Investor Presentation
July 2022
2
DISCLOSURES
This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of WashREIT, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of such securities under the securities law of any such jurisdiction. If WashREIT were to conduct an offering of securities in the future, it will be made under an effective registration statement filed with the Securities and Exchange Commission and only by means of a prospectus supplement and accompanying prospectus. In such an event, a copy of the prospectus and the applicable preliminary prospectus supplement and final prospectus supplement, as well as the final term sheet, if applicable, relating to such transaction will be able to be obtained from the Securities and Exchange Commission at www.sec.gov, from any underwriters in that offering, or by contacting WashREIT at 202-774-3200. Before you invest in any such offering, you should read the applicable prospectus supplement related to such offering, the accompanying prospectus and the information incorporated by reference therein and other documents WashREIT has then filed with the Securities and Exchange Commission for more complete information about WashREIT and any such offering.
Forward-Looking Statements
Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “assumed,” “pro forma,” “target,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of WashREIT to be materially different from future results, performance or achievements expressed or implied by such forward looking statements. Additional factors which may cause the actual results, performance, or achievements of WashREIT to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to the risks associated with the failure to enter into and/or complete contemplated acquisitions or dispositions within the price ranges anticipated and on the terms and timing anticipated, or at all; our ability to execute on our strategies, including new strategies with respect to our operations and our portfolio, including the acquisition of multifamily properties in the Southeastern markets, on terms anticipated, or at all, and to realize any anticipated benefits, including the performance of any acquired multifamily properties at the levels anticipated; our ability to achieve our anticipated NOI growth and to capture outsized market rent growth; whether our actual 2022 and 2023 NOI for Trove will be consistent with our expected NOI for Trove; the risks associated with the ownership of real estate in general and our real estate assets in particular; the economic health of the greater Washington, DC metro region and the larger Southeastern region; changes in the composition and geographic location of our portfolio; fluctuations in interest rates; reductions in or actual or threatened changes to the timing of federal government spending; the risks related to use of third-party providers; the economic health of our residents and tenants; the ultimate duration of the COVID-19 global pandemic, including any mutations thereof, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, the effectiveness and willingness of people to take COVID-19 vaccines, and the duration of associated immunity and efficacy of the vaccines against emerging variants of COVID-19; the availability and terms of financing and capital and the general volatility of securities markets; compliance with applicable laws, including those concerning the environment and access by persons with disabilities; the risks related to not having adequate insurance to cover potential losses; the risks related to our organizational structure and limitations of stock ownership; changes in the market value of securities; terrorist attacks or actions and/or cyber-attacks; failure to qualify and maintain our qualification as a REIT and the risks of changes in laws affecting REITs; and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2021 Form 10-K filed on February 18, 2022. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to update our forward-looking statements or risk factors to reflect new information, future events, or otherwise.
Use of Non-GAAP Financial Measures and other Definitions
This presentation contains certain non-GAAP financial measures and other terms that have particular definitions when used by us. The definitions and calculations of these non-GAAP financial measures and other terms may differ from those used by other REITs and, accordingly, may not be comparable. Please refer to the definitions and calculations of these terms and the reasons for their use, and reconciliations to the most directly comparable GAAP measures included later in this investor presentation.
Definitions and Reconciliation of Certain Forward-LookingNon-GAAP information
This presentation also includes certain forward-lookingnon-GAAP information. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these estimates, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable efforts.
Strategic Transactions
As discussed in greater detail under the “Forward-Looking Statements” above, there is no assurance that we will execute the transactions and strategies described in this presentation, including the redeployment of proceeds into additional multifamily assets, on the terms and timing anticipated, or at all.
Market Data
Market data and industry forecasts are used in this presentation, including data obtained from publicly available sources. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but the accuracy and completeness of the information is not assured. The Company has not independently verified any such information.
WASHREIT washreit.com
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WHY INVEST IN WASHREIT
WashREIT has a very strong growth outlook that will carry over through 2023, with double digit same-store multifamily NOI growth, on average, for the next five quarters, and even higher year-over-year NOI growth from our Atlanta communities
80% of our portfolio is in the Washington Metro, which offers employment stability during
downturns
We continue to transform our operating platform and scale our G&A expense base and
expect to deliver improved operating leverage as our portfolio grows
WashREIT offers a compelling value proposition with the opportunity to participate in value
creation as we earn a lower implied cap rate
WASHREIT washreit.com
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WHAT WE DO
WashREIT targets mid-market renters in Southeast markets that are positioned for long-term outperformance. With the strongest growth tailwinds in recent history, a scalable operating platform, and an investment-grade balance sheet, we expect to earn a lower implied cap rate as we grow and expand our geographic footprint
Research-led
Growing
Outperforming
Capital Allocation
Southeast Footprint
Washington Metro
Investment strategy targets deepest
Expanding into Southeast markets and
Same-store portfolio is positioned to
segments of demand curve in
generating double-digit NOI growth on new
deliver historically strong rental rate
outperforming markets
acquisitions with strong long-term
growth through 2023
demographic tailwinds
Retail
MD
Investment Grade
3k Unit
Scalable
Renovation Pipeline
Operating Platform
Balance Sheet
Opportunity to renovate and generate
Infrastructure transformation is
Full revolver capacity of $700 million
mid-teen cash on cash returns based
ongoing and will yield significant
and no scheduled maturities until
on rent gap between Class B units
operational benefits and efficiencies.
July 2023
and Class A in same submarket
Existing G&A expense base supports
a doubling of our unit count.
WASHREIT washreit.com
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APARTMENT PORTFOLIO
Focused on value-oriented apartment communities at mid-market price points that do not compete with new supply
~8,900
27
~3,000
>$725
Homes
Communities
Renovation Pipeline (units)
Average amount saved per month by living at a
WashREIT community instead of nearby Class A
2x
Capacity to double our unit count
without increasing G&A
DC
Southeast 10% MD
20%7%
Suburban
Urban
46%
54%
VA
63%
54%
46%
Garden
Mid-Rise /High-Rise
2022P Market Rent Growth YoY (%)
25
$440M invested since 2021 and future capital
20 Southeast Homeswill continue to be allocated to higher growth markets in
Southeast
15
Washington Metro Homes
+17% Market
Growth in 2022*
10
5
+11% Projected Market
Growth in 2022*
0
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
Avg Eff in-place rent ($)
WASHREIT washreit.com
* According to RealPage, reflects average effective year-over-year rent growth throughout 2022
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Washington Real Estate Investment Trust published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 20:58:06 UTC.
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