UDR, Inc. (UDR) Earnings Call Transcript & Summary

Greetings. Welcome to UDR's Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference 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 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 portion, to be respectful of everyone's time and in an attempt to complete our call within 1 hour, we will limit questions to 1 per analyst. We kindly ask that you rejoin the queue if you have a follow-up question or additional items to discuss. Management will be available after the call to address any questions that did not get answered during the Q&A session today. I will now turn over the call to UDR's Chairman, President and CEO, Tom Toomey.

Thank you, Trent, and welcome to UDR's Second Quarter 2026 Conference Call. Presenting on the call with me today are Chief Operating Officer, Mike Lacey; Chief Financial Officer, Dave Bragg; and Senior Officer, Chris Van Ens, who will be available during the Q&A portion of the call. To begin, the fundamentals of the apartment industry have been favorable in 2026, specifically, employment growth has exceeded consensus expectations. Housing affordability remains in favor of renting relative to homeownership and new supply of apartment homes continues to abate. This backdrop, combined with our execution across operations and capital allocation, produced second quarter results that exceeded our expectations. In turn, this led us to raise our full year same-store growth and FFOA per share guidance. Operationally, we performed exceptionally well. The apartment industry is strengthening, but what differentiates UDR is our data-driven capabilities, continuous innovation and disciplined execution. Mike will elaborate on our operating strategies and tactics employed to generate results that deliver more cash to our bottom line. As it relates to capital allocation, we follow a data-driven approach to risk-adjusted returns when determining sources and uses of capital, which we visualize through a heat map. This process led us to sell assets with proceeds used to repurchase our shares at sizable discounts to NAV. Furthermore, as our tools for evaluating risk adjusted returns have advanced, we have made the strategic decision to let our debt and preferred equity book run off in the coming years. Our focus on operational excellence and data-driven approach to identify investments with outsized growth led us to this choice. UDR is an industry leader operator, not a lender, and we do not plan to reenter the debt preferred equity business. Dave will further discuss this and our capital allocation activities in his remarks. Moving on, later this week, UDR will distribute its first monthly dividend. Our history of delivering nearly $9 billion of dividends over 54 years demonstrates UDR's track record of stability, growth, transparency, liquidity and robust results. As we shared last quarter, our research indicated an opportunity to diversify our investor base by appealing to a growing segment of the market that values frequent cash flow distributions. Since announcing our shift to a monthly dividend, we have extensively engaged with a number of new capital channels and have received positive feedback. Finally, I'm happy to report that UDR has recently named a top workplace winner in the real estate industry for the third consecutive year. This achievement extends our track record as a leader in corporate stewardship and reflects the engaging employee experience we have built while solidifying our stature as an employer of choice. This is further evidenced by our associate turnover rate at only 19%, which is substantially better than the industry norm of 34%. In conclusion, we're pleased with our results in the first half of the year, which has set us up for a better-than-expected 2026. We are focused on excellence across operations, capital allocation and access to capital. This constant pursuit is underpinned by our innovative culture and approach to data. With that, I'll turn the call over to Mike.

