UDR (NYSE: UDR) 2025 10-K details net income surge and portfolio mix
Rhea-AI Filing Summary
UDR, Inc. is a self-administered multifamily REIT that owned 165 communities with 55,240 completed apartment homes across 21 U.S. markets as of December 31, 2025, plus interests in 12,167 homes through joint ventures.
The company focuses on diversified, high-quality apartment assets, with two reporting segments: Same-Store Communities and Non-Mature Communities/Other. Same-Store properties represented 96.8% of the portfolio and generated 95.0% of total NOI in 2025, with Same-Store NOI rising by $24.3 million versus the prior year.
Net income attributable to common stockholders increased to $372.9 million from $84.8 million, mainly driven by higher gains on real estate dispositions, higher interest income, the absence of a prior-year non-cash loan reserve, higher NOI, and lower depreciation. UDR maintained REIT status and declared total 2025 distributions of $1.72 per common share, paying $1.715 per share in dividends.
The company highlights human capital, reporting about 1,426 associates, strong employee engagement and below-industry turnover of 19.4%. It also emphasizes technology-enabled operations, portfolio diversification, balance-sheet discipline, and extensive ESG and risk management programs, while outlining detailed risk factors including market conditions, regulation, climate, cybersecurity, and litigation exposure.
Positive
- None.
Negative
- None.
Insights
UDR posts sharply higher net income on asset sales while core apartment fundamentals remain solid.
UDR operates a large, diversified multifamily portfolio with 165 communities and 55,240 apartment homes plus joint-venture interests. Same-Store assets supplied 95.0% of total NOI, and Same-Store NOI increased by
Net income attributable to common stockholders rose to
UDR maintained its REIT distribution profile, declaring
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
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
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
(Address of principal executive offices) (zip code)
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 |
Securities registered pursuant to Section 12(g) of the Act: None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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.:
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The aggregate market value of the shares of common stock of UDR, Inc. held by non-affiliates on June 30, 2025 was approximately $
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this Report, to the extent not set forth herein, is incorporated by reference from UDR, Inc.’s definitive proxy statement for the 2026 Annual Meeting of Stockholders.
Table of Contents
TABLE OF CONTENTS
PAGE | |
PART I | |
Item 1. Business | 4 |
Item 1A. Risk Factors | 14 |
Item 1B. Unresolved Staff Comments | 31 |
Item 1C. Cybersecurity | 31 |
Item 2. Properties | 34 |
Item 3. Legal Proceedings | 34 |
Item 4. Mine Safety Disclosures | 34 |
PART II | |
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 35 |
Item 6. [Reserved] | 37 |
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 38 |
Item 7A. Quantitative and Qualitative Disclosures about Market Risk | 56 |
Item 8. Financial Statements and Supplementary Data | 56 |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 56 |
Item 9A. Controls and Procedures | 56 |
Item 9B. Other Information | 57 |
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 58 |
PART III | |
Item 10. Directors, Executive Officers and Corporate Governance | 59 |
Item 11. Executive Compensation | 59 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 59 |
Item 13. Certain Relationships and Related Transactions, and Director Independence | 59 |
Item 14. Principal Accountant Fees and Services | 59 |
PART IV | |
Item 15. Exhibits, Financial Statement Schedules | 60 |
Item 16. Form 10-K Summary | 68 |
Table of Contents
PART I
Unless the context otherwise requires, all references in this Report to “UDR,” the “Company,” “we,” “our” and “us” refer to UDR, Inc., together with its consolidated subsidiaries, including United Dominion Realty, L.P. (the “Operating Partnership” or the “OP”) and UDR Lighthouse DownREIT L.P. (the “DownREIT Partnership”).
Forward-Looking Statements
This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include, without limitation, statements concerning property acquisitions and dispositions, development activity and capital expenditures, capital raising activities, rent growth, occupancy and rental expense growth. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements.
The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:
● general market and economic conditions;
● the impact of inflation/deflation, tariffs, geopolitical tensions and government shutdowns;
● unfavorable changes in apartment market and economic conditions that could adversely affect occupancy levels and rental rates;
● the failure of acquisitions, developments or redevelopments to achieve anticipated results;
● possible difficulty in selling apartment communities;
● competitive factors that may limit our ability to lease apartment homes or increase or maintain rents;
● insufficient cash flow that could affect our debt financing and create refinancing risk;
● failure to generate sufficient revenue, which could impair our debt service payments and distributions to stockholders;
● development and construction risks that may impact our profitability;
● potential damage from natural disasters, including hurricanes, fires, floods, ice storms and other weather-related events, which could result in substantial costs to us;
● risks from climate change that impacts our properties or operations;
● risks from extraordinary losses for which we may not have insurance or adequate reserves;
● risks from cybersecurity breaches of our information technology systems and the information technology systems of our third party vendors and other third parties;
● the availability of capital and the stability of the capital markets;
● changes in job growth, home affordability and the demand/supply ratio for multifamily housing;
● the failure of automation or technology to help grow net operating income;
● uninsured losses due to insurance deductibles, self-insurance retention, uninsured claims or casualties, or losses in excess of applicable coverage;
● delays in completing developments and lease-ups on schedule or at expected rent and occupancy levels;
● our failure to succeed in new markets;
1
Table of Contents
● risks that third parties who have an interest in or are otherwise involved in projects in which we have an interest, including mezzanine borrowers, joint venture partners or other investors, do not perform as expected;
● changing interest rates, which could increase interest costs and affect the market price of our securities;
● potential liability for environmental contamination, which could result in substantial costs to us;
● the imposition of federal taxes if we fail to qualify as a REIT under the Code in any taxable year;
● our internal control over financial reporting may not be considered effective which could result in a loss of investor confidence in our financial reports, and in turn have an adverse effect on our stock price; and
● changes in real estate laws, tax laws, rent control or stabilization laws or other laws affecting our business.
A discussion of these and other factors affecting our business and prospects is set forth in Part I, Item 1A. Risk Factors. We encourage investors to review these risk factors.
Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this Report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.
Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Report, and we expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.
Summary of Risk Factors
Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. These risks are discussed more fully in Item 1A. Risk Factors herein. These risks include, but are not limited to, the following:
| ● | Unfavorable Apartment Market and Economic Conditions Could Adversely Affect Occupancy Levels, Rental Revenues and the Value of Our Real Estate Assets. |
| ● | The Geographic Concentration of Our Communities in Certain Markets Could Have an Adverse Effect on Our Operations if a Particular Market is Adversely Impacted by Economic or Other Conditions. |
| ● | We May Be Unable to Renew Leases or Relet Apartment Units as Leases Expire, or the Terms of Renewals or New Leases May Be Less Favorable Than Current Leases. |
| ● | We Face Risks Related to Inflation/Deflation. |
| ● | Competition Could Limit Our Ability to Lease Apartment Homes or Increase or Maintain Rents. |
| ● | We May Not Realize the Anticipated Benefits of Past or Future Acquisitions, and the Failure to Integrate Acquired Communities and New Personnel Successfully Could Create Inefficiencies. |
| ● | Competition Could Adversely Affect Our Ability to Acquire Properties. |
| ● | Development and Construction Risks Could Impact Our Profitability. |
| ● | An Epidemic, Pandemic or Other Health Crisis, and Measures Intended to Prevent the Spread of Such an Event, Could Have a Material Adverse Effect on our Business, Results of Operations, Cash Flows and Financial Condition. |
| ● | Bankruptcy or Defaults of Our Counterparties Could Adversely Affect Our Performance. |
2
Table of Contents
| ● | We Could Incur Significant Insurance Costs and Some Potential Losses May Not Be Adequately Covered by Insurance. |
| ● | The Adoption of, or Changes to, Rent Control, Rent Stabilization, Eviction, Tenants’ Rights and Similar Laws and Regulations in Our Markets Could Have an Adverse Effect on Our Results of Operations and Property Values. |
| ● | Risks of Litigation. |
| ● | A Breach of Information Technology Systems On Which We Rely Could Materially and Adversely Impact Our Business, Financial Condition, Results of Operations and Reputation. |
| ● | Changing Interest Rates Could Increase Interest Costs and Adversely Affect Our Cash Flows and the Market Price of Our Common Stock. |
| ● | Insufficient Cash Flow Could Affect Our Debt Financing and Create Refinancing Risk. |
| ● | Failure to Generate Sufficient Income Could Impair Debt Service Payments and Distributions to Stockholders. |
| ● | Failure To Maintain Our Current Credit Ratings Could Adversely Affect Our Cost of Funds, Related Margins, Liquidity, and Access to Capital Markets. |
| ● | Disruptions in Financial Markets May Adversely Impact the Availability and Cost of Credit and Have Other Adverse Effects on Us and the Market Price of Our Common Stock. |
| ● | We Would Incur Adverse Tax Consequences if We Failed to Qualify as a REIT. |
| ● | Changes in Market Conditions and Volatility of Stock Prices Could Adversely Affect the Market Price of Our Common Stock. |
| ● | We May Change the Dividend Policy for Our Common Stock in the Future. |
| ● | Limitations on Share Ownership and Limitations on the Ability of Our Stockholders to Effect a Change in Control of Our Company Restrict the Transferability of Our Stock and May Prevent Takeovers That are Beneficial to Our Stockholders. |
3
Table of Contents
Item 1. BUSINESS
General
UDR is a self-administered real estate investment trust, or 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, our 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 our subsidiaries, including the Operating Partnership and the DownREIT Partnership, and consolidated joint ventures. In addition, we have 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 we hold preferred equity investments. At December 31, 2025, the Company was developing one wholly-owned community totaling 300 apartment homes, none of which have been completed. In addition, the Company is incurring and capitalizing costs directly related to predevelopment activities in preparation of future development commencements.
UDR has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, which we refer to in this Report as the “Code.” To continue to qualify as a REIT, we must continue to meet certain tests which, among other things, generally require that our assets consist primarily of real estate assets, our income be derived primarily from real estate assets, and that we distribute at least 90% of our REIT taxable income (other than our net capital gains) to our stockholders annually. As a REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on our net income to the extent we distribute such net income to our stockholders annually. In 2025, we declared total distributions of $1.72 per common share and paid dividends of $1.715 per common share.
| Dividends | | Dividends | |||
Declared in | Paid in | |||||
2025 | 2025 | |||||
First Quarter | $ | 0.4300 | $ | 0.4250 | ||
Second Quarter |
| 0.4300 |
| 0.4300 | ||
Third Quarter |
| 0.4300 |
| 0.4300 | ||
Fourth Quarter |
| 0.4300 |
| 0.4300 | ||
Total | $ | 1.7200 | $ | 1.7150 | ||
UDR was formed in 1972 as a Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland. Our corporate offices are located at 1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado and our telephone number is (720) 283-6120. Our website is www.udr.com. The information contained on our website, including any information referred to in this Report as being available on our website, is not a part of or incorporated into this Report.
As of December 31, 2025, there were 190.1 million units in the Operating Partnership (“OP Units”) outstanding, of which 176.6 million OP Units (including 0.1 million of general partnership units), or 92.9%, were owned by UDR and 13.5 million OP Units, or 7.1%, were owned by outside limited partners. As of December 31, 2025, there were 32.4 million units in the DownREIT Partnership (“DownREIT Units”) outstanding, of which 23.3 million, or 71.9%, were owned by UDR and its subsidiaries and 9.1 million, or 28.1%, were owned by outside limited partners. The consolidated financial statements of UDR include the noncontrolling interests of the unitholders in the Operating Partnership and DownREIT Partnership.
Human Capital Management
Our people are fundamental to executing our strategy, serving our residents and customers, and delivering long-term value for our company and shareholders. We focus on building a workforce and culture that supports operational excellence, strong leadership, and an associate experience that attracts, develops, motivates, and retains talent in a competitive labor environment.
As of December 31, 2025, our Company had approximately 1,420 full-time associates and 6 part-time associates, all of whom are dedicated to the success of our organization. Within this workforce, 1,034 associates are focused on roles directly associated with our communities, while the remaining associates contribute to various corporate functions.
4
Table of Contents
Strategy and Governance
In 2025, we strengthened our human capital foundation and advanced a multi-year Human Resources (“HR”) evolution roadmap designed to build a scalable, disciplined people-function capable of supporting long-term growth and transformation. HR placed an emphasis on strengthening execution, reducing risk, and improving consistency across key human capital practices.
Across the organization, leadership and HR partner to build a culture aligned to strategy and ensure human capital risks and opportunities are identified and addressed through policy, process, and governance enhancements. We report to our Board of Directors at least annually with respect to our human capital initiatives, including evaluations and analyses.
Associate Engagement and Culture
Workforce health is a competitive advantage for us. In 2025, we maintained strong engagement results that were consistently above industry benchmarks and experienced turnover that remained well below industry averages, reflecting trust in leadership, alignment to strategy, and a positive outlook for the future.
Turnover continued to trend downward, reaching 19.4%, which outperformed the industry benchmark of 34% and improved compared to prior periods.
These results reinforce our view that continued investment in the associate experience supports performance, retention, and organizational resilience.
In 2025, we activated our culture and people philosophy through the launch of Life@UDR, our company-wide culture platform and employee value proposition. This work strengthened how we communicate across the organization and improved clarity and connection for both associates and candidates through consistent storytelling, refreshed communications channels, and a more cohesive cultural narrative.
Associate Compensation
We believe competitive rewards are essential to attracting and retaining talent, and we are committed to maintaining fair, market-competitive compensation practices. To support informed and equitable decisions, we benchmark compensation using a combination of broad-based market data and industry- and geography-specific public compensation information, and we review and adjust our salary ranges as appropriate. These benchmarks and related compensation updates are reviewed annually with executive leadership and presented to our Board of Directors to support oversight of our compensation practices.
To strengthen governance and alignment between pay and performance, we also improved compensation oversight and structure, including centralized ownership of the annual compensation planning cycle, an internal Compensation Committee to provide executive-level oversight, a company-wide market-pricing refresh and streamlined pay structures, and a redesigned officer bonus plan to strengthen performance accountability and alignment between results and rewards.
Associate Health and Wellness
We believe robust and affordable benefits programs are essential to prioritizing the well-being of our associates.
In response to associate feedback and rising healthcare costs, we redesigned medical benefits to better align with market practices by simplifying plan options, introducing a high-deductible plan with employer-funded Health Savings Account (“HSA”) contributions, conducting active enrollment to increase education and participation, and expanding family planning benefits to include infertility coverage and support.
We continued differentiated wellbeing support through our Lifestyle Spending Account benefit, which provides associates with $1,000 annually to spend as they choose, with nearly 91% participation companywide.
5
Table of Contents
Associate Growth and Development
We invest in learning and development to improve leadership capability, support internal mobility, and strengthen performance outcomes. In 2025, we advanced manager effectiveness through a unified enterprise learning strategy and targeted training aligned to key moments in the talent journey.
In total, over 10,000 training courses are available to our associates, spanning topics such as leasing skills, property maintenance, customer service, project management, and leadership development. In 2025, our associates collectively invested 32,508 hours in training, averaging 23 hours per full time associate. By the end of 2025, 99% of associates had completed annual IT security training, fair housing, harassment, workplace violence, diversity and inclusion, and business ethics training.
A strong talent pipeline and thoughtful succession planning support business continuity and execution. In 2025, we modernized key talent processes and expanded tools to support performance management, talent reviews, and succession planning, including the deployment of modules to support performance reviews, potential assessments, and succession planning.
We use structured talent frameworks to promote consistent performance expectations and to identify and develop high-performing and high-potential talent. We also evaluate retention risk and business impact as part of leadership-level talent discussions to inform targeted development, engagement, and succession actions.
Compliance and Risk Mitigation
We partner closely with legal and operational leaders to manage employment-related risk, maintain compliance, and drive consistent workplace practices. In 2025, key enhancements included strengthening employment law and employee relations support, improving compensation governance, and implementing new and updated policies and controls to mitigate risk and strengthen compliance.
Diversity and Inclusion
We seek to attract qualified talent while maintaining fair and consistent hiring processes and prioritize respect, fairness, and the promotion of diverse perspectives.
As of December 31, 2025, our workforce is comprised of 62% male and 38% female associates, with an ethnic composition of 49% White, 30% Hispanic/Latino, 13% Black, 3% Asian, and 6% Other. Our management team (including resident services managers and more senior job classifications) reflects a gender balance of 45% male and 55% female, with an ethnic breakdown of 63% White and 37% non-White. Over the three-year period ending December 31, 2025, 438 promotions occurred, with 52% of those promoted to resident services manager, director, or more senior job classifications being female and 44% non-White.
Reporting Segments
We report in two segments: Same-Store Communities and Non-Mature Communities/Other.
Our Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2024, and held as of December 31, 2025. These communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, there is no plan to conduct substantial redevelopment activities, and the communities are not classified as held for disposition at year end. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three consecutive months.
Our Non-Mature Communities/Other segment represents those communities that do not meet the criteria to be included in Same-Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment components of mixed use properties. For additional information regarding our operating segments, see Note 16, Reportable Segments, in the Notes to the UDR Consolidated Financial Statements included in this Report.
6
Table of Contents
Business Objectives
Our principal business objective is to maximize the economic returns of our apartment communities in a sustainable manner to provide our stockholders with the greatest possible total return and value. To achieve this objective, we intend to continue to pursue the following goals and strategies:
| ● | own and operate a diversified portfolio of apartments in targeted markets in the United States, which are characterized by strong total income growth, high long-term working age population growth, relatively robust rental versus single-family home affordability and favorable demand/supply ratio for multifamily housing, thus enhancing stability and predictability of returns to our stockholders; |
| ● | manage real estate cycles by taking an opportunistic approach to buying, selling, renovating, redeveloping, and developing apartment communities; |
| ● | empower our associates to manage our communities efficiently and effectively to improve resident satisfaction; |
| ● | measure and reward associates based on specific performance targets; and |
| ● | manage our capital structure with the intent of lowering our relative cost of capital to enhance profitability and predictability of liquidity, earnings and dividends. |
2025 Highlights
Commitment to Shareholders
● 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 annualized declared 2025 dividend of $1.72 represented a 1.2% increase over the previous year.
Earnings Results
· | Net income attributable to common stockholders was $372.9 million as compared to $84.8 million in the prior year. The primary drivers for the increase were higher gains from dispositions of real estate as we sold more assets in 2025 when compared to the same period in 2024, 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 primarily due to fully depreciated assets and real estate assets sold in 2025 and 2024. |
| ● | Total revenues increased 2.4% over the prior year primarily due to overall market rent growth and communities acquired and completion of developments during 2024, partially offset by dispositions of real estate in 2025 and 2024. |
· | We achieved Same-Store revenue growth of 2.4% and Same-Store NOI growth of 2.3%. |
Investing and Developments
· | We acquired two operating communities located in Philadelphia, PA and Woodbridge, VA increasing total assets by approximately $330.2 million. |
| ● | We commenced the development of one community located in Riverside, California, with a total of 300 apartment homes. |
· | We received gross proceeds of $211.5 million and recognized gains of $47.9 million from the sale of two operating communities located in Brooklyn, New York and Englewood, New Jersey. |
| ● | We contributed four wholly-owned operating communities to our existing joint venture with LaSalle, while maintaining our 51.0% ownership interest in the venture. In connection with the contribution, our joint venture partner contributed cash and new debt was placed on the newly contributed operating communities and certain existing operating communities, resulting in the Company receiving approximately $202.8 |
7
Table of Contents
| million of cash proceeds and recognizing a gain of $195.0 million from the partial sale of the operating communities. |
· | We received distributions totaling $204.2 million from the Company’s unconsolidated joint ventures and partnerships, which includes $97.3 million from the full repayment of two preferred equity investments and the partial repayment of one preferred equity investment. |
| ● | We fully funded three preferred equity investments totaling $72.6 million that own three operating communities with a total of 1,006 apartment homes. |
Balance Sheet
· | We repurchased 3.3 million shares of common stock for approximately $117.8 million. |
· | We amended our Term Loan to extend the maturity date to January 31, 2029, with two one-year extension options. |
· | We amended our Working Capital Credit Facility to extend the maturity date from January 12, 2026, to January 12, 2027, with two one-year extension options. |
Corporate Responsibility Report
We published our 2025 Corporate Responsibility Report on our website, which discloses our environmental and social initiatives, programs, and performance. The report’s Corporate Responsibility disclosures were, to the extent applicable, prepared in accordance with the Global Reporting Initiative (GRI) Standards (core), the Sustainability Accounting Standards Board (SASB) standards, and the Task Force for Climate-related Financial Disclosure (TCFD) framework.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further information on the Company’s activities in 2025.
Our Strategic Vision
Our strategic vision is to be the multifamily public REIT of choice for investors. We intend to realize this vision by executing on our strategic objectives, which are:
| 1. | Maintaining a Diversified Portfolio and Allocating Capital to Accretive Investment Opportunities |
| 2. | Maintaining a Strong Balance Sheet |
| 3. | Consistently Driving Operating Excellence |
| 4. | Advancing a Strong Corporate Culture and Striving for High Resident Satisfaction |
Maintaining a Diversified Portfolio and Allocating Capital to Accretive Investment Opportunities
We believe greater portfolio diversification, as defined by geographic concentration, location within a market (i.e., urban or suburban) and property quality (i.e., A or B), reduces the volatility of our same-store growth throughout the real estate cycle, appeals to a wider renter and investor audience, lessens the market risk associated with owning a homogenous portfolio, and provides more opportunities for accretive external growth when appropriate. Diversified characteristics of our portfolio include:
| ● | our consolidated apartment portfolio includes 165 communities located in 21 markets throughout the U.S., including both coastal and sunbelt locations; |
| ● | our communities that are located proximate to each other within a market provide enhanced economics; and |
| ● | our mix of urban/suburban communities is approximately 32%/68% and our mix of A/B quality properties is approximately 44%/56%. |
8
Table of Contents
We are focused on increasing our 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. Portfolio investment decisions consider internal analyses and third-party research.
Acquisitions and Dispositions
When evaluating potential acquisitions, we consider a wide variety of factors, including, but not limited to:
| ● | high long-term working age population growth, relatively robust rental versus single-family home affordability, measured long-term new supply growth, overall potential for strong total income growth; |
| ● | the tax and regulatory environment of the market in which the property is located; |
| ● | geographic location, including proximity to jobs, entertainment, transportation, and our existing communities which can deliver significant economies of scale; |
| ● | our climate assessments for the market and sub-market in which the property is located; |
| ● | construction quality, condition, design and sustainability features of, or the potential to implement sustainability initiatives at, the property; |
| ● | current and projected cash flow of the property and the ability to increase cash flow; |
| ● | ability of the property’s projected returns to exceed our cost of capital; |
| ● | potential for capital appreciation of the property; |
| ● | ability to increase the value and profitability of the property through operations and redevelopment; |
| ● | terms of resident leases, including the potential for rent increases; |
| ● | occupancy and demand by residents for properties of a similar type in the vicinity; |
| ● | prospects for liquidity through sale, financing or refinancing of the property; and |
| ● | competition from existing multifamily communities and the potential for the construction of new multifamily properties in the area. |
We regularly monitor our assets to increase the quality and performance of our portfolio. Factors we consider in deciding whether to dispose of a property include, but not limited to:
| ● | current market price for an asset compared to projected economics for that asset; |
| ● | whether it is in a market targeted for divestment or a reduction in investment; |
| ● | potential increases in new construction in the market area; |
| ● | areas with low long-term job growth prospects; |
| ● | near- and long-term capital expenditure needs for the asset; and |
| ● | operating efficiencies. |
9
Table of Contents
The following table summarizes our apartment community acquisitions and dispositions and our consolidated year-end ownership position for the past five years (dollars in thousands):
| 2025 | | 2024 | | 2023 | | 2022 | | 2021 | ||||||
Homes acquired |
| 884 | 173 | (b) | 1,889 |
| 433 |
| 5,426 | ||||||
Homes disposed |
| 1,347 | (a) | 214 | 1,604 | (c) | 90 |
| 651 | ||||||
Homes owned at December 31, |
| 55,240 |
| 55,696 |
| 55,550 |
| 54,999 |
| 53,229 | |||||
Total real estate owned, at cost | $ | 16,487,885 | $ | 16,213,363 | $ | 16,023,859 | $ | 15,570,072 | $ | 14,740,803 | |||||
| (a) | Includes 974 apartment homes from the partial sale of four operating communities to an existing joint venture. |
| (b) | In January 2024, the Company acquired its joint venture partner’s common equity interest in a 173 apartment home operating community. The community was previously owned by a consolidated joint venture of the Company. |
| (c) | Includes 1,328 apartment homes from the partial sale of four operating communities to a newly formed joint venture. |
Development Activities
Our objective in developing a community is to create value while improving the quality of our portfolio. How demographic trends, economic drivers, and multifamily fundamentals and valuations have trended over the long-term and our portfolio strategy generally govern our review process on where and when to allocate development capital. At December 31, 2025, the Company was developing one wholly-owned community totaling 300 apartment homes, none of which have been completed. In addition, the Company is incurring and capitalizing costs directly related to predevelopment activities in preparation of future development commencements.
Redevelopment Activities
Our objective in redeveloping a community is twofold: we aim to grow rental rates while also producing a higher yielding and more valuable asset through asset quality improvement. During the year ended December 31, 2025, we incurred $56.1 million in major renovations, which included major structural changes and/or architectural revisions to existing buildings. As of December 31, 2025, the Company had no communities at which it was conducting substantial redevelopment activities.
Joint Venture and Partnership Activities
We have entered into, and may continue in the future to enter into, joint ventures (including limited liability companies or partnerships) through which we own an indirect economic interest of less than 100% of the community or communities owned directly by such joint ventures. Our decision to either hold an apartment community in fee simple or have an indirect interest in the community through a joint venture is based on a variety of factors and considerations, including: (i) the economic and tax terms required by the seller of land or a community; (ii) our desire to diversify our portfolio of communities by market, submarket and product type; (iii) our desire at times to preserve our capital resources to maintain liquidity or balance sheet strength; and (iv) our projections, in some circumstances, that we will achieve higher returns on our invested capital or reduce our risk if a joint venture vehicle is used. Each joint venture agreement is individually negotiated, and our ability to operate and/or dispose of a community in our sole discretion may be limited to varying degrees depending on the terms of the joint venture agreement.
Maintaining a Strong Balance Sheet
We maintain a capital structure that we believe allows us to proactively source potential investment opportunities in the marketplace. We have structured our debt maturity schedule to be able to opportunistically access both secured and unsecured debt markets when appropriate.
As part of our plan to finance our activities, we utilize proceeds from debt and equity offerings and refinancings to extend maturities, pay down existing debt, fund development and redevelopment activities, and acquire apartment communities.
10
Table of Contents
Consistently Driving Operational Excellence
Investment in new technologies continues to drive operating efficiencies in our business and helps us to better meet the changing needs of our business and our residents. Our residents can conduct business with us 24 hours a day, 7 days a week, including completing online leasing applications and renewals and submitting maintenance or other requests throughout our portfolio using our web-based resident internet portal or, increasingly, a smart-device application.
As a result of transforming our operations through technology, residents’ satisfaction has improved, and our operating teams have become more efficient. Web-based technologies have also resulted in declining marketing and advertising costs, improved cash management, and better pricing management of our available apartment homes.
Advancing a Strong Corporate Culture and Ensuring High Resident Satisfaction
Refer to Human Capital Management section above, for further information on the Company’s corporate culture.
Competitive Conditions
Competition for new residents is generally intense across our markets. Some competing communities offer amenities that our communities do not have. Competing communities can use rental concessions or lower rents to obtain temporary competitive advantages. Also, some competing communities are larger or newer than our communities. The competitive position of each community is different depending upon many factors, including sub-market supply and demand. In addition, other real estate investors compete with us to acquire existing properties, redevelop existing properties, and to develop new properties. These competitors include insurance companies, pension and investment funds, public and private real estate companies, investment companies and other public and private apartment REITs, some of which may have greater resources, or lower capital costs, than we do.
We believe that, in general, we are well-positioned to compete effectively for residents and investments. We believe our competitive advantages include:
| ● | a fully integrated organization with property management, development, redevelopment, acquisition, marketing, sales and financing expertise; |
| ● | scalable operating and support systems, which include automated systems to meet the changing needs of our residents and to effectively focus on our internet-based marketing efforts; |
| ● | access to diversified sources of capital; |
| ● | geographic diversification with a presence in 21 markets across the country; and |
| ● | significant presence in many of our major markets that allows us to be a local operating expert. |
Moving forward, we will continue to improve lease management, improve expense control, increase resident retention efforts and align employee incentive plans with metrics that impact our bottom-line performance. We believe this plan of operation, coupled with the portfolio’s strengths in targeting renters across a geographically diverse platform, should position us for continued operational upside.
Communities
At December 31, 2025, our consolidated real estate portfolio included 165 communities with a total of 55,240 completed apartment homes. The overall quality of our portfolio relative to other properties generally enables us to charge higher rents and to attract residents with higher levels of disposable income who are more likely to absorb such rents.
At December 31, 2025, the Company was developing one wholly-owned community totaling 300 apartment homes, none of which have been completed. In addition, the Company is incurring and capitalizing costs directly related to predevelopment activities in preparation of future development commencements.
11
Table of Contents
At December 31, 2025, the Company had no communities at which it was conducting substantial redevelopment activities.
Same-Store Community Comparison
We believe that one pertinent quantitative measurement of the performance of our portfolio is tracking the results of our Same-Store Communities’ NOI, which is total rental revenue, less rental and other operating expenses excluding property management. Our Same-Store Community population is comprised of operating communities which we own and have stabilized occupancy, revenues and expenses as of the beginning of the prior year.
Net income attributable to common stockholders was $372.9 million as compared to $84.8 million in the prior year. The primary drivers for the increase were higher gains from dispositions of real estate as we sold more assets in 2025 when compared to the same period in 2024, higher interest income and other income/(expense) primarily driven by no non-cash loan reserve in 2025 as compared to a $37.3 million non-cash loan reserve in 2024, higher total NOI, and lower depreciation expense primarily due to fully depreciated assets and real estate assets sold in 2025 and 2024.
For the year ended December 31, 2025, our Same-Store NOI increased by $24.3 million compared to the prior year. Our Same-Store Community properties provided 95.0% of our total NOI for the year ended December 31, 2025. The increase in NOI for the 53,468 Same-Store apartment homes, or 96.8% of our portfolio, was primarily driven by an increase in market rental rates, an increase in reimbursement, ancillary and fee income, a decrease in bad debt, and a decrease in vacancy loss, partially offset by higher utilities expense, higher administration and marketing costs, higher personnel costs, and higher real estate tax expense.
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 our ability to increase rents.
Tax Matters
UDR has elected to be taxed as a REIT under the Code. To continue to qualify as a REIT, UDR must continue to meet certain tests that, among other things, generally require that our assets consist primarily of real estate assets, our income be derived primarily from real estate assets, and that we distribute at least 90% of our REIT taxable income (other than net capital gains) to our stockholders annually. Provided we maintain our qualification as a REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on our net income to the extent such net income is distributed to our stockholders annually. Even if we continue to qualify as a REIT, we will continue to be subject to certain federal, state and local taxes on our income and property.
We may utilize our taxable REIT subsidiary (“TRS”) to engage in activities that REITs may be prohibited from performing, including the provision of management and other services to third parties and the conduct of certain nonqualifying real estate transactions. Our TRS generally is taxable as a regular corporation, and therefore, subject to federal, state and local income taxes.
Inflation
Inflation primarily impacts our results of operations as a result of wage pressures and increases in utilities and repair and maintenance costs. In addition, inflation could also impact our general and administrative expenses, the interest on our debt if variable or refinanced in a high-inflationary environment, our cost of capital, and our cost of development, redevelopment, maintenance or other operating activities. However, the majority of our apartment leases have initial terms of 12 months or less, which in an inflationary environment, and absent other factors such as increased supply, generally enables us to compensate for inflationary effects by increasing rents on our apartment homes. Although an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe this had a material impact on our results for the year ended December 31, 2025.
Environmental Matters
Various environmental laws govern certain aspects of the ongoing operation of our communities. Such environmental laws include those regulating the existence of asbestos-containing materials in buildings, management of surfaces with lead-based paint (and notices to residents about the lead-based paint), use of active underground petroleum
12
Table of Contents
storage tanks, and waste-management activities. The failure to comply with such requirements could subject us to a government enforcement action and/or claims for damages by a private party.
To date, compliance with federal, state and local environmental protection regulations has not had a material effect on our capital expenditures, earnings or competitive position. We have a property management plan for hazardous materials. As part of the plan, Phase I environmental site investigations and reports have been completed for each property we acquire. In addition, all proposed acquisitions are inspected prior to acquisition. The inspections are conducted by qualified environmental consultants, and we review the issued report prior to the purchase or development of any property. Nevertheless, it is possible that the environmental assessments will not reveal all environmental liabilities, or that some material environmental liabilities exist of which we are unaware. In some cases, we have abandoned otherwise economically attractive acquisitions because the costs of removal or control of hazardous materials have been prohibitive or we have been unwilling to accept the potential risks involved. We do not believe we will be required to engage in any large-scale abatement at any of our properties. We believe that through professional environmental inspections and testing for asbestos, lead paint and other hazardous materials, coupled with a relatively conservative posture toward accepting known environmental risk, we can minimize our exposure to potential liability associated with environmental hazards.
Federal legislation requires owners and landlords of residential housing constructed prior to 1978 to disclose to potential residents or purchasers of the communities any known lead paint hazards and imposes treble damages for failure to provide such notification. In addition, lead based paint in any of the communities may result in lead poisoning in children residing in that community if chips or particles of such lead based paint are ingested, and we may be held liable under state laws for any such injuries caused by ingestion of lead based paint by children living at the communities.
We are unaware of any environmental hazards at any of our properties that individually or in the aggregate may have a material adverse impact on our operations or financial position. We have not been notified by any governmental authority, and we are not otherwise aware, of any material non-compliance, liability, or claim relating to environmental liabilities in connection with any of our properties. We do not believe that the cost of continued compliance with applicable environmental laws and regulations will have a material adverse effect on us or our financial condition or results of operations. Future environmental laws, regulations, or ordinances, however, may require additional remediation of existing conditions that are not currently actionable. Also, if more stringent requirements are imposed on us in the future, the costs of compliance could have a material adverse effect on our results of operations and our financial condition.
Insurance
We carry comprehensive general liability coverage on our communities, with limits of liability we believe to be customary within the multi-family apartment industry to insure against liability claims and related defense costs. We are also insured, with limits of liability we believe to be customary within the multi-family apartment industry, against the risk of direct physical damage on a replacement cost basis, including loss of rental income during the reconstruction period.
Available Information
We file electronically with the Securities and Exchange Commission our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. You may obtain a free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports on the day of filing with the SEC on our website at www.udr.com, or by sending an e-mail message to ir@udr.com.
13
Table of Contents
Item 1A. | RISK FACTORS |
There are many factors that affect the business and the results of operations of the Company, some of which are beyond its control. The following is a description of material factors that may cause the Company’s actual results in future periods to differ materially from those currently expected or discussed in forward-looking statements set forth in this Report relating to our financial results, operations and business prospects. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Report, and we expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law. These risks are not all of the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur.
Risks Related to Our Real Estate Investments and Our Operations
Unfavorable Apartment Market and Economic Conditions Could Adversely Affect Occupancy Levels, Rental Revenues and the Value of Our Real Estate Assets. Unfavorable market conditions in the areas in which we operate or unfavorable economic conditions generally, may significantly affect our occupancy levels, our rental rates and collections, the value of our properties and our ability to acquire or dispose of apartment communities on economically favorable terms. Our ability to lease our properties at favorable rates is adversely affected by increases in supply in the multifamily and other rental markets and is dependent upon the overall level in the economy, which is adversely affected by, among other things, job losses and unemployment levels, recession, debt levels, housing markets, stock market volatility, any federal government shutdown and uncertainty about the future. Our major expenses generally do not decline when related rents decline. We would expect that declines in our occupancy levels and rental and other revenues would cause us to have less cash available to pay our indebtedness and to distribute to our stockholders, which could adversely affect our financial condition or the market value of our securities. Factors that have in the past and may in the future affect our occupancy levels, our rental revenues, and/or the value of our properties include the following, among others:
| ● | downturns in global, national, regional and local economic conditions, particularly increases in unemployment, including as a result of tariffs, geopolitical tensions, government shutdowns or otherwise; |
| ● | declines in mortgage interest rates, making alternative housing options more affordable; |
| ● | government or builder incentives with respect to home ownership, making alternative housing options more attractive; |
| ● | local real estate market conditions, including oversupply of, or reduced demand for, apartment homes; |
| ● | declines in the financial condition of our tenants, which may make it more difficult for us to collect rents from some tenants; |
| ● | changes in market rental rates; |
| ● | our ability to renew leases or re-lease space on favorable terms; |
| ● | the timing and costs associated with property improvements, repairs or renovations; |
| ● | changes in household formation; and |
| ● | rent control or stabilization laws, or other laws regulating or impacting rental housing, which could prevent us from raising rents to offset increases in operating costs or otherwise impact us. |
The Geographic Concentration of Our Communities in Certain Markets Could Have an Adverse Effect on Our Operations if a Particular Market is Adversely Impacted by Economic or Other Conditions. For the year ended December 31, 2025, approximately 74.5% of our total NOI was generated from communities located in Metropolitan D.C. (15.7%), Boston, MA (11.7%), Orange County, CA (10.9%), the San Francisco Bay Area, CA (8.9%), Dallas, TX (8.0%), New York, NY (7.1%), Seattle, WA (6.5%) and Tampa, FL (5.7%). As a result, if any one or more of these markets is adversely impacted by regional or local economic conditions or real estate market conditions, including new supply, such conditions may have a greater adverse impact on our results of operations than if our portfolio was more geographically diverse. In addition, if one or more of these markets is adversely affected by changes in regional or local regulations, including those related to rent control or stabilization, such regulations may have a greater adverse impact on our results of operations than if our portfolio was more geographically diverse.
14
Table of Contents
We May Be Unable to Renew Leases or Relet Apartment Units as Leases Expire, or the Terms of Renewals or New Leases May Be Less Favorable Than Current Leases. When our residents decide to leave our apartments, whether because their leases are not renewed or they leave prior to their lease expiration date, we may not be able to relet their apartment units. Even if leases are renewed or we can relet the apartment units, the terms of renewal or reletting may be less favorable to us than the expiring lease terms. Furthermore, because the majority of our apartment leases have initial terms of 12 months or less, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. If we are unable to promptly renew the leases or relet the apartment units, or if the rental rates upon renewal or reletting are lower than expected rates, then our results of operations and financial condition may be, and have in the past been, adversely affected. If residents do not experience increases in their income or if they experience decreases in their income or job losses, we may be unable to increase or maintain rent and/or delinquencies may increase.
We Face Certain Risks Related to Our Retail and Commercial Space. Certain of our properties include retail or commercial space that we lease to third parties. The long-term nature of our retail and commercial leases (generally five to ten years with market-based or fixed-price renewal options) and the characteristics of many of our tenants (small and/or local businesses) may subject us to certain risks. The longer-term leases could result in below market lease rates over time, particularly in an inflationary environment. We may require guarantees and other credit support which may prove to be inadequate or uncollectable, and the failure rate of small and/or local businesses may be higher than average. We may not be able to lease new space for rents that are consistent with our projections or for market rates. Also, when leases for our retail or commercial space terminate either at the end of the lease or because a tenant leaves early, the space may take, and spaces have taken in the past, longer than expected to relet, may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable to us than the prior lease terms, or we may incur additional expenses related to modifications of the spaces in order to satisfy new tenants. Our properties compete with other properties with retail or commercial space. The presence of competitive alternatives may adversely affect our ability to lease space and the level of rents we can obtain. Our retail or commercial tenants may experience financial distress or bankruptcy, or may fail to comply with their contractual obligations, and may seek concessions in order to continue operations or cease their operations, all of which has happened in the past and may occur again in the future, which could adversely impact our results of operations and financial condition.
We Face Risks Related to Inflation/Deflation. Substantial inflationary or deflationary pressures could have a negative effect on rental rates and property operating expenses. The U.S. economy has during certain periods over the last few years experienced periods of high rates of inflation and could again, including due to pressures related to recently announced tariffs, which has in the past increased, and could in the future increase, our operating expenses due to higher third party vendor costs and increased our interest expense due to higher interest rates on our variable rate debt. Although the short-term nature of our apartment leases may, absent other factors, enable us to compensate for inflationary effects by increasing rents on our apartment homes, an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases. The general risk of inflation is that interest on our debt, general and administrative expenses, materials costs, labor costs, and other expenses increase at a rate faster than increases in our rental rates, which could adversely affect our financial condition or results of operations.
