UDR - Earnings call transcript Q2 2024

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Operator

Hello, and welcome to UDR's Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Trent Trujillo, Vice President, Investor Relations. Please go ahead, Trent.

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

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

time follow-up. the one portion, you get answered and that will ask Management today. to your we Q&A When get not questions questions available during for plus your question-and-answer the call to session after of did the a we that limit be everyone's be respectful

I UDR's will now turn CEO, Tom to and Chairman the call over Toomey.

Tom Toomey

and Trent, Second Operations, Andrew call. me Call. portion on and welcome UDR's you, Lacy; Fisher; of Chris Senior Officers, and the Thank will Ens, Mike available Van be during Conference Vice Chief the with Senior are President and President the today Officer, Cantor; Quarter Presenting also of Joe call XXXX Financial to Q&A

same-store fundamentals strong results exceeded drive core the and operating for solid earnings February, in utilize our strategies fundamental ongoing to drivers half First continue include. to our initial back growth. expectations due industry we to Positive provided and

well consensus growth million has initial outpaced full approximately expectations. X.X employment year-to-date of First, year jobs

remained has growth at income X%. approximately household year-to-date Additionally, robust

healthy for demand affordability strong driven metrics. while housing, has this also together, reinforcing Taken

through rent in the decline historical Adding homes newly delivered ahead. were well deliveries and for to half dynamic the nationally norms. appear the total the housing X-decade to to growth record. end Second, of stable levels year, near continue This development first a the bodes absorbed more starts than year, during years that, apartment XXX,XXX of below

third, in resident an fundamental apartment on average relative that the is single-family affordable our trends, home markets XX% These revenue growth more the led we X of with renting pricing improved occupancy, combined operate, first improved power, more tactics related lower resident half a operating lower decades. in Drivers retention the collections, level have income And turnover expected. where affordability than originally expense in owning XXXX. expenses outperformance and of higher growth, the robust in to month and rent turnover include than ancillary higher best

half FFOA second share In the year-to-date his second in all, results of the feel expectations this year per led will provide the also our and in about good ahead guidance We remarks. increasing time release. full this for year, in us us details our while opportunities additional year. growth to raise yesterday's Mike the the same-store of

cognizant also slowing may we that XXXX. of rate supply the have through still recent on elevated remain face and However, in rest of in the new effect growth the the of employment the pricing data,

And built be proud of our should innovative stakeholders employer is an to success have our our this we all is adaptive Key stature that solidifies choice. and Top XXXX with continue a engaging reflects we recognized This achievement winner as Workplace being a Moving build on, position the recently to industry. ESG our experience leader, UDR estate in real on employee named and an one culture. of. as recognition the

of long-term multifamily competitive the Big unique and I relative results. remain UDR's enhance that should optimistic growth about prospects industry picture, the advantages our

residents service our to outsized to With We have that, Mike. to turn and our associates strong best-in-class culture a I'll deliver over that the create value. empowers call

Michael Lacy

topics. following Today, Thanks, Tom. I'll cover the

year operating results, regional including same-store operating trends, improved our same-store quarter guidance, quarter trends. second and growth Our underlying full early third assumptions

Quarterly expectations. X%, and revenue quarter by. These year-over-year above second also driven sequential initial same-store outpaced and respectively, results NOI growth X.X% begin, of were same-store results our To forecast. slightly were

blended growth rate new lease shy X% was just basis growth rate and rate growth of First, by lease points. renewal driven which X.X% of XX

New quarter concession pricing increased, in demand by power. and first versus as growth basis which resulted lease the stabilized points improved rate improved XXX

basis through XX% than Second, resident below decade. lease blended prior growth. retention points and enabled more favorable quarter led best has August increase This and annualized renewal least to our the period in turnover rate was XXX second more to has year a us rate pricing at

healthy by volume. occupancy strong traffic and at remained Third, XX.X%, supported leasing

Washington, residents. Seattle, quarter. growth by standouts, the value-add services pool and which and innovation, income our or with And our was to driven Boston, same-store collectively other nearly D.C. constitute X% continued XX% the delivery along fourth, XX% higher York, during was New averaging occupancy of than our of

of Quarterly expenses. terms to savings as expectations came than and insurance of and less X% year in by and repayment reduced driven than resident XXX well on growth maintenance year-over-year primarily claims due unit was better activity. X.X% as of driven same-store X% insurance while our Repair was having growth ago, partly lower fewer to Shifting by repair retention expense was savings. nearly a and costs improved

Core largely followed and remained seasonality. metrics on. key operating trends typical have Moving have resilient July, in

and lease First, the rent growth is follows normal than slightly growth be expected higher July range, June blended rate in is trends. historical mid-X% to which results sequential

X% growth we rate rate closer increasing our renewal have is growth second on the lease slightly from X% to while quarter. lease had in average, negative New success

current quarter. the remainder Coast to Based West through the is rate with at approximately average expect lease In terms Coast This negative and of of the trends, relative X%. strength at leadership X% the at the third blended we persist least is by growth performance, of the on Sunbelt followed Coast showing East X%. most on East approximately

July year-over-year the other Relative is in represent continues compare a against norms benefit forms XXth month will to well housing improved. industry retention to to resident historical and of Second, has our total. affordability compared apartment the consecutive turnover

thereby UDR markets is home nearly Given apartment moving a UDR buy $XX,XXX. and for rates, $X,XXX $X,XXX savings record mortgage of across home. of annual of creating the a cost the shelter contrast, level month, of By home disparity to home cost is per owning led per out has This our average to month. prices average rent the low a level approximately residents

of peer project, and increased to year our over on because resident Furthermore, team's data-driven lower average. XXX focus testament to expansion. relative past approximately group execution approach the should retention service. ongoing income, expenses, our our basis the points improved has improved retention This our innovative customer experience power, by is and to drive reduced higher other pricing CapEx Ultimately, better margin a customer occupancy,

million in in these early capturing $XX innings We but incremental the believe range. to million of $XX are benefits the still opportunity the is

facing compared remains approximately to elevated supply, July, Dallas points average to online has new lower slightly XXX Third, operating but XX% XX.X% high, trended seasonal coming Tampa, occupancy and in quarter. of Nashville, decline trends. on NOI, basis second Markets supply XX.X% typical including by have to our occupancy due heavy and the seen to

occupancy adjust a mid- Strategically, occupancy markets Conversely, to Orange our as portfolio such across facing ahead operating Francisco County, on supply, New quarter we in remains later the San of which the York, and range anticipate make less leasing tactically high of as our period. NOI. XX% we third slower seasonally regaining in approach XX% average up

half high in the range continues of to in year. to other we achieved similar July, single-digit the what the grow fourth, income first And in

total income trajectory constitutes a revenue. We As penetration contribute income roughly other and of with significantly such rollout WiFi as of remain XX% other of revenue pleased as the to incremental initiatives building-wide same-store these reminder, the growth.

