UMH PROPERTIES, INC. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Financial Results: Normalized FFO for Q4 2024 was $0.24 per share (+4% Y/Y), full year 2024 was $0.93 per share (+8% Y/Y). Same property income and NOI growth driven by occupancy increases.
• Capital Raises: Opportunistically raised equity at or near 52-week high and used common ATM to raise capital for investments in acquisitions, rental homes, and expansions.
• Business Plan: Value-add strategy to improve occupancy, revenue, and value. Focus on 2,400 acres of vacant land, 3,300 vacant sites, and expansions. Social mission of providing affordable housing.
• Product Innovations: Worked on duplex manufactured homes to increase density in urban areas and solar shingle homes in factories to reduce tenant expenses and costs.

Segment Performance

• Rental Homes: Added 565 homes in 2024, now own 10,300 rental homes with 94% occupancy. Anticipate adding 800+ homes in 2025. Revenue contribution from rental homes is part of overall community income.
• Sales: Broke all-time sales record in 2024 with gross sales of $33.5 million (8% increase from 2023). Sold 258 used homes (avg price $50,000) and 136 new homes (avg price $151,000). Gross sales margin was 35%.
• Community Operations: Same property income increased 8% in Q4 2024 and 9% for the year. Same property NOI increased 8% in Q4 and 10% for the year. Community NOI for Q4 2024 was $31.1 million (vs $28.7 million in 2023), and for the full year 2024, it was $119.7 million (vs $108.4 million in 2023).

Guidance

• 2025 normalized FFO guidance range: $0.96 to $1.04 per share, with midpoint at $1.00 per share.
• Anticipate similar or improved same property operating results in 2025, including occupancy growth and 5% rent increases across the portfolio.
• Plan to add 800+ rental homes in 2025 and expect sales growth with new expansions, leveraging recently opened high-demand locations.

Risks

• Risks associated with forward-looking statements, including market uncertainties and potential impacts of interest rate changes.
• Execution risks related to acquisitions, developments, and the timing of rental home and sales growth.
• Weather-related impacts on operating expenses, such as increased snow removal costs in winter.

Question and Answer

• Q: Color on four acquisitions under contract? A: Four communities under contract, two in New Jersey (266 sites, 100% occupied, purchase price $24.6 million) and two in Maryland (457 sites, 90% occupied, purchase price $39.1 million). Blended cap rate on these communities is approximately 5.5%.
• Q: Refinancing mortgages with Fannie Mae? A: Expect interest rates on refinanced mortgages to be under 6%, with proceeds from refinancing exceeding current balances.
• Q: G&A nonrecurring items? A: G&A increased 8% in Q4 2024 primarily due to additional bonuses from good operating results, with a similar range expected in 2025 depending on inflation and other factors.