily comprised of a ground lease underlying one apartment community we own and the lease of our corporate headquarters. As of December 31, 2024, we also had obligations, which are not reflected in the table above, to make additional capital contributions to six technology-focused limited partnerships in which we hold equity interests.
No material impairment losses were recognized during the years ended December 31, 2023 and 2022. Our impairment assessments may contain uncertainties because they require management to make assumptions and to apply judgment to estimate future undiscounted cash flows and the fair value of the assets.
No material impairment losses were recognized during the years ended December 31, 2024 and 2023. Our impairment assessments may contain uncertainties because they require management to make assumptions and to apply judgment to estimate future undiscounted cash flows and the fair value of the assets.
The increase was primarily driven by the recognition of depreciation expense associated with our completed development communities and capital spend activities made in the normal course of business during the year ended December 31, 2023, partially offset from decreased depreciation expense from disposed communities during the year ended December 31, 2022.
The increase was primarily driven by the recognition of depreciation expense associated with our completed development communities and capital spend activities made in the normal course of business during the year ended December 31, 2024, partially offset from decreased depreciation expense from disposed communities during the year ended December 31, 2023.
The increase in cash inflows related to the proceeds from issuances of common shares resulted from the proceeds from the settlement of two forward sale agreements with respect to a total of 1.1 million shares at a forward price per share of $185.23 during the year ended December 31, 2023.
The decrease in cash inflows related to the proceeds from issuances of common shares resulted from the proceeds from the settlement of two forward sale agreements with respect to a total of 1.1 million shares at a forward price per share of $185.23 during the year ended December 31, 2023.
For the year ending December 31, 2024, we expect that our total capital expenditures relating to our development activities, our property redevelopment and repositioning activities and recurring capital replacements will be in line with our total capital expenditures for the year ended December 31, 2023. We expect to have additional development projects in the future.
For the year ending December 31, 2025, we expect that our total capital expenditures relating to our development activities, our property redevelopment and repositioning activities and recurring capital replacements will be in line with our total capital expenditures for the year ended December 31, 2024. We expect to have additional development projects in the future.
Valuation of embedded derivative The redemption feature embedded in the MAA Series I preferred stock is reported as a derivative asset and is adjusted to its fair value at each reporting date, with a corresponding non-cash adjustment to the income statement.
Valuation of embedded derivative The redemption feature embedded in the MAA Series I preferred stock is reported as a derivative asset and is adjusted to its fair value at each reporting date, with a corresponding non-cash adjustment to the statement of operations.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion analyzes the financial condition and results of operations of both MAA and the Operating Partnership, of which MAA is the sole general partner and in which MAA owned a 97.4% interest as of December 31, 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion analyzes the financial condition and results of operations of both MAA and the Operating Partnership, of which MAA is the sole general partner and in which MAA owned a 97.4% interest as of December 31, 2024.
The increase in Adjusted EBITDA re was primarily due to an increase in property revenues, partially offset by an increase in property operating expenses, while the increase in net debt was primarily due to an increase in unsecured notes payable and a decrease in cash and cash equivalents.
The decrease in Adjusted EBITDA re was primarily due to an increase in property operating expenses and property management expenses partially offset by an increase in property revenues, while the increase in net debt was primarily due to an increase in unsecured notes payable, partially offset by an increase in cash and cash equivalents.
Trends During the year ended December 31, 2023, revenue growth for our Same Store segment continued to be primarily driven by growth in average effective rent per unit.
Trends During the year ended December 31, 2024, revenue growth for our Same Store segment continued to be primarily driven by growth in average effective rent per unit.
The following discussion describes the primary drivers of the decrease in net income available for MAA common shareholders for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The following discussion describes the primary drivers of the decrease in net income available for MAA common shareholders for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
As of December 31, 2023, there was no outstanding balance under the revolving credit facility, while $4.5 million of capacity was used to support outstanding letters of credit.
As of December 31, 2024, there was no outstanding balance under the revolving credit facility, while $4.5 million of capacity was used to support outstanding letters of credit.
We believe average effective rent per unit is a helpful measurement in evaluating average pricing; however, it does not represent actual rental revenue collected per unit. For the year ended December 31, 2023, average physical occupancy for our Same Store segment was 95.6%, as compared to 95.8% for the year ended December 31, 2022.
We believe average effective rent per unit is a helpful measurement in evaluating average pricing; however, it does not represent actual rental revenue collected per unit. For the year ended December 31, 2024, average physical occupancy for our Same Store segment was 95.5%, as compared to 95.6% for the year ended December 31, 2023.
As an owner and operator of real estate, management considers Adjusted EBITDA re to be an important measure of performance from core operations because Adjusted EBITDA re does not include various income and expense items that are not indicative of operating performance.
As an owner and operator of real estate, management considers Adjusted EBITDA re to be an important measure of performance from core operations because Adjusted EBITDA re excludes various income and expense items that are not indicative of operating performance.
MAALP has established an unsecured commercial paper program, whereby it can issue unsecured commercial paper notes with varying maturities not to exceed 397 days up to a maximum aggregate principal amount outstanding of $625.0 million. As of December 31, 2023, there were $495.0 million of borrowings outstanding under the commercial paper program.
MAALP has established an unsecured commercial paper program, whereby it can issue unsecured commercial paper notes with varying maturities not to exceed 397 days up to a maximum aggregate principal amount outstanding of $625.0 million. As of December 31, 2024, there were $250.0 million of borrowings outstanding under the commercial paper program.
