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UDR, Inc. (UDR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid operating performance: GAAP diluted EPS of $0.23 and FFOA per diluted share of $0.61; same‑store revenue/NOI growth of 2.6%/2.8% with occupancy 97.2% .
  • Against S&P Global consensus, UDR posted a beat on GAAP EPS ($0.23 vs $0.14*) and a slight beat on revenue ($421.9M vs $421.0M*); management reaffirmed full‑year 2025 ranges and established Q2 2025 guidance .
  • Regional strength was led by the East Coast (D.C. best market), with West Coast momentum (San Francisco, Seattle) offsetting Sunbelt supply headwinds; blended lease rates improved sequentially into April, setting up H1 to finish at the high end of plan .
  • Balance sheet remains liquid (> $1B liquidity) with net debt/EBITDAre at 5.7x; transactional activity included two asset sales ($211.5M), a Riverside development start (~6% yield), and steps to consolidate the 1300 Fairmount position in Philadelphia .
  • Potential stock catalysts: confirmation of sequential NOI/lease‑rate acceleration into Q2/Q3, possible guidance update in July, and clarity on Fairmount consolidation and DPE cash pay trajectory .

What Went Well and What Went Wrong

  • What Went Well

    • “2025 is off to a very solid start” with same‑store revenue/NOI growth above initial expectations; momentum in occupancy, lower concessions, improving pricing power .
    • Customer Experience initiatives drove a 300 bps reduction in annualized turnover YoY; renewal growth mid‑4% and sequential improvement in new lease rates supported blended rate gains .
    • East and West Coasts outperformed: D.C. blends ~4% in April; Seattle/SF blends 4–4.5%; West Coast annual supply low (1–1.5% of stock) .

  • What Went Wrong

    • Same‑store NOI contracted sequentially (-0.9%) on seasonal expense timing; G&A was elevated in Q1 (timing) .
    • Sunbelt continued to lag due to elevated supply; Austin remains a laggard and likely needs 2025–2026 to normalize .
    • 1300 Fairmount remained on nonaccrual with plans to consolidate; near‑term drag from funding cost and submarket challenges (mid‑80s occupancy) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$413.6 $422.7 $421.9
GAAP Diluted EPS ($)$0.13 ($0.02) $0.23
FFO per diluted share ($)$0.60 $0.48 $0.58
FFOA per diluted share ($)$0.61 $0.63 $0.61
Same‑Store NOI Growth % (YoY)—2.1% 2.8%
Same‑Store Operating Margin %68.2% 69.2% 68.3%
Same‑Store Occupancy (%)97.0% 96.8% 97.2%
Consensus vs ActualQ1 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD)$409.8M*$421.2M*$421.0M*
Revenue Actual ($USD)$413.6M $422.7M $421.9M
GAAP EPS Consensus Mean ($)$0.102*$0.0048*$0.140*
GAAP EPS Actual ($)$0.13 ($0.02) $0.23

Values with * retrieved from S&P Global.

Segment breakdown (Same‑Store; YoY and Sequential):

RegionYoY RevenueYoY ExpenseYoY NOISequential RevenueSequential ExpenseSequential NOIOccupancy Q1 2025
West2.8% 3.9% 2.4% 0.6% 1.4% 0.3% 97.2%
Mid‑Atlantic4.9% 4.6% 5.0% 1.0% 6.1% (1.2%) 97.6%
Northeast4.1% 2.7% 4.9% 0.8% 6.8% (2.4%) 97.4%
Southeast0.5% (0.1%) 0.7% 0.1% 1.2% (0.4%) 97.0%
Southwest(0.2%) (1.1%) 0.4% (0.3%) 0.3% (0.7%) 97.3%
Other0.5% 0.9% 0.4% (0.4%) 5.2% (2.7%) 96.4%
Total2.6% 2.3% 2.8% 0.5% 3.5% (0.9%) 97.2%

KPIs (Same‑Store):

