Udr, Inc. · NYSE:UDR
Udr — NAREIT Investor Presentation November 2015
36 slides from Udr's conference presentation, Nov 16, 2015
Slide 1: NAREIT Investor Presentation November 2015
NAREIT INVESTOR PRESENTATION NOVEMBER 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
Slide 2: About UDR, Inc. 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 49,323 Homes Same-Store Revenue per Occupied Home: $: Total Portfolio Revenue per Occupied Home: $1,933 Average Age of Communities: 17 years * Approximately 45% / 55% A / B Property Quality and 50% / 50% Urban / Suburban
Slide 4: Recent Highlights
RECENT HIGHLIGHTS ‘ ‘Savoye Dallas, 1x UDR/Mett fe Vitruvian Parke 1 GENERATED STRONG THIRD QUARTER 2015 SAME-STORE RESULTS + 3Q.2015 SS Revenue Growth: 5.9% versus 5.3% for the multifamily peer REIT average + 3.2015 SS NOI Growth: 7.3% versus 6.2% for the multifamily peer REIT average 2 INCREASED F
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 YOY SS New Lease Effective YOY SS Renewal Lease Rate Growth January 3.5% 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: 2,390 homes at 100% Cost: $1B, $559K per home at 100% Spent to Date: $584M (~70% of equity commitment) Wtd. avg. yield vs. cap rate spread of ~192bps WEST COAST DEVELOPMENT JV Size: 1,533 homes at 100% Going
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 pre = 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 Co
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 at the high-end of our 150 to 200 basis point targeted range Development Project ‘") Performance Under Constrton /n teas fe} " c
Slide 13: UDR's Developments
UDR’S DEVELOPMENTS Some of our recent developments are presented below STABILIZED, NON-MATURE DEVELOPMENTS 3083 Wilshire | Los Angeles: Estimated Completion: 2017
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 accreti
Slide 15: West Coast Development JV
WEST COAST DEVELOPMENT JV The West Coast JV developments are presented below UNDER CONSTRUCTION DEVELOPMENTS s2thandotve|L
Slide 16: Joint Ventures
JOINT VENTURES ag A UDR HAS TWO OPERATING JV RELATIONSHIPS THAT COMPRISE $3. 4 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. U
Slide 17: Washington, DC Acquisition
WASHINGTON, DC ACQUISITION a UDR RECENTLY CLOSED ON THE PURCHASE SIX COMMUNITIES VALUED AT APPROXIMATELY $901 MILLION IN THE RECOVERING WASHINGTON, DC MARKET. THE TRANSACTION PROVIDES SEVERAL BENEFITS: Acquired four newly constructed or recently redeveloped apartment communities and two with potenti
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 ae ’ After strong AFFO/sh growth in 2014, solid operating results and p earn-in hat offset by reloading the development pipeline) are driving cash flow, dividend and NAV growth in 2015 AFFO/sh Growth ") NAV/sh Growth 13% sae 10-12% ae T 12% 10% = = 8-10% 9% oo 10% 7%
Slide 22: 2015 Guidance
2015 GUIDANCE (1) 2 EARNINGS PER SHARE GUIDANCE | 4Q2015E | ‘FULL-YEAR 2015E FFO per common share $0.40 to $0.42 $1.65 to $1.67 FFO as Adjusted per common share $0.41 to $0.43 $1.65 to $1.67 Adjusted Funds from Operations (“AFFO”) $0.36 to $0.38 $1.49 to $1.51 Annualized Dividend per common share $1
Slide 23: Operating Trends Update
OPERATING TRENDS UPDATE “) Effective YOY SS Annualized SS PACCMITSI Effective YOY SSNew [tuciceeaicl Turnover as of Nol NYeTI| Lease Rate Growth Growth November 11" Same-Store (SS) arp Cu) Market EEE ecte) 4qis) | aqiat) |New York 13.1% 8.2% 5.3% 3.8% 6.6% 5.0% 40.9% 44.2% lorange County 128% 145% |
Slide 24: 2016 Market Growth Expectations
