Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (February 2023)
32 slides from Udr's investor presentation, Feb 17, 2023
Slide 1: Investor Presentation
100 Pier 4| Boston, MA INVESTOR PRESENTATION ise} N io} N oi “=
Slide 2: Table of Contents
TABLE OF CONTENTS (3] Recent Updates @ oR ata Glance 4 (7) UDR Value Proposition {3} Innovation and Competitive Advantages ® Accretive Capital Allocation and Value Creation ® Market and Resident Attributes ® Strong, Liquid, Flexible Balance Sheet ® ESG and Sustainability Leadership (17) The Case for
Slide 3: Recent Updates
RECENT UPDATES Apartment fundamentals remain healthy and relative advantages across operations, capital allocation, balance sheet positioning, and innovation set up UDR well for continued strong same-store and earnings growth. Blended lease rate growth accelerated from December to February, supporti
Slide 4: Robust Demand & Strong Resident Fiscal Health
ROBUST DEMAND & STRONG RESIDENT FISCAL HEALTH) Demand indicators continue to show strength as consumer financial health remains resilient and relative affordability continues to favor multifamily renting. Further, concession usage is minimal and we see no evidence of doubling-up. Higher Traffic Dail
Slide 5: UDR at a Glance
UDR AT A GLANCE?) UDR is a full-cycle investment that consistently generates strong total shareholder return (“TSR”) through innovation, bestin- class operations, and disciplined capital allocation. S&P 500 3.7% _— 59,000 Full-Cycle J Continuous Multifamily apartment ff] 21 Markets | $21.8B EV DEEME
Slide 6: Diversified Portfolio Composition
DIVERSIFIED PORTFOLIO COMPOSITION UDR is diversified across markets and price points to generate robust growth with less risk. Northeast/Mid Atlantic: ¢ 39% of NOI West Coast 35% of NOI Price Point® ai = A-Quality B-Quality = Coastal A = Sunbelt A Coastal B ‘Sunbelt B 67% 53% = Urban = Suburban Sunb
Slide 7: UDR Value Proposition
UDR VALUE PROPOSITION Innovation Repeatable ec Differentiated Investment CJ? Operations MarketSelection - Self-service and improved - Predictive analytics and Durable competitive resident experience qualitative analyses to advantages boost yields help identity investment/ - Expand margins and divest
Slide 8: Innovation Accomplishments
INNOVATION ACCOMPLISHMENTS UDR’s history of innovation has delivered better SS NOI growth and controllable operating margin versus peers. Long-Term Same-Store Outperformance Increased Efficiencies Versus Peers UDR vs. Peer Median SS NOI Growth (2013-2022) ‘Apartment Homes Managed per Employee PeerMe
Slide 9: Innovation = Repeatable, Consistent Value Creation
INNOVATION = REPEATABLE, CONSISTENT VALUE CREATION UDR’s ongoing innovation drives outsized same-store NOI growth in our legacy portfolio and yield expansion when we externally grow. This has contributed to UDR generating better than peer average FFOA per share growth in 7 of the past 10 years. Our
Slide 10: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION UDR has a track record of being a proficient steward of capital and can utilize various external growth value creation drivers. UDR’s Capital Allocation Throughout the Apartment Cycle ($M) [Wwe Prem,/(Disc,) to NAV (hs) —==Net Acquisitions (rhs) Issue equity at a premium
Slide 11: Accretive Capital Allocation
ACCRETIVE CAPITAL ALLOCATION Our wide variety of value creation drivers provides UDR the latitude to pivot toward investment opportunities that generate the highest riskadjusted IRRs and the greatest eamings/NAV accretion. These include: ACQUISITIONS Station on Silver| Herndon, VA (Washington, DC MS
Slide 12: Diversified and High-Quality Resident Base
DIVERSIFIED AND HIGH-QUALITY RESIDENT BASE) Household income, wage growth, and resident credit quality support current and future demand. $160K Average annual household income Seattle ‘Avg. Household Income ($000s): $168 vs. MSA Median Income: sax | | 0 ‘% High-Income MSA Jobs: * 6 ‘San Francisco Ba
Slide 13: Resident Attributes and Trends
RESIDENT ATTRIBUTES AND TRENDS. Resident Age Distribution® Balanced resident composition minimizes risk of exposure to specific age cohorts. 30% 25% 20% ‘Average Resident Age. 35 Median Resident Age: 32 15% 40% 5% 0% Under 25 Resident Tumover since 2018 Pre-COVID: Feb-20 = Current 27% | | 45+ Robust
Slide 14: Strong, Liquid, Flexible Balance Sheet
STRONG, LIQUID, FLEXIBLE BALANCE SHEET Sectorleading weighted average interest rate and robust liquidity (>$1 billion) plus strong, and improving, leverage metrics support growth opportunities and reduce risk. Strong Leverage Metrics Well Laddered Maturity Schedule BBB+ 28.0% 6.7 years S&P Unsecured
Slide 15: ESG and Sustainability Leadership
ESG AND SUSTAINABILITY LEADERSHIP UDRis a recognized global ESG leader and is committed to further enhancing our ESG profile.) GRESB Score of 87 LEED Certifications Sustainalytics SDG Alignment Eamed a 5 Star Developed, redeveloped, or Recognized as an ESG Industry Aligned with 10 United Designation
Slide 16: Appendix
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Slide 17: The Case for Apartment REITs
THE CASE FOR APARTMENT REITS Apartment REIT TSR has outperformed other REITs and the broader market by a wide margin since 2000 due to: Ongoing shortage Increased Housing's status as Better long-term NOI of U.S. housing propensity to rent a necessary, non- J growth + lower capex discretionary expens
Slide 18: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS Long-term demographics remain strong for apartments. Since 2010, approximately 28% fewer total housing units have been produced versus total households formed over the same period. U.S. POPULATION BY AGE COHORT (MILLIONS) PROPENSITY TO RENT BY AGE COHORT oe m=
Slide 19: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS Low absolute and relative affordability represent a barrier to single-family ownership, resulting in a larger potential multifamily renter pool. Third-party forecasts indicate ~5 million additional apartments will be needed by 2030 to satisfy housing demand, t
Slide 20: 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 ide
Slide 21: ESG Report / Definitions and Reconciliations
022 ESG REPoRr { 4 9022 GRESB 5 STAR RATINg zt | DEFINITIONS AND RECONCILIATIONS 19 2023
Slide 22: Definitions and Reconciliations A2
DEFINITIONS AND RECONCILIATIONS A2 ‘Acquired Communities: The Company defines Acquired Communities as these 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 23: Definitions and Reconciliations A3
DEFINITIONS AND RECONCILIATIONS AS Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses. Controtiable Operating Margin: The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (il) divided by renta
Slide 24: Definitions and Reconciliations A4
DEFINITIONS AND RECONCILIATIONS AA 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 Rat
Slide 25: Definitions and Reconciliations A5
DEFINITIONS AND RECONCILIATIONS AS 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 im
Slide 26: Definitions and Reconciliations A6
DEFINITIONS AND RECONCILIATIONS A6 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 27: Definitions and Reconciliations A7
DEFINITIONS AND RECONCILIATIONS AT Physical Ocaupancy: 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 decr
Slide 28: Definitions and Reconciliations A8
DEFINITIONS AND RECONCILIATIONS AS ‘Stabilization/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 c
Slide 29: Definitions and Reconciliations A9
DEFINITIONS AND RECONCILIATIONS Ag 2023 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 first quarter of 2023 and full-year 2023 to forecasted F
Slide 30: Definitions and Reconciliations A10
DEFINITIONS AND RECONCILIATIONS AO Quarter Ended Coverage Ratios December 31, 2022 Net income/(loss) $ ‘47,467 Adjustments: Interest expense, including debt extinguishment and other associated costs 43,247 Real estate depreciation and amortization 167,241 Other depreciation and amortization 4,823 Ta
Slide 31: Definitions and Reconciliations A11
DEFINITIONS AND RECONCILIATIONS AAL ‘Three Months Ended ‘Twede Months Ended December 34, December 34, In thousands, except per share and unit amounts 2022 oz 202 2 Netinceme/ ass) strbumbtetocemmen stcsnctaers $ ass $0 esos $0 wz $user ast eat cepresaton andemortston 307241 wes7ss 05228 eoaeus Nonwo
Slide 32: 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 ide