UDR (UDR) 7 Feb 182017 Q4 Earnings call transcript

Company Profile

Participants

Chris Van Ens	VP
Tom Toomey	CEO, President and Director
Jerry Davis	COO
Joseph Fisher	CFO
Harry Alcock	CIO
Austin Wurschmidt	KeyBanc
Juan Sanabria	Bank of America
Drew Babin	Robert W. Baird
Rich Hightower	Evercore
Rich Hill	Morgan Stanley
John Kim	BMO Capital Markets
Denniss McGill	Zelman & Associates
Nick Yulico	UBS
Rich Anderson	Mizuho Securities
Nick Joseph	Citigroup
Alexander Goldfarb	Sandler O’Neill

Call transcript

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Operator

Greetings, and welcome to the UDR fourth quarter 2017 earnings call [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Vice President, Chris Van Ens. Thank you, Mr. Van Ens, you may begin.

Chris Van Ens

Quarter Conference Fourth UDR’s to Financial Call. Results Welcome

the statements. and package to made may which non-GAAP forward-looking were fourth ir.udr.com. Investor quarter GAAP yesterday financial Statements disclosure in release press In website, most our not posted are constitute Our measures distributed to reconciled directly requirements. supplemental afternoon call accordance section historical with of during we G the this supplement, have Relations comparable all the measure and Reg

undertake Although expectations I assumptions, to statements can A [Operator and a forward-looking statements our and Chairman, the press and we now to based give will any are our be in risks duty the release will filings our not included update Instructions]. that forward-looking believe in risk any the Tom in Toomey. CEO with reflected UDR’s detailed factors assurance on call met. turn President, we reasonable of expectations over do are SEC. discussion no We

Tom Toomey

Thank Fourth Quarter you, Call. welcome to Conference afternoon, UDR’s good Chris, XXXX and everyone, and

portion Chief On Davis, today Alcock, as discuss available of quick officers, results; well a with differentiating Officer; and Financial Q&A me who characteristics are our as Jerry Fisher, a who into will three and macro the fits Troupe beyond, finally will address the Harry Warren of senior do Officer, Joe be call first the review strategies UDR Chief call. during outlook outlook Operating today, and topics will I how for XXXX XXXX. this and

is as solid and GDP tailwind. us. creating of past measured assumptions The level decade growing employment for XXXX and upon consensus as accelerating X.X% First, continuation over a growth highest include economic demand of full growth growth our outlook the general wage job high-level the a second by

will reform, residence as is corporate home and pay as bias the ship our earnings general it take impact well vendor tax positive view increase. a towards create a on Regarding

with the to approach, ownership. And headwinds therefore factored overall family changes minimal see into our and these and wait and a but is include XXXX our supply with power explicitly up guidance. should curve. to home occupancy single Taking higher that stable the results improving both similar apartment expected market slowly taking rates a in We’re new drivers pricing environment relatively XXXX. to not interest elevated macro into together Potential housing be

Beyond monitory years enjoying a we’re are after macro business for global growth board tax. on more optimistic outlook and our of as U.S. and base now XXXX economies

we are from in million demand continue As apartment coupled but multifamily decline. of to totaled development which deliveries facts UDR an contribution although healthy capital early our a XXX NOI All improving will XXXX recent benefit positive economy should from demand to broader set completions see typically invested. too approximately with XXXX, for that eco’s expected call to in

class Moving five given feedback executed A stable best outlook. solicited ongoing consistent our on, in strategic our last publishing the years, base. both we’ve continued we just from that upon our over our well disclosure unsolicited two-year shareholder and direction and outlook,

openly to with discuss continue will our we participants. direction forward Moving strategic market

UDR they boost and our in at XXXX in because and store to class growth the driven initiatives XXXX. our since employed were our will best technology same rate work tackling those and in blocking to innovative Next first again primary top look we consistently in the and to similar We to ahead, employee by intent continue throughout the year XXXX, strong strategies be results. driven be business include run fairly that areas expect are bad performer operations

so in will and XXXX. prudently allocated we continue Second, XXXX do capital throughout to

line accretive for in opportunities, underwriting. look while remaining to is and capital developer our will disciplined to Our our program bottom continue

requirements return in XXXX shrink of our look hitting But we new for on accretive will development Our fill to continue likely pipeline. opportunities to difficulty back projects. pipeline to will due the

XXXX, throughout refinancing point, by increase geography forecast our interest to rates And had should we diversified and activities for serve minimal beyond. completed well XXXX. we price our exposure both called last significant continue and due While us portfolio, in third-party in to balance to sheet XXXX the

operations, same-store Let look shareholders. and saying by to guidance strong well, me all for that operations. our farm over capital innovate your actively and all in resulted turn across close on address XXXX, allocation executed the in that, raises our A willingness plan and I’ll thanks we which blocking to our ha as UDR we to of business. Jerry continued With disciplined to back TFR growth associates FFO for call two special and aspects tackling our

Jerry Davis

rate A points NOI X.X% to to driven growth office by and was XX down a drive you year-over-year growth expense line controllable lower were contributed factors continued growth I’m from revenue to basis were of contribution operating line and the results. pleased X% Accordingly, same-store in expense results. those and of of life where Tom, robust also including while solid a by all strong annualized everyone. were revenue to quarterly in they fourth our and growth that revenue to impossible. driven quarter another continuing to NOI associates stable were good A+ strong X.X%. afternoon, growth Year-over-year, urban, XXXX quarter for our special over growth top similar X.X%, operating growth After under lease rata turn and results NOI our JV Full-year which the X.X%. to of their limiting blended initiatives, announce our and top occupancy same-store Thanks, and respectively were objective maximize XXXX. and that field long XX.X%, communities, product, pro same-store X.X% thank corporate

of Moving on. We debt the increase, fourth low, levels for remains Likewise, with previous at all pressure saw purchase move-out a at net home for move-outs reasons to quarter. rent X% minimal XX% and consistent quarters. our or during bad

underpin that guidance. macroeconomic same-store our XXXX primary assumption the Next,

