November November 2012

Transcription

1 NAREIT REIT World NAREIT REIT World November 2012 November

2 Company Overview Multifamily NOI Current: 86% Target: 90% Multifamily Portfolio 35,067 apartment homes 115 apartment communities 96.4% Occupancy Average age: 16.6 years Ancillary Income Commercial NOI 10% - 20% Current: 14% Target: 10% Commercial Portfolio Office: 1.2MM wholly owned and 1.7MM joint venture sf Retail: 1.2MM wholly owned and 0.3MM joint venture sf NOTE: Property statistics as of 9/30/12. Multifamily and Commercial portfolios do not include third-party managed business. 2 2

3 Geographic Diversity 86% of Multifamily 3Q 2012 NOI Generated from Top Quartile Sunbelt Markets 3Q 2012 Multifamily NOI % Las Vegas Phoenix Dallas/Ft Worth Austin Nashville Birmingham Richmond Norfolk Charlotte Raleigh-Durham Charleston Atlanta Orlando Tampa Sarasota Charlotte, NC 14.3% Dallas/Fort Worth, TX 11.7% Raleigh-Durham, h NC 97% 9.7% Austin, TX 9.1% Atlanta, GA 7.4% Orlando, FL 6.4% Charleston, SC 5.5% Richmond, VA 49% 4.9% Birmingham, AL 4.4% Phoenix, AZ 3.2% Tampa, FL 2.9% Las Vegas, NV 2.1% Norfolk, VA 14% 1.4% Nashville, TN 1.3% Sarasota, FL 1.2% 3 3

4 Multifamily Portfolio Statistics Two distinct brands that appeal to both A and B renters Colonial Grand Properties: 62 Units: 19,736 Avg Monthly Rev: $1,000 Class A Colonial Village Properties: 43 Units: 12,407 Avg Monthly Rev: $866 Class B NOTE: In addition 2,924 non-branded units are either wholly-owned or held in joint ventures 4 4

5 Portfolio Statistics MULTIFAMILY SAME PROPERTY OPERATIONAL PERFORMANCE Physical % of Avg. Revenue Change in Market Units Occupancy Actual NOI per Unit Revenue Y/Y Atlanta 2, % 8.2% $ % Austin 2, % 9.3% % Birmingham 1, % 5.0% % Charleston 1, % 5.2% % Charlotte 4, % 14.8% % Dallas/Fort Worth 3, % 10.8% % 7.8% Huntsville % 2.7% % Orlando 1, % 7.2% 1, % Phoenix % 3.7% % Raleigh 2, % 8.2% % Richmond 1, % 6% 5.6% % Savannah 1, % 5.1% % Other 4, % 14.2% % Total 30, % 100.0% $ % Note: As of 3Q12 5 5

6 2012 Directives Grow the Company Core NOI Development Acquisitions Achieve Investment Grade Rating Received S&P upgrade (BBB-) in 1Q 12 Received ed Moody s upgrade (Baa3) in 3Q 12 Improve the Portfolio Increase rates on new and renewal leases Sell commercial assets to achieve 90/10 portfolio mix Recycle older multifamily assets Sell non-income producing assets 6

7 Grow the Company Core NOI CLP SS NOI % and Employment % 2000 to FY 2012E Same Store NOI % Employment Growth CLP Markets 7.00%-7.75% 7.3% 4.4% 3.0% 3.4% 5.2% 5.0% 5.2% 2.7% (3.9%) (3.5%) (6.8%) (6.9%) FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12E NOTE: The 2012 employment growth estimate is an average based on data provided by Axiometrics (3Q12), PPR (3Q12) and Witten Advisors (3Q12) 7

8 Grow the Company Development Pipeline 6 multifamily il properties under construction with 4 multifamily il sites on balance sheet Year 1 Yield: 7.0% - 7.5% [Year 1 Yield (new dollars): 9.0% %] Anticipate $100 - $110 million of development spending in 2012 MULTIFAMILY Active Developments Location Units/SF Compl. Date Total Cost CG at Double Creek Austin, TX 296 1Q13 $31.7 MM CG at Lake Mary (Phase I) Orlando, FL 232 1Q13 $30.3 MM CG at Lake Mary (Phase II) Orlando, FL 108 1Q13 $13.9 MM CR at South End Charlotte, NC 353 4Q13 $59.3 MM CG at Ayrsley y (Phase II) Charlotte, NC 81 2Q13 $9.1 MM CG at Randal Park Orlando, FL 462 1Q14 $57.0 MM 1,532 $201.3 MM 8

