Yahoo Finance

Thank you, Eric. And good morning, everyone.
As expected during the fourth quarter, our focus on occupancy combined with higher new supply and the typical seasonal slowdown in leasing traffic weighed on new resident lease pricing during the quarter, but the seasonal decline in lease over lease rates was less than we've seen in previous years. Encouragingly, this pressure has continued to moderate in January with blended pricing improving more from the fourth quarter's performance than in previous years, predominantly due to improvement in our new lease pricing. I share Eric's optimism for our growth prospects and momentum toward delivering strong long-term earnings.
As Tim will discuss in more detail, we are seeing encouraging signs that indicate leasing conditions are poised to support improvement in blended lease rates and have a compounding impact on revenue performance throughout the year. Continued strong absorption, occupancy and exposure, improved seasonal performance, and an expected more meaningful reduction in supply pressure all contribute to a favorable outlook for our existing portfolio. Additionally, we're continuing to invest in several key areas that will significantly impact future earnings, including various technology initiatives that will support our centralization efforts and our enhance efficiencies.
In 2025, we will begin to more aggressively roll out property-wide Wi Fi across our portfolio. And we will ramp up the rollout over the next couple of years as a number of our properties transition off of our legacy bulk Wi Fi program.
We also plan to increase our investments in the interior renovation and repositioning programs, both of which benefit from the higher priced new supply that has delivered into the market recently. On the external growth front, we're committed to maintaining an active development pipeline of around a billion dollars.
In 2024, we invested in a record 5 projects expected to deliver average NOI yields at stabilization of 6.3%. Ending the year with 7 projects under construction, representing over 2,300 units at a cost of approximately $850 million. We expect to start construction on another 3 to 4 projects in 2025. As the transaction market begins to open later this year, we'll continue to opportunistically deploy capital and acquisitions that are in their initial lease.
During the fourth quarter, we closed on a 386 unit property early in its initial lease up in the Dallas market. This property was 44% occupied at the end of the fourth quarters and is expected to stabilize in early 2026. This brings our total acquisitions in 2024 to 3 properties which were on average 65% occupied at closing and projected to deliver NOI yields of 5.9% upon reaching stabilization in 2025 and 2026.
During the fourth quarter, we sold two properties with an average age of 29 years, 216 unit property in Charlotte, North Carolina. In the 272 unit property in Richmond, Virginia, delivering a combined investment period IRR of approximately 19%. We have two additional properties in Columbia, South Carolina under contract and expect those to close in the first quarter of 2025.
We will continue our focus on strengthening our overall earnings quality by recycling capital out of some of our older higher CapEx properties and redeploying that capital into newer acquisitions with a higher earnings growth profile, particularly on an after CapEx basis. We expect to execute on the balance of our $325 million disposition plan late in the year.
At the end of the fourth quarter, we had 8 communities in Lisa, 4 acquisitions and 4 developments with an end of the year occupancy of 69.7%. We expect the acquisitions to average NOI yields at stabilization of 5.9% and the developments to average NOI yields around 6.4%.
Due to the high level of competition in many of our markets and our intent to hold firm on our rent pricing expectations, we pushed the expected stabilization dates back slightly on a few of our lease of properties by one quarter. However, rents continue to exceed our pro forma expectations and the stabilized NOI yields on our new developments in lease up are significantly above our original expectations.
Our existing portfolio is well positioned to benefit from the improving demand and supply trends with our various growth initiatives providing additional earnings over the recovery cycle. To all of our associates at the properties and our corporate and regional offices, thank you for your commitment, hard work, and dedication that you show every day to our prospects, residents, and fellow associates.
Before turning the call over to Tim, I do want to take a moment to say a few words in recognition of Eric ahead of his transition to the Executive Chairman role. Over his 30 years of service to MAA with 23 years as our Chief Executive Officer, Eric has been instrumental in so many ways to this company. His dedication to serving our various stakeholders is second to none.
We are grateful for his vision and wisdom, his courage, and his discipline in leading this company to unmatched performance. His mentorship and counsel over the years to so many in the industry and especially to MAA's executive leadership team and to me exemplify the tremendous leader that he is. Eric, for all you've given to our company and to the industry, we thank you.
With that, I'll turn the call over to Tim.

Tim Argo

Thanks, Brad. And good morning, everyone.
As notified Brad, in the fourth quarter, we prioritize achieving portfolio level occupancy that positions us well for the improving supply and demand dynamic in 2025. We particularly focused on the higher exposure markets, which came at the expense of slightly weaker new lease pricing performance, but achieved the occupancy goals for which we were striving.
The moderation of new lease pricing showed less seasonal deceleration than we saw in 2023 and less than we typically see from the third to fourth quarter. As a result of this strategy, new lease pricing on a lease over lease basis for the fourth quarter was down 8%. A 260 basis point decline from the third quarter, but favorably comparable to a 470 basis point decline over the same period in 2023.
Renewal rates for the quarter stayed strong, growing 4.2% on a lease over lease basis, which was a 10 basis point increase sequentially over the third quarter. The resulting lease over lease pricing on a blended basis was down 2%, which represented a 140 basis point improvement in sequential moderation as compared to the same period in 2023.
Average physical occupancy was 95.6% of 10 basis points from the third quarter. And collections continue to outperform expectations with net delinquency representing just 0.3% of build rents. All these factors drive the resulting same store revenue down 0.2% for the quarter and up 0.5% for the full year of 2024.
As was true for most of 2024, several of our mid-tier markets continued to hold up better than the broader portfolio in the fourth quarter from a blended lease of release pricing standpoint. Richmond, Norfolk, Charleston, Greenville, and our Fredericksburg and other Northern Virginia properties all stood out. Tampa and Orlando are two larger markets that started to show some relative pricing recovery. Also, as was true for most of 2024, Austin, Atlanta, and Jacksonville are markets that continue to be more negatively impacted by the absolute level of supply being delivered into those markets with Austin continuing to be the toughest challenge of all the markets.
We continued our various redevelopment and repositioning initiatives in the fourth quarter. And as Brad mentioned earlier, we expect to accelerate these programs over the course of 2025, it ends in 2026.
For the fourth quarter of 2024, we completed 1,130 interior unit upgrades, bringing our year-to-date total to 5,665 units, achieving rent increases of $106 above non-upgraded units. Despite this more competitive supply environment, these units lease about 10 days quicker on average than a non-renovated unit when adjusted for the additional turn time. We expect to renovate closer to 6,000 units in 2025 with an even larger increase expected in 2026.
For our repositioning program, we have 2 active projects that they're most of the way through the repricing phase with NOI yields of approaching 10%. We have an additional 6 projects underway with a plan to complete construction between April and June, and begin repricing in what we believe will be a strengthening leasing environment. We're also now live on the four property-wide Wifi retrofit projects we began in 2024 and expect to begin an additional 23 projects in 2025.
With January wrapped up, we're seeing encouraging trends that are aligned with our outlook for 2025. New lease and blended pricing in January improved as compared to both December and the full fourth quarter with stable occupancy of 95.6%. Our 60-day exposure at the end of January was 7% -- 70 basis points lower than this time last year, and should serve to keep occupancy stable through the remainder of the quarter and allow for more pricing power if seasonal demand starts to increase. The 95.6% January average daily physical occupancy was 25 basis points higher than January of 2024.
As Brad noted, absorption remains strong in our markets, with the fourth quarter representing the second consecutive quarter that units absorbed exceeded units delivered. The excess absorption is compared to new supply in the 4th quarter with the largest GAAP since the third quarter of 2021.
With new lease pricing improving, the remaining a challenge, we're also encouraged by the lease over lease rates achieved on excessive renewals through April with the average increases in the 4.25% range. Improving new lease rates should help support continued strong renewal performance into the busier spring and summer leasing season.
New supply deliveries continue to be a headwind in many of our markets, but the trends support expected improvement throughout 2025, laying the groundwork for an even stronger 2026. Following on Eric's comments, with construction starts peaking in mid to late 2022 in most of our markets, we believe we have passed the maximum pricing pressure period that tends to come two years or so after the peak of construction. So slowly moderating supply pressure, increasing spring and summer releasing traffic and our current occupancy exposure portfolio position have us excited about the recovery to come.
That's all I have for prepared comments, and will now turn the call over to Clay.

