UDR, Inc.

UDR, Inc. is a self-administered real estate investment trust (REIT) that owns, operates, acquires, renovates, develops, redevelops, disposes of, and manages multifamily apartment communities in targeted markets located in the United States. At December 31, 2025, the Company's consolidated real estate portfolio consisted of 165 communities located in 21 markets, consisting of 55,240 completed apartment homes, which are held directly or through subsidiaries, including the Operating Partnership and the DownREIT Partnership, and consolidated joint ventures. In addition, the Company has an ownership interest in 12,167 completed or to-be-completed apartment homes through unconsolidated joint ventures or partnerships, including 6,766 apartment homes owned by entities in which it holds preferred equity investments.

The Company faces intense competition for new residents across its markets, with competing communities offering amenities, rental concessions, or lower rents. Other real estate investors, including insurance companies, pension and investment funds, public and private real estate companies, and other public and private apartment REITs, compete with UDR to acquire existing properties, redevelop properties, and develop new properties, some of which may have greater resources or lower capital costs. The Company believes its competitive advantages include a fully integrated organization with property management, development, redevelopment, acquisition, marketing, sales and financing expertise; scalable operating and support systems; access to diversified sources of capital; geographic diversification with a presence in 21 markets; and a significant presence in many of its major markets that allows it to be a local operating expert.

UDR generates revenue primarily through the ownership and operation of multifamily apartment communities, deriving rental income from residents. The majority of its apartment leases have initial terms of 12 months or less. The Company also earns fees for providing management services to communities held by unconsolidated joint ventures and partnerships. Its primary customer segments are residents of its apartment homes, and it also leases retail or commercial space to third parties at certain properties. The Company's business is structured to qualify as a REIT, requiring it to distribute at least 90% of its REIT taxable income to stockholders annually.

The Company reports in two segments: Same-Store Communities and Non-Mature Communities/Other. The Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2024, and held as of December 31, 2025. For the year ended December 31, 2025, Same-Store Communities provided 95.0% of total NOI. The Non-Mature Communities/Other segment represents communities that do not meet the criteria to be included in Same-Store Communities, including recently acquired, developed and redeveloped communities, and the non-apartment components of mixed use properties. For the year ended December 31, 2025, total property NOI was $1,162,168,000 ¹, with Same-Store NOI of $1,104,177,000 ² and Non-Mature Communities/Other NOI of $57,991,000 ³.

During the year ended December 31, 2025, the Company acquired two operating communities located in Philadelphia, PA and Woodbridge, VA, increasing total assets by approximately $330.2 million ⁴. The Company commenced the development of one community located in Riverside, California, with a total of 300 apartment homes ⁵. It received gross proceeds of $211.5 million ⁶ and recognized gains of $47.9 million ⁷ from the sale of two operating communities. The Company contributed four wholly-owned operating communities to its existing joint venture with LaSalle, maintaining its 51.0% ⁸ ownership interest, resulting in the Company receiving approximately $202.8 million ⁹ of cash proceeds and recognizing a gain of $195.0 million ¹⁰ from the partial sale. The Company received distributions totaling $204.2 million ¹¹ from its unconsolidated joint ventures and partnerships, which includes $97.3 million ¹² from the full repayment of two preferred equity investments and the partial repayment of one preferred equity investment. The Company fully funded three preferred equity investments totaling $72.6 million ¹³ that own three operating communities with a total of 1,006 apartment homes ¹⁴. The Company repurchased 3.3 million ¹⁵ shares of common stock for approximately $117.8 million ¹⁶.

For the year ended December 31, 2025, total revenues increased 2.4% ¹⁷ over the prior year. Net income attributable to common stockholders was $372.9 million ¹⁸ as compared to $84.8 million ¹⁹ in the prior year. The primary drivers for the increase were higher gains from dispositions of real estate, higher total net operating income (NOI), higher interest income and other income/(expense) primarily driven by a non-cash loan reserve recorded in 2024, and lower depreciation expense. The Company achieved Same-Store revenue growth of 2.4% ²⁰ and Same-Store NOI growth of 2.3% ²¹. Net cash provided by operating activities was $902.9 million ²² compared to $876.8 million ²³ for 2024.

The Company's principal business objective is to maximize the economic returns of its apartment communities to provide stockholders with the greatest possible total return and value. To achieve this, the Company intends to continue to own and operate a diversified portfolio of apartments in targeted markets characterized by strong total income growth, high long-term working age population growth, relatively robust rental versus single-family home affordability, and a favorable demand/supply ratio for multifamily housing. The Company also aims to manage real estate cycles by taking an opportunistic approach to buying, selling, renovating, redeveloping, and developing apartment communities. The Company is focused on increasing its presence in markets with favorable job formation and income growth, high propensity to rent, strong relative affordability for rental versus homeownership, and a favorable demand/supply ratio for multifamily housing.

