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  • Fourth Quarter 2014 January 29, 2015

    Investor Teleconference

    Presentation

    AVALON ALDERWOOD

    Lynnwood, WA

    EAVES CREEKSIDE

    Mountain View, CA

    AVA HIGH LINE

    New York, NY

  • 2

    See Appendix for information about

    Forward-Looking Statements and definitions

    of non-GAAP financial measures and other terms.

  • INTRODUCTION

    Participants:

     Tim Naughton, Chairman & CEO

     Kevin O’Shea, Chief Financial Officer

     Matt Birenbaum, Chief Investment Officer

     Sean Breslin, Chief Operating Officer

    3

  • REVIEW OF FOURTH QUARTER AND FULL YEAR 2014 RESULTS

    Source: Company reports.

    (1) 4Q 2014 reflects Established Communities as of April 1, 2014. Full Year 2014 reflects Established Communities as of January 1, 2014.

    (2) Capital Raised includes net proceeds from all dispositions and debt and equity issuances. Weighted Average Initial Cost of Capital includes wholly-owned dispositions and debt

    and equity issuances.

    4

    4Q 2014 and Full Year 2014 Results 4Q 2014 Full Year 2014

    Core FFO per Share Growth 7.4% 8.8%

    Same-Store Rental Revenue Growth | Including Redevelopment

    (1) 4.1% | 4.2% 3.9% | 4.1%

    Development Completions | Initial Projected Stabilized Yield $ 360M | 7.3% $ 1.1B | 7.1%

    Development Starts $ 170M $ 1.3B

    Capital Raised | Weighted Average Initial Cost of Capital (2) $ 405M | 3.7% $ 1.4B | 3.8%

  • RENT CHANGE WELL ABOVE PRIOR YEAR PERIOD AND

    PORTFOLIO WELL POSITIONED HEADING INTO 2015

    Source: Company reports.

    Year-over-year same-unit rent change represents the weighted average like-term new move-in and renewal rent change for Established Communities as of April 1, 2014.

    (1) 2015 data through January 25th, 2015.

    SAME-STORE YEAR-OVER-YEAR SAME-UNIT RENT CHANGE

    -

    2%

    4%

    6%

    8%

    JANUARY APRIL JULY OCTOBER

    2013 2014

    -

    2%

    4%

    6%

    8%

    OCTOBER NOVEMBER DECEMBER JANUARY

    4 MONTHS ENDING JANUARY 2014

    4 MONTHS ENDING JANUARY 2015

    (1)

    260 BASIS-POINTS

    STRONGER IN 4Q 2014

    5

  • Actual Original

    Projection D

    1. Avalon Bloomingdale Northern New Jersey 31.5$ 181,000$ 1,950$ 1,955$ (5)$

    2. Archstone Toscano Houston 87.5 185,000 1,775 1,773 2

    3. AVA University District Seattle 75.2 266,000 2,075 1,760 315

    4. Avalon Ossining Westchester 36.8 219,000 2,395 2,140 255

    5. Avalon Morrison Park San Jose 79.1 316,000 2,825 2,560 265

    6. Avalon Arlington North Northern Virginia 82.0 360,000 2,855 2,860 (5)

    7. Avalon Dublin Station Oakland-East Bay 77.7 307,000 2,500 2,080 420

    8. AVA 55 Ninth San Francisco 121.0 443,000 3,640 3,160 480

    9. Avalon Canton at Blue Hills Boston 40.9 209,000 1,950 1,780 170

    10. Memorial Heights Villages Houston 52.7 166,000 1,795 1,790 5

    11. Avalon Berkeley Oakland-East Bay 33.7 359,000 2,680 2,415 265

    12. Avalon Stratford Fairfield 29.7 228,000 1,900 1,820 80

    13. Avalon North Point Lofts Boston 28.0 272,000 2,130 2,215 (85)

    14. Avalon Exeter Boston 126.6 677,000 5,615 4,335 1,280

    15. Avalon Mosaic Northern Virginia 110.6 208,000 2,090 1,930 160

    16. Avalon Huntington Station Long Island 81.2 268,000 2,500 2,470 30

    17. Avalon San Dimas Los Angeles 40.1 257,000 1,860 1,825 35

    Total | Weighted Average 1,134.3$ 275,000$ 2,435$ 2,230$ 205$

    Wtd. Avg. Age Value / Home Rent / Home

    19 Years 360,000$ 2,270$ Stabilized Portfolio

    2014 Development

    Completions

    Total

    Capital

    Cost (M)

    Total

    Capital Cost

    / Home

    Market

    Avg Rent per Home

    $1.1 BILLION OF DEVELOPMENT COMPLETED AT HIGHLY

    ACCRETIVE YIELDS

    Source: Company reports.

