Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (March 2017)
38 slides from Udr's investor presentation, Mar 6, 2017
Slide 1: Investor Presentation March 2017
INVESTOR PRESENTATION MARCH 2017 UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive multifamily real estate properties in U.S. markets. + S&P 500 Company + ~$15.2 Billion Enterprise Value + 2017 Annualized Declared Divid
Slide 2: Table of Contents
ABLE OF CONTEN UDR at a Glance 3 Why Invest in UDR? 4-6 Operating Excellence 7-8 Portfolio Diversification 9 Accretive Capital Allocation 10-12 Balance Sheet Strength 13 Components of Long-Term AFFO per Share Growth 14 Operating Trends Update 15-16 2017 Same-Store Market Revenue Growth Expectations
Slide 3: UDR at a Glance
UDR AT A GLANCE UDR is a multifaceted apartment REIT that owns, operates, develops and redevelops a diversified portfolio of apartment homes across various major U.S. markets. UDR AT A GLANCE Established in 1972 + 20 Markets + 165 Communities + 49,907 Homes Same-Store Revenue per Occupied Home: $1,9
Slide 4: Why Invest in UDR?
WHY INVEST IN UDR? Our overall strategic direction is driven by the interplay between our operating, portfolio diversification, capital allocation and balance sheet strategies. These strategies make UDR a full-cycle investment, drive high- quality, predictable Adjusted Funds From Operations (“AFFO”)
Slide 5: Full-cycle investments generate better-than-average risk-adjusted growth
Full-cycle investments generate better-than-average risk-adjusted growth versus peers over multi-cycle periods. Our best-in-class operating platform has driven our long-term, same-store growth alpha. SS Revenue Growth (indexed at SS NOI Growth (indexed at 100 100 in 2000) in 170 170 ‘UDR = — Apt. RE
Slide 6: UDR's Performance Over Time
UDR’S PERFORMANCE OVER TIME We have executed well on all aspects of our business since our initial Strategic Outlook was published in February 2013. This has translated into strong AFFO, dividend and NAV per share growth over time. UDR Per Share Growth (indexed at 100 at YE 2012)") 150 i Growth = 7.
Slide 7: Long-term same-store growth alpha driven by robust operating platform
Our long-term, same-store growth alpha is primarily driven by our robust operating platform. Its strength is founded on accurate forecasting, efficient execution and continuous innovation. % of Quarters Since 4Q 2007 en suldance Was Raised or Maintained! UDR and our peers raise full-year SS guidance
Slide 8: Operating Excellence
OPERATING EXCELLENCE Market revenue and expense growth serve as governors on how quickly we can grow. Beating market growth demands continuous innovation in the form of ing or raining operating initiatives throughout our platform. For ideas we listen to customers/associates and utilize best practice
Slide 9: Portfolio Diversification
PORTFOLIO DIVERSIFICATIO! Our diversified portfolio is a differentiating factor versus peers, appeals to a wide renter and investor audience, lessens market- concentration risk and reduces volatility in our long-term, tore growth. Di isa key component of being a full-cycle investment. % of SS Revenu
Slide 10: Accretive Capital Allocation
ACCRETIVE CAPI ALLOCATION a We create value for our shareholders in a variety of ways through accretive capital allocation. Below is a sampling of recent, innovative capital uses. ACQUISITIONS [Home Properties Portfolio Completed: Oct. 2015 Location: Washington, D.C. Homes: 3,246 Size ($M): $901 **
Slide 11: Accretive Capital Allocation: Development
ACCRETIVE CAPI ALLOCATION We utilize development to augment our organic operating growth and to refresh our portfolio. It has been our primary external growth tool since emerging from the Great Recession. UNDERWAY DEVELOPMENT PIPELINE (AS OF 12/31/2016)" Size: $1.1B # of Homes: 2,807 % of Enterprise
Slide 12: Accretive Capital Allocation: NAV creation
