Forward-Looking Statements



This Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements include, without
limitation, statements concerning property acquisitions and dispositions,
development activity and capital expenditures, capital raising activities, rent
growth, occupancy, rental expense growth and expected or potential impacts of
the novel coronavirus disease ("COVID-19") pandemic. Words such as "expects,"
"anticipates," "intends," "plans," "likely," "will," "believes," "seeks,"
"estimates," and variations of such words and similar expressions are intended
to identify such forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from the results
of operations or plans expressed or implied by such forward-looking statements.
Such factors include, among other things, the impact of the COVID-19 pandemic
and measures intended to prevent its spread or address its effects, unfavorable
changes in the apartment market, changing economic conditions, the impact of
inflation/deflation on rental rates and property operating expenses,
expectations concerning the availability of capital and the stability of the
capital markets, the impact of competition and competitive pricing,
acquisitions, developments and redevelopments not achieving anticipated results,
delays in completing developments and redevelopments, delays in completing
lease-ups on schedule or at expected rent and occupancy levels, expectations on
job growth, home affordability and demand/supply ratio for multifamily housing,
expectations concerning development and redevelopment activities, expectations
on occupancy levels and rental rates, expectations concerning joint ventures and
partnerships with third parties, expectations that automation will help grow net
operating income, and expectations on annualized net operating income.

The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:

? the impact of the COVID-19 pandemic and measures intended to prevent its spread

or address its effects;

? general economic conditions;

unfavorable changes in apartment market and economic conditions that could

? adversely affect occupancy levels and rental rates, including as a result of

COVID-19;

? the failure of acquisitions to achieve anticipated results;

? possible difficulty in selling apartment communities;

? competitive factors that may limit our ability to lease apartment homes or

increase or maintain rents;

? insufficient cash flow that could affect our debt financing and create

refinancing risk;

? failure to generate sufficient revenue, which could impair our debt service

payments and distributions to stockholders;

? development and construction risks that may impact our profitability;

? potential damage from natural disasters, including hurricanes and other

weather-related events, which could result in substantial costs to us;

? risks from climate change that impacts our properties or operations;

? risks from extraordinary losses for which we may not have insurance or adequate

reserves;

risks from cybersecurity breaches of our information technology systems and the

? information technology systems of our third party vendors and other third

parties;

? uninsured losses due to insurance deductibles, self-insurance retention,

uninsured claims or casualties, or losses in excess of applicable coverage;

? delays in completing developments and lease-ups on schedule;

? our failure to succeed in new markets;

risks that third parties who have an interest in or are otherwise involved in

? projects in which we have an interest, including mezzanine borrowers, joint

venture partners or other investors, do not perform as expected;




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? changing interest rates, which could increase interest costs and affect the

market price of our securities;

? potential liability for environmental contamination, which could result in

substantial costs to us;

? the imposition of federal taxes if we fail to qualify as a REIT under the Code

in any taxable year;

our internal control over financial reporting may not be considered effective

? which could result in a loss of investor confidence in our financial reports,

and in turn have an adverse effect on our stock price; and

? changes in real estate laws, tax laws, rent control or stabilization laws or

other laws affecting our business.




A discussion of these and other factors affecting our business and prospects is
set forth in Part II, Item 1A. Risk Factors. We encourage investors to review
these risk factors.

Although we believe that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions could be
inaccurate, and therefore such statements included in this Report may not prove
to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by us or any other person that the
results or conditions described in such statements or our objectives and plans
will be achieved.

Forward-looking statements and such risks, uncertainties and other factors speak
only as of the date of this Report, and we expressly disclaim any obligation or
undertaking to update or revise any forward-looking statement contained herein,
to reflect any change in our expectations with regard thereto, or any other
change in events, conditions or circumstances on which any such statement is
based, except to the extent otherwise required by law.

COVID-19 Update



On March 11, 2020, the World Health Organization declared COVID-19 a pandemic,
and on March 13, 2020, the United States declared a national emergency with
respect to COVID-19. The pandemic has led governments and other authorities
around the world, including federal, state and local authorities in the United
States, to impose measures intended to control its spread, including
restrictions on freedom of movement and business operations such as travel bans,
border closings, business closures, quarantines and shelter-in-place or similar
orders.

While operations in certain areas have been allowed to fully or partially
re-open, many areas are experiencing new closures subsequent to re-opening and
no assurance can be given that such closures will not continue to occur. Our
headquarters and all of our properties and our corporate offices are located in
areas that are or have been subject to shelter-in-place orders and restrictions
on the types of businesses that may continue to operate. These orders and
restrictions and other impacts of the COVID-19 pandemic have adversely affected,
and could continue to adversely affect, the ability of our residents and retail
and commercial tenants to pay their rent. It is still uncertain how various
programs adopted by the federal government and state and local governments have
impacted, and may continue to impact, the ability of our residents and retail
and commercial tenants to pay their rent. The governmental actions intended to
prevent the spread of COVID-19 have also caused us to reduce staffing at certain
of our locations, and have impacted, and may continue to impact, our ability to
conduct our business in the ordinary course. Further, a number of the
jurisdictions in which we operate have adopted, and may extend, eviction
moratoriums, either directly or indirectly (such as through direction to law
enforcement or courts not to serve notices or take actions related to eviction),
which have negatively impacted, and may continue to negatively impact, our
ability to remove residents or retail and commercial tenants who are not paying
their rent and our ability to rent their units or other space to new residents
or retail and commercial tenants, respectively. In addition, certain
jurisdictions have restricted our ability to charge certain fees, including fees
for late payment of rent. We have received, and continue to receive, more
requests from our residents and retail and commercial tenants for assistance
with respect to paying rent than we have historically received. In response, we
have instituted a number of initiatives to assist residents and other tenants,
including rent deferrals, payment plans, and waiving late payment fees when
appropriate. We also have experienced a decrease in resident move-outs and
turnover on an annualized basis. With respect to leasing activities, while
inquiries from potential residents have decreased, our percentage of leases
entered into with a prospective tenant has increased.

During the three months ended June 30, 2020, the Company performed an analysis
in accordance with the ASC 842, Leases, guidance to assess the collectibility of
its operating lease receivables in light of the COVID-19 pandemic. This analysis
included an assessment of collectibility of current and future rents and whether
those lease payments were no longer probable of collection. In accordance with
the leases guidance, if lease payments are no longer deemed to be probable

over
the life of the

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lease contract, we recognize revenue only when cash is received, and all existing contractual operating lease receivables and straight-line lease receivables are reserved.





As a result of its analysis, the Company reserved approximately $5.5 million of
multifamily tenant lease receivables and approximately $3.5 million of retail
tenant lease receivables (inclusive of $2.9 million of reserves on straight-line
lease receivables) for its wholly-owned communities and communities held by
joint ventures. In aggregate, the reserve is reflected as an $8.5 million
reduction to Rental income and a $0.5 million reduction to Income/(loss) from
unconsolidated entities on the Consolidated Statements of Operations for the
three months ended June 30, 2020. The impact to deferred leasing commissions was
not material.


The Company did not recognize any other adjustments to the carrying amounts of assets or asset impairment charges due to the COVID-19 pandemic for the six months ended June 30, 2020



As of July 24, 2020, we had collected 98.6%, 97.6% and 96.2% of billed monthly
rents for our multifamily residents for April, May and June, respectively. July
cash rents received are consistent with those for April, May and June at
corresponding times of prior months.



Over the last several years, we have worked to consistently strengthen our
balance sheet and improve our liquidity profile, which we believe positions us
well to weather the current economic and market challenges. The extent of the
COVID-19 pandemic's effect on our operational and financial performance,
however, will depend on future developments, including the duration, spread and
intensity of the pandemic and the duration of government measures to mitigate
the pandemic, all of which are uncertain and difficult to predict. Given this
uncertainty, we cannot predict the effect on future periods, but the adverse
impact on our future financial condition, results of operations, and cash flows
could be material.



The following discussion should be read in conjunction with the consolidated
financial statements appearing elsewhere herein and is based primarily on the
consolidated financial statements for the three and six months ended
June 30, 2020 and 2019, of each of UDR, Inc. and United Domination Realty,

L.P.

UDR, Inc.:

Business Overview

We are a self-administered real estate investment trust, or REIT, that owns,
operates, acquires, renovates, develops, redevelops, disposes of, and manages
multifamily apartment communities. We were formed in 1972 as a Virginia
corporation. In June 2003, we changed our state of incorporation from Virginia
to Maryland. Our subsidiaries include the Operating Partnership and the DownREIT
Partnership. Unless the context otherwise requires, all references in this
Report to "we," "us," "our," "the Company," or "UDR" refer collectively to
UDR, Inc., its subsidiaries and its consolidated joint ventures.

At June 30, 2020, our consolidated real estate portfolio included 148
communities in 13 states plus the District of Columbia totaling 47,371 apartment
homes. In addition, we have an ownership interest in 5,134 completed or
to-be-completed apartment homes through unconsolidated joint ventures or
partnerships, including 2,004 apartment homes owned by entities in which we hold
preferred equity investments. The Same-Store Community apartment home population
for the three and six months ended June 30, 2020, was 39,020 and 37,910,
respectively.

