Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (August 2015)
36 slides from Udr's investor presentation, Aug 10, 2015
Slide 1: Investor Presentation August 2015
INVESTOR PRESENTATION AUGUST 2015 WEST COAST Timed 13TH & MARKET ELEMENTS BEACH & OCEAN, 1 o DELANCEY AT SHIRLINGTON VILLAGE UDR, Inc. (NYSE: UDR), has a demontstrated CFO: history of successfully managing, buying, selling, developing and redeveloping attractive real estate properties in primary U.S
Slide 2: About UDR, Inc. agenda
About UDR, Inc. Recent Highlights | Stretesic Objectives - Overview Strategic Objectives — In Detail Operations Capital Allocation West Coast Development JV 4 Joint Ventures Washington, DC Acquisition Balance Sheet and Funding Sources } Cash Flow, Dividend and NAV Growth 2015 Guidance B Operating Tr
Slide 3: About UDR, Inc.
ABOUT UDR, INC. 3 UDR STATS () * Established in 1972 * 22 Markets * 174 Communities + 49,322 Homes * Same-Store Revenue per Occupied Home: $1,703 * Total Portfolio Revenue per Occupied Home: $1,885 + Average Age of Communities: 17 years * Approximately 45% / 55% A / B Property Quality and 50% / 50%
Slide 4: Recent Highlights
RECENT HIGHLIGHTS ‘ Beath and Oceshi= Huningion Beech What Oued GENERATED STRONG SECOND QUARTER 2015 SAME-STORE RESULTS 2015 SS Revenue Growth: 5.4% versus 5.0% for the multifamily peer REIT average : - 2015 SS NOI Growth: 6.8% versus 6.3% for the multifamily peer REIT average INCREASED FULL-YEAR 20
Slide 5: Strategic Objectives - Overview
STRATEGIC OBJECTIVES - OVERVIEW 5 We remain focused on executing UDR’s long-term strategic objectives that will continue to generate safe, consistent cash flow growth and optimize shareholder value 1 | Drive organic growth / | 2 | Allocate capital to 1 expand margins and 2 accretive opportunities, i
Slide 6: Operations
OPERATIONS Drive organic growth and improve resident / associate satisfaction through our best-in-class operating platform
Slide 7: Operational Excellence
OPERATIONAL EXCELLENCE u Our best-in-class operating platform is a competitive advantage that differentiates UDR and continues to generate strong results versus peers ACCELERATING NEW LEASE AND RENEWAL GROWTH YTD... Effective YOY SS New Lease Rate Growth ee January 3.5% 0.1% 5.0% 4.9% February 4.1%
Slide 8: Operations - Operating Initiatives
OPERATIONS — OPERATING INITIATIVES 8 Operating efficiencies that boost revenue growth or reduce expense growth are in UDR’s DNA. The potential bottom-line impact from some of our current operating initiatives is quantified below 1 REDUCE DAYS VACANT + 5 days recovered since 2012 POTENTIAL IMPACT OF
Slide 9: Capital Allocation
YY YY 6 YY Bi a m a a on a a oer ite ou F i t CAPITAL ALLOCATION Allocate capital to accretive growth opportunities that strengthen our market mix, portfolio quality and growth rate
Slide 10: Capital Allocation - Development
CAPITAL ALLOCATION - DEVELOPMENT 10 UNDERWAY AND COMPLETED, NON-STABILIZED DEVELOPMENT * Size: 2,563 homes at 100% * Completion Seeing of remaining * Cost: $1,066M, $541K per home at 100% underway develop * Spent to Date: $612M (~69% of equity > 2016: 162 mulion commitment) > 2017: $166 million * Wt
Slide 11: Capital Allocation - Value Creation
CAPITAL ALLOCATION — VALUE CREATION ™ Development remains our most attractive capital allocation opportunity Targeted Average Initial Returns Available to UDR 2% 3% 4% % 6% 7% Cash flow/sh and NAV/sh growth are expected to remain strong as developments stabilize Under Construction Developments — $67
Slide 12: Development Progress
DEVELOPMENT PROGRESS % PROGRESS OF DEVELOPMENT PROJECTS + In aggregate, our pipeline’s weighted average spread between estimated stabilized yields and current cap rates is between 210 to 215 basis points, above the high-end of our 150 to 200 basis point targeted range Development Project “) Performa
Slide 13: UDR's Developments
UDR’S DEVELOPMENTS Some of our recent developments are presented below STABILIZED, NON-MATURE DEVELOPMENTS Los Alisos | Mission Viejo, CA. Completed: 2014 7 Mf 13th & Market | San Diogo, CA Channel @ Mission Bay Completed: 2013 San| Beach & Ocean | Huntington Beach, CA, 100 Pier 41 Boston, MA. Compl
Slide 14: West Coast Development JV
WEST COAST DEVELOPMENT JV “ sisin cies “Angeles, CA jast Development Yoint Venture UDR RECENTLY INVESTED $136 MILLION FOR A 48% ras IN A PORTFOLIO OF FIVE) COMMUNITIES UNDER CONSTRUCTION. THE TRANSACTION CLOSED IN MAY 2015 AND IS BENEFICIAL IN NUMEROUS WAYS: + 6.5% preferred return — Immediately acc
Slide 15: West Coast Development JV
WEST COAST DEVELOPMENT JV The West Coast JV developments are presented below UNDER CONSTRUCTION DEVELOPMENTS
Slide 16: Joint Ventures
