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1Villa Granada | Santa Clara, CaliforniaVilla Granada | Santa Clara, California
2012
May 15, 2012
Investo42nd Annual Meeting of ShareholdersThe City Club San Francisco
BRE Properties, Inc.2
BRE Properties, Inc.
Annual Meeting Agenda
10:00 a.m. Welcome and Call to Order
1. Review Agenda Irving F. “Bud” Lyons III
2. Chairman’s Comments Irving F. “Bud” Lyons III
3. Official Business Irving F. “Bud” Lyons III
– Review of Proxy Items No. 1, No. 2, & No.3
– Voting and Report: Inspector of Elections
4. Adjournment of Formal Meeting
10:30 a.m. CEO’s Report Constance B. Moore
11:00 a.m. Q&A Constance B. Moore
11:30 a.m. Annual Meeting Concludes
BRE Properties, Inc.3
Board of Directors
* Denotes Independent Director
Irving F. “Bud” Lyons III* (Chairman)Lead Independent Director, ProLogisDirector, EquinixFormer Vice Chairman & CIO, ProLogis
Paula F. Downey*President & CEOAAA Northern California, Nevada andUtah Insurance Exchange
Christopher J. McGurk*Chairman & CEOCinedigm Digital CinemaFormer Vice Chairman & COO, MGM
Matthew T. Medeiros*President & CEOSonicWALL, Inc.
Constance B. MoorePresident & CEOBRE Properties, Inc.
Jeanne R. Myerson*President & CEOThe Swig Company
Jeffrey T. Pero*Director, Redwood TrustRetired Partner, Latham & Watkins
Thomas E. Robinson*Director, Tanger Factory Outlet CentersSenior Advisor, Stifel Nicolaus WeiselFormer President and CFO, Storage USA
Dennis E. Singleton*Chairperson, Digital Realty Trust, Inc.Founding partner and former CFO, CIO and Director, Spieker Properties
Thomas P. Sullivan*Co-founder & former Managing PartnerWilson Meany Sullivan
BRE Properties, Inc.4
Management Team
Constance B. Moore PresidentChief Executive Officer
Stephen C. DominiakExecutive Vice PresidentChief Investment Officer
Kerry FanwickExecutive Vice PresidentGeneral Counsel & Secretary
Deborah J. JonesExecutive Vice PresidentAssociate Relations & Development
Scott A. ReinertExecutive Vice PresidentOperations
John A. SchisselExecutive Vice PresidentChief Financial Officer
BRE Properties, Inc.5
Shareholder Proposals
1. Election of Directors
2. Ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for the year ending December 31, 2012
3. Advisory vote on executive compensation
BRE Properties, Inc.6
CEO Report
Villa Granada | Santa Clara, CaliforniaVilla Granada | Santa Clara, California
BRE Properties, Inc.7
Points of Emphasis
• Strength of market fundamentals in California
• Quality of the development pipeline
• Portfolio operating excellence
• Capital allocation
• Balance sheet strength
BRE Properties, Inc.8
BRE Properties
• Publicly traded REIT (NYSE:BRE)
• Multifamily focus; founded 1970
• 76 wholly-owned communities; 21,336 homes(1)
• 10 development sites(2); 3,146 homes
• $5.6 billion total market cap
• Uninterrupted dividends since inception
Data as of May 2012.(1) Excludes 11 JV communities (3,592 homes) representing 1.0% of NOI.(2) Includes 3 land parcels under option contract which will support the future development of 872 homes.
BRE Properties, Inc.9
2011 Total Return
19.8%
14.0%
8.7% 8.4%
2.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
BRE ApartmentPeers*
MorganStanley
REIT Index(RMS)
DJIA S&P 500
*Peer average comprises the 11 largest market caps in the sector, excluding BRE. DJIA is price-only return.
BRE Properties, Inc.10
Demographics
• 20 to 34-year-old cohort expected to grow 2.5x faster in CA vs. the rest of the nation over the next 10 years
Propensity to Rent
• CA’s homeownership rate is ~17% below national rate
• 74% of CA’s population under age 35 rents
Limited Supply
• New supply in BRE markets estimated to average only 0.8% of existing stock over next 5 years
• Geographic & political barriers deter new supply in coastal CA
Jobs
• Every 4-5 new jobs creates demand for 1 apartment
• CA leads the nation in personal income growth
“Big Four” Drivers of Apartment Fundamentals:
California Style
Sources: US Census Bureau, REIS, Moody’s economy.com, and Bureau of Economic Analysis.
