Why Invest In UDR, Inc.

Press Release

UDR Announces Second Quarter 2007 Results

Company Release - 7/30/2007 5:20 PM ET

RICHMOND, Va.--(BUSINESS WIRE)--

UDR, Inc. (NYSE: UDR) today reported Funds From Operations ("FFO") of $66.3 million for the quarter ended June 30, 2007, compared to FFO of $63.1 million for the same period a year ago. The results produced FFO of $0.45 per share (diluted), compared to FFO of $0.43 per share (diluted) for the same period a year ago.

"I am pleased to announce another quarter of strong results," stated Thomas W. Toomey, President and Chief Executive Officer. "Sequential same community revenue growth improved by 2.1%, representing the eleventh consecutive quarter of revenue growth. Our total income per home grew to $948 per month, an increase of $50 per month over the prior year. The apartment sector continues to experience good fundamentals, and we are seeing the benefit of our redevelopment program as we bring renovated homes back into the rental market with significantly higher monthly rent. We added several projects to our development pipeline and are expanding our access to capital through several joint ventures with institutional investors. We are executing on our strategy throughout the Company and I'm excited about the future of UDR."

Company Vision and Growth Strategies

In the first quarter of 2007, the Company announced a new vision and growth strategies. The vision is to be the innovative multi-family real estate investment of choice. Four strategies were identified to guide decision making and accelerate growth. The strategies are to:

    --  Strengthen our portfolio

    --  Expand RE3, focusing on development, land entitlement and
        short-term hold investments

    --  Transform operations

    --  Source low cost capital

Progress on these strategies is described below and will be discussed during the Company's July 31, 2007 conference call.


    Second Quarter Highlights

    --  Achieved 6.5% same community net operating income growth.

    --  Commenced deployment of YieldStar(R) revenue management.

    --  Launched a redesigned website using advanced technology at
        www.udr.com.

    --  Issued 5.4 million shares of 6.75% Series G Cumulative
        Redeemable Preferred Stock for $135 million and redeemed all
        5.4 million shares of 8.60% Series B Cumulative Redeemable
        Preferred Stock.

      Portfolio Operating Performance and Same Community Results
             Second Quarter 2007 vs. Second Quarter 2006
----------------------------------------------------------------------

                                                            Total Same
                        Revenue Expense  NOI   % of Total   Community
        Region          Growth  Growth  Growth Portfolio(a)   Homes
----------------------- ------- ------- ------ ------------ ----------

Western                    7.6%    3.3%   9.7%          31%     13,345
Mid-Atlantic               4.6%    5.9%   4.0%          27%     16,535
Southeastern               3.0%    2.3%   3.3%          22%     13,774
Southwestern               5.0%    1.6%   7.5%          17%     12,903
Midwestern                 7.8%    2.7%  11.4%           3%      2,974
Total                      5.3%    3.3%   6.5%         100%     59,531

(a) Based on YTD 2007 NOI

During the second quarter, 59,531 apartment homes, or 84% of total apartment homes, were classified as same community. The Company defines same community as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent quarter.

                        Same Community Results
 ($ in thousands, except rents & fees and total income per occupied
                                 home)
----------------------------------------------------------------------

                                     2nd Qtr '07 2nd Qtr '06 % Change
                                     ----------- ----------- ---------
Rent and other income                  $164,018    $155,667       5.4%
Concessions                               2,716       2,633       3.2%
Bad debt                                    926         798      16.0%
Total income                            160,376     152,236       5.3%
Expenses                                 55,837      54,042       3.3%
Net operating income                    104,539      98,194       6.5%

Rents & fees per occupied home             $904        $862       4.9%
Total income per occupied home             $948        $898       5.6%
Average physical occupancy                 94.7%       94.9%   -20 bps
Operating margin                           65.2%       64.5%    70 bps
Resident credit loss, % of effective
 rent                                       0.6%        0.5%    10 bps

Comparing second quarter 2007 to second quarter 2006 on a same community basis, 97% of the mature markets generated positive revenue growth.

