NONCONTROLLING INTERESTS

12 Months Ended

Dec. 31, 2025

NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS

12. NONCONTROLLING INTERESTS

Redeemable Noncontrolling Interests in the Operating Partnership and DownREIT Partnership

Interests in the Operating Partnership and the DownREIT Partnership held by limited partners are represented by OP Units and DownREIT Units, respectively. The income is allocated to holders of OP Units/DownREIT Units based upon net income attributable to common stockholders and the weighted average number of OP Units/DownREIT Units outstanding to total common shares plus OP Units/DownREIT Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the partnership agreements of the Operating Partnership and the DownREIT Partnership.

Limited partners of the Operating Partnership and the DownREIT Partnership have the right to require such partnership to redeem all or a portion of the OP Units/DownREIT Units held by the limited partner at a redemption price equal to and in the form of the Cash Amount (as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable), provided that such OP Units/DownREIT Units have been outstanding for at least one year, subject to certain exceptions. UDR, as the general partner of the Operating Partnership and the DownREIT Partnership may, in its sole discretion, purchase the OP Units/DownREIT Units by paying to the limited partner either the Cash Amount or the REIT Share Amount (generally one share of common stock of the Company for each OP Unit/DownREIT Unit), as defined in the partnership agreement of the Operating Partnership or the DownREIT Partnership, as applicable. Accordingly, the Company records the OP Units/DownREIT Units outside of permanent equity and reports the OP Units/DownREIT Units at their redemption value using the Company’s stock price at each balance sheet date.

The following table sets forth redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership for the years ended December 31, 2025 and 2024 (dollars in thousands):

	Year Ended December 31,
	2025		2024
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership at beginning of year	$	1,017,355	$	961,087
Mark-to-market adjustment to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership		(134,688)		148,362
Conversion of OP Units/DownREIT Units to Common Stock or Cash		(25,257)		(73,196)
Net income/(loss) attributable to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership		25,965		6,246
Distributions to redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership		(41,161)		(52,250)
Redeemable Long-Term and Short-Term Incentive Plan Units		17,905		27,175
Allocation of other comprehensive income/(loss)		(153)		(69)
Redeemable noncontrolling interests in the Operating Partnership and DownREIT Partnership at end of year	$	859,966	$	1,017,355

Noncontrolling Interests

Noncontrolling interests represent interests of unrelated partners in certain consolidated affiliates, and are presented as part of equity on the Consolidated Balance Sheets since these interests are not redeemable. Net (income)/loss attributable to noncontrolling interests was less than $(0.1) million, less than $(0.1) million, and less than $(0.1) million during the years ended December 31, 2025, 2024, and 2023, respectively.