St. Mary s Square Raleigh, NC 134 Units Built in March Investor Presentation March 2014

Transcription

1 St. Mary s Square Raleigh, NC 134 Units Built in March Investor Presentation March

2 Safe Harbor Statement Statements included in this presentation, including responses to questions, that are not based on historical facts are forward-looking statements based on current knowledge and judgments of management. You are cautioned not to rely upon these forward-looking statements, which are subject to certain risks, trends and uncertainties that could cause actual results to vary from the expectations and projections of management. The Risk Factors and other cautionary statements identifying important factors that could cause actual results to differ materially from those in these forward-looking statements are detailed in our filings with the SEC, including our most recent reports on Form 10-K and Form 10-Q. Copies of our filings with the SEC are available online at sec.gov and by clicking the Investors tab at AssociatedEstates.com. All information in this presentation is as of Q4 2013, unless otherwise noted. We assume no duty to update this information. 2

3 Diversified Portfolio Properties located in high barrier-to-entry submarkets in major metropolitan areas Northeast Ohio: Southeast Michigan: Western Michigan: Columbus: : Maryland: Northern California: Metro DC: Southern California: Indianapolis: Northern Virginia: Nashville: Southeast Virginia: Charlotte: Planned acquisition Planned disposition Dallas: Atlanta: Raleigh-Durham: Stabilized property Development project JV development project Portfolio: 52 properties containing 13,324 units located in ten states (1) Tampa: Southeast Florida: 3 Note: Pro forma for announced acquisitions, dispositions and developments. (1) As of 3/10/14.

4 2014: Year of Execution Transactional Guidance: Alpha Mill Charlotte, NC: Closing Q Acquisitions: $125.6 million (Three of the remaining four properties in the seven-asset portfolio) Dispositions: $210 $275 million (One property closed and three properties currently listed for sale) Development Spend: $110 $120 million (Five active developments) Same Community Guidance: Revenue Growth: 2.75% % Expense Growth: 1.75% % Property NOI Growth: 3.40% % Earnings Guidance per share: FFO: $1.27 $1.31 FAD: $1.15 $1.19 4

5 Same Community NOI Growth by Region Midwest Historical NOI Mid-Atlantic Historical NOI 7.7% 8.2% 7.2% 6.7% 5.7% 5.5% 5.7% 4.8% 4.8% 4.6% 3.8% 3.8% 2.7% 2.3% 1.6% 1.4% PF PF Southeast Historical NOI Southwest Historical NOI 5.6% 5.3% 4.8% 4.9% 13.7% 11.7% 1.8% 3.3% 3.6% 6.6% 4.8% 4.5% 3.9% 1.0% PF N/A PF Revenue NOI 5 Note: is as reported and 2014 PF is midpoint of guidance. Source: Company financials.

6 Steady Revenue and Margin Growth Average Revenue per Occupied Unit $939 $ % 94.4% $1, % $1,213 $1, % 95.5% PF Average Revenue per Occupied Unit Average Occupancy Operating Margin 62.4% 62.4% 60.8% 57.2% 58.2% PF 6 Note: is as reported and 2014 PF is midpoint of guidance. Source: Company financials.

7 Well Located Infill Developments 7001 Arlington Road (140 units) Bethesda, MD Cantabria (249 units) Dallas, TX Q Construction Start Q Delivery of First Units Q Property Stabilization Q Construction Start Q Delivery of First Units Q Property Stabilization Total Est. Cost: $53.4 million Cost Per Unit: $381k Return on Cost (Untrended): 5.8% 5 Year Unlevered IRR: 10.2% Total Est. Cost: $56.8 million Cost Per Unit: $228k Return on Cost (Untrended): 6.2% 5 Year Unlevered IRR: 10.9% 7

8 Coastal California Developments The Desmond On Wilshire (175 units) Los Angeles, CA Q Construction Start Q Delivery of First Units Total Est. Cost: $76.3 million Cost Per Unit: $436k Return on Cost (Untrended): 5.0% 5 Year Unlevered IRR: 9.0% Q Property Stabilization 350 Eighth (410 units) Located in the South of Market SoMa submarket of San Francisco 50/50 joint venture with AIG Global Real Estate Plan to build 410 apartment units, 40,000 square feet of commercial space and underground parking Construction is scheduled to start in the spring of 2014 Return on Cost (Untrended): 5.5% 6.0% 950 Third (472 units) Located in the Arts District of downtown Los Angeles 50/50 joint venture with Legendary Development Plan to build 472 apartment units, 30,000 square feet of commercial space and underground parking Construction scheduled to start in the summer of 2014 Return on Cost (Untrended): 5.5% 6.0% 8

