- Earnings call transcript Q3 2022

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Operator

Greetings and welcome to UDR’s Third Quarter 2022 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Senior Director of Investor Relations, Trent Trujillo. Thank you.

You may begin.

Trent Trujillo

Welcome to UDR’s quarterly financial results conference call.

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

everyone’s of assumptions, follow-up. factors Q&A time will Tom expectations no statements. plus I that limit assurance give not When detailed to turn the believe to forward-looking update one will be we your to press call answered questions included can CEO, A in any Management during release and any risk We get a the session Chairman UDR’s statements question-and-answer ask undertake the in that of with our we your a we available expectations we risks are not and get Toomey. in questions for our the to today. Although our forward-looking duty portion, reflected do based after are be the met. did call discussion on the and over reasonable now and you that SEC. respectful filings will be

Tom Toomey

higher. residents, Financial the during Andrew to same-store Senior almost of welcome we also the acquisitions. Joe you, guidance to per results. Trent from multifamily same-store health growth will XX% and continue translated in capture Chief growth Employment and continue XXXX near-term the operating has our in In not Chris resiliency. accretion today exceptional Presenting regulatory nearly our conference Cash the drove has following: of third growth improve. this XXXX demonstrate Fisher, These robust. available XX% and been short, healthy sequential are expectations shown financial to And portfolio call. Concessions XX% raise nonexistent is versus multifamily. which the stabilizing. was To-date, a our Main third Thank remains healthy. To X%; discuss third call. housing of and options the who include begin, resident deteriorated. supply These and Traffic into affordable continues results levels we Rent-to-income collections outlook see our Mike FFOA nearly NOI strong. has grew almost year-over-year, results for and with remained quarter the discuss Officers, the combined environment. call Senior President resiliency. Officer, detail. to will Q&A environment incoming additional and growth reasonable year-over-year continue Wage UDR’s revenue Highlights and of Van factors, revenue in of to and year, favorable Lacy; be President quarter new Vice a Street on will are further share me of positive with across Cantor; Ens and portion has relative alternative Operations, Mike create Joe our are incredible

based to control. UDR we upon to right Moving whatever on. what is environment we All-in, face we know well can what continue macro equipped believe and now we manage

First, our customer remains financially sound.

point is Second, X% at effectively as roughly locked jump-off earn-in revenue our is point. this XXXX been our has never same-store for in better

to macro growth concerns And structure. and FFOA remains elevated turnover first, every liquid structure. the We most our capacity. Thus billion are trending $X sheet given our and Specific to in over business where these and innovation could as of our on the aware challenges pass and maintenance include: portion Two the is of prior Third, our across cost. headwinds on expense XXXX. Fourth, continue of environment elevated costs share order areas face impact relatively residents moving over with fully said, short was repair a to we That forward. growth. tailwinds continued growing been our rate our last, feeling per lease-ups able higher lease focus in XX-month the and highlight balance inflation. become our inflation should our to to development enhance have margin quarter, are culture of third like business like far, elevated to standard we anticipated which in rental continue growth, expense resulted push we highly

the trade better like ours. roll a XXXX at XX% rent for margin cost second, value building expense is And our a creating short-term the of of However, capital. pressures business of cost

increased capital since materially first cost quarter. Our has the of

to pivoted opportunistic a back we such, and strategy growth. external pared capital-light As

planned fully next risk X balance rate the debt remains less years, Our consolidated over with and X% is sheet capital capable interest all maturing minimal. of than our uses of supporting

Moving and on report ESG on, leader our position a rating ESG from global of X-star we as a our to recognized build publication ESG the GRESB, the with highest possible. fourth annual continue designation

was that of score our achievement optimistic be XX prospects. history remain UDR should survey I an and all closing, stakeholders of. UDR’s future In proud highest in GRESB the on Our

with of highly culture combined We performance fosters and collaboration that experienced of the record our talented team a with mindsets. innovation have track environment, irrespective a economic

We to and for To associates, the you turn With Mike. will that will over that, continue call I fellow advance gratitude express UDR all our my I industry. my to do. deepest

Mike Lacy

XX.X%. points. firmly This locked earned traded also roll blended of but rate historical to We be XXX remained nominal by amount our of occupancy X% demand growth, and basis a at these same-store Tom. to our of and strong at and quarter our lease the growth achieve approximately XXX expected. points revenue X.X% results Thanks, this XXXX in first, compared included: than growth XXXX rental This revenue our of rate least norms in second of XXX growth basis. rent earning. NOI acceleration a will To improved more straight-line components an highest above year-over-year same-store history year-over-year better our effective drivers and was and XX.X% drove were results sequential respectively of and basis XX.X% begin, on Key

residents of in residents Second, increasingly our rent and our our the and debt to rates portfolio Collection receivable paying continued improved reduced delinquent on in time. sequentially long-term bad are the decline, reserve accounts which third quarter in-place balances. number

minimis ratios history with up. portfolio-wide we remains And strong across XX% a XX% to is last, seen push portfolio, evidence traffic less than versus consistent and apartment approximately Employment and growth in submarkets remain average Fourth, expensive to de choosing being less growth. remain exceptions typical wage and Boston. due home to low to-date the have Third, rate double X weeks Washington, an us renting X no specific with Fifth, are range. and owning D.C. above concessions San allowing rates, pre-COVID. rising Francisco, in rent-to-income residents to to continue on our applications seasonal XX% of mortgage level, of expensive

During a the lower purchase third is have home. total, we only level to remains so believe apartments quarter, compared demand XX% In to is residents broad-based. for the we X% seen ago. a lowest of moved out This that did and year

thus continue forward we see monitor residents distress across health resilient our residents signs any our and yet financial demand U.S. We proven have But in meaningful the of to our the for our to and portfolio. cracks far consumer have indicators. of potential

basis. on expenses a Moving X.X% year-over-year on expenses, to rose quarterly same-store

continues business. higher than we While margin as margin expand plus usual, this operate our XX% is to a

was not. was expense this our growth remainder while control, the of in Some

renewal rent which than basis for in in re-leased unit more the to rate was a our Positively, continue what at control? average we these year First, growth, resulted rate above XXX our homes push average points XXX higher We effective ago. turns quarter. XX% or

growth increased. A&M In the these addition, months. over not non-payers. our million, during to regained and growth Combined, made which quarter as long-term R&M our have in by same-store $X.X we trades, expense should year-over-year approximately homes million generate incremental negatively revenue costs Had contributed energy also would X.X%. XXX been impacted Utilities $X approximately next XX we from the this above-trend

