MAALP Q3 Net Income Dips, YTD Strong on Asset Sales

TL;DR

**MAALP's Q3 net income fell due to rising costs, but a big year-to-date gain from asset sales makes it a hold, not a buy.**

AI Summary

Mid-America Apartments, L.P. (MAALP) reported a net income of $102.044 million for the three months ended September 30, 2025, a decrease from $118.230 million in the same period of 2024. For the nine months ended September 30, 2025, net income increased to $399.325 million from $370.502 million in 2024. Rental and other property revenues saw a slight increase to $554.373 million in Q3 2025 from $551.126 million in Q3 2024, and to $1.653 billion for the nine months ended September 30, 2025, up from $1.641 billion in 2024. Total property operating expenses rose to $372.714 million in Q3 2025 from $358.283 million in Q3 2024, driven by increases in operating expenses (excluding real estate taxes and insurance) and depreciation and amortization. Interest expense also increased to $46.277 million in Q3 2025 from $42.726 million in Q3 2024. A significant gain on the sale of depreciable real estate assets of $71.842 million was recognized for the nine months ended September 30, 2025, compared to a $25 thousand loss in the prior year, positively impacting year-to-date net income. The company's total assets increased to $11.926 billion as of September 30, 2025, from $11.812 billion at December 31, 2024, primarily due to an increase in buildings and improvements.

Why It Matters

For investors, the slight dip in Q3 2025 net income to $102.044 million compared to $118.230 million in Q3 2024, despite increased revenues, signals potential margin pressures from rising operating and interest expenses. However, the year-to-date net income growth to $399.325 million, significantly bolstered by a $71.842 million gain on asset sales, suggests a strategic approach to portfolio management that could unlock value. This mixed performance in a competitive multifamily real estate market, where MAA operates as an S&P 500 REIT, indicates that while core operational profitability might be challenged, asset disposition strategies are effectively contributing to overall financial health. Employees and customers might see stable operations given the revenue growth, but investors should scrutinize future expense trends and the sustainability of gains from asset sales.

Risk Assessment

Risk Level: medium — The company's interest expense increased to $46.277 million in Q3 2025 from $42.726 million in Q3 2024, and to $136.549 million for the nine months ended September 30, 2025, from $124.352 million in 2024, indicating sensitivity to interest rate fluctuations. Additionally, the significant gain on sale of depreciable real estate assets of $71.842 million for the nine months ended September 30, 2025, is a non-recurring item, and future profitability may be challenged if core operating expenses continue to rise without similar offsetting gains.

Analyst Insight

Investors should closely monitor MAALP's operating expense growth and interest rate exposure, as these factors are eroding quarterly net income despite revenue increases. While the year-to-date performance is strong due to asset sales, investors should not expect such gains to recur consistently and should focus on the underlying operational profitability and cash flow generation from rental properties.

Financial Highlights

revenue

$554.373M

total Assets

$11.926B

net Income

$102.044M

revenue Growth

+0.6%

Revenue Breakdown

Key Numbers

• $102.044M — Net Income (Q3 2025) (Decreased from $118.230M in Q3 2024)
• $399.325M — Net Income (YTD 2025) (Increased from $370.502M in YTD 2024)
• $554.373M — Rental and Other Property Revenues (Q3 2025) (Slight increase from $551.126M in Q3 2024)
• $1.653B — Rental and Other Property Revenues (YTD 2025) (Increased from $1.641B in YTD 2024)
• $372.714M — Total Property Operating Expenses (Q3 2025) (Increased from $358.283M in Q3 2024)
• $71.842M — Gain on Sale of Depreciable Real Estate Assets (YTD 2025) (Significant positive impact compared to $25K loss in YTD 2024)
• $46.277M — Interest Expense (Q3 2025) (Increased from $42.726M in Q3 2024)
• $11.926B — Total Assets (Sept 30, 2025) (Increased from $11.812B at Dec 31, 2024)
• 117,081,742 — Common Stock Shares Outstanding (Oct 27, 2025) (Reflects MAA's outstanding shares)
• 97.5% — MAA's Ownership of OP Units (Indicates MAA's control over the Operating Partnership)