Clay Holder

Thank you, Tim. And good morning, everyone.
We reported core FFO for the quarter of $2.23 per share, which was in line with our fourth-quarter guidance and contributed a core FFO for the full year of $8.88 per share, in line with our original guidance for the year.
Our same store revenue results for the quarter were relatively in line with expectations. As Tim mentioned, same store revenues benefited from strong occupancy and collections during the quarter. Our same store expense performance was slightly unfavorable compared to our guidance due to personnel costs and other property expenses. Favorable interest expense and non-operating income offset the increase in same store expenses.
During the quarter, we funded approximately $64 million to develop the cost of the current $852 million dollar pipeline, leaving an expected $374 million to be funded on our current pipeline over the next 2 to 3 years. We also invested approximately $18 million of capital through our redevelopment and repositioning programs during the quarter, which we expect to continue to enhance the quality of our portfolio and produce solid returns upon completion.
Our balance sheet remains in great shape. We ended the quarter with over $1 billion in combined cash and borrowing capacity under our revolving credit facility, providing significant opportunity to fund future investments. Our leverage remains low, with net debt to EBITDA at 4 times. And at quarter end, our outstanding debt was approximately 95% fixed with an average maturity of 7.3 years at an effective rate of 3.8%.
During December, we issued $350 million of 10-year public bonds at an effective rate of just over 5% using proceeds to pay down our outstanding commercial paper. These proceeds provide an accreted use of capital given the expected stabilized NOI yields approaching 6% or greater on our recent acquisitions and current developments that Brad previously mentioned.
Finally, we provided initial earnings guidance for 2025 with our release, which is detailed in the supplemental information package.
Core FFO for 2025 is projected to be at $8.61 to $8.93 or $8.77 at the midpoint. As has been outlined in the prior comments, we expect the momentum and rental pricing to grow over the course of the year and to drive improving year-over-year performance and core FFO over the back half of the year.
The proposed 2025 same store revenue growth midpoint of 0.4% results from a rental pricing earning of negative 0.4% combined with a blended rental pricing expectation of 1.7% for the year. We expect blended rental pricing to be comprised of new lease pricing that will continue to be impacted by elevated supply levels and renewal pricing in line with historical levels. We expect the impact of these elevated supply levels to improve over the course of the year.
For the same store portfolio, we expect effective rate growth for the year to be approximately 0.2% at the midpoint of our range. Occupancy to average between 95.3% and 95.9% for the year or 95.6% at the midpoint, and other revenue items, primarily reimbursement and fee income to grow at 2.5%.
Same store operating expenses are projected to grow at a midpoint of 3.2% for the year. Personnel and repair and maintenance costs are expected to grow just over 3%, while expect some continued pressure for marketing costs and insurance expense. These expense projections combined with the revenue growth of 0.4%, results in a projected decline in things to NOI of 1.15% at the midpoint.
We currently have 9 communities actively leasing and an additional community that stabilized in late 2024. Given the interest carrying and leasing velocity of these recently acquired and completed developments, we anticipate our lease of pipeline being slightly diluted to core FFO in the first half of the year before turning to creative later in the year as more projects stabilize, contributing about $0.03 to core FFO for the year, net of the interest carry.
We expect continued external growth in 2025, both through acquisitions and developments. We anticipate a range of $350 million to $450 million in acquisitions, all likely to be in lease up and not yet stabilized, and a range of $250 to $350 million in development investments for the year. This growth we've partially funded by asset sales, which we expect this positions of approximately $325 million with the remainder to be funded by debt financing and internal cash flow. This external growth is expected to be slightly diluted with the CO FFO in 2025 and then turn a created the CO FFO after stabilization.
We project total overhead expenses, a combination of property management expenses and GNA expenses, to be $134.5 million at the midpoint, a 4.5% increase over 2024 results. We also expect to refinance $400 million in bonds maturing in November 2025. These bonds have an effective rate of 4.2%, and we are forecasting to refinance at 5%.
This anticipated refinancing coupled with our 2024 refinancing activities will result in three senses of dilution to core FFO as compared to prior year. Combined with financing to support our expected growth for 2025, we project interest expense to increase by approximately 13% for the year.
That is all that we have in the way of prepared comments, so we will now turn the call back to you for any questions.

Question and Answer Session

Operator

(Operator Instructions)
Jamie Feldman, Wells Fargo.

Great, thanks for taking the question.
I was hoping you could put a finer point on the 1.7% blend outlook for 2025. Can you talk exactly about what you're thinking for new versus renewal? And then is there a point in the year where you think new spreads actually turned positive? And maybe talk a little bit more about the cadence throughout the year of that 1.7%?

