UDR(UDR) - 2025 Q1 - Quarterly Results

Financial Highlights Q1 2025 Financial Highlights This section provides a comprehensive overview of UDR's Q1 2025 financial and operating performance, including key GAAP and per-share metrics, same-store results, and full-year guidance Q1 2025 Key Metrics and FY 2025 Guidance | Category | Metric | 1Q 2025 Actual ($M) | 2Q 2025 Guidance ($M) | Full-Year 2025 Guidance ($M) | | :--- | :--- | :--- | :--- | :--- | | GAAP Metrics | Net income attributable to common stockholders | $75.5 | -- | -- | | | Income per diluted share | $0.23 | $0.11 to $0.13 | $0.56 to $0.66 | | Per Share Metrics | FFO per share, diluted | $0.58 | $0.61 to $0.63 | $2.45 to $2.55 | | | FFO as Adjusted per share, diluted | $0.61 | $0.61 to $0.63 | $2.45 to $2.55 | | | Dividend declared per share | $0.43 | $0.43 | $1.72 (annualized) | | Same-Store Metrics | Revenue growth (Straight-line) | 2.6% | -- | 1.25% to 3.25% | | | Expense growth | 2.3% | -- | 2.75% to 4.25% | | | NOI growth (Straight-line) | 2.8% | -- | 0.50% to 3.00% | | | Physical Occupancy | 97.2% | -- | -- | | Balance Sheet | Consolidated Net Debt-to-EBITDAre | 5.7x | -- | -- | - The total portfolio consists of 60,047 homes across 186 communities at the end of Q1 2025, with same-store properties representing 92.1% of total Net Operating Income (NOI)[2] Attachment 1: Consolidated Statements of Operations Consolidated Statements of Operations This section details the company's revenues, operating expenses, and net income for the three months ended March 31, 2025, compared to the same period in 2024, showing a significant increase in net income driven by higher rental income and a substantial gain on real estate sales Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $421,948 | $413,634 | | Total operating expenses | $347,692 | $350,742 | | Gain on sale of real estate owned | $47,939 | $16,867 | | Operating income | $122,195 | $79,759 | | Net income attributable to common stockholders | $75,514 | $41,918 | | Income per weighted average common share - diluted | $0.23 | $0.13 | - Net income attributable to common stockholders increased by 80.1% year-over-year, from $41.9 million in Q1 2024 to $75.5 million in Q1 2025[9] Attachment 2: Funds From Operations FFO and AFFO Reconciliation This section reconciles Net Income to key non-GAAP performance metrics: Funds from Operations (FFO), FFO as Adjusted, and Adjusted Funds from Operations (AFFO), with FFO as Adjusted per diluted share remaining flat year-over-year at $0.61 for Q1 2025 Q1 2025 vs Q1 2024 FFO Reconciliation (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income attributable to common stockholders | $75,514 | $41,918 | | FFO attributable to common stockholders, diluted | $208,292 | $213,455 | | FFO per common share and unit, diluted | $0.58 | $0.60 | | FFO as Adjusted attributable to common stockholders, diluted | $219,071 | $217,696 | | FFO as Adjusted per common share and unit, diluted | $0.61 | $0.61 | | AFFO attributable to common stockholders, diluted | $200,666 | $200,388 | | AFFO per common share and unit, diluted | $0.56 | $0.56 | - Adjustments to FFO in Q1 2025 totaled $10.8 million, primarily driven by legal costs ($3.8M), casualty-related charges ($3.3M), and software transition costs ($3.0M)[12] Attachment 3: Consolidated Balance Sheets Consolidated Balance Sheets This section presents the company's financial position as of March 31, 2025, compared to December 31, 2024, detailing total assets of $10.75 billion and total liabilities of $6.36 billion Balance Sheet Summary (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate owned, net | $9,058,928 | $9,312,337 | | Total assets | $10,745,412 | $10,897,586 | | Total debt (Secured + Unsecured) | $5,811,209 | $5,826,965 | | Total liabilities | $6,356,559 | $6,436,691 | | Total equity | $3,331,379 | $3,443,540 | Attachment 4: Selected Financial Information 4(A) Common Stock and Equivalents This section details the components of common stock and equivalents, and the weighted average number of shares outstanding used for earnings per share calculations, with total diluted weighted average shares and units outstanding at 357.4 million as of Q1 2025 Common Stock and Equivalents (as of period end) | Share Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Common shares | 331,174,564 | 330,858,719 | | Operating and DownREIT Partnership units | 22,918,707 | 22,689,109 | | Total common shares, OP/DownREIT units, and common stock