2016 MARKET GROWTH EXPECTATIONS a % of SS NOI: 45% % of Total NOI: 42% UDR Same-Store Markets Northeast ee Revenue Growth!) % of SS NOT: 43% —— % of Total NOI 21% 7 @ >5,.00% Revenue Growth @ <5.00% Revenue Growth i coe % % of Total NOI: 8% Market Market Market Austin jonterey 2.7% 3.5% Portland 08%
Slide 25: Apartment Fundamentals
‘Acoma — Denver, CO UDR/MetLife Il Joint Venture APARTMENT FUNDAMENTALS
Slide 26: Apartment Fundamentals (Demand)
APARTMENT FUNDAMENTALS (DEMAND) 2% DEMOGRAPHIC TRENDS SIGNAL CONTINUED AND SUSTAINABLE DEMAND FOR RENTAL HOUSING Millennials are the largest population cohort, followed by Empty-Nester Baby Boomers, both of whom have demonstrated an increased propensity to rent U.S Population by Age Group (2044 Esta
Slide 27: Apartment Fundamentals (Demand)
APARTMENT FUNDAMENTALS (DEMAND) ” In addition to population growth, jobs are a primary multifamily demand driver. Job growth is forecast to remain strong in 2015 and 2016 _— U.S. Employment Growth 1% ml 1.0% "| [ 3.0% 2005 9 = 20102 «2011.2 2012. 2013, 2014 = 2015E—_2016E Job Growth by Age Cohort In
Slide 28: Apartment Fundamentals (MF Supply)
APARTMENT FUNDAMENTALS (MF SUPPLY) # New multifamily supply is expected to be slightly elevated versus historical norms in 2015 before declining in 2016 National Multifamily Completions (000s) pring 400 F 2.0% i ion a re a 300 7 [11 I | 250 1997-2008 Avg.: 313K 200 150 281 3189298} i00 aarti 0.0% 2
Slide 29: Apartment Fundamentals
APARTMENT FUNDAMENTALS * The homeownership rate continues to decline. Every 1% drop in the ip rate results in ( 1.1M new renters 70.088 U.S. Homeownership Rate 68.0% 69.0% 86.0% 63.7% 64.0% 62.0% 909294969800 0204060811214 Still, single-family housing is recovering at a slow, measured pace from its
Slide 30: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a ‘Aequred Communities: Management consi peromance met fr sors a, mare ndtv ofthe Company’ operation ptomonce han FOG FO a Aste, PFO nat ekenes re oda esi Sa oping ptr. he Copan oe ce sees rele mos en fe ear ere ascotdngy. Earthy ct i cera omens ae cettan cca he hens
Slide 31: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a te ty Se eter ded nr. 9 ew ee ay RS rope hy ahr, Se Se Se eee eee oe ee ‘05s investment basis Of the asset before accumulated depres - m De Lr Mang pi ear et eer eae ey i ne cata tes o hes {SIRs sentence fan mesa ah py at occ wy GAAP 0 Sor pe cage om Segoe eh sn st
Slide 32: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS 2 eseenan ‘Ejset orn nh Stobtestton Pern oe ReSevelopment i deta, ess Re ‘deciSpment ls econ Copal penne ied Oy aa Coo te project {ei communities: station Ps fom pment: Expected tabized yds re cleated a5 oows, projected sabe NO ess tf contro ied Stand not fr elope st
Slide 33: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS = Net bbe o EBT, The Company fies nt eb. BITOA i deine net income, ucla the impact of ‘nthe sai of deprechbie property, and TRS income tae ‘unr Ended Net Debt to E704 (0008) arediprort et incomes atrbuate to UDR ne s 1320 Adjustments (cade continuing and dcontined ope
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS 2 Toe MorthsEnded Wn Monts Ended septate Septenbe! — 3 ta ena cee sen Stas mane sommes re er moreag or ao tenor cme a [Net (gain}loss on the sale of unconsolidated depreciable property © (59,073) enon ele peyote TS _ _ we ime Eanes on Dinter Ses Cat rr re fro unin oco
Slide 35: Forward Looking Statements
FORWARD LOOKING STATEMENTS = Forward Looking Statements Certain statements made in this presentation may constitute “forward-looking statements.” ds such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expre
Slide 36: Investor Relations Contact
Investor Relations Contact: Shelby Noble snoble@u