We recently compiled a list of the 12 Best Self Storage and Apartment Stocks to Invest In. In this article, we are going to take a look at where UDR, Inc. (NYSE:UDR) stands against the other self-storage and apartment stocks.
In the US, the apartment and self-storage markets are adapting to changing economic conditions and consumer needs. Both markets play a crucial role in the economy and are expected to maintain growth trajectories driven by the demand for housing and storage solutions.
The demand for safe storage solutions is supported by lifestyle changes such as the increasing prevalence of remote work and downsizing among retirees. Additionally, the rise of e-commerce is further supporting this trend. As businesses downsize their space and individuals declutter their homes, there is a rising demand for self-storage solutions.
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According to Nuveen Real Estate, the US apartment market saw record supply growth in 2024. This made it challenging for apartment operators to grow rents and keep occupancy levels above the sector’s long-term average. Despite these challenges, the demand for apartments remains robust due to a housing shortage and a growing preference for renting, particularly among younger generations who prefer flexibility over owning a home.
The apartment market saw an increase in resident retention in 2024 compared to the previous year. Middle-income households are expected to continue driving the ongoing demand for rental properties in the foreseeable future.
Methodology
To compile our list of the 12 best self-storage and apartment stocks to invest in, we looked for the largest apartment and self-storage companies. We reviewed our own rankings, financial media reports, and various online resources including ETFs to compile a list of the best self-storage and apartment stocks. Next, we focused on the top 12 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 12 best self-storage and apartment stocks to invest in were then ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial shot of an apartment community, highlighting the sense of community.
UDR, Inc. (NYSE:UDR)
Number of Hedge Fund Holders: 29
UDR, Inc. (NYSE:UDR) is a real estate investment trust (REIT) that owns, acquires, develops, and manages apartment communities in the United States. By the end of 2024, the company owned or had an ownership position in more than 60,000 apartment homes. UDR, Inc. (NYSE:UDR) ranks among the best apartment stocks to invest in according to hedge funds.
During the fourth quarter of 2024, the company strategically prioritized occupancy and this led to an increase in occupancy. Throughout the quarter, UDR, Inc. (NYSE:UDR) reported a steady increase in occupancy each month, resulting in a 50 basis point sequential improvement compared to the third quarter of 2024. As of early February 2025, UDR, Inc. (NYSE:UDR) has maintained an occupancy rate above 97%, which is about 30 basis points higher than the average for Q4 2024.
To grow its 2025 same-store revenue, the company is strategically focused on innovation and operational improvements. UDR, Inc. (NYSE:UDR) expects that the primary drivers for this growth will be the continued installation of property-wide Wi-Fi, additional property upgrades like enhanced package locker systems, customer retention, and reduced fraud. To combat fraud, UDR, Inc. (NYSE:UDR) implemented a range of AI-based detection measures, process improvements, and credit threshold reviews in mid-2024 to improve its resident screening.
Overall, UDR ranks 6th on our list of the best self-storage and apartment stocks to invest in. While we acknowledge the potential of UDR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UDR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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