Good morning, ladies and gentlemen, and thank you for participating in the MAA First Quarter 2012 (sic) [Fourth Quarter 2011] Earnings Conference Call. The company will first share its prepared comments, followed by a question-and-answer session. At this time, we would like to turn the call over to Leslie Wolfgang, Director of Investor Relations. Ms. Wolfgang, you may begin.

Thank you, Amy, and good morning, everyone. This is Leslie Wolfgang, Director of Investor Relations for MAA. With me this morning are Eric Bolton, our CEO; Al Campbell, our CFO; and Tom Grimes, our COO. Before we begin with our prepared comments, I want to point out that as part of the discussion, company management will be making forward-looking statements. Actual results may differ materially from our projections. We encourage you to refer to the Safe Harbor language included in yesterday's press release and our 34-Act filings with the SEC, which describe risk factors that may impact future results. These reports, along with a copy of today's prepared comments and an audio copy of this morning's call, will be available on our website. I'll now turn the call over to Eric.

Thanks, Leslie and, thanks, everyone for joining our call this morning. Our fourth quarter and our full year 2011 FFO per share results were the strongest performances in our company's 18-year history, and we expect continued positive momentum this year with growth in same-store NOI exceeding the results from 2011. At the mid-point of our guidance, we expect to capture over 9% growth in FFO per share this year and deliver another record performance for the company. The demand for apartment housing is likely to remain strong across our markets as the factors driving this demand are going to continue for some time. Employment trends are improving and the outlook for household formation in our Sunbelt markets are forecast to outpace the national trends. Resident turnover remains low, and we don't believe single-family housing, either as a for sale product or a rental product, is likely to have a significant impact on our business for the next couple of years. While there is a growing effort to get new multi-family development going in a number of markets, permitting activity and the forecast that we review suggest that new supply trends in our markets are very manageable, relative to growing demand and we expect continued positive absorption. The develop for balance sheets and sponsors that are able to secure construction financing continue to primarily focus on the coastal market and inner core submarkets that aren't likely to have a meaningful impact on most of our locations. Compared to historic norms, the supply outlook in our Sunbelt markets is still running well below historic norms. So overall, we expect 2012 to be a year of continued strong performance and expect that both same-store NOI and FFO per share, will surpass 2011's record performance. Positive year-over-year leasing trends continue during the fourth quarter…

Okay. Thank you, Eric, and good morning, everyone. I'll provide a few comments on earnings performance for the fourth quarter, as well as a few highlights regarding investing and financing activities. FFO for the quarter was $43.1 million or a $1.07 per share, which was a $0.01 ahead of the mid-point of our guidance for the quarter. And earnings performance was driven by same-store portfolio, which produced 4.7% NOI growth over the prior year based on a 4.9% increase in average effective rents. Physical occupancy ended the quarter at a strong 95.2%, 60 basis points below the prior year. Total revenues grew 3.6% during the quarter, while operating expenses grew 2%. Resident turnover remained low at 55.9% at the end of the quarter, with only 17% of move-outs during the quarter related to home buying compared to the historical average of about 24%. Operating performance met expectations for the quarter, while favorability and interest expense produced really the majority of the additional $0.01 per share compared to our forecast. We do have 3 nonrecurring items in the fourth quarter, a gain on the sale of the sale of non-real asset, a loss on debt extinguishment and a charge from fully severance costs, which all essentially net as to have no significant impact on the fourth quarter. Our strong acquisition pace continued during the quarter, as we've purchased 3 new properties for a total of $101 million bringing the full year investment volume to $425 million, including the $25 million of property purchased on behalf of the joint venture and development funding of about $38 million during the year. All 3 property purchased during the quarter were stabilized on acquisition and represented the average cap rate of about 6% on the first years of projected cash flows. During the fourth quarter,…

[Operator Instructions] And our first question comes from David Toti of Cantor Fitzgerald.

Two questions. Eric, the first one is for you and it has to do with performance divergence between revenues in the Large and Secondary Markets. Are you seeing that gap widen or contract at all? It seems from the last couple of quarters that the gap is increasing from what we're seeing. Could you give us a little bit of color in terms of that trajectory?

