UDR HITS FOR THE CYCLE: Company Achieves Rare Feat with $2 Billion Joint Venture
UDR's third-quarter earnings call has brought exciting news, as the company announced that its previously disclosed $2 billion joint venture with Apollo has finally closed. This strategic partnership is a rare feat, often referred to in baseball terms as 'hitting for the cycle.' In one transaction, UDR has successfully increased its access to equity capital, reduced leverage, improved the asset quality of its wholly owned portfolio, and driven earnings accretion.
This achievement was made possible by the dedication and hard work of many UDR associates. The company's Chairman, President, and CEO, Tom Toomey, expressed his sincere gratitude to these individuals for making this a reality. He also announced that Scott McCallum has joined the company as Chief Investment Officer, bringing with him significant investment experience and strategic insight.
In terms of operational results, UDR performed exceptionally well in the third quarter, achieving the high end of its guidance expectations and prompting an upward revision to its full-year same-store growth and FFOA per-share guidance. This is a notable improvement from recent years, as the apartment sector has traditionally followed a 'falling' leasing curve. However, this season's results show a distinct turnaround.
Mike Lacy, UDR's Chief Operating Officer, emphasized that the company's data-driven capabilities, continuous innovation, and disciplined execution have allowed it to capitalize on the current apartment operating landscape. He highlighted the company's strong performance in key areas such as same-store revenue growth (1.8%), blended lease rate growth (2%), other income growth (7%), occupancy rates (mid-96%), and delinquency rates (60 basis points), which are all down 50 basis points year-over-year.
Notably, resident retention reached an all-time third-quarter high of 52%, a significant improvement from the prior year period's rate. This is a testament to UDR's AI and data-enhanced approach to attracting and retaining creditworthy residents. The company's focus on operational excellence, data-driven capital allocation, and access to capital has led to its recognition as a top workplace winner in the real estate industry for the third consecutive year.
As UDR looks forward to the future, it is committed to maintaining this momentum, supported by a stronger balance sheet and team. With its eighth annual corporate responsibility report published recently, the company continues to demonstrate its dedication to social responsibility and sustainability.