However, by typically same-store residents for XX% reimbursed approximately line of NOI meaningfully this item, as not are impacted. was we

real Texas and us, where expenses, due small also Pressure over Next, valuations City, continues. New comprise and all burn-off grew which higher for Florida consisted Insurance, increased of where increased a dramatically estate claims. XX% control. XXX premiums Higher we abatement the is to our relatively what York and of which by taxes, of X%. expense points cannot

Looking drive rate to ahead saw of return Labor seasonality a after rents strategy the with drove quarter, market to in pricing capture Day. we fourth to This growth of typical lease. our the loss quicker factor, combined our

rate to X% lease growth growth comprised of expected blended approximately renewals October, to XX%. and For of X.X% X% be lease roughly new X%, of is rate to

For quarter, we deceleration the to comps. X% growth X% to with year-over-year to average lease toughening blended sequential expect the due rate fourth

We yesterday. basis the revenue growth increase line increased our or year basis now and we together, XXXX guidance points and XX XXXX achieve the NOI in conjunction to third on XX.X% our midpoint full for and XX and same-store XX.X% this straight release points of a with Taken basis revenue ranges at respectively. expect NOI of an same-store time year

traditional UDR reduce and which project versus new the NOI $XX be continuing a These could are equipment, scope launching expected made to are incremental and will smart seamless once revenue connectivity, improve building of over believe of on residents capital the out $XX include: XXX in control expense in economics provides energy We versus NOI XXXX. Initiatives to building-wide with the that million deals. has to innovation peers. X than first, for expanding year controllable point roughly at incremental generate drive by by advantage increasingly operating more million WiFi a move-in rolled margin bulk controls. over and whole forward basis Scope the further emissions. and control enhanced focused hubs we setup intent our more allows consumption on investment fully in initiative end upside underway Finally, improved versus generate this XXXX

resident close faster Second, optimize pricing. technology leads leasing real-time prospects, and marketing track better qualified activities, enhance leads leveraging and and advanced generate to virtual leases

storage are sell over to simplifying approach, associate XX offering through our dedicated helps but to XX repair services days a expanding scheduling round-the-clock efforts and Hurricane should especially turn teams vacant disasters, reduce assess renters safeguard enhanced management have thanks tool protect Ian XX% our Joe. virtually for teams simultaneously our turn conducted of out onsite our replace share And goes and per decision. personnel without while move-in XX in unpredictable. whereby properties communities to wallet. first magnitude improving our Last, margin reduce increasing normal operate Fourth, I tools, from inflationary the Third, resident we This improves management we our Today, the improving activities better number managed other process, and insurance, process Natural our call vacant days months. of fifth, dynamic costs. special which your initiatives, vendor versus by dedication, to a able communities, all Tampa to the to ongoing income while parking and asset return next the such leasing number as today through the order thereby our of homes apartment the mitigate and over work levels. Orlando. to will of to And their those pre-COVID of applaud residents to are I And our operations. now, increased better especially

Joe Fisher

will the balance Mike. you, transactions and update. capital I of topics results a year in XXXX, liquidity third for cover today quarter Thank outlook updated and activity include a and our summary full our markets sheet The recent

strong range high and share guidance FFO accretion and quarter previously further from XXXX revenue adjusted was third same-store the our our $X.XX of acquisitions. achieved Our end as by provided per driven of growth

and increase the growth, partially FFOA and a year now continued year year. fourth a prior by by anticipate the G&A this our FFOA lower given improved at increase with ranges rates. and $X.XX driven versus the same-store offset expense. representing our for guidance us sequential full to or guidance an These $X.XX is drivers benefit increase midpoint. or and $X.XX year We This midpoint, same X% XX% share FFOA from X% in range of time $X.XX $X.XX per is interest offset per same-store by guidance NOI per of XX% strength a to higher NOI benefit interest guidance is share quarter, increased from sequential our For approximately increase rising approximately $X.XX XXXX The full $X.XX supported year-over-year approximately $X.XX led the increase XXXX. year full expense full share $X.XX to by third versus a and

Next, the transactions and capital update. markets

an relatively our quarter recapitalizations with a shift strategy DCP a from this X% earlier announced alignment is external of approximately this proceeds third $XXX at capital-light in previously under equity our the profiles, return previously investment. Because of return. risk announced First, with of of consisted lower in shares settlement towards our growth of solely lower portfolio DCP funded $XXX versus have agreements. We communities assets our X.X stabilized million the investment XXXX, million stabilized million forward into our typical investment

we subsequent at of a common during total the and of an X% price buybacks X.X consensus million. NAV very average a representing approximately million per repurchased to Next, of rate, a of high average weighted use $XX.XX capital. quarter, shares share cap executed of a implied XX% consideration total to were $XX for and a discount at accretive These

agreement Finally, in close This the Orange for sell to transaction during quarter. community is the an County, scheduled approximately to we $XX quarter, entered X into fourth during California million.

at to priced pricing beginning the market and than basis transaction the Speaking multifamily more the asset on higher of broadly quality. depending year, XX on are suggest of majority the points market, transactions rates cap XXX to

so However, told, of to is deployment. an selective ongoing and the capital discovery the than All relative XXXX, price needed. volume in volatility has macro been our elevated capital expected, keep in additional us in environment earlier lighter cost

