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Key Takeaways
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UDR and Apollo plan a joint venture owning 19 apartment communities with 7,059 homes, valued at about $2 billion, with Apollo investing $1.34 billion for a roughly two-thirds stake.
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UDR keeps one-third, consolidates the venture and manages the assets for a fee. The deal implies a 6.0% cap rate, and UDR holds a buyback option beginning in year five.
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The REIT is using a low-cost, permanent equity partner to recycle capital, cut debt and fund higher-growth assets, a template other public apartment owners could follow.
UDR and Apollo plan to form a $2 billion joint venture that will own 19 apartment communities, the companies announced Oct. 21, 2026.
Apollo funds will contribute $1.34 billion of equity for about two-thirds of the entity. UDR retains the remaining third.
The Portfolio
The venture covers 7,059 apartment homes. Those units average $2,058 in revenue per home, and the average community is 39 years old.
UDR keeps running the properties and collects an asset management fee for doing so. It also consolidates the venture in its financials.
Pricing and the Buyback Option
At closing, the deal implies a cap rate near 6.0%. Cap rate is a property's annual income divided by its value, a quick read on what an investor earns before debt.
UDR can repurchase Apollo's interest for a finite window that opens in year five. The expected price is a fixed 7.00% to 7.50% return to Apollo, which gives the REIT a route back to full ownership.
Where the Money Goes
CEO Tom Toomey named equity access a core priority and said the partnership fits UDR's operating strengths. CFO Dave Bragg said proceeds will fund higher-growth assets and general corporate needs, and will also pay down debt.
UDR expects the transaction to add to earnings. Citigroup and Wells Fargo structured it for UDR, while Scotiabank advised Apollo.
Why It Matters
Public apartment owners are searching for cheaper ways to fund growth. A permanent partner lets UDR sell down older assets while keeping the platform that earns fees, a question that looms over how apartment REITs manage the recovery.
For Apollo, it is a large block of income-producing apartments through its High Grade Capital Solutions business. The deal also lands as rising yields complicate REIT M&A pricing.
What's Next
Closing is targeted for Oct. 29, 2026, subject to final documentation and customary conditions. Watch where UDR redeploys the cash, and whether the venture becomes a vehicle for moving more assets in and out.
