UDR Announced $1.1B of Deals; Southern California is Largest Market.RICHMOND, Va. -- United Dominion dominion, power to rule, or that which is subject to rule. Before 1949 the term was used officially to describe the self-governing countries of the Commonwealth of Nations—e.g., Canada, Australia, or India. Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Trust, Inc. (NYSE NYSE See: New York Stock Exchange :UDR UDR n abbr (BRIT) (= Ulster Defence Regiment) → fuerza de seguridad de Irlanda del Norte UDR (Brit) n abbr (= Ulster Defence Regiment) → ) today announced $1.1 billion of transactions with Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, to become the Company's largest market. Thomas W. Toomey, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated: "These transactions represent a fundamental change in the quality of our assets and the future growth of our Company. Approximately 50% of 2005 NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics is expected to come from California, Florida and Metropolitan D.C. with Southern California becoming the Company's largest single market and generating 16% of our proforma 2005 NOI." Mr. Toomey further stated: "These transactions further strengthen our competitive position in markets with high-job growth, expanding economies and high barriers to new construction and home ownership. We believe that this combination will continue to accelerate the growth and success of the Company." The Company has completed or has under contract $897 million of acquisitions in four separate transactions. This represents 6,172 existing homes (or $145,241 per home) with a blended capitalization rate Capitalization Rate According to the Appraisal Institute, it is a method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, by dividing the income estimate by an appropriate rate. of 5.7% based on forward twelve-month NOI and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. capital expenditures. Eighty-two percent of the acquisitions' NOI is generated from Southern California and 9% is generated from Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern , greatly expanding the Company's presence in California. The Company also has completed or is under contract to sell $174 million of communities with 3,515 homes (or $49,417 per home) in five separate transactions. The aggregate sales price represents a blended capitalization rate of 7.5% based on trailing twelve-months NOI less a capital expenditure reserve of $470 per home and an implied management fee. These sales are anticipated to generate a gain of $17 million or $0.13 per share, and an unleveraged internal rate of return of 10% over the weighted average lifetime of 8 years that the Company has owned the communities. After the transactions are completed, the Company will own and operate communities in 42 markets. For details on acquisitions and dispositions, see the attached Exhibit A. FINANCING These acquisitions are expected to be financed through the assumption of $181 million of 5.2% secured debt with a weighted average term to maturity of 8 years. The balance will be paid in cash to be generated from several sources including our existing $500 million credit facility, sale of communities under contract and in the future, as well as potentially issuing equity or other securities. EARNINGS GUIDANCE The Company believes that financial results for 2004 and 2005 will be affected by international, national and regional economic trends and events, the acquisition and/or disposition of apartment communities and other factors. Given current expectations and judgment, the Company is confirming its guidance for 2004 FFO FFO See: Funds from operations at a range of $1.52 to $1.56 per share (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ). Management estimates that recurring capital expenditures for 2004 will be $490 per apartment home, or $0.26 per diluted share. The Company's guidance for 2005 FFO will be discussed in more detail on our Third Quarter 2004 Earnings Call on October 26th. Detailed assumptions for the Company's guidance can be found on our website at www.udrt.com. CONFERENCE CALL INFORMATION A conference call has been scheduled to discuss these transactions in more detail. In addition, the Company will announce a date and time for a property tour. If you are interested in attending the property tour, please contact Monique Elwell, Vice President -- Investor Relations Investor relations The process by which the corporation communicates with its investors. at 720-283-6135 or MElwell@udrt.com. For photos and maps of the acquisitions mentioned in this release, we refer you to: www.udrt.com/resources/files/Investor_Relations/3QAD QAD Quality Assurance Division QAD Quality Assurance Department QAD Quick And Dirty QAD Quality Audit Division QAD Quick Attach/Detach QAD Question Answer Detail (language arts education) QAD Quality Application Development .pdf Date: September 7, 2004 Time: 1:00 pm Eastern Time To Participate in the Conference Call: Dial in at least five minutes prior to start time. Domestic: 800-218-0204 International: 800-262-2131 If you have any questions, please contact: Karen Droba Phone: 312-640-6770 E-mail: kdroba@financialrelationsboard.com Conference Call Playback Domestic: 800-405-2236 International: 303-590-3000 Passcode: 11007401 The playback can be accessed until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 14, 2004 at midnight EST EST electroshock therapy. EST abbr. electroshock therapy . Webcast The conference call will also be available on UDR's website at www.udrt.com and at www.fulldisclosure.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 will also be available for 90 days on UDR's website and also on CCBN's website. About United Dominion Realty Trust, Inc. United Dominion is the fourth largest apartment REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). , owning and operating apartment communities nationwide. The Company has a 32-year history during which it has raised the dividend each of the last 28 years. United Dominion is included in the S&P MidCap mid·cap adj. 1. Or or relating to corporations whose retained earnings and outstanding shares of common stock have a value between those of small cap companies and large cap corporations. 2. 