9 Grow the Company Completed Development Colonial Grand at Hampton Preserve Tampa, FL 486 units Total Cost: $52.2 million Completed in 2Q12 Occupancy: 93.8% (as of 9/30/12) Stabilized 5 quarters ahead of plan Stabilized first year yield: 7.6% Revenue per Unit: $1,168/month 9

10 Grow the Company Potential Near Term Development Sites MULTIFAMILY Near Term Developments Location Units/SF Current Inv CG at Thunderbird Phoenix, AZ 244 $8.0 MM CG at Bellevue (Phase II) Nashville, TN 220 $3.6 MM CG at Sweetwater Phoenix, AZ 195 $7.2 MM CG at Azure Las Vegas, NV 390 $10.6 MM COMMERICAL 1,049 $29.4 MM Colonial Promenade Huntsville (Phase II) Huntsville, AL TBD $4.5 MM Colonial Promenade Nor du Lac Covington, LA 236,000 $25.4 MM Randal Park Orlando, FL TBD $10.9 MM 236,000 $40.8 MM 10

11 Grow the Company Acquisitions 3 unencumbered multifamily il properties - $112.8 million Avg Revenue: $1,000 per month/unit Avg Age: 5 years Avg Capex: <$250 per unit Anticipate $115 - $185 million of acquisitions in 2012 CG at Brier Falls 350 Units Raleigh - $45.0M CG at Fairview 256 Units - Dallas - $29.8M CG at Research Park 370 Units - Raleigh - $38.0M 11 11

12 Achieve Investment Grade Rating In February 2012, Standard & Poor s upgraded the Company s senior unsecured notes to BBB- In September 2012, Moody s upgraded the Company s senior unsecured notes to Baa3 Balance Sheet Targets Target Current (9/30/12) Debt + Preferred / Total Assets < 45.0% 44.8% Debt / EBITDA < 8.0x 8.1x Fixed Charge Coverage > 2.0x 2.3x Secured Debt / Total Assets < 20.0% 17.5% NOTE: All values include pro-rata share of joint ventures 12

13 Achieve Investment Grade Rating 2012 Financing Activity Renegotiated unsecured revolving credit facility in March 2012 Size: $500 million Maturity: March year extension option Rate: 1-month LIBOR Bps Facility Fee: 30 Bps Issued 5-year $150 million unsecured term loan at a fixed rate of 2.71% 13

14 Debt Maturity Schedule Staggered maturity schedule with balanced maturities $600 $500 $400 $300 $184 $30 $521 $200 $5 $39 $13 $100 $- $17 $2 $99 $192 $185 $14 $75 $150 $ Thereaf ter Unsecured Consolidated Secured Unconsolidated Secured LOC $88 (1) Debt maturities as of 9/30/12, (2) Unconsolidated debt represents Company s pro-rata share. (3) Values represented in millions. 14

15 Improve the Portfolio Same Property Rental Rate % Change New Leases Renewals 4.0% 2.0% 0.0% (2.0%) 3.3% 2.6% Sep YTD 7.0% 6.0% 5.0% 4.0% 3.0% 2.9% 6.4% 6.3% (4.0%) (6.0%) (8.0%) (10.0%) (7.9%) (3.8%) 2.0% 1.0% 0.0% (1.0%) (2.0%) Sep YTD (1.0%) 15 15

16 Improve the Portfolio Sell Commercial Assets Sold 25% joint venture interest in CP Madison in February 2012 for $3.0 million cash Sold 15% joint venture interest in DRA-CLP in June 2012 which eliminated $111.3 million of near term debt Sold CP Alabaster in October 2012 for $37.4 million cash Other commercial assets are currently being marketed for sale Recycle Older Multifamily Assets Sell Non-Income Producing Assets YTD sold $6.5 million of condos and land/outparcels 16

17 Strong Multifamily Fundamentals Multifamily Sunbelt fundamentals are attractive Increasing Echo-boomer population high propensity to rent Declining homeownership Job growth and household formation Manageable new multifamily supply 17

18 Echo Boomer Population Growth Echo Boomers are a key demand driver for apartment rentals National Population Aged (in millions) Source: Woods & Poole Economics 18

19 Employment Change by Age 30% 3.0% Year-Over-Year Change in Employment Homeownership Rate 80% 2.5% 70% 2.0% 1.5% 1.0% 05% 0.5% 0.0% (0.5%) 60% 50% 40% 30% 20% (1.0%) 10% (1.5%) 0% Change in Employment Homeownership Rate Source: BLS, US Census As of: 3Q12 19

20 US Homeownership Rates The US homeownership rate peaked at 69.2% and is currently 65.5%; expected to decline further to 63% - 64% Every 1% decline = 1.3 million new renters 70.0% 69.0% 68.0% 67.0% 66.0% 65.0% 64.0% 63.0% % Q Source: US Census, UBS Research As of 3Q12 20

