Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (August 2021)
38 slides from Udr's investor presentation, Aug 31, 2021
Slide 1: Investor Presentation September 2021
ux pening doors to tie futures INVESTOR PRESENTATION SEPTEMBER 2021 2 EF: q ~ [~ UDR, Inc. (NYSE: UDR) Chief Financial Officer: Joe Fisher | Investor Relations: Trent Trujillo a“ UDR, Inc. | UD!
Slide 2: Table of Contents
TABLE OF CONTENT KEY MESSAGES AND UPDATES UDR At a Glance 2021 Guidance Recent Updates -6 REASONS TO INVEST IN UDR UDR Value Proposition 10 Operating Excellence 11.12 Accretive Capital Allocation 13-15 ; "Diversified Portfolio Composition 16 MENA V srarker/resident attributes 17-18 EY A 2 strong, Li
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. Founded in 1972, UDR is an S&P 500 company that consistently generates strong total shareholder return (“TSR”) through innovation, best-in
Slide 4: Guidance
2 GUIDANCE" As previously reported with 2Q 2021 results, we have raised full-year 2021 earnings and same-store growth guidance expectations three times this year due to continued strength in operating fundamentals and accretive external growth. EARNINGS PER SHARE GUIDANCE FY 2021 Net Income/(loss) p
Slide 5: Recent Updates
RECENT UPDATES UDR’s preliminary August and QTD operating results continued to improve. Strong demand, increased pricing power, and the near- elimination of concessions have led to an all-time high in physical occupancy with mid-to-high-single digit blended lease rate growth. SAME-STORE DEMAND TREND
Slide 6: Recent Updates
RECENT UPDATES UDR’s Next Generation Operating Platform continues to drive value creation, rental assistance programs are a source of incremental collections, and low single-family affordability remains conducive to elevated rental demand and pricing power. PLATFORM 1.0 ~ PATH TO ACHIEVING TARGETED
Slide 7: UDR Value Proposition - Attractive Results
UDR VALUE PROPOSITION - ATTRACTIVE RESUL UDR compares well versus peers on same-store, FFO as Adjusted per share, dividend per share, and NAV per share growth since 2013” due to our strong operating and capital allocation acumen, which has been supported by an investment-grade balance sheet. We have
Slide 8: UDR Value Proposition - Mechanisms
UDR VALUE PROPOSITION - MECHANISMS UDR’s value proposition begins with efficient operations and the ability to create value in all aspects of our business. We primarily utilize four operating value creation mechanisms in tandem with a diversified array of capital allocation options to maximize long-
Slide 9: Next Generation Operating Platform
NEX Our Next Generation Operating Platform is built on customer self-service and represents the future of how our business will run. Our Platform allows us to more effectively interact with our customers on their schedules and drives increased profitability and growth through additional revenue gene
Slide 10: Next Generation Operating Platform
NEXT GENERATION OPERATING PLATFORM As of year-end 2020 we had realized 50% of our targeted incremental run-rate NOI through Platform 1.0 implementation, with the potential for an additional $5-$10 million upside through 2022 to achieve our original NOI growth goal of $15-$20 million. We believe Plat
Slide 11: Operating Excellence
OPERATING EXCELLENCE Strong core operations, monetizing our real estate in new and differentiated ways (i.e., legacy operating initiatives), building a culture that embraces innovation, and upgrading our properties with high-return investments has contributed to UDR’s better- than-peer median same-s
Slide 12: Operating Excellence Exemplified
OPERATING EXCELLENCE EXEMPLIFIED The value created when UDR’s oper: 1g advantages are overlaid on a given market is significant, scalable, and repeatable. As presented below, Orlando provides a clear, real-world example of the relative operating upside we can generate on a stabilized portfolio. ADVA
Slide 13: Accretive Capital Allocation
ACCRETIVE CAPIT, LOCATIO UDR has a strong track record of adhering to cost of capital signals from the public market. This discipline, combined with our expansive suite of investment options and extensive set of external growth value creation drivers, has driven robust returns for stakeholders over
Slide 14: Accretive Capital Allocation: Investment Options
Portfolios or one-off value-add acquisitions with upside relative to private operators + Typically achieve 10% NOI growth beyond market rent growth, + Acquired/under contract to acquire 24 third-party operating assets for~$2.Bbilion since 2018. DEVELOPER CAPITAL PROGRAM Essex Luxe| Orlando, FL Oppor
Slide 15: Repeatable Value Creation
REPEATABLE VALUE CREATION Historical acquisitions best exhibit the outsized growth and value creation our competitive advantages can provide. We believe we can grow NOI at acquired properties by 10% above market growth over the first three years of ownership. In 2019, we acquired $915 million of com
Slide 16: 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 p
Slide 17: 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 n income across the MSAs in which we operate, with a tilt toward high- and medium-income jobs. Resident credit quality has remained consistent over
Slide 18: Resident Attributes and Trends
RESIDENT ATTRIBUTES AND TREN . 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 their housing preferences, o
Slide 19: Strong, Liquid Balance Sheet
STRONG, LIQUID BALANCE 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 maturity profile, five-year liquidity outlook, available LOC capacity, and many credit metrics. The efficient pricing these
Slide 20: Innovative Culture and ESG Leadership
INNOVATIVE CULTURE AND ESG Reporting on our ESG initiatives and successes has expanded and improved over the past three years. Corporate Responsibility « "4 Participated in the Global Real Estate Sustainability Benchmark (“GRESB”) and achieved a 2020 score of 83, near the top of 6 BA the Multifamily
Slide 21: Innovative Culture and ESG Leadership
INNOVATIVE CULTURE AND ESG 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 Respon: “S” — Social Responsibility: Associate Engagement and DEI One-ti
Slide 22: Regulatory Knowledge
REGULATORY KNOWLEDG : 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
Slide 23: Appendix
Slide 24: The Case for Apartment REITs
THE CASE FORAPARTMENT REITS REITs have historically served as a strong inflation hedge and have direct exposure to primary drivers of the U.S. economy. Apartment REIT TSR has outperformed that of other REITs and the broader market by a wide margin over the past 20 years. This outperformance has been
Slide 25: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMEN Long-term demographics remain strong for apartments. Domestically born cohorts aged 19 years and under are, on average, 605K people larger than the primary renter cohort aged 20-34 years. An expected improvement in immigration policies should support growth in the
Slide 26: Forward Looking Statements
FORWARD LOOKING STATEMENTS a 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
Slide 28: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS we 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 Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses. Controllable Operating Margit The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (i) divided by rental
Slide 30: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a 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 Rate
Slide 31: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aE 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
DEFINITIONS AND RECONCILIATIONS co 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
DEFINITIONS AND RECONCILIATIONS a Physical Occupancy: 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 decre
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS iat Stabi n/ 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 commun
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS as 2021 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 full-year 2021 and third quarter of 2021 to forecasted F
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Aso Quarter Ended Coverage Ratios June 30, 2021 Net income/(loss) $s 12,535 Adjustments Interest expense, including debt extinguishment and other associated costs 35,404 Real estate depreciation and amortization 146,169 Other depreciation and amortization 2,602 Tax pr
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa ‘Three Months Ended ‘SixMonths Ended June 30, June 30, In thousands, except per share andunit amounts 2024 72020, 2024 2020 [Net income loss) attributable to commen stockholsers S$ toss sme $7 Scola Rea estate depreciationard smatietion 146,168 15088 290257 210.52
Slide 38: 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 iden