This week:
I bought new shares in the apartment REIT UDR.
On September 16, I bought ~16.9 shares of the apartment REIT UDR $UDR ( ▼ 0.91% ) at an average price of $34.61.
My total investment was ~$584.
I like UDR because they have:
~60k class A and B apartments throughout America.
A high occupancy rate of 97%.
Rental growth opportunities in the Sunbelt part of their portfolio.
An experienced management team and board of directors.
Paid dividends for 53+ straight years. They started paying a monthly dividend in July 2026. They’re the first multifamily REIT to pay monthly dividends.
I want to move more into the REIT space because it gives me an opportunity to buy companies that pass my dividend hurdle rate of 4%. Many companies outside the REIT space pay 4% when they are in trouble and about to cut their dividends.
2775 Mesa Verde Drive East, Costa Mesa, CA 92626 - 964 apartments.
Outside of utilities, REITs, and MLPs, shareholders seem to disdain cash distributions, and companies are obliging them by not paying dividends.
The REIT space is different. REIT investors expect dividends, companies in the sector are required to pay at least 90% of their taxable income as dividends, and it's easier to find REITs with yields over 4%.
I have to go where the fish are swimming.
Over the last 5-7-10-15-20 year periods, UDR’s average dividend yield was 3.5%-4%.
I bought my shares at a 5% dividend yield. 100 bps higher than the average.
I also got in at a 6.7% implied cap rate. Private market deals are trading at a 5.5% cap rate. I’m buying UDR’s properties 18% less than their private market value.
There are two ways the margin can shrink. Either UDR’s cap rate will fall to match the private market rate of 5.5%, and my stock price will increase, or the private market rate will increase to 6.7%, and private market values will decline.
The stock market might be warning investors that private market values are about to fall.
I think $34.61 is a good price for me to build an initial stake in UDR and the REIT space.
120 W 21st Street, New York NY - 209 apartments.
Remember to pray for America to start using the word righteous again. Its absence from our vocabulary is a telling sign.
“So flee youthful passions and pursue righteousness, faith, love, and peace, along with those who call on the Lord from a pure heart.”
2 Timothy 2:22 ESV
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