Slide 1: Investor Presentation September 2015
INVESTOR PRESENTATION SEPTEMBER 2015 WEST COAST . ELEMENTS BEACH & OCEAN, DELANCEY AT SHIRLINGTON VILLAGE UDR, Inc. (NYSE: UDR), has a demontstrated CFO: history of successfully managing, buying, selling, developing and redeveloping attractive real estate properties in primary U.S. markets Tom Herzo
Slide 2: About UDR, Inc. – Table of contents
Zit WA About UDR, Inc. 4 Recent Highlights 4 \ ) Strategic Objectives ~ Overview 5 Strategic Objectives ~ In Detail Operations 6 Capital Allocation 9 West Coast Development JV 14 Joint Ventures 16 Washington, DC Acquisition 7 Balance Sheet and Funding Sources 18 Cash Flow, Dividend and NAV Growth 20
Slide 3: About UDR, Inc.
ABOUT UDR, INC. 3 UDR STATS () * Established in 1972 * 22 Markets * 174 Communities + 49,322 Homes * Same-Store Revenue per Occupied Home: $1,703 * Total Portfolio Revenue per Occupied Home: $1,885 + Average Age of Communities: 17 years * Approximately 45% / 55% A / B Property Quality and 50% / 50%
Slide 4: Recent Highlights
RECENT HIGHLIGHTS ‘ ‘Savoye Dallas, 1x UDR/Mett fe Vitruvian Parke 1 GENERATED STRONG SECOND QUARTER 2015 SAME-STORE RESULTS + 2Q2015 SS Revenue Growth: 5.4% versus 5.0% for the multifamily peer REIT average * 2Q2015 SS NOI Growth: 6.8% versus 6.3% for the multifamily peer REIT average 2. INCREASED
Slide 5: Strategic Objectives - Overview
STRATEGIC OBJECTIVES - OVERVIEW 5 We remain focused on executing UDR’s long-term strategic objectives that will continue to generate safe, consistent cash flow growth and optimize shareholder value 1 | Drive organic growth / | 2 | Allocate capital to 1 expand margins and 2 accretive opportunities, i
Slide 6: Operations
OPERATIONS Drive organic growth and improve resident / associate satisfaction through our best-in-class operating platform
Slide 7: Operational Excellence
OPERATIONAL EXCELLENCE u Our best-in-class operating platform is a competitive advantage that differentiates UDR and continues to generate strong results versus peers ACCELERATING NEW LEASE AND RENEWAL GROWTH YTD... Effective ie SS New Lease Rat wth << January 3.5% 0.1% 5.0% 4.9% February 4.1% 1.0%
Slide 8: Operations — Operating Initiatives
OPERATIONS — OPERATING INITIATIVES 8 Operating efficiencies that boost revenue growth or reduce expense growth are in UDR’s DNA. The potential bottom-line impact from some of our current operating initiatives is quantified below 1 REDUCE DAYS VACANT + 5 days recovered since 2012 POTENTIAL IMPACT OF
Slide 9: Capital Allocation
YY YY 6 YY Bi a m a a on a a oer ite ou F i t CAPITAL ALLOCATION Allocate capital to accretive growth opportunities that strengthen our market mix, portfolio quality and growth rate
Slide 10: Capital Allocation - Development
CAPITAL ALLOCATION - DEVELOPMENT 10 UNDERWAY AND COMPLETED, NON-STABILIZED DEVELOPMENT * Size: 2,563 homes at 100% * Completion timeline ot remaining * Cost: $1.18, $541K per home at 100% underway develop! * Spent to Date: $612M (~69% of equity > 2016: S162 commitment) > 2017: $166M * Wtd. avg. yiel
Slide 11: Capital Allocation — Value Creation
CAPITAL ALLOCATION — VALUE CREATION ™ Development remains our most attractive capital allocation opportunity Targeted Average Initial Returns Available to UDR = Stabilized Yield: 6.3% 2% 3% 4% % 6% 7% Cash flow/sh and NAV/sh growth are expected to remain strong as developments stabilize — Under Cons
Slide 12: Development Progress
DEVELOPMENT PROGRESS % PROGRESS OF DEVELOPMENT PROJECTS + In aggregate, our pipeline’s weighted average spread between estimated stabilized yields and current cap rates is between 210 to 215 basis points, above the high-end of our 150 to 200 basis point targeted range Development Project (") Perform
Slide 13: UDR's Developments
UDR’S DEVELOPMENTS Some of our recent developments are presented below STABILIZED, NON-MATURE DEVELOPMENTS Los Alisos | Mission Viejo, CA. Completed: 2014 7 Mf 13th & Market | San Diogo, CA Channel @ Mission Bay Completed: 2013 San| Beach & Ocean | Huntington Beach, CA, 100 Pier 41 Boston, MA. Compl
Slide 14: West Coast Development JV
WEST COAST DEVELOPMENT JV “ sisin cies “Angeles, CA jast Development Yoint Venture UDR INVESTED $136 MILLION FOR A 48% INTEREST IN i PORTFOLIO OF FIVE") COMMUNITIES UNDER CONSTRUCTION. THE TRANSACTION CLOSED IN MAY 2015 AND IS BENEFICIAL IN NUMEROUS WAYS: + 6.5% preferred return — Immediately accret
Slide 15: West Coast Development JV
WEST COAST DEVELOPMENT JV The West Coast JV developments are presented below UNDER CONSTRUCTION DEVELOPMENTS
Slide 16: Joint Ventures
