In the announcement of its preliminary financial and operating results for the fourth quarter of 2024, UDR, Inc. (NYSE:UDR), a prominent multifamily real estate investment trust with a market capitalization of $14.2 billion, has disclosed figures that meet its prior guidance. According to InvestingPro analysis, UDR appears slightly overvalued at current levels, though it maintains a FAIR overall financial health score. The company expects to deliver a detailed report on its full-year performance and provide 2025 guidance on February 5, 2025.
UDR’s Funds From Operations as Adjusted (FFOA) per diluted share are anticipated to be $0.63 for the fourth quarter and $2.48 for the year, aligning with the midpoints of guidance provided in the third quarter earnings release. Same-Store (SS) metrics for the fourth quarter and the entire year surpassed the provided guidance, with revenue growth of 2.5% and 2.3%, respectively. However, expenses also saw an increase of 3.4% for the quarter and 4.3% for the year, while Net Operating Income (NOI) grew by 2.1% in the fourth quarter and 1.5% for the full year.
The company’s investment activities during the last quarter included entering agreements to sell two apartment communities, Leonard Pointe in New York and One William in New Jersey, with expected gross proceeds totaling $211.5 million, subject to standard closing conditions. With a beta of 0.88 and an attractive dividend yield of 3.95%, UDR offers investors relatively stable returns. InvestingPro subscribers can access detailed analysis of UDR’s investment strategy and comprehensive financial metrics in the Pro Research Report. Additionally, UDR received a significant paydown on its preferred equity investment in Upton Place, Washington, D.C., and maintained a $30.0 million investment balance as part of a recapitalization effort.
A notable setback was the non-cash loan reserve of approximately $37 million related to the joint venture loan investment in 1300 Fairmount in Philadelphia. This reserve is expected to impact the company’s reported net income and FFOA, with an estimated $8.0 million less income from this investment in 2025, translating to a negative impact of about $0.02 per diluted share.
The company’s effective blended lease rate growth, a key metric for assessing market demand, saw a decline of 0.6% in the fourth quarter, contrasting with the 1.8% growth reported in the third quarter of 2024. Physical occupancy rates, however, showed a slight increase, reaching 96.8%.
This news is based on a press release statement and should be considered preliminary until the full earnings report is issued. Analyst price targets for UDR currently range from $40 to $52, reflecting diverse market expectations. InvestingPro offers additional insights through its extensive collection of financial metrics and expert analysis, helping investors make more informed decisions about real estate investment opportunities.
In other recent news, UDR, Inc. has reported strong third-quarter performance for 2024, surpassing expectations and subsequently raising its full-year funds from operations (FFO) guidance for the third time to a range of $2.47 to $2.49 per share. The company also increased its same-store revenue growth guidance for 2024 to a midpoint of 2.2%.
Additionally, UDR has announced leadership changes with Mike Lacy being promoted to Chief Operating Officer and Joe Fisher taking on the role of Chief Investment Officer while retaining his current roles as President and CFO. The company also revealed plans to commence a search for a new CFO.
On the analyst front, Jefferies analyst Linda Tsai downgraded UDR shares from Buy to Hold due to concerns about persistent supply pressures in the company’s Sunbelt markets, which are expected to hinder growth in new lease rates. However, Tsai noted the reduction of bad debt could provide a modest boost in the upcoming year.
Finally, UDR has announced Q4 dividends for common and preferred stock, demonstrating its commitment to consistent shareholder value. These are all recent developments shaping the trajectory of UDR, Inc.
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