Académique Documents
Professionnel Documents
Culture Documents
Charis Warshof
Vice President, Investor Relations
Disclosure Statement
This presentation was created as of the specific date indicated and reflects
management views as of that date. Such information may include certain
forward-looking statements that are subject to risks and uncertainties that may
cause results to differ materially
y and are described in our filings
g with the
Securities and Exchange Commission. The presentation may include statements
that may not be accurate after the date indicated. The Company disclaims any
duty to update such information.
Any reference to guidance relates to guidance previously provided publicly
by the Company, which it typically updates on a quarterly basis. Nothing in this
presentation should be construed as confirmation of any guidance previously
given. Any third party information and/or analyst estimates are provided for
informational purposes only
only. By policy
policy, Home Properties does not endorse
analysts' projections. Non-GAAP financial measures in this presentation are
reconciled to the most directly comparable financial measures calculated in
accordance with GAAP in the Company’s public filings, news releases and
supplemental information for the specific fiscal period, all of which are available
on the Home Properties website at homeproperties.com.
1
Introduction
Ed Pettinella
President and
Chief Executive Officer
Presentation Agenda
• Introduction Ed Pettinella
• Financial commentary David Gardner
• Acquisitions John Smith
• Property management and operations Scott Doyle
Rosemarie Cook-Manley
Les Eisenberg
Keith Knight
• Development Don Hague
• Summary Ed Pettinella
• Q&A
• Property tour at 10:30 AM
2
Financial Commentary
David Gardner
Executive Vice President
and Chief Financial Officer
We’re Prepared
Future Guidance
3
Improving Spreads on New/Renewed Leases
Washington, D
Washington D.C.
C (6 0%)
(6.0%) 2 0%
2.0% (4 1%)
(4.1%) 1 9%
1.9% (0.7%)
(0 7%) 2 3%
2.3% 3 2%
3.2% 3 5%
3.5%
Baltimore (6.0%) 1.8% (3.4%) 2.2% 0.8% 3.4% 3.4% 4.3%
New Jersey,
Long Island (5.0%) 1.8% (4.1%) 1.6% (0.1%) 2.6% 4.6% 3.4%
Philadelphia (9.0%) 1.0% (5.0%) 0.6% 0.8% 1.5% 4.6% 3.1%
Boston (7.4%) 0.7% (5.4%) 1.2% (1.4%) 1.5% 3.4% 2.6%
Chicago (8.0%) 0.2% (4.7%) 0.8% (2.7%) 1.1% (0.9%) 2.5%
Florida (5.4%) 0.7% (4.6%) 0.5% (0.7%) 0.5% 2.0% 2.4%
Maine (7.4%) 1.5% (0.7%) 1.0% 1.3% 1.1% 6.3% 2.0%
Total Core (6 0%)
(6.0%) 1 6%
1.6% (4 2%)
(4.2%) 1 6%
1.6% (0 2%)
(0.2%) 2 3%
2.3% 3.2% 3.5%
Operating Partnership
Interests Floating Rate Debt
4
Well-Managed Mortgage Debt Maturities
We’re Prepared
$
400
353
299
300 271
205 190 202
200 233 184
153
126
94
100
60
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Thereafter
As of 6/30/2010
10
Acquisition Strategy
Seizing Only the Right Opportunities
John S
Jo Smith
t
Senior Vice President
and Chief Investment Officer
We Buy Right
11
5
Acquisition Strategy
Right Focus + Integrity = Proven Success
12
• Acquisition team
– Combined experience of 180 years
13
6
Apartment Units Acquisition History
Discriminating Buyer, Only Buy the Best Fit
• Closed 90 properties
– $2.3 billion
– Average price per unit $92,000
14
15
7
Inventory in Target Markets
Tremendous Acquisition Growth Potential
16
Acquired 4/1/2010
