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REPORTABLE SEGMENTS
 9 Months Ended
Sep. 30, 2022
REPORTABLE SEGMENTS  
REPORTABLE SEGMENTS

14. REPORTABLE SEGMENTS

GAAP guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker to decide how to allocate resources and for purposes of assessing such segments’ performance. UDR’s Chief Operating Decision Maker is comprised of several members of its executive management team who use several generally accepted industry financial measures to assess the performance of the business for our reportable operating segments.

UDR owns and operates multifamily apartment communities that generate rental and other property related income through the leasing of apartment homes to a diverse base of tenants. The primary financial measures for UDR’s apartment communities are rental income and net operating income (“NOI”). Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. NOI is defined as rental income less direct property rental expenses. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative and marketing. Excluded from NOI is property management expense, which is calculated as 3.25% of property revenue, and land rent. Property management expense covers costs directly related to consolidated property operations, inclusive of corporate management, regional supervision, accounting and other costs. UDR’s Chief Operating Decision Maker utilizes NOI as the key measure of segment profit or loss.

UDR’s two reportable segments are Same-Store Communities and Non-Mature Communities/Other:

●Same-Store Communities represent those communities acquired, developed, and stabilized prior to July 1, 2021 (for quarter-to-date comparison) and January 1, 2021 (for year-to-date comparison) and held as of September 30, 2022. A comparison of operating results from the prior year is meaningful as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior period, there is no plan to conduct substantial redevelopment activities, and the community is not classified as held for disposition within the current year. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three consecutive months.
●Non-Mature Communities/Other represent those communities that do not meet the criteria to be included in Same-Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment components of mixed use properties.

Management evaluates the performance of each of our apartment communities on a Same-Store Community and Non-Mature Community/Other basis, as well as individually and geographically. This is consistent with the aggregation criteria under GAAP as each of our apartment communities generally has similar economic characteristics, facilities, services, and tenants. Therefore, the Company’s reportable segments have been aggregated by geography in a manner identical to that which is provided to the Chief Operating Decision Maker.

All revenues are from external customers and no single tenant or related group of tenants contributed 10% or more of UDR’s total revenues during the three and nine months ended September 30, 2022 and 2021.

​

The following is a description of the principal streams from which the Company generates its revenue:

Lease Revenue

​

Lease revenue related to leases is recognized on an accrual basis when due from residents or tenants in accordance with ASC 842, Leases. Rental payments are generally due on a monthly basis and recognized on a straight-line basis over the noncancellable lease term because collection of the lease payments was probable at lease commencement, inclusive of any periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option. In addition, in circumstances where a lease incentive is provided to tenants, the incentive is recognized as a reduction of lease revenue on a straight-line basis over the lease term.

​

Lease revenue also includes all pass-through revenue from retail and residential leases and common area maintenance reimbursements from retail leases. These services represent non-lease components in a contract as the Company transfers a service to the lessee other than the right to use the underlying asset. The Company has elected the practical expedient under the leasing standard to not separate lease and non-lease components from its resident and retail lease contracts as the timing and pattern of revenue recognition for the non-lease component and related lease component are the same and the combined single lease component would be classified as an operating lease.

​

Other Revenue

​

Other revenue is generated by services provided by the Company to its retail and residential tenants and other unrelated third parties. Revenue is measured based on consideration specified in contracts with customers. The Company

recognizes revenue when it satisfies a performance obligation by providing the services specified in a contract to the customer. These fees are generally recognized as earned.

​

Joint venture management and other fees

​

The Joint venture management and other fees revenue consists of management fees charged to our equity method joint ventures per the terms of contractual agreements and other fees. Joint venture fee revenue is recognized monthly as the management services are provided and the fees are earned or upon a transaction whereby the Company earns a fee. Joint venture management and other fees are not allocable to a specific reportable segment or segments.

