Udr, Inc. · NYSE:UDR
Udr — NAREIT Investor Presentation June 2016
36 slides from Udr's conference presentation, Jun 6, 2016
Slide 1: NAREIT Investor Presentation June 2016
NAREIT INVESTOR PRESENTATION JUNE 2016 . STABILIZED, NON-MATURE DEVELOPMENTS strated Comet 2017 UDR, Inc. (NYSE: UDR), has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive real estate properties in primarily coastal, core U.S. markets. + S&P 50
Slide 2: Table of Contents
TABLE OF CONTENTS) ° out UDR, Inc. Recent Highlights Strategic Objectives - Overview Strategic Objectives — In Detail Operations ra Capital Allocation et and Funding Sources Components of AFFO Growth Operating Trends Update 2016 Guidance 2016 Market Growth Expectations Apartment Fundamentals Definit
Slide 3: About UDR, Inc.
ABOUT UDR, INC. UDR STATS Established in 1972 20 Markets 171 Communities 51,231 Homes Same-Store Revenue per Occupied Home: $1,897 Total Portfolio Revenue per Occupied Home: $1,995 Average Age of Communities: 16 years + Approximately 50% / 50% A / B Property Quality and 50% / 50% Urban / Suburban Lo
Slide 4: Recent Highlights
RECENT HIGHLIGHTS eae : ey GENERATED STRONG FIRST QUARTER 2016 SAME-STORE RESULTS * SS Revenue and NOI Growth of 6.4% and 8.0%, respectively ey GREW FFO AS ADJUSTED PER SHARE BY 8% IN THE FIRST QUARTER : 6 FFO per share was $0.43, FFO as Adjusted per share was $0.43 and AFFO per share was $0.41, gro
Slide 5: Strategic Objectives - Overview
STRATEGIC OBJECTIVES - OVERVIEW 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, imp
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 7 Our best-in-class operating platform is a competitive advantage that differentiates UDR and continues to generate strong results versus peers BETTER AVERAGE TOP-LINE RESULTS IN PRIMARY MARKETS OVER THE LONG TERM... [| AVERAGE SAME-STORE REVENUE GROWTH % UDR UDR VS. MF PEER U
Slide 8: Operations — Operating Initiatives
OPERATIONS — OPERATING INITIATIVES We target $2 to $3 million per year in incremental NOI generated through operating initiatives... Historical Initiatives Current Initiatives Future Initiatives ia ¢ Reducing number of days homes are vacant following a move out e Service team efficiency ¢ Corporate
Slide 9: Portfolio Improvement
PORTFOLIO IMPROVEMENT Since the initiation of our Strategic Plan in 2013, we have significantly improved our Same Store margins and increased Same Store portfolio quality... YE 2012 Today Revenue per Home $1,420 $1,897 Margins 67.9% 71.1%* Recurring Capex per Home $1,015 $1,150 Recurring Capex per R
Slide 10: Capital Allocation
CAPITAL ALLOCATION Allocate capital to accretive growth opportunities that strengthen our market mix, portfolio quality and growth rate 6 Lofts at West End — Tampa, FL ‘Wholly-Owned:
Slide 11: Capital Allocation - Development
CAPITAL ALLOCATION - DEVELOPMENT UNDERWAY AND COMPLETED DEVELOPMENT * Size: 2,274 homes at 100% * Completion Sete of remaining * Cost: $1B, $597K per home at 100% underway develop * Spent to Date: $370M (~40% of equity > 2016: S162 commitment) > 2017: $166M * Wtd. avg. yield vs. cap rate spread of ~
Slide 12: Capital Allocation — Value Creation
CAPITAL ALLOCATION — VALUE CREATION ® Development remains our most attractive capital allocation opportunity and AFFO/sh and NAV/sh growth are expected to remain strong as developments stabilize Under Construction Developments — $1B + Stabilized, Non-Mature Developments!) — $404M = Total Development
Slide 13: Development Progress
DEVELOPMENT PROGRESS oe 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 Example of Targeted Average Ini Returns Available to UDR = Stabili
Slide 14: Self-Funded Development
SELF-FUNDED DEVELOPMENT mt UDR CAN EMPLOY A SELF-FUNDED APPROACH TO FULLY FUND ITS DEVELOPMENT PIPELINE REDUCING DEPENDENCY ON CAPITAL MARKETS 1031 Exchange for Land Construction id Certai Development Costs ~$100M Loan Proceeds ~$50M Development and Land Acquisition Spend ~S500M. Development that is
Slide 15: Development Cycle
DEVELOPMENT CYCLE 15 WE MITIGATE OUR FUNDING RISK AS WE RECYCLE OLDER NON-CORE ASSETS TO DEVELOP NEW, CORE ASSETS IN PRIMARY MARKETS The Residences at Bolla Terra~ Huntington Beach, CA ated average IRRs on completed projects of ~20% and created ~$1B of NA\ ‘Source: Company documents
