Mid America Apartment Communities (MAA) risk factors, 2025 10-K

Risks Related to Our Real Estate Investments and Our Operations

1. 01Unfavorable market and economic conditions could adversely affect occupancy levels, rental revenues and the value of our properties
2. 02Failure to generate sufficient cash flow could limit our ability to make payments on our debt and to make distributions
3. 03the relative illiquidity of real estate investments
4. 04We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn or slowdown in the multifamily sector or other economic factors
5. 05Our operations are concentrated in the Southeast, Southwest and Mid-Atlantic regions of the U.S.; we are subject to general economic conditions in the regions in which we operate
6. 06Substantial competition may adversely affect our revenues and limit our acquisition and development opportunities
7. 07Failure to succeed in new markets may have adverse consequences on our performance
8. 08Environmental problems are possible and can be costly
9. 09that environmental matters will not have a material adverse effect on us and our ability to make payments on our debt and to make distributions
10. 10Our business and operations are subject to physical and transition risks related to climate change
11. 11Operations from new acquisitions, development projects and redevelopment activities may fail to perform as expected
12. 12Our implementation of long-standing succession planning could have adverse effects
13. 13We are subject to certain risks associated with selling apartment communities, which could limit our operational and financial flexibility
14. 14Development and construction risks could impact our profitability
15. 15Increasing real estate taxes, utilities and insurance premiums, as well as changes in the terms and conditions of our insurance policies, may negatively impact operating results
16. 16Short-term leases expose us to the effects of declining market rents, and we may be unable to renew leases or relet units as leases expire
17. 17We rely on information technology systems in our operations, and any breach or security failure of those systems could materially adversely affect our business, financial condition, results of operations and reputation
18. 18Compliance or failure to comply with laws and regulations could have an adverse effect on our operations and the values of our properties
19. 19Legal proceedings that we become involved in from time to time could adversely affect our business
20. 20Extreme weather or natural disasters may cause significant damage to our properties
21. 21We may incur losses that are not covered by our insurance
22. 22Our financial condition, results of operations and cash flows could be materially adversely affected by factors relating to disease outbreaks and other public health events
23. 23our ability to manage our business to the extent our management or other personnel are impacted in significant numbers and are not willing, available or allowed to conduct work
24. 24Acts of violence could decrease the value of our assets and could have an adverse effect on our business and results of operations

Risks Related to Our Indebtedness and Financing Activities

1. 25Our substantial indebtedness could adversely affect our financial condition and results of operations
2. 26As of December 31, 2024, the amount of our total debt was $5.0 billion. We may incur additional indebtedness in the future in connection with, among other things, our acquisition, development and operating activities
3. 27We may be unable to renew, repay or refinance our outstanding debt, which could negatively impact our financial condition and results of operations
4. 28Rising interest rates could adversely affect our results of operations and cash flows
5. 29We may incur additional debt in the future, which may adversely impact our financial condition
6. 30The restrictive terms of certain of our indebtedness may cause acceleration of debt payments
7. 31A downgrade in our credit ratings could have a material adverse effect on our business, financial condition and results of operations
8. 32Financing may not be available and could be dilutive

Risks Related to MAA’s Organization and Ownership of Its Stock

1. 33MAA’s ownership limit restricts the transferability of its capital stock
2. 34will consider the shares held in trust for its benefit; and
3. 35Future offerings of debt or equity securities, which may rank senior to MAA’s stock, may adversely affect the market price of MAA’s stock
4. 36The form, timing and amount of dividend distributions in future periods may vary and be impacted by economic and other considerations
5. 37Tennessee Anti-Takeover Statutes
6. 38Third-party expectations relating to environmental, social and governance factors may impose additional costs and expose us to new risks
7. 39Market interest rates may have an adverse effect on the market value of MAA’s common stock
8. 40Changes in market conditions or a failure to meet the market’s expectations with regard to our results of operations and cash distributions could adversely affect the market price of MAA’s common stock
9. 41general market conditions, including factors unrelated to our performance

Risks Related to the Operating Partnership’s Organization and Ownership of OP Units

1. 42The Operating Partnership’s existing unitholders have limited approval rights, which may prevent the Operating Partnership’s sole general partner, MAA, from completing a change of control transaction that may be in the best interests of all unitholders of the Operating Partnership and all shareholders of MAA
2. 43In certain circumstances, certain of the Operating Partnership’s unitholders must approve the Operating Partnership’s sale of certain properties contributed by the unitholders
3. 44MAA, its officers and directors have substantial influence over the Operating Partnership’s affairs
4. 45Insufficient cash flow from operations or a decline in the market price of MAA’s common stock may reduce the amount of cash available to the Operating Partnership to meet its obligations

Risks Related to Tax Laws

1. 46Failure to qualify as a REIT would cause us to be taxed as a corporation, which would significantly reduce funds available for distribution to shareholders
2. 47The Operating Partnership may fail to be treated as a partnership for federal income tax purposes
3. 48Certain dispositions of property by us may generate prohibited transaction income, resulting in a 100% penalty tax on any gain attributable to the disposition
4. 49Legislative or regulatory income tax changes related to REITs could materially and adversely affect us