Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10524
UDR, Inc.
(Exact name of registrant as specified in its charter)
Maryland
54-0857512
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (720) 283-6120
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, $0.01 par value
UDR
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No ◻
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ⌧
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large Accelerated Filer þ
Accelerated Filer ◻
Non-Accelerated Filer ◻
Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
◻
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ◻
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧
The aggregate market value of the shares of common stock of UDR, Inc. held by non-affiliates on June 30, 2024 was approximately $5.9 billion. This calculation excludes shares of common stock held
by the registrant’s officers and directors and each person known by the registrant to beneficially own more than 5% of the registrant’s outstanding shares, as such persons may be deemed to be affiliates. This
determination of affiliate status should not be deemed conclusive for any other purpose. As of February 14, 2025, there were 331,133,359 shares of UDR, Inc.’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this Report, to the extent not set forth herein, is incorporated by reference from UDR, Inc.’s definitive proxy statement for the 2025 Annual Meeting of
Stockholders.
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TABLE OF CONTENTS
PAGE
PART I
Item 1. Business
4
Item 1A. Risk Factors
15
Item 1B. Unresolved Staff Comments
32
Item 1C. Cybersecurity
32
Item 2. Properties
35
Item 3. Legal Proceedings
35
Item 4. Mine Safety Disclosures
35
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
36
Item 6. [Reserved]
38
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
39
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
57
Item 8. Financial Statements and Supplementary Data
57
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
57
Item 9A. Controls and Procedures
57
Item 9B. Other Information
58
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
58
PART III
Item 10. Directors, Executive Officers and Corporate Governance
59
Item 11. Executive Compensation
59
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
59
Item 13. Certain Relationships and Related Transactions, and Director Independence
59
Item 14. Principal Accountant Fees and Services
59
PART IV
Item 15. Exhibits, Financial Statement Schedules
60
Item 16. Form 10-K Summary
69
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1
PART I
Unless the context otherwise requires, all references in this Report to “UDR,” the “Company,” “we,” “our” and “us” refer to UDR,
Inc., together with its consolidated subsidiaries, including United Dominion Realty, L.P. (the “Operating Partnership” or the “OP”) and UDR
Lighthouse DownREIT L.P. (the “DownREIT Partnership”).
Forward-Looking Statements
This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Such forward-looking statements include, without limitation, statements concerning property
acquisitions and dispositions, development activity and capital expenditures, capital raising activities, rent growth, occupancy and rental
expense growth. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations
of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different
from the results of operations or plans expressed or implied by such forward-looking statements.
The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking
statements:
● general market and economic conditions;
● the impact of inflation/deflation;
● unfavorable changes in apartment market and economic conditions that could adversely affect occupancy levels and rental rates;
● the failure of acquisitions, developments or redevelopments to achieve anticipated results;
● possible difficulty in selling apartment communities;
● competitive factors that may limit our ability to lease apartment homes or increase or maintain rents;
● insufficient cash flow that could affect our debt financing and create refinancing risk;
● failure to generate sufficient revenue, which could impair our debt service payments and distributions to stockholders;
● development and construction risks that may impact our profitability;
● potential damage from natural disasters, including hurricanes, fires, floods, ice storms and other weather-related events, which
could result in substantial costs to us;
● risks from climate change that impacts our properties or operations;
● risks from extraordinary losses for which we may not have insurance or adequate reserves;
● risks from cybersecurity breaches of our information technology systems and the information technology systems of our third
party vendors and other third parties;
● the availability of capital and the stability of the capital markets;
● changes in job growth, home affordability and the demand/supply ratio for multifamily housing;
● the failure of automation or technology to help grow net operating income;
● uninsured losses due to insurance deductibles, self-insurance retention, uninsured claims or casualties, or losses in excess of
applicable coverage;
● delays in completing developments and lease-ups on schedule or at expected rent and occupancy levels;
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2
● our failure to succeed in new markets;
● risks that third parties who have an interest in or are otherwise involved in projects in which we have an interest, including
mezzanine borrowers, joint venture partners or other investors, do not perform as expected;
● changing interest rates, which could increase interest costs and affect the market price of our securities;
● potential liability for environmental contamination, which could result in substantial costs to us;
● the imposition of federal taxes if we fail to qualify as a REIT under the Code in any taxable year;
● our internal control over financial reporting may not be considered effective which could result in a loss of investor confidence in
our financial reports, and in turn have an adverse effect on our stock price; and
● changes in real estate laws, tax laws, rent control or stabilization laws or other laws affecting our business.
A discussion of these and other factors affecting our business and prospects is set forth in Part I, Item 1A. Risk Factors. We
encourage investors to review these risk factors.
Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore such statements included in this Report may not prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded
as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be
achieved.
Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Report, and we expressly
disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our
expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to
the extent otherwise required by law.
Summary of Risk Factors
Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may
adversely affect our business, financial condition, results of operations, cash flows and prospects. These risks are discussed more fully in
Item 1A. Risk Factors herein. These risks include, but are not limited to, the following:
●
Unfavorable Apartment Market and Economic Conditions Could Adversely Affect Occupancy Levels, Rental Revenues and the
Value of Our Real Estate Assets.
●
The Geographic Concentration of Our Communities in Certain Markets Could Have an Adverse Effect on Our Operations if a
Particular Market is Adversely Impacted by Economic or Other Conditions.
●
We May Be Unable to Renew Leases or Relet Apartment Units as Leases Expire, or the Terms of Renewals or New Leases May Be
Less Favorable Than Current Leases.
●
We Face Risks Related to Inflation/Deflation.
●
Competition Could Limit Our Ability to Lease Apartment Homes or Increase or Maintain Rents.
●
We May Not Realize the Anticipated Benefits of Past or Future Acquisitions, and the Failure to Integrate Acquired Communities
and New Personnel Successfully Could Create Inefficiencies.
●
Competition Could Adversely Affect Our Ability to Acquire Properties.
●
Development and Construction Risks Could Impact Our Profitability.
●
An Epidemic, Pandemic or Other Health Crisis, and Measures Intended to Prevent the Spread of Such an Event, Could Have a
Material Adverse Effect on our Business, Results of Operations, Cash Flows and Financial Condition.
●
Bankruptcy or Defaults of Our Counterparties Could Adversely Affect Our Performance.
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3
●
We Could Incur Significant Insurance Costs and Some Potential Losses May Not Be Adequately Covered by Insurance.
●
The Adoption of, or Changes to, Rent Control, Rent Stabilization, Eviction, Tenants’ Rights and Similar Laws and Regulations in
Our Markets Could Have an Adverse Effect on Our Results of Operations and Property Values.
●
Risks of Litigation.
●
A Breach of Information Technology Systems On Which We Rely Could Materially and Adversely Impact Our Business, Financial
Condition, Results of Operations and Reputation.
●
Changing Interest Rates Could Increase Interest Costs and Adversely Affect Our Cash Flows and the Market Price of Our Common
Stock.
●
Insufficient Cash Flow Could Affect Our Debt Financing and Create Refinancing Risk.
●
Failure to Generate Sufficient Income Could Impair Debt Service Payments and Distributions to Stockholders.
●
Failure To Maintain Our Current Credit Ratings Could Adversely Affect Our Cost of Funds, Related Margins, Liquidity, and Access
to Capital Markets.
●
Disruptions in Financial Markets May Adversely Impact the Availability and Cost of Credit and Have Other Adverse Effects on Us
and the Market Price of Our Common Stock.
●
We Would Incur Adverse Tax Consequences if We Failed to Qualify as a REIT.
●
Changes in Market Conditions and Volatility of Stock Prices Could Adversely Affect the Market Price of Our Common Stock.
●
We May Change the Dividend Policy for Our Common Stock in the Future.
●
Limitations on Share Ownership and Limitations on the Ability of Our Stockholders to Effect a Change in Control of Our Company
Restrict the Transferability of Our Stock and May Prevent Takeovers That are Beneficial to Our Stockholders.
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4
Item 1. BUSINESS
General
UDR is a self-administered real estate investment trust, or REIT, that owns, operates, acquires, renovates, develops, redevelops,
disposes of, and manages multifamily apartment communities in targeted markets located in the United States. At December 31, 2024, our
consolidated real estate portfolio consisted of 169 communities located in 21 markets, consisting of 55,696 completed apartment homes,
which are held directly or through our subsidiaries, including the Operating Partnership and the DownREIT Partnership, and consolidated
joint ventures. In addition, we have an ownership interest in 10,860 completed or to-be-completed apartment homes through unconsolidated
joint ventures or partnerships, including 6,436 apartment homes owned by entities in which we hold preferred equity investments. At
December 31, 2024, the Company was not developing any communities, although the Company was incurring and capitalizing costs directly
related to predevelopment activities in preparation of future development commencements. During the year ended December 31, 2024, the
Company completed the development of two communities located in Tampa, Florida and Addison, Texas, with a total of 415 apartment
homes.
UDR has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, which we refer to in this Report as
the “Code.” To continue to qualify as a REIT, we must continue to meet certain tests which, among other things, generally require that our
assets consist primarily of real estate assets, our income be derived primarily from real estate assets, and that we distribute at least 90% of
our REIT taxable income (other than our net capital gains) to our stockholders annually. As a REIT, we generally will not be subject to U.S.
federal income taxes at the corporate level on our net income to the extent we distribute such net income to our stockholders annually. In
2024, we declared total distributions of $1.70 per common share and paid dividends of $1.695 per common share.
Dividends
Dividends
Declared in
Paid in
2024
2024
First Quarter
$
0.4250
$
0.4200
Second Quarter
0.4250
0.4250
Third Quarter
0.4250
0.4250
Fourth Quarter
0.4250
0.4250
Total
$
1.7000
$
1.6950
UDR was formed in 1972 as a Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland.
Our corporate offices are located at 1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado and our telephone number is (720) 283-
6120. Our website is www.udr.com. The information contained on our website, including any information referred to in this Report as being
available on our website, is not a part of or incorporated into this Report.
As of December 31, 2024, there were 189.8 million units in the Operating Partnership (“OP Units”) outstanding, of which 176.6
million OP Units (including 0.1 million of general partnership units), or 93.0%, were owned by UDR and 13.2 million OP Units, or 7.0%,
were owned by outside limited partners. As of December 31, 2024, there were 32.4 million units in the DownREIT Partnership (“DownREIT
Units”) outstanding, of which 23.0 million, or 71.0%, were owned by UDR and its subsidiaries and 9.4 million, or 29.0%, were owned by
outside limited partners. The consolidated financial statements of UDR include the noncontrolling interests of the unitholders in the
Operating Partnership and DownREIT Partnership.
Human Capital Management
We strive to attract and retain high-performing talent. As of December 31, 2024, our Company had 1,419 full-time associates and 13
part-time associates, all of whom are dedicated to the success of our organization. Within this workforce, 1,007 associates are focused on
roles directly associated with our communities, while the remaining associates contribute to various corporate functions. Our commitment
extends to the entire employee lifecycle, encompassing recruitment, onboarding, development, engagement, and retention. Our overarching
objective is to enhance the associate experience, foster diversity, and maintain a motivated and committed workforce that fuels our growth
and talent retention. This dedication to our UDR culture, values, and behaviors directly influences improved engagement, productivity, and
the overall success of our organization.
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We strive to create a culture focused on a philosophy of collaboration, trust, and innovation where every individual feels welcomed,
valued, proud, and empowered to do their best work. By prioritizing and enhancing the associate experience, we aim to enhance engagement
levels, leading to increased customer satisfaction, higher employee retention, and superior results. We report to our Board of Directors at
least annually with respect to our human capital initiatives, including evaluations and analyses.
Associate Compensation
Attracting, nurturing, and retaining top-tier, diverse talent across our organization is essential to our long-term success. An integral
part of this process is our commitment to fair and attractive compensation practices. We continue to utilize general market, as well as
industry and geographically specific public compensation data to make informed decisions and adjust our salary ranges accordingly, so we
can remain competitive and attract and retain top talent. We seek to stay up to date with the latest trends in the job market in order to provide
fair and competitive compensation packages for our associates. Our compensation programs are designed to include performance-driven
bonuses. These metrics are presented annually to our executive leadership and our Board of Directors for oversight purposes.
Associate Growth and Development
We firmly believe that ongoing development is essential for associate job satisfaction, effectiveness, career progression, and
retention. New associates participate in a comprehensive two-day onboarding process that covers our culture, values, mission, and
administrative procedures. In 2024, we piloted a new onboarding roadmap to support onboarding new operations associates and decrease
time to productivity. In addition, we offer a wide range of training opportunities tailored to individual needs.
Throughout 2024, the talent development team assessed the current training curriculum, audited the quality of existing content, and
began documenting opportunities for improvement. As we look to the future, our long-term strategy will focus on UDR-developed content
that supports the enhancement of skills and competencies at all levels and emphasizes personalized learning paths, ongoing development
opportunities, and career progression.
During 2024, we introduced two digital customer experience service training courses and subsequent leader guides to approximately
1,200 associates to improve overall customer service skills and increase resident satisfaction and loyalty. In addition, more than 450 UDR
associates completed a DiSC assessment, which is a personality tool that measures preferences and tendencies, not skill or ability. Finally, in
2024 more than 400 leaders across the Company participated in in-person experiential training, leveraging hands-on learning activities to
improve team effectiveness, trust, communication, and collaboration.
In total, over 6,000 training courses are available to our associates, spanning topics such as leasing skills, property maintenance,
customer service, project management, and leadership development. In 2024, our associates collectively invested 38,225 hours in training,
averaging 27 hours per full time associate. By the end of 2024, 90% of associates had completed annual IT security training, fair housing,
harassment, workplace violence, diversity and inclusion, and business ethics training.
Certifications play a crucial role in career progression in the apartment industry. We actively encourage our associates to pursue
professional certifications that align with their interests and benefit the Company. These certifications range from master's degree programs
to certified property manager programs or technical licenses. We offer partial tuition reimbursement to support associates in attaining these
certifications.
Additionally, in 2024, the Company put greater focus on organizational development and succession planning to help ensure UDR
has the right talent in the right positions to drive success and growth, as well as business continuity during leadership transitions.
Diversity and Inclusion
We prioritize respect, fairness, and the promotion of diverse perspectives, which contribute to our Company's growth and success.
Our commitment extends to fostering a diverse and inclusive workplace environment that facilitates the development and advancement of all
associates.
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As of December 31, 2024, our workforce is comprised of 61% male and 39% female associates, with an ethnic composition of 51%
White, 27% Hispanic/Latino, 13% Black, 3% Asian, and 6% Other. Our management team (including resident services managers and more
senior job classifications) reflects a gender balance of 59% male and 41% female, with an ethnic breakdown of 60% White and 40% non-
White. Over the three-year period ending December 31, 2024, 533 promotions occurred, with 45% of those promoted to resident services
manager, director, or more senior job classifications being female and 42% non-White.
Our commitment to promoting diversity and inclusion remains as we strive to create a healthy and diverse work environment and
attract candidates from all backgrounds, ethnicities, and genders.
Associate Engagement and Outreach
Throughout 2024, we listened to our associates through quarterly pulse surveys, and leveraging associate feedback implemented
several measures aimed at improving communication, making data-driven decisions, and promoting collaboration between our operations
and corporate teams. We will continue to enhance our active listening strategy to drive continuous improvement across our business.
We believe that our associates should be active in their communities, and we support their efforts. In 2024, we introduced an
enhanced volunteer policy that continues to provide associates with up to eight paid hours annually for volunteer activities. Previously,
volunteer opportunities were limited to one or two company-sponsored events per year with designated organizations. The updated policy
now allows associates the flexibility to volunteer at any time throughout the year with a charitable organization of their choice. Through the
policy, UDR provided 1,050 hours of paid time off to associates for volunteer work with over 30 local organizations. We also organized food,
clothing, and blood drives, as well as initiatives to promote non-profit organizations and causes, fostering a culture of giving back.
Employee Health, Wellness and Benefits
The health, wellness, and safety of our associates are paramount to UDR. We maintain an inclusive culture by prioritizing the well-
being of our associates.
In 2024, we upgraded our Employee Assistance Program (EAP) and increased enrollment by 10%. Our EAP includes counseling
services, educational resources, and tools, including workshops and seminars on stress management, nutrition, and well-being for associates,
partners, and teen-aged dependents. We also invested in virtual and in-person wellness fairs aimed at providing associates learning
opportunities on topics ranging from stress management and mental health to financial fitness. We continue to leverage our Lifestyle
Spending Account, which provides associates with $1,000 annually to spend as they choose bolstering associate wellness and satisfaction.
Our commitment to associate benefits is underscored by a third-party benefits survey, conducted in 2024, where 84% of respondents
stated they understood their benefits and 64% believed that UDR offered a benefit package that is satisfactory relative to other companies in
the industry.
Reporting Segments
We report in two segments: Same-Store Communities and Non-Mature Communities/Other.
Our Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2023,
and held as of December 31, 2024. These communities were owned and had stabilized occupancy and operating expenses as of the beginning
of the prior year, there is no plan to conduct substantial redevelopment activities, and the communities are not classified as held for
disposition at year end. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three
consecutive months.
Our Non-Mature Communities/Other segment represents those communities that do not meet the criteria to be included in Same-
Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment
components of mixed use properties. For additional information regarding our operating segments, see Note 16, Reportable Segments, in the
Notes to the UDR Consolidated Financial Statements included in this Report.
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Business Objectives
Our principal business objective is to maximize the economic returns of our apartment communities in a sustainable manner to
provide our stockholders with the greatest possible total return and value. To achieve this objective, we intend to continue to pursue the
following goals and strategies:
●own and operate a diversified portfolio of apartments in targeted markets in the United States, which are characterized by strong
total income growth, high working age population growth, relatively robust rental versus single-family home affordability and
favorable demand/supply ratio for multifamily housing, thus enhancing stability and predictability of returns to our
stockholders;
●manage real estate cycles by taking an opportunistic approach to buying, selling, renovating, redeveloping, and developing
apartment communities;
●empower our associates to manage our communities efficiently and effectively to improve resident satisfaction;
●measure and reward associates based on specific performance targets; and
●manage our capital structure with the intent of lowering our relative cost of capital to enhance profitability and predictability of
liquidity, earnings and dividends.
2024 Highlights
Commitment to Shareholders
● In July 2024, the Company marked its 52nd year as a REIT and, in October 2024, paid its 208th consecutive quarterly dividend.
The Company’s annualized declared 2024 dividend of $1.70 represented a 1.2% increase over the previous year.
Earnings Results
·
Net income attributable to common stockholders was $84.8 million as compared to $439.5 million in the prior year. The primary
drivers for the decrease were lower gains from dispositions of real estate as we sold fewer assets in 2024 when compared to the
same period in 2023, and lower interest income and other income/(expense) primarily driven by a $37.3 million non-cash loan
reserve partially offset by higher notes receivable balances. These were partially offset by higher total net operating income
(“NOI”).
●Total revenues increased 2.7% over the prior year primarily due to overall market rent growth and communities acquired and
completion of developments during 2024 and 2023, partially offset by dispositions of real estate in 2024 and 2023.
·
We achieved Same-Store revenue growth of 2.3% and Same-Store NOI growth of 1.5%.
Investing and Developments
·
We completed the development of two communities located in Tampa, Florida and Addison, Texas, with a total of 415 apartment
homes.
·
We recognized a gain of $16.9 million from the sale of an operating community located in Arlington, Virginia.
·
We received distributions totaling $102.4 million from the Company’s unconsolidated joint ventures and partnerships.
●We contributed $35.0 million to four joint ventures that own and operate four operating communities with a total of 818
apartment homes.
·
We funded an additional $32.2 million to two of our notes receivable investments.
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Balance Sheet
·
We issued $300.0 million of 5.125% medium-term notes due September 1, 2034. The net proceeds were used to pay down
outstanding indebtedness under our commercial paper program.
·
We amended our Revolving Credit Facility to extend the maturity date to August 31, 2028, with two six-month extension options
and amended our Term Loan to include a twelve-month extension option.
·
We amended our Working Capital Credit Facility to extend the maturity date from January 12, 2025, to January 12, 2026.
ESG Report
We published our 2024 ESG Report on our website, which discloses our environmental and social initiatives, programs, and
performance. The report’s ESG disclosures were, to the extent applicable, prepared in accordance with the Global Reporting Initiative (GRI)
Standards (core), the Sustainability Accounting Standards Board (SASB) standards, and the Task Force for Climate-related Financial
Disclosure (TCFD) framework.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further information
on the Company’s activities in 2024.
Our Strategic Vision
Our strategic vision is to be the multifamily public REIT of choice for investors. We intend to realize this vision by executing on our
strategic objectives, which are:
1. Maintaining a Diversified Portfolio and Allocating Capital to Accretive Investment Opportunities
2. Maintaining a Strong Balance Sheet
3. Consistently Driving Operating Excellence
4. Advancing a Strong Corporate Culture and Striving for High Resident Satisfaction
Maintaining a Diversified Portfolio and Allocating Capital to Accretive Investment Opportunities
We believe greater portfolio diversification, as defined by geographic concentration, location within a market (i.e., urban or
suburban) and property quality (i.e., A or B), reduces the volatility of our same-store growth throughout the real estate cycle, appeals to a
wider renter and investor audience, lessens the market risk associated with owning a homogenous portfolio, and provides more opportunities
for accretive external growth when appropriate. Diversified characteristics of our portfolio include:
●our consolidated apartment portfolio includes 169 communities located in 21 markets throughout the U.S., including both
coastal and sunbelt locations;
●our communities that are located proximate to each other within a market provide enhanced economics; and
●our mix of urban/suburban communities is approximately 30%/70% and our mix of A/B quality properties is approximately
44%/56%.
We are focused on increasing our presence in markets with favorable job formation and income growth, high propensity to rent,
strong relative affordability for rental versus homeownership, and a favorable demand/supply ratio for multifamily housing. Portfolio
investment decisions consider internal analyses and third-party research.
Acquisitions and Dispositions
When evaluating potential acquisitions, we consider a wide variety of factors, including:
●high working age population growth, relatively robust rental versus single-family home affordability, measured long-term new
supply growth, overall potential for strong total income growth;
●the tax and regulatory environment of the market in which the property is located;
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●geographic location, including proximity to jobs, entertainment, transportation, and our existing communities which can deliver
significant economies of scale;
●our climate assessments for the market and sub-market in which the property is located;
●construction quality, condition, design and sustainability features of, or the potential to implement sustainability initiatives at,
the property;
●current and projected cash flow of the property and the ability to increase cash flow;
●ability of the property’s projected returns to exceed our cost of capital;
●potential for capital appreciation of the property;
●ability to increase the value and profitability of the property through operations and redevelopment;
●terms of resident leases, including the potential for rent increases;
●occupancy and demand by residents for properties of a similar type in the vicinity;
●prospects for liquidity through sale, financing or refinancing of the property; and
●competition from existing multifamily communities and the potential for the construction of new multifamily properties in the
area.
We regularly monitor our assets to increase the quality and performance of our portfolio. Factors we consider in deciding whether to
dispose of a property include:
●whether it is in a market targeted for divestment or a reduction in investment;
●current market price for an asset compared to projected economics for that asset;
●potential increases in new construction in the market area;
●areas with low job growth prospects;
●near- and long-term capital expenditure needs for the asset; and
●operating efficiencies.
The following table summarizes our apartment community acquisitions and dispositions and our consolidated year-end ownership
position for the past five years (dollars in thousands):
2024
2023
2022
2021
2020
Homes acquired
173 (a)
1,889
433
5,426
1,642
Homes disposed
214
1,604 (b)
90
651
599
Homes owned at December 31,
55,696
55,550
54,999
53,229
48,283
Total real estate owned, at cost
$
16,213,363
$
16,023,859
$
15,570,072
$
14,740,803
$
13,071,472
(a) In January 2024, the Company acquired its joint venture partner’s common equity interest in a 173 apartment home operating
community. The community was previously owned by a consolidated joint venture of the Company.
(b) Includes 1,328 apartment homes from the partial sale of four operating communities to a newly formed joint venture.
Development Activities
Our objective in developing a community is to create value while improving the quality of our portfolio. How demographic trends,
economic drivers, and multifamily fundamentals and valuations have trended over the long-term
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and our portfolio strategy generally govern our review process on where and when to allocate development capital. At December 31, 2024,
the Company was not developing any communities, although the Company was incurring and capitalizing costs directly related to
predevelopment activities in preparation of future development commencements. During the year ended December 31, 2024, the Company
completed the development of two communities located in Tampa, Florida and Addison, Texas, with a total of 415 apartment homes.
Redevelopment Activities
Our objective in redeveloping a community is twofold: we aim to grow rental rates while also producing a higher yielding and more
valuable asset through asset quality improvement. During the year ended December 31, 2024, we incurred $51.4 million in major
renovations, which included major structural changes and/or architectural revisions to existing buildings. As of December 31, 2024, the
Company had no communities at which it was conducting substantial redevelopment activities.
Joint Venture and Partnership Activities
We have entered into, and may continue in the future to enter into, joint ventures (including limited liability companies or
partnerships) through which we own an indirect economic interest of less than 100% of the community or communities owned directly by
such joint ventures. Our decision to either hold an apartment community in fee simple or have an indirect interest in the community through
a joint venture is based on a variety of factors and considerations, including: (i) the economic and tax terms required by the seller of land or a
community; (ii) our desire to diversify our portfolio of communities by market, submarket and product type; (iii) our desire at times to
preserve our capital resources to maintain liquidity or balance sheet strength; and (iv) our projections, in some circumstances, that we will
achieve higher returns on our invested capital or reduce our risk if a joint venture vehicle is used. Each joint venture agreement is
individually negotiated, and our ability to operate and/or dispose of a community in our sole discretion may be limited to varying degrees
depending on the terms of the joint venture agreement.
Maintaining a Strong Balance Sheet
We maintain a capital structure that we believe allows us to proactively source potential investment opportunities in the
marketplace. We have structured our debt maturity schedule to be able to opportunistically access both secured and unsecured debt markets
when appropriate.
As part of our plan to finance our activities, we utilize proceeds from debt and equity offerings and refinancings to extend
maturities, pay down existing debt, fund development and redevelopment activities, and acquire apartment communities.
Consistently Driving Operational Excellence
Investment in new technologies continues to drive operating efficiencies in our business and helps us to better meet the changing
needs of our business and our residents. Our residents can conduct business with us 24 hours a day, 7 days a week, including completing
online leasing applications and renewals and submitting maintenance or other requests throughout our portfolio using our web-based resident
internet portal or, increasingly, a smart-device application.
As a result of transforming our operations through technology, residents’ satisfaction has improved, and our operating teams have
become more efficient. Web-based technologies have also resulted in declining marketing and advertising costs, improved cash management,
and better pricing management of our available apartment homes.
Advancing a Strong Corporate Culture and Ensuring High Resident Satisfaction
Refer to Human Capital Management section above, for further information on the Company’s corporate culture.
Competitive Conditions
Competition for new residents is generally intense across our markets. Some competing communities offer amenities that our
communities do not have. Competing communities can use rental concessions or lower rents to obtain temporary competitive advantages.
Also, some competing communities are larger or newer than our communities. The competitive position of each community is different
depending upon many factors, including sub-market supply and
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demand. In addition, other real estate investors compete with us to acquire existing properties, redevelop existing properties, and to develop
new properties. These competitors include insurance companies, pension and investment funds, public and private real estate companies,
investment companies and other public and private apartment REITs, some of which may have greater resources, or lower capital costs, than
we do.
We believe that, in general, we are well-positioned to compete effectively for residents and investments. We believe our competitive
advantages include:
●a fully integrated organization with property management, development, redevelopment, acquisition, marketing, sales and
financing expertise;
●scalable operating and support systems, which include automated systems to meet the changing needs of our residents and to
effectively focus on our internet-based marketing efforts;
●access to diversified sources of capital;
●geographic diversification with a presence in 21 markets across the country; and
●significant presence in many of our major markets that allows us to be a local operating expert.
Moving forward, we will continue to improve lease management, improve expense control, increase resident retention efforts and
align employee incentive plans with metrics that impact our bottom-line performance. We believe this plan of operation, coupled with the
portfolio’s strengths in targeting renters across a geographically diverse platform, should position us for continued operational upside.
Communities
At December 31, 2024, our consolidated real estate portfolio included 169 communities with a total of 55,696 completed apartment
homes. The overall quality of our portfolio relative to other properties generally enables us to charge higher rents and to attract residents with
higher levels of disposable income who are more likely to absorb such rents.
At December 31, 2024, the Company was not developing any communities, although the Company was incurring and capitalizing
costs directly related to predevelopment activities in preparation of future development commencements. During the year ended December
31, 2024, the Company completed the development of two communities located in Tampa, Florida and Addison, Texas, with a total of 415
apartment homes.
At December 31, 2024, the Company had no communities at which it was conducting substantial redevelopment activities.
Same-Store Community Comparison
We believe that one pertinent quantitative measurement of the performance of our portfolio is tracking the results of our Same-Store
Communities’ NOI, which is total rental revenue, less rental and other operating expenses excluding property management. Our Same-Store
Community population is comprised of operating communities which we own and have stabilized occupancy, revenues and expenses as of
the beginning of the prior year.
Net income attributable to common stockholders was $84.8 million as compared to $439.5 million in the prior year. The primary
drivers for the decrease were lower gains from dispositions of real estate as we sold fewer assets in 2024 when compared to the same period
in 2023, and lower interest income and other income/(expense) primarily driven by a $37.3 million non-cash loan reserve partially offset by
higher notes receivable balances. These were partially offset by higher total net operating income (“NOI”).
For the year ended December 31, 2024, our Same-Store NOI increased by $15.3 million compared to the prior year. Our Same-Store
Community properties provided 92.4% of our total NOI for the year ended December 31, 2024. The increase in NOI for the 51,428 Same-
Store apartment homes, or 92.3% of our portfolio, was primarily driven by an increase in market rental rates and an increase in
reimbursement, ancillary and fee income, partially offset by higher personnel costs, higher repair and maintenance expense, higher utilities
expense, higher administration and marketing costs, and higher real estate tax expense.
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Revenue growth in 2025 may be impacted by adverse developments affecting the general economy, inclusive of economic
conditions as a result of a recession, reduced occupancy rates, increased rental concessions, new supply, increased bad debt and other factors
which may adversely impact our ability to increase rents.
Tax Matters
UDR has elected to be taxed as a REIT under the Code. To continue to qualify as a REIT, UDR must continue to meet certain tests
that, among other things, generally require that our assets consist primarily of real estate assets, our income be derived primarily from real
estate assets, and that we distribute at least 90% of our REIT taxable income (other than net capital gains) to our stockholders annually.
Provided we maintain our qualification as a REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on our
net income to the extent such net income is distributed to our stockholders annually. Even if we continue to qualify as a REIT, we will
continue to be subject to certain federal, state and local taxes on our income and property.
We may utilize our taxable REIT subsidiary (“TRS”) to engage in activities that REITs may be prohibited from performing,
including the provision of management and other services to third parties and the conduct of certain nonqualifying real estate transactions.
Our TRS generally is taxable as a regular corporation, and therefore, subject to federal, state and local income taxes.
Inflation
Inflation primarily impacts our results of operations as a result of wage pressures and increases in utilities and repair and
maintenance costs. In addition, inflation could also impact our general and administrative expenses, the interest on our debt if variable or
refinanced in a high-inflationary environment, our cost of capital, and our cost of development, redevelopment, maintenance or other
operating activities. However, the majority of our apartment leases have initial terms of 12 months or less, which in an inflationary
environment, and absent other factors such as increased supply, generally enables us to compensate for inflationary effects by increasing
rents on our apartment homes. Although an extreme or sustained escalation in costs could have a negative impact on our residents and their
ability to absorb rent increases, we do not believe this had a material impact on our results for the year ended December 31, 2024.
Environmental Matters
Various environmental laws govern certain aspects of the ongoing operation of our communities. Such environmental laws include
those regulating the existence of asbestos-containing materials in buildings, management of surfaces with lead-based paint (and notices to
residents about the lead-based paint), use of active underground petroleum storage tanks, and waste-management activities. The failure to
comply with such requirements could subject us to a government enforcement action and/or claims for damages by a private party.
To date, compliance with federal, state and local environmental protection regulations has not had a material effect on our capital
expenditures, earnings or competitive position. We have a property management plan for hazardous materials. As part of the plan, Phase I
environmental site investigations and reports have been completed for each property we acquire. In addition, all proposed acquisitions are
inspected prior to acquisition. The inspections are conducted by qualified environmental consultants, and we review the issued report prior to
the purchase or development of any property. Nevertheless, it is possible that the environmental assessments will not reveal all environmental
liabilities, or that some material environmental liabilities exist of which we are unaware. In some cases, we have abandoned otherwise
economically attractive acquisitions because the costs of removal or control of hazardous materials have been prohibitive or we have been
unwilling to accept the potential risks involved. We do not believe we will be required to engage in any large-scale abatement at any of our
properties. We believe that through professional environmental inspections and testing for asbestos, lead paint and other hazardous materials,
coupled with a relatively conservative posture toward accepting known environmental risk, we can minimize our exposure to potential
liability associated with environmental hazards.
Federal legislation requires owners and landlords of residential housing constructed prior to 1978 to disclose to potential residents
or purchasers of the communities any known lead paint hazards and imposes treble damages for failure to provide such notification. In
addition, lead based paint in any of the communities may result in lead poisoning in children residing in that community if chips or particles
of such lead based paint are ingested, and we may be held liable under state laws for any such injuries caused by ingestion of lead based paint
by children living at the communities.
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We are unaware of any environmental hazards at any of our properties that individually or in the aggregate may have a material
adverse impact on our operations or financial position. We have not been notified by any governmental authority, and we are not otherwise
aware, of any material non-compliance, liability, or claim relating to environmental liabilities in connection with any of our properties. We do
not believe that the cost of continued compliance with applicable environmental laws and regulations will have a material adverse effect on
us or our financial condition or results of operations. Future environmental laws, regulations, or ordinances, however, may require additional
remediation of existing conditions that are not currently actionable. Also, if more stringent requirements are imposed on us in the future, the
costs of compliance could have a material adverse effect on our results of operations and our financial condition.
Insurance
We carry comprehensive general liability coverage on our communities, with limits of liability we believe to be customary within
the multi-family apartment industry to insure against liability claims and related defense costs. We are also insured, with limits of liability we
believe to be customary within the multi-family apartment industry, against the risk of direct physical damage on a replacement cost basis,
including loss of rental income during the reconstruction period.
Supplemental U.S. Federal Income Tax Considerations
The following discussion supplements and updates the disclosures under “Material U.S. Federal Income Tax Consequences” in the
prospectus dated February 14, 2023, contained in our Registration Statement on Form S-3 filed with the SEC on February 14, 2023.
Capitalized terms herein that are not otherwise defined shall have the same meaning as when used in such disclosures.
●
The second bullet in the second paragraph under the heading “Taxation of UDR - Income Tests” is clarified to acknowledge an
exception to the related party tenant test for a tenant that is a taxable REIT subsidiary and either (i) at least 90% of the total
leased space of the property is leased to unrelated tenants and the rent paid by the taxable REIT subsidiary is substantially
comparable to the rent paid by the unrelated tenants for comparable space, or (ii) the property leased to the taxable REIT
subsidiary is a lodging facility or a health care facility and certain other requirements are satisfied.
●
The third prong of the definition of “hedging transaction” in the fourth paragraph under the heading “Taxation of UDR -
Income Tests” is hereby clarified to establish that in order to qualify as a “hedging transaction” that will be excluded from
gross income for purposes of the 75% and 95% gross income tests, a new transaction entered into to hedge the income or loss
from prior hedging transactions where the property or indebtedness which was the subject of the prior hedging transaction was
extinguished or disposed of must be clearly identified as specified in Treasury regulations before the close of the day on which
it was acquired, originated, or entered into.
●
The penultimate paragraph under the heading “Taxation of UDR - Asset Tests” is clarified to acknowledge that the cure
provision for de minimis violations applies to violations of the 5% asset test as well.
●
The second sentence of the third paragraph under the heading “Taxation of Stockholders - Taxation of Non-U.S. Stockholders -
Capital Gains Dividends” and the entirety of the fourth paragraph under the heading “Taxation of Stockholders - Taxation of
Non-U.S. Stockholders - Dispositions of UDR Stock” are hereby clarified to establish that the exemption from FIRPTA for a
“qualified foreign pension fund” also may apply to a “qualified controlled entity,” but in each case only if the qualified foreign
pension fund or qualified controlled entity satisfies certain requirements to be a “qualified holder.” Moreover, Treasury
regulations provide that a foreign partnership of which all of the interests are held by qualified holders, including through one
or more partnerships, may certify its status as such and will generally not be treated as a non-U.S. person for purposes of
withholding under FIRPTA.
●
The second and third sentences of first paragraph under the heading “Taxation of Stockholders -Taxation of Tax-Exempt
Stockholders” are hereby clarified to establish that dividend distributions from a REIT to a U.S. tax-exempt entity generally
should not give rise to UBTI unless, (i) the tax-exempt entity hold its shares in the REIT as “debt-financed property,” or (ii) the
tax-exempt entity is a “qualified trust” that holds more than 10% by value of the interests in the REIT and the REIT is a
“pension-held REIT.” Additionally, income from the sale of our stock generally shall not give rise to UBTI unless the tax-
exempt entity holds
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our stock as (i) “debt-financed property” or (ii) inventory or property held primarily for sale to customers in the ordinary course
of a trade or business.
●
The second paragraph under the heading “Taxation of Stockholders - Taxation of Tax-Exempt Stockholders” is hereby revised
to apply to just tax-exempt stockholders that are exempt from U.S. federal income taxation under Sections 501(c) (7), (c)(9)
and (c)(17) of the Code.
Available Information
We file electronically with the Securities and Exchange Commission our annual reports on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. You may obtain a
free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those
reports on the day of filing with the SEC on our website at www.udr.com, or by sending an e-mail message to ir@udr.com.
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Item 1A.
RISK FACTORS
There are many factors that affect the business and the results of operations of the Company, some of which are beyond its control.
The following is a description of important factors that may cause the Company’s actual results in future periods to differ materially from
those currently expected or discussed in forward-looking statements set forth in this Report relating to our financial results, operations and
business prospects. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Report, and
we expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any
change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is
based, except to the extent otherwise required by law. These risks are not all of the risks we face and other factors not presently known to us
or that we currently believe are immaterial may also affect our business if they occur.
Risks Related to Our Real Estate Investments and Our Operations
Unfavorable Apartment Market and Economic Conditions Could Adversely Affect Occupancy Levels, Rental Revenues and the
Value of Our Real Estate Assets. Unfavorable market conditions in the areas in which we operate or unfavorable economic conditions
generally, may significantly affect our occupancy levels, our rental rates and collections, the value of our properties and our ability to acquire
or dispose of apartment communities on economically favorable terms. Our ability to lease our properties at favorable rates is adversely
affected by increases in supply in the multifamily and other rental markets and is dependent upon the overall level in the economy, which is
adversely affected by, among other things, job losses and unemployment levels, recession, debt levels, housing markets, stock market
volatility and uncertainty about the future. Our major expenses generally do not decline when related rents decline. We would expect that
declines in our occupancy levels and rental and other revenues would cause us to have less cash available to pay our indebtedness and to
distribute to our stockholders, which could adversely affect our financial condition or the market value of our securities. Factors that have in
the past and may in the future affect our occupancy levels, our rental revenues, and/or the value of our properties include the following,
among others:
●
downturns in global, national, regional and local economic conditions, particularly increases in unemployment;
●
declines in mortgage interest rates, making alternative housing options more affordable;
●
government or builder incentives with respect to home ownership, making alternative housing options more attractive;
●
local real estate market conditions, including oversupply of, or reduced demand for, apartment homes;
●
declines in the financial condition of our tenants, which may make it more difficult for us to collect rents from some tenants;
●
changes in market rental rates;
●
our ability to renew leases or re-lease space on favorable terms;
●
the timing and costs associated with property improvements, repairs or renovations;
●
changes in household formation; and
●
rent control or stabilization laws, or other laws regulating or impacting rental housing, which could prevent us from raising
rents to offset increases in operating costs or otherwise impact us.
The Geographic Concentration of Our Communities in Certain Markets Could Have an Adverse Effect on Our Operations if a
Particular Market is Adversely Impacted by Economic or Other Conditions. For the year ended December 31, 2024, approximately 73.1% of
our total NOI was generated from communities located in Metropolitan D.C. (15.4%), Boston, MA (11.7%), Orange County, CA (10.9%), the
San Francisco Bay Area, CA (8.4%), Dallas, TX (8.3%), New York, NY (6.5%), Seattle, WA (6.2%) and Tampa, FL (5.7%). As a result, if
any one or more of these markets is adversely impacted by regional or local economic conditions or real estate market conditions, including
new supply, such conditions may have a greater adverse impact on our results of operations than if our portfolio was more geographically
diverse. In addition, if one or more of these markets is adversely affected by changes in regional or local regulations, including those related
to rent control or stabilization, such regulations may have a greater adverse impact on our results of operations than if our portfolio was more
geographically diverse.
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We May Be Unable to Renew Leases or Relet Apartment Units as Leases Expire, or the Terms of Renewals or New Leases May Be
Less Favorable Than Current Leases. When our residents decide to leave our apartments, whether because their leases are not renewed or
they leave prior to their lease expiration date, we may not be able to relet their apartment units. Even if leases are renewed or we can relet the
apartment units, the terms of renewal or reletting may be less favorable to us than the expiring lease terms. Furthermore, because the majority
of our apartment leases have initial terms of 12 months or less, our rental revenues are impacted by declines in market rents more quickly
than if our leases were for longer terms. If we are unable to promptly renew the leases or relet the apartment units, or if the rental rates upon
renewal or reletting are lower than expected rates, then our results of operations and financial condition may be and have in the past been,
adversely affected. If residents do not experience increases in their income or if they experience decreases in their income or job losses, we
may be unable to increase or maintain rent and/or delinquencies may increase.
We Face Certain Risks Related to Our Retail and Commercial Space. Certain of our properties include retail or commercial space
that we lease to third parties. The long-term nature of our retail and commercial leases (generally five to ten years with market-based or
fixed-price renewal options) and the characteristics of many of our tenants (small and/or local businesses) may subject us to certain risks. The
longer-term leases could result in below market lease rates over time, particularly in an inflationary environment. We may require guarantees
and other credit support which may prove to be inadequate or uncollectable, and the failure rate of small and/or local businesses may be
higher than average. We may not be able to lease new space for rents that are consistent with our projections or for market rates. Also, when
leases for our retail or commercial space terminate either at the end of the lease or because a tenant leaves early, the space may take, and
spaces have taken in the past, longer than expected to relet, may not be relet or the terms of reletting, including the cost of allowances and
concessions to tenants, may be less favorable to us than the prior lease terms, or we may incur additional expenses related to modifications of
the spaces in order to satisfy new tenants. Our properties compete with other properties with retail or commercial space. The presence of
competitive alternatives may adversely affect our ability to lease space and the level of rents we can obtain. Our retail or commercial tenants
may experience financial distress or bankruptcy, or may fail to comply with their contractual obligations, and may seek concessions in order
to continue operations or cease their operations, all of which has happened in the past and may occur again in the future, which could
adversely impact our results of operations and financial condition.
We Face Risks Related to Inflation/Deflation. Substantial inflationary or deflationary pressures could have a negative effect on rental
rates and property operating expenses. The U.S. economy has during certain periods over the last few years experienced high rates of
inflation, which has increased our operating expenses due to higher third party vendor costs and increased our interest expense due to higher
interest rates on our variable rate debt. Although the short-term nature of our apartment leases may, absent other factors, enable us to
compensate for inflationary effects by increasing rents on our apartment homes, an extreme or sustained escalation in costs could have a
negative impact on our residents and their ability to absorb rent increases. The general risk of inflation is that interest on our debt, general
and administrative expenses, materials costs, labor costs, and other expenses increase at a rate faster than increases in our rental rates, which
could adversely affect our financial condition or results of operations.
We Are Subject to Certain Risks Associated with Selling Apartment Communities, Which Could Limit Our Operational and
Financial Flexibility. We periodically dispose of apartment communities that no longer meet our strategic objectives, but adverse market
conditions, among other factors, may make it difficult to sell apartment communities we own. We cannot predict whether we will be able to
sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be
acceptable to us. We also cannot predict the length of time needed to find a willing purchaser or to close the sale of a property. Furthermore,
we may be required to expend funds to correct defects or to make improvements before a property can be sold or the purchase price may be
reduced to cover any cost of correcting defects or making improvements. These conditions may limit our ability to dispose of properties and
to change our portfolio in order to meet our strategic objectives, which could in turn adversely affect our financial condition, results of
operations or our ability to fund other activities in which we may want to engage such as the purchase of properties, development or
redevelopment, or funding the Debt and Preferred Equity Program. We are also subject to the following risks in connection with sales of our
apartment communities, among others:
●
a significant portion of the proceeds from some property sales may be held by intermediaries in order for such sales to qualify
as like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended, or the “Code,” so that any
related capital gain can be deferred for federal income tax purposes. As a result, we may not have immediate access to all of the
cash proceeds generated from our property sales; and
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●
federal tax laws limit our ability to profit on the sale of communities or interests in communities that we have owned for less
than two years, and this limitation may prevent us from selling communities when market conditions are favorable or when we
may otherwise desire to sell.
Competition Could Limit Our Ability to Lease Apartment Homes or Increase or Maintain Rents. Our apartment communities
compete with numerous housing alternatives in attracting residents, including other apartment communities, condominiums and single-
family rental homes, as well as owner occupied single- and multi-family homes. Competitive housing in a particular area, including new
supply, could adversely affect our ability to lease apartment homes and increase or maintain rents, which could materially and adversely
affect our results of operations and financial condition.
We May Not Realize the Anticipated Benefits of Past or Future Acquisitions, and the Failure to Integrate Acquired Communities and
New Personnel Successfully Could Create Inefficiencies. We have acquired in the past, and if presented with attractive opportunities we
intend to acquire in the future, apartment communities that meet our investment criteria. Our acquisition activities and their success are
subject to the following risks, among others:
●
we may be unable to obtain financing for acquisitions on favorable terms, or at all, which could cause us to delay or even
abandon potential acquisitions;
●
if we seek and are able to finance an acquisition with debt, cash flow from the acquisition may be insufficient to meet our
required principal and interest payments on the debt used to finance the acquisition;
●
even if we enter into an acquisition agreement for an apartment community, we may not complete the acquisition for a variety
of reasons after incurring certain acquisition-related costs;
●
we may incur significant costs and divert management attention in connection with the evaluation and negotiation of potential
acquisitions, including potential acquisitions that we subsequently do not complete;
●
when we acquire an apartment community, we may invest additional amounts in it with the intention of increasing profitability,
and these additional investments may not produce the anticipated improvements in profitability;
●
the expected occupancy rates, rental rates and expenses may differ from actual results; and
●
we may be unable to quickly and efficiently integrate acquired apartment communities and new personnel into our existing
operations, and the failure to successfully integrate such apartment communities or personnel will result in inefficiencies that
could materially and adversely affect our expected return on our investments and our overall profitability.
Competition Could Adversely Affect Our Ability to Acquire Properties. In the past, other real estate investors, including insurance
companies, pension and investment funds, developer partnerships, investment companies and other public and private apartment REITs, have
competed with us to acquire existing properties and to develop new properties, and such competition in the future may limit attractive
investment opportunities, which could adversely affect our ability to grow or acquire properties profitably or with attractive returns.
Development and Construction Risks Could Impact Our Profitability. In the past we have pursued the development and construction
of apartment communities, and we intend to do so in the future as appropriate opportunities arise. Development activities have been, and in
the future may be, conducted through wholly-owned affiliated companies or through joint ventures with unaffiliated parties. Our
development and construction activities are subject to the following risks, among others:
●
if we seek construction financing we may be unable to obtain such financing for development activities on favorable terms, or
at all, which could cause us to delay or even abandon potential developments;
●
we may experience supply chain constraints, which could result in increased development costs or delay initial occupancy
dates for all or a portion of a development community;
●
we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy and other required
governmental or quasi-governmental permits and authorizations, which could result in increased development costs, delay
initial occupancy dates for all or a portion of a development community, and require us to abandon our activities entirely with
respect to a project for which we are unable to obtain permits or authorizations;
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●
costs may be higher or yields may be less than anticipated as a result of delays in completing projects, costs that exceed budget,
defaults by our counterparties, and/or higher than expected concessions for lease-up and lower rents than expected;
●
we may abandon development opportunities that we have already begun to explore, and we may be unable to recover expenses
already incurred in connection with exploring such development opportunities;
●
we may be unable to complete construction and lease-up of a community on schedule, or we may incur development or
construction costs that exceed our original estimates, and we may be unable to charge rents that would compensate for any
increase in such costs;
●
occupancy rates, rents and concessions at a newly developed community may fluctuate depending on a number of factors,
including market and economic conditions, preventing us from meeting our expected return on our investment and our overall
profitability goals; and
●
when we sell communities or properties that we developed or renovated to third parties, we may be subject to warranty or
construction defect claims that are uninsured or exceed the limits of our insurance.
An Epidemic, Pandemic or Other Health Crisis, and Measures Intended to Prevent the Spread of Such an Event, Could Have a Material
Adverse Effect on our Business, Results of Operations, Cash Flows and Financial Condition. We face risks related to an epidemic, pandemic
or other health crisis, which in the past have impacted, and in the future could impact, the markets in which we operate and could have a
material adverse effect on our business, results of operations, cash flows and financial condition. The impact of an epidemic, pandemic or
other health crisis, and measures to prevent the spread of such an event, could materially and adversely affect our business in a number of
ways. Our rental revenue and operating results depend significantly on the occupancy levels at our properties and the ability of our residents
and retail and commercial tenants to meet their rent obligations to us, which have in the past been, and could in the future be, adversely
affected by, among other things, job losses, furloughs, store closures, lower incomes, uncertainty about the future as a result of an epidemic,
pandemic or other health crisis and related governmental actions such as eviction moratoriums, shelter-in-place orders, prohibitions or limits
on charging certain fees, and limitations on collections and or rent increases. Such government actions have affected, and may again in the
future affect, our ability to collect rent or enforce legal or contractual remedies for the failure to pay rent, which has in turn negatively
impacted, and may in the future negatively impact, our ability to remove residents or retail and commercial tenants who are not paying rent
and our ability to rent their units or other space to new residents or retail and commercial tenants, respectively.
State, local, and federal governments also have increased, and may in the future increase, property taxes or other taxes or fees, or
may enact new taxes or fees, in order to increase revenue in connection with an epidemic, pandemic or other health crisis or otherwise, which
has in the past increased, and may in the future increase, our expenses. Our development and construction projects, including those in our
Debt and Preferred Equity Program, also have been and could in the future be adversely affected by factors related to an epidemic, pandemic
or other health crisis. An epidemic, pandemic or other health crisis, or related impacts thereof also could adversely affect the businesses and
financial conditions of our counterparties, including our joint venture partners, participants in the Debt and Preferred Equity Program, and
general contractors and their subcontractors, and their ability to satisfy their obligations to us and to complete transactions or projects with us
as intended.
Bankruptcy or Defaults of Our Counterparties Could Adversely Affect Our Performance. We have relationships with and we execute
transactions with or receive services from many counterparties, such as general contractors engaged in connection with our development
activities, borrowers, or joint venture partners, among others. As a result, bankruptcies or defaults by these counterparties or their
subcontractors have resulted in, and in the future could result in, services not being provided as expected, projects not being completed on
time, on budget, or at all, or contractual obligations to us not being satisfied. Further, volatility in the financial markets and economic
weakness could affect the counterparties’ ability to complete transactions with us as intended. Either circumstance could result in disruptions
to our operations that may adversely affect our financial condition and results of operations.
Property Ownership Through Partnerships and Joint Ventures May Limit Our Ability to Act Exclusively in Our Interest. We have in
the past and may in the future develop and/or acquire properties through partnerships and joint ventures, including those in which we own a
preferred interest or debt, with other persons or entities when we believe circumstances warrant the use of such structures. As of December
31, 2024, we had active unconsolidated joint ventures and partnerships, including our preferred equity investments, with a total equity
investment of $917.5 million. We have in the past, and could in the future, become engaged in a dispute with one or more of our partners
which could adversely impact us. Moreover, our partners may have business, economic or other objectives that are inconsistent with our
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objectives, including objectives that relate to the appropriate timing and terms of any sale or refinancing of a property. In some instances, our
partners may have competing interests in our markets that could create conflicts of interest. Also, our partners have in the past failed and may
in the future fail to make capital contributions when due and our partners or the project may otherwise not act or perform as expected, or the
property may not be operated in the manner in which we would operate it, any of which may require us to contribute additional capital,
acquire our partner’s interest or other property, or take other actions that may negatively impact the project or our return. In addition, we may
be responsible to our partners for indemnifiable losses. In general, we and our partners may each have the right to trigger a buy-sell or other
similar arrangement, which arrangement or other factors could cause us to sell our interest, or acquire our partner’s interest or other property,
at a time when we otherwise would not have initiated such a transaction and may result in the valuation of our interest in the partnership or
joint venture (if we are the seller) or of the other partner’s interest in the partnership or joint venture (if we are the buyer) at levels which may
not be representative of the valuation that would result from an arm’s length marketing process and could cause us to recognize unanticipated
capital gains or losses or the loss of fee income.
