American Residential Properties Inc

American Residential Properties — Investor Presentation (November 2015)

37 slides from American Residential Properties's investor presentation, Nov 17, 2015

1. Slide 1: American Residential Properties, Inc. Company Presentation November 2015

   AMERICAN RESIDENTIAL PROPERTIES, INC. COMPANY PRESENTATION NOVEMBER 2015

2. Slide 2: Disclaimer and Cautionary Note Regarding Forward-Looking Statements

   EPS\Management Presentation\American Residential Properties - 602505097 DISCLAIMER AND CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS The information in this presentation has been prepared solely for informational purposes and does not constitute an offer to sell or the solicitation of an offe

3. Slide 3: A Single-Family Rental Pioneer

   EPS\Management Presentation\American Residential Properties - 602505097 A SINGLE-FAMILY RENTAL PIONEER 3

4. Slide 4: Who Is American Residential Properties, Inc.?

   EPS\Management Presentation\American Residential Properties - 602505097 WHO IS AMERICAN RESIDENTIAL PROPERTIES, INC.? An Experienced, Internally Managed Single-Family Rental Company with a National Footprint (1) Deutsche Bank, JP Morgan, Citibank, BAML, Morgan Stanley, Key Bank, Barclay’s, Raymond J

5. Slide 5: What Is Our Strategy?

   EPS\Management Presentation\American Residential Properties - 602505097 WHAT IS OUR STRATEGY? An Experienced, Internally Managed Single-Family Rental Company with a National Footprint A company with leadership, experience & a fully integrated operating platform – well-positioned to expand its portfo

6. Slide 6: Who Runs & Oversees the Company?

   EPS\Management Presentation\American Residential Properties - 602505097 WHO RUNS & OVERSEES THE COMPANY? Experienced Senior Management & Independent Directors Experienced Senior Management Team Real Estate Experience Stephen Schmitz Laurie Hawkes Shant Koumriqian Patricia Dietz Chairman & CEO Co-Fou

7. Slide 7: How Did We Build the Company?

   EPS\Management Presentation\American Residential Properties - 602505097 HOW DID WE BUILD THE COMPANY?  Contributed operating & property management platform  Raised $371MM of equity in two Rule 144A offerings to institutional investors  Expanded operations into ten states  Raised $287MM of equity

8. Slide 8: Recent Developments: Q3 Update

   EPS\Management Presentation\American Residential Properties - 602505097 RECENT DEVELOPMENTS: Q3 15 UPDATE 8  Increased portfolio leased rate to 94.3%, up 0.7% from Q2’15, for a total increase of 13.6% since Q4‘14  Continued to drive strong rent growth • Attained average increase of 4.3% on newly e

9. Slide 9: An Experienced Operating Company

   EPS\Management Presentation\American Residential Properties - 602505097 AN EXPERIENCED OPERATING COMPANY 9

10. Slide 10: Where Do We Own Properties?

    EPS\Management Presentation\American Residential Properties - 602505097 WHERE DO WE OWN PROPERTIES? Homes Owned 8,938 States 12 Average Age 18 years Average Size 1,827 sq. ft. Average Investment $150,133 Average Monthly Rent(2) $1,272 Total Occupancy 94% Stabilized Occupancy(3) 94% Markets with Job

11. Slide 11: What Is Our Organizational Structure?

    EPS\Management Presentation\American Residential Properties - 602505097 WHAT IS OUR ORGANIZATIONAL STRUCTURE?  Market Evaluation  Sourcing Management  Underwriting  Pricing  Closing  Utilize network of external agents nationwide ACQUISITIONS & SOURCING  Property Management − Renovations, Re-t

12. Slide 12: How Do We Select Markets?

    EPS\Management Presentation\American Residential Properties - 602505097 HOW DO WE SELECT MARKETS? Our market strategy balances strong economic fundamentals, rent growth, HPA potential & discount to replacement cost to generate attractive risk-adjusted returns AVERAGE ANNUAL EMPLOYMENT GROWTH(1) (201

13. Slide 13: How Do We Acquire Properties?

    EPS\Management Presentation\American Residential Properties - 602505097 HOW DO WE ACQUIRE PROPERTIES? Disciplined Acquisition Platform Utilizing Market Knowledge and Technology  School scores / educational attainment levels  Low crime index  Attractive rental fundamentals / family-friendliness me

