Udr, Inc. · NYSE:UDR
Udr — Debt Investor Presentation (November 2020)
44 slides from Udr's debt investor presentation, Nov 13, 2020
Slide 1: Fixed Income Investor Presentation, November 2020
ual Openingdoorsto the futures FIXED INCOME INVESTOR PRESENTATION NOVEMBER 2020 Platform | Smart Homes for Smart Residents Rodgers Forge | Baltimore, MD a On ee AL eee UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, Chief Financial Officer: Joe Fisher | 72
Slide 2: Table of Contents
TABLE OF CONTENTS : | RF | KEY MESSAGES AND UPDATES 2 SS 7 UDR At a Glance : Recent Highlights and Trending Considerations ji “> WSS Z 2 Recent Operating Update Pricing Strategy REASONS TO INVEST IN UDR UDR Value Proposition ] : ; Operating Excellence ie 2 . Diversified Portfolio Composition Market/
Slide 3: UDR at a Glance
UDR AT A GLANCE" UDR is a multifamily REIT that owns, operates, develops and redevelops a diversified portfolio of apartment homes across top-tier U.S. markets. Founded in 1972, UDR is an S&P 500 company that consistently generates strong total shareholder return (“TSR”) through innovation, best-in-
Slide 4: Recent Highlights and Trending Considerations
RECENT HIGHLIGHTS AND TRENDING CONSIDERATIONS UDR’s operating results through early November have proved resilient. Our surgical approach to maximizing NOI by balancing blended lease rate growth against active occupancy management has preserved our 2020 rent roll and sets us up well for 2021. Recent
Slide 5: Recent Operating Update
RECENT OPERATING UPDATE Monthly billed revenue and physical occupancy have stabilized across 80% of our portfolio NOI. Cash revenue collections remain strong across the majority of our markets despite regulatory restrictions, the ongoing shift to flexible work schedules, and varying cadences of stat
Slide 6: Recent Operating Update
RECENT OPERATING UPDA Our tracking of forwarding addresses upon move-out indicates residents are relocating to suburban areas at a higher rate versus a year ago, but are staying proximate to the city centers they used to call home. As such, the widespread dissemination of an effective vaccine or oth
Slide 7: Pricing Strategy
PRICING STRATEG Typically, UDR’s pricing strategy focuses on maintaining face rate (gross rent) and offering concessions in markets where we believe in a stronger near-term recovery as opposed to net effective pricing where concessionary activity is spread evenly throughout the lease term. The forme
Slide 8: UDR Value Proposition
UDR VALUE PROPOSITION The primary components of UDR’s value proposition compliment one another, making the whole greater than the sum of parts. Over time, our strong track record across a variety of areas, such as operations and capital allocation, have bolstered same-store, earnings, dividend and N
Slide 9: Operating Excellence
OPERATING EXCELLENCE UDR has produced better-than-peer median same-store NOI growth over the past 5-, 10-, and 20-year periods. Monetizing our real estate in new, differentiated ways, strong blocking and tackling, and a culture that embraces innovation deserve the credit. Our Next Generation Operati
Slide 10: Operating Excellence: Next Generation Operating Platform
OPERA XCELLENCE UDR’s Next Generation Operating Platform is a differentiator that provides improved and more immediate customer service to current and prospective residents on their schedules while also historically generating outsized returns for UDR’s stakeholders. Our Platform is evolutionary, we
Slide 11: Operating Excellence
OPERATING XCELLENCE The success of UDR’s Next Generation Operating Platform is measured by tangible metrics. In certain cases, these illustrate the value creation produced versus private competitors when acquiring properties, in the form of revenue growth optimization and cost controls that can expa
Slide 12: Operating Excellence
OPERATING EXCELLENCE a Our Next Generation Operating Platform allows us to surgically price our homes (i.e. rental rate growth versus changes in occupancy) on market-by-market, asset-by-asset, and even home-by-home bases. This maximizes near-term revenue growth and also enhances the integrity of our
Slide 13: Operating Excellence: Orlando Example
OPERATING EXCELLENCE * The value proposition available to stakeholders when UDR’s blocking and tackling, historical operating jatives and Next Generation Operating Platform are overlaid on a given market is significant. Orlando, as presented below, provides a clear, real- world example of our relati
Slide 14: Diversified Portfolio Composition
