UDR(US:UDR)2019-10-31 01:45Financial Data and Key Metrics Changes - The company reported same-store NOI growth of 3.9% and FFO as adjusted per share growth of 6% for Q3 2019, indicating strong execution across all business aspects [8][33] - FFO adjusted per share was $0.52, approximately 6% higher year-over-year, driven by strong same-store and lease-up performance, accretive capital deployment, and lower interest rates [33] Business Line Data and Key Metrics Changes - Same-store revenue and expense growth were 3.7% and 3.1% respectively, leading to an NOI growth of 3.9% [15] - The company has implemented a next-generation operating platform aimed at driving controllable margin expansion and improving operational efficiencies [10][26] Market Data and Key Metrics Changes - The Monterey Peninsula, Seattle, and the San Francisco Bay Area, which represent 26% of same-store NOI, generated weighted average revenue growth of 5.9% [21] - Conversely, New York, Orange County, and Dallas, comprising 23% of same-store NOI, lagged with a weighted average revenue growth of 1.7% primarily due to competitive supply [22] Company Strategy and Development Direction - The company aims to expand controllable margin by 150 to 200 basis points by year-end 2022, translating to an incremental run rate NOI of $15 million to $20 million [27] - The company is focused on simplifying its business structure and reducing joint venture exposure, with plans to enhance operational efficiencies through technology and process improvements [10][37] Management's Comments on Operating Environment and Future Outlook - Management indicated that new lease rate growth is expected to be down compared to last year due to supply pressures in certain markets, but renewal rate growth remains strong at 5.3% [49] - The company is optimistic about its ability to manage revenue growth variables effectively, despite challenges posed by new supply in key markets [18][20] Other Important Information - The company has completed or announced $1.8 billion in acquisitions year-to-date, which are performing in line with expectations and are expected to create value through the next-gen operating platform [29][40] - The company has improved its public GRESB disclosure score to an A, reflecting its commitment to enhancing its ESG framework [12] Q&A Session Summary Question: What is the expectation for new lease rate growth in the coming quarters? - Management indicated that new lease rate growth will likely be down compared to last year due to supply pressures in specific markets, but renewal rates are expected to remain strong [49] Question: How does the company plan to execute capital raising in the future? - The company plans to ensure that any capital raised is matched with specific uses, maintaining discipline in capital deployment [51][52] Question: What impact will rent regulations in California have on the company? - Management estimated that the impact of California's rent regulations would be minimal, affecting 2020 same-store revenue growth by about 7 to 8 basis points [61] Question: Can you elaborate on the recent joint venture transactions? - Management explained that the unwinding of the KFH joint venture was a straightforward decision based on market value exploration, while the MetLife transaction was a result of ongoing discussions to create mutually beneficial outcomes [66] Question: How is the company addressing the current supply pressures in Dallas? - Management noted that supply pressures are affecting various sub-markets differently, with lower price points performing better than higher-end properties [86]