Citigroup Global Property CEO Conference March 2013
Company Overview Multifamily Portfolio 34,497 apartment homes 115 apartment communities 95.8% Occupancy Average age: 16.1 years Average revenue per unit: $951/month Portfolio Brands Colonial Grand Properties: 63 Units: 20,160 Avg Mo. Rev: $1,013 Colonial Village Properties: 41 Units: 11,928 Avg Mo. Rev: $877 Colonial Reserve Properties: 5 Units: 1,080 Avg Mo. Rev: $1,153 NOTE: Property statistics as of 12/31/12. In addition, 1,328 non-branded units are either wholly-owned or held in joint ventures 2
Geographic Diversity 87% of Multifamily 4Q 2012 NOI Generated from Top Quartile Sunbelt Markets Las Vegas Phoenix 4Q 2012 Multifamily NOI % Charlotte, NC 13.7% Raleigh-Durham, NC 10.2% Austin, TX 8.5% 85% Atlanta, GA 7.9% Dallas, TX 7.0% Orlando, FL 7.0% Richmond Charleston, SC 5.4% Norfolk Charlotte Fort Worth, TX 5.2% Nashville Raleigh-Durham Richmond, VA 5.0% Birmingham Dallas Atlanta Charleston Tampa-Sarasota, FL 4.4% Ft Worth Birmingham, AL 4.3% Austin Tampa - Sarasota Orlando Phoenix, AZ 3.3% Las Vegas, NV 1.9% Norfolk, VA 1.5% Nashville, TN 1.2% 3
Portfolio Statistics MULTIFAMILY SAME PROPERTY OPERATIONAL PERFORMANCE Financial i % of Avg. Revenue Change in Market Units Occupancy Actual NOI per Unit Revenue Y/Y Atlanta 2,598 96.2% 9.0% $ 997 4.7% Austin 2,679 95.5% 8.6% $ 996 5.8% Birminghami 1,608 94.7% 50%$ 5.0% 886 43% 4.3% Charleston 1,578 96.1% 5.4% $ 938 6.4% Charlotte 4,054 97.6% 14.4% $ 893 8.6% Dallas 1,676 95.2% 6.3% $ 972 9.3% Fort Worth 2,012 96.3% 5.2% $ 921 6.3% Ol Orlando 1,756 95.7% 74%$ 7.4% 1,123123 40% 4.0% Phoenix 952 95.0% 3.8% $ 994 3.6% Raleigh 2,078 96.0% 7.9% $ 957 6.5% Richmond 1,700 95.5% 5.8% $ 933 3.7% Savannah 1,437 97.6% 5.5% $ 981 2.5% Tampa/Sarasota 606 98.7% 44%$ 4.4% 1,155155 27% 2.7% Other 4,209 95.4% 11.3% $ 909 3.6% Total 28,943 96.0% 100.0% $ 951 5.3% Note: As of 4Q12 4
2012 Directives Grow the Company Achieve Investment Grade Rating Improve the Portfolio 5
Grow the Company Core NOI Same-property revenue 5.4% Same-property NOI 7.6% Development Placed 2 developments in service $79MM Investment ~ 7.75% yield 718 units Tampa and Orlando Continued development of 5 multifamily properties - $171MM (Austin, Charlotte, Orlando) Acquisitions Acquired 5 Class A multifamily properties - $180MM Raleigh, Dallas and Austin 1,554 units Avg. age of 6 years and avg. rent of $992 per unit 6
Completed Development Colonial Grand at Hampton Preserve Tampa, FL 486 units - $52.2 million Occupancy: 95.5% Stabilized 5 quarters ahead of plan Stabilized yield: 7.6% Revenue per Unit: $1,109/month Colonial Grand at Lake Mary I Orlando, FL 232 units - $26.7 million Occupancy: 94.0% Stabilized 8 months ahead of plan Stabilized yield: 8.0% Revenue per Unit: $1,285/month 7
Achieve Investment Grade Rating Received S&P (BBB-) and Moody s (Baa3) upgrade in 2012 Renegotiated and extended $500MM unsecured LOC Term: 4yrs + 1 yr extension Rate: 1 month LIBOR + 140 Bps Obtained 5-year $150MM unsecured term loan at 2.71% Key Balance Sheet Ratios Current (4Q 2012) Debt + Preferred / Total Assets 44.9% Debt / EBITDA 801 8.01x Fixed Charge Coverage 2.35x Secured Debt / Total Assets 17.3% 8
Improve the Portfolio Recycle Older Multifamily Assets Sold 4 multifamily properties - $96MM 1,380 units Avg. age of 31 years and avg. rent of $697 per unit Acquired 5 class A multifamily properties Sell Commercial Assets Exited DRA-CLP joint venture - $113MM Exited Bluerock office portfolio - $19MM Sold CP Alabaster - $37MM Sell Non-income Producing Assets Sold 8 condos and various outparcels - $11MM 9
