UDR UDR · USD

16. REPORTABLE SEGMENTSGAAP guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. UDR’s CODM is comprised of our Chairman, President and Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, who use several generally accepted industry financial measures to assess the performance of the business for our reportable operating segments.UDR owns and operates multifamily apartment communities that generate rental and other property related income through the leasing of apartment homes to a diverse base of tenants. The primary financial measures for UDR’s apartment communities are rental income and net operating income (“NOI”). NOI is 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. Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. NOI is defined as rental income less direct property rental expenses. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative and marketing, which align with the segment-level information that is regularly provided to our CODM. Excluded from NOI is property management expense, which is calculated as 3.25% of property revenue, and land rent. Property management expense covers costs directly related to consolidated property operations, inclusive of corporate management, regional supervision, accounting and other costs. UDR’s CODM utilizes NOI as the key measure of segment profit or loss to assess the performance of each segment and to allocate resources (including employees and financial or capital resources) primarily during the quarterly or annual business review and annual budget and forecasting process.UDR’s two reportable segments are Same-Store Communities and Non-Mature Communities/Other:●Same-Store Communities represent those communities acquired, developed, and stabilized prior to January 1, 2024 and held as of December 31, 2025.

​15. COMMITMENTS AND CONTINGENCIESCommitmentsThe following summarizes the Company’s commitments at December 31, 2025 (dollars in thousands):​​​​​​​​​​​​Number ​UDR's​UDR's Remaining​​​Properties​Investment (a)​Commitment​Real estate commitments​​​​​​​​​Wholly-owned — under development 1​$ 72,885 ​$ 60,715 Other unconsolidated investments:​​​​​​​​​Real estate technology and sustainability investments (b) ​-​​ 134,006​​ 34,994​Total ​​$ 206,891​$ 95,709 (a)Represents UDR’s investment as of December 31, 2025.(b)As of December 31, 2025, the investments were recorded in either Investment in and advances to unconsolidated joint ventures, net or Other Assets on the Consolidated Balance Sheets.ContingenciesLitigation and Legal MattersThe Company is subject to various legal proceedings and claims arising in the ordinary course of business. The Company cannot determine the ultimate liability with respect to such legal proceedings and claims at this time. The Company believes that such liability, to the extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of operations or cash flows.We have been named as a defendant in a number of cases alleging antitrust violations by RealPage, Inc., a vendor providing revenue management software products, and various owners or managers of multifamily housing, which cases have been consolidated in the United States Court for the Middle District of Tennessee with the Second Amended Complaint filed September 7, 2023 and cases with similar allegations that have been filed by the District of Columbia on November 1, 2023 in the Superior Court of the District of Columbia, the State of Maryland on January 15, 2025 in the Circuit Court for Prince George’s County, Maryland, subsequently transferred to the Circuit Court for Baltimore City, Maryland, and on April 8, 2025 in the Superior Court for King County, Washington. These cases seek injunctive relief as well as monetary damages. We believe that there are defenses, both factual and legal, to the allegations in such cases and we intend to vigorously defend such suits. We are also aware that governmental investigations regarding antitrust matters in the multifamily industry are occurring and the federal government and various state attorneys general have filed a civil lawsuit against RealPage, Inc. and certain owners or managers of multifamily housing to which we are not a party.