21 Expected Employment Growth Y/Y Employment Growth 8% 6% 4% 2% 0% (2%) (4%) (6%) (8%) Mar-90 Feb-92 Jan-94 Dec-95 Nov-97 Oct-99 Sep-01 Aug-03 Jul-05 Jun-07 May-09 Apr-11 Mar-13 Feb-15 Jan-17 CLP Markets PPR54 Average Source: Moody's Economy.com, PPR As of: 3Q12 21

22 Job Growth by Metro 25% Forecast Job Growth Weak Near Term, Strong Long Term Strong Near Term, Strong Long Term 20% Austin 15% 10% 5% Las Vegas San Antonio Dallas - Fort Worth Raleigh Houston Atlanta Orlando Charlotte Phoenix Palm Beach County Portland Denver Minneapolis Indianapolis Seattle Inland Empire Philadelphia San Diego San Jose Washington DC New York Cincinnati Long Island Boston Orange County Miami Cleveland Chicago Los Angeles Detroit San Francisco Weak Near Term, Weak Long Term Strong Near Term, Weak Long Term 0% -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% Lagging Year Job Growth Source: Moody s Analytics As of 3Q12 22

23 Rents as a % of Income vs. Rent Growth 23% 21% 19% 17% 15% 13% 11% 9% Forecast Rent Growth Charlotte Dallas - Fort Worth Las Vegas Inland Empire East Bay Portland Long Island Denver Philadelphia Austin San Jose Honolulu Boston Seattle Columbus North - Central New Jersey Hartford San Diego Atlanta Indianapolis Kansas City Oklahoma City Orlando Palm Beach County Raleigh Salt Lake City Phoenix Orange County Jacksonville Pittsburgh Nashville Washington - NoVA - MD St. Louis Stamford Sacramento San Antonio Minneapolis Tampa Houston Richmond New Orleans Baltimore Chicago Fort Lauderdale Memphis Cincinnati New York San Francisco Los Angeles Miami 7% Detroit Milwaukee Cleveland Norfolk 5% 10% 15% 20% 25% 30% 35% 40% Current Rent As a Percent of Income South East MidWest West Source: Property and Portfolio Research As of 3Q12 23

24 Supply & Demand in CLP Markets Demand & Supply (000s Units) Vacancy 25,000 12% 20,000 10% 15,000 10,000 8% 5,000 6% 0 4% (5,000) (10,000) 2% (15,000) % Quarterly Change in Demand Quarterly Change in Supply Vacancy Rate Source: Property and Portfolio Research As of: 3Q12 24

25 2012 Guidance FFO per share: $ $1.27 Multifamily Same-Property NOI: 7.00% 7.75% Same-Property Revenue: 5.00% 5.50% Same-Property Expenses: 2.25% 2.75% Development Spending: $100 - $110 million Land and For-Sale Residential dispositions: $5 - $8 million Acquisitions: $115 - $185 million Dispositions: $150 - $375 million Corp G&A: $23 - $24 million 25 25

26 Company Highlights High Quality Multifamily Portfolio Geographically diversified in the Sunbelt Portfolio with an average age of 16.6 years Strong occupancy levels: 96%+ Solid multifamily fundamentals Favorable Long-Term Demographic Trends Echo-boom population p Job Growth Well-Laddered Debt Maturity Schedule Strong Liquidity Position Large Unencumbered Asset Pool Reduced Joint Venture Exposure Experienced Management Team 26

27 Non-GAAP Financial Measures Funds from Operations FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), means income (loss) before non-controlling interest (determined in accordance with GAAP), excluding gains (losses) from debt restructuring and sales of depreciated property, plus real estate depreciation and after adjustments for unconsolidated partnerships and joint ventures. FFO is presented to assist investors in analyzing the company s performance. The company believes that FFO is useful to investors because it provides an additional indicator of the company s financial and operating performance. This is because, by excluding the effect of real estate depreciation and gains (or losses) from sales of properties (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO can facilitate comparison of operating performance among equity REITs. FFO is a widely recognized measure in the company s industry. Property Net Operating Income - The company uses property NOI, including same store NOI, as an operating measure. NOI is defined as total property revenues, including unconsolidated partnerships and joint ventures, less total property p operating expenses (such items as repairs and maintenance, payroll, utilities, property p taxes, insurance and advertising). The company believes that in order to facilitate a clear understanding of its operating results, NOI should be examined in conjunction with (loss) income from continuing operations as presented in the company s consolidated financial statements. The company also believes that NOI is an important supplemental measure of operating performance for a REIT s operating real estate because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs and general and administrative expenses. This measure is particularly l useful, in the opinion i of the company, in evaluating the performance of geographic operations, same store groupings and individual properties. Additionally, the company believes that NOI is a widely accepted measure of comparative operating performance in the real estate investment community. The company believes that the line on its consolidated statements of income entitled "(loss) income from continuing operations" is the most directly comparable GAAP measure to NOI. In addition to company management evaluating the operating performance of its reportable segments based on NOI results, management uses NOI, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to key employees. 27

