UDR - Earnings call transcript Q4 2018

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Operator

Greetings and welcome to the UDR’s Fourth Quarter 2018 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.

begin. may You

Chris Van Ens

quarterly UDR’s conference call. Welcome financial to results

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

in will any detailed assumptions, risks statements. duty a reflected We statements A we are no included reasonable any expectations Although update factors in to believe of on forward-looking we and SEC. release do assurance in based the not are discussion press risk forward-looking and that be our undertake give our the can filings our expectations met. with

for Moving to be you after questions follow-ups. ask and turn Management to will limit over I the not will the respectful CEO, now call. Chairman of call questions we question-and-answer available your the time and get answered Toomey. and your call that be Tom on UDR’s that did portion, everyone’s the

Tom Toomey

and Thank conference fourth to quarter welcome call. XXXX UDR’s you, Chris

recap a the UDR’s early the I XXXX; January. call. XXXX me include and during Officer the call results, Q&A deployment cover short Financial high of available capital promotions today Davis, the Chief as Jerry senior senior opportunities; of level Operating portion The announced well topics macro as strategy; with On who will and who Alcock, five our and be will President in Chief today Fisher, executive XXXX outlook; will our Joe are Officer, discuss officer, Harry

top the ride FFO and diversified of our line for thank personally results and aspects a growth, and We XXXX, range. of fundamentals year end quarter would disciplined produced share guidance all wild but us full portfolio per ranges our forces the take a to sector-leading finished Like our stock our again our earnings across same-store adjusted year. XXXX. in twice of best-in-class produced supportive apartment to of great and business strong top First, associates for capital REITs, allowed many allocation advantage. and macroeconomic remained we took like I the all raised during the at operations,

a towards from XXXX, the be advantage economics, to same-store XXXX perspective, end. solid XXXX, the perform option be our similar success with a Should of confident type demographics is economic accompanied encounter expect year. and in level near to relative of tends Second, am large this on and by asset as that subsequent take the backdrop, we to developments fundamental high share again to we setup basis. growth well group better of embedded for opportunities move to expect well stabilization XXXX that bouts we volatility UDR environment, line completed in In the different environment. flow-through I relatively year top like bottom throughout UDR of price purchases we a to is the

and is advances. a advantage disruptive forward. that number as and This the technology driven from strategy overall have we embraces both, see our ahead, of In XXXX. adoption be next iteration the that grow have platform technology fostered benefited driving allocation and set UDR’s being two areas operating we factor. growth to analytics. increasingly changes forth will will a in capital flow key meaningful by years continue any an to Historically, we enhance influenced these of the XXXX, anticipate not cash do in In we of a moving predictive as a our Third, we result that culture would initiatives

deployment. variety will revenue-enhancing platform, variety of a flexibility Next, continue have land continue redevelopment, our sourced Internally us, utilization, opportunities we communities, as include available opportunities, operating investment assets, and a uses we our our showcasing recently options returns compete these developed in but densification sources externally to on in sourced our on and wide to CapEx fixed-price accretions. opportunities strategy of legacy of investing include capital acquisitions. Year-to-date disciplined capital development, allocation capital of have and to we the based risk-adjusted potential in and invested expected DCP uses for XXXX, be

senior and developing over Jerry recognition making and executive and to that, January to again like With XX. of UDR stepping our other XX note, years. part Mike Bob process year. remains moved XX earned, has Mike, the that announced years the hard implementing as the on with ensuring in of side Jerry, leadership to team. that ranks. up a for talent next myself top back I’d priority operating Jerry’s he worked the as all On rest associates operations, is for are thank of with those a put promotions from in a ongoing promotion but handing XXXX execution. more. all the the our platform he are a Dave and is deserving Lacey Andrew, worked president he for for of of many has tasks Mike the Lastly, a Jerry associates that of another of strong have the work of senior more number we day-to-day have been focuses iteration for have not to to I that they rather is signal Matt, forward are all I in great look The

Jerry. over I’ll turn excited into call now are We to carry success this to XXXX. the

Jerry Davis

Thanks, Tom and afternoon good everyone.

Fourth announce quarter XXXX respectively. same-store strong year and and growth were quarter and pleased and were NOI rates rates full results. are X.X% X.X% and year full X.X% operating another revenue growth of We X.X% to

XX.X% turnover to that declined year’s blended quarter, annualized widening points spread XXX has nearly year-over-year that continuation the low X.X%; occupancy and growth trends For driven and XXX of of rate of respectively. be robust averaging controllable the at growth XX.X%; by continue and basis both declined income comparable and X.X%, sector rent basis first, positive above our results purchase to other by home points; lease which leading XX%; move-outs that expense averaged year-over-year by a last period; remain increase,

primary wage assumptions month X.X% macroeconomic the approximately XXX,XXX above outlook of per X%. and This wage that growth XXX,XXX with of national XXXX to our job growth underpin on growth per are job month Moving and respectively. compares XXXX

later will and due taxes potential will same-store not forecast driven community operating contemplated which respectively. or basis not by for power estate available higher bottom overall quality please are markets redevelopment operating continue forecast. as outperform revenue New Next, pool was same-store urban to grow and on impacting are remain as year-over-year expense located full be a community-specific Square, ground-up assumptions and properties XXXX; due A XX but at in preliminary Also last B of full XX this the after valuations year flat eventual non-controllable blended impact for last, versus generally earn-in year being is from ongoing line points, utilize digits NOI to Manhattan Boston points and set follows: higher positioned York NOI pricing forecast expected positively forecast as guidance X(b) the in better to macro year; in initiatives are And check the factored our than Attachment X in. supplement. relatively expected continue are to is in downtown UDR-specific additions remain lease occupancy XXXX; the against Hanover, single high XXX located is XX% suburban our expenses, to same-store exclusion platform are income the assumptions, our of and efficiency Their in and in improvements; rate materially growth pressure in high will to form pool burn-off growth as real in quality by XX delivery revenue note, in to Garrison controllable to our mature our of implementation them XXXX such approximately range; ranges, assets. and slippages should in growth by the and our is we other basis robustly assorted Additions growth XXXX.