full raised year our X results the months year, Based of XXXX yesterday's first on guidance growth we the for with our in conjunction release. same-store

volatility an various back with of year-to-date forward this supply as by macroeconomic elevated year job combined growth. We of remain But demand for resiliency deliveries cautious are given we indicators in and encouraged election the wage XXXX. growth the such half somewhat potential in

XX We the guidance To midpoint X%. with include provide blocks midpoint range basis the same-store following. to our primary growth. new to revenue a details points, of on in achieve X% starting our raised building X% The resulting by increases,

First, basis earning XXXX points. XX of our

basis in our increase is guidance. represents portfolio XXX be point lease growth points to compared blended to Second, basis This initial rate a XXXX. forecast XX approximately

Given blended months average for the deceleration of X XXX basis year, points XX implies through of months to of basis first the approximately lease the remaining points on X rate year. growth this the a

Using XX of basis and a blended about lease add year basis blended should X% growth growth, expectations. full X% negative approximately our are rate improvement revenue growth assumptions growth our XX renewal growth. midyear expectations versus reflecting rate same-store point new rate prior rate convention, points X.X% to full a forecast to lease year our XXXX Underlying

our initiatives points XXXX Third, an rollout our initiatives of same-store are points the be prior year-over-year bulk guidance. add revenue improved of additional prior high higher debt increase which year-over-year The continued enhancements. variety revenue lease line a innovation bad a of growth, end from and from combination basis thereof. this to XX occupancy, property-wide or rate accretion should our growth XX range and the expected XXXX, along basis innovation, other of And fourth, expectation. versus we growth WiFi to combination blended occupancy of other roughly achievable our through X% operating of property is with with in come flat growth expect in of is same-store to

generated and the rate other full points, blended the by basis Conversely, XX loss some low lease level occupancy X% innovation. approximately in reflects of our growth of income end year of moderation

our lowered by XX expense driven repair full growth. Moving points improvement at on X%. year primarily growth. and was same-store constrained We X% The basis the midpoint now with to X% insurance to and expense to maintenance range by

elevated of comping credit off be at growth Absent basis expense the was X% onetime full growth realized same-store low in reminder, midpoint. lower approximately for XX employee factor, a X.X% than As points our to normalized year to we million in first beginning of expense expect would due we updated the quarter a XXXX. the of the retention $X.X same-store range or this

trends. Turning regional to

was expectations in Sunbelt the largely while quarter, Virginia. strength and XX% Our are have of region the best-performing in markets in specifically, coastal driven second by Washington, strongest East More exceeded NOI, which our results Northern D.C. market Coast, approximately our comprises our line. our was our

demand strongest year. rest for weighted region supply, X.X%, growth Coast was we year-over-year the continued expect new our and East low growth this healthy the XX.X%, rate quarter blended And of average relatively and be same-store X.X%. was the was throughout Second to occupancy with lease revenue

has which of NOI, the second West tremendous comprises our in quarter expected in somewhat The but approximately year-to-date, quarter. better than first stabilized momentum Coast, the following performed XX%

But to by increased job also We employers wage and the in return companies. relocations enforcing mandates low are more as which well our various West activity to AI from less quarters. as influence will cognizant are across stock average that new encouraged more leasing at strictly and technologies of office corporate favorable supply of markets, levels Absolute dynamic than lead supply Coast on expect growth. coming remain existing of X% we a office

We Lastly, continue performance which our began beginning markets. the Sunbelt markets, NOI, was comprise to expectations time original line to lag our XX% in Year-to-date our through of we June, with which at see of coastal roughly our elevated it. the to hold some roll pricing concessions that our supply tactically drifting future to set with deterioration resulted decided came up occupancy rent to due in for quarters, and new which lower. best great

have robust markets remain our supply While on given new the absolute coastal near growth of broadly more cautious our the online. markets, in we very coming the in high term, job levels region Sunbelt

XX% coastal above expectations. which comprise of To have close, initial markets, our NOI performed our

XX% our largely comprise which of are NOI, While our expectations. markets, line in Sunbelt with

to maximizes how we our over to us NOI nationwide drive enables to coupled strong revenue leverage innovate to margin each meeting our challenges operate us time, go This, for the face will towards innovation UDR portfolio allowing each asset, with operating that fundamentals diversified the out strong growth. on My market surgical be industry. to further as with and regard we results. your expand and our associates of head Our dedication continuously we continued thanks

I turn over now will call to Joe. the

Joseph Fisher

guidance, and will summary include, transactions capital a Mike. you, our activity, The liquidity second and of quarter topics today balance markets Thank sheet updated our a I year cover update. and recent full results and

and $X.XX and our to of controllable per our blended operating sequential increase share lease of share higher-than-expected across driven have results provided led same-store per ranges. $X.XX expectations, categories. the per which our adjusted exceeded same-store strong rate high growth and end as growth us supported Year-to-date both lower-than-expected The guidance. by by FFO expense NOI share achieved quarter FFOA raise growth guidance initial noncontrollable second was Our previously

have cumulative with guidance year in full a suggest is guidance a new uncertainty range prudent upside we midpoint $X.XX new Our elevated providing cautious improved approach believe XXXX of share per share initial midpoint and and X% the given supply, the by a per midpoints of share our Current February, per trends to or of have FFOA raised $X.XX. of volatility. $X.XX approximately ranges. Since risk is guidance our twice but we same-store macroeconomic to FFOA guidance $X.XX election

quarter range due our our interest ahead, historical is is to from third changes midpoint share the to across FFOA which $X.XX quarter flat sequentially, Looking G&A. $X.XX. is NOI, $X.XX similar expected third second results per to expense to average minimal guidance and earnings and The is

transactions a Next, capital and markets update.

