Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (September 2023)
36 slides from Udr's investor presentation, Sep 11, 2023
Slide 1: Investor Presentation September 2023
Columbus Square | New York, NY INVESTOR PRESENTATION SEPTEMBER 2023 GRESB
Slide 2: Table of Contents
TABLE OF CONTENTS (3] Recent Updates @ oR ata Glance (7) UDR Value Proposition i {3} Innovation and Competitive Advantages ® Accretive Capital Allocation and Value Creation ® Market and Resident Attributes ® Strong, Liquid, Flexible Balance Sheet (ic) ESG and Sustainability Leadership ® The Case for
Slide 3: Recent Updates
RECENT UPDATES Apartment fundamentals remain healthy and UDR’s relative competitive advantages in operations, capital allocation, and innovation set us up well for continued strong relative same-store and earnings growth. 3Q 2023 To-Date [2] Strategy Maximizing revenue with a current bias towards bu
Slide 4: Recent Updates - Resident and Market Trends
RECENT UPDATES - RESIDENT AND MARKET TRENDS Demand indicators continue to show strength as consumer financial health remains resilient and relative affordability continues to favor multifamily renting. Steady Rent-to-Income Ratio (“R/I") Growing UDR household income supports strong rent growth while
Slide 5: UDR at a Glance
UDR AT A GLANCE?) UDR is a full-cycle investment that consistently generates strong total shareholder return (“TSR”) through innovation, bestin- class operations, and disciplined capital allocation. 42% Dividend Yield Full-Cycle Continuous Multifamily Investment § Innovation REIT Apartment Homes 5Ye
Slide 6: Diversified Portfolio Composition
DIVERSIFIED PORTFOLIO COMPOSITION UDR is diversified across markets and price points to generate robust growth with less risk. Price Point and Location Within Market Northeast/Mid Atlantic: = A-Quality B-Quality 39% of NOI West Coast 35% of NOI 56% = Coastal A = Sunbelt A Coastal B ‘Sunbelt B 66% 52
Slide 7: UDR Value Proposition
UDR VALUE PROPOSITION Innovation fran) Differentiated a j? Operations MarketSelection ~ Self-service andimproved —- Predictive analytics and Durable competitive resident experience qualitative analyses to advantages boost yields help identity investment ~ Expand margins and divestment markets Histor
Slide 8: Innovation Accomplishments
INNOVATION ACCOMPLISHMENTS UDR’s history of innovation has delivered better SS NOI growth and controllable operating margin versus peers. Long-Term Same-Store Outperformance Controllable Operating Margin (“COM”) Expansion UDR vs. Peer Median SS NOI Growth (2013-2023) Controllable Operating Margin vs
Slide 9: Innovation = Repeatable, Consistent Value Creation
INNOVATION = REPEATABLE, CONSISTENT VALUE CREATION UDR’s ongoing innovation drives outsized same-store NOI growth in our legacy portfolio and yield expansion when we externally grow. This has contributed to UDR generating better than peer average FFOA per share growth in 7 of the past 10 years. Our
Slide 10: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION UDR has a track record of being a proficient steward of capital and can utilize various external growth value creation drivers. Capital Allocation During the Apartment Cycle ($M) [EEUDR Prem /(Disc.)to NAV (hs) $2,000 Net Acquisitions (rhs) $1,500 Issue equity at a premi
Slide 11: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION Our wide variety of value creation drivers provides UDR the latitude to pivot toward investment opportunities that generate the highest risk-adjusted IRRs and the greatest eamings/NAV accretion. These include: ‘Arborsat Maitland Sumirit| Orlando, FL + Target 10%-15% NOI
Slide 12: Recent External Growth Activity
RECENT EXTERNAL GROWTH ACTIVITY We utilized access to alternative sources of capital to execute ~$900 million of transactions across 2 deals since lateJune. As outlined below, both offer attractive expected long-term eamings accretion from meaningful embedded growth opportunities. aSalle Joint Ventu
Slide 13: Diversified and High-Quality Resident Base
DIVERSIFIED AND HIGH-QUALITY RESIDENT BASE) Household income, wage growth, and resident credit quality support current and future demand. $162K Average annual household income Seattle ‘Avg. Household Income ($000s): $176 vs. MSA Median Income: isex | | © ‘% High-Income MSA Jobs: * 6 ‘San Francisco B
Slide 14: Resident Attributes and Trends
