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UDR Inc. (UDR) Meets Q1 FFO Estimates, Beats on Revenues
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Residential REIT, UDR Inc. (UDR - Free Report) reported funds from operations (“FFO”) as adjusted per share of 45 cents for first-quarter 2017, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of 43 cents.
Total revenue improved 3.8% year over year to $243.8 million. Additionally, it exceeded the Zacks Consensus Estimate of $241.8 million. Growth in revenue from same-store and stabilized, non-mature communities attributed to this increase.
In addition, the company reaffirmed its full-year 2017 FFO as adjusted per share and same-store guidance ranges.
Inside the Headlines
During the quarter, same-store revenues increased 4.6% year over year, while same-store expense climbed 3.8%. Consequently, same-store NOI rose 4.9% year over year. The company’s same-store physical occupancy expanded 50 basis points (bps) year over year to 96.8%. The first-quarter annualized rate of turnover contracted 100 bps year over year to 40.8%.
At the end of the first quarter, UDR’s development pipeline aggregated $1.1 billion. This included $279.3 million of completed, non-stabilized projects and $850.6 million of under-construction developments.
As of Mar 31, 2017, the company had around $920 million available, through a combination of cash and undrawn capacity on its credit facilities. Further, the company’s total debt was $3.5 billion as of the same date.
Notably, during the quarter, the company established a $500.0 million unsecured commercial paper program in the U.S. At the end of the quarter, $220.0 million of commercial paper was outstanding on the program at a weighted average rate of 1.24%.
Portfolio Activity
During the quarter, the UDR/MetLife joint venture accomplished the construction on Residences on Jamboree, a 381-home community situated in Irvine, CA, with an estimated cost to construct of $125.0 million at 100%. The company also exercised its fixed-price purchase option to acquire CityLine, a 244-home West Coast Development joint-venture community in suburban Seattle. UDR’s total investment in CityLine amounted to $86.5 million.
Further, the company strengthened its West Coast Development joint-venture relationship through a $15.5 million investment in CityLine II. It is a 155-home development community situated near the recently purchased CityLine in suburban Seattle.
On the other hand, during the quarter, the company sold Hanover Village, a wholly owned parcel of land positioned in Mechanicsville, VA, for total proceeds of $3.5 million.
Guidance
For second-quarter 2017, UDR projects FFO as adjusted per share in the 45–47 cents range. The Zacks Consensus Estimate of 46 cents lies within this range.
For full-year 2017, the company projects FFO as adjusted per share in the range of $1.83–$1.87. The Zacks Consensus Estimate of $1.84 also lies within this range. Moreover, the company anticipates same-store revenue to climb 3.0–4.0%, expenses to increase 2.5–3.5% and same-store NOI growth of 3.25–4.25% for the year.
Our Viewpoint
With a superior portfolio in the targeted U.S. markets and disciplined capital allocation, UDR is well poised for growth. Moreover, focus on enhancing portfolio through expansion in core markets and sale of non-core ones should support momentum. However, elevated deliveries in a number of its markets remain a concern. Additionally, rate hike adds to the company’s woes.
We now look forward to the earnings releases of the other residential REITs – AvalonBay Communities, Inc. (AVB - Free Report) , Essex Property Trust Inc. (ESS - Free Report) and Apartment Investment and Management Company (AIV - Free Report) – which are also scheduled to report first-quarter results this week.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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UDR Inc. (UDR) Meets Q1 FFO Estimates, Beats on Revenues
Residential REIT, UDR Inc. (UDR - Free Report) reported funds from operations (“FFO”) as adjusted per share of 45 cents for first-quarter 2017, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of 43 cents.
Total revenue improved 3.8% year over year to $243.8 million. Additionally, it exceeded the Zacks Consensus Estimate of $241.8 million. Growth in revenue from same-store and stabilized, non-mature communities attributed to this increase.
In addition, the company reaffirmed its full-year 2017 FFO as adjusted per share and same-store guidance ranges.
Inside the Headlines
During the quarter, same-store revenues increased 4.6% year over year, while same-store expense climbed 3.8%. Consequently, same-store NOI rose 4.9% year over year. The company’s same-store physical occupancy expanded 50 basis points (bps) year over year to 96.8%. The first-quarter annualized rate of turnover contracted 100 bps year over year to 40.8%.
At the end of the first quarter, UDR’s development pipeline aggregated $1.1 billion. This included $279.3 million of completed, non-stabilized projects and $850.6 million of under-construction developments.
As of Mar 31, 2017, the company had around $920 million available, through a combination of cash and undrawn capacity on its credit facilities. Further, the company’s total debt was $3.5 billion as of the same date.
Notably, during the quarter, the company established a $500.0 million unsecured commercial paper program in the U.S. At the end of the quarter, $220.0 million of commercial paper was outstanding on the program at a weighted average rate of 1.24%.
Portfolio Activity
During the quarter, the UDR/MetLife joint venture accomplished the construction on Residences on Jamboree, a 381-home community situated in Irvine, CA, with an estimated cost to construct of $125.0 million at 100%. The company also exercised its fixed-price purchase option to acquire CityLine, a 244-home West Coast Development joint-venture community in suburban Seattle. UDR’s total investment in CityLine amounted to $86.5 million.
Further, the company strengthened its West Coast Development joint-venture relationship through a $15.5 million investment in CityLine II. It is a 155-home development community situated near the recently purchased CityLine in suburban Seattle.
On the other hand, during the quarter, the company sold Hanover Village, a wholly owned parcel of land positioned in Mechanicsville, VA, for total proceeds of $3.5 million.
Guidance
For second-quarter 2017, UDR projects FFO as adjusted per share in the 45–47 cents range. The Zacks Consensus Estimate of 46 cents lies within this range.
For full-year 2017, the company projects FFO as adjusted per share in the range of $1.83–$1.87. The Zacks Consensus Estimate of $1.84 also lies within this range. Moreover, the company anticipates same-store revenue to climb 3.0–4.0%, expenses to increase 2.5–3.5% and same-store NOI growth of 3.25–4.25% for the year.
Our Viewpoint
With a superior portfolio in the targeted U.S. markets and disciplined capital allocation, UDR is well poised for growth. Moreover, focus on enhancing portfolio through expansion in core markets and sale of non-core ones should support momentum. However, elevated deliveries in a number of its markets remain a concern. Additionally, rate hike adds to the company’s woes.
Currently, UDR has 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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We now look forward to the earnings releases of the other residential REITs – AvalonBay Communities, Inc. (AVB - Free Report) , Essex Property Trust Inc. (ESS - Free Report) and Apartment Investment and Management Company (AIV - Free Report) – which are also scheduled to report first-quarter results this week.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>