Multifamily Overview. Paul Earle Executive Vice President

Transcription

1 1 Multifamily Overview Paul Earle Executive Vice President

2 Multifamily at Colonial Properties Trust Why Multifamily? Operating Platform Strategy Team Accountability Geographic Strategy Technology Initiatives Development Program 2

3 Why Multifamily? Improving fundamentals should produce positive NOI growth Three out of every five jobs created are in the Sunbelt Favorable demographic changes over next ten years Echo Boomers 85 million Baby Boomers 75 million Immigration POPULATION AGE YEARS Proven track record 2005 SS NOI growth 8.7% 3-year avg growth rate 2x highest peer MILLIONS Source: Economy.com 3

4 Operating Platform Strategy Team Accountability 4

5 How We Deliver Results - Strategy Invest in high growth Sunbelt cities Acquire properties with a potential for high NOI growth Develop properties in-house to create value Capitalize on value created through recycling Operate from a branded platform Colonial Grand Colonial Village 5

6 Colonial Grand Properties 6

7 Colonial Village Properties 7

8 How We Deliver Results Team Operate within performance-based culture Key performance indicators (KPIs) Personal Team Portfolio Recruit the right people Provide the right training Reward through performancebased pay system 8

9 How We Deliver Results Accountability Key Performance Indicators (KPIs) Effective Rental Rate Growth Physical Occupancy Net Operating Income Leasing Agent Excellence Expense/CapEx Control 9

10 Operating Platform Results Physical Occupancy and Effective Rent Growth EFFECTIVE RENTAL RATE JUL 05- JUL 06 CLP COMPS $800 $790 $780 $770 $760 $750 Jul '05 Aug '05 Sep '05 Oct '05 Nov '05 Dec '05 Jan '06 Feb '06 Mar '06 Apr '06 May '06 Jun '06 Jul '06 Annual Rate of Effective Rental Rate Growth 5.36% 5.25% VACANCY RATE JUL 05- JUL 06 CLP COMPS 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% Average Vacancy Rate 4.40% 5.65% 3.5% Jul '05 Aug '05 Sep '05 Oct '05 Nov '05 Dec '05 Jan '06 Feb '06 Mar '06 Apr '06 May '06 Jun '06 Jul '06 SOURCE: AXIOMETRICS INC. 10

11 Operating Platform Results Same Store NOI 2003/ / / YEAR AVG HME -1.1% AEC 9.0% CLP (MF) 8.7% CLP (MF) 2.7% ASN -1.4% CLP (MF) 3.4% AIV 6.1% HME 1.0% CLP (MF) -3.9% HME 2.2% BRE 5.5% ESS 0.6% UDR -4.0% MAA 1.2% ESS 5.0% MAA 0.5% SAME STORE NOI ESS MAA CPT BRE PPS EQR -4.1% -4.1% -5.0% -6.0% -6.0% -6.7% ESS CPT EQR BRE AVB UDR 0.8% -0.6% -0.8% -1.0% -1.1% -1.1% MAA AVB PPS ASN CPT UDR 4.4% 4.3% 3.7% 3.6% 3.6% 3.6% ASN AEC BRE UDR CPT PPS 0.2% -0.2% -0.5% -0.5% -0.7% -1.2% AVB -8.2% PPS -1.3% EQR 3.4% EQR -1.4% AEC -8.7% ASN -1.6% HME 1.9% AVB -1.7% AIV -10.3% AIV -5.1% AEC -1.0% AIV -3.1% SOURCE: Green Street Advisors and company reports 11

12 Operating Platform Results Leasing Agent Excellence COMPANY Colonial Properties AvalonBay BRE Properties Post Properties Essex United Dominion Associated Estates Archstone Equity Residential Camden Home Properties Mid-America AIMCO Total Properties Total Units TICKER CLP AVB BRE PPS ESS UDR AEC ASN EQR CPT HME MAA AIV 4Q , , , ,007 1Q , , Q , ,349 YTD SOURCE: AXIOMETRICS INC. 12

13 Operating Platform Results Superior Capex Performance COMPANY TICKER Year CapEx Avg 3-Year NOI Avg Colonial Properties CLP $420 $661 $693 $ % Essex ESS 1,097 1,185 1,163 1, % Archstone ASN ,640 1, % Associated Estates AEC % PER UNIT BRE United Dominion Camden BRE UDR CPT ,294 1, , ,070 1, % -0.5% -0.7% Post PPS 1, % Equity Residential EQR 856 1, % Avalon Bay AVB % AIMCO AIV 887 1,289 2,325 1, % Mean $768 $918 $1,138 $ % SOURCE: Green Street Advisors and company reports 13

14 Multifamily Geographic Strategy Scott Sladek 14 Senior Vice President

15 Strategy for Geographic Growth TOP TEN HIGH GROWTH SUNBELT CITIES , , , , , ,000 0 Dallas Phoenix Atlanta Las Vegas Orlando Austin Tampa Charlotte Nashville Raleigh Population Growth Employment Growth SOURCE: U.S. Census Bureau 15