We may also be subject to other risks in connection with partnerships or joint ventures, including (i) a deadlock if we and our
partner are unable to agree upon certain major and other decisions (which could result in litigation or disposing of an asset at a time at which
we otherwise would not sell the asset), (ii) limitations on our ability to liquidate our position in the partnership or joint venture without the
consent of the other partner, and (iii) requirements to provide guarantees in favor of lenders with respect to the indebtedness of the joint
venture.
We May Not be Permitted to Dispose of Certain Properties or Pay Down the Indebtedness Associated with Those Properties When
We Might Otherwise Desire to Do so Without Incurring Additional Costs. In connection with certain property acquisitions, we have agreed
with the sellers that we will not dispose of the acquired properties or reduce the mortgage indebtedness on such properties for significant
periods of time unless we pay certain of the resulting tax costs of the sellers or dispose of the property in a transaction in which a gain is not
recognized for federal income tax purposes by such sellers, and we may enter into similar agreements in connection with future property
acquisitions. These agreements could result in us retaining properties that we would otherwise sell or not paying down or refinancing
indebtedness that we would otherwise pay down or refinance. However, subject to certain conditions, we generally retain the right to
substitute other property or debt to meet these obligations to the sellers.
We Could Incur Significant Insurance Costs and Some Potential Losses May Not Be Adequately Covered by Insurance Reserves. We
have a comprehensive insurance program covering our properties and operating activities with limits of liability, deductibles and self-insured
retentions that we believe are comparable to similarly situated companies, including within the multifamily industry. We believe the policy
specifications and insured limits of these policies are adequate and appropriate. There are, however, certain types of extraordinary losses that
may not be adequately covered under our insurance program. In addition, we will sustain losses due to insurance deductibles, self-insured
retention, uninsured claims or casualties, or losses in excess of applicable coverage.
If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a
property, as well as the future revenue from the property. In such an event, we might nevertheless remain obligated for any mortgage debt or
other financial obligations related to the property. Material losses in excess of insurance proceeds may occur in the future. If one or more of
our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to
repair or rebuild the property. Such events could materially and adversely affect our financial condition and results of operations.
The cost of insuring our apartment communities and our operations is a component of expense. Insurance premiums and the terms
and conditions of insurance policies are subject to significant fluctuations and changes, including recent increases in premiums, which are
generally outside of our control. We insure our properties and our operations with insurance companies that we believe have a good rating
and financial profile at the time our policies are put into effect. The financial condition of one or more insurance companies that insure us
may be negatively impacted, which could result in their inability to pay on future insurance claims. Their inability to pay future claims may
have a negative impact on our financial results. In addition, the failure, or exit or partial exit from an insurance market, of one or more
insurance companies or other changes in insurance markets in general may affect our ability to obtain insurance coverage in the amounts that
we seek, or at all, increase the costs to renew or replace our insurance policies, cause us to self-insure a larger portion of the risk, or increase
the cost of insuring properties.
Failure to Succeed in New Markets May Limit Our Growth. We have acquired in the past, and we may acquire in the future if
opportunities we believe are appropriate arise, apartment communities that are outside of our existing
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markets. Entering into new markets may expose us to a variety of risks, and we may not be able to operate successfully in new markets.
These risks include, among others:
●
inability to accurately evaluate local apartment market conditions and local economies;
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inability to hire and retain key personnel;
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lack of familiarity with local governmental and permitting procedures; and
●
inability to achieve budgeted financial results.
Failure to Succeed with New Initiatives May Limit Our Ability to Grow NOI. We have in the past developed and may in the future
develop initiatives or processes that are intended to drive operating efficiencies and grow NOI, including smart home technologies and self-
service options that are accessible to residents through smart devices or otherwise. Such initiatives in the past have involved and in the future
may involve our associates having new or different responsibilities and processes. We may incur significant costs and divert resources in
connection with such initiatives or processes, and these initiatives or processes may not perform as projected, which could adversely affect
our results of operations and the market price of our common stock.
Potential Liability for Environmental Contamination Could Result in Substantial Costs. Under various federal, state and local
environmental laws, as a current or former owner or operator of real estate, we could be required to investigate and remediate the effects of
contamination of currently or formerly owned real estate by hazardous or toxic substances, often regardless of our knowledge of or
responsibility for the contamination and solely by virtue of our current or former ownership or operation of the real estate. In addition, we
could be held liable to a governmental authority or to third parties for property damage and for investigation and clean-up costs incurred in
connection with the contamination or we could be required to incur additional costs to change how the property is constructed or operated
due to presence of such substances. These costs could be substantial, and in many cases environmental laws create liens in favor of
governmental authorities to secure their payment. The presence of such substances or a failure to properly remediate any resulting
contamination could materially and adversely affect our ability to borrow against, sell or rent an affected property.
In addition, our properties are subject to various federal, state and local environmental, health and safety laws, including laws
governing the management of wastes and underground and aboveground storage tanks. Noncompliance with these environmental, health and
safety laws could subject us to liability. Changes in laws could increase the potential costs of compliance with environmental laws, health
and safety laws or increase liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise adversely
affect our financial condition and results of operations.
As the owner or operator of real property, we may also incur liability based on various building conditions. For example, buildings
and other structures on properties that we currently own or operate or those we acquire or operate in the future contain, may contain, or may
have contained, asbestos-containing material, or ACM, or other hazardous substances. Environmental, health and safety laws require that
ACM and other hazardous substances be properly managed and maintained and may impose fines or penalties on owners, operators or
employers for non-compliance with those requirements.
These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be disturbed during
maintenance, renovation or demolition of a building, potentially resulting in substantial costs. In addition, we may be subject to liability for
personal injury or property damage sustained as a result of exposure to ACM or other hazardous substances or releases of ACM or other
hazardous substances into the environment.
We cannot assure you that costs or liabilities incurred as a result of environmental or building condition issues will not adversely
affect our financial condition and results of operations.
Our Properties May Contain or Develop Harmful Mold or Suffer from Other Indoor Air Quality Issues, Which Could Lead to
Liability for Adverse Health Effects or Property Damage or Cost for Remediation. When excessive moisture accumulates in buildings or on
building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of
time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical
contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to
airborne toxins or irritants can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions.
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As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly
remediation program to contain or remove the mold or other airborne contaminants or to increase ventilation, which could adversely affect
our results of operations and cash flows. In addition, the presence of significant mold or other airborne contaminants could expose us to
liability from our tenants or others for property damage or personal injury.
Compliance or Failure to Comply with the Americans with Disabilities Act of 1990 or Other Safety Regulations and Requirements
Could Result in Substantial Costs. The Americans with Disabilities Act of 1990, as amended (the “Americans with Disabilities Act”)
generally requires that public buildings, including our properties and other public facing functions related to our business, including our
website, be made accessible to disabled persons. Noncompliance could result in the imposition of fines by the federal government or the
award of damages to private litigants. Claims have been asserted, and in the future claims may be asserted, against us with respect to some of
our properties or operations under the Americans with Disabilities Act. If, under the Americans with Disabilities Act, we are required to make
substantial alterations and capital expenditures in one or more of our properties or otherwise related to our operations, including the removal
of access barriers, it could adversely affect our financial condition and results of operations. In addition, if claims arise, we may expend
resources and incur costs in investigating and resolving such claims even if we or our property was in compliance with the law.
Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety
requirements and federal, state and local accessibility requirements in addition to those imposed by the Americans with Disabilities Act. If
we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements
will change or whether compliance with future requirements will require significant unanticipated expenditures that could adversely affect
our financial condition or results of operations.
The Adoption of, or Changes to, Rent Control, Rent Stabilization, Eviction, Tenants’ Rights and Similar Laws and Regulations in
Our Markets Could Have an Adverse Effect on Our Results of Operations and Property Values. Various state and local governments as well
as the federal government have enacted and may continue to enact rent control, rent stabilization, or limitations, and similar laws, regulations
and policies, including laws or court orders, that could limit our ability to raise rents or charge certain fees which could have a retroactive
effect. For example, in June 2019, the State of New York enacted new rent control regulations known as the Housing Stability and Tenant
Protection Act of 2019, in October of 2019, the State of California enacted the Tenant Protection Act of 2019, and in September 2024, the
City of Salinas California, passed a rent stabilization ordinance. In some cases the increases in rents allowed by such regulations may not
offset increases in expenses, whether such increases in expenses are due to inflation or otherwise. We have seen a recent increase in
governments enacting or considering, or being urged to consider, such laws and regulations. Federal, state and local governments or courts
also have made, and may make in the future, changes to laws related to allowable fees and rents, eviction and other tenants’ rights laws and
regulations (including changes that apply retroactively) that could adversely impact our results of operations and the value of our properties.
Laws and regulations regarding rent control, rent stabilization, eviction, tenants’ rights, allowable fees, and other matters, as well as any
lawsuits against us arising from such laws and regulations, may limit our ability to charge market rents, increase rents, evict delinquent
tenants or charge fees, or recover increases in our operating expenses, which could have an adverse effect on our results of operations and the
value of our properties. In addition, the increases in regulations applicable to our business in general may increase our costs of compliance
and could have an adverse effect on our financial performance.
Compliance with or Changes in Real Estate Tax and Other Laws and Regulations Could Adversely Affect Our Funds from
Operations and Our Ability to Make Distributions to Stockholders. We are subject to federal, state and local laws, regulations, rules and
ordinances at locations where we operate regarding a wide variety of matters that could affect, directly or indirectly, our operations.
Generally, we do not directly pass through costs resulting from compliance with or changes in real estate tax laws to residential property
tenants. We also do not generally pass through increases in income, service or other taxes to tenants under leases. These costs may adversely
affect net operating income and the ability to make distributions to stockholders. Similarly, compliance with or changes in (i) laws increasing
the potential liability for environmental conditions existing on properties or the restrictions on discharges or other conditions, (ii) laws and
regulations regulating housing, such as the Americans with Disabilities Act and the Fair Housing Amendments Act of 1988, or (iii)
employment related laws, among others, may result in significant unanticipated expenditures, which could adversely affect our financial
condition and results of operations. In addition, changes in federal and state legislation and regulation on climate change may result in
increased capital expenditures to improve the energy efficiency of our existing communities and also may require us to spend more on our
new development communities
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without a corresponding increase in revenue. In addition, existing laws could be interpreted in a manner that restricts our ability to use
systems that we currently use in our operations and we may face litigation or regulatory risk in connection with such laws. Future compliance
with new laws of general applicability, laws applicable to companies in our industry, or laws applicable to public companies generally could
increase our costs and could have an adverse effect on our financial performance.
Risk of Litigation. From time to time, we are, and would expect to be in the future, involved in legal proceedings, lawsuits, and other
claims with respect to our properties or operations. For example, we are currently a defendant in a consolidated class action lawsuit and
lawsuits filed by the District of Columbia and the State of Maryland involving RealPage, which is one of our vendors. An unfavorable
resolution of any litigation may have a material adverse effect on our business, results of operations and financial condition. Further, being
involved in litigation, whether the result is favorable or unfavorable, could negatively impact our reputation. Additionally, litigation, whether
the result is favorable or unfavorable, has in the past and may in the future result in substantial costs and expenses and could significantly
divert the attention of management.
Risk of Damage from Catastrophic Weather and Natural Events. Our communities are located in areas that have experienced, and in
the future may experience, catastrophic weather and other natural events from time to time, including mudslides, fires, hurricanes, tornadoes,
floods, deep freezes, snow or ice storms, or other severe inclement weather. These adverse weather and natural events could cause damage or
losses that may be greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the
affected community, as well as anticipated future revenue from that community. We would also continue to be obligated to repay any
mortgage indebtedness or other obligations related to the community. Any such loss could adversely affect our financial condition and results
of operations.
Risk of Potential Climate Change. To the extent significant changes in the climate in areas where our communities are located occur,
we may experience extreme weather conditions and changes in precipitation and temperature or water levels, all of which could result in
physical damage to, and/or a decrease in demand for, our communities located in these areas or communities that are otherwise affected by
these changes. Should the impact of such climate changes be material in nature, or occur for lengthy periods of time, our financial condition
and results of operations could be adversely affected.
Risk of Earthquake Damage. Some of our communities are located in areas subject to earthquakes, including in the general vicinity
of earthquake faults. We cannot assure you that an earthquake would not cause damage or losses greater than insured levels. In the event of a
loss in excess of insured limits, we could lose our capital invested in the affected community, as well as anticipated future revenue from that
community. We may also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. Any
such loss could adversely affect our financial condition and results of operations. Insurance coverage for earthquakes can be costly due to
limited industry capacity. As a result, we may experience shortages in desired coverage levels if market conditions are such that insurance is
not available or the cost of insurance makes it, in management’s view, economically impractical.
Risk of Accidental Death or Injury Due to Fire, Natural Disasters or Other Hazards. The accidental death or injury of persons living
in our communities due to fire, natural disasters, other hazards, or acts or omissions of third parties could have an adverse effect on our
business and results of operations. Our insurance coverage may not cover all losses associated with such events, and we may experience
difficulty marketing communities where any such events have occurred, which could have an adverse effect on our financial condition and
results of operations.
Actual or Threatened Terrorist Attacks and Other Acts of Violence, Destruction or War May Have an Adverse Effect on Our
Business and Operating Results and Could Decrease the Value of Our Assets. Actual or threatened terrorist attacks and other acts of violence,
destruction or war could have an adverse effect on our business and operating results. Attacks or other similar actions that directly impact one
or more of our apartment communities could significantly affect our ability to operate those communities and thereby impair our ability to
achieve our expected results. Further, our insurance coverage may not cover all losses caused by a terrorist attack or similar events. In
addition, the adverse effects that such violent acts and threats of future attacks could have on the U.S. economy could similarly have an
adverse effect on our financial condition and results of operations.
Mezzanine Loan or Other Loan Assets Involve Greater Risks of Loss than Senior Loans Secured by Income-Producing Properties.
We have originated in the past and may in the future originate mezzanine loans, which take the form of subordinated loans secured by second
mortgages on the underlying property, which may be under development, or subordinated loans secured by a pledge of the ownership
interests of either the entity owning the property, which may
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be under development, or a pledge of the ownership interests of the entity that owns the interest in the entity owning the property, which may
be under development, or loans that are not secured. Mezzanine loans may involve a higher degree of risk than a senior mortgage secured by
real property, because the security for the loan may lose all or substantially all of its value as a result of foreclosure by the senior lender and
because it is in second position and there may not be adequate equity in the property. Unsecured loans involve higher risk by virtue of being
unsecured. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse
to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our loan or
debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine or other loan will be satisfied only after the senior debt. As a
result, we may not recover some of or all our investment. In addition, mezzanine loans typically have higher loan-to-value ratios than
conventional mortgage loans, resulting in less equity in the property and increasing the risk of loss of principal. Further, foreclosing on our
security interest may be delayed or otherwise impacted by the existence of the senior loan, the senior lender’s decision regarding whether to
enforce its remedies, or the timing of the senior lender’s foreclosure or enforcement of other remedies with respect to such loan. If there is a
default on the senior debt or an inability to refinance the senior debt, we may contribute additional capital or take other actions that we would
not otherwise pursue absent such default or failure. In addition, in the event of a default or other changes in the circumstances of an
investment, including a change in the value of the applicable property, we may be, and have been in the past, required to change the manner
in which the investment is accounted for, including our ability to recognize earnings, or to recognize an allowance for loan loss or a loss on
consolidation.
Risk Related to Preferred Equity Investments. We have made in the past and may in the future make preferred equity investments in
corporations, limited partnerships, limited liability companies or other entities that have been formed for the purpose of directly or indirectly
acquiring, developing and/or managing real property. Generally, we will not have the ability to control the daily operations of the entity, and
we will not have the ability to select or remove a majority of the members of the board of directors, managers, general partner or partners or
similar governing body of the entity or otherwise control its operations. Although we have sought and would seek to maintain sufficient
influence over the entity to achieve our objectives, our partners may have interests that differ from ours and may be in a position to take
actions without our consent that are inconsistent with our interests. Further, if our partners were to fail to invest additional capital in the entity
when required, which has happened in the past, or otherwise do not perform as expected, we may have to invest additional capital to protect
our investment. Our partners have in the past failed, and may in the future fail, to develop or operate the real property, operate the entity,
refinance property indebtedness or sell the real property in the manner intended and as a result the entity may not be able to redeem our
investment or pay the return expected to us in a timely manner or at all. In addition, we may not be able to dispose of our investment in the
entity in a timely manner or at the price at which we would want to divest or at all. Further, the entity may need to refinance third-party debt
on terms that are inconsistent with our interests or are terms on which we would not elect to incur debt, or the entity may default on third-
party debt. To the extent the entity defaults on third-party debt or is unable to refinance such debt or a portion thereof, we may acquire such
debt or otherwise take action, including contributing additional capital, to protect our position that we would not take absent the default or
inability to refinance. Such activities have in the past involved and may in the future involve foreclosing on the security interest in the
property secured by such debt, seeking a deed-in-lieu of foreclosure or similar remedy or removing our partner, and such activities may
involve costs or delays or create other risks, including the risk of claims from our partners. In the event that such an entity fails to meet
expectations, defaults on its debt, or becomes insolvent or the investment or the underlying property otherwise does not perform as expected,
we may lose all or part of our investment in the entity, be delayed in recovering our investment or the expected returns or directly or
indirectly take over the property or the management thereof at a time at which we would not done so absent the failure to meet expectations
or the default. In addition, in the event of a default or other changes in the circumstances of an investment, including a change in the value of
the applicable property, we may be, and have been in the past, required to change the manner in which the investment is accounted for,
including our ability to recognize earnings, or recognize an impairment or a loss on consolidation.
Risks Related to Ground Leases. We have entered into in the past and may in the future enter into, as either landlord or tenant, a
long-term ground lease with respect to a property or a portion thereof. Such ground leases may contain a rent reset provision that requires
both parties to agree to a new rent or is based upon factors, for example fair market rent, that are not objective and are not within our control.
We may not be able to agree with the counterparty to a revised rental rate, or the revised rental rate may be set by external factors, which
could result in a different rental rate than we forecasted. In the past we have had disagreements with respect to revised rental rates and certain
of such disagreements have gone to arbitration (for resolution as provided in the applicable lease agreement) and have been resolved in a
manner adverse to us. In addition, the other party may not perform as expected under the ground lease or there may be a dispute with the
other party to the ground lease. Any of these circumstances could have an adverse effect on our business, financial condition or operating
results.
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We May Experience a Decline in the Fair Value of Our Assets and Be Forced to Recognize Impairment Charges, Which Could
Adversely Impact Our Financial Condition, Liquidity and Results of Operations and the Market Price of Our Common Stock. A decline in the
fair value of our assets may require us, and has in the past required us, to recognize an impairment against such assets under generally
accepted accounting principles as in effect in the United States (“GAAP”) if we were to determine that, with respect to any assets in
unrealized loss positions, we do not have the ability and intent to hold such assets for a period of time sufficient to allow for recovery to the
amortized cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write
down the amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be
impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could
further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted amortized cost of
such assets at the time of sale. If we are required to recognize asset impairment charges in the future, these charges could adversely affect our
financial condition, liquidity, results of operations and the market price of our common stock.
Any Material Weaknesses Identified in Our Internal Control Over Financial Reporting Could Have an Adverse Effect on the Market
Price of Our Common Stock. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over
financial reporting. If we fail to maintain the adequacy of our internal controls over financial reporting, including any failure to implement
required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their
implementation, our business, results of operations and financial condition could be materially and adversely affected and we could fail to
meet our reporting obligations. In addition, if we have one or more material weaknesses in our internal control over financial reporting, we
could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on the
market price of our common stock.
A Breach of Information Technology Systems On Which We Rely Could Materially and Adversely Impact Our Business, Financial
Condition, Results of Operations and Reputation. We rely on information technology systems, including the internet and networks and
systems and software developed, maintained and controlled by third party vendors and other third parties, to process, transmit and store
information and to manage or support our business processes. Third party vendors may collect and hold personally identifiable information
and other confidential information of our tenants, prospective tenants and employees. We also maintain such information and financial and
business information regarding us and persons and entities with which we do business on our information technology systems. While we take
steps, and generally require third party vendors to take steps, to protect the security of the information maintained in our and third party
vendors’ information technology systems, including associate training and testing and the use of commercially available systems, software,
tools and monitoring to provide security for processing, transmitting and storing of the information, it is possible that our or our third party
vendors’ security measures will not be able to prevent human error or the systems’ or software’s improper functioning, or the loss,
misappropriation, disclosure or corruption of personally identifiable information or other confidential or sensitive information, including
information about our tenants and employees. Cybersecurity breaches, including physical or electronic break-ins, computer viruses, malware,
phishing scams, attacks by hackers, breaches due to employee error or misconduct, and similar breaches, can create system disruptions,
shutdowns or unauthorized access to information maintained on our information technology systems or the information technology systems
of our third party vendors or other third parties or otherwise cause disruption or negative impacts to occur to our business and adversely
affect our financial condition and results of operations. While we maintain cyber risk insurance to provide some coverage for certain risks
arising out of cybersecurity breaches, there is no assurance that such insurance would cover all or a significant portion of the costs or
consequences associated with a cybersecurity breach or other occurrence or that such insurance will continue to be available at rates that we
consider reasonable or at all. We have in the past experienced cybersecurity breaches on our information technology systems or relating to
software or third party vendor systems that we utilize, and, while none to date have been material to us, we expect such breaches may occur
in the future. As the techniques used to obtain unauthorized access to information technology systems become more varied and sophisticated
and the occurrence of such breaches becomes more frequent, we and our third party vendors and other third parties may be unable to
adequately anticipate these techniques or breaches or implement appropriate preventative measures. Any failure to prevent cybersecurity
breaches and maintain the proper function, security and availability of our or our third party vendors’ and other third parties’ information
technology systems could interrupt our operations, damage our reputation and brand, damage our competitive position, make it difficult for
us to attract and retain residents or other tenants, and subject us to liability claims or regulatory penalties that could adversely affect our
business, financial condition and results of operations.
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Our Business and Operations Would Suffer in the Event of Information Technology System Failures. Despite system redundancy and
the existence of disaster recovery plans for our information technology systems, our information technology systems and the information
technology systems maintained by our third party vendors are vulnerable to damage arising from any number of sources beyond our or our
third party vendors’ control, including energy blackouts, natural disasters, terrorism, war, and telecommunication failures. Any failure to
maintain proper function and availability of our or third parties’ information technology systems could interrupt our operations, damage our
reputation, subject us to liability claims or regulatory penalties and could adversely affect our business, financial condition and results of
operations.
A Failure to Keep Pace with Developments in Technology Could Impair our Operations or Competitive Position. Our business
continues and will continue to demand the use of sophisticated systems, software and technology, including artificial intelligence. These
systems, software and technologies must be refined, updated and replaced on a regular basis in order for us to meet our business
requirements, our residents’ demands and expectations, and regulatory requirements. If we are unable to do so on a timely basis or at a
reasonable cost, or fail to do so, our business could suffer. Also, we may not achieve the benefits that we anticipate from any new system,
software or technology, and a failure to do so could result in higher than anticipated costs or could adversely affect our results of operations.
Social Media Presents Risks. The use of social media could cause us to suffer brand damage or unintended information disclosure.
Negative posts or communications about us on a social networking website could damage our reputation. Further, employees or others may
disclose non-public information regarding us or our business or otherwise make negative comments regarding us on social networking or
other websites, which could adversely affect our business and results of operations. As social media evolves, we will be presented with new
risks and challenges.
Our Success Depends on Our Senior Management. Our success depends upon the retention of our senior management, whose
continued service is not guaranteed. We may not be able to find qualified replacements for the individuals who make up our senior
management if their services should no longer be available to us. The loss of services of one or more members of our senior management
team could have a material adverse effect on our business, financial condition and results of operations.
Changes in U.S. Accounting Standards May Materially and Adversely Affect Our Reported Results of Operations. Accounting for
public companies in the United States is in accordance with GAAP, which is established by the Financial Accounting Standards Board (the
“FASB”), an independent body whose standards are recognized by the SEC as authoritative for publicly held companies. Uncertainties posed
by various initiatives of accounting standard-setting by the FASB and the SEC, which create and interpret applicable accounting standards
for U.S. companies, may change the financial accounting and reporting standards or their interpretation and application of these standards
that govern the preparation of our financial statements. These changes could have a material impact on our reported financial condition and
results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in potentially material
restatements of prior period financial statements.
Third-Party Expectations Relating to Environmental, Social and Governance Factors May Impose Additional Costs and Expose Us
to New Risks. There is a focus from certain investors, tenants, employees, and other stakeholders concerning corporate responsibility,
specifically related to environmental, social and governance factors. In addition, there has been increased focus on such matters by various
regulatory authorities, including the SEC and the state of California and other states or jurisdictions, and the activities and expense required
to comply with new laws, regulations or standards may be significant. Some investors may use these factors to guide their investment
strategies and, in some cases, may choose not to invest in us if they believe our policies relating to corporate responsibility are inadequate.
Third-party providers of corporate responsibility ratings and reports on companies have increased in number, resulting in varied and in some
cases inconsistent standards. In addition, the criteria by which companies’ corporate responsibility practices are assessed and the regulations
applicable thereto are evolving, which could result in greater expectations of us and cause us to undertake costly initiatives or activities to
satisfy such new criteria or regulations. Further, if we elect not to or are unable to satisfy such new criteria or do not meet the criteria of a
specific third-party provider or investor, some investors may conclude that our policies with respect to corporate responsibility are
inadequate. We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards
set by various constituencies. Furthermore, if our competitors’ corporate responsibility performance is perceived to be greater than ours,
potential or current investors may elect to invest in our competitors instead. In addition, we have communicated certain initiatives and goals
regarding environmental, social and governance matters, and we may in the future communicate revised or additional initiatives or goals. We
could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or
goals. In addition, certain locations have enacted and others may in the future enact sustainability regulations pertaining to buildings,
including
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existing buildings. If we fail to satisfy the expectations of investors, tenants and other stakeholders, our initiatives are not executed as
planned, we are unable to comply with regulations or we do not satisfy our goals, our reputation and financial results could be adversely
affected.
Risks Related to Our Indebtedness and Financings
Changing Interest Rates Could Increase Interest Costs and Adversely Affect Our Cash Flows and the Market Price of Our Common
Stock. We currently have, and expect to incur in the future, interest-bearing debt, including unsecured commercial paper, at rates that vary
with market interest rates. As of December 31, 2024, we had approximately $501.3 million of variable rate indebtedness outstanding, which
constitutes approximately 8.6% of total outstanding indebtedness as of such date, and we have from time to time experienced increases in the
interest rates on such indebtedness, which has increased our interest expense and adversely impacted our results of operations and cash
flows. In addition, as a result of higher interest rates, the costs of hedging transactions have increased significantly and may continue to
increase. Continued increases in interest rates would further increase our interest expenses and increase the costs of refinancing existing
indebtedness and of issuing new debt, including unsecured commercial paper. The effect of any prolonged interest rate increases could
negatively impact our ability to service our indebtedness, make distributions to security holders, make acquisitions and develop properties.
Insufficient Cash Flow Could Affect Our Debt Financing and Create Refinancing Risk. We are subject to the risks normally
associated with debt financing, including the risk that our operating income and cash flow could be insufficient to make required payments of
principal and interest, could restrict or limit our ability to incur additional debt, or could restrict our borrowing capacity under our line of
credit due to debt covenant restraints. Sufficient cash flow may not be available to make all required debt payments and satisfy our
distribution requirements to maintain our status as a REIT for federal income tax purposes. In addition, the amounts under our line of credit
may not be available to us and we may not be able to access the commercial paper market if our operating performance falls outside the
constraints of our debt covenants. We are also likely to need to refinance substantially all of our outstanding debt as it matures. We may not
be able to refinance existing debt, or the terms of any refinancing may not be as favorable as the terms of the existing debt, which could
create pressure to sell assets or to issue additional equity when we would otherwise not choose to do so. In addition, our failure to comply
with our debt covenants could result in a requirement to repay our indebtedness prior to its maturity, which could have a material adverse
effect on our financial condition and cash flow, increase our financing costs and impact our ability to make distributions to our stockholders.
Failure to Generate Sufficient Income Could Impair Debt Service Payments and Distributions to Stockholders. If our apartment
communities do not generate sufficient revenue to meet rental expenses, our ability to make required payments of interest and principal on
our debt and to pay dividends or distributions to our stockholders will be adversely affected. The following factors, among others, may affect
the income generated by our apartment communities:
●
the national and local economies;
●
local real estate market conditions, such as an oversupply or increasing supply of apartment homes;
●
tenants’ or prospective tenants’ perceptions of the safety, convenience, and attractiveness of our communities and the
neighborhoods where they are located;
●
our ability to provide adequate management, maintenance and insurance;
●
rental expenses, including real estate taxes and utilities;
●
competition from other apartment communities or alternative housing options;
●
changes in interest rates and the availability of financing;
●
changes in governmental regulations and the related costs of compliance; and
●
changes in tax and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing.
Expenses associated with our investment in an apartment community, such as debt service, real estate taxes, insurance, labor costs
and maintenance costs, are generally not reduced when circumstances cause a reduction in revenue from that community. If a community is
mortgaged to secure payment of debt and we are unable to make the mortgage payments, we could sustain a loss as a result of foreclosure on
the community or the exercise of other remedies by the mortgage holder.
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Our Debt Level May Be Increased. Our ability to incur debt is limited by covenants in our bank and other credit agreements. We
manage our debt to be in compliance with these debt covenants, but subject to compliance with these covenants, we may increase the amount
of our debt at any time without a concurrent improvement in our ability to service the additional debt.
Financing May Not Be Available and Could Be Dilutive. Our ability to execute our business strategy depends on our access to an
appropriate blend of debt financing, including unsecured lines of credit, construction loans and other forms of secured debt, commercial
paper and other forms of unsecured debt, and equity financing, including common and preferred equity. We and other companies in the real
estate industry have experienced limited availability of financing from time to time, including due to disruptions and uncertainty in the equity
and credit markets and regulatory changes directly or indirectly affecting financing markets, for example the changes in terms on
construction loans brought about by the Basel III capital requirements and the associated “High Volatility Commercial Real Estate”
designation, which has adversely impacted the availability of loans, including construction loans, and the proceeds of and the interest rates
thereon. Restricted lending practices could impact our ability to obtain financing or refinancing for our properties. If we issue additional
equity securities, including under our ATM program, instead of incurring debt, the interests of our existing stockholders could be diluted.
Failure To Maintain Our Current Credit Ratings Could Adversely Affect Our Cost of Funds, Related Margins, Liquidity, and Access
to Capital Markets. Moody’s and Standard & Poor’s routinely evaluate our debt and have given us ratings on our senior unsecured debt,
commercial paper program and preferred stock. These ratings are based on a number of factors, which include their assessment of our
financial strength, liquidity, capital structure, asset quality, and sustainability of cash flows and earnings. Due to changes in these factors and
market conditions, we may not be able to maintain our current credit ratings, which could adversely affect our cost of funds and related
margins, liquidity, and access to capital markets, including our ability to access the commercial paper market.
Disruptions in Financial Markets May Adversely Impact the Availability and Cost of Credit and Have Other Adverse Effects on Us
and the Market Price of Our Common Stock. Our ability to make scheduled payments on, or to refinance, our debt obligations will depend on
our operating and financial performance, which in turn is subject to prevailing economic conditions and to financial, business and other
factors beyond our control. The global equity and credit markets have experienced in the past, and may experience in the future, periods of
extraordinary turmoil and volatility. These circumstances may materially and adversely impact liquidity in the financial markets at times,
making terms for certain financings less attractive or in some cases unavailable. Disruptions and uncertainty in the equity and credit markets,
including as a result of bank failures and uncertainty in the banking sector generally, may negatively impact our ability to refinance existing
indebtedness and access additional financing for acquisitions, development of our properties and other purposes at reasonable terms or at all,
which may negatively affect our business and the market price of our common stock. We also rely on the financial institutions that are parties
to our revolving credit facility and other credit facilities. If these institutions become capital constrained, tighten their lending standards or
become insolvent or if they experience excessive volumes of borrowing requests from other borrowers within a short period of time, they
may be unable or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our revolving
credit facility. If we are not successful in refinancing our existing indebtedness when it becomes due, we may be forced to dispose of
properties on disadvantageous terms, which might adversely affect our ability to service other debt and to meet our other obligations. A
prolonged downturn in the financial markets may cause us to seek alternative sources of potentially less attractive financing and may require
us to adjust our business plan accordingly. These events also may make it more difficult or costly for us to raise capital through the issuance
of our common or preferred stock.
A Change in U.S. Government Policy or Support Regarding Fannie Mae or Freddie Mac Could Have a Material Adverse Impact on
Our Business. While in recent years we have decreased our borrowings from Fannie Mae and Freddie Mac, Fannie Mae and Freddie Mac are
a major source of financing to participants in the multifamily housing markets including potential purchasers of our properties. Potential
options for the future of agency mortgage financing in the U.S. have been, and may in the future be, suggested that could involve a reduction
in the amount of financing Fannie Mae and Freddie Mac are able to provide, limitations on the loans that the agencies may make, which may
not include loans secured by properties like our properties, or the phase out of Fannie Mae and Freddie Mac. Should Fannie Mae and Freddie
Mac discontinue providing liquidity to our sector, have their mandates changed or reduced or be disbanded or reorganized by the
government, or if there is reduced government support for multifamily housing generally, it may adversely affect interest rates, capital
availability, development of multifamily communities and the value of multifamily residential real estate and, as a result, may adversely
affect our business and results of operations.
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The Soundness of Financial Institutions Could Adversely Affect Us. We have relationships with many financial institutions,
including lenders under our credit facilities, and, from time to time, we execute transactions with counterparties in the financial services
industry. Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions,
transactional counterparties or other companies in the financial services industry generally, or concerns or rumors about any events of these
kinds or other similar risks, could result in losses or defaults by these institutions or counterparties or could lead to market-wide liquidity
problems. Disruptions and uncertainty with respect to financial institutions, including as a result of bank failures and liquidity concerns, may
negatively impact our ability to refinance existing indebtedness and access additional financing for acquisitions, development of our
properties and other purposes at reasonable terms or at all, which may negatively affect our business and the market price of our common
stock. In addition, in the event that the volatility of the financial markets adversely affects our financial institutions or other counterparties,
we or other parties to the transactions with us may be unable to complete transactions as intended, which could adversely affect our results of
operations.
Interest Rate Hedging Contracts May Be Ineffective and May Result in Material Charges. From time to time when we anticipate
issuing debt securities, we may seek to limit our exposure to fluctuations in interest rates during the period prior to the pricing of the
securities by entering into interest rate hedging contracts. We may do this to increase the predictability of our financing costs. Also, from time
to time we may rely on interest rate hedging contracts to limit our exposure under variable rate debt to unfavorable changes in market interest
rates. If the terms of new debt securities are not within the parameters of, or market interest rates fall below that which we incur under a
particular interest rate hedging contract, the contract is ineffective. Furthermore, the settlement of interest rate hedging contracts has involved
and may in the future involve material charges. In addition, our use of interest rate hedging arrangements may expose us to additional risks,
including a risk that a counterparty to a hedging arrangement may fail to honor its obligations. Developing an effective interest rate risk
strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance
that our hedging activities will have the desired beneficial impact on our results of operations or financial condition. Termination of these
hedging agreements typically involves costs, such as transaction fees or breakage costs.
Risks Related to Tax Laws
We Would Incur Adverse Tax Consequences if We Failed to Qualify as a REIT. We have elected to be taxed as a REIT under the
Code. Our qualification as a REIT requires us to satisfy numerous requirements, some on an annual and quarterly basis, established under
highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and involves the
determination of various factual matters and circumstances not entirely within our control. We intend that our current organization and
method of operation will enable us to continue to qualify as a REIT, but we may not so qualify or we may not be able to remain so qualified
in the future. In addition, U.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of
those laws may be amended at any time, potentially with retroactive effect. Future legislation, new regulations, administrative interpretations
or court decisions could adversely affect our ability to qualify as a REIT or adversely affect our stockholders.
If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular
corporate rates, and would not be allowed to deduct dividends paid to our stockholders in computing our taxable income. Also, unless the
Internal Revenue Service granted us relief under certain statutory provisions, we could not re-elect REIT status until the fifth calendar year
after the year in which we first failed to qualify as a REIT. The additional tax liability from the failure to qualify as a REIT would reduce or
eliminate the amount of cash available for investment or distribution to our stockholders. This would likely have a significant adverse effect
on the value of our securities and our ability to raise additional capital. In addition, we would no longer be required to make distributions to
our stockholders. Even if we continue to qualify as a REIT, we will continue to be subject to certain federal, state and local taxes on our
income and property.
Certain of our subsidiaries have also elected to be taxed as REITs under the Code, and are therefore subject to the same risks in the
event that any such subsidiary fails to qualify as a REIT in any taxable year.
Dividends Paid by REITs Generally Do Not Qualify for Reduced Tax Rates. In general, qualified dividends paid to individual U.S.
stockholders are eligible for a reduced 20% U.S. federal income tax rate. However, unlike dividends received from a corporation that is not a
REIT, our regular dividends (i.e., dividends other than capital gain dividends) paid to individual U.S. stockholders generally are not eligible
for the reduced rates on qualified dividends and are instead taxed at ordinary income rates. However, individual U.S. stockholders generally
may deduct 20% of our regular
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dividends under Section 199A of the Code, reducing the effective tax rate applicable to such dividends (although such provision will expire
after December 31, 2025 absent future legislation).
We Conduct a Portion of Our Business Through Taxable REIT Subsidiaries, Which Are Subject to Certain Tax Risks. We have
established or invested in and conduct a portion of our business through taxable REIT subsidiaries. Despite our qualification as a REIT,
taxable REIT subsidiaries must pay income tax on their taxable income. In addition, we must comply with various tests to continue to qualify
as a REIT for federal income tax purposes, and our income from and investments in taxable REIT subsidiaries generally do not constitute
permissible income and investments for certain of these tests. While we will attempt to ensure that our dealings with taxable REIT
subsidiaries will not adversely affect our REIT qualification, we cannot provide assurance that we will successfully achieve that result.
Furthermore, we may be subject to a 100% penalty tax or taxable REIT subsidiaries may be denied deductions, to the extent our dealings
with taxable REIT subsidiaries are not deemed to be arm’s length in nature or are otherwise not respected.
REIT Distribution Requirements Limit Our Available Cash. As a REIT, we are subject to annual distribution requirements, which
limit the amount of cash we retain for other business purposes, including amounts to fund our growth. We generally must distribute annually
at least 90% of our net REIT taxable income, excluding any net capital gain, in order for our distributed earnings not to be subject to
corporate income tax. We intend to make distributions to our stockholders to comply with the requirements of the Code. However,
differences in timing between the recognition of taxable income and the actual receipt of cash and/or nondeductible expenditures, could
require us to sell assets or borrow funds on a short-term or long-term basis to meet the 90% distribution requirement of the Code. To the
extent we distribute at least 90%, but less than 100%, of our net REIT taxable income we will be subject to tax at regular corporate tax rates
on the retained portion.
Certain Property Transfers May Generate Prohibited Transaction Income, Resulting in a Penalty Tax on Gain Attributable to the
Transaction. From time to time, we may transfer or otherwise dispose of some of our properties. Under the Code, any gain resulting from
transfers of properties that we hold as inventory or primarily for sale to customers in the ordinary course of business would be treated as
income from a prohibited transaction and subject to a 100% penalty tax. Since we acquire properties for investment purposes, we do not
believe that our occasional transfers or disposals of property are prohibited transactions. However, whether property is held for investment
purposes is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. The Internal Revenue
Service may contend that certain transfers or disposals of properties by us are prohibited transactions. If the Internal Revenue Service were to
argue successfully that a transfer or disposition of property constituted a prohibited transaction, then we would be required to pay a 100%
penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely
affect our ability to satisfy the income tests for qualification as a REIT for federal income tax purposes.
Changes to the U.S. Federal Income Tax Laws, including the Enactment of Certain Tax Reform Measures, Could Have an Adverse
Impact on Our Business and Financial Results. In recent years, numerous legislative, judicial and administrative changes have been made to
the U.S. federal income tax laws applicable to investments in real estate and REITs, and it is possible that additional legislation may be
enacted in the future. There can be no assurance that future changes to the U.S. federal income tax laws or regulatory changes will not be
proposed or enacted that could impact our business and financial results. The REIT rules are regularly under review by persons involved in
the legislative process and by the Internal Revenue Service and the U.S. Treasury Department, which may result in revisions to regulations
and interpretations in addition to statutory changes. If enacted, certain of such changes could have an adverse impact on our business and
financial results.
We cannot predict whether, when or to what extent any new U.S. federal income tax laws, regulations, interpretations or rulings will
impact the real estate investment industry or REITs. Prospective investors are urged to consult their tax advisors regarding the effect of
potential future changes to the U.S. federal income tax laws on an investment in our shares.
We May Be Adversely Affected by Changes in State and Local Tax Laws and May Become Subject to Tax Audits from Time to Time.
Because we are organized and qualify as a REIT, we are generally not subject to federal income tax, but we are subject to certain state and
local tax. From time to time, changes in state and local tax laws or regulations may result in an increase in our tax liability. A shortfall in tax
revenues for states and local jurisdictions in which we own apartment communities may lead to an increase in the frequency and size of such
changes. If such changes occur, we may be required to pay additional state and local taxes. These increased tax costs could adversely affect
our financial condition and the amount of cash available for the payment of distributions to our stockholders. In the normal course of
business, we or our affiliates (including entities through which we own real estate) may also become subject to federal,
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state or local tax audits. If we (or such entities) become subject to federal, state or local tax audits, the ultimate result of such audits could
have an adverse effect on our financial condition and results of operations.
The Operating Partnership and the DownREIT Partnership Intend to Qualify as Partnerships, but Cannot Guarantee That They
Will Qualify. The Operating Partnership and the DownREIT Partnership intend to qualify as partnerships for federal income tax purposes,
and we intend to take that position for all income tax reporting purposes. If classified as partnerships, the Operating Partnership and the
DownREIT Partnership generally will not be taxable entities and will not incur federal income tax liability. However, the Operating
Partnership and the DownREIT Partnership would be treated as corporations for federal income tax purposes if they were “publicly traded
partnerships,” unless at least 90% of their income was qualifying income as defined in the Code. A “publicly traded partnership” is a
partnership whose partnership interests are traded on an established securities market or are readily tradable on a secondary market (or the
substantial equivalent thereof). Although neither the Operating Partnership’s nor the DownREIT Partnership’s partnership units are traded on
an established securities market, because of the redemption rights of their limited partners, the Operating Partnership’s and DownREIT
Partnership’s units held by limited partners could be viewed as readily tradable on a secondary market (or the substantial equivalent thereof),
and the Operating Partnership and the DownREIT Partnership may not qualify for one of the “safe harbors” under the applicable tax
regulations. Qualifying income for the 90% test generally includes passive income, such as real property rents, dividends and interest. The
income requirements applicable to REITs and the definition of qualifying income for purposes of this 90% test are similar in most respects.
The Operating Partnership and the DownREIT Partnership may not meet this qualifying income test. If either the Operating Partnership or
the DownREIT Partnership were to be taxed as a corporation, unless it qualified for relief under certain statutory savings provisions, such
partnership would incur substantial tax liabilities, and we would then fail to qualify as a REIT for tax purposes and our ability to raise
additional capital would be impaired. In addition, even if the 90% test were met if the Operating Partnership or the DownREIT Partnership
were a publicly traded partnership, there could be adverse tax impacts for certain limited partners.
Qualifying as a REIT Involves Highly Technical and Complex Provisions of the Code. Our qualification as a REIT involves the
application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a
technical or inadvertent violation could jeopardize our REIT qualification. Moreover, new legislation, court decisions or administrative
guidance, in each case possibly with retroactive effect, may make it more difficult or impossible for us to qualify as a REIT. Our qualification
as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements
on a continuing basis. Our ability to satisfy the REIT income and asset tests depends upon our analysis of the characterization and fair market
values of our assets, some of which are not susceptible to a precise determination and for which we will not obtain independent appraisals,
and upon our ability to successfully manage the composition of our income and assets on an ongoing basis. In addition, our ability to satisfy
the requirements to qualify as a REIT depends in part on the actions of third parties over which we have no control or only limited influence,
including in cases where we own an equity interest in an entity that is classified as a partnership for federal income tax purposes.
Risks Related to Our Organization and Ownership of Our Stock
Changes in Market Conditions and Volatility of Stock Prices Could Adversely Affect the Market Price of Our Common Stock. The
stock markets, including the New York Stock Exchange (“NYSE”), on which we list our common stock, have experienced significant price
and volume fluctuations. As a result, the market price of our common stock has been, and in the future could be similarly volatile, and
investors in our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating
performance or prospects. In addition to the risks listed in this “Risk Factors” section, a number of factors could negatively affect the price
per share of our common stock, including:
●
general market and economic conditions;
●
actual or anticipated variations in our quarterly operating results or dividends or our payment of dividends in shares of our
stock;
●
changes in our funds from operations or earnings estimates;
●
difficulties or inability to access capital or extend or refinance existing debt;
●
decreasing (or uncertainty in) real estate valuations;
●
changes in market valuations of similar companies;
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●
publication of research reports about us or the real estate industry;
●
the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities
(including securities issued by other real estate companies);
●
general stock and bond market conditions, including changes in interest rates on fixed income securities, that may lead
prospective purchasers of our common stock to demand a higher annual yield from future dividends;
●
a change in analyst ratings;
●
additions or departures of key management personnel;
●
adverse market reaction to any additional debt we incur in the future;
●
speculation in the press or investment community;
●
terrorist activity, geopolitical events or armed conflicts (including the ongoing war between Russia and Ukraine and the
military conflict in Israel and Gaza), which may adversely affect the markets in which our securities trade, possibly increasing
market volatility and causing the further erosion of business and consumer confidence and spending;
●
failure to qualify as a REIT;
●
strategic decisions by us or by our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic
investments or changes in business strategy;
●
failure to satisfy listing requirements of the NYSE;
●
governmental regulatory action and changes in tax laws; and
●
the issuance of additional shares of our common stock, or the perception that such sales might occur, including under our at-
the-market equity distribution program.
Many of the factors listed above are beyond our control. These factors may cause the market price of shares of our common stock to
decline, regardless of our financial condition, results of operations, business or prospects.
We May Change the Dividend Policy for Our Common Stock in the Future. The decision to declare and pay dividends on our
common stock, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of
directors and will depend on our earnings, funds from operations, liquidity, financial condition, capital requirements, contractual prohibitions
or other limitations under our indebtedness, the annual distribution requirements under the REIT provisions of the Code, state law and such
other factors as our board of directors considers relevant. Any change in our dividend policy could have an adverse effect on the market price
of our common stock.
Maryland Law May Limit the Ability of a Third Party to Acquire Control of Us, Which May Not be in Our Stockholders’ Best
Interests. Maryland business statutes may limit the ability of a third party to acquire control of us. As a Maryland corporation, we are subject
to various Maryland laws which may have the effect of discouraging offers to acquire our Company and of increasing the difficulty of
consummating any such offers, even if our acquisition would be in our stockholders’ best interests. The Maryland General Corporation Law
restricts mergers and other business combination transactions between us and any person who acquires beneficial ownership of shares of our
stock representing 10% or more of the voting power without our board of directors’ prior approval. Any such business combination
transaction could not be completed until five years after the person acquired such voting power, and generally only with the approval of
stockholders representing 80% of all votes entitled to be cast and 66 2/3% of the votes entitled to be cast, excluding the interested
stockholder, or upon payment of a fair price. Maryland law also provides generally that a person who acquires shares of our equity stock that
represents 10% (and certain higher levels) of the voting power in electing directors will have no voting rights unless approved by a vote of
two-thirds of the shares eligible to vote.
Limitations on Share Ownership and Limitations on the Ability of Our Stockholders to Effect a Change in Control of Our Company
Restrict the Transferability of Our Stock and May Prevent Takeovers That are Beneficial to Our Stockholders. One of the requirements for
maintenance of our qualification as a REIT for U.S. federal income tax purposes is that no more than 50% in value of our outstanding capital
stock may be owned by five or fewer individuals,
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including entities specified in the Code, during the last half of any taxable year. Our charter contains ownership and transfer restrictions
relating to our stock primarily to assist us in complying with this and other REIT ownership requirements; however, the restrictions may have
the effect of preventing a change of control which does not threaten our REIT status. These restrictions include a provision that generally
limits ownership by any person of more than 9.9% of the value of our outstanding equity stock, unless our board of directors exempts the
person from such ownership limitation, provided that any such exemption shall not allow the person to exceed 13% of the value of our
outstanding equity stock. Absent such an exemption from our board of directors, the transfer of our stock to any person in excess of the
applicable ownership limit, or any transfer of shares of such stock in violation of the ownership requirements of the Code for REITs, will be
considered null and void, and the intended transferee of such stock will acquire no rights in such shares. These provisions of our charter may
have the effect of delaying, deferring or preventing someone from taking control of us, even though a change of control might involve a
premium price for our stockholders or might otherwise be in our stockholders’ best interests.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 1C. Cybersecurity
Given the prevalence of cybersecurity threats, cybersecurity represents a critical component of the Company’s overall approach to
risk management. The Company’s cybersecurity policies, standards and practices are integrated into the Company’s enterprise risk
management (“ERM”) approach, and cybersecurity risks are among the core enterprise risks that are subject to oversight by the Company’s
Board of Directors (the “Board”). The Company’s cybersecurity policies, standards and practices are derived from recognized frameworks
established by the National Institute of Standards and Technology (“NIST”) and other applicable industry standards, and the Company is
working to obtain NIST certification. Many members of the Company’s cybersecurity team are certified by and have received training from
the International Information Security Consortium (“IISC”). The Company generally approaches cybersecurity threats through a cross-
functional, multilayered approach, with specific the goals of: (i) identifying, attempting to prevent and mitigating cybersecurity threats to the
Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store to use in our business; (iii)
protecting the Company’s intellectual property; (iv) protecting personally identifiable data and maintaining the confidence of our customers,
clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.
Risk Management and Strategy
Consistent with overall ERM policies and practices, the Company’s cybersecurity program focuses on the following areas:
●
Vigilance: The Company operates cybersecurity threat functions 24/7 with the specific goal of identifying, attempting to prevent
and mitigating cybersecurity threats and responding to cybersecurity incidents in accordance with our established incident response
and recovery plans.
●
Systems Safeguards: The Company deploys systems safeguards that are designed to protect the Company’s information systems
from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access
controls, which are evaluated and improved through ongoing vulnerability assessments and cybersecurity threat intelligence.
●
Collaboration: The Company utilizes collaboration mechanisms established with public and private entities, including intelligence
and enforcement agencies, industry groups and third-party service providers, to identify, assess and respond to cybersecurity risks.
●
Third-Party Risk Management: The Company maintains a risk-based approach to identifying and overseeing cybersecurity risks
presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the
systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party
systems. Third-party vendors are assessed against a standardized vendor risk assessment process before being engaged and the
Company requests vendors to
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33
annually recertify that their security controls comply with established industry standards and applicable legal requirements.
●
Insider Threat Management: In order to try to mitigate cybersecurity threats to our systems, the Company attempts to provide
associates with the minimum access to our systems required in order for a given associate to perform his or her assigned duties. We
also perform reviews of access to both our administrative and financial systems as part of our annual compliance procedures, and,
when duties and resources allow, rotate job responsibilities.
●
Training: Upon employment and at least annually thereafter the Company provides mandatory training for our associates regarding
cybersecurity threats, which reinforces the Company’s information security policies, standards and practices, and such training is
scaled to reflect the roles, responsibilities, and information systems access of such personnel. The Company’s cybersecurity team
performs regular phishing tests for associates and provides remedial training for associates who fail such tests. In addition, members
of our cybersecurity team received specialized cybersecurity training.
