Mike Lacy
Senior Vice President, Operations at UDR
Thanks, Tom. Today I'll cover the following topics. Our first quarter same-store results, early second quarter 2024 trends, and how they factor into our full-year 2024 same-store growth guidance, an update on our various innovation initiatives, and expectations for operating trends across our regions.
To begin, first quarter year-over-year same-store revenue and NOI growth of 3.1% and 1.2% respectfully, and 0.4% sequential same-store revenue growth, were slightly above our expectations. These results were driven by, first, 0.8% blended lease rate growth, which resulted from nearly 4% renewal rate growth and new lease rate growth of negative 2.5%. New lease rate growth improved 260 basis points versus fourth-quarter results as concessions decreased by approximately half of a week on average.
Second, 35% annualized resident turnover was 400 basis points better than the prior year. The 630 basis point delta between new and renewal rate growth when combined with higher retention led to a favorable outcome. And third occupancy remained strong at 97.1%, supported by healthy traffic and leasing volume. New York, Washington, DC, San Francisco, and Seattle which collectively constitute 36% of our same-store pool were standouts, averaging nearly 98% during the quarter.
Shifting to expenses year-over-year same-store expense growth of 7.5% in the first quarter was in line with our expectations and inflated by a tough comp against the one-time $3.7 million payroll tax credit we recorded and disclosed in the first quarter of 2023. After excluding this credit, our year-over-year same-store expense growth would have been a more reasonable 4%.
Moving on strong core operating trends have continued into the second quarter. And every key revenue metric is exceeding our expectations through the first four months of the year. First, blended lease rate growth continued to accelerate from approximately 1% in March to roughly 2% in April, with concessions stabilizing at lower levels than the fourth quarter of 2023. All regions have demonstrated sequential blended lease rate growth improvement versus March. With our West Coast and Mid-Atlantic regions showing the most strength at approximately 3.5%.
Based on current trends, we expect May blended lease rate growth to demonstrate further sequential improvement. Second, resident retention continues to compare well against historical norms, due in part to our customer experience project, which I will touch on later. April retention is 400 basis points above prior-year levels, representing the twelfth consecutive month our year-over-year turnover has improved. Third, occupancy is holding firm in the high 96% range. Strong demand from continued job and wage growth has allowed us to simultaneously operate with high occupancy and push rental rate while maintaining rent income levels in the low 20% range.
And fourth other income continued to grow at approximately 10% in April, similar to what we achieved in the first quarter. As a reminder, other income constitutes roughly 10% of our total revenue. We remain pleased with the trajectory of our other income initiatives, such as the rollout and penetration of building-wide wifi, which contribute significantly to incremental same-store revenue growth.
Looking ahead, we reaffirmed our full-year 2024 same-store growth guidance in conjunction with our release, we are encouraged by the strength of macroeconomic indicators such as year-to-date job growth and wage growth. And the effect those demand drivers have had on our key performance indicators thus far. But we remain somewhat cautious given the volatile and elevated interest rate environment combined with peak supply deliveries yet to come.
Turning to regional trends, our coastal results have been above our expectations. While Sunbelt markets are in line and trending better. More specifically, the East Coast, which comprises approximately 40% of our NOI, was our strongest region in the first quarter. Boston, Washington, DC, and New York all performed well, with weighted average occupancy of 97.5%. Blended lease rate growth was nearly 2.5%, and same-store revenue growth was 4.25%. Which is slightly above the high end of our full-year expectations for the region. We expect this regional strength to continue.
The West Coast, which comprises approximately 35% of our NOI, has performed better than expected. At the beginning of the year, we anticipated San Francisco and Seattle would lag our West Coast markets. While revenue growth results in the first quarter show this to be true on an absolute basis. Both markets saw new lease rate growth improve by nearly 900 basis points compared to our fourth-quarter results.
The momentum in these markets has exceeded our expectations due to various employers more strictly enforcing return-to-office mandates as well as increased office leasing activity from technology and AI companies.
Lastly, our Sunbelt markets, which comprise roughly 25% of our NOI, continue to lag our Coastal markets due to elevated levels of new supply but have performed in line with our expectations. Better job growth in these markets appears to be bolstering demand and absorption. In similar to other regions, we have seen Sunbelt concessions stabilize, sequential blended lease rate growth accelerate and retention improve. We remain cautious on the Sunbelt in the near term but have been pleasantly surprised by its recent trajectory.
These regional dynamics reinforce the value of a diversified portfolio across markets and price points that allow us to pivot our short and long-term operating strategies to maximize revenue and NOI growth. Moving on, we continue to make progress on various innovation projects that will benefit same-store growth in 2024 and beyond. One example of this is our customer experience project. We have consistently outperformed the public and private markets on NOI and margins over time.
Due to the focus on our leading operating platform and innovative culture, which has historically driven all aspects of income growth, operating efficiencies, and contained our cost structure. We are now turning to the next phase of our platform, which focuses on customer experience and retention. Through our proprietary data hub and the millions of data points we have accumulated over the last seven years, we have found that 50% of resident turnover is controllable. And that those residents with positive experiences and scores renew at a rate 20% higher than those with bad experiences.
Knowing this, we see an opportunity to improve retention by 5% to 10% versus the industry average of 50%. Resulting in a $15 million to $30 million incremental NOI opportunity. To capture this upside, we now track and score every interaction with our residents. This has allowed us to make a transformational shift in the way we do business with a move from being transactional in nature to a focus on the lifetime value of our customer. We are equipping our UDR team members with tools, training and the ability to prevent or rectify bad customer experiences, which we believe over the coming two to three years will material improve the revenue [Phonetic] experience and our relative turnover.
This should positively impact pricing, occupancy, other income, expenses, and margin as well. My thanks go out to the UDR associates nationwide that remain committed to delivering on our strategic priorities. You rightfully deserve credit for embracing our innovative culture and improving how we conduct our business.
I will now turn over the call to Joe.