growth NOI to at the expense Taken versus compare XXXX. is group to which X.XX%, together, to forecasted growth favorably year peer X% and X.XX% and X.XX% XXXX same-store at revenue full X.XX% growth to X%,

accomplished Next, will be remarks, and line margins in indicated I and years iteration have even in significantly. his the spending expense of of in ensuring my of our as expanded spent proud past XX of to which time XXXX Tom time a in platform, our of the my top growth with our proper great of the over more deal next execution teams operating initiatives, what I’m implementing both XXXX, the our years successes operations ahead. regard

utilizing track devices we level, on the to resident repetitive is and platform we threefold. communities. more diligently internal tasks and the working suite an our of implementing non-customer-facing become of enhanced price operate next The on smart the apartments are and at to phase now? embarking Where forward, Moving by answer available options our centralizing are data we site our efficient outsourcing even self-service better

residents of which to online to as to more are request technologies First, will have service to UDR other pivot than technological-driven demanding rates. similar amount life. day-to-day move XX% rent satisfy UDR such industries, of aspects how increasing demands, all initiatives, our manner, Akin must of serve best they online, business legacy business in with higher our successfully of necessary them in invest with residents’ did more and that their as leasing, payment, to with conduct customers other needs. we companies in and they adopted transformational To have our simplified, penetration a continue interaction that similar what conduct these an

for we primetime. come are Second, long deploy way and have a the generally technologies will ready

light and depending million over switches. benefits of home includes $XX tech although sensors for a and between premiums $XX expenses well. smart the clearly controllable platform occur Over to jobs to place are intend An communities. To-date, rent our will and spend completed another customer we majority detecting out the overall technologies million this next with by culture set, improved we a more time to take And as are perform focused efficiently to address about solutions home pursuits, on third their in invest tech more XXXX, we on allow path. coming down opportunity installations on half success also will of on Smart X,XXX water-leak smart we their remaining the market, wherein thermostats, controlled In operating innovation as years. locks home of us X These start have significant these our the smart continued mobile focusing service. investment will value-add have device, other in in additional smart will years, such installations $XX there expected of our $XX round the approximately to that by improvement. million with $XX XXXX our associates

Some meaningfully envision release. as customers’ an on these improve will resident touring, associates outlined close improved and I satisfaction. next out funded the investments of self-guided our better third-party our successful be adoption represents work has we this and What subject, make firms, Ultimately, company technology technologies in more the that around expand new platform our to we To efficient, resident investments evolution. pricing, customer, face we will app, by highlighted in which this efficient shareholders. a place our one press step the experience our such in margins, more years, remarks improved all and of our UDR workflow past enhanced the all our make greater XX my our of through the through consistently over previously the benefited have of

eye company to confidence operations. ability our of while has consistently off us been not execute that one core promotes which Our innovation, gives rewards our in culture taking and

above end a and same-store on overview X% expectations XXXX, a Orlando, Boston, of range. X% rate the at San quick Tampa, Francisco high forecast Peninsula, to revenue to our market-level Moving Seattle portfolio of growth are for growth Monterey grow the

and All range. collars We our expect to portfolio low Last, rates generate New below other grow the of York lease continues top are in within come pipeline strong development and markets to velocities. to the Baltimore our lines end. forecast

projects therefore, XX% average closed stabilization years physical reaching was away. the stabilization, a still wave current leased of While and, is couple at economic year-end of on

XXX our home, over million in with in We $XXX million quite home, XXXX, in $XXX Wilshire, million Texas; XXX Vitruvian our project Angeles, pleased our during our Addison, XXX and home, are with how project performed Vision on Los $XX project XXX appreciate lease-ups to With Boston; associates West, strong Harrison, the I year. producing I board it to all turn In exceeding the me, closing, and corporate expectations. all that like Joe. thank I’ll that, and in field Tom would another and of opportunity the at provided for our

Joe Fisher

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

came results were guidance ranges. year-over-year $X.XX. high-ends the earnings quarter quarter capital strong adjusted AFFO provided X% and deployment. and previously per share grew fourth and FFO Our accretive of at performance in our FFOA same-store driven and by as Fourth $X.XX lease-up

a Next, supplement. our of $X.XX details I per higher include: positive approximately impact negative guidance impact on is Full comments negative XXXX $X.XX is will FFOA from our a our financing provide guidance, AFFO and several $X.XX associated recent on a XXXX stabilized share can approximately from of our of development, and $X.XX approximately G&A drag high timing be LIBOR midpoint XXXX each of and the activity; $X.XX $X.XX of of to Primary $X.XX. and with level of impact which the of other DCP expectations. Attachment incremental higher of approximately impact XXXX to positive from XX same-store equity inclusive found FFOA transactional in from operations; costs, of year the $X.XX $X.XX $X.XX commercial between drivers JVs higher issuance; $X.XX growth a the

X.XX% his of as X.XX% growth same-store full revenue, XX.X% X.XX% forecasted XXXX remarks, on year to NOI, XX.X%. indicated is to for X% to forecast and Jerry with occupancy Moving expenses X% to X.XX% in for our for

for $X.XX first $X.XX XXXX, quarter the to guidance For and to of AFFO. ranges $X.XX our are $X.XX for FFOA

for submarket million. located Subsequent the during Washington, XX-year-old, D.C. quarter we we community County transactions, Fairfax sold numerous a the Next, $XXX end, of Circle to completed quarter, Towers, XXX-home transactions. in

and Parallel, a out suburban partner’s total Platinum Triangle and in $XXX buy a California First, community JV outlay we on of submarket million X, Seattle debt. our construction a cash purchase in interest off XXX-home options community exercised located the to Anaheim, of equity CityLine located for pay XXX-home

rate Both $XXX our total acquired on FFO investment Our weighted investment. blended million. discount a communities of to a is average were value cap at in market the at and X.X%

entered is our is Penn a closing community New contract the access operational quarter, of neighborhood The Street, we highly to site close million a the DC subject exposure Manhattan Pointe, XXX-home Long York, X for high a has target we to into FFO cap Williamsburg upside Second, old, line via community City L easy in and purchase walkable, Island Last, Xs to market. years G The rate. transaction line a and to first customary a conditions. million. is Leonard our increases in Union located for via $XXX XXX the in development scheduled at Brooklyn, to Market the Washington acquired to the district of has $XX