         Same Community Results, Quarter/Sequential Quarter
 ($ in thousands, except rents & fees and total income per occupied
                                 home)
----------------------------------------------------------------------

                                     2nd Qtr '07 1st Qtr '07 % Change
                                     ----------- ----------- ---------
Rent and other income                  $164,018    $160,619       2.1%
Concessions                               2,716       2,808      -3.3%
Bad debt                                    926         664      39.5%
Total income                            160,376     157,147       2.1%
Expenses                                 55,837      56,286      -0.8%
Net operating income                    104,539     100,861       3.6%

Rents & fees per occupied home             $904        $893       1.2%
Total income per occupied home             $948        $935       1.4%
Average physical occupancy                 94.7%       94.1%    60 bps
Operating margin                           65.2%       64.2%   100 bps
Resident credit loss, % of effective
 rent                                       0.6%        0.4%    20 bps

Comparing second quarter 2007 to first quarter 2007 on a same community basis, revenue increased by 2.1%, representing the eleventh consecutive quarter of sequential growth.

Strengthen Our Portfolio

The Company's first strategy is to concentrate its apartment communities in markets where job growth expectations are high, home affordability is low, and the demand/supply ratio for multi-family housing is favorable. Second quarter activity included:

    --  Marketing a total of 2,710 homes in nine communities in
        addition to a joint venture which includes nine Texas
        properties representing 3,690 homes. Total potential sales
        proceeds are expected to exceed $600 million.

    --  The acquisition of Borgata Apartments, a mixed-use community
        with 71 apartment homes and 5,358 square feet of retail space
        in Bellevue, Washington. The community was purchased for $31
        million and enjoys an excellent location that is in the
        central business district of downtown Bellevue adjacent to the
        downtown Bellevue Park and retail district. The homes average
        981 square feet and generate average total monthly income of
        $2,170 per home. The community was completed in 2001 and will
        be undergoing kitchen and bath upgrades.

Redevelopment activity is underway at nine communities, representing 2,740 homes, at a budgeted cost of $129 million. Annualized second quarter net operating income at these communities was $11.1 million. The Company believes post-renovated stabilized annual net operating income at these communities will increase by 110% to a total of $23.3 million.

The Company has completed redevelopment of three communities, representing 1,336 homes, with a total investment of $72.7 million. Current quarter annualized net operating income at these communities is $9.4 million, up 57% from pre-renovated net operating income.

Expand RE3

In May, RE3 completed the acquisition of five communities in Addison, Texas. This completes the assemblage of 100 acres which the Company intends to redevelop beginning in the fourth quarter of 2007. There is the potential to more than double the density to over 5,500 homes and provide retail and office space. It is likely that the development will be done in conjunction with one or more institutional investors.

"We are pleased to have reached our goal of assembling this development site located in the shadow of the Dallas north toll way job corridor," stated W. Mark Wallis, Senior Executive Vice President. "We are now working with the City of Addison to develop a dynamic mixed-use site plan that will be a centerpiece for their community."

At June 30, 2007, the Company's total development and redevelopment pipeline totaled $2.8 billion in 43 communities.

RE3 contributed $0.05 to second quarter FFO as a result of the sale of its 250-home Canyon Oaks apartment community in San Ramon, California for $64.3 million.

Transform Operations

The third strategy is to grow net operating income through automation and to improve the ease of doing business with UDR.

The Company continued to make progress on the foundation of Operations 2.0, its new operating model, during the quarter. YieldStar(R) was selected for revenue management and deployment will be completed by the end of 2007.

A redesigned and enhanced website was launched at www.udr.com. The new site improves the ease of doing business online through features such as click-to-chat, enhanced mapping, furniture arranger, additional pricing options and mobile web accessibility. In the first month following the launch, the Company experienced the highest unique visitor traffic in its history.

The enhancements increase traffic and reduce marketing costs. During the quarter, 48% of visitor traffic was initiated via the internet, up from 36% last year. Cost savings are realized by implementing technology solutions that drive traffic to its communities. As a result, same community marketing costs declined by more than 20% year over year.

Source Low Cost Capital

The fourth strategy is to leverage operating, financial and investment platforms to attract low cost capital alternatives.

In May, 5.4 million shares of 6.75% Series G Cumulative Redeemable Preferred Stock were issued with an aggregate price of $135 million. Also in May, all 5.4 million shares of 8.60% Series B Cumulative Redeemable Preferred Stock were redeemed.

In July, the Company amended its existing $500 million senior unsecured revolving credit facility, increasing it to $600 million and extending its maturity to July 2012. Under certain circumstances, the Company may increase the facility to $750 million. Based on current credit ratings, the credit facility carries an interest rate equal to LIBOR plus a spread of 47.5 basis points, which represents a 10 basis point reduction to the previous unsecured revolver.