during community quarter, the in XX% ahead lease approximately as occupied up. project points with expected of XXX-home the community When twice million, rental the combined of construction the basis pricing, robust Meridian, on Due $XXX is trending underwriting. UDR located First, to adjacent is the rate completed North which XXX today, level we we community yield this already attractive in XX Tampa. point at of to a another demand, is it's

With the no of community, we have this projects. development active completion

potential to next are evaluating in up we However, months. to XX starts X the XX

has located Second, X profile and communities in Portland, under project occupancy allow the at their Each went rate X is return to return and X/X a end, quarter a XX.XX% flow. cash positive DCP the risk paid DCP communities cash. positive as approximately achieved generating on in of contractual subsequent equity be of flows new lower contract typical part million cash to a $XX than stabilized of our investment preferred recapitalization. Therefore, of development is we fund to

New $XX quarter received end, Boulevard in million paydown, in an in XX% the structure. the to being to XX% Queens, In equity Vernon investment subsequent rate we risk on paydown capital of lower preferred our our return positioning to approximately the we and in investment to conjunction DCP York. secure reduced third, due from our development reflect a agreed with to completed the more located And

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

include. highlights Some

as have we billion $X liquidity nearly XX. of First, of June

end have only to mature to approximately debt we thereby of scheduled scheduled consolidated XXXX, consolidated through value $XXX the reducing and debt refinancing or year of million risk. the of through of Second, enterprise XX% X.X% only total mature

metrics value was resulted to at in And was our at the strong. approach average Debt proactive outlook has third, our best managing X.Xx. sheet lowest in Our and end, to rate sector balance multifamily amongst debt-to-EBITDAre interest while weighted X.X%. the the X-year quarter the liquidity group leverage XX% remain net peer enterprise just

In opportunistic and competitive We all, open our it Q&A. will that, in long-term balance continue up and remain With deployment, I capital drive of liquidity advantages variety sheet we utilize shape. excellent remain Operator? in our for allocation to a capital accretion. to

Operator

Eric [Operator Instructions] from is coming from first question Wolfe Our Citigroup.

Eric Wolfe

forward? the what both going occupancy markets Can you about I your July strategy Sunbelt? coastal June for versus talk your you more bit wondering saw a was in pricing Sunbelt how the versus impacting much in the specifically If and coastal that's about in markets? fell

Michael Lacy

great those. it's of We question. Eric, few Mike, see a

try So all that. me to capture let

line. good May X.X% basis averaged peak it at through tend right not to points days during to over we original leasing foremost, XX and July, a our one which from expectations. month I June actually trend blend, First XXX was is around over look

versus X% that, around see compared month-over-month for on to was rent, we we pretty pre-COVID, us actually what basis. Second X% pushed May our double to strong much right that market a so

our pushing So our higher very rents to lease us XQ, to which is to that led through renewals growth. new strong offset push trends led helping us

through XXX out of But the from you by really was are given strategy time just numbers. the sending project, little a months of first closer I versus fact out of I to basis customer some points. the had that our So XXX basis it's that renewal along fewer and how bit and points on playing spend give stemming we over before point, experience to We we fact points peer our we've aggressive XX move-outs basis at X% year, turnover typically point. X, around of change year-over-year, our basis this about September down a just I'll of trajectory half first of and out. we with the about XX more what between achieve the X that the send tell were X% relative XXX year by our group the the you And our off through strategy getting more

test of the last wanted ground We it seen days. out. And little We've a to that pricing bit right strategy. XX now, XX, To we on feels it's your lose of playing point like volume. occupancy, that did stabilize as over the

is you XX bps the it month. that's it's think occupancy, for approximately homes, $XXX,XXX I it, XX call have, which to us. When during lower size important

So a see and little we're into stabilize while it's not material, starting bit, it it's down to August.

just we and of little the on stats Coast, East West you we somewhat similar July XX.X%. X% in in bit what the Coast what May, right growth range, -- a To some Sunbelt and tell But still still the blends, X% East in lower, the stabilized hovering Coast around second your on the seeing and is quarter. the saw the around negative on the the June would X% point, XX.X%, on are is, growth had I regions, to around throughout Coast Sunbelt, that West

of expected. trending as overall, So kind

Eric Wolfe

think, to understand back you Or then of it's some around that's there guess, back sort Just for you're reflective helpful. for what's on full it. sort you the would that your guidance just trying given going more growth? of guidance. based I into you your say blended half of like position, conservative And rent year, Got mean, of more estimate or to placeholder? conservative a think original a mentioned? do things around the for pretty X.X% I which I year, of of the close it That's guiding half seems the something is

Joseph Fisher

Joe. Maybe how Eric, up had that off approached to layered just with Versus initial our estimates, up original to bottoms forecast it. guidance, of kind we it's consensus come to we taken lead in forecast.

I think acting GDP clearly seen we've in has coming a expected since of perspective. period as from with been developers better, supply coming better, fairly better, come that time, jobs wages rational about concessionary

then capture the from new a clearly affordability one that I outs has or a tailwind think, buy piece, move for household formation. just relative nice on us is And rate been to either

a XXX market really that's we our rent growth. So X%, an than driven points better basis which effective seeing under about expected on what's originally. is of market kind basis, year-to-date growth, up rent We're year-to-date

in what months. that's So drove those blends X first the

half So back as year was kind we bank did year it full put in take for just we of the months. approach of the guidance, the first X the what and was way really

So through happened we we alone. what knew half for here and impact, guidance it the updated assumptions want that back July really

And last X number in the the year about of the only growth. XX lease points implied so months blended for rate basis is

you unknowns we're have into still slowdown in where on into to mentioned on on half. sending Mike and the we the you on see of the renewals. and as August we more seasonal some on there, visibility get out that as anyway front the September, macroeconomic back that some we out degree Obviously, front conservatism we talk street have but the blends view have factored still supply go typically front, news election under We'll once go

but that into of front think that prudent us guidance as back kind to it's of momentum half be and approach conservative year. then So blends, have as everything on we date, continued mid-Xs still move I bit the a we're with to we the we update little seeing tells

