UDR Q3 2022 Earnings Call Transcript

Quartr
Provided by Quartr
October 27, 2022

There are 17 speakers on the call.

Operator

And welcome to UDR's Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. It is now my pleasure to introduce your host, Senior Director of Investor Relations, Trent Trujillo, thank you. You may begin.

Speaker 1

Welcome to UDR's quarterly financial results conference call. Our press release and supplemental Disclosure package were distributed yesterday afternoon and posted to the Investor Relations section of our website, ir.udr.com. In the supplement, we have reconciled all non GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. Statements made during this call, which are not historical, may constitute forward looking statements. Although we believe the expectations reflected And any forward looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be met.

Speaker 1

A discussion of risks and risk factors are detailed in our press release and included in our filings with the SEC. We do not undertake a duty to update any forward looking statements. When we get to the question and answer portion, we ask Management will be available after the call for your questions that did not I will now turn the call over to UDR's Chairman and CEO, Tom Toomey.

Speaker 2

Thank you, Trent, and welcome to UDR's Q3 2022 conference call. Presenting on the call with me today are Senior Vice President of Operations, Mike Lacey and President and Chief Financial Officer, Joe Fisher, who will discuss our results. Senior Officers Andrew Kanter and Chris Van Enns will also be available during the Q and A portion of the call. To begin, we continue to see exceptional results and are in a healthy multifamily operating environment. Highlights of the Q3 include the following sequential same store revenue growth of nearly 5% Year over year, same store revenue grew almost 13% and NOI was nearly 16% higher.

Speaker 2

And we continue to capture additional accretion from our 2021 acquisitions. These results translated into 18% year over year growth in FFOA per share and drove our 3rd guidance raised this year, which Mike and Joe will discuss in further detail. To date, the financial health of our resident has remained strong. Employment growth continues to demonstrate resiliency. Wage growth remains robust.

Speaker 2

Traffic is healthy. Rent to income levels of incoming residents has not deteriorated. Cash collections continue to improve. Concessions are almost non existent across the portfolio and the regulatory environment has been stabilizing. These factors combined with our favorable, relative affordable versus alternative housing options and reasonable new supply expectations Create a positive near term outlook for multifamily.

Speaker 2

In short, Main Street has shown incredible resiliency. Moving on, all in, we continue to believe UDR is well equipped to manage whatever macro environment we face based on what we know right now and what we can control. First, our customer remains financially sound. 2nd, our jump off point for 2023 has never been better as our same store revenue earn in is roughly 5% is effectively locked in at this point. 3rd, our continued focus on innovation and culture should continue to enhance our margin growth.

Speaker 2

4th, prior FFOA per share headwinds like development and lease ups become tailwinds in 2023. And last, our balance sheet remains highly liquid with over $1,000,000,000 of capacity. That said, we are fully aware of growing concerns over where the macro environment is trending and the challenges our business could face moving forward. 2 areas to highlight include: 1st, elevated inflation. We like most every business are feeling the impact of inflation across our expense structure.

Speaker 2

Thus far, we've been able to pass these costs On to our residents in relatively short order given our standard 12 month lease structure. Specific to the 3rd quarter, A portion of our elevated expense growth was anticipated as we continue to push rental rate growth, which resulted in higher turnover and elevated repair and maintenance cost. However, building a better 2023 rent roll At the expense of short term cost pressures is the value creating trade for a 70% margin business like ours. And second, our cost of capital. Our cost of capital has increased materially since the Q1.

Speaker 2

As such, we pivoted to a capital light strategy and pared back opportunistic external growth. Our balance sheet remains fully capable of supporting all planned capital uses and with less than 2% Of consolidated debt maturing over the next 3 years, our interest rate risk is minimal. Moving on, we continue to build on our position as a recognized global ESG leader with the publication of our 4th annual ESG And a 5 star designation from GRESB, the highest ESG rating possible. Our GRESB survey score of 87 was the highest in our history and an achievement that all UDR stakeholders should be proud of. In closing, I remain optimistic on UDR's future prospects.

Speaker 2

We have a highly talented experienced team with a track record of performance irrespective of the economic environment. Combined with our culture that fosters collaboration and innovation mindsets, we will continue to advance UDR and our industry. To my fellow associates, I express my deepest gratitude for all that you do. With that, I will turn the call over to Mike.

Speaker 3

Thanks, Tom. To begin, strong sequential same store revenue growth of 4.7% drove year over year same store revenue and NOI growth of 12.7% 15.5% on straight line basis. This was an acceleration of 150 and 110 basis points respectively compared to our 2nd quarter results and were better than expected. Key components of these results and our demand drivers included: 1st, year over year effective blended lease rate growth remain firmly above historical norms at 13.1%. We traded a nominal amount of occupancy to achieve this rental rate growth, but also improved our 2023 rent roll and locked in more of our approximately 5% 2023 earning.

Speaker 3

This will be the highest earned in our history by at least 200 basis points. 2nd, our in place residents are increasingly paying rent on time. Collection rates improved sequentially in the Q3 and the number of long term delinquent residents in our portfolio continued to decline, which reduced our bad debt reserve and accounts receivable balances. 3rd, portfolio wide rent to income ratios remain consistent with history in the low 20% range. Employment and wage growth remain strong and we have seen no evidence to date of residents choosing to double up.

Speaker 3

4th, traffic and applications remain above typical seasonal levels, allowing us to continue to push rate growth. 5th, concessions are de minimis across our portfolio with exceptions being 1 to 2 weeks on average in specific submarkets of San Francisco, Washington D. C. And Boston. And last, due to rising mortgage rates, renting an apartment is approximately 50% less expensive Then owning a home versus 35% less expensive pre COVID.

Speaker 3

During the Q3, only 7% of residents that moved out Did so to purchase a home. This is the lowest level we have seen and is 35% lower compared to a year ago. In total, we believe demand for apartments remains broad based. We continue to monitor the financial health of our residents for signs of potential distress across our portfolio. But the U.

Speaker 3

S. Consumer and our residents have proven resilient thus far and we've yet to see any meaningful cracks in our forward demand indicators. Moving on to expenses. Quarterly same store expenses rose 7.2% on a year over year basis. While this is higher than usual, Our margin continues to expand as we operate a 70% plus margin business.

