UDR Announces First Quarter 2009 Results

UDR, Inc. (NYSE: UDR), a leading multifamily real estate investment trust (REIT), today announced its first quarter 2009 results.

The Company generated Funds from Operations (FFO) of $58.1 million, or $0.37 per diluted share, for the quarter ended March 31, 2009, equal to the first quarter of 2008. Both 2009 and 2008 per share results reflect the issuance of 11.4 million shares of common stock distributed with the Company’s January 29, 2009, special dividend. The results exclude the effects of the implementation of FASB Staff Position APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).

During the first quarter of 2009, the Company repurchased $160 million of its outstanding notes. Approximately $108 million was repurchased in a tender offer for its 6.5 percent notes due June of 2009, and $52 million of the repurchases were primarily for convertible debt maturing in 2011. These repurchases were completed in the open market at an average discount of 18.6 percent. The open market purchases resulted in a net gain of $8.9 million, or $0.06 per diluted share.

A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company’s earnings release.

"UDR is well positioned to weather the challenging environment with a strong and flexible balance sheet and an uncompromised focus on operations,” said Tom Toomey, President and CEO of UDR. "While we do not take this flexibility for granted, we do acknowledge the freedom it affords us to focus on operating our business as best we can in a turbulent economic environment.”

Mr. Toomey continued, "During the first quarter of 2009, UDR delivered strong operational results. Our growth in same-store net operating income is the result of our transformed portfolio, our focus on driving occupancy and a streamlined cost structure. We anticipate that macro-economic challenges will continue to impact pricing throughout our portfolio, and we will remain focused on maintaining a high-occupancy level to recapture pricing power when the cycle turns.

"Despite ongoing uncertainty in the broader economy, we remain confident in UDR’s strategic direction,” Toomey added. "Our communities are located in attractive markets and offer an affordable solution to home ownership; our associates are focused on outperforming their markets; and we have the financial flexibility to maintain that focus through all stages of the economic cycle,” Toomey concluded.

Operations

The Company generated same-store net operating income (NOI) growth of 1.9 percent for the first quarter 2009. Same-store physical occupancy increased 20 basis points to 94.7 percent, and total income per occupied home grew to $1,176, up 30 basis points from a year ago.

Revenue growth of 0.4 percent was due primarily to gains in income per occupied home in a number of the Company’s larger markets, including Metropolitan DC, and San Francisco and San Diego, CA, offset by revenue declines in Orange County, CA, and Orlando and Jacksonville, FL. Same-store expenses decreased by 2.7 percent as a result of proactive cost management across all aspects of the cost structure and some favorable regional expense comparisons.

Technology Platform

The Company continues to pursue additional technology-based marketing channels to expand its outreach and increase the efficiency of its on-site personnel. UDR’s call center, its website and mobile web capabilities drive traffic to its communities "24/7,” effectively increasing the Company’s hours of operation. During the quarter 56 percent of UDR’s signed leases were originated over the Internet, demonstrating the power of the Company’s technology platform, award winning websites and the accessibility it offers to residents and prospects.

In January, UDR rolled out an electronic payment capability across its entire portfolio. Automated Clearing House (ACH) payments automatically deduct rent payments from residents’ bank accounts on a monthly basis. By the end of April, roughly 23 percent of the Company’s resident base had adopted the ACH payment option. This enhances UDR’s cash management, reduces costs and enables UDR’s community managers to maximize their time enhancing the customer service experience.

Portfolio Investment Activities

UDR has seven active development projects and one active redevelopment project underway, comprising 2,559 homes, at a total cost of $421 million, with a remaining capital funding commitment of just $3.5 million. Management anticipates delivery of roughly 77 percent of this pipeline in 2010, when the economy should begin to recover and demand is expected to increase. In addition to its active developments and redevelopments, the Company has one $29 million presale project underway, which is scheduled for completion in the second half of 2009.

The Company does not intend to start any additional development projects in 2009, nor did the Company complete any acquisitions or dispositions during the quarter.

Balance Sheet

At March 31, 2009, UDR had capacity of $1.1 billion from cash, undrawn credit facilities and notes receivable, giving it ample flexibility to meet its capital needs for its development activities and debt maturities through the end of 2010. In addition, the Company’s $3.2 billion unencumbered asset base (book value) provides it with additional flexibility to address capital needs.

UDR’s total indebtedness at March 31, 2009, was $3.4 billion. The Company ended the first quarter with 81.0 percent fixed-rate debt, blended interest rate of 4.5 percent and a weighted average maturity of 6.5 years.

Current cash and available credit capacity is sufficient to fund all of the Company’s debt maturities through at least 2010, as presented in the table below:

Subsequent Event

On May 4^th, UDR announced that it had received payment of a $200 million note receivable related to the Company’s March 2008 portfolio sale. The Company intends to use proceeds to fund general corporate obligations.

2009 Guidance

The Company is reiterating previously announced 2009 guidance. UDR believes that financial results for 2009 will be affected by ongoing uncertainty related to global economic trends and events, credit market volatility, projected job losses in key markets, financing activities, and other factors. All guidance is based on current expectations of future economic conditions and the judgment of the Company's management team.

For full year 2009, the Company is estimating FFO of $1.23 to $1.35 per diluted share.

Assumptions for guidance in 2009 include:

• A 1.0 percent to 3.0 percent decline in same-store revenue year-over-year;
• A 1.5 percent to 2.5 percent growth in same-store expense year-over-year;
• A 3.0 percent to 5.0 percent decline in same-store NOI year-over-year;
• No new development starts or asset acquisitions or sales; and
• Guidance excludes estimated impact from APB 14-1.

Supplemental Information

The Company offers Supplemental Financial Information that provides details regarding the financial position and operating results of the Company. This Supplemental Information is available on the Company's website at: www.udr.com.

Conference Call and Webcast Information

UDR will host a webcast and conference call on May 6^th at 10:00 a.m. ET to discuss first quarter results. The webcast will be available on UDR's website at www.udr.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register and download and install any necessary audio software.

To participate in the teleconference, dial 877-941-2332 for domestic and 480-629-9722 for international.

A replay of the conference call will be available through May 12^th, 2009, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4057831, when prompted for the pass code.

A replay of the call will be available for 90 days on UDR's website.

Full Text of the Earnings Report and Supplemental Data

Internet -- The full text of the earnings report and supplemental data will be available at the UDR website, www.udr.com.

Mail -- For those without Internet access, the first quarter 2009 earnings release will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-283-6121.

Forward-Looking Statements

Certain statements made in this press release may constitute "forward-looking statements." The words "expect," "intend," "believe," "anticipate," "likely," "will" and similar expressions generally identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors, which include, but are not limited to, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, the impact of competition and competitive pricing, acquisitions or new developments not achieving anticipated results, delays in completing developments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels, expectations concerning the Vitruvian Park project, expectations that automation will help grow net operating income, expectations on post-renovated stabilized annual operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in the Company's expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.

About UDR, Inc.

UDR is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted U.S. markets. As of March 31, 2008, UDR owned 44,571 apartment homes and had 2,046 homes under development and another 289 homes under contract for development in its pre-sale program. For over 37 years, UDR has delivered long-term value to shareholders, the best standard of service to residents, and the highest quality experience for associates. Additional information can be found on the Company’s website at www.udr.com.