Operator

from Sakwa ISI. coming Our next Steve is question Evercore from

Unknown Analyst

to -- question guidance This for think in half the year? front we from $XX this the raised had expect funding Steve. on you is for We more DCP million. the Can a guys Sanket on back around X of I

Joseph Fisher

Yes.

million $XX in couple X really a We net there. is that of of So items. the had originally

you I details investment can Portland, saw $XX a in portfolio in more release, everybody the Andrew second. here in million press recap on did think which a give we the in

have color a We also part of and pays provide and on And cash a us payback well. on more then we as which which bigger got couple for of partner, prepayments. the some Vernon, small we our is other payback can both

nets to that million. $XX So that

As we on have rest of year, much look the maturity up really to the coming don't out front. the we

next the I from maturities of loan our think perspective first part senior 'XX. for a

to the now, commit be would the extensions first we active ahead it we or looking. looking guidance on So But we not deployments. be us prepayments aren't discussions really DCP not capital really And We're or to that that and to expect of to right takes would year I and front, no investment prepayments just say think we on to payoffs, far front increasing from along additional action have have that if assume place time. additional major there. enough but that as deploy on that potential even to next

H. Andrew Cantor

Andrew. It's

to was relates neighborhood our quarter, for that redemption, have of originally York, next it we accrual pari originally who DCP had a $XX a the partner had in entire the us to that XXXX, is was that fully the million the New time and deal amount $XX of At we West DCP which is As -- million, of the their passu June Vernon, their million. refunded. activity with that Astoria in invested $XX transaction funded in

we invested X will stabilized in had on but of where are of was stabilized one this occupied. well similar a now That's new a And in development. DCP is about XX% our shortly, of recap DCP in this to on these very million is said, The XX%, $XX our -- and completed refunded. And that is a then So addition as X/X the both property Joe assets, $XX that investments recapitalization as accrual million. situation be which of we -- a Portland as current. paid will we close

Operator

today coming from KeyBanc Austin Our question from Wurschmidt Markets. Capital is next

Austin Wurschmidt

you I'm lease markets you or markets growth a regions -- rate hit specifically, and that had seen lease Tampa in more lease new had Mike, moderation other to degree Nashville, rate trends. there May drove saw June? of growth? similar occupancy. Dallas versus if July, July But that wanted curious Or down highlighted I were and the into the in were also primarily back what growth new have these new moderation rate on driving

Michael Lacy

Yes, then uptick Austin, a a of obviously, coming July, What's good June, we little to we really through it's deceleration a blends bit. in a May bit saw that more question. from interesting, saw and

little the it over around stable I is XXX at close to bit look the we XX May being the across last days regions really, XX with points, the way July, we've today. basis than from call to So as thought saw so. or it, weaker a X% month, to basis let's we and hovering But XXX gone all points, we're again, end pretty it's of been negative the towards still Sunbelt

the negative the upward still terms In the X% in the in Sunbelt, negative West Coast. of X% we're seeing growth, Coast, East growth lease where down to we're on new X% X% seeing

on coming So the still in out absolute Sunbelt coast, basis, expected. strongest an as of a bit weaker the little

Joseph Fisher

Austin, this Joe. is

on our credit also over ID income the We've platforms talked a some time. to debt scores number, new about the too, occupancy of just and deposit around little that as strategies to and about little about on on our We're $XX bad Mike verification. efforts million opportunity more a robust that, think prevention about. in talked in a strategy the follow represents starting on We've fraud past portfolio. up be to insight that $XX the million both bit the bit you pricing roll our to pilot for Just talked of lot beyond us out trying and disciplined kind has AI

It's going system, get we're hit the term be pay. place So just today to but better us be increase, with believe which up continue necessarily as residents to longer we are the which does negative. out longer It's on individuals of denial of to seeing of we continue not ramp still us a in our that impact we to good. will factor do that continue rates apps more stay that some traffic, those occupancy of and temporarily continues good to that's occupancy to kicking taking the

future. a it's get in the take occupancy better the to hit So the longer-term trade-off numbers today,

plus flat have guidance Although I'd into we're on year-over-year of were still a say at this that point trending for kind not in assuming slightly though we bad ahead We're time. in even that numbers. debt, minus our factored or basis,

Austin Wurschmidt

you Partially, size answered slowdown next to we've Got impact around I in any think, impact heard it. traffic and I levels the the of about last these about and the my near-record in of then which July. was really question, supply absorption concessions concessions year? is trended. I top of how you guess, versus that throughout that? quantify have But of half kind how year. first up stack And curious the of does that, kind on maybe Can

Michael Lacy

Sure. good think point. that's Austin, a I really

all, concessions. I not here about a tell up. doubling just first I little are, back you, stepping consumer addition few think how they and just thinking of are stats healthy seen to typically a bit, the that we would look at in

so places just single little that right to fact have today, It's nothing. to obviously, the Coast given on much. But bit push next today, steady we normal bit, the little X.X% at even which like we've a a around Sunbelt and residents pretty able And of across the Francisco being then were XX% where concessions, been up down places we're your with D.C., higher are board kind consistent ratio like still point per homes. to Seattle being state we're seen the seeing slightly, about occupant is San and We've we a Tampa, stable to So half X.X% rent-to-income week up Dallas, home. of rents pre-COVID. with Boston, the where go our XX%, a

Operator

Dennerlein America. Josh Bank question from coming of is Your next from

Joshua Dennerlein

sounds to than of wanted harder of little rate the kind would think renewal rate even start you how just like to confident continue guess, of to when of your customers. data from on you future? one rate bit some here did answers kind related made pushing pushing in past? the I And have harder in follow-up on on then Mike, the like you more platform in your -- you you ability I the a pushing initiatives do question. like feel comments to a It because about

