Mid-America Apartment Communities, as the name suggests, owns multifamily buildings across America's mid-section, largely focused on the Sunbelt region. Atlanta is its top market, at 13.1% of its net operating income (NOI). Dallas, Charlotte, Austin, and Washington, D.C., round out the top five markets, showing the geographic diversification of its portfolio. Most of those markets have strong employment bases, which support steady rental growth. The company has helped drive some of that rental growth by renovating units with kitchen, flooring, and fixture upgrades, which keeps its properties in high demand.
Mid-America Apartment Communities also has a strong financial profile. The residential REIT has a solid investment-grade balance sheet backed by a 4.71 times debt-to-EBITDAre ratio (that also includes gains or losses on asset sales and any asset impairment charges), which is below the peer-group average of 5.11 times. On top of that, the REIT has a reasonably conservative dividend payout ratio of less than 70% of its initial AFFO estimate for 2020. That financial profile provides Mid-America with plenty of cushion, which has come in handy this year since the nonpayment of rent and recurring fees was slightly above the historical average in April and May due to the impact COVID-19 had on some tenants. Because of that, its dividend -- which it has now paid for 105 consecutive quarters -- is on solid ground.
The company's strong financial profile provides it with the flexibility to invest in redevelopment projects at its existing properties, develop new ones, and make acquisitions. It currently has 12,000 units in the pipeline that it can renovate in the coming years and $490 million of development projects underway. That pipeline should enable the company to continue growing its rental income and 3.6%-yielding dividend, which it has done in each of the last 10 years.