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Realty Trust
The Wall Street Analyst Forum
September 10, 2001
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Realty Trust
Agenda
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. Overview of the Company
. Comparative Returns
. Our Business Plan
. Lasting Impressions
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Realty Trust
Overview
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. Middle Market Apartments
. Diversified Portfolio Across Growing Markets
. 3rd Largest Apartment REIT
Market Capitalization of $4.0 Billion
. 25 Consecutive Years of Dividend Increases
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Realty Trust
Historical Returns
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6 mos 1 yr 5 yrs
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UDR 19% 43% 42%
Apartments 13 18 62
Office 7 11 15
Retail 14 24 32
Hotels 3 18 (31)
S&P (11) (26) 29
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Realty Trust
Our Business Plan
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. Increased Operating Efficiency
. Continued Improvement in Asset Quality
. Portfolio Repositioning Strategy
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Realty Trust
The Result...
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. Increased Operating Efficiency
. Continued Improvement in Asset Quality
. Portfolio Repositioning Strategy
8-10% FFO Growth Plus 7-8% Dividend Yield
15-18% Total Return
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Realty Trust
Increased Operating Efficiency
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. Revenue Management
. Expense Reduction
. Bottom Line Orientation
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Realty Trust
Revenue Management
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02/01 08/01
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Lease Management 16% 7%
Month-to-Month Leases 15% 5%
60 Days Vacant 430 250
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Realty Trust
Expense Controls
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[PIE CHART]
Admin & Marketing 10%
Taxes 26%
Personnel 29%
Insurance 6%
Utilities 13%
Repairs & Maintenance 16%
Annual Cost Per Unit - $3,150
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Realty Trust
Bottom Line Orientation
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. Forced ranking of personnel based upon performance
. All incentive plans tied to cash flow improvement over prior years
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Realty Trust
Asset Quality ... Age and Rents
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[LINE CHART]
Average Rent
1995 - $500
1996 - $540
1997 - $563
1998 - $600
1999 - $631
2000 - $667
2001 - $690
Average Age
1995 - 18
1996 - 16.5
1997 - 14.5
1998 - 15
1999 - 13
2000 - 12
2001 - 12
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Realty Trust
Asset Quality ... New Development
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Average Return: 10.5%
[Bar Chart]
(In Millions)
1998 - $50
1999 - $57
2000 - $67
2001 - $70
2002 - $75
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Realty Trust
The Mandolin Apartments
Fort Worth, Texas
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[PICTURES APPEAR HERE]
306 units
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Realty Trust
The Meridian Apartments
Dallas, Texas
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[PICTURES APPEAR HERE]
250 units
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Realty Trust
Repositioning the Portfolio for the Future
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. Focus on Fewer Markets (20-30)
. Market Concentration
- Minimum of 1,500 - 2,000 units
- Maximum of 10,000 - 12,000 units
. Market Selection Criteria
- Size
- Rent and growth prospects
- Portfolio diversification
- Location of current holdings
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Realty Trust
Financial Projections
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FFO Earnings 2001 $ 1.48
2002 $ 1.65
FFO Growth 2001-02 11%
Dividends/Yield $1.08/7.7%
Net Asset Value $ 15.20
As of June 30, 2001
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Realty Trust
Internal Growth
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. 2001 Consensus $ 1.48
. 2002 Incremented Earnings
- One-Time Write-Off $ .07 - $ .07
- Same Store Sales Growth .03 - .05
- Capital Transactions .02 - .03
- 10% Work Force Reduction .03 - .04
- Insurance Change .01 - .02
- Refinancing .01 - .02
- Development Pipeline .01 - .01
- Uncertainty (.02) - (.02)
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. 2002 Earnings Range $ 1.64 - $1.70
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Realty Trust
Balance Sheet
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Actual Est.
6/30/01 12/31/01
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Fixed Charge Ratio 2.00 2.05
Debt/Market Cap 55% 53%
Unencumbered Assets $2.4 billion $2.2 billion
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Realty Trust
Lasting Impressions...
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. FFO growth of 8-10%
. Dividend yield of 7-8%
Total Return of 15-18%
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