Michael Lacy

Thanks goes the what May. in Josh. with what I Yes. to was It question, seeing back saying for we're

start we a the market historical renewals marketplace, as started able we strong to to we're little to And our again, get XX to had That price more our gives about when averages driving X%. dynamics days so normal of very bit more out. us confidence aggressive in XX, X% rents compared up,

you're experience to in And think of work on the what or about seeing A back to I so. out us looked last lot that has we below project. what today. And basis, them. been front relative a that, ourselves to done so is of And goes that's were points play that we're year it customer basis compare with in we when addition we over peers our XXX what at seeing

X the above changed X last We're trajectory. that points closer basis months, we've to XX actually Over to them.

so And to good. but it will, can continue pricing Again, know next push it there test and test over you a renewals. We'll it's in we the if little try out days, a feel see on like XX, get the XX aggressive today. to confidence I if here gave more to our thing, feels different bit us playing out strategy, more

Joshua Dennerlein

were you then did What you what was -- And it now that's or just -- is No, helpful. above Okay. and above? on you're peers super that? what sorry, below you're

Michael Lacy

$XX into were were that to We that to group, front led what believe we call ourselves see lower go. the lagging on trajectory. And next have potentially turnover. holding of we compared in to $XX continue experience dive that's and of a million million And the really we we against a So but than it, customer to the know the turnover, to change long out drive, something. try going it playing over peer the value and this we us, group we in peer couple also group years When that to us that by think to ways we could turnover sustainable forward. project

Operator

coming Fargo. Next question from Jamie is Wells from Feldman

James Feldman

Great.

items guidance, the if the election, rates. where the could would consumer you've go and for around downward, on you -- talked the your you Or top actually really your but most revenue, in on conservative also things meaningful things So are the most have say turn think kind don't see uptick? or comments a commentary line I you you're well line you appreciate other got of room lot the on? your you about lot a guidance What uncertainty of

Michael Lacy

it's could I'll good a question. and our in not also seeing you the on pretty And just expenses. board. where It's Jamie, tell you today noncontrollables. I'm feeling we're good controllables, on across the it's our it see guidance

we're seeing the year, when And customer the on fact experience, closer we today, a of around to went we X.XX%. had turnover sharpen And there. with aggressive down, everything for midpoint getting with little that to a that so the is pencil a into we're site more we're turn able of We're us. lot our our the work bit on X%. Based vendors, people do

on strength see to item. that continuing we're So line

say And probably that's so I'd for the me. one biggest

Joseph Fisher

because that think opportunities what Florida We on range. well X% we Today, fully I and and quality range. ROIs, year-to-date tax X% the luck driven improve And of activity. doing tax we into at, higher trend tax upside. Insurance, rates. estate I a of in factored unknowns basis look lot really to of into had We've real there. opportunity as on our still in number that But bit as activity year still perspective. year-to-date good A is estate some success for based numbers an a think asset there. really little a what estate think we've we've claims in to real real well, lot our then claims expectations at work were as just that depending appeal a yet to X% by not expense-saving we from more down when the But out [indiscernible] off coming could good you came think had the we of activity there's values expected X% on I have

as But half not have into factored in the well. into that continuing see same We trend expenses some back we have to we probably the upside degree. that if there continue,

is good variable probably basis. on for a So us a expenses go-forward

James Feldman

to strong in Very low of about like we rates candidates I a feel balance out part back on can Okay. 'XX, investment the is. kind stronger work? aggressive talking your I macro like, that the then, look sheet on early the do how means perspective do or to be where your cycle, stay guess, need be everyone's very of buyers' pulling the what looks now capital from the it's How We'll you 'XX rates patient? And from of about to just you there you And cycle? helpful. putting the just are see markets, a Or bit. talked you like different sitting But all level landscape are spending catch guess across if picture right front of low. little and what kind the starts. does perspective you think whether competing

Joseph Fisher

about how Maybe cap today. the and buyers from Joe. what I'll a toss sellers to perspective, kick off thinking we're it Jamie, just can market kind capital of it's in it he seeing talk Andrew, we're about and then and rates with high-level

perspective, for something you accretion. Andrew of are out for rates cost. have isn't really us. So about levering that I'd or cost makes capacity, the look us today, minimal commitment right the do, it's sheet We acquiring today. From today. a now, that's we have and to that sense side We capital-light terms say growth When compelling utilizing lot talk up on either an side development the that maturity relative cap balance at a for continued in don't going equity don't there debt will where that need to external strategy of

negative You're leverage even line to in kind today. of possibly

sheet that the And out for a isn't accretion capacity balance there so going perspective. overly compelling and utilize FFO from

the strategy. I'd capital-light So continue with say

XX lot next got pipeline. we've XX to or start a that minus within We deals building plus And the in of up optionality development the X months. could are

whittle yields of on there, continue to and where capital. cost as try cycle our that's in we So cost lean come for way. the way, to for get think our to we'll more to the we wait wait rents I conviction But and coming keep out rates cap

H. Andrew Cantor

Thanks, Andrew. is Joe. This

are groups and able as cap that's their many higher, replacement reversion based trending me also the push growth as those different cost markets disconnect make and the thing location. The in the certain capital-light investors signaled reversion part, on have that's board. We're a plus continue going most between normalized in that rates up X% in a values excuse our large market bit across markets, slower cost underwriting seeing down seeing a the past, We're is to seeing with across discount on bottomed firms to the joint on buyer higher to substantial many we're is or today to markets we're have that are strategy. in rates also what cost mentioned, We're have the -- little activity our the are focused and Joe partner. minus rates in IRR As we're deals today and and discounts those to helping to excuse these of up of -- markets some push that But buy. have and values the we're lower decisions build the out. in lower, Cap with heavyweight or replacement investors than the IRR based for the on and venture seeing to down where trading that push different large me, those seeing, presenting we growth cost. increased to there's are have

James Feldman

very Okay. helpful. That's

and markets? higher Like the delta there's so what's the the cap are to in seeing gap rates between and rates growth Just you're confirm, growth? -- cap lower lower higher growth between

H. Andrew Cantor

mean, for cap X.XX% are of say rates the the I X.XX% I anywhere today. assets are trading from that would majority that to Yes.