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The following table summarizes our market information by major geographic markets as of and for the three and six months ended June 30, 2020:




                                                                                            Three Months Ended               Six Months Ended
                                                         June 30, 2020                        June 30, 2020                    June 30, 2020
                                                        Percentage        Total                          Monthly                         Monthly
                               Number of    Number of   of Total        Carrying       Average         Income per       Average        Income per
                               Apartment    Apartment    Carrying       Value (in     Physical          Occupied       Physical          Occupied
Same-Store Communities        Communities     Homes       Value        thousands)     Occupancy         Home (a)       Occupancy         Home (a)
West Region
Orange County, CA                      11       4,820          9.9 %  $   1,257,424        96.0 %    $         2,330        96.6 %    $        2,357
San Francisco, CA                      11       2,751          6.9 %        880,914        92.9 %              3,646        94.7 %             3,700
Seattle, WA                            14       2,725          7.4 %        946,127        96.6 %              2,463        97.1 %             2,522
Los Angeles, CA                         4       1,225          3.6 %        459,917        95.8 %              2,793        96.4 %             2,867
Monterey Peninsula, CA                  7       1,565          1.4 %        183,797        96.8 %              1,918        96.3 %             1,936
Other Southern California               2         654          0.9 %        110,416        96.8 %              2,026        96.9 %             2,036
Portland, OR                            2         476          0.4 %         51,330        97.3 %              1,624        97.1 %             1,633
Mid-Atlantic Region
Metropolitan D.C.                      21       7,799         16.1 %      2,056,263        96.9 %              2,075        97.2 %             2,100
Richmond, VA                            4       1,358          1.2 %        152,583        97.4 %              1,414        97.3 %             1,411
Baltimore, MD                           3         720          1.2 %        154,828        98.1 %              1,700        97.7 %             1,713
Northeast Region
Boston, MA                              4       1,388          3.7 %        467,644        94.7 %              2,772        95.3 %             2,865
New York, NY                            4       1,640          9.1 %      1,167,474        92.6 %              4,291        95.3 %             4,490
Southeast Region
Orlando, FL                             9       2,500          1.9 %        236,598        97.2 %              1,398        96.6 %             1,408
Tampa, FL                               8       2,668          2.9 %        366,493        96.8 %              1,513        96.8 %             1,470
Nashville, TN                           8       2,260          1.7 %        222,058        97.9 %              1,362        97.8 %             1,361
Other Florida                           1         636          0.7 %         88,108        97.5 %              1,604        96.9 %             1,632
Southwest Region
Dallas, TX                              7       2,345          2.3 %        292,031        97.5 %              1,364        97.5 %             1,377
Austin, TX                              4       1,272          1.3 %        169,019        97.8 %              1,522        97.7 %             1,536
Denver, CO                              1         218          1.1 %        144,751        92.9 %              3,079        92.6 %             3,112
Total/Average Same-Store
Communities                           125      39,020         73.7 %      9,407,775        96.3 %    $         2,247        96.7 %    $        2,174
Non-Mature, Commercial
Properties & Other                     23       8,292         25.3 %      3,236,076
Total Real Estate Held for
Investment                            148      47,312         99.0 %     12,643,851
Real Estate Under
Development (b)                         -          59          1.0 %        131,788
Total Real Estate Owned               148      47,371        100.0 %     12,775,639
Total Accumulated
Depreciation                                                            (4,372,524)
Total Real Estate Owned,
Net of Accumulated
Depreciation                                                          $   8,403,115

Monthly Income per Occupied Home represents total monthly revenues divided by (a) the average physical number of occupied apartment homes in our Same-Store

portfolio.

As of June 30, 2020, the Company was developing three wholly-owned (b) communities with a total of 878 apartment homes, 59 of which have been

completed.

We report in two segments: Same-Store Communities and Non-Mature Communities/Other.



Our Same-Store Communities segment represents those communities acquired,
developed, and stabilized prior to April 1, 2019 (for quarter-to-date
comparison) and January 1, 2019 (for year-to-date comparison) and held as of
June 30, 2020. 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 communities are 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.

Our Non-Mature Communities/Other segment represents 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.

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Liquidity and Capital Resources



Liquidity is the ability to meet present and future financial obligations either
through operating cash flows, sales of properties, borrowings under our credit
agreements, and/or the issuance of debt and/or equity securities. Our primary
source of liquidity is our cash flow from operations, as determined by rental
rates, occupancy levels, and operating expenses related to our portfolio of
apartment homes, and borrowings under our credit agreements. We routinely use
our working capital credit facility, our unsecured revolving credit facility and
issuances of commercial paper to temporarily fund certain investing and
financing activities prior to arranging for longer-term financing or the
issuance of equity or debt securities. During the past several years, proceeds
from the sale of real estate have been used for both investing and financing
activities as we continue to execute on maintaining a diversified portfolio.

We expect to meet our short-term liquidity requirements generally through net
cash provided by property operations and borrowings under our credit agreements
and our unsecured commercial paper program. We expect to meet certain long-term
liquidity requirements such as scheduled debt maturities, the repayment of
financing on development activities, and potential property acquisitions,
through net cash provided by property operations, secured and unsecured
borrowings, the issuance of debt or equity securities, and/or the disposition of
properties. We believe that our net cash provided by property operations and
borrowings under our credit agreements and our unsecured commercial paper
program will continue to be adequate to meet both operating requirements and the
payment of dividends by the Company in accordance with REIT requirements.
Likewise, the budgeted expenditures for improvements and renovations of certain
properties are expected to be funded from property operations, borrowings under
credit agreements, the issuance of debt or equity securities, and/or
dispositions of properties.

We have a shelf registration statement filed with the Securities and Exchange
Commission, or "SEC," which provides for the issuance of common stock, preferred
stock, depositary shares, debt securities, guarantees of debt securities,
warrants, subscription rights, purchase contracts and units to facilitate future
financing activities in the public capital markets. Access to capital markets is
dependent on market conditions at the time of issuance.

In July 2017, the Company entered into an ATM sales agreement under which the
Company may offer and sell up to 20.0 million shares of its common stock, from
time to time, to or through its sales agents and may enter into separate forward
sales agreements to or through its forward purchasers. Upon entering into the
ATM sales agreement, the Company simultaneously terminated the sales agreement
for its prior at-the-market equity offering program, which was entered into in
April 2017, which replaced the prior at-the-market equity offering program
entered into in April 2012. During the six months ended June 30, 2020, the
Company did not sell any shares of common stock through its ATM program. As of
June 30, 2020, we had 11.7 million shares of common stock available for future
issuance under the ATM program, including an aggregate of 2.1 million shares
subject to the forward sales agreements described below.

During the six months ended June 30, 2020, the Company entered into forward
sales agreements under its ATM program for a total of 2.1 million shares of
common stock at a weighted average initial forward price per share of $49.56.
The initial forward price per share to be received by the Company upon
settlement will be determined on the applicable settlement date based on
adjustments made to the initial forward price to reflect the then-current
federal funds rate and the amount of dividends paid to holders of UDR common
stock over the term of the forward sales agreement. As of June 30, 2020, no
shares under the forward sales agreement have been settled. The final date by
which shares sold under the forward sales agreements must be settled range
between February 12, 2021 and March 3, 2021. See Note 8, Income/(Loss) per
Share, in the Notes to the UDR Consolidated Financial Statements included in
this Report for additional discussion of forward sales agreements.



In February 2020, the Company issued $200.0 million of 3.20% senior unsecured
medium-term notes due 2030. Interest is payable semi-annually in arrears on
January 15 and July 15 of each year, beginning on July 15, 2020. The notes were
priced at 105.660% of the principal amount at issuance. This was a further
issuance of the 2030 notes, and form a single series with, the $300.0 million
aggregate principal amount of the Company's 3.20% notes due 2030 that were
issued in July 2019 and the $100.0 million aggregate principal amount of the
Company's 3.20% notes due 2030 that were issued in October 2019. As of the
completion of the offering, the aggregate principal amount of outstanding 2030
notes was $600.0 million.

On July 14, 2020, the Company announced that it commenced a cash tender offer
for any and all of its outstanding 3.75% unsecured medium-term notes due July
2024 (the "2024 Notes"). Pursuant to the tender offer, on July 21, 2020, the
Company completed the purchase of $116.9 million aggregate principal amount of
the 2024 Notes, or 39.0% of the $300.0 million aggregate principal amount of the
2024 Notes. The tender offer consideration was $1,101.92 for each $1,000
principal amount of the 2024 Notes, plus accrued and unpaid interest to, but not
including, July 21, 2020.

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On July 21, 2020, the Company issued $400.0 million of 2.10% senior unsecured
medium-term notes due August 1, 2032. Interest is payable semi-annually in
arrears on February 1 and August 1. The notes were priced at 99.894% of the
principal amount at issuance. The Company used or will use a portion of the net
proceeds to fund the purchase of the 2024 Notes accepted pursuant to the tender
offer described above and to prepay $245.8 million of 4.64% secured debt due in
2023. The combined prepayment and make-whole amounts for the purchase of the
2024 Notes and the prepayment of the secured debt due in 2023, inclusive of the
acceleration of fair market value adjustments originally recorded on secured
debt assumed in property acquisitions, totaled approximately $24.0 million.

Future Capital Needs



Future development and redevelopment expenditures may be funded through
unsecured or secured credit facilities, unsecured commercial paper, proceeds
from the issuance of equity or debt securities, sales of properties, joint
ventures, and, to a lesser extent, from cash flows provided by property
operations. Acquisition activity in strategic markets may be funded through
joint ventures, by the reinvestment of proceeds from the sale of properties,
through the issuance of equity or debt securities, the issuance of operating
partnership units and the assumption or placement of secured and/or unsecured
debt.

During the remainder of 2020, we have approximately $83.8 million of secured
debt maturing, inclusive of principal amortization, and $185.0 million of
unsecured debt maturing, comprised solely of unsecured commercial paper. We
anticipate repaying the remaining debt with cash flow from our operations,
proceeds from debt or equity offerings, proceeds from dispositions of
properties, or from borrowings under our credit agreements and our unsecured
commercial paper program.

In June 2020, the Company executed a rate lock agreement to refinance a 4.35%
fixed rate mortgage note payable due in November 2020 with a balance of $79.5
million at June 30, 2020 with a $160.9 million, 2.62% fixed rate mortgage note
payable due in 2031. The Company expects to close on the refinancing transaction
during the third quarter of 2020. The incremental proceeds are anticipated to be
used to reduce the Company's borrowings under its unsecured commercial paper
program.