for of years on Sloan’s first working have we redevelopment site $XX deal And are under large-scale which during vibrant, million. Denver, underway on excited the the a and contract Street, for XXXX We Grove nearly closed originally submarket the quarter we of X been this XXXX site. the in put around about located development Lake

million Regarding was It leased XX% funded. development, our year-end. at pipeline and totaled XX% $XXX

but, development past the assess underwriting. remain our similar to years, disciplined continue to new several in opportunities We

anticipate Over where stabilize liquidity have will with is the next targets. through that years, several our the below likely we at of $XXX million $XXX much in been we X-year keeping our a to cycle, profile million this range, in which pipeline level

today. at No continue accrued additional of we during variety the a of partners. fourth front, see On signed quarter, but the our legacy opportunities and DCP were million return, with stands preferred wide $XXX inclusive new investment, deals to

projects pipeline, $XXX choose Our additional approximately million only to uses guidance we to $XX but deploy. already of that contemplates of million our $XXX we million to in can capacity $XX funding XXXX million have

option decision fixed Coast will more a West and JV we price X purchase the in it have we buy/sell when reminder, our on XXXX. development a window make in As opens

and On the a pipeline, the in-place have at of the table we participation upon remainder end sale. seat back

Big redevelopment. in have smaller-scale Today, includes opportunities variety million We remain each Jerry XXXX are sources redevelopment, Boston in The $XX other his we later $XX XX and at spend Square XXXX. downtown on within competition also of taking located total we properties. bucket. to for of and a million projects we in in with additions uses stabilized Hanover, in guidance DCP As and development, remarks, will indicated place both positioning picture, unit these Garrison located some anticipate start acquisitions. Manhattan capital focused

accretively opportunities forward, Moving with our to be remain meet and will can we will continue pivot best-available advantage flexible long as deployment hurdles to as take and the return risk-adjusted funded. of our

a executed; and well $XXX the deal premium approximately net NAV markets sheet, at common was capital should buyback XX% above Next, opportunities. optionality in balance The a we quarter, million a us for XXXX; of was to we price the incremental in find year, to priced at issued million. consensus during with we regard asset which executed the net later proceeds shares on earlier X.XX provided basis; investment our sales and

earmarked deployment at general XX-year term. issued coupon hedging. the of the after for million and All December secured million near to were of originally effective to are over $XXX X.XX% Also of $XXX mature and October used corporate debt in during we an quarter, proceeds XXXX unsecured debt of prepay purposes. Proceeds of X.XX% the scheduled for

equity we of and quarter result, facility our and in issuance uses net cash flow $X.X debt in excess with measured fund credit hand of a guidance. expected as to paper amount the due XXXX liquidity, our cash a XX% dividends have from cash balance, of coming on end, At commercial nearly minimal our billion. As capacity, of recent was by

value, leverage on un-depreciated value of XX% ventures. inclusive on book XX% was joint consolidated enterprise Our and financial XX%

ventures with actively joint lever down X.Xx. XXXX of X.Xx and RE don’t was or net comfortable consolidated Our average our up credit metrics levels. remain inclusive to from our debt EBITDA to plan was and We

approved X.X%. the open dividend $X.XX X% increase I Q&A. a with as will annualized for XXXX. end that, conjunction year over per up XXXX, share board an yield in approximately of of this Finally, for With release, was Operator? The

Operator

comes Citigroup. Thank you. question. first proceed the [Operator your Our from Joseph line question Please with with of Instructions] Nick

Nick Joseph

was and for year the it how What’s growth XXXX guidance this will what it to last Thanks. year? versus growth contribute in and ancillary revenue same-store then XXXX in much

Jerry Davis

year. year, it this to is and single-digits contribute the into just Jerry. Last Nick, income at XX.X% expecting XX% year or to Hi, came grow high at this under in other came we

we the but expectation based we As again, the it the some increased higher. year contribution points total single-digits it into last to and at not of go And in look point revenue this to be XX it that to the could It’s XXX to be hope you that once go with basis this range made growth. when high to year it’s it’s in expected year, XX think penetration in basis on revenue probably going all XX markets. was

Operator

you. Thank

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

Rich Hill

Hey, Nick’s attractive for line. you FFO growth good in have up have morning on peer-leading same-store past, had same-store growth and it FFO more cover In comment that pretty following growth. revenue looks guys. there, you revenue been the like Maybe but same-store the just least companies at the we has growth,

the your and development, FFO So should lending how I is it think in am we of could you breakdown that curious growth then other what’s maybe sort that? about it is program, driving income, XXXX

Joe Fisher

the phase. to commercial in is contributing $XXX as growth through this had growth as just pipeline into lease-up it joint we obviously, of development remember, number. year-over-year But the going venture Couple year, terms was that we that million really in it year, things Rich, hey, it’s core well Yes, driving what’s on side as Joe. of the last came the

on side. on So, full kind occupancy are we off working load, of expense cap and up the revenue of came but took it interest

our FFO about accretive. So we $X.XX numbers. think there year drag is to probably last This year, it’s run-rate $X.XX about

can add you will if you $X.XX So swing a year-over-year.

do pipeline, terms for us that continuing team In what been accretive at And front to that and in in financing on which lower deploy to well. addition, to if been Harry on that out refi higher, ahead of DCP activity as we able of get lock of capital, that’s have you go then some to tried while the have and you to well. look rates front, has front, prepayment the us and rates tick helped continue on

core driving So you raise well driving each. $X.XX have being it, of and then $X.XX coming activity around as of about overall, $X.XX kind you G&A equity transaction as off the have interest and $X.XX

Rich Hill

Great. Very helpful Thanks, Joe. color.