I X.X%. against card. wild to is as lease due elevated month Overall, Controllable and shortages for expected set properties XX basis urban by the by our follows. impact the UDR in national note a growth and X% to of basis to check assumptions of to XXXX. full-year due community First, saw what will expenses growth not efficiency our remain quality points XXX,XXX or to be and to rate should in an XX will basis expense XX in further generally basis should growth completion points XXXX power burn-offs versus initiatives markets. remains labor are growth due income XX XX% addition deliveries as basis blended, forecast grow XX to to to would in multifamily markets across points points from XXXX approximately rate outsized rental XXXX. provide perhaps quality A of we valuations positively throughout revenue our XX real-estate assorted saw to to and slippage high XXXX in continue XXXX. to assets, taxes comparable urban York per same-store job relatively higher and B as given but by averaging to NOI sub the to Other rate outperform range. Occupancy construction New many pricing growth points. XXX These form slipping points, basis pressure to strongly growth is in continue are specific and we at in with supply continue remain wage

fundamentals nor same-store apartment that are rate we to revenue over together XXXX. X.X% Holistically will growth are occupancy we to along and the trough. each X.X% Taken meaningfully are favor anticipate XXXX improving, as operating growth expense bump year. be NOI the throughout to strategy expecting These in to our worsening continue expected

Importantly year-over-year sometime lease quarter. in to rate we first year anticipate growth crossover last blended versus the

represent Dallas the are end to approximately grow small the expected York growth of to X.X% Seattle those in of the the NOI. rate Washington DC and XX% that And Florida line growth of represents Nashville below be XXXX Orange Austin the XX% range. generate approximately and San markets forecast range. above Los NIO low which and Boston end XX% with markets, Angeles, same-store expected high portfolio of X.X% other of Regarding to and markets revenue of These New forecast NOI are County forecast our Monterey. the Francisco include expected to our markets represent

a Pac XXX Boston, successful positive our XXXX our exception be the preleased. game changing JV County high-end our end much on notable date. supplement. and quarter but on projects Community budget we of previous up for and This velocity and Orange leased on development Beach, Harrison are underwritten be west. leasing project developments largely negatively three but community is and what Huntington over generate our successful opened our with and in XXXX In asset I rates associates With $XXX lease velocities thank Joe. delivered once expectations. I’ll at year field office in will XXX it Last, to expectations. to in onto statistics are corporate on The the development our million drag another available on specific leasing and a results have will a City past quicker [indiscernible] and has in City a our around to original the line leased a XXXX. to up schedule at in pipeline attachment rental Pacific we delays like aggregate again making all is rates, that pace continues impact rents raised X times our would continue our Moving strong remain and $XXX versus to complete million for in with recently achieving construction X% given company, turn on lease of clientele.

Joseph Fisher

include and I and today topics The markets our a update. a Jerry. and will Thanks, transactions sheet balance fourth results guidance, cover update, quarter capital forward

our as fourth per full up year. $X.XX capital previously results mid was full and driven AFFO produced robust XXXX in or for were well and AFFO operating which $X.XX quarter strong $X.XX share a platform the XXXX, by at growth for and disciplined the our and earnings ranges. versus came deployment NOI our guidance and $X.XX X.X% decisions. as points year Our provided the $X.XX FFOs adjusted quarter, of

midpoint of high-level development per our a to $X.XX approximately as $X.XX investments $X.XX XXXX is $X.XX and program our attachment is our for Primary and and and same-store, flat operations, Next, XXXX of a the I’ll include LIBOR other $X.XX funding provide approximately neutral of found of negative impact of XX between a to guidance, positive details of supplement. developer adjusted from the drivers commercial a year-over-year, XXXX from a of $X.XX impact JV, after higher comments G&A items. $X.XX and be accounting as non-core AFFO $X.XX and respectively. capital impact several adjusted our costs FFO from FFO $X.XXto can on the related guidance which growth Full-year XXXX share

last in the developer three-year Additionally, forecasted year’s capital lower $X.XX A is developmental XXXX provided difference following. a activity and approximately FFO impact and lower of prepayment midpoint adjusted from delays. of $X.XX JV $X.XX as and by program a G&A, same-store XXXX investments, between offset growth and impact from the by positive approximately impact high negative approximately our strategic $X.XX $X.XX outlook we of driven negative of from

his with to forecasted occupancy XXXX as Jerry on full ranges Moving growth NOI revenue, X.X% and guidance in of prepared same-store XX.X year remarks, X.X% are expense XX.X. each our indicated to

dispositions Regarding and completed a amounts our in focus de development that on continue program. be capital sources developer XXXX we to uses, and and needs pre-financing have of minimis to to fund

quarter are as FFO for for adjusted $X.XX $X.XX to $X.XX first and the guidance our to ranges AFFO. $X.XX For

a Shores, years Vista to we sold Pacific to Orange into weighted conditions. Del to located closing million of quarter two Suburban average. fully for rate communities on in Subsequent The entered the cap during Ray San XX for communities XX Diego a sell quarter and in contract Orange Carlsbad million in subject end average Villas County owned old a at nominal X.X%. XXX-home were XX.X transactions, County community at customary we Next

and investment As and developer into of to a the pipeline million favor yield investment beyond development quarter we fully XXXX we capital mid effective X% an XXX look balance in and end owned range. in program our continue had which

land economical continue will shrink pipeline it in the our However, of development is our given markets size of the the foreseeable many finding of difficulty likely future. for to

our is as pipeline desire restock it we to add time, more disciplined While to land deals. will remain the our to underwrite over prospective we balance sheet,

XXX at markets, issued issuance quarter value, X.X%. leverage quarter XX.X% our balance million credit on un-depreciated In financial At sheet our unsecured of capital paper as cash $XXX redeemed was end off liquidity million, $XXX conjunction Next, the X, the and originally net moving debt facility June million of by balance XX.X% was with and X.XX% on measured ventures. during enterprise debt XX.X% book XXXX. inclusive XX-year onto commercial capital, joint value we due of a coupon the or we and

net ventures X.X joint was Our inclusive X.X of debt times times. EBITDA to was and

to sheet, our remain size unencumbered our we our the profile up comfortable With year. MPV although to and the credit revolver metrics ahead duration throughout the to actively we will to down Looking XXXX likely improve regard look balance drift you don’t lever balance or see similar will plan lower of our our activity for to of NOI positive opportunities increase continue pool. and our to

and up per that quarter XXXX dividend it a dividend With declared release operator. raised a will we in Q&A, when we or representing common of over fourth open Finally, $X.XX a yield $X.XX share a our annualized share in for per a increase X.X%. approximately year quarterly and I our X% conjunction $X.XX of the to year with annualized