In July 2020, the entire $185.0 million of outstanding unsecured commercial
paper as of June 30, 2020 was repaid at maturity with additional proceeds of
unsecured commercial paper with maturity dates in July and August 2020. As of
July 27, 2020, we had no borrowings outstanding under the Revolving Credit
Facility, leaving $1.1 billion of unused capacity (excluding $2.9 million of
letters of credit), and we had $17.2 million outstanding under the Working
Capital Credit Facility, leaving $57.8 million of unused capacity.



Critical Accounting Policies and Estimates and New Accounting Pronouncements



Our critical accounting policies are those having the most impact on the
reporting of our financial condition and results and those requiring significant
judgments and estimates. These policies include those related to (1) capital
expenditures, (2) impairment of long-lived assets, (3) real estate investment
properties, and (4) revenue recognition.

Our critical accounting policies are described in more detail in the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in UDR's Annual Report on Form 10-K, filed with the SEC
on February 18, 2020. There have been no significant changes in our critical
accounting policies from those reported in our Form 10-K filed with the SEC on
February 18, 2020. With respect to these critical accounting policies, we
believe that the application of judgments and assessments is consistently
applied and produces financial information that fairly depicts the results of
operations for all periods presented.

Statements of Cash Flows


The following discussion explains the changes in Net cash provided by/(used in)
operating activities, Net cash provided by/(used in) investing activities, and
Net cash provided by/(used in) financing activities that are presented in our
Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and
2019.

Operating Activities

For the six months ended June 30, 2020, our Net cash provided by/(used in)
operating activities was $317.0 million, compared to $286.4 million for the
comparable period in 2019. The increase in cash flow from operating activities
was primarily due to improved net operating income, primarily driven by revenue
growth at communities and net operating income from communities acquired in 2020
and 2019, and by changes in operating assets and liabilities.

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Investing Activities

For the six months ended June 30, 2020, Net cash provided by/(used in) investing
activities was $(161.9) million, compared to $(806.0) million for the comparable
period in 2019. The decrease in cash used in investing activities was primarily
due to the decrease in acquisitions made during the current period, an increase
in proceeds from sales of real estate investments and a decrease in investments
in unconsolidated joint ventures, partially offset by an increase in spend for
development of real estate assets and a decrease in distributions received from
unconsolidated joint ventures.

Acquisitions



In January 2020, the Company acquired a 294 apartment home operating community
located in Tampa, Florida for approximately $85.2 million. The Company increased
its real estate assets owned by approximately $83.1 million and recorded
approximately $2.1 million of in-place lease intangibles.

In January 2020, the Company increased its ownership interest from 49% to 100%
in a 276 apartment home operating community located in Hillsboro, Oregon, for a
cash purchase price of approximately $21.6 million. In connection with the
acquisition, the Company repaid approximately $35.6 million of joint venture
construction financing. As a result, the Company consolidated the operating
community. The Company had previously accounted for its 49% ownership interest
as a preferred equity investment in an unconsolidated joint venture (see Note
5, Joint Ventures and Partnerships). The Company accounted for the consolidation
as an asset acquisition resulting in no gain or loss upon consolidation and
increased its real estate assets owned by approximately $67.8 million and
recorded approximately $1.7 million of in-place lease intangibles.



Dispositions



In May 2020, the Company sold an operating community located in Bellevue,
Washington with a total of 71 apartment homes for gross proceeds of $49.7
million, resulting in a gain of approximately $29.6 million. The sale was
partially financed by the Company through the issuance of a promissory note
totaling $4.0 million and due in February 2021. (See Note 2, Significant
Accounting Policies for further discussion.) The proceeds were designated for a
tax-deferred Section 1031 exchange that were used to pay a portion of the
purchase price for an acquisition of an operating community in Tampa, Florida,
in January 2020.

In May 2020, the Company sold an operating community located in Kirkland, Washington with a total of 196 apartment homes for gross proceeds of $92.9 million, resulting in a gain of approximately $31.7 million.

Capital Expenditures



We capitalize those expenditures that materially enhance the value of an
existing asset or substantially extend the useful life of an existing asset.
Expenditures necessary to maintain an existing property in ordinary operating
condition are expensed as incurred.

For the six months ended June 30, 2020, total capital expenditures of $65.3
million, or $1,374 per stabilized home, which in aggregate include recurring
capital expenditures and major renovations, were spent across our portfolio,
excluding development, as compared to $70.2 million, or $1,733 per stabilized
home, for the comparable period in 2019.

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The decrease in total capital expenditures was primarily due to:

a decrease of $9.7 million in spend as compared to the comparable period in

? 2019 for our operations platform, which includes smart home installations in


   certain of our properties;


partially offset by:

an increase of 19.2%, or $3.4 million, in major renovations, which include

? major structural changes and/or architectural revisions to existing buildings;

and

? an increase of 8.7%, or $1.7 million, in recurring capital expenditures, which

include asset preservation and turnover related expenditures.




The following table outlines capital expenditures and repair and maintenance
costs for all of our communities, excluding real estate under development, for
the six months ended June 30, 2020 and 2019 (dollars in thousands):


                                                                                        Per Home
                                           Six Months Ended June 30,           Six Months Ended June 30,
                                          2020        2019      % Change      2020        2019      % Change

Turnover capital expenditures           $  5,330    $  4,789        11.3 %  $     112    $   118       (5.1) %
Asset preservation expenditures           16,383      15,179         7.9 %        345        375       (8.0) %
Total recurring capital expenditures      21,713      19,968         8.7 %        457        493       (7.3) %
NOI enhancing improvements (a)            16,302      16,640       (2.0) % 

      343        411      (16.5) %
Major renovations (b)                     20,797      17,440        19.2 %        438        431         1.6 %
Operations platform                        6,467      16,130      (59.9) %        136        398      (65.8) %

Total capital expenditures              $ 65,279    $ 70,178       (7.0) %  $   1,374    $ 1,733      (20.7) %
Repair and maintenance expense          $ 26,475    $ 19,396        36.5 %  $     557    $   479        16.3 %
Average home count (c)                    47,490      40,509        17.2 %

(a) NOI enhancing improvements are expenditures that result in increased income

generation or decreased expense growth.

(b) Major renovations include major structural changes and/or architectural

revisions to existing buildings.

(c) Average number of homes is calculated based on the number of homes

outstanding at the end of each month.

The above table includes amounts capitalized during the year. Cash paid for capital expenditures is impacted by the net change in related accruals.


We intend to continue to selectively add NOI enhancing improvements, which we
believe will provide a return on investment in excess of our cost of capital.
Our objective in redeveloping a community is twofold: we aim to meaningfully
grow rental rates while also achieving cap rate compression through asset
quality improvement.

Consolidated Real Estate Under Development and Redevelopment


At June 30, 2020, our development pipeline consisted of three wholly-owned
communities totaling 878 apartment homes, 59 of which have been completed, with
a budget of $278.5 million, in which we have a gross carrying value of $131.8
million. The remaining homes are estimated to be completed between the first
quarter of 2021 and the second quarter of 2022.

At June 30, 2020, the Company was redeveloping two communities, located in New
York, New York and Boston, Massachusetts, which are expected to be completed in
the third quarter of 2020 and the second quarter of 2021, respectively. The
redevelopments include the renovation of building exteriors, corridors, and
common area amenities as well as individual apartment homes.

During the six months ended June 30, 2020, we incurred $20.8 million in major
renovations, which include major structural changes and/or architectural
revisions to existing buildings, an increase of $3.4 million compared to the six
months ended June 30, 2019.

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Unconsolidated Joint Ventures and Partnerships



The Company recognizes income or losses from our investments in unconsolidated
joint ventures and partnerships consisting of our proportionate share of the net
income or losses of the joint ventures and partnerships. In addition, we may
earn fees for providing management services to the communities held by the
unconsolidated joint ventures and partnerships.

The Company's Investment in and advances to unconsolidated joint ventures and
partnerships, net, are accounted for under the equity method of accounting. For
the six months ended June 30, 2020:

we made investments totaling $20.0 million in our unconsolidated joint

? ventures, including contributions of $17.8 million to three unconsolidated

investments under our Developer Capital Program, which earn preferred returns

ranging from 8.5% to 9.0%;

? our proportionate share of the net income/(loss) of the joint ventures and

partnerships was $11.4 million; and

? we received distributions of $7.7 million, of which $2.0 million were operating

cash flows and $5.7 million were investing cash flows.




We evaluate our investments in unconsolidated joint ventures and partnerships
when events or changes in circumstances indicate that there may be an
other-than-temporary decline in value. We consider various factors to determine
if a decrease in the value of the investment is other-than-temporary. The
Company did not recognize any other-than-temporary impairments in the value of
its investments in unconsolidated joint ventures or partnerships during the six
months ended June 30, 2020 and 2019.

Financing Activities

For the six months ended June 30, 2020, our Net cash provided by/(used in) financing activities was $(165.5) million, compared to $334.7 million for the comparable period of 2019.

The following significant financing activities occurred during the six months ended June 30, 2020:

? issued $200.0 million of 3.20% senior unsecured medium-term notes due January

15, 2030, for net proceeds of approximately $211.3 million;

? net repayment of $115.0 million on our unsecured commercial paper program;

? repayment of $31.6 million of secured debt; and

? payment of $207.1 million of distributions to our common stockholders.

Credit Facilities and Commercial Paper Program

UDR had one secured credit facility with New York Life with an outstanding balance of $202.3 million at June 30, 2020. The New York Life credit facility matures in January 2023 and bears interest at a fixed rate of 4.90%.



