Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (September 2016)
44 slides from Udr's investor presentation, Sep 8, 2016
Slide 1: UDR, Inc. Del Ray Tower, Alexandria, VA
De Ray Tower Asai, VA Complete: 20 has a demonstrated history of successfully managing, buying, selling, developing " and redeveloping attractive real estate properties ‘R in primarily coastal, core U.S. markets. i + S&P 500 Company +~$15.4 Billion Enterprise Value Investor Relations: +2016 Annualiz
Slide 2: UDR at a Glance
UDR at a Glance Why Invest in Multifamily? 4.9 Why Invest in UDR? rr Portfolio Diversification 12 Operating Platform 13-15 External Growth 16-20 Alternative Investments 21 | Balance Sheet and Self-Funding Model 22-23 Cash Flow Growth and Value Creation 24 Recent Information 25-29 2016 Guidance
Slide 3: UDR at a Glance
UDR AT A GLANCE UDR is a multifaceted apartment REIT that owns, operates, develops and redevelops apartment homes across a diverse portfolio. UDR AT A GLANCE () * Establishedin1972 * 20Markets * 172Communities * 51,381 Homes * Same-Store Revenue per Occupied Home: $1,921 * Total Portfolio Revenue pe
Slide 4: Why Invest in Multifamily Stocks?
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Slide 5: Why Invest in Multifamily Stocks?
WHY INVEST IN MULTIFAMILY STOCKS? 5 Private market apartment valuation drivers are supportive. DEMAND Millennials and Baby Boomers represent the two largest population cohorts in U.S. history...and both are renting more. Steady job growth persists, renter household formations remain elevated and Mil
Slide 6: Why Invest in Multifamily?
WHY INVEST IN MULTIFAMILY? s Positive demographic trends in the largest (Millennials) and second largest (Baby Boomers) population cohorts signal continued sustainable and elevated demand for rental housing. The former has a high propensity to rent. Both have an increasing propensity to rent. U.S. P
Slide 7: Why Invest in Multifamily?
WHY INVEST IN MULTIFAMILY? U Employment and renter household growth are primary drivers of multifamily demand and are expected to remain elevated over the coming years. Employment and Renter Household Growth . Rl Merce ELMO LLLP LL 0% + Renter HH growth never went nesstie during the “Great 2% Recess
Slide 8: Why Invest in Multifamily?
WHY INVEST IN MULTIFAMILY? 8 Single-family housing, ifamily’s primary itor for t has slowly recovered since the “Great Recession.” Prices are up, but inventories and new construction remain depressed. These factors, when combined with a tight lending environment, are positive for long-term multifami
Slide 9: Why Invest in Multifamily?
WHY INVEST IN MULTIFAMILY? 8 Relative public market valuations for apartment REITs look attractive when considering expected 2017 AFFO per share growth and current valuation. Assorted peer apartment REITs sold large portfolios in 2016, thereby “depressing” their 2017 expected AFFO per share growth.
Slide 10: UDR, Inc. Growth, Predictability, Experience and Safety
Slide 11: Why Invest in UDR?