●
Incident Response and Recovery Planning: The Company has established and maintains incident response and recovery plans
that address the Company’s response to a cybersecurity incident and the recovery from a cybersecurity incident, and such plans are
assessed and evaluated on a regular basis. All meaningful cybersecurity incidents are reported to the Company’s legal department
by our cybersecurity team.
●
Governance, Communication, Coordination and Disclosure: The Company utilizes a cross-functional approach to address the
risk from cybersecurity threats, involving management personnel from the Company’s technology, operations, legal, risk
management, internal audit and other key business functions, third-party vendors and consultants, as well as the members of the
Board and the Audit and Risk Management Committee of the Board (the “Audit Committee”) in an ongoing dialogue regarding
cybersecurity threats and incidents, while also implementing controls and procedures for the escalation of cybersecurity incidents
when appropriate so that decisions regarding the disclosure and reporting of such incidents can be made by management in a timely
manner. Our Senior Vice President – Chief Technology Officer reports on our cybersecurity posture to the Audit Committee
quarterly and the Board is updated at least annually.
A key part of the Company’s strategy for managing risks from cybersecurity threats is the ongoing assessment and testing of the
Company’s processes and practices through auditing, assessments, tabletop exercises, vulnerability testing and other exercises focused on
evaluating the effectiveness of our cybersecurity measures. The Company engages third parties, including legal counsel, to perform
assessments on our cybersecurity measures, including information security maturity assessments, penetration testing inclusive of our resident
facing apps and devices, audits and independent reviews of our information security control environment and operating effectiveness. The
material results of such assessments, audits and reviews are reported to the Audit Committee and the Board, and the Company adapts its
cybersecurity policies, standards, processes, and practices as necessary based on the information provided by the assessments, audits, and
reviews. In addition, in 2024 and 2023, outside legal counsel conducted an exercise regarding preparation for cyber events attended by our
Chairman and Chief Executive Officer, President, Chief Investment Officer and Chief Financial Officer and other members of senior
management.
Governance
The Board, in coordination with the Audit Committee, oversees the management of risks from cybersecurity threats, including the
policies, standards, processes and practices that the Company’s management implements to address risks from cybersecurity threats. The
Board and the Audit Committee each receive presentations and reports on cybersecurity risks, which address a wide range of topics
including, for example, recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat
environment, new tools and vendors being used by the Company related to cybersecurity, technological trends and information security
considerations arising with respect to the Company’s peers and third parties. The Board and the Audit Committee also receive information
regarding any cybersecurity incident when appropriate, as well as ongoing updates regarding such incident until it has been addressed. At
least once each year the Board and the Audit Committee at least quarterly discuss the Company’s approach to cybersecurity risk management
with the Company’s Chief Technology Officer.
The Company’s Chief Technology Officer is the member of the Company’s management that is principally responsible for
overseeing the Company’s cybersecurity risk management program, in partnership with other business
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34
leaders across the Company. The Chief Technology Officer and our Vice President, Information Security work in coordination with the other
members of the Information Security Management System Committee (“ISMS”), which includes department heads and IT personnel. The
Chief Technology Officer also provides monthly reports regarding information technology including cybersecurity to our senior management
including our Chairman and Chief Executive Officer, President, Chief Investment Officer and Chief Financial Officer, Chief Operating
Officer, Senior Vice President – Chief Accounting Officer, Senior Vice President – Investments, and Senior Vice President – General
Counsel. The Company’s Chief Technology Officer has served in various roles in information technology and information security for over
24 years. The Chief Technology Officer holds an undergraduate degree in computer science and a master’s degree in business administration.
The Company’s Vice President, Information Security holds an undergraduate degree in computer science and management science, has
attained a professional certification of Certified Information Systems Security Professional (CISSP) from the IISC and has served in various
roles in information technology and information security for over 15 years. In addition, our Vice President, Information Security is a member
of InfraGard.
The Company’s Chief Technology Officer and Vice President, Information Security, in coordination with the ISMS, work
collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity
threats and to promptly respond to any cybersecurity incidents. To facilitate the success of this program, our IT security team and, when
necessary, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and to respond to cybersecurity
incidents in accordance with the Company’s incident response and recovery plans. Through the ongoing communications from these teams,
the Chief Technology Officer and the Vice President, Information Security monitor the prevention, detection, mitigation, and remediation of
cybersecurity incidents, and report such incidents to the ISMS and other members of management and the Audit Committee or the Board
when appropriate.
To date, the Company has not been materially affected by a cybersecurity incident or cybersecurity threat and no incident has
occurred that is reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition.
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35
Item 2. PROPERTIES
At December 31, 2024, our consolidated apartment portfolio included 169 communities located in 21 markets, with a total of 55,696
completed apartment homes.
The table below set forth a summary of real estate portfolio by geographic market of the Company at December 31, 2024.
SUMMARY OF REAL ESTATE PORTFOLIO BY GEOGRAPHIC MARKET AT DECEMBER 31, 2024
Percentage
Total
Average
Number of
Number of
of Total
Carrying
Average
Home Size
Apartment
Apartment
Carrying
Value
Encumbrances
Cost per
Physical
(in square
Communities
Homes
Value
(in thousands)
(in thousands)
Home
Occupancy
feet)
WEST REGION
Orange County, CA
8
4,305
8.6 % $
1,389,451 $
—
$ 322,753
96.7 %
856
San Francisco, CA
14
3,310
7.6 %
1,224,694
27,000
369,998
96.2 %
830
Seattle, WA
14
2,702
7.0 %
1,128,582
—
417,684
97.1 %
856
Monterey Peninsula, CA
7
1,567
1.3 %
203,571
—
129,911
96.1 %
727
Los Angeles, CA
4
1,225
3.0 %
490,239
—
400,195
96.1 %
967
Other Southern California
3
821
1.4 %
228,259
—
278,026
96.6 %
1,012
Portland, OR
2
476
0.4 %
57,352
—
120,487
97.0 %
903
MID-ATLANTIC REGION
Metropolitan D.C.
24
9,119
16.5 %
2,671,495
288,530
292,959
97.1 %
918
Baltimore, MD
7
2,219
3.5 %
574,107
58,600
258,723
96.2 %
963
Richmond, VA
4
1,359
1.1 %
173,749
—
127,851
96.9 %
1,017
NORTHEAST REGION
Boston, MA
12
4,667
12.2 %
1,975,353
228,553
423,260
96.6 %
994
New York, NY
4
1,945
8.6 %
1,386,449
—
712,827
97.5 %
744
Philadelphia, PA
4
1,172
2.7 %
442,714
—
377,742
96.6 %
949
SOUTHEAST REGION
Tampa, FL
12
4,207
5.1 %
824,301
—
195,936
91.4 %
977
Orlando, FL
11
3,493
3.5 %
572,803
—
163,986
96.6 %
974
Nashville, TN
8
2,261
1.7 %
267,894
—
118,485
96.6 %
933
Other Florida
1
636
0.6 %
96,959
—
152,451
97.2 %
1,130
SOUTHWEST REGION
Dallas, TX
20
7,449
8.4 %
1,358,799
473,196
182,414
96.0 %
858
Austin, TX
6
1,880
2.0 %
326,491
66,919
173,665
96.7 %
891
Denver, CO
2
510
1.6 %
251,694
—
493,518
96.3 %
861
Total Operating Communities
167
55,323
96.8 %
15,644,956
1,142,798
$ 282,793
96.2 %
909
Land
—
—
1.3 %
253,949
—
Held for Disposition
2
373
1.3 %
218,569
—
Other
—
—
0.6 %
95,889
(3,467)
Total Real Estate Owned
169
55,696
100.0 % $
16,213,363 $
1,139,331
Item 3. LEGAL PROCEEDINGS
The Company is a party to various claims and routine litigation arising in the ordinary course of business. We do not believe that the
results of any such claims and litigation, individually or in the aggregate, will have a material adverse effect on our business, financial
position or results of operations. As described in more detail in Note 15, Commitments and Contingencies, to the consolidated financial
statements included in this report, we are currently a defendant, among other companies, in lawsuits related to our use of products licensed
by RealPage, Inc.
Item 4. MINE SAFETY DISCLOSURES
Not Applicable.
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36
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Capital Stock
Common Stock
UDR, Inc.’s common stock has been listed on the New York Stock Exchange (“NYSE”) under the symbol “UDR” since May 7,
1990.
On February 14, 2025, there were 2,552 holders of record of the 331,133,359 outstanding shares of our common stock.
We have determined that, for federal income tax purposes, approximately 94% of the distributions for 2024 represented ordinary
income, 3% represented long-term capital gain and 3% represented unrecaptured section 1250 gain.
UDR pays regular quarterly distributions to holders of its common stock. Future distributions will be at the discretion of our Board
of Directors and will depend on our actual funds from operations, financial condition and capital requirements, the annual distribution
requirements under the REIT provisions of the Code, and other factors.
Series E Preferred Stock
The Series E Cumulative Convertible Preferred Stock (“Series E”) has no stated par value and a liquidation preference of $16.61 per
share. Subject to certain adjustments and conditions, each share of the Series E is convertible at any time at the holder’s option into 1.083
shares of our common stock. The holders of the Series E are entitled to vote on an as-converted basis as a single class in combination with
the holders of common stock at any meeting of our stockholders for the election of directors or for any other purpose on which the holders of
common stock are entitled to vote. The Series E has no stated maturity and is not subject to any sinking fund or any mandatory redemption.
In connection with a special dividend (declared on November 5, 2008), the Company reserved for issuance upon conversion of the Series E
additional shares of common stock to reflect the number of shares a holder of the Series E would have received if the holder had converted
the Series E immediately prior to the record date for this special dividend.
Distributions declared on the Series E for the years ended December 31, 2024 and 2023 were $1.8408 per share, or $0.4602 per
quarter, and $1.8192 per share, or $0.4548 per quarter, respectively. The Series E is not listed on any exchange. At December 31, 2024, a
total of 2.6 million shares of the Series E were outstanding.
Series F Preferred Stock
We are authorized to issue up to 20.0 million shares of our Series F Preferred Stock (“Series F”). The Series F may be purchased by
holders of limited partnership interests in the Operating Partnership and the DownREIT Partnership at a purchase price of $0.0001 per share.
Certain OP/DownREIT unitholders were entitled to subscribe for and purchase one share of the Series F for each OP/DownREIT Unit held.
As of December 31, 2024, a total of 10.4 million shares of the Series F were outstanding. Holders of the Series F are entitled to one
vote for each share of the Series F they hold, voting together with the holders of our common stock, on each matter submitted to a vote of
security holders at a meeting of our stockholders. The Series F does not entitle its holders to any other rights, privileges or preferences.
Distribution Reinvestment and Stock Purchase Plan
We have a Distribution Reinvestment and Stock Purchase Plan under which holders of our common stock may elect to
automatically reinvest their distributions and make additional cash payments to acquire additional shares of our common stock. Stockholders
who do not participate in the plan continue to receive distributions as and when declared. As of February 14, 2025, there were approximately
1,468 participants in the plan.
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37
Unregistered Sales of Equity Securities
From time to time we issue shares of our common stock in exchange for OP Units tendered to the Operating Partnership for
redemption in accordance with the provisions of the Operating Partnership’s limited partnership agreement. Under the terms of the Operating
Partnership’s limited partnership agreement, the holders of OP Units have the right to require the Operating Partnership to redeem all or a
portion of the OP Units held by the holder in exchange for a cash payment based on the market value of our common stock at the time of
redemption. However, the Operating Partnership’s obligation to pay the cash amount is subject to the prior right of the Company to acquire
such OP Units in exchange for either the cash amount or the number of shares of our common stock equal to the number of OP Units being
redeemed.
During the three months ended December 31, 2024, we issued 3,225 shares of our common stock upon redemption of OP Units in
reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.
Purchases of Equity Securities
In January 2008, UDR’s Board of Directors authorized a 15 million share repurchase program. Under the share repurchase program,
UDR may repurchase shares of our common stock in open market purchases, block purchases, privately negotiated transactions or otherwise.
The following table summarizes all of UDR’s repurchases of shares of common stock under this program during the quarter ended
December 31, 2024 (shares in thousands):
Total Number
Maximum
of Shares
Number of
Purchased as
Shares that
Total
Part of
May Yet Be
Number of
Average
Publicly
Purchased
Shares
Price Paid
Announced Plan
Under the Plan
Period
Purchased
per Share
or Program
or Program (a)
Beginning Balance
2,973
$
37.90
2,973
12,027
October 1, 2024 through October 31, 2024
—
—
—
12,027
November 1, 2024 through November 30, 2024
—
—
—
12,027
December 1, 2024 through December 31, 2024
—
—
—
12,027
Balance as of December 31, 2024
2,973
$
37.90
2,973
12,027
(a) This number reflects the number of shares that were available for purchase under our 15 million share repurchase program authorized in
January 2008.
During the three months ended December 31, 2024, certain of our employees surrendered shares of common stock owned by them
to satisfy their statutory federal and state tax obligations associated with the vesting of restricted shares of common stock issued under our
1999 Long-Term Incentive Plan (the “LTIP”). The following table summarizes all of these repurchases during the three months
ended December 31, 2024 (shares in thousands):
Total Number
Maximum
of Shares
Number of
Purchased as
Shares that
Total
Part of
May Yet Be
Number of
Average
Publicly
Purchased
Shares
Price Paid
Announced Plans
Under the Plans
Period
Purchased
per Share (a)
or Programs
or Programs
October 1, 2024 through October 31, 2024
67
$
44.51
N/A
N/A
November 1, 2024 through November 30, 2024
—
—
N/A
N/A
December 1, 2024 through December 31, 2024
1,453
44.79
N/A
N/A
Total
1,520
$
44.78
(a) The price paid per share is based on the closing price of our common stock as of the date of the determination of the federal and state tax
obligations.
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38
Comparison of Five-year Cumulative Total Returns
The following graph compares the five-year cumulative total returns for UDR common stock with the comparable cumulative return
of the Nareit Equity REIT Index, Standard & Poor’s 500 Stock Index, and the Nareit Equity Apartment Index. The graph assumes that $100
was invested on December 31, 2019, in each of our common stock and the indices presented. Historical stock price performance is not
necessarily indicative of future stock price performance. The comparison assumes that all dividends are reinvested.
Period Ending
Index
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
UDR, Inc.
100.00
85.46
137.69
91.65
94.51
111.79
FTSE Nareit Equity Apartment Index
100.00
84.66
138.51
94.25
99.78
120.22
S&P 500 Index
100.00
118.40
152.39
124.79
157.59
197.02
FTSE Nareit Equity REITs Index
100.00
92.00
131.78
99.67
113.35
123.25
The performance graph and the related chart and text, are being furnished solely to accompany this Annual Report on Form 10-K
pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any
general incorporation language in such filing.
Item 6. [RESERVED]
Not Applicable.
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39
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated financial statements appearing elsewhere herein and is
based primarily on the consolidated financial statements for the years ended December 31, 2024, and 2023.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023 of
UDR, Inc. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be
found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Business Overview
We are a self-administered real estate investment trust, or REIT, that owns, operates, acquires, renovates, develops, redevelops,
disposes of, and manages multifamily apartment communities in targeted markets located in the United States. We were formed in 1972 as a
Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland. Our subsidiaries include the Operating
Partnership and the DownREIT Partnership. Unless the context otherwise requires, all references in this Report to “we,” “us,” “our,” “the
Company,” or “UDR” refer collectively to UDR, Inc., its consolidated subsidiaries and its consolidated joint ventures.
At December 31, 2024, our consolidated real estate portfolio included 169 communities in 13 states plus the District of Columbia
totaling 55,696 apartment homes. In addition, we have an ownership interest in 10,860 completed or to-be-completed apartment homes
through unconsolidated joint ventures or partnerships, including 6,436 apartment homes owned by entities in which we hold preferred equity
investments. The Same-Store Community apartment home population for the year ended December 31, 2024, was 51,428.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles (“GAAP”)
requires management to use judgment in the application of accounting policies, including making estimates and assumptions. A critical
accounting policy is one that is both important to our financial condition and results of operations as well as involves some degree of
uncertainty. Estimates are prepared based on management’s assessment after considering all evidence available. Changes in estimates could
affect our financial position or results of operations. Below is a discussion of the accounting policies that we consider critical to
understanding our financial condition or results of operations where there is uncertainty or where significant judgment is required. A
discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in
Note 2, Significant Accounting Policies, to the Notes to the UDR, Inc. Consolidated Financial Statements included in this Report.
Cost Capitalization
In conformity with GAAP, we capitalize those expenditures that materially enhance the value of an existing asset or substantially
extend the useful life of an existing asset. Expenditures necessary to maintain an existing property in ordinary operating condition are
expensed as incurred.
In addition to construction costs, we capitalize costs directly related to the predevelopment, development, and redevelopment of a
capital project, which include, but are not limited to, interest, real estate taxes, insurance, and allocated development and redevelopment
overhead related to support costs for personnel working on the capital projects. We use our professional judgment in determining whether
such costs meet the criteria for capitalization or must be expensed as incurred. These costs are capitalized only during the period in which
activities necessary to ready an asset for its intended use are in progress and such costs are incremental and identifiable to a specific activity
to get the asset ready for its intended use. As each home in a capital project is completed and becomes available for lease-up, the Company
ceases capitalization on the related portion. The costs capitalized are reported on the Consolidated Balance Sheets as Total real estate owned,
net of accumulated depreciation. Amounts capitalized during the years ended December 31, 2024, 2023, and 2022 were $24.4 million, $23.2
million, and $31.3 million, respectively.
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40
Investment in Unconsolidated Entities
We may enter into various joint venture agreements and/or partnerships with unrelated third parties to hold or develop real estate
assets. We must determine for each of these ventures whether to consolidate the entity or account for our investment under the equity method
of accounting. We determine whether to consolidate a joint venture or partnership based on our rights and obligations under the venture
agreement, applying the applicable accounting guidance. The application of the rules in evaluating the accounting treatment for each joint
venture or partnership is complex and requires substantial management judgment. We evaluate our accounting for investments on a regular
basis including when a significant change in the design of an entity occurs. Throughout our financial statements, and in this Management’s
Discussion and Analysis of Financial Condition and Results of Operations, we use the term “joint venture” or “partnership” when referring to
investments in entities in which we do not have a 100% ownership interest.
We continually evaluate our investments in unconsolidated joint ventures when events or changes in circumstances indicate that
there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment
is other-than-temporary. These factors include, but are not limited to, age of the venture, our intent and ability to retain our investment in the
entity, the financial condition and long-term prospects of the entity, and the relationships with the other joint venture partners and its lenders.
The amount of loss recognized is the excess of the investment’s carrying amount over its estimated fair value. If we believe that the decline
in fair value is temporary, no impairment is recorded. The aforementioned factors are taken as a whole by management in determining the
valuation of our investment property. Should the actual results differ from management’s judgment, the valuation could be negatively
affected and may result in a negative impact to our Consolidated Financial Statements.
Impairment of Long-Lived Assets
Quarterly or when changes in circumstances warrant, we will assess our real estate properties for indicators
of impairment. The judgments regarding the existence of impairment indicators are based on certain factors. Such factors include, among
other things, operational performance, market conditions, the Company’s intent and ability to hold the related asset, as well as any significant
cost overruns on development properties.
If a real estate property has indicators of impairment, we assess whether the long-lived asset’s carrying value exceeds the
community’s undiscounted future cash flows, which is representative of projected net operating income (“NOI”) plus the residual value of
the community. Our future cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and
operating conditions and our estimated holding periods. If such indicators of impairment are present and the carrying value exceeds the
undiscounted cash flows of the community, an impairment loss is recognized equal to the excess of the carrying amount of the asset over its
estimated fair value. Our estimates of fair value represent our best estimate based primarily upon unobservable inputs related to rental rates,
operating costs, growth rates, discount rates, capitalization rates, industry trends and reference to market rates and transactions.
For long-lived assets to be disposed of, impairment losses are recognized when the fair value of the asset less estimated cost to sell
is less than the carrying value of the asset. Properties classified as real estate held for disposition generally represent properties that are
actively marketed or contracted for sale with the closing expected to occur within the next twelve months. Real estate held for disposition is
carried at the lower of cost, net of accumulated depreciation, or fair value, less the cost to sell, determined on an asset-by-asset basis.
Expenditures for ordinary repair and maintenance costs on held for disposition properties are charged to expense as incurred. Expenditures
for improvements, renovations, and replacements related to held for disposition properties are capitalized at cost. Depreciation is not
recorded on real estate held for disposition.
Real Estate Investment Properties
We purchase real estate investment properties from time to time and record the fair value to various components, such as land,
buildings, and intangibles related to in-place leases, based on the fair value of each component. In making estimates of fair values for
purposes of allocating purchase price, we utilize various sources, including independent appraisals, our own analysis of recently acquired and
existing comparable properties in our portfolio and other market data. The fair value of buildings is determined as if the buildings were
vacant upon acquisition and subsequently leased at market rental rates. As such, the determination of fair value considers the present value of
all cash flows expected to be generated from the property including an initial lease-up period. We determine the fair value of in-place leases
by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition. In addition, we
consider the cost of acquiring similar leases, the foregone rents
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41
associated with the lease-up period, and the carrying costs associated with the lease-up period. The fair value of in-place leases is recorded
and amortized as amortization expense over the remaining average contractual lease period.
REIT Status
We are a Maryland corporation that has elected to be treated for federal income tax purposes as a REIT. A REIT is a legal entity that
holds interests in real estate and is required by the Code to meet a number of organizational and operational requirements, including a
requirement that a REIT must distribute at least 90% of our REIT taxable income (other than our net capital gain) to our stockholders. If we
were to fail to qualify as a REIT in any taxable year, we will be subject to federal and state income taxes at the regular corporate rates and
may not be able to qualify as a REIT for four years. Based on the net earnings reported for the year ended December 31, 2024 in our
Consolidated Statements of Operations, we would have incurred federal and state GAAP income taxes if we had failed to qualify as a REIT.
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42
Summary of Real Estate Portfolio by Geographic Market
The following table summarizes our market information by major geographic markets as of and for the year ended
December 31, 2024:
December 31, 2024
Year Ended December 31, 2024
Percentage
Total
Weighted
Monthly
Net
Number of
Number of
of Total
Carrying
Average
Income per
Operating
Apartment
Apartment
Carrying
Value (in
Physical
Occupied
Income
Same-Store Communities
Communities
Homes
Value
thousands)
Occupancy
Home (a)
(in thousands)
West Region
Orange County, CA
8
4,305
8.6 % $
1,389,752
96.7 % $
3,094
$
121,009
San Francisco, CA
11
2,781
5.8 %
941,178
97.0 %
3,555
80,841
Seattle, WA
14
2,702
6.9 %
1,120,396
97.1 %
2,870
65,293
Monterey Peninsula, CA
7
1,567
1.3 %
203,748
96.1 %
2,408
33,530
Los Angeles, CA
4
1,225
3.0 %
490,674
96.1 %
3,227
32,667
Other Southern California
3
821
1.4 %
228,141
96.6 %
2,940
20,450
Portland, OR
2
476
0.4 %
57,633
97.0 %
1,992
7,944
Mid-Atlantic Region
Metropolitan D.C.
23
8,819
15.5 %
2,510,001
97.2 %
2,389
168,092
Baltimore, MD
7
2,219
3.5 %
574,442
96.2 %
1,952
33,401
Richmond, VA
4
1,359
1.1 %
173,749
96.9 %
1,878
22,389
Northeast Region
Boston, MA
12
4,667
12.1 %
1,969,347
96.6 %
3,228
124,169
New York, NY
4
1,945
8.5 %
1,376,237
97.6 %
4,983
61,798
Philadelphia, PA
3
972
2.3 %
375,227
96.7 %
2,549
19,552
Southeast Region
Tampa, FL
11
3,877
4.3 %
693,272
96.6 %
2,143
63,340
Orlando, FL
11
3,493
3.5 %
574,688
96.6 %
1,918
53,451
Nashville, TN
8
2,261
1.7 %
270,404
96.6 %
1,753
33,127
Other Florida
1
636
0.6 %
96,996
97.2 %
2,382
12,298
Southwest Region
Dallas, TX
14
5,813
6.2 %
1,002,564
96.5 %
1,775
75,522
Austin, TX
4
1,272
1.2 %
197,458
96.8 %
1,911
16,785
Denver, CO
1
218
0.9 %
148,877
96.7 %
3,646
6,730
Total/Average Same-Store Communities
152
51,428
88.8 %
14,394,784
96.8 % $
2,554
1,052,388
Non-Mature, Commercial Properties & Other
15
3,895
9.9 %
1,600,010
74,201
Total Real Estate Held for Investment
167
55,323
98.7 %
15,994,794
1,126,589
Real Estate Held for Disposition (b)
2
373
1.3 %
218,569
12,234
Total Real Estate Owned
169
55,696
100.0 %
16,213,363
$
1,138,823
Total Accumulated Depreciation
(6,901,026)
Total Real Estate Owned, Net of Accumulated
Depreciation
$
9,312,337
(a) Monthly Income per Occupied Home represents total monthly revenues divided by the average physical number of occupied apartment
homes in our Same-Store portfolio.
(b) The Company had two communities located in Brooklyn, New York and Englewood, New Jersey that met the criteria to be classified as
held for disposition at December 31, 2024.
We report in two segments: Same-Store Communities and Non-Mature Communities/Other.
Our Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2023
and held as of December 31, 2024. These communities were owned and had stabilized occupancy and operating expenses as of the beginning
of the prior year, there is no plan to conduct substantial redevelopment activities, and the communities are not classified as held for
disposition at year end. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three
consecutive months.
Our Non-Mature Communities/Other segment represents those communities that do not meet the criteria to be included in Same-
Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment
components of mixed use properties.
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43
Liquidity and Capital Resources
Liquidity is the ability to meet present and future financial obligations either through operating cash flows, sales of properties,
borrowings under our credit agreements, and/or the issuance of debt and/or equity securities. Our primary source of liquidity is our cash flow
from operations, as determined by rental rates, occupancy levels, and operating expenses related to our portfolio of apartment homes, and
borrowings under our credit agreements. We routinely use our working capital credit facility, our unsecured revolving credit facility and
issuances of commercial paper to temporarily fund certain investing and financing activities prior to arranging for longer-term financing or
the issuance of equity or debt securities. During the past several years, proceeds from the sale of real estate have been used for both investing
and financing activities as we continue to execute on maintaining a diversified portfolio.
We expect to meet our short-term liquidity requirements generally through net cash provided by property operations and borrowings
under our credit agreements and our unsecured commercial paper program. We expect to meet certain long-term liquidity requirements such
as scheduled debt maturities, the repayment of financing on development activities, and potential property acquisitions, through net cash
provided by property operations, secured and unsecured borrowings, the issuance of debt or equity securities, and/or the disposition of
properties. We believe that our net cash provided by property operations and borrowings under our credit agreements and our unsecured
commercial paper program will continue to be adequate to meet both operating requirements and the payment of dividends by the Company
in accordance with REIT requirements. Likewise, the budgeted expenditures for improvements and renovations of certain properties are
expected to be funded from property operations, borrowings under credit agreements, the issuance of debt or equity securities, and/or
dispositions of properties.
We have a shelf registration statement filed with the Securities and Exchange Commission, or “SEC,” which provides for the
issuance of common stock, preferred stock, depositary shares, debt securities, guarantees of debt securities, warrants, subscription rights,
purchase contracts and units to facilitate future financing activities in the public capital markets. Access to capital markets is dependent on
market conditions at the time of issuance.
In July 2021, the Company entered into an ATM sales agreement under which the Company may offer and sell up to 20.0 million
shares of its common stock, from time to time, to or through its sales agents and may enter into separate forward sales agreements to or
through its forward purchasers. Upon entering into the ATM sales agreement, the Company simultaneously terminated the sales agreement
for its prior at-the-market equity offering program, which was entered into in July 2017. During the year ended December 31, 2024 the
Company did not sell any shares of common stock through its ATM program. As of December 31, 2024, we had 14.0 million shares of
common stock available for future issuance under the ATM program.
In connection with any forward sales agreement under the Company’s ATM program, the relevant forward purchasers will borrow
from third parties and, through the relevant sales agent, acting in its role as forward seller, sell a number of shares of the Company’s common
stock equal to the number of shares underlying the agreement. The Company does not initially receive any proceeds from any sale of
borrowed shares by the forward seller.
In August 2024, the Company issued $300.0 million of 5.125% senior medium-term notes due September 1, 2034. Interest is
payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025. The notes were priced at 98.977%
of the principal amount of the notes. The Company used the net proceeds to pay down outstanding indebtedness under its commercial paper
program. The Company entered into and settled treasury lock arrangements to hedge against all interest rate risk of the debt. The all-in
weighted average interest rate, inclusive of the impact of the treasury locks, was 4.95%.
The Company has a $1.3 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $350.0 million
unsecured term loan (the “Term Loan”). The credit agreement for these facilities (as amended, the “Credit Agreement”) allows the total
commitments under the Revolving Credit Facility and the total borrowings under the Term Loan to be increased to an aggregate maximum
amount of up to $2.5 billion, subject to certain conditions, including obtaining commitments from one or more lenders. In August 2024, the
Company amended the Revolving Credit Facility to extend the maturity date to August 31, 2028, with two six-month extension options. The
Revolving Credit Facility was previously set to mature on January 31, 2026, with two six-month extension options, subject to certain
conditions. The Term Loan has a scheduled maturity date of January 31, 2027. In August 2024, the Company amended the Term Loan to
include a twelve-month extension option, subject to certain conditions.
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44
Future Capital Needs
Future development and redevelopment expenditures may be funded through unsecured or secured credit facilities, unsecured
commercial paper, proceeds from the issuance of equity or debt securities, sales of properties, joint ventures, and, to a lesser extent, from
cash flows provided by property operations. Acquisition activity in strategic markets may be funded through joint ventures, by the
reinvestment of proceeds from the sale of properties, through the issuance of equity or debt securities, the issuance of operating partnership
units and the assumption or placement of secured and/or unsecured debt.
During 2025, we have approximately $178.3 million of secured debt maturing, inclusive of principal amortization, and $289.9
million of unsecured debt maturing. We anticipate repaying the debt due in 2025 with cash flow from our operations, proceeds from debt or
equity offerings, proceeds from dispositions of properties, or from borrowings under our credit agreements and our unsecured commercial
paper program.
The following table summarizes our material cash requirements as of December 31, 2024 (dollars in thousands):
Payments Due by Period
Material Cash Requirements
2025
2026-2027
2028-2029
Thereafter
Total
Long-term debt obligations
$ 468,223
$
1,022,972
$
1,082,337
$
3,268,526
$
5,842,058
Interest on debt obligations (a)
179,089
315,748
230,097
216,919
941,853
Letters of credit
3,289
76
—
—
3,365
Operating lease obligations:
Ground leases (b)
12,442
24,884
24,884
393,010
455,220
$ 663,043
$
1,363,680
$
1,337,318
$
3,878,455
$
7,242,496
(a) Interest payments on variable rate debt instruments are based on each debt instrument’s respective year-end interest rate at
December 31, 2024.
(b) For purposes of our ground lease contracts, the Company uses the minimum lease payment, if stated in the agreement. For ground lease
agreements where there is a rent reset provision based on fair market value or changes in the consumer price index but does not include a
specified minimum lease payment, the Company uses the current rent over the remainder of the lease term.
During 2024, we incurred gross interest costs of $205.0 million, of which $9.3 million was capitalized.
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our
financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material.
Guarantor Subsidiary Summarized Financial Information
UDR has certain outstanding debt securities that are guaranteed by the Operating Partnership. With respect to this debt, as further
outlined below, the Operating Partnership fully and unconditionally guarantees payment of any principal, premium and interest in full to the
holders thereof. The Operating Partnership is a subsidiary of UDR, through which UDR conducts a significant portion of its business and
holds a substantial amount of its assets. UDR also conducts business through other subsidiaries, including its taxable REIT subsidiaries. In
addition to its ownership interest in the Operating Partnership, UDR holds interests in subsidiaries and joint ventures, owns and operates
properties, issues securities from time to time and guarantees debt of certain of its subsidiaries. UDR, as the sole general partner of the
Operating Partnership, owns 100 percent of the Operating Partnership’s general partnership interests and approximately 95 percent of its
limited partnership interests and, by virtue thereof, has the ability to control all of the day-to-day operations of the Operating Partnership.
UDR has concluded that it is the primary beneficiary of, and therefore consolidates, the Operating Partnership.
The Operating Partnership is the subsidiary guarantor of certain of our registered debt securities, including the $300 million of
medium-term notes due September 2026, $300 million of medium-term notes due July 2027, $300 million of medium-term notes due
January 2028, $300 million of medium-term notes due January 2029, $600 million of medium-term notes due January 2030, $600 million of
medium-term notes due August 2031, $400 million of medium-term notes due August 2032, $350 million of medium-term notes due March
2033, $300 million of medium-term notes
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45
due in June 2033, $300 million of medium-term notes due September 2034 and $300 million of medium-term notes due November 2034.
The Operating Partnership fully and unconditionally guarantees payment of any principal, premium and interest in full to the
holders of the notes described above. The guarantee forms part of the indenture under which the notes were issued. If, for any reason, we do
not make any required payment in respect of the notes when due, the Operating Partnership will cause the payment to be made to, or to the
order of, the applicable paying agent on behalf of the trustee. Holders of the notes may enforce their rights under the guarantee directly
against the Operating Partnership without first making a demand or taking action against UDR or any other person or entity. The Operating
Partnership may, without the consent of the holders of the notes, assume all of our rights and obligations under the notes and, upon such
assumption, we will be released from our liabilities under the indenture and the notes.
The notes are UDR’s unsecured general obligations and rank equally with all of UDR’s other unsecured and unsubordinated
indebtedness outstanding from time to time. As a result, our payment of amounts due on the notes is subordinated to all of our existing and
future secured obligations to the extent of the value of the collateral pledged toward any such secured obligation. Our payment of amounts
due on the notes also is effectively subordinated to all liabilities, whether secured or unsecured, of any of our non-guarantor subsidiaries
because, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to such subsidiaries, we, as
an equity holder of such subsidiaries, would not receive distributions from such subsidiaries until claims of any creditors of such subsidiaries
are satisfied.
The following tables present the summarized financial information for the Operating Partnership as of December 31, 2024 and
2023, and for the years ended December 31, 2024, 2023, and 2022. The information presented below excludes eliminations necessary to
arrive at the information on a consolidated basis (dollars in thousands):
December 31,
December 31,
2024
2023
Total real estate, net
$
2,562,075
$
2,629,267
Cash and cash equivalents
—
5
Operating lease right-of-use assets
187,886
191,673
Other assets
47,907
75,464
Total assets
$
2,797,868
$
2,896,409
Secured debt, net
$
377,724
$
377,262
Notes payable to UDR (a)
1,429,849
1,298,903
Operating lease liabilities
183,215
186,939
Other liabilities
139,910
133,595
Total liabilities
2,130,698
1,996,699
Total capital
$
667,170
$
899,710
Year Ended
December 31,
2024
2023
2022
Total revenue
$
600,425 $
561,441
$
511,560
Property operating expenses
(271,781)
(243,842)
(217,048)
Real estate depreciation and amortization
(187,821)
(166,744)
(155,451)
Operating income/(loss)
140,823
150,855
139,061
Interest expense (a)
(69,933)
(55,729)
(37,792)
Other income/(loss)
6,595
6,231
(3,589)
Net income/(loss)
$
77,485 $
101,357 $
97,680
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46
(a)
All $1.4 billion and $1.3 billion notes payable to UDR as of December 31, 2024 and 2023, respectively, and $53.6 million, $47.2
million and $35.7 million of interest expense on notes payable to UDR for the years ended December 31, 2024, 2023, and 2022,
respectively, eliminate upon consolidation of UDR’s consolidated financial statements.
Statements of Cash Flows
The following discussion explains the changes in Net cash provided by/(used in) operating activities, Net cash provided by/(used in)
investing activities, and Net cash provided by/(used in) financing activities that are presented in our Consolidated Statements of Cash Flows
for the years ended December 31, 2024 and 2023.
Operating Activities
For the year ended December 31, 2024, our Net cash provided by/(used in) operating activities was $876.8 million compared to
$832.7 million for 2023. The increase in cash flow from operating activities was primarily due to an increase in net operating income
(“NOI”), primarily driven by higher revenue per occupied home, an increase in weighted average physical occupancy, NOI from additional
operating communities, and an increase in operating distributions from our unconsolidated joint ventures, partially offset by higher
borrowing costs.
Investing Activities
For the year ended December 31, 2024, Net cash provided by/(used in) investing activities was $(276.4) million compared to
$(289.1) million for 2023. The decrease in cash used in investing activities was primarily due to a decrease in acquisitions, a decrease in
spend for development of real estate assets, a decrease in spend for capital expenditures, an increase in distributions received from
unconsolidated joint ventures and partnerships, a decrease in cash investments in unconsolidated joint ventures, and a decrease from the net
issuance of notes receivable during the current year compared to the prior year, partially offset by a decrease in proceeds from sales of real
estate.
Acquisitions
In January 2024, the Company acquired its joint venture partner’s common equity interest in a 173 apartment home operating
community located in Oakland, California for $1.4 million. The community was previously owned by a consolidated joint venture of the
Company. (See Note 5, Joint Ventures and Partnerships for more information).
In February 2023, the Company took title to a 136 apartment home operating community located in San Francisco, California,
through a foreclosure proceeding. The community was previously owned by a consolidated joint venture of the Company. (See Note 5, Joint
Ventures and Partnerships for more information).
In August 2023, the Company acquired a portfolio of six operating communities totaling 1,753 apartment homes, which included
four operating communities in Dallas, Texas and two operating communities in Austin, Texas, for a purchase price of $354.6 million. The
Company acquired the portfolio with a combination of cash, the assumption of six mortgage loans with an outstanding principal balance of
approximately $209.4 million (fair value of $191.7 million), and the issuance of 3.6 million OP Units to the seller valued at $141.4 million.
The OP Units were valued based on the closing price per share of UDR’s common stock on the date of acquisition in accordance with GAAP.
The Company increased its real estate assets owned by approximately $344.8 million, recorded $9.8 million of in-place lease intangibles, and
recorded a $17.6 million debt discount in connection with the below-market debt assumed.
Dispositions
In February 2024, the Company sold an operating community located in Arlington, Virginia with a total of 214 apartment homes for
gross proceeds of $100.0 million, resulting in a gain of approximately $16.9 million. This operating community was classified as held for
disposition as of December 31, 2023.
In January 2023, the Company sold the retail component of a development community located in Washington, D.C. for gross
proceeds of approximately $14.4 million, resulting in a gain of less than $0.1 million. The gross proceeds were received ratably throughout
the development of the community and are reflected as a reduction of capital expenditures.
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47
In June 2023, the Company contributed four wholly-owned operating communities, totaling 1,328 apartment homes located in
various markets, to a newly formed joint venture in exchange for a 51.0% interest in the venture. The contribution resulted in the Company
no longer retaining a controlling interest in the communities, and the Company deconsolidated the operating communities. The Company
received approximately $247.9 million in cash proceeds from our joint venture partner at formation. The transaction was accounted for as a
partial sale and resulted in a gain of approximately $325.9 million, which was recorded in Gain/(loss) on sale of real estate owned on the
Consolidated Statement of Operations, which consisted of the gain on the partial sale and the initial measurement of our retained interest at
fair value. (See Note 5, Joint Ventures and Partnerships for further discussion).
In December 2023, the Company sold an operating community located in Hillsboro, Oregon with a total of 276 apartment homes for
gross proceeds of $78.6 million, resulting in a gain of approximately $25.3 million.
We plan to continue to pursue our strategy of exiting markets where long-term growth prospects are limited and redeploying capital
to primary locations in markets we believe will provide the best investment returns.
Capital Expenditures
We capitalize those expenditures that materially enhance the value of an existing asset or substantially extend the useful life of an
existing asset. Expenditures necessary to maintain an existing property in ordinary operating condition are expensed as incurred.
For the year ended December 31, 2024, total capital expenditures of $246.5 million or $4,458 per stabilized home, which in
aggregate include recurring capital expenditures and major renovations, were spent across our portfolio, excluding development, as
compared to $303.7 million or $5,567 per stabilized home for the prior year.
The decrease in total capital expenditures was primarily due to:
●
a decrease of 58.3%, or $71.9 million, in major renovations, which includes major structural changes and/or architectural
revisions to existing buildings;
This was partially offset by:
●
an increase of 15.3%, or $13.1 million, in recurring capital expenditures, which includes asset preservation and turnover-related
expenditures.
The following table outlines capital expenditures and repair and maintenance costs for all of our communities, excluding real estate
under development, for the years ended December 31, 2024 and 2023 (dollars in thousands except Per Home amounts):
Per Home
Year Ended December 31,
Year Ended December 31,
2024
2023
% Change
2024
2023
% Change
Turnover capital expenditures
$
19,230
$
17,595
9.3 % $
348
$
323
7.7 %
Asset preservation expenditures
79,456
68,017
16.8 % 1,437
1,249
15.1 %
Total recurring capital expenditures
98,686
85,612
15.3 % 1,785
1,572
13.5 %
NOI enhancing improvements (a)
92,668
90,627
2.3 % 1,676
1,664
0.7 %
Major renovations (b)
51,441
123,324
(58.3)%
930
2,264
(58.9)%
Operations platform
3,715
4,144
(10.4)%
67
76
(11.8)%
Total capital expenditures (c)
$ 246,510
$ 303,707
(18.8)% $ 4,458
$ 5,576
(20.1)%
Repair and maintenance expense
$ 101,223
$
94,958
6.6 % $ 1,830
$ 1,743
5.0 %
Average home count (d)
55,301
54,476
1.5 %
(a) NOI enhancing improvements are expenditures that result in increased income generation or decreased expense growth.
(b) Major renovations include major structural changes and/or architectural revisions to existing buildings.
(c) Total capital expenditures includes amounts capitalized during the year. Cash paid for capital expenditures is impacted by the net
change in related accruals.
(d) Average number of homes is calculated based on the number of homes outstanding at the end of each month.
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48
We intend to continue to selectively add NOI enhancing improvements, which we believe will provide a return on investment in
excess of our cost of capital. Our objective in redeveloping a community is twofold: we aim to meaningfully grow rental rates while also
achieving cap rate compression through asset quality improvement.
Consolidated Real Estate Under Development and Redevelopment
At December 31, 2024, the Company was not developing any communities although the Company is incurring and capitalizing
costs directly related to predevelopment activities in preparation of future development commencements. During the year ended December
31, 2024, the Company completed the development of two communities located in Tampa, Florida and Addison, Texas, with a total of 415
apartment homes.
At December 31, 2024, the Company had no communities at which it was conducting substantial redevelopment activities.
Unconsolidated Joint Ventures and Partnerships
The Company recognizes income or losses from our investments in unconsolidated joint ventures and partnerships consisting of our
proportionate share of the net income or losses of the joint ventures and partnerships. In addition, we may earn fees for providing
management services to the communities held by the unconsolidated joint ventures and partnerships.
The Company’s Investment in and advances to unconsolidated joint ventures and partnerships, net, are accounted for under the
equity method of accounting. For the year ended December 31, 2024:
●we made investments totaling $50.3 million in our unconsolidated joint ventures and partnerships;
●our proportionate share of the net income/(loss) of the joint ventures and partnerships was $20.2 million, which included an $8.1
million non-cash impairment loss on one of the Company’s preferred equity investments due to a decrease in the value of the
operating community that is deemed to be other-than-temporary; and
●we received cash distributions of $102.4 million, of which $61.3 million were operating cash flows and $41.1 million were
investing cash flows.
We evaluate our investments in unconsolidated joint ventures and partnerships when events or changes in circumstances indicate
that there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the
investment is other-than-temporary. The Company did not recognize any other-than-temporary impairments in the value of its investments in
unconsolidated joint ventures or partnerships during the years ended December 31, 2024 and 2023, other than the one preferred equity
investment discussed above.
Financing Activities
For the years ended December 31, 2024 and 2023, Net cash provided by/(used in) financing activities was $(599.9) million and
$(538.9) million, respectively.
The following significant financing activities occurred during the year ended December 31, 2024:
●
issued $300.0 million of 5.125% senior unsecured medium-term notes due September 2034, for net proceeds of $296.9 million;
●
repaid $138.0 million of secured debt;
●
repaid $15.6 million of unsecured debt;
●
repaid $118.2 million, net on our unsecured commercial paper program;
●
paid $42.8 million of distributions to redeemable noncontrolling interests; and
●
paid $558.5 million of distributions to our common stockholders.
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49
The following significant financing activities occurred during the year ended December 31, 2023:
●
repurchased 0.6 million shares of common stock at an average price of $40.13 per share for approximately $25.0 million;
●
received net proceeds of $108.1 million on our unsecured commercial paper program;
●
repaid $23.4 million on our revolving bank debt;
●
paid $35.6 million of distributions to redeemable noncontrolling interests; and
●
paid $539.9 million of distributions to our common stockholders.
Credit Facilities and Commercial Paper Program
The Company has a $1.3 billion Revolving Credit Facility and a $350.0 million Term Loan. The Credit Agreement for these
facilities allows the total commitments under the Revolving Credit Facility and the total borrowings under the Term Loan to be increased to
an aggregate maximum amount of up to $2.5 billion, subject to certain conditions, including obtaining commitments from one or more
lenders. In August 2024, the Company amended the Revolving Credit Facility to extend the maturity date to August 31, 2028, with two six-
month extension options. The Revolving Credit Facility was previously set to mature on January 31, 2026, with two six-month extension
options, subject to certain conditions. The Term Loan has a scheduled maturity date of January 31, 2027. In August 2024, the Company
amended the Term Loan to include a twelve-month extension option, subject to certain conditions.
Based on the Company’s current credit rating, the Revolving Credit Facility has an interest rate equal to Adjusted SOFR plus a
margin of 77.5 basis points and a facility fee of 15 basis points, and the Term Loan has an interest rate equal to Adjusted SOFR plus a margin
of 83.0 basis points. Depending on the Company’s credit rating, the margin under the Revolving Credit Facility ranges from 70 to 140 basis
points, the facility fee ranges from 10 to 30 basis points, and the margin under the Term Loan ranges from 75 to 160 basis points. Further, the
Credit Agreement includes sustainability adjustments pursuant to which the applicable margin for the Term Loan may be reduced by up to
two basis points contingent upon the Company receiving green building certifications, which is reflected in the margin noted above. In
addition, the Credit Agreement allows for the Company in consultation with the sustainability structuring agent to propose key performance
indicators with respect to certain environmental, social, and governance goals of the Company, and thresholds or targets with respect thereto,
and a related amendment to the Credit Agreement, that if entered into may allow a change in the applicable margin for the Revolving Credit
Facility of up to four basis points and a change in the applicable facility fee of up to one basis point.
As of December 31, 2024, we had no outstanding borrowings under the Revolving Credit Facility, leaving $1.3 billion of unused
capacity (excluding $3.4 million of letters of credit at December 31, 2024), and $350.0 million of outstanding borrowings under the Term
Loan.
The Company has a working capital credit facility, which provides for a $75.0 million unsecured revolving credit facility (the
“Working Capital Credit Facility”) with a scheduled maturity date of January 12, 2026. In December 2024, the Company extended the
maturity date from January 12, 2025 to January 12, 2026. Based on the Company’s current credit rating, the Working Capital Credit Facility
has an interest rate equal to Adjusted SOFR plus a margin of 77.5 basis points. Depending on the Company’s credit rating, the margin ranges
from 70 to 140 basis points.
As of December 31, 2024, we had $9.4 million of outstanding borrowings under the Working Capital Credit Facility, leaving $65.6
million of unused capacity.
The bank revolving credit facilities and the term loan are subject to customary financial covenants and limitations, all of which we
were in compliance with at December 31, 2024.
The Company has an unsecured commercial paper program. Under the terms of the program, the Company may issue unsecured
commercial paper up to a maximum aggregate amount outstanding of $700.0 million. The notes are sold under customary terms in the United
States commercial paper market and rank pari passu with all of the Company’s other unsecured indebtedness. The notes are fully and
unconditionally guaranteed by the Operating Partnership. As of December 31, 2024, we had issued $289.9 million of commercial paper, for
one month terms, at a weighted average annualized rate of 4.7%, leaving $410.1 million of unused capacity.
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50
Interest Rate Risk
We are exposed to interest rate risk associated with variable rate notes payable and maturing debt that has to be refinanced. We do
not hold financial instruments for trading or other speculative purposes, but rather issue these financial instruments to finance our portfolio of
real estate assets and operations. Interest rate sensitivity is the relationship between changes in market interest rates and the fair value of
market rate sensitive assets and liabilities. Our earnings are affected as changes in short-term interest rates impact our cost of variable rate
debt and maturing fixed rate debt. We had $501.3 million in variable rate debt that is not subject to interest rate swap contracts as of
December 31, 2024. If market interest rates for variable rate debt increased by 100 basis points, our interest expense would increase by
$6.1 million based on the average balance outstanding during the year.
These amounts are determined by considering the impact of hypothetical interest rates on our borrowing cost. This analysis does not
consider the effects of the adjusted level of overall economic activity that could exist in such an environment or actions we may take to
further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible
effects, the sensitivity analysis assumes no change in our financial structure.
The Company also utilizes derivative financial instruments to manage interest rate risk and generally designates these financial
instruments as cash flow hedges. See Note 14, Derivatives and Hedging Activities, in the Notes to the UDR Consolidated Financial
Statements included in this Report for additional discussion of derivative instruments.
A presentation of cash flow metrics based on GAAP is as follows (dollars in thousands):
Year Ended December 31,
2024
2023
Net cash provided by/(used in) operating activities
$
876,848 $
832,664
Net cash provided by/(used in) investing activities
(276,351)
(289,138)
Net cash provided by/(used in) financing activities
(599,936)
(538,854)
Results of Operations
The following discussion explains the changes in results of operations that are presented in our Consolidated Statements of
Operations for the years ended December 31, 2024 and 2023.
Net Income/(Loss) Attributable to Common Stockholders
Net income/(loss) attributable to common stockholders was $84.8 million ($0.26 per diluted share) for the year ended
December 31, 2024, as compared to $439.5 million ($1.34 per diluted share) for the prior year. The decrease resulted primarily from the
following items, all of which are discussed in further detail elsewhere within this Report:
●
gain on the sale of real estate of $16.9 million recognized from the sale of an operating community located in Arlington,
Virginia during the year ended December 31, 2024, as compared to gains of $351.2 million recognized from the partial sale of
four operating communities located in various markets and the sale of an operating community located in Hillsboro, Oregon,
during year ended December 31, 2023;
●
a decrease in interest income and other income/(expense), net of $30.1 million primarily due to a recorded $37.3 million non-
cash loan reserve related to one of the Company’s joint venture loan investments during the year end December 31, 2024,
which was due to the Company’s assessment of the borrower’s ability to make future scheduled payments on the senior loan
and a decrease in the value of the operating community, partially offset by a $9.7 million increase in interest income from our
notes receivables primarily due to higher outstanding balances during the year ended December 31, 2024, as compared the
same period in 2023;
●
an increase in interest expense of $14.8 million primarily due to higher overall debt balances during the year ended December
31, 2024, as compared the same period in 2023;
●
an increase in general and administrative expenses of $14.4 million primarily attributable to severance benefits associated with
the retirement of an executive officer and the reorganization of certain departments, higher incentive and bonus accruals
primarily driven by better Company performance, and
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51
annual market increases for personnel compensation during the year ended December 31, 2024, as compared to the same
period in 2023;
●
an increase in casualty-related charges/(recoveries), net of $12.0 million primarily attributable to an increase in claim charges
due to severe weather events and a decrease in insurance recoveries during the year ended December 31, 2024 as compared to
the same period in 2023; and
●
an increase in other operating expenses of $10.2 million primarily attributable to an increase in legal-related expenses and
political contributions during the year ended December 31, 2024, as compared to the same period in 2023.
This was partially offset by:
●
an increase in total property NOI of $24.1 million primarily due to higher revenue per occupied home, an increase in weighted
average physical occupancy, and NOI from additional operating communities, partially offset by an increase in property
operating expenses and a decrease from communities sold during 2023 and 2024;
●
a decrease in net income attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT
Partnership of $23.9 million primarily attributed to the noncontrolling interests’ share of the gain from the partial sale of four
operating communities located in various markets and the sale of an operating community located in Hillsboro, Oregon during
the year ended December 31, 2023, as compared to the sale of one operating community located in Arlington, Virginia in the
same period of 2024; and
●
an increase in income/(loss) from unconsolidated entities of $15.5 million primarily attributable to a $24.3 million loss on
consolidation related to one of the Company’s preferred equity investments being consolidated during the year ended
December 31, 2023, partially offset by an $8.1 million non-cash impairment loss on one of the Company’s preferred equity
investments during the year ended December 31, 2024.