Thanks, Tom. Today, I'll cover our second quarter same-store results, our increased full year 2026 same-store growth guidance, including underlying assumptions, and recent operating trends as well as our strategic position. The second quarter exceeded our outlook as we leverage real-time data to drive total revenue and cash flow growth. Specific to the quarter, year-over-year same-store revenue growth of 1.8% was driven by the following: blended lease rate growth of 2.1%, which accelerated by 50 basis points compared to the first quarter results and exceeded the high end of our 1.5% to 2% range. Year-over-year innovation income growth in the mid-single-digit range, which continue to bolster our results. Healthy occupancy that remained in the mid-96% range and a 60-basis-point contribution from improved delinquency, reflective of our focus on attracting and retaining high-quality residents. Resident retention of 60% marked an all-time seasonal high and was 140 basis points better than the prior year. This not only supported occupancy and improved bad debt, but also led to constrained same-store expense growth of only 2.6%. This demonstrates the value we created by delivering a high-quality customer experience as well as the scalability of our platform as evidenced by our industry-leading efficiency of 43 apartment homes managed per associate. Based on our year-to-date results, we raised our full year 2026 same-store growth guidance in conjunction with yesterday's release. Starting with same-store revenue growth, we raised our midpoint by 12.5 basis points, resulting in a new range of 0.75% to 2%. The increased midpoint is entirely driven by blended lease rate growth with first half performance of 1.9%, exceeding our midpoint expectations of 1.75% as the spring and summer leasing season is elongated compared to our original expectations. We continue to expect blended lease rate growth for the second half of the year will be between 1.5% and 2%, which means blended lease rate growth does not need to accelerate versus the first half for us to achieve our revenue growth guidance. In the event second half blended lease rate growth exceeded our expectations, that benefit would mostly accrue to 2027 since we have already completed the majority of our 2026 leasing activity. Beyond blended rent growth, we expect to operate with occupancy in the mid-96% range for the rest of the year and generate mid-single-digit growth from innovation income. Moving on to same-store expenses. We improved our full year midpoint by 50 basis points to 3.25%. This was driven by constrained growth across repairs and maintenance, real estate taxes and insurance. Combining the improvements to both our revenue and expense growth guidance, we increased our same-store NOI growth guidance by 50 basis points. Turning to regional performance. Second quarter results were led by our coastal markets, which delivered blended lease rate growth of 3.8% on average as compared to negative 2% blends in the Sunbelt. More specifically, on the West Coast, San Francisco remains a standout market with the strongest revenue growth across our portfolio, driven by blended lease rate growth of approximately 13% and occupancy in the high 97% range. Orange County also delivered attractive results with blended lease rate growth of more than 3%. The East Coast was led by New York and Philadelphia, with mid-single-digit blended lease rate growth and mid-97% occupancy in each market. Dallas remained our strongest Sunbelt market, while Austin showed the best momentum in blended lease rate growth, coupled with 97% occupancy. Beyond market influences, we continue to differentiate ourselves from the peers by enhancing our revenue growth with services and amenities desired by our residents. To conclude, we delivered second quarter results that exceeded our expectations and drove our full year guidance raise. Our team's ability to leverage real-time data continues to bear fruit and early third quarter results are tracked similar to the second quarter. Demand for our high-quality apartments is outpacing supply and our ability to tactically adjust operating strategies tailored to each asset is a testament to the exceptional caliber of our teams across the country. We will continue to innovate, improve resident satisfaction and expand operating margin, while positively impacting the communities we serve. I will now turn over the call to Dave.

