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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
UDR — frequently asked questions
Is UDR Inc. overvalued?
In our latest published analysis dated 2026-10-12, UDR looks meaningfully overvalued. The price recorded at analysis is 34,0 USD versus our fair value of 26,3 USD; the high endpoint is presented separately as potential value of 38,8 USD. That implies roughly 22.8% downside to fair value at that date.
Our latest published report, analyzed 2026-10-12, gives UDR a fair value of 26,3 USD and a potential value of 38,8 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for UDR Inc.'s archetype; it is a dated research output, not a live price.
Should I buy UDR now?
Our latest published rating for UDR, analyzed 2026-10-12, is Sell. UDR Inc. looks meaningfully overvalued at the analysis-date price of 34,0 USD versus fair value of 26,3 USD; potential value is 38,8 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for UDR?
The dedicated bear-case section in our report analyzed 2026-10-12 documents UDR Inc.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is UDR's rating?
Our latest published rating for UDR, analyzed 2026-10-12, is Sell, with a published moat assessment of 6.5/10 (Narrow). It reflects our fair value of 26,3 USD, the potential value of 38,8 USD, and the price recorded at analysis (34,0 USD).
Ten raport nie został jeszcze przetłumaczony. Odśwież za kilka minut, gdy kolejka tłumaczeń go przetworzy.
§1 Podsumowanie wykonawczeEN
Odpowiedź w 30 sekundSell
Cena a wartość
Cena
$34.02
Wartość godziwa
$26.27
Wartość potencjalna
$38.80
Stan na
2026-10-12
Dlaczego to może zadziałać
A sharper-than-expected collapse in national multi-family construction starts coupled with prompt interest rate cuts, allowing Sunbelt new lease rates to rebound and easing debt refinancing burdens.
Co zmieniłoby naszą ocenę
Prolonged higher-for-longer macro interest rate regime forcing debt refinancing at 7.0%+ coupons, driving cost of equity above 10.12%.
UDR Inc. is rated Sell with an intrinsic fair value midpoint of $26.27 per share, indicating a -22.78% implied return from the current trading price of $34.02 as severe Sunbelt apartment new lease rate deflation and a $1.13B debt maturity wall challenge rich forward valuation multiples.
UDR, Inc. operates a premier multifamily housing portfolio spanning 60,259 apartment homes across major coastal and Sunbelt metropolitan areas. While 2Q 2026 operational execution exceeded previous management expectations—prompting an increase in the full-year 2026 Same-Store NOI growth guidance midpoint to 0.625% and FFOA per diluted share guidance to $2.53 —underlying market dynamics reveal sharp geographical bifurcation. Outperformance in coastal hubs such as San Francisco (SS NOI +6.5%) and New York (SS NOI +6.9%) is being countered by significant new lease rate declines in the Southeast (-8.0%) and Southwest (-7.9%), where multi-family supply deliveries remain elevated.
From a valuation and capital structure standpoint, UDR's risk-reward profile is unattractive. At $34.02 per share, UDR trades at an NTM forward P/E multiple of 51.55x, a notable premium to peers MAA (35.53x), INVH (37.56x), and EQR (41.09x). Fair value of $26.27 reflects an implied downside of -22.78%. Furthermore, UDR carries $5.99B of total debt and faces $808.35M in 2026 and $317.91M in 2027 debt maturities, which must be refinanced at prevailing market debt yields of 6.78% compared to its current 3.4% weighted average coupon. Compounded by a 2.84% ROIC that fails to cover its 7.6802% WACC, the stock warrants a Sell rating.
Operating Scale and Centralized Management Platform
UDR manages 60,259 apartment homes across 186 communities, utilizing proprietary operating technology and centralized management that keeps controllable property expenses at 56.9% of total same-store expenses.
Geographic Concentration in Supply-Constrained Coastal Infill Submarkets
UDR maintains concentrated infill assets in high-barrier coastal markets, including San Francisco (9.7% of SS NOI, +8.0% revenue growth in 2Q 2026) and New York (6.2% of SS NOI, $5,340 monthly revenue per occupied home).