Apartment Community Operations
Our net income results are primarily from NOI generated from the operation of our apartment communities. The Company defines
NOI, which is a non-GAAP financial measure, as rental income less direct property rental expenses. Rental income represents gross market
rent less adjustments for concessions, vacancy loss and bad debt. Rental expenses include real estate taxes, insurance, personnel, utilities,
repairs and maintenance, administrative and marketing. Excluded from NOI is property management expense, which is calculated as 3.25%
of property revenue, and land rent. Property management expense covers costs directly related to consolidated property operations, inclusive
of corporate management, regional supervision, accounting and other costs.
Management considers NOI a useful metric for investors as it is a more meaningful representation of a community’s continuing
operating performance than net income as it is prior to corporate-level expense allocations, general and administrative costs, capital structure
and depreciation and amortization.
Although the Company considers NOI a useful measure of operating performance, NOI should not be considered an alternative to
net income or net cash flow from operating activities as determined in accordance with GAAP. NOI excludes several income and expense
categories as detailed in the reconciliation of NOI to Net income/(loss) attributable to UDR, Inc. below.
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52
The following table summarizes the operating performance of our total property NOI for each of the periods presented (dollars in
thousands):
Year Ended
December 31, (a)
2024
2023
% Change
Same-Store Communities:
Same-Store rental income
$
1,524,774 $
1,490,070
2.3 %
Same-Store operating expense (b)
(472,386)
(452,943)
4.3 %
Same-Store NOI
1,052,388
1,037,127
1.5 %
Non-Mature Communities/Other NOI:
Stabilized, non-mature communities NOI (c)
50,869
26,654
90.8 %
Development communities NOI
1,888
(372)
NM *
Non-residential/other NOI (d)
20,793
15,669
32.7 %
Sold and held for disposition communities NOI
12,885
35,692
(63.9)%
Total Non-Mature Communities/Other NOI
86,435
77,643
11.3 %
Total property NOI
$
1,138,823 $
1,114,770
2.2 %
*
Not meaningful
(a) Same-Store consists of 51,428 apartment homes.
(b) Excludes depreciation, amortization, and property management expenses.
(c) Represents non-mature communities that have achieved 90% occupancy for three consecutive months but do not meet the criteria to be
included in Same-Store Communities.
(d) Primarily non-residential revenue and expense.
The following table is our reconciliation of Net income/(loss) attributable to UDR, Inc. to total property NOI for each of the periods
presented (dollars in thousands):
Year Ended December 31,
2024
2023
Net income/(loss) attributable to UDR, Inc.
$
89,585
$
444,353
Joint venture management and other fees
(8,317)
(6,843)
Property management
54,065
52,671
Other operating expenses
30,416
20,222
Real estate depreciation and amortization
676,068
676,419
General and administrative
84,305
69,929
Casualty-related charges/(recoveries), net
15,179
3,138
Other depreciation and amortization
19,405
15,419
(Gain)/loss on sale of real estate owned
(16,867)
(351,193)
(Income)/loss from unconsolidated entities
(20,235)
(4,693)
Interest expense
195,712
180,866
Interest income and other (income)/expense, net
12,336
(17,759)
Tax provision/(benefit), net
879
2,106
Net income/(loss) attributable to redeemable noncontrolling interests in the Operating Partnership and
DownREIT Partnership
6,246
30,104
Net income/(loss) attributable to noncontrolling interests
46
31
Total property NOI
$
1,138,823
$
1,114,770
Same-Store Communities
Our Same-Store Community properties (those acquired, developed, and stabilized prior to January 1, 2023 and held on
December 31, 2024) consisted of 51,428 apartment homes and provided 92.4% of our total NOI for the year ended December 31, 2024.
NOI for our Same-Store Community properties increased 1.5%, or $15.3 million, for the year ended December 31, 2024 compared
to the same period in 2023. The increase in property NOI was attributable to a 2.3%, or $34.7 million, increase in property rental income,
which was partially offset by a 4.3%, or $19.4 million, increase in operating expenses. The increase in property rental income was primarily
driven by a 1.5%, or $21.6 million, increase in
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53
rental rates, and an 8.3%, or $13.4 million, increase in reimbursement and ancillary and fee income. Weighted average physical occupancy
increased by 0.1% to 96.8% and total monthly income per occupied home increased 2.2% to $2,554.
The increase in operating expenses was primarily driven by an 11.0%, or $6.7 million, increase in personnel costs primarily due to
annual market increases and a refundable payroll tax credit related to the Employee Retention Credit program in 2023, a 5.1%, or $4.6
million, increase in repair and maintenance expense due to an increase in the cost per home of those that were turned during the year, the
impact of inflation on third party vendor costs and weather-related events, a 12.6%, or $3.8 million, increase in administration and marketing
primarily due to the cost for providing property-wide Wi-Fi, and a 1.8%, or $3.3 million, increase in real estate taxes due to higher assessed
valuations.
The operating margin (property net operating income divided by property rental income) was 69.0% and 69.6% for the years ended
December 31, 2024 and 2023, respectively.
Non-Mature Communities/Other
UDR’s Non-Mature Communities/Other represent those communities that do not meet the criteria to be included in Same-Store
Communities, which include communities recently developed or acquired, redevelopment properties, sold or held for disposition properties,
and non-apartment components of mixed use properties.
The remaining 7.6%, or $86.4 million, of our total NOI during the year ended December 31, 2024 was generated from our Non-
Mature Communities/Other. NOI from Non-Mature Communities/Other increased by 11.3%, or $8.8 million, for the year ended December
31, 2024 as compared to the same period in 2023. The increase was primarily attributable to a $24.2 million increase in NOI from stabilized,
non-mature communities, primarily due to development communities completed becoming stabilized and communities acquired in 2023
being owned for the full year, and a $5.1 million increase in non-residential/other NOI primarily due to higher retail tenant rents, partially
offset by a $22.8 million decrease in sold and held for disposition communities NOI due to the sale of an operating community and two
operating communities being held for disposition during the year ended December 31, 2024 as compared to the sale of one operating
community, one operating community held for disposition during the year ended December 31, 2023, and the partial sale of four operating
communities in 2023.
Gain/(Loss) on Sale of Real Estate Owned
During the year ended December 31, 2024, the Company recognized a gain of $16.9 million from the sale of one operating
community located in Arlington, Virginia.
During the year ended December 31, 2023, the Company recognized a gain of $351.2 million from the partial sale of four operating
communities located in various markets and the sale of an operating community located in Hillsboro, Oregon.
Interest income and other income/(expense)
For the years ended December 31, 2024 and 2023, the Company recognized interest income and other income/(expense), net of
$(12.3) million and $17.8 million, respectively. The decrease of $30.1 million was primarily due to a $37.3 million non-cash loan reserve
related to one of the Company’s joint venture loan investments during the year end December 31, 2024, which was due to the Company’s
assessment of the borrower’s ability to make future scheduled payments on the senior loan and a decrease in the value of the operating
community, partially offset by a $9.7 million increase in interest income from our notes receivables primarily due to higher outstanding
balances during the year ended December 31, 2024, as compared the same period in 2023.
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54
Interest expense
For the years ended December 31, 2024 and 2023, the Company recognized interest expense of $195.7 million and $180.9 million,
respectively. The increase in 2024 as compared to 2023 was primarily due to higher overall debt balances during the year ended December
31, 2024, as compared the same period in 2023.
General and administrative
For the years ended December 31, 2024 and 2023, the Company recognized general and administrative expense of $84.3 million
and $69.9 million, respectively. The increase of $14.4 million was primarily attributable to severance benefits associated with the retirement
of an executive officer and the reorganization of certain departments, higher incentive and bonus accruals primarily driven by better
Company performance, and annual market increases for personnel compensation during the year ended December 31, 2024, as compared to
the same period in 2023.
Casualty-related charges/(recoveries), net
For the years ended December 31, 2024 and 2023, the Company recognized casualty-related charges/(recoveries), net of $15.2
million and $3.1 million, respectively. The increase of $12.0 million was primarily attributable to an increase in claim charges due to severe
weather events and a decrease in insurance recoveries during the year ended December 31, 2024 as compared to the same period in 2023.
Other operating expenses
For the years ended December 31, 2024 and 2023, the Company recognized other operating expenses of $30.4 million and $20.2
million, respectively. The increase of $10.2 million was primarily attributable to an increase in legal-related expenses and political
contributions during the year ended December 31, 2024, as compared to the same period in 2023.
Noncontrolling Interest
For the years ended December 31, 2024 and 2023, the Company recognized net income attributable to redeemable noncontrolling
interests in the Operating Partnership and DownREIT Partnership of $6.2 million and $30.1 million, respectively. The decrease in 2024 as
compared to 2023 was primarily attributed to the noncontrolling interests’ share of a gain from the sale of an operating community in
Arlington, Virginia during the year ended December 31, 2024, as compared to the noncontrolling interests’ share of the gains from the partial
sale of four operating communities located in various markets and a gain form the sale of an operating community located in Hillsboro,
Oregon during the year ended December 31, 2023.
Income/(Loss) from Unconsolidated Entities
During the year ended December 31, 2024, the Company recognized income/(loss) from unconsolidated entities of $20.2 million,
which was primarily due to net income from our operating joint ventures and preferred equity investments, partially offset by an $8.1 million
non-cash impairment loss on one of the Company’s preferred equity investments.
During the year ended December 31, 2023, the Company recognized income/(loss) from unconsolidated entities of $4.7 million,
which was primarily due to net income from our operating joint ventures and preferred equity investments, partially offset by a $24.3 million
loss on consolidation of one of our preferred equity investments.
Inflation
Inflation primarily impacts our results of operations as a result of wage pressures and increases in utilities and repair and
maintenance costs. In addition, inflation could also impact our general and administrative expenses, the interest on our debt if variable or
refinanced in a high-inflationary environment, our cost of capital, and our cost of development, redevelopment, maintenance or other
operating activities. However, the majority of our apartment leases have initial terms of 12 months or less, which in an inflationary
environment, and absent other factors such as increased supply, generally enables us to compensate for inflationary effects by increasing
rents on our apartment homes. Although an extreme or sustained escalation in costs could have a negative impact on our residents and their
ability to absorb rent increases, we do not believe this had a material impact on our results for the year ended December 31, 2024.
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Funds from Operations, Funds from Operations as Adjusted, and Adjusted Funds from Operations
Funds from Operations
Funds from operations (“FFO”) attributable to common stockholders and unitholders is defined as Net income/(loss) attributable to
common stockholders (computed in accordance with GAAP), excluding impairment write-downs of depreciable real estate related to the
main business of the Company or of investments in non-consolidated investees that are directly attributable to decreases in the fair value of
depreciable real estate held by the investee, gains and losses from sales of depreciable real estate related to the main business of the
Company and income taxes directly associated with those gains and losses, plus real estate depreciation and amortization, and after
adjustments for noncontrolling interests, and the Company’s share of unconsolidated partnerships and joint ventures. This definition
conforms with the National Association of Real Estate Investment Trust’s (“Nareit”) definition issued in April 2002 and restated in
November 2018. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate
assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many
industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost
accounting to be insufficient by themselves. Thus, Nareit created FFO as a supplemental measure of a REIT’s operating performance. In the
computation of diluted FFO, if OP Units, DownREIT Units, unvested restricted stock, unvested LTIP Units, stock options, and the shares of
Series E Cumulative Convertible Preferred Stock are dilutive, they are included in the diluted share count.
Management considers FFO a useful metric for investors as the Company uses FFO in evaluating property acquisitions and its
operating performance, and believes that FFO should be considered along with, but not as an alternative to, net income and cash flow as a
measure of the Company’s activities in accordance with GAAP. FFO does not represent cash generated from operating activities in
accordance with GAAP and is not necessarily indicative of funds available to fund our cash needs.
Funds from Operations as Adjusted
FFO as Adjusted (“FFOA”) attributable to common stockholders and unitholders is defined as FFO excluding the impact of non-
comparable items including, but not limited to, acquisition-related costs, prepayment costs/benefits associated with early debt retirement,
impairment write-downs or gains and losses on sales of real estate or other assets incidental to the main business of the Company and income
taxes directly associated with those gains and losses, casualty-related expenses and recoveries, severance costs and legal and other costs.
Management believes that FFOA is useful supplemental information regarding our operating performance as it provides a consistent
comparison of our operating performance across time periods and enables investors to more easily compare our operating results with other
REITs. FFOA is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our
operating performance. We believe that Net income/(loss) attributable to common stockholders is the most directly comparable GAAP
financial measure to FFOA. However, other REITs may use different methodologies for calculating FFOA or similar FFO measures and,
accordingly, our FFOA may not always be comparable to FFOA or similar FFO measures calculated by other REITs. FFOA should not be
considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or as an
alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity.
Adjusted Funds from Operations
Adjusted FFO (“AFFO”) attributable to common stockholders and unitholders is defined as FFOA less recurring capital
expenditures on consolidated communities that are necessary to help preserve the value of and maintain functionality at our communities.
Therefore, management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company’s
operational performance than FFO or FFOA.
AFFO is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our
operating performance. We believe that Net income/(loss) attributable to common stockholders is the most directly comparable GAAP
financial measure to AFFO. Management believes that AFFO is a widely recognized measure of the operations of REITs, and presenting
AFFO enables investors to assess our performance in comparison to other REITs. However, other REITs may use different methodologies for
calculating AFFO and, accordingly, our AFFO may not always be comparable to AFFO calculated by other REITs. AFFO should not be
considered as an alternative to net income/(loss) (determined in accordance with GAAP) as an indication of
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financial performance, or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our
liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.
The following table outlines our reconciliation of Net income/(loss) attributable to common stockholders to FFO, FFOA, and AFFO
for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands):
Year Ended December 31,
2024
2023
2022
Net income/(loss) attributable to common stockholders
$
84,750
$
439,505
$
82,512
Real estate depreciation and amortization
676,068
676,419
665,228
Noncontrolling interests
6,292
30,135
5,655
Real estate depreciation and amortization on unconsolidated joint ventures
53,727
42,622
30,062
Impairment loss from unconsolidated joint ventures
8,083
—
—
Net (gain)/loss on consolidation
—
24,257
—
Net gain on the sale of depreciable real estate owned, net of tax
(16,867)
(349,993)
(25,494)
FFO attributable to common stockholders and unitholders, basic
$
812,053
$
862,945
$
757,963
Distributions to preferred stockholders — Series E (Convertible)
4,835
4,848
4,412
FFO attributable to common stockholders and unitholders, diluted
$
816,888
$
867,793
$
762,375
Income/(loss) per weighted average common share, diluted
$
0.26
$
1.34
$
0.26
FFO per weighted average common share and unit, basic
$
2.30
$
2.46
$
2.21
FFO per weighted average common share and unit, diluted
$
2.29
$
2.45
$
2.20
Weighted average number of common shares and OP/DownREIT Units outstanding —
basic
353,283
351,175
343,149
Weighted average number of common shares, OP/DownREIT Units, and common stock
equivalents outstanding — diluted
356,957
354,422
347,094
Impact of adjustments to FFO:
Variable upside participation on preferred equity investment, net
$
—
$
(204)
$
(10,622)
Legal and other costs
13,315
2,869
1,493
Realized and unrealized (gain)/loss on real estate technology investments, net of tax
(8,019)
(3,051)
45,671
Severance costs
10,556
4,164
441
Provision for loan loss (a)
37,271
—
—
Casualty-related charges/(recoveries), net
15,179
3,138
9,733
Total impact of adjustments to FFO
$
68,302
$
6,916
$
46,716
FFOA attributable to common stockholders and unitholders, diluted
$
885,190
$
874,709
$
809,091
FFOA per weighted average common share and unit, diluted
$
2.48
$
2.47
$
2.33
Recurring capital expenditures, inclusive of unconsolidated joint ventures
(105,116)
(90,917)
(77,710)
AFFO attributable to common stockholders and unitholders, diluted
$
780,074
$
783,792
$
731,381
AFFO per weighted average common share and unit, diluted
$
2.19
$
2.21
$
2.11
(a) During the year ended December 31, 2024, the Company recorded a $37.3 million non-cash loan reserve related to one of its note
receivable investments.
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The following table is our reconciliation of FFO share information to weighted average common shares outstanding, basic and
diluted, reflected on the UDR Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022 (shares in
thousands):
Year Ended December 31,
2024
2023
2022
Weighted average number of common shares and OP/DownREIT Units outstanding — basic
353,283
351,175
343,149
Weighted average number of OP/DownREIT Units outstanding
(23,993)
(22,410)
(21,478)
Weighted average number of common shares outstanding — basic per the Consolidated
Statements of Operations
329,290
328,765
321,671
Weighted average number of common shares, OP/DownREIT Units, and common stock
equivalents outstanding — diluted
356,957
354,422
347,094
Weighted average number of OP/DownREIT Units outstanding
(23,993)
(22,410)
(21,478)
Weighted average number of Series E Cumulative Convertible Preferred shares outstanding
(2,848)
(2,908)
(2,916)
Weighted average number of common shares outstanding — diluted per the Consolidated
Statements of Operations
330,116
329,104
322,700
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this item is included in and incorporated by reference from Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations of this Report.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and related financial information required to be filed are attached to this Report. Reference is
made to page F-1 of this Report for the Index to Consolidated Financial Statements and Schedule of UDR, Inc.
Report of independent registered public accounting firm (PCAOB 00042); Ernst & Young LLP, Denver Colorado.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The disclosure controls and procedures of the Company are designed with the objective of ensuring that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and disclosed within the time
periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that such information is
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.
It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions,
regardless of how remote. As a result, our disclosure controls and procedures are designed to provide reasonable assurance that such
disclosure controls and procedures will meet their objectives.
As of December 31, 2024, we carried out an evaluation, under the supervision and with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company of the effectiveness of the design and operation of
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the disclosure controls and procedures of the Company. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer of
the Company concluded that the disclosure controls and procedures of the Company are effective at the reasonable assurance level described
above.
Management’s Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining effective internal control over financial reporting
as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934 for the Company. Under the supervision and with the participation of
the management, the Chief Executive Officer and Chief Financial Officer of the Company conducted an assessment of the effectiveness of
the internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee
of Sponsoring Organizations (2013 Framework) (COSO). Based on such evaluation, management concluded that the Company’s internal
control over financial reporting was effective as of December 31, 2024.
Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements included in
this Report, has audited UDR, Inc.’s internal control over financial reporting as of December 31, 2024. The report of Ernst & Young LLP,
which expresses an unqualified opinion on UDR, Inc.’s internal control over financial reporting as of December 31, 2024, is included under
the heading “Report of Independent Registered Public Accounting Firm” of UDR, Inc. contained in this Report.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-
15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fourth fiscal quarter to which this Report relates that materially
affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company.
Item 9B. OTHER INFORMATION
During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1
trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 9C. DISCLOSURE REGARDING FOREIGN JURSIDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information concerning our directors, executive officers and corporate governance required by Item 10 will be included in the
Proxy Statement to be filed relating to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.
We have a code of ethics for senior financial officers that applies to our principal executive officer, all members of our finance staff,
including the principal financial officer, the principal accounting officer, the treasurer and the controller, our director of investor relations, our
corporate secretary, and all other Company officers. We also have a code of business conduct and ethics that applies to all of our employees.
Information regarding our codes is available on our website, www.udr.com, and is incorporated by reference to the information set forth
under the heading “Corporate Governance Matters” in our definitive proxy statement for UDR’s 2025 Annual Meeting of Stockholders. We
intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our
codes by posting such amendment or waiver on our website.
The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company's securities that
applies to all Company's directors, officers, other covered persons and the Company itself. The Company believes that its insider trading
policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the
Company. A copy of the Company's insider trading policy is filed as Exhibit 19.1 to this Form 10-K.
Item 11. EXECUTIVE COMPENSATION
The information concerning our executive compensation required by Item 11 will be included in the Proxy Statement to be filed
relating to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The information concerning the security ownership of certain beneficial owners and management and related stockholder matters
(including equity compensation plan information) required by Item 12 will be included in the Proxy Statement to be filed relating to our 2025
Annual Meeting of Stockholders and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information concerning certain relationships, related transactions and director independence required by Item 13 will be
included in the Proxy Statement to be filed relating to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information concerning our principal accounting fees and services required by Item 14 will be included in the Proxy Statement
to be filed relating to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.
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PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Report:
1. Financial Statements. See Index to Consolidated Financial Statements and Schedules of UDR, Inc. on page F-1 of this Report.
2. Financial Statement Schedules. See Index to Consolidated Financial Statements and Schedules of UDR, Inc. on page S-1 of this
Report. All other schedules are omitted because they are not required, are inapplicable, or the required information is included in the
financial statements or notes thereto.
3. Exhibits. The exhibits filed with this Report are set forth in the Exhibit Index appearing immediately below.
EXHIBIT INDEX
The exhibits listed below are filed as part of this Report. References under the caption “Location” to exhibits or other filings
indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit
referred to is incorporated by reference. Management contracts and compensatory plans or arrangements filed as exhibits to this Report are
identified by an asterisk. The Commission file number for UDR, Inc.’s Exchange Act filings referenced below is 1-10524.
Exhibit
Description
Location
2.01
Partnership Interest Purchase and Exchange Agreement dated as
of September 10, 1998, by and between UDR, Inc., United
Dominion Realty, L.P., American Apartment Communities
Operating Partnership, L.P., AAC Management LLC, Schnitzer
Investment Corp., Fox Point Ltd. and James D. Klingbeil
including as an exhibit thereto the proposed form of the Third
Amended and Restated Limited Partnership Agreement of United
Dominion Realty, L.P.
Exhibit 2(d) to UDR, Inc.’s Form S-3 Registration
Statement (Registration No. 333-64281) filed with the
Commission on September 25, 1998.
2.02
Agreement of Purchase and Sale dated as of August 13, 2004, by
and between United Dominion Realty, L.P., a Delaware limited
partnership, as Buyer, and Essex The Crest, L.P., a California
limited partnership, Essex El Encanto Apartments, L.P., a
California limited partnership, Essex Hunt Club Apartments, L.P.,
a California limited partnership, and the other signatories named
as Sellers therein.
Exhibit 2.1 to UDR, Inc.’s Current Report on Form 8-K
dated September 28, 2004 and filed with the
Commission on September 29, 2004.
2.03
First Amendment to Agreement of Purchase and Sale dated as of
September 29, 2004, by and between United Dominion
Realty, L.P., a Delaware limited partnership, as Buyer, and Essex
The Crest, L.P., a California limited partnership, Essex El Encanto
Apartments, L.P., a California limited partnership, Essex Hunt
Club Apartments, L.P., a California limited partnership, and the
other signatories named as Sellers therein.
Exhibit 2.2 to UDR, Inc.’s Current Report on Form 8-K
dated September 29, 2004 and filed with the
Commission on October 5, 2004.
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Exhibit
Description
Location
2.04
Second Amendment to Agreement of Purchase and Sale dated as
of October 26, 2004, by and between United Dominion
Realty, L.P., a Delaware limited partnership, as Buyer, and Essex
The Crest, L.P., a California limited partnership, Essex El Encanto
Apartments, L.P., a California limited partnership, Essex Hunt
Club Apartments, L.P., a California limited partnership, and the
other signatories named as Sellers therein.
Exhibit 2.3 to UDR, Inc.’s Current Report on Form 8-
K/A dated September 29, 2004 and filed with the
Commission on November 1, 2004.
2.05
Agreement of Purchase and Sale dated as of January 23, 2008, by
and between UDR, Inc., United Dominion Realty, L.P., UDR
Texas Properties LLC, UDR Western Residential, Inc., UDR
South Carolina Trust, UDR Ohio Properties, LLC, UDR of
Tennessee, L.P., UDR of NC, Limited Partnership, Heritage
Communities L.P., Governour’s Square of Columbus Co.,
Fountainhead Apartments Limited Partnership, AAC Vancouver
I, L.P., AAC Funding Partnership III, AAC Funding Partnership II
and DRA Fund VI LLC.
Exhibit 2.1 to UDR, Inc.’s Current Report on Form 8-K
dated January 23, 2008 and filed with the Commission
on January 29, 2008.
2.06
First Amendment to Agreement of Purchase and Sale dated as of
February 14, 2008, by and between UDR, Inc., United Dominion
Realty, L.P., UDR Texas Properties LLC, UDR Western
Residential, Inc., UDR South Carolina Trust, UDR Ohio
Properties, LLC, UDR of Tennessee, L.P., UDR of NC, Limited
Partnership, Heritage Communities L.P., Governour’s Square of
Columbus Co., Fountainhead Apartments Limited Partnership,
AAC Vancouver I, L.P., AAC Funding Partnership III, AAC
Funding Partnership II and DRA Fund VI LLC.
Exhibit 2.2 to UDR, Inc.’s Current Report on Form 8-
K/A dated March 3, 2008 and filed with the
Commission on May 2, 2008.
2.07
Contribution Agreement by and among Home Properties, L.P.,
UDR, Inc., United Dominion Realty, L.P. and LSREF 4
Lighthouse Acquisitions, LLC, dated June 22, 2015 (UDR, Inc.
and United Dominion Realty, L.P. have omitted certain schedules
and exhibits pursuant to Item 601(b)(2) of Regulation S-K and
shall furnish supplementally to the Commission copies of any of
the omitted schedules and exhibits upon request by the
Commission.)
Exhibit 2.1 to UDR, Inc.’s Current Report on Form 8-K
dated and filed with the Commission on June 22, 2015.
2.08
Amendment Agreement, dated as of August 27, 2015, by and
among UDR, Inc., United Dominion Realty, L.P., Home
Properties, Inc., Home Properties, L.P., LSREF4 Lighthouse
Acquisitions, LLC LSREF4 Lighthouse Corporate Acquisitions,
LLC and LSREF4 Lighthouse Operating Acquisitions, LLC.
Exhibit 2.1 to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2015.
3.01
Articles of Restatement of UDR, Inc.
Exhibit 3.09 to UDR, Inc.’s Current Report on Form 8-
K dated July 27, 2005 and filed with the Commission
on August 1, 2005.
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62
Exhibit
Description
Location
3.02
Articles of Amendment to the Articles of Restatement of
UDR, Inc. dated and filed with the State Department of
Assessments and Taxation of the State of Maryland on March 14,
2007.
Exhibit 3.2 to UDR, Inc.’s Current Report on Form 8-K
dated March 14, 2007 and filed with the Commission
on March 15, 2007.
3.03
Articles of Amendment to the Articles of Restatement of
UDR, Inc. dated August 30, 2011 and filed with the State
Department of Assessments and Taxation of the State of Maryland
on August 31, 2011.
Exhibit 3.1 to UDR, Inc.’s Current Report on Form 8-K
dated August 29, 2011 and filed with the Commission
on September 1, 2011.
3.04
Articles of Amendment to the Articles of Restatement of UDR,
Inc. dated and filed with the State Department of Assessments and
Taxation of the State of Maryland on May 24, 2018.
Exhibit 3.1 to UDR, Inc.’s Current Report on Form 8-K
dated May 24, 2018 and filed with the SEC on May 29,
2018.
3.05
Articles of Amendment to the Articles of Restatement of UDR,
Inc. dated and filed with the State Department of Assessments and
Taxation of the State of Maryland on July 27, 2021.
Exhibit 3.1 to UDR, Inc.’s Current Report on Form 8-K
dated July 29, 2021 and filed with the SEC on July 29,
2021.
3.06
Articles Supplementary relating to UDR, Inc.’s 6.75% Series G
Cumulative Redeemable Preferred Stock dated and filed with the
State Department of Assessments and Taxation of the State of
Maryland on May 30, 2007.
Exhibit 3.4 to UDR, Inc.’s Form 8-A Registration
Statement dated and filed with the Commission on
May 30, 2007.
3.07
Amended and Restated Bylaws of UDR, Inc. (as amended
through May 24, 2018).
Exhibit 3.6 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2018.
4.01
Form of UDR, Inc. Common Stock Certificate.
Exhibit 4.1 to UDR, Inc.’s Current Report on Form 8-K
dated March 14, 2007 and filed with the Commission
on March 15, 2007.
4.02
Senior Indenture dated as of November 1, 1995, by and between
UDR, Inc. and First Union National Bank of Virginia, N.A., as
trustee.
Exhibit 4(ii)(h)(1) to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1996.
4.03
Supplemental Indenture dated as of June 11, 2003, by and
between UDR, Inc. and Wachovia Bank, National Association, as
trustee.
Exhibit 4.03 to UDR, Inc.’s Current Report on Form 8-
K dated June 17, 2004 and filed with the Commission
on June 18, 2004.
4.04
Subordinated Indenture dated as of August 1, 1994 by and
between UDR, Inc. and Crestar Bank, as trustee.
Exhibit 4(i)(m) to UDR, Inc.’s Form S-3 Registration
Statement (Registration No. 33-64725) filed with the
Commission on November 15, 1995.
4.05
Form of UDR, Inc. Senior Debt Security.
Exhibit 4(i)(n) to UDR, Inc.’s Form S-3 Registration
Statement (Registration No. 33-64725) filed with the
Commission on November 15, 1995.
4.06
Form of UDR, Inc. Subordinated Debt Security.
Exhibit 4(i)(p) to UDR, Inc.’s Form S-3 Registration
Statement (Registration No. 33-55159) filed with the
Commission on August 19, 1994.
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Exhibit
Description
Location
4.07
Form of UDR, Inc. Fixed Rate Medium-Term Note, Series A.
Exhibit 4.01 to UDR, Inc.’s Current Report on Form 8-
K dated March 20, 2007 and filed with the Commission
on March 22, 2007.
4.08
Form of UDR, Inc. Floating Rate Medium-Term Note, Series A.
Exhibit 4.02 to UDR, Inc.’s Current Report on Form 8-
K dated March 20, 2007 and filed with the Commission
on March 22, 2007.
4.09
Indenture dated as of April 1, 1994, by and between UDR, Inc.
and Nationsbank of Virginia, N.A., as trustee.
Exhibit 4(ii)(f)(1) to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994.
4.10
Supplemental Indenture dated as of August 20, 2009, by and
between UDR, Inc. and U.S. Bank National Association, as
trustee, to UDR, Inc.’s Indenture dated as of April 1, 1994.
Exhibit 4.1 to UDR, Inc.’s Current Report on Form 8-K
dated August 20, 2009 and filed with the Commission
on August 21, 2009.
4.11
Guaranty of United Dominion Realty, L.P. with respect to
UDR, Inc.’s Indenture dated as of November 1, 1995.
Exhibit 99.1 to UDR, Inc.’s Current Report on Form 8-
K dated and filed with the Commission on
September 30, 2010.
4.12
Guaranty of United Dominion Realty, L.P. with respect to
UDR, Inc.’s Indenture dated as of October 12, 2006.
Exhibit 99.2 to UDR, Inc.’s Current Report on Form 8-
K dated and filed with the Commission on
September 30, 2010.
4.13
First Supplemental Indenture among UDR, Inc., United Dominion
Realty, L.P. and U.S. Bank National Association, as Trustee, dated
as of May 3, 2011, relating to UDR, Inc.’s Medium-Term Notes,
Series A, due Nine Months or More from Date of Issue.
Exhibit 4.1 to UDR, Inc.’s Current Report on Form 8-K
filed with the Commission on May 4, 2011.
4.14
UDR, Inc. 2.950% Medium-Term Note, Series A due
September 2026, issued August 23, 2016.
Exhibit 4.1 to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2016.
4.15
UDR, Inc. 3.500% Medium-Term Note, Series A due July 2027,
issued June 16, 2017.
Exhibit 10.2 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2017.
4.16
UDR, Inc. 3.500% Medium-Term Note, Series A due January
2028, issued December 13, 2017.
Exhibit 4.21 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2017.
4.17
UDR, Inc. 4.400% Medium-Term Note, Series A due January
2029, issued October 26, 2018.
Exhibit 4.21 to UDR, Inc’s Annual Report on Form 10-
K for the year ended December 31, 2018.
4.18
UDR, Inc. 3.200% Medium-Term Note, Series A due January
2030, issued July 2, 2019.
Exhibit 4.1 to UDR, Inc’s Quarterly Report on Form 10-
Q for the quarter ended September 30, 2019.
4.19
UDR, Inc. 3.000% Medium-Term Note, Series A due August
2031, issued August 15, 2019.
Exhibit 4.2 to UDR, Inc’s Quarterly Report on Form 10-
Q for the quarter ended September 30, 2019.
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64
Exhibit
Description
Location
4.20
UDR, Inc. 3.100% Medium-Term Note, Series A due November
2034, issued October 11, 2019.
Exhibit 4.22 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2019.
4.21
UDR, Inc. 3.200% Medium-Term Note, Series A due January
2030, issued October 11, 2019.
Exhibit 4.23 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2019.
4.22
Description of UDR, Inc’s Securities.
Exhibit 4.22 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2021.
4.23
UDR, Inc. 3.200% Medium-Term Note, Series A due January
2030, issued February 28, 2020.
Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2020.
4.24
UDR, Inc. 2.100% Medium-Term Note, Series A due August
2032, issued July 21, 2020.
Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2020.
4.25
UDR, Inc. 1.900% Medium-Term Note, Series A due March 2033,
issued December 14, 2020.
Exhibit 4.26 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2020.
4.26
UDR, Inc. 2.100% Medium-Term Note, Series A due June 2033,
issued February 26, 2021.
Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2021.
4.27
UDR, Inc. 3.000% Medium-Term Note, Series A due August
2031, issued September 24, 2021.
Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2021.
4.28
UDR, Inc. 5.125% Medium-Term Note, Series A due September 1,
2034, issued August 15, 2024.
Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2024.
10.01*
UDR, Inc. 1999 Long-Term Incentive Plan (as amended and
restated February 19, 2024).
Exhibit 10.1 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2023.
10.02*
Form of UDR, Inc. Restricted Stock Award Agreement under the
1999 Long-Term Incentive Plan.
Exhibit 10.2 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2019.
10.03*
Form of UDR, Inc. Restricted Stock Award Agreement for awards
outside of the 1999 Long-Term Incentive Plan.
Exhibit 99.3 to UDR, Inc.’s Current Report on Form 8-
K dated March 19, 2007 and filed with the Commission
on March 19, 2007.
10.04*
Description of UDR, Inc. Shareholder Value Plan.
Exhibit 10(x) to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 1999.
10.05*
Description of UDR, Inc. Executive Deferral Plan.
Exhibit 10(xi) to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 1999.
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65
Exhibit
Description
Location
10.06*
Indemnification Agreement by and between UDR, Inc. and each
of its directors and officers listed on Schedule A thereto.
Exhibit 10.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2021.
10.07
Subordination Agreement dated as of April 16, 1998, by and
between UDR, Inc. and United Dominion Realty, L.P.
Exhibit 10(vi)(a) to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998.
10.08
Third Amended and Restated Distribution Agreement among
UDR, Inc., United Dominion Realty, L.P., as Guarantor, Citigroup
Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan
Securities LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Wells
Fargo Securities, LLC, as Agents, dated September 1, 2011, with
respect to the issue and sale by UDR, Inc. of its Medium-Term
Notes, Series A Due Nine Months or More From Date of Issue.
Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K
dated and filed with the Commission on September 1,
2011.
10.09
Second Amended and Restated Credit Agreement, dated as of
September 15, 2021, by and among UDR, Inc., as borrower, and
the lenders and agents party thereto.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated September 15, 2021 and filed with the SEC on
September 15, 2021.
10.10
First Amendment to Second Amended and Restated Credit
Agreement, dated as of September 19, 2022, by and among UDR,
Inc., as borrower, and the lenders and agents party thereto.
Exhibit 10.2 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2022.
10.11
Second Amendment to Second Amended and Restated Credit
Agreement, dated as of August 14, 2024, by and among UDR,
Inc., as borrower, and the lenders and agents party thereto.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated August 14, 2024 and filed with the Commission
on August 19, 2024.
10.12
Guaranty of United Dominion Realty, L.P., dated as of September
15, 2021, with respect to the Credit Agreement, dated as of
September 15, 2021.
Exhibit 10.2 to UDR, Inc.’s Current Report on Form 8-
K dated September 15, 2021 and filed with the SEC on
September 15, 2021.
10.13
Amended and Restated Aircraft Time Sharing Agreement dated as
of February 18, 2019, by and between UDR, Inc. and Thomas W.
Toomey.
Exhibit 10.15 to UDR, Inc’s Annual Report on Form
10-K for the year ended December 31, 2018.
10.14
Amendment No. 1, dated July 29, 2014, to the Third Amended
and Restated Distribution Agreement among UDR, Inc., United
Dominion Realty, L.P., as Guarantor, Citigroup Global
Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan
Securities LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Wells
Fargo Securities, LLC, as Agents, dated September 1, 2011, with
respect to the issue and sale by UDR, Inc. of its Medium-Term
Notes, Series A Due Nine Months or More From Date of Issue.
Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K
dated July 29, 2014 and filed with the Commission on
July 31, 2014.
10.15
Agreement of Limited Partnership of UDR Lighthouse
DownREIT L.P., dated as of October 5, 2015, as amended.
Exhibit 10.21 to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2015.
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66
Exhibit
Description
Location
10.16*
Class 1 LTIP Unit Award Agreement.
Exhibit 10.22 to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2015.
10.17*
Notice of Class 2 LTIP Unit Award.
Exhibit 10.16 to UDR, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2019.
10.18*
Notice of Restricted Stock Unit Award.
Exhibit 10.17 to UDR, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2019.
10.19
Amendment No. 2, dated April 27, 2017, to the Third Amended
and Restated Distribution Agreement, dated September 1, 2011
and as amended July 29, 2014, among the Company and
Citigroup Global Markets Inc., J.P. Morgan Securities LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. LLC, and Wells Fargo Securities, LLC, as Agents,
with respect to the issue and sale by UDR, Inc. of its Medium
Term Notes, Series A Due Nine Months or More From Date of
Issue.
Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K
dated April 27, 2017 and filed with the Commission on
April 27, 2017.
10.20*
Letter Agreement, between UDR, Inc. and Warren L. Troupe
(including the related release agreement and consulting agreement
as exhibits thereto), dated December 31, 2019.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated December 31, 2019 and filed with the
Commission on January 3, 2020.
10.21*
Letter Agreement, between UDR, Inc. and Jerry A. Davis
(including the related release agreement and Consulting
Agreement as exhibits thereto), dated December 16, 2020.
Exhibit 10.2 to UDR Inc.’s Current Report on Form 8-K
dated and filed with the Commission on December 16,
2020.
10.22
Amendment No. 3, dated May 7, 2020, to the Third Amended and
Restated Distribution Agreement, dated September 1, 2011 and as
amended July 29, 2014 and April 27, 2017.
Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K
dated and filed with the Commission on May 7, 2020.
10.23
Amendment No. 4, dated February 14, 2023, to the Third
Amended and Restated Distribution Agreement, dated September
1, 2011 and as amended July 29, 2014, April 27, 2017 and May 7,
2020.
Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K
dated and filed with the Commission on February 14,
2023.
10.24*
Class 1 Performance LTIP Unit Award Agreement.
Exhibit 10.22 to UDR, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2020.
10.25*
Class 2 Performance LTIP Unit Award Agreement.
Exhibit 10.23 to UDR, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2020.
10.26*
Class 2 Performance LTIP Unit Award Agreement, STI.
Exhibit 10.24 to UDR, Inc.’s Annual Report on Form
10-K for the year ended December 31, 2020.
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Exhibit
Description
Location
10.27
Amended and Restated Agreement of Limited Partnership of
United Dominion Realty, L.P. dated as of February 23, 2004.
Exhibit 10.23 to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2003.
10.28
First Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P. dated as of
June 24, 2005.
Exhibit 10.06 to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2005.
10.29
Second Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P. dated as of
February 23, 2006.
Exhibit 10.6 to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2006.
10.30
Third Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P. dated as of
February 2, 2007.
Exhibit 99.1 to UDR, Inc.’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2009.
10.31
Fourth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P. dated as of
December 27, 2007.
Exhibit 10.25 to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2007.
10.32
Fifth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P. dated as of
March 7, 2008.
Exhibit 10.53 to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2008.
10.33
Sixth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P. dated as of
December 9, 2008.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated December 9, 2008 and filed with the
Commission on December 10, 2008.
10.34
Seventh Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P., dated as of
March 13, 2009.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated March 18, 2009 and filed with the Commission
on March 19, 2009.
10.35
Eighth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P., dated as of
November 17, 2010.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated and filed with the Commission on
November 18, 2010.
10.36
Ninth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P., dated as of
December 4, 2015.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated December 4, 2015 and filed with the
Commission on December 10, 2015.
10.37
Tenth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P., dated as of
October 29, 2018.
Exhibit 3.18 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2018.
10.38
Eleventh Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P., dated as of
December 16, 2020.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated and filed with the Commission on December
16, 2020.
10.39
Twelfth Amendment to the Amended and Restated Agreement of
Limited Partnership of United Dominion Realty, L.P., dated as of
July 25, 2022.
Exhibit 10.1 to UDR, Inc.’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2022.
10.40*
Form of UDR, Inc. Stock Option Agreement.
Exhibit 10.37 to UDR, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2021.
Table of Contents
68
Exhibit
Description
Location
10.41*
Executive Agreement by and between UDR, Inc. and Thomas W.
Toomey, dated February 15, 2024.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated February 15, 2024 and filed with the
Commission on February 20, 2024.
10.42*
Letter Agreement by and between UDR, Inc. and Harry G.
Alcock, dated March 14, 2024.
Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-
K dated and filed with the Commission on March 14,
2024.
19
Amended and Restated Insider Trading Compliance Program.
Filed herewith.
21
Subsidiaries of UDR, Inc.
Filed herewith.
22
List of Guarantor Subsidiaries of UDR, Inc.
Exhibit 22.1 to UDR Inc.’s Quarterly Report on Form
10-Q for the quarter ended September 30, 2024.
23
Consent of Independent Registered Public Accounting Firm for
UDR, Inc.
Filed herewith.
31.1
Rule 13a-14(a) Certification of the Chief Executive Officer of
UDR, Inc.
Filed herewith.
31.2
Rule 13a-14(a) Certification of the Chief Financial Officer of
UDR, Inc.
Filed herewith.
32.1
Section 1350 Certification of the Chief Executive Officer of
UDR, Inc.
Filed herewith.
32.2
Section 1350 Certification of the Chief Financial Officer of
UDR, Inc.
Filed herewith.
97.1
UDR, Inc. Recoupment Policy.
Exhibit 97.1 to UDR, Inc.’s Annual Report on Form 10-
K for the year ended December 31, 2023.
101
Inline XBRL (Extensible Business Reporting Language). The
following materials from this Annual Report on Form 10-K for
the period ended December 31, 2024, formatted in Inline XBRL:
(i) consolidated balance sheets of UDR, Inc., (ii) consolidated
statements of operations of UDR, Inc., (iii) consolidated
statements of comprehensive income/(loss) of UDR, Inc.,
(iv) consolidated statements of changes in equity of UDR, Inc.,
(v) consolidated statements of cash flows of UDR, Inc., and
(vi) notes to consolidated financial statements of UDR, Inc. The
instance document does not appear in the interactive data file
because its XBRL tags are embedded within the Inline XBRL
document.
Filed herewith.
104
Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
Filed herewith.
*
Management Contract or Compensatory Plan or Arrangement
Table of Contents
69
Item 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly authorized.
UDR, Inc.
Date: February 18, 2025
By: /s/ Thomas W. Toomey
Thomas W. Toomey
Chairman of the Board and Chief Executive Officer (Principal
Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on February 18, 2025 by
the following persons on behalf of the registrant and in the capacities indicated.
/s/ Thomas W. Toomey
/s/ Katherine A. Cattanach
Thomas W. Toomey
Katherine A. Cattanach
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
Director
/s/ Joseph D. Fisher
/s/ Jon A. Grove
Joseph D. Fisher
Jon A. Grove
President, Chief Investment Officer, and Chief Financial Officer
Director
(Principal Financial Officer)
/s/ Tracy L. Hofmeister
/s/ Mary Ann King
Tracy L. Hofmeister
Mary Ann King
Senior Vice President – Chief Accounting Officer
Director
(Principal Accounting Officer)
/s/ James D. Klingbeil
/s/ Clint D. McDonnough
James D. Klingbeil
Clint D. McDonnough
Lead Independent Director
Director
/s/ Robert A. McNamara
Robert A. McNamara
Director
/s/ Diane M. Morefield
Diane M. Morefield
Director
/s/ Kevin C. Nickelberry
Kevin C. Nickelberry
Director
/s/ Mark R. Patterson
Mark R. Patterson
Director
Table of Contents
70
Table of Contents
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Reports of Independent Registered Public Accounting Firm
F-2
Consolidated Balance Sheets at December 31, 2024 and 2023
F-5
Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022
F-6
Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2024, 2023, and 2022
F-7
Consolidated Statements of Changes in Equity for the years ended December 31, 2024, 2023, and 2022
F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022
F-9
Notes to Consolidated Financial Statements
F-11
SCHEDULES FILED AS PART OF THIS REPORT
Schedule III- Summary of Real Estate Owned
S-1
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require
submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.
Table of Contents
F - 2
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of UDR, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of UDR, Inc. (the Company) as of December 31, 2024 and 2023, the related
consolidated statements of operations, comprehensive income/(loss), changes in equity and cash flows for each of the three years in the
period ended December 31, 2024, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated
February 18, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit
matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating
the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indicators of Impairment of Real Estate Owned and Investment in Unconsolidated Joint Ventures
Description of the
Matter
At December 31, 2024, the Company’s real estate owned, net and investment in and advances to unconsolidated
joint ventures, net were approximately $9.3 billion and $917.5 million, respectively. As more fully described in Note
2 to the consolidated financial statements, the Company periodically evaluates these assets for indicators of
impairment, and this includes, among other things, judgments based on factors such as operational performance,
market conditions, the Company’s intent and ability to hold each asset, as well as any significant cost overruns on
development or redevelopment communities. During 2024, the Company recognized an impairment loss of $8.1
million related to
Table of Contents
F - 3
its investment in and advances to unconsolidated joint ventures, net that it deemed to be other-than-temporary. The
Company did not recognize an impairment loss related to real estate owned, net.
Auditing the Company’s evaluation for indicators of impairment was complex due to a high degree of subjectivity in
the identification of events or changes in circumstances that may indicate an impairment of its real estate owned or
that the value of its investment in and advances to unconsolidated joint ventures may be other than temporarily
impaired. Differences or changes in these judgments could have a material impact on the Company’s analysis.
How We Addressed
the Matter in Our
Audit
We tested the Company’s internal controls over the asset impairment evaluation process. This included testing
controls over management’s determination and review of the considerations used in the impairment indicator
analysis.
Our procedures with regards to the Company’s evaluation for indicators of impairment included, among others,
testing the completeness and accuracy of management’s impairment analysis and evaluating management’s
judgments determining whether indicators of impairment were present. For example, we performed inquires of
management, considered historical operating results and the current market conditions, performed an independent
assessment using both internally and externally available information, read the minutes of the meetings of the Board
of Directors, and reviewed the Company’s development and redevelopment costs.
/s/ Ernst & Young LLP
We have served as the Company's auditor since at least 1984, but we are unable to determine the specific year.
Denver, Colorado
February 18, 2025
Table of Contents
F - 4
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of UDR, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited UDR, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the
COSO criteria). In our opinion, UDR, Inc. (the Company) maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations,
comprehensive income/(loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the
related notes, and the financial statement schedule listed in the accompanying Index at Item 15(a) and our report dated February 18, 2025
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Denver, Colorado
February 18, 2025
Table of Contents
F - 5
UDR, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31,
December 31,
2024
2023
ASSETS
Real estate owned:
Real estate held for investment
$
15,994,794
$
15,757,456
Less: accumulated depreciation
(6,836,920)
(6,242,686)
Real estate held for investment, net
9,157,874
9,514,770
Real estate under development (net of accumulated depreciation of $0 and $184, respectively)
—
160,220
Real estate held for disposition (net of accumulated depreciation of $64,106 and $24,960, respectively)
154,463
81,039
Total real estate owned, net of accumulated depreciation
9,312,337
9,756,029
Cash and cash equivalents
1,326
2,922
Restricted cash
34,101
31,944
Notes receivable, net
247,849
228,825
Investment in and advances to unconsolidated joint ventures, net
917,483
952,934
Operating lease right-of-use assets
186,997
190,619
Other assets
197,493
209,969
Total assets
$
10,897,586
$
11,373,242
LIABILITIES AND EQUITY
Liabilities:
Secured debt, net
$
1,139,331
$
1,277,713
Unsecured debt, net
4,687,634
4,520,996
Operating lease liabilities
182,275
185,836
Real estate taxes payable
46,403
47,107
Accrued interest payable
52,631
47,710
Security deposits and prepaid rent
61,592
50,528
Distributions payable
151,720
149,600
Accounts payable, accrued expenses, and other liabilities
115,105
141,311
Total liabilities
6,436,691
6,420,801
Commitments and contingencies (Note 15)
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership
1,017,355
961,087
Equity:
Preferred stock, no par value; 50,000,000 shares authorized at December 31, 2024 and December 31, 2023:
8.00% Series E Cumulative Convertible; 2,600,678 and 2,686,308 shares issued and outstanding at
December 31, 2024 and December 31, 2023, respectively
43,192
44,614
Series F; 10,424,485 and 11,867,730 shares issued and outstanding at December 31, 2024 and
December 31, 2023, respectively
1
1
Common stock, $0.01 par value; 450,000,000 shares authorized at December 31, 2024 and December 31,
2023:
330,858,719 and 329,014,512 shares issued and outstanding at December 31, 2024 and
December 31, 2023, respectively
3,309
3,290
Additional paid-in capital
7,572,480
7,493,217
Distributions in excess of net income
(4,179,415)
(3,554,892)
Accumulated other comprehensive income/(loss), net
3,638
4,914
Total stockholders’ equity
3,443,205
3,991,144
Noncontrolling interests
335
210
Total equity
3,443,540
3,991,354
Total liabilities and equity
$
10,897,586
$
11,373,242
See accompanying notes to consolidated financial statements.
Table of Contents
F - 6
UDR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended December 31,
2024
2023
2022
REVENUES:
Rental income
$
1,663,525
$
1,620,658
$
1,512,364
Joint venture management and other fees
8,317
6,843
5,022
Total revenues
1,671,842
1,627,501
1,517,386
OPERATING EXPENSES:
Property operating and maintenance
292,572
273,736
250,310
Real estate taxes and insurance
232,130
232,152
221,662
Property management
54,065
52,671
49,152
Other operating expenses
30,416
20,222
17,493
Real estate depreciation and amortization
676,068
676,419
665,228
General and administrative
84,305
69,929
64,144
Casualty-related charges/(recoveries), net
15,179
3,138
9,733
Other depreciation and amortization
19,405
15,419
14,344
Total operating expenses
1,404,140
1,343,686
1,292,066
Gain/(loss) on sale of real estate owned
16,867
351,193
25,494
Operating income
284,569
635,008
250,814
Income/(loss) from unconsolidated entities
20,235
4,693
4,947
Interest expense
(195,712)
(180,866)
(155,900)
Interest income and other income/(expense), net
(12,336)
17,759
(6,933)
Income/(loss) before income taxes
96,756
476,594
92,928
Tax (provision)/benefit, net
(879)
(2,106)
(349)
Net income/(loss)
95,877
474,488
92,579
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership
and DownREIT Partnership
(6,246)
(30,104)
(5,613)
Net (income)/loss attributable to noncontrolling interests
(46)
(31)
(42)
Net income/(loss) attributable to UDR, Inc.
89,585
444,353
86,924
Distributions to preferred stockholders — Series E (Convertible)
(4,835)
(4,848)
(4,412)
Net income/(loss) attributable to common stockholders
$
84,750
$
439,505
$
82,512
Income/(loss) per weighted average common share:
Basic
$
0.26
$
1.34
$
0.26
Diluted
$
0.26
$
1.34
$
0.26
Weighted average number of common shares outstanding:
Basic
329,290
328,765
321,671
Diluted
330,116
329,104
322,700
See accompanying notes to consolidated financial statements.
