Slide 1: Investor Presentation May/June 2017
INVESTOR PRESENTATION MAY/JUNE 2017 UDR, Inc. (NYSE: UDR) has a demonstrated Chief Financial Officer: history of successfully managing, buying, selling, developing and redeveloping Serctiie ecient Joe Fisher | 720-283-6139 real estate properties in top-tier U.S. markets. 2 + S&P 500 Company Investor
Slide 2: UDR at a Glance
UDR at a Glance Why Invest in UDR? Operating Excellence Portfolio Diversification Accretive Capital Allocation Balance Sheet Strength Components of Long-Term AFFO per Share Growth Wrap Up ~ How UDR Creates Value Operating Trends Update 2017 Guidance Appendix Apartment Demographics and Fundamentals 2
Slide 3: UDR at a Glance
UDR is a multifamily REIT that owns, operates, develops and redevelops a diversified portfolio of apartment homes across various top-tier U.S. markets. UDR AT A GLANCE Established in 1972 * 20 Markets * 166 Communities + Same-Store (“SS”) Revenue per Occupied Home: $2,043 50,062 Homes Total Portfoli
Slide 4: Why Invest in UDR?
WHY INVEST IN UDR? UDR’s core objective is to grow high-quality and predictable Adjusted ) Funds From Operations (“AFFO”), dividend and net asset value (“NAV”) per share. The attributes below aid us in executing this objective, which ge total shareholder return (“TSR”). over time, should drive abs O
Slide 5: UDR's Execution Over Time
UDR’S EXECUTION OVER TIME We have executed well on our core objective of driving accretive growth by generating strong AFFO, dividend and NAV per share growth since the publication of our initial Strategic Outlook in February 2013. UDR Per Share Growth (indexed at 100 at YE 2012)!) 2-8 7.6% AFFO/sh
Slide 6: Best-in-Class Operating Platform + Our Diversified Portfolio
in-Class Operating Platform + Our Diversified Portfolio = Better Long- Term, Risk-Adjusted Same-Store Growth Full-cycle investments generate better-than-median risk-adjusted growth versus peers over multi-cycle periods. Our best-in-class operating platform has driven our long-term, same-store growth
Slide 7: Operating Excellence
OPERATING EXCELLENCE The strength of UDR’s best-in-class operating platform is founded on our in- depth market knowledge, our overall operating acumen and continuously innovating to drive results. “Winning” markets is a good gauge of an operator’s expertise. We “win” more than our fair share of mark
Slide 8: Operating Excellence
OPERATING EXCELLENCE Market revenue and expense growth act as governors on how quickly we can grow same-store NOI. Beating the market demands continuous i ion by impl ing revenue-ent ing or expen: ini initiatives. On average, ~80 bps of our annual incremental NOI growth since year-end 2013 has been
Slide 9: Portfolio Diversification
PORTFOLIO DIVERSIFICATIO Our diversified portfolio is a differentiating factor versus peers, appeals to a wide renter and investor audience, lessens market- concentration risk and reduces volatility in our long-term, tore growth. Di isa key component of being a full-cycle investment. % of SS Revenue
Slide 10: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION We create value for shareholders in a variety of ways through accretive capital allocation. Development has been our preferred use of accretive capital since emerging from the “Great Recession.” Recent UDR Developments a In late 2013 we created our Developer Capital Prog
Slide 11: Accretive Capital Allocation: Development Platform
ACCRETIVE CAPIT, DEVELOPMENT PLATFORM Development augments our low-risk operating growth and refreshes our portfolio. Our pipeline fluctuates between $900M and $1.48, a size which can be fully funded through free cash flow and modest asset sales. NON-STABILIZED DEVELOPMENT PIPELINE (AS OF 3/31/2017)
Slide 12: Accretive Capital Allocation: Developer Capital Program
ACCRETIVE CAPITA DEVELOPER CAPITAL PROGRAM Access to apartment construction financing has tightened since mid-2015 while cost to construct has increased. We have taken advantage of this dislocation by investing in alternative development structures that generate strong risk-adjusted returns. Tighten
