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Why Property Acquisitions and Dispositions Are Important to MAA

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Property acquisitions

The focus on the acquisition and disposition of properties helps MAA (MAA) achieve the required product mix and geographic diversification, and rebalances its property portfolio. The company’s growth strategy is geared towards the acquisition of apartment communities located in large or secondary markets, primarily in the southeastern and southwestern United States.

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Numerous acquisitions

The company acquired 11,483 apartment units during the last five years. In 2014, the company acquired eight properties comprising 2,698 apartment units. Five of these properties are in Texas, which has shown moderation in growth over the past few quarters. MAA is expected to continue its property acquisition strategy to increase its number of apartment communities in growing markets.

Other major apartment REITs such as Equity Residential (EQR), UDR (UDR), and AvalonBay Communities (AVB) are also active in property acquisition and disposition. The iShares US Real Estate ETF (IYR) invests 0.78% of its portfolio in MAA.

Property dispositions

MAA sells apartment communities and other assets that don’t meet its long-term growth strategy. The company redeploys the proceeds of these sales to develop, redevelop, and acquire additional apartment communities, and to rebalance its property portfolio across geographic regions.

Disposition allows the company to realize property values and provides additional liquidity to the company. MAA has disposed of 7,959 apartment units during the past five years. In 2014, the company disposed of eight multifamily properties totaling 3,063 units and two commercial properties totaling 606,000 square feet. The company plans to continue selective dispositions as market conditions warrant and opportunities arise. In the next article, we’ll discuss MAA’s occupancy level and average rent.

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