udr second quarter 2011 earnings supplement · during the second quarter of 2011, the company...

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UDR Second Quarter 2011 Earnings Supplement UDR, Inc. (NYSE: UDR), has a demonstrated history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted US markets. www.udr.com CFO: David Messenger 720-283-6120 UDR, Inc. 1745 Shea Center Drive, Suite 200 Highlands Ranch, CO 80129 www.udr.com IR Contact: H. Andrew Cantor 720-283-6083 Clockwise from left: Rivergate, 21 Chelsea – Manhattan; View 14 – Washington, D.C.

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Page 1: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

UDR Second Quarter 2011 Earnings Supplement

UDR, Inc. (NYSE: UDR), has a demonstrated history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted US markets.

www.udr.com

Clockwise from left: Rivergate, Chelsea 21 – Manhattan; View 14 – Washington, D.C.

CFO: David Messenger

720-283-6120

UDR, Inc.1745 Shea Center Drive, Suite 200

Highlands Ranch, CO 80129www.udr.com

IR Contact: H. Andrew Cantor

720-283-6083

Clockwise from left: Rivergate, 21 Chelsea – Manhattan; View 14 – Washington, D.C.

Page 2: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

2Q 2011 Earnings Press Release ........................................................................................................................................ Pages 1-8

Company Consolidated Statements of Operations ............................................................................................................................ Attachment 1 Funds From Operations (FFO) .......................................................................................................................................... Attachment 2 Consolidated Balance Sheets ............................................................................................................................................ Attachment 3

Selected Financial Information Coverage Ratios, Encumbered/Unencumbered Assets Summary, Securities Ratings, Market Cap and Common Stock Equivalents ........................................................................................................................................ Attachment 4(A) Debt Structure and Cash and Available Credit Capacity ............................................................................................... Attachment 4(B) Debt Maturities Schedules .............................................................................................................................................Attachment 4(C)

Operations Income from Discontinued Operations .............................................................................................................................. Attachment 5 Revenue, Expense, NOI, Operating Margin, Quarterly Trends Comparison ..................................................................... Attachment 6 Portfolio Overview ......................................................................................................................................................... Attachment 7(A) Portfolio Overview – Total Income per Occupied Home ................................................................................................ Attachment 7(B)

Submarket Current Quarter vs. Prior Year Quarter Occupancy, and Total Income per Occupied Home Information ...................... Attachment 8(A) Current Quarter vs. Prior Year Quarter Revenue, Expense, and NOI Information ........................................................ Attachment 8(B) Current Quarter vs. Last Quarter Occupancy, and Total Income per Occupied Home Information ...............................Attachment 8(C) Current Quarter vs. Last Quarter Revenue, Expense and NOI Information ...................................................................Attachment 8(D) Current Year-to-Date vs. Prior Year-to-Date Occupancy, and Total Income per Occupied Home Information .............. Attachment 8(E) Current Year-to-Date vs. Prior Year-to-Date Revenue, Expense, and NOI Information ................................................ Attachment 8(F) Development, Redevelopment, Acquisitions and Dispositions Completed Development and Redevelopment Summary .................................................................................................. Attachment 9 Active Development and Redevelopment Summary ........................................................................................................ Attachment 10 Joint Venture and Land Summary ................................................................................................................................... Attachment 11 Summary of Apartment Community Acquisitions and Dispositions.................................................................................. Attachment 12 Capital Expenditures and Repair & Maintenance Capital Expenditures and Repair & Maintenance Summary ............................................................................................ Attachment 13

Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, 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, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments 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 ParkSM development, expectations concerning the joint venture with MetLife, expectations that automation will help grow net 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. Actual results may differ materially from those described in the forward-looking statements. 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 update or revise 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 under the U.S. securities laws.

UDR Second Quarter 2011 Earnings Supplement

Page 3: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Press Release

Contact: H. Andrew Cantor Phone: 720.283.6083

UDR ANNOUNCES SECOND QUARTER 2011 RESULTS

~15% Increase in FFO-Core per Diluted Share~

DENVER, CO (August 1, 2011) – UDR, Inc. (the "Company") (NYSE: UDR), a leading multifamily real estate investment trust, today announced its second quarter 2011 results. The Company generated Funds from Operations (FFO) of $63.6 million or $0.31 per diluted share, for the quarter ended June 30, 2011, as compared to $45.7 million, or $0.27 per diluted share, in the second quarter of 2010. The second quarter results include a one-time, $0.008 per diluted share, gain on the sale of TRS property and a JV financing fee, offset by one-time charges of $0.014 for acquisition-related and severance costs. Excluding these one-time charges, FFO-Core would have been $0.32 per diluted share. Please see the reconciliation below for further detail.

Q2 2011 Q2 2010 YTD 2011 YTD 2010 FFO- Core per diluted share $0.32 $0.28 $0.62 $0.56 Acquisition-related costs (0.010) - (0.014) - JV financing fee 0.004 - 0.004 - Severance charges (0.004) - (0.004) - Gain on sale of TRS property 0.004 - 0.005 - Storm-related expenses - (0.004) - (0.004) Costs associated with debt extinguishment - (0.006) (0.021) (0.006) Gain on sale of marketable securities - - 0.016 - FFO- Reported per diluted share $0.31 $0.27 $0.61 $0.55

A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company’s second quarter 2011 Supplemental Financial Information.