As an owner and operator of real estate, management considers EBITDA re to be an important measure of performance from core operations because EBITDA re does not include various expense items that are not indicative of operating performance.
As an owner and operator of real estate, management considers EBITDA re to be an important measure of performance from core operations because EBITDA re excludes various expense items that are not indicative of operating performance.
Non-GAAP Financial Measures Funds from Operations and Core Funds from Operations Funds from operations, or FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with GAAP) excluding gains or losses on disposition of operating properties and asset impairment, plus depreciation and amortization of real estate assets, net income attributable to noncontrolling interests and adjustments for joint ventures.
Non-GAAP Financial Measures Funds from Operations and Core Funds from Operations Funds from operations, or FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with GAAP) excluding gains or losses on disposition of operating properties and asset impairment and gain on consolidation of third-party development, plus depreciation and amortization of real estate assets, net income attributable to noncontrolling interests and adjustments for joint ventures.
As an owner and operator of real estate, management considers EBITDA to be an important measure of performance from core operations because EBITDA does not include various expense items that are not indicative of operating performance.
As an owner and operator of real estate, management considers EBITDA to be an important measure of performance from core operations because EBITDA excludes various expense items that are not indicative of operating performance.
As of December 31, 2023, we owned and operated 290 apartment communities (which does not include development communities under construction) through the Operating Partnership and its subsidiaries, and had an ownership interest in one apartment community through an unconsolidated real estate joint venture.
As of December 31, 2024, we owned and operated 293 apartment communities (which does not include development communities under construction) through the Operating Partnership and its subsidiaries, and had an ownership interest in one apartment community through an unconsolidated real estate joint venture.
During the year ended December 31, 2023, we acquired two apartment communities. During the year ended December 31, 2022, we acquired two apartment communities, and closed on the pre-purchase of a multifamily development community.
During the year ended December 31, 2024, we acquired three apartment communities and closed on the pre-purchase of a multifamily development community. During the year ended December 31, 2023, we acquired two apartment communities.
The increase in cash outflows from principal payments on notes payable primarily resulted from the retirement of $350.0 million of unsecured senior notes during the year ended December 31, 2023 as compared to the retirement of $125.0 million of unsecured senior notes during the year ended December 31, 2022.
The increase in cash outflows from principal payments on notes payable primarily resulted from the retirement of $400.0 million of unsecured senior notes during the year ended December 31, 2024 as compared to the retirement of $350.0 million of unsecured senior notes during the year ended December 31, 2023.
Net debt should not be considered as an alternative to any GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.
EBITDA should not be considered as an alternative to net income, or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.
In addition, as of December 31, 2023, we had five development communities under construction, and 34 of our apartment communities included retail components. Our apartment communities, including development communities under construction, were located across 16 states and the District of Columbia as of December 31, 2023. We report in two segments, Same Store and Non-Same Store and Other.
In addition, as of December 31, 2024, we had seven development communities under construction, and 35 of our apartment communities included retail components. Our apartment communities, including development communities under construction, were located across 16 states and the District of Columbia as of December 31, 2024. We report in two segments, Same Store and Non-Same Store and Other.
MAA has registered under the Securities Act the 3,143,972 shares of its common stock that, as of December 31, 2023, were issuable upon redemption of OP Units, in order for those shares to be sold freely in the public markets.
MAA has registered under the Securities Act the 3,075,552 shares of its common stock that, as of December 31, 2024, were issuable upon redemption of OP Units, in order for those shares to be sold freely in the public markets.
Also included in our Non-Same Store and Other segment are non-multifamily activities and storm related expenses related to hurricanes. Additional information regarding the composition of our segments is included in Note 13 to the consolidated financial statements included in this Annual Report on Form 10-K.
Also included in our Non-Same Store and Other segment are non-multifamily activities and expenses related to severe weather events, including hurricanes and winter storms. Additional information regarding the composition of our segments is included in Note 13 to the consolidated financial statements included in this Annual Report on Form 10-K.
Key assumptions used in estimating future cash flows and the fair value of an asset include projecting an apartment community’s NOI, estimating asset useful lives, disposition dates and recurring capital expenditures, as well as selecting an appropriate market capitalization rate.
Key assumptions used in estimating future cash flows and the fair value of an asset include projecting an apartment community’s NOI, estimating asset hold periods and recurring capital expenditures, as well as selecting an appropriate market capitalization rate.
The increase in cash outflows for contributions to affiliates was driven by a larger amount of investments made in the technology-focused limited partnerships during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The decrease in cash outflows for contributions to affiliates was driven by a lesser amount of investments made in the technology-focused limited partnerships during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The decrease in cash outflows from the acquisition of noncontrolling interests resulted from the acquisition of a 5% noncontrolling interest of a consolidated real estate entity for $15.8 million during the year ended December 31, 2023 compared to the acquisition of a 20% noncontrolling interest of a consolidated real estate entity for $43.1 million during the year ended December 31, 2022.
The decrease in cash outflows from the acquisition of noncontrolling interests resulted from the acquisition of a 5% noncontrolling interest of a consolidated real estate entity for $15.8 million during the year ended December 31, 2023.