Cycle upside
In a multifamily upcycle, robust job growth and single-family home unaffordability drive apartment occupancy above 97%, enabling landlords to push new and renewal lease rates well above inflation. Tight housing supply allows rapid absorption of newly completed units, leading to mid-to-high single-digit same-store NOI growth and substantial margin expansion across institutional-grade portfolios.
Rekomendacja domu
We assign a Sell rating to UDR Inc.. At $34.02 per share, the stock trades at a 29.50% premium to its fair value midpoint of $26.27 and an elevated forward P/E of 51.55x. Given structural headwinds including negative new lease rates in Sunbelt markets and imminent refinancing of $1.13B of low-coupon debt at 6.78%+ market rates, investors should eliminate exposure.
Przegląd spółki
UDR, Inc. (NYSE: UDR), an S&P 500 company, is a multifamily real estate investment trust that acquires, develops, redevelops, and manages apartment communities across targeted coastal and sunbelt markets in the United States. Operating for over 54 years, the company focuses on delivering housing solutions across major metropolitan areas.
As of June 30, 2026, UDR owned or held an ownership position in 60,259 apartment homes across 186 communities, including 52,426 same-store homes, 1,512 non-mature homes, 5,401 unconsolidated joint venture homes, and 685 homes under active development.
§2 Scenariusz negatywnyEN
Our stress test evaluates the concurrent realization of high refinancing coupons and extended rental concession pressure. UDR carries $5,994,848,256 of total debt as of October 2026, with $808.35M maturing in 2026 and $317.91M in 2027. Refinancing this $1.13B maturity block from its existing 3.59% and 3.54% coupons to prevailing market debt yields of 6.78% increases annual interest expense by over $30M, directly reducing FFOA. Simultaneously, submarket apartment completions across the Sunbelt have triggered severe lease discounting, with 2Q 2026 new lease rates contracting -8.0% in the Southeast and -7.9% in the Southwest. If concession pressure spills into coastal portfolios and compresses operating margins below 23.0%, UDR experiences compounding cash flow deterioration and multiple contraction toward historical troughs.
Same-store NOI growth declines below -2.0% YoY portfolio-wide.
Debt refinancing rates exceed 7.0%, elevating the cost of capital.
Terminal exit multiple de-rates by 20% to historical trough levels.
In the bear scenario, persistent multi-family apartment oversupply across Sunbelt and secondary submarkets spills into coastal metros, dragging portfolio-wide blended lease growth negative. Corporate operating margins compress under escalating tenant concession packages and municipal tax increases. Concurrently, a higher-for-longer macro interest rate regime forces debt refinancing at elevated rates, increasing the equity discount rate and driving intrinsic equity valuation lower.
Jak ta teza może się załamać
Prolonged higher-for-longer macro interest rate regime forces debt refinancing at 7.0%+ coupons and pushes equity discount rate upward by 200 bps.
UDR carries $5.99B of total debt, with $808.35M maturing in 2026 and $317.91M in 2027 against pre-tax market debt costs of 6.78%. Current computed moderate cost of equity is 8.1209%. A 200 bps upward shock pushing Ke above 10.12% drives an estimated -28.5% fair value contraction.2,4
FV impact
-14.7%
Cost of capital 2 points higher
Trigger
Sygnały wczesnego ostrzegania do monitorowania
Pięć zdarzeń, które osłabiłyby naszą tezę inwestycyjną.
01
Effective New Lease Rate Growth (Sunbelt)
Deepening negative new lease rate spreads in Sunbelt submarkets accelerate blended rent deflation and impair property-level NOI.
Obecnie:-8.0% Southeast, -7.9% Southwest in 2Q 2026
Alarm, jeśliSustained new lease rate declines below -10.0%
UDR's competitive position is anchored by a portfolio of 60,259 apartment homes concentrated in dense, supply-constrained coastal submarkets and select Sunbelt growth corridors. The company achieves moderate scale economies through its Next Generation Operating Platform, which centralizes leasing, maintenance dispatch, and resident self-service, keeping controllable property expenses to 56.9% of total same-store operating expenses. This structural platform provides moderate operating efficiency advantages relative to smaller, fragmented private apartment owners.
