UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to ___________
Commission File Number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | identification number) |
| (Address of Principal Executive 0ffices) | (Zip Code) | |
| Registrant’s telephone number, including area code |
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) | Name of exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| ☒ | Accelerated filer | ☐ | |
| Non-accelerated filer | ☐ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | Outstanding Common Shares as of August 1, 2025 | |
| Common Stock, $ par value per share |
UMH PROPERTIES, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2025
Table of Contents
| PART I - FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | |
| Consolidated Balance Sheets | 3 | |
| Consolidated Statements of Income (Loss) | 5 | |
| Consolidated Statements of Shareholders’ Equity | 6 | |
| Consolidated Statements of Cash Flows | 8 | |
| Notes To Consolidated Financial Statements | 9 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 |
| Item 4. | Controls and Procedures | 41 |
| PART II - OTHER INFORMATION | 42 | |
| Item 1. | Legal Proceedings | 42 |
| Item 1A. | Risk Factors | 42 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 42 |
| Item 3. | Defaults Upon Senior Securities | 42 |
| Item 4. | Mine Safety Disclosures | 42 |
| Item 5. | Other Information | 42 |
| Item 6. | Exhibits | 42 |
| SIGNATURES | 43 | |
| 2 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2025 AND DECEMBER 31, 2024
(in thousands except per share amounts)
| June 30, 2025 (Unaudited) | December 31, 2024 | |||||||
| - ASSETS - | ||||||||
| Investment Property and Equipment | ||||||||
| Land | $ | $ | ||||||
| Site and Land Improvements | ||||||||
| Buildings and Improvements | ||||||||
| Rental Homes and Accessories | ||||||||
| Total Investment Property | ||||||||
| Equipment and Vehicles | ||||||||
| Total Investment Property and Equipment | ||||||||
| Accumulated Depreciation | ( | ) | ( | ) | ||||
| Net Investment Property and Equipment | ||||||||
| Other Assets | ||||||||
| Cash and Cash Equivalents | ||||||||
| Marketable Securities at Fair Value | ||||||||
| Inventory of Manufactured Homes | ||||||||
| Notes and Other Receivables, net | ||||||||
| Prepaid Expenses and Other Assets | ||||||||
| Land Development Costs | ||||||||
| Investment in Joint Ventures | ||||||||
| Total Other Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
See Accompanying Notes to Consolidated Financial Statements
| 3 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – CONTINUED
AS OF JUNE 30, 2025 AND DECEMBER 31, 2024
(in thousands except per share amounts)
| June 30, 2025 (Unaudited) | December 31, 2024 | |||||||
| - LIABILITIES AND SHAREHOLDERS’ EQUITY - | ||||||||
| LIABILITIES: | ||||||||
| Mortgages Payable, net of unamortized debt issuance costs | $ | $ | ||||||
| Other Liabilities: | ||||||||
| Accounts Payable | ||||||||
| Loans Payable, net of unamortized debt issuance costs | ||||||||
| Series A Bonds, net of unamortized debt issuance costs | ||||||||
| Accrued Liabilities and Deposits | ||||||||
| Tenant Security Deposits | ||||||||
| Total Other Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity: | ||||||||
| Series D – | ||||||||
| Common Stock - $ par value per share, and shares authorized as of June 30, 2025 and December 31, 2024, respectively; and shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | ||||||||
| Excess Stock - $ par value per share, shares authorized; shares issued or outstanding as of June 30, 2025 and December 31, 2024 | - | - | ||||||
| Additional Paid-In Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total UMH Properties, Inc. Shareholders’ Equity | ||||||||
| Non-Controlling Interest in Consolidated Subsidiaries | ||||||||
| Total Shareholders’ Equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
See Accompanying Notes to Consolidated Financial Statements
| 4 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2025 AND 2024
(in thousands except per share amounts)
| THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| INCOME: | ||||||||||||||||
| Rental and Related Income | $ | $ | $ | $ | ||||||||||||
| Sales of Manufactured Homes | ||||||||||||||||
| Total Income | ||||||||||||||||
| EXPENSES: | ||||||||||||||||
| Community Operating Expenses | ||||||||||||||||
| Cost of Sales of Manufactured Homes | ||||||||||||||||
| Selling Expenses | ||||||||||||||||
| General and Administrative Expenses | ||||||||||||||||
| Depreciation Expense | ||||||||||||||||
| Total Expenses | ||||||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Interest Income | ||||||||||||||||
| Dividend Income | ||||||||||||||||
| Loss on Sales of Marketable Securities, net | - | ( | ) | - | ( | ) | ||||||||||
| Increase (Decrease) in Fair Value of Marketable Securities | ( | ) | ( | ) | ( | ) | ||||||||||
| Other Income | ||||||||||||||||
| Loss on Investment in Joint Ventures | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest Expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income before Loss on Sales of Investment Property and Equipment | ||||||||||||||||
| Loss on Sales of Investment Property and Equipment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income | ||||||||||||||||
| Preferred Dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss Attributable to Non-Controlling Interest | ||||||||||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | $ | $ | $ | ( | ) | ||||||||||
| Net Income (Loss) Attributable to Common Shareholders Per Share – Basic and Diluted | $ | $ | $ | $ | ) | |||||||||||
| Weighted Average Common Shares Outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See Accompanying Notes to Consolidated Financial Statements
| 5 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2025 AND 2024
(in thousands)
| Common Stock | Preferred | |||||||||||
| Issued and Outstanding | Stock | |||||||||||
| Number | Amount | Series D | ||||||||||
| Balance December 31, 2024 | $ | $ | ||||||||||
| Common Stock Issued with the DRIP | - | |||||||||||
| Common Stock Issued through Restricted Stock Awards | - | |||||||||||
| Common Stock Issued through Stock Options | - | |||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | |||||||||||
| Preferred Stock Issued in connection with At-The-Market Offerings, net | -0- | - | ||||||||||
| Distributions | -0- | - | - | |||||||||
| Stock Compensation | -0- | - | - | |||||||||
| Net Income (Loss) | -0- | - | - | |||||||||
| Balance March 31, 2025 | ||||||||||||
| Common Stock Issued with the DRIP | - | |||||||||||
| Common Stock Issued through Restricted Stock Awards | - | |||||||||||
| Common Stock Issued through Stock Options | - | |||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | |||||||||||
| Distributions | -0- | - | - | |||||||||
| Stock Compensation Expense | -0- | - | - | |||||||||
| Net Income (Loss) | -0- | - | - | |||||||||
| Balance June 30, 2025 | $ | $ | ||||||||||
| Balance December 31, 2023 | $ | $ | ||||||||||
| Common Stock Issued with the DRIP | - | |||||||||||
| Common Stock Issued through Restricted Stock Awards | - | |||||||||||
| Common Stock Issued through Stock Options | - | |||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | |||||||||||
| Preferred Stock Issued in connection with At-The-Market Offerings, net | -0- | - | ||||||||||
| Distributions | -0- | - | - | |||||||||
| Stock Compensation | -0- | - | - | |||||||||
| Net Loss | -0- | - | - | |||||||||
| Balance March 31, 2024 | ||||||||||||
| Common Stock Issued with the DRIP | - | |||||||||||
| Common Stock Issued through Restricted Stock Awards | - | |||||||||||
| Common Stock Issued through Stock Options | - | |||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | |||||||||||
| Preferred Stock Issued in connection with At-The-Market Offerings, net | -0- | - | ||||||||||
| Distributions | -0- | - | - | |||||||||
| Stock Compensation Expense | -0- | - | - | |||||||||
| Net Income (Loss) | -0- | - | - | |||||||||
| Balance June 30, 2024 | $ | $ | ||||||||||
See Accompanying Notes to Consolidated Financial Statements
| 6 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2025 AND 2024
(in thousands)
| Additional Paid-In | Undistributed Income (Accumulated | Non-Controlling Interest in Consolidated | Total Shareholders’ | |||||||||||||
| Capital | Deficit) | Subsidiary | Equity | |||||||||||||
| Balance December 31, 2024 | $ | $ | ( | ) | $ | $ | ||||||||||
| Common Stock Issued with the DRIP | - | - | ||||||||||||||
| Common Stock Issued through Restricted Stock Awards | ( | ) | - | - | - | |||||||||||
| Common Stock Issued through Stock Options | - | - | ||||||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | - | ||||||||||||||
| Preferred Stock Issued in connection with At-The-Market Offerings, net | ( | ) | - | - | ||||||||||||
| Distributions | ( | ) | ( | ) | - | ( | ) | |||||||||
| Stock Compensation Expense | - | - | ||||||||||||||
| Net Income (Loss) | - | ( | ) | |||||||||||||
| Balance March 31, 2025 | ( | ) | ||||||||||||||
| Common Stock Issued with the DRIP | - | - | ||||||||||||||
| Common Stock Issued through Restricted Stock Awards | ( | ) | - | - | - | |||||||||||
| Common Stock Issued through Stock Options | - | - | ||||||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | - | ||||||||||||||
| Distributions | ( | ) | ( | ) | - | ( | ) | |||||||||
| Stock Compensation Expense | - | - | ||||||||||||||
| Net Income (Loss) | - | ( | ) | |||||||||||||
| Balance June 30, 2025 | $ | $ | ( | ) | $ | $ | ||||||||||
| Balance December 31, 2023 | $ | $ | ( | ) | $ | $ | ||||||||||
| Common Stock Issued with the DRIP | - | - | ||||||||||||||
| Common Stock Issued through Restricted Stock Awards | ( | ) | - | - | - | |||||||||||
| Common Stock Issued through Stock Options | - | - | ||||||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | - | ||||||||||||||
| Preferred Stock Issued in connection with At-The-Market Offerings, net | ( | ) | - | - | ||||||||||||
| Distributions | ( | ) | - | ( | ) | |||||||||||
| Stock Compensation Expense | - | - | ||||||||||||||
| Net Loss | - | ( | ) | ( | ) | ( | ) | |||||||||