Operator

Our Austin Please Wurschmidt with [Operator proceed line KeyBanc. the with Instructions] your from of comes question. first question

Austin Wurschmidt

you turn rates morning Jerry just that what blended you good Hi, markets predominantly little mentioned positive driving in a re-acceleration. expect the curious bit early that are lease to year,

Jerry Davis

compared compares a and are a negative last You at look look half this the Boston, doing that cross you of last better know you in negative -- DC, when of January did year new than little year it at January including renewal that on over, like roughly the to lease Florida at two markets when last some this rate well you ‘XX markets when January Seattle, bit were on fairly X.X% did blended X.X. of points X.X% it several in we was of Francisco, of and of this January year really to as a the think And renewal there’re year. down basis then year that markets then XX it down And effective year month January at and up know that’s look Salinas. basis growth, as an are you January of X.X% York there’s close San growth was just from New are when over on ‘XX

probably not stick blended was that current hockey is be bottomed. XXXX, at the it year this it where year basis than the a do a was it and consistently but mid that we’re And to comparable than we cross was it February, last as kind forecasting on rate really last right seeing significantly you blended blended year twos. at in so at higher XXXX growth of So, less to up point probably January was what over you rate we year think looked prior growth look it we’re and going we in think in that was start

it year the You XX about into embedded XXXX. into you it when know was bps at earning coming that’s lower of X.X% rents this XX what coming to look than was about

Austin Wurschmidt

assuming helpful a just turnover are perspective? turnover you That’s said mentioned I’m I what historically forward going done, you with and you turnover XXXX, then in think basis curious was that stacks up points how and XX from

Jerry Davis

rate those flat on our again outs thought continue year at XXXX, success was we numbers had we in XX%, or that year, not as to today be we would basis would continue to aggressive XXX with if short-term turnover, the under short-term it increases related negative and rentals was the forecasting what rental lot renewal we in turnover last year had to those was but had would had XX% effect been we to we roughly bp last furnished XXXX. be this which down even points, listen in into it on XXX better customers, fourth have quarter full turnover we started so so excessively remind to be I the last just in move year XX look We where of a you a was

Operator

Sanabria Our comes of Please next question. question of Juan from America. Bank the your proceed line with with

Juan Sanabria

‘XX are from what’s Just may sense guys any be of decline supply, expecting you at point. of ‘XX conviction thinking about the into the this level what in that

Joseph Fisher

‘XX, start different activity obviously at about look data triangulate forecast but, think in couple we around a permit it, to we some had those to out we took as down place were we that help of XXXX, when XX%. Juan, points as

conversations that our about think about given expect difficulty there think Also, get covers, going they when on to capital time what their a gives the and ground, out And place participants brighter you its launch. XXXX, that continue competitive I other lined typical new supply So, market get and up. obviously lead other financing in have groups to we construction to [match] the what get and and and good see really environment would come you that for as timelines the forward. merchant going as the to a builders talked construction see with taking they try starts they sense such and

have So, going ‘XX feel level, remain from conviction I good is the be they of but into decent we down. much think amount down a how pretty what ‘XX, of we to that it ‘XX will is, question will to coming trend

Juan Sanabria

us on then could concessionary main from just and front. the and to end Great high store to revenues, you you if what variance concessions end the you a with on factoring regards driver update the give guys seen what’s an between on just and what bottom same do

Jerry Davis

historical Jerry, Sure, I with is guess start Juan a this basis. concessions to more on of

Our fourth down which card, you [ph] were year-over-year were quarter those up concessions cost marketing XX%. XX% and show down our gift if factoring down

a a well year less gift modeled did we come as XXXX see levels as concessions down bit prior. concessions out in than year. cards utilizing the We been we’ve we to So, continuing

to and guess our first guidance to of our do low and asked when reported guidance of in XXXX going high runs to get we from to how you I’m the get X.X you and I down mid-point walk X. X.X% from a our X.X% end You X%. end

First, expect occupancy, we addition we occupancy at from stabled to any high revenue range. forecasted don’t growth we XX

growth XXXX. we in XX have you So, don’t did bps like of

I that with stated takes those you lower what earlier were so embedded of points factor they counting that, and and probably other of I down as we’re Second have you in so being contribute last as income year, will it in was bps our quite much the were as that’s on we think year only a benefit a was it risk XX outperformance about another then XXXX which contributing XX basis entered significantly, not that bps XX and major XXXX XXXX to don’t it less. continue

go So you XX basis again, don’t the XX to the prior gets embedded you growth, the rents year bps bps it you from XX of have points three. the compared get the don’t of lose and income you of other to occupancy, you and XX

then at it to we rate and our points that range look mid XX the looking to at that from you X%. blended contribution and that and going of expect you think both we growth basis we be in that other gets basis year somewhere this to two it’s way income Another year to is when to midpoint be expect last get to points XX outsized that the in

as us right some like as well plan if it’s job on end on rational this lower really be such income to rents from outsized be new less what depending your as to parking us low-end now items a but X.X our growth going we if So this rentals helps more us push in the come have growth other outsized above the success short-term and high-end of job be and growth would other from that going to wage would top X% initiatives. the about are this for to look be the to year why which competing pricing income midpoint that’s what it us our get you is like successful with will to how that on it expect get we are supply the have furnish in we not we gets

Operator

line the W. Drew Babin of from Robert Baird. comes question with next Our

Drew Babin

It think growth to kind County seems just markets demand some larger overall like some community new obviously new of burning least on California Orange be Southern degree in with County, year end the Question and in supplies. off disappointed maybe I the D.C by supplies may coupled of Orange at last ‘XX.

talk you sector in there while then and employment. D.C. of seeing you I let’s seeing are and growth are about County what what about you are it, Orange demand talk you in on private Something guess terms