28 EPS and FFO Reconciliation 2012 Guidance Low High Diluted EPS $ 0.33 $ 0.47 Plus: Real estate depreciation and amortization $ 1.45 $ 1.45 Less: Gains on sale of operating properties (0.55) $ (0.65) Fully diluted FFO per share $ 1.23 $

29 Forward Looking Statements Estimates of future earnings are, by definition, and certain other statements in this presentation may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance, achievements or transactions to be materially different from the results, performance, achievements or transactions expressed or implied by the forward looking statements. Certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the company s actual results, performance, achievements or transactions to be materially different from the results, performance, achievements or transactions expressed orimpliedbytheforwardlookingstatementsinclude, among others, real estate conditions and markets; performance of affiliates or companies in which we have made investments; legislative or regulatory decisions; our ability to continue to maintain our status as a REIT for federal income tax purposes; p the effect of any rating agency action; the cost and availability of new debt financings; level and volatility of interest rates or capital market conditions; effect of any terrorist activity or other heightened geopolitical crisis; or other factors affecting the real estate industry generally. Except as otherwise required by the federal securities laws, the company assumes no responsibility to update the information ato inthis presentation. pese tato The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2011, as may be updated or supplemented in the Company s Form 10-Q filings, which discuss these and other factors that could adversely affect the company's results. 29

30 PPR Disclosure The modeling, calculations, forecasts, projections, evaluations, analyses, simulations, or other forward-looking information prepared by Property and Portfolio Research, Inc. (PPR) and presented herein (the PPR Materials ) are based on various assumptions concerning future events and circumstances, including Colonial Properties Trust s (CLP) internal estimates, all of which are uncertain and subject to change without notice. You should not rely upon the PPR Materials as predictions of future results or events because these statements are based on assumptions that may not come true and are speculative by their nature. There are important factors that could cause actual results of the Company and actual events to differ materially from those expressed or implied by the PPR Materials. CLP will have limited or no control over these factors and PPR will have no control over these factors. PPR assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to it by the Company, and PPR relied upon the assurance of the Company s management that they were not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. PPR also assumed that any internal estimates or projections provided by the Company were reasonably prepared by the Company on a basis reflecting the best currently available estimates and good faith judgment of the Company s management. PPR does not represent, warrant or guaranty the accuracy or completeness of the PPR Materials and shall not be held responsible for any errors in any PPR Materials. PPR has no obligation to update any of the PPR Materials included in this document, Any user of any such PPR Materials accepts them AS IS WITHOUT ANY WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT, TITLE AND FITNESS FOR ANY PARTICULAR PURPOSE. UNDER NO CIRCUMSTANCES SHALL PPR OR ANY OF ITS AFFILIATES, OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, BE LIABLE FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WHATSOEVER ARISING OUT OF THE PPR MATERIALS, EVEN IF PPR OR ANY OF ITS AFFILIATES HAS BEEN ADVISED AS TO THE POSSIBILITY OF SUCH DAMAGES. In addition, certain market and industry data used herein has been obtained from independent, third party publications and sources, including PPR. All such data speaks only as of the date referenced with respect to such data and may have changed since such date, which changes may be material. You should not construe any of the PPR Materials as investment, tax, accounting or legal advice. The PPR Materials do not purport to contain all the information that may be required to evaluate the business and prospects of CLP or any purchase or sale of CLP s securities. Any potential investor should conduct his, her or its own independent investigation and analysis of the merits and risks of an investment in CLP s securities. As with any financial investment, investing in the CLP security involves substantial risk. PPR does not warrant, assure, represent or guarantee any return on any investment in CLP. The user of any such PPR Materials accepts full responsibility for his, her or its own investment decisions and for the consequences of those decisions. PPR DOES NOT SPONSOR, ENDORSE, OFFER OR PROMOTE AN INVESTMENT IN THE CLP SECURITY, NOR DOES IT MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING THE ADVISABILITY OF SUCH AN INVESTMENT OR THE LEGALITY OF SUCH AN INVESTMENT UNDER APPLICABLE LAWS. 30