Earnings Guidance

The Company believes that financial results for 2007 will be affected by international, national and regional economic trends and events, the acquisition and/or disposition of apartment communities, portfolio repositioning, financing activities, and other factors. The Company's guidance for third quarter 2007 FFO is $0.45 to $0.48 per share (diluted) and $1.80 to $1.85 per share (diluted) for the full year 2007. All guidance is based on the current expectations and judgment of the Company's management team.

A reconciliation of the range provided for projected 2007 FFO per share for the full year to Earnings Per Share ("EPS") for the full year is as follows:

                                                             2007
                                                         -------------
Funds From Operations (1)                                $1.80  $1.85
Conversion to GAAP Share Count (2)                        0.10   0.11
Minority Interest of OP Unit Holders (2)                 (0.05) (0.03)
Depreciation (3)                                         (1.63) (1.58)
Gains (3)                                                 0.50   0.70
Preferred Dividends                                      (0.10) (0.10)
                                                         ------ ------
Expected Earnings Per Share                              $0.62  $0.95
                                                         ====== ======

(1) FFO is defined as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable property, premiums or original issuance costs associated with preferred stock redemptions, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms to the National Association of Real Estate Investment Trust's definition issued in April 2002. UDR considers FFO in evaluating property acquisitions and its operating performance and believes that FFO should be considered along with, but not as an alternative to, net income and cash flows as a measure of UDR's activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs.

(2) Operating Partnership units are not considered to be common stock equivalents for GAAP purposes.

(3) Due to the uncertain timing and extent of property dispositions and acquisitions, actual results could differ materially from expected EPS.

Supplemental Information

The Company offers Supplemental Information that provides details regarding the financial position and operating results of the Company. This Supplemental Information is available on the Company's website at: http://www.udr.com/resources/files/Investor_Relations/2Q2007.pdf.

Conference Call Information

Date:               July 31, 2007
Time:               1:00 p.m. Eastern Time

To Participate in the Telephone Conference Call:
Domestic:           800-218-8862
International:      303-262-2050

If you have any questions, please contact:
Gloria Price:       720-283-6132
E-mail:             gprice@udr.com

Conference Call Playback:
Domestic:           800-405-2236
International:      303-590-3000
Passcode:           11091944#

The playback can be accessed through August 7, 2007.

Webcast and Podcast:

The conference call will also be available on UDR's website at www.udr.com and at www.ccbn.com. To listen to a live broadcast, go to one of these sites at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay and downloadable podcast of the call will also be available for 90 days on both UDR's and CCBN's websites.

About UDR, Inc.

UDR, Inc. (NYSE:UDR) is a leading multi-family real estate investment trust (REIT) with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted U.S. markets. As of June 30, 2007, UDR owned 71,290 apartment homes and had 5,917 homes under development and another 1,108 homes under contract for development in its pre-sale program. For over 30 years, UDR has delivered long-term value to shareholders, the best standard of service to residents, and the highest quality experience for associates. An S&P 400 company, UDR is the fourth largest apartment REIT in the nation. Additional information can be found on the Company's website at www.udr.com.

Statements contained in this press release, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the Company's use of words such as "expects," "plans," "estimates," "projects," "intends," "believes," and similar expressions that do not relate to historical matters. Such forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors, which include, but are not limited to, unfavorable changes in the apartment market, changing economic conditions, the impact of competition and competitive pricing, acquisitions or new developments not achieving anticipated results, delays in completing developments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multi-family housing, expectations concerning redevelopment activities, expectations on occupancy levels, expectations concerning the Texas joint venture, expectations that automation will help grow net operating income, expectations on post-renovated stabilized annual operating income, exceptions on annualized net operating income, and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q. All forward-looking statements in this press release are made as of today, based upon information known to management as of the date hereof. The Company assumes no obligation to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.

Attachment 1
------------------------------

                                 UDR
                Consolidated Statements of Operations
                             (Unaudited)

                               Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                               ------------------- -------------------
In thousands, except per share
 amounts                         2007      2006      2007      2006
------------------------------ --------- --------- --------- ---------

