UDR Inc., the Colorado-based apartment REIT, is bringing in Apollo as a two-thirds partner on 19 of its communities through a joint venture that values the portfolio at about $2.0 billion. The two companies announced the partnership on Oct. 21, 2026, and UDR used the same day to raise its full-year guidance and release preliminary third-quarter results.
The deal gives UDR what its chief executive called one of the company’s “strategic priorities”: access to equity capital, in this case without issuing new shares. UDR will use the money to pay down debt and buy higher-growth assets, according to the company.
The terms of the UDR-Apollo joint venture
The venture will own 19 communities with 7,059 apartment homes. Apollo-managed funds and affiliates will invest $1.34 billion of equity for an approximately two-thirds interest. UDR keeps a one-third interest, will consolidate the venture on its books, and will continue to operate and manage the properties in exchange for an asset management fee.
According to the announcement, the transaction implies a capitalization rate of approximately 6.0%, a measure of a property’s net operating income relative to its value. The portfolio’s average revenue per home is $2,058, and its average age is 39 years, making it an older slice of UDR’s holdings.
The structure includes an exit for UDR. The company retains an option to buy back Apollo’s interest for a finite period starting at the fifth anniversary of closing, at an expected fixed return of 7.00% to 7.50% to Apollo. The deal is expected to close on Oct. 29, 2026, subject to execution of documentation and customary closing conditions. Citigroup Global Markets and Wells Fargo Securities acted as structuring agents and financial advisors to UDR; Scotiabank advised Apollo.
The arrangement closely resembles the capital Apollo provided to Starwood Real Estate Income Trust in August, when it invested $1.02 billion in a Starwood affordable housing venture that also gave the REIT a buyback option capping Apollo’s return. In both cases, Apollo is taking a large, return-limited position in stabilized housing rather than buying properties outright.
What UDR and Apollo say they get
“Access to equity capital is one of UDR’s strategic priorities,” Tom Toomey, UDR’s chairman, president and CEO, said in the release. “With this transaction, we believe we will be positioned to take advantage of compelling opportunities in the marketplace, while improving the quality of our wholly-owned portfolio and strengthening our balance sheet, all in an accretive manner.”
Chief Financial Officer Dave Bragg described the venture as “a new, low-cost permanent source of equity capital.” He said UDR expects the deal to add to earnings and intends to put the proceeds into “higher-growth assets and other general corporate purposes,” with some of the money also going to debt reduction.
Apollo partner Jamshid Ehsani said the investment “provides a cost-efficient capital solution tailored to UDR’s needs” and demonstrates the reach of Apollo’s High Grade Capital Solutions business. Apollo reported about $1.05 trillion of assets under management as of June 30, 2026.
On our reading, the combination of an older portfolio, a fixed-return buyback and Apollo’s description of the deal as a “capital solution” places this closer to structured financing than to a conventional sale. UDR keeps operating control and the economic upside above Apollo’s capped return if it exercises the option.
Preliminary third-quarter results and raised guidance
In a separate release filed with the Securities and Exchange Commission, UDR said it expects third-quarter net income of $0.67 per diluted share, well above its earlier guidance of $0.13 to $0.15; the company’s reconciliation shows $190.1 million of net gains on the sale of real estate in the quarter. Funds from operations as adjusted (FFOA), the REIT’s preferred earnings measure, is expected at $0.65 per share, the top of its $0.63-to-$0.65 range.
The company raised its full-year 2026 FFOA guidance to $2.54 to $2.56 per share from $2.49 to $2.57, lifting the midpoint by 2 cents to $2.55. Full-year net income guidance rose to $1.58 to $1.60 per share from $1.03 to $1.11.
Operating numbers, which exclude the 19 joint venture communities, showed modest growth. Same-store revenue rose 1.8% year over year in the third quarter, expenses rose 2.2% and net operating income rose 1.6%. Weighted average physical occupancy was 96.5%, and effective blended lease rate growth was 2.0%. Including the 19 communities, third-quarter same-store revenue growth would have been 1.5%, and blended lease growth 1.7%, according to the release, suggesting the assets going into the venture have been growing more slowly than the rest of the portfolio.
For the full year, UDR now expects same-store revenue growth of 1.4% to 1.8%, expense growth of 2.7% to 3.1% and NOI growth of 0.8% to 1.2%. Those compare with an earlier outlook UDR had raised in July after second-quarter leasing beat expectations.
Capital recycling continues
The Apollo deal caps a busy quarter of portfolio reshuffling. During the third quarter, UDR sold two communities in Seattle and Nashville with 412 homes for $183.0 million, and it remains under contract to sell a 296-home community in the Washington, D.C., area for about $68.5 million. It took ownership of a 483-home community in California’s Inland Empire and a 286-home property in Portland, Ore., as it unwinds its debt and preferred equity program, and it expanded its joint venture with LaSalle Investment Management to about $958.3 million by contributing a 360-home Nashville community.
UDR, an S&P 500 company, owned or had an ownership position in 60,617 apartment homes as of Sept. 30, 2026. The company said the results are preliminary and unaudited, and it will report final third-quarter results on Nov. 2, 2026, with a conference call on Nov. 3. More apartment and REIT coverage is in RealtyWire’s commercial real estate section.
