Udr, Inc. · NYSE:UDR
Udr — Debt Investor Presentation (November 2021)
42 slides from Udr's debt investor presentation, Nov 8, 2021
Slide 1: Fixed Income Investor Presentation
FIXED INCOME INVESTOR PRESENTATION NOVEMEBER 2021 > 450A et i | ypp's 2021 ESG REPOR’ : 2021 GRESB "| qoBAL SECTOR LEAD ry . us UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, | Joe Fisher, Chief Financial Officer | 720.283.6139 developing and redeveloping
Slide 2: Table of Contents
TABLE OF CONTENTS ; KEY MESSAGES AND UPDATES UDR At a Glance Recent Updates REASONS TO INVEST IN UDR UDR Value Proposition Operating Competitive Advantages Next Generation Operating Platform Accretive Capital Allocation Diversified Portfolio Composition Market/Resident Attributes § strong, Liquid Ba
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 Update
RECENT UPDATE UDR’s preliminary October and November MTD operating results have remained unseasonably robust. Strong demand, increased pricing power, and the near-elimination of concessions have led to low-double-digit blended lease rate growth. SAME-STORE YOY EFFECTIVE BLENDED LEASE RATE GROWTH(I2)
Slide 5: Recent Updates
RECENT UPDATES UDR’s future operating initiatives and recent accretive acquisitions should continue to drive long-term value creation. Low single- family affordability remains conducive to near-term elevated rental demand and pricing power. PLATFORM AND FUTURE INITIATIVE INCREMENTAL NOI g Additional
Slide 6: UDR Value Proposition
UDR VALUE PROPOSITION Our value proposition is founded on continual innovation which, over time, has created durable and repeatable operating and capital allocation competitive advantages versus public peers and private market competitors. These advantages have driven robust relative results across
Slide 7: Operating Competitive Advantages
OPERATING COMPETITIVE ADVANTAGES UDR's operating prowess is key to our value proposition. Our strong operating abilities have repeatably generated long-term outperformance versus peers. As we continue to innovate in 2022 and beyond, we intend to expand our operational advantage. Core Operating Compl
Slide 8: Next Generation Operating Platform
NEXT GENERATIO ERATING PLATFORM Our Next Generation Operating Platform is built on customer self-service and represents the future of how our business will be run. This Platform allows us to more effectively interact with our customers on their schedules and drives increased profital and growth thro
Slide 9: Next Gen Operating Platform Accomplishments
NEXT GEN OPERATING PLATFORM ACCOMPLISHMEN Platform 1.0 revolutionized how we conduct business with our current and prospective residents, but it has also (1) improved resident satisfaction, (2) produced the NOI upside underwritten in mid-2018, and (3) widened our controllable operating margin advant
Slide 10: Future Operating Initiatives - Innovation
RE OPERATING INITIATIVES - INNOVATIO The next phase of UDR operating initiatives are focused on five primary revenue generation and/or expense containment strategies. They are (1) reducing days vacant, (2) pricing engine optimization, (3) improving resident experience, (4) increasing UDR’s share of
Slide 11: Accretive Capital Allocation
ACCRETIVE CAPIT, LOCATIO UDR has a strong track record of adhering to cost of capital signals from the public market. This discipline, combined with our expansive suite of investment options and extensive set of external growth value creation drivers, has driven robust returns for stakeholders over
Slide 12: Capital allocation investment options
Portfolios or one-off value-add acquisitions with upside relative to private operators, + Target 10%-15%NOI growth above market + Acquired/under contract to acquire 26 third-arty operating assets for ~$3.0bilion since 2018. DEVELOPER CAPITAL PROGRAM Essex Luxe| Orlando, FL Opportunistically provide
Slide 13: Repeatable Value Creation
REPEATABLE VALUE CREATION = Historical acquisitions best exhibit the outsized growth and value creation our competitive advantages can provide. We believe we can grow NOI at acquired properties by 10% above market growth over the first three years of ownership. In 2019, we acquired ~§915 million of
Slide 14: Diversified Portfolio Composition
VERSIFIED 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 invest in / overlay our operating platform onto and 4) lessens volatility in long-term same-store growth. Our portf
Slide 15: Market / Resident Attributes
MARKET / RESIDEN TTRIBUTES”) UDR has a diversified and high-quality resident base across our markets. Our residents’ household income is on average 150% above the median come across the MSAs in which we operate, with a tilt toward high- and medium-income jobs. Resident credit quality has remained co
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 potential changes in their housing preferences, o
Slide 17: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS”) UDR’s strong balance sheet is positioned to provide liqu Robust Liquidity Our balance sheet remains fully capable of supporting current business operations and future growth. ry and safety in current times and throughout the real estate cycle. + $1.0Bin available credit ca
Slide 18: 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 maturity profile, five-year liquidity outlook, available LOC capacity, and many credit metrics. The efficient pricing these
Slide 19: Safe, liquid and flexible balance sheet
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 to pursue investments with a compelling risk-adjusted return to enhance stakeholder value. verse Access to Capital * Diverse access to c