| Balance March 31, 2024 | ( | ) | ||||||||||||||
| Common Stock Issued with the DRIP | - | - | ||||||||||||||
| Common Stock Issued through Restricted Stock Awards | ( | ) | - | - | - | |||||||||||
| Common Stock Issued through Stock Options | - | - | ||||||||||||||
| Common Stock Issued in connection with At-The-Market Offerings, net | - | - | ||||||||||||||
| Preferred Stock Issued in connection with At-The-Market Offerings, net | ( | ) | - | - | ||||||||||||
| Distributions | ( | ) | ( | ) | - | ( | ) | |||||||||
| Stock Compensation Expense | - | - | ||||||||||||||
| Net Income (Loss) | - | ( | ) | |||||||||||||
| Balance June 30, 2024 | $ | $ | ( | ) | $ | $ | ||||||||||
See Accompanying Notes to Consolidated Financial Statements
| 7 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30, 2025 AND 2024
(in thousands)
| SIX MONTHS ENDED | ||||||||
| June 30, 2025 | June 30, 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | $ | ||||||
| Non-Cash items included in Net Income: | ||||||||
| Depreciation | ||||||||
| Amortization of Financing Costs | ||||||||
| Stock Compensation Expense | ||||||||
| Provision for Uncollectible Notes and Other Receivables | ||||||||
| Loss on Sales of Marketable Securities, net | - | |||||||
| Decrease in Fair Value of Marketable Securities | ||||||||
| Loss on Sales of Investment Property and Equipment | ||||||||
| Loss on Investment in Joint Ventures | ||||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Inventory of Manufactured Homes | ( | ) | ||||||
| Notes and Other Receivables, net of notes acquired with acquisitions | ( | ) | ( | ) | ||||
| Prepaid Expenses and Other Assets | ( | ) | ||||||
| Accounts Payable | ( | ) | ||||||
| Accrued Liabilities and Deposits | ( | ) | ( | ) | ||||
| Tenant Security Deposits | ||||||||
| Net Cash Provided by Operating Activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of Manufactured Home Communities | ( | ) | - | |||||
| Purchase of Investment Property and Equipment | ( | ) | ( | ) | ||||
| Proceeds from Sales of Investment Property and Equipment | ||||||||
| Additions to Land Development Costs | ( | ) | ( | ) | ||||
| Purchase of Marketable Securities through automatic reinvestments | ( | ) | ( | ) | ||||
| Proceeds from Sales of Marketable Securities | - | |||||||
| Investment in Joint Ventures | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from Mortgages, net of mortgages assumed | - | |||||||
| Net Payments from Short-Term Borrowings | ( | ) | ( | ) | ||||
| Principal Payments of Mortgages and Loans | ( | ) | ( | ) | ||||
| Financing Costs on Debt | ( | ) | ( | ) | ||||
| Proceeds from At-The-Market Preferred Equity Program, net of offering costs | ||||||||
| Proceeds from At-The-Market Common Equity Program, net of offering costs | ||||||||
| Proceeds from Issuance of Common Stock in the DRIP, net of dividend reinvestments | ||||||||
| Proceeds from Exercise of Stock Options | ||||||||
| Preferred Dividends Paid | ( | ) | ( | ) | ||||
| Common Dividends Paid, net of dividend reinvestments | ( | ) | ( | ) | ||||
| Net Cash Provided by Financing Activities | ||||||||
| Net Decrease in Cash, Cash Equivalents and Restricted Cash | ( | ) | ( | ) | ||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Period | ||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | $ | ||||||
See Accompanying Notes to Consolidated Financial Statements
| 8 |
UMH PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025 (UNAUDITED)
NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES
UMH Properties, Inc., a
Maryland corporation, and its subsidiaries (“we”, “our”, “us” or “the Company”)
operates as a real estate investment trust (“REIT”) deriving its income primarily from real estate rental operations. As
of June 30, 2025, the Company operated
The Company, through its
wholly-owned taxable subsidiary, UMH Sales and Finance, Inc. (“S&F”), sells manufactured homes to residents and prospective
residents in our communities. Inherent in the operations of manufactured home communities are site vacancies. S&F was established
to enhance the value of the communities by helping to fill these vacancies through the sales of homes. The Company holds a
The primary focus of our business is the operation of our manufactured home communities – leasing of manufactured homesites and manufactured homes in our communities. The sale of homes is integrated with our leasing of these manufactured homes and homesites. Management views the Company’s business as a single segment based on its method of internal reporting in addition to its allocation of capital and resources. Capital and resources are allocated to further the goal of maintaining and increasing occupancy and net operating income in our communities. Our chief executive officer, with the assistance of our chief operating officer, is the principal decision-maker regarding allocation of resources. These decisions are based on the occupancy of the communities and community net operating income. Sales of homes are necessary to maintain and increase occupancy at our communities. We primarily purchase homes to fill vacant sites in the communities. These homes are either rented or sold, based on the needs of the potential residents. Although certain components of the sales operation are tracked (sales, cost of sales, etc.), separate discrete financial information for the entire sales operation is not available. Most of the personnel costs, office expenses, maintenance and other expenses are borne by the community and cannot be allocated. The components of the sales operation play no material role in decisions about resources to be allocated. Resources are allocated to maintaining and increasing occupancy and net operating income in our communities.
| 9 |
The Company has elected to be taxed as a REIT under Sections 856-860 of the Internal Revenue Code (the “Code”) and intends to maintain its qualification as a REIT in the future. As a qualified REIT, with limited exceptions, the Company will not be taxed under federal and certain state income tax laws at the corporate level on taxable income that it distributes to its shareholders. For special tax provisions applicable to REITs, refer to Sections 856-860 of the Code. The Company is subject to franchise taxes in some of the states in which the Company owns property.
The interim consolidated financial statements furnished herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024.
Use of Estimates
In preparing the consolidated financial statements in accordance with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as contingent assets and liabilities as of the dates of the consolidated balance sheets and revenue and expenses for the years then ended. These estimates and assumptions include the allowance for doubtful accounts, valuation of inventory, depreciation, valuation of securities, accounting for land development, reserves and accruals, and stock compensation expense. Actual results could differ from these estimates and assumptions.
Reclassifications
Certain amounts in the financial statements for the prior periods have been reclassified to conform to the statement presentation for the current periods.
Investment in Joint Ventures
The Company accounts for its investment in entities formed under its joint ventures with Nuveen Real Estate under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures. The Company has the ability to exercise significant influence, but not control, over the operating and financial decisions of the joint venture entities. Under the equity method of accounting, the cost of an investment is adjusted for the Company’s share of the equity in net income or loss from the date of acquisition, reduced by distributions received and increased by contributions made. The income or loss is allocated in accordance with the provisions of the operating agreement. The carrying value of the investment in the joint ventures are reviewed for other than temporary impairment whenever events or changes in circumstances indicate a possible impairment. Financial condition, operational performance, and other economic trends are among the factors that are considered in evaluation of the existence of impairment indicators (See Note 5).
| 10 |
Leases
We account for our leases under ASC 842, “Leases.” Our primary source of revenue is generated from lease agreements for our sites and homes, where we are the lessor. These leases are generally for one-year or month-to-month terms and renewable by mutual agreement from us and the resident, or in some cases, as provided by jurisdictional statute.
We are the lessee in other
arrangements, primarily for our corporate office and a ground lease at one community. As of June 30, 2025 and December 31, 2024, the
right-of-use assets and corresponding lease liabilities of $
Future minimum lease payments under these leases over the remaining lease terms are as follows (in thousands):
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total Lease Payments | $ |
The weighted average remaining
lease term for these leases, including renewal options, is
Restricted Cash
The Company’s restricted cash consists of amounts primarily held in deposit for tax, insurance and repair escrows held by lenders in accordance with certain debt agreements. Restricted cash is included in prepaid expenses and other assets on the consolidated balance sheets.
| 11 |
The following table presents beginning of period and end of period balances of cash, cash equivalents and restricted cash for the periods shown (in thousands):
| 6/30/25 | 12/31/24 | 6/30/24 | 12/31/23 | |||||||||||||
| Cash and Cash Equivalents | $ | $ | $ | $ | ||||||||||||
| Restricted Cash | ||||||||||||||||
| Cash, Cash Equivalents And Restricted Cash | $ | $ | $ | $ | ||||||||||||
Revenue Recognition
We account for our Sales of Manufactured Homes in accordance with Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)” (ASC 606). For transactions in the scope of ASC 606, we recognize revenue when control of goods or services transfers to the customer, in the amount that we expect to receive for the transfer of goods or provision of services.
