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Better Buy: UDR vs. Apartment Income REIT

Mar 06, 2021 by Matthew DiLallo

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Apartment Income REIT (NYSE: AIRC) UDR (NYSE: UDR)
Property count 26,599 apartment units 51,649 units
Property type 57% Class A / 43% Class B & C+ 57% Class A / 43% Class B
Geographic diversification 90% of its gross asset value is in eight primarily coastal markets (and Denver) A highly diversified portfolio across 21 coastal and Sun Belt markets
Location mix Urban markets 35%/suburban 65% Urban 42%/suburban 58%

Data source: Apartment Income REIT and UDR.

We expect that our Sun Belt markets will continue to capture job growth, migration trends, and demand for apartment housing that will be well ahead of national trends. While there were clearly favorable Sun Belt migration trends by both employers and households prior to COVID, this past year the trends accelerated. The primary reasons behind these favorable migration trends, including enhanced affordability, favorable business climates, and lower taxes, will still be with us well past the point we get the pressures associated with COVID behind us.
REIT Dividend Yield Dividend Payout Ratio (FFO) Credit Rating Leverage ratio
Apartment Income REIT 4.2% 87% BBB 7.1 times proportional debt-to-adjusted EBITDAre
UDR 3.5% 75% BBB+/Baa1 6.8 times net debt-to-EBITDAre

Data source: Apartment Income REIT and UDR.

REIT Recent price 2021 FFO (estimate at the midpoint) P/FFO
Apartment Income REIT $43 $1.98 21.5 times
UDR $43 $1.93 22.5 times

Data source: Apartment Income REIT and UDR.

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