ACCRETIVE CAPITAL ALLOCATION Over the past five years, our developments have generated over $580 million of cumulative NAV and 1-2% of incremental annual AFFO per share on $1.3 billion of total investment. Estimated Stabilized NAV per Share Creation $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2012 2013 2014
Slide 13: Balance Sheet Strength
BALANCE SHEET STRENGTH Our balance sheet is safe, liquid and flexible, allowing our credit metrics to fluctuate with the real estate cycle. We are comfortable with our metrics and the efficient pricing they provide. YE 2016 UDR BALANCE SHEET STATS Debt-to-Gross Asset Value 32.1% Net Debt-to-EBITDA 5
Slide 14: Components of LT AFFO/SH Growth
COMPONENTS OF LT AFFO/SH GROWTH a When we consider UDR’s long-term earnings growth potential, we target AFFO per share growth ~450 basis points above the national apartment rent index. This target is driven by our historical operating performance, our diversified portfolio, our capital structure and
Slide 15: Operating Trends Update
OPERATING TREN UPDATE”) SEE PAGE 16 FOR MARKET-LEVEL COMMENTARY ON THE BELOW DATA Effective YOY Renewal Lease Rate Growth ssarp | ssaro JE Eyl) EHS) 1017") 10160) Total Not Market aois aque |PCr) rashington, | 19.3% 144% | 2.0% 2.9% lOrange ae 12.0% 128% | 32% 5.2% San Francisco | 19% 12.1% | 05% 6.
Slide 16: Other Operating Updates
THER OPERATING UPDATES Below is a property clock that outlines where we believe growth is trending in our major-market, same-store portfolios at this point in the real estate cycle. Note that markets can move clockwise and counter clockwise. Seattle —_ | = _— New York, NY Nashville —_ Tampa — Peakin
Slide 17: 2017 Market Rev. Growth Expectations
2017 MARKET REV. GROWTH EXPECTATIONS ¥” % of SS 101: oe ari ae UDR Same-Store Market-Level Northeast _ Revenue Growth Expectations) RelSs WEN Total NOK: Los Neges “e i! N ox ~ Mid-Atlantic % of SS NOI: 19% % of Total NOI: 23% \@ ° ia : a é ov : 3 3 Dallas orlando Austin és @ > 4.0% Revenue Growth Ms
Slide 18: 2017 Guidance
2017 GUIDANCE”) FFO per common share and unit $0.44 to $0.46 $1.83 to $1.87 FFO as Adjusted per common share and unit $0.44 to $0.46 $1.83 to $1.87 AFFO per common share and unit $0.42 to $0.44 $1.68 to $1.72 Annualized Dividend per common share and unit $1.24 Revenue growth 3.00% to 4.00% Expense g
Slide 19: Appendix: Apartment Demographics and Fundamentals
Slide 20: Rental Housing Demographics
RENTAL HOUSING DEMOGRAPHICS Positive demographic trends in the largest (Millennials) and second largest (Baby Boomers) population age cohorts signal continued sustainable and elevated demand for rental housing. U.S. Population by Age Cohort (M) ™Non-Foreign Born © Foreign Born The Pig in the Python:
Slide 21: Rental Housing Demographics
ENTAL HOUSING DEMOGRAPHICS The combination of strong population growth in primary renter age cohorts, rising propensity to rent across all age cohorts and a variety of other factors has resulted in renter household formation outpacing owner formation since the mid-2000s. Household Growth by Type (00
Slide 22: Near-Term Rental Drivers
NEAR-TERM RENTAL DRIVERS Demographic drivers have and will continue to provide a beneficial tailwind to apartments. But, employment growth typically drives near- term demand. The overall employment outlook remains solid. Employment Growth ‘ oT | * Tote (4% at ea 2007 2008 2009 2010 2011 2012 2013 20
Slide 23: Near-Term Rental Drivers
NEAR-TERM RENTAL DRIVERS = Employment growth in UDR’s same-store portfolio is expected to decelerate slightly from 2.1% in 2016 to 1.8% in 2017. Market-level forecasts are more varied, but still point to generally solid employment growth moving forward. UDR’S MARKET-LEVEL EMPLOYMENT OVERVIEW) % OF 4
Slide 24: Near Term Rental Drivers
NEAR TERM RENTAL DRIVERS Working to counteract the strong employment environment is elevated new apartment supply. 2015 through 2018E deliveries have been, or are forecasted to be, at or above long-term trend. Deflating deliveries by household growth makes for more useful new supply comparisons over
Slide 25: Near-Term Rental Drivers
