Equity Residential named 2015 Global Residential Sector Leader in Sustainability by the GRESB Focused Performance, Creating Value JUNE 2016 1 340 Fremont – San Francisco, CA Estimated completion in 2016 Investor Presentation June 2016 1
Americans Are Renting at Historic Levels June 24, 2015 June 23, 2015 December 9, 2015 More Americans Are Renting, Baby Boomers Will drive The Number Of Renters Is and Paying More, as Demand for Apartments, U.S. Exploding And It's Not Homeownership Falls Fed Study Shows Because Of Millennials By the Numbers Change in Number of U.S. households Since End Of 2020 ** Average Annual Change In Renter Households * (In Millions) (in thousands) – Owner Occupied – Renter Occupied 900 10 RECESSIONS 8 500 500 6 425 4 325 290 2 0 1960s 1970s 1980s 1990s 2000s 2010-14 -2 2005 2010 2015 2001 *Sources: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys. **Source: US Census Bureau Investor Presentation June 2016 2
Urban Living is on the Rise Reurbanization Driving Rental Demand In Major Metros April 21, 2015 January 27, 2016 Companies Trade Suburbs for City Life Real Estate Investors Ride the Locations deemed ‘walkable’ appreciate more Reurbanization Trend than those that are car-dependent By the Numbers Corporations Looking for Urban Convenience * U.S. Urban Population Continues to Expand ** (Before and After a Corporate Move) (Population in thousands) Before After Urban Rural 400 350 250 88 79 78 200 66 150 52 51 100 50 0 Walk Score Transit Score Bike Score 1950 1970 1990 2010 2030 2050 *Source: Study from Smart Growth America and Cushman & Wakefield **Source: United Nations Investor Presentation June 2016 3
EQR: Capitalizing on Industry Trends Founded by Sam Zell Management team with over 100 years of combined Proven Leader in operating experience Apartment Investing State-of-the-art operating platform Portfolio positioned to take advantage of reurbanization trend in high Attractive Portfolio in growth markets Excellent growth in asset value High Value Markets Compelling industry fundamentals support long-term growth Strong asset utilization and attractive cash flows Proven track record of opportunistic acquisitions, timely dispositions and Disciplined Capital focused development Allocation Strategy Consistent return to shareholders through regular quarterly dividends and capital appreciation Conservative balance sheet and superior liquidity through access to Balance Sheet multiple sources of financing Strength Strong credit ratings and debt metrics with little debt maturing in next two years WELL-POSITIONED TO CREATE LONG-TERM SHAREHOLDER VALUE Investor Presentation June 2016 Investor Presentation June 2016 4 4
Proven Strategy Constructing our Portfolio High costs of homeownership; » Barriers to new apartment supply in the form of land constraints and » government restrictions; Substantial job growth and household formations; and » Attractive lifestyle for residents to live, work and play » Managing our Portfolio Opportunistic acquisitions and divestitures » Timely development of new projects » Maintaining efficient operations State-of-the-art operating platform » SEEK TO ACQUIRE AND BUILD APARTMENT PROPERTIES THAT GIVE US THE HIGHEST RISK-ADJUSTED TOTAL RETURNS Investor Presentation June 2016 5
Attractive Industry Fundamentals More than 8.3 million new households will be formed from 2015-2019 More than 2.4 million expected to end up in institutional-grade rental apartments » 80 million Echo Boomers driving demand More than 4 million young adults turning 25 every year through the end of the decade » Forming households and creating demand – 60% to 70% propensity to rent » Job growth improving Unemployment rate of the college educated is 2.6% » Declining homeownership rate Homeownership not as economically or socially appealing ~ 8.3M 80M 2.6% New households will be Echo Boomers are Unemployment rate formed from 2015 – 2019 driving housing demand among college educated Investor Presentation June 2016 6
