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UDR Says Macro Forces Remain Supportive of Apartment Fundamentals

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UDR produced strong results across all aspects of its business during the quarter and for the full year. So said Tom Toomey, chairman and CEO on the firm’s Q4 earnings call. “Like many REITs, our stock took a wild ride in 2018, but macroeconomic forces remained supportive of apartment fundamentals and our best-in-class operations, diversified portfolio and disciplined capital allocation allowed us to take advantage.”

According to Toomey, the company produced sector-leading top line growth, twice raised same-store and earnings guidance ranges and finished the year at the top end of its FFO adjusted per share range. I

From a high-level perspective, he said he expects 2019 to be relatively similar to 2018, that is solid economics, demographics and fundamental backdrop, accompanied by bouts of share price volatility throughout the year.

“UDR tends to perform well in this type of environment,” he said. “In 2019, we again expect to be near the top of the group in same-store growth with better flow-through to the bottom line as our large developments move towards stabilization and we take advantage of embedded opportunities like the option asset purchases completed subsequent to year end. Should we encounter a different 2019 economic environment, I am confident that UDR is setup well for success on a relative basis.”

He also noted that he doesn’t anticipate any meaningful changes to the company’s overall strategy in 2019. “In 2018, we set forth two key areas that would enhance UDR’s cash flow growth in the years ahead, being the next iteration of our operating platform and capital allocation that will increasingly be influenced by predictive analytics. In both, we see the adoption of technology as a disruptive and driving factor. Historically, we have benefited from a number of technology driven initiatives and as a result have fostered a culture that embraces these advances. This is an advantage we will continue to grow moving forward.”