Slide 16: UDR's Dispositions vs. Developments
UDR’S DISPOSITIONS VS. DEVELOPMENTS UDR, Inc. continuously renews its portfolio through the disposition of older assets to help fund our accretive development program. Lea “Oce: <> ‘345 Harrison | Boston, MA, Estimated Completion 201° te Abb Le ‘The Residentes.on Jamboree |irvifenA a 02017
Slide 17: Joint Ventures
JOINT VENTURES ad » Fiori on Vitruvian Park ~ Addison, TX wiffuvian Park® Joint Venture UDR HAS TWO OPERATING JV RELATIONSHIPS THAT COMPRISE $3.6 BILLION (2) OF APARTMENT COMMUNITIES. THESE RELATIONSHIPS: + Provide a stable source of favorably priced, long-term capital + Reduce effective cost of cap
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 Our debt metrics will continue to improve organically... METRIC Qi 2016 YE 2016E YE 2017E Debt-to-Assets 33.0% 33% to 35% 32% to 34% Net Debt-to-EBITDA 5.4x 5.3x to 5.7x 5.0x to 5.4x Fixed Charge Coverage 4.4x 4.1x to 4.5x 4.3x to 4.7x ..and we will continue to furt
Slide 20: Growth
GROWTH Generate high-quality AFFO growth, which will drive dividend and NAV per share growth
Slide 21: Components of AFFO Growth
COMPONENTS OF AFFO GROWTH zi After strong AFFO/sh growth in 2015, solid operating results and p earn-in offset by reloading the development pipeline) are driving AFFO growth in 2016 Components of UDR's 2015A AFFO/sh Growth $1.60 $155 $150 $1.45 $1.40 91.35 ‘SS/Non-$S NOI Development Earn-in West Coa
Slide 22: Operating Trends Update
OPERATING TRENDS UPDATE “) Effective YOY Effective YOY ‘Annualized SS CCN) Blended Rate Renewallease JMCiceMa( mcm Turnover as of NOI Cokoriii) Lease Rate Growth May 31% Same-Store ar | arp (Ss)Market 1916 1016 [Jets GuN Recerca lwashington, lp.. 18.2% 136% | 3.7% 3.8% | 5.2% 4.8% | 2.2% 2.6% | 40.0
Slide 23: Operating Trends Takeaways
OPERATING TRENDS TAKEAWAYS We expect 2016 effective rate growth to be the 2" best year since the great recession recovery began... 4.6% 4.7% 4.2% 4.0% 6.4% 2015 was an exceptionally strong year; we achieved FY blended rate growth of 6.4%, a full 200 bps ahead of the previous 4-year average Some fact
Slide 24: 2016 Guidance
2016 GUIDANCE (1) 2 Barton Creek Landing ~ Austin, TX wr holy-Owned | EARNINGS PER SHARE GUIDANCE [20.2016 | FULL-YEAR 20168") | FFO per common share $0.43 to $0.45 $1.75 to $1.81 FFO as Adjusted per common share $0.43 to $0.45 $1.75 to $1.81 Adjusted Funds from Operations (“AFFO”) $0.39 to $0.41 $1
Slide 25: 2016 Market Growth Expectations
2016 MARKET GROWTH EXPECTATIONS 25 West Coast: % of SS NOI: 4196 % of Total NOI: 39% UDR Same-Store Markets ~ Revenue Growth!) Northeast @ > 6.0% Revenue Growth © 5.5% to 6.0% Revenue Growth Southwest: <5.5% Revenue Growth % of 85 NOI-B% '% of Total NOI: 7% % of $$ NOI: % of Total NOI: 10% % of 1016
Slide 26: Apartment Fundamentals
u tania al my a t — i APARTMENT FUNDAMENTALS
Slide 27: Apartment Fundamentals (Demand)
APARTMENT FUNDAMENTALS (DEMAND) a 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 U5 Population by Age Group 2028 Esse) s
Slide 28: Why Multifamily? (Demand)
WHY MULTIFAMILY? (DEMAND) z In addition to population growth, jobs are a primary multifamily demand driver. Job growth is forecast to remain strong in 2016 and 2017 U.S. Employment Growth DOQOUUEUUUDEDESEOHOONN00E 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E The homeownership rate
Slide 29: Why Multifamily? (MF Supply)
WHY MULTIFAMILY? (MF SUPPLY) zs New multifamily supply is expected to be slightly elevated versus historical norms in 2015 and 2016 before declining in 2017 National Multifamily Completions (000s) 2016E-2018E “oe To average the number of Py aaa 20% 350 ‘completions from 1897-2008, 636 Y adaltional m
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: Definitions and Reconciliations
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Slide 34: Definitions and Reconciliations
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Slide 35: Forward Looking Statements
FORWARD LOOKING STATEMENTS eB 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 e
Slide 36: Investor Relations Contact
Investor Relations Contact: Shelby Noble snoble@udr.