Operator

you. Thank

comes question from Austin Markets. next with Our your Please proceed question. with Capital Wurschmidt KeyBanc

Austin Wurschmidt

Hey, guys.

we reduce mean, Just touching of many on New recently. to the exposure your City Brooklyn York have acquisition, I seen peers

the are and just confidence the here curious, train exposure. you am curious, supply I I the challenges contrarian the longer And clearly And adding you near-term? of when L the what also guess near-term over fully So shutdown some guess in in we taking seen? it the then view a transaction market underwrote have term I gives given I being guess if you both underwrote you with

Joe Fisher

this Austin, with of is Joe. speak off look market attributes we is overall, able but It to XX and Leonard can Hey, you redevelopment. both some Harry York, be I start the at to might will asset that our a right. Hanover returns, and submarket it are on New the probably then specific

more that We dollars get are looking put to market. work to in

to regular picture, of we see are a off. supply it lagged given the starting has come While late that standpoint from

little X-year for not of us. but supply, probably a higher a bit be will in York New this next terms year trade is

thinking are to next about We the XX years. X

that has the of rent job clearly meaning of to economic years. And getting of employment base just mean of fire rent X reversion XX when market while of growth, the and next over income the more away kind that growth jobs. the the the dampened to focused kind are from we so type population technology We see kind of growth, as as think growth on underlying setup diversifying well drivers diversification at supply growth, and you look

that what on got front. us that’s positive So

he So, Harry, and can over specific. a it I’ll to probably kick talk deal little

Harry Alcock

located downtown just, of think, from new the Brooklyn. though Williamsburg It’s property very glut first in is in neighborhood, even in well Brooklyn this only block residential and Park. really property old. area is an Waterfront, XX-year it L for the occupied is tax fully get property in abated still mentioned put XXXX. this very been offline abatement, property train And difficult X you all, train, supply a we under Harry. the established Williamsburg has agreement, McCarren L when of to The from years, X we North is was fully the years has density Away contracted really X, It’s The be supposed to the Sure, neighborhood. is this a until taken entirely. of the

diligence that During the L you process, still will be train the to due continue saw L news line, there the will still run.

is contemplated underwriting we there L positive. entirely. circumstances should the the So, stopped initial the our aware be well which of train are Today,

Austin Wurschmidt

Great. Thanks, guys.

Operator

Thank you.

of from comes question Scotiabank. with your question. with proceed Please Trujillo next Our the line Trent

Trent Trujillo

Hi members good the promotion. on all team Jerry other morning and congrats, and recent

recently Just you’re you commented there. and attractiveness on about thinking other expand of also your markets, how Philadelphia looking to presence

opportunities to we’re surfaced any the you’ve curious this. conference, off on since act I’m So if NMHC coming

Joe Fisher

looking side, of flow coming deal to about past. that at in the rebuild that. development NMHC, DCP opportunities we’re try but year, to Fairmount, But did DCP plenty last exposure there looking, We continue for have Joe. to It’s we XXXX been a market to so. deal Yes. the talked of It around $XX reasons to we we’ve talked do want some gain is there’s always more of the or just for not we Coming of on the that about out out pipeline. million

We’re as looking well. opportunities at acquisition

put to can longer-term something accretive, think and but then that going there’s opportunity we drive the extent growth, there revenue Jerry platform in we more is as the to on be operational I well. growth that some penetration, find not the the just to spoke think have to for also So, platform lay initiative ability his to to also an that remarks outsized in opening near-term and

looking. are we So,

now for FFO did plan, I created try the consider good transaction the so the how out from moving dispositions figure that we equity of a offering going forward. optionally opportunity of can or we for to about it the some have platform thing instead think drive lot using us around dispositions we to additional just in to December, the growth that

Trent Trujillo

just expected gap of way Okay, performance about the the and XXXX think year? to gap, Can XXXX. if in it B you particular to quality you expect prepared a that follow-up, I in comments, talk you trend during assets mentioned how great. And in that that quick magnitude the outperform you compares maybe a to A

Jerry Davis

In it to probably think is across XXXX, outperformance. I this XXX In XX points our Jerry. portfolio, basis was of

So, I think as year, to it this that materially you would a go roughly expect not be maybe next but magnitude we tighter, same bit different. into

Trent Trujillo

very you it. Appreciate much. Thank

Operator

Thank you.

line next Rob Please Montgomery with of Stevenson question Janney the from comes Scott. Our with proceed question. your

Rob Stevenson

speaking band which afternoon expectations a to that’s you when your were be? XXXX ‘XX revenue for likely widest had now, which Good together year short think range of one ‘XX think guys. and Jerry, team we are likely from putting outcomes of when the your you market you same-store markets if your do for falls and market

Jerry Davis

determines with the the we’re the ones But what of job Probably growth are have really those ones the supply. that looking that largest the heaviest in ranges amounts is markets. ranges at

New that San and really York So, out Seattle, are jump Francisco. X

a in of continuation it expect job a of next Same market be growth. upon a lot but San this to contingent good-performing Seattle year, We Francisco. is is true

New York, be from almost growth it our while last one it’s lower-performing to still revenue expect going be we improved year. basis points markets, XXX of to

So, we’ve was of been deal. the that the Brooklyn attributes saw Joe some encouraged we through in going recently.

was And X(g), on of rate month lease growth you the see X.X%. X%. As actually, the That of we our in was as recent more in rate growth growth there, January, quarter Attachment fourth company supplement at lease in rent compares new average X.X%. new look to a

on LA, is Rey. bit Marina say, assets X I our for of market located none side X but growth, a have of same-store little So, would LA. our in we’re just encouraged are could are then cognizant supply, change. significant not of fourth it’s it amounts much And new that by today, the has backyard, job always New you same-store is risk of because in dependent on del we that York the us

So, the little is portfolio, that at was guess, downside goes our a in and not coming is Bellevue concessions, when kind Seattle. at one, look crazy at Bellevue is new affect like have us supply. it there going development that just Bellevue to the could of I if heavily We you that it’s and is – if this located West opinion, on while us. I more a lease-up conventional that concentration, feel have Seattle looking much probably to can surprise

going feel downtown, supply us. do concessionary to it from or you be heavy If problems could come is Redmond both affect where

Rob Stevenson

Thanks Okay. guys.

Jerry Davis

Sure.