14. Slide 14: What Is Our Acquisition Criteria?

    EPS\Management Presentation\American Residential Properties - 602505097 WHAT IS OUR ACQUISITION CRITERIA? We Seek Significant Discounts to Replacement Cost 14 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 ARPI DISCOUNT TO REPLACEMENT COST BY MARKET(1)(2) RS Means 2014 Replacement

15. Slide 15: How Much Have Home Prices Appreciated?

    EPS\Management Presentation\American Residential Properties - 602505097 HOW MUCH HAVE HOME PRICES APPRECIATED? Uneven Recovery has Created Opportunities to Buy at a Discount in Select Markets 15 Source for HPA: FHFA Purchase-Only & All Transactions Index as of September 30, 2015 See Supplemental Not

16. Slide 16: How Do We Restore & Maintain Properties?

    EPS\Management Presentation\American Residential Properties - 602505097 HOW DO WE RESTORE & MAINTAIN PROPERTIES? • Electronic access management • Project evaluation, pricing & project management via mobile applications • Vendor qualifications & quality assurance programs • In-house 24/7 Resident Ser

17. Slide 17: How Do We Select Vendors & Maintain Quality?

    EPS\Management Presentation\American Residential Properties - 602505097 HOW DO WE SELECT VENDORS & MAINTAIN QUALITY? ARP Vendor Qualifications & Quality Assurance Program Building State-of-the-Art Services and Successful Partnerships while Leveraging Technology to Support Sustained Growth • Retain q

18. Slide 18: What Is Our Marketing & Branding Strategy?

    EPS\Management Presentation\American Residential Properties - 602505097 COMMUNICATIONS • Resident Orientation Manual for Home Operation & Maintenance • Surveys for New Move-in, Maintenance Request Follow-up & Move-out • Monthly “Welcome Home” Resident newsletter • Broker Communications Blast (social

19. Slide 19: What Rent Increases Have We Achieved?

    EPS\Management Presentation\American Residential Properties - 602505097 WHAT RENT INCREASES HAVE WE ACHIEVED? Average of 5.2% Rent Increases on Lease Renewals in Q3 2015 and 4.3% on Lease Turns while Maintaining 65.2% Resident Retention Renewals New Leases Market # of Renewals Average % Rent Increas

20. Slide 20: Sample Profile of ARPI Residents

    EPS\Management Presentation\American Residential Properties - 602505097  Average tenure at current job is six years  Typically two-income household  Average head of household is in late 30s  Average of two children per household  Rental rate as percentage of household income approximately 20.5%

21. Slide 21: What Are the Opportunities for Future Growth?

    EPS\Management Presentation\American Residential Properties - 602505097 WHAT ARE THE OPPORTUNITIES FOR FUTURE GROWTH? Robust Investment Pipeline, Growing Rental Demand & Potential Housing Shortage • Foreclosure inventory- Over 3.8 MM non-performing mortgages (1) • Consolidation - Sub-scale SFR opera

22. Slide 22: Financial Overview

    EPS\Management Presentation\American Residential Properties - 602505097 FINANCIAL OVERVIEW 22

23. Slide 23: How Did We Perform During 2014?

    EPS\Management Presentation\American Residential Properties - 602505097 HOW DID WE PERFORM DURING 2014?  Increased total revenue by 129% to $87 million during FYE 2014 compared to FYE 2013.  Achieved Core FFO attributable to common stockholders of $12.4 million, or $0.38 per diluted share in FYE 2

24. Slide 24: What Is Our Capital Structure?

    EPS\Management Presentation\American Residential Properties - 602505097 WHAT IS OUR CAPITAL STRUCTURE?  Flexible Capital Structure  Adequate liquidity to finance operations (1) Based on 33.5 million shares, including RSUs, OP units, LTIP units (vested and unvested) and a $15.03 closing price on No

25. Slide 25: Sample Properties

    EPS\Management Presentation\American Residential Properties - 602505097 AMERICAN RESIDENTIAL PROPERTIES, INC. ________________________________________________ Note: Properties pictured throughout the presentation are sample properties included in the ARPI’s portfolio, but not necessarily representat

