According to a report on left-leaning CNN on 7.12.2023, renters are being hit harder by inflation than homeowners are. “Renters and homeowners are experiencing inflation differently, according to new data from Bank of America — and, unsurprisingly, renters are taking the hit.” “Using Bank of America internal data to identify homeowners and renters by housing-related payments in bank accounts — mortgage payments, homeowner association fees or rent payments — analysts found that a wedge has opened between spending by renters and homeowners. Renters are seeing weaker spending growth outside of housing. Two things are causing the split in spending.” “First, while the majority of homeowners’ monthly payments have not risen, the cost of renting has surged,” and second: “…the majority of US homeowners with outstanding mortgage balances have fixed interest rates…” That sort of news ought to be positive for the manufactured home industry’s various front-line manufactured home sellers. While UMH Properties says their sales have risen, a closer look at their own data reveals that their sales are nevertheless seemingly muted.
Part I is the UMH Property press release for 7.5.2023.
Part II is additional information with an analysis in brief of UMH’s data by MHProNews.
Part III is our Daily Business News on MHProNews macro- and manufactured housing-linked stocks and Real Estate Investment Trusts (REITs) markets report.
Part I
UMH Properties, Inc. Second Quarter 2023 Operations Update
07/05/2023
FREEHOLD, NJ, July 05, 2023 (GLOBE NEWSWIRE) — UMH Properties, Inc. (NYSE:UMH) (TASE:UMH), a real estate investment trust (REIT) specializing in the ownership and operation of manufactured home communities, is providing investors with an update on our second quarter 2023 operating results.
Our communities are rapidly selling and renting new homes, which has resulted in increased occupancy and income. Additionally, as homes in inventory are occupied our high-cost floorplan lines are paid down and replaced with permanent capital at more attractive rates.
During the quarter, approximately 400 rental homes in inventory were occupied making them income producing and 44 new homes were sold, creating additional site rent. This resulted in same property income growth year-over-year of approximately 8.6% and a 190-basis point improvement in occupancy.
Year-to-date, approximately 600 rental homes in inventory were rented making them income producing and 83 new homes were sold, creating additional site rent. Our increase in occupancy and our annual rent increases drove an increase in same property income of approximately 7.4%. This increase in occupancy, together with rent increases implemented in the first and second quarter, generated an increase in monthly rental charges of approximately $900,000 as of July 1, 2023, compared to January 1, 2023. Our current inventory sits at approximately 700 homes, which is still above our normal levels, but is rapidly decreasing as we continue to fill over 100 homes a month.
Sales of manufactured homes for the quarter increased to approximately $8.2 million in the second quarter of 2023, as compared to $7.0 million last year, resulting in an increase of 17%. Year-to-date, gross sales of manufactured homes increased to $15.5 million, as compared to $11.3 million last year, resulting in an increase of 37%. Our sales demand remains strong, and we have over $3 million in deals in our pipeline.
During the quarter, we raised approximately $45.1 million of common equity and $15.6 million of preferred equity through our ATM programs. This capital was utilized to pay down higher cost floorplan lines. Additionally, we have repaid all $58.5 million of our maturing mortgages, and have no mortgage loans maturing next year.
It should be noted that our financial statement closing and review procedures for the quarter ended June 30, 2023 are not yet complete and, as a result, the financial information set forth above reflects our preliminary estimates with respect to such information, based on information currently available to management, and may vary from our actual financial results as of and for the quarter ended June 30, 2023. UMH’s full Second Quarter 2023 results will be released on Tuesday, August 8, 2023, after the close of trading on the New York Stock Exchange and will be available on the Company’s website at www.umh.reit, in the Financials section. Senior management will discuss the results, current market conditions and future outlook on Wednesday, August 9, 2023, at 10:00 a.m. Eastern Time.
UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates 135 manufactured home communities containing approximately 25,700 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama, South Carolina and Georgia. UMH also has an ownership interest in and operates two communities in Florida, containing 363 sites, through its joint venture with Nuveen Real Estate.
Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. …##
Part II – Additional Information with More MHProNews Analysis and Commentary
According to Yahoo Finance is the following 1-year stock trend for UMH Properties as of the close of business on the markets yesterday 7.12.2023.
A case can be made that UMH Properties has done a good job of executing their game plan of buying properties that often had higher rates of vacancies and filling them with rentals.
That said, per inside sources at UMH, in recent years Samuel “Sam” Landy, J.D., President and CEO of UMH has been given advice by ‘left leaning’ advisors on several initiatives that may now be biting the firm. For example. As so called ‘green’ initiatives by Democrats has at least for now seemingly gained an upper hand in Washington, D.C. and in states like New York, properties that were ‘smart’ investments just a few years ago may been losing some of their luster in the eyes of those who buy into the ‘green’ agenda. That may be impacting their stock’s price.
Then, instead of focusing on selling homes and teaching their team how to effectively market and sell more homes so that more people become manufactured homeowners, UMH Properties began to execute a strategy that was more rental focused. Their own quarterly report above makes that clear. While it is true that the numbers can be impressive for such a strategy, it is also true that this is a shift away from what UMH and so many other manufactured home community operators relied upon for decades. Namely, owner occupied manufactured housing.
