Mid-America Apartment Communities Q3 2026: Core FFO down 2.8% to $2.10 as new-lease rents fell 6%

Mid-America Apartment Communities (MAA) owns about 105,100 apartment units, mostly in Sun Belt cities such as Atlanta, Dallas, Orlando, Tampa and Charlotte. In Q3 2026 its rental revenue rose 1.0% to $560.1 million, but every earnings measure fell. GAAP net income for common shareholders dropped 15.8% to $83.1 million, or $0.72 per diluted share against $0.84. Core FFO per share, the figure apartment REIT investors watch most, fell 2.8% to $2.10 from $2.16. That was exactly the midpoint of the $2.04–$2.16 range MAA gave in July. The year as a whole is going worse than planned: new-resident rents fell faster than in Q2, interest costs kept climbing, and management trimmed full-year Core FFO guidance to $8.49 from $8.53.

These results come from MAA's earnings release and supplemental data (Form 8-K, Exhibits 99.1 and 99.2, filed October 28, 2026). The full 10-Q, which has the detailed management commentary (MD&A), had not been filed yet; the release says it is expected on or about October 29.

Key metrics

*MAA's income statement has no "operating income" line. As in our Q2 report, we computed it as revenue minus property operating expenses (including depreciation), property management expenses and general & administrative costs: $139.5M vs. $151.0M. The prior-year blended lease figure is implied by the release's statement that Q3 2026 was 10 basis points better year over year.

Some definitions, since the rest of the report relies on them. FFO (funds from operations) is net income with real-estate depreciation added back and property-sale gains taken out. Accounting depreciation assumes a building loses value every year, which is often not what happens to apartment buildings, so FFO is closer to the recurring earnings from renting apartments. Core FFO also removes one-off items such as legal settlements and investment gains. Same-store figures cover only the 96,562 units MAA has owned and run at stable occupancy since at least the start of last year, so they compare like with like. NOI (net operating income) is rent and fees minus the cost of running the buildings (staff, repairs, property taxes, insurance, utilities), before interest and corporate overhead.

The existing buildings: fewer residents, slightly lower rent, higher costs

The same-store portfolio produced about 94% of total NOI this quarter, and it shrank on both lines:

• Revenue −0.4% ($519.1M vs. $521.0M). Average effective rent per unit (rent after move-in concessions such as a free month) slipped 0.1% to $1,691, and average occupancy fell to 95.3% from 95.6%. In Q2 occupancy was down just 0.1 points year over year, so this quarter the weakness came from empty units as well as price. The CEO says MAA "built occupancy through the quarter," which means it started the quarter lower than it wanted.
• Operating expenses +2.0% ($203.0M vs. $199.1M), faster than Q2's 0.8%. The supplemental breaks this down: marketing +14.3% (+$1.0M), utilities +5.3% (+$2.0M), building repair and maintenance +4.8% (+$1.4M) and office operations +8.9% (+$0.7M). These were partly offset by insurance −10.0% (−$0.8M) and property taxes −0.5%. Higher marketing is what a landlord spends when it is trying to fill units.
• NOI −1.8%, worse than Q2's −1.0%.

Growth came only from newer buildings. Revenue from non-same-store and lease-up communities rose to $33.8 million from $26.6 million (+27%). MAA finished leasing up two communities in Phoenix and Tampa during the quarter. Its remaining four lease-up communities (1,166 units) were 77.6% occupied at quarter-end. Eight projects (2,236 units, $760 million total cost, $364 million still to spend) are under construction. Total NOI was therefore flat: $337.9M vs. $338.3M.

New leases vs. renewals

The two kinds of resident are moving in opposite directions. Existing residents renewed at 5.3% more, 80 basis points (0.8 percentage points) better than a year ago. Turnover stayed at a historically low 39.6%, and only 10.1% of move-outs were people leaving to buy a house, a record low. New residents, though, were signing at 6.0% below the previous lease. Newly built apartment buildings in MAA's markets are still offering concessions to fill units. In July management expected new-lease pricing to keep improving. Instead it got worse in Q3, and the CEO says that improvement arrived "about a quarter later than we expected."

October is the first sign of it. MAA says October new-lease pricing improved on September, "counter to the normal seasonal pattern." It was the year's first year-over-year improvement in new-lease pricing, and October blended pricing was more than 100 basis points better than a year earlier. The release doesn't give the October percentages.

Debt is doing most of the damage

Core FFO fell $9.0 million ($249.9M vs. $258.9M). Interest expense rose $8.3 million to $54.6 million, so it explains almost all of that drop. Total debt has risen to $5.84 billion from $5.41 billion at the start of the year, mostly to fund development: MAA spent about $84 million on construction this quarter and borrowed another $250 million on its new delayed-draw term loan ($350 million now drawn). Net debt to adjusted EBITDAre (a REIT version of debt divided by a year's cash earnings) rose to 4.7x, from 4.5x in June and 4.3x at year-end.