Tim Argo

Yes. This is Tim. I'll give a little bit of detail on the guidance the pricing guidance.
So for the year, we're expecting new lease pricing on a lease over lease basis, somewhere in the negative 1.5% range, with that obviously playing out seasonally with the lowest point where we are right now, getting slightly positive as we get into Q3 and then starting to trend back down seasonally a little bit as we get into Q4.
And then renewals, pretty steady in that 4.25%, 4.4% range where we are right now. We don't expect much movement there. That tends to stay pretty consistent. So, it's the new lease pricing that drives the variance throughout the quarters.

Okay. And sorry, did you -- do you think you'll see any months or quarters with positive new release?

Tim Argo

Yes. I would say as you get into typically what we see, if you think about normal seasonality is new lease pricing sort of accelerating January through to about July and then starting to moderate as you get into August. So I would expect as we get into late Q2, early Q3, we expect to have two or three months where we'll be slightly positive on the new lease rate and then trend back down to negative as you get into late Q3 and into Q4.

Okay and then what are you guys thinking on turnover? How does that trend throughout the year?

Tim Argo

Expecting pretty consistent with where we were in 2024. The major reasons people move out, obviously buy a home, job change, those are the buy a home is down, I think 20% in Q4 compared to where it was last year. With interest rates and home prices where they are, we don't expect that to move a lot. And so we -- and generally, we're dialing into our forecast renewal or turnover consistent with where we were in 2024.

Okay, great. Thanks for the color. And Eric, congratulations again.

Operator

Eric Wolfe, Citi.

Hey, I just wanted to follow up there, I mean, when I look at the contribution to your same sort of revenue from the 1.7% blend, it looks like it's sort of on the lower end, which suggests that there's probably a good back half waiting to the blended spread.
So, I was just curious if that's the case, if you could just maybe provide like, you expect the first half to be in like a 0.5% range and then it's a step up to over 2.5%, or if the difference is really just seasonally. Like you just think the seasonally, the second quarter and third quarter will be a sort of a very normal lift. I'm just trying to understand that this is like a sort of a back half type of prediction for this year.

Tim Argo

Not necessarily a back half prediction. I mean, we expect the normal seasonality as I was talking about and certainly for new lease rates to moderate as you get late Q3 and into Q4. So, it's really another thing to keep in mind, obviously, when you think about mid Q2, early Q3, we also have the bulk of our leases expiring during that time. So, matching up some of the more positive new lease rates with the maximum number of leases is really what drives that waiting. But as I mentioned, we expect to get slightly positive call to the one to 1.25 range for a couple of months in the middle of the year and then start to trend back down. So, it's the combination of the weighting of the lease expirations and then obviously the balance between new lease and renewals. We expect renewals will be a heavier weighting as they were this year with consistent turnover. So, that's really what's driving the full year number.

Eric, this is Brad. I'll just -- I'll add one additional item to that.
Certainly, if you look at the supply and the new deliveries as we get into this year, I mean, as we look back, the new supply that was started in 2023, clearly there was a drop off in that new supply in the back half of 2023, which we think, really informs the supply pressure as we get into 2025. So as we mentioned in our comments, we are in still an elevated level of supply. Today, we're off the peak of where we have been in 2024, and that supply fixture will continue to get better as we go throughout this year.
So to Tim's point, as you start layering on top of diminishing supply pressure environment as we go through the year with the demand that continues to pick up as we get into the spring and summer leasing season, that really starts to inform the trajectory of what we think the lease rates will look like through the year.

And I'm not sure if you have this data, but when you look at your renewals, what percent of those renewals are also tenants that renewed the prior year? I guess I'm trying to understand sort of what percentage of tenants are taking two years of this sort of 4% to 5% renewal increases in sort of a flattish market rate environment and if you have any sort of limit on where renewal rate rents can be relative to market or new lease rents.

Tim Argo

Well, we have another way to, perhaps, characterize that is our average stay is somewhere in the 21, 22 month range. That certainly is extended out a little bit over the last couple of years with the lower turnover. So typically, you have a resident moves in, has called a 12-month lease, and then does one renewal, and then on average they're moving out after that first renewal. So typically, don't see renewal on top of renewal on top of renewal, which tends to be a little bit of a governor on that gap getting too wide. Even with lower turnover, we're still turning a good chunk of the portfolio every year and so it tends to balance itself out a little bit.
And then to Brad's point about strengthening supply and demand dynamic, we expect new lease rates to accelerate throughout the year, which then should in turn help the renewal rates where it's starting to narrow that gap and it doesn't gap any wider than it has been so I think that will provide some stability and strength on the renewal side also.

Got it. Thank you.

Operator

Nick Yulico, Scotiabank.

Good morning, everyone. It's Daniel Tricarico. I'm with Nick.
Can you help us understand how concessions in your markets have impacted your new lease rate figures and if you see the dissipation of concessionary activity and these your comps maybe having a -- to use your word compounding effect on the reported numbers.

Yeah, I mean, to answer the last part of that, the lease over lease rates we quote are net of the impact of concessions, so that's considered in there. But I would say broadly, for us, for our portfolio, concessions were down a little bit in Q4 as compared to Q3 in terms of cash concessions, I would say at a market-wide portfolio level, concessions were pretty consistent, around a month free is pretty typical in most markets.
Now, you get into some of the tougher markets with a lot of lease up, and it's some of the same submarkets I've talked about before, you think about downtown Austin and then Round Rock, Georgetown area of Austin, you think about Midtown Atlanta, you think about Uptown Charlotte. That's where you can get more into the 2, 2.5, even up to 3 in a couple of spots with a lot of lease up. So still pressure there, some of the markets we've talked about, but the concession pressure overall is steady to perhaps slightly declining.

Great, thanks for that.
And then I guess as a follow up, do you have a sense on I guess how much competitive supply that you guys track is how much that is declining year over year in '26 and '27, and maybe how that compares on a like a completion as a percentage stock basis to, maybe the prior years to 2020.

Tim Argo

Yeah. I mean, for 2025, we think supplies is probably down 15% to 20% in terms of just absolute units being delivered from from '24 to '25. It's probably we think it's down closer 30% to 40% as you look out into the 2026. And then you know you start getting pretty far out at that point, but if you look at the starts and Eric hit on this as well, I mean starts are down. Q4 of 2024 starts in our market where 0.3% of inventory, which is the lowest it's been for the last several years, well below where it was even during COVID. So, it speaks to a pretty long window where we think supply will be moderating.