Rental and related income is generated primarily from lease agreements for our sites and homes. The lease component of these agreements is accounted for under ASC 842 “Leases.” The non-lease components of our lease agreements consist primarily of utility reimbursements, which are accounted for with the site lease as a single lease under ASC 842.
Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606, at the time of closing when control of the home transfers to the customer. After closing of the sale transaction, we generally do not have any remaining performance obligations.
Interest income is primarily from notes receivables for the previous sales of manufactured homes. Interest income on these receivables is accrued based on the unpaid principal balances of the underlying loans on a level yield basis over the life of the loans.
Dividend income and gain (loss) on sales of marketable securities are from our investments in marketable securities and are presented separately but are not in the scope of ASC 606.
Other income primarily consists of brokerage commissions for arranging for the sale of a home by a third party and other miscellaneous income. This income is recognized when the transactions are completed and our performance obligations have been fulfilled.
Notes Receivables
We account for our receivables
in accordance with ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments.” ASU 2016-13 requires that entities use a forward looking “expected loss” model that generally will result
in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience,
current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. As of June 30, 2025
and December 31, 2024, the Company had notes receivable of $
| 12 |
Recent Accounting Pronouncements
On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2024-03 - Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities (PBEs). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements. Early adoption is permitted. The Company anticipates making the required disclosures beginning with its Form 10-K for the year ending December 31, 2027.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
Basic Net Income (Loss) per Share is calculated by dividing Net Income (Loss) by the weighted average shares outstanding for the period. Diluted Net Income (Loss) per Share is calculated by dividing Net Income (Loss) less Income (Loss) Attributable to Non-Controlling Interest by the weighted average number of common shares outstanding, and when dilutive, the potential net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. In periods with a net loss, the diluted loss per share equals the basic loss per share as all common stock equivalents are excluded from the per share calculation because they are anti-dilutive.
For the three and six months ended June 30, 2025, common stock equivalents resulting from employee stock options to purchase million shares of common stock amounted to shares and shares, respectively, which were included in the computation of Diluted Net Income per Share. For the three months ended June 30, 2024, common stock equivalents resulting from employee stock options to purchase million shares of common stock amounted to shares, which were included in the computation of Diluted Net Income per Share. For the six months ended June 30, 2024, common stock equivalents of shares were excluded from the computation of Diluted Net Loss per Share as their effect would be anti-dilutive.
| 13 |
NOTE 3 – INVESTMENT PROPERTY AND EQUIPMENT
Acquisitions
On March 24, 2025, the Company
acquired two age-restricted communities, Cedar Grove and Maplewood Village, located in Mantua, New Jersey, for approximately $
The Company has evaluated
this acquisition and has determined that it should be accounted for as an acquisition of assets. As such, we have allocated the total
cash consideration, including transaction costs of approximately $
| At Acquisition Date | ||||
| Assets Acquired: | ||||
| Land | $ | |||
| Depreciable Property | ||||
| Total Assets Acquired | $ | |||
See Note 14 for the Unaudited Pro Forma Financial Information relating to this acquisition.
Subsequent to quarter end,
on July 2, 2025, the Company acquired two communities, Conowingo Court and Maybelle Manor, located in Conowingo, Maryland, for
approximately $
NOTE 4 – MARKETABLE SECURITIES
The Company’s marketable
securities consist primarily of marketable common and preferred stock of other REITs with a fair value of $
As of June 30, 2025, the
Company had total net unrealized losses of $
| 14 |
NOTE 5 – INVESTMENT IN JOINT VENTURES
In December 2021, the Company
and Nuveen Real Estate (“Nuveen” or “Nuveen Real Estate”), established a joint venture for the purpose of acquiring
manufactured housing and/or recreational vehicle communities that are under development and/or newly developed and meet certain other
investment guidelines. The terms of the initial joint venture entity were set forth in a Limited Liability Company Agreement dated
as of December 8, 2021 (the “LLC Agreement”) entered into between a wholly owned subsidiary of the Company and an affiliate
of Nuveen. The LLC Agreement provided for the parties to initially fund up to $
Under the terms of the LLC
Agreement, after December 8, 2024 or, if later, the second anniversary of the acquisition and placing in service of a manufactured housing
or recreational vehicle community, Nuveen will have a right to initiate the sale of one or more of the communities owned by the joint
venture entity. If Nuveen elects to initiate such a sale process, the Company may exercise a right of first refusal to acquire
Nuveen’s interest in the community or communities to be sold for a purchase price corresponding to the greater of the appraised
value of such communities or the amount required to provide a
The LLC Agreement between
the Company and Nuveen provided that until the capital contributions to the joint venture are fully funded or the joint venture is terminated,
the joint venture will be the exclusive vehicle for the Company to acquire any manufactured housing communities and/or recreational vehicle
communities that meet the joint venture’s investment guidelines. These guidelines called for the joint venture to acquire
manufactured housing and recreational vehicle communities that have been developed within the previous
| 15 |
The LLC Agreement provides
that Nuveen will have the right to remove and replace the Company as managing member of the joint venture and manager of the joint venture’s
properties if the Company breaches certain obligations or certain events occur. Upon such removal, Nuveen may elect to buy out
the Company’s interest in the joint venture at
The LLC Agreement requires the Company to offer Nuveen the opportunity to have the joint venture acquire a manufactured housing community or recreational vehicle community that meets the investment guidelines. If Nuveen decides not to acquire the community through the joint venture, however, the Company is free to purchase the community on its own outside of the joint venture.
In December 2021, the joint
venture entity closed on the acquisition of Sebring Square, a newly developed all-age, manufactured home community located in Sebring,
Florida, for a total purchase price of $
During the time since the
joint venture with Nuveen was first established in 2021, the Company and Nuveen have continued to seek opportunities to acquire additional
manufactured housing and/or recreational vehicle communities that are under development and/or newly developed and meet certain other
investment guidelines. During 2022, the Company and Nuveen informally agreed that any future acquisitions would be made by one or more
new joint venture entities to be formed for that purpose and that the original joint venture entity formed in December 2021 will not
consummate additional acquisitions but will maintain its existing property portfolio, consisting of the Sebring Square and Rum Runner
communities. The Company and Nuveen also informally agreed that, unless otherwise determined in connection with any specific future investment,
capital for any such new joint venture entity would continue to be funded
| 16 |
In November 2023, the
Company expanded its relationship with Nuveen Real Estate and formed a new joint venture entity with Nuveen. The new joint venture
entity was established to, directly or through one or more subsidiaries, identify, source, originate, acquire, hold, operate, sell,
lease, mortgage, maintain, own, manage, finance, refinance, reposition, improve, renovate, develop, redevelop, pledge, hedge,
exchange, and otherwise deal in and with the rental of manufactured housing and/or recreational vehicle communities that meet other
investment guidelines. The terms of the new joint venture entity are set forth in a Limited Liability Company Agreement dated as of
November 29, 2023 (the “Second LLC Agreement”) entered into between a wholly owned subsidiary of the Company and an
affiliate of Nuveen. The Company serves as managing member of this new joint venture entity and is responsible for day-to-day
operations of the joint venture entity and management of its properties, subject to obtaining approval of Nuveen Real Estate for
major decisions (including investments, dispositions, financings, major capital expenditures and annual budgets). The Company
receives property management oversight, development and other fees from the joint
venture entity.
References in this report to the Company’s joint venture relationships with Nuveen are intended to refer to its ongoing relationships with Nuveen.
The Company accounts for its joint ventures with Nuveen Real Estate under the equity method of accounting in accordance with ASC 323, “Investments – Equity Method and Joint Ventures”.