    (1) Value / Home is an approximation for the stabilized portfolio and is derived from Company Net Asset Value per Green Street Advisors, Inc.

    (1)

    6

    2014 Completions

    Weighted Average Initial

    Projected Stabilized Yield

    = 7.1%

  • AVA U

    DISTRICT Seattle, WA

    $ 75M TOTAL CAPITAL COST

    $ 2,075 AVG RENT PER UNIT

    AVALON

    MOSAIC Fairfax, VA

    $ 111M TOTAL CAPITAL COST

    $ 2,090 AVG RENT PER UNIT

    AVA

    55 NINTH San Francisco, CA

    $ 121M TOTAL CAPITAL COST

    $ 3,640 AVG RENT PER UNIT

    AVALON

    EXETER Boston, MA

    $ 127M TOTAL CAPITAL COST

    $ 5,615 AVG RENT PER UNIT

    AVALON

    MORRISON

    PARK San Jose, CA

    $ 79M TOTAL CAPITAL COST

    $ 2,825 AVG RENT PER UNIT

    AVALON

    HUNTINGTON

    STATION Huntington, NY

    $ 81M TOTAL CAPITAL COST

    $ 2,500 AVG RENT PER UNIT

    2014 COMPLETIONS

    7

  • MARKET REWARDING DEVELOPMENT PERFORMANCE?

    Source: SNL Financial, Company reports.

    Multifamily Sector Weighted Average includes AEC, AIV, CPT, EQR, ESS, HME, MAA, PPS and UDR and is weighted based on Total Market Capitalization per SNL Financial as of September 30,

    2014. Peer data includes each peer’s most recent 2014 guidance. FFO Growth reflects each peer’s most recent FFO (excluding non-routine items) guidance. AVB Revenue, NOI and Core FFO

    growth includes actual data through December 31, 2014. Total Shareholder Return is through December 31, 2014.

    2 2 .2

    %

    2 9 .0

    %

    2 0 .7

    %

    2 7 .6

    %

    -

    10%

    20%

    30%

    40%

    REVENUE NOI

    CUMULATIVE SAME-STORE REVENUE & NOI GROWTH

    2010 - 2014

    7 0 .4

    %

    6 4 .2

    %

    4 6 .9

    %

    6 3 .4

    %

    -

    20%

    40%

    60%

    80%

    CORE FFO GROWTH TOTAL SHAREHOLDER RETURN

    TOTAL CORE FFO PER SHARE GROWTH & TOTAL SHAREHOLDER RETURN

    2010 - 2014

    AVB MULTIFAMILY SECTOR WEIGHTED AVERAGE

    8

    DISCONNECT?

  • Full Year 2015

    Projected Core FFO per Share range $ 7.20 - $ 7.50

    Projected Core FFO per Share change at the midpoint of the outlook range 8.4%

    Established Communities (2015 Buckets)

    Rental Revenue change 3.5% - 4.5%

    Operating expense change 3.0% - 4.0%

    Net Operating Income change 3.5% - 5.0%

    Development and Redevelopment Activity (millions)

    Development Starts: Expected Total Capital Cost for Communities started in 2015 $ 1,250

    Development Completions: Expected Total Capital Cost for Communities completed during 2015 $ 1,200

    Development Spend: Expected Total Capital Cost to be incurred for Communities during 2015 $ 1,500

    Redevelopment Spend: Expected Total Capital Cost to be incurred for Communities during 2015 $ 200

    2015 FINANCIAL OUTLOOK

    Source: Company reports.

    (1) Presented at AVB share.

    (2) Including land purchases.

    9

    (1)

    (2)

  • 7.8% DIVIDEND INCREASE IN 2015 CONTINUES 20+ YEAR

    TRACK RECORD OF STRONG DIVIDEND GROWTH

    Source: Company reports.

    -

    100

    200

    300

    1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

    ANNUAL COMMON DIVIDENDS PAID INDEXED TO 100 IN 1994

    21 YEAR CAGR = 5.3%

     40% SINCE 2011

    10

  • ECONOMIC CONDITIONS CONTINUE TO IMPROVE

    11

    Source: National Association of Business Economics, Moody’s Analytics, AVB Market Research Group.

    Economic Outlook

    2015

    GDP Very strong real GDP growth over the last two quarters augurs for a strong economy in 2015.

    Industry

    Profits NABE projects corporate profits will increase by 6.7% in 2015.

    Hiring The forecast calls for almost 3 million net new jobs in each of 2015 and 2016.