UDR Inc. (UDR) 2Q26 First Take FFO beats, but blends miss slightly

Equity Research 27 July 2026 | 2:38PM PDT

UDR Inc. (UDR): 2Q26 First Take: FFO beats, but blends miss slightly

Operating Results: UDR reported 2Q26 core FFO of $0.64 versus GS/Visible Julien Blouin | Alpha consensus of $0.63/$0.63, and above 2Q guidance of $0.63. Same-store Goldman Sachs & Co. LLC revenue grew +1.8% year-over-year, above the GSe/consensus of 1.0%/1.0%, Ryan Treais same-store expenses grew +2.6% YoY (-160bps below GS estimate of +4.2% and | Goldman Sachs & Co. LLC -120bps below consensus estimates of +3.8%), which drove same-store NOI growth of +1.4% (well above GSe and Street at -0.3%). Shikhar Gupta | Goldman Sachs India SPL Leasing Spreads: 2Q blended lease rates tracked at 2.1%, below GSe/consensus of 2.2%, driven by renewals at (+4.2% in 2Q26 vs GS/consensus +4.5%/+4.7%) and new lease rate growth of -0.6% (above consensus of -1.3%, but worse than GSe of -0.5%). 2Q occupancy was 96.6%, slightly above GSe/consensus of 96.5/96.6%.

n We believe the blends miss, while minor, brings into focus the trajectory of blends heading into 3Q26 as consensus estimates imply no QoQ blends deceleration in 3Q26 (contrary to typical seasonality). In contrast, we are the lowest 3Q26 blends estimate on the Street at 1.75% as we assume 35bps of QoQ deceleration in blends (we are also the lowest 4Q26 blends estimate, -70bps below consensus). We believe commentary around July blends will be decisive towards determining whether 3Q26 blends estimates are achievable (since July is typically the seasonal high watermark for 3Q).

Guidance increased: In conjunction with 2Q26 results management increased the low end of their previously issued full-year core FFO guidance range by $0.02 to a new range of $2.49-$2.57 ($2.53 at the midpoint) vs. the prior range of $2.47-$2.57 and midpoint of $2.52. Same-store revenue/expense/NOI growth guidance was increased by +12.5bps/-50bps/50bps at midpoints respectively to give new midpoints of +1.375%/+3.25%/+0.625% vs. GSe at +0.8%/+3.5%/-0.25% and consensus at +1.2%/+3.8%/-0.1%. Company also provided 3Q core FFO guidance of $0.63-$0.65, $0.63 at the MP, vs GSe/consensus of $0.62/$0.64.

Dispositions: During 2Q26 UDR sold a 266-unit apartment community in Nashville, TN for total proceeds of $41.5mm in 2Q. UDR is under contract to sell three communities with a combined 808 units for $252mm, and expects the transactions to close in the third and fourth quarter.

Share Repurchases: UDR repurchased $200m worth of shares in 2Q (5.5mm shares at an average share price of $36.49 per share) well above GS estimates of $125Mn in 2Q).

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Implication: We expect UDR to perform in-line on Tuesday on the back of a 2026 guidance increase but blended rental rate growth that missed Street expectations - bringing into focus the trajectory of blends heading into 3Q26.

Questions for management: On the call tomorrow we will look for color on the call regarding July rent growth trends (including insights into sunbelt trends), renewal offers into future months, whether concessions are starting to ease in the sunbelt, and which markets/regions are seeing the strongest and weakest ramps through July.

2Q26 Operating Results in Charts

Exhibit 1: 2Q26 results vs GS estimate $ in millions except per-share and percentage data 2026 Actual Estimate Difference Consensus ($ in millions except per share data and percent 2QA 2QE

SS Results Renewal Rate Growth 4.2% 4.5% -30 bps 4.7% New Lease Rate Growth -0.6% -0.5% -10 bps -1.3% Blended Rate Growth 2.1% 2.2% -6 bps 2.2% Occupancy 96.6% 96.5% 7 bps 96.6%

Same Store Revenue, YoY 1.8% 1.0% 85 bps 1.0% Same Store Expense, YoY 2.6% 4.2% -160 bps 3.8% Same Store NOI, YoY 1.4% -0.3%…