Well I do think that the -- we're going to -- as noted, the large segment -- the Large Market segment portfolio revenue growth surpassed the Secondary segment this quarter. And we have been thinking for some time that was going to occur since recovery cycle got underway. And I expect that we will continue to see that relationship with the Large group outperforming the Secondary Market. However, I don't think the gap is going to continue to gap out, if you will, and get bigger. I think that what we're seeing -- impact, our Large Market segment is obviously the Houston market, particularly, Dallas and -- or the Texas markets. Dallas and Houston have been very good. I think that what we're going to see in the secondary market, the Little Rock, the Charleston, Chattanooga, Savannah, some of these markets are actually showing some very good performance. And we think, based on what we're seeing, particularly on the supply side, it's the bigger markets that getting some of those supply pressures. They're starting to show evidence of developers that are gearing up, and these secondary markets continue to show very little in the way of permitting activity. So with -- what we think, it's going to be continued good job growth and very little on the way of supply pressure, we think these Secondary Markets are actually going to be very resilient during the sub-cycle as compared to Large segment. I don't think the gap was going to be that great.

Okay, that's very helpful. And then Al, a question for you. Can you just give us an update in terms of what progress you're making towards the fully -- the full rating, the full unsecured rating? What metrics are you really aiming for? And how close are you to those? Dave, that's a great question. We've talked about it for long a time. If you look at our balance sheet, our metrics, we feel like that we are very good shape and compared very favorably both to what rating industries typically require and to many of our rater peers already. With the one exception that the area of work that we knew we had was in the unencumbered asset pool. And just giving idea what they typically focus on, you're talking about fixed charge coverage. I think, typically, they want companies to be greater than 2x, where we ended the quarter 3.8x. Leverage, I think, looking at gross assets ranging, for company like ours, below 50%. We're below that and we're 46% at the end of the quarter, and I think debt to EBITDA is typically another one. And company -- multi-family company, I think, something less than 8% is what they look for. Typically now, we're at 7.5%. So obviously, the major metrics, we stack up very well. And on the encumbered portfolio, we made a lot of progress this year. We began the year with less than 15% unencumbered and we ended the year with more than 30%. And so we expect the end of 2012 with more than 40% encumbered putting us, what we think, into be a really good position. And so we plan on having some pretty good conversations this year with agencies and to make some good progress, Dave.

Our next question comes from Swaroop Yalla of Morgan Stanley.

I know we have discussed this in the past calls, but I just wanted to, once again ask about what you're seeing for the total move-outs to homes, both buying and sort of renting single-family homes? And how that probably compares with the trough you saw in the cycle, also, just seeing this elevated in certain markets?

Okay. Swaroop, it's Tom, and I'll take that. On the home buying side, I would say, it doesn't -- it compares about the same in terms of a trough, if you will, as we're still in the bottom of the trough. So it's been kind of flat. It's 17% of total move-outs for us on buying house. Home buying or home renting over the time has increased. It used to be about 3% of our total move-outs, if you go back to 2007. It's moved up to 5% of total move-outs now. It's moved up but it hasn't been a material impact. And if you look at -- our highest markets, if you will, would be where you would expect them to be in a place like Jacksonville, and that's moved from -- it used to be about 5% and now it's about 8%. So it doesn't -- neither of those continue -- neither of those appear to be short-term threats.

Swaroop, I would just add that I know a lot -- I get to asked a lot about the threat of single-family product, either as for sale or rental product. And we just continue to see, as Tom outlined, we just continue to see low evidence that, that single-family product is a meaningful threat this up cycle that we are in. And despite some of the efforts underway to get investors to come in and start buying up some of these vacant inventory and look at ways of trying to start renting out this single-family product. We discontinue for the renter, that profile that we cater to and the product that we offer. We don't think that the single-family product is going to become a meaningful competitor to us. People want the lifestyle of the communities that we offer and when you look at the demographics of -- I think what happens is a lot the people that lost homes become renters of homes. And I think for the age bracket 20 to 35 that we really tend to focus on, I just don't think the single-family product is going to be a meaningful competing product to -- on a rental basis. And then for sale basis, as long as the mortgage financing stays disciplined and there's no clear real clear evidence that single-family house prices are starting to rapidly move up, I think that people are going to be reluctant to pull the trigger and go out and start buying houses in a big way for quite some time.

That's helpful, Eric. Just attending on to expenses. Last year, I think your guidance was also for about a similar kind of expense growth, 3.5% to 4.5%. But you came in well below that. I'm wondering what was the drivers for that? And if we could see something which is favorable this year as well?

