Elme Communities · NYSE:ELME
Elme Communities — Q1 2025 Earnings Presentation
53 slides from Elme Communities's earnings presentation, May 2, 2025
Slide 1: Investor Presentation
Investor Presentation May 2025
Slide 2: Disclaimer and Forward-Looking Statements
This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of Elme Communities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of su
Slide 3: Table of Contents
Table of Contents About Us 04 Q1 Update 10 Current Market Dynamics 17 Research-Led Capital Allocation 21 Multifamily Strategies and Target Market 31 Environmental, Social, Governance 35 Appendix 40 3
Slide 4: About Us
About Us
Slide 5: Elme at a Glance
Affordable Rents ~3K Home Renovation Pipeline Value-oriented price points provide Opportunity to renovate and insulation from new supply and generate solid cash-on-cash returns favorable long-term demand outlook Elme at a Glance Operational Upside Strong Resident Retention We are a research-led mult
Slide 6: Apartment Portfolio Overview
Apartment Portfolio Overview REGION LOCATION DENSITY CLASS A 4% DC 9% B 10% A- 7% Atlanta Metro MD 25% 7% Suburban Urban 49% 51% Northern Virginia 59% B Value-Add 79% Washington Metro 75% ~9,400 ~3,000 $2.4 - 2.6M Apartment Homes 5 Year Renovation Pipeline Anticipated Operational Upside (homes) (202
Slide 7: Washington Metro Elme Communities
Washington Metro Elme Communities Yale West ~23% Median Rent to Income New Residents / Q2 2024 – Q1 2025 Avg. 1.66 Elme Manassas Average Household Size as of March 2025 36.7 Average Resident Age Bennett Park as of March 2025 Over 75% of our Washington Metro apartment homes are in Northern Virginia,
Slide 8: Atlanta Metro Elme Communities
Atlanta Metro Elme Communities Elme Marietta ~22% Median Rent to Income New Residents / Q2 2024 – Q1 2025 Avg. 1.65 Elme Sandy Springs Average Household Size as of March 2025 36.0 Average Resident Age Elme Druid Hills as of March 2025 Source: Elme Communities March 2025 demographic data Elme Cumberl
Slide 9: Watergate 600
Watergate 600 • Watergate 600 has a high-quality institutional tenant base and a weighted average lease term of approximately 5.1 years • As our sole remaining commercial asset, Watergate 600 is an iconic building with high quality institutional tenant base • 2025 assumption: NOI is expected to rang
Slide 10: Q1 2025 Update
Q1 2025 Update
Slide 11: Direct exposure to federal employment is limited
Elme Bethesda Map of communities with highest 13% 1% exposure to federal employment Direct exposure to NIH Share of Elme Community residents with federal agency jobs (excl. DoD) federal employment Share of Elme Community residents with federal contractor jobs is limited 7% Kenmore 1% Ashby at McLean
Slide 12: Same-store operating trends remain strong and seasonally aligned
Same-store operating trends remain strong and seasonally aligned Average Occupancy Effective Blended Lease Rate Growth Quarterly Bad Debt to Revenue1 2025 Same-store portfolio 2025 Same-store portfolio 2025 Same-store portfolio 96.0% 4.0% 4.0% 3.5% 95.5% 3.5% 3.0% 3.0% 95.0% 2.5% 2.5% Q2 Estimate 94
Slide 13: Operational improvements driving better performance and profitability
Operational improvements are driving better Operationaland performance improvements driving profitability better from ourperformance portfolio and profitability Managed WiFi Optimized New Fee (Phases I and II, Occupancy Streams 11 communities) Occupancy gains due to faster Fee income from renter $60
Slide 14: Renovations driving above-market growth
Renovations driving Before After above-market growth Our renovation pipeline of ~3,000 units represents more than enough runway to deliver renovation-led value creation for the foreseeable future. Cost Per Unit: $5,000 (partial) - $16,000 (full renovation) ELME PROGRAM STRENGTHS: Total 2025 Expected