equivalents | 357,726,753 | 357,407,004 | 4(B) Debt Structure and Maturities This section outlines the company's debt structure, predominantly fixed-rate at 91.6%, and provides a detailed schedule of debt maturities, with total debt at $5.83 billion, a weighted average interest rate of 3.31%, and an average maturity of 4.9 years - As of March 31, 2025, UDR's total debt was $5.83 billion, with 91.6% being fixed-rate debt at a weighted average interest rate of 3.17%[23] - The company has a well-laddered debt maturity profile, with the largest single-year maturity being $830.6 million in 2030, and no borrowings outstanding on the $1.3 billion line of credit[24][27] 4(C) Coverage Ratios and Covenants This section presents key credit metrics, demonstrating a healthy financial position, with the Consolidated Net Debt-to-EBITDAre ratio at 5.7x and the company in compliance with all unsecured line of credit and senior unsecured note covenants Key Credit Metrics (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Consolidated Interest Coverage Ratio | 5.1x | | Consolidated Fixed Charge Coverage Ratio | 5.0x | | Consolidated Net Debt-to-EBITDAre | 5.7x | - UDR is in compliance with all debt covenants, with significant headroom, for example, the Maximum Leverage Ratio was 31.3% against a requirement of ≤60.0%, and the Minimum Fixed Charge Coverage Ratio was 4.8x against a requirement of ≥1.5x[30] - The company holds a 'Baa1' (Stable) rating from Moody's and 'BBB+' (Stable) from S&P Global Ratings[30] Attachment 5: Operating Information Operating Information by Community Type This section breaks down key operating metrics such as revenues, expenses, Net Operating Income (NOI), and occupancy across different portfolio segments for the last five quarters, with Same-Store communities continuing to be the primary driver of performance, achieving a 68.3% operating margin and 97.2% occupancy in Q1 2025 Q1 2025 Operating Metrics by Community Type | Community Type | Homes | Revenues ($000s) | Expenses ($000s) | NOI ($000s) | Occupancy | | :--- | :--- | :--- | :--- | :--- | :--- | | Same-Store | 54,435 | $405,007 | $128,559 | $276,448 | 97.2% | | Stabilized, Non-Mature | 558 | $4,345 | $1,770 | $2,575 | 96.3% | | Development | 330 | $2,383 | $1,140 | $1,243 | 82.8% | | Total | 55,323 | $419,394 | $134,541 | $284,853 | 97.2% | - Total Net Operating Income (NOI) for Q1 2025 was $285.1 million, a slight decrease from $291.0 million in Q4 2024 but an increase from $279.4 million in Q1 2024[33] Attachment 6: Same-Store Operating Expense Information Same-Store Operating Expense Analysis This section provides a detailed breakdown of same-store operating expenses, comparing Q1 2025 to both Q1 2024 (YoY) and Q4 2024 (QoQ), showing total same-store expenses grew 2.3% YoY, driven by controllable expenses, while insurance costs saw a significant 12.4% decrease Same-Store Operating Expense Growth (Q1 2025 vs. Q1 2024) | Expense Category | 1Q 2025 ($000s) | 1Q 2024 ($000s) | % Change | | :--- | :--- | :--- | :--- | | Controllable expenses | $72,421 | $69,571 | 4.1% | | Real estate taxes | $50,796 | $50,007 | 1.6% | | Insurance | $5,342 | $6,095 | -12.4% | | Total Same-Store operating expenses | $128,559 | $125,673 | 2.3% | - Sequentially, same-store operating expenses increased by 3.5% from Q4 2024, primarily due to seasonal increases in personnel (8.9%) and utilities (10.0%)[36] Attachment 7: Portfolio and Market Breakout 7(A) Portfolio Overview This section presents a detailed overview of the apartment portfolio as of March 31, 2025, broken down by region and major market, comprising 59,747 completed homes, with the West and Mid-Atlantic regions being the largest Portfolio Breakdown by Region (Total Homes incl. JV) | Region | Total Homes (incl. JV) | Revenue Per Occupied Home | | :--- | :--- | :--- | | West Region | 15,036 | $3,129 - $3,558 | | Mid-Atlantic Region | 13,057 | $1,919 - $2,452 | | Northeast Region | 8,195 | $3,257 - $5,113 | | Southeast Region | 9,961 | $1,747 - $2,195 | | Southwest Region | 9,329 | $1,789 - $1,807 | | Total | 59,747 | $2,597 | 7(B) Non-Mature Properties and NOI by Market This part details the non-mature properties, totaling 888 homes, scheduled to enter the same-store pool between Q2 2025 and Q3 2026, and shows the West Region contributes the most to total NOI at 31.7%, followed by the Mid-Atlantic at 19.7% - There are 888 homes in the non-mature portfolio, including a 330-home development in Tampa, FL, which are expected