Mid-America Apartment Communities Inc. (MAA), an apartment-only real estate investment trust (REIT), has recently completed the acquisition of Birchall at Ross Bridge – a 240-unit upscale apartment community in Alabama, for an undisclosed amount. The transaction was funded with the proceeds from its at-the-market stock issuance program and availability in the credit facility of the company.
The property is located in the premium sub-market of Hoover, Alabama in the Birmingham metropolitan statistical area, which is home to one of the highest-ranked public school systems in the region and several Fortune 500 companies. In addition, the property provides easy access to major transportation facilities and the convenience of shopping and dining through outlets of leading retailers within its proximity.
Besides its strategic location, the apartment offers a mix of 1-, 2-, and 3-bedroom floor plans with an average unit size of 1,182 square feet. Each unit offers luxury amenities including stainless steel appliances and granite counter tops, while the community features a resort-style pool, secluded trails and various resident centers.
Since its inception in 1994, Mid-America has evolved as a publicly-owned company from a portfolio of 6,000 apartments in the Mid-South area to a portfolio of 48,426 high-quality apartment homes spread across the Sunbelt region of the U.S.
The company divides its portfolio in two tiers – larger primary markets and lower population secondary markets. Secondary markets often have stable fundamentals due to limited new supply. Having a diversified presence in different types of markets helps mitigate risk and decreases volatility in the event of a slowdown in any one product type.
Mid-America’s diversified market profile with its focus on solid employment markets of the Sunbelt region across both the high-growth primary markets and the less cyclical secondary markets provides a stable earnings platform for the company.
Furthermore, the company is witnessing a decrease in move-outs due to home purchases, which is a good sign as the battered housing market will continue to benefit residential REITs like Mid-America.
We presently have a Neutral recommendation on Mid-America. We also have a Neutral recommendation for UDR, Inc. (UDR), one of the competitors of Mid-America.
MID-AMER APT CM (MAA): Free Stock Analysis Report
UDR INC (UDR): Free Stock Analysis Report
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