Udr, Inc. · NYSE:UDR
Udr — United Dominion Realty Trust — 2005 Real Estate Conference (Credit Suisse First Boston)
22 slides from Udr's conference presentation, Apr 7, 2005
Slide 1: 2005 Real Estate Conference: Value Creation Over Time
United Dominion Realty Trust 2005 Real Estate Conference April 7,2005 CREDIT SUISSE FIRST BOSTON Value creation Over Time We Look at a More Basic Measure of Success UDR LISTED NYSE
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the Company’s use of words such as, “e
Slide 3: Today's Agenda
Today’s Agenda United Dominion Realty Trust Overview Summary of Operations Future Growth Drivers Operations Markets Acquisitions/Sales/Developments Asset Quality Balance Sheet Reasons to Buy UDR United Dominion Realty Trust
Slide 4: UDR Overview
UDR Overview 4 th largest apartment REIT Percents indicate expected 2005 cash flow contribution Approximately 79,000 apartment homes $6 billion total market cap NYSE: UDR Focused on middle-market apartments Affordable by 75% of renters More resilient to economic downturns 250,000 residents Lower ris
Slide 5: UDR Overview: Positioned for Above-Average Growth
UDR Overview Positioned for Above-Average Growth Improving Operating Trends Asset Quality Portfolio Position United Dominion Realty Trust
Slide 6: Summary of Operations: 2005 Early Results
Summary of Operations 2005 Early Results Occupancy At 94% range – up 100 bps 88% of markets above 92% 91% of portfolio above 94% Rents Per occupied home — $720 Increase $10 Increase 1.3% prior years Reimbursements Up 12% over prior year Concessions Down 13% over prior year Expenses Full year over ye
Slide 7: Summary of Operations: Revenue Growth by Market
Summary of Operations Revenue – Early 2005 Year Over Year Growth Hot, Hot — >5% Hot — 2% to 5% Cold — 0% Baltimore Atlanta Columbus Metro D.C. Austin Dallas Orlando Charlotte Houston Phoenix Nashville No. California Richmond Portland Raleigh So. California S. Carolina Seattle Tampa United Dominion R
Slide 8: Operations: Margin Improvement
Future Growth Drivers Operations Margin Improvement Today: 60% Full Recovery: 65% Each 1% Improvement = Over $6 million in Net Operating Income Margin Drivers Occupancy Utility Reimbursements Rent Increases Other Growth Drivers Lower Resident Turnover $1,600 in lost revenue for every resident that l
Slide 9: Markets
Future Growth Drivers Markets After $2.9 billion in acquisitions/sales over 4 years 2/3 of portfolio changed Approximately 50% 2005 NOI from CA, FL, DC/Maryland 94% of 2005 NOI in high job growth states. Projected to add approximately 1 million jobs in 2005 United Dominion Realty Trust
Slide 10: Portfolio Position = Multiple Expansion
Future Growth Drivers Portfolio Position = Multiple Expansion Amongst our peers those with the highest multiple have significant presence in high growth markets Approximately 25% of 2005E NOI from California – representing the fastest growing state in terms of population, jobs and the lowest housing
Slide 11: Acquisitions & Sales
Future Growth Drivers Acquisitions & Sales 1Q Acquisitions Coronado South in CA — $106 million/ 5.5% cap rate 1Q Sales Houston/Phoenix — $69 million/ 5.5% cap rate Pipeline Very efficient market for buyers/sellers $1.4 billion under review for potential acquisition at 5.7% cap rate $239 million in s
Slide 12: Developments