NOTE 6 – OPPORTUNITY ZONE FUND
In July 2022, the Company
invested $
| 17 |
NOTE 7 – LOANS AND MORTGAGES PAYABLE AND OTHER LONG-TERM INDEBTEDNESS
Loans Payable
The following is a summary of our loans payable as of June 30, 2025 and December 31, 2024 (in thousands):
| 6/30/2025 | 12/31/2024 | |||||||||||||||||
| Amount | Rate | Amount | Rate | |||||||||||||||
| Margin Loan | (1) | $ | - | N/A | $ | - | N/A | |||||||||||
| Unsecured revolving credit facility | (2) | - | N/A | - | N/A | |||||||||||||
| Floorplan inventory financing | (3) | % | % | |||||||||||||||
| FirstBank rental home loan | (4) | % | % | |||||||||||||||
| FirstBank rental home line of credit | (5) | - | N/A | - | N/A | |||||||||||||
| Triad rental home loan | (6) | - | N/A | - | N/A | |||||||||||||
| OceanFirst notes receivable financing | (7) | - | N/A | - | N/A | |||||||||||||
| Total Loans Payable | % | % | ||||||||||||||||
| Unamortized debt issuance costs | ( | ) | ( | ) | ||||||||||||||
| Loans Payable, net of unamortized debt issuance costs | $ | % | $ | % | ||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) |
| (5) |
| (6) |
| (7) |
| 18 |
Series A Bonds
On
February 6, 2022, the Company issued $
Under the Deed of Trust, the Company has the right to redeem the 2027 Bonds, in whole or in part, at any time on or after 60 days from February 9, 2022, the date on which the 2027 Bonds were listed for trading on the Tel Aviv Stock Exchange (the “TASE”). Any such voluntary early redemption by the Company will require payment of the applicable early redemption amount calculated in accordance with the Deed of Trust. The Company does not intend to redeem the 2027 Bonds. Upon the occurrence of an event of default or certain other events, including a delisting of the 2027 Bonds by the TASE, the Company may be required to effect an early repayment or redemption of all or a portion of the 2027 Bonds at their par value plus accrued and unpaid interest. The Deed of Trust permits the Company, subject to certain conditions, to issue additional 2027 Bonds without obtaining approval of the holders of the 2027 Bonds.
The 2027 Bonds are general unsecured obligations of the Company and rank equal in right of payment with all of the Company’s existing and future unsecured indebtedness. The Deed of Trust includes certain customary covenants, including financial covenants requiring the Company to maintain certain ratios of debt to net operating income, to shareholders’ equity and to earnings, and customary events of default. The 2027 Bonds were offered solely to investors outside the United States and were not offered to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the Securities Act of 1933).
Series B Bonds
Subsequent to quarter end, on July 22, 2025, the Company
issued $
| 19 |
Mortgages Payable
The following is a summary of our mortgages payable as of June 30, 2025 and December 31, 2024 (in thousands):
| 6/30/2025 | 12/31/2024 | |||||||||||||||
| Amount | Weighted Average Rate | Amount | Weighted Average Rate | |||||||||||||
| Fixed rate mortgages | $ | % | $ | % | ||||||||||||
| Unamortized debt issuance costs | ( | ) | ( | ) | ||||||||||||
| Mortgages Payable, net of unamortized debt issuance costs | $ | % | $ | % | ||||||||||||
On February 28, 2025, the
Company paid off one mortgage totaling approximately $
On May 15, 2025, the
Company completed the addition of ten communities to its Fannie Mae credit facility through Wells Fargo Bank, N.A., for total
proceeds of approximately $
As of June 30, 2025 and December
31, 2024, the weighted average loan maturity of mortgages payable was
NOTE 8 – SHAREHOLDERS’ EQUITY
Common Stock
On April 1, 2025, the Company
announced a $
On June 16, 2025, the Company
paid total cash dividends of $
During the six months ended
June 30, 2025, the Company received, including dividends reinvested of $
| 20 |
On January 7, 2025, the Board
of Directors reaffirmed our Common Stock Repurchase Program (the “Repurchase Program”) that authorizes us to repurchase up
to $
Common Stock At-The-Market Sales Programs
On September 16, 2024, the
Company terminated the use of its then-existing at-the-market sale program for its Common Stock and entered into a new equity distribution
agreement (“September 2024 Common ATM Program”) with BMO Capital Markets Corp., J.P. Morgan Securities LLC, Wells Fargo
Securities, LLC, B. Riley Securities, Inc., Compass Point Research & Trading, LLC, and Janney Montgomery Scott LLC, as Distribution
Agents under which the Company may offer and sell shares of the Company’s common stock, $ par value per share, having an aggregate
sales price of up to $
As of June 30, 2025, $
6.375% Series D Cumulative Redeemable Preferred Stock
On June 16, 2025, the Company
paid $
On July 1, 2025, the Company
declared a dividend of $ per share for the period from June 1, 2025 through August 31, 2025 to be paid on
| 21 |
Preferred Stock At-The-Market Sales Program
On January 10, 2023, the
Company entered into an At Market Issuance Sales Agreement (“2023 Preferred ATM Program”) with B. Riley Securities, Inc.
(“B. Riley”), as distribution agent. Under the 2023 Preferred ATM Program, the Company was permitted to offer and sell shares
of the Company’s
On March 5, 2025, the
Company terminated the use of the 2023 Preferred ATM Program and entered into an at market issuance sales agreement (the “2025
Preferred ATM Program”) with B. Riley, as distribution agent, under which the Company may offer and sell shares of the
Company’s Series D Preferred Stock having an aggregate sales price of up to $
As of June 30, 2025, the Company has t issued or sold any shares under the 2025 Preferred ATM Program.
| 22 |
In conjunction with the 2025
Preferred ATM Program, on March 5, 2025, the Company filed with the State Department of Assessments and Taxation of the State of Maryland
(the “SDAT”) an amendment (the “Articles of Amendment”) to the Articles of Incorporation of the Company to increase
the Company’s authorized shares of common stock, par value $ per share (“Common Stock”), by shares.
Also on March 5, 2025, the Company filed with the SDAT Articles Supplementary (the “Articles Supplementary”) reclassifying
and designating shares of the Company’s Common Stock as shares of Series D Preferred Stock. After giving effect to the
Articles of Amendment and the Articles Supplementary, the authorized capital stock of the Company consists of
The Company accounts for awards of stock, stock options and restricted stock in accordance with ASC 718-10, “Compensation-Stock Compensation.” ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). The compensation cost for stock option grants is determined using option pricing models, intended to estimate the fair value of the awards at the grant date less estimated forfeitures. The compensation expense for restricted stock is recognized based on the fair value of the restricted stock awards less estimated forfeitures. The fair value of restricted stock awards is equal to the fair value of the Company’s stock on the grant date. Compensation costs of $ and $ million, of which $ and $ million were capitalized, have been recognized for the three and six months ended June 30, 2025, respectively. Compensation costs of $ and $ million, of which $ and $million were capitalized, have been recognized for the three and six months ended June 30, 2024, respectively.
On January 7, 2025, the Company
awarded a total of shares of restricted stock to six employees under the Company’s 2023 Equity Incentive Award Plan (the
“2023 Plan”). The grant date fair value of these restricted stock grants was $
On January 7, 2025, the Company awarded a total of shares of common stock to nine members of our Board of Directors in payment of directors fees. The grant date fair value of these awards was $.
On January 7, 2025, the Company
also awarded a total of shares of restricted stock to four employees, pursuant to their employment agreements. These grants are
subject to a combination of both performance-based and time-based metrics. The grant date fair value of these restricted stock grants
was $
On March 6, 2025, the Company granted options to purchase shares of common stock to fifty-five employees under the Company’s 2023 Plan. The grant date fair value of these options amounted to approximately $ million. These grants vest ratably over .
On March 25, 2025, the Company awarded a total of shares of common stock to nine members of our Board of Directors in payment of directors fees. The grant date fair value of these awards was $.
| 23 |
On June 16, 2025, the Company granted options to purchase shares of common stock to six employees under the Company’s 2023 Plan. The grant date fair value of these options amounted to approximately $ million. These grants vest ratably over . Compensation costs for grants issued to a participant who is of retirement age are recognized at the time of the grant.
On June 16, 2025, the Company granted options to purchase shares of common stock to eight members of our Board of Directors under the 2023 Plan. The grant date fair value of these options amounted to approximately $. These grants vest ratably over .
On June 16, 2025, the Company awarded a total of shares of common stock to eight members of our Board of Directors in payment of directors fees. The grant date fair value of these awards was $.
| 2025 | ||||
| Dividend yield | % | |||
| Expected volatility | % | |||
| Risk-free interest rate | % | |||
| Expected lives | ||||
| Estimated forfeitures | -- | |||
During the six months ended
June 30, 2025, nine participants in the Company’s equity incentive plans exercised options to purchase a total of shares
of common stock at a weighted-average exercise price of $ per share for total proceeds of $
As of June 30, 2025, there were options outstanding under the Company’s equity incentive plans to purchase million shares, with an aggregate intrinsic value of $ million. On May 28, 2025, the Company’s shareholders approved an amendment to the 2023 Plan which increased the shares of common stock available for future awards under the 2023 Plan by shares. As of June 30, 2025, there were million shares available for grant under the 2023 Plan.
