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Welcome

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

The Right Focus

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

2010 Guidance Update

3
Improving Spreads on New/Renewed Leases

4Q 2009 1Q 2010 2Q 2010 August 2010


Region New Renewal New Renewal New Renewal New Renewal

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%

Spread 7.6% 5.8% 2.5% 0.3%

Strong Capital Structure

Equity 53% Debt 47%


Common Stock (76%) Fixed (89%)
Operating Partnership Interests (24%) Floating (11%)

Fixed Rate Debt


Common Stock

Operating Partnership
Interests Floating Rate Debt

$4.9 BILLION TOTAL MARKET CAPITALIZATION

Balance sheet as of 6/30/2010 based on recent stock price of $52.79 on 9/3/2010

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Well-Managed Mortgage Debt Maturities
We’re Prepared
$

600 Total Debt Maturities


500
00

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

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Acquisition Strategy
Seizing Only the Right Opportunities

John S
Jo Smith
t
Senior Vice President
and Chief Investment Officer

We Buy Right

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5
Acquisition Strategy
Right Focus + Integrity = Proven Success

• High barrier-to-entry, high growth, close-in suburban markets of


major selected MSAs
• East
E tC Coastt ffocus: B
Boston
t tto Mid
Mid-Atlantic
Atl ti
• High average home prices
• Favorable supply/demand equation
• Positive demographic trends: immigrants, echo boomers, seniors
• UPREIT transactions
• Additional development potential
• Acquire
A i B-B and dCC-class
l properties
ti with
ith solid
lid construction,
t ti flfloor plans
l and
d
upgradeable to B+ and C+-class

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How We Buy Right


Measure Twice, Cut Once

• Acquisition team
– Combined experience of 180 years

• Thorough due diligence


– Comprehensive market studies
– Measure real estate tax reassessment risk
– Property Management input
– Environmental research
– Construction and cap ex projections

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6
Apartment Units Acquisition History
Discriminating Buyer, Only Buy the Best Fit

• 2000 through 2010 YTD


– Units submitted for review 1,543,272
– Units actually reviewed 866 153
866,153
– Offers issued 176,599 (20% of units reviewed)
– Units closed 24,780 (13% of offers issued)

• Closed 90 properties
– $2.3 billion
– Average price per unit $92,000

• Average annual acquisitions $230mm

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Home Properties is the Go-to Buyer


Partner of Choice

• Major East Coast buyer of older properties


• Largest OP Unit player in industry
• Build long-term relationships
• Home Properties name and reputation
• Employee-friendly approach

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Inventory in Target Markets
Tremendous Acquisition Growth Potential

Estimated Current HME


B/C-Class Market
Target Region Apartments* HME Owned Penetration

D.C. Metro 434,000 9,911 2.3%


Baltimore 166,000 8,582 5.2%
Philadelphia 267,000 5,603 2.1%
Northern New Jersey 229,000 3,578 1.6%
Long Island 435,000 3,390 0.8%
Boston 399,000 2,382 0.6%
Chicago 628,000 2,242 0.4%
Totals 3 044 000
3,044,000 35 688
35,688 1 2%
1.2%

* Source: Witten Advisors

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Recent Example: Westbrooke and Middlebrooke


Buy Right – Rehab – Enhance Value

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
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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

HME 330 0 330 4,709 7.01%

AIV 120 -250 -130 8,117 -1.60%


AVB 70 -190 -120 12,837 -0.93%
BRE 80 -120 -40 4,410 -0.91%
CPT 130 -100 30 6,100 0.49%
CLP 50 -10 40 3,354 1.19%
EQR 1,250 -850 400 23,222 1.72%
ESS 150 -30
30 120 5 365
5,365 2 24%
2.24%
MAA 250 -30 220 3,355 6.56%
PPS 0 0 0 2,376 0.00%
UDR 80 0 80 6,929 1.15%
Source:
(1) Green Street Advisors “Residential REITs August ‘10 Update” August 20, 2010 – net acquisitions 2010E
(2) Citigroup Global Markets “Weekly REIT and Lodging Strategy” August 20, 2010 – market cap

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2010E Net Acquisitions as % of Market Cap(1)


Among the Growth Leaders
% 7.0
7 6.6

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

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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

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Acquisitions Strategy
Seizing Only the Right Opportunities

• Excellent reputation for closing, which generates transaction network


• B/C-class acquisition and repositioning strategy generates positive results
• Acquisition engine roaring and driving NOI growth

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10
Property Management

Scott Doyle
Senior Vice President
Strategic Property Management

W ’ Raised
We’ve R i d th
the B
Bar

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Road to NOI Growth

Real
Estate

Marketing

Technology

Operations
NOI

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Property Repositioning

• Reposition strategy tailored to each community based on


– Current physical condition
– Submarket opportunities
– Future target demographic
– Maximization of return

• Target a minimum of 10% initial unlevered yield on revenue-enhancing


interior renovations

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24

Property Repositioning - Before

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Property Repositioning - Before

