REITs: Upgrading SBRA to Buy, Downgrading UDR to Hold

Research evidence excerpt

REITs: Upgrading SBRA to Buy, Downgrading UDR to Hold

Truist Securities

Equity Research Report July 8, 2026

REAL ESTATE INVESTMENT

TRUSTS: Healthcare REITs REITs: Upgrading SBRA to Buy,

TRUSTS: Apartment REITs Downgrading UDR to Hold

What’s Incremental to Our View: We are upgrading SBRA to Buy from Hold, as we

believe it should produce high earnings growth over the next few years, particularly

relative to its discounted FFO and FAD multiples, while maintaining a strong balance Michael Lewis, CFA sheet. We continue to like the healthcare REIT sector in general. We are downgrading

212-319-5659

Michael.R.Lewis@truist.com UDR to Hold, primarily due to relatively low projected earnings growth through next year.

Multifamily REIT fundamentals have been slow to rebound despite the easing pace of

new supply. Within that group, we prefer the Buy-rated AVB/EQR combination, and we Kyle Bonci also have Buy ratings on CPT and MAA. 914-419-9491

Kyle.Bonci@truist.com

24 Page Document

Reasons for this report

✓ Rating Change

Upgrading SBRA to Buy: We project 7.8% avg annual NFFO growth from 2026-2031,

driven by strong SHOP SSNOI growth amid rising demand and limited supply for senior

housing (and skilled nursing), and accretive acquisition activity with potential upside

vs consensus and guidance. Net D/EBITDA is 5.0x with good liquidity and unsettled

forward equity. SBRA trades at a discount to peers at 12.9x 2026 FFO and 13.1x FAD,

and offers a well-covered 6.0% dividend yield.

Adjusting SBRA FFO Estimates: We are raising our 2026 FFO estimate to $1.55ps

from $1.54ps, versus management’s $1.49-$1.53ps guidance and the $1.54ps

consensus. We are lowering our 2027 FFO estimate to $1.64ps from $1.66ps, still

above the $1.61ps consensus.