UDR, Inc. [UDR] Filings

10-Q 1 udr-20230930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number

1-10524

UDR, Inc.

(Exact name of registrant as specified in its charter)


Maryland	54-0857512
(State or other jurisdiction of	(I.R.S. Employer
incorporation of organization)	Identification No.)

1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129

(Address of principal executive offices) (zip code)

(720) 283-6120

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	UDR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ⌧	Accelerated Filer ◻	Non-Accelerated Filer ◻	Smaller Reporting Company ☐
			Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

The number of shares of UDR, Inc.’s common stock, $0.01 par value, outstanding as of October 24, 2023 was 328,928,134.

Table of Contents

UDR, INC.

INDEX

	PAGE
PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022 (audited)	3

Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)	4

Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2023 and 2022 (unaudited)	5

Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2023 and 2022 (unaudited)	6

Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)	8

Notes to Consolidated Financial Statements (unaudited)	10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	40

Item 3. Quantitative and Qualitative Disclosures About Market Risk	57

Item 4. Controls and Procedures	57

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	58

Item 1A. Risk Factors	58

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	74

Item 3. Defaults Upon Senior Securities	75

Item 4. Mine Safety Disclosures	75

Item 5. Other Information	75

Item 6. Exhibits	76

Signatures	77





Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

Table of Contents

UDR, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	September 30,		December 31,
	2023		2022
	(unaudited)		(audited)
ASSETS
Real estate owned:
Real estate held for investment	$	15,779,481	$	15,365,928
Less: accumulated depreciation		(6,117,312)		(5,762,205)
Real estate held for investment, net		9,662,169		9,603,723
Real estate under development (net of accumulated depreciation of $0 and $296, respectively)		139,143		189,809
Real estate held for disposition (net of accumulated depreciation of $0 and $0, respectively)		—		14,039
Total real estate owned, net of accumulated depreciation		9,801,312		9,807,571

Cash and cash equivalents		1,624		1,193
Restricted cash		30,831		29,001
Notes receivable, net		209,297		54,707
Investment in and advances to unconsolidated joint ventures, net		963,927		754,446
Operating lease right-of-use assets		191,499		194,081
Other assets		221,572		197,471
Total assets	$	11,420,062	$	11,038,470

LIABILITIES AND EQUITY
Liabilities:
Secured debt, net	$	1,238,240	$	1,052,281
Unsecured debt, net		4,514,582		4,435,022
Operating lease liabilities		186,701		189,238
Real estate taxes payable		68,900		37,681
Accrued interest payable		27,071		46,671
Security deposits and prepaid rent		50,571		51,999
Distributions payable		149,615		134,213
Accounts payable, accrued expenses, and other liabilities		125,979		153,220
Total liabilities		6,361,659		6,100,325

Commitments and contingencies (Note 13)

Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership		907,269		839,850

Equity:
Preferred stock, no par value; 50,000,000 shares authorized at September 30, 2023 and December 31, 2022:
8.00% Series E Cumulative Convertible; 2,686,308 and 2,686,308 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		44,614		44,614
Series F; 11,891,530 and 12,100,514 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		1		1
Common stock, $0.01 par value; 450,000,000 shares authorized at September 30, 2023 and December 31, 2022:
328,904,161 and 328,993,088 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		3,289		3,290
Additional paid-in capital		7,487,515		7,493,423
Distributions in excess of net income		(3,392,855)		(3,451,587)
Accumulated other comprehensive income/(loss), net		8,360		8,344
Total stockholders’ equity		4,150,924		4,098,085
Noncontrolling interests		210		210
Total equity		4,151,134		4,098,295
Total liabilities and equity	$	11,420,062	$	11,038,470

See accompanying notes to consolidated financial statements.