The following table details rental income and NOI for UDR’s reportable segments for the three and nine months ended September 30, 2022 and 2021, and reconciles NOI to Net income/(loss) attributable to UDR, Inc. on the Consolidated Statements of Operations (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, (a)

​

September 30, (b)

​

    

2022

    

2021

    

2022

    

2021

Reportable apartment home segment lease revenue

​

​

​

​

​

​

​

​

​

​

​

​

Same-Store Communities (a)

​

​

  

    

​

  

    

​

  

    

​

  

West Region

​

$

118,843

​

$

109,307

​

$

340,731

​

$

307,138

Mid-Atlantic Region

​

 

71,462

​

 

66,115

​

 

201,475

​

 

188,897

Northeast Region

​

 

69,577

​

 

59,902

​

 

197,058

​

 

174,795

Southeast Region

​

 

48,608

​

 

41,093

​

 

139,112

​

 

119,731

Southwest Region

​

 

36,801

​

 

32,261

​

 

80,568

​

 

71,710

Non-Mature Communities/Other

​

 

31,555

​

 

9,947

​

 

119,416

​

 

47,612

Total segment and consolidated lease revenue

​

$

376,846

​

$

318,625

​

$

1,078,360

​

$

909,883

​

​

​

​

​

​

​

​

​

​

​

​

​

Reportable apartment home segment other revenue

​

​

​

​

​

​

​

​

​

​

​

​

Same-Store Communities (a)

​

​

  

    

​

  

    

​

  

    

​

  

West Region

​

$

3,371

​

$

2,713

​

$

9,198

​

$

7,931

Mid-Atlantic Region

​

 

3,146

​

 

2,549

​

 

8,320

​

 

6,548

Northeast Region

​

 

1,937

​

 

1,619

​

 

4,624

​

 

3,773

Southeast Region

​

 

2,006

​

 

1,732

​

 

5,920

​

 

5,333

Southwest Region

​

 

1,647

​

 

1,363

​

 

3,120

​

 

2,976

Non-Mature Communities/Other

​

 

1,070

​

 

98

​

 

4,410

​

 

1,197

Total segment and consolidated other revenue

​

$

13,177

​

$

10,074

​

$

35,592

​

$

27,758

​

​

​

​

​

​

​

​

​

​

​

​

​

Total reportable apartment home segment rental income

​

​

​

​

​

​

​

​

​

​

​

​

Same-Store Communities (a)

​

​

  

    

​

  

    

​

  

    

​

  

West Region

​

$

122,214

​

$

112,020

​

$

349,929

​

$

315,069

Mid-Atlantic Region

​

 

74,608

​

 

68,664

​

 

209,795

​

 

195,445

Northeast Region

​

 

71,514

​

 

61,521

​

 

201,682

​

 

178,568

Southeast Region

​

 

50,614

​

 

42,825

​

 

145,032

​

 

125,064

Southwest Region

​

 

38,448

​

 

33,624

​

 

83,688

​

 

74,686

Non-Mature Communities/Other

​

 

32,625

​

 

10,045

​

 

123,826

​

 

48,809

Total segment and consolidated rental income

​

$

390,023

​

$

328,699

​

$

1,113,952

​

$

937,641

​

​

​

​

​

​

​

​

​

​

​

​

​

Reportable apartment home segment NOI

​

 

  

​

 

  

​

 

  

​

 

  

Same-Store Communities (a)

​

 

  

​

 

  

​

 

  

​

 

  

West Region

​

$

90,586

​

$

82,271

​

$

261,876

​

$

230,569

Mid-Atlantic Region

​

 

51,051

​

 

46,504

​

 

144,749

​

 

133,676

Northeast Region

​

 

46,014

​

 

36,777

​

 

130,392

​

 

109,243

Southeast Region

​

 

34,434

​

 

28,157

​

 

99,029

​

 

82,704

Southwest Region

​

 

23,609

​

 

20,751

​

 

52,651

​

 

46,255

Non-Mature Communities/Other

​

 

19,324

​

 

5,020

​

 

74,809

​

 

26,727

Total segment and consolidated NOI

​

 

265,018

​

 

219,480

​

 

763,506

​

 

629,174

Reconciling items:

​

 

  

​

 

  

​

 

  

​

 

  

Joint venture management and other fees

​

 