However, residential real estate is fundamentally characterized by low resident switching costs upon lease expiration. In supply-rich submarkets across the Southeast and Southwest, excess multi-family construction has severely compromised pricing power, driving 2Q 2026 new lease rates down -8.0% in Tampa, Orlando, and Nashville, and -7.9% in Dallas and Austin. Furthermore, with ROIC at 2.84% compared to a WACC of 7.6802%, UDR generates a negative economic value spread, supporting a Narrow rather than Wide economic moat rating.
Zysk ekonomiczny
UDR's operations require substantial capital deployment across a $9.07B invested capital base. Generating FY2025 net income of $377.70M yields an estimated ROIC of 2.84%, which trails the company's computed WACC of 7.6802% and pre-tax cost of debt of 6.78%. This negative economic spread illustrates that current rental operations do not earn excess returns over the cost of capital.2,5
6.5/ 10
Narrow
Sources of advantage
01Operating Scale and Centralized Management Platform — UDR manages 60,259 apartment homes across 186 communities, utilizing proprietary operating technology and centralized management that keeps controllable property expenses at 56.9% of total same-store expenses.Moderate
02Geographic Concentration in Supply-Constrained Coastal Infill Submarkets — UDR maintains concentrated infill assets in high-barrier coastal markets, including San Francisco (9.7% of SS NOI, +8.0% revenue growth in 2Q 2026) and New York (6.2% of SS NOI, $5,340 monthly revenue per occupied home).Moderate
Znane zagrożenia dla przewagi
Zagrożenie
Powaga
Oś czasu
Złagodzenie
Severe Submarket Apartment Oversupply in Sunbelt Metros
high
12-24 months
Reallocating capital via dispositions of non-core communities ($403.5M sold in 1H 2026) and prioritizing resident retention, which reached an all-time high of 60% in 2Q 2026.
Refinancing Wave on $1.13B of Debt Maturing Through 2027 at Higher Interest Rates
The highlighted cell is Fair value when every assumption sits at its base level ($26.27). Each row and column shows what Fair value becomes when one assumption moves.
In the base scenario, UDR delivers moderate same-store NOI growth in line with raised guidance, as coastal market outperformance in San Francisco and New York balances out negative new lease rates across Sunbelt submarkets. Property operating margins expand modestly through property automation. Refinancing of maturing debt occurs at higher market rates, keeping corporate interest expense elevated but manageable, stabilizing cash flows and supporting the annual dividend. Fair value is determined at $26.27.
Maintain Sell; Observe whether Sunbelt lease renewal spreads offset new lease discounts without altering risk-off portfolio positioning.
Wyzwalacz: Quarterly FFOA per diluted share exceeding guidance and same-store NOI growth accelerating year-over-year.
An earnings beat driven primarily by coastal occupancy outperformance does not eliminate structural refinancing pressures on $1.13B of maturing debt or the negative economic spread between ROIC (2.84%) and WACC (7.6802%).
Zgodnie
Maintain Sell; Track quarterly debt refinancing rates and monitor resident turnover against the raised 2026 guidance midpoint.
Wyzwalacz: Quarterly FFOA per diluted share and same-store NOI growth tracking within established management guidance ranges.
Inline performance confirms current raised full-year 2026 guidance (FFOA midpoint $2.53) but confirms modest organic NOI growth of 0.625% and leaves shares overvalued relative to the $26.27 fair value midpoint.
Poniżej
Maintain Sell; Accelerate position reduction and verify liquidity buffer headroom across credit facility covenants.
Wyzwalacz: Quarterly FFOA per diluted share falling below guidance ranges or same-store NOI growth turning negative portfolio-wide.
A quarterly results miss indicates that Sunbelt rent discounts are accelerating or property operating expenses are outstripping guidance, accelerating multiple de-rating toward trough valuations.
Jakość wyników
UDR's reported earnings reflect substantial non-GAAP adjustments. In 2Q 2026, GAAP diluted net income per share was $0.21 ($69.04M total), benefiting from $35.70M in real estate disposition gains. NAREIT FFO per diluted share was $0.60 after adding back $160.12M of real estate depreciation and amortization. FFO as Adjusted reached $0.64 after adding back $8.42M in legal costs and $3.07M in casualty-related charges. Deducting $28.47M in recurring capital expenditures yielded AFFO of $0.56 per share, highlighting that free operational cash generation is heavily reliant on recurring real estate depreciation addbacks.