Thank you, Mike. The topics I will cover today include our second quarter financial results and third quarter guidance, recent transactions and capital markets activity and the balance sheet and liquidity update. To begin, second quarter FFOA per share of $0.64 achieved the high end of our guidance range and exceeded consensus. The $0.02 per share increase versus the first quarter was driven primarily by higher NOI. As year-to-date results have exceeded our initial midpoint expectations, we have raised full year 2026 FFOA guidance by $0.01 per share at the midpoint to $2.53. Looking ahead to the third quarter, our FFOA per share guidance range is $0.63 to $0.65 to $0.64 midpoint contemplates the operating environment that Mike discussed. Next, capital allocation. Our perspective on the risk-adjusted returns on sources and uses of capital, as reflected in our capital allocation heat map, continues to guide our strategy. For much of the second quarter, our stock traded at an unusually wide discount to private market apartment asset pricing. This allowed us to take advantage of the public versus private market arbitrage opportunity to sell assets and repurchase our shares. Our data-focused and collaborative process, which includes our Orion analytics platform, as well as our perspective on operating upside, potential and CapEx, yields disposition assets that offer inferior cash flow growth prospects in the remaining portfolio. As a result, the process of selling assets and repurchasing shares enhances long-term cash flow per share growth. As the discount on our stock narrowed, we stayed nimble and turned our attention to select development and opportunistic acquisitions. As such, we executed the falling transactional and capital markets activity during the second quarter and thus far in the third quarter. First, we completed the sale of 1 apartment community and are under contract to sell 3 more. Estimated gross proceeds from these 4 dispositions total approximately $295 million and would result in 2026 disposition activity of approximately $650 million at a mid-5% buyer cap rate on average. We selected these assets for sale based on property level characteristics with a focus on 3 criteria: one, the outlook for rent growth per our proprietary analytical tool named Orion; two, CapEx requirements; and three, potential operational upside or a lack thereof. This group of assets screens inferior to our retained portfolio on these metrics. Next, on share buybacks. We recently expanded our share repurchase program to approximately 30 million shares. And during the quarter, we repurchased approximately 5.5 million shares for $200 million at an average price of $36.49 per share. This brings total repurchase activity since September of 2025 and to 11.5 million shares for approximately $420 million at an average price of $36.34 per share, which equates to a mid-6% implied cap rate. Then we commenced development on a 385-apartment-home community in Northern Virginia. This is a Phase II development located adjacent to an existing UDR apartment community which enhances efficiencies, and therefore, the stabilized yield we expect to achieve. Sticking with development, our team also continues to impress on 399 Iowa, our ground-up development in Riverside, California, which is now 2 quarters ahead of schedule for initial occupancy and 5% under budget. For both developments, we expect to achieve a mid-6% stabilized yield. Also, we opportunistically acquired 2 communities in Portland and 1 in Los Angeles through our debt and preferred equity program. Speaking about these assets as a 3-property portfolio, this screens well on our primary investment criteria, namely our Orion analytics platform signal for rent growth, CapEx and operating upside potential once transitioned to the UDR platform. Additionally, by adding more than 500 units in Portland, we do enhance our operating efficiencies in that market. Lastly, we're pleased to have formed a new joint venture with Carmel Partners, who acquired MetLife's 50% interest in our Columbus Square Assemblage in New York. UDR's economic interest and fee structure in the joint venture did not change. With the transaction, we funded a $50 million mezzanine loan to Carmel. This loan is unique in that we have been and will continue to be the operator of Columbus Square. Also the contractual return will be paid current in cash. Considering our year-to-date activity, we have updated our full year capital sources and usage guidance. Included in this outlook is our expectation that the size of our debt and preferred equity portfolio will continue to decline from $380 million at the end of the second quarter to approximately $250 million to $300 million at year-end due to successful repayments opportunities to gain control of assets and our disciplined underwriting where other capital uses offer superior risk-adjusted returns and growth. As Tom touched on, UDR has better tools today than it did more than a decade ago when we entered the debt and preferred equity business. Our focus on operational excellence and our data-driven approach to investing underpinned by Orion, increasingly allows us to find and execute on investments with outsized upside. By contrast, the returns on our debt and preferred equity, or DPE business are capped. Upon consideration of these dynamics, we have made the strategic decision to let our DPE balance run off over the next several years as maturities occur and/or we gain access to assets for which we see upside potential. Going forward, as successful paybacks occur and/or we gain control of assets that we like out of the book, we think about the impact of deploying into alternative investments such as acquisitions or redevelopment as having an approximately 400 basis points lower yield than DPE. This results in initial dilution of about $0.01 per share for each $100 million not redeployed into the DPE business. Over the long term, this impact narrows due to the growth we will see from these investments relative to the cap returns on DPE. In all, our capital allocation and balance sheet management strategies remain nimble as market conditions warrant. What does not change is our emphasis on data-driven decisions that drive long-term cash flow per share accretion, and our investment-grade balance sheet remains highly liquid and fully capable of funding our capital needs with nearly $1 billion of liquidity. With that, I will open up the call for Q&A. Operator?

[Operator Instructions] Our first question is from Eric Wolfe with Citibank.

There's been some questions and discussion from investors about UDR potentially being involved with AVD and EQR. I think just based on some of the details in the merger proxy, I assume you don't want to comment on that specifically, but I was hoping to understand the process you go through and the Board goes through to gauge whether something strategic might make sense and sort of how that overlays with how you think the business will change going forward?

Eric, I appreciate the question, and we received the same number. And what I'd start off with is I'm not going to respond to the speculation, okay? What I am going to focus on and what the Board and management team is on our strategy and acting in the best interest of our shareholders. So we always weigh the options that are presented to us in front of us and also what we are capable of executing. We're excited about what our strategy points to, which is operational excellence, capital allocation as well as access to capital. And we think our strategy, as laid out, has great potential, we're excited about it, and we'll continue to execute on it.

Our next question is from Steve Sakwa with Evercore ISI.

I was wondering maybe, Mike, if you could provide just some July maybe August, September trends in terms of renewal notices that you sent out. I looked back at my notes from NAREIT, I thought you would maybe talk about a mid-4s kind of renewal. So maybe just kind of update us on kind of where you're trending on that and anything around new lease growth in July would be helpful?

