Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (September 2022)
36 slides from Udr's investor presentation, Sep 7, 2022
Slide 1: Investor Presentation September 2022
INVESTOR ALF —< - = , |. PRESENTATION aie UR SEPTEMBER 2022
Slide 2: Table of Contents
TABLE OF CONTENTS C3} UDR at a Glance (4) Diversified Portfolio Composition e Recent Updates and Strong Multi-Year Growth @ UDR Value Proposition eo Operating Competitive Advantages Qe Operating Platform and Innovation j C4) Accretive Capital Allocation and Value Creation [7] ESG and Sustainability
Slide 3: UDR at a Glance
UDR AT A GLANCE?) UDR is a full-cycle investment that consistently generates strong total shareholder return (“TSR”) through innovation, bestin- class operations, and disciplined capital allocation. S&P 500 3.3% : : 58,000 Full-Cycle Continuous Multifamily § ppartment [J 21 Markets | $2218 EV Divide
Slide 4: Diversified Portfolio Composition
DIVERSIFIED PORTFOLIO COMPOSITION UDR is diversified across markets and price points to generate robust growth with less risk. Northeast/Mid Atlantic: ¢ 39% of NOI West Coast 37% of NOL Sunbelt 24% of NOL Price Point and L¢ = A-Quality B-Quality = Coastal A = Sunbelt A Coastal B ‘Sunbelt B 68% a = U
Slide 5: Recent Updates
RECENT UPDATES Apartment fundamentals remain historically robust with UDR market rents continuing to increase sequentially in August. This, along with our innovation and differentiated approach to pricing homes, continues to drive strong growth. 3Q 2022 Expectations 96.7%to 97.0% @ ~13.0% @ 32.75% t
Slide 6: Strong Multi-Year Growth
STRONG MULTI-YEAR GROWTH Relative advantages across operations, capital allocation, balance sheet positioning, and innovation position UDR well for continued strong same-store and earnings growth. Strong Blends = Record High Earn Sector-Best 5% Effective blended lease rate growth 2023 same-store rev
Slide 7: UDR Value Proposition
UDR VALUE PROPOSITION NextGen Operating, Differentiated e> Platform and Market OG? Innovation Selection - Self-service and improved Durable competitive - Predictive analytics and resident experience advantages boost yields qualitative analyses to identify investment/ - Expand margins and History of
Slide 8: Operating Competitive Advantages
OPERATING COMPETITIVE ADVANTAGES Best-in-class operations enables monetization of value proposition and drives long-term outperformance versus peers. UDR’s relative operating advantages and controllable operating margin should expand further with additional innovation. + >$20M NOI Upside Realized +
Slide 9: Operating Platform Accomplishments
OPERATING PLATFORM ACCOMPLISHMENTS UDR’s history of innovation has delivered better SS NOI growth and controllable operating margin versus peers. Long-Term Same-Store Outperformance Increased Efficiencies Versus Peers UDR vs. Peer Median SS NOI Growth (2014-2922) Units Managed per Employee PeerMedia
Slide 10: Innovation - Future Operating Initiatives
INNOVATION - FUTURE OPERATING INITIATIVES Accomplishments Future Initiatives >$40M NOI over next 24-36 months >$20M NOI ide realized $ upside realize Max potential of >$140M NOI on current portfolio Zz Reduce Vacant Days Foundational Technologies Customer Pricing Engine Self-Service Optimization Pla
Slide 11: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION UDR has been a proficient steward of capital over time and is able to utilize a multitude of value creation drivers. UDR’s Capital Allocation Throughout the Apartment Cycle ($M) [wR Prem./(Disc.) to NAV (Ihs)_ —==Net Acquisitions (rhs) issue equity at a premium to NAV $2
Slide 12: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION Our wide variety of value creation drivers provides UDR the latitude to pivot toward investment opportunities that generate the highest riskadjusted IRRs and the greatest eamings/NAV accretion. These include: ACQUISITIONS Station on Silver| Herndon, VA (Washington, DC MS
Slide 13: Repeatable Value Creation
REPEATABLE VALUE CREATION UDR has a proven track record of achieving 10% to 15% NOI growth above market rent growth on acquisitions over the first three years of ownership. This enduring competitive advantage is repeatable and scalable. eld Expansion Drivers of UDR’s ~$2.0B™ of 2019-2 Third-Party Ac
Slide 14: Diversified and High-Quality Resident Base
DIVERSIFIED AND HIGH-QUALITY RESIDENT BASE) Household income, wage growth, and resident credit quality support current and future demand. $150K Average annual household income UDR Same Store Portfolio Seattle ‘Avg. Household Income ($000s): $168 vs. MSA Median Income: 151% ‘% High-Income MSA Jobs: ”
Slide 15: Resident Attributes and Trends
RESIDENT ATTRIBUTES AND TRENDS Balanced resident composition minimizes risk of exposure to specific age cohorts. 30% ‘Average Resident Age: 34 27% 25% Median Resident Age: 33 1% 20% 15% 10% 5% 0% Under 25 45+ Pre-COVID:Feb-20 Current Resident Tumover since 2Q18 Market factors and our focus on reside
Slide 16: Strong, Liquid, Flexible Balance Sheet
STRONG, LIQUID, FLEXIBLE BALANCE SHEET Sectorleading interest rate and liquidity outlook (including ~$280M in unsettled forward equity sale agreements) plus strong leverage metrics support growth opportunities and reduce risk. Strong Leverage Metrics Well Laddered Maturity Schedule BBB+ 24.5% 7.1 ye