markets markets high in have then to and have And are a where you're so -- is people growth, the that have cap at for rates. to you going replacement where at cap are you were willing discount those that the harder lower be low growth, pricing to assets don't cost, to have to trading obviously going push And and higher rate. you

Operator

Your is next Nick coming from question Yulico Scotiabank. from

Daniel Tricarico

the on for year numbers Could to points for With for Mike. basis around how the respect your Daniel exposures? some It's you changed Tricarico incremental growth Nick. between versus rental put question different rate that guide. the regional A XX initial

Michael Lacy

Dan. Yes,

call we're renewals year is to foremost, the that X% being, and think to range the X.X% first when you assuming think, about back I to bps, that have half the growth closer it, of be to XX get number. would for

the could of then Sunbelt. that when you low worse supply side, And slightly just about X%, above get get X%, demand. you bit And But negative probably you you're still There's the on with as not what Sunbelt, not negative I've point. at difference a the the is in closer is so less have out half that into when the are the that coming little lease been that we're X% be between in regions. I'd significant? the but down peaking probably to marginally, this X% given go big at through what still year, means seeing end, obviously, a back to going we're the and September region, Expectations we by new coast, anything sending you think to tell Coast. X.X%

Joseph Fisher

half, first of saw. relative Yes. that to Dan, bps kind XX pickup that we

I West expected. surprise before, D.C. We of upside Coast Coast. as really up been the the on well really a talked Seattle Coast. the as the lease as improved about for San the And that rate has us and to Sunbelt have positive picking for as been been blended expectation operating on coming The continue surprises Fran full positive about It's driven think to see we nice year.

Daniel Tricarico

been Great. defense on election Actually Joe. sector up the There's for been year. and obviously There's maybe that, following benefit Thanks it's just on outperforming -- obviously spending. this some D.C. the

you next maybe potential a looking anticipate level So into year, especially of would ahead, considering some administration? change in normalization just

Michael Lacy

of been this what we're XX, I'll And XX take just that. there, is size seeing first, again, doing last market, of has this market. I'd the NOI tremendous over D.C. say, our days. XX%

today urban, were range market for XX% during X.X% XX% compared blends the suburban. the X.X% the first is in in XX% a very and We're quarter. to us. important So Occupancy quarter

have performer So a along been for the us. strong move D.C. corridor more XXth Street we're as going forward, bit also we the supply a Expectations down Navy around Yard. has little to

bit to there. of little continue see we'll So pressure a

of kind right to good growth tell it's how shakes just we job market. early As demand out. about that relates too feel now, there, and that it But to

Tom Toomey

new and the go of these much Yes, bump. this cycles, would for not a and tell you, impact else put jersey I out work marketplace. election on presidential the just in and D.C., turns is there's guys to It on stay Toomey. particularly somebody

that dynamic root think and to I the return will. And D.C. in if return that to if takes could a significant office. you change office, So is sees

So wait we'll plays out. it see and how

kind days is XX about in that know of we one play. think to where I going

Operator

BMO Capital next John Kim is Markets. Your coming question from from

John Kim

to X% to versus new July X% you wanted on want one the lease make on I case. focus Mike with the follow-up that to of by down in wanted the coastal in think just was we the basically July Sunbelt, up to X% to question gave I too imply sequentially on much mentioned of That was rates X% Sunbelt. weakening markets. that to sure data. month I But July. coastal don't I would that answer rates driven was in the And you know an Austin's

Michael Lacy

East across Coast kind a growth. it's more more D.C., go in deceleration specific and bit -- New saw probably actually of Baltimore, Like July, little from York, humming a place we saying, they it's John, were right around like now the was board. to it's you X% when to to May I the X%

it some sub-X% basis for the to you in XX of in most Sunbelt back the pushing bit in renewals Sunbelt. the at the we're tell upwards growth. And markets, in closer they've of a we're around actually May then higher XX relates were the new little part, board points. So seeing of been seeing May, for up But to little X.X% as come I'll coastal X%, to in than the Coast, we it's bit. same lease back today down the a terms time, July And it's -- across than versus

guiding the So renewal a new now. bit a on lease little right bit stronger Sunbelt weaker side, the the little on

John Kim

at different of DCP compare mentioned then, need the you do those? XX.XX? acquisition to achieve or that you're versus investing What compare you Okay. Joe, development at forward potentially with next couple And And with starts to your you investments you that looking of where a X yields IRRs yields? years. over move do development kind Or

Joseph Fisher

Yes.

absolute of the investor marketplace available from us rates capital. we're perspective. in either the cost looking X% to That's of The type of high still to that number that kind where perspective, what bit challenge deals start bit and a cap Xs we're are, is a on that relative quite is what compelling today in are cautious So a a spread yield or little seeing a I development relative keeps higher. our those But at history. actually own was from yields basis little then a on new current obviously generally trending think

at kind day of you're over versus comparable to point minus product or then a looking basis X, So XXX plus yield growing in cap XX market and differential time. type that rate that for

thinking about of kind piece. that we're that's So how

platform we've about, out of do pivot one be DCP, things to our by ventures, it I are into and time, think within it about done thinking as and acquisitions, joint to development, different the tend read may platform investing be, lot the of reason. areas, good in we those over flex is whatever a We

business, part and contrast compare state so been we a that's X% joint little there slower. which, in we across I'd are on risk. That has enterprise a earnings of acquisition little under bit the right the as DCP, know, bit and now. DCP steady are said, more just side, as of we kind and to partner, you of returns looking venture acquisitions trying say, capital our the that we're And the with allocate

it with feel we there. comfortable So

So more recycling a piece. that's of probably

little and and and compare a contrast of development. DCP pivot So amongst bit less a

Operator

Next coming question Wedbush. Rich Anderson from from is

Richard Anderson

rearview that's broader of the back So now some you're that impact now? all stuff is question stuff some are you're When conservatism kind for you that's that were your just and of tougher of Or maybe occupied. think of out, ahead the you a the they know stuff. when getting mirror? sort feel laying out about jobs XX% the right you year. past curious delivered growth challenges in some or of the consider worst that just XX% your -- lay than XX% delivered, Is mentioned numbers challenges me. it of is the I'm but I finished. the the of of supply, in numbers standpoint. like think you and for kind from Other do income you mind But just When where half compounding

