Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (September 2020)
37 slides from Udr's investor presentation, Sep 2, 2020
Slide 1: Investor Presentation September 2020
INVESTOR PRESENTATION SEPTEMBER 2020 1) Opening doors to the future® Culture | Collaboration | Innovation Vitruvian West, Phase 2) Dallas, TX hy a Wekcome to UDR Resident — uccessfully managing, buying, selling, Chief Financial Officer: Joe Fisher | 720.283.6139 te communities in targeted U.S. marke
Slide 2: Key Messages and Updates
KEY MESSAGES AND UPDATES PAGE UDR at a Glance 3 Recent Highlights and Trending Considerations 4 Recent Operating Update 5-6 Pricing Strategy vs UDR Value Proposition 8 Operating Excellence 9-13 Diversified Portfolio Composition 14 Market/Resident Attributes 15) Accretive Capital Allocation 16-18 Str
Slide 3: UDR at a Glance
UDRATA NCE UDR is a multifamily REIT that owns, operates, develops and redevelops a diversified portfolio of apartment homes across top-tier U.S. markets. Founded in 1972, UDR is an S&P 500 company that consistently generates strong total shareholder return (“TSR”) through constant innovation, best-
Slide 4: Recent Highlights and Trending Considerations
RECENT HIGHLIGHTS AND TRENDING CONSIDERATIONS UDR’s operating results through August have proved resilient. Our surgical approach to maximizing NOI through targeted blended lease rate growth and active occupancy management has preserved our rent roll in 2020 and sets us up well for 2021. Recent High
Slide 5: Recent Operating Update
RECENT OPERATING UPDATE Regulatory restrictions, widespread work-from-home mandates, and varying cadences of state/city re-openings have caused operational challenges during the pandemic. These, combined with elevated concession levels and differing strategic/accounting decisions, reduced same-store
Slide 6: Recent Operating Update
RECENT OPERATING UPDA As an indicator of overall demand, visits remain positive year-over-year at +5% and significantly improved versus the recent lows witnessed in late March/early April. YOY CHANGE IN VISIT”) TRENDS 40% 20% | 0% (20)% (40)% (60)% (80)% March April May June July August Coastal vers
Slide 7: Pricing Strategy
RICING STRATE Typically, UDR’s pricing strategy focuses on maintaining face rate (gross rent) and offering concessions when necessary as opposed to net effective pricing where concessionary activity is reflected in the monthly rental rate. For both strategies, year-1 cash flow is equivalent, but by
Slide 8: UDR Value Proposition
UDR VALUE PROPOSITION The primary components of UDR’s value proposition compliment one another, making the whole greater than the sum of parts. Over time, our strong track record across a variety of areas, such as operations and capital allocation, have bolstered same-store, earnings, dividend and N
Slide 9: Operating Excellence
OPERATING EXCELLENCE UDR has produced better-than-peer median same-store NOI growth over the past 5-, 10-, and 20-year periods. Monetizing our real estate in new, differentiated ways, strong blocking and tackling, and a culture that embraces innovation deserve the credit. Our Next Generation Operati
Slide 10: Operating Excellence
OPERATING EXCELLENCE UDR’s Next Generation Operating Platform is a differentiator that provides improved and more immediate customer service to current and prospective residents on their schedules while also generating outsized returns for UDR’s stakeholders. Our Platform is evolutionary, well-accep
Slide 11: Operating Excellence
OPERATING EXCELLENCE a The success of UDR’s Next Generation Operating Platform is measured by tangible metrics that indicate value creation versus private competitors through revenue growth optimization and cost controls that can result in up to 500-1,000 basis points in margin expansion on acquired
Slide 12: Operating Excellence
OPERATING EXCELLENCE Our Next Generation Operating Platform allows us to surgically price our homes on market-by-market, asset-by-asset, and even home-by-home bases. This optimizes rental rate growth versus change in occupancy to maximize near-term revenue growth but also enhances the integrity of o
Slide 13: Operating Excellence
OPERATING EXCELLENCE The value proposition available to stakeholders when UDR’s blocking and tackling, historical operating initiatives and Next Generation Operating Platform are overlaid on a given market is significant. Orlando, as presented below, provides a clear, real- world example of our rela
Slide 14: Diversified Portfolio Composition
DIVERSIFIED PORTFOLIO COMPOSITIO Our diversified portfolio 1) is a differentiating factor versus peers, 2) appeals to a wide renter and investor audience, 3) provides for more markets to invest in / overlay our operating platform onto and 4) lessens volatility in long-term same-store growth. Our por
Slide 15: Market / Resident Attributes
MARKET / RESIDENT ATTRIBUTES“ UDR has a diversified and high-quality resident base across our markets. Our household income is on average 135% above the median income across the MSAs in which we operate, with a tilt toward high- and medium-income jobs. oO Primary Coastal Markets oO Other Coastal Mar
Slide 16: Accretive Capital Allocation