We Are Subject to Certain Risks Associated with Selling Apartment Communities, Which Could Limit Our Operational and Financial Flexibility. We periodically dispose of apartment communities that no longer meet our strategic objectives, but adverse market conditions, among other factors, may make it difficult to sell apartment communities we own. We cannot predict whether we will be able to sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser or to close the sale of a property. Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold or the purchase price may be reduced to cover any cost of correcting defects or making improvements. These conditions may limit our ability to dispose of properties and to change our portfolio in order to meet our strategic objectives, which could in turn adversely affect our financial condition, results of operations or our ability to fund other activities in which we may want to engage such as the purchase of properties, development or redevelopment, or funding the Debt and Preferred Equity Program. We are also subject to the following risks in connection with sales of our apartment communities, among others:
| ● | a significant portion of the proceeds from some property sales may be held by intermediaries in order for such sales to qualify as like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended, or the “Code,” so that any related capital gain can be deferred for federal income tax purposes. |
15
Table of Contents
| As a result, we may not have immediate access to all of the cash proceeds generated from our property sales; and |
| ● | federal tax laws limit our ability to profit on the sale of communities or interests in communities that we have owned for less than two years, and this limitation may prevent us from selling communities when market conditions are favorable or when we may otherwise desire to sell. |
Competition Could Limit Our Ability to Lease Apartment Homes or Increase or Maintain Rents. Our apartment communities compete with numerous housing alternatives in attracting residents, including other apartment communities, condominiums and single-family rental homes, as well as owner occupied single- and multi-family homes. Competitive housing in a particular area, including new supply, could adversely affect our ability to lease apartment homes and increase or maintain rents, which could materially and adversely affect our results of operations and financial condition.
We May Not Realize the Anticipated Benefits of Past or Future Acquisitions, and the Failure to Integrate Acquired Communities and New Personnel Successfully Could Create Inefficiencies. We have acquired in the past, and if presented with attractive opportunities we intend to acquire in the future, apartment communities that meet our investment criteria. Our acquisition activities and their success are subject to the following risks, among others:
| ● | we may be unable to obtain financing for acquisitions on favorable terms, or at all, which could cause us to delay or even abandon potential acquisitions; |
| ● | if we seek and are able to finance an acquisition with debt, cash flow from the acquisition may be insufficient to meet our required principal and interest payments on the debt used to finance the acquisition; |
| ● | even if we enter into an acquisition agreement for an apartment community, we may not complete the acquisition for a variety of reasons after incurring certain acquisition-related costs; |
| ● | we may incur significant costs and divert management attention in connection with the evaluation and negotiation of potential acquisitions, including potential acquisitions that we subsequently do not complete; |
| ● | when we acquire an apartment community, we may invest additional amounts in it with the intention of increasing profitability, and these additional investments may not produce the anticipated improvements in profitability; |
| ● | the expected occupancy rates, rental rates and expenses may differ from actual results; and |
| ● | we may be unable to quickly and efficiently integrate acquired apartment communities and new personnel into our existing operations, and the failure to successfully integrate such apartment communities or personnel will result in inefficiencies that could materially and adversely affect our expected return on our investments and our overall profitability. |
Competition Could Adversely Affect Our Ability to Acquire Properties. In the past, other real estate investors, including insurance companies, pension and investment funds, developer partnerships, investment companies and other public and private REITs, have competed with us to acquire existing properties and to develop new properties, and such competition in the future may limit attractive investment opportunities, which could adversely affect our ability to grow or acquire properties profitably or with attractive returns.
Development and Construction Risks Could Impact Our Profitability. In the past we have pursued, and we are currently pursuing, the development and construction of apartment communities. We intend to continue to do so in the future as appropriate opportunities arise. We may conduct development activities through wholly-owned affiliated companies or through joint ventures with unaffiliated parties. Our development and construction activities are subject to the following risks, among others:
| ● | if we seek construction financing we may be unable to obtain such financing for development activities on favorable terms, or at all, which could cause us to delay or even abandon potential developments; |
| ● | we may experience supply chain constraints, which could result in increased development costs or delay initial occupancy dates for all or a portion of a development community; |
| ● | we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental or quasi-governmental permits and authorizations, which could result in |
16
Table of Contents
| increased development costs, delay initial occupancy dates for all or a portion of a development community, and require us to abandon our activities entirely with respect to a project for which we are unable to obtain permits or authorizations; |
| ● | costs may be higher or yields may be less than anticipated as a result of delays in completing projects, defaults by our counterparties, higher than expected concessions for lease-up and lower rents than expected, and/or due to increased material, labor or other costs or supply chain disruptions, including as a result of tariffs or changes in immigration laws or their enforcement; |
| ● | we may abandon development opportunities that we have already begun to explore, and we may be unable to recover expenses already incurred in connection with exploring such development opportunities; |
| ● | we may be unable to complete construction and lease-up of a community on schedule, or we may incur development or construction costs that exceed our original estimates, and we may be unable to charge rents that would compensate for any increase in such costs; |
| ● | occupancy rates, rents and concessions at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our expected return on our investment and our overall profitability goals; and |
| ● | when we sell communities or properties that we developed or renovated to third parties, we may be subject to warranty or construction defect claims that are uninsured or exceed the limits of our insurance. |
An Epidemic, Pandemic or Other Health Crisis, and Measures Intended to Prevent the Spread of Such an Event, Could Have a Material Adverse Effect on our Business, Results of Operations, Cash Flows and Financial Condition. We face risks related to an epidemic, pandemic or other health crisis, which in the past have impacted, and in the future could impact, the markets in which we operate and could have a material adverse effect on our business, results of operations, cash flows and financial condition. The impact of an epidemic, pandemic or other health crisis, and measures to prevent the spread of such an event, could materially and adversely affect our business in a number of ways. Our rental revenue and operating results depend significantly on the occupancy levels at our properties and the ability of our residents and retail and commercial tenants to meet their rent obligations to us, which have in the past been, and could in the future be, adversely affected by, among other things, job losses, furloughs, store closures, lower incomes, uncertainty about the future as a result of an epidemic, pandemic or other health crisis and related governmental actions such as eviction moratoriums, shelter-in-place orders, prohibitions or limits on charging certain fees, and limitations on collections and or rent increases. Such government actions have affected, and may again in the future affect, our ability to collect rent or enforce legal or contractual remedies for the failure to pay rent, which has in turn negatively impacted, and may in the future negatively impact, our ability to remove residents or retail and commercial tenants who are not paying rent and our ability to rent their units or other space to new residents or retail and commercial tenants, respectively.
State, local, and federal governments also have increased, and may in the future increase, property taxes or other taxes or fees, or may enact new taxes or fees, in order to increase revenue in connection with an epidemic, pandemic or other health crisis or otherwise, which has in the past increased, and may in the future increase, our expenses. Our development and construction projects, including those in our Debt and Preferred Equity Program, also have been and could in the future be adversely affected by factors related to an epidemic, pandemic or other health crisis. An epidemic, pandemic or other health crisis, or related impacts thereof also could adversely affect the businesses and financial conditions of our counterparties, including our joint venture partners, participants in the Debt and Preferred Equity Program, and general contractors and their subcontractors, and their ability to satisfy their obligations to us and to complete transactions or projects with us as intended.
Bankruptcy or Defaults of Our Counterparties Could Adversely Affect Our Performance. We have relationships with and we execute transactions with or receive services from many counterparties, such as general contractors engaged in connection with our development activities, borrowers, and joint venture partners, among others. As a result, bankruptcies or defaults by these counterparties or their subcontractors have resulted in, and in the future could result in, services not being provided as expected, projects not being completed on time, on budget, or at all, or contractual obligations to us not being satisfied. Further, volatility in the financial markets and economic weakness could affect the counterparties’ ability to complete transactions with us as intended. Either circumstance could result in disruptions to our operations that may adversely affect our financial condition and results of operations.
17
Table of Contents
Property Ownership Through Partnerships and Joint Ventures May Limit Our Ability to Act Exclusively in Our Interest. We have in the past and may in the future develop and/or acquire properties through partnerships and joint ventures, including those in which we own a preferred interest or debt, with other persons or entities when we believe circumstances warrant the use of such structures. As of December 31, 2025, we had active unconsolidated joint ventures and partnerships, including our preferred equity investments, with a total equity investment of $886.5 million. We have in the past, and could in the future, become engaged in a dispute with one or more of our partners which could adversely impact us. Moreover, our partners may have business, economic or other objectives that are inconsistent with our objectives, including objectives that relate to the appropriate timing and terms of any sale or refinancing of a property. In some instances, our partners may have competing interests in our markets that could create conflicts of interest. Also, our partners have in the past failed and may in the future fail to make capital contributions when due and our partners or the project may otherwise not act or perform as expected, or the property may not be operated in the manner in which we would operate it, any of which may require us to contribute additional capital, acquire our partner’s interest or other property, or take other actions that may negatively impact the project or our return. In addition, we may be responsible to our partners for indemnifiable losses. In general, we and our partners may each have the right to trigger a buy-sell or other similar arrangement, which arrangement or other factors could cause us to sell our interest, or acquire our partner’s interest or other property, at a time when we otherwise would not have initiated such a transaction and may result in the valuation of our interest in the partnership or joint venture (if we are the seller) or of the other partner’s interest in the partnership or joint venture (if we are the buyer) at levels which may not be representative of the valuation that would result from an arm’s length marketing process and could cause us to recognize unanticipated capital gains or losses or the loss of fee income.
We may also be subject to other risks in connection with partnerships or joint ventures, including (i) a deadlock if we and our partner are unable to agree upon certain major and other decisions (which could result in litigation or disposing of an asset at a time at which we otherwise would not sell the asset), (ii) limitations on our ability to liquidate our position in the partnership or joint venture without the consent of the other partner, and (iii) requirements to provide guarantees in favor of lenders with respect to the indebtedness of the joint venture.
We May Not be Permitted to Dispose of Certain Properties or Pay Down the Indebtedness Associated with Those Properties When We Might Otherwise Desire to Do so Without Incurring Additional Costs. In connection with certain property acquisitions, we have agreed with the sellers that we will not dispose of the acquired properties or reduce the mortgage indebtedness on such properties for significant periods of time unless we pay certain of the resulting tax costs of the sellers or dispose of the property in a transaction in which a gain is not recognized for federal income tax purposes by such sellers, and we may enter into similar agreements in connection with future property acquisitions. These agreements could result in us retaining properties that we would otherwise sell or not paying down or refinancing indebtedness that we would otherwise pay down or refinance. However, subject to certain conditions, we generally retain the right to substitute other property or debt to meet these obligations to the sellers.
We Could Incur Significant Insurance Costs and Some Potential Losses May Not Be Adequately Covered by Insurance Reserves. We have a comprehensive insurance program covering our properties and operating activities with limits of liability, deductibles and self-insured retentions that we believe are comparable to similarly situated companies, including within the multifamily industry. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, certain types of extraordinary losses that may not be adequately covered under our insurance program. In addition, we will sustain losses due to insurance deductibles, self-insured retention, uninsured claims or casualties, or losses in excess of applicable coverage.
If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the future revenue from the property. In such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. Material losses in excess of insurance proceeds may occur in the future. If one or more of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Such events could materially and adversely affect our financial condition and results of operations.
The cost of insuring our apartment communities and our operations is a component of expense. Insurance premiums and the terms and conditions of insurance policies are subject to significant fluctuations and changes, including recent increases in premiums, which are generally outside of our control. We insure our properties and our operations with insurance companies that we believe have a good rating and financial profile at the time our policies are put into effect. The financial condition of one or more insurance companies that insure us may be negatively impacted, which could result in their inability to pay on future insurance claims. Their inability to pay future claims may have a negative impact on our financial results. In addition, the failure, or exit or partial exit from an insurance market, of one
18
Table of Contents
or more insurance companies or other changes in insurance markets in general may affect our ability to obtain insurance coverage in the amounts that we seek, or at all, increase the costs to renew or replace our insurance policies, cause us to self-insure a larger portion of the risk, or increase the cost of insuring properties.
Failure to Succeed in New Markets May Limit Our Growth. We have acquired in the past, and we may acquire in the future if opportunities we believe are appropriate arise, apartment communities that are outside of our existing markets. Entering into new markets may expose us to a variety of risks, and we may not be able to operate successfully in new markets. These risks include, among others:
| ● | inability to accurately evaluate local apartment market conditions and local economies; |
| ● | inability to hire and retain key personnel; |
| ● | lack of familiarity with local governmental and permitting procedures; and |
| ● | inability to achieve budgeted financial results. |
Failure to Succeed with New Initiatives May Limit Our Ability to Grow NOI. We have in the past developed and may in the future develop initiatives or processes that are intended to drive operating efficiencies and grow NOI, including smart home technologies and self-service options that are accessible to residents through smart devices or otherwise. Such initiatives in the past have involved and in the future may involve our associates having new or different responsibilities and processes. We may incur significant costs and divert resources in connection with such initiatives or processes, and these initiatives or processes may not perform as projected, which could adversely affect our results of operations and the market price of our common stock. We may also invest, directly or indirectly, in technology companies developing technologies that are of interest to us and we may not realize the intended benefits of such investments and may incur losses in connection with such investments.
Potential Liability for Environmental Contamination Could Result in Substantial Costs. Under various federal, state and local environmental laws, as a current or former owner or operator of real estate, we could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous or toxic substances, often regardless of our knowledge of or responsibility for the contamination and solely by virtue of our current or former ownership or operation of the real estate. In addition, we could be held liable to a governmental authority or to third parties for property damage and for investigation and clean-up costs incurred in connection with the contamination or we could be required to incur additional costs to change how the property is constructed or operated due to presence of such substances. These costs could be substantial, and in many cases environmental laws create liens in favor of governmental authorities to secure their payment. The presence of such substances or a failure to properly remediate any resulting contamination could materially and adversely affect our ability to borrow against, sell or rent an affected property.
In addition, our properties are subject to various federal, state and local environmental, health and safety laws, including laws governing the management of wastes and underground and aboveground storage tanks. Noncompliance with these environmental, health and safety laws could subject us to liability. Changes in laws could increase the potential costs of compliance with environmental laws, health and safety laws or increase liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise adversely affect our financial condition and results of operations.
As the owner or operator of real property, we may also incur liability based on various building conditions. For example, buildings and other structures on properties that we currently own or operate or those we acquire or operate in the future contain, may contain, or may have contained, asbestos-containing material, or ACM, or other hazardous substances. Environmental, health and safety laws require that ACM and other hazardous substances be properly managed and maintained and may impose fines or penalties on owners, operators or employers for non-compliance with those requirements.
These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be disturbed during maintenance, renovation or demolition of a building, potentially resulting in substantial costs. In addition, we may be subject to liability for personal injury or property damage sustained as a result of exposure to ACM or other hazardous substances or releases of ACM or other hazardous substances into the environment.
We cannot assure you that costs or liabilities incurred as a result of environmental or building condition issues will not adversely affect our financial condition and results of operations.
19
Table of Contents
Our Properties May Contain or Develop Harmful Mold or Suffer from Other Indoor Air Quality Issues, Which Could Lead to Liability for Adverse Health Effects or Property Damage or Cost for Remediation. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants or to increase ventilation, which could adversely affect our results of operations and cash flows. In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants or others for property damage or personal injury.
Compliance or Failure to Comply with the Americans with Disabilities Act of 1990 or Other Safety Regulations and Requirements Could Result in Substantial Costs. The Americans with Disabilities Act of 1990, as amended (the “Americans with Disabilities Act”) generally requires that public buildings, including our properties and other public facing functions related to our business, including our website, be made accessible to disabled persons. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants. Claims have been asserted, and in the future claims may be asserted, against us with respect to some of our properties or operations under the Americans with Disabilities Act. If, under the Americans with Disabilities Act, we are required to make substantial alterations and capital expenditures in one or more of our properties or otherwise related to our operations, including the removal of access barriers, it could adversely affect our financial condition and results of operations. In addition, if claims arise, we may expend resources and incur costs in investigating and resolving such claims even if we or our property was in compliance with the law.
Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements and federal, state and local accessibility requirements in addition to those imposed by the Americans with Disabilities Act. If we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that could adversely affect our financial condition or results of operations.
The Adoption of, or Changes to, Rent Control, Rent Stabilization, Eviction, Tenants’ Rights and Similar Laws and Regulations in Our Markets Could Have an Adverse Effect on Our Results of Operations and Property Values. Various state and local governments as well as the federal government have enacted and may continue to enact rent control, rent stabilization, eviction, tenants’ rights, allowable fees, and other matters, as well as any lawsuits against us arising from such laws and regulations, may limit our ability to charge market rents, increase rents, evict delinquent tenants or charge fees, or recover increases in our operating expenses, which could have an adverse effect on our results of operations and the value of our properties. These laws, regulations and policies may apply prospectively or retroactively. For example, in 2023, Montgomery County, Maryland enacted rent control that initially impacts a portion of our 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 the City of New York, the new administration is seeking to freeze rent increases for covered properties. Although our properties currently have minimal exposure to the city’s allowable annual rent increases, such a freeze, or other measures that seek to increase affordability, would in turn reduce our property values. In 2024, the City of Salinas, California passed a rent stabilization ordinance that impacted all our properties within the city. In 2025, the State of Washington enacted statewide rent control, which initially impacts a portion of our properties within the state. In some cases, the increases in rents allowed by such regulations may not offset increases in expenses, whether such increases in expenses are due to inflation or otherwise. We have seen a recent increase in governments enacting or considering, or being urged to consider, such laws and regulations. Federal, state and local governments or courts also have made, and may make in the future, changes to laws related to allowable fees and rents, eviction and other tenants’ rights laws and regulations (including changes that apply retroactively) that could adversely impact our results of operations and the value of our properties. In addition, the increases in regulations applicable to our business in general may increase our costs of compliance and could have an adverse effect on our financial performance.
Compliance with or Changes in Real Estate Tax and Other Laws and Regulations Could Adversely Affect Our Funds from Operations and Our Ability to Make Distributions to Stockholders. We are subject to federal, state and local laws, regulations, rules and ordinances at locations where we operate regarding a wide variety of matters that could affect, directly or indirectly, our operations. Generally, we do not directly pass through costs resulting from compliance
20
Table of Contents
with or changes in real estate tax laws to residential property tenants. We also do not generally pass through increases in income, service or other taxes to tenants under leases. These costs may adversely affect net operating income and the ability to make distributions to stockholders. Similarly, compliance with or changes in (i) laws increasing the potential liability for environmental conditions existing on properties or the restrictions on discharges or other conditions, (ii) laws and regulations regulating housing, such as the Americans with Disabilities Act and the Fair Housing Amendments Act of 1988, or (iii) employment related laws, among others, may result in significant unanticipated expenditures, which could adversely affect our financial condition and results of operations. In addition, changes in federal and state legislation and regulation on climate change may result in increased capital expenditures to improve the energy efficiency of our existing communities and also may require us to spend more on our new development communities without a corresponding increase in revenue. In addition, existing laws could be interpreted in a manner that restricts our ability to use systems that we currently use in our operations and we may face litigation or regulatory risk in connection with such laws. Future compliance with new laws of general applicability, laws applicable to companies in our industry, or laws applicable to public companies generally could increase our costs and could have an adverse effect on our financial performance.
Risk of Litigation. From time to time, we are, and would expect to be in the future, involved in legal proceedings, lawsuits, and other claims with respect to our properties or operations. For example, we have been named as a defendant in a number of cases alleging antitrust violations by RealPage, Inc., a vendor providing revenue management software products, and various owners or managers of multifamily housing, which cases have been consolidated in the United States Court for the Middle District of Tennessee, and cases with similar allegations that have been filed by the District of Columbia, the State of Maryland and the State of Washington. An unfavorable resolution of any litigation may have a material adverse effect on our business, results of operations and financial condition. Further, being involved in litigation, whether the result is favorable or unfavorable, could negatively impact our reputation. Additionally, litigation, whether the result is favorable or unfavorable, has in the past and may in the future result in substantial costs and expenses and could significantly divert the attention of management.
Risk of Damage from Catastrophic Weather and Natural Events. Our communities are located in areas that have experienced, and in the future may experience, catastrophic weather and other natural events from time to time, including mudslides, fires, hurricanes, tornadoes, floods, deep freezes, snow or ice storms, or other severe inclement weather. These adverse weather and natural events could cause damage or losses that may be greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected community, as well as anticipated future revenue from that community. We would also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. Any such loss could adversely affect our financial condition and results of operations.
Risk of Potential Climate Change. To the extent significant changes in the climate in areas where our communities are located occur, we may experience extreme weather conditions and changes in precipitation and temperature or water levels, all of which could result in physical damage to, and/or a decrease in demand for, our communities located in these areas or communities that are otherwise affected by these changes. Should the impact of such climate changes be material in nature, or occur for lengthy periods of time, our financial condition and results of operations could be adversely affected.
Risk of Earthquake Damage. Some of our communities are located in areas subject to earthquakes, including in the general vicinity of earthquake faults. We cannot assure you that an earthquake would not cause damage or losses greater than insured levels. In the event of a loss in excess of insured limits, we could lose our capital invested in the affected community, as well as anticipated future revenue from that community. We may also continue to be obligated to repay any mortgage indebtedness or other obligations related to the community. Any such loss could adversely affect our financial condition and results of operations. Insurance coverage for earthquakes can be costly due to limited industry capacity. As a result, we may experience shortages in desired coverage levels if market conditions are such that insurance is not available or the cost of insurance makes it, in management’s view, economically impractical.
Risk of Accidental Death or Injury Due to Fire, Natural Disasters or Other Hazards. The accidental death or injury of persons living in our communities due to fire, natural disasters, other hazards, or acts or omissions of third parties could have an adverse effect on our business and results of operations. Our insurance coverage may not cover all losses associated with such events, and we may experience difficulty marketing communities where any such events have occurred, which could have an adverse effect on our financial condition and results of operations.
Actual or Threatened Terrorist Attacks and Other Acts of Violence, Destruction or War May Have an Adverse Effect on Our Business and Operating Results and Could Decrease the Value of Our Assets. Actual or threatened
21
Table of Contents
terrorist attacks and other acts of violence, destruction or war could have an adverse effect on our business and operating results. Attacks or other similar actions that directly impact one or more of our apartment communities could significantly affect our ability to operate those communities and thereby impair our ability to achieve our expected results. Further, our insurance coverage may not cover all losses caused by a terrorist attack or similar events. In addition, the adverse effects that such violent acts and threats of future attacks could have on the U.S. economy could similarly have an adverse effect on our financial condition and results of operations.
Mezzanine Loan or Other Loan Assets Involve Greater Risks of Loss than Senior Loans Secured by Income-Producing Properties. We have originated in the past and may in the future originate mezzanine loans, which take the form of subordinated loans secured by second mortgages on the underlying property, or subordinated loans secured by a pledge of the ownership interests of either the entity owning the property, or a pledge of the ownership interests of the entity that owns the interest in the entity owning the property, or loans that are not secured. We have in the past and may in the future originate mezzanine loans for properties or projects that are under development. Mezzanine loans may involve a higher degree of risk than a senior mortgage secured by real property, because the security for the loan may lose all or substantially all of its value as a result of foreclosure by the senior lender and because it is in second position and there may not be adequate equity in the property. Unsecured loans involve higher risk by virtue of being unsecured. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine or other loan will be satisfied only after the senior debt. As a result, we may not recover some of or all our investment. In addition, mezzanine loans typically have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the property and increasing the risk of loss of principal. Further, foreclosing on our security interest may be delayed or otherwise impacted by the existence of the senior loan, the senior lender’s decision regarding whether to enforce its remedies, or the timing of the senior lender’s foreclosure or enforcement of other remedies with respect to such loan. If there is a default on the senior debt or an inability to refinance the senior debt, we may contribute additional capital or take other actions that we would not otherwise pursue absent such default or failure. In addition, in the event of a default or other changes in the circumstances of an investment, including a change in the value of the applicable property, we may be, and have been in the past, required to change the manner in which the investment is accounted for, including our ability to recognize earnings, or to recognize an allowance for loan loss or a loss on consolidation.
Risk Related to Preferred Equity Investments. We have made in the past and may in the future make preferred equity investments in corporations, limited partnerships, limited liability companies or other entities that have been formed for the purpose of directly or indirectly acquiring, developing and/or managing real property. Generally, we will not have the ability to control the daily operations of the entity, and we will not have the ability to select or remove a majority of the members of the board of directors, managers, general partner or partners or similar governing body of the entity or otherwise control its operations. Although we have sought and would seek to maintain sufficient influence over the entity to achieve our objectives, our partners may have interests that differ from ours and may be in a position to take actions without our consent that are inconsistent with our interests. Further, if our partners were to fail to invest additional capital in the entity when required, which has happened in the past, or otherwise do not perform as expected, we may have to invest additional capital to protect our investment. Our partners have in the past failed, and may in the future fail, to develop or operate the real property, operate the entity, refinance property indebtedness or sell the real property in the manner intended and as a result the entity may not be able to redeem our investment or pay the return expected to us in a timely manner or at all. In addition, we may not be able to dispose of our investment in the entity in a timely manner or at the price at which we would want to divest or at all. Further, the entity may need to refinance third-party debt on terms that are inconsistent with our interests or are terms on which we would not elect to incur debt, or the entity may default on third-party debt. To the extent the entity defaults on third-party debt or is unable to refinance such debt or any portion thereof, we may acquire such debt or otherwise take action, including contributing additional capital, to protect our position that we would not take absent the default or inability to refinance. Such activities have in the past involved and may in the future involve foreclosing on the security interest in the property secured by such debt, seeking a deed-in-lieu of foreclosure or similar remedy or removing our partner, and such activities may involve costs or delays or create other risks, including the risk of claims from our partners. In the event that such an entity fails to meet expectations, defaults on its debt, or becomes insolvent or the investment or the underlying property otherwise does not perform as expected, we may lose all or part of our investment in the entity, be delayed in recovering our investment or the expected returns or directly or indirectly take over the property or the management thereof at a time at which we would not have done so absent the failure to meet expectations or the default. In addition, in the event of a default or other changes in the circumstances of an investment, including a change in the value of the applicable property, we may be, and have been in the past, required to change the manner in which the investment is accounted for, including our ability to recognize earnings, or recognize an impairment or a loss on consolidation.
22
Table of Contents
Risks Related to Ground Leases. We have entered into in the past and may in the future enter into, as either landlord or tenant, a long-term ground lease with respect to a property or a portion thereof. Such ground leases may contain a rent reset provision that requires both parties to agree to a new rent or is based upon factors, for example fair market rent, that are not objective and are not within our control. We may not be able to agree with the counterparty to a revised rental rate, or the revised rental rate may be set by external factors, which could result in a different rental rate than we forecasted. In the past we have had disagreements with respect to revised rental rates and certain of such disagreements have gone to arbitration (for resolution as provided in the applicable lease agreement) and have been resolved in a manner adverse to us. In addition, the other party may not perform as expected under the ground lease or there may be a dispute with the other party to the ground lease. Any of these circumstances could have an adverse effect on our business, financial condition or operating results.
We May Experience a Decline in the Fair Value of Our Assets and Be Forced to Recognize Impairment Charges, Which Could Adversely Impact Our Financial Condition, Liquidity and Results of Operations and the Market Price of Our Common Stock. A decline in the fair value of our assets may require us, and has in the past required us, to recognize an impairment against such assets under generally accepted accounting principles as in effect in the United States (“GAAP”) if we were to determine that, with respect to any assets in unrealized loss positions, we do not have the ability and intent to hold such assets for a period of time sufficient to allow for recovery to the amortized cost of such assets. If such a determination were to be made, we would recognize unrealized losses through earnings and write down the amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sale price received and adjusted amortized cost of such assets at the time of sale. If we are required to recognize asset impairment charges in the future, these charges could adversely affect our financial condition, liquidity, results of operations and the market price of our common stock.
Any Material Weaknesses Identified in Our Internal Control Over Financial Reporting Could Have an Adverse Effect on the Market Price of Our Common Stock. Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we fail to maintain the adequacy of our internal controls over financial reporting, including any failure to implement required new or improved controls as a result of changes to our business or otherwise, or if we experience difficulties in their implementation, our business, results of operations and financial condition could be materially and adversely affected and we could fail to meet our reporting obligations. In addition, if we have one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on the market price of our common stock.
A Breach of Information Technology Systems On Which We Rely Could Materially and Adversely Impact Our Business, Financial Condition, Results of Operations and Reputation. We rely on information technology systems, including the internet and networks and systems and software developed, maintained and controlled by third party vendors and other third parties, to process, transmit and store information and to manage or support our business processes. Third party vendors may collect and hold personally identifiable information and other confidential information of our tenants, prospective tenants and employees. We also maintain such information and financial and business information regarding us and persons and entities with which we do business on our information technology systems. While we take steps, and generally require third party vendors to take steps, to protect the security of the information maintained in our and third party vendors’ information technology systems, including associate training and testing and the use of commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing of the information, it is possible that our or our third party vendors’ security measures will not be able to prevent human error or the systems’ or software’s improper functioning, or the loss, misappropriation, disclosure or corruption of personally identifiable information or other confidential or sensitive information, including information about our tenants and employees. Cybersecurity breaches, including physical or electronic break-ins, computer viruses, malware, phishing scams, attacks by hackers, breaches due to employee error or misconduct, and similar breaches, can create system disruptions, shutdowns or unauthorized access to information maintained on our information technology systems or the information technology systems of our third party vendors or other third parties or otherwise cause disruption or negative impacts to occur to our business and adversely affect our financial condition and results of operations. While we maintain cyber risk insurance to provide some coverage for certain risks arising out of cybersecurity breaches, there is no assurance that such insurance would cover all or a significant portion of the costs or consequences associated with a cybersecurity breach or other occurrence or that such insurance will continue to be available at rates that we consider reasonable or at all. We have in the past experienced cybersecurity breaches on our information technology systems or relating to software or third party vendor systems that we utilize, and, while none to
23
Table of Contents
date have been material to us, we expect such breaches may occur in the future. As the techniques used to obtain unauthorized access to information technology systems become more varied and sophisticated and the occurrence of such breaches becomes more frequent, we and our third party vendors and other third parties may be unable to adequately anticipate these techniques or breaches or implement appropriate preventative measures. Any failure to prevent cybersecurity breaches and maintain the proper function, security and availability of our or our third party vendors’ and other third parties’ information technology systems could interrupt our operations, damage our reputation and brand, damage our competitive position, make it difficult for us to attract and retain residents or other tenants, and subject us to liability claims or regulatory penalties that could adversely affect our business, financial condition and results of operations.
Our Business and Operations Would Suffer in the Event of Information Technology System Failures. Despite system redundancy and the existence of disaster recovery plans for our information technology systems, our information technology systems and the information technology systems maintained by our third party vendors are vulnerable to damage arising from any number of sources beyond our or our third party vendors’ control, including energy blackouts, natural disasters, terrorism, war, and telecommunication failures. Any failure to maintain proper function and availability of our or third parties’ information technology systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could adversely affect our business, financial condition and results of operations.
A Failure to Keep Pace with Developments in Technology Could Impair our Operations or Competitive Position. Our business continues and will continue to demand the use of sophisticated systems, software and technology, including artificial intelligence. These systems, software and technologies must be refined, updated and replaced on a regular basis in order for us to meet our business requirements, our residents’ demands and expectations, and regulatory requirements. If we are unable to do so on a timely basis or at a reasonable cost, or fail to do so, our business could suffer. Also, we may not achieve the benefits that we anticipate from any new system, software or technology, and a failure to do so could result in higher than anticipated costs or could adversely affect our results of operations.
Social Media Presents Risks. The use of social media could cause us to suffer brand damage or unintended information disclosure. Negative posts or communications about us on a social networking website could damage our reputation. Further, employees or others may disclose non-public information regarding us or our business or otherwise make negative comments regarding us on social networking or other websites, which could adversely affect our business and results of operations. As social media evolves, we will be presented with new risks and challenges.
Our Success Depends on Our Senior Management. Our success depends upon the retention of our senior management, whose continued service is not guaranteed. We may not be able to find qualified replacements for the individuals who make up our senior management if their services should no longer be available to us. The loss of services of one or more members of our senior management team could have a material adverse effect on our business, financial condition and results of operations.
Changes in U.S. Accounting Standards May Materially and Adversely Affect Our Reported Results of Operations. Accounting for public companies in the United States is in accordance with GAAP, which is established by the Financial Accounting Standards Board (the “FASB”), an independent body whose standards are recognized by the SEC as authoritative for publicly held companies. Uncertainties posed by various initiatives of accounting standard-setting by the FASB and the SEC, which create and interpret applicable accounting standards for U.S. companies, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements. These changes could have a material impact on our reported financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in potentially material restatements of prior period financial statements.
Third-Party Expectations Relating to Environmental, Social and Governance Factors May Impose Additional Costs and Expose Us to New Risks. There is a focus from certain investors, tenants, employees, and other stakeholders concerning corporate responsibility, specifically related to environmental, social and governance factors. In addition, there has been increased focus on such matters by various regulatory authorities, including the SEC and the state of California and other states or jurisdictions, and the activities and expense required to comply with new laws, regulations or standards may be significant. In addition, the standards or expectations of various stakeholders or regulators may differ from each other and it may not be possible to comply with all of such standards or expectations. Some investors may use these factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies relating to corporate responsibility are inadequate. Third-party providers of corporate responsibility ratings and reports on companies have increased in number, resulting in varied and in some cases inconsistent standards.
24
Table of Contents
In addition, the criteria by which companies’ corporate responsibility practices are assessed and the regulations applicable thereto are evolving, which could result in greater expectations of us and cause us to undertake costly initiatives or activities to satisfy such new criteria or regulations. Further, if we elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third-party provider or investor, some investors may conclude that our policies with respect to corporate responsibility are inadequate. We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies. Furthermore, if our competitors’ corporate responsibility performance is perceived to be greater than ours, potential or current investors may elect to invest in our competitors instead. In addition, we have communicated certain initiatives and goals regarding environmental, social and governance matters, and we may in the future communicate revised or additional initiatives or goals. We could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. In addition, certain locations have enacted, and others may in the future enact, sustainability regulations pertaining to buildings, including existing buildings. If we fail to satisfy the expectations of investors, tenants and other stakeholders, our initiatives are not executed as planned, we are unable to comply with regulations or we do not satisfy our goals, our reputation and financial results could be adversely affected.
Risks Related to Our Indebtedness and Financings
Changing Interest Rates Could Increase Interest Costs and Adversely Affect Our Cash Flows and the Market Price of Our Common Stock. We currently have, and expect to incur in the future, interest-bearing debt, including unsecured commercial paper, at rates that vary with market interest rates. As of December 31, 2025, we had approximately $673.4 million of variable rate indebtedness outstanding, which constitutes approximately 11.5% of total outstanding indebtedness as of such date, and we have from time to time experienced increases in the interest rates on such indebtedness, which has increased our interest expense and adversely impacted our results of operations and cash flows. In addition, as a result of higher interest rates, the costs of hedging transactions have increased significantly and may continue to increase. Continued increases in interest rates would further increase our interest expenses and increase the costs of refinancing existing indebtedness and of issuing new debt, including unsecured commercial paper. The effect of any prolonged interest rate increases could negatively impact our ability to service our indebtedness, make distributions to security holders, make acquisitions and develop properties.
Insufficient Cash Flow Could Affect Our Debt Financing and Create Refinancing Risk. We are subject to the risks normally associated with debt financing, including the risk that our operating income and cash flow could be insufficient to make required payments of principal and interest, could restrict or limit our ability to incur additional debt, or could restrict our borrowing capacity under our line of credit due to debt covenant restraints. Sufficient cash flow may not be available to make all required debt payments and satisfy our distribution requirements to maintain our status as a REIT for federal income tax purposes. In addition, the amounts under our line of credit may not be available to us and we may not be able to access the commercial paper market if our operating performance falls outside the constraints of our debt covenants. We are also likely to need to refinance substantially all of our outstanding debt as it matures. We may not be able to refinance existing debt, or the terms of any refinancing may not be as favorable as the terms of the existing debt, which could create pressure to sell assets or to issue additional equity when we would otherwise not choose to do so. In addition, our failure to comply with our debt covenants could result in a requirement to repay our indebtedness prior to its maturity, which could have a material adverse effect on our financial condition and cash flow, increase our financing costs and impact our ability to make distributions to our stockholders.
Failure to Generate Sufficient Income Could Impair Debt Service Payments and Distributions to Stockholders. If our apartment communities do not generate sufficient revenue to meet rental expenses, our ability to make required payments of interest and principal on our debt and to pay dividends or distributions to our stockholders will be adversely affected. The following factors, among others, may affect the income generated by our apartment communities:
| ● | the national and local economies; |
| ● | local real estate market conditions, such as an oversupply or increasing supply of apartment homes; |
| ● | tenants’ or prospective tenants’ perceptions of the safety, convenience, and attractiveness of our communities and the neighborhoods where they are located; |
| ● | our ability to provide adequate management, maintenance and insurance; |
| ● | rental expenses, including real estate taxes and utilities; |
| ● | competition from other apartment communities or alternative housing options; |
25
Table of Contents
| ● | changes in interest rates and the availability of financing; |
| ● | changes in governmental regulations and the related costs of compliance; and |
| ● | changes in tax and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing. |
Expenses associated with our investment in an apartment community, such as debt service, real estate taxes, insurance, labor costs and maintenance costs, are generally not reduced when circumstances cause a reduction in revenue from that community. If a community is mortgaged to secure payment of debt and we are unable to make the mortgage payments, we could sustain a loss as a result of foreclosure on the community or the exercise of other remedies by the mortgage holder.
Our Debt Level May Be Increased. Our ability to incur debt is limited by covenants in our bank and other credit agreements. We manage our debt to be in compliance with these debt covenants, but subject to compliance with these covenants, we may increase the amount of our debt at any time without a concurrent improvement in our ability to service the additional debt.
Financing May Not Be Available and Could Be Dilutive. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit, construction loans and other forms of secured debt, commercial paper and other forms of unsecured debt, and equity financing, including common and preferred equity. We and other companies in the real estate industry have experienced limited availability of financing from time to time, including due to disruptions and uncertainty in the equity and credit markets and regulatory changes directly or indirectly affecting financing markets, for example the changes in terms on construction loans brought about by the Basel III capital requirements and the associated “High Volatility Commercial Real Estate” designation, which has adversely impacted the availability of loans, including construction loans, and the proceeds of and the interest rates thereon. Restricted lending practices could impact our ability to obtain financing or refinancing for our properties. If we issue additional equity securities, including under our ATM program, instead of incurring debt, the interests of our existing stockholders could be diluted.
Failure To Maintain Our Current Credit Ratings Could Adversely Affect Our Cost of Funds, Related Margins, Liquidity, and Access to Capital Markets. Moody’s and Standard & Poor’s routinely evaluate our debt and have given us ratings on our senior unsecured debt, commercial paper program and preferred stock. These ratings are based on a number of factors, which include their assessment of our financial strength, liquidity, capital structure, asset quality, and sustainability of cash flows and earnings. Due to changes in these factors and market conditions, we may not be able to maintain our current credit ratings, which could adversely affect our cost of funds and related margins, liquidity, and access to capital markets, including our ability to access the commercial paper market.
Disruptions in Financial Markets May Adversely Impact the Availability and Cost of Credit and Have Other Adverse Effects on Us and the Market Price of Our Common Stock. Our ability to make scheduled payments on, or to refinance, our debt obligations will depend on our operating and financial performance, which in turn is subject to prevailing economic conditions and to financial, business and other factors beyond our control. The global equity and credit markets have experienced in the past, and may experience in the future, periods of extraordinary turmoil and volatility. These circumstances may materially and adversely impact liquidity in the financial markets at times, making terms for certain financings less attractive or in some cases unavailable. Disruptions and uncertainty in the equity and credit markets, including as a result of bank failures and uncertainty in the banking sector generally, may negatively impact our ability to refinance existing indebtedness and access additional financing for acquisitions, development of our properties and other purposes at reasonable terms or at all, which may negatively affect our business and the market price of our common stock. We also rely on the financial institutions that are parties to our revolving credit facility and other credit facilities. If these institutions become capital constrained, tighten their lending standards or become insolvent or if they experience excessive volumes of borrowing requests from other borrowers within a short period of time, they may be unable or unwilling to honor their funding commitments to us, which would adversely affect our ability to draw on our revolving credit facility. If we are not successful in refinancing our existing indebtedness when it becomes due, we may be forced to dispose of properties on disadvantageous terms, which might adversely affect our ability to service other debt and to meet our other obligations. A prolonged downturn in the financial markets may cause us to seek alternative sources of potentially less attractive financing and may require us to adjust our business plan accordingly. These events also may make it more difficult or costly for us to raise capital through the issuance of our common or preferred stock.