Joseph Fisher

guess it off in. maybe I may kicking others jump and

concessionary kind last time of let's in of that you September, frame, activity fall up. at November where where at, ramp as we As year, kind that's start look saw deliveries October, really increase to to we're back

I time, rates, the a You a where market at big gap spreads. look think a in had different we're Obviously, that at in surge are pretty than we right? capital in very point environment. in out we

availability. capital And rates about to point, You potentially at type up were also up that X% in talking being we high the had a drying of Xs of level. cap

in weak a ahead, So stack year deliveries roll. so a if about think refi point big a looking plus a developer, rent time, very at as a and time. Also, different bit capital your face the of you little environment at that of of you're kind you're more up in in seasonally period nervous

we've as to supply, forward you the over least different next better is the to of it it have a XX think XQ. and and anticipated months, over environment So deliveries year, XX at as months, over on better avoided was much capital recession, where it's I than last the forward look for environment we, been kind next fast than date, has assets the demand or the obviously, last

said, the levels That XQ have at feels of in that and to environment saw kind XQ and are definitely that going So we deliveries continue better. we XQ. into

So what coming that skis also macro if better, keep coming our there's out household better. macro in is us And knowing to want get think cautious there. that's keep a formations keeps over jobs opportunity don't I there's out still risk on we

for see of for prudent. So on year but ends report better through we weak out kind now, seasonally up then period up, that cautious and how now put get of that laid time. right we've hopefully, be what being back it's here, to numbers And them and we'll than

Tom Toomey

and is on the look the business question. which see future. in have a to in a my to blocking like And this the lot is horizon trying investment Toomey. going It's type diverse you're the really time very this challenges base that and that perspective, Rich, fundamental we feels benefit probably provocative tackling through. last depends we'll X and volatility the it more value creators. And And business, companies diverse years, see more

are like multifamily, supply-demand So as it market you going get a product, we you the financeable to in the future, looks a about when deficits. very meaning going to get interest shortage. out around rates when always a to about time you fundamentals Can And to think window in out. settle We're X%. and that's continue print

anybody the I you in at than that. think it good really and then we've better And at can focused been space, pretty we're darn core, that operate else the on aspect.

to than pivoting threat, got smart a be heck, resilient, it. The capable value be we just is heck absorb we've States. window It about have time quite opportunities this will markets. an basis. supply a in then time the built I've in adjust. bigger all bit think And always that There to it is we run, United a over market It country takes in those finds it, short to the price seen way So grow. And that creators to future. in have opportunity the

kind So last for for future. in encouraged X the Grateful us. about of years the mirror the rearview I'm were

Richard Anderson

Very provocative answer.

wonder through versus exposure efficient know you're AvalonBay now? looking are what to of form though, make through the EQR the both that frontier, your and already that question, going XX% of what of that. don't second gone at The imitation to I best coastal you've Sunbelt, you're there. in flattery. when Sunbelt mind, balance Is I

Tom Toomey

it's team uncover a the an probably look future, balance analytical have to more Joe present. the We interesting our you if what and have I like think when to like they will. it cities and at has of question. lot done on basis to thoughtful answer. an I trying Chris

for kind turned was a the of city be to tremendously, grew a If aspect. dynamic type similar us ago, out that and capital of you XX warehouse Nashville years realized Austin,

to the new that next wave in of economy. a prosper So trying cities will find

success I kind that we think it's we're have rate. a risk, buying door, like high really theory the one where about. starting like with. thinking certainly where the next base of the We of we're low We

windows, is, grow to aspect back I we'll markets look that's years. to So to look at a we shrink. which as markets dynamic platform and what always we the and X-year X-year kind XX like But of at and need we sit that need windows

Operator

is from Kramer coming Adam next from Morgan The question Stanley.

Adam Kramer

range, the and peers looking point looks to the range it at Just XXX low us revenue guidance high the a range in the second basis to kind own end quarter. kind I compare compare it's guidance of like same-store of the that end. or to your even past If in

a I wider than it's those. bit think

kind about kind of outcomes So that earlier unchanged drives for view potential what wider of your of kind guidance just to second comments half the year? relative second with kind in to the your of wondering, an the of regards thinking about too, the year. range half earlier, Wondering of

Joseph Fisher

a aspects half? Adam, other out we you we in perform? How first market and given it And as I growth we did rent felt the between in the unknowns, just occupancy volatility. of kind mean of so laid that there's specific right, prudent. in performance as there income volatility blended to lease rates Do have continue the in, certain drivers great have go

the and it's activity half. any think get more we little bit lost anyone the a year, least. has on of think in November. And little I here we us don't swing October, that. And here went in too September, back tried with to the probably of That as we of get are last I to into repeat little bit surprised side this at bit a accurate table desire a not on a tight

the being And with range course. so course, half back that, just of help help wider does of conservative with a that, in

not going throughout finish it's update the how be we rate, how about So to I do do we think the year.

call in push and third we're into talking year, clearly So we deliver it visibility next strong as out course, year as can closing our of kind be very hopefully, focused on quarter these earn which then, the the into about renewals greater we we have up. on of and

Adam Kramer

your just minutes answer, really of couple a back That's helpful. Rich, kind And to Great. ago. from then maybe tying of

the pricing kind Just deliveries, of But kind thinking then And of you do year. typical again and to about able in of into when of given not or quarter market asking thinking power growth Sunbelt, you kind even of year. cadence rent month mentioned again, obviously, you'll the of will the return you push about fall, deliveries, pricing seasonal kind a beyond this or of specific above of a cadence next just when think right, for specific the push maybe kind curve? be kind

Michael Lacy

see and Good new term. the closely, monitor it But relates year, as a obviously, renewal say very now, more us as And are I'd comps, the next growth. we aggressive right bit turn corner Adam. going question. to -- lease little it's get something easier growth go anniversary continue you're you to going starting to seeing It's of you're we're to near positive not here to in

get a could up So we're think year, growth our for as by our next looking day blend we go total revenue now, and day to start But going taking I as they forward. into at obviously strategy could.