Jerry Davis

XX,XXX in as projections Moody’s last year specially in County jobs probably from compared felt like about down culprit getting job XXXX XX,XXX Current job OC should growth to Beach up XXXX. about our ‘XX that we were that Huntington effects growth was the to XX,XXX. to We disappointment. Orange supplies back and some have biggest in in from be in locations only

growth be reduction You in year Supply collared expected an to again in in jobs closer is be to be Orange Orange than XXXX manufacturing is was was last last it to X,XXX ‘XX higher it this double what white are but expecting year currently projected increase County, in or a it to in seeing County. to hair about so X,XXX jobs X,XXX. we’re a and units year, was job about

had little in was in growth, supply circle of X.X%. as year submarkets Logan revenue we that out waterfront, County supply in job the bit over be was U area our growth at you this past the currently Noma like those the what in year this we year to with as comp properties as D.C. on negative Orange fourth did as What most should where the and look revenue it if and acutely quarter feel progressed. do we D.C. to we comparable down in started to have we Street even during it you year When well a southwest So, below don’t directly it the areas forecasting due get measurably actually hurt also sluggish though more Xs. County the felt picked-up us in the Orange are ballpark jobs

of when our down district you resident within a a drawing base. So, different some is have neighborhood it

Drew Babin

in like California the under sale those? years I XX contract And XQ the you rates you Southern these the of then in talk dispositions suppose to can [ph] in just made can ‘XX on some color limit what would you quarter ROI you opportunities shed there? cap kind some on that, CapEx of do weren’t about and management fourth quickly old

Harry Alcock

price the think rates XXX,XXX much rates, analysis these rates if you sort sale per the Harry. of have is included the I unit are is the all for just unit. add flows property more fact buyers to these by cap a assets. consistent who of product value at being of The received this XX or sort theory over very enduring we could put the pricing on that there that lower for the in we around XXX price year comparable just Drew assets our look that were old at into have we in in XX-year-old you cap comparison I which top property. effects mean cap unit these just a perspective capital right unit way is and XX which which in of are X, for any built from per traded that per resulted more a good paid a into value added very metric I are our extraordinary we thought we old brand-new were assets urban well potential mean

Drew Babin

that. I guess one follow on up

kind are that is type work seeing maybe very obviously any or interesting you kind evidence and just way of play are are core that other for think supply you interested product before warning of there through add needed value of suburban that. are private CBD shots or its in investors there, to need equity more transaction Looking

Jerry Davis

chasing core just some mentioned. abundance is of to hear and there We find to that point, today. some you is home. as back at a And capital are see that starting an CBD evidence that’s Again, capital needs to flowing capital multifamily

core So, demand capital that in where to see the be you little are that continues to capital in reallocate going we are value find standpoint a see to home trying starting bit. add from oversubscribed and

Operator

with comes line Evercore. Rich proceed Please Our the Hightower next question of question. with your from

Rich Hightower

give comments the sense where current on your market relative can drivers to prepared same and from markets your the of up to back widely in diverge potentially stack what store which a might and you going Jerry different markets? might most range the they forecast specific those us

Jerry Davis

come Sure, and north it this I year always has January over. just lease sluggish have in have Seattle about what five with did feels a markets plan though even little now, of similar everybody sluggish a of turned seems in to bit gates when positive Right gone four X.X%. bit it last new I tell out last versus then will rate it been of four. the month concerned of the negative Seattle. at we Currently one growth our original I growth our and top revenue this X.X%, was look was it January you our Seattle Seattle it

it did So, accelerated. our while it doesn’t than last year stronger and feel great versus original plan, feels it

hit occurring have in the REI you going those job their Bellevue from in out in or new same-store Amazon absorbed are well there its got cognizant last two up have Seattle supply only the to CBD EU the that supply deals small EU. district. markets lot is up predominantly two that’s consolidating as the new in as properties or in of We growth it’s year and Salesforce has whether been that A campus. hit We

concentration, perform our So, that are of as have [indiscernible] average to also fourth above doing well north the are some the assets Bellevue B as Northern X%, [indiscernible] suburbs where revenue a of we we we though. have well, have in we continued large down well southern still of growth quarter which

facilities that about recognize workforce Amazon. going beyond XX,XXX, up in or they out are whether tech are the starting we it’s come of diversified are Southlake talked there’re that other Amazon since Bellevue While XX,XXX to that hiring has Salesforce Google, it’s or Union they a that companies a take from Facebook, operating their level more future whether

a Hill go are is Puerto the the up year So, their new so renting Salesforce Seattle And San bit better the they up way, I And really it’s so hit and but district there, everybody think then continuing [indiscernible] early San where getting strong really had we be that’s that Bank, as just in positives. very is from expectations right you’ve those Mission two good well quite either been Rico supply off bit one now think in of one market right as it’s it are results it jobs the out they well. starting a are upside can Francisco, last not opening now. Francisco offices driven population can watching than last major the couldn’t building as down growth I surprisingly or especially that concern that financial it’s to years, influx apartments, in then taken and the do of down started occupying people a pretty area, the for [indiscernible] that job Orlando, original one has the would us has more the but had are

Rich Hightower

And then the side? on anything negative

Jerry Davis

against occupancy revenue Right disappointing a happen, Boston now, under there, winter think again in I obviously X% well units deal, that we at as the in even Harrison in months. area in on XXX be our after success and don’t think But bit starting we’ve had more a our but out CBD, the it’s we’ve back-bay seaport going supply that is and really stabilized that at to predominantly is couple as the been us our job to the one there, was up, there’s had leased our the bit weak, look we where has even sluggish, growth being X% month, a started feel related months growth XX strong property, for quarter I off a lease was mainly we that’s deals, Boston that one is of last competing fourth north over a for Boston can it’s very the property. most within pricing open in people there pressure but when

see around So, patterns. but once tend historically kind down March in to Boston seeing of significant that watching we’re a in traffic you acceleration comes

Rich Hightower

the are newly being a included number, you major a just being a and that I more that of in to same-store guess give at in you proposed properties mentioned to the which could of Secondly, it’s properties the from NOI the up? revenue us are sense question, ones contribution know included changes same-store among [indiscernible] least as housekeeping