The Company has a $1.1 billion unsecured revolving credit facility and a $350.0
million unsecured term loan. The Credit Agreement for these facilities allows
the total commitments under the Revolving Credit Facility and the total
borrowings under the Term Loan to be increased to an aggregate maximum amount of
up to $2.0 billion, subject to certain conditions, including obtaining
commitments from one or more lenders. The Revolving Credit Facility has a
scheduled maturity date of January 31, 2023, with two six-month extension
options, subject to certain conditions. The Term Loan has a scheduled maturity
date of September 30, 2023.

Based on the Company's current credit rating, the Revolving Credit Facility has
an interest rate equal to LIBOR plus a margin of 82.5 basis points and a
facility fee of 15 basis points, and the Term Loan has an interest rate equal to
LIBOR plus a margin of 90 basis points. Depending on the Company's credit
rating, the margin under the Revolving Credit Facility ranges from 75 to 145
basis points, the facility fee ranges from 10 to 30 basis points, and the margin
under the Term Loan ranges from 80 to 165 basis points.

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As of June 30, 2020, we had no outstanding borrowings under the Revolving Credit
Facility, leaving $1.1 billion of unused capacity (excluding $2.9 million of
letters of credit at June 30, 2020), and $350.0 million of outstanding
borrowings under the Term Loan.

We have a working capital credit facility, which provides for a $75 million
unsecured revolving credit facility (the "Working Capital Credit Facility") with
a previously scheduled maturity date of January 15, 2021. In July 2020, the
Company extended its working capital credit facility maturity date from January
15, 2021 to January 14, 2022. Based on the Company's current credit rating, the
Working Capital Credit Facility has an interest rate equal to LIBOR plus a
margin of 82.5 basis points. Depending on the Company's credit rating, the
margin ranges from 75 to 145 basis points.

As of June 30, 2020, we had $17.2 million of outstanding borrowings under the Working Capital Credit Facility, leaving $57.8 million of unused capacity.



The bank revolving credit facilities and the term loan are subject to customary
financial covenants and limitations, all of which we were in compliance with at
June 30, 2020.

We have an unsecured commercial paper program. Under the terms of the program,
we may issue unsecured commercial paper up to a maximum aggregate amount
outstanding of $500 million. The notes are sold under customary terms in the
United States commercial paper market and rank pari passu with all of our other
unsecured indebtedness. The notes are fully and unconditionally guaranteed by
the Operating Partnership. As of June 30, 2020, we had issued $185.0 million of
commercial paper, for one month terms, at a weighted average annualized rate of
0.45%, leaving $315.0 million of unused capacity. In July 2020, the entire
$185.0 million of outstanding unsecured commercial paper as of June 30, 2020 was
repaid at maturity with additional proceeds of unsecured commercial paper with
maturity dates in July and August 2020.

Interest Rate Risk



We are exposed to interest rate risk associated with variable rate notes payable
and maturing debt that has to be refinanced. We do not hold financial
instruments for trading or other speculative purposes, but rather issue these
financial instruments to finance our portfolio of real estate assets and
operations. Interest rate sensitivity is the relationship between changes in
market interest rates and the fair value of market rate sensitive assets and
liabilities. Our earnings are affected as changes in short-term interest rates
impact our cost of variable rate debt and maturing fixed rate debt. We had
$264.2 million in variable rate debt that is not subject to interest rate swap
contracts as of June 30, 2020. If market interest rates for variable rate debt
increased by 100 basis points, our interest expense for the six months ended
June 30, 2020 would increase by $2.1 million based on the average balance
outstanding during the period.

These amounts are determined by considering the impact of hypothetical interest
rates on our borrowing cost. This analysis does not consider the effects of the
adjusted level of overall economic activity that could exist in such an
environment. Further, in the event of a change of such magnitude, management
would likely take actions to further mitigate our exposure to the change.
However, due to the uncertainty of the specific actions that would be taken and
their possible effects, the sensitivity analysis assumes no change in our
financial structure.

The Company also utilizes derivative financial instruments to manage interest
rate risk and generally designates these financial instruments as cash flow
hedges. See Note 11, Derivatives and Hedging Activities, in the Notes to the UDR
Consolidated Financial Statements included in this Report for additional
discussion of derivative instruments.

A presentation of cash flow metrics based on GAAP is as follows (dollars in
thousands):


                                                         Six Months Ended June 30,
                                                            2020             2019

Net cash provided by/(used in) operating activities $ 317,015 $

286,421

Net cash provided by/(used in) investing activities (161,894) (805,993) Net cash provided by/(used in) financing activities (165,536)


  334,704






Results of Operations

The following discussion explains the changes in results of operations that are
presented in our Consolidated Statements of Operations for the three and six
months ended June 30, 2020 and 2019.

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Net Income/(Loss) Attributable to Common Stockholders



Net income/(loss) attributable to common stockholders was $56.7 million ($0.19
per diluted share) for the three months ended June 30, 2020, as compared to
$34.6 million ($0.12 per diluted share) for the comparable period in the
prior year. The increase resulted primarily from the following items, all of
which are discussed in further detail elsewhere within this Report:

gains of $61.3 million from the sale of two operating communities located in

Kirkland, Washington and Bellevue, Washington during the three months ended

? June 30, 2020, as compared to a gain of $5.3 million on the sale of a parcel of

land in Los Angeles, California during the three months ended June 30, 2019;

and

an increase in total property NOI of $12.5 million primarily due to NOI from

? additional operating communities, including those acquired in 2020 and 2019,

partially offset by an approximately $5.1 million reserve recorded on our

multifamily tenant lease receivables.

This was partially offset by:

an increase in depreciation expense of $37.1 million primarily due to

? communities acquired in 2020 and 2019, partially offset by a decrease from

fully depreciated assets; and

? an increase in interest expense of $4.2 million primarily due to higher average

debt balances.




Net income/(loss) attributable to common stockholders was $60.9 million ($0.21
per diluted share) for the six months ended June 30, 2020, as compared to $58.1
million ($0.21 per diluted share) for the comparable period in the prior year.
The increase resulted primarily from the following items, all of which are
discussed in further detail elsewhere within this Report:

gains of $61.3 million from the sale of two operating communities located in

? Kirkland, Washington and Bellevue, Washington during the six months ended June

30, 2020, as compared to a gain of $5.3 million on the sale of a parcel of land

in Los Angeles, California during the six months ended June 30, 2019; and

an increase in total property NOI of $48.3 million primarily due to higher

? revenue per occupied home and NOI from additional operating communities,

including those acquired in 2020 and 2019, partially offset by an approximately

$5.1 million reserve recorded on our multifamily tenant lease receivables.

This was partially offset by:

an increase in depreciation expense of $80.1 million primarily due to

? communities acquired in 2020 and 2019, partially offset by a decrease from

fully depreciated assets;

? an increase in interest expense of $10.0 million primarily due to higher

average debt balances; and

a decrease in interest income and other income/(expense), net of $6.0 million,

? primarily attributable to an $8.5 million promoted interest earned on the


   prepayment of a note to a multifamily technology company in 2019.



Apartment Community Operations


Our net income results are primarily from NOI generated from the operation of
our apartment communities. The Company defines NOI, which is a non-GAAP
financial measure, as rental income less direct property rental expenses. Rental
income represents gross market rent less adjustments for concessions, vacancy
loss and bad debt. 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 2.875%
of property revenue to cover the regional supervision and accounting costs
related to consolidated property operations and land rent.

Management considers NOI a useful metric for investors as it is a more
meaningful representation of a community's continuing operating performance than
net income as it is prior to corporate-level expense allocations, general and
administrative costs, capital structure and depreciation and amortization.

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Although the Company considers NOI a useful measure of operating performance,
NOI should not be considered an alternative to net income or net cash flow from
operating activities as determined in accordance with GAAP. NOI excludes several
income and expense categories as detailed in the reconciliation of NOI to Net
income/(loss) attributable to UDR, Inc. below.

The following table summarizes the operating performance of our total property NOI for each of the periods presented (dollars in thousands):




                                       Three Months Ended                        Six Months Ended
                                         June 30,  (a)                            June 30,  (b)
                                       2020          2019       % Change       2020           2019        % Change
Same-Store Communities:
Same-Store rental income            $  241,950    $  247,424       (2.2) %  $   478,340    $   477,169         0.2 %
Same-Store operating expense (c)      (71,418)      (68,946)         3.6 % 

  (138,471)      (134,226)         3.2 %
Same-Store NOI                         170,532       178,478       (4.5) %      339,869        342,943       (0.9) %

Non-Mature Communities/Other
NOI:
Stabilized, non-mature
communities NOI (d)                     33,762        10,640       217.3 %       79,206         27,109       192.2 %
Acquired communities NOI                 1,794             -          NM *        3,188              -          NM *
Redevelopment communities NOI            4,444         4,912       (9.5) %        9,370         10,144       (7.6) %
Development communities NOI               (65)             -          NM *        (105)              -          NM *
Non-residential/other NOI                1,230         3,496      (64.8) %        4,001          4,824      (17.1) %
Sold and held for disposition
communities NOI                            556         2,209      (74.8) %        2,189          4,398      (50.2) %
Total Non-Mature
Communities/Other NOI                   41,721        21,257        96.3 %       97,849         46,475       110.5 %
Total property NOI                  $  212,253    $  199,735         6.3 %  $   437,718    $   389,418        12.4 %


* Not meaningful

(a) Same-Store consists of 39,020 apartment homes.

(b) Same-Store consists of 37,910 apartment homes.

(c) Excludes depreciation, amortization, and property management expenses.

Represents non-mature communities that have achieved 90% occupancy for three (d) consecutive months but do not meet the criteria to be included in Same-Store


    Communities.