400 Index. The Company currently owns 76,178 apartment homes and has 1,311 homes currently under development. Additional information about United Dominion may be found on its Web site at www.udrt.com. Statements contained in this press release, which are not historical facts, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , as the term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 apartment demand or supply in the Company's markets and the effect on occupancy and rental rates; changing economic conditions; changes in household growth or population; the impact of competition and competitive pricing; acquisitions or new developments may not achieve anticipated results; delays in completing developments and lease-ups on schedule; difficulties in selling existing apartment communities on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms or the timing and closing of planned dispositions under agreement; the shortage of available acquisition candidates; the imposition of federal taxes if we fail to qualify as a REIT in any taxable year Taxable year The 12-month period an individual uses to report income for income tax purposes. For most individuals, their tax year is the calendar year. ; failure to generate sufficient revenue, which could create refinancing risk In banking and finance, refinancing risk is the possibility that a borrower cannot refinance by borrowing to repay existing debt. Many types of commercial lending incorporate bullet payments at the point of final maturity; often, the intention or assumption is that the borrower and impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. debt service payments and shareholder distributions; increases in property and liability insurance costs; risks arising from environmental issues or natural disasters; effects of the Company's accounting or other policies 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and the Company's Quarterly Reports on Form 10-Q Form 10-Q See 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, and 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. EXHIBIT A SUMMARY OF ACQUISITIONS The Essex Apartment Value Fund ("Fund I") Portfolio Acquisition United Dominion Realty, L.P. ("UDR") has entered into an agreement to acquire a portfolio of 16 garden-style communities ("The Essex Portfolio"), with 4,646 existing homes, located in California and Oregon, from Fund I for $756 million. In connection with this transaction, UDR has paid a $10 million earnest money A sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract. Normally such earnest money is applied against the purchase price. deposit to the Fund I, which is refundable only under certain circumstances (Fund I is affiliate of Essex Property Trust (NYSE-ESS)). The purchase price represents a capitalization rate of 5.5% based on forward twelve months of operations, occupancy of 95% (versus current occupancy between 96% and 97%) and a $435 per home reserve for recurring capital expenditures. The transaction is subject to various conditions, including completion of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. and has a staggered closing with the majority of the assets expected to close in the second half of 2004. Those closings are expected to exclude two assets -- River Terrace, a 250-unit newly developed community in Santa Clara, California Santa Clara, California (IPA: /ˌsæntəˈklærə/) , founded in 1777 and incorporated in 1852, is a city in Santa Clara County, in the U.S. state of California. currently in lease up, and Coronado at Newport-South, a 732-unit community in Newport Beach, California Newport Harbor redirects here. For the MTV reality series, see . Newport Beach, incorporated in 1906, is a city in Orange County, California, 10 miles south of downtown Santa Ana. that is currently being redeveloped and has an anticipated completion in the second quarter of 2005. The Company will continue the $33.0 million of extensive renovations started by Fund I by investing an additional $13.3 million over the next two years. Other Acquisitions In addition to the Essex Portfolio acquisition the Company has acquired or is under contract to acquire five communities outlined below. Lakeline Villas: The two-year old community is located in the Austin suburb of Cedar Park, Texas Cedar Park is a city in Williamson County, Texas, United States. A small portion of the city also sits in Travis County, Texas. From a population of 5,161 in 1990, Cedar Park grew to a population of 26,049 at the 2000 census. , and within one mile of Red Stone Ranch, an existing United Dominion community. The purchase price was $18.25 million at a capitalization rate of 6.0% based on forward twelve months of operations and a recurring $270 per home reserve for capital expenditures. The purchase price on a per home basis was $59,061, which is significantly below current replacement costs. The community is 93% occupied with average monthly rents of $809 per apartment home. This acquisition brings the total number of the Company's communities in the Austin metropolitan area to five, representing 1,734 homes. Charlotte Portfolio: The Company has acquired Norcroft and Crossing, two communities in Charlotte, North Carolina “Charlotte” redirects here. For other uses, see Charlotte (disambiguation). Charlotte is the largest city in the state of North Carolina and the 20th largest city in the United States. for $21.7 million at a capitalization rate of 6.6% based on forward twelve months of operations and a recurring $450 per home reserve for capital expenditures. The addition of these two communities adds 344 homes to the Company's existing 2,034 homes in Charlotte. Norcroft is across the street from Dominion Harris Pond, an existing United Dominion community. The Company is in the processing of repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. its assets in this market as it sold three communities in second quarter and anticipates a near-term disposition of a few of its older holdings. The result is an upgrade of its existing local portfolio as opposed to an expansion of its presence in that market. Crossroads Apartments: United Dominion acquired Crossroads Apartments for $15.0 million at a capitalization rate of 5.6% based on forward twelve months of operations, and a recurring $435 reserve per home for capital expenditures. The community, built in 1986, is located in the City of Concord Concord, cities, United States Concord (kŏng`kərd, kŏn`kôrd'). 1 city (1990 pop. 111,348), Contra Costa co., W central Calif.; settled c.1852, inc. 1906. within Contra Costa Contra Costa can refer to:
San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , the North Bay, Sacramento and the Silicon Valley corridor. At the time of close, the community had average rents of $1,049 and was 91% occupied. In conjunction with the acquisitions of Crossroads, the Company assumed management of two additional properties in southern California: Waterstone in Murrieta and The Summit at Mission Bay in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. . These two communities are under contract with non-refundable earnest money. The Company intends to acquire these communities for $45.5 million and $40.0 million, respectively. Closing is expected to occur in November of 2004. Both communities are located in high growth areas where home affordability is low. SUMMARY OF DISPOSITIONS The Company has sold or is under contract to sell $174 million of communities with 3,515 homes (averaging $49,417 per home) at a blended capitalization rate of 7.5% based on trailing twelve months In commerce, the trailing twelve months (TTM) is a moving measurement (for example, an average or a sum) over the 12 previous months, using the most recent data available. Also sometimes known as last twelve months (LTM). NOI less a capital expense reserve of $470 per home and a management fee. Campus Commons: The Company sold this student community for $16.5 million, or $49,401 per home, in July. The sale price represents an 8.1% capitalization rate based on trailing twelve months NOI less a capital expenditure reserve of $470 per home and an implied 3% management fee. At the time of the sale, the community was 72% occupied with average monthly rents of $716. The Company is under contract to sell ten communities in Detroit, Michigan “Detroit” redirects here. For other uses, see Detroit (disambiguation). Detroit (IPA: [dɪˈtʰɹɔɪt]) (French: Détroit, meaning strait ; Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. and Louisville, Kentucky  “Louisville” redirects here. For other uses, see Louisville (disambiguation). , for $157 million at a blended capitalization rate of 7.4% based on trailing twelve months NOI less recurring capital expenditures and management fees. Those communities have average rents ranging from $562 to $811. The closing of these transactions are subject to various conditions, including the completion of due diligence. ACQUISITIONS
Number Average
of Rent per Cap
Essex Portfolio Location Homes Home(a) Rate
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River Terrace Santa Clara $2,025
250 (projected)
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Northern
California 250
Ocean Villas Oxnard 119 $1,289
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The Crest at Phillips Ranch Pomona 501 1,387
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Rosebeach La Mirada 174 1,279
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The Villas at San Dimas Canyon San Dimas 156 1,256
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The Villas at Bonita San Dimas 102 1,275
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Coronado North Newport
Beach 732 1,147
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Coronado South Newport
Beach 715 1,196
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Foxborough Orange 90 1,500
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Huntington Villas Huntington
Beach 400 1,284
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The Arboretum at Lake Forest Lake Forest 225 1,363
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Villa Venetia Costa Mesa 468 1,406
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Vista Del Rey Tustin 116 1,133
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The Villas at Carlsbad Carlsbad 102 1,320
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So. Calif. 3,900
Andover Park Beaverton 240 $785
The Hunt Club Lake Oswego 256 685
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Oregon 496
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Subtotal Essex Portfolio 4,646 $1,257 5.5%
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Other Acquisitions
Average
Number Rent
of per Cap
Community Location Homes Home(a) Rate
----------------------------------------------------------------------
Lakeline Villas Austin, TX 309 $819 6.0%
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Crossings & Norcroft Charlotte,
NC 344 825 6.6%
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Crossroads Concord,
CA 130 1,071 5.6%
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Summit at Mission Bay San Diego,
CA 323 921 5.5%
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Waterstone Murrieta,
CA 420 911 5.4%
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Total for other Acquisitions 1,526 $986 6.1%
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Grand Total 6,172 $1,186 5.7%
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(a) Average rent per home is average asking rent.
DISPOSITIONS
Number Average
of Rent per Cap
Community Location Homes Home(b) Rate
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Campus Commons Pullman, WA 334 $716 8.1%
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Terracina Phoenix, AZ 856 476 -
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Jamestown at St. Matthews Louisville,
KY 355 740 -
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Michigan Communities Detroit, MI 1,970 668 -
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Blended
Total 3,515 $633 7.5%
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(b) Revenue divided by number of homes
Schedule of Closing Dates
Acquisitions Dispositions
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Q3 2004 $319 MM $59 MM
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Q4 2004 409 115
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Q1 2005 --- ---
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Q2 2005 106 ---
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Q3 2005 63 ---
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