We pull accretion. to drive create continue have to and levers a we variety of to are external can fortunate growth earnings value

liquid our fully needs. capital Finally, of capable our funding and sheet balance grade remains investment

after only commercial Some credit highlights $XXX debt paper value through enterprise scheduled of mature we X.X% have excluding program. of facilities include: first, XXXX or our approximately our and to on amounts consolidated million

the and group Our interest managing multifamily sheet liquidity the in has at amongst our weighted outlook the peer X-year in lowest X.X%. average the proactive approach balance rate to sector resulted best

of our equity us Second, we dry forward comprised on ample as billion $XXX which of and of and of powder capacity have agreements, credit September is $X.X approximately $XXX nearly of liquidity million providing strength. of XX, line unsettled million

full while down Third, just to end, Xx, improve. more from our ago. debt-to-EBITDAre quarter was year to XX% a X.Xx was enterprise leverage metrics turn a value at Debt continue net than

expect be earnings based given approximately improve million $XXX the developments future these our on turn are and EBITDA X.X% growth to growth. further debt-to-EBITDAre should approximately Last, strategy expected our to metrics. in been further benefit have of by but We end XXXX share run-rate coverage stabilized versus $X.XX range Stabilization our both year-end will a NOI continued of and developments drag earnings, lease-up enhance pre-COVID leverage weighted XXXX, on and external approximately fixed improve capital-light mid-Xx year yield. charge By a average metrics X.X per levels. our should better

in together, our Taken balance shape. sheet remains excellent

liquidity Our position is strong.

we competitive value. Our utilize allocation forward sources and a capital uses up Session remain balanced will of to create Question-and-Answer to Operator? Q&A. I With continue it for advantages and that, variety open

Operator

[Operator your Joseph Please Instructions] with Our Nick proceed from question. comes question Citi. with first

Nick Joseph

would average a and how in quarter funding changing you well. the from at. Joe, the buybacks capital buybacks of the share here? appetite you of guess and have stock cost you Thanks. leverage trending talked What’s the in about down acquiring think the and I additional October cost as been below is kind about The bit

Joe Fisher

for the question. Nick. Hey, Thanks

pivot bit throughout year, as move little the did a obviously. we yes, we So

issuance So changed plans capital then equity the of with up XQ have next over and and occurring, development has the obviously been back year shifted back to price cost high-XXs. in of buyback. discovery And end the the of we got shifted as pivoted has and some into our at

should compelling Xs cap place IRR a and the of are cost say mentioned I going on and the quarter. I what’s development the at to at on of continue with time, the And monitor discount pretty going in close on we’re of this after. our But sources that of relatively capital stock price issuance still environment, flow – really in in the a schedule. here given NAV, purchase. wouldn’t that phenomenal going that point, sources high a what’s up do is we this in what’s taking macro small with we set of So fourth Then point in that economics against that place pretty free would uses. to have a and commitment going uses XXX the kind almost equity March, disposition at say target in plus a cash dollar like in implied we the available to terms there We

the have we capacity. So

continue will those set monitor we of but target kind So no to factors, today.

Nick Joseph

And indications Thanks, in stress DCP of are on profile? then do was program, the the any the that’s just portfolio? monitor that how helpful. credit default the or obviously, in there changes but there you additional And supplemental,

Andrew Cantor

is interact regularly this different We process. the with Nick, partners our Andrew. throughout

We’re getting them. from regular reports

construction third-party have period. the during We consultants

with And so regularly them. interacting we’re

this the and DCP of relates the resulted Between a one other bankruptcy it building was COVID, cost had the by pref our senior that It the it followed unique equity an portfolio. we the as delivery to eating deal of interest COVID well and for delay added as with subs the perfect and the of We through which the X-year the to delays impacts, the early building. As subs XXXX, delay caused key think is loan in by the developer. to of accrual in economics of the the storm.

one-off So then due in NOI, where we unable when the and we finally situation the default in agreement the the COVID a building stepped terms circumstance was diversified the with all per the of and of that’s DCP It’s this senior we which development a loan resulted to the were the It’s lower the the initiated country. by the the concessionary laddered. portfolio very refi delays driven the X in to a environment. We years We’ve bought date, matured, to and But high, comfortable across the markets most feel our It’s Obviously, Francisco. was XX weighted COVID. as we The impacted by for $XXX that last To up during investments. overall, deals XX%. see Francisco. of over across a about XX XX% loan And San of in of from $XXX fell monetized almost building rents foreclosure. a unlevered San or lot done million. million with of those the probably the average IRR bank. we’ve leased by obviously, developer one market

and So long it we’ve time. had a been great we’ve doing for success,

Nick Joseph

Thank you.

Operator

comes of the line question Evercore. Sakwa Steve next with Our from

Steve Sakwa

potential very trying guess pretty looming I the of and growth? potential it pivot? take operations. think in pushing still and slowdown focus kind strong. you morning. to start warning thoughts of and what rent wanted some how looking good on clouds be job And been dark the on gas guess occupancy with about just on Hi, rent increases and reduction And on Thanks. just the foot your signs a sort I sounds more your you’re has like I are increases on do early Mike And off of hard to you’d to get maybe occupancy?

Mike Lacy

Hey, Steve, question. great that’s a

really You’re for now. a right. our driving We’ve focused XQ in been too. this on XQ, while

going this move to we increase As a like sticking. forward, point. They team to of at more going we’re little feel XX% on through the bit they range December see X% are that

We’re lot of market leverage will the The be will that where shakes point. this at rent not side, seeing out. on a negotiations see and we

The watching green denials. point outside warning signs, those of and we’re to we on that that’s lot a today. cancel thing one of in remarks, said my the So lights prepared see just of kind is still your I

XX.X% that warning And range. We of we a signs that in occupancy those closely. we’re to watch seen again, that’s bit. little increase XX% that seeing have But will one

we comfortable we that right pushing feel with now. into go we that. more as And year next tailwinds we about So think have

Steve Sakwa

thinking mean, you prices obviously, about down, yields pencil guess, just I’m wondering put new on Joe significantly. And Okay. today’s a shovel your changed stock to might on much on cost new just I how one market? development have I on? in you deals to maybe up bond for changing, are the difficult capital are hurdles how how ground of it get a is – that then deal

Joe Fisher

Yes.

up remarks, Xs what are still bit there. but is Obviously, or range. of a XXX being place, with price points quite plus cap to talked volumes out fairly transaction up of I maybe unknowns basis that prepared That’s rates in into we’re the think discovery there materially. kind today, high XX minus hearing obviously, about taking off

of we through think I still to get go we’re here, going period price a time discovery. So

plus can need terms And to points typical we start or so out that settle need. basis you look minus in to we spread really that of development at before that XXX

have point, I Northern transactions of development discovery, hurdle in done delayed development. about we’ve a the in here we’ve required heard you’ve this million talk year. start supposed a was $XXX capital, for say first. on wouldn’t etcetera. start at the densification That’s the We a we discovery cost third So price need pegged us pending That the play. Virginia throughout is, of price quarter, that to evaluating but What

– a don’t I can’t So want prices to today we say than out. that see where other hurdle I have settle we

Steve Sakwa

Great. That’s Thanks. it.