Dynamika prognoz
Analyst consensus estimate revisions following 2Q 2026 earnings have remained essentially flat. FY2026 diluted EPS consensus adjusted marginally from $1.04 to $1.04, while FY2026 revenue consensus eased from $1,701.63M to $1,700.11M. For FY2027, diluted EPS consensus held completely unchanged at $0.56, reflecting limited analyst conviction in earnings acceleration.1
Metryki do obserwacji przed publikacją
01
Wskaźnik:
Sunbelt Effective New Lease Rate Growth
BieżącySoutheast effective new lease rates fell -8.0% and Southwest fell -7.9% in 2Q 2026.
Dlaczego to ważne
New lease rate trends reveal whether submarket apartment supply absorption is stabilizing or forcing deeper rental concessions.
02
Wskaźnik:
Refinancing Costs on 2026-2027 Debt Maturities
Bieżący$808.35M maturing in 2026 at a 3.59% weighted average interest rate, and $317.91M in 2027 at 3.54%.
Dlaczego to ważne
Refinancing $1.13B of debt against prevailing 6.78% market debt costs directly expands interest expense.
In FY2025, UDR generated operating cash flow of $902.89M against capital expenditures of $288.94M, yielding free cash flow of $613.95M. In 1H 2026, UDR generated $439.70M in FFO as Adjusted ($1.25 per diluted share/unit) and AFFO of $390.53M ($1.11 per diluted share/unit) after deducting $49.17M of recurring capital expenditures. While operating cash flow comfortably covers the $0.87 per share declared dividend in 1H 2026, discretionary free cash flow is substantially constrained once development commitments ($147.6M currently under construction) and debt principal amortization are accounted for.4,5,6
Alokacja kapitału
UDR's capital allocation strategy prioritizes recurring reinvestment, selective development, and share repurchases funded partly through non-core asset sales. In 2Q 2026, the company expanded its share repurchase authorization to 30 million shares and repurchased 5.5 million shares for $200.3M at an average price of $36.49 ($418.0M total repurchased since September 2025 at $36.32 per share). To fund capital activities, UDR completed $403.5M of wholly owned dispositions in 1H 2026 (including assets in Denver, Baltimore, Seattle, Tampa, and Nashville) and has an additional $252.5M under contract. On the investment side, UDR committed $181.3M ($38.0M funded) to develop 4848 at Alex West in Northern Virginia and settled debt/preferred equity joint ventures to acquire properties in Portland and Los Angeles for $119.6M. Meanwhile, the company pays an annualized common dividend of $1.74 per share ($0.15 per month), absorbing approximately $565M annually.
UDR's ROIC of 2.84% reflects stable residential real estate asset performance, but it is constrained by a large invested capital base of $9.07B and real estate depreciation.
ROIC of 2.84% falls 484 bps short of UDR's computed WACC of 7.6802% and trails pre-tax debt cost of 6.78%, confirming negative economic value creation.
Geographic Bifurcation Between Coastal Strength and Sunbelt Weakness
In 2Q 2026, San Francisco delivered SS NOI growth of +6.5% and New York delivered +6.9%, whereas Southeast SS NOI fell -2.0% and Southwest fell -2.2%.
Overall same-store revenue growth (+1.8%) is entirely supported by coastal markets, leaving earnings vulnerable if coastal demand moderates before Sunbelt absorption completes.
UDR faces $808.35M of debt maturities in 2026 at a 3.59% coupon and $317.91M in 2027 at 3.54%, while prevailing pre-tax debt costs are 6.78%.
Refinancing $1.13B of debt over the next 18 months will expand annual corporate interest expense above current $187M-$195M .