Swaroop, this is Al. I can give you some color on that. We did have something similar in last year. What happened was, in the latter part -- latter portions of the year, we did have some favorable set appeals from our real estate tax, that came in, helped us in the third and even in the fourth quarter. And I think our utility costs were a little more favorable in the fourth quarter than we're expecting. So I think moving towards the end of the year, we had -- we were at the bottom in our forecast of our expense range that we put out at the beginning of the year. In the fourth quarter, we had some of those favorable bonds that pushes really excellent below the bottom of that range, I think, for the fourth quarter performance, full year performance. So in terms of looking at next year, the pressure items are up fairly similar. We talked about real estate tax -- really 2 areas when you look at that, real estate taxes and utilities. And utilities I'll add the cable program in there because that's considered utility. And those 2 together are about 50% of our expense rise this year. For us, in taxes, the pressure is going to come from 2 main states, I mean, Texas and Florida. And incomes are rising. They tend to be aggressive in those areas and so we do expect some pressure there. Certainly, we're going to work very hard to challenge that, and hope to see some favorability there. But that's what we believe will be at this point. In utilities, we put in what we think best for water cost and cable contracts, and we think that's the right number right now.

Swaroop, Again just to recap what Al said. I mean, over 50% of our growth in the expenses in 2012 is associated with just those 2 line items, utilities and taxes. And sitting here today, I mean, we don't know. We won't know for sure what's going to happen on taxes until we get towards the third and early fourth quarter. But given what's going on in such a positive way in terms of apartment values and apartment fundamentals, we have a forecast. But for both utilities and taxes of 4.5% growth in 2012 of over 2011, and we think that's reasonable to go out on that basis and expect that kind of increase in our guidance. I hope we'll do better. But -- and we're going to certainly do all we can to make sure we do better. But that's our best guess at this point.

Our next question comes from Robin (sic) [Robert] Stevenson of Macquarie.

Eric, you talked about 5.7% on renewals in the fourth quarter. What is that in, thus far, from what you sent out for the first quarter, for the first couple of months of the year?

Well, I can tell you that our renewal pricing in January is up 6.7%. And the renewals that we've done so far in February and March are running higher than that.

Okay. So I mean, the momentum really does -- it looks like it's even picking up or is it just still relatively low amount of the leases in February and March and that have comeback at this point?

It's still a little early for March. I mean, we're pretty well into February, obviously, right now. But the point is the renewal pricing that we got in -- of the fourth quarter year-over-year was up 5.7%. And what we're seeing in January and February and March, thus far, is ahead of that.

Okay. And then, when you take a look at your main markets, I mean, what -- which ones are you expecting the most growth out of in 2012, one or two markets? And then one, what are 1 or 2 markets that are sort of on your watch list that you hope does better than what you think, but are going to wind up if rank -- force rank them, would sort of be at the bottom of the rank?

Sure. The ones that have been going is where job growth is just sort of caught. So Dallas, Houston and Austin, Raleigh, all we feel we're very encouraged by the trends that those are showing up in this quarter's numbers and we expect them to continue. On the ones that we're optimistic about, but not quite as optimistic, are places like Atlanta and Jacksonville, where we've seen some recovery, we've seen some nice rent growth beginning there. But the job creation has -- the job creation engines in there's just have been a little slower than the Texas or North Carolina stop. So those would be our little slower community -- or excuse me, markets, if you will, but those are places the developers are staying out of right now too. So it just takes a little bit to get going in both our forecast for about a 1.5% job growth next year.

Okay. And then, the sort of last question. When you think about the transaction markets across all the markets that you're actively involved in today, I mean, which markets do you feel that you could find ample amount of similar products as your own at north of the 6% cap rate today after CapEx?

Well, yes, I mean we continue to look in a lot of the existing markets. So we're in Dallas and Austin is getting a little pricey, to be honest with you. It would be probably hard to find the quality there that we'd like at that kind of cap rate pricing. But we're looking at some opportunities currently in -- along the mid-Atlantic area in Virginia, where we've been doing more and we've got some things there tee'd up that we're hopeful we'll get on the contract that would be in that price range. And then we continue to be very much committed to -- continue to look for opportunities in some of the Secondary Market segment, Charleston, Savannah. Most of -- all these Secondary Markets, we feel like that somewhere between 5.75% to 6.25% is still pretty achievable. Having said that, I will tell you that we are seeing more capital coming into these markets. So I mean, I think the pricing environment, even in the Secondary Markets, is starting to get a little bit more faulty than it was last year. And I think that the folks are just getting tired of paying forecast of some of this coastal markets and I think they're starting to come into some of these Sunbelt markets and in some Secondary Markets. And so for us, it continues to be a challenge to use our relationships, use our market knowledge and use our execution capability in terms of how we perform for sellers to capture the deals that we feel good about. At pricing, we feel good about and hopefully, get the growth that we've outlined in our guidance for the year.

