> ## Content Index
> Fetch the complete content index at: https://www.bullished.co/llms.txt
> Use this file to discover other available public pages before exploring further.

# UDR Says Apollo's 7% Return Is 'A Target' — Defends $2 Billion Venture's Complexity
- URL: https://www.bullished.co/udr-says-apollos-7-return-is-a-target-defends-2-billion-ventures-complexity-f9fb3f6c/
- Published: 2026-11-03T18:31:53.000Z
- Updated: 2026-11-03T18:31:53.000Z
- Description: UDR's CFO said Apollo has no put rights and no guaranteed return in the $2 billion joint venture that closed last week.
- Author: Matteo Parrino
- Tags: Earnings, UDR, Industry: Real Estate

[UDR](https://www.bullished.co/tag/udr/), the apartment REIT, spent much of its Tuesday third-quarter earnings call defending its $2 billion Apollo joint venture, and Chief Financial Officer Dave Bragg said Apollo's 7.0% capped return is neither a guarantee nor a floor.

## No put rights, no floor

Pressed on what UDR owes Apollo if the assets falter, Bragg said Apollo has no put rights and cannot convert into UDR equity. The 7.0% return, he said, is "a target. It's not a guarantee. It's not a floor."

He added that there are "no forced redemption scenarios that are outside of UDR's control," and that Apollo cannot compel UDR to deliver a specific return. Cash flow is distributed pro rata, with no coupon or minimum distribution.

UDR holds an option, not an obligation, to buy back Apollo's two-thirds interest in the window from year five to year ten. Bragg said the capped return to Apollo was set at 7.0%, rising 30 basis points (0.3 percentage points) at year seven and again at year nine, for a maximum of 7.6%. He said buyers of multifamily today tend to underwrite 8% to 9% unlevered returns, and UDR keeps the upside above Apollo's cap.

## The deal's terms

UDR contributed 19 apartment communities with more than 7,000 homes, valued at a 6% cap rate. It received $1.34 billion for a two-thirds interest and kept one-third. It manages the portfolio for a fee Bragg put at about 1.3% of Apollo's $1.34 billion in equity.

S&P and Moody's gave the deal permanent equity treatment. About one-third of the proceeds went to debt reduction, and the rest will fund acquisitions and share buybacks. Since quarter end, UDR has repurchased about 5.2 million shares for $185 million, an average $35.48 each.

Chris Van Enns, a UDR senior officer, said the 67-33 cash flow split moves to about 70% for Apollo in year 10 if the call option is not exercised.

## Complexity questioned

An analyst from Cantor Fitzgerald noted UDR once unwound joint ventures to simplify its story. The analyst said Apollo was taking a disproportionate share of the call and asked how management weighed the added complexity.

CEO Tom Toomey called Apollo "a very good partner who thinks about real estate much like we do." He added: "I don't think we're done talking to them." Bragg said the top goal is value for existing shareholders and that UDR faces no restrictions on partnering with other firms.

UDR owns, operates and develops apartment communities across the U.S. Its market value was $11.5 billion in Tuesday trading.

Bragg said UDR will detail Apollo-related accretion after it deploys the proceeds, alongside 2027 guidance in February.

Learn

- [How To Read An Earnings Call Transcript: Start With Guidance, Then Find What's Missing →](https://www.bullished.co/learn/how-to-read-an-earnings-call/)  
How to read an earnings call transcript: check guidance first, look for dropped metrics, compare growth with last quarter, and watch hedged wording.

### More on UDR

- [UDR Raises 2026 Profit Outlook After Apollo Venture Brings In $1.34 Billion](https://www.bullished.co/udr-raises-2026-profit-outlook-after-apollo-venture-brings-in-1-34-billion-3335103e/)
- [UDR's Preliminary Quarterly Net Income Is $0.67 A Share, But Core Profit Only Hit The Top Of Guidance](https://www.bullished.co/udrs-preliminary-quarterly-net-income-is-0-67-a-share-but-core-profit-only-hit-the-top-of-bbd24498/)

[All UDR (UDR) coverage →](https://www.bullished.co/tag/udr/)