Page 4: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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“We’ve made great progress this year as we have announced nearly $1.2 billion in acquisitions, $375 million in developments and have raised $930 million in equity,” said Tom Toomey, UDR’s president and CEO. Mr. Toomey continued, “Clearly we believe this is the right time to grow our company as we have made a concerted effort to expand our operations in core markets such as New York, Boston, San Francisco and Washington, D.C. – the substantial value creation opportunities we see from the newly announced acquisitions and development projects position us well for future growth.”

Operations

Same-store revenue increased 3.6 percent year-over-year while net operating income (NOI) increased 5.1 percent for the second quarter 2011. Same-store physical occupancy decreased 10 basis points to 95.7 percent year-over-year. Same-store expenses increased 70 basis points driven by higher utility and insurance costs, partially offset by a decrease in real estate taxes.

The rate of turnover decreased to an annualized rate of 55 percent from 56 percent in the second quarter of 2010. Bad debt expense as a percentage of revenues for the second quarter was flat at 40 basis points.

Summary Same-Store Results Second Quarter 2011 versus Second Quarter 2010

Region Revenue Growth/ Decline

Expense Growth/ Decline

NOI Growth/ Decline

% of Same- Store

Portfolio¹ Same-Store Occupancy2

Number of Same-Store

Homes3 Western 3.6% 0.2% 5.1% 40.5% 95.4% 13,364Mid-Atlantic 3.9% 3.6% 4.1% 28.5% 96.6% 10,418Southeastern 3.1% 1.5% 4.2% 21.1% 95.1% 12,272Southwestern 3.4% -5.2% 9.5% 9.8% 95.9% 5,571Total 3.6% 0.7% 5.1% 100.0% 95.7% 41,625

¹ Based on QTD 2011 NOI. 2 Average same-store occupancy for the quarter. 3 During the second quarter, 41,625 apartment homes, or approximately 86 percent of 48,556 total apartment homes, were

classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent quarter.

Sequentially, same-store NOI increased by 3.4 percent driven by increased revenues of 1.6 percent and a 1.7 percent decrease in same-store expenses.

Page 5: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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For the six months ended June 30, 2011, the Company’s same-store revenue increased 3.0 percent as compared to the prior year while expenses increased 1.5 percent resulting in a same-store NOI increase of 3.9 percent as compared to the prior year period in 2010. Year-over-year occupancy decreased by 10 basis points to 95.6 percent. Summary Same-Store Results YTD 2011 versus YTD 2010

Region Revenue Growth/ Decline

Expense Growth/ Decline

NOI Growth/ Decline

% of Same- Store

Portfolio¹ Same-Store Occupancy2

Number of Same-Store

Homes3 Western 2.9% 1.3% 3.7% 40.0% 95.2% 13,198Mid-Atlantic 3.9% 2.2% 4.7% 28.9% 96.5% 10,418Southeastern 2.3% 1.8% 2.7% 21.2% 95.2% 11,901Southwestern 2.7% -0.2% 4.7% 9.9% 95.9% 5,571Total 3.0% 1.5% 3.9% 100.0% 95.6% 41,088

¹ Based on YTD 2011 NOI. 2 Average same-store occupancy for YTD 2011. 3 During the six months ended June 30, 2011, 41,088 apartment homes, or approximately 85 percent of 48,556 total apartment

homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent year.

Technology Platform

Improving the Company’s operational efficiency, while increasing resident satisfaction, are the compelling factors for our continued investment in technology. The Company’s technology platform continues to gain acceptance and recognition from our residents as shown by the following increasing utilization rates:

Established Technology Initiatives: June 2011 June 2010

December 2010

Resident payments received via ACH 78% 74% 79%Service requests entered through MyUDR.com 80% 77% 79%Move-ins initiated via an internet source 61% 65% 63% New Technology Initiatives: Renewals completed electronically 84% 3% 81%

Acquisition Activity

The Company completed the acquisition of 10 Hanover Square, a 493-home apartment community in New York City’s Financial District for $259.8 million. The 23-story high-rise also contains 41,650 square feet of fully leased commercial space. Additional details related to the transaction can be found in the March 1, 2011 and April 1, 2011 press releases on the Company’s website at www.udr.com.

Page 6: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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Additionally, the Company completed the acquisition of View 14, a 185-home apartment community located in the U Street Corridor of Washington, D.C. for $106 million. The luxury 9-story high-rise also contains 32,113 square feet of commercial space and a 148-space parking garage. Additional details related to the transaction can be found in the July 12, 2011 press release on the Company’s website at www.udr.com.  

Development Activity

During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments include:

Los Alisos, an $87 million, 320-home community located in Mission Viejo, CA. The convenient location provides residents with excellent access to freeways and job centers across Orange County and is located directly adjacent to the Mission Foothill Marketplace, an 110,000-square-foot retail center.