26
Table of Contents
A Change in U.S. Government Policy or Support Regarding Fannie Mae or Freddie Mac Could Have a Material Adverse Impact on Our Business. While in recent years we have decreased our borrowings from Fannie Mae and Freddie Mac, Fannie Mae and Freddie Mac are a major source of financing to participants in the multifamily housing markets including potential purchasers of our properties. Potential options for the future of agency mortgage financing in the U.S. have been, and may in the future be, suggested that could involve a reduction in the amount of financing Fannie Mae and Freddie Mac are able to provide, limitations on the loans that the agencies may make, which may not include loans secured by properties like our properties, or the phase out of Fannie Mae and Freddie Mac. Should Fannie Mae and Freddie Mac discontinue providing liquidity to our sector, have their mandates changed or reduced or be disbanded or reorganized by the government, or if there is reduced government support for multifamily housing generally, it may adversely affect interest rates, capital availability, development of multifamily communities and the value of multifamily residential real estate and, as a result, may adversely affect our business and results of operations.
The Soundness of Financial Institutions Could Adversely Affect Us. We have relationships with many financial institutions, including lenders under our credit facilities, and, from time to time, we execute transactions with counterparties in the financial services industry. Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, could result in losses or defaults by these institutions or counterparties or could lead to market-wide liquidity problems. Disruptions and uncertainty with respect to financial institutions, including as a result of bank failures and liquidity concerns, may negatively impact our ability to refinance existing indebtedness and access additional financing for acquisitions, development of our properties and other purposes at reasonable terms or at all, which may negatively affect our business and the market price of our common stock. In addition, in the event that the volatility of the financial markets adversely affects our financial institutions or other counterparties, we or other parties to the transactions with us may be unable to complete transactions as intended, which could adversely affect our results of operations.
Interest Rate Hedging Contracts May Be Ineffective and May Result in Material Charges. From time to time when we anticipate issuing debt securities, we may seek to limit our exposure to fluctuations in interest rates during the period prior to the pricing of the securities by entering into interest rate hedging contracts. We may do this to increase the predictability of our financing costs. Also, from time to time we may rely on interest rate hedging contracts to limit our exposure under variable rate debt to unfavorable changes in market interest rates. If the terms of new debt securities are not within the parameters of, or market interest rates fall below that which we incur under a particular interest rate hedging contract, the contract is ineffective. Furthermore, the settlement of interest rate hedging contracts has involved and may in the future involve material charges. In addition, our use of interest rate hedging arrangements may expose us to additional risks, including a risk that a counterparty to a hedging arrangement may fail to honor its obligations. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial impact on our results of operations or financial condition. Termination of these hedging agreements typically involves costs, such as transaction fees or breakage costs.
Risks Related to Tax Laws
We Would Incur Adverse Tax Consequences if We Failed to Qualify as a REIT. We have elected to be taxed as a REIT under the Code. Our qualification as a REIT requires us to satisfy numerous requirements, some on an annual and quarterly basis, established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. We intend that our current organization and method of operation will enable us to continue to qualify as a REIT, but we may not so qualify or we may not be able to remain so qualified in the future. In addition, U.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of those laws may be amended at any time, potentially with retroactive effect. Future legislation, new regulations, administrative interpretations or court decisions could adversely affect our ability to qualify as a REIT or adversely affect our stockholders.
If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate rates, and would not be allowed to deduct dividends paid to our stockholders in computing our taxable income. Also, unless the Internal Revenue Service granted us relief under certain statutory provisions, we could not re-elect REIT status until the fifth calendar year after the year in which we first failed to qualify as a REIT. The additional tax liability from the failure to qualify as a REIT would reduce or eliminate the amount of cash available for investment or distribution to our stockholders. This would likely have a significant adverse effect on the value of our securities and our ability to raise additional capital. In addition, we would no longer be required to make distributions to
27
Table of Contents
our stockholders. Even if we continue to qualify as a REIT, we will continue to be subject to certain federal, state and local taxes on our income and property.
Certain of our subsidiaries have also elected to be taxed as REITs under the Code, and are therefore subject to the same risks in the event that any such subsidiary fails to qualify as a REIT in any taxable year.
Dividends Paid by REITs Generally Do Not Qualify for Reduced Tax Rates. In general, qualified dividends paid to individual U.S. stockholders are eligible for a reduced 20% U.S. federal income tax rate. However, unlike dividends received from a corporation that is not a REIT, our regular dividends (i.e., dividends other than capital gain dividends) paid to individual U.S. stockholders generally are not eligible for the reduced rates on qualified dividends and are instead taxed at ordinary income rates. However, individual U.S. stockholders generally may deduct 20% of our regular dividends under Section 199A of the Code, reducing the effective tax rate applicable to such dividends.
We Conduct a Portion of Our Business Through Taxable REIT Subsidiaries, Which Are Subject to Certain Tax Risks. We have established or invested in and conduct a portion of our business through taxable REIT subsidiaries. Despite our qualification as a REIT, taxable REIT subsidiaries must pay income tax on their taxable income. In addition, we must comply with various tests to continue to qualify as a REIT for federal income tax purposes, and our income from and investments in taxable REIT subsidiaries generally do not constitute permissible income and investments for certain of these tests. While we will attempt to ensure that our dealings with taxable REIT subsidiaries will not adversely affect our REIT qualification, we cannot provide assurance that we will successfully achieve that result. Furthermore, we may be subject to a 100% penalty tax or taxable REIT subsidiaries may be denied deductions, to the extent our dealings with taxable REIT subsidiaries are not deemed to be arm’s length in nature or are otherwise not respected.
REIT Distribution Requirements Limit Our Available Cash. As a REIT, we are subject to annual distribution requirements, which limit the amount of cash we retain for other business purposes, including amounts to fund our growth. We generally must distribute annually at least 90% of our net REIT taxable income, excluding any net capital gain, in order for our distributed earnings not to be subject to corporate income tax. We intend to make distributions to our stockholders to comply with the requirements of the Code. However, differences in timing between the recognition of taxable income and the actual receipt of cash and/or nondeductible expenditures, could require us to sell assets or borrow funds on a short-term or long-term basis to meet the 90% distribution requirement of the Code. To the extent we distribute at least 90%, but less than 100%, of our net REIT taxable income we will be subject to tax at regular corporate tax rates on the retained portion.
Certain Property Transfers May Generate Prohibited Transaction Income, Resulting in a Penalty Tax on Gain Attributable to the Transaction. From time to time, we may transfer or otherwise dispose of some of our properties. Under the Code, any gain resulting from transfers of properties that we hold as inventory or primarily for sale to customers in the ordinary course of business would be treated as income from a prohibited transaction and subject to a 100% penalty tax. Since we acquire properties for investment purposes, we do not believe that our occasional transfers or disposals of property are prohibited transactions. However, whether property is held for investment purposes is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. The Internal Revenue Service may contend that certain transfers or disposals of properties by us are prohibited transactions. If the Internal Revenue Service were to argue successfully that a transfer or disposition of property constituted a prohibited transaction, then we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT for federal income tax purposes.
Changes to the U.S. Federal Income Tax Laws, including the Enactment of Certain Tax Reform Measures, Could Have an Adverse Impact on Our Business and Financial Results. In recent years, numerous legislative, judicial and administrative changes have been made to the U.S. federal income tax laws applicable to investments in real estate and REITs, and it is possible that additional legislation may be enacted in the future. There can be no assurance that future changes to the U.S. federal income tax laws or regulatory changes will not be proposed or enacted that could impact our business and financial results. The REIT rules are regularly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S. Treasury Department, which may result in revisions to regulations and interpretations in addition to statutory changes. If enacted, certain of such changes could have an adverse impact on our business and financial results.
We cannot predict whether, when or to what extent any new U.S. federal income tax laws, regulations, interpretations or rulings will impact the real estate investment industry or REITs. Prospective investors are urged to
28
Table of Contents
consult their tax advisors regarding the effect of potential future changes to the U.S. federal income tax laws on an investment in our shares.
We May Be Adversely Affected by Changes in State and Local Tax Laws and May Become Subject to Tax Audits from Time to Time. Because we are organized and qualify as a REIT, we are generally not subject to federal income tax, but we are subject to certain state and local tax. From time to time, changes in state and local tax laws or regulations may result in an increase in our tax liability. A shortfall in tax revenues for states and local jurisdictions in which we own apartment communities may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional state and local taxes. These increased tax costs could adversely affect our financial condition and the amount of cash available for the payment of distributions to our stockholders. In the normal course of business, we or our affiliates (including entities through which we own real estate) may also become subject to federal, state or local tax audits. If we (or such entities) become subject to federal, state or local tax audits, the ultimate result of such audits could have an adverse effect on our financial condition and results of operations.
The Operating Partnership and the DownREIT Partnership Intend to Qualify as Partnerships, but Cannot Guarantee That They Will Qualify. The Operating Partnership and the DownREIT Partnership intend to qualify as partnerships for federal income tax purposes, and we intend to take that position for all income tax reporting purposes. If classified as partnerships, the Operating Partnership and the DownREIT Partnership generally will not be taxable entities and will not incur federal income tax liability. However, the Operating Partnership and the DownREIT Partnership would be treated as corporations for federal income tax purposes if they were “publicly traded partnerships,” unless at least 90% of their income was qualifying income as defined in the Code. A “publicly traded partnership” is a partnership whose partnership interests are traded on an established securities market or are readily tradable on a secondary market (or the substantial equivalent thereof). Although neither the Operating Partnership’s nor the DownREIT Partnership’s partnership units are traded on an established securities market, because of the redemption rights of their limited partners, the Operating Partnership’s and DownREIT Partnership’s units held by limited partners could be viewed as readily tradable on a secondary market (or the substantial equivalent thereof), and the Operating Partnership and the DownREIT Partnership may not qualify for one of the “safe harbors” under the applicable tax regulations. Qualifying income for the 90% test generally includes passive income, such as real property rents, dividends and interest. The income requirements applicable to REITs and the definition of qualifying income for purposes of this 90% test are similar in most respects. The Operating Partnership and the DownREIT Partnership may not meet this qualifying income test. If either the Operating Partnership or the DownREIT Partnership were to be taxed as a corporation, unless it qualified for relief under certain statutory savings provisions, such partnership would incur substantial tax liabilities, and we would then fail to qualify as a REIT for tax purposes and our ability to raise additional capital would be impaired. In addition, even if the 90% test were met if the Operating Partnership or the DownREIT Partnership were a publicly traded partnership, there could be adverse tax impacts for certain limited partners.
Qualifying as a REIT Involves Highly Technical and Complex Provisions of the Code. Our qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Moreover, new legislation, court decisions or administrative guidance, in each case possibly with retroactive effect, may make it more difficult or impossible for us to qualify as a REIT. Our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Our ability to satisfy the REIT income and asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination and for which we will not obtain independent appraisals, and upon our ability to successfully manage the composition of our income and assets on an ongoing basis. In addition, our ability to satisfy the requirements to qualify as a REIT depends in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership for federal income tax purposes.
Risks Related to Our Organization and Ownership of Our Stock
Changes in Market Conditions and Volatility of Stock Prices Could Adversely Affect the Market Price of Our Common Stock. The stock markets, including the New York Stock Exchange (“NYSE”), on which we list our common stock, have experienced significant price and volume fluctuations. As a result, the market price of our common stock has been, and in the future could be similarly volatile, and investors in our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. In addition to the risks
29
Table of Contents
listed in this “Risk Factors” section, a number of factors could negatively affect the price per share of our common stock, including:
| ● | general market and economic conditions; |
| ● | actual or anticipated variations in our quarterly operating results or dividends or our payment of dividends in shares of our stock; |
| ● | changes in our funds from operations or earnings estimates; |
| ● | difficulties or inability to access capital or extend or refinance existing debt; |
| ● | decreasing (or uncertainty in) real estate valuations; |
| ● | changes in market valuations of similar companies; |
| ● | publication of research reports about us or the real estate industry; |
| ● | the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities (including securities issued by other real estate companies); |
| ● | general stock and bond market conditions, including changes in interest rates on fixed income securities, that may lead prospective purchasers of our common stock to demand a higher annual yield from future dividends; |
| ● | a change in analyst ratings; |
| ● | additions or departures of key management personnel; |
| ● | adverse market reaction to any additional debt we incur in the future; |
| ● | speculation in the press or investment community; |
| ● | terrorist activity, geopolitical events or armed conflicts (including the ongoing war between Russia and Ukraine), which may adversely affect the markets in which our securities trade, possibly increasing market volatility and causing the further erosion of business and consumer confidence and spending; |
| ● | failure to qualify as a REIT; |
| ● | strategic decisions by us or by our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy; |
| ● | failure to satisfy listing requirements of the NYSE; |
| ● | governmental regulatory action and changes in tax laws; and |
| ● | the issuance of additional shares of our common stock, or the perception that such sales might occur, including under an at-the-market equity distribution program. |
Many of the factors listed above are beyond our control. These factors may cause the market price of shares of our common stock to decline, regardless of our financial condition, results of operations, business or prospects.
We May Change the Dividend Policy for Our Common Stock in the Future. The decision to declare and pay dividends on our common stock, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of directors and will depend on our earnings, funds from operations, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our indebtedness, the annual distribution requirements under the REIT provisions of the Code, state law and such other factors as our board of directors considers relevant. Any change in our dividend policy could have an adverse effect on the market price of our common stock.
Maryland Law May Limit the Ability of a Third Party to Acquire Control of Us, Which May Not be in Our Stockholders’ Best Interests. Maryland business statutes may limit the ability of a third party to acquire control of us. As a Maryland corporation, we are subject to various Maryland laws which may have the effect of discouraging offers to acquire our Company and of increasing the difficulty of consummating any such offers, even if our acquisition would be in our stockholders’ best interests. The Maryland General Corporation Law restricts mergers and other business combination transactions between us and any person who acquires beneficial ownership of shares of our stock
30
Table of Contents
representing 10% or more of the voting power without our board of directors’ prior approval. Any such business combination transaction could not be completed until five years after the person acquired such voting power, and generally only with the approval of stockholders representing 80% of all votes entitled to be cast and 66 2/3% of the votes entitled to be cast, excluding the interested stockholder, or upon payment of a fair price. Maryland law also provides generally that a person who acquires shares of our equity stock that represents 10% (and certain higher levels) of the voting power in electing directors will have no voting rights unless approved by a vote of two-thirds of the shares eligible to vote.
Limitations on Share Ownership and Limitations on the Ability of Our Stockholders to Effect a Change in Control of Our Company Restrict the Transferability of Our Stock and May Prevent Takeovers That are Beneficial to Our Stockholders. One of the requirements for maintenance of our qualification as a REIT for U.S. federal income tax purposes is that no more than 50% in value of our outstanding capital stock may be owned by five or fewer individuals, including entities specified in the Code, during the last half of any taxable year. Our charter contains ownership and transfer restrictions relating to our stock primarily to assist us in complying with this and other REIT ownership requirements; however, the restrictions may have the effect of preventing a change of control which does not threaten our REIT status. These restrictions include a provision that generally limits ownership by any person of more than 9.9% of the value of our outstanding equity stock, unless our board of directors exempts the person from such ownership limitation, provided that any such exemption shall not allow the person to exceed 13% of the value of our outstanding equity stock. Absent such an exemption from our board of directors, the transfer of our stock to any person in excess of the applicable ownership limit, or any transfer of shares of such stock in violation of the ownership requirements of the Code for REITs, will be considered null and void, and the intended transferee of such stock will acquire no rights in such shares. These provisions of our charter may have the effect of delaying, deferring or preventing someone from taking control of us, even though a change of control might involve a premium price for our stockholders or might otherwise be in our stockholders’ best interests.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 1C. Cybersecurity
Given the prevalence of cybersecurity threats, cybersecurity represents a critical component of the Company’s overall approach to risk management. The Company’s cybersecurity policies, standards and practices are
Risk Management and Strategy
Consistent with overall ERM policies and practices, the Company’s cybersecurity program focuses on the following areas:
| ● | Vigilance: The Company operates cybersecurity threat functions 24/7 with the specific goal of identifying, attempting to prevent and mitigating cybersecurity threats and responding to cybersecurity incidents in accordance with our established incident response and recovery plans. |
31
Table of Contents
| ● | Systems Safeguards: The Company deploys systems safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through ongoing vulnerability assessments and cybersecurity threat intelligence. |
| ● | Collaboration: The Company utilizes collaboration mechanisms established with public and private entities, including intelligence and enforcement agencies, |
| ● | Third-Party Risk Management: The Company maintains a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. |
| ● | Insider Threat Management: In order to try to mitigate cybersecurity threats to our systems, the Company attempts to provide associates with the minimum access to our systems required in order for a given associate to perform his or her assigned duties. We also perform reviews of access to both our administrative and financial systems as part of our annual compliance procedures, and, when duties and resources allow, rotate job responsibilities. |
| ● | Training: Upon employment and at least annually thereafter the Company provides mandatory training for our associates regarding cybersecurity threats, which reinforces the Company’s information security policies, standards and practices, and such training is scaled to reflect the roles, responsibilities, and information systems access of such personnel. The Company’s cybersecurity team performs regular phishing tests for associates and provides remedial training for associates who fail such tests. In addition, members of our cybersecurity team received specialized cybersecurity training. |
| ● | Incident Response and Recovery Planning: The Company has established and maintains incident response and recovery plans that address the Company’s response to a cybersecurity incident and the recovery from a cybersecurity incident, and such plans are assessed and evaluated on a regular basis. All meaningful cybersecurity incidents are reported to the Company’s legal department by our cybersecurity team. |
| ● | Governance, Communication, Coordination and Disclosure: The Company utilizes a cross-functional approach to address the risk from cybersecurity threats, involving management personnel from the Company’s technology, operations, legal, risk management, internal audit and other key business functions, third-party vendors and consultants, as well as the members of the Board and the Audit and Risk Management Committee of the Board (the “Audit Committee”) in an ongoing dialogue regarding cybersecurity threats and incidents, while also implementing controls and procedures for the escalation of cybersecurity incidents when appropriate so that decisions regarding the disclosure and reporting of such incidents can be made by management in a timely manner. Our Senior Vice President – Chief Technology Officer reports on our cybersecurity posture to the Audit Committee quarterly and the Board is updated at least annually. |
A key part of the Company’s strategy for managing risks from cybersecurity threats is the ongoing assessment and testing of the Company’s processes and practices through auditing, assessments, tabletop exercises, vulnerability testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures. The Company engages third parties, including legal counsel, to perform assessments on our cybersecurity measures, including information security maturity assessments, penetration testing inclusive of our resident facing apps and devices, audits and independent reviews of our information security control environment and operating effectiveness. The material results of such assessments, audits and reviews are reported to the Audit Committee and the Board, and the Company adapts its cybersecurity policies, standards, processes, and practices as necessary based on the information provided by the assessments, audits, and reviews. In addition, in 2025, 2024 and 2023, outside legal counsel conducted an exercise regarding preparation for cyber events attended by our Chairman, President and Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Legal Officer and other members of senior management.
32
Table of Contents
Governance
The
The Company’s Chief Technology Officer and Vice President, Information Security, in coordination with the ISMS, work collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents. To facilitate the success of this program, our IT security team and, when necessary, multidisciplinary teams throughout the Company are deployed to address cybersecurity threats and to respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans. Through the ongoing communications from these teams, the Chief Technology Officer and the Vice President, Information Security monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents, and
To date, the Company has
33
Table of Contents
Item 2. PROPERTIES
At December 31, 2025, our consolidated apartment portfolio included 165 communities located in 21 markets, with a total of 55,240 completed apartment homes.
The table below set forth a summary of real estate portfolio by geographic market of the Company at December 31, 2025.
SUMMARY OF REAL ESTATE PORTFOLIO BY GEOGRAPHIC MARKET AT DECEMBER 31, 2025
| | Percentage | | Total | | Average | |||||||||||||
Number of | Number of | of Total | Carrying | Average | Home Size | ||||||||||||||
Apartment | Apartment | Carrying | Value | Encumbrances | Cost per | Physical | (in square | ||||||||||||
Communities | Homes | Value | (in thousands) | (in thousands) | Home | Occupancy | feet) | ||||||||||||
WEST REGION |
| |
| |
| |
| | |
| |
| |
| | ||||
Orange County, CA |
| 8 |
| 4,305 |
| 8.6 | % | $ | 1,423,481 | $ | — | $ | 330,658 |
| 96.9 | % | 856 | ||
San Francisco, CA |
| 14 |
| 3,317 |
| 7.5 | % |
| 1,240,460 |
| 27,000 |
| 373,970 |
| 97.4 | % | 829 | ||
Seattle, WA |
| 14 |
| 2,702 |
| 6.9 | % |
| 1,142,896 |
| — |
| 422,981 |
| 96.9 | % | 856 | ||
Los Angeles, CA |
| 4 |
| 1,225 |
| 3.0 | % |
| 495,389 |
| — |
| 404,399 |
| 96.5 | % | 967 | ||
Monterey Peninsula, CA |
| 7 |
| 1,567 |
| 1.3 | % |
| 208,609 |
| — |
| 133,126 |
| 96.5 | % | 728 | ||
Other Southern California |
| 3 |
| 821 |
| 1.4 | % |
| 230,659 |
| — |
| 280,949 |
| 96.7 | % | 1,012 | ||
Portland, OR |
| 1 |
| 220 |
| 0.2 | % |
| 27,016 |
| — |
| 122,800 |
| 96.8 | % | 1,054 | ||
NORTHEAST REGION |
|
|
| |
|
|
|
| |
| |||||||||
Boston, MA |
| 12 |
| 4,667 |
| 12.1 | % |
| 1,996,655 |
| 227,698 |
| 427,824 |
| 96.7 | % | 994 | ||
New York, NY |
| 4 |
| 1,945 |
| 8.6 | % |
| 1,409,922 |
| — |
| 724,896 |
| 97.9 | % | 744 | ||
Philadelphia, PA | 5 | 1,650 | 3.8 | % | 625,043 | — | 378,814 | 95.9 | % | 674 | |||||||||
MID-ATLANTIC REGION |
|
|
| |
|
|
|
|
| ||||||||||
Metropolitan D.C. |
| 25 |
| 9,525 |
| 17.4 | % |
| 2,853,871 |
| 160,930 |
| 299,619 |
| 96.9 | % | 879 | ||
Baltimore, MD |
| 7 |
| 2,219 |
| 3.5 | % |
| 583,010 |
| 57,913 |
| 262,735 |
| 96.9 | % | 964 | ||
Richmond, VA |
| 2 |
| 841 |
| 0.6 | % |
| 90,839 |
| — |
| 108,013 |
| 96.4 | % | 956 | ||
SOUTHEAST REGION |
|
|
| |
|
|
|
| |
| |||||||||
Tampa, FL |
| 12 |
| 4,207 |
| 5.1 | % |
| 846,272 |
| — |
| 201,158 |
| 96.4 | % | 977 | ||
Orlando, FL |
| 10 |
| 3,293 |
| 3.4 | % |
| 568,799 |
| — |
| 172,730 |
| 96.6 | % | 982 | ||
Nashville, TN |
| 8 |
| 2,261 |
| 1.7 | % |
| 280,224 |
| — |
| 123,938 |
| 96.3 | % | 933 | ||
Other Florida |
| 1 |
| 636 |
| 0.6 | % |
| 99,389 |
| — |
| 156,272 |
| 96.4 | % | 1,130 | ||
SOUTHWEST REGION |
|
|
| |
|
|
|
| |
| |||||||||
Dallas, TX |
| 20 |
| 7,449 |
| 8.4 | % |
| 1,378,030 |
| 425,028 |
| 184,995 |
| 97.1 | % | 858 | ||
Austin, TX |
| 6 |
| 1,880 |
| 2.0 | % |
| 329,246 |
| 65,906 |
| 175,131 |
| 97.2 | % | 891 | ||
Denver, CO |
| 2 |
| 510 |
| 1.5 | % |
| 252,664 |
| — |
| 495,420 |
| 95.7 | % | 861 | ||
Total Operating Communities |
| 165 |
| 55,240 |
| 97.6 | % |
| 16,082,474 |
| 964,475 | $ | 291,138 |
| 96.8 | % | 893 | ||
Real Estate Under Development (a) |
| — |
| — |
| 0.4 | % |
| 72,885 |
| — |
| |
| |
| | ||
Land |
| — |
| — |
| 1.4 | % |
| 237,550 |
| — |
| |
| |
| | ||
Other |
| — |
| — |
| 0.6 | % |
| 94,976 |
| (3,295) |
| |
| |
| | ||
Total Real Estate Owned |
| 165 |
| 55,240 |
| 100.0 | % | $ | 16,487,885 | $ | 961,180 |
| |
| |
| | ||
Item 3. LEGAL PROCEEDINGS
The Company is a party to various claims and routine litigation arising in the ordinary course of business. We do not believe that the results of any such claims and litigation, individually or in the aggregate, will have a material adverse effect on our business, financial position or results of operations. As described in more detail in Note 15, Commitments and Contingencies, to the consolidated financial statements included in this report, we are currently a defendant, among other companies, in lawsuits related to our use of products licensed by RealPage, Inc.
Item 4. MINE SAFETY DISCLOSURES
Not Applicable.
34
Table of Contents
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Capital Stock
Common Stock
UDR, Inc.’s common stock has been listed on the New York Stock Exchange (“NYSE”) under the symbol “UDR” since May 7, 1990.
On February 11, 2026, there were 2,400 holders of record of the 328,571,965 outstanding shares of our common stock.
We have determined that, for federal income tax purposes, approximately 83% of the distributions for 2025 represented ordinary income, 10% represented long-term capital gain and 7% represented unrecaptured section 1250 gain.
UDR pays regular quarterly distributions to holders of its common stock. Future distributions will be at the discretion of our Board of Directors and will depend on our actual funds from operations, financial condition and capital requirements, the annual distribution requirements under the REIT provisions of the Code, and other factors.
Series E Preferred Stock
The Series E Cumulative Convertible Preferred Stock (“Series E”) has no stated par value and a liquidation preference of $16.61 per share. Subject to certain adjustments and conditions, each share of the Series E is convertible at any time at the holder’s option into 1.083 shares of our common stock. The holders of the Series E are entitled to vote on an as-converted basis as a single class in combination with the holders of common stock at any meeting of our stockholders for the election of directors or for any other purpose on which the holders of common stock are entitled to vote. The Series E has no stated maturity and is not subject to any sinking fund or any mandatory redemption. In connection with a special dividend (declared on November 5, 2008), the Company reserved for issuance upon conversion of the Series E additional shares of common stock to reflect the number of shares a holder of the Series E would have received if the holder had converted the Series E immediately prior to the record date for this special dividend.
Distributions declared on the Series E for the years ended December 31, 2025 and 2024 were $1.86 per share, or $0.465 per quarter, and $1.8408 per share, or $0.4602 per quarter, respectively. The Series E is not listed on any exchange. At December 31, 2025, a total of 2.6 million shares of the Series E were outstanding.
Series F Preferred Stock
We are authorized to issue up to 20.0 million shares of our Series F Preferred Stock (“Series F”). The Series F may be purchased by holders of limited partnership interests in the Operating Partnership and the DownREIT Partnership at a purchase price of $0.0001 per share. Certain OP/DownREIT unitholders were entitled to subscribe for and purchase one share of the Series F for each OP/DownREIT Unit held.
As of December 31, 2025, a total of 10.1 million shares of the Series F were outstanding. Holders of the Series F are entitled to one vote for each share of the Series F they hold, voting together with the holders of our common stock, on each matter submitted to a vote of security holders at a meeting of our stockholders. The Series F does not entitle its holders to any other rights, privileges or preferences.
Distribution Reinvestment and Stock Purchase Plan
We have a Distribution Reinvestment and Stock Purchase Plan under which holders of our common stock may elect to automatically reinvest their distributions and make additional cash payments to acquire additional shares of our common stock. Stockholders who do not participate in the plan continue to receive distributions as and when declared. As of February 11, 2026, there were approximately 1,398 participants in the plan.
35
Table of Contents
Unregistered Sales of Equity Securities
From time to time we issue shares of our common stock in exchange for OP Units tendered to the Operating Partnership for redemption in accordance with the provisions of the Operating Partnership’s limited partnership agreement. Under the terms of the Operating Partnership’s limited partnership agreement, the holders of OP Units have the right to require the Operating Partnership to redeem all or a portion of the OP Units held by the holder in exchange for a cash payment based on the market value of our common stock at the time of redemption. However, the Operating Partnership’s obligation to pay the cash amount is subject to the prior right of the Company to acquire such OP Units in exchange for either the cash amount or the number of shares of our common stock equal to the number of OP Units being redeemed.
During the three months ended December 31, 2025, we issued 14,651 shares of our common stock upon redemption of OP Units in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.
Purchases of Equity Securities
In January 2008, UDR’s Board of Directors authorized a 15 million share repurchase program. Under the share repurchase program, UDR may repurchase shares of our common stock in open market purchases, block purchases, privately negotiated transactions or otherwise. The following table summarizes all of UDR’s repurchases of shares of common stock under this program during the quarter ended December 31, 2025 (shares in thousands):
| | Total Number | | Maximum | ||||
of Shares | Number of | |||||||
Purchased as | Shares that | |||||||
Total | Part of | May Yet Be | ||||||
Number of | Average | Publicly | Purchased | |||||
Shares | Price Paid | Announced Plan | Under the Plan | |||||
Period | Purchased | per Share | or Program | or Program (a) | ||||
Beginning Balance | 3,624 | $ | 37.98 |
| 3,624 |
| 11,376 | |
October 1, 2025 through October 31, 2025 | 277 |
| 36.14 |
| 277 |
| 11,099 | |
November 1, 2025 through November 30, 2025 | 1,046 |
| 34.78 |
| 1,046 |
| 10,053 | |
December 1, 2025 through December 31, 2025 | 1,286 |
| 36.07 |
| 1,286 |
| 8,767 | |
Balance as of December 31, 2025 | 6,233 | $ | 36.97 |
| 6,233 |
| 8,767 | |
| (a) | This number reflects the number of shares that were available for purchase under our 15 million share repurchase program authorized in January 2008. |
During the three months ended December 31, 2025, certain of our employees surrendered shares of common stock owned by them to satisfy their statutory federal and state tax obligations associated with the vesting of restricted shares of common stock issued under our 1999 Long-Term Incentive Plan (the “LTIP”). The following table summarizes all of these repurchases during the three months ended December 31, 2024 (shares in thousands):
| | Total Number | | Maximum | ||||
of Shares | Number of | |||||||
Purchased as | Shares that | |||||||
Total | Part of | May Yet Be | ||||||
Number of | Average | Publicly | Purchased | |||||
Shares | Price Paid | Announced Plans | Under the Plans | |||||
Period | Purchased | per Share (a) | or Programs | or Programs | ||||
October 1, 2025 through October 31, 2025 | — | $ | — |
| N/A |
| N/A | |
November 1, 2025 through November 30, 2025 | — |
| — |
| N/A |
| N/A | |
December 1, 2025 through December 31, 2025 | 1 |
| 35.75 |
| N/A |
| N/A | |
Total | 1 | $ | 35.75 |
| |
| | |
| (a) | The price paid per share is based on the closing price of our common stock as of the date of the determination of the federal and state tax obligations. |
36
Table of Contents
Comparison of Five-year Cumulative Total Returns
The following graph compares the five-year cumulative total returns for UDR common stock with the comparable cumulative return of the Nareit Equity REIT Index, Standard & Poor’s 500 Stock Index, and the Nareit Equity Apartment Index. The graph assumes that $100 was invested on December 31, 2020, in each of our common stock and the indices presented. Historical stock price performance is not necessarily indicative of future stock price performance. The comparison assumes that all dividends are reinvested.
Period Ending | ||||||||||||
Index | | 12/31/2020 | | 12/31/2021 | | 12/31/2022 | | 12/31/2023 | | 12/31/2024 | | 12/31/2025 |
UDR, Inc. |
| 100.00 |
| 161.12 |
| 107.25 |
| 110.59 |
| 130.81 |
| 115.44 |
FTSE Nareit Equity Apartment Index |
| 100.00 |
| 163.61 |
| 111.34 |
| 117.87 |
| 142.02 |
| 129.86 |
S&P 500 Index |
| 100.00 |
| 128.71 |
| 105.40 |
| 133.10 |
| 166.40 |
| 196.16 |
FTSE Nareit Equity REITs Index |
| 100.00 |
| 143.24 |
| 108.34 |
| 123.21 |
| 133.97 |
| 137.83 |
The performance graph and the related chart and text, are being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 6. [RESERVED]
Not Applicable.
37
Table of Contents
Item 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion should be read in conjunction with the consolidated financial statements appearing elsewhere herein and is based primarily on the consolidated financial statements for the years ended December 31, 2025, and 2024.
This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024 of UDR, Inc. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Business Overview
We are a self-administered real estate investment trust, or REIT, that owns, operates, acquires, renovates, develops, redevelops, disposes of, and manages multifamily apartment communities in targeted markets located in the United States. We were formed in 1972 as a Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland. Our subsidiaries include the Operating Partnership and the DownREIT Partnership. Unless the context otherwise requires, all references in this Report to “we,” “us,” “our,” “the Company,” or “UDR” refer collectively to UDR, Inc., its consolidated subsidiaries and its consolidated joint ventures.
At December 31, 2025, our consolidated real estate portfolio included 165 communities in 12 states plus the District of Columbia totaling 55,240 apartment homes. In addition, we have 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 we hold preferred equity investments. The Same-Store Community apartment home population for the year ended December 31, 2025, was 53,468.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions. A critical accounting policy is one that is both important to our financial condition and results of operations as well as involves some degree of uncertainty. Estimates are prepared based on management’s assessment after considering all evidence available. Changes in estimates could affect our financial position or results of operations. Below is a discussion of the accounting policies that we consider critical to understanding our financial condition or results of operations where there is uncertainty or where significant judgment is required. A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 2, Significant Accounting Policies, to the Notes to the UDR, Inc. Consolidated Financial Statements included in this Report.
Cost Capitalization
In conformity with GAAP, we capitalize those expenditures that materially enhance the value of an existing asset or substantially extend the useful life of an existing asset. Expenditures necessary to maintain an existing property in ordinary operating condition are expensed as incurred.
In addition to construction costs, we capitalize costs directly related to the predevelopment, development, and redevelopment of a capital project, which include, but are not limited to, interest, real estate taxes, insurance, and allocated development and redevelopment overhead related to support costs for personnel working on the capital projects. We use our professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. These costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress and such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. As each home in a capital project is completed and becomes available for lease-up, the Company ceases capitalization on the related portion. The costs capitalized are reported on the Consolidated Balance Sheets as Total real estate owned, net of accumulated depreciation. Amounts capitalized during the years ended December 31, 2025, 2024, and 2023 were $15.4 million, $24.4 million, and $23.2 million, respectively.
38
Table of Contents
Investment in Unconsolidated Entities
We may enter into various joint venture agreements and/or partnerships with unrelated third parties to hold or develop real estate assets. We must determine for each of these ventures whether to consolidate the entity or account for our investment under the equity method of accounting. We determine whether to consolidate a joint venture or partnership based on our rights and obligations under the venture agreement, applying the applicable accounting guidance. The application of the rules in evaluating the accounting treatment for each joint venture or partnership is complex and requires substantial management judgment. We evaluate our accounting for investments on a regular basis including when a significant change in the design of an entity occurs. Throughout our financial statements, and in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we use the term “joint venture” or “partnership” when referring to investments in entities in which we do not have a 100% ownership interest.
We continually evaluate our investments in unconsolidated joint ventures when events or changes in circumstances indicate that there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment is other-than-temporary. These factors include, but are not limited to, age of the venture, our intent and ability to retain our investment in the entity, the financial condition and long-term prospects of the entity, and the relationships with the other joint venture partners and its lenders. The amount of loss recognized is the excess of the investment’s carrying amount over its estimated fair value. If we believe that the decline in fair value is temporary, no impairment is recorded. The aforementioned factors are taken as a whole by management in determining the valuation of our investment property. Should the actual results differ from management’s judgment, the valuation could be negatively affected and may result in a negative impact to our Consolidated Financial Statements.
Impairment of Long-Lived Assets
Quarterly or when changes in circumstances warrant, we will assess our real estate properties for indicators
of impairment. The judgments regarding the existence of impairment indicators are based on certain factors. Such factors include, among other things, operational performance, market conditions, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties.
If a real estate property has indicators of impairment, we assess whether the long-lived asset’s carrying value exceeds the community’s undiscounted future cash flows, which is representative of projected net operating income (“NOI”) plus the residual value of the community. Our future cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and operating conditions and our estimated holding periods. If such indicators of impairment are present and the carrying value exceeds the undiscounted cash flows of the community, an impairment loss is recognized equal to the excess of the carrying amount of the asset over its estimated fair value. Our estimates of fair value represent our best estimate based primarily upon unobservable inputs related to rental rates, operating costs, growth rates, discount rates, capitalization rates, industry trends and reference to market rates and transactions.
For long-lived assets to be disposed of, impairment losses are recognized when the fair value of the asset less estimated cost to sell is less than the carrying value of the asset. Properties classified as real estate held for disposition generally represent properties that are actively marketed or contracted for sale with the closing expected to occur within the next twelve months. Real estate held for disposition is carried at the lower of cost, net of accumulated depreciation, or fair value, less the cost to sell, determined on an asset-by-asset basis. Expenditures for ordinary repair and maintenance costs on held for disposition properties are charged to expense as incurred. Expenditures for improvements, renovations, and replacements related to held for disposition properties are capitalized at cost. Depreciation is not recorded on real estate held for disposition.
Real Estate Investment Properties
We purchase real estate investment properties from time to time and record the fair value to various components, such as land, buildings, and intangibles related to in-place leases, based on the fair value of each component. In making estimates of fair values for purposes of allocating purchase price, we utilize various sources, including independent appraisals, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. The fair value of buildings is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates. As such, the determination of fair value considers the present value of all cash flows expected to be generated from the property including an initial lease-up period. We determine the fair value of in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition. In addition, we consider the cost of acquiring similar leases, the foregone rents
39
Table of Contents
associated with the lease-up period, and the carrying costs associated with the lease-up period. The fair value of in-place leases is recorded and amortized as amortization expense over the remaining average contractual lease period.
REIT Status
We are a Maryland corporation that has elected to be treated for federal income tax purposes as a REIT. A REIT is a legal entity that holds interests in real estate and is required by the Code to meet a number of organizational and operational requirements, including a requirement that a REIT must distribute at least 90% of our REIT taxable income (other than our net capital gain) to our stockholders. If we were to fail to qualify as a REIT in any taxable year, we will be subject to federal and state income taxes at the regular corporate rates and may not be able to qualify as a REIT for four years. Based on the net earnings reported for the year ended December 31, 2025 in our Consolidated Statements of Operations, we would have incurred federal and state GAAP income taxes if we had failed to qualify as a REIT.