But like on a completions as a percent of stock like in '26 is that like lower than a normal year?

Yeah. I would say in our markets, 3.5% of inventory is probably about average, if you think about the long term, 3.5%. We've certainly been above that the last few years, but I think 25% or 26% is below that. And I expect 2027 - 2026 is below that, and I expect 2027 is even further below that.

Great, thanks. And congratulations, Eric.

Operator

Brad Heffern, RBC Capital Markets. Your line is opened.

Yeah, thanks. Morning, everyone.
You've talked a few times about the start of the year being better than normal. I think you said in the prepared remarks that blends are improving more than normal in January on a sequential basis, those are obviously very influenced by comps. So, I'm just curious if you're seeing like a real market level fundamental inflection, market rent trend being better than normal, occupancy rising, you kind of talked about concessions maybe getting a little bit better. Just trying to figure out how much of that is sort of just comps and the abnormality of where leasing spreads are right now versus like a real fundamental exchange.

Well, I mean, it's a combination of all of those. Certainly, the lessening supply, I think, is playing a part of that, easier comps, if you will, is playing a part of that. But when we think about the sequential trends we're seeing in January both compared to December and Q4 and not just looking back to the last year or two, but looking back to, what we would call more normal periods, which probably is going back to 2017, 2018, 2019. The deceleration from Q3 to Q4 was sort of less than typical. And then the acceleration from Q4 to January was more so and so much where January. new lease pricing is better than the than the full Q4, which is pretty atypical. We usually see it's usually a little bit lower than Q4, and then we would expect February, March to accelerate even more. So, I feel like it's a good position to where we are and showing some, I think, real strength in the recovery. So, I think that piece is probably tied to just an improving overall outlook, the higher than typical acceleration.

Okay, thanks for that.
And then can you talk through whether you think changes in immigration policy could have a significant impact on the portfolio either through deportations or just through less immigration.

Yeah, hey, this is Brad.
I would say from the same store perspective, we don't see a whole lot of impact coming from the change in the immigration policies. I mean, there's nothing that we track that would indicate that we're really overly exposed to any type of the immigration issues that we see out there. So, from a labor perspective in our same store portfolio, we don't see that being a big impact in terms from a resident perspective again. No matter which metric we're looking at, we don't see that we're exposed to a large degree to that.
Now, having said that, where I think we could see some impact associated with the immigration side would be on, perhaps in the new development area where a lot of the labor in that area, there could be some labor impact associated with that and clearly that would have an impact on the ability of the market really to ramp up new construction. For us, obviously, that would impact our desire to continue to hold our new developments at the billion dollar level that we're talking about. But given the overall size of our existing. portfolio, anything that slows down supply longer term would be a benefit to our existing portfolio. But at this point, it's something that we'll have to continue to monitor and see how it how it plays out, but we're not seeing a material impact and don't see that on the horizon at the moment.

Okay, thanks for the thought.

Operator

Our next question comes from the line of Jeff Spector with Bank of America. Your line is opened.

Jeff Spector

Great, thank you. Just to follow up to that, I was going to ask a similar question, but maybe even just pulling in demographics when you think about your portfolio positioning third A, third B plus third B, and then you're split between urban suburban, I guess from a high level, long term standpoint, 5-year view. Does any of this change your thinking on portfolio positioning?

Yeah, this is Brad. Tim, you can add some points here too.
But, I don't think so. I mean, one of the characteristics of our portfolio long term is definitely to orient our portfolio toward the highest demand region of the country, that generally leads to lower volatility in both earnings and dividends performance. And so we think that continues to be the right focus for us in terms of where we're located, the markets we're located in, and also allocating capital mixed between larger markets and mid-tier markets. So, that also tends to support kind of a more affordable price point than, other portfolios that are out there.
And I think if you look at our return over a long period of time, I think that speaks to us appealing to the broadest segment of the rental market, and I think ultimately that's really what we want to do versus skewing the portfolio to one end of the spectrum versus the other. And so, I don't see a material change in terms of our strategy, in terms of how we're allocating capital or those other portfolio characteristics that we target.

Jeff Spector

Great, thank you.
And I apologize if I missed this, but can you talk a little bit more disclose more on CapEx between the acquisitions, dispositions, and maybe what the requirement is today between what you're looking for between development and acquisitions. Thank you.

Yeah, Jeff, this is Brad again.
Yeah, so the dispositions that we sold in the fourth quarter, CapEx on those were call it low 6s. And those, I'll tell you on the two that we sold, we had one property in Charlotte that did have a fire during the marketing process, so proceeds were certainly impacted a bit by that.
So -- but I will tell you on an after CapEx basis, those properties that we're selling generally are 30-year old assets, so they have higher CapEx needs that we're recycling the capital out of. And then we're redeploying that capital, as I mentioned in my call comments, into acquisitions, generally in lease up, so there's some lease up period associated with them. And then upon reaching stabilization, those yields are close to 6% in terms of what we're achieving.
Now, we're able to achieve those yields because we are focusing on properties that are in lease up that are harder for the market to finance, so we're able to get better pricing generally. We're 15% to 20% below current replacement costs on those, so we're able to get a pretty good return on those. The market cap rates in the fourth quarter that we tracked is not a lot of data points. We only tracked 6 projects that ended up closing and the cap rate was around a 551.
Our developments, the 5 that we invested in '24, those were a 6, call it a 64 NOI yield, so it's a 140 basis point spread to current market cap rates, and we feel that that's a good place for us to continue to focus our capital, in that 6 to 6.5 range on development.

Jeff Spector

Thank you.

Operator

Austin Wurschmidt, KeyBanc Capital Markets.

Great, thanks. And good morning, everybody.
So, going back to a question earlier about lease over lease pricing expectations and just kind of thinking back to when you started to see pricing pressure in the back half of 2023 and kind of this expectation that absorption of peak deliveries will continue through the first half of this year. Is it fair to assume that you do face easier comps in the back half of the year? You could see concession pricing begin to abate more quickly, which could lead to kind of the even better spread in blended rate growth versus the prior year and that will lead to the acceleration of net year-over-year net effect of rent growth. Is that the right way to think about it?

Tim Argo

Hey, Austin, it's Tim. And are you talking about as we get to the back part of 2025 primarily?

Yes.