During the year ended December 31, 2023, we experienced inflationary pressures that drove higher operating expenses, primarily in real estate taxes, building repairs and maintenance and personnel expenses. Critical Accounting Estimates A critical accounting estimate is one that is both important to our financial condition and results of operations and that involves some degree of uncertainty.
During the year ended December 31, 2024, we experienced inflationary pressures that drove higher operating expenses, primarily in personnel, real estate taxes, utilities, office operations, insurance and marketing expenses. Critical Accounting Estimates A critical accounting estimate is one that is both important to our financial condition and results of operations and that involves some degree of uncertainty.
The decrease in cash inflows from proceeds from real estate asset dispositions resulted from the disposition of one land parcel during the year ended December 31, 2023 as compared to the disposition of four multifamily communities and two land parcels during the year ended December 31, 2022.
The increase in cash inflows from proceeds from real estate asset dispositions resulted from the disposition of two multifamily communities during the year ended December 31, 2024 as compared to the disposition of one land parcel during the year ended December 31, 2023.
The decrease in cash outflows from the net change in other financing activities was primarily driven by fewer shares of MAA’s common stock surrendered by employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares during the year ended December 31, 2023 as compared to year ended December 31, 2022.
The increase in cash inflows from the net change in other financing activities was primarily driven by fewer shares of MAA’s common stock surrendered by employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares, and more contributions received from noncontrolling interest during the year ended December 31, 2024 as compared to year ended December 31, 2023.
Property operating expenses, excluding depreciation and amortization, for the year ended December 31, 2023 increased by 6.1% as compared to the year ended December 31, 2022, driven by a 6.5% increase in our Same Store segment. The primary drivers of these changes are discussed in the “Results of Operations” section.
Property operating expenses, excluding depreciation and amortization, for the year ended December 31, 2024 increased by 6.8% as compared to the year ended December 31, 2023, driven by a 3.9% increase in our Same Store segment and 71.8% increase in our Non-Same Store and Other segment. The primary drivers of these changes are discussed in the “Results of Operations” section.
We believe demand for apartments is primarily driven by general economic conditions in our markets and is particularly correlated to job growth, population growth, household formation and in-migration over the long term.
We believe demand for apartments is primarily driven by general economic conditions in our markets and is particularly correlated to job growth, population growth, household formation and in-migration over the long term. We continue to monitor pressures surrounding housing supply, inflation trends and general economic conditions.
Overview For the year ended December 31, 2023, net income available for MAA common shareholders was $549.1 million as compared to $633.7 million for the year ended December 31, 2022.
Overview For the year ended December 31, 2024, net income available for MAA common shareholders was $523.9 million as compared to $549.1 million for the year ended December 31, 2023.
The increase in cash outflows from distributions to noncontrolling interests and dividends paid on common shares primarily resulted from the increase in the dividend rate to $5.600 per share during the year ended December 31, 2023 as compared to the dividend rate of $4.675 per share during the year ended December 31, 2022.
The increase in cash outflows from dividends paid on common shares primarily resulted from the increase in the dividend rate to $5.880 per share during the year ended December 31, 2024 as compared to the dividend rate of $5.600 per share during the year ended December 31, 2023.
Results of Operations For the year ended December 31, 2023, we achieved net income available for MAA common shareholders of $549.1 million, a 13.4% decrease as compared to the year ended December 31, 2022, and total revenue growth of $128.6 million, representing a 6.4% increase in property revenues as compared to the year ended December 31, 2022.
Results of Operations For the year ended December 31, 2024, we achieved net income available for MAA common shareholders of $523.9 million, a 4.6% decrease as compared to the year ended December 31, 2023, and total revenue growth of $42.5 million, representing a 2.0% increase in property revenues as compared to the year ended December 31, 2023.
Our Same Store segment represents those apartment communities that have been owned and stabilized for at least 12 months as of the first day of the calendar year.
Our Same Store segment represents those apartment communities that have been owned and stabilized for at least 12 months as of the first day of the calendar year. Communities are considered stabilized when achieving 90% average physical occupancy for 90 days.
We use various significant inputs in the analysis, including trading data available on the preferred shares, estimated coupon yields on preferred stock instruments from REITs with similar credit ratings as MAA and treasury rates to determine the fair value of the bifurcated call option.
We may use various significant inputs in the analysis, including risk adjusted yields of relevant MAALP bond issuances and yields and spreads of relevant indices, estimated yields on preferred stock instruments from REITs with similar credit ratings as us, treasury rates and trading data available of prices of the preferred shares, to determine the fair value of the bifurcated call option.
As of December 31, 2023, we had $791.8 million of combined unrestricted cash and cash equivalents and available capacity under our revolving credit facility. Cash Flows from Operating Activities Net cash provided by operating activities was $1.1 billion for the year ended December 31, 2023, an increase of $78.7 million as compared to the year ended December 31, 2022.
As of December 31, 2024, we had $1.0 billion of combined unrestricted cash and cash equivalents and available capacity under our revolving credit facility. Cash Flows from Operating Activities Net cash provided by operating activities was $1.1 billion for the year ended December 31, 2024, a decrease of $38.9 million as compared to the year ended December 31, 2023.
Other Income and Expenses Property management expenses for the year ended December 31, 2023 were $67.8 million, an increase of $2.3 million as compared to the year ended December 31, 2022. General and administrative expenses for the year ended December 31, 2023 were $58.6 million, a decrease of $0.3 million as compared to the year ended December 31, 2022.
