Slide 1: NAREIT Presentation November 2014
UDR, Inc. (NYSE: UDR), has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive real estate properties in primary U.S. markets • S&P 400 Company • $13 Billion Enterprise • 2014 Annualized Dividend of $1.04, ~3.4% Yield CFO: Tom Herzog 720.283.6139
Slide 2: Table of Contents
TABLE OF CONTENTS Cirque – Dallas, TX UDR/MetLife II Joint Venture UDR, Inc. TABLE OF CONTENTS PAGE About UDR, Inc. 3 Recent Highlights 4 3-Year Outlook / Strategic Priorities 5 Capital Allocation 6 Development Pipeline 7 Development Value Creation 8 Development Progress 9 Future Development / Fundi
Slide 3: About UDR, Inc.
ABOUT UDR, INC. 3 (1) As of September 30, 2014. Source: Company documents. UDR STATS(1) • 22 Markets • 181 Communities • 51,699 Homes • Same-Store Revenue per Occupied Home: $1,619 • Total Portfolio Revenue per Occupied Home: $1,779 • Average Age of Communities: 16 years • Approximately 45% / 55% A
Slide 4: Recent Highlights
RECENT HIGHLIGHTS 4 GENERATED STRONG 3Q14 SAME-STORE RESULTS AND RAISED FY REV GUIDANCE • SS Revenue Growth: 4.4% versus 3.9% multifamily peer REIT average • Raised FY 2014 SS guidance 25 bps at the midpoint to 4.00% - 4.50% • SS NOI Growth: 5.1% versus 4.7% multifamily peer REIT average • FY 2014 S
Slide 5: 3-Year Outlook / Strategic Priorities
Will Drive Value Creation and Total Shareholder Return (TSR) 4 2 3 3-YEAR OUTLOOK / STRATEGIC PRIORITIES WE REMAIN HIGHLY FOCUSED ON THE CONTINUED EXECUTION OF THE STRATEGIC PRIORITIES IN OUR 3-YEAR PLAN ALLOCATE CAPITAL TO ACCRETIVE GROWTH PROSPECTS THAT STRENGTHEN OUR MARKET MIX, PORTFOLIO QUALITY
Slide 6: Capital Allocation
CAPITAL ALLOCATION ALLOCATE CAPITAL TO ACCRETIVE GROWTH PROSPECTS THAT STRENGTHEN OUR MARKET MIX, PORTFOLIO QUALITY AND GROWTH RATE DEVELOPMENT CURRENTLY OFFERS THE BEST OPPORTUNITY 6 Columbus Square – NYC, NY UDR/MetLife II Joint Venture
Slide 7: Development Pipeline
(1) As of September 30, 2014. Includes consolidated joint ventures of which UDR owns 95%. (2) As of September 30, 2014. (3) UDR has the option to purchase the property upon completion of construction and receives 50% of the upside upon acquisition of the asset or sale to a third party. (4) A portion
Slide 8: Development Value Creation
8 DEVELOPMENT VALUE CREATION DEVELOPMENT IS EXPECTED TO GENERATE STRONG CASH FLOW AND NAV GROWTH OVER TIME TAKEAWAYS • The estimated cash flow generated by development projects from 2014-2016 is expected to offset the associated drag • Cumulative NAV/sh accretion is estimated at $2.10 from 2014-2016
Slide 9: Development Progress
DEVELOPMENT PROGRESS 9 PROGRESS OF DEVELOPMENT PROJECTS • Some of our development projects are outperforming versus expectations, some are in-line and some are underperforming • In aggregate, the weighted average spread between estimated stabilized yields and current cap rates is 190 to 195 bps. Ren
Slide 10: Future Development / Funding Development
FUTURE DEVELOPMENT 10 WE HAVE $274 MILLION LEFT TO FUND ON OUR CURRENT $1.0 BILLION PIPELINE Source: Company documents. $0 $200 $400 $600 $800 $1,000 $1,200 Remaining to Fund: $274M; 27% of Pipeline FUNDING DEVELOPMENT • Sales from our $1.3 billion portfolio of non-core and capital warehouse propert
Slide 11: Where We Develop and Why
37% 38% 32% 32% 30% 21% 18% 17% 15% 13% 48.6% 42.8% 48.6% 42.0% 47.6% 35.3% 37.9% 32.1% 32.7% 38.3% 0% 10% 20% 30% 40% 50% 60% Orange County San Fran. Bay Area L.A. San Diego New York Boston Seattle Metro DC National Dallas Home Affordability and Propensity to Rent Avg. Mortgage Payment to Income Pr
Slide 12: Joint Ventures
6.3% 8.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% ROIC ROE 3Q 2014 Joint Venture ROIC and ROE (1) As of September 30, 2014. (2) Measured at gross book value at 100%. Source: Company documents. Columbus Square – New York, NY UNCONSOLIDATED JV SIZE ($M)(1,2) OWN. INTEREST TYPE MetLife $2,790 48% Long-term part
Slide 13: Operations
OPERATIONS DRIVE ORGANIC GROWTH AND IMPROVE RESIDENT / ASSOCIATE SATISFACTION THROUGH OUR BEST-IN- CLASS OPERATING PLATFORM 13 Garrison Square – Boston, MA Wholly-Owned
Slide 14: Operational Excellence
OPERATIONAL EXCELLENCE (1) Excludes historical BRE and CLP results. Source: Company documents and forecasts and peer documents. 3.8% 3.0% 3.5% 4.0% 4.5% 5.0% UDR Multifamily Peer Median 2014 Same-Store Revenue Growth Guidance …AND EXPECTATIONS ARE FOR CONTINUED STRENGTH IN 2014 44% 29% 20% 30% 40% 5
Slide 15: Cash Flow, Dividend and NAV Growth
CASH FLOW, DIVIDEND AND NAV GROWTH GENERATE HIGH-QUALITY CASH FLOW GROWTH TO DRIVE DIVIDEND AND NAV PER SHARE GROWTH 15 Capitol View on 14th – Washington, DC Wholly-Owned
Slide 16: Creating Value Over Time
