Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (February 2020)
44 slides from Udr's investor presentation, Feb 28, 2020
Slide 1: Investor Presentation March 2020
INVESTOR PRESENTATION MARCH 2020 Cet Mle EeEr! Rf a ec) y i; y we y, if The Arbory | Pertand, OR UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive multifamily real estate properties in a variety of U.S. markets. : cones
Slide 2: UDR at a Glance
UDR at a Glance 3 Recent News and 2020 Outlook 4 Why UDR? 5-6 KEY BUSINESS AREAS Operating Excellence 8-12 Accretive Capital Allocation 13-16 Portfolio Composition 17 Balance Sheet Strength 18 Culture and ESG 19 2020 Guidance 20 APPENDIX Why REITs? 22-23 Why Apartment REITs? 24 Apartment Demographic
Slide 3: UDR at a Glance
UDR AT A GLANCE UDR is a multifamily REIT that owns, operates, develops and redevelops a diversified portfolio of apartment homes across top-tier U.S. markets. Our primary goals are to consistently generate strong total shareholder return (“TSR”) while considering our stakeholders and the environmen
Slide 4: Recent News and 2020 Outlook
RECENT NEWSAND 2 oO 00 UDR’s Primary Goal is to Produce Strong Total Shareholder Return Strong and Active Start to 2020: * YTD blended lease rate growth of 2.8%, +50 bps above 4Q19 + YTD occupancy of 96.9% (+20 bps YOY) * Acquired Slade at Channelside (Tampa, FL) for $85 million + Exercised purchase
Slide 5: Why UDR
WHY UDR UDR’s Value Proposition @®e @ @ @< Strong Earnings, Dividend and NAV per Share Growth have contributed to robust Total Shareholder Return over time, driven by... Operating Excellence: * Next Generation Operating Platform has enhanced, and is expected to continue to enhance, our performance B
Slide 6: Why UDR
WHY UDR Our same-store NOI, FFO as Adjusted, dividend and NAV per share growth rates compare favorably versus peer-median growth rates over the past six plus years... UDR Per Share Growth Rates (indexed at 100 at YE 2013)() 180 170 4.7% UDR SS NOI CAGR vs. Peer Med. of 4.0% 6.7% FFO as Adj./sh CAGR
Slide 7: Key Business Areas
7 Key Busin ess Areas Ey,
Slide 8: Operating Excellence: Creating Value Through Operations
PERATING EXCELLENCE Creating Value Through Operations Better than peer long-termsame- _—_ With lower NOI volatility (i.e., risk)... store NOI growth... 2010-2019 NOI Growth CAGR 2010-2019 NOI Volatility”) UDR 4.6% UDR 05 Peer Median 4.2% Next Generation Operating Platform * Differentiated approach t
Slide 9: Operating Excellence: Next Generation Operating Platform
OPERATING EXCELLENCE UDR’s Next Generation Operating Platform is expected to continue to fundamentally change how we interact with our residents and conduct our business. Current and prospective residents want to interact with us on their schedule. Self-service is good service and has been adopted b
Slide 10: What Do Investors Get From Our Next Generation Operating Platform?
10 OPERATING EXCELLENC What Do Investors Get From Our Next Generation Operating Platform? A far more efficient company... TIM SS Controllable NOI per Employee ($000s)() pees $736 = $607 21% expansion s $550 2018 3018 4018 1019 2019 3a19 4019 ..that requires fewer employees, but provides better servi
Slide 11: Operating Excellence: Market Wins
OPERATING EXCELLENCE a Outsized “market wins)” illustrate our ability to consistently outperform peers at the market-level over time and better represent our operating abilities, as they are agnostic to geographic portfolio concentrations. UDR has, on average, generated the highest SS revenue growth
Slide 12: Operating Excellence: Case Study
OPERATING EXCELLENCE: CAS DY 2 UDR’s Operational Value Proposition in Action UDR creates a significant amount of value through its operations platform, expertise, and culture. Our relative NOI growth outperformance in Orlando over time (shown below) serves as an illustrative example of what our oper
Slide 13: Creating Value Through Capital Allocation
CCRETIVE CAPITAL ALLOCATION Creating Value Through Capital Allocation @) Expertise in a Wide Variety of Investment Opportunities * Acquisitions; development; Developer Capital Program (mezz/pref lending platform; “DCP”); redevelopment; operating platform; revenue-enhancing capital expenditures @) Di
Slide 14: Capital Allocation: Investment Options
Our ability to adapt and pivot our investment focus toward opportunities that generate the highest risk-adjusted IRR and which can be funded accretively is central to UDR’s capital allocation strategy. We have a full suite of options including: ONE-OFF/PORTFOLIO ACQS. DEVELOPMENT DEVELOPER CAPITAL P
Slide 15: Accretive Capital Allocation
ACCRETIVE CAPI LOCATION & UDR has a strong track record of heeding cost of capital growth signals from the public market, as exhibited by our disciplined use of equity issuances versus dispositions to fund our external growth over time. Capital Allocation During the Apartment Cycle ($M) [Wu0R Prem./
Slide 16: The Commons at Windsor Gardens — Yield Expansion
The Commons at Windsor Gardens — Yield Expansion UDR has demonstrated a competitive advantage through our repeatable ability to invest at market pricing and derive above-market returns. The Commons at Windsor Gardens, a $270M suburban Boston acquisition completed in 2019, serves as a representative
Slide 17: Portfolio Composition
17 PORTFOLIO COMPOSITIO Our diversified portfolio, as defined by geographic mix, price point and location within markets, is a differentiating factor versus peers, appeals to a wide renter and investor audience and lessens volatility in long-term same- store growth. Predictive analytics is expected
Slide 18: Balance Sheet Strength
BALANCE SHEET STRENGTH © Our balance sheet is safe, liquid and flexible. We are comfortable with our credit metrics, maturity profile, three-year liquidity outlook, available LOC capacity and the efficient pricing they provide, which serve as a competitive advantage versus the private market. (Q 201
Slide 19: Culture and ESG
CULTURE AND ESG © UDR’s culture is innovative, empowering and rewards success. Reporting on our ESG initiatives increased dramatically during 2019. Corporate Responsibility Participated in Global Real Estate Sustainability Benchmark (“GRESB”) in 2019; achieved ESG public disclosure score of “A” PREE
Slide 20: 2020 Guidance
2020 GUIDANCE“ be sak: ‘Arbors at Lee Vista | Olan, FL EARNINGS PER SHARE GUIDANCE 1Q 2020E FY 2020E Income/(loss) per wtd. avg. common share, diluted $0.01 to $0.03 $0.12 to $0.16 FFO per common share and unit, diluted $0.52 to $0.54 $2.17 to $2.21 FFOA per common share and unit, diluted $0.53 to $
Slide 21: Appendix: REIT Investment Case and Apartment Demographics/Fundamentals
Slide 22: Why REITs?
