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UDR's Q1 FFO In Line With Estimates, 2022 Outlook Raised
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UDR Inc. (UDR - Free Report) reported first-quarter 2022 funds from operations (FFO) as adjusted per share of 55 cents, in line with the Zacks Consensus Estimate. The figure is 17% higher than the prior-year quarter’s 47 cents.
An increase in revenues from rental income fueled the quarter’s top-line growth. Robust operating trends and strong pricing power were major contributing factors.
Quarterly revenues climbed 18.5% year over year to $357.3 million. The top line surpassed the Zacks Consensus Estimate of $353.8 million.
As of Mar 31, 2022, cash revenues collected for the first quarter were in the range of 98-98.5% of the total billed revenues, and UDR expects collections to remain within this range throughout 2022.
Inside the Headlines
In the reported quarter, same-store revenues (with concessions reported on a cash basis) increased 10.8% year over year. Same-store expenses were up 4.2%. Consequently, the same-store net operating income, with concessions reported on a cash basis, improved 14%.
The residential REIT’s weighted average same-store physical occupancy increased 20 basis points (bps) sequentially to 97.3%. The first-quarter annualized rate of turnover shrunk 530 bps year over year to 34.2%.
Portfolio Activity
UDR’s development pipeline aggregated $689 million at the end of the reported quarter and was 66.5% funded. The active pipeline includes seven development communities for 1,832 homes.
At the end the quarter, the company’s pipeline of densification projects, including the addition of 58 new apartment homes in three communities, aggregated $27 million and was 53.2% funded.
The company’s Developer Capital Program investment, including accrued return, totaled $331.3 million with a weighted average return rate of 10% and a weighted average estimated remaining term of three years at the end of first-quarter 2022.
Balance Sheet Activity
As of Mar 31, 2022, UDR had $1.7 billion of liquidity through a combination of cash and undrawn capacity under its credit facilities. The total debt was $5.5 billion as of the same date, with no remaining consolidated maturities until 2024. In addition, net debt-to-EBITDAre declined to 6.4X in the first quarter from the year ago’s 7.0X.
UDR ended the reported quarter with a weighted average interest rate of 2.80% and weighted average years to maturity of 7.4 years.
Guidance
The company revised the outlook for the full-year 2022.
It expects second-quarter 2022 FFO as adjusted per share in the range 55-57 cents. The Zacks Consensus Estimate for the same is pegged at 56 cents.
For 2022, FFO as adjusted per share is expected to be in the range of $2.25 to $2.31, revised upward from $2.22-$2.30. The Zacks Consensus Estimate for the same is pegged at $2.28.
For 2022, the company projects 8.5-10% year-over-year growth in same-store cash revenues up from the prior range of 6.5-8.5%, whereas same-store NOI growth is estimated to be 10.75-12.75% up from 8.5-11.5%.
SL Green Realty (SLG - Free Report) reported first-quarter 2022 FFO per share of $1.65, beating the Zacks Consensus Estimate by a cent. However, the reported FFO per share compared unfavorably with the year-ago quarter’s $1.73.
SLG first-quarter performance was driven by a better-than-expected top line and healthy leasing activity.
Crown Castle International Corp.’s (CCI - Free Report) first-quarter 2022 adjusted funds from operations (AFFO) per share of $1.87 surpassed the Zacks Consensus Estimate of $1.80. Net revenues of $1.74 billion exceeded the Zacks Consensus Estimate of $1.70 billion.
Growth in site-rental revenues due to elevated tower space demand aided the top-line performance. CCI also raised the outlook for site-rental revenues and adjusted EBITDA for 2022.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.
Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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UDR's Q1 FFO In Line With Estimates, 2022 Outlook Raised
UDR Inc. (UDR - Free Report) reported first-quarter 2022 funds from operations (FFO) as adjusted per share of 55 cents, in line with the Zacks Consensus Estimate. The figure is 17% higher than the prior-year quarter’s 47 cents.
An increase in revenues from rental income fueled the quarter’s top-line growth. Robust operating trends and strong pricing power were major contributing factors.
Quarterly revenues climbed 18.5% year over year to $357.3 million. The top line surpassed the Zacks Consensus Estimate of $353.8 million.
As of Mar 31, 2022, cash revenues collected for the first quarter were in the range of 98-98.5% of the total billed revenues, and UDR expects collections to remain within this range throughout 2022.
Inside the Headlines
In the reported quarter, same-store revenues (with concessions reported on a cash basis) increased 10.8% year over year. Same-store expenses were up 4.2%. Consequently, the same-store net operating income, with concessions reported on a cash basis, improved 14%.
The residential REIT’s weighted average same-store physical occupancy increased 20 basis points (bps) sequentially to 97.3%. The first-quarter annualized rate of turnover shrunk 530 bps year over year to 34.2%.
Portfolio Activity
UDR’s development pipeline aggregated $689 million at the end of the reported quarter and was 66.5% funded. The active pipeline includes seven development communities for 1,832 homes.
At the end the quarter, the company’s pipeline of densification projects, including the addition of 58 new apartment homes in three communities, aggregated $27 million and was 53.2% funded.
The company’s Developer Capital Program investment, including accrued return, totaled $331.3 million with a weighted average return rate of 10% and a weighted average estimated remaining term of three years at the end of first-quarter 2022.
Balance Sheet Activity
As of Mar 31, 2022, UDR had $1.7 billion of liquidity through a combination of cash and undrawn capacity under its credit facilities. The total debt was $5.5 billion as of the same date, with no remaining consolidated maturities until 2024. In addition, net debt-to-EBITDAre declined to 6.4X in the first quarter from the year ago’s 7.0X.
UDR ended the reported quarter with a weighted average interest rate of 2.80% and weighted average years to maturity of 7.4 years.
Guidance
The company revised the outlook for the full-year 2022.
It expects second-quarter 2022 FFO as adjusted per share in the range 55-57 cents. The Zacks Consensus Estimate for the same is pegged at 56 cents.
For 2022, FFO as adjusted per share is expected to be in the range of $2.25 to $2.31, revised upward from $2.22-$2.30. The Zacks Consensus Estimate for the same is pegged at $2.28.
For 2022, the company projects 8.5-10% year-over-year growth in same-store cash revenues up from the prior range of 6.5-8.5%, whereas same-store NOI growth is estimated to be 10.75-12.75% up from 8.5-11.5%.
Currently, UDR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Performance of Other REITs
SL Green Realty (SLG - Free Report) reported first-quarter 2022 FFO per share of $1.65, beating the Zacks Consensus Estimate by a cent. However, the reported FFO per share compared unfavorably with the year-ago quarter’s $1.73.
SLG first-quarter performance was driven by a better-than-expected top line and healthy leasing activity.
Crown Castle International Corp.’s (CCI - Free Report) first-quarter 2022 adjusted funds from operations (AFFO) per share of $1.87 surpassed the Zacks Consensus Estimate of $1.80. Net revenues of $1.74 billion exceeded the Zacks Consensus Estimate of $1.70 billion.
Growth in site-rental revenues due to elevated tower space demand aided the top-line performance. CCI also raised the outlook for site-rental revenues and adjusted EBITDA for 2022.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.
Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.