Sunbelt Multifamily Market Showing “Definite Recovery Trend,” MAA CEO Says
Jun. 2 2021
Eric Bolton, chairman and CEO of MAA (NYSE: MAA), participated in a video interview in conjunction with Nareit’s REITweek: 2021 Investor Conference.
Bolton noted that rent growth trends are “very encouraging,” with blended pricing up 2.7% in the first quarter from a year ago. Rent growth in April for new move-in customers was up 4%, while renewing leases were up 6.5%. “We’ve seen a very definite recovery trend taking place,” he said. “We would expect trends to remain quite strong.”
Acquisitions, meanwhile, have been “very challenging” for the last two or three years, Bolton said. As a consequence, MAA has redirected a lot of its external growth towards new development. The company has seven projects currently underway and another two completed, accounting for almost $600 million of new development, including pre-development work underway at sites MAA already owns. Bolton said he expects the development pipeline to jump to about $800 million by early next year.
Turning to the pricing of assets between Sunbelt and Gateway markets, Bolton said the spread has clearly compressed, with the first quarter showing the tightest spread since 2010. Sunbelt markets will continue to attract strong demand, which will fuel rent growth that will drive very competitive net operating income (NOI) performance, he added.