26. Slide 26: ARPI Investment Thesis

    EPS\Management Presentation\American Residential Properties - 602505097 ARPI INVESTMENT THESIS 26 Compelling demographics driving SFR demand Strong position in robust core markets Focused strategy for accelerating organic growth Demand driving occupancy and rental increases Flexible capital structur

27. Slide 27: Appendix

    EPS\Management Presentation\American Residential Properties - 602505097 APPENDIX 27

28. Slide 28: Strategically Acquired Portfolio

    EPS\Management Presentation\American Residential Properties - 602505097 STRATEGICALLY ACQUIRED PORTFOLIO See Supplemental Notes hereto for footnote references above 28 Total Portfolio of Single-Family Homes Leased Homes MSA/Metro Division Number of Homes Average Capitalized Purchase Price Per Home A

29. Slide 29: Strategically Acquired Portfolio: Stabilized Homes

    EPS\Management Presentation\American Residential Properties - 602505097 STRATEGICALLY ACQUIRED PORTFOLIO See Supplemental Notes hereto for footnote references above 29 Portfolio of Stabilized (1) Single-Family Homes - September 30, 2015 (unaudited) MSA/Metro Division Number of Homes Average Gross Bo

30. Slide 30: Portfolio Profile by Geographic Distribution

    EPS\Management Presentation\American Residential Properties - 602505097 WHAT IS THE PROFILE OF THE PORTFOLIO BY GEOGRAPHIC DISTRIBUTION? 30 Phoenix, AZ $197,856 15% Dallas-Fort Worth, TX $186,691 14% Houston, TX $164,699 12% Atlanta, GA $162,654 12% Nashville, TN $149,235 11% Florida $88,486 7% Othe

31. Slide 31: Balance Sheet

    EPS\Management Presentation\American Residential Properties - 602505097 BALANCE SHEET 31 Consolidated Balance Sheet (amounts in thousands) September 30, 2015 (unaudited) December 31, 2014 Assets Investment in real estate: Land $ 252,175 $ 249,151 Building and improvements 1,078,713 1,042,954 Furnitu

32. Slide 32: Statement of Operations

    EPS\Management Presentation\American Residential Properties - 602505097 STATEMENT OF OPERATIONS 32 Condensed Consolidated Statement of Operations Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenue: Self-managed rental revenue $ 29,959 $ 21,078 $ 84,051 $ 53,

33. Slide 33: Net Loss to FFO Reconciliation

    EPS\Management Presentation\American Residential Properties - 602505097 NET LOSS TO FFO RECONCILIATION 33 The following is a reconciliation of net income (loss) (which we believe is the most comparable GAAP measure) to funds from operations, or FFO. Also presented is information regarding the weight

34. Slide 34: FFO & Core FFO Reconciliation

    EPS\Management Presentation\American Residential Properties - 602505097 FFO & CORE FFO RECONCILIATION 34 Reconciliation to FFO & Core FFO The following is a reconciliation of funds from operations (FFO) to Core FFO. Also presented is information regarding the weighted-average number of shares of our

35. Slide 35: Net Operating Income (NOI) and NOI Margin

    EPS\Management Presentation\American Residential Properties - 602505097 NET OPERATING INCOME (NOI) AND NOI MARGIN 35 Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 NOI – Self-managed rental revenue: Self-managed rental revenue $ 29,959 $ 21,078 $ 84,051 $ 53,818

36. Slide 36: Net Operating Income (NOI) and NOI Margin

    EPS\Management Presentation\American Residential Properties - 602505097 NET OPERATING INCOME (NOI) AND NOI MARGIN 36 Net Operating Income ("NOI") and NOI margin are supplemental non-GAAP financial measures. NOI excludes acquisition, depreciation and amortization, general, administrative and other an

37. Slide 37: Supplemental Notes

    EPS\Management Presentation\American Residential Properties - 602505097 SUPPLEMENTAL NOTES 37 Page 12 | Focus on Markets with Strong Macro- and Micro-Economic Fundamentals (1) Represents 2015 to 2018 projections per John Burns Real Estate Consulting estimates (May 2015). Annual averages represent 4-

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