Greetings, and welcome to UDR's Second Quarter 2025 Earnings Call. As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Vice President of Investor Relations, Trent Trujillo. Thank you, Mr. Trujillo. You may now begin.

Thank you, and welcome to UDR's quarterly financial results conference call. Our press release and supplemental disclosure package were distributed yesterday afternoon and posted to the Investor Relations section of our website, ir.udr.com. In the supplement, we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. Statements made during this call which are not historical may constitute forward-looking statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be met. A discussion of risks and risk factors are detailed in our press release and included in our filings with the SEC. We do not undertake a duty to update any forward-looking statements. When we get to the question-and-answer period, we ask that you be respectful of everyone's time and limit your questions to one plus a follow-up. Management will be available after the call for your questions that did not get answered during the Q&A session today. I will now turn the call over to UDR's Chairman and CEO, Tom Toomey.

Thank you, Trent, and welcome to UDR's Second Quarter 2025 Conference Call. Presenting on the call with me today are President and Chief Investment Officer, Joe Fisher; and Chief Operating Officer, Mike Lacy. Chief Financial Officer, Dave Bragg, and senior officers, Andrew Cantor and Chris Van Ens will also be available during the Q&A portion of the call. The wind has been at our back in 2025, with employment and income growth exceeding consensus expectations, relative affordability squarely in the favor of apartments, and new supply pressures waning. This led to a healthy demand for apartments and record high absorption through the first six months of the year. This fundamental backdrop and our core operating strategies drove accelerating pricing power, higher resident retention, lower concessions, and strong expense control. As a result, our second-quarter and first half same-store revenue, expense, and NOI growth all exceeded our initial guidance provided back in February. The factors that are in our control have been working in our favor, and these positive trends led us to raise our full year FFOA per share guidance while also increasing our same-store growth expectations in yesterday's release. Mike will provide additional details in his remarks. Moving on, we feel good about year-to-date results and the opportunities ahead of us in the second half of the year. Our strategy and operating tactics will continue to be influenced by our customers and items that are in our control as we drive total revenue growth. ... Finally, I'm excited to welcome Dave Bragg to our UDR as our new Chief Financial Officer. Dave started with us last week and brings a wealth of industry experience and executive leadership to the team. We look forward to his ability to advance our strategic initiatives as well as grow the company.

Thanks, Tom. Today, I'll cover the following topics: our second-quarter same-store results, our improved full-year 2025 same-store growth guidance, including underlying assumptions, and expectations for operating trends across our regions. To begin, second-quarter year-over-year same-store revenue and NOI growth of 2.5% and 2.9%, respectively, were better than expected and were driven by: first, 2.8% blended lease rate growth, which was a result of renewal rate growth of 5% and new lease rate growth of positive 30 basis points. Our blends accelerated 190 basis points compared to the first quarter, which is 70 basis points higher than our historical sequential acceleration between the first quarter and second quarter. As a result, our first-half blended lease rate growth of 2% was 20 basis points above the high end of our guidance range. Second, annualized resident turnover was 420 basis points below the prior year period and more than 1,100 basis points better than our second-quarter average over the last 10 years. This enabled us to accelerate renewal rate growth, which led to more favorable blended lease rate growth. Third, occupancy averaged 96.9%, which was 30 basis points higher than our historical second-quarter average. Our strategic decision to build occupancy during the seasonally slower leasing period of the fourth quarter of 2024 and the first quarter of 2025 put us in a position of strength to drive revenue and NOI outperformance to start the year. ... Lastly, we delivered strong second quarter and first half 2025 results. Same-store revenue, expense, and NOI growth were all better than expectations and near the high end of the respective full-year guidance ranges.

Thank you, Mike. The topics I will cover today include our second-quarter results and our updated full-year guidance, a summary of recent transactions and capital markets activity, and a balance sheet and liquidity update. Our second-quarter FFO as adjusted per share of $0.64 exceeded the high end of our previously provided guidance. The $0.03 or 5% sequential FFOA per share increase was driven by a $0.02 increase from same-store NOI, with contributions from both higher-than-expected revenue growth and lower-than-expected expense growth, and a $0.01 contribution from the collection of previously unaccrued interest related to one of our former debt and preferred equity investments. Year-to-date results have exceeded our initial expectations, which led us to raise our FFOA per share guidance range. Our new full-year 2025 FFOA per share guidance range is $2.49 to $2.55. The $2.52 midpoint represents a $0.02 per share or approximately 1% improvement compared to our prior guidance. Looking ahead, our third-quarter FFOA per share guidance range is $0.62 to $0.64. The $0.63 midpoint reflects our expectation of stable sequential core results, with the $0.01 sequential decrease attributable to a difficult comparison from outsized debt deferred equity income recognized during the second quarter. ... Our investment-grade balance sheet remains highly liquid and fully capable of funding our capital needs.