Okay. And then just one quick one for Al. The additional disclosure on the same-store with bulk-cable netted, it goes away next quarter, right?

I'm happy to announce that's going to be going.

Our next question comes from Rich Anderson of BMO Capital Market.

I'm going to ask the stupid question first. Why is your fixed charge coverage ratio greater than your interest coverage ratio?

I guess you're -- debt service coverage ratio, I think, is what you're talking about because it includes amortization of that debt service. For us -- typically, it's not that way. But for us, most of our debt is not amortizing. I mean, so when you look at our fixed charge coverage, we have no preferred and so you can walk through that.

Got it. Eric, you talked about supply enough being issue for 2012. And -- but it didn't really get the sense that you were speaking about out years, I know you're not providing guidance for '13 and '14. But what would you say, you guys are doing assuming supply will come online sooner in your markets versus some of the other northern markets. Do you guys have a plan at work now to be prepared for what will inevitably be some supply pressure in your markets?

Well, what I would say is the best thing we can do to prepare for 2014 is not build up a big development pipeline right now ourselves. So to be honest with you, it's probably the most important thing that we're doing right now is we continue to be very tentative about committing to new development ourselves. I mentioned that Charleston opportunity that we're going to get going on this next year. We don't have anything else teed up at the moment and in the way of new development, and I would be very cautious about doing so at this point. Having said that, the other thing, frankly, that we're looking to do to prepare for that environment is being sure that we're getting our balance sheet and our capacity to grow as strong as we can get it. Because in one sense, as an owner of a bunch of assets, you always worry about new development coming in, in a bigger way. But as someone who has a balance sheet and a platform that we'd like to see continue to grow in a healthy way, I think that it provides opportunity and that's our whole model, is primarily being an opportunistic or value investor and looking for opportunity as the merchant builders get cranked up and looking for opportunity to put capital out on a real advantageous basis. And so a little supply and more supply probably creates more opportunity for us in that regard. And the beyond that, of course, is just making sure that we have our operating platform, as finally tuned as we can. And be sure that as we face competition from lease-up properties, that we've got our people and our processes teed up, so that we can be very competitive in those environments. So we think that -- we know how to do this. We've been doing this in this region for 18 years, and so we know how to operate and compete against supply pressure when it does come in some of our markets.

What's the reason to you even do -- or what does one new development really get you? I mean, if you're saying that you're hesitant about new development, why even better with one? Is it really going to move the needle?

Well, it's like any other, why buy one property? I mean, it's -- we found a very unique situation in a sub market of Charleston Mount Pleasant that's got great downtown access. It's a great area. We're going to invest $32 million. It's $118,000 -- that works out about $118,000 a unit. You put a 6 cap on that, which I know, this submarket in Charleston would command for this quality of product. You put a 6 cap on the first year stabilization and our investment basis of $118,000 a unit goes to $154,000 a unit. So we see it as a tremendous investment opportunity for $32 million worth of our shareholder capital. So it's the same basis that compels us to go out and buy properties. This is -- and important to note, we're not staffing up. We're not adding $1 of overhead to do this. And I think that that's the model that we continue to believe in. Although, I wouldn't -- I'd be a little bit reluctant to do right now. It would take a very unique situation that we could underwrite very comfortably to commit to delivering a bunch of units in 2014. I just -- I think that if we found an opportunity that really is very compelling like this deal in Charleston, we might do one. But it would have to underwrite very, very conservatively.

And then on the investment grade rating process, I guess, it seems to me that the conversation about Fannie and Freddie exiting the multi-family lending business is kind of like off the table now. Would you say you are -- when you got started, that was the primary focus, to kind of become less tethered to Fannie and Freddie, if I remember it correctly. Would you say your motivation to get investment grade rated is even stronger today? Despite the fact that all signs are pointing at Fannie and Freddie maintaining a very significant role in the multi-family business?

