Mid-America Apartment Communities, Inc. (MAA) Earnings Call Transcript

Welcome to the Mid-America Apartment Communities, Inc. 2021 Annual Meeting of Shareholders. My name is Leslie Wolfgang, and I will be serving as the secretary for today's meeting. I will review several matters regarding the functioning of today's meeting, and then we'll turn the meeting over to Eric Bolton, our CEO and Chairman of the Board of Directors. We have appointed Ken Franke from the Carideo Group as the inspector of elections for today's meeting, and he has taken his oath to serve in that capacity. Also joining the meeting today is David Schlitt with Ernst & Young LLP, our independent registered public accounting firm. Mr. Schlitt will be able to respond to questions germane to the role of Ernst & Young LLP during our question-and-answer session. If you join today's meeting as a shareholder, you can submit a question to Mr. Bolton or Ernst & Young LLP [Operator Instructions]. In accordance with the rules of conduct for today's meeting, we will only respond to questions relevant to the proposals being considered. If time does not allow for all questions to be answered during the meeting, we will address unanswered germane questions on our corporate website. To view all of the rules of conduct in effect for today's meeting, you can click on the Materials button in the lower right corner of the console screen. There, you will also find a copy of the affidavit of distribution confirming that notice of this meeting was given. And shareholders can access the registered shareholder list by using the same control number used to log into the meeting. As noted in the notice and proxy statement previously distributed, the record date for voting at this year's annual shareholder meeting was the close of business on March 12, 2021. A copy of both the notice and the affidavit of distribution will be incorporated into the minutes of the meeting. The registered shareholder list shows that holders of 114,407,878 shares of common stock at the company are entitled to vote at this meeting. We are informed by Mr. Franke that there are represented in person or by proxy 105,120,602 shares of common stock or approximately 91.9% of all of the shares entitled to vote at the meeting. Based upon the percentage of the total common shares of the company held by holders of record in attendance at the meeting, either in person or by proxy, a quorum is present. This meeting is now duly convened for the purposes of transacting the business properly brought before it. If you previously voted through any of the means outlined in the proxy materials for this meeting, your shares will be voted accordingly. If you want to vote during the meeting or if you want to change your previously submitted vote, you can do so by clicking on the Voting button in the lower right corner of the console screen. I will now turn the floor over to Eric Bolton, CEO and Chairman of the Board of Directors, to conduct the formal business of the meeting.

Thank you, Leslie, and good afternoon, everyone. On behalf of the entire Board and my fellow associates, I would like to thank you for joining us for this year's annual shareholder meeting. Before I present the proposals for a vote, I'd like to take this opportunity to recognize Russell R. French, who is retiring from our Board of Directors today. Rusty has contributed a combined 28 years of service to MAA and previously to Post Properties, Inc. prior to our merger. His steadfast leadership and representation of the long-term interest of our shareholders helped shape the company we are today. I'm thankful for the guidance and oversight he has provided. And on behalf of my fellow associates and Board members, we'd like to express our sincere appreciation and gratitude for his contributions and exemplary service. I will now review the 3 proposals, which have been previously presented for consideration at today's meeting. The first proposal is the election of 12 directors to serve until the 2022 Annual Meeting of Shareholders and until their successors have been duly elected and qualified. The Board of Directors recommends a vote for each of the following director nominees: H. Eric Bolton, Jr., Alan B. Graf, Jr., Toni Jennings, Edith Kelly-Green, James K. Lowder, Tom H. Lowder, Monica McGurk, Claude B. Nielsen, Philip W. Norwood, W. Reid Sanders, Gary Shorb and David P. Stockert. The second proposal is an advisory vote to approve the compensation of our named executive officers as disclosed in the proxy statement. The Board of Directors recommends a vote for this advisory vote. The third proposal is the ratification of Ernst & Young LLP to serve as our independent registered public accounting firm for 2021. On behalf of the Audit Committee, our Board of Directors recommends a vote for the ratification of Ernst & Young LLP. I now declare the polls open for each matter to be voted on today, May 18, 2021. As a reminder, any shareholder wishing to vote or change their previously submitted vote may do so by clicking on the Voting button in the lower right corner of the console screen. [Voting]

While we allow time for voting to complete, I'll ask Rob to present any meeting-related questions, which have been submitted by shareholders.

Thank you, Eric. We have one question. How is the 8-story development project in Orlando progressing given the increase in concrete and materials cost? And is this section of Orlando still a hot market?

Thank you, Rob. Thanks for the question. Broadly, our project in Orlando is doing quite well. Construction is nearing completion. We continue to be on budget. We have seen cost increases occur in a number of areas, particularly in the area of lumber, but this -- the structure of this particular development in downtown Orlando involves little in the way of lumber. It's mostly concrete, actually prefab concrete. So we've been fortunate we've not really seen any cost pressures here. We are underway with leasing. Leasing is going very well. The Orlando market has shown significant recovery over the last 2 or 3 months as the theme parks begin to reopen. So we're very optimistic about Orlando broadly and in particular, this location in downtown Orlando is off to a roaring start. We're very encouraged with the trends that we're seeing so far