Table of Contents
F - 7
UDR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(In thousands)
Year Ended December 31,
2024
2023
2022
Net income/(loss)
$
95,877
$
474,488
$
92,579
Other comprehensive income/(loss), including portion attributable to noncontrolling
interests:
Other comprehensive income/(loss) - derivative instruments:
Unrealized holding gain/(loss)
5,988
3,872
14,489
(Gain)/loss reclassified into earnings from other comprehensive income/(loss)
(7,333)
(7,533)
(998)
Other comprehensive income/(loss), including portion attributable to noncontrolling
interests
(1,345)
(3,661)
13,491
Comprehensive income/(loss)
94,532
470,827
106,070
Comprehensive (income)/loss attributable to noncontrolling interests
(6,223)
(29,904)
(6,541)
Comprehensive income/(loss) attributable to UDR, Inc.
$
88,309
$
440,923
$
99,529
See accompanying notes to consolidated financial statements.
Table of Contents
F - 8
UDR, INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(In thousands, except per share data)
Distributions
Accumulated
Other
Comprehensive
Preferred
Common
Paid-in
in Excess of
Income/(Loss),
Noncontrolling
Stock
Stock
Capital
Net Income
net
Interests
Total
Balance at December 31, 2021
$
44,765
3,181
6,884,269
(3,485,080)
(4,261)
31,430
3,474,304
Net income/(loss) attributable to UDR, Inc.
—
—
—
86,924
—
—
86,924
Long Term Incentive Plan Unit grants/(vestings), net
—
—
—
—
—
(31,220)
(31,220)
Other comprehensive income/(loss)
—
—
—
—
12,605
—
12,605
Issuance/(forfeiture) of common and restricted shares, net
—
1
4,847
—
—
—
4,848
Issuance of common shares through public offering, net
—
115
629,437
—
—
—
629,552
Conversion of Series E Cumulative Convertible shares
(150)
1
149
—
—
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the
Operating Partnership and DownREIT Partnership
—
4
23,737
—
—
—
23,741
Common stock distributions declared ($1.52 per share)
—
—
—
(493,312)
—
—
(493,312)
Repurchase of common shares
—
(12)
(49,016)
—
—
—
(49,028)
Preferred stock distributions declared-Series E ($1.6456 per share)
—
—
—
(4,412)
—
—
(4,412)
Adjustment to reflect redemption value of redeemable noncontrolling interests
—
—
—
444,293
—
—
444,293
Balance at December 31, 2022
44,615
3,290
7,493,423
(3,451,587)
8,344
210
4,098,295
Net income/(loss) attributable to UDR, Inc.
—
—
—
444,353
—
—
444,353
Other comprehensive income/(loss)
—
—
—
—
(3,430)
—
(3,430)
Issuance/(forfeiture) of common and restricted shares, net
—
2
6,558
—
—
—
6,560
Issuance of common shares through public offering, net
—
—
(551)
—
—
—
(551)
Adjustment for conversion of noncontrolling interest of unitholders in the
Operating Partnership and DownREIT Partnership
—
4
18,790
—
—
—
18,794
Common stock distributions declared ($1.68 per share)
—
—
—
(553,021)
—
—
(553,021)
Repurchase of common shares
—
(6)
(25,003)
—
(25,009)
Preferred stock distributions declared-Series E ($1.8192 per share)
—
—
—
(4,848)
—
—
(4,848)
Adjustment to reflect redemption value of redeemable noncontrolling interests
—
—
—
10,211
—
—
10,211
Balance at December 31, 2023
$
44,615
$
3,290
$
7,493,217
$
(3,554,892) $
4,914 $
210 $
3,991,354
Net income/(loss) attributable to UDR, Inc.
—
—
—
89,585
—
—
89,585
Other comprehensive income/(loss)
—
—
—
—
(1,276)
—
(1,276)
Issuance/(forfeiture) of common and restricted shares, net
—
1
5,119
—
—
—
5,120
Issuance of common shares through public offering, net
—
—
(456)
—
—
—
(456)
Conversion of Series E Cumulative Convertible shares
(1,422)
1
1,421
—
—
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the
Operating Partnership and DownREIT Partnership
—
17
73,179
—
—
—
73,196
Contribution of noncontrolling interests in consolidated real estate
—
—
—
—
—
125
125
Common stock distributions declared ($1.70 per share)
—
—
—
(560,911)
—
—
(560,911)
Preferred stock distributions declared-Series E ($1.8408 per share)
—
—
—
(4,835)
—
—
(4,835)
Adjustment to reflect redemption value of redeemable noncontrolling interests
—
—
—
(148,362)
—
—
(148,362)
Balance at December 31, 2024
$
43,193
$
3,309
$
7,572,480
$
(4,179,415) $
3,638 $
335 $
3,443,540
See accompanying notes to consolidated financial statements.
Table of Contents
F - 9
UDR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except for share data)
Year Ended December 31,
2024
2023
2022
Operating Activities
Net income/(loss)
$
95,877
$
474,488
$
92,579
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Depreciation and amortization
695,473
691,838
679,572
(Gain)/loss on sale of real estate owned
(16,867)
(351,193)
(25,494)
(Income)/loss from unconsolidated entities
(20,235)
(4,693)
(4,947)
Return on investment in unconsolidated joint ventures and partnerships
61,315
15,944
22,369
Amortization of share-based compensation
32,625
32,896
27,505
Provision/(recovery) for credit losses
37,456
702
140
Other
27,107
9,089
31,695
Changes in operating assets and liabilities:
(Increase)/decrease in operating assets
(31,144)
(33,579)
9,792
Increase/(decrease) in operating liabilities
(4,759)
(2,828)
(13,140)
Net cash provided by/(used in) operating activities
876,848
832,664
820,071
Investing Activities
Acquisition of real estate assets
—
(17,848)
(341,149)
Proceeds from sales of real estate investments, net
98,650
325,767
40,808
Development of real estate assets
(67,532)
(155,875)
(198,022)
Capital expenditures and other major improvements — real estate assets
(249,886)
(295,440)
(214,833)
Capital expenditures — non-real estate assets
(21,801)
(16,907)
(21,180)
Investment in unconsolidated joint ventures and partnerships
(50,335)
(71,395)
(201,412)
Distributions received from unconsolidated joint ventures and partnerships
41,097
14,399
81,443
Proceeds from sale of equity securities
4,624
14,471
—
Purchase deposits on pending acquisitions
1,000
(1,000)
—
Repayment/(issuance) of notes receivable, net
(32,168)
(85,310)
(75,183)
Net cash provided by/(used in) investing activities
(276,351)
(289,138)
(929,528)
Financing Activities
Payments on secured debt
(137,971)
(1,244)
(1,141)
Payments on unsecured debt
(15,644)
—
—
Net proceeds from the issuance of unsecured debt
296,929
—
—
Net proceeds/(repayment) of commercial paper
(118,175)
108,075
80,000
Net proceeds/(repayment) of revolving bank debt
4,768
(23,425)
(1,531)
Proceeds from the issuance of common shares through public offering, net
—
—
629,552
Repurchase of common shares
—
(25,009)
(49,028)
Distributions paid to redeemable noncontrolling interests
(42,798)
(35,582)
(34,255)
Distributions paid to preferred stockholders
(4,851)
(4,770)
(4,381)
Distributions paid to common stockholders
(558,482)
(539,852)
(483,624)
Other
(23,712)
(17,047)
(24,359)
Net cash provided by/(used in) financing activities
(599,936)
(538,854)
111,233
Net increase/(decrease) in cash, cash equivalents, and restricted cash
561
4,672
1,776
Cash, cash equivalents, and restricted cash, beginning of year
34,866
30,194
28,418
Cash, cash equivalents, and restricted cash, end of year
$
35,427
$
34,866
$
30,194
Supplemental Information:
Interest paid during the period, net of amounts capitalized
$
192,101
$
184,201
$
154,911
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
12,502
12,502
12,502
Cash paid/(refunds received) for income taxes
1,044
1,911
1,145
Non-cash transactions:
Secured debt assumed upon acquisition of real estate assets
$
—
$
191,737
$
—
OP Units issued for real estate, net
—
141,359
—
Redeemable long-term and short-term incentive plan units
27,561
28,507
56,568
Development costs and capital expenditures incurred, but not yet paid
15,188
39,080
56,336
Conversion of Operating Partnership and DownREIT Partnership noncontrolling interests to common stock
(1,703,570 shares; 470,800 shares; and 502,868 shares)
73,196
18,794
23,741
Distribution of equity securities from unconsolidated real estate technology investments
—
7,749
18,018
Contribution of operating properties to unconsolidated joint venture
—
258,056
—
Transfer of preferred equity investment to note receivable
—
73,453
—
UDR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)
(In thousands, except for share data)
F - 10
Dividends declared, but not yet paid
151,720
149,600
134,213
The following reconciles cash, cash equivalents, and restricted cash to amounts as shown above:
Cash, cash equivalents, and restricted cash, beginning of year:
Cash and cash equivalents
$
2,922
$
1,193
$
967
Restricted cash
31,944
29,001
27,451
Total cash, cash equivalents, and restricted cash as shown above
$
34,866
$
30,194
$
28,418
Cash, cash equivalents, and restricted cash, end of year:
Cash and cash equivalents
$
1,326
$
2,922
$
1,193
Restricted cash
34,101
31,944
29,001
Total cash, cash equivalents, and restricted cash as shown above
$
35,427
$
34,866
$
30,194
See accompanying notes to consolidated financial statements.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2024
F - 11
1. CONSOLIDATION AND BASIS OF PRESENTATION
Organization and Formation
UDR, Inc. (“UDR,” the “Company,” “we,” or “our”) is a self-administered real estate investment trust, or REIT, that owns, operates,
acquires, renovates, develops, redevelops, and manages apartment communities in targeted markets located in the United States. At
December 31, 2024, our consolidated apartment portfolio consisted of 169 communities with a total of 55,696 apartment homes located in 21
markets. In addition, the Company has an ownership interest in 10,860 completed or to-be-completed apartment homes through
unconsolidated joint ventures or partnerships, including 6,436 apartment homes owned by entities in which we hold preferred equity
investments.
Basis of Presentation
The accompanying consolidated financial statements of UDR include its wholly-owned and/or controlled subsidiaries (see Note 4,
Variable Interest Entities and Note 5, Joint Ventures and Partnerships, for further discussion). All significant intercompany accounts and
transactions have been eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of UDR and its subsidiaries, including United Dominion
Realty, L.P. (the “Operating Partnership” or the “OP”) and UDR Lighthouse DownREIT L.P. (the “DownREIT Partnership”). As of
December 31, 2024 and 2023, there were 189.8 million and 189.9 million units, respectively, in the Operating Partnership (“OP Units”)
outstanding, of which 176.6 million, or 93.0% and 176.4 million, or 92.9%, respectively, were owned by UDR and 13.2 million, or 7.0% and
13.5 million, or 7.1%, respectively, were owned by outside limited partners. As of December 31, 2024 and 2023, there were 32.4 million
units in the DownREIT Partnership (“DownREIT Units”) outstanding, of which 23.0 million, or 71.0% and 21.4 million, or 66.0%,
respectively, were owned by UDR and its subsidiaries and 9.4 million, or 29.0% and 11.0 million, or 34.0%, respectively, were owned by
outside limited partners. The consolidated financial statements of UDR include the noncontrolling interests of the unitholders in the
Operating Partnership and DownREIT Partnership.
The Company evaluated subsequent events through the date its financial statements were issued. No significant recognized or non-
recognized subsequent events were noted other than those in Note 3, Real Estate Owned.
2. SIGNIFICANT ACCOUNTING POLICIES
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03,
Disaggregation of Income Statement Expenses, which requires disclosure of additional information about specific cost and expense
categories in the notes to the financial statements. The ASU will be applied either prospectively or retrospectively and is effective for the
Company for the year ended December 31, 2027, and interim reporting periods commencing in 2028. We are currently evaluating the effect
that the ASU will have on the consolidated financial statements and related disclosures.
In March 2024, the SEC issued final rules on the enhancement and standardization of climate-related disclosures. The rules require
disclosure of, among other things: material climate-related risks; activities to mitigate or adapt to such risks; governance and management of
such risks; and material greenhouse gas emissions from operations owned or controlled (Scope 1) and/or indirect emissions from purchased
energy consumed in operations (Scope 2). Additionally, the rules require disclosure in the notes to the financial statements of the effects of
severe weather events and other natural conditions, subject to certain materiality thresholds. The rules will become effective for the Company
on a phased-in timeline starting in the year ended December 31, 2025. While the SEC has voluntarily stayed the rules, the Company is
currently evaluating the effect the rules will have on its financial statement disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which
requires disclosure enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and
income taxes paid. The ASU is effective for the Company for the year ended
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 12
December 31, 2025. The Company is currently evaluating the effect that the ASU will have on the consolidated financial statements and
related disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segments
Disclosures. ASU 2023-07 requires expanded disclosures of a public entity’s reportable segments, and requires more enhanced information
regarding a reportable segment’s expenses on an interim and annual basis. The ASU became effective for the Company for the year ended
December 31, 2024, and interim periods commencing in 2025. The Company adopted the ASU, however, the updated standard did not have a
material impact on the consolidated financial statements and related disclosures. Related disclosures were updated pursuant to the
requirements of the ASU.
Real Estate
Real estate assets held for investment are carried at historical cost and consist of land, land improvements, buildings and
improvements, furniture, fixtures and equipment and other costs incurred during their development, acquisition and redevelopment.
Expenditures for ordinary repair and maintenance costs are charged to expense as incurred. Expenditures for improvements,
renovations, and replacements related to the acquisition and/or improvement of real estate assets are capitalized and depreciated over their
estimated useful lives if the expenditures qualify as a betterment or the life of the related asset will be substantially extended beyond the
original life expectancy.
UDR purchases real estate investment properties and records the tangible and identifiable intangible assets and liabilities acquired
based on their estimated fair value. The primary, although not only, identifiable intangible asset associated with our portfolio is the value of
existing lease agreements. When recording the acquisition of a community, we first assign fair value to the estimated intangible value of the
existing lease agreements and then to the estimated value of the land, building and fixtures assuming the community is vacant. The Company
estimates the intangible value of the lease agreements by determining the lost revenue associated with a hypothetical lease-up. Depreciation
on the building is based on the expected useful life of the asset and the in-place leases are amortized over their remaining average contractual
life. Property acquisition costs are capitalized as incurred if the acquisition does not meet the definition of a business.
Quarterly or when changes in circumstances warrant, UDR will assess our real estate properties for indicators of impairment. The
judgments regarding the existence of impairment indicators are based on certain factors. Such factors include, among other things,
operational performance, market conditions, the Company’s intent and ability to hold the related asset, as well as any significant cost
overruns on development properties.
If a real estate property has indicators of impairment, we assess whether the long-lived asset’s carrying value exceeds the
community’s undiscounted future cash flows, which is representative of projected net operating income (“NOI”) plus the residual value of
the community. Our future cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and
operating conditions and our estimated holding periods. If such indicators of impairment are present and the carrying value exceeds the
undiscounted cash flows of the community, an impairment loss is recognized equal to the excess of the carrying amount of the asset over its
estimated fair value. Our estimates of fair value represent our best estimate based primarily upon unobservable inputs related to rental rates,
operating costs, growth rates, discount rates, capitalization rates, industry trends and reference to market rates and transactions.
For long-lived assets to be disposed of, impairment losses are recognized when the fair value of the asset less estimated cost to sell
is less than the carrying value of the asset. Properties classified as real estate held for disposition generally represent properties that are
actively marketed or contracted for sale with the closing expected to occur within the next twelve months. Real estate held for disposition is
carried at the lower of cost, net of accumulated depreciation, or fair value, less the cost to sell, determined on an asset-by-asset basis.
Expenditures for ordinary repair and maintenance costs on held for disposition properties are charged to expense as incurred. Expenditures
for improvements, renovations, and replacements related to held for disposition properties are capitalized at cost. Depreciation is not
recorded on real estate held for disposition.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 13
For the years ended December 31, 2024, 2023 and 2022, we did not record any impairments on our real estate properties.
Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets which are 30 to 55 years for
buildings, 10 to 35 years for major improvements, and 3 to 10 years for furniture, fixtures, equipment, and other assets.
Predevelopment, development, and redevelopment projects and related costs are capitalized and reported on the Consolidated
Balance Sheets as Total real estate owned, net of accumulated depreciation. The Company capitalizes costs directly related to the
predevelopment, development, and redevelopment of a capital project, which include, but are not limited to, interest, real estate taxes,
insurance, and allocated development and redevelopment overhead related to support costs for personnel working on the capital projects. We
use our professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. These
costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress and such costs
are incremental and identifiable to a specific activity to get the asset ready for its intended use. These costs, excluding the direct costs of
development and redevelopment and capitalized interest, for the years ended December 31, 2024, 2023, and 2022 were $15.1 million, $13.1
million and $17.9 million, respectively. During the years ended December 31, 2024, 2023, and 2022, total interest capitalized was $9.3
million, $10.1 million and $13.4 million, respectively. As each home in a capital project is completed and becomes available for lease-up, the
Company ceases capitalization on the related portion and depreciation commences over the estimated useful life.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and short-term, highly liquid
investments. We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The
majority of the Company’s cash and cash equivalents are held at major commercial banks.
Restricted Cash
Restricted cash primarily consists of escrow deposits held by lenders for real estate taxes, insurance and replacement reserves, and
security deposits.
Real Estate Sales Gain Recognition
For sale transactions resulting in a transfer of a controlling financial interest of a property, the Company generally derecognizes the
related assets and liabilities from its Consolidated Balance Sheets and records the gain or loss in the period in which the transfer of control
occurs. If control of the property has not been transferred by the Company, the criteria for derecognition are not met and the Company will
continue to recognize the related assets and liabilities on its Consolidated Balance Sheets.
Sale transactions to entities in which the Company sells a controlling financial interest in a property but retains a noncontrolling
interest are accounted for as partial sales. Partial sales resulting in a change in control are accounted for at fair value and a full gain or loss is
recognized. Therefore, the Company will record a gain or loss on the partial interest sold, and the initial measurement of our retained interest
will be accounted for at fair value.
Sales of real estate to joint ventures or other noncontrolled investees are also accounted for at fair value and the Company will
record a full gain or loss in the period the property is contributed.
To the extent that the Company acquires a controlling financial interest in a property that it previously accounted for as an equity
method investment, the Company will not remeasure its previously held interest if the acquisition is treated as an asset acquisition. The
Company will include the carrying amount of its previously held equity method interest along with the consideration paid and transaction
costs incurred in determining the amounts to allocate to the related assets and liabilities acquired on its Consolidated Balance Sheets. When
treated as an asset acquisition, the Company will not recognize a gain or loss on consolidation of a property.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 14
Allowance for Credit Losses
The Company accounts for allowance for credit losses under the current expected credit loss (“CECL”) impairment model for its
financial assets, including trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, and presents the
net amount of the financial instrument expected to be collected. The CECL impairment model excludes operating lease receivables. The
CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers
forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, we analyze
the following criteria, as applicable in developing allowances for credit losses: historical loss information, the borrower’s ability to make
scheduled payments, the remaining time to maturity, the value of underlying collateral, projected future performance of the borrower and
macroeconomic trends.
The Company measures credit losses of financial assets on a collective (pool) basis when similar risk characteristics exist. If the
Company determines that a financial asset does not share risk characteristics with the Company’s other financial assets, the Company
evaluates the financial asset for expected credit losses on an individual basis. Allowance for credit losses are recorded as a direct reduction
from an asset’s amortized cost basis. Credit losses and recoveries are recorded in Interest income and other income/(expense), net on the
Consolidated Statements of Operations. Recoveries of financial assets previously written off are recorded when received. For the years ended
December 31, 2024, 2023 and 2022, the Company recorded net credit recoveries/(losses) of $(37.5) million, $(0.7) million and
$(0.1) million, respectively, on the Consolidated Statements of Operations.
The Company has made the optional election provided by the standard not to measure allowance for credit losses for accrued
interest receivables as the Company writes off any uncollectible accrued interest receivables in a timely manner. The Company periodically
evaluates the collectability of its accrued interest receivables. A write-off is recorded when the Company concludes that all or a portion of its
accrued interest receivable balance is no longer collectible.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 15
Notes Receivable
Notes receivable relate to financing arrangements which are typically secured by assets of the borrower that may include real estate
assets. Certain of the loans we extend may include characteristics such as options to purchase the project within a specific time window
following expected project completion. These characteristics can cause the loans to fall under the definition of a variable interest entity
(“VIE”), and thus trigger consolidation consideration. We consider the facts and circumstances pertinent to each loan, including the relative
amount of financing we are contributing to the overall project cost, decision making rights or control we hold, and our rights to expected
residual gains or our obligations to absorb expected residual losses from the project. If we are deemed to be the primary beneficiary of a VIE
due to holding a controlling financial interest, the majority of decision making control, or by other means, consolidation of the VIE would be
required. The Company has concluded that it is not the primary beneficiary of the borrowing entities of the existing loans.
Additionally, we analyze each loan arrangement that involves real estate development to consider whether the loan qualifies for
accounting as a loan or as an investment in a real estate development project. The Company has evaluated its real estate loans, where
appropriate, for accounting treatment as loans versus real estate development projects, as required by Accounting Standard Codification
(“ASC”) 310-10. For each loan, the Company has concluded that the characteristics and the facts and circumstances indicate that loan
accounting treatment is appropriate.
The following table summarizes our Notes receivable, net as of December 31, 2024 and 2023 (dollars in thousands):
Interest rate at
Balance Outstanding (a)
December 31,
December 31,
December 31,
2024
2024
2023
Note due March 2025 (b)
12.00 % $
42,807
$
37,022
Notes due October 2025 (c)
11.00 %
106,271
98,271
Note due December 2026 (d)
11.00 %
71,873
64,608
Note due December 2026 (e)
11.00 %
29,090
26,164
Notes due June 2027 (f)
18.00 %
4,470
3,737
Note due September 2027 (g)
7.55 %
31,771
—
Notes receivable
286,282
229,802
Allowance for credit losses
(38,433)
(977)
Total notes receivable, net
$
247,849
$
228,825
(a) Outstanding note amounts include any accrued and unpaid interest, as applicable.
(b) The Company has a secured note with an unaffiliated third party with an aggregate commitment of $32.5 million, all of which was
funded as of December 31, 2024. Interest payments are due monthly, with the exception of payments from June 2022 to maturity, which
are accrued and added to the principal balance and will be due at maturity of the note. In December 2024, the maturity date of the note
was extended to March 31, 2025. The note is secured by substantially all of the borrower’s assets and matures at the earliest of the
following: (a) the closing of any private or public capital raising in the amount of $5.0 million or greater; (b) an acquisition;
(c) acceleration in the event of default; or (d) March 31, 2025.
(c) The Company has two loans (the “Notes”) with a joint venture that owns a 478 apartment home operating community located in
Philadelphia, Pennsylvania with an aggregate commitment of $93.5 million (exclusive of accrued and unpaid interest), all of which has
been funded. The Notes are subordinate to the senior construction loan, but senior to the equity in the borrower. In April 2024, the joint
venture refinanced the senior construction loan with a new loan that matures in April 2026, with a one-year extension option subject to
certain conditions. The Notes had a scheduled maturity date in October 2024, with two one-year extension options. In September 2024,
the developer extended the maturity date of the Notes to October 2025. Commencing in October 2024, the contractual interest rate on
the Notes increased to 11.0% in connection with the developer exercising its option to extend the maturity date of the Notes. In
December 2024, the Company recorded a $37.3 million non-cash loan reserve on the Notes, which was recorded in Interest income and
other income/(expense), net on the Consolidated Statements of
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 16
Operations, due to the Company’s assessment of the borrower’s ability to make future scheduled payments on the senior loan and a
decrease in the value of the operating community. In addition, the Notes were placed on non-accrual status.
(d) The Company has a secured mezzanine loan with a third party developer of a 482 apartment home community located in Riverside,
California, which is expected to be completed in 2025, with an aggregate commitment of $59.7 million (exclusive of accrued and unpaid
interest), all of which has been funded. Interest payments accrue for 36 months and are due monthly after the loan has been outstanding
for 36 months. The secured mezzanine loan has a scheduled maturity date in December 2026, with two one-year extension options.
(e) The Company has a secured mezzanine loan with a third party developer of a 237 apartment home community located in Menifee,
California, which is expected to be completed in 2025, with an aggregate commitment of $24.4 million (exclusive of accrued and unpaid
interest), all of which has been funded. Interest payments accrue for 36 months and are due monthly after the loan has been outstanding
for 36 months. The secured mezzanine loan has a scheduled maturity date in December 2026, with two one-year extension options.
(f)
The Company and a syndicate of lenders previously entered into a $16.0 million secured credit facility with an unaffiliated third party. In
2023, the secured credit facility was amended to provide a new term loan in the amount of $19.0 million, and the Company’s
commitment was increased from $1.5 million to $3.0 million (exclusive of accrued interest), all of which has been funded. Interest
payments accrue and are due at maturity of the facility. The facility is secured by substantially all of the borrower’s assets and matures at
the earliest of the following: (a) acceleration in the event of default; or (b) June 2027.
(g) In September 2024, the Company entered into a $31.1 million secured mortgage loan with one of its joint ventures that owns
a 66 apartment home operating community located in Santa Monica, California, in which the Company also holds a preferred
investment. The contractual interest rate on the note receivable is SOFR plus a spread of 300 basis points. Interest payments are due
monthly from net cash flow from the operating community. If net cash flow is insufficient to cover the interest payment on the payment
date, the unpaid amount is added to the outstanding principal balance. The mortgage loan has a scheduled maturity date in September
2027. (See Note 5, Joint Ventures and Partnerships for further discussion).
The Company recognized $24.2 million, $14.5 million, and $3.5 million of interest income for the notes receivable described above
during the years ended December 31, 2024, 2023, and 2022, respectively, none of which was related party interest. Interest income is
included in Interest income and other income/(expense), net on the Consolidated Statements of Operations.
A roll forward of our allowance for credit losses for the year ended December 31, 2024 is as follows:
Allowance for credit losses as of December 31, 2023
$
(977)
(Provision)/recovery for credit losses
(37,456)
Write-offs charged against allowance
-
Allowance for credit losses as of December 31, 2024
$
(38,433)
Investment in Joint Ventures and Partnerships
We use the equity method to account for investments in joint ventures and partnerships that qualify as VIEs where we are not the
primary beneficiary and other entities that we do not control or where we do not own a majority of the economic interest but have the ability
to exercise significant influence over the operating and financial policies of the investee. Throughout these financial statements we use the
term “joint venture” or “partnership” when referring to investments in entities in which we do not have a 100% ownership interest. The
Company also uses the equity method when we function as the managing partner and our venture partner has substantive participating rights
or where we can be replaced by our venture partner as managing partner without cause. For a joint venture or partnership accounted for
under the equity method, our share of net earnings or losses is reflected as income/loss when earned/incurred and distributions are credited
against our investment in the joint venture or partnership as received.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 17
In determining whether a joint venture or partnership is a VIE, the Company considers: the form of our ownership interest and legal
structure; the size of our investment; the financing structure of the entity, including necessity of subordinated debt; estimates of future cash
flows; ours and our partner’s ability to participate in the decision making related to acquisitions, disposition, budgeting and financing of the
entity; obligation to absorb losses and preferential returns; nature of our partner’s primary operations; and the degree, if any, of
disproportionality between the economic and voting interests of the entity. As of December 31, 2024, the Company did not have any
investments in any joint ventures or partnerships that qualified as a VIE where we were determined to be the primary beneficiary.
We evaluate our investments in unconsolidated joint ventures for events or changes in circumstances that indicate there may be an
other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment is other-than-
temporary. These factors include, but are not limited to, age of the venture, our intent and ability to retain our investment in the entity, the
financial condition and long-term prospects of the entity, the fair value of the property of the joint venture, and the relationships with the
other joint venture partners and its lenders. The amount of loss recognized is the excess of the investment’s carrying amount over its
estimated fair value. If we believe that the decline in fair value is temporary, no impairment is recorded. The aforementioned factors are
taken into consideration as a whole by management in determining the valuation of our equity method investments. Should the actual results
differ from management’s judgment, the valuation could be negatively affected and may result in a negative impact to our Consolidated
Financial Statements.
Derivative Financial Instruments
The Company utilizes derivative financial instruments to manage interest rate risk and generally designates these financial
instruments as cash flow hedges. Derivative financial instruments are recorded on our Consolidated Balance Sheets as either an asset or
liability and measured quarterly at their fair value. The changes in fair value for cash flow hedges that are deemed effective are reflected in
other comprehensive income/(loss) and for non-designated derivative financial instruments in earnings. The ineffective component of cash
flow hedges, if any, is recorded in earnings.
Redeemable Noncontrolling Interests in the Operating Partnership and DownREIT Partnership
Interests in the Operating Partnership and the DownREIT Partnership held by limited partners are represented by OP Units and
DownREIT Units, respectively. The income is allocated to holders of OP Units/DownREIT Units based upon net income available to
common stockholders and the weighted average number of OP Units/DownREIT Units outstanding to total common shares plus OP
Units/DownREIT Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to
noncontrolling interests in accordance with the terms of the partnership agreements of the Operating Partnership and the DownREIT
Partnership.
Limited partners of the Operating Partnership and the DownREIT Partnership have the right to require such partnership to redeem
all or a portion of the OP Units/DownREIT Units held by the limited partner at a redemption price equal to and in the form of the Cash
Amount (as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable), provided that
such OP Units/DownREIT Units have been outstanding for at least one year, subject to certain exceptions. UDR, as the general partner of the
Operating Partnership and the DownREIT Partnership may, in its sole discretion, purchase the OP Units/DownREIT Units by paying to the
limited partner either the Cash Amount or the REIT Share Amount (generally one share of Common Stock of the Company for each OP
Unit/DownREIT Unit), as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable.
Accordingly, the Company records the OP Units/DownREIT Units outside of permanent equity and reports the OP Units/DownREIT Units at
their redemption value using the Company’s stock price at each balance sheet date.
Income Taxes
Due to the structure of the Company as a REIT and the nature of the operations for the operating properties, no provision for federal
income taxes has been provided for at UDR. Historically, the Company has generally incurred only state and local excise and franchise taxes.
UDR has elected for certain consolidated subsidiaries to be treated as taxable REIT subsidiaries (“TRS”).
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 18
Income taxes for our TRS are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized
for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a
change in tax rate is recognized in earnings in the period of the enactment date. The Company’s deferred tax assets/(liabilities) are generally
the result of differing depreciable lives on capitalized assets, temporary differences between book and tax basis of assets and liabilities and
timing of expense recognition for certain accrued liabilities. As of December 31, 2024 and 2023, UDR’s net deferred tax asset/(liability) was
$(0.8) million and $(0.8) million, respectively, and are recorded in Accounts payable, accrued expenses and other liabilities on the
Consolidated Balance Sheets.
GAAP defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. GAAP also provides guidance on derecognition, classification, interest and penalties,
accounting for interim periods, disclosure and transition.
The Company recognizes and evaluates its tax positions using a two-step process. First, UDR determines whether a tax position is
more likely than not (greater than 50 percent probability) to be sustained upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. Second, the Company will determine the amount of benefit to recognize
and record the amount that is more likely than not to be realized upon ultimate settlement.
The Company invests in assets that qualify for federal investment tax credits (“ITC”) through our TRS. An ITC reduces federal
income taxes payable when qualifying depreciable property is acquired. The ITC is determined as a percentage of cost of the assets. The
Company accounts for ITCs under the deferral method, under which the tax benefit from the ITC is deferred and amortized as a tax benefit
into Tax (provision)/benefit, net on the Consolidated Statements of Operations over the book life of the qualifying depreciable property. The
ITCs are recorded in Accounts payable, accrued expenses and other liabilities on the Consolidated Balance Sheets.
UDR had no material unrecognized tax benefit, accrued interest or penalties at December 31, 2024. UDR and its subsidiaries are
subject to federal income tax as well as income tax of various state and local jurisdictions. The tax years 2021 through 2023 remain open to
examination by tax jurisdictions to which we are subject. When applicable, UDR recognizes interest and/or penalties related to uncertain tax
positions in Tax (provision)/benefit, net on the Consolidated Statements of Operations.
Principles of Consolidation
The Company accounts for subsidiary partnerships, joint ventures and other similar entities in which it holds an ownership interest
in accordance with the consolidation guidance. The Company first evaluates whether each entity is a VIE. Under the VIE model, the
Company consolidates an entity when it has control to direct the activities of the VIE and the obligation to absorb losses or the right to
receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls
the entity through ownership of a majority voting interest.
Discontinued Operations
In accordance with GAAP, a discontinued operation represents (1) a component of an entity or group of components that has been
disposed of or is classified as held for sale in a single transaction and represents a strategic shift that has or will have a major effect on an
entity’s financial results, or (2) an acquired business that is classified as held for sale on the date of acquisition. A strategic shift could include
a disposal of (1) a separate major line of business, (2) a separate major geographic area of operations, (3) a major equity method investment,
or (4) other major parts of an entity.
We record sales of real estate that do not meet the definition of a discontinued operation in Gain/(loss) on sale of real estate owned
on the Consolidated Statements of Operations.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 19
Stock-Based Employee Compensation Plans
The Company measures the cost of employee services received in exchange for an award of an equity instrument based on the
award’s fair value on the grant date and recognizes the cost as stock-based compensation expense over the period during which the employee
is required to provide service in exchange for the award, which is generally the vesting period. For performance based awards, the Company
remeasures the fair value based on the estimated achievement of the performance criteria each balance sheet date with adjustments made on a
cumulative basis until the award is settled and the final compensation is known. Stock-based compensation expense is only recognized for
performance based awards that we expect to vest, which we estimate based upon an assessment of the probability that the performance
criteria will be achieved. Stock-based compensation expense associated with awards is updated for actual forfeitures. The fair value for
market based awards issued by the Company is calculated utilizing a Monte Carlo simulation and the fair value for stock options issued by
the Company is calculated utilizing the Black-Scholes-Merton formula. For further discussion, see Note 10, Employee Benefit Plans.
Advertising Costs
All advertising costs are expensed as incurred and reported on the Consolidated Statements of Operations within the line item
Property operating and maintenance. During the years ended December 31, 2024, 2023, and 2022, total advertising expense was $10.0
million, $9.2 million, and $8.7 million, respectively.
Cost of Raising Capital
Costs incurred in connection with the issuance of equity securities are deducted from stockholders’ equity. Costs incurred in
connection with the issuance or renewal of debt are recorded based on the terms of the debt issuance or renewal. Accordingly, if the terms of
the renewed or modified debt instrument are deemed to be substantially different (i.e. a 10 percent or greater difference in the cash flows
between instruments), all unamortized financing costs associated with the extinguished debt are charged to earnings in the current period and
certain costs of new debt issuances are capitalized and amortized over the term of the debt. When the cash flows are not substantially
different, the lender costs associated with the renewal or modification are capitalized and amortized into interest expense over the remaining
term of the related debt instrument and other related costs are expensed. The balance of any unamortized financing costs associated with
retired debt is expensed upon retirement. Deferred financing costs for new debt instruments include fees and costs incurred by the Company
to obtain financing. Deferred financing costs are generally amortized on a straight-line basis, which approximates the effective interest
method, over a period not to exceed the term of the related debt.
Comprehensive Income/(Loss)
Comprehensive income/(loss), which is defined as the change in equity during each period from transactions and other events and
circumstances from nonowner sources, including all changes in equity during a period except for those resulting from investments by or
distributions to stockholders, is displayed in the accompanying Consolidated Statements of Comprehensive Income/(Loss). For the years
ended December 31, 2024, 2023, and 2022, the Company’s other comprehensive income/(loss) consisted of the gain/(loss) (effective portion)
on derivative instruments that are designated as and qualify as cash flow hedges, (gain)/loss on derivative instruments reclassified from other
comprehensive income/(loss) into earnings, and the allocation of other comprehensive income/(loss) to noncontrolling interests. The
(gain)/loss on derivative instruments reclassified from other comprehensive income/(loss) is included in Interest expense on the Consolidated
Statements of Operations. See Note 14, Derivatives and Hedging Activity, for further discussion. The allocation of other comprehensive
income/(loss) to redeemable noncontrolling interests during the years ended December 31, 2024, 2023, and 2022 was $(0.1) million, $(0.2)
million, and $0.9 million, respectively.
Forward Sales Agreements
From time to time the Company utilizes forward sales agreements for the future issuance of its common stock. When the Company
enters into a forward sales agreement, the contract requires the Company to sell its shares to a counterparty at a predetermined price at a
future date. The net sales price and proceeds attained by the Company will be determined on the dates of settlement, with adjustments during
the term of the contract for the Company’s anticipated dividends as well as for a daily interest factor that varies with changes in the federal
funds rate. The Company generally has the ability to determine the dates and method of settlement (i.e., gross physical settlement, net share
settlement or
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 20
cash settlement), subject to certain conditions and the right of the counterparty to accelerate settlement under certain circumstances.
The Company accounts for the shares of common stock reserved for issuance upon settlement as equity in accordance with ASC
815-40, Contracts in Entity's Own Equity, which permits equity classification when a contract is considered indexed to the entity’s own stock
and the contract requires or permits the issuing entity to settle the contract in shares (either physically or net in shares).
The guidance establishes a two-step process for evaluating whether an equity-linked financial instrument is considered indexed to
the entity’s own stock, first, evaluating the instrument’s contingent exercise provisions and second, evaluating the instrument’s settlement
provisions. When entering into forward sales agreements, we determined that (i) none of the agreement’s exercise contingencies are based on
observable markets or indices besides those related to the market for our own stock price; and (ii) none of the settlement provisions preclude
the agreements from being indexed to our own stock.
Before the issuance of shares of common stock, upon physical or net share settlement of the forward sales agreements, the Company
expects that the shares issuable upon settlement of the forward sales agreements will be reflected in its diluted income/(loss) per share
calculations using the treasury stock method. Under this method, the number of shares of common stock used in calculating diluted
income/(loss) per share is deemed to be increased by the excess, if any, of the number of shares of common stock that would be issued upon
full physical settlement of the forward sales agreements over the number of shares of common stock that could be purchased by the
Company in the open market (based on the average market price during the period) using the proceeds receivable upon full physical
settlement (based on the adjusted forward sale price at the end of the reporting period). When the Company physically or net share settles any
forward sales agreement, the delivery of shares of common stock would result in an increase in the number of weighted average common
shares outstanding and dilution to basic income/(loss) per share. (See Note 8, Income/(Loss) per Share for further discussion).
Lease Receivables
During the years ended December 31, 2024 and 2023, the Company performed an analysis in accordance with the ASC 842, Leases,
guidance to assess the collectibility of its operating lease receivables. This analysis included an assessment of collectibility of current and
future rents and whether those lease payments were no longer probable of collection. In accordance with the leases guidance, if collection of
lease payments is no longer deemed to be probable over the life of the lease contract, we recognize revenue only when cash is received, and
all existing contractual operating lease receivables and straight-line lease receivables are reserved.
As of December 31, 2024 and 2023, the Company’s multifamily tenant lease receivables balance, net of its reserve, was
approximately $5.9 million and $9.0 million, respectively, including its share from unconsolidated joint ventures. The Company’s retail
tenant lease receivables balance (exclusive of straight-line rent receivables), net of its reserve, was approximately $0.3 million and $0.3
million, including its share from unconsolidated joint ventures, as of December 31, 2024 and 2023, respectively.
Use of Estimates
The preparation of these financial statements in accordance with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the financial statements and
the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates.
Market Concentration Risk
The Company is subject to increased exposure from economic and other competitive factors specific to markets where the Company
holds a significant percentage of the carrying value of its real estate portfolio. At December 31, 2024, the Company held greater than 10% of
the carrying value of its real estate portfolio in each of the Metropolitan D.C. and Boston, Massachusetts markets.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 21
3. REAL ESTATE OWNED
Real estate assets owned by the Company consist of income producing operating properties, properties under development, land
held for future development, and held for disposition properties. As of December 31, 2024, the Company owned and consolidated 169
communities in 13 states plus the District of Columbia totaling 55,696 apartment homes. The following table summarizes the carrying
amounts for our real estate owned (at cost) as of December 31, 2024 and 2023 (dollars in thousands):
December 31,
December 31,
2024
2023
Land
$
2,521,363
$
2,549,716
Depreciable property — held and used:
Land improvements
271,702
255,706
Building, improvements, and furniture, fixtures and equipment
13,189,796
12,902,021
Real estate intangible assets
11,933
50,013
Under development:
Land and land improvements
—
16,576
Building, improvements, and furniture, fixtures and equipment
—
143,828
Real estate held for disposition:
Land and land improvements
44,645
13,734
Building, improvements, and furniture, fixtures and equipment
135,844
92,265
Real estate intangible assets
38,080
—
Real estate owned
16,213,363
16,023,859
Accumulated depreciation (a)
(6,901,026)
(6,267,830)
Real estate owned, net
$
9,312,337
$
9,756,029
(a) Accumulated depreciation is inclusive of $21.2 million and $17.2 million of accumulated amortization related to real estate
intangible assets as of December 31, 2024 and 2023, respectively.
Acquisitions
In January 2024, the Company acquired its joint venture partner’s common equity interest in a 173 apartment home operating
community located in Oakland, California for $1.4 million. The community was previously owned by a consolidated joint venture of the
Company. (See Note 5, Joint Ventures and Partnerships for more information).
In February 2023, the Company took title to a 136 apartment home operating community located in San Francisco, California,
through a foreclosure proceeding. The community was previously owned by a consolidated joint venture of the Company. (See Note 5, Joint
Ventures and Partnerships for more information).
In August 2023, the Company acquired a portfolio of six operating communities totaling 1,753 apartment homes, which included
four operating communities in Dallas, Texas and two operating communities in Austin, Texas, for a purchase price of $354.6 million. The
Company acquired the portfolio with a combination of cash, the assumption of six mortgage loans with an outstanding principal balance of
approximately $209.4 million (fair value of $191.7 million), and the issuance of 3.6 million OP Units to the seller valued at $141.4 million.
The OP Units were valued based on the closing price per share of UDR’s common stock on the date of acquisition in accordance with GAAP.
The Company increased its real estate assets owned by approximately $344.8 million, recorded $9.8 million of in-place lease intangibles, and
recorded a $17.6 million debt discount in connection with the below-market debt assumed.
In April 2022, the Company acquired a to-be-developed parcel of land located in Fort Lauderdale, Florida for approximately
$16.0 million.
In June 2022, the Company acquired a 433 apartment home operating community located in Danvers, Massachusetts for
approximately $207.5 million. The Company increased its real estate assets owned by approximately $203.7 million and recorded
$3.8 million of in-place lease intangibles.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 22
In June 2022, the Company acquired three contiguous to-be-developed parcels of land located in Dallas, Texas for approximately
$90.2 million.
In June 2022, the Company acquired a to-be-developed parcel of land, which included two operating retail components, located in
Riverside, California for approximately $29.0 million. The Company increased its real estate assets owned by approximately $28.2 million
and recorded $0.8 million of in-place lease intangibles.
Dispositions
In January 2025, the Company sold an operating community located in Brooklyn, New York with a total of 188 apartment homes
for gross proceeds of $127.5 million, resulting in a gain of approximately $23.6 million. This operating community was classified as held for
disposition as of December 31, 2024.
In January 2025, the Company sold an operating community located in Englewood, New Jersey with a total of 185 apartment homes
for gross proceeds of $84.0 million, resulting in a gain of approximately $24.4 million. This operating community was classified as held for
disposition as of December 31, 2024.
In February 2024, the Company sold an operating community located in Arlington, Virginia with a total of 214 apartment homes for
gross proceeds of $100.0 million, resulting in a gain of approximately $16.9 million. This operating community was classified as held for
disposition as of December 31, 2023.
In January 2023, the Company sold the retail component of a development community located in Washington D.C. for gross
proceeds of approximately $14.4 million, resulting in a gain of less than $0.1 million. The gross proceeds were received ratably throughout
the development of the community and are reflected as a reduction of capital expenditures.
In June 2023, the Company contributed four wholly-owned operating communities, totaling 1,328 apartment homes located in
various markets, to a newly formed joint venture in exchange for a 51.0% interest in the venture. The contribution resulted in the Company
no longer retaining a controlling interest in the communities, and the Company deconsolidated the operating communities. The Company
received approximately $247.9 million in cash proceeds from our joint venture partner at formation. The transaction was accounted for as a
partial sale and resulted in a gain of approximately $325.9 million, which was recorded in Gain/(loss) on sale of real estate owned on the
Consolidated Statement of Operations, which consisted of the gain on the partial sale and the initial measurement of our retained interest at
fair value. (See Note 5, Joint Ventures and Partnerships for further discussion).
In December 2023, the Company sold an operating community located in Hillsboro, Oregon with a total of 276 apartment homes for
gross proceeds of $78.6 million, resulting in a gain of approximately $25.3 million.
In November 2022, the Company sold an operating community located in Orange County, California with a total of 90 apartment
homes for gross proceeds of $41.5 million, resulting in a gain of approximately $25.5 million.
Developments
At December 31, 2024, the Company was not developing any communities although the Company is incurring and capitalizing
costs directly related to predevelopment activities in preparation of future development commencements. During the year ended December
31, 2024, the Company completed the development of two communities located in Tampa, Florida and Addison, Texas, with a total of 415
apartment homes.
Other Activity
In connection with the acquisition of certain properties, the Company agreed to pay certain of the tax liabilities of certain
contributors if the Company sells one or more of the properties contributed in a taxable transaction prior to the expiration of specified periods
of time following the acquisition. The Company may, however, sell, without being required to pay any tax liabilities, any of such properties
in a non-taxable transaction, including, but not limited to, a tax deferred Section 1031 exchange.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 23
Further, the Company has agreed to maintain certain debt some of which may be guaranteed by certain contributors for specified
periods of time following the acquisition. The Company, however, has the ability to refinance or repay guaranteed debt or to substitute new
debt if the debt and the guaranty continue to satisfy certain conditions.
Amortization of Intangible Assets
The following table provides a summary of the aggregate amortization for the intangible assets acquired in the acquisition of real
estate for each of the next five years and thereafter (in thousands):
Unamortized
Balance as of
December 31,
2024
2025
2026
2027
2028
2029
Thereafter
Real estate intangible assets, net (a)
$
28,775
$
24,581
$
1,562
$
1,505
$
424
$
416
$
287
In-place lease intangible assets, net (b)
2,264
610
504
434
318
266
132
Total
$
31,039
$
25,191
$
2,066
$
1,939
$
742
$
682
$
419
(a) Real estate intangible assets, net is recorded net of accumulated amortization of $21.2 million in Real estate held for investment, net
on the Consolidated Balance Sheets. For the years ended December 31, 2024 and 2023, $4.0 million and $4.2 million, respectively,
of amortization expense was recorded in Depreciation and Amortization on the Consolidated Statement of Operations.
In January 2025, the Company fully amortized $22.7 million of unamortized real estate intangible assets related to the sale of two
operating communities discussed above.
(b) In-place lease intangible assets, net is recorded net of accumulated amortization of $7.5 million in Other assets on the Consolidated
Balance Sheets. For the years ended December 31, 2024 and 2023, $8.9 million and $7.3 million, respectively, was recorded in
Depreciation and Amortization on the Consolidated Statement of Operations.
4. VARIABLE INTEREST ENTITIES
The Company has determined that the Operating Partnership and DownREIT Partnership are VIEs as the limited partners lack
substantive kick-out rights and substantive participating rights. The Company has concluded that it is the primary beneficiary of, and
therefore consolidates, the Operating Partnership and DownREIT Partnership based on its role as the sole general partner of the Operating
Partnership and DownREIT Partnership. The Company’s role as community manager and its equity interests give us the power to direct the
activities that most significantly impact the economic performance and the obligation to absorb potentially significant losses or the right to
receive potentially significant benefits of the Operating Partnership and DownREIT Partnership.
5. JOINT VENTURES AND PARTNERSHIPS
UDR has entered into joint ventures and partnerships with unrelated third parties to own, operate, acquire, renovate, develop,
redevelop, dispose of, and manage real estate assets that are either consolidated and included in Real estate owned on the Consolidated
Balance Sheets or are accounted for under the equity method of accounting, and are included in Investment in and advances to
unconsolidated joint ventures, net, on the Consolidated Balance Sheets. The Company consolidates the entities that we control as well as any
variable interest entity where we are the primary beneficiary. Under the VIE model, the Company consolidates an entity when it has control
to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the
VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest.
UDR’s joint ventures and partnerships are funded with a combination of debt and equity. Our losses are typically limited to our
investment and except as noted below, the Company does not guarantee any debt, capital payout or other obligations associated with our joint
ventures and partnerships.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 24
Consolidated joint venture
The Company previously held a preferred equity investment in a joint venture that owned a 173 apartment home community located
in Oakland, California. In 2023, the joint venture was deemed to be a VIE and the Company concluded that it was the primary beneficiary of
the VIE, and therefore began consolidating the joint venture. In January 2024, the Company took title to the developer’s equity interest in the
joint venture resulting in it being a wholly-owned community. (See Note 3, Real Estate Owned for more information).
Unconsolidated joint ventures and partnerships
The Company recognizes earnings or losses from our investments in unconsolidated joint ventures and partnerships consisting of
our proportionate share of the net earnings or losses of the joint ventures and partnerships. In addition, we may earn fees for providing
management services for the communities held by the unconsolidated joint ventures and partnerships.
The following table summarizes the Company’s investment in and advances to unconsolidated joint ventures and partnerships, net,
which are accounted for under the equity method of accounting as of December 31, 2024 and 2023 (dollars in thousands):
Number of
Number of
Operating
Apartment
UDR's Weighted Average
Communities
Homes
Ownership Interest
Investment at
Income/(loss) from investments
December 31,
December 31,
December 31,
December 31,
December 31,
December 31,
Year Ended December 31,
Joint Ventures
2024
2024
2024
2023
2024
2023
2024
2023
2022
Operating:
UDR/MetLife (a)
13
2,834
50.2 %
50.2 %
$
206,308
$
225,195
$
(7,438)
$
(5,378)
$
(7,604)
UDR/LaSalle
5
1,590
51.0 %
51.0 %
267,562
286,723
(8,027)
(3,660)
—
Total Joint Ventures
18
4,424
$
473,870
$
511,918
$
(15,465)
$
(9,038)
$
(7,604)
Number of
Apartment
Communities
Homes
Weighted
Investment at
Income/(loss) from investments
Debt and Preferred Equity Program
December 31,
December 31,
Average
Years To
UDR
December 31, December 31,
Year Ended December 31,
and Real Estate Technology Investments (b)
2024
2024
Rate
Maturity
Commitment (c)
2024
2023
2024
2023
2022
Preferred equity investments:
Operating
27
6,436
9.6 %
2.8
$
342,498
$
380,969
$
387,771
$
25,741
$
35,685
$
26,374
Real estate technology and sustainability
investments:
Real estate technology and sustainability
investments
N/A
N/A
N/A
N/A
$
86,000
57,344
44,382
9,959
104
(35,429)
Total Debt and Preferred Equity Program and
Real Estate Technology and Sustainability
Investments
438,313
432,153
35,700
35,789
(9,055)
Sold joint ventures and other investments
—
—
—
(22,058)
21,606
Total investment in and advances to unconsolidated joint ventures, net (a)
$
912,183
$
944,071
$20,235
$
4,693
$
4,947
(a) As of December 31, 2024 and 2023, the Company’s negative investment in one UDR/MetLife community of $5.3 million and $8.9
million, respectively, is recorded in Accounts payable, accrued expenses, and other liabilities on the Consolidated Balance Sheets.
(b) The Debt and Preferred Equity Program (previously referred to as the Developer Capital Program) is the program through which the
Company makes investments, including preferred equity investments, first mortgage loans, mezzanine loans (recorded in Notes
receivable, net on the Consolidated Balance Sheets) or other structured investments that may receive a fixed yield on the investment and
may include provisions pursuant to which the Company participates in the increase in value of the property upon monetization of the
applicable property. The Company’s preferred equity investments include three investments that receive a variable percentage of the
value created from the project upon a capital or liquidating event. During the year ended December 31, 2024, the Company entered into
four new preferred equity investments and no preferred equity investments were fully redeemed.
In July 2024, the Company received a $17.2 million partial paydown on one of its operating preferred equity investments. In conjunction
with the paydown, the Company’s remaining $50.0 million preferred equity investment will earn a preferred return of 11.0% per annum.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 25
In July 2024 and August 2024, the Company entered into four joint venture agreements with an unaffiliated joint venture partner to
operate four operating communities with a total of 818 apartment homes located in Portland, Oregon. The Company’s combined
preferred equity investment of $35.0 million earns a preferred return of 10.75% per annum. The unaffiliated joint venture partner is the
managing member of the joint ventures. The Company has concluded that it does not control the joint ventures and accounts for its
investments under the equity method of accounting.