Slide 13: Accretive Acquisitions
| ACCRETIVE ACQUISITIONS Home Properties Portfoli = ae Completed: Oct. 2015 Location: — Washington, D.C. =si= Homes: 3,246 Size ($M): $901 =EeEIses EES ** Purchased 6 high-quality assets in a bottoming market with =F HSE accretive OP units priced at a premium to NAY, resulting in FFO 7 =n — accretio
Slide 14: Balance Sheet Strength
BALANCE SHEET RENGTH Our balance sheet is safe, liquid and flexible. We are comfortable with our credit metrics and the efficient pricing they provide. 1Q 2017 UDR BALANCE SHEET STATS Debt-to-Gross Asset Value 32.9% Net Debt-to-EBITDA 5.4x kb Safely investment grade Fixed Charge Coverage 4.8x % of N
Slide 15: AFFO/SH Growth
AFFO/SH GROWTH When we consider UDR’s long-term earnings growth potential, we target AFFO per share growth ~450 basis points above the national apartment rent index. This target is driven by our historical operating performance, diversified portfolio, capital structure and accretive external growth,
Slide 16: Wrap-Up — How UDR Creates Value
WRAP-UP — HOW UDR CREATES VALUE UDR is a FULL-CYCLE INVESTMENT ** Better Risk-Adjusted Growth ** Best-In-Class Operating Platform * Generates above peer-median SS growth throughout the cycle AND Portfolio Diversification Less volatile SS growth. vs. peer- median throughout the cycle Reduces market c
Slide 17: Operating Trends Update
OPERATING TRENDS UPDATE SEE PAGE 18 FOR MARKET-LEVEL COMMENTARY ON THE BELOW DATA ‘Annualized SS Effective YOY Blended Naira hd To Effective YOY Renewal arta a) %SS NOI te Gro Pee etor tr il| Lease Rate Growth ath ssarp | ssa [EEC ssi yD oD Market 1017 RUDE) 20179 arse) PO) 20172016 rastington, | so
Slide 18: Operating Trends Update
OPERATING TRENDS UPDATE The YOY change in our blended lease rate growth” is improving. 1Q2016 202016 3Q2016 4Q2016 1Q2017 2017 bieda Blended Rate 5.3% 5.3% 4.1% 2.4% 2.5% 3.8% YOY Change in Blended Rate Growth (bps) 30 (200) (330) (280) (280) (180) YOY UDR SS Blended Lease Rate Growth — - 2016 ——201
Slide 19: Operating Trends Update
OPERATING TRENDS UPDATE Below is a property clock that outlines where we believe growth is trending in our major-market, same-store portfolios at this point in the real estate cycle. Note that markets can move clockwise and counter clockwise. Nashville WN Orange County ey —— New York, NY Tampa a Pea
Slide 20: 2017 Guidance
2017 GUIDANCE”) FFO per common share and unit $0.45 to $0.47 $1.83 to $1.87 FFO as Adjusted per common share and unit $0.45 to $0.47 $1.83 to $1.87 ‘AFFO per common share and unit $0.41 to $0.43 $1.68 to $1.72 ‘Annualized Dividend per common share and unit $1.24 Revenue growth 3.00% to 4.00% Expense
Slide 21: Appendix: Apartment Demographics and Fundamentals
Slide 22: Rental Housing Demographics
RENTAL HOUSING DEMOGRAPHICS Positive demographic trends in the largest (Millennials) and second largest (Baby Boomers) population age cohorts signal continued sustainable and elevated demand for rental housing. U.S. Population by Age Cohort (M) MNon-Foreign Born © Foreign Born a vython: Younger i co
Slide 23: Rental Housing Demographics
ENTAL HOUSING DEMOGRAPHICS The combination of strong population growth in primary renter age cohorts, rising propensity to rent across all age cohorts and a variety of other factors has resulted in renter household formation outpacing owner formation since the mid-2000s. Household Growth by Type (00
Slide 24: Near-Term Rental Drivers
NEAR-TERM REN DRIVERS Demographic drivers have and will continue to provide a beneficial tailwind to apartments. But, employment growth typically drives near- term demand. The overall employment outlook remains solid. Employment Growth o7Total robust through Hi esse 2018. illennial job growth remain
Slide 25: Near-Term Rental Drivers
NEAR-TERM RENTAL DRIVERS 2 Employment growth in UDR’s same-store portfolio is expected to decelerate from 2.3% in 2016 to 1.8% in 2017. Market-level forecasts are more varied, but still point to generally solid employment growth moving forward. UDR’S MARKET-LEVEL EMPLOYMENT OVERVIEW % OF 1Q17 one 10
Slide 26: Near-Term Rental Drivers