WHY INVEST IN UDR? " UDR is built to deliver superior, yet predictable growth in a variety of economic scenarios. DIVERSIFIED PORTFOLIO UDR’s portfolio is differentiated from peers by its breadth of market mix (20 markets), asset quality (~55%/45% A/B), asset type (high-rise, mid-rise, garden), loca
Slide 12: Portfolio Diversification
PORTFOLIO DIVERSIFICATION v UDR owns a highly diversified multifamily portfolio as measured by market mix, asset quality, asset type and location within markets. These attributes help to reduce risk as compared to a more concentrated real estate owner and appeal to a wider renter audience. (@} Prima
Slide 13: Operating Platform
OPERATING PLATFORM 13 UDR’s operating platform drives the majority of our AFFO per share growth annually and is widely recognized as our most valuable asset. UDR investors will continue to benefit from our best-in-class platform that consistently outperforms versus multifamily peers. % of UDR’s Mark
Slide 14: Operating Platform
OPERATING PLATFORM u Margin expansion is the other half of the earnings growth and value creation equation. Squeezing incremental profits out of every revenue dollar has been a primary objective for UDR since its founding in 1972 and one that we have excelled at. UDR Operating Margin Over Time 70.9%
Slide 15: Operating Platform
OPERATING PLATFORM * Aside from generating strong organic growth, UDR’s operating platform also contributes significantly to earnings and NAV growth when “under- operated” communities are acquired. Case Study: Inwood West — Boston, MA Purchase Date: Purchase Price: # of Homes: Submarket: April 2011
Slide 16: External Growth
EXTERNAL GROWTH 6 UDR has built a highly capable development platform over time. External growth is a core competency and will continue to compliment the organic growth generated from our operations. UNDERWAY DEVELOPMENT PIPELINE (AS OF 6/30/2016) Size: $1.18 # of Homes: ~2,400 Target Gateway, Coast
Slide 17: External Growth
EXTERNAL GROWTH v7 UDR Development 101: Development comes with inherent risks, but these can be mitigated. Pris | WHATISTHERISK? [HOW UDR MITIGATES RISK | Entity Risk funsing commitment puts Limit development to $900 million to $1.4 billion ntity at risk or 6-9% of assets. Construction ea overruns;
Slide 18: External Growth
EXTERNAL GROWTH % UDR targets $500 million per year in development spend. Of late, the vast majority of our projects are expected to or have generated development spreads in excess of our 150 basis point targeted minimum. ESTIMATED NAV CREATION > COST TO CONSTRUCT OF RECENT PROJECTS) 3 i% < 35%: 150
Slide 19: External Growth
EXTERNAL GROWTH Recent developments are presented below. COMPLETED DEVELOPMENTS Capito View On 18% | Washingion, OC ES || = UNDER CONSTRUCTION DEVELOPMENTS
Slide 20: External Growth
EXTERNAL GROWTH » Targeted redevelopment contributes to earnings and dividend growth while also refreshing well-located communities.
Slide 21: Alternative Investments
ALTERNATIVE INVESTMENTS 2 UDR has two value-add joint venture i ips in the industry that contribute to our diversification. The first is a ~50%/50%, $3.3 billion operating / development joint venture with MetLife. This relationship: * partners us with a committed, long-term player in the multifamily
Slide 22: Balance Sheet
BALANCE SHEET » UDR’s investment grade balance sheet fully self-funds our internal and external capital needs through retained earnings, debt refinancings and asset sales in a low-risk manner. BALANCE SHEET METRIC AS OF JUNE 30, 2016 FUTURE Debt-to-Assets 33.2% (38.5% with JVs) Decline Net Debt-to-E
Slide 23: Self Funding Examples
SELF FUNDING EXAMPLES Examples of our self-funding model at work are presented below. Selling communities that have exhausted their value creation potential to reinvest into well-located eS on anol dilutive basis, makes sense. = ~ cath Wao OX Dekada ns “345 Hartson | Boson, MA Estimated Gomplebon: 2
Slide 24: Cash Flow Growth, Value Creation
CASH FLOW GROWTH, VALUE CREATION * Mixing together our operations, external growth, self funding capabilities and unique JV relationships yields strong cash flow, dividend and NAV per share growth. UDR Per Share Growth (indexed at 100 in 2007) 160 ——AFFO/sh Growth ——Dividend/sh Growth — — NAV/sh Gro
Slide 25: Recent Information
Slide 26: Recent Highlights
RECENT HIGHLIGHTS * GENERATED STRONG SECOND QUARTER 2016 SAME-STORE RESULTS SS Revenue and NOI Growth of 5.7% and 5.7%, respectively. 2° highest of the nine public apartment REITs. ey 2 GREW 2Q 2016 YEAR-OVER-YEAR FFO AS ADJUSTED AND AFFO PER SHARE BY 7% AND 8%, RESPECTIVELY + 2016 AFFO/sh expected