Najnowsze przychody11,4 mln USDCAGR przychodów −0,0%
Marża operacyjna4872,9%10 okresów fiskalnych
Najnowsze wolne przepływy pieniężne613,9 mln USDFY2025
Dług netto5,8 mld USDFY2025
Struktura rachunku zysków i stratJak skala działalności przekłada się na raportowany zysk.30 cze 2026
StockMarketAgent.AI
Przychody425,4 mln USDKoszt sprzedaży−142,9 mln USDZysk brutto282,5 mln USDKoszty operacyjne−190 mln USDZysk operacyjny92,5 mln USDPozycje pozaoperacyjne i podatki−23,4 mln USDZysk netto69 mln USD
Dane historii finansowej
Przychody
425 399 000 USD
Koszt sprzedaży
142 942 000 USD
Zysk brutto
282 457 000 USD
Koszty operacyjne
190 000 000 USD
Zysk operacyjny
92 457 000 USD
Pozycje pozaoperacyjne i podatki
-23 422 000 USD
Zysk netto
69 035 000 USD
Most przepływów pieniężnychJak przepływy operacyjne przełożyły się na wolne przepływy pieniężne w FY2025.
StockMarketAgent.AI
Uzgodnienie przepływów operacyjnych
Zysk netto377,7 mln USDAmortyzacja+680 mln USDWynagrodzenie w akcjach+26,5 mln USDPozostałe korekty operacyjne−181,3 mln USDOperacyjne przepływy pieniężne902,9 mln USD
Uzgodnienie środków na początek i koniec
Środki pieniężne na początek35,4 mln USDOperacyjne przepływy pieniężne+902,9 mln USDPrzepływy inwestycyjne−151 mln USDPrzepływy finansowe−750,4 mln USDŚrodki pieniężne na koniec36,9 mln USD
902,9 mln USD − 288,9 mln USDWolne przepływy pieniężne 613,9 mln USD
Dane mostu przepływów pieniężnych
Zysk netto
377 704 000 USD
Wpływy operacyjne
1 084 223 000 USD
Amortyzacja
680 035 000 USD
Wynagrodzenie w akcjach
26 484 000 USD
Operacyjne przepływy pieniężne
902 887 000 USD
Wydatki operacyjne
181 336 000 USD
Dostępne środki pieniężne
938 314 000 USD
Środki pieniężne na początek
35 427 000 USD
Wydatki inwestycyjne
150 990 000 USD
Wydatki finansowe
750 392 000 USD
Skup akcji
117 811 000 USD
Wypłacone dywidendy
567 864 000 USD
Spłata długu netto
6 203 000 USD
Pozostała działalność finansowa
58 514 000 USD
Środki pieniężne na koniec
36 932 000 USD
Przepływy inwestycyjne
-150 990 000 USD
Przepływy finansowe
-750 392 000 USD
Przychody i wynikiJak skala działalności przekłada się na raportowany zysk.
Gotówka i zadłużenieDostępna płynność wobec całkowitego zadłużenia.
Generowanie gotówkiPrzepływy operacyjne w porównaniu z wolnymi przepływami pieniężnymi.
RentownośćZmiany marży brutto, operacyjnej i netto.
Dane finansowe na określony moment użyte w analizie z 2026-10-12.