2013 Directives Advance the Company Core NOI Growth Development Fortify the Balance Sheet Debt + Pref/GAV < 40% Debt/EBITDA ~ 7.0x Fixed Charge > 2.5x Enhance the Portfolio Increase average rental rates with new acquisitions iti and developments Reduce average age by recycling older multifamily assets Sell commercial assets Sell non-income producing assets 10
Advance the Company Core NOI CLP SS NOI % and Employment % 2000 to FY 2013E Same Store NOI % Employment Growth CLP Markets 10.0% 8.0% 7.3% 7.6% 4.0-6.0% 6.0% 4.0% 2.0% 4.4% 3.0% 3.4% 5.2% 5.0% 5.2% 2.7% 0.0% -2.0% -4.0% 40% -6.0% -8.0% -6.8% -3.9% -6.9% -3.5% FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12E FY13E NOTE: The 2013 employment growth estimate is an average based on data provided by Axiometrics (4Q12) and PPR (4Q12) 11
Advance the Company Development 5 multifamily yproperties p under construction with 6 multifamily sites on balance sheet Year 1 Yield: 7.0% - 7.5% [Year 1 Yield (new dollars): 9.0% - 10.0%] 1 commercial property phase under construction Anticipate $125 - $150 million of development spending in 2013 Active Developments Location Units/SF Compl. Date Total Cost MULTIFAMILY CG at Double Creek Austin, TX 296 1Q13 $31.7 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 (Phase II) Charlotte, NC 81 2Q13 $9.1 MM CG at Randal Lakes Orlando, FL 462 1Q14 $57.0 MM 1,300 $171.0 MM COMMERICAL Brookwood West Retail Birmingham, AL 3Q13 $8.3 MM 12
Advance the Company Potential Near Term Development Sites MULTIFAMILY Near Term Developments Location Units/SF Current Investment (1) CG at Bellevue (Phase II) Nashville, TN 220 $3.7 MM CG at Lake Mary (Phase III) Orlando, FL 132 $1.9MM CG at Randal Park Orlando, FL 314 $6.3 MM CG at Thunderbird Phoenix, AZ 244 $8.0 MM CG at Sweetwater Phoenix, AZ 195 $7.2 MM CG at Azure Las Vegas, NV 438 $10.6 MM COMMERICAL 1,543 $37.7 MM Colonial Promenade Huntsville (Phase II) Huntsville, AL TBD $5.2 MM Colonial Promenade Nor du Lac Covington, LA 236,000 $25.6 MM Randal Park Orlando, FL TBD $11.0 MM 236,000 $41.8 MM (1) Investment as of December 31, 2012 13
Fortify the Balance Sheet Long-Term Balance Sheet Targets Target Current (4Q 2012) Debt + Preferred / Total Assets < 40.0% 44.9% Debt / EBITDA <70x 7.0x 8.01x Fixed Charge Coverage > 2.5x 2.35x Secured Debt / Total Assets < 20.0% 17.3% NOTE: All values include pro-rata share of joint ventures 14
Fortify the Balance Sheet Manage Debt Maturity Schedule $600 $500 $400 $300 $200 $100 $- $189 $30 $521 $5 $39 $2 $14 $14 $250 $192 $185 $150 $100 $75 $73 $15 2013 2014 2015 2016 2017 2018 2019 2020 Thereaf ter Unsecured Consolidated Secured Unconsolidated Secured LOC (1) Debt maturities as of 12/31/12, (2) Unconsolidated debt represents Company s pro-rata share. (3) Values represented in millions. 15
Enhance the Portfolio Same Property Rental Rate % Change New Leases Renewals 4.0% 3.3% 7.0% 6.4% 6.3% 2.0% 0.0% (2.0%) 1.7% 2009 2010 2011 2012 6.0% 5.0% 4.0% 3.0% 2.9% (4.0%) (6.0%) (8.0%) (10.0%) (7.9%) (3.8%) 2.0% 10% 1.0% 0.0% (1.0%) (2.0%) 2009 2010 2011 2012 (1.0%) 16
Enhance the Portfolio Development Pipeline - $125-$150MM Spending in 2013 Recycle Older Multifamily Assets - $135-$160MM $ in 2013 Acquisitions of Newer Multifamily Assets - $150-$175MM in 2013 Sell Commercial Assets - $140 - $165MM in 2013 Sold 10% joint venture interest in CP Hoover in January 2013 for $0.5 million cash Sold Metropolitan Midtown in Charlotte in February 2013 - $94.4MM (7.25% cap rate) Sell Non-Income Producing Assets 17
2013 Guidance FFO per share: $1.34 - $1.40 Multifamily Same-Property NOI: 4.00% 6.00% Same-Property Revenue: 4.25% 5.25% Same-Property Expenses: 4.00% 5.00% Development Spending: $125 - $150 million Acquisitions: $150 - $175 million Dispositions: $275 - $325 million Corp G&A: $18 - $19 million 18
