UDR, Inc. BofA NY Global Real Estate Conference 2026

Thanks, Yana. I appreciate that introduction, and you knocked off the first thing on my list, which was to introduce the team. From there, I want to make sure everybody's got a presentation. If you're online, you can just look under udr.com presentation, and you'll be able to follow along should we reference that materials. Before I begin, thanks for your time today. Appreciate it. We've got about 30 minutes together. We'll make the best use of that and convey as much information as we can in that timeframe. Let me start off with maybe three topics. A brief overview of UDR. You can see it if you already don't know. 54 years as a public company, $20 billion enterprise, S&P 500, about 60,000 apartment homes across 20 markets. If you will, we are the remaining national apartment REIT. Second, the apartment business. I've been at it for a number of years, probably over 35, so I'm looking around the room and saying I might be one of the more senior people in the room, and I've seen cycles.

Where are we at? The truth is, I like where we're at. I can unequivocally say I think 2027 is going to be a better year than 2026, as it references to the number of markets that are growing revenue next year over this year. Feels good. Second, why? Supply has finally abated, and when we build a 50-year high, it eventually gets absorbed, and we're seeing that inflection point across many of our markets and feel positive about that, and Mike would be glad to fill you in on more of those markets. Second, rent-to-income levels. I want to say they're at record lows, but they are below the norms, giving us pricing power and feeling that we can move rents, and our residents have the capability to pay those higher rents.

Then affordability. Single-family ownership remains near its all-time lows, if you will, the affordability of alternative products. So we feel like those three drivers, coupled with what we would view as a robust economy paints a good picture for the future, if you will. So let's come to more current events. Talk a little bit about second quarter, third quarter, and what trends we're currently seeing. A reminder, second quarter was a beat and raise that on a sequential basis, Mike and team produced number one same-store revenue expense and NOI growth on a sequential basis. That's our primary leasing season at that window of time, so very good results.

Something that we are very proud of and focus on is our relative performance by market, and Mike hit 70% winning percentage. I am hopeful that my fantasy team wins that same percentage this year, but I will take Mike's 70% over anything else. Second, looking towards the third quarter, it feels a lot like the same of the second. A very strong operational quarter coupled with bottom line that feels pretty darn good. We will see where we are and finish up the quarter in the next 15 days. On the capital allocation, for a number of years, we have given you what we call our heat map. Sources of capital, uses of capital, where do we see that Dave can go through. Clearly, we think the stock is very cheap at this point. In fact, year-to-date, we have sold over $600 million of assets and repurchased over $400 million in stock.

We think that is our current highest and best use, but Mike could go through it more. I am sorry, Dave will go through it more in detail. With that, I will stop, and we can open it up to Q&A.

Great. It is a lot there, Yana, but I appreciate it. Maybe starting with page 11, if I could direct your attention there and give you a little bit of color on where we have been, where we are going, cover some of the regions, and also get into the strategy. Before I do so, I do want to just mention that 1.9% blend that we had in the first half of the year was about 15 basis points higher than our midpoint and about 70 basis points higher than the pure average. Given a diversified portfolio, very strong numbers, feel good about where that ended up. To Tom's point, that translated into very strong sequential numbers, and it set us up for the back half of the year.

Specific to where we are at and where we are going for recent update, still good with that 1.5%-2% blends in the back half of the year. Expectations are we will probably still run in that 96.5% range. Still looking to drive our other income in that 5%-7% growth. About 3x what we have been achieving on blends. Continue to see success as it relates to bad debt, and ultimately this is leading to higher revenue growth and cash flow, which obviously we are very focused on. I think specific to maybe some of the markers that we are seeing out there today, we always look at current occupancy, but even more importantly is that leading indicator of our 30-day trend.

Our 30-day trend, just to kind of give you a color on that, means if nobody else came in to rent another apartment today, and I did not get any more notices, we are at 96% 30 days out, and that compares to 95.5% a year ago. A bit stronger fundamentals as it relates to occupancy. That has led to market rents being about where we would expect this time of year, and just to size that for you, over the last 30 days, we have seen market rents come off about 50 basis points. Which, if you think about historically, what you see typically this time of year, they usually drop between 50 to 80 basis points. Last year at this time, they dropped 200 basis points, and a lot of that has to do with the backdrop of occupancy.

You can see the fundamentals are a little bit stronger today. It is leading to, I would say, 1 to 1.2 weeks in terms of concessions, which is a bit better than last year. A bit more normalized, if you will, coupled with lower retention. We have a lot of positive signs today compared to last year, so feel good about kind of that guidance and where we are going. Specific to strategy, I think typically what you have seen from UDR is running a little bit hotter in terms of occupancy in the fourth quarter, first quarter, usually in the high 96s to even 97%. We are looking to run, again, closer to 96.5%, continue to test the market in terms of both market rents and renewals, and in fact, we are actually sending out renewals about 50 basis points higher in the fourth quarter compared to the third quarter.

We want to test the waters. We have a little bit of a different backdrop, if you will. Just as a reminder, we actually have lowered our lease expirations in the fourth quarter to around 15%, which is typically running between 20%-23%, so we just do not need as many leases. We have set that up to be able to try to test the waters on rents, still have a healthy occupancy, and ultimately drive our earn-in as we go into next year. We want to make sure the fundamentals, the foundation is set as we go into 2027. That is how we are thinking about it, Yana.

Yeah. So we effectively moved 5% out of the fourth quarter. I would say 2% went into the second quarter and about 3% into the third quarter. So we are running just over 30% expirations in 2Q and 3Q at this point, both quarters.