Jerry Davis

I Actually, do store corner properties page if out it’s Mission in Newport XX page Beach which and area into of the to the and the ‘XX first of you’ll the [indiscernible] the year stores. quarter on which four at guys Newport same to there supplement it’s it’s see XXXX properties, XXX so in about come we Edgewater that San full four the the in want properties think excuse is Seattle our [indiscernible] out Bay Beach in additions same detail props, predominantly is Francisco, doors. of me market, [indiscernible] you down And what and then look three of middle

Operator

your from comes question with next please question. Stanley, proceed of Our the Morgan line Hill with Rich

Rich Hill

some I’d time, of major to and taking bigger in answer outside good in the the big markets start but love you’re talking bit to to Hey want and little some question guys, how that and how a the morning get thanks of spend a a about you. smaller revenue helping I’ll also your It’s but diversity of year of little that more color spent for a maybe bit phone some what your your much We of of as it seeing growth is that time growth markets leave relates bit supply. little call. markets maybe up ahead on maybe on job question to you

Joseph Fisher

we’ve you strongest of so X.X% only and the very about of I three two nationally. the with new would have in have expectation markets, XXXX coming those than year XXXX but where influx last to prior our well about it’s job strong X%, compared that and expected and Orlando also not in X.X about Orlando in spoke there’s very strong, Harry that’s Rico was X coming a the enjoying deceleration slight Tampa guess over well those markets Orlando in from Orlando Tampa is start not job supply. Tampa prop will our been peers. I years be the know be Puerto at at had and we’ve to in affecting X.X% growth this from probably growth but but to other Florida versus certain to is growth even ton look submarkets to a Orlando two done When revenue you done our markets within markets exceptionally in still

those the the much in markets Our range, nearly to against tend properties as but also be B- compete B, in in two don’t maybe we new supply.

And Another last be growth it’s stagnant market market to not around high digit in portfolio is then Richmond. average, and should range right in to so would growth. year’s be our single an probably it’s top us below is for to job growth. again market two it average slightly Employment will double sluggish no have year continued the This that be has job Baltimore that X.X% about X.X% the leader be close and going been do really significant X% our probably is as had national in next fairly this last been a that benefits year years at once has agricultural and last Monterey about then going there’s year to supply little be of to community. that digit revenue have X.X%. new our really revenue couple which this five What at national middling Baltimore it’s to at the markets Richmond’s growth growth four years, well. going predominantly has but at think for us growth been next we

middle be or in the not of kind they’ll big detractors. contributors So,

Rich Hill

migration you this a markets identify away put Got don’t it, finger can you that San just Are I from of know, sort it point of any maybe these, to trends seeing follow some Francisco, one secondary D.C., too on at or up to early Seattle, question. that? and Boston is population

Jerry Davis

you’re reform bit It’s or…? you about early, about -- talking too related probably tax are to a if talking

Rich Hill

No, just generally speaking.

We’re bit still hearing XX, well. see dynamic migration a X, starting be that some and to affordable population are past may is years to trends that cities more population over as little migration the but down XX

portfolio, I was have and you you’re that. if wondering diversified a obviously So, seeing any evidence of

Jerry Davis

Yes.

bit. mean, Portland. places come I population growth like seeing a seeing You’re Denver, to we’re

the of Playa Southern significance than influx But, wouldn’t into from move, within I think I in Bay Northern say state Area California, protect Seattle other especially California down seeing California. you’re down has Vista of jobs anything the those. got some of people that

Joseph Fisher

We And at wage it’s not typically the similar but growers likely growth. times, bicoastals, to little -- Northern growth, population do pretty we pay wage income it’s ability And Just year, But focus bit And maybe migration outmigration while the of it’s our most see to that’s growth greater we growth growth. immigration to just will growth the income growth. less one that. attention time. diversified but we where last and trends, rental population other given greater probably you clearly, look follow-up traditionally, places. have been we’re the are income at portfolio, on some you markets see changes if benefit to income that some if to over in and biggest Seattle, -- over population the we it’s go Sunbelt of is those in California, the a on on employment composition be both, where over going ratios experience drive

Operator

Please proceed the Markets. question comes next question. Kim with of line your with Our BMO Capital John from

John Kim

Richard’s your on to steadily tax Sunbelt years and to wanted years, reform? findings on been Sunbelt it’s down Will just XX%. potentially down ago you XX% exposure. It’s based few NOI of follow I last going question the on was it four over of your your up allocating be

Joseph Fisher

Hey, John. It’s Joe.

was DCP reform you over been all consistently of Portland. those exposure done have comment, of four I markets increase those kind XX to a of say you’ve to tax through exposure to type Austin, such that kind seen the we at is months, So, think point. think want but us as we of you’ve what we’ve within place, this Nashville, look first, and able markets the which Sunbelt Austin I at and targeted increase seen if Denver to last What number other took we’ve before investments

So, to to those you target our do see bicoastal. markets relative trying us

activity our in you’ve addition, seen well In as XQ disposition as subsequent XQ activity.

year County overweight on Orange about, here which this talked increase California Harry fact that more and of County Southern dispositions, the a to coming As have exposure. of and NOI our really byproduct we will City Orange Pac the

As down numbers and it $X,XXX term increases. through it’s database that bicoastals, by our it increase say, early When in was question. kind X% the a found a necessarily what IRS tax or relates the year code don’t other and it I more impact to but And to really longer it, two consumer the in see market, still impact like good of to you after by York, are I’d is markets When you tax base call related reform of X% one we of zip are has increase California, like Boston going then to or all X.X% overall and that, and it year X% income expect X%. by to a -- days. we from X.X% by our many ran in New go

terms about. will say of implied evaluating and continue are potential think nearly headlines would I in we draconian So, as to have it’s that we would not the migration perhaps as trends. something But

John Kim

of couple will years impact? the indication realize the think season it full leasing an do you you of And peak give or a potentially this to will take

Joseph Fisher

take of as line is go The migration it’s hope as than pockets pockets course dollars longer to you of some leasing bottom consumer season, on couple trends terms the impact their months impact. going we In that everyone of before see of that more MSAs, additional through has strength. in maybe within see a you an

John Kim

X% But, store the fourth you that’s And provide XXXX? guidance wondering I’m I in is JVs. project then, if my NOI. that store MetLife positive same the And growth don’t portfolio. this for and really in and second on same turns minus you organic quarter KFH question know

Jerry Davis

markets. because I to stores tax be there X. properties, the these one really three be you, A, again coming heavy not to very the And in around pluses, high to And or portfolio, at of remind want in Expenses high we in assets mid would New new XX% is heavy one a and year downtown one Company on in A in of [Indiscernible]. York, MetLife just right comprised Austin, we percentage When total a supply, Yes, that we next in would these ones; the revenues the do. basis, pro X% you’ve it’s you that see one that compares in that of then Columbus same Square are in to supply and another mid probably Ashton would which plus, is it’s downtown in at four look Austin, got be MetLife about are In in our bring in rata at portfolio coming up issues Xs a probably NOI low XXXX. with ones. is Denver, are

pool to our a opinion are revenues what going our bps be understandable how below same store in it’s is. see XXX to So,

Operator

Our Dennis comes McGill from Zelman with next of the line question & Associates.