Joe Fisher

Thank you.

Operator

Wurschmidt with Markets. Our next question KeyBanc is Austin Capital from

Austin Wurschmidt

guys. Thanks, Great.

you So concerns three further guess, would year? is move those that as slowing that I in the the even year we anything concessions markets early into how that seeing rising there And later you’re lead those? increase locations or in vacancy, into that expect etcetera, are traffic, next could you broad-based to concessions, like

Mike Lacy

weeks anywhere board as on of markets ones there. in X the the X average We’ve we’ve seen right previously. Not to across those are from mentioned same now,

in it is markets. coming traffic again, those into great rate, in occupancy those markets. our really grown the see still So supplement, shrunk. still hasn’t blended and a very place, And And you high as hasn’t growth in still it

Austin Wurschmidt

the across Tom, I’m you’re environment? it. appreciated? curious in. thoughts a operating portfolio diversified there portfolio mean, regions Just concerned that guys Got And price points, locations, And etcetera. you and be about then, current in the any macro you you, what segments a various backdrop have I most difficult for maybe would just of referenced submarket we’re really

Tom Toomey

our When residents. question. seeing One, we was we’re Mike in to lenses. two earlier, macro, any I Street with referring at look the it alluded appreciate I And not cracks. tend to Austin, what’s Main happening Yes, on

you credit, very a profile, we of their doubling of they up, patterns, their all that. fact, quality, healthy payment resident their if have are will, no, In

So a Main a XX a taken and look number. great very renewal I XX-year when Street in strong. is XX blends would and years that seems Mike’s October, career, new on you that at be And would in my X have

of is going the box, on really with With out. price, And to trying all strong, plays tool So they the employment. depend see about they that’s to down we banks, down side will picture being how markets, to and And that the every cost push capital, And inflation feel are situation, is and raising everyone the stock obviously, they see our that. capital are see really the feds, have environment, the respect by the of challenged the got in lending we equation the succeed. to any you employment looking horizon. it macro you good other going

going they is no knows. calls, How will deep? to going in long Or will be control. run? And capital plateau? markets program. that observe and case is they the going rise? meeting to Is don’t a it will continue It Will really it And environment? a Will dialogue one every like going is down Participate feels what that be mean And capital one our shallow? that it be a I lot recession. rates investor markets our to so, of capital-light influence it’s be to it’s succeed know in as of that’s And ‘XX going. every influences our out that’s bringing it on market, the to We where of us. inflation?

there, positioned we’ve well it create ourselves and I opportunities. will think

of with pivot expect generate. And so And to And will those see operating our really opportunities we so opportunities what to what how see and we we think you strong, wait they do and what in can present control occur. those numbers, when it what it, to continue, we cracks tend we we interact themselves? and

Austin Wurschmidt

the Appreciate thoughts.

Operator

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

Dan Tricarico

This Coast tech Question a services? your do breakdown professional differences between renter whether finance, any by is or with that’s and have you Sunbelt Nick. on your occupation your tenants? tenants Coast, of level Tricarico West a profile, regional Dan other East high level And Good and afternoon.

Mike Lacy

Dan, of we at in, I in where market an in don’t idea have somebody aggregated they have when front that. coming me. in Obviously, front have we are get level don’t of comes it but don’t that me from, today. an of the we

Tom Toomey

years to can and But have what? our what capability is so levels, say manage average financial in probably XX acumen career, is their and expenses some income well old, resident you XX, their

Joe Fisher

X,XXX

Tom Toomey

not that’s So olds when XX. years college, making ago running we’re XX and they of right the XX-year are out

So about spending, that And durable information resident they the seem banks giving to savings, strong. of looks are during be this. at you still, part look and they credit, when our profile pretty very

Dan Tricarico

guys. Thanks,

Operator

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

Jeff Spector

seeing just you. price Good to you confirm, Great. Thank are any markets? sensitivity want first, afternoon. I any in of your

Mike Lacy

we’re Hi, seasonality. Jeff, I think what seeing when foremost, you think about the and price sensitivity, is first

Market XQ year’s levels. it’s these a here off you already coming of decel is year. bit and very will, of obviously if got still into loss higher. in a you maybe that’s a will, the at I’ll more part, little fast rents a it’s XQ, some bit going forward versus do now, have if to very there, the going just above I Sure see high higher, for a where see little also and we looking Sunbelt, have markets, been some little strong. are strong. But rent popping market cracks right of next most in kind concessions in tailwind, some to up. and bit last still you And numbers, lease of and you pretty tell So some be

Jeff Spector

for the for appreciate versus at comment we discovery. price And again, I need on values bps. value cap are follow-up pricing rates on down, peak do transactions you you. Joe I then your to And much the up do year? comment Great, XXX thank one that XX the think, are you of let’s – how where say, beginning But Where think then? guess more

Joe Fisher

We versus some there Yes. got very cap on growth flied asset and forward XX% It’s type on based right? a going to to markets. market, really depend probably of were more you’re XX%. perspective. pricing, potential. from rate So which compressed Really peak high

that of have bit the little markets off So probably a more come Sunbelt more.

You play little more. maybe that’s of asset also the circumstances kind off bit hasn’t and price C debt moved much. as of come a that’s And you levered assumable in-place that have more where have you B have asset some where unique then

So range XX% the to XX% is for fair utilize. time being I a think to

Jeff Spector

Thank Great. you.

Joe Fisher

Jeff. Thanks,

Operator

Our from with Heffern next Brad the Markets. question of RBC comes line Capital

Brad Heffern

to outcome on what the was the Hi, good appreciate buy standpoint the I XXXX this walk to through the outcome is already. a discount just with from gave I of the math Or Is out? of some building on any everybody. you’re turn you default asset. at a lower of curious, of exactly loan that me little cost? you sort that a difficult access how detail still you you’re expect can getting to of sort the to this replacement and able it’s

Joe Fisher

Yes.