Table of Contents

UDR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
REVENUES:
Rental income	$	408,359	$	390,023	$	1,209,764	$	1,113,952
Joint venture management and other fees		1,772		1,274		4,464		3,778
Total revenues		410,131		391,297		1,214,228		1,117,730
OPERATING EXPENSES:
Property operating and maintenance		71,599		66,769		205,294		185,658
Real estate taxes and insurance		58,104		58,236		173,590		164,788
Property management		13,271		12,675		39,317		36,203
Other operating expenses		4,611		3,746		11,902		13,485
Real estate depreciation and amortization		167,551		166,781		505,776		497,987
General and administrative		15,159		15,840		49,091		47,333
Casualty-related charges/(recoveries), net		(1,928)		901		3,362		1,210
Other depreciation and amortization		3,692		3,430		11,022		9,521
Total operating expenses		332,059		328,378		999,354		956,185
Gain/(loss) on sale of real estate owned		—		—		325,885		—
Operating income		78,072		62,919		540,759		161,545

Income/(loss) from unconsolidated entities		5,508		10,003		24,912		4,186
Interest expense		(44,664)		(39,905)		(133,519)		(112,653)
Interest income and other income/(expense), net		(3,069)		(7,495)		8,388		(6,934)
Income/(loss) before income taxes		35,847		25,522		440,540		46,144
Tax (provision)/benefit, net		(428)		(377)		(2,013)		(1,032)
Net income/(loss)		35,419		25,145		438,527		45,112
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership		(2,554)		(1,533)		(27,137)		(2,684)
Net (income)/loss attributable to noncontrolling interests		(7)		(7)		(23)		(34)
Net income/(loss) attributable to UDR, Inc.		32,858		23,605		411,367		42,394
Distributions to preferred stockholders — Series E (Convertible)		(1,221)		(1,106)		(3,626)		(3,307)
Net income/(loss) attributable to common stockholders	$	31,637	$	22,499	$	407,741	$	39,087

Income/(loss) per weighted average common share:
Basic	$	0.10	$	0.07	$	1.24	$	0.12
Diluted	$	0.10	$	0.07	$	1.24	$	0.12

Weighted average number of common shares outstanding:
Basic		328,760		324,701		328,835		320,378
Diluted		329,201		325,686		329,283		321,629

See accompanying notes to consolidated financial statements.

Table of Contents

UDR, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(In thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income/(loss)	$	35,419	$	25,145	$	438,527	$	45,112
Other comprehensive income/(loss), including portion attributable to noncontrolling interests:
Other comprehensive income/(loss) - derivative instruments:
Unrealized holding gain/(loss)		1,314		5,048		5,336		13,988
(Gain)/loss reclassified into earnings from other comprehensive income/(loss)		(2,110)		(313)		(5,332)		(28)
Other comprehensive income/(loss), including portion attributable to noncontrolling interests		(796)		4,735		4		13,960
Comprehensive income/(loss)		34,623		29,880		438,531		59,072
Comprehensive (income)/loss attributable to noncontrolling interests		(2,521)		(1,840)		(27,148)		(3,638)
Comprehensive income/(loss) attributable to UDR, Inc.	$	32,102	$	28,040	$	411,383	$	55,434

See accompanying notes to consolidated financial statements.

Table of Contents

UDR, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except per share data)

(Unaudited)


							Distributions		Accumulated Other Comprehensive
	Preferred		Common		Paid-in		in Excess of		Income/(Loss),		Noncontrolling
	Stock		Stock		Capital		Net Income		net		Interests		Total
Balance at June 30, 2023	$	44,615	$	3,295	$	7,508,616	$	(3,445,679)	$	9,116	$	210	$	4,120,173
Net income/(loss) attributable to UDR, Inc.		—		—		—		32,858		—		—		32,858
Other comprehensive income/(loss)		—		—		—		—		(756)		—		(756)
Issuance/(forfeiture) of common and restricted shares, net		—		—		1,842		—		—		—		1,842
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership and DownREIT Partnership		—		—		2,060		—		—		—		2,060
Common stock distributions declared ($0.42 per share)		—		—		—		(138,111)		—		—		(138,111)
Repurchase of common shares		—		(6)		(25,003)		—		—		—		(25,009)
Preferred stock distributions declared-Series E ($0.4548 per share)		—		—		—		(1,221)		—		—		(1,221)
Adjustment to reflect redemption value of redeemable noncontrolling interests		—		—		—		159,298		—		—		159,298
Balance at September 30, 2023	$	44,615	$	3,289	$	7,487,515	$	(3,392,855)	$	8,360	$	210	$	4,151,134