Slide 17: ESG and Sustainability Leadership
ESG AND SUSTAINABILITY LEADERSHIP UDRis a recognized global ESG leader and is committed to further enhancing our ESG profile.) GRESB Score of 86 LEED Certifications Sustainalytics SDG Alignment Named #1 Listed Developed, redeveloped, or Classified “Low Risk” with a 5- Aligned with 9 United Residenti
Slide 18: Innovative Culture and ESG Leadership
INNOVATIVE CULTURE AND ESG LEADERSHIP UDR’s culture is innovative, empowering and rewards success. Proactive engagement with associates and residents support UDR’snearmaximum GRESB score in Social Responsibility. Resident Engagement and Satisfaction Associate Engagement and DEI? ~90% of associates f
Slide 19: Appendix
APPENDIX The George | King of Prussia, PA
Slide 20: The Case for Apartment REITs
THE CASE FOR APARTMENT REITS Apartment REIT TSR has outperformed other REITs and the broader market by a wide margin over the past 20 years due to: Ongoing shortage Increased Housing's status as Better long-term NOI of U.S. housing propensity to rent a necessary, non- J growth + lower capex discreti
Slide 21: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS Long-term demographics remain strong for apartments. Since 2010, approximately 28% fewer total housing units have been produced versus total households formed over the same period. U.S. POPULATION BY AGE COHORT (MILLIONS) PROPENSITY TO RENT BY AGE COHORT oe ™
Slide 22: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS Low absolute and relative affordability represent a barrier to single-family ownership in many U.S. markets, resulting in a larger potential multifamily renter pool. Third-party forecasts indicate ~5 million additional apartments will be needed by 2030 to sati
Slide 23: Notes
NOTES 23
Slide 24: Forward Looking Statements
FORWARD LOOKING STATEMENTS 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 expr
Slide 25: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS SEPTEMBER 2022 HEE: YTD | | an LL, TZ fi [} “ig | HT] ET |
Slide 26: Definitions and Reconciliations A2
DEFINITIONS AND RECONCILIATIONS A2 ‘Acquired Communities: The Company defines Acquired Communities as these 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 27: Definitions and Reconciliations A3
DEFINITIONS AND RECONCILIATIONS AS Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses. Controtiable Operating Margin: The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (il) divided by renta
Slide 28: Definitions and Reconciliations A4
DEFINITIONS AND RECONCILIATIONS AA Effective Blended Lease Rate Growth: The Company defines Effective Blended Lease Rate Growth as the combined proportional growth as a result of Effective New Lease Rate Growth and Effective Renewal Lease Rate Growth. Management considers Effective Blended Lease Rat
Slide 29: Definitions and Reconciliations A5
DEFINITIONS AND RECONCILIATIONS AS Funds From Operations (“FFO’) attributable to common stockholders and unitholders: The Company defines FFO attributable to common stockholders and unitholders. as net income/(loss) attributable to common stockholders (computed in accordance with GAAP), excluding im
Slide 30: Definitions and Reconciliations A6
DEFINITIONS AND RECONCILIATIONS A6 Net Operating Income ("NOI"): The Company defines NOI as rental income less direct property rental expenses. Rental income represents gross market rent and other revenues less adjustments for concessions, vacancy loss and bad debt. Rental expenses include real esta
Slide 31: Definitions and Reconciliations A7
DEFINITIONS AND RECONCILIATIONS AT Physical Ocaupancy: The Company defines Physical Occupancy as the number of occupied homes divided by the total homes available at a community. Proposition 13: In California, an amendment enacted in 1978 that limits the tax rate on real estate. The proposition decr
Slide 32: Definitions and Reconciliations A8
DEFINITIONS AND RECONCILIATIONS AS ‘Stabilization/Stabilized: The Company defines Stabilization/Stabilized as when a community's occupancy reaches 90% or above for at least three consecutive months. Stabilized, Non-Mature Communities: The Company defines Stabilized, Non-Mature Communities as those c
Slide 33: Definitions and Reconciliations A9
DEFINITIONS AND RECONCILIATIONS Ag 2022 Guidance: All guidance is based on current expectations of future economic conditions and the judgment of the Company's management team. The following reconciles from GAAP Net income/(loss) per share for third quarter of 2022 and full-year 2022 to forecasted F
Slide 34: Definitions and Reconciliations A10
DEFINITIONS AND RECONCILIATIONS A10 Quarter Ended Coverage Ratios June 30, 2022 Net income/(loss) $ 5,364 Adjustments: Interest expense, including debt extinguishment and other associated costs 36,832 Real estate depreciation and amortization 167,584 Other depreciation and amortization 3,016 Tax pro
Slide 35: Definitions and Reconciliations A11
DEFINITIONS AND RECONCILIATIONS AAL ‘Three Months Ended ‘Six Months Ended June 30, June 20, In thousands, except per shore and unit emounts 2022 oot Ed 204 et inceme/ ess srt eammen echoes S$ sors $0 moess $$ asses 8 ar est esute cprecatn and anonaton a67ss6 us.200 ‘351208 200,287 Nonconosing tres ‘
Slide 36: Forward Looking Statements
FORWARD LOOKING STATEMENTS 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 expr