40
Table of Contents
Summary of Real Estate Portfolio by Geographic Market
The following table summarizes our market information by major geographic markets as of and for the year ended December 31, 2025:
December 31, 2025 | Year Ended December 31, 2025 | ||||||||||||||||
| | | Percentage | | Total | | Weighted | | Monthly | | Net | ||||||
Number of | Number of | of Total | Carrying | Average | Income per | Operating | |||||||||||
Apartment | Apartment | Carrying | Value (in | Physical | Occupied | Income | |||||||||||
Same-Store Communities | Communities | Homes | Value | thousands) | Occupancy | Home (a) | (in thousands) | ||||||||||
West Region |
| |
| |
| |
| |
| |
| |
| | |||
Orange County, CA |
| 8 |
| 4,305 |
| 8.6 | % | $ | 1,423,008 |
| 96.9 | % | $ | 3,175 | $ | 122,657 | |
San Francisco, CA |
| 13 |
| 3,144 |
| 7.1 | % | 1,169,933 |
| 97.4 | % | 3,651 | 94,139 | ||||
Seattle, WA |
| 14 |
| 2,702 |
| 6.9 | % |
| 1,132,015 |
| 96.9 | % |
| 2,973 |
| 69,416 | |
Los Angeles, CA |
| 4 |
| 1,225 |
| 3.0 | % |
| 495,471 |
| 96.5 | % |
| 3,294 |
| 32,560 | |
Monterey Peninsula, CA |
| 7 |
| 1,567 |
| 1.3 | % |
| 208,608 |
| 96.5 | % |
| 2,388 |
| 32,347 | |
Other Southern California |
| 3 |
| 821 |
| 1.4 | % |
| 230,542 |
| 96.7 | % |
| 2,969 |
| 20,205 | |
Portland, OR |
| 1 |
| 220 |
| 0.2 | % |
| 27,016 |
| 96.8 | % |
| 2,137 |
| 3,956 | |
Northeast Region |
| |
| |
|
| |
| |
| |
| | ||||
Boston, MA |
| 12 |
| 4,667 |
| 12.1 | % |
| 1,989,427 |
| 96.7 | % |
| 3,342 |
| 128,760 | |
New York, NY |
| 4 |
| 1,945 |
| 8.5 | % |
| 1,398,883 |
| 97.9 | % |
| 5,173 |
| 65,640 | |
Philadelphia, PA |
| 4 |
| 1,172 |
| 2.7 | % |
| 447,031 |
| 96.9 | % |
| 2,558 |
| 23,124 | |
Mid-Atlantic Region |
| |
| |
|
| |
| |
| |
| | ||||
Metropolitan D.C. |
| 23 |
| 8,819 |
| 15.4 | % |
| 2,547,357 |
| 97.1 | % |
| 2,479 |
| 174,621 | |
Baltimore, MD |
| 7 |
| 2,219 |
| 3.5 | % |
| 583,229 |
| 96.9 | % |
| 2,018 |
| 34,662 | |
Richmond, VA | 2 | 841 | 0.6 | % | 90,839 | 96.4 | % | 1,833 | 13,515 | ||||||||
Southeast Region |
| |
| |
|
| |
| |
| |
| | ||||
Tampa, FL |
| 11 |
| 3,877 |
| 4.3 | % |
| 714,283 |
| 96.7 | % |
| 2,152 |
| 63,232 | |
Orlando, FL |
| 10 |
| 3,293 |
| 3.5 | % |
| 569,225 |
| 96.6 | % |
| 1,923 |
| 50,791 | |
Nashville, TN |
| 8 |
| 2,261 |
| 1.7 | % |
| 280,493 |
| 96.3 | % |
| 1,742 |
| 32,287 | |
Other Florida |
| 1 |
| 636 |
| 0.6 | % |
| 99,388 |
| 96.4 | % |
| 2,419 |
| 12,311 | |
Southwest Region |
| |
| |
|
| |
| |
| |
| | ||||
Dallas, TX |
| 19 |
| 7,364 |
| 8.0 | % |
| 1,324,994 |
| 97.2 | % |
| 1,773 |
| 95,680 | |
Austin, TX |
| 6 |
| 1,880 |
| 2.0 | % |
| 328,647 |
| 97.2 | % |
| 1,785 |
| 22,389 | |
Denver, CO | 2 | 510 | 1.5 | % | 252,306 | 95.7 | % | 2,840 | 11,885 | ||||||||
Total/Average Same-Store Communities |
| 159 |
| 53,468 |
| 92.9 | % |
| 15,312,695 |
| 96.9 | % | $ | 2,590 |
| 1,104,177 | |
Non-Mature, Commercial Properties & Other |
| 6 |
| 1,772 |
| 6.7 | % |
| 1,102,305 |
| |
| |
| 57,991 | ||
Total Real Estate Held for Investment |
| 165 |
| 55,240 |
| 99.6 | % |
| 16,415,000 |
| |
| |
| 1,162,168 | ||
Real Estate Under Development (b) |
| — |
| — |
| 0.4 | % |
| 72,885 |
| |
| |
| — | ||
Total Real Estate Owned |
| 165 |
| 55,240 |
| 100.0 | % |
| 16,487,885 |
| |
| | $ | 1,162,168 | ||
Total Accumulated Depreciation |
| |
| |
| |
| (7,374,546) |
| |
| |
| | |||
Total Real Estate Owned, Net of Accumulated Depreciation |
| |
| |
| | $ | 9,113,339 |
| |
| |
| | |||
| (a) | Monthly Income per Occupied Home represents total monthly revenues divided by the average physical number of occupied apartment homes in our Same-Store portfolio. |
| (b) | As of December 31, 2025, the Company was developing one wholly-owned community with a total of 300 apartment homes, none of which have been completed. |
We report in two segments: Same-Store Communities and Non-Mature Communities/Other.
Our Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2024 and held as of December 31, 2025. These communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, there is no plan to conduct substantial redevelopment activities, and the communities are not classified as held for disposition at year end. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three consecutive months.
Our Non-Mature Communities/Other segment represents those communities that do not meet the criteria to be included in Same-Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment components of mixed use properties.
41
Table of Contents
Liquidity and Capital Resources
Liquidity is the ability to meet present and future financial obligations either through operating cash flows, sales of properties, borrowings under our credit agreements, and/or the issuance of debt and/or equity securities. Our primary source of liquidity is our cash flow from operations, as determined by rental rates, occupancy levels, and operating expenses related to our portfolio of apartment homes, and borrowings under our credit agreements. We routinely use our working capital credit facility, our unsecured revolving credit facility and issuances of commercial paper to temporarily fund certain investing and financing activities prior to arranging for longer-term financing or the issuance of equity or debt securities. During the past several years, proceeds from the sale of real estate have been used for both investing and financing activities as we continue to execute on maintaining a diversified portfolio.
We expect to meet our short-term liquidity requirements generally through net cash provided by property operations and borrowings under our credit agreements and our unsecured commercial paper program. We expect to meet certain long-term liquidity requirements such as scheduled debt maturities, the repayment of financing on development activities, and potential property acquisitions, through net cash provided by property operations, secured and unsecured borrowings, the issuance of debt or equity securities, and/or the disposition of properties. We believe that our net cash provided by property operations and borrowings under our credit agreements and our unsecured commercial paper program will continue to be adequate to meet both operating requirements and the payment of dividends by the Company in accordance with REIT requirements. Likewise, the budgeted expenditures for improvements and renovations of certain properties are expected to be funded from property operations, borrowings under credit agreements, the issuance of debt or equity securities, and/or dispositions of properties.
We have a shelf registration statement filed with the Securities and Exchange Commission, or “SEC,” which provides for the issuance of common stock, preferred stock, depositary shares, debt securities, guarantees of debt securities, warrants, subscription rights, purchase contracts and units to facilitate future financing activities in the public capital markets. Access to capital markets is dependent on market conditions at the time of issuance.
In July 2021, the Company entered into an ATM sales agreement under which the Company may offer and sell up to 20.0 million shares of its common stock, from time to time, to or through its sales agents and may enter into separate forward sales agreements to or through its forward purchasers. Upon entering into the ATM sales agreement, the Company simultaneously terminated the sales agreement for its prior at-the-market equity offering program, which was entered into in July 2017. During the year ended December 31, 2025 the Company did not sell any shares of common stock through its ATM program. As of December 31, 2025, we had 14.0 million shares of common stock available for future issuance under the ATM program.
In connection with any forward sales agreement under the Company’s ATM program, the relevant forward purchasers will borrow from third parties and, through the relevant sales agent, acting in its role as forward seller, sell a number of shares of the Company’s common stock equal to the number of shares underlying the agreement. The Company does not initially receive any proceeds from any sale of borrowed shares by the forward seller.
During the year ended December 31, 2025, the Company repurchased 3.3 million shares of its common stock at an average price of $36.12 per share for total consideration of approximately $117.8 million under its share repurchase program.
The Company has a $1.3 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $350.0 million unsecured term loan (the “Term Loan”). The credit agreement for these facilities (the “Credit Agreement”) allows the total commitments under the Revolving Credit Facility and the total borrowings under the Term Loan to be increased to an aggregate maximum amount of up to $2.5 billion, subject to certain conditions, including obtaining commitments from one or more lenders. The Revolving Credit Facility has a scheduled maturity date of August 31, 2028, with two six-month extension options, subject to certain conditions. In September 2025, the Company amended the Term Loan to extend the maturity date to January 2029, with two one-year extension options, subject to certain conditions. The Term Loan was previously set to mature on January 31, 2027.
The Company has an unsecured commercial paper program. Under the terms of the program, the Company may issue unsecured commercial paper up to a maximum aggregate amount outstanding of $700.0 million. The notes are sold under customary terms in the United States commercial paper market and rank pari passu with all of the Company’s other unsecured indebtedness. The notes are fully and unconditionally guaranteed by the Operating Partnership. As of December 31, 2025, we had issued $445.0 million of commercial paper, for one month terms, at a weighted average annualized interest rate of 3.95%, leaving $255.0 million of unused capacity.
42
Table of Contents
Future Capital Needs
Future development and redevelopment expenditures may be funded through unsecured or secured credit facilities, unsecured commercial paper, proceeds from the issuance of equity or debt securities, sales of properties, joint ventures, and, to a lesser extent, from cash flows provided by property operations. Acquisition activity in strategic markets may be funded through joint ventures, by the reinvestment of proceeds from the sale of properties, through the issuance of equity or debt securities, the issuance of operating partnership units and the assumption or placement of secured and/or unsecured debt.
During 2026, we have approximately $56.7 million of secured debt maturing, inclusive of principal amortization, and $745.0 million of unsecured debt maturing. We anticipate repaying the debt due in 2026 with cash flow from our operations, proceeds from debt or equity offerings, proceeds from dispositions of properties, or from borrowings under our credit agreements and our unsecured commercial paper program.
The following table summarizes our material cash requirements as of December 31, 2025 (dollars in thousands):
Payments Due by Period | |||||||||||||||
Material Cash Requirements | | 2026 | | 2027-2028 | | 2029-2030 | | Thereafter | | Total | |||||
Long-term debt obligations | $ | 801,672 | $ | 799,846 | $ | 1,796,407 | $ | 2,437,930 | $ | 5,835,855 | |||||
Interest on debt obligations (a) |
| 172,870 |
| 300,735 |
| 174,630 |
| 146,473 |
| 794,708 | |||||
Letters of credit |
| 4,236 |
| 76 |
| — |
| — |
| 4,312 | |||||
Operating lease obligations: |
| |
| |
| |
| |
| | |||||
Ground leases (b) |
| 12,695 |
| 25,390 |
| 25,390 |
| 389,340 |
| 452,815 | |||||
$ | 991,473 | $ | 1,126,047 | $ | 1,996,427 | $ | 2,973,743 | $ | 7,087,690 | ||||||
| (a) | Interest payments on variable rate debt instruments are based on each debt instrument’s respective year-end interest rate at December 31, 2025. |
| (b) | For purposes of our ground lease contracts, the Company uses the minimum lease payment, if stated in the agreement. For ground lease agreements where there is a rent reset provision based on fair market value or changes in the consumer price index but does not include a specified minimum lease payment, the Company uses the current rent over the remainder of the lease term. |
During 2025, we incurred gross interest costs of $205.2 million, of which $8.6 million was capitalized.
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material.
Guarantor Subsidiary Summarized Financial Information
UDR has certain outstanding debt securities that are guaranteed by the Operating Partnership. With respect to this debt, as further outlined below, the Operating Partnership fully and unconditionally guarantees payment of any principal, premium and interest in full to the holders thereof. The Operating Partnership is a subsidiary of UDR, through which UDR conducts a significant portion of its business and holds a substantial amount of its assets. UDR also conducts business through other subsidiaries, including its taxable REIT subsidiaries. In addition to its ownership interest in the Operating Partnership, UDR holds interests in subsidiaries and joint ventures, owns and operates properties, issues securities from time to time and guarantees debt of certain of its subsidiaries. UDR, as the sole general partner of the Operating Partnership, owns 100 percent of the Operating Partnership’s general partnership interests and approximately 95 percent of its limited partnership interests and, by virtue thereof, has the ability to control all of the day-to-day operations of the Operating Partnership. UDR has concluded that it is the primary beneficiary of, and therefore consolidates, the Operating Partnership.
The Operating Partnership is the subsidiary guarantor of certain of our registered debt securities, including the $300 million of medium-term notes due September 2026, $300 million of medium-term notes due July 2027, $300 million of medium-term notes due January 2028, $300 million of medium-term notes due January 2029, $600 million of medium-term notes due January 2030, $600 million of medium-term notes due August 2031, $400 million of medium-
43
Table of Contents
term notes due August 2032, $350 million of medium-term notes due March 2033, $300 million of medium-term notes due in June 2033, $300 million of medium-term notes due September 2034 and $300 million of medium-term notes due November 2034.
The Operating Partnership fully and unconditionally guarantees payment of any principal, premium and interest in full to the holders of the notes described above. The guarantee forms part of the indenture under which the notes were issued. If, for any reason, we do not make any required payment in respect of the notes when due, the Operating Partnership will cause the payment to be made to, or to the order of, the applicable paying agent on behalf of the trustee. Holders of the notes may enforce their rights under the guarantee directly against the Operating Partnership without first making a demand or taking action against UDR or any other person or entity. The Operating Partnership may, without the consent of the holders of the notes, assume all of our rights and obligations under the notes and, upon such assumption, we will be released from our liabilities under the indenture and the notes.
The notes are UDR’s unsecured general obligations and rank equally with all of UDR’s other unsecured and unsubordinated indebtedness outstanding from time to time. As a result, our payment of amounts due on the notes is subordinated to all of our existing and future secured obligations to the extent of the value of the collateral pledged toward any such secured obligation. Our payment of amounts due on the notes also is effectively subordinated to all liabilities, whether secured or unsecured, of any of our non-guarantor subsidiaries because, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to such subsidiaries, we, as an equity holder of such subsidiaries, would not receive distributions from such subsidiaries until claims of any creditors of such subsidiaries are satisfied.
The following tables present the summarized financial information for the Operating Partnership as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024, and 2023. The information presented below excludes eliminations necessary to arrive at the information on a consolidated basis (dollars in thousands):
December 31, | December 31, | |||||
| 2025 | | 2024 | |||
Total real estate, net |
| $ | 2,624,249 |
| $ | 2,562,075 |
Operating lease right-of-use assets |
| 188,343 |
| 187,886 | ||
Other assets |
| 37,548 |
| 47,907 | ||
Total assets |
| $ | 2,850,140 |
| $ | 2,797,868 |
Secured debt, net | $ | 375,820 | $ | 377,724 | ||
Notes payable to UDR (a) | 1,697,552 | 1,429,849 | ||||
Operating lease liabilities | 183,731 | 183,215 | ||||
Other liabilities |
| 146,348 |
| 139,910 | ||
Total liabilities |
| 2,403,451 |
| 2,130,698 | ||
Total capital | $ | 446,689 | $ | 667,170 | ||
Year Ended | |||||||||
December 31, | |||||||||
| 2025 | | 2024 | 2023 | |||||
Total revenue | $ | 614,855 |
| $ | 600,425 | $ | 561,441 | ||
Property operating expenses |
| (263,801) |
| (271,781) |
| (243,842) | |||
Real estate depreciation and amortization |
| (188,172) |
| (187,821) |
| (166,744) | |||
Operating income/(loss) |
| 162,882 |
| 140,823 |
| 150,855 | |||
Interest expense (a) |
| (75,211) |
| (69,933) |
| (55,729) | |||
Other income/(loss) |
| 12,436 |
| 6,595 |
| 6,231 | |||
Net income/(loss) | $ | 100,107 |
| $ | 77,485 |
| $ | 101,357 | |
44
Table of Contents
| (a) | All $1.7 billion and $1.4 billion notes payable to UDR as of December 31, 2025 and 2024, respectively, and $58.0 million, $53.6 million and $47.2 million of interest expense on notes payable to UDR for the years ended December 31, 2025, 2024, and 2023, respectively, eliminate upon consolidation of UDR’s consolidated financial statements. |
Statements of Cash Flows
The following discussion explains the changes in Net cash provided by/(used in) operating activities, Net cash provided by/(used in) investing activities, and Net cash provided by/(used in) financing activities that are presented in our Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024.
Operating Activities
For the year ended December 31, 2025, our Net cash provided by/(used in) operating activities was $902.9 million compared to $876.8 million for 2024. The increase in cash flow from operating activities was primarily due to an increase in net operating income (“NOI”), primarily driven by higher revenue per occupied home and an increase in weighted average physical occupancy and changes in operating assets and liabilities, partially offset by a decrease in operating distributions from our unconsolidated joint ventures and partnerships.
Investing Activities
For the year ended December 31, 2025, Net cash provided by/(used in) investing activities was $(151.0) million compared to $(276.4) million for 2024. The decrease in cash used in investing activities was primarily due to an increase in proceeds from the sales of real estate investments, an increase in distributions received from unconsolidated joint ventures and partnerships, and a decrease in spend for development of real estate assets, partially offset by an increase in acquisitions, an increase in the issuance of notes receivable during the current year compared to the prior year, an increase in investments in unconsolidated joint ventures and partnerships, and an increase in spend for non-real estate capital expenditures.
Acquisitions
In May 2025, the Company acquired the developer’s equity interest in a 478 apartment home operating community located in Philadelphia, Pennsylvania. The Company previously had three loans with the joint venture including a senior loan. In connection with the acquisition, the developer paid the Company $6.7 million, which consisted primarily of unpaid interest on the senior loan and reimbursement for certain costs previously advanced by the Company. (See Note 2, Significant Accounting Policies for more information). The Company increased its real estate assets owned by approximately $166.0 million, recorded approximately $10.1 million of real estate intangibles, recorded $6.4 million of in-place lease intangibles, and recognized a gain on consolidation of $0.3 million.
In November 2025, the Company acquired a 406 apartment home operating community located in Woodbridge, Virginia for approximately $147.7 million. The Company increased its real estate assets owned by approximately $144.4 million and recorded $3.3 million of in-place lease intangibles.
In January 2024, the Company acquired its joint venture partner’s common equity interest in a 173 apartment home operating community located in Oakland, California for $1.4 million. The community was previously owned by a consolidated joint venture of the Company. (See Note 5, Joint Ventures and Partnerships for more information).
Dispositions
In January 2025, the Company sold an operating community located in Brooklyn, New York with a total of 188 apartment homes for gross proceeds of $127.5 million, resulting in a gain of approximately $23.5 million. This operating community was classified as held for disposition as of December 31, 2024.
In January 2025, the Company sold an operating community located in Englewood, New Jersey with a total of 185 apartment homes for gross proceeds of $84.0 million, resulting in a gain of approximately $24.4 million. This operating community was classified as held for disposition as of December 31, 2024.
In December 2025, the Company contributed four wholly-owned operating communities, totaling 974 apartment homes located in various markets, to our existing joint venture with LaSalle, while maintaining our 51%
45
Table of Contents
ownership interest in the venture. The contribution resulted in the Company no longer retaining a controlling interest in the communities, and the Company deconsolidated the operating communities. In connection with the contribution, our joint venture partner contributed cash and new debt was placed on the newly contributed operating communities and certain existing operating communities, resulting in the Company receiving approximately $202.8 million of cash proceeds. The transaction was accounted for as a partial sale and resulted in a gain of approximately $195.0 million, which was recorded in Gain/(loss) on sale of real estate owned on the Consolidated Statement of Operations, which consisted of the gain on the partial sale and the initial measurement of our retained interest at fair value. (See Note 5, Joint Ventures and Partnerships for further discussion).
In February 2024, the Company sold an operating community located in Arlington, Virginia with a total of 214 apartment homes for gross proceeds of $100.0 million, resulting in a gain of approximately $16.9 million. This operating community was classified as held for disposition as of December 31, 2023.
We plan to continue to pursue our strategy of exiting markets where long-term growth prospects are limited and redeploying capital to primary locations in markets we believe will provide the best investment returns.
Capital Expenditures
We capitalize those expenditures that materially enhance the value of an existing asset or substantially extend the useful life of an existing asset. Expenditures necessary to maintain an existing property in ordinary operating condition are expensed as incurred.
For the year ended December 31, 2025, total capital expenditures of $255.1 million or $4,622 per stabilized home, which in aggregate include recurring capital expenditures and major renovations, were spent across our portfolio, excluding development, as compared to $246.5 million or $4,458 per stabilized home for the prior year.
The increase in total capital expenditures was primarily due to:
| ● | an increase of 7.4%, or $7.3 million, in recurring capital expenditures, which includes asset preservation and turnover-related expenditures; |
| ● | an increase of 126.6%, or $4.7 million, in operations platform, which includes smart home installations in certain of our properties; and |
46
Table of Contents
| ● | an increase of 9.0%, or $4.7 million, in major renovations, which includes major structural changes and/or architectural revisions to existing buildings. |
This was partially offset by:
| ● | a decrease of 8.7%, or $8.0 million, in NOI enhancing improvements, such as kitchen and bath remodels and upgrades to common areas. |
The following table outlines capital expenditures and repair and maintenance costs for all of our communities, excluding real estate under development, for the years ended December 31, 2025 and 2024 (dollars in thousands except Per Home amounts):
Per Home |
| ||||||||||||||||
Year Ended December 31, | Year Ended December 31, |
| |||||||||||||||
| 2025 | | 2024 | | % Change | | 2025 | | 2024 | | % Change |
| |||||
Turnover capital expenditures | $ | 17,612 | $ | 19,230 |
| (8.4) | % | $ | 319 | $ | 348 |
| (8.3) | % | |||
Asset preservation expenditures |
| 88,362 |
| 79,456 |
| 11.2 | % |
| 1,601 |
| 1,437 |
| 11.4 | % | |||
Total recurring capital expenditures |
| 105,974 |
| 98,686 |
| 7.4 | % |
| 1,920 |
| 1,785 |
| 7.6 | % | |||
NOI enhancing improvements (a) |
| 84,646 |
| 92,668 |
| (8.7) | % |
| 1,533 |
| 1,676 |
| (8.5) | % | |||
Major renovations (b) |
| 56,094 |
| 51,441 |
| 9.0 | % |
| 1,016 |
| 930 |
| 9.2 | % | |||
Operations platform | 8,418 | 3,715 | 126.6 | % | 153 | 67 | 128.4 | % | |||||||||
Total capital expenditures (c) | $ | 255,132 | $ | 246,510 |
| 3.5 | % | $ | 4,622 | $ | 4,458 |
| 3.7 | % | |||
Repair and maintenance expense | $ | 102,649 | $ | 101,223 |
| 1.4 | % | $ | 1,860 | $ | 1,830 |
| 1.6 | % | |||
Average home count (d) |
| 55,200 |
| 55,301 |
| (0.2) | % | ||||||||||
| (a) | NOI enhancing improvements are expenditures that we believe will result in increased income generation or decreased expense growth. |
| (b) | Major renovations include major structural changes and/or architectural revisions to existing buildings. |
| (c) | Total capital expenditures includes amounts capitalized during the year. Cash paid for capital expenditures is impacted by the net change in related accruals. |
| (d) | Average number of homes is calculated based on the number of homes outstanding at the end of each month. |
We intend to continue to selectively add NOI enhancing improvements, which we believe will provide a return on investment in excess of our cost of capital. Our objective in redeveloping a community is twofold: we aim to meaningfully grow rental rates while also achieving cap rate compression through asset quality improvement.
Consolidated Real Estate Under Development and Redevelopment
At December 31, 2025, our development pipeline consisted of one wholly-owned community totaling 300 apartment homes, none of which have been completed, with a budget of $133.6 million, in which we have a gross carrying value of $72.9 million. The homes are estimated to be completed during the second quarter of 2027. In addition, the Company is incurring and capitalizing costs directly related to predevelopment activities in preparation of future development commencements.
At December 31, 2025, the Company had no communities at which it was conducting substantial redevelopment activities.
Unconsolidated Joint Ventures and Partnerships
The Company recognizes income or losses from our investments in unconsolidated joint ventures and partnerships consisting of our proportionate share of the net income or losses of the joint ventures and partnerships. In addition, we may earn fees for providing management services to the communities held by the unconsolidated joint ventures and partnerships.
The Company’s Investment in and advances to unconsolidated joint ventures and partnerships, net, are accounted for under the equity method of accounting. For the year ended December 31, 2025:
| ● | we made investments totaling $83.0 million in our unconsolidated joint ventures and partnerships; |
47
Table of Contents
| ● | our proportionate share of the net income/(loss) of the joint ventures and partnerships was $28.4 million; and |
| ● | we received cash distributions of $204.2 million, of which $53.9 million were operating cash flows and $150.3 million were investing cash flows. |
We evaluate our investments in unconsolidated joint ventures and partnerships when events or changes in circumstances indicate that there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment is other-than-temporary. The Company did not incur any other-than-temporary impairments in the value of its investments in unconsolidated joint ventures during the year ended December 31, 2025. For the year ended December 31, 2024, the Company recorded an $8.1 million non-cash impairment loss on one of its preferred equity investment (recorded in Income/(loss) from unconsolidated entities on the Consolidated Statements of Operations) due to a decrease in the value of the operating community that it deemed to be other-than-temporary.
Financing Activities
For the years ended December 31, 2025 and 2024, Net cash provided by/(used in) financing activities was $(750.4) million and $(599.9) million, respectively.
The following significant financing activities occurred during the year ended December 31, 2025:
| ● | repaid $178.3 million of secured debt; |
| ● | received net proceeds of $155.1 million on our unsecured commercial paper program; |
| ● | received net proceeds of $17.0 million on our revolving bank debt; |
| ● | repurchased 3.3 million common shares for approximately $117.8 million; |
| ● | paid $39.7 million of distributions to redeemable noncontrolling interests; and |
| ● | paid $567.9 million of distributions to our common stockholders. |
The following significant financing activities occurred during the year ended December 31, 2024:
| ● | issued $300.0 million of 5.125% senior unsecured medium-term notes due September 2034, for net proceeds of $296.9 million; |
| ● | repaid $138.0 million of secured debt; |
| ● | repaid $15.6 million of unsecured debt; |
| ● | repaid $118.2 million, net on our unsecured commercial paper program; |
| ● | paid $42.8 million of distributions to redeemable noncontrolling interests; and |
| ● | paid $558.5 million of distributions to our common stockholders. |
Credit Facilities and Commercial Paper Program
The Company has a $1.3 billion unsecured revolving credit facility (the “Revolving Credit Facility”) and a $350.0 million unsecured term loan (the “Term Loan”). The credit agreement for these facilities (the “Credit Agreement”) allows the total commitments under the Revolving Credit Facility and the total borrowings under the Term Loan to be increased to an aggregate maximum amount of up to $2.5 billion, subject to certain conditions, including obtaining commitments from one or more lenders. The Revolving Credit Facility has a scheduled maturity date of August 31, 2028, with two six-month extension options, subject to certain conditions. In September 2025, the Company amended the Term Loan to extend the maturity date to January 2029, with two one-year extension options, subject to certain conditions. The Term Loan was previously set to mature on January 31, 2027.
Based on the Company’s current credit rating, the Revolving Credit Facility has an interest rate equal to SOFR plus a margin of 77.5 basis points and a facility fee of 15 basis points, and the Term Loan has an interest rate equal to SOFR plus a margin of 85.0 basis points. Depending on the Company’s credit rating, the margin under the Revolving
48
Table of Contents
Credit Facility ranges from 70 to 140 basis points, the facility fee ranges from 10 to 30 basis points, and the margin under the Term Loan ranges from 75 to 160 basis points. In addition, the Credit Agreement allows for the Company in consultation with the sustainability structuring agent to propose key performance indicators with respect to certain environmental, social, and governance goals of the Company, and thresholds or targets with respect thereto, and a related amendment to the Credit Agreement, that if entered into may allow a change in the applicable margin for the Term Loan of up to five basis points.
As of December 31, 2025, we had no outstanding borrowings under the Revolving Credit Facility, leaving $1.3 billion of unused capacity (excluding $4.3 million of letters of credit at December 31, 2025), and $350.0 million of outstanding borrowings under the Term Loan.
The Company has a working capital credit facility, which provides for a $75.0 million unsecured revolving credit facility (the “Working Capital Credit Facility”) with a scheduled maturity date of January 12, 2027. In December 2025, the Company extended the maturity date from January 12, 2026 to January 12, 2027, with two one-year extension options. Based on the Company’s current credit rating, the Working Capital Credit Facility has an interest rate equal to SOFR plus a margin of 77.5 basis points. Depending on the Company’s credit rating, the margin ranges from 70 to 140 basis points.
As of December 31, 2025, we had $26.4 million of outstanding borrowings under the Working Capital Credit Facility, leaving $48.6 million of unused capacity.
The bank revolving credit facilities and the term loan are subject to customary financial covenants and limitations, all of which we were in compliance with at December 31, 2025.
The Company has an unsecured commercial paper program. Under the terms of the program, the Company may issue unsecured commercial paper up to a maximum aggregate amount outstanding of $700.0 million. The notes are sold under customary terms in the United States commercial paper market and rank pari passu with all of the Company’s other unsecured indebtedness. The notes are fully and unconditionally guaranteed by the Operating Partnership. As of December 31, 2025, we had issued $445.0 million of commercial paper, for one month terms, at a weighted average annualized rate of 3.9%, leaving $255.0 million of unused capacity.
Interest Rate Risk
We are exposed to interest rate risk associated with variable rate notes payable and maturing debt that has to be refinanced. We do not hold financial instruments for trading or other speculative purposes, but rather issue these financial instruments to finance our portfolio of real estate assets and operations. Interest rate sensitivity is the relationship between changes in market interest rates and the fair value of market rate sensitive assets and liabilities. Our earnings are affected as changes in short-term interest rates impact our cost of variable rate debt and maturing fixed rate debt. We had $673.4 million in variable rate debt that is not subject to interest rate swap contracts as of December 31, 2025. If market interest rates for variable rate debt increased by 100 basis points, our interest expense would increase by $6.3 million based on the average balance outstanding during the year.
These amounts are determined by considering the impact of hypothetical interest rates on our borrowing cost. This analysis does not consider the effects of the adjusted level of overall economic activity that could exist in such an environment or actions we may take to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no change in our financial structure.
The Company also utilizes derivative financial instruments to manage interest rate risk and generally designates these financial instruments as cash flow hedges. See Note 14, Derivatives and Hedging Activities, in the Notes to the UDR Consolidated Financial Statements included in this Report for additional discussion of derivative instruments.
A presentation of cash flow metrics based on GAAP is as follows (dollars in thousands):
Year Ended December 31, | ||||||
2025 | | 2024 | ||||
Net cash provided by/(used in) operating activities | | $ | 902,887 | | $ | 876,848 |
Net cash provided by/(used in) investing activities |
| (150,990) |
|
| (276,351) | |
Net cash provided by/(used in) financing activities |
| (750,392) |
|
| (599,936) | |
49
Table of Contents
Results of Operations
The following discussion explains the changes in results of operations that are presented in our Consolidated Statements of Operations for the years ended December 31, 2025 and 2024.
Net Income/(Loss) Attributable to Common Stockholders
Net income/(loss) attributable to common stockholders was $372.9 million ($1.13 per diluted share) for the year ended December 31, 2025, as compared to $84.8 million ($0.26 per diluted share) for the prior year. The increase resulted primarily from the following items, all of which are discussed in further detail elsewhere within this Report:
| ● | gains of $242.9 million recognized from the partial sale of four operating communities located in various markets and the sale of two operating communities located in Brooklyn, New York and Englewood, New Jersey, during year ended December 31, 2025, as compared to a gain on the sale of real estate of $16.9 million recognized from the sale of an operating community located in Arlington, Virginia during the year ended December 31, 2024; |
| ● | an increase in interest income and other income/(expense), net of $31.5 million primarily due to no non-cash loan reserve in 2025 as compared to a recorded $37.3 million non-cash loan reserve related to one of the Company’s joint venture loan investments during the year end December 31, 2024, which was due to the Company’s assessment of the borrower’s ability to make future scheduled payments on the senior loan and a decrease in the value of the operating community, partially offset by a $6.6 million decrease in interest income from our notes receivables primarily due to lower notes receivable balances during the year ended December 31, 2025, as compared the same period in 2024; |
| ● | an increase in total property NOI of $23.3 million primarily due to higher revenue per occupied home, an increase in weighted average physical occupancy and NOI from additional operating communities, partially offset by an increase in property operating expenses and a decrease in NOI from communities sold during 2024 and 2025; |
| ● | a decrease in real estate depreciation expense of $21.9 million primarily due to assets that became fully depreciated and assets sold in 2024 and 2025, partially offset by two acquired communities in 2025 and development communities completed in 2024; and |
| ● | an increase in income/(loss) from unconsolidated entities of $8.2 million primarily due to no non-cash impairment losses during the year ended December 31, 2025, as compared to an $8.1 million non-cash impairment loss on one of the Company’s preferred equity investments during the same period in 2024. |
This was partially offset by:
| ● | an increase in net income attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership of $19.7 million primarily attributed to the noncontrolling interests’ share of the gain from the partial sale of four operating communities located in various markets and the sale of two operating communities located in Brooklyn, New York and Englewood, New Jersey during the year ended December 31, 2025, as compared to the sale of one operating community located in Arlington, Virginia in the same period of 2024; and |
| ● | an increase in other depreciation and amortization of $6.5 million primarily due to software transition related costs incurred during the year ended December 31, 2025, as compared to no software transition related costs during the year ended December 31, 2024. |
Apartment Community Operations
Our net income results are primarily from NOI generated from the operation of our apartment communities. The Company defines NOI, which is a non-GAAP financial measure, as rental income less direct property rental expenses. Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative and
50
Table of Contents
marketing. Excluded from NOI is property management expense, which is calculated as 3.25% of property revenue, and land rent. Property management expense covers costs directly related to consolidated property operations, inclusive of corporate management, regional supervision, accounting and other costs.
Management considers NOI a useful metric for investors as it is a more meaningful representation of a community’s continuing operating performance than net income as it is prior to corporate-level expense allocations, general and administrative costs, capital structure and depreciation and amortization.
Although the Company considers NOI a useful measure of operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities as determined in accordance with GAAP. NOI excludes several income and expense categories as detailed in the reconciliation of NOI to Net income/(loss) attributable to UDR, Inc. below.
The following table summarizes the operating performance of our total property NOI for each of the periods presented (dollars in thousands):
Year Ended | |||||||||
December 31, (a) | |||||||||
| 2025 | | 2024 | | % Change | ||||
Same-Store Communities: | | ||||||||
Same-Store rental income | $ | 1,610,705 | | $ | 1,573,529 | 2.4 | % | ||
Same-Store operating expense (b) |
| (506,528) | |
| (493,669) | 2.6 | % | ||
Same-Store NOI |
| 1,104,177 | |
| 1,079,860 | 2.3 | % | ||
Non-Mature Communities/Other NOI: | | ||||||||
Stabilized, non-mature communities NOI (c) | 22,578 | 8,674 | NM | * | |||||
Acquired communities NOI |
| 1,061 | |
| — | N/A | |||
Non-residential/other NOI (d) | 18,256 | 21,062 | (13.3) | % | |||||
Sold and held for disposition communities NOI | 16,096 | 29,227 | (44.9) | % | |||||
Total Non-Mature Communities/Other NOI |
| 57,991 | |
| 58,963 | (1.6) | % | ||
Total property NOI | $ | 1,162,168 | | $ | 1,138,823 | 2.0 | % | ||
* | Not meaningful |
| (a) | Same-Store consists of 53,468 apartment homes. |
| (b) | Excludes depreciation, amortization, and property management expenses. |
| (c) | Represents non-mature communities that have achieved 90% occupancy for three consecutive months but do not meet the criteria to be included in Same-Store Communities. |
| (d) | Primarily non-residential retail revenue and expense. |
51
Table of Contents
The following table is our reconciliation of Net income/(loss) attributable to UDR, Inc. to total property NOI for each of the periods presented (dollars in thousands):
December 31, | |||||||
| 2025 | | 2024 | | |||
Net income/(loss) attributable to UDR, Inc. | $ | 377,704 | $ | 89,585 | |||
Joint venture management and other fees |
| (11,361) |
| (8,317) | |||
Property management |
| 55,281 |
| 54,065 | |||
Other operating expenses |
| 30,734 |
| 30,416 | |||
Real estate depreciation and amortization |
| 654,121 |
| 676,068 | |||
General and administrative |
| 85,104 |
| 84,305 | |||
Casualty-related charges/(recoveries), net |
| 11,682 |
| 15,179 | |||
Other depreciation and amortization |
| 25,914 |
| 19,405 | |||
(Gain)/loss on sale of real estate owned | (242,913) | (16,867) | |||||
(Income)/loss from unconsolidated entities |
| (28,388) |
| (20,235) | |||
Interest expense |
| 196,619 |
| 195,712 | |||
Interest income and other (income)/expense, net |
| (19,175) |
| 12,336 | |||
Tax provision/(benefit), net |
| 835 |
| 879 | |||
Net income/(loss) attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| 25,965 |
| 6,246 | |||
Net income/(loss) attributable to noncontrolling interests |
| 46 |
| 46 | |||
Total property NOI | $ | 1,162,168 | $ | 1,138,823 | |||
Same-Store Communities
Our Same-Store Community properties (those acquired, developed, and stabilized prior to January 1, 2024 and held on December 31, 2025) consisted of 53,468 apartment homes and provided 95.0% of our total NOI for the year ended December 31, 2025.
NOI for our Same-Store Community properties increased 2.3%, or $24.3 million, for the year ended December 31, 2025 compared to the same period in 2024. The increase in property NOI was attributable to a 2.4%, or $37.2 million, increase in property rental income, which was partially offset by a 2.6%, or $12.9 million, increase in operating expenses. The increase in property rental income was primarily driven by a 1.0%, or $15.2 million, increase in rental rates, an 8.9%, or $16.4 million, increase in reimbursement and ancillary and fee income, a 19.4%, or $3.0 million, decrease in bad debt and a 6.1%, or $2.9 million, decrease in vacancy loss. Weighted average physical occupancy increased by 0.2% to 96.9% and total monthly income per occupied home increased 2.1% to $2,590.
The increase in operating expenses was primarily driven by a 5.3%, or $3.7 million, increase in utilities, primarily due to an increase in energy costs, a 9.7%, or $3.4 million, increase in administration and marketing primarily due to the cost of providing property-wide Wi-Fi, a 4.7%, or $3.3 million, increase in personnel costs primarily due to annual merit increases and severance costs, and a 1.8%, or $3.4 million, increase in real estate taxes due to higher assessed valuations, partially offset by a 10.7%, or $2.6 million, decrease in insurance expense primarily due to a decrease in the impact from insurance related claims.
The operating margin (property net operating income divided by property rental income) was 68.6% and 68.6% for the years ended December 31, 2025 and 2024, respectively.
Non-Mature Communities/Other
UDR’s Non-Mature Communities/Other represent those communities that do not meet the criteria to be included in Same-Store Communities, which include communities recently developed or acquired, redevelopment properties, sold or held for disposition properties, and non-apartment components of mixed use properties.
The remaining 5.0%, or $58.0 million, of our total NOI during the year ended December 31, 2025 was generated from our Non-Mature Communities/Other. NOI from Non-Mature Communities/Other decreased by 1.6%, or $1.0 million, for the year ended December 31, 2025 as compared to the same period in 2024. The decrease was primarily attributable to a $13.1 million decrease in sold and held for disposition communities NOI due to the sale of two operating communities and the partial sale of four operating communities during the year ended December 31, 2025, and a $2.8 million decrease in non-residential/other NOI primarily due to lower retail tenant rents, partially offset by a $13.9
52
Table of Contents
million increase in NOI from stabilized, non-mature communities, primarily due to completed development communities and an acquired community becoming stabilized.
Gain/(Loss) on Sale of Real Estate Owned
During the year ended December 31, 2025, the Company recognized a gain of $242.9 million from the partial sale of four operating communities located in various markets and the sale of two operating communities located in Brooklyn, New York and Englewood, New Jersey.
During the year ended December 31, 2024, the Company recognized a gain of $16.9 million from the sale of one operating community located in Arlington, Virginia.