WHY REIT: 22 The public REIT space is an institutionally accepted asset class with over $1.4T in market cap and has 92 companies with market caps over $3B. REITs have historically served as a strong inflation hedge, have direct exposure to large-scale drivers of the U.S. economy, and have differenti
Slide 23: Why REITs?
WHY REITS Over the past 20 years Equity REITs have generated better relative TSR versus the broader market in over half of the 3-year rolling measurement periods; all while providing investment diversification (low correlation to broader market returns). Rolling 3-Year Annualized TSR) 54% of the tim
Slide 24: Why Apartment REITs?
24 WHY APARTMENT REITS 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) an ongoing shortage of U.S. housing, (2) better LT NOI growth/lower cap ex than most other REIT sectors, (3) the sector’s st
Slide 25: Rental Housing Demographics
RENTAL HOUSING DEMOGRAPHICS 25 Long-term demographics remain strong for apartments. Domestically born age cohorts <20 years old are, on average, 325K larger than the primary renter cohorts aged 20-34 years. Whether the “population wave” continues unabated is expected to depend on the intensity of fo
Slide 26: Rental Housing Demographics
RENTAL HOUSING DEMOGRAPHICS 26 Cumulative renter household (“HH”) formation has outpaced cumulative owner HH formation since the mid-2000s. But the U.S. is not producing enough housing to satisfy overall HH growth. Since 2010, 21% fewer total housing units have been produced than total HH formation
Slide 27: Near-Term Rental Demand Drivers
NEAR-TERM RE DRIVERS a7 Similar to long-term demographic drivers of rentership growth, near-term demand drivers such as employment, hours worked and wage growth screen beneficial for apartments; this has been particularly true in UDR’s markets over the last seven years. LTM Employment + Hours + Wage
Slide 28: Operating Update
OPERATING UPDATE 2 YTD same-store occupancy remains strong at 96.9% and SS blended lease rate growth remains healthy with renewal rate growth continuing to lead new lease rate growth. YOY New Lease Rate Growth”) YOY Renewal Lease Rate Growth” SS QTD 1021 SSQTD1Q19”) $$ QTD1Q20! SS QTD 1Q19' Blended
Slide 29: Notes
NOTES 29
Slide 30: Notes
NOTES
Slide 31: Notes
NOTES 31
Slide 32: 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,” “projected” and variations of such words and
Slide 33: UDR Definitions and Reconciliations March 2020
Slide 34: 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 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ag Management considers Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lending partners with a widely-used measure of the Company's ability to service its consolidated d
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Management considers EBITDAre a useful metric for investors as it provides an additional indicator of the Company's abilty to incur and service debt and will enable investors to assess our performance against that of its peer REITs. EBITDAre should be considered alo
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aS Management believes that FFO as Adjusted is useful supplemental information regarding our operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Net Asset Value: Net Asset Value (‘NAV’) is defined as marked-to-market value of assets less marked-to-market value of liabilities and preferred equity, divided by total outstanding diluted shares and operating partnership units. Management considers NAV a useful m
Slide 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a9 Proposition 43: In California, an amendment enacted in 1978 that limits the tax rate on real estate. The proposition decreased property taxes by assessing property values at their 1975 value and restricted annual increases of assessed value to an inflation factor,
Slide 40: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Stabilized Yield on Developments: The Company calculates expected stabilized yields on development as follows: projected stabilized NOI less management fees divided by budgeted construction costs on a project- specific basis. Projected stabilized NOI for developmen
Slide 41: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Ag 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 incomel(loss) per share for full year 2020 and first quarter of 2020 to forecasted FFO, FFO as Adju
Slide 42: Definitions and Reconciliations
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Slide 43: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aeB ‘Three Months Ended Twelve Months Ended December34, December 21, In thousands, except per share and unit amounts 2013 2018 2018 2018 Net incamefoes) attributable to common stockholders S Maz saree $$ © twosst §—tagz3e Peal esate depresiaton and amorzation 3.484 10
Slide 44: 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,” “projected” and variations of such words and similar expressions are in