Tim Argo

Yeah, I mean, I definitely think we could see if you want to call it less seasonality as you get into late 2025 because as we talked about, we've got the moderating supply pressure that will continue to speak well on the demand side through the remainder of 2025 and into 2026. We did see kind of the peak of that supply pressure late '24. So yeah, I think there's an easier comp component that comes with that. It's where I would expect, we're talking about this less seasonal deceleration that we saw this year. I think we could definitely see that in the back part of 2025 as well.

And based on the fact that you did negative 0.5% year over year net effective rent growth in the back half of 2024 and the guidance assumes a 20 basis point positive growth this year, I guess when do you expect that net effective to turn positive on a year over year basis?

Tim Argo

Yeah, I'll say it will probably be towards the middle part of the year by in Q3, mid Q3, and then on into Q4 and beyond.

That's helpful and then just last one for me.
If you broke out your blended rate growth between the larger markets and your smaller secondary markets, how do those stack up relative to this year versus 2024? Just curious where you're seeing the most improvement between those two buckets, and that's all for me. Thank you.

Tim Argo

I mean, I would say we've seen it -- seen that gap narrow a little bit. I mean, the secondary markets or mid-tier, however you want to call it, have outperformed certainly the last couple years with generally lower supply in those markets. But we have seen it start to narrow, particularly the last couple quarters. There's still probably 50 basis points, I call it a pricing difference, but it has narrowed a bit.

Operator

Michael Goldsmith, UBS.

Good morning. Thanks a lot for taking my question.
The question's on the return of pricing power, your occupancy levels are elevated, but not necessarily everyone in your markets are in the same position. So, do you see pricing power returning contingency -- contingent on occupancy to improve in competing properties and does this slow down in supplier growth that you're expecting this year support that?

Tim Argo

Well, certainly the market level I can see plays into it a little bit, you're somewhat at the mercy of what some of your other immediate cops are doing. But when we look at where current I can see is right now, which is 25 to 30 basis points better than it was this time last year. And really looking at exposure which looks out further, and we're in a much better position there. We're pretty confident that certainly over the next few months we're in a good spot with occupancy to where we can particularly to get into the spring, can start to push on that pricing.
But given where we are right now with exposure compared to last year, that's a better spot to be. And then you combine that with declining supply, gives us pretty good confidence that occupancy will stay in the steady range, which is about where we want it. We don't really desire to be at 96%. Somewhere in this 95%, 96% range is about right and where we can start to push on price as we get into the spring and summer.

Got it.
And just as a follow up, as you think about new lease rents and how they'll trend through this year, you're going from down 8% today to positive in the third quarter. So, what does that new lease rents look like from the start of the year to peak and how does that maybe compare to historical growth through the year? Thanks.

Tim Argo

So, our January new lease rates were negative 7.1, so that's kind of where we're starting. And as we talked about every year that we've seen sort of a normal seasonality, we see that accelerate pretty consistently through to about July. So as I mentioned, as we get to July, we're thinking slightly positive somewhere in the 1%, 1.5% range, so you can kind of do the math on the acceleration that that we're assuming, but that's typical with kind of how the seasonality typically works.

How does that compare to like a historically, like the historical year or the historical curve?

It's certainly historical -- it's a historical curve, so the shape of the curve would look like normal. It's a little bit steeper as you get into the spring and summer based on seasonality combined with declining supply pressure.

Got it. Thank you very much.

Operator

Adam Kramer, Morgan Stanley.

Great, thanks for for taking the question and congrats, Erica. All the best going forward. I wanted to ask about the kind of job growth and wage growth assumptions and maybe even just kind of higher level macro assumptions that you've you've embedded, I guess out of formally or or informally kind of in in the guide here.

Yeah, I would say from a, macroeconomic standpoint, pretty consistent with what we saw in 2024, so we're expecting, call it 600,000 new jobs in our markets for 25, which would be consistent with what we saw in 24, pretty consistent in terms of, the in migration that we continue to see household formation, population growth, all the various factors that that you've seen, we would expect to stay pretty consistent. And certainly be above what we see at the national level with these markets being a little bit higher growth markets and then combined with that, continued low turnover, continue to low move out to buy a home and and some of the other reasons. So, macroeconomic, pretty consistent with last year, but with a better supply dynamic.

Great, that's really helpful and I think you just mentioned the January new lease number in in the prior question or answer, but do you mind just giving that the kind of renewal and blended number for January as well?

Yeah, so January new lease ne 7.1% renewal was 4.6%, and Glen was 0.9.

Got it. Appreciate the time, guys.
Thank you.

Our next question comes from the line of Alexander Goldfarb with Piper Sandler. Your line is opened.

Good morning down there and Eric, Mazelov, as I say in New York, and Brad.that the buck now stops with you, so all the complaining and griping now comes to your desk.
Two questions. First, as you guys look at, cap rates, you mentioned 551, I think to Jeff Spector's question, debt costs are certainly above that. How long do you think people because not everyone can be an all cash buyer. So what is your sense for how long people are tolerating that negative leverage? And is that, and do you think it's typical with what we, what you've seen historically when we have periods of negative leverage, or do you think people are willing to wait longer?

Yeah, I mean, this is Brad. I think, historically periods of negative leverage have been temporary. I'd say this has probably been one of the longest periods of negative leverage that has occurred. And so what we're seeing a couple of things. One is buyers are buying down their interest rates a bit, which helps the negative leverage some.
And then too, I think they are underwriting an assumption of a pretty aggressive recovery in 26 and beyond, and I think that that certainly helps them.
Get more comfortable with what their negative leverage looks like and how quickly they can grow out of that position. So I think it really depends on what your outlook is and how aggressive you're going to be on the underwriting, but those are two things that we're certainly seeing in the market right now.

And then as you guys underwrite projects whether they're acquisitions or developments, how much of your, how much of the mass is coming from other income, meaning Wi Fi or cell service or waste or other services, meaning like years ago it was pure rent, but the industry has evolved. So I'm just sort of curious how much of your yield now comes from things other than rent.

It's not much. I mean, we certainly the one piece that I think would be probably a bigger component will be with the Wi Fi piece which, we're just now rolling out across the portfolio, that that is one that certainly has positive implications from a resident experience perspective and from a demand perspective from our residents as well as supporting, what we're doing on self touring and things of that nature, but we've gotten away. We have some properties with valet trash and things of that nature, but generally, those are not, major items that we're focusing efforts on. It's really in areas where, we're adding value to our residents, whether it's our bulk cable that we have or our Wi Fi, certainly those are some of the larger components of the fees that we do have.