Interest income and other income/(expense)
For the years ended December 31, 2025 and 2024, the Company recognized interest income and other income/(expense), net of $19.2 million and $(12.3) million, respectively. The increase of $31.5 million was primarily due to no non-cash loan reserve in 2025 as compared to a recorded $37.3 million non-cash loan reserve related to one of the Company’s joint venture loan investments during the year end December 31, 2024, which was due to the Company’s assessment of the borrower’s ability to make future scheduled payments on the senior loan and a decrease in the value of the operating community, partially offset by a $6.6 million decrease in interest income from our notes receivables primarily due to lower notes receivable balances during the year ended December 31, 2025, as compared the same period in 2024.
Real estate depreciation and amortization
For the years ended December 31, 2025 and 2024, the Company recognized real estate depreciation and amortization of $654.1 million and $676.1 million, respectively. The decrease of $21.9 million was primarily due to assets that became fully depreciated and assets sold in 2024 and 2025, partially offset by two acquired communities in 2025 and development communities completed in 2024.
Income/(Loss) from Unconsolidated Entities
During the years ended December 31, 2025 and 2024, the Company recognized income/(loss) from unconsolidated entities of $28.4 million and $20.2 million, respectively. The increase of $8.2 million was primarily due to no non-cash impairment losses during the year ended December 31, 2025, as compared to an $8.1 million non-cash impairment loss on one of the Company’s preferred equity investments during the same period in 2024.
Noncontrolling Interest
For the years ended December 31, 2025 and 2024, the Company recognized net income attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership of $26.0 million and $6.2 million, respectively. The increase in 2025 as compared to 2024 was primarily attributed to the noncontrolling interests’ share of the gain from the partial sale of four operating communities located in various markets and the sale of two operating communities located in Brooklyn, New York and Englewood, New Jersey during the year ended December 31, 2025, as compared to the sale of one operating community located in Arlington, Virginia in the same period of 2024.
Other depreciation and amortization
For the years ended December 31, 2025 and 2024, the Company recognized other depreciation and amortization of $25.9 million and $19.4 million, respectively. The increase of $6.5 million was primarily attributable to software transition related costs incurred during the year ended December 31, 2025, as compared to no software transition related costs during the year ended December 31, 2024.
Inflation
Inflation primarily impacts our results of operations as a result of wage pressures and increases in utilities and repair and maintenance costs. In addition, inflation could also impact our general and administrative expenses, the interest on our debt if variable or refinanced in a high-inflationary environment, our cost of capital, and our cost of development, redevelopment, maintenance or other operating activities. However, the majority of our apartment leases have initial terms of 12 months or less, which in an inflationary environment, and absent other factors such as increased
53
Table of Contents
supply, generally enables us to compensate for inflationary effects by increasing rents on our apartment homes. Although an extreme or sustained escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe this had a material impact on our results for the year ended December 31, 2025.
Funds from Operations, Funds from Operations as Adjusted, and Adjusted Funds from Operations
Funds from Operations
Funds from operations (“FFO”) attributable to common stockholders and unitholders is defined as Net income/(loss) attributable to common stockholders (computed in accordance with GAAP), excluding impairment write-downs of depreciable real estate related to the main business of the Company or of investments in non-consolidated investees that are directly attributable to decreases in the fair value of depreciable real estate held by the investee, gains and losses from sales of depreciable real estate related to the main business of the Company and income taxes directly associated with those gains and losses, plus real estate depreciation and amortization, and after adjustments for noncontrolling interests, and the Company’s share of unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust’s (“Nareit”) definition issued in April 2002 and restated in November 2018. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, Nareit created FFO as a supplemental measure of a REIT’s operating performance. In the computation of diluted FFO, if OP Units, DownREIT Units, unvested restricted stock, unvested LTIP Units, stock options, and the shares of Series E Cumulative Convertible Preferred Stock are dilutive, they are included in the diluted share count.
Management considers FFO a useful metric for investors as the Company uses FFO in evaluating property acquisitions and its operating performance, and believes that FFO should be considered along with, but not as an alternative to, net income and cash flow as a measure of the Company’s activities in accordance with GAAP. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of funds available to fund our cash needs.
Funds from Operations as Adjusted
FFO as Adjusted (“FFOA”) attributable to common stockholders and unitholders is defined as FFO excluding the impact of non-comparable items including, but not limited to, acquisition-related costs, prepayment costs/benefits associated with early debt retirement, impairment write-downs or gains and losses on sales of real estate or other assets incidental to the main business of the Company and income taxes directly associated with those gains and losses, casualty-related expenses and recoveries, severance costs, software transition related costs and legal and other costs.
Management believes that FFOA is useful supplemental information regarding our operating performance as it provides a consistent comparison of our operating performance across time periods and enables investors to more easily compare our operating results with other REITs. FFOA is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance. We believe that Net income/(loss) attributable to common stockholders is the most directly comparable GAAP financial measure to FFOA. However, other REITs may use different methodologies for calculating FFOA or similar FFO measures and, accordingly, our FFOA may not always be comparable to FFOA or similar FFO measures calculated by other REITs. FFOA should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity.
Adjusted Funds from Operations
Adjusted FFO (“AFFO”) attributable to common stockholders and unitholders is defined as FFOA less recurring capital expenditures on consolidated communities and the Company’s proportionate share of recurring capital expenditures on unconsolidated partnerships and joint ventures, that are necessary to help preserve the value of and maintain functionality at our communities. Therefore, management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company’s operational performance than FFO or FFOA.
AFFO is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance. We believe that Net income/(loss) attributable to common
54
Table of Contents
stockholders is the most directly comparable GAAP financial measure to AFFO. Management believes that AFFO is a widely recognized measure of the operations of REITs, and presenting AFFO enables investors to assess our performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not always be comparable to AFFO calculated by other REITs. AFFO should not be considered as an alternative to net income/(loss) (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.
The following table outlines our reconciliation of Net income/(loss) attributable to common stockholders to FFO, FFOA, and AFFO for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):
Year Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Net income/(loss) attributable to common stockholders | $ | 372,865 | $ | 84,750 | $ | 439,505 | |||
Real estate depreciation and amortization |
| 654,121 |
| 676,068 |
| 676,419 | |||
Noncontrolling interests |
| 26,011 |
| 6,292 |
| 30,135 | |||
Real estate depreciation and amortization on unconsolidated joint ventures |
| 51,829 |
| 53,727 |
| 42,622 | |||
Impairment loss from unconsolidated joint ventures | — | 8,083 | — | ||||||
Net (gain)/loss on consolidation | (286) | — | 24,257 | ||||||
Net gain on the sale of depreciable real estate owned, net of tax |
| (242,913) |
| (16,867) |
| (349,993) | |||
FFO attributable to common stockholders and unitholders, basic | $ | 861,627 | $ | 812,053 | $ | 862,945 | |||
Distributions to preferred stockholders — Series E (Convertible) |
| 4,839 |
| 4,835 |
| 4,848 | |||
FFO attributable to common stockholders and unitholders, diluted | $ | 866,466 | $ | 816,888 | $ | 867,793 | |||
Income/(loss) per weighted average common share, diluted | $ | 1.13 | $ | 0.26 | $ | 1.34 | |||
FFO per weighted average common share and unit, basic | $ | 2.44 | $ | 2.30 | $ | 2.46 | |||
FFO per weighted average common share and unit, diluted | $ | 2.43 | $ | 2.29 | $ | 2.45 | |||
Weighted average number of common shares and OP/DownREIT Units outstanding — basic |
| 353,139 |
| 353,283 |
| 351,175 | |||
Weighted average number of common shares, OP/DownREIT Units, and common stock equivalents outstanding — diluted |
| 356,686 |
| 356,957 |
| 354,422 | |||
Impact of adjustments to FFO: |
|
|
| ||||||
Variable upside participation on preferred equity investment, net | $ | — | $ | — | $ | (204) | |||
Legal and other costs |
| 13,479 |
| 13,315 |
| 2,869 | |||
Realized and unrealized (gain)/loss on real estate technology investments, net of tax | (4,040) | (8,019) | (3,051) | ||||||
Severance costs |
| 9,514 |
| 10,556 |
| 4,164 | |||
Provision for loan loss | — | 37,271 | — | ||||||
Software transition related costs | 9,263 | — | — | ||||||
Casualty-related charges/(recoveries) |
| 11,682 |
| 15,179 |
| 3,138 | |||
Total impact of adjustments to FFO | $ | 39,898 | $ | 68,302 | $ | 6,916 | |||
FFOA attributable to common stockholders and unitholders, diluted | $ | 906,364 | $ | 885,190 | $ | 874,709 | |||
FFOA per weighted average common share and unit, diluted | $ | 2.54 | $ | 2.48 | $ | 2.47 | |||
Recurring capital expenditures, inclusive of unconsolidated joint ventures |
| (113,756) |
| (105,116) |
| (90,917) | |||
AFFO attributable to common stockholders and unitholders, diluted | $ | 792,608 | $ | 780,074 | $ | 783,792 | |||
AFFO per weighted average common share and unit, diluted | $ | 2.22 | $ | 2.19 | $ | 2.21 | |||
55
Table of Contents
The following table is our reconciliation of FFO share information to weighted average common shares outstanding, basic and diluted, reflected on the UDR Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023 (shares in thousands):
Year Ended December 31, | ||||||
| 2025 | | 2024 | | 2023 | |
Weighted average number of common shares and OP/DownREIT Units outstanding — basic |
| 353,139 |
| 353,283 |
| 351,175 |
Weighted average number of OP/DownREIT Units outstanding |
| (22,817) |
| (23,993) |
| (22,410) |
Weighted average number of common shares outstanding — basic per the Consolidated Statements of Operations |
| 330,322 |
| 329,290 |
| 328,765 |
Weighted average number of common shares, OP/DownREIT Units, and common stock equivalents outstanding — diluted |
| 356,686 |
| 356,957 |
| 354,422 |
Weighted average number of OP/DownREIT Units outstanding |
| (22,817) |
| (23,993) |
| (22,410) |
Weighted average number of Series E Cumulative Convertible Preferred shares outstanding |
| (2,816) |
| (2,848) |
| (2,908) |
Weighted average number of common shares outstanding — diluted per the Consolidated Statements of Operations |
| 331,053 |
| 330,116 |
| 329,104 |
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this item is included in and incorporated by reference from Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Report.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and related financial information required to be filed are attached to this Report. Reference is made to page F-1 of this Report for the Index to Consolidated Financial Statements and Schedule of UDR, Inc.
Report of independent registered public accounting firm (PCAOB 000
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The disclosure controls and procedures of the Company are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and disclosed within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. As a result, our disclosure controls and procedures are designed to provide reasonable assurance that such disclosure controls and procedures will meet their objectives.
As of December 31, 2025, we carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of the Company of the effectiveness of the design and operation of
56
Table of Contents
the disclosure controls and procedures of the Company. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer of the Company concluded that the disclosure controls and procedures of the Company are effective at the reasonable assurance level described above.
Management’s Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934 for the Company. Under the supervision and with the participation of the management, the Chief Executive Officer and Chief Financial Officer of the Company conducted an assessment of the effectiveness of the internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations (2013 Framework) (COSO). Based on such evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.
Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Report, has audited UDR, Inc.’s internal control over financial reporting as of December 31, 2025. The report of Ernst & Young LLP, which expresses an unqualified opinion on UDR, Inc.’s internal control over financial reporting as of December 31, 2025, is included under the heading “Report of Independent Registered Public Accounting Firm” of UDR, Inc. contained in this Report.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fourth fiscal quarter to which this Report relates that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company.
Item 9B. OTHER INFORMATION
During the three months ended December 31, 2025, no director or officer of the Company
Approval and Adoption of UDR, Inc. Executive Severance Plan
On February 12, 2026, the Compensation and Management Development Committee (the “Compensation Committee”) of UDR, Inc. (the “Company”), approved and adopted the UDR, Inc. Executive Severance Plan (the “Severance Plan”) for executive officers of the Company selected by the Compensation Committee, including David Bragg, the Company’s Senior Vice President – Chief Financial Officer and Michael Lacy, the Company’s Senior Vice President – Chief Operating Officer. The Severance Plan is effective as of February 12, 2026. The Severance Plan is intended to benefit certain specified executives who are not parties to an employment agreement. The Company believes that the Severance Plan provides appropriate incentives and protections to these executive officers and, because the severance benefits are agreed to in advance, avoids the need for protracted negotiations in the event of termination of employment. The Severance Plan also includes certain restrictive covenants applicable to the executive officers that are intended to protect the Company and its shareholders.
The Severance Plan provides for payment of severance and other benefits to eligible executives in the event of a termination of employment with the Company without cause or following a constructive termination (each as defined in the Severance Plan and each, a “covered termination”), in each case, subject to the (i) executive’s execution and non-revocation of a general release of claims in favor of the Company and (ii) continued compliance with the restrictive covenants related to post-employment non-solicitation and non-competition for 12 months following any termination of employment and indefinite covenants covering confidentiality and non-disparagement.
In the event of a covered termination, the Severance Plan provides for the following payments and benefits:
| ● | the prior year’s cash bonus, to the extent earned but not yet paid as of the date of termination; |
| ● | a lump-sum pro-rata cash bonus for the year of termination based on actual performance; |
57
Table of Contents
| ● | a payment, in cash or an equivalent number of LTIP Units, equal to the sum of the executive’s (x) annual base salary and (y) target annual bonus opportunity (the “severance amount”) multiplied by the multiplier applicable to such executive (which is 1.5 for Messrs. Bragg and Lacy), payable in equal monthly installments over the applicable severance period (which is 18 months for Messrs. Bragg and Lacy); |
| ● | a cash payment in an amount equal to the total amount of the monthly COBRA insurance premiums for participation in the welfare benefit programs of the Company in which the executive participated as of the date of termination (the “welfare benefit”), payable for a period of up to 12 months (12 months for Messrs. Bragg and Lacy); and |
| ● | any unvested time-based equity awards (including performance-based awards that convert to time-based awards in connection with a change of control) will vest in full, and any unvested performance-based equity awards will vest at the greater of the target award or actual performance, if measurable, through the date of termination. |
Notwithstanding the foregoing, in the event such covered termination occurs during the two-year period following a change of control (as defined in the Severance Plan), the Severance Plan provides for the following payments and benefits:
| ● | the prior year’s cash bonus, to the extent earned but not yet paid as of the date of termination; |
| ● | a lump-sum pro-rata cash bonus for the year of termination based on actual performance; |
| ● | the severance amount multiplied by the multiplier applicable to such executive (which is 2 for Messrs. Bragg and Lacy); |
| ● | the welfare benefit payable for a period of up to 18 months (18 months for Messrs. Bragg and Lacy); and |
| ● | any unvested time-based equity awards (including performance-based awards that convert to time-based awards in connection with a change of control) will vest in full, and any unvested performance-based equity awards will vest at the greater of the target award or actual performance, if measurable, through the date of termination. |
The foregoing summary is qualified in its entirety by reference to the Severance Plan, a copy of which is filed herewith as Exhibit 10.33 and is incorporated herein by reference.
Item 9C. DISCLOSURE REGARDING FOREIGN JURSIDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
58
Table of Contents
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information concerning our directors, executive officers and corporate governance required by Item 10 will be included in the Proxy Statement to be filed relating to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
We have a code of ethics for senior financial officers that applies to our principal executive officer, all members of our finance staff, including the principal financial officer, the principal accounting officer, the treasurer and the controller, our director of investor relations, our corporate secretary, and all other Company officers. We also have a code of business conduct and ethics that applies to all of our employees. Information regarding our codes is available on our website, www.udr.com, and is incorporated by reference to the information set forth under the heading “Corporate Governance Matters” in our definitive proxy statement for UDR’s 2026 Annual Meeting of Stockholders. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of our codes by posting such amendment or waiver on our website.
The Company has an
Item 11. EXECUTIVE COMPENSATION
The information concerning our executive compensation required by Item 11 will be included in the Proxy Statement to be filed relating to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information concerning the security ownership of certain beneficial owners and management and related stockholder matters (including equity compensation plan information) required by Item 12 will be included in the Proxy Statement to be filed relating to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information concerning certain relationships, related transactions and director independence required by Item 13 will be included in the Proxy Statement to be filed relating to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information concerning our principal accounting fees and services required by Item 14 will be included in the Proxy Statement to be filed relating to our 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
59
Table of Contents
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) | The following documents are filed as part of this Report: |
1. Financial Statements. See Index to Consolidated Financial Statements and Schedules of UDR, Inc. on page F-1 of this Report.
2. Financial Statement Schedules. See Index to Consolidated Financial Statements and Schedules of UDR, Inc. on page S-1 of this Report. All other schedules are omitted because they are not required, are inapplicable, or the required information is included in the financial statements or notes thereto.
3. Exhibits. The exhibits filed with this Report are set forth in the Exhibit Index appearing immediately below.
EXHIBIT INDEX
The exhibits listed below are filed as part of this Report. References under the caption “Location” to exhibits or other filings indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. Management contracts and compensatory plans or arrangements filed as exhibits to this Report are identified by an asterisk. The Commission file number for UDR, Inc.’s Exchange Act filings referenced below is 1-10524.
Exhibit | Description | Location | ||
|---|---|---|---|---|
2.01 | Partnership Interest Purchase and Exchange Agreement dated as of September 10, 1998, by and between UDR, Inc., United Dominion Realty, L.P., American Apartment Communities Operating Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp., Fox Point Ltd. and James D. Klingbeil including as an exhibit thereto the proposed form of the Third Amended and Restated Limited Partnership Agreement of United Dominion Realty, L.P. | Exhibit 2(d) to UDR, Inc.’s Form S-3 Registration Statement (Registration No. 333-64281) filed with the Commission on September 25, 1998. | ||
2.02 | Agreement of Purchase and Sale dated as of August 13, 2004, by and between United Dominion Realty, L.P., a Delaware limited partnership, as Buyer, and Essex The Crest, L.P., a California limited partnership, Essex El Encanto Apartments, L.P., a California limited partnership, Essex Hunt Club Apartments, L.P., a California limited partnership, and the other signatories named as Sellers therein. | Exhibit 2.1 to UDR, Inc.’s Current Report on Form 8-K dated September 28, 2004 and filed with the Commission on September 29, 2004. | ||
2.03 | First Amendment to Agreement of Purchase and Sale dated as of September 29, 2004, by and between United Dominion Realty, L.P., a Delaware limited partnership, as Buyer, and Essex The Crest, L.P., a California limited partnership, Essex El Encanto Apartments, L.P., a California limited partnership, Essex Hunt Club Apartments, L.P., a California limited partnership, and the other signatories named as Sellers therein. | Exhibit 2.2 to UDR, Inc.’s Current Report on Form 8-K dated September 29, 2004 and filed with the Commission on October 5, 2004. | ||
60
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
2.04 | Second Amendment to Agreement of Purchase and Sale dated as of October 26, 2004, by and between United Dominion Realty, L.P., a Delaware limited partnership, as Buyer, and Essex The Crest, L.P., a California limited partnership, Essex El Encanto Apartments, L.P., a California limited partnership, Essex Hunt Club Apartments, L.P., a California limited partnership, and the other signatories named as Sellers therein. | Exhibit 2.3 to UDR, Inc.’s Current Report on Form 8-K/A dated September 29, 2004 and filed with the Commission on November 1, 2004. | ||
2.05 | Agreement of Purchase and Sale dated as of January 23, 2008, by and between UDR, Inc., United Dominion Realty, L.P., UDR Texas Properties LLC, UDR Western Residential, Inc., UDR South Carolina Trust, UDR Ohio Properties, LLC, UDR of Tennessee, L.P., UDR of NC, Limited Partnership, Heritage Communities L.P., Governour’s Square of Columbus Co., Fountainhead Apartments Limited Partnership, AAC Vancouver I, L.P., AAC Funding Partnership III, AAC Funding Partnership II and DRA Fund VI LLC. | Exhibit 2.1 to UDR, Inc.’s Current Report on Form 8-K dated January 23, 2008 and filed with the Commission on January 29, 2008. | ||
2.06 | First Amendment to Agreement of Purchase and Sale dated as of February 14, 2008, by and between UDR, Inc., United Dominion Realty, L.P., UDR Texas Properties LLC, UDR Western Residential, Inc., UDR South Carolina Trust, UDR Ohio Properties, LLC, UDR of Tennessee, L.P., UDR of NC, Limited Partnership, Heritage Communities L.P., Governour’s Square of Columbus Co., Fountainhead Apartments Limited Partnership, AAC Vancouver I, L.P., AAC Funding Partnership III, AAC Funding Partnership II and DRA Fund VI LLC. | Exhibit 2.2 to UDR, Inc.’s Current Report on Form 8-K/A dated March 3, 2008 and filed with the Commission on May 2, 2008. | ||
2.07 | Contribution Agreement by and among Home Properties, L.P., UDR, Inc., United Dominion Realty, L.P. and LSREF 4 Lighthouse Acquisitions, LLC, dated June 22, 2015 (UDR, Inc. and United Dominion Realty, L.P. have omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and shall furnish supplementally to the Commission copies of any of the omitted schedules and exhibits upon request by the Commission.) | Exhibit 2.1 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on June 22, 2015. | ||
2.08 | Amendment Agreement, dated as of August 27, 2015, by and among UDR, Inc., United Dominion Realty, L.P., Home Properties, Inc., Home Properties, L.P., LSREF4 Lighthouse Acquisitions, LLC LSREF4 Lighthouse Corporate Acquisitions, LLC and LSREF4 Lighthouse Operating Acquisitions, LLC. | Exhibit 2.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015. | ||
3.01 | Articles of Restatement of UDR, Inc. | Exhibit 3.09 to UDR, Inc.’s Current Report on Form 8-K dated July 27, 2005 and filed with the Commission on August 1, 2005. | ||
61
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
3.02 | Articles of Amendment to the Articles of Restatement of UDR, Inc. dated and filed with the State Department of Assessments and Taxation of the State of Maryland on March 14, 2007. | Exhibit 3.2 to UDR, Inc.’s Current Report on Form 8-K dated March 14, 2007 and filed with the Commission on March 15, 2007. | ||
3.03 | Articles of Amendment to the Articles of Restatement of UDR, Inc. dated August 30, 2011 and filed with the State Department of Assessments and Taxation of the State of Maryland on August 31, 2011. | Exhibit 3.1 to UDR, Inc.’s Current Report on Form 8-K dated August 29, 2011 and filed with the Commission on September 1, 2011. | ||
3.04 | Articles of Amendment to the Articles of Restatement of UDR, Inc. dated and filed with the State Department of Assessments and Taxation of the State of Maryland on May 24, 2018. | Exhibit 3.1 to UDR, Inc.’s Current Report on Form 8-K dated May 24, 2018 and filed with the SEC on May 29, 2018. | ||
3.05 | Articles of Amendment to the Articles of Restatement of UDR, Inc. dated and filed with the State Department of Assessments and Taxation of the State of Maryland on July 27, 2021. | Exhibit 3.1 to UDR, Inc.’s Current Report on Form 8-K dated July 29, 2021 and filed with the SEC on July 29, 2021. | ||
3.06 | Articles Supplementary relating to UDR, Inc.’s 6.75% Series G Cumulative Redeemable Preferred Stock dated and filed with the State Department of Assessments and Taxation of the State of Maryland on May 30, 2007. | Exhibit 3.4 to UDR, Inc.’s Form 8-A Registration Statement dated and filed with the Commission on May 30, 2007. | ||
3.07 | Amended and Restated Bylaws of UDR, Inc. (as amended through May 24, 2018). | Exhibit 3.6 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018. | ||
4.01 | Form of UDR, Inc. Common Stock Certificate. | Exhibit 4.1 to UDR, Inc.’s Current Report on Form 8-K dated March 14, 2007 and filed with the Commission on March 15, 2007. | ||
4.02 | Senior Indenture dated as of November 1, 1995, by and between UDR, Inc. and First Union National Bank of Virginia, N.A., as trustee. | Exhibit 4(ii)(h)(1) to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1996. | ||
4.03 | Supplemental Indenture dated as of June 11, 2003, by and between UDR, Inc. and Wachovia Bank, National Association, as trustee. | Exhibit 4.03 to UDR, Inc.’s Current Report on Form 8-K dated June 17, 2004 and filed with the Commission on June 18, 2004. | ||
4.04 | Subordinated Indenture dated as of August 1, 1994 by and between UDR, Inc. and Crestar Bank, as trustee. | Exhibit 4(i)(m) to UDR, Inc.’s Form S-3 Registration Statement (Registration No. 33-64725) filed with the Commission on November 15, 1995. | ||
4.05 | Form of UDR, Inc. Senior Debt Security. | Exhibit 4(i)(n) to UDR, Inc.’s Form S-3 Registration Statement (Registration No. 33-64725) filed with the Commission on November 15, 1995. | ||
4.06 | Form of UDR, Inc. Subordinated Debt Security. | Exhibit 4(i)(p) to UDR, Inc.’s Form S-3 Registration Statement (Registration No. 33-55159) filed with the Commission on August 19, 1994. | ||
62
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
4.07 | Form of UDR, Inc. Fixed Rate Medium-Term Note, Series A. | Exhibit 4.01 to UDR, Inc.’s Current Report on Form 8-K dated March 20, 2007 and filed with the Commission on March 22, 2007. | ||
4.08 | Form of UDR, Inc. Floating Rate Medium-Term Note, Series A. | Exhibit 4.02 to UDR, Inc.’s Current Report on Form 8-K dated March 20, 2007 and filed with the Commission on March 22, 2007. | ||
4.09 | Indenture dated as of April 1, 1994, by and between UDR, Inc. and Nationsbank of Virginia, N.A., as trustee. | Exhibit 4(ii)(f)(1) to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1994. | ||
4.10 | Supplemental Indenture dated as of August 20, 2009, by and between UDR, Inc. and U.S. Bank National Association, as trustee, to UDR, Inc.’s Indenture dated as of April 1, 1994. | Exhibit 4.1 to UDR, Inc.’s Current Report on Form 8-K dated August 20, 2009 and filed with the Commission on August 21, 2009. | ||
4.11 | Guaranty of United Dominion Realty, L.P. with respect to UDR, Inc.’s Indenture dated as of November 1, 1995. | Exhibit 99.1 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on September 30, 2010. | ||
4.12 | Guaranty of United Dominion Realty, L.P. with respect to UDR, Inc.’s Indenture dated as of October 12, 2006. | Exhibit 99.2 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on September 30, 2010. | ||
4.13 | First Supplemental Indenture among UDR, Inc., United Dominion Realty, L.P. and U.S. Bank National Association, as Trustee, dated as of May 3, 2011, relating to UDR, Inc.’s Medium-Term Notes, Series A, due Nine Months or More from Date of Issue. | Exhibit 4.1 to UDR, Inc.’s Current Report on Form 8-K filed with the Commission on May 4, 2011. | ||
4.14 | UDR, Inc. 2.950% Medium-Term Note, Series A due September 2026, issued August 23, 2016. | Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016. | ||
4.15 | UDR, Inc. 3.500% Medium-Term Note, Series A due July 2027, issued June 16, 2017. | Exhibit 10.2 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017. | ||
4.16 | UDR, Inc. 3.500% Medium-Term Note, Series A due January 2028, issued December 13, 2017. | Exhibit 4.21 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017. | ||
4.17 | UDR, Inc. 4.400% Medium-Term Note, Series A due January 2029, issued October 26, 2018. | Exhibit 4.21 to UDR, Inc’s Annual Report on Form 10-K for the year ended December 31, 2018. | ||
4.18 | UDR, Inc. 3.200% Medium-Term Note, Series A due January 2030, issued July 2, 2019. | Exhibit 4.1 to UDR, Inc’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019. | ||
4.19 | UDR, Inc. 3.000% Medium-Term Note, Series A due August 2031, issued August 15, 2019. | Exhibit 4.2 to UDR, Inc’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019. | ||
63
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
4.20 | UDR, Inc. 3.100% Medium-Term Note, Series A due November 2034, issued October 11, 2019. | Exhibit 4.22 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019. | ||
4.21 | UDR, Inc. 3.200% Medium-Term Note, Series A due January 2030, issued October 11, 2019. | Exhibit 4.23 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019. | ||
4.22 | Description of UDR, Inc’s Securities. | Exhibit 4.22 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021. | ||
4.23 | UDR, Inc. 3.200% Medium-Term Note, Series A due January 2030, issued February 28, 2020. | Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. | ||
4.24 | UDR, Inc. 2.100% Medium-Term Note, Series A due August 2032, issued July 21, 2020. | Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. | ||
4.25 | UDR, Inc. 1.900% Medium-Term Note, Series A due March 2033, issued December 14, 2020. | Exhibit 4.26 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020. | ||
4.26 | UDR, Inc. 2.100% Medium-Term Note, Series A due June 2033, issued February 26, 2021. | Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021. | ||
4.27 | UDR, Inc. 3.000% Medium-Term Note, Series A due August 2031, issued September 24, 2021. | Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. | ||
4.28 | UDR, Inc. 5.125% Medium-Term Note, Series A due September 1, 2034, issued August 15, 2024. | Exhibit 4.1 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. | ||
10.01* | UDR, Inc. 1999 Long-Term Incentive Plan (as amended and restated February 19, 2024). | Exhibit 10.1 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023. | ||
10.02* | Form of UDR, Inc. Restricted Stock Award Agreement under the 1999 Long-Term Incentive Plan. | Exhibit 10.2 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019. | ||
10.03* | Form of UDR, Inc. Restricted Stock Award Agreement for awards outside of the 1999 Long-Term Incentive Plan. | Exhibit 99.3 to UDR, Inc.’s Current Report on Form 8-K dated March 19, 2007 and filed with the Commission on March 19, 2007. | ||
10.04* | Description of UDR, Inc. Shareholder Value Plan. | Exhibit 10(x) to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 1999. | ||
10.05* | Description of UDR, Inc. Executive Deferral Plan. | Exhibit 10(xi) to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 1999. | ||
64
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
10.06* | Indemnification Agreement by and between UDR, Inc. and each of its directors and executive officers (as defined in Exchange Act Rule 3b-7). | Exhibit 10.2 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025. | ||
10.07 | Subordination Agreement dated as of April 16, 1998, by and between UDR, Inc. and United Dominion Realty, L.P. | Exhibit 10(vi)(a) to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998. | ||
10.08 | Third Amended and Restated Distribution Agreement among UDR, Inc., United Dominion Realty, L.P., as Guarantor, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Wells Fargo Securities, LLC, as Agents, dated September 1, 2011, with respect to the issue and sale by UDR, Inc. of its Medium-Term Notes, Series A Due Nine Months or More From Date of Issue. | Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on September 1, 2011. | ||
10.09 | Amendment No. 1, dated July 29, 2014, to the Third Amended and Restated Distribution Agreement among UDR, Inc., United Dominion Realty, L.P., as Guarantor, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Wells Fargo Securities, LLC, as Agents, dated September 1, 2011, with respect to the issue and sale by UDR, Inc. of its Medium-Term Notes, Series A Due Nine Months or More From Date of Issue. | Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K dated July 29, 2014 and filed with the Commission on July 31, 2014. | ||
10.10 | Amendment No. 2, dated April 27, 2017, to the Third Amended and Restated Distribution Agreement, dated September 1, 2011 and as amended July 29, 2014, among the Company and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, and Wells Fargo Securities, LLC, as Agents, with respect to the issue and sale by UDR, Inc. of its Medium Term Notes, Series A Due Nine Months or More From Date of Issue. | Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K dated April 27, 2017 and filed with the Commission on April 27, 2017. | ||
10.11 | Amendment No. 3, dated May 7, 2020, to the Third Amended and Restated Distribution Agreement, dated September 1, 2011 and as amended July 29, 2014 and April 27, 2017. | Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on May 7, 2020. | ||
10.12 | Amendment No. 4, dated February 14, 2023, to the Third Amended and Restated Distribution Agreement, dated September 1, 2011 and as amended July 29, 2014, April 27, 2017 and May 7, 2020. | Exhibit 1.2 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on February 14, 2023. | ||
10.13 | Second Amended and Restated Credit Agreement, dated as of September 15, 2021, by and among UDR, Inc., as borrower, and the lenders and agents party thereto. | Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-K dated September 15, 2021 and filed with the SEC on September 15, 2021. | ||
65
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
10.14 | First Amendment to Second Amended and Restated Credit Agreement, dated as of September 19, 2022, by and among UDR, Inc., as borrower, and the lenders and agents party thereto. | Exhibit 10.2 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022. | ||
10.15 | Second Amendment to Second Amended and Restated Credit Agreement, dated as of August 14, 2024, by and among UDR, Inc., as borrower, and the lenders and agents party thereto. | Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-K dated August 14, 2024 and filed with the Commission on August 19, 2024. | ||
10.16 | Third Amendment to Second Amended and Restated Credit Agreement, dated as of September 25, 2025, by and among UDR, Inc., as borrower, and the lenders and agents party thereto. | Exhibit 10.3 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025. | ||
10.17 | Guaranty of United Dominion Realty, L.P., dated as of September 15, 2021, with respect to the Credit Agreement, dated as of September 15, 2021. | Exhibit 10.2 to UDR, Inc.’s Current Report on Form 8-K dated September 15, 2021 and filed with the SEC on September 15, 2021. | ||
10.18 | Amended and Restated Aircraft Time Sharing Agreement dated as of February 18, 2019, by and between UDR, Inc. and Thomas W. Toomey. | Exhibit 10.15 to UDR, Inc’s Annual Report on Form 10-K for the year ended December 31, 2018. | ||
10.19 | Agreement of Limited Partnership of UDR Lighthouse DownREIT L.P., dated as of October 5, 2015, as amended. | Exhibit 10.21 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015. | ||
10.20* | Class 1 LTIP Unit Award Agreement. | Exhibit 10.22 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015. | ||
10.21* | Notice of Class 2 LTIP Unit Award. | Exhibit 10.16 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019. | ||
10.22* | Notice of Restricted Stock Unit Award. | Exhibit 10.17 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019. | ||
10.23* | Letter Agreement, between UDR, Inc. and Warren L. Troupe (including the related release agreement and consulting agreement as exhibits thereto), dated December 31, 2019. | Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-K dated December 31, 2019 and filed with the Commission on January 3, 2020. | ||
10.24* | Letter Agreement, between UDR, Inc. and Jerry A. Davis (including the related release agreement and Consulting Agreement as exhibits thereto), dated December 16, 2020. | Exhibit 10.2 to UDR Inc.’s Current Report on Form 8-K dated and filed with the Commission on December 16, 2020. | ||
10.25* | Class 1 Performance LTIP Unit Award Agreement. | Exhibit 10.22 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020. | ||
10.26* | Class 2 Performance LTIP Unit Award Agreement. | Exhibit 10.23 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020. | ||
66
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
10.27* | Class 2 Performance LTIP Unit Award Agreement, STI. | Exhibit 10.24 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020. | ||
10.28 | Amended and Restated Agreement of Limited Partnership of United Dominion Realty, L.P., dated as of October 29, 2025. | Exhibit 10.4 to UDR, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025. | ||
10.29* | Form of UDR, Inc. Stock Option Agreement. | Exhibit 10.37 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021. | ||
10.30* | Executive Agreement by and between UDR, Inc. and Thomas W. Toomey, dated February 15, 2024. | Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-K dated February 15, 2024 and filed with the Commission on February 20, 2024. | ||
10.31* | Letter Agreement by and between UDR, Inc. and Harry G. Alcock, dated March 14, 2024. | Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on March 14, 2024. | ||
10.32* | Separation Agreement, between UDR, Inc. and Joseph D. Fisher, dated September 2, 2025. | Exhibit 10.1 to UDR, Inc.’s Current Report on Form 8-K dated and filed with the Commission on September 2, 2025. | ||
10.33* | UDR, Inc. Executive Severance Plan. | Filed herewith. | ||
19 | Amended and Restated Insider Trading Compliance Program. | Exhibit 19 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024. | ||
21 | Subsidiaries of UDR, Inc. | Filed herewith. | ||
22 | List of Guarantor Subsidiaries of UDR, Inc. | Exhibit 22.1 to UDR Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. | ||
23 | Consent of Independent Registered Public Accounting Firm for UDR, Inc. | Filed herewith. | ||
31.1 | Rule 13a-14(a) Certification of the Chief Executive Officer of UDR, Inc. | Filed herewith. | ||
31.2 | Rule 13a-14(a) Certification of the Chief Financial Officer of UDR, Inc. | Filed herewith. | ||
32.1 | Section 1350 Certification of the Chief Executive Officer of UDR, Inc. | Filed herewith. | ||
32.2 | Section 1350 Certification of the Chief Financial Officer of UDR, Inc. | Filed herewith. | ||
97.1 | UDR, Inc. Recoupment Policy. | Exhibit 97.1 to UDR, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023. | ||
67
Table of Contents
Exhibit | Description | Location | ||
|---|---|---|---|---|
101 | Inline XBRL (Extensible Business Reporting Language). The following materials from this Annual Report on Form 10-K for the period ended December 31, 2025, formatted in Inline XBRL: (i) consolidated balance sheets of UDR, Inc., (ii) consolidated statements of operations of UDR, Inc., (iii) consolidated statements of comprehensive income/(loss) of UDR, Inc., (iv) consolidated statements of changes in equity of UDR, Inc., (v) consolidated statements of cash flows of UDR, Inc., and (vi) notes to consolidated financial statements of UDR, Inc. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | Filed herewith. | ||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | Filed herewith. | ||
* | Management Contract or Compensatory Plan or Arrangement |
Item 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
UDR, Inc. | ||
Date: February 17, 2026 | By: | /s/ Thomas W. Toomey |
Thomas W. Toomey | ||
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) | ||
68
Table of Contents
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on February 17, 2026 by the following persons on behalf of the registrant and in the capacities indicated.
/s/ Thomas W. Toomey | /s/ Katherine A. Cattanach | |
Thomas W. Toomey | Katherine A. Cattanach | |
Chairman of the Board, President and (Principal Executive Officer) | Director | |
/s/ David D. Bragg | /s/ Richard B. Clark | |
David D. Bragg | Richard B. Clark | |
Senior Vice President - Chief Financial Officer | Director | |
(Principal Financial Officer) | ||
/s/ Tracy L. Hofmeister | /s/ Ellen M. Goitia | |
Tracy L. Hofmeister | Ellen M. Goitia | |
Senior Vice President – Chief Accounting Officer | Director | |
(Principal Accounting Officer) | ||
/s/ Jon A. Grove | /s/ Mary Ann King | |
Jon A. Grove | Mary Ann King | |
Lead Independent Director | Director | |
/s/ Robert A. McNamara | ||
Robert A. McNamara | ||
Director | ||
/s/ Diane M. Morefield | ||
Diane M. Morefield | ||
Director | ||
/s/ Kevin C. Nickelberry | ||
Kevin C. Nickelberry | ||
Director | ||
/s/ Mark R. Patterson | ||
Mark R. Patterson | ||
Director | ||
69
Table of Contents
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
PAGE | |
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT | |
Reports of Independent Registered Public Accounting Firm | F-2 |
Consolidated Balance Sheets at December 31, 2025 and 2024 | F-5 |
Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023 | F-6 |
Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2025, 2024, and 2023 | F-7 |
Consolidated Statements of Changes in Equity for the years ended December 31, 2025, 2024, and 2023 | F-8 |
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023 | F-9 |
Notes to Consolidated Financial Statements | F-11 |
SCHEDULES FILED AS PART OF THIS REPORT | |
Schedule III- Summary of Real Estate Owned | S-1 |
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of UDR, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of UDR, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income/(loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 17, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indicators of Impairment of Real Estate Owned and Investment in Unconsolidated Joint Ventures | |
Description of the Matter | At December 31, 2025, the Company’s real estate owned, net and investment in and advances to unconsolidated joint ventures, net were approximately $9.1 billion and $886.5 million, respectively. As more fully described in Note 2 to the consolidated financial statements, the Company periodically evaluates these assets for indicators of impairment, and this includes, among other things, judgments based on factors such as operational performance, market conditions, the Company’s intent and ability to hold each asset, as well as any significant cost overruns on development properties. During 2025, the Company did not recognize an impairment related to real estate owned, net or any other than temporary impairments related to its investment in unconsolidated joint ventures. |
F - 2
Table of Contents
Auditing the Company’s evaluation for indicators of impairment was complex due to the subjectivity involved in the identification of events or changes in circumstances that may indicate an impairment of its real estate owned or that the value of its investment in and advances to unconsolidated joint ventures may be other than temporarily impaired. Differences or changes in these judgments could have a material impact on the Company’s analysis. | |
How We Addressed the Matter in Our Audit | We tested the Company’s internal controls over the asset impairment evaluation process. This included testing controls over management’s determination and review of the considerations used in the impairment indicator analysis. Our procedures with regard to the Company’s evaluation for indicators of impairment included, among others, testing the completeness and accuracy of management’s impairment analysis and evaluating management’s judgments determining whether indicators of impairment were present. For example, we performed inquiries of management, considered historical operating results and current market conditions, performed an independent assessment using both internally and externally available information, and read the minutes of the meetings of the Board of Directors. |
/s/ Ernst & Young LLP
We have served as the Company's auditor since at least 1984, but we are unable to determine the specific year.