DIVERSIFIED PORTFOLIO COMPOSITIO Our diversified portfolio 1) is a differentiating factor versus peers, 2) appeals to a wide renter and investor audience, 3) provides for more markets to investin / overlay our operating platform onto and 4) lessens volatility in long-term same-store growth. Our port
Slide 15: Market / Resident Attributes
MARKET / RESIDENT ATTRIBUTES‘ UDR has a diversified and high-quality resident base across our markets. Our household income is on average 135% above the median income across the MSAs in which we operate, with a tilt toward high- and medium-income jobs. UDR Combined Same-Store Portfolio Avg. Resident
Slide 16: Resident Attributes and Trends
RESIDENT ATTRIBUTES AND TREN Our diversified portfolio across markets, product types, and price points appeals to a wide variety of renters across various ages and other demographic traits. While the Millennial generation has garnered headlines for the cohort’s potential changes in housing preferenc
Slide 17: Accretive Capital Allocation
CCRETIVE CAPI LLOCATIO UDR has a strong track record of considering cost of capital signals from the public market. This discipline, combined with the well- rounded suite of investment options available to us, has created significant value for stakeholders over time. UDR’S CAPITAL ALLOCATION DURING
Slide 18: Capital allocation investment options
Our willingness and ability to pivot toward the investment opportunity that generates the highest risk-adjusted IRR and the greatest earnings/NAV accretion is central to UDR’s capital allocation strategy. We have a full suite of options including: + Portfolio acquisitions or value-add one-offs with
Slide 19: Track record of value creation
UDR has a demonstrated track record of value creation through acquisitions, development, redevelopment, and Developer Capital Program investments. Recent transactions and capital markets activity have added ~4% to 2020 FFOA. One William | Englewood, NJ (New York MSA) The Residences at Pacific City |
Slide 20: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS) UDR’s strong balance sheet is positioned to provide liqui Robust Liquidity Our balance sheet remains fully capable of supporting current business operations and future growth. ity and safety in current times and throughout the real estate cycle. : $924M in available credit
Slide 21: Strong, Liquid Balance Sheet
STRONG, LIQUID BALANCE SHEET UDR’s balance sheet is safe, liquid, flexible, and fully capable of supporting a wide variety of growth opportunities in size. We have improved our credit metrics, maturity profile, three-year liquidity outlook, and available LOC capacity. The efficient pricing these qua
Slide 22: Balance Sheet Strategy
BALANCE SHEET STRATE Our goal is to maintain a safe, liquid and flexible balance sheet that can fully fund our needs throughout the real estate cycle. This provides UDR the opportunity pursue investments with a compelling risk-adjusted return to enhance stakeholder value. Diverse Access to Capital *
Slide 23: Diverse Access to Capital
DIVERSE ACCESS CAPIT. UDR has access to a diverse array of capital sources and has demonstrated an ability to execute on all of them. Public Capital Markets * Since 2015 UDR has raised $5.3B in the public debt and equity markets. * 4Q18 through 1Q20 UDR raised a combined $1.1B of equity to accretive
Slide 24: Scale, Size and Liquidity
SC LE, SIZE AND LIQUIDITY At $17.8 billion, UDR is a top-30 publicly traded REIT as measured by Enterprise Value. As the enterprise value has grown, we have proactively reduced leverage and improved the quality and diversity of our portfolio. _ $20 60% H $18 Development Pipeline, as of 3Q2 5 $16 50%
Slide 25: Strong Improvement Since Financial Crisis
STRONG IMPROVEMENT SINCE 20 Since the financial crisis, UDR has improved balance sheet strength and cash flow safety. Supportive operating fundamentals moving forward are expected to support AFFO and Consolidated EBITDAre growth. UDR continues to prefer unsecured debt. Unencumbered NOI Consolidated
Slide 26: Unencumbered Pool
NENCUMBERED POO The vast majority of UDR’s assets are unencumbered. Unencumbered vs. Secured Debt Overview") Annualized Unencumbered NOI of Total NO! Number of Homes Secured Debt as % of Total Debt Number of Wholly Owned Assets with Secured Debt Unencumbered Pool Overview 5,572 Homes 79% of Total NO
Slide 27: Innovative Culture and ESG
INNOVATIVE CULTURE AND ESG "7 UDR’s culture is innovative, empowering and rewards success. Reporting on our ESG initiatives and successes has expanded and improved over the past three years. Participated in Global Real Estate Sustainability Benchmark (“GRESB”) and received a preliminary 2020 score o