Dane historii finansowej
Okres
Przychody
EBITDA
Zysk netto
Operacyjne przepływy pieniężne
Wolne przepływy pieniężne
Capex
Amortyzacja
Wynagrodzenie w akcjach
Skup akcji
Wypłacone dywidendy
Emisja długu netto
Przepływy inwestycyjne
Przepływy finansowe
Środki pieniężne na początek
Środki pieniężne na koniec
Gotówka i inwestycje
Zadłużenie ogółem
Marża operacyjna
ROIC
WACC
Spread ROIC−WACC
2016-12-31
11,4 mln USD
654,4 mln USD
292,7 mln USD
536,6 mln USD
532,1 mln USD
4,4 mln USD
425,6 mln USD
13,4 mln USD
—
308,9 mln USD
—
-112,7 mln USD
-429,3 mln USD
—
22,1 mln USD
6,5 mln USD
3,4 mld USD
3516,0%
—
4,5%
—
2017-12-31
11,5 mln USD
697,6 mln USD
121,6 mln USD
518,9 mln USD
517,5 mln USD
1,4 mln USD
436,5 mln USD
12,9 mln USD
—
327,8 mln USD
—
-407,4 mln USD
-111,8 mln USD
22,1 mln USD
21,8 mln USD
7,8 mln USD
3,7 mld USD
1984,8%
—
5,2%
—
2018-12-31
11,8 mln USD
792,1 mln USD
203,1 mln USD
560,7 mln USD
555,8 mln USD
4,9 mln USD
435,7 mln USD
14,2 mln USD
20 mln USD
342,2 mln USD
—
-113,5 mln USD
-260,1 mln USD
21,8 mln USD
208,9 mln USD
190 mln USD
3,5 mld USD
3017,8%
—
4,9%
—
2019-12-31
14,1 mln USD
882,3 mln USD
185 mln USD
630,7 mln USD
446,4 mln USD
184,3 mln USD
507,9 mln USD
24,3 mln USD
—
383,1 mln USD
—
-1,7 mld USD
880,4 mln USD
208,9 mln USD
33,3 mln USD
8,1 mln USD
4,7 mld USD
1572,8%
—
5,4%
—
2020-12-31
5,1 mln USD
892,9 mln USD
64,3 mln USD
604,3 mln USD
430,2 mln USD
174,1 mln USD
618,6 mln USD
19,6 mln USD
19,8 mln USD
419,4 mln USD
—
-460,8 mln USD
-152,6 mln USD
33,3 mln USD
24,2 mln USD
1,4 mln USD
5 mld USD
4914,2%
—
6,6%
—
2021-12-31
6,1 mln USD
968,5 mln USD
150 mln USD
664 mln USD
497,4 mln USD
166,5 mln USD
619,8 mln USD
22,1 mln USD
—
433,8 mln USD
—
-1,3 mld USD
612,5 mln USD
24,2 mln USD
28,4 mln USD
4,2 mln USD
5,4 mld USD
4391,5%
—
5,9%
—
2022-12-31
5 mln USD
935,3 mln USD
86,9 mln USD
820,1 mln USD
584,1 mln USD
236 mln USD
679,6 mln USD
27,5 mln USD
49 mln USD
483,6 mln USD
77,3 mln USD
-929,5 mln USD
111,2 mln USD
28,4 mln USD
30,2 mln USD
755,6 mln USD
5,5 mld USD
4994,3%
—
8,0%
—
2023-12-31
6,8 mln USD
1,3 mld USD
444,4 mln USD
832,7 mln USD
520,3 mln USD
312,3 mln USD
691,8 mln USD
32,9 mln USD
25 mln USD
539,9 mln USD
83,4 mln USD
-289,1 mln USD
-538,9 mln USD
30,2 mln USD
34,9 mln USD
13 mln USD
5,8 mld USD
9279,7%
—
6,9%
—
2024-12-31
8,3 mln USD
1 mld USD
89,6 mln USD
876,8 mln USD
605,2 mln USD
271,7 mln USD
695,5 mln USD
32,6 mln USD
0 USD
558,5 mln USD
29,9 mln USD
-276,4 mln USD
-599,9 mln USD
34,9 mln USD
35,4 mln USD
1,3 mln USD
5,8 mld USD
3421,5%
—
9,2%
—
2025-12-31
11,4 mln USD
1,1 mld USD
377,7 mln USD
902,9 mln USD
613,9 mln USD
288,9 mln USD
680 mln USD
26,5 mln USD
117,8 mln USD
567,9 mln USD
-6,2 mln USD
-151 mln USD
-750,4 mln USD
35,4 mln USD
36,9 mln USD
1,2 mln USD
5,8 mld USD
4872,9%
—
6,8%
—
§9 Porównanie wyceny z konkurentami
Wartość godziwaReport-date price
UDR Inc.UDR
Cena / wartość godziwa
Wartość godziwa26,27 USDReport-date price34,02 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych47 / 100
Mid-America Apartment Communities Inc.MAA
Cena / wartość godziwa
Wartość godziwa111,99 USDReport-date price116,3 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych54 / 100
Invitation Homes Inc.INVH
Cena / wartość godziwa
Wartość godziwa27,49 USDReport-date price26,79 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych56 / 100
UDR Inc.UDR
Cena / wartość godziwa
Wartość godziwa26,27 USDReport-date price34,02 USD
UDR Inc. (UDR) trades at 51.6x forward earnings against a peer median of 39.3x. Its EV/EBITDA of 17.2x compares with a peer median of 16.8x. The comparison uses 4 peers: Mid-America Apartment Communities Inc., Invitation Homes Inc., Essex Property Trust Inc. and Equity Residential, as of 2026-10-12.