The following table is our reconciliation of Net income/(loss) attributable to
UDR, Inc. to total property NOI for the periods presented (dollars in
thousands):


                                                    Three Months Ended           Six Months Ended
                                                         June 30,                   June 30,
                                                     2020         2019          2020          2019

Net income/(loss) attributable to UDR, Inc.       $   57,771    $  35,619    $   62,992    $   60,122
Joint venture management and other fees              (1,274)      (2,845)  

    (2,662)       (5,596)
Property management                                    8,797        8,006        18,000        15,709
Other operating expenses                               6,100        2,735        11,066         8,381

Real estate depreciation and amortization            155,056      117,934       310,532       230,402
General and administrative                            10,971       12,338        25,949        24,805
Casualty-related charges/(recoveries), net               102          246         1,353           246
Other depreciation and amortization                    2,027        1,678         4,052         3,334
(Gain)/loss on sale of real estate owned            (61,303)      (5,282)      (61,303)       (5,282)
(Income)/loss from unconsolidated entities           (8,021)      (6,625)      (11,388)       (6,674)
Interest expense                                      38,597       34,417        77,914        67,959
Interest income and other (income)/expense,
net                                                  (2,421)      (1,310)       (5,121)      (11,123)
Tax provision/(benefit), net                           1,526          125         1,690         2,337
Net income/(loss) attributable to redeemable
noncontrolling interests in the Operating
Partnership and DownREIT Partnership                   4,291        2,652         4,604         4,709
Net income/(loss) attributable to
noncontrolling interests                                  34           47            40            89
Total property NOI                                $  212,253    $ 199,735    $  437,718    $  389,418




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Same-Store Communities

Our Same-Store Community properties, those acquired, developed, and stabilized
prior to April 1, 2019 (for the quarter-to-date comparison) and January 1, 2019
(for the year-to-date comparison) and held on June 30, 2020, consisted of 39,020
and 37,910 apartment homes and provided 80.3% and 77.6% of our total NOI for the
three and six months ended June 30, 2020, respectively.

Three Months Ended June 30, 2020 vs. Three Months Ended June 30, 2019



NOI for our Same-Store Community properties decreased 4.5%, or $7.9 million, for
the three months ended June 30, 2020 compared to the same period in 2019. The
decrease in property NOI was attributable to a 2.2%, or $5.5 million, decrease
in property rental income and a 3.6%, or $2.5 million, increase in operating
expenses. The decrease in property rental income was primarily driven by a $4.1
million increase in our reserve on multifamily tenant lease receivables, an
increase of $1.6 million in rent concessions and a decrease of 3.4%, or $0.9
million, in reimbursement and ancillary and fee income, partially offset by a
0.8%, or $1.7 million, increase in rental rates. Physical occupancy decreased by
0.6% to 96.3% and total monthly income per occupied home decreased 4.4% to
$2,247.

The increase in operating expenses was primarily driven by an 8.1%, or $2.3
million, increase in real estate taxes, which was primarily due to higher
assessed valuations, and a 7.8%, or $0.8 million, increase in repair and
maintenance expense due to the increased use of third party vendors, partially
offset by a 6.2%, or $0.9 million, decrease in personnel expense as a result of
fewer employees.

The operating margin (property net operating income divided by property rental
income) was 70.5% and 72.1% for the three months ended June 30, 2020 and 2019,
respectively.

Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019



NOI for our Same-Store Community properties decreased 0.9%, or $3.1 million, for
the six months ended June 30, 2020 compared to the same period in 2019. The
decrease in property NOI was attributable to a 3.2%, or 4.2 million, increase in
operating expense, partially offset by a 0.2%, or $1.2 million, increase in
property rental income. The increase in property rental income was primarily
driven by a 1.7%, or $7.4 million, increase in rental rates and a 0.5%, or $0.3
million, increase in reimbursement and ancillary and fee income, partially
offset by a $4.0 million increase in our reserve on multifamily tenant lease
receivables and an increase of $1.7 million in rent concessions. Physical
occupancy decreased by 0.2% to 96.7% and total monthly income per occupied home
increased 0.4% to $2,174.

The increase in operating expenses was primarily driven by a 6.8%, or $3.8
million, increase in real estate taxes, which was primarily due to higher
assessed valuations, and a 9.1%, or $1.7 million, increase in repair and
maintenance expense due to the increased use of third party vendors, partially
offset by a 7.4%, or $2.0 million, decrease in personnel expense as a result of
fewer employees.

The operating margin (property net operating income divided by property rental
income) was 71.1% and 71.9% for the six months ended June 30, 2020 and 2019,
respectively.

Non-Mature Communities/Other

UDR's Non-Mature Communities/Other represent those communities that do not meet
the criteria to be included in Same-Store Communities, which include communities
recently developed or acquired, redevelopment properties, sold or held for
disposition properties, and non-apartment components of mixed use properties.

Three Months Ended June 30, 2020 vs. Three Months Ended June 30, 2019



The remaining 19.7%, or $41.7 million, of our total NOI during the three months
ended June 30, 2020 was generated from our Non-Mature Communities/Other. NOI
from Non-Mature Communities/Other increased by 96.3%, or $20.5 million, for the
three months ended June 30, 2020 as compared to the same period in 2019. The
increase was primarily attributable to a $23.1 million increase in stabilized,
non-mature communities NOI and a $1.8 million increase in acquired communities,
partially offset by a $2.3 million decrease in NOI from non-residential/other.

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Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019



The remaining 22.4%, or $97.8 million, of our total NOI during the six months
ended June 30, 2020 was generated from our Non-Mature Communities/Other. NOI
from Non-Mature Communities/Other increased by 110.5%, or $51.4 million, for the
six months ended June 30, 2020 as compared to the same period in 2019. The
increase was primarily attributable to a $52.1 million increase in stabilized,
non-mature communities NOI and a $3.2 million increase in acquired communities,
partially offset by a $2.2 million decrease in NOI from sold and held for
disposition communities.

Real estate depreciation and amortization



For the three months ended June 30, 2020 and 2019, the Company recognized real
estate depreciation and amortization of $155.1 million and $117.9 million,
respectively. The increase in 2020 as compared to 2019 was primarily
attributable to communities acquired in 2020 and 2019, partially offset by a
decrease from fully depreciated assets.

For the six months ended June 30, 2020 and 2019, the Company recognized real
estate depreciation and amortization of $310.5 million and $230.4 million,
respectively. The increase in 2020 as compared to 2019 was primarily
attributable to communities acquired in 2020 and 2019, partially offset by a
decrease from fully depreciated assets.

Gain/(Loss) on sale of real estate owned


During the three and six months ended June 30, 2020, the Company recognized
gains of $61.3 million from the sale of two operating communities located in
Kirkland, Washington and Bellevue, Washington. During the three and six months
ended June 30, 2019, the Company recognized a gain of $5.3 million on the sale
of a parcel of land in Los Angeles, California.

Interest expense



For the three months ended June 30, 2020 and 2019, the Company recognized
interest expense of $38.6 million and $34.4 million, respectively. The increase
in 2020 as compared to 2019 was primarily attributable to higher average debt
balances.

For the six months ended June 30, 2020 and 2019, the Company recognized interest
expense of $77.9 million and $68.0 million, respectively. The increase in 2020
as compared to 2019 was primarily attributable to higher average debt balances.

Interest income and other income/(expense), net



For the six months ended June 30, 2020 and 2019, we recognized interest income
and other income/(expense), net of $5.1 million and $11.1 million, respectively.
The decrease in 2020 as compared to 2019 was primarily attributable to an $8.5
million promoted interest earned on the prepayment of a note to a multifamily
technology company in 2019.

Inflation

We believe that the direct effects of inflation on our operations have been
immaterial. While the impact of inflation primarily impacts our results of
operations as a result of wage pressures and increases in utilities and material
costs, the majority of our apartment leases have initial terms of 12 months or
less, which generally enables us to compensate for any inflationary effects by
increasing rental rates on our apartment homes. Although an extreme escalation
in costs could have a negative impact on our residents and their ability to
absorb rent increases, we do not believe this has had a material impact on our
results for the three and six months ended June 30, 2020.

Off-Balance Sheet Arrangements



We do not have any off-balance sheet arrangements that have, or are reasonably
likely to have, a current or future effect on our financial condition, changes
in financial condition, revenue or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material.

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Funds from Operations, Funds from Operations as Adjusted, and Adjusted Funds from Operations



Funds from Operations

Funds from operations ("FFO") attributable to common stockholders and
unitholders is defined as Net income/(loss) attributable to common stockholders
(computed in accordance with GAAP), excluding impairment write-downs of
depreciable real estate related to the main business of the Company or of
investments in non-consolidated investees that are directly attributable to
decreases in the fair value of depreciable real estate held by the investee,
gains and losses from sales of depreciable real estate related to the main
business of the Company and income taxes directly associated with those gains
and losses, plus real estate depreciation and amortization, and after
adjustments for noncontrolling interests, and the Company's share of
unconsolidated partnerships and joint ventures. This definition conforms with
the National Association of Real Estate Investment Trust's ("Nareit") definition
issued in April 2002 and restated in November 2018. Historical cost accounting
for real estate assets in accordance with GAAP implicitly assumes that the value
of real estate assets diminishes predictably over time. Since real estate values
instead have historically risen or fallen with market conditions, many industry
investors and analysts have considered the presentation of operating results for
real estate companies that use historical cost accounting to be insufficient by
themselves. Thus, Nareit created FFO as a supplemental measure of a REIT's
operating performance. In the computation of diluted FFO, if OP Units, DownREIT
Units, unvested restricted stock, unvested LTIP Units, stock options, and the
shares of Series E Cumulative Convertible Preferred Stock are dilutive, they are
included in the diluted share count.

Management considers FFO a useful metric for investors as the Company uses 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 flow as a measure of the Company's activities in accordance with
GAAP. FFO does not represent cash generated from operating activities in
accordance with GAAP and is not necessarily indicative of funds available to
fund our cash needs.