Brad, senior terms to So just a of the loan. forward We’ve the ‘XX. process it’s the intend in first, the bit process, we on We expected with because little but isn’t the right? XQ yet, certain – move outcome necessarily foreclosure outcome purchased in

to XXX prior about asset, at minus development costs that equates when necessarily door. well $XX or the so which range. I up given excess or million replacement in an the from isn’t Replacement is So plus basis cost plus XXX of perspective, of economics this today, and XXX the our you costs is certain. is say probably minus for outcome look would What

say accrued the is cost, perspective, relative From pre-COVID. submarket outcome. on plus on pref our to off basis probably a somewhere still good are a yield in in the the I’d mid-Xs. But very good yield they XX% based replacement where basis, that mid-Xs runs the that here including fully below at the a cash basis So

still to think we So room on front. there that is run

bit You market have quite supply a with decrease a of at coming you. a in

So less lease-up going we’ve just supply coming phase, a off then burn got lot and through concessions. you’re those to of so pressures the forward

on good should So growth go-forward a pretty be basis.

Brad Heffern

Okay, thanks for that.

you missed figure? give I to this, loss sorry And if lease guys did a

Mike Lacy

We do not.

digits. to again, Obviously, now, right to earn-in low fluctuate next drive tell, we’re with it’s And that our drive strategy, sitting But down. next to So to intention can this right the right? of couple this down, quite intention over our a bit year. obviously, our as again, to now, And this months. along in for our continue builds is you all try mid-single been can

blends You it can our today. in see

You’re going more see as forward. that of move we to

Tom Toomey

tie And with second, with is almost respect Tom. I market together. in our the emphasize see the this that’s basis nomination fabulous there. revenue numbers – would growth; capturing a in Brad, a it things you to rent can occupancy. on job of sequential X% a the mean, Mike couple done has X% I

window like strong a was that ‘XX it feel for roll good, capital and roll resident into as position we you in the to X% already into trying say, when the rent as we’re possible ‘XX So with choosing issues booked, of And just no markets, strong up ‘XX. walk really yes. the

Brad Heffern

you. thank Okay,

Operator

the Our Morgan comes line with Stanley. of from Adam Kramer next question

Adam Kramer

that market peers rent just Obviously, seems growth ‘XX? ask, that out that put thoughts of Hi, your recognize guys. a guiding Appreciate to just about your kind for peer. than aren’t about of rent X% given thoughts for X% guys question. have here, XXXX, had to markets hear the that kind how guys you love of hear love wanted forecast different number growth that and your forecast clearly I portfolio? Would but of just kind I’d to you your one first

Joe Fisher

Yes.

can think I to is we really today. what we’re seeing all speak

earn-in of covered what So I our think perspective, to it. and seeing loss I to blends part last that are on from and we lease question

I from being in market X% you market continue X% that is decrease to historical rents with typically averages in averages. We’ve think rents. a is seen coming And a grow historical commensurate throughout what’s underlying see on increase rents blends year. to year-over-year decrease basis, important, too, market not the

So trends recent of tells the and strength continue. us that the that, could consumer

go to going lower side. focus Now you going into number. continue you lease that to we recession, if to a dollar But in lower to loss to innovation try to and I blends the continue we’re those interim, And and try on every the on that to see maybe higher. capture think then drive a can

engine I growth. other as on days think can pricing doing as from share above lot relative and hopefully vacant some well wallet do what there to there is income or of we’re a peer drive we that perspective a

the to today. early we too it’s start blocks think but I of that forecast, So see XXXX talking building you some that gives

Adam Kramer

kind just in be side, have occupancy about of the think revenue quarter-over-quarter. of kind appreciate to That’s loss growth. of maximize Look, what when kind of pulling had that is of maybe kind hear of maybe right? little maybe great, how shift, helpful. recognize I really just it decline maximizing strategy to more? about you kind And strategy kind the guess occupancy but store I that to occupancy would sacrifice talking and maximizing kind rev and to I of on in too the a occupancy much, kind guys lieu kind kind caused occupancy When does floor, and XX of I’d you transparency, your love strategy lot much of an of bit of is me from of bps of occupancy? right? same-store And occupancy kind of shift And kind a

Mike Lacy

Sure.

you fourth you think expirations. have Right about ability a little at it think up. if have look to back obviously, more we bit lower the we I lease quarter, now, push and

XX.X. as XX.X So got low as around to we

hover pressure you’ll see bit a pricing think quarter, Once to going of it we us, through with XX power little a you fourth cause XX.X I and below XX.X have forward for that us that. the going will between point. may start

think get people on we and is equation. trying cost efficient we the turn units the So being you more about it little on that. shouldn’t in our we’re really bit we’re said, vacant avoid a it’s right? days. how moving rent the come of The faster, a at That how there, side way If it to

Tom Toomey

how that Mike the to And in long-term Iraq relates evictions on the going much [ph] to... down million $XXX

Mike Lacy

great Yes. a That’s point, Tom.

talk in of So some past. heard of them. the the We of were about around long-term delinquents upwards you’ve XXX us

between about Now we XXX. to and run we’re XXX. XXX And historically speaking, closer

to we halfway less X%. to where be, about need than we’re So

Tom Toomey

benefit? the And

Joe Fisher

Yes, benefit over time. We made a comment in the press release about being expectation. increasing our collection

that picked debt. trend were bad expectations, mid-XX% to about points Historical the basis relative relative collected continue basis we averages up build points of So XX to to revenue. prior XX in

is after. total XXX points go to there basis So

think of by have that some half a and possibility that coast. maybe different municipalities, realistically, given the place on as I looking regulations of in the we’re at been primarily rules put

Adam Kramer

for the appreciate Thanks all really color, it.

Operator

comes of from the next Our John line question Pawlowski with Green Street.

John Pawlowski

back opening Andrew, the wanted your I Thanks. go comments to DCP program. on to

sense to of across trying strain give terms are list and ongoing Could there they little watch book? just us shoes coverage other if rest of going or to stay be the rates get to bit, today service in where a drop? DCP you of for sense debt and So the the even a the a projects are the chop

Andrew Cantor

it’s too point. early at to this I think John, say

maturity So well the deals. have ladder these Andrew we within mentioned that profile

to couple And only next is there so a XX in deals the maturity of coming months. up

And will disposition I quarters, so kick over how probably or versus the next they off quarter of next approach we know two. will couple the in refi they process. see that the

we sure XX well some as a they I nothing from to value to sure make could scenario now, higher different way for where originally terms rates default. months very much I ratios can a we we that how we variability. asset as X in Obviously, ago, at in months see than today stress underwrite so The environment that and in underwrite account were as be coverage wait say think in well. And now, right these, But make will we of develops.

