UDR Inc. updated its full-year 2019 earnings guidance to reflect the results of its $1.76 billion asset swap transaction with MetLife Investment Management.
Under the deal, UDR will acquire the roughly 50% interest it does not own in 10 UDR/MetLife Investment Management joint venture operating communities, one community under development and four development land sites, valued at $1.1 billion, or $557 million at UDR's share.
UDR will also sell to MetLife a roughly 50% interest in five communities under the venture valued at $645 million, or $323 million at UDR's share.
As a result of the transaction, the residential real estate investment trust's net cash outflow is expected to be roughly $105 million after accounting for the assumption of in-place debt totaling $540 million at fair market value.
UDR now expects funds from operations, as adjusted, for 2019 to come to between $1.90 and $1.93, increasing the midpoint of the previous guidance of between $1.89 and $1.92.
The S&P Global Market Intelligence consensus estimate for AFFO in 2019 is $1.91.
The transaction is expected to close in the fourth quarter, subject to closing price adjustments and customary closing conditions. The joint venture will own 13 communities comprising 2,837 homes across California, Boston, New York and Philadelphia following the closing.