Funds from Operations as Adjusted



FFO as Adjusted ("FFOA") attributable to common stockholders and unitholders is
defined as FFO excluding the impact of non-comparable items including, but not
limited to, acquisition-related costs, prepayment costs/benefits associated with
early debt retirement, impairment write-downs or gains and losses on sales of
real estate or other assets incidental to the main business of the Company and
income taxes directly associated with those gains and losses, casualty-related
expenses and recoveries, severance costs and legal and other costs.

Management believes that FFOA is useful supplemental information regarding our
operating performance as it provides a consistent comparison of our operating
performance across time periods and allows investors to more easily compare our
operating results with other REITs. FFOA is not intended to represent cash flow
or liquidity for the period, and is only intended to provide an additional
measure of our operating performance. We believe that Net income/(loss)
attributable to common stockholders is the most directly comparable GAAP
financial measure to FFOA. However, other REITs may use different methodologies
for calculating FFOA or similar FFO measures and, accordingly, our FFOA may not
always be comparable to FFOA or similar FFO measures calculated by other REITs.
FFOA should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of financial performance, or as an
alternative to cash flows from operating activities (determined in accordance
with GAAP) as a measure of our liquidity.

Adjusted Funds from Operations



Adjusted FFO ("AFFO") attributable to common stockholders and unitholders is
defined as FFOA less recurring capital expenditures on consolidated communities
that are necessary to help preserve the value of and maintain functionality at
our communities. Therefore, management considers AFFO a useful supplemental
performance metric for investors as it is more indicative of the Company's
operational performance than FFO or FFOA.

AFFO is not intended to represent cash flow or liquidity for the period, and is
only intended to provide an additional measure of our operating performance. We
believe that Net income/(loss) attributable to common stockholders is the most
directly comparable GAAP financial measure to AFFO. Management believes that
AFFO is a widely recognized measure of the operations of REITs, and presenting
AFFO will enable investors to assess our performance in comparison to other
REITs. However, other REITs may use different methodologies for calculating AFFO
and, accordingly, our AFFO may not always be comparable to AFFO calculated by
other REITs. AFFO should not be considered as an alternative to net
income/(loss) (determined in accordance with GAAP) as an indication of financial
performance, or as an alternative to cash flows from

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operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions.

The following table outlines our reconciliation of Net income/(loss) attributable to common stockholders to FFO, FFOA, and AFFO for the three and six months ended June 30, 2020 and 2019 (dollars in thousands):




                                                     Three Months Ended           Six Months Ended
                                                         June 30,                    June 30,
                                                     2020          2019          2020          2019
Net income/(loss) attributable to common
stockholders                                      $   56,709    $   34,588    $   60,864    $   58,080
Real estate depreciation and amortization            155,056       117,934       310,532       230,402
Noncontrolling interests                               4,325         2,699         4,644         4,798
Real estate depreciation and amortization on
unconsolidated joint ventures                          8,745        15,211        17,561        30,885
Net gain on the sale of unconsolidated
depreciable property                                       -       (5,251)             -       (5,251)
Net gain on the sale of depreciable real
estate owned                                        (61,303)             -      (61,303)             -
FFO attributable to common stockholders and
unitholders, basic                                $  163,532    $  165,181    $  332,298    $  318,914
Distributions to preferred stockholders -
Series E (Convertible)                                 1,062         1,031         2,128         2,042
FFO attributable to common stockholders and
unitholders, diluted                              $  164,594    $  166,212    $  334,426    $  320,956
Income/(loss) per weighted average common
share, diluted                                    $     0.19    $     0.12    $     0.21    $     0.21
FFO per weighted average common share and
unit, basic                                       $     0.52    $     0.54    $     1.05    $     1.05
FFO per weighted average common share and
unit, diluted                                     $     0.51    $     0.54    $     1.04    $     1.05
Weighted average number of common shares and
OP/DownREIT Units outstanding - basic                317,096       304,696       316,891       302,998
Weighted average number of common shares,
OP/DownREIT Units, and common stock
equivalents outstanding - diluted                    320,426       308,322 

320,372 306,596



Impact of adjustments to FFO:
Promoted interest on settlement of note
receivable, net of tax                                     -             -    $        -    $  (6,482)
Legal and other costs                                  1,586             -         2,344         3,660
Net gain on the sale of non-depreciable real
estate owned                                               -       (5,282)             -       (5,282)
Unrealized (gain)/loss on unconsolidated
technology investments, net of tax                   (3,334)             -       (3,302)         (229)
Severance costs and other restructuring
expense                                                    -             -         1,642             -
Casualty-related charges/(recoveries), net               249           246         1,648           261
Casualty-related charges/(recoveries) on
unconsolidated joint ventures, net                         -            81            31           227
                                                  $  (1,499)    $  (4,955)    $    2,363    $  (7,845)
FFOA attributable to common stockholders and
unitholders, diluted                              $  163,095    $  161,257

$ 336,789 $ 313,111



FFOA per weighted average common share and
unit, diluted                                     $     0.51    $     0.52

$ 1.05 $ 1.02


Recurring capital expenditures                      (12,504)      (12,750)      (21,713)      (19,968)
AFFO attributable to common stockholders and
unitholders, diluted                              $  150,591    $  148,507

$ 315,076 $ 293,143



AFFO per weighted average common share and
unit, diluted                                     $     0.47    $     0.48    $     0.98    $     0.96




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The following table is our reconciliation of FFO share information to weighted average common shares outstanding, basic and diluted, reflected on the UDR Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (shares in thousands):




                                                     Three Months Ended       Six Months Ended
                                                         June 30,                June 30,
                                                      2020        2019        2020        2019
Weighted average number of common shares and
OP/DownREIT Units outstanding - basic                317,096     304,696     316,891     302,998
Weighted average number of OP/DownREIT Units
outstanding                                         (22,386)    (22,736)    (22,307)    (23,504)
Weighted average number of common shares
outstanding - basic per the Consolidated
Statements of Operations                             294,710     281,960   

294,584 279,494



Weighted average number of common shares,
OP/DownREIT Units, and common stock equivalents
outstanding - diluted                                320,426     308,322     320,372     306,596
Weighted average number of OP/DownREIT Units
outstanding                                         (22,386)    (22,736)    (22,307)    (23,504)
Weighted average number of Series E Cumulative
Convertible Preferred shares outstanding             (2,953)     (3,011)     (2,982)     (3,011)
Weighted average number of common shares
outstanding - diluted per the Consolidated
Statements of Operations                             295,087     282,575     295,083     280,081





United Dominion Realty, L.P.:

Business Overview

United Dominion Realty, L.P. (the "Operating Partnership" or "UDR, L.P.") is a
Delaware limited partnership formed in February 2004 and organized pursuant to
the provisions of the Delaware Revised Uniform Limited Partnership Act. The
Operating Partnership is the successor-in-interest to United Dominion
Realty, L.P., a limited partnership formed under the laws of Virginia, which
commenced operations on November 4, 1995. Our sole general partner is UDR, Inc.,
a Maryland corporation ("UDR" or the "General Partner"), which conducts a
substantial amount of its business and holds a substantial amount of its assets
through the Operating Partnership. At June 30, 2020, the Operating Partnership's
real estate portfolio included 52 communities located in nine states and the
District of Columbia with a total of 16,434 apartment homes.

As of June 30, 2020, UDR owned 0.1 million units of our general partnership
interests and 176.1 million units of our limited partnership interests (the "OP
Units"), or approximately 95.3% of our outstanding OP Units. By virtue of its
ownership of our OP Units and being our sole general partner, UDR has the
ability to control all of the day-to-day operations of the Operating
Partnership. Unless otherwise indicated or unless the context requires
otherwise, all references in this section of this Report to the Operating
Partnership or "we," "us" or "our" refer to UDR, L.P. together with its
consolidated subsidiaries, and all references in this section to "UDR" or the
"General Partner" refer solely to UDR, Inc.

UDR is a self-administered real estate investment trust, or REIT, that owns,
acquires, renovates, develops, and manages apartment communities. The General
Partner was formed in 1972 as a Virginia corporation and changed its state of
incorporation from Virginia to Maryland in June 2003. At June 30, 2020, the
General Partner's consolidated real estate portfolio included 148 communities
located in 13 states and the District of Columbia with a total of 47,371
apartment homes. In addition, the General Partner had an ownership interest in
5,134 completed or to-be-completed apartment homes through unconsolidated joint
ventures or partnerships, including 2,004 apartment homes owned by entities in
which we hold preferred equity investments.

The Operating Partnership's same-store community apartment home population for both the three and six months ended June 30, 2020 was 15,941.