Thank you.

Our next question comes from the line of Richard Anderson with Wedbush. Your line is opened.

Thanks, good morning, and, Eric, if this is an April fool's joke, it'll be the best one ever but really an honor to follow your career, to this point and good luck to you, but I am going to ask you a question because, I'm not letting you get off the hook. As executive Chairman, we've heard that, title. Or and and sometimes people have difficulty disengaging. I, and you said you're going to remain active, which is great, I think for everybody involved, but how do you think the dynamic will play out, is Brad like on day one, his fingerprints are going to be all over.
Or is there going to be sort of a a phase in process? I'm just wondering, when you say remain active, is that like a dimmer switch as time passes or a light switch? I'm just, I'd just love to know how things will go from here.

Well, I like your analogy, Rich, about the switches. I would definitely lean towards the dimmer switch concept, and that, that's the intent here. I, as I said earlier, I've got tremendous confidence in Brad. And tremendous confidence in the team that he has with him and I think just as a function of me pulling back a little bit that the the influence that Brad and the rest of the team have on performance and how things are playing out is going to grow and my influence will diminish, but I think that the the intent here is for me to continue to be. Actively available to to Brad to help him think about, whatever may be coming up in terms of challenges or opportunities, and I certainly will remain tied in to, the various reporting and things that are going on to be sure I have a good finger on the pulse so that I can be helpful in that regard as well. But it clearly is, an intention here as I've seen it done successfully in other organizations for my, sort of involvement to diminish over time and that and that's that's the plan and And, certainly remain active at the board level for years to come. I've got, I've been here for 30 years, and everything I have personally is tied up in the company. I can't think of a better investment for my net worth and plan to, continue to do all I can to support making it worth more in the future.

Awesome, thanks for that, Eric, and good luck. My second question real quick is, when we've seen extraordinary conditions play out, it's often followed by extraordinary snapbacks, like, for example, the 20+ percent type growth we were seeing in rents when people were moving back to the office and so on in 2022 I guess it was, so we've had extraordinary supply in the sun belt, you're talking about a path of improvement as the year progresses. How Excited are you really for 2026 and is there a chance for like significantly outsized growth starting in 2026 just because of the nature of the events that took place that preceded it? I'm just curious if that's a possibility in your eyes.

I mean, I definitely think it's a possibility, Rich, because as you say, you and I have both been around a long time and the severity of the cycle tends to define the extent of the recovery, and we're coming off a 50 year high level of supply in our markets. I mean this is unprecedented. We haven't seen this level of supply since we've been a public company. And what's what's so encouraging about that fact is the fact that, our NOI and our overall performance moderated certainly from where we were during the COVID years, but it didn't collapse by any means and it's held up actually pretty darn well in the grand scheme of things and And I think that speaks to just the appeal of this product, the appeal of our markets, the appeal of our portfolio, and all those factors that drive the appeal and drive demand are still there and I think are growing. I think the new incoming administration is more likely to have a positive impact ultimately on the economy than the negative, at least I certainly hope that. So I'm very enthused about what I continue to believe is going to be, great demand side dynamics against a backdrop of what we know is going to be incredibly dramatic falloff in the level of supply coming into the markets. And so that does set up a very interesting, set of demand and supply dynamics going into 20 late this year into 206 and 27 that we think is going to have a hugely positive impact on on our performance.

Okay.

Great. Thanks very much.
Thank you again, Eric.

Thank you, Rich. Appreciate it.

Our next question comes from the line of Steve Socqua with Evercore ISI. Your one is opened.

Yeah, thanks. Most of my questions have been asked. I just wanted to maybe ask Clay one on just the refinancing of the bonds, I think he threw out a 5% rate.
I guess I'm really curious, where do you think your spreads are today? I realized the 10 year is pretty volatile, so trying to peg it to an exact rate today might be hard, but where do you think a 10 year issue would be for you today with the 10 years sitting around a little over 440?

Yeah, Steve, back in December we actually issued some bonds and actually got a record low spread of 78 basis points with that transaction, given where the Treasury has, trended since that point in time, I suspect that the spread is probably picked up, several basis points, but I would still say it's somewhere between 80 and 85 bits.

Okay, great. Thanks.

Our next question comes from the line of Michael Gorman with BTIG. Your line is opened.

Yeah, thanks. Just a couple of quick ones going back to the transaction side of things, just trying to understand how we should think about the potential timing of investments over the course of the year. If I kind of marry it up to your discussions of the fundamental strengths kind of improving in the markets and your focus on lease up properties, should we expect acquisition opportunities maybe to be front end loaded before maybe some of that lease up opportunity hits and maybe more competition comes into the space, or how should we think about that?

Yeah, I mean, just based on, what we're seeing in the market right now and, what we heard last week at NMHC, my sense is that the market's probably going to be slower the first half of the year and will likely tick up, maybe mid-year and into the 3rd quarter and, obviously. As those those properties come out and hit the market, it takes, 90 to 120 days, for some of these to close. So, my sense is it's going to be 3rd quarter before we really start to see the volume pick up on the transaction side.

Okay, great, that's helpful. And then maybe just one last one, I apologize if I missed it, but you mentioned outperforming on the collections from what do you have baked into the 25 guidance in terms of delinquencies?

Yeah, we, it's.

Pretty consistent with what we've seen, this past year, so I think we've got about 30 basis points, 35 basis points assumed for delinquencies and, in the.

2025 guy.
Great, thanks so much.

Our next question comes from the line of Handel Saint Just with Mizuo. Your line is opened.

Yes, good morning and Eric, golf clap, it's been a pleasure. .
I had a couple of quick questions I wanted to first a follow up on I think it was Michael question earlier. I'm curious how much actual rents would need to change over the course of this year for new lease rates to be positive, not just how much new lease spreads would need to improve, but the actual dollar per unit change from now until the 3rd quarter, and then maybe some context on what that would perhaps look like in a more normal year.

Thanks.
Yeah, I know, TAM. If you think about, so if I look at January, for example, the all of the new lease absolute rents that we put in place compared to January of last year, it's about a negative 1.5% spread and that that GAAP has continued to narrow throughout 2024. So you're calling it. $25 GAAP in that year of year look, so that can give you a little bit of perspective on what that GAAP looks like. I mean, we typically would see if you think about market rents as, whatever December was and then how it trends on new leases throughout the year, we would see, July, probably 4 or 5% above what December rents are and then trend back down, so, something.
Less than that is really what we have dialed in, but that that gives you a little bit of perspective.