							Distributions		Accumulated Other Comprehensive
	Preferred		Common		Paid-in		in Excess of		Income/(Loss),		Noncontrolling
	Stock		Stock		Capital		Net Income		net		Interests		Total
Balance at December 31, 2022		44,615		3,290		7,493,423		(3,451,587)		8,344		210		4,098,295
Net income/(loss) attributable to UDR, Inc.		—		—		—		411,367		—		—		411,367
Other comprehensive income/(loss)		—		—		—		—		16		—		16
Issuance/(forfeiture) of common and restricted shares, net		—		2		4,808		—		—		—		4,810
Issuance of common shares through public offering, net		—		—		(473)		—		—		—		(473)
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership and DownREIT Partnership		—		3		14,760		—		—		—		14,763
Common stock distributions declared ($1.26 per share)		—		—		—		(414,808)		—		—		(414,808)
Repurchase of common shares		—		(6)		(25,003)		—		—		—		(25,009)
Preferred stock distributions declared-Series E ($1.3644 per share)		—		—		—		(3,626)		—		—		(3,626)
Adjustment to reflect redemption value of redeemable noncontrolling interests		—		—		—		65,799		—		—		65,799
Balance at September 30, 2023	$	44,615	$	3,289	$	7,487,515	$	(3,392,855)	$	8,360	$	210	$	4,151,134


							Distributions		Accumulated Other Comprehensive
	Preferred		Common		Paid-in		in Excess of		Income/(Loss),		Noncontrolling
	Stock		Stock		Capital		Net Income		net		Interests		Total
Balance at June 30, 2022	$	44,765	$	3,249	$	7,243,825	$	(3,426,760)	$	4,345	$	210	$	3,869,634
Net income/(loss) attributable to UDR, Inc.		—		—		—		23,605		—		—		23,605
Other comprehensive income/(loss)		—		—		—		—		4,434		—		4,434
Issuance/(forfeiture) of common and restricted shares, net		—		—		2,082		—		—		—		2,082
Issuance of common shares through public offering, net		—		18		99,659		—		—		—		99,677
Conversion of Series E Cumulative Convertible shares		(150)		1		149		—		—		—		—
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership and DownREIT Partnership		—		—		1,558		—

UDR, Inc. [UDR] Filings
10-Q	[2023-10-27]
10-Q	[2023-07-27]
10-Q	[2023-04-27]
10-K	[2023-02-13]
10-Q	[2022-10-27]
10-Q	[2022-07-27]
10-Q	[2022-04-27]
10-K	[2022-02-15]
10-Q	[2021-10-27]
10-Q	[2021-07-29]
10-Q	[2021-04-28]
10-K	[2021-02-18]
10-Q	[2020-10-30]
10-Q	[2020-07-29]
10-Q	[2020-05-07]
10-K	[2020-02-18]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-19]
10-Q	[2018-10-30]
10-Q	[2018-07-31]
10-Q	[2018-04-26]
10-K	[2018-02-20]
10-Q	[2017-10-31]
10-Q	[2017-07-27]
10-Q	[2017-04-25]
10-K	[2017-02-21]
10-Q	[2016-10-26]
10-Q	[2016-07-27]
10-Q	[2016-04-26]
10-K	[2016-02-23]
10-Q	[2015-10-27]
10-Q	[2015-07-28]
10-Q	[2015-04-28]
10-K	[2015-02-24]
10-Q	[2014-10-29]
10-Q	[2014-07-29]
10-Q	[2014-04-29]
10-K	[2014-02-25]
10-Q	[2013-10-29]
10-Q	[2013-07-30]
10-Q	[2013-05-02]
10-K	[2013-02-27]
10-Q	[2012-10-31]
10-Q	[2012-08-01]
10-Q	[2012-05-02]
10-K	[2012-02-27]