Udr, Inc. · NYSE:UDR
Udr — Investor Presentation (March 2019)
40 slides from Udr's investor presentation, Mar 1, 2019
Slide 1: UDR, Inc. overview
Leonard Pointe |Srookiyn, NY [IE UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive multifamily real estate properties in a variety of U.S. markets. + S&P 500 Company + ~$18.0 Billion Enterprise Value + 2019 Annualized D
Slide 2: Table of Contents
BLE OF CONTEN =| UDR at a Glance 3 Recent News 4 Why REITs? 5-6 Why Apartment REITs? 7 Why UDR? 8-10 KEY BUSINESS AREAS Operating Excellence 12-15, Portfolio Diversification 16 Accretive Capital Allocation 17-18 Balance Sheet Strength 19 Culture and ESG 20 2019 Guidance 21 Apartment Demographics and
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. Our primary goals are to consistently generate above-peer average total shareholder return (“TSR”) while considering our stakeholders and th
Slide 4: Recent News
RECENT NEW Operations: + Through February 27, 2019, QTD same-store blended lease rate growth of 3.0% has averaged 60 bps higher YOY than what was realized in the comparable 2018 period. * Continue to implement the next iteration of our operating platform including SmartHome installations and other i
Slide 5: Why REITs?
WHY REIT: The public REIT space is an institutionally accepted asset class with over $1.1T in market cap and 88 companies over $3B in market cap. REITs have historically served as a strong inflation hedge, have direct exposure to large-scale drivers of the U.S. economy, and have differentiated lease
Slide 6: Why REITs?
WHY REIT: Earnings growth and durability, combined with the payment of consistent dividends, are drivers of long-term REIT outperformance. REITs compare favorably versus the broader market in these categories, thereby justifying relative valuation premiums. Earnings Growth() Earnings Durability“ 300
Slide 7: Why Apartment REITs?
WHY APARTMENT REITS Apartment REITs have generated significantly higher TSR over time versus other REITs and the broader market. Apartment outperformance has been driven by (1) an ongoing shortage of U.S. housing, (2) better long-term NOI growth and lower cap ex than most other REIT sectors, (3) the
Slide 8: Why UDR?
WHY UDR? Strategy: Our primary goals are to consistently generate above-peer average TSR while considering our stakeholders and the environments we operate in. The attributes below aid us in executing these objectives. OPERATING EXCELLENCE PORTFOLIO DIVERSIFICATION * Generate above-peer median same-
Slide 9: Why UDR? Full-Cycle Investment
WHY UDR FULL-CYCLE INVESTMENT UDR has historically generated above-peer median same-store NOI growth due to its best-in-class operations, with lower volatility resulting from its diversified portfolio. These, when combined with a wide variety of accretive capital deployment opportunities and an inve
Slide 10: Why UDR?
WHY UDR? 0 The Result: Our cumulative same-store NOI, AFFO, dividend and NAV per share growth have driven robust relative total shareholder return over the past five years. UDR Per Share Growth (indexed at 100 at YE 2013)() 70 ——SSNOl ——AFFO/sh Growth ——Dividend/sh Growth = = NAV/sh Growth 160 151 4
Slide 11: Key Business Areas
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Slide 12: Operating Excellence: Two attributes define our operating platform
Two attributes define our operating platform, (1) strong blocking and tackling and (2) continuous innovation. Efficiently pricing our portfolio and controlling expense growth (i.e., blocking and tackling) maintains SS NOI growth in-line with peers. Implementing innovative initiatives that boost our
Slide 13: Operating Excellence: Margin-Enhancing Initiatives
OPERATING EXCELLENC Growth/Margin-Enhancing initiatives, what are they?: Each year, we implement new revenue growth-enhancing and/or expense growth- reducing initiatives, while also continuing to expand legacy programs. The additional growth these initiatives provide is recurring and long-lived; as
Slide 14: Operating Excellence: The Next 3-5 Years
14 OPERATING EXCELLENC The Next 3-5 Years. Technological advances, and whether companies adopt those advances, have played a significant role in determining the long-term haves and have nots in many industries. Apartments are no different. UDR has consistently been an early adopter of technology to
Slide 15: Operating Excellence - Trends
15 PERATING EXCELLENCE - TREN The YOY change in SS blended lease rate growth is expanding. 2Q 3Q 4Q 1Q 2Q 3Q 4Q QTD1Q 2017. +2017 +2017 +2018 2018 2018 2018 2019”) YoY Blended Rate Growth® YOY Change in Blended Rate Growth (bps) 3.6% 2.9% 1.9% 2.7% 3.8% 3.5% 3.0% 3.0% (170) (120) (50) 20 20 60 4110
Slide 16: Portfolio Diversification
PORTFOLIO DIVERSIFICATION 4 Our diversified portfolio, as defined by geographic mix, price point and location within markets, is a differentiating factor versus peers, appeals to a wide renter and investor audience and lessens volatility in our long-term same-store growth. Diversification is a key d
Slide 17: Accretive Capital Allocation: Investment Options
Our ability to adapt and pivot our investment focus toward opportunities that generate the highest risk-adjusted IRR and can be funded accretively, is central to UDR’s capital allocation strategy. We have a full suite of options including: DEVELOPMENT DEVELOPER CAPITAL PROGRAM [Me)\|Xe)i 7/70) 1iZe)
Slide 18: Accretive Capital Allocation