BRE Properties, Inc.11
31%
41%36%
25%
45%
34%
40%
55%
0%
10%
20%
30%
40%
50%
60%
BRE Properties, Inc.12
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
CLP PPS CPT HME MAA AVB UDR EQR AIV ESS BRE
Current Supply Future Supply
Source: Morgan Stanley research, April 2, 2012.
REIT Exposure to Future Supply
Forecasted Starts as a % of Total Stock2012-2015
(market-weighted by % NOI)
Limited Supply
BRE Properties, Inc.13
Source: Bureau of Labor Statistics, March 2012.
YoY % Change in Jobs – March 2012
Jobs
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Denotes BRE Core Market
BRE Properties, Inc.14
Active Early Cycle InvestorAcquisition Cap Rates in BRE California Core Markets
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
7.00%
7.50%
8.00%
Allure at Scripps Ranch194 homes, $46.2MM
Museum Park117 homes, $29.6MM
Aqua Marina del Rey500 homes, $166.0MM
Vistas of West Hills220 homes, $56.5MM
Lafayette Highlands150 homes, $48.8MM
Notes: Cap rates equal to 1st year NOI/Purchase price + 1.5% transaction costs.(1) Calculated as a percent of the company’s enterprise value as of December 31, 2009.
The Landing at Jack London Square282 homes, $64.9MM
Fountains at River Oaks226 homes, $50.3MM
Since January 2010, BRE has invested $462.3 million in seven urban in-fill assets, representing an 11.8% increase in the company’s asset base (1)
Mar
ket C
ap R
ate
Acquisition cap rates in BRE core
CA markets for A&B assets
BRE Properties, Inc.15
Focused Investment in Northern CA
Construction in Progress
Land Under Development
Land Under Contract
Development pipeline delivery schedule subject to change.
Project /Location Homes
Est. Costs
Balanceto Fund
Current Status
Nor
ther
nC
alifo
rnia
& S
eattl
e
Lawrence StationSunnyvale, CA 336 $110.0 $34.9 CIP
AviaraSeattle, WA 166 44.5 28.0 CIP
SolsticeSunnyvale, CA 280 121.9 74.4 CIP
Mission BaySan Francisco, CA 360 TBR TBR LUD
Pleasanton IPleasanton, CA 254 TBR TBR LUD
Redwood CityRedwood City, CA 263 TBR TBR
Option Contract
Pleasanton IIPleasanton, CA 251 TBR TBR
Option Contract
Walnut Creek BARTWalnut Creek, CA 358 TBR TBR
Option Contract
Northern CA Total 2,268 $276.4 $137.3
Sout
hern
Cal
iforn
ia
Wilshire La BreaLos Angeles, CA 478 $277.3 $137.1 CIP
Park Viridian IIAnaheim, CA 400 TBR TBR LUD
Southern CA Total 878 $277.3 $137.1
Total Development Pipeline 3,146 $553.7 $274.4
Significant development presence in
Northern California positions BRE to
capitalize on region’s strong
growth prospects
BRE Properties, Inc.16
Lawrence StationAn Update
Location: Sunnyvale, CA
Homes: 336
Land Purchase: October 2009
Project Start: October 2010
1st Deliveries: July 2012
BRE Properties, Inc.17
Lawrence StationConstruction in Progress
BRE Properties, Inc.18
\Lawrence StationConstruction in Progress
BRE Properties, Inc.19
Lawrence StationConstruction in Progress
BRE Properties, Inc.20
$2,022
$1,578 $1,573 $1,439
$1,320 $1,302 $1,250 $1,207
$1,038 $1,025
$780 $767
$0
$500
$1,000
$1,500
$2,000
$2,500
AVB EQR BRE ESS PPS UDR AIV HME CPT AEC MAA CLP
High Quality PortfolioAverage Revenue Per Same Store Home
Source: Company supplementals as of March 31, 2012.
