UDR, Inc. UDR recently issued its preliminary financial and operating results for the fourth quarter of 2024. Moreover, the company also provided an update on its investment activities.

This residential REIT expects funds from operations (FFO) as adjusted per share to be 63 cents for the fourth quarter of 2024 and $2.48 for 2024. Both of these are the midpoints for the guidance range previously provided in the third-quarter 2024 earnings release.

Same-store revenues year-over-year growth is expected to be 2.5% and 2.3% for the fourth quarter and full-year 2024, respectively. Same-store expenses is expected to increase 3.4% and 4.3% for the fourth quarter and full-year 2024, respectively. Same-store net operating income is likely to be 2.1% and 1.5% for the fourth quarter and full-year 2024, respectively. Full-year 2024 growth expectation for all three metrics is better than the midpoints of previously provided guidance.

Preliminary same-store weighted average physical occupancy for the fourth quarter of 2024 improved to 96.8% from 96.3% sequentially. However, effective blended lease rate for the fourth quarter shows a decline of 0.6% against the 1.8% growth reported in the last quarter.

UDR’s Investment Activities

UDR entered into agreements to sell Leonard Pointe, a 188-home apartment community in New York and One William, a 185-home apartment community in New Jersey. The total gross proceeds generated from the sale are expected to be approximately $211.5 million. Subject to due diligence and standard closing conditions, the transactions are expected to conclude in the first quarter of 2025.

In connection with the sponsor refinancing the joint venture’s (JV) senior construction loan, the company received a $38.5 million paydown on its preferred equity investment in Upton Place, which is a recently developed 689-home apartment development in Metropolitan Washington, D.C. The paydown represents nearly 55% of the company’s preferred equity investment in the joint venture.

The company expects to record a non-cash loan reserve of approximately $37 million related to its JV loan investment in 1300 Fairmount, which is a 478-home apartment community in Philadelphia, PA. This will be reflected in the company’s reported net income and FFO.

Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 1.6% compared with the industry’s growth of 2.8%.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the residential REIT sector are Equity Lifestyle Properties ELS and Veris Residential VRE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Equity Lifestyle’s 2024 FFO per share has been revised marginally north over the past two months to $2.92.

The Zacks Consensus Estimate for Veris Residential’s 2024 FFO per share has been revised 7% upward in the past month to 61 cents.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

United Dominion Realty Trust, Inc. (UDR) : Free Stock Analysis Report

Equity Lifestyle Properties, Inc. (ELS) : Free Stock Analysis Report

Veris Residential, Inc. (VRE) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research