Slide 15: 2025 Guidance and Assumptions
2025 Guidance and Assumptions1,4 Core FFO per diluted share 2 $0.91 - $0.97 Same-store Multifamily Revenue Growth 2.1% - 3.6% Same-store Multifamily Expense Growth 2.75% - 4.25% Same-store Multifamily NOI Growth 1.5% - 3.5% Other same-store NOI 3 $11.5 million - $12.25 million Property Management Ex
Slide 16: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet Our investment grade balance sheet provides optionality and ample liquidity BBB / Baa2 100% 5.6x ~64% Investment Grade Unsecured Debt Net Debt to Adjusted Capacity under the Ratings Annualized EBITDA1 amended credit facility1 $400 Debt Maturity Schedule ($ in millio
Slide 17: Current Market Dynamics
Current Market Dynamics
Slide 18: Annual Net Inventory Growth
Annual Net Annual Net Inventory Growth Inventory Growth Elme Submarkets, US, Sunbelt1 6.0% 5.1% Relative to the US and Sunbelt 5.0% Markets, Elme submarkets are 4.0% 3.8% expected to have lower supply 2.9% pressure with a projected average 3.0% 2.4% of 2.1% annual net inventory 1.9% 2.1% 2.0% growth
Slide 19: Absorption Outlook
Annual Demand Absorption Outlook Elme Washington Submarkets 12,000 Projected 10,000 8,000 6,000 Annual Demand 4,000 Washington and Atlanta Metros 2,000 30,000 0 Projected -2,000 25,000 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Elme WSH Submarkets Annual Demand Total 20,000 Elme WSH
Slide 20: Construction Activity Outlook
Units Under Construction Annual Unit Starts Construction Activity Outlook WSH Metro change since -54% peak in 3Q ‘22 -74% change since peak in 3Q ‘22 Units under construction declined by 54% and 56% in the Washington and Atlanta metros respectively, relative to change since change since their recent
Slide 21: Research-Led Capital Allocation
Research-Led Capital Allocation 21
Slide 22: Competitive Differentiation
Competitive Differentiation We have a disciplined strategy targeting the deepest part of the demand curve, in economically dynamic markets and submarkets. These generators of strong demand coupled with price point supply insulation result in a track record of rent growth outperformance in our target
Slide 23: Long-Term Residents Drawn by Relative Affordability
Long-Term Residents Drawn by Relative Affordability Median HH Median Rent Avg. Avg. Median Home Cost to Own Move Outs to Income1 to Income1 Age2 Tenure2 Price in Elme Entry-Level Purchase a New New Current Current Zip Codes3 Home vs. Rent at Home5 Residents Residents Residents Residents Elme3 Washin
Slide 24: Elme Residents: Stable Employment Near Our Communities
Elme Residents: Stable Employment Near Our Communities Our residents are employed in stable to high-growth industries and enjoy the convenience of living strategically near their workplaces. Industry Legend Top Industries of New Residents at Elme Government as of March 2025 Professional, Scientific,
Slide 25: Key Desirable Strengths in Northern Virginia
Key Desirable Strengths in Northern Virginia ~19% ~15% ~11% ~9% ~7% Top Industries1,3 Approximately 60% of Elme’s multifamily homes are in Northern Virginia. Our NoVa communities have a weighted net inventory growth rate of just 1.1% projected over the next four quarters.2 ~23.3% / ~$98K NoVa’s dyna
Slide 26: Price Point Insulation from New Supply
Price Point Insulation from New Supply Total Market Rent Distribution vs. New Product (2021+) Deliveries WSH Metro – Q1 2025 16.0% Peer REITs at 112% Median 95% Median 14.0% 12.0% ~11% of new product By targeting Class B rents priced delivered falls below 95% below 95% of market median, 10.0% market
Slide 27: Price Point Insulation from New Supply