Other Income and Expenses Property management expenses for the year ended December 31, 2024 were $72.0 million, an increase of $4.3 million as compared to the year ended December 31, 2023. General and administrative expenses for the year ended December 31, 2024 were $56.5 million, a decrease of $2.1 million as compared to the year ended December 31, 2023.
For the year ended December 31, 2023, we did not dispose of any apartment communities. For the year ended December 31, 2022, we disposed of four apartment communities, resulting in a gain on sale of depreciable real estate assets of $214.8 million.
For the year ended December 31, 2024, we disposed of two apartment communities, resulting in a gain on sale of depreciable real estate assets of $55.0 million. For the year ended December 31, 2023, we did not dispose of any apartment communities. During the year ended December 31, 2024, we did not dispose of any land parcels.
The change in the ratio was primarily due to an increase of $83.9 million in Adjusted EBITDA re for the year ended December 31, 2023 as compared to the year ended December 31, 2022 and an increase of $131.9 million in comparing net debt as of December 31, 2023 to net debt as of December 31, 2022.
The change in the ratio was primarily due to a decrease of $14.6 million in Adjusted EBITDA re for the year ended December 31, 2024 as compared to the year ended December 31, 2023 and an increase of $439.0 million in comparing net debt as of December 31, 2024 to net debt as of December 31, 2023.
A worsening of the current environment could contribute to uncertain rent collections going forward, suppress demand for apartments and could drive lower rent growth on new leases and renewals than what we achieved in the year ended December 31, 2023. Current elevated supply levels are impacting rent growth performance in certain markets of our portfolio.
A worsening of the current environment could contribute to uncertain rent collections going forward, suppress demand for apartments and could drive lower rent pricing on new leases and renewals than what we achieved in the year ended December 31, 2024.
The increase in property revenues from the Non-Same Store and Other segment for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily the result of increased revenues from completed development communities and acquired communities, partially offset by decreased revenues from disposed communities during the year ended December 31, 2022.
The increase in property operating expenses from the Non-Same Store and Other segment for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily the result of increased expenses from completed development communities and recently acquired communities.
The decrease in cash inflows from net proceeds from insurance recoveries was driven by decreased insurance reimbursements received for storm-related casualty claims during the year ended December 31, 2023 as compared to the year ended December 31, 2022. 36 Cash Flows from Financing Activities Net cash used in financing activities was $367.9 million for the year ended December 31, 2023 as compared to $722.8 million for the year ended December 31, 2022.
The increase in cash inflows from net proceeds from insurance recoveries was driven by increased insurance reimbursements received for property and storm-related casualty claims during the year ended December 31, 2024 as compared to the year ended December 31, 2023. 36 Cash Flows from Financing Activities Net cash used in financing activities was $271.1 million for the year ended December 31, 2024, a decrease of $96.8 million as compared to the year ended December 31, 2023.
Revenues for the year ended December 31, 2023 increased 6.4% as compared to the year ended December 31, 2022, driven by a 6.2% increase in our Same Store segment.
Revenues for the year ended December 31, 2024 increased 2.0% as compared to the year ended December 31, 2023, driven by a 44.7% increase in our Non-Same Store and Other segment.
As a result of the adjustments recorded to reflect the change in fair value of the derivative asset, the fair value of the embedded derivative asset increased to $31.9 million as of December 31, 2023 as compared to $13.4 million as of December 31, 2022, an increase in value of the asset of $18.5 million.
As a result of the adjustments recorded to reflect the change in fair value of the derivative asset, the fair value of the embedded derivative asset decreased to $13.2 million as of December 31, 2024 as compared to $31.9 million as of December 31, 2023, a decrease in value of the asset of $18.7 million.
The Same Store segment generated a 6.2% increase in revenues for the year ended December 31, 2023, primarily the result of average effective rent per unit growth of 7.0% as compared to the year ended December 31, 2022, partially offset by lower average physical occupancy.
The Same Store segment generated a 0.5% increase in revenues for the year ended December 31, 2024, primarily the result of average effective rent per unit growth of 0.3% as compared to the year ended December 31, 2023.
Interest is payable semi-annually in arrears on March 15 and September 15 of each year, commencing September 15, 2024. The proceeds from the sale of the notes were used to repay borrowings on the commercial paper program. The notes have an effective interest rate of 5.123%. Secured Property Mortgages MAALP maintains secured property mortgages with various life insurance companies.
Interest is payable semi-annually in arrears on February 15 and August 15 of each year, commencing August 15, 2024. The proceeds from the sale of the notes were used to repay borrowings on the commercial paper program. The notes have an effective interest rate of 5.382%.
A discussion of the results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021 is found in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 14, 2023, which is available free of charge on the SEC’s website at https://www.sec.gov and on our website at https://www.maac.com, on the “For Investors” page under “Filings and Financials—Annual Reports.” Property Revenues The following table reflects our property revenues by segment for the years ended December 31, 2023 and 2022 (dollars in thousands): December 31, 2023 December 31, 2022 Increase % Increase Same Store $ 2,024,751 $ 1,907,003 $ 117,748 6.2 % Non-Same Store and Other 123,717 112,863 10,854 9.6 % Total $ 2,148,468 $ 2,019,866 $ 128,602 6.4 % The increase in rental revenues for our Same Store segment for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was the primary driver of total property revenue growth.