ACCRETIVE CAP LLOCATION UDR has a strong track record of heeding cost of capital signals from the public market. This discipline, combined with the well- rounded suite of investment options available to us, has created significant value for stakeholders over time. UDR’S CAPITAL ALLOCATION DURING THE
Slide 17: Capital allocation investment opportunities
Our willingness and ability to pivot toward the investment opportunity that generates the highest risk-adjusted IRR and the greatest earnings/NAV accretion is central to UDR’s capital allocation strategy. We have a full suite of options including: ACQUISITIONS The Arbory | Hillsboro, OR * Portfolio
Slide 18: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATIO UDR has a demonstrated track record of value creation through acquisitions, development, redevelopment, and Developer Capital Program investments. One William | Englewood, NJ (New York MSA) The Residences at Pacific City | Huntington Beach, CA Currents on theCharles| Walt
Slide 19: Strong, Liquid Balance Sheet
STRONG, LIQUID BA CE SHEET UDR’s balance sheet is safe, liquid, flexible, and fully capable of supporting a wide variety of growth opportunities in size. We have improved our credit metrics, maturity profile, three-year liquidity outlook, and available LOC capacity. The efficient pricing these quali
Slide 20: Innovative Culture and ESG
INNOVATIVE CULTURE AND ESG ou UDR’s culture is innovative, empowering and rewards success. Reporting on our ESG initiatives and successes has increased dramatically. le ESG Targets Participated in Global Real Estate Sustainability Benchmark (“GRESB”) in 2019; achieved ESG public disclosure score of
Slide 21: Regulatory Update
UDR has a dedicated Governmental Affairs team that tracks and communicates our comprehensive understanding of eviction moratoriums, rent regulations, and other regulatory topics to our UDR teams This has been critical to enabling our surgical approach toward pricing apartment homes and maximizing re
Slide 22: Appendix
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Slide 23: The Case for Apartment REITs
THE CASE FORAPARTMENT REI REITs have historically served as a strong inflation hedge and have direct exposure to primary drivers of the U.S. economy. Apartment REITs have outperformed other REITs and the broader market by a wide margin over the past 20 years. This outperformance has been driven by 1
Slide 24: Apartment Demographics and Fundamentals
APARTM DEMOGRAPHICS D FUNDAMENTALS 2 Long-term demographics remain strong for apartments. Domestically born cohorts aged 20 years and under are, on average, 192K larger than the primary renter cohorts aged 20-34 years. When coupled with an elevated propensity to rent, this bodes well for future apar
Slide 25: Notes
Slide 26: 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 ex
Slide 27: UDR Definitions and Reconciliations September 2020
Slide 28: Definitions and Reconciliations A2
DEFINITIONS AND RECONCILIATIONS A2 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. Acquired JV Same-Store Portfolio Commun
Slide 29: Definitions and Reconciliations A3
DEFINITIONS AND RECONCILIATIONS A3 Consolidated Net Debt-to-EBITDAre — adjusted for non-recurring items: The Company defines Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items as total consolidated debt net of cash and cash equivalents divided by annualized Consolidated EBITDAre -
Slide 30: Definitions and Reconciliations A4
DEFINITIONS AND RECONCILIATIONS Aa Management considers EBITDAre a useful metric for investors as it provides an additional indicator of the Company's ability to incur and service debt and will enable investors to assess our performance against that of its peer REITs. EBITDAre should be considered a
Slide 31: 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 imp
Slide 32: 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 33: Definitions and Reconciliations A7
DEFINITIONS AND RECONCILIATIONS Aq QTD Combined Same-Store Communities: QTD Combined Same-Store Communities represent the QTD UDR Same-Store Communities and the Acquired JV Same- Store Portfolio Communities as a single portfolio, as if the Acquired JV Same-Store Portfolio Communities were 100% owned
Slide 34: Definitions and Reconciliations A8
DEFINITIONS AND RECONCILIATIONS As Total Return: A stock's dividend income plus capital appreciation, before taxes and commissions. Total Revenue per Occupied Home: The Company defines Total Revenue per Occupied Home as rental and other revenues, calculated in accordance with GAAP, divided by the pr
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Quarter Ended Coverage Ratios June 30, 2020 Net income/(loss) $ 62,096 Adjustments: Interest expense, including costs associated with debt extinguishment 38,597 Real estate depreciation and amortization 155,056 Other depreciation and amortization 2,027 Tax provision/(
Slide 36: Definitions and Reconciliations A10
DEFINITIONS AND RECONCILIATIONS A10 Three Months Ended Six Months Ended June 30, June 30, In thousands, except per share and unit amounts. 2020 2019 2020 2019 Net income/(loss) attributable to common stackholders $ 36.709 $ 4588S eoses $ 58,080 Real estate depreciation and amortzaton 155.056 117,934
Slide 37: Forward Looking Statements
Forward Looking Statements Certain statements made in this presentation may constitute “forward-looking statements.” Words suchas “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to iden