Lifestyle Choices Keeping People Renting Longer Average Marrying Age Male Female 29 28 27 26 25 24 23 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 ABOUT HALF THE U.S. ADULT POPULATION IS SINGLE AND MORE LIKELY TO BE RENTERS Source: Census, Rosen Consulting Investor Presentation June 2016 7
Declining Homeownership Translates Into More Renters Homeownership Rate % of households, 1% = 1.1 million households 70% 69.0% 69% 68% 67% 66% 65% 64.5% 63.5% 64% 64.2% 63.5% 63% 63.3% 62% 1981 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17E Sources: US Census Bureau, Moody’s Analytics & EQR Market Research Investor Presentation June 2016 8
Rental Households Yet to be Formed Young Adults Living at Home Historical Average = 12% Investor Presentation June 2016 9
Demand for Rental Apartments Continues to be Strong, Driven by The Millennial Generation (but Baby Boomers love urban living, too!) Births by Generation 4.5 4.0 3.5 Millions 3.0 2.5 2.0 1.5 1.0 Greatest Silent Boomers Gen X Millennnials Post Millennials Investor Presentation June 2016 10
EQR is Strategically Located In Markets With Attractive Housing Dynamics Median Income vs. Median Home Price $1030 $1,000 (in thousands) $900 $800 $700 $600 $483 $394 $423 $454 $500 $400 $400 $230 $300 $200 $100 $82 $92 $73 $68 $58 $66 $53 $0 San Francisco Los Angeles New York Boston Washington DC Seattle U.S. Average Price/Income 11.7x 8.4x 6.9x 5.9x 4.3x 5.5x 4.1x Median Income Median Home Price Source: Moody’s Analytics, Nielsen Rental Vacancy Rates 12% (in percent) 10% 8% 6% 4% 2% 0% U.S. Average Seattle Los Angeles San Francisco Washington DC Boston New York 2010 2015 Source: U.S. Census Data Investor Presentation June 2016 11
Percent of Renter Households with Incomes $100,000 or Higher in EQR Markets 40% 35% 30% 25% 20% 15% 10% 5% 0% U.S. Los Angeles Boston San Diego New York Seattle Orange County Washington, San Francisco- Silicon Valley D.C. Oakland Sources: Census, Rosen Consulting Group Investor Presentation June 2016 12
Percent of Renter Households with Incomes $150,000 or Higher in EQR Markets 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% U.S. Los Angeles San Diego Boston Seattle Orange County New York Washington, San Francisco- Silicon Valley D.C. Oakland Source: Census, Rosen Consulting Group Investor Presentation June 2016 13
Sources of Employment Growth in EQR Core Markets, 2016 – 2020 3.6% 2.1% 1.9% 4.3% Educational & Health Services 27.9% Prof & Business Services 4.6% Trade 7.7% Leisure & Hospitality Government Financial Activities Other Services 11.0% Construction Information Services 23.5% Transportation & Utilities 13.4% Source: BLS, Rosen Consulting Group Investor Presentation June 2016 14
Compelling Underlying Fundamentals Support Our Long-Term Growth Outlook EQR Core Markets Resident Profile: 20-34 year olds: Median age: Without children: 50+ year olds: 51% 34 78% 21% Average Monthly Rent Median Resident Incomes Median Single Family Homes Prices (in thousands) (in thousands) $2,376 $519 $100 $2,051 $69 $1,218 $53 $220 All U.S. Markets EQR Markets EQR Residents All U.S. Markets EQR Markets All U.S. Markets EQR Markets EQR Residents STRONG DEMOGRAPHICS FOR LONG-TERM INCOME GROWTH AND ASSET APPRECIATION Source: U.S. Census and Company Data Investor Presentation June 2016 15
Urban Real Estate Produces Better Long Term Values Housing Price Change 2010-2015 Urban Suburban Los Angeles 42.1% 33.9% Washington DC 23.8% 14.4% Boston 37.1% 20.5% San Francisco 65.3% 58.7% Seattle 36.9% 33.3% Source: Zillow – Zillow does not track New York data Investor Presentation June 2016 16
High-rise/Mid-rise Asset Valuation Growth Outpaces Garden Price per Unit: Garden Vs. High-rise/Mid-rise $300,000 CAGR: 7.5% $250,000 $200,000 $150,000 $100,000 CAGR: 4.4% $50,000 $0 2001 2003 2005 2007 2009 2011 2013 2015 Garden Mid/Highrise Source: Real Capital Analytics, Equity Residential Market Research as of Q1 2016 Investor Presentation June 2016 17
170 Amsterdam – New York, NY Expected to receive LEED Certification Investor Presentation June 2016 18
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