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The Equity Difference: Long-Term Outperformance Buy, build and sell apartments at Coastal markets where today’s opportune times affluent renter wants to live, work and play Create value throughout the real estate cycle by Highest Walk Scores allocating capital in a Urban and “A” and “B” quality superior risk- High- assets adjusted manner Superior Density Capital Suburban Allocation Portfolio Excellent Long-Term Risk-Adjusted Returns to Shareholders Strong and Sophisticated Flexible Strong credit and Efficient ratings (A-/A-/Baa1) Balance Operating Revenue Low debt to EBITDA maximization Platform Sheet of 5.8x and improving Strong expense Access to multiple controls funding sources Lowest overhead Long duration debt portfolio and staggered maturity schedule 2 2
Equity Residential’s Outperformance Same-Store NOI CAGR (2010-2015) Overhead as % of Total Revenue (2015) 7% 6.6% 6% 5.3% 5.2% 4.8% 5% 4% 3% 2% 1% 0% Same-Store NOI Overhead % of Revenue (1) EQR Apartment Peer Average EQR Has Strong Operating Results Over Time and Excellent Cost Control (1) Apartment Peer Average includes AIV, AVB, CPT, ESS, MAA and UDR. Source: SNL Financial and Company filings. 3 3
Equity Residential’s Long-Term Outperformance 10- Year Compound Annual Growth Rate (“CAGR”) (2005 -2015) 14% 11.8% 12% 11.2% 10% 8.6% 7.6% 8% 6% 4% 2% 0% Total Shareholder Return Net Asset Value Per Share (1) EQR Apartment Peer Weighted Average EQR Has Outperformed vs. Competitors (1) Apartment Peer Weighted Average includes AIV, AVB, CPT, ESS, MAA, PPS and UDR, and is weighted based on Total Market Capitalization as of 12/31/15. Source: SNL Financial, Green Street Advisors. 4 4
Equity Residential Creates Value Throughout the Real Estate Cycle by Allocating Capital in a Superior Risk Adjusted Manner = Acquisitions Lexford = Dispositions Acquisition of Portfolio Archstone = Other Activity Broken Condo/ Sale Acquisition $1.1B Distressed $8.9B 15% IRR Assets Starwood Portfolio Sale Purchase Price: $241M Share and Other 2016 $410,000/unit of value Buyback: Dispositions vs. created $1.3B at as 2016 Value: $6.6B much as 40% $490,000/unit discount to 12% IRR NAV 2010 2012 2016 2006 2006-2008 2013 $289M $150M of value $176M realized of value realized 37% IRR $496M Paid Special of value $185M Dividends Archstone of value created Woodland Condo $4.2B realized Breakup Fee Park Business 14% IRR $11/share Acquisition of River Macklowe Tower Portfolio Note: All IRRs calculated on an unleveraged basis. 5 5 See additional notes to presentation.
Equity Residential Creates Value Throughout the Real Estate Cycle by Allocating Capital in a Superior Risk Adjusted Manner Development Starts: Total Development Cost (1) vs. 2016 Value ($M) $1,600 Total Development Cost 2016 Value Acquire Archstone land $1,400 sites at attractive basis Starts greatly reduced as development risk- $1,200 adjusted returns Attractive decline and cycle development matures opportunities lead $1,000 to increased starts $800 $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 EQR development projects have created $1.8B of value during 2005-2015 for a 33% return on cost (1) (1) Total Development Cost figures have not been reduced by impairments. 6 6 See additional notes to presentation.
Equity Residential Portfolio 2016 EQR’s portfolio is focused in the six core, coastal markets EQR Portfolio Characteristics Boston Seattle 8% Highest density, best located portfolio in 37 Properties 30 Properties the public apartment REIT sector 7,096 Units 7,588 Units ‒ 68% NOI – Mid/Highrise properties 78% NOI - Mid/Highrise 81% NOI - Mid/Highrise 11% 22% NOI - Garden 19% NOI - Garden ‒ 32% NOI – Garden properties San Francisco 19% New York Resident demographic that chooses to 54 Properties 20% rent for lifestyle reasons 17% 40 Properties 12,756 Units ‒ Highest Walk Scores 10,632 Units 49% NOI - Mid/Highrise 95% NOI - Mid/Highrise 51% NOI - Garden Dominant presence in six core markets: 5% NOI - Garden 25% ‒ 24/7 coastal, gateway cities Southern California (1) ‒ Strong demand drivers Washington, D.C. ‒ Constrained supply characteristics 93 Properties 47 Properties 22,407 Units 15,637 Units ‒ Superior long-term returns 42% NOI - Mid/Highrise 90% NOI - Mid/Highrise 58% NOI - Garden 10% NOI - Garden Note: As of 6/30/16. (1) Includes Los Angeles, San Diego and Orange County. Represents percentage of Stabilized NOI. 7 7