In a multifamily upcycle, robust job growth and single-family home unaffordability drive apartment occupancy above 97%, enabling landlords to push new and renewal lease rates well above inflation. Tight housing supply allows rapid absorption of newly completed units, leading to mid-to-high single-digit same-store NOI growth and substantial margin expansion across institutional-grade portfolios.
Cykl niedźwiedzi
In an apartment downturn, prolonged supply digestion across Sunbelt and secondary submarkets forces widespread rental concessions, driving portfolio-wide same-store NOI growth negative. Simultaneously, elevated municipal real estate taxes and insurance costs outpace top-line growth, causing severe property operating margin contraction. When coupled with higher interest rates on refinancing debt, debt service burdens surge and force distribution cuts across highly levered REITs.
Trendy długoterminowe
Trend
Wpływ
Uwaga
Structural Single-Family Home Unaffordability Sustaining Rental Demand
positive
High residential mortgage interest rates and expensive single-family home prices keep homeownership costs significantly above rental costs, anchoring healthy rental propensity and high occupancy (96.6% in 2Q 2026).
Sunbelt Apartment Inventory Delivery Wave
negative
A multi-decade wave of new apartment deliveries across major Sunbelt metros has created acute submarket competition, pushing effective new lease rates down -8.0% in the Southeast and -7.9% in the Southwest in 2Q 2026.
Pozycjonowanie
UDR is positioned with a balanced portfolio split between coastal infill markets (52.6% of SS NOI across West and Northeast) and Sunbelt/Mid-Atlantic markets (42.4% of SS NOI across Mid-Atlantic, Southeast, and Southwest). This distribution enables strong cash generation from supply-constrained coastal markets like New York and San Francisco to subsidize concession-heavy Sunbelt assets while supply is digested.
§11 Zarządzanie pozycjąEN
Wielkość pozycji
0%
Under the Sell rating, zero position weighting is warranted. Shares trade at $34.02, representing a 29.50% premium to Fair value of $26.27. Compounding risks include $5.99B in debt, negative economic profit spreads (ROIC 2.84% vs WACC 7.6802%), and severe Sunbelt rent discounting.4
Ryzyko
Holders of UDR should manage exposure through systematic liquidation rather than attempting to capture incremental dividend yield. Given total indebtedness of $5.99B and substantial debt maturities over 2026-2027, holding equity exposure leaves investors vulnerable to multiple de-rating and earnings dilution without commensurate upside participation.
Transze wejścia
Poziom
Działanie
Dlaczego
$21.00 - $23.00
Evaluate fundamental stabilization
Represents an adequate margin of safety below Fair value of $26.27 and approaches primary model median anchors.
Below $18.00
Review for potential upgrade to Hold
Discounts historical trough valuation multiples and prices in severe operational stress scenarios.
Transze wyjścia
Poziom
Działanie
$34.00 - $35.00
Liquidate 50% to 75% of existing long exposure into current strength
Above $36.00
Complete 100% exit of remaining position
Kwartalne punkty kontrolne
Wskaźnik
Próg
Działanie
Full-Year Same-Store NOI Growth
< 0.0% YoY
Reiterate complete position avoidance as operational fundamentals deteriorate faster than projected.
Consolidated Fixed Charge Coverage Ratio
< 4.7x
Re-examine capital structure resilience and credit rating stability as interest burdens expand.
Southeast Effective New Lease Rate Growth
§12 Perspektywy inwestorówEN
Fundamental Perspective
Avoid
While coastal markets remain resilient, severe new lease rate erosion in the Southeast (-8.0%) and Southwest (-7.9%) limits blended revenue growth to 2.1%, leaving total same-store NOI growth vulnerable.
