Published on 1 May 2024 on Zacks via Yahoo Finance

UDR Meets Q1 FFOA Estimates, Beats Revenues, Ups 2024 Guidance

UDR Inc. UDR reported first-quarter 2024 funds from operations as adjusted (FFOA) per share of 61 cents, in line with the Zacks Consensus Estimate.Quarterly rental income was $411.7 million, which outpaced the Zacks Consensus Estimate of $408.6 million and came ahead of the year-ago quarter’s $398.3 million. Total revenues came in at $413.6 million.Results reflect an increase in revenues from same-store communities and growth from past accretive external investments. However, a rise in property operating and maintenance and interest expenses acted as dampeners. UDR raised certain full-year 2024 guidance ranges.On a year-over-year basis, FFOA per share climbed 1.7%. Rental income and total revenues rose 3.4% and 3.5%, respectively.Per Tom Toomey, UDR’s chairman and CEO, “We have started the year with improving leasing conditions, largely due to employment growth that has exceeded expectations and led to near-record high absorption. Our first quarter results, including 3.1 percent same-store revenue growth over the prior year period, demonstrate the strength of our strategy and the value of our operating platform.”

Inside the Headlines

In the reported quarter, same-store revenues (with concessions reflected on a straight-line basis) increased 3.1% year over year. Same-store expenses were up 7.5%. Consequently, the same-store net operating income (NOI) improved 1.2%.However, the company noted that, in the year-ago period, it had recorded a $3.7 million refundable payroll tax credit related to the Employee Retention Credit program. Excluding this benefit, year-over-year same-store expenses and NOI growth would have been 4% and 2.7%, respectively.UDR registered same-store effective blended lease rate growth of 0.8% during the quarter. The residential REIT’s weighted average same-store physical occupancy of 97.1% increased 20 basis points sequentially and 60 basis points year over year. Our estimate was pegged at 96.8%.However, property operating and maintenance expenses of $73.5 million rose 13.3% year over year. Interest expenses climbed 9.9% to $48.1 million. Our estimate was $46.5 million.