UDR Set to Report Q3 Earnings: What's in Store for the Stock?

UDR Inc. UDR, a premier multifamily real estate investment trust (REIT), is set to announce its third-quarter 2025 results after the closing bell on Oct. 29. Its quarterly results are likely to reflect growth in revenues as well as funds from operations (FFO) per share.

In the last reported quarter, this Denver, CO-based residential REIT came up with an FFO as adjusted per share of 64 cents, outpacing the Zacks Consensus Estimate of 62 cents. Results reflected year-over-year growth in same-store net operating income (NOI), led by a higher effective blended lease rate.

In the last four quarters, UDR’s FFO as adjusted per share met the Zacks Consensus Estimate on three occasions and surpassed it on the other, the average surprise being 0.81%. The graph below depicts the surprise history of the company:

United Dominion Realty Trust, Inc. Price and EPS Surprise

United Dominion Realty Trust, Inc. price-eps-surprise | United Dominion Realty Trust, Inc. Quote

As we approach the release of UDR's third-quarter 2025 earnings report, it is important to examine how this residential REIT is likely to have performed amid the current market conditions.

US Apartment Market in Q3

After two years of robust growth, the U.S. apartment market has finally hit a pause, with rent growth slipping into negative territory in the third quarter of 2025. According to RealPage data, effective asking rents fell 0.3% between July and September, the first rent cut between July and September since 2009. In the year-ending third quarter, rents slipped 0.1%. The slowdown reflects a cooling economy.

About 637,000 market-rate apartments were absorbed in the year-ending third quarter of 2025. While still healthy by long-term standards, it is a clear step down from the record nearly 784,900 units absorbed in the year-ending second quarter of 2025. “Sluggish new lease activity” is the culprit, said RealPage Chief Economist Carl Whitaker, pointing to weaker job growth and more cautious consumer behavior as key factors behind the shift against an uncertain economic backdrop.

While demand cooled, construction of roughly 474,800 units was completed nationwide over the past year, including 105,500 in the third quarter alone. That’s below last year’s peak but still well above normal supply levels. With so many new units hitting the market, landlords have had to compete harder to fill vacancies. Occupancy slipped to 95.4% in the quarter, down 30 basis points and ending five consecutive quarters of gains.

To attract renters, concessions became more common, with 22% of properties offering discounts averaging 6.2%. Operators are increasingly prioritizing occupancy over pricing power, suggesting rent softness may persist until concessions taper off. Interestingly, resident retention rose year over year, as renters chose to stay put amid economic uncertainty.

The rent cuts haven’t hit every region equally. Markets that built aggressively during the boom, especially across the South and West, are seeing the steepest declines. Rents dropped nearly 8% in Denver and Austin and around 5% in Phoenix and San Antonio, TX. Meanwhile, tourism-driven cities such as Las Vegas, Orlando, Nashville and San Diego are softening, too, as travelers spend less and local economies cool. In contrast, markets with lighter construction pipelines, such as the Midwest and Northeast, have held up better. Tech-heavy coastal hubs like San Francisco, New York and San Jose even saw modest rent growth, likely helped by return-to-office policies and limited new deliveries.

Factors to Consider and Projections for UDR

UDR’s third-quarter results are likely to reflect the benefits of its diverse portfolio with a superior product-mix of A/B quality properties in urban/suburban markets.

This strategy of maintaining a diversified portfolio across various geographies and price points limits volatility and concentration risks while aiding the company in generating steady operating cash flows. We estimate rental income to grow by 2.3% year over year for the third quarter.

The company is leveraging technological initiatives and process enhancements to bring about operational resiliency across its platform.Such efforts are likely to give UDR a competitive edge over others and enable it to capture additional net operating income (NOI), driving long-term profitability. We estimate the same-property NOI to increase 4.3% in the third quarter of 2025.

The Zacks Consensus Estimate for quarterly revenues is currently pegged at $430.08 million. This indicates a 2.36% year-over-year rise.

UDR expects third-quarter 2025 FFO as adjusted per share in the range of 62-64 cents.

However, elevated rental unit supply in select markets has heightened competition, weighing on its quarterly performance.

Before the third-quarter earnings release, the company’s activities were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO as adjusted per share has remained unrevised at 63 cents in the past three months. However, this suggests a 1.61% increase year over year.

Here Is What Our Quantitative Model Predicts for UDR:

Our proven model predicts a surprise in terms of FFO per share for UDR this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.

UDR currently carries a Zacks Rank of 3 and has an Earnings ESP of +0.41%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two other stocks from the broader REIT sector — Ventas VTR and Federal Realty Investment Trust FRT— that you may want to consider, as our model shows that these also have the right combination of elements to report a surprise this quarter.

Ventas, scheduled to report quarterly numbers on Oct. 29, has an Earnings ESP of +0.84% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Federal Realty, slated to release quarterly numbers on Oct. 31, has an Earnings ESP of +0.26% and carries a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research