Consider their own numbers:
- “44 new homes were sold” at “135 manufactured home communities” for the quarter. That’s a scant 0.1086419753 new manufactured home units per month per property per month. Ouch.
- “Year-to-date, approximately 600 rental homes in inventory were rented” divide that by 135 communities x 6 months and that’s 0.74074074074 units per month per property (less than 3/4 of a home per month per property. Ouch).
- UMH said “current inventory sits at approximately 700 homes.” That may shed light on why this community operator may not be buying as much new inventory as they were previously.
UMH Properties has gone from quietly grumbling about MHI a few years ago to supporting them big time on initiatives such as displaying manufactured homes on the Washington Mall during the HUD-NAHB Innovative Housing Showcase. While MHI postures being nonpartisan, and they certainly give money via their MHI PAC to candidates from both major parties, they seem to have a Clayton-Berkshire bent for the political left, though they would likely deny it. As anti-Biden sentiment in the U.S. grows, so too has anti-ESG sentiment. Again, insiders at UMH, and their own SEC related investor relations documents reflect the push there for ESG. The stance is oddly contradictory of their Marcellus and other energy-potential proximity properties. While BlackRock’s Larry Fink has said that he is moving away from ESG pushing lingo, a closer look appears to suggest that Fink is merely changing the verbiage, but still pushing the agenda.
Fink’s moves often garner outsized attention by publicly traded firms, which may include UMH. A clear eyed look at how so-called red-states are pushing back on Fink and ESG should be a warning sign for UMH and others in MHVille.
UMH is uniquely positioned to lead among manufactured home community operators, because they have largely avoided the kinds of controversies that so many of their peers at MHI have run afoul of in recent years.
As the apparently artificial shine on the MHI apple fades, UMH would be well advised to consider leading a break with that group and potentially forging a post-production trade group for firms that avoid the kinds of scandals and risks that others at MHI are arguably engaged in.
As with other stocks noted in Part III below, MHProNews holds no position in this firm. Our expert views comes from years of hands-on experience in manufactured home communities, retail, marketing, sales training, and related issues such as financing. If Landy and their leadership team look at who has per insiders been giving them ‘lefty’ advice, they may be able to root out, pivot, and successfully change course. Note Ohio is one of the states where UMH has locations that is moving more toward the political right. The Landys have worked too long and too hard to let a few perhaps well meaning, but nevertheless arguably mistaken voices, lead them deeper into the darkness linked to the arguably corrupt MHI tunnel. ##
Part III. Daily Business News on MHProNews Markets and Headline News Segment
Headlines from left-of-center CNN Business – from the evening of 7.12.2023
- Inflation just fell…
- And that reading comes after the Fed paused rate hikes. Should it resume hiking?
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Notice: the graphic below can be expanded to a larger size.
See the instructions below the graphic below or click the image and follow the prompts.
Updated
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- NOTE 1: Chart above of manufactured housing connected equities includes the Canadian stock, ECN, which purchased Triad Financial Services, a manufactured home industry finance lender.
- NOTE 2: Drew changed its name and trading symbol at the end of 2016 to Lippert (LCII).
- NOTE 3: Deer Valley was largely taken private, say company insiders in a message to MHProNews on 12.15.2020, but there are still some outstanding shares of the stock from the days when it was a publicly traded firm. Thus, there is still periodic activity on DVLY.
- Note 4: some recent or related reports to the REITs, stocks, and other equities named above follow in the reports linked below.
-
2023 …Berkshire Hathaway is the parent company to Clayton Homes, 21st Mortgage, Vanderbilt Mortgage and other factory-built housing industry suppliers.
· LCI Industries, Patrick, UFPI, and LP each are suppliers to the manufactured housing industry, among others.
· AMG, CG, and TAVFX have investments in manufactured housing related businesses. For insights from third-parties and clients about our publisher, click here.
2022 was a tough year for many stocks. Unfortunately, that pattern held true for manufactured home industry (MHVille) connected stocks too. See the facts, linked above.
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Disclosure. MHProNews holds no positions in the stocks in this report.
· For expert manufactured housing business development or other professional services, click here.
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- Note 1: MHVille means manufactured housing industry, MHVille also means artificially smaller manufactured housing (MH) industry,
- Note 2: Manufactured housing, production, factories, retail, dealers, manufactured home, communities, passive mobile home park investing, suppliers, brokers, finance, financial services, macro-markets, manufactured housing stocks, Manufactured Home Communities Real Estate Investment Trusts, MHC REITs.
That’s a wrap on this installment of “News Through the Lens of Manufactured Homes and Factory-Built Housing” © where “We Provide, You Decide.” © (Affordable housing, manufactured homes, stock, investing, data, metrics, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)
By L.A. “Tony” Kovach – for MHProNews.
Tony earned a journalism scholarship along with numerous awards in history. There have been several awards, honors and numerous public recognition for his achievements in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. Kovach is a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com, which is ranked as the runaway most read trade media in modern manufactured housing history. This article reflects the LLC’s and/or the writer’s editorial views and may or may not reflect the views of sponsors or supporters.