Rich, this is Al. I would say it's the same. Because our goal all along has really been about balance in our capital structure. And we love our relationships with both Fannie and Freddie. They're very good contracts and they will likely be part of our business for a long time. And I agree with you, they sort of -- some of the risks are going away and their business are some of the thought processes. So I would say, what we're doing right now is aggressively trying to get into a balanced position, where we'll get our investment grade at one point in time, have about 1/2 of our debts secured, 1/2 our debts unsecured. And we would expect both Fannie and Freddie, if they're still a strong part of business, be a part of that secured portion. Along with other people, life companies, commercial banks, some secured and then certainly on unsecured public bonds and larger credit facilities and those things. So the goal for us was to have multiple sources instead of being so focused on 1 or 2 sources of loan, when we think that's obviously the best choice for our company and to provide the growth because we're looking to put up some significant growth in the next few year, and that's the best way to support that.

So when I look at the metrics that you're targeting for the end of the year, I mean, it looks pretty good in terms of having a deeper conversation with the other rating agencies. Would you say though that you might be held to a higher standard because of the nature of your markets? Do you think that, that plays a role and that you probably have a bigger hurdle to jump than some of your other peers?

I would say almost the opposite, Rich. If you look at the stability of our cash flow over the last 5 to 7 years, it's one of the more stable cash flows in the sector. And so we don't think that we need to apologize to anybody for our markets. We think that they produce the kind of performance that matches up very well for either a creditor or for a shareholder looking to have a secure, steady growing dividend.

Our next question comes from Paula Poskon of Robert W. Baird.

Eric, what's your strategy for increasing the disposition volume? Is it a function of the spread in cap rates between asset quality? Is it the assets themselves, the age CapEx required? Is it the market or submarket dynamics? Is there a particular theme in the strategy there and how you're identifying assets? And why now?

Well, what I would say is that, first and foremost, our objective is to ensure that our portfolio of investments are generating the best margin, overall margin of performance that we can get -- operating margin that we can get. And we think that one of the things in this region, the country that's important in terms of driving continued improvement in your operating margin is continuing to cycle out of investments that, either due to CapEx requirements or due to changing neighborhood issues or whatever the issue may be, that would suggest that revenue growth and our ultimate overall, cash flow results, margins are going to have peaked out and that we could redeploy that capital into something more attractive. And so the objective is just to continue to ensure that 5 years from now, we've got a portfolio of investments that is operating with the highest operating margin we can capture in order to be where we want to be 5 years from now. We have to take actions today. And having said that, we've gotten to a point now with our -- as some of the metrics that Al mentioned in terms of balance sheet coverage ratios and earnings coverage and dividend coverage, that frankly, we can afford to be a little bit more active in our recycling effort than we've been in the past. And I think that, obviously, the market is pretty good right now. There's a lot of capital looking for good investments. And as I mentioned a moment ago, a lot of these capitals is coming into our region and some of these secondary markets in a more active way. And so we just see this as a window of opportunity to start to cycle a little bit more aggressively than we have been in the past. And we think that by doing so, that we buy ourselves some good performance down the road.

Okay, great. And I know we talked a lot about the potential of -- or like thereof[ph] of move-outs to home ownership. What about trends and move-outs to rent increases? What are you seeing there? Is it worsening? Are you able to backfill with higher-quality tenants? Can you just kind of clarify what's going on there?

Yes, I would say it's improving on the worsening standpoint, if that makes any sense. It's up by about 200 of folks. They're up about 9%, but it's a very calculated move-up and it's running at about -- less than or about 1 person per property per month moves out for rent increase. And we're back filling. The average for the year was like 11% or 12% rent increase on that. So it is -- we're definitely getting more active in our willingness to push our residents and actually force some level of turnover. We believe some is healthy and good. We don't think we're passed that threshold, but it is up and it's intentionally up.

And then longer-term, how do you think about what your rent-to-income ratios could ceiling at in your markets? And if the current rate of growth were to continue, how long would it take to hit that ceiling?

Well, if all thing remains the same right now, we'll never it that ceiling. Because essentially, what it was is about 18% pre-recession, if you will, in that 18% rent-to-income ratio. And then it went -- it moved up to about 19.5% in peak period. It has since dropped substantially the last 2 years in a row and is now 16.4%. So in other words, our affordability is getting better and better even as our rents go up and up because we're, I assume, reloading with a better level of clientele. So if the current trend continues, it never hits it. Where that bottoms out and starts turning the other way, where affordability really gets constrained, I'm not sure yet. We haven't seen that happen.