Dennis McGill

high just on First close The the pretty last maybe coming slightly I the side. to out expense of high the end. above think question guidance couple years end,

end variability and set or you I variability think you factor how As would outlook mid this much versus much low that end? guess -- the should the year, drive the high into the and it how what to

Jerry Davis

high are Yes. Again, again digits. which this real is to guidance on taxes come once going X.X%, single our to year’s to be in going estate pressure X.X% point

some will almost total which points points. basis drive from have XX to XX XXXs impact basis expenses We up,

of Probably, we significantly side. as come other we’ve side we’re workforce that points for X%, wins whether guys side, our budget push up The we’ve up the compress be year or some administrative the will on unforeseen guidance, while that maintenance don’t tax appeal with see that us could us wage it’s to we tax really of we on affect sales I get bad as the those the but some we side don’t to efficiencies impact And the last personnel. pressures high feeling probably about are many if pressure to down. end within typically over had, or us want have pushing the to able X.X% think

this markets. in it personnel our were on but year. basis was side, But pressures addressed X%. kick up benefit cost when certain in scale Francisco like, up reform took just really could markets, as tax depends X% are on issues. and we’ve Joe surprised up the from We in year, go national seeing personal talking also feel On we that’s well increases labor wage that X%. Seattle wage San wage something the both we about between Last as

outsized would that. rent accompany see some if hope Now, pressures, would that growth we wage with we

way revenue So think our it’s ideally pushes if have be categories or of more categories, get negative. for both will we high other And would work side. end very we those end we we to to continued efficient to But, our can to create costs, marketing it there a push maintenance on expense us deal this. the the a corresponding close to residents there, think the to and with high flat to repairs primarily

about got we’ve of currently, tours online. fact, In XX% onsite our booked are through appointments

year of as into personnel half, over more properties, package So, XXX over some as we’ve much made efficient. our year, able has the we’ve to of installed lockers burden out there our the people cut last been well which and

Dennis McGill

you taxes last relative was or the year, to higher or end, upside midpoint initial higher personnel the or And by look guideline? that if more at -- to at property your the midpoint coming driven then,

Jerry Davis

It was personnel. more

Dennis McGill

What think has underwriting market side, on land you in -- seems then, deals. the earlier, land the out? comment adjusting difficult new the do past? development out and separate as far it on I as just you And think you the made question entirely, just just stubborn make to What breaks broken

Joseph Fisher

think additions What that rents six level, continued release to the down months, I at continue pipeline of long this have term land levels above to have that is inflations continue kind to creep at pricing. say up plateaued continue we and [ph] the while be cost We our zero effectively with being the land about seen have obviously to been last is that which net why new or pipeline you’ve to for XX talking dwindle point.

least while and to land So, I see which at at of change this accelerate yet and either we one is inflation don’t we’ve other that a point. focused on, has say we pricing think widespread are that really it’s have anything deal actually on outpace or reprice example than to seen rents -- that what I wouldn’t

Dennis McGill

feel one which like to you repricing? the has markets there for Are things is be a catalyst, catalyst more think two or any those likely you to going rents happened be where of

Harry Alcock

This is Harry.

land prices sort own sticky with some think fairly their you dealing I in rational. that’s with not emotional are individuals cases analysis entirely tend to be of always because

be that purely so, respond. their particular to sellers they adjust Rents negative, some unless cyclical. to And expectations don’t could land are tend slow there is be event if

would going so and of market think a as it’s it’s development don’t one speak other to cost, its have market set that own construction but expect the Joe declines, activity I construction I that basis didn’t So, can -- to typically, we variable cost mention, again, think that to is and decline. -- necessarily rents each facts.

Tom Toomey

Toomey. not financing think the see What dirt push we are on to that Dennis, when land of and wear usually the subject hands is of will that starts inventory this But, the is too anytime other market merchant heavy people. I to builders not dries more that’s up. the soon? it reprices out certain. much, characteristics into am And I

Operator

question proceed Our with with next from Nick comes Please the your Yulico question. UBS. line of

Nick Yulico

A couple questions. of

costs even And on rates? level, rates up to multifamily With if going the by of yet, certain higher? months, in market. First assume not rates rise gone cap last go over having you it’s cap a six transaction are seeing the do interest think signs up debt given you the reasonable

Harry Alcock

important we climb, other in interest move. again, those depending cap rates, time, interest between to And that factors near to three And of to one cap be capital is if to therefore, sort other in the are go loose there move. NOI extraordinarily it expect the over have capital clearly, rates with and one rates and flows. into perhaps two the and If on continue that move. that rates term, interest going is Today, rates. is there’s high. happens what rates, But no least there’s think, to not how tends rates going the any flows growth are cap correlation I most evidence at interest the future, seen some are rates, reason on cap depends factors

surprised rates or any so, little that cap seen move over not we today. wouldn’t the have next a but see evidence I to bit year So, of be

Nick Yulico

I multifamily stock, REITs, still Board most and So, discount Tom, if how your are buybacks I guess, pricing or NAV. the wondering of in like am the thinking is you strong share meaningful special dividends, about the transaction showing to a market,

what you is capital market selling do in your So, at stock transaction point buying pricing still acquisitions focus on doing the risk developer stop back if instead and the and stop cap assets, program, and strong of going rates more higher? investing so maybe there’s

