UDR (UDR) Q2 2025 Earnings Call July 31, 2025 12:00 PM ET Company ParticipantsTrent Trujillo - VP - IRThomas Toomey - Chairman & CEOMichael Lacy - SVP & COOJoseph Fisher - President & CIONick Joseph - Head - US Real Estate & Lodging Research TeamJamie Feldman - MD & Head - REIT ResearchSanket Agrawal - Senior Associate - REITs Equity ResearchJana Galan - DirectorRich Hightower - MD - U.S. REIT ResearchAdam Kramer - VP - Equity ResearchJohn Kim - MD - U.S. Real EstateJohn Pawlowski - Managing DirectorAlexand ...

Financial Data and Key Metrics Changes - UDR's second quarter FFOA per share was $0.64, exceeding the high end of previously provided guidance, reflecting a $0.03 or 5% sequential increase driven by higher same store NOI and lower expense growth [23][24] - The full year 2025 FFOA per share guidance range was raised to $2.49 to $2.55, with a midpoint of $2.52 representing a $0.02 per share improvement compared to prior guidance [24] Business Line Data and Key Metrics Changes - Second quarter same store revenue and NOI growth were 2.5% and 2.9% respectively, driven by a 2.8% blended lease rate growth, with renewal rate growth of 5% and new lease rate growth of 30 basis points [11][12] - Year over year same store expense growth was only 1.7%, significantly better than expectations, primarily due to favorable real estate taxes and insurance savings [13][16] Market Data and Key Metrics Changes - Coastal markets exceeded expectations with a second quarter weighted average occupancy of 97.2% and blended lease rate growth of 4% [17] - The West Coast demonstrated strong momentum with a second quarter weighted average occupancy of 96.9% and blended lease rate growth leading all regions at 4.2% [18] - Sunbelt markets lagged behind coastal markets, with a second quarter weighted average occupancy of 96.7% and slightly negative year-to-date same store revenue growth [20] Company Strategy and Development Direction - UDR's strategy focuses on enhancing customer experience, driving innovation, and deploying capital for earnings accretion, supported by a strong investment-grade balance sheet [6][7][9] - The company aims to leverage favorable supply and demand dynamics in the housing market to enhance growth prospects [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects for the apartment industry, citing favorable job and wage growth supporting strong demand for apartments [21] - The company noted that elevated homeownership costs and housing undersupply in the U.S. should bode well for occupancy and pricing going forward [21] Other Important Information - UDR was named a top workplace winner in the real estate industry for the second consecutive year, reflecting its strong corporate culture [8] - The company has a robust pipeline of current and future initiatives expected to drive attractive growth for many years [7] Q&A Session Summary Question: Can you elaborate on the blended lease assumption for the back half of the year? - Management indicated that the guidance raise was due to strong execution and that they expect renewal growth to be in the 4% to 4.5% range for the back half of the year, slightly lower than previous months [30][34] Question: Which market's expectations have changed the most? - The West Coast has performed better than expected, while the Sunbelt has not met initial expectations but is showing signs of improvement [39][40] Question: What opportunities are being seen on the external growth front? - The transaction market remains healthy, with a focus on joint venture acquisitions and selective recapitalizations, while the development side is slower due to high construction costs [46][50] Question: Can you provide insights on the Philadelphia property acquisition? - The acquisition of the Philadelphia property was initially a drag on guidance, but the developer's repayment of interest has offset some of that impact [57][59] Question: What are the trends in the D.C. market? - D.C. remains a strong market with a 4.9% revenue growth during the quarter, maintaining high occupancy and consistent blended lease rates [68][70]