A discussion of the results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is found in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 9, 2024, which is available free of charge on the SEC’s website at https://www.sec.gov and on our website at https://www.maac.com, on the “For Investors” page under “Filings and Financials—Annual Reports.” Property Revenues The following table reflects our property revenues by segment for the years ended December 31, 2024 and 2023 (dollars in thousands): December 31, 2024 December 31, 2023 Increase % Increase Same Store $ 2,084,836 $ 2,075,096 $ 9,740 0.5 % Non-Same Store and Other 106,179 73,372 32,807 44.7 % Total $ 2,191,015 $ 2,148,468 $ 42,547 2.0 % The increase in property revenues for our Non-Same Store and Other segment for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was the primary driver of total property revenue growth.
The following table presents a reconciliation of net income available for MAA common shareholders to FFO and Core FFO for the years ended December 31, 2023 and 2022, as we believe net income available for MAA common shareholders is the most directly comparable GAAP measure (dollars in thousands): Year ended December 31, 2023 2022 Net income available for MAA common shareholders $ 549,118 $ 633,748 Depreciation and amortization of real estate assets 558,969 535,835 Loss (gain) on sale of depreciable real estate assets 62 (214,762 ) MAA’s share of depreciation and amortization of real estate assets of real estate joint venture 615 621 Net income attributable to noncontrolling interests 15,025 17,340 FFO attributable to common shareholders and unitholders 1,123,789 972,782 (Gain) loss on embedded derivative in preferred shares (1) (18,528 ) 21,107 Gain on sale of non-depreciable real estate assets (54 ) (809 ) (Gain) loss on investments, net of tax (1)(2) (3,531 ) 35,822 Casualty related charges (recoveries), net (1)(3) 980 (29,930 ) (Gain) loss on debt extinguishment (1) (57 ) 47 Legal (recoveries), costs and settlements, net (1) (4,454 ) 8,535 COVID-19 related costs (1) — 575 Mark-to-market debt adjustment (4) (25 ) 77 Core FFO attributable to common shareholders and unitholders $ 1,098,120 $ 1,008,206 (1) Included in “Other non-operating (income) expense” in the Consolidated Statements of Operations.
The following table presents a reconciliation of net income available for MAA common shareholders to FFO and Core FFO for the years ended December 31, 2024 and 2023, as we believe net income available for MAA common shareholders is the most directly comparable GAAP measure (dollars in thousands): Year ended December 31, 2024 2023 Net income available for MAA common shareholders $ 523,855 $ 549,118 Depreciation and amortization of real estate assets 579,927 558,969 (Gain) loss on sale of depreciable real estate assets (55,003 ) 62 MAA’s share of depreciation and amortization of real estate assets of real estate joint venture 628 615 Gain on consolidation of third-party development (1) (11,239 ) — Net income attributable to noncontrolling interests 14,033 15,025 FFO attributable to common shareholders and unitholders 1,052,201 1,123,789 Loss (gain) on embedded derivative in preferred shares (1) 18,751 (18,528 ) Gain on sale of non-depreciable real estate assets — (54 ) Gain on investments, net of tax (1) (6,078 ) (3,531 ) Casualty related (recoveries) charges, net (1)(2) (9,326 ) 980 Gain on debt extinguishment (1) — (57 ) Legal costs, settlements and (recoveries), net (1)(3) 9,437 (4,454 ) Mark-to-market debt adjustment (4) — (25 ) Core FFO attributable to common shareholders and unitholders $ 1,064,985 $ 1,098,120 (1) Included in “Other non-operating (income) expense” in the Consolidated Statements of Operations.
Under the terms of the program, MAALP may issue up to a maximum aggregate amount outstanding at any time of $625.0 million. For the three months ended December 31, 2023, there were $495.0 million of borrowings under the commercial paper program. For the year ended December 31, 2023, average daily borrowings outstanding under the commercial paper program were $95.1 million.
Under the terms of the program, MAALP may issue up to a maximum aggregate amount outstanding at any time of $625.0 million. For the year ended December 31, 2024, average daily borrowings outstanding under the commercial paper program were $336.3 million. (2) There were no borrowings outstanding under MAALP’s $1.25 billion unsecured revolving credit facility as of December 31, 2024.
The increase in cash outflows for capital improvements and other was primarily driven by increased capital spend relating to our revenue enhancing capital expenditures and recurring capital replacements, partially offset by decreased property redevelopment and repositioning activities and decreased reconstruction-related capital expenditures relating to winter storms during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The decrease in cash outflows for capital improvements and other was primarily driven by decreased capital spend relating to our property redevelopment and repositioning activities during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
During the year ended December 31, 2023, we acquired two multifamily apartment communities for approximately $210 million, acquired two land parcels for future development for approximately $13 million, and purchased the noncontrolling interest of a consolidated real estate entity for approximately $16 million. These activities were funded from borrowings under the commercial paper program and available cash on hand.
During the year ended December 31, 2024, we acquired three multifamily apartment communities for approximately $271 million and acquired three land parcels for future development for approximately $30 million. These activities were funded from borrowings under the commercial paper program and available cash on hand.
While our calculation of FFO is in accordance with the National Association of Real Estate Investment Trusts’, or NAREIT’s, definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to such other REITs. 33 Core FFO represents FFO as adjusted for items that are not considered part of our core business operations, such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments, net of tax; casualty related charges (recoveries), net; gain or loss on debt extinguishment; legal (recoveries), costs and settlements, net; COVID-19 related costs and mark-to-market debt adjustments.