In September 2024, the Company made a $31.1 million secured mortgage loan to a joint venture, in which the Company also owns a
preferred equity investment. The joint venture used the proceeds of the loan to repay its senior construction loan in full. The loan to the
joint venture has an interest rate of SOFR plus 300 basis points and a maturity date in September 2027. (See Note 2, Significant
Accounting Policies for further discussion). In addition, the Company recorded an $8.1 million non-cash impairment loss on its preferred
equity investment (recorded in Income/(loss) from unconsolidated entities on the Consolidated Statements of Operations) due to a
decrease in the value of the operating community that it deemed to be other-than-temporary.
In December 2024, the Company received a $38.5 million partial paydown and a $9.9 million partial paydown from two of its operating
preferred equity investments from the proceeds of the refinancings of the joint ventures’ senior loans.
(c) Represents UDR’s maximum funding commitment only and therefore excludes other activity such as income from investments.
As of December 31, 2024 and 2023, the Company had deferred fees of $7.6 million and $7.6 million, respectively, which will be
recognized through earnings over the weighted average life of the related properties, upon the disposition of the properties to a third party, or
upon completion of certain development obligations.
The Company recognized management fees of $8.3 million, $6.8 million, and $5.0 million during the years ended
December 31, 2024, 2023, and 2022, respectively, for management of the communities held by the joint ventures and partnerships. The
management fees are included in Joint venture management and other fees on the Consolidated Statements of Operations.
The Company may, in the future, make additional capital contributions to certain of our joint ventures and partnerships should
additional capital contributions be necessary to fund acquisitions or operations.
We consider various factors to determine if a decrease in the value of our Investment in and advances to unconsolidated joint
ventures, net is other-than-temporary. These factors include, but are not limited to, age of the venture, our intent and ability to retain our
investment in the entity, the financial condition and long-term prospects of the entity, and the relationships with the other joint venture
partners and its lenders. Based on the significance of the unobservable inputs, we classify these fair value measurements within Level 3 of
the valuation hierarchy. The Company did not incur any other-than-temporary impairments in the value of its investments in unconsolidated
joint ventures during the years ended December 31, 2024, 2023, and 2022, other than the one preferred equity investment discussed in
footnote (b) above.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 26
Condensed summary financial information relating to the unconsolidated joint ventures’ and partnerships’ operations (not just our
proportionate share) is presented below for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands):
Debt and Preferred
Equity Program
As of and For the
UDR/
UDR/
and Other
Year Ended December 31, 2024
MetLife
LaSalle
Investments
Total
Condensed Statements of Operations:
Total revenues
$
141,014
$
49,063
$
131,876
$
321,953
Property operating expenses
64,329
17,657
69,737
151,723
Real estate depreciation and amortization
53,543
45,375
51,633
150,551
Operating income/(loss)
23,142
(13,969)
10,506
19,679
Interest expense
(33,491)
(2,698)
(74,268)
(110,457)
Other income/(loss)
—
—
(3,840)
(3,840)
Net unrealized/realized gain/(loss) on held investments
—
—
84,835
84,835
Net income/(loss)
$
(10,349) $
(16,667)
$
17,233
$
(9,783)
Condensed Balance Sheets:
Total real estate, net
$
1,174,695
$
567,474
$
1,372,206
$
3,114,375
Investments, at fair value
—
—
372,478
372,478
Cash and cash equivalents
12,528
5,688
29,716
47,932
Other assets
20,774
1,334
125,236
147,344
Total assets
1,207,997
574,496
1,899,636
3,682,129
Third party debt, net
845,963
45,246
1,168,926
2,060,135
Accounts payable and accrued liabilities
19,393
5,150
133,962
158,505
Total liabilities
865,356
50,396
1,302,888
2,218,640
Total equity
$
342,641
$
524,100
$
596,748
$
1,463,489
Debt and Preferred
Equity Program
As of and For the
UDR/
UDR/
and Other
Year Ended December 31, 2023
MetLife
LaSalle
Investments
Total
Condensed Statements of Operations:
Total revenues
$
139,073
$
20,514
$
109,753
$
269,340
Property operating expenses
58,298
6,896
54,442
119,636
Real estate depreciation and amortization
54,895
21,182
43,407
119,484
Operating income/(loss)
25,880
(7,564)
11,904
30,220
Interest expense
(32,720)
(126)
(53,385)
(86,231)
Other income/(loss)
—
—
537
537
Net unrealized/realized gain/(loss) on held investments
—
—
23,403
23,403
Net income/(loss)
$
(6,840)
$
(7,690)
$
(17,541)
$
(32,071)
Condensed Balance Sheets:
Total real estate, net
$
1,214,525
$
595,976
$
1,347,556
$
3,158,057
Investments, at fair value
—
—
257,832
257,832
Cash and cash equivalents
14,826
4,809
42,035
61,670
Other assets
16,406
9,986
120,584
146,976
Total assets
1,245,757
610,771
1,768,007
3,624,535
Third party debt, net
855,050
45,126
1,112,640
2,012,816
Accounts payable and accrued liabilities
14,856
5,510
151,136
171,502
Total liabilities
869,906
50,636
1,263,776
2,184,318
Total equity
$
375,851
$
560,135
$
504,231
$
1,440,217
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 27
Debt and Preferred
Equity Program
For the
UDR/
and Other
Year Ended December 31, 2022
MetLife
Investments
Total
Condensed Statements of Operations:
Total revenues
$
130,229
$
38,187
$
168,416
Property operating expenses
55,262
25,218
80,480
Real estate depreciation and amortization
55,580
20,064
75,644
Gain/(loss) on sale of real estate
—
127,542
127,542
Operating income/(loss)
19,387
120,447
139,834
Interest expense
(30,510)
(16,404)
(46,914)
Other income/(loss)
—
(90)
(90)
Net unrealized/realized gain/(loss) on held investments
—
(203,216)
(203,216)
Net income/(loss)
$
(11,123)
$
(99,263)
$
(110,386)
6. LEASES
Lessee - Ground Leases
UDR has six communities that are subject to ground leases, under which UDR is the lessee, that expire between 2043 and 2103,
inclusive of extension options we are reasonably certain will be exercised. All of these leases are classified as operating leases through the
lease term expiration based on our election of the practical expedient provided by the leasing standard. Rental expense for lease payments
related to operating leases is recognized on a straight-line basis over the remaining lease term. We currently do not hold any finance leases.
The Company also elected the short-term lease exception provided by the leasing standard and therefore only recognizes right-of-use assets
and lease liabilities for leases with a term greater than one year. No leases qualified for the short-term lease exception during the years ended
December 31, 2024 and 2023.
As of December 31, 2024 and 2023, the Operating lease right-of-use assets were $187.0 million and $190.6 million, respectively,
and the Operating lease liabilities were $182.3 million and $185.8 million, respectively, on our Consolidated Balance Sheets related to our
ground leases. The value of the Operating lease right-of-use assets exceeds the value of the Operating lease liabilities due to prepaid lease
payments. The calculation of these amounts includes minimum lease payments over the remaining lease term (described further in the table
below). Variable lease payments are excluded from the right-of-use assets and lease liabilities and are recognized in earnings in the period in
which the obligation for those payments is incurred.
As the discount rate implicit in the leases was not readily determinable, we determined the discount rate for these leases utilizing the
Company’s incremental borrowing rate at a portfolio level, adjusted for the remaining lease term, and the form of underlying collateral.
The weighted average remaining lease term for these leases was 41.3 years and 42.0 years at December 31, 2024 and 2023,
respectively, and the weighted average discount rate was 5.0% at both December 31, 2024 and 2023.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 28
Future minimum lease payments and total operating lease liabilities from our ground leases as of December 31, 2024 are as follows
(dollars in thousands):
Ground Leases
2025
$
12,442
2026
12,442
2027
12,442
2028
12,442
2029
12,442
Thereafter
393,010
Total future minimum lease payments (undiscounted)
455,220
Difference between future undiscounted cash flows and discounted cash flows
(272,945)
Total operating lease liabilities (discounted)
$
182,275
For purposes of recognizing our ground lease contracts, the Company uses the minimum lease payments, if stated in the agreement.
For ground lease agreements where there is a rent reset provision based on a change in an index or a rate (i.e., changes in fair market rental
rates or changes in the consumer price index) but that does not include a specified minimum lease payment, the Company uses the current
rent over the remainder of the lease term. If there is a contingency upon which some or all of the variable lease payments that will be paid
over the remainder of the lease term are based, which is resolved such that those payments now meet the definition of lease payments, the
Company will remeasure the right-of-use asset and lease liability on the reset date.
The components of operating lease expenses were as follows (dollars in thousands):
Year Ended December 31,
2024
2023
2022
Lease expense:
Contractual lease expense
$
13,322
$
13,173
$
12,991
Variable lease expense (a)
189
155
112
Total operating lease expense (b)(c)
$
13,511
$
13,328
$
13,103
(a) Variable lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of a
community’s revenue.
(b) Lease expense is reported within the line item Other operating expenses on the Consolidated Statements of Operations.
(c) For the year ended December 31, 2024, Operating lease right-of-use assets and Operating lease liabilities amortized by $3.6 million
and $3.5 million, respectively, for the year ended December 31, 2023, Operating lease right-of-use assets and Operating lease
liabilities amortized by $3.5 million and $3.4 million, respectively, and for the year ended December 31, 2022, Operating lease right-
of-use assets and Operating lease liabilities amortized by $3.4 million and $3.3 million, respectively. Due to the net impact of the
amortization, the Company recorded $0.1 million, $0.1 million and $0.1 million of total operating lease expense during the years ended
December 31, 2024, 2023 and 2022, respectively.
Lessor - Apartment Home, Retail and Commercial Space Leases
UDR’s communities and retail and commercial space are leased to tenants under operating leases. As of December 31, 2024, our
apartment home leases generally have initial terms of 12 months or less. As of December 31, 2024, our retail and commercial space leases
generally have initial terms of between 5 and 15 years and represent approximately 1% to 2% of our total lease revenue. Our apartment home
leases are generally renewable at the end of the lease term, subject to potential changes in rental rates, and our retail and commercial space
leases generally have renewal options, subject to associated increases in rental rates due to market-based or fixed-price renewal options and
certain other conditions. (See Note 16, Reportable Segments for further discussion around our major revenue streams and disaggregation of
our revenue).
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 29
Future minimum lease payments from our retail and commercial leases as of December 31, 2024 are as follows (dollars in
thousands):
Retail and Commercial Leases
2025
$
26,047
2026
23,643
2027
20,477
2028
17,678
2029
13,337
Thereafter
56,388
Total future minimum lease payments (a)
$
157,570
(a) We have excluded our apartment home leases from this table as our apartment home leases generally have initial terms of 12
months or less.
Certain of our leases with retail and commercial tenants provide for the payment by the lessee of additional variable rent based on a
percentage of the tenant’s revenue. The amounts shown in the table above do not include these variable percentage rents. The Company
recorded variable percentage rents of $1.1 million, $1.1 million and $0.8 million during the years ended December 31, 2024, 2023 and 2022,
respectively.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 30
7. SECURED AND UNSECURED DEBT, NET
The following is a summary of our secured and unsecured debt at December 31, 2024 and 2023 (dollars in thousands):
Principal Outstanding
As of December 31, 2024
Weighted
Weighted
Average
Average
Number of
December 31,
December 31,
Interest
Years to
Communities
2024
2023
Rate
Maturity Encumbered
Secured Debt:
Fixed Rate Debt
Mortgage notes payable (a)
$
1,115,798
$
1,213,751
3.49 %
4.0
19
Deferred financing costs and other non-cash adjustments (b)
(3,429)
(3,009)
Total fixed rate secured debt, net
1,112,369
1,210,742
3.50 %
4.0
19
Variable Rate Debt
Mortgage notes payable (c)
—
40,017
— %
—
—
Tax-exempt secured notes payable (d)
27,000
27,000
3.49 %
7.2
1
Deferred financing costs
(38)
(46)
Total variable rate secured debt, net
26,962
66,971
3.52 %
7.2
1
Total Secured Debt, net
1,139,331
1,277,713
3.50 %
4.1
20
Unsecured Debt:
Variable Rate Debt
Borrowings outstanding under unsecured credit facility due August
2028 (e) (n)
—
—
— %
3.7
Borrowings outstanding under unsecured commercial paper program
due January 2025 (f) (n)
289,900
408,075
4.70 %
0.1
Borrowings outstanding under unsecured working capital credit
facility due January 2026 (g)
9,361
4,593
5.19 %
1.0
Term Loan due January 2027 (e) (n)
175,000
—
5.48 %
2.1
Fixed Rate Debt
Term Loan due January 2027 (e) (n)
175,000
350,000
1.43 %
2.1
8.50% Debentures due September 2024
—
15,644
— %
—
2.95% Medium-Term Notes due September 2026 (n)
300,000
300,000
2.95 %
1.7
3.50% Medium-Term Notes due July 2027 (net of discounts of $176
and $247, respectively) (h) (n)
299,824
299,753
4.03 %
2.5
3.50% Medium-Term Notes due January 2028 (net of discounts of
$361 and $479, respectively) (n)
299,639
299,521
3.50 %
3.0
4.40% Medium-Term Notes due January 2029 (net of discounts of $2
and $3, respectively) (i) (n)
299,998
299,997
4.27 %
4.1
3.20% Medium-Term Notes due January 2030 (net of premiums of
$6,921 and $8,294, respectively) (j) (n)
606,921
608,294
3.32 %
5.0
3.00% Medium-Term Notes due August 2031 (net of premiums of
$7,914 and $9,109, respectively) (k) (n)
607,914
609,109
3.01 %
6.6
2.10% Medium-Term Notes due August 2032 (net of discounts of
$267 and $303, respectively) (n)
399,733
399,697
2.10 %
7.6
1.90% Medium-Term Notes due March 2033 (net of discounts of
$989 and $1,110, respectively) (n)
349,011
348,890
1.90 %
8.2
2.10% Medium-Term Notes due June 2033 (net of discounts of $842
and $941, respectively) (n)
299,158
299,059
2.10 %
8.5
5.125% Medium-Term Notes due September 2034 (net of discounts
of $2,954 and $0, respectively) (l) (n)
297,046
—
4.95 %
9.7
3.10% Medium-Term Notes due November 2034 (net of discounts of
$868 and $956, respectively) (m) (n)
299,132
299,044
3.13 %
9.8
Other
—
2
Deferred financing costs
(20,003)
(20,682)
Total Unsecured Debt, net
4,687,634
4,520,996
3.35 %
5.4
Total Debt, net
$
5,826,965
$
5,798,709
3.38 %
5.2
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 31
For purposes of classification of the above table, variable rate debt with a derivative financial instrument designated as a cash flow
hedge is deemed as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument.
Our secured debt instruments generally feature either monthly interest and principal or monthly interest-only payments with balloon
payments due at maturity. As of December 31, 2024, secured debt encumbered approximately 13% of UDR’s total real estate owned based
upon gross book value (approximately 87% of UDR’s real estate owned based on gross book value is unencumbered).
(a) At December 31, 2024, fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and
mature at various dates from July 2025 through February 2031 and carry interest rates ranging from 2.62% to 4.39%.
In July 2024, the Company repaid a $94.1 million fixed rate mortgage at maturity with borrowings from the Company’s unsecured
commercial paper program.
The Company will from time to time acquire properties subject to fixed rate debt instruments. In those situations, the Company
records the debt at its estimated fair value and amortizes any difference between the fair value and par value to interest expense over the term
of the underlying debt instrument.
(b) During the years ended December 31, 2024, 2023, and 2022, the Company had $1.3 million, $3.4 million, and $4.5 million,
respectively, of amortization of the fair market adjustment of debt assumed in the acquisition of properties inclusive of its fixed rate mortgage
notes payable, which was included in Interest expense on the Consolidated Statements of Operations. The unamortized fair market
adjustment was a net premium of $0.2 million and $1.5 million at December 31, 2024 and 2023, respectively. The change in net premium
was primarily due to the assumption of fixed rate mortgages discussed in footnote (a) above.
(c) During the year ended December 31, 2024, the Company prepaid a variable rate mortgage with an outstanding balance of $40.0
million and an interest rate of 8.31% at the time of the payoff.
(d) The variable rate mortgage note payable secures a tax-exempt housing bond issue that matures in March 2032. Interest on this
note is payable in monthly installments. As of December 31, 2024, the variable interest rate on the mortgage note was 3.49%.
(e) The Company has a $1.3 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $350.0 million
unsecured term loan (the “Term Loan”). The credit agreement for these facilities (the “Credit Agreement”) allows the total commitments
under the Revolving Credit Facility and the total borrowings under the Term Loan to be increased to an aggregate maximum amount of up to
$2.5 billion, subject to certain conditions, including obtaining commitments from one or more lenders. In August 2024, the Company
amended the Revolving Credit Facility to extend the maturity date to August 31, 2028, with two six-month extension options. The Revolving
Credit Facility was previously set to mature on January 31, 2026, with two six-month extension options, subject to certain conditions. The
Term Loan has a scheduled maturity date of January 31, 2027. In August 2024, the Company amended the Term Loan to include a twelve-
month extension option, subject to certain conditions.
Based on the Company’s current credit rating, the Revolving Credit Facility has an interest rate equal to Adjusted SOFR plus a
margin of 77.5 basis points and a facility fee of 15 basis points, and the Term Loan has an interest rate equal to Adjusted SOFR plus a margin
of 83.0 basis points. Depending on the Company’s credit rating, the margin under the Revolving Credit Facility ranges from 70 to 140 basis
points, the facility fee ranges from 10 to 30 basis points, and the margin under the Term Loan ranges from 75 to 160 basis points. Further, as
amended, the Credit Agreement includes sustainability adjustments pursuant to which the applicable margin for the Term Loan may be
reduced by up to two basis points contingent upon the Company receiving green building certifications, which is reflected in the margin
noted above. In addition, the Credit Agreement, as amended, allows for the Company in consultation with the sustainability structuring agent
to propose key performance indicators with respect to certain environmental, social, and governance goals of the Company, and thresholds or
targets with respect thereto, and a related amendment to the Credit Agreement, that if entered into may allow a change in the applicable
margin for the Revolving Credit Facility of up to four basis points and a change in the applicable facility fee of up to one basis point.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 32
In August 2021, the Company entered into two interest rate swaps totaling $175.0 million of notional value, which became effective
in July 2022, to hedge against interest rate risk on a portion of the Term Loan debt until July 2025. $175.0 million of the Term Loan debt has
a weighted average interest rate, inclusive of the impact of interest rate swaps, of 1.43% until July 2025.
The Credit Agreement contains customary representations and warranties and financial and other affirmative and negative
covenants. The Credit Agreement also includes customary events of default, in certain cases subject to customary periods to cure. The
occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, declare the unpaid
principal, accrued and unpaid interest and all other amounts payable under the Credit Agreement to be immediately due and payable.
The following is a summary of short-term bank borrowings under the Revolving Credit Facility at December 31, 2024 and 2023
(dollars in thousands):
December 31,
December 31,
2024
2023
Total revolving credit facility
$
1,300,000
$
1,300,000
Borrowings outstanding at end of period (1)
—
—
Weighted average daily borrowings during the period ended
—
2,055
Maximum daily borrowings during the period ended
—
250,000
Weighted average interest rate during the period ended
— %
5.6 %
Interest rate at end of the period
— %
— %
(1) Excludes $3.4 million and $2.3 million of letters of credit at December 31, 2024 and 2023, respectively.
(f) The Company has an unsecured commercial paper program. Under the terms of the program, the Company may issue unsecured
commercial paper up to a maximum aggregate amount outstanding of $700.0 million. The notes are sold under customary terms in the United
States commercial paper market and rank pari passu with all of the Company’s other unsecured indebtedness. The notes are fully and
unconditionally guaranteed by the Operating Partnership.
The following is a summary of short-term bank borrowings under the unsecured commercial paper program at December 31, 2024
and 2023 (dollars in thousands):
December 31,
December 31,
2024
2023
Total unsecured commercial paper program
$
700,000
$
700,000
Borrowings outstanding at end of period
289,900
408,075
Weighted average daily borrowings during the period ended
390,237
384,068
Maximum daily borrowings during the period ended
645,000
505,000
Weighted average interest rate during the period ended
5.4 %
5.4 %
Interest rate at end of the period
4.7 %
5.7 %
(g) The Company has a working capital credit facility, which provides for a $75.0 million unsecured revolving credit facility (the
“Working Capital Credit Facility”) with a scheduled maturity date of January 12, 2026. In December 2024, the Company extended the
maturity date from January 12, 2025 to January 12, 2026. Based on the Company’s current credit rating, the Working Capital Credit Facility
has an interest rate equal to Adjusted SOFR plus a margin of 77.5 basis points. Depending on the Company’s credit rating, the margin ranges
from 70 to 140 basis points.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 33
The following is a summary of short-term bank borrowings under the Working Capital Credit Facility at December 31, 2024 and
2023 (dollars in thousands):
December 31,
December 31,
2024
2023
Total working capital credit facility
$
75,000
$
75,000
Borrowings outstanding at end of period
9,361
4,593
Weighted average daily borrowings during the period ended
15,102
15,829
Maximum daily borrowings during the period ended
62,077
57,107
Weighted average interest rate during the period ended
6.0 %
5.9 %
Interest rate at end of the period
5.2 %
6.3 %
(h) The Company previously entered into forward starting interest rate swaps to hedge against interest rate risk on $200.0 million of
this debt. The all-in weighted average interest rate, inclusive of the impact of these interest rate swaps, was 4.03%.
(i) The Company previously entered into forward starting interest rate swaps to hedge against interest rate risk on $150.0 million of
the initial $300.0 million issued. The all-in weighted average interest rate, inclusive of the impact of these interest rate swaps, was 4.27%.
(j) The Company previously entered into forward starting interest rate swaps and treasury lock to hedge against the interest rate risk
of this debt. The all-in weighted average interest rate, inclusive of the impact of the forward starting swaps and treasury locks, was 3.32%.
(k) The Company entered into treasury lock agreements to hedge against interest rate risk on $250.0 million of the $600.0 million
aggregate principal amount. The all-in weighted average interest rate, inclusive of the impact of the treasury locks, was 3.01%.
(l) In August 2024, the Company issued $300.0 million of 5.125% senior medium-term notes due September 1, 2034. Interest is
payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025. The notes were priced at 98.977%
of the principal amount of the notes. The Company used the net proceeds to pay down outstanding indebtedness under its commercial paper
program. The Company entered into and settled treasury lock arrangements to hedge against all interest rate risk of the debt. The all-in
weighted average interest rate, inclusive of the impact of the treasury locks, was 4.95%.
(m) The Company previously entered into forward starting interest rate swaps to hedge against the interest rate risk of this debt. The
all-in weighted average interest rate, inclusive of the impact of these interest rate swaps, was 3.13%.
(n) The Operating Partnership is the guarantor of this debt.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 34
The aggregate maturities, including amortizing principal payments on secured and unsecured debt, of total debt for the next
ten years subsequent to December 31, 2024 are as follows (dollars in thousands):
Total Fixed
Total Variable
Total
Total
Total
Year
Secured Debt
Secured Debt
Secured Debt
Unsecured Debt
Debt
2025
$
178,323
$
—
$
178,323
$
289,900
$
468,223
2026
56,672
—
56,672
309,361
366,033
2027
6,939
—
6,939
650,000
656,939
2028
166,526
—
166,526
300,000
466,526
2029
315,811
—
315,811
300,000
615,811
2030
230,597
—
230,597
600,000
830,597
2031
160,930
—
160,930
600,000
760,930
2032
—
27,000
27,000
400,000
427,000
2033
—
—
—
650,000
650,000
2034
—
—
600,000
600,000
Thereafter
—
—
—
—
—
Subtotal
1,115,798
27,000
1,142,798
4,699,261
5,842,059
Non-cash (a)
(3,429)
(38)
(3,467)
(11,627)
(15,094)
Total
$
1,112,369
$
26,962
$
1,139,331
$
4,687,634
$
5,826,965
(a) Includes the unamortized balance of fair market value adjustments, premiums/discounts, and deferred financing costs. For the years
ended December 31, 2024 and 2023, the Company amortized $5.0 million and $4.7 million, respectively, of deferred financing costs into
Interest expense.
We were in compliance with the covenants of our debt instruments at December 31, 2024.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 35
8. INCOME/(LOSS) PER SHARE
The following table sets forth the computation of basic and diluted income/(loss) per share for the periods presented (dollars and
shares in thousands, except per share data):
Year Ended December 31,
2024
2023
2022
Numerator for income/(loss) per share:
Net income/(loss)
$
95,877
$
474,488
$
92,579
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership and
DownREIT Partnership
(6,246)
(30,104)
(5,613)
Net (income)/loss attributable to noncontrolling interests
(46)
(31)
(42)
Net income/(loss) attributable to UDR, Inc.
89,585
444,353
86,924
Distributions to preferred stockholders — Series E (Convertible)
(4,835)
(4,848)
(4,412)
Income/(loss) attributable to common stockholders - basic and diluted
$
84,750
$
439,505
$
82,512
Denominator for income/(loss) per share:
Weighted average common shares outstanding
329,670
329,136
321,949
Unvested restricted stock awards
(380)
(371)
(278)
Denominator for basic income/(loss) per share
329,290
328,765
321,671
Incremental shares issuable from assumed conversion of unvested LTIP Units, conversion of Series E
preferred stock, performance units and unvested restricted stock
826
339
1,029
Denominator for diluted income/(loss) per share
330,116
329,104
322,700
Income/(loss) per weighted average common share:
Basic
$
0.26
$
1.34
$
0.26
Diluted
$
0.26
$
1.34
$
0.26
Basic income/(loss) per common share is computed based upon the weighted average number of common shares outstanding.
Diluted income/(loss) per common share is computed based upon the weighted average number of common shares outstanding plus the
common shares issuable from the assumed conversion of the OP Units and DownREIT Units, convertible preferred stock, stock options,
unvested long-term incentive plan units (“LTIP Units”), performance units, unvested restricted stock and continuous equity program forward
sales agreements. Only those instruments having a dilutive impact on our basic income/(loss) per share are included in diluted income/(loss)
per share during the periods. For the years ended December 31, 2024, 2023, and 2022, the effect of the conversion of the OP Units,
DownREIT Units and the Company’s Series E preferred stock was not dilutive and therefore not included in the above calculation.
In July 2021, the Company entered into an ATM sales agreement under which the Company may offer and sell up to 20.0 million
shares of its common stock, from time to time, to or through its sales agents and may enter into separate forward sales agreements to or
through its forward purchasers. Upon entering into the ATM sales agreement, the Company simultaneously terminated the sales agreement
for its prior at-the-market equity offering program, which was entered into in July 2017. During the year ended December 31, 2024, the
Company did not sell any shares of common stock through its ATM program. As of December 31, 2024, we had 14.0 million shares of
common stock available for future issuance under the ATM program.
In connection with any forward sales agreement under the Company’s ATM program, the relevant forward purchasers will borrow
from third parties and, through the relevant sales agent, acting in its role as forward seller, sell a number of shares of the Company’s common
stock equal to the number of shares underlying the agreement. The Company does not initially receive any proceeds from any sale of
borrowed shares by the forward seller.
The Company generally has the ability to determine the dates and method of settlement (i.e., gross physical settlement, net share
settlement or cash settlement), subject to certain conditions and the right of the counterparty to accelerate settlement under certain
circumstances. The Company currently expects to fully physically settle each forward sales agreement with the relevant forward purchaser
on one or more dates specified by the Company on or prior to the maturity date of that particular forward sales agreement, in which case the
Company expects to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward sales
agreement multiplied
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 36
by the relevant forward sale price. However, subject to certain exceptions, the Company may also elect, in its discretion, to cash settle or net
share settle a particular forward sales agreement, in which case the Company may not receive any proceeds (in the case of cash settlement) or
will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or shares
of UDR common stock (in the case of net share settlement) to the relevant forward purchaser.
During the years ended December 31, 2024 and 2023, the Company did not enter into any forward purchase agreements under its
continuous equity program.
During the year ended December 31, 2024, the Company did not repurchase any shares of its common stock. During the year ended
December 31, 2023, the Company repurchased 0.6 million shares of its common stock at an average price of $40.13 per share for total
consideration of approximately $25.0 million under its share repurchase program.
The following table sets forth the additional shares of common stock outstanding by equity instrument if converted to common
stock for each of the years ended December 31, 2024, 2023, and 2022 (in thousands):
Year Ended December 31,
2024
2023
2022
OP/DownREIT Units
23,993
22,410
21,478
Convertible preferred stock
2,848
2,908
2,916
Unvested LTIP Units, performance units, and unvested restricted stock
826
339
1,029
9. STOCKHOLDERS’ EQUITY
UDR has an effective registration statement that allows the Company to sell an undetermined number of debt and equity securities
as defined in the prospectus. The Company’s authorized capital was 450.0 million shares of common stock and 50.0 million shares of
preferred stock as of December 31, 2024.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 37
The following table presents the changes in the Company’s issued and outstanding shares of common and preferred stock for
the years ended December 31, 2024, 2023 and 2022:
Common
Preferred Stock
Stock
Series E
Series F
Balance at December 31, 2021
318,150
2,695
12,583
Issuance/(forfeiture) of common and restricted shares, net
120
—
—
Issuance of common shares through forward sales public offering, net (forward sales
agreement)
11,402
—
—
Repurchase of common shares
(1,192)
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the Operating
Partnership
4
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT
Partnership
499
—
—
Conversion of Series E Cumulative Convertible shares
10
(9)
—
Forfeiture of Series F shares
—
—
(482)
Balance at December 31, 2022
328,993
2,686
12,101
Issuance/(forfeiture) of common and restricted shares, net
174
—
—
Repurchase of common shares
(623)
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the Operating
Partnership
148
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT
Partnership
323
—
—
Forfeiture of Series F shares
—
—
(233)
Balance at December 31, 2023
329,015
2,686
11,868
Issuance/(forfeiture) of common and restricted shares, net
48
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the Operating
Partnership
170
—
—
Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT
Partnership
1,533
—
—
Conversion of Series E Cumulative Convertible shares
93
(85)
—
Forfeiture of Series F shares
—
—
(1,444)
Balance at December 31, 2024
330,859
2,601
10,424
Common Stock
In July 2021, the Company entered into an ATM sales agreement under which the Company may offer and sell up to 20.0 million
shares of its common stock, from time to time, to or through its sales agents and may enter into separate forward sales agreements to or
through its forward purchasers. Upon entering into the ATM sales agreement, the Company simultaneously terminated the sales agreement
for its prior at-the-market equity offering program, which was entered into in July 2017. As of December 31, 2024, 14.0 million shares were
available for sale under the ATM program.
During the year ended December 31, 2024, the Company entered into the following equity transactions for our common stock:
●Issued less than 0.1 million shares, net of forfeitures, of common stock through the Company’s 1999 Long-Term Incentive Plan
(the “LTIP”);
●Issued 1.7 million shares of common stock upon redemption of OP Units and DownREIT Units, resulting in the forfeiture of 1.4
million Series F Preferred shares; and
●Converted 0.1 million Series E Cumulative Convertible shares into 0.1 million shares of common stock.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 38
Distributions are subject to the approval of the Board of Directors and are dependent upon our strategy, financial condition and
operating results. UDR’s common distributions for the years ended December 31, 2024, 2023, and 2022 totaled $1.70, $1.68, and $1.52 per
share, respectively.
Preferred Stock
The Series E Cumulative Convertible Preferred Stock (“Series E”) has no stated par value and a liquidation preference of $16.61 per
share. Subject to certain adjustments and conditions, each share of the Series E is convertible at any time at the holder’s option into one share
of our common stock prior to a “Special Dividend” declared in 2008 (1.083 shares after the Special Dividend). The holders of the Series E
are entitled to vote on an as-converted basis as a single class in combination with the holders of common stock at any meeting of our
stockholders for the election of directors or for any other purpose on which the holders of common stock are entitled to vote. The Series E
has no stated maturity and is not subject to any sinking fund or any mandatory redemption.
Distributions declared on the Series E for the years ended December 31, 2024, 2023, and 2022 were $1.84, $1.82, and $1.65 per
share, respectively. The Series E is not listed on any exchange. At December 31, 2024 and 2023, a total of 2.6 million and 2.7 million,
respectively, shares of the Series E were outstanding.
UDR is authorized to issue up to 20.0 million shares of the Series F Preferred Stock (“Series F”). The Series F may be purchased by
certain holders of OP Units and DownREIT Units, at a purchase price of $0.0001 per share. OP/DownREIT Unitholders are entitled to
subscribe for and purchase one share of UDR’s Series F for each OP/DownREIT Unit held. During the years ended December 31, 2024 and
2023, 1.4 million and 0.2 million of the Series F shares were forfeited upon the conversion of OP Units and DownREIT Units into Company
common stock, respectively.
At December 31, 2024 and 2023, a total of 10.4 million and 11.9 million shares, respectively, of the Series F were outstanding with
an aggregate purchase value of $1,042 and $1,187, respectively. Holders of the Series F are entitled to one vote for each share of the Series F
they hold, voting together with the holders of our common stock, on each matter submitted to a vote of security holders at a meeting of our
stockholders. The Series F does not entitle its holders to dividends or any other rights, privileges or preferences.
Distribution Reinvestment and Stock Purchase Plan
UDR’s Distribution Reinvestment and Stock Purchase Plan allows common and preferred stockholders the opportunity to purchase,
through the reinvestment of cash dividends and by making additional cash payments, additional shares of UDR’s common stock. During
the year ended December 31, 2024, all shares issued with respect to the plan were acquired through the open market.
10. EMPLOYEE BENEFIT PLANS
In May 2022, the stockholders of UDR approved an amendment and restatement to the LTIP. The LTIP authorizes the granting of
awards which may take the form of options to purchase shares of common stock, stock appreciation rights, restricted stock, dividend
equivalents, partnership interests in the Operating Partnership designated as LTIP Units, performance partnership interests in the Operating
Partnership designated as Performance Units, other stock-based awards, and any other right or interest relating to common stock or cash
incentive awards to Company directors, employees and outside trustees to promote the success of the Company by linking individual’s
compensation via grants of share based payment.
LTIP Units and Performance Units are designed to qualify as “profits interests” in the Operating Partnership for federal income tax
purposes, meaning that initially they are not economically equivalent in value to a share of our common stock, but over time can increase in
value to one-for-one parity with common stock by operation of special tax rules applicable to profits interests. Until and unless such parity is
reached, the value that an executive will realize for a given number of vested LTIP Units or Performance Units is less than the value of an
equal number of shares of our common stock.
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 39
As of December 31, 2024, 35.0 million shares were reserved on an unadjusted basis for issuance upon the grant or exercise of
awards under the LTIP. As of December 31, 2024, there were 11.7 million common shares available for issuance under the LTIP.
The LTIP contains double trigger change of control provisions allowing for the vesting of an award when certain conditions are met
upon qualifying events such as a merger where UDR is not the surviving entity. Upon the death or disability of an award recipient, all
outstanding instruments will vest and all restrictions will lapse. The LTIP specifies that in the event of a capital transaction, which includes
but is not limited to stock dividends, stock splits, extraordinary cash dividends and spin-offs, the number of shares available for grant in
totality or to a single individual is to be adjusted proportionately. The LTIP specifies that when a capital transaction occurs that would dilute
the holder of the stock award, prior grants are to be adjusted such that the recipient is no worse as a result of the capital transaction.
A summary of UDR’s Performance Units, LTIP Units, restricted stock and option activities during the year ended
December 31, 2024 is as follows (shares in thousands):
Unvested Performance Units Outstanding
Performance Units ExercisableUnvested Stock Options Outstanding
Stock Options Exercisable
LTIP Units
Restricted Stock
Weighted
Weighted
Weighted
Weighted
Weighted
Weighted
Average Fair
Average
Average
Average
Average
Average Fair
Value Per
Number of
Exercise
Number of
Exercise
Number of
Exercise
Number of
Exercise
Number of
Value Per
Number
Restricted
Units
Price
Units
Price
Options
Price
Options
Price
LTIP Units
LTIP Unit
of shares
Stock
Balance,
December 31, 2023
3,717
$
41.25
2,278
$
37.53
1,339
$
44.99
19
$
59.90
312
$
50.51
365
$
44.53
Granted
494
38.79
—
—
50
38.64
—
—
678
38.70
190
38.66
Exercised
—
—
—
—
—
—
—
—
—
—
—
—
Vested
(1,652)
38.04
1,652
38.04
—
—
—
—
(209)
43.55
(163)
44.11
Forfeited
(745)
37.50
—
—
(48)
40.49
—
—
(115)
41.68
(83)
41.21
Balance,
December 31, 2024
1,814
$
41.17
3,930
$
37.74
1,341
$
44.91
19
$
59.90
666
$
42.12
309
$
42.09
As of December 31, 2024, the Company had granted 7.1 million shares of restricted stock, 3.6 million LTIP Units, 5.7 million
Performance Units, and 1.4 million stock options under the LTIP.
Stock Option Awards
UDR has granted stock options to our employees and Company directors. Subject to certain conditions, each stock option is
exercisable into one share of UDR common stock.
The total remaining compensation cost on unvested stock options was $2.1 million as of December 31, 2024.
During the year ended December 31, 2024, no stock options were exercised.
The weighted average remaining contractual life on all stock options outstanding as of December 31, 2024 is 7.6 years and such
options have a weighted average exercise price of $44.91.
During the years ended December 31, 2024, 2023 and 2022, we recognized $0.9 million, $0.6 million and $0.7 million, respectively,
of net compensation expense related to outstanding stock options.
Restricted Stock Awards
Restricted stock awards are granted to our employees and Company directors. The restricted stock awards are valued based upon the
closing sales price of UDR common stock on the date of grant. Compensation expense is recorded under either the straight-line method or
graded vesting method over the vesting period, which is generally one to four years. Restricted stock awards earn dividends payable in cash
or dividend reinvestment shares. Some of the restricted
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 40
stock grants are based on the Company’s performance and are subject to adjustment during the initial one to three year performance periods.
During the years ended December 31, 2024, 2023, and 2022, we recognized $5.5 million, $6.4 million, and $5.7 million of compensation
expense, net of capitalization, related to the amortization of restricted stock awards, respectively. The total remaining compensation cost on
unvested restricted stock awards was $4.1 million and had a weighted average remaining contractual life of 1.7 years as of
December 31, 2024.
Unit Awards
Unit awards are granted to our employees and Company directors. Compensation expense is recorded under either the straight-line
method or graded vesting method over the vesting period, which is generally one to four years. Unit awards earn distributions payable in
cash or distribution reinvestment units. Some of the Unit awards are based on the Company’s performance and are subject to adjustment
during the initial one to three year performance periods. During the years ended December 31, 2024, 2023, and 2022, we recognized $20.3
million, $6.2 million and $15.9 million, respectively, of compensation expense, net of capitalization, related to the amortization of the
awards. The total remaining compensation cost on Unit awards was $8.7 million and had a weighted average remaining contractual life of
1.7 years as of December 31, 2024.
Performance Unit Awards
UDR has granted Performance Units to our employees and Company directors. Subject to certain conditions, each Performance Unit
is exercisable into one Operating Partnership common unit. Compensation expense is recorded under either the straight-line method or
graded vesting method over the vesting period, which is generally one to four years. Performance Unit awards earn distributions payable in
cash equivalent to 2% of regular distributions paid on OP Units. Some of the Performance Unit awards are based on the Company’s
performance and are subject to adjustment during the initial one to three year performance periods.
The total remaining compensation cost on unvested Performance Units was $6.7 million as of December 31, 2024.
During the year ended December 31, 2024, no Performance Units were exercised.
The weighted average remaining contractual life on all Performance Units outstanding as of December 31, 2024 is 7.6 years and
such Performance Units have a weighted average exercise price of $44.92.
During the years ended December 31, 2024, 2023 and 2022, we recognized $5.9 million, $19.8 million and $5.2 million,
respectively, of net compensation expense related to outstanding Performance Units.
Short-Term Incentive Compensation
In January 2024, certain officers of the Company were awarded either a restricted stock grant, an STI Unit grant, or an STI
Performance Unit grant, or a combination of all three, under the 2024 Long-Term Incentive Program (“2024 LTI”). All three of the awards
represent short-term incentive compensation for the officers. The restricted stock award was valued for compensation expense purposes
based upon the closing sales price of UDR common stock on the date of grant in accordance with ASC 718, Compensation - Stock
Compensation (“ASC 718”), or $38.64 per share. The STI Unit award was valued for compensation expense purposes based upon the closing
sales price of UDR common stock on the date of grant in accordance with ASC 718, or $38.64 per unit, inclusive of a discount due to
uncertainty associated with the STI Unit reaching parity with the value of a share of UDR common stock. The STI Performance Unit award
was valued for compensation expense purposes on the date of grant in accordance with ASC 718 as determined by the lattice-binomial
option-pricing model based on a Monte Carlo simulation using a volatility factor of 30.0%, an expected life of 5.5 years, an annualized risk-
free rate of 4.04%, and an annual dividend yield of 3.5%, or $8.16 per unit, inclusive of a discount due to uncertainty associated with the STI
Performance Unit reaching parity with the value of a share of UDR common stock. The restricted stock awards, STI Unit awards, and STI
Performance Unit awards are primarily based on the Company’s performance and are subject to adjustment based on performance against
predefined metrics during the one-year performance period.
In January 2023, certain officers of the Company were awarded either a restricted stock grant, an STI Unit grant, or an STI
Performance Unit grant, or a combination of all three, under the 2023 Long-Term Incentive Program
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UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 41
(“2023 LTI”). All three of the awards represent short-term incentive compensation for the officers. The restricted stock award was valued for
compensation expense purposes based upon the closing sales price of UDR common stock on the date of grant in accordance with ASC 718,
or $38.59 per share. The STI Unit award was valued for compensation expense purposes based upon the closing sales price of UDR common
stock on the date of grant in accordance with ASC 718, or $38.59 per unit, inclusive of a discount due to uncertainty associated with the STI
Unit reaching parity with the value of a share of UDR common stock. The STI Performance Unit award was valued for compensation
expense purposes on the date of grant in accordance with ASC 718 as determined by the lattice-binomial option-pricing model based on a
Monte Carlo simulation using a volatility factor of 29.0%, an expected life of 5.5 years, an annualized risk-free rate of 4.09%, and an annual
dividend yield of 3.3%, or $7.86 per unit, inclusive of a discount due to uncertainty associated with the STI Performance Unit reaching parity
with the value of a share of UDR common stock. The restricted stock awards, STI Unit awards, and STI Performance Unit awards are
primarily based on the Company’s performance and are subject to adjustment based on performance against predefined metrics during the
one-year performance period.
In January 2022, certain officers of the Company were awarded STI Unit grants under the 2022 Long-Term Incentive Program
(“2022 LTI”). The STI Unit awards represent short-term incentive compensation for the officers and were valued for compensation expense
purposes based upon the closing sales price of UDR common stock on the date of grant in accordance with ASC 718, or $51.10 per unit,
inclusive of a discount due to uncertainty associated with the STI Unit reaching parity with the value of a share of UDR common stock. The
STI Unit awards are primarily based on the Company’s performance and are subject to adjustment based on performance against predefined
metrics during the one-year performance period.
Long-Term Incentive Compensation
In January 2024, certain officers of the Company were awarded either a restricted stock grant, an LTIP Unit grant, or an LTIP
Performance Unit grant, or a combination of all three, under the 2024 LTI. For all three restricted stock grants, LTIP Unit grants and
Performance Unit grants, thirty percent of the 2024 LTI award is based upon FFO as Adjusted over a one-year period and will vest
fifty percent on the one-year anniversary and fifty percent on the two-year anniversary. Fifteen percent of the 2024 LTI award is based upon
relative FFO as Adjusted over a three-year period and will vest 100% at the end of the three-year performance period. The remaining fifty-
five percent of the 2024 LTI award is based on Total Shareholder Return (“TSR”) as measured relative to comparable apartment REITs over
a three-year period and as measured relative to the Nareit Equity REITs Total Return Index over a three-year period whereby all three will
vest 100% at the end of the three-year performance periods. The portion of the restricted stock grant based upon FFO as Adjusted was valued
for compensation expense purposes based upon the closing sales price of UDR common stock on the date of grant or $38.64 per share.
Because LTIP Units are granted at the maximum potential payout and there is uncertainty associated with an LTIP Unit reaching parity with
the value of a share of UDR common stock, the portion of the LTIP Unit grant based upon the one-year FFO as Adjusted was valued for
compensation expense purposes at $17.72 per unit on the grant date, inclusive of an 8.3% discount, and the portion of the LTIP Unit grant
based upon the three-year FFO as Adjusted was valued for compensation expense purposes at $18.57 per unit on the grant date, inclusive of a
3.9% discount. Because LTIP Performance Units are granted at the maximum potential payout and there is uncertainty associated with an
LTIP Performance Unit reaching parity with the value of a share of UDR common stock, the portion of the LTIP Performance Unit grant
based upon the one-year FFO as Adjusted was valued for compensation expense purposes at $4.22 per unit on the grant date, inclusive of an
8.3% discount, a volatility factor of 30.0%, an expected life of 5.5 years, an annualized risk-free rate of 4.04%, and an annual dividend yield
of 3.5%, and the portion of the LTIP Unit grant based upon the three-year FFO as Adjusted was valued for compensation expense purposes at
$4.37 per unit on the grant date, inclusive of a 3.9% discount, a volatility factor of 28.0%, an expected life of 6.5 years, an annualized risk-
free rate of 4.03%, and an annual dividend yield of 3.5%. The portion of the restricted stock grant based upon relative TSR was valued for
compensation expense purposes at $47.21 per share for the comparable apartment REITs component and $44.86 per share for the Nareit
Equity REITs Total Return Index component on the grant date as determined by a lattice-binomial option-pricing model based on a Monte
Carlo simulation using a volatility factor of 24.0%. The portion of the LTIP Unit grant based upon relative TSR was valued for compensation
expense purposes at $22.86 per unit, inclusive of a 3.9% discount, for the comparable apartment REITs component and $21.74 per unit,
inclusive of a 3.9% discount, for the Nareit Equity REITs Total Return Index component on the grant date as determined by a lattice-
binomial option-pricing model based on a Monte Carlo simulation using a volatility factor of 24.0%. The portion of the LTIP Performance
Unit grant based upon relative TSR
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 42
was valued for compensation expense purposes at $5.96 per unit, inclusive of a 3.9% discount, for the comparable apartment REITs
component and $5.93 per unit, inclusive of a 3.9% discount, for the Nareit Equity REITs Total Return Index component on the grant date as
determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation using a volatility factor of 31.0%, an expected life
of 6.5 years, an annualized risk-free rate of 4.03%, and an annual dividend yield of 3.3%.
In January 2023, certain officers of the Company were awarded either a restricted stock grant, an LTIP Unit grant, or an LTIP
Performance Unit grant, or a combination of all three, under the 2023 LTI. For all three restricted stock grants, LTIP Unit grants and
Performance Unit grants, thirty percent of the 2023 LTI award is based upon FFO as Adjusted over a one-year period and will vest
fifty percent on the one-year anniversary and fifty percent on the two-year anniversary. Fifteen percent of the 2023 LTI award is based upon
relative FFO as Adjusted over a three-year period and will vest 100% at the end of the three-year performance period. The remaining fifty-
five percent of the 2023 LTI award is based on Total Shareholder Return (“TSR”) as measured relative to comparable apartment REITs over
a three-year period and as measured relative to the Nareit Equity REITs Total Return Index over a three-year period whereby all three will
vest 100% at the end of the three-year performance periods. The portion of the restricted stock grant based upon FFO as Adjusted was valued
for compensation expense purposes based upon the closing sales price of UDR common stock on the date of grant or $38.59 per share.
Because LTIP Units are granted at the maximum potential payout and there is uncertainty associated with an LTIP Unit reaching parity with
the value of a share of UDR common stock, the portion of the LTIP Unit grant based upon the one-year FFO as Adjusted was valued for
compensation expense purposes at $17.58 per unit on the grant date, inclusive of an 8.9% discount, and the portion of the LTIP Unit grant
based upon the three-year FFO as Adjusted was valued for compensation expense purposes at $18.45 per unit on the grant date, inclusive of a
4.4% discount. Because LTIP Performance Units are granted at the maximum potential payout and there is uncertainty associated with an
LTIP Performance Unit reaching parity with the value of a share of UDR common stock, the portion of the LTIP Performance Unit grant
based upon the one-year FFO as Adjusted was valued for compensation expense purposes at $4.12 per unit on the grant date, inclusive of an
8.9% discount, a volatility factor of 29.0%, an expected life of 5.5 years, an annualized risk-free rate of 4.09%, and an annual dividend yield
of 3.3%, and the portion of the LTIP Unit grant based upon the three-year FFO as Adjusted was valued for compensation expense purposes at
$4.29 per unit on the grant date, inclusive of a 4.4% discount, a volatility factor of 27.0%, an expected life of 6.5 years, an annualized risk-
free rate of 4.08%, and an annual dividend yield of 3.3%. The portion of the restricted stock grant based upon relative TSR was valued for
compensation expense purposes at $44.85 per share for the comparable apartment REITs component and $43.30 per share for the Nareit
Equity REITs Total Return Index component on the grant date as determined by a lattice-binomial option-pricing model based on a Monte
Carlo simulation using a volatility factor of 36.0%. The portion of the LTIP Unit grant based upon relative TSR was valued for compensation
expense purposes at $21.62 per unit, inclusive of a 4.4% discount, for the comparable apartment REITs component and $20.89 per unit,
inclusive of a 4.4% discount, for the Nareit Equity REITs Total Return Index component on the grant date as determined by a lattice-
binomial option-pricing model based on a Monte Carlo simulation using a volatility factor of 36.0%. The portion of the LTIP Performance
Unit grant based upon relative TSR was valued for compensation expense purposes at $6.02 per unit, inclusive of a 4.4% discount, for the
comparable apartment REITs component and $5.86 per unit, inclusive of a 4.4% discount, for the Nareit Equity REITs Total Return Index
component on the grant date as determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation using a volatility
factor of 16.0%, an expected life of 6.5 years, an annualized risk-free rate of 4.08%, and an annual dividend yield of 3.2%.
In January 2022, certain officers of the Company were awarded either a restricted stock grant or an LTIP Unit grant, or a
combination of both, under the 2022 LTI. For both restricted stock grants and LTIP Unit grants, thirty percent of the 2022 LTI award is based
upon FFO as Adjusted over an approximately one-year period and will vest fifty percent on the one-year anniversary and fifty percent on the
two-year anniversary. Fifteen percent of the 2022 LTI award is based upon relative FFO as Adjusted over a three-year period and will vest
100% at the end of the three-year performance period. The remaining fifty-five percent of the 2022 LTI award is based on Total Shareholder
Return (“TSR”) as measured relative to comparable apartment REITs over a three-year period and as measured relative to the Nareit Equity
REITs Total Return Index over a three-year period whereby both will vest 100% at the end of the three-year performance periods. The
portion of the restricted stock grant based upon FFO as Adjusted was valued for compensation expense purposes based upon the closing sales
price of UDR common stock on the date of grant or $59.90 per share. Because LTIP Units are granted at the maximum potential payout and
there is uncertainty associated with an LTIP Unit reaching parity with the value of a share of UDR common stock, the portion of the LTIP
Unit grant based
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 43
upon the one-year FFO as Adjusted was valued for compensation expense purposes at $27.04 per unit on the grant date, inclusive of a 9.7%
discount, and the portion of the LTIP Unit grant based upon the three-year FFO as Adjusted was valued for compensation expense purposes
at $28.72 per unit on the grant date, inclusive of a 4.1% discount. The portion of the restricted stock grant based upon relative TSR was
valued for compensation expense purposes at $66.83 per share for the comparable apartment REITs component and $68.02 per share for the
Nareit Equity REITs Total Return Index component on the grant date as determined by a lattice-binomial option-pricing model based on a
Monte Carlo simulation using a volatility factor of 33.0%. The portion of the LTIP Unit grant based upon relative TSR was valued for
compensation expense purposes at $31.95 per unit, inclusive of a 4.1% discount, for the comparable apartment REITs component and $32.85
per unit, inclusive of a 4.1% discount, for the Nareit Equity REITs Total Return Index component on the grant date as determined by a
lattice-binomial option-pricing model based on a Monte Carlo simulation using a volatility factor of 33.0%.