Joseph Fisher

just and then Joe. it parameters top. call for obviously wants compete around what’s about phenomenon, committed in uses, they you days. is set and are anyone that’s about NAV come It’s Nick. today. with where XX the profile, a kind place way of to do are versus the as the give then Hey, uses to a selloff corporate taken It’s But and leverage a factors? clearly of the if we we’re XX your think you of alternative to those last it, I’ll have take trade it kind what how you discount in through new place relatively over you Maybe it couple thinking up the NAV, So, what the

BBB a plus not From we on for So, from we at But, a share lever we’d we’ve agree that front. and especially line are a maturity to credit. where up, profile, profile intent leverage solid standpoint, standpoint, buybacks. utilization like

which that cash table, So, to back reduces source your dispositions, the flow. you of just sources off kind can take

kind point And plus time. we development sub still committed XXX DCP, our committed dollars between And when so, then, uses of you to come uses. of million over you in this in look at to have

that to long do loans, We not DCP on potential for look yet. been continue quite land a In have could hit. time balance we sheet and addition, take period necessarily development, parcels of a and on we’ve at that working

program thinking do So, factor that’s get going and ultimately, and buybacks. math. each competitor similar the going available are to have how more compete you to which in But amount other of the a ring you when have shadow capital point we’re our in development is to that one share capital, for to against DCP you about where uses,

each when have against other capacity. three those compete we So, the

each a dispositions of I piece other aware is we only year. of I is corporate right capacity assets which tax it uses The at look think gain make REIT a we from standpoint, really the of time. a And this year sell and allocated towards are alternative our are a amount the best be uses take is every can those factors everyone now, and in certain point at preexisting and what discount the the point. decision where moves on, that But will think as at and

Nick Yulico

I of issue maybe FFO on value matching I -- appreciate uses guess, think are REITs stock point just how what how is think, that the again there. now. cycle growth? which lot in to do -- price lot buying development fact as you is invest year doing, do is store you at facing a you understand growth on do just continuing following same right up a about start at of point your and development existing company I I look, your your investing I detail what stock? the do -- you and versus in But, this back mean, of have based X%, but the doing this the point based How this you rethinking

Joseph Fisher

fair a question. It’s

a development, with IRR. on if getting [ph] and it buyback, unlevered XX% value assets And that are of mid IRRs teens seven, development, asset which stock up I to those think, are have you buyback continue end to on call type in are to unlevered unlevered call a X.X% basis, we look DCP your you whereas range. X% acquisition are low you it to going at is

are still compelling. IRRs So, arguably more

as day, cash of Now, as end for XXX And when target; to the get over we equity we compensate development. we get we that can at buyback. the the there that risk development, to over the going are looking the basically is we flow more get and issuance. be can the to increased basis each range it. upper associated or never XXX and account there dispositions points with are that we and we get compensated if that’s look discussion of clearly, end fund to on At risk, dependent and at But

exist, at. that we still of that another margin have value the So, potentially the are use But could we exist. still the of creation obviously cognizant fact we capital IRRs look

have is is have year, dollars contribution assets, you have with And you XXX hit on that punch net which it provided this a of the two which little my in lock of As the a a release issue a XXX we about think are that overall it’s because then, million. net million do on one are X.X% up from probably got it year important City, going to bit going is, neutral growth basically contributor and which which pipeline. you relates earnings, a to plus line we to follow-up FFO FFO you a I’ll store a and little related in first really mentioned coming you yield earnings to Pac same on positive your second as point we program. Harrison. have that net those overnight What’s negative DCP development we growth development. from the development that. the to XXX on developments off developer this contribution call I expand relate it, commentary. this well to that does same of capital of But, And and made a of in bit question in being with end We coming What couple that comment as year timing

period that in couple you the come a bit million funding of left as X% paid assets Eventually, $XXX of from ramping stabilizing of As a taking has basically into out of results go couple on initially been then developments, which of cash structure over you all that lease comes million X.X% high on. interest those little up to negative year and on into the flow have already disposition. you guys up a with disappearing sort Xs. for so, years those form expense yield $XXX FFO know, really cap just on that’s next that’s NOI

a So as zero hit expect up year you’re to this contribution, but ramp would that correct we XXXX. that we

Operator

question. comes proceed next your with Securities. Anderson Rich from question Our Please with Mizuho the line of

Rich Anderson

sense. issue mentioned difficult a supply. reasons year thing. I there of the to as a make a stock the being that tough And stock performance is be in won’t able mean, your okay, part, of --stock One land because look do is misery, but this a [ph] that reason time the supply. things, I much guess, you -- as I why Joe, of of had has to in but lot partly multifamily maybe Is at good is development,

at generally? good you So, a or that And look as question to through goes do read that everybody anybody. guess I

Joseph Fisher

to Clearly it fundamentals if supply comes positive on ground the a down. goes

positive our business, percent plus is if For more XX pencil. difficult development to that’s a of

in other For side of NOI on see contribution in you but on time. theory store ramp up pipeline make little business, earnings you less the same over the the the side, the down side results near-term may it transaction a bit, which

Rich Anderson

a ratio, from my XX% Yes. give I any like It XX% will up day. good sounds

like deals sounds of how looking you, just land, market still see general -- the it still away terms So, do happen. you’re in at in from seeing you’re you

kind of it’s other could new UDR feel outside from projects you slow but development from players it stupid even trades you going of do if not that is to or also down are stupid guys? land starting still potentially So, to on, lead like

Tom Toomey

mean one -- for to deals will consistent of it the the done to UDR, last the the we’ve deals deals that it most to a all -- available deals before we’ve a quarters to that none likely of pencils that more stupid, that and last it’s -- able happen are all years. disciplined hope that time. the below for maintaining development even to the lot to over -- do. construction it, would be and financed of deals you talked means are it’s that be of doesn’t in I as seen clearly continue will we our sort and or But continue while But I approach, I underwriting starts does capital rational getting have opposed the find to see it pencil and But, levels that these fewer deals pipeline. or will you mean these four Rich, about that particularly our that more, Well, think, isn’t expect won’t get harder pencil. of at new backfill couple going it look three ones We

Rich Anderson

Right.

kind these DCP do or you’ll you while see -- a see that see kind that all to because you development same the do year? guys out. The factors. hopefully, the -- mentioned you what’s for lower kind a over within at the question be last plays projects I you of will staying leaders we you end as is, but pipeline example trades REITs So, around there course number some you think Joe, out Do least of the and have the will little same the how of are and by six effort, of at of of the will it net

Joseph Fisher

is out net to number over I same think, the to potential there time.