Operator

you. Thank

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

Rich Hightower

you? Hi, are guys. How

Jerry Davis

Rich. Hey,

Rich Hightower

and among exactly? $XX technology Good. I to And on smart a that premium pick potential available do you $XX UDR rent how remarks. technology next down going a to investment the quick in given investment as the plethora guys you to the years measure home probably you get and prepared comes just am how described options about about you to you of you think and I the curious am did that described, over obsolescence new vendors how company several question the the do also, think pike? here how like then

Jerry Davis

think return, on in about IRR about have there based home a measure life tell X.X-year single side. at this XX% we He we the the I will on most is said lot has predominantly look and of We other the on Yes, that in with company family XX% Rich, it’s vendors a is I also you success as participated you Jerry. lot industry. the in. one remarks to and look we historically with did X, my the a return installations When at it’s of we expense a benefits investment. confidence

as key our residents. well teams locks, to and just as high-rises can One we of leak in down as out have these don’t as electronic having because to come to cuts service well maintenance on locks, lockouts do requests And think time know, and early We overtime it garden out saves well the is for responding change water be it in drives also of features as as damage detectors. expensive, you this R&M. by cost very as catching insurance having communities, so down it

$XX When there’s the side, So, expense on bit to quite it to premium, going we’re you add look the that $XX too. a of to rent. at the

rents be I what to So, tell as the residents to that getting in after and installed was our we’re positive. able ensure these. The almost of before from to said benefit. the been very I in my that response market opening X,XXX installation you, will spread measure compared we’ve has can we remarks,

apartments of think Amazon into help them things they’re system lot that work. Echoes to the already in I like it make a their tying had

especially on factors, able open I friends, see they they coming mobile to locks, the their like when the remotely from to to have think sitters, be houses. their them device that convenience people dog

or I get have school, kids the when get general, parents our that that, notification in a you parents think door opens. school-age single for from home that

that we X.X to have it a least is calmness gives the to but technology think So, a you that it’s there We think and should benefit technology that has years change, us. realize X, cutting of your before for we for significant We reinvest. home. child big benefit edge last kind we returned at does Overall, is this resident. think

Rich Hightower

Okay. No, that’s helpful color.

Let another me question. ask

in has I sort being at there a So can well. other we Philly, peers the I to want as fairly guys according markets markers consensus playbook, as you markets might think, a has But that for select other analytics your maybe that rigorous the contrarian side play. active And you future. give well in a of at and and data in I as investment that far differ? market to of described how there, is sort don’t on are your York as out methodology UDR pursuit call one been, forefront, from you the public you want you well given and if to market I perspective your the have it screened New contrarian what be of the to think versus screen where don’t today view but guys and tell, but know least away that might among was

Joe Fisher

are and capital to Yes. trying actively other that looking markets Hey, deploy definitely Rich. There we are into. in

XX probably as labors. forward think those the next call actions see XX, the fruit I So, our you it, look of months, over the, to you’ll

tax-specific always sell as trying where screen From to a mind, you’ll see markets well that yes, that CapEx asset. sourcing not you may to reasons well go. us. want may as submarket-specific, I standpoint, asset-specific, But there’s So, think we’re as there’s for keep in an

is little come across a and lot factor, focusing the are but it, whereas more of our say, a a board. personnel factors portstrat work. strategy the We’ll of other capital on into I’d lot probably that deployment So, disposition the bit less a is resources focused resources use there as still focused it

Rich Hightower

Joe. Thanks, Okay.

Operator

Thank you.

of with Our from America. proceed Spector the question. next line question your Please Jeff of with Bank comes

Jeff Spector

afternoon. you. Thank Good

remains we with right all are we I just macro environment incoming the if whether the getting on that I macro. calls, again supportive Tom and questions say now, your remains in are traffic maybe good? of confirm to From markets, macro what Just web from could showing you heard it’s are just the that guess macro, the indicators lots start stable, seeing,

Jerry Davis

income would you country total our it is income. this look general over the screening total when for I Yes, at at is than Jerry. in higher you, X% markets, growth for tell it’s

We per wage of markets. coming see growth. do and job up in we built see XXX,XXX but plan to probably have our in somewhat at creation do some expect When job how an about expectations, budget month, we we jobs look down increase our you growth

I lot in the don’t So, different a seeing you’ve on whole we’re Then that. think peer side, got our set. supply

think market. next slight we increase by it a supply market in year and see I overall, deviates

Joe Fisher

Joe. allocation, that thoughts Jeff, front. is to it this relates a Maybe on Hey, too, couple capital things just other of as

where cycle. two as kind we a development well of in overly see I are the or from intent been the you seen this half that a cycle you discipline it’s one, to we that being byproduct or that ago. Those was ago, the started in our years a started options or of any was that by timing macroeconomic land fruition. do that underwriting quarter back around to adjusted have of pipeline first have XXXX roughly couple Denver to from over most from we Union standpoint year seen away that in of activity Market you X risk-on bullish side backdrops, of sense. Wolff take lot to a positive rebuild of The It’s have of started things. want a that, coming just on don’t really the us as While out

a rate. So, that give simply there as activity head grow of capital we some at is we the offering just deals kind that can to equity a once the talked of coming out about optionality of think about well this supports byproduct to a these us lot and deploy of as of timing go the where that

that macro are So, our bullish and recent don’t overly think on and comments to we take we risk-on posture. are a switching to on activity are going that where the we

Jerry Davis

in we side, being comparable year. when Jeff, rate it and than on you basis last that said, was at about new was January, is were new which growth look the have X.X%, higher lease fourth at it we points XXX what to books. And the lease got January in it’s quarter, in the

physical you’ve So, occupancy. got of on top XX.X% that

year. So, good are we to off start this a

Jeff Spector

doing I rest remain peers front? expenses Can job check. referring to on helpful Great, than thanks. of you real on for using to expenses, expense in you are the said analytics the know course pressure you comments. because continue one seem will are better taxes question just that overall controls, confirm you And All then but that you the predictive estate your a that to other very be

Jerry Davis

not really predictive utilizing are we analytics. the No,

which what everything real So, done our X.X%. taxes quarter, I estate platform get is are fourth remarks. except the think when you we’re we a expense seen really discussed side, prepared you’ve I And down look insurance, us operating how at start in the that the on on think and this in we’ve controllable expenses,

in of going see to efficiently good of cost pieces more repairs a the more total that’s really us a function pretty but personnel. and to an And decrease business You’re increase in structure. outsourcing drive maintenance our down

so what efficient. think a certain become to to more related of functions I outsourcing So, we’ve done lot and centralization far of is

I marketing analytics use improved some on the side. think of we’ve the we

And very other on of we’ve, the you’re tools. doing utility think side, those see good lighting a and putting I think done energy-efficient more I in to job continue.

in estate next And year. pressures drive it So expenses those think year, we’re our in controllable going portfolio, flat developments, help on platform is check, or from so still to more as down it’s somewhat when our I us to future, creation. it we XXXX. probably while to it’s existing are whether what we a as our you to and the going come flow-through those it’s make expectation give investments stay close platform, acquisitions through But look was better more operating out to but other value expecting down this looking importantly, we’re real margin continually going new that will this see into

Jeff Spector

Great. Thank you.