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The following table summarizes our market information by major geographic markets as of and for the three and six months ended June 30, 2020:




                                                                                           Three Months Ended               Six Months Ended
                                                        June 30, 2020                        June 30, 2020                    June 30, 2020
                                                       Percentage        Total                          Monthly                         Monthly
                              Number of    Number of   of Total        Carrying       Average         Income per       Average        Income per
                              Apartment    Apartment    Carrying       Value (in     Physical          Occupied       Physical          Occupied
Same-Store Communities       Communities     Homes       Value        thousands)     Occupancy         Home (a)       Occupancy         Home (a)
West Region
Orange County, CA                      5       3,119         19.2 %  $     749,975        96.1 %    $         2,277        96.7 %    $        2,302
San Francisco, CA                      9       2,185         15.7 %        613,490        93.7 %              3,283        95.1 %             3,336
Seattle, WA                            5         932          5.9 %        231,486        97.1 %              2,074        97.2 %             2,111
Los Angeles, CA                        2         344          3.0 %        117,293        97.2 %              2,725        96.8 %             2,790
Monterey Peninsula, CA                 7       1,565          4.7 %        183,797        96.8 %              1,918        96.3 %             1,936
Other Southern California              1         414          2.0 %         76,030        96.6 %              2,116        96.9 %             2,135
Portland, OR                           2         476          1.3 %         51,330        97.3 %              1,624        97.1 %             1,633
Mid-Atlantic Region
Metropolitan D.C.                      6       2,068         14.5 %        566,250        95.7 %              2,122        96.3 %             2,156
Baltimore, MD                          2         540          2.8 %        106,982        98.1 %              1,535        97.5 %             1,544
Northeast Region
New York, NY                           1         503          8.6 %        334,012        91.5 %              3,716        95.4 %             3,861
Boston, MA                             1         387          1.9 %         75,230        96.3 %              2,050        95.4 %             2,095
Southeast Region
Tampa, FL                              2         942          2.9 %        111,603        97.5 %              1,525        97.6 %             1,536
Nashville, TN                          6       1,612          4.0 %        156,295        97.9 %              1,334        97.7 %             1,335
Other Florida                          1         636          2.3 %         88,108        97.5 %              1,604        96.9 %             1,632
Southwest Region
Denver, CO                             1         218          3.7 %        144,751        92.9 %              3,079        92.6 %             3,112
Total/Average Same-Store
Communities                           51      15,941         92.5 %      3,606,632        96.1 %    $         2,183        96.5 %    $        2,219
Non-Mature, Commercial
Properties & Other                     1         493          7.5 %        292,078
Total Real Estate Owned               52      16,434        100.0 %      3,898,710
Total Accumulated
Depreciation                                                           (1,867,071)
Total Real Estate Owned,
Net of Accumulated
Depreciation                                                         $   2,031,639

Monthly Income per Occupied Home represents total monthly revenues divided by (a) the average physical number of occupied apartment homes in our Same-Store


    portfolio.



We report in two segments: Same-Store Communities and Non-Mature Communities/Other.



Our Same-Store Communities segment represents those communities acquired,
developed, and stabilized prior to April 1, 2019 (for quarter-to-date
comparison) and January 1, 2019 (for year-to-date comparison) and held as of
June 30, 2020. 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 communities are not 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.

Our Non-Mature Communities/Other segment represents 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.

Liquidity and Capital Resources



Liquidity is the ability to meet present and future financial obligations either
through operating cash flows, the sale of properties, and the issuance of debt.
Both the coordination of asset and liability maturities and effective capital
management are important to the maintenance of liquidity. The Operating
Partnership's primary source of liquidity is cash flow from operations, as
determined by rental rates, occupancy levels, and operating expenses related to
our portfolio of apartment homes, and borrowings owed by us under the General
Partner's credit agreements. The General Partner will routinely use its working
capital credit facility, its unsecured revolving credit facility and issuances
of commercial paper to temporarily fund

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certain investing and financing activities prior to arranging for longer-term
financing or the issuance of equity or debt securities. During the past
several years, proceeds from the sale of real estate have been used for both
investing and financing activities as we continue to execute on maintaining a
diversified portfolio.

We expect to meet our short-term liquidity requirements generally through net
cash provided by property operations and borrowings owed by us under the General
Partner's credit agreements. We expect to meet certain long-term liquidity
requirements such as scheduled debt maturities and potential property
acquisitions through net cash provided by property operations, borrowings and
the disposition of properties. We believe that our net cash provided by property
operations and borrowings will continue to be adequate to meet both operating
requirements and the payment of distributions. Likewise, the budgeted
expenditures for improvements and renovations of certain properties are expected
to be funded from property operations, borrowings owed by us under the General
Partner's credit agreements, and the disposition of properties.

Future Capital Needs



Future capital expenditures are expected to be funded with proceeds from the
issuance of secured debt or unsecured debt, sales of properties, borrowings owed
by us under our General Partner's credit agreements, and to a lesser extent,
from cash flows provided by operating activities.

As of June 30, 2020, the Operating Partnership does not have any debt maturing during the remainder of 2020.

Critical Accounting Policies and Estimates and New Accounting Pronouncements



Our critical accounting policies are those having the most impact on the
reporting of our financial condition and results and those requiring significant
judgments and estimates. These policies include those related to (1) capital
expenditures, (2) impairment of long-lived assets, (3) real estate investment
properties, and (4) revenue recognition.

Our critical accounting policies are described in more detail in the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Operating Partnership's Annual Report on
Form 10-K, filed with the SEC on February 18, 2020. There have been no
significant changes in our critical accounting policies from those reported.
With respect to these critical accounting policies, we believe that the
application of judgments and assessments is consistently applied and produces
financial information that fairly depicts the results of operations for all
periods presented.

Statements of Cash Flows


The following discussion explains the changes in Net cash provided by/(used in)
operating activities, Net cash provided by/(used in) investing activities, and
Net cash provided by/(used in) financing activities that are presented in our
Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and
2019.

Operating Activities

For the six months ended June 30, 2020, Net cash provided by/(used in) operating
activities was $117.8 million compared to $126.4 million for the comparable
period in 2019. The decrease in cash flow from operating activities was
primarily due to changes in operating assets and liabilities and a decrease in
net operating income, primarily driven by a reserve recorded in 2020 on our
multifamily tenant lease receivables.

Investing Activities



For the six months ended June 30, 2020, Net cash provided by/(used in) investing
activities was $(13.2) million compared to $(19.6) million for the comparable
period in 2019. The decrease in cash used in investing activities was primarily
due to a decrease in capital expenditures during the six months ended June 30,
2020, as compared to the same period in 2019.

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Acquisitions and Dispositions

The Operating Partnership did not have any acquisitions or dispositions of real estate during the six months ended June 30, 2020.

Financing Activities



For the six months ended June 30, 2020 and 2019, our Net cash provided by/(used
in) financing activities was $(104.0) million compared to $(106.3) million for
the comparable period of 2019. The decrease in cash used in financing activities
was primarily due to a decrease in repayments of notes payable to the General
Partner, partially offset by an increase in distributions paid to partnership
unitholders.

Guarantor on Unsecured Debt

The Operating Partnership is the guarantor on the General Partner's unsecured
revolving credit facility with an aggregate borrowing capacity of $1.1 billion,
an unsecured commercial paper program with an aggregate borrowing capacity of
$500 million, a $350 million term loan due September 2023, $300 million of
medium-term notes due July 2024, $300 million of medium-term notes due
October 2025, $300 million of medium-term notes due September 2026, $300 million
of medium-term notes due July 2027, $300 million of medium-term notes due
January 2028, $300 million of medium-term notes due January 2029, $600 million
of medium-term notes due January 2030, $400 million of medium-term notes due
August 2031, and $300 million of medium-term notes due November 2034. As of
June 30, 2020 and December 31, 2019, the General Partner did not have an
outstanding balance under the unsecured revolving credit facility and had $185.0
million and $300.0 million, respectively, outstanding under its unsecured
commercial paper program.

The credit facilities are subject to customary financial covenants and limitations.



On July 14, 2020, the General Partner announced that it commenced a cash tender
offer for any and all of its outstanding 3.75% unsecured medium-term notes due
July 2024 (the "2024 Notes"), which the Operating Partnership
guarantees. Pursuant to the tender offer, on July 21, 2020, the General Partner
completed the purchase of $116.9 million aggregate principal amount of the 2024
Notes, or 39.0% of the $300.0 million aggregate principal amount of the 2024
Notes. The tender offer consideration was $1,101.92 for each $1,000 principal
amount of the 2024 Notes, plus accrued and unpaid interest to, but not
including, July 21, 2020.

On July 21, 2020, the General Partner issued $400.0 million of 2.10% senior
unsecured medium-term notes due August 1, 2032. Interest is payable
semi-annually in arrears on February 1 and August 1. The notes were priced at
99.894% of the principal amount at issuance. The General Partner used or will
use a portion of the net proceeds to fund the purchase of the 2024 Notes
accepted pursuant to the tender offer described above and to prepay $245.8
million of 4.64% secured debt due in 2023. The Operating Partnership is the
guarantor of this debt. The combined prepayment and make-whole amounts for the
purchase of the 2024 Notes and the prepayment of the secured debt due in 2023,
inclusive of the acceleration of fair market value adjustments originally
recorded on secured debt assumed in property acquisitions, totaled approximately
$24.0 million.

Interest Rate Risk

We are exposed to interest rate risk associated with variable rate notes payable
and maturing debt that has to be refinanced. We do not hold financial
instruments for trading or other speculative purposes, but rather issue these
financial instruments to finance our portfolio of real estate assets. Interest
rate sensitivity is the relationship between changes in market interest rates
and the fair value of market rate sensitive assets and liabilities. Our earnings
are affected as changes in short-term interest rates impact our cost of variable
rate debt and maturing fixed rate debt. We had $27.0 million in variable rate
debt that is not subject to interest rate swap contracts as of June 30, 2020. If
market interest rates for variable rate debt increased by 100 basis points, our
interest expense for the six months ended June 30, 2020 would increase by $0.1
million based on the average balance outstanding during the period.

These amounts are determined by considering the impact of hypothetical interest
rates on our borrowing cost. These analyses do not consider the effects of the
adjusted level of overall economic activity that could exist in such an
environment. Further, in the event of a change of such amount, management would
likely take actions to further mitigate our exposure to the change. However, due
to the uncertainty of the specific actions that would be taken and their
possible effects, the sensitivity analysis assumes no change in our financial
structure.

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The General Partner also utilizes derivative financial instruments owed by the
Operating Partnership to manage interest rate risk and generally designates
these financial instruments as cash flow hedges. See Note 9, Derivatives and
Hedging Activities, in the Notes to the Operating Partnership's Consolidated
Financial Statements for additional discussion of derivative instruments.

A presentation of cash flow metrics based on GAAP is as follows (dollars in
thousands):


                                                         Six Months Ended June 30,
                                                            2020             2019

Net cash provided by/(used in) operating activities $ 117,798 $

126,407

Net cash provided by/(used in) investing activities (13,204)

(19,599)

Net cash provided by/(used in) financing activities (104,043) (106,322)




Results of Operations

The following discussion explains the changes in results of operations that are
presented in our Consolidated Statements of Operations for the three and six
months ended June 30, 2020 and 2019.

