UDR's same-store NOI rose 1.4% and it raised 2026 guidance, but FFOA per share held flat at $0.64 only because buybacks funded by property sales offset a 2.4% drop in total FFOA.
Revenue
$425M
0.0% YoY
Net income
$68M
+86.0% YoY
Diluted EPS
$0.21
+90.9% YoY
Operating margin
27.2%
How UDR compares with Real Estate peers
Figure
UDR
Peer median
Rank
Revenue growth (YoY)
0.0%
+6.8%
25th of 28
Operating margin
27.2%
25.4%
6th of 14
EPS growth (YoY)
+90.9%
+5.9%
3rd of 27
Rank 1 = fastest revenue growth, highest operating margin, fastest EPS growth. Peers are the other Real Estate companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
UDR, a Denver-based landlord that owns or has a stake in about 60,000 apartments across US cities, had a steady second quarter of 2026. It raised full-year guidance because leasing ran ahead of plan. The per-share figures look flat, and that hides a trade-off. The apartments UDR owned in both years earned 1.4% more, but the company is selling buildings and using the cash to buy back its own shares. Its total operating earnings shrank, and per-share results held steady only because there are fewer shares.
At a glance
FFO as Adjusted of $0.64 per share, unchanged from a year ago. In dollars, FFOA fell 2.4% to $222.0 million. The diluted share and unit count fell 2.5%, which offset the drop.
Same-store NOI up 1.4%. This is UDR's best year-over-year figure of 2026 so far (year-to-date it is only +0.3%). Leases signed in the quarter averaged 2.1% above the previous rent, beating management's 1.5%–2.0% guidance.
GAAP EPS of $0.21, up from $0.11. The jump comes almost entirely from a $35.7 million gain on selling one Nashville community. It says little about how the rental business performed.
Why net income is the wrong number to watch here
REITs (real estate investment trusts) have to charge heavy depreciation on their buildings under GAAP accounting, as if the buildings lose value every year. In practice, well-kept apartment buildings often hold or gain value. This quarter UDR booked $160.1 million of real estate depreciation, equal to 38% of revenue. It then added back a $35.7 million gain from selling a building. Both items swing GAAP net income a lot without changing the rent the portfolio collects.
That is why the industry uses FFO (funds from operations). FFO starts from net income, adds back real estate depreciation and removes gains on property sales. UDR's FFOA also removes one-off items such as legal costs and gains on its technology investments. AFFO then subtracts the routine capital spending needed to keep the buildings in shape, which makes it the closest measure of cash available for dividends.
Metric
Q2 2026
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"Same-store" covers the 52,426 homes that UDR owned and ran at stable occupancy in both periods, so growth there is not distorted by buying or selling buildings. NOI (net operating income) is rent minus the direct costs of running the buildings: taxes, insurance, utilities, staff and repairs. Without the $35.7 million gain, operating margin would have been about 18.8%.
What drove the quarter
Rent in stable buildings grew slowly, and fees and collections added more. Same-store rental income rose $7.0 million (+1.8%). The 10-Q breaks this into three parts: higher rental rates added only $2.4 million (+0.7%), reimbursements and other income added $2.8 million (+5.8%), and bad-debt expense fell $2.3 million "due to a reduction in delinquent homes resulting in higher collections." So rent increases supplied roughly a third of the growth. Better collections and ancillary income supplied the rest. Average monthly income per occupied home rose 2.0% to $2,642.
Costs grew faster than revenue. Same-store operating expenses rose 2.6%. Real estate taxes were up 2.8% on higher assessed values, utilities up 5.2% on commodity prices, and personnel up 3.4% because of merit raises and severance. As a result the same-store NOI margin, the share of rent left after running the buildings, slipped to 68.6% from 68.9%.
Coastal markets and Sunbelt markets moved in opposite directions. The regional numbers are very different:
Region
Share of same-store NOI
Revenue growth
NOI growth
New-lease rate change
West
32.4%
+3.7%
+3.7%
+7.8%
Northeast
20.2%
+3.0%
+3.4%
+1.6%
Mid-Atlantic
19.0%
+1.6%
+0.6%
-4.2%
Southeast
12.5%
-1.0%
-2.0%
-8.0%
Southwest
10.9%
-1.0%
-2.2%
-7.9%
In the Southeast and Southwest, new tenants are paying about 8% less than the previous tenant paid for the same unit. That points to heavy recent apartment construction in those markets. Across the portfolio, new leases were 0.6% below prior rent and renewals were 4.2% above, for a blended 2.1%. Existing residents are absorbing increases that new arrivals would not pay. Annualized turnover fell to 39.9% from 41.3%, and management cited a record seasonally adjusted resident retention of 60%.
Total NOI still went down. Across all properties, NOI fell 0.2% to $289.8 million. NOI from sold and held-for-sale communities dropped $9.7 million, which cancelled out the $3.7 million same-store gain and a $3.2 million gain from newly stabilized buildings. Total revenue came in at exactly $425.4 million in both years for the same reason: growth from existing and acquired buildings was offset by revenue lost from buildings sold.