Speaker 3

Some of this expense growth was in our control, while the remainder was not. First, what was in our control? We continued to push rent growth, which resulted in 4 50 more unit turns than a year ago. Positively, we re leased these homes at 22% higher average effective rate or 900 basis points above our average Renewal rate for the quarter. In addition, we regained 200 homes from long term non payers.

Speaker 3

Combined, this negatively impacted R and M and A and M during the quarter by $1,600,000 which should generate approximately $7,000,000 and incremental revenue over the next 12 months. Had we not made these trades, our year over year same store expense growth would have been approximately 5.7%. Utilities also contributed to our above trend growth as energy costs increased. However, As we are typically reimbursed by residents for approximately 70% of this line item, same store NOI was not meaningfully impacted. Next, what we cannot control, higher real estate taxes, which comprise 40% of all expenses, grew by over 5%.

Speaker 3

Pressure points consisted of Texas and Florida, where valuations increased, and New York City, where the burn off of our 421 abatement continues. Insurance, which is a relatively small expense for us, also increased dramatically due to higher premiums and claims. Looking ahead to the Q4, we saw the return of typical seasonality in market rents after Labor Day. This factor combined with our pricing strategy to drive rate growth drove a quicker capture of our loss to lease. For October, Blended lease rate growth is expected to be roughly 7% to 8%, comprised of new lease rate growth of 4.5% to 5% and renewals of approximately 10%.

Speaker 3

For the Q4, we expect blended lease rate growth to average 6% to 7% with the sequential deceleration due to toughening year over year comps. Taken together, we increased our full year 2022 same store revenue and NOI guidance ranges for the 3rd time this year in conjunction with our release yesterday. We now expect or an increase of 50 basis points and 38 basis points respectively. Finally, we are continuing to drive forward on innovation with the intent of further expanding our 325 basis point controllable operating margin advantage versus peers. Initiatives underway are expected to generate roughly $40,000,000 in incremental NOI by year end 2025 and will be increasingly focused on revenue upside versus expense controls.

Speaker 3

These include: 1st, launching building wide WiFi that allows whole building connectivity, a seamless setup at move in for new residents and enhanced control over smart hubs To reduce energy consumption and improve Scope 3 emissions, UDR has made a capital investment in equipment, which provides improved economics and more control over the scope of the project versus traditional bulk deals. We believe this initiative could generate more than $20,000,000 and incremental NOI once fully rolled out by 2025. 2nd, leveraging advanced resident leads and virtual leasing technology To better generate qualified leads and track prospects, optimize marketing activities, close leases faster and enhance real time pricing. 3rd, simplifying our move in process to reduce vacant days while simultaneously offering a better tool to sell other income initiatives such as renters insurance, parking and storage, thereby increasing our share of wallet. 4th, Improving our dynamic work order scheduling through enhanced vendor management tools, which should reduce vacant days through the turn process, while improving asset management to better assess the repair versus replace decision.

Speaker 3

And 5th, expanding the number of communities we are able to operate without dedicated on-site personnel from 25 today to 35 over the next 12 months. This approach whereby leasing and resident services activities conducted virtually improves our margin and helps mitigate inflationary costs. Today, we have increased the number of apartment homes managed per associate by 60% versus pre COVID levels. Last, a special thanks goes out to all our teams for their ongoing dedication, but especially our teams in Tampa and Orlando. Natural disasters, especially those of magnitude of hurricane Ian are unpredictable, and I applaud your round the clock efforts to safeguard our communities, Protect our residents and return our properties to normal operations.

Speaker 3

And now, I'll turn the call over to Joe.

Speaker 4

Thank you, Mike. Topics I will cover today include our Q3 results and our updated outlook for full year 2022, a summary of recent transactions and the capital markets Activity and a balance sheet and liquidity update. Our 3rd quarter FFO as adjusted per share of $0.60 achieved the high end of our previously provided guidance range and was driven by strong same store revenue growth and further accretion from our 2021 acquisitions. For the Q4, our FFOA per share guidance range is $0.60 to $0.62 or a 2% sequential and 13% year over year increase at the midpoint. This is supported by continued strength in sequential same store NOI growth, partially offset by increased interest expense given rising rates.

Speaker 4

These same drivers led us to increase our full year 2022 FFOA per share and same store guidance ranges for the 3rd time this year. We now anticipate full year FFOA per share of $2.32 to 2.34 With the $2.33 midpoint representing a $0.02 or 1% increase versus our prior full year guidance and a 16% increase versus full year 2021. The guidance increase is driven by an approximately $0.02 benefit from improved NOI and an approximately $0.005 benefit from lower G and A, offset by approximately $0.005 of higher interest expense. Next, the transactions and capital markets update. 1st, in alignment with our shift towards a capital light strategy earlier in 2022, Our Q3 external growth consisted solely of the previously announced $102,000,000 DCP investment into a portfolio of stabilized communities at an 8% return.

Speaker 4

Because recapitalizations of stabilized assets have lower risk profiles, this is a relatively lower return versus our typical DCP investment. We funded this investment with $100,000,000 of proceeds from the settlement of approximately 1,800,000 shares under our previously announced forward equity agreements. Next, during and subsequent to the quarter, we repurchased a total of 1,200,000 common shares at a weighted average price of $41.14 per share for a total consideration of approximately $49,000,000 These buybacks were executed at an average discount at consensus NAV of 24% and a high 5% implied cap rate, representing a very accretive use of capital. Finally, during the quarter, we entered into an agreement to sell 1 community in Orange County, California for approximately $42,000,000 This transaction is scheduled to close during the Q4. Speaking more broadly to the transaction market, Pricing on the majority of multifamily transactions suggest cap rates are priced 75 to 100 basis points higher than at the beginning of the year, depending on market and asset quality.

Speaker 4

However, volume has been lighter than expected, so additional price discovery is needed. All told, the ongoing volatility in the macro environment and an elevated cost of capital relative to earlier in 2022 Keep us selective in our capital deployment. We are fortunate to have a variety of external growth levers we can continue to pull to create value and drive earnings accretion. Finally, our investment grade balance sheet remains liquid and fully capable of funding our capital needs. Some highlights include: First, we have only $115,000,000 of consolidated debt or approximately 0.5% of enterprise value scheduled to mature through 2024 After excluding amounts on our credit facilities and our commercial paper program, our proactive approach to managing our balance sheet has resulted in the best 3 year liquidity outlook in the sector and the lowest weighted average interest rate amongst the multifamily peer group at 3.1%.