Price Point Insulation from New Supply Total Market Rent Distribution vs. New Product (2021+) Deliveries Atlanta Metro – Q1 2025 16.0% Peer REITs at 109% Median 95% Median 14.0% 12.0% ~17% of new product By targeting Class B rents priced delivered falls below below 95% of market median, 10.0% 95% ma
Slide 28: Affordability and Target Vintage Rent Growth Outperformance
Affordability and Target Vintage Rent Growth Outperformance Housing affordability is under pressure – especially for our target residents. Additionally, Class B1 product is insulated from new supply, with affordability gap between 20% to ~60% in additional monthly rent to move to new product. Mid-Ma
Slide 29: Affordability Gap in the Atlanta Market
Affordability Gap in the Atlanta Market Rent Gap and Quarterly Effective Rent Class B Vintage vs. Class A Vintage1 Q2 2020 through Q1 2025 $600 $2,200 $500 $2,000 $400 $1,800 Effective Rent Market Rent Gap $300 $1,600 $200 $1,400 $100 $1,200 $0 $1,000 Rent Gap Elme In-Place Rent Gap (Class A Vintage
Slide 30: Elme Rent Vs. Cost to Own
Elme Rent Vs. Cost to Own Affordability Gap Between Renting and Owning Monthly Mortgage Payment1 and Elme In-Place Rent Atlanta and Washington – Q1 2025 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 ATL Metro / Elme ATL 30013 Zipcode / Elme 30281 Zicode / Elme 30350 Zipcode / Elme 30080 Z
Slide 31: Multifamily Strategies & Target Market
Multifamily Strategies & Target Market 31
Slide 32: Portfolio Strategies
CLASS A- VINTAGE: 2000s PRICE POINT: 100% – 110% of market median rent RENT GROWTH DRIVERS: Operational improvements, unit upgrades, prop-tech, submarket rent growth, future renovations Portfolio Strategies CLASS B VALUE-ADD VINTAGE: 1980s, 1990s, 2000s PRICE POINT: 80% – 95% of market median, We ta
Slide 33: Primary Resident Segmenting and Strategy
CLASS A- • Mix of single householders and married couples in their Renters are partial to city living and mid-20s to late-30s. convenience — our Class A- strategy • Environmentally, health, and image conscientious — all impacting their focuses on urban and suburban purchasing decisions. Primary Resi
Slide 34: Execution Track Record Continues
Execution Track $1.6 Billion of Value-Oriented Multifamily Investments since 2015 Record Continues Since 2013, we completed ~$5.1 billion of strategic portfolio transactions to significantly reduce concentrations of non-core retail and office assets, while becoming a value-oriented multifamily Elme
Slide 35: Environmental, Social, Governance
Environmental, Social, Governance 35
Slide 36: Demonstrating Leadership in ESG
Demonstrating Leadership in ESG We believe that sustainable and healthy buildings should be available to all price points, including the value living sector. 1.1M SF of communities certified In Q3 of 2024, Elme became an EPA to Fitwel Health & Wellness Standards ENERGY STAR® Partner, affirming our c
Slide 37: Reporting and Ratings
Reporting and Ratings Improving our ESG Ratings1 • MSCI: In Feb 2025, we upgraded to an A rating within MSCI’s ESG Ratings Program, demonstrating our continued efforts and success deploying a holistic ESG program. • ISS: In 2024, we achieved a “Prime” status within the ISS Corporate ESG Performance
Slide 38: Our Commitment to Financial Inclusion
Our partnership has provided $461,000+ Our Commitment to Financial Inclusion in rent support, established 1,100+ credit scores, and we have 13,300+ residents reporting1 99%2 Homes affordable to households earning the Area Median Income (AMI) 94% Homes affordable to households earning 80% of AMI 42%
Slide 39: Our Commitment to the Environment