NEAR TERM RENTAL DRIVERS Working to counteract the strong employment environment is elevated new apartment supply. 2015 through 2018E deliveries have been, or are forecasted to be, near or above long-term trend. Deflating deliveries by household growth makes for more useful new supply comparisons ov
Slide 27: Near-Term Rental Drivers
NEAR-TERM RENTAL DRIVERS Year-over-year forecast apartment supply growth in UDR’s same-store submarkets varies widely by MSA. On a total same-store basis, the majority of competing supply should be delivered in the first half of 2017. 2017 UDR SAME-STORE SUBMARKET APARTMENT DELIVERY EXPECTATIONS TOT
Slide 28: Forward Looking Statements
FORWARD LOOKING STATEMENTS Forward Looking Statements Certain statements made in this presentation may constitute “forward-looking sta “intends,” “bel ‘plans,” “likely,” “will” “seeks,” “estimates” and variations of such words and similar expressions are int such forward-looking statements. Forward-
Slide 29: UDR Definitions and Reconciliations May/June 2017
Slide 30: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 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 31: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae prior effective rent for the prior lease term on all Management considers Effective Renewal Lease Rate Growth a useful metric for investors as it assesses market- level, in-place demand trends. larket Cap: The market value of all outstanding common stock and equiva
Slide 32: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Activities of our taxable REIT subsisiary (TRS), include development and land enilement. From ti develop and subsequently sell a TRS property which results in a short-term us difers rom the traditional long-term investment in real estate for REITS. gains in FFO is
Slide 33: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a JV Return on Invested Capital (“JV ROIC”): The Company defines JV ROIC as its share of property NOI plus property and asset management fee revenue divided by the average of beginning and ending invested capital for the quarter. Management! considers ROIC a useful me
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Nominal Cap Rate: When the term “cap rate" is used by most market participants, they are refering to a “nominal cap rate”. Nc first year yield a property buyer on his/her investment. Like bond yields, nominal cap rates move inversely with property values - when valu
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Return on Invested Capital (“ROIC”): The Company defines ROIC as a referenced quarter's NOI, annualized, divided by the average of beginning and ending invested capital for the quarter. Management! considers ROIC a useful metric for Hive a prea i iio We Company is
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Management considers Total Revenue per Occupied Home a useful metric for investors as it serves as a proxy for portfolio quality, both geographic and physical. TRS: The Company's anes REIT subsidiary ("TRS") focuses on development, land entitlement and short-term ho
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a) Al guidance is based on curent expectations of flure economic condtions and ihe judgment of the Company’s nt team. The folowing reconels fom GAAP Net Incomes) par share for ful year 2017 and sacond quartet of 2017 to forecasted FFO, FFO as Adjusted and AFFO per sha
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ovat Quarter Ended March 31, 2017 Net income/(loss) $ 28,996 Adjustments: Interest expense 539 Real estate depreciation and amortization 105,032 13,767 Other depreciation and amortization 1,608 Income tax provision/(benefit) EBITDA Casualty-related (recoveries)/charge
Slide 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS os Three Months Ended In thousand: 2017 2016 ‘Net incomei(loss) attributable to common stockholders. s 25098 $s 9.464 Real estate depreciation and amortization 105,092 105,939 Noncontrolng interests 2,429 12m 13,767 10,350 Net oan onthe slo vcs ere propery (12,158) Ne
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