JOINT VENTURES ag UDR HAS TWO OPERATING JV RELATIONSHIPS THAT COMPRISE $3.3 BILLION (2) OF APARTMENT COMMUNITIES. THESE RELATIONSHIPS: + Provide a stable source of favorably priced, long-term capital + Reduce effective cost of capital while enhancing returns via promotes and fee income SIZE Own. UNC
Slide 17: Washington, DC Acquisition
WASHINGTON, DC ACQUISITION a Courts at Huntington Station UDR RECENTLY ANNOUNCED AN AGREEMENT TO PURCHASE SIX COMMUNITIES. VALUED AT APPROXIMATELY $908 MILLION IN THE RECOVERING WASHINGTON, DC MARKET. THE TRANSACTION IS EXPECTED TO CLOSE IN THE FOURTH QUARTER OF 2015!) THE TRANSACTION PROVIDES SEVER
Slide 18: Balance Sheet
z= BALANCE SHEET Maintain a strong and flexible Balance Sheet while seeking to further improve our metrics over time
Slide 19: Balance Sheet and Funding Sources
BALANCE SHEET AND FUNDING SOURCES *” By year-end 2016, we expect to achieve our target leverage profile... METRIC YE 2014A YE 2015E YE 2016E Debt-to-assets 38.6% 36% to 38% 34% to 36% Net debt-to-EBITDA 6.5x 5.8x to 6.2x 5.4x to 5.8x Fixed Charge Coverage 3.6x 3.6x to 4.0x 3.8x to 4.2x ..as we also
Slide 20: Cash Flow, Dividend and NAV Growth
pa ay 5 CASH FLOW, DIVIDEND AND NAV GROWTH Generate high-quality Cash flow growth to drive dividend and NAV per share growth
Slide 21: Cash Flow, Dividend & NAV Growth
CASH FLOW, DIVIDEND & NAV GROWTH a After strong AFFO/sh growth in 2014, solid operating results and earn-in hat offset by reloading the dev. pipeline) are driving ‘cash flow, dividend and NAV growth in 2015 AFFO/sh Growth ") NAV/sh Growth 11% 8.5-10.5% 12% 10% = 6-9% 8-10% 8-10% 9% 10% — = 7% 8% — —
Slide 22: 2015 Guidance
2015 GUIDANCE @ at Shirlington ~ Washington, DG = Wholly- Owned EARNINGS PER SHARE GUIDANCE | 3Q2015E | FULL-YEAR 2015E FFO per common share $0.39 to $0.41 $1.64 to $1.68 FFO as Adjusted per common share $0.39 to $0.41 $1.63 to $1.67 Adjusted Funds from Operations (“AFFO”) $0.34 to $0.36 $1.46 to $1
Slide 23: Operating Trends Update
OPERATING TRENDS UPDATE “) 8 Effective YOY SS New Lease Rate Growth ir QTD QTD 3qis) 3015!) Washington, DC 14.0% 12.9% 0.9% -3.4% 4.4% 3.6% 44.5% 42.3% Orange County 125% 129% | 8.0% 25% 75% 4.6% | 59.2% 58.9% San Francisco Bay rea 11.4% 11.9% 14.6% 10.0% 10.3% 8.6% 52.9% 48.2% New York 8.4% 13.0% |
Slide 24: 2015 Market Growth Expectations
2015 MARKET GROWTH EXPECTATIONS a % of SS Nt 12% Cae eerie UDR Same-Store Markets NOaneat _ Revenue Growth) %of SS NOK: 13% % of Total NOI: 19% —" La aa Mid-Atlantic, % of SS NOI: 24% % of Total NOI: 21% @ >5.50% Revenue Growth © 5.00% to 5.50% Revenue Growth Southwest: @ <5.00% Revenue Growth % of
Slide 25: Apartment Fundamentals
San Diege, CA Uppete Jin ven 28 APARTMENT FUNDAMENTALS
Slide 26: Apartment Fundamentals (Demand)
APARTMENT FUNDAMENTALS (DEMAND) 6 DEMOGRAPHIC TRENDS SIGNAL CONTINUED AND SUSTAINABLE DEMAND FOR RENTAL HOUSING 22-35 Year Old Population (M) 22-35 year olds comprise the 65 primary renter cohort with a 60%+ 62 a” propensity to rent. This cohort is 59 forecast to grow through 2025 10 14 '15E_'20E'25
Slide 27: Apartment Fundamentals (MF Supply)
APARTMENT FUNDAMENTALS (MF SUPPLY) ” Our portfolio is well positioned when comparing expected job growth to new supply in our major markets from 2015 through 2016 16% "Not enough jobsto z labsorb s yia eipectedl 1 San Francisco g3 lnew I 53 iy) $32 lsupply®) 28 2 ° gx 8% 1 National e Los Angeles 28
Slide 28: Apartment Fundamentals (SF Housing)
APARTMENT FUNDAMENTALS (SF HOUSING) * The homeownership rate continues to decline. Every 1% drop in the rate results in ( 1.1M new renters en U.S. Homeownership Rate 68.0% 69.0% 66.0% 63.4% 64.0% ° 62.0% Still, single-family housing is recovering at a slow, measured pace from its near- term nadir re
Slide 29: Definitions and Reconciliations
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Slide 30: Definitions and Reconciliations
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Slide 31: Definitions and Reconciliations
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Slide 32: Definitions and Reconciliations
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Slide 33: Three Months Ended Six Months Ended
‘Three Months Ended Six Months Ended June 20, ne: 2015. 2014 2015 2018 Netincome/os) atbuabe to common tochalers Saar $2907 $ssIs Sa 506 el estate depreciation and amortization, including dscontnud operations snes wat W932 77409 oncoming interests aon 1079 boa) a0 fal estate depreciation and amortiz
Slide 34: Forward Looking Statements
FORWARD LOOKING STATEMENTS a Forward Looking Statements Certain statements made in this presentation may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar ex
Slide 35: Notes
NOTES ®
Slide 36: Investor Relations Contact
Investor Relations Contact: Shelby Noble snoble@u