Udr, Inc. · NYSE:UDR
Udr — United Dominion Realty Trust — CSFB Real Estate Conference 2006
34 slides from Udr's conference presentation, Apr 5, 2006
Slide 1: UDR | United Dominion Realty Trust - CSFB Real Estate Conference
UDR | United Dominion Realty Trust CSFB Real Estate Conference April 2006
Slide 2: 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, "expects," "plans," "est
Slide 3: UDR Overview
4th Largest Apartment REIT Approximately 75,000 apartment homes $7.5 billion total market cap Portfolio positioned to capture job and demographic trends Proven Record of Delivering Shareholder Return: 1 Year: 44% 2 Years: 28% 5 Years: 26% 10 Years: 15% 30 consecutive years of dividend increases Comp
Slide 4: We Are Executing A 3-Pronged Approach To Grow FFO And Create Value
UDR Overview We Are Executing A 3-Pronged Approach To Grow FFO And Create Value TODAY
Slide 5: Value Creation Highlights - 2005
UDR - Overview Operations Best same store operating performance in over 5 years Q4 Full Year Occupancy: 94.7% 94.6% Revenue Growth: 5.2% 3.8% NOI Growth: 3.9% 3.4% Momentum accelerating in 2006 Asset Enhancement Completed 5,400 kitchen and bath upgrades Completed 686 full scope rehabs Development pi
Slide 6: Value Creation Highlights - 2006
UDR - Overview Operations Potential FFO/Share Rent - $25 to $30/month increase: $0.11 to 0.14 Reimbursements - improve by 5% 0.01 Occupancy - 40 bps increase: 0.02 Expense - 3% to 5% growth: (0.06) to (0.12) Asset Enhancement Estimate $150 million work to be contracted in 2006 Kitchen & bath upgrade
Slide 7: Top States for 2006 Projected Net Operating Income
Top States for 2006 Projected Net Operating Income California: 25% Florida: 15% Metro D.C.: 14% Texas: 11% North Carolina: 10% Our Holdings as of April 2005 UDR - Operations UDR - Operations
Slide 8: Strong Trend in Revenue Per Home
Strong Trend in Revenue Per Home UDR - Operations *Includes Non-Mature Communities * Guidance Range *
Slide 9: Strong Operating Trends
UDR - Operations Strong Operating Trends * Guidance Range
Slide 10: UDR - Solid Operating Trends
Rents & Reimbursements Per occupied home ~ $830+ Up $35 to $40 over prior year Up 4.5% to 5% over prior year Reimbursements up 15% over prior year Occupancy Approximately 95% vs. 94% last year Highest level in over four years Concessions Down 33% vs. prior year 2006 Early First Quarter Results Expen
Slide 11: Net Rents & Occupancy Continue To Trend Higher
UDR - Operations Net Rents & Occupancy Continue To Trend Higher
Slide 12: Markets - Early First Quarter Y/Y Revenue Growth
Markets - Early First Quarter Y/Y Revenue Growth Property Operations
Slide 13: 2006 Guidance
UDR - Operations 2006 Guidance * Amounts based on 2006 same store properties
Slide 14: Managing Utility Expense
UDR - Operations Managing Utility Expense 2006 Increase: 6% to 7% Utility expense components: 2005 % of Total Water/Sewer: $21.5M 55% Electricity*: 10.8 27% Natural Gas*: 6.8 17% Other Utilities/Propane: 0.4 1% Total $39.5M 100% Recoup 55% of utility expense Opportunity to capture additional $8 mill
Slide 15: 2006 Peer Company Guidance at Midpoint
UDR - Operations 2006 Peer Company Guidance at Midpoint Source: SNL UDR Guidance is in line with peers, but we trade at a 20% discount to the peer average
Slide 16: Asset Enhancement Dollars Invested Translate to Higher NAV
UDR - Asset Enhancement Dollars Invested Translate to Higher NAV Expected Returns: 8% to 10% for Kitchen & Bath Rehabs 7% to 8% for Developments
Slide 17: Kitchen/Bath Program
Upgraded Appliances, Cabinets, Lighting, Flooring, Etc. Targeting 8% to 10% Stabilized ROI 9,500 Completed; > 20,000 in Pipeline Create $1.50 in Shareholder Value for $1.00 Invested Kitchen/Bath Program Before After UDR - Asset Enhancement Providence Court - Charlotte, NC
Slide 18: Kitchen/Bath Program Before and After
Kitchen/Bath Program Before After UDR - Asset Enhancement Dominion Park Green - Raleigh, NC
Slide 19: Full Scope Rehabs