Rental income                  $178,231  $165,197  $353,119  $327,097

Rental expenses:
      Real estate taxes and
       insurance                 21,963    19,436    42,932    41,005
      Personnel                  16,606    16,296    34,083    31,736
      Utilities                   8,512     8,814    19,349    19,044
      Repair and maintenance     10,011     9,194    19,868    18,463
      Administrative and
       marketing                  5,037     5,107     9,709     9,933
      Property management         5,102     5,093    10,147    10,084
      Other operating expenses      314       301       625       599
                               --------- --------- --------- ---------
                                 67,545    64,241   136,713   130,864
Non-property income:
      Other income                  697       724     1,175     1,902
                               --------- --------- --------- ---------
                                    697       724     1,175     1,902
Other expenses:
      Real estate depreciation
       and amortization          64,108    54,687   124,682   107,268
      Interest                   42,758    46,430    86,948    90,900
      General and
       administrative             9,604     6,837    19,430    13,601
      Other depreciation and
       amortization                 918       712     1,753     1,386
                               --------- --------- --------- ---------
                                117,388   108,666   232,813   213,155

Loss before minority interests
 and discontinued operations     (6,005)   (6,986)  (15,232)  (15,020)
Minority interests of outside
 partnerships                       (37)      (38)      (67)      (54)
Minority interests of
 unitholders in operating
 partnerships                       707       663     1,390     1,389
                               --------- --------- --------- ---------
Loss before discontinued
 operations, net of minority
 interests                       (5,335)   (6,361)  (13,909)  (13,685)
Income from discontinued
 operations, net of minority
 interests (A)                   12,031    38,545    52,438    57,878
                               --------- --------- --------- ---------
Net income                        6,696    32,184    38,529    44,193
Distributions to preferred
 stockholders - Series B         (1,908)   (2,911)   (4,819)   (5,822)
Distributions to preferred
 stockholders - Series E
 (Convertible)                     (931)     (931)   (1,863)   (1,863)
Distributions to preferred
 stockholders - Series G           (785)        -      (785)        -
Premium on preferred stock
 repurchases                     (2,261)        -    (2,261)        -
                               --------- --------- --------- ---------
Net income available to common
 stockholders                      $811   $28,342   $28,801   $36,508
                               ========= ========= ========= =========

Earnings per weighted average
 common share - basic and
 diluted:
     Loss from continuing
      operations available to
      common stockholders, net
      of minority interests      ($0.08)   ($0.08)   ($0.18)   ($0.16)
     Income from discontinued
      operations, net of
      minority interests          $0.09     $0.29     $0.39     $0.43
     Net income available to
      common stockholders         $0.01     $0.21     $0.21     $0.27

Common distributions declared
 per share                      $0.3300   $0.3125   $0.6600   $0.6250

Weighted average number of
 common shares outstanding -
 basic                          134,727   133,676   134,620   133,634
Weighted average number of
 common shares outstanding -
 diluted                        134,727   133,676   134,620   133,634

(A) Discontinued operations represents all properties sold since
 January 1, 2005 and properties that are currently classified as held
 for disposition at June 30, 2007. Gains on sales are included in
 discontinued operations.
Attachment 2
-------------------------------

                                 UDR
                        Funds From Operations
                             (Unaudited)

                                Three Months Ended  Six Months Ended
                                     June 30,           June 30,
                                ------------------ -------------------
In thousands, except per share
 amounts                          2007     2006      2007      2006
------------------------------- --------- -------- --------- ---------

Net income                        $6,696  $32,184   $38,529   $44,193

Continuing Operations:
   Distributions to preferred
    stockholders                  (3,624)  (3,842)   (7,467)   (7,685)
   Real estate depreciation and
    amortization                  64,108   54,687   124,682   107,268
   Minority interests of
    unitholders in operating
    partnerships                    (707)    (663)   (1,390)   (1,389)
   Contribution of
    unconsolidated joint
    ventures                          49        -       303         -

Discontinued Operations:
   Real estate depreciation          209    4,302     3,794    10,446
   Minority interests                708    2,508     3,087     3,766
   Net gains on the sale of
    land and depreciable
    property                      (8,921) (33,482)  (50,452)  (48,828)
   RE3 gain on sales, net of
    taxes                          6,803    6,478    11,166    15,004
                                --------- -------- --------- ---------
Funds from operations ("FFO") -
 basic                           $65,321  $62,172  $122,252  $122,775
                                ========= ======== ========= =========

   Distribution to preferred
    stockholders - Series E
    (Convertible)                    931      931     1,863     1,863

                                --------- -------- --------- ---------
Funds from operations - diluted  $66,252  $63,103  $124,115  $124,638
                                ========= ======== ========= =========

Weighted average number of
 common shares and OP Units
 outstanding - basic             142,493  142,418   142,603   142,382
Weighted average number of
 common shares, OP Units, and
 common stock equivalents
 outstanding - diluted           148,114  147,940   148,623   147,874