Speaker 4

2nd, we have $1,100,000,000 of liquidity as of September 30, which is comprised of approximately $900,000,000 of capacity on our line of credit And nearly $200,000,000 of unsettled forward equity agreements, providing us ample dry powder and strength. 3rd, our leverage metrics continued to improve. Debt to enterprise value was just 29% at quarter end, while net debt to EBITDAre was 6 times down more than a full turn from 7.1 times a year ago. We expect year end debt to EBITDAre and fixed charge coverage We'll further improve to the mid five times range given our capital light external growth strategy and continued NOI growth. By year end 2022, both metrics should be approximately half a turn better versus pre COVID levels.

Speaker 4

Last, our approximately $370,000,000 of developments and lease up have been a drag on 2022 earnings, but are expected to benefit future earnings by approximately $0.05 per share based on a 6.5% weighted average stabilized yield. Stabilization of these developments should improve our run rate EBITDA and further enhance our leverage metrics. Taken together, our balance sheet remains in excellent shape, Our liquidity position is strong, our forward sources and uses remain balanced and we continue to utilize a variety of capital allocation competitive advantages to create value. With that, I will open it up for Q and A. Operator?

Operator

Thank you. At this time, we'll be conducting a question and answer A confirmation tone will indicate your line is in the question Our first question comes from Nick Joseph with Citi. Please proceed with your question.

Speaker 5

Thanks. Joe, you talked about the cost of capital changing, leverage trending down and the buybacks in the quarter and I guess in October as well. Yes. The stock is a bit below kind of the average cost you've been acquiring at. What's the appetite and how would you think about funding additional share buybacks from here?

Speaker 4

Hey, Nick. Thanks for the question. So yes, we did pivot a little bit as we move throughout the year obviously. So with the Equity issuance back at the end of 1Q, up in the high 50s. And as cost capital has changed and cut price discovery has been occurring, we've pivoted over and Shifted some of our development plans back into next year and then obviously shifted to the buyback.

Speaker 4

So at this point in time, I wouldn't say there is a Set dollar target that we are going after. We do really like the economics in terms of discount to NAV, the implied cap up in kind of the high 5 is in a pretty compelling IRR on that purchase, but we're going to continue to monitor what's going on in the macro environment, What's taking place with our cost of capital and the price of the stock, what's going on with sources and uses, and I would say sources and uses in a pretty phenomenal place at this point, given we still have Almost $200,000,000 of equity available from that issuance in March, plus a disposition that we mentioned here that should close in the 4th quarter And then free cash flow against a relatively small development commitment schedule. So we have the capacity, so we're going to continue to monitor those factors, but no set target today.

Speaker 5

Thanks. That's helpful. And then just on the DCP program, how do you monitor the credit profile? And And obviously, there was a default in the supplemental, but are there any changes or indications of additional stress in that portfolio?

Speaker 6

Hey, Nick, this is Andrew. We regularly interact with our different partners throughout the Process, we're getting regular reports from them. We have 3rd party consultants during the construction period. So we're regularly interacting with them. As it relates to 1532, we think this is unique to our DCP portfolio.

Speaker 6

It was the perfect storm. We had an early bankruptcy with 1 of the key subs followed by delays by other subs as well as COVID, which caused a 2 year delay of the delivery of that building, between the delay and the COVID impacts, it added to the Cost of the building resulted in the senior loan interest and the pref accrual eating through the equity and the economics of the deal for the developer. So when the senior loan finally matured, we were in a situation where the developer was unable to refi due to the lower NOI, which resulted in the default and then we stepped in per the terms of the agreement and bought the loan from the bank. We've initiated foreclosure. The building leased up during a high, obviously, concessionary environment.

Speaker 6

Obviously, rents fell a lot in San Francisco. It's One of the markets that was probably impacted the most by COVID. But overall, we feel comfortable With the portfolio, it's very diversified across all our DCP investments, it's laddered, it's across the country and we see this as a one off circumstance driven by delays by the development of the building and the COVID market of San Francisco. To date, we've done 27 deals over the last 9 years for almost $900,000,000 We've monetized 12 of those for about 400,000,000 with a weighted average unlevered IRR of 11 to 12. So we've had great success and we've been doing it for a long time.

Speaker 5

Thank you.

Operator

Our next question comes from the line of Steve Sakwa with Evercore.

Speaker 7

Thanks. Good morning. I guess maybe I wanted to start with Mike on just operations and it sounds like you're still Pushing pretty hard on rent increases and occupancy has been very strong. And just trying to get your thoughts on kind of some of the looming dark Clouds and potential slowdown and reduction in job growth. I guess, how do you think about a potential pivot?

Speaker 7

And What are the sort of early warning signs you'd be looking to take your foot off the gas on rent increases and focus more on occupancy?

Speaker 3

Hey, Steve, that's a great question. And you're right. We've been focused at this for a while now. You've seen some 2Q, 3Q really driving our blended rate. As we move forward, you're going to see a little bit more of the same.

Speaker 3

Brent, renewal increases are going down that 9% to 10% range through December at this point. They feel like they're sticking. We're not seeing a lot of negotiations at this point. The leverage will be on the market rent side and we'll see where that shakes out. So to your point on kind of those warning signs, I said in my prepared remarks, we see a lot of green light still today.

Speaker 3

The one thing we're watching that's outside of that is just the cancels and denials. We have seen that increase a little bit and that's one of those warning signs that we'll watch closely, but again, we're seeing occupancy in that 96.5% to 97% range. So we feel comfortable about pushing right now and we think that we have More tailwinds as we go into next year with that.

Speaker 7

Okay. And then maybe one for Joe on just thinking about cost of capital changing, obviously, Stock prices are down, bond yields are up significantly. I'm just wondering how much have you changed your development hurdles On new deals that you might put a shovel on the ground on, I mean, how I guess how difficult is it to get a new deal to pencil in today's market?

Speaker 4

Yes. I think there's still quite a bit of unknowns out there, obviously, with price discovery taking place. In the prepared remarks, we talked about cap rates being up 75 to 100 basis points up into that plus or minus high fours range. That's kind of what we're hearing today, but obviously transaction volumes are off fairly materially. So So I think we're still going to go through a period of time here we get price discovery.

Speaker 4

And so we really need that to settle out before you can start to look at development in terms of That typical 150 plus or minus basis point spread that we need. So at this point, I wouldn't say we've pegged a required hurdle for development. We need the price discovery on transactions first. What we have done is, you've heard us talk about $185,000,000 development in Northern Virginia throughout the year. That's a densification play.