NOTE 10 – FAIR VALUE MEASUREMENTS
In accordance with ASC 820-10, “Fair Value Measurements and Disclosures,” the Company measures certain financial assets and liabilities at fair value on a recurring basis, including marketable securities. The fair value of these financial assets and liabilities was determined using the following inputs at June 30, 2025 and December 31, 2024 (in thousands):
| 24 |
| Fair Value Measurements at Reporting Date Using | ||||||||||||||||
| Quoted Prices | Significant | |||||||||||||||
| In Active | Other | Significant | ||||||||||||||
| Markets for | Observable | Unobservable | ||||||||||||||
| Identical Assets | Inputs | Inputs | ||||||||||||||
| Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| As of June 30, 2025: | ||||||||||||||||
| Marketable Securities - Preferred stock | $ | $ | $ | - | $ | - | ||||||||||
| Marketable Securities - Common stock | - | - | ||||||||||||||
| Total | $ | $ | $ | - | $ | - | ||||||||||
| As of December 31, 2024: | ||||||||||||||||
| Marketable Securities - Preferred stock | $ | $ | $ | - | $ | - | ||||||||||
| Marketable Securities - Common stock | - | - | ||||||||||||||
| Total | $ | $ | $ | - | $ | - | ||||||||||
In addition to the Company’s investment in marketable securities at fair value, the Company is required to disclose certain information about fair values of its other financial instruments, as defined in ASC 825-10, Financial Instruments. Estimates of fair value are made at a specific point in time, based upon, where available, relevant market prices and information about the financial instrument. Such estimates do not include any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. All of the Company’s marketable securities have quoted market prices. However, for a portion of the Company’s other financial instruments, no quoted market value exists. Therefore, estimates of fair value are necessarily based on a number of significant assumptions (many of which involve events outside the control of management). Such assumptions include assessments of current economic conditions, perceived risks associated with these financial instruments and their counterparties, future expected loss experience and other factors. Given the uncertainties surrounding these assumptions, the reported fair values represent estimates only and, therefore, cannot be compared to the historical accounting model. Use of different assumptions or methodologies is likely to result in significantly different fair value estimates.
The fair value of cash and
cash equivalents and notes receivable approximates their current carrying amounts since all such items are short-term in nature. The
fair value of variable rate loans payable approximate their current carrying amounts since such amounts payable are at approximately
a weighted-average current market rate of interest. As of June 30, 2025, the estimated fair value of fixed rate mortgages payable amounted
to $
NOTE 11 – CONTINGENCIES, COMMITMENTS AND OTHER MATTERS
The Company is subject to claims and litigation in the ordinary course of business. Management does not believe that any such claim or litigation will have a material adverse effect on the business, assets, or results of operations of the Company.
| 25 |
The Company had an agreement
with 21st Mortgage under which 21st Mortgage provided financing for home purchasers in the Company’s communities. The Company did
not receive referral fees or other cash compensation under the agreement. If 21st Mortgage made loans to purchasers and those purchasers
defaulted on their loans and 21st Mortgage repossessed the homes securing such loans, the Company agreed to purchase from 21st Mortgage
each such repossessed home for a price equal to
The Company entered into a Manufactured Home Retailer Agreement (the “MHRA”) with 21st Mortgage on January 24, 2023, under which 21st Mortgage provides financing for home purchasers in the Company’s communities. 21st Mortgage has no recourse against the Company under the MHRA except in instances where the Customer defaults before two scheduled monthly payments are paid by the purchaser and the default is based on any dispute between S&F and the purchaser surrounding the terms or execution of the purchase and sale of the home. Upon such a default, S&F is to take assignment of the loan from 21st Mortgage for the unpaid principal balance plus accrued interest. As of June 30, 2025, no loans have been originated under the MHRA.
S&F entered into a Chattel
Loan Origination, Sale and Servicing Agreement (“COP Program”) with Triad Financial Services, effective January 1, 2016.
Neither the Company, nor S&F, receive referral fees or other cash compensation under the agreement. If the loan is approved under
the COP Program, then it is originated by Triad, assigned to S&F and then assigned by S&F to the Company. Included in Notes and
Other Receivables is approximately $
The Company and one of
its subsidiaries are parties to a Limited Liability Company Agreement dated as of December 8, 2021 with an affiliate of Nuveen,
which governs the initial joint venture entity between the Company and Nuveen. The LLC Agreement provided for the parties to
initially fund up to $
| 26 |
Earlier this year, the
Company entered into a preliminary agreement with a leading national homebuilder regarding the potential formation of a joint
venture to develop approximately
NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest during
the six months ended June 30, 2025 and 2024 was $
During the six months ended
June 30, 2025 and 2024, stock compensation of $
During the six months ended
June 30, 2025 and 2024, the Company had Dividend Reinvestments of $
NOTE 13 – SUBSEQUENT EVENTS
Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were issued.
Since July 1, 2025, the Company
issued and sold an additional shares of its Common Stock under the September 2024 Common ATM Program at a weighted average price
of $ per share, generating net proceeds, after offering expenses, of $
On July 2, 2025, the Company
acquired two communities, Conowingo Court and Maybelle Manor, located in Conowingo, Maryland, for approximately $
On July 8, 2025, the
Company amended its $
On July 22, 2025, the Company
issued approximately $
| 27 |
Principal of the Series B Bonds
will be payable on June 30, 2030. The Company will pay interest on the Series B Bonds at a rate of
The Deed of Trust includes
certain customary covenants, including financial covenants requiring the Company to maintain specified ratios of debt to net operating
income, to shareholders equity and to earnings, and customary events of default. In addition, if the Company is not in compliance with
one or more of the financial covenants, it will be restricted from making dividend payments other than those necessary to comply with
the requirements to maintain its status as a REIT for income tax purposes. The covenants and events of default are substantially similar
to those in the Deed of Trust for the Company’s
Under the Deed of Trust, the Company has the right to redeem the Series B Bonds, in whole or in part, at any time on or after 60 days from July 22, 2025, the date on which the Series B Bonds were listed for trading on the Tel Aviv Stock Exchange.
The Series B Bonds and the Deed of Trust are in the Hebrew language and are governed by the laws of the State of Israel.
The Series B Bonds have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements. The Series B Bonds were offered solely to investors outside the United States and were not offered to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the Securities Act).
NOTE 14 – PROFORMA FINANCIAL INFORMATION (UNAUDITED)
The following unaudited pro forma condensed financial information reflects acquisitions through July 2025 (including the two communities in Maryland acquired on July 2, 2025). This information has been prepared utilizing the historical financial statements of the Company and the effect of additional revenue and expenses from the properties acquired during this period assuming that the acquisitions had occurred as of the first day of the applicable period, after giving effect to certain adjustments including: (a) rental and related income; (b) community operating expenses; (c) interest expense resulting from the assumed increase in mortgages and loans payable related to the new acquisitions; and (d) depreciation expense related to the new acquisitions. The unaudited pro forma condensed financial information is not indicative of the results of operations that would have been achieved had the acquisitions reflected herein been consummated on the dates indicated or that will be achieved in the future (in thousands).
| Three Months Ended | Six Months Ended | |||||||||||||||
| 6/30/25 | 6/30/24 | 6/30/25 | 6/30/24 | |||||||||||||
| Rental and Related Income | $ | $ | $ | $ | ||||||||||||
| Community Operating Expenses | ||||||||||||||||
| Net Income (Loss) Attributable to Common Shareholders | ( | ) | ||||||||||||||
| Net Income (Loss) Attributable to Common Shareholders Per Share – Basic and Diluted | $ | $ | $ | $ | ) | |||||||||||
| 28 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Overview
The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the consolidated financial statements and footnotes thereto included elsewhere herein and in the Company’s annual report on Form 10-K for the year ended December 31, 2024.
The Company is a Maryland corporation that operates as a self-administered, self-managed REIT with headquarters in Freehold, New Jersey. The Company’s primary business is the ownership and operation of manufactured home communities, which includes leasing manufactured home spaces on an annual or month-to-month basis to residents. The Company also leases manufactured homes to residents and, through its wholly-owned taxable REIT subsidiary, S&F, sells and finances the sale of manufactured homes to residents and prospective residents of our communities and for placement on customers’ privately-owned land. During 2022, the Company also formed a qualified opportunity zone fund to acquire, develop and redevelop manufactured housing communities requiring substantial capital investment and located in areas designated as qualified opportunity zones by the Treasury Department pursuant to a program authorized under the 2017 Tax Cuts and Jobs Act to encourage long-term investment in economically distressed areas. The Company currently holds a 77% interest in the qualified opportunity zone fund. The Company also has an ownership interest in and operates two communities in Florida, and one community in Pennsylvania which opened for occupancy in June 2025, through its joint venture relationship with Nuveen Real Estate. The Company has a 40% interest in the Nuveen joint venture entities. The Pennsylvania community, named Honey Ridge, is located in Honey Brook, Pennsylvania and contains 113 manufactured home sites situated on approximately 61 acres.
As of June 30, 2025, the Company operated 142 manufactured home communities, 139 of which are communities in which we own either a 100% or majority interest, containing a total of approximately 26,600 developed homesites, on which approximately 10,600 Company-owned rental homes are situated. These 142 communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama, South Carolina, Florida and Georgia. Subsequent to quarter end, the Company acquired two manufactured home communities containing 191 developed homesites, located in Conowingo, Maryland, for a total purchase price of $14.6 million (See Note 13). Including these communities, the Company currently operates 144 communities, containing 26,800 developed homesites.
| 29 |
Earlier this year, the Company entered into a preliminary agreement with a leading national homebuilder regarding the potential formation of a joint venture to develop approximately 131 acres of undeveloped land adjacent to one of the Company’s existing manufactured home communities in southern New Jersey (See Note 11 of the Notes to Consolidated Financial Statements).