13th & Market, a $76 million, pre-sale joint venture to develop a 263-home community at 13th & Market in the East Village neighborhood of San Diego, CA. The new community will be located directly across the street from the planned 4-acre East Village Green public park, within walking distance to PETCO Park and only three blocks from the UDR/MetLife Strata community (163 homes).

Domain College Park, a $62 million, pre-sale joint venture to develop a 256-home community that will be located immediately adjacent to The Robert H. Smith School of Business at the University of Maryland in College Park, MD. The land was purchased by the pre-sale joint venture from the UDR/MetLife joint venture and is expected to be the only privately-owned, market-rate community located directly adjacent to the University of Maryland campus.

Disposition Activity

During the second quarter, the Company sold Mustang Park, a 289-home community located in Carrollton, TX for $31 million. At the time of the disposition, the community was 96% occupied with an average monthly income per occupied home of $1,000.

Asset Exchange:

The Company completed a $500 million asset exchange with AvalonBay Communities, Inc. UDR exchanged six communities containing 1,418 apartment homes in Southern California for two communities containing 833 apartment homes located in the Boston metro area and one community containing 227 apartment homes located in downtown San Francisco. Additional details related to the exchange can be found in the April 6, 2011 press release on the Company’s website at www.udr.com.

Capital Markets Activity

In the second quarter of 2011, the Company raised approximately $231.2 million of equity through the sale of approximately 9.4 million shares at a weighted average net price of $24.51 per share under its “At the Market” equity offering program.

Page 7: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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In conjunction with the acquisition of 10 Hanover Square in Manhattan, the Company issued 2.6 million operating partnership units for $64 million.

On May 18, 2011, the Company priced a seven year $300 million offering of 4.25 percent senior unsecured notes under its existing shelf registration. The notes will mature on June 1, 2018.

During the second quarter, the Company repurchased 141,200 shares of Series G Cumulative Redeemable Preferred Shares at an average price per share of $25.38.

Balance Sheet

At June 30, 2011, UDR had $882 million in availability through a combination of cash and undrawn capacity on its credit facilities, giving the Company ample flexibility to meet its capital needs for debt maturities and development activities through 2012.

UDR’s total indebtedness at June 30, 2011 was $3.7 billion. The Company ended the second quarter with fixed-rate debt representing 83 percent of its total debt, a total blended interest rate of 4.4 percent and a weighted average maturity of 4.5 years. UDR’s fixed charge coverage ratio (adjusted for non-recurring items) was 2.4 times.

Post Quarter Activity

Acquisitions:

On July 19, 2011, the Company completed the acquisition of Rivergate, a 706-home apartment community located in the Murray Hill neighborhood of Manhattan for $443 million. The 35-story high-rise also contains 24,315 square feet of fully-leased commercial space and a 125-space parking garage.

The acquisition of 21 Chelsea, a 210-home community located in the Chelsea neighborhood of Manhattan, is expected to close in the third quarter of 2011 for $138 million. The 14-story high-rise also contains 1,600 square feet of fully-leased retail space and a 152-space parking garage.

Development: The Company expects to close in the third quarter of 2011 on the acquisition of the land for the development of Village at Bella Terra, a $150 million, 467-home community located in Huntington Beach, CA. Additional details can be found in the July 12, 2011 press release on the Company’s website at www.udr.com. Including the Company’s interest in its unconsolidated development joint ventures and Village at Bella Terra, the Company has 2,476 homes under development for a total estimated cost of $757 million.

Capital Markets Activity: The Company completed a public offering of 20.7 million shares of common stock, including the underwriter’s overallotment option, at a gross price of $25.00 per share. Proceeds of approximately $496.3 million, after underwriting discounts, commissions and offering expenses,

Page 8: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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were used to fund potential and recent acquisitions, for working capital and for general corporate purposes. In the third quarter, previous to the July 13, 2011 public offering, the Company raised approximately $42.9 million of equity through the sale of approximately 1.7 million shares at a weighted average net price of $24.90 per share under its “At the Market” equity offering program. 2011 Guidance As previously announced on July 11, 2011, the Company updated its full-year same-store, FFO, disposition, and acquisition guidance as follows:

FFO per diluted share

Same-store operations (95% occupancy):

Revenue

Expenses

Net operating income (NOI)

Portfolio activity (M): Completed(1,2,3)

Acquisitions $1,200

Dispositions $267

Development starts $375

Capital markets (M): Completed(1)

Equity $929

Debt $300

(1) As of August 1, 2011.

(2) Completed acquisitions and dispositions include the previously announced $500 million asset exchange.

(3) Completed acquisitions include 21 Chelsea and completed development starts include Village at Bella Terra.

(4) Remaining consists of the revised range less completed.

