Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UDR Inc (UDR, Financial) reported better-than-expected first-quarter same-store revenue and NOI growth, driven by lower resident turnover, higher occupancy, and improving pricing power.
• The company reaffirmed its full-year 2025 guidance, indicating confidence in its operational strategies and market conditions.
• UDR Inc (UDR) continues to innovate with value-add initiatives, contributing to consistent high single-digit growth and enhancing same-store NOI growth.
• The company maintains a strong investment-grade balance sheet with substantial liquidity, capable of funding capital needs through 2025 and beyond.
• UDR Inc (UDR) is experiencing strong demand and favorable supply dynamics, with apartment absorption reaching a three-decade high and new supply slowing, supporting future rent growth.

Negative Points

• UDR Inc (UDR) faces macroeconomic and geopolitical uncertainties that could impact interest rates, the economy, and the employment market.
• The Sunbelt markets, comprising 25% of UDR's NOI, are lagging due to elevated levels of new supply, affecting blended lease rate growth negatively.
• The company is cautious about potential volatility affecting the macroeconomic environment and pricing for apartment homes.
• UDR Inc (UDR) has experienced a modest sequential decline in FFO as adjusted per share due to seasonal trends and lower debt and preferred equity investment balances.
• The company is dealing with challenges in certain urban areas, such as San Francisco and Philadelphia, which have not fully recovered post-COVID, impacting some investments.

Q & A Highlights

Q: Can you discuss your confidence in rent trends picking up in the second half of the year given macroeconomic uncertainties? A: Joseph Fisher, President and CFO, explained that despite macro uncertainties, UDR is optimistic due to a decrease in supply, stable concessionary environments, and strong demand indicators like job and wage growth. The company only needs a slight acceleration in blended lease rate growth to meet full-year guidance, indicating minimal downside risk.

Q: How does the rollout of bulk Wi-Fi impact your ability to increase renewal rents? A: Michael Lacy, SVP of Property Operations, stated that the rollout of bulk Wi-Fi has not negatively impacted rent increases. The initiative is seen as a value-add for residents, offering convenience and competitive pricing, which aligns with UDR's strategy of providing win-win solutions for both the company and its residents.

Q: What are your expectations for the Dallas and Austin markets, and do you think this quarter could be the trough for new leases? A: Michael Lacy noted that while Florida markets like Tampa and Orlando are seeing positive momentum, Texas markets, particularly Austin, are expected to take longer to recover due to high supply levels. Austin is anticipated to see positive momentum towards the end of the year or into the next year.

Q: Can you provide an update on the CFO search? A: Thomas Toomey, Chairman and CEO, mentioned that the search is progressing well with a deep pool of candidates. The company is currently conducting face-to-face interviews and is focused on finding the right fit for the team and future strategy.

Q: How are Washington, D.C. fundamentals performing, and what is the impact of return-to-office trends? A: Michael Lacy reported strong performance in Washington, D.C., with high occupancy and revenue growth. The return-to-office trend is contributing positively, with increased public transit ridership and stable jobless claims, supporting the market's strength.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.