BRE Properties, Inc.21
Redevelopment Strategy
Capital Allocation
Portfolio Refinement• Redevelop select assets to enhance value, extend useful life,
and improve growth characteristics
Redevelopment decisions driven by:
• Asset submarket location, positioning and opportunity
• Return on investment
Redevelopment Value Creation • Higher rents + higher growth rate + lower operating expenses
Target redevelopment returns of 7% – 10%
BRE Properties, Inc.22
Fountains at River Oaks, San Jose, CA
Redevelopment Case Study
226-home community originally built in 1990
Purchased by BRE in August 2010 for $50.3 million
Centrally located in-fill property in established neighborhood: • ½ mile from Cisco’s headquarters (17,000 employees)
Renovation scope – full interior & exterior renovation • Kitchens & baths (62% completed) • New business center and fitness center • Full exterior paint• Leasing office and signage improvements
Renovation rent premium: $150 to $175 per home
Acquisition cost + Renovation cost = $248,000/home• Recent sales comps in the neighborhood = $340,000/home
BRE Properties, Inc.23
Fountains at River Oaks, San Jose, CA
Pre-renovation
BRE Properties, Inc.24
Fountains at River Oaks, San Jose, CA
Post-renovation
BRE Properties, Inc.25
Fountains at River Oaks, San Jose, CA
Pre-renovation
BRE Properties, Inc.26
Fountains at River Oaks, San Jose, CA
Post-renovation
BRE Properties, Inc.27
Fountains at River Oaks, San Jose, CA
Pre-renovation
BRE Properties, Inc.28
Fountains at River Oaks, San Jose, CA
Post-renovation
BRE Properties, Inc.29
Fountains at River Oaks, San Jose, CA
Pre-renovation
BRE Properties, Inc.30
Fountains at River Oaks, San Jose, CA
Post-renovation
BRE Properties, Inc.31
Fountains at River Oaks, San Jose, CA
Post-renovation
BRE Properties, Inc.32
6.0x
6.5x
7.0x
7.5x
8.0x
8.5x
9.0x
9.5x
10.0x
Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
Net
Deb
t + P
refe
rred
/ EB
ITD
A
(Debt + Preferred) / EBITDA
Capital Activity
April 2010: Raised $275MM common equity at $34.25/share
Sept. 2010: Issued $300MM unsecured notes & tendered $321MM convertible notes
Q3 2011 – Q1 2012: Issued $76.4 million common equity via ATM
August 2011: Repurchased $20.4MM Series D Preferred Stock
June 2011: Redeemed $100MM Series C Preferred Stock
Q4 2010 – Q1 2011: Issued $50 million common equity via ATM
May 2011: Raised $441MM common equity at $48.00/share
Source: Company data.
BRE Properties, Inc.33
0.0% 0.5% 0.6%
19.6% 21.0%
4.3%3.3%
0.5%
18.7%18.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Secured Debt Maturity Unsecured debt maturity
% Total Debt Maturing Each Year
Well-Staggered Debt Maturities
Initial maturity of $750MM unsecured line of credit
($222 million outstanding as of Q1 2012)
Source: Company supplemental, as of March 31, 2012.
BRE Properties, Inc.34
Balance Sheet Flexibility & Strength
Note: Data as of December 31, 2011.(1) Represents diluted per share amounts.
Debt / EBITDA 6.7x
(Debt + Pfd) / EBITDA 6.9x
Debt / Gross Assets 40.7%
(Debt + Pfd) / Gross Assets 42.1%
Interest Coverage 2.8x
Fixed Charge Coverage 2.6x
FFO per Share (1) $2.14
AFFO Payout Ratio 83%
BRE Properties, Inc.35
BRE: Never a Better Time
• Strong multifamily fundamentals drive post-recession growth
• California’s market dynamics favor multifamily
• Leading West Coast multifamily operator with best-in-class EBITDA margins
• Well-capitalized balance sheet with significant flexibility and liquidity
• Strong dividend coverage with uninterrupted dividends since inception in 1970
BRE Properties, Inc.36
Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform
Act of 1995: Except for the historical information contained herein, this
presentation contains forward-looking statements regarding Company
and property performance and financial and economic trends, and is
based on the Company’s current expectations and judgment. Actual
results could vary materially depending on risks and uncertainties
inherent to general and local real estate conditions, competitive factors
specific to markets in which BRE operates, legislative or other regulatory
decisions, future interest rate levels or capital markets conditions. The
Company assumes no responsibility to update this information. For more
details, please refer to the Company’s SEC filings, including its most
recent Annual Report on Form 10-K and quarterly reports on Form 10-Q.