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UDR Expands Joint Venture With LaSalle, Boosts Financial Flexibility
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Key Takeaways
UDR expanded its JV with LaSalle to about $850M, adding four communities totaling 2,564 apartment units.
UDR will retain 51% ownership, add 50% debt on new assets, and lift total JV-level leverage to nearly 33%.
UDR expects about $200M in cash proceeds to fund share repurchases, debt repayment and general corporate uses.
UDR Inc. (UDR - Free Report) recently announced the expansion of its joint venture (“JV”) with LaSalle Investment Management by an additional $230 million. This increases the size of the JV to around $850 million. The above expansion will boost UDR’s financial flexibility and augur long-term growth.
The terms of the transaction require UDR to contribute four additional apartment communities aggregating 974 apartment units, bringing the total size of the joint venture to 2,564 apartment units. These properties, located in Portland, Orlando and Richmond, will lend geographical diversification to the joint venture, yielding stable returns.
UDR will retain 51% ownership in the communities added to the JV. The company will also encumber these assets with 50% debt, and at the same time, place debt on existing JV assets. This will bring total JV-level leverage to nearly 33%.
UDR is entitled to receive around $200 million in cash proceeds, which it intends to deploy for share repurchases, debt repayment and general corporate purposes.
Final Take on UDR
The expanded partnership with LaSalle positions UDR for growth. A larger, well-capitalized joint venture creates a platform for incremental acquisitions or expansions, supporting external growth while sharing risk with a strong institutional partner.
Moreover, by monetizing a part of the asset and still retaining 51% interest, UDR has been able to unlock significant capital. The company will also be able to participate in the communities’ cash flows and growth.
Over the past month, shares of this Zacks Rank #3 (Hold) residential REIT have risen 4.2%, outperforming the industry’s growth of 2.3%.
Analysts, too, seem bullish on this stock, with the Zacks Consensus Estimate for 2025 AFFO per share having been revised northward marginally to $2.53 over the past month.
Image: Bigstock
UDR Expands Joint Venture With LaSalle, Boosts Financial Flexibility
Key Takeaways
UDR Inc. (UDR - Free Report) recently announced the expansion of its joint venture (“JV”) with LaSalle Investment Management by an additional $230 million. This increases the size of the JV to around $850 million. The above expansion will boost UDR’s financial flexibility and augur long-term growth.
The terms of the transaction require UDR to contribute four additional apartment communities aggregating 974 apartment units, bringing the total size of the joint venture to 2,564 apartment units. These properties, located in Portland, Orlando and Richmond, will lend geographical diversification to the joint venture, yielding stable returns.
UDR will retain 51% ownership in the communities added to the JV. The company will also encumber these assets with 50% debt, and at the same time, place debt on existing JV assets. This will bring total JV-level leverage to nearly 33%.
UDR is entitled to receive around $200 million in cash proceeds, which it intends to deploy for share repurchases, debt repayment and general corporate purposes.
Final Take on UDR
The expanded partnership with LaSalle positions UDR for growth. A larger, well-capitalized joint venture creates a platform for incremental acquisitions or expansions, supporting external growth while sharing risk with a strong institutional partner.
Moreover, by monetizing a part of the asset and still retaining 51% interest, UDR has been able to unlock significant capital. The company will also be able to participate in the communities’ cash flows and growth.
Over the past month, shares of this Zacks Rank #3 (Hold) residential REIT have risen 4.2%, outperforming the industry’s growth of 2.3%.
Analysts, too, seem bullish on this stock, with the Zacks Consensus Estimate for 2025 AFFO per share having been revised northward marginally to $2.53 over the past month.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Cousins Properties (CUZ - Free Report) and Host Hotels & Resorts (HST - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share is pegged at $2.84, which indicates year-over-year growth of 5.6%.
The Zacks Consensus Estimate for HST’s full-year FFO per share stands at $2.05, which calls for an increase of 4.1% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.