Profit Sharing Plan
Our profit sharing plan (the “Plan”) is a defined contribution plan covering all eligible full-time employees. Under the Plan, UDR
makes discretionary profit sharing and matching contributions to the Plan as determined by the Compensation Committee of the Board of
Directors. Aggregate provisions for contributions, both matching and discretionary, which are included in General and administrative on
UDR’s Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022, were $1.0 million, $1.1 million, and
$1.7 million, respectively.
11. INCOME TAXES
For 2024, 2023, and 2022, UDR believes that we have complied with the REIT requirements specified in the Code. As such, the
REIT would generally not be subject to federal income taxes.
For income tax purposes, distributions paid to common stockholders may consist of ordinary income, qualified dividends, capital
gains, unrecaptured section 1250 gains, return of capital, or a combination thereof. Distributions that exceed our current and accumulated
earnings and profits constitute a return of capital rather than taxable income and reduce the stockholder’s basis in their common shares. To
the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common shares, it
generally will be treated as a gain from the sale or exchange of that stockholder’s common shares. Taxable distributions paid per common
share were taxable as follows for the years ended December 31, 2024, 2023 and 2022 (unaudited):
Year Ended December 31,
2024
2023
2022
Ordinary income
$
1.5935 $
1.4384 $
1.3329
Qualified ordinary income
0.0001
0.0001
0.0001
Long-term capital gain
0.0458
0.1697
0.1521
Unrecaptured section 1250 gain
0.0556
0.0318
0.0174
Total
$
1.6950
$
1.6400
$
1.5025
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 44
We have a TRS that is subject to federal and state income taxes. A TRS is a C-corporation which has not elected REIT status and as
such is subject to United States federal and state income tax. The components of the provision for income taxes are as follows for the years
ended December 31, 2024, 2023, and 2022 (dollars in thousands):
Year Ended December 31,
2024
2023
2022
Income tax (benefit)/provision
Current
Federal
$
314
$
69
$
—
State
1,192
2,036
440
Total current
1,506
2,105
440
Deferred
Federal
(103)
26
(27)
State
(476)
23
(16)
Investment tax credit
(48)
(48)
(48)
Total deferred
(627)
1
(91)
Total income tax (benefit)/provision
$
879
$
2,106
$
349
Deferred income taxes are provided for the change in temporary differences between the basis of certain assets and liabilities for
financial reporting purposes and income tax reporting purposes. The expected future tax rates are based upon enacted tax laws. The
components of our TRS deferred tax assets and liabilities are as follows for the years ended December 31, 2024, 2023, and 2022 (dollars in
thousands):
Year Ended December 31,
2024
2023
2022
Deferred tax assets:
Federal and state tax attributes
$
55
$
28
$
157
Other
142
153
64
Total deferred tax assets
197
181
221
Valuation allowance
(27)
(27)
(33)
Net deferred tax assets
170
154
188
Deferred tax liabilities:
Book/tax depreciation and basis
(878)
(881)
(876)
Other
(73)
(76)
(67)
Total deferred tax liabilities
(951)
(957)
(943)
Net deferred tax assets/(liabilities)
$
(781)
$
(803)
$
(755)
Income tax provision/(benefit), net from our TRS differed from the amounts computed by applying the U.S. statutory rate of 21% to
pretax income/(loss) for the years ended December 31, 2024, 2023, and 2022 as follows (dollars in thousands):
Year Ended December 31,
2024
2023
2022
Income tax provision/(benefit)
U.S. federal income tax provision/(benefit)
$
251
$
105
$
(109)
State income tax provision
1,233
2,054
914
Other items
—
—
(409)
Solar credit amortization
(48)
(48)
(48)
ITC basis adjustment
(557)
—
—
Valuation allowance
—
(5)
1
Total income tax provision/(benefit)
$
879
$
2,106
$
349
As of December 31, 2024, the Company had federal net operating loss carryovers (“NOL”) of $23.9 million expiring in 2030
through 2033 and state NOLs of $64.5 million expiring in 2028 through 2031. A portion of these attributes are still available to the subsidiary
REITs, but are carried at a zero effective tax rate.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 45
The Company’s Tax benefit/(provision), net was $(0.9) million, $(2.1) million and $(0.3) million for the years ended December 31,
2024, 2023 and 2022, respectively. The decrease of $1.2 million was primarily attributable to a decrease in state taxes and a decrease in
dispositions for the tax year ended December 31, 2024. GAAP defines a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The financial statements reflect
expected future tax consequences of income tax positions presuming the taxing authorities’ full knowledge of the tax position and all relevant
facts, but without considering time values. GAAP also provides guidance on derecognition, classification, interest and penalties, accounting
for interim periods, disclosure and transition.
The Company evaluates our tax position using a two-step process. First, we determine whether a tax position is more likely than not
(greater than 50 percent probability) to be sustained upon examination, including resolution of any related appeals or litigation processes,
based on the technical merits of the position. The Company will then determine the amount of benefit to recognize and record the amount of
the benefit that is more likely than not to be realized upon ultimate settlement. As of December 31, 2024 and 2023, UDR has no material
unrecognized income tax benefits/(provisions), net.
The Company files income tax returns in federal and various state and local jurisdictions. The tax years 2022 through 2024 remain
open to examination by the major taxing jurisdictions to which the Company is subject.
12. NONCONTROLLING INTERESTS
Redeemable Noncontrolling Interests in the Operating Partnership and DownREIT Partnership
Interests in the Operating Partnership and the DownREIT Partnership held by limited partners are represented by OP Units and
DownREIT Units, respectively. The income is allocated to holders of OP Units/DownREIT Units based upon net income attributable to
common stockholders and the weighted average number of OP Units/DownREIT Units outstanding to total common shares plus OP
Units/DownREIT Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to
noncontrolling interests in accordance with the terms of the partnership agreements of the Operating Partnership and the DownREIT
Partnership.
Limited partners of the Operating Partnership and the DownREIT Partnership have the right to require such partnership to redeem
all or a portion of the OP Units/DownREIT Units held by the limited partner at a redemption price equal to and in the form of the Cash
Amount (as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable), provided that
such OP Units/DownREIT Units have been outstanding for at least one year, subject to certain exceptions. UDR, as the general partner of the
Operating Partnership and the DownREIT Partnership may, in its sole discretion, purchase the OP Units/DownREIT Units by paying to the
limited partner either the Cash Amount or the REIT Share Amount (generally one share of common stock of the Company for each OP
Unit/DownREIT Unit), as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable.
Accordingly, the Company records the OP Units/DownREIT Units outside of permanent equity and reports the OP Units/DownREIT Units at
their redemption value using the Company’s stock price at each balance sheet date.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 46
The following table sets forth redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership for
the years ended December 31, 2024 and 2023 (dollars in thousands):
Year Ended December 31,
2024
2023
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership at
beginning of year
$
961,087 $
839,850
Mark-to-market adjustment to redeemable noncontrolling interests in the Operating Partnership
and DownREIT Partnership
148,362
(10,211)
OP Units issued for real estate, net
—
141,359
Conversion of OP Units/DownREIT Units to Common Stock or Cash
(73,196)
(30,569)
Net income/(loss) attributable to redeemable noncontrolling interests in the Operating Partnership
and DownREIT Partnership
6,246
30,104
Distributions to redeemable noncontrolling interests in the Operating Partnership and DownREIT
Partnership
(52,250)
(39,072)
Redeemable Long-Term and Short-Term Incentive Plan Units
27,175
29,857
Allocation of other comprehensive income/(loss)
(69)
(231)
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership
at end of year
$
1,017,355
$
961,087
Noncontrolling Interests
Noncontrolling interests represent interests of unrelated partners in certain consolidated affiliates, and are presented as part of equity
on the Consolidated Balance Sheets since these interests are not redeemable. Net (income)/loss attributable to noncontrolling interests was
less than $(0.1) million, less than $(0.1) million, and less than $(0.1) million during the years ended December 31, 2024, 2023, and 2022,
respectively.
13. FAIR VALUE OF DERIVATIVES AND FINANCIAL INSTRUMENTS
Fair value is based on the price that would be received to sell an asset or the exit price that would be paid to transfer a liability in an
orderly transaction between market participants at the measurement date. A three-level valuation hierarchy prioritizes observable and
unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
●Level 1 — Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
●Level 2 — Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in
active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are
observable or can be corroborated with observable market data.
●Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use
significant unobservable inputs.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 47
The estimated fair values of the Company’s financial instruments either recorded or disclosed on a recurring basis as of
December 31, 2024 and 2023 are summarized as follows (dollars in thousands):
Fair Value at December 31, 2024, Using
Total
Quoted
Carrying
Prices in
Amount in
Active
Statement of
Markets
Significant
Financial
Fair Value
for Identical
Other
Significant
Position at
Estimate at
Assets or
Observable
Unobservable
December 31,
December 31,
Liabilities
Inputs
Inputs
2024 (a)
2024
(Level 1)
(Level 2)
(Level 3)
Description:
Notes receivable, net (b)
$
247,849
$
243,546
$
—
$
—
$
243,546
Equity securities (c)
1,281
1,281
1,281
—
—
Derivatives - Interest rate contracts (d)
3,227
3,227
—
3,227
—
Total assets
$
252,357
$
248,054
$
1,281
$
3,227
$
243,546
Secured debt instruments - fixed rate: (e)
Mortgage notes payable
$
1,115,999
$
1,039,482
$
—
$
—
$
1,039,482
Secured debt instruments - variable rate: (e)
Tax-exempt secured notes payable
27,000
27,000
—
—
27,000
Unsecured debt instruments: (e)
Working capital credit facility
9,361
9,361
—
—
9,361
Commercial paper program
289,900
289,900
—
—
289,900
Unsecured notes
4,408,376
3,897,187
—
—
3,897,187
Total liabilities
$
5,850,636
$
5,262,930
$
—
$
—
$
5,262,930
Redeemable noncontrolling interests in the
Operating Partnership and DownREIT Partnership
(f)
$
1,017,355
$
1,017,355
$
—
$
1,017,355
$
—
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 48
Fair Value at December 31, 2023, Using
Total
Quoted
Carrying
Prices in
Amount in
Active
Statement of
Markets
Significant
Financial
Fair Value
for Identical
Other
Significant
Position at
Estimate at
Assets or
Observable
Unobservable
December 31,
December 31,
Liabilities
Inputs
Inputs
2023 (a)
2023
(Level 1)
(Level 2)
(Level 3)
Description:
Notes receivable, net (b)
$
228,825
$
222,755
$
—
$
—
$
222,755
Equity securities (c)
7,210
7,210
7,210
—
—
Derivatives - Interest rate contracts (d)
10,103
10,103
—
10,103
—
Total assets
$
246,138
$
240,068
$
7,210
$
10,103
$
222,755
Secured debt instruments - fixed rate: (e)
Mortgage notes payable
$
1,215,228
$
1,124,140
$
—
$
—
$
1,124,140
Secured debt instruments - variable rate: (e)
Mortgage notes payable
40,017
40,017
—
—
40,017
Tax-exempt secured notes payable
27,000
27,000
—
—
27,000
Unsecured debt instruments: (e)
Working capital credit facility
4,593
4,593
—
—
4,593
Commercial paper program
408,075
408,075
—
—
408,075
Unsecured notes
4,129,010
3,611,697
—
—
3,611,697
Total liabilities
$
5,823,923
$
5,215,522
$
—
$
—
$
5,215,522
Redeemable noncontrolling interests in the Operating
Partnership and DownREIT Partnership (f)
$
961,087
$
961,087
$
—
$
961,087
$
—
(a) Certain balances include fair market value adjustments and exclude deferred financing costs.
(b) See Note 2, Significant Accounting Policies. Note receivables, net includes any accrued and unpaid interest, as applicable, and allowance
for credit losses.
(c) The Company holds a direct investment in a publicly traded real estate technology company, SmartRent. The investment is valued at the
market price on December 31, 2024 and 2023. The Company currently classifies the investment as Level 1 in the fair value hierarchy.
(d) See Note 14, Derivatives and Hedging Activity.
(e) See Note 7, Secured and Unsecured Debt, Net.
(f)
See Note 12, Noncontrolling Interests.
There were no transfers into or out of any of the levels of the fair value hierarchy during the year ended December 31, 2024 and
2023.
Financial Instruments Carried at Fair Value
The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed
cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are
based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The fair values of
interest rate swaps and caps are determined using the market standard methodology of discounting the future expected cash receipts that
would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected
receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 49
The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective
counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of
nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings,
thresholds, mutual puts, and guarantees.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair
value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit
spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2024 and 2023, the Company has
assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has
determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has
determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. In conjunction with the FASB’s
fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial
instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership have a redemption feature and are
marked to their redemption value. The redemption value is based on the fair value of the Company’s common stock at the redemption date,
and therefore, is calculated based on the fair value of the Company’s common stock at the balance sheet date. Since the valuation is based on
observable inputs such as quoted prices for similar instruments in active markets, redeemable noncontrolling interests in the Operating
Partnership and DownREIT Partnership are classified as Level 2.
Financial Instruments Not Carried at Fair Value
At December 31, 2024, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaids, real estate taxes
payable, accrued interest payable, security deposits and prepaid rent, distributions payable and accounts payable approximated their carrying
values because of the short term nature of these instruments. The estimated fair values of other financial instruments, which includes notes
receivable and debt instruments, are classified in Level 3 of the fair value hierarchy due to the significant unobservable inputs that are
utilized in their respective valuations.
14. DERIVATIVES AND HEDGING ACTIVITY
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company
principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The
Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration
of its debt funding and through the use of derivative financial instruments. Specifically, the Company may enter into derivative financial
instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash
amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences
in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally
related to the Company’s investments and borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to
interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk
management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in
exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above
the strike rate on the contract in exchange for an up-front premium.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 50
The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in Accumulated other
comprehensive income/(loss), net on the Consolidated Balance Sheets and subsequently reclassified into earnings in the period that the
hedged forecasted transaction affects earnings. During the years ended December 31, 2024, 2023, and 2022, such derivatives were used to
hedge the variable cash flows associated with existing variable-rate debt.
Amounts reported in Accumulated other comprehensive income/(loss), net on the Consolidated Balance Sheets related to derivatives
that will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Through December 31, 2025,
the Company estimates that an additional $2.3 million will be reclassified as a decrease to Interest expense.
As of December 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow
hedges of interest rate risk (dollars in thousands):
Number of
Product
Instruments
Notional
Interest rate swaps and caps
3
$
194,880
During the year ended December 31, 2024, the Company entered into and settled three treasury lock arrangements to hedge all the
interest rate risk associated with the $300.0 million senior medium-term notes issued in August 2024. This resulted in a deferred gain of $4.1
million which is recorded in Accumulated other comprehensive income/(loss), net on the Consolidated Balance Sheets and will be
reclassified into earnings over the life of the debt issued.
Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate
movements and other identified risks but do not meet the strict hedge accounting requirements of GAAP. Changes in the fair value of
derivatives not designated in hedging relationships are recorded directly in earnings. As of December 31, 2024, no derivatives not designated
as hedges were held by the Company.
Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the
Consolidated Balance Sheets as of December 31, 2024 and 2023 (dollars in thousands):
Asset Derivatives
Liability Derivatives
(included in Other assets)
(included in Other liabilities)
Fair Value at:
Fair Value at:
December 31,
December 31,
December 31,
December 31,
2024
2023
2024
2023
Derivatives designated as hedging instruments:
Interest rate products
$
3,227
$
10,103
$
—
$
—
Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statements of Operations
The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations
for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands):
Gain/(Loss) Recognized in
Gain/(Loss) Reclassified
Interest expense
Unrealized holding gain/(loss)
from Accumulated OCI into
(Amount Excluded from
Recognized in OCI
Interest expense
Effectiveness Testing)
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
Derivatives in Cash Flow Hedging
Relationships
2024
2023
2022
2024
2023
2022
2024
2023
2022
Interest rate products
$ 5,988
$ 3,872
$
14,489
$ 7,333
$ 7,533
$ 998
$
—
$
—
$
—
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 51
Year Ended
December 31,
2024
2023
2022
Total amount of Interest expense presented on the Consolidated Statements of
Operations
$
195,712
$
180,866
$
155,900
Credit-risk-related Contingent Features
The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in
default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on
the indebtedness.
The Company has certain agreements with some of its derivative counterparties that contain a provision where, in the event of
default by the Company or the counterparty, the right of setoff may be exercised. Any amount payable to one party by the other party may be
reduced by its setoff against any amounts payable by the other party. Events that give rise to default by either party may include, but are not
limited to, the failure to pay or deliver payment under the derivative agreement, the failure to comply with or perform under the derivative
agreement, bankruptcy, a merger without assumption of the derivative agreement, or in a merger, a surviving entity’s creditworthiness is
materially weaker than the original party to the derivative agreement.
Tabular Disclosure of Offsetting Derivatives
The Company has elected not to offset derivative positions on the consolidated financial statements. The table below present the
effect on its financial position had the Company made the election to offset its derivative positions as of December 31, 2024 and 2023
(dollars in thousands):
Gross
Net Amounts of
Gross Amounts Not Offset
Amounts
Assets
in the Consolidated
Gross
Offset in the
Presented in the
Balance Sheets
Amounts of
Consolidated
Consolidated
Cash
Recognized
Balance
Balance Sheets
Financial
Collateral
Offsetting of Derivative Assets
Assets
Sheets
(a)
Instruments
Received
Net Amount
December 31, 2024
$
3,227
$
—
$
3,227
$
—
$
—
$
3,227
December 31, 2023
$
10,103
$
—
$
10,103
$
—
$
—
$
10,103
(a) Amounts reconcile to the aggregate fair value of derivative assets in the “Tabular Disclosure of Fair Values of Derivative
Instruments on the Consolidated Balance Sheets” located in this footnote.
15. COMMITMENTS AND CONTINGENCIES
Commitments
The following summarizes the Company’s commitments at December 31, 2024 (dollars in thousands):
Number
UDR's
UDR's Remaining
Properties
Investment (a)
Commitment
Real estate commitments
Wholly-owned — redevelopment (b)
10
$
68,871
$
84,910
Other unconsolidated investments:
Real estate technology and sustainability investments (c)
-
61,112
49,888
Total
$
129,983
$
134,798
(a) Represents UDR’s investment as of December 31, 2024.
(b) Projects consist of unit renovations and/or renovation of related common area amenities.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 52
(c) As of December 31, 2024, the investments were recorded in either Investment in and advances to unconsolidated joint ventures, net or
Other Assets on the Consolidated Balance Sheets.
Contingencies
Litigation and Legal Matters
The Company is subject to various legal proceedings and claims arising in the ordinary course of business. The Company cannot
determine the ultimate liability with respect to such legal proceedings and claims at this time. The Company believes that such liability, to the
extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of
operations or cash flows.
We have been named as a defendant in a number of cases alleging antitrust violations by RealPage, Inc., a vendor providing revenue
management software products, and various owners or managers of multifamily housing, which cases have been consolidated in the United
States Court for the Middle District of Tennessee with the Second Amended Complaint filed September 7, 2023 and cases with similar
allegations that have been filed by the District of Columbia on November 1, 2023 in the Superior Court of the District of Columbia and the
State of Maryland on January 15, 2025 in the Circuit Court for Prince George’s County, Maryland. These cases seek injunctive relief as well
as monetary damages. We believe that there are defenses, both factual and legal, to the allegations in such cases and we intend to vigorously
defend such suits. We are also aware that governmental investigations regarding antitrust matters in the multifamily industry are occurring
and the federal government and various state attorneys general have filed a civil lawsuit against RealPage, Inc. and certain owners or
managers of multifamily housing to which we are not a party. As all of the above proceedings are in the early stages, it is not possible for us
to predict the outcome or to estimate the amount of loss, if any, that may be associated with an adverse decision in any of these cases or any
case that may be brought based on the investigations. As a result, as of December 31, 2024, there is no liability recorded.
16. REPORTABLE SEGMENTS
GAAP guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”)
to decide how to allocate resources and for purposes of assessing such segments’ performance. UDR’s CODM is comprised of our Chairman
and Chief Executive Officer, President, Chief Investment Officer and Chief Financial Officer, and Chief Operating Officer, who use several
generally accepted industry financial measures to assess the performance of the business for our reportable operating segments.
UDR owns and operates multifamily apartment communities that generate rental and other property related income through the
leasing of apartment homes to a diverse base of tenants. The primary financial measures for UDR’s apartment communities are rental income
and net operating income (“NOI”). NOI is used to evaluate operating performance because it provides relevant and useful information by
reflecting only rental income and rental expenses that are incurred at the property level and presenting it on an unlevered basis. Rental
income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. NOI is defined as rental income less direct
property rental expenses. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative
and marketing, which align with the segment-level information that is regularly provided to our CODM. Excluded from NOI is property
management expense, which is calculated as 3.25% of property revenue, and land rent. Property management expense covers costs directly
related to consolidated property operations, inclusive of corporate management, regional supervision, accounting and other costs. UDR’s
CODM utilizes NOI as the key measure of segment profit or loss.
UDR’s two reportable segments are Same-Store Communities and Non-Mature Communities/Other:
●Same-Store Communities represent those communities acquired, developed, and stabilized prior to January 1, 2023 and held as
of December 31, 2024. A comparison of operating results from the prior year is meaningful as these communities were owned
and had stabilized occupancy and operating expenses as of the beginning of the prior year, there is no plan to conduct substantial
redevelopment activities, and the community is not classified as held for disposition within the current year. A community is
considered to have stabilized occupancy once it achieves 90% occupancy for at least three consecutive months.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 53
●Non-Mature Communities/Other represent those communities that do not meet the criteria to be included in Same-Store
Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment
components of mixed use properties.
Management evaluates the performance of each of our apartment communities on a Same-Store Community and Non-Mature
Community/Other basis, as well as individually and geographically. This is consistent with the aggregation criteria under GAAP as each of
our apartment communities generally has similar economic characteristics, facilities, services, and tenants. Therefore, the Company’s
reportable segments have been aggregated by geography in a manner identical to that which is provided to the CODM.
All revenues are from external customers and no single tenant or related group of tenants contributed 10% or more of UDR’s total
revenues during the years ended December 31, 2024, 2023, and 2022.
The following is a description of the principal streams from which the Company generates its revenue:
Lease Revenue
Lease revenue related to leases is recognized on an accrual basis when due from residents or tenants in accordance with ASC
842, Leases. Rental payments are generally due on a monthly basis and recognized on a straight-line basis over the noncancellable lease term
because collection of the lease payments was probable at lease commencement, inclusive of any periods covered by an option to extend the
lease if the lessee is reasonably certain to exercise that option. In addition, in circumstances where a lease incentive is provided to tenants,
the incentive is recognized as a reduction of lease revenue on a straight-line basis over the lease term.
Lease revenue also includes all pass-through revenue from retail and residential leases and common area maintenance
reimbursements from retail leases. These services represent non-lease components in a contract as the Company transfers a service to the
lessee other than the right to use the underlying asset. The Company has elected the practical expedient under the leasing standard to not
separate lease and non-lease components from its resident and retail lease contracts as the timing and pattern of revenue recognition for the
non-lease component and related lease component are the same and the combined single lease component would be classified as an operating
lease.
Other Revenue
Other revenue is generated by services provided by the Company to its retail and residential tenants and other unrelated third
parties. Revenue is measured based on consideration specified in contracts with customers. The Company recognizes revenue when it
satisfies a performance obligation by providing the services specified in a contract to the customer. These fees are generally recognized as
earned.
Joint venture management and other fees
The Joint venture management and other fees revenue consists of management fees charged to our equity method joint ventures per
the terms of contractual agreements and other fees. Joint venture fee revenue is recognized monthly as the management services are provided
and the fees are earned or upon a transaction whereby the Company earns a fee. Joint venture management and other fees are not allocable to
a specific reportable segment or segments.
The following table details rental income and NOI for UDR’s reportable segments for the years ended December 31, 2024, 2023,
and 2022, and reconciles NOI to Net income/(loss) attributable to UDR, Inc. on the Consolidated Statements of Operations (dollars in
thousands):
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 54
Year Ended December 31, (a)
2024
2023
2022
Reportable apartment home segment lease revenue
Same-Store Communities
West Region
$
476,057
$
463,889
$
441,428
Mid-Atlantic Region
311,666
301,841
287,123
Northeast Region
308,717
299,950
271,632
Southeast Region
226,430
226,448
210,026
Southwest Region
149,850
151,410
143,616
Non-Mature Communities/Other
135,199
126,972
111,011
Total segment and consolidated lease revenue
$
1,607,919
$
1,570,510
$
1,464,836
Reportable apartment home segment other revenue
Same-Store Communities
West Region
$
12,104
$
11,672
$
11,899
Mid-Atlantic Region
13,725
11,772
10,867
Northeast Region
8,075
7,343
7,033
Southeast Region
11,069
9,411
8,822
Southwest Region
7,081
6,334
5,820
Non-Mature Communities/Other
3,552
3,616
3,087
Total segment and consolidated other revenue
$
55,606
$
50,148
$
47,528
Total reportable apartment home segment rental income
Same-Store Communities
West Region
$
488,161
$
475,561
$
453,327
Mid-Atlantic Region
325,391
313,613
297,990
Northeast Region
316,792
307,293
278,665
Southeast Region
237,499
235,859
218,848
Southwest Region
156,931
157,744
149,436
Non-Mature Communities/Other
138,751
130,588
114,098
Total segment and consolidated rental income
$
1,663,525
$
1,620,658
$
1,512,364
Total reportable apartment home segment operating expenses
Same-Store Communities
Personnel
$
67,595
$
60,918
$
59,919
Utilities
67,112
65,133
58,771
Repair and maintenance
93,779
89,210
80,482
Administrative and marketing
33,922
30,123
27,947
Real estate taxes
186,848
183,546
177,354
Insurance
23,130
24,013
26,380
Non-Mature Communities/Other (b)
52,316
52,945
41,119
Total segment and consolidated operating expenses
$
524,702
$
505,888
$
471,972
Reportable apartment home segment NOI
Same-Store Communities
West Region
$
361,734
$
355,089
$
337,946
Mid-Atlantic Region
223,882
216,435
205,221
Northeast Region
205,519
202,168
180,724
Southeast Region
162,216
162,184
149,002
Southwest Region
99,037
101,251
94,520
Non-Mature Communities/Other
86,435
77,643
72,979
Total segment and consolidated NOI
1,138,823
1,114,770
1,040,392
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 55
Year Ended December 31, (a)
2024
2023
2022
Reconciling items:
Joint venture management and other fees
8,317
6,843
5,022
Property management
(54,065)
(52,671)
(49,152)
Other operating expenses
(30,416)
(20,222)
(17,493)
Real estate depreciation and amortization
(676,068)
(676,419)
(665,228)
General and administrative
(84,305)
(69,929)
(64,144)
Casualty-related (charges)/recoveries, net
(15,179)
(3,138)
(9,733)
Other depreciation and amortization
(19,405)
(15,419)
(14,344)
Gain/(loss) on sale of real estate owned
16,867
351,193
25,494
Income/(loss) from unconsolidated entities
20,235
4,693
4,947
Interest expense
(195,712)
(180,866)
(155,900)
Interest income and other income/(expense), net
(12,336)
17,759
(6,933)
Tax (provision)/benefit, net
(879)
(2,106)
(349)
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership
and DownREIT Partnership
(6,246)
(30,104)
(5,613)
Net (income)/loss attributable to noncontrolling interests
(46)
(31)
(42)
Net income/(loss) attributable to UDR, Inc.
$
89,585
$
444,353
$
86,924
(a) Same-Store Community population consisted of 51,428 apartment homes.
(b) Non-Mature Communities/Other operating expenses include costs to manage recently acquired, developed and redeveloped
communities, and the non-apartment components of mixed-use properties.
The following table details the assets of UDR’s reportable segments as of December 31, 2024 and 2023 (dollars in thousands):
December 31, December 31,
2024
2023
Reportable apartment home segment assets:
Same-Store Communities (a):
West Region
$
4,431,522
$
4,366,038
Mid-Atlantic Region
3,258,192
3,205,036
Northeast Region
3,720,811
3,672,720
Southeast Region
1,635,360
1,589,605
Southwest Region
1,348,899
1,330,063
Non-Mature Communities/Other
1,818,579
1,860,397
Total segment assets
16,213,363
16,023,859
Accumulated depreciation
(6,901,026)
(6,267,830)
Total segment assets — net book value
9,312,337
9,756,029
Reconciling items:
Cash and cash equivalents
1,326
2,922
Restricted cash
34,101
31,944
Notes receivable, net
247,849
228,825
Investment in and advances to unconsolidated joint ventures, net
917,483
952,934
Operating lease right-of-use assets
186,997
190,619
Other assets
197,493
209,969
Total consolidated assets
$
10,897,586
$
11,373,242
(a) Same-Store Community population consisted of 51,428 apartment homes.
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2024
F - 56
Markets included in the above geographic segments are as follows:
i.
West Region — Orange County, San Francisco, Seattle, Monterey Peninsula, Los Angeles, Other Southern California and
Portland
ii.
Mid-Atlantic Region — Metropolitan D.C., Baltimore and Richmond
iii.
Northeast Region — Boston, New York and Philadelphia
iv.
Southeast Region — Tampa, Orlando, Nashville and Other Florida
v.
Southwest Region — Dallas, Austin and Denver
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Table of Contents
S - 1
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED
DECEMBER 31, 2024
(In thousands)
Gross Amount at Which
Initial Costs
Carried at Close of Period
Costs of
Improvements
Capitalized
Land and
Buildings
Total Initial
Subsequent
Land and
Buildings &
Total
Land
and
Acquisition
to Acquisition
Land
Buildings
Carrying
Accumulated
Date of
Date
Encumbrances
Improvements
Improvements
Costs
Costs
Improvements
Improvements
Value
Depreciation
Construction(a)
Acquired
WEST REGION
Harbor at Mesa Verde
$
—
$
20,476
$
28,538
$
49,014
$
30,542
$
22,957
$
56,599
$
79,556
$
46,678
1965/2003
Jun-03
27 Seventy Five Mesa Verde
—
99,329
110,644
209,973
118,025
117,778
210,220
327,998
181,319
1979/2013
Oct-04
Huntington Vista
—
8,055
22,486
30,541
18,784
9,590
39,735
49,325
32,272
1970
Jun-03
Missions at Back Bay
—
229
14,129
14,358
6,343
11,141
9,560
20,701
7,176
1969
Dec-03
Eight 80 Newport Beach - North
—
62,516
46,082
108,598
61,909
71,693
98,814
170,507
80,443
1968/2000/2016
Oct-04
Eight 80 Newport Beach - South
—
58,785
50,067
108,852
57,747
63,850
102,749
166,599
76,465
1968/2000/2016
Mar-05
Beach & Ocean
—
12,878
—
12,878
41,800
13,587
41,091
54,678
24,345
2014
Aug-11
The Residences at Bella Terra
—
25,000
—
25,000
133,312
25,992
132,320
158,312
82,868
2013
Oct-11
The Residences at Pacific City
—
78,085
—
78,085
283,690
79,492
282,283
361,775
122,452
2018
Jan-14
ORANGE COUNTY, CA
—
365,353
271,946
637,299
752,152
416,080
973,371
1,389,451
654,018
2000 Post Street
—
9,861
44,578
54,439
48,013
14,748
87,704
102,452
59,840
1987/2016
Dec-98
Birch Creek
—
4,365
16,696
21,061
13,215
1,729
32,547
34,276
23,098
1968
Dec-98
Highlands Of Marin
—
5,996
24,868
30,864
33,352
8,436
55,780
64,216
45,364
1991/2010
Dec-98
Marina Playa
—
6,224
23,916
30,140
17,613
1,598
46,155
47,753
31,678
1971
Dec-98
River Terrace
—
22,161
40,137
62,298
11,569
23,100
50,767
73,867
41,466
2005
Aug-05
CitySouth
—
14,031
30,537
44,568
44,137
16,868
71,837
88,705
60,335
1972/2012
Nov-05
Bay Terrace
—
8,545
14,458
23,003
11,103
11,721
22,385
34,106
16,145
1962
Oct-05
Highlands of Marin Phase II
—
5,353
18,559
23,912
11,993
5,790
30,115
35,905
23,785
1968/2010
Oct-07
Edgewater
—
30,657
83,872
114,529
15,389
30,862
99,056
129,918
73,157
2007
Mar-08
Almaden Lake Village
27,000
594
42,515
43,109
15,017
1,248
56,878
58,126
41,289
1999
Jul-08
388 Beale
—
14,253
74,104
88,357
26,863
14,781
100,439
115,220
62,799
1999
Apr-11
Channel @ Mission Bay
—
23,625
-
23,625
136,257
24,511
135,371
159,882
83,741
2014
Sep-10
5421 at Dublin Station
—
8,922
-
8,922
118,436
8,931
118,427
127,358
16,717
2022
Sep-16
HQ
—
19,938
65,816
85,754
645
19,942
66,457
86,399
9,207
2021
Sep-22
Residences at Lake Merritt
—
8,664
56,876
65,540
971
8,664
57,847
66,511
3,609
2023
Dec-23
SAN FRANCISCO, CA
27,000
183,189
536,932
720,121
504,573
192,929
1,031,765
1,224,694
592,230
Crowne Pointe
—
2,486
6,437
8,923
12,732
3,354
18,301
21,655
14,494
1987
Dec-98
Hilltop
—
2,174
7,408
9,582
8,472
3,262
14,792
18,054
12,227
1985
Dec-98
The Kennedy
—
6,179
22,307
28,486
7,085
6,463
29,108
35,571
22,341
2005
Nov-05
Hearthstone at Merrill Creek
—
6,848
30,922
37,770
12,529
7,628
42,671
50,299
30,855
2000
May-08
Island Square
—
21,284
89,389
110,673
17,118
22,046
105,745
127,791
73,317
2007
Jul-08
elements too
—
27,468
72,036
99,504
27,111
30,528
96,087
126,615
81,107
2010
Feb-10
989elements
—
8,541
45,990
54,531
9,782
8,724
55,589
64,313
37,749
2006
Dec-09
Lightbox
—
6,449
38,884
45,333
2,373
6,504
41,202
47,706
24,695
2014
Aug-14
Ashton Bellevue
—
8,287
124,939
133,226
7,434
8,493
132,167
140,660
56,238
2009
Oct-16
TEN20
—
5,247
76,587
81,834
7,723
5,313
84,244
89,557
36,359
2009
Oct-16
Milehouse
—
5,976
63,041
69,017
2,526
6,073
65,470
71,543
32,054
2016
Nov-16
CityLine
—
11,220
85,787
97,007
2,045
11,317
87,735
99,052
41,927
2016
Jan-17
CityLine II
—
3,723
56,843
60,566
712
3,728
57,550
61,278
23,620
2018
Jan-19
Brio
—
21,780
147,188
168,968
5,520
21,870
152,618
174,488
31,524
2020
Jul-21
SEATTLE, WA
—
137,662
867,758
1,005,420
123,162
145,303
983,279
1,128,582
518,507
Boronda Manor
—
1,946
8,982
10,928
14,121
3,507
21,542
25,049
15,521
1979
Dec-98
Garden Court
—
888
4,188
5,076
8,339
1,873
11,542
13,415
8,356
1973
Dec-98
Cambridge Court
—
3,039
12,883
15,922
22,077
5,994
32,005
37,999
24,073
1974
Dec-98
Laurel Tree
—
1,304
5,115
6,419
9,228
2,563
13,084
15,647
10,097
1977
Dec-98
The Pointe At Harden Ranch
—
6,388
23,854
30,242
39,634
10,589
59,287
69,876
43,366
1986
Dec-98
The Pointe At Northridge
—
2,044
8,028
10,072
14,739
3,891
20,920
24,811
15,600
1979
Dec-98
The Pointe At Westlake
—
1,329
5,334
6,663
10,111
2,456
14,318
16,774
10,239
1975
Dec-98
MONTEREY PENINSULA, CA
—
16,938
68,384
85,322
118,249
30,873
172,698
203,571
127,252
Rosebeach
—
8,414
17,449
25,863
9,575
9,108
26,330
35,438
21,492
1970
Sep-04
Tierra Del Rey
—
39,586
36,679
76,265
13,067
40,213
49,119
89,332
36,285
1998
Dec-07
The Westerly
—
48,182
102,364
150,546
52,811
51,688
151,669
203,357
110,080
1993/2013
Sep-10
Jefferson at Marina del Rey
—
55,651
—
55,651
106,461
62,833
99,279
162,112
79,222
2008
Sep-07
LOS ANGELES, CA
—
151,833
156,492
308,325
181,914
163,842
326,397
490,239
247,079
Verano at Rancho Cucamonga Town Square
—
13,557
3,645
17,202
67,232
24,761
59,673
84,434
54,351
2006
Oct-02
Windemere at Sycamore Highland
—
5,810
23,450
29,260
12,749
6,580
35,429
42,009
27,548
2001
Nov-02
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2024
(In thousands)
S - 2
Gross Amount at Which
Initial Costs
Carried at Close of Period
Costs of
Improvements
Capitalized
Land and
Buildings
Total Initial
Subsequent
Land and
Buildings &
Total
Land
and
Acquisition
to Acquisition
Land
Buildings
Carrying
Accumulated
Date of
Date
Encumbrances
Improvements
Improvements
Costs
Costs
Improvements
Improvements
Value
Depreciation
Construction(a)
Acquired
Strata
—
14,278
84,242
98,520
3,296
14,500
87,316
101,816
25,354
2010
Nov-19
OTHER SOUTHERN CA
—
33,645
111,337
144,982
83,277
45,841
182,418
228,259
107,253
Tualatin Heights
—
3,273
9,134
12,407
12,910
4,543
20,774
25,317
16,781
1989
Dec-98
Hunt Club
—
6,014
14,870
20,884
11,151
6,998
25,037
32,035
21,142
1985
Sep-04
PORTLAND, OR
—
9,287
24,004
33,291
24,061
11,541
45,811
57,352
37,923
TOTAL WEST REGION
27,000
897,907
2,036,853
2,934,760
1,787,388
1,006,409
3,715,739
4,722,148
2,284,262
MID-ATLANTIC REGION
Dominion Middle Ridge
—
3,311
13,283
16,594
19,455
4,763
31,286
36,049
24,487
1990
Jun-96
Dominion Lake Ridge
—
2,366
8,387
10,753
12,396
3,345
19,804
23,149
16,778
1987
Feb-96
Presidential Greens
—
11,238
18,790
30,028
21,753
11,958
39,823
51,781
31,198
1938
May-02
The Whitmore
—
6,418
13,411
19,829
29,069
7,930
40,968
48,898
35,385
1962/2008
Apr-02
Ridgewood
—
5,612
20,086
25,698
19,353
6,721
38,330
45,051
31,042
1988
Aug-02
Waterside Towers
—
13,001
49,657
62,658
42,807
51,488
53,977
105,465
42,737
1971
Dec-03
Wellington Place at Olde Town
—
13,753
36,059
49,812
25,279
15,244
59,847
75,091
50,574
1987/2008
Sep-05
Andover House
—
183
59,948
60,131
9,506
356
69,281
69,637
50,095
2004
Mar-07
Sullivan Place
—
1,137
103,676
104,813
24,908
2,212
127,509
129,721
94,334
2007
Dec-07
Delancey at Shirlington
—
21,606
66,765
88,371
12,431
21,714
79,088
100,802
57,179
2006/2007
Mar-08
View 14
—
5,710
97,941
103,651
10,122
5,788
107,985
113,773
69,892
2009
Jun-11
Capitol View on 14th
—
31,393
—
31,393
100,675
31,505
100,563
132,068
64,056
2013
Sep-07
Domain College Park
—
7,300
—
7,300
63,449
7,578
63,171
70,749
39,476
2014
Jun-11
1200 East West
—
9,748
68,022
77,770
7,086
10,014
74,842
84,856
35,906
2010
Oct-15
Courts at Huntington Station
—
27,749
111,878
139,627
10,264
28,323
121,568
149,891
67,118
2011
Oct-15
Eleven55 Ripley
—
15,566
107,539
123,105
10,601
16,047
117,659
133,706
55,540
2014
Oct-15
Arbor Park of Alexandria
160,930
50,881
159,728
210,609
15,658
51,943
174,324
226,267
95,659
1969/2015
Oct-15
Courts at Dulles
—
14,697
83,834
98,531
16,122
14,970
99,683
114,653
56,817
2000
Oct-15
Newport Village
127,600
50,046
177,454
227,500
28,239
51,174
204,565
255,739
115,231
1968
Oct-15
1301 Thomas Circle
—
27,836
128,191
156,027
5,997
27,887
134,137
162,024
47,583
2006
Aug-19
Station on Silver
—
16,661
109,198
125,859
2,100
16,760
111,199
127,959
31,418
2018
Dec-20
Seneca Place
—
21,184
98,173
119,357
13,389
21,278
111,468
132,746
31,441
1985
Jun-21
Canterbury Apartments
—
24,456
100,011
124,467
13,937
24,596
113,808
138,404
31,668
1986
Aug-21
The MO
—
27,135
—
27,135
115,881
27,135
115,881
143,016
12,685
2023
Jan-19
METROPOLITAN, D.C.
288,530
408,987
1,632,031
2,041,018
630,477
460,729
2,210,766
2,671,495
1,188,299
Calvert's Walk
—
4,408
24,692
29,100
15,677
5,837
38,940
44,777
31,545
1988
Mar-04
20 Lambourne
—
11,750
45,590
57,340
22,117
12,605
66,852
79,457
46,692
2003
Mar-08
Domain Brewers Hill
—
4,669
40,630
45,299
5,959
5,084
46,174
51,258
30,168
2009
Aug-10
Rodgers Forge
—
15,392
67,958
83,350
11,287
15,834
78,803
94,637
30,650
1945
Apr-19
Towson Promenade
58,600
12,599
78,847
91,446
12,647
12,797
91,296
104,093
29,964
2009
Nov-19
1274 at Towson
—
7,807
46,238
54,045
4,423
7,827
50,641
58,468
11,943
2020
Sep-21
Quarters at Towson Town Center
—
16,111
106,453
122,564
18,853
16,205
125,212
141,417
43,090
2008
Nov-21
BALTIMORE, MD
58,600
72,736
410,408
483,144
90,963
76,189
497,918
574,107
224,052
Gayton Pointe Townhomes
—
826
5,148
5,974
34,795
3,947
36,822
40,769
35,027
1973/2007
Sep-95
Waterside At Ironbridge
—
1,844
13,239
15,083
16,320
3,216
28,187
31,403
21,381
1987
Sep-97
Carriage Homes at Wyndham
—
474
30,997
31,471
14,466
4,591
41,346
45,937
34,642
1998
Nov-03
Legacy at Mayland
—
1,979
11,524
13,503
42,137
6,338
49,302
55,640
45,402
1973/2007
Dec-91
RICHMOND, VA
—
5,123
60,908
66,031
107,718
18,092
155,657
173,749
136,452
TOTAL MID-ATLANTIC REGION
347,130
486,846
2,103,347
2,590,193
829,158
555,010
2,864,341
3,419,351
1,548,803
NORTHEAST REGION
Garrison Square
-
6,475
91,027
97,502
31,227
6,873
121,856
128,729
79,938
1887/1990
Sep-10
Ridge at Blue Hills
25,000
6,039
34,869
40,908
10,741
6,764
44,885
51,649
29,827
2007
Sep-10
Inwood West
80,000
20,778
88,096
108,874
22,972
20,511
111,335
131,846
74,881
2006
Apr-11
14 North
72,500
10,961
51,175
62,136
23,456
11,991
73,601
85,592
49,886
2005
Apr-11
100 Pier 4
-
24,584
—
24,584
208,882
24,861
208,605
233,466
101,060
2015
Dec-15
345 Harrison
-
32,938
—
32,938
333,549
45,029
321,458
366,487
113,618
2018
Nov-11
Currents on the Charles
-
12,580
70,149
82,729
4,230
12,824
74,135
86,959
27,375
2015
Jun-19
The Commons at Windsor Gardens
-
34,609
225,515
260,124
32,339
35,097
257,366
292,463
97,424
1969
Aug-19
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2024
(In thousands)
S - 3
Gross Amount at Which
Initial Costs
Carried at Close of Period
Costs of
Improvements
Capitalized
Land and
Buildings
Total Initial
Subsequent
Land and
Buildings &
Total
Land
and
Acquisition
to Acquisition
Land
Buildings
Carrying
Accumulated
Date of
Date
Encumbrances
Improvements
Improvements
Costs
Costs
Improvements
Improvements
Value
Depreciation
Construction(a)
Acquired
Charles River Landing
-
17,068
112,777
129,845
6,459
17,389
118,915
136,304
39,561
2010
Nov-19
Lenox Farms
-
17,692
115,899
133,591
18,552
18,004
134,139
152,143
43,869
2009
Nov-19
Union Place
51,053
9,902
72,242
82,144
9,281
10,178
81,247
91,425
22,389
2005
Jan-21
Bradlee Danvers
-
28,669
175,114
203,783
14,507
28,697
189,593
218,290
34,130
1874/2008
Jun-22
BOSTON, MA
228,553
222,295
1,036,863
1,259,158
716,195
238,218
1,737,135
1,975,353
713,958
10 Hanover Square
—
41,432
218,983
260,415
38,098
42,107
256,406
298,513
149,297
2005/2020
Apr-11
21 Chelsea
—
36,399
107,154
143,553
18,521
36,541
125,533
162,074
76,949
2001
Aug-11
View 34
—
114,410
324,920
439,330
133,070
116,296
456,104
572,400
285,197
1985/2013
Jul-11
95 Wall Street
—
57,637
266,255
323,892
29,570
58,878
294,584
353,462
186,653
2008
Aug-11
NEW YORK, NY
—
249,878
917,312
1,167,190
219,259
253,822
1,132,627
1,386,449
698,096
Park Square
—
10,365
96,050
106,415
4,309
10,682
100,042
110,724
37,862
2018
May-19
The Smith Valley Forge
—
17,853
95,973
113,826
2,671
17,871
98,626
116,497
22,690
2019
Sep-21
322 on North Broad
—
12,240
124,524
136,764
11,456
12,259
135,961
148,220
32,596
2018
Sep-21
The George Apartments
—
17,341
—
17,341
49,932
17,366
49,907
67,273
8,301
2022
Aug-20
PHILADELPHIA, PA
—
57,799
316,547
374,346
68,368
58,178
384,536
442,714
101,449
TOTAL NORTHEAST REGION
228,553
529,972
2,270,722
2,800,694
1,003,822
550,218
3,254,298
3,804,516
1,513,503
SOUTHEAST REGION
Summit West
—
2,176
4,710
6,886
20,465
4,566
22,785
27,351
17,992
1972
Dec-92
The Breyley
—
1,780
2,458
4,238
22,468
4,489
22,217
26,706
22,057
1977/2007
Sep-93
Lakewood Place
—
1,395
10,647
12,042
18,637
3,385
27,294
30,679
23,385
1986
Mar-94
Cambridge Woods
—
1,791
7,166
8,957
17,110
3,841
22,226
26,067
18,911
1985
Jun-97
Inlet Bay
—
7,702
23,150
30,852
29,106
11,281
48,677
59,958
41,542
1988/1989
Jun-03
MacAlpine Place
—
10,869
36,858
47,727
25,055
13,002
59,780
72,782
45,871
2001
Dec-04
The Vintage Lofts at West End
—
6,611
37,663
44,274
27,394
16,108
55,560
71,668
45,659
2009
Jul-09
Peridot Palms
—
6,293
89,752
96,045
5,273
6,831
94,487
101,318
37,316
2017
Feb-19
The Preserve at Gateway
—
4,467
43,723
48,190
3,729
4,556
47,363
51,919
17,985
2013
May-19
The Slade at Channelside
—
10,216
72,786
83,002
9,202
10,642
81,562
92,204
27,495
2009
Jan-20
Andover Place at Cross Creek
—
11,702
107,761
119,463
12,105
11,773
119,795
131,568
37,669
1997/1999
Nov-20
Meridian
—
6,611
-
6,611
125,470
6,612
125,469
132,081
4,360
2024
May-21
TAMPA, FL
—
71,613
436,674
508,287
316,014
97,086
727,215
824,301
340,242
Seabrook
—
1,846
4,155
6,001
13,388
3,680
15,709
19,389
13,929
1984/2004
Feb-96
Altamira Place
—
1,533
11,076
12,609
29,028
4,192
37,445
41,637
33,822
1984/2007
Apr-94
Regatta Shore
—
757
6,608
7,365
22,519
3,289
26,595
29,884
24,484
1988/2007
Jun-94
Alafaya Woods
—
1,653
9,042
10,695
16,203
3,083
23,815
26,898
21,002
1989/2006
Oct-94
Los Altos
—
2,804
12,349
15,153
17,387
4,809
27,731
32,540
24,488
1990/2004
Oct-96
Lotus Landing
—
2,185
8,639
10,824
17,474
3,442
24,856
28,298
19,717
1985/2006
Jul-97
Seville On The Green
—
1,282
6,498
7,780
12,410
2,059
18,131
20,190
14,081
1986/2004
Oct-97
Ashton @ Waterford
—
3,872
17,538
21,410
10,663
4,972
27,101
32,073
21,897
2000
May-98
Arbors at Lee Vista
—
6,692
12,860
19,552
22,091
8,211
33,432
41,643
25,070
1992/2007
Aug-06
Arbors at Maitland Summit
—
15,929
158,079
174,008
21,357
16,010
179,355
195,365
51,902
1998
Oct-21
Essex Luxe
—
9,068
94,487
103,555
1,331
9,098
95,788
104,886
21,525
2020
Oct-21
ORLANDO, FL
—
47,621
341,331
388,952
183,851
62,845
509,958
572,803
271,917
Legacy Hill
—
1,148
5,867
7,015
14,254
2,255
19,014
21,269
16,472
1977
Nov-95
Hickory Run
—
1,469
11,584
13,053
21,114
3,024
31,143
34,167
23,499
1989
Dec-95
Carrington Hills
—
2,117
—
2,117
50,932
5,201
47,848
53,049
34,413
1999
Dec-95
Brookridge
—
708
5,461
6,169
10,834
1,761
15,242
17,003
12,395
1986
Mar-96
Breckenridge
—
766
7,714
8,480
9,768
1,960
16,288
18,248
13,065
1986
Mar-97
Colonnade
—
1,460
16,015
17,475
13,611
3,050
28,036
31,086
21,716
1998
Jan-99
The Preserve at Brentwood
—
3,182
24,674
27,856
21,464
4,634
44,686
49,320
33,579
1998
Jun-04
Polo Park
—
4,583
16,293
20,876
22,876
7,324
36,428
43,752
31,482
1987/2008
May-06
NASHVILLE, TN
—
15,433
87,608
103,041
164,853
29,209
238,685
267,894
186,621
The Reserve and Park at Riverbridge
—
15,968
56,401
72,369
24,590
17,373
79,586
96,959
64,259
1999/2001
Dec-04
OTHER FLORIDA
—
15,968
56,401
72,369
24,590
17,373
79,586
96,959
64,259
TOTAL SOUTHEAST REGION
—
150,635
922,014
1,072,649
689,308
206,513
1,555,444
1,761,957
863,039
SOUTHWEST REGION
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2024
(In thousands)
S - 4
Gross Amount at Which
Initial Costs
Carried at Close of Period
Costs of
Improvements
Capitalized
Land and
Buildings
Total Initial
Subsequent
Land and
Buildings &
Total
Land
and
Acquisition
to Acquisition
Land
Buildings
Carrying
Accumulated
Date of
Date
Encumbrances
Improvements
Improvements
Costs
Costs
Improvements
Improvements
Value
Depreciation
Construction(a)
Acquired
Thirty377
25,000
24,036
32,951
56,987
25,983
26,585
56,385
82,970
45,444
1999/2007
Aug-06
Legacy Village
90,000
16,882
100,102
116,984
37,704
23,823
130,865
154,688
98,942
2005/06/07
Mar-08
Addison Apts at The Park
-
22,041
11,228
33,269
23,821
32,036
25,054
57,090
18,293
1977/78/79
May-07
Addison Apts at The Park I
-
7,903
554
8,457
9,402
11,058
6,801
17,859
5,697
1970
May-07
Addison Apts at The Park II
-
10,440
634
11,074
3,241
8,458
5,857
14,315
4,586
1975
May-07
Savoye
-
8,432
50,483
58,915
7,263
9,097
57,081
66,178
18,986
2009
Nov-19
Savoye 2
-
6,451
56,615
63,066
5,830
7,067
61,829
68,896
20,517
2011
Nov-19
Fiori on Vitruvian Park
44,903
7,934
78,575
86,509
6,589
8,767
84,331
93,098
28,847
2013
Nov-19
Vitruvian West Phase I
41,317
6,273
61,418
67,691
4,387
6,676
65,402
72,078
22,421
2018
Nov-19
Vitruvian West Phase II
-
6,451
15,798
22,249
40,498
6,670
56,077
62,747
15,443
2021
Nov-19
Vitruvian West Phase III
-
7,141
2,754
9,895
65,163
7,385
67,673
75,058
11,979
2022
Nov-19
Villas at Fiori
-
9,921
776
10,697
41,770
9,970
42,497
52,467
2,788
2024
Nov-19
The Canal
41,222
12,671
98,813
111,484
5,284
12,780
103,988
116,768
26,939
2017
Apr-21
Cool Springs at Frisco Bridges
89,510
18,325
151,982
170,307
22,680
18,460
174,527
192,987
48,325
2012
May-21
Central Square at Frisco
37,090
7,661
52,455
60,116
2,423
7,678
54,861
62,539
5,455
2018
Aug-23
Villaggio
32,234
6,186
41,813
47,999
2,360
6,195
44,164
50,359
4,479
2016
Aug-23
Lofts at Palisades
39,882
8,198
56,143
64,341
1,266
8,200
57,407
65,607
5,718
2018
Aug-23
Flats at Palisades
32,038
5,546
43,854
49,400
3,695
5,551
47,544
53,095
4,870
2017
Aug-23
DALLAS, TX
473,196
192,492
856,948
1,049,440
309,359
216,456
1,142,343
1,358,799
389,729
Barton Creek Landing
-
3,151
14,269
17,420
28,542
6,096
39,866
45,962
35,416
1986/2012
Mar-02
Residences at the Domain
-
4,034
55,256
59,290
19,426
5,084
73,632
78,716
54,417
2007
Aug-08
Red Stone Ranch
-
5,084
17,646
22,730
16,046
5,810
32,966
38,776
21,172
2000
Apr-12
Lakeline Villas
-
4,148
16,869
21,017
12,982
4,961
29,038
33,999
18,285
2002
Apr-12
Estancia Villas
27,895
6,384
52,946
59,330
3,220
6,399
56,151
62,550
5,529
2018
Aug-23
Palo Verde
39,024
5,975
57,880
63,855
2,633
6,004
60,484
66,488
5,875
2019
Aug-23
AUSTIN, TX
66,919
28,776
214,866
243,642
82,849
34,354
292,137
326,491
140,694
Steele Creek
—
8,586
130,400
138,986
10,036
8,906
140,116
149,022
54,598
2015
Oct-17
Cirrus
—
13,853
—
13,853
88,819
14,016
88,656
102,672
14,846
2022
Feb-19
DENVER, CO
—
22,439
130,400
152,839
98,855
22,922
228,772
251,694
69,444
TOTAL SOUTHWEST REGION
540,115
243,707
1,202,214
1,445,921
491,063
273,732
1,663,252
1,936,984
599,867
TOTAL OPERATING COMMUNITIES
1,142,798
2,309,067
8,535,150
10,844,217
4,800,739
2,591,882
13,053,074
15,644,956
6,809,474
LAND
Vitruvian Park®
—
22,547
1,467
24,014
15,837
30,320
9,531
39,851
831
Alameda Point Block 11
—
25,006
—
25,006
8,436
25,006
8,436
33,442
-
Newport Village II
—
5,237
—
5,237
18,348
5,237
18,348
23,585
-
2727 Turtle Creek
—
90,205
—
90,205
13,933
90,205
13,933
104,138
-
488 Riverwalk
—
16,053
—
16,053
8,140
16,053
8,140
24,193
-
3001 Iowa Ave
—
13,468
—
13,468
15,272
13,468
15,272
28,740
-
TOTAL LAND
—
172,516
1,467
173,983
79,966
180,289
73,660
253,949
831
HELD FOR DISPOSITION
Leonard Pointe
—
38,010
93,204
131,214
2,916
38,130
96,000
134,130
36,598
One William
—
6,422
75,527
81,949
2,490
6,515
77,924
84,439
27,508
TOTAL HELD FOR DISPOSITION
—
44,432
168,731
213,163
5,406
44,645
173,924
218,569
64,106
COMMERCIAL
Brookhaven Shopping Center
—
—
—
—
31,121
7,793
23,328
31,121
16,143
3001 Iowa Ave Commercial
—
9,882
4,861
14,743
1
9,882
4,862
14,744
804
TOTAL COMMERCIAL
—
9,882
4,861
14,743
31,122
17,675
28,190
45,865
16,947
Other (b)
—
—
—
—
19,906
136
19,770
19,906
927
1745 Shea Center I
—
3,034
20,534
23,568
6,550
3,083
27,035
30,118
8,741
TOTAL CORPORATE
—
3,034
20,534
23,568
26,456
3,219
46,805
50,024
9,668
TOTAL COMMERCIAL & CORPORATE
—
12,916
25,395
38,311
57,578
20,894
74,995
95,889
26,615
Deferred Financing Costs and Other Non-Cash
Adjustments
(3,467)
TOTAL REAL ESTATE OWNED
$
1,139,331
$
2,538,931
$
8,730,743
$
11,269,674
$
4,943,689
$
2,837,710
$
13,375,653
$
16,213,363
$
6,901,026
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2024
(In thousands)
S - 5
(a) Date of original construction/date of last major renovation, if applicable.