Appreciate that. My second question is on the outlook for turnover, this year, I think you guys mentioned.
A flat relative to last year and last year I think you had close to I think almost 60% pension, one of the highest levels I can remember. But I'm curious if demand and market rates start to show some improvement as we expect and you start pushing a bit more for pricing power, wouldn't that cause some upward pressure on turnovers? So just curious on how you're thinking about your expectations for turnover this year.

Yeah, I mean, certainly it does, but I would argue right now with all of the options that are out there in the market and all the supply that is out there, I mean, people have more options certainly than they ever have. So you know that's there's more incentive, frankly to move right now given the concession environment and all the supply that's out there, and yet we haven't seen that turnover pick up. So I think it's more.
Macro driven, it's, the biggest reason to move out has always been to buy a house, and that's extremely difficult, not only with interest rates, but with where single family home prices are, they continue to grow even as our rents have moderated over the last year. So I think it's more of a macro picture in terms of price style changes and life events that's driving it more so less so than, the current pricing position.

Appreciate the thoughts. Thanks, guys.

Our next question comes from the line of Rich Hightower with Barclays. Your line is opened.

Hey, good morning guys, and.

Again, congrats to both Eric and and Brad. Just one for me. I guess if we're, if you're keeping a steady development pipeline, it sounds like right around a billion, give.

Or take, but if we see this air.

Pocket of sorts.

In new supply going.

Forward where maybe you could lean into development a little more, as sort of.

Current projects trail off, what's the appetite, the capacity? Obviously.

You've got a great balance sheet. And I assume you could flex that up anytime you like. So just tell us about the thoughts around maybe increasing development from here.

Thanks.
Yeah, I mean, I think certainly development is one of the best uses of capital that we have today, especially given, what we think will be a diminished supply pipeline going forward. And, it takes time to really build that pipeline and 2 years ago that we had that pipeline was at about $450 million and today it's close to $900 million where we want to keep it. So the team has done a tremendous job of really building it to that point and I I do think said in his comments and I've mentioned, the starts that we had in 2024 is a record level for us and so we have really good momentum in terms of building that and would like to really keep it elevated, today, we expect another 3 to 4 projects to start this year which will keep us at that level where I think you could potentially see additional opportunities.
Could be in our JV pre-purchase platform where we partner with other developers because we are seeing continued instances where equity capital, is backing out of deals and we're able to step into potential deals that are pretty close to shove already. We have a couple of opportunities we're looking at like that for this year which could allow us to quickly. Addd additional projects to that pipeline. So you know that's an area we'll continue to focus on, we'd like to keep our exposure there, no more than about 5% of our enterprise value, which keeps us kind of in that we call it $1.2 billion dollar range, something in that area. So we'll continue to focus on developing to the extent that we're able to lean into that a bit more, we.

We will.
Okay, very helpful.

Thanks.
Our next question comes from the line of Rob Stevenson with Janie. Your line is opened.
Robbie appeared to be muted.
Okay, we're going to go ahead and move on. Our next question comes from the line of West Gallaa with Baird. Your line is opened.

Hey, good morning.

Everyone, and congratulations to both Eric.

And Brad. Quick question for you on migration to the Sun Belt. Has there been any change in volume or where they're coming.

From?

Hey Wes is SAM. Not really. I mean, it's sort of hovered in that.
10 to 12 to 13% of our moves coming from outside of the Sun Belt into the Sun Belt, and that's that's continues to be in that range and generally it's obviously the larger states is where they tend to come from it's California, New York and Chicago and some of those. So broadly the the the trends are the same as they've been for the last year or so.

Okay, and then you're doing a lot of asset.

Recycling this year. Is there.

Any appetite to lever up a little.

Early in the cycle?

Yeah, so we'll, you'll you'll probably see a little bit of that as we, look to acquire, Brad mentioned some of those acquisitions will probably be in the latter part of the year. What we're the way we're thinking about the cadence of that though is to your point with us is that those dispositions will probably fall off in the in the back part of the year. And so you might see a little bit of lever up to fund some of the development pipeline that we've talked about as well as some of the acquisitions that that we've that we've guided towards as well.
I don't think it would be, it wouldn't be anything outside of what we stated as far as where our leverage would go though.
Okay, thank you.

Our next question comes from the line of Linday with Jeffrey. Your line is opened.

Hi, thanks for taking my question. Eric, congratulations again, you're really a paradigm for leadership. You're earning of 1,515 to 50s based on pricing through October. Maybe just some more color on that and how does that compare to a year ago?

Yeah, so last year.

Our earning was a.

Positive 50 basis points, and so as I mentioned in my comments, that the earn end we have going into 2025 is is negative 40 basis points. If you're alluding to our new presentation that we had. Provided back in November, the difference, the midpoint of that was obviously 35-35 basis points. So we did see a little bit of pressure in November and December and pricing, that bar from that midpoint down to to the negative 40 basis points.

And then the steep drop in supply pressure in markets, over down 20% like Houston, Atlanta, Orlando, is that supply coming down at the same time collectively, or is it sort of bumpy?

It's relatively consistent when you think about it across the markets because if you go back to the starts that we talked about that kind of peaked in 2nd quarter, 3rd quarter of 2022. There's a couple of markets where that peak was a quarter earlier or a quarter later, but. For the most part it was right in that range, so I would expect a relatively steady decline. It's pretty consistent across most markets. I mean, certainly there's a few that are still seeing increasing supply, but on balance it's a pretty consistent trend.
Thank you.

Our next question comes from the line of Ann Chan with Green Street. Your line is opened.

Hey, good morning, everyone. Thanks for taking my question. So first question, going to the topic of portfolio location, over the next few years, do you expect to exit any markets or enter any new markets? And if so, which markets are on your short list?

Yeah, and this is Brad. I mean, we definitely have some markets where we have one or two assets that over time, we'll continue to cycle out of and drive efficiencies. I mean, broadly speaking, we We like our overall portfolio allocation where we're located in the split between, kind of our larger markets and our mid-tier markets. So, certainly not looking to do any type of a large repositioning of the portfolio, but some of those markets where we have one or two assets will certainly look to to call out of, over time, in terms of other markets, I mean, we do have, newer markets for us, that we need to continue to grow in, Denver, we've got a pretty big development pipeline there where we continue to add assets. Grow to that market, which is a newer market for us. Salt Lake City is another one where we need to continue to grow and fill out, and we are looking at newer markets that have some of the same characteristics of our our high growth markets and, Columbus, Ohio is certainly a market that we've studied and are looking at and so we'll see. It has a lot of the similar characteristics as our other markets in terms of job growth. And things of that nature.

