UMH Properties(UMH) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents UMH Properties, Inc.'s unaudited consolidated financial statements, including Balance Sheets, Income, Equity, Cash Flows, and detailed notes on organization and policies Consolidated Balance Sheets | Metric | June 30, 2025 (Unaudited) (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | | ASSETS | | | | Net Investment Property and Equipment | $1,270,250 | $1,228,899 | | Cash and Cash Equivalents | $79,235 | $99,720 | | Marketable Securities at Fair Value | $30,159 | $31,883 | | Inventory of Manufactured Homes | $38,688 | $34,982 | | Land Development Costs | $62,057 | $33,868 | | Total Assets | $1,624,022 | $1,563,728 | | LIABILITIES | | | | Mortgages Payable, net | $530,193 | $485,540 | | Loans Payable, net | $27,639 | $28,279 | | Series A Bonds, net | $101,327 | $100,903 | | Total Liabilities | $690,264 | $647,819 | | SHAREHOLDERS' EQUITY | | | | Total Shareholders' Equity | $933,758 | $915,909 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $1,624,022 | $1,563,728 | - Total Assets increased by $60.3 million (3.85%) from December 31, 2024, to June 30, 2025, primarily driven by an increase in Net Investment Property and Equipment and Land Development Costs[8] - Total Liabilities increased by $42.4 million (6.54%) over the six-month period, mainly due to an increase in Mortgages Payable[10] Consolidated Statements of Income (Loss) | Metric (in thousands, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Rental and Related Income | $56,165 | $51,494 | $110,739 | $101,823 | | Sales of Manufactured Homes | $10,478 | $8,834 | $17,129 | $16,185 | | Total Income | $66,643 | $60,328 | $127,868 | $118,008 | | Total Expenses | $54,013 | $49,307 | $105,664 | $97,715 | | Net Income | $7,605 | $5,181 | $12,415 | $3,556 | | Net Income (Loss) Attributable to Common Shareholders | $2,532 | $527 | $2,261 | $(5,737) | | Net Income (Loss) Attributable to Common Shareholders Per Share – Basic and Diluted | $0.03 | $0.01 | $0.03 | $(0.08) | - Net Income Attributable to Common Shareholders significantly increased for both the three-month period (from $0.527 million to $2.532 million) and six-month period (from a loss of $5.737 million to income of $2.261 million) ended June 30, 2025, compared to the prior year[13] - Total Income grew by 10.5% for the three months and 8.4% for the six months ended June 30, 2025, primarily driven by increases in Rental and Related Income and Sales of Manufactured Homes[13] Consolidated Statements of Shareholders' Equity | Metric (in thousands) | Balance December 31, 2024 | Balance June 30, 2025 | | :------------------------------------------------ | :------------------------ | :-------------------- | | Common Stock (Amount) | $8,191 | $8,474 | | Preferred Stock Series D | $320,572 | $321,804 | | Additional Paid-In Capital | $610,630 | $627,068 | | Total Shareholders' Equity | $915,909 | $933,758 | - Total Shareholders' Equity increased by $17.8 million from December 31, 2024, to June 30, 2025, primarily due to increases in Additional Paid-In Capital and Preferred Stock[16] - Common Stock issued through At-The-Market Offerings, net, contributed $9.2 million and $30.2 million to Additional Paid-In Capital for the periods ending March 31, 2025, and June 30, 2025, respectively[16] Consolidated Statements of Cash Flows | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net Cash Provided by Operating Activities | $37,195 | $37,605 | | Net Cash Used in Investing Activities | $(100,648) | $(58,758) | | Net Cash Provided by Financing Activities | $42,125 | $7,598 | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(21,328) | $(13,555) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $87,483 | $50,882 | - Net cash used in investing activities significantly increased to $(100.6) million for the six months ended June 30, 2025, from $(58.8) million in the prior year, driven by higher purchases of manufactured home communities and investment property and equipment[19] - Net cash provided by financing activities saw a substantial increase to $42.1 million for the six months ended June 30, 2025, compared to $7.6 million in the prior year, primarily due to proceeds from mortgages and equity programs[19] Notes To Consolidated Financial Statements NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES UMH Properties, Inc. operates as a REIT, owning and managing manufactured home