MAA cuts FFO guidance by 4 cents as Sun Belt rents lag

MAA, a Memphis apartment REIT, cut the midpoint of its full-year core FFO guidance by four cents to $8.49 a diluted share after third-quarter revenue fell 0.4% and net operating income fell 1.8%.

MAA also lowered the midpoint of its full-year revenue-growth forecast by 35 basis points to -0.25%, Multifamily Dive reported from the release and Thursday’s earnings call. The cuts follow a second-quarter round that reduced revenue, effective rent and occupancy guidance while stronger expense trends let MAA hold its core FFO outlook.

Advisors underwriting Sun Belt apartment operators should model elevated marketing costs persisting until new supply is absorbed, which CFO Clay Holder expects in the second half of 2027. Underwriting that assumes those costs normalize sooner will be too optimistic.

Fundamentals remain similar to the second quarter, with excess supply still a challenge, according to Tim Argo, MAA’s executive vice president and chief strategy and analysis officer. Renters are shopping around and taking longer to sign, and marketing costs have stayed high as a result, Holder said.

October brought one counter-seasonal sign: new lease pricing improved from September and renewals were strong, Brad Hill, MAA’s president and chief executive officer, said on the call.

Hill said company leaders had expected less uncertainty and stronger customer sentiment in 2026, the two forces he tied to new lease pricing, and "that didn’t materialize like we had expected."

MAA is pairing expense control with investment. It is spending on technology to support more centralization and specialization and improving assets through redevelopment, repositioning and property-wide Wi-Fi, Hill said. Holder cited relatively low personnel costs as the company upgrades its operations platform. Hill expects October’s leasing momentum to build into the spring leasing season.