Denver, Colorado
February 17, 2026
F - 3
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of UDR, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited UDR, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, UDR, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income/(loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 17, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Denver, Colorado
February 17, 2026
F - 4
Table of Contents
UDR, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, | December 31, | |||||
| 2025 | | 2024 | |||
ASSETS | ||||||
Real estate owned: |
| |
| | ||
Real estate held for investment | $ | | $ | | ||
Less: accumulated depreciation |
| ( |
| ( | ||
Real estate held for investment, net |
| |
| | ||
Real estate under development (net of accumulated depreciation of $ |
| |
| — | ||
Real estate held for disposition (net of accumulated depreciation of $ |
| — |
| | ||
Total real estate owned, net of accumulated depreciation |
| |
| | ||
Cash and cash equivalents |
| |
| | ||
Restricted cash |
| |
| | ||
Notes receivable, net |
| |
| | ||
Investment in and advances to unconsolidated joint ventures, net |
| |
| | ||
Operating lease right-of-use assets | | | ||||
Other assets |
| |
| | ||
Total assets | $ | | $ | | ||
LIABILITIES AND EQUITY |
| |
| | ||
Liabilities: |
| |
| | ||
Secured debt, net | $ | | $ | | ||
Unsecured debt, net |
| |
| | ||
Operating lease liabilities | | | ||||
Real estate taxes payable |
| |
| | ||
Accrued interest payable |
| |
| | ||
Security deposits and prepaid rent |
| |
| | ||
Distributions payable |
| |
| | ||
Accounts payable, accrued expenses, and other liabilities |
| |
| | ||
Total liabilities |
| |
| | ||
Commitments and contingencies (Note 15) |
| |
| | ||
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| |
| | ||
Equity: |
| |
| | ||
Preferred stock, |
| |
| | ||
| |
| | |||
Series F; |
| |
| | ||
Common stock, $ |
| |
| | ||
| |
| | |||
Additional paid-in capital |
| |
| | ||
Distributions in excess of net income |
| ( |
| ( | ||
Accumulated other comprehensive income/(loss), net |
| |
| | ||
Total stockholders’ equity |
| |
| | ||
Noncontrolling interests |
| |
| | ||
Total equity |
| |
| | ||
Total liabilities and equity | $ | | $ | | ||
See accompanying notes to consolidated financial statements.
F - 5
Table of Contents
UDR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended December 31, | |||||||||
| |||||||||
REVENUES: | | | | ||||||
Rental income | $ | | $ | | $ | | |||
Joint venture management and other fees |
| |
| |
| | |||
Total revenues |
| |
| |
| | |||
OPERATING EXPENSES: |
| |
| |
| | |||
Property operating and maintenance |
| |
| |
| | |||
Real estate taxes and insurance |
| |
| |
| | |||
Property management |
| |
| |
| | |||
Other operating expenses |
| |
| |
| | |||
Real estate depreciation and amortization |
| |
| |
| | |||
General and administrative |
| |
| |
| | |||
Casualty-related charges/(recoveries), net |
| |
| |
| | |||
Other depreciation and amortization |
| |
| |
| | |||
Total operating expenses |
| |
| |
| | |||
Gain/(loss) on sale of real estate owned | | | | ||||||
Operating income |
| |
| |
| | |||
Income/(loss) from unconsolidated entities |
| |
| |
| | |||
Interest expense | ( | ( | ( | ||||||
Interest income and other income/(expense), net |
| |
| ( |
| | |||
Income/(loss) before income taxes |
| |
| |
| | |||
Tax (provision)/benefit, net |
| ( |
| ( |
| ( | |||
Net income/(loss) |
| |
| |
| | |||
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| ( |
| ( |
| ( | |||
Net (income)/loss attributable to noncontrolling interests |
| ( |
| ( |
| ( | |||
Net income/(loss) attributable to UDR, Inc. |
| |
| | | ||||
Distributions to preferred stockholders — Series E (Convertible) |
| ( |
| ( |
| ( | |||
Net income/(loss) attributable to common stockholders | $ | | $ | | $ | | |||
Income/(loss) per weighted average common share: |
| |
| |
| | |||
Basic | $ | | $ | | $ | | |||
Diluted | $ | | $ | | $ | | |||
Weighted average number of common shares outstanding: |
| |
| |
| | |||
Basic |
| |
| |
| | |||
Diluted |
| |
| |
| | |||
See accompanying notes to consolidated financial statements.
F - 6
Table of Contents
UDR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(In thousands)
Year Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Net income/(loss) | $ | | $ | | $ | | |||
Other comprehensive income/(loss), including portion attributable to noncontrolling interests: |
| |
| |
| | |||
Other comprehensive income/(loss) - derivative instruments: |
| |
| |
| | |||
Unrealized holding gain/(loss) |
| |
| |
| | |||
(Gain)/loss reclassified into earnings from other comprehensive income/(loss) |
| ( |
| ( |
| ( | |||
Other comprehensive income/(loss), including portion attributable to noncontrolling interests |
| ( |
| ( |
| ( | |||
Comprehensive income/(loss) |
| |
| |
| | |||
Comprehensive (income)/loss attributable to noncontrolling interests |
| ( |
| ( |
| ( | |||
Comprehensive income/(loss) attributable to UDR, Inc. | $ | | $ | | $ | | |||
See accompanying notes to consolidated financial statements.
F - 7
Table of Contents
UDR, INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(In thousands, except per share data)
| | | | 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 | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | |||||||
Net income/(loss) attributable to UDR, Inc. |
| — |
| — |
| — |
| |
| — |
| — |
| | |||||||
Other comprehensive income/(loss) |
| — |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||||
Issuance/(forfeiture) of common and restricted shares, net |
| — |
| |
| |
| — |
| — |
| — |
| | |||||||
Issuance of common shares through public offering, net | — |
| — |
| ( |
| — |
| — |
| — |
| ( | ||||||||
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership and DownREIT Partnership |
| — |
| |
| |
| — |
| — |
| — |
| | |||||||
Common stock distributions declared ($ |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( | |||||||
Repurchase of common shares | — | ( | ( | — | — | — | ( | ||||||||||||||
Preferred stock distributions declared-Series E ($ |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( | |||||||
Adjustment to reflect redemption value of redeemable noncontrolling interests |
| — |
| — |
| — |
| |
| — |
| — |
| | |||||||
Balance at December 31, 2023 | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | |||||||
Net income/(loss) attributable to UDR, Inc. |
| — |
| — |
| — |
| |
| — |
| — |
| | |||||||
Other comprehensive income/(loss) |
| — |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||||
Issuance/(forfeiture) of common and restricted shares, net |
| — |
| |
| |
| — |
| — |
| — |
| | |||||||
Issuance of common shares through public offering, net | — |
| — |
| ( |
| — |
| — |
| — |
| ( | ||||||||
Conversion of Series E Cumulative Convertible shares | ( | | | — | — | — | — | ||||||||||||||
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership and DownREIT Partnership |
| — |
| |
| |
| — |
| — |
| — |
| | |||||||
Contribution of noncontrolling interests in consolidated real estate | — | — | — | — | — | | | ||||||||||||||
Common stock distributions declared ($ |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( | |||||||
Preferred stock distributions declared-Series E ($ |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( | |||||||
Adjustment to reflect redemption value of redeemable noncontrolling interests |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( | |||||||
Balance at December 31, 2024 | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | |||||||
Net income/(loss) attributable to UDR, Inc. | — | — | — | | — | — | | ||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | ( | — | ( | ||||||||||||||
Issuance/(forfeiture) of common and restricted shares, net | — | | | — | — | — | | ||||||||||||||
Issuance of common shares through public offering, net | — | — | ( | — | — | — | ( | ||||||||||||||
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership and DownREIT Partnership | — | | | — | — | — | | ||||||||||||||
Common stock distributions declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||
Repurchase of common shares | — | ( | ( | — | — | — | ( | ||||||||||||||
Preferred stock distributions declared-Series E ($ | — | — | — | ( | — | — | ( | ||||||||||||||
Adjustment to reflect redemption value of redeemable noncontrolling interests | — | — | — | | — | — | | ||||||||||||||
Balance at December 31, 2025 | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | |||||||
See accompanying notes to consolidated financial statements.
F - 8
Table of Contents
UDR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except for share data)
Year Ended December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | | 2024 | | 2023 | ||||
Operating Activities | |
| |
| | ||||
Net income/(loss) | $ | | $ | | $ | | |||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: |
| |
| |
| | |||
Depreciation and amortization |
| |
| |
| | |||
(Gain)/loss on sale of real estate owned |
| ( |
| ( |
| ( | |||
(Income)/loss from unconsolidated entities |
| ( |
| ( |
| ( | |||
Return on investment in unconsolidated joint ventures and partnerships |
| |
| |
| | |||
Amortization of share-based compensation |
| |
| |
| | |||
Provision/(recovery) for credit losses | ( | | | ||||||
Other |
| |
| |
| | |||
Changes in operating assets and liabilities: |
|
| |
| | ||||
(Increase)/decrease in operating assets |
| ( |
| ( |
| ( | |||
Increase/(decrease) in operating liabilities |
| ( |
| ( |
| ( | |||
Net cash provided by/(used in) operating activities |
| |
| |
| | |||
Investing Activities |
| |
| |
| | |||
Acquisition of real estate assets |
| ( |
| — |
| ( | |||
Proceeds from sales of real estate investments, net |
| |
| |
| | |||
Development of real estate assets |
| ( |
| ( |
| ( | |||
Capital expenditures and other major improvements — real estate assets |
| ( |
| ( |
| ( | |||
Capital expenditures — non-real estate assets |
| ( |
| ( |
| ( | |||
Investment in unconsolidated joint ventures and partnerships |
| ( |
| ( |
| ( | |||
Distributions received from unconsolidated joint ventures and partnerships |
| |
| |
| | |||
Proceeds from sale of equity securities | — | | | ||||||
Purchase deposits on pending acquisitions | — | | ( | ||||||
Repayment/(issuance) of notes receivable, net |
| ( |
| ( |
| ( | |||
Net cash provided by/(used in) investing activities |
| ( |
| ( |
| ( | |||
Financing Activities |
| |
| |
| | |||
Payments on secured debt |
| ( |
| ( |
| ( | |||
Payments on unsecured debt | — | ( | — | ||||||
Net proceeds from the issuance of unsecured debt |
| — |
| |
| — | |||
Net proceeds/(repayment) of commercial paper |
| |
| ( |
| | |||
Net proceeds/(repayment) of revolving bank debt |
| |
| |
| ( | |||
Repurchase of common shares | ( | — | ( | ||||||
Distributions paid to redeemable noncontrolling interests |
| ( |
| ( |
| ( | |||
Distributions paid to preferred stockholders |
| ( |
| ( |
| ( | |||
Distributions paid to common stockholders |
| ( |
| ( |
| ( | |||
Other |
| ( |
| ( |
| ( | |||
Net cash provided by/(used in) financing activities |
| ( |
| ( |
| ( | |||
Net increase/(decrease) in cash, cash equivalents, and restricted cash |
| |
| |
| | |||
Cash, cash equivalents, and restricted cash, beginning of year |
| |
| |
| | |||
Cash, cash equivalents, and restricted cash, end of period | $ | | $ | | $ | | |||
Supplemental Information: |
| |
| |
| | |||
Interest paid during the period, net of amounts capitalized | $ | | $ | | $ | | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||
Operating cash flows from operating leases | | | | ||||||
Cash paid/(refunds received) for income taxes |
| |
| |
| | |||
Non-cash transactions: |
| |
| |
| | |||
Secured debt assumed upon acquisition of real estate assets | $ | — | $ | — | $ | | |||
OP Units issued for real estate, net | — | — | | ||||||
Notes receivable settled in exchange for real estate owned | | — | — | ||||||
Conversion of note receivable to equity securities | | — | — | ||||||
Development costs and capital expenditures incurred, but not yet paid | | |
| | |||||
Conversion of Operating Partnership and DownREIT Partnership noncontrolling interests to common stock ( |
| |
| |
| | |||
Distribution of equity securities from unconsolidated real estate technology investments | — | — | | ||||||
Right-of-use assets obtained in exchange for operating lease liabilities remeasurement | | — | — | ||||||
Contribution of operating properties to unconsolidated joint venture | | — | | ||||||
F - 9
UDR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)
(In thousands, except for share data)
Year Ended December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | | 2024 | | 2023 | ||||
Transfer of preferred equity investment to note receivable | — | — | | ||||||
Dividends declared, but not yet paid |
| |
| |
| | |||
The following reconciles cash, cash equivalents, and restricted cash to amounts as shown above: | |||||||||
Cash, cash equivalents, and restricted cash, beginning of year: | |||||||||
Cash and cash equivalents | $ | | $ | | $ | | |||
Restricted cash | | | | ||||||
Total cash, cash equivalents, and restricted cash as shown above | $ | | $ | $ | |||||
Cash, cash equivalents, and restricted cash, end of period: | |||||||||
Cash and cash equivalents | $ | | $ | | $ | | |||
Restricted cash | | | | ||||||
Total cash, cash equivalents, and restricted cash as shown above | $ | | $ | $ | |||||
See accompanying notes to consolidated financial statements.
F - 10
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
1. CONSOLIDATION AND BASIS OF PRESENTATION
Organization and Formation
UDR, Inc. (“UDR,” the “Company,” “we,” or “our”) is a self-administered real estate investment trust, or REIT, that owns, operates, acquires, renovates, develops, redevelops, and manages apartment communities in targeted markets located in the United States. At December 31, 2025, our consolidated apartment portfolio consisted of
Basis of Presentation
The accompanying consolidated financial statements of UDR include its wholly-owned and/or controlled subsidiaries (see Note 4, Variable Interest Entities and Note 5, Joint Ventures and Partnerships, for further discussion). All significant intercompany accounts and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of UDR and its subsidiaries, including United Dominion Realty, L.P. (the “Operating Partnership” or the “OP”) and UDR Lighthouse DownREIT L.P. (the “DownREIT Partnership”). As of December 31, 2025 and 2024, there were
The Company evaluated subsequent events through the date its financial statements were issued. No significant recognized or non-recognized subsequent events were noted other than those in Note 5, Joint Ventures and Partnerships.
2. SIGNIFICANT ACCOUNTING POLICIES
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses, which requires disclosure of additional information about specific cost and expense categories in the notes to the financial statements. The ASU may be applied either prospectively or retrospectively and is effective for the Company for the year ended December 31, 2027, and interim reporting periods commencing in 2028. The Company is currently evaluating the effect that the ASU will have on the consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which requires disclosure enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. The ASU became effective for the Company for the year ended December 31, 2025. The Company adopted the ASU, however, the updated standard did not have a material impact on the consolidated financial statements and related disclosures.
Real Estate
Real estate assets held for investment are carried at historical cost and consist of land, land improvements, buildings and improvements, furniture, fixtures and equipment and other costs incurred during their development, acquisition and redevelopment.
F - 11
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Expenditures for ordinary repair and maintenance costs are charged to expense as incurred. Expenditures for improvements, renovations, and replacements related to the acquisition and/or improvement of real estate assets are capitalized and depreciated over their estimated useful lives if the expenditures qualify as a betterment or the life of the related asset will be substantially extended beyond the original life expectancy.
UDR purchases real estate investment properties and records the tangible and identifiable intangible assets and liabilities acquired based on their estimated fair value. The primary, although not only, identifiable intangible asset associated with our portfolio is the value of existing lease agreements. When recording the acquisition of a community, we first assign fair value to the estimated intangible value of the existing lease agreements and then to the estimated value of the land, building and fixtures assuming the community is vacant. The Company estimates the intangible value of the lease agreements by determining the lost revenue associated with a hypothetical lease-up. Depreciation on the building is based on the expected useful life of the asset and the in-place leases are amortized over their remaining average contractual life. Property acquisition costs are capitalized as incurred if the acquisition does not meet the definition of a business.
Quarterly or when changes in circumstances warrant, UDR will assess our real estate properties for indicators of impairment. The judgments regarding the existence of impairment indicators are based on certain factors. Such factors include, among other things, operational performance, market conditions, the Company’s intent and ability to hold the related asset, as well as any significant cost overruns on development properties.
If a real estate property has indicators of impairment, we assess whether the long-lived asset’s carrying value exceeds the community’s undiscounted future cash flows, which is representative of projected net operating income (“NOI”) plus the residual value of the community. Our future cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and operating conditions and our estimated holding periods. If such indicators of impairment are present and the carrying value exceeds the undiscounted cash flows of the community, an impairment loss is recognized equal to the excess of the carrying amount of the asset over its estimated fair value. Our estimates of fair value represent our best estimate based primarily upon unobservable inputs related to rental rates, operating costs, growth rates, discount rates, capitalization rates, industry trends and reference to market rates and transactions.
For long-lived assets to be disposed of, impairment losses are recognized when the fair value of the asset less estimated cost to sell is less than the carrying value of the asset. Properties classified as real estate held for disposition generally represent properties that are actively marketed or contracted for sale with the closing expected to occur within the next twelve months. Real estate held for disposition is carried at the lower of cost, net of accumulated depreciation, or fair value, less the cost to sell, determined on an asset-by-asset basis. Expenditures for ordinary repair and maintenance costs on held for disposition properties are charged to expense as incurred. Expenditures for improvements, renovations, and replacements related to held for disposition properties are capitalized at cost. Depreciation is not recorded on real estate held for disposition.
For the years ended December 31, 2025, 2024 and 2023, we did not record any impairments on our real estate properties.
Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets which are
Predevelopment, development, and redevelopment projects and related costs are capitalized and reported on the Consolidated Balance Sheets as Total real estate owned, net of accumulated depreciation. The Company capitalizes costs directly related to the predevelopment, development, and redevelopment of a capital project, which include, but are not limited to, interest, real estate taxes, insurance, and allocated development and redevelopment overhead related to support costs for personnel working on the capital projects. We use our professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. These costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress and such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. These costs, excluding the direct costs of development and redevelopment and capitalized interest, for the years ended December 31, 2025, 2024, and 2023 were $
F - 12
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
2024, and 2023, total interest capitalized was $
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and short-term, highly liquid investments. We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The majority of the Company’s cash and cash equivalents are held at major commercial banks.
Restricted Cash
Restricted cash primarily consists of escrow deposits held by lenders for real estate taxes, insurance and replacement reserves, and security deposits.
Real Estate Sales Gain Recognition
For sale transactions resulting in a transfer of a controlling financial interest of a property, the Company generally derecognizes the related assets and liabilities from its Consolidated Balance Sheets and records the gain or loss in the period in which the transfer of control occurs. If control of the property has not been transferred by the Company, the criteria for derecognition are not met and the Company will continue to recognize the related assets and liabilities on its Consolidated Balance Sheets.
Sale transactions to entities in which the Company sells a controlling financial interest in a property but retains a noncontrolling interest are accounted for as partial sales. Partial sales resulting in a change in control are accounted for at fair value and a full gain or loss is recognized. Therefore, the Company will record a gain or loss on the partial interest sold, and the initial measurement of our retained interest will be accounted for at fair value.
Sales of real estate to joint ventures or other noncontrolled investees are also accounted for at fair value and the Company will record a full gain or loss in the period the property is contributed.
To the extent that the Company acquires a controlling financial interest in a property that it previously accounted for as an equity method investment, the Company will not remeasure its previously held interest if the acquisition is treated as an asset acquisition. The Company will include the carrying amount of its previously held equity method interest along with the consideration paid and transaction costs incurred in determining the amounts to allocate to the related assets and liabilities acquired on its Consolidated Balance Sheets. When treated as an asset acquisition, the Company will not recognize a gain or loss on consolidation of a property.
Allowance for Credit Losses
The Company accounts for allowance for credit losses under the current expected credit loss (“CECL”) impairment model for its financial assets, including trade and other receivables, held-to-maturity debt securities, loans and other financial instruments, and presents the net amount of the financial instrument expected to be collected. The CECL impairment model excludes operating lease receivables. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, we analyze the following criteria, as applicable in developing allowances for credit losses: historical loss information, the borrower’s ability to make scheduled payments, the remaining time to maturity, the value of underlying collateral, projected future performance of the borrower and macroeconomic trends.
The Company measures credit losses of financial assets on a collective (pool) basis when similar risk characteristics exist. If the Company determines that a financial asset does not share risk characteristics with the Company’s other financial assets, the Company evaluates the financial asset for expected credit losses on an individual basis. Allowance for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded in Interest income and other income/(expense), net on the Consolidated Statements of
F - 13
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Operations. Recoveries of financial assets previously written off are recorded when received. For the years ended December 31, 2025, 2024 and 2023, the Company recorded net credit recoveries/(losses) of $
The Company has made the optional election provided by the standard not to measure allowance for credit losses for accrued interest receivables as the Company writes off any uncollectible accrued interest receivables in a timely manner. The Company periodically evaluates the collectability of its accrued interest receivables. A write-off is recorded when the Company concludes that all or a portion of its accrued interest receivable balance is no longer collectible.
Notes Receivable
Notes receivable relate to financing arrangements which are typically secured by assets of the borrower that may include real estate assets. Certain of the loans we extend may include characteristics such as options to purchase the project within a specific time window following expected project completion. These characteristics can cause the loans to fall under the definition of a variable interest entity (“VIE”), and thus trigger consolidation consideration. We consider the facts and circumstances pertinent to each loan, including the relative amount of financing we are contributing to the overall project cost, decision making rights or control we hold, and our rights to expected residual gains or our obligations to absorb expected residual losses from the project. If we are deemed to be the primary beneficiary of a VIE due to holding a controlling financial interest, the majority of decision making control, or by other means, consolidation of the VIE would be required. The Company has concluded that it is not the primary beneficiary of the borrowing entities of the existing loans.
Additionally, we analyze each loan arrangement that involves real estate development to consider whether the loan qualifies for accounting as a loan or as an investment in a real estate development project. The Company has evaluated its real estate loans, where appropriate, for accounting treatment as loans versus real estate development projects, as required by Accounting Standards Codification (“ASC”) 310-10. For each loan, the Company has concluded that the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate.
The following table summarizes our Notes receivable, net as of December 31, 2025 and 2024 (dollars in thousands):
Interest rate at | Balance Outstanding (a) | |||||||
| December 31, | | December 31, | | December 31, | |||
2025 | 2025 | 2024 | ||||||
Note due March 2025 (b) | — | % | $ | — | $ | | ||
Notes due October 2025 and May 2026 (c) | — | % | — | | ||||
Note due December 2026 (d) | | % | | | ||||
Note due December 2026 (e) | | % | | | ||||
Notes due June 2027 (f) | | % | | | ||||
Note due September 2027 (g) | | % | | | ||||
Notes receivable | | | ||||||
Allowance for credit losses | ( | ( | ||||||
Total notes receivable, net |
| | $ | | $ | | ||
| (a) | Outstanding note amounts include any accrued and unpaid interest, as applicable. |
| (b) | The Company had a secured note with an unaffiliated third party with an aggregate commitment of $ |
F - 14
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
| issuer. The Company recorded its investment in the real estate technology company in Other Assets on the Consolidated Balance Sheets. |
| (c) | The Company had |
| (d) | The Company has a secured mezzanine loan with a third party developer of a |
| (e) | The Company has a secured mezzanine loan with a third party developer of a |
| (f) | The Company and a syndicate of lenders previously entered into a $ |
| (g) | In September 2024, the Company entered into a $ |
The Company recognized $
F - 15
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
A roll forward of our allowance for credit losses for the years ended December 31, 2025 and 2024 is as follows:
Allowance for credit losses as of December 31, 2023 | $ | ( |
(Provision)/recovery for credit losses | ( | |
Write-offs charged against allowance | - | |
Allowance for credit losses as of December 31, 2024 | $ | ( |
(Provision)/recovery for credit losses | | |
Write-offs charged against allowance (1) | | |
Allowance for credit losses as of December 31, 2025 | $ | ( |
| (1) | See footnote (c) above for further information. |
Investment in Joint Ventures and Partnerships
We use the equity method to account for investments in joint ventures and partnerships that qualify as VIEs where we are not the primary beneficiary and other entities that we do not control or where we do not own a majority of the economic interest but have the ability to exercise significant influence over the operating and financial policies of the investee. Throughout these financial statements we use the term “joint venture” or “partnership” when referring to investments in entities in which we do not have a
In determining whether a joint venture or partnership is a VIE, the Company considers: the form of our ownership interest and legal structure; the size of our investment; the financing structure of the entity, including necessity of subordinated debt; estimates of future cash flows; ours and our partner’s ability to participate in the decision making related to acquisitions, disposition, budgeting and financing of the entity; obligation to absorb losses and preferential returns; nature of our partner’s primary operations; and the degree, if any, of disproportionality between the economic and voting interests of the entity. As of December 31, 2025, the Company did not have any investments in any joint ventures or partnerships that qualified as a VIE where we were determined to be the primary beneficiary.
We evaluate our investments in unconsolidated joint ventures for events or changes in circumstances that indicate there may be an other-than-temporary decline in value. We consider various factors to determine if a decrease in the value of the investment is other-than-temporary. These factors include, but are not limited to, age of the venture, our intent and ability to retain our investment in the entity, the financial condition and long-term prospects of the entity, the fair value of the property of the joint venture, and the relationships with the other joint venture partners and its lenders. The amount of loss recognized is the excess of the investment’s carrying amount over its estimated fair value. If we believe that the decline in fair value is temporary, no impairment is recorded. The aforementioned factors are taken into consideration as a whole by management in determining the valuation of our equity method investments. Should the actual results differ from management’s judgment, the valuation could be negatively affected and may result in a negative impact to our Consolidated Financial Statements.
Derivative Financial Instruments
The Company utilizes derivative financial instruments to manage interest rate risk and generally designates these financial instruments as cash flow hedges. Derivative financial instruments are recorded on our Consolidated Balance Sheets as either an asset or liability and measured quarterly at their fair value. The changes in fair value for cash flow hedges that are deemed effective are reflected in other comprehensive income/(loss) and for non-designated derivative financial instruments in earnings. The ineffective component of cash flow hedges, if any, is recorded in earnings.
Redeemable Noncontrolling Interests in the Operating Partnership and DownREIT Partnership
Interests in the Operating Partnership and the DownREIT Partnership held by limited partners are represented by OP Units and DownREIT Units, respectively. The income is allocated to holders of OP Units/DownREIT Units based
F - 16
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
upon net income available to common stockholders and the weighted average number of OP Units/DownREIT Units outstanding to total common shares plus OP Units/DownREIT Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the partnership agreements of the Operating Partnership and the DownREIT Partnership.
Limited partners of the Operating Partnership and the DownREIT Partnership have the right to require such partnership to redeem all or a portion of the OP Units/DownREIT Units held by the limited partner at a redemption price equal to and in the form of the Cash Amount (as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable), provided that such OP Units/DownREIT Units have been outstanding for at least
Income Taxes
Due to the structure of the Company as a REIT and the nature of the operations for the operating properties,
Income taxes for our TRS are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rate is recognized in earnings in the period of the enactment date. The Company’s deferred tax assets/(liabilities) are generally the result of differing depreciable lives on capitalized assets, temporary differences between book and tax basis of assets and liabilities and timing of expense recognition for certain accrued liabilities. As of December 31, 2025 and 2024, UDR’s net deferred tax asset/(liability) was $(
GAAP defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. GAAP also provides guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition.
The Company recognizes and evaluates its tax positions using a two-step process. First, UDR determines whether a tax position is more likely than not (greater than 50 percent probability) to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, the Company will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.
The Company invests in assets that qualify for federal investment tax credits (“ITC”) through our TRS. An ITC reduces federal income taxes payable when qualifying depreciable property is acquired. The ITC is determined as a percentage of cost of the assets. The Company accounts for ITCs under the deferral method, under which the tax benefit from the ITC is deferred and amortized as a tax benefit into Tax (provision)/benefit, net on the Consolidated Statements of Operations over the book life of the qualifying depreciable property. The ITCs are recorded in Accounts payable, accrued expenses and other liabilities on the Consolidated Balance Sheets.
UDR had
F - 17
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
applicable, UDR recognizes interest and/or penalties related to uncertain tax positions in Tax (provision)/benefit, net on the Consolidated Statements of Operations.
Principles of Consolidation
The Company accounts for subsidiary partnerships, joint ventures and other similar entities in which it holds an ownership interest in accordance with the consolidation guidance. The Company first evaluates whether each entity is a VIE. Under the VIE model, the Company consolidates an entity when it has control to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest.
Discontinued Operations
In accordance with GAAP, a discontinued operation represents (1) a component of an entity or group of components that has been disposed of or is classified as held for sale in a single transaction and represents a strategic shift that has or will have a major effect on an entity’s financial results, or (2) an acquired business that is classified as held for sale on the date of acquisition. A strategic shift could include a disposal of (1) a separate major line of business, (2) a separate major geographic area of operations, (3) a major equity method investment, or (4) other major parts of an entity.
We record sales of real estate that do not meet the definition of a discontinued operation in Gain/(loss) on sale of real estate owned on the Consolidated Statements of Operations.
Stock-Based Employee Compensation Plans
The Company measures the cost of employee services received in exchange for an award of an equity instrument based on the award’s fair value on the grant date and recognizes the cost as stock-based compensation expense over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period. For performance based awards, the Company remeasures the fair value based on the estimated achievement of the performance criteria each balance sheet date with adjustments made on a cumulative basis until the award is settled and the final compensation is known. Stock-based compensation expense is only recognized for performance based awards that we expect to vest, which we estimate based upon an assessment of the probability that the performance criteria will be achieved. Stock-based compensation expense associated with awards is updated for actual forfeitures. The fair value for market based awards issued by the Company is calculated utilizing a Monte Carlo simulation and the fair value for stock options issued by the Company is calculated utilizing the Black-Scholes-Merton formula. For further discussion, see Note 10, Employee Benefit Plans.
Advertising Costs
All advertising costs are expensed as incurred and reported on the Consolidated Statements of Operations within the line item Property operating and maintenance. During the years ended December 31, 2025, 2024, and 2023, total advertising expense was $
Cost of Raising Capital
Costs incurred in connection with the issuance of equity securities are deducted from stockholders’ equity. Costs incurred in connection with the issuance or renewal of debt are recorded based on the terms of the debt issuance or renewal. Accordingly, if the terms of the renewed or modified debt instrument are deemed to be substantially different (i.e. a 10 percent or greater difference in the cash flows between instruments), all unamortized financing costs associated with the extinguished debt are charged to earnings in the current period and certain costs of new debt issuances are capitalized and amortized over the term of the debt. When the cash flows are not substantially different, the lender costs associated with the renewal or modification are capitalized and amortized into interest expense over the remaining term of the related debt instrument and other related costs are expensed. The balance of any unamortized financing costs associated with retired debt is expensed upon retirement. Deferred financing costs for new debt instruments include fees and costs incurred by the Company to obtain financing. Deferred financing costs are generally amortized on a straight-line basis, which approximates the effective interest method, over a period not to exceed the term of the related debt.
F - 18
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Comprehensive Income/(Loss)
Comprehensive income/(loss), which is defined as the change in equity during each period from transactions and other events and circumstances from nonowner sources, including all changes in equity during a period except for those resulting from investments by or distributions to stockholders, is displayed in the accompanying Consolidated Statements of Comprehensive Income/(Loss). For the years ended December 31, 2025, 2024, and 2023, the Company’s other comprehensive income/(loss) consisted of the gain/(loss) (effective portion) on derivative instruments that are designated as and qualify as cash flow hedges, (gain)/loss on derivative instruments reclassified from other comprehensive income/(loss) into earnings, and the allocation of other comprehensive income/(loss) to noncontrolling interests. The (gain)/loss on derivative instruments reclassified from other comprehensive income/(loss) is included in Interest expense on the Consolidated Statements of Operations. See Note 14, Derivatives and Hedging Activity, for further discussion. The allocation of other comprehensive income/(loss) to redeemable noncontrolling interests during the years ended December 31, 2025, 2024, and 2023 was $(
Forward Sales Agreements
From time to time the Company utilizes forward sales agreements for the future issuance of its common stock. When the Company enters into a forward sales agreement, the contract requires the Company to sell its shares to a counterparty at a predetermined price at a future date. The net sales price and proceeds attained by the Company will be determined on the dates of settlement, with adjustments during the term of the contract for the Company’s anticipated dividends as well as for a daily interest factor that varies with changes in the federal funds rate. The Company generally has the ability to determine the dates and method of settlement (i.e., gross physical settlement, net share settlement or cash settlement), subject to certain conditions and the right of the counterparty to accelerate settlement under certain circumstances.
The Company accounts for the shares of common stock reserved for issuance upon settlement as equity in accordance with ASC 815-40, Contracts in Entity's Own Equity, which permits equity classification when a contract is considered indexed to the entity’s own stock and the contract requires or permits the issuing entity to settle the contract in shares (either physically or net in shares).
The guidance establishes a two-step process for evaluating whether an equity-linked financial instrument is considered indexed to the entity’s own stock, first, evaluating the instrument’s contingent exercise provisions and second, evaluating the instrument’s settlement provisions. When entering into forward sales agreements, we determined that (i) none of the agreement’s exercise contingencies are based on observable markets or indices besides those related to the market for our own stock price; and (ii) none of the settlement provisions preclude the agreements from being indexed to our own stock.
Before the issuance of shares of common stock, upon physical or net share settlement of the forward sales agreements, the Company expects that the shares issuable upon settlement of the forward sales agreements will be reflected in its diluted income/(loss) per share calculations using the treasury stock method. Under this method, the number of shares of common stock used in calculating diluted income/(loss) per share is deemed to be increased by the excess, if any, of the number of shares of common stock that would be issued upon full physical settlement of the forward sales agreements over the number of shares of common stock that could be purchased by the Company in the open market (based on the average market price during the period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). When the Company physically or net share settles any forward sales agreement, the delivery of shares of common stock would result in an increase in the number of weighted average common shares outstanding and dilution to basic income/(loss) per share. (See Note 8, Income/(Loss) per Share for further discussion).
Lease Receivables
During the years ended December 31, 2024 and 2023, the Company performed an analysis in accordance with the ASC 842, Leases, guidance to assess the collectibility of its operating lease receivables. This analysis included an assessment of collectibility of current and future rents and whether those lease payments were no longer probable of collection. In accordance with the leases guidance, if collection of lease payments is no longer deemed to be probable
F - 19
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
over the life of the lease contract, we recognize revenue only when cash is received, and all existing contractual operating lease receivables and straight-line lease receivables are reserved.
As of December 31, 2025 and 2024, the Company’s multifamily tenant lease receivables balance, net of its reserve, was approximately $
Use of Estimates
The preparation of these financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates.
Market Concentration Risk
The Company is subject to increased exposure from economic and other competitive factors specific to markets where the Company holds a significant percentage of the carrying value of its real estate portfolio. At December 31, 2025, the Company held greater than
3. REAL ESTATE OWNED
Real estate assets owned by the Company consist of income producing operating properties, properties under development, land held for future development, and held for disposition properties. As of December 31, 2025, the Company owned and consolidated
| December 31, | | December 31, | |||
2025 | 2024 | |||||
Land | $ | | $ | | ||
Depreciable property — held and used: |
|
| ||||
Land improvements |
| |
| | ||
Building, improvements, and furniture, fixtures and equipment |
| |
| | ||
Real estate intangible assets | | | ||||
Under development: |
| |
| | ||
Land and land improvements |
| |
| — | ||
Building, improvements, and furniture, fixtures and equipment |
| |
| — | ||
Real estate held for disposition: |
| |
| | ||
Land and land improvements |
| — |
| | ||
Building, improvements, and furniture, fixtures and equipment |
| — |
| | ||
Real estate intangible assets | — | | ||||
Real estate owned |
| |
| | ||
Accumulated depreciation |
| ( |
| ( | ||
Real estate owned, net | $ | | $ | | ||
Acquisitions
In May 2025, the Company acquired the developer’s equity interest in a
F - 20
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
assets owned by approximately $
In November 2025, the Company acquired a
In January 2024, the Company acquired its joint venture partner’s common equity interest in a
In February 2023, the Company took title to a
In August 2023, the Company acquired a portfolio of
Dispositions
In January 2025, the Company sold an operating community located in Brooklyn, New York with a total of
In January 2025, the Company sold an operating community located in Englewood, New Jersey with a total of
In December 2025, the Company contributed
In February 2024, the Company sold an operating community located in Arlington, Virginia with a total of
In January 2023, the Company sold the retail component of a development community located in Washington D.C. for gross proceeds of approximately $
F - 21
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
In June 2023, the Company contributed
In December 2023, the Company sold an operating community located in Hillsboro, Oregon with a total of
Developments
At December 31, 2025, the Company was developing
Other Activity
In connection with the acquisition of certain properties, the Company agreed to pay certain of the tax liabilities of certain contributors if the Company sells one or more of the properties contributed in a taxable transaction prior to the expiration of specified periods of time following the acquisition. The Company may, however, sell, without being required to pay any tax liabilities, any of such properties in a non-taxable transaction, including, but not limited to, a tax deferred Section 1031 exchange.
Further, the Company has agreed to maintain certain debt some of which may be guaranteed by certain contributors for specified periods of time following the acquisition. The Company, however, has the ability to refinance or repay guaranteed debt or to substitute new debt if the debt and the guaranty continue to satisfy certain conditions.
Amortization of Intangible Assets
The following table provides a summary of the aggregate amortization for the intangible assets acquired in the acquisition of real estate for each of the next five years and thereafter (in thousands):
Unamortized Balance as of December 31, 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||
Real estate intangible assets, net (a) | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
In-place lease intangible assets, net (b) | | | | | | | | ||||||||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
| (a) | Real estate intangible assets, net is recorded net of accumulated amortization of $ |
| (b) | In-place lease intangible assets, net is recorded net of accumulated amortization of $ |
F - 22
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
4. VARIABLE INTEREST ENTITIES
The Company has determined that the Operating Partnership and DownREIT Partnership are VIEs as the limited partners lack substantive kick-out rights and substantive participating rights. The Company has concluded that it is the primary beneficiary of, and therefore consolidates, the Operating Partnership and DownREIT Partnership based on its role as the sole general partner of the Operating Partnership and DownREIT Partnership. The Company’s role as community manager and its equity interests give us the power to direct the activities that most significantly impact the economic performance and the obligation to absorb potentially significant losses or the right to receive potentially significant benefits of the Operating Partnership and DownREIT Partnership.
5. JOINT VENTURES AND PARTNERSHIPS
UDR has entered into joint ventures and partnerships with unrelated third parties to own, operate, acquire, renovate, develop, redevelop, dispose of, and manage real estate assets that are either consolidated and included in Real estate owned on the Consolidated Balance Sheets or are accounted for under the equity method of accounting, and are included in Investment in and advances to unconsolidated joint ventures, net, on the Consolidated Balance Sheets. The Company consolidates the entities that we control as well as any variable interest entity where we are the primary beneficiary. Under the VIE model, the Company consolidates an entity when it has control to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest.
UDR’s joint ventures and partnerships are funded with a combination of debt and equity. Our losses are typically limited to our investment and except as noted below, the Company does not guarantee any debt, capital payout or other obligations associated with our joint ventures and partnerships.
Unconsolidated joint ventures and partnerships
The Company recognizes earnings or losses from our investments in unconsolidated joint ventures and partnerships consisting of our proportionate share of the net earnings or losses of the joint ventures and partnerships. In addition, we may earn fees for providing management services for the communities held by the unconsolidated joint ventures and partnerships.
