Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (March 2021)
40 slides from Udr's investor presentation, Mar 4, 2021
Slide 1: Investor Presentation March 2021
INVESTOR PRESENTATION MARCH 2021 UDRY Opening doors to the future® Station on Silver | Herndon, VA (Washington, D.C. MSA) ~ Union Place | Franklin, MA (Boston MSA) ‘ : es! 1 : cael a bs Andover Place at Cross Creek| Tampa, FL Platform | Smart Homes for Smart Residents UDR, Inc. (NYSE: UDR) has a dem
Slide 2: Table of Contents
TABLE OF CONTENT KEY MESSAGES AND UPDATES UDR At a Glance 1 aC) Recent Highlights and Trending Considerations Recent Operating Update REASONS TO INVEST IN UDR UDR Value Proposition Operating Excellence and Next Generation Operating Platform Diversified Portfolio Composition Market/Resident Attribute
Slide 3: UDR at a Glance
UDR AT AGLANCE 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 innovation, best-in-cl
Slide 4: Recent Highlights and Trending Considerations
RECENT HIGHLIGHTS AND TRENDING CONSIDERATIONS UDR’s operating results through February remained stable, with continued signs of improvement. Our approach to (1) maximizing revenue by balancing blended lease rate growth against active occupancy management, (2) enhancing cost controls through our Next
Slide 5: Recent Operating Update
RECENT OPERATING UPDATE Monthly billed revenue and physical occupancy have stabilized across our portfolio while effective blended lease rate growth continues to improve. Our latest results demonstrate relative improvement versus 2Q and 3Q 2020 across most of our markets. While full economic recover
Slide 6: Recent Operating Update
RECENT OPERATING UPDATE Our tracking of forwarding addresses upon move-out indicates that, more recently, residents have been primarily staying proximate to the city centers they previously called home. Analysis of USPS data") confirms these mobility trends. As such, ramping vaccinations could react
Slide 7: 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 8: UDR Value Proposition
UDR VALUE PROPOSITIO UDR’s strategic approach starts with diversification, which creates opportunity. Our diversified portfolio appeals to a wide renter and investor audience while providing more markets in which to strategically invest and integrate our Next Generation Operating Platform. UDR utili
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: Next Generation Operating Platform - Vision
NEXT GENERATION OPERATING PLATFORM - VISION Leading companies across a variety of industries have moved to self-service business models to improve communication with customers, allowing them to accomplish tasks quickly and on their schedule, and drive profitability higher through greater efficiencie
Slide 11: Next Generation Operating Platform - Achievements
NEXT GENERATION OPERATING PLATFORM - ACHIEVEMENTS * The success of UDR’s Next Generation Operating Platform is measured by tangible metrics. In certain cases, these illustrate the value creation produced versus private competitors when acquiring properties, in the form of revenue growth optimization
Slide 12: Next Generation Operating Platform - Future
NEXT GENERATION OPERATING PLATFORM - URE We are planning phases 1.5 and 2.0 of the Platform. Primary areas of focus include utilizing data analytics to increase resident retention, better directing marketing dollars to optimal sales channels, and making the leasing process quicker and easier to comp
Slide 13: Next Generation Operating Platform - Example
NEXT GENERATION OPERATING PLATFORM - EXAMPLE Our Next Generation Operating Platform allows us to surgically price our homes (i.e. rental rate growth versus changes in occupancy) on market-by-market, asset-by-asset, and even home-by-home bases. This maximizes near-term revenue growth and also enhance
Slide 14: Power of the Platform and Best-in-Class Operations
POWER OF THE PLATFORM AND B N-CLASS OPERATIONS “ 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, rea
Slide 15: 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 16: Market / Resident Attributes
MARKET / RESIDENT ATTRIBUTES“ UDR has a diversified and high-quality resident base across our markets. Our household income is on average 150% above the median income across the MSAs in which we operate, with a tilt toward high- and medium-income jobs. UDR Combined Same-Store Portfolio Avg. Resident
Slide 17: Resident Attributes
RESIDEN Our diversified portfolio across markets, product types, and price points appeals to a wide variety of renters across various ages and other demographic traits. While the Millennial generation has garnered headlines for potential changes in the cohort’s housing preferences, our resident comp
Slide 18: Accretive Capital Allocation
ACCRETIVE CAP LLOCATION UDR has a strong track record of considering 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
Slide 19: Capital allocation investment options
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 DEVELOPMENT eve a - Wee - = Station on
