), a leading multifamily real estate investment trust (REIT), has
recently completed the sale of 15 unencumbered apartment
communities totaling 4,931 units for gross proceeds of $477
The asset sale is part of the long-term strategy of the company to
exit the Phoenix, Arizona; Jacksonville, Florida; and
Fredericksburg, Virginia markets. The divesture of the non-core
assets is also expected to fully fund the $500 million development
and redevelopment expenditures likely to be incurred by UDR in
UDR is among the best-positioned multifamily apartment REITs in the
U.S., with the majority of its portfolio located in California,
Florida and on the Atlantic Coast. These are areas where housing
costs have soared in the past few years, and despite the drop in
home values, the rent vs. ownership spread remains high. The
housing meltdown will continue to help apartment REITs like UDR and
we expect this sector to remain comparatively stable in the coming
quarters as well.
Furthermore, UDR has a geographic diversification that increases
investment opportunity and decreases the risk associated with
cyclical local real estate markets and economies. It thereby works
to increase the stability and predictability of the earnings.
UDR has also continuously upgraded the overall quality of its
portfolio by selling smaller market, older properties and replacing
them with newer assets in better long-term markets. This provides
an upside potential for the company. As of March 31, 2012, the
company owned 60,211 apartment homes, including 2,972 homes under
APARTMENT INVT (AIV): Free Stock Analysis
UDR INC (UDR): Free Stock Analysis Report
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We maintain our Neutral recommendation on UDR for the long term,
which currently has a Zacks #3 Rank that translates into a
short-term Hold rating. We also have a long-term Neutral
recommendation and a Zacks #2 Rank (short-term Buy rating) for
Apartment Investment & Management Co.
), one of the competitors of UDR.