UDR
101 N. Meridian
Tampa, FL
INVESTOR
PRESENTATION
September 2024
TABLE OF CONTENTS
3 Recent Updates
7 UDR at a Glance
9 UDR Value Proposition
13 Market and Resident Attributes
15 Strong, Liquid, Flexible Balance Sheet
16 ESG and Sustainability Leadership
18 The Case for Apartment REITs
21 Chelsea
2
New York, NY
RECENT UPDATES - UDR(1)
Key operating metrics are following normal seasonal patterns. 3QTD blended lease rate growth (+2.1%) is ahead of 2H guidance (+0.9%), driven by renewal rate growth of 5% (100bps higher than 1H) and resident turnover 300bps lower y/y. 3Q is forecast to be the lowest y/y SSREV growth quarter in 2024 due to tough y/y comparisons, TTM blends, and occupancy changes from near-historical highs.
Same-Store Operating Trends
4Q 2023
1Q 2024
2Q 2024
3QTD 2024
Average Physical Occupancy
96.9%
97.1%
96.8%
96.2%
Effective Blended Lease Rate Growth
(0.5)%
0.8%
2.4%
2.1%
Blended Lease Rate Growth
2023
2024
Pre-COVID Average (2011-2019)
1Q
2Q
3Q
4Q
(2)
Midpoint would be achieved assuming all other drivers of SSREV growth (i.e., occupancy, other income, and bad debt) also achieve their respective midpoints. Please refer to page 4 for details on SSREV growth assumptions.
3
(3)
Peer group includes AVB, CPT, EQR, ESS, IRT, and MAA.
Source: Company documents.
RECENT UPDATES - 2024 GUIDANCE (AS REPORTED JULY 30, 2024)
SSREV Growth
SSREV Growth, by Region
SSEXP Growth
FFOA Per Share
4
Source: Company documents.
RECENT UPDATES - SECTOR TRENDS(1)
Demographics, affordability, and demand/supply factors continue to support rentership.
Steady Rent-to-Income Ratio ("R/I")
Attractive Relative Affordability
Median resident R/I ratio in the low/mid-20% range
Nearly 60%, or $3,000 per month, less expensive to rent
than own across UDR markets
R/I Ratio
Long-Term Average
% Less Expensive to Rent vs. Own (TTM)
Long-Term Average
25%
-20%
24%
-30%
23%
-40%
22%
-50%
21%
-60%
20%
Mar-18Mar-19Mar-20
Mar-21Mar-22Mar-23Mar-24
Robust Demand
Slowing Future Supply
Above-average population concentrations in the mid-20's to
Multifamily starts have declined materially since mid-2022
early-30's age cohorts support future apartment rental demand
U.S. Population by Age
Average (Ages 15 to 60)
160,000
4,800,000
MultifamilyQuarterly
StartsDevelopment(Units)
120,000
4,400,000
80,000
4,000,000
40,000
3,600,000
0
2019
2020
2021
2022
2023
2024
15
20
25
30
35
40
45
50
55
60
(1) Metrics as of June 30, 2024, unless otherwise noted.
5
Source: Company documents, RealPage, U.S. Census Bureau.
RECENT UPDATES - SUPPLY OUTLOOK
Record levels of new multifamily deliveries expected in 2024, before trending lower towards historical averages by 2H 2025.
National Multifamily Deliveries
UDR Market Multifamily Deliveries
180,000
Units
% of Stock
135,000
Deliveries
90,000
45,000
0
1Q22
4Q22
3Q23
2Q24
1Q25
4Q25
1.0%
70,000
Units
% of Stock
1.0%
0.8%
60,000
0.8%
50,000
0.6%
Deliveries
40,000
0.6%
0.4%
30,000
0.4%
Stockof%
20,000
Stockof%
0.2%
10,000
0.2%
0.0%
0
0.0%
1Q22
4Q22
3Q23
2Q24
1Q25
4Q25
2024 Supply as % of Existing Stock
>250 bps Above Historical Average
20% of UDR NOI
Austin
Dallas
Denver
Nashville
Philadelphia
Seattle
100 to 250 bps Above
Historical Average
45% of UDR NOI
Boston
Los Angeles
Orlando
Portland
Richmond
Tampa
Washington, D.C.
Flat to 100 bps Above
Historical Average
35% of UDR NOI
Baltimore
Monterey Peninsula
New York
Orange County
San Francisco
San Diego
6
Source: Company documents, RealPage, CoStar.
UDR AT A GLANCE(1)(2)
UDR is a full-cycleinvestment that consistently generates strong total shareholder return ("TSR") through innovation, best-in- class operations, and disciplined capital allocation.
52 Year
S&P 500
~60,000
3.8%
Full-Cycle
Continuous
Multifamily
Apartment 21 Markets ~$22B EV
Dividend
History
Investment
Innovation
REIT
Homes
Yield
Outsized Same-Store NOI Growth(3)
Robust Relative TSR
10-Year
3.9%
4.0%
15-Year
4.0%
4.1%
20-Year
3.9%
4.1%
2.5%
3.0%
3.5%
4.0%
Peer Median CAGR
UDR CAGR
10-Year
6.5%
6.9%
15-Year
11.2%
13.3%
20-Year
8.0%
8.5%
4.5%
5.0%
7.0%
9.0%
11.0%
13.0%
NAREIT Equity Index CAGR
UDR CAGR
Sustainable Dividends That Grow Over Time
$1.80
$1.40
$1.00
$0.60 $0.20
207
Consecutive Dividends Paid
$1.70
6.3%
CAGR since 2010
$0.72
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
(1)
As of August 31, 2024, except otherwise noted.