(b) Includes unallocated accruals and capital expenditures.
The aggregate cost for federal income tax purposes was approximately $15.6 billion at December 31, 2024 (unaudited).
The estimated depreciable lives for all buildings in the latest Consolidated Statements of Operations are 30 to 55 years.
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2024
(In thousands)
S - 6
3-YEAR ROLLFORWARD OF REAL ESTATE OWNED AND ACCUMULATED DEPRECIATION
The following is a reconciliation of the carrying amount of total real estate owned at December 31, (in thousands):
2024
2023
2022
Balance at beginning of the year
$
16,023,859
$
15,570,072
$
14,740,803
Real estate acquired (including joint venture consolidation)
—
410,581
409,263
Capital expenditures and development
295,548
441,606
444,009
Real estate sold
(106,044)
(398,400)
(24,003)
Balance at end of the year
$
16,213,363
$
16,023,859
$
15,570,072
The following is a reconciliation of total accumulated depreciation for real estate owned at December 31, (in thousands):
2024
2023
2022
Balance at beginning of the year
$
6,267,830
$
5,762,501
$
5,137,096
Depreciation expense for the year
660,805
668,899
634,424
Accumulated depreciation on sales
(27,609)
(163,570)
(9,019)
Balance at end of year
$
6,901,026
$
6,267,830
$
5,762,501
Table of Contents
S - 7
Exhibit 19
UDR, INC.
AMENDED AND RESTATED
INSIDER TRADING COMPLIANCE PROGRAM
Adopted February 13, 2025
In order to take an active role in the prevention of insider trading violations by its officers, directors,
employees and other individuals who gain access to inside information, UDR, Inc. (the "Company") has adopted
the policies and procedures described in this Memorandum and the attached Exhibits. These policies and
procedures replace the Company's existing Policy on Insider Trading.
I.
Summary of Various Insider Trading Laws.
The Insider Trading and Securities Fraud Enforcement Act of 1988 (the "Insider Trading Act") contains a
number of measures designed to curb insider trading. Perhaps most noteworthy, the Insider Trading Act imposes
liability on "controlling persons" (including employees, officers and members of the Board of Directors) if the
Securities and Exchange Commission ("SEC") can establish that the controlling persons knew or recklessly
disregarded that an employee (not just a corporate insider) was likely to engage in insider trading and failed to
take action to prevent violations of the Insider Trading Act. Both corporate insiders and controlling persons are
subject to civil penalties payable to the SEC for up to three times the profit realized or loss avoided. Rule 10b-5
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") creates potential liability both for
individuals who trade on the basis of material non-public information and for companies who fail to adequately
disclose material information. Rules promulgated by the SEC under Section 16 of the Exchange Act impose
reporting requirements on corporate insiders (i.e., officers, directors and 10% stockholders) of a public company.
Finally, the Securities Enforcement Remedies and Penny Stock Reform Act of 1990 and the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 provide the SEC with potent weapons to enforce federal
securities laws. Under these and other applicable statutory provisions and SEC rules, the SEC may institute
administrative proceedings for any violation of the federal securities laws, including insider reporting
requirements and financial disclosure and proxy rules, possibly resulting in a "cease-and-desist" order and civil
money penalties.
II.
Adoption of Insider Trading Policy.
Because of these securities laws, public companies must play a more active role in implementing
corporate policies designed to prevent employees and other insiders from engaging in insider trading. To this
end, the Company has adopted an Insider Trading Policy, a copy of which is attached hereto as Exhibit A (the
"Insider Trading Policy") and incorporated herein by reference.
The Insider Trading Policy prohibits trading based on material non-public information regarding the
Company. The Insider Trading Policy covers officers, directors and all other employees of, or consultants or
contractors to, the Company and its subsidiaries and affiliates, as well as family members of such persons, and
others, in each case where such persons have or may have access to material non-public information. In certain
instances, the Insider Trading Policy
2
applies to employees who have recently terminated their employment or have had their employment terminated
by the Company. The Insider Trading Policy is to be distributed to all new employees upon the commencement
of their relationship with the Company, and all new employees must sign an acknowledgement that they received
the Insider Trading Policy. The Insider Trading Policy will also be distributed to all employees annually in order
to remind them of their obligations under the federal securities laws.
III.
Designation of Certain Persons.
A.
Section 16 Individuals. The Company determines that certain persons are the directors and
officers who are subject to the reporting and liability provisions of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder ("Directors and Officers"). The Company makes this determination from
time to time as appropriate to reflect the election of new officers or directors, any change in function of current
officers and the resignation or departure of current officers or directors.
B.
Other Persons. The Company determines that certain persons, together with the Directors and
Officers (collectively, the "Insiders"), should be subject to the preclearance requirement described in Section V.A.
below, because the Company believes that, in the normal course of their duties, such persons have, or are likely
to have, regular access to material non-public information. The Company makes this determination from time to
time. Under special circumstances, certain persons not designated as Insiders may come to have access to
material non-public information for a period of time. During such period(s), such persons should also be subject
to the preclearance procedure described in Section V.A. below.
IV.
Appointment of Corporate Compliance Officer.
The Board of Directors, or at the discretion of the Board of Directors, the Governance Committee, shall
appoint the Insider Trading Corporate Compliance Officer (the "Corporate Compliance Officer").
V.
Duties of Corporate Compliance Officer.
The duties of the Corporate Compliance Officer with respect to insider trading shall include, but not be
limited to, the following:
A.
Preclearing all transactions involving the Company's securities by any Insider, as well as any and
all persons who are known by the Corporate Compliance Officer to have access to material non-public
information, in order to determine compliance with the Insider Trading Policy, all applicable insider trading laws,
Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act").
B.
Distributing the Insider Trading Policy to all new employees upon the commencement of their
relationship with the Company and obtaining a signed acknowledgment from each employee that he or she
received, understands and agrees to comply with the Insider Trading Policy.
3
C.
Distributing the Insider Trading Policy (and/or a summary thereof) to all employees, including all
Insiders, on an annual basis and obtaining a signed acknowledgment from each Insider that he or she received,
understands and agrees to comply with the Insider Trading Policy.
D.
Coordinating with the designated contact person for notification of the existence of any material
non-public information under the Company's Fair Disclosure Policy and notifying the Insiders of any blackout
periods.
E.
Reminding Directors and Officers of their filing obligations under Section 16 of the Exchange Act
(Forms 3, 4 and 5), the Williams Act and Rule 144 under the Securities Act of 1933, as amended ("Securities
Act"), distributing comprehensive memoranda to such persons from time to time outlining such filing obligations
and obtaining certifications and broker instruction/representation forms from all Directors and Officers.
Assisting in the preparation and filing of all such reports/filings (the final preparation and filing of all such
reports, however, shall be the sole responsibility of each of the Directors and Officers).
F.
Serving as the designated recipient at the Company of copies of reports filed with the SEC by the
Directors and Officers and arranging for posting of such reports on the Company's website within one business
day after each such filing.
G.
Mailing periodic reminders to all the Directors and Officers regarding their obligations to report.
H.
Performing periodic cross-checks of available materials, which may include Forms 3, 4 and 5,
Forms 13D and 13G, Form 144, officer’s and director’s questionnaires and reports received from the Company's
stock administrator and transfer agent, to determine trading activity by Officers, Directors and others who have or
may have access to material non-public information.
I.
Assisting the Board of Directors in implementation of the Insider Trading Policy.
J.
Coordinating with the Company's securities counsel regarding compliance activities with respect
to Rule 144, Section 16 and insider trading issues.
K.
Conducting a periodic review of the Insider Trading Policy with the Company's securities counsel
to determine whether any updates or modifications are appropriate or desirable.
L.
Reviewing and making determinations with respect to requests for Hardship Waivers.
* * * * * * *
A-1
EXHIBIT A
UDR, INC.
INSIDER TRADING POLICY
This Insider Trading Policy provides guidelines to officers, directors and all other employees of, or
consultants or contractors to, UDR, Inc. (the "Company") and its subsidiaries and affiliates, as well as family
members of such persons, and others (individually a "Covered Person" and collectively the "Covered Persons"),
in each case where such persons have or may have access to material non-public information, with respect to
transactions in the Company's securities and the handling by insiders of confidential information about the
Company and the companies with which it does business.
For purposes of this Insider Trading Policy, the Company's securities include common stock, options for
common stock and any other securities the Company may issue from time to time, such as preferred stock,
warrants and convertible debentures. The Company's securities also include derivative securities relating to the
Company's stock, even if not issued by the Company, such as exchange-traded options.
POLICY
It is the policy of the Company to comply with all insider trading laws and regulations.
RESPONSIBILITY
Covered Persons may create, use or have access to confidential or material information that is not
generally available to the investing public (such information is referred to in this Insider Trading Policy as
"material non-public information," as explained in more detail below). Each individual has an important ethical
and legal obligation to maintain the confidentiality of such information and not to engage in any transactions in
the Company's securities while in possession of material non-public information. Each individual and the
Company may be subject to severe civil and criminal penalties as a result of unauthorized disclosure of or trading
in the Company's securities while in possession of material non-public information.
The Corporate Compliance Officer is responsible for the administration of this Insider Trading Policy.
GUIDELINES
1.
Prohibition. Except as discussed in Guideline 10 herein, every Covered Person is prohibited
from: (a) engaging in transactions in the Company's securities (including buying, selling or making gifts) while
in possession of material non-public information; (b) communicating such information to others except those
who "need to know" based on their doing business with or for the Company; (c) recommending the purchase or
sale of the Company's securities while in the possession of material information that has not been publicly
disclosed by the Company; or (d) assisting anyone engaged in any of the above activities. This prohibition also
applies to information about, and the securities of, other companies with which the Company does
A-2
business, or with which the Company is involved in a potential transaction or business relationship, through
which a Covered Person may acquire material non-public information of that company.
There are no exceptions to this Insider Trading Policy. Engaging in transactions in the Company's
securities that are otherwise necessary for personal reasons, such as personal financial commitments, are still
prohibited if you possess material non-public information.
2.
Penalties. If you engage in any of the above activities, you may subject yourself, the Company
and its officers and directors to civil and criminal liability. Penalties may include (i) fines of up to $5,000,000 or
two times the gain from the offense and (ii) jail terms of up to twenty (20) years. A civil action by the Securities
and Exchange Commission ("SEC") could lead to disgorgement of profits and a penalty not to exceed the greater
of $1,000,000 or three times the amount of profit gained or loss avoided. In addition, violation of this Insider
Trading Policy may subject you to immediate discipline by the Company, including discharge from the Company.
3.
Transactions by Family Members. The prohibitions described in this Insider Trading Policy
also apply to your family members, including your spouse, minor children or others living in your home. You are
responsible for the conduct of your immediate family.
4.
Tipping Information to Others. You may not disclose any material non-public information to
others, including your family members, friends or social acquaintances. This prohibition applies whether or not
you receive any benefit from the other person's use of that information. Under applicable law, a personal benefit
can be inferred when the tipper receives something of value in exchange for the tip of information, or if the tipper
makes a gift of confidential information to a friend or relative who trades. The SEC has imposed large penalties
on individuals disclosing such information even when the disclosing person did not profit from such disclosure.
The SEC, the stock exchanges and the Financial Industry Regulatory Authority use sophisticated electronic
surveillance techniques to uncover insider trading. Do not underestimate their ability to discover your actions or
their willingness to make an example of individuals committing seemingly minor infractions.
5.
Material Non-Public Information. "Material" information is any information that could
reasonably affect the price of the Company's stock or that a reasonable investor would consider important in
making a decision to purchase, hold or sell the Company's securities.
"Non-public" information is any information that has not been disclosed generally to the investing public.
Information is not public until it has been disclosed by press release or in the Company's periodic or current
reports filed with the SEC or as otherwise provided under the Securities Act, and the Company's Fair Disclosure
Policy. Even after the Company has released information to the press and the information has been reported, you
should allow the investing public at least one full business days (that is, a day on which the primary exchange
upon which the Company's securities are traded is open for trading) to absorb and evaluate the information before
you trade in the Company's securities.
A-3
Although it is not possible to list all types of material information, the following are examples of the types
of information that are particularly sensitive and should be treated as material:
●
Financial results or projections;
●
Changes in financial condition or asset value;
●
Negotiations for the acquisition or disposition of significant assets or joint ventures;
●
Significant new contracts or the loss of a significant contract;
●
Significant new products or services;
●
Significant marketing plans and material changes in such plans;
●
Capital investment plans and changes in such plans;
●
Events regarding the Company's securities, such as defaults on indebtedness, calls for redemption,
repurchase plans, stock splits, dividend changes, changes to rights of security holders and public or
private sales of additional securities;
●
Deteriorations in the Company's credit status;
●
Material litigation, administrative actions or governmental investigations concerning the Company or
any of its officers or directors;
●
Major financings or borrowings;
●
Significant personnel changes or changes in control;
●
Changes in auditors or auditor notification that the Company may no longer rely on an audit report;
●
Changes in accounting methods and write-offs;
●
Bankruptcy, corporate restructuring or receivership;
●
Any substantial change in industry circumstances or competitive conditions which could significantly
affect the Company's earnings or prospects for expansion;
●
A significant cybersecurity incident, such as a data breach; and
●
The imposition of an Event-Specific Blackout Period (as defined in Section 9(a) below) or a special
restriction on trading in the securities of another company, or the extension or termination of any such
restriction.
If you have any question as to whether particular information is material or non-public, you should not
trade or communicate the information to anyone without the prior written approval of the Corporate Compliance
Officer.
6.
Inadvertent Disclosure. If material non-public information is inadvertently disclosed by any
employee, officer or director, you should immediately report all the facts of the disclosure to the Corporate
Compliance Officer so that the Company may take appropriate remedial action. As noted in the Company's Fair
Disclosure Policy, under SEC rules, the Company generally has only 24 hours after learning of an inadvertent
disclosure of material non-public information to publicly disclose such information.
7.
Short-term, Speculative Transactions, Hedging and Pledging. The Company has determined
that there is a substantial likelihood for the appearance of improper conduct by Company personnel (which
includes directors, officers and all other employees of the Company) when they engage in short-term or
speculative securities transactions. Therefore, Company
A-4
personnel are prohibited from engaging in any of the following activities involving the Company's securities:
(a)
short sales;
(b)
buying or selling puts or calls;
(c)
trading in options (other than those granted by the Company); and
(d)
hedging transactions.
Company personnel are also prohibited from purchasing securities on margin or otherwise pledging securities as
collateral for a loan or other arrangement, except with the prior written consent of the Corporate Compliance
Officer (or the Chief Executive Officer, as applicable).
8.
Further Prohibition. From time to time, effective immediately upon notice or as otherwise
provided by the Company, the Company may determine that other types of transactions, or all transactions, by
Company personnel in the Company's securities shall be prohibited or shall be permitted only with the prior
written consent of the Corporate Compliance Officer.
9.
Mandatory Preclearance for Directors, Officers and Employees. The following guidelines are
applicable to (i) all members of the Company's Board of Directors ("Directors"), (ii) all officers of the Company
designated by the Board of Directors as Section 16 officers ("Officers") and (iii) other designated employees of
the Company who regularly have access to material non-public information about the Company as may be
updated from time to time (together with the Directors and Officers, the "Insiders"). The Corporate Compliance
Officer will inform each person who the Company determines to be an Insider of such determination. The
Company believes that the Insiders may have access to material non-public information in the course of their
duties. The persons who are considered Insiders may be changed by the Company from time to time as
circumstances require. If you are an Insider and have any questions about the application of these provisions
when considering the possible purchase or sale of the Company's securities, you should contact the Corporate
Compliance Officer before undertaking the transaction and follow his/her instructions.
(a)
Trading Prohibitions. The release of earnings is a particularly sensitive period of time for
transactions in the Company's stock because officers, directors and other employees may possess material non-
public information about the expected financial results for the quarter. Accordingly, no Insider may conduct
transactions involving the Company's securities during a Blackout Period for the quarter. The Blackout Period
with respect to each fiscal quarter of the Company begins at 4:00 p.m., Eastern time, on the fifteenth calendar day
after the end of the fiscal quarter and ends at 4:00 p.m., Eastern time, on the first business day following the
earlier of (i) the Company's filing with the SEC of the Company's quarterly or annual financial reports; (ii) the
public release of quarterly or annual financial information or (iii) otherwise in a manner that complies with the
requirements of the Securities Act (collectively, the "Earnings Release Date").
A-5
The Company's Corporate Compliance Officer will inform you of the anticipated date of public disclosure
of each quarter's financial results upon request. The Blackout Period continues to apply to your transactions in
the Company securities even after your employment terminates; if your employment terminates during a
Blackout Period, you may not trade in the Company's securities until that Blackout Period has ended.
For Directors and Officers of the Company, all transactions involving the Company's securities outside
the Blackout Period may be made only after preclearing the transaction with the Company's Corporate
Compliance Officer (or the Chief Executive Officer, as applicable).
From time to time, the Company may also determine that Directors, Officers, selected employees and
others should suspend trading for a specified period of time because of developments known to the Company and
not yet disclosed to the public (an “Event-Specific Blackout Period”). In such event, such persons may not
engage in any transaction involving the purchase or sale of the Company's securities during such Event-Specific
Blackout Period and may not disclose to others the fact of such suspension of trading.
Even outside of a period during which trading is prohibited, any person possessing material non-public
information concerning the Company should not engage in any transactions in the Company's securities until
such information has been known publicly for at least two full trading days (that is, days on which the primary
securities exchange upon which the Company’s securities are traded is open for trading), whether or not the
Company has recommended a suspension of trading to that person. If you are aware of material non-public
information when your employment terminates, you may not trade in the Company's securities until two full
trading days after the information has become public or is no longer material. Trading in the Company's
securities during the Window Period (as defined and described in paragraph (c) below) should not be
considered a "safe harbor," and all Directors, Officers and other persons should use good judgment at all
times to make sure that their trades are not effected while they are in possession of material non-public
information about the Company.
(b)
Preclearance of Transactions.
(i)
All Insiders must receive approval from the Corporate Compliance Officer prior to
any transactions involving the Company's securities. All transactions during a Blackout Period are prohibited,
except as set forth in Guideline 10 or to the extent a Hardship Waiver has been granted pursuant to Guideline 15
herein. The Corporate Compliance Officer will make every effort to respond to requests for approval as quickly
and expeditiously as possible. With respect to any requirement for preclearance of transactions in this policy, the
Corporate Compliance Officer shall seek prior approval from the Chief Executive Officer.
(ii)
Each employee who is not an Insider may buy or sell securities of the Company in
the market, without the necessity of preclearance; provided that such employee does not then possess material
non-public information regarding the Company.
(c)
Window Period. Subject to paragraphs (a) and (b) above, Insiders may buy or sell
securities of the Company during the periods beginning on the second business day
A-6
following the Earnings Release Date and ending on the commencement of the Blackout Period (each a "Window
Period").
10.
Certain Transactions Not Subject to Trading Restrictions.
(a)
Stock Option Exercises and Redemptions of Securities. The Insider Trading Policy
does not apply to (i) the exercise of an employee stock option, (ii) the exercise of a tax withholding right pursuant
to which you elect to have the Company withhold shares subject to an option to satisfy tax-withholding
requirements, or (iii) the redemption of redeemable securities with the Company or its subsidiaries for shares of
the Company’s stock. The policy does apply, however, to any sale of stock as part of a broker-assisted cashless
exercise of an option, or any other market sale including for the purpose of generating the cash needed to pay the
exercise price of an option.
(b)
Restricted Stock Awards. The Insider Trading Policy does not apply to the vesting of
restricted stock, or the exercise of a tax withholding right pursuant to which you elect to have the Company
withhold shares of stock to satisfy tax-withholding requirements upon the vesting of any restricted stock. The
policy does apply, however, to any market sale of restricted stock.
(c)
401(k) Plan. The Insider Trading Policy does not apply to purchases of Company stock in
any 401(k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll
deduction election. The policy does apply, however, to certain elections you might make under a 401(k) plan,
including (a) an election to increase or decrease the percentage of your periodic contributions that will be
allocated to the Company stock fund, (b) an election to make an intra-plan transfer of an existing account balance
into or out of the Company stock fund, (c) an election to borrow money against your 401(k) plan account if the
loan will result in a liquidation of some or all of your Company stock fund balance, and (d) your election to pre-
pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund.
(d)
Dividend Reinvestment Plan. The Insider Trading Policy does not apply to purchases of
Company stock under the Company's Dividend Reinvestment Plan resulting from your reinvestment of dividends
paid on Company stock. The policy does apply, however, to your election to participate in the plan or increase
your level of participation in the plan. The policy also applies to your sale of any Company stock purchased
pursuant to the plan.
(e)
Approved Pre-Planned Trading Programs. Notwithstanding any other guidelines
contained in the Insider Trading Policy to the contrary, Directors and Officers may engage in transactions in
securities of the Company under certain pre-planned trading programs that comply with SEC Rule 10b5-1, or any
successor rule, and have been approved in advance, in writing, by the Company's Corporate Compliance Officer.
To initiate any transactions under this exception, a person must comply with each of the following elements:
(i)
While such person is not aware of any material non-public information, the
person must enter into a binding contract to engage in transactions in securities,
A-7
instruct another person to purchase or sell securities for the person's account, or adopt a written plan for
purchasing or selling the securities (a "Trading Program").
(ii)
The Trading Program must contain one of the following:
(A)
specify the amount, price, and date of the transaction(s);
(B)
include a written formula, algorithm, or computer program for determining
amounts, prices, and dates for the transaction(s); or
(C)
not permit the person to exercise any subsequent influence over how, when,
or whether to engage in transactions (and any other person exercising such influence under the Trading
Program must not be aware of material non-public information when doing so).
For the purposes of a Trading Program, the following definitions apply:
●
"Amount" means a specified number of securities or a specified dollar value
of securities.
●
"Price" means a market price on a particular date or a limit price, or a
particular dollar price.
●
"Date" means the day of the year when the order is to be executed, or as
soon thereafter as is practical under ordinary principles of best execution.
In case of a limit order, "date" means the day of the year when the order is
in force.
(iii)
Transactions must occur pursuant to the Trading Program.
(iv)
No transaction may take place under a Trading Program for any Director or Officer
until the later of (a) 90 days after adoption or modification of the Trading Program or (b) two business days
following the disclosure of the Company’s financial results in a Form 10-Q or Form 10-K for the fiscal quarter
(the Company’s fourth fiscal quarter in the case of a Form 10-K) in which the Trading Program was adopted or
modified.
(v)
The Trading Program cannot be entered into as part of a plan or scheme to evade
the prohibitions of SEC Rule 10b5-1. Therefore, although modifications to an existing Trading Program are not
prohibited, a Trading Program should be adopted with the intention that it will be amended or modified
infrequently, if at all, since changes to the Trading Program will raise issues as to the individual's good faith. In
addition, the Trading Program must include a representation to the Company at the time of adoption or
modification that (i) the person is not aware of material non-public information about the Company or its
securities and (ii) the person is adopting the trading plan in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b-5.
A-8
(vi)
No person purchasing or selling securities under a Trading Program may take (or
modify existing) hedging positions to account for his or her planned purchases or sales.
(vii)
Any person wishing to (i) proceed under the Trading Program exception or
(ii) modify or terminate a previously adopted Trading Program must first obtain written approval from the
Corporate Compliance Officer. This preclearance requirement will permit the Company to review the proposed
Trading Program as to compliance with applicable securities laws (including SEC Rule 10b5-1), this Insider
Trading Policy and the best interests of the Company, with a view toward avoiding unnecessary litigation and
other consequences detrimental to the Company and the person seeking to rely on this exception. The Company
therefore reserves the right to approve or disapprove any proposed Trading Program (or the modification or
termination of any existing Trading Program) in its sole and absolute discretion based on, among other factors,
policies and criteria adopted by the Company from time to time, market conditions, legal and regulatory
considerations and the potential impact of any such Trading Program on any actual or prospective transactions
(including the distribution of securities) to which the Company is or may be a party.
(viii)
The Company will not approve any proposed Trading Program (or the modification
or termination of any existing Trading Program) prior to consideration of and compliance with the following
elements, as well as such additional terms and conditions as the Company may require from time to time:
●
To reduce potential exposure, the Company will need to ensure that there is no pending
disclosure of material information which has not been previously publicly disclosed at the
time a person wishes to enter into a Trading Program (or to modify or terminate a
previously adopted Trading Program). If there is any such undisclosed information, the
Company may delay its approval of the Trading Program until the information has been
publicly disclosed. The Company may also require an interval between the adoption of the
Trading Program and the first trade under such Trading Program.
●
Under appropriate circumstances, the Company may wish to make a public announcement
of the Trading Program at the time of adoption, and the Company and the Director or
Officer will be required to make certain disclosures regarding the Trading Program under
applicable SEC rules.
●
The Company will need to confirm that the proposed Trading Program contains procedures
to ensure prompt compliance with (i) any reporting requirements under Section 16 of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), (ii) SEC Rule 144
relating to any sales under the Trading Program, and (iii) any suspension of trading or
other trading restrictions that the Company determines to impose on sales under an
approved Trading Program, under applicable law or in connection with a distribution by
the Company of securities, including without limitation lock up or affiliate letters required
in connection with a proposed merger, acquisition or distribution of Company securities or
any restrictions on or
A-9
suspensions of trading imposed by applicable authorities (including the SEC or other
governmental authority, or the New York Stock Exchange or any stock exchange,
automated quotation system or other self-regulated organization that promulgates rules to
which the Company is subject from time to time).
(ix)
Subject to certain limited exceptions specified in Rule 10b5-1, Directors and
Officers may not enter into more than one Trading Program at the same time.
(x)
Directors and Officers are limited to one Trading Program designed to effect an
open market purchase or sale of the total amount of securities subject to the Trading Program as a single
transaction in any 12-month period.
(xi)
The approval or adoption of a Trading Program in no way reduces or eliminates
such person's obligations under Section 16 of the Exchange Act, including such person's disclosure and short-
swing trading liabilities thereunder. If any questions arise regarding any Trading Program, such person should
consult with their own counsel prior to entering into a trading program.
(f) Limited Trading Periods. The Corporate Compliance Officer may, if circumstances warrant,
declare a “limited” trading period, during which any Covered Person who desires to buy or sell the Company’s
stock shall first notify the Corporate Compliance Officer to obtain approval of the trade before contacting any
broker in connection with such trade.
11.
Directors and Officers ¾ Short-Swing Transactions. Directors and Officers of the Company
must also comply with the reporting obligations and limitations on short-swing transactions set forth in
Section 16 of the Exchange Act. The practical effect of these provisions is that Directors or Officers who
purchase and sell the Company's securities within a six-month period must disgorge all profits to the Company
regardless of whether they had knowledge of any material non-public information. However, under Section 16 of
the Exchange Act, and so long as certain other criteria are met, neither the receipt of an option under the
Company's option plans, nor the exercise of that option, is deemed a purchase; nevertheless, the sale of any such
shares (including a sale pursuant to a broker's cashless option exercise) generally is a sale under Section 16 of the
Exchange Act. Moreover, as discussed in Guideline 7 herein, no Director or Officer may ever make a short sale
of the Company's stock. The Company has provided separate memoranda and other appropriate materials to its
Directors and Officers regarding compliance with Section 16 of the Exchange Act and its related rules.
12.
Confidentiality Guidelines. To provide more effective protection against the inadvertent
disclosure of material non-public information about the Company or the entities with which it does business, the
Company has adopted the following confidentiality guidelines. These guidelines are not intended to be
exhaustive. Additional measures to secure the confidentiality of information should be undertaken as necessary
under the circumstances. If you have any doubt as to your responsibilities with respect to confidential
information, please seek clarification and guidance from the Corporate Compliance Officer before you act; do not
attempt to resolve any uncertainties on your own.
A-10
The following guidelines establish procedures with which every employee, Officer and Director should
comply in order to maximize the security of confidential inside information:
(a)
Use passwords to restrict access to the information on computers.
(b)
Limit access to particular physical areas where material non-public information is likely to
be documented or discussed.
(c)
Do not discuss any Company matter in public places, such as elevators, hallways,
restrooms or eating facilities, where conversations might be overheard.
13.
Authorized Disclosure of Material Non-Public Information. Under certain circumstances, the
Corporate Compliance Officer may authorize immediate release of material non-public information. If disclosure
is authorized, the form and content of all public disclosures must be approved pursuant to the terms of the
Company's Fair Disclosure Policy. In the cases of material non-public information that is not disclosed, such
information is not to be disclosed or discussed except on a strict "need-to-know" basis. All communications with
representatives of the media and securities analysts and requests for information, comments or interviews (other
than routine property inquiries) should be directed to the Corporate Compliance Officer, who will clear all
proposed responses in compliance with the Company's Fair Disclosure Policy. All Officers, Directors and
employees must comply with the Company's Fair Disclosure Policy and should not respond to such requests
directly, unless expressly instructed otherwise by the Corporate Compliance Officer. In particular, great care
should be taken not to comment on the Company's expected future financial results. If the Company wishes to
give some direction to investors or securities professionals, it must do so only in compliance with the Company's
Fair Disclosure Policy.
14.
Company Assistance. If you have any questions about specific information or proposed
transactions, or as to the applicability or interpretation of this Insider Trading Policy or the propriety of any
desired action, you are encouraged to contact the Corporate Compliance Officer.
15.
Hardships.
Under limited circumstances, the Corporate Compliance Officer may, on a case-by-case basis and in the
Corporate Compliance Officer’s sole and absolute discretion, authorize trading in the Company’s securities
during a Blackout Period (a “Hardship Waiver”) due to financial hardship or other hardships only after:
●
the person seeking a Hardship Waiver has notified the Corporate Compliance Officer in writing
(which may be by email) of the circumstances of the hardship and the amount and nature of the
proposed trade(s);
●
the person seeking a Hardship Waiver has certified to the Corporate Compliance Officer in writing
(which may be by email) no earlier than two business days prior to the proposed trade(s) that he or
she is not in possession of material non-public information concerning the Company;
A-11
●
the person seeking a Hardship Waiver agrees in writing (which may be by email) to keep
confidential (i) the fact that such person has requested a Hardship Waiver and (ii) the fact that a
Hardship Waiver has been granted or denied, as applicable.
●
the Corporate Compliance Officer has approved the trade(s) and granted a Hardship Waiver in
writing (which may be by email), which approval shall require any trade(s) to be executed no later
than three business days from the date the Hardship Waiver is approved.
Notwithstanding the foregoing, if a person who has been granted a Hardship Waiver comes into possession of
material non-public information concerning the Company after receiving such Hardship Waiver but before
executing the proposed trade(s) in the Company’s securities, such person may not execute such proposed trade(s),
despite having received a Hardship Waiver.
Under no circumstances will a Hardship Waiver (i) authorize any person to violate applicable laws
relating to trading while in possession of material non-public information or (ii) be granted to any person during
an Event-Specific Blackout Period. Any person receiving a Hardship Waiver will continue to be subject to all
other provisions of this Insider Trading Policy.
* * * * * * *
EXHIBIT 21
The Company has the following subsidiaries. Joint Venture entities are shown in italics. United Dominion Realty, L.P. is a limited
partnership with outside limited partners holding minimal percentage interests. The Company owns general and limited partnership interests
in United Dominion Realty, L.P. constituting 93.0% of the aggregate partnership interest. Entities marked with an asterisk are those entities in
which United Dominion Realty, L.P. is either a member or a partner. UDR Lighthouse DownREIT L.P. is also a limited partnership with
outside limited partners. The Company owns general and limited partnership interests in UDR Lighthouse DownREIT L.P. constituting
71.0% of the aggregate partnership interest. Entities marked with a double asterisk are those entities in which UDR Lighthouse DownREIT
L.P. owns an interest. All other entities are wholly owned.
State of Incorporation
Subsidiary
or Organization
1020 Tower GP LLC
Delaware
1020 Tower, LP
Delaware
1274 at Towson LLC
Delaware
13th And Market Properties LLC
Delaware
1532 Harrison Lender LP
Delaware
1532 Harrison Member LLC
Delaware
1745 LLC
Delaware
2000 Post Owners Association
California
2727 Turtle Creek LLC
Delaware
2727 Turtle Creek 2 LLC
Delaware
3001 Iowa Owner LLC
Delaware
322 on North Broad LLC
Delaware
345 Harrison LLC
Delaware
399 Fremont LLC
Delaware
488 SW First LLC
Delaware
AAC Funding II, Inc.
Delaware
AAC Funding III LLC**
Delaware
AAC Funding IV LP*
California
AAC Funding Partnership II*
Delaware
AAC/FSC Crown Pointe Investors, LLC
Washington
AAC/FSC Hilltop Investors, LLC
Washington
AAC/FSC Seattle Properties, LLC*
Delaware
AmberGlen Development LLC
Oregon
Andover House LLC
Delaware
Andover Member 1 LLC
Delaware
Andover Member 2 LLC
Delaware
Apartments on Chestnut Limited Partnership
Delaware
Arbors at Maitland LLC
Delaware
Ashton at Dublin Station LP
Delaware
Ashwood Commons North LLC
Washington
Bella Terra Villas LP
Delaware
Bighorn Hawthorne LLC
Delaware
Bighorn New JV LLC
Delaware
Bighorn New JV 2 LLC
Delaware
Bighorn MA REIT LLC
Delaware
Bradlee Danvers LLC
Delaware
CMP-1, LLC
Delaware
Cambridge Woods LLC
Delaware
Canterbury Apartments Holdings, L.L.C.**
Delaware
Canterbury Apartments REIT, L.L.C.**
Delaware
Central Square at Frisco LLC
Delaware
Circle Towers LLC**
Delaware
CityLine Development Phase I, LLC
Washington
CityLine Development Phase II, LLC
Washington
Coastal Monterey Properties, LP*
Delaware
State of Incorporation
Subsidiary
or Organization
Columbia City Apartments REIT LP
Delaware
Columbia City Apartments REIT GP LLC
Delaware
Columbus Square 775 LLC
Delaware
Columbus Square 795 LLC
Delaware
Columbus Square 801 LLC
Delaware
Columbus Square 805 LLC
Delaware
Columbus Square 808 LLC
Delaware
Consolidated-Hampton, LLC
Maryland
Cross Creek LLC*
Delaware
DCO 2400 14th Street LLC
Delaware
DCO 3033 Wilshire LLC
Delaware
DCO Addison at Brookhaven LP
Delaware
DCO Arbors at Lee Vista LLC
Delaware
DCO Beach Walk LP
Delaware
DCO Borgata LLC
Delaware
DCO Caroline Development LLC
Delaware
DCO Market LLC
Delaware
DCO Mission Bay LP
Delaware
DCO Pacific City LP
Delaware
DCO Realty, Inc.
Delaware
DCO Realty LP LLC
Delaware
DCO Talisker LP
Delaware
Domain Mountain View LLC
Delaware
Dominion Lake Ridge LLC
Delaware
Dominion Middle Ridge LLC
Delaware
Domus SPE General Partner, LLC
Delaware
Eastern Residential, Inc.
Delaware
Easton Partners I, LP
Delaware
Eastside Heights LLC*
Delaware
Estancia Villas LLC*
Delaware
Fiori LLC
Delaware
Flats at Palisades LLC*
Delaware
Foxborough Lodge Limited Partnership
Delaware
FP Essex Owner, LLC*
Delaware
Garrison Harcourt Square LLC
Delaware
Governour’s Square of Columbus Co. L.P.*
Delaware
HPI 2161 Sutter LP
Delaware
Heritage Communities LLC**
Delaware
Inlet Bay at Gateway, LLC
Delaware
Jamestown of St. Matthews Limited Partnership*
Delaware
Jefferson at Marina del Rey, L.P.
Delaware
Kelvin and Jamboree Properties, LLC
Delaware
Kelvin Jamboree LLC
Delaware
L.A. Southpark High Rise, LP
Delaware
Lake Merritt Apartments LP
Delaware
Lake Merritt TRS LLC
Delaware
Lenox Farms Limited Partnership
Delaware
Lightbox LLC
Delaware
Lodge at Ames Pond LLC
Delaware
Lofts at Charles River Landing, LLC
Delaware
Lofts at Palisades LLC
Delaware
MacAlpine Place Apartment Partners, Ltd.*
Florida
Management Company Services, Inc.
Delaware
Maker Rise LLC
Delaware
MCS Insurance Sub Producer Services LLC
Delaware
State of Incorporation
Subsidiary
or Organization
MCS MA REIT, Inc.
Delaware
Ninety Five Wall Street LLC*
Delaware
North Broad Condominium Association, Inc.
Pennsylvania
Northbay Properties II, L.P.*
California
One Upland LLC
Delaware
One William Urban Renewal LLC
Delaware
Pacific Los Alisos LLC
Delaware
Palo Verde LLC*
Delaware
Park Square KOP Owner LLC
Delaware
Park Square Mezzanine LLC
Delaware
Park Square Mezzanine Owner LLC
Delaware
Park Square Philly Owner LLC
Delaware
Park Square Subsidiary 1 LLC
Delaware
Park Square Subsidiary 2 LLC
Delaware
Pier 4 LLC
Delaware
Polo Park Apartments LLC*
Delaware
Portland Anthem Investor LLC
Delaware
Portland Kado Investor LLC
Delaware
Portland Revere Investor LLC
Delaware
Portland Tempo Investor LLC
Delaware
Quarters At Towson LLC
Delaware
Radius at Donelson LLC*
Delaware
Rodgers Forge Condominiums, Inc.
Maryland
Savoye LLC
Delaware
Savoye 2 LLC
Delaware
Seneca Place LLC
Delaware
Smith Owner LLC
Delaware
Smith Subsidiary 1 LLC
Delaware
Smith Subsidiary 2 LLC
Delaware
Station on Silver LLC*
Delaware
Strata Properties LP
Delaware
Tennessee Colonnade LLC*
Delaware
THC/UDR Domain College Park LLC
Delaware
Town Square Commons, LLC
District of Columbia
Towson Promenade, LLC
Delaware
Trilon Townhouses, LLC
District of Columbia
TSTW LLC
Delaware
UDR 10 Hanover LLC*
Delaware
UDR 345 Harrison LLC
Delaware
UDR 500 Penn LLC
Delaware
UDR 1200 East West LLC
Delaware
UDR 1590 Grove LLC
Delaware
UDR 1818 Platinum LLC
Delaware
UDR Altamira Place LLC
Delaware
UDR AP Block 11 Investor LLC
Delaware
UDR AP Block 11 Owner LLC
Delaware
UDR Arbor Park LLC**
Delaware
UDR Barton Creek LLC**
Delaware
UDR Brio LLC
Delaware
UDR California GP, LLC*
Delaware
UDR California GP II, LLC
Delaware
UDR California Properties, LLC
Virginia
UDR Calvert, LLC*
Delaware
UDR Calvert’s Walk Associates Limited Partnership
Maryland
UDR Calverts Walk GP, LLC
Delaware
State of Incorporation
Subsidiary
or Organization
UDR Canal I LLC*
Delaware
UDR Canal II LLC*
Delaware
UDR Canterbury LLC*
Delaware
UDR Carriage Homes, LLC
Delaware
UDR Chelsea LLC
Delaware
UDR Climate Fund Member A, LLC
Delaware
UDR Climate Fund Member B, LLC
Delaware
UDR Cool Springs I LLC
Delaware
UDR Cool Springs II LLC
Delaware
UDR Courts at Dulles LLC**
Delaware
UDR Courts at Huntington LLC*
Delaware
UDR Crane Brook LLC*
Delaware
UDR Currents on the Charles LLC
Delaware
UDR Delancey at Shirlington LLC**
Delaware
UDR Domain Brewers Hill LLC
Delaware
UDR EAS LLC
Delaware
UDR EIG Investor A LLC
Delaware
UDR EIG Investor B LLC
Delaware
UDR Eight80 I LP*
Delaware
UDR Eight80 II LP*
Delaware
UDR Eleven55 Ripley LLC**
Delaware
UDR Garrison Square LLC
Delaware
UDR Harbor Greens, L.P.*
Delaware
UDR Huntington Vista, L.P.*
Delaware
UDR Inwood LLC**
Delaware
UDR JO Investor LLC
Delaware
UDR JO Investor Member LLC
Delaware
UDR/K Venture Member LLC
Delaware
UDR Lakeline Villas LLC
Delaware
UDR Legacy at Mayland LLC
Delaware
UDR Legacy Village LLC**
Delaware
UDR Leonard Pointe LLC
Delaware
UDR Lighthouse DownREIT L.P.*
Delaware
UDR Lighthouse EAS LLC**
Delaware
UDR Marina Pointe LLC
Delaware
UDR Menifee Lender LLC
Delaware
UDR Meridian LLC
Delaware
UDR/MetLife GP II LLC
Delaware
UDR/MetLife Master Limited Partnership
Delaware
UDR/MetLife Master Limited Partnership II
Delaware
UDR Midlands Acquisition, LLC*
Delaware
UDR Milehouse LLC
Delaware
UDR/ML Venture LLC
Delaware
UDR/ML Venture 2 LLC
Delaware
UDR Newport Village LLC**
Delaware
UDR NYL Deals GP LLC
Delaware
UDR of Tennessee, L.P.*
Virginia
UDR Okeeheelee LLC*
Delaware
UDR Peridot Palms LLC
Delaware
UDR Pinebrook, L.P.*
Delaware
UDR Preserve at Gateway LLC
Delaware
UDR Presidential Greens, L.L.C.
Delaware
UDR Rancho Cucamonga, L.P.
Delaware
UDR Red Stone Ranch LLC
Delaware
UDR REACT Fund Member A LLC
Delaware
State of Incorporation
Subsidiary
or Organization
UDR REACT Fund Member B LLC
Delaware
UDR RETV Holdings IA LLC
Delaware
UDR RETV Holdings IB LLC
Delaware
UDR RETV Holdings IC LLC
Delaware
UDR RETV Holdings ID LLC
Delaware
UDR RETV Holdings IIA LLC
Delaware
UDR RETV Holdings IIB LLC
Delaware
UDR RETV Holdings IIC LLC
Delaware
UDR RETV Holdings IID LLC
Delaware
UDR RETV Holdings IIIA LLC
Delaware
UDR RETV Holdings IIIB LLC
Delaware
UDR RETV Holdings IIIC LLC
Delaware
UDR RETV Holdings IIID LLC
Delaware
UDR Ridgewood (II) Garden, LLC*
Virginia
UDR Ridge at Blue Hills LLC**
Delaware
UDR River Terrace LP
Delaware
UDR Rivergate LLC
Delaware
UDR Riverside Lender LLC
Delaware
UDR Rodgers Forge LLC
Delaware
UDR Slade LLC
Delaware
UDR Smith LLC
Delaware
UDR Steele Creek LLC*
Delaware
UDR Texas Properties LP*
Delaware
UDR Towers By The Bay LLC
Delaware
UDR Union Place LLC
Delaware
UDR Valley Forge LLC
Delaware
UDR Virginia Properties, LLC
Virginia
UDR Wellington Place LLC
Delaware
UDR Whitmore LLC**
Delaware
UDR Windsor Gardens LLC
Delaware
UDR WJV Member LLC
Delaware
UDR Woodland Apartments II, L.P.
Delaware
UDR Woodland GP, LLC
Delaware
UDRLP EAS LLC*
Delaware
UDRT of Delaware 4 LLC*
Delaware
United Dominion Realty, L.P.
Delaware
Upton Place Member LLC
Delaware
View 14 Investments LLC
Delaware
Villaggio LLC*
Delaware
VP West 1 LLC*
Delaware
VP West 2, LLC
Delaware
VPDEV 1 LLC
Delaware
VPDEV 2, LLC
Delaware
Washington Vue LLC
Delaware
Waterside at Ironbridge LLC
Delaware
Waterside Towers, L.L.C.
Delaware
West El Camino Real, LLC
Delaware
Western Residential, Inc.
Delaware
Wilshire Crescent Heights, LLC
Delaware
Windemere at Sycamore Highlands, LLC
Delaware
Winterland San Francisco Partners, a California Limited Partnership*
California
WREP II/UDR AmberGlen, L.P.
Delaware
WREP II/UDR AmberGlen General Partner LLC
Delaware
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-8 No 333-75897) pertaining to the Company’s 1999 Long-Term Incentive Plan,
(2) Registration Statement (Form S-3 No 333-129743) pertaining to the registration of 11,000,000 shares of Common Stock, including
rights to purchase Series C Junior Participating Redeemable Preferred Stock, issuable under the Company’s Dividend Reinvestment
and Stock Purchase Plan Registration Statement,
(3) Registration Statement (Form S-8 No 333-160180) pertaining to the Company’s 1999 Long-Term Incentive Plan,
(4) Registration Statement (Form S-3 No 333-167270) pertaining to the registration of 3,882,187 shares of Common Stock,
(5) Registration Statement (Form S-3 No 333-180553) pertaining to the registration of 2,569,606 shares of Common Stock,
(6) Registration Statement (Form S-3 No 333-183510) pertaining to the registration of 1,802,239 shares of Common Stock,
(7) Registration Statement (Form S-8 No 333-201192) pertaining to the Company’s 1999 Long-Term Incentive Plan,
(8) Registration Statement (Form S-3 No 333-212727) pertaining to the registration of 16,137,973 shares of Common Stock,
(9) Registration Statement (Form S-8 No 333-257566) pertaining to the Company’s 1999 Long-Term Incentive Plan,
(10)Registration Statement (Form S-3 No 333-264507) pertaining to the registration of 903,123 shares of Common Stock,
(11) Shelf Registration Statement (Form S-3 ASR No 333-269757) pertaining to the registration of an indeterminate amount of Common
Stock, Preferred Stock, Depositary Shares, Debt Securities, Guarantees of Debt Securities, Warrants, Subscription Rights, Purchase
Contracts and Purchase Units,
(12)Registration Statement (Form S-3 No 333-281135) pertaining to the registration of 3,639,510 shares of Common Stock;
of our reports dated February 18, 2025, with respect to the consolidated financial statements and schedule of UDR, Inc. and the effectiveness
of internal control over financial reporting of UDR, Inc. included in this Annual Report (Form 10-K) of UDR, Inc. for the year ended
December 31, 2024.
/s/Ernst & Young LLP
Denver, Colorado
February 18, 2025
EXHIBIT 31.1
CERTIFICATION
I, Thomas W. Toomey, certify that:
1.
I have reviewed this Annual Report on Form 10-K of UDR, Inc.;
2.
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this Report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date: February 18, 2025
/s/ Thomas W. Toomey
Thomas W. Toomey
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION
I, Joseph D. Fisher, certify that:
1.
I have reviewed this Annual Report on Form 10-K of UDR, Inc.;
2.
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this Report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this Report, based on such evaluation; and
(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
Date: February 18, 2025
/s/ Joseph D. Fisher
Joseph D. Fisher
President, Chief Investment Officer, and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION
In connection with the periodic report of UDR, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2024, as filed with the Securities and
Exchange Commission (the “Report”), I, Thomas W. Toomey, Chairman of the Board and Chief Executive Officer of the Company, hereby certify as of the date
hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the
dates and for the periods indicated.
Date: February 18, 2025
/s/ Thomas W. Toomey
Thomas W. Toomey
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 32.2
CERTIFICATION
In connection with the periodic report of UDR, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2024, as filed with the Securities and
Exchange Commission (the “Report”), I, Joseph D. Fisher, President, Chief Investment Officer, and Chief Financial Officer of the Company, hereby certify as of
the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the
dates and for the periods indicated.
President, Chief Investment Officer, and Chief Financial Officer
(Principal Financial Officer)
Date: February 18, 2025
/s/ Joseph D. Fisher
Joseph D. Fisher