Citi's Outlook on UDR is Promising; Maintain Hold (UDR)

Citi released a report today which gives an outlook for UDR, Inc. UDR in light of Citi's 2011 Global Property CEO Conference. UDR owns and manages apartment communities in the U.S. and is expected to enjoy strong growth due to an increasing number of young renters, a fractured housing market, and supply constrained core markets.

Citi analysts expect UDR to continue to grow through acquisitions. The company has its eye on Manhattan, and recently announced its first acquisition (approximately $260 million) in the Manhattan market. Analysts expect more acquisitions in NY and in UDR's existing core markets. UDR is also exploring redevelopment opportunities throughout the U.S. and is targeting approximately $400 million of development projects going forward.

The report further states that UDR is experiencing acceleration in revenue growth, due in part to increased renewal and new lease rates. The company's best markets are in San Francisco, Washington DC, Baltimore, and Seattle, while its weakest are Houston, Orlando, the Inland Empire, and Orange County.

Analysts provide the following risks for UDR stock: exposure to markets with high foreclosure rates and home price declines; employment and economic weakness in California; and increased capital costs.

Citi analysts maintain a Hold rating on UDR with a price target of $24. It is currently trading at $23.30.