Future Growth Drivers Developments Prudent development pipeline of $125 million with an expected average return of 8%. DEVELOPMENT SUMMARY DECEMBER 31, 2004 (Dollars in thousands, except Cost Per Home) (Unaudited) UNITED DOMINION — WHOLLY OWNED — UNDER DEVELOPMENT Expected Expected No. of Apt. Compl
Slide 13: Asset Quality
Future Growth Drivers Asset Quality ROI Focus Kitchen/Bath Rehabs Three-year investments in asset quality paying off United Dominion Realty Trust
Slide 14: Asset Quality: Kitchen ROI
Future Growth Drivers Asset Quality: Kitchen ROI Can be completed in 48 hours $4,500 to $5,000 per home 6,707 homes approved 2002 to present Average return of 12% to 18% Before After United Dominion Realty Trust
Slide 15: Asset Quality: Full Rehabs 2002 to 2004
Future Growth Drivers Asset Quality: Full Rehabs: 2002 to 2004 Dollars Name # of Homes Location Spent Returns Windjammer 268 Huntington Beach, CA $3.2M 9% — 11% Harbor Greens 385 Costa Mesa, CA 5.3M 9% — 11% Pinebrook 200 Costa Mesa, CA 2.2M 9% — 11% Huntington Vista 220 Huntington Beach, CA 2.2M 9%
Slide 16: Asset Quality: Value of Reinvesting
Future Growth Drivers Asset Quality Realize value of reinvesting during the last 3 years 2004 2002-2004 ROI: (in millions) Kitchens/Baths $23 $34 Other 19 39 Limited Scope & Full Rehabs 29 46 Repair/Maintenance — Expensed 38 115 Capitalizated Asset Preservation 36 103 $146 $337 Not only have we cont
Slide 17: Balance Sheet: Maintaining a Strong Balance Sheet
Balance Sheet Maintaining a Strong Balance Sheet Dec 2005 Dec 2004 Pro-forma Fixed Charge Ratio 2.5x 2.4x Floating Rate Debt 26% 21% Average Interest Rate 5.0% 5.4% Unencumbered Assets (book) $2.9 billion $3.5 billion Debt Maturing in Next 12 Months 3.45% 7% FFO Payout Ratio 78% 75% Preferred Unsecu
Slide 18: Balance Sheet: Fixed Charge Coverage and Debt
Balance Sheet Continue to improve fixed charge coverage, currently at 2.5x, and unencumbered pool at $3.5 billion. Prepaying $160 million in secured debt. Secured debt ratio reduced to 36% — creating capacity for acquisitions Gain from Rent.com will be used to offset prepayment and refinancing fees,
Slide 19: Balance Sheet: Interest Rate Risk Management
Balance Sheet Interest Rate Risk Management As interest rates rise, rents will increase For every 100 bps rise in rates, it will cost UDR $5.6 million in expense, however, UDR expects to gain $8.2 million in revenues due to increasing rents *Debt matures – no more than 12.0% in any year, and only 26
Slide 20: Balance Sheet: Year Maturities
Balance Sheet 5 Year Maturities Minimal impact from maturities/rising interest rates Annual Savings At Year Amt. ($M) Rate 5% 6% 7% 2005 $99 7.4% ($2.4) ($1.4) ($0.4) 2006 203 6.5% (2.9) (0.9) 1.1 2007 251 5.4% (2.3) 3.0 8.3 2008 289 (1) 5.3% (0.8) 2.1 5.0 2009 277 6.2% (3.3) (0.5) 2.2 Note: (Benefi
Slide 21: Balance Sheet: 2001 to 2005 Restored Balance Sheet
Balance Sheet 2001 to 2005 – Restored Balance Sheet In 2001, management committed to our Rating and has delivered on that commitment Increased the size of the unencumbered asset pool by $892 million to $3.5 billion and the quality through our portfolio repositioning Significantly increased the quali
Slide 22: Conclusions: Why UDR?
Conclusions Why UDR? Improving Fundamentals – Margin Expansion Upgraded Portfolio Creates Greater Growth Opportunities Excellent markets – 50% of 2005E NOI from CA, FL, DC Improving asset quality Strong Balance Sheet Value 2 nd lowest FFO multiple in peer group Safe dividend Growth potential – in to
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