) fourth-quarter 2013 funds from operations (FFO) as adjusted
came in at 35 cents per share, missing the Zacks Consensus
Estimate by a penny. However, this was in line with year-ago
quarter figure. The figure also matched with the upper end of the
company's guidance range.
AVALONBAY CMMTY (AVB): Free Stock Analysis
BRE PROPERTIES (BRE): Free Stock Analysis
METLIFE INC (MET): Free Stock Analysis Report
UDR INC (UDR): Free Stock Analysis Report
To read this article on Zacks.com click here.
For full-year 2013, UDR's FFO as adjusted of $1.39 missed the
Zacks Consensus Estimate marginally while it improved 3.0% over
the prior-year figure.
Results were adversely affected by an increase in operating
expenses and lower-than-expected top-line growth. However, higher
same-store net operating income (NOI) and revenues were the
positives for the quarter.
Behind the Headlines
Total revenue during the quarter was $190.3 million, up 5.6% year
over year. However, it lagged the Zacks Consensus Estimate of
For 2013, total revenue increased 5.9% year over year to $7.6
billion, up 9.9% year over year, while it came in line with Zacks
During the quarter, same-store revenues increased 4.5% year over
year, while same-store expenses upped 2.4%. Consequently,
same-store NOI rose 5.4% from the year-ago quarter. Same-store
physical occupancy rose 30 basis points year over year to 96.2%.
During the quarter, UDR disposed three non core communities for
$132.1 million. Notably, this included the sale of two properties
that marked the exit from the Sacramento market.
The company also formed a 51%-49% development partnership with
) for building a luxury for-rent high-rise in San Francisco.
Developments & Redevelopments
During the reported quarter, UDR spent $275 million for the
completion of three development communities consisting of 1,122
At the end of 2013, UDR's development pipeline stood at $1.2
billion, of which the company financed 64%. Moreover, UDR intends
to complete 50.5% of its $970 million active developments in 2014
while the rest of the development activity will gradually
complete by 2015 and 2016.
UDR also successfully completed the redevelopment of 155 homes
and incurred $16.5 million for the same.
As of Dec 30, 2013, UDR's liquidity amounted to $930 billion
through a combination of cash and undrawn capacity on its credit
facilities, compared with $1 billion in Sep 30, 2013. Further,
the company had total debt of $3.5 billion, in line with the last
Its net debt-to-earnings before interest, taxes, depreciation and
amortization (EBITDA) stood at 7.0x, in line with the year-ago
figure. UDR ended the quarter with 89% fixed-rated debt at a
total blended interest rate of 4.3% and a weighted average debt
maturity of 4.4 years. Fixed charge coverage ratio came in at
3.1x compared with the year-ago figure of 3.0x.
For first-quarter 2014, UDR's guidance for FFO as adjusted stood
in the range of $0.33-$0.35 per share. For full-year 2014,
guidance for the same stood in the range of $1.47-$1.53 per
In addition, for full-year 2014, UDR's guidance included
projection for same-store revenue growth in the range of 3.50% to
Though UDR 2013, the overall performance for the year was decent
as it registered positive earnings surprises in the first three
quarters of the year. Moreover, the ongoing extensive development
and redevelopment activities position the company well in upscale
markets and provide notable growth prospects. Furthermore, a
strong balance sheet with adequate liquidity bode well.
Nonetheless, the company's significant development and
redevelopment pipeline increases operational risks in the current
credit-constrained market and may undermine its growth potential
to some extent.
UDR currently carries a Zacks Rank #2 (Buy).
Among other apartment REITs,
BRE Properties Inc.
) outpaced the Zacks Consensus Estimate while
AvalonBay Communities Inc.
) reported in line earnings in their latest releases.
Note: Funds from operations, a widely used metric to gauge
the performance of REITs, is obtained after adding depreciation
and amortization and other non-cash expenses to net income.