The Company earns income from the operation of its manufactured home communities, leasing of manufactured homesites, the rental of manufactured homes, the sale and finance of manufactured homes and the brokering of home sales, self-storage leases, oil and gas leases, cable service agreements and from appreciation in the values of the manufactured home communities and vacant land owned by the Company. In addition, the Company receives property management and other fees from its joint venture arrangements with Nuveen and from its opportunity zone fund.
The primary focus of our business is the operation of our manufactured home communities – leasing of manufactured homesites and manufactured homes in our communities. The sale of homes is integrated with our leasing of these manufactured homes and homesites. Management views the Company’s business as a single segment based on its method of internal reporting in addition to its allocation of capital and resources. Capital and resources are allocated to further the goal of maintaining and increasing occupancy and net operating income in our communities. Our chief executive officer, with the assistance of our chief operating officer, is the principal decision-maker regarding allocation of resources. These decisions are based on the occupancy of the communities and community net operating income. Sales of homes are necessary to maintain and increase occupancy at our communities. We primarily purchase homes to fill vacant sites in the communities. These homes are either rented or sold, based on the needs of the potential residents. Although certain components of the sales operation are tracked (sales, cost of sales, etc.), separate discrete financial information for the entire sales operation is not available. Most of the personnel costs, office expenses, maintenance and other expenses are borne by the community and cannot be allocated. The components of the sales operation play no material role in decisions about resources to be allocated. Resources are allocated to maintaining and increasing occupancy and net operating income in our communities.
The Company believes that its capital structure, which allows for the ownership of assets using a balanced combination of equity obtained through the issuance of common stock, preferred stock and debt, will enhance shareholder returns as the properties appreciate over time.
The Company intends to continue to increase its real estate investments and investments in expansions. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. This has resulted in increased occupancy rates and improved operating results. For the three and six months ended June 30, 2025, rental and related income increased 9% from the prior year periods and Community Net Operating Income (“NOI”), as defined below, increased 11% and 9%, respectively. Same property NOI, which includes communities owned and operated as of January 1, 2024 (excluding Memphis Blues, Duck River Estates and River Bluff Estates), increased 10% and 9% for the three and six months ended June 30, 2025, respectively, over the prior year period driven by an 80 basis point increase in occupancy, to 88.2%, and rental rate increase of 4.2%. We have been positioning ourselves for future growth and will continue to seek opportunistic investments. In addition, on behalf of our joint venture arrangement with Nuveen Real Estate, we will seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. We will also seek additional opportunities, through our opportunity zone fund, to acquire communities that require substantial capital investment and are located in qualified opportunity zones.
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For the three and six months ended June 30, 2025, sales of manufactured homes increased 19% and 6%, respectively from the prior year periods. Demand for quality affordable housing remains healthy while inventory is scarce. Our property type offers substantial comparative value that should result in increased demand.
The macro-economic environment and current housing fundamentals continue to favor home rentals. Due to high mortgage rates and lack of inventory, the higher cost of buying a home versus renting one is at its most extreme since 1996. According to the National Association of Realtors, reported sales of existing homes fell to 4.06 million in 2024, the lowest level in nearly 30 years. We believe rental homes in a manufactured home community allow the resident to obtain the efficiencies of factory-built housing and the amenities of community living for less than the cost of other forms of affordable housing. We continue to see strong demand for rental homes. We have added an additional 237 rental homes during the first six months of 2025, net of rental home sales. This brought the total number of rental homes to approximately 10,600 rental homes, or 40.4% of total sites. Occupied rental homes represented approximately 43.2% of total occupied sites at quarter end. Occupancy in rental homes continues to be strong and was at 94.4% as of June 30, 2025. Our manufactured home communities compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital to rental home purchases, as demand dictates.
Acquisitions
The following is a summary of the communities acquired during the six months ended June 30, 2025 and during July 2025:
| Community | Date of Acquisition | State | Number of Sites | Purchase Price (in thousands) | Number of Acres | Occupancy at Acquisition | ||||||||||||||
| Cedar Grove | March 24, 2025 | NJ | 186 | $ | 17,000 | 25 | 100 | % | ||||||||||||
| Maplewood Village | March 24, 2025 | NJ | 80 | 7,600 | 13 | 100 | % | |||||||||||||
| Total as of June 30, 2025 | 266 | 24,600 | 38 | 100 | % | |||||||||||||||
| Conowingo Court (1) | July 2, 2025 | MD | 142 | 9,855 | 55 | 70 | % | |||||||||||||
| Maybelle Manor (1) | July 2, 2025 | MD | 49 | 4,770 | 28 | 100 | % | |||||||||||||
| Total 2025 to Date | 457 | $ | 39,225 | 121 | 91 | % | ||||||||||||||
(1) See Note 13 to the Consolidated Financial Statements.
See PART I, Item 1 – Business in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for a more complete discussion of the economic and industry-wide factors relevant to the Company and the opportunities and challenges, and risks on which the Company is focused.
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Significant Accounting Policies and Estimates
The discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.
On a regular basis, management evaluates our assumptions, judgments and estimates. Management believes there have been no material changes to the items that we disclosed as our significant accounting policies and estimates under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Supplemental Measures
In addition to the results reported in accordance with U.S. GAAP, management’s discussion and analysis of financial condition and results of operations include certain non-U.S. GAAP financial measures that in management’s view of the business we believe are meaningful as they allow the investor the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flows of the portfolio. These non-U.S. GAAP financial measures as determined and presented by us may not be comparable to related or similarly titled measures reported by other companies, and include Community Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders (“FFO”) and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).
We define Community NOI as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. We believe that Community NOI is helpful to investors and analysts as a direct measure of the actual operating results of our manufactured home communities, rather than our Company overall. Community NOI should not be considered a substitute for the reported results prepared in accordance with U.S. GAAP. Community NOI should not be considered as an alternative to net income (loss) as an indicator of our financial performance, or to cash flows as a measure of liquidity; nor is it indicative of funds available for our cash needs, including our ability to make cash distributions.
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The Company’s Community NOI for the three and six months ended June 30, 2025 and 2024 is calculated as follows (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| 6/30/25 | 6/30/24 | 6/30/25 | 6/30/24 | |||||||||||||
| Rental and Related Income | $ | 56,165 | $ | 51,494 | $ | 110,739 | $ | 101,823 | ||||||||
| Less: Community Operating Expenses | 23,047 | 21,595 | 46,076 | 42,692 | ||||||||||||
| Community NOI | $ | 33,118 | $ | 29,899 | $ | 64,663 | $ | 59,131 | ||||||||
We assess and measure our overall operating results based upon FFO, an industry performance measure which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by Nareit, represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the U.S. (“U.S. GAAP”), excluding certain gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities, and the gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the Nareit FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of Nareit FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Nareit created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.
FFO and Normalized FFO (i) do not represent cash flow from operations as defined by U.S. GAAP; (ii) should not be considered as an alternative to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity.
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The Company’s FFO and Normalized FFO attributable to common shareholders for the three and six months ended June 30, 2025 and 2024 are calculated as follows (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| 6/30/25 | 6/30/24 | 6/30/25 | 6/30/24 | |||||||||||||
| Net Income (Loss) Attributable to Common Shareholders | $ | 2,532 | $ | 527 | $ | 2,261 | $ | (5,737 | ) | |||||||
| Depreciation Expense | 15,739 | 15,001 | 32,402 | 29,742 | ||||||||||||
| Depreciation Expense from Unconsolidated Joint Ventures | 221 | 204 | 438 | 401 | ||||||||||||
| Loss on Sales of Investment Property and Equipment | 36 | 10 | 37 | 13 | ||||||||||||
| (Increase) Decrease in Fair Value | ||||||||||||||||
| of Marketable Securities | 175 | (3,338 | ) | 1,737 | 2,031 | |||||||||||
| Loss on Sales of Marketable Securities, net | -0- | 3,778 | -0- | 3,778 | ||||||||||||
| FFO Attributable to Common Shareholders | 18,703 | 16,182 | 36,875 | 30,228 | ||||||||||||
| Adjustments: | ||||||||||||||||
| Amortization of Financing Costs | 647 | 607 | 1,246 | 1,163 | ||||||||||||
| Non- Recurring Other Expense (1) | 102 | 18 | 151 | 433 | ||||||||||||
| Normalized FFO Attributable to Common Shareholders | $ | 19,452 | $ | 16,807 | $ | 38,272 | $ | 31,824 | ||||||||
| (1) | Consists of one-time legal and professional fees ($102 and $151, respectively) for the three and six months ended June 30, 2025. Consisted of one-time legal fees ($18 and $51, respectively) and costs associated with the liquidation/sale of inventory in a particular sales center ($0 and $382, respectively) for the three and six months ended June 30, 2024. |
The following are the cash flows provided by (used in) operating, investing and financing activities for the six months ended June 30, 2025 and 2024 (in thousands):
| Six Months Ended | ||||||||
| 6/30/25 | 6/30/24 | |||||||
| Operating Activities | $ | 37,195 | $ | 37,605 | ||||
| Investing Activities | (100,648 | ) | (58,758 | ) | ||||
| Financing Activities | 42,125 | 7,598 | ||||||
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Changes In Results Of Operations
Rental and related income increased 9% from $51.5 million for the three months ended June 30, 2024 to $56.2 million for the three months ended June 30, 2025. Rental and related income increased 9% from $101.8 million for the six months ended June 30, 2024 to $110.7 million for the six months ended June 30, 2025. This increase was due to acquisitions, increases in rental rates and same property occupancy and additional rental homes. The Company has been raising rental rates by approximately 5% to 6% annually at most communities. Same property occupancy has increased 80 basis points from 87.4% as of June 30, 2024 to 88.2% at June 30, 2025. Occupied rental homes increased 4% from approximately 9,600 homes at June 30, 2024 to 10,000 homes at June 30, 2025.