Operator

The next question from UBS. is coming Probandt from Ami

Ami Probandt

your me. were Just have similar same-store get To as using revenue are do processes one who bad improving or a for revenue calculation you peers for would be if growth from same the what with peers? seeing better a same-store debt, you a accrual comparison apples-to-apples benefit

Joseph Fisher

any honest, us do that. on I We methodologies. disclosure and provide full have absolute of not don't To really think be

the existing represents most to of that that's what believe we appropriate have. try of methodology the all base I us we kind think utilize best residence AR and and

meant on been consistent we don't on as they be have worked due think perhaps the are may is don't others residents different our we've collectible. we in eviction The typical at it for going are that which cover are to to those plans individuals payers or out is AR very there. us, pools. But rest total I'd volatility throughout the necessarily have to think that think point so really our I out in do today reserved and I same And roughly balance, that approach. late that go time what you of we're say this in slightly payment our XX% has be

we're So today. where at we feel good about

the delinquents down to long-term continue see We in come portfolio.

So been we XXX or had delinquents. of at stuck kind so long-term

lot the standard from we've screening a front. under perspective, perspective, that on a a gone think of I activity process from that XXX we've improvements, credit had

improve that helping cash the that's some little they down need And of whittle the for So and and versus collections, bit obviously, reserve. continue on to that, AR a margin.

bit better. we've half seen bad debt come little first a in So

plus of We in talked XX help the half believe to it's maybe year-over-year. the earlier. come screening in So the these delinquents in get minus about bps some down we we long-term more second as numbers there's

So to upside say hopefully, be would we as peers to numbers our go is it's that forward. an what at. But hard

Operator

next Your from question Goldfarb is coming Piper Sandler. from Alexander

Alexander Goldfarb

peak over there be peak. one lot this of to question. There's just I'll double a early is going versus ask of June discussion a

few it other You nuance mean generally normal we're Sunbelt. like East really guys Coast, of what's seem of volatility Coast, points on percentages West I leasing most like are and normal like the seems seasonality talked and But course. obviously a within splitting about almost have each hairs. going the

seeing you from than things and specific give and pause? view there normal what truly you other hearing what really So we're or anything you're are normal is peers that true your are that variances about is seasonality guys talking that

Joseph Fisher

still and the with I per in We giving anything in of don't residents is The high volatility felt result strategy. occupancy. unit, blends, think is as Mike being talked X.X a there collections, May that's today. pause about us traffic. really talked April the the pricing at about, really true Mike the good our

traffic. good first into seeing going leasing are part the We're We of season.

test We So rents, numbers. it. the if that's good do really you're time to going to were seeing

a what to in pulled time. So tried market little ultimately, normally we we and the over market we said, back, found equilibrium. push occupancy would reacted. And Xx We pushed reacted. pushed the We point lost aggressively. Mike we we bit of at that

why renews stabilizing are that's here. so occupancy That's And blends why and stabilized.

be If time to pushed our job. think that's push, I don't do I We window volatility. the didn't we'd saw right we it the doing we year. that, a the So think of

where same has separate strategy Mike and lot are the of about great. that retention I time, going on a kind customer At experience renewals pricing talked think exists the

And working out. be push that don't seems there. so we And why to

you're result push think It's and XX and We're market right. backed but course of XX, bit. to little what push talking bps So here there, normal it's I trying we're kind volatility. a of the a

Operator

from from Next Ann coming is question Street. Chan Green

Ann Chan

like on Could comment a the of more and for in markets achieved growth you other saw bit by rest little year? trends year-over-year for muted that a West Coast the more bps looks XX regions question Out the one around XXX reads a XQ, bps improvement. it Just retention particular me. flat. improvement little relative cap how of or retention through to the semi strategy bit regions

Michael Lacy

think regions, Monterey more that's have these market. have us, bit would little Ann, migrant we out that good have markets workers volatility. where of that a that do I we do you, question. some I have you some tell Yes, with and a And in of Peninsula, for come

So things has decrease others, fact again, has we pretty will lot turnover. A it mentioned well, fewer seen just pretty of test board. all Joe dividends. But to rents some consistent. think board. pretty the that we it's this the across that that to pay with while And with We've do people experience much And the homes well. the our a again of this this have continue to we do into that's moving to far as just want on put customer much But across do as project. we to buy the the the out been for typically higher

was we driven of to [ different at again, we'll into the markets, But And see of a think dive you good. by what far, levers so lot some West to that I so really through ]. have and look initiative. this Coast, so can silliness drive But

Operator

question Linda from Tsai from Jefferies. next Your coming is

Linda Yu Tsai

Just question. soonest where market see new one lease growth slightly Sunbelt sit you could or hit The flat ]? today, positive [ from

Michael Lacy

question. It's a good

see for little to to and continuing Texas. is to more while. expect inflection a us see going Starting places little probably Florida Austin in I to lease compared the growth, like Austin, for continue Now bit that's a

right little it see next But more followed terms by And Florida Nashville in Texas of then Tampa as third fire now, is Sunbelt markets. bit would year. so maybe we and be say, into could under we go in I'd probably a

Operator

coming question next from Mason Our Guell Baird. is from

Mason P. Guell

On equity associated are your the what assets now for plans investments preferred maturing the that investments soon, stabilized? these are

H. Andrew Cantor

Yes. is Andrew. This

supplement So in you that are those the if dates extension the without numbers investments, for the maturity at on look different those are options.

have some available. So are of of option maturing the within form that extension the currently, year DCPs all

to talking developers, to their or asset opportunities but we're a those different assets sell developers are looking recap asset, conversation. extend those So either is their to their at each different to

Operator

We CEO, for I'd of to reached session. comments. Chairman floor Mr. the question-and-answer end the like hand our and over to back closing Toomey,

Tom Toomey

and operator, Conferences ISI seeing of of and the in Bank of Evercore Thank you to September at and you, and We events many you time, all UDR. forward look thank support your and upcoming other for interest America tours.

So your that, of balance care. summer. with the Take enjoy

Operator

you. Thank today's That conclude teleconference. does

your you participation for your thank today. line time, have at may and day. wonderful You a this We disconnect

UDR (UDR) 31 Jul 242024 Q2 Earnings call transcript