Multifamily real estate investment trust UDR, Inc. and private equity manager Apollo have agreed to form a $2.0 billion joint venture involving 19 apartment communities. Under the terms of the deal, Apollo-managed funds and affiliates will commit $1.34 billion in equity capital to acquire roughly a two-thirds stake in the new entity. UDR will hold the remaining one-third interest and consolidate the joint venture on its balance sheet.

The portfolio comprises 7,059 apartment homes with an average age of 39 years and average monthly revenue per home of $2,058. Upon completion, the transaction is expected to imply a capitalisation rate of around 6.0%. UDR will maintain daily operation and management responsibilities for the portfolio while earning an asset management fee. The agreement includes an option for UDR to buy back Apollo’s stake at a fixed return of 7.00-7.50% over a limited timeframe beginning five years after closing.

“We are delighted for the opportunity to partner with Apollo, one of the world’s leading financial institutions. We believe that our best-in-class operating platform positions UDR as a natural fit with Apollo’s scaled permanent capital base. Access to equity capital is one of UDR’s strategic priorities. With this transaction, we believe we will be positioned to take advantage of compelling opportunities in the marketplace, while improving the quality of our wholly-owned portfolio and strengthening our balance sheet, all in an accretive manner. Our shareholders will benefit not only from the flexibility to move assets in and out of our newly established joint venture, but also from the ability to realize outsized value creation over time,” said Tom Toomey, UDR’s Chairman, President, and CEO.

Apollo Partner Jamshid Ehsani said, “We are proud to serve as a capital partner to UDR. UDR is a recognized leader in the real estate industry with a track record of operational excellence and disciplined capital allocation. This transaction provides a cost-efficient capital solution tailored to UDR’s needs. Apollo’s investment further demonstrates the ability of our High Grade Capital Solutions business to partner with and support leading companies around the world.”

Net proceeds from the capital injection will be used to pay down existing debt, strengthen UDR’s balance sheet and acquire higher-growth real estate assets. The transaction is slated to close on October 29, 2026, subject to customary closing conditions and final documentation.

“UDR’s partnership with Apollo provides access to a new, low-cost permanent source of equity capital. We expect the transaction to be accretive to earnings and intend to deploy the proceeds into higher-growth assets and other general corporate purposes. Proceeds will also be utilized for debt reduction, strengthening the balance sheet at an opportune moment,” said Dave Bragg, UDR’s Chief Financial Officer.

Advising on the deal structure for UDR were Citigroup Global Markets Inc. and Wells Fargo Securities, LLC. Scotiabank provided financial advice to Apollo.