Nick, it's Mike. Maybe a couple of things here since you touched a little bit on seasonality blends and guidance. I'd say first and foremost, just considering the leasing season and expectations for the second half, but I'd tell you, first, the guidance raise has everything to do with the execution of everything we've done up until this point of the year. So as a reminder, we started the year with 97.2% occupancy with the intention of always driving our blends through the heart of the season. And we exceeded the top end of our first half blended rent growth with 2% growth compared to that 1.4% to 1.8% guide that we originally had. ... And so what this leads to and where we've really seen it is market rents being a little bit more muted over the last 30, 60 days. Yes. Nick, we're seeing it today. And just to kind of size it a little bit, during the first quarter, the spread between the coastal markets and what we're experiencing in the Sunbelt was right around 450 basis points. And so I want to say our coast was plus or minus 2.5% and our Sunbelt was negative 2%. During the second quarter, our coastal blends were right around 4%, and the Sunbelt was starting to go relatively flat so right around 0%. Moving forward, my expectation is back half coast could come down a little bit, and the Sunbelt is still showing some signs of some positive momentum. That could be up a little bit from the first half of the year. Yes, Jamie, for us right now, the West Coast has done better than we would have expected year-to-date. And based on what I'm seeing at places like San Francisco, Seattle, even Orange County, for us, starting to see some positive trends throughout July. It's always important to remind everybody that L.A. is a very small piece of our portfolio. We have about 3% of our NOI and it is located in the Marina del Rey area. We have a couple of assets that are joint ventures, 50-50 ownership downtown kind of Mid-Wilshire area, but our wholly-owned assets are specific to Marina del Rey. So we've seen maybe a little bit of a different picture than some of the peers and maybe some of the third-party data that people are looking at. But again, for us, during the quarter, we averaged 96% occupancy. Concessions were right around 1 week and blends were between 1% to 1.5% growth.

Sanket, it's Joe. Yes, I'll probably step back a little bit and just talk, first off, the transaction market; secondarily, what we're seeing on the DPE side; and then thirdly on the development side and then what it means for us. On the transaction market, we do see a relatively healthy transaction market right now with plus or minus $30 billion trading each and every quarter. So the transaction market is pretty healthy. We've seen good stability in terms of cap rates overall. We're kind of in a plus or minus 5 cap world right now. Yes. From a debt perspective, we're very comfortable with the balance sheet today in terms of our liquidity, investment-grade balance sheet, etc. We do not want to lever up in this environment. So any debt that's coming due, you should assume we basically go out there and refi that.

Congrats, all, on a great quarter. Question for Joe on the Philadelphia property, the Fairmount Broadridge loan. Can you remind us, was there a $0.02 drag if you acquired the developer's interest in the initial guidance? I'm just curious if there was, is that being offset by the developer repaying some of that interest?

I can tell you, upon takeover, we were right around 83% occupancy. And I'm happy to say today we are actually 97% leased with a 30-day trend of about 93%. So just in about 30 to 45 days, the team has gotten in there. They've gotten the leases we need, especially as it relates to just the student population at that property. And we are in a much better place today than we were 45, 60 days ago. Yes, we actually were looking at that last night after some questions came in. And so just to let everybody know, we do capture all of our leases. And if we had to do something like a like-for-like, it would be about 88% of the leases, and we are basically within 10 or 20 bps, whether you look at like-for-like or all-in. So again, we like to capture everything because that's what builds our rent roll. And that's just a piece of the equation when you think about revenue but that's how we do it. Sure, yes. First, I'd say D.C. is our highest growth. When you think about our revenue and everybody can see it out there, right around 4.9% during the quarter. And just a reminder, this is one of our larger markets, 15% of our NOI. We're seeing pretty strong benefit across our portfolio today when we look at turnover. ... And probably the best example I can give there is a place like Austin as an example. You would think with a high supply concession activity being as high as it is, you'd have more people jumping. We have a lot of people that are opting to stay with us. It's early to tell right now. But what my expectation is that it's going to continue to be in that, call it, 200 to 300 basis points better on a year-over-year basis just based on what we're seeing today.

Thank you, all, for your time, interest, and support of UDR. We look forward to seeing many of you in the upcoming conference season. And with that, we'll close by saying take care.

Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.