EQR Market Selection Framework EQR markets are characterized by renters earning high incomes with even higher home ownership costs Largest 34 U.S. Apartment Markets (EQR Markets in Bold) % of % of Pop % of Units Median Home Price Median HH High Wage Above 25 w/ 5 Year Avg U/C to Composite Markets Home Price to Income Income HH Growth Employment BA or higher Rent Growth Inventory Ranking 1 San Francisco 2 Boston 3 Denver 4 Seattle 5 Orange County 6 Austin 7 Washington, D.C. 8 San Diego 9 Portland 10 New York 11 Minneapolis 12 Dallas-Fort Worth 13 Chicago 14 Los Angeles 15 Houston … 18 South Florida 19 Atlanta … 25 Phoenix … 28 Orlando … 34 Cleveland Source: Moody's Analytics, Neilsen, US Census & MPF Research. 8 8
EQR is Strategically Located in Markets With Attractive Housing Dynamics Median Income vs. Median Home Price 1,400 1,332 1,200 1,000 917 ($ in thousands) 800 600 468 406 394 372 400 221 200 200 92 82 76 74 68 56 55 54 0 (2) (1) New York San LA Boston Seattle D.C. National PHADO Francisco Median Home Price/ 17.5x 11.2x 8.5x 5.5x 5.5x 4.3x 3.9x 3.7x Median Income (1) All data reflects MSAs except for New York, which includes Manhattan only. (2) PHADO represents Phoenix, Houston, Atlanta, Dallas and Orlando as a proxy for low barrier to entry markets. Source: Moody’s Analytics; American Community Survey; U.S. Decennial Census. 9 9
EQR Market Selection Framework EQR markets have very strong household formation among the demographic most likely to rent Largest 34 U.S. Apartment Markets (EQR Markets in Bold) % of % of Pop % of Units Median Home Price Median HH High Wage Above 25 w/ 5 Year Avg U/C to Composite Markets Home Price to Income Income HH Growth Employment BA or higher Rent Growth Inventory Ranking 1 San Francisco 2 Boston 3 Denver 4 Seattle 5 Orange County 6 Austin 7 Washington, D.C. 8 San Diego 9 Portland 10 New York 11 Minneapolis 12 Dallas-Fort Worth 13 Chicago 14 Los Angeles 15 Houston … 18 South Florida 19 Atlanta … 25 Phoenix … 28 Orlando … 34 Cleveland Source: Moody's Analytics, Neilsen, US Census & MPF Research. 10 10
Growth in Household Formation Growth in Household Formation (2009-2015) 30% 25.9% 25% 20.9% 20% 16.7% 16.1% 14.9% 15% 11.5% 10.7% 10% 8.9% 7.5% 7.3% 6.9% 6.2% 5.8% 5.4% 5.5% 5.1% 4.9% 5% 3.5% 0% (1) U.S. Average PHADO Total EQR Total Southern Boston New York Washington, San Seattle California D.C. Francisco Household Formation Growth Age 25-34 Year Old (1) PHADO represents Phoenix, Houston, Atlanta, Dallas and Orlando as a proxy for low barrier to entry markets. Source: Census, Rosen Consulting Group. 11 11
EQR Market Selection Framework EQR markets have large, well-educated renter pools earning high wages in our nation’s growing knowledge -based professional fields Largest 34 U.S. Apartment Market Rankings (EQR Markets in Bold) % of % of Pop % of Units Median Home Price Median HH High Wage Above 25 w/ 5 Year Avg U/C to Composite Markets Home Price to Income Income HH Growth Employment BA or higher Rent Growth Inventory Ranking 1 San Francisco 2 Boston 3 Denver 4 Seattle 5 Orange County 6 Austin 7 Washington, D.C. 8 San Diego 9 Portland 10 New York 11 Minneapolis 12 Dallas-Fort Worth 13 Chicago 14 Los Angeles 15 Houston … 18 South Florida 19 Atlanta … 25 Phoenix … 28 Orlando … 34 Cleveland Source: Moody's Analytics, Neilsen, US Census & MPF Research. 12 12
EQR Markets Capturing A Disproportionate Share of New High Wage Jobs Households vs. High Wage Job Creation 7% 25% 6% 20% 5% 15% 4% 3% 10% 2% 5% 1% 0% 0% (1) (2) EQR San Fran New Boston Seattle So Cal DC York Markets (3) % of Current US Households % of High Wage Jobs Created 2010-2016 (1) Includes Los Angeles, San Diego and Orange County. (2) Large impact from sequestration on Washington, D.C. in 2012-2013. High wage job creation in Washington, D.C. has been strong in recent years. (3) High wage jobs defined as financial services, information, professional and business services sectors. Source: American Community Survey, BLS (CES). 13 13
EQR Market Households Experience Significantly Higher Income Growth Annual Median Household Real Income Growth (2003-2015) 3.5% 3.0% 50%+ 2.5% 2.0% 3.1% 1.5% 1.0% 2.0% 1.8% 0.5% 0.0% (1) PHADO US EQR Note: Due to MSA geographic definition changes in 2010, EQR and PHADO MSA income growth estimates are based on growth rates of e ach respective MSA’s most populous county. (1) PHADO represents Phoenix, Houston, Atlanta, Dallas and Orlando as a proxy for low barrier to entry markets. Source: Moody’s Analytics; American Community Survey; U.S. Decennial Census 14 14
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