Core FFO represents FFO as adjusted for items that are not considered part of our core business operations, such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments, net of tax; casualty related charges (recoveries), net; gain or loss on debt extinguishment; legal costs, settlements and (recoveries), net; and mark-to-market debt adjustments.
FFO should not be considered as an alternative to net income available for MAA common shareholders or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.
Because net income attributable to noncontrolling interests is added back, FFO, when used in this Annual Report on Form 10-K, represents FFO attributable to common shareholders and unitholders. 32 FFO should not be considered as an alternative to net income available for MAA common shareholders or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.
Acquisition of real estate assets We account for our acquisitions of investments in real estate as asset acquisitions in accordance with Accounting Standards Codification Topic 805, Business Combinations, which requires the cost of the real estate acquired to be allocated to the individual acquired tangible assets, consisting of land, buildings and improvements and other, and identified intangible assets, consisting of the value of in-place leases and other contracts, on a relative fair value basis.
We believe that the estimates and assumptions summarized below are most important to the portrayal of our financial condition and results of operations because they involve a significant level of estimation uncertainty and they have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. 40 Acquisition of real estate assets We account for our acquisitions of investments in real estate as asset acquisitions in accordance with Accounting Standards Codification Topic 805, Business Combinations, which requires the cost of the real estate acquired to be allocated to the individual acquired tangible assets, consisting of land, buildings and improvements and other, and identified intangible assets, consisting of the value of in-place leases and other contracts, on a relative fair value basis.
The primary drivers of the change were as follows (dollars in thousands): Primary drivers of cash inflow (outflow) during the year ended December 31, Increase (Decrease) 2023 2022 in Net Cash Net change in commercial paper $ 475,000 $ 20,000 $ 455,000 Principal payments on notes payable (353,861 ) (126,401 ) (227,460 ) Payment of deferred financing costs (2 ) (5,516 ) 5,514 Distributions to noncontrolling interests (17,671 ) (14,927 ) (2,744 ) Dividends paid on common shares (651,717 ) (539,605 ) (112,112 ) Proceeds from issuances of common shares 205,070 1,083 203,987 Acquisition of noncontrolling interests (15,757 ) (43,070 ) 27,313 Net change in other financing activities (5,279 ) (10,646 ) 5,367 The increase in cash inflows related to the net change in commercial paper resulted from the increase in net borrowings of $475.0 million on our commercial paper program during the year ended December 31, 2023 as compared to the increase in net borrowings of $20.0 million on our commercial paper program during the year ended December 31, 2022.
The primary drivers of the change were as follows (dollars in thousands): Primary drivers of cash (outflow) inflow during the year ended December 31, (Decrease) Increase 2024 2023 in Net Cash Net change in commercial paper $ (245,000 ) $ 475,000 $ (720,000 ) Proceeds from notes payable 1,091,646 — 1,091,646 Principal payments on notes payable (400,000 ) (353,861 ) (46,139 ) Payment of deferred financing costs (10,317 ) (2 ) (10,315 ) Dividends paid on common shares (686,900 ) (651,717 ) (35,183 ) Proceeds from issuances of common shares 1,230 205,070 (203,840 ) Acquisition of noncontrolling interests — (15,757 ) 15,757 Net change in other financing activities 166 (5,279 ) 5,445 The increase in cash outflows related to the net change in commercial paper resulted from the decrease in net borrowings of $245.0 million under our commercial paper program during the year ended December 31, 2024 as compared to the increase in net borrowings of $475.0 million under our commercial paper program during the year ended December 31, 2023.
The increase in operating cash flows was primarily driven by our operating performance. Cash Flows from Investing Activities Net cash used in investing activities was $775.3 million for the year ended December 31, 2023 as compared to $405.2 million for the year ended December 31, 2022.
The decrease in operating cash flows was primarily driven by an increase in property operating expenses. 35 Cash Flows from Investing Activities Net cash used in investing activities was $825.5 million for the year ended December 31, 2024, an increase of $50.2 million as compared to the year ended December 31, 2023.
Liquidity and Capital Resources Overview Our cash flows from operating, investing and financing activities, as well as general economic and market conditions, are the principal factors affecting our liquidity and capital resources.
The increase in unsecured notes payable was primarily driven by an increase in cash requirements to fund acquisition and development activities. Liquidity and Capital Resources Overview Our cash flows from operating, investing and financing activities, as well as general economic and market conditions, are the principal factors affecting our liquidity and capital resources.
During the years ended December 31, 2023 and 2022, MAA did not sell any shares of common stock under its ATM program. As of December 31, 2023, there were 4.0 million shares remaining under the ATM program.
MAA has no obligation to issue shares through the ATM program. During the years ended December 31, 2024 and 2023, MAA did not sell any shares of common stock under the ATM program. As of December 31, 2024, 4.0 million shares of MAA’s common stock remained issuable under the ATM program.