Community operating expenses increased 7% from $21.6 million for the three months ended June 30, 2024 to $23.0 million for the three months ended June 30, 2025. Community operating expenses increased 8% from $42.7 million for the six months ended June 30, 2024 to $46.1 million for the six months ended June 30, 2025. These increases were due to acquisitions and an increase in payroll costs, real estate taxes, snow removal and water and sewer costs.
Community NOI increased 11% from $29.9 million for the three months ended June 30, 2024 to $33.1 million for the three months ended June 30, 2025. Community NOI increased 9% from $59.1 million for the six months ended June 30, 2024 to $64.7 million for the six months ended June 30, 2025. These increases were primarily due to acquisitions, increases in rental rates, occupancy and rental homes. The Company’s operating expense ratio (defined as community operating expenses divided by rental and related income) was 41.0% and 41.6% for the three and six months ended June 30, 2025, respectively, and 41.9% for the three and six months ended June 30, 2024. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Since most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue to improve. Due to the Company’s ability to increase its rental rates annually (subject to limitations on rent increases in certain jurisdictions), increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income from continuing operations.
Sales of manufactured homes increased 19% from $8.8 million, or 105 homes, for the three months ended June 30, 2024 to $10.5 million, or 102 homes, for the three months ended June 30, 2025. The average sales price was $103,000 and $84,000 for the three months ended June 30, 2025 and 2024, respectively. Cost of sales of manufactured homes amounted to $7.1 million and $5.5 million for the three months ended June 30, 2025 and 2024, respectively. The gross profit percentage was 32% and 38% for the three months ended June 30, 2025 and 2024, respectively. Selling expenses, which includes salaries, commissions, advertising and other miscellaneous expenses, amounted to $1.8 million and $1.7 million for the three months ended June 30, 2025 and 2024, respectively. Gain from the sales operations (defined as sales of manufactured homes, less cost of sales of manufactured homes, less selling expenses, less interest on the financing of inventory) amounted to $1.3 million or 13% of total sales and $1.4 million or 16% of total sales for the three months ended June 30, 2025 and 2024, respectively. Gain from the sales operations, excluding interest on the financing of inventory, amounted to $1.5 million or 14% of total sales and $1.6 million or 18% of total sales for the three months ended June 30, 2025 and 2024, respectively.
Sales of manufactured homes increased 6% from $16.2 million, or 200 homes, for the six months ended June 30, 2024 to $17.1 million, or 173 homes, for the six months ended June 30, 2025. The average sales price was $99,000 and $81,000 for the six months ended June 30, 2025 and 2024, respectively. Cost of sales of manufactured homes amounted to $11.5 million and $11.0 million for the six months ended June 30, 2025 and 2024, respectively. The gross profit percentage was 33% and 32% for the six months ended June 30, 2025 and 2024, respectively. Selling expenses amounted to $3.5 million and $3.4 million for the six months ended June 30, 2025 and 2024, respectively. Gain from the sales operations amounted to $2.0 million or 11% of total sales and $1.4 million or 9% of total sales for the six months ended June 30, 2025 and 2024, respectively. Gain from the sales operations, excluding interest on the financing of inventory, amounted to $2.2 million or 13% of total sales and $1.8 million or 11% of total sales for the six months ended June 30, 2025 and 2024, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising and promotion, are fixed.
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Conventional home prices have flattened as sellers begin to outnumber buyers. However, housing market supply remains tight nationally and interest rates remain elevated. The inherent relative affordability of our property type has become more and more apparent, which should result in increased demand. The Company continues to be optimistic about future sales and rental prospects given the fundamental need for affordable housing. The Company believes that sales of new homes produce new rental revenue and represent an investment in the upgrading of our communities.
General and administrative expenses increased 14% from $5.5 million for the three months ended June 30, 2024 to $6.3 million for the three months ended June 30, 2025. General and administrative expenses increased 13% from $10.9 million for the six months ended June 30, 2024 to $12.3 million for the six months ended June 30, 2025. General and administrative expenses increased primarily due to an increase in payroll and related personnel costs and professional fees. General and administrative expenses as a percentage of gross revenue (total income plus interest, dividends and other income) was 9.0% and 9.2% for the three and six months ended June 30, 2025, respectively, as compared to 8.8% and 8.9% for the three and six months ended June 30, 2024, respectively.
Depreciation expense increased 5% from $15.0 million for the three months ended June 30, 2024 to $15.7 million for the three months ended June 30, 2025. Depreciation expense increased 9% from $29.7 million for the six months ended June 30, 2024 to $32.4 million for the six months ended June 30, 2025. This increase was primarily due to acquisitions and the increase in rental homes and expansions during 2024 and 2025.
Interest income increased 37% from $1.5 million for the three months ended June 30, 2024 to $2.1 million for the three months ended June 30, 2025. Interest income increased 41% from $3.1 million for the six months ended June 30, 2024 to $4.3 million for the six months ended June 30, 2025. This increase was primarily due to an increase in the average balance of notes receivable from $78.1 million at June 30, 2024 to $92.3 million at June 30, 2025. The weighted average interest rate earned on these notes receivable increased 10 basis points and were approximately 7.1% and 7.0% as of June 30, 2025 and 2024, respectively.
Dividend income remained relatively stable for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.
The increase (decrease) in fair value of marketable securities amounted to a decrease of $175,000 and an increase of $3.3 million for the three months ended June 30, 2025 and 2024, respectively. The decrease in fair value of marketable securities amounted to $1.7 million and $2.0 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had total net unrealized losses of $40.3 million in its REIT securities portfolio.
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Interest expense, including amortization of financing costs, remained relatively stable for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Interest expense, including amortization of financing costs, decreased 10% from $14.8 million for the six months ended June 30, 2024 to $13.3 million for the six months ended June 30, 2025. This decrease was due to a decrease in the average balance of mortgages and loans from $579.2 million at June 30, 2024 to $535.8 million at June 30, 2025. The weighted average interest rate on our total debt was 4.6% at June 30, 2025 and 2024.
Changes in Financial Condition
Total investment property increased 4% or $71.1 million during the six months ended June 30, 2025. In addition to adding 237 rental homes, net of 78 rental homes sold, to its communities during the six months ended June 30, 2025, the Company is preparing sites for additional homes to be added during the year. The Company also purchased two communities for approximately $24.6 million during the six months ended June 30, 2025. Occupied rentals increased by 259 rental homes from December 31, 2024 to June 30, 2025. The Company’s occupancy rate on its rental homes portfolio increased 40 basis points and was 94.4% at June 30, 2025 as compared to 94.0% at December 31, 2024.
Marketable securities decreased 5% or $1.7 million during the six months ended June 30, 2025 due to the net decrease in fair value.
Land development costs increased 83% or $28.2 million during the six months ended June 30, 2025 due to an increase in expansion projects.
Mortgages payable, net of unamortized debt issuance costs, increased 9% or $44.7 million during the six months ended June 30, 2025, due to a new mortgage of approximately $101.4 million offset by mortgage payoffs of approximately $49.5 million and principal payments of approximately $5.7 million.
Loans payable, net of unamortized debt issuance costs, decreased 2% or $640,000 during the six months ended June 30, 2025.
Liquidity and Capital Resources
The Company’s focus is on real estate investments, including investment in rental homes. The Company’s principal liquidity demands have historically been, and are expected to continue to be, distributions to the Company’s shareholders, acquisitions, capital improvements, development and expansions of properties, debt service, purchases of manufactured home inventory and rental homes, financing of manufactured home sales and payments of expenses relating to real estate operations. We anticipate that the liquidity demands of the recent properties acquired will be met by the operations of these acquisitions. The Company’s ability to generate cash adequate to meet these demands is dependent primarily on income from its real estate investments, the sale of real estate investments, refinancing of mortgage debt, leveraging of real estate investments, availability of bank borrowings, lines of credit, and other incurrence of indebtedness, proceeds from the DRIP, and access to the capital markets, including through its Common and Preferred ATM Programs.