Solar Panels at 3801 Connecticut Our Commitment to the Environment We are delivering on opportunities to bring clean energy to the value living sector. Solar Production 1,502,193 kWh Solar Production through Q1 2025 >2,024,000 +15,000 Equivalent Number of Lbs. of GHG Trees in Sequestered Emissions A
Slide 40: Appendix
Appendix 40
Slide 41: Renovation Case Study: Elme Manassas
Renovation Case Study: Elme Manassas Creating value through renovations that impact resident experience and margin expansion Acquired (2019) 10/31/2024 Change Before After Revenue (T12) $6.8M $8.8M 29.5% NOI (T12) $4.4M $6.0M 37.7% NOI Margin 64.0% 68.1% + 406 bps Avg. Eff. Monthly Rent $1,402 $1,80
Slide 42: Strategic Transformation
Strategic Transformation 2021 2022 2023 2024 & Beyond • Transformed into a multifamily- • Initiated the execution of a major • Transitioned to a best-in-class technology platform • Execute on advancing operational focused REIT by selling our office and one-year infrastructure and • Implemented a hum
Slide 43: Community Details
Community Details NRSF Properties Location Class Homes (000s) Strategy Diversification Cascade at Landmark Alexandria, VA B Value-Add 277 273 Percentage of NRSF Clayborne Alexandria, VA A- 74 60 Elme Alexandria Alexandria, VA B Value-Add 532 437 Riverside Apartments Alexandria, VA B Value-Add 1,222
Slide 44: Financials from Q1 2025 Supplement
Financials from Q1 2025 Supplement (1) Certain immaterial amounts in prior periods have been reclassified to conform with the current period presentation (2) Adjusted EBITDA is a non-GAAP measure. See “Definitions” for the definition of Adjusted EBITDA. 44
Slide 45: Financials from Q1 2025 Supplement
Financials from Q1 2025 Supplement (1) Adjusted EBITDA is a non-GAAP measure. See “Definitions” for the definition of Adjusted EBITDA. 45
Slide 46: Financials from Q1 2025 Supplement
Financials from Q1 2025 Supplement 46
Slide 47: Financials from Q1 2025 Supplement
Financials from Q1 2025 Supplement (1) See “Definitions” for the definitions of non-GAAP measures: NAREIT FFO and Core FFO. (2) Structuring expenses during Q1 2025 include advisory and legal services provided by third parties related to our previously announced formal strategic review alternatives a
Slide 48: Financials from Q1 2025 Supplement + Guidance Reconciliation
Financials from Q1 2025 Supplement (1) See “Definitions” for the definitions of non-GAAP measures: NAREIT FFO, Core FFO, AFFO and Core AFFO (2) Structuring expenses during Q1 2025 include advisory and legal services provided by third parties related to our previously announced formal strategic revie
Slide 49: Financials from Q1 2025 Supplement
Financials from Q1 2025 Supplement (1) Utility costs reimbursed by residents are included in real estate rental revenue on our consolidated statements of operations. Utility reimbursements totaled $2.4 million, $2.4 million, $2.3 million, $2.1 million and $2.4 million for the three months ended Marc
Slide 50: Financials from Q1 2025 Supplement + Guidance Reconciliation
Financials from Q1 2025 Supplement + Guidance Reconciliation 50
Slide 51: Definitions
Definitions Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain/loss on sale of real estate, casualty gain/loss, real estate impairment, gain/loss on extinguishment of debt, gain/loss on interest rate derivatives, severance expense, acquisition expenses, gain
Slide 52: Definitions
Definitions Average Effective Monthly Rent Per Home represents the average of effective rent (net of concessions) for in-place leases plus the market rent for vacant homes, divided by the total number of homes. We believe Average Effective Monthly Rent Per Home is a useful metric in evaluating the a
Slide 53: Elme Communities “elevating home”
Elme Communities “elevating home” Investor Relations Amy Hopkins ahopkins@elmecommunities.com www.elmecommunities.com