Yes, of course, Steve. I appreciate the question. I'd say, first and foremost, we're very pleased with our second quarter results and the continuation of that relatively strong leasing season that we've been talking about. Turning to current trends, specifically around your question on July and August, what I would tell you is it looks a lot like the last couple of months. What I'm seeing today is occupancy in the mid-96s, a sustained level of blends currently at the top end of our second half range, and as a reminder, that's 1.5% to 2%, and we're seeing continued progress on lower turnover, better cost controls as we move forward. I think it's important to maybe give you a few observations on what we're seeing around some of our regions. I'd tell you our coastal markets, as a reminder, make up 75% of our NOI. And again, we had blended rent growth of 3.8% during the quarter. What I'm seeing in July is very similar. So again, sustained blends in the Sunbelt markets, where we have 25% of our NOI. And as we previously discussed, we saw a little bit of pricing weakness during the second quarter. That turned into about negative 2% that we experienced. Right now, I'd tell you month-to-date in July, it's a little bit better. So I'm seeing a little bit more momentum there. I'm seeing around 1%, call it, negative 1.5% versus that negative 2%. So again, slightly better, but we're feeling good about where we're progressing. And again, it's more of an elongated season. Specific to your question around renewals, we are still sending out between, call it, 5% to 5.5%. We're still negotiating around 100 bps. And so my expectation for the third quarter is we're probably going to see around plus or minus 4% moving forward. So still feel good about that. As it relates to new lease growth, what I would tell you, market rents today feel pretty good. And when I look at market rents over the next, call it, 4 to 5 months, just thinking about kind of normal seasonality, if you will. That trajectory we typically see on a sequential month-over-month basis, I expect we'll probably continue to see blends around that 2% range. Specific to new leases, you're probably looking at flat. And I think in all regions, we could see flat new lease growth through September, which, again, is a little bit more elongated than we originally thought when we came into the year.

Our next question is from Jamie Feldman with Wells Fargo.

Great. I guess just you keep reporting in many of your peers is historically high retention rate. And so as we're thinking about the back half of the year, I appreciate all the color you just provided on renewals and outlook. But like how should we think about where the cycle is now versus historic seasonality and historic operating conditions? And it does seem like the supply pipeline is kind of working its way through the system, just maybe some bigger picture context of what you think '27 and the next couple of years should look like, given what the industry has gone through the last several?

Jamie, it's Mike. I'll start and see if anybody else wants to jump in. I think for this one, it's good to give a little context. So historically speaking, we would typically see around 50% to 51% turnover. And when I quote that, that's more of a 2010-2019 time frame. But since then, we've really put a lot of focus, and we've talked a lot about the customer experience and where we've leaned in to try to drive our turnover down. Last year, we hovered around 38% to 39% turnover, so significantly different. Going into the year. We expected it to be roughly flat, and I'll tell you right now, it's probably trending to about 150 to maybe 200 basis points better. And so around that 37%, 38% range. And so significantly different than where we've been. But I think it's important to talk a little bit about some of the things that make UDR different how we compare to some of our peers. And when you look at our turnover, we're outpacing them by about 400 to 500 basis points over the last couple of years. And that has everything to do with the work that we've done with the customer, understanding that lifetime value versus transactional approach, utilizing the millions of data elements every day to have those conversations with individuals and change that trajectory. So that's led us to some pretty significant results, but we're more excited about what's coming next. And when we think about kind of that Phase III, if you will, and -- it's more around the rent roll quality, where we're going to take this, we still think that there's gas left in the tank and we're going to continue to lean in to not only drive our turnover down, but we're also looking for opportunities to bring our pricing up. And I think you've seen that when I quote things like our blends in the coast being at 3.8% versus some of the other coastal peers that have recently reported. We have strong growth coming out of those areas. In addition to that, the teams have really started to lean into some best practices, things that are really working for us, things that we believe will continue to drive turnover down, and again, increase our renewals. Aside from that, we've created about 40,000 touch points with our existing resident base. that's making a difference. And I'd tell you one other thing I'd point to is our reviews. When you look at 4- and 5-star reviews, we're up 50% on a year-over-year basis. So really starting to make a difference on what you see when you go out to our websites. And again, this is -- it's creating reduced turnover, lower bad debt, and you've seen that in our numbers, better pricing power across new and renewals, and we think it's going to provide us a more effective marketing avenue as we go forward. So a lot of excitement here.