16 Additional Considerations Submarket occupancy Supply and demand Employment growth in relation to permitting trends In-depth analysis of submarkets Proximity to entertainment, retail and employment centers 16

17 Geographic Multifamily Diversification Mississippi 2% Arizona 2% Tennessee 2% New Mexico 1% Nevada 1% North Carolina 20% Alabama 15% South Carolina 5% Texas 15% Virginia 10% Florida 13% Georgia 14% No more than 20% of our NOI generated from any one state 17

18 Diversified, but Efficient Raleigh Huntsville 5% 4% Charleston 4% Austin 4% Norfolk 3% Savannah 3% Fort Worth 3% Greensboro 3% Durham 2% Misc 17% Richmond 6% 18 Dallas 8% Atlanta 10% Birmingham 9% Charlotte 9% Orlando 10% No more than 10% of our NOI generated from any one city

19 Sunbelt Demand High Migration States DEMAND DRIVERS Immigration 85M Echo boomers 75M Baby boomers SOURCE: U.S. Census Bureau 19

20 Job/Population/Income Growth Exceed U.S. Average (ANNUAL % CHANGES) CURRENT (JUNE 06) FUTURE ( AVERAGE) MARKET JOB GROWTH POPULATION GROWTH INCOME GROWTH JOB GROWTH POPULATION GROWTH INCOME GROWTH Atlanta 2.6% 2.3% 5.9% 2.0% 2.2% 6.3% Austin 3.1% 3.2% 8.7% 3.2% 3.0% 8.1% Charlotte 2.0% 2.2% 7.5% 1.7% 1.8% 6.7% Dallas 3.5% 2.3% 8.7% 2.5% 2.1% 7.6% Orlando 3.5% 2.7% 8.4% 2.7% 2.3% 7.0% Phoenix 5.1% 2.6% 8.0% 3.2% 2.5% 7.1% U.S. Average 1.4% 0.9% 5.5% 1.3% 0.9% 5.3% SOURCE: Economy.com 20

21 Southward Migration LARGEST NET DOMESTIC OUT- MIGRATION BY STATE DOMESTIC IN- MIGRATION BY REGION 2 New York -874,000 Northeast -987,262 California -756,000 Midwest -644,792 Illinois -343,000 South 1,411,172 New Jersey -183,000 West 220,882 Pennsylvania -131,000 SOURCE: 1) U.S. Census Bureau 2000 Census 2) U.S. Census Bureau April

22 State Projected Growth, PROJECTED GROWTH, Growth 25% or more Growth 10% to 24% Less than 10% Colonial Properties MF Portfolio SOURCE: U.S. Census Bureau 22

23 Rise of Renters in Prime Age Group POPULATION AGE YEARS MILLIONS Source: Economy.com 23

24 Case Study 1: Creating Value through Acquisition (Charlotte, NC) Property Name Colonial Grand at Beverly Crest Current GAV (acq cost plus capex) $23.9M Units 300 Current Market Value at 6.0% Cap Rate* $25.8M Year Acquired 2004 Value Created $1.9M Job Growth -0.6% 0.8% 2.4% Population Growth 2.3% 2.5% 3.2% Income Growth 2.8% 7.0% 6.2% * This Cap Rate is equal to the acquisition Cap Rate 24

25 Case Study 2: Creating Value through Acquisition (Atlanta, GA) Property Name Colonial Grand at McGinnis Ferry Current GAV (acq cost plus capex) $40.5M Units 434 Current Market Value at 6.25% Cap Rate* $44.9M Year Acquired 2004 Value Created $4.4 M Job Growth -1.0% 1.4% 3.0% Population Growth 2.7% 2.4% 2.5% Income Growth 2.2% 6.0% 6.6% * This Cap Rate is equal to the acquisition Cap Rate 25

26 Multifamily Technology Initiatives Ray Hutchinson 26 Senior Vice President

27 How We Act Business Strategy + Team + Accountability (KPIs) Equals Results Technology acts as a tool to all 3 components. 27

28 Multifamily Core Beliefs I Believe 1. Every employee owns the responsibility of achieving the company s goal of bench-marking in the top quartile of our REIT peer group. 2. Our branded culture is one of a cohesive work team that celebrates and rewards star performers. 1. Every employee owns the 3. Each employee will value, honor and respect their fellow team members and residents. 4. Each stakeholder encounter is a new opportunity to provide outstanding service and make them feel appreciated. responsibility of achieving the 5. Every employee company s shares the responsibility goal of protecting of Colonial Properties Trust s assets by creating a safe environment and maintaining an uncompromising level of cleanliness. 6. It is each associate s benchmarking responsibility to maximize in their talent the by fully top executing the knowledge gained through world-class training opportunities provided to them by Colonial Properties. quartile of our REIT peer group. 7. The best way to service our customers is by using the S.T.A.R. approach: S= Stand, smile and approach; T= Take action to serve; A= Accept responsibility to resolve the request; R= Remember to follow up. 8. Our pride and sense of ownership in Colonial Properties is a direct result of each team member s right to voice their opinion on decisions that affect them. 9. It is the responsibility of every employee to embrace open communication that ensures professionalism in the workplace. 10. Every associate represents the company both in and out of the workplace through actions and personal appearance. 28