I to to partners. continue all speak today, we the of today and can equity kind with and monitor will no is So work issues

John Pawlowski

to a inbound then particularly of capitalization from And on meaningful just market seeing volume? side, deal recapitalization up in trends are broader inbound you guys flow Okay. deal the in of terms in Or people – not able line terms financing? increase

Andrew Cantor

have any But of those with sheets, it’s Andrew. development taken proceeds capitalize their developers both like capital continue of increase deals, those of And we monitoring now, we out advantage result of few the review but term looking to recapping haven’t are doing of number right bank the market. of a in market. deals. as be put well a the seeing definitely from in are completed we to but the lot a Hey Yes, an know, lower you as our and as deals John, we deals

John Pawlowski

Okay. Great. anything me, one a has X.X% for that this or lease just growth market Mike, Last quickly, softer? quarter, lot unusual in Seattle, become apologies. new

Mike Lacy

become don’t our inflated a also that’s question. softer, much good with think that exposure but there. I it’s John, are we

one thing that interns leaving out very kind stand of I can term shorter So, does still we John, had that you tell us. is feels The strong market. the for some were

the little days have XX those. we and So, more since last we exposure over had re-priced a to days, XX bit

the some lease long-term that’s for us market think of I So, good. feels But short-term pretty to phenomenon. just a today

John Pawlowski

the Okay. Thanks for time.

Operator

the of Our next question with from Chandni comes Sachs. line Luthra Goldman

Chandni Luthra

my question. you Thank Hi. taking for

that in As say how half we what delta was your compare the a back September, back provided the – think half you you from would about that expenses update and surprise? to much of

Joe Fisher

here in talked – had the the X% back above the above we were probably we is about being Yes, X% half It quarter. in year. of

plus I think range. when we minus get back X% or into XQ, that we will into be

commentary about You prior X%. are above of X% versus our talking kind blend

Chandni Luthra

right. That’s

Joe Fisher

Yes.

are half you more being that surprised. at probably about really looking So, X%,

due some from – out to the delinquents. having both process of eviction and [ph] success those Some a long-term of moving that’s are we

driving up to those been cost our well as as that’s turnover So, the some units. of turn

you addition, In and higher got R&M utilities coming through.

probably of was bit, a surprise. So, that a little half

Mike Lacy

I would just And million to about in $XXX quarter the in Yes. that, size say have expenses. you

us. only $X So, X%, it’s million for

of on $X to side. do equal X%. side the plans million Some We is was of on it, about surprises well. house still the have as just some frankly, that insurance But

Tom Toomey

am good me. My appreciate the getting were is Why, question. zero because perspective thing. to income I that actually XXX-plus this I this a on Tom. units it’s is Chandni,

year. $X and repair cost type I And the was that’s units at. aspect back during maintenance could lease quarter the higher them that of a So, in it. a million those million got I in $X window

impact the I So, down. to the unit long-term our to towards million, just turn that next $X day Joe it’s spend told would back and turn a keep million us revenue number delinquent get year. mentioned like that them make will Mike, and reserve pressing, every AR we have trade pleasant aspect. into for for And $X surprise

win a And avenues the beat are a that I think us. lot business. inflation. the it’s lot and contain of in a operate those, we and fighting has but So, do situation I innovation go we And hold structure XX% of cost to have a people for and expenses we margin it. Yes, know it

the it more potential So, of aspects that the we containment expense about organization than of the is unleash revenue it. all and how

Chandni Luthra

follow-up, geographies, seeing as any Very a terms any your provide versus were helpful. Sunbelt very in you there markets? that helpful. you a of detail. from are appreciate that if And you be supply would specific more any markets I what Are that in color could markets standpoint coastal

Joe Fisher

comments. out to think we XXXX couple of a look as beyond, and I

would a XXXX, the line markets. clearly So, broadly better you of sight. say, get concern I Sunbelt more into speaking, when

the depending in upwards on you you looking growth supply see Sunbelt, are could of So, market at, XX%-plus.

somewhere above Nashville, Phoenix, Charlotte, of number X%-plus those a it Austin, in some of stock those markets. So, markets, be the of

related that. to concerns And so some definitely

come down. Coast, West the we supply to On do see starting

California, supply So, I some of comes Northern quite like the think down bit. markets a

the basis. to On seems a coming be New East on forward down Coast, York

submarkets increased of near-term, better supply, generally market I so feeling little of a little are the our overall although half about there. bit a would bit expectations, so And supply say

come down. I when supply into to ‘XX ‘XX we picture, and to you do that see the think get expect of start some

of that financing the settle see. exists that where we cost rates the unknowns course, to and around cap Given continue market out today, inflation

financing seeing developers start equity struggle additional a line lot of to new up to are We or partners transactions.

expect X start quite to down So, a to the bit. to over next would XX months starts we see come months

little bit probably on so a story And front. get start ‘XX, ‘XX that to better

Chandni Luthra

Thank you. the detail. Appreciate

Operator

of the comes line Baird. Our with from question Golladay next Wes

Wes Golladay

expect Would a with I with of maybe tech lot you I seeing Tom’s question. years are it stocks, to not we the filter into at lot supposed of of comp being experience. But want macro lag look more as a everyone. look to a year? just through the to what pressure a Hey stock XX next probably where of any is was be. we have

Tom Toomey

What technology have to out mapping a will in the trying type of through businesses. It’s with dynamic. figure I am everybody What out simpler gone their of tell I completely respect why different automate a to tech that’s trying little to to we business. how the apartment have than is Well, I seeing rack. of is the environment decade bit a that you figure

I continue. are think core will strong are industry of Those that companies and strong that amazingly tech so And resilient. the the

they So, be are I see, for tech and find hiring don’t well. look I jobs people, and experience to going at very our paid

base that. homebuilding And is So, a I little worry aspect, do excuse resident exposure. capital the I markets-type don’t part looked of we bit about markets the see for that construction looking weathering looking recession. that the the when and – financing into account he his and And me, through employment our at taken our base. pricing Mike’s I cracks in think a

All week do we broader the say, for to each do as us set the we try extrapolate our employment into So, can room around and portfolio. to we picture is where do or no very, very this and any transparent. see at resident cracks thing our form in do to cracking, we time. anything shape We think be see in is this hard

Wes Golladay

do we you then for the you that. And arm Thank do go new when the the you have Okay. recapitalization. to if DCP, back can

the and equity, not know didn’t these participate if of You assets but well. Would you obviously existing loans some the full developer amount? your very had equity recap some preferred

Joe Fisher

Yes.

basis. risk-adjusted are capital we deploy think a I and accretively always opportunities looking to for on

comes partners with on format. and recap of we senior economics basis oXf go-forward loan within one if and either a we the risk more even absolutely position a a So, or the our our existing participate to into like existing us would equity

there we would upcoming maturities – the at point this that in is terms table time, to speak really consider, nothing something but it’s of on to. So, the in

Tom Toomey

on the add would I color that.