Reinvest with Exterior Upgrades and Interior Renovations 7 Communities Underway, 2,818 Homes Targeting 8% to 10% Stabilized ROI 7,000 Homes Under Study Full Scope Rehabs Before After UDR - Asset Enhancement Legacy at Mayland - Richmond, VA
Slide 20: Asset Quality - Rehabs Before and After
Asset Quality - Rehabs Before After UDR - Asset Enhancement Legacy at Mayland - Richmond, VA
Slide 21: Acquisitions
2005 Acquisitions 2006 Acquisitions Acquisitions UDR - Market Cycle Investments * Property is adjacent to UDR community and will undergo rehab
Slide 22: Dispositions
2005 Dispositions Dispositions * UDR owned 20% of Joint Venture UDR - Market Cycle Investments 2006 Dispositions Actively marketing communities in North Carolina, Tennessee, others
Slide 23: Essex Portfolio Acquisition, September 2004
16 garden-style communities 4,646 homes Purchase price: $755 million Current market value: $925 million Condo/density/Etc. market value: $1,100 million Cap rate at purchase: 5.5% Realized cap rate: 6.1% Cost per home: $162,721 Current value: $198,900 Condo/density/etc.: $238,000 At Current Values, t
Slide 24: Developments - Over 2,200 Homes in Pipeline
Land in Inventory to Build 1,675 Homes Developments - Over 2,200 Homes in Pipeline UDR - Market Cycle Investments
Slide 25: Developments - Verano
New Development in Rancho Cucamonga, CA 414 Homes $66 million Budget $160,100 Cost per Home 7.5% to 8.0% Return as Apartment Homes In Lease-Up: 42% Leased Developments - Verano UDR - Market Cycle Investments UDR - Market Cycle Investments UDR - Market Cycle Investments
Slide 26: Developments - Mandalay on the Lake
Developments - Mandalay on the Lake UDR - Market Cycle Investments New Development in Los Colinas, TX 369 Homes $31 million Budget $83,700 Cost per Home 7.5% to 8.3% Return as Apartment Homes Expected Completion - 2Q06 2Q06 2Q06 2Q06 2Q06 2Q06 2Q06 2Q06 2Q06
Slide 27: Developments - Joint Venture
JPI - National Apartment Developer Negotiated new development in Marina Del Rey, CA 298 homes $130 million budget $435,000 cost per home 6% to 6.5% return as apartment homes Developments - Joint Venture UDR - Market Cycle Investments UDR - Market Cycle Investments
Slide 28: Condo Activity
Ancillary business opportunity that will produce $2.5 million to $5.0 million of FFO per quarter for several years Gives UDR the ability to create value and reduce exposure to tertiary and secondary markets and one off assets at attractive after tax cap rate Much like a home builders' land pipeline,
Slide 29: Condo Activity - 2006 Activity and Future Pipeline
2006 Activity Condo Activity Future Pipeline UDR - Market Cycle Investments
Slide 30: Strong Balance Sheet
*Dollars in millions except Share Price Strong Balance Sheet GAAP Maturities as % of Total Debt UDR - Market Cycle Investments Average Interest Rate on Debt Maturing: 6.7% for 2006
Slide 31: Recent Equity and Debt Activity
Recent Equity and Debt Activity Share Repurchase Repurchased 3.2 million shares at average price of $23.03 in Q4 Board authorized new 10 million share repurchase program in February Dividend Board authorized 4.2% increase in February, the 30th consecutive annual increase, to an annual rate of $1.25
Slide 32: UDR - Summary: 2006 Guidance
UDR - Summary 2006 Guidance Per Share 2005 FFO $ 1.61 2006 Items Mid-Point of Range Same Store NOI Growth $ 0.09 2004 Acquisitions 0.05 Developments 0.02 Reduced Share Count 0.03 Interest Expense (0.03) G &A Growth (0.01) Lost NOI on Repositioning (0.05) Non-Recurring Rent.com, Insurance (0.03) 0.07
Slide 33: Compelling Value Creation Strategy
Strong Operator Delivering Stable, Predictable Returns Committed to Asset Enhancement Asset quality investments $150 investment in 2006 Achieving 8% to 10% ROI NAV creation - $1.50 increase in real estate value per $1 invested Focused on Value Creation through Market Capital Investments Development
Slide 34: Funds From Operations (FFO) definition
Funds From Operations (FFO) - The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (GAAP)), excluding gains (or loss
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