Speaker 4

That was supposed to start here in the Q3, but we've delayed the start of that, pending evaluating cost of capital, price discovery, etcetera. So I don't I can't say that we have a hurdle today other than we want to see where prices settle out.

Operator

Our next question is from Austin Wurschmidt with KeyBanc Capital Markets.

Speaker 8

Great. Thanks, guys. So in the 3 markets that you're seeing concessions, I guess, how broad based are those? And is there anything that concerns you like Slowing traffic, rising vacancy, etcetera, that would lead you to expect that concessions could increase further in those locations as we move later into the year or even into early

Speaker 3

Not as of right now, Austin, those same markets are the ones we've mentioned previously. We've seen anywhere from 1 to 2 weeks on average across the board there. So it hasn't really grown and it hasn't shrunk. And again, occupancy is still in a great place, traffic is still Coming into those markets and our blinded growth rate as you see in the supplement, still very high in those markets.

Speaker 8

Got it. And then Tom, maybe for you. I mean, you referenced a difficult macro backdrop that we're operating in and you guys have a really portfolio across various regions and price points, submarket locations, etcetera. And I'm just curious what segments of the portfolio you're most concerned about in the current environment. Just any thoughts there would be appreciated.

Speaker 2

Yes, Austin, I appreciate the question. When I was referring to macro, we tend to look at it in 2 lenses. 1, what's happening on Main Street with our residents. And Mike alluded earlier, we're not seeing any cracks. In fact, we have a very healthy resident profile, No diminution, if you will, of their credit, their quality, their payment patterns, their doubling up, All of that.

Speaker 2

So Main Street seems very strong. And when you look at Mike's blends in October, A 10 and a 5 on new and renewal is I would have taken that in my 30 year career. 29 years, that would be a great number. So that side of the equation is really strong and we'll see how it Really plays out and that's going to depend on employment. And we feel good about the employment picture looking down the horizon.

Speaker 2

With respect to the macro environment, the capital markets, obviously the Feds, the banks, everyone's trying to push down inflation with every tool they've got And they're going to succeed. And they're raising the cost of capital. You see our stock price. You see any other lending situation all being challenged by that. And so that's out of our control.

Speaker 2

Participate in that market, observe it and it influences us. We don't know where It's going. And will rates continue to rise? Will they plateau? Will they succeed in bringing down inflation?

Speaker 2

And that's going to be a lot of 23 as our dialogue on every one of the calls, every investor meeting will be what is the capital markets environment. It feels like a capital markets Session, is it going to be shallow or is it going to be deep? How long is it going to run? And no one really knows. I mean that is a case That will influence our capital light program.

Speaker 2

I think we've positioned ourselves well there And it will create opportunities. And so how do we pivot to those opportunities when they present themselves? And so we tend to think of it what we control, What we interact with and what opportunities we can generate and you see it in our operating numbers, really strong. We expect those to continue and we'll wait and see what cracks occur.

Speaker 9

Appreciate the thoughts.

Operator

Our next question comes from the line of Nick Yulico with Scotiabank. Please proceed with your question.

Speaker 7

Yes. This is Dan Oterkarico with Nick. Good afternoon. Question on your renter profile. Do you have a high level or regional level breakdown of your tenants by occupation, whether that's tech, finance, professional or other services and any differences between your West Coast, East Coast and Sunbelt tenants?

Speaker 3

Dan, we don't have that. I don't have it in front of me. Obviously, when somebody comes in, we get an idea of where they're coming from, But we don't have that in aggregated level at the market in front of me today.

Speaker 2

But what you can say is our average resident is 34, 35 years old, So well in their career, probably have some financial acumen and capability to manage their expenses and income levels what?

Speaker 4

100 and 3,000.

Speaker 2

So that's more that's not 10 years ago when we're renting the 25 year olds right out of college And they're making 60. So they seem to be very durable during this. And still, when you look at Thanks and the information they're giving about spending, savings, credit, that part of our resident profile looks pretty strong.

Speaker 7

Appreciate it, Tom. Thanks guys.

Operator

Our next question comes from the line of Jeff Spector with Bank of America.

Speaker 8

Great. Thank you. Good afternoon. I just want to confirm first, Are you seeing any price sensitivity in any of your markets?

Speaker 3

Hey, Jeff. I I think when you think about the price sensitivity, 1st and foremost, what we're seeing is seasonality. So you still have market rents that are above last year levels. Sure. In some markets, some markets you have some cracks here and there and that's where we see some of these concessions popping up.

Speaker 3

But for the most part, it's been pretty strong. I'll tell you kind of fast forwarding looking at 4Q versus 3Q. I do see a little bit more of a decel, if you will, in the Sunbelt And just coming off of obviously very high numbers, still going to be very strong. And the cost right now, Loss to lease is a little bit higher. Market rents are a little bit higher.

Speaker 3

Maybe a tailwind, if you will, going into next year.

Speaker 8

Great. Thank you. And then one follow-up for Joe on your comment on cap rates up 75 bps to 100 bps. And again, appreciate the comment that we need more transactions for price discovery. But I guess, where do you think values are then?

Speaker 8

Where How much are values down? Do you think, let's say, versus peak pricing at the beginning of the year?

Speaker 4

Yes, versus peak pricing, you're probably off 10% to 20%. It's going to really depend on which type of asset and market, right? So There were some more high flying markets that got very compressed from a cap rate perspective, really based off forward growth potential. So more of the Sunbelt markets that have probably come off a little bit more. You also have more of the B and C, kind of levered asset play that's come off a little bit more.

Speaker 4

And then you have some unique circumstances where maybe you have in place debt that's Assumable, where that asset price hasn't moved as much. So I think 10% to 20% for the time being is a fair range to utilize.

Speaker 8

Great. Thank you.

Speaker 4

Thanks, Justin.

Operator

Our next question comes from the line of Brad Heffern with RBC Capital Markets.

Speaker 10

Hey, everybody. I appreciate some of the detail you gave on the 1532 default already. I was just curious, it's a little difficult to tell exactly what the What comes with that asset? Is this still sort of a good outcome from the standpoint of you were able to buy the loan at a discount and you're sort of getting access to this building Lower placement costs or can you walk me through any of the math on how you expect that to turn out?

