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UDR - $UDR - Earnings Analysis: Strong operating and capital markets acumen.

By sagebytes —

Business Model

UDR generates revenue primarily through rental income from apartment homes within its communities, along with other income-generating activities.

Revenue Sources

  • Rental income from apartment homes (primary source).
  • Other income initiatives (property wide Wi-Fi, package lockers, amenity areas).

Income Statement Analysis

  • Net income attributable to UDR decreased significantly from $32.99 million in 4Q 2023 to a loss of $5.04 million in 4Q 2024.
  • Total revenue increased slightly, driven by growth in Same-Store communities, prior-year acquisitions, and completed developments.

Balance Sheet Analysis

  • The weighted average interest rate decreased slightly from 3.40% to 3.38%.
  • Consolidated debt as a percentage of total assets decreased slightly from 32.9% to 32.7%.

Capital Allocation

Subsequent to quarter-end, the Company completed the sales of Leonard Pointe, a 188-home apartment community in New York, for gross proceeds of $127.5 million and One William, a 185-home apartment community in New Jersey, for gross proceeds of $84.0 million.

Management Commentary

2024 was another solid year, with FFOA per share growth that exceeded our original guidance expectations despite historically high levels of new supply completions

As we look ahead, we see easing supply pressures, a resilient labor market, and relative affordability of apartments that remains attractive versus other forms of housing, collectively creating a fundamental backdrop for improved Same-Store NOI growth.

Overall Sentiment: Positive; Management expresses confidence in the company's ability to navigate challenges and drive value through operational and capital markets acumen.

Recommendation

Rating: Hold

Reason for Rating: Given the mixed financial performance in 4Q 2024 (decline in Net income, met guidance for FFOA and positive remarks from management) a hold recommendation is appropriate.

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 2/7/2025, 4:16:49 AM