Slide 28: Regulatory Update
UDR has a dedicated Governmental Affairs team that tracks and communicates our comprehensive understanding of eviction moratoriums, rent regulations, and other regulatory topics to our UDR teams. This has been critical to enabling our surgical approach toward pricing apartment homes and maximizing r
Slide 29: Appendix
APPENDIX CityLine | Seattle, WA
Slide 30: The Case for Apartment REITs
THE CASE FOR APA T REITS REITs have historically served as a strong inflation hedge and have direct exposure to primary drivers of the U.S. economy. Apartment REITs have outperformed other REITs and the broader market by a wide margin over the past 20 years. This outperformance has been driven by 1)
Slide 31: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMEN Long-term demographics remain strong for apartments. Domestically born cohorts aged 20 years and under are, on average, 192K larger than the primary renter cohorts aged 20-34 years. When coupled with an elevated propensity to rent, this bodes well for future apart
Slide 32: Forward Looking Statements
FORWARD LOOKING STATEMENTS =E 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 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a2 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. Acquired JV Same-Store Portfolio Commun
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Aa Consolidated Fixed Charge Coverage Ratio — adjusted for non-recurring items: The Company defines Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items as Consolidated Interest Coverage Ratio - adjusted for non-recurring items divided by total
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Aa Development Communities: The Company defines Development Communities as those communities recently developed or under development by the Company, that are currently majority owned by the Company and have not achieved stabilization as of the most recent quarter. Div
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS AS Estimated Quarter of Completion: The Company defines Estimated Quarter of Completion of a development or redevelopment project as the date on which construction is expected to be completed, but it does not represent the date of stabilization Funds from Operations a
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS AG Joint Venture Reconciliation at UDR's weighted average ownership interest: In thousands 302020 ___ YTD 2020 Income/(loss) from unconsolidated entities $2940 $ 14328 Managemert fee 546 1,730 Interest expense 4,575 14,192 Depreciation 8,738 26,299 General and adminis
Slide 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Ay Nominal Cap Rate: Nominal cap rates represent the expected unleveraged first year yield a property buyer expects to realize on its investment NOI Enhancing Capital Expenditures ("Cap Ex"): The Company defines NOI Enhancing Capital Expenditures as expenditures that
Slide 40: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Ag Sold Communities: The Company defines Sold Communities as those communities that were disposed of prior to the end of the most recent quarter. Stabilization/ Stabilized: The Company defines Stabilization/Stabilized as when a community's occupancy reaches 90% or abo
Slide 41: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Ae YTD UDR Same-Store Communities: The Company defines YTD UDR Same-Store Communities as those communities Stabilized for two full consecutive calendar years. These communities were owned and had stabilized operating expenses as of the beginning of the prior year, wer
Slide 42: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Bio Quarter Ended Coverage Ratios September 30, 2020 Net income/(loss) $ (27,217) Adjustments: Interest expense, including costs associated w ith debt extinguishment 62,268 Real estate depreciation and amortization 151,949 Other depreciation and amortization 3,887 Tax
Slide 43: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Three Months Ended Nine Months Ended September 30, September 30, In thousands, except per share and unit amounts 2020 2019 2020 2013 Net income loss) attributable to common stockholders S$ (e303) SENS SASS S| 84.283 Real estate depreciation and arortzaton 151389 127.3
Slide 44: Forward Looking Statements
Forward Looking Statements Certain statements made in this presentation may constitute “forward-looking statements.” Words suchas “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to iden