Joseph D. Fisher
President and Chief Financial Officer at UDR
Thank you, Tom.
The topics I will cover today include our Fourth Quarter and Full Year 2023 results, including recent trends and transactions, the 2024 macro outlook that drives our full year guidance, and the building blocks of our 2024 guidance.
First, beginning with Slide 5. Our Fourth Quarter and Full Year FFO as Adjusted per share of $0.63 and $2.47 achieved the midpoint of our previously provided guidance ranges. On the bottom half of the slide, you can see that during the quarter, we shifted to a more defensive operating strategy and build occupancy going into 2024. Occupancy trended sequentially higher for each month during the Fourth Quarter, resulting in a 20 basis point sequential improvement versus that of the Third Quarter.
As anticipated, this occupancy pivot resulted in lower blended base rate growth versus original 4Q expectations, but it was the right decision to place our portfolio in a position of strength given elevated new multifamily supply in 2024. For January, operating trends have improved. Market rent growth turned sequentially positive and is following normal seasonal patterns thus far. Blended lease rate growth improved to positive 0.2% with new lease rate growth of minus 3.6% and renewal lease rate growth of plus 4%. Concessionary activity continued to trend lower, and occupancy increased further to 97.2%. One month does not make a trend, but we are encouraged by these results.
Moving on, as detailed on Slide 6, during the quarter, we executed a variety of transactions that both enhance our liquidity and set us up well for future accretive growth. These include: number one, our joint venture with LaSalle acquired a 262 home community in Suburban Boston, were approximately $114 million at an initial mid- to high 5% yield. Through platform initiatives and various fees, we expect the stabilized yield to be in the mid- to high 6% range to UDR. We continue to explore investment opportunities with LaSalle, which will provide scale-oriented efficiencies to our operations, expand our fee income, and drive future earnings accretion and enhanced ROE for our shareholders.
Number two, we sold our [Indecipherable] on $180 million of dispositions. These are expected to be executed at a weighted average buyer cap rate in the mid-5% range and further enhance our already strong liquidity. And three, we assumed a DCP developer's ownership interest in a distressed Oakland asset. 1.5 years old community was appraised at $67 million or $387,000 per unit, which resulted in a non-cash investment loss of approximately $24 million to UDR.
The community is still in lease-up and a submarket of Oakland were two- to three-month concessions or the norm. The initial yield on the assumed asset is in the mid-3% range. However, once stabilized, we expect the yield to be in the low 5% range.
Turning to Slide 7 and our macro outlook. As in years past, utilize top-down and bottom-up approaches to set our 2024 macro and fundamental forecast. Our 2024 market rent growth forecast of roughly 1% was informed by third-party forecast and consensus expectations for a variety of economic factors that drive market run growth and our internal forecasting models, we combined this top-down forecast with a bottom-up growth estimate built by our regional teams as they best understand local supply and the demand dynamics in their markets.
Our 1% market rent growth forecast for 2024 is slightly conservative when compared to prominent third-party forecaster estimates at 1.7% and is driven by stable to positive demand set against historically high multifamily deliveries and the expectation for continued elevated concessions.
As Mike will discuss, the approximately 1% rent growth ties to our assumption for 2024 blended lease rate growth. Primary variables to our forecast include GDP growth, employment and wage growth, changes to the homeownership rate, supply and its impact on pricing, economic uncertainty.
Turning to Slide 8. If we step back and consider the near to intermediate-term outlook for the industry, we remain encouraged by a variety of key supply and demand metrics. First, at the top left, our consumer remains resilient with rent-to-income ratios at the long-term average. Second, at the top right, relative affordability versus alternative housing options remains decidedly in our favor at roughly 50% less expensive to rent than own, a 20% improvement from pre-COVID.
This supports a stable to declining homeownership rate and absent a major correction in home prices or a significantly more accommodated long-term interest rate environment, we do not expect this dynamic to change near term. Third, at the bottom left, the latest census data indicates that the largest U.S. a cohorts remain in their prime renter years. This should provide continued support for future long-term rental demand. And fourth, at the bottom right, while multifamily deliveries are expected to remain elevated through at least 2024, starts activity is significantly retreated and is down 70% from recent highs, and is now well below historical averages. This should benefit outer-year growth absent a near-term change in financing costs.
Moving on to Slide 9. Third-party data providers are forecasting record multifamily deliveries for the U.S. and in our markets over the next four to six quarters. Based on completion forecast, peak deliveries are currently expected to occur in the middle of 2024 before trending downwards, closer to long-term historical averages in the second half of 2025. We are cognizant that there will be supply slippage as they move to 2024, and that lease-up concessions could remain elevated after new deliveries update. Positively, peak deliveries in the coming quarters are not materially above the levels we have seen in the second half of 2023, and into the start of 2024. When market level concessions move throughout 2024 will be a primary driver of our ability to capitalize on our market rent growth forecast.
On Slide 10, we provide more context on which regions and markets are expected to feel the greatest impact of 2024 supply. The Sunbelt is forecast to face significantly higher absolute deliveries than the coastal markets, although all regions will face higher relative supply in 2024 as compared to their long-term averages. As is evident on the bottom of the page, this dynamic is reflected at the market level, with Sunbelt market supply growth rates expected to be more pressured than coastal markets this year. Mixing this all together, we arrived at our 2024 guidance, which is summarized on Slide 11. Primary expectations include full year FFOA per share guidance of $2.36 to $2.48, same-store revenue, expense expectations that translate to NOI growth ranging from negative 1.75% to positive 1.75%.
Slide 12 shows the building blocks for our full year 2024 FFOA per share guidance at the $2.42 midpoint, representing a 2% year-over-year decrease. Drivers include a $0.07 increase of same-store revenue and lease-up income from recently developed communities, offset by a $0.07 decrease from same-store expenses. A $0.025 decrease on DCP activities due to a lower average investment balance in 2024, including a potential $0.02 impact from assuming ownership of a DCP development, dependent on the refinancing of its senior construction loan. While the developer continues to advance refinancing discussions, we have chosen to take a conservative approach by including the downside scenario in our guidance.
We expect to have clarity on the refinancing by the second quarter and do not see additional 2024 earnings risk from our DCP investments at this time. Continuing with the building blocks, and approximately $0.02 decrease from interest expense due to higher average interest rates and the expiration of certain hedges and an approximately $0.01 decrease in G&A, reflective of inflationary wage growth. Moving on to Slide 13, and specific to the first quarter, our FFOA per share guidance range is $0.60 to $0.62 or an approximately 3% sequential decrease at the midpoint. This is driven by a $0.015 [Phonetic] decrease of same-store NOI, primarily due to higher expenses attributable to seasonal trends and approximately a $0.05 decrease of higher interest expense and G&A.
Last, on Slide 14, we present our debt maturity schedule and liquidity. Only 13% of our total consolidated debt matures through 2026. The thereby reducing future refinancing risk, combined with roughly $1 billion of line capacity, minimal committed capital, our projected first quarter disposition and strong free cash flow, our balance sheet sits in an excellent position. In all, despite near-term macro and potential DC-related headwinds in 2024. Our balance sheet and liquidity remain in excellent shape. We remain opportunistic in our capital deployment, and we continue to utilize a variety of capital allocation better advantages to drive long-term accretion.
With that, I will turn the call over to Mike.