Jerry Davis

Sure.

Operator

Thank you.

from comes the Our Guinee Please with proceed Stifel. with of next question line John question. your

John Guinee

unit wonderful bit the spend. for I you about consolidated the a $X,XXX Great. and CapEx trying Attachment down Thank am job. look more at you little a If homes. drill on at are to I just capitalized XX, expenditures on

a already, the if you and of tech unit spend at And redevelopment, is spend we that count of your expect then few major look maybe run but which you add dollars how project, redevelopment? per to what’s well next spend spend for expect isn’t tech have as or to just adding should redevelopment, overhaul rate on to you If as whole the you to much good your years? a unit technology a

Joe Fisher

Joe. is this John, Hey,

enhancing, Just on the return not for take as does these $X,XXX, new account that platform. into spends web the that

that So, separately this, the has for the spend from on categorized to will provide we’ll and that be guidance. that referred spend front Jerry technology

the Attachment to overall technology of year. as on spend as back the referred That’s spend for smart platform see million this the he can where well XX we to. for both $XX $XX spend You that million provide guidance home

really we’re CapEx is number separate be trying for that What to be. recurring Attachment to the required so should that’s you NOI, on recurring XX to the going the this. what drive from that’s So show business

John Guinee

million million, And $XX redevelopment, units to properties? redevelop million got have you units redeveloping you that? $XX any $XX then how on are And you million many $XX when adding on existing to is spend

Joe Fisher

opportunities level can Jerry It’s get the Harry $XX not to buckets try come those couple a probably into different every but or there as a million, opportunity-dependent, we go each some yes, million of and along. to the $XX it’s is year. that details, set there to in of and Yes,

this multiyear case, be that’ll Hanover a in in spend. this, we Garrison. is as about That So, talked well but as embedded

cetera. over drag it’ll those going of the total as And forward deals what dates, about we’ll of spend a are, So, more et expectations the disclosure provide completion years. couple start

things garage additions, those products of advantage going or creative do to type addition space, amenities opportunities, unit we’re to underutilized densification projects, larger taking to or so space. In underutilized to see that – take of you’re trying

add so embedded into the will it We’re spend projects, in as well. that be units trying to

John Guinee

very you Great. Thank much.

Operator

you. Thank

next Pawlowski comes proceed with with the from your Our John of line Green question Please question. Street Advisors.

John Pawlowski

for Thanks. Jerry same-store, to revenue thanks changes, to and Garrison and impact for additions NOI ‘XX? the could impact Hanover comments XX all and you provide net subtractions same-store same-store the on in

Jerry Davis

any effect there it That’s weren’t you it. many, pretty is. really really When much and it the other what didn’t at additions have looked on

John Pawlowski

rates outside in California the ‘XX? on good tax property ‘XX pressure on expecting property of Okay. you most visibility, are there And New versus and then taxes where pretty is regions what York growth

Jerry Davis

the we be Florida, to Seattle see ones pressure would and pressure that same is that There would the heaviest be are the points. Texas, probably going

John Pawlowski

if try to metrics, Alright. real, try get to credit down? the costs And understand your rating improved point to you for would becomes last with GSE you more one any get at to me, I Joe, credit reform unsecured are comfortable

Joe Fisher

rating as I in our and a competitive been the John. GSE desire cost reform rating of had probably we’ve to credit front Hey, traditionally that independent up very as unsecured and on move each that capital would other honestly borrower a, say BBB+. and are aspect to credit

that. have are make we have a dilution away, we’ve not do a multiple we’d as tried that upgrade when trying multiple whole different if credit And a reform to sources to do of analysis of date, to you profile. think if deleveraging and/or capital. to company, to public to terms due And look been said, we do of and what rating, with our what up the like through of gone impaired to that give lot tend been important and GSEs to in considerations as go of you we our I like don’t able the would has on have upgrading us we be sense think at so, the offset

GSEs. you probably asset look market, In any our is which we which quality from private are more private is higher the base, when public base, as at impact the a asset addition, insulated of typically relative as market not levered a in the company to

John Pawlowski

you. thank Okay,

Operator

Thank you.

question comes next Jefferies. your Our from line the Tayo of Please Okusanya question. with with proceed

Tayo Okusanya

about that, thinking big bit and discounts fairly am things been stabilization? you wondering I what’s I economic you you stabilization, Most but difference things little Hi, are just close was being answered, A of there earlier questions that they hit you have it like before made development have afternoon. quickly. thought am my that, and just but surprised stabilization. follow-up. is yes, I come good talking about had economic talk I a between about on comment I physical one kind what could of off about to will called stabilization a like several physical the quick time that would be years

Jerry Davis

lease-up, start concession. you’re or Jerry, to want this from of Well, jump in is to lease Joe you stabilization, and up months month, the you anywhere first that When may X.X physical of then Harry. you frequently, complete X project, about obviously, maybe But think year throughout. offering

You cost time that frame. also have marketing during extensive

but not stable. stable, physically economically that’s So

for As spend that’s the yield. get away getting next year, typically, of comes start more the you the dramatically marketing and down go when that that or next to away part most the go turn concessions leases, full stabilized you of

Tayo Okusanya

enough. fair you. that’s Thank Okay,

Jerry Davis

Tayo. Thanks,

Operator

Thank you.

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

Alexander Goldfarb

Hey, morning out there. good

two Just questions.

and year. Hanover this the about those of properties And pool, you match your there where think but just you know you JV those where just pushing assets rents, spoke trends ago, am they performance the been First, curious will was that same can high-end are underperform? it continue in about NOI MetLife, is few they positioned think the is that they levels specific was a to you the has maybe or start are, same-store the I the the just last same-store problem or a of will store on to talk rent and that I about do they something KFC being years overall I guess negative market

Jerry Davis

Yes.

