UDR Upgrades With New York Assets

8/12/2011 | By Carisa Chappell

UDR Upgrades With New York Assets
Apartment REIT, UDR Inc. (NYSE: UDR) is expanding its portfolio and has rapidly acquired a number of assets in the New York market.

Most recently UDR announced the acquisitions of Dwell95, an apartment community in the city's Financial District. The Colorado-based company acquired the apartment for $325 million, and it's expected to close on the deal later this month.

"Dwell95 provides a unique opportunity to further our presence in the Financial District, an area of Manhattan that we believe will continue to benefit from the redevelopment of the World Trade Center and surrounding areas," said Tom Toomey, president and CEO of UDR.

Toomey added that the company is focused on buying assets in coastal markets with higher rent levels. The recent acquisitions will be UDR's fourth Manhattan deal this year.

UDR's portfolio is comprised of apartments in what he calls "urban and high quality" locations that attract a tenant base in the age range of 25 to 30.

"We're in the right places to grow. New York and Boston were markets that were underrepresented in our portfolio," Toomey said.

So far this year, UDR has acquired $1.5 billion in assets. In August alone, UDR announced acquiring three assets for a total of $687 million. Two are in New York, Rivergate and 21 Chelsea, and are expected to close this quarter. The third, View 14, already closed and is located in Washington.

Toomey said the company plans to acquire more properties in the Southern California market in the near future. It also has entered the San Francisco market.

Over time, UDR has moved from the suburbs to a more urban-oriented product, according to Toomey. He said the more supply-constrained cities like Boston, New York, Washington and San Francisco all point to the demand for urban properties.

"I think it's a good time to invest in apartments," said Toomey, who added that there are both short-term and long term-positives in the apartment sector.

"Generally, there's a larger group of renters entering their prime renting year, and that, coupled with the low supply, indicates that apartments have a very good run," he said.

Even amid a sluggish economy, Toomey noted that UDR's earnings in the second quarter were up 15 percent from the previous year and that the company witnessed positive earnings for the ninth consecutive quarter.

"We slightly exceeded expectations at the beginning of the year, and I think that trend will continue," he said.