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In addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including acquisitions. The Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or lines of credit, incur other indebtedness, finance and refinance its properties, and/or raise capital through the DRIP and capital markets, including through the Company’s ATM Programs. In order to provide financial flexibility to opportunistically access the capital markets, on September 16, 2024, the Company terminated its successful then-existing at-the-market Common Stock ATM Program and implemented a new September 2024 Common ATM Program which allows the Company to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time through the Distribution Agents. As of June 30, 2025, $49.4 million of common stock remained eligible for sale under the September 2024 Common ATM Program. Additionally, on March 5, 2025, the Company terminated its then-existing 2023 Preferred ATM Program and implemented a new 2025 Preferred ATM Program which allows the Company to offer and sell shares of the Company’s Series D Preferred Stock having an aggregate sales price of up to $100 million from time to time through B. Riley, as Distribution Agent.
The Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. As part of this plan, we intend to continue to seek opportunities, through our opportunity zone fund, to acquire communities that require substantial capital investment and are located in qualified opportunity zones. In addition, on behalf of our joint venture with Nuveen Real Estate, we will continue to seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. There is no guarantee that any of these additional opportunities will materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate portfolio and success of our joint venture depends on the availability of suitable properties which meet the Company’s investment criteria and appropriate financing. Competition in the market areas in which the Company operates is significant. To the extent that funds or appropriate communities are not available, fewer acquisitions will be made.
The Company continues to strengthen its capital and liquidity positions. During the six months ended June 30, 2025, the Company issued and sold 2.3 million shares of Common Stock through our September 2024 Common ATM Program, at a weighted average price of $17.74 per share, generating gross proceeds of $40.4 million and net proceeds of $39.6 million, after offering expenses. Subsequent to quarter end, the Company issued and sold an additional 160,000 shares of its Common Stock under the September 2024 Common ATM Program at a weighted average price of $16.99 per share, generating gross and net proceeds, after offering expenses, of $2.7 million.
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In addition, during the six months ended June 30, 2025, the Company issued and sold 49,000 shares of Series D Preferred Stock through our 2023 Preferred ATM Program, at a weighted average price of $23.03 per share, generating gross proceeds of $1.1 million and net proceeds of $982,000, after offering expenses.
The Company also raised $4.8 million from the issuance of common stock in the DRIP during the six months ended June 30, 2025, which included dividend reinvestments of $1.7 million. Dividends paid on the common stock for the six months ended June 30, 2025 were $36.7 million, including the $1.7 million reinvested. Dividends paid on the Series D Preferred Stock for the six months ended June 30, 2025 totaled $10.3 million.
Subsequent to quarter end, the Company issued approximately $80.2 million aggregate principal amount of its 5.85% Series B Bonds due 2030 in an offering to investors in Israel. The net proceeds, after deducting offering discounts, fees and other transaction costs, are estimated to be approximately $75.2 million. See Note 13 for additional information.
Net cash provided by operating activities amounted to $37.2 million and $37.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had cash and cash equivalents of $79.2 million, marketable securities of $30.2 million and $260 million available on our credit facility, with a potential total availability of up to $500 million pursuant to an accordion feature. We also had approximately $139 million available on our revolving lines of credit for the financing of home sales and purchases of inventory and $55 million available on our line of credit secured by rental homes and rental homes leases.
As of quarter end, the Company owned and operated 142 communities (including three communities owned by the Company’s joint venture with Nuveen, in which the Company has a minority interest), of which 57 are unencumbered. Subsequent to quarter end, the Company acquired two additional manufactured home communities in Maryland which are also unencumbered. Except for communities in the borrowing base for our unsecured credit facility, these unencumbered communities can be used to raise additional funds. Our marketable securities, unencumbered properties, and lines of credit provide the Company with additional liquidity. The Company holds a 40% equity interest in the entities formed under its joint venture with Nuveen, which owns three newly developed communities that are unencumbered.
As of June 30, 2025, the Company had total assets of $1.6 billion and total liabilities of $690.3 million. The Company’s net debt (net of unamortized debt issuance costs and cash and cash equivalents) to total market capitalization as of June 30, 2025 was approximately 31% and the Company’s net debt, less securities to total market capitalization as of June 30, 2025 was approximately 29%. As of June 30, 2025, the Company had fourteen mortgages totaling $75.6 million due within the next 12 months and sixteen mortgages totaling $99.7 million within the next 18 months. The Company believes that it has the ability to meet its obligations and to generate funds for new investments.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
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Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this Form 10-Q, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, intentions, plans, objectives, goals, strategies, future events, performance and underlying assumptions and other statements that are not historical facts. Forward-looking statements can be identified by their use of forward-looking words, such as “may,” “will,” “anticipate,” “expect,” “believe,” “intend,” “plan,” “should,” “seek” or comparable terms, or the negative use of those words, but the absence of these words does not necessarily mean that a statement is not forward-looking.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described below and under the headings “Business”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports filed with the Securities and Exchange Commission. These and other risks, uncertainties and factors could cause our actual results to differ materially from those included in any forward-looking statements we make. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from our expectations include, among others:
| ● | changes in the real estate market conditions and general economic conditions; |
| ● | the inherent risks associated with owning real estate, including local real estate market conditions, governing laws and regulations affecting manufactured housing communities and illiquidity of real estate investments; |
| ● | increased competition in the geographic areas in which we own and operate manufactured housing communities; |
| ● | our ability to continue to identify, negotiate and acquire manufactured housing communities and/or vacant land which may be developed into manufactured housing communities on terms favorable to us; |
| ● | our ability to maintain or increase rental rates and occupancy levels; |
| ● | changes in market rates of interest; |
| ● | inflation and increases in costs, including personnel, insurance and the cost of purchasing manufactured homes; |
| ● | our ability to purchase manufactured homes for rental or sale; |
| ● | our ability to repay debt financing obligations; |
| ● | our ability to refinance amounts outstanding under our credit facilities at maturity on terms favorable to us; |
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| ● | our ability to comply with certain debt covenants; |
| ● | our ability to integrate acquired properties and operations into existing operations; |
| ● | the availability of other debt and equity financing alternatives; |
| ● | continued ability to access the debt or equity markets; |
| ● | the loss of any member of our management team; |
| ● | our ability to maintain internal controls and processes to ensure all transactions are accounted for properly, all relevant disclosures and filings are made in a timely manner in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected; |
| ● | the ability of manufactured home buyers to obtain financing; |
| ● | the level of repossessions by manufactured home lenders; |
| ● | market conditions affecting our investment securities; |
| ● | changes in federal or state tax rules or regulations that could have adverse tax consequences; |
| ● | our ability to qualify as a real estate investment trust for federal income tax purposes; |
| ● | litigation, judgments or settlements, including costs associated with prosecuting or defending claims and any adverse outcomes; |
| ● | changes in real estate and zoning laws and regulations; |
| ● | legislative or regulatory changes, including changes to laws governing the taxation of REITs; |
| ● | risks and uncertainties related to pandemics or other highly infectious or contagious diseases; and |
| ● | those risks and uncertainties referenced under the heading “Risk Factors” contained in this Form 10-Q and the Company’s other filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024. |
You should not place undue reliance on these forward-looking statements, as events described or implied in such statements may not occur. The forward-looking statements contained in this Form 10-Q speak only as of the date hereof and the Company expressly disclaims any obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
There have been no material changes to information required regarding quantitative and qualitative disclosures about market risk from the end of the preceding year to the date of this Quarterly Report on Form 10-Q.
| Item 4. | Controls and Procedures |
The Company’s President and Chief Executive Officer (principal executive officer) and the Company’s Executive Vice President and Chief Financial Officer (principal financial and accounting officer), with the assistance of other members of the Company’s management, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, the Company’s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of the end of such period.
Changes In Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarterly period ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 41 |
PART II – OTHER INFORMATION
| Item 1. | Legal Proceedings |
None.
| Item 1A. | Risk Factors |
There have been no material changes to information required regarding risk factors from the end of the preceding year to the date of this Quarterly Report on Form 10-Q. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A – “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect the Company’s business, financial condition or future results. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None.
| Item 3. | Defaults Upon Senior Securities |
None.
| Item 4. | Mine Safety Disclosures |
None.
| Item 5. | Other Information |
| (a) | Information Required to be Disclosed in a Report on Form 8-K, but not Reported – None. |
| (b) | Material Changes to the Procedures by which Security Holders may Recommend Nominees to the Board of Directors – None. |
| Item 6. | Exhibits |
| 42 |
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| UMH PROPERTIES, INC. | |||
| DATE: | August 6, 2025 | By | /s/ Samuel A. Landy |
| Samuel A. Landy | |||
| President and Chief Executive Officer | |||
| (Principal Executive Officer) | |||
| DATE: | August 6, 2025 | By | /s/ Anna T. Chew |
| Anna T. Chew | |||
| Executive Vice President and Chief Financial Officer | |||
| (Principal Financial and Accounting Officer) | |||
| 43 |