United Dominion Realty Trust (NYSE:UDR) owns and rents multi-family residential apartment communities. ^[1] The company's properties generally target the middle-market of apartment lessees.^[2][3]In 2010, UDR reported a total revenue of $632M and a net loss of $106.6M primarily due to increased depreciation and amortization costs. ^[1]

UDR is intricately tied to interest rate tides, which have several important effects: While the company competes for tenants with other apartment operators, it also competes on the relative attractiveness of owning a home versus renting an apartment. When home prices are high, renting becomes more attractive (and vice versa). Interest rates determine the attractiveness of mortgage financing. When interest rates are high, renting becomes more appealing as financing a mortgage becomes more expensive. It is also important to note that UDR operates as a real estate investment trust (REIT). As such, the company must distribute at least 90% of its cash flow to shareholders every year in the form of a dividend. When interest rates rise, so do demands for investment yields on dividends, which can depress a REIT's stock price.

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