UDR, Inc. (UDR) has recently completed the acquisition of 10 Hanover Square, a 493-home apartment community in the thriving financial district of Manhattan in New York City for $260.8 million from the Witkoff group.
The acquisition was funded through the assumption of an existing $192.0 million mortgage debt, issuance of operating partnership units worth approximately $64.3 million (with a floor price of $25 per unit) and approximately $4.5 million of cash-in-hand.
The 23-story building was the corporate headquarters of Goldman Sachs Group Inc. (GS) and Kidder Peabody before undergoing a major redevelopment in 2005 when it was converted into a residential tower. The complex which currently has revenue per home of $3000 per month is a major boost to the quality of UDR’s diverse portfolio.
This purchase shows UDR’s inclination towards owning and operating apartment homes in growth-oriented markets like Manhattan because of the high rate of job formation coupled with low affordability of homes. In addition to the one- to three-bedroom apartments the complex also has a fitness center, roof top sundeck, retail stores and restaurants making it a valuable premium asset for UDR.
UDR Inc. is an apartment real estate investment trust (REIT) that owns, operates, acquires, develops and renovates middle-market apartment communities. UDR is committed to providing premium quality homes and excellent service and value for its residents.
UDR has continuously upgraded the overall quality of its portfolio by selling smaller market, older properties and replacing them with newer assets in better long-term markets. UDR currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Apartment Investment & Management Co. (AIV) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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