FFO per common share - basic       $0.46    $0.44     $0.86     $0.86
                                ========= ======== ========= =========
FFO per common share - diluted     $0.45    $0.43     $0.84     $0.84
                                ========= ======== ========= =========


FFO is defined as net income (computed in accordance with GAAP),
 excluding gains (or losses) from sales of depreciable property,
 premiums or original issuance costs associated with preferred stock
 redemptions, plus real estate depreciation and amortization, and
 after adjustments for unconsolidated partnerships and joint ventures.
 This definition conforms with the National Association of Real Estate
 Investment Trust's definition issued in April 2002. UDR considers FFO
 in evaluating property acquisitions and its operating performance and
 believes that FFO should be considered along with, but not as an
 alternative to, net income and cash flows as a measure of UDR's
 activities in accordance with generally accepted accounting
 principles and is not necessarily indicative of cash available to
 fund cash needs.

RE3 gain on sales, net of taxes, is defined as net sales proceeds less
 a tax provision and the gross investment basis of the asset before
 accumulated depreciation. We consider FFO with RE3 gain on sales, net
 of taxes, to be a meaningful supplemental measure of performance
 because the short-term use of funds produce profits which differ from
 the traditional long-term investment in real estate for REITs.
Attachment 3
---------------------------------------------

                                 UDR
                     Consolidated Balance Sheets
                             (Unaudited)

                                               June 30,   December 31,
In thousands, except share and per share
 amounts                                         2007        2006
--------------------------------------------- ----------- ------------

ASSETS

Real estate owned:
  Real estate held for investment             $5,480,288   $5,256,732
    Less: accumulated depreciation            (1,308,407)  (1,183,710)
                                              ----------- ------------
                                               4,171,881    4,073,022
  Real estate under development (net of
   accumulated depreciation of $363 and $527)    258,429      203,786
  Real estate held for disposition (net of
   accumulated depreciation of $62,251 and
   $69,490)                                      213,459      289,587
                                              ----------- ------------
  Total real estate owned, net of accumulated
   depreciation                                4,643,769    4,566,395
Cash and cash equivalents                          2,928        2,143
Restricted cash                                    5,259        5,602
Deferred financing costs, net                     37,375       35,160
Notes receivable                                   6,500       10,500
Funds held in escrow from IRC Section 1031
 exchanges pending the acquisition of real
 estate                                           25,780            -
Investment in unconsolidated joint ventures       28,180        5,850
Other assets                                      43,868       37,014
Other assets - real estate held for
 disposition                                       9,858       13,211
                                              ----------- ------------
  Total assets                                $4,803,517   $4,675,875
                                              =========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Secured debt                                  $1,254,612   $1,159,036
Secured debt - real estate held for
 disposition                                           -       23,883
Unsecured debt                                 2,339,752    2,155,866
Real estate taxes payable                         25,119       25,122
Accrued interest payable                          28,852       34,347
Security deposits and prepaid rent                26,756       24,360
Distributions payable                             49,118       46,936
Accounts payable, accrued expenses, and other
 liabilities                                      43,180       55,037
Other liabilities - real estate held for
 disposition                                       5,335        7,200
                                              ----------- ------------
  Total liabilities                            3,772,724    3,531,787

Minority interests                                57,904       88,833

Stockholders' equity
  Preferred stock, no par value; 50,000,000
   shares authorized
    0 shares of 8.60% Series B Cumulative
     Redeemable issued and outstanding
     (5,416,009 shares at December 31, 2006)           -      135,400
    2,803,812 shares of 8.00% Series E
     Cumulative Convertible issued and
     outstanding (2,803,812 shares at
     December 31, 2006)                           46,571       46,571
    5,400,000 shares of 6.75% Series G
     Cumulative Redeemable issued and
     outstanding (0 shares at December 31,
     2006)                                       135,000            -
  Common stock, $0.01 par value; 250,000,000
   shares authorized
    135,013,269 shares issued and outstanding
     (135,029,126 shares at December 31,
     2006)                                         1,350        1,350
Additional paid-in capital                     1,661,437    1,682,809
Distributions in excess of net income           (871,469)    (810,875)
                                              ----------- ------------
Total stockholders' equity                       972,889    1,055,255
                                              ----------- ------------
Total liabilities and stockholders' equity    $4,803,517   $4,675,875
                                              =========== ============

Note to Editors: The "3" in RE3 should be superscript.

Source: UDR, Inc.

Contact: UDR, Inc. Larry Thede, 720-283-2450 ir@udr.com www.udr.com