Slide 20: Diverse Access to Capital
DIVERSE ACCESS TO CAPI 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 $7.3B in the public debt and equity markets. * 4Q18 through 3021 UDR raised a combined $2.3B of equity to accretiv
Slide 21: Scale, Size and Liquidity
SCALE, SIZE AND LIQUIDITY ae At $24.3 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. _ 95 60% g Development Pipeline, as of 3Q21 B $20 50%
Slide 22: Strong Improvement Since 2011
TRONG IMPROVEMENT SINCE 2011 2 In the last decade, 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. encumbered NOI Consolidated Debt as
Slide 23: Unencumbered Pool Overview
NEN POO The vast majority of UDR’s assets are unencumbered. Unencumbered vs. Secured Debt Overview) Annualized Unencumbered NOI % of Total NO! Number of Homes. Debt of Total Debt Number of Wholly Owned Assets with Secured Debt 15 e Unencumbered Pool Overview 6,231 Hom $123MNC of Total NOI in Region
Slide 24: Innovative Culture and ESG Leadership
INNOVATIVE CULTURE AND ESG LEADERSHIP Reporting on our ESG initiatives and successes has expanded and improved over the past three years. Corporate Respon: ity * GRESB Named #1 listed Residential performer and 2021 Global and Regional Sector Leader by GRESB after achieving a score of 86. ¢ Classifie
Slide 25: Innovative Culture and ESG Leadership
INNOVATIVE CULTURE AND ESG LEADERSHIP UDR’s culture associates and residents, supporting UDR’s near-maximum GRESB score in Social Respon: innovative, empowering and rewards success. Throughout the pandemic, UDR has proactively engaged with our “S” — Social Responsibility: Associate Engagement and DE
Slide 26: Regulatory Knowledge
REGULATORY KNOWLEDG 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 ho
Slide 27: Appendix
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Slide 28: The Case for Apartment REITs
THE CASE FORAPARTMENT REITS REITs have historically served as a strong inflation hedge and have direct exposure to primary drivers of the U.S. economy. Apartment REIT TSR has outperformed that of other REITs and the broader market by a wide margin over the past 20 years. This outperformance has been
Slide 29: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMEN Long-term demographics remain strong for apartments. Domestically born cohorts aged 19 years and under are, on average, 605K people larger than the primary renter cohort aged 20-34 years. An expected improvement in immigration policies should support growth in the
Slide 30: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 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 ex
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Slide 32: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS we 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 33: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses. Controllable Operating Margit The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (i) divided by rental
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Effective Blended Lease Rate Growth: The Company defines Effective Blended Lease Rate Growth as the combined proportional growth as a result of Effective New Lease Rate Growth and Effective Renewal Lease Rate Growth. Management considers Effective Blended Lease Rate
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aE Funds From Operations (“FFO”) attributable to common stockholders and unitholders: The Company defines FFO attributable to common stockholders and unitholders as net income/(loss) attributable to common stockholders (computed in accordance with GAAP), excluding imp
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS co Net Operating Income (“NOI”): The Company defines NOI as rental income less direct property rental expenses. Rental income represents gross market rent and other revenues less adjustments for concessions, vacancy loss and bad debt. Rental expenses include real esta
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Physical Occupancy: The Company defines Physical Occupancy as the number of occupied homes divided by the total homes available at a community. Proposition 13: In California, an amendment enacted in 1978 that limits the tax rate on real estate. The proposition decre
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS iat Stabi n/ Stabilized: The Company defines Stabilization/Stabilized as when a community's occupancy reaches 90% or above for at least three consecutive months: Stabilized, Non-Mature Communities: The Company defines Stabilized, Non-Mature Communities as those commun
Slide 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Ag 2021 Guidance: All guidance is based on current expectations of future economic conditions and the judgment of the Company's management team. The following reconciles from GAAP Net income/(loss) per share for full-year 2021 and fourth quarter of 2021 to forecasted
Slide 40: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aso Quarter Ended Coverage Ratios September 30, 2021 Net income/(loss) $ 19,040 Adjustments: Interest expense, including debt extinguishment and other associated costs 36,289 Real estate depreciation and amortization 152,626 Other depreciation and amortization 3,260 T
Slide 41: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa ‘Three Months Ended Nine Months Ended September 30, Septenber30, In thousands, except per share andunit amounts 2021 2020, 2024 2020, [Net income loss) attrbutable to common stockholders Fea state depreciationand arentzstion 12835 402903 2.481 Nercontroing interest
Slide 42: Forward Looking Statements
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 expressions are intended to iden