Does that imply a possibility of stronger-than-expected rental rate pricing power?

It is -- it implies that affordability won't be a factor in that. I think that really comes down to what's the job growth and what's the supply level.

Our next question comes from Michael Salinsky of RBC capital.

Al, first question for you, just on the guidance. How much -- because you talked about the elevated acquisition activity for the year. How much ATM issuance have you assumed? Is that kind of a built-in to the guidance already?

Yes. I think if you take a look the acquisition, $300 million acquisitions, $100 million dispositions, $80 million development funding, throw in $15 million to $20 million equity funding for joint venture acquisitions. You're going to back into a need, somewhere, $150 million to $200 million, Mike. And we still don't have a ATM program in place. We have about 1.7 million shares remaining. It will certainly look to keep one in place, and look at the other alternatives as well, but that's the need and well, we'll give you more on execution as the year progresses.

Okay. It's helpful. In the guidance, also, for 2012, can you give us a sense of what you guys are thinking in terms of occupancy. Also, what kind of renewal growth you've built in? Whether you're see that trending a little bit lower as the year progresses? And also what your kind of expectations are for new lease increases in 2012?

Well, I'll just tell you what the revenue performance is based on largely, Mike, it's really about pricing next year. We've assumed that the year 2012 is going to look a lot like 2011 in terms of the trends. We expect prices, in total, combined new leases or renewals to go between 5% and 6%. And we put, to your point of occupancy, we believe occupancy will be pretty stable, and it'd be where it is right now, through the year with some seasonal impacts. And maybe the second and third, a little stronger on the quarters. But I think what we have dialed in is a little bit of dollar vacancy loss increase, as we expect to have a little more churn during the month and during the quarter, as turnover picks up a little bit. Because as Tom mentioned, we're going to be pushing on price year and so it will be a little bit -- call that 20, 30 basis points of occupancy. And so that gives you the foundation of what we're seeing for revenue growth next year.

That's helpful. A couple of -- did you get -- give the new lease rates for the fourth quarter?

New lease rates for the fourth quarter? On a year-over-year basis, for the fourth quarter, they're up 4.5%.

Okay. That's lease-over-lease or was that year-to-date?

That's year-over-year.

Okay. So that make sense. You talked on the last call a little bit about potentially harvesting an asset or two from -- when your joint venture fund is there. Is that still on the table for 2012?

We're looking at it, Mike, with our JV partner and sort of reassessing that. We may -- initially, we got the sense that there was a high level of interest from our partner in doing that and actually, selling them. But frankly, certainly, the values have moved up significantly and we're, maybe, also looking at considering just for refinancing and pulling some proceeds out on that -- under that method as well. So we don't have a specific disposition target right now for those assets I mentioned, but we are looking at it.

Okay. That's helpful. Next question, in terms of performance, if you look at some of newer product in the portfolio versus some of the older, maybe call it, class A versus class B, are you seeing any noticeable trend favors either/or? Or you're getting consistent rent growth across both...

Mike, the real variance there is market and submarket. We've got older assets that are just killing it in places like Austin. And it really has to do more with the location in the broader markets than age.

Okay. And I realized, you guys -- the final question, I realized, you guys have stepped up your disposition activity for 2012. Just curious, just given the the comments about the frothiness of investors looking for product in that market. Why not sell a bit more and use a little less ATM issuance at this point given where pricing is?

Well, we may very well do that, Mike. We've put our guidance out built on those assumptions about we've put there. But I can tell you, if we see the opportunity to move a little faster and do more on disposition side that makes sense, we'll do it. And I think that we're seeing more and growing evidence that investors have an interest more and more in some of these markets. And so we may very well do more than the $100 million that we've assumed. As pointed out, I mean, that's the pretty significant step up -- twice from where it was last year and a lot more than what it was in years past. And so I expect that we'll be at least at that $100 million level. It maybe a little bit more. We'll just see how the year plays out.

Our next question comes from Dave Bragg of Zelman & Associates.

I just wanted to ask you to elaborate a little bit more on how you get to that rent growth outlook for the year that you mentioned? Assuming that -- or knowing that your portfolios are about 1% job growth last year. What's sort of macro environment unrealized outlook for 2012? Is it the same amount of job growth or better?