communities, with 142 communities and 26,600 homesites - As of June 30, 2025, UMH Properties, Inc. operated 142 manufactured home communities, comprising approximately 26,600 developed homesites and 10,600 Company-owned rental homes across 12 states[21] - Subsequent to quarter end, the Company acquired two additional communities in Maryland, increasing its total to 144 communities with approximately 26,800 developed homesites[21] - The Company maintains a 77% controlling interest in its qualified opportunity zone fund, established in 2022 to acquire and develop manufactured housing communities in economically distressed areas[22] NOTE 2 – NET INCOME (LOSS) PER SHARE This note details basic and diluted net income (loss) per share calculations, including common stock equivalents from employee stock options | Metric | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income (Loss) Attributable to Common Shareholders Per Share – Basic and Diluted | $0.03 | $0.03 | $0.01 | $(0.08) | | Weighted Average Common Shares Outstanding (Basic) | 83,974 | 83,233 | 71,418 | 70,291 | | Weighted Average Common Shares Outstanding (Diluted) | 84,779 | 84,051 | 71,884 | 70,700 | - Common stock equivalents from employee stock options included in diluted EPS calculations were 805,000 shares for the three months and 818,000 shares for the six months ended June 30, 2025[44] - For the six months ended June 30, 2024, 409,000 common stock equivalents were excluded from diluted EPS calculation as they were anti-dilutive due to a net loss[44] NOTE 3 – INVESTMENT PROPERTY AND EQUIPMENT The Company expanded its investment property portfolio through acquisitions, adding 266 homesites in New Jersey and 191 in Maryland - On March 24, 2025, the Company acquired Cedar Grove and Maplewood Village in Mantua, New Jersey, for approximately $24.6 million, adding 266 newly developed and 100% occupied homesites[46][47] - Subsequent to quarter end, on July 2, 2025, the Company acquired Conowingo Court and Maybelle Manor in Conowingo, Maryland, for approximately $14.6 million, adding 191 homesites with 79% occupancy[48] NOTE 4 – MARKETABLE SECURITIES The Company's marketable securities portfolio, primarily REIT stocks, had a fair value of $30.2 million with net unrealized losses - As of June 30, 2025, marketable securities had a fair value of $30.2 million, representing 1.4% of undepreciated assets[49] - The Company recorded total net unrealized losses of $40.3 million in its REIT securities portfolio as of June 30, 2025[50] - A decrease of $1.7 million in the fair value of marketable securities was recorded for the six months ended June 30, 2025[50] NOTE 5 – INVESTMENT IN JOINT VENTURES UMH Properties, Inc. maintains a 40% interest in joint ventures with Nuveen Real Estate, acquiring and developing communities - The initial joint venture with Nuveen Real Estate, established in December 2021, involves 60% funding by Nuveen and 40% by UMH, with UMH serving as managing member and receiving property management and asset management fees[52] - This joint venture acquired Sebring Square ($22.2 million) and Rum Runner ($15.1 million) in Florida, totaling 363 developed homesites[58] - A new joint venture entity formed in November 2023, focused on development, opened the Honey Ridge community in Pennsylvania in June 2025, featuring 113 manufactured home sites[61] NOTE 6 – OPPORTUNITY ZONE FUND UMH Properties, Inc. invested $8.0 million in the UMH OZ Fund, LLC, holding a 77% interest to acquire and develop communities - UMH invested $8.0 million in the UMH OZ Fund, LLC in July 2022, holding a 77% controlling interest[63] - The OZ Fund acquired Garden View Estates in Orangeburg, South Carolina, for approximately $5.2 million in August 2022[63] - In January 2023, the OZ Fund acquired Mighty Oak in Albany, Georgia, for approximately $3.7 million[63] NOTE 7 – DEBT The Company's debt includes loans payable, Series A Bonds, and mortgages payable, with mortgages increasing and new Series B Bonds | Debt Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Loans Payable, net | $27,639 | $28,279 | | Series A Bonds, net | $101,327 | $100,903 | | Mortgages Payable, net | $530,193 | $485,540 | | Weighted Average Loan Maturity (Mortgages) | 5.4 years | 4.4 years | - Mortgages Payable, net, increased by $44.7 million (9.2%) during the six months ended June 30, 2025, primarily due to a new $101.4 million Fannie Mae credit facility, partially