Jamie, this is Dave. I would also just provide a broader historical perspective for the industry that tells us that subject to the economic landscape, higher turnover can be a good thing. If we look back to, say, the middle of the 2000s turnover was around 55% at that time with very high rates of move-out to buy, but apartment revenue growth was in the mid-single-digit range. Thank you to great job growth at that time.

Jamie, you're catching the trifecta. I think all of us want to weigh in on such a nice open-ended question. My characterization would be along the following: one, 50-year record high supply, a good, stable economy, competing product, not affordable. I mean the runway for the housing rental market looks very solid. And you think about what our business is driven off of is job growth and supply and then how we operate. And on the things that we control, thematically, you can see that we have invested heavily and build tools around data to cash flow conversion. And Mike's highlighted, Dave as well as fundamentals around how we price the product and how we invest our capital. And I think just the refinement of those leads to excellence around operation, excellence around capital allocation and that will garner a better cost of capital for us in the long run. So we're excited about the overall, I would say, simplicity of the strategy, but more importantly, the execution around it and the foundation that we've built. So I think we're well set up. I really appreciate the question. I really want to dig into it more and got to get moving on to the next question.

Our next question is from Nick Yulico with Scotiabank.

So Dave, I just wanted to go back to your commentary on the DPE book and the likely wind down there and the earnings impact. I think you said it's about $0.01 dilution for each $100 million not redeployed into DPE. So is it right then to think about there's like a cumulative $0.04 annual impact to FFO that could hit at some point? And I guess from a timing standpoint, you have 2 years left to maturity on those investments, how should we think about that timing impact? And then also if is there any difference between taking back assets versus getting redeemed at par and redeploying into new investments that would change that math?

Nick, thank you for the question. So to start, let's frame the journey that we've been on over the last year, the DPE book balance has shrunk from a peak of about $725 million in the first quarter of last year to about $380 million at the end of the second quarter this year, and that's for 3 reasons. The market has become increasingly competitive, and we've remained quite disciplined. Also, we've enjoyed successful paybacks. And third, we've been able to get a hold of some assets that we're really excited about. So what we seek to do is really enhance our focus on investments where we will see upside. We have a focus on operational excellence and also a data-driven approach to investing that's underpinned by Orion. That allows us to find opportunities that don't just produce a yield today but one that grows over time. By contrast, the returns on DPE are capped. So we're excited to narrow that capital allocation focus and play for a higher quality and ultimately better growing stream of earnings over time. To make that transition, it does require us to get from here to there. And to put some parameters around it for you first, I would touch on 2026 because we're not in a position to provide guidance on future years, but I can frame the size of it. 2026, we're going from an average balance of about $550 million to an -- that was last year to an average balance in the $300 million to $350 million range this year. So that couple of hundred million dollar difference at that spread that I mentioned of 300 to 400 basis points depending on what we're redeploying into such as buybacks has been a big focus this year or potentially redevelopment that would result in about $0.01 per $100 million. So we've contemplated that already in our guidance for 2026, the path from $380 million at the end of the second quarter to the range of $250 million to $300 million. that's in guidance. Then as we go forward, we think about the book having maturities that are staggered pretty equally over the course of 2027 through 2031. And so the size of the book for 2026 is about $0.10 per share, and you could think about over the next several years, '27 through '31, the maturity is occurring over that time to take us down, but that's a near-term impact because you're redeploying into assets that didn't have growth. So that earnings impact mitigates over time as we grow into our new investments.

Our next question is from Austin Wurschmidt with KeyBanc Capital Markets.

Mike, I wanted to go back and touch on the Sunbelt trends a bit, including your comments about the momentum in Austin and Dallas being Dallas being 1 of the strongest markets across the region, but you really saw minimal new lease rate growth within those regions, even deceleration in the Southwest. Was just hoping you could expand on the underlying kind of market trends and whether you think that the lower turnover is actually elongating the pressure on new lease rate growth across the Sunbelt?