Mike -- I'm sorry. Dave, this is Al. Probably similar to a little better. I think what we're seeing is, in our markets, we're expecting job growth to be a little bit better than last year, but fairly close overall. But it's beginning to pick up a bit. So underlying assumption is a slightly -- a favorable market. So we've assumed that we'll continue to have similar trends as last year. The trends were good in 2011. We expect that to continue, but we're going to continue pushing pricing, and as we talked about, have a little bit of impact on occupancy. So all that rolls together to be, that the performance that we've put in the guidance, 4% to 5% on price, 20% to 30% on vacancy as we give up.

I can tell you, Dave, I mean, if you look at U.S -- at least the latest information that we have here talking about job growth stats, nationwide, it's a little over 1%, 1.3%. Our markets is 1.5%. So we do think that the job growth opportunities in our markets are going to surpass the national norms and we hope that does translate into a pretty good growth on new lease pricing. And how we'd think that as we have seen over the last quarter and into January, above 4% on new lease pricing year-over-year. I would expect that we'll continue to see that play out at that level, maybe a little better. And of course, that also pulls up our ability to get that much more aggressive on renewal pricing as well. So anywhere of that 4% to 6% range, I think, for both of them, is perhaps, where we think we'll play out over the course of the year.

Okay, that's helpful. One other question for you, Eric. Just a follow-up on your comment on the pricing environment getting frothy or more frothy . How do you think that a sustained to low interest rate outlook could impact that going forward? Does it get more frothy from here? And how would you expect that to play out within your markets in terms of that spill over from Core to Secondary?

Well, I think that the low-rate environment and the continued strong fundamentals coming out of Apartment business is going continue to attract a lot of capital. And I think that -- there's a lot of evidence that suggests that multi-family business is going to be on a -- compared to other sectors in the commercial real estate area, it's going be pretty darn good for several years. And I think that's just going to continue to bring capital. And as is always the case, when capital starts to come into the sector, we saw it really cause cap rates to fall and values to rise pretty dramatically, in a lot of the the much more favored institutional markets on the coast. And it really began to change, really, in the fourth quarter as we saw some of the larger markets in the Sunbelt, Dallas and elsewhere starting to really see that activity. But we're just trying to see it now markets in some of the Secondary markets as well. And so I think you're going to see some cap rate compression begin to take place between the Secondary and Larger markets. This is certainly over the course of this year. And I think it's a good thing for -- obviously, our values and what I think, market is going to continue to just be very favored in apartments in general.

So do you expect to see that relative compression. But would you see expect compression in both, on an absolute basis?

Yes, absolutely. Both being -- both Large and Secondary Markets, you're talking about?

Right.

Yes, absolutely. You get a really nice asset and a nice location in Charleston, South Carolina or Savannah, Georgia, is getting a lot of interest right now, a whole lot of interest.

Our next question comes from Andrew McCulloch of Green Street Advisors.

You guys saw the year-over-year revenue growth slow fairly materially from 3Q to 4Q. Could you explain what's going on there and what gives you confidence that, that revenue growth will again reaccelerate through 2012 as your guidance suggests?

Oh sure. I mean, that's just sort of the normal seasonality that we see. The main traffic was great in the fourth quarter compared to fourth quarter. But it was down 15% from third quarter. So units sit a little bit longer and occupancy fades a little bit. And we've got the expo -- we were 95-5 [ph] at the end of January, exposure is 8.5%, and I mean, there's just nothing on the horizon that makes us don't think that the seasonal patterns that have fallen through the fourth quarter will pick up again.

And Andy, I would add to what Tom said that -- I'll tell you, last year, fourth quarter 2010, we were still very, very focused on occupancy and we were beginning to get a little bit more aggressive on pricing, certainly, at that point. But in the fourth quarter of 2011, we were much more aggressive than we were in 2010 as it relates to renewal, pricing and new lease pricing. So the difference -- because it's obviously Q4, Q4 same seasonal pattern, is just -- we gave up and we we're comfortable giving up, a little bit of -- 60 basis points in occupancy to get the pricing performance that we're getting and believe that, that's the right trade-off to make for the long-term benefit.

Okay. And then just one question, follow-up on Mike's question on the recent ATM usage. It looks like the average issuance price in 4Q was at or below NAB? Can you talk about the thought process there? Are you continuing issuing equity?

Andy, this is Al. Yes, we talked about, we issued $65 million at about, just somewhere near NAB, maybe slightly below the NAB. And we put that money.