Speaker 4

Yes. So just a little bit on the process first, Brad, just In terms of the outcome, because the outcome isn't necessarily certain yet, right? We've purchased a senior loan. We intend to move forward with the foreclosure process, but That's expected in 1Q 2023. So the outcome isn't necessarily certain.

Speaker 4

What I would say is that from an economics perspective, When you look at replacement costs for this asset, our basis is probably plus or minus $87,000,000 which equates to about $640,000,000 at the door. Replacement costs as well in excess of $100,000,000 given development costs today, so up in probably the $800,000,000 plus or minus range. So relative to replacement cost, very good outcome. From a yield perspective, the yield on our cost on our cash basis is probably in the mid-4s Based off that basis, on a fully accrued basis, including the accrued pref, somewhere in the mid-3s. But I'd say that the submarket rents here Still 10% -plus below where they are at pre COVID, so we still think there's room to run on that front.

Speaker 4

You have a market with quite a bit of a decrease in supply Coming at you. So less supply pressures going forward and then you're just coming through the lease up phase, so we got to burn off a lot of those concessions. So there should be pretty good growth on a go forward basis. Okay.

Speaker 10

Thanks for that. And sorry if I missed this, did you guys give a lost lease figure?

Speaker 3

We did not. So right now, you can tell obviously with our strategy, it's been our intention all along to try to drive this down, right? And right now, we're sitting in that Mode of mid single digits. And again, this can fluctuate quite a bit over the next couple of months. But again, our intention is to continue to drive this down, Obviously, builds are earning for next year.

Speaker 3

You can see it in our blends today. You're going to see more of that as we move forward.

Speaker 2

Brad, this is Toomey. I would emphasize to tie a couple of things together. I mean, Mike's done a fabulous job with respect to The market rent that's there. And you can see it in our numbers on a sequential basis with 4%, almost 5% revenue growth. 2nd, no domination in the occupancy.

Speaker 2

So he was just trying to roll the rent roll up as strong as possible for 2023. And when you walk into 2023 and say 5% already booked, we feel like we're in a really good strong position Into that 2023 window of no issues with the resident, issues in the capital markets, yes.

Speaker 10

Okay. Thank you.

Operator

Our next question comes from the line of Adam Kramer with Morgan Stanley.

Speaker 11

Hey, guys. Appreciate the question. Just wanted to first ask, one of your peers put out kind of a 2% market rent growth forecast For 2023, recognize that you guys clearly aren't guiding here, but would love to just kind of hear your thoughts about that 2% rent growth forecast for 2023. Obviously, you guys have different markets than that peer. I would love to just maybe hear your thoughts about kind of that number and how that kind of seems given your portfolio?

Speaker 4

Yes. I think all we can really speak to is what we're seeing today. So I think to that last question on what are we seeing from blends And a loss to lease in our earning perspective covered part of it. I think what's important too is that the decrease in blends is not coming from a decrease in underlying market rents. We've seen market rents continue to increase on a year over year basis commensurate with historical averages.

Speaker 4

And historical averages being typically you'd see market rents grow 3% to 4% throughout the year. So Recent trends in the restricted consumer tells us that, that could continue. Now if you go into a recession, maybe you see a lower number. But I think Mike is going to continue to try to capture every dollar he can on that and try to drive that loss to lease lower and those blends higher. And then in the interim, we're going to continue to focus on the innovation side.

Speaker 4

I think there's a lot that we can do there from a share of wallet or other income perspective as well as what we're doing on Vacant Days and Pricing Engine to hopefully drive some above peer relative growth. So I think it's too early to start talking 2023 forecast, That gives you some of the building blocks that we see today.

Speaker 11

That's great, really helpful. And just on the occupancy side, I recognize and appreciate kind of the transparency I think you guys have had in your strategy and kind of talking openly about willing to sacrifice a little bit of occupancy to kind of Maximizing for revenue growth, look, 30 bps kind of occupancy decline quarter over quarter, I'd love to just kind of hear, I guess kind of how much occupancy loss is too much, right? Or kind of when does that strategy about kind of maximizing same store rev in lieu of occupancy, does that strategy maybe kind of shift, right? And kind of what would kind of be a maybe an occupancy floor, but kind of cause you to maybe shift and maximize occupancy a little bit more?

Speaker 3

Sure. I think as you look at it and you think about the Q4, obviously, we have lower lease expirations. Right now, we have A little bit more ability to push it back up. So we got as low as around 96.6% to 96.7%. I think you'll see us hover between that 96.7% 7 to 97 going forward through the Q4 and we'll have pricing power with that.

Speaker 3

Once you start going below 96.5 for us, It may cause a little bit of a pressure point. So we're trying to avoid that. That being said, it's how you get there, right? So the way we think about it is our vacant days. If we're a little bit more efficient on how we turn the units and moving people in faster, it shouldn't really come at a cost on the rent side of the equation.

Speaker 2

And Mike, how much of your occupancy relates to the long term evictions and that the 700 going down to

Speaker 3

Yes, that's a great point, Tom. So you've heard us talk about some of the long term delinquents in the past. We were upwards of around 750 of them. Now we're closer to about 450. And historically speaking, we run between 202.50.

Speaker 3

So we're about halfway to where we need to be, Less than 1%.

Speaker 2

And the benefit?

Speaker 4

Yes, benefit over time. We made a comment in the press release about being increasing our collection expectations. So we picked that up about 15 basis points relative to prior expectations, Continue to trend in the mid-ninety 8 percent collected relative to billed revenue. Historical averages were 50 basis points of bad debt. So there There's a 100 basis points total to go after.

Speaker 4

I think realistically, we're looking at maybe half of that as a possibility given some of the rules and regulations that have been put Placed by different municipalities, primarily on the coast.

Speaker 11

Thanks for all the color. Really appreciate it.

Operator

Our next question comes from the line of John Pawlowski with Green Street.

Speaker 9

Thanks. Andrew, I wanted to go back to your opening comments on the DCP program. So just trying to get a sense for the Strain and the debt service coverage across the rest of the DCP book. Could you give us a sense in terms of The watch list of ongoing projects, if rates stay where they are today or even inch up a little bit, are there going to be other shoes to drop?

Speaker 4

Hey, John. I think it's too early to say at this point. So Andrew mentioned the well laddered maturity profile that we have within these deals. And so there's only a couple of deals coming up to maturity in the next 12 months. And so over the next couple of quarters, we'll see how they approach the disposition versus refi process.