A+ would same-store predominantly than call least and think urban our or lower going pool X% in X% is in with be, is to are so bps it they areas XXXX XXX be that’s what products. revenue I expectation to at high about in because probably our

competing going you real year too, X% be have NOI they in new portfolio The predominantly tax are to range. more than should estate So, to average supply. the but expense elevated is due more range against somewhere are to X% more to our this growth next that, the affecting positive in X% that issues X%

they stores. So, not well will do as our as same

Alexander Goldfarb

keeping or about thinking you those to are term those Jerry, longer are future assets sell?

Jerry Davis

then in. I these will jump start guys can

this just think through as issue supply I is go absorption. temporary we a

the submarkets. been more these We last like the locations new product a but supply or urban we in those time the where into have year time it’s cycle going and two, for – assets. it like has type. come the just the It’s through We

us want making assets. flee not it’s those So, to

Alexander Goldfarb

not it of a Okay. measures, And That like number about And the markets? this then are something here all looks Journal these guys observe? there’s rent could view, always underwriting rent-stabilized. is on that thoughts the think it’s markets apartments, that they in mix? normal with and especially municipality as including of course? are the you underwriting New this your your states stuff, in are proposals, the contemplating target here highlighted affecting part way time, Or of shifting in time, proposals, just this something York? you’ve is as the operated over you Or these Wall in is that today York. different question, on Street New of BX just some What all second Article And

Joe Fisher

we the is off, that exist when out well, this there, national it from to Alex, basis, think we I York Joe. about would say, as a issues first applies affordability and New that rents rents new on the new appropriate or get forward to to is believe compression try or not path to supply regulations caps continue affordability further probably there. and out on

we of point of today. issue given or New our work that’s desire can there collectively issue we York, stabilization to better the out get hopefully, to get but all as where place, be to in So kind that’s rent independent constituents and control a a rent

that thinking agree seen of We from stabilization there, other have at commentary Salazar. going target I really a at lot as a we’ve some But most rhetoric and forward. time about looking this, the out Julia spent this the market-wide talks, out of piece. the through rent comments going out go, the could regulation potentially think mainly well there rhetoric past where that’s back looking is more as there attempts to of understand of do I couple rent-stabilized at

market XX% are: we overall, keep in which a when the of And New units, control. look to XX% at is where a couple so, facts, that’s is the that, at when important effectively small and of of portion market-based kind York rent rent-stabilized you it’s other look mind

portfolio, acquisition, market Leonard our for For pro rent-stabilized. XX% rate the and forma about be XX% we’ll

that the benefit side, will I anything happens stand do the the think extent to it rate. to rent-stabilized So, market on

forward So, rent just supply probably we a should better little bit. see better growth, off back will growth rent valuations, given

with something probably return a and better CapEx, you economic or The the there whether other for have thing do volatility legal of rents, lower stabilized oversight likely stabilized rent rent preferential return. still rents, a happens piece,

Leonard went we are could draconian about. it’s of are it case to forward a underwriting probability of factored So, with a on, that thinking focused we We think it scenario worst and made try what the moving for we something be lot happening, downside something into given we very sense deal. to thought still if a about that

Alexander Goldfarb

you thank Joe. Okay, Helpful.

Operator

Thank you.

proceed the Please question your Goel next Associates. with of Zelman comes question. with from Our line Hardik &

Hardik Goel

for the question. on Hey, just in progress what I we side can future. actually the about you’ve ask guys. taking expense and expect you wanted my the made to Thanks

Do Just Jerry, over with lines, personnel the per different and you able how about items. with a structure cost employees or across will see talked the that look side the more the those to building more bit be time little color repair things Are maintenance efficient some that? help well. on investments platform you the side? as the or you like As number more on of you

Jerry Davis

you what said. exactly it’s Yes,

think R&M the going you’re I between blend personnel. and to see

either as be as the year, we able more I negative, to on continually structure well think workflow. run both this we’re to going the at efficiency, create cost just like slightly did flat to we as

R&M as but probably look to personnel you but So, you’re year, a even bit up going wage though of you’re little our going inch costs plus next would see higher, markets going expense. I have to forward to across you’re guess come to see X inflation down,

Our lower personnel are to expectation And is probably opportunities than or to I be the a natural We’ll going more in centralize. look most of and efficient attrition. think our outsource you come for competitors. see

Hardik Goel

the go is of that think other from and you line, kind utilities for utilities newer the amenitized we on product least do technology especially potential with through for is these investments common reduce you potential as those there spaces and costs manage amenitized or sensors Also a better? becoming as there more buildings at to

Jerry Davis

Absolutely.

solar, are that. business on But all our at at kinds opportunities we that and hallways we well there impact think are you within that improvement look fixtures, company. again room look forward at doesn’t am you or sure in structure gas of will the definitely with I cost we when when common or as move any our the think other for at I as we I that have are temperatures residents. common reduce electric And light not area, LED to the of looking looking areas, if

Hardik Goel

so Got it. much. Thanks helpful. That’s very

Jerry Davis

Sure.

Operator

you. Thank

Our question the comes from Haendel line of next St.

question. proceed Juste Please your with Mizuho. with

Haendel St. Juste

I if is? part but of estate missed your XXXX mention specifically expense And outlook tax in did same-store this, real guess Hey, there. I embedded range as the years how an the tax that and how I sorry expect you am growth abatement of your how from assumption to or be? portfolio of these many much pressures XXX-a headwind a in York abatements specifically tax embedded approximately New we long is should what

Joe Fisher

next estate range. come tax it’s think Hey, X% to X% real to got in we Haendel, in year, probably the somewhere for

specific XX If too kind The you in point already, you for what’s driving to we at range going have Jerry couple really XX View but $XXX impact. basis that redevelopment Wall in of expand I just of the same-store will that, a pool that with XX. markets real to mentioned and look XXX from year. the impact $XXX,XXX million over taxes, forward about which next estate on are It’s of type a impact XXX,

redevelopment of In estate at addition, and valuations the XX, when tax flowing big years several you back, look that a was X-year impact through that the basis. average into completed View real therefore on the is the

And XXX call points or real so on basis it has another estate taxes so that us as one cost well.