Slide 27: Operating Trends Update
OPERATING TRENDS UPDATE”) Effective YOY EffectiveYoY UES Total %5S |UNEIIS SCN Effective YOY New Turnover as of I) NOL Growth Lease Rate Growth ‘August 31* Same-Store SSQTD Ss QTD ss QTD YTD YTD (SS)Market 2Q16 2Q16 | 8) 3q16") 3Q15") 2016 2015 /ashington, bc 19.0% 141%] 33% 25% | 20% 08% | 47% 44%
Slide 28: Operating Trends Takeaways
OPERATING TRENDS TAKEAWAYS a During the second quarter, we reaffirmed our full year same-store revenue and NOI growth guidance ranges of 1% and %, respectively. Year-to-Date 2016 Growth Facts: * First half revenue growth of 6.0% was 110bps higher than the MF peer average of 4.9%; 2"4 highest of the
Slide 29: 2016 Market Growth Expectations
2016 MARKET GROWTH EXPECTATIONS 2 West Coast: % of SS.NOI: 419% ‘% of Total NOI: 38% UDR Same-Store Markets Northeast ~ Revenue Growth") % of SS NOT: 18% JV Seattle % of Total NOI 20% o Portland We BYston ( Mid-Atlanti¢ ? i / 9%.0f SS NOI:\ 229% ey | 1 % of Total NOI: 25% New Yo Sati Frantisco = Met
Slide 30: 2016 Guidance
2016 GUIDANCE") *° EARNINGS PER SHARE GUIDANCE 3Q 2016E FULL-YEAR 2016E() FFO per common share $0.44 to $0.46 $1.76 to $1.80 FFO as Adjusted per common share $0.44 to $0.46 $1.77 to $1.80 Adjusted Funds from Operations ("AFFO”) $0.39 to $0.41 $1.61 to $1.64 ‘Annualized Dividend per common share $1.1
Slide 31: Forward Looking Statements
FORWARD LOOKING STATEMENTS aa 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 e
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Slide 33: View New York, NY
View 34 New York:NY
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 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")
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Marsgemert coreldere EffeciveRenswal Lanse\ Rat Grow a usefl met for ivestors as Itasseases, market level, in-place demand tre Equity Market Cap: The market value of all outstanding common stock and equivalents of a company based on the trading price of the common
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Actvitis of ou taxable REIT subsciary (TRS), nude development and land enilement. 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 difers rom the traditional long-term investme
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a JV Return on Invested Capital ("JV ROIC"): The Company defines JV ROIC as the pro rata share of property NOI plus property and asset management fee revenue divided by the average of beginning and ending invested capital for the quarter. Management! considers ROIC a
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Nominal Cap Rate: When the term “cap rate" is used by most market participants, they are refering to a “nominal cap rate”. Nc first year yield a property buyer on his/her investment. Like bond yields, nominal cap rates move inversely with property values - when valu
Slide 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Return on Invested Capital ("ROIC"): The Company defines ROIC as a referenced quarter's NOI, annualized, divided by the average of beginning and ending invested capital for the quarter. Management! considers ROIC a useful metric for Hive a prea i iio We Company is
Slide 40: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Management considers Total Revenue per Occupied Home a useful metric for investors as it serves as a proxy for portfolio quality, both geographic and physical. TRS: The Company's tian REIT subsidiary ("TRS") focuses on development, land entitlement and short-term ho
Slide 41: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a) Al guidance is based on curent expectations of future economic condtions and the judgment ofthe Companys agement team. The folowing reconciles rom GAAP Net income/oss) per share fr fll year 2016 and thd quarter of 2016 to forecasted FFO, FFO as Adjusted and AFFO pe
Slide 42: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS es Quarter Ended Coverage Ratios June 30, 2016 Net income/(loss) attributable to UDR, Inc. $ 17,946 Adjustm ined sie 30,678 eal estate eprecaton and amortization 105,937 tures 12,299, ier de 486 Noncontroliing interests 1,618 Income tax provision/(benefit) BITDA A 169
Slide 43: Three Months Ended Six Months Ended
‘Three Months Ended Six Months Ended June 30, June 30, Inthousand! 206 20152016 2015 Net incomei(loss) attributable to common stockholders S 17.017 $ 85924 $ 26.481 $159,815 Real estate depreciation and amortization yoses7) 90846 «ornare 170,121 Noncontoling interests [Net gain on the sale of uncons
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