The Company's strategic vision includes maintaining a diversified portfolio and allocating capital to accretive investment opportunities. The Company regularly monitors its assets to increase the quality and performance of its portfolio, considering factors such as current market price, long-term job growth prospects, and operating efficiencies when deciding whether to dispose of a property. The Company's objective in developing a community is to create value while improving the quality of its portfolio, and its objective in redeveloping a community is to grow rental rates while producing a higher yielding and more valuable asset through asset quality improvement. The Company has entered into, and may continue to enter into, joint ventures through which it owns an indirect economic interest of less than 100% of the community.The Company's operating margin (property net operating income divided by property rental income) was 68.6% ²⁴ for the years ended December 31, 2025 and 2024. The Company's Same-Store operating expenses increased 2.6% ²⁵ for the year ended December 31, 2025 compared to the same period in 2024.

The Company continues to invest in new technologies to drive operating efficiencies and better meet the changing needs of its business and residents. Residents can conduct business 24 hours a day, 7 days a week, including completing online leasing applications and renewals and submitting maintenance requests. As of December 31, 2025, the Company had approximately 1,420 ²⁶ full-time associates and 6 ²⁷ part-time associates. The Company's turnover reached 19.4% ²⁸, which outperformed the industry benchmark of 34% ²⁹.

The Company's capital allocation strategy includes maintaining a strong balance sheet and structuring its debt maturity schedule to opportunistically access both secured and unsecured debt markets. During the year ended December 31, 2025, the Company repurchased 3.3 million ³⁰ shares of its common stock at an average price of $36.12 ³¹ per share for total consideration of approximately $117.8 million ³² under its share repurchase program. In 2025, the Company declared total distributions of $1.72 ³³ per common share and paid dividends of $1.715 ³⁴ per common share. The Company's annualized declared 2025 dividend of $1.72 ³⁵ represented a 1.2% ³⁶ increase over the previous year. The Company has a $1.3 billion ³⁷ unsecured revolving credit facility and a $350.0 million ³⁸ unsecured term loan. The Company has an unsecured commercial paper program under which it may issue up to a maximum aggregate amount outstanding of $700.0 million ³⁹.

Revenue growth in 2026 may be impacted by adverse developments affecting the general economy, inclusive of but not limited to economic conditions as a result of a recession or economic uncertainty, reduced occupancy rates, increased rental concessions, new supply, increased bad debt and other factors which may adversely impact the Company's ability to increase rents. The Company faces risks related to inflation/deflation, as substantial inflationary or deflationary pressures could have a negative effect on rental rates and property operating expenses. The geographic concentration of the Company's communities in certain markets could have an adverse effect on its operations if a particular market is adversely impacted by economic or other conditions; for the year ended December 31, 2025, approximately 74.5% ⁴⁰ of total NOI was generated from communities located in Metropolitan D.C., Boston, MA, Orange County, CA, the San Francisco Bay Area, CA, Dallas, TX, New York, NY, Seattle, WA, and Tampa, FL.

The Company faces risks related to the adoption of, or changes to, rent control, rent stabilization, eviction, tenants' rights and similar laws and regulations in its markets, which could have an adverse effect on its results of operations and property values. For example, in 2023, Montgomery County, Maryland enacted rent control that initially impacts a portion of the Company's portfolio in that market. In 2024, the State of New York passed the Good Cause Eviction Law, which established rent limits on certain market-rate apartments. In 2025, the State of Washington enacted statewide rent control, which initially impacts a portion of the Company's properties within the state.

Unfavorable apartment market and economic conditions could adversely affect occupancy levels, rental revenues, and the value of the Company's real estate assets. The geographic concentration of the Company's communities in certain markets, with approximately 74.5% ⁴¹ of total NOI generated from eight markets, could have an adverse effect if a particular market is impacted by economic or other conditions. The adoption of, or changes to, rent control, rent stabilization, eviction, and tenants' rights laws in the Company's markets could limit its ability to charge market rents or increase rents; for example, in 2025, the State of Washington enacted statewide rent control which initially impacts a portion of the Company's properties. The Company is subject to risks related to its indebtedness, including changing interest rates which could increase interest costs; as of December 31, 2025, the Company had approximately $673.4 million ⁴² of variable rate indebtedness outstanding, constituting approximately 11.5% ⁴³ of total outstanding indebtedness. The Company would incur adverse tax consequences if it failed to qualify as a REIT, including being subject to federal income tax on its taxable income at regular corporate rates.

Management's message emphasizes a commitment to shareholders, noting that in July 2025, the Company marked its 53rd year as a REIT and, in October 2025, paid its 212th consecutive quarterly dividend. The Company's strategic vision is to be the multifamily public REIT of choice for investors, to be realized by executing on strategic objectives: maintaining a diversified portfolio and allocating capital to accretive investment opportunities, maintaining a strong balance sheet, consistently driving operating excellence, and advancing a strong corporate culture and striving for high resident satisfaction. Management highlights 2025 achievements including net income attributable to common stockholders of $372.9 million ⁴⁴, total revenues increasing 2.4% ⁴⁵ over the prior year, Same-Store revenue growth of 2.4% ⁴⁶ and Same-Store NOI growth of 2.3% ⁴⁷, and the repurchase of 3.3 million ⁴⁸ shares of common stock for approximately $117.8 million ⁴⁹.