Udr, Inc. · NYSE:UDR
Udr — Debt Investor Presentation (June 2021)
44 slides from Udr's debt investor presentation, Jun 7, 2021
Slide 1: Fixed Income Investor Presentation, June 2021
ul Openingdoorsto the futures FIXED INCOME INVESTOR PRESENTATION JUNE 2 Cool Springs at Frisco Bridges| Frisco, TX Platform | Smart Homes for Smart Residents X:) UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, Chief Financial Officer: Joe Fisher | 720.283.
Slide 2: Table of Contents
TABLE OF CONTENTS 2 KEY MESSAGES AND UPDATES UDR At a Glance 2021 Guidance Raise ~ Recent Operating Update REASONS TO INVEST IN UDR UDR Value Proposition Operating Excellence Accretive Capital Allocation Diversified Portfolio Composition Market/Resident Attributes Strong, Liquid Balance Sheet Innova
Slide 3: 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-class operations
Slide 4: 2021 Guidance Raise
2021 GUIDANCE RAISE“ We have raised full-year 2021 earnings and same-store growth guidance expectations due to continued strength in operating fundamentals and accretive external growth. This represents UDR’s second guidance raise thus far in 2021. PRIOR CHANGE FROM EARNINGS PER SHARE GUIDANCE FY 20
Slide 5: Recent Operating Update
RECENT OPERATING UPDATE UDR’s operating results through May continued to improve. Strong demand has led to higher physical occupancy and blended lease rate growth as pricing power has increased and concessions have tapered. SAME-STORE DEMAND TRENDS!) Demand: — Leasing Traffic 2020/21 Leasing Traffic
Slide 6: Recent Operating Update: Platform and Regulatory
ECENT OPERATING UP E UDR’s Next Generation Operating Platform continues to drive value, rental assistance programs are a source of incremental collections, and affordability conditions remain conducive to rental demand. PLATFORM 1.0 — PATH TO ACHIEVING TARGETED IMPROVED NOI Platform: * Phase-1 initi
Slide 7: UDR Value Proposition - Attractive Results
SITION - ATTRACTIVE RESU UDR compares well versus peers on same-store, FFO as Adjusted per share, dividend per share, and NAV per share growth since 2013") due to our strong operating and capital allocation acumen, which has been supported by an investment-grade balance sheet. We have generated abov
Slide 8: UDR Value Proposition - Mechanisms
UDR VALUE PROPOSITION - MECHANISM UDR’s high-level strategy begins with operations. We primarily utilize four operating value creation mechanisms in tandem with a diversified array of capital allocation options to maximize long-term same-store growth, earnings growth, and total shareholder return, w
Slide 9: Next Generation Operating Platform
NEXT GENERATION OPERATING PLATFORM Our Next Generation Operating Platform is built on customer self-service and represents the future of how our business will run. Our Platform allows us to more effectively interact with our customers on their schedules and drives increased profitability and growth
Slide 10: Next Generation Operating Platform Results
NEXT GENERATION OPERATING PLATFOR As of year-end 2020 we had realized ~$10 million in incremental run-rate NOI through Platform 1.0 implementation, with the potential for an additional $5-$10 million upside through 2022 to achieve our original NOI growth target of $15-$20 million. We believe Platfor
Slide 11: Operating Excellence
OPERATING EXCELLENCE Strong operating blocking and tackling, monetizing our real estate in new and differentiated ways (i.e., legacy operating initiatives), building a culture that embraces innovation, and upgrading our properties with high-return investments has contributed to UDR’s better-than-pee
Slide 12: Operating Excellence Exemplified
OPERATING EXCELLENCE EXEMPLIFIED The value created when UDR’s operating advantages are overlaid on a given market is significant, scalable, and repeatable. As presented below, Orlando provides a clear, real-world example of the relative operating upside we can generate on a stabilized portfolio. ADV
Slide 13: Accretive Capital Allocation
CCRETIVE CAPITAL ALLOCATIO UDR has a strong track record of considering 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 ove
Slide 14: Capital allocation options: acquisitions, development, redevelopment
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: ACQUISITIONS DEVELOPMENT Sars Station on Silver| Her
Slide 15: Repeatable Value Creation
REPEATABLE VALUE CREATION Historical acquisitions best exhibit the outsized growth and value creation our competitive advantages can provide. In general, 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 m
Slide 16: 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 17: Market / Resident Attributes
MARKET / RESIDENT ATTRIBUTES“ UDR has a diversified and high-quality resident base across our markets. Our household income is on average 150% 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 consistent
Slide 18: 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 19: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS) UDR’s strong balance sheet is positioned to provide liquidity and safety in current times and throughout the real estate cycle. Robust Liquidity Our balance sheet remains fully capable of supporting current business operations and future growth. . $948M in available credit
Slide 20: 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 21: 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 22: 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 $6.3B in the public debt and equity markets. * 4Q18 through 1Q21 UDR raised a combined $1.5B of equity to accretive
Slide 23: Scale, Size and Liquidity
SCALE, SIZE AND LIQUIDITY At $213 bi in, 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. $22 $20 $18 $16 $14 $12 $10 $8 $6 $4 Enterprise Value ($ bil
Slide 24: Strong Improvement Since the 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 25: 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 13 Unencumbered Pool Overview 9,190 Homes $144M NOI 81%
Slide 26: Innovative Culture and ESG
NNOVATIVE CULTURE AND ES Reporting on our ESG in ‘ives and successes has expanded and improved over the past three years. Corporate Responsibility Phy Participated in the Global Real Estate Sustainability Benchmark (“GRESB”) and achieved a 2020 score of 83, near the top of é ae ’ the Multifamily pee
Slide 27: Innovative Culture and ESG: Social Responsibility
INNOVATIVE CULTURE AND ESG 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 and DE
Slide 28: Regulatory Knowledge
REGULATORY KNOWLEDGE 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 h
Slide 29: Appendix
APPENDIX i BR te 100 Pier 4| Boston, MA
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 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 dr
Slide 31: Apartment Demographics and Fundamentals
APARTMENT DEMOGRAPHICS AND FUNDAMENTALS 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 p: jes should support growth in t
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
Slide 33: UDR Definitions and Reconciliations
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. Adjusted Funds from Operations (“AFFO”)
Slide 35: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Aa 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 rental
Slide 36: Definitions and Reconciliations
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 37: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS AS Funds From Operations (“FO”) 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 impa
Slide 38: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS AG 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 Ay 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 Califomia, an amendment enacted in 1978 that limits the tax rate on real estate. The proposition decrea
Slide 40: Definitions and Reconciliations
DEFINITIONS AND RECONCILIATIONS Ag 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 41: Definitions and Reconciliations: 2021 Guidance
DEFINITIONS AND RECONCILIATIONS Ae 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 second quarter of 2021 to forecasted
Slide 42: Definitions and Reconciliations: Coverage Ratios
DEFINITIONS AND RECONCILIATIONS Aso Coverage Ratios March 31,2021 Net income/(ioss) $ 3,274 Adjustments: Interest expense, including debt extinguishment and other associated costs 78,156 Real estate depreciation and amortization 144,088 Other depreciation and amortization 2,601 Tax provision/(benefi
Slide 43: Definitions and Reconciliations: FFO
DEFINITIONS AND RECONCILIATIONS aat Three Months Ended March 31, In thousands, except per share and unit amounts 2024 2020 Net incomei(loss) attributable to common stockholders. s 208s 415 Real estate depredstonard smatizstion 144,088 155.470 Noncontroling interests 170 319 Real estste depredstion a
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 ide