$500

$0

$0 $450 - $600 $75 - $225

$1,200 - $1,500 $75 - $300

$500 - $600 $233 - $333

$495 - $520 $300 - $500 $0 - $200

Original Range Revised Range Remaining(4)

$300 - $325 $450 - $950 $0 - $21

Remaining(4)

Original Range As of Feb. 7, 2011

Revised RangeAs of July 11, 2011

$1.20 - $1.25 $1.25 - $1.30

Original Range Revised Range

3.5% - 4.5% 4.0% - 4.5%

2.0% - 3.0%

4.0% - 6.0%

2.0% - 2.5%

5.0% - 6.0%

 

All guidance is based on current expectations of future economic conditions and the judgment of the Company's management team. The following reconciles from forecasted FFO per share to GAAP Net Loss per share:

Low High

Forecasted 2011 FFO guidance per diluted share $1.25 $1.30

Conversion to GAAP share count (0.08) (0.08)

Depreciation (1.76) (1.76)

Non-controlling interests 0.01 0.01

Preferred dividends (0.02) (0.02)

Gains on sale of depreciable property 0.21 0.21

Forecasted GAAP net loss per diluted share (0.39) (0.34)

Page 9: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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Supplemental Information

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

Conference Call and Webcast Information

UDR will host a webcast and conference call at 11:00 a.m. EDT on August 1, 2011 to discuss second quarter results. A 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, download and install any necessary audio software. To participate in the teleconference dial 877-941-9205 for domestic and 480-629-9818 for international and provide the following conference ID number: 4453360. A replay of the conference call will be available through September 1, 2011, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4453360, when prompted for the pass code. A replay of the call will be available for 90 days on UDR's website at www.udr.com.

Full Text of the Earnings Report and Supplemental Financial Information

Internet -- The full text of the earnings report and Supplemental Financial Information will be available on the Company’s website at www.udr.com.

Mail -- For those without Internet access, the second quarter 2011 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-283-6083.

Page 10: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

8

Forward Looking Statements

Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, 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, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments 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 ParkSM development, expectations concerning the joint venture with MetLife, expectations that automation will help grow net 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. Actual results may differ materially from those described in the forward-looking statements. 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 update or revise 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 under the U.S. securities laws.

This release and these forward-looking statements include UDR’s analysis and conclusions and reflect UDR’s judgment as of the date of these materials. UDR assumes no obligation to revise or update to reflect future events or circumstances.

About UDR, Inc.

UDR, Inc. (NYSE:UDR), an S&P 400 company, 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 June 30, 2011, UDR owned or had an ownership position in 60,386 apartment homes including 1,939 homes under development. For over 39 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.

Page 11: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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1 an

d 2

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and

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and

$1.1

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durin

g th

e si

x m

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s en

ded

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1 an

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10.

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ach

men

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ated

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of

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nau

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Writ

e-of

f of d

efer

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finan

cing

cos

ts o

n ea

rly d

ebt e

xtin

guis

hmen

t, in

clud

ing

$599

writ

e-of

f of c

onve

rtib

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ebt p

rem

ium

for

the

thre

e an

d si

x m

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sen

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Mo

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nd

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ne

30,

Jun

e 30

,

Page 12: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Attachment 2

In thousands, except per share amounts 2011 2010 2011 2010

Net income/(loss) attributable to UDR, Inc. 14,651$ (26,621)$ (13,224)$ (50,677)$

Distributions to preferred stockholders (2,327) (2,372) (4,695) (4,751) Real estate depreciation and amortization, including discontinued operations 91,161 73,726 175,276 145,933 Non-controlling interest 258 (1,019) (523) (1,989) Real estate depreciation and amortization on unconsolidated joint ventures 2,844 1,151 5,692 2,160 Net gain on the sale of depreciable property in discontinued operations, excluding RE3 (43,767) (162) (43,808) (121) (Premium)/discount on preferred stock repurchases, net (175) 25 (175) 25 Funds from operations ("FFO") - basic 62,645$ 44,728$ 118,543$ 90,580$

Distribution to preferred stockholders - Series E (Convertible) 931 931 1,862 1,862

Funds from operations - diluted 63,576$ 45,659$ 120,405$ 92,442$

FFO per common share - basic 0.32$ 0.27$ 0.61$ 0.55$ FFO per common share - diluted 0.31$ 0.27$ 0.61$ 0.55$

Weighted average number of common shares and OP Units outstanding - basic 198,109 166,850 192,880 164,492 Weighted average number of common shares, OP Units, and common stock equivalents outstanding - diluted 203,188 172,109 197,913 169,485

FFO is defined as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real EstateInvestment Trust's definition issued in April 2002. UDR considers FFO in evaluating property acquisitions and its operating performance and believes that FFOshould be considered along with, but not as an alternative to, net income and cash flows as a measure of UDR's activities in accordance with generallyaccepted accounting principles and is not necessarily indicative of cash available to fund cash needs.

RE3 gain on sales, net of taxes, is defined as net sales proceeds less a tax provision and the gross investment basis of the asset before accumulated depreciation.

We consider FFO with RE 3 gain on sales, net of taxes, to be a meaningful supplemental measure of performance because the short-term use of funds produceprofits which differ from the traditional long-term investment in real estate for REITs.

Six Months EndedJune 30,

UDRFunds From Operations

(Unaudited)

June 30,Three Months Ended

Page 13: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 3

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Page 14: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 4

(A)

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Page 15: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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.9%

. (2

) In

clud

es $

202.