1,274

​

 

1,071

​

 

3,778

​

 

4,918

Property management

​

 

(12,675)

​

 

(9,861)

​

 

(36,203)

​

 

(28,129)

Other operating expenses

​

 

(3,746)

​

 

(4,237)

​

 

(13,485)

​

 

(13,045)

Real estate depreciation and amortization

​

 

(166,781)

​

 

(152,636)

​

 

(497,987)

​

 

(442,893)

General and administrative

​

 

(15,840)

​

 

(15,810)

​

 

(47,333)

​

 

(43,673)

Casualty-related (charges)/recoveries, net

​

 

(901)

​

 

(1,568)

​

 

(1,210)

​

 

(4,682)

Other depreciation and amortization

​

 

(3,430)

​

 

(3,269)

​

 

(9,521)

​

 

(8,472)

Gain/(loss) on sale of real estate owned

​

​

—

​

​

—

​

​

—

​

​

50,829

Income/(loss) from unconsolidated entities

​

 

10,003

​

 

14,450

​

 

4,186

​

 

29,123

Interest expense

​

 

(39,905)

​

 

(36,289)

​

 

(112,653)

​

 

(149,849)

Interest income and other income/(expense), net

​

 

(7,495)

​

 

8,238

​

 

(6,934)

​

 

12,831

Tax (provision)/benefit, net

​

 

(377)

​

 

(529)

​

 

(1,032)

​

 

(1,283)

Net (income)/loss attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership

​

 

(1,533)

​

 

(1,260)

​

 

(2,684)

​

 

(2,221)

Net (income)/loss attributable to noncontrolling interests

​

 

(7)

​

 

(49)

​

 

(34)

​

 

(73)

Net income/(loss) attributable to UDR, Inc.

​

$

23,605

​

$

17,731

​

$

42,394

​

$

32,555

(a)Same-Store Community population consisted of 50,318 apartment homes.
(b)Same-Store Community population consisted of 47,344 apartment homes.

​

The following table details the assets of UDR’s reportable segments as of September 30, 2022 and December 31, 2021 (dollars in thousands):

​

​

​

​

​

​

​

​

    

September 30, 

    

December 31, 

​

​

2022

​

2021

Reportable apartment home segment assets:

 

​

  

 

​

  

Same-Store Communities (a):

 

​

  

 

​

  

West Region

​

$

4,482,472

​

$

4,433,824

Mid-Atlantic Region

​

 

2,992,280

​

 

2,978,060

Northeast Region

​

 

3,444,332

​

 

3,422,846

Southeast Region

​

 

1,226,851

​

 

1,208,183

Southwest Region

​

 

1,270,687

​

 

1,247,434

Non-Mature Communities/Other

​

 

2,051,358

​

 

1,450,456

Total segment assets

​

 

15,467,980

​

 

14,740,803

Accumulated depreciation

​

 

(5,605,809)

​

 

(5,137,096)

Total segment assets — net book value

​

 

9,862,171

​

 

9,603,707

Reconciling items:

​

 

  

​

 

  

Cash and cash equivalents

​

 

1,532

​

 

967

Restricted cash

​

 

28,363

​

 

27,451

Notes receivable, net

​

 

40,128

​

 

26,860

Investment in and advances to unconsolidated joint ventures, net

​

 

761,117

​

 

702,461

Operating lease right-of-use assets

​

​

194,923

​

​

197,463

Other assets

​

 

209,728

​

 

216,311

Total consolidated assets

​

$

11,097,962

​

$

10,775,220

(a)Same-Store Community population consisted of 50,318 apartment homes.

​

Markets included in the above geographic segments are as follows:

i.West Region — Orange County, San Francisco, Seattle, Los Angeles, Monterey Peninsula, Other Southern California and Portland
ii.Mid-Atlantic Region — Metropolitan D.C., Baltimore and Richmond
iii.Northeast Region — Boston, New York and Philadelphia
iv.Southeast Region — Tampa, Orlando, Nashville and Other Florida
v.Southwest Region — Dallas, Austin and Denver