That's consensus ANB?

Yes, that's consensus NAB, put to work immediately. And very high-quality deals where the net present value over the whole period is very accretive, where the cash flow, in terms of FFO is accretive in the first year of ownership. So we certainly think that's a good use of capital.

Also, and I guess the benefit is helping you do that with the balance sheet as well?

Absolutely, there's a little bit of that. There was just not much of it. But if you think about it, $65 million on $101 million of assets, you're pretty close to our leverage, but a little bit of it helped our leverage.

Our next question comes from Tayo Okusanya from Jefferies and Company

Just 2 quick questions. First of all, it's just round out the acquisition and disposition activity. Could you talk a little about what cap rates you expect to make acquisitions at? What cap rates you had just to make dispositions at? And then specifically, for that dispositions, what markets you're looking at to dispose off assets?

Acquisition to dispositions, we have...

Cap rates.

Oh, cap rates, you're talking about. On an acquisition, the cap rates, you're talking -- we've been buying deals, Tayo, around 6% and most of the markets are stabilized basis. And we talk about the ones we've disposed off, this year it's 6.7%, on average the trade that we did. So we would consider something like that, as we're going forward, be pretty reasonable. In terms of our estimates, we probably, in our model, actually have 6% on deals we're buying and 7% on deals we're disposing, something like that.

I think we'll do -- hopefully, do better on the disposition than the 7%. Certainly, that's what we've been doing, but that's the way we've modeled it. And then in terms of the markets, we've got a couple of assets in Atlanta. We've got one in Dallas and those are -- the cycling out of some of the product that has either been in the portfolio a good while or we picked up years ago. And we've got a couple of assets, a little bit of an outlier for offset in Cincinnati that we will -- that we're going to move out of as well.

Okay, that's helpful. And then one other question. When I took a look at your earnings growth for 2012 versus '11. It's pretty strong, but basic assumption around dividends is that they're going to stay flat year-over-year. Just kind of curious about that.

Well, we look at our dividend with the board once a year. And we -- as you may know, we increased it at our last board meeting on December 1, and set the dividend really for the year. We will look at it again at the end of this year. We don't have any plans to look at it over the course of the year. And so that's really the way we've looked at it.

And I'd say, it was a 5.1% growth over the previous year and we upped it in December.

Our next question comes from Paula Poskon of Robert W. Baird

Hey, Eric, given the favorable outlook and the positive fundamentals for the whole sector, why do you think the stock is trading at such a huge discount to the peer group?

Well, I mean, I think it's -- the discount is obviously in the multiple and then, I mean, there's an applied cap rate difference as well. But Paula, I think it continues to come back to this, I think, belief that our markets, particularly our Secondary markets tend to not be as strong in this particular phase of the cycle relative to the coastal markets and the markets that most of the sectors tends to be heavily invested in. And so it's just a question of expectations for performance over the next year or two. And I think that whether it be organic growth out of same-store NOI or overall FFO performance. And we get that and I understand that perspective. But our thesis is that if you look at our performance historically, our ability to drive internal growth and overall FFO results has been pretty darn competitive with the sector over the long period of time. And it ebbs and flows at different points in the cycle, but on average, it's been pretty close. And I think what the market has to just ask itself is, given the delta or given the difference in terms of implied performance expectation, has reflected in the pricing difference whether it's defined as a multiple or implied cap rate. You're right, the gap is fairly material at this point. The question is are they going to outperform us that much over the next couple of years, or next 3 years or whatever the horizon is. And history would certainly say, that's not the case. I would believe, and I'm pretty confident that, that will be the case going forward. I mean, I certainly believe that we've got the portfolio, we've got the balance sheet and we've got the platform in such a place that we're going to be very competitive in terms of our ability to deliver results over the next year or 2. That will be pretty competitive with the sector. And so we like what we're doing, we like the strategy, we like the focus that we have. And at the end of the day, our focus is just to continue to -- if we can add record earnings again in 2012 over what we did in 2011, which was a record, and just keep making record earnings every year and keep funding a secured growing dividend. I think over time, it all takes care of itself.

I'm showing no additional questions at this time Sir.

Okay. Well, we appreciate that everyone joining us this morning. And if you got any follow-up calls, you know where to reach us. Thank you.

Ladies and gentlemen, this does conclude today's conference. Thank you for your participation and have a wonderful day. You may now disconnect.