1 m

illio

n of

deb

t with

an

aver

age

inte

rest

rate

cap

at 6

.1%

. (3

) In

clud

es $

250

mill

ion

of d

ebt t

hat h

as b

een

fixed

usi

ng in

tere

st ra

te s

wap

s at

an

aver

age

rate

of 3

.5%

.(4

) E

xclu

des

$1.7

mill

ion

of le

tters

of c

redi

t out

stan

ding

at J

une

30, 2

011.

(5)

Mat

urity

can

be

exte

nded

to 2

017

at U

DR

's o

ptio

n.(6

) N

ot in

clud

ed in

the

tota

l am

ount

ava

ilabl

e is

a $

150

mill

ion

acco

rdio

n fe

atur

e on

UD

R's

$25

0 m

illio

n te

rm lo

an d

ue J

anua

ry 2

016.

(7)

Rep

rese

nts

debt

mat

uriti

es a

fter e

xten

sion

s (s

ee a

ttach

men

t 4(c

)).

UD

RSe

lect

ed F

inan

cial

Info

rmat

ion

June

30,

201

1

Com

bine

d

Com

bine

d

Com

bine

d

DEB

T ST

RU

CTU

RE

CAS

H A

ND

AVA

ILAB

LE C

RED

IT C

APAC

ITY

June

30,

201

1

(Una

udite

d)(D

olla

rs in

thou

sand

s)

Page 16: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 4

(C)

Secu

red

Deb

t U

nsec

ured

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ebt

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ance

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enta

ge o

f Tot

alW

eigh

ted

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age

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rest

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e20

1111

8,97

2$

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)96

,680

$

215,

652

$

5.

8%

3.1%

2012

290,

882

(2)

105,

000

(3

)39

5,88

2

10.7

%

4.8%

2013

96,3

82

(4)

222,

500

318,

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2014

100,

000

312,

308

41

2,30

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32

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260

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-

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erea

fter

27,0

00

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3,

699,

586

$

100.

0%

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red

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t U

nsec

ured

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ebt

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ance

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ge o

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ted

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age

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rest

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e20

116,

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$

96

,680

$

103,

400

$

2.

8%

3.8%

2012

304,

092

105,

000

(3

)40

9,09

2

11.1

%

5.1%

2013

72,9

02

222,

500

295,

402

8.

0%

4.4%

2014

108,

779

312,

308

42

1,08

7

11.4

%4.

4%20

1523

9,19

4

32

4,72

1

563,

915

15

.1%

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2016

103,

515

333,

260

43

6,77

5

11.8

%3.

6%20

1739

4,03

5

-

39

4,03

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10.7

%4.

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4,78

7

29

7,03

5

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822

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.1%

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2019

511,

377

-

511,

377

13

.8%

4.2%

Ther

eafte

r27

,000

15

,681

42,6

81

1.

2%3.

6%1,

992,

401

$

1,

707,

185

$

3,69

9,58

6$

10

0.0%

4.4%

(1)

Incl

udes

$39

.5 m

illio

n cr

edit

faci

lity

adva

nce

with

a fi

ve y

ear e

xten

sion

, $30

.6 m

illio

n in

per

man

ent f

inan

cing

with

a o

ne y

ear e

xten

sion

and

$42

.1 m

illio

n fo

r one

con

stru

ctio

n lo

an w

ith a

one

yea

r

e

xten

sion

.(2

) In

clud

es $

59.5

mill

ion

cred

it fa

cilit

y ad

vanc

e th

at c

an b

e ex

tend

ed fo

r fiv

e ye

ars.

(3)

$600

mill

ion

line

of c

redi

t mat

ures

in J

uly

2012

. Th

ere

are

$5.0

mill

ion

of b

orro

win

gs o

utst

andi

ng a

t Jun

e 30

, 201

1.

(4)

Incl

udes

$8.

8 m

illio

n in

per

man

ent f

inan

cing

with

a o

ne y

ear e

xten

sion

at U

DR

's o

ptio

n an

d $1

4.7

mill

ion

for o

ne c

onst

ruct

ion

loan

with

a tw

o ye

ar e

xten

sion

.(5

) In

clud

es $

69.6

mill

ion

perm

anen

t fin

anci

ng w

ith a

one

yea

r ext

ensi

on a

t UD

R's

opt

ion.

DEB

T M

ATU

RIT

IES

WIT

H E

XTEN

SIO

NS

DEB

T M

ATU

RIT

IES

(Una

udite

d)

UD

RSe

lect

ed F

inan

cial

Info

rmat

ion

June

30,

201

1(D

olla

rs in

thou

sand

s)

Page 17: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 5

In th

ousa

nds

2011

2010

2011

2010

Ren

tal i

ncom

e45

1$

7,27

4$

7,

258

$

14

,578

$

N

on-p

rope

rty in

com

e-

-

1

1,

849

Ren

tal

expe

nses

161

2,

169

2,36

7

4,51

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P

rope

rty m

anag

emen

t fee

12

20

0

199

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eal e

stat

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3,47

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64

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fore

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the

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0

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035

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gai

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the

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me

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44,8

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45

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3,19

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Six

Mon

ths

Ende

d

UD

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com

e Fr

om D

isco

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ne 3

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(Una

udite

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June

30,

June

30,

F

AS

B A

SC

Sub

topi

c 20

5.20

, req

uire

s, a

mon

g ot

her t

hing

s, th

at th

e pr

imar

y as

sets

and

liab

ilitie

s an

d th

e re

sults

of o

pera

tions

of U

DR

’s re

al p

rope

rties

whi

ch h

ave

been

so

ld o

r are

hel

d fo

r dis

posi

tion,

be

clas

sifie

d as

dis

cont

inue

d op

erat

ions

and

seg

rega

ted

in U

DR

’s C

onso

lidat

ed S

tate

men

ts o

f Ope

ratio

ns a

nd C

onso

lidat

ed B

alan

ce S

heet

s.