Speaker 4

I know they will probably kick that off in the next quarter or 2. And so we'll wait and see how that develops. But right now, I can say nothing in default. The way we originally underwrite these, we make sure that we underwrite in a stress scenario in terms of asset value as well as coverage ratios to make sure to account for some variability. Obviously, rates today much higher than where they're at 12 months ago.

Speaker 4

I think 6 months from now, we could be in a very different environment as well. So All I can kind of speak to today is no issues today, and we'll continue to monitor and work with the equity partners. Okay.

Speaker 9

And then just in terms of broader market Trends in terms of inbound deal flow from people not able to line up, particularly on the recapitalization side, financing. So are you guys seeing A meaningful increase in inbound deal volume?

Speaker 6

Yes. Hey, John, it's Andrew. Yes, we're definitely seeing an increase in the number of both Developers looking to capitalize their deals as a result of lower proceeds from the bank and as well recapping completed development deals in the market. And as you know, we've taken advantage of a few of those deals. But right now with our capital light, we're doing a lot of review of those deals, but haven't put out any term sheets, but we continue to be monitoring the market.

Speaker 9

Okay, great. Last one for me, apologies. Mike, just quickly, 3.5% new lease growth in Seattle, anything unusual this quarter or has that market become a lot softer?

Speaker 3

That's a good question. I don't think it's become that much softer, but we're also inflated with our exposure there. So I can tell you, Bill, Still feels very strong for us. The one thing that does stand out is we had some shorter term kind of interns that were leaving the market. So we had a little bit more exposure over the last 30 to 45 days and we've since repriced those.

Speaker 3

So I think some of that's just a Short term to long term lease phenomenon, but the market today for us feels pretty good.

Speaker 9

Thanks for the time.

Operator

Our next question comes from the line of chandri Luthra with Goldman Sachs.

Speaker 12

Hi. Thank you for taking my question. As we think about the back half your back half expenses And compare that to what you provided in September, how much of the delta from that update would you say Was it

Speaker 5

a surprise?

Speaker 4

It's probably we had talked about being above 5% in the back half of the year. Yes, we are above 7% here in the quarter. I think when we get into 4Q, we'll be Back into that 5 plus or minus range, so you're kind of talking about 6% blend versus our prior commentary above 5%.

Speaker 5

That's right.

Speaker 4

So you're really looking Yes. So you're really looking at about 1%, probably half that being more surprised. Some of that's due to the success we're having from a both eviction process Moving out some of those long term delinquents. So that's been driving up some of our turnover as well as the cost of turn, those units. In addition, you got higher utilities and R and M coming through.

Speaker 4

So a little bit, probably half of that was a surprise. Yes.

Speaker 3

And I would say just to size that, you have about $100,000,000 In the quarter and expenses, so 1%, it's only $1,000,000 for us. Some of it frankly was just surprises on the insurance side. We do still have some planes on that Side of the house as well, about $1,000,000 is equal to 1%.

Speaker 2

Chandra, this is Toomey. I appreciate the question. My perspective on this is, it's actually a good thing. Why? Because I'm getting 200 plus units that were 0 income to me.

Speaker 2

So that's $6,000,000 a year. I got those units back during the quarter in a window that I could lease them at And the cost was $1,000,000 in higher repair maintenance type aspect of it. So it's a pleasant surprise for us To spend $1,000,000 turn the unit and turn them back into $6,000,000 revenue for next year. And I'll make that trade every day. And I've told Mike, just keep pressing.

Speaker 2

We'd like to get that delinquent number down. Joe mentioned the long term impact So it's a win situation for us. And I know a lot of people go expenses and inflation. Yes, We are fighting those, but I think the innovation that we have has a lot of avenues to beat the cost structure and hold it and contain it. And we do operate in a 75% margin business.

Speaker 2

So it is more about the revenue potential of the organization And how we unleash that than all the expense containment aspects of it.

Speaker 12

Very helpful. Appreciate that detail. And as a follow-up, if you could provide any color in terms of What you're seeing from a supply standpoint in your coastal markets versus Sunbelt markets, are there any markets that were you More any specific geographies that would be very helpful.

Speaker 4

I think as we look out to 2023 and beyond, a couple of comments. So 2023, clearly a better line of sight. I would say, broadly speaking, more concerned when you get into the Sunbelt markets. And so Sunbelt, depending on the market you're looking at, you could see growth in supply upwards of 30 plus percent. So Somewhere above 3 plus percent of stock in a number of those markets, be it the Austin's, Nashville, Charlotte, Phoenix, some of those markets.

Speaker 4

And so Definitely some concerns related to that. On the West Coast, we do see supply starting to come down. So some of the markets like Northern California Supply comes down quite a bit out on the East Coast. New York seems to be coming down on a forward basis. And so near term, a little bit of Presupply, although I would say our submarkets generally are about half of the overall market supply expectations, so feeling a little bit better there.

Speaker 4

I think when you get into the 2024 and 2025 picture, we do expect to start to see some of that supply come down. Given the financing market that exists today, the unknowns around work cap rates settle out and of course cost inflation that we continue to see, We are seeing a lot of developers struggle to line up additional financing or equity partners to start new transactions. So we'd expect over the next 6 to 12 months to start It starts to come down quite a bit. So 24%, 25% price start to get a little bit better story on that front.

Speaker 12

Thank you. Appreciate the detail.

Operator

Our next question comes from the line of Wes Golladay with Baird.

Speaker 13

Hey, everyone. I just have a more of a macro question, probably want to look at Tom's 30 years of experience. But what we're seeing with a lot of the tech stocks, a lot of the stock comp is not being what it was supposed to be. And would you expect any pressure to filter through with maybe a lag as we look into next year?

Speaker 2

Boy, that's why I'm in the apartment business. It's a little bit simpler than trying to figure out the mapping of That type of dynamic. What I will tell you is, I've gone through the tech rec. What we have is a completely different environment With respect to technology, we're seeing a decade of everybody trying to figure out how to automate their businesses. And so I think that will continue.

Speaker 2

Those strong companies that are the core of the tech industry are amazingly Strong and resilient. So I don't see and I look at our experience for hiring tech people, they're going to find jobs And be paid very well. So I don't see that part of the exposure. So I do worry a little bit about the homebuilding aspect, the construction And the financing markets weathering a capital markets type recession. And we've looked through our employment base excuse me, our resident base.

