UDR, Inc.UDR reported third-quarter 2026 funds from operations as adjusted (FFOA) of 65 cents per share, surpassing the Zacks Consensus Estimate of 64 cents. The figure remained unchanged year over year.
Rental revenues declined 1.1% year over year to $428.08 million but outpaced the consensus mark of $427.47 million. The decrease reflected the impact of property dispositions, partly offset by growth from same-store and acquired communities.
UDR's Same-Store NOI Growth Remains Positive
Same-store revenues increased 1.8% year over year. Same-store NOI rose 1.6% from the prior-year quarter, as operating expenses jumped 2.2% from the previous-year quarter.
The West and Northeast regions led the performance. West same-store revenues and NOI grew 3.9% each, while Northeast revenues increased 2.5%, and NOI advanced 3%. The Southeast and Southwest recorded NOI declines of 2.2% and 0.5%, respectively. These same-store comparisons exclude the communities contributed to UDR's Apollo joint venture.
UDR's Leasing Metrics Reflect Solid Retention
The company reported effective blended lease rate growth of 2%, supported by renewal lease rate growth of 4.1%, while new lease rates declined 1.2%. Same-store physical occupancy was 96.5%, down 20 basis points year over year.
Annualized resident turnover improved to 48% from 51.7% in the year-ago quarter. Management attributed operating strength to sustained occupancy, improved bad debt trends and resident retention. The portfolio comprised 60,617 apartment homes, including 634 under development, at September-end.
UDR Expands Its Strategic Partnership With Apollo
UDR closed its previously announced $2 billion strategic partnership with Apollo after quarter-end, contributing 19 apartment communities comprising 7,059 homes to a joint venture. The transaction generated $1.34 billion in equity proceeds for UDR, which retained approximately one-third ownership.
The company will continue managing the communities and earning asset management fees. Management expects the transaction to strengthen its balance sheet, reduce leverage and provide capital for future investments. UDR also retains an option to repurchase Apollo's interest under specified terms beginning after the fifth anniversary of closing.
UDR Advances Capital Recycling and Buybacks
The company sold two apartment communities in Seattle, WA, and Nashville, TN, comprising 412 homes, for $183 million. It also expanded its LaSalle Investment Management joint venture to approximately $958.3 million by contributing a Nashville community, generating $103.2 million in cash proceeds. Through October, UDR repurchased approximately 5.2 million shares for $185.1 million.
UDR continued reducing its debt and preferred equity investment portfolio. It acquired a 483-home community in California's Inland Empire for an incremental cash investment of $160.3 million and received a $29.5 million preferred equity repayment from an Orlando property.
UDR Maintains Its Debt Coverage and Liquidity
Total indebtedness stood at approximately $5.8 billion as of Sept. 30, 2026, with a weighted average interest rate of 3.45%. Available liquidity was approximately $641.6 million.
Consolidated net debt-to-EBITDAre, adjusted for nonrecurring items, remained at 5.5 times year over year. Fixed-charge coverage improved to 5.0 times from 4.9 times, while consolidated debt represented 32.3% of total assets versus 32.6% a year earlier.
UDR Raises Its 2026 FFOA Outlook
UDR increased its full-year 2026 FFOA guidance to $2.54-$2.56 per share from $2.49-$2.57. The revised midpoint of $2.55 is 2 cents above the previous midpoint. The Zacks Consensus Estimate of $2.53 lies below the updated range. The company projects fourth-quarter FFOA of 63-65 cents per share, with the consensus estimate pegged at 64 cents.
UDR raised its full-year 2026 same-store revenue growth outlook to 1.4%-1.8% from 0.75%-2% and NOI growth guidance to 0.8%-1.2% from 0%-1.25%. It also lowered its same-store expense growth forecast to 2.7%-3.1% from 2.75%-3.75%.
UDR's Zacks Rank
Currently, UDR carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
United Dominion Realty Trust, Inc. Price, Consensus and EPS Surprise
United Dominion Realty Trust, Inc. price-consensus-eps-surprise-chart | United Dominion Realty Trust, Inc. Quote
Performance of Other Residential REITs
Camden Property TrustCPT reported third-quarter 2026 core FFO of $1.68 per share, beating the Zacks Consensus Estimate of $1.67. The results reflected resilient occupancy and improving sequential leasing trends.
Invitation Homes Inc.INVH reported third-quarter 2026 core FFO per share of 48 cents, meeting the Zacks Consensus Estimate. This compares to FFO of 47 cents a year ago. While same-store NOI advanced 1.1%, margin and occupancy dipped marginally.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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This article originally published on Zacks Investment Research (zacks.com).