Pro

perti

es c

lass

ified

as

real

est

ate

held

for d

ispo

sitio

n ge

nera

lly re

pres

ent p

rope

rties

act

ivel

y m

arke

ted

or c

ontra

cted

for s

ale

whi

ch a

re e

xpec

ted

to c

lose

with

in th

e ne

xt

twel

ve m

onth

s.

T

he p

rimar

y as

sets

and

liab

ilitie

s an

d th

e ne

t ope

ratin

g re

sults

of t

hose

pro

perti

es s

old

or c

lass

ified

as

held

for d

ispo

sitio

n th

roug

h Ju

ne 3

0, 2

011,

are

acc

ount

ed fo

r as

disc

ontin

ued

oper

atio

ns fo

r all

perio

ds p

rese

nted

. Th

is p

rese

ntat

ion

does

not

hav

e an

impa

ct o

n ne

t inc

ome

avai

labl

e to

com

mon

sto

ckho

lder

s, it

onl

y re

sults

in th

e re

clas

sific

atio

n of

the

oper

atin

g re

sults

of a

ll pr

oper

ties

sold

or c

lass

ified

as

held

for d

ispo

sitio

n th

roug

h Ju

ne 3

0, 2

011,

with

in th

e C

onso

lidat

ed S

tate

men

ts o

f Ope

ratio

ns fo

r th

e pe

riods

end

ed J

une

30, 2

011

and

2010

, and

the

recl

assi

ficat

ion

of th

e as

sets

and

liab

ilitie

s w

ithin

the

Con

solid

ated

Bal

ance

She

ets

as o

f Jun

e 30

, 201

1 an

d D

ecem

ber

31, 2

010.

D

urin

g th

e th

ree

and

six

mon

ths

ende

d Ju

ne 3

0, 2

011,

UD

R d

ispo

sed

of 7

com

mun

ities

with

a to

tal o

f 1,7

07 u

nits

. U

DR

did

not

dis

pose

of a

ny c

omm

uniti

es d

urin

g th

e th

ree

and

six

mon

ths

ende

d Ju

ne 3

0, 2

010.

At J

une

30, 2

011

UD

R d

oes

not h

ave

any

real

est

ate

held

for d

ispo

sitio

n. T

he re

sults

of o

pera

tions

for t

hese

pro

perti

es a

re

clas

sifie

d on

the

Con

solid

ated

Sta

tem

ents

of O

pera

tions

in th

e lin

e ite

m e

ntitl

ed “I

ncom

e fro

m d

isco

ntin

ued

oper

atio

ns”:

Thre

e M

onth

s En

ded

Page 18: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 6

Tota

l Q

uart

er E

nded

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rter

End

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rter

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nded

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esJu

ne 3

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011

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ch 3

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Dec

embe

r 31,

201

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ptem

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30,

201

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$

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46,5

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67

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TOTA

L IN

CO

ME

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PIED

HO

ME

S

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1,18

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1,

163

$

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1,15

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1,

139

$

Acq

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1,95

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$

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$

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PHYS

ICA

L O

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Y

Sam

e-S

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mun

ities

95

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95.5

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d C

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es95

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95.1

%94

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94.7

%-

Red

evel

opm

ent C

omm

uniti

es83

.8%

84

.5%

84

.6%

86

.8%

87.6

%D

evel

opm

ent C

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es a

nd O

ther

95

.1%

90.2

%85

.8%

79.5

%71

.9%

T

otal

95.4

%94

.9%

94.4

%93

.8%

93.4

%

RO

IC

Sam

e-S

tore

Com

mun

ities

7.

1%7.

0%6.

9%6.

9%6.

9%

Acq

uire

d C

omm

uniti

es c

onsi

st o

f all

mul

tifam

ily p

rope

rties

acq

uire

d by

the

Com

pany

, oth

er th

an th

roug

h de

velo

pmen

t act

ivity

, tha

t are

not

incl

uded

in S

ame-

Sto

re C

omm

uniti

es.

Red

evel

opm

ent C

omm

uniti

es c

onsi

sts

of p

rope

rties

whe

re g

reat

er th

an 1

0% o

f ava

ilabl

e ap

artm

ent h

omes

hav

e be

en p

ulle

d of

f-lin

e fo

r maj

or re

nova

tion.