Great question, Austin. I think specific to some of the markets within the region, I can give you a little bit of color maybe starting with Dallas because on an absolute basis, when you look at blends and occupancy, it's still our best performing down there. And given that it's 9% our NOI, it's an important market for us. Today, what I'm seeing is about 97% occupancy there, but still in that plus or minus negative 1% range. So still feeling some of the pressure of supply there. But I would tell you there's some notable things that are driving some of the demand. I think are important to note a couple of them, public store, move their headquarters to Frisco. We have couple of thousand units in and around that area, and they can support up to 1,000 employees. So we're seeing a little bit of a benefit there. We see Samsung moving their headquarters to Plano, that's supporting about 1,000 employees. So that's beneficial to us. And then also AT&T's headquarters will be located close to about 2,000 homes as well. So there's some strong dynamics coming out of the demand side in Dallas that we are looking forward to taking advantage of. Moving down to Florida, Florida is about 10% of our NOI split between Orlando and Tampa. And what I would tell you there is experiencing some momentum in both areas, running around 97% occupancy today compared to 96% during the first quarter. And I'm seeing blends here around negative 1.5%, which is a bit of a change from what we experienced during the last quarter where we were between, call it, negative 2.5% to negative 3%. So strong momentum there. Maybe one other one, Nashville, only 2.5% of our NOI. So it's a relatively small market for us. Occupancy is in that 95.5% range, which -- it's mainly due to building that's down. So we have some down units there. It's causing a little friction on our occupancy. Blends are still in the negative 2% to negative 3% range. So we are still seeing some pressure from supply in different parts of Nashville. But what is promising is some of the major employers continue to expand their presence in Nashville. And specifically, the key anchors such as Amazon's towers down in the Nashville Yards, we've got Oracle's $1.2 billion campus. And the [indiscernible] surrounding the new Nissan stadium is really driving some demand too. So Again, if we can get through some of the supply pressures in these markets, which we're starting to see, we do think that there will be some uptick in some of our market rents as well as renewal growth as we go forward.

Mike, do you want to tie back to the earlier comment question on DPE and dilution about growth?

Yes, absolutely.

Some color around what we mean by growth?

Happy to. I think I mean, first and foremost, whenever we can get our hands on these properties and start to manage them, we can definitely see a difference. And maybe to Thomas' point, I can give a little bit of color on some examples. I think, first and foremost, when you think about a place like San Francisco, everybody knows very strong growth there. But what's been interesting to see for us, you have a place like Oakland. And that's where we had one of these DPE deals that we took over. That's been our best-performing asset in that market. And so when you think about San Francisco, we had 8% revenue growth. We had 14% growth at that deal in Oakland, and a lot of that's being driven by the rents that we're achieving there, which we're seeing around 20% versus 13% across the rest of the MSA. So strong performance coming out of there. I think maybe another example is just Philadelphia. We've got a deal down in Center City, Philadelphia. We're seeing around 8% growth down in Center City today compared to the market in general, being around 4%. So that's just on the top line some of the results that we're seeing coming out of this book and there's significant savings as it relates to cost controls, too. So they're performing well today.

Our next question is from Michael Goldsmith with UBS.

It definitely looks like it's been much more like a normalized peak leasing season this year. So what do you think has changed from the perspective of demand that is driving that?

I think there's a few things. Maybe I can highlight some of the stats things as we watch as leading indicators, but one of the big things I'd say is just some of the migration patterns. When you think about individuals that are leaving the MSA, what we're seeing today is it's around 19%, which is down from 23% last year. So not necessarily as many people leaving the MSA. And as it relates to people coming into our portfolio, it's rather similar. So around 26% of our move-ins today, it was 27% last year. So that's been pretty consistent. I think some of the other things that jump off the page to me is no doubling up, so we're still not seeing people double up. It's still around 1.8 residents per home. We still have low rent-to-income ratios across our portfolio, still in that 21% range. So that's been beneficial. And I think in addition to that, we have lower cancels and denials today than we did a year prior. So we're hovering back in that 35% to 37% range. Previously, that was just above 40%. And so a little bit more stickier. People are taking those applications and they're moving in. And so it feels like it's just been a little bit stronger than we would have expected. I think I highlighted, it's definitely more pronounced in some of those coastal markets today than maybe the Sunbelt, but it's nice to see some momentum as we go into July here in some of those markets as well.