The following schedule reflects the maturities and average effective interest rates of our outstanding fixed rate debt, net of debt issuance costs, discounts, premiums and fair market value adjustments, as of December 31, 2023 (dollars in thousands): Fixed Rate Debt Average Effective Rate 2024 $ 399,659 4.0 % 2025 398,547 4.2 % 2026 297,973 1.2 % 2027 597,334 3.7 % 2028 397,303 4.2 % 2029 557,747 3.7 % 2030 297,887 3.1 % 2031 445,645 1.8 % 2032 — — 2033 — — Thereafter 653,130 3.8 % Total $ 4,045,225 3.4 % Unsecured Revolving Credit Facility & Commercial Paper MAALP has entered into an unsecured revolving credit facility with a borrowing capacity of $1.25 billion and an option to expand to $2.0 billion.
The following schedule reflects the maturities and average effective interest rates of our outstanding fixed rate debt, net of debt issuance costs, discounts and premiums, as of December 31, 2024 (dollars in thousands): Fixed Rate Debt Average Effective Rate 2025 $ 399,340 4.2 % 2026 298,744 1.2 % 2027 598,121 3.7 % 2028 397,911 4.2 % 2029 556,359 3.7 % 2030 298,230 3.1 % 2031 446,302 1.8 % 2032 394,680 5.4 % 2033 — — 2034 343,795 5.1 % Thereafter 997,475 4.2 % Total $ 4,730,957 3.8 % Unsecured Revolving Credit Facility & Commercial Paper MAALP has entered into an unsecured revolving credit facility with a borrowing capacity of $1.25 billion and an option to expand to $2.0 billion.
Results for the year ended December 31, 2022 included $215.6 million of gain related to the sale of real estate assets and $29.9 million in net casualty gain primarily due to winter storm Uri, partially offset by $35.8 million of non-cash loss, net of tax, from investments and $21.1 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares.
Results for the year ended December 31, 2024 included $55.0 million of gain related to the sale of depreciable real estate assets, $11.2 million of gain on the consolidation of a third-party development, $9.3 million in net casualty gain and $6.1 million of non-cash gain, net of tax, from investments, partially offset by $18.8 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares and $9.4 million of legal costs and settlements.
During the year ended December 31, 2023, we disposed of one land parcel, resulting in the recognition of a negligible gain on sale of non-depreciable real estate assets. During the year ended December 31, 2022, we disposed of two land parcels resulting in a gain on sale of non-depreciable real estate assets of $0.8 million.
During the year ended December 31, 2023, we disposed of one land parcel, resulting in the recognition of a negligible gain on sale of non-depreciable real estate assets. Other non-operating (income) expense for the year ended December 31, 2024 was $1.7 million of income, as compared to $31.2 million of income for the year ended December 31, 2023.
Significant Accounting Policies For more information regarding our significant accounting policies, including the accounting polices related to the critical accounting estimates discussed above as well as a brief description of recent accounting pronouncements that could have a material impact on our financial statements, see Note 1 to the consolidated financial statements included in this Annual Report on Form 10-K. 41
For example, changes in the inputs of the MAALP bond yields, estimated yields on preferred stock instruments from REITs with similar credit ratings as MAA and treasury rates could cause the valuation of the embedded derivative to materially change from the recorded balance as of December 31, 2024. 41 Significant Accounting Policies For more information regarding our significant accounting policies, including the accounting polices related to the critical accounting estimates discussed above as well as a brief description of recent accounting pronouncements that could have a material impact on our financial statements, see Note 1 to the consolidated financial statements included in this Annual Report on Form 10-K.
In October 2023, MAALP retired $350.0 million of publicly issued unsecured senior notes at maturity using available cash on hand and borrowings under the commercial paper program. 38 In January 2024, MAALP publicly issued $350.0 million in aggregate principal amount of unsecured senior notes due March 2034 with a coupon rate of 5.000% per annum and at an issue price of 99.019%.
Unsecured Senior Notes As of December 31, 2024, MAALP had $4.4 billion of publicly issued unsecured senior notes outstanding. In January 2024, MAALP publicly issued $350.0 million in aggregate principal amount of unsecured senior notes due March 2034 with a coupon rate of 5.000% per annum and at an issue price of 99.019%.
The decrease in cash outflows related to payment of deferred financing costs resulted from negligible deferred financing costs during the year ended December 31, 2023 as compared to the closing costs of $5.5 million during the year ended December 31, 2022 related to the amendment of our unsecured revolving credit facility.
The increase in cash outflows related to payment of deferred financing costs resulted from the closing costs of $10.3 million related to the issuance of $1.1 billion of unsecured senior notes during the year ended December 31, 2024 as compared to negligible deferred financing costs during the year ended December 31, 2023.
Average physical occupancy is a measurement of the total number of our apartment units that are occupied by residents, and it represents the average of the daily physical occupancy for the period.
Average physical occupancy is a measurement of the total number of our apartment units that are occupied by residents, and it represents the average of the daily physical occupancy for the period. As of December 31, 2024, resident turnover for our Same Store segment was 42.0% as compared to 44.9% as of December 31, 2023.
The expense for the year ended December 31, 2022 was driven by $45.4 million of non-cash loss from investments and $21.1 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, partially offset by $29.9 million in net casualty gain primarily due to winter storm Uri.
The income for the year ended December 31, 2024 was primarily driven by $11.2 million of gain on the consolidation of a third-party development, $9.3 million of net casualty related recoveries, $7.8 million of non-cash gain from investments and miscellaneous income of $1.0 million, partially offset by $18.8 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares and $9.4 million of legal costs and settlements.