Dev

elop

men

t Com

mun

ities

con

sist

of a

ll m

ultif

amily

pro

perti

es d

evel

oped

or u

nder

dev

elop

men

t by

the

Com

pany

whi

ch a

re c

urre

ntly

maj

ority

ow

ned

by th

e C

ompa

ny a

nd

had

not a

chie

ved

stab

iliza

tion

at le

ast o

ne y

ear p

rior t

o th

e be

ginn

ing

of th

e m

ost r

ecen

t qua

rter.

Oth

er in

clud

e pr

oper

ties

man

aged

by

third

par

ties,

con

dom

iniu

ms,

join

t ven

ture

pro

perti

es, p

rope

rties

con

tract

ed fo

r sal

e w

hich

are

exp

ecte

d to

clo

se w

ithin

the

next

12

mon

ths,

pr

oper

ties

bein

g pr

epar

ed fo

r red

evel

opm

ent a

nd w

here

a m

ater

ial c

hang

e in

hom

e co

unt h

as o

ccur

red,

and

the

non-

apar

tmen

t com

pone

nts

of m

ixed

use

pro

perti

es.

Sold

Com

mun

ities

con

sist

s of

pro

perti

es s

old

prio

r to

June

30,

201

1.

Stab

iliza

tion

occu

rs w

ith th

e in

itial

ach

ieve

men

t of 9

0% o

ccup

ancy

for a

t lea

st th

ree

cons

ecut

ive

mon

ths.

Tota

l Inc

ome

per O

ccup

ied

Hom

e re

pres

ents

tota

l res

iden

tial r

even

ues

divi

ded

by th

e pr

oduc

t of o

ccup

ancy

and

the

num

ber o

f mat

ure

apar

tmen

t hom

es.

Phys

ical

Occ

upan

cy re

pres

ents

the

num

ber o

f occ

upie

d ho

mes

div

ided

by

the

tota

l hom

es a

vaila

ble

for a

pro

perty

.

Ret

urn

on In

vest

ed C

apita

l ("R

OIC

") re

pres

ents

the

refe

renc

ed q

uarte

r's N

OI,

annu

aliz

ed, d

ivid

ed b

y th

e av

erag

e of

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inni

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nd e

ndin

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vest

ed c

apita

l for

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quar

ter.

(Una

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UD

RO

pera

ting

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rmat

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June

30,

201

1(D

olla

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thou

sand

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Sam

e-St

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Com

mun

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esen

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uniti

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ed a

nd s

tabi

lized

prio

r to

Apr

il 1,

201

0 an

d he

ld a

s of

Jun

e 30

, 201

1.

Page 19: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Qua

rter

ly S

ame-

Stor

e Po

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join

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than

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lopm

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ed in

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Com

mun

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.

Red

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reat

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bei

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men

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whe

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mat

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ome

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men

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mun

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con

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dev

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men

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pany

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abili

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the

begi

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mos

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uarte

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Mid

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Reg

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Hom

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tern

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Atta

chm

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(A)

UD

RPo

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lio O

verv

iew

June

30,

201

1

Sout

hwes

tern

Reg

ion

Sam

e-St

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Com

mun

ities

repr

esen

t tho

se c

omm

uniti

es a

cqui

red,

dev

elop

ed a

nd s

tabi

lized

prio

r to

Apr

il 1,

201

0 an

d he

ld a

s of

Jun

e 30

, 201

1.

Page 20: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

UD

RPo

rtfo

lio O

verv

iew

- To

tal I

ncom

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r Occ

upie

d H

ome

June

30,

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num

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Red

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il 1,

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0 an

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ld a

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e 30

, 201

1.

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Com

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uniti

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Sout

hwes

tern

Reg

ion

Page 21: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Perc

ent o

fSa

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Stor

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by M

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vs.

Prio

r Yea

r Qua

rter

Page 22: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Tota

l Sa

me-

Stor

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even

ues

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Sout

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Page 23: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Tota

l Sa

me-

Stor

eH

omes

2Q 1

11Q

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June

30,

201

1(U

naud

ited)

Page 24: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Tota

l Sa

me-

Stor

eR

even

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Net

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June

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1(D

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thou

sand

s)(U

naud

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heas

tern

Reg

ion

Page 25: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

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Page 26: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Tota

l Sa

me-

Stor

eR

even

ues

Expe

nses

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g In

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Page 27: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 9

N

umbe

r C

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Page 28: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

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less

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t to

date

, plu

s bu

dget

ed c

onst

ruct

ion

cost

s.(8

)S

ame-

Sto

re D

ate

repr

esen

ts th

e qu

arte

r we

antic

ipat

e co

ntrib

utin

g th

e pr

oper

ty to

the

sam

e-st

ore

pool

.(9

)E

xter

ior r

edev

elop

men

t was

com

plet

ed in

the

seco

nd q

uarte

r of 2

010

and

then

the

inte

rior r

edev

elop

men

t com

men

ced

in th

e fo

urth

qua

rter o

f 201

0.(1

0)E

xter

ior r

edev

elop

men

t was

com

plet

ed in

the

first

qua

rter o

f 201

1 an

d th

e in

terio

r red

evel

opm

ent b

egan

in th

e fo

urth

qua

rter o

f 201

0.