offset by $49.5 million in mortgage payoffs[72][73] - Subsequent to quarter end, on July 22, 2025, the Company issued $80.2 million of 5.85% Series B Bonds due 2030, with estimated net proceeds of $75.2 million[71][117] NOTE 8 – SHAREHOLDERS' EQUITY The Company increased its common stock dividend, raised equity through ATM programs and DRIP, and increased authorized shares - On April 1, 2025, the Company increased its quarterly common stock dividend by $0.01 to $0.225 per share, representing a 4.7% increase and an annual rate of $0.90 per share[75] - For the six months ended June 30, 2025, the Company issued 2.3 million shares of Common Stock under its September 2024 Common ATM Program, generating $39.6 million in net proceeds[80] - The Company issued 49,000 shares of Series D Preferred Stock under the 2023 Preferred ATM Program, generating $982,000 in net proceeds for the six months ended June 30, 2025[85] - Authorized shares were increased by 25,000,000 for Common Stock and 5,000,000 for Series D Preferred Stock on March 5, 2025[89] NOTE 9 – STOCK BASED COMPENSATION The Company recognized $6.5 million in stock-based compensation costs, including restricted stock and stock option grants - Total stock-based compensation costs recognized were $3.4 million for the three months and $6.5 million for the six months ended June 30, 2025, with $1.5 million and $2.9 million capitalized, respectively[90] - The Company awarded 26,000 shares of restricted stock ($473,000 fair value) and 179,944 shares of restricted stock ($3.3 million fair value) to employees in January 2025[91][92] - Stock options to purchase 541,500 shares ($1.9 million fair value) and 325,000 shares ($1.1 million fair value) were granted to employees in March and June 2025, respectively[93][95] - Shareholders approved an amendment to the 2023 Plan, increasing shares available for future awards by 2,250,000, with 1.8 million shares remaining available as of June 30, 2025[99] NOTE 10 – FAIR VALUE MEASUREMENTS The Company measures financial assets and liabilities at fair value, with marketable securities at $30.2 million and mortgages at $530.3 million | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Marketable Securities - Preferred stock | $541 | $509 | | Marketable Securities - Common stock | $29,618 | $31,374 | | Total Marketable Securities (Level 1) | $30,159 | $31,883 | - As of June 30, 2025, the estimated fair value of fixed rate mortgages payable was $530.3 million, while their carrying value was $535.5 million[102] NOTE 11 – CONTINGENCIES, COMMITMENTS AND OTHER MATTERS The Company faces ordinary litigation, has repurchase obligations for defaulted loans, and commitments for joint ventures - The Company has repurchase obligations for defaulted manufactured home loans under agreements with 21st Mortgage, with total loan balances of approximately $2.1 million and $479,000 as of June 30, 2025[105] - The Company acquired approximately $91.7 million in loans under the Chattel Loan Origination, Sale and Servicing Agreement (COP Program) with Triad Financial Services as of June 30, 2025[107] - A preliminary agreement exists with a national homebuilder for a potential joint venture to develop 131 acres in southern New Jersey for luxury single-family homes, with due diligence extended to September 9, 2025[110] NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION Supplemental cash flow information details cash paid for interest, capitalized costs, and dividend reinvestments | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Cash paid for interest | $14,100 | $15,800 | | Interest cost capitalized to land development | $2,500 | $2,400 | | Stock compensation capitalized to land development | $2,900 | $1,200 | | Dividend Reinvestments | $1,700 | $1,500 | NOTE 13 – SUBSEQUENT EVENTS Subsequent to June 30, 2025, the Company raised capital, acquired communities, and issued $80.2 million in Series B Bonds - Since July 1, 2025, the Company sold an additional 160,000 shares of Common Stock under the September 2024 Common ATM Program, generating $2.7 million in net proceeds[114] - On July 2, 2025, the Company acquired two communities, Conowingo Court and Maybelle Manor in Maryland, for approximately $14.6 million, adding 191 homesites[115] - On July 22, 2025, the Company issued $80.2 million of 5.85% Series B Bonds due 2030 in Israel, with estimated net proceeds of $75.2 million[117] NOTE 14 – PROFORMA FINANCIAL