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DENVER-UDR Inc. has agreed to sell 25,684 apartment units–about 39% of its portfolio–for $1.7 billion in cash. The multifamily REIT also announced a major expansion of its stock buy-back program; a “realignment” that will move its back-office operations here, where its executives have been based since 2001; and its fourth quarter earnings.

The portfolio to be sold consists of 86 apartment communities in Arkansas, Delaware, Florida, North Carolina, Ohio, Oregon, South Carolina, Tennessee, Texas, Virginia and Washington. The new owner will be a JV of DRA Advisors LLC of New York City and Greensborough, NC-based Steven D. Bell & Co. The sale is slated to close on March 3. No brokers were involved.

At Dec. 31, the portfolio being sold had total income per home of $744 per month, average occupancy of 94.4%, and operating margin of 62.3%. The average age of the portfolio was 24 years. The sale price equates to $66,578 per unit and a 6.56% capitalization rate based on trailing 12-month NOI that incorporates a $650 per home capital expenditure reserve and a 2.75% management fee.

Upon closing, UDR will own 40,183 homes in 146 communities concentrated mostly on the Pacific Coast. The company says approximately 47% of its net operating income now will be generated from homes on the Pacific coast, while 24% will come from the Virginia-Washington, DC corridor and 19% will come from Florida.

“This transaction captures the disparity in value between private and public markets, and focuses the company in locations demonstrating high rent growth, strong job growth and low single family home affordability,” says Thomas Toomey, UDR president and chief executive.

Toomey says UDR will invest the proceeds in share repurchases, debt pay down, new acquisitions and its development and redevelopment programs. Earlier today, the company said its board of directors authorized a tripling of the company’s share repurchase program to 22 million shares from seven million shares.

With regard to the relocation of UDR’s back-office administration operations from Richmond, VA to Denver, the company says it is “realigning resources to improve efficiencies” and that a charge of $3.6 million was recorded in the fourth quarter for severance payments, relocation expenses, and other related costs.

“The changes we are making will improve efficiency and centralize job functions in fewer locations,” Toomey says. “We expect to realize savings from overhead reductions, improved efficiencies, and process improvements.”

Lost in the flurry of announcements was the company’s fourth quarter earnings report. The company produced FFO of $58.3 million or $0.40 per share, below the consensus estimate of $0.49, but the operating performance of its portfolio was strong. The company reported 8% growth in same-community NOI, with rent up 3.7% and concessions, bad debt, and operating expenses down.

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