The debt is also more exposed to interest rates. Floating-rate debt is now 20.7% of the total ($1.21 billion), against 13.4% in June. The CEO names "higher interest rates" as one of the two reasons for the lower forecast. The credit ratings are unchanged (A- from S&P and Fitch, A3 from Moody's, all stable), and $660.7 million of cash and revolver capacity is available.

What the headline numbers hide

• The fall in GAAP EPS (−14%) is bigger than the fall in Core FFO (−2.8%), and it is not caused by one-offs. Depreciation rose $10.1 million as new buildings came on line, and interest rose $8.3 million. Neither year had a property-sale gain in Q3. Core FFO's non-core adjustments were small: they lowered this quarter's FFO by $0.5 million net (mostly a $1.0 million legal recovery), while a year ago they added back $2.4 million net (an $8.9 million legal settlement charge, partly offset by $4.4 million of investment gains and a $2.0 million derivative gain). Taking these out makes the year-over-year decline slightly larger, not smaller.
• Buybacks slightly softened the per-share decline. MAA bought back 0.4 million shares for $50.0 million at an average $126.72 (the stock closed the quarter at $117.74). Diluted shares fell 1.0% year over year. As a result, total Core FFO fell 3.5% while Core FFO per share fell 2.8%. The company also sold 0.3 million new shares through a forward sale at $130.34 to raise the $43.4 million it used to redeem its 8.50% preferred stock on October 1. Retiring that preferred removes about $0.9 million of dividends a quarter.
• Dividend coverage is thinner. The quarterly dividend is $1.53, up from $1.515, while Core AFFO (Core FFO minus routine capital spending, the closest measure to cash available for dividends) fell to $1.79. The dividend now uses 85.5% of Core AFFO, against 83.7% a year ago. Spending on redevelopment, which isn't deducted in Core AFFO, nearly doubled to $30.0 million from $16.3 million. After all capital spending, funds available for distribution were $143.2 million, less than the $182.0 million paid in dividends and distributions. The difference has to come from borrowing or property sales.
• No cash flow statement yet. The release has no cash flow statement, so we can't yet compare operating cash flow with earnings. The 10-Q will have it.

On balance the quarter is clean: GAAP profit and Core FFO both fell for real reasons (weaker same-store rents and occupancy, more interest and depreciation), one-offs in either year were small, and buybacks made only a 1-point difference per share.

Takeaway: MAA hit its Q3 target, but only because cost control and newer buildings made up for weakness in the existing portfolio. Same-store NOI fell 1.8%, new-lease rents fell 6.0%, and an $8.3 million rise in interest expense wiped out almost all of the gain from new buildings. For the stock to look better, the October improvement in new-lease pricing has to last through winter, which is usually the weakest leasing season.

Did last time's read hold up?

Partly. Our Q2 report said the Q3 report would be "the first test of whether the second-half improvement is starting." It said the full-year $8.53 midpoint needed Q4 Core FFO "near $2.22" if Q3 landed at $2.10. Q3 did land at $2.10, but management has now guided Q4 to $2.12–$2.24 ($2.18 midpoint) and cut the full year to $8.49. The risks we flagged did happen: interest expense rose again (+$1.5 million from Q2), and new-lease pricing went backward in Q3 instead of continuing to improve. Our view that renewal strength and low turnover would support results also held: renewals were +5.3% and turnover stayed at 39.6%.

Guidance and outlook

The pattern from Q2 repeats. Revenue expectations fell again (by 35 basis points at the midpoint), and lower expected costs (−35 basis points) made up part of it. For Q4, MAA guides Core FFO to $2.12–$2.24. Its bridge from $2.10 to $2.18 is +$0.09 from same-store NOI, +$0.02 from newer communities and +$0.01 from lower overhead, minus $0.04 from interest. GAAP EPS guidance fell more (−10% at the midpoint) than Core FFO. MAA doesn't forecast EPS by quarter, and the release doesn't break the EPS cut down. Gains on property sales, which depend on timing, are part of it: the guidance includes $0.52 a share of sale gains for the year.

Our read: a $0.08 rise from Q3 to Q4 depends mostly on same-store NOI, and that NOI has been falling year over year all year. For that to happen, the revenue side has to turn, and so far the evidence for that is one month of better new-lease pricing in October. The interest headwind won't go away soon, because development spending continues ($300–$340 million for the year) and a fifth of the debt now floats. Heading into the Q4 report (expected early February), watch three things: whether new-lease pricing stays better than a year ago through the winter, whether same-store occupancy gets back to 95.5% or higher, and whether net debt to EBITDAre stops rising from 4.7x.