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Property Repositioning - Before

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13
Property Repositioning - Before

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Example of Property Repositioning

$
ent
Monthly Apartment Re

Apartment Quality

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14
Braddock Lee Apartments, Alexandria, VA

$ Renovated vs. Unrenovated Rent

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Future Potential from Unit Upgrades

Property Age # Units* % Not Upgraded


20+ years 35,290 42%
10-20 years 1,826 97%
<10 years 1,367 0%
Total 38,483 43%

* Includes 1,222 units scheduled to close by 9/30/2010


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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

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Road to NOI Growth

Real • Flexible approach allows us to


Estate
capitalize on each unique
Marketing repositioning opportunity
• Over 40% of current portfolio
available for interior upgrade

Technology

Operations
NOI

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Rosemarie Cook-Manley
Vice President
Marketing

Les Eisenberg
Vice President
Strategic Business Systems

Keith Knight
Vice President
Capital Improvements and
National Accounts

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Customer Lifecycle
Personalized Communication & Technology

Reach Acquisition Conversion Retention Loyalty

• Advertising
• Search
engines
• Social media
• Mobile

DRIVING NOI RESULTS

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17
Mobile
Available Whenever, Wherever

www.MtVernonSquareVA.com

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Advertising
Driving Down Costs

O
Over $750K S
Saved!
d!

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18
Customer Lifecycle
Personalized Communication & Technology

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact
• Search Center
engines • Web 2.0
• Social media • Prospect
• Mobile program

DRIVING NOI RESULTS

38

Web 2.0
Enhancing Interactive Communication

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Prospect Program
Making a Difficult Decision Easier

40

Customer Lifecycle
Personalized Communication & Technology

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact • Consultative


Center sales
• Search
engines • Web 2.0 • Online
• Prospect reservations
• Social media
program
• Mobile

DRIVING NOI RESULTS

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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

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact • Consultative • Customer


Center sales service
i
• Search
engines • Web 2.0 • Online • Social media
• Social media • Prospect reservations
• Customer
program Relationship
• Mobile
Management
• Resident
portals

DRIVING NOI RESULTS

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21
Customer Relationship Management
Welcome Home!

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Resident Portals
Building a Sense of Community

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Customer Lifecycle
Personalized Communication & Technology

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact • Consultative • Customer • Choice


C t
Center sales
l service
i
• Search • Our Pledge
engines • Web 2.0 • Online • Social media • Referrals
reservations
• Social media • Prospect • Customer
program Relationship
• Mobile
Management
• Resident
portals

DRIVING NOI RESULTS

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Customer Lifecycle
Personalized Communication & Technology

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact • Consultative • Customer • Choice


C t
Center sales
l service
i
• Search • Our Pledge
engines • Web 2.0 • Online • Social media • Referrals
reservations
• Social media • Prospect • Customer
• Mobile program Relationship
Management
• Resident
portals

Over 3x Lowest 27% of


16% Cost Personalized Reservations Turnover Leases from
Reduction Interaction vs. Peers in Sector Referrals

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23
Rosemarie Cook-Manley
Vice President
Marketing

Les Eisenberg
Vice President
Strategic Business Systems

Keith Knight
Vice President
Capital Improvements and
National Accounts

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Customer Lifecycle
Understanding the Pricing Puzzle

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact • Consultative • Customer


• Choice
Center sales service
i
• Search
• Our Pledge
engines • Web 2.0 • Online • Social media
reservations • Referrals
• Social media • Prospect • Customer
program Relationship
• Mobile
Management
• Resident
• LRO portals
• Analytics

FORWARD-LOOKING STRATEGY
Maximizing NOI

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Customer Lifecycle
Custom Alerts LRO

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Customer Lifecycle
Custom Pricing Snapshots

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25
Customer Lifecycle
Custom Upgrade Pricing Analysis
723 Saddle Brooke Apartments

2A11 256 Units


Rented Units

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 --- ---

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Customer Lifecycle
Understanding the Pricing Puzzle

Reach Acquisition Conversion Retention Loyalty

• Advertising • Contact • Consultative • Customer


• Choice
Center sales service
i
• Search
• Our Pledge
engines • Web 2.0 • Online • Social media
reservations • Referrals
• Social media • Prospect • Customer
program Relationship
• Mobile
Management
• Resident
• LRO • Lease terms portals
teg ated
• Integrated
• Analytics • Price
Pi
renewals
exceptions

FORWARD-LOOKING STRATEGY
Maximizing NOI

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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

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Rosemarie Cook-Manley
Vice President
Marketing

Les Eisenberg
Vice President
Strategic Business Systems

Keith Knight
Vice President
Capital Improvements and
National Accounts

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Property Repositioning
Execution

• Design team
– Exterior finishes
– Landscape design
– Interior Design/decorating
– “3D” color renderings
– Finish and design standards

• Regional construction teams


– Depth of understanding of property management
– Experience in new apartment construction and renovations
– Established pool of local trades

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Property Repositioning – Before