Company Highlights High Quality Multifamily Portfolio Geographically diversified in the Sunbelt Portfolio with an average age of 16.1 years Strong occupancy levels: 95%+ Solid multifamily fundamentals Favorable Long-Term Demographic Trends Echo-boom population Job Growth Simplified Business Structure Strong Liquidity Position Well-Laddered Debt Maturity Schedule Large Unencumbered Asset Pool Experienced Management Team 19
Strong Multifamily Fundamentals Multifamily Sunbelt fundamentals are attractive Job growth and household formation Echo-boomer population reaching prime renting age Declining homeownership Manageable new multifamily supply 20
Expected Employment Growth 8% Y/Y Employment Growth 6% 4% 2% 0% (2%) (4%) (6%) (8%) Mar-90 Mar-93 Mar-96 Mar-99 Mar-02 Mar-05 Mar-08 Mar-11 Mar-14 Mar-17 CLP Markets PPR54 Average Source: Moody's Economy.com, PPR As of: 4Q12 21
Job Growth by Metro 21% 19% Forecast Job Growth Weak Near Term, Strong Long Term Strong Near Term, Strong Long Term Austin 17% San Antonio Dallas - Fort Worth Houston 15% Raleigh Orlando Atlanta Phoenix Las Vegas 13% Charlotte Palm Beach County Portland Denver 11% Minneapolis Seattle San Francisco Inland Empire San Diego San Jose Miami Philadelphia Orange County Indianapolis 9% New York Los Angeles Washington DC Cincinnati Boston Cleveland 7% Chicago Long Island Detroit Weak Near Term, Strong Near Term, Weak Long Term Weak Long Term 5% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Lagging Year Job Growth Source: Property and Portfolio Research As of 4Q12 22
Echo Boomer Population Growth Echo Boomers are a key demand driver for apartment rentals National Population Aged 20-34 (in millions) 80.0 75.0 70.0 65.0 60.0 55.0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Source: Woods & Poole Economics 23
Employment Change by Age 3.0% Year-Over-Year Change in Employment Homeownership Rate 80% 2.0% 70% 60% 1.0% 50% 0.0% 40% (1.0%) 30% 20% (2.0%) 10% (3.0%) 0% 20 0-24 25 5-29 30 0-34 35 5-39 40 0-44 45 5-49 50 0-54 Source: BLS, US Census As of: 4Q12 Change in Employment Homeownership Rate 24
US Homeownership Rates The US homeownership rate peaked at 69.2% and is currently 65.4% Every 1% decline = 1.3 million new renters 70.0% 69.0% 68.0% 67.0% 66.0% 65.0% 64.0% 63.0% 1981 1986 1991 1996 2001 2006 2010 2011 62.0% 2012 4Q Source: US Census, UBS Research As of 4Q12 25
Rents as a % of Income vs. Rent Growth 30% Forecast Rent Growth 25% Phoenix 20% 15% 10% East Bay Honolulu Las Vegas Atlanta Denver San Jose Charlotte Oklahoma City Seattle Washington - NoVA - MD Dallas - Fort Worth Inland Empire Jacksonville Orlando San Diego Nashville Austin Orange County Palm Beach County Raleigh Houston Sacramento Tampa Richmond Stamford Chicago Baltimore Boston Memphis Detroit Cleveland Milwaukee Fort Lauderdale Norfolk New York Miami San Francisco Los Angeles 5% 12% 16% 20% 24% 28% 32% 36% 40% CurrentRent As a Percentof Income South East MidWest West Source: Property and Portfolio Research As of 4Q12 26
Supply & Demand in CLP Markets Demand & Supply (000s Units) 25,000 Vacancy 12% 20,000 10% 15,000 10,000 8% 5,000 6% 0 4% (5,000) (10,000) 2% (15,000) 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Quarterly Change in Demand Quarterly Change in Supply Vacancy Rate 0% Source: Property and Portfolio Research As of: 4Q12 27
EPS and FFO Reconciliation 2013 Guidance Low High Diluted Income per share $ 0.29 $ 0.45 Plus: Real estate depreciation and amortization $ 1.35 $ 1.35 Less: Gains on sale of operating properties (0.30) $ (0.40) Fully diluted FFO per share $ 1.34 $ 1.40 28
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. 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. 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. 31