I Andrew and transparent have clear. very, think Harry and very been

right comes to is to makes ours, we We that these. love asset to estate boy, will buy that is another at in said, know. do would looked close And if and have the that, real it. market, to and an of always someday, we it one it the sense about It’s asset it believe just that investing think still avenue we continue to avenue that is

Wes Golladay

that. for you Great. Thank

Operator

Capital question Juan Sanabria Our next Markets. comes line BMO with the of from

Juan Sanabria

looking creation? am for out potential begin just there the or that lead time. the historically there years maybe the the on about macro maybe factors of be Hi. that organic curious some normalizes thinking have. double here, and And market forward the pulled view general back the some has indicators that how unique over guys think people because broadly, of on seeing your Thanks just to would pandemic of on more next been of of the I strong housing Do couple the creation what literature dynamics of up roommates. some household you households what’s and we

Joe Fisher

Yes.

of to I some pull pandemic forward household say a pulled shift think formation also the demand. multifamily. into fair single-family did a of bit forward over it’s little that It

have so a of large to at had months versus multi. tailwind XX part That’s the disconnect their you And single-family of relative rent. reason back to that clearly for last pretty own cost the cost between

what think I you and today, it within definitely stats. are seeing now we move-out see our

now are roughly XX% from high-single to at going digits of down kind Our digits move-outs buy mid to this low-double point. into

turnover we it stats. seeing So, our terms of in are

are shifting I rentership back towards a think we society. more

of So, come demand steady formation. rate more terms incremental benefits household any from in stay should us which homeownership down, obviously and/or

see think the into you I when are we here even are the on And warning traffic rent And we cash looking going paying of government some That’s back of collections assistance we And not Those year-over-year month coming residents dependent about on good at. year. next front. to actually are then so the the in we basis, just in tailwinds consumer, go-forward I of time. we think are on on to improve one things that have that we basis. signs talking that XX% October, up a a are continuing still on a see on and are

collections so are better. looking And cash

You are up. not seeing the doubling

So, I on those overall, formation the cracks. little more. benefits rentership think bit a household us probably ultimately, And seeing not really side

Juan Sanabria

a just then And follow-up taxes. quick on property

even broader surprises appraisals in sense we will what generally prices should going we lag, in could home in expect and some your be of the we what’s on in of ‘XX thinking some the about about? Any Some what peers what of some seeing Sunbelt of resi markets. are

Joe Fisher

I we have that Yes. of say the in insulates those would number us. but necessarily surprises, immune the one, diversification aren’t obviously portfolio we to some

expense the turnover driven Texas by well had markets primarily Sunbelt taxes we those So, as Florida that in of in is when our some as look seeing you markets. being have growth and real estate increasing at in that higher the

next So, see it we and it seeing are still to this expect year. year

to and be at digits of you to going When are mid-single and we lower we when look overall. you XX are go to to year at outlook California low-double I out think minus when go for digits you tax, Florida Northeast markets where on into preliminary get low with Sunbelt kind our down the then markets, for to think That’s next and and at Prop for real to estate looking Texas plus digits. like expect us. going we X% Mid-Atlantic or looking I high-single Nashville be

Juan Sanabria

Joe. Thanks

Operator

line the question of from comes St. Haendel next Our

Please your with Mizuho. Juste proceed with question.

Haendel St. Juste

Hey. Good out morning there.

guess I a on debt. is First, follow-up bad

uptick We number of third have an the a quarter. report peers your seen in

Some of guys longer bit a the bad here. improvement saw debts an taking but resolve, you to

Thanks. you to point I price next differently? there your I an are question earlier maybe to expect year? any guess that improvement or from you curious I what am Are And reasonable that doing So, distinctions? comments right seeing am infer

Joe Fisher

Haendel. I and start reverse that will Hi one. on Yes.

the going So, revenue. over do occur I necessarily plus time collected or can’t say next year. expect that going mid-XX% improvement on we from to billed is minus

because I delinquents. long-term are success and think on the should margin, having we it whittling down those

long-term a got have the XX a instead in process that active to in of and like have although eviction are kind to some four on perhaps somewhere days them of XX excess we being cases, we of days, delinquent of So, months. eviction pretty months processes more say XX% process today six that are

to that And collections should so we tailwind. more hopefully think a down and whittle improve continue we become of will and

bp but sequentially that to In maybe points, XX revenue basis say sequential terms X% big XX tailwind. debt a X. the not bad slight statistics, i.e., number, would a of positive, within I

really So, are in volatility. quarter, month, the but have the better getting our much that don’t we in collections

we collections we debt going last do talked about the quarter, are reserves. resident. think be specific bad terms each think to in be estimating approach of on way I what to try we We it ultimately pretty

doing we very of that. think done have I a good job

it a a eliminated have a in volatility the as when or negative. it’s cash So, of when we doesn’t, surprise surprise of that lot comes

we I on spot to forecast think been evaluate we and in have been debt how able pretty bad that. have

Haendel St. Juste

Thanks. I had. That’s all

Joe Fisher

you. Thank

Operator

line of next question Okusanya Tayo Credit from the Our comes Suisse. with

Tayo Okusanya

Yes. out Good morning there.

the the of any world just of expenses technology, to sticking reduce general update headwinds? operating going expense at company kind on to order Just to forward, initiatives in operating try kind PropTech of especially given

Mike Lacy

the for question. Thanks Yes.

think I a about bit one are the probably biggest one we relates and becoming more little is to maintenance. excited most efficient as it just

a us near So, bit should going It decisions a here place into little allow turn into future. the around repair us in that’s quicker. bit have does do versus the we some to visibility more technology very replace allow little units

more are visibility more doing. have visibility into are will have will what They We vendors we our into doing. what

little just compress when down our a we unit can efficiently, So, to days. they coming driving and schedule can how turn we vacant think again, bit time that it we are more that knowing takes in, a those

We given XX. closer probably have on to biggest unmanned. are place. it, have technology of today from that put what again, lot we that one with in properties that’s the you the of that, do us plan talk about just that heard previously taking And XX some has have So, we do and have to already aside rolled out we a that

Tayo Okusanya

Thank Great. you.