29 IT Maturity Strategy PROCESS AUTOMATION DECISIONS KNOWLEDGE INFORMATION DATA KEY PERFORMANCE INDICATORS MATURITY LOWER COST OF GATHERING DATA 29

30 Multifamily Technology Overview MRI - RM Ops Technology SharePoint Enhanced Website 30

31 MRI Dashboard The successful implementation of our web-based Residential Property Management Application across Colonial s 137 properties and 40,000 units was completed in less than 6 months; the fastest portfolio rollout in the residential industry. Jeff Thompson President Intuit Real Estate Solutions 31

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36 Technology as An Accelerator 2003/ / / YEAR AVG HME -1.1% AEC 9.0% CLP (MF) 8.7% CLP (MF) 2.7% ASN -1.4% CLP (MF) 3.4% AIV 6.1% HME 1.0% CLP (MF) -3.9% HME 2.2% BRE 5.5% ESS 0.6% UDR -4.0% MAA 1.2% ESS 5.0% MAA 0.5% SAME STORE NOI ESS MAA CPT BRE PPS EQR -4.1% -4.1% -5.0% -6.0% -6.0% -6.7% ESS CPT EQR BRE AVB UDR 0.8% -0.6% -0.8% -1.0% -1.1% -1.1% MAA AVB PPS ASN CPT UDR 4.4% 4.3% 3.7% 3.6% 3.6% 3.6% ASN AEC BRE UDR CPT PPS 0.2% -0.2% -0.5% -0.5% -0.7% -1.2% AVB -8.2% PPS -1.3% EQR 3.4% EQR -1.4% AEC -8.7% ASN -1.6% HME 1.9% AVB -1.7% AIV -10.3% AIV -5.1% AEC -1.0% AIV -3.1% SOURCE: Green Street Advisors and company reports 36

37 Multifamily Development Overview Ed Wright 37 Senior Vice President

38 Development Track Record Began development in properties 13,568 units Invested $900 million in development 38

39 Development Pipeline Properties Under Construction Predevelopment Pipeline Shadow Development Pipeline Total Development Pipeline $225,000,000 $150,000,000 $425,000,000 $800,000,000 MF GAV - $2,570M Under Construction - $225M Predevelopment Pipeline - $150M Shadow Development Pipeline - $425M 39

40 Regional Development Offices and Target Markets Las Vegas Nashville Raleigh Charlotte Phoenix Dallas Austin Atlanta Orlando Tampa 40

41 Top 10 Target MSA s Atlanta Austin Charlotte Dallas Las Vegas Nashville Phoenix Orlando Raleigh Tampa 41

42 Submarket Selection Criteria Permits vs. Job Growth Occupancy Trends Rent Growth Trends Average Home Price Quality of Schools Barriers to Entry Average Age of Existing Product 42

43 Site Selection Criteria Locations on golf courses, in planned developments, on lakes, in prestigious neighborhoods and in mixed use developments 20 minutes from major employment center 20 minutes from major retail 5 minutes from support retail Visible from primary traffic artery Near new infrastructure improvements 43

44 Development Pipeline Nashville Raleigh Las Vegas Phoenix Memphis Charlotte Myrtle Beach Austin Gulf Shores Savannah Orlando $800M: 30% of GAV Tampa Under Construction Predevelopment Shadow Pipeline 44

45 Colonial Construction Services Award-winning construction team Headquartered in Orlando, Florida with regional offices in Raleigh and Austin Fully licensed in six states Ranked 43rd largest multifamily construction company in nation by Builder s Magazine Designated an Accredited Quality Contractor by Associated Builders and Contractors 45

46 Case Study 1: Creating Value through Development (Orlando, FL) Property Name Colonial Village at Twin Lakes Units 460 Year Completed 2004 Development Cost $34.8M Year Stabilized 2005 Current Market Value $52.8M Value Created at 6.00% $17.9M 46

47 Case Study 2: Creating Value through Development (Montgomery, AL) Property Name Colonial Grand at Promenade Units 384 Year Completed 2000 Development Cost $27.7M Year Stabilized 2001 Current Market Value $41.8M Value Created at 6.25% $14.1M 47

48 Case Study 3: Creating Value through Development (Orlando, FL) Property Name Colonial Grand at TownPark Units 456 Year Completed 2002 Development Cost $37.1M Year Stabilized 2003 Current Market Value $61.3M Value Created at 6.00% $24.2M 48

49 Award Winning Development Recipient of over 27 development & construction awards over past nine years 5 Pillars of the Industry Awards 7 Aurora Awards 7 Associated Builders and Contractor Awards 49

50 Multifamily Questions & Answers 50