Udr, Inc. · NYSE:UDR
Udr — Debt Investor Presentation (June 2022)
44 slides from Udr's debt investor presentation, Jun 6, 2022
Slide 1: Fixed Income Investor Presentation June 2022
FIXED INCOME INVESTOR PRESENTATION JUNE 2022 Bradlee Danvers - Boston, MA | Q2 2022 Acquisition UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, Joe Fisher, President and CFO | 720.283.6139 dovaloping and redeveloping attractive multifamily real estate comm
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 Operating Platform and Innovation Accretive Capital Allocation Diversified Portfolio Composition Market/Resident Attributes Strong, Liquid Bal
Slide 3: $22.4B EV: A Full-Cycle Investment
$22.4BEV A Full-Cycle Investment Eo = = < BetterRelative TSR Diversification Innovation A, lower Risk CONTINUOUS INNOVATION DIVERSIFIED PORTFOLIO , poi By Location Outsized Same- Robust Relative TSR / A ByMarketMix 4 ByPrice Point Within Market |“ store Growth ‘W~ consistent Return of Capital Northe
Slide 4: Recent Updates
RECENT UPDATES OPERATING TRENDS REMAIN STRONG: Accelerating Blended Lease Rate Growth Throughout 2Q22 Market Rent Growth Remains Above Historical Norms SAME-STORE YOY EFFECTIVE BLENDED LEASE RATE GROWTHUN2) YEAR-TO-DATE CUMULATIVE MARKET RENT GROWTH COMPARISON") May 2022: +~18% 182% 20221 ——Pre-CovI
Slide 5: Recent Updates
RECENT UP ES JUNE CAPITAL DEPLOYMENT AND CAPITAL ALLOCATION VALUE CREATED OVER TIME: Community Acqui: Land Acquisition Land Acquisition al * Homes: 433 + Potential Homes: 665 + Potential Homes: 300 TF + Location: Suburban Boston * Location: Dallas, TX + Location: Riverside, CA TL] * Pree:s2oem + Pri
Slide 6: UDR Value Proposition
UDR VALUE PROPOSITIO UDR’s Value Proposition = continuous innovation + durable/repeatable operating and capital allocation competitive advantages versus peers > robust relative results across primary valuation metrics and long-term TSR outperformance. Durable/Repeatable Compe ive Advantages NextGen
Slide 7: Operating Competitive Advantages
OPERATING COMPETITIVE ADVANTAGES UDR’s best-in-class operating abilities are key to monetizing our value proposition and outperforming peers long-term. As we continue to innovate in 2022 and beyond, our operating advantages should expand. Operating Competitive Advantages NextGen Operating Platform a
Slide 8: Operating Platform Accomplishments
OPERATING PLATFORM ACCOMPLISHMEN NextGen Platform evolved how we conduct business with current and prospective residents through a self-service model. $20M of NOI Resident Satisfaction Staffing Efficiencies at Apt. Homes Managed Upside Realized 425% Communities 44 40% per Employee 4 to 45”) Vv * Con
Slide 9: Innovation — Future Operating Initiatives
INNOVATION — FUTURE OPERATING INITIATIVES Our NextGen Operating Platform was successful in generating ~$20 million of incremental NOI. We expect our further Innovation, which utilizes “big data” to drive decisions and outcomes, to be more impactful. Max Potential Opportun Identified Initiative Upsid
Slide 10: Accretive Capital Allocation
ACCRETIVE CAPI 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 ti
Slide 11: Investment opportunities: acquisitions and developer capital program
Our willingness and ability to pivot toward investment opportunities that generate the ACQUISITIONS ct Station on Silver| Herndon, VA (Washington, DC MSA) + Target 10%-15% NOI growth above market in first 3 years of ownership + Acquired 27 third-party operating communities for $2.98 since 2019 witha
Slide 12: 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%-15% above market growth over the first three years of ownership. In 2019 and 2020, we acquired “$1.