Speaker 2

And I think Mike's taking that into account when he's looking at his pricing and looking for cracks in that. So hard for us to extrapolate the broader employment picture Into our portfolio, all we can try to do is sit around the room as we do each week and say, where do we think this thing is cracking? Do we see anything? And to be very, very transparent, we see no cracks in our resident in any shape or form at this time.

Speaker 13

Okay. Thank you for that. And then if we can go back to the DCP, you do have that new arm where you do the recapitalization. You obviously know some of these assets Very well. Would you participate in recapping your existing preferred equity loans if the developer didn't add some equity, but not the full amount?

Speaker 4

Yes. Take away, we're always looking for opportunities to deploy capital accretively and on a risk adjusted basis. So if one of our existing equity partners comes to us and we like the economics and the risk, we'd absolutely participate on a go forward basis with a recap either within our existing position Or to even more of a senior loan format. So it's something we'd consider, but at this point in time, there's really nothing on the table that in terms of the upcoming maturities to speak to.

Operator

Great. Toomey, I would add to

Speaker 2

the color on that. I think Carrie and Andrew have been very, very transparent and clear. We've always looked at the asset and said, boy, is it one close to ours? Is it an asset that makes sense someday? If it comes to market, we'd love to buy it.

Speaker 2

And we will still continue to do that and believe that that is the right avenue to think about these. It's just another avenue of investing in real estate that we know.

Speaker 14

Great. Thank you for that.

Operator

Our next question comes from the line of Juan Sanabria with BMO Capital Markets.

Speaker 5

Hi, thanks for the time. I'm curious on what the potential lead indicators looking back historically would be I'm seeing people begin to double up or get roommates. And just more broadly, thinking about some of the literature out there On how strong the housing market has been and the macro factors that have driven, do you think that maybe we pulled forward some Creation of households because of the pandemic and some of the unique dynamics there that maybe normalizes over the next couple of years here or What's your guys' view on just general household creation?

Speaker 4

Yes. I think it's fair to say that Pandemic did pull forward some of the household formation demand. It also pulled forward a little bit of a shift into single family over multifamily. And so Single family clearly had a tailwind in their back for the last 24 months relative to multi. That's part of the reason you have that pretty large disconnect between Cost to own versus cost to rent.

Speaker 4

I think what we're seeing now today and you definitely see it within our move out stats, our move outs to buy are down roughly 35% Going from kind of low double digits into mid to high single digits now at this point. So we're seeing it in terms of our turnover stats. I think we are shifting back more towards a rentership society. So homeownership rate should stay steady and or come down, which obviously benefits us in terms of more demand from any incremental household formation. And so I think we're good on that front.

Speaker 4

That's one of the tailwinds we have going into next year. Then just coming back to the consumer, I think you're talking about some of the warning signs of things we're looking at. When we see traffic still up on a 10% on a year over year basis, We see cash collections in the month continuing to improve, even here in October, and we are not dependent on government assistance on a go forward basis. Those are residents that are actually paying that rent on time. And so cash collections are looking better.

Speaker 4

You're not seeing the doubling up. So overall, I'm really not seeing those cracks and ultimately I think household formation probably benefits us on the ownership side a little bit more.

Speaker 5

And then just a quick follow-up on property taxes. Some surprises in some of your broader resi peers about What we're seeing in some of the Sunbelt markets, any sense of what we could expect in 2023, given Some of the appraisals will lag what's going on in home prices generally and what we should be thinking about?

Speaker 4

Yes. I'd say, so number 1, we aren't necessarily immune to some of those surprises, but the diversification that we have in the portfolio obviously insulates us. So When you look at some of the expense growth that we've had in our Sunbelt markets, that is being driven primarily in Florida and Texas By the real estate taxes increasing as well as seeing higher turnover in those markets. So we're seeing it this year and still expect to see it next year. I think when we look at preliminary outlook for next year on real estate tax, we're looking at plus or minus 5% overall.

Speaker 4

That's going to be lower when you go out to California with Prop 13 and then go to the Mid Atlantic and Northeast where we expect kind of low to mid single digits. To get down into our Sunbelt markets, I think you're going to be looking at high single digits to low double digits for markets like Florida and Texas and Nashville for us.

Speaker 5

Thanks, Joe. Thanks, Juan.

Operator

Our next question comes from the line of Haendel St. Jat With Mizuho, please proceed with your question.

Speaker 15

Hey, good morning out there. First, I guess, is a follow-up on bad Debt, we've seen a number of your peers report an uptick in the Q3. Some of the bad debt is taking a bit longer to resolve, but you guys saw an improvement here. So I guess I'm curious What you're maybe seeing or doing differently? Are there any reasonable price point distinctions?

Speaker 15

And am I right to infer from your comments to an earlier question that you expect that Next year.

Speaker 4

Thanks. Yes. And I'll start and reverse on that one. So We do expect improvement over time going from the mid-ninety eight plus or minus collected on build revenue. I can't say necessarily is that going to occur next year.

Speaker 4

I think on the margin, it should because we are having success in whittling down those long term delinquents. So we've got a pretty active process on that. Of that excess kind of long term delinquent we have today, I'd say 75% of them are somewhere in the eviction process, Although, eviction processes instead being perhaps a 30 to 60 day, in some cases are more like 4 to 6 months. And so We think we will continue to whittle that down and collection should improve and hopefully become more

Speaker 2

of a

Speaker 4

tailwind. In terms of the bad debt statistics, Yes. I'd say sequentially within that 4.7 percent sequential revenue number, maybe a slight positive, I. E. 10 to 20 basis points, But not a big tailwind.

Speaker 4

So our collections are getting better in the quarter, in the month, but we don't really have that much volatility. I think we talked about it last quarter, the way we approach bad debt reserves. We do try to be pretty specific in terms of estimating what we think collections are ultimately going to be on each resident. I think we've done a very good job of doing that. So we've eliminated a lot of that volatility of when the cash comes in as a surprise or when it doesn't, it's a surprise negative.

Speaker 4

I think we've been pretty spot on in how we've been able to evaluate bad debt and forecast that.

Speaker 13

Thanks. That's all I had.

Speaker 4

Thank you.

Operator

Our next question comes from the line of Tayo Okusanya with Credit Suisse.