RESIDENT ATTRIBUTES AND TRENDS. Resident Age Distribution® Balanced resident composition minimizes risk of exposure to specific age cohorts. 30% 25% 20% ‘Average Resident Age: 36 Median Resident Age: 34. 15% 40% 5% 0% Under 25 Resident Tumover since 2018 Pre-COVID:Feb2020 = Current 27% | | 45+ Robus
Slide 15: Strong, Liquid, Flexible Balance Sheet
STRONG, LIQUID, FLEXIBLE BALANCE SHEET Sector-leading weighted average interest rate and robust liquidity ($1.1 billion) plus strong, and improving, leverage metrics support growth opportunities and reduce risk. Strong Leverage Metrics Well Laddered Maturity Schedule BBB+ 25.8% 6.3 years S&P Unsecur
Slide 16: ESG and Sustainability Leadership
ESG AND SUSTAINABILITY LEADERSHIP UDRis a recognized global ESG leader and is committed to further enhancing our ESG profile.) GRESB Score of 87 Public Disclosure LEED Certifications SDG Alignment Earned a 5 Star Earned GRESB Public Developed, redeveloped, or Aligned with 10 United Designation, the
Slide 17: Appendix
APPENDIX
Slide 18: The Case for Apartment REITs
THE CASE FOR APARTMENT REITS Apartment REIT TSR has outperformed other REITs and the broader market by a wide margin since 2000 due to: Ongoing shortage Increased Housing's status as Better long-term NOI of U.S. housing propensity to rent a necessary, non- J growth + lower capex discretionary expens
Slide 19: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS Long-term demographics remain strong for apartments. Since 2010, approximately 30% fewer total housing units have been produced versus total households formed over the same period. U.S. POPULATION BY AGE COHORT (MILLIONS) PROPENSITY TO RENT BY AGE COHORT oe m=
Slide 20: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS Low absolute and relative affordability represent a barrier to single-family ownership, resulting in a larger potential multifamily renter pool. Third-party forecasts indicate ~5 million additional apartments will be needed by 2030 to satisfy housing demand, t
Slide 21: Notes
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Slide 22: Notes
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Slide 23: Notes
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Slide 24: 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 ide
Slide 25: Definitions and Reconciliations
022 ESG REPoRr 9022 GRESB 5 STAR RATINg zt | DEFINITIONS AND RECONCILIATIONS SEPTEMBER 2023
Slide 26: Definitions and Reconciliations A2
DEFINITIONS AND RECONCILIATIONS A2 ‘Acquired Communities: The Company defines Acquired Communities as these 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 27: Definitions and Reconciliations A3
DEFINITIONS AND RECONCILIATIONS AS Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses. Controtiable Operating Margin: The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (il) divided by renta
Slide 28: Definitions and Reconciliations A4
DEFINITIONS AND RECONCILIATIONS AA 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 Rat
Slide 29: Definitions and Reconciliations A5
DEFINITIONS AND RECONCILIATIONS AS 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 im
Slide 30: Definitions and Reconciliations A6
DEFINITIONS AND RECONCILIATIONS A6 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 31: Definitions and Reconciliations A7
DEFINITIONS AND RECONCILIATIONS AT Physical Ocaupancy: 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 decr
Slide 32: Definitions and Reconciliations A8
DEFINITIONS AND RECONCILIATIONS AS ‘Stabilization/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 c
Slide 33: Definitions and Reconciliations A9
DEFINITIONS AND RECONCILIATIONS Ag 2023 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 third quarter of 2023 and full-year 2023 to forecasted F
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ‘souree: Company socuments, Quarter Ended Coverage Ratios June 30, 2023 Net income/(loss) $ 370,183 Adjustments: Interest expense, induding debt extinguishment and other associated costs 45,113 Real estate depreciation and amortization 168,925 Other depreciation and a
Slide 35: Definitions and Reconciliations A11
DEFINITIONS AND RECONCILIATIONS AAL ‘Three Morths Ended ‘Six Months Ended June 30, June 30, In thousands, except per share ard unit amounts 2022 Net income/(loss) attributable common stockholders ee eC Real este deprestion and amortantion 163925 167.588 saa225 391,208 Noncontratingimeress 22638 280
Slide 36: 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 ide