What the headline numbers hide
Buybacks are carrying the per-share figures. FFOA in dollars fell from $227.5 million to $222.0 million. The diluted share and unit count dropped from 357.4 million to 348.3 million. Since restarting buybacks in September 2025, UDR has repurchased about 11.5 million shares for $418.0 million at an average of $36.32. That includes about 5.5 million shares ($200.3 million) bought in the second quarter and just after it. The money comes largely from selling buildings: 2026 sales could reach about $656 million if the pending deals close. This is a reasonable trade if the stock trades below what the buildings are worth. The cost is that UDR's earnings base shrinks each quarter.
Interest income is falling. Interest and other income dropped $5.5 million from a year earlier, mostly because of a $5.2 million decline in interest on notes receivable as UDR's lending to joint-venture developers ran off. FFO and FFOA both absorb this loss. In the quarter UDR put $50 million back into a mezzanine loan at 8.0% on Columbus Square in New York.
The gap between GAAP and adjusted figures is mostly legal costs. Other operating expenses rose $5.2 million, which the 10-Q attributes to legal fees in cases "that allege antitrust violations by RealPage, Inc." FFOA adds back $8.4 million of "legal and other costs," along with $3.1 million of casualty charges and $0.5 million of severance, for $13.3 million in total. That is why FFO ($0.60) sits $0.04 below FFOA ($0.64). If the litigation drags on, these costs are real cash leaving the company even though FFOA excludes them.
Year-to-date FFO got help from a one-off gain. Year-to-date FFO per share rose to $1.23 from $1.19, but $14.2 million of gains on real estate technology investments (booked in Q1) is included in that figure. FFOA excludes those gains and is flat at $1.25.
Operating cash flow fell but still covers the payout. Year-to-date operating cash flow was $390.9 million, down 3.8% from $406.5 million and equal to about 91% of diluted FFO ($430.9 million). The shortfall mainly reflects a $37.8 million reduction in operating liabilities. The quarterly dividend of $0.435, now paid as $0.145 a month, is 78% of Q2 AFFO of $0.56. That leaves room to cover it, but the 1.2% dividend increase is small.
Debt is slightly higher and maturities are getting closer. Net debt-to-EBITDAre rose to 5.6x from 5.5x. The weighted average time to maturity shortened to 3.9 years from 4.7, while the average interest rate held at 3.4%. About $328 million of debt comes due in the rest of 2026. When that debt is refinanced at current rates, which are likely above 3.4%, it will reduce future FFO.
Takeaway: Flat per-share results hide a shrinking business. Same-store NOI grew 1.4%, but selling buildings and losing loan interest cut total FFOA by 2.4%, and buybacks restored the per-share figure. The investment case depends on UDR's coastal West and Northeast markets, where rents are rising about 3%–4%, outgrowing its Sunbelt markets, where new-lease rents are still falling about 8%.
Guidance and outlook
Management raised or tightened most of its full-year 2026 ranges:
Full-year 2026 guidance
Prior
Updated
Midpoint change
FFOA per share
$2.47–$2.57
$2.49–$2.57
+$0.01 to $2.53
FFO per share
$2.48–$2.58
$2.47–$2.55
-$0.02 to $2.51
Net income per share
$0.91–$1.01
$1.03–$1.11
+$0.11 to $1.07
Same-store revenue growth
0.25%–2.25%
0.75%–2.00%
+12.5 bps to 1.375%
Same-store expense growth
3.00%–4.50%
2.75%–3.75%
-50 bps to 3.25%
Same-store NOI growth
(1.00)%–1.25%
0.00%–1.25%
+50 bps to 0.625%
FFO and FFOA guidance moved in opposite directions, which suggests that the excluded items, mainly legal and other costs, are now expected to be larger. The net income increase reflects property-sale gains rather than better operations. Third-quarter FFOA guidance of $0.63–$0.65 brackets Q2's $0.64. The full-year midpoint of $2.53 implies about $1.28 in the second half, or roughly $0.64 a quarter, so no further growth is expected this year.
Our view: Same-store NOI was up only 0.3% year-to-date, so hitting the 0.625% midpoint requires the second half to run near the Q2 pace of 1.4%. That looks achievable given the 2.1% blended lease growth, lower turnover and the cut in expense guidance. For the third quarter, watch three things. First, whether Sunbelt new-lease declines narrow from about -8% as new supply dries up. Second, how much the RealPage legal costs grow. Third, whether the $252.5 million of pending sales close and the proceeds go to more buybacks. If per-share results still aren't growing once the sales and buybacks are done, the strategy is only keeping UDR at the same size per share, not increasing value.
Source: UDR Form 10-Q for the quarter ended June 30, 2026 (filed July 28, 2026), plus the Q2 2026 earnings release and supplemental data furnished on Form 8-K on July 27, 2026 (for guidance, regional and lease-rate data).