The average effective rent per unit for our Same Store segment continued to increase from the prior year, up 7.0% for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The average effective rent per unit for our Same Store segment increased to an average effective rent per unit of $1,688 for the year ended December 31, 2024 compared to $1,684 for the year ended December 31, 2023. This represents an increase of 0.3% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The following table reflects our property operating expenses by segment for the years ended December 31, 2023 and 2022 (dollars in thousands): December 31, 2023 December 31, 2022 Increase % Increase Same Store $ 717,812 $ 674,110 $ 43,702 6.5 % Non-Same Store and Other 50,329 49,584 745 1.5 % Total $ 768,141 $ 723,694 $ 44,447 6.1 % The increase in property operating expenses for our Same Store segment for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily driven by increases in real estate tax expense of $13.6 million, building repairs and maintenance of $8.4 million, personnel expense of $7.9 million, utilities expense of $6.1 million, insurance expense of $3.8 million and office operations expense of $2.5 million. 32 Depreciation and Amortization Depreciation and amortization expense for the year ended December 31, 2023 was $565.1 million, an increase of $22.1 million as compared to the year ended December 31, 2022.
The following table reflects our property operating expenses by segment for the years ended December 31, 2024 and 2023 (dollars in thousands): December 31, 2024 December 31, 2023 Increase % Increase Same Store $ 763,659 $ 735,286 $ 28,373 3.9 % Non-Same Store and Other 56,433 32,855 23,578 71.8 % Total $ 820,092 $ 768,141 $ 51,951 6.8 % The increase in property operating expenses for our Same Store segment for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by increases in personnel expense of $7.6 million, real estate tax expense of $5.3 million, utilities expense of $4.6 million, office operations expense of $4.6 million, insurance expense of $2.4 million, and marketing expense of $2.3 million.
We expect to pay quarterly dividends at an annual rate of $5.88 per share of MAA common stock during the year ending December 31, 2024.
We typically declare cash dividends on MAA’s common stock on a quarterly basis, subject to approval by MAA’s Board of Directors. We expect to pay quarterly dividends at an annual rate of $6.06 per share of MAA common stock during the year ending December 31, 2025.
The primary drivers of the change were as follows (dollars in thousands): Primary drivers of cash (outflow) inflow during the year ended December 31, Increase (Decrease) 2023 2022 in Net Cash Purchases of real estate and other assets $ (223,453 ) $ (271,428 ) $ 47,975 Capital improvements and other (341,224 ) (296,176 ) (45,048 ) Development costs (198,152 ) (172,124 ) (26,028 ) Contributions to affiliates (16,636 ) (13,849 ) (2,787 ) Proceeds from real estate asset dispositions 2,946 320,491 (317,545 ) Net proceeds from insurance recoveries 945 27,312 (26,367 ) The decrease in cash outflows for purchases of real estate and other assets was driven by the nature of the real estate assets acquired during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The primary drivers of the change were as follows (dollars in thousands): Primary drivers of cash (outflow) inflow during the year ended December 31, (Decrease) Increase 2024 2023 in Net Cash Purchases of real estate and other assets $ (301,071 ) $ (223,453 ) $ (77,618 ) Capital improvements and other (322,372 ) (341,224 ) 18,852 Development costs (313,888 ) (198,152 ) (115,736 ) Contributions to affiliates (2,874 ) (16,636 ) 13,762 Proceeds from real estate asset dispositions 84,209 2,946 81,263 Proceeds from sale of markable equity securities 9,975 — 9,975 Net proceeds from insurance recoveries 20,195 945 19,250 The increase in cash outflows for purchases of real estate and other assets was primarily driven by the number of the real estate assets acquired during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
As of December 31, 2023, MAALP had $363.3 million of secured property mortgages outstanding. In July 2023, MAALP retired $3.0 million remaining on a mortgage associated with an apartment community prior to its June 2025 maturity. For more information regarding our debt capital resources, see Note 5 to the consolidated financial statements included in this Annual Report on Form 10-K.
Secured Property Mortgages MAALP maintains secured property mortgages with various life insurance companies. As of December 31, 2024, MAALP had $363.3 million of secured property mortgages outstanding. In July 2023, MAALP retired $3.0 million remaining on a mortgage associated with an apartment community prior to its June 2025 maturity.
Under its ATM program, MAA has the authority to issue up to an aggregate of 4.0 million shares of its common stock, at such times to be determined by MAA. MAA has no obligation to issue shares through the ATM program.
Pursuant to the ATM program, MAA from time to time may also enter into forward sale agreements and sell shares of its common stock pursuant to these agreements. Through the ATM program, MAA may issue up to an aggregate of 4.0 million shares of its common stock at such times as determined by MAA.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe use our best efforts to have our debt instruments mature across multiple years, which we believe limits our exposure to interest rate changes in any one year. We do not enter into derivative instruments for trading or other speculative purposes. As of December 31, 2023, 89.1% of our outstanding debt was subject to fixed rates.
Biggest changeWe use our best efforts to have our debt instruments mature across multiple years, which we believe limits our exposure to interest rate changes in any one year. We do not enter into derivative instruments for trading or other speculative purposes. As of December 31, 2024, 95.0% of our outstanding debt was subject to fixed rates.
As of December 31, 2023, 22.0% of our total market capitalization consisted of debt borrowings. Our interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs.
As of December 31, 2024, 21.2% of our total market capitalization consisted of debt borrowings. Our interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs.

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