INFORMATION (UNAUDITED) Unaudited pro forma financial information reflects acquisitions through July 2025, showing pro forma Net Income of $1.573 million | Pro Forma Metric (in thousands, except per share) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | | Rental and Related Income | $56,449 | $111,711 | | Community Operating Expenses | $23,249 | $46,476 | | Net Income (Loss) Attributable to Common Shareholders | $2,242 | $1,573 | | Net Income (Loss) Attributable to Common Shareholders Per Share – Basic and Diluted | $0.03 | $0.02 | - The pro forma financial information includes the effect of additional revenue and expenses from properties acquired through July 2025, assuming acquisitions occurred as of the first day of the applicable period[123] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section reviews UMH Properties, Inc.'s financial performance, covering revenue growth, operating metrics, capital, liquidity, and investments Overview UMH Properties, Inc. operates as a REIT, acquiring and improving manufactured home communities to increase occupancy and NOI - As of June 30, 2025, the Company operated 142 manufactured home communities, expanding to 144 communities with 26,800 developed homesites post-quarter end[127] - Rental and related income increased 9% for both the three and six months ended June 30, 2025, compared to the prior year periods[133] - Same property NOI increased 10% and 9% for the three and six months ended June 30, 2025, respectively, driven by an 80 basis point increase in occupancy to 88.2% and a 4.2% rental rate increase[133] - The Company added 237 rental homes during the first six months of 2025, bringing the total to approximately 10,600 rental homes, with an occupancy rate of 94.4% as of June 30, 2025[136] Acquisitions The Company completed acquisitions in New Jersey and Maryland, adding 457 sites for a total of $39.225 million | Community | Date of Acquisition | State | Number of Sites | Purchase Price (in thousands) | Occupancy at Acquisition | | :---------------- | :------------------ | :---- | :-------------- | :---------------------------- | :----------------------- | | Cedar Grove | March 24, 2025 | NJ | 186 | $17,000 | 100% | | Maplewood Village | March 24, 2025 | NJ | 80 | $7,600 | 100% | | Conowingo Court | July 2, 2025 | MD | 142 | $9,855 | 70% | | Maybelle Manor | July 2, 2025 | MD | 49 | $4,770 | 100% | | Total 2025 to Date | | | 457 | $39,225 | 91% | Significant Accounting Policies and Estimates The Company's financial statements adhere to U.S. GAAP, with no material changes to accounting policies from 2024 - Management believes there have been no material changes to the significant accounting policies and estimates disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[140] Supplemental Measures The Company uses non-U.S. GAAP measures like Community NOI and FFO to provide insights into operating performance | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Community NOI | $33,118 | $29,899 | $64,663 | $59,131 | | FFO Attributable to Common Shareholders | $18,703 | $16,182 | $36,875 | $30,228 | | Normalized FFO Attributable to Common Shareholders | $19,452 | $16,807 | $38,272 | $31,824 | - Net Cash Provided by Operating Activities was $37.2 million for the six months ended June 30, 2025, a slight decrease from $37.6 million in the prior year[148] - Net Cash Used in Investing Activities increased to $(100.6) million for the six months ended June 30, 2025, from $(58.8) million in the prior year, reflecting increased investment in properties[148] Changes In Results Of Operations The Company saw significant growth in rental income, driven by acquisitions, rate increases, and occupancy - Rental and related income increased 9% for both the three and six months ended June 30, 2025, due to acquisitions, 5-6% annual rental rate increases, and an 80 basis point increase in same property occupancy to 88.2%[149] - Community operating expenses increased 7% for the three months and 8% for the six months ended June 30, 2025, primarily due to acquisitions, payroll, real estate taxes, snow removal, and water/sewer costs[150] - Sales of manufactured homes increased 19% for the three months and 6% for the six months ended June 30, 2025, with average sales prices rising to $103,000 and $99,000, respectively[152][153] - Interest income increased 37% for the three months and 41% for the six months ended June 30, 2025, driven by an