Slide 20: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION es UDR has a demonstrated track record of value creation through acquisitions, development, redevelopment, and Developer Capital Program investments. Our 2019-2020 acquisitions generated more than 5% higher NOI growth on average than our same- store communities in the fo
Slide 21: 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, five-year liquidity outlook, and available LOC capacity. The efficient pricing these attrib
Slide 22: Innovative Culture and ESG
INNOVATIVE CULTURE AND ES Reporting on our ESG i Corporate Responsibility Participated in the Global Real Estate Sustainability Benchmark (“GRESB”) and achieved a 2020 score of 83, near the top of the Multifamily peer group, and named a top performer among global real estate companies. ‘ives and suc
Slide 23: Innovative Culture and ESG
INNOVATIVE CULTURE AND ESG 23 UDR’s culture is innovative, empowering and rewards success. Throughout the pandemic, UDR has proactively engaged with our associates and residents, supporting UDR’s near-maximum GRESB score in Social Responsibility. “§” — Social Responsibility: Associate Engagement and
Slide 24: 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 r
Slide 25: Appendix
APPENDIX Savoye?| Dallas, TX
Slide 26: 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 27: Apartment Demographics and Fundamentals
APARTM DEMOGRAPHICS AND FUNDAMENT, Long-term demographics remain strong for apartments. Domestically born cohorts aged 24 years and under are, on average, 382K larger than the primary renter cohort aged 25-44 years. An expected improvement in immigration policies should support growth in the foreign
Slide 28: 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
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Slide 30: 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 31: Definitions and Reconciliations A3
DEFINITIONS AND RECONCILIATIONS A3 Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items: The Company defines Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items as Consolidated Interest Coverage Ratio - adjusted for non-recurring items divided by total
Slide 32: Definitions and Reconciliations A4
DEFINITIONS AND RECONCILIATIONS Aa Development Communities: The Company defines Development Communities as those communities recently developed or under development by the Company, that are currently majority owned by the Company and have not achieved stabilization as of the most recent quarter. Div
Slide 33: Definitions and Reconciliations A5
DEFINITIONS AND RECONCILIATIONS AS Estimated Quarter of Completion: The Company defines Estimated Quarter of Completion of a development or redevelopment project as the date on which construction is expected to be completed, but it does not represent the date of stabilization. Funds from Operations
Slide 34: Definitions and Reconciliations A6
DEFINITIONS AND RECONCILIATIONS A6 Joint Venture Reconciliation at UDR's weighted average ownership interest: In thousands 4Q 2020 YTD 2020 Income/(loss) from unconsolidated entities $ 4,516 $ 18,844 Management fee 566 2,296 Interest expense 4,537 18,729 Depreciation 8,724 35,023 General and adminis
Slide 35: Definitions and Reconciliations A7
DEFINITIONS AND RECONCILIATIONS Aq Nominal Cap Rate: Nominal cap rates represent the expected unleveraged first year yield a property buyer expects to realize on its investment. NOI Enhancing Capital Expenditures (“Cap Ex"): The Company defines NOI Enhancing Capital Expenditures as expenditures that
Slide 36: Definitions and Reconciliations A8
DEFINITIONS AND RECONCILIATIONS As Sold Communities: The Company defines Sold Communities as those communities that were disposed of prior to the end of the most recent quarter. Stabilization/Stabilized: The Company defines Stabilization/Stabilized as when a community's occupancy reaches 90% or abov
Slide 37: Definitions and Reconciliations A9
DEFINITIONS AND RECONCILIATIONS As YTD UDR Same-Store Communities: The Company defines YTD UDR Same-Store Communities as those communities Stabilized for two full consecutive calendar years. These communities were owned and had stabilized operating expenses as of the beginning of the prior year, wer
Slide 38: Definitions and Reconciliations A10
DEFINITIONS AND RECONCILIATIONS A10 Quarter Ended Coverage Ratios December 31, 2020 Net income/(loss) $ 28,551 Adjustments Interest expense, including costs associated with debt extinguishment 62,524 Real estate depreciation and amortization 146,135 Other depreciation and amortization 2,074 Tax prov
Slide 39: Definitions and Reconciliations A11
DEFINITIONS AND RECONCILIATIONS Aaa Three Months Ended Twelve Months Ended December 31, December 31, In thousands, except per share and unit amounts 2020 2019 2020 2019 Net incomei(loss) attributable to common stockholders $ 75481 $ sos $ 600% § 180,881 Real estsie deprecation and amortzation 146,13
Slide 40: 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 expressions are intended to ide