UDR Q4 FFOA Meets, Revenues Beat Estimates, Occupancy Rises
Zacks Investment Research | Feb 12, 2020 07:08AM ET
UDR Inc.’s (NYSE:UDR) fourth-quarter 2019 funds from operations as adjusted (FFOA) per share of 54 cents came in line with the Zacks Consensus Estimate. The bottom line was higher than the prior-year quarter’s reported figure of 50 cents.
Fourth-quarter revenues from rental income climbed 9.8% year over year to $302.75 million. Further, the figure surpassed the Zacks Consensus Estimate of $298.49 million.
Results reflect year-over-year growth in same-store net operating income (NOI) and weighted average same-store physical occupancy.
In full-year 2019, FFOA per share came in at $2.08, up 6.1% year over year. It also matched the Zacks Consensus Estimate. Rental income of $1.14 billion, which jumped 10%, backed this upside.
Inside the Headlines
During the fourth quarter, same-store revenues increased 3.3% year over year. However, same-store expenses jumped 1.3%. Consequently, same-store NOI improved 4.1%. The residential REIT’s weighted average same-store physical occupancy expanded 10 basis points (bps), year over year, but remained flat sequentially at 96.9%. Fourth-quarter annualized-rate of turnover decreased 60 bps to 40.2%.
UDR’s wholly owned acquisition activity for the quarter included the buyout of one community — The Slade at Channelside — for an aggregate of $85.2 million.
At the end of the reported quarter, the company’s Developer Capital Program investment, including accrued return, totaled $405.3 million.
At the end of the fourth quarter, UDR’s development pipeline aggregated $278.5 million at its pro-rata ownership interest, out of which, 25% has already been funded.
As of Dec 31, 2019, the company had around $866.5 million of liquidity through a combination of cash and undrawn capacity on its credit facilities. Additionally, its total debt was $4.7 billion as of the same date.
Guidance
The company has issued projections for first-quarter 2020. For the quarter, UDR projects FFOA per share in the 53-55 cents range. The Zacks Consensus Estimate for the same is pegged at 54 cents.
Further, the company expects 2020 FFOA per share in the range of $2.18-$2.22. The consensus estimate for the same is $2.21. Moreover, it anticipates same-store NOI growth of 2.9-3.9% for the ongoing year.
Conclusion
UDR continued to implement its Next Generation Operating Platform strategy during the reported quarter. This facilitated year-over-year controllable operating margin expansion of 60 bps to 84.8%.
Additionally, it completed nearly 30,370 SmartHome installations in 2019. These technological and process initiatives will strengthen the company’s operating platform, enabling it to enjoy greater efficiencies.
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