Occupancy at acquisition 88.0%
p
Occupancy y 9/1/2010 94.0%
Westbrooke Apartments
Westminster MD
Westminster,
110 Units
Middlebrooke Apartments
Westminster, MD
208 Units
17
8
2010E Net Acquisitions as % of Market Cap
Among the Growth Leaders
Market Cap2
10E Acq1 10E Disp1 Net Acq/Disp 6/30/2010 Net Acq/Disp as
($ mil) ($ mil) ($ mil) ($ mil) % Market Cap
18
6
5
4
3
2.2
2 1.7
1.2 1.2 (2)
0.9
1 0.5
0.0
0
-11
-0.9 -0.9
-2 -1.6
HME MAA ESS EQR CLP UDR Average CPT PPS BRE AVB AIV
(1)
Apartment REITs with market cap >$1B
(2)
Average excluding HME
Source: Green Street Advisors “Residential REITs August ‘10 Update” August 20, 2010 – net acquisitions 2010E;
Citigroup Global Markets “Weekly REIT and Lodging Strategy” August 20, 2010 – market cap
19
9
Street Level Observation
The Right Focus on B/C-Class Opportunities
• Cap rates
– Dropping recently, but steady now
– Very property and submarket specific
– General differential of 25-75 bps between A- and B/C-class
– Cap rate range in our markets of 5.75% up to 6.5%
• Portfolio average of approximately 6%
• Deal flow
– Strong B/C-class opportunities
– Still plenty of capital chasing deals
• A-class: 30 to 40 bidders
• B/C-class: fewer bidders
20
Acquisitions Strategy
Seizing Only the Right Opportunities
21
10
Property Management
Scott Doyle
Senior Vice President
Strategic Property Management
W ’ Raised
We’ve R i d th
the B
Bar
22
Real
Estate
Marketing
Technology
Operations
NOI
23
11
Property Repositioning
24
24
25
12
Property Repositioning - Before
26
27
13
Property Repositioning - Before
28
$
ent
Monthly Apartment Re
Apartment Quality
29
14
Braddock Lee Apartments, Alexandria, VA
30
15
Varying Demographics
Virginia Village
• Primarily 30s & 40s Alexandria, VA submarket
• Families with children
• g school education
High
• English is 2nd language
• Blue collar workers
• Pay rent with money order
• Renter by necessity; can’t
afford a house
Braddock Lee
• Wide variety of ages
• Very few children
• Highly educated
• Professional jobs
• Pay rent online and with
checks
• Renter by choice; highly
mobile due to career
32
Technology
Operations
NOI
33
16
Rosemarie Cook-Manley
Vice President
Marketing
Les Eisenberg
Vice President
Strategic Business Systems
Keith Knight
Vice President
Capital Improvements and
National Accounts
34
Customer Lifecycle
Personalized Communication & Technology
• Advertising
• Search
engines
• Social media
• Mobile
35
17
Mobile
Available Whenever, Wherever
www.MtVernonSquareVA.com
36
Advertising
Driving Down Costs
O
Over $750K S
Saved!
d!
37
18
Customer Lifecycle
Personalized Communication & Technology
• Advertising • Contact
• Search Center
engines • Web 2.0
• Social media • Prospect
• Mobile program
38
Web 2.0
Enhancing Interactive Communication
39
19
Prospect Program
Making a Difficult Decision Easier
40
Customer Lifecycle
Personalized Communication & Technology
41
20
Online Reservations
Streamlining the Process for the Prospect
VaultWare Reservations per Property
35
30
25
20
15
10
Sep‐09 Oct‐09 Nov‐09 Dec‐09 Jan‐10 Feb‐10 Mar‐10 Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10
Home Properties Major ILS Aggregate
Market Index Public REIT Index
42
Customer Lifecycle
Personalized Communication & Technology
43
21
Customer Relationship Management
Welcome Home!
