UDR, Inc. (UDR): A Bull Case Theory

We came across a bullish thesis on UDR, Inc. on Jussi Askola, CFA’s YouTube channerl. In this article, we will summarize the bulls’ thesis on UDR. UDR, Inc.’s share was trading at $36.13 as of January 13th. UDR’s trailing and forward P/E were 82.27 and 55.56 respectively according to Yahoo Finance.

UDR is a US focused apartment REIT concentrated in supply constrained coastal markets, making it a natural successor after the author’s exit from AvalonBay at an attractive gain in late 2024. The apartment sector broadly sold off after management teams indicated that rent growth acceleration would arrive slightly later than investors had expected, triggering a pullback across the group.

Despite delivering solid operating results and raising guidance earlier in the year, UDR’s stock declined more than its peers, creating a valuation disconnect. Today, UDR trades at the lowest valuation in its peer set, with an implied cap rate above six percent and an estimated thirty percent discount to net asset value, materially wider than comparable coastal apartment REITs.

Operationally, the company continues to outperform, posting some of the strongest same property income growth in its peer group. Its emphasis on more affordable Class B properties in coastal markets has helped it navigate pockets of oversupply far better than peers focused on high end Class A assets.

UDR also offers an attractive income profile, supported by more than twenty years of consecutive dividend growth, a current yield near four point seven percent, and a conservative payout ratio. Its balance sheet is investment grade, management is shareholder aligned, and rent growth is expected to reaccelerate as supply pressures ease.

The opportunity in UDR is reinforced by a broader mispricing across the REIT sector. Public REITs are trading at implied cap rates far above private market transactions despite lower leverage, higher quality assets, and stronger occupancy.

This gap has drawn increasing interest from private equity firms, suggesting public markets are undervaluing real estate rather than signaling fundamental weakness. As interest rates decline and investors rotate back toward income generating assets, UDR’s unusually wide discount and durable fundamentals position it for meaningful upside alongside a growing stream of income.

Previously we covered a bullish thesis on Simon Property Group, Inc. by David in April 2025, which highlighted disciplined capital allocation, strong free cash flow generation, and resilient luxury focused tenants supporting dividend growth. SPG’s stock price has appreciated approximately by 24.53% since our coverage. This is because the thesis played out as cash flows and dividends remained durable. This is because high quality real estate reasserted intrinsic value. Jussi Askola, CFA shares a similar thesis but emphasizes on valuation dislocation in apartment REITs.

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Disclosure: None.