JOINT VENTURES ag UDR HAS TWO OPERATING JV RELATIONSHIPS THAT COMPRISE $3.3 BILLION (2) OF APARTMENT COMMUNITIES. THESE RELATIONSHIPS: + Provide a stable source of favorably priced, long-term capital + Reduce effective cost of capital while enhancing returns via promotes and fee income SIZE Own. UNC
Slide 17: Washington, DC Acquisition
WASHINGTON, DC ACQUISITION a Courts at Huntington Station UDR RECENTLY ANNOUNCED AN AGREEMENT TO PURCHASE SIX COMMUNITIES. VALUED AT APPROXIMATELY $908 MILLION IN THE RECOVERING WASHINGTON, DC MARKET. THE TRANSACTION IS EXPECTED TO CLOSE IN THE FOURTH QUARTER OF 2015!) THE TRANSACTION PROVIDES SEVER
Slide 18: Balance Sheet
BALANCE SHEET Maintain a strong and flexible Balance Sheet while seeking to further improve our metrics over time
Slide 19: Balance Sheet and Funding Sources
BALANCE SHEET AND FUNDING SOURCES *” By year-end 2016, we expect to achieve our target leverage profile... METRIC YE 2014A YE 2015E YE 2016E Debt-to-assets 38.6% 36% to 38% 34% to 36% Net debt-to-EBITDA 6.5x 5.8x to 6.2x 5.4x to 5.8x Fixed Charge Coverage 3.6x 3.6x to 4.0x 3.8x to 4.2x ..as we also
Slide 20: Cash Flow, Dividend and NAV Growth
pa ay 5 CASH FLOW, DIVIDEND AND NAV GROWTH Generate high-quality Cash flow growth to drive dividend and NAV per share growth
Slide 21: Cash Flow, Dividend & NAV Growth
CASH FLOW, DIVIDEND & NAV GROWTH After strong AFFO/sh growth in 2014, solid operating results and earn-in offset by reloading the development pipeline) are driving cash flow, dividend and NAV growth in 2015 AFFO/sh Growth () 8.5-10.5% NAV/sh Growth ®) 21 11% 12% 10% = 6-9% 8-10% 8-10% 9% 10% — = 7%
Slide 22: 2015 Guidance
2015 GUIDANCE (1) 2 EARNINGS PER SHARE GUIDANCE | 3Q2015E | ‘FULL-YEAR 2015E FFO per common share $0.39 to $0.41 $1.64 to $1.68 FFO as Adjusted per common share $0.39 to $0.41. $1.63 to $1.67 Adjusted Funds from Operations (“AFFO”) $0.34 to $0.36 $1.46 to $1.50 Annualized Dividend per common share $
Slide 23: Operating Trends Update
OPERATING TRENDS UPDATE “) 8 Effective YOY SS Effective YOY SS JMU hy %Total —% SS New Lease Rate Renewallease Ma Miuea NOI NOI Growth Rate Growth September 13 ‘Same-Store (SS) Market 2015 _2Q15 INew York 13.0% 8.4% | 9.0% 45% | 6.2% 4.4% | 43.8% 46.3% Washington,Dc | 12.9% 14.0% | 10% -20% | 4.1% 3
Slide 24: 2015 Market Growth Expectations
2015 MARKET GROWTH EXPECTATIONS a % of SS Nt 12% Cae eerie UDR Same-Store Markets NOaneat _ Revenue Growth) %of SS NOK: 13% % of Total NOI: 19% —" La aa Mid-Atlantic, % of SS NOI: 24% % of Total NOI: 21% @ >5.50% Revenue Growth © 5.00% to 5.50% Revenue Growth Southwest: @ <5.00% Revenue Growth % of
Slide 25: Apartment Fundamentals
‘Acoma — Denver, CO UDR/MetLife Il Joint Venture APARTMENT FUNDAMENTALS
Slide 26: Apartment Fundamentals (Demand)
APARTMENT FUNDAMENTALS (DEMAND) 6 DEMOGRAPHIC TRENDS SIGNAL CONTINUED AND SUSTAINABLE DEMAND FOR RENTAL HOUSING 22-35 Year Old Population (M) 22-35 year olds comprise the 65 primary renter cohort with a 60%+ 62 a” propensity to rent. This cohort is 59 forecast to grow through 2025 10 14 '15E_'20E'25
Slide 27: Apartment Fundamentals (MF Supply)
APARTMENT FUNDAMENTALS (MF SUPPLY) Our portfolio is well positioned when comparing expected job growth to new supply in our major markets from 2015 through 2016 1 16% Not enough jiobs to ' z labsorb ' e@ San Francisco 2 ‘expected Seattle 1 | @ £2 ' 35 ay Dallas 2 | Om a) gg National Other S. CA “Los
Slide 28: Apartment Fundamentals (SF Housing)
APARTMENT FUNDAMENTALS (SF HOUSING) * The homeownership rate continues to decline. Every 1% drop in the rate results in ( 1.1M new renters je U.S. Homeownership Rate + 68.0% + 66.0% 69.0% 63.4% 64.0% “ 62.0% 990 92 "94-96-9800 020406 0B 11214 Still, single-family housing is recovering at a slow, mea
Slide 29: Definitions and Reconciliations
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Slide 30: Definitions and Reconciliations
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Slide 31: Definitions and Reconciliations
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Slide 32: Definitions and Reconciliations
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Slide 33: Three Months Ended Six Months Ended
‘Three Months Ended Six Months Ended June 20, ne: 2015. 2014 2015 2018 Netincome/os) atbuabe to common tochalers Saar $2907 $ssIs Sa 506 el estate depreciation and amortization, including dscontnud operations snes wat W932 77409 oncoming interests aon 1079 boa) a0 fal estate depreciation and amortiz
Slide 34: 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 35: Notes
NOTES ®
Slide 36: Investor Relations Contact
Investor Relations Contact: Shelby Noble snoble@u