Key Players & Entities

• Mid-America Apartments, L.P. (company) — registrant and operating partnership
• Mid-America Apartment Communities, Inc. (company) — general partner and S&P 500 REIT
• New York Stock Exchange (regulator) — exchange where MAA common stock is traded
• $102.044 million (dollar_amount) — net income for Q3 2025
• $118.230 million (dollar_amount) — net income for Q3 2024
• $399.325 million (dollar_amount) — net income for nine months ended September 30, 2025
• $370.502 million (dollar_amount) — net income for nine months ended September 30, 2024
• $71.842 million (dollar_amount) — gain on sale of depreciable real estate assets for nine months ended September 30, 2025
• $46.277 million (dollar_amount) — interest expense for Q3 2025
• $42.726 million (dollar_amount) — interest expense for Q3 2024

FAQ

Risk Factors

• Interest Rate Sensitivity [medium — market]: Rising interest rates increase the cost of debt financing, impacting net income. Interest expense rose to $46.277 million in Q3 2025 from $42.726 million in Q3 2024, reflecting this trend.
• Rising Operating Expenses [medium — operational]: Total property operating expenses increased to $372.714 million in Q3 2025 from $358.283 million in Q3 2024. This was driven by increases in operating expenses (excluding real estate taxes and insurance) and depreciation and amortization.
• Economic Downturn Impact [medium — market]: A general economic slowdown could lead to reduced demand for rental housing, potentially impacting occupancy rates and rental income. While Q3 revenues saw a slight increase, sustained economic weakness poses a risk.
• Dependence on Debt Financing [medium — financial]: The company utilizes debt to finance its operations and acquisitions. An increase in interest rates or a tightening of credit markets could make it more difficult and expensive to access capital.

Industry Context

The multifamily real estate sector is characterized by stable demand driven by demographic trends, but is sensitive to economic cycles and interest rate fluctuations. Competition exists from other large REITs and private operators, with a focus on amenities and location to attract and retain residents.

Regulatory Implications

As a publicly traded entity, MAALP is subject to SEC regulations and reporting requirements. Changes in real estate tax laws or environmental regulations could impact operating costs and property values.

What Investors Should Do

1. Monitor interest expense trends
2. Analyze operating expense drivers
3. Evaluate the impact of asset sales

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reporting period for the Q3 financial results, showing a decrease in net income but an increase in year-to-date net income.
• 2025-12-31: End of Fiscal Year 2024 — Reference point for total assets comparison, showing an increase to $11.926 billion as of September 30, 2025.

Glossary

Depreciable Real Estate Assets

Properties owned by the company that are subject to depreciation, a non-cash expense that reflects the wear and tear of an asset over time. (A significant gain on the sale of these assets ($71.842 million YTD 2025) positively impacted net income.)

Operating Partnership (OP) Units

Units representing ownership in the operating partnership of a Real Estate Investment Trust (REIT), often held by founders or acquired in property contributions. (MAA's ownership of 97.5% of OP units indicates strong control over the operating entity.)

Same-Store Revenue Growth

The increase in revenue generated from properties owned and operated by the company for the entirety of both comparative periods. (A key driver for the slight increase in overall rental revenue, indicating stable performance in existing assets.)

Year-Over-Year Comparison

Compared to the prior year, Mid-America Apartments, L.P. experienced a decrease in net income for the third quarter of 2025 ($102.044M vs. $118.230M), although year-to-date net income saw an increase ($399.325M vs. $370.502M), largely due to a significant gain on asset sales in the current year. While rental revenues showed a slight increase, total property operating expenses and interest expense have risen, putting pressure on margins. Total assets have grown, primarily due to increases in buildings and improvements.

