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UDR – Market expectations are for Uniform ROA to expand to all-time highs, but management may have concerns about their next-generation operating platform, state regulations, and short-term rentals

October 19, 2020

  • UDR, Inc. (UDR:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 86.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about their next-generation operating platform, state regulations, and short-term rentals
  • Specifically, management may be downplaying concerns about the impact of unemployed residents on their collections and they may be overstating the potential of their next-generation operating platform. Furthermore, they may have concerns about constraints from state regulations, the continued decline of short-term rentals, and sustainability of occupancy in One William deal in New Jersey. Moreover, they may lack confidence in their ability to sustain their returns, achieve efficiency gains, and maintain their traffic.