UMH Properties(US:UMH)2024-05-03 18:24Financial Data and Key Metrics Changes - Normalized FFO for Q1 2024 was $15 million or $0.22 per share, compared to $11.7 million or $0.20 per share for Q1 2023, representing a 10% increase per share [44] - Rental and related income for the quarter was $50.3 million, an increase of 11% from $45.3 million a year ago, primarily due to increased occupancy and rental rates [44][49] - Community NOI increased by 16% for the quarter from $26 million in 2023 to $30 million in 2024 [15] Business Line Data and Key Metrics Changes - The rental home portfolio now owns over 10,000 units, with a 95.1% occupancy rate, up from 93.7% year-over-year [50] - Same property income increased by 10%, while expenses grew only 3%, resulting in a 16% same property NOI growth [51] - The community expense ratio improved from 44.3% last year to 41.9% this year [39] Market Data and Key Metrics Changes - Overall occupancy increased by 220 basis points from 84.9% last year to 87.1% this year, with an increase of 598 units [49] - The company has 3,300 vacant sites to fill and 2,100 acres of land available for development, indicating strong growth potential in the affordable housing market [60][62] Company Strategy and Development Direction - The company aims to combat the affordable housing crisis by expediting the approval of new land lease communities and developing 800 new rental homes this year [17][60] - The focus remains on internal and external growth opportunities, with a strong balance sheet to support acquisitions and expansions [43][53] - The company is optimistic about the demand for affordable housing, with waiting lists for homes in many communities [62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining occupancy rates between 94% to 95% and achieving 5% rent increases [4][39] - The company anticipates continued double-digit increases in operating income until vacant lots are filled, projecting a 5% rent increase annually [118] - Management highlighted the ongoing housing shortage and the need for increased production of affordable housing units [139] Other Important Information - Community operating expenses increased by 5% during the quarter, mainly due to payroll costs and real estate taxes [15] - The company has a total market capitalization of approximately $2.1 billion, reflecting a 12% increase from the previous year [77] - The weighted average interest rate on total debt decreased to 4.56% from 4.9% year-over-year [56] Q&A Session Summary Question: Can you talk about the acquisition pipeline today? - Management indicated that they are in due diligence for two properties in Maryland, with some issues being resolved that have delayed closing [86] Question: What are you seeing in terms of rental velocity and seasonality? - Management noted that while there may be seasonality, they are currently filling homes as quickly as they are available, with strong demand [87] Question: How do you feel about the average length of stay for tenants? - Management prefers longer tenancies as they reduce costs and provide stability, despite potential for higher rent increases with turnover [92] Question: What is the target for new home sales this year? - The target for new home sales is approximately $200 million, slightly above last year's figures [116] Question: How sustainable is the 16% same-store NOI growth? - Management believes that double-digit same-store NOI growth is sustainable due to ongoing occupancy increases and planned expansions [118]