Michael, Amy, I appreciate the question. This is Tom. With respect to the biggest difference, I think it's supply in the way it's getting priced. And we're looking at it and seeing what people are sending out for renewals, how much is coming online, the abatement of supply has helped us a lot to lengthen leasing season and the backdrop of that is a solid employment picture across a lot of our markets supporting it. So with that dynamic, you could see how it sets up for a better '27. We won't be facing that element of supply that we've had to deal with in the past. And with some luck, a robust job market continues.

Our next question is from Julien Blouin with Goldman Sachs.

Mike, I just want to double-click on some of those comments around new lease. I think I heard you mention that you think new lease could be flat through September. I think that would apply about a 60 bps acceleration versus the second quarter. I was just looking over the last few years, it seems like we saw over 200 basis points of sequential deceleration in new lease into 3Q in those years. I just guess like how much visibility and confidence do you have at this point on new lease sort of bucking that trend this year? What sort of feels different?

The thing that I typically point to and one of the leading indicators that I find to be most beneficial is our 30-day trend. And today, when we're running closer to 96%, it does give us confidence that we can continue to try to test the waters as it relates to market rents. And so I'm looking 30 days out. I've got a pretty good idea of where July and August are going to shake out. So that gives me confidence that we're going to continue to see a similar trend today. I think we still do have some of the dynamics of market rents coming off pretty significantly in some areas last year, especially through the back half of the year. And so there may be some opportunity to anniversary off of that, but we're just not banking on it yet. I'm mainly going off of what's happening today, what's that sequential line item look like in terms of market rents. And again, where is our occupancy and where do we have the opportunity to push? And so right now, it feels good. It feels like that plus or minus 0% on new leases achievable. And then if we can get to that 4% to 4.5% achieved renewal, you're still in that top end of our 1.5% to 2% range that we're looking at for the back half of the year. Again, if we can beat that, we're going to take advantage of it. I do think a lot of that will accrue to 2027 versus '26. But we are looking to try to optimize as much as possible and drive as much cash flow as we can.

Our next question is from Anthony Paolone with JPMorgan.

[indiscernible] on for Paolone today. Maybe switching gears a little bit. Could you guys speak to the new JV with Carmel like it came about in a unique way for MetLife selling their stake in Columbus Square. But is there any rumor appetite for you or your partner to maybe expand this venture or there's any more room to expand maybe some of your other ventures with LaSalle maybe as you guys wind down the DPE book?

Yes. I appreciate the question. This is Tom. With regards to Carmel, exceptional if not best-in-class type A developer who has an exhaustive and experienced track record around New York, in particular. And what drew us to them as a partner is as we look at the Upper West Side and our data from our resident profile and the supply picture, there is going to be a gap in a higher price point product. They have experience in both installing that and attracting the residents that fit that profile. So we see the IRRs on this substantially improving with their help and their experience. And like any other company, you think you're good, know what you're good at and when you think you can add other talent to the mix certainly look at it. And I think the Carmel represents a great partner for us on this deal, and we're excited to see both our investments rewarded for that. As it relates to any expansion beyond that, yes, certainly, there's always a dialogue around us trying to optimize the value out of every asset and how does it fit? I think with our data, we're digging through a lot of those opportunities and see similar type circumstances with assets where we can partner with capital who can enhance the returns beyond our current scope. And we'll see how that plays out over time. But we're excited about Columbus Square and our joint venture with them and long way in the future, how that might expand on an opportunistic type one-off basis.

Our next question is from Brad Heffern with RBC Capital Markets.

Dave, you talked in your prepared remarks about taking advantage of the public/private arbitrage during the quarter, but then shifting to development and acquisitions as that discount narrowed. Can you just talk about the relative attractiveness of the repurchase versus other capital uses as we sit here today at the current share price?

Sure, Brad. Thanks for the question. So as you noted, buybacks have been a top priority, $300 million repurchase year-to-date on top of about $120 million in the final 4 months of last year. This is the most in UDR's history around an episode of dislocation between public and private market values. As it relates to future buybacks, we have not and will not provide guidance on buybacks, but we'll just point to that track record, including the average purchase price around what we measure to be a 20% discount to NAV. So it remains prominent in the capital allocation playbook, at the same time, we remain mindful given the dispositions that we've executed on, on tax gain capacity as well as some other opportunities that pop up at times.