44
Resident Portals
Building a Sense of Community
45
22
Customer Lifecycle
Personalized Communication & Technology
46
Customer Lifecycle
Personalized Communication & Technology
47
23
Rosemarie Cook-Manley
Vice President
Marketing
Les Eisenberg
Vice President
Strategic Business Systems
Keith Knight
Vice President
Capital Improvements and
National Accounts
48
Customer Lifecycle
Understanding the Pricing Puzzle
FORWARD-LOOKING STRATEGY
Maximizing NOI
49
24
Customer Lifecycle
Custom Alerts LRO
50
Customer Lifecycle
Custom Pricing Snapshots
51
25
Customer Lifecycle
Custom Upgrade Pricing Analysis
723 Saddle Brooke Apartments
H/(L)
# Avg. Base
Rented Days Units in Avg. Rental $ H/(L) Rent Target
Amenity Code Units Avail Days Rate Units Premium
BASE UNIT 53 45 --- $918 --- $0
BATH 2 37 -8 $952 $34 $30
NUPK 16 48 3 $1,003 $85 $80
PREM 7 30 -15 $1,068 $150 $136
Total Upgraded Units 25 42 -3 $1,017 $99 ---
Total All Units 78 44 --- $950 --- ---
52
Customer Lifecycle
Understanding the Pricing Puzzle
FORWARD-LOOKING STRATEGY
Maximizing NOI
53
26
Customer Lifecycle
2010 Price Improvements
%
3.5
4 3.1
2.6
3 2.3
2.0
1.6 1.5 1.6 3.2
2
1 1.7
1.3
0
-1 -0.3
-2
-3 -1.9
-2.7
-44
-5
-5.0 -4.8
-6
Jan Feb Mar Apr May Jun Jul Aug
2010 Renewal Increases 2010 New Lease vs. Old Lease
54
Rosemarie Cook-Manley
Vice President
Marketing
Les Eisenberg
Vice President
Strategic Business Systems
Keith Knight
Vice President
Capital Improvements and
National Accounts
55
27
Property Repositioning
Execution
• Design team
– Exterior finishes
– Landscape design
– Interior Design/decorating
– “3D” color renderings
– Finish and design standards
56
57
28
Property Repositioning – After
Enhancing Curb Appeal Increases Traffic
58
59
29
Property Repositioning – After
Curb Appeal & Reduced Maintenance
60
61
30
Property Repositioning – After
Reducing Hardscape
62
63
31
Property Repositioning – After
Creating Competitive Advantage
64
65
32
Property Repositioning – After
Enhancing Selling Features
66
67
33
Property Repositioning – After
Enabling Ancillary Revenue
68
69
34
Property Repositioning – After
Elegant Entrance Features
70
71
35
Property Repositioning – Design
Plan - Design - Execute
72
73
36
Property Repositioning – Before
Closed-in Kitchen
74
75
37
Property Repositioning
Night and Day
76
77
38
Property Repositioning – Before
End of Life Cycle
78
79
39
Property Repositioning – Before
Outdated Kitchen
80
81
40
Traditional Upgrade
82
Transitional I Upgrade
83
41
Transitional II Upgrade
84
Contemporary Upgrade
85
42
Property Repositioning Execution
86
87
43
Financial Improvement Initiatives
Development
Don Hague
Senior Vice President, Development
Development Strategy – It
It’ss Working
89
44
Development Strategy
It’s Working
90
91
45
The Courts at Huntington Station
Location Alexandria, VA
Region Washington, D.C.
Units 421
Start date 1Q 2008
Initial occupancy 2Q 2010
Completion 2Q 2011
Total cost $127mm
Cost per unit $302K
92
93
46
Ripley Street
Entitled Land
94
Ripley Street
Entitled Land
95
47
Cobblestone
Entitled Land
96
Cobblestone
Entitled Land
Location Fredericksburg, VA
Region Washington, D.C.
Units 312
Possible start 1Q 2011
Features - 3 blocks to Virginia Railway Express/
Amtrak Station
- 5 blocks to historic Main Street/Old Town
- Only true A-class in market at only slightly
higher price point than existing apartments
97
48
Falkland North Update
Unlocking Land Value
Ripley
1200
East West
98
99
49
Seminary Hill / Towers
Unlocking Land Value
100
101
50
Concluding Remarks
Ed Pettinella
President and
Chief Executive Officer
102
• Refinancing
g opportunities
pp p
produce lower borrowing
g costs ……10 cents
The amounts above represent the 2011 impact the Company expects solely from these three specific items. This information is not intended to
be construed as guidance for 2011, which may include offsetting factors that may affect 2011 earnings results. The Company expects to
provide 2011 guidance in its earnings release for the fourth quarter and full year 2010.
103
51
The Right Focus
104
52