7
(2)
Dividend Yield is based on UDR's 2024 annualized dividend of $1.70 per share.
(3)
Peer group includes AVB, CPT, EQR, ESS, IRT, and MAA; 2Q 2020 through 4Q 2023 UDR same-store NOI results have been adjusted where appropriate to reflect concessions on a straightline basis for peer comparability.
Source: Company and peer documents, Nareit.
UDR AT A GLANCE - DIVERSIFIED PORTFOLIO COMPOSITION
UDR is diversified across markets and price points to generate robust growth with less risk.
Market Mix
Price Point and Location(1) Within Market
Northeast/Mid-Atlantic:
40% of NOI
West Coast:
35% of NOI
Sunbelt:
25% of NOI
80%
Less
UDR
Peer Average
60%
Concentration
Risk
40%
More Stability
20%
Portfolio-Wide Rental Rate
% of SS Revenue in Five
Differential(2,3)
Largest Markets(2)
A-Quality
44%
Coastal A
Coastal B
53%
47%
Urban
31%
Coastal Urban Coastal Suburb
61%
39%
B-Quality
56%
Sunbelt A
Sunbelt B
66%
34%
Suburban
69%
Sunbelt Urban Sunbelt Suburb
9%91%
(2)
Data as of June 30, 2024. Comparative top-5 markets for peer REITs are defined similarly to UDR's market definitions.
8
(3)
Rental rate differential equals the percentage difference between 1st and 3rd quartile rent levels across each REIT's portfolio.
Source: Company and peer documents, Nareit.
UDR VALUE PROPOSITION
Durable and Repeatable Competitive Advantages
Innovation
Operations
Differentiated
Market Selection
-
Self-service and improved
-
Predictive analytics and
resident experience
qualitative analyses to
-
Expand margins and
help identify investment/
divestment markets
lessen expense growth
-
$110M incremental NOI
-
Benefits our acquisition
yield expansion
captured or identified
Repeatable
Investment
Upside
Long-Term TSR Outperformance
Controllable Operating Margin ("COM") Expansion
Frequency that UDR's Rolling 5-year Annualized TSR(1) Outperforms Index
Controllable Operating Margin vs. Avg. Monthly
84%
Rent(2) (TTM through 2Q24)
Last 5 Years
Last 10 Years
80%
Margin
83%
~200bps COM advantage
68%
72%
82%
Equates to ~$30M in
60%
higher annualized NOI.
62%
Operating
57%
81%
Peer Avg.
40%
80%
20%
Controllable
79%
78%
0%
TTM
77%
UDR vs. NAREIT
UDR vs. NAREIT
UDR vs. NAREIT
UDR vs. NAREIT
$1,500
$2,000
$2,500
$3,000
Apartment Index
Equity Index
Apartment Index
Equity Index
Average Monthly Rent Per Apartment Home
(1) Data through July 31, 2024.
9
(2) Based on disclosures across the peer group. Average Monthly Rent is defined as average monthly rental rates for EQR, ESS, IRT, and MAA and is defined as average monthly revenue per occupied home for AVB, CPT, and UDR.
Source: Company documents.
INNOVATION = REPEATABLE, CONSISTENT VALUE CREATION
UDR innovation initiatives have consistently driven high-single-digit y/y growth in other income, resulting in (a) approximately $30M of incremental run-rateNOI since 2018, equating to $600M of value creation,(1) and (b) an approximate 200 basis point controllable margin advantage versus peers. Current and identified future initiatives should allow UDR to sustain high- single-digit other income growth.
$110M NOI ($0.30/share or 10% upside) from Identified Value Creation
2018-2023:
2024 Target:
Identified (2025+):
$30M
$10M
$70M
Legacy Innovation
Ancillary Income: Parking, Package Lockers, Pet Fees, Short-Term Rentals
Site-Level Efficiencies: Reduce Controllable Expenses, Unmanned Communities, Group Purchasing
Foundational Technologies: SmartHome Tech, Data Hub, CRM, AI Chatbot, Self-GuidedTours, Resident App, Maintenance Tech, Spatial Analytics, Robotics
Pricing Enhancements: Unit-Level and Amenity Pricing Reduce Friction: Streamlined Resident Move-In Process
Major Strategic Initiatives (Examples)
Community WiFi ($10-$15M NOI 2025+): Seamless access for residents; supports self- service model; building block to reduce emissions
Customer Experience ($10-$25M NOI 2025+): Leverage data and AI to orchestrate interactions and decisions; leads to higher satisfaction, increased lifetime value of resident, higher retention, fewer vacant days, improved pricing, margin expansion
Bad Debt ($10-$20M NOI 2025+): AI-poweredfraud screening (proof of income, ID verification, pattern recognition) = higher collections, reduced eviction and turnover costs, lower vacancy loss
(1) Calculated based on an applied cap rate of 5.0%.
10
Source: Company documents.
Disclaimer
UDR Inc. published this content on 04 September 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on September 04, 2024 at 22:49:41 UTC.