Net Income/(Loss) Attributable to OP Unitholders



Net income attributable to OP unitholders was $19.4 million ($0.10 per diluted
OP Unit) for the three months ended June 30, 2020, as compared to net income of
$27.4 million ($0.15 per diluted OP Unit) for the comparable period in the
prior year. The decrease in net income attributable to OP unitholders resulted
primarily from the following items, which are discussed in further detail
elsewhere within this Report:

a decrease in total property NOI of $6.6 million, primarily due to an

? approximately $2.0 million reserve recorded on our multifamily tenant lease

receivables and an increase in rent concessions given to tenants; and

? an increase in other operating expenses of $1.4 million, primarily due to

higher ground lease expense.




Net income attributable to OP unitholders was $43.5 million ($0.24 per diluted
OP Unit) for the six months ended June 30, 2020, as compared to net income of
$51.3 million ($0.28 per diluted OP Unit) for the comparable period in the
prior year. The decrease in net income attributable to OP unitholders resulted
primarily from the following items, which are discussed in further detail
elsewhere within this Report:

a decrease in total property NOI of $4.1 million, primarily due to an

? approximately $2.0 million reserve recorded on our multifamily tenant lease

receivables and an increase in rent concessions given to tenants; and

? an increase in other operating expenses of $2.9 million, primarily due to

higher ground lease expense.

Apartment Community Operations



Our net income results primarily from NOI generated from the operation of our
apartment communities. The Operating Partnership defines NOI, which is a
non-GAAP financial measure, as rental income less direct property rental
expenses. Rental income represents gross market rent less adjustments for
concessions, vacancy loss and bad debt. Rental expenses include real estate
taxes, insurance, personnel, utilities, repairs and maintenance, administrative
and marketing. Excluded from NOI are property management costs, which are the
Operating Partnership's allocable share of costs incurred by the General Partner
for shared services of corporate level property management employees and related
support functions and costs.

Management considers NOI a useful metric for investors as it is a more
meaningful representation of a community's continuing operating performance than
net income as it is prior to corporate-level expense allocations, general and
administrative costs, capital structure and depreciation and amortization.

Although we consider NOI a useful measure of operating performance, NOI should
not be considered an alternative to net income or net cash flow from operating
activities as determined in accordance with GAAP. NOI excludes several income
and expense categories as detailed in the reconciliation of NOI to Net
income/(loss) attributable to OP unitholders below.

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The following table summarizes the operating performance of our total property
NOI for the three and six months ended June 30, 2020 and 2019 (dollars in
thousands):


                                             Three Months Ended                      Six Months Ended
                                               June 30,  (a)             %            June 30,  (a)            %
                                             2020          2019       Change        2020          2019      Change
Same-Store Communities:
Same-Store rental income                  $  100,322    $  103,048      (2.6) %  $  204,799    $  204,500       0.1 %
Same-Store operating expense (b)            (27,030)      (26,045)        3.8 %    (54,367)      (52,377)       3.8 %
Same-Store NOI                                73,292        77,003      

(4.8) % 150,432 152,123 (1.1) %



Non-Mature Communities/Other NOI:
Redevelopment communities NOI                  2,990         3,451     (13.4) %       6,441         6,998     (8.0) %
Non-residential/other NOI                    (1,158)         1,226    (194.5) %       (194)         1,698   (111.4) %
Total Non-Mature Communities/Other NOI         1,832         4,677     (60.8) %       6,247         8,696    (28.2) %
Total property NOI                        $   75,124    $   81,680      (8.0) %  $  156,679    $  160,819     (2.6) %

(a) Same-Store consists of 15,941 apartment homes.

(b) Excludes depreciation, amortization, and property management expenses.

The following table is our reconciliation of Net income/(loss) attributable to OP unitholders to total property NOI for the three and six months ended June 30, 2020 and 2019 (dollars in thousands):




                                                    Three Months Ended         Six Months Ended
                                                        June 30,                  June 30,
                                                     2020         2019        2020         2019
Net income/(loss) attributable to OP
unitholders                                       $   19,373    $ 27,394    $  43,491    $  51,340
Property management                                    3,024       3,308        6,249        6,287
Other operating expenses                               3,837       2,422        7,696        4,822

Real estate depreciation and amortization             35,430      34,921       70,730       69,575
General and administrative                             3,951       4,151        9,259        8,812
Casualty-related charges/(recoveries), net               190        (81)          188         (81)
(Income)/loss from unconsolidated entities             1,661       1,794        3,422        4,534
Interest expense                                       7,170       7,355       14,634       14,726
Net income/(loss) attributable to
noncontrolling interests                                 488         416        1,010          804
Total property NOI                                $   75,124    $ 81,680    $ 156,679    $ 160,819




Same-Store Communities

Our Same-Store Community properties, those acquired, developed, and stabilized
prior to April 1, 2019 (for quarter-to-date comparison) and January 1, 2019 (for
year-to-date comparison) and held as of June 30, 2020, consisted of 15,941
apartment homes for both periods and provided 97.6% and 96.0% of our total NOI
for the three and six months ended June 30, 2020, respectively.

Three Months Ended June 30, 2020 vs. Three Months Ended June 30, 2019



NOI for our Same-Store Community properties decreased 4.8%, or $3.7 million, for
the three months ended June 30, 2020 compared to the same period in 2019. The
decrease in property NOI was primarily attributable to a 2.6%, or $2.7 million,
decrease in property rental income and a 3.8%, or $1.0 million, increase in
operating expenses. The decrease in property rental income was primarily driven
by a $2.0 million increase in our reserve on multifamily tenant lease
receivables, a $0.6 million increase in rent concessions and a decrease of $0.6
million in reimbursement and ancillary and fee income, partially offset by a
0.7%, or $0.7 million, increase in rental rates. Physical occupancy decreased
0.7% to 96.1% and total monthly income per occupied home decreased 2.0% to
$2,183.

The increase in operating expenses was primarily driven by a 9.3%, or $0.9
million, increase in real estate taxes, which was primarily due to higher
assessed valuations and a 9.4%, or $0.4 million, increase in repair and
maintenance expense due to the increased use of third party vendors, partially
offset by an 8.2%, or $0.5 million, decrease in personnel expense as a result of
fewer employees.

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The operating margin (property net operating income divided by property rental
income) was 73.1% and 74.7% for the three months ended June 30, 2020 and 2019,
respectively.

Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019



NOI for our Same-Store Community properties decreased 1.1%, or $1.7 million, for
the six months ended June 30, 2020 compared to the same period in 2019. The
decrease in property NOI was primarily attributable to a 3.8%, or $2.0 million,
increase in operating expenses, which was partially offset by a 0.1%, or $0.3
million, increase in property rental income. The increase in property rental
income was primarily driven by a 1.8%, or $3.2 million, increase in rental rates
and a 0.4%, or $0.1 million, increase in reimbursement and ancillary and fee
income, partially offset by a $2.1 million increase in our reserve on
multifamily tenant lease receivables and a $0.6 million increase in rent
concessions. Physical occupancy decreased 0.2% to 96.5% and total monthly income
per occupied home increased 0.4% to $2,219.

The increase in operating expenses was primarily driven by a 7.8%, or $1.5
million, increase in real estate taxes, which was primarily due to higher
assessed valuations and a 10.6%, or $0.8 million, increase in repair and
maintenance expense due to the increased use of third party vendors, partially
offset by an 7.6%, or $0.9 million, decrease in personnel expense as a result of
fewer employees.

The operating margin (property net operating income divided by property rental
income) was 73.5% and 74.4% for the six months ended June 30, 2020 and 2019,
respectively.

Non-Mature Communities/Other

The Operating Partnership's Non-Mature Communities/Other represent those communities that do not meet the criteria to be included in Same-Store Communities, which include communities recently developed or acquired, redevelopment properties, sold or held for disposition properties and the non-apartment components of mixed use properties.

Three Months Ended June 30, 2020 vs. Three Months Ended June 30, 2019



The remaining 2.4%, or $1.8 million, of our total NOI during the three months
ended June 30, 2020 was generated from our Non-Mature Communities/Other. NOI
from Non-Mature Communities/Other decreased 60.8%, or $2.8 million, for the
three months ended June 30, 2020, compared to the same period in 2019. The
decrease was primarily attributable to a $2.4 million decrease in NOI from
non-residential/other primarily due to a reserve on retail tenant lease
receivables, including reserves on straight-line lease receivables, and a $0.5
million decrease in NOI from redevelopment communities.

Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019


The remaining 4.0%, or $6.2 million, of our total NOI during the six months
ended June 30, 2020 was generated from our Non-Mature Communities/Other. NOI
from Non-Mature Communities/Other decreased 28.2%, or $2.4 million, for the six
months ended June 30, 2020, compared to the same period in 2019. The decrease
was primarily attributable to a $1.9 million decrease in NOI from
non-residential/other primarily due to a reserve on retail tenant lease
receivables, including reserves on straight-line lease receivables, and a $0.6
million decrease in NOI from redevelopment communities.

Inflation


We believe that the direct effects of inflation on our operations have been
immaterial. While the impact of inflation primarily impacts our results of
operations as a result of wage pressures and increases in utilities and material
costs, the majority of our apartment leases have initial terms of 12 months or
less, which generally enables us to compensate for any inflationary effects by
increasing rental rates on our apartment homes. Although an extreme escalation
in costs could have a negative impact on our residents and their ability to
absorb rent increases, we do not believe this has had a material impact on our
results for the three and six months ended June 30, 2020.

Off-Balance Sheet Arrangements



We do not have any off-balance sheet arrangements that have, or are reasonably
likely to have, a current or future effect on our financial condition, changes
in financial condition, revenue or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material.

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