to be added to the same-store pool between Q2 2025 and Q3 2026[45] NOI Contribution by Region (% of Total NOI) | Region | % of Same-Store NOI | % of Total NOI | | :--- | :--- | :--- | | West Region | 31.3% | 31.7% | | Mid-Atlantic Region | 20.7% | 19.7% | | Northeast Region | 16.9% | 17.8% | | Southeast Region | 13.5% | 12.9% | | Southwest Region | 10.8% | 10.8% | | Other Markets | 6.8% | 7.1% | Attachment 8: Same-Store Operating Information By Major Market 8(A) & 8(B) Same-Store Year-over-Year Comparison This section compares same-store operating performance for Q1 2025 against Q1 2024 by major market, showing overall same-store NOI grew 2.8% YoY, driven by a 2.6% increase in revenues, with the Mid-Atlantic and Northeast regions exhibiting the strongest NOI growth at 5.0% and 4.9% respectively Same-Store Year-over-Year NOI Growth by Region (Q1 2025 vs Q1 2024) | Region | Revenue Change | Expense Change | NOI Change | | :--- | :--- | :--- | :--- | | West Region | 2.8% | 3.9% | 2.4% | | Mid-Atlantic Region | 4.9% | 4.6% | 5.0% | | Northeast Region | 4.1% | 2.7% | 4.9% | | Southeast Region | 0.5% | -0.1% | 0.7% | | Southwest Region | -0.2% | -1.1% | 0.4% | | Total | 2.6% | 2.3% | 2.8% | - On a market level, Seattle, WA showed strong NOI growth of 6.9% YoY, while Austin, TX experienced a decline of -5.8% YoY[53] 8(C) & 8(D) Same-Store Sequential Comparison This section compares same-store operating performance for Q1 2025 against Q4 2024, revealing an overall same-store NOI decline of 0.9% sequentially, as a modest 0.5% revenue increase was offset by a 3.5% rise in operating expenses, typical for the first quarter Same-Store Sequential NOI Growth by Region (Q1 2025 vs Q4 2024) | Region | Revenue Change | Expense Change | NOI Change | | :--- | :--- | :--- | :--- | | West Region | 0.6% | 1.4% | 0.3% | | Mid-Atlantic Region | 1.0% | 6.1% | -1.2% | | Northeast Region | 0.8% | 6.8% | -2.4% | | Southeast Region | 0.1% | 1.2% | -0.4% | | Southwest Region | -0.3% | 0.3% | -0.7% | | Total | 0.5% | 3.5% | -0.9% | - Physical occupancy increased sequentially by 40 basis points to 97.2%, while total revenue per occupied home was flat[56] 8(E) Same-Store Leasing and Turnover This section provides key same-store leasing metrics for Q1 2025, highlighting a challenging new lease environment with effective new lease rates declining 2.9%, offset by a 4.5% increase in renewal rates, resulting in a blended rate growth of 0.9% Q1 2025 Effective Lease Rate Growth by Region | Region | Blended Lease Rate Growth | New Lease Rate Growth | Renewal Lease Rate Growth | | :--- | :--- | :--- | :--- | | West Region | 2.9% | 1.5% | 4.2% | | Mid-Atlantic Region | 2.9% | -1.2% | 6.4% | | Northeast Region | 1.8% | -2.4% | 5.2% | | Southeast Region | -0.7% | -4.6% | 2.8% | | Southwest Region | -4.1% | -10.1% | 3.1% | | Total/Weighted Avg. | 0.9% | -2.9% | 4.5% | - Annualized turnover for Q1 2025 was 31.7%, a decrease from 34.8% in Q1 2024, indicating higher resident retention[61] Attachment 9: Development and Land Summary Development Pipeline and Land Holdings This section details the company's wholly-owned development pipeline and land holdings, noting that as of Q1 2025, UDR has one 300-home project under construction in Riverside, CA, and one 330-home non-stabilized project in Tampa, FL, along with land parcels with a cost basis of $228.3 million for future development Wholly-Owned Development Projects | Project | Location | Homes | Status | Budgeted Cost ($000s) | | :--- | :--- | :--- | :--- | :--- | | 3099 Iowa | Riverside, CA | 300 | Under Construction | $133,600 | | 101 N. Meridian | Tampa, FL | 330 | Completed, Non-Stabilized | $134,000 | - The completed, non-stabilized project in Tampa generated $1.24 million in NOI during Q1 2025[63] Attachment 10: Unconsolidated and Debt and Preferred Equity Program Summary Joint Venture and Investment Program Summary This section summarizes UDR's unconsolidated joint ventures (JVs) and its Debt and Preferred Equity Program, noting that the two main JVs with MetLife and LaSalle comprise 4,424 homes and generated $15.4 million in NOI for UDR's share in Q1 2025, while the Debt and Preferred Equity Program has a balance of $702.5 million with a weighted average contractual return of 11.0% - UDR's share of NOI from its unconsolidated joint ventures was $15.4 million in Q1 2025[66] Debt and Preferred Equity Program Summary | Investment Classifications | of Commitments | Investment Balance | Contractual Return Rate | | :--- | :--- | :--- | :--- | | Non-Stabilized Communities - Preferred Equity | 4 | $113,554 | 10.1% | | Non-Stabilized Communities - Loans | 3 | $286,384 | 13.2% | | Stabilized Communities - Preferred Equity | 7 | $302,560 | 9.2% | | Total | 14 | $702,498 | 11.0% | - UDR also has investments in eight real estate and climate technology funds with a total commitment of $111 million[67] Attachment 11: Transaction Summary Q1 2025 Dispositions This section summarizes the company's property disposition activity during the first quarter of 2025, detailing the sale of two wholly-owned communities, One William and Leonard Pointe, for a total price of $211.5 million Q1 2025 Wholly-Owned Dispositions | Date | Community | Location | Homes | Price ($000s) | | :--- | :--- | :--- | :--- | :--- | | Jan-25 | One William | Englewood, NJ | 185 | $84,000 | | Jan-25 | Leonard Pointe | Brooklyn, NY | 188 | $127,500 | | Total | | | 373 | $211,500 | - The company recorded a combined gain on sale of approximately $47.9 million from these two dispositions during Q1 2025[75] Attachment 12: Capital Expenditure and Repair & Maintenance Summary Capital and Maintenance Spending This section details capital expenditures (CapEx) and repair & maintenance expenses for the first quarter of 2025, showing the company spent a total of $570 per home on recurring and NOI-enhancing CapEx, and an additional $455 per home on expensed repairs and maintenance Q1 2025 Spending per Home | Category | Total ($000s) | Cost per Home | | :--- | :--- | :--- | | Total Recurring Cap Ex | $17,283 | $314 | | NOI Enhancing Cap Ex | $14,055 | $256 | | Total Cap Ex | $31,338 | $570 | | Total Repair and Maintenance (Expensed) | $25,004 | $455 | Attachment 13: 2Q 2025 and Full-Year 2025 Guidance Financial and Operating Guidance This section outlines the company's financial and operational guidance for Q2 and full-year 2025, reaffirming its full-year guidance with FFO as Adjusted per share expected between $2.45 and $2.55, and same-store NOI growth projected at 0.50% to 3.00% - Full-year 2025 guidance for key metrics, including FFO per share, same-store growth, and investment activity, remains unchanged from prior guidance[81] Full-Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | FFO as Adjusted per share, diluted | $2.45 to $2.55 | | Same-Store Revenue growth | 1.25% to 3.25% | | Same-Store Expense growth | 2.75% to 4.25% | | Same-Store NOI growth | 0.50% to 3.00% | | Dispositions ($ in millions) | $215 to $415 | | Acquisitions ($ in millions) | $0 to $200 | Attachment 14: Definitions and Reconciliations Key Definitions and Guidance Reconciliation This section provides definitions for key non-GAAP financial measures and other terms used throughout the report, such as FFO, NOI, and Same-Store Communities, and includes a reconciliation of forecasted GAAP net income per share to forecasted FFO and FFO as Adjusted per share for the 2025 guidance - Funds from Operations (FFO): Defined per Nareit standards as net income excluding gains/losses from property sales and real estate depreciation[103][104] - Net Operating Income (NOI): Defined as rental income less direct property rental expenses (real estate taxes, insurance, personnel, utilities, R&M, admin & marketing), excluding property management expenses[106][107] - QTD Same-Store Communities: Defined as communities stabilized for five full consecutive quarters, not undergoing substantial redevelopment, and not held for disposition[112] Full-Year 2025 Guidance Reconciliation (per share) | Metric | Low | High | | :--- | :--- | :--- | | Forecasted net income per diluted share | $0.56 | $0.66 | | Depreciation & other adjustments | $1.89 | $1.89 | | Forecasted FFO per diluted share and unit | $2.45 | $2.55 | | Adjustments for FFO as Adjusted | - | - | | Forecasted FFO as Adjusted per diluted share and unit | $2.45 | $2.55 | Forward Looking Statements Forward Looking Statements This section contains the standard legal disclaimer regarding forward-looking statements, cautioning that projections and estimates are subject to risks and uncertainties, such as market conditions, inflation, interest rates, and competition, which could cause actual results to differ materially - The report contains forward-looking statements subject to various risks and uncertainties, including economic conditions, apartment market changes, inflation, interest rates, and competition, and the company disclaims any obligation to update these statements[123]