UDR(US:UDR)2020-02-13 00:16Financial Data and Key Metrics Changes - UDR reported a same-store NOI growth of 4.1% and FFO as adjusted per share growth of 7% for Q4 2019, indicating strong operational execution [8][18] - Full-year 2019 FFOA per share was $2.08, representing over 6% year-over-year growth [37] - For 2020, UDR expects FFOA per share growth of 6% at the midpoint of guidance and a 5% year-over-year increase in the dividend per share [15][52] Business Line Data and Key Metrics Changes - In Q4 2019, same-store revenue, expense, and NOI growth rates were 3.3%, 1.3%, and 4.1% respectively, while full-year 2019 growth rates were 3.6%, 2.5%, and 4% [18] - The company has shifted focus to minimize controllable expense growth, achieving only 0.9% growth in controllable expenses in 2019 compared to 1.8% for the peer group [26][27] Market Data and Key Metrics Changes - UDR anticipates that top-line growth rates in 2020 will exhibit less variability than in previous years, with markets like Monterey Peninsula, Portland, and Boston expected to grow above the portfolio growth rate range [32] - Conversely, markets such as New York, Baltimore, and Orange County are expected to grow below the low end of the growth range [32] Company Strategy and Development Direction - UDR's strategy includes disciplined capital sourcing and allocation, focusing on acquisitions that provide operational and investment upside [10][45] - The company is implementing a NextGen operating platform aimed at enhancing customer engagement and operational efficiency, with expectations of expanding controllable margins by 150 to 200 basis points by 2022 [22][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2020 economic landscape being similar to 2019, with expectations of a robust economy and balanced supply-demand environment [14] - The company is focused on maintaining high occupancy rates and improving resident satisfaction, which increased by 11% in 2019 [27] Other Important Information - UDR completed $1.8 billion in acquisitions in 2019, with expectations for the weighted average yield on these acquisitions to improve from 4.7% to above 5.5% by year three [29][39] - The company has a strong liquidity position with $867 million available and a consolidated financial leverage of 34% on undepreciated book value [49] Q&A Session Summary Question: What is embedded in guidance in terms of blended lease rate growth? - Blended lease rate growth is expected to be around 3%, with renewals around 1% [55] Question: What is the impact of rent control initiatives in New York and California on 2020 same-store revenue? - The impact is estimated to be in the 10 to 15 basis points range [62] Question: What market has the widest bands between the likely top and bottom in terms of possible outcomes on same-store revenue? - Seattle is projected to have significant supply impact but also strong job growth, leading to variability [91] Question: What are the expectations for the Smart Home initiative in 2020? - The expectation is to add another 7,000 to 10,000 homes, contributing approximately 60 basis points to rent growth [70] Question: How is the NextGen operating platform impacting FFO? - The platform's expenditures are being capitalized, with an expected non-cash impact of 1 to 2 cents this year, ramping up to around 2 cents in the future [76] Question: What are the biggest risks to the forecast for 2020? - The biggest risks are related to job and wage growth, which could impact demand [78]