UDR(US:UDR)2020-07-30 03:32Financial Data and Key Metrics Changes - The company's second quarter FFO as adjusted per share was $0.51, a decline of only $0.01 or less than 2% year-over-year [40] - Cash collections as a percentage of billed revenue were strong at 97.5%, with no deterioration in month-over-month trajectory [12] - The balance sheet remains healthy with nearly $1 billion in available liquidity [14] Business Line Data and Key Metrics Changes - Combined same-store NOI declined by 4% year-over-year, driven by a revenue decline of 2.1% and an expense increase of 2.1% [16] - Blended lease rate growth remained positive during the quarter, despite challenges [22] - The company experienced a bad debt reserve totaling $4.5 million, negatively impacting results by 170 basis points [21] Market Data and Key Metrics Changes - Suburban communities generally outperformed urban communities in terms of occupancy and lease rate growth [23] - Physical occupancy in urban portfolios averaged 96.9%, compared to 94.6% in urban communities [23] - Certain urban areas experienced pressure due to corporate lease exposure and short-term mobility trends [24] Company Strategy and Development Direction - The company is focused on its next-generation operating platform, which is expected to enhance operational efficiency and resident engagement [10][31] - The strategy includes utilizing concessions rather than significant rental rate cuts to maximize both near-term and long-term results [53] - The company remains highly selective in capital deployment, focusing on both current yield and future value creation [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage through uncertain times, citing a sound strategy and strong balance sheet [14] - The company is not reinstating full-year 2020 guidance due to ongoing uncertainty related to the pandemic [41] - Management noted that while occupancy has seen some pressure, they expect to maintain a strong rent roll for future periods [53] Other Important Information - The company has made nearly $2 billion in community acquisitions since the start of 2019, which continue to perform well [27] - The dividend remains secure and is well covered by cash flow from operations, with a payout ratio of 77% [47] Q&A Session Summary Question: How does the company think about the pricing strategy between offering concessions or holding rates? - Management stated they strategically elected to utilize concessions rather than take significant rental rate cuts to maximize both near-term and long-term results [53] Question: How does the company view its investment model in light of recent changes in MSAs? - Management emphasized that diversification remains a core part of the portfolio strategy, and they continue to utilize both quantitative and qualitative analyses in decision-making [57] Question: What is the company's approach to bad debt accounting? - Management clarified that they enhanced their approach to account for collectability in the current regulatory environment, establishing a prudent bad debt reserve [66] Question: How has leasing foot traffic performed with the resurgence of COVID cases? - Management reported that traffic and ad count for July were up around 9% and 7% respectively, despite some impact from the second wave of COVID [87]