X.X at basis that our probably So true number kind unadjusted if you of to more of midpoint, are kind is XXX XXX range. in point growth

Haendel St. Juste

how approximately? curve, we of at the should this be Okay, appreciate that. headwind abatement long headwind to are we And tax like a expect sounds then the it approximately front-end

Joe Fisher

only platform, Hanover. two have and Wall XX Yes, across that’s really we XX projects, the XXX large then

in As we this peak we in I actually $X.X The the will million, over have be impact XXXX $X.X last year, then think about year past, million. about talked collective million. at it about out was and $X just

and up there. headwind are will we coming So into down kind it then ramping actually XXX the of start from

Harry Alcock

new were but bleed Haendel is Harry, fully Brooklyn, then a if tax has this abated there you, if until It’s you a asking and XXXX am acquisition that not in. abatement. I about XX-year the is And sure X-year in

Haendel St. Juste

wrong, maybe then been in how but opportunity pretty sounds more an be that deceleration has we to am is will that this forward and going much could levers be It you on incremental ancillary opportunity a maybe beyond technology next I thoughts the perhaps And on out I the over year few I from like income that wane guess into years? you curious you. on can follow-up your pull much revenue, can the the share Thank looking maybe maxed in-home additional are revenue infer and helpful. perhaps that’s the some am the that should of you Okay, the there. ancillary

Jerry Davis

look look as low year, Haendel. of to ancillary the and it rentals. furnished the of growth technology the high got XX Sure, you this added at success at parking although call short-term this we again income year And like ancillary as This that the that be it it’s at going XX continuation go rent surprised be said in our the year it, be would well back when it’s impact last I to say grew expect wouldn’t won’t growth revenue XX.X%. points the into you I will smart income probably if we to when but of on as depending to double-digits up more of basis homes, be single-digits, rents. But it

are multiples are rents we that what growing. at growing above So still

on So, while to and Last out businesses. renting our modest still think are bit a common $X.X a during be a is daytime platform West We least year to at it’s contribution to we of that to last year it’s and think year, going the expect we that in Coast underutilized contributor. it’s or started was moving started eastward. that million. call traction this are expected have a this out we especially slowing year that some hours, it third-parties frequently, double it to it’s grow a slow to that getting strong areas going we avenue bit, other One

that And So income to real our I our I will grow. for avenues outside other of estate through you of units. grow we core apartment constantly think tell potential looking there are is for additional to pieces

are So, next to of while we those reload. are couple confident years, the am I items continue will the on today, the over list that

Haendel St. Juste

Great. that. Thank you for

Operator

Thank you.

Daniel your of Bernstein One. Please Capital Our the with next proceed question. from with comes question line

Daniel Bernstein

the Hi, what into co-working of how those over incorporating wanted couple a good and on model so At business co-living, that are I of to there NMHC, years? afternoon. and was just you next have lot new talk about your understand issues maybe you

Jerry Davis

we into something talked do continue and necessary, move it’s DCP one looked have where co-living see in had side felt talk was study. haven’t at was individuals certain To-date, I well when of something actually want co-living the going we Yes, haven’t progress reasons something pressures I to to some where it is We social are and anything. think a about they situations our we little but may bit that you we it have about look it, of space. to will you as think to people that that co-living. as really could deals Philadelphia economic implemented occupancy Harry

developments will this we being apartment managing by deal, this. think existing and we built the I are they co-living of seeing up lease new And in their actually investor able for and converted us some watch of So be cons it not the as benefits units. examples just actually an are and and that to do being see

Harry, So you anything add? would

Harry Alcock

within a kind Yes, the about It’s little the are to units near Philly. allocated DCP accommodate these. he area separate of of plus deal within in co-living is they the about Temple talking created building, is University, the XX% XXX and to property

over how XX see as plays that XX completes lease-up. will months through we developer construction the and So to out next the go we

Daniel Bernstein

Okay.

playing – your it’s within it, properties? of role not yet at not are So the construct you huge looking a it’s if

Jerry Davis

it’s are it is now, not right we role say, playing would I screening. something but any

Daniel Bernstein

start are XXX,XXX look at like if so? guidance Okay. – to contemplating? the to occupancy there economy Predicting hold real look impact not was you jobs weather, the to One growth if going job a trying range jobs rate the quick the month, month, occupancy seeing a growth but to at place where out more some job within is last back month – doesn’t on some I you there historically, the And you XX,XXX predicting XXX,XXX is probably if a question cycles, am I economic and your could. growth. you or understand of I Is some

Joe Fisher

Yes. Hi, Dan.

up. bottom down kind we top overall of process, budgeting when from a kind of go approach two-legged the it’s through and So dual

of really the top standpoint. have do kind demand an how what they competitive well really there in say the And of based in we rent sure terms they it supply, type you if come because are jobs one-to-one of down their ranges that and is submarket it up kind and from So those on etcetera. micro-oriented see with isn’t to of and so down, see comfortable the with what revenue supply around trends as easy field what to as forecasts it, from that what and overall them then within we any get the but course overlay midpoint. side can on here what’s adds, feel bottom-up XX,XXX work is you of going So relationship with that of we the does it, We refining recent demand is make coming a that’s market? off

it really we and case, up So don’t math is takes where have can to the XXX,XXX to high-end say of went we down but goes. if where you kind that we is XXX,XXX here base

Daniel Bernstein

Okay. Very good.

Operator

are Thank queue. CEO, remarks. to the over questions you. Toomey and would like I in There turn back call Mr. for closing no the further to Chairman

Tom Toomey

up. and quick wrap Thank you a

we I work our days It’s to very a time day. for again they the again And like in be we continue view year. anticipate you thank good which a in the rewarding associates recap to started that, UDR. of care. and XX XXXX, all similar And put to which very have for been hard the well start. Take First, off to to very year call your would our as are for a of with as a and XXXX. off with us great all was into do good interest We XXXX, every thank

Operator

This concludes teleconference. you. today’s Thank

time. have wonderful You you your a may for disconnect lines day. at Thank your and this participation

UDR (UDR) 14 Feb 192018 Q4 Earnings call transcript