ACCRETIVE CAPI LLOCATIO Our capital allocation pivots, in the context of our cost of capital at the time (shown below), have been well-timed to take advantage of accretive opportunities throughout the apartment cycle. Capital Allocation During the Apartment Cycle ($B) [wR Prem./(Disc.) to NAV (It. a
Slide 19: Balance Sheet Strength
BALANCE SHEET STRENGTH Our balance sheet is safe, liquid and flexible. We are comfortable with our credit metrics, maturity profile, three-year liquidity outlook, $1.3 billion in available capacity as of 12/31/18 and the efficient pricing they provide. 018 UDR BALANCE SHEET STATS Consolidated Debt-t
Slide 20: Culture and ESG
CULTURE AND ESG ay UDR’s culture is innovative, empowering and rewards success. Reporting on our ESG initiatives will continue to ramp up in 2019. Associate Engagement Resident Satisfaction of our associates would recommend In UDR asa great place to workin 2018. ite satisfaction scores by Increased
Slide 21: 2019 Guidance
2019 GUIDANCE" ‘Arbors at Lee Vista | Olan, FL EARNINGS PER SHARE GUIDANCE | 102019 | FY 2019E Income/{loss) per wtd. avg. common share, diluted $0.09 to $0.11 $0.38 to $0.42 FFO per common share and unit, diluted $0.50 to $0.52 $2.05 to $2.09 FFOA per common share and unit, diluted $0.48 to $0.50 $
Slide 22: Apartment Demographics and Fundamentals
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Slide 23: Rental Housing Demographics
RENTAL HOUSING DEMOGRAPHICS 23 Long-term demographics remain strong for apartments. Domestically born age cohorts <20 years old are, on average, 600K larger than the primary renter cohorts aged 20-34 years. Whether the “population wave” continues unabated will depend on the intensity of foreign born
Slide 24: Rental Housing Demographics
RENTAL HOUSING DEMOGRAPHICS Renter household (“HH”) formation has outpaced owner formation since the mid-2000s. But, the U.S. is not producing enough housing to satisfy HH growth. 25% fewer total housing units were completed in 2018 than in 2001 despite 17% HH growth over that time period and foreca
Slide 25: Near-Term Rental Drivers
NEAR-TERM REN DRIVERS 25 Similar to long-term, demographic drivers of rentership growth, near-term demand drivers such as employment and wage growth screen beneficial for apartments; especially in UDR’s markets. LTM Employment + Wage Growth (Total Income Growth) CoNational ——-UDR Markets 5.7% any :
Slide 26: Near-Term Rental Drivers: New Supply
NEAR TERM RE L DRIVERS Working to counteract the strong employment environment is elevated new apartment supply. 2019 national deliveries are expected to be relatively stable-to-slightly increasing versus 2018 after delivery slippage is factored in. At a more granular level, only 5% of anticipated 2
Slide 27: Notes
NOTES 27
Slide 28: Forward Looking Statements
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 expr
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Slide 30: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Acquired Communities: The Company defines Acquired Communities as those communities acquired by the Company, other than through development and redevelopment activity, that did not achieve stabilization as of the most recent quarter. Adjusted Funds from Operations
Slide 31: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ag Management considers Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lending partners with a widely-used measure of the Company's ability to service its consolidated d
Slide 32: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a Effective Renewal Lease Rate Growth: The Company defines Effective Renewal Lease Rate Growth as the increase in gross potential rent realized less concessions for the new lease term (current effective rent) versus prior effective rent for the prior lease term on ren
Slide 33: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS aS A reconciliation from net income/(loss) attributable to common stockholders to FFO is provided on page A-11 of this presentation. Held For Disposition Communities: The Company defines Held for Disposition Communities as those communities that were held for sale as
Slide 34: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae Nominal Cap Rate: Nominal cap rates represent the expected unleveraged first year yield a property buyer expects to realize on its investment. Non-Mature Communities: The Company defines Non-Mature Communities as those communities that have not. met the criteria to
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a9 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 co
Slide 36: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS a YTD Same-Store Communities: The Company defines YTD 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, were not in
Slide 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ae 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 incomel(loss) per share for full year 2019 and first quarter of 2019 to forecasted FFO, FFO as Adju
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Coverage Ratios A10 Quarter Ended December 31, 2018 Net income/{loss) Adjustments Interest expense, including costs associated with debt extinguishment Real estate depreciation and amortization Other depreciation and amortization Income tax provision/(beneft), net Net
Slide 39: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS ‘Three Months Ended AL Twelve Months Ended December 34, December 34, in thousands, except per share and unit amounts 2018 207 2018 207 Net incomeloss atributableto common stockholders a soe 8 iTaeg Real estate depreciation and amortization 106.469 109.401 229,006 20,0
Slide 40: 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