Operator

Malkin comes of with the Neil Securities. from line question next Capital One Our

Neil Malkin

Thanks.

that. of next XXXX. at million year, system zero operating some that portions whole what are year up, we is is kind the maybe things smart that’s you beginning the talk if can ramp at It sort say, First I playing the the like – you think your building those you by one, What this Mike, at incremental half of out like at, But do of how or of ‘XX? performance? the you today $XX looks you that talked end other are Should of see or of or of about about, of WiFi. terms assume in

Mike Lacy

That’s a Neil. good question,

that what going time. we gig to are stream you I first fact are take the something see Internet. the bulk out foremost, with That some is think the and rolling to and going that’s

So, apartment by this end XX,XXX homes the we are currently about of rolling out year.

expect We another XXXX. by of next portfolio of the rest XX,XXX the the year in and then end

revenue time through. all seeing of a million run start that roll do We one. that will expect it’s a So, little it does bit said rate to take be in $XX when

And so that’s the biggest one.

of will from a some Aside that, just I turns. are That putting little about in around the bit efficiency out. help that with technology will the we spoke us place help

of continuing of a side, creating do or at are to more with a XXXX coming to those then efforts very going come that going find in if obviously, on excited going going that’s you transpires, our that and that’s better customer revenue XXXX we there lot of from to obviously, of that. out up ways and chunk experience shoppers, buyers where another We our about pricing, in the job followed come that. money The to us. out obviously, will. project, data with there A lot with then are And

Joe Fisher

initiatives size real realize numbers able through to just with the months, that last we XXXX months. the million started XX Of we of over million for projects, been XX the you. that $XX that over in XX already $X have quick Neil, that associated got those to have the number we about

as moving rollout other some I well ‘XX, $X upwards constraints, are from fast depending but with our anywhere Internet think on issues the we as some of million as bulk to as quickly around million can you as supply chain forward into there. we $XX-plus

of range and number. ‘XX, will ‘XX So, And capture give you rest the then you a in that there.

Neil Malkin

are saying you in to potentially X XX you right? And another ‘XX, that what are Yes. Is saying?

Joe Fisher

Correct. Yes, correct. that’s

Neil Malkin

I whatever Tom of the forever, Okay. lot really, it. Last one, whoever. supply A demand and guess Sunbelt, or maybe coming that’s been in happening killing

going and lot I of opportunity or Sunbelt aware well or broaden potential that. diversification because guys particularly market you as end, will So, more that fine. permanent sure terms is see supply Do uncertain, But that’s a be a is to debt to I it am of sure are onerous coming you your the be there am exposure? your financing. that to broaden

Tom Toomey

assume it. what is much is replacement a mortgage One, will cost future. a I take and to for will adjust at the out there proceeds and stabilize exposure stabilize and cut rates How there lot at. that supply towards

the themselves many So, prices has market, I they monitor, accretive think the well, anytime have but and of They what it we look caps that’s the days continue soon. And horizon If on monitor articulated up. too. X.X And Joe Sunbelt for to else, comes we our how will times as moved the going to cost don’t themselves to be in see it’s out, the capital look, present very Sunbelt, and great, in great. they and if present opportunities. will somewhere that’s of see

we returns We where that playing are keep just growth risk-adjusted going the It I well. works [ph]. will are. best And think to go

Joe Fisher

Yes.

when as look well like like. its markets some There in – there some talked in an predictive pretty analytics not we those and it have one meaning Coast, each that of Neil, well think Sunbelt are West does inverse. and past, of it’s some buy-rated sell-rated as at regions you the about markets in are markets, Coast it’s East diversified terms today, the I

a new. prohibitive deploying have we next done cost and lot on is terms As deal platform. that our capital historically more focused Tom of store said, what is What today with in of obviously fits

is I our them about this think And so talked top point. buyback into about at a say near-term stabilized the We diversified buying I us already as stock which of three portfolio. priorities with would deployment, one

renovations really to other added you portfolio. saw five the The additional two are renovation, which

innovation, solid dollar, Mike risk, front. investments return So, lower doing that And you which touched on small into then on. get

of a blowing definitely of lot into well business. dollars as as that part are We personnel resources the capital

we now on can comes at cost accretive think keep some I growth. to So, back capital point, focusing for And that’s to the that. back, and hopefully, of playbook external get

Neil Malkin

helpful. you, That’s Thank guys.

Tom Toomey

Neil. Thanks

Operator

would Q&A like no Chairman call further End over queue. for questions closing CEO, Toomey, are comments. Mr. There to and to back the of hand the I in

Tom Toomey

you in by want be me And all of follow time to this, UDR. let do interest me calls thanking to for other have you Let I I but and begin know your after respectful. reiterate.

tactics stick sound, pivoted we environment Our can it. and to to our adjust strategy as market it. will understand current this has changed. And we We you remains to see,

We – have good we control that. very are and transparency the very doing apartment bullish what executing about well and very can business are on and

broader sheet the see actions that, of record environment market our you in at and to day to go. cost rates taking that do maturities vast majority outlook a our capital to through that low can strategy and and with by couple adjusted believe look tactics have our we we many accordingly, recognize that, appropriate also NAREIT We great the underwriting have And of our cycles the take for – of a present balance and come those refinancing And we that very take With ‘XX. capital-light have future, at a has we and With you right and seeing forward the of weeks. actions. and care. few

Operator

today’s concludes This conference.

this may you and for disconnect at your thank we participation. You lines your time

UDR (UDR) 27 Oct 222022 Q3 Earnings call transcript