increase in the average balance of notes receivable to $92.3 million[158] Changes in Financial Condition Total investment property increased by $71.1 million, driven by new homes and acquisitions, with surging land costs - Total investment property increased by $71.1 million (4%) during the six months ended June 30, 2025, driven by the addition of 237 rental homes and the acquisition of two communities for $24.6 million[163] - Occupied rental homes increased by 259 from December 31, 2024, to June 30, 2025, with the rental home occupancy rate rising to 94.4%[163] - Land development costs increased by $28.2 million (83%) during the six months ended June 30, 2025, due to an increase in expansion projects[164] - Mortgages payable, net, increased by $44.7 million (9%) during the six months ended June 30, 2025, primarily from a new $101.4 million mortgage, offset by payoffs and principal payments[165] Liquidity and Capital Resources The Company maintains strong liquidity and capital resources, funding operations, acquisitions, and growth through debt and equity - For the six months ended June 30, 2025, the Company generated $39.6 million in net proceeds from its Common Stock ATM Program and $982,000 from its Preferred Stock ATM Program[169][171] - Net cash provided by operating activities was $37.2 million for the six months ended June 30, 2025[174] - As of June 30, 2025, the Company had $79.2 million in cash and cash equivalents, $30.2 million in marketable securities, and $260 million available on its unsecured credit facility[174] - The Company's net debt to total market capitalization was approximately 31%, and net debt less securities to total market capitalization was approximately 29% as of June 30, 2025[176] Off-Balance Sheet Arrangements The Company reported that it does not have any off-balance sheet arrangements - The Company does not have any off-balance sheet arrangements[177] Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company reported no material changes to its market risk disclosures since the prior year-end - 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[184] Item 4. Controls and Procedures The Company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[185] - No material changes in the Company's internal control over financial reporting occurred during the quarterly period ended June 30, 2025[186] PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company reported no legal proceedings - The Company reported no legal proceedings[189] Item 1A. Risk Factors The Company reported no material changes to risk factors disclosed in its Annual Report on Form 10-K for 2024 - There have been no material changes to the risk factors from the end of the preceding year to the date of this Quarterly Report on Form 10-Q[190] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company reported no unregistered sales of equity securities or use of proceeds - The Company reported no unregistered sales of equity securities and use of proceeds[191] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities - The Company reported no defaults upon senior securities[192] Item 4. Mine Safety Disclosures The Company reported no mine safety disclosures - The Company reported no mine safety disclosures[193] Item 5. Other Information This section reports no undisclosed Form 8-K information or changes to director nominee procedures - No information required to be disclosed in a Form 8-K was not reported[196] - No material changes to the procedures by which security holders may recommend nominees to the Board of Directors[196] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including Series B Bonds Deed, credit facility amendment, and certifications - Exhibits include the Deed of Trust for the 5.85% Series B Bonds due 2030, an amendment to the Master Credit Facility Agreement, and certifications from the President and CEO and Chief Financial Officer[196] - The filing also includes Inline XBRL documents for the Consolidated Balance Sheets, Statements of Income (Loss), Statements of Shareholders' Equity, Statements of Cash Flows, and Notes to Consolidated Financial Statements[196][197] SIGNATURES The report was signed on August 6, 2025, by the President and CEO and EVP and CFO, certifying submission - The report was signed on August 6, 2025, by Samuel A. Landy, President and Chief Executive Officer, and Anna T. Chew, Executive Vice President and Chief Financial Officer[200]