UDR(US:UDR)2021-10-28 00:14Financial Data and Key Metrics Changes - The third quarter FFOA per share was $0.51, achieving the high end of the previously provided guidance range, with full year FFOA guidance raised to $2 to $2.02, reflecting a 1% increase from prior guidance [30][32] - Same-store revenue growth for the full year 2021 is now forecasted at 1.0% to 1.5%, with concessions on a cash basis, and negative 1.0% to negative 0.5% with concessions on a straight-line basis [33] - The company anticipates a sequential FFOA per share increase of 4% for the fourth quarter, driven by continued positive same-store NOI growth [31] Business Line Data and Key Metrics Changes - Same-store revenue and NOI growth for the third quarter were 5.3% and 6.3% year-over-year, respectively, with occupancy at 97.5%, up 200 basis points from a year ago [14][16] - Effective blended lease rate growth was 8.2%, accelerating by 730 basis points compared to the second quarter [14] - Other income grew by 5.1% year-over-year, with traffic averaging 35% above pre-COVID levels [15] Market Data and Key Metrics Changes - Approximately 15% of NOI comes from markets with regulatory restrictions on renewal rate increases, but the company is leveraging other income initiatives to drive revenue growth [19] - The Sunbelt markets, which comprise about 25% of NOI, are generating over 20% year-over-year market rent growth, while urban centers are recovering more slowly [21] - The company reported that 20 of its 21 markets now have rents above pre-COVID levels [21] Company Strategy and Development Direction - The company is focused on its NextGen operating platform to enhance operational advantages and broaden acquisition opportunities [7][8] - The company has successfully reduced on-site staff by approximately 40% since 2018, positioning itself well against inflationary pressures [8] - Future initiatives are expected to drive additional revenue growth and margin expansion, relying on advanced data analytics [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing additional embedded rent growth throughout the fourth quarter and into 2022, despite regulatory restrictions [19] - The company noted that the current demand environment is strong, with expectations for continued rent growth and occupancy stability [52] - Management highlighted the unique pricing opportunity in the current market, allowing for higher rents without significantly sacrificing occupancy [48] Other Important Information - The company was recognized as the number one ESG performer in the 2021 GRESB survey among publicly listed residential companies worldwide [10] - The company has sourced over $19 million in rental assistance for residents in need, with nearly $10 million coming in the third quarter [22] Q&A Session Summary Question: Can you walk through some of the building blocks for 2022 in terms of capturing the current loss? - Management indicated that occupancy is expected to remain around 97% and that they are confident in rent growth continuing into the end of the year [41][42] Question: How are you seeing demand and seasonality expectations? - Management noted that while seasonality is starting to play a role, they expect to maintain occupancy and continue optimizing rents [44] Question: Can you help us understand the magnitude of trade-offs between revenue strategy and occupancy? - Management acknowledged that while occupancy may decrease slightly, they are able to push rents higher due to lower turnover rates [46][48] Question: What is the outlook for demand in 2022? - Management expressed optimism about demand, citing strong wage growth and improved balance sheets for renters, which supports continued rent growth [52][54] Question: Can you provide more details on rental assistance and its impact on revenue? - Management reported that approximately half of the $20 million collected for residents came in the third quarter, which has positively impacted accounts receivable and collections [58] Question: How do you see the leasing trends in different markets? - Management noted that the Sunbelt markets are outperforming coastal markets in terms of occupancy and rent growth, with overall compression across various market types [65]