UDR forms $510M joint venture with LaSalle Investment

UDR has closed a $510M joint venture with LaSalle Investment. The company and the partner intend to grow the joint venture over time through the acquisition of high-quality, well-located communities with operational upside that can be recognized through the implementation of UDR‘s operating platform. UDR will initially contribute four communities totaling 1,328 apartment homes into the joint venture; retain a 51% ownership in the communities included in the joint venture; and receive approximately $250M in cash proceeds. The joint venture will initially have no debt. The value of the seed portfolio is based on a low-5% effective forward yield, and the company expects the transaction to be accretive to FFOA and cash flow per share in the first year of the venture. The company serves as the manager of the joint venture and will earn asset management, property management, financing, and construction management fees. For new acquisitions made through the venture, the company will earn acquisition fees and the potential to earn a promoted return should certain return hurdles be achieved.