Thanks, and for a second question, shifting over to developments, construction costs. Have you observed any changing trends in construction cost components like, labor or material costs, etc. Over the last few months, and, to the extent that it drives development decisions, where would you need to see construction costs, for development you know to be a more attractive pursuit than these sets.

Yeah, I mean, we have seen construction costs come down. I mean, really over the better part of 2024, it wasn't as broad based in 2024. I mean, selectively we saw, 4 or 5% reduction in certain markets. I would say at this point. We were seeing it in additional markets probably in that, 5% or so range, and generally that's more in the, we've seen some labor reduction. We've really seen reduction in margins that expanded over the last couple of years by subs and GCs, so we've seen some improvement there and I think for us to continue to increase our development, we need to see costs, the combination of costs and rent improvement.
To the tune of, call it 5 to 7% additionally, and, we have a pipeline of sites that we own with with projects that are approved, and to the extent we continue to see some improvement in the in the underwriting of those with construction costs and rents, more of those will begin to pencil as we progress throughout this year.

Great, thanks so much.

Our next question comes from the line of Tao Akosania with Deutsche Bank. Your line is opened.

Hi, yes, good morning. Again, let me add my congratulations as well with the transition. Eric, maybe this gives you a little bit more time to get that next PR in the marathon. Mike.
My question has to do with, again, you guys have been very offensive-minded, in the past year or so looking for opportunities for kind of distress, opportunities to kind of take advantage of some of the oversupply and what they be doing to developers, but it sounds. Like again capratesitions are still pretty tight. It doesn't sound like there's that much distress out there. So when we kind of think about again this opportunity that you've described for the better part of the past one year, just, how real can it actually be. And how do you kind of start thinking about maybe getting opportunities to kind of buy things well below replacement cost or, those kind of opportunities that are really kind of value added that create shareholder value, typically in environments of distress.

Yes, hi, it's Brad, definitely we haven't seen a lot of distress, frankly.
And we'll continue to focus where we have, and that's that's generally in these projects that are at lease up. I mean we do think that. Those will continue to face a bit of pressure just given the amount of supply that's out there and given the strength of our operating platform. I mean, we are too to really take advantage of those, and there are some sellers out there that are interested in selling some of those properties earlier before they're stabilized and still generate a very similar return for their capital.
But if they waited till it stabilized and they sold at a higher price, so based on our experience and our markets, our relationships, we're still able to find opportunities like that. We're able to get, some of these assets at some of these high yields, close to 6%.
Basis at replacement, well below replacement costs. So we'll continue to focus in that area, you could see some distress perhaps in some of the older assets that that, sold in 2020, 2021 with refinancing that has to come due, but for the most part, some of that, most of that would not be something that we're interested generally.

Helpful.

And if I could ask one other quick one, again, thanks for the update about bad debt and delinquency.
Curious again about some of the fraud related issues that were kind of going on in some of the markets, what you're seeing in terms of that, whether it's kind of gotten worse or gotten better, both in terms of the overall activity and also in terms of some of your preventive measures as well against.

Those issues.

By this time, I think you were asking about fraud and bad debt, is that correct? You kind of cut out there for a second. Yeah, we've seen continued, lowering pressure, I would say, Atlanta's been the market that has been talked about a lot and our delinquency there is just about consistent with where we are at the broader portfolio level. I mean, we have a lot of. Tools in place, both in terms of, sort of AI machine learning type of stuff plus, training that we do both on site and and some resources we have at the corporate level as well to where if there's anything that looks a little bit off in terms of, income documentation or ID or whatever, we've got people that are trained to really help spot that and take a look at those, so get it being very preventative has been helpful.
It probably hurt occupancy for a while there in Atlanta, but it's going to be better long term and we started to see that play out with continued lower bad debt, so H1stly, not much of an issue at all for us.
Thank you.

Our next question comes from the line of John Kim with BMO Capital Markets. Your line is opened.
Thank you and.

Eric, congratulations on transforming MAA from good to great.

Brad, I had a.

Question.
I had a question on, in the press release, you talked about some markets seeing positively of release, rates, versus last year, and I'm wondering what com what markets those are and where you feel most bullish about which markets will be driving the improvement in blended lease growth this year.

Hey John, this is TAM. I'll I'll answer some of the detail there. So we did see, 13 markets where we had positive blended in January, which was encouraging and it was pretty widespread among some some mid-tier and smaller and some larger markets as well. I would point to. Tampa is one that, we're, we've really seen some good tras in the last two quarters or so and it is trended above the portfolio. I think that's one where we could see some improving performance 2025, when you think about.
Good markets if you will. There's the ones that have been good are going to drive good revenue now, then there's the ones where the pricing is improving and it's more tip of the spirit. It will show up in revenue till later, so. The first bucket is going to be some of the ones we've talked about. It's DC, it's Houston, it's Charleston. Those are we expect to continue to be strong. Then there's markets like Tampa, and I would put put Orlando in that bucket as well that are starting to show some some improvement, and we think, as you get in a bit later this year, those are a couple that we expect to see some some better performance from. And then we'll, Austin still one that we expect to continue to be a laggard with the continuing supply pressure there, but Orlando would be two that I would point out as as trending markets for us.

And then to get to your negative 1.5% new lease rate for the year, what kind of market rent growth are you assuming? And if you can comment on your current gain to lease and how much of a headwind that will be in order to get that new lease growth rate.

Having gain at least about 1% right now, which it always tends to GAAP out this time of the year when when pricing is weakest. So, I would expect we saw, January market rents were a little bit higher, about 0.5% higher than what December were, so I think that'll that'll trend up through the summer and then trend back down. But probably the best way to think about it is just we talked about our newlyle over rates, for the full year expected to be kind of in that negative 1.5% range. So over the full year it should, that should correlate pretty well with market rate growth.
Okay, thank you.

We have no further questions, I will return the call to MMA MAA for closing remarks.

Okay, no further comments from the company, so we appreciate everyone joining us and we will see many of you at the conference in February or March.

City.
Thank you.

This concludes today's program.
Thank you for your participation. You may now disconnect at this time.