WH

OLL

Y O

WN

ED -

RED

EVEL

OPM

ENT

Act

ive

Dev

elop

men

ts/R

edev

elop

men

tsU

DR

June

30,

201

1

(Una

udite

d)(D

olla

rs in

thou

sand

s)

ACTI

VE D

EVEL

OPM

ENT

Page 29: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 1

1

Boo

k Va

lue

Cur

rent

UD

R's

Equ

ity

UD

R's

of

JV

Proj

ect

Wei

ghte

d A

vgN

umbe

rPr

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tyO

wne

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pIn

vest

men

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are

Rea

l Est

ate

Deb

tIn

tere

stD

ebt

Join

t Ven

ture

of H

omes

Type

Inte

rest

at 6

/30/

2011

YTD

NO

I (1)

of N

OI

Ass

ets

6/30

/201

1 (2)

Rat

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atur

ity

Texa

s JV

(10

com

mun

ities

)3,

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den

20%

8,50

5$

11

,550

$

2,31

0$

36

5,42

1$

25

4,00

0$

5.

6%12

/201

4

KFH

JV

(1 c

omm

unity

)15

1

Hig

h-ris

e30

%5,

012

1,42

6

428

44

,217

26

,000

4.5%

5/20

15

Met

Life

JV

5,74

8

G

arde

n/H

igh-

rise

Var

iabl

e12

9,54

5

44,4

44

5,

190

2,42

0,59

5

1,21

3,14

5

4.0%

Var

ious

2

6 O

pera

ting

Com

mun

ities

(12.

27%

ow

ners

hip)

1

0 La

nd P

arce

ls (4

.11%

ow

ners

hip)

Tota

l Ope

ratin

g Jo

int V

entu

res

9,89

1

14

3,06

2$

57,4

20$

7,

928

$

2,83

0,23

3$

1,49

3,14

5$

Num

ber

Ow

ners

hip

Inve

stm

ent

Estim

ated

Com

plet

ion

Join

t Ven

ture

of H

omes

Inte

rest

at 6

/30/

2011

Cos

tD

ate

(3)

The

Lodg

e at

Sto

ught

on J

V (1

com

mun

ity)

240

95

%17

,172

$

43,4

00$

3Q

12

13th

& M

arke

t JV

(1 c

omm

unity

)26

3

95%

10,2

84

75

,500

3Q13

Dom

ain

Col

lege

Par

k JV

(1 c

omm

unity

)25

6

95%

6,88

6

62,0

00

3Q

13

Tota

l Dev

elop

men

t Joi

nt V

entu

res

759

34

,342

$

180,

900

$

Estim

ated

Num

ber

Boo

kPr

oper

ty/L

ocat

ion

of H

omes

Valu

e

3033

Wils

hire

190

15

,630

Los

Ang

eles

, CA

Vitr

uvia

n P

arkS

MTB

D80

,402

Add

ison

, TX

Tota

l Lan

d96

,032

$

(1)R

epre

sent

s ye

ar-to

-dat

e ne

t ope

ratin

g in

com

e at

100

%.

(2)R

epre

sent

s pr

ojec

t deb

t at 1

00%

.(3

)Dat

e co

nstru

ctio

n is

com

plet

e, b

ut d

oes

not r

epre

sent

the

date

of s

tabi

lizat

ion.

LAN

D

(Una

udite

d)

UN

CO

NSO

LID

ATE

D O

PER

ATI

NG

JO

INT

VEN

TUR

ES

UD

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int V

entu

re a

nd L

and

Sum

mar

yJu

ne 3

0, 2

011

(Dol

lars

in th

ousa

nds)

UN

CO

NSO

LID

ATE

D D

EVEL

OPM

ENT

JOIN

T VE

NTU

RES

Page 30: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Pric

e pe

rD

ate

Prop

erty

Nam

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catio

n/M

arke

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ome

(1)

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ork,

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3

Apr

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cho

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San

Mar

cos,

CA

26,1

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Apr

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go, C

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(1)

Exc

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pace

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re a

pplic

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chm

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uniti

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Page 31: UDR Second Quarter 2011 Earnings Supplement · During the second quarter of 2011, the Company commenced the development of 839 homes in three communities for $225 million. The developments

Atta

chm

ent 1

3

Wei

ghte

d A

vera

geSi

x M

onth

s En

ded

Cos

tU

sefu

l Life

(Yrs

) (2)

June

30,

201

1Pe

r Hom

e

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enue

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anci

ng C

apita

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5 - 2

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47,4

51

Six

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ost

June

30,

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1Pe

r Hom

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vice

s9,

611

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20

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Turn

over

Rel

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37

9$

Ave

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partm

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Exc

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eigh

ted

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age

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ul li

fe o

f cap

italiz

ed e

xpen

ses

for t

he th

ree

mon

ths

ende

d Ju

ne 3

0, 2

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(3)

Rev

enue

enh

anci

ng c

apita

l exp

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ture

s w

ere

incu

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at s

peci

fic a

partm

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con

junc

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Com

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vera

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pita

l exp

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ture

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n.(4

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tal r

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xpen

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repr

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t all

asse

t pre

serv

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n, tu

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and

reve

nue

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REC

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mm

ary

of C

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ost p

er H

ome)

(U

naud

ited)