UDR, Inc. (NYSE: UDR) stock rose over 3.6% on 30th October, 2018 (As of 11:34 AM GMT-4; Source: Google finance) after the company posted better than expected results for the third quarter of FY 18 and increased the full-year 2018 guidance ranges. At the end of the third quarter, the Company’s development pipeline totaled $808.5 million at its pro-rata ownership interest, and was 98 percent funded. All of the Company’s development communities were in lease-up as of the end of the third quarter. The development pipeline is currently expected to produce a weighted average spread between stabilized yields and current market cap rates of 150 to 200 basis points. At the end of the third quarter, the Company’s DCP investment, including accrued return, totaled $222.7 million. Activity during the quarter consisted of an investment in three DCP projects for a total capital commitment of $73.1 million. The communities are located in Philadelphia, PA, Orlando, FL, and Santa Monica, CA, will include 867 homes and have a weighted average yield and term to maturity of 10.0 percent and 4.9 years.
Meanwhile, during the quarter, the Company entered into a contract to sell Circle Towers, a 46 year old, 604-home community located in Fairfax County, VA, for $160.0 million or $264,900 per home. During the third quarter the community had a weighted average monthly revenue per occupied home of $2,049. The transaction is scheduled to close during the fourth quarter subject to customary closing conditions.
UDR in the third quarter of FY 18 has reported the adjusted earnings per share of 7 cents, which is in line with the analysts’ estimates for the adjusted earnings per share of 7 cents. The company had reported the adjusted revenue growth of 6 percent to $266.14 million in the third quarter of FY 18, beating the analysts’ estimates for revenue of $258.83 million. This increase was primarily attributable to growth in revenue from operating and lease-up communities. In the third quarter, same-store NOI increased 3.9 percent year-over-year, driven by same-store revenue growth of 3.8 percent and same-store expense growth of 3.5 percent. Weighted average same-store physical occupancy increased by 30 basis points year-over-year to 96.9 percent. The third quarter annualized rate of turnover was 63.4 percent, representing a 40 basis point increase year-over-year. In the third quarter, sequential same-store NOI decreased by 0.2 percent, driven by same-store revenue growth of 1.2 percent and same-store expense growth of 4.9 percent. Weighted average same-store physical occupancy decreased by 10 basis points sequentially to 96.9 percent.
The company provided earnings per share (EPS) guidance of $0.48-0.49 for the fourth quarter of 2018, compared to the Thomson Reuters consensus estimate of $0.49. UDR also updated its FY 2018 guidance to $1.95-1.96 EPS.