Investor Presentation
May 2024
Trove, Arlington, VA
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This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of Elme Communities, 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 Elme Communities 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 Elme Communities 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 Elme Communities has then filed with the Securities and Exchange Commission for more complete information about Elme Communities and any such offering.
Forward-Looking Statements
Certain statements in this investor 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," "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 Elme Communities 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 Elme Communities 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 ownership of real estate in general and our real estate assets in particular; our current positioning leading into our busiest leasing months; our ability to work through elevated eviction backlogs; whether bad debt trends in Atlanta will improve; whether demand for value-oriented apartments in the Washington Metro region and improving bad debt trends will drive higher NOI growth; the ability of the price points within our portfolio to insulate our portfolio from the effects of new supply; the impact of renovation-led value creation and increased profitability created by our operational initiatives on our NOI this year; the economic health of the areas in which our properties are located, particularly with respect to the greater Washington, DC metro and Sunbelt regions; risks associated with our ability to execute on our strategies, including new strategies with respect to our operations and our portfolio, including the acquisition of apartment homes in the Sunbelt markets and our ability to realize any anticipated operational benefits from our internalization of community management functions; the risk of failure to enter into and/or complete acquisitions and dispositions; changes in the composition of our portfolio; reductions in or actual or threatened changes to the timing of federal government spending; the economic health of our residents; the impact from macroeconomic factors (including inflation, increases in interest rates, potential economic slowdowns or recessions and geopolitical conflicts); risks related to our ability to control our expenses if revenues decrease; compliance with applicable laws and corporate social responsibility goals, including those concerning the environment and access by persons with disabilities; risks related to not having adequate insurance to cover potential losses; changes in the market value of securities; terrorist attacks or actions and/or cyber- attacks; whether we will succeed in the day-to-day property management and leasing activities that we have previously outsourced; the availability and terms of financing and capital and the general volatility of securities markets; the risks related to our organizational structure and limitations of share ownership; 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 2023 Form 10-K filed on February 16, 2024. 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-GAAPFinancial 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 included later in this investor presentation.
Definitions and Reconciliation of Certain Forward-Looking Non-GAAPinformation 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
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unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable efforts. |
Table of Contents
About Us | 04 |
Q1 2024 Update | 08 |
Portfolio Overview | 17 |
Current Market Dynamics | 24 |
Research-Led Capital Allocation | 27 |
Multifamily Strategies and Target Market | 34 |
Environmental, Social, Governance | 38 |
Appendix | 45 |
Elme Communities | 3 |
About Us
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We are a research-led,value-oriented,
multifamily owner and operator.
Elme Communities "elevating home"
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Value Creation Strategy
Affordable Rents | Operational Upside |
Value-oriented price points provide | Infrastructure transformation |
insulation from new supply and | yielding significant operational |
favorable long-term demand outlook | benefits and efficiencies |
Investment Grade | ~3.3k Home |
Balance Sheet | Renovation Pipeline |
Strong liquidity, a fully | Opportunity to renovate and generate |
unencumbered balance sheet, and | solid cash on cash returns |
no scheduled maturities until 2025 |
Washington Metro Stability
Allocation to Washington Metro should provide stability across business cycles
Research-led
Capital Allocation
Investment strategy targets deepest segments of demand curve in outperforming markets
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Apartment Portfolio Overview
Value-oriented apartment communities with strong long-term growth prospects
89% of our homes are affordable to households
earning the Area Median Income (AMI)
~9,400
Homes
~3,300
Renovation Pipeline (homes)
~$3.6M
Anticipated Operational
Upside
(2024-2025)
Atlanta
Metro
Washington
Metro
Washington Metro drives over 80% of our multifamily NOI, providing a solid foundation of employment stability
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Elme Marietta, Atlanta, GA
Q1 2024 Update
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Market Performance Highlights
Washington Metro
•
•
•
•
•
Washington Metro portfolio positioned well
Stable Class B performance as anticipated with mid-market strategy Spring leasing season seeing increase in traffic
Market rents continue to trend favorably compared to broader US Significant Northern Virginia exposure enhances outlook
Atlanta Metro
•
•
•
•
Absorption is improving
Lease rates improved in April compared to the first quarter but continue to reflect impact of elevated supply
Bad debt is improving on a month-to-month basis Tools in place to drive demand and improve profitability
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Operational Updates
Blended Effective | 2.3% | 1%-2% |
Lease Rate Growth | Q1 2024 | FY 2024 |
Average Assumption
Q1 Average | 95.8% | 94.4% |
Occupancy | WSH Metro | Same-Store |
Strategic Initiative | ~$4.25M - $4.75M | in 2023 |
FFO Upside | 20% captured | |
2023-2025 Assumption | ||
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Disclaimer
Elme Communities published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 10:43:07 UTC.