F - 23
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
The following table summarizes the Company’s investment in and advances to unconsolidated joint ventures and partnerships, net, which are accounted for under the equity method of accounting as of December 31, 2025 and 2024 (dollars in thousands):
Number of | Number of | ||||||||||||||||||||||||
Operating | Apartment | UDR's Weighted Average |
| ||||||||||||||||||||||
Communities | Homes | Ownership Interest | Investment at | Income/(loss) from investments | |||||||||||||||||||||
| December 31, | | December 31, | December 31, | | December 31, |
| | December 31, | | December 31, | Year Ended December 31, | |||||||||||||
Joint Ventures | | 2025 | | 2025 | 2025 | | 2024 |
| | 2025 | | 2024 | 2025 | | 2024 | | 2023 | ||||||||
Operating: | | | | |
| | | ||||||||||||||||||
UDR/MetLife (a) | | | % | | % | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||||
UDR/LaSalle (b) | | | % | | % | | | ( | ( | ( | |||||||||||||||
Total Joint Ventures |
| | |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | ||||||||||
Number of | Apartment | ||||||||||||||||||||||||
Commitments | Homes | Weighted | Investment at | Income/(loss) from investments | |||||||||||||||||||||
Debt and Preferred Equity Program | | December 31, | December 31, | Average | | UDR | | December 31, | | December 31, | Year Ended December 31, | ||||||||||||||
and Real Estate Technology Investments (c) | | 2025 | 2025 | Rate | | Commitment (c) | | 2025 | | 2024 | | 2025 | | 2024 | | 2023 | |||||||||
Preferred equity investments: |
| |
| |
|
| |
| | | | ||||||||||||||
Operating | | | % | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||
Real estate technology and sustainability investments: | |||||||||||||||||||||||||
Real estate technology and sustainability investments | N/A | N/A | N/A | $ | | | | | | | |||||||||||||||
Total Debt and Preferred Equity Program and Real Estate Technology and Sustainability Investments | | | | | | ||||||||||||||||||||
Sold unconsolidated joint ventures and partnerships | — | | | | ( | ||||||||||||||||||||
Total investment in and advances to unconsolidated joint ventures, net (a) | $ | | $ | | $ | | $ | | $ | | |||||||||||||||
| (a) | As of December 31, 2025 and 2024, the Company’s negative investment in one UDR/MetLife community of $ |
| (b) | In December 2025, the Company contributed |
| (c) | The Debt and Preferred Equity Program is the program through which the Company makes investments, including preferred equity investments, first mortgage loans, mezzanine loans (loans are recorded in Notes receivable, net on the Consolidated Balance Sheets) or other structured investments that may receive a fixed yield on the investment and may include provisions pursuant to which the Company participates in the increase in value of the property upon monetization of the applicable property. The Company’s preferred equity investments include |
In April 2025, the Company entered into a joint venture agreement with an unaffiliated joint venture partner in an operating community with a total of
In June 2025, the Company received full repayment of its approximately $
In July 2025, the Company entered into a joint venture agreement with an unaffiliated joint venture partner in an operating community with a total of
F - 24
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
venture and accounts for its investments under the equity method of accounting.
In August 2025, the Company entered into a joint venture agreement with an unaffiliated joint venture partner in an operating community with a total of
In September 2025, the Company received full repayment of its approximately $
In December 2025, the Company received a $
In January 2026, the Company received a $
| (d) | Represents UDR’s maximum funding commitment only and therefore excludes other activity such as income from investments. |
As of December 31, 2025 and 2024, the Company had deferred fees of $
The Company recognized management fees of $
The Company may, in the future, make additional capital contributions to certain of our joint ventures and partnerships should additional capital contributions be necessary to fund acquisitions or operations.
We consider various factors to determine if a decrease in the value of our Investment in and advances to unconsolidated joint ventures, net is other-than-temporary. These factors include, but are not limited to, age of the venture, our intent and ability to retain our investment in the entity, the financial condition and long-term prospects of the entity, and the relationships with the other joint venture partners and its lenders. Based on the significance of the unobservable inputs, we classify these fair value measurements within Level 3 of the valuation hierarchy. The Company did not incur any other-than-temporary impairments in the value of its investments in unconsolidated joint ventures during the years ended December 31, 2025 and 2023. For the year ended December 31, 2024, the Company recorded an $
F - 25
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Condensed summary financial information relating to the unconsolidated joint ventures’ and partnerships’ operations (not just our proportionate share) is presented below for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):
| Debt and Preferred | |||||||||||
Equity Program |
| |||||||||||
As of and For the | UDR/ | UDR/ | and Other |
| ||||||||
Year Ended December 31, 2025 | MetLife | LaSalle | Investments | Total | ||||||||
Condensed Statements of Operations: | | | ||||||||||
Total revenues | $ | | $ | | $ | |
| $ | | |||
Property operating expenses |
| |
| |
| |
|
| | |||
Real estate depreciation and amortization |
| |
| |
| |
|
| | |||
Operating income/(loss) |
| |
| ( |
| |
| | ||||
Interest expense |
| ( |
| ( |
| ( |
| ( | ||||
Other income/(loss) |
| — |
| — |
| |
| | ||||
Net unrealized/realized gain/(loss) on held investments | — | — | | | ||||||||
Net income/(loss) | $ | ( | $ | ( | $ | ( |
| $ | ( | |||
Condensed Balance Sheets: |
| |
|
| |
| | |||||
Total real estate, net | $ | | $ | | $ | | $ | | ||||
Investments, at fair value | — | — | | | ||||||||
Cash and cash equivalents |
| |
| |
| |
| | ||||
Other assets |
| |
| |
| |
| | ||||
Total assets |
| |
| |
| |
| | ||||
Third party debt, net |
| |
| |
| |
| | ||||
Accounts payable and accrued liabilities |
| |
| |
| |
| | ||||
Total liabilities |
| |
| |
| |
| | ||||
Total equity | $ | | $ | | $ | |
| $ | | |||
Debt and Preferred | ||||||||||||
Equity Program |
| |||||||||||
As of and For the | UDR/ | UDR/ | and Other |
| ||||||||
Year Ended December 31, 2024 | MetLife | LaSalle | Investments | Total | ||||||||
Condensed Statements of Operations: | | | ||||||||||
Total revenues | $ | | $ | | $ | |
| $ | | |||
Property operating expenses |
| |
| |
| |
|
| | |||
Real estate depreciation and amortization |
| |
| |
| |
|
| | |||
Operating income/(loss) |
| |
| ( |
| |
| | ||||
Interest expense |
| ( |
| ( |
| ( |
| ( | ||||
Other income/(loss) |
| — |
| — |
| ( |
| ( | ||||
Net unrealized/realized gain/(loss) on held investments | — | — | | | ||||||||
Net income/(loss) | $ | ( | $ | ( | $ | | $ | ( | ||||
Condensed Balance Sheets: |
| |
| |
| | ||||||
Total real estate, net | $ | | $ | | $ | | $ | | ||||
Investments, at fair value | — | — | | | ||||||||
Cash and cash equivalents |
| |
| |
| |
| | ||||
Other assets |
| |
| |
| |
| | ||||
Total assets |
| |
| |
| |
| | ||||
Third party debt, net |
| |
| |
| |
| | ||||
Accounts payable and accrued liabilities |
| |
| |
| |
| | ||||
Total liabilities |
| |
| |
| |
| | ||||
Total equity | $ | | $ | |
| $ | | $ | | |||
F - 26
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
| Debt and Preferred | |||||||||||
Equity Program | ||||||||||||
For the | UDR/ | UDR/ | and Other |
| ||||||||
Year Ended December 31, 2023 | MetLife | LaSalle | Investments | Total | ||||||||
Condensed Statements of Operations: | | | ||||||||||
Total revenues | $ | | $ | | $ | | $ | | ||||
Property operating expenses |
| |
| |
| |
| | ||||
Real estate depreciation and amortization |
| |
| |
| |
| | ||||
Operating income/(loss) |
| |
| ( |
| |
| | ||||
Interest expense |
| ( |
| ( |
| ( |
| ( | ||||
Other income/(loss) | — |
| — |
| |
| | |||||
Net unrealized/realized gain/(loss) on held investments | — | — | | | ||||||||
Net income/(loss) | $ | ( | $ | ( | $ | ( | $ | ( | ||||
6. LEASES
Lessee - Ground Leases
UDR has
As of December 31, 2025 and 2024, the Operating lease right-of-use assets were $
As the discount rate implicit in the leases was not readily determinable, we determined the discount rate for these leases utilizing the Company’s incremental borrowing rate at a portfolio level, adjusted for the remaining lease term, and the form of underlying collateral.
The weighted average remaining lease term for these leases was
F - 27
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Future minimum lease payments and total operating lease liabilities from our ground leases as of December 31, 2025 are as follows (dollars in thousands):
Ground Leases | |||
2026 | $ | | |
2027 | | ||
2028 | | ||
2029 | | ||
2030 | | ||
Thereafter | | ||
Total future minimum lease payments (undiscounted) | | ||
Difference between future undiscounted cash flows and discounted cash flows | ( | ||
Total operating lease liabilities (discounted) | $ | | |
For purposes of recognizing our ground lease contracts, the Company uses the minimum lease payments, if stated in the agreement. For ground lease agreements where there is a rent reset provision based on a change in an index or a rate (i.e., changes in fair market rental rates or changes in the consumer price index) but that does not include a specified minimum lease payment, the Company uses the current rent over the remainder of the lease term. If there is a contingency upon which some or all of the variable lease payments that will be paid over the remainder of the lease term are based, which is resolved such that those payments now meet the definition of lease payments, the Company will remeasure the right-of-use asset and lease liability on the reset date.
The components of operating lease expenses were as follows (dollars in thousands):
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Lease expense: | |||||||||
Contractual lease expense | $ | $ | $ | ||||||
Variable lease expense (a) | |||||||||
Total operating lease expense (b)(c) | $ | $ | $ | ||||||
| (a) | Variable lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of a community’s revenue. |
| (b) | Lease expense is reported within the line item Other operating expenses on the Consolidated Statements of Operations. |
| (c) | For the year ended December 31, 2025, Operating lease right-of-use assets and Operating lease liabilities amortized by $ |
Lessor - Apartment Home, Retail and Commercial Space Leases
UDR’s communities and retail and commercial space are leased to tenants under operating leases. As of December 31, 2025, our apartment home leases generally have initial terms of
F - 28
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Future minimum lease payments from our retail and commercial leases as of December 31, 2025 are as follows (dollars in thousands):
Retail and Commercial Leases | |||
2026 | $ | | |
2027 | | ||
2028 | | ||
2029 | | ||
2030 | | ||
Thereafter | | ||
Total future minimum lease payments (a) | $ | | |
| (a) | We have excluded our apartment home leases from this table as our apartment home leases generally have initial terms of 12 months or less. |
Certain of our leases with retail and commercial tenants provide for the payment by the lessee of additional variable rent based on a percentage of the tenant’s revenue. The amounts shown in the table above do not include these variable percentage rents. The Company recorded variable percentage rents of $
F - 29
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
7. SECURED AND UNSECURED DEBT, NET
The following is a summary of our secured and unsecured debt at December 31, 2025 and 2024 (dollars in thousands):
Principal Outstanding | As of December 31, 2025 | |||||||||||
Weighted | Weighted | |||||||||||
Average | Average | Number of | ||||||||||
December 31, | December 31, | Interest | Years to | Communities | ||||||||
| 2025 | | 2024 | | Rate | | Maturity | | Encumbered | |||
Secured Debt: | | | | | | |||||||
Fixed Rate Debt |
| |
| |
| |
| |
| | ||
Mortgage notes payable (a) | $ | | $ | |
| | % |
| | |||
Deferred financing costs and other non-cash adjustments (b) |
| ( |
| ( |
| |
| |
| | ||
Total fixed rate secured debt, net |
| |
| |
| | % |
| | |||
Variable Rate Debt |
| |
| |
| |
| |
| | ||
Tax-exempt secured notes payable (c) |
| |
| |
| | % |
| | |||
Deferred financing costs |
| ( |
| ( |
| |
| |
| | ||
Total variable rate secured debt, net |
| |
| |
| | % |
| | |||
Total Secured Debt, net |
| |
| |
| | % |
| | |||
Unsecured Debt: |
| |
| |
| |
| |
| | ||
Variable Rate Debt |
| |
| |
| |
| |
| | ||
Borrowings outstanding under unsecured credit facility due August 2028 (d) (l) |
| — |
| — |
| — | % |
| | |||
Borrowings outstanding under unsecured commercial paper program due January 2026 (e) (l) | | | | % | ||||||||
Borrowings outstanding under unsecured working capital credit facility due January 2027 (f) |
| |
| |
| | % |
| | |||
Term Loan due January 2029 (d) (l) |
| |
| |
| | % |
| | |||
Fixed Rate Debt |
|
| |
| |
| |
| | |||
Term Loan due January 2029 (d) (l) | |
| |
| | % | ||||||
| |
| |
| | % |
| | ||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
| | | % | |||||||||
Deferred financing costs |
| ( |
| ( |
| |
| |
| | ||
Total Unsecured Debt, net |
| |
| |
| | % |
| | |||
Total Debt, net | $ | | $ | |
| | % |
| | |||
For purposes of classification of the above table, variable rate debt with a derivative financial instrument designated as a cash flow hedge is deemed as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument.
F - 30
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Our secured debt instruments generally feature either monthly interest and principal or monthly interest-only payments with balloon payments due at maturity. As of December 31, 2025, secured debt encumbered approximately
(a) At December 31, 2025, fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from June 2026 through February 2031 and carry interest rates ranging from
In July 2025, the Company repaid a $
In November 2025, the Company repaid a $
The Company will from time to time acquire properties subject to fixed rate debt instruments. In those situations, the Company records the debt at its estimated fair value and amortizes any difference between the fair value and par value to interest expense over the term of the underlying debt instrument.
(b) During the years ended December 31, 2025, 2024, and 2023, the Company had $
(c) The variable rate mortgage note payable secures a tax-exempt housing bond issue that matures in March 2032. Interest on this note is payable in monthly installments. As of December 31, 2025, the variable interest rate on the mortgage note was
(d) The Company has a $
Based on the Company’s current credit rating, the Revolving Credit Facility has an interest rate equal to plus a margin of
In September 2025, the Company entered into
The Credit Agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Credit Agreement also includes customary events of default, in certain cases subject to customary periods to cure. The occurrence of an event of default, following the applicable cure period, would permit the
F - 31
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
lenders to, among other things, declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the Credit Agreement to be immediately due and payable.
The following is a summary of short-term bank borrowings under the Revolving Credit Facility at December 31, 2025 and 2024 (dollars in thousands):
| December 31, | | December 31, | ||||
| 2025 |
| 2024 | ||||
Total revolving credit facility | $ | | $ | | |||
Borrowings outstanding at end of period (1) |
| — |
| — | |||
Weighted average daily borrowings during the period ended |
| — |
| — | |||
Maximum daily borrowings during the period ended |
| — |
| — | |||
Weighted average interest rate during the period ended |
| — | % |
| — | % | |
Interest rate at end of the period |
| — | % |
| — | % | |
| (1) | Excludes $ |
(e) The Company has an unsecured commercial paper program. Under the terms of the program, the Company may issue unsecured commercial paper up to a maximum aggregate amount outstanding of $
The following is a summary of short-term bank borrowings under the unsecured commercial paper program at December 31, 2025 and 2024 (dollars in thousands):
| December 31, | | December 31, |
| |||
2025 | 2024 |
| |||||
Total unsecured commercial paper program |
| $ | | $ | | ||
Borrowings outstanding at end of period |
| |
| | |||
Weighted average daily borrowings during the period ended |
| |
| | |||
Maximum daily borrowings during the period ended |
| |
| | |||
Weighted average interest rate during the period ended |
| | % |
| | % | |
Interest rate at end of the period |
| | % |
| | % | |
(f) The Company has a working capital credit facility, which provides for a $
The following is a summary of short-term bank borrowings under the Working Capital Credit Facility at December 31, 2025 and 2024 (dollars in thousands):
| December 31, | | December 31, |
| |||
2025 | 2024 |
| |||||
Total working capital credit facility | $ | | $ | | |||
Borrowings outstanding at end of period |
| |
| | |||
Weighted average daily borrowings during the period ended |
| |
| | |||
Maximum daily borrowings during the period ended |
| |
| | |||
Weighted average interest rate during the period ended |
| | % |
| | % | |
Interest rate at end of the period |
| | % |
| | % | |
F - 32
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
(g) The Company previously entered into forward starting interest rate swaps to hedge against interest rate risk on $
(h) The Company previously entered into forward starting interest rate swaps and treasury lock to hedge against the interest rate risk of this debt. The all-in weighted average interest rate, inclusive of the impact of the forward starting swaps and treasury locks, was
The aggregate maturities, including amortizing principal payments on secured and unsecured debt, of total debt for the next ten years subsequent to December 31, 2025 are as follows (dollars in thousands):
| Total | | Total | | Total | ||||
Year | Secured Debt | Unsecured Debt | Debt | ||||||
2026 | $ | | $ | | $ | | |||
2027 |
| |
| |
| | |||
2028 |
| |
| |
| | |||
2029 |
| |
| |
| | |||
2030 |
| |
| |
| | |||
2031 |
| |
| |
| | |||
2032 |
| |
| |
| | |||
2033 |
| — |
| |
| | |||
2034 |
| — |
| |
| | |||
2035 |
| — |
| — |
| — | |||
Thereafter |
| — |
| — |
| — | |||
Subtotal |
| |
| |
| | |||
Non-cash (a) |
| ( |
| ( |
| ( | |||
Total | $ | | $ | | $ | | |||
| (a) | Includes the unamortized balance of fair market value adjustments, premiums/discounts, and deferred financing costs. For the years ended December 31, 2025 and 2024, the Company amortized $ |
We were in compliance with the covenants of our debt instruments at December 31, 2025.
F - 33
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
8. INCOME/(LOSS) PER SHARE
The following table sets forth the computation of basic and diluted income/(loss) per share for the periods presented (dollars and shares in thousands, except per share data):
Year Ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
Numerator for income/(loss) per share: | | | |||||||
Net income/(loss) | $ | | $ | | $ | | |||
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| ( |
| ( |
| ( | |||
Net (income)/loss attributable to noncontrolling interests |
| ( |
| ( |
| ( | |||
Net income/(loss) attributable to UDR, Inc. |
| |
| |
| | |||
Distributions to preferred stockholders — Series E (Convertible) |
| ( |
| ( |
| ( | |||
Income/(loss) attributable to common stockholders - basic and diluted | $ | | $ | | $ | | |||
Denominator for income/(loss) per share: |
| |
| |
| | |||
Weighted average common shares outstanding |
| |
| |
| | |||
Unvested restricted stock awards |
| ( |
| ( |
| ( | |||
Denominator for basic income/(loss) per share |
| |
| |
| | |||
Incremental shares issuable from assumed conversion of unvested LTIP Units, performance units, stock options and unvested restricted stock |
| |
| |
| | |||
Denominator for diluted income/(loss) per share |
| |
| |
| | |||
Income/(loss) per weighted average common share: |
| |
| |
| | |||
Basic | $ | | $ | | $ | | |||
Diluted | $ | | $ | | $ | | |||
Basic income/(loss) per common share is computed based upon the weighted average number of common shares outstanding. Diluted income/(loss) per common share is computed based upon the weighted average number of common shares outstanding plus the following items if dilutive in the current period: the common shares issuable from the assumed conversion of the OP Units and DownREIT Units, convertible preferred stock, stock options, unvested long-term incentive plan units (“LTIP Units”), performance units, unvested restricted stock and continuous equity program forward sales agreements. Only those instruments having a dilutive impact on our basic income/(loss) per share are included in diluted income/(loss) per share during the periods. For the years ended December 31, 2025, 2024, and 2023, the effect of the conversion of the OP Units, DownREIT Units and the Company’s Series E preferred stock was not dilutive and therefore not included in the above calculation.
In July 2021, the Company entered into an ATM sales agreement under which the Company may offer and sell up to
In connection with any forward sales agreement under the Company’s ATM program, the relevant forward purchasers will borrow from third parties and, through the relevant sales agent, acting in its role as forward seller, sell a number of shares of the Company’s common stock equal to the number of shares underlying the agreement. The Company does not initially receive any proceeds from any sale of borrowed shares by the forward seller.
The Company generally has the ability to determine the dates and method of settlement (i.e., gross physical settlement, net share settlement or cash settlement), subject to certain conditions and the right of the counterparty to accelerate settlement under certain circumstances. The Company currently expects to fully physically settle each forward sales agreement with the relevant forward purchaser on one or more dates specified by the Company on or prior to the maturity date of that particular forward sales agreement, in which case the Company expects to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward sales agreement multiplied
F - 34
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
by the relevant forward sale price. However, subject to certain exceptions, the Company may also elect, in its discretion, to cash settle or net share settle a particular forward sales agreement, in which case the Company may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or shares of UDR common stock (in the case of net share settlement) to the relevant forward purchaser.
During the years ended December 31, 2025 and 2024, the Company did not enter into any forward purchase agreements under its continuous equity program.
During the year ended December 31, 2025, the Company repurchased
The following table sets forth the additional shares of common stock outstanding by equity instrument if converted to common stock for each of the years ended December 31, 2025, 2024, and 2023 (in thousands):
Year Ended December 31, | ||||||
2025 | 2024 | 2023 | ||||
OP/DownREIT Units | | | | | | |
Convertible preferred stock |
| |
| |
| |
Unvested LTIP Units, performance units, stock options, and unvested restricted stock |
| |
| |
| |
9. STOCKHOLDERS’ EQUITY
UDR has an effective registration statement that allows the Company to sell an undetermined number of debt and equity securities as defined in the prospectus. The Company’s authorized capital was
F - 35
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
The following table presents the changes in the Company’s issued and outstanding shares of common and preferred stock for the years ended December 31, 2025, 2024 and 2023:
Common | Preferred Stock | |||||
Stock | Series E | Series F | ||||
Balance at December 31, 2022 | | | | | | |
Issuance/(forfeiture) of common and restricted shares, net |
| |
| — |
| — |
Repurchase of common shares | ( | — | — | |||
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership |
| |
| — |
| — |
Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT Partnership | |
| — |
| — | |
Forfeiture of Series F shares | — |
| — |
| ( | |
Balance at December 31, 2023 |
| |
| |
| |
Issuance/(forfeiture) of common and restricted shares, net |
| |
| — |
| — |
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership |
| |
| — |
| — |
Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT Partnership |
| |
| — |
| — |
Conversion of Series E Cumulative Convertible shares | | ( | — | |||
Forfeiture of Series F shares |
| — |
| — |
| ( |
Balance at December 31, 2024 |
| |
| |
| |
Issuance/(forfeiture) of common and restricted shares, net |
| |
| — |
| — |
Repurchase of common shares | ( | — | — | |||
Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership |
| |
| — |
| — |
Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT Partnership |
| |
| — |
| — |
Forfeiture of Series F shares |
| — |
| — |
| ( |
Balance at December 31, 2025 |
| |
| |
| |
Common Stock
In July 2021, the Company entered into an ATM sales agreement under which the Company may offer and sell up to
During the year ended December 31, 2025, the Company entered into the following equity transactions for our common stock:
| ● | Repurchased |
| ● | Issued |
| ● | Issued |
Distributions are subject to the approval of the Board of Directors and are dependent upon our strategy, financial condition and operating results. UDR’s common distributions for the years ended December 31, 2025, 2024, and 2023 totaled $
F - 36
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Preferred Stock
The Series E Cumulative Convertible Preferred Stock (“Series E”) has
Distributions declared on the Series E for the years ended December 31, 2025, 2024, and 2023 were $
UDR is authorized to issue up to
At December 31, 2025 and 2024, a total of
Distribution Reinvestment and Stock Purchase Plan
UDR’s Distribution Reinvestment and Stock Purchase Plan allows common and preferred stockholders the opportunity to purchase, through the reinvestment of cash dividends and by making additional cash payments, additional shares of UDR’s common stock. During the year ended December 31, 2025, all shares issued with respect to the plan were acquired through the open market.
10. EMPLOYEE BENEFIT PLANS
In May 2022, the stockholders of UDR approved an amendment and restatement to the LTIP. The LTIP authorizes the granting of awards which may take the form of options to purchase shares of common stock, stock appreciation rights, restricted stock, dividend equivalents, partnership interests in the Operating Partnership designated as LTIP Units, performance partnership interests in the Operating Partnership designated as Performance Units, other stock-based awards, and any other right or interest relating to common stock or cash incentive awards to Company directors, employees and outside trustees to promote the success of the Company by linking individual’s compensation via grants of share based payment.
LTIP Units and Performance Units are designed to qualify as “profits interests” in the Operating Partnership for federal income tax purposes, meaning that initially they are not economically equivalent in value to a share of our common stock, but over time can increase in value to one-for-one parity with common stock by operation of special tax rules applicable to profits interests. Until and unless such parity is reached, the value that an executive will realize for a given number of vested LTIP Units or Performance Units is less than the value of an equal number of shares of our common stock.
As of December 31, 2025,
The LTIP contains double trigger change of control provisions allowing for the vesting of an award when certain conditions are met upon qualifying events such as a merger where UDR is not the surviving entity. Upon the
F - 37
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
death or disability of an award recipient, all outstanding instruments will vest and all restrictions will lapse. The LTIP specifies that in the event of a capital transaction, which includes but is not limited to stock dividends, stock splits, extraordinary cash dividends and spin-offs, the number of shares available for grant in totality or to a single individual is to be adjusted proportionately. The LTIP specifies that when a capital transaction occurs that would dilute the holder of the stock award, prior grants are to be adjusted such that the recipient is no worse as a result of the capital transaction.
A summary of UDR’s Performance Units, LTIP Units, restricted stock and option activities during the years ended December 31, 2025 and 2024 are as follows (shares in thousands):
Unvested Performance Units Outstanding | Performance Units Exercisable | Unvested Stock Options Outstanding | Stock Options Exercisable | LTIP Units | Restricted Stock | ||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | Weighted | Average Fair | ||||||||||||||||||||||||
Average | Average | Average | Average | Average Fair | Value Per | ||||||||||||||||||||||||
Number of | Exercise | Number of | Exercise | Number of | Exercise | Number of | Exercise | Number of | Value Per | Number | Restricted | ||||||||||||||||||
Units | Price | Units | Price | Options | Price | Options | Price | LTIP Units | LTIP Unit | of shares | Stock | ||||||||||||||||||
Balance, December 31, 2023 | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |||||||||||
Granted | |
| | — |
| — | |
| | — |
| — | |
| | |
| | |||||||||||
Exercised | — |
| — | — |
| — | — |
| — | — |
| — | — |
| — | — |
| — | |||||||||||
Vested | ( |
| | |
| | — |
| — | — |
| — | ( |
| | ( |
| | |||||||||||
Forfeited | ( |
| | — |
| — | ( |
| | — |
| — | ( |
| | ( |
| | |||||||||||
Balance, December 31, 2024 | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |||||||||||
Granted | |
| | — |
| — | |
| | — |
| — | |
| | |
| | |||||||||||
Exercised | — |
| — | — |
| — | — |
| — | — |
| — | — |
| — | — |
| — | |||||||||||
Vested | ( |
| | |
| | ( |
| | |
| | ( |
| | ( |
| | |||||||||||
Forfeited | ( |
| | — |
| — | ( |
| | — |
| — | ( |
| | ( |
| | |||||||||||
Balance, December 31, 2025 | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |||||||||||
As of December 31, 2025, the Company had granted
Stock Option Awards
UDR has granted stock options to our employees and Company directors. Subject to certain conditions, each stock option is exercisable into
The total remaining compensation cost on unvested stock options was $
During the year ended December 31, 2025,
The weighted average remaining contractual life on all stock options outstanding as of December 31, 2025 is
During the years ended December 31, 2025, 2024 and 2023, we recognized less than $
Restricted Stock Awards
Restricted stock awards are granted to our employees and Company directors. The restricted stock awards are valued based upon the closing sales price of UDR common stock on the date of grant. Compensation expense is recorded
F - 38
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
under either the straight-line method or graded vesting method over the vesting period, which is generally to
Unit Awards
Unit awards are granted to our employees and Company directors. Compensation expense is recorded under either the straight-line method or graded vesting method over the vesting period, which is generally to
Performance Unit Awards
UDR has granted Performance Units to our employees and Company directors. Subject to certain conditions, each Performance Unit is exercisable into
The total remaining compensation cost on unvested Performance Units was $
During the year ended December 31, 2025,
The weighted average remaining contractual life on all Performance Units outstanding as of December 31, 2025 is
During the years ended December 31, 2025, 2024 and 2023, we recognized $
Short-Term Incentive Compensation
In January 2025, certain officers of the Company were awarded either a restricted stock grant, an STI Unit grant, or an STI Performance Unit grant, or a combination of all three, under the 2025 Long-Term Incentive Program (“2025 LTI”). All three of the awards represent short-term incentive compensation for the officers. The restricted stock award was valued for compensation expense purposes based upon the closing sales price of UDR common stock on the date of grant in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”), or $
F - 39
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
In January 2024, certain officers of the Company were awarded either a restricted stock grant, an STI Unit grant, or an STI Performance Unit grant, or a combination of all three, under the 2024 Long-Term Incentive Program (“2024 LTI”). All three of the awards represent short-term incentive compensation for the officers. The restricted stock award was valued for compensation expense purposes based upon the closing sales price of UDR common stock on the date of grant in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”), or $
In January 2023, certain officers of the Company were awarded either a restricted stock grant, an STI Unit grant, or an STI Performance Unit grant, or a combination of all three, under the 2023 Long-Term Incentive Program (“2023 LTI”). All three of the awards represent short-term incentive compensation for the officers. The restricted stock award was valued for compensation expense purposes based upon the closing sales price of UDR common stock on the date of grant in accordance with ASC 718, or $
Long-Term Incentive Compensation
In January 2025, certain officers of the Company were awarded either a restricted stock grant, an LTIP Unit grant, or an LTIP Performance Unit grant, or a combination of all three, under the 2025 LTI. For all three restricted stock grants, LTIP Unit grants and Performance Unit grants,
F - 40
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
compensation expense purposes at $
In January 2024, certain officers of the Company were awarded either a restricted stock grant, an LTIP Unit grant, or an LTIP Performance Unit grant, or a combination of all three, under the 2024 LTI. For all three restricted stock grants, LTIP Unit grants and Performance Unit grants,
In January 2023, certain officers of the Company were awarded either a restricted stock grant, an LTIP Unit grant, or an LTIP Performance Unit grant, or a combination of all three, under the 2023 LTI. For all three restricted stock
F - 41
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
grants, LTIP Unit grants and Performance Unit grants,
Profit Sharing Plan
Our profit sharing plan (the “Plan”) is a defined contribution plan covering all eligible full-time employees. Under the Plan, UDR makes discretionary profit sharing and matching contributions to the Plan as determined by the Compensation Committee of the Board of Directors. Aggregate provisions for contributions, both matching and discretionary, which are included in General and administrative on UDR’s Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023, were $
11. INCOME TAXES
For 2025, 2024, and 2023, UDR believes that we have complied with the REIT requirements specified in the Code. As such, the REIT would generally not be subject to federal income taxes.
For income tax purposes, distributions paid to common stockholders may consist of ordinary income, qualified dividends, capital gains, unrecaptured section 1250 gains, return of capital, or a combination thereof. Distributions that exceed our current and accumulated earnings and profits constitute a return of capital rather than taxable income and reduce the stockholder’s basis in their common shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common shares, it generally will be treated as a gain
F - 42
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
from the sale or exchange of that stockholder’s common shares. Taxable distributions paid per common share were taxable as follows for the years ended December 31, 2025, 2024 and 2023 (unaudited):
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Ordinary income | | $ | | | $ | | | $ | |
Qualified ordinary income |
| |
| |
| | |||
Long-term capital gain |
| |
| |
| | |||
Unrecaptured section 1250 gain |
| |
| |
| | |||
Total | $ | | $ | | $ | | |||
We have a TRS that is subject to federal and state income taxes. A TRS is a C-corporation which has not elected REIT status and as such is subject to United States federal and state income tax.
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Income tax (benefit)/provision | | | | | | | |||
Current |
| |
| |
| | |||
Federal | $ | | $ | | $ | | |||
State |
| |
| |
| | |||
Total current |
| |
| |
| | |||
Deferred | |||||||||
Federal |
| ( |
| ( |
| | |||
State |
| ( |
| ( |
| | |||
Investment tax credit | ( | ( | ( | ||||||
Total deferred |
| ( |
| ( |
| | |||
Total income tax (benefit)/provision | $ | | $ | | $ | | |||
Deferred income taxes are provided for the change in temporary differences between the basis of certain assets and liabilities for financial reporting purposes and income tax reporting purposes. The expected future tax rates are based upon enacted tax laws.
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Deferred tax assets: | | | | | | | |||
Federal and state tax attributes | $ | | $ | | $ | | |||
Other |
| |
| |
| | |||
Total deferred tax assets |
| |
| |
| | |||
Valuation allowance |
| ( |
| ( |
| ( | |||
Net deferred tax assets |
| |
| |
| | |||
Deferred tax liabilities: |
| |
| |
| | |||
Book/tax depreciation and basis | ( | ( | ( | ||||||
Other |
| ( |
| ( |
| ( | |||
Total deferred tax liabilities |
| ( |
| ( |
| ( | |||
Net deferred tax assets/(liabilities) | $ | ( | $ | ( | $ | ( | |||
F - 43
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Income tax provision/(benefit), net from our TRS differed from the amounts computed by applying the U.S. statutory rate of
Year Ended December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Income tax provision/(benefit) | | | | | | | |||
U.S. federal income tax provision/(benefit) | $ | ( | $ | | $ | | |||
State income tax provision |
| |
| |
| | |||
Solar credit amortization | ( | ( | ( | ||||||
ITC basis adjustment |
| — |
| ( |
| — | |||
Valuation allowance |
| — |
| — |
| ( | |||
Total income tax provision/(benefit) | $ | | $ | | $ | | |||
The Company’s Tax benefit/(provision), net was $(
The Company evaluates our tax position using a two-step process. First, we determine whether a tax position is more likely than not (greater than 50 percent probability) to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company will then determine the amount of benefit to recognize and record the amount of the benefit that is more likely than not to be realized upon ultimate settlement. As of December 31, 2025 and 2024, UDR has
The Company files income tax returns in federal and various state and local jurisdictions. The tax years 2022 through 2025 remain open to examination by the major taxing jurisdictions to which the Company is subject.
12. NONCONTROLLING INTERESTS
Redeemable Noncontrolling Interests in the Operating Partnership and DownREIT Partnership
Interests in the Operating Partnership and the DownREIT Partnership held by limited partners are represented by OP Units and DownREIT Units, respectively. The income is allocated to holders of OP Units/DownREIT Units based upon net income attributable to common stockholders and the weighted average number of OP Units/DownREIT Units outstanding to total common shares plus OP Units/DownREIT Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the partnership agreements of the Operating Partnership and the DownREIT Partnership.
Limited partners of the Operating Partnership and the DownREIT Partnership have the right to require such partnership to redeem all or a portion of the OP Units/DownREIT Units held by the limited partner at a redemption price equal to and in the form of the Cash Amount (as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable), provided that such OP Units/DownREIT Units have been outstanding for at least
F - 44
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
The following table sets forth redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership for the years ended December 31, 2025 and 2024 (dollars in thousands):
Year Ended December 31, | ||||||
2025 | 2024 | |||||
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership at beginning of year | | $ | | | $ | |
Mark-to-market adjustment to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| ( |
| | ||
Conversion of OP Units/DownREIT Units to Common Stock or Cash |
| ( |
| ( | ||
Net income/(loss) attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| |
| | ||
Distributions to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| ( |
| ( | ||
Redeemable Long-Term and Short-Term Incentive Plan Units | | | ||||
Allocation of other comprehensive income/(loss) |
| ( |
| ( | ||
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership at end of year | $ | | $ | | ||
Noncontrolling Interests
Noncontrolling interests represent interests of unrelated partners in certain consolidated affiliates, and are presented as part of equity on the Consolidated Balance Sheets since these interests are not redeemable. Net (income)/loss attributable to noncontrolling interests was less than $(
13. FAIR VALUE OF DERIVATIVES AND FINANCIAL INSTRUMENTS
Fair value is based on the price that would be received to sell an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level valuation hierarchy prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
| ● | Level 1 — Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. |
| ● | Level 2 — Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. |
| ● | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
F - 45
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
The estimated fair values of the Company’s financial instruments either recorded or disclosed on a recurring basis as of December 31, 2025 and 2024 are summarized as follows (dollars in thousands):
Fair Value at December 31, 2025, Using | |||||||||||||||
Total | Quoted | ||||||||||||||
Carrying | Prices in | ||||||||||||||
Amount in | Active | ||||||||||||||
Statement of | Markets | Significant | |||||||||||||
Financial | Fair Value | for Identical | Other | Significant | |||||||||||
Position at | Estimate at | Assets or | Observable | Unobservable | |||||||||||
December 31, | December 31, | Liabilities | Inputs | Inputs | |||||||||||
2025 (a) | 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Description: | | | | | | | | | | ||||||
Notes receivable, net (b) | $ | | $ | | $ | — | $ | — | $ | | |||||
Equity securities (c) | | | | — | — | ||||||||||
Derivatives - Interest rate contracts (d) |
| |
| |
| — |
| |
| — | |||||
Total assets | $ | | $ | | $ | | $ | | $ | | |||||
Secured debt instruments - fixed rate: (e) |
| |
| |
| |
| |
| ||||||
Mortgage notes payable | $ | | $ | | $ | — | $ | — | $ | | |||||
Secured debt instruments - variable rate: (e) |
| |
| |
| |
| |
| ||||||
Tax-exempt secured notes payable |
| |
| |
| — |
| — |
| | |||||
Unsecured debt instruments: (e) |
| |
|
| |
| |
| |||||||
Working capital credit facility | | | — | — | | ||||||||||
Commercial paper program | | | — | — | | ||||||||||
Unsecured notes | | | — | — | | ||||||||||
Total liabilities | $ | | $ | | $ | — | $ | — | $ | | |||||
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership (f) | $ | | $ | | $ | — | $ | | $ | — | |||||
F - 46
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Fair Value at December 31, 2024, Using | |||||||||||||||
Total | Quoted | ||||||||||||||
Carrying | Prices in | ||||||||||||||
Amount in | Active | ||||||||||||||
Statement of | Markets | Significant | |||||||||||||
Financial | Fair Value | for Identical | Other | Significant | |||||||||||
Position at | Estimate at | Assets or | Observable | Unobservable | |||||||||||
December 31, | December 31, | Liabilities | Inputs | Inputs | |||||||||||
| 2024 (a) | 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Description: | | | | | | | | | | ||||||
Notes receivable, net (b) | $ | | $ | | $ | — | $ | — | $ | | |||||
Equity securities (c) | | | | — | — | ||||||||||
Derivatives - Interest rate contracts (d) |
| |
| |
| — |
| |
| — | |||||
Total assets | $ | | $ | | $ | | $ | | $ | | |||||
Secured debt instruments - fixed rate: (e) |
| |
| |
| |
| |
| ||||||
Mortgage notes payable | $ | | $ | | $ | — | $ | — | $ | | |||||
Secured debt instruments - variable rate: (e) |
| |
| |
| |
| |
| ||||||
Tax-exempt secured notes payable |
| |
| |
| — |
| — |
| | |||||
Unsecured debt instruments: (e) |
|
| |
| |
| |
| |||||||
Working capital credit facility | | | — | — | | ||||||||||
Commercial paper program | | | — | — | | ||||||||||
Unsecured notes | | | — | — | | ||||||||||
Total liabilities | $ | | $ | | $ | — | $ | — | $ | | |||||
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership (f) | $ | | $ | | $ | — | $ | | $ | — | |||||
| (a) | Certain balances include fair market value adjustments and exclude deferred financing costs. |
| (b) | See Note 2, Significant Accounting Policies. Note receivables, net includes any accrued and unpaid interest, as applicable, and allowance for credit losses. |
| (c) | The Company holds a direct investment in a publicly traded real estate technology company, SmartRent. The investment is valued at the market price on December 31, 2025 and 2024. The Company currently classifies the investment as Level 1 in the fair value hierarchy. |
| (d) | See Note 14, Derivatives and Hedging Activity. |
| (e) | See Note 7, Secured and Unsecured Debt, Net. |
| (f) | See Note 12, Noncontrolling Interests. |
There were
Financial Instruments Carried at Fair Value
The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The fair values of interest rate swaps and caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.