Speaker 16

Yes, good morning out there. Just sticking to the world of technology, Any update on kind of PropTech initiatives at the company in order to try to reduce operating expenses going

Speaker 3

Probably the biggest one and what we're most excited about is just becoming a little bit more efficient as it relates to maintenance. So we do have some technology that's going into place In the very near future, it does allow us a little bit more visibility into decisions around repair versus replace. It should allow us to turn the units a little bit quicker. We'll have more visibility into what our vendors are doing. They'll have more visibility into what we're doing.

Speaker 3

So we think that we can compress our time that it takes to turn a unit just knowing when they're coming in, how we can schedule a little bit more efficiently and again driving down those vacant days. So that's probably the biggest one. Aside from that, just given what we've rolled out previously and you've heard us talk about it, we have 25 properties today that are unmanned. We do plan on taking that closer to 35. And again, a lot of that has to do with some of the technology that we've already put in place.

Speaker 16

Great. Thank you.

Operator

Our next question comes from the line of Neil Malkin with Capital One Securities.

Speaker 14

Thanks for keeping it going. I appreciate it. First one, Mike, you talked about, I think, about $40,000,000 by 2025. It looks like half of that is the whole building, smart system Wi Fi. But maybe can you talk about the other portions of What is it what is the incremental of that if you're at 0 today or at the beginning of this year, what are you at At the end of next year or 2024, should we assume like some sort of steady ramp up?

Speaker 14

Or how do you see those things kind of playing out In terms of your operating performance?

Speaker 3

That's a good question, Neil. I think what you're going to see that 1st and foremost with the Gig In fact, that we're rolling out the bulk Internet, that is something that's going to take some time. So we are currently rolling out about 10,000 apartment homes By the end of this year, we expect another 15,000 by the end of next year and then the rest of the portfolio in 2024. So it does take a little bit of time to start seeing that revenue roll through. We do expect that that will be a run rate $20,000,000 when it's all said and done.

Speaker 3

And so that's the biggest one. Aside from that, I just spoke a little bit about some of the technology we're putting in place that'll help us with the efficiency around turns. That'll help out. We're continuing to find ways to do a better job with our pricing, obviously going out there and creating more of those Buyers or shoppers, if you will, a lot of efforts going in there. And then obviously, our customer experience project, we're very excited about that.

Speaker 3

The data that's going to come from that and then obviously where that transpires, a lot of that's going to come in 2023 on the revenue side, Followed up with 2024 with another chunk of that money coming out at us.

Speaker 4

Neal? Neal, just to size the numbers real quick for you. Of that $40,000,000 associated with those over 60 projects, we've got about $6,000,000 of that in the 2022 number that we've already been able to realize through the initiatives started over the last 12, 18 months. I think as you fast forward into 2023, it'd be anywhere from $5,000,000 to upwards of $10 plus 1,000,000 depending on some issues with the supply chain around Our bulk Internet rollout as well as some other constraints, but we're moving as quick as we can there. So it gives you a range there.

Speaker 4

And then in 2024 and 2025, you'll capture the rest of that number.

Speaker 14

Yes. And so you're saying another 5 to 10 potentially in 2023, right? Is that what you're saying?

Speaker 4

Correct. Yes, that's correct. Okay.

Speaker 14

Yes. Last one, I guess maybe Tom or really whoever, a lot of supply coming in the Sunbelt, Whatever, and that's been happening forever, demand is killing it. So I'm sure it will be fine. But to that end, because there is a lot of Supply that's going to be coming and the debt market is uncertain, particularly more onerous terms for permanent financing. I'm sure you guys are well aware of that.

Speaker 14

Do you see that as a potential opportunity to broaden your diversification or broaden your Sunbelt

Speaker 2

I'll take a cut at it. 1, there's a lot there to assume and adjust for. What will stabilize mortgage rates and proceeds stabilize out at? How much is that supply replacement cost and exposure towards the future? So I think it's going to be continue to monitor, See what comes to the market, how it prices out, but the days of 3.5 caps in the Sun Belt don't seem on the horizon anytime soon.

Speaker 2

They're moved up and we'll look and as Joe has articulated many times and very well, We'll monitor our cost capital and look for accretive opportunities. And if they present themselves in the Sunbelt, that's great. If they present themselves somewhere else, that's great too. We're just going to go where the best risk adjusted returns are. And I think we'll keep playing that for if it works well.

Speaker 4

Yes. I think, Neal, when you look at we've talked about predictive analytics in the past, it's pretty well diversified in terms of its buy rated and sell rated markets today, meaning Yes. There's some Sunbelt markets, some East Coast and West Coast that it likes as well as the inverse. There's some markets in each one of those regions that it does not like. As Tom said, cost of capital today is prohibitive in terms of deploying new.

Speaker 4

What we've done historically is obviously focus a lot more on that deal next door And what fits with our platform. And so as you think about near term deployment, I'd say our top three priorities at this point, we talked about one of them already with the stock buyback, Which is us buying into a diversified stabilized portfolio. The other 2 are really renovation, which you saw 5 additional renovations added to the portfolio. So doing lower risk, small dollar, solid return investments on that front. And then you get into innovation, which Mike touched on.

Speaker 4

We're definitely blowing a lot of Personnel resources as well as capital dollars into that part of the business. So I think that's the playbook for now to keep focusing on that. And hopefully, at some point, cost of capital comes back and We can get back to external accretive growth.

Speaker 14

That's helpful. Thank you, guys.

Speaker 4

Thanks, Neil.

Operator

There are no further questions in the queue. I'd like to hand the call back over to Chairman and CEO, Mr. Toomey, for closing comments.

Speaker 2

Let me begin by thanking all of you for your time and interest in UDR. And I do want to be respectful. Well, I know you have other calls to follow after this, but let me reiterate. Our strategy remains sound and we will stick to it. We understand this current market environment has changed.

Speaker 2

And as you can see, we've pivoted our tactics to adjust to it. We are very bullish about the apartment business and what we can control and have very good And we're doing executing very well on that. We also recognize that the broader market has cycles and that those come and go. And you can take see our tactics and our actions by refinancing the vast majority of our balance sheet at record low rates with very few maturities through 2025 and that we have adjusted to a capital light environment and accordingly are underwriting to present day With that, we do believe we have the right strategy and have a great outlook for the future, and we look forward to seeing many of you at NAREIT in a couple of weeks. With that, take care.

Operator

This concludes today's conference. You may disconnect your lines at this time and we

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Earnings Conference Call
UDR Q3 2022
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