KPIQ1 2024Q4 2024Q1 2025
Effective Blended Lease Rate Growth (%)——0.9% (Total)
Effective New Lease Rate Growth (%)——(2.9%) (Total)
Effective Renewal Lease Rate Growth (%)——4.5% (Total)
Annualized Turnover (%)34.8% —31.7%
Same‑Store Occupancy (%)97.0% 96.8% 97.2%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Diluted EPSQ2 2025N/A$0.11–$0.13 Established
FFO per diluted shareQ2 2025N/A$0.61–$0.63 Established
FFOA per diluted shareQ2 2025N/A$0.61–$0.63 Established
GAAP Diluted EPSFY 2025$0.56–$0.66 (Feb) $0.56–$0.66 (Apr) Maintained
FFO per diluted shareFY 2025$2.45–$2.55 (Feb) $2.45–$2.55 (Apr) Maintained
FFOA per diluted shareFY 2025$2.45–$2.55 (Feb) $2.45–$2.55 (Apr) Maintained
Same‑Store Revenue GrowthFY 20251.25%–3.25% (Feb) 1.25%–3.25% (Apr) Maintained
Same‑Store Expense GrowthFY 20252.75%–4.25% (Feb) 2.75%–4.25% (Apr) Maintained
Same‑Store NOI GrowthFY 20250.50%–3.00% (Feb) 0.50%–3.00% (Apr) Maintained
DividendFY 2025$1.72 annualized (Feb) $1.72 annualized (Apr reaffirmed) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Customer Experience & TurnoverElevated retention noted entering 2025; tools/process improving 300 bps YoY turnover improvement; April marked 24th consecutive month of YoY turnover improvement; targeting further margin expansion Improving retention; structural margin tailwind
Innovation & Other IncomeValue‑add initiatives drove high single‑digit other income; WiFi/package lockers rollouts Other income growth high single‑digit to low double‑digit; ~11% of revenue; bulk WiFi rolled to ~30k homes, +10k in 2025 Continuing execution; incremental revenue
Regional DynamicsEast/Northeast steady; West mixed; Sunbelt pressured by supply East Coast strongest (D.C. best); West Coast momentum (SF/Seattle); Sunbelt lags but improving in FL; Austin laggard Coastal strength; selective Sunbelt inflection
Supply & AffordabilitySupply peak in 2024; affordability supports rentership Supply decelerating through 2025; renting ~60% more affordable than owning in UDR markets Macro tailwinds strengthening
Capital Deployment (Dev/JV/DPE)Raised unsecured debt; DPE portfolio fully funded; ESG published Riverside start (~6% yield); JV pipeline with LaSalle re‑activated; SF preferred recap (12% ROE; ~70% cash pay); plan to consolidate Fairmount senior loan Opportunistic, recycling‑funded

Management Commentary

  • “2025 is off to a very solid start. Our first quarter same‑store revenue, expense and NOI growth exceeded initial expectations… lower resident turnover, higher occupancy, lower concessions and improving pricing power.”
  • “Continued enhancements in how we measure, map and orchestrate the customer experience have increased the probability of renewal… we expect this to drive further year‑over‑year improvement in turnover and margin expansion in years ahead.”
  • “East Coast… strongest region… D.C. best‑performing market; Boston above expectations. West Coast… positive momentum across Seattle and the San Francisco Bay Area.”
  • On Fairmount: “On a forward basis… about a 4% yield on ~$183M basis in year 1… path to ~5% as ops initiatives take hold.”
  • On bulk WiFi: “Fully set up day 1… property‑wide coverage… priced commensurately with market; rollout not impacting ability to push renewals.”

Q&A Highlights

  • Rent trends and guidance risk: supply decelerating, blends in April mid‑2%; only ~50 bps acceleration needed vs April to meet full‑year; downside risk minimal (~20 bps to SS revenue) .
  • Fairmount consolidation: plan to take control in Q2; forward NOI ~$6–7M with ops upside; submarket challenged (mid‑80s occupancy) .
  • Sunbelt/Austin: FL (Tampa/Orlando) inflecting; Austin likely end‑2025/2026 normalization; small NOI exposure (~1.5%) .
  • DPE appetite shifting to operating asset recaps with higher cash pay, lower development exposure .
  • Bad‑debt/AI screening: higher deposits (+17%), more cosigners (~10% of apps), credit scores +20 pts; pathway to pre‑COVID bad‑debt levels (incremental $15–$20M cash‑flow opportunity) .

Estimates Context

  • Q1 2025 vs Consensus (S&P Global): GAAP diluted EPS $0.23 vs $0.14* — significant beat; total revenues $421.9M vs $421.0M* — slight beat .
  • Q4 2024 vs Consensus (S&P Global): GAAP diluted EPS ($0.02) vs $0.0048*; revenues $422.7M vs $421.2M* — revenue slightly above, EPS below on one‑time items .
  • Implications: Street models likely lift near‑term revenue/NOI run‑rate for coastal markets and modestly increase FFOA trajectory given sequential blend improvements and development/JV lease‑up contributions .

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Coastal market strength (D.C., Boston, SF, Seattle) plus improving April blends point to H1 finishing toward the high end of plan; watch July call for potential guidance raise .
  • Structural margin tailwinds from Customer Experience (lower turnover), bad‑debt improvements, and other income initiatives (WiFi, lockers) support NOI expansion beyond 2025 .
  • Sunbelt remains mixed but Florida shows early improvement; Austin exposure is small and expected to lag until supply clears .
  • Balance sheet/liquidity (> $1B) with net debt/EBITDAre 5.7x provides optionality to fund development starts and JV acquisitions via recycling .
  • Near‑term event path: consolidation of Fairmount asset, continued lease‑up NOI from recent developments, and LaSalle JV deployment; monitor cash‑pay rates on DPE .
  • Dividend reaffirmed ($0.43 in Q1; $1.72 annualized), underpinned by resilient occupancy and steady renewal growth mid‑4% .
  • Trading lens: strong EPS/revenue beat vs consensus, reaffirmed guide, and visible operating momentum are supportive; risk‑reward hinges on Sunbelt supply digestion and execution at Fairmount .

Additional notes and disclosures:

  • Q1 press release reaffirmed full‑year guidance and established Q2 ranges; supplemental provides detailed SS regional tables and balance sheet metrics .
  • Transactions: Q1 dispositions Leonard Pointe ($127.5M) and One William ($84.0M) .
  • Dividend: $0.43 declared for Q1 2025, paid April 30; annualized 2025 dividend $1.72 maintained .