Curb Appeal

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Property Repositioning – After
Enhancing Curb Appeal Increases Traffic

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Property Repositioning – Before


Property Lost to Landscaping

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Property Repositioning – After
Curb Appeal & Reduced Maintenance

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Property Repositioning – Before


Asphalt Parking Jungle

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Property Repositioning – After
Reducing Hardscape

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Property Repositioning – Before


Existing Community Room

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Property Repositioning – After
Creating Competitive Advantage

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Property Repositioning – Before


Negative Impact of Neglected Amenities

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Property Repositioning – After
Enhancing Selling Features

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Property Repositioning – Before


Prohibitive Environment

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Property Repositioning – After
Enabling Ancillary Revenue

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Property Repositioning – Before


Lack of Visual Appeal

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Property Repositioning – After
Elegant Entrance Features

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Property Repositioning – Before


Common Area Hallway

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Property Repositioning – Design
Plan - Design - Execute

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Property Repositioning – After


Welcome Home!

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Property Repositioning – Before
Closed-in Kitchen

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Property Repositioning – After


10.4% ROI

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Property Repositioning
Night and Day

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Property Repositioning – Before


End of Life Cycle

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Property Repositioning – Before
End of Life Cycle

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Property Repositioning – After


12.2 % ROI

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Property Repositioning – Before
Outdated Kitchen

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Property Repositioning – After


11.5% ROI

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Traditional Upgrade

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Transitional I Upgrade

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Transitional II Upgrade

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Contemporary Upgrade

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Property Repositioning Execution

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Property Repositioning – C.A.D. / C.G.I.


Build It Right The First Time

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Financial Improvement Initiatives

Revenue Expense CapEx

•Revenue sharing •Supplies agreement • Supplies agreement


•Advertising fees •Utility conservation • Appliances
•Utility billing fee •Trash • Cabinets
•Renter’s insurance • Carpeting
•Automation

$1.6mm $1.1mm $1.9mm


NOI $2.7mm
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Development

Don Hague
Senior Vice President, Development

Development Strategy – It
It’ss Working

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Development Strategy
It’s Working

• Focus on Mid-Atlantic Region

• Low-risk approach with limited pre-construction investment


– Emphasis on transit-oriented developments close to shopping,
entertainment, education and work opportunities
– Density/adjacent opportunities on existing properties
– Acquisition of entitled land

• Target average unlevered stabilized yield of 7.00% and minimum


12 0% IRR
12.0%

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Track Record Since 2004

• Began ground-up development in 2004


• To date, 885 units delivered
• Current pipeline of 2,861 new units
• Potential to grow to 4,355 new units
• Assembled experienced go-to team with key capabilities
• Delivered first A-class units in 2010

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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

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1200 East West Highway

Location Silver Spring, MD


Region Washington, D.C.
Units 247
Retail square footage 8 900
8,900
Start date 2Q 2007
Initial occupancy 1Q 2010
Total cost $87mm
Cost per apartment $332K

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Ripley Street
Entitled Land

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Ripley Street
Entitled Land

Location Silver Spring, MD


Region Washington, D.C.
Units 368
Retail square footage 5,100
Possible start Summer 2011
Features - 800 feet to new Transit Center
- 3 blocks to pedestrian shopping mall,
Whole Foods, American Film Institute
- Tallest building in central business district

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Cobblestone
Entitled Land

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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

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Falkland North Update
Unlocking Land Value

Ripley

1200
East West

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Falkland North Update


Unlocking Land Value

Location Silver Spring, MD


Region Washington, D.C.
Units Up to 1,200 apartments, 65,000 square feet retail
Possible start 2 to 3 years

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Seminary Hill / Towers
Unlocking Land Value

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Our Strategy is Working

• Strong, experienced development team


• Leveraging expertise in Mid-Atlantic markets
• Low-risk development strategy
– Density/adjacent opportunities
– Entitled land
– Limited pre-construction capital commitment
• Proven successes
– Liberty Commons
– Trexler Park West
– 1200 East
E t West
W t Highway
Hi h
– The Courts at Huntington Station
• Strong pipeline potential of 4,355 new units

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Concluding Remarks

Ed Pettinella
President and
Chief Executive Officer

The Right Focus

102

The Right Focus


Higher Earnings Growth
2011 Projected
FFO Impact

• Refinancing
g opportunities
pp p
produce lower borrowing
g costs ……10 cents

• B/C-class acquisition deal flow is strong ………………….……. 5 cents

• Marketing, technology, property operations drive NOI growth


– Tailored approach
– Pricing optimization
– Ancillary revenue/cost reduction ………………….……….... 3 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.

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The Right Focus

• Strong capital structure – We’re prepared


• Seizing accretive acquisitions in prime apartment markets – We buy right
• Maximizing repositioning business model – We’ve raised the bar
– Tailored approach to resident communications & value enhancements
– Strategic use of technology
– Pricing power + insightful analytics = optimized revenue
– Increased ancillary revenue and reduced costs
• Development strategy – It’s working

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