UDR, Inc. and Apollo are creating a new long-term joint venture built around a large portfolio of apartment communities, adding a significant source of equity capital to UDR’s platform. Apollo plans to commit approximately $1.34 billion of equity for a two-thirds interest in the venture, which currently holds 19 multifamily properties totaling 7,059 units. The portfolio is valued at approximately $2.0 billion under the terms outlined by the parties.
UDR will continue to operate and manage the apartment portfolio once the transaction closes, and will earn an asset management fee for its role. The structure allows UDR to maintain operational control of the assets while sharing ownership with Apollo through the new joint venture entity.
An additional feature of the agreement gives UDR the option to repurchase Apollo’s interest in the joint venture. This option applies for a finite period beginning on the fifth anniversary of closing and is tied to an expected fixed return to Apollo in the 7.00% to 7.50% range. The mechanism provides UDR with a defined path to potentially re-consolidate ownership of the assets in the future, subject to market conditions and strategic priorities at that time.
UDR’s chairman, president and CEO, Tom Toomey, described access to equity capital as a core strategic focus for the apartment REIT. He indicated that the joint venture is intended to position the company to pursue attractive opportunities in the market while also upgrading the quality of its wholly owned portfolio. Toomey also noted that the arrangement is expected to strengthen UDR’s balance sheet in what he characterized as an accretive transaction.
From Apollo’s perspective, partner Jamshid Ehsani emphasized the firm’s role as a capital provider to UDR and highlighted UDR’s track record in operations and capital allocation. Ehsani characterized the joint venture as a cost-efficient capital solution tailored to UDR’s needs and pointed to the deal as an example of Apollo’s High Grade Capital Solutions business working with leading real estate companies globally.
The partners expect the transaction to close on October 29, subject to customary conditions. Citigroup Global Markets Inc. and Wells Fargo Securities, LLC served as structuring agents and financial advisors to UDR on the transaction, while Scotiabank acted as financial advisor to Apollo. The joint venture will initially encompass the existing 19-property, 7,059-unit multifamily portfolio referenced by the parties, with UDR remaining responsible for day-to-day management and oversight.
The arrangement underscores how institutional equity providers and public REITs are using partnership structures to recapitalize existing portfolios, align long-term interests, and potentially create future optionality around ownership and capital allocation.