9 Strong and Improving Credit Metrics Net Debt / Annualized EBITDA Net Debt / Undepreciated Book Value 49.1% 7.5x 8.1x 7.5x 7.4x 45.6% 47.1% 45.9% 6.9x 41.7% PF Fixed Charge Coverage PF % Unencumbered NOI 3.4x 72.2% 74.0% 3.0x 3.0x 59.3% 2.3x 44.2% 1.9x 34.4% PF PF 9 Note: is as reported and 2014 PF is midpoint of guidance and reflects announced acquisitions, dispositions, development, and financing activities. Source: Company financials.

10 Low Cost of Debt Associated Estates Historical Cost of Debt 7.1% 7.4% 7.2% 6.7% 6.1% 6.2% 5.5% 4.8% 3.7% 3.8% % Weighted Average Cost of Debt (1) 4.9% 4.6% 4.4% 4.4% 4.4% 4.4% 4.3% 4.3% 3.9% 3.9% 3.8% AIV BRE EQR HME ESS CPT Avg. PPS UDR AVB MAA AEC 10 (1) As of 12/31/2013. Source: Company financials.

11 Manageable Debt Maturity Schedule Fixed Mortgages Unsecured Notes Term Loan Revolver Construction Loans 18% 16% 6% 8% 11% 5% 3% 1% 5% 6% 2% 4% 3% 5% 7% Debt $45 $20 $50 $134 $198 $12 $80 $91 $41 $87 $55 # of Properties Note: As of 12/31/2013; $ in millions.

12 Sustained Operational Outperformance Multifamily REIT Average Annual NOI Growth (1) 3.9% 3.9% 4.0% 3.6% 3.3% 3.3% 3.3% 3.4% 3.2% 2.9% 2.6% 2.6% PPS BRE CPT AIV MAA EQR Avg. AVB UDR ESS AEC HME 12 (1) Measures simple average of SS NOI growth as reported annually from 2004 to Source: Company financials.

13 Highest Long-Term TSR Multifamily REIT Total Shareholder Return 304.2% 268.1% 226.6% 199.4% 169.1% 170.9% 106.5% 115.0% 126.8% 141.5% 153.5% 69.9% AIV CPT UDR HME PPS BRE EQR Avg. MAA ESS AVB AEC 13 Source: KeyBanc Capital Markets Leaderboard, 12/31/2013.

14 Conservative Dividend Payout Ratio 2014 AFFO Payout Ratio 72.6% 73.6% 73.7% 73.8% 64.9% 65.0% 66.4% 66.9% 67.9% 68.8% 70.1% 61.9% AIV PPS AEC BRE ESS MAA Avg. UDR AVB HME CPT EQR Dividend Yield (1) 4.8% 4.3% 4.4% 4.0% 3.4% 3.5% 3.6% 3.6% 3.6% 2.5% 2.9% 3.0% BRE ESS PPS AIV EQR Avg. UDR AVB CPT MAA AEC HME 14 Note: 2014 AFFO based on KeyBanc Capital Markets Leaderboard, 3/7/2014 and Company financials. (1) Stock price as of closing on 3/7/2014.

15 Diversified Portfolio Properties located in high barrier-to-entry submarkets in major metropolitan areas Northeast Ohio: Southeast Michigan: Western Michigan: Columbus: : Maryland: Northern California: Metro DC: Southern California: Indianapolis: Northern Virginia: Nashville: Southeast Virginia: Charlotte: Planned acquisition Planned disposition Dallas: Atlanta: Raleigh-Durham: Stabilized property Development project JV development project Portfolio: 52 properties containing 13,324 units located in ten states (1) Tampa: Southeast Florida: 15 Note: Pro forma for announced acquisitions, dispositions and developments. (1) As of 3/10/14.

16 The Apartments at Blakeney Charlotte, NC 295 Units Built in AssociatedEstates.com 16