We’re sitting of at, so million there. call or today it, exposure XXX

through on of XX you’ll is analysis will some million hold, option have Over of work we up quarter, do on another the through DTLA other period, But the so kind one. coming sell its deals. that funding left first of we buy, which the see

still that So, XXX difficulty so past that But, our capital. at the million we’ve cap will you fewer in And we therefore kind be we of looking million be or of is of going talked we ourselves. can expect and the that we think coming on about for exposure. is impose The a XXX earnings on program capacity. another type of developers down, development overall see there have to if

be maybe fewer a So, may at backfill of could the couple there opportunities. shot them that we’ve pipeline. to the continue year probably we But, throughout a think got

Tom Toomey

bit. that to add I’d a little

environment got that And past out a absent that But the assets. to points you’ve be environment, and loan going rate the three rising years market if start two to down is you’ve to the enough, and to the of and towards think people that NOI down interest in long road. to impact, look around realize get wanting more as I will lending proceeds and the future, availability we’re bring in maturing. loans of assets question start construction experience selling ahead always to and we’re been

so, think recap couple inside buy see years. to volume are deals. deals, the a going next you And of always to the over I more lot of transactional that’s And opportunity

just market. start what we supply So, that. of more are think I would trend, And I I rate a with aspect, higher improving at decreasing And entering ready it call but think natural a the cycle. transaction-driven for this creates environment will progression we’re NOI interest

Operator

of Our next Joseph question the Citigroup. with line from Nick comes

Nick Joseph

revenue I How appreciate West, guess, about your largest the would detailed just regions. terms market of thinking rank commentary. perspective, in But I regional and growth? Mid-Atlantic store a from you Northeast same three XXXX the

Jerry Davis

You Atlantic said the West, Northeast? Mid and

Nick Joseph

Exactly.

Jerry Davis

the definitely and Northeast. would Mid-Atlantic I the West be by followed will the say top, the probably then

York. by Northeast being heavily got You the New weighted

growth be in expectation New revenue that right now X% our would York, range.

going [technical is So, Probably, region regions, went be to think if western to the region to going it’s top. that the to compete other you difficulty] the with I southeastern

Nick Joseph

there meaningful either the decreases your you markets and But, kind there meaningful any be obviously slippage. that deliveries, some of just XXXX increases or are just then, could on average? expecting versus are commentary And

Joseph Fisher

we’ve little The seen tell -- markets a it’s to supply Sunbelt permit at comes biased. permit difficulty] bit think come I more And and little a too down [technical down sorry, this that early bit point.

run come more the we similar. down a through maybe it’s fairly regressions little overall, if there, they imply Sunbelt; So, bit to [Ph]

Operator

with from question Our O’Neill. next the of comes Sandler line Goldfarb Alexander

Alexander Goldfarb

ones you. two Just for quick

exposure biggest [ph] to XX% about have guys you first, market. D.C. your The

a back you that or job that of the to to some that right tremendous do in next other two just size foresee pairing market the contrast it propensity Just of year given to supply guys relative the market’s amount maybe produce to markets? in growth,

Joseph Fisher

doing County, another in overweight as long-term can expect you is what that we Orange average. think versus which our probably similar to view are we I market

bicoastal markets, source We in and have and with the we the can given we markets kind overweight of are to capital are more diversified comfortable platform. gotten now that from some of we start that the XX point to

just up the dispositions two think little bit over lack or wind a through invest you new investment of while right see I So, or three elsewhere. we probably us next years whether

your is So, I thesis think correct.

Alexander Goldfarb

XXXX And at a has XXXX, same for a Do in then, your look than you with is guys produce companies And expecting sort been we guidance guys you ex theme. of the growth better basically Okay. items, is, versus store second are this line recurring average question -- and NOI? yet peers. where FFO

And So, same more one, because what on basis you to a some the store the especially consistent lead of when outperformance the improve? you offsets outperformance then, the to the should FFO? see are the actually MetLife offset we will on the said same -- two, causing store NOI do think JV on that’s

Joseph Fisher

Probably One, mentioned lower MetLife still a it here. factors run couple is doesn’t and of it a rate than you while same prove, at our store.

when pro have our the you two, that’s So, do a combined X% guide. below store you same forma blend

there go look pieces really if really to billion expense that’s say year-over-year. pipeline guidance, from impacts to. we billion, interest up down due $XX development of to half are cap that winding lever that’s million X.X you About the X coming to When at that One, obviously So, speak about look interest to earnings our off. the two if when the growth. you pipeline, development at you you is

expense when causing factored development to off little a issue coming a interest couple pipeline look than perhaps really cap to interest more it’s in So, I at what a go models related up and bit we of think them.

impact Pac related The you that other earning to dilutive my X, of million to as well debt, go over X.X to but with on and it as Harrison. dispositions XXX capital of City that Yulico’s the you capital end fairly goes as deployed $XXX are X.X% funded million year up you and call piece a you with kind some lease-up. there, through question XXX response When in Nick

time, X.X% go is XXX that of fund. outside to X.XX million say year up that from forward, million you or two to and you it effectively X that call As we have let’s accretion that still to over X% $XXX on we pure left fast a have basically

XXXX is a we we into XXXX two think up from XXXX. make and assets, negative So, get for than impact while those when more it we

we start to think forward. development you see additive be more much will fast as So, I

Operator

There back are queue. like no Toomey would closing hand call to further questions comments. to for the I Tom in

Tom Toomey

closing, the brief a given time me Let element. have

strong you state First, second, good very for how about I starting execution make come is very we I doesn’t And out We want our your our interest sure thank if feel and already this it. time strategies, for UDR. across, us. continued about in and to year

more look future. forward we to that, with So, to you in talking the

Operator

your today’s does participation. for you This conclude teleconference. Thank

time may and You wonderful have at disconnect your lines this a day.

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