NEAR-TERM RENTAL DRIVERS 2 Year-over-year forecast apartment supply growth in UDR’s same-store submarkets varies widely by MSA. On a total same-store basis, the majority of competing supply should be delivered in the first half of 2017. 2017 UDR SAME-STORE SUBMARKET APARTMENT DELIVERY EXPECTATIONS T
Slide 26: Forward Looking Statements
FORWARD LOOKING STATEMENTS Forward Looking Statements Certain statements made in this Feet may consti jute “forward-looking statements.” Words such as “expects,” " "likely," “will” “seeks,” “estimates” and variations of such words and similar looking satenent by their nature, involve ies that could
Slide 27: UDR Definitions and Reconciliations March 2017
Slide 28: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Acquired Communities: The Company defines Acquired Communities as those communities acquired by the Company, other than development and redevelopment activity, that did not achieve stabilization as of the most recent quarter. Adjusted Funds From Operations ("“AFFO”
Slide 29: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Marsgemert coreldere EffeciveRenswal Lanse\ Rat Grow a usefl met for ivestors as Itasseases, market level, in-place demand tre Equity Market Cap: The market value of all outstanding common stock and equivalents of a company based on the trading price of the common
Slide 30: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Actvitis of ou taxable REIT subsciary (TRS), nude development and land enilement. From time to time, we develop and subsequently sell a TRS property which results in a short-term use of funds that produces a profit that difers rom the traditional long-term investme
Slide 31: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a JV Return on Invested Capital (“JV ROIC”): The Company defines JV ROIC as its share of property NOI plus property and asset management fee revenue divided by the average of beginning and ending invested capital for the quarter. Management! considers ROIC a useful me
Slide 32: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Nominal Cap Rate: When the term “cap rate" is used by most market participants, they are refering to a “nominal cap rate”. Nc first year yield a property buyer on his/her investment. Like bond yields, nominal cap rates move inversely with property values - when valu
Slide 33: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Return on Invested Capital (“ROIC”): The Company defines ROIC as a referenced quarter's NOI, annualized, divided by the average of beginning and ending invested capital for the quarter. Management! considers ROIC a useful metric for Hive a prea i iio We Company is
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Management considers Total Revenue per Occupied Home a useful metric for investors as it serves as a proxy for portfolio quality, both geographic and physical. TRS: The Company's anes REIT subsidiary ("TRS") focuses on development, land entitlement and short-term ho
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a) Al guidance is based on curent expectations of future economic contions and the judgment ofthe Companys rt team, The following recanelas fem GAAP Nat Insoma/facs) par shar for ul year 2017 and frat quarter of 2017 to forecasted FO, FFO as Adjusted and AFFO per shar
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS A-10 Quarter Ended December 31, 2016 Net income/(loss) attributable to UDR, Inc. Adjustments: Interest expense Real estate depreciation and amortization Other eaerectnn a a amortization Noncontling in Income tax provison/oenef) EBITDA Long-term incentive plan transiti
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a ‘Three Months Ended ‘Twolve Months Ended December 3, somber 31 i nie 2016 2015 2016 Net incomei(loss) attributable to common stockholders $236,687 $ 161.270 $ 289,001 § 936,661 Real estate deprecation and amortization 102537 104,909 419,615 974,598 "Noncontroting in
Slide 38: Investor Relations Contact
Investor Relations Contact: Chris Van Ens cvanens@u