Key Financial Figures

• $0.01 — lass October 27, 2025 Common Stock, $0.01 par value 117,081,742 MID-AMERICA A

Filing Documents

• maa-20250930.htm (10-Q) — 4334KB
• maa-ex31_1.htm (EX-31.1) — 21KB
• maa-ex31_2.htm (EX-31.2) — 23KB
• maa-ex31_3.htm (EX-31.3) — 21KB
• maa-ex31_4.htm (EX-31.4) — 18KB
• maa-ex32_1.htm (EX-32.1) — 13KB
• maa-ex32_2.htm (EX-32.2) — 12KB
• maa-ex32_3.htm (EX-32.3) — 14KB
• maa-ex32_4.htm (EX-32.4) — 12KB
• 0001193125-25-261163.txt ( ) — 17707KB
• maa-20250930.xsd (EX-101.SCH) — 1358KB
• maa-20250930_htm.xml (XML) — 4880KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements. 5 Mid-America Apartment Communities, Inc. Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024. 5 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024. 6 Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024. 7 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024. 8 Mid-America Apartments, L.P. Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024. 9 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024. 10 Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024. 11 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024. 12 Notes to Condensed Consolidated Financial Statements. 13 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 29 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 41 Item 4.

Controls and Procedures

Controls and Procedures. 41

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1. Legal Proceedings. 42 Item 1A. Risk Factors. 42 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 42 Item 3. Defaults Upon Senior Securities. 42 Item 4. Mine Safety Disclosures. 42 Item 5. Other Information. 43 Item 6. Exhibits. 44 Signatures. 45 2 Explanatory Note This report combines the Quarterly Reports on Form 10-Q for the quarter ended September 30, 2025 of Mid-America Apartment Communities, Inc., a Tennessee corporation, and Mid-America Apartments, L.P., a Tennessee limited partnership, of which Mid-America Apartment Communities, Inc. is the sole general partner. Mid-America Apartment Communities, Inc. and its 97.5% owned subsidiary, Mid-America Apartments, L.P., are both required to file quarterly reports under the Securities Exchange Act of 1934, as amended. Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to "MAA" refer only to Mid-America Apartment Communities, Inc., and not any of its consolidated subsidiaries. Unless the context otherwise requires, all references in this report to "we," "us," "our," or the "Company" refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, all references in this report to the "Operating Partnership" or "MAALP" refer to Mid-America Apartments, L.P. together with its consolidated subsidiaries. "Common stock" refers to the common stock of MAA, "preferred stock" refers to the preferred stock of MAA, and "shareholders" refers to the holders of shares of MAA's common stock or preferred stock, as applicable. The common units of limited partnership interest in the Operating Partnership are referred to as "OP Units" and the holders of the OP Units are referred to as "common unitholders." As of September 30, 2025, MAA owned 117,081,742 OP Units (97.5% o

– FINANC IAL INFORMATION

PART I – FINANC IAL INFORMATION

Financi al Statements

Item 1. Financi al Statements. Mid-America Apartment Communities, Inc. Condensed Consolida ted Balance Sheets (Unaudited) (Dollars in thousands, except per share data) September 30, 2025 December 31, 2024 Assets Real estate assets: Land $ 2,112,192 $ 2,096,912 Buildings and improvements and other 14,746,047 14,160,799 Development and capital improvements in progress 449,390 470,282 17,307,629 16,727,993 Less: Accumulated depreciation ( 5,787,596 ) ( 5,327,584 ) 11,520,033 11,400,409 Undeveloped land 73,359 73,359 Investment in real estate joint venture 41,870 41,650 Real estate assets, net 11,635,262 11,515,418 Cash and cash equivalents 32,249 43,018 Restricted cash 13,683 13,743 Other assets 245,391 232,426 Assets held for sale — 7,764 Total assets $ 11,926,585 $ 11,812,369 Liabilities and equity Liabilities: Unsecured notes payable, net $ 4,836,998 $ 4,620,690 Secured notes payable, net 360,361 360,267 Accrued expenses and other liabilities 714,924 683,748 Total liabilities 5,912,283 5,664,705 Redeemable common stock 20,223 22,230 Shareholders' equity: Preferred stock, $ 0.01 par value per share, 20,000,000 shares authorized; 8.50 % Series I Cumulative Redeemable Shares, liquidation preference $ 50.00 per share, 867,846 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 9 9 Common stock, $ 0.01 par value per share, 145,000,000 shares authorized; 117,081,742 and 116,883,421 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 1,168 1,166 Additional paid-in capital 7,435,697 7,417,453 Accumulated distributions in excess of net income ( 1,612,912 ) ( 1,469,557 ) Accumulated other comprehensive loss ( 5,692 ) ( 6,940 ) Total MAA shareholders' equity 5,818,270 5,942,131 Noncontrolling interests - OP U

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