Valuation Perspective
Avoid
Trading at $34.02, UDR carries an implied return of -22.78% to Fair value of $26.27, trading at an elevated NTM forward P/E of 51.55x that significantly exceeds peers.4
Credit & Balance Sheet Perspective
Avoid
Total debt of $5.99B with $1.13B maturing through 2027 confronts pre-tax debt costs of 6.78%, threatening interest expense escalation and FFOA dilution.2,4
§14 Końcowa rekomendacjaEN
Działanie
Sprzedaj
UDR is rated Sell based on a Fair value of $26.27 per share against a market price of $34.02 (a 29.50% premium to fair value). Structural headwinds including persistent Sunbelt new lease rate discounting and $1.13B in debt maturities through 2027 facing elevated refinancing rates create substantial downside risk.
Investors should liquidate existing long positions, as the stock's forward P/E multiple of 51.55x fails to provide an adequate margin of safety against potential earnings deceleration.
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Sources
The records this analysis drew on, as they stood when it was run.
Regulatory filingData as of 2025-12-31 · Published 2026-02-17 · GAAP · cited for 1 figureCited in Historia finansowa
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Southeast and Southwest new lease rates declined -8.0% and -7.9% in 2Q 2026. Valuation models assume 26.0% to 27.0% operating margin, while peer EQR achieves 27.88% and MAA achieves 25.36%. Submarket oversupply driving operating margin below 23.0% inflicts an estimated -22.4% fair value contraction.3
FV impact
0%
Operating margin 3 points lower throughout
Trigger
Within 12 months
Public REIT multiple contraction driven by slowing sector growth and demographic cooling drives exit multiples to historical trough levels.
Valuation models assume an exit P/E multiple of 22.0x, compared to peer trailing multiples between 24.50x for INVH and 28.68x for EQR, and a prior edition multiple of 17.0x. Current forward P/E stands at 51.55x. Multiple de-rating to a historical trough multiple of 17.6x results in an immediate -18.7% fair value impact.4
FV impact
-1.9%
Terminal multiple 20% lower
Trigger
Within 24 months
Stagflationary rental market downturn combining negative same-store rent growth across both sunbelt and coastal portfolios with rising operational expenses.
2Q 2026 same-store results demonstrate negative NOI growth across Southeast (-2.0%) and Southwest (-2.2%). Coupled with consensus FY2027 EPS of $0.56, a portfolio-wide same-store NOI contraction below -2.0% YoY causes an estimated -32.0% fair value impact.1
FV impact
-0.6%
The analyst's bear scenario path and multiple as the base case
In the bull scenario, rapid absorption of new apartment construction across Sunbelt markets allows new lease rates in Southeast and Southwest to rebound into positive territory, while coastal supply shortages drive above-trend rent increases. Corporate operating margins expand as proprietary platform automation reduces operating friction. Easing monetary policy reduces refinancing hurdle rates, enhancing equity cash flows and supporting valuation toward Potential value of $38.80.
UDR trades at an NTM forward P/E of 51.55x, versus peer multiples of 35.53x for MAA, 37.56x for INVH, and 41.09x for EQR.
The market is pricing in aggressive multiple stability despite FY2027 consensus EPS falling to $0.56, creating downside de-rating vulnerability.
Essex Property Trust Inc.ESS
Cena / wartość godziwa
Wartość godziwa290,96 USDReport-date price271,57 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych53 / 100
Marża
UDR
UDR Inc.
$12.6B
51.6x
7.1x
17.2x
13.7%
—
MAA
Mid-America Apartment Communities Inc.
$13.9B
35.5x
6.3x
15.6x
7.0%
25.4%
INVH
Invitation Homes Inc.
$15.8B
37.6x
5.5x
16.2x
7.1%
25.1%
ESS
Essex Property Trust Inc.
$18.6B
42.9x
9.4x
19.7x
7.7%
34.0%
EQR
Equity Residential
$24.6B
41.1x
7.9x
17.3x
8.0%
27.9%
Higher-for-Longer Cost of Capital for Levered REITs
negative
Elevated benchmark interest rates with risk-free yields at 5.22% and pre-tax debt costs at 6.78% maintain elevated capital costs for levered real estate operators.
< -8.0%
Confirm that Sunbelt supply digestion is worsening, maintaining a strict exit posture.