F - 47
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2025 and 2024, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. In conjunction with the FASB’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership have a redemption feature and are marked to their redemption value. The redemption value is based on the fair value of the Company’s common stock at the redemption date, and therefore, is calculated based on the fair value of the Company’s common stock at the balance sheet date. Since the valuation is based on observable inputs such as quoted prices for similar instruments in active markets, redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership are classified as Level 2.
Financial Instruments Not Carried at Fair Value
At December 31, 2025, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaids, real estate taxes payable, accrued interest payable, security deposits and prepaid rent, distributions payable and accounts payable approximated their carrying values because of the short term nature of these instruments. The estimated fair values of other financial instruments, which includes notes receivable and debt instruments, are classified in Level 3 of the fair value hierarchy due to the significant unobservable inputs that are utilized in their respective valuations.
14. DERIVATIVES AND HEDGING ACTIVITY
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and through the use of derivative financial instruments. Specifically, the Company may enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.
F - 48
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in Accumulated other comprehensive income/(loss), net on the Consolidated Balance Sheets and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the years ended December 31, 2025, 2024, and 2023, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.
Amounts reported in Accumulated other comprehensive income/(loss), net on the Consolidated Balance Sheets related to derivatives that will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Through December 31, 2026, the Company estimates that an additional $
As of December 31, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):
| Number of | | |||
Product | Instruments | Notional | |||
Interest rate swaps and caps | $ | | |||
Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements of GAAP. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of December 31, 2025,
Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of December 31, 2025 and 2024 (dollars in thousands):
Asset Derivatives | Liability Derivatives | |||||||||||
(included in Other assets) | (included in Other liabilities) | |||||||||||
Fair Value at: | Fair Value at: | |||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
Derivatives designated as hedging instruments: | | | | | | | | | ||||
Interest rate products | $ | | $ | | $ | — | $ | — | ||||
Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statements of Operations
The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):
Gain/(Loss) Recognized in | |||||||||||||||||||||||||||
Gain/(Loss) Reclassified | Interest expense | ||||||||||||||||||||||||||
Unrealized holding gain/(loss) | from Accumulated OCI into | (Amount Excluded from | |||||||||||||||||||||||||
Recognized in OCI | Interest expense | Effectiveness Testing) | |||||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | | 2025 | | 2024 | | 2023 | | 2025 | | 2024 | | 2023 | | 2025 | | 2024 | | 2023 | |||||||||
Interest rate products | $ | | $ | | $ | | $ | | $ | | $ | | $ | — | $ | — | $ | — | |||||||||
Year Ended | |||||||||
December 31, | |||||||||
2025 | 2024 | 2023 | |||||||
Total amount of Interest expense presented on the Consolidated Statements of Operations | $ | | $ | | $ | | |||
F - 49
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Credit-risk-related Contingent Features
The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.
The Company has certain agreements with some of its derivative counterparties that contain a provision where, in the event of default by the Company or the counterparty, the right of setoff may be exercised. Any amount payable to one party by the other party may be reduced by its setoff against any amounts payable by the other party. Events that give rise to default by either party may include, but are not limited to, the failure to pay or deliver payment under the derivative agreement, the failure to comply with or perform under the derivative agreement, bankruptcy, a merger without assumption of the derivative agreement, or in a merger, a surviving entity’s creditworthiness is materially weaker than the original party to the derivative agreement.
Tabular Disclosure of Offsetting Derivatives
The Company has elected not to offset derivative positions on the consolidated financial statements. The table below present the effect on its financial position had the Company made the election to offset its derivative positions as of December 31, 2025 and 2024 (dollars in thousands):
| | Gross | | Net Amounts of | | Gross Amounts Not Offset | ||||||||||||
Amounts | Assets | in the Consolidated | ||||||||||||||||
Gross | Offset in the | Presented in the | Balance Sheets | |||||||||||||||
Amounts of | Consolidated | Consolidated | Cash | |||||||||||||||
Recognized | Balance | Balance Sheets | Financial | Collateral | ||||||||||||||
Offsetting of Derivative Assets | Assets | Sheets | (a) | Instruments | | Received | | Net Amount | ||||||||||
$ | | $ | — | $ | | $ | — | $ | — | $ | | |||||||
$ | | $ | — | $ | | $ | — | $ | — | $ | | |||||||
| (a) | Amounts reconcile to the aggregate fair value of derivative assets in the “Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets” located in this footnote. |
15. COMMITMENTS AND CONTINGENCIES
Commitments
The following summarizes the Company’s commitments at December 31, 2025 (dollars in thousands):
Number | UDR's | UDR's Remaining | |||||||
Properties | Investment (a) | Commitment | |||||||
Real estate commitments | |||||||||
Wholly-owned — under development |
| $ | |
| $ | |
| ||
Other unconsolidated investments: | |||||||||
Real estate technology and sustainability investments (b) | - | | | ||||||
Total |
| | $ | | $ | |
| ||
| (a) | Represents UDR’s investment as of December 31, 2025. |
| (b) | As of December 31, 2025, the investments were recorded in either Investment in and advances to unconsolidated joint ventures, net or Other Assets on the Consolidated Balance Sheets. |
F - 50
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Contingencies
Litigation and Legal Matters
The Company is subject to various legal proceedings and claims arising in the ordinary course of business. The Company cannot determine the ultimate liability with respect to such legal proceedings and claims at this time. The Company believes that such liability, to the extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of operations or cash flows.
We have been named as a defendant in a number of cases alleging antitrust violations by RealPage, Inc., a vendor providing revenue management software products, and various owners or managers of multifamily housing, which cases have been consolidated in the United States Court for the Middle District of Tennessee with the Second Amended Complaint filed September 7, 2023 and cases with similar allegations that have been filed by the District of Columbia on November 1, 2023 in the Superior Court of the District of Columbia, the State of Maryland on January 15, 2025 in the Circuit Court for Prince George’s County, Maryland, subsequently transferred to the Circuit Court for Baltimore City, Maryland, and on April 8, 2025 in the Superior Court for King County, Washington. These cases seek injunctive relief as well as monetary damages. We believe that there are defenses, both factual and legal, to the allegations in such cases and we intend to vigorously defend such suits. We are also aware that governmental investigations regarding antitrust matters in the multifamily industry are occurring and the federal government and various state attorneys general have filed a civil lawsuit against RealPage, Inc. and certain owners or managers of multifamily housing to which we are not a party. As all of the above proceedings are in the early stages, it is not possible for us to predict the outcome or to estimate the amount of loss, if any, that may be associated with an adverse decision in any of these cases or any case that may be brought based on the investigations. As a result, as of December 31, 2025, there is
16. REPORTABLE SEGMENTS
GAAP guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. UDR’s CODM is comprised of our Chairman, President and Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, who use several generally accepted industry financial measures to assess the performance of the business for our reportable operating segments.
UDR owns and operates multifamily apartment communities that generate rental and other property related income through the leasing of apartment homes to a diverse base of tenants. The primary financial measures for UDR’s apartment communities are rental income and net operating income (“NOI”). NOI is a useful metric for investors as it is a more meaningful representation of a community’s continuing operating performance than net income as it is prior to corporate-level expense allocations, general and administrative costs, capital structure and depreciation and amortization. Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. NOI is defined as rental income less direct property rental expenses. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative and marketing, which align with the segment-level information that is regularly provided to our CODM. Excluded from NOI is property management expense, which is calculated as
UDR’s
| ● | Same-Store Communities represent those communities acquired, developed, and stabilized prior to January 1, 2024 and held as of December 31, 2025. A comparison of operating results from the prior year is meaningful as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, there is no plan to conduct substantial redevelopment activities, and the community is not classified as held for disposition within the current year. A community is considered to have stabilized occupancy once it achieves |
F - 51
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
| ● | Non-Mature Communities/Other represent those communities that do not meet the criteria to be included in Same-Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment components of mixed use properties. |
Management evaluates the performance of each of our apartment communities on a Same-Store Community and Non-Mature Community/Other basis, as well as individually and geographically. This is consistent with the aggregation criteria under GAAP as each of our apartment communities generally has similar economic characteristics, facilities, services, and tenants. Therefore, the Company’s reportable segments have been aggregated by geography in a manner identical to that which is provided to the CODM.
All revenues are from external customers and no single tenant or related group of tenants contributed 10% or more of UDR’s total revenues during the years ended December 31, 2025, 2024, and 2023.
The following is a description of the principal streams from which the Company generates its revenue:
Lease Revenue
Lease revenue related to leases is recognized on an accrual basis when due from residents or tenants in accordance with ASC 842, Leases. Rental payments are generally due on a monthly basis and recognized on a straight-line basis over the noncancellable lease term because collection of the lease payments was probable at lease commencement, inclusive of any periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option. In addition, in circumstances where a lease incentive is provided to tenants, the incentive is recognized as a reduction of lease revenue on a straight-line basis over the lease term.
Lease revenue also includes all pass-through revenue from retail and residential leases and common area maintenance reimbursements from retail leases. These services represent non-lease components in a contract as the Company transfers a service to the lessee other than the right to use the underlying asset. The Company has elected the
Other Revenue
Other revenue is generated by services provided by the Company to its retail and residential tenants and other unrelated third parties. Revenue is measured based on consideration specified in contracts with customers. The Company recognizes revenue when it satisfies a performance obligation by providing the services specified in a contract to the customer. These fees are generally recognized as earned.
Joint venture management and other fees
The Joint venture management and other fees revenue consists of management fees charged to our equity method joint ventures per the terms of contractual agreements and other fees. Joint venture fee revenue is recognized monthly as the management services are provided and the fees are earned or upon a transaction whereby the Company earns a fee. Joint venture management and other fees are not allocable to a specific reportable segment or segments.
The following table details rental income and NOI for UDR’s reportable segments for the years ended December 31, 2025, 2024, and 2023, and reconciles NOI to Net income/(loss) attributable to UDR, Inc. on the Consolidated Statements of Operations (dollars in thousands):
F - 52
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Year Ended December 31, (a) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | | 2024 | | 2023 | ||||
Reportable apartment home segment lease revenue | |||||||||
Same-Store Communities | | | | | | ||||
West Region | $ | | $ | | $ | | |||
Northeast Region |
| |
| |
| | |||
Mid-Atlantic Region | | | | ||||||
Southeast Region |
| |
| |
| | |||
Southwest Region |
| |
| |
| | |||
Non-Mature Communities/Other |
| |
| |
| | |||
Total segment and consolidated lease revenue | $ | | $ | | $ | | |||
Reportable apartment home segment other revenue | |||||||||
Same-Store Communities | | | | | | ||||
West Region | $ | | $ | | $ | | |||
Northeast Region |
| |
| |
| | |||
Mid-Atlantic Region |
| |
| |
| | |||
Southeast Region |
| |
| |
| | |||
Southwest Region |
| |
| |
| | |||
Non-Mature Communities/Other |
| |
| |
| | |||
Total segment and consolidated other revenue | $ | | $ | | $ | | |||
Total reportable apartment home segment rental income | |||||||||
Same-Store Communities | | | | | | ||||
West Region | $ | | $ | | $ | | |||
Northeast Region |
| |
| |
| | |||
Mid-Atlantic Region |
| |
| |
| | |||
Southeast Region |
| |
| |
| | |||
Southwest Region |
| |
| |
| | |||
Non-Mature Communities/Other |
| |
| |
| | |||
Total segment and consolidated rental income | $ | | $ | | $ | | |||
Total reportable apartment home segment operating expenses | |||||||||
Same-Store Communities | |||||||||
Personnel | $ | | $ | | $ | | |||
Utilities | | | | ||||||
Repair and maintenance | | | | ||||||
Administrative and marketing | | | | ||||||
Real estate taxes | | | | ||||||
Insurance | | | | ||||||
Non-Mature Communities/Other (b) | | | | ||||||
Total segment and consolidated operating expenses | $ | | $ | | $ | | |||
Reportable apartment home segment NOI |
| |
| |
| | |||
Same-Store Communities |
| |
| |
| | |||
West Region | $ | | $ | | $ | | |||
Northeast Region |
| |
| |
| | |||
Mid-Atlantic Region |
| |
| |
| | |||
Southeast Region |
| |
| |
| | |||
Southwest Region |
| |
| |
| | |||
Non-Mature Communities/Other |
| |
| |
| | |||
Total segment and consolidated NOI |
| |
| |
| | |||
F - 53
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Year Ended December 31, (a) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | | 2024 | | 2023 | ||||
Reconciling items: |
| |
| |
| | |||
Joint venture management and other fees |
| |
| |
| | |||
Property management |
| ( |
| ( |
| ( | |||
Other operating expenses |
| ( |
| ( |
| ( | |||
Real estate depreciation and amortization |
| ( |
| ( |
| ( | |||
General and administrative |
| ( |
| ( |
| ( | |||
Casualty-related (charges)/recoveries, net |
| ( |
| ( |
| ( | |||
Other depreciation and amortization |
| ( |
| ( |
| ( | |||
Gain/(loss) on sale of real estate owned | | | | ||||||
Income/(loss) from unconsolidated entities |
| |
| |
| | |||
Interest expense |
| ( |
| ( |
| ( | |||
Interest income and other income/(expense), net |
| |
| ( |
| | |||
Tax (provision)/benefit, net |
| ( |
| ( |
| ( | |||
Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership |
| ( |
| ( |
| ( | |||
Net (income)/loss attributable to noncontrolling interests |
| ( |
| ( |
| ( | |||
Net income/(loss) attributable to UDR, Inc. | $ | | $ | | $ | | |||
| (a) | Same-Store Community population consisted of |
| (b) | Non-Mature Communities/Other operating expenses include costs to manage recently acquired, developed and redeveloped communities, and the non-apartment components of mixed-use properties. |
The following table details the assets of UDR’s reportable segments as of December 31, 2025 and 2024 (dollars in thousands):
| December 31, | | December 31, | |||
2025 | 2024 | |||||
Reportable apartment home segment assets: |
| |
| | ||
Same-Store Communities (a): |
| |
| | ||
West Region | $ | | $ | | ||
Northeast Region |
| |
| | ||
Mid-Atlantic Region |
| |
| | ||
Southeast Region |
| |
| | ||
Southwest Region |
| |
| | ||
Non-Mature Communities/Other |
| |
| | ||
Total segment assets |
| |
| | ||
Accumulated depreciation |
| ( |
| ( | ||
Total segment assets — net book value |
| |
| | ||
Reconciling items: |
| |
| | ||
Cash and cash equivalents |
| |
| | ||
Restricted cash |
| |
| | ||
Notes receivable, net |
| |
| | ||
Investment in and advances to unconsolidated joint ventures, net |
| |
| | ||
Operating lease right-of-use assets | | | ||||
Other assets |
| |
| | ||
Total consolidated assets | $ | | $ | | ||
| (a) | Same-Store Community population consisted of |
F - 54
Table of Contents
UDR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
DECEMBER 31, 2025
Markets included in the above geographic segments are as follows:
| i. | West Region — Orange County, San Francisco, Seattle, Los Angeles, Monterey Peninsula, Other Southern California and Portland |
| ii. | Northeast Region — Boston, New York and Philadelphia |
| iii. | Mid-Atlantic Region — Metropolitan D.C., Baltimore and Richmond |
| iv. | Southeast Region — Tampa, Orlando, Nashville and Other Florida |
| v. | Southwest Region — Dallas, Austin and Denver |
F - 55
Table of Contents
[This page is intentionally left blank.]
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED
DECEMBER 31, 2025
(In thousands)
Gross Amount at Which | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Initial Costs | Carried at Close of Period | ||||||||||||||||||||||||||||||
| | | | | Costs of | | | | | | | ||||||||||||||||||||
Improvements | |||||||||||||||||||||||||||||||
Capitalized | |||||||||||||||||||||||||||||||
Land and | Buildings | Total Initial | Subsequent | Land and | Buildings & | Total | |||||||||||||||||||||||||
Land | and | Acquisition | to Acquisition | Land | Buildings | Carrying | Accumulated | Date of | Date | ||||||||||||||||||||||
Encumbrances | Improvements | Improvements | Costs | Costs | Improvements | Improvements | Value | Depreciation | Construction(a) | Acquired | |||||||||||||||||||||
WEST REGION | |||||||||||||||||||||||||||||||
Harbor at Mesa Verde | $ | — | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | 1965/2003 | Jun-03 | |||||||||||
27 Seventy Five Mesa Verde | — | | | | | | | | | 1979/2013 | Oct-04 | ||||||||||||||||||||
Huntington Vista | — | | | | | | | | | 1970 | Jun-03 | ||||||||||||||||||||
Missions at Back Bay | — | | | | | | | | | 1969 | Dec-03 | ||||||||||||||||||||
Eight 80 Newport Beach - North | — | | | | | | | | | 1968/2000/2016 | Oct-04 | ||||||||||||||||||||
Eight 80 Newport Beach - South | — | | | | | | | | | 1968/2000/2016 | Mar-05 | ||||||||||||||||||||
Beach & Ocean | — | | - | | | | | | | 2014 | Aug-11 | ||||||||||||||||||||
The Residences at Bella Terra | — | | - | | | | | | | 2013 | Oct-11 | ||||||||||||||||||||
The Residences at Pacific City | — | | - | | | | | | | 2018 | Jan-14 | ||||||||||||||||||||
ORANGE COUNTY, CA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
2000 Post Street | — | | | | | | | | | 1987/2016 | Dec-98 | ||||||||||||||||||||
Birch Creek | — | | | | | | | | | 1968 | Dec-98 | ||||||||||||||||||||
Highlands Of Marin | — | | | | | | | | | 1991/2010 | Dec-98 | ||||||||||||||||||||
Marina Playa | — | | | | | | | | | 1971 | Dec-98 | ||||||||||||||||||||
River Terrace | — | | | | | | | | | 2005 | Aug-05 | ||||||||||||||||||||
CitySouth | — | | | | | | | | | 1972/2012 | Nov-05 | ||||||||||||||||||||
Bay Terrace | — | | | | | | | | | 1962 | Oct-05 | ||||||||||||||||||||
Highlands of Marin Phase II | — | | | | | | | | | 1968/2010 | Oct-07 | ||||||||||||||||||||
Edgewater | — | | | | | | | | | 2007 | Mar-08 | ||||||||||||||||||||
Almaden Lake Village | | | | | | | | | | 1999 | Jul-08 | ||||||||||||||||||||
388 Beale | — | | | | | | | | | 1999 | Apr-11 | ||||||||||||||||||||
Channel @ Mission Bay | — | | - | | | | | | | 2014 | Sep-10 | ||||||||||||||||||||
5421 at Dublin Station | — | | - | | | | | | | 2022 | Sep-16 | ||||||||||||||||||||
HQ | — | | | | | | | | | 2021 | Sep-22 | ||||||||||||||||||||
Residences at Lake Merritt | — | | | | | | | | | 2023 | Dec-23 | ||||||||||||||||||||
SAN FRANCISCO, CA |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Crowne Pointe | — | | | | | | | | | 1987 | Dec-98 | ||||||||||||||||||||
Hilltop | — | | | | | | | | | 1985 | Dec-98 | ||||||||||||||||||||
The Kennedy | — | | | | | | | | | 2005 | Nov-05 | ||||||||||||||||||||
Hearthstone at Merrill Creek | — | | | | | | | | | 2000 | May-08 | ||||||||||||||||||||
Island Square | — | | | | | | | | | 2007 | Jul-08 | ||||||||||||||||||||
elements too | — | | | | | | | | | 2010 | Feb-10 | ||||||||||||||||||||
989elements | — | | | | | | | | | 2006 | Dec-09 | ||||||||||||||||||||
Lightbox | — | | | | | | | | | 2014 | Aug-14 | ||||||||||||||||||||
Ashton Bellevue | — | | | | | | | | | 2009 | Oct-16 | ||||||||||||||||||||
TEN20 | — | | | | | | | | | 2009 | Oct-16 | ||||||||||||||||||||
Milehouse | — | | | | | | | | | 2016 | Nov-16 | ||||||||||||||||||||
CityLine | — | | | | | | | | | 2016 | Jan-17 | ||||||||||||||||||||
CityLine II | — | | | | | | | | | 2018 | Jan-19 | ||||||||||||||||||||
Brio | — | | | | | | | | | 2020 | Jul-21 | ||||||||||||||||||||
SEATTLE, WA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Rosebeach | — | | | | | | | | | 1970 | Sep-04 | ||||||||||||||||||||
Tierra Del Rey | — | | | | | | | | | 1998 | Dec-07 | ||||||||||||||||||||
The Westerly | — | | | | | | | | | 1993/2013 | Sep-10 | ||||||||||||||||||||
Jefferson at Marina del Rey | — | | - | | | | | | | 2008 | Sep-07 | ||||||||||||||||||||
LOS ANGELES, CA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Boronda Manor | — | | | | | | | | | 1979 | Dec-98 | ||||||||||||||||||||
Garden Court | — | | | | | | | | | 1973 | Dec-98 | ||||||||||||||||||||
Cambridge Court | — | | | | | | | | | 1974 | Dec-98 | ||||||||||||||||||||
Laurel Tree | — | | | | | | | | | 1977 | Dec-98 | ||||||||||||||||||||
The Pointe At Harden Ranch | — | | | | | | | | | 1986 | Dec-98 | ||||||||||||||||||||
The Pointe At Northridge | — | | | | | | | | | 1979 | Dec-98 | ||||||||||||||||||||
The Pointe At Westlake | — | | | | | | | | | 1975 | Dec-98 | ||||||||||||||||||||
MONTEREY PENINSULA, CA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Verano at Rancho Cucamonga Town Square | — | | | | | | | | | 2006 | Oct-02 | ||||||||||||||||||||
Windemere at Sycamore Highland | — | | | | | | | | | 2001 | Nov-02 | ||||||||||||||||||||
S - 1
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2025
(In thousands)
Gross Amount at Which | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Initial Costs | Carried at Close of Period | ||||||||||||||||||||||||||||||
| | | | | Costs of | | | | | | | ||||||||||||||||||||
Improvements | |||||||||||||||||||||||||||||||
Capitalized | |||||||||||||||||||||||||||||||
Land and | Buildings | Total Initial | Subsequent | Land and | Buildings & | Total | |||||||||||||||||||||||||
Land | and | Acquisition | to Acquisition | Land | Buildings | Carrying | Accumulated | Date of | Date | ||||||||||||||||||||||
Encumbrances | Improvements | Improvements | Costs | Costs | Improvements | Improvements | Value | Depreciation | Construction(a) | Acquired | |||||||||||||||||||||
Strata | — | | | | | | | | | 2010 | Nov-19 | ||||||||||||||||||||
OTHER SOUTHERN CA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Tualatin Heights | — | | | | | | | | | 1989 | Dec-98 | ||||||||||||||||||||
PORTLAND, OR |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
TOTAL WEST REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
NORTHEAST REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||
Garrison Square | - | | | | | | | | | 1887/1990 | Sep-10 | ||||||||||||||||||||
Ridge at Blue Hills | | | | | | | | | | 2007 | Sep-10 | ||||||||||||||||||||
Inwood West | | | | | | | | | | 2006 | Apr-11 | ||||||||||||||||||||
14 North | | | | | | | | | | 2005 | Apr-11 | ||||||||||||||||||||
100 Pier 4 | - | | - | | | | | | | 2015 | Dec-15 | ||||||||||||||||||||
345 Harrison | - | | - | | | | | | | 2018 | Nov-11 | ||||||||||||||||||||
Currents on the Charles | - | | | | | | | | | 2015 | Jun-19 | ||||||||||||||||||||
The Commons at Windsor Gardens | - | | | | | | | | | 1969 | Aug-19 | ||||||||||||||||||||
Charles River Landing | - | | | | | | | | | 2010 | Nov-19 | ||||||||||||||||||||
Lenox Farms | - | | | | | | | | | 2009 | Nov-19 | ||||||||||||||||||||
Union Place | | | | | | | | | | 2005 | Jan-21 | ||||||||||||||||||||
Bradlee Danvers | - | | | | | | | | | 1874/2008 | Jun-22 | ||||||||||||||||||||
BOSTON, MA |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
10 Hanover Square | — | | | | | | | | | 2005/2020 | Apr-11 | ||||||||||||||||||||
21 Chelsea | — | | | | | | | | | 2001 | Aug-11 | ||||||||||||||||||||
View 34 | — | | | | | | | | | 1985/2013 | Jul-11 | ||||||||||||||||||||
95 Wall Street | — | | | | | | | | | 2008 | Aug-11 | ||||||||||||||||||||
NEW YORK, NY |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Park Square | — | | | | | | | | | 2018 | May-19 | ||||||||||||||||||||
The Smith Valley Forge | — | | | | | | | | | 2019 | Sep-21 | ||||||||||||||||||||
322 on North Broad | — | | | | | | | | | 2018 | Sep-21 | ||||||||||||||||||||
The George Apartments | — | | - | | | | | | | 2022 | Aug-20 | ||||||||||||||||||||
Broadridge | — | | | | | | | | | 2021 | May-25 | ||||||||||||||||||||
PHILADELPHIA, PA | — | | | | | | | | | ||||||||||||||||||||||
TOTAL NORTHEAST REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
MID-ATLANTIC REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Dominion Middle Ridge | — | | | | | | | | | 1990 | Jun-96 | ||||||||||||||||||||
Dominion Lake Ridge | — | | | | | | | | | 1987 | Feb-96 | ||||||||||||||||||||
Presidential Greens | — | | | | | | | | | 1938 | May-02 | ||||||||||||||||||||
The Whitmore | — | | | | | | | | | 1962/2008 | Apr-02 | ||||||||||||||||||||
Ridgewood | — | | | | | | | | | 1988 | Aug-02 | ||||||||||||||||||||
Waterside Towers | — | | | | | | | | | 1971 | Dec-03 | ||||||||||||||||||||
Wellington Place at Olde Town | — | | | | | | | | | 1987/2008 | Sep-05 | ||||||||||||||||||||
Andover House | — | | | | | | | | | 2004 | Mar-07 | ||||||||||||||||||||
Sullivan Place | — | | | | | | | | | 2007 | Dec-07 | ||||||||||||||||||||
Delancey at Shirlington | — | | | | | | | | | 2006/2007 | Mar-08 | ||||||||||||||||||||
View 14 | — | | | | | | | | | 2009 | Jun-11 | ||||||||||||||||||||
Capitol View on 14th | — | | - | | | | | | | 2013 | Sep-07 | ||||||||||||||||||||
Domain College Park | — | | - | | | | | | | 2014 | Jun-11 | ||||||||||||||||||||
1200 East West | — | | | | | | | | | 2010 | Oct-15 | ||||||||||||||||||||
Courts at Huntington Station | — | | | | | | | | | 2011 | Oct-15 | ||||||||||||||||||||
Eleven55 Ripley | — | | | | | | | | | 2014 | Oct-15 | ||||||||||||||||||||
Arbor Park of Alexandria | | | | | | | | | | 1969/2015 | Oct-15 | ||||||||||||||||||||
Courts at Dulles | — | | | | | | | | | 2000 | Oct-15 | ||||||||||||||||||||
Newport Village | — | | | | | | | | | 1968 | Oct-15 | ||||||||||||||||||||
1301 Thomas Circle | — | | | | | | | | | 2006 | Aug-19 | ||||||||||||||||||||
Station on Silver | — | | | | | | | | | 2018 | Dec-20 | ||||||||||||||||||||
Seneca Place | — | | | | | | | | | 1985 | Jun-21 | ||||||||||||||||||||
Canterbury Apartments | — | | | | | | | | | 1986 | Aug-21 | ||||||||||||||||||||
S - 2
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2025
(In thousands)
Gross Amount at Which | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Initial Costs | Carried at Close of Period | ||||||||||||||||||||||||||||||
| | | | | Costs of | | | | | | | ||||||||||||||||||||
Improvements | |||||||||||||||||||||||||||||||
Capitalized | |||||||||||||||||||||||||||||||
Land and | Buildings | Total Initial | Subsequent | Land and | Buildings & | Total | |||||||||||||||||||||||||
Land | and | Acquisition | to Acquisition | Land | Buildings | Carrying | Accumulated | Date of | Date | ||||||||||||||||||||||
Encumbrances | Improvements | Improvements | Costs | Costs | Improvements | Improvements | Value | Depreciation | Construction(a) | Acquired | |||||||||||||||||||||
The MO | — | | - | | | | | | | 2023 | Jan-19 | ||||||||||||||||||||
The Enclave at Potomac Club | — | | | | | | | | | 2013 | Nov-25 | ||||||||||||||||||||
METROPOLITAN, D.C. |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Calvert's Walk | — | | | | | | | | | 1988 | Mar-04 | ||||||||||||||||||||
20 Lambourne | — | | | | | | | | | 2003 | Mar-08 | ||||||||||||||||||||
Domain Brewers Hill | — | | | | | | | | | 2009 | Aug-10 | ||||||||||||||||||||
Rodgers Forge | — | | | | | | | | | 1945 | Apr-19 | ||||||||||||||||||||
Towson Promenade | | | | | | | | | | 2009 | Nov-19 | ||||||||||||||||||||
1274 at Towson | — | | | | | | | | | 2020 | Sep-21 | ||||||||||||||||||||
Quarters at Towson Town Center | — | | | | | | | | | 2008 | Nov-21 | ||||||||||||||||||||
BALTIMORE, MD |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Waterside At Ironbridge | — | | | | | | | | | 1987 | Sep-97 | ||||||||||||||||||||
Legacy at Mayland | — | | | | | | | | | 1973/2007 | Dec-91 | ||||||||||||||||||||
RICHMOND, VA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
TOTAL MID-ATLANTIC REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
SOUTHEAST REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Summit West | — | | | | | | | | | 1972 | Dec-92 | ||||||||||||||||||||
The Breyley | — | | | | | | | | | 1977/2007 | Sep-93 | ||||||||||||||||||||
Lakewood Place | — | | | | | | | | | 1986 | Mar-94 | ||||||||||||||||||||
Cambridge Woods | — | | | | | | | | | 1985 | Jun-97 | ||||||||||||||||||||
Inlet Bay | — | | | | | | | | | 1988/1989 | Jun-03 | ||||||||||||||||||||
MacAlpine Place | — | | | | | | | | | 2001 | Dec-04 | ||||||||||||||||||||
The Vintage Lofts at West End | — | | | | | | | | | 2009 | Jul-09 | ||||||||||||||||||||
Peridot Palms | — | | | | | | | | | 2017 | Feb-19 | ||||||||||||||||||||
The Preserve at Gateway | — | | | | | | | | | 2013 | May-19 | ||||||||||||||||||||
The Slade at Channelside | — | | | | | | | | | 2009 | Jan-20 | ||||||||||||||||||||
Andover Place at Cross Creek | — | | | | | | | | | 1997/1999 | Nov-20 | ||||||||||||||||||||
Meridian | — | | - | | | | | | | 2024 | May-21 | ||||||||||||||||||||
TAMPA, FL |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Altamira Place | — | | | | | | | | | 1984/2007 | Apr-94 | ||||||||||||||||||||
Regatta Shore | — | | | | | | | | | 1988/2007 | Jun-94 | ||||||||||||||||||||
Alafaya Woods | — | | | | | | | | | 1989/2006 | Oct-94 | ||||||||||||||||||||
Los Altos | — | | | | | | | | | 1990/2004 | Oct-96 | ||||||||||||||||||||
Lotus Landing | — | | | | | | | | | 1985/2006 | Jul-97 | ||||||||||||||||||||
Seville On The Green | — | | | | | | | | | 1986/2004 | Oct-97 | ||||||||||||||||||||
Ashton @ Waterford | — | | | | | | | | | 2000 | May-98 | ||||||||||||||||||||
Arbors at Lee Vista | — | | | | | | | | | 1992/2007 | Aug-06 | ||||||||||||||||||||
Arbors at Maitland Summit | — | | | | | | | | | 1998 | Oct-21 | ||||||||||||||||||||
Essex Luxe | — | | | | | | | | | 2020 | Oct-21 | ||||||||||||||||||||
ORLANDO, FL |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Legacy Hill | — | | | | | | | | | 1977 | Nov-95 | ||||||||||||||||||||
Hickory Run | — | | | | | | | | | 1989 | Dec-95 | ||||||||||||||||||||
Carrington Hills | — | | - | | | | | | | 1999 | Dec-95 | ||||||||||||||||||||
Brookridge | — | | | | | | | | | 1986 | Mar-96 | ||||||||||||||||||||
Breckenridge | — | | | | | | | | | 1986 | Mar-97 | ||||||||||||||||||||
Colonnade | — | | | | | | | | | 1998 | Jan-99 | ||||||||||||||||||||
The Preserve at Brentwood | — | | | | | | | | | 1998 | Jun-04 | ||||||||||||||||||||
Polo Park | — | | | | | | | | | 1987/2008 | May-06 | ||||||||||||||||||||
NASHVILLE, TN |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
The Reserve and Park at Riverbridge | — | | | | | | | | | 1999/2001 | Dec-04 | ||||||||||||||||||||
OTHER FLORIDA |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
TOTAL SOUTHEAST REGION |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
SOUTHWEST REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Thirty377 | | | | | | | | | | 1999/2007 | Aug-06 | ||||||||||||||||||||
Legacy Village | | | | | | | | | | 2005/06/07 | Mar-08 | ||||||||||||||||||||
S - 3
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2025
(In thousands)
Gross Amount at Which | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Initial Costs | Carried at Close of Period | ||||||||||||||||||||||||||||||
| | | | | Costs of | | | | | | | ||||||||||||||||||||
Improvements | |||||||||||||||||||||||||||||||
Capitalized | |||||||||||||||||||||||||||||||
Land and | Buildings | Total Initial | Subsequent | Land and | Buildings & | Total | |||||||||||||||||||||||||
Land | and | Acquisition | to Acquisition | Land | Buildings | Carrying | Accumulated | Date of | Date | ||||||||||||||||||||||
Encumbrances | Improvements | Improvements | Costs | Costs | Improvements | Improvements | Value | Depreciation | Construction(a) | Acquired | |||||||||||||||||||||
Addison Apts at The Park | - | | | | | | | | | 1977/78/79 | May-07 | ||||||||||||||||||||
Addison Apts at The Park I | - | | | | | | | | | 1970 | May-07 | ||||||||||||||||||||
Addison Apts at The Park II | - | | | | | | | | | 1975 | May-07 | ||||||||||||||||||||
Savoye | - | | | | | | | | | 2009 | Nov-19 | ||||||||||||||||||||
Savoye 2 | - | | | | | | | | | 2011 | Nov-19 | ||||||||||||||||||||
Fiori on Vitruvian Park | - | | | | | | | | | 2013 | Nov-19 | ||||||||||||||||||||
Vitruvian West Phase I | | | | | | | | | | 2018 | Nov-19 | ||||||||||||||||||||
Vitruvian West Phase II | - | | | | | | | | | 2021 | Nov-19 | ||||||||||||||||||||
Vitruvian West Phase III | - | | | | | | | | | 2022 | Nov-19 | ||||||||||||||||||||
Villas at Fiori | - | | | | | | | | | 2024 | Nov-19 | ||||||||||||||||||||
The Canal | | | | | | | | | | 2017 | Apr-21 | ||||||||||||||||||||
Cool Springs at Frisco Bridges | | | | | | | | | | 2012 | May-21 | ||||||||||||||||||||
Central Square at Frisco | | | | | | | | | | 2018 | Aug-23 | ||||||||||||||||||||
Villaggio | | | | | | | | | | 2016 | Aug-23 | ||||||||||||||||||||
Lofts at Palisades | | | | | | | | | | 2018 | Aug-23 | ||||||||||||||||||||
Flats at Palisades | | | | | | | | | | 2017 | Aug-23 | ||||||||||||||||||||
DALLAS, TX |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Barton Creek Landing | - | | | | | | | | | 1986/2012 | Mar-02 | ||||||||||||||||||||
Residences at the Domain | - | | | | | | | | | 2007 | Aug-08 | ||||||||||||||||||||
Red Stone Ranch | - | | | | | | | | | 2000 | Apr-12 | ||||||||||||||||||||
Lakeline Villas | - | | | | | | | | | 2002 | Apr-12 | ||||||||||||||||||||
Estancia Villas | | | | | | | | | | 2018 | Aug-23 | ||||||||||||||||||||
Palo Verde | | | | | | | | | | 2019 | Aug-23 | ||||||||||||||||||||
AUSTIN, TX |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Steele Creek | — | | | | | | | | | 2015 | Oct-17 | ||||||||||||||||||||
Cirrus | — | | - | | | | | | | 2022 | Feb-19 | ||||||||||||||||||||
DENVER, CO | — |
| |
| |
| |
| |
| |
| |
| |
| | ||||||||||||||
TOTAL SOUTHWEST REGION |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
TOTAL OPERATING COMMUNITIES |
| |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
REAL ESTATE UNDER DEVELOPMENT | |||||||||||||||||||||||||||||||
3001 Iowa Ave | — | | — | | | | | | — | ||||||||||||||||||||||
TOTAL REAL ESTATE UNDER DEVELOPMENT |
| — |
| |
| — |
| |
| |
| |
| |
| |
| — | |||||||||||||
LAND | |||||||||||||||||||||||||||||||
Vitruvian Park® | — | | | | | | | | | ||||||||||||||||||||||
Alameda Point Block 11 | — | | - | | | | | | - | ||||||||||||||||||||||
Newport Village II | — | | - | | | | | | - | ||||||||||||||||||||||
2727 Turtle Creek | — | | - | | | | | | - | ||||||||||||||||||||||
488 Residence at Riverwalk | — | | - | | | | | | - | ||||||||||||||||||||||
TOTAL LAND |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
COMMERCIAL | |||||||||||||||||||||||||||||||
Brookhaven Shopping Center | — | — | — | — | | | | | | ||||||||||||||||||||||
3001 Iowa Ave Commercial | — | | | | | | | | | ||||||||||||||||||||||
TOTAL COMMERCIAL |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Other (b) | — | — | — | — | | | | | | ||||||||||||||||||||||
1745 Shea Center I | — | | | | | | | | | ||||||||||||||||||||||
TOTAL CORPORATE |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
TOTAL COMMERCIAL & CORPORATE |
| — |
| |
| |
| |
| |
| |
| |
| |
| | |||||||||||||
Deferred Financing Costs and Other Non-Cash Adjustments | ( | ||||||||||||||||||||||||||||||
TOTAL REAL ESTATE OWNED | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||||||||
(a) | Date of original construction/date of last major renovation, if applicable. |
(b) | Includes unallocated accruals and capital expenditures. |
S - 4
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2025
(In thousands)
The aggregate cost for federal income tax purposes was approximately $
The estimated depreciable lives for all buildings in the latest Consolidated Statements of Operations are
S - 5
Table of Contents
UDR, INC.
SCHEDULE III — REAL ESTATE OWNED - (Continued)
DECEMBER 31, 2025
(In thousands)
3-YEAR ROLLFORWARD OF REAL ESTATE OWNED AND ACCUMULATED DEPRECIATION
The following is a reconciliation of the carrying amount of total real estate owned at December 31, (in thousands):
| 2025 | | 2024 | | 2023 | ||||
Balance at beginning of the year | $ | | $ | | $ | | |||
Real estate acquired (including joint venture consolidation) |
| |
| — |
| | |||
Capital expenditures and development |
| |
| |
| | |||
Real estate sold |
| ( |
| ( |
| ( | |||
Balance at end of the year | $ | | $ | | $ | | |||
The following is a reconciliation of total accumulated depreciation for real estate owned at December 31, (in thousands):
| 2025 | | 2024 | | 2023 | ||||
Balance at beginning of the year | $ | | $ | | $ | | |||
Depreciation expense for the year |
| |
| |
| | |||
Accumulated depreciation on sales |
| ( |
| ( |
| ( | |||
Balance at end of year | $ | | $ | | $ | | |||
S - 6
FAQ
What is UDR (UDR) and what type of properties does it own?
How did UDR (UDR) perform financially in 2025?
What were UDR (UDR) Same-Store portfolio results for 2025?
How much did UDR (UDR) pay in dividends to common shareholders in 2025?
How large is UDR’s (UDR) workforce and what are its human capital priorities?
What are key geographic and regulatory risks for UDR (UDR)?
What are the main risk factors UDR (UDR) highlights in its 10-K?