CREATING VALUE OVER TIME (1) Consensus estimates per BMO Capital Market’s Morning Brew Report. (2) Assuming a flat cap rate environment. Source: Company documents and forecasts and peer documents and BMO Capital Markets. 16 DEVELOPMENT EARN-IN AND SOLID OPERATING RESULTS WILL DRIVE OUR CASH FLOW AND
Slide 17: Balance Sheet
BALANCE SHEET MAINTAIN A STRONG AND FLEXIBLE BALANCE SHEET WHILE SEEKING TO FURTHER IMPROVE OUR METRICS OVER TIME 17 Edgewater – San Francisco, CA Wholly-Owned
Slide 18: Balance Sheet Management
METRIC YE 2009A YE 2013A YE 2014E YE 2016E YE 2016E – NO NEW EQUITY Debt-to-assets 53% 39% 38% to 40% 35% to 38% 38% to 40% Net debt-to-EBITDA 10.0x 7.0x 6.3x to 6.7x 5.6x to 6.2x 6.0x to 6.6x Fixed Charge Coverage 2.0x 3.1x 3.4x to 3.6x 3.6x to 3.8x 3.3x to 3.5x BALANCE SHEET MANAGEMENT 18 1 2 FOCU
Slide 19: Appendix
UDR, Inc. Appendix PAGE 2014 Guidance 20 Operating Trends Update 21 2014 Market Growth Expectations 22 Apartment Fundamentals 23 Definitions and Reconciliations 27 19 Elements Too – Seattle, WA Wholly-Owned
Slide 20: 2014 Guidance
2014 GUIDANCE 20 FFO AND AFFO PER SHARE GUIDANCE 4Q 2014E FULL-YEAR 2014E FFO per common share $0.38 to $0.40 $1.54 to $1.56 FFO as Adjusted per common share $0.38 to $0.40 $1.51 to $1.53 Adjusted Funds from Operations (“AFFO”) $0.33 to $0.35 $1.34 to $1.36 Weighted average diluted shares/units (M)
Slide 21: Operating Trends Update
(1) October 1st through October 31st. Source: Company documents. OPERATING TRENDS UPDATE(1) 21 % Total NOI % SS NOI Effective YOY SS New Lease Rate Growth Effective YOY SS Renewal Lease Rate Growth Annualized SS Turnover as of October 31 Same-Store (SS) Market 3Q 2014 3Q 2014 October 2014(1) October
Slide 22: 2014 Market Growth Expectations
(1) Revenue growth based on UDR’s current 2014 forecast. Source: Company documents. Core Markets: Seattle, San Francisco Bay Area, Los Angeles, Orange County, San Diego, Denver, Austin, Dallas, Boston, New York, Baltimore/Washington DC area and Philadelphia. Capital Warehouse Markets: Portland, Inla
Slide 23: Apartment Fundamentals
13th and Market – San Diego, CA Development Lease-up 23 APARTMENT FUNDAMENTALS
Slide 24: Apartment Fundamentals (Demand)
(100%) (50%) 0.% 50.% 100.% 150.% 200.% 20 25 30 35 40 45 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015E Renter Households (M, left-axis) Renter Capture Rate (%, right-axis) APARTMENT FUNDAMENTALS (DEMAND) -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 2002 2004 2006 2008 2010
Slide 25: Apartment Fundamentals (MF Supply)
When comparing expected job growth to new supply in our major markets from 2014 through 2016, our portfolio is well positioned APARTMENT FUNDAMENTALS (MF SUPPLY) 25 Washington, DC New York San Francisco Seattle Boston Dallas Baltimore Los Angeles Austin Other S. CA National 2% 6% 10% 14% 18% 0.50 0.
Slide 26: Apartment Fundamentals (SF Housing)
(1) Most current actual data as of October 30, 2014. Source: U.S. Census Bureau, Axiometrics, National Association of Realtors and Freddie Mac. Demand for single-family homes continues to slowly improve although recent data points call into question the vitality of the recovery. At the same time, in
Slide 27: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS 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"): T
Slide 28: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Activities of our taxable REIT subsidiary (TRS), RE3, include development and land entitlement. From time to time, we develop and subsequently sell a TRS property which results in a short- term use of funds that produces a profit that differs from the traditional long
Slide 29: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS QTD Same-Store ("SS") Communities: The Company defines QTD SS Communities as those communities stabilized for five full consecutive quarters. These communities were owned and had stabilized occupancy and operating expenses as of the beginning of the quarter in the pri
Slide 30: Definitions and Reconciliations
Net Debt to EBITDA: The Company defines net debt to EBITDA as total debt net of cash and cash equivalents divided by EBITDA. EBITDA is defined as net income, excluding the impact of interest expense, real estate depreciation and amortization of wholly owned and other joint venture communities, other
Slide 31: Definitions and Reconciliations
(1) 2014 adjustment relates to estimated damages at our Rosebeach community in California as a result of the earthquake in March 2014. 2013 adjustment primarily represents the portion of Hurricane Sandy insurance recoveries in 2013 that relate to the $9.3 million in charges added back to FFO as Adju
Slide 32: 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 33: Notes
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Slide 36: Investor Relations Contact
Investor Relations Contact: Chris Van Ens cvanens@udr.com 720.348.7762