Slide 13: 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 invest in / overlay our operating platform onto and 4) lessens volatility in long-term same-store growth. UDR’s p
Slide 14: Market / Resident Attributes
MARKET / RESIDENT ATTRIBUTES‘ UDR has a diversified and high-quality resident base across our markets. Our residents’ household income is on average 170% above the median income across the MSAs in which we operate, with a tilt toward high- and medium-income jobs. Resident credit quality has remained
Slide 15: 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, our
Slide 16: 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. + $1.1Bin available credit ca
Slide 17: 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, five-year liquidity outlook, and available LOC capacity. The efficient pricing these attr
Slide 18: 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. iverse Access to Capital * Diverse access to
Slide 19: 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 $7.7B in the public debt and equity markets. * 4Q18 through 1022 UDR raised a combined $2.7B of equity to accretiv
Slide 20: Scale, Size and Liquidity
SCALE, SIZE AND LIQUIDITY ae At $22.4 billion, UDR is a top-25 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. _ $30 60% g Development Pipeline, as of 1922 a 50% £ 3
Slide 21: Strong Improvement Since 2011
TRONG IMPROVEMENT SINCE 2011 Ga 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 a
Slide 22: Unencumbered Pool Overview
NEN POO The vast majority of UDR’s assets are unencumbered. Unencumbered vs. Secured Debt Overview Annualized Unencumbered NOI % of Total Number of Homes. Debt of Total Debt Number of Wholly Owned Assets with Secured Debt 15 a Inencumbered Pool Overview 6,304 Homes $161MNC of Total NOI in Region 10,
Slide 23: ESG and Sustainability Leadership
ESG AND UDR is a recognized global ESG leader. Reporting on our ESG initiatives and successes has expanded over the past three years.) »"sGress Named #1 listed Residential performer and 2021 Global and Regional Sector Leader by GRESB od g after achieving a score of 86. Developed or redeveloped 19 co
Slide 24: Innovative Culture and ESG Leadership
INNOVATIVE CULTURE AND ESG LEADERSHIP UDR’s culture is innovative, empowering and rewards success. Throughout the pandemic, UDR has proactively engaged with our associates and residents, supporting UDR’s near-maximum GRESB score in Social Responsibility. Social Responsibility: Associate Engagement a
Slide 25: Bradlee Danvers | Boston, MA
Bradlee Danvers | Boston, MA
Slide 26: The Case for Apartment REITs
THE CASE FORAPARTMENT REIT: 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 27: 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 28: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMEN Strong trailing twelve-month (“TTM”) job growth and wage growth have bolstered personal balance sheets, supported household formation, and driven demand for housing. This, in turn, has supported strong rent growth for residential housing. Affordability (both relat
Slide 29: Notes
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Slide 30: Notes
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Slide 31: Notes
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Slide 32: Forward Looking Statements
FORWARD LOOKING STATEMENTS 22 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
Slide 33: 2021 GRESB Global Sector Leader
| 2021 GRESB | "| @oBAL SECTOR LEApE,
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa 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 Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses. Controllable Operating Margin: The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (ji) divided by renta
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 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 37: Definitions and Reconciliations
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 imp
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 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 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa 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 decr
Slide 40: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 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 communi
Slide 41: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 2022 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 second quarter of 2022 and full-year 2022 to forecasted
Slide 42: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa Quarter Ended Coverage Ratios March 31, 2022 Net income/(loss) $ 14,603 Adjustments: Interest expense, including debt extinguishment and other associated costs 36,916 Real estate depreciation and amortization 163,622 Other depreciation and amortization 3,075 Tax pr
Slide 43: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aa ‘Three Months Ended March 3 |Inthousands, except pershare and unit arrounts 2022 2024 Net income floss) attrbutable to common stockhalders Ss ens 2008 Real estate deprecation and amorteaton Nencontoting interests Rea ete depcecation and avorteton on incorsoldatd jo
Slide 44: 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