7. SECURED AND UNSECURED DEBT, NETThe following is a summary of our secured and unsecured debt at December 31, 2025 and 2024 (dollars in thousands):​​​​​​​​​​​​​​​Principal Outstanding​As of December 31, 2025​​​​​​​​Weighted​Weighted​​​​​​​​​​Average​Average​Number of​​December 31, ​December 31, ​Interest​Years to​Communities​ ​ ​ ​2025 ​ ​ ​2024 ​ ​ ​Rate ​ ​ ​Maturity ​ ​ ​EncumberedSecured Debt:​​ ​​​ ​​ ​​ ​​ ​Fixed Rate Debt ​ ​ ​ ​ ​ ​ ​Mortgage notes payable (a)​$ 937,475​$ 1,115,798 3.46% 3.6 17Deferred financing costs and other non-cash adjustments (b)​ (3,252)​ (3,429) ​ ​ ​Total fixed rate secured debt, net​ 934,223​ 1,112,369 3.51% 3.6 17Variable Rate Debt​ ​​ ​ ​ ​ ​Tax-exempt secured notes payable (c)​ 27,000​ 27,000 3.11% 6.2 1Deferred financing costs​ (43)​ (38) ​ ​ ​Total variable rate secured debt, net​ 26,957​ 26,962 3.14% 6.2 1Total Secured Debt, net​ 961,180​ 1,139,331 3.50% 3.7 18Unsecured Debt:​ ​​ ​ ​ ​ ​Variable Rate Debt​ ​​ ​ ​ ​ ​Borrowings outstanding under unsecured credit facility due August 2028 (d) (l)​ —​ — —% 2.7 ​Borrowings outstanding under unsecured commercial paper program due January 2026 (e) (l)​​ 445,000​​ 289,900​ 3.95% 0.1​​Borrowings outstanding under unsecured working capital credit facility due January 2027 (f)​ 26,381​ 9,361 4.44% 1.0 ​Term Loan due January 2029 (d) (l)​ 175,000​ 175,000 4.70% 3.1 ​Fixed Rate Debt​ ​​ ​ ​ ​ ​Term Loan due January 2029 (d) (l)​​ 175,000​ 175,000 4.04% 3.1​​2.95% Medium-Term Notes due September 2026 (l)​ 300,000​ 300,000 2.95% 0.7 ​3.50% Medium-Term Notes due July 2027 (net of discounts of $106 and $176, respectively) (l)​​ 299,894​​ 299,824​ 3.50% 1.5​​3.50% Medium-Term Notes due January 2028 (net of discounts of $242 and $361, respectively) (l)​​ 299,758​​ 299,639​ 3.50% 2.0​​4.40% Medium-Term Notes due January 2029 (net of discounts of $2 and $2, respectively) (g) (l)​​ 299,998​​ 299,998​ 4.27% 3.1​​3.20% Medium-Term Notes due January 2030 (net of premiums of $5,548 and $6,921, respectively) (h) (l)​​ 605,548​​ 606,921​ 3.32% 4.0​​3.00% Medium-Term Notes due August 2031 (net of premiums of $6,720 and $7,914, respectively) (i) (l)​​ 606,720​​ 607,914​ 3.01% 5.6​​2.10% Medium-Term Notes due August 2032 (net of discounts of $232 and $267, respectively) (l)​​ 399,768​​ 399,733​ 2.10% 6.6​​1.90% Medium-Term Notes due March 2033 (net of discounts of $869 and $989, respectively) (l)​​ 349,131​​ 349,011​ 1.90% 7.2​​2.

11. INCOME TAXESFor 2025, 2024, and 2023, UDR believes that we have complied with the REIT requirements specified in the Code. As such, the REIT would generally not be subject to federal income taxes.For income tax purposes, distributions paid to common stockholders may consist of ordinary income, qualified dividends, capital gains, unrecaptured section 1250 gains, return of capital, or a combination thereof. Distributions that exceed our current and accumulated earnings and profits constitute a return of capital rather than taxable income and reduce the stockholder’s basis in their common shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common shares, it generally will be treated as a gain from the sale or exchange of that stockholder’s common shares. Taxable distributions paid per common share were taxable as follows for the years ended December 31, 2025, 2024 and 2023 (unaudited):​​​​​​​​​​​​​Year Ended December 31, ​​2025​2024​2023Ordinary income ​ ​ ​$ 1.4244 ​ ​ ​$ 1.5935 ​ ​ ​$ 1.4384Qualified ordinary income​ 0.0001​ 0.0001​ 0.0001Long-term capital gain​ 0.1771​ 0.0458​ 0.1697Unrecaptured section 1250 gain​ 0.1134​ 0.0556​ 0.0318Total​$ 1.7150​$ 1.6950​$ 1.6400​We have a TRS that is subject to federal and state income taxes. A TRS is a C-corporation which has not elected REIT status and as such is subject to United States federal and state income tax. The components of the provision for income taxes are as follows for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):​​​​​​​​​​​​​Year Ended December 31, ​​2025​2024​2023Income tax (benefit)/provision ​ ​ ​​ ​ ​ ​ ​​ ​ ​ ​ ​​ ​Current ​ ​ ​ ​ ​ ​Federal​$ 210​$ 314​$ 69State​ 940​ 1,192​ 2,036Total current​ 1,150​ 1,506​ 2,105Deferred​​​​​​​​​Federal​ (252)​ (103)​ 26State​ (15)​ (476)​ 23Investment tax credit​​ (48)​​ (48)​​ (48)Total deferred​ (315)​ (627)​ 1Total income tax (benefit)/provision​$ 835​$ 879​$ 2,106​Deferred income taxes are provided for the change in temporary differences between the basis of certain assets and liabilities for financial reporting purposes and income tax reporting purposes. The expected future tax rates are based upon enacted tax laws.

6. LEASESLessee - Ground LeasesUDR has six communities that are subject to ground leases, under which UDR is the lessee, that expire between 2043 and 2103, inclusive of extension options we are reasonably certain will be exercised. All of these leases are classified as operating leases through the lease term expiration based on our election of the practical expedient provided by the leasing standard. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the remaining lease term. We currently do not hold any finance leases. The Company also elected the short-term lease exception provided by the leasing standard and therefore only recognizes right-of-use assets and lease liabilities for leases with a term greater than one year. No leases qualified for the short-term lease exception during the years ended December 31, 2025 and 2024.As of December 31, 2025 and 2024, the Operating lease right-of-use assets were $187.6 million and $187.0 million, respectively, and the Operating lease liabilities were $183.0 million and $182.3 million, respectively, on our Consolidated Balance Sheets related to our ground leases. The value of the Operating lease right-of-use assets exceeds the value of the Operating lease liabilities due to prepaid lease payments. The calculation of these amounts includes minimum lease payments over the remaining lease term (described further in the table below). Variable lease payments are excluded from the right-of-use assets and lease liabilities and are recognized in earnings in the period in which the obligation for those payments is incurred.As the discount rate implicit in the leases was not readily determinable, we determined the discount rate for these leases utilizing the Company’s incremental borrowing rate at a portfolio level, adjusted for the remaining lease term, and the form of underlying collateral. The weighted average remaining lease term for these leases was 40.8 years and 41.3 years at December 31, 2025 and 2024, respectively, and the weighted average discount rate was 5.0% at both December 31, 2025 and 2024.

Given the prevalence of cybersecurity threats, cybersecurity represents a critical component of the Company’s overall approach to risk management. The Company’s cybersecurity policies, standards and practices are integrated into the Company’s enterprise risk management (“ERM”) approach, and cybersecurity risks are among the core enterprise risks that are subject to oversight by the Company’s Board of Directors (the “Board”). The Company’s cybersecurity policies, standards and practices are derived from recognized frameworks established by the National Institute of Standards and Technology (“NIST”) and other applicable industry standards. In 2025, the Company was audited against a set of critical in scope systems using the NIST Cybersecurity Framework with no findings identified. The Company plans to continue to obtain a NIST compliance audit on an annual basis. Many members of the Company’s cybersecurity team are certified by and have received training from the International Information Security Consortium (“IISC”). The Company generally approaches cybersecurity threats through a cross-functional, multilayered approach, with specific the goals of: (i) identifying, attempting to prevent and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protecting the Company’s intellectual property; (iv) protecting personally identifiable data and maintaining the confidence of our customers, clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.Risk Management and StrategyConsistent with overall ERM policies and practices, the Company’s cybersecurity program focuses on the following areas:●Vigilance: The Company operates cybersecurity threat functions 24/7 with the specific goal of identifying, attempting to prevent and mitigating cybersecurity threats and responding to cybersecurity incidents in accordance with our established incident response and recovery plans.●Systems Safeguards: The Company deploys systems safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through ongoing vulnerability assessments and cybersecurity threat intelligence.

3. REAL ESTATE OWNEDReal estate assets owned by the Company consist of income producing operating properties, properties under development, land held for future development, and held for disposition properties. As of December 31, 2025, the Company owned and consolidated 165 communities in 12 states plus the District of Columbia totaling 55,240 apartment homes. The following table summarizes the carrying amounts for our real estate owned (at cost) as of December 31, 2025 and 2024 (dollars in thousands):​​​​​​​​​ ​ ​ ​December 31, ​ ​ ​December 31, ​​2025​2024Land​$ 2,537,747​$ 2,521,363Depreciable property — held and used:​ ​​ ​Land improvements​ 277,996​ 271,702Building, improvements, and furniture, fixtures and equipment​ 13,577,262​ 13,189,796Real estate intangible assets​​ 21,995​​ 11,933Under development:​ ​​ ​Land and land improvements​ 13,468​ —Building, improvements, and furniture, fixtures and equipment​ 59,417​ —Real estate held for disposition:​ ​​ ​Land and land improvements​ —​ 44,645Building, improvements, and furniture, fixtures and equipment​ —​ 135,844Real estate intangible assets​​ —​​ 38,080Real estate owned​ 16,487,885​ 16,213,363Accumulated depreciation​ (7,374,546)​ (6,901,026)Real estate owned, net​$ 9,113,339​$ 9,312,337​AcquisitionsIn May 2025, the Company acquired the developer’s equity interest in a 478 apartment home operating community located in Philadelphia, Pennsylvania. The Company previously had three loans with the joint venture including a senior loan. In connection with the acquisition, the developer paid the Company $6.7 million, which consisted primarily of unpaid interest on the senior loan and reimbursement for certain costs previously advanced by the Company. (See Note 2, Significant Accounting Policies for more information). The Company increased its real estate assets owned by approximately $166.0 million, recorded approximately $10.1 million of real estate intangibles, recorded $6.4 million of in-place lease intangibles, and recognized a gain on consolidation of $0.3 million.In November 2025, the Company acquired a 406 apartment home operating community located in Woodbridge, Virginia for approximately $147.7 million. The Company increased its real estate assets owned by approximately $144.4 million and recorded $3.3 million of in-place lease intangibles.

9. STOCKHOLDERS’ EQUITYUDR has an effective registration statement that allows the Company to sell an undetermined number of debt and equity securities as defined in the prospectus. The Company’s authorized capital was 450.0 million shares of common stock and 50.0 million shares of preferred stock as of December 31, 2025.The following table presents the changes in the Company’s issued and outstanding shares of common and preferred stock for the years ended December 31, 2025, 2024 and 2023:​​​​​​​​​​Common​Preferred Stock​​Stock​Series E​Series FBalance at December 31, 2022 ​ ​ ​ 328,993 ​ ​ ​ 2,686 ​ ​ ​ 12,101Issuance/(forfeiture) of common and restricted shares, net 174 — —Repurchase of common shares​ (623)​ —​ —Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership 148 — —Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT Partnership​ 323 — —Forfeiture of Series F shares​ — — (233)Balance at December 31, 2023 329,015 2,686 11,868Issuance/(forfeiture) of common and restricted shares, net 48 — —Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership 170 — —Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT Partnership 1,533 — —Conversion of Series E Cumulative Convertible shares​ 93​ (85)​ —Forfeiture of Series F shares — — (1,444)Balance at December 31, 2024 330,859 2,601 10,424Issuance/(forfeiture) of common and restricted shares, net 291 — —Repurchase of common shares​ (3,260)​ —​ —Adjustment for conversion of noncontrolling interest of unitholders in the Operating Partnership 41 — —Adjustment for conversion of noncontrolling interest of unitholders in the DownREIT Partnership 342 — —Forfeiture of Series F shares — — (318